5 ms·

It’s an interesting catch 22. The housing you make margins off are expensive housing in expensive locations. The reason to keep rents affordable is that it’s

It’s an interesting catch 22. The housing you make margins off are expensive housing in expensive locations. The reason to keep rents affordable is that it’s generally a good thing in terms of keeping gentrificarion and segregation in check. Cap on rent can’t be the only policy though. I see the exact same situation in Stockholm, and there’s a concensus that profit margins are not good enough. How to solve it? Either sprinkle lots of tax money in some shape or form or do a quatar fotball world cup kind of setup? I’m curious, as I see this situation all over, and frankly no one seems to offer a complete solution.

wongarsu 7y ago
If the city wants something the market can't provide the solution is to do it yourself. Berlin is partially doing that. The "Wohnungsbaugesellschaft Berlin-Mitte" is a housing association owned by the City of Berlin that builds and rents out apartments. They more or less act like other investors, just with more focus on social factors than on high profits.
- luckylion 7y ago
  > just with more focus on social factors than on high profits Which is basically a political issue, because they will say "some people are more equal than others". Personally, I prefer naked capitalism over this "you need to know somebody in the party to get a good flat"-stuff.
  - jordanbeiber 7y ago
    Isn't the black market that occurs a form of naked capitalism? Here in Stockholm a lot of the public good properties have been sold out which have left precious little for too many to contend. Prices of labour and land are so expensive that, allegedly, profit margins are not good enough. The "know somebody" bit goes for plain hard capitalism as well, but is less in effect in a society that actually focus on the social side of things. IMO.
    - luckylion 7y ago
      I don't know, I've always liked the "if you have money, you can buy it" part of capitalism. You can make money, but you can't change the fundamentals. In a racist white society, having money will not help you if you're black. In a politicized society, having money will not help you if you don't have the right worldview, or were born into the wrong family. In my home town, having money will not help you get into a (private) housing cooperative if you don't match the social criteria. What you describe in Stockholm has happened around here too. Still, I prefer it: this way I do have a chance to get a (nice) apartment, even though I was born to a family where nobody was a member of the local ruling party. Sure, I may not get the great flat at the greatest location for a third the market price, but at least I can get one, even if it's more expensive. I'm happy to pay a higher price to be able to actually buy something.
      - jordanbeiber 7y ago
        I’m just saying that with capitalism comes politics. Always have, always will. To believe otherwise is a bit naive. Politics can be used to even things out as was done over here from the turn of the century up until, I’d say, 70-80s. The last few decades have been way to market/neoliberal policy wise, and in many ways we’re seeing the effect today. I just think you’re a bit binary here. I come from a struggling family but have managed to buy a place for my own family in a really attractive location. The problem is that thanks to virtually no regulations on the banks for lending the whole market is inflated, both for property and land. It’s simply not a question about supply and demand - it’s “how much money can I borrow”. A study showed that roughly 25% of people owning housing i Stockholm cannot manage a lowish “normal” interest rate. Banks love printing money for free! Capitalism only works when properly regulated by sane policy.
        luckylion 7y ago
        > I’m just saying that with capitalism comes politics. I don't see that. I'm not with the mainstream politics at all in my country, yet I face very little inconveniences precisely because money determines whether I can buy a phone, not politics. We might talk about different kind of politics. You want regulation (for example on predatory lending), and I'm fine with that. I don't want "social criteria" (as in "what gender are you?", "what's your political world view?", "are you married?", "did you go to university?" etc) to determine whether I can rent an apartment. I prefer the worst neoliberal unregulated free market system to that, simply because in that terrible market I still have a chance if I'm not part of the "more equal" group. In the other I don't, no matter how hard I work. It's like a feudal society where your class if fixed at birth. I prefer pure capitalism over that. That's not to say that I prefer pure capitalism over everything, I just believe that even in its shittiest form, it's still more fair than a thoroughly politicized system. Fortunately, we still have a lot of market economy, so we're not anywhere near a place where only politics matter, but whenever somebody asks for "social factors" to play a role in deciding who will get a flat (or a job, or a car, or food), I can't help but see the writing on the wall.
  - anoncake 7y ago
    > some people are more equal than others is what you get in naked or even non-naked capitalism. > you need to know somebody in the party to get a good flat The SED dictatorship has been abolished 30 years ago. We don't have much of a corruption problem.
    - luckylion 7y ago
      > > some people are more equal than others > is what you get in naked or even non-naked capitalism. Yeah, but naked capitalism is closer to meritocracy, albeit not nearly there. > The SED dictatorship has been abolished 30 years ago. We don't have much of a corruption problem. It's still there, just not to the same extent, and more subtle. The market economy helps because it provides mostly unbiased. You're not required to know people, but it still helps enormously if you do.
      - anoncake 7y ago
        > Yeah, but naked capitalism is closer to meritocracy, albeit not nearly there. But just as far from equality. > It's still there, just not to the same extent, and more subtle. "not much of a" > The market economy helps because it provides mostly unbiased. You're not required to know people, but it still helps enormously if you do. A market economy is by design biased towards wealthy people. A democratic state with rule of law is mostly unbiased.
zanny 7y ago
The solution is pretty basic and was proven to work for centuries before extreme zoning intervention by governments happened at the behest of property owners wanting their gentrification. To fund the program you institute luxury property taxes on units larger than what you want your average citizen to afford and actually property tax businesses (which many cities do not do, because they bribed companies to locate there with agreement they would have substantially reduced taxes). Both should be at progressive rates, the larger companies and homeowners paying more. In any city that has the modern housing price crisis in effect there is plenty of money floating around to pay this and would not "kill" the city to institute because demand is so high already. Then, with the revenue, you A) invest in public and modernized infrastructure and B) rezone for mixed use or simply dezone your city (the only real valid arguments for zoning nowadays are to avoid overburdening infrastructure and to maintain specific skylines, but policies that prevent vertically entirely are wholly draconian and cannot stand - there needs to be an avenue for vertical growth no matter what). The infrastructure is ridiculously expensive. Decomissioning streets to build functional bike and walkable space infrastructure, building a comprehensive subway / light rail / tram / trolly network, supporting comprehensive bus service are all major projects. Every city, though, needs to be doing all of these. Private car ownership has to trend towards 0 for anyone living in the city proper, and proper zoning and tax code should incentivize almost anyone within a substantial difference to move towards the city because its cheaper. Its cheaper to live in a 50 story condo building when you factor in all externalized costs - the lifetime of the building, the heating / cooling efficiency, the infrastructure requirements, the construction efficiency, the materials efficiency, the cost of public services to support the building, the access to productive labor and jobs local to the residence, the climate damaged caused by long commutes from suburbs, the environmental impact of sprawl, the maintenance on infrastructure to support it. People look at how 2500 condos might cost 100 million for the building alone and think that means its inefficient and too expensive... but in practice A) the costs are inflated due to regulatory impedance B) there isn't enough high density demand in most western countries to get economies of scale reducing prices of construction the way they are in Asia and C) even when the building is more expensive everything else is cheaper. Which probably comes back to the fundamental reason we are in this state in the first place. Externalities are not factored in. Environmental harm, infrastructure & services upkeep, human potential lost, etc all factor in to cost the modern sprawl low density lifestyle and our societies dearly. Cities are actively hurting their responsibility to grow to mitigate this damage, but its also on nations as a whole to stop subsidizing lifestyles that hurt the plant, nations, and people themselves. Cities don't have money to build because money is siphoned to maintain the status quo and that keeps this unnatural unsustainable relationship in place.
jotm 7y ago
Encourage people to buy land and build their own houses?

wongarsu 7y ago

If the city wants something the market can't provide the solution is to do it yourself. Berlin is partially doing that. The "Wohnungsbaugesellschaft Berlin-Mitte" is a housing association owned by the City of Berlin that builds and rents out apartments. They more or less act like other investors, just with more focus on social factors than on high profits.

luckylion 7y ago
> just with more focus on social factors than on high profits Which is basically a political issue, because they will say "some people are more equal than others". Personally, I prefer naked capitalism over this "you need to know somebody in the party to get a good flat"-stuff.
- jordanbeiber 7y ago
  Isn't the black market that occurs a form of naked capitalism? Here in Stockholm a lot of the public good properties have been sold out which have left precious little for too many to contend. Prices of labour and land are so expensive that, allegedly, profit margins are not good enough. The "know somebody" bit goes for plain hard capitalism as well, but is less in effect in a society that actually focus on the social side of things. IMO.
  - luckylion 7y ago
    I don't know, I've always liked the "if you have money, you can buy it" part of capitalism. You can make money, but you can't change the fundamentals. In a racist white society, having money will not help you if you're black. In a politicized society, having money will not help you if you don't have the right worldview, or were born into the wrong family. In my home town, having money will not help you get into a (private) housing cooperative if you don't match the social criteria. What you describe in Stockholm has happened around here too. Still, I prefer it: this way I do have a chance to get a (nice) apartment, even though I was born to a family where nobody was a member of the local ruling party. Sure, I may not get the great flat at the greatest location for a third the market price, but at least I can get one, even if it's more expensive. I'm happy to pay a higher price to be able to actually buy something.
    - jordanbeiber 7y ago
      I’m just saying that with capitalism comes politics. Always have, always will. To believe otherwise is a bit naive. Politics can be used to even things out as was done over here from the turn of the century up until, I’d say, 70-80s. The last few decades have been way to market/neoliberal policy wise, and in many ways we’re seeing the effect today. I just think you’re a bit binary here. I come from a struggling family but have managed to buy a place for my own family in a really attractive location. The problem is that thanks to virtually no regulations on the banks for lending the whole market is inflated, both for property and land. It’s simply not a question about supply and demand - it’s “how much money can I borrow”. A study showed that roughly 25% of people owning housing i Stockholm cannot manage a lowish “normal” interest rate. Banks love printing money for free! Capitalism only works when properly regulated by sane policy.
      - luckylion 7y ago
        > I’m just saying that with capitalism comes politics. I don't see that. I'm not with the mainstream politics at all in my country, yet I face very little inconveniences precisely because money determines whether I can buy a phone, not politics. We might talk about different kind of politics. You want regulation (for example on predatory lending), and I'm fine with that. I don't want "social criteria" (as in "what gender are you?", "what's your political world view?", "are you married?", "did you go to university?" etc) to determine whether I can rent an apartment. I prefer the worst neoliberal unregulated free market system to that, simply because in that terrible market I still have a chance if I'm not part of the "more equal" group. In the other I don't, no matter how hard I work. It's like a feudal society where your class if fixed at birth. I prefer pure capitalism over that. That's not to say that I prefer pure capitalism over everything, I just believe that even in its shittiest form, it's still more fair than a thoroughly politicized system. Fortunately, we still have a lot of market economy, so we're not anywhere near a place where only politics matter, but whenever somebody asks for "social factors" to play a role in deciding who will get a flat (or a job, or a car, or food), I can't help but see the writing on the wall.
- anoncake 7y ago
  > some people are more equal than others is what you get in naked or even non-naked capitalism. > you need to know somebody in the party to get a good flat The SED dictatorship has been abolished 30 years ago. We don't have much of a corruption problem.
  - luckylion 7y ago
    > > some people are more equal than others > is what you get in naked or even non-naked capitalism. Yeah, but naked capitalism is closer to meritocracy, albeit not nearly there. > The SED dictatorship has been abolished 30 years ago. We don't have much of a corruption problem. It's still there, just not to the same extent, and more subtle. The market economy helps because it provides mostly unbiased. You're not required to know people, but it still helps enormously if you do.
    - anoncake 7y ago
      > Yeah, but naked capitalism is closer to meritocracy, albeit not nearly there. But just as far from equality. > It's still there, just not to the same extent, and more subtle. "not much of a" > The market economy helps because it provides mostly unbiased. You're not required to know people, but it still helps enormously if you do. A market economy is by design biased towards wealthy people. A democratic state with rule of law is mostly unbiased.

zanny 7y ago

The solution is pretty basic and was proven to work for centuries before extreme zoning intervention by governments happened at the behest of property owners wanting their gentrification. To fund the program you institute luxury property taxes on units larger than what you want your average citizen to afford and actually property tax businesses (which many cities do not do, because they bribed companies to locate there with agreement they would have substantially reduced taxes). Both should be at progressive rates, the larger companies and homeowners paying more. In any city that has the modern housing price crisis in effect there is plenty of money floating around to pay this and would not "kill" the city to institute because demand is so high already. Then, with the revenue, you A) invest in public and modernized infrastructure and B) rezone for mixed use or simply dezone your city (the only real valid arguments for zoning nowadays are to avoid overburdening infrastructure and to maintain specific skylines, but policies that prevent vertically entirely are wholly draconian and cannot stand - there needs to be an avenue for vertical growth no matter what). The infrastructure is ridiculously expensive. Decomissioning streets to build functional bike and walkable space infrastructure, building a comprehensive subway / light rail / tram / trolly network, supporting comprehensive bus service are all major projects. Every city, though, needs to be doing all of these. Private car ownership has to trend towards 0 for anyone living in the city proper, and proper zoning and tax code should incentivize almost anyone within a substantial difference to move towards the city because its cheaper. Its cheaper to live in a 50 story condo building when you factor in all externalized costs - the lifetime of the building, the heating / cooling efficiency, the infrastructure requirements, the construction efficiency, the materials efficiency, the cost of public services to support the building, the access to productive labor and jobs local to the residence, the climate damaged caused by long commutes from suburbs, the environmental impact of sprawl, the maintenance on infrastructure to support it. People look at how 2500 condos might cost 100 million for the building alone and think that means its inefficient and too expensive... but in practice A) the costs are inflated due to regulatory impedance B) there isn't enough high density demand in most western countries to get economies of scale reducing prices of construction the way they are in Asia and C) even when the building is more expensive everything else is cheaper. Which probably comes back to the fundamental reason we are in this state in the first place. Externalities are not factored in. Environmental harm, infrastructure & services upkeep, human potential lost, etc all factor in to cost the modern sprawl low density lifestyle and our societies dearly. Cities are actively hurting their responsibility to grow to mitigate this damage, but its also on nations as a whole to stop subsidizing lifestyles that hurt the plant, nations, and people themselves. Cities don't have money to build because money is siphoned to maintain the status quo and that keeps this unnatural unsustainable relationship in place.

jotm 7y ago

Encourage people to buy land and build their own houses?