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Public housing is one option. Or you have to counter the price hikes. Prices are rising in many parts of the world because people are investing more and more mo

Public housing is one option. Or you have to counter the price hikes. Prices are rising in many parts of the world because people are investing more and more money in housing, as an alternative to stocks or other investments. The expected returns mainly come from the rise in value, and not from the rent income. So the companies holding the houses must get rid of the existing tenants and renovate the appartments to increase their market value. Basically, private investments currently don't create much housing, they destroy affordable housing. So you need to create incentives to maintain and expand the affordable segment.

lmm 6y ago
> The expected returns mainly come from the rise in value, and not from the rent income. So the companies holding the houses must get rid of the existing tenants and renovate the appartments to increase their market value. Nah. Housing rises in value even if you don't touch it. Demand is rising and supply isn't. The solution is to make it easier to build more.
- brudgers 6y ago
  The market prefers higher priced housing over lower priced. When there is demand for higher price housing the market builds housing. When there is not demand for higher priced housing the market tends to wait out the down cycle. The market has no preference for building unprofitable housing. Bankers don’t have enthusiasm for loaning money to build it either. Finally housing is one of the less profitable real estate development types. That’s why commercial property often sits vacant...the long term ROI from sitting out low demand is better than conversion in the present.
  - lmm 6y ago
    > The market prefers higher priced housing over lower priced. When there is demand for higher price housing the market builds housing. When there is not demand for higher priced housing the market tends to wait out the down cycle. It's not the market, developers don't building cheap housing because regulations generally make it illegal. > The market has no preference for building unprofitable housing. Bankers don’t have enthusiasm for loaning money to build it either. Sure, but profitable isn't the same thing as expensive. "Pile 'em high, sell 'em cheap" is a perfectly valid business model that bankers and businesspeople alike are happy to follow. But when the planning rules make it so expensive to build anything at all, building expensive housing is the only way to make a profit.

lmm 6y ago

> The expected returns mainly come from the rise in value, and not from the rent income. So the companies holding the houses must get rid of the existing tenants and renovate the appartments to increase their market value. Nah. Housing rises in value even if you don't touch it. Demand is rising and supply isn't. The solution is to make it easier to build more.

brudgers 6y ago
The market prefers higher priced housing over lower priced. When there is demand for higher price housing the market builds housing. When there is not demand for higher priced housing the market tends to wait out the down cycle. The market has no preference for building unprofitable housing. Bankers don’t have enthusiasm for loaning money to build it either. Finally housing is one of the less profitable real estate development types. That’s why commercial property often sits vacant...the long term ROI from sitting out low demand is better than conversion in the present.
- lmm 6y ago
  > The market prefers higher priced housing over lower priced. When there is demand for higher price housing the market builds housing. When there is not demand for higher priced housing the market tends to wait out the down cycle. It's not the market, developers don't building cheap housing because regulations generally make it illegal. > The market has no preference for building unprofitable housing. Bankers don’t have enthusiasm for loaning money to build it either. Sure, but profitable isn't the same thing as expensive. "Pile 'em high, sell 'em cheap" is a perfectly valid business model that bankers and businesspeople alike are happy to follow. But when the planning rules make it so expensive to build anything at all, building expensive housing is the only way to make a profit.