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The basis is that when people say "r >> g" they think "business owners and the stock market" rather than "the house my parents own", and they think about reform

by darawk 7y ago

The basis is that when people say "r >> g" they think "business owners and the stock market" rather than "the house my parents own", and they think about reforms to the business sector rather than reforms to the housing sector.

bildung 7y ago
It seems they would be more right than wrong, though, as business owners indeed also own the majority of US real estate, with about $30 trillion business-owned vs. $19 trillion privately owned: * Residential real estate market size was $33 trillion in 2018, of which about 80 million units are privately owned and 60 million units are not. * Commercial real estate market size (Office buildings etc.) was about $15 trillion.
- Mirioron 7y ago
  Isn't that an unfair comparison? Businesses usually make property more valuable, because businesses provide jobs and people want to live somewhere near where they work. Businesses also congregate in the most expensive areas, because they're the only ones that can afford those prices, but people usually don't buy real estate in the most expensive areas purely as a real estate investment. How many city centres have property that sits empty? So I'm not sure that this is a good comparison.
  - AnthonyMouse 7y ago
    For one thing you're talking about two different businesses. It's very common for companies to rent the space they're in. Then the commercial tenant is providing the value you're referring to but the landlord is the one who receives the increase in property values. But even regardless of that, it doesn't change the numbers. The majority of the increase in real estate prices goes to corporations rather than individuals. An explanation of why it happens doesn't change that it does.
    - Mirioron 7y ago
      But it matters in a comparison like this, because commercial real estate gets used to run businesses. Businesses, especially in high value real estate areas, tend to increase real estate prices even further by providing well-paying jobs and useful services. The comparison is like looking at a fireplace and then saying that it's warmer in the fireplace areas. We're talking about justifying action against businesses here. It matters where the value comes from.
- darawk 7y ago
  I'm not sure what your point is. Business ownership of real estate is irrelevant. The fundamental problem is the structure of the real estate market, not the competitive environment for business.

by darawk 7y ago

bildung 7y ago

It seems they would be more right than wrong, though, as business owners indeed also own the majority of US real estate, with about $30 trillion business-owned vs. $19 trillion privately owned: * Residential real estate market size was $33 trillion in 2018, of which about 80 million units are privately owned and 60 million units are not. * Commercial real estate market size (Office buildings etc.) was about $15 trillion.

Mirioron 7y ago
Isn't that an unfair comparison? Businesses usually make property more valuable, because businesses provide jobs and people want to live somewhere near where they work. Businesses also congregate in the most expensive areas, because they're the only ones that can afford those prices, but people usually don't buy real estate in the most expensive areas purely as a real estate investment. How many city centres have property that sits empty? So I'm not sure that this is a good comparison.
- AnthonyMouse 7y ago
  For one thing you're talking about two different businesses. It's very common for companies to rent the space they're in. Then the commercial tenant is providing the value you're referring to but the landlord is the one who receives the increase in property values. But even regardless of that, it doesn't change the numbers. The majority of the increase in real estate prices goes to corporations rather than individuals. An explanation of why it happens doesn't change that it does.
  - Mirioron 7y ago
    But it matters in a comparison like this, because commercial real estate gets used to run businesses. Businesses, especially in high value real estate areas, tend to increase real estate prices even further by providing well-paying jobs and useful services. The comparison is like looking at a fireplace and then saying that it's warmer in the fireplace areas. We're talking about justifying action against businesses here. It matters where the value comes from.
darawk 7y ago
I'm not sure what your point is. Business ownership of real estate is irrelevant. The fundamental problem is the structure of the real estate market, not the competitive environment for business.