4 ms·

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 hou

by 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.

credit_guy 4y ago
If 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 ago
  I 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 ago
    Land 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 ago
      Manhattan 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 ago
        We agree. Those would be “nearby buildable areas that provide a decent substitute”.
- cudgy 4y ago
  Yes, supply side restrictions should be reduced. However, artificial demand must be dealt with as well, or we overbuild resulting in a bunch of empty homes. Another disadvantage to only dealing with the supply side is the prices of building materials will be unnecessarily high due to additional artificial demand from investors building homes as stores of value. Finally, supply side only solution creates a potential nonlinear event where investors dump once the homes start to depreciate. A seesawing which the Fed has bolstered with artificially low rates across many asset classes. Not necessarily a bad thing altogether for the housing asset class, but it seems inefficient from a resource standpoint.

by cudgy 4y ago

credit_guy 4y ago

If 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 ago
I 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 ago
  Land 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 ago
    Manhattan 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 ago
      We agree. Those would be “nearby buildable areas that provide a decent substitute”.
cudgy 4y ago
Yes, supply side restrictions should be reduced. However, artificial demand must be dealt with as well, or we overbuild resulting in a bunch of empty homes. Another disadvantage to only dealing with the supply side is the prices of building materials will be unnecessarily high due to additional artificial demand from investors building homes as stores of value. Finally, supply side only solution creates a potential nonlinear event where investors dump once the homes start to depreciate. A seesawing which the Fed has bolstered with artificially low rates across many asset classes. Not necessarily a bad thing altogether for the housing asset class, but it seems inefficient from a resource standpoint.