5 ms·

It's not price gouging (as the article references) if it's a competitive market and there's no supply shock. It's just the bid up price of the good. Landlords

It's not price gouging (as the article references) if it's a competitive market and there's no supply shock. It's just the bid up price of the good. Landlords and owners will be able to command high fractions of average incomes as long as there is no slack in the housing market. If you nationalize housing and hold prices low, then there will be supply shortages where some folks will not be able to get housing who would happily pay your price. (This is a fact, not conjecture, and is easily observed in any affordable housing lottery in the United States.) The only way to have low prices and also to satisfy the demand for housing (i.e. have each person who is willing to pay be allocated a unit) is to have slack in the market. No other solution will do it.

djbebs 5y ago
It's not price gouging if the market is uncompetitive and there is a supply shock, because there's no such thing as price gouging.
- asdfasgasdgasdg 5y ago
  I'm not aware of anyone who claims that the housing market is uncompetitive in the economic sense. There are a ton of independent sellers and a ton of independent buyers. Information is not exactly symmetrical but it's pretty close. These are the hallmarks of a competitive market.
  - mirntyfirty 5y ago
    I’d dispute the ton of independent buyers given the amount of bids placed by the top 10 corporations. Even if the bids are rejected it still has a large effect on pricing
    - deleted 5y ago
      [deleted]
    - gruez 5y ago
      >I’d dispute the ton of independent buyers given the amount of bids placed by the top 10 corporations. What's the ratio like? > Even if the bids are rejected it still has a large effect on pricing If they put in a bunch of bids that end up being rejected, doesn't that work in the opposite direction? If you're selling something on craigslist and you get spammed with a bunch of lowball offers, you're not going to think your widget is more valuable. If anything it's going to make you have second thoughts about your original price and make you want to lower it.
  - gruez 5y ago
    >> It's not price gouging if the market is uncompetitive and there is a supply shock, because there's no such thing as price gouging. >I'm not aware of anyone who claims that the housing market is uncompetitive in the economic sense. You guys aren't even talking about the same thing. The parent post is claiming that "there's no such thing as price gouging", period.
    - djbebs 5y ago
      Bingo
omgitsabird 5y ago
> If you nationalize housing and hold prices low, then there will be supply shortages where some folks will not be able to get housing who would happily pay your price. If you nationalize housing, wouldn't you also subsidize supply?
- lotsofpulp 5y ago
  Does not seem to be true based on all the waiting lists and shortages of government funded housing in the US.
  - 2fast4you 5y ago
    Assume a well funded program. Everyone gets a home at an affordable rate, and homes are built in anticipation of need.
    - AnimalMuppet 5y ago
      Why would you assume that? I would assume a program funded by Congress, and therefore a political football.
- Groxx 5y ago
  While that'd be able to guarantee housing on an "a home exists for every person in the country" level, it pretty often means sending people away from economically-healthy areas (which should have plenty of housing competition / are or will be built to capacity, because they're healthy). Subsidized housing in those areas is more expensive by far for someone, regardless of how it's done. Hence the wait-lists even where it exists; people want to live where they can be near what they need (be that work, medical, family, etc), not literally anywhere. The "literally anywhere" tradeoff may be worse than homelessness, or at least perceived to be.
- GauntletWizard 5y ago
  https://en.wikipedia.org/wiki/Consumer_goods_in_the_Soviet_Union https://en.wikipedia.org/wiki/Consumer_goods_in_the_Soviet_U... The short answer is: No, in a command economy, what happens is whatever the politicos demand.
nautilius 5y ago
It's price gouging because existing landlords and home owners can control the supply side and prevent growing competition through zoning laws that would balance the market.
- asdfasgasdgasdg 5y ago
  I'd have more sympathy for this narrative if there were clear voting blocs in favor of building housing among renters and opposed among homeowners. For example, if there weren't so many anti-housing pro-renter public personalities. But it doesn't seem that such clear delineations actually exist. Please let me know if I'm wrong.
  - 8note 5y ago
    Building houses doesn't mean that they won't all be bought up by land owners to add to their rental offerings. Generally home owners are pro regulation to avoid building larger stuff in their neighborhoods though. Zoning and Nimbyism are home owner driven.
  - jeromegv 5y ago
    Every time I see a project opposed in my neighborhood or within my city, this is my the local homeowner/neighborhood association. Not by a group of renters. There's also an endless amount of public consultation for every building that needs to be built. Toronto.
    - gruez 5y ago
      On the other hand, do you really expect someone with a 1 year lease to show up for a public consultation that might only affect things a few years down the road? There might even be a bias in the sense that anyone who bothers going to those meetings are boomers[1] who are retired and have nothing to do. [1] only half serious
  - nautilius 5y ago
    I am not sure I follow: there are many anti-housing, and pro-rent public personalities (I did not know "pro-rent public personalities" is even thing) who oppose more supply side competition that would lead to lower prices, but somehow also support renters? Frankly, someone who is "anti-housing but pro-renter" sounds simply like a landlord? PS: I am sure that's not what you intended, but I'd appreciate it if you avoided that condescending tone. My argument doesn't rely on your sympathy, and reframing an argument as narrative doesn't help either. It puts into doubt all good faith you may have in a discussion.
AussieWog93 5y ago
>If you nationalize housing and hold prices low, then there will be supply shortages where some folks will not be able to get housing who would happily pay your price. (This is a fact, not conjecture, and is easily observed in any affordable housing lottery in the United States.) Singapore solved this (and other issues) by creating a department that basically functions as the nation's largest property developer. https://en.wikipedia.org/wiki/Housing_and_Development_Board https://en.wikipedia.org/wiki/Housing_and_Development_Board Net result is about 80% of residents living in public housing. https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore
- pxmpxm 5y ago
  Owner-occupied public housing can be sold in a resale market, subject to restrictions. The government does not regulate prices within the resale market. https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore This is pretty much the exact opposite of the nationalize-all-the-things public housing concept, which presumably is why it's not devolved into the usual electoral capture/tragedy of the commons sh show
- asdfasgasdgasdg 5y ago
  I'm concerned about affordability, not the designation of the housing where people live. Even in Singapore, the rent is too damn high, at least as far as I can tell from brief googling. E.g. https://blog.moneysmart.sg/budgeting/cost-living-singapore/ https://blog.moneysmart.sg/budgeting/cost-living-singapore/
  - AussieWog93 5y ago
    Hmm, interesting. It seems like things are a little bit more complex over there than here, though, with subsidies given to married couples buying their first home and different tiers for PR/Citizens and everybody else. For example, my Googling seems to suggest that you could buy a 4BR in a new neighbourhood for under 350k. A new estate in Melbourne would be double that, with no public transport or other amenities.
abrownbear 5y ago
Note that the article itself distinguishes between short-term and medium-to-long-term solutions. In the short-run, rent-control simply shifts power away from landlords. In the long-run, to maintain supply, you need to build more housing through both re-zoning and social housing, as the article states.
- Diggsey 5y ago
  No, in the short term it takes money from new renters and gives it to existing renters: https://www.bbc.co.uk/news/business-47028342 https://www.bbc.co.uk/news/business-47028342 Furthermore, most policies of this nature are stupid because they assume that everything except the target of the policy (in this case rent) stays the same, and this is obviously not true. A lot of policies meant to help tenants involve moving additional costs onto the landlord... Who then increases the rent to cover them, and yet remains competitive because every landlord has the same costs imposed on them, and so makes the same decision. The article does point out some problems (like the high cost of moving as a renter causing an imbalance) and then instead of directly addressing those issues, leaps to a completely unrelated "solution". From personal experience with agents, there's a hell of a lot that could be done to make that process smoother and cheaper...
randbox 5y ago
The fraction of average income paid to landlords is partially due to the concentration of land ownership and political culture of the ownership class. Historically in 18th century rents were 1/3 of farm product in England, 1/2 of product in Milan, up to 3/4 product in China. Citizens in countries with low rents developed wealth quicker and in countries with high rents were quite poor.

djbebs 5y ago

It's not price gouging if the market is uncompetitive and there is a supply shock, because there's no such thing as price gouging.

asdfasgasdgasdg 5y ago
I'm not aware of anyone who claims that the housing market is uncompetitive in the economic sense. There are a ton of independent sellers and a ton of independent buyers. Information is not exactly symmetrical but it's pretty close. These are the hallmarks of a competitive market.
- mirntyfirty 5y ago
  I’d dispute the ton of independent buyers given the amount of bids placed by the top 10 corporations. Even if the bids are rejected it still has a large effect on pricing
  - deleted 5y ago
    [deleted]
  - gruez 5y ago
    >I’d dispute the ton of independent buyers given the amount of bids placed by the top 10 corporations. What's the ratio like? > Even if the bids are rejected it still has a large effect on pricing If they put in a bunch of bids that end up being rejected, doesn't that work in the opposite direction? If you're selling something on craigslist and you get spammed with a bunch of lowball offers, you're not going to think your widget is more valuable. If anything it's going to make you have second thoughts about your original price and make you want to lower it.
- gruez 5y ago
  >> It's not price gouging if the market is uncompetitive and there is a supply shock, because there's no such thing as price gouging. >I'm not aware of anyone who claims that the housing market is uncompetitive in the economic sense. You guys aren't even talking about the same thing. The parent post is claiming that "there's no such thing as price gouging", period.
  - djbebs 5y ago
    Bingo

omgitsabird 5y ago

> If you nationalize housing and hold prices low, then there will be supply shortages where some folks will not be able to get housing who would happily pay your price. If you nationalize housing, wouldn't you also subsidize supply?

lotsofpulp 5y ago
Does not seem to be true based on all the waiting lists and shortages of government funded housing in the US.
- 2fast4you 5y ago
  Assume a well funded program. Everyone gets a home at an affordable rate, and homes are built in anticipation of need.
  - AnimalMuppet 5y ago
    Why would you assume that? I would assume a program funded by Congress, and therefore a political football.
Groxx 5y ago
While that'd be able to guarantee housing on an "a home exists for every person in the country" level, it pretty often means sending people away from economically-healthy areas (which should have plenty of housing competition / are or will be built to capacity, because they're healthy). Subsidized housing in those areas is more expensive by far for someone, regardless of how it's done. Hence the wait-lists even where it exists; people want to live where they can be near what they need (be that work, medical, family, etc), not literally anywhere. The "literally anywhere" tradeoff may be worse than homelessness, or at least perceived to be.
GauntletWizard 5y ago
https://en.wikipedia.org/wiki/Consumer_goods_in_the_Soviet_Union https://en.wikipedia.org/wiki/Consumer_goods_in_the_Soviet_U... The short answer is: No, in a command economy, what happens is whatever the politicos demand.

nautilius 5y ago

It's price gouging because existing landlords and home owners can control the supply side and prevent growing competition through zoning laws that would balance the market.

asdfasgasdgasdg 5y ago
I'd have more sympathy for this narrative if there were clear voting blocs in favor of building housing among renters and opposed among homeowners. For example, if there weren't so many anti-housing pro-renter public personalities. But it doesn't seem that such clear delineations actually exist. Please let me know if I'm wrong.
- 8note 5y ago
  Building houses doesn't mean that they won't all be bought up by land owners to add to their rental offerings. Generally home owners are pro regulation to avoid building larger stuff in their neighborhoods though. Zoning and Nimbyism are home owner driven.
- jeromegv 5y ago
  Every time I see a project opposed in my neighborhood or within my city, this is my the local homeowner/neighborhood association. Not by a group of renters. There's also an endless amount of public consultation for every building that needs to be built. Toronto.
  - gruez 5y ago
    On the other hand, do you really expect someone with a 1 year lease to show up for a public consultation that might only affect things a few years down the road? There might even be a bias in the sense that anyone who bothers going to those meetings are boomers[1] who are retired and have nothing to do. [1] only half serious
- nautilius 5y ago
  I am not sure I follow: there are many anti-housing, and pro-rent public personalities (I did not know "pro-rent public personalities" is even thing) who oppose more supply side competition that would lead to lower prices, but somehow also support renters? Frankly, someone who is "anti-housing but pro-renter" sounds simply like a landlord? PS: I am sure that's not what you intended, but I'd appreciate it if you avoided that condescending tone. My argument doesn't rely on your sympathy, and reframing an argument as narrative doesn't help either. It puts into doubt all good faith you may have in a discussion.

AussieWog93 5y ago

>If you nationalize housing and hold prices low, then there will be supply shortages where some folks will not be able to get housing who would happily pay your price. (This is a fact, not conjecture, and is easily observed in any affordable housing lottery in the United States.) Singapore solved this (and other issues) by creating a department that basically functions as the nation's largest property developer. https://en.wikipedia.org/wiki/Housing_and_Development_Board https://en.wikipedia.org/wiki/Housing_and_Development_Board Net result is about 80% of residents living in public housing. https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore

pxmpxm 5y ago
Owner-occupied public housing can be sold in a resale market, subject to restrictions. The government does not regulate prices within the resale market. https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore This is pretty much the exact opposite of the nationalize-all-the-things public housing concept, which presumably is why it's not devolved into the usual electoral capture/tragedy of the commons sh show
asdfasgasdgasdg 5y ago
I'm concerned about affordability, not the designation of the housing where people live. Even in Singapore, the rent is too damn high, at least as far as I can tell from brief googling. E.g. https://blog.moneysmart.sg/budgeting/cost-living-singapore/ https://blog.moneysmart.sg/budgeting/cost-living-singapore/
- AussieWog93 5y ago
  Hmm, interesting. It seems like things are a little bit more complex over there than here, though, with subsidies given to married couples buying their first home and different tiers for PR/Citizens and everybody else. For example, my Googling seems to suggest that you could buy a 4BR in a new neighbourhood for under 350k. A new estate in Melbourne would be double that, with no public transport or other amenities.

abrownbear 5y ago

Note that the article itself distinguishes between short-term and medium-to-long-term solutions. In the short-run, rent-control simply shifts power away from landlords. In the long-run, to maintain supply, you need to build more housing through both re-zoning and social housing, as the article states.

Diggsey 5y ago
No, in the short term it takes money from new renters and gives it to existing renters: https://www.bbc.co.uk/news/business-47028342 https://www.bbc.co.uk/news/business-47028342 Furthermore, most policies of this nature are stupid because they assume that everything except the target of the policy (in this case rent) stays the same, and this is obviously not true. A lot of policies meant to help tenants involve moving additional costs onto the landlord... Who then increases the rent to cover them, and yet remains competitive because every landlord has the same costs imposed on them, and so makes the same decision. The article does point out some problems (like the high cost of moving as a renter causing an imbalance) and then instead of directly addressing those issues, leaps to a completely unrelated "solution". From personal experience with agents, there's a hell of a lot that could be done to make that process smoother and cheaper...

randbox 5y ago

The fraction of average income paid to landlords is partially due to the concentration of land ownership and political culture of the ownership class. Historically in 18th century rents were 1/3 of farm product in England, 1/2 of product in Milan, up to 3/4 product in China. Citizens in countries with low rents developed wealth quicker and in countries with high rents were quite poor.