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> 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 st

> 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

> 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).