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The housing market needs to deregulate zoning and let the free market decide what gets built Not everyone wants to chose between a 2000sqft McMansion or a 500s

The housing market needs to deregulate zoning and let the free market decide what gets built Not everyone wants to chose between a 2000sqft McMansion or a 500sqft shoebox in the sky

nicbou 5y ago
The free market lets actors choose what's best for them at the expense of the group. For example the recreationally remote are bankrupting American towns, and using up far more land and resources than sensible. This also have an environmental impact, but that argument tends to fall on deaf ears among free market proponents.
- trinovantes 5y ago
  While I acknowledge absolute free market may result in tragedy of the commons in many scenarios, you gave a pretty poor counterexample American towns are going bankrupt because federal/state subsidies (e.g. the Highway Act) allowed them to make inefficient decisions like creating financially unsustainable suburbs instead of intensifying urban areas
pydry 5y ago
The problem is that free market is deciding and it's deciding that returns on providing stores of wealth to the very, very, very rich are greatest and as such that crowds out investment in places to actually....live. If you're looking for a wealth store fungibility is a net positive. McMansions and standardized condos are known quantities that can be valued accordingly.
- trinovantes 5y ago
  The free market is simply reacting to the artificial scarcity caused by zoning laws, which is the exact opposite of a free market Make it legal to build more supply then speculation will move onto other assets
  - pydry 5y ago
    The scarcity is driven by land being untaxed. There is very little cost any more to treating property as a bitcoin-like store of wealth. This is partly why there 1.5 million empty homes - 3x the number of homeless. China has a similar problem which is why it has ghost cities - thats where the hoarding instinct channeled wealth. Zoning laws are a red herring. They're the worst enemy of the property developer building yet more luxury condos to be shoved into a hedge fund's real estate portfolio but they dont address the underlying cause of not enough property. We hear about it a lot because property developers have lots of money a significant financial incentive to drive public opinion, but that doesnt make it true. Drive up either property taxes or institute a land value tax and the instinct to hoard property as a bitcoin like store of wealth will collapse, freeing up land for real people to live on.
    - trinovantes 5y ago
      > 1.5 million empty homes Where? Source? If you were talking about the recent article about empty Canadian empty homes, it was already debunked since it includes cottages, student rentals, and unsold homes on the market. It's also illogical an investor would leave empty homes unrented for prolonged period of time if rent could be collected. > China has a similar problem which is why it has ghost cities - thats where the hoarding instinct channeled wealth. Real estate in China is only reliable asset to invest in. The government also strongly encourages real estate as majority of public revenue comes from land transfer tax. Nobody invests in the stockmarket unless they are high up in the CCP since they can literally destroy entire industries without oversight i.e. recent education/tech stocks losing their entire valuation overnight > Zoning laws are a red herring. They're the worst enemy of the property developer building yet more luxury condos to be shoved into a hedge fund's real estate portfolio but they dont address the underlying cause of not enough property. An investor trying to artificially pump up the price of an easily replaceable commodity will eventually will eventually run out of liquidity and everything will self correct. Thanks to zoning laws, the rate of new construction fails to meet demand. Even now, the demand for 1br condos are still unmet and why it's the only thing that gets built whenever developers win permits for dense non-SFH construction. It's almost as if after you waste a lot of time and money fighting NIMBYs you'd want to build whatever provides the highest profit margins. Without zoning laws, eventually the 1br demand will taper out and developers will need to build other unmet demands like 3br low rises to stay in business.

The housing market needs to deregulate zoning and let the free market decide what gets built Not everyone wants to chose between a 2000sqft McMansion or a 500sqft shoebox in the sky

nicbou 5y ago

The free market lets actors choose what's best for them at the expense of the group. For example the recreationally remote are bankrupting American towns, and using up far more land and resources than sensible. This also have an environmental impact, but that argument tends to fall on deaf ears among free market proponents.

trinovantes 5y ago
While I acknowledge absolute free market may result in tragedy of the commons in many scenarios, you gave a pretty poor counterexample American towns are going bankrupt because federal/state subsidies (e.g. the Highway Act) allowed them to make inefficient decisions like creating financially unsustainable suburbs instead of intensifying urban areas

pydry 5y ago

The problem is that free market is deciding and it's deciding that returns on providing stores of wealth to the very, very, very rich are greatest and as such that crowds out investment in places to actually....live. If you're looking for a wealth store fungibility is a net positive. McMansions and standardized condos are known quantities that can be valued accordingly.

trinovantes 5y ago
The free market is simply reacting to the artificial scarcity caused by zoning laws, which is the exact opposite of a free market Make it legal to build more supply then speculation will move onto other assets
- pydry 5y ago
  The scarcity is driven by land being untaxed. There is very little cost any more to treating property as a bitcoin-like store of wealth. This is partly why there 1.5 million empty homes - 3x the number of homeless. China has a similar problem which is why it has ghost cities - thats where the hoarding instinct channeled wealth. Zoning laws are a red herring. They're the worst enemy of the property developer building yet more luxury condos to be shoved into a hedge fund's real estate portfolio but they dont address the underlying cause of not enough property. We hear about it a lot because property developers have lots of money a significant financial incentive to drive public opinion, but that doesnt make it true. Drive up either property taxes or institute a land value tax and the instinct to hoard property as a bitcoin like store of wealth will collapse, freeing up land for real people to live on.
  - trinovantes 5y ago
    > 1.5 million empty homes Where? Source? If you were talking about the recent article about empty Canadian empty homes, it was already debunked since it includes cottages, student rentals, and unsold homes on the market. It's also illogical an investor would leave empty homes unrented for prolonged period of time if rent could be collected. > China has a similar problem which is why it has ghost cities - thats where the hoarding instinct channeled wealth. Real estate in China is only reliable asset to invest in. The government also strongly encourages real estate as majority of public revenue comes from land transfer tax. Nobody invests in the stockmarket unless they are high up in the CCP since they can literally destroy entire industries without oversight i.e. recent education/tech stocks losing their entire valuation overnight > Zoning laws are a red herring. They're the worst enemy of the property developer building yet more luxury condos to be shoved into a hedge fund's real estate portfolio but they dont address the underlying cause of not enough property. An investor trying to artificially pump up the price of an easily replaceable commodity will eventually will eventually run out of liquidity and everything will self correct. Thanks to zoning laws, the rate of new construction fails to meet demand. Even now, the demand for 1br condos are still unmet and why it's the only thing that gets built whenever developers win permits for dense non-SFH construction. It's almost as if after you waste a lot of time and money fighting NIMBYs you'd want to build whatever provides the highest profit margins. Without zoning laws, eventually the 1br demand will taper out and developers will need to build other unmet demands like 3br low rises to stay in business.