31–40 of 352 posts
Have there been any experiments in legislating ceilings for housing prices? If so, what has been the effect?
Take a look at Venezuela. Any sort of artificial price ceiling leads to black markets and insufficient supply.
Same thing in San Francisco.
Apartments have been the last frontier of expensive mass-produced products. Hopefully this is the end, and not just a temporary blip.
Have there been any experiments in legislating ceilings for housing prices? If so, what has been the effect?
The effect of a price ceiling is often just to shrink the supply of any units whose price would be above the price ceiling, while consumer queue themselves. It would be the same as rationing. And since the opportunity cost of time of richer folks is lower, not to mention that they're more likely to be socially connected, they end up displacing poorer consumers.
The past 2 years for me have been about the enormous exposure of how rent has been going up and house affordability has become a real problem world-wide. As legislation started to get promoted in different countries (Vancouver's foreign tax, Berlin's Airbnb ban, Argentina rent-caps) I always thought that the origin of this entire problem is the low rates for lending, and that these laws would only be a hinderance to…
I agree that laws passed to deal with high housing costs are often counterproductive in the long run. The classic example is rent control. Can you explain your theory that low rates drive high rent inflation? Seems like it would be the opposite for several reasons: low rates are associated with low inflation, low rates make it much cheaper to build and operate apartment buildings, etc.
But if anyone's seen some decent analysis that says otherwise, I'd love to see it.
Where in Boston could someone possibly find a two bedroom for $2600? Shenanigans
I know nothing about the San Francisco housing market apart from what I've heard in discussions here on HN. The received wisdom here seemed to be that powerful NIMBY lobbies in SF were preventing needed development and causing the sky-high rent. But this article is talking about an "historic construction boom". Did something change regarding development in SF? Or was the NIMBY effect always a bit over-stated? Anyone…
You can get a dip in average rent without (sufficiently) dropping bottom quartile rents, which is what NIMBYism tends to block, by having a lot of nice condos built.
The top quartile of rents dips heavily as places jockey for condo buyers, everyone moves in to a nicer place as the wave spreads, but the price at the bottom remains (mostly) the same (even if unit quality goes up), because the oldest buildings get torn down at the end of the wave, rather than genuinely increasing the housing supply (because land to develop on is still hard to come by).
So it's possible average rents dipped, but service workers still struggle to afford rent, even if they struggle in a nicer unit.
Tl;dr: I expect the building that happened raised low-end apartment quality rather than drop price, even if average rent is down. Because NIMBYism.
The past 2 years for me have been about the enormous exposure of how rent has been going up and house affordability has become a real problem world-wide. As legislation started to get promoted in different countries (Vancouver's foreign tax, Berlin's Airbnb ban, Argentina rent-caps) I always thought that the origin of this entire problem is the low rates for lending, and that these laws would only be a hinderance to…
I agree that laws passed to deal with high housing costs are often counterproductive in the long run. The classic example is rent control. Can you explain your theory that low rates drive high rent inflation? Seems like it would be the opposite for several reasons: low rates are associated with low inflation, low rates make it much cheaper to build and operate apartment buildings, etc.
There are other things related to the housing market, like construction lagging demand(the U.S. is not building as many dwelling units as purely demographic demand needs) or demand being pro-cyclical.
As far as i can tell, developers are picking up the pace and the whole situation might fix itself with a simple market correction. If housing prices dropped 5% one year, demand would lower and might match supply. Ofc, i cant tell the future, but there are reasons to believe the situation we have is only temporary, and raising rates and increasing supply might calm the whole situation down.
Apartments have been the last frontier of expensive mass-produced products. Hopefully this is the end, and not just a temporary blip.
Its the land not the apartment which is expensive. Land, especially in cities, is finite. This makes it different to other mass produced products
Can this please be re-titled as a US study? First blush of the article title made me go "What? Seriously?"; the two markets I look at first are London and Sydney.
I've heard similar reports about the London rental market, but then again when it comes to the housing market, the UK press report on every scrap of noisy data they can get their hands on. London has also seen a huge glut of (supposedly) high-end property come online. Builders are struggling to sell, so they're now starting to offer discounts on the new housing stock [1]. If what the article says is true, I would be…
So I guess this is a case of convergence, higher priced housing is dropping and lower priced housing is increasing. This effect will probably become more pronounced if interest rates start to rise.
Zumper is pretty inaccurate when it comes to SF I have found. The influx of new residents still vastly outpaces new construction + people leaving SF. As such, rents are not going down. The easiest way to verify this is just to ask anyone trying to rent in SF.
I want a 2bd place soon, so I'm hoping that all the young professionals who came in 5-6 years ago are lowering rents by moving to the suburbs to pump out babies.