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

Ask HN: Anyone else feels the commoditization of real estate is unethical?

news.ycombinator.com

Post reply on HN
Print view View original

551–560 of 764 posts

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#551

Post by ItsMonkk »

tharkun__ wrote: post #537
ItsMonkk wrote: post #510

Earlier quoted context omitted.

Yes, land use is one factor. What is interesting is that the dynamic actually flips once there is adequate zoning. Take a look at this[0] video on Tokyo zoning and how he talks about living in an industrial zoned area. He talks about how it's cheaper to do so, and if you want to move to a single family zoned area, it's actually more expensive! Under the current system, landowners want their own land to be zoned as hi…

I don't see how one follows from the other. In either system living in an industrial zone (or on the edge of it) will cost less as it is less desirable to live there (noise, air pollution, smells, further from grocery store, no parks etc) and nobody in their right mind would pay high rent there. Nothing to do with land value taxes. Zoning changes what people will build there (we assumed it was even legal to have hous…

Your argument is that places that are zoned lower are worth less, and places that are zoned higher are worth more. That's only true in the existing paradigm.

What would be true in the new paradigm is that places would only allowed to be zoned lower if people are willing to pay for that exclusive access. It's not just industrial areas, all higher zoned areas would be cheaper than lower zoned areas.

Land Value Tax incentivizes proper zoning, as the more scarce the housing is, the higher the tax. Proper zoning(like Tokyo has without a land value tax) flips the structure.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#552

Post by carom »

voidhorse wrote: post #63
lr4444lr wrote: post #40

No, because governments' ability to procure it for the needy is a very separable problem. But let me play Devil's Advocate: agriculture, the foundation of the food supply, is one of the most commoditized markets that exist. Does this bother you too? Why not? If it's because food is generally a smaller part of income, highly responsive to market pressure to keep prices low in addition to some stabilizing subsidies fro…

But that’s the problem. The housing market is becoming what the food production market would be without the pressure and government involvement. Right now the supply of those two good and their general dynamics are totally different. Landlords can effectively extract maximum profit from a property without doing anything to improve it or remain competitive thanks to zoning restrictions and other things that make incre…

>In the most desirable areas you can literally do nothing as a landlord and raise rents almost perpetually.

You can also do literally nothing even if you want to because of zoning. Remove all the market distortions and watch rental prices drop.

Call a contractor and see how much they charge for permitted work.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#553

Post by jackcosgrove »

closedloop129 wrote: post #264
snapplebobapple wrote: post #156

It's a natural first impulse, but it's wrong. What is the correct impulse is to be concerned about how lopsided most cities zoning is towards single family, as that is what is driving the market power that makes real estate profitable as a financial asset. If most of a city was zoned to allow up to multi residential highrises rather than most of a city being zoned for single family it would cut the appreciation abili…

> because city governments zoned everything wrong for the actual demand This is the core problem. Commoditization, or rather, people cornering the market is secondary. City government is doing this because it is elected by those who own single family units. This is self-stabilizing. If the majority would live in multi residential highrises, there wouldn't be an incentive to artificially create scarcity. Instead, ther…

Some people invest in cities with falling house prices. They could be long-term speculators or more likely are landlords who expect the property to cash flow more than a property in an in-demand city. Generally the slower the asset price growth of a property the larger the margins on rent. You trade cash in the future upon sale for cash now from rent.

The thing that can really crater a housing market is a departure of jobs from an area.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#554

Post by polio »

missedthecue wrote: post #167
smt88 wrote: post #5

I definitely do. It's something that turns a basic necessity into a speculative asset, with a price distorted by the money poured into it. Airbnb is also a deeply harmful influence on housing prices. Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it. It's easy to get retail investors to buy things at inflated, speculative prices, so the price of water would go up…

I have long supported the privatization and commiditization of water. It should be sold on the basis of supply and demand with markets, futures, and so forth. Don't like almond farms, bottled water companies pumping millions of gallons for the price of a $200 permit, and golf courses watering their courses during a drought? Then you should too.

What if water were public for individual consumers but private for corporations?

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#555

Post by alexashka »

prvit wrote: post #315
andrepd wrote: post #105

Earlier quoted context omitted.

How can renting from a middleman who owns it be possibly cheaper than owning it directly? Unless the middleman is a charity which rents at a loss.

Middleman maintaining 100 apartments can do so for less money per unit than the guy maintaining a single apartment.

Wat? Is this skipping the real world of every condominium building apartment owner paying a maintenance fee and having a say in where/how the money gets allocated?

When you rent, you just give the power of choice away and have misaligned incentives (when you own, you give more of a shit than when you are merely extracting profit)

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#556

Post by ItsMonkk »

carom wrote: post #522
ItsMonkk wrote: post #424

Earlier quoted context omitted.

No. Renters are paying for the value of the land and the improvements. If the rental price of the apartment is above that, they won't pay it and find another place. If there are no places they will go homeless. Since landlords are already charging for this value, an increase of taxes does not increase the rents. > every property owner isn't going to operate at a loss So they will then sell. But who would buy at curre…

>No. Renters are paying for the value of the land and the improvements. If the rental price of the apartment is above that, they won't pay it and find another place. Then why are investors a problem?

If investors are investing in apartments for people to live in there is no problem.

If investors are investing in land and leaving it empty waiting for the local city to build valuable infrastructure around them before they sell it, that's a major problem.

A land value tax will see the former do better and the later to do much worse.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#557

Post by nrmitchi »

bushbaba wrote: post #284
rojobuffalo wrote: post #257

Earlier quoted context omitted.

I would start by making property taxes substantially higher for non-owner-occupied property. If you are rent-seeking rather than residing on the property you should pay way more, maybe 4x or higher, in taxes. Housing prices would crash and that would be the point; but everyone who owns property would be against it because they don't want to see their assets drop in value. The counter-argument people make is "that wou…

Remove depreciation, 1031b, and government backed loans for non owner occupied properties. That would do the most damage.

You don't even have to removal all of them; just make it so you can't use all of them.

You're depreciating your asset? You don't get to depreciate, and deduct repair/maintenance costs.

You're depreciating? You don't get to 1031 the asset as well (and avoid recapture).

Regarding government back loans, I think you're right, ish. It's very weird that it's a thing at all, and that you can use subsidized loans for up to 4 unit properties. BUT I do believe this availability has been an on-ramp to a career in real estate, and a wealth building mechanism, for many, many previously-disadvantaged people. It's definitely been bastardized into something else over the last decade.

That aside though, individuals are limited to a maximum of 10 government-backed morgages, and it becomes much more difficult to qualify for new ones after 4. While yes, that sounds like a lot, large real estate companies that are managing 10s of thousands of units are not utilizing these programs, and eliminating them would serve only to limit the "mom and pop landlords" that, frankly, tend to offer a lot more flexibility for tenants than large management companies do.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#559

Post by seibelj »

criddell wrote: post #538
seibelj wrote: post #409

Earlier quoted context omitted.

Every single homeless person in Boston can get free transitional housing but the Mass and Cass street area is still packed with tents and drug users

What is required of the homeless to qualify? Often there are big strings attached like you have to be sober or at least be working towards that. They often don't want to help addicts who don't want to quit using.

Right there will never be something good enough. They want an amazing hotel they can shoot up and congregate and party in with all of their druggie friends.

It’s totally reasonable to expect a bare minimum of compliance in order to get taxpayer funded housing. I don’t know if you have friends or family who are heroin addicts but I can promise you they are not pleasant people to be around, especially when they start stealing to fund their habit.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#560

Post by YetAnotherNick »

HEmanZ wrote: post #187
YetAnotherNick wrote: post #118

Earlier quoted context omitted.

You are talking about different kind of commoditization. Food processing is commotized, not the food itself. In fact food is naturally immune to have a speculative market as it could only be stored for short term.

Food has one of the biggest speculative markets in the world, with insane amounts of leverage: commodity futures.

Speculative market can't change the price of food that has short expiry and long manufacturing time.
Post reply on HN