4 ms·

It’s doesn’t really matter the source of the law, only whom leverages or extends them to serve their specific ends. The same institutional investors you cite ar

It’s doesn’t really matter the source of the law, only whom leverages or extends them to serve their specific ends. The same institutional investors you cite are also buying up construction capacity with the express purpose of building rentals vs. homes to purchase. Perpetually siphoning off the wealth of workers is being turned into a highly-financialized, internationalized asset. I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive.

AnthonyMouse 3y ago
> The same institutional investors you cite are also buying up construction capacity with the express purpose of building rentals vs. homes to purchase. That still increases the housing supply and ultimately lowers prices. > Perpetually siphoning off the wealth of workers is being turned into a highly-financialized, internationalized asset. Which is exactly the mistake they're making, because the laws that prop up the value of those "assets" are local laws which hold because they're supported by local voters who are homeowners. Make the local voters tenants and the property owners non-constituents and what do the local politicians do? > I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive. Politicians respond to things that get them reelected. That's often donors because money lets them buy advertising and get more votes. But that mainly applies to two kinds of issues. The kind that affect most people only a trivial amount but the donors a lot, in which case it won't change many votes. And the kind that affect a small number of people a lot, but they don't have many votes to change. In each of these cases the donor's money buys them more votes through advertising than they lose through screwing people. Housing is an issue that affects most people by a significant amount. And the structure of how it got the way it is isn't amenable to the way they exercise power. Supply is limited because local jurisdictions all have a similar incentive structure. The people who can vote there already live there, so when the people who live there are homeowners, they vote to raise local housing prices. The same obtains everywhere so housing prices go up everywhere. But a single locality can reduce regional housing prices by enabling a large amount of construction, because people will move there from any place within an hour's drive if it will save them a quarter of a million dollars on housing. The status quo is only enabled by nearly every locality having the same incentives. It only takes a small fraction where a majority of local residents want housing prices to go down. The normal way monied interests prevent this kind of local diversity breaking their monopoly is by capturing the regional or national government. But the only reason the local government could be captured in this way is that you had to be a local resident (and so, historically, already be a local homeowner) before you get a vote there. So they didn't have to overcome the interests of all the prospective buyers who are in some nearby but different jurisdiction. Which is what they would have to do to get a law passed at the state or national level -- which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here.
- bugglebeetle 3y ago
  > which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here. There are no state or federal-level laws under consideration or that have been passed that will or even intend to reduce housing prices in line with, say, median income for millennial home buyers (the largest cohort currently affected by the housing shortage). That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna. Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before. This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash.
  - AnthonyMouse 3y ago
    > That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna. The main thing it would take is to eliminate zoning density restrictions. Then someone could buy a single family home near a city, replace it with a 10-story condo, and make a lot of money. Repeat for as long as housing prices are high. There are a lot of people who want to make a lot of money over and over again. It would also help significantly to streamline the permitting process and reform various NIMBY laws that can hold up construction. The state doesn't need to "direct" anything -- all they have to do is stop prohibiting it. Building housing when housing prices are high is profitable. You don't need a law to coerce people to do something that makes them money. > Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before. The Builders Remedy isn't the most well-tailored rule in the world (classic "put arbitrary numbers in something to make it sound managerial" vibe), but it pretty effectively prevents localities from prohibiting new construction. (You might also need something that prevents them from making it prohibitively expensive.) > This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash. That kind of thing is a joke. It immediately disintegrates as soon as the vacancy rate is above zero because every single landlord has the incentive to defect to fill their empty unit, because a paying tenant at 80% as much rent is 80% more than an empty unit. Landlords don't have any kind of market power. There are too many of them and anyone with a moderate amount of capital can enter the market. The long-term high prices are entirely from the legal restrictions on creating more supply. And one of the reason prices are so high right now, even though interest rates are up (which should tend to lower prices), is the gridlock thing. But that's inherently temporary, though it could last for more than a year (during which time it makes new construction even more profitable).

AnthonyMouse 3y ago

> The same institutional investors you cite are also buying up construction capacity with the express purpose of building rentals vs. homes to purchase. That still increases the housing supply and ultimately lowers prices. > Perpetually siphoning off the wealth of workers is being turned into a highly-financialized, internationalized asset. Which is exactly the mistake they're making, because the laws that prop up the value of those "assets" are local laws which hold because they're supported by local voters who are homeowners. Make the local voters tenants and the property owners non-constituents and what do the local politicians do? > I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive. Politicians respond to things that get them reelected. That's often donors because money lets them buy advertising and get more votes. But that mainly applies to two kinds of issues. The kind that affect most people only a trivial amount but the donors a lot, in which case it won't change many votes. And the kind that affect a small number of people a lot, but they don't have many votes to change. In each of these cases the donor's money buys them more votes through advertising than they lose through screwing people. Housing is an issue that affects most people by a significant amount. And the structure of how it got the way it is isn't amenable to the way they exercise power. Supply is limited because local jurisdictions all have a similar incentive structure. The people who can vote there already live there, so when the people who live there are homeowners, they vote to raise local housing prices. The same obtains everywhere so housing prices go up everywhere. But a single locality can reduce regional housing prices by enabling a large amount of construction, because people will move there from any place within an hour's drive if it will save them a quarter of a million dollars on housing. The status quo is only enabled by nearly every locality having the same incentives. It only takes a small fraction where a majority of local residents want housing prices to go down. The normal way monied interests prevent this kind of local diversity breaking their monopoly is by capturing the regional or national government. But the only reason the local government could be captured in this way is that you had to be a local resident (and so, historically, already be a local homeowner) before you get a vote there. So they didn't have to overcome the interests of all the prospective buyers who are in some nearby but different jurisdiction. Which is what they would have to do to get a law passed at the state or national level -- which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here.

bugglebeetle 3y ago
> which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here. There are no state or federal-level laws under consideration or that have been passed that will or even intend to reduce housing prices in line with, say, median income for millennial home buyers (the largest cohort currently affected by the housing shortage). That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna. Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before. This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash.
- AnthonyMouse 3y ago
  > That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna. The main thing it would take is to eliminate zoning density restrictions. Then someone could buy a single family home near a city, replace it with a 10-story condo, and make a lot of money. Repeat for as long as housing prices are high. There are a lot of people who want to make a lot of money over and over again. It would also help significantly to streamline the permitting process and reform various NIMBY laws that can hold up construction. The state doesn't need to "direct" anything -- all they have to do is stop prohibiting it. Building housing when housing prices are high is profitable. You don't need a law to coerce people to do something that makes them money. > Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before. The Builders Remedy isn't the most well-tailored rule in the world (classic "put arbitrary numbers in something to make it sound managerial" vibe), but it pretty effectively prevents localities from prohibiting new construction. (You might also need something that prevents them from making it prohibitively expensive.) > This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash. That kind of thing is a joke. It immediately disintegrates as soon as the vacancy rate is above zero because every single landlord has the incentive to defect to fill their empty unit, because a paying tenant at 80% as much rent is 80% more than an empty unit. Landlords don't have any kind of market power. There are too many of them and anyone with a moderate amount of capital can enter the market. The long-term high prices are entirely from the legal restrictions on creating more supply. And one of the reason prices are so high right now, even though interest rates are up (which should tend to lower prices), is the gridlock thing. But that's inherently temporary, though it could last for more than a year (during which time it makes new construction even more profitable).