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So this is a pretty good example of a non-constructive response created by polarization. Obviously we are only interested in the returns to modifying (b) under

by scythe 5y ago

So this is a pretty good example of a non-constructive response created by polarization. Obviously we are only interested in the returns to modifying (b) under the constraints of (a). Obviously markets can price this kind of thing. But no, let's obsess over any technicality in a critique of our ideology (in your case, the deregulation position) until the Sun explodes.

PaulDavisThe1st 5y ago
> Obviously markets can price this kind of thing. The markets have priced this kind of thing. TFA is about the result. You could argue that the situation described in TFA is contigent or temporary or something like that, and to the extent that everything about any town fits that description, sure, you're right. But it's no help to anyone to say "oh, this situation will be different in 50 years anyway". You could (and probably would) argue that the problems described in TFA arise from the political control exerted by local voters to limit housing styles and availability, and not "the market". That's certainly true to some extent, but there's no way out of that unless you propose to strip towns of political systems entirely - perhaps some libertarian scenario in which ownership is everything and no political process can prevent an owner from using something unless it causes harm to others, harm defined, of course, by the owner or the owner's political and economic allies. That's a debate I no longer get into.
- scythe 5y ago
  >But it's no help to anyone to say "oh, this situation will be different in 50 years anyway". Yes, that's why I covered mitigations in the paragraphs you ignored. >You could (and probably would) argue that the problems described in TFA arise from the political control [...] No, I explicitly rejected that argument in my original post. In fact, the very next sentence after the one you quoted says this: >But we can't expect that construction to materialize where the market isn't convinced it's necessary, simply because it would meet our social objectives. This is why I don't bother arguing. People don't even read what you said.
  - PaulDavisThe1st 5y ago
    I really don't know what your issue is here. Your original top-level comment more or less opens with an affirmation that markets will do the right thing: > The market adjusts if it is correct to adjust, at least probably, according to the probably efficient market hypothesis. The question is whether it's correct for the market to adjust. But that's not the question. The first question is whether this hypothesis is correct, and there's plenty of evidence that it's an inadequate model of the real world, particularly in contexts that involve external factors that cannot be controlled (like geography and federal ownership). Then you move to: > So yes, the solution to a durable increase in housing demand is to build more housing. But a solid part of TFA was about how "build more housing" is not an option in these towns, at least not in the same that it might be in other geographic locations. Shortly thereafter, you introduce a question that I don't see comes up from TFA at all: > What about a transient increase in demand? Nobody in the TFA is discussing a transient increase in demand, unless you are trying to classify "we live in a time where a bunch of people can afford to spend $1.8M on a 2nd home in Vail" as a transient phenomenon. > Over the long-term, concealing a durable increase in demand with stringent tenant protections creates a double standard and a new kind of inequality. There's a serious argument that the phenomena described in TFA are not a "durable increase in demand", but a more complicated pattern. Why? Well, first of all because the housing stock that has been subject to price pressure is in a different category from the stock sought out by the local workforce. Although the pricing across categories (e.g. a 5k sq ft mountain home vs. a studio apartment above a restaurant) are connected, it's not simple linear relationship, and a town could have a surplus of one and shortage of the other, and it would not cause the sort of pricing shifts that would occur in a homogenous market. Second, because the reason for the mismatch in supply/demand is not just that new construction hasn't happened yet, but because new construction is actively discouraged by the geography and the local politics. So, these mountain resort towns are not in the same situation as, say, Atlanta, which simply has a large number of people who want to move there, across many different socio-economic demographics, and where the construction of new houses, while not entirely free of political control, is not functionally prevented from any attempt to meet demand. > But we can't expect that construction to materialize where the market isn't convinced it's necessary, simply because it would meet our social objectives. I didn't explicitly cite this sentence because it just seems so obviously misguided to me that I tried to get at the bigger picture. You appear to see a rational, efficient market making decisions ("where the market isn't convinced that it's necessary"), whereas I see something quite different at work. > And we can't ignore the future to meet social objectives right now. We regularly and intentionally do this. It just typically works out that the "social objectives" that are met by ignoring the future are the ones set by people who already have power and wealth. OK, I think I see the problem. It's not that I didn't read what you said. It's that I don't agree with you.

by scythe 5y ago

PaulDavisThe1st 5y ago

> Obviously markets can price this kind of thing. The markets have priced this kind of thing. TFA is about the result. You could argue that the situation described in TFA is contigent or temporary or something like that, and to the extent that everything about any town fits that description, sure, you're right. But it's no help to anyone to say "oh, this situation will be different in 50 years anyway". You could (and probably would) argue that the problems described in TFA arise from the political control exerted by local voters to limit housing styles and availability, and not "the market". That's certainly true to some extent, but there's no way out of that unless you propose to strip towns of political systems entirely - perhaps some libertarian scenario in which ownership is everything and no political process can prevent an owner from using something unless it causes harm to others, harm defined, of course, by the owner or the owner's political and economic allies. That's a debate I no longer get into.

scythe 5y ago
>But it's no help to anyone to say "oh, this situation will be different in 50 years anyway". Yes, that's why I covered mitigations in the paragraphs you ignored. >You could (and probably would) argue that the problems described in TFA arise from the political control [...] No, I explicitly rejected that argument in my original post. In fact, the very next sentence after the one you quoted says this: >But we can't expect that construction to materialize where the market isn't convinced it's necessary, simply because it would meet our social objectives. This is why I don't bother arguing. People don't even read what you said.
- PaulDavisThe1st 5y ago
  I really don't know what your issue is here. Your original top-level comment more or less opens with an affirmation that markets will do the right thing: > The market adjusts if it is correct to adjust, at least probably, according to the probably efficient market hypothesis. The question is whether it's correct for the market to adjust. But that's not the question. The first question is whether this hypothesis is correct, and there's plenty of evidence that it's an inadequate model of the real world, particularly in contexts that involve external factors that cannot be controlled (like geography and federal ownership). Then you move to: > So yes, the solution to a durable increase in housing demand is to build more housing. But a solid part of TFA was about how "build more housing" is not an option in these towns, at least not in the same that it might be in other geographic locations. Shortly thereafter, you introduce a question that I don't see comes up from TFA at all: > What about a transient increase in demand? Nobody in the TFA is discussing a transient increase in demand, unless you are trying to classify "we live in a time where a bunch of people can afford to spend $1.8M on a 2nd home in Vail" as a transient phenomenon. > Over the long-term, concealing a durable increase in demand with stringent tenant protections creates a double standard and a new kind of inequality. There's a serious argument that the phenomena described in TFA are not a "durable increase in demand", but a more complicated pattern. Why? Well, first of all because the housing stock that has been subject to price pressure is in a different category from the stock sought out by the local workforce. Although the pricing across categories (e.g. a 5k sq ft mountain home vs. a studio apartment above a restaurant) are connected, it's not simple linear relationship, and a town could have a surplus of one and shortage of the other, and it would not cause the sort of pricing shifts that would occur in a homogenous market. Second, because the reason for the mismatch in supply/demand is not just that new construction hasn't happened yet, but because new construction is actively discouraged by the geography and the local politics. So, these mountain resort towns are not in the same situation as, say, Atlanta, which simply has a large number of people who want to move there, across many different socio-economic demographics, and where the construction of new houses, while not entirely free of political control, is not functionally prevented from any attempt to meet demand. > But we can't expect that construction to materialize where the market isn't convinced it's necessary, simply because it would meet our social objectives. I didn't explicitly cite this sentence because it just seems so obviously misguided to me that I tried to get at the bigger picture. You appear to see a rational, efficient market making decisions ("where the market isn't convinced that it's necessary"), whereas I see something quite different at work. > And we can't ignore the future to meet social objectives right now. We regularly and intentionally do this. It just typically works out that the "social objectives" that are met by ignoring the future are the ones set by people who already have power and wealth. OK, I think I see the problem. It's not that I didn't read what you said. It's that I don't agree with you.