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Injecting capital doesn’t magically increase the supply of real estate. If my goal is to hold on to a single family house and sell it for a profit later as is
by nobodyandproud 5y ago
Injecting capital doesn’t magically increase the supply of real estate.
If my goal is to hold on to a single family house and sell it for a profit later as is or with just some touch-ups, it’s still a single family residence. The speculation just increased the cost of the land.
If my goal is to tear down the single family home and replace it with a two-family home or a small apartment; that increases the supply.
Both involve speculators, but only the latter increases the supply. Why shouldn’t policy discourage the former—a market inefficiency, but a very sane local maxima—and encourage the latter?
- CryptoPunk 5y ago>>Injecting capital doesn’t magically increase the supply of real estate. It's not magic. It reliably increases supply by raising the return on investment from building new units, and thus increasing the number of potential projects which find investors. >>Both involve speculators, but only the latter increases the supply. Why shouldn’t policy discourage the former—a market inefficiency, but a very sane local maxima—and encourage the latter? I fully support encouraging the latter and discouraging the former. I would support utilizing a land tax to discourage, and eminent domain to outright prevent, the former.
- nobodyandproud 5y agoThen you’re taking the same position I am.