3 ms·
> Line up every person in the city in order of how much they're willing to spend on a home. Do the same with the homes available. Face the two lines across from
by dalore 7y ago
> Line up every person in the city in order of how much they're willing to spend on a home. Do the same with the homes available. Face the two lines across from each other. Everyone will buy a home nearby to what is across from them right now. Building a whole bunch more houses on the top end of the house scale doesn't leave those mansions empty, it just drives the mid-range homes further down the scale.
What if people buy multiple homes? Doesn't that mean people down the line get none? And then the people who buy multiple can rent seek or leave them empty. They just get more money to buy more houses. Doesn't always push the price of the mid range houses down.
- whatshisface 7y agoIf the multi-home buyer "rent-seeks" more homes than they otherwise would, tenants will be less desperate for housing and rent will fall. If the multi-home buyer buys the same number of houses as before, some of them will be the newly built houses... and prices will fall. The only way you could lose is if you built new houses that nobody would buy.
- xvedejas 7y agoDespite rent-seeking being undesirable for purposes of equality, more people rent-seeking over more houses does mean more competition in the rental market, and you'd expect rental prices to go down as a result. If you want to eliminate rent-seeking and have low housing costs, the only solution is an appropriate land value tax plus sufficient construction. You can't have affordability with insufficient construction, supply is a prerequisite.
- drak0n1c 7y agoIf an investor is planning to buy $1 million worth of housing, it is strictly better that he spends it on 2 small units in the midst of a luxury high-rise than spending it by snapping up 2 large traditional family homes. High density central housing reduces prices for the suburbs. That's why Tokyo housing is so cheap.