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> Rents are high because of supply and demand. That's literally all there is to it. Except that's literally not all there is to it, that's just one component
by maxsilver 10y ago
> Rents are high because of supply and demand. That's literally all there is to it.
Except that's literally not all there is to it, that's just one component of the problem. It turns out housing is just a tiny bit more complicated than your first day of Econ 101. The half dozen empty skyscrapers lots of us pass by each day seem to indicate that.
"High Rent is just supply and demand" is the new "I could rebuild that whole app in one weekend".
- randomdata 10y ago> that's just one component of the problem. Which components influence the problem here without ending up only being an influencer on the supply or the demand? > It turns out housing is just a tiny bit more complicated than your first day of Econ 101. The half dozen empty skyscrapers lots of us pass by each day seem to indicate that. I do not see where your example indicates that. In this case, an owner is not required to make his property, even if vacant, available on the market. That affects the supply in the market. That still comes down to basic supply and demand.
- spdionis 10y ago> Which components influence the problem here without ending up only being an influencer on the supply or the demand? If all the relevant components "just" affect supply and demand then it's useless to analyze supply and demand. Take a step back and analyze those components.
- randomdata 10y agoThe only analysis I see in the original comment is what determines price, and the answer truly is supply and demand. I may be interesting to look at why the supply and the demand are what they are, but that seems to be outside of the scope of this discussion. From a practical perspective, I'm not sure further analysis is necessary either. Price, as determined by basic supply and demand principles, is a useful signalling mechanism even without understanding the underlying reasons.
- deleted 10y ago[deleted]
- closeparen 10y agoWhat else do you think influences rents?
- eli_gottlieb 10y agoOwners of the existing supply, especially oligopolists, telling the city council not to build any new supply.
- redthrowaway 10y agoTo the extent that's true, artificial constriction of supply does not escape "supply and demand".
- jessaustin 10y agoIt certainly takes the wind out of the Officer-Barbradyesque "Move along people! Nothing to see here!" we got from the Ec 10 auditor upthread.
- morgante 10y agoI didn't read that at all. In fact, understanding that it's all about supply and demand is a critical step for tackling this issue and allowing new supply. I see far more resistance to new housing from people who don't understand econ 101 than from those who do.
- jessaustin 10y agoI read this: The only thing the fat cats change is what proportion of the money goes to which people. Though this is a basic neoclassical assumption, it is definitely not true for any of the markets that have seen the most extreme price inflation. "The fat cats" have limited supply in those markets, not by the old-fashioned oligopolist technique of buying all available land, but by the more modern and more corrupt technique of dictating their favored regulations to the local politicians and regulators whose elections and appointments they have bankrolled.
- orangecat 10y ago"High Rent is just supply and demand" is the new "I could rebuild that whole app in one weekend". "We can fix this problem with simple government regulations" is also up there.
- kristopolous 10y agoPretty sure that's true though. Unfortunately, rationality is usurped by ideology. Suggesting things outside a narrow dogmatic range is seen as heresy; regardless of how strong the empirical evidence is.