Solving the housing crisis requires fighting monopolies in construction (2020) • Hacker News Board

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

#131

Post by adam_arthur » Sun, Jun 05, 2022, 3:26 AM UTC

HarryHirsch wrote: post #124

adam_arthur wrote: post #112

Earlier quoted context omitted.

Housing is fungible and substitutable. Especially in a WFH world. Ergo building in FL or TX can reduce prices in CA. Why do you think the northeast and CA are losing population?

If housing is fungible I've got a house in Gary, IN to sell to you. WFH makes it possible.

Do you understand macro scoped problems and the significance of subsets of the population having differing priorities? Seems not.

Aside from the snark, I'll make it clear. If you have 100 people and even just 5 of them prioritize LCOL to their current locale, those 5 moving away will reduce demand for the area, regardless if the other 95 would never move to Gary, IN in a million years. Housing is not a closed system, and building nice developments in Raleigh or Denver will take population from higher COL places in the aggregate. Which is exactly why we see population loss in HCOL areas.

Very small brained thinking in the residential real estate world unfortunately.

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

#132

Post by nostrademons » Sun, Jun 05, 2022, 3:42 AM UTC

tmnvix wrote: post #85

adam_arthur wrote: post #68

Earlier quoted context omitted.

"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…

I think it's sometimes hard for people to accept that the difference between inventory and supply can fluctuate. The simplistic view is that residences are either rented out or occupied by the owner. In reality a speculative boom creates excessive demand which increases the number of residences that are second homes, Airbnb's, undergoing renovation, on the market, land-banked, etc. Most of this is made possible as ca…

I'm talking about supply as in physical supply of houses, not inventory. Inventory is a less-useful concept for me, because it fluctuates based on who decides to put their house on the market at a given time, which can depend upon home prices, interest rates, migration patterns, speculation, etc.

I still have not seen a convincing response to the demographic argument I put forth. The generation entering the housing market now is the large Millennial generation; the generation dying is the small Silent generation. For everyone who wants a house to get one, we need to be building the delta in size between these, and we're short by several million.

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

#133

Post by zamfi » Sun, Jun 05, 2022, 3:45 AM UTC

zeusk wrote: post #58

zamfi wrote: post #50

Earlier quoted context omitted.

> Homes should be for people to live in, not to purely speculate and grow their money Wait, if those speculating investors have “rental yield” then doesn’t that imply people are living in those homes?

The investor's objective is to maximize yield, not minimize homelessness or keep affordability in check. In that, if they don't find a renter for their jacked up rent - they "renovate" the property - get a higher appraisal and sell it to the next schmuck. Housing can’t both be a good investment and be affordable. You can't make economic decisions on the basis that real estate will always grow more than income or even…

> Housing can’t both be a good investment and be affordable

This gets repeated a ton, but isn’t true unless you assume density never increases.

Buying a SFH and replacing it with a 4-plex would be profitable in almost every market — were it allowed, which it almost never is in the US. In that alternate universe, the SFH owner makes money, the developer makes money, and the new units in the new building can be affordable.

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

#134

Post by bradlys » Sun, Jun 05, 2022, 3:55 AM UTC

whimsicalism wrote: post #121

Patrol8394 wrote: post #98

Solving housing crisis requires making housing not an investment. Make very very very tax inconvenient to buy places for the sole purpose of renting them out. Do this, and most problems are solved. But banks and legislators have no interests in doing so, therefore nothing will ever solve housing crisis. Make peace with it. It will only get worse.

Make supplying rental units illegal? Your "solution" involves evicting half the stage of California.

No - it makes putting half the stage on the market. There is a difference.

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

#135

Post by whimsicalism » Sun, Jun 05, 2022, 4:07 AM UTC

bradlys wrote: post #134

whimsicalism wrote: post #121

Earlier quoted context omitted.

Make supplying rental units illegal? Your "solution" involves evicting half the stage of California.

No - it makes putting half the stage on the market. There is a difference.

Given that 50% of the state rents and you would make it illegal for them to continue their current occupancy arrangement? Not going to keep replying.

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

#136

Post by [deleted] » Sun, Jun 05, 2022, 4:27 AM UTC

adam_arthur wrote: post #14

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?

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…

[deleted]

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

#137

Post by noahtallen » Sun, Jun 05, 2022, 5:13 AM UTC

whimsicalism wrote: post #135

bradlys wrote: post #134

Earlier quoted context omitted.

No - it makes putting half the stage on the market. There is a difference.

Given that 50% of the state rents and you would make it illegal for them to continue their current occupancy arrangement? Not going to keep replying.

Not saying I agree, but the concept is that 50% more capacity on the market drives down prices so much that renters can afford to own.

Obviously not everyone could afford, and not everyone wants to, and that transition process would be dramatically inefficient. (For example, inspectors could charge a fortune with so many people trying to buy so many homes)

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

#138

Post by teakettle42 » Sun, Jun 05, 2022, 5:33 AM UTC

whimsicalism wrote: post #118

teakettle42 wrote: post #71

Earlier quoted context omitted.

Similar to upzoning land. Only the big-boys that can tackle multi-million dollar bids and rental building development projects can enrich themselves by the upzoning of our existing neighborhoods, locking residents into a permanent rental class for all eternity.

I think developing an entire neighborhood of SFH is more expensive than developing a duplex or quad, which is what most upzoning would legalize.

A duplex or quadplex in a desirable area being upzoned is still going to be well outside the realm of what anyone but the “big boys” can reasonably afford to develop.

They’re going to turn it into rentals, and do their best to maximize rent for each unit.

End result is paying an obscene monthly rent for ever-shrinking square footage, while anyone being paid below a living wage sits in the 20+-year-long queue for employer-subsidizing “affordable” apartments.

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

#139

Post by eesmith » Sun, Jun 05, 2022, 7:16 AM UTC

jelliclesfarm wrote: post #60

eesmith wrote: post #46

Earlier quoted context omitted.

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…

Where the money comes from.. https://calmatters.org/politics/california-election-2020/202... (2020) Teachers and realtors(not developers) each had contributed over 2.5 million each. Prison guard union 3.7 million. Other unions: about 3.5 million Building industry is about a million but that’s pre 2020 numbers. It has since gone up. The article explains who gives how much and what they want in return. There are also o…

You specifically singled out "construction unions".

It seems you've presented evidence that construction unions don't have big say, compared with industry and realtors.

If construction unions have a bigger voice than realtors ($2.3M) and building industry ($1M), and that voice is reflected in "where the money comes from" then ... how much did the construction unions contribute?

All of "Building trades" is $84,165.

The biggest groups under "Other unions" are "Opportunity Pac - A Coalition Of Teachers, Health Care Givers, Faculty Members, School Employees, And Public And Private Employee Organizations" and "Nurses And Educators For Reggie Jones-Sawyer For Assembly 2020, Sponsored By Labor And Consumer Attorneys Organizations". Those don't sound like construction unions.

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

#140

Post by remarkEon » Sun, Jun 05, 2022, 7:48 AM UTC

nostrademons wrote: post #132

tmnvix wrote: post #85

Earlier quoted context omitted.

I think it's sometimes hard for people to accept that the difference between inventory and supply can fluctuate. The simplistic view is that residences are either rented out or occupied by the owner. In reality a speculative boom creates excessive demand which increases the number of residences that are second homes, Airbnb's, undergoing renovation, on the market, land-banked, etc. Most of this is made possible as ca…

I'm talking about supply as in physical supply of houses, not inventory. Inventory is a less-useful concept for me, because it fluctuates based on who decides to put their house on the market at a given time, which can depend upon home prices, interest rates, migration patterns, speculation, etc. I still have not seen a convincing response to the demographic argument I put forth. The generation entering the housing m…

>I still have not seen a convincing response to the demographic argument I put forth. The generation entering the housing market now is the large Millennial generation;

Well, implicit in this argument is that a non-trivial percentage of the Millennial generation is actually able to enter this market. Is that actually true? I'm not really convinced that is it, as there's been a lot of chatter about this generation putting off important life milestones like family formation, which would precipitate home buying. To be fair, and to potentially anticipate the counter argument, when the boomers were at this same stage in their life interest rates were much higher. But ... family formation was a much stronger cultural imperative at that time. It very much is not so today.

>For everyone who wants a house to get one, we need to be building the delta in size between these, and we're short by several million.

I agree with this, but for philosophical reasons and not structural ones. If I'm some jerkoff investor, trying to maximize profits, yeah I'd only build high rise lux condos and squeeeeeze that yield because, let's be honest, building family homes doesn't really do that.