6 ms·

Just like health care and tuition costs, government backed insurance and loans are the root cause for prices spiraling out of control. "The mortgage finance ma

Just like health care and tuition costs, government backed insurance and loans are the root cause for prices spiraling out of control. "The mortgage finance market has leaned heavily on government support over the past few years. More than 90 percent of mortgages originated in 2011 were securitized by government entities using taxpayer funds to guarantee investors against default risk. This support cannot continue forever. The status quo perpetuates many of the policies that contributed to the housing bubble and consequently promotes an unstable mortgage market. In order to avoid another crisis, the government must exit mortgage finance and private capital must shoulder mortgage default risk. " https://reason.org/wp-content/uploads/files/study_restoring_trust_in_mbs_final.pdf https://reason.org/wp-content/uploads/files/study_restoring_...

cyanydeez 4y ago
Especially places like Florida, Louisiana and Texas that continue to lose to hurricanes and continue to get bailed out despite being rebuilt in high risk neighborhoods. Climate change denialism is expensive.
- sitkack 4y ago
  For blue states. I wonder if you could calculate how much federal relief a patch of land has received over the last 50 years?
  - TMWNN 4y ago
    >For blue states You mean "NY, NJ, CT, and MA". They are the states that provide the vast majority of the surplus in federal taxes paid by its people versus expenditures to them and their states.[1] Four other states also have substantial surpluses, of which two voted for Clinton and Biden, and two voted for Trump both times. Every other state either breaks even (CA among them) or receives more than their people pay in taxes. Of the ten states that get back the most, five and a half (of Maine) voted for Clinton/Biden and four and a half voted for Trump/Trump. Source: Rockefeller Institute's annual studies on the subject. [1] Yes, they are all Democratic states today, but this was exactly the same a century ago, when MA and CT were solidly Republican and NJ and NY were swing states.
- replygirl 4y ago
  ok inland cities, build up your housing stock and job market so people can move to you
  - humanrebar 4y ago
    Most of Texas is pretty far inland.
    - replygirl 4y ago
      hey. i live in texas current data don't seem to be available, but pre-pandemic, texas had a housing shortage of over 300k units, the shortage having nearly tripled in less than a decade. that's likely to be worse now. it sure feels worse a good many of the people immigrating from coastal cities are in a group privileged to remote into coastal jobs. experience corroborates that as well
- richk449 4y ago
  There are now places in California where the only fire insurance you can buy is through the state, because private insurers bailed out.
  - fshbbdssbbgdd 4y ago
    That’s because the state banned insurers from using up-to-date risk models: https://www.ecologylawquarterly.org/currents/californias-ban-on-climate-informed-models-for-wildfire-insurance-premiums/ https://www.ecologylawquarterly.org/currents/californias-ban... A bad policy, to be sure, but that doesn’t mean the homes are inherently uninsurable.
    - deleted 4y ago
      [deleted]
- treeman79 4y ago
  These places have had hurricanes for centuries at least. If humans didn’t exist at all. It would still be getting hurricanes.
  - deleted 4y ago
    [deleted]
  - bumby 4y ago
    Remember, risk is most often measured across the dimensions of probability and severity. So even if probability is the same, total risk can be higher is severity increases. Risk is the currency of insurance.
  - kelnos 4y ago
    Sure, but look at the frequency and severity of them more recently, and it starts to get a little scary.
- adrr 4y ago
  Florida is going to get interesting when the state won’t be able to purchase reinsurance for their state ran insurance company. Insurance companies have been running at a loss even during non hurricanes years and Ian will make them all pull out. You can’t get loans if you don’t have insurance.
  - chii 4y ago
    i bet they will vote in someone to pass federal legislation with which they receive subsidies that gets spent on making insurance companies whole (aka, take on the losses). Then they will perpetuate the situation, until the coast line sinks.
  - xenadu02 4y ago
    If you want to live in a Hurricane-prone area you should build to hurricane-resistant standards. Yet what does every single new home in Florida have? A composite shingle roof, no built-in 100mph+ storm shutters, etc. No requirement for built-in backup power. This is one instance where insurance should be free to properly price risk. Make classifications of storm resistance and price each home based on what standard it meets. Frankly California has the same problem with earthquake insurance even though it's all sold by the state created (but supposedly not backed) authority. The rates mostly don't reflect any earthquake-proofing nor what standard the home was built to. If you retrofit a 1930s home to the best modern standard you still pay the same rate as your neighbor who did not.
    - anfilt 4y ago
      There are composite shingles rated for hurricane winds. Although for that rating nail placement is critical. Sadly the most common screwed up thing on roof installs is nail placement. This can lead to leaks in 5+ years generally. However, in the case high winds if the nail is not on the common bond the nail can pop through the shingle. Also most manufactures require a ring shanked nail for the hurricane rating. Again most roofers use only a smooth electro-galvanized nail because it's cheap. And once one shingle pops loose suddenly it's much easier for the wind to get under the other shingles near by and the failure can cascade like dominoes in a hurricane situation. Going from a simple repair to replacement of a section or to a whole roof replacement. Also an other aspect is double checking the shingles are properly placed otherwise the seal strip won't adhere in the correct spot on the shingle below making it easier for the adhesive to come loose and again same problem. The thing is if you have seen how fast most roofing companies put a roof on a house do you think they are going to do this right? Also sadly if the roof fails during a hurricane it just means more work for them in the future which means more money paid by insurance. So their incentives are not there. Like there are some roofing companies that will go door to door after a major storm looking for houses basically that have storm damage and get the homeowner to file claim. Looking for things like an out of production shingle so instead of a repair insurance has to buy a whole new roof since replacement shingles don't exist. It's really scummy. The sad thing is this scummy behavior had lead to insurance companies way more likely to deny claims that are valid. I remember seeing a video of roofer with an insurance adjuster acting like what the roofer said was not true or not comment or document it. It was kinda insane and sad at the same time. Last note: Although shingles without a hurricane rating in my opinion should not be installed in places like Florida.
- rayiner 4y ago
  I’d be curious to quantify the subsidy from hurricanes to the higher mortgage subsidies from higher mortgage limits in states that choose to make housing expensive.
  - xyzzyz 4y ago
    One reason why people talk about “hurricane insurance subsidies” in the first place is that it is hard to quantify, so it’s hard to call people on their bullshit. This is similar to introducing arcane metrics like for example “federal dependency” (https://sipanews.fiu.edu/2021/03/24/2021s-most-least-federally-dependent-states/ https://sipanews.fiu.edu/2021/03/24/2021s-most-least-federal...) with nonobvious methodology, and then pretending that the states that are high in “federal dependency” ranking are actually more meaningfully “dependent” on federal government, which doesn’t actually pass muster if you look at the methodology (for example, according to their methodology, a state that collects $1k in taxes per capita, and gets $4k from federal government, while spending $5k per capita, is more dependent on federal government than a state that collects $10k in taxes, gets $10k from feds and spends $20k, which is absurd). Basically, there is a lot of attempts at hoodwinking audience by giving impression that there is some deep quantitative analysis behind the claims, when in fact it’s all just partisan shenanigans.
    - rayiner 4y ago
      Yeah. Maryland and Virginia are never at the top of these lists, even though though their economies are totally built around adjacency to the federal government. These methodologies always seem to count a retiree drawing social security in Florida as federal dependency, but don’t count the northern Virginia employees of a DC lobbying firm as federal dependency.
halpmeh 4y ago
2011 was just after the GFC where MBS caused a global financial meltdown. It's unsurprising that non-government MBS were having a hard time finding a market. And ultimately, government guarantees for MBS is just a symptom of a larger problem. Government support, both in Fed market operations and policies like guaranteeing MBS, artificially lowers the cost of capital for home buyers, which drives up prices.
- salawat 4y ago
  In short, it's priced in.
ericmay 4y ago
Yes, but healthcare is different because society doesn’t accept that people should die on the street when treatment is available. Economically it’s probably more productive to give someone however many more working years too.
- treeman79 4y ago
  Cash prices on non emergency stuff is often drastically cheaper then insurance. Nothing like MRI place asking you’ll pay 500 cash. Of 750 copay with balance billed to insurance
  - ericmay 4y ago
    yea but that’s immaterial in the broader scheme. How do you transport someone who is incapable of transporting themselves to lifesaving treatment? Who pays for chemo? Etc. Of course paying for bandaids or ibuprofen is on the table but that isn’t what we are talking about mostly.
maximilianroos 4y ago
A useful test — which shows this isn't true — is to compare similar goods/services that have dissimilar amounts of regulation. For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.
- gjsman-1000 4y ago
  > For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. You forget indirect regulation. Veterinary drugs, veterinary education, and similar are quite regulated and expensive. So much so, that the average cost of vet school for in-state residents is over $200,000. Out-of-state, make it closer to $300K. The average cost of acquiring FDA approval of a new animal drug is $100 million and takes seven years. If you call that "lightly regulated" I don't know what "heavy regulation" is. So, to be honest, I don't believe your comparison is accurate. EDIT: This does depend on the estimate used (my first one was from https://www.veterinarypracticenews.com/efficacy-vs-cost/ https://www.veterinarypracticenews.com/efficacy-vs-cost/). Others say it is closer to $30 million for livestock and 9 years, but costs crossed $62 million in some cases (https://ahi.org/approval-and-regulation-of-animal-medicines/ https://ahi.org/approval-and-regulation-of-animal-medicines/). It seems to depend on how broadly "animal" is defined and the type of drug in question, but it's all under FDA purview. Regardless of how it is defined, it doesn't fall in my view as being nearly as "lightly regulated" as implied.
  - AlexandrB 4y ago
    I think this is completely irrelevant given the much more pertinent example given: > Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.
    - 4y ago
AlexandrB 4y ago
Don't forget AirBnB which has helped take a significant amount of housing stock off the market: https://comptroller.nyc.gov/reports/the-impact-of-airbnb-on-nyc-rents/ https://comptroller.nyc.gov/reports/the-impact-of-airbnb-on-...
- maerF0x0 4y ago
  or did it make it more malleable for customers who wanted sub 12month leases? (And not absurdly priced like some apartment companies who will charge 3x the monthly rent for 1 month leases) When i Moved to the US AirBnb was my best option to get a 2 week home while I hunted for where I would lease for 12 months. A hotel would have easily cost me double because i got a good week or 2 week rate (i forget which) .
  - AlexandrB 4y ago
    Yes, AirBnB brought down the cost of short term rentals by removing stock from the long term rental market. I think this is a net-negative for society and consumers. It's great that you saved money for a 2 week rental. That was more than made up by someone else who has had to pay more for housing for years.
    - maerF0x0 4y ago
      If AirBnb truly made the market prices go up, then beyond short term shocks it's more of city hall's (and NIMBYism) fault that new supply couldn't come to market (such as rezoning) . America has a massive zoning issue that is causing all kinds of pain and suffering to lower middle class and below. https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=7pq-UvE1j1Q https://www.youtube.com/watch?v=7pq-UvE1j1Q
    - deleted 4y ago
      [deleted]
- BurningFrog 4y ago
  But Airbnb's are housing! That's on the market!
mrep 4y ago
Government backed loans aren't the problem. The US has the 5th lowest housing price to income ratio [0]. Perceptions are just massively skewed by wealthy areas with geographical constraints and strict zoning laws which restrict local supply against demand and everyone complaining focuses on those areas. [0]: https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count...
- lupire 4y ago
  Where are the $million houses of the OP?
  - aperson_hello 4y ago
    SF (median house price 1.9m) for one...
- maxerickson 4y ago
  Tight supply and government backed mortgages can both be contributors. I can't imagine taking out the loan I supposedly qualify for. Meanwhile, people calculate affordability based on a percentage of their income rather than sweating the overall longterm value of a particular property.
- nonethewiser 4y ago
  The unaffordability of housing is A Tale of 20 Cities.
nathanvanfleet 4y ago
I am laughing at your news source https://twitter.com/reason/status/1595878173341847552 https://twitter.com/reason/status/1595878173341847552
fswd 4y ago
because it's a huge source for nation states in calculating/gamifying the GDP. It's a conflict of interest. Example: China.
jameshart 4y ago
This assertion should be fairly testable, since the level of government assistance in these fields varies greatly between different countries.
- nonethewiser 4y ago
  As do most of the factors. One thing we know for sure: subsidies result in more.
bumby 4y ago
How do we explain away data that doesn’t fit this model? For example, post-WW2 saw a massive influx of govt subsidized education in the form of the GI Bill. But the massive rise in education costs is a much more recent phenomenon.
- bottlepalm 4y ago
  It's funny how you bring up a great example to further my point. "After the GI Bill was instituted in the 1940s, a number of 'fly-by-night' vocational schools were created. Some of these for-profit colleges still target veterans, who are excluded from the 90-10 rule for federal funding. This loophole encourages for-profit colleges to target and aggressively recruit veterans and their families. Legislative efforts to close the 90-10 loophole have failed. According to the GI Bill Comparison Tool, the largest recipients of GI Bill Funds are University of Phoenix $190,941,289 ..." https://en.wikipedia.org/wiki/G.I._Bill#Colleges_that_target_veterans https://en.wikipedia.org/wiki/G.I._Bill#Colleges_that_target...
  - bumby 4y ago
    Does this explain the fact that this pattern didn’t show up in the not-for-profit schools until much later? I’m not against the idea that govt subsidies raise prices, but it seems like cherry picking to fit a shaky model.[1] If it’s a primary factor, wouldn’t we see that across all schools? Perhaps there’s a different, more foundational cause and we’re being fooled by spurious correlation. If it isn’t applicable elsewhere I fail to see how it can be labeled a root cause. [1]For example, UofPhoenix was not founded until the late 1970s. This also corresponds to a handful of other societal factors can can be argued contributed to educational costs. If the GI Bill was primarily driving these costs, we should see it in the way the benefits were implemented. Like a high spike post WW2, to waning post Vietnam, to slightly higher with the Montgomery GI bill, to another spike with the post 9/11 GI Bill. But college tuition costs seem to be a fairly steady march higher, including not-for-profit non-vocational schools.
- landemva 4y ago
  >> massive rise in education costs is a much more recent phenomenon. Clinton did it by making most student loan debt non-dischargeable in bankruptcy. https://thehill.com/blogs/congress-blog/economy-budget/283625-how-the-clinton-administration-made-it-harder-on-student https://thehill.com/blogs/congress-blog/economy-budget/28362...

cyanydeez 4y ago

Especially places like Florida, Louisiana and Texas that continue to lose to hurricanes and continue to get bailed out despite being rebuilt in high risk neighborhoods. Climate change denialism is expensive.

sitkack 4y ago
For blue states. I wonder if you could calculate how much federal relief a patch of land has received over the last 50 years?
- TMWNN 4y ago
  >For blue states You mean "NY, NJ, CT, and MA". They are the states that provide the vast majority of the surplus in federal taxes paid by its people versus expenditures to them and their states.[1] Four other states also have substantial surpluses, of which two voted for Clinton and Biden, and two voted for Trump both times. Every other state either breaks even (CA among them) or receives more than their people pay in taxes. Of the ten states that get back the most, five and a half (of Maine) voted for Clinton/Biden and four and a half voted for Trump/Trump. Source: Rockefeller Institute's annual studies on the subject. [1] Yes, they are all Democratic states today, but this was exactly the same a century ago, when MA and CT were solidly Republican and NJ and NY were swing states.
replygirl 4y ago
ok inland cities, build up your housing stock and job market so people can move to you
- humanrebar 4y ago
  Most of Texas is pretty far inland.
  - replygirl 4y ago
    hey. i live in texas current data don't seem to be available, but pre-pandemic, texas had a housing shortage of over 300k units, the shortage having nearly tripled in less than a decade. that's likely to be worse now. it sure feels worse a good many of the people immigrating from coastal cities are in a group privileged to remote into coastal jobs. experience corroborates that as well
richk449 4y ago
There are now places in California where the only fire insurance you can buy is through the state, because private insurers bailed out.
- fshbbdssbbgdd 4y ago
  That’s because the state banned insurers from using up-to-date risk models: https://www.ecologylawquarterly.org/currents/californias-ban-on-climate-informed-models-for-wildfire-insurance-premiums/ https://www.ecologylawquarterly.org/currents/californias-ban... A bad policy, to be sure, but that doesn’t mean the homes are inherently uninsurable.
  - deleted 4y ago
    [deleted]
treeman79 4y ago
These places have had hurricanes for centuries at least. If humans didn’t exist at all. It would still be getting hurricanes.
- deleted 4y ago
  [deleted]
- bumby 4y ago
  Remember, risk is most often measured across the dimensions of probability and severity. So even if probability is the same, total risk can be higher is severity increases. Risk is the currency of insurance.
- kelnos 4y ago
  Sure, but look at the frequency and severity of them more recently, and it starts to get a little scary.
adrr 4y ago
Florida is going to get interesting when the state won’t be able to purchase reinsurance for their state ran insurance company. Insurance companies have been running at a loss even during non hurricanes years and Ian will make them all pull out. You can’t get loans if you don’t have insurance.
- chii 4y ago
  i bet they will vote in someone to pass federal legislation with which they receive subsidies that gets spent on making insurance companies whole (aka, take on the losses). Then they will perpetuate the situation, until the coast line sinks.
- xenadu02 4y ago
  If you want to live in a Hurricane-prone area you should build to hurricane-resistant standards. Yet what does every single new home in Florida have? A composite shingle roof, no built-in 100mph+ storm shutters, etc. No requirement for built-in backup power. This is one instance where insurance should be free to properly price risk. Make classifications of storm resistance and price each home based on what standard it meets. Frankly California has the same problem with earthquake insurance even though it's all sold by the state created (but supposedly not backed) authority. The rates mostly don't reflect any earthquake-proofing nor what standard the home was built to. If you retrofit a 1930s home to the best modern standard you still pay the same rate as your neighbor who did not.
  - anfilt 4y ago
    There are composite shingles rated for hurricane winds. Although for that rating nail placement is critical. Sadly the most common screwed up thing on roof installs is nail placement. This can lead to leaks in 5+ years generally. However, in the case high winds if the nail is not on the common bond the nail can pop through the shingle. Also most manufactures require a ring shanked nail for the hurricane rating. Again most roofers use only a smooth electro-galvanized nail because it's cheap. And once one shingle pops loose suddenly it's much easier for the wind to get under the other shingles near by and the failure can cascade like dominoes in a hurricane situation. Going from a simple repair to replacement of a section or to a whole roof replacement. Also an other aspect is double checking the shingles are properly placed otherwise the seal strip won't adhere in the correct spot on the shingle below making it easier for the adhesive to come loose and again same problem. The thing is if you have seen how fast most roofing companies put a roof on a house do you think they are going to do this right? Also sadly if the roof fails during a hurricane it just means more work for them in the future which means more money paid by insurance. So their incentives are not there. Like there are some roofing companies that will go door to door after a major storm looking for houses basically that have storm damage and get the homeowner to file claim. Looking for things like an out of production shingle so instead of a repair insurance has to buy a whole new roof since replacement shingles don't exist. It's really scummy. The sad thing is this scummy behavior had lead to insurance companies way more likely to deny claims that are valid. I remember seeing a video of roofer with an insurance adjuster acting like what the roofer said was not true or not comment or document it. It was kinda insane and sad at the same time. Last note: Although shingles without a hurricane rating in my opinion should not be installed in places like Florida.
rayiner 4y ago
I’d be curious to quantify the subsidy from hurricanes to the higher mortgage subsidies from higher mortgage limits in states that choose to make housing expensive.
- xyzzyz 4y ago
  One reason why people talk about “hurricane insurance subsidies” in the first place is that it is hard to quantify, so it’s hard to call people on their bullshit. This is similar to introducing arcane metrics like for example “federal dependency” (https://sipanews.fiu.edu/2021/03/24/2021s-most-least-federally-dependent-states/ https://sipanews.fiu.edu/2021/03/24/2021s-most-least-federal...) with nonobvious methodology, and then pretending that the states that are high in “federal dependency” ranking are actually more meaningfully “dependent” on federal government, which doesn’t actually pass muster if you look at the methodology (for example, according to their methodology, a state that collects $1k in taxes per capita, and gets $4k from federal government, while spending $5k per capita, is more dependent on federal government than a state that collects $10k in taxes, gets $10k from feds and spends $20k, which is absurd). Basically, there is a lot of attempts at hoodwinking audience by giving impression that there is some deep quantitative analysis behind the claims, when in fact it’s all just partisan shenanigans.
  - rayiner 4y ago
    Yeah. Maryland and Virginia are never at the top of these lists, even though though their economies are totally built around adjacency to the federal government. These methodologies always seem to count a retiree drawing social security in Florida as federal dependency, but don’t count the northern Virginia employees of a DC lobbying firm as federal dependency.

halpmeh 4y ago

2011 was just after the GFC where MBS caused a global financial meltdown. It's unsurprising that non-government MBS were having a hard time finding a market. And ultimately, government guarantees for MBS is just a symptom of a larger problem. Government support, both in Fed market operations and policies like guaranteeing MBS, artificially lowers the cost of capital for home buyers, which drives up prices.

salawat 4y ago
In short, it's priced in.

ericmay 4y ago

Yes, but healthcare is different because society doesn’t accept that people should die on the street when treatment is available. Economically it’s probably more productive to give someone however many more working years too.

treeman79 4y ago
Cash prices on non emergency stuff is often drastically cheaper then insurance. Nothing like MRI place asking you’ll pay 500 cash. Of 750 copay with balance billed to insurance
- ericmay 4y ago
  yea but that’s immaterial in the broader scheme. How do you transport someone who is incapable of transporting themselves to lifesaving treatment? Who pays for chemo? Etc. Of course paying for bandaids or ibuprofen is on the table but that isn’t what we are talking about mostly.

maximilianroos 4y ago

A useful test — which shows this isn't true — is to compare similar goods/services that have dissimilar amounts of regulation. For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.

gjsman-1000 4y ago
> For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. You forget indirect regulation. Veterinary drugs, veterinary education, and similar are quite regulated and expensive. So much so, that the average cost of vet school for in-state residents is over $200,000. Out-of-state, make it closer to $300K. The average cost of acquiring FDA approval of a new animal drug is $100 million and takes seven years. If you call that "lightly regulated" I don't know what "heavy regulation" is. So, to be honest, I don't believe your comparison is accurate. EDIT: This does depend on the estimate used (my first one was from https://www.veterinarypracticenews.com/efficacy-vs-cost/ https://www.veterinarypracticenews.com/efficacy-vs-cost/). Others say it is closer to $30 million for livestock and 9 years, but costs crossed $62 million in some cases (https://ahi.org/approval-and-regulation-of-animal-medicines/ https://ahi.org/approval-and-regulation-of-animal-medicines/). It seems to depend on how broadly "animal" is defined and the type of drug in question, but it's all under FDA purview. Regardless of how it is defined, it doesn't fall in my view as being nearly as "lightly regulated" as implied.
- AlexandrB 4y ago
  I think this is completely irrelevant given the much more pertinent example given: > Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.
  - 4y ago

AlexandrB 4y ago

Don't forget AirBnB which has helped take a significant amount of housing stock off the market: https://comptroller.nyc.gov/reports/the-impact-of-airbnb-on-nyc-rents/ https://comptroller.nyc.gov/reports/the-impact-of-airbnb-on-...

maerF0x0 4y ago
or did it make it more malleable for customers who wanted sub 12month leases? (And not absurdly priced like some apartment companies who will charge 3x the monthly rent for 1 month leases) When i Moved to the US AirBnb was my best option to get a 2 week home while I hunted for where I would lease for 12 months. A hotel would have easily cost me double because i got a good week or 2 week rate (i forget which) .
- AlexandrB 4y ago
  Yes, AirBnB brought down the cost of short term rentals by removing stock from the long term rental market. I think this is a net-negative for society and consumers. It's great that you saved money for a 2 week rental. That was more than made up by someone else who has had to pay more for housing for years.
  - maerF0x0 4y ago
    If AirBnb truly made the market prices go up, then beyond short term shocks it's more of city hall's (and NIMBYism) fault that new supply couldn't come to market (such as rezoning) . America has a massive zoning issue that is causing all kinds of pain and suffering to lower middle class and below. https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=SfsCniN7Nsc https://www.youtube.com/watch?v=7pq-UvE1j1Q https://www.youtube.com/watch?v=7pq-UvE1j1Q
  - deleted 4y ago
    [deleted]
BurningFrog 4y ago
But Airbnb's are housing! That's on the market!

mrep 4y ago

Government backed loans aren't the problem. The US has the 5th lowest housing price to income ratio [0]. Perceptions are just massively skewed by wealthy areas with geographical constraints and strict zoning laws which restrict local supply against demand and everyone complaining focuses on those areas. [0]: https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count...

lupire 4y ago
Where are the $million houses of the OP?
- aperson_hello 4y ago
  SF (median house price 1.9m) for one...
maxerickson 4y ago
Tight supply and government backed mortgages can both be contributors. I can't imagine taking out the loan I supposedly qualify for. Meanwhile, people calculate affordability based on a percentage of their income rather than sweating the overall longterm value of a particular property.
nonethewiser 4y ago
The unaffordability of housing is A Tale of 20 Cities.

nathanvanfleet 4y ago

I am laughing at your news source https://twitter.com/reason/status/1595878173341847552 https://twitter.com/reason/status/1595878173341847552

fswd 4y ago

because it's a huge source for nation states in calculating/gamifying the GDP. It's a conflict of interest. Example: China.

jameshart 4y ago

This assertion should be fairly testable, since the level of government assistance in these fields varies greatly between different countries.

nonethewiser 4y ago
As do most of the factors. One thing we know for sure: subsidies result in more.

bumby 4y ago

How do we explain away data that doesn’t fit this model? For example, post-WW2 saw a massive influx of govt subsidized education in the form of the GI Bill. But the massive rise in education costs is a much more recent phenomenon.

bottlepalm 4y ago
It's funny how you bring up a great example to further my point. "After the GI Bill was instituted in the 1940s, a number of 'fly-by-night' vocational schools were created. Some of these for-profit colleges still target veterans, who are excluded from the 90-10 rule for federal funding. This loophole encourages for-profit colleges to target and aggressively recruit veterans and their families. Legislative efforts to close the 90-10 loophole have failed. According to the GI Bill Comparison Tool, the largest recipients of GI Bill Funds are University of Phoenix $190,941,289 ..." https://en.wikipedia.org/wiki/G.I._Bill#Colleges_that_target_veterans https://en.wikipedia.org/wiki/G.I._Bill#Colleges_that_target...
- bumby 4y ago
  Does this explain the fact that this pattern didn’t show up in the not-for-profit schools until much later? I’m not against the idea that govt subsidies raise prices, but it seems like cherry picking to fit a shaky model.[1] If it’s a primary factor, wouldn’t we see that across all schools? Perhaps there’s a different, more foundational cause and we’re being fooled by spurious correlation. If it isn’t applicable elsewhere I fail to see how it can be labeled a root cause. [1]For example, UofPhoenix was not founded until the late 1970s. This also corresponds to a handful of other societal factors can can be argued contributed to educational costs. If the GI Bill was primarily driving these costs, we should see it in the way the benefits were implemented. Like a high spike post WW2, to waning post Vietnam, to slightly higher with the Montgomery GI bill, to another spike with the post 9/11 GI Bill. But college tuition costs seem to be a fairly steady march higher, including not-for-profit non-vocational schools.
landemva 4y ago
>> massive rise in education costs is a much more recent phenomenon. Clinton did it by making most student loan debt non-dischargeable in bankruptcy. https://thehill.com/blogs/congress-blog/economy-budget/283625-how-the-clinton-administration-made-it-harder-on-student https://thehill.com/blogs/congress-blog/economy-budget/28362...