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The goal is to build housing that is actually used as housing as opposed to a vehicle for speculation. Legislative policies determine the type and terms of the

The goal is to build housing that is actually used as housing as opposed to a vehicle for speculation. Legislative policies determine the type and terms of the "market economy" that is lived in. If today's luxury apartment had a decent probability of being tomorrow's affordable one it would not have demand. Unless of course one assumes that luxury buyers are seeking to lose money.

ultrarunner 7y ago
Brand new luxury housing stays brand new forever?
- jbay808 7y ago
  It becomes affordable after an extended period of its price decreasing, or appreciating slower than inflation... Which we're all waiting to see!
- bobthepanda 7y ago
  Well, how long is tomorrow? Housing that becomes affordable by the time I am dead is not really "affordable" housing for me.
  - Consultant32452 7y ago
    It becomes approximately fifo. Oldest or otherwise least desirable housing becomes affordable housing as demand is met with newer more desirable housing being built. But if you're never building new housing, nothing gets pushed out the bottom to become affordable.
    - eastWestMath 7y ago
      That would make sense if location didn’t matter and people couldn’t renovate buildings.
      - Consultant32452 7y ago
        That's just noise as long as construction keeps up with or outpaces demand. The problem is some cities have held back construction for decades, so it will take significant construction to get to the other side of the supply curve. As a thought experiment, what if you doubled the supply of housing units in Manhattan? Or 10x? 20x? I have a hard time believing housing prices would remain high.
  - closeparen 7y ago
    A market with more homes per housing seeker is more likely to contain one for you. As long as that ratio is less than one, some people are excluded. Price is what that looks like in a market. Under central planning it’s typically lotteries and waiting lists. Supply/demand balance in the region is much more important than the characteristics of any particular unit, and that’s what pro-growth activism is targeting.
  - BurningFrog 7y ago
    I hate to be the one to tell you, but it's not all about you.
- reaperducer 7y ago
  It can. There are millions of houses and condominiums across America that are worth more now than when they were built. Housing isn't like a car. It doesn't depreciate as soon as the first person moves in.
wtvanhest 7y ago
Speculators do lose money on average.
skookumchuck 7y ago
Speculation just means flipping it to someone who wants to live in it.
- erikpukinskis 7y ago
  It can also mean: - Holding an asset until users become more desperate - Taking an asset off the market in order to drive up the price of other assets in the category - Buying an asset to hold, if reliable bonds aren't available in your locale, or there are limits to what assets you can book locally Not to mention ulterior motives: - Money laundering - A vehicle for bribes Money is quite complicated actually.
  - skookumchuck 7y ago
    A dwelling has zero intrinsic value. Ultimately, it only has value if someone is living in it. Having real estate sit empty can only be a temporary affliction. Supply & demand - it's the law. --- Buying real estate to just hold is almost always a losing proposition because of taxes and the time value of money. It is not like a bond, because bonds have guaranteed payouts. Real estate fluctuates in value, quite a lot. It's very easy to lose pots of money in real estate. Thinking that users will become more desperate is hoping that the government will prevent supply from increasing, or that customers don't simply find other solutions. I suggest looking up what happened when the Hunt Brothers tried to corner the silver market by buying up the supply. Buying up your competition to drive up prices pretty much never works unless the government makes entry of competitors illegal or very hard.
    - sandworm101 7y ago
      >> Ultimately, it only has value if someone is living in it. I got kicked out of my unit vancouver unit (3500$/month) because my landlord wanted to sell. In Vancouver's market a unit with a renter is worth LESS than a vacant property. Clearing it out to repaint and upgrade a few faucets is worth more than the rent income. That's how twisted the market has become. Professional landlords like paying tenants. Investors see them as potential problems, irritants and impediments to redevelopment or construction.
CryptoPunk 7y ago
>>The goal is to build housing that is actually used as housing as opposed to a vehicle for speculation. You're completely ignoring Econ 101. Housing that is used as housing and housing that is a vehicle for speculation are not mutually exclusive. Rental properties produce rental income and appreciation for their owners. More people looking to make money from real estate investments results in more capital investment going into expanding housing stock, and thus more rental supply, which drives down rental rates. The places which suffer the most from lack of affordable housing tend to be those that put in place the most impediments to profit-motivated investment. In other words, they ignore basic economics.
matchbok 7y ago
Agreed! We need laws to limit speculation.

ultrarunner 7y ago

Brand new luxury housing stays brand new forever?

jbay808 7y ago
It becomes affordable after an extended period of its price decreasing, or appreciating slower than inflation... Which we're all waiting to see!
bobthepanda 7y ago
Well, how long is tomorrow? Housing that becomes affordable by the time I am dead is not really "affordable" housing for me.
- Consultant32452 7y ago
  It becomes approximately fifo. Oldest or otherwise least desirable housing becomes affordable housing as demand is met with newer more desirable housing being built. But if you're never building new housing, nothing gets pushed out the bottom to become affordable.
  - eastWestMath 7y ago
    That would make sense if location didn’t matter and people couldn’t renovate buildings.
    - Consultant32452 7y ago
      That's just noise as long as construction keeps up with or outpaces demand. The problem is some cities have held back construction for decades, so it will take significant construction to get to the other side of the supply curve. As a thought experiment, what if you doubled the supply of housing units in Manhattan? Or 10x? 20x? I have a hard time believing housing prices would remain high.
- closeparen 7y ago
  A market with more homes per housing seeker is more likely to contain one for you. As long as that ratio is less than one, some people are excluded. Price is what that looks like in a market. Under central planning it’s typically lotteries and waiting lists. Supply/demand balance in the region is much more important than the characteristics of any particular unit, and that’s what pro-growth activism is targeting.
- BurningFrog 7y ago
  I hate to be the one to tell you, but it's not all about you.
reaperducer 7y ago
It can. There are millions of houses and condominiums across America that are worth more now than when they were built. Housing isn't like a car. It doesn't depreciate as soon as the first person moves in.

wtvanhest 7y ago

Speculators do lose money on average.

skookumchuck 7y ago

Speculation just means flipping it to someone who wants to live in it.

erikpukinskis 7y ago
It can also mean: - Holding an asset until users become more desperate - Taking an asset off the market in order to drive up the price of other assets in the category - Buying an asset to hold, if reliable bonds aren't available in your locale, or there are limits to what assets you can book locally Not to mention ulterior motives: - Money laundering - A vehicle for bribes Money is quite complicated actually.
- skookumchuck 7y ago
  A dwelling has zero intrinsic value. Ultimately, it only has value if someone is living in it. Having real estate sit empty can only be a temporary affliction. Supply & demand - it's the law. --- Buying real estate to just hold is almost always a losing proposition because of taxes and the time value of money. It is not like a bond, because bonds have guaranteed payouts. Real estate fluctuates in value, quite a lot. It's very easy to lose pots of money in real estate. Thinking that users will become more desperate is hoping that the government will prevent supply from increasing, or that customers don't simply find other solutions. I suggest looking up what happened when the Hunt Brothers tried to corner the silver market by buying up the supply. Buying up your competition to drive up prices pretty much never works unless the government makes entry of competitors illegal or very hard.
  - sandworm101 7y ago
    >> Ultimately, it only has value if someone is living in it. I got kicked out of my unit vancouver unit (3500$/month) because my landlord wanted to sell. In Vancouver's market a unit with a renter is worth LESS than a vacant property. Clearing it out to repaint and upgrade a few faucets is worth more than the rent income. That's how twisted the market has become. Professional landlords like paying tenants. Investors see them as potential problems, irritants and impediments to redevelopment or construction.

CryptoPunk 7y ago

>>The goal is to build housing that is actually used as housing as opposed to a vehicle for speculation. You're completely ignoring Econ 101. Housing that is used as housing and housing that is a vehicle for speculation are not mutually exclusive. Rental properties produce rental income and appreciation for their owners. More people looking to make money from real estate investments results in more capital investment going into expanding housing stock, and thus more rental supply, which drives down rental rates. The places which suffer the most from lack of affordable housing tend to be those that put in place the most impediments to profit-motivated investment. In other words, they ignore basic economics.

matchbok 7y ago

Agreed! We need laws to limit speculation.