181–190 of 347 posts
People still pour money into them every 10-15 years. But have to invest their money in other assets.
This article is a mess. From the third paragraph: > What happens when prices actually start to fall? Because that’s not just a hypothetical. It’s already happening in places like Phoenix, Atlanta, Miami, Dallas... Then two paragraphs later > In The Atlantic, Rogé Karma recently pointed out that housing prices are rising fastest in the very cities once seen as escapes from high-cost coasts, places like Phoenix and Dal…
Small, local development gets built and becomes profitable based on demand of the local housing market, but almost all housing today is built by large developers. These large developers are responding to the demand not for housing, but for the mortgage itself. Thanks to nationalized mortgage securitization the buyers the market cares about are those buying these securities: banks, pension funds, insurance companies, etc. When prices fall these securities become less attractive financial products, which decreases the demand for large development.
Chuck advocates for local building, which can ignore this macro-level demand and instead respond to the actual local demand for shelter.
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So you want the government to be the only landlord or does everyone get their own home from the government (if they can’t afford one)?
>[…] does everyone get their own home from the government (if they can’t afford one)? Uh… yes? I mean, housing is a basic right in most countries. Also, a humanitarian, right thing to do. That housing became big business (or business at all) is the real tragedy here.
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Also no discussion of interest rates - I bought my house just a few years ago at just under 3%, today I would be paying more than 6% - I couldn't afford the payments if I refinanced. I believe that interest rates are the primary driver of less construction: people who want to buy can't afford to unless they downsize.
The whole point of high interest rates is to get your economy unaddicted to cheap money and force economic efficiency. This is why Trump is so angry about high interest rates and has threatened to fire powell again and again over it.
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no, you just strip NIMBY's of their power. I frankly don't give a shit about grandma's opinion if the owner of the land wants to put a highrise there.
Why do you care whether it's a developer or the city building it, then
Transpose the problem into a Taylor Swift concert and the problem becomes clearer: Everyone* wants to go see Taylor Swift. She comes to a stadium and the sell out is instant, the aftermarket is bloody and ruthless. The stadium has 90,000 seats, 2,000 floor spots, and they are gone before you can reload the ticket page. Taylor Swift is the embodiment of "good jobs". The stadium is the local housing market. Those VIP b…
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> Obviously the landlord offers something of value or the tenant would just do what the landlord did. I mean, yeah, they had access to capital. As I understand it the traditional answer to this is "the landlord took the risk", but in practice I find that explanation questionable when propping up and supporting housing markets is basically political job #1. I think the landlord was just richer, and was able to use tha…
Sometimes landlords fails. You just do not hear too much about it because in retrospect it was obvious. Buying units in dying areas with low demand or over paying at times. Generally only winners get looked at. Not the loses in places no one cares about anymore.
Landlords can leverage existing assets (having 1 property helps you get more), benefit from asset appreciation and get tax advantages. When infrastructure or amenities get built, they capture a share of the value. When jobs are created or wages go up in an area, again the landlord captures value. Their asset class is politically protected in many ways. Then there's the whole inter-generational thing...
To a large extent, if your parents were owners, you will be an owner and if your parents were renters, you will be a renter. It's not guaranteed of course, but the effect is very strong.
I'm no socialist but I know a rigged game when I see one.
This article is a mess. From the third paragraph: > What happens when prices actually start to fall? Because that’s not just a hypothetical. It’s already happening in places like Phoenix, Atlanta, Miami, Dallas... Then two paragraphs later > In The Atlantic, Rogé Karma recently pointed out that housing prices are rising fastest in the very cities once seen as escapes from high-cost coasts, places like Phoenix and Dal…
It is indeed a mess. It's full of strawmen, like: > Price Drops Don’t Lead to Supply. They Kill It. No one believes price drops cause an increase in supply. They believe an increase in supply causes price drops. > If “build more” was going to bring prices down and stabilize the system, we wouldn’t be seeing these mixed signals. People believe that increasing supply will lower prices, not "stabilize the system". The c…
I think arguments like the one in the article have over-learned the lesson of 2008. Yes the financial crash in 2008 wiped out so many home builders that capacity to create supply was lowered. But that's not the sort of event that is caused by high supply.
Transpose the problem into a Taylor Swift concert and the problem becomes clearer: Everyone* wants to go see Taylor Swift. She comes to a stadium and the sell out is instant, the aftermarket is bloody and ruthless. The stadium has 90,000 seats, 2,000 floor spots, and they are gone before you can reload the ticket page. Taylor Swift is the embodiment of "good jobs". The stadium is the local housing market. Those VIP b…
Nice analogy. So it seems the solution would be to create more Taylor Swifts then, by investing in music schools and programs, talent shows, scouting, etc., where the analogous thing would be to create more "nice places to live" with all the desirable attributes like walkability, jobs, public transport, etc. It's a tall order since land and climate are the ultimate scarce resources, but there are probably some underu…
If you want great live music you can find that in a 1 in 10 bars around the country. (less if you want original music instead of covers). Likewise if you want to watch a dancer, though perhaps a different venue. If you want anyone sexy you can see sex better at a local strip joint. If you want to sleep with someone you can pick someone up in any bar (you probably couldn't sleep with Tayler Swift even if she was the type looking for a one night stand). However the shared experience of being a Tayler Swift fan is not something you can find if you stick to the local scenes. That national/international shared experience can only belong to a few people at any one time and no amount of schools, talent shows, scouting... can change that.