6 ms·

This article is trash and I'm stunned that it would be hosted on a harvard.edu domain. Whoever posted this should be ashamed of themselves. Fallacies, lies, an

This article is trash and I'm stunned that it would be hosted on a harvard.edu domain. Whoever posted this should be ashamed of themselves. Fallacies, lies, and generally ignorant opinions include * Pretending the US was a more market-oriented economy in the past (which is not true) * Comparing the housing situation 100 years ago to that of today. There are many reason why america in 1917 is very different than the america of 2017 * Literally cites a Wall Street Oasis forum post as a source on why we should not subsidize housing for the poor * Income inequality is (obviously) a huge component of housing not being affordable (especially in urban centers) and this is dismissed using an obvious straw man argument. One of the biggest housing subsidies is the mortgage interest deduction which is almost entirely captured by wealthy homeowners and financial institutions. It also definitely pushes up housing prices. If the author of this post had any knowledge of the housing market they would have brought this up.

fanzhang 9y ago
It sounds like you have an affirmative theory of what the housing shortage is caused by. If so why not share it?
- Areading314 9y ago
  As with most shortages the issues are related to supply and demand of (desirable) housing: Supply side: * Zoning restrictions. Many cities are slow to up-zone because their voters enjoy the high prices (nimbyism). * Lack of, or insufficient infrastructure limiting size of desirable areas. * Generally high crime rates in urban areas, due to underfunded police departments and public services, also limits size of desirable areas * Poor education opportunities also contributes to the limited amount of desirable housing, leading to extremes in home values Demand side: * US is the worlds #1 tax haven. Foreign investors buy US real estate as a means of wealth storage and speculation, which increases demand. * Mortgage interest tax deductions for homeowners are essentially a wealth transfer from taxpayers to banks and homeowners. * Artificially low interest rates greatly increase the amount of capital chasing homes. For example a $2000/mo mortgage at 4% finances $420k, but at 6% only finances $333k. (People buying homes right now should think about the implications of this). * Irrational societal obsession with homeownership. * Historical trend of price appreciation has fostered a false impression of home ownership being a good investment, despite the great risks and expenses involved.
  - branchless 9y ago
    This is a way more sane post. Also I'd say coming off the gold standard lead to utterly unconstrained fiat issuance.
  - sokoloff 9y ago
    > Mortgage interest tax deductions for homeowners are essentially a wealth transfer from taxpayers to banks and homeowners. Are corporate loan interest payment deductions also a transfer from taxpayers to banks and companies? Do you propose disallowing that as well? If you don't, you place corporate landlords at a distinct advantage over individual homeowner consumers. If you do propose eliminating corporate interest deduction, that has huge implications on many industries where borrowing is commonplace (and arguably necessary to start a new venture).
    - pjc50 9y ago
      How about the other way round: allow individuals to deduct every piece of interest from tax?
Consultant32452 9y ago
Income inequality is exacerbated by low income housing programs. If wages in NYC are so low that people can't afford to live there, then those people should leave. If we must have a government program, then let's create one that helps people relocate to greener pastures. By decreasing labor supply, wages will rise until incomes and housing prices are in parity. Low income housing programs do the opposite, they artificially increase the labor pool of people who can accept lower wages which of course applies downward pressure on wages. >mortgage interest deduction I agree we should get rid of that.
- door 9y ago
  NYC should not be an enclave for the rich. It should be affordable and accessible to everyone. I don't care about the whims of the market, I believe strongly in that principle, as do many new yorkers.
- pjc50 9y ago
  "Remove all the poor people" is a policy that's been tried before with considerable social costs; it breaks up communities and tends to move people to places that are cheaper because they are worse. The city is the greener pasture - that's where the jobs are. Low income housing does tend to act as a subsidy for landlords and low pay employers. Perhaps we could shortcut the misery of a whole bunch of people having to move and just raise wages directly, e.g. via a rise in the minimum wage? Tying minimum wage to some function of house price and interest rates would be amazing.
  - cdoxsey 9y ago
    A minimum wage is not direct. It's payed via an employer who also has the option of choosing not to hire someone or paying under the table. The minimum wage is always 0, so this policy will likely lead to more misery.
    - pjc50 9y ago
      > choosing not to hire someone .. which is also an option in the "drive out the poor people" scenario, no? Also, have we given up on the idea of making businesses try to obey the law?
Alex3917 9y ago
> Whoever posted this should be ashamed of themselves. When reading Philip's posts, keep in mind that he's probably 10x smarter than you.
- Areading314 9y ago
  I looked up who he is. You can be smart and ignorant at the same time, something I see all the time in tech.
  - c0nducktr 9y ago
    Smart and malicious is always an option too.
kelukelugames 9y ago
Harvard Business Review is almost as bad as Buzzfeed. I guess everyone need to compete for clicks.
- sokoloff 9y ago
  This is not an HBR article. It's on a Wordpress site open to anyone with a harvard.edu, radcliffe.edu, or hbs.edu email address.
pjc50 9y ago
Yes, he's glibly wrong about a lot of things. "Can we blame rich people stealing all of society’s wealth? Again, wealth inequality was very high 100 years ago. In any case, a rich person may cause us to become sick with envy but he or she doesn’t usually occupy 50 apartments at a time. So it doesn’t make sense to blame rich people for reducing the housing supply, does it?" Actually, yes. This is certainly a problem in London, rich people buying houses that they remove from supply but then don't occupy. Everything from empty mansions: https://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead https://www.theguardian.com/society/2014/jan/31/inside-londo... to empty luxury flats https://www.theguardian.com/money/2013/sep/27/one-hyde-park-sold-but-unoccupied https://www.theguardian.com/money/2013/sep/27/one-hyde-park-... to empty flats built by evicting the previous occupants: https://www.vice.com/en_uk/article/qkq4bx/every-flat-in-a-new-south-london-development-has-been-sold-to-foreign-investors https://www.vice.com/en_uk/article/qkq4bx/every-flat-in-a-ne... "Not only are all of the buyers of the new South Gardens foreign investors; from the 51 bought so far, many appear to be offshore – untraceable and untaxable. Every single one of the 51 purchases made is listed as "care of 2 Tower Street, WC2H 9NP". Helpfully, that's Riseam Sharples' office address."
krallja 9y ago
Philip Greenspun is one of the original webloggers -- http://philip.greenspun.com/bboard/q-and-a-fetch-msg?msg_id=000tf6 http://philip.greenspun.com/bboard/q-and-a-fetch-msg?msg_id=... Not to imply anything about the quality of the article; I just think it's fun to make historical connections to our Internet elders.

fanzhang 9y ago

It sounds like you have an affirmative theory of what the housing shortage is caused by. If so why not share it?

Areading314 9y ago
As with most shortages the issues are related to supply and demand of (desirable) housing: Supply side: * Zoning restrictions. Many cities are slow to up-zone because their voters enjoy the high prices (nimbyism). * Lack of, or insufficient infrastructure limiting size of desirable areas. * Generally high crime rates in urban areas, due to underfunded police departments and public services, also limits size of desirable areas * Poor education opportunities also contributes to the limited amount of desirable housing, leading to extremes in home values Demand side: * US is the worlds #1 tax haven. Foreign investors buy US real estate as a means of wealth storage and speculation, which increases demand. * Mortgage interest tax deductions for homeowners are essentially a wealth transfer from taxpayers to banks and homeowners. * Artificially low interest rates greatly increase the amount of capital chasing homes. For example a $2000/mo mortgage at 4% finances $420k, but at 6% only finances $333k. (People buying homes right now should think about the implications of this). * Irrational societal obsession with homeownership. * Historical trend of price appreciation has fostered a false impression of home ownership being a good investment, despite the great risks and expenses involved.
- branchless 9y ago
  This is a way more sane post. Also I'd say coming off the gold standard lead to utterly unconstrained fiat issuance.
- sokoloff 9y ago
  > Mortgage interest tax deductions for homeowners are essentially a wealth transfer from taxpayers to banks and homeowners. Are corporate loan interest payment deductions also a transfer from taxpayers to banks and companies? Do you propose disallowing that as well? If you don't, you place corporate landlords at a distinct advantage over individual homeowner consumers. If you do propose eliminating corporate interest deduction, that has huge implications on many industries where borrowing is commonplace (and arguably necessary to start a new venture).
  - pjc50 9y ago
    How about the other way round: allow individuals to deduct every piece of interest from tax?

Consultant32452 9y ago

Income inequality is exacerbated by low income housing programs. If wages in NYC are so low that people can't afford to live there, then those people should leave. If we must have a government program, then let's create one that helps people relocate to greener pastures. By decreasing labor supply, wages will rise until incomes and housing prices are in parity. Low income housing programs do the opposite, they artificially increase the labor pool of people who can accept lower wages which of course applies downward pressure on wages. >mortgage interest deduction I agree we should get rid of that.

door 9y ago
NYC should not be an enclave for the rich. It should be affordable and accessible to everyone. I don't care about the whims of the market, I believe strongly in that principle, as do many new yorkers.
pjc50 9y ago
"Remove all the poor people" is a policy that's been tried before with considerable social costs; it breaks up communities and tends to move people to places that are cheaper because they are worse. The city is the greener pasture - that's where the jobs are. Low income housing does tend to act as a subsidy for landlords and low pay employers. Perhaps we could shortcut the misery of a whole bunch of people having to move and just raise wages directly, e.g. via a rise in the minimum wage? Tying minimum wage to some function of house price and interest rates would be amazing.
- cdoxsey 9y ago
  A minimum wage is not direct. It's payed via an employer who also has the option of choosing not to hire someone or paying under the table. The minimum wage is always 0, so this policy will likely lead to more misery.
  - pjc50 9y ago
    > choosing not to hire someone .. which is also an option in the "drive out the poor people" scenario, no? Also, have we given up on the idea of making businesses try to obey the law?

Alex3917 9y ago

> Whoever posted this should be ashamed of themselves. When reading Philip's posts, keep in mind that he's probably 10x smarter than you.

Areading314 9y ago
I looked up who he is. You can be smart and ignorant at the same time, something I see all the time in tech.
- c0nducktr 9y ago
  Smart and malicious is always an option too.

kelukelugames 9y ago

Harvard Business Review is almost as bad as Buzzfeed. I guess everyone need to compete for clicks.

sokoloff 9y ago
This is not an HBR article. It's on a Wordpress site open to anyone with a harvard.edu, radcliffe.edu, or hbs.edu email address.

pjc50 9y ago

Yes, he's glibly wrong about a lot of things. "Can we blame rich people stealing all of society’s wealth? Again, wealth inequality was very high 100 years ago. In any case, a rich person may cause us to become sick with envy but he or she doesn’t usually occupy 50 apartments at a time. So it doesn’t make sense to blame rich people for reducing the housing supply, does it?" Actually, yes. This is certainly a problem in London, rich people buying houses that they remove from supply but then don't occupy. Everything from empty mansions: https://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead https://www.theguardian.com/society/2014/jan/31/inside-londo... to empty luxury flats https://www.theguardian.com/money/2013/sep/27/one-hyde-park-sold-but-unoccupied https://www.theguardian.com/money/2013/sep/27/one-hyde-park-... to empty flats built by evicting the previous occupants: https://www.vice.com/en_uk/article/qkq4bx/every-flat-in-a-new-south-london-development-has-been-sold-to-foreign-investors https://www.vice.com/en_uk/article/qkq4bx/every-flat-in-a-ne... "Not only are all of the buyers of the new South Gardens foreign investors; from the 51 bought so far, many appear to be offshore – untraceable and untaxable. Every single one of the 51 purchases made is listed as "care of 2 Tower Street, WC2H 9NP". Helpfully, that's Riseam Sharples' office address."

krallja 9y ago

Philip Greenspun is one of the original webloggers -- http://philip.greenspun.com/bboard/q-and-a-fetch-msg?msg_id=000tf6 http://philip.greenspun.com/bboard/q-and-a-fetch-msg?msg_id=... Not to imply anything about the quality of the article; I just think it's fun to make historical connections to our Internet elders.