6 ms·

People were (and many still are) convinced that if black people move in next door, that the value of their house would fall. So they created policies, and acte

by davidw 9y ago

People were (and many still are) convinced that if black people move in next door, that the value of their house would fall. So they created policies, and acted, both formally and informally, to prevent that. These days most people regard that as horrible and in no way justified. Maybe one day we'll view exclusionary zoning in the same way. Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does: at a certain point, people become less enthusiastic about investing in new housing, so it's a much smoother curve that, realistically, is probably not going to crash prices. In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value.

kbenson 9y ago
> ... These days most people regard that as horrible and in no way justified. Sure, but does that mean the family of five that was finally able to afford a home last year after scraping for years should pay for that? They could even be in the same demographic as the original victims of those exclusionary policies. > Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does I'm not so sure, depending on how it's handled. Housing is a free market, and as such it's subject not just to supply and demand, but people's expectations of supply and demand. If I just bought a house and policies were announced that I thought might not just stagnate my house value, but actually reduce it over time, inflation-be-damned, I would be mightily tempted to sell if I had options. Get enough people doing that, and you might have a run-away market drop. The people who mainly benefit from that are those that are poised to take advantage of the situation on short notice (those with money available already and can take advantage of the eventual rebound). There are obviously ways you could crater the housing market in an area on purpose through policy, so it's not out of the question it could happen accidentally. I'm mainly arguing for people to see both sides and try to prevent that, and soften any blow and be prepared to counter a market that looks to be behaving irrationally. > In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value. I agree. I just think it's a complex situation that requires nuanced policy and constant attention, and isn't as simple as "build more houses" implies.
- davidw 9y ago
  > Housing is a free market I would encourage you to attend some planning hearings, city council meetings, and so on before asserting that. Because it really, really isn't. Look at a zoning map of your city.
  - kbenson 9y ago
    I mean the buying and selling of existing houses, not the building of new houses. Those comments are primarily with respect to what could happen to the housing market for existing homes in a city that implements large changes housing policy.
    - kjksf 9y ago
      If you believed in principles of free market you wouldn't start by explaining how bad it is for person X that their investment dropped in value. They made a bet, they lost it. Someone else made a different bet and won. That's how free market works. People are free to make bets and they loose or win based on how right they were. Trying to enact policies that mess with market forces because you want to protect that person who lost the bet is the opposite of free market and also a bad economic policy. Economists estimate that lack of housing in California is costing us all a lot. From https://www.wsj.com/articles/californias-housing-costs-hurt-economy-increase-poverty-report-finds-1426623141 https://www.wsj.com/articles/californias-housing-costs-hurt-...: > California’s high housing costs are crimping economic productivity, increasing poverty rates, lowering homeownership, increasing crowding and lengthening commute time This is the cost of protecting the investment of your hypothetical family not paying "unfair" prices. Not to mention that your hypothetical scenario wouldn't happen if we had reasonable zoning policies to begin with. The only reason price of a house could significantly go down due to new construction is that we allowed to prices to go up 10x in the past. If we were building enough to meet the demand, everyone would be paying roughly the same price and price increases would roughly match inflation, not exceed it by miles.
      - davidw 9y ago

by davidw 9y ago

kbenson 9y ago

> ... These days most people regard that as horrible and in no way justified. Sure, but does that mean the family of five that was finally able to afford a home last year after scraping for years should pay for that? They could even be in the same demographic as the original victims of those exclusionary policies. > Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does I'm not so sure, depending on how it's handled. Housing is a free market, and as such it's subject not just to supply and demand, but people's expectations of supply and demand. If I just bought a house and policies were announced that I thought might not just stagnate my house value, but actually reduce it over time, inflation-be-damned, I would be mightily tempted to sell if I had options. Get enough people doing that, and you might have a run-away market drop. The people who mainly benefit from that are those that are poised to take advantage of the situation on short notice (those with money available already and can take advantage of the eventual rebound). There are obviously ways you could crater the housing market in an area on purpose through policy, so it's not out of the question it could happen accidentally. I'm mainly arguing for people to see both sides and try to prevent that, and soften any blow and be prepared to counter a market that looks to be behaving irrationally. > In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value. I agree. I just think it's a complex situation that requires nuanced policy and constant attention, and isn't as simple as "build more houses" implies.

davidw 9y ago
> Housing is a free market I would encourage you to attend some planning hearings, city council meetings, and so on before asserting that. Because it really, really isn't. Look at a zoning map of your city.
- kbenson 9y ago
  I mean the buying and selling of existing houses, not the building of new houses. Those comments are primarily with respect to what could happen to the housing market for existing homes in a city that implements large changes housing policy.
  - kjksf 9y ago
    If you believed in principles of free market you wouldn't start by explaining how bad it is for person X that their investment dropped in value. They made a bet, they lost it. Someone else made a different bet and won. That's how free market works. People are free to make bets and they loose or win based on how right they were. Trying to enact policies that mess with market forces because you want to protect that person who lost the bet is the opposite of free market and also a bad economic policy. Economists estimate that lack of housing in California is costing us all a lot. From https://www.wsj.com/articles/californias-housing-costs-hurt-economy-increase-poverty-report-finds-1426623141 https://www.wsj.com/articles/californias-housing-costs-hurt-...: > California’s high housing costs are crimping economic productivity, increasing poverty rates, lowering homeownership, increasing crowding and lengthening commute time This is the cost of protecting the investment of your hypothetical family not paying "unfair" prices. Not to mention that your hypothetical scenario wouldn't happen if we had reasonable zoning policies to begin with. The only reason price of a house could significantly go down due to new construction is that we allowed to prices to go up 10x in the past. If we were building enough to meet the demand, everyone would be paying roughly the same price and price increases would roughly match inflation, not exceed it by miles.
    - davidw 9y ago