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In Vancouver, it seems popular to mention wealthy Chinese demand. While it doesn't escape supply and demand, I'd note that most markets, especially those in th

by whytaka 10y ago

In Vancouver, it seems popular to mention wealthy Chinese demand. While it doesn't escape supply and demand, I'd note that most markets, especially those in the realm of international trade and money flows, are administered by governments and adulterated by politics.

TheOtherHobbes 10y ago
Supply and demand is bullshit - a just-so story used to "explain" unhelpful economic outcomes to the victims of those outcomes. Neither supply nor demand are objectively or scientifically measurable. They're psychological and political positions, and both are reliably manipulated in all kinds of outrageous ways. Most of the time the pricing signals you get from a market haven't just been filtered through these processes, they've been defined by them.
- closeparen 10y ago
  Ok. Now please explain how the decision to block proposed housing units near my office is not responsible for the prohibitively high cost of the units that did get through.
  - TheOtherHobbes 10y ago
    That is not how it works. Prices are set by the relative leverage and political power of various competing groups, subject to local variations. The usual rule is that investors and speculators have more power than developers, developers have more power than landlords, and landlords have more power than entry-level house buyers. Existing house buyers sometimes have local power which is more or less on the same level as landlords, with local variations. Local planning laws and special interests can distort this relationship in various ways, but they can't change the fundamentals. Two things can: One is a change in government policy towards building housing to increase access and lower costs - which is unlikely, because investors and speculators tend to own policy. Even though asset inflation and boom/bust churn is a huge drain on the economy, effective national house building programs rarely happen, and when they do they tend to be literally low-rent, not middle class. The other is a macro-level slump, which can take out the top level - but almost always at the cost of losses in leverage and power all the way down the chain, some of which lead to debt and/or homelessness.
    - closeparen 10y ago
      >Prices are set by the relative leverage and political power of various competing groups, subject to local variations. Show me some examples of cities with high prices due to high speculator/developer/landlord power, that don't also have population growth and restrictive zoning. And how does your theory explain the apparently enormous power of speculators, developers, and landlords in San Francisco, where they are subject to draconian legal restrictions? How do you explain the apparently nonexistent power of speculators, developers, and landlords in a low-rent city like Milwaukee, where tenants' rights are minimal and developers can build pretty much whatever and wherever they want? >investors and speculators tend to own policy Are you suggesting that investors and speculators are secretly funding "grassroots" opposition to the developer ventures they also fund? Because the people who show up to planning meetings to speak against development at least present themselves as existing residents and tenants concerned about crowding, shadow, and gentrification. >One is a change in government policy towards building housing to increase access and lower costs So you agree that prices are kept high by government policy to not build housing. Then how is what I said "not how it works"?

by whytaka 10y ago

TheOtherHobbes 10y ago

Supply and demand is bullshit - a just-so story used to "explain" unhelpful economic outcomes to the victims of those outcomes. Neither supply nor demand are objectively or scientifically measurable. They're psychological and political positions, and both are reliably manipulated in all kinds of outrageous ways. Most of the time the pricing signals you get from a market haven't just been filtered through these processes, they've been defined by them.

closeparen 10y ago
Ok. Now please explain how the decision to block proposed housing units near my office is not responsible for the prohibitively high cost of the units that did get through.
- TheOtherHobbes 10y ago
  That is not how it works. Prices are set by the relative leverage and political power of various competing groups, subject to local variations. The usual rule is that investors and speculators have more power than developers, developers have more power than landlords, and landlords have more power than entry-level house buyers. Existing house buyers sometimes have local power which is more or less on the same level as landlords, with local variations. Local planning laws and special interests can distort this relationship in various ways, but they can't change the fundamentals. Two things can: One is a change in government policy towards building housing to increase access and lower costs - which is unlikely, because investors and speculators tend to own policy. Even though asset inflation and boom/bust churn is a huge drain on the economy, effective national house building programs rarely happen, and when they do they tend to be literally low-rent, not middle class. The other is a macro-level slump, which can take out the top level - but almost always at the cost of losses in leverage and power all the way down the chain, some of which lead to debt and/or homelessness.
  - closeparen 10y ago
    >Prices are set by the relative leverage and political power of various competing groups, subject to local variations. Show me some examples of cities with high prices due to high speculator/developer/landlord power, that don't also have population growth and restrictive zoning. And how does your theory explain the apparently enormous power of speculators, developers, and landlords in San Francisco, where they are subject to draconian legal restrictions? How do you explain the apparently nonexistent power of speculators, developers, and landlords in a low-rent city like Milwaukee, where tenants' rights are minimal and developers can build pretty much whatever and wherever they want? >investors and speculators tend to own policy Are you suggesting that investors and speculators are secretly funding "grassroots" opposition to the developer ventures they also fund? Because the people who show up to planning meetings to speak against development at least present themselves as existing residents and tenants concerned about crowding, shadow, and gentrification. >One is a change in government policy towards building housing to increase access and lower costs So you agree that prices are kept high by government policy to not build housing. Then how is what I said "not how it works"?