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Housing prices are very much priced based on supply and demand. When supply is constrained, for whatever reason, prices go up. You have a couple things happeni
by etempleton 4y ago
Housing prices are very much priced based on supply and demand. When supply is constrained, for whatever reason, prices go up.
You have a couple things happening right now that are constraining supply:
1. Building has never fully recovered from the last housing crises.
2. Banks own way too much real estate and that leads to a level of price control if for no other reason then they can afford to be patient.
3. Speaking about the USA in particular, there is a lot of NIMBYism.
If you want to decrease prices build more. Don’t worry if it is low income or high income, just build more and prices will go down. It is unrealized revenue to let apartments sit empty and most private sellers can’t afford nor want to keep paying property taxes on a home that won’t sell.
- balderdash 4y agoI’d add that building more is not the only solution to increasing supply: some societal and zoning changes, like bringing back boarding houses would make a meaningful impact on supply. Apparently 1/3-1/2 of urban dwellers either rented a room or were a boarder [1] in the 18th century. [1]https://en.m.wikipedia.org/wiki/Boarding_house https://en.m.wikipedia.org/wiki/Boarding_house
- aschearer 4y agoSeeking to return to the living conditions of the 18th century is a bold policy position!
- dchftcs 4y agoWell, yeah, what century's living conditions does homelessness correspond to?
- defrost 4y ago19th Century Victorian London - the time of coffin beds and T'penny hangers (hard benches with a rope to hang your body across as you slept sitting upright). https://www.theguardian.com/artanddesign/2015/jan/02/homelessness-victorian-london-exhibition-geffrye-museum https://www.theguardian.com/artanddesign/2015/jan/02/homeles... https://www.jack-the-ripper-tour.com/generalnews/the-homeless-of-victorian-london/ https://www.jack-the-ripper-tour.com/generalnews/the-homeles...
- fbdab103 4y agoI needed a visual, and this site[0] has a picture of a two-penny hangover. Which looks to be just a rope hanging over some hay. [0]: https://www.historic-uk.com/CultureUK/Two-Penny-Hangover/ https://www.historic-uk.com/CultureUK/Two-Penny-Hangover/
- defrost 4y agoThat's the one .. there was a whole range of "sleeping" accomadations for the homeless in Victorian London and I muddled two together .. situp benches & a rope to drape over - my bad. Welcome to the literal "Dickensian Aspect" ref'd in the fifth season of The Wire.
- carom 4y agoIt beats living in a tent below an underpass.
- watwut 4y agoThere is wild huge gap between what zoning enforces and "living conditions of the 18th century". You can even ease on zoning while creating better living environment then currently exists.
- scld 4y ago.....or how millions of college students live every day! Which....is the preferred living situation one year, and inhumane the next????
- triceratops 4y agoMany people will happily sleep in a warm, safe room instead of a tent in a park. Even if they have to share a bathroom.
- virtualwhys 4y agoAirbnb nicely fills the modern day boarding house market, although it's slightly more expensive than the equivalent 18th century room for rent.
- TedDoesntTalk 4y agoSlightly? Not where I live. The fees are always insane. Like cleaning fees that are 50-100% of the nightly cost
- virtualwhys 4y agoI neglected the /s, oh well, I'm in complete agreement with you :)
- glitchc 4y agoThat's pre-industrial revolution. No way this makes sense today.
- glial 4y agoBeats sleeping in the park.
- johngladtj 4y agoThat's effectively the same as "build more" since you're adding additional housing slots to the market.
- ipnon 4y agoThis kind of housing is still common in NYC, mostly in Queens. It’s all under the table and obviously illegal, but it’s the most affordable option in a prohibitively expensive city. I would say most are run by slum lords who are not dealing with tenants fairly in someway, for example price gouging or prejudicial application processes (no Muslims, must be Japanese, must speak Spanish, etc.). The city has tried to squash these because they’re dangerous. During the last major floods hundreds were injured and many died due to these basement boarding units flooding. I agree with sibling posters when I say making these more prevalent would be a step backwards. Source: I used to live in one!
- jross225 4y agoMost people (on this website) likely have lived in dorms at school, which are not too different than a boarding house.
- triceratops 4y agoThere's nothing inherently unsafe about boarding houses, and they're clearly filling a market need. Why not regulate them for safety and fairness?
- komali2 4y ago> If you want to decrease prices build more Estimates put 60,000 vacant units in San Francisco. What number of vacant, newly built units do you believe will actually bring prices down? https://www.sfchronicle.com/realestate/article/SF-Victorian-vacant-17542833.php https://www.sfchronicle.com/realestate/article/SF-Victorian-... https://www.kron4.com/news/bay-area/61000-homes-are-empty-in-san-francisco-report/ https://www.kron4.com/news/bay-area/61000-homes-are-empty-in... In my experience builders build luxury condos and apartments that are priced the same as the overpriced rent rate standard the city is at right now. Last I checked new builds were at 3.5k/month for a one bedroom apartment in the city. Really great apartment, don't get me wrong, but not sure why people keep beating the "if you add more supply, the price goes down" drum, it doesn't seem to hold true in reality.
- klipt 4y ago> "if you add more supply, the price goes down" drum, it doesn't seem to hold true in reality. Plenty of empirical, academic studies show it does hold true. See: https://www.theurbanist.org/2021/06/02/new-round-of-studies-underscore-benefits-of-building-more-housing/ https://www.theurbanist.org/2021/06/02/new-round-of-studies-... But the numbers matter. Adding a tiny bit of supply is better than no supply, but won't help as much as a lot of supply.
- komali2 4y agoSure, sometimes, yes, but like I said, the "build more and prices goes down!" is just too simple. https://shelterforce.org/2020/06/19/more-housing-could-increase-affordability-but-only-if-you-build-it-in-the-right-places-urban_housing/ https://shelterforce.org/2020/06/19/more-housing-could-incre... It also distracts from highly effective solutions, such as social housing: https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://www.npr.org/local/305/2020/02/25/809315455/how-european-style-public-housing-could-help-solve-the-affordability-crisis https://www.npr.org/local/305/2020/02/25/809315455/how-europ... Giving too much credence to an oversimplified "supply / demand" argument in the housing sector, which describes a human right, means that as soon as you mention socialized policies, people start complaining about "polluting" a "pure market supply / demand curve," despite the fact that supply / demand is just too simple a mechanism to describe a core human need, shelter. (It's such a core need it's literally the first thing one should seek in an lost-in-the-wilderness emergency, above food or even water). Anyway, what's it gonna be then? 100,000 new units at 3k/month? 200,000? When will the price automagically come down? And why is that better than the government simply buying out vacant units and giving them to the homeless, for starters, and then building blocks of housing at set rates?
- gruez 4y ago>2. Banks own way too much real estate and that leads to a level of price control if for no other reason then they can afford to be patient. Are you suggesting that the banks are leaving the homes vacant? If not, and they're renting it out, doesn't that add to the housing supply insofar as supplying places for people to live?
- tpxl 4y agoYes, where I live, the banks are intentionally leaving the homes vacant. After the shit hit the fan in 2008/2009, the government bailed out a bunch of banks and acquired a bunch of houses in the process. Those houses have been slowly leaking to market so they 'wouldn't disrupt the housing market'.
- bell-cot 4y agoMaybe. But, for a bank, carrying a load of vacant houses long-term is an expensive, risky, and unfamiliar adventure. Even if an "all in nice neighborhoods" hand-wave keeps the vandals, squatters, and looters away - you've still got property taxes, utilities, and upkeep. And "vacant" usually guarantees that no one notices stuff like leaking pipes until they get expensive.
- etempleton 4y agoI suspect the glut of bank owned homes might suddenly burst. Right now banks are finding it more profitable to rent these homes and own them as appreciating assets, but what happens if rental prices bottom out, or the banks need cash? I could see mass sell offs.
- kevviiinn 4y agoWhy would a vacant house have running water? They shut down the utilities, no?
- LatteLazy 4y agoI see this claim sometimes but I have never been able to find figures for how many houses banks are holding and are NOT for sale. I guess one of the upsides of non-zero interest rates (especially for banks) is that they suddenly have a big incentive NOT to sit on assets like this...
- diogenescynic 4y ago>When supply is constrained, for whatever reason, prices go up. It's the law of supply and demand, when supply goes down but demand remains the same or goes up, then it moves the price equilibrium up. This is why the only solution is to build more and add more supply to meet demand. Everything else is a half-measure that will fail or is a lottery solution (i.e. BMR and affordable housing requirements) that only solves the issue for a few lucky winners.