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Housing and land is a non-transable good, and therefore there should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding

Housing and land is a non-transable good, and therefore there should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income, and renting to a representative distribution of tenants so to prevent guettos. Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity. The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility, which could be improved by the setup described above. Many attempts at public housing failed because they just tried to provide housing for low-income people in separated and/or undesirable areas, with a predictable outcome. CMV

nickles 4y ago
> should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income This is great policy if you want to make housing unaffordable. When supply is less than demand, prices go up. Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. > Rent is the main detractor of disposable income which hurts the rest of the economy I’m happy (perhaps not quite the right word…) to pay rent. I don’t want to own property. It’s a large, illiquid investment with high transaction fees, carry costs, and concentration risk. My landlord takes all the risk of owning the property (prices don’t always go up after all).
- sokoloff 4y ago
  Is housing unaffordable in Vienna? If so, your mechanism might explain it. If housing is not unaffordable in Vienna, your explanation seems likely to be missing something.
  - spaniard89277 4y ago
    Housing is becoming unnafordable in Vienna again... because they didn't keep up with their program and now public offer is way behind of what should be.
- madaxe_again 4y ago
  Unless of course your builders wise up and work together to produce the bare minimum of housing stock required in order to keep prices rising, as they don’t want to flood with stock and reduce demand.
- madsbuch 4y ago
  > Those price increases incentivize builders to increase the housing stock Ahh yes, walking around in NY seeing building projects to increase the supply of housing in the 4th dimension where land is plentiful and the rivers are clean /s
  - nickles 4y ago
    > Ahh yes, walking around in NY seeing building projects to increase the supply of housing in the 4th dimension where land is plentiful and the rivers are clean /s Have you tried obtaining building permits in NYC? My understanding is that it’s not easy. If you don’t allow builders to construct new housing then you won’t get new housing, regardless of price level.
    - oezi 4y ago
      Free market advocates always find the next culprit why the market can't deliver. I can only speak of Berlin where land prices and construction prices have increased by demand so much, that new construction is coming in at 4x than 10 years ago (from 2k per sqm to 8k). I don't see how the market is really solving anything here.
      - nickles 4y ago
        > Free market advocates always find the next culprit why the market can't deliver. I advocate for the free market because it's been the most reliable way of elevating humans from subsistence levels of consumption and improving their quality of life. It's been the driving force in elevating billions of people from poverty over recent decades. I'd wager that most people, free market advocates or otherwise, would consider that a good thing. To be clear, there are cases where markets fail. In those cases, government intervention can actually produce more efficient outcomes. Consider the case of basic research. Private enterprises would have be foolish to pay for glowing worms and shrimp treadmills; there's just no clear payoff. But this seemingly silly research is critical to progress. For example, the research on glowing worms (GFP added to C. Elegans) ended up winning the Nobel Prize and is crucial for observing biological processes in living organisms. > new construction is coming in at 4x than 10 years ago... I don't see how the market is really solving anything here. It sounds like high prices incentivized builders to increase construction by 400% over 10 years? That seems like the price mechanism is driving an increase in housing supply, exactly as one would want when there's a shortage of housing.
- Victerius 4y ago
  Rents are already through the roof. If that hasn't incentivized builders to build enough housing to lower rents in places people want to live, why not go for the centralized solution? CMV The "let the free market take care of it; government intervention can only make it unaffordable" view is standing on extremely shaky legs today.
  - nickles 4y ago
    > The "let the free market take care of it; government intervention can only make it unaffordable" view is standing on extremely shaky legs today. The term “NIMBY” is commonly used to describe people who prevent new construction of housing. They typically use legal maneuvers (like requiring years of environmental review) to do this. By allowing this to continue, government intervention supports unaffordable housing.
- karatinversion 4y ago
  > Those price increases incentivize builders to increase the housing stock Of course this does not work if building new housing is illegal, in which case you might as well have the rent control.
  - nickles 4y ago
    > Of course this does not work if building new housing is illegal, in which case you might as well have the rent control. Or make it possible to build new housing. Rent control is a subsidy to existing residents to the detriment of people who would otherwise move to the area.
- spaniard89277 4y ago
  Yet it isn't working in most european cities. Price increases and capital holders always build behind the offer/demand curve so they get a better yield from it. Also, rent is always high enough to milk as much as possible from modal income, as demand is pretty inelastic. Also, read carefully, I don't want price control directly onto the private sector but the adminsitration controlling a big chunk of the offer.
  - nickles 4y ago
    > I don't want price control directly onto the private sector but the adminsitration controlling a big chunk of the offer. If the government sets prices for 40% of the market, it’s price control by definition.
    - spaniard89277 4y ago
      It doesn't work like that, because not all property nor customer is even. A luxury apartment is not competing with a 2 bedroom public housing apartment. And there will be floating population, there will people moving in, there will be people with special needs that public housing doesn't cover, etc etc Maybe such situation would actually push investors to be innovative with housing for once. If regulations allow that, of course, which is important too.
- foven 4y ago
  Yet somehow this doesn't seem to materialize in any meaningful way, the price of housing has only been going up exponentially and I'm sure builders are doing their best to build more but it's not getting any cheaper.
- ricardobeat 4y ago
  Why would housing become unaffordable if the state intervenes? The purpose is precisely to control affordability. Prices are controlled for social housing, and flexing supply allows you to influence the free market prices. Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified. Like what we are seeing in this news piece. I don't know exactly how it works here in the Netherlands, but as far as I understand the government leases land to the constructors at its own pace, with strict quotas on social housing, to let vs to buy ratio, and free-market properties. It isn't perfect (massive bubble on the free market right now) but seems to work well enough.
  - nickles 4y ago
    > Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified Is that the case in Detroit? I’d wager there’s substantially more supply than demand. > It isn't perfect (massive bubble right now) but seems to work well enough. If there’s a massive bubble then it seems like that system didn’t control prices.
    - ricardobeat 4y ago
      > If there’s a massive bubble then it seems like that system didn’t control prices. The bubble mostly affects new home buyers, which are the ones who need the least protection. Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. Everyone living in social housing still has a home, and won't be evicted so that another person can come in to pay 2x the rent. Seems pretty good to me. I don't know much about Detroit but it seems to demonstrate that the simple supply-demand model does not reflect reality. Prices should have dropped significantly, but instead it followed the same curve as the rest of the USA, with those $500 properties being a localized phenomenon.
      - nickles 4y ago
        > The bubble mostly affects new home buyers, which are the ones who need the least protection. So now you (or more generally the government) get to decide who is more deserving of appropriately priced housing? Why do new home buyers need less protection? > Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. This is precisely the problem with this policy. When price doesn’t feed through to the market, the market can’t adjust. People simultaneously argue that the free market doesn’t work while endorsing policies that prevent the market from working. > it seems to demonstrate that the simple supply-demand model does not reflect reality The population dropped from its peak by 1.2mm people. Prices subsequently fell so much that it was possible to buy houses for $500. That’s exactly what the supply/demand model would predict.
- f17 4y ago
  > Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. The issue, empirically, is that (a) we don't see the right housing being built, and (b) we don't see quality housing being built. We see a lot of high-end luxury units being built, but what we need are more 1- and 2-bedroom units within 20 minutes (preferably, by affordable public transit) of where people work. We also see a lot of large (and therefore expensive) but cheaply built McMansions that'll be falling down in 20-40 years, so the long-term picture of the housing stock is not improved. What we need is for the government to step in and build affordable housing as a floor at a controlled price ("commie blocks"). No one will be forced to live in one, of course, but they'll be an option; the rich can still buy property on the market if they're so inclined. > My landlord takes all the risk of owning the property (prices don’t always go up after all). If you own your house and control your geography (i.e., you'll never be forced to move due to economic inopportunity) then you have the truly risk-free position. Renters are at much higher risk (log transform, Kelly Criterion) than landlords, because real estate costs are such a high percentage of their budgets. The problem, of course, is that owning a house, while it gives you a zero beta to the housing market in theory, still does have the risks you described. For one thing, other people can do things that damage your house's value--both its subjective value as a place to live, and its objective market price--such as building highways and obstructing sun/view. The other issue is that, in today's hypercompetitive world where in decent employment every job search is national (and possibly international) it's impossible to control your geography... you could be laid off and forced to relocate to get your next position. So, you're not wrong in general. I think it's a wise financial decision for a young person to keep renting one's place--as opposed to renting money to buy a place--but I also think it's inaccurate to imply that landlords are taking more risks than they really are. It really gets on my nerves when rich people and employers talk about how they're "taking all the risk" and therefore deserve more, when the truth is that the poor (involuntarily) take all the risk, because each $100 means so much more to them.
- jahnu 4y ago
  Been this way in Vienna for many many decades and still it’s a very affordable city. So I dunno, I do believe this can go wrong if implemented incorrectly and has done in some cities, but it hasn’t here yet and looks fairly stable for the foreseeable too.
  - ipaddr 4y ago
    How many new units have been added over the last 20 years?
    - jahnu 4y ago
      Not sure exactly but the population has grown from 1.5 million in 2001 to 1.9 million in 2021 Some of that growth fit into existing stock but since the late 90s there has been a lot of new neighbourhoods built. The city generally plans ahead, even building public transport like metro out before it is completely needed. E.g. out to this new neighbourhood https://en.m.wikipedia.org/wiki/Aspern https://en.m.wikipedia.org/wiki/Aspern
  - namdnay 4y ago
    I think that’s more due to the relative attractiveness of the cities. London, NYC, Paris etc have become extremely expensive because they’re world cities, attracting huge amounts of people and jobs. That’s not really the case for Vienna, or Glasgow, or Riga etc
    - jahnu 4y ago
      In fact Vienna has had a huge population growth in the past 20 years
      - rr888 4y ago
        Fewer people than 100 years ago, compare that to Bay Area. https://en.wikipedia.org/wiki/Vienna#Demographics https://en.wikipedia.org/wiki/Vienna#Demographics
- Baloo 4y ago
  >Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). This is not reality though. Here in the UK our housing is in major crisis because people simply cannot afford the insane price increases. Pretty much everyone I know shares their living situation, on their own they would not be able to afford basic amenities. The guardian today published an article showing: >Average monthly rental payments were now 40% higher than they were 10 years ago, while typical mortgage payments for the same properties were up 13%. Landlords and property owners are hiking the prices way beyond reasonable value, in some parts of the country rent is up by over 20% in the last year alone. By your logic there should be an incentive for builders to increase the housing stock, but private enterprise aren't building anymore homes now than they were 10, 20, 30, 40, 50 years ago. We do however have a situation where the average mortgage is about £900 per month, whereas the average rent has skyrocketed to £1600 per month (£1100 outside of London, £2200 in London). Available rental stock is down 25%, with demand up 5%. It's great for property speculators, buy-to-let landlords and property developers, people are offering above asking prices simply to secure a home. >My landlord takes all the risk of owning the property (prices don’t always go up after all). Sure there is risk, but when you charge 30% more than you repay for the mortgage, while at the same time property prices rise 75% in 10 years, it's safe to say that the cash cow is being thoroughly milked for every last drop and as a result many people are suffering. Ultimately there shouldn't be 'risk', this mindset is a big problem. Homes are a fundamental, basic human need. Using them as an investment method, business model or means to hedge against inflation, is causing rampant speculation and quite honestly extorting people that have no other choice, exploiting vulnerable families that need a home. It should be an extremely tightly controlled market, with sufficient funding to ensure that quality & affordable housing is available for everyone.
  - wahnfrieden 4y ago
    - feet 4y ago
      Yea, and they're disagreeing. What are you trying to say?
- eatsyourtacos 4y ago
  >When supply is less than demand, prices go up Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more. The only reason the prices go up is because of greed basically- because people say "hey I can just charge more and people will pay more!". And there in lies the bullshit of the free market once again. It always benefits the people with money, who can afford to pay that amount more "just to get what they want". The last few years in particular have made me so tired of hearing about people talk about supply & demand like it is some unarguable hard scientific fact. It's not even close to that. It just represents how much people like to price gouge because "they can" >Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. And the following part of this is also just more bullshit. I'm not saying you are "wrong", but you say it as if that is how things have to work and there is no other alternative. Every word of what you said is based on greed and squeezing the most you possibly can from people. Please realize that.
  - nhooyr 4y ago
    There is a machine... Of thousands of workers. If those people can't make more money, they have less incentive to recruit more and build more housing stock faster... Such price signals are a basic element of the efficiency of the free market.
  - ElevenLathe 4y ago
    I largely agree, but if there is a scarce good (where there is less of it available than people want -- i.e. supply is less than demand) then we have to ration it /somehow/. The American way is by bidding up the price, so whoever is willing to pay the most money gets it. The Soviet way was by queuing, so whoever gets in line first gets it. We could also do it by lottery. We can come up with any number of schemes and most of them are "fairer" than market pricing, but they do all involve the "price" going up in some sense. Either you pay more in money, or in time, or in luck, but the price has increased because there are more people chasing the stuff than there is stuff to chase.
- ehnto 4y ago
  We're all very aware of how the economics should play out, but look around you, it's not working that way in a bunch of places. That's because houses are being used as investment vehicles, with rentals being thoroughly flogged because they know people have no choice but to pay. No amount of building will help if the value of the property is not intrinsically linked to the supply and demand of places to live for people who want to live there, but is instead linked or at least heavily influenced by what investors with increased buying capacity are willing to pay.
  - nickles 4y ago
    > No amount of building will help if the value of the property is not intrinsically linked to the supply and demand Building new houses is intrinsically linked to supply. When you build a house, that increases the supply of housing. NIMBYs oppose new construction precisely to prevent the value of their properties from decreasing.
    - ehnto 4y ago
      Sorry, of course that's correct. I was trying to articulate that the supply and demand, as a whole, is not currently a marketplace for people with housing to sell to those who want to be housed (in many places). It's a marketplace dominated by investors and landlords, and people who want to be housed are having to stretch their funds as far as they possibly can to keep up with the market currently being made by investors and landlords.
      - nickles 4y ago
        > people who want to be housed are having to stretch their funds as far as they possibly can to keep up with the market currently being made by investors and landlords. I'm sympathetic to the difficulties people are facing right now, and I've seen the stories about housing being purchased by investors. The issue is that the data doesn't seem to indicate a structural change in ownership [0]. Home ownership appears to have peaked at 69.4% in 2004 and now sits at 65.4%, the same level as in 1980. [0] https://fred.stlouisfed.org/series/RSAHORUSQ156S https://fred.stlouisfed.org/series/RSAHORUSQ156S
TOMDM 4y ago
> CMV Rent is high because the demand in large cities majorly out strips supply. All policies that attempt to address housing costs that don't increase supply are treating a symptom and not the underlying cause.
- ricardobeat 4y ago
  Increasing the supply alone does not counter the gentrification / ghetto effects the parent comment talked about, in fact it might amplify them. A gross oversimplification, but if you somehow make ten thousand new apartments available in Manhattan at $1k/month, they will eventually fill up with low-income tenants, which will make them undesirable. Pressure on all the existing $5K properties will remain the same.
  - mattzito 4y ago
    Why would they fill up with low income tenants? Why would that make it undesirable?
    - namelessoracle 4y ago
      Because low income anywhere (rental area or even just low income suburban areas) typically has a population that is less able to invest into their area (in time or money), and historically has shown that they seek an extractive relationship with their environment rather than invest in it.
      - feet 4y ago
        Are you joking? Poor people are the exploitative ones? That's just entirely false The entire basis of capitalism in the US is that the work of the poor is exploited by those with the capital to build factories and businesses which extract labor and resources from the poor people That's why they can't invest. You have it entirely backwards
        jimmaswell 4y ago
seydor 4y ago
Agreed. Housing is as basic a need as food. Either end food subsidies and make farmers rich, or deregulate housing
cies 4y ago
Totally agree. It is one of the perfect resources to extort people with. Unlike food the price of houses rarely drop to zero, and often go up. Like food, it is very essential to people. What you propose is a very socialist solution. I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal (as they calculated that's what housing would cost using cost-based-pricing).
- nickles 4y ago
  > I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal Fortunately that was the only criminal activity in the shining beacon of freedom and prosperity that was the USSR.
  - giraffe_lady 4y ago
    If we're going to dismiss every quality and strategy of a country because of its moral crimes then everything about the US is worthless through the same path. I don't think this is a useful way to approach any of these problems, and I'm sure neither do you, so why try to score cheap points this way.
    - nickles 4y ago
      > If we're going to dismiss every quality and strategy of a country because of its moral crimes My primary intention wasn't to refer directly to the morality of the USSR. Economically speaking, the USSR was a disaster, so I'm skeptical that we should implement the policies that quite literally destroyed a nation. But yes, the USSR was a murderous state led by men who were happy to kill tens of millions of people for personal gain. I find that morally reprehensible.
      - Jcowell 4y ago
        There’s a difference between being skeptical and being dismissive. You can be skeptical, but evaluate an idea by its merit Maybe it’s something that could be a good idea under the US economic conditions, maybe not.
ctvo 4y ago
> CMV Questions more than anything else: - How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building? - With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference? - Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?
- spaniard89277 4y ago
  > How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building? I don't know if I understand your question. We're talking about public housing, the owner is a public entity. For every building there are slots by income and they're filled by a FIFO system if you will. I know in the US this is more difficult but in most euro countries the administration can check what you earn yearly. It's semi-automated already. > With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference? The owner is the public housing company. No guarantee for anyone. There are different proposals, for me 20% for annualized income is simple & good enough, I wouldn't want to make it very complicated, but I'm sure it can be. > Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place? Overall supply did, but due to political factors the public housing system didn't expand at enough rate to keep up with demand.
  - akvadrako 4y ago
    FIFO is terrible since that often means waiting 15 years for a flat.
  - ctvo 4y ago
    I misunderstood and assumed all rentals in Vienna were under this system vs. only public ones. I do wonder if the city continues to provide supply, what the downward pressure on price will be for private units and if that eventually harms overall supply. I'm sure there's data on this somewhere, and I'll dig later today.
Spooky23 4y ago
New York City already has like 150k+ income based public housing units. It’s not ideal.
- spaniard89277 4y ago
  150k is nothing for NYC
  - Spooky23 4y ago
    That represents like a half million tenants. “Nothing” isn’t how I would describe it!
    - spaniard89277 4y ago
      It is nothing. For public housing to make sense it has to be a considerable amount of the supply, and be universally available, not only for low-income people.
      - klyrs 4y ago
        [1]> NYCHA has approximately 13,000 employees serving about 173,946 families and approximately 392,259 authorized residents. Based on the 2010 census, NYCHA's Public Housing represents 8.2% of the city's rental apartments and is home to 4.9% of the city's population. NYCHA residents and Section 8 voucher holders combined occupy 12.4% of the city's rental apartments. 1 out of 20 of the city's residents, 1 in 8 if you count voucher programs. That's far from nothing, but you're right, there's definitely room for improvement if you can cut through the red tape of nimbyism and corruption. [1] https://en.wikipedia.org/wiki/New_York_City_Housing_Authority https://en.wikipedia.org/wiki/New_York_City_Housing_Authorit...
      - trident5000 4y ago
        Its about the 70th percentile, above average. But you're not living an extravagant life.
  - trident5000 4y ago
missedthecue 4y ago
I don't want to live in the projects
- m_ke 4y ago
  Which of these "affordable" options are you too good for: https://housingconnect.nyc.gov/PublicWeb/search-lotteries https://housingconnect.nyc.gov/PublicWeb/search-lotteries Also recommend checking out this video about Vienna https://www.youtube.com/watch?v=41VJudBdYXY https://www.youtube.com/watch?v=41VJudBdYXY
  - missedthecue 4y ago
    You're telling me those buildings are own and run by the government? Those look like mandatory "affordable units" that by law must be built by private developers in new buildings.
- spaniard89277 4y ago
  No one forces you to do that.
  - missedthecue 4y ago
    I don't think anyone should have to be subjected to that type of treatment.
    - spaniard89277 4y ago
      I don't know what type of treatment you mean. I guess you're thinking on a guetto, which is adressed in my first message. Also, people apply voluntarily. You're free to live in a private-owned rental
    - noelherrick 4y ago
      The alternative for many is worse - many roommates, incredibly long commute, or homelessness. Remember that Googler who lived in his car? (https://www.businessinsider.com/google-employee-lives-in-truck-in-parking-lot-2015-10?op=1 https://www.businessinsider.com/google-employee-lives-in-tru...)
simonsarris 4y ago
> preferably by doing the same as Vienna have 2.25 million population before WW1 and then decline in population for almost 100 years? They still haven't recovered (1.89m). It may be an enormous mistake to read into their allocation policy because they've simply had a very easy time allocating so far. St Louis population has declined for 70 years. It is very affordable. It's just not hard to accomplish affordability like that.
- spaniard89277 4y ago
  Vienna suffered and suffers housing price inflation like any other european city. In world wars not only people dies, but housing units are destroyed too. Also, the point of the social housing in vienna is not only the dimension of it, but how they do it. The design, the demographics, etc. There's a clear distinction between their program and the myriad of commieblocks in other countries that become low-income guettos to sink public money. Public housing done right is more than just building dense, putting poor people in it and be done with it. That's a recipe for disaster.
cmurf 4y ago
Empty property tax at up to 1000%. For full time occupied properties, a sliding scale rebate toward rent based on income.
- SamoyedFurFluff 4y ago
  New York City has very little housing available. It’s not an issue of empty properties.
  - pclmulqdq 4y ago
    You would be surprised at how much commercial real estate is vacant in NYC. If that could be converted to housing, it would alleviate a lot of problems. Also, the way commercial buildings are mortgaged is crazy - major landlords often have 0% down payments (claiming that their ability to attract rental tenants will add 20% equity overnight), and keep the building vacant rather than lowering rents to maintain the "valuation" of the building. Empty units can have their cost tacked on to the end of the mortgage. At some point, the bill comes due, but it takes a long time.
    - SamoyedFurFluff 4y ago
      Converting a commercial space into residential (assuming it’s zoned that way to begin with) isn’t trivial. We’re talking massive plumbing and HVAC system changes, for example. I do agree if empty commercial buildings can be gutted and renovated as residential it is one way to introduce more housing into the market; I don’t think it’ll be much faster or cheaper than building from scratch though.
      - pclmulqdq 4y ago
        I agree, but the way those mortgages are handled, they incentivize buildings to have a lot of long-term (5- and 10-year) vacancies, which means that it doesn't have to be particularly fast to convert them.
treeman79 4y ago
New York did this. Rent control. It’s why they ended up with tons of slums. We have tons of land In the US. Lots of people leave New York for cheaper places.
- shmatt 4y ago
  I think a lot of office workers would love that idea, except they were told in the past ~3 months its back to the NYC office or they're fired. The limited supply (3 years worth of eviction backlog) + office mandates hitting this spring are exactly why prices went crazy seemingly overnight after a pretty calm 2021
bleuchase 4y ago
> Housing and land is a non-transable good, and therefore there should be heavy state intervention on it That's a bold claim. What led you to believe that's the case? And what is a "non-transable good"?
- feet 4y ago
  I think it might help to find out the definitions of terms before assuming the statement is wrong
  - abduhl 4y ago
    Non transable is not a term that anyone uses and therefore is not one that has a definition outside of this thread. Which is why GP asked what it is, smart ass.
    - feet 4y ago
      And the person I'm replying to, in the order of their statements and questions, first assumes that it is a bold claim and after that decides they don't understand the statement they're replying to. It's backwards
      - mym1990 4y ago
        Must be fun spending the whole day looking for technicalities to address.
        feet 4y ago
        No, I just understand how to make valid criticisms. First step before you can criticize is to understand what you're criticizing
        abduhl 4y ago
        Apparently not because you didn't even understand what the GP was calling a bold claim (it wasn’t land being nontransable).
theropost 4y ago
I agree 100% - on top of all that, the current housing strategy reduces the mobility of the workforce, so it becomes more difficult to move skilled workers from one region to another. On top of that, being generally considered as a persons most valuable asset, almost no-one wants "affordable housing" in there area, as it would bring down the value of their most valuable asset. We need to start considering people as the valuable asset, and not the house they live in.
throwaway0a5e 4y ago
>and renting to a representative distribution of tenants so to prevent guettos Sounds like a creative way of saying "make sure the poors have enough rich people near them that they feel compelled to stay in line and keep a low profile." There are few things that make apartment living worse than having neighbors who think your standards of behavior are too low and who you have to avoid pissing off.
kshahkshah 4y ago
IMO the heavy state intervention should be massive capital investment into FAST public transportation infrastructure. Make areas further away from city centers viable for commuting and the problem gets largely addressed.
- woodruffw 4y ago
  Ironically, this was what NYC (technically, pre-NYC) did over 100 years ago -- there was a thriving network of streetcars in Brooklyn[1], which overlap almost exactly with neighborhood density. We then tore them up, leaving just the subway lines and a bus system that traces the vestiges of the old streetcar lines. Streetcar suburbs[2] not only work, but are imminently sustainable compared to other forms of urban/suburban extension. [1]: https://en.wikipedia.org/wiki/List_of_streetcar_lines_in_Brooklyn https://en.wikipedia.org/wiki/List_of_streetcar_lines_in_Bro... [2]: https://en.wikipedia.org/wiki/Streetcar_suburb https://en.wikipedia.org/wiki/Streetcar_suburb
huevosabio 4y ago
Housing =/= Land. But our policies which heavily kneecap our ability to build more [0] make it such that Housing starts behaving like Land. The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build. I personally think that achieving affordable housing prices via mainly government intervention is not a sustainable approach. You end up consuming both economic and political capital. A more sustainable approach sets clear, transparent rules that specify under what conditions do you get to build by right. Then 90% gets satisfied by the market, the remaining 10% can be addressed by government investments, if needed. The only sustainable way to get affordable housing is when the market price is affordable. Land, on the other hand, is another story. There is strong economic evidence that many of the observations of Henry George [1] are spot on: Land rents tend to take a massive toll in the economy, cause inequality and misery, all without requiring their owners to provide any added value. The proposed solution, again with solid economic fundamentals, is to tax the unimproved value of land at 100%. Henry George further argues that the proceeds should be equally divided among citizens, a citizen dividend if you will. [0] e.g. it takes 4 years on average to get a new building permit in SF, 90% of the city is zoned for single family housing, any neighbor etc. [1] https://www.gameofrent.com/ https://www.gameofrent.com/
- m_ke 4y ago
  I'm no NIMBY but places like NYC will never be able to build enough to outpace demand.
  - eloff 4y ago
    And yet it works in Tokyo, a city of almost double the population?
    - deleted 4y ago
      [deleted]
    - Zxian 4y ago
      New York City already has a significantly higher population density than Tokyo (~11,300/km2 vs ~6,300/km). It's easier to develop more housing when you have more land.
fartsucker69 4y ago
Property owners providing almost no value is just factually wrong. Their function is similar to insurance. You pay rent to live somewhere because you don't want to take the risk or can't get the loans to buy a property yourself. And it costs real money and time (i.e. real resources) to build those homes and maintain them. In return property owners (or insurance runners) can get rich off your monthly payments as well as the inherent value of the property (/insurance company), but because of risk of ruin, opportunity cost for other investments and other related phenomena, it can mathematically be a total win-win for both sides. What everyone complaining about property prices also always seems to forgoe are two things: First, people are clearly able to afford them or the prices wouldn't go higher. The myth that property investors buy homes on mass and don't rent them out which supposedly creates this pricing hike is idiotic. All of these big cities with insane rents have very low vacancy rates compared to the national average. In almost all of these places where people complain about rent, we are talking about big popular places where everyone wants to go even though there are tons of realistic alternatives all around the country. The situations where it's economically totally necessary for you to move to an expensive place but at the same time you can't afford the rent is so rare as to be virtually non-existent. Even the idea that people are displaced from their homes is an issue on a smaller scale than people make it out to be. That's because income in those expensive places is much higher than in cheaper places. There are people displaced from their homes, but that's because of poverty and other aspects of gentrification that are not necessarily tied to rent.
- enriquto 4y ago
  > it costs real money and time to build those homes and maintain them. As a renter of a dangerously unmaintained property, whose owner has never worked because he inherited a bunch of apartments, I can only laugh hysterically at your ridiculously-over-the-top sarcasm.
  - noptd 4y ago
    This comes back to scarcity as the root cause. If there were an abundance of alternatives in the same price range, shitty landlords couldn't get away with letting their properties deteriorate to such a condition. The deadbeat landlord problem would solve itself once we build ourselves out of scarcity.
throwaway6734 4y ago
Lol just tax land
dukeofdoom 4y ago
> property owners provide almost no value I think you have no idea how much things break and need fixing. I have a friend that owns a few houses that he rents out, and it's a part time job just keeping up with fixing things. Between them, there's a few thousand items that can and do break and need maintenance. He would not be profitable if he hired out to fix things. Outside Labour can easily be $100/hour and if you need something even a little bit more serious its easily $1000/day. This is the hidden cost of manufacturers making things as cheaply as possible, and often out of plastic. Property taxes and utility bills and problem with tenants. Navigating disputes, noise complaints, missed rent, move outs and move ins, signing new lease agreements, landscaping, leaky plumbing, damaged flooring, overgrown trees, it's endless. It's a part time job.
- rcpt 4y ago
  That's property management, not property ownership. Maintaining and improving structures is work. Nobody disagrees with that. Simply owning the thing is not work. Churchill said it best: https://www.landvaluetax.org/history/winston-churchill-said-it-all-better-then-we-can https://www.landvaluetax.org/history/winston-churchill-said-...
dionidium 4y ago
> and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity. Property of course requires maintenance and management, so the sleight of hand here is to define away all those aspects of ownership so that by definition all that's meant by "landlord" is "old guy who cashes checks." But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass, somebody has to pay the taxes, somebody has to -- yes -- collect and cash the checks. Somebody has to respond to tenant requests and emergencies. Somebody has to advertise the property when it's vacant. Someone conducts showings and screens tenants. And, maybe most important, somebody assumes the risk of a bad tenant or a down market or a declining neighborhood. And so on and so on. Whether all this is done by the owner personally or hired out is irrelevant. There's no reason to believe government can perform these functions better than private owners in a market. A simple proof that landlording is not free/easy money is to realize that millions of middle- and upper-middle class Americans who -- if not today, certainly 5 years ago before this most recent run-up in prices -- could, if they wanted to, afford to buy property and become landlords, but they mostly do not do it. And since nobody turns down free/easy money, landlording simply cannot be free/easy money. QED.
- nix0n 4y ago
  > But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass In many buildings these things are simply not done.
  - dionidium 4y ago
    Now that I've said some nice things about landlords, I'll say something less flattering: bad landlords find convenient cover in supply-constrained markets. Which, of course, is what we have. If you want to stick it to lazy, cheap, do-nothing landlords, then let somebody build a brand-new apt complex right next door to their crappy units and see how long they can get away with their insouciance in that kind of market.
  - lucaspm98 4y ago
690328535p5 4y ago
I don't understand why you think state intervention would actually help. The state has no incentive to solve the problems you are talking about.
supercanuck 4y ago
Very high quality comment and very insightful!
lazyier 4y ago
This post is stupid beyond all measure. One of the principal reasons Manhattan rent is so ridiculous is because of state intervention. More intervention, the worse it is going to get. > Rent is the main detractor of disposable income which hurts the rest of the economy, This is a silly statement. Rent is part of the economy. Paying rent doesn't damage the economy anymore then paying for food or paying your electrical bill. > and property owners provide almost no value, They provide and maintain their property. > but to provide access to housing for people who has no capital for it, And for a wide variety of other reasons. Not everybody wants or is a place in their life were massive permanent investment makes sense. > which is service that could be perfectly provided by a state entity. Absolutely not.
- ethanbond 4y ago
  Singapore provides that service pretty successfully.
wowokay 4y ago
Housing/rent is a part of your disposable income. Some people live in expensive places because they want too, but no one is required to live in an expensive place because they have too. I agree in the idea of affordable housing but I don’t think it’s fair to promote sweeping changes because people decide to live in expensive cities like NYC.
- giraffe_lady 4y ago
  A lot of people are born in nyc you realize? And in other expensive places? Also if you evict all the poor people from the expensive cities, who do you think is going to work the jobs that make it possible and desirable for the rich people to live there? By what mechanism could this possibly work other than exploitation and coercion. I realize that's the current status quo, but do you? Do you understand that's what you're endorsing here with this argument of "poors gtfo?"
kriops 4y ago
> (...) there should be heavy state intervention (...) This has been tried so many times throughout different cultures and time periods, and by different means. It will not benefit whoever is actually living on the properties, but will detract from their situation. Economics in One Lesson by Henry Hazlitt has several concrete examples of attempted interventions, and is written to give a basic intuition on why this happens (Spoiler: Opportunity costs). The only permanent solution is just to build more buildings, or at a political level simply making it easier to build new buildings, which directly increases supply and thus causes the lowering of prices. This makes perfect sense when you think about it: There are not enough buildings, so we need to have more buildings.
- eej71 4y ago
  It continues to be disappointing to see so many people turn to state power as a solution to the problem of scarcity. Scarcity is solved through production not political power.
  - deleted 4y ago
    [deleted]
  - rcpt 4y ago
    Can't produce more land. Best we can do is tax people for hoarding it
    - kriops 4y ago
      Best we can do is certainly not increase the cost of land, and thus increase the required price of rent/housing to break even. Less regulatory obstacles to increase supply, i.e. build housing, is the correct answer.
      - rcpt 4y ago
        Land Value Tax would decrease the cost of land as it makes land speculation less attractive. People won't be willing to bet on much on real estate if increased prices come with a tax penalty.
DeathArrow 4y ago
>The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility, Maybe some groups of people don't want to live together with other groups of people? Different people living in different parts of the city is just natural evolution. Why should the state force them to live together? And why should the state tell you where to live? Why should the state be involved in your private life at all?
- dwater 4y ago
  > Different people living in different parts of the city is just natural evolution. A claim like that needs supporting evidence. I see no reason why segregation among different members of a single community is natural. > Why should the state force them to live together? Because segregation breaks down the social bonds in a community, which is bad for the social fabric, which is bad for the community's ability to live and work together, which results in the breakdown of that community. https://www.bloomberg.com/news/articles/2013-05-03/why-segregation-is-bad-for-everyone https://www.bloomberg.com/news/articles/2013-05-03/why-segre... > And why should the state tell you where to live? Why should the state be involved in your private life at all? The state does not exist in Libertarian theory. The state already has numerous rules about your private life. You could make the same arguments against zoning and building codes.
  - noptd 4y ago
    >A claim like that needs supporting evidence. I see no reason why segregation among different members of a single community is natural. Considering that in-group-out-group psychology has been humanity's evolutionary default for tens if not hundreds of thousands of years, I'd say the burden of evidence is on anyone claiming the contrary.
rcpt 4y ago
Vienna was only able to pull that off after a devasting war left nearly everyone poor. It's not clear that the US could seize 40% of rentals in Manhattan without starting a revolution. To your other points yes. Land Value Tax now! There's simply no good reason for why we're all taxed so heavily on our labor while land speculators get away for pennies.
DeathArrow 4y ago
>Many attempts at public housing failed because they just tried to provide housing for low-income people in separated and/or undesirable areas, with a predictable outcome. So the taxpayers should pay so the people with low income or no income can live iny Manhattan? Why not also provide them with expensive cars and exotic vacations?
- giraffe_lady 4y ago
  > So the taxpayers should pay so the people with low income or no income can live iny Manhattan? Yes. It's a city not a luxury resort. If people are to work all kinds of jobs at all levels of income there, then people at all income levels should be able to live there as well. This mechanism accounts for that. > Why not also provide them with expensive cars and exotic vacations? Maybe they should idk. Seems completely unrelated though and no one is arguing for that here so I don't know why you want to or why I should.
  - teakettle42 4y ago
    > If people are to work all kinds of jobs at all levels of income there, then people at all income levels should be able to live there as well. Why should taxpayers subsidize employers unwilling to pay a living wage?
    - giraffe_lady 4y ago
      Yes I agree we should force employers to pay living wages. They're definitely closely related issues but I don't know that you can completely solve for one in terms of the other though.
  - pb7 4y ago
    Manhattan isn’t a city, it’s the most expensive borough of a city. They don’t need to live there.
    - giraffe_lady 4y ago
bobthechef 4y ago
> charging according to income Perhaps only as part of a way to ease those with low income. But this is no good in general. You are charging one person more than another for the same good simply because of higher income. This is price discrimination and is unjust. Usury can work in an analogous way, such as when someone raises prices to exploit increased need even though the cost of production of the good sold is the same. > property owners provide almost no value They provide shelter and must maintain that property. Problems occur when they begin to charge unjustly for services rendered. This calls for regulation, not state ownership. No need to go to extremes. > The current setup creates guettos [sic] by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility Social mobility isn't the only consideration and not the summum bonum and it exists precisely to allow people to sort themselves into social classes (otherwise, why have social mobility in the first place). People of a given social class tend to live closer to each other because they share class cultural similarities, concerns, and affinities. That doesn't mean there is no contact between people of different classes, but the solution isn't to mix everyone up into a uniform mass. There's a middle way between the hermetically sealed ghetto and uniform distribution, and it doesn't involve violating the principle of subsidiary. Ultimately, it is poverty that is a problem, not having a lower or higher income as such.
New_California 4y ago
I already had communism and state-owned housing in my country, so no thanks! Never again. You are welcome to move to a state-managed economies though.
KKKKkkkk1 4y ago
Hi, what is a non-transable good? You're using a non-dictionary word to justify a pretty radical policy, so I'm curious.
deleted 4y ago
[deleted]
kortilla 4y ago
> Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost no value, Have you considered that housing might actually be valuable? If it didn’t provide value, why do you think that Vienna seized so much of it to give out to its citizens? Maybe try to find a different way to phrase whatever you’re trying to say. Assuming you’re referring to property owners getting by doing nothing. That’s false unless they are a slumlord. Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna? > The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas This is not how it works in the US for the last 50 years or so. Most places force every new building to include low income units.
- 7steps2much 4y ago
  > Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna? Rent from another landlord mostly. Vienna has close to two million people (give or take some), however only around 500.000 of those live in buildings owned by the city [0]. Those are 1800 buildings by the way, definitely a lot but not unbelievably massive. Compared to some private companies, such as Vonovia the city of Vienna is just another big player, but by no means massive enough to actually be a monopoly or anything. It is true that they of course hold a lot of the supply in Vienna itself, housing a quarter of the population, but that still leaves three quarters not living in any of those buildings. It's easy enough to not live in apartments owned by the city if you don't want to. [0]: www.wienerwohnen.at/wiener-gemeindebau/wiener-gemeindebau-heute.html (Source in German)
  - kortilla 4y ago
    > Rent from another landlord mostly. So the other landlords are providing some value the city is not. That’s my point.
    - 7steps2much 4y ago
      You could argue that they are providing the same value as the city is (housing). It's not like this is some kind of either or situation. The city is providing value, approximately 500.000 housing units worth of value. Private landlords provide value, the remaining one point something million units worth of housing. You could of course replace either provider, it doesn't make a practical difference whether you are renting from the city or a private landlord, at least not if we are looking at this from a top down perspective with hundreds of thousands of units. But the whole point of the city buying into the market was to create competition and ensure that the property market isn't used as an investment/doesn't pay as great as another investment. So with that in mind the current system is actually kind of what they were aiming for.
newaccount2021 4y ago
zjaffee 4y ago
A huge percentage of the people living in NYC live in income restricted housing, it's in the millions of people.
closeparen 4y ago
Government intervention reflects popular will, and The People will themselves a housing crisis. They don't like change, they don't like neighbors, and they certainly don't like neighbors from different income levels than their own. The New York and San Francisco housing markets might be better governed by the Viennese electorate, but that's not on the table. They are governed by their own electorates, badly, and these are the results. Increasing the intensity of that governance will only amplify their already-revealed and already-governing preference that their cities be exclusionary museum pieces. Put another way, if you accept that housing scarcity is bad, going to the public and saying "How do you want housing in your city to be?" is only going to make it worse.

nickles 4y ago

> should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income This is great policy if you want to make housing unaffordable. When supply is less than demand, prices go up. Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. > Rent is the main detractor of disposable income which hurts the rest of the economy I’m happy (perhaps not quite the right word…) to pay rent. I don’t want to own property. It’s a large, illiquid investment with high transaction fees, carry costs, and concentration risk. My landlord takes all the risk of owning the property (prices don’t always go up after all).

sokoloff 4y ago
Is housing unaffordable in Vienna? If so, your mechanism might explain it. If housing is not unaffordable in Vienna, your explanation seems likely to be missing something.
- spaniard89277 4y ago
  Housing is becoming unnafordable in Vienna again... because they didn't keep up with their program and now public offer is way behind of what should be.
madaxe_again 4y ago
Unless of course your builders wise up and work together to produce the bare minimum of housing stock required in order to keep prices rising, as they don’t want to flood with stock and reduce demand.
madsbuch 4y ago
> Those price increases incentivize builders to increase the housing stock Ahh yes, walking around in NY seeing building projects to increase the supply of housing in the 4th dimension where land is plentiful and the rivers are clean /s
- nickles 4y ago
  > Ahh yes, walking around in NY seeing building projects to increase the supply of housing in the 4th dimension where land is plentiful and the rivers are clean /s Have you tried obtaining building permits in NYC? My understanding is that it’s not easy. If you don’t allow builders to construct new housing then you won’t get new housing, regardless of price level.
  - oezi 4y ago
    Free market advocates always find the next culprit why the market can't deliver. I can only speak of Berlin where land prices and construction prices have increased by demand so much, that new construction is coming in at 4x than 10 years ago (from 2k per sqm to 8k). I don't see how the market is really solving anything here.
    - nickles 4y ago
      > Free market advocates always find the next culprit why the market can't deliver. I advocate for the free market because it's been the most reliable way of elevating humans from subsistence levels of consumption and improving their quality of life. It's been the driving force in elevating billions of people from poverty over recent decades. I'd wager that most people, free market advocates or otherwise, would consider that a good thing. To be clear, there are cases where markets fail. In those cases, government intervention can actually produce more efficient outcomes. Consider the case of basic research. Private enterprises would have be foolish to pay for glowing worms and shrimp treadmills; there's just no clear payoff. But this seemingly silly research is critical to progress. For example, the research on glowing worms (GFP added to C. Elegans) ended up winning the Nobel Prize and is crucial for observing biological processes in living organisms. > new construction is coming in at 4x than 10 years ago... I don't see how the market is really solving anything here. It sounds like high prices incentivized builders to increase construction by 400% over 10 years? That seems like the price mechanism is driving an increase in housing supply, exactly as one would want when there's a shortage of housing.
Victerius 4y ago
Rents are already through the roof. If that hasn't incentivized builders to build enough housing to lower rents in places people want to live, why not go for the centralized solution? CMV The "let the free market take care of it; government intervention can only make it unaffordable" view is standing on extremely shaky legs today.
- nickles 4y ago
  > The "let the free market take care of it; government intervention can only make it unaffordable" view is standing on extremely shaky legs today. The term “NIMBY” is commonly used to describe people who prevent new construction of housing. They typically use legal maneuvers (like requiring years of environmental review) to do this. By allowing this to continue, government intervention supports unaffordable housing.
karatinversion 4y ago
> Those price increases incentivize builders to increase the housing stock Of course this does not work if building new housing is illegal, in which case you might as well have the rent control.
- nickles 4y ago
  > Of course this does not work if building new housing is illegal, in which case you might as well have the rent control. Or make it possible to build new housing. Rent control is a subsidy to existing residents to the detriment of people who would otherwise move to the area.
spaniard89277 4y ago
Yet it isn't working in most european cities. Price increases and capital holders always build behind the offer/demand curve so they get a better yield from it. Also, rent is always high enough to milk as much as possible from modal income, as demand is pretty inelastic. Also, read carefully, I don't want price control directly onto the private sector but the adminsitration controlling a big chunk of the offer.
- nickles 4y ago
  > I don't want price control directly onto the private sector but the adminsitration controlling a big chunk of the offer. If the government sets prices for 40% of the market, it’s price control by definition.
  - spaniard89277 4y ago
    It doesn't work like that, because not all property nor customer is even. A luxury apartment is not competing with a 2 bedroom public housing apartment. And there will be floating population, there will people moving in, there will be people with special needs that public housing doesn't cover, etc etc Maybe such situation would actually push investors to be innovative with housing for once. If regulations allow that, of course, which is important too.
foven 4y ago
Yet somehow this doesn't seem to materialize in any meaningful way, the price of housing has only been going up exponentially and I'm sure builders are doing their best to build more but it's not getting any cheaper.
ricardobeat 4y ago
Why would housing become unaffordable if the state intervenes? The purpose is precisely to control affordability. Prices are controlled for social housing, and flexing supply allows you to influence the free market prices. Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified. Like what we are seeing in this news piece. I don't know exactly how it works here in the Netherlands, but as far as I understand the government leases land to the constructors at its own pace, with strict quotas on social housing, to let vs to buy ratio, and free-market properties. It isn't perfect (massive bubble on the free market right now) but seems to work well enough.
- nickles 4y ago
  > Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified Is that the case in Detroit? I’d wager there’s substantially more supply than demand. > It isn't perfect (massive bubble right now) but seems to work well enough. If there’s a massive bubble then it seems like that system didn’t control prices.
  - ricardobeat 4y ago
    > If there’s a massive bubble then it seems like that system didn’t control prices. The bubble mostly affects new home buyers, which are the ones who need the least protection. Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. Everyone living in social housing still has a home, and won't be evicted so that another person can come in to pay 2x the rent. Seems pretty good to me. I don't know much about Detroit but it seems to demonstrate that the simple supply-demand model does not reflect reality. Prices should have dropped significantly, but instead it followed the same curve as the rest of the USA, with those $500 properties being a localized phenomenon.
    - nickles 4y ago
      > The bubble mostly affects new home buyers, which are the ones who need the least protection. So now you (or more generally the government) get to decide who is more deserving of appropriately priced housing? Why do new home buyers need less protection? > Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. This is precisely the problem with this policy. When price doesn’t feed through to the market, the market can’t adjust. People simultaneously argue that the free market doesn’t work while endorsing policies that prevent the market from working. > it seems to demonstrate that the simple supply-demand model does not reflect reality The population dropped from its peak by 1.2mm people. Prices subsequently fell so much that it was possible to buy houses for $500. That’s exactly what the supply/demand model would predict.
f17 4y ago
> Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. The issue, empirically, is that (a) we don't see the right housing being built, and (b) we don't see quality housing being built. We see a lot of high-end luxury units being built, but what we need are more 1- and 2-bedroom units within 20 minutes (preferably, by affordable public transit) of where people work. We also see a lot of large (and therefore expensive) but cheaply built McMansions that'll be falling down in 20-40 years, so the long-term picture of the housing stock is not improved. What we need is for the government to step in and build affordable housing as a floor at a controlled price ("commie blocks"). No one will be forced to live in one, of course, but they'll be an option; the rich can still buy property on the market if they're so inclined. > My landlord takes all the risk of owning the property (prices don’t always go up after all). If you own your house and control your geography (i.e., you'll never be forced to move due to economic inopportunity) then you have the truly risk-free position. Renters are at much higher risk (log transform, Kelly Criterion) than landlords, because real estate costs are such a high percentage of their budgets. The problem, of course, is that owning a house, while it gives you a zero beta to the housing market in theory, still does have the risks you described. For one thing, other people can do things that damage your house's value--both its subjective value as a place to live, and its objective market price--such as building highways and obstructing sun/view. The other issue is that, in today's hypercompetitive world where in decent employment every job search is national (and possibly international) it's impossible to control your geography... you could be laid off and forced to relocate to get your next position. So, you're not wrong in general. I think it's a wise financial decision for a young person to keep renting one's place--as opposed to renting money to buy a place--but I also think it's inaccurate to imply that landlords are taking more risks than they really are. It really gets on my nerves when rich people and employers talk about how they're "taking all the risk" and therefore deserve more, when the truth is that the poor (involuntarily) take all the risk, because each $100 means so much more to them.
jahnu 4y ago
Been this way in Vienna for many many decades and still it’s a very affordable city. So I dunno, I do believe this can go wrong if implemented incorrectly and has done in some cities, but it hasn’t here yet and looks fairly stable for the foreseeable too.
- ipaddr 4y ago
  How many new units have been added over the last 20 years?
  - jahnu 4y ago
    Not sure exactly but the population has grown from 1.5 million in 2001 to 1.9 million in 2021 Some of that growth fit into existing stock but since the late 90s there has been a lot of new neighbourhoods built. The city generally plans ahead, even building public transport like metro out before it is completely needed. E.g. out to this new neighbourhood https://en.m.wikipedia.org/wiki/Aspern https://en.m.wikipedia.org/wiki/Aspern
- namdnay 4y ago
  I think that’s more due to the relative attractiveness of the cities. London, NYC, Paris etc have become extremely expensive because they’re world cities, attracting huge amounts of people and jobs. That’s not really the case for Vienna, or Glasgow, or Riga etc
  - jahnu 4y ago
    In fact Vienna has had a huge population growth in the past 20 years
    - rr888 4y ago
      Fewer people than 100 years ago, compare that to Bay Area. https://en.wikipedia.org/wiki/Vienna#Demographics https://en.wikipedia.org/wiki/Vienna#Demographics
Baloo 4y ago
>Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). This is not reality though. Here in the UK our housing is in major crisis because people simply cannot afford the insane price increases. Pretty much everyone I know shares their living situation, on their own they would not be able to afford basic amenities. The guardian today published an article showing: >Average monthly rental payments were now 40% higher than they were 10 years ago, while typical mortgage payments for the same properties were up 13%. Landlords and property owners are hiking the prices way beyond reasonable value, in some parts of the country rent is up by over 20% in the last year alone. By your logic there should be an incentive for builders to increase the housing stock, but private enterprise aren't building anymore homes now than they were 10, 20, 30, 40, 50 years ago. We do however have a situation where the average mortgage is about £900 per month, whereas the average rent has skyrocketed to £1600 per month (£1100 outside of London, £2200 in London). Available rental stock is down 25%, with demand up 5%. It's great for property speculators, buy-to-let landlords and property developers, people are offering above asking prices simply to secure a home. >My landlord takes all the risk of owning the property (prices don’t always go up after all). Sure there is risk, but when you charge 30% more than you repay for the mortgage, while at the same time property prices rise 75% in 10 years, it's safe to say that the cash cow is being thoroughly milked for every last drop and as a result many people are suffering. Ultimately there shouldn't be 'risk', this mindset is a big problem. Homes are a fundamental, basic human need. Using them as an investment method, business model or means to hedge against inflation, is causing rampant speculation and quite honestly extorting people that have no other choice, exploiting vulnerable families that need a home. It should be an extremely tightly controlled market, with sufficient funding to ensure that quality & affordable housing is available for everyone.
- wahnfrieden 4y ago
  - feet 4y ago
    Yea, and they're disagreeing. What are you trying to say?
eatsyourtacos 4y ago
>When supply is less than demand, prices go up Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more. The only reason the prices go up is because of greed basically- because people say "hey I can just charge more and people will pay more!". And there in lies the bullshit of the free market once again. It always benefits the people with money, who can afford to pay that amount more "just to get what they want". The last few years in particular have made me so tired of hearing about people talk about supply & demand like it is some unarguable hard scientific fact. It's not even close to that. It just represents how much people like to price gouge because "they can" >Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. And the following part of this is also just more bullshit. I'm not saying you are "wrong", but you say it as if that is how things have to work and there is no other alternative. Every word of what you said is based on greed and squeezing the most you possibly can from people. Please realize that.
- nhooyr 4y ago
  There is a machine... Of thousands of workers. If those people can't make more money, they have less incentive to recruit more and build more housing stock faster... Such price signals are a basic element of the efficiency of the free market.
- ElevenLathe 4y ago
  I largely agree, but if there is a scarce good (where there is less of it available than people want -- i.e. supply is less than demand) then we have to ration it /somehow/. The American way is by bidding up the price, so whoever is willing to pay the most money gets it. The Soviet way was by queuing, so whoever gets in line first gets it. We could also do it by lottery. We can come up with any number of schemes and most of them are "fairer" than market pricing, but they do all involve the "price" going up in some sense. Either you pay more in money, or in time, or in luck, but the price has increased because there are more people chasing the stuff than there is stuff to chase.
ehnto 4y ago
We're all very aware of how the economics should play out, but look around you, it's not working that way in a bunch of places. That's because houses are being used as investment vehicles, with rentals being thoroughly flogged because they know people have no choice but to pay. No amount of building will help if the value of the property is not intrinsically linked to the supply and demand of places to live for people who want to live there, but is instead linked or at least heavily influenced by what investors with increased buying capacity are willing to pay.
- nickles 4y ago
  > No amount of building will help if the value of the property is not intrinsically linked to the supply and demand Building new houses is intrinsically linked to supply. When you build a house, that increases the supply of housing. NIMBYs oppose new construction precisely to prevent the value of their properties from decreasing.
  - ehnto 4y ago
    Sorry, of course that's correct. I was trying to articulate that the supply and demand, as a whole, is not currently a marketplace for people with housing to sell to those who want to be housed (in many places). It's a marketplace dominated by investors and landlords, and people who want to be housed are having to stretch their funds as far as they possibly can to keep up with the market currently being made by investors and landlords.
    - nickles 4y ago
      > people who want to be housed are having to stretch their funds as far as they possibly can to keep up with the market currently being made by investors and landlords. I'm sympathetic to the difficulties people are facing right now, and I've seen the stories about housing being purchased by investors. The issue is that the data doesn't seem to indicate a structural change in ownership [0]. Home ownership appears to have peaked at 69.4% in 2004 and now sits at 65.4%, the same level as in 1980. [0] https://fred.stlouisfed.org/series/RSAHORUSQ156S https://fred.stlouisfed.org/series/RSAHORUSQ156S

TOMDM 4y ago

> CMV Rent is high because the demand in large cities majorly out strips supply. All policies that attempt to address housing costs that don't increase supply are treating a symptom and not the underlying cause.

ricardobeat 4y ago
Increasing the supply alone does not counter the gentrification / ghetto effects the parent comment talked about, in fact it might amplify them. A gross oversimplification, but if you somehow make ten thousand new apartments available in Manhattan at $1k/month, they will eventually fill up with low-income tenants, which will make them undesirable. Pressure on all the existing $5K properties will remain the same.
- mattzito 4y ago
  Why would they fill up with low income tenants? Why would that make it undesirable?
  - namelessoracle 4y ago
    Because low income anywhere (rental area or even just low income suburban areas) typically has a population that is less able to invest into their area (in time or money), and historically has shown that they seek an extractive relationship with their environment rather than invest in it.
    - feet 4y ago
      Are you joking? Poor people are the exploitative ones? That's just entirely false The entire basis of capitalism in the US is that the work of the poor is exploited by those with the capital to build factories and businesses which extract labor and resources from the poor people That's why they can't invest. You have it entirely backwards
      - jimmaswell 4y ago

seydor 4y ago

Agreed. Housing is as basic a need as food. Either end food subsidies and make farmers rich, or deregulate housing

cies 4y ago

Totally agree. It is one of the perfect resources to extort people with. Unlike food the price of houses rarely drop to zero, and often go up. Like food, it is very essential to people. What you propose is a very socialist solution. I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal (as they calculated that's what housing would cost using cost-based-pricing).

nickles 4y ago
> I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal Fortunately that was the only criminal activity in the shining beacon of freedom and prosperity that was the USSR.
- giraffe_lady 4y ago
  If we're going to dismiss every quality and strategy of a country because of its moral crimes then everything about the US is worthless through the same path. I don't think this is a useful way to approach any of these problems, and I'm sure neither do you, so why try to score cheap points this way.
  - nickles 4y ago
    > If we're going to dismiss every quality and strategy of a country because of its moral crimes My primary intention wasn't to refer directly to the morality of the USSR. Economically speaking, the USSR was a disaster, so I'm skeptical that we should implement the policies that quite literally destroyed a nation. But yes, the USSR was a murderous state led by men who were happy to kill tens of millions of people for personal gain. I find that morally reprehensible.
    - Jcowell 4y ago
      There’s a difference between being skeptical and being dismissive. You can be skeptical, but evaluate an idea by its merit Maybe it’s something that could be a good idea under the US economic conditions, maybe not.

ctvo 4y ago

> CMV Questions more than anything else: - How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building? - With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference? - Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?

spaniard89277 4y ago
> How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building? I don't know if I understand your question. We're talking about public housing, the owner is a public entity. For every building there are slots by income and they're filled by a FIFO system if you will. I know in the US this is more difficult but in most euro countries the administration can check what you earn yearly. It's semi-automated already. > With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference? The owner is the public housing company. No guarantee for anyone. There are different proposals, for me 20% for annualized income is simple & good enough, I wouldn't want to make it very complicated, but I'm sure it can be. > Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place? Overall supply did, but due to political factors the public housing system didn't expand at enough rate to keep up with demand.
- akvadrako 4y ago
  FIFO is terrible since that often means waiting 15 years for a flat.
- ctvo 4y ago
  I misunderstood and assumed all rentals in Vienna were under this system vs. only public ones. I do wonder if the city continues to provide supply, what the downward pressure on price will be for private units and if that eventually harms overall supply. I'm sure there's data on this somewhere, and I'll dig later today.

Spooky23 4y ago

New York City already has like 150k+ income based public housing units. It’s not ideal.

spaniard89277 4y ago
150k is nothing for NYC
- Spooky23 4y ago
  That represents like a half million tenants. “Nothing” isn’t how I would describe it!
  - spaniard89277 4y ago
    It is nothing. For public housing to make sense it has to be a considerable amount of the supply, and be universally available, not only for low-income people.
    - klyrs 4y ago
      [1]> NYCHA has approximately 13,000 employees serving about 173,946 families and approximately 392,259 authorized residents. Based on the 2010 census, NYCHA's Public Housing represents 8.2% of the city's rental apartments and is home to 4.9% of the city's population. NYCHA residents and Section 8 voucher holders combined occupy 12.4% of the city's rental apartments. 1 out of 20 of the city's residents, 1 in 8 if you count voucher programs. That's far from nothing, but you're right, there's definitely room for improvement if you can cut through the red tape of nimbyism and corruption. [1] https://en.wikipedia.org/wiki/New_York_City_Housing_Authority https://en.wikipedia.org/wiki/New_York_City_Housing_Authorit...
    - trident5000 4y ago
      Its about the 70th percentile, above average. But you're not living an extravagant life.
- trident5000 4y ago

missedthecue 4y ago

I don't want to live in the projects

m_ke 4y ago
Which of these "affordable" options are you too good for: https://housingconnect.nyc.gov/PublicWeb/search-lotteries https://housingconnect.nyc.gov/PublicWeb/search-lotteries Also recommend checking out this video about Vienna https://www.youtube.com/watch?v=41VJudBdYXY https://www.youtube.com/watch?v=41VJudBdYXY
- missedthecue 4y ago
  You're telling me those buildings are own and run by the government? Those look like mandatory "affordable units" that by law must be built by private developers in new buildings.
spaniard89277 4y ago
No one forces you to do that.
- missedthecue 4y ago
  I don't think anyone should have to be subjected to that type of treatment.
  - spaniard89277 4y ago
    I don't know what type of treatment you mean. I guess you're thinking on a guetto, which is adressed in my first message. Also, people apply voluntarily. You're free to live in a private-owned rental
  - noelherrick 4y ago
    The alternative for many is worse - many roommates, incredibly long commute, or homelessness. Remember that Googler who lived in his car? (https://www.businessinsider.com/google-employee-lives-in-truck-in-parking-lot-2015-10?op=1 https://www.businessinsider.com/google-employee-lives-in-tru...)

simonsarris 4y ago

> preferably by doing the same as Vienna have 2.25 million population before WW1 and then decline in population for almost 100 years? They still haven't recovered (1.89m). It may be an enormous mistake to read into their allocation policy because they've simply had a very easy time allocating so far. St Louis population has declined for 70 years. It is very affordable. It's just not hard to accomplish affordability like that.

spaniard89277 4y ago
Vienna suffered and suffers housing price inflation like any other european city. In world wars not only people dies, but housing units are destroyed too. Also, the point of the social housing in vienna is not only the dimension of it, but how they do it. The design, the demographics, etc. There's a clear distinction between their program and the myriad of commieblocks in other countries that become low-income guettos to sink public money. Public housing done right is more than just building dense, putting poor people in it and be done with it. That's a recipe for disaster.

cmurf 4y ago

Empty property tax at up to 1000%. For full time occupied properties, a sliding scale rebate toward rent based on income.

SamoyedFurFluff 4y ago
New York City has very little housing available. It’s not an issue of empty properties.
- pclmulqdq 4y ago
  You would be surprised at how much commercial real estate is vacant in NYC. If that could be converted to housing, it would alleviate a lot of problems. Also, the way commercial buildings are mortgaged is crazy - major landlords often have 0% down payments (claiming that their ability to attract rental tenants will add 20% equity overnight), and keep the building vacant rather than lowering rents to maintain the "valuation" of the building. Empty units can have their cost tacked on to the end of the mortgage. At some point, the bill comes due, but it takes a long time.
  - SamoyedFurFluff 4y ago
    Converting a commercial space into residential (assuming it’s zoned that way to begin with) isn’t trivial. We’re talking massive plumbing and HVAC system changes, for example. I do agree if empty commercial buildings can be gutted and renovated as residential it is one way to introduce more housing into the market; I don’t think it’ll be much faster or cheaper than building from scratch though.
    - pclmulqdq 4y ago
      I agree, but the way those mortgages are handled, they incentivize buildings to have a lot of long-term (5- and 10-year) vacancies, which means that it doesn't have to be particularly fast to convert them.

treeman79 4y ago

New York did this. Rent control. It’s why they ended up with tons of slums. We have tons of land In the US. Lots of people leave New York for cheaper places.

shmatt 4y ago
I think a lot of office workers would love that idea, except they were told in the past ~3 months its back to the NYC office or they're fired. The limited supply (3 years worth of eviction backlog) + office mandates hitting this spring are exactly why prices went crazy seemingly overnight after a pretty calm 2021

bleuchase 4y ago

> Housing and land is a non-transable good, and therefore there should be heavy state intervention on it That's a bold claim. What led you to believe that's the case? And what is a "non-transable good"?

feet 4y ago
I think it might help to find out the definitions of terms before assuming the statement is wrong
- abduhl 4y ago
  Non transable is not a term that anyone uses and therefore is not one that has a definition outside of this thread. Which is why GP asked what it is, smart ass.
  - feet 4y ago
    And the person I'm replying to, in the order of their statements and questions, first assumes that it is a bold claim and after that decides they don't understand the statement they're replying to. It's backwards
    - mym1990 4y ago
      Must be fun spending the whole day looking for technicalities to address.
      - feet 4y ago
        No, I just understand how to make valid criticisms. First step before you can criticize is to understand what you're criticizing
        abduhl 4y ago
        Apparently not because you didn't even understand what the GP was calling a bold claim (it wasn’t land being nontransable).

theropost 4y ago

I agree 100% - on top of all that, the current housing strategy reduces the mobility of the workforce, so it becomes more difficult to move skilled workers from one region to another. On top of that, being generally considered as a persons most valuable asset, almost no-one wants "affordable housing" in there area, as it would bring down the value of their most valuable asset. We need to start considering people as the valuable asset, and not the house they live in.

throwaway0a5e 4y ago

>and renting to a representative distribution of tenants so to prevent guettos Sounds like a creative way of saying "make sure the poors have enough rich people near them that they feel compelled to stay in line and keep a low profile." There are few things that make apartment living worse than having neighbors who think your standards of behavior are too low and who you have to avoid pissing off.

kshahkshah 4y ago

IMO the heavy state intervention should be massive capital investment into FAST public transportation infrastructure. Make areas further away from city centers viable for commuting and the problem gets largely addressed.

woodruffw 4y ago
Ironically, this was what NYC (technically, pre-NYC) did over 100 years ago -- there was a thriving network of streetcars in Brooklyn[1], which overlap almost exactly with neighborhood density. We then tore them up, leaving just the subway lines and a bus system that traces the vestiges of the old streetcar lines. Streetcar suburbs[2] not only work, but are imminently sustainable compared to other forms of urban/suburban extension. [1]: https://en.wikipedia.org/wiki/List_of_streetcar_lines_in_Brooklyn https://en.wikipedia.org/wiki/List_of_streetcar_lines_in_Bro... [2]: https://en.wikipedia.org/wiki/Streetcar_suburb https://en.wikipedia.org/wiki/Streetcar_suburb

huevosabio 4y ago

Housing =/= Land. But our policies which heavily kneecap our ability to build more [0] make it such that Housing starts behaving like Land. The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build. I personally think that achieving affordable housing prices via mainly government intervention is not a sustainable approach. You end up consuming both economic and political capital. A more sustainable approach sets clear, transparent rules that specify under what conditions do you get to build by right. Then 90% gets satisfied by the market, the remaining 10% can be addressed by government investments, if needed. The only sustainable way to get affordable housing is when the market price is affordable. Land, on the other hand, is another story. There is strong economic evidence that many of the observations of Henry George [1] are spot on: Land rents tend to take a massive toll in the economy, cause inequality and misery, all without requiring their owners to provide any added value. The proposed solution, again with solid economic fundamentals, is to tax the unimproved value of land at 100%. Henry George further argues that the proceeds should be equally divided among citizens, a citizen dividend if you will. [0] e.g. it takes 4 years on average to get a new building permit in SF, 90% of the city is zoned for single family housing, any neighbor etc. [1] https://www.gameofrent.com/ https://www.gameofrent.com/

m_ke 4y ago
I'm no NIMBY but places like NYC will never be able to build enough to outpace demand.
- eloff 4y ago
  And yet it works in Tokyo, a city of almost double the population?
  - deleted 4y ago
    [deleted]
  - Zxian 4y ago
    New York City already has a significantly higher population density than Tokyo (~11,300/km2 vs ~6,300/km). It's easier to develop more housing when you have more land.

fartsucker69 4y ago

Property owners providing almost no value is just factually wrong. Their function is similar to insurance. You pay rent to live somewhere because you don't want to take the risk or can't get the loans to buy a property yourself. And it costs real money and time (i.e. real resources) to build those homes and maintain them. In return property owners (or insurance runners) can get rich off your monthly payments as well as the inherent value of the property (/insurance company), but because of risk of ruin, opportunity cost for other investments and other related phenomena, it can mathematically be a total win-win for both sides. What everyone complaining about property prices also always seems to forgoe are two things: First, people are clearly able to afford them or the prices wouldn't go higher. The myth that property investors buy homes on mass and don't rent them out which supposedly creates this pricing hike is idiotic. All of these big cities with insane rents have very low vacancy rates compared to the national average. In almost all of these places where people complain about rent, we are talking about big popular places where everyone wants to go even though there are tons of realistic alternatives all around the country. The situations where it's economically totally necessary for you to move to an expensive place but at the same time you can't afford the rent is so rare as to be virtually non-existent. Even the idea that people are displaced from their homes is an issue on a smaller scale than people make it out to be. That's because income in those expensive places is much higher than in cheaper places. There are people displaced from their homes, but that's because of poverty and other aspects of gentrification that are not necessarily tied to rent.

enriquto 4y ago
> it costs real money and time to build those homes and maintain them. As a renter of a dangerously unmaintained property, whose owner has never worked because he inherited a bunch of apartments, I can only laugh hysterically at your ridiculously-over-the-top sarcasm.
- noptd 4y ago
  This comes back to scarcity as the root cause. If there were an abundance of alternatives in the same price range, shitty landlords couldn't get away with letting their properties deteriorate to such a condition. The deadbeat landlord problem would solve itself once we build ourselves out of scarcity.

throwaway6734 4y ago

Lol just tax land

dukeofdoom 4y ago

> property owners provide almost no value I think you have no idea how much things break and need fixing. I have a friend that owns a few houses that he rents out, and it's a part time job just keeping up with fixing things. Between them, there's a few thousand items that can and do break and need maintenance. He would not be profitable if he hired out to fix things. Outside Labour can easily be $100/hour and if you need something even a little bit more serious its easily $1000/day. This is the hidden cost of manufacturers making things as cheaply as possible, and often out of plastic. Property taxes and utility bills and problem with tenants. Navigating disputes, noise complaints, missed rent, move outs and move ins, signing new lease agreements, landscaping, leaky plumbing, damaged flooring, overgrown trees, it's endless. It's a part time job.

rcpt 4y ago
That's property management, not property ownership. Maintaining and improving structures is work. Nobody disagrees with that. Simply owning the thing is not work. Churchill said it best: https://www.landvaluetax.org/history/winston-churchill-said-it-all-better-then-we-can https://www.landvaluetax.org/history/winston-churchill-said-...

dionidium 4y ago

> and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity. Property of course requires maintenance and management, so the sleight of hand here is to define away all those aspects of ownership so that by definition all that's meant by "landlord" is "old guy who cashes checks." But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass, somebody has to pay the taxes, somebody has to -- yes -- collect and cash the checks. Somebody has to respond to tenant requests and emergencies. Somebody has to advertise the property when it's vacant. Someone conducts showings and screens tenants. And, maybe most important, somebody assumes the risk of a bad tenant or a down market or a declining neighborhood. And so on and so on. Whether all this is done by the owner personally or hired out is irrelevant. There's no reason to believe government can perform these functions better than private owners in a market. A simple proof that landlording is not free/easy money is to realize that millions of middle- and upper-middle class Americans who -- if not today, certainly 5 years ago before this most recent run-up in prices -- could, if they wanted to, afford to buy property and become landlords, but they mostly do not do it. And since nobody turns down free/easy money, landlording simply cannot be free/easy money. QED.

nix0n 4y ago
> But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass In many buildings these things are simply not done.
- dionidium 4y ago
  Now that I've said some nice things about landlords, I'll say something less flattering: bad landlords find convenient cover in supply-constrained markets. Which, of course, is what we have. If you want to stick it to lazy, cheap, do-nothing landlords, then let somebody build a brand-new apt complex right next door to their crappy units and see how long they can get away with their insouciance in that kind of market.
- lucaspm98 4y ago

690328535p5 4y ago

I don't understand why you think state intervention would actually help. The state has no incentive to solve the problems you are talking about.

supercanuck 4y ago

Very high quality comment and very insightful!

lazyier 4y ago

This post is stupid beyond all measure. One of the principal reasons Manhattan rent is so ridiculous is because of state intervention. More intervention, the worse it is going to get. > Rent is the main detractor of disposable income which hurts the rest of the economy, This is a silly statement. Rent is part of the economy. Paying rent doesn't damage the economy anymore then paying for food or paying your electrical bill. > and property owners provide almost no value, They provide and maintain their property. > but to provide access to housing for people who has no capital for it, And for a wide variety of other reasons. Not everybody wants or is a place in their life were massive permanent investment makes sense. > which is service that could be perfectly provided by a state entity. Absolutely not.

ethanbond 4y ago
Singapore provides that service pretty successfully.

wowokay 4y ago

Housing/rent is a part of your disposable income. Some people live in expensive places because they want too, but no one is required to live in an expensive place because they have too. I agree in the idea of affordable housing but I don’t think it’s fair to promote sweeping changes because people decide to live in expensive cities like NYC.

giraffe_lady 4y ago
A lot of people are born in nyc you realize? And in other expensive places? Also if you evict all the poor people from the expensive cities, who do you think is going to work the jobs that make it possible and desirable for the rich people to live there? By what mechanism could this possibly work other than exploitation and coercion. I realize that's the current status quo, but do you? Do you understand that's what you're endorsing here with this argument of "poors gtfo?"

kriops 4y ago

> (...) there should be heavy state intervention (...) This has been tried so many times throughout different cultures and time periods, and by different means. It will not benefit whoever is actually living on the properties, but will detract from their situation. Economics in One Lesson by Henry Hazlitt has several concrete examples of attempted interventions, and is written to give a basic intuition on why this happens (Spoiler: Opportunity costs). The only permanent solution is just to build more buildings, or at a political level simply making it easier to build new buildings, which directly increases supply and thus causes the lowering of prices. This makes perfect sense when you think about it: There are not enough buildings, so we need to have more buildings.

eej71 4y ago
It continues to be disappointing to see so many people turn to state power as a solution to the problem of scarcity. Scarcity is solved through production not political power.
- deleted 4y ago
  [deleted]
- rcpt 4y ago
  Can't produce more land. Best we can do is tax people for hoarding it
  - kriops 4y ago
    Best we can do is certainly not increase the cost of land, and thus increase the required price of rent/housing to break even. Less regulatory obstacles to increase supply, i.e. build housing, is the correct answer.
    - rcpt 4y ago
      Land Value Tax would decrease the cost of land as it makes land speculation less attractive. People won't be willing to bet on much on real estate if increased prices come with a tax penalty.

DeathArrow 4y ago

>The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility, Maybe some groups of people don't want to live together with other groups of people? Different people living in different parts of the city is just natural evolution. Why should the state force them to live together? And why should the state tell you where to live? Why should the state be involved in your private life at all?

dwater 4y ago
> Different people living in different parts of the city is just natural evolution. A claim like that needs supporting evidence. I see no reason why segregation among different members of a single community is natural. > Why should the state force them to live together? Because segregation breaks down the social bonds in a community, which is bad for the social fabric, which is bad for the community's ability to live and work together, which results in the breakdown of that community. https://www.bloomberg.com/news/articles/2013-05-03/why-segregation-is-bad-for-everyone https://www.bloomberg.com/news/articles/2013-05-03/why-segre... > And why should the state tell you where to live? Why should the state be involved in your private life at all? The state does not exist in Libertarian theory. The state already has numerous rules about your private life. You could make the same arguments against zoning and building codes.
- noptd 4y ago
  >A claim like that needs supporting evidence. I see no reason why segregation among different members of a single community is natural. Considering that in-group-out-group psychology has been humanity's evolutionary default for tens if not hundreds of thousands of years, I'd say the burden of evidence is on anyone claiming the contrary.

rcpt 4y ago

Vienna was only able to pull that off after a devasting war left nearly everyone poor. It's not clear that the US could seize 40% of rentals in Manhattan without starting a revolution. To your other points yes. Land Value Tax now! There's simply no good reason for why we're all taxed so heavily on our labor while land speculators get away for pennies.

DeathArrow 4y ago

>Many attempts at public housing failed because they just tried to provide housing for low-income people in separated and/or undesirable areas, with a predictable outcome. So the taxpayers should pay so the people with low income or no income can live iny Manhattan? Why not also provide them with expensive cars and exotic vacations?

giraffe_lady 4y ago
> So the taxpayers should pay so the people with low income or no income can live iny Manhattan? Yes. It's a city not a luxury resort. If people are to work all kinds of jobs at all levels of income there, then people at all income levels should be able to live there as well. This mechanism accounts for that. > Why not also provide them with expensive cars and exotic vacations? Maybe they should idk. Seems completely unrelated though and no one is arguing for that here so I don't know why you want to or why I should.
- teakettle42 4y ago
  > If people are to work all kinds of jobs at all levels of income there, then people at all income levels should be able to live there as well. Why should taxpayers subsidize employers unwilling to pay a living wage?
  - giraffe_lady 4y ago
    Yes I agree we should force employers to pay living wages. They're definitely closely related issues but I don't know that you can completely solve for one in terms of the other though.
- pb7 4y ago
  Manhattan isn’t a city, it’s the most expensive borough of a city. They don’t need to live there.
  - giraffe_lady 4y ago

bobthechef 4y ago

> charging according to income Perhaps only as part of a way to ease those with low income. But this is no good in general. You are charging one person more than another for the same good simply because of higher income. This is price discrimination and is unjust. Usury can work in an analogous way, such as when someone raises prices to exploit increased need even though the cost of production of the good sold is the same. > property owners provide almost no value They provide shelter and must maintain that property. Problems occur when they begin to charge unjustly for services rendered. This calls for regulation, not state ownership. No need to go to extremes. > The current setup creates guettos [sic] by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility Social mobility isn't the only consideration and not the summum bonum and it exists precisely to allow people to sort themselves into social classes (otherwise, why have social mobility in the first place). People of a given social class tend to live closer to each other because they share class cultural similarities, concerns, and affinities. That doesn't mean there is no contact between people of different classes, but the solution isn't to mix everyone up into a uniform mass. There's a middle way between the hermetically sealed ghetto and uniform distribution, and it doesn't involve violating the principle of subsidiary. Ultimately, it is poverty that is a problem, not having a lower or higher income as such.

New_California 4y ago

I already had communism and state-owned housing in my country, so no thanks! Never again. You are welcome to move to a state-managed economies though.

KKKKkkkk1 4y ago

Hi, what is a non-transable good? You're using a non-dictionary word to justify a pretty radical policy, so I'm curious.

deleted 4y ago

[deleted]

kortilla 4y ago

> Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost no value, Have you considered that housing might actually be valuable? If it didn’t provide value, why do you think that Vienna seized so much of it to give out to its citizens? Maybe try to find a different way to phrase whatever you’re trying to say. Assuming you’re referring to property owners getting by doing nothing. That’s false unless they are a slumlord. Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna? > The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas This is not how it works in the US for the last 50 years or so. Most places force every new building to include low income units.

7steps2much 4y ago
> Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna? Rent from another landlord mostly. Vienna has close to two million people (give or take some), however only around 500.000 of those live in buildings owned by the city [0]. Those are 1800 buildings by the way, definitely a lot but not unbelievably massive. Compared to some private companies, such as Vonovia the city of Vienna is just another big player, but by no means massive enough to actually be a monopoly or anything. It is true that they of course hold a lot of the supply in Vienna itself, housing a quarter of the population, but that still leaves three quarters not living in any of those buildings. It's easy enough to not live in apartments owned by the city if you don't want to. [0]: www.wienerwohnen.at/wiener-gemeindebau/wiener-gemeindebau-heute.html (Source in German)
- kortilla 4y ago
  > Rent from another landlord mostly. So the other landlords are providing some value the city is not. That’s my point.
  - 7steps2much 4y ago
    You could argue that they are providing the same value as the city is (housing). It's not like this is some kind of either or situation. The city is providing value, approximately 500.000 housing units worth of value. Private landlords provide value, the remaining one point something million units worth of housing. You could of course replace either provider, it doesn't make a practical difference whether you are renting from the city or a private landlord, at least not if we are looking at this from a top down perspective with hundreds of thousands of units. But the whole point of the city buying into the market was to create competition and ensure that the property market isn't used as an investment/doesn't pay as great as another investment. So with that in mind the current system is actually kind of what they were aiming for.

newaccount2021 4y ago

zjaffee 4y ago

A huge percentage of the people living in NYC live in income restricted housing, it's in the millions of people.

closeparen 4y ago

Government intervention reflects popular will, and The People will themselves a housing crisis. They don't like change, they don't like neighbors, and they certainly don't like neighbors from different income levels than their own. The New York and San Francisco housing markets might be better governed by the Viennese electorate, but that's not on the table. They are governed by their own electorates, badly, and these are the results. Increasing the intensity of that governance will only amplify their already-revealed and already-governing preference that their cities be exclusionary museum pieces. Put another way, if you accept that housing scarcity is bad, going to the public and saying "How do you want housing in your city to be?" is only going to make it worse.