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I live in a popular vacation destination. The locals didn't panic when wealthy multiple-home owners started buying up houses because ... their property values

I live in a popular vacation destination. The locals didn't panic when wealthy multiple-home owners started buying up houses because ... their property values were increasing! Now local business can't find workers, towns can't find employees all because housing is out of reach for the working and lower-middle class. Like boiling a frog, most people won't care until it's too late.

908B64B197 4y ago
> towns can't find employees all because housing is out of reach for the working and lower-middle class. Why not simply increase the supply?
- josefresco 4y ago
  It's a geographically limited space which limits sprawl and there's a lot of density laws and zoning that limit height. Lastly, NIMBYs block and delay affordable housing developments for a variety of reasons: "traffic" "change the character of the neighborhood" etc. Just getting "accessory dwelling" allowances was a battle for each town in the region.
- Jasper_ 4y ago
  The supply was fine before multi-home owners and property management companies took up most of it and jacked up the prices. Increasing the supply would only increase the wealth of the homeowners, it won't lower prices. Increasing the supply means building new buildings, and that often means building huge lots of five-over-ones, priced as luxury apartments in a growing market. The people building the new supply expect to make a profit, and in a market with growing prices, they aren't selling for less than what they think they can get out of it. We see this in big cities where vacancies are at an all-time high (aka a lot more supply), but prices aren't going down.
  - tayne 4y ago
    I do real estate for a living and this opinion is like a zombie that never dies no matter how many times it is proven wrong. You are putting forward that landlords acted collectively to increase the price of realestate. This is obviously wrong. The price of homes is determined by the market. It doesn’t matter who owns those homes, they are worth what the market says they are. Landlords do not control the market and even if they banded together in a conspiracy to increase the price of homes, they couldn’t because the vast majority of homes are owned by regular people. The high price of housing is caused by a shortage. If you don’t believe me then watch the 60 minutes segment about it. There’s no conspiracy. If there weren’t landlords building new stock it would be even worse. It’s so ironic that the hive mind spits in the face of the only people building new housing; the only people making the problem better.
    - jjoonathan 4y ago
      Nice try. Landlords and homeowners and the finance industry don't control the market... they just form a political bloc that controls zoning and taxes and transportation infrastructure and central finance, and these knobs in turn control the market. For some reason, they always vote for policies that pump their holdings. Can't imagine why. These policies do create problems, though, and it's not only reasonable to attribute the problems back to the people who voted for them, it's unreasonable to do anything else. "It's just the market!" is on par with "Look, a squirrel!" in terms of critical thinking.
      - tayne 4y ago
        Again, landlords aren’t a big enough group or coordinated enough to do anything. There’s no landlord lobby. Homeowners are a different story. It’s them who stop us from building more. But yea, it’s just the market and there’s no conspiracy and landlords are the last people to blame. Your comment on my cognitive abilities is a petty insult and is not allowed on this platform.
        satokema 4y ago
        "You don't need a formal conspiracy when interests converge." The landlords don't need to conspire - they know what's good for them and the politicians either own property themselves or are connected enough to landlords to help them out. None of these parties have an immediate interest in the lower class affording housing or maintaining the community fabric in the long term - especially the faceless incorporated ones.
  - 908B64B197 4y ago
    > We see this in big cities where vacancies are at an all-time high (aka a lot more supply), but prices aren't going down. Where?
  - nostrademons 4y ago
    But eventually the vacant apartments will get rented out because they're costing their owners money (in taxes, mortgages, maintenance) and not bringing any in, and you can't spend more than you make forever. Rents go down when landlords go bankrupt. That's what happened in 2009-2010. It took about 4 years after peak homebuilding, and 2.5 years after peak home prices, and about 12-18 months after the financial crisis started. Real estate tends to lag financial markets by about that time period. But it does happen - eventually markets respond to supply and demand, and firms that try to buck the trend get swept out of the market.
    - tmnvix 4y ago
      > But eventually the vacant apartments will get rented out because they're costing their owners money Owners make money leaving properties vacant all the time. In fact, in many markets capital gains have been much more significant than rental income for a long time now.
      - imtringued 4y ago
        In a lot of cities and countries you pay less taxes if your property is considered unsuited for rental or is just an empty plot of land. There is an incredible financial incentive to avoid providing housing as much as possible.
      - nostrademons 4y ago
        Not in a down market. Everybody's a genius in a bull market, where you make money just because your assets went up in value. In a bear market, where your assets go down in value, anyone without cash flow goes bankrupt.
        cudgy 4y ago
        A 13 year old would have made money in real estate over the last 5 years. One could have literally selected a property at random and made money, even one that was trashed.
  - jsmith45 4y ago
    Be careful with vacancy numbers. Some sources seem to include houses that should not be considered part of the housing supply. There are people who own vacant houses that they have zero interest in renting, and are not looking to sell. This could be a vacation home for a billionaire that they seldom get around to visiting, but want to have ready for them, and just have staff check in periodically. Renting it when not in use may be uninteresting (have to lock up their belongings, arrange some form of management company, have insurance concerns (if somebody realizes they are renting from a billionaire, they might get "hurt", hoping for a big quick payday) etc.) Similarly there are vacant houses own by speculators that have zero interest in renting out the unit, and are not currently looking to sell, since the market isn't right yet. This is among many other scenarios where vacant does not mean available to rent or purchase (well at least not at anything close to market rates. Some of these people may reconsider if offered way above market rates, but that generally only happens if a property is uniquely valuable to just that one buyer.)
    - 2fast4you 4y ago
      I think all of those cases should be reported as vacancies. Those are shelters going unused, that other people could be using. And I think they're relevant to the current discussion because those unused homes are taking up the extra supply, increasing price
- 1270018080 4y ago
  That's always the answer. For some reason it's makes some people on here angry, but the only long term viable solution to expensive housing is to end NIMBYism and draconian zoning laws. Anything else is a short-term half-measure, including affordable housing, rent controls, etc. If you want to actually solve the housing crisis, you just have to build more housing. It really is that simple.
  - lalaland1125 4y ago
    > For some reason it's makes some people on here angry It's because some people here own real estate and don't want to see YIMBY policies that would cause their rental income to fall
  - Geonode 4y ago
    Or maybe there's an ideal size for a given area based on geography and maybe many areas are already at that size.
    - imtringued 4y ago
      Stop inviting more people then, why do you hog all the jobs and then complain that people are coming to the place with all the jobs?
    - 1270018080 4y ago
      A single family home is never the ideal size for any amount of geography.
      - Geonode 4y ago
        A single family home is the ideal, period. Ideally with ten or more acres. Some people would increase density until we're all living in Blade Runner hoping it would make rents drop.
        1270018080 4y ago
        If your goal is for housing to be affordable for the average person, a single family home is never the ideal for any piece of geography. It just comes down to priorities.
oh_sigh 4y ago
I'm sure if they just paid a little bit more they would attract people to drive into the town from the assuredly cheaper nearby towns.
- kixiQu 4y ago
  It's useful to see what happens when this isn't possible: https://www.outsideonline.com/culture/essays-culture/how-to-save-a-ski-town-west-tourism-economy/ https://www.outsideonline.com/culture/essays-culture/how-to-...
- FuriouslyAdrift 4y ago
  That's called urban sprawl...
Inhibit 4y ago
Except that frogs, as (all? not a biologist) amphibians, have very good sensitivity to external temperature. Unlike humans.
- seanmcdirmid 4y ago
  It is just an expression. Frogs are actually smart enough to jump out of a gradually heated-to-boiling pot of water.
  - emptyparadise 4y ago
    Humans in a slowly boiling pot seems to be more accurate.
credit_guy 4y ago
I don't agree with your way of thinking. I know it's extraordinarily popular, but I think there is a different, more productive way to think about this. Think of houses sold to outsiders as a form of export. It's the best form of export: the good you are selling does not leave the premises, and the local community continues to collect taxes on that. The outsider does not consume government services as much as a local, so, what's not to like? Even better, when those outsiders visit, they spend much more on local businesses, because they are tourists. The more houses that are empty most of the year, the better for the local community. Because that's tax money that gets collected at very little cost for the local government. The problem, of course, is the artificial barriers to build more. People have this idea that the land is fully built up, there no way to build more. That is so far from true. I live in one of the most densely populated neighborhoods on Earth (17k people per km2). Recently a 67-story tower was built across the street from my building. The neighborhood does not feel any more or less crowded than before. If they want to build some more, they can build more. There is (almost) no lot that's not built up, but you can take down a 12-story building and erect a 50-story one. So, here's my thesis: let builders build as many residential units as they can (provided they are safe, or course). This way the house prices will come down to earth. People will be able to move from the rural areas to the big metropolitan areas, where the jobs are. They can't move right now because the housing costs are just so damn high. Such a migration would result in both increased GDP growth, and lower impact on the environment. Much lower. I used to live in a very dense city before (3600/km2) before I moved to my current incredibly dense neighborhood. My energy footprint went down maybe by a factor of 10. Easily. Grocery is across the street. Before it was a 15 min drive. Can you believe that? More affordable housing, higher GDP growth, lower environmental impact? There's no closer thing to a free lunch in our modern society.
- deleted 4y ago
  [deleted]
- cudgy 4y ago
  So your approach is to maximize tax revenue for the inefficient governments to hopefully use for some purpose? Seems very ineffective to have loads of empty houses. What other purpose should a residential home serve than to house people that need housing? The trend toward homes being investment and stores of value for the wealthy is contrary to the goals of building healthy communities that are not filled with ghost homes.

908B64B197 4y ago

> towns can't find employees all because housing is out of reach for the working and lower-middle class. Why not simply increase the supply?

josefresco 4y ago
It's a geographically limited space which limits sprawl and there's a lot of density laws and zoning that limit height. Lastly, NIMBYs block and delay affordable housing developments for a variety of reasons: "traffic" "change the character of the neighborhood" etc. Just getting "accessory dwelling" allowances was a battle for each town in the region.
Jasper_ 4y ago
The supply was fine before multi-home owners and property management companies took up most of it and jacked up the prices. Increasing the supply would only increase the wealth of the homeowners, it won't lower prices. Increasing the supply means building new buildings, and that often means building huge lots of five-over-ones, priced as luxury apartments in a growing market. The people building the new supply expect to make a profit, and in a market with growing prices, they aren't selling for less than what they think they can get out of it. We see this in big cities where vacancies are at an all-time high (aka a lot more supply), but prices aren't going down.
- tayne 4y ago
  I do real estate for a living and this opinion is like a zombie that never dies no matter how many times it is proven wrong. You are putting forward that landlords acted collectively to increase the price of realestate. This is obviously wrong. The price of homes is determined by the market. It doesn’t matter who owns those homes, they are worth what the market says they are. Landlords do not control the market and even if they banded together in a conspiracy to increase the price of homes, they couldn’t because the vast majority of homes are owned by regular people. The high price of housing is caused by a shortage. If you don’t believe me then watch the 60 minutes segment about it. There’s no conspiracy. If there weren’t landlords building new stock it would be even worse. It’s so ironic that the hive mind spits in the face of the only people building new housing; the only people making the problem better.
  - jjoonathan 4y ago
    Nice try. Landlords and homeowners and the finance industry don't control the market... they just form a political bloc that controls zoning and taxes and transportation infrastructure and central finance, and these knobs in turn control the market. For some reason, they always vote for policies that pump their holdings. Can't imagine why. These policies do create problems, though, and it's not only reasonable to attribute the problems back to the people who voted for them, it's unreasonable to do anything else. "It's just the market!" is on par with "Look, a squirrel!" in terms of critical thinking.
    - tayne 4y ago
      Again, landlords aren’t a big enough group or coordinated enough to do anything. There’s no landlord lobby. Homeowners are a different story. It’s them who stop us from building more. But yea, it’s just the market and there’s no conspiracy and landlords are the last people to blame. Your comment on my cognitive abilities is a petty insult and is not allowed on this platform.
      - satokema 4y ago
        "You don't need a formal conspiracy when interests converge." The landlords don't need to conspire - they know what's good for them and the politicians either own property themselves or are connected enough to landlords to help them out. None of these parties have an immediate interest in the lower class affording housing or maintaining the community fabric in the long term - especially the faceless incorporated ones.
- 908B64B197 4y ago
  > We see this in big cities where vacancies are at an all-time high (aka a lot more supply), but prices aren't going down. Where?
- nostrademons 4y ago
  But eventually the vacant apartments will get rented out because they're costing their owners money (in taxes, mortgages, maintenance) and not bringing any in, and you can't spend more than you make forever. Rents go down when landlords go bankrupt. That's what happened in 2009-2010. It took about 4 years after peak homebuilding, and 2.5 years after peak home prices, and about 12-18 months after the financial crisis started. Real estate tends to lag financial markets by about that time period. But it does happen - eventually markets respond to supply and demand, and firms that try to buck the trend get swept out of the market.
  - tmnvix 4y ago
    > But eventually the vacant apartments will get rented out because they're costing their owners money Owners make money leaving properties vacant all the time. In fact, in many markets capital gains have been much more significant than rental income for a long time now.
    - imtringued 4y ago
      In a lot of cities and countries you pay less taxes if your property is considered unsuited for rental or is just an empty plot of land. There is an incredible financial incentive to avoid providing housing as much as possible.
    - nostrademons 4y ago
      Not in a down market. Everybody's a genius in a bull market, where you make money just because your assets went up in value. In a bear market, where your assets go down in value, anyone without cash flow goes bankrupt.
      - cudgy 4y ago
        A 13 year old would have made money in real estate over the last 5 years. One could have literally selected a property at random and made money, even one that was trashed.
- jsmith45 4y ago
  Be careful with vacancy numbers. Some sources seem to include houses that should not be considered part of the housing supply. There are people who own vacant houses that they have zero interest in renting, and are not looking to sell. This could be a vacation home for a billionaire that they seldom get around to visiting, but want to have ready for them, and just have staff check in periodically. Renting it when not in use may be uninteresting (have to lock up their belongings, arrange some form of management company, have insurance concerns (if somebody realizes they are renting from a billionaire, they might get "hurt", hoping for a big quick payday) etc.) Similarly there are vacant houses own by speculators that have zero interest in renting out the unit, and are not currently looking to sell, since the market isn't right yet. This is among many other scenarios where vacant does not mean available to rent or purchase (well at least not at anything close to market rates. Some of these people may reconsider if offered way above market rates, but that generally only happens if a property is uniquely valuable to just that one buyer.)
  - 2fast4you 4y ago
    I think all of those cases should be reported as vacancies. Those are shelters going unused, that other people could be using. And I think they're relevant to the current discussion because those unused homes are taking up the extra supply, increasing price
1270018080 4y ago
That's always the answer. For some reason it's makes some people on here angry, but the only long term viable solution to expensive housing is to end NIMBYism and draconian zoning laws. Anything else is a short-term half-measure, including affordable housing, rent controls, etc. If you want to actually solve the housing crisis, you just have to build more housing. It really is that simple.
- lalaland1125 4y ago
  > For some reason it's makes some people on here angry It's because some people here own real estate and don't want to see YIMBY policies that would cause their rental income to fall
- Geonode 4y ago
  Or maybe there's an ideal size for a given area based on geography and maybe many areas are already at that size.
  - imtringued 4y ago
    Stop inviting more people then, why do you hog all the jobs and then complain that people are coming to the place with all the jobs?
  - 1270018080 4y ago
    A single family home is never the ideal size for any amount of geography.
    - Geonode 4y ago
      A single family home is the ideal, period. Ideally with ten or more acres. Some people would increase density until we're all living in Blade Runner hoping it would make rents drop.
      - 1270018080 4y ago
        If your goal is for housing to be affordable for the average person, a single family home is never the ideal for any piece of geography. It just comes down to priorities.

oh_sigh 4y ago

I'm sure if they just paid a little bit more they would attract people to drive into the town from the assuredly cheaper nearby towns.

kixiQu 4y ago
It's useful to see what happens when this isn't possible: https://www.outsideonline.com/culture/essays-culture/how-to-save-a-ski-town-west-tourism-economy/ https://www.outsideonline.com/culture/essays-culture/how-to-...
FuriouslyAdrift 4y ago
That's called urban sprawl...

Inhibit 4y ago

Except that frogs, as (all? not a biologist) amphibians, have very good sensitivity to external temperature. Unlike humans.

seanmcdirmid 4y ago
It is just an expression. Frogs are actually smart enough to jump out of a gradually heated-to-boiling pot of water.
- emptyparadise 4y ago
  Humans in a slowly boiling pot seems to be more accurate.

credit_guy 4y ago

I don't agree with your way of thinking. I know it's extraordinarily popular, but I think there is a different, more productive way to think about this. Think of houses sold to outsiders as a form of export. It's the best form of export: the good you are selling does not leave the premises, and the local community continues to collect taxes on that. The outsider does not consume government services as much as a local, so, what's not to like? Even better, when those outsiders visit, they spend much more on local businesses, because they are tourists. The more houses that are empty most of the year, the better for the local community. Because that's tax money that gets collected at very little cost for the local government. The problem, of course, is the artificial barriers to build more. People have this idea that the land is fully built up, there no way to build more. That is so far from true. I live in one of the most densely populated neighborhoods on Earth (17k people per km2). Recently a 67-story tower was built across the street from my building. The neighborhood does not feel any more or less crowded than before. If they want to build some more, they can build more. There is (almost) no lot that's not built up, but you can take down a 12-story building and erect a 50-story one. So, here's my thesis: let builders build as many residential units as they can (provided they are safe, or course). This way the house prices will come down to earth. People will be able to move from the rural areas to the big metropolitan areas, where the jobs are. They can't move right now because the housing costs are just so damn high. Such a migration would result in both increased GDP growth, and lower impact on the environment. Much lower. I used to live in a very dense city before (3600/km2) before I moved to my current incredibly dense neighborhood. My energy footprint went down maybe by a factor of 10. Easily. Grocery is across the street. Before it was a 15 min drive. Can you believe that? More affordable housing, higher GDP growth, lower environmental impact? There's no closer thing to a free lunch in our modern society.

deleted 4y ago
[deleted]
cudgy 4y ago
So your approach is to maximize tax revenue for the inefficient governments to hopefully use for some purpose? Seems very ineffective to have loads of empty houses. What other purpose should a residential home serve than to house people that need housing? The trend toward homes being investment and stores of value for the wealthy is contrary to the goals of building healthy communities that are not filled with ghost homes.