8 ms·

When will people stop looking for scapegoats and start finding solutions? Needlessly high rents are an economics problem, and there's a lot of evidence that a c

When will people stop looking for scapegoats and start finding solutions? Needlessly high rents are an economics problem, and there's a lot of evidence that a combination of expanding housing supply and imposing a Land Value Tax would be an actual economic solution. You could have the most evil landlords, corrupt politicians, and aloof newcomers, and an economic solution would still fix the problem. Sometimes I wonder whether nobody cares to try and solve the problem, symbolic political wars being more urgent.

toomuchtodo 7y ago
Only allow individuals to own, not companies. If you want to let a unit, rent control with rate increases permitted annually that peg to inflation. Mandatory reporting and regulation through the local housing authority. That’s about all you can do if there’s no will to build but you don’t want corporate or private landlords gouging renters when demand outstrips supply. Life ain’t fair, everyone isn’t going to be able to live exactly where they want to. Scarcity leads to rationing. Disclaimer: Landlord who charges reasonable rents and tries to upzone where I operate.
- austhrow743 7y ago
  Individuals owning is what leads to political pressure to not build. Discouraging individual ownership of housing is the way to affordable rent. Not encouraging it.
- xvedejas 7y ago
  You're going to have major problems no matter what when there's demand and no political ability to build. A Land Value Tax can still in this situation put the landlord surplus back into city welfare/projects without raising rents.
  - toomuchtodo 7y ago
    The tax is unhelpful if it isn’t used to increase supply; it’s simply government rent seeking instead of landlord rent seeking.
- eesmith 7y ago
  So, no housing cooperatives? Who raises the capital if an entire apartment building needs renovation?
  - toomuchtodo 7y ago
    A housing coop would work, but you’d have to have rigorous governance and oversight.
scythe 7y ago
> You could have the most evil landlords, corrupt politicians, and aloof newcomers, and an economic solution would still fix the problem. I wish more people understood this. We can’t build a world for people better than us. We have to build it for ourselves.
eesmith 7y ago
To be fair, a political solution would also fix the problem. So would a religious solution. Any solution would fix the problem - because the word "solution" implies that the problem has been fixed. One problem is that people don't agree on what an economics-based solution should be. There have been any number of proposed economics-based solutions to other problems which have exacerbated the problem. Let's take "expanding housing supply". What kind of housing? From https://www.independent.co.uk/voices/housing-crisis-london-high-rise-luxury-developments-property-local-councils-austerity-a8618171.html https://www.independent.co.uk/voices/housing-crisis-london-h... : > More than 500 high-rise developments are in progress across the city of London. For a nation in the grip of a housing crisis, this should be good news. But in reality, this will bring hardly any benefit for many of those seeking a decent home. Almost none of the new homes are reserved for people with no or low incomes and, although house prices in London are falling – particularly at the upper end of the market – construction for wealthy people and international buyers continues. > Much of this building is actually intensifying the stress on the affordable housing market, as developers grab cheap land and resources that can be converted into expensive, for-profit housing construction. And for land-value tax, well, see the criticism at https://en.wikipedia.org/wiki/Land_value_tax#Practical_issues https://en.wikipedia.org/wiki/Land_value_tax#Practical_issue... : Several practical issues are involved in the implementation of a land value tax. > Most notably, it must be: - Calculated fairly and accurately; - High enough to raise sufficient revenue without causing land abandonment; - Billed to the correct person or business entity How is it calculated fairly in the face of "evil landlords [and] corrupt politicians"?
- xvedejas 7y ago
  As far as I can tell, it is a myth that building high-income-targeting housing does not help, in aggregate, low-income earners. See the concept of filtering, which is well-studied and sees two effects: 1. middle-high-income households moving into more expensive units, middle-low-income into the space left over from that move, etc. 2. the slower effect of declining values from aging housing stock. Okay, but you're still skeptical. I do honestly understand, you probably should be; I definitely don't regard myself as the best person to argue about these things. Knowing that, I should make a less ambitious case on this one and point out that "grabbing cheap land" for expensive construction is far better than letting it go empty and not contribute via taxes to the local government's coffers. And yes, I'm aware of the criticism of LVT. But isn't it obvious? If we have politicians who are virtuous enough to enact an LVT, I think we've tunneled into an alternate reality operated by saints, so that just about resolves itself.
creddit 7y ago
The scapegoating of NIMBY property owners is due to their use of political power to entrench their position, making economic solutions impossible/improbable. Can't do any expansion of housing supply or implement a land value tax when the political power is in the hands of the property owners.

toomuchtodo 7y ago

Only allow individuals to own, not companies. If you want to let a unit, rent control with rate increases permitted annually that peg to inflation. Mandatory reporting and regulation through the local housing authority. That’s about all you can do if there’s no will to build but you don’t want corporate or private landlords gouging renters when demand outstrips supply. Life ain’t fair, everyone isn’t going to be able to live exactly where they want to. Scarcity leads to rationing. Disclaimer: Landlord who charges reasonable rents and tries to upzone where I operate.

austhrow743 7y ago
Individuals owning is what leads to political pressure to not build. Discouraging individual ownership of housing is the way to affordable rent. Not encouraging it.
xvedejas 7y ago
You're going to have major problems no matter what when there's demand and no political ability to build. A Land Value Tax can still in this situation put the landlord surplus back into city welfare/projects without raising rents.
- toomuchtodo 7y ago
  The tax is unhelpful if it isn’t used to increase supply; it’s simply government rent seeking instead of landlord rent seeking.
eesmith 7y ago
So, no housing cooperatives? Who raises the capital if an entire apartment building needs renovation?
- toomuchtodo 7y ago
  A housing coop would work, but you’d have to have rigorous governance and oversight.

scythe 7y ago

> You could have the most evil landlords, corrupt politicians, and aloof newcomers, and an economic solution would still fix the problem. I wish more people understood this. We can’t build a world for people better than us. We have to build it for ourselves.

eesmith 7y ago

To be fair, a political solution would also fix the problem. So would a religious solution. Any solution would fix the problem - because the word "solution" implies that the problem has been fixed. One problem is that people don't agree on what an economics-based solution should be. There have been any number of proposed economics-based solutions to other problems which have exacerbated the problem. Let's take "expanding housing supply". What kind of housing? From https://www.independent.co.uk/voices/housing-crisis-london-high-rise-luxury-developments-property-local-councils-austerity-a8618171.html https://www.independent.co.uk/voices/housing-crisis-london-h... : > More than 500 high-rise developments are in progress across the city of London. For a nation in the grip of a housing crisis, this should be good news. But in reality, this will bring hardly any benefit for many of those seeking a decent home. Almost none of the new homes are reserved for people with no or low incomes and, although house prices in London are falling – particularly at the upper end of the market – construction for wealthy people and international buyers continues. > Much of this building is actually intensifying the stress on the affordable housing market, as developers grab cheap land and resources that can be converted into expensive, for-profit housing construction. And for land-value tax, well, see the criticism at https://en.wikipedia.org/wiki/Land_value_tax#Practical_issues https://en.wikipedia.org/wiki/Land_value_tax#Practical_issue... : Several practical issues are involved in the implementation of a land value tax. > Most notably, it must be: - Calculated fairly and accurately; - High enough to raise sufficient revenue without causing land abandonment; - Billed to the correct person or business entity How is it calculated fairly in the face of "evil landlords [and] corrupt politicians"?

xvedejas 7y ago
As far as I can tell, it is a myth that building high-income-targeting housing does not help, in aggregate, low-income earners. See the concept of filtering, which is well-studied and sees two effects: 1. middle-high-income households moving into more expensive units, middle-low-income into the space left over from that move, etc. 2. the slower effect of declining values from aging housing stock. Okay, but you're still skeptical. I do honestly understand, you probably should be; I definitely don't regard myself as the best person to argue about these things. Knowing that, I should make a less ambitious case on this one and point out that "grabbing cheap land" for expensive construction is far better than letting it go empty and not contribute via taxes to the local government's coffers. And yes, I'm aware of the criticism of LVT. But isn't it obvious? If we have politicians who are virtuous enough to enact an LVT, I think we've tunneled into an alternate reality operated by saints, so that just about resolves itself.

creddit 7y ago

The scapegoating of NIMBY property owners is due to their use of political power to entrench their position, making economic solutions impossible/improbable. Can't do any expansion of housing supply or implement a land value tax when the political power is in the hands of the property owners.