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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

#591

Post by chii »

wyre wrote: post #184
spankalee wrote: post #138

Earlier quoted context omitted.

tptacek is asking how investors buying properties to rent them out, which clearly leads to increased rental supply, then somehow supposedly leads to higher , not lower, rents.

Increased rental supply at the cost of decreased home ownership. There is already price manipulation with rental properties. If a cartel is in control of enough of the supply they can set their prices as high as the market can afford. There is already a nationwide shortage of affordable housing in desirable places with jobs and the idea ITT is that it will only get worse as the investment class are the only people th…

> they can set their prices as high as the market can afford.

which is the correct price - because you dont need a cartel to set the price at as high as the market can afford; each individual landlord chooses to price their rental at the highest profit they can, with the lowest chance of a vacancy.

A cartel makes it possible to set the price _higher_ than the market can afford. Which is why a cartel is illegal.

Re: The anti-abundance critique on housing is wrong

#592

Post by ph1sch3r »

A contributing factor to housing costs I don't often see mentioned is urbanization. In the 21st century, population density has increased faster in major cities than rural areas.

The picture is probably more nuanced in the last half decade (post COVID), with many people moving to the countryside.

Re: The anti-abundance critique on housing is wrong

#593

Post by grafmax »

niam wrote: post #565
grafmax wrote: post #467

Earlier quoted context omitted.

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.

> It doesn't address the risk of gentrification and displacement This is a puzzling critique because it seems very much in the wheelhouse of "abundance YIMBYism" to advocate for cheaper housing--an argued byproduct of which is that fewer people are displaced. It probably changes the problem statement of gentrification since, if housing is abundant and displacement is low, there's not much to distinguish "gentrificati…

This “abundance” ideology which aims to influence Democratic policy promotes YIMBYism to address housing shortages by deregulating construction. It’s this claimed benefit I’m criticizing. Public housing does address this issue, which is why I bring it up.

Similarly, gentrification is enabled by this narrow focus on YIMBYism. Upzoning increases land value. Developers build profitable market rate houses there. This increases prices in the neighborhood leading to gentrification. This in turn leads to displacement - a key phenomenon that this ideology purports to address.

My issue is not YIMBYism in particular but that it’s offered as a solution to these problems.

Re: The anti-abundance critique on housing is wrong

#594

Post by huitzitziltzin »

whoknowsidont wrote: post #314
huitzitziltzin wrote: post #206

Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong. I appreciate the attention he brings to the topic and his diligence in digging up stories but his own analysis is often just totally wrong. I don’t think he’s worth taking seriously as an analyst. Maybe as a reporter at best.

>Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong. I mean he didn't. The article is legitimately straw-manning. All of his claims are not present in the source article. It's a disgusting, sleazy piece of journalism. So no, you didn't hear he got it wrong. You were lied to by the author.

I have a PhD in economics with a specialization in antitrust policy.

Fact:

“Matt stoller gets big, important issues wrong in antitrust all the time and his analysis shouldn’t be taken seriously.”

Source: me

You are welcome to cite that.

Re: The anti-abundance critique on housing is wrong

#595

Post by wilkommen »

thrance wrote: post #563

Abundance liberalism still seems like a poor attempt to curb the populist left to me. Let's look at it from a high-level. "Fixing" the housing criris would require a major depreciation of housing assets. Does anyone believe the companies and individuals holding onto multiple homes will accept this without fighting? Of course not. The same people that are arguably responsible (directly or indirectly) for the housing c…

I have the same view on it as you. The "abundance" people are carrying water for the establishment while trying to co-opt disaffected voters (who might otherwise find their way to the populist left) into a way of seeing things that won't meaningfully alter the status quo. Any solution to the real problems our nation is facing will require a shift of who holds power. The "abundance" folks are doing anything to distract people from the fact that this is all about power.

Re: The anti-abundance critique on housing is wrong

#596

Post by PopAlongKid »

solatic wrote: post #583
camgunz wrote: post #513

The housing crisis is a cultural problem. We don't want to build density, and we don't want to build transportation, because this all lowers housing values, and besides the millions of homeowners you'll piss off, you'll destabilize an economy primarily built on the mortgage. Not a good reelection plan. The places you're seeing growth are places where we could buy the land for cheap: suburbs and exurbs. We build huge…

SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water. New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs. The US simply needs to build new cities, and link them with high-spee…

>Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions,

Not really. All of downtown Portland, OR has been designated an Opportunity Zone[0]. "the Ritz Carlton Hotel that’s going up in downtown Portland was partly funded with these tax breaks."

[0]https://www.opb.org/article/2021/10/22/new-book-looks-at-por...

Re: The anti-abundance critique on housing is wrong

#597

Post by MetaWhirledPeas »

999900000999 wrote: post #352

Excessive regulation is 90% of it. Here's how a rational market works. If I build an apartment complex, eventually those apartments will get older and more affordable. And even before that upper middle class folks will move in, freeing up their previous homes. But that's not how many in local governments see it. So you have affordable housing quotas on new developments. You have developers building units for the home…

> If you stay in an unaffordable city you can't wait around waiting for politicians to fix it.

Sadly this is the best advice for personal well-being. 'Sadly' because it disrupts families.

Re: The anti-abundance critique on housing is wrong

#598

Post by sensanaty »

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?

I recall an article on HN quite a while ago about one of those property management companies/websites in the Bay Area. The article was detailing that, while the majority of people looking to rent out their properties were individuals and not the ultra wealthy, the app "encouraged" price-fixing, including things such as keeping a certain % of lots vacant on purpose in order to drive up prices artificially. I put encouraged in quotes because it turned out that a prerequisite of managing your properties through this application was actually complying with the price fixing, on an app-wide scale of all its users.

So despite it making no financial sense on an individual, house-by-house level, what happened in practice is that the market itself got strangled by this collusion and despite the existence of many empty houses available for either purchase or rent, you ended up with a non-negligible amount of these places not ending up in the market organically and as such driving up the costs for everyone. The property owners win big with this scheme of course, and the way things were setup you'd be a fool to go against the grain and try outcompete on cheaper housing, since you can't beat an entire market getting strangled.

So yes, "the rich" aren't that stupid, they just so happen to have systems that make these sort of moves profitable.

Re: The anti-abundance critique on housing is wrong

#599

Post by HEmanZ »

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…

If general housing is abundant enough that it has very low ROI compared to other available investments, then no they won’t buy up housing. One pretty simple way to do this is to raise property taxes high enough that a vacant condo is a very bad investment. This is what it would mean to commoditize housing.

I think it’s a realistic goal for apartments/condos. Single family homes will always be constrained by land.

(Edit): I think you, and a lot of people who are anti-capitalist on housing, make the implicit assumption that all housing is a fixed good. There is only so much housing and our political goal is to allocate that fixed amount. In a lot of major US cities this is sort of true because we have regulated the construction of new housing to the point where even the government can’t build it. But the anti-regulation perspective is that if we get rid of the regulations preventing housing construction, then enough housing will be constructed that the allocation problem isn’t much of a problem. (Or something in between, ie it’s a lot easier to build/buy social housing to give away to people if housing is already made very abundant, and the fact that even governments like California have to spend truly ludicrous amounts of money just to get a few crappy studios built)

Re: The anti-abundance critique on housing is wrong

#600

Post by massysett »

bobthepanda wrote: post #350
Onavo wrote: post #200

Earlier quoted context omitted.

NYT is an exception, or more specifically it's much bigger than most other news shops and has the luxury of having a large loyal customer base, a brand reputation to defend, and a full time business analysis and data science team to upkeep its excellence. Your local papers are barely scraping by and are mostly owned by hedge funds whose primary objective to squeeze the consumer via judicial usage of paywalls and clic…

Also NYT has spent a lot of time and energy into diversifying into things that are not news. There is a subset of its customers that is only really paying for the games like the crossword. There is a subset only really paying for Cooking. etc.

Just like the old days, when people would subscribe to the daily newspaper for the crossword, the comics, the TV listings, the want ads, or the ads and coupons with the Sunday paper.

NYT is really just making the old newspaper model work in the new age, albeit with higher reliance on subscription revenue and less an ad revenue.

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