3 ms·

> Private developers do the work, for profit, most often for investment groups. If it doesn't 'pencil out', nobody will build it This is a huge reason why the

> Private developers do the work, for profit, most often for investment groups. If it doesn't 'pencil out', nobody will build it This is a huge reason why the notion that our housing affordability problems can be boiled down to "simple" issues of "supply and demand" is false. Developers don't over build supply. Why would they? There's no economic reason to. Whenever any sort of overbuilding occurs which would oversupply , it is always by some accident (eg. a pandemic), and the taps are turned off immediately. We see an example of this in nearby Vancouver BC, where foreign buyer taxes and speculation taxes have cooled demand for expensive concrete condo towers which were often marketed in Asia. Suddenly these products are no longer being produced and housing developers have shifted to other things.

imtringued 6y ago
I hope you see the problem in your logic. You've just said developers only build when people want more housing when stakkur claims that people only want housing because developers have built more housing. The conflict is that you two are saying the laws of supply and demand don't work because of two mutually incompatible reasons. Those two things can't be true at the same time. So either of you must be wrong. And it's pretty obvious that your comment is the only one that doesn't violate basic logic. However, just because you're not wrong doesn't mean you're capturing the whole truth. >This is a huge reason why the notion that our housing affordability problems can be boiled down to "simple" issues of "supply and demand" is false. >Developers don't over build supply. Why would they? There's no economic reason to. Whenever any sort of overbuilding occurs which would oversupply , it is always by some accident (eg. a pandemic), and the taps are turned off immediately. Building exactly as much housing as needed would still result in lower prices. When you have 10 houses and 20 people only the 10 richest people get a house because they are bidding up the prices. If there are 20 houses and 20 people then everyone gets a house. If there are 25 houses and 20 people then landlords will compete with each other and try to lower the rent they charge to fill their units. Villages with 1€ houses exist for a reason. Do you know what the worst mistake in housing discussions is that everyone tends to make? Everyone talks about the price because that is what people can see and what people are familiar with. No one talks about housing in absolute numbers. Nobody thinks about the fact that one more house means one more person. Everyone is thinking about how an "evil" house is going to raise housing prices even further because people are only familiar with expensive housing because they made it illegal for inexpensive housing to exist, when policies like this reform are intended to allow inexpensive housing.
- Tiktaalik 6y ago
  > Those two things can't be true at the same time. So either of you must be wrong Stakkur is wrong :) > Building exactly as much housing as needed would still result in lower prices Yeah don't get me wrong here. Cities still need to allow developers to build. Not building is not the solution and only limits supply and results in price pressure on the poor as we've seen in SF, as when a rental turns over a landlord jacks up the price. My point is simply that private developer is not a panacea since eventually the profit motive stops them from building. For prices to really fall you need a developer to build an over supply of housing, which means continuing to build in an environment where rental prices are falling and building more housing is worsening as an investment idea. You need developers without a profit motive. This means that you need to have a government agency that is constantly building housing to meet a set vacancy target, regardless of whether or not it would be profitable to do so.

imtringued 6y ago

I hope you see the problem in your logic. You've just said developers only build when people want more housing when stakkur claims that people only want housing because developers have built more housing. The conflict is that you two are saying the laws of supply and demand don't work because of two mutually incompatible reasons. Those two things can't be true at the same time. So either of you must be wrong. And it's pretty obvious that your comment is the only one that doesn't violate basic logic. However, just because you're not wrong doesn't mean you're capturing the whole truth. >This is a huge reason why the notion that our housing affordability problems can be boiled down to "simple" issues of "supply and demand" is false. >Developers don't over build supply. Why would they? There's no economic reason to. Whenever any sort of overbuilding occurs which would oversupply , it is always by some accident (eg. a pandemic), and the taps are turned off immediately. Building exactly as much housing as needed would still result in lower prices. When you have 10 houses and 20 people only the 10 richest people get a house because they are bidding up the prices. If there are 20 houses and 20 people then everyone gets a house. If there are 25 houses and 20 people then landlords will compete with each other and try to lower the rent they charge to fill their units. Villages with 1€ houses exist for a reason. Do you know what the worst mistake in housing discussions is that everyone tends to make? Everyone talks about the price because that is what people can see and what people are familiar with. No one talks about housing in absolute numbers. Nobody thinks about the fact that one more house means one more person. Everyone is thinking about how an "evil" house is going to raise housing prices even further because people are only familiar with expensive housing because they made it illegal for inexpensive housing to exist, when policies like this reform are intended to allow inexpensive housing.

Tiktaalik 6y ago
> Those two things can't be true at the same time. So either of you must be wrong Stakkur is wrong :) > Building exactly as much housing as needed would still result in lower prices Yeah don't get me wrong here. Cities still need to allow developers to build. Not building is not the solution and only limits supply and results in price pressure on the poor as we've seen in SF, as when a rental turns over a landlord jacks up the price. My point is simply that private developer is not a panacea since eventually the profit motive stops them from building. For prices to really fall you need a developer to build an over supply of housing, which means continuing to build in an environment where rental prices are falling and building more housing is worsening as an investment idea. You need developers without a profit motive. This means that you need to have a government agency that is constantly building housing to meet a set vacancy target, regardless of whether or not it would be profitable to do so.