5 ms·

For housing, a lot of people in tech seem to come down firmly in the "build, baby, build!" camp to increase supply. I think demand should also be suppressed. Sp

For housing, a lot of people in tech seem to come down firmly in the "build, baby, build!" camp to increase supply. I think demand should also be suppressed. Specifically, I think there should be a policy barring people from owning more than, say, two housing units. Our society should not support parasitic landlords buying up huge swaths of housing then renting it out to people for the right to half their monthly paycheck. Berlin is headed this direction and I'm very interested to see how it shakes out: https://www.independent.co.uk/news/world/europe/berlin-landlords-ban-germany-private-rent-housing-referendum-vote-a8796471.html https://www.independent.co.uk/news/world/europe/berlin-landl...

thehappypm 6y ago
I think you have this backwards. Landlords increase housing supply, not increase demand. Also they charge what the market bears; they're exactly as parasitic as people are willing for them to be.
- WarOnPrivacy 6y ago
  > Landlords increase housing supply Housing supplies increase when developers build new housing. Landlords would seem to be a fairly small component in that equation.
  - thehappypm 6y ago
    I own a condo in Boston. Someone new comes to Boston and sees there are 100 rental units on the market. I decide to move and become a landlord. Someone new comes to Boston and now sees 101 rental units on the market. By moving away and becoming a landlord I've put another rental into the supply side.
    - WarOnPrivacy 6y ago
      That's a pretty good example of near negligible impact.
    - deleted 6y ago
      [deleted]
    - jogjayr 6y ago
      > By moving away and becoming a landlord I've put another rental into the supply side. The supply didn't increase. Demand reduced, because you moved away. By your logic, if I stop eating hamburgers I've increased the supply of hamburgers.
  - martinald 6y ago
    Not really - in London (and the rest of the UK) over the last few years large corporate landlords have been building huge developments of thousands of apartments, called the "build to rent" sector. It's unlikely all of these developments would have went ahead without them. Even in the 'normal' development sector, landlords buy a significant proportion of the apartments available from new build developments. I would estimate that 30-40% of the apartments in my building were bought by landlords ahead of the development starting. This adds liquidity to the market and allows developers to build knowing they are taking less risk on selling them when the building is (more) complete.
- fabianhjr 6y ago
  > Also they charge what the market bears; they're exactly as parasitic as people are willing for them to be. That is very similar to this quote of Smith: > The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give. (Adam Smith, op. cit., p. 131) > Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. (Adam Smith, op. cit., Vol. I, p. 130)
- notJim 6y ago
  Anecdotally, I see a lot of "small time landlords" opposing upzoning around the PNW, so in that sense they are very much not increasing housing supply.
- nbardy 6y ago
  That's true in a fair market. But when you are born into a system where all the housing is owned and the asset pricing is kept inflated at the expensive of your purchasing power. That's a different situation.
mtalantikite 6y ago
Yeah, I’ve been curious to see how Berlin ends up myself. It does seem weird that as a society we don’t question the premise that it’s ok for people to buy up as much real estate as they want. People will argue that the landlord is taking risk and supplies services, which is true to some extent, but also seems out of whack from literally every apartment I’ve ever lived in. One landlord in Chicago never kept the heat on, or rather claimed that our unit was at the end of the heating line and it just didn’t get very hot, they couldn’t do anything about it. That was a cold winter. Another in Brooklyn would never fix anything, at all, and if they did it was because the ceiling in the bathroom had a pipe flooding us or some other emergency they couldn’t ignore. There’s probably a middle path between owning dozens of units and only owning the building you live in.
- lm28469 6y ago
  > There’s probably a middle path between owning dozens of units and only owning the building you live in. The problem isn't individuals owning a few units. It's big players owning thousands if not hundred thousands flats. Publicly traded companies, with investors waiting for returns/profits, very often foreign investors even... I really don't like where this is going and frankly I have a hard time understanding how we came this low. https://translate.google.com/translate?sl=auto&tl=en&u=https://de.wikipedia.org/wiki/Deutsche_Wohnen https://translate.google.com/translate?sl=auto&tl=en&u=https...
- leetcrew 6y ago
  on the flip side, I would question the premise that owning the building you live in is a good thing to begin with. why is it good for people to have so much of their wealth tied up in a single property? why is it good for people to experience so much friction in moving around and trying different neighborhoods/cities? imo the american obsession with homeownership is the root of many of our problems. I also notice a common theme in these comments. most of the complaints about landlords seem to come from people who rent older units in highly desirable cities. my renting experience in a cheaper city with lots of new buildings has been quite different.
jtr1 6y ago
It'd certainly be a radical shift in a place like the US, but it's not hard for me to imagine public opinion taking a hard turn against the practice. There's no a consistent, visible, widely understood value added by landlords. In theory, it's that rental units incentivize new development. But when you're paying half your paycheck for a 100 year old home (true in a lot of the NE), it's hard not to feel like you just arrived late at a game of monopoly. Personally, I wonder what would happen if you passed a law that traded all these affordable housing requirements on new development for a ban on owning more than 2-3 homes older than threshold of years.
- heartbeats 6y ago
  They bear the risk of prices going down. If I rent a $100k condo, and the housing market goes down 10%, I don't owe my landlord an additional $10k. (Schematically, my rent even goes down 10%).
benchaney 6y ago
Landlords don't create demand, they convert one type of demand to another. One of the reasons that increasing supply is such a popular idea is that there is no practical way to truly decrease demand. Everyone who is alive needs somewhere to live, and many populous areas simply have more people who want to live there than places for them to live.
psychiatrist24 6y ago
"Parasitic landlords" - again and again, I have to point out that this kind of formulation is hate speech. It is also just a leftist conspiracy theory. And by the way, since I will be downvoted or banned anyway: this was the same angle the Nazis used against the Jews, who often happend to be rich because employment laws had pushed them into the banking business. If you are unhappy with the rent a landlord is asking for, don't rent their house. It is really that simple. You could even buy your own house. And spare me the "many people can't afford it" line. You can move to a cheaper area, and pool money with your socialist friends. Germany also gives special help for poor people for buying houses.
- enlyth 6y ago
  Yeah you don't have to rent their house, just live on the street. It's that simple. Or just move somewhere where you won't find work. Or buy a house like you say, with money you inherited from your rich parents. Can I subscribe to your newsletter? It's the best comedy I've heard in years
  - psychiatrist24 6y ago
    If you can't afford the rent, your work is shit anyway, and you might as well move. The other question is how you managed to move where you live now to begin with. There are places where you can get land for free. If you band together with your socialist friends, you could turn that into the next glamorous megacity.
    - Apocryphon 6y ago
      > The other question is how you managed to move where you live now to begin with. https://www.investopedia.com/terms/p/priced-out.asp https://www.investopedia.com/terms/p/priced-out.asp
      - psychiatrist24 6y ago
        There is rent control in Berlin - you can not arbitrarily rise the rents of people who are already renting your property.
paxys 6y ago
Even before that, an obvious loophole that can be fixed (that too with popular support) is blocking foreign investors who never intend to live in a property, and don't even have the legal right to work in this country, from buying it. There are very few countries in the world that allow just about anyone from anywhere to buy a piece of land within its borders and own it forever.
clairity 6y ago
while mega-landords are a real problem, nationalizing their housing stock is a relatively poor solution. it has a lot of sociopolitical and economic repercussions that are unlikely to be net-positive in the long run. i'll repeat a simpler solution i posted about elsewhere [0], which is to escalate property tax rates based on number of units and/or square footage, which would be a type of pigovian tax similar to a land value tax (which could in fact augment the escalating tax idea). a happy medium in my mind would be to allow a landlord to own a few (occupied) units without much escalation, but once ownership gets much beyond ~100 units, it escalates fairly quickly, so that only the most lucrative buildings (likely tall, perhaps mixed-use, buildings in highly desirable areas) are worth owning outright. [0]: https://news.ycombinator.com/item?id=26595513 https://news.ycombinator.com/item?id=26595513
ookblah 6y ago
anecdotal, korea tried this and it's been a disaster lol.
JamesBarney 6y ago
This would have the exact opposite effect. House + Landlord = Rentable unit. If we reduce the number of landlords we reduce the number of rentable units. Driving rent prices up quite a bit, and driving housing units down a little. Imagine instead we restricted the number of rental units you could own to 0 instead of 2. It would mean that you couldn't rent at unit at any price, driving the price to essentially infinite.
swiley 6y ago
So what do people like me who don't want to own a house do then?

thehappypm 6y ago

I think you have this backwards. Landlords increase housing supply, not increase demand. Also they charge what the market bears; they're exactly as parasitic as people are willing for them to be.

WarOnPrivacy 6y ago
> Landlords increase housing supply Housing supplies increase when developers build new housing. Landlords would seem to be a fairly small component in that equation.
- thehappypm 6y ago
  I own a condo in Boston. Someone new comes to Boston and sees there are 100 rental units on the market. I decide to move and become a landlord. Someone new comes to Boston and now sees 101 rental units on the market. By moving away and becoming a landlord I've put another rental into the supply side.
  - WarOnPrivacy 6y ago
    That's a pretty good example of near negligible impact.
  - deleted 6y ago
    [deleted]
  - jogjayr 6y ago
    > By moving away and becoming a landlord I've put another rental into the supply side. The supply didn't increase. Demand reduced, because you moved away. By your logic, if I stop eating hamburgers I've increased the supply of hamburgers.
- martinald 6y ago
  Not really - in London (and the rest of the UK) over the last few years large corporate landlords have been building huge developments of thousands of apartments, called the "build to rent" sector. It's unlikely all of these developments would have went ahead without them. Even in the 'normal' development sector, landlords buy a significant proportion of the apartments available from new build developments. I would estimate that 30-40% of the apartments in my building were bought by landlords ahead of the development starting. This adds liquidity to the market and allows developers to build knowing they are taking less risk on selling them when the building is (more) complete.
fabianhjr 6y ago
> Also they charge what the market bears; they're exactly as parasitic as people are willing for them to be. That is very similar to this quote of Smith: > The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give. (Adam Smith, op. cit., p. 131) > Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. (Adam Smith, op. cit., Vol. I, p. 130)
notJim 6y ago
Anecdotally, I see a lot of "small time landlords" opposing upzoning around the PNW, so in that sense they are very much not increasing housing supply.
nbardy 6y ago
That's true in a fair market. But when you are born into a system where all the housing is owned and the asset pricing is kept inflated at the expensive of your purchasing power. That's a different situation.

mtalantikite 6y ago

Yeah, I’ve been curious to see how Berlin ends up myself. It does seem weird that as a society we don’t question the premise that it’s ok for people to buy up as much real estate as they want. People will argue that the landlord is taking risk and supplies services, which is true to some extent, but also seems out of whack from literally every apartment I’ve ever lived in. One landlord in Chicago never kept the heat on, or rather claimed that our unit was at the end of the heating line and it just didn’t get very hot, they couldn’t do anything about it. That was a cold winter. Another in Brooklyn would never fix anything, at all, and if they did it was because the ceiling in the bathroom had a pipe flooding us or some other emergency they couldn’t ignore. There’s probably a middle path between owning dozens of units and only owning the building you live in.

lm28469 6y ago
> There’s probably a middle path between owning dozens of units and only owning the building you live in. The problem isn't individuals owning a few units. It's big players owning thousands if not hundred thousands flats. Publicly traded companies, with investors waiting for returns/profits, very often foreign investors even... I really don't like where this is going and frankly I have a hard time understanding how we came this low. https://translate.google.com/translate?sl=auto&tl=en&u=https://de.wikipedia.org/wiki/Deutsche_Wohnen https://translate.google.com/translate?sl=auto&tl=en&u=https...
leetcrew 6y ago
on the flip side, I would question the premise that owning the building you live in is a good thing to begin with. why is it good for people to have so much of their wealth tied up in a single property? why is it good for people to experience so much friction in moving around and trying different neighborhoods/cities? imo the american obsession with homeownership is the root of many of our problems. I also notice a common theme in these comments. most of the complaints about landlords seem to come from people who rent older units in highly desirable cities. my renting experience in a cheaper city with lots of new buildings has been quite different.

jtr1 6y ago

It'd certainly be a radical shift in a place like the US, but it's not hard for me to imagine public opinion taking a hard turn against the practice. There's no a consistent, visible, widely understood value added by landlords. In theory, it's that rental units incentivize new development. But when you're paying half your paycheck for a 100 year old home (true in a lot of the NE), it's hard not to feel like you just arrived late at a game of monopoly. Personally, I wonder what would happen if you passed a law that traded all these affordable housing requirements on new development for a ban on owning more than 2-3 homes older than threshold of years.

heartbeats 6y ago
They bear the risk of prices going down. If I rent a $100k condo, and the housing market goes down 10%, I don't owe my landlord an additional $10k. (Schematically, my rent even goes down 10%).

benchaney 6y ago

Landlords don't create demand, they convert one type of demand to another. One of the reasons that increasing supply is such a popular idea is that there is no practical way to truly decrease demand. Everyone who is alive needs somewhere to live, and many populous areas simply have more people who want to live there than places for them to live.

psychiatrist24 6y ago

"Parasitic landlords" - again and again, I have to point out that this kind of formulation is hate speech. It is also just a leftist conspiracy theory. And by the way, since I will be downvoted or banned anyway: this was the same angle the Nazis used against the Jews, who often happend to be rich because employment laws had pushed them into the banking business. If you are unhappy with the rent a landlord is asking for, don't rent their house. It is really that simple. You could even buy your own house. And spare me the "many people can't afford it" line. You can move to a cheaper area, and pool money with your socialist friends. Germany also gives special help for poor people for buying houses.

enlyth 6y ago
Yeah you don't have to rent their house, just live on the street. It's that simple. Or just move somewhere where you won't find work. Or buy a house like you say, with money you inherited from your rich parents. Can I subscribe to your newsletter? It's the best comedy I've heard in years
- psychiatrist24 6y ago
  If you can't afford the rent, your work is shit anyway, and you might as well move. The other question is how you managed to move where you live now to begin with. There are places where you can get land for free. If you band together with your socialist friends, you could turn that into the next glamorous megacity.
  - Apocryphon 6y ago
    > The other question is how you managed to move where you live now to begin with. https://www.investopedia.com/terms/p/priced-out.asp https://www.investopedia.com/terms/p/priced-out.asp
    - psychiatrist24 6y ago
      There is rent control in Berlin - you can not arbitrarily rise the rents of people who are already renting your property.

paxys 6y ago

Even before that, an obvious loophole that can be fixed (that too with popular support) is blocking foreign investors who never intend to live in a property, and don't even have the legal right to work in this country, from buying it. There are very few countries in the world that allow just about anyone from anywhere to buy a piece of land within its borders and own it forever.

clairity 6y ago

while mega-landords are a real problem, nationalizing their housing stock is a relatively poor solution. it has a lot of sociopolitical and economic repercussions that are unlikely to be net-positive in the long run. i'll repeat a simpler solution i posted about elsewhere [0], which is to escalate property tax rates based on number of units and/or square footage, which would be a type of pigovian tax similar to a land value tax (which could in fact augment the escalating tax idea). a happy medium in my mind would be to allow a landlord to own a few (occupied) units without much escalation, but once ownership gets much beyond ~100 units, it escalates fairly quickly, so that only the most lucrative buildings (likely tall, perhaps mixed-use, buildings in highly desirable areas) are worth owning outright. [0]: https://news.ycombinator.com/item?id=26595513 https://news.ycombinator.com/item?id=26595513

ookblah 6y ago

anecdotal, korea tried this and it's been a disaster lol.

JamesBarney 6y ago

This would have the exact opposite effect. House + Landlord = Rentable unit. If we reduce the number of landlords we reduce the number of rentable units. Driving rent prices up quite a bit, and driving housing units down a little. Imagine instead we restricted the number of rental units you could own to 0 instead of 2. It would mean that you couldn't rent at unit at any price, driving the price to essentially infinite.

swiley 6y ago

So what do people like me who don't want to own a house do then?