4 ms·

The housing market is probably permanently ruined for individual family buyers as long as they are competing with businesses/individuals buying multiple residen

The housing market is probably permanently ruined for individual family buyers as long as they are competing with businesses/individuals buying multiple residential properties as investments. Subsidies or government backed contributions won't be the answer. Universities have a societal function and could conceivable operate without profit in mind, but they still chose to be greedy and act like for-profit businesses once government backed loans became a thing. The government tried to fix access to education by directly injecting cash via students instead of fixing it through the universities. Taking the same approach with home buyers would be a mistake because real estate obviously is meant to be for-profit and acts that way, so they will obviously raise prices as well. So you'll probably need to fuck over a lot of banks, investors, construction and real estate companies to get housing prices accessible to the wider population and change economic interactions in that market. I wouldn't count on that though - the government will probably choose to fix it through backed loans or subsidies again, if they do anything.

hollerith 3y ago
It wouldn't be Hacker News without the constant stream economically-illiterate ideas for "improving" our lives in the comments!
- vsareto 3y ago
  I'm not sure what you mean? Could you explain? Does it really bother you someone could be ignorant of something here?
  - hollerith 3y ago
    >Could you explain? Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers without explaining how the housing market or one particular housing market is different from all the other markets were investors are helpful for bringing products and services to individuals and families. I am sympathetic for example to the argument that the housing market in Vancouver and perhaps other parts of Canada is being distorted to the detriment of families by wealthy Chinese wishing to establish a safe trove of assets outside the reach of the Chinese government. But there are more barriers to Chinese investors (and Chinese visitors) in the US than in Canada, and the US is 9 times more populous than Canada, so that makes any particular severity of distortion cause by Chinese investors at least 9 times less likely in the US than in China. Non-Chinese investors who have an accurate understanding of the other investments available to them, on the other hand, will tend to invest in housing only when they seriously expect the demand for housing to increase--"expect" as in actually willing to put money on the outcome, not merely to opine on the outcome in internet forums--so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand. >Does it really bother you someone could be ignorant of something here? I'm not sure I understand the question. If you'd phrase your comment as a question about economics, I wouldn't've replied like I did (with a complaint in the form of sarcasm). Most humans are vulnerable to misinformation if it is repeated sufficiently often by a sufficiently diverse set of writers or speakers, and certain economically-impossible or -implausible arguments are repeated often enough on HN that I consider it worth my time to try to counter.
    - thunky 3y ago
      > Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers So you don't think that adding demand without adding supply makes prices go up? Or you disagree that prices going up makes it harder for a family to buy a house? Edit: I see you added to your comment... > so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand And I still disagree, because this isn't what we see happening.
      - hollerith 3y ago
        The investors entering the market today will make prices go up today, but have the effect of reducing prices in the future (either or renters or buyers, depending on how to investor chooses to recover his investment). Investment in housing in past decades has reduced the price families need to pay now. There a zero investors in housing who are not out to either provide housing for rent or to eventually sell housing. >because this isn't what we see happening. What we see happening has alternative explanations, for example: there are millions of very-high-paying jobs in the Bay Area, which is course is generally a good thing, but it has the undesirable effect of making it hard or impossible for families that do not have one of these very-high-paying jobs to live here because there are strong barriers to the creation of new housing, which forces the people with the high-paying jobs to spend more than want to spend on housing, which (happily for them) they are able to do (because of their high income) but which sadly makes it impossible or very onerous for lower-income families to live in the Bay Area. Most of these barriers are in the form of regulations imposed by local governments. Where I live for example in Marin County, growth is controlled (kept below the level investors as a group would prefer to have it at) in part by denying new housing projects the ability to connect to the Marin Municipal Water District, I have heard.
        thunky 3y ago
        > The investors entering the market today will make prices go up today, but have the effect of reducing prices in the future The flaw in this argument is that it assumes markets are perfectly efficient, when in reality they are affected by several factors. > there are strong barriers to the creation of new housing Right, this is one of those factors. Others include land limitations, interest rates, government incentives and backstops. Plus even if you're right that decades from now housing will be more affordable that's of little use today.
- FactKnower69 3y ago
  Wouldn't be Hacker News without a constant stream of worthless single-sentence dismissals from insufferably smug self-professed Economics 101 graduates

hollerith 3y ago

It wouldn't be Hacker News without the constant stream economically-illiterate ideas for "improving" our lives in the comments!

vsareto 3y ago
I'm not sure what you mean? Could you explain? Does it really bother you someone could be ignorant of something here?
- hollerith 3y ago
  >Could you explain? Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers without explaining how the housing market or one particular housing market is different from all the other markets were investors are helpful for bringing products and services to individuals and families. I am sympathetic for example to the argument that the housing market in Vancouver and perhaps other parts of Canada is being distorted to the detriment of families by wealthy Chinese wishing to establish a safe trove of assets outside the reach of the Chinese government. But there are more barriers to Chinese investors (and Chinese visitors) in the US than in Canada, and the US is 9 times more populous than Canada, so that makes any particular severity of distortion cause by Chinese investors at least 9 times less likely in the US than in China. Non-Chinese investors who have an accurate understanding of the other investments available to them, on the other hand, will tend to invest in housing only when they seriously expect the demand for housing to increase--"expect" as in actually willing to put money on the outcome, not merely to opine on the outcome in internet forums--so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand. >Does it really bother you someone could be ignorant of something here? I'm not sure I understand the question. If you'd phrase your comment as a question about economics, I wouldn't've replied like I did (with a complaint in the form of sarcasm). Most humans are vulnerable to misinformation if it is repeated sufficiently often by a sufficiently diverse set of writers or speakers, and certain economically-impossible or -implausible arguments are repeated often enough on HN that I consider it worth my time to try to counter.
  - thunky 3y ago
    > Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers So you don't think that adding demand without adding supply makes prices go up? Or you disagree that prices going up makes it harder for a family to buy a house? Edit: I see you added to your comment... > so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand And I still disagree, because this isn't what we see happening.
    - hollerith 3y ago
      The investors entering the market today will make prices go up today, but have the effect of reducing prices in the future (either or renters or buyers, depending on how to investor chooses to recover his investment). Investment in housing in past decades has reduced the price families need to pay now. There a zero investors in housing who are not out to either provide housing for rent or to eventually sell housing. >because this isn't what we see happening. What we see happening has alternative explanations, for example: there are millions of very-high-paying jobs in the Bay Area, which is course is generally a good thing, but it has the undesirable effect of making it hard or impossible for families that do not have one of these very-high-paying jobs to live here because there are strong barriers to the creation of new housing, which forces the people with the high-paying jobs to spend more than want to spend on housing, which (happily for them) they are able to do (because of their high income) but which sadly makes it impossible or very onerous for lower-income families to live in the Bay Area. Most of these barriers are in the form of regulations imposed by local governments. Where I live for example in Marin County, growth is controlled (kept below the level investors as a group would prefer to have it at) in part by denying new housing projects the ability to connect to the Marin Municipal Water District, I have heard.
      - thunky 3y ago
        > The investors entering the market today will make prices go up today, but have the effect of reducing prices in the future The flaw in this argument is that it assumes markets are perfectly efficient, when in reality they are affected by several factors. > there are strong barriers to the creation of new housing Right, this is one of those factors. Others include land limitations, interest rates, government incentives and backstops. Plus even if you're right that decades from now housing will be more affordable that's of little use today.
FactKnower69 3y ago
Wouldn't be Hacker News without a constant stream of worthless single-sentence dismissals from insufferably smug self-professed Economics 101 graduates