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Solving the housing crisis requires fighting monopolies in construction (2020)

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Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#61

Post by potiuper »

frankfrankfrank wrote: post #33
oldgradstudent wrote: post #5

Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?

I think what is being referred to here in typical mush mouth obtuse language is the "monopolization" that corporations are engaging in buying up massive amounts of real assets with essentially free money the fed it printing at the rate that even the "printing press goes brrrrrr" meme does not do justice. I don't know that people are really aware of the scale of what is going on here. The big finance houses have essen…

Impact of Institutional Buyers on Home Sales and Single-Family Rentals: https://news.ycombinator.com/item?id=31594034

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#62

Post by sien »

eesmith wrote: post #3

> But the key monopolies involved in blocking small modular homes are the Department of Housing and Urban Development (HUD) and the National Association of Home Builders (NAHB). They have successfully squashed the emergence of these factory houses. Is factory-built housing common in other countries? If not, then it would strongly suggest there are other reasons than federal control. Wikipedia at https://en.wikipedia.…

This is a very good line of reasoning and well worth thinking about.

In Australia you can't get a loan on a mobile home in a 'manufactured home park'

https://www.homeloanexperts.com.au/forum/viewtopic.php?t=580....

Also building codes often make it hard to build mobile homes on residential land.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#63

Post by oldgradstudent »

epistasis wrote: post #19
adam_arthur wrote: post #14

Earlier quoted context omitted.

Population is flat over the last two years, while housing units are up and the construction rate is all time high. There is no crisis, just rampant speculation that ate through active inventory. The actual data is very clear on this (FRED), despite the word of mouth "shortage" narrative. Now that the narrative is turning, inventory is skyrocketing as you would expect, and we will be in a glut within 6 months. Look at…

But is there anything else that might have changed over the past two years thay might add some nuance to it? Such as massive shifts in where people want to live, how much space they want, etc. Looking just at the past two years ignores them past 14 years since the 2008 crisis, from which housing construction is just barely beginning to recover. And houses under construction is not completed house construction rate; e…

The same was said in the early 2000s.

In 2008 we found out there was a massive housing bubble.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#64

Post by shuckles »

xyzzyz wrote: post #57
akamaka wrote: post #28

For a good laugh, read the conclusion of the paper, which sounds like it was written in the year 1960, when inner cities were crumbing, and imagines that rural areas will get better public transit when the poor escape the cities they are “trapped in”: There is a literature that asks why the poor live in cities. One answer provided is that transportation options are much better in cities than rural areas and small tow…

The entire paper is a joke. Monopoly in the construction market? Dude, there are multiple competing contractors in every field even in smallest towns. In fact, I’d endeavor to say that construction is probably the least centralized major industry in US, certainly less centralized than, say, farming.

In fairness, there isn’t that much competition between large subdivision developers, and an even smaller number of firms that are able to navigate the gauntlet of gatekeepers in major urban areas.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#65

Post by mslate »

oldgradstudent wrote: post #5

Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?

This is not a constructive or informed comment.

Interest rate policy is not singularly to blame for the housing crisis, just as it wasn't in 2008.

The issue in 2008 was lack of internal enforcement at banks or by federal regulators of interest rate products.

In the case facing us today it is less to do with Fed policy, more to do with land use policies that have made housing construction literally illegal.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#66

Post by jelliclesfarm »

eesmith wrote: post #46
jelliclesfarm wrote: post #16

Unions. One of the major set backs for building more in Bay Area and San Francisco is not NIMBYism or zoning. It’s because construction unions have a big say with the counties and they have a big voice during elections. Anything that involves mortgages and the govt has to necessarily support unions and work with them. They don’t like modular homes as automation will replace union jobs.

The author doesn't single out unions like you do: > Many groups were, and still are, opposed to factory production, including building contractors, building craft unions, building code inspectors, architects, materials producers and politicians (who are supported by the traditional industry). While these groups are sometimes at odds with each other, they all join together to fight factory production of homes. They fo…

https://calmatters.org/housing/2022/05/california-housing-cr... : example..more recently as to how unions control housing supply..

[..]Anti-worker or pro-worker? Why labor unions are fighting over a housing bill

The bill, which has the support of Assembly Speaker Anthony Rendon, would allow housing that is 100% affordable to low-income households to be built “by right” on areas now zoned for offices, retail and parking. That means skipping many city council meetings that tack on costly delays as well as the state’s premier environmental law many blame for its housing woes. Livable California, a local control group, has already dubbed it “the worst bill of 2022.”

The bill would also allow mixed-income housing, with a minimum of 15% of units affordable to low-income households for rent or 30% of units affordable to moderate-income households for sale, along commercial corridors such as strip malls. [..] The Carpenters and the Trades are at loggerheads over how much unionized labor developers would have to use to take advantage of the streamlining. The Trades are pushing for language requiring a certain amount of the workforce be graduates of an apprenticeship program, which effectively means union members. That’s common for public works, but unusual for residential construction. [..]

Still think ‘NIMBY’ism and Prop 13 is why we have housing shortage. California is controlled by Unions. We just live in it and pay taxes.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#67

Post by adam_arthur »

vostok wrote: post #55
adam_arthur wrote: post #51

Earlier quoted context omitted.

Firstly, I'm talking nationally. Secondly, the Bay Area is one of the markets subject to some of the more severe headwinds if remote work becomes the new normal, for the reasons you stated. SF population declined ~7% over the past two years. https://www.sfgate.com/bayarea/article/San-Francisco-populat... The concept of being forced to live in a hyper local area for work may be a thing of the past, which doesn't bode…

Density still has huge benefits unrelated to work. I don't know much about SF as I haven't lived there as an adult, but New York is an incredible place to live for lifestyle reasons too. It has great food, a very high concentration of smart and highly educated people, great museums, great performance arts, etc. It's also an incredibly walkable city, which is rare in the US. Hands down it would be my choice of city if…

Price is defined on the margin. Lack of forced demand from local workers will drive prices down, unless the leisure aspect of the locale outweighs the work aspect.

It's subject to debate which locales would stand to net gain/lose from WFH, but I'd pick NYC as a net loser. You gain some who enjoy the city life and amenities, but you lose more to lower COL locales.

Price will always be a factor weighed alongside amenities, even if one area is objectively nicer from an amenities perspective

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#68

Post by adam_arthur »

nostrademons wrote: post #59
adam_arthur wrote: post #36

Earlier quoted context omitted.

What matters above all is number of households relative to housing units, and rate of expansion/contraction of households. Household growth was flat prepandemic https://fred.stlouisfed.org/series/TTLHH The likely explanation for current RE market is households temporarily expanded due to the various stimulus and forbearances giving many higher disposable income, but we'll likely see this contract again as the effect…

If housing is supply bound - which we know it is, because prices are rising - then rate of household growth is going to equal rate of new home construction, because you can't form those households until there's a house for them to move into. Which it does - compare your link with my census.gov link on new residential construction. Everyone who doesn't have a home has to double up with roommates or continue living wit…

"Supply" as in inventory is a totally different concept from the actual structural supply of housing. To say housing is supply bound is simply wrong. Inventory is low now and will be high in 6-12 months.

To extrapolate out permanent conclusions from a point in time inventory metric is completely flawed analysis.

I'll refer you to the generationally low inventory in the 2000s, coupled with similar widespread shortage narratives. It won't end via the same mechanism, but each bubble is unique.

Inventory will continue to rapidly increase as rates stay over 5%

And again, rate of construction relative to population growth is at an all time high. Every narrative around a supply shortage focused on inventory is clearly and obviously flawed/wrong

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#69

Post by rmbyrro »

lazide wrote: post #42
schaefer wrote: post #38

Earlier quoted context omitted.

Here's a shred of evidence: Las Vegas is a city mostly surrounded by public lands. New private parcels are no longer made available as lots appropriate for single family homes. They are carved onto neighborhood sized chunks, sold to developers directly, and locked into HOA's for all eternity. Only the big boys that can tackle multi-million dollar bids can enrich themselves by the sale of our public lands.

That…. Has nothing apparently to do with what the message you were replying to was asking?

Seems to me it does.

Question was for a shred of evidence for any cause other than FED policies.

There it is an evidence, at least for Las Vegas.

Most interesting is it shows this is not a single variable issue.

There are lots of factors involved and they probably change across geographies.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#70

Post by softfalcon »

lazide wrote: post #42
schaefer wrote: post #38

Earlier quoted context omitted.

Here's a shred of evidence: Las Vegas is a city mostly surrounded by public lands. New private parcels are no longer made available as lots appropriate for single family homes. They are carved onto neighborhood sized chunks, sold to developers directly, and locked into HOA's for all eternity. Only the big boys that can tackle multi-million dollar bids can enrich themselves by the sale of our public lands.

That…. Has nothing apparently to do with what the message you were replying to was asking?

I think they’re trying to say that “higher construction costs” is literally the “multi-million dollar bids” to own property without going through a HOA.

For the average person, this makes the land and construction costs unobtainable for the average person, effectively creating a monopoly for the builders and the HOA organizations with deep pockets to bid.

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