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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
by 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 agoSo 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.
- credit_guy 4y agoIf you remove the artificial constraints on supply, then house prices will go down, and people will stop considering houses as an investment. The price of a house should go down in time, just like the price of a car goes down in time. Or the price of any other good.
- panda88888 4y agoI believe in most cases the structure value does go down (or at most stay constant), it is the value of the land that is going up.
- cudgy 4y agoLand should also go down (generally) in price though if the supply of buildable land goes up along with reduced supply restrictions. Of course, this only works in areas where there is abundance of buildable land near the desirable locations or nearby buildable areas that provide a decent substitute. Obviously, areas like the San Francisco peninsula and Manhattan where there is limited land due to surrounding water, land prices are likely to continue to go upward.
- credit_guy 4y agoManhattan is surrounded by water, but guess what, there are subways that go to Brooklyn, Queens, the Bronx, Jersey City and Hoboken. If your office is in downtown Manhattan, you can get there faster if you live in Brooklyn than if you live in Haarlem (which is part of Manhattan). In principle the supply side has natural constraints, but they are easily 2 times above what has been built until now. You can think of it this way: the population density of Manhattan is about 27000/km2. The entire NYC has a density of about 10000/km2, while Jersey city has 7000/km2.
- cudgy 4y agoWe agree. Those would be “nearby buildable areas that provide a decent substitute”.