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Having a place to live is not a luxury, it is a basic necessity, so it warrants to take a closer look at the reasoning. > And that’s a good thing too—you’re in

by madez 7y ago

Having a place to live is not a luxury, it is a basic necessity, so it warrants to take a closer look at the reasoning. > And that’s a good thing too—you’re increasing the tax base of your city. To say something is good because it gives more money is the capitalists fallacy. There are many examples where this capitalists fallacy leads to situations that benefit a few and damage the vast majority, and sometimes even preventing technological advancements via political regulation or market domination held in place by self-preserving wealth. Let me give an example. The national or even supranational electrical grids are essential to industrial economies. It's continued functioning is very important, so it is considered a stable financial investment to buy a share of it. The electrical grid is used to transport electrical energy from the producers to the consumers, which often are very far from each other. Selling and buying electrical energy directly in this market is not possible for households. The energy amounts traded there are vast compared to what houses need. Modern decentralized energy production and storage, like solar panels and batteries in homes can provide storage and production capacities that are relevant to the quantities in the electric grid. However, if houses were allowed to band together and act together as a distributed or federated net of producers and storage units, the long distance transport of electrical energy via the grid would be less important for the economy, and thus its stability is less important, and so it's worth as an investment sinks. Depending on how much value the grid was assigned before, this devaluation might "destroy" a lot of wealth, and therefore be bad according to the capitalists fallacy. Yet, the society gains from this technological advancement. Even more problematic is that wealth is correlated with political power, so those that have invested in the grid can manipulate society to prevent this technological advancement. I can give more examples, like externalizing costs on environment and society, articifial lock-ins without right to repair, and more. Capitalism is a tried and true heuristical approach to achieve economic and technological advancements, but directly working with the unquestioned assumption "more money" => "good" is worse than myopic, especially when it comes to basic needs such as food, drinking water, housing, and basic medicine.

AnthonyMouse 7y ago
The premise of your argument is that the new value here is purely a difference in monetary value without any underlying real value, but that isn't the case. The tax base is larger because the real value in your city has increased. It's not just numbers on some investor's balance sheet, there is physically more housing there being put to productive use and providing real value to real people. The point that the government then gets their cut of the value created is often specifically noted because it's typically the government officials who you have to convince to enact the policy you support.
- deleted 7y ago
  [deleted]
- madez 7y ago
  My argument was solely that of the capitalists fallacy, i.e. that monetary value and desirability are not always identical. Each case needs its own consideration. However, there are streets in London of very highly priced completed uninhabited houses, which serve as speculation objects and money parking vehicles. There are many examples in Germany were newly constructed housing lead to a increase in rents of already existing housing. Where is the value for the very real people who must leave the city because they can't afford the rising rents, even though they have their work there and their children go to school there? Housing is one of the examples where a rise in monetary value for the same product has immediate negative sides, and a house in one place and an otherwise identical house in another place are not the same product. I see a sometimes more or less pronounced conflict between the right of having housing and the right of owning property. I'm not arguing against building more houses, if that is the doubt. I just don't think that housing should just be unregulated so the market can have its go at it as if that were the god-given solution to every problem.
  - AnthonyMouse 7y ago
    > However, there are streets in London of very highly priced completed uninhabited houses, which serve as speculation objects and money parking vehicles. Inhibiting this is another benefit of building even more housing. Speculation only occurs when people expect housing costs to increase or at least stay the same. If you build enough to actually start to lower prices then the speculators will try to get out before they lose their money and thereby put even more housing on the market. > There are many examples in Germany were newly constructed housing lead to a increase in rents of already existing housing. This can happen when the shortage is so bad that it's actually harming quality of life in the city, e.g. by making local traffic worse because people who want to be living in the city have to commute in instead. As you start to relieve the shortage you start to address those problems, which improves quality of life in the city (good), but that makes housing there more valuable and makes people willing to pay more of a premium for it, which increases demand. That isn't actually a problem -- the demand isn't infinite and improving quality of life is a gain -- it just means you still aren't building enough housing to satisfy the pent up demand. > Where is the value for the very real people who must leave the city because they can't afford the rising rents, even though they have their work there and their children go to school there? This is one of the situations where you're almost out of water but the middle ground is a desert. If you don't build more housing, the status quo is untenable. If you only build a little bit it can even get worse. To actually fix it you need to build a lot. Not an infinite amount, not an impossible amount, but quite a large amount. And the status quo if you do nothing is that you die a slow death. > I just don't think that housing should just be unregulated so the market can have its go at it as if that were the god-given solution to every problem. Government: <causes problem by imposing unnecessary rules> Government: We should address this problem by imposing some additional rules. ... There are things markets are bad at. Matching supply with demand is not one of those things.

by madez 7y ago

AnthonyMouse 7y ago

The premise of your argument is that the new value here is purely a difference in monetary value without any underlying real value, but that isn't the case. The tax base is larger because the real value in your city has increased. It's not just numbers on some investor's balance sheet, there is physically more housing there being put to productive use and providing real value to real people. The point that the government then gets their cut of the value created is often specifically noted because it's typically the government officials who you have to convince to enact the policy you support.

deleted 7y ago
[deleted]
madez 7y ago
My argument was solely that of the capitalists fallacy, i.e. that monetary value and desirability are not always identical. Each case needs its own consideration. However, there are streets in London of very highly priced completed uninhabited houses, which serve as speculation objects and money parking vehicles. There are many examples in Germany were newly constructed housing lead to a increase in rents of already existing housing. Where is the value for the very real people who must leave the city because they can't afford the rising rents, even though they have their work there and their children go to school there? Housing is one of the examples where a rise in monetary value for the same product has immediate negative sides, and a house in one place and an otherwise identical house in another place are not the same product. I see a sometimes more or less pronounced conflict between the right of having housing and the right of owning property. I'm not arguing against building more houses, if that is the doubt. I just don't think that housing should just be unregulated so the market can have its go at it as if that were the god-given solution to every problem.
- AnthonyMouse 7y ago
  > However, there are streets in London of very highly priced completed uninhabited houses, which serve as speculation objects and money parking vehicles. Inhibiting this is another benefit of building even more housing. Speculation only occurs when people expect housing costs to increase or at least stay the same. If you build enough to actually start to lower prices then the speculators will try to get out before they lose their money and thereby put even more housing on the market. > There are many examples in Germany were newly constructed housing lead to a increase in rents of already existing housing. This can happen when the shortage is so bad that it's actually harming quality of life in the city, e.g. by making local traffic worse because people who want to be living in the city have to commute in instead. As you start to relieve the shortage you start to address those problems, which improves quality of life in the city (good), but that makes housing there more valuable and makes people willing to pay more of a premium for it, which increases demand. That isn't actually a problem -- the demand isn't infinite and improving quality of life is a gain -- it just means you still aren't building enough housing to satisfy the pent up demand. > Where is the value for the very real people who must leave the city because they can't afford the rising rents, even though they have their work there and their children go to school there? This is one of the situations where you're almost out of water but the middle ground is a desert. If you don't build more housing, the status quo is untenable. If you only build a little bit it can even get worse. To actually fix it you need to build a lot. Not an infinite amount, not an impossible amount, but quite a large amount. And the status quo if you do nothing is that you die a slow death. > I just don't think that housing should just be unregulated so the market can have its go at it as if that were the god-given solution to every problem. Government: <causes problem by imposing unnecessary rules> Government: We should address this problem by imposing some additional rules. ... There are things markets are bad at. Matching supply with demand is not one of those things.