4 ms·

Won't work. Imagine supply is met, housing is cheap. People then want to live there more. Eventually the point of equilibrium is restored which is that banks ke

Won't work. Imagine supply is met, housing is cheap. People then want to live there more. Eventually the point of equilibrium is restored which is that banks keep on creating fiat money until land prices reach a point where you can just about eat and afford the interest repayments. Land value tax is the answer for all those who don't simply want a quick in so they can get on the gravy train and actually want their kids to grow up in a society where wealth creation, not money creation, makes you richer.

cylinder 10y ago
Yeah, it's always going to be a function of income in the area. People value housing enough to pay up to 50% of their income towards it in desirable cities. If more inventory is available more people will elect to live in SF and rents will find equilibrium at around the 50% of incomes
- branchless 10y ago
  In large part because many people own/mortgage multiple homes because it's a one-way bet under the current system where all productivity gains flow to land.
xyzzy_plugh 10y ago
I tend to agree with you, but you've got it all wrong. People already want to live there like crazy. The demand keeps piling on and supply has not risen to meet it. I agree that land value tax is a big part of the problem, but new, high-density development is the only solution. And even then, housing won't be cheap. You just might be able to get a reasonable mortgage on a place built in the last 50 years.
- branchless 10y ago
  We've seen what happens when you meet supply in a speculative bubble. The USA, Ireland, Portugal and Spain all had big supply and banks kept on lending into it because it costs them zero to create fiat money to rent out against land. Then you get a massive crash again. How would demand be if you force a big wedge of people who own/mortgaged more than one home to sell up? I think it would ease considerably. How many SF tech "entrepreneurs" are leveraged on housing? Flush 'em out with land value tax.

cylinder 10y ago

Yeah, it's always going to be a function of income in the area. People value housing enough to pay up to 50% of their income towards it in desirable cities. If more inventory is available more people will elect to live in SF and rents will find equilibrium at around the 50% of incomes

branchless 10y ago
In large part because many people own/mortgage multiple homes because it's a one-way bet under the current system where all productivity gains flow to land.

xyzzy_plugh 10y ago

I tend to agree with you, but you've got it all wrong. People already want to live there like crazy. The demand keeps piling on and supply has not risen to meet it. I agree that land value tax is a big part of the problem, but new, high-density development is the only solution. And even then, housing won't be cheap. You just might be able to get a reasonable mortgage on a place built in the last 50 years.

branchless 10y ago
We've seen what happens when you meet supply in a speculative bubble. The USA, Ireland, Portugal and Spain all had big supply and banks kept on lending into it because it costs them zero to create fiat money to rent out against land. Then you get a massive crash again. How would demand be if you force a big wedge of people who own/mortgaged more than one home to sell up? I think it would ease considerably. How many SF tech "entrepreneurs" are leveraged on housing? Flush 'em out with land value tax.