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What? That makes no sense. More expensive housing increases the incentive to build more, which decreases prices. The problem is many governments, local councils

What? That makes no sense. More expensive housing increases the incentive to build more, which decreases prices. The problem is many governments, local councils etc regulate land use so heavily that if a developer wants to build a block with 200 apartments NIMBYs are up in arms to protect their own interests while locking out anyone trying to get into the market. House owners are fine with this arrangement, as they get all the benefits and bear none of the costs inherent with excessive land regulations. Non-owners get screwed.

nemothekid 5y ago
Why do governments regulate land use so heavily? Why are house owners fine with this arrangement? Why do NIMBYs go up in arms? The root cause is the same - each actor is trying to protect the value of their investment. It makes perfect sense.
- Panzer04 5y ago
  Sure, but that’s not due to houses being an “investable” item insamuch as regulatory capture. What would be your proposed alternative? Arbitrary planned construction? Like it or not, prices are one of the best ways to choose where our resources go. Land has always been an investment, that’s nothing new (The whole concept of nobility centred on owning and controlling land). I would propose that outcomes would be significantly better if we stuck to deregulating land use and construction as much as possible and let what people are willing to pay for it dictate construction and land use.
  - nemothekid 5y ago
    >Sure, but that’s not due to houses being an “investable” item insamuch as regulatory capture. I don't understand. Do you think that politicians wake up and do regulatory capture for fun? When I say housing as America's primary investment asset is a problem I mean that it is primary driver in how houses are priced. You don't, for example, have the same attitude when it comes to cars. It's understood that cars are a depreciating asset. Imagine the inverse - which you see in some assets like super cars. Can you imagine if people lobbied to have Toyota stop producing Priuses because they did not want to value of their own Prius to go down? You would have government blocking the development of factories in the same way NIMBYs do today. You don't have this problem in places where housing is not asset, for example Japan (who has already kind of learned this lesson with their own housing bubble). At the end of the day, when an entire generation of people have their entire net worth tied up in their houses, of course they are going to do everything to protect it. Regulatory capture are down stream effects of that - people wouldn't burn political capital on regulatory capture if they weren't gaining anything from it. Saying de-regulation of land use is a solution completely ignores this reality. Forget deregulation, the bay area has been trying to get areas simply rezoned for multi-family housing. The same people who stand in the way of rezoning, will also stand in the way of deregulation. And those same people are primarily motivated to protect their investment. You must look at the whole picture.
    - Panzer04 5y ago
      Bit late, but I think you're tying the concepts of assets a bit too much into this. Any expensive item can be an asset, it just so happens that land is by far the easiest for governments to regulate and control. Houses are still assets in Japan, but they are much cheaper because of Japan's very loose zoning regulations. If we want to address this in the West, practically speaking higher levels of government need to override local government zoning regulations (ie. governments less beholden to the interests of the local few at the expense of everyone else)

nemothekid 5y ago

Why do governments regulate land use so heavily? Why are house owners fine with this arrangement? Why do NIMBYs go up in arms? The root cause is the same - each actor is trying to protect the value of their investment. It makes perfect sense.

Panzer04 5y ago
Sure, but that’s not due to houses being an “investable” item insamuch as regulatory capture. What would be your proposed alternative? Arbitrary planned construction? Like it or not, prices are one of the best ways to choose where our resources go. Land has always been an investment, that’s nothing new (The whole concept of nobility centred on owning and controlling land). I would propose that outcomes would be significantly better if we stuck to deregulating land use and construction as much as possible and let what people are willing to pay for it dictate construction and land use.
- nemothekid 5y ago
  >Sure, but that’s not due to houses being an “investable” item insamuch as regulatory capture. I don't understand. Do you think that politicians wake up and do regulatory capture for fun? When I say housing as America's primary investment asset is a problem I mean that it is primary driver in how houses are priced. You don't, for example, have the same attitude when it comes to cars. It's understood that cars are a depreciating asset. Imagine the inverse - which you see in some assets like super cars. Can you imagine if people lobbied to have Toyota stop producing Priuses because they did not want to value of their own Prius to go down? You would have government blocking the development of factories in the same way NIMBYs do today. You don't have this problem in places where housing is not asset, for example Japan (who has already kind of learned this lesson with their own housing bubble). At the end of the day, when an entire generation of people have their entire net worth tied up in their houses, of course they are going to do everything to protect it. Regulatory capture are down stream effects of that - people wouldn't burn political capital on regulatory capture if they weren't gaining anything from it. Saying de-regulation of land use is a solution completely ignores this reality. Forget deregulation, the bay area has been trying to get areas simply rezoned for multi-family housing. The same people who stand in the way of rezoning, will also stand in the way of deregulation. And those same people are primarily motivated to protect their investment. You must look at the whole picture.
  - Panzer04 5y ago
    Bit late, but I think you're tying the concepts of assets a bit too much into this. Any expensive item can be an asset, it just so happens that land is by far the easiest for governments to regulate and control. Houses are still assets in Japan, but they are much cheaper because of Japan's very loose zoning regulations. If we want to address this in the West, practically speaking higher levels of government need to override local government zoning regulations (ie. governments less beholden to the interests of the local few at the expense of everyone else)