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Figures put 14-20 million unoccupied houses in the US. A lot of those are just rich people buying valuable real estate and hoarding it as a store of value, but

by zanny 9y ago

Figures put 14-20 million unoccupied houses in the US. A lot of those are just rich people buying valuable real estate and hoarding it as a store of value, but a lot of them are also in locations where nobody who would want to buy them can afford to live because there is no work available. There are thousands of ghost towns in rural America which depopulated for a wide variety of reasons since the 70s but all could be cheaply renewed if people could survive living there without guaranteed constant employment. So its not that the whole housing market just moves up the value of UBI and nothing changes. UBI introduces a new market of houses that currently are unsellable and rotting. Those are obviously not a long term solution, but the existence of UBI and the economic pressure it produces will incentivize builders to develop the cheapest possible living conditions to supply to people living on UBI. That almost certainly would be an entirely new model of building - constructing for density, but without the limitations of building in already densely populated areas.

bduerst 9y ago
The unoccupied homes in the U.S. is primarily due to banks holding onto foreclosed properties. You could say, "This is a problem with the current financial system," which it is, but it's not a problem that UBI will solve. If UBI is enacted, then prices will still inflate and people who purchase foreclosed homes at auction will continue to do so today, because they will also have the same increase in income as everyone else.
- maxerickson 9y ago
  The net increase in income won't be the same for everyone. If UBI is funded by printing money, people with assets will see them devalue through inflation (people with no assets won't have this loss). If UBI is funded by taxes, it's likely to be progressive. So sure, the high income people get the UBI check. And a bigger tax bill to go with it.
  - bduerst 9y ago
    If you assume UBI is based on an income tax, then that's not universal basic income, that's negative income tax. Even so, if you hypothetically see a decrease in income for 3% of the population and an increase in income for 97%, you still have inflation. 100% of the population purchases housing, which is income-elastic, meaning housing prices will increase because 97% of the population's income will increase.
    - maxerickson 9y ago
      I'm not assuming it would be distributed through the tax system, I'm insisting that it is either funded by taxation or inflation. Maybe it would be funded by magic fairies, who knows. I guess funding it with inflation would be close enough to that. The point I'm making is that the "universal" or "unconditional" just means that everyone gets it. It doesn't mean that everyone is better off after it is put in place, because there will be tax and economic effects from putting such a thing in place.
      - bduerst 9y ago
        And the point of this thread is that if everyone is to get UBI, economic principles like inflation need to be addressed first. This is why traditional welfare programs tend to limit the type of spending - i.e. medicaid or food stamps.
    - zanny 9y ago
      This assumes both A. everyone is suddenly just making more money and B. the supply of housing remains constant. In terms of A, some people would drop out of their current employment. In all likelihood temporarily, but a lot of people are doing things they don't want to do because they don't want to be homeless. Likewise, it would almost certainly not be 97% of people making more money - that kind of progressive tax threshold would mean you don't even start taxing for UBI until 6 figure income. In terms of B, a lot of areas of the country are currently unlivable for a huge percentage of people because there is no way to earn money to afford to live there. Living there in absolute monetary terms would be cheap, but absolute money is pointless if you have nothing coming in. UBI reduces demand for housing in cities because anyone that doesn't want the added income from living there would now have the option to move away. City housing prices are extraordinarily beyond the flat costs of construction and maintenance - the scarcity of work means a scarcity of high demand housing in cities surrounded by deserts of unlivable land. Finally, for all those dropping out of the workforce, the UBI is not an elastic income - it will be a simple binary can a UBI recipient afford to live in your apartments or not. For those who want an extremely reliable tenant who has a guaranteed ability to pay rent every month, meeting the UBI threshold becomes an extremely strong price ceiling on affordable housing. Inflation isn't magic. Inflation happens insofar as someone is willing to pay the higher prices and nobody can produce supply to drive the price back down. Introducing UBI does neither to housing (especially when as a percentage of income UBI relative to the cost of home ownership would be a relatively small gain in income for most people, and almost all current homeowners / tenants).

by zanny 9y ago

bduerst 9y ago

The unoccupied homes in the U.S. is primarily due to banks holding onto foreclosed properties. You could say, "This is a problem with the current financial system," which it is, but it's not a problem that UBI will solve. If UBI is enacted, then prices will still inflate and people who purchase foreclosed homes at auction will continue to do so today, because they will also have the same increase in income as everyone else.

maxerickson 9y ago
The net increase in income won't be the same for everyone. If UBI is funded by printing money, people with assets will see them devalue through inflation (people with no assets won't have this loss). If UBI is funded by taxes, it's likely to be progressive. So sure, the high income people get the UBI check. And a bigger tax bill to go with it.
- bduerst 9y ago
  If you assume UBI is based on an income tax, then that's not universal basic income, that's negative income tax. Even so, if you hypothetically see a decrease in income for 3% of the population and an increase in income for 97%, you still have inflation. 100% of the population purchases housing, which is income-elastic, meaning housing prices will increase because 97% of the population's income will increase.
  - maxerickson 9y ago
    I'm not assuming it would be distributed through the tax system, I'm insisting that it is either funded by taxation or inflation. Maybe it would be funded by magic fairies, who knows. I guess funding it with inflation would be close enough to that. The point I'm making is that the "universal" or "unconditional" just means that everyone gets it. It doesn't mean that everyone is better off after it is put in place, because there will be tax and economic effects from putting such a thing in place.
    - bduerst 9y ago
      And the point of this thread is that if everyone is to get UBI, economic principles like inflation need to be addressed first. This is why traditional welfare programs tend to limit the type of spending - i.e. medicaid or food stamps.
  - zanny 9y ago
    This assumes both A. everyone is suddenly just making more money and B. the supply of housing remains constant. In terms of A, some people would drop out of their current employment. In all likelihood temporarily, but a lot of people are doing things they don't want to do because they don't want to be homeless. Likewise, it would almost certainly not be 97% of people making more money - that kind of progressive tax threshold would mean you don't even start taxing for UBI until 6 figure income. In terms of B, a lot of areas of the country are currently unlivable for a huge percentage of people because there is no way to earn money to afford to live there. Living there in absolute monetary terms would be cheap, but absolute money is pointless if you have nothing coming in. UBI reduces demand for housing in cities because anyone that doesn't want the added income from living there would now have the option to move away. City housing prices are extraordinarily beyond the flat costs of construction and maintenance - the scarcity of work means a scarcity of high demand housing in cities surrounded by deserts of unlivable land. Finally, for all those dropping out of the workforce, the UBI is not an elastic income - it will be a simple binary can a UBI recipient afford to live in your apartments or not. For those who want an extremely reliable tenant who has a guaranteed ability to pay rent every month, meeting the UBI threshold becomes an extremely strong price ceiling on affordable housing. Inflation isn't magic. Inflation happens insofar as someone is willing to pay the higher prices and nobody can produce supply to drive the price back down. Introducing UBI does neither to housing (especially when as a percentage of income UBI relative to the cost of home ownership would be a relatively small gain in income for most people, and almost all current homeowners / tenants).