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There is also the Georgian explanation that rent seeking landlords will always increase rent to match any gains in production. Assuming that a landlord will alw

There is also the Georgian explanation that rent seeking landlords will always increase rent to match any gains in production. Assuming that a landlord will always charge the maximum they can that market will sustain, any increase in production will mean an increase in what the market can pay for housing, and with time, what the landlord can extract from tenants. It neatly explains how cost of living correlates to job opportunities, and how all the productivity gains from technology end up not increasing the general population wealth.

crate_barre 5y ago
Isn’t that where remote work kicks in but we’re too stupid to realize? If the tech people don’t need to concentrate in one area, good luck jacking up the prices to siphon off that wealth. Tech needs to create a box. Literally, a hurricane proof box that that plugs into plumbing. Drop it anywhere in the world and fucking live in it. It’s the same box for everyone, like the iPhone, iPhones are not more expensive in Bay Area or NY. All this nonsense over the fact that we all simply need to live in a box somewhere.
- seanmcdirmid 5y ago
  Tech people, even those working from home full time, have to contend with living somewhere nice with good schools and perhaps a place for their partner to work (if they can’t WFH also). Given that those places tend to correlate with expensive real estate, it doesn’t seem like WFH is going to do this work for us. Techies just don’t want to live in just boxes.
- grapeskin 5y ago
  I know people living in those famously cheap Midwest areas people online always propose as the obvious solution to avoid high rents. Rents even in nowhere areas have blown up recently. And remote work really won’t change rents much for normal people. People want to live where their family and friends are, where some good restaurants are, where some good weekend activities are, where some nice nature is an hour or two away, where a good hospital isn’t too far, and where grocery stores stock good food. Any one of these and landlords decide it’s okay to raise prices 30% a year. People theoretically have a choice, but every landlord everywhere is doing this. People leave one town with rapidly increasing rents and go to the next, and those landlords do the same while the people in the already expensive town never lower prices. There is no escape or alternative.
  - kevin_thibedeau 5y ago
    > Rents even in nowhere areas have blown up recently. Home owners are snapping up rentals to prepare to sell their property at market peak.
    - sokoloff 5y ago
      In a rising rates environment, house sale prices tend to fall (or rise much more slowly at best).
      - id02009 5y ago
        Really? Can you share more about this mechanism? I actually noticed someone opposite (are maybe it's the same mechanism) in the area I live in: House sale prices are rising like everywhere else, but rents stay mostly flat. I'd love to learn more about it.
        xdeepak81 5y ago
        Rent stayed flat because of the moratorium, not because of the demand. You will start seeing the rent increase as the leases are coming up for renewal, many places are already up for 20% rent increase.
        bombcar 5y ago
        House prices are roughly dependent on income which means dependent on monthly payments. Rents are even MORE dependent on income and it’s easier for renters to move, so rents often end up below the mortgage cost for a similar purchase.
        Ekaros 5y ago
        Take a fixed monthly payment, with lower rates the principal can go up. Thus house prices can go up. On other hand renters have the same pretty much fixed monthly payment. Rent's are not tied directly to value of property, but need to service the debt linked to property. Or equivalent one.
        5y ago
arvinsim 5y ago
Personally, I think one of the greatest mistakes of capitalism is to make property an investment asset.
- judge2020 5y ago
  Nobody made it an investment asset, it just happened as certain pieces of land grew more valuable for practical reasons. This is unavoidable unless you make it so you can't sell property, which would also mean you can't buy property - the government would need to manage peoples' needs based on family size and do the maintenance of maintaining property to the same level as landlords.
  - id02009 5y ago
    Ending up in a monopoly.
  - ethanbond 5y ago
    This is not true. We did make it an investment asset around the advent of agriculture. And there is a way to avoid it without freezing the market, which is called the Land Value Tax. As far as I know, no serious economist (from any ideological perspective) seems to actually dispute the functional fitness of this tax. https://en.wikipedia.org/wiki/Land_value_tax?wprov=sfti1 https://en.wikipedia.org/wiki/Land_value_tax?wprov=sfti1
- ashwagary 5y ago
  Bad money (like inflationary fiat currency) creates the need to use other assets to preserve wealth, which creates bubbles in those assets. Bitcoin advocates say good money (Bitcoin) will return the value of all other assets to their utility value because the best passive store of value will be the money itself (which due to a fixed supply would be deflationary). In that world, people would rather sell assets they don't use to accumulate bitcoin (or money x) because only useful activities will produce more yield than the money itself. This frees up housing, land, precious metals,... and all other resources that are artificially scarce due to hoarding for wealth preservation. I've heard people estimate, under a Bitcoin standard, the actual utility value of a house would be approximately 5-10% of current prices.
rdtwo 5y ago
That’s only possible if there’s is never enough housing for everyone. ITV does sort of work out because western building cannot be built for lower income folks as they cost too much. So low cost housing is essentialy all old end of life building
cbar_tx 5y ago
if you want to live in my house, and within the safe and comfortable legal framework of tenancy in a property lease contact, then you have to pay competitive market rates to live there. "Pay your fair share" to the "rent seekers" if it is a place to live that you are seeking...
- salawat 5y ago
  This falls apart when the rent seeker refuses to sell, or prices the sale out of the reach of first time buyers. I can't square a landlord running empty properties when the economy colludes to keep people from buying properties. Homes should not be straight up financial instruments.

crate_barre 5y ago

Isn’t that where remote work kicks in but we’re too stupid to realize? If the tech people don’t need to concentrate in one area, good luck jacking up the prices to siphon off that wealth. Tech needs to create a box. Literally, a hurricane proof box that that plugs into plumbing. Drop it anywhere in the world and fucking live in it. It’s the same box for everyone, like the iPhone, iPhones are not more expensive in Bay Area or NY. All this nonsense over the fact that we all simply need to live in a box somewhere.

seanmcdirmid 5y ago
Tech people, even those working from home full time, have to contend with living somewhere nice with good schools and perhaps a place for their partner to work (if they can’t WFH also). Given that those places tend to correlate with expensive real estate, it doesn’t seem like WFH is going to do this work for us. Techies just don’t want to live in just boxes.
grapeskin 5y ago
I know people living in those famously cheap Midwest areas people online always propose as the obvious solution to avoid high rents. Rents even in nowhere areas have blown up recently. And remote work really won’t change rents much for normal people. People want to live where their family and friends are, where some good restaurants are, where some good weekend activities are, where some nice nature is an hour or two away, where a good hospital isn’t too far, and where grocery stores stock good food. Any one of these and landlords decide it’s okay to raise prices 30% a year. People theoretically have a choice, but every landlord everywhere is doing this. People leave one town with rapidly increasing rents and go to the next, and those landlords do the same while the people in the already expensive town never lower prices. There is no escape or alternative.
- kevin_thibedeau 5y ago
  > Rents even in nowhere areas have blown up recently. Home owners are snapping up rentals to prepare to sell their property at market peak.
  - sokoloff 5y ago
    In a rising rates environment, house sale prices tend to fall (or rise much more slowly at best).
    - id02009 5y ago
      Really? Can you share more about this mechanism? I actually noticed someone opposite (are maybe it's the same mechanism) in the area I live in: House sale prices are rising like everywhere else, but rents stay mostly flat. I'd love to learn more about it.
      - xdeepak81 5y ago
        Rent stayed flat because of the moratorium, not because of the demand. You will start seeing the rent increase as the leases are coming up for renewal, many places are already up for 20% rent increase.
      - bombcar 5y ago
        House prices are roughly dependent on income which means dependent on monthly payments. Rents are even MORE dependent on income and it’s easier for renters to move, so rents often end up below the mortgage cost for a similar purchase.
      - Ekaros 5y ago
        Take a fixed monthly payment, with lower rates the principal can go up. Thus house prices can go up. On other hand renters have the same pretty much fixed monthly payment. Rent's are not tied directly to value of property, but need to service the debt linked to property. Or equivalent one.
      - 5y ago

arvinsim 5y ago

Personally, I think one of the greatest mistakes of capitalism is to make property an investment asset.

judge2020 5y ago
Nobody made it an investment asset, it just happened as certain pieces of land grew more valuable for practical reasons. This is unavoidable unless you make it so you can't sell property, which would also mean you can't buy property - the government would need to manage peoples' needs based on family size and do the maintenance of maintaining property to the same level as landlords.
- id02009 5y ago
  Ending up in a monopoly.
- ethanbond 5y ago
  This is not true. We did make it an investment asset around the advent of agriculture. And there is a way to avoid it without freezing the market, which is called the Land Value Tax. As far as I know, no serious economist (from any ideological perspective) seems to actually dispute the functional fitness of this tax. https://en.wikipedia.org/wiki/Land_value_tax?wprov=sfti1 https://en.wikipedia.org/wiki/Land_value_tax?wprov=sfti1
ashwagary 5y ago
Bad money (like inflationary fiat currency) creates the need to use other assets to preserve wealth, which creates bubbles in those assets. Bitcoin advocates say good money (Bitcoin) will return the value of all other assets to their utility value because the best passive store of value will be the money itself (which due to a fixed supply would be deflationary). In that world, people would rather sell assets they don't use to accumulate bitcoin (or money x) because only useful activities will produce more yield than the money itself. This frees up housing, land, precious metals,... and all other resources that are artificially scarce due to hoarding for wealth preservation. I've heard people estimate, under a Bitcoin standard, the actual utility value of a house would be approximately 5-10% of current prices.

rdtwo 5y ago

That’s only possible if there’s is never enough housing for everyone. ITV does sort of work out because western building cannot be built for lower income folks as they cost too much. So low cost housing is essentialy all old end of life building

cbar_tx 5y ago

if you want to live in my house, and within the safe and comfortable legal framework of tenancy in a property lease contact, then you have to pay competitive market rates to live there. "Pay your fair share" to the "rent seekers" if it is a place to live that you are seeking...

salawat 5y ago
This falls apart when the rent seeker refuses to sell, or prices the sale out of the reach of first time buyers. I can't square a landlord running empty properties when the economy colludes to keep people from buying properties. Homes should not be straight up financial instruments.