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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

#461

Post by bnralt »

crooked-v wrote: post #148
tptacek wrote: post #134

Earlier quoted context omitted.

I live in a very wealthy, extraordinarily progressive muni (almost certainly in the top 5 nationally), and my primary political project is zoning reform, and I assure you that left-NIMBYism is a thing, and that the "we should make blue state governments perform better and increase supply of things people want" thesis of "Abundance" (Thompson and Klein's book) is a bête noire among those leftists. The argument isn't t…

Here in extremely liberal Portland, there are a huge number of people who genuinely believe that 'greedy developers' are the cause of the nationwide housing shortage, having talked themselves into the nonsense belief that building fewer homes makes people more money.

That belief has reached prominent political leaders as well. I listened to a bit of the Ocasio-Cortez/Tim Walz Madden livestream on Twitch, and they were talking about how something needed to be done about the greedy developers who were driving the housing shortage.

Re: The anti-abundance critique on housing is wrong

#462

Post by Ekaros »

pixl97 wrote: post #103
baby_souffle wrote: post #80

Earlier quoted context omitted.

If - hypothetically - I had a ton of money and buying another house or two or fifteen wasn't a big deal, wouldn't there be a clear-ish signal that I should stop my demand for more housing lest too much supply screw with my income? I would also have an incentive to deploy some of my resources/capital to making sure that the supply of housing is juuuuuuust right for my extractive needs.

Thats what I'm trying to figure out myself, which bank is going to give out loans on a depreciating asset. Funding will dry up as supply increases.

It is all fine as long as repayments on principal are faster than depreciation. Might mean larger down payments or shorter durations. As long as you can reasonably expect collateral to stay above principal math does work out in my mind.

Car loans have been a thing. And they attach to depreciating asset.

Re: The anti-abundance critique on housing is wrong

#463

Post by imgabe »

shazbotter wrote: post #436
imgabe wrote: post #391

Earlier quoted context omitted.

This doesn't make sense. Each wealthy family can only live in one house at a time. Yes, they might have multiple homes, but a billionaire having a luxury vacation home in Lake Tahoe or a penthouse in Manhattan are not the reason housing is unaffordable. The type of home a billionaire would buy would never be affordable anyway.

You assume they are buying homes to live in. I don't think that's a reasonable assumption. Maybe they buy real estate because it's a useful part of a portfolio. They can rent it or just sit on it and sell it later.

Renting it still increases the housing supply, someone can live there.

I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that? It’s a stupid and expensive place to park money. You have to pay taxes, possibly condo/co-op/HOA fees, pay someone to do maintenance and keep out squatters, pay transaction costs both buying and selling, it can’t be sold quickly.

Why would you do all that instead of just buying treasuries or some other liquid instrument that actually earns money?

There may be some of this from foreign investors that don’t have easy access to financial markets, but again, some Russian oligarch buying a $50M penthouse in Manhattan is not the reason an average 3 bed 2 bath suburban home is $700k. They are not remotely in the same market.

Re: The anti-abundance critique on housing is wrong

#464

Post by CalRobert »

frollogaston wrote: post #368
munchler wrote: post #344

Earlier quoted context omitted.

There's also a large lobby group that is fully invested in building new houses, namely real estate developers, and since most politicians at a high level usually need large campaign contributions, they are fully invested in it as well.

Yep. A town can become desirable after its residents carefully built its character and reputation, then suddenly apartment/condo developers want in.

Usually the town was made "desirable" by residents there from ~1890-1940, and the current NIMBY's are leeching off that. In most cases the desirable part was bulldozed in the 50's-70's to make parking for the suburbanites. Portland, OR had streets that could make you think you were in Budapest before they were demolished in the 40's

Re: The anti-abundance critique on housing is wrong

#465

Post by Ekaros »

didibus wrote: post #312

Most interesting proposal I heard on this topic, is that the solution to housing prices is to ban renting altogether. It's so radical that it's almost impossible to predict if it would be better or worse. But at least it had the moral ground that rent is one of the last remnant of pre-capitalist lords and barons economies. The idea being it would commoditize housing. Millions of units would now be for sale, prices wo…

What would happen to those who can't afford to buy? Say student just turned 18? Continue to live at home and gather some money for down payment? Who would keep these assets and maintain them until next buyer comes around? What if there is no buyer and they make loss?

There is nothing inherently wrong with renting. The landlords provide capital that renter lacks for time being. But due to supply constraints prices have been driven too high.

Re: The anti-abundance critique on housing is wrong

#466

Post by CalRobert »

munchler wrote: post #376
jdkoeck wrote: post #367

Earlier quoted context omitted.

I wish they had more influence, then they’d be able to build more and prices would go down.

I'm all for building more housing, as long as it comes with the necessary infrastructure - schools, roads, parking, public transportation, etc. Where I live, developers seem to get government approval to build in locations where they can rake in a lot of money at high prices without having to worry about such things. (In fact, my local government is actually closing roads near new housing because "f#ck cars" is appar…

It's been hip since drivers started showing up and killing people. The less parking the better.

Re: The anti-abundance critique on housing is wrong

#467

Post by grafmax »

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…

Abundance YIMBYism has many shortcomings. It doesn't address the risk of gentrification and displacement, the slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities. Journalistic ideologues deserve little praise for dismantling the weakest counterarguments of their opponents while ignoring core criticisms.

Re: The anti-abundance critique on housing is wrong

#468

Post by CalRobert »

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…

Why is it OK to constrain investments on SFH but not apartments or condos?

Re: The anti-abundance critique on housing is wrong

#469

Post by ImHereToVote »

nikanj wrote: post #443
tsimionescu wrote: post #426

Earlier quoted context omitted.

This only works if all those houses are on the market. Nothing is stopping today's rich people from buying up all new housing, and only letting a handful be on the market so as to not flood the market and not let prices go down.

Ah, the classic investment strategy of eating up the cost of keeping a house empty, so that others who do accept renters would make more money ”The rich” aren’t that stupid, why would they take the losses to support someone else making a profit?

It's not about the rich being stupid. It's about banks only creating credit for "sure bets". Housing.

Re: The anti-abundance critique on housing is wrong

#470

Post by freddie_mercury »

whoknowsidont wrote: post #115
tptacek wrote: post #102

Earlier quoted context omitted.

I feel like not a lot of celebrity gossip consists of calls with economics professors who wrote cited papers discussing those citations, but we might just read different rags.

Notably, he never included the full conversation. It's almost like the question asked to the economic professors and their responses are completely different from the way the questions are presented in the article. Claims and questions the target article never mentions or implies. I think there's like, I don't know, a few fallacies named for such practices. But hey, don't take my word for it. Here's Musharbash very p…

Disagree with him if you want but calling Thompson a grifter makes it hard for me to take anything Musharbash seriously or want to dive deeper into whatever he's written.
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