12 ms·

> If the population rises and we refuse to build more houses Building more houses is generally good too, but it's a bit of a cop-out to blame the whole situati

• taurath 5y ago
  We need to make primary residences extremely more advantageous tax-wise, and punish investment properties.
• darkerside 5y ago
  This happens all the time every day. Those rich people are pharmacies like CVS and Walgreens. They buy the medicine, stock it in smaller doses at an elevated price. It's really not that different from investors buying a property and offering it for short term rental so that people can enjoy it in small doses.
• deepakhj 5y ago
  US housing inventory is 860k which is at historic lows compared to 1.5m pre-pandemic. It's a housing supply issue. Salt Lake City and Missoula are up 45% YOY with inventories down 40-50%.
• gregable 5y ago
  Yes, and this would really be awful in the short term, but in the medium term medicine companies would just spin up more production until the "very wealthy people" demand has been met and medicine becomes available again at some reasonable price. The fact that this is very likely prevents most of the speculation in the first place. The difference with real estate is that the owners get to determine production levels, via local zoning laws. Sure, there is some natural scarcity: Land cannot be created, but in most cases artificial scarcity is the issue.
  • davidw 5y ago
    > The difference with real estate is that the owners get to determine production levels, via local zoning laws. I'm part of a local YIMBY group, and show up to hearings to try and get housing built, write letters, etc... I have never, ever seen 'investors' write in or speak at these things. It's all our neighbors who show up and scream about not building homes.
    • WindyLakeReturn 5y ago
      Could this be a side effect of efficiency? Much more efficient for the investors to push for the ideas that lead to local homeowners showing up to protest than to protest themselves.
      • davidw 5y ago
        Investors don't have a voice locally. They don't write letters to the editor or post on Nextdoor. Pretty much all they have to do is sit back and reap the benefits of angry neighbors doing all the dirty work of preventing homes from being built. It's a pretty sweet gig. They even say this stuff straight up in their SEC filings.
  • deleted 5y ago
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• paxys 5y ago
  Thing is if people start hoarding medicine then new companies can pop up and fill in the gap, or existing ones can increase production, making the whole thing pointless to do. Same goes for every other "necessary to life" product. Temporary disruptions will be handled by the market in the long term, and in the worst case government can step in and regulate. Housing is probably the only sector where all the laws and regulations work the other way – to actively stop you from building more of something that everyone needs.
  • andrepd 5y ago
    >Temporary disruptions will be handled by the market in the long term This is the sort of gospel/dogma that free market absolutists like to propagate, but plainly reality proves this wrong. Markets are a tool, but not a universally useful one.
    • darkerside 5y ago
      Not so plain to the rest of us. Can you explain what makes this so evident?
  • tshaddox 5y ago
    Okay, but how deep is the appetite for buying medicine as collectibles? What if doubling the production of medicine just means that now the wealthiest 2% collects all the medicine instead of the wealthiest 1%? Not to mention, how long will it take to ramp up all this medicine production?
    • mistrial9 5y ago
      no, no - this is a real-estate Zillow thread BUT.. search for "pharma bros" and you will see this is not a fanciful example
      • briHass 5y ago
        Yeah, but much like housing shortages, the classic cases of 'pharma bros' (Shkreli, et. al) is due in large part to the government. He, specifically, was able to jack prices because his company owned the patents (gov issued and controlled) and manufacturing license (gov issued) to rare but important drugs.
• jsnk 5y ago
  This analogy is quite lacking. You should also mention that this medicine rich people are collecting also has dozens of other alternative medicines with hundreds of thousands in volume because other cities exist. Also you should mention that some of these rich people are not rich people at all, but working class people who's lived in a location for decades which has become a desirable location in recent years thanks to some other people who generated wealth in the area. Also you forgot to bring up the local government ran by some of these rich people who are blocking any measure to increase the supply of the medicine in the area. This certainly can crash the entrenched medicine cartel in the city, but some of these cities are North Korean style de facto one party system where no other opposition may challenge the status quo.
  • giraffe_lady 5y ago
    Cites are not fungible, I hate that this always comes up. I have relationships here going back to my childhood, I sometimes visit the grave of the person I am named for, I spend every sunday afternoon cooking and eating with the 97-year-old who took me in and nursed me back to health decades ago. If I move to another city these things aren't coming with. Now you can dismiss these things as inherently less meaningful than, and therefore rightly subjected to, the economic desires of asset holders. That's a much more radical position than I think you're wanting to take here though. When you say or imply people facing unaffordable housing can just move somewhere else, this is a position you're endorsing. The analogy doesn't have to cover every nuance of the situation to be valuable. A necessity of life has become a competitive investment vehicle, and the people most hurt by this are told that it is good and correct and they should accept it by wildly upending their lives for no personal benefit.
    • lotsofpulp 5y ago
      > A necessity of life has become a competitive investment vehicle My perspective is that a necessity of life (land) has started bumping up against the limits of nature. Population has drastically increased, and for various reasons such as increased access to information, economic agglomeration, etc, certain areas of land are in far more demand than others relative to supply. Allocating scarce resources (sufficient land to have a detached single family home and a driveway) in such a scenario will always lead to some people getting what they want, while others do not. Some options are (not exclusive to these) -letting certain classes of people have higher priority than others (such as California’s law that keeps property taxes artificially low for those who were there before others) -letting the amount of money determine who gets to live where, due to increasing house prices and commensurate increases in property taxes. -changing zoning laws so that areas are modified from low density to high density housing, increasing the supply. This one causes various knock on effects, hence it is fought against in popular places that have reached its limits under the existing scheme (such as Bay Area and SFH) There are no options where no one has to sacrifice. The investment vehicle aspect of land is negligible and more of a consequence of the extreme variations in demand of land in different regions.
• anchpop 5y ago
  In areas where home prices are high, the vast majority of homes have people living in them. So the idea that home prices are inflated by people buying homes and not doing anything with them seems a bit suspect to me. Additionally it kind of strains belief that people are buying homes, paying property tax, etc. just because they like collecting them the way a kid likes collecting pokemon cards. More likely they'd buy a home because they expect home prices to rise and they'll be able to sell the home for more in the future. It may be unintuitive, but if your market is not incredibly supply-constrained this is actually a good thing. Here's why. Let's say there's an up-and-coming college town, and speculators think that in a few years the town will become trendy and many people will want to move there. If they're right, demand will go up and home prices will rise. That means you can buy a home now on the cheap and sell it in a couple years when houses are more expensive to make a profit. But of course, when you buy a house now, you're contributing to demand for houses, so you're making the price rise in the present in response to a change in demand you anticipate happening years from now. Since home prices are rising, it now becomes more profitable for people to build new homes. (Their costs haven't changed, but now they can sell the homes to speculators who are willing to pay a lot because they expect to sell the homes to the people who'll move in as the town becomes trendier.) So what you get is people building homes now in preparation for people wanting to move here years from now. Making homes available will cause home prices to go down, until the market is at equilibrium and homebuilders are no longer willing to build homes for the price that homebuyers are expected to be willing to pay. So in theory it all works out quite nicely. In practice, people who own the homes hate this because they like that the home they bought for $200k in the 90s is worth $2M now, so the lobby to get local governments to ban people from building homes. If there were enough homes that everyone who wanted to live there could, the prices of housing would come crashing down and homeowners would lose the bag they worked so hard to get (not).
  • tshaddox 5y ago
    My point isn't that people don't use their collectible homes to live in. There are undoubtedly some vacant homes used as collectibles, but that's not the whole problem. The point is that the value of the homes are largely divorced from the fact that people need homes to live in. The fact that home prices have skyrocketed recently (and certainly not simply due to population growth or a reduction in supply) ought to make this fairly clear. > Additionally it kind of strains belief that people are buying homes, paying property tax, etc. just because they like collecting them the way a kid likes collecting pokemon cards. More likely they'd buy a home because they expect home prices to rise and they'll be able to sell the home for more in the future. That second sentence is, of course, precisely what I'm talking about. Although that is also the same motivation, at least in my experience, of a lot of Pokemon card collecting. When I was in middle school, you could buy a Charizard for $100, and it wasn't because you could win back that $100 by playing that Charizard in a tournament, and it wasn't because you got $100 of value admiring the aesthetics of the card. Also of note, those Charizards now sell for tens of thousands of dollars, and it's still not being of their value in competitive play or their aesthetic value.
• thatfrenchguy 5y ago
  I mean, the US missed on building ~15m housing units in the last decade, we can bitch about airbnb all day, that doesn't make 15m housing unit appear.
• epistasis 5y ago
  This comment and analogy fundamentally misunderstands the problem here, though: > the value of homes seems to be almost entirely divorced from the fact that people need homes to live in. The value of homes is so high precisely because people need somewhere to live, desperately. The price is not disconnected from need, it's entirely because of need. And it's not that wealthy people are buying and hoarding homes. There's not some magic supply of 20-30% vacant unoccupied housing, there's desperately low vacancies, absolutely criminally low amounts of vacancies. But refusing to acknowledge the panacea of building new homes does serve the purpose of wealthy people who currently own home. Because they are not hoarding homes, they are hoarding land. They are hoarding access to the ability to build more homes, the homes that are desperately needed. And in high demand areas, every person that goes and opposes new homes, that opposes upzoning, is directly responsible for displacing however many people those new homes would have built. There is only one solution to high home prices, and that's building more. (Well, we could also institute strict border controls and price controls and completely destroy freedom of movement and access to jobs.) Downplaying the primacy and necessity of building enough homes for people that want to live in an area only fuels higher prices, more hoarding of land, and more exclusion. There's zero upside to saying "we don't need to build" except to enable further financialization of housing and concentration of wealth in homeowners.
  • jen20 5y ago
    > And it's not that wealthy people are buying and hoarding homes. This is exactly what buy to let landlords are doing.
    • epistasis 5y ago
      If they are renting them out, the homes are not being hoarded, they are being lived in. The real problem isn't a problem of vacant units, it's a problem of unbuilt units.
      • nitrogen 5y ago
        This results in a transient population and concentration of wealth, and reduced overall housing security. A mortgage doesn't go up by 10% every year, but my rent sure does.
• conradev 5y ago
  The problem is that you can charge rent on a house but not on medicine. The problem in the market is that buying real estate is the economically rational thing to do, because you get great returns on that capital, just like owning some amount of stock. The problem is primarily the structure of the market, and not the actions of individuals within it. We need a land value tax, and we need to make it easy to build new homes.