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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

#161

Post by tptacek »

arrosenberg wrote: post #159
tptacek wrote: post #65

Earlier quoted context omitted.

You haven't actually worked this example out. Try it. The wealthy buy the extra supply; they now compete with all the existing supply for tenants. What happens next?

The total housing supply remains static - the number of owners goes down and the tenants increase, so the S/D curve for housing stays the same. Then the wealthy consolidate the supply into smaller, more powerful groups who drive up rents via monopolist and cartel behavior (eg RealPage).

It costs money to hold on to a unit of housing. Supply is increasing (that's the premise; nobody is proposing a one-time increase in supply). How does the investor profit?

Re: The anti-abundance critique on housing is wrong

#162

Post by oarla »

spankalee wrote: post #101
simpaticoder wrote: post #56

What about wealth inequality as the root cause of housing shortage? Even if supply is eased, the wealthy (those who have enough capital to earn passive income) will buy the extra supply and rent to the poor. The Piketty effect takes over, they invest their profit in more housing, wealth inequality continues to get worse, and while more housing exists, it owned by an increasingly small cohort. Personally I'd like to s…

Where's the evidence that wealth inequality is the root cause of housing shortage, as opposed to say, the real and factual lack of building? Even if the wealthy did buy up extra supply to rent out, that would only mean increased supply of rentals, which would lower rents.

Not commenting on the ethical side of it, in many instances rentals are just a side income, the real value is in the increasing price of the house due to demand outpacing supply. See https://news.ycombinator.com/item?id=37855625 for past discussion on this.

Re: The anti-abundance critique on housing is wrong

#163

Post by tptacek »

lawlessone wrote: post #157
nathan_compton wrote: post #147

Earlier quoted context omitted.

Yeah, I get it. But we also use liberal and I think in this particular case its worth drawing the distinction between these two "camps" of the democratic party.

[flagged]

No. Republicans believe in full privatization of schools, Social Security, and Medicare, in flat taxation, the abolition of the regulatory state, the replacement of government-provided services with cash vouchers, and policymaking devolved out to the states. Liberals generally commit to none of these beliefs.

I've gone out of my way here not to make value judgements; Republicans have coherent arguments for why all these policies are better. "Republicans who don't hate minorities" is not a good way to describe liberals, who make up the majority of the Democratic party, the "other" American party that opposes the Republicans.

Re: The anti-abundance critique on housing is wrong

#164

Post by jerlam »

__turbobrew__ wrote: post #123
jerlam wrote: post #66

Earlier quoted context omitted.

It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments and own undesired property. Cities don't want housing prices to fall, since they were counting on money from developers and property taxes.

Property taxes are relatively independent from the absolute value of the property. Only the relative value of a property to other properties in municipality determines property taxes.

I live in California where property tax is fixed at 1% due to Prop 13, so I don't really know how it works anywhere else.

Re: The anti-abundance critique on housing is wrong

#165

Post by raincole »

simpaticoder wrote: post #124
tptacek wrote: post #107

Earlier quoted context omitted.

I was thinking more along the lines of a simple math problem and less along the lines of an outline for a dystopian novel. Like, show the work.

If capital returns 5% and the economy grows at 1%, where does the extra wealth come from? Spoiler: it's a transfer from the poorest to the wealthiest. Asset classes include stocks, bonds, real-estate, art, and metals. So if artists make more art, will this make art ownership more accessible to the average person? Or will it be a small transient soon erased by the monumental financial forces pulling all assets into th…

Can you at very least try to answer the comment you're replying to?

Re: The anti-abundance critique on housing is wrong

#166

Post by gopher_space »

tptacek wrote: post #65
simpaticoder wrote: post #56

What about wealth inequality as the root cause of housing shortage? Even if supply is eased, the wealthy (those who have enough capital to earn passive income) will buy the extra supply and rent to the poor. The Piketty effect takes over, they invest their profit in more housing, wealth inequality continues to get worse, and while more housing exists, it owned by an increasingly small cohort. Personally I'd like to s…

You haven't actually worked this example out. Try it. The wealthy buy the extra supply; they now compete with all the existing supply for tenants. What happens next?

Collusion using online management services to fix prices across a region.

I think Washington State is working on legislation around rental services due to this already being a problem in the Seattle area.

“Extra supply” is added to the portfolio containing housing they’ve already purchased. They own part of “existing supply” too.

Re: The anti-abundance critique on housing is wrong

#167

Post by quodlibetor »

ch4s3 wrote: post #126
bgwalter wrote: post #122

Earlier quoted context omitted.

They leave it empty (that actually happens a lot, especially with foreign investors) or convert it to their 100th AirBnB.

Empty properties barely exist as a percentage of total housing supply in high cost of living areas in the US. You’re looking at no more than a few tenths of of a percentage point of NYC’s more than 4 million units.

> a few tenths of a percentage point of NYC

Feb 2024 (last year there's data, I think) was a record low and it was 1.4% empty, according to NYC[1].

But I don't really know the methodology, and according to other nyc gov data it's surprising, since we still haven't recovered our population from COVID[2].

The first statistic (housing pressure) is based on population growth, but the NYC population statistics suggest still meaningful population loss since 2020.

I have seen articles in the past that suggest that apartment vacancy rates in NYC are self-reported and misleading at best, but I don't really understand how that would work and I can't find any sources on that now.

It's also my understanding that some classes of landlords can mark empty apartments as income losses, basically or partially making up for the loss of revenue in tax rebates. But that's also not something I understand well, just something I have seen asserted.

[1]: https://www.nyc.gov/site/hpd/news/007-24/new-york-city-s-vac... [2]: https://s-media.nyc.gov/agencies/dcp/assets/files/pdf/data-t...

Re: The anti-abundance critique on housing is wrong

#168

Post by nathan_compton »

lawlessone wrote: post #157
nathan_compton wrote: post #147

Earlier quoted context omitted.

Yeah, I get it. But we also use liberal and I think in this particular case its worth drawing the distinction between these two "camps" of the democratic party.

[flagged]

They are usually also ok with LGBQT people, which is good. Realistically, I think liberals are just not particularly reflective about the economic realities our system creates. Americans are drowning in propaganda, of which the right wing sort which characterizes Trumpism is only the most obvious. Add on top of that that the 20th Century makes a pretty compelling case that leftism as imagined in that century isn't a going concern, its not really a sign of a major moral failing that one might be a "republican who isn't into cruelty."

Also, in fairness, there are a lot of republicans who aren't into cruelty too. Its just that the jerks are an important part of the current right coalition.

Re: The anti-abundance critique on housing is wrong

#169

Post by eddythompson80 »

JumpCrisscross wrote: post #25
echelon wrote: post #20

Earlier quoted context omitted.

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 dro…

> "Supply and Demand" is a law of nature It's a law of human nature. Value is inherently subjective, which makes deriving it from natural laws conditional upon a physical explanation for humanity.

Ecologists have been studying how groups of animals deal with famines, natural disasters, loss of habitat, climate change, etc for many years. These conditions change supply and demand on resources that are out of those animal populations control. Studying cooperation in bacteria colonies from a similar lens was pretty hot in academia in the late 2010s from what I remember.

Each animal defines value differently (heck, different groups of different people define value differently). A half-eaten sandwich thrown on the street is trash to you, but a jackpot for your local crow. The crow has no interest in the housing market though.

Re: The anti-abundance critique on housing is wrong

#170

Post by tptacek »

quodlibetor wrote: post #167
ch4s3 wrote: post #126

Earlier quoted context omitted.

Empty properties barely exist as a percentage of total housing supply in high cost of living areas in the US. You’re looking at no more than a few tenths of of a percentage point of NYC’s more than 4 million units.

> a few tenths of a percentage point of NYC Feb 2024 (last year there's data, I think) was a record low and it was 1.4% empty, according to NYC[1]. But I don't really know the methodology, and according to other nyc gov data it's surprising, since we still haven't recovered our population from COVID[2]. The first statistic (housing pressure) is based on population growth, but the NYC population statistics suggest sti…

1.4% vacancy in a housing market is extraordinarily low. Remember: there is structurally always some material amount of vacancy, because people vacate housing units well before new people move into them. This, by the way, is a stat whose interpretation you can just look up. Real estate people use it as a benchmark.
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