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A lot more market-rate construction helps low-income renters more than subsidies

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Re: A lot more market-rate construction helps low-income renters more than subsidies

#11

Post by eli_gottlieb »

whybroke wrote: post #4
yummyfajitas wrote: post #3

If you stop thinking about prices and simply count people in houses, this result becomes more obvious. If N people want to live in SF but only K The only question is which N-K people have a problem - this will be determined by economic and political processes.

> determined by ... political processes Part of which is playing out here where people of privilege are working out a story that allows them to displace an older population dependent on rent control so that they can get that housing.

Oh shut up. Everyone deserves housing. Which bloody idiot started telling left-wing people "class struggle" is actually just a zero-sum society configured to the disadvantage of the formerly well-off?

Re: A lot more market-rate construction helps low-income renters more than subsidies

#12

Post by ZeroGravitas »

ageek123 wrote: post #6
whybroke wrote: post #4

Earlier quoted context omitted.

> determined by ... political processes Part of which is playing out here where people of privilege are working out a story that allows them to displace an older population dependent on rent control so that they can get that housing.

I assume when you said "older population" you mean "people who have lived here longer." Because as you know, rent control applies to a housing unit regardless of the age of the person living in it. But more importantly, I'm not sure what you mean by "people of privilege are working out a story that allows them to displace." As far as I can tell, what's happening is that landlords own property, and they see an opportu…

I'm guessing they're talking about here on Hacker News, where young, rich professionals who may want to live and work in SF are upvoting stuff that undermines rent control.

Which is convenient as they'd like to use their superior purchasing power to acquire nice SF apartments, and rent control blocks them from that goal. So it helps to have economics on your side, to a) make you feel better about yourself and b) to convince others to join your side.

Maybe in this case that's "right", but the fact that we are collectively upvoting the economics that helps us and not approvingly discussing some other economic theory about how importing low-wage software developers would boost the economy makes it political.

Re: A lot more market-rate construction helps low-income renters more than subsidies

#13

Post by brc »

bjourne wrote: post #9

It's not only a problem in SF, exploding rents is a problem all over the world. But is "barriers to new construction" the problem? No one ever explains those, just blames politicians. But for a property owning corporation it is obviously a poor idea to invest in new apartments because that would reduce the value of the ones they already got. It's not much different from OPEC not wanting to flood the market with oil.

For a property owning corporation, it might not be the best thing. However, in a free market, there wouldn't be anything they could do about it. Competition is supposed to reduce the profits of any industry over time.

Barriers to new construction is of course the problem. If you had to fill out a lot of paperwork and get government permission to build a tractor, and there was a shortage of tractors, the solution wouldn't be to give farmers more cash to procure a tractor, nor try and control the price of tractors, nor pass laws restricting use of tractors. The solution would be to build more tractors. With enough tractors, it woudotn even matter if the occasional farmer kept one in the barn unused.

I don't know how people develop this blindspot with housing - if the prices are going up too much it is because demand is exceeding supply. Everyone is reluctant to say the lack of supply is an issue, and I don't know why.

Re: A lot more market-rate construction helps low-income renters more than subsidies

#14

Post by seanmcdirmid »

brc wrote: post #13
bjourne wrote: post #9

It's not only a problem in SF, exploding rents is a problem all over the world. But is "barriers to new construction" the problem? No one ever explains those, just blames politicians. But for a property owning corporation it is obviously a poor idea to invest in new apartments because that would reduce the value of the ones they already got. It's not much different from OPEC not wanting to flood the market with oil.

For a property owning corporation, it might not be the best thing. However, in a free market, there wouldn't be anything they could do about it. Competition is supposed to reduce the profits of any industry over time. Barriers to new construction is of course the problem. If you had to fill out a lot of paperwork and get government permission to build a tractor, and there was a shortage of tractors, the solution woul…

In an unrestricted free market, someone would just buy up all the property in a constrained space to corner the market. That has definitely happened before in robber baron days.

And honestly, if I wanted to live in a cess pool like Houston, I would move there. Houses are cheap enough (comparatively) but it is a huge icky sprawl.

Re: A lot more market-rate construction helps low-income renters more than subsidies

#15

Post by collyw »

That's kind of obvious is it not.

Every time the UK government do something to "help first time buyers" it involves getting them into even more debt, and keeping the prices high. There are still the same number of properties around, and the same number of people competing for them. How can they honestly think this is helping in any way.

Re: A lot more market-rate construction helps low-income renters more than subsidies

#16

Post by patio11 »

bjourne wrote: post #9

It's not only a problem in SF, exploding rents is a problem all over the world. But is "barriers to new construction" the problem? No one ever explains those, just blames politicians. But for a property owning corporation it is obviously a poor idea to invest in new apartments because that would reduce the value of the ones they already got. It's not much different from OPEC not wanting to flood the market with oil.

No one ever explains those

Examples:

+ Mission Street between 16th and Ceasar Chavez is a rail corridor. There was a proposal to limit this area to 8 story buildings. SF counterproposed and adopted a height limit which was on a per-property basis the lower of either a) what was presently built there or b) what city staff recommended, to preserve the character of the neighborhood. (Source: http://www.slate.com/blogs/moneybox/2013/04/11/san_francisco...)

What is currently built there includes e.g. two- to three-story non-operating pornographic theatres. (Source: I periodically walked past them while doing business in SF.) Reasonable people can disagree on whether one prefers non-operating pornographic theatres or new housing. San Francisco has decided, through their elected representatives, that they affirmatively prefer the theatres.

+ San Francisco has a complex, interlocking system of permits required to approve new construction, which is designed to and has the effect of minimizing it.

SF has built an average of 1,500 new housing units per year, for the last several decades. I pulled that stat from an advocacy organization which quotes it as what is realistically possible given that SF is filled with "strong communities, both those concerned about equity and those with more NIMBY interests, that will not allow the radical deregulation many developers (and the growing ranks of Ayn Rand libertarian techie counterparts) seek"

http://www.sfccho.org/wp-content/uploads/2014/02/Whose-Futur...

The population of SF has increased by almost 100k in ~15 years. (2001 census: 777k, 2013 census: 837k, all signs point to it accelerating) At that point, Ayn Rand libertarian techie propaganda ^H^H^H^H^H^H fourth grade math takes over.

Re: A lot more market-rate construction helps low-income renters more than subsidies

#17

Post by yummyfajitas »

ZeroGravitas wrote: post #12
ageek123 wrote: post #6

Earlier quoted context omitted.

I assume when you said "older population" you mean "people who have lived here longer." Because as you know, rent control applies to a housing unit regardless of the age of the person living in it. But more importantly, I'm not sure what you mean by "people of privilege are working out a story that allows them to displace." As far as I can tell, what's happening is that landlords own property, and they see an opportu…

I'm guessing they're talking about here on Hacker News, where young, rich professionals who may want to live and work in SF are upvoting stuff that undermines rent control. Which is convenient as they'd like to use their superior purchasing power to acquire nice SF apartments, and rent control blocks them from that goal. So it helps to have economics on your side, to a) make you feel better about yourself and b) to c…

As one of the pro-economics faction, I'm a strong proponent of offshoring and immigration.

https://news.ycombinator.com/item?id=9246255 https://news.ycombinator.com/item?id=9126011 https://news.ycombinator.com/item?id=8884775

Re: A lot more market-rate construction helps low-income renters more than subsidies

#18

Post by whybroke »

yummyfajitas wrote: post #5
whybroke wrote: post #4

Earlier quoted context omitted.

> determined by ... political processes Part of which is playing out here where people of privilege are working out a story that allows them to displace an older population dependent on rent control so that they can get that housing.

Yes, if you believe that the political process is controlled by the wealthy and you oppose the wealthy, then allowing more construction is your best bet. My concern with the political process is the exact opposite - it doesn't favor the wealthy but it should. In either case, eliminating the malthusian constraints on housing are a solution to the problem. See also this article on moreright illustrating how your view a…

How would San Francisco be better with 2 million people than with 1 million? Should it grow until it is as crowded as the cities people are fleeing in order to come to SF? What will happen is not that increased supply will have any effect but demand from talented people will drop as SF becomes as characterless as any other cheaper US city.

As crowding rises the value of labor relative to land will fall, something very beneficial to the wealthy and harmful to the employed.

On a site where conjecture about immorality pills and "the singularity" abound, how is it supposed that population density can grow forever and everyone be better off for it? Mega-cities are the characteristic of the third world and they are paragons of failure. Or will SF uniquely continue to grow infinitely owing to killer apps and the innate superiority of its people?

Re: A lot more market-rate construction helps low-income renters more than subsidies

#19

Post by whybroke »

ageek123 wrote: post #6
whybroke wrote: post #4

Earlier quoted context omitted.

> determined by ... political processes Part of which is playing out here where people of privilege are working out a story that allows them to displace an older population dependent on rent control so that they can get that housing.

I assume when you said "older population" you mean "people who have lived here longer." Because as you know, rent control applies to a housing unit regardless of the age of the person living in it. But more importantly, I'm not sure what you mean by "people of privilege are working out a story that allows them to displace." As far as I can tell, what's happening is that landlords own property, and they see an opportu…

And therefore there is a direct arithmetic connection between rent control benefit and tenant age. The article involves improbable convoluted statistical conjectures yet is incapable of noticing that extremely simple correlation. Perhaps more disturbing than the ethical issue is the unconstrained confirmation bias.

The "story" built here and in other articles is the minimal believable tale that gets rid of current generally older tenants to make those units available for people with more money. To reach the front page of HN, it only needs to be believable to those who will benefit from its implementation. Not a very high hurdle and usually easily reach by hand waving some misunderstood "free market" juvenilia.

Re: A lot more market-rate construction helps low-income renters more than subsidies

#20

Post by collyw »

yummyfajitas wrote: post #5
whybroke wrote: post #4

Earlier quoted context omitted.

> determined by ... political processes Part of which is playing out here where people of privilege are working out a story that allows them to displace an older population dependent on rent control so that they can get that housing.

Yes, if you believe that the political process is controlled by the wealthy and you oppose the wealthy, then allowing more construction is your best bet. My concern with the political process is the exact opposite - it doesn't favor the wealthy but it should. In either case, eliminating the malthusian constraints on housing are a solution to the problem. See also this article on moreright illustrating how your view a…

"it doesn't favor the wealthy but it should"

Wtf? How do you get to that conclusion when inequality has been growing for the last 40 years?

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