4 ms·

but they are the cost of rising property prices elsewhere due to artificially low supplies, Is this an actual problem? Isn't this a desired effect, balancing o

but they are the cost of rising property prices elsewhere due to artificially low supplies, Is this an actual problem? Isn't this a desired effect, balancing out the prices, so that the subsidized area doesn't become a prohibitively expensive anomaly? the cost to property owners who cannot realize the full potential of their assets, I imagine the property owners in question are doing just fine (just being in the class "property owners" means they are better off than most in the area), again I don't think this is an actual problem. I appreciate your comment, but it seems to be a lot of handwaving about a vague "destruction of wealth." What number and what type of people would benefit from deregulation/removing subsidies? Would it really be the people that are suffering and struggling? I'm not seeing it.

itsjoeco 11y ago
"I imagine the property owners in question are doing just fine." You're interested in the exact situation, and in this exact situation, maybe you're right. Do you expect that any number of rules restricting the use of property would make these owners stop "doing just fine?" If we are basing our legal system off of whether people are "doing just fine" then who is the arbiter of who is doing just fine and who is not doing just fine? Should we call resu_nimda every time there is a property dispute to determine who deserves what according to their need?
stvswn 11y ago
Yes, undersupply and high prices are a problem. Only 9% of the housing stock in SF is available for rent at market rates. I know it is the desired effect of subsidies to reduce prices for a worthy class of people, but my point is that it doesn't do a good job, and it doesn't have the desired effect, and that there are unseen costs. Frederic Bastiat wrote about this in 1850. It is a foundational concept of the Austrian school of economics. Reasonable people dispute classically liberal economics, but its been thoroughly studied. I'm not hand-waving. Yes, the concept of measuring the wealth that was destroyed seems "vague," that was precisely his point. If you're interested: https://en.wikisource.org/wiki/Essays_on_Political_Economy/That_Which_Is_Seen,_and_That_Which_Is_Not_Seen https://en.wikisource.org/wiki/Essays_on_Political_Economy/T...
- resu_nimda 11y ago
  but my point is that it doesn't do a good job, and it doesn't have the desired effect, and that there are unseen costs. You haven't really demonstrated that it's worse than the alternative, let alone how or why. Of course there are unseen costs; there always are, with matters of public policy affecting so many people. I could say the same exact thing about the inverse situation of an unregulated free market - "there are unseen costs that are hard to measure." Is that a strong argument against it? edit: In other words, how do you conclude that the costs that you describe outweigh the costs of people being pushed out of their homes, the cultural effects, etc? Ultimately it ends up as a subjective value judgment, there are too many factors and human emotions at play to be objective. I don't really believe in trickle-down economics or the magic ability of the free market to correct all social ills, I believe in directly helping those that need it most.
  - thwarted 11y ago
    I don't really believe in trickle-down economics or the magic ability of the free market to correct all social ills, I believe in directly helping those that need it most. In some cases, "those who need it most" only need it because of the economic environment created by regulation. In many cases, "directly helping" may solve the short-term, immediate concerns of those housing/economically disadvantaged, but doesn't actually serve to fix the problem that's making things the way they are to begin with. In SF, there's a lot of rhetoric around "market rate housing" and "affordable housing". Presenting it as a dichotomy as such ignores that there are things that could be done to make market rate housing the same price as affordable housing. There wouldn't be talk of "affordable" housing as a distinct thing if "market rate" wasn't so out of whack because of the complex economic and political incentives and setup in California, the Bay Area, and SF. Another thing that I see frequently glossed over is that "market rate" isn't a single thing. It has different values based the actual quality of the property in question. I'd love to move into a better place at the same rent I'm paying now, because really, my current place is way overpriced considering the quality and I can afford to continue to pay the rate I'm paying. But it's not worth it for me to move because so many places are equal or less quality and equal or more in price. There are no better places coming on the market at this price point. If the economic and political climate was such that the market was able to provide an equal or greater quality place for equal or greater price, that would free up a lesser quality place (because I could move there) and reduce its price to a market rate based on its quality that someone with lesser means could then afford. The availability of residences is a significant contributor to the market rate for residences in SF, so much so that it dwarfs all other possible influences on the market rate. That being said, I do believe that the market needs to be able to provide a wide range of quality — just building high end housing isn't going to be as fast or as solid of a fix as building housing for many different kinds of economic classes. This is part of the problem around mandates to build "affordable housing" or "subsidized housing" (usually as a percentage of total building): these are, by definition, below market rate, but someone is paying for the difference between "affordable" and "market". That spread needs to be reduced, rather than subsidized.

itsjoeco 11y ago

"I imagine the property owners in question are doing just fine." You're interested in the exact situation, and in this exact situation, maybe you're right. Do you expect that any number of rules restricting the use of property would make these owners stop "doing just fine?" If we are basing our legal system off of whether people are "doing just fine" then who is the arbiter of who is doing just fine and who is not doing just fine? Should we call resu_nimda every time there is a property dispute to determine who deserves what according to their need?

stvswn 11y ago

Yes, undersupply and high prices are a problem. Only 9% of the housing stock in SF is available for rent at market rates. I know it is the desired effect of subsidies to reduce prices for a worthy class of people, but my point is that it doesn't do a good job, and it doesn't have the desired effect, and that there are unseen costs. Frederic Bastiat wrote about this in 1850. It is a foundational concept of the Austrian school of economics. Reasonable people dispute classically liberal economics, but its been thoroughly studied. I'm not hand-waving. Yes, the concept of measuring the wealth that was destroyed seems "vague," that was precisely his point. If you're interested: https://en.wikisource.org/wiki/Essays_on_Political_Economy/That_Which_Is_Seen,_and_That_Which_Is_Not_Seen https://en.wikisource.org/wiki/Essays_on_Political_Economy/T...

resu_nimda 11y ago
but my point is that it doesn't do a good job, and it doesn't have the desired effect, and that there are unseen costs. You haven't really demonstrated that it's worse than the alternative, let alone how or why. Of course there are unseen costs; there always are, with matters of public policy affecting so many people. I could say the same exact thing about the inverse situation of an unregulated free market - "there are unseen costs that are hard to measure." Is that a strong argument against it? edit: In other words, how do you conclude that the costs that you describe outweigh the costs of people being pushed out of their homes, the cultural effects, etc? Ultimately it ends up as a subjective value judgment, there are too many factors and human emotions at play to be objective. I don't really believe in trickle-down economics or the magic ability of the free market to correct all social ills, I believe in directly helping those that need it most.
- thwarted 11y ago
  I don't really believe in trickle-down economics or the magic ability of the free market to correct all social ills, I believe in directly helping those that need it most. In some cases, "those who need it most" only need it because of the economic environment created by regulation. In many cases, "directly helping" may solve the short-term, immediate concerns of those housing/economically disadvantaged, but doesn't actually serve to fix the problem that's making things the way they are to begin with. In SF, there's a lot of rhetoric around "market rate housing" and "affordable housing". Presenting it as a dichotomy as such ignores that there are things that could be done to make market rate housing the same price as affordable housing. There wouldn't be talk of "affordable" housing as a distinct thing if "market rate" wasn't so out of whack because of the complex economic and political incentives and setup in California, the Bay Area, and SF. Another thing that I see frequently glossed over is that "market rate" isn't a single thing. It has different values based the actual quality of the property in question. I'd love to move into a better place at the same rent I'm paying now, because really, my current place is way overpriced considering the quality and I can afford to continue to pay the rate I'm paying. But it's not worth it for me to move because so many places are equal or less quality and equal or more in price. There are no better places coming on the market at this price point. If the economic and political climate was such that the market was able to provide an equal or greater quality place for equal or greater price, that would free up a lesser quality place (because I could move there) and reduce its price to a market rate based on its quality that someone with lesser means could then afford. The availability of residences is a significant contributor to the market rate for residences in SF, so much so that it dwarfs all other possible influences on the market rate. That being said, I do believe that the market needs to be able to provide a wide range of quality — just building high end housing isn't going to be as fast or as solid of a fix as building housing for many different kinds of economic classes. This is part of the problem around mandates to build "affordable housing" or "subsidized housing" (usually as a percentage of total building): these are, by definition, below market rate, but someone is paying for the difference between "affordable" and "market". That spread needs to be reduced, rather than subsidized.