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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

#171

Post by arrosenberg »

tptacek wrote: post #161
arrosenberg wrote: post #159

Earlier quoted context omitted.

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?

If a small number of landlords continue to control the supply (which I understand to also be part of the premise) then they can charge whatever rate allows them to profit. Housing is pretty inelastic and is a first order priority for most people, so they will pay the maximum they can afford if they have to. At least near me, most of the housing being created is owned by large corporations like the Irvine Company, it’s not individual owned.

Re: The anti-abundance critique on housing is wrong

#172

Post by Terr_ »

dannyobrien wrote: post #86
tptacek wrote: post #5

So much of the journalism we read is heavily processed and barely-reported and it's startling to see how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed. We're often so down on j…

I've been involved in a lot of discussions about "what is journalism? what do real journalists do?", and the best response I've heard was from Ian Betteridge (of Betteridge's Law fame), who told me "Journalists pick up the phone." It may have already dated as a pithy description, but the idea of literally calling[1] people to fact-check or dig deeper is a low bar that a surprising amount of current journalism doesn't…

> But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do.

Somewhat-related to another front-page item today about, how lots of jobs sound kind of crazy if you really detail them out: https://news.ycombinator.com/item?id=44710651

Re: The anti-abundance critique on housing is wrong

#173

Post by lanfeust6 »

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…

When interest rates were rock-bottom a bigger chunk of new builds were purchased, but they're not anymore. Vacancy rates in cities, though, are very low, and if you constrain supply of rental units, rent prices go up. That impacts the poor demographic far more. People who rent entire houses are not typically poor, unless maybe you count places where houses are cheap like Mississipi.

The actual data does not agree with you at all. In places that have implemented zoning reform, housing gets cheaper. In areas where it's easier to build (red states), housing is cheaper. There is no reality at all where supply of housing jumps high but prices do also.

> Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.

Where investors are concerned, these are purchased to flip, or with the expectation that prices would rise. Given that we had inelastic supply but perpetually growing demand, that was a good bet. So, if you build way more, an investor wouldn't be so confident about that price increase. Now compound that with the risk of borrowing at higher interest rates to buy those properties.

Re: The anti-abundance critique on housing is wrong

#174

Post by bluGill »

nathan_compton wrote: post #147
svachalek wrote: post #144

Earlier quoted context omitted.

"there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way" People tend to call the Democrats the left, as they're at least somewhat leftward of the Republicans. It's at least easier for discussion purposes than speaking of the right and the other right.

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.

The meaning of liberal and conservative has shifted so much over time that the term is now useless. The original meaning of liberal was about not killing you neighbor if they were a different religion - from which we get freedom of religion. That slowly expanded to things like freedom for slaves and women voting.

Re: The anti-abundance critique on housing is wrong

#175

Post by api »

Animats wrote: post #130
tptacek wrote: post #5

So much of the journalism we read is heavily processed and barely-reported and it's startling to see how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed. We're often so down on j…

Reporters used to start at something like the City News Bureau.[1] For a century, the City News Bureau covered local news for Chicago and sent it in to the local newspapers. Lasted until 2005. Young reporters started there, covering every police station, every major crime, every major fire, every major trial, and getting the facts right, or else. The bureau`s unsentimental motto: ”If your mother says she loves you, c…

The problem is that nobody would pay for it. People expect news to be free, and click bait and lazy copy paste or LLM journalism is cheaper and works just as well to get clicks for ad dollars.

Would people pay for real journalism?

Re: The anti-abundance critique on housing is wrong

#176

Post by tptacek »

arrosenberg wrote: post #171
tptacek wrote: post #161

Earlier quoted context omitted.

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?

If a small number of landlords continue to control the supply (which I understand to also be part of the premise) then they can charge whatever rate allows them to profit. Housing is pretty inelastic and is a first order priority for most people, so they will pay the maximum they can afford if they have to. At least near me, most of the housing being created is owned by large corporations like the Irvine Company, it’…

I'm asking: how does a small number of landlords continue to "control the supply" of an ever-increasing supply of housing when each of their holdings is non-remunerative (and, in fact, incurs tax and maintenance costs). This seems like a pretty simple math problem, a bet that you would not take if it was laid out in front of you, but I'm waiting for someone to explain how that might not be the case.

Keep in mind: as soon as you concede that investor-owners are letting out properties, they are competing in the market: further supply of housing decreases their returns, because they compete with all other suppliers of housing, the high-order bit of which is existing owners. You have to make this math work with owners who deliberately keep their units vacant, or it doesn't even work as an idea.

Re: The anti-abundance critique on housing is wrong

#177

Post by mlhpdx »

> … profit margins as a share of overall home-sale prices actually declined slightly

So the profit in real terms more than doubled? At a constant percentage home building and gas pumping both become more profitable when unit prices increase faster than inflation.

The vapid arguments around this topic are tiring.

Re: The anti-abundance critique on housing is wrong

#179

Post by whatever1 »

Housing crisis is just a result of increasing income inequality and the resulting real estate investment craze. The population of America (real demand) did not suddenly double at any state/city.

Rich have become so much richer that can afford bidding wars at unattainable prices. They can buy investment homes and be cashflow negative for decades in anticipation of the increased market bidding prices. Of course they oppose any sort of legislation that would increase competition.

Re: The anti-abundance critique on housing is wrong

#180

Post by esseph »

immibis wrote: post #111
burnt-resistor wrote: post #91

Earlier quoted context omitted.

Then you're too focused on political concerns. Neoliberalism doesn't recognize political parties, it recognizes money. As Gore Vidal would say, the Property party.

To avoid confusion: neoliberalism has not much to do with the liberals (Democrats). It's closer to libertarianism, but only about money.

I think I was confused (speed) reading through it and hit the Democrats part and was just thinking to myself... They have extremely limited power right now, and aren't passing laws?

There are some wild political takes on the internet sometimes, and it can be hard to parse out exactly what the person is trying to say (especially if the reader failed their speed reading comprehension ;-) )

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