Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The end of the housing supply debate (maybe)

cityobservatory.org

Post reply on HN
Print view View original

71–80 of 126 posts

Re: The end of the housing supply debate (maybe)

#71

Post by quotemstr »

timr wrote: post #64
quotemstr wrote: post #62

Earlier quoted context omitted.

See, that's the problem: anti-housing advocates have the wrong moral object in mind. There's no use caring about "neighborhoods". A neighborhood doesn't dream of owning a house one day. A neighborhood doesn't have kids that have to squeeze into a single bedroom. A neighborhood feels neither happy nor sad and doesn't care whether it's preserved. Interfering with the market almost always produces poor global outcomes,…

"See, that's the problem: anti-housing advocates have the wrong moral object in mind. There's no use caring about "neighborhoods" Yeah, fuck 'em. For that matter, let's not care about cities or states, either. As long as the national mean rent goes down, everything is dandy, right? After all, we all know that real estate is global. Let the poor move to North Dakota. /s When you have two affordable neighborhoods in a…

If you want a perpetual right to a piece of real estate, buy it. I'm a renter myself. I accept uncertainty as part of the bargain.

Part of renting is accepting that your tenure in a particular location might last only as long as your lease. If we had it your way and gave renters a de-facto property right to stay in their apartments as long as they liked, we would slow the development of cities and put pressure on the remaining housing stock. The renters benefit and the rest of society loses. That's unfair.

So, yes, "fuck 'em". Fuck people who want to be selfish and profit at society's expense. Selfishness is exactly what schemes like rent control, prop 13, Oregon's weird tax cap, and so on all enable.

Re: The end of the housing supply debate (maybe)

#72

Post by OrwellianChild »

slg wrote: post #52
quotemstr wrote: post #6

That there was ever a debate at all is still astounding. Economics has fuzzy areas, but basic principles of supply and demand are very well-established. It's clearly nonsensical to imagine that we can simultaneously lower prices, limit supply, and allow for demand growth. The longevity of this bizarre idea demonstrates how strongly political ideas of how the world ought to work blind us to how the world does work. We…

While I agree with your general point, I think both you and the article are glossing over part of the debate. The opponents of adding market rate supply that I have seen aren't opposed to new supply in a vacuum. They are opposed to letting the market dictate the supply because the market usually creates supply at the top. The costs of buying land and building a mid-market building is not that much cheaper than buildi…

You're right that new construction favors luxury housing, but I don't agree that this inevitably leads to displacement of other residents. Most of the effects of "trickle-down housing" are seen in the same market as older buildings must lower rental prices as the condition/amenities age and compare poorly to the newer/nicer buildings. Individuals must move as new construction replaces an existing building, but there will be other units available to move to in a market that is actually allowing new construction. The only situation that causes significant gentrification is when new housing cannot be built and prices rise due to concentrated demand...

Re: The end of the housing supply debate (maybe)

#73

Post by OrwellianChild »

iandanforth wrote: post #36

I live in a very interesting area, across the street from me is a different city with housing costs roughly 10x the costs of mine. I am daily confronted with the absurdity of pricing of housing. In addition as I've watched rents around me rise, and anticipated my own rent rising, I wonder at the expectation that we should continually get less for more. My house isn't getting any newer after all. If my employer decide…

> In addition as I've watched rents around me rise, and anticipated my own rent rising, I wonder at the expectation that we should continually get less for more. My house isn't getting any newer after all.

I think your central confusion stems from the idea that the price of rent is in any way related to the original cost to buy the land and build the building you are renting. It is not.

Rents move to stay competitive with the demand in the area. If more people want to live there, rents will rise. If vacancies increase, rents will fall until all the units are filled. Landlords have no leverage against renters in this regard - if you can find a similar rental for cheaper in your area, you are free to move or negotiate down your rents with your current landlord.

Attempts to legislate this market dynamic away just risk guessing demand incorrectly and limiting prices inefficiently, which results in less housing stock and more expensive/scarce rentals in all cases.

Re: The end of the housing supply debate (maybe)

#74

Post by OrwellianChild »

RangerScience wrote: post #50

So, it sounds like: 1) Building any kind of more housing is beneficial 2) Building subsidized housing is more beneficial than market-rate housing This leaves me with two questions: 1) Does subsidized have double the effect because you can build twice as many? 2) Zoning laws seem to prevent cheap housing from being cost-effective for developers to build. If you made it possible to build cheap housing (in LA, maybe by…

In order:

1) Yes.

2) More beneficial in limiting displacement only. No considerations of cost.

Answer 1) Subsidized housing provides more benefit because it provides immediate housing stock at lower prices, replacing any stock lost to luxury construction. It is definitely not cheaper or easier to build more - the same areas that need subsidized housing are the ones where housing in general is more expensive to build.

Answer 2) Absolutely yes, zoning laws increase the cost of construction, leading to more expensive housing units. Explicit recommendations in favor of more affordable housing include:

A) Removing parking requirements

B) Allowing more density (more floors, smaller required sq. ft per unit - yes, this is a thing, and fewer yards, set-backs, etc.)

Re: The end of the housing supply debate (maybe)

#75

Post by dredmorbius »

quotemstr wrote: post #6

That there was ever a debate at all is still astounding. Economics has fuzzy areas, but basic principles of supply and demand are very well-established. It's clearly nonsensical to imagine that we can simultaneously lower prices, limit supply, and allow for demand growth. The longevity of this bizarre idea demonstrates how strongly political ideas of how the world ought to work blind us to how the world does work. We…

To offer a very slim thread of credibility to the argument, there are cases in which supply and demand interact ... oddly. The canonical case is probably traffic: increasing highway capacity increases congestion.

But, beyond the topical similarity, the cases fall apart. The situation with traffic involves only a small incremental cost being born by each driver, whilst in housing, the internalised costs are large. The drivers of housing inflation -- the interest of numerous parties in increasing asset values (free money for no work!) most especially -- are also highly different.

Actually, that last factor tends to make me suspect that the housing arguments are at least in a significant number of cases insincere.

Re: The end of the housing supply debate (maybe)

#76

Post by dredmorbius »

sliverstorm wrote: post #21

This doesn't seem to address high end housing vs (unsubsidized) low end housing. Is a hundred new units with marble countertops as good, holistically, as a hundred with laminate? I think a lot of the opposition revolves around frustration with developers building luxury when the intent of the given policy was low or mid market units, combined with a belief that units targeted at the needy market segment would be the…

From TFA: "Two market rate houses reduce displacement as much as one affordable house".

Re: The end of the housing supply debate (maybe)

#77

Post by OrwellianChild »

IpV8 wrote: post #20
drawnwren wrote: post #8

Earlier quoted context omitted.

The article you're commenting on is literally the citation for this. Here's his citation, http://www.sightline.org/2017/09/21/yes-you-can-build-your-w...

This kind of mentality that someone's news article counts as a source is poisonous. People read these articles and think that because a few facts have hyperlinks then they must be valid. Half of those links on that page go to other blogs and news site. One even goes to Youtube. Blogs and news agencies don't count as citations to base an argument on. Policy needs to start at peer reviewed research and build up from th…

What, other than an article summarizing research, could possibly be provided as citation? Fund me some peer-reviewed research. In the meantime, we'll just have to make policy by flipping a coin, as there is clearly no other standard of knowledge available to us. /s

Re: The end of the housing supply debate (maybe)

#78

Post by OrwellianChild »

Danihan wrote: post #67
ouid wrote: post #61

Earlier quoted context omitted.

just build more housing.

Not everyone wants to live in a super over-populated / densely populated area... In general, more saturation of humans == more problems. People make fun of NIMBY, but at the end of the day who better to manage the neighborhood than the people who are already invested in it..?

You wish to extend control of property beyond the borders of what they own outright?

Re: The end of the housing supply debate (maybe)

#79

Post by d1zzy »

AnimalMuppet wrote: post #68
quotemstr wrote: post #51

Earlier quoted context omitted.

It's not as contingent as you think. We normally model the supply curve as a line going up and to the right, indicating that price increases stimulate the creation of additional supply. The demand curve has the opposite slope and effect. These curves form an "effective field theory". They explain what's happening at a high level. In reality, supply and demand curves aren't necessarily linear, and at small scales, the…

Not necessarily. There are things called "Veblen goods". For them, the demand rises as the price rises, because the higher price confers additional status. You pretty much have to be in prestige, luxury goods for this to happen, though, so it's (probably) not relevant to a discussion of entry-level housing.

That doesn't seem to apply in this case however. This article is talking about people paying >$1 mil for shitty shacks in Silicon Valley. It seems very hard to think of people buying those because it confers "status", actually, anecdotal evidence from my coworkers and I, we are ashamed of telling folks back home how much we payed or showing pictures of our new house.

Re: The end of the housing supply debate (maybe)

#80

Post by hanoz »

quotemstr wrote: post #6

That there was ever a debate at all is still astounding. Economics has fuzzy areas, but basic principles of supply and demand are very well-established. It's clearly nonsensical to imagine that we can simultaneously lower prices, limit supply, and allow for demand growth. The longevity of this bizarre idea demonstrates how strongly political ideas of how the world ought to work blind us to how the world does work. We…

The problem the the "it's the supply and demand stupid" justification for high house prices is that it ignores the fact that on what's supposed to be the demand side we have a massive oversupply of borrowed-into-existence virtually free money.
Post reply on HN