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This scheme is doomed to fail. 51% of the people will vote for rising house prices because that's their greatest asset. When highly geared property doubles in v

by vorg 9y ago

This scheme is doomed to fail. 51% of the people will vote for rising house prices because that's their greatest asset. When highly geared property doubles in value, the owners can make 5 or 10 times their initial investment. They don't think about the other 49% of the people -- that's the result of governments chosen by democracy. And to make the prices go up, boost the demand and restrict the supply. So governments bring in long-term visitors to boost the demand: immigrants, international students whose parents buy apartments for them, and guest workers to rent the houses. But governments, especially local ones, also restrict the supply: many regulations to slow down new development, rules against long-term hotel stays, and crackdowns on campervan living in urban areas. The people fighting the yimbies have cash flows and retirement nest eggs to protect, and that's the main decider on which way they vote. The yimbies are fighting a losing battle.

santaclaus 9y ago
> But governments, especially local ones California just passed legislation -- with teeth -- to stymie the attempts of local municipalities to block development.
mturmon 9y ago
Hmm, your claim does not fit with what I've seen in LA. There has emerged a consensus among people who care about planning that density around transit corridors is part of a solution to the housing problem. This manifested, since the early 00s, in housing construction that was mainly due to the mayor and some council-members influencing the planning department behind the scenes. But then, the YIMBY argument (which is admittedly somewhat wonky) has within the last decade taken root broadly among the electorate, and there has been a lot of such large developments built - Hollywood has been transformed. It has also manifested in the resounding defeat of Measure S (went down 31/69 %, see https://la.curbed.com/2017/3/7/14850898/live-election-results-2017-measure-s-la https://la.curbed.com/2017/3/7/14850898/live-election-result...) in LA. Of course, it's not 100% YIMBY. There are plenty of cases where neighborhoods have been transformed too fast, especially by house flippers (who are not really creating new housing), and there has been strong resistance.
corpMaverick 9y ago
> This scheme is doomed to fail. 51% of the people will vote for rising house prices because that's their greatest asset. When highly geared property doubles in value, the owners can make 5 or 10 times their initial investment. You are correct that people think like that. But it is nearsighted because even if the price of your home goes up, you cannot sell it because you need a place to live. It is a lose/lose. It takes away a significant part of purchasing power. Money that could be spent on shopping, entertainment, etc is used to pay the mortgage. Younger people are even more screwed, it is a tax from the young to the old.
- toomuchtodo 9y ago
  > But it is nearsighted because even if the price of your home goes up, you cannot sell it because you need a place to live. It is a lose/lose. It takes away a significant part of purchasing power. Money that could be spent on shopping, entertainment, etc is used to pay the mortgage. It is forced savings for retirement. Most people downsize once their kids leave home, cashing out their equity (as long as you haven't cash out refi'd your home to buy cars and vacations).
  - _chris_ 9y ago
    > Most people downsize once their kids leave home Except you can't do that in California, because then you're walking away from your Prop 13 "rent-controlled" property taxes.
  - corpMaverick 9y ago
    Some people, those who bought low and sold high at the end of their lives may recover. I can argue that even these people lose because the high prices of housing increased overall living costs during their lives. (e.g. Local business have to pay more on rent, employees need more money,they have longer commutes, etc)
m0llusk 9y ago
Value is more complex than that. Many people would like to live among friends and family and have their kids raise grandkids nearby. Housing price bubbles disrupt communities at great cost to society.
DrScump 9y ago
51% of the people will vote for rising house prices Homeowners don't constitute 51% in the first place.

by vorg 9y ago

santaclaus 9y ago

> But governments, especially local ones California just passed legislation -- with teeth -- to stymie the attempts of local municipalities to block development.

mturmon 9y ago

Hmm, your claim does not fit with what I've seen in LA. There has emerged a consensus among people who care about planning that density around transit corridors is part of a solution to the housing problem. This manifested, since the early 00s, in housing construction that was mainly due to the mayor and some council-members influencing the planning department behind the scenes. But then, the YIMBY argument (which is admittedly somewhat wonky) has within the last decade taken root broadly among the electorate, and there has been a lot of such large developments built - Hollywood has been transformed. It has also manifested in the resounding defeat of Measure S (went down 31/69 %, see https://la.curbed.com/2017/3/7/14850898/live-election-results-2017-measure-s-la https://la.curbed.com/2017/3/7/14850898/live-election-result...) in LA. Of course, it's not 100% YIMBY. There are plenty of cases where neighborhoods have been transformed too fast, especially by house flippers (who are not really creating new housing), and there has been strong resistance.

corpMaverick 9y ago

> This scheme is doomed to fail. 51% of the people will vote for rising house prices because that's their greatest asset. When highly geared property doubles in value, the owners can make 5 or 10 times their initial investment. You are correct that people think like that. But it is nearsighted because even if the price of your home goes up, you cannot sell it because you need a place to live. It is a lose/lose. It takes away a significant part of purchasing power. Money that could be spent on shopping, entertainment, etc is used to pay the mortgage. Younger people are even more screwed, it is a tax from the young to the old.

toomuchtodo 9y ago
> But it is nearsighted because even if the price of your home goes up, you cannot sell it because you need a place to live. It is a lose/lose. It takes away a significant part of purchasing power. Money that could be spent on shopping, entertainment, etc is used to pay the mortgage. It is forced savings for retirement. Most people downsize once their kids leave home, cashing out their equity (as long as you haven't cash out refi'd your home to buy cars and vacations).
- _chris_ 9y ago
  > Most people downsize once their kids leave home Except you can't do that in California, because then you're walking away from your Prop 13 "rent-controlled" property taxes.
- corpMaverick 9y ago
  Some people, those who bought low and sold high at the end of their lives may recover. I can argue that even these people lose because the high prices of housing increased overall living costs during their lives. (e.g. Local business have to pay more on rent, employees need more money,they have longer commutes, etc)

m0llusk 9y ago

Value is more complex than that. Many people would like to live among friends and family and have their kids raise grandkids nearby. Housing price bubbles disrupt communities at great cost to society.

DrScump 9y ago

51% of the people will vote for rising house prices Homeowners don't constitute 51% in the first place.