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Weird sleight of hand. You can obviously lower the market rate by increasing supply. Subsidies on the other hand increase the market rate, below which, correct

Weird sleight of hand. You can obviously lower the market rate by increasing supply. Subsidies on the other hand increase the market rate, below which, correct, you will not get much construction.

brudgers 3y ago
When market rates drop, new market rate housing projects stall and die. They stall and die more quickly than they start as market rates rise. Because investment syndicates fall apart as anticipated rates of return fall, because bank loans are harder to come by, and because existing revenue streams shrink available funding. Real estate economics is very unlike widget economics. The amount of land in desirable locations is fixed.
- ethanbond 3y ago
  Which is why we should have a very high LVT so stalled projects don't keep land off the market until prices rise again.
  - brudgers 3y ago
    The royal family is largest land owner in London. I am not suggesting you were thinking of London. I am saying that analogous forces exist elsewhere and are equally resistant to land reform in favor of unlanded peasants. And by extension that most people are unlanded peasants. Even though they don’t think they are. The Google hotel is for its unlanded peasants. Not the C-suite. The C-suite doesn’t want those people living in their neighborhood.
    - ethanbond 3y ago
      Is this comment attempting to say “fixing this problem will upset powerful people?” I’m aware of that! But that has been true of most of society’s large scale positive transformations.
      - brudgers 3y ago
        It isn’t going to happen because you lack sufficient wherewithal to deliver the violence necessary to make it happen. In the very best case significant land reform happens through the plausible threat of violence. But typically, actual violence is required and military operations are the most cost effective means of land reform at scale.

Weird sleight of hand. You can obviously lower the market rate by increasing supply. Subsidies on the other hand increase the market rate, below which, correct, you will not get much construction.

brudgers 3y ago

When market rates drop, new market rate housing projects stall and die. They stall and die more quickly than they start as market rates rise. Because investment syndicates fall apart as anticipated rates of return fall, because bank loans are harder to come by, and because existing revenue streams shrink available funding. Real estate economics is very unlike widget economics. The amount of land in desirable locations is fixed.

ethanbond 3y ago
Which is why we should have a very high LVT so stalled projects don't keep land off the market until prices rise again.
- brudgers 3y ago
  The royal family is largest land owner in London. I am not suggesting you were thinking of London. I am saying that analogous forces exist elsewhere and are equally resistant to land reform in favor of unlanded peasants. And by extension that most people are unlanded peasants. Even though they don’t think they are. The Google hotel is for its unlanded peasants. Not the C-suite. The C-suite doesn’t want those people living in their neighborhood.
  - ethanbond 3y ago
    Is this comment attempting to say “fixing this problem will upset powerful people?” I’m aware of that! But that has been true of most of society’s large scale positive transformations.
    - brudgers 3y ago
      It isn’t going to happen because you lack sufficient wherewithal to deliver the violence necessary to make it happen. In the very best case significant land reform happens through the plausible threat of violence. But typically, actual violence is required and military operations are the most cost effective means of land reform at scale.