5 ms·
The only way to correct the market is for more supply to exist. Adequate supply would ensure that competition works.
by mjevans 5y ago
The only way to correct the market is for more supply to exist. Adequate supply would ensure that competition works.
- bserge 5y agoMore supply on limited land. Which will be bought out by the same 5 real estate companies, just like everything else.
- harryh 5y agoEven if you were right (and I don't think you are) about the same 5 real estate companies buying up all added supply, it wouldn't matter. Those 5 companies would still be subject to the forces of supply and demand. Increased supply with flat demand means falling prices. https://twitter.com/cw4emeryville/status/1438862784024891394 https://twitter.com/cw4emeryville/status/1438862784024891394
- inglor_cz 5y agoRemarkably, Austrian capital Vienna manages to keep a good municipal stock of affordable housing. But other cities failed to imitate Viennese methods. Also, Berlin has a lot of land that could be built upon. Land is not a scarce resource in that particular corner of Europe.
- Sebb767 5y agoBerlin itself is quite full (with the exception of the airport park, which is intentionally kept as a green area). There is a lot of cheap land available in Germany, especially in the countryside on the east, but near the city the situation is different.
- inglor_cz 5y agoLooking now at Berlin from the bird's perspective, Tegel airport could probably be redeveloped now that the new airport is in operation. Also, existing land use could see some improvements. Does it make sense to have a huge solar electricity park like this: https://mapy.cz/s/pohetunuzu https://mapy.cz/s/pohetunuzu in the middle of a city with a shortage of housing? That is 150 x 500 m piece of land where at least 5 thousand people could live comfortably even without a need for high-rises. (6 story houses or so). In a walking distance from an existing U-bahn station. (Not to mention the other factories around.) There is a discussion in Prague about moving some big shopping centers from the wider center to the outskirts and using the freed land for construction. But everything takes long in our state of bureaucracy.
- mastax 5y agoVienna's population intensely declined after it was no longer the seat of a large empire, which gave the government an opportunity to buy up land for cheap. Vienna's population is still lower than it was in 1916, which explains why housing is relatively affordable there. It's not something easily replicable in other cities.
- eliaspro 5y ago...if you see housing as a market and not as a fundamental right in a civilized society.
- harryh 5y agoIf you declare housing "a fundamental right" then you still need more supply when you have a location (like Berlin) that doesn't have sufficient housing for the number of people that want to live there.
- shafyy 5y agoThe problem is not that there isn't sufficient housing, the problem is that a lot of the housing is too expensive.
- harryh 5y agoWhile I can't speak for Berlin specifically, I can say that in most places with very expensive housing this isn't true. You can see this because other problems tend to occur when housing gets very expensive: - Overcrowding - People being forced to move out of city centers - Very long commute times to work - Reduced fertility rates because people want more room for kids All of these problems are due to insufficient housing and not just too high prices.
- dvh 5y agoIt won't. Companies will always have more money to spend than people. We should add extra tax on house/apartments and you don't need to pay it if you live there. Initially landlords will add tax to rent but as the tax will increase (let's start at 1% and increase each year) eventually the rent will be so high nobody will be able to afford it and landlord will have to sell it.
- tekkk 5y agoI have thought something similar but more in terms of deduction for living in your own home. But it does make more sense to increase the cost of rent-seeking as well. Also i pondered would adding a law that allows tenants to have an option for purchasing the house at market price for decreased taxation for the landlord help. That should make more people home-owners and thus allow them to generate more wealth in the long run. Of course the whole topic is so complex it's impossible to invent any rule or law that fixes everything. But preventing useless speculation is what every common sense individual should wish for.
- harryh 5y agoOwner occupied housing already gets a tax deduction because owners don’t have to pay taxes on imputed rent (in the vast majority of tax jurisdictions). It would be great to actually fix this because it distorts the housing market to the detriment of renters, but I’m not holding my breath.
- goodpoint 5y agoFalse. Housing is not an elastic "free" market. Houses are not fungible goods like bolts or eggs. https://blogs.cfainstitute.org/investor/2017/03/27/where-markets-fail-markets-assume-fungibility/ https://blogs.cfainstitute.org/investor/2017/03/27/where-mar...
- goodpoint 5y agoWhy the silent downvotes? This is the most basic economy 101.
- harryh 5y agoBecause housing isn’t completely in-fungible either. So, while there might be irregularities here and there, increasing supply will in fact put downward pressure on prices.
- goodpoint 5y agoI never said it's completely non-fungible. Clearly I struck a nerve here.
- harryh 5y agoBut you did say that it was "False" that additional supply would put competitive pressure on housing prices.
- dredmorbius 5y agoYou kind of did precisely just that in your response to my comment here: https://news.ycombinator.com/item?id=28585422 https://news.ycombinator.com/item?id=28585422 You're grossly overstating constraints and the absolute and relative quantities of housing which must be added.
- ryan93 5y agoAre you claiming that if America's housing supply literally doubled overnight prices wouldn't change?
- grey_earthling 5y agoHow would you go about creating more land?
- lordnacho 5y agoYou change the laws to incentivize building up. You add transport infrastructure, parks, schools, etc.
- deleted 5y ago[deleted]
- Valakas_ 5y agoLet me give you an exercise in thought so you can see that just simplifying it into "dEmAnD vs SupPly pRobLem" is incredibly misleading. Imagine there is one person that owns 99% of the worlds wealth. Now, is there demand for housing? You bet. That guy wants to buy all the houses he can. If they build more, he will buy them too. No matter how much supply you offer, the demand will be there. He will buy anything. Now replace wealthy guy by corporations, REITs and wealthy people (who would own not 99% but ~90% of the world's wealth) and entertain me how increasing supply fixes anything.
- harryh 5y agoYour thought exercise is interesting, but not in the way you think. Property owners do, in fact, conspire with each other to prevent the construction of new housing (via zoning laws). They do this, as you say, so that they can get richer. Allowing them to get away with it (by denying the fact that there is a supply problem) plays right into their hands. What we need to do is thwart their scheme and, through better government, legalize the construction of new housing so that wealthier people who own much of the existing property stop seeing artificial government created gains in the the value of their housing because they've conscripted the government into their cartel.