5 ms·

> A third option is necessary: a way to rent without making someone else rich. I care how much I pay. I don't give a shit who gets it.

berdario 6y ago
If buy-to-let is profitable, people will do it as a business... If people do it as a business, it'll drive the price of housing up even more, and since businesses have more capital than workers, the latter will be priced out (if lucky, they'll be able to afford a 90% LTV which will take decades to repay, but most workers cannot afford it on their own) If you care how much you pay, you care about who is extracting money out of you
- Nasrudith 6y ago
  That does not follow - they are still fulfilling housing demand by renting it and more capital means more ability to build houses. The whole premise appears telological - landlords are intrinsically bad ergo everything they do will make the housing situation worse.
  - berdario 6y ago
    You're mixing up home builders with landlords. The latter aren't fulfilling housing demand: they are capturing it by outcompeting people who cannot afford property prices (prices driven up by buy-to-let demand). You say that landlords are intrinsically bad: lots of people agree with you on that... I stop short of it, since there's a minority of people for which renting is a preferable solution (at least temporarily) and nationalising the whole housing market is infeasible.
lvs 6y ago
You do if it exacerbates wealth disparity and inflation.
ahoy 6y ago
The amount you pay is set by the people who get it.
- fighterpilot 6y ago
  It's set mostly by supply and demand across the market. The owner and the renter can get together and negotiate a small deviation based on the property's idiosyncracies, but it's the market that's primarily driving it.
  - WarOnPrivacy 6y ago
    The term for an opportunistic escalation in pricing (of a critical commodity) due to a rapid-onset shortage is price gouging. Like many US markets, local rental prices have ~doubled in the last two years. As in every case of price gouging, sufficient supply would have prevented the opportunism that is presently causing broad harm. Huzzah for supply and demand, I guess.
    - throwawayboise 6y ago
      The alternative to "price gouging" is imposing some form of price controls. Since housing cannot be created out of thin air, that means some people will get lucky and everyone else will have to do without. I'm not sure that's any less a harm.
      - medvezhenok 6y ago
        The alternative to price gouging is not price controls (that just redirects the pain into shortages instead). It's increasing supply. Housing can actually be built quite quickly - it's the bureaucratic stuff (permits, zoning, etc), which makes it take forever.
    - fighterpilot 6y ago
      Right, pricing is following supply and demand. There's a lack of supply so the prices inevitably go up. Increase the supply through deregulation or incentives and we won't have this problem.
ssalazar 6y ago
Profit motive drives your rent up.
- seoaeu 6y ago
  And competition drives it down.
  - dredmorbius 6y ago
    In the case of land, no, competition drives attempts to curtail supply, in which case the value goes up further. Which is why something that works the way a Georgian land value tax is designed is ultimately necessary.
    - seoaeu 6y ago
      People generally rent homes rather than just land. When zoning doesn't interfere, landowners maximize their profit by creating as many homes on each parcel of land as they believe they'll be able to find tenants for. A land tax might help, but it is silly to say that people wouldn't ever use their land productively without one.
      - dredmorbius 6y ago
        NIMBY says otherwise.
        seoaeu 6y ago
        Hence "When zoning doesn't interfere"
        dredmorbius 6y ago
        NIMBY is more than just zoning. Or put another way: zoning isn't the only tool used by NIMBYs. The problem is institutional, and is based in the same economics (inelastic supply of land) that makes a land-value tax so effective. If by any means possible an entity or consortium of them can restrict new development in an area, then as a whole their ability to capture consumer surplus value through economic rents increases. This can be holding units off market, limiting density, restrictions on various utility hookups (typically sewerage and water), redlining, title insurance, homeowners' insurance, and more. I've found direct documentation of such practices dating to 1937, and long preceding that. When recently the mechanized industries, particularly in metal, entered the housing field with the production of “prefabricated houses”, they were met by the resistance of property holders, especially of the banks, who hold mortgages on about 58 percent of all 1933 value of all urban real estate,149 and who fear that an influx of cheap modern dwellings would subtract substantially from the market value of existing structures.150 These banks and loan companies have been unwilling to finance prefabricated houses except in rare exceptions and then on a limited basis. Lumber companies and manufacturers of other materials which are being displaced in the production of prefabricated houses, have sought to prevent their construction through building-code restrictions and by organizing boycotts by dealers and building crafts. Moral and ethical rationalizations have been used against prefabricated houses. The director of the New England division of the American Institute of Architects in May 1934 attacked prefabricated houses as tending “to substitute a life of vagrancy for responsible citizenship in the community”.151 The author of an article entitled, “Houses Cannot be Built Like Automobiles”, who speaks on behalf of architects against prefabrication, argues plaintively, “Spiritual, mental, and physical well-being is enhanced always by the exercise and development of individualism, especially when related to the home and its environment. Housing that fails to respect these human values must be considered among the ‘chats’ to be discarded”.152 Planned public housing projects such as slum clearance which afford the most efficient methods of utilizing advanced technologies in the building industry, crash against the wall of vested private-property interest. They meet the combined opposition of the owners of obsolete buildings, that nonetheless are still profitable, of landowners who demand prohibitive prices, of holders of mortgages who fear a depreciation of housing values through the increase in available homes. Achievements in building technology lie sterile in the face of the opposition of these interests. It has been calculated that at the rate of replacement between 1921 and 1933 of homes and apartments, the American house will be in use 142 years.153 Such slow replacement, based on profits derived from old houses, impedes the building of new structures, however pressing the housing needs for the mass of the population of the United States may be. Bernhard J. Stern, "Resistances to the Adoption of Technological Innovations", 1937 https://archive.org/details/technologicaltre1937unitrich/page/39 https://archive.org/details/technologicaltre1937unitrich/pag... Markdown: https://rentry.co/szi3g https://rentry.co/szi3g
dredmorbius 6y ago
Given the eventual concentrating of ownership, who gets it does matter in that it creates a land-ownership monopoly. Policies which discourage concentration of ownership, through land value taxation or public ownership, counter this tendency.

berdario 6y ago

If buy-to-let is profitable, people will do it as a business... If people do it as a business, it'll drive the price of housing up even more, and since businesses have more capital than workers, the latter will be priced out (if lucky, they'll be able to afford a 90% LTV which will take decades to repay, but most workers cannot afford it on their own) If you care how much you pay, you care about who is extracting money out of you

Nasrudith 6y ago
That does not follow - they are still fulfilling housing demand by renting it and more capital means more ability to build houses. The whole premise appears telological - landlords are intrinsically bad ergo everything they do will make the housing situation worse.
- berdario 6y ago
  You're mixing up home builders with landlords. The latter aren't fulfilling housing demand: they are capturing it by outcompeting people who cannot afford property prices (prices driven up by buy-to-let demand). You say that landlords are intrinsically bad: lots of people agree with you on that... I stop short of it, since there's a minority of people for which renting is a preferable solution (at least temporarily) and nationalising the whole housing market is infeasible.

lvs 6y ago

You do if it exacerbates wealth disparity and inflation.

ahoy 6y ago

The amount you pay is set by the people who get it.

fighterpilot 6y ago
It's set mostly by supply and demand across the market. The owner and the renter can get together and negotiate a small deviation based on the property's idiosyncracies, but it's the market that's primarily driving it.
- WarOnPrivacy 6y ago
  The term for an opportunistic escalation in pricing (of a critical commodity) due to a rapid-onset shortage is price gouging. Like many US markets, local rental prices have ~doubled in the last two years. As in every case of price gouging, sufficient supply would have prevented the opportunism that is presently causing broad harm. Huzzah for supply and demand, I guess.
  - throwawayboise 6y ago
    The alternative to "price gouging" is imposing some form of price controls. Since housing cannot be created out of thin air, that means some people will get lucky and everyone else will have to do without. I'm not sure that's any less a harm.
    - medvezhenok 6y ago
      The alternative to price gouging is not price controls (that just redirects the pain into shortages instead). It's increasing supply. Housing can actually be built quite quickly - it's the bureaucratic stuff (permits, zoning, etc), which makes it take forever.
  - fighterpilot 6y ago
    Right, pricing is following supply and demand. There's a lack of supply so the prices inevitably go up. Increase the supply through deregulation or incentives and we won't have this problem.

ssalazar 6y ago

Profit motive drives your rent up.

seoaeu 6y ago
And competition drives it down.
- dredmorbius 6y ago
  In the case of land, no, competition drives attempts to curtail supply, in which case the value goes up further. Which is why something that works the way a Georgian land value tax is designed is ultimately necessary.
  - seoaeu 6y ago
    People generally rent homes rather than just land. When zoning doesn't interfere, landowners maximize their profit by creating as many homes on each parcel of land as they believe they'll be able to find tenants for. A land tax might help, but it is silly to say that people wouldn't ever use their land productively without one.
    - dredmorbius 6y ago
      NIMBY says otherwise.
      - seoaeu 6y ago
        Hence "When zoning doesn't interfere"
        dredmorbius 6y ago
        NIMBY is more than just zoning. Or put another way: zoning isn't the only tool used by NIMBYs. The problem is institutional, and is based in the same economics (inelastic supply of land) that makes a land-value tax so effective. If by any means possible an entity or consortium of them can restrict new development in an area, then as a whole their ability to capture consumer surplus value through economic rents increases. This can be holding units off market, limiting density, restrictions on various utility hookups (typically sewerage and water), redlining, title insurance, homeowners' insurance, and more. I've found direct documentation of such practices dating to 1937, and long preceding that. When recently the mechanized industries, particularly in metal, entered the housing field with the production of “prefabricated houses”, they were met by the resistance of property holders, especially of the banks, who hold mortgages on about 58 percent of all 1933 value of all urban real estate,149 and who fear that an influx of cheap modern dwellings would subtract substantially from the market value of existing structures.150 These banks and loan companies have been unwilling to finance prefabricated houses except in rare exceptions and then on a limited basis. Lumber companies and manufacturers of other materials which are being displaced in the production of prefabricated houses, have sought to prevent their construction through building-code restrictions and by organizing boycotts by dealers and building crafts. Moral and ethical rationalizations have been used against prefabricated houses. The director of the New England division of the American Institute of Architects in May 1934 attacked prefabricated houses as tending “to substitute a life of vagrancy for responsible citizenship in the community”.151 The author of an article entitled, “Houses Cannot be Built Like Automobiles”, who speaks on behalf of architects against prefabrication, argues plaintively, “Spiritual, mental, and physical well-being is enhanced always by the exercise and development of individualism, especially when related to the home and its environment. Housing that fails to respect these human values must be considered among the ‘chats’ to be discarded”.152 Planned public housing projects such as slum clearance which afford the most efficient methods of utilizing advanced technologies in the building industry, crash against the wall of vested private-property interest. They meet the combined opposition of the owners of obsolete buildings, that nonetheless are still profitable, of landowners who demand prohibitive prices, of holders of mortgages who fear a depreciation of housing values through the increase in available homes. Achievements in building technology lie sterile in the face of the opposition of these interests. It has been calculated that at the rate of replacement between 1921 and 1933 of homes and apartments, the American house will be in use 142 years.153 Such slow replacement, based on profits derived from old houses, impedes the building of new structures, however pressing the housing needs for the mass of the population of the United States may be. Bernhard J. Stern, "Resistances to the Adoption of Technological Innovations", 1937 https://archive.org/details/technologicaltre1937unitrich/page/39 https://archive.org/details/technologicaltre1937unitrich/pag... Markdown: https://rentry.co/szi3g https://rentry.co/szi3g

dredmorbius 6y ago

Given the eventual concentrating of ownership, who gets it does matter in that it creates a land-ownership monopoly. Policies which discourage concentration of ownership, through land value taxation or public ownership, counter this tendency.