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There's a _really_ cool way to take Wall Street out of the housing market. Build. Enough. Housing. Enough housing means supply meets or exceeds demand which m

There's a _really_ cool way to take Wall Street out of the housing market. Build. Enough. Housing. Enough housing means supply meets or exceeds demand which means prices fall which means Wall Street doesn't get the returns they want which means they move on to prey on something else.

000ooo000 3y ago
Wouldn't removing demand from the likes of Wall St make the required supply much easier to achieve?
- refurb 3y ago
  Wall Street would lose interest if the housing market stopped being pumped.
  - simoncion 3y ago
    Yep. "Cities and municipalities suddenly start building enough housing to meet current and even maybe expected-future demand" is often in the "Known Risks" section of the SEC filings of these sorts of businesses.
- konschubert 3y ago
  No. The renters would then push into the house buying market. The demand would be the same.
  - 000ooo000 3y ago
    That's the required supply I am talking about though
all2 3y ago
But who will build enough housing? And will they be able to do it at a reasonable profit? There have to be the appropriate incentives for builders to produce.
- Wildliferanger 3y ago
  Kind of my concern as well, maybe banning them from buying used housing but no restrictions on them owning new housing so that the money is even more focused on acting as a prime originator for new housing allowing it to trickle down later. Also give like a 10 year or something proptery tax reduction for new construction also increase homestead exemptions to help homeowners but with increased proptery taxes to also encourge them to sell off and not rent housing after the intial honeymoon period. Also would encourge them to purchase demolish and rebuild older housing and ruined housing so they could invest in it healing some of the older rundown areas.
  - JamesBarney 3y ago
    You mention ways to accelerate new housing, but we should maybe just take our foot off the break before we look into acceleration.
  - konschubert 3y ago
    Just allow more new construction. Upzone and speed up the approval process.
jjav 3y ago
> Enough housing means supply meets or exceeds demand which means prices fall While this seems obvious on the surface (if there are more houses than people in some area, prices should drop right), are there real world example of this working that way? More housing just creates more demand which drives more density and yet more demand. The densest area in the US is Manhattan, not known for being a cheap place to live. Second densest is SF, also not a bargain for housing.
- makk 3y ago
  Yeah, and it’s a faulty assumption that all investors price housing on the basis of rents. I recall reading that in Vancouver, BC they had a large influx of foreign money pouring into their housing market because it was a way for foreigners to expatriate their money. Drove prices through the roof. They had to impose measures to discourage it. Those properties, I read, often sat empty because using them for housing was never the intent of the owners.
- seanmcdirmid 3y ago
  Ya, this could be a case of induced demand that we see in freeway building. Making more housing in a hot area where people want to live could conversely encourage more people to move to that hot area. Unless you just have slow growth like Japan/Tokyo, or some kind of residency restriction, I don’t see a way to cheaper prices just by adding in more supply. The increased density is still a win, just don’t expect it to make housing much cheaper.
- esoterica 3y ago
  Manhattan and SF has built almost no housing over the past several decades, and demand has continued to rise anyway, causing skyrocketing prices. Those metro areas are proving the exact opposite point you are trying to make. Building more housing is not what is creating more demand.
- paxys 3y ago
  More housing doesn't create demand, the city's economy creates demand. This is exactly why people have kept pouring into NYC and SF over the last few decades while the rate of new construction has slowed down to a crawl and nothing is affordable.

000ooo000 3y ago

Wouldn't removing demand from the likes of Wall St make the required supply much easier to achieve?

refurb 3y ago
Wall Street would lose interest if the housing market stopped being pumped.
- simoncion 3y ago
  Yep. "Cities and municipalities suddenly start building enough housing to meet current and even maybe expected-future demand" is often in the "Known Risks" section of the SEC filings of these sorts of businesses.
konschubert 3y ago
No. The renters would then push into the house buying market. The demand would be the same.
- 000ooo000 3y ago
  That's the required supply I am talking about though

all2 3y ago

But who will build enough housing? And will they be able to do it at a reasonable profit? There have to be the appropriate incentives for builders to produce.

Wildliferanger 3y ago
Kind of my concern as well, maybe banning them from buying used housing but no restrictions on them owning new housing so that the money is even more focused on acting as a prime originator for new housing allowing it to trickle down later. Also give like a 10 year or something proptery tax reduction for new construction also increase homestead exemptions to help homeowners but with increased proptery taxes to also encourge them to sell off and not rent housing after the intial honeymoon period. Also would encourge them to purchase demolish and rebuild older housing and ruined housing so they could invest in it healing some of the older rundown areas.
- JamesBarney 3y ago
  You mention ways to accelerate new housing, but we should maybe just take our foot off the break before we look into acceleration.
- konschubert 3y ago
  Just allow more new construction. Upzone and speed up the approval process.

jjav 3y ago

> Enough housing means supply meets or exceeds demand which means prices fall While this seems obvious on the surface (if there are more houses than people in some area, prices should drop right), are there real world example of this working that way? More housing just creates more demand which drives more density and yet more demand. The densest area in the US is Manhattan, not known for being a cheap place to live. Second densest is SF, also not a bargain for housing.

makk 3y ago
Yeah, and it’s a faulty assumption that all investors price housing on the basis of rents. I recall reading that in Vancouver, BC they had a large influx of foreign money pouring into their housing market because it was a way for foreigners to expatriate their money. Drove prices through the roof. They had to impose measures to discourage it. Those properties, I read, often sat empty because using them for housing was never the intent of the owners.
seanmcdirmid 3y ago
Ya, this could be a case of induced demand that we see in freeway building. Making more housing in a hot area where people want to live could conversely encourage more people to move to that hot area. Unless you just have slow growth like Japan/Tokyo, or some kind of residency restriction, I don’t see a way to cheaper prices just by adding in more supply. The increased density is still a win, just don’t expect it to make housing much cheaper.
esoterica 3y ago
Manhattan and SF has built almost no housing over the past several decades, and demand has continued to rise anyway, causing skyrocketing prices. Those metro areas are proving the exact opposite point you are trying to make. Building more housing is not what is creating more demand.
paxys 3y ago
More housing doesn't create demand, the city's economy creates demand. This is exactly why people have kept pouring into NYC and SF over the last few decades while the rate of new construction has slowed down to a crawl and nothing is affordable.