Home ownership is the West’s biggest economic-policy mistake • Hacker News Board

Re: Home ownership is the West’s biggest economic-policy mistake

#21

Post by tpm » Tue, Apr 20, 2021, 7:11 AM UTC

tgv wrote: post #5

The title is clickbait, I presume. I can't read the full article either, but in the introduction it already says that the problem is that not enough houses have been built. And in my opinion, that plus regulation failure are at the root of the problem. Who actually owns the houses is of lesser importance.

It's not of lesser importance, because who owns the housing (whether houses or flats) has implications for the politics of building new housing. If the owners are individuals, they often go the way of NIMBY, which in turns slows the (social and economic) development of the area. We can also think of housing prices (or rents) as taxes, which if the pace of new buildings slows and the area is still in demand is rising.

But if the owner is the city or state, they can plan and build accordingly. So in the city I live in after the fall of communism almost all of the state-owned flats were sold to tenants very cheaply which was great, but now it's very hard to build anything new. Even old flats are horribly expensive, which is great for sellers like me, but not great for people that want to come here to work and live.

On the other hand, we have cities like Vienna where a siginificant part of the housing stock is owned by the city. They are able to build new neighbourhoods. As a result, while my city is much smaller and less economically interesting, the price of housing is now near Vienna's levels, if not even higher. That's not good for the economy of our city either.

Re: Home ownership is the West’s biggest economic-policy mistake

#22

Post by Twisell » Tue, Apr 20, 2021, 7:11 AM UTC

WalterBright wrote: post #16

stepbeek wrote: post #7

I agreee that speculation on property solely as an asset is an issue, but don't really agree with the premise early in the article around the growth of cities. The argument strikes me as something like this: * An increase in the size of urban areas would increase GDP by 4% * Anything which blocks this growth is bad * Home ownership blocks this increase * Therefore, home ownership is bad The implicit premise is that a…

> I agreee that speculation on property solely as an asset is an issue Speculation helps create a liquid market and stabilize prices.

Jargon an technicalities help creating bubble and loosing focus on what matters for humankind.

Re: Home ownership is the West’s biggest economic-policy mistake

#23

Post by polskibus » Tue, Apr 20, 2021, 7:11 AM UTC

Animats wrote: post #4

What's this obsession with increasing housing density? Population in the developing world is leveling off. Most of the developed world is already at "peak child".[1] Housing shortages come from migration to cities, not more people. [1] https://ourworldindata.org/peak-child

In addition to that, efficient city is in contrast to what psychology says humans need for happiness, ie. space, access to green land, low noise, low pollution environment. Maybe we should convert to many small cities, allow telecommute instead of piling people on top of each other?

Re: Home ownership is the West’s biggest economic-policy mistake

#24

Post by flukus » Tue, Apr 20, 2021, 7:11 AM UTC

Animats wrote: post #4

What's this obsession with increasing housing density? Population in the developing world is leveling off. Most of the developed world is already at "peak child".[1] Housing shortages come from migration to cities, not more people. [1] https://ourworldindata.org/peak-child

Overall population growth is leveling off, but urbanization (https://en.wikipedia.org/wiki/Urbanization) continues, cities keep growing and rural areas keep shrinking, at least relatively.

There's possibly a degree of causation too, people delaying or avoiding having families because they aren't affordably in the cities that their jobs are in.

Re: Home ownership is the West’s biggest economic-policy mistake

#25

Post by shuckles » Tue, Apr 20, 2021, 7:12 AM UTC

perfunctory wrote: post #8

> From Sydney to Sydenham, fiddly regulations protect an elite of existing homeowners and prevent developers from building the skyscrapers and flats that the modern economy demands. The resulting high rents and house prices make it hard for workers to move to where the most productive jobs are, and have slowed growth. Following this logic from the ancient Greek times, by now we would have thousand stories skyscrapers…

Unfortunately, Athens became economically irrelevant two millennia before we had the technology to try this experiment.

Re: Home ownership is the West’s biggest economic-policy mistake

#26

Post by docflabby » Tue, Apr 20, 2021, 7:13 AM UTC

Owner occupation of property vs rent seeking ownership are 2 very different paradigms.

The former results in community, and investment and a large number of beneficial economic effects.

The later is simply an economic parasite

Only have to look to the past to see what happened with farming. Substance farming and feudaliam was inefficient and disincentified investment.(why improve land you don't own and someone else reaps the benefits of what you sow?)

Re: Home ownership is the West’s biggest economic-policy mistake

#27

Post by shuckles » Tue, Apr 20, 2021, 7:14 AM UTC

tpm wrote: post #21

tgv wrote: post #5

The title is clickbait, I presume. I can't read the full article either, but in the introduction it already says that the problem is that not enough houses have been built. And in my opinion, that plus regulation failure are at the root of the problem. Who actually owns the houses is of lesser importance.

It's not of lesser importance, because who owns the housing (whether houses or flats) has implications for the politics of building new housing. If the owners are individuals, they often go the way of NIMBY, which in turns slows the (social and economic) development of the area. We can also think of housing prices (or rents) as taxes, which if the pace of new buildings slows and the area is still in demand is rising.…

I believe the majority of new development in Vienna continues to be market rate and targeted at moderate income and above households. However, the backstop of state run housing encourages development generally and gives all people a stake in the land.

Re: Home ownership is the West’s biggest economic-policy mistake

#28

Post by bserge » Tue, Apr 20, 2021, 7:14 AM UTC

tgv wrote: post #5

The title is clickbait, I presume. I can't read the full article either, but in the introduction it already says that the problem is that not enough houses have been built. And in my opinion, that plus regulation failure are at the root of the problem. Who actually owns the houses is of lesser importance.

Yeah, it's clickbait. It's not homeownership that's the problem, it's the regulations (tbf, put in place mostly by homeowners) and the always ongoing concentration of the population.

Housing prices in/near cities is a worldwide problem. Renting could be cheaper, though, but that can be done without social housing imo.

Re: Home ownership is the West’s biggest economic-policy mistake

#29

Post by lentil_soup » Tue, Apr 20, 2021, 7:15 AM UTC

rocqua wrote: post #15

Animats wrote: post #4

What's this obsession with increasing housing density? Population in the developing world is leveling off. Most of the developed world is already at "peak child".[1] Housing shortages come from migration to cities, not more people. [1] https://ourworldindata.org/peak-child

The rules against density have prevented a lot of demand from being met. It makes big cities where people want to live unattainable for many because of price. It also forces many people into long commutes. This makes them less happy, cause large amounts of pollution, and creates huge traffic jams. By increasing density, biking to work becomes easier. Similarly, public transport becomes a lot more effective. In genera…

As a single data point, I live in one of the most dense european cities and home prices are insane. Probably a mix of speculation, tourism and other policies.

While density might play a part it's not a silver bullet. As with everything, the solution is probably custom to each city and region

Re: Home ownership is the West’s biggest economic-policy mistake

#30

Post by trainsplanes » Tue, Apr 20, 2021, 7:15 AM UTC

perfunctory wrote: post #8

> From Sydney to Sydenham, fiddly regulations protect an elite of existing homeowners and prevent developers from building the skyscrapers and flats that the modern economy demands. The resulting high rents and house prices make it hard for workers to move to where the most productive jobs are, and have slowed growth. Following this logic from the ancient Greek times, by now we would have thousand stories skyscrapers…

No, because not everybody wants to live in the same city, country, climate, culture, whatever.

But what we do have today are cities that economically dominate their region with people commuting an hour or more each way just to make ends meet. And even if those people were to quit and try starting a business 5 minutes from their home, there's a good chance that some zoning regulation, lack of infrastructure, or other issue would make it rather troublesome for a normal person to do a startup.