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The Folk Economics of Housing

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Re: The Folk Economics of Housing

#171

Post by BobaFloutist »

stego-tech wrote: post #87
lokar wrote: post #58

Earlier quoted context omitted.

But (the sound) financial models that lead PE and others to this investment are built around the assumption that supply will be artificially limited. If you build enough they will see reduced returns and back off.

Except those firms currently have enough money to lobby politicians to oppose any changes that would meaningfully increase supply, and also hold outsized stakes in the companies and suppliers who would build said stock. It’s a rigged game top to bottom. A free market would’ve fixed this years ago, but this is not a free market anymore. The difference is I advocate control of necessity markets returning to government…

>and also hold outsized stakes in the companies and suppliers who would build said stock.

Wouldn't that motivate them to build more?

Re: The Folk Economics of Housing

#172

Post by cloverich »

LargeWu wrote: post #147
dazc wrote: post #109

Earlier quoted context omitted.

It wasn't a surge in demand either..

It was a surge of demand, driven by the availability of cheap money.

Yes but thats misleading because the demand surge was people who want to live in the homes AND investors.

Re: The Folk Economics of Housing

#173

Post by jonplackett »

jeffbee wrote: post #135
jonplackett wrote: post #20

While housing remains a great investment for rich people, I doubt anything else will make any difference. If you build houses, they’ll just buy them and rent them out for profit.

"They will just buy them and rent them out" you have described investment. Funding the construction of houses using your capital and then letting them out to people without as much capital is how housing gets created. Just let it work! Let a guy build a house and rent it to someone.

You know it is also possible to build houses people buy and then live in, right?

House prices are so high because some people own too many of them. A home shouldn’t be an investment strategy

Re: The Folk Economics of Housing

#174

Post by cloverich »

jeffbee wrote: post #135
jonplackett wrote: post #20

While housing remains a great investment for rich people, I doubt anything else will make any difference. If you build houses, they’ll just buy them and rent them out for profit.

"They will just buy them and rent them out" you have described investment. Funding the construction of houses using your capital and then letting them out to people without as much capital is how housing gets created. Just let it work! Let a guy build a house and rent it to someone.

Its also how wealth is transferred up. Because the investor pays gains rates, can do like for like transactions, etc, and effectively grows their wealth faster than the non investor. This means non investors need to continuously compete with investors but where investors are capturing an ever larger share of the wealth.

Eventually if supply keeps up that will change, and longer still the wealth may trickle back down. But imho it would be faster to focus on avoiding the concentration in the first place through SFH as investments, via simple tax policy that discourages mom and pop investors from purchasing extra homes.

Re: The Folk Economics of Housing

#175

Post by jeffbee »

jonplackett wrote: post #173
jeffbee wrote: post #135

Earlier quoted context omitted.

"They will just buy them and rent them out" you have described investment. Funding the construction of houses using your capital and then letting them out to people without as much capital is how housing gets created. Just let it work! Let a guy build a house and rent it to someone.

You know it is also possible to build houses people buy and then live in, right? House prices are so high because some people own too many of them. A home shouldn’t be an investment strategy

The consequences of your policy are that people without a million dollars are sleeping in tents.

Re: The Folk Economics of Housing

#176

Post by cloverich »

People believe what they can see. New development happens in desireable areas and price goes up all around them. Meanwhile (mom and pop) investors buy and own significant chunks of the market. Together they tell a story.

Disincentivize investor ownership, and it will be harder to tell the story of investors buying up all the property, and the rest may fall into place at best, and at worst you get marginally lower prices and less validation of the investor price inflation stories.

Re: The Folk Economics of Housing

#177

Post by dwaltrip »

TulliusCicero wrote: post #115
jeremyjh wrote: post #96

Earlier quoted context omitted.

Then it isn’t saturated.

Right. The real problem is regulations that prevent saturation.

Housing regulation should be dramatically improved and streamlined, but we also have a deep cultural problem of nimbyism.

Humanity needs to learn how the cooperate much more effectively, or we are going to fuck everything up.

Re: The Folk Economics of Housing

#178

Post by 9rx »

TulliusCicero wrote: post #165
9rx wrote: post #130

Earlier quoted context omitted.

The pain in the ass has a cost, certainly, but isn't anywhere close to being the large portion of the cost. Even if you eliminated that cost, the houses still wouldn't be affordable to the average Joe.

I think they could be, but a place where demand is high for housing but it's easy to build a lot more housing, that doesn't really seem to exist anymore.

I suppose that goes without saying. If it were cheap and easy to build, there wouldn't be high demand.

Would it really be that cheap, though? Hell, even a single wide trailer built in a factory, which is about as ideal as it gets from a cost perspective, is still a home largely out of reach of the average Joe.

It remains unclear who is going to buy all these new houses unless they are sold at a loss — but who is going to build a home with a plan to sell it at a loss? You?

Re: The Folk Economics of Housing

#179

Post by k2enemy »

SilverElfin wrote: post #2

Is it that they truly don’t believe it or they don’t want more supply (since that changes their quality of life, neighborhoods, traffic, etc) but still do want lower prices in other ways (like by price caps or other things). One legitimate reason to not think supply reduces prices is because of big financial companies buying up lots of houses and having effectively free rein to price how they want. It removes the com…

> Is it that they truly don’t believe it or they don’t want more supply

If this comment section is anything to go by, there seem to be plenty of people that firmly believe that increasing housing supply doesn't actually increase housing supply, let alone the bigger leap that increasing housing supply decreases prices.

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