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The anti-abundance critique on housing is wrong

derekthompson.org

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Re: The anti-abundance critique on housing is wrong

#11

Post by galangalalgol »

Ericson2314 wrote: post #3
donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Asking why they don't build affordable housing is like asking why don't they build used cars

Except that outside of Japan, it is unusual for detached homes to depreciate in value. Apartments though you do have a point. Unless the location adds the value they will depreciate over time.

Re: The anti-abundance critique on housing is wrong

#12

Post by JumpCrisscross »

bsder wrote: post #7
Ericson2314 wrote: post #3

Earlier quoted context omitted.

Asking why they don't build affordable housing is like asking why don't they build used cars

The problem is that you don't generally destroy the used car in order to build a new one. So increasing the new cars on the road eventually also increases the number of used cars on the road.

> you don't generally destroy the used car in order to build a new one

There is very little de-densification construction happening in hot housing markets.

Re: The anti-abundance critique on housing is wrong

#13

Post by infotainment »

Ericson2314 wrote: post #3
donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Asking why they don't build affordable housing is like asking why don't they build used cars

Exactly -- all new housing is going to be marketed as "luxury".

Who is going to build a brand-new apartment and say "well, this is janky low-quality housing, you might want to live here if you're poor or something"?

Re: The anti-abundance critique on housing is wrong

#14

Post by evil-olive »

> The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.

ctrl-F "RealPage" - nothing. hmm.

ctrl-F "rent" - also nothing. really?

from about a year ago: Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Renters [0]

> The Justice Department, together with the Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, filed a civil antitrust lawsuit today against RealPage Inc. for its unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.

> ...

> Another landlord commented about RealPage’s product, “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing…”

if I hear about antitrust in the context of housing policy, RealPage making it easier for apartment buildings to collude on rent prices is the very first thing that leaps to mind.

it seems like Thompson is being awfully selective about which antitrust-related criticisms he's responding to here. he seems to be focusing exclusively on building single-family homes, and completely ignoring the concrete example of monopoly power being used for apartment rentals, and antitrust laws being used to address that.

0: https://www.justice.gov/archives/opa/pr/justice-department-s...

Re: The anti-abundance critique on housing is wrong

#15

Post by kccqzy »

donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Building only affordable housing is how you get cities into a downward spiral. The people who want luxury housing are the well-to-do. They probably contribute 10x the sales tax per capita than the people who live in affordable housing. And almost by definition luxury housing causes more property tax to be paid to cities than affordable housing. Both sales tax and property tax revenues shrink. And the city gets into a fiscal crisis. The city reduces services. People leave. Housing becomes more affordable but also more undesirable.

Re: The anti-abundance critique on housing is wrong

#16

Post by [deleted] »

donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

[deleted]

Re: The anti-abundance critique on housing is wrong

#17

Post by freddie_mercury »

evil-olive wrote: post #14

> The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business. ctrl-F "RealPage" - nothing. hmm. ctrl-F "rent" - also nothing. really? from about a year ago: Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions…

Thompson is responding to a specific paper.

'One of the most detailed articles in this space is an analysis of the Dallas, Texas, housing market by the lawyer and writer Basel Musharbash. In “Messing With Texas: How Big Homebuilders and Private Equity Made American Cities Unaffordable”'

Musharbash doesn't mention RealPage either, so go blame him, since he doesn't think RealPage contributes to Dallas's problems.

Re: The anti-abundance critique on housing is wrong

#18

Post by elliotec »

Ericson2314 wrote: post #3
donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Asking why they don't build affordable housing is like asking why don't they build used cars

No… it’s like asking why they don’t build cheap cars. Which they do.

Re: The anti-abundance critique on housing is wrong

#19

Post by lambda »

Ericson2314 wrote: post #3
donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Asking why they don't build affordable housing is like asking why don't they build used cars

This is a perfectly succinct way to put it.

New housing is simply more expensive; so it's marketed as "luxury", and it's sold at a premium to the higher end of the housing market. This reduces demand for the older, more affordable existing housing stock, and with depreciation and wear and tear, the new housing will become more affordable as time goes on.

If you're in a market with a shortage of housing, those with more money will simply outbid those with less, even for older, less desirable housing. I've seen it, where when I moved out of my last apartment before I bought a house, my landlady raised rent considerably when looking for a new tenant, and even then she got a tenant who wanted to pay her over the rate that she was asking for to ensure that they were able to get the apartment over all of the other applicants. Wealthy empty-nesters who were downsizing, and willing to pay a premium for an older apartment in a desirable neighborhood, forcing out anyone who might have otherwise been able to afford it.

So yes, while it does help for there to be some push to build more affordable housing, if taken to an extreme building only luxury housing will leave an unbalanced market, in a lot of cases building luxury housing is exactly what you want to do to reduce the competition for the existing, more affordable housing stock.

Re: The anti-abundance critique on housing is wrong

#20

Post by echelon »

JumpCrisscross wrote: post #6
donatj wrote: post #2

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy. Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Affordable housing is NIMBY whitewashing of reducing supply through rationining. (Note the supporters of affordable housing programmes count the largest landowning families in San Francisco and New York among their ranks.) There is an article on the front page, right now, about Denver moderating its rents through construction [1]. We've also seen this in Montana [2]. [1] https://denverite.com/2025/07/25/denver-rent-p…

100%

"Supply and Demand" is a law of nature.

If you build infinite luxury apartments, in the limit their value is zero.

Build more luxury housing and the inventory increases. If you've met the city's housing demands (which you probably won't since nearly every city is behind on meeting demand), then it follows that typically less desirable inventory experiences less demand and will subsequently experience a price drop.

The problem is nobody is building enough. The equations of taxes, property value, and developer profit all balance each other out and control the rate of building. Regulations slow this equilibrium even more.

A few policies that can help:

- Remove stupid regulations against building dense housing. Keep the fire safety regulations, but nix the multifamily zoning regulations, the building height regulations, curb space and parking space minimums, etc. There are so many NIMBY and outdated 1950's era regulations that make it costly and time consuming to break ground.

- Tax unproductive land use, eg. storage units and parking garages. This will convert those plots into housing and businesses.

- Heavily tax unused and dilapidated land that is not currently occupied by businesses or residents. Burned out houses have no place in the city. Tax these properties to the point that they fall into foreclosure and give cities the power to take over the land and sell it at a profit to developers. Give owners the chance to cure the issue, but make quick work of clearing these useless plots.

- More controversially, tax single family housing more than multi-family housing. Tax it proportional to how many people could live on the plot if it were occupied by a 10-story development. Or if you don't want to raise taxes, lower taxes on multi-family housing. This will encourage density.

- Give tax breaks to developers, apartment and condo complexes, and businesses that help underwrite development.

Note that these policies only make sense in dense metropolitan cities. Suburbs and rural areas don't need to operate in this way.

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