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The approach that seems to work is to give economically elastic things to the free market, and make economically inelastic things (housing, medical care, etc) a

The approach that seems to work is to give economically elastic things to the free market, and make economically inelastic things (housing, medical care, etc) a responsibility of the state. It's difficult to tell if this is the case as we can only look at macroeconomic effects in hindsight, and this approach would have many problems at scale, but this seems to be the most beneficial approach for society long term?

ethanbond 6y ago
You can get identical effects as Singapore’s state owned land without actually making it state owned/managed/priced by simply instituting a very high Land Value Tax. Rent collected for buildings/management/amenities goes to landlord, rent collected for the physical land upon which the building exists (which is valuable not because of the landlord) is recouped by the community as tax.
- thehappypm 6y ago
  Higher taxes also directly cause higher rents passed on to renters.
  - taktoa 6y ago
    That is uniquely not the case for LVT, because the supply of land is fixed, whereas the demand for housing is variable. EDIT: to be clear, I meant the "passing on to renters" part, not the "property may become more expensive" part.
    - deleted 6y ago
      [deleted]
  - ethanbond 6y ago
    Reiterating the other comment: this is not true of LVT. LVT cannot be passed on to renters. Essentially every other tax can be and is passed to consumers. No economist disputes LVT’s inability to be passed on.
  - seanmcdirmid 6y ago
    Lower taxes means more money people can devote to housing, which in turn can also bid up prices. This is why the USA provides for a foreign housing deduction, or Americans could never practically live in Singapore without running into double taxation.
zhdc1 6y ago
With a couple of exceptions, how is housing inelastic sans government zoning and other policy restrictions? We're long past the point where the private sector can estimate housing demand on a long enough time scale for single and multi-family housing in most environments. Outside of cases like Manhattan or London, where demand is driven more by wanting to 'live in...' than actual economic necessity, I don't see why housing needs to be overly regulated when it only takes one-two years (or less) to build new capacity once you remove all of the unnecessary red tape.
- michaelscott 6y ago
  Since we're on HN I guess it's safe to assume that you live in the general Bay area, and probably have for most or all of your life, which is only relevant in that if true it's a location which is particularly prone to problematic housing policy and not much else in the way of housing supply (from what I can tell?). However the view that policy is the only issue to housing just isn't appropriate in many places outside of SF and Singapore is actually a very good example (as is London to a certain degree, expanding inland burroughs notwithstanding): you only have so much space on which to build housing, but the population is variable. If we take the available housing space to be the supply and the population requiring housing to be the demand, you have a textbook case of economic inelasticity. In Singapore they have ironically solved this with policy, as opposed to exacerbating it, and since this was planned early in the country's developmental phase as an economic policy I can assume they understood this problem as economic one very early on.

ethanbond 6y ago

You can get identical effects as Singapore’s state owned land without actually making it state owned/managed/priced by simply instituting a very high Land Value Tax. Rent collected for buildings/management/amenities goes to landlord, rent collected for the physical land upon which the building exists (which is valuable not because of the landlord) is recouped by the community as tax.

thehappypm 6y ago
Higher taxes also directly cause higher rents passed on to renters.
- taktoa 6y ago
  That is uniquely not the case for LVT, because the supply of land is fixed, whereas the demand for housing is variable. EDIT: to be clear, I meant the "passing on to renters" part, not the "property may become more expensive" part.
  - deleted 6y ago
    [deleted]
- ethanbond 6y ago
  Reiterating the other comment: this is not true of LVT. LVT cannot be passed on to renters. Essentially every other tax can be and is passed to consumers. No economist disputes LVT’s inability to be passed on.
- seanmcdirmid 6y ago
  Lower taxes means more money people can devote to housing, which in turn can also bid up prices. This is why the USA provides for a foreign housing deduction, or Americans could never practically live in Singapore without running into double taxation.

zhdc1 6y ago

With a couple of exceptions, how is housing inelastic sans government zoning and other policy restrictions? We're long past the point where the private sector can estimate housing demand on a long enough time scale for single and multi-family housing in most environments. Outside of cases like Manhattan or London, where demand is driven more by wanting to 'live in...' than actual economic necessity, I don't see why housing needs to be overly regulated when it only takes one-two years (or less) to build new capacity once you remove all of the unnecessary red tape.

michaelscott 6y ago
Since we're on HN I guess it's safe to assume that you live in the general Bay area, and probably have for most or all of your life, which is only relevant in that if true it's a location which is particularly prone to problematic housing policy and not much else in the way of housing supply (from what I can tell?). However the view that policy is the only issue to housing just isn't appropriate in many places outside of SF and Singapore is actually a very good example (as is London to a certain degree, expanding inland burroughs notwithstanding): you only have so much space on which to build housing, but the population is variable. If we take the available housing space to be the supply and the population requiring housing to be the demand, you have a textbook case of economic inelasticity. In Singapore they have ironically solved this with policy, as opposed to exacerbating it, and since this was planned early in the country's developmental phase as an economic policy I can assume they understood this problem as economic one very early on.