6 ms·

If you remove real estate as a form of investment, no new apartment buildings will be built. Guess what happens next. The rate of empty apartments is extremel

If you remove real estate as a form of investment, no new apartment buildings will be built. Guess what happens next. The rate of empty apartments is extremely low. This means that we have a supply shortage, not a pricing problem.

toomuchtodo 3y ago
Government can build if private industry will not. If you argue "we can only fix this with the private sector and private investment", welp, we tried that and we're plain ol' fucked at the moment. Vienna is a great example. https://www.youtube.com/watch?v=41VJudBdYXY https://www.youtube.com/watch?v=41VJudBdYXY (Youtube: Vienna's Radical Idea? Affordable Housing For All) https://www.youtube.com/watch?v=d6DBKoWbtjE https://www.youtube.com/watch?v=d6DBKoWbtjE (Youtube: Does Vienna Have the World's Best Council Housing?)
- JKCalhoun 3y ago
  I thought we also tried government housing and got "the projects" instead.
  - toomuchtodo 3y ago
    Define we. My example shows government housing can be done. Swap out people and policy if needed. "Insanity is doing the same thing over and over again and expecting different results." -- Einstein
  - klyrs 3y ago
    Having grown up in the projects, they were a million times better than tent cities.
justin66 3y ago
> we have a supply shortage, not a pricing problem You think those are different things?
- konschubert 3y ago
  Yes. If prices go up because demand is high and supply is low, then the way to fix this is by increasing supply. If you cap the prices, supply will be even lower and you get shortages. A pricing problem is when you have sufficient supply, but the sellers in the market are colluding to fix high prices. This can be fixed by trust breaking and/or price controls, but this isn't what's happening in real estate. Real estate is an extremely competitive market.
fernandopj 3y ago
Presented to you by the same makers of "if artists didn't make money, art would stop being produced" I don't see clothes as investments but I still buy them, same as food. And industries are there to provide and profit over it. If somehow magically houses stop being "investments" to hoard and rent away, people would still build houses, you know, to live in them.
- konschubert 3y ago
  The companies that make the clothing you are wearing see it as an investment. In the same way, real estate investors are necessary to build apartment buildings. You are right that a piece of clothing is a depreciating asset. And maybe what you mean is that a house should also be a depreciating asset. Well, we can make it so by properly taxing the land value. Maybe that's what you mean, and in this case I'd say we agree!
baby 3y ago
Are you an engineer? If so you should try to think about how to make it work, not about one downside. It’s pretty clear that treating housing as an investment and not as a fundamental right has led us here. Unless you’re invested in real estate in which case your incentives are to keep the system in place.
- Workaccount2 3y ago
  Real estate should be an investment, it drives new construction, it just shouldn't have the ridiculous returns that it currently does.
  - konschubert 3y ago
    It doesn't have high returns, except if you already own the land. We need to limit land value increases. A land value tax helps with that. Increasing supply by upzoning might help even more.
- dfxm12 3y ago
  Unless you’re invested in real estate in which case your incentives are to keep the system in place. That's the hard part. I imagine most homeowners are of the idea "I got mine, who cares about anyone else?" We see this line of thought in many parts of politics. Honestly, I'll take a bath on my home value if it means my kids, their friends, my niece, etc. get to secure housing. I don't care. Hell, I might find myself in a hard spot in the future and I don't want housing to be an issue. Housing is so important to one's dignity, ability to work/access some services and safety. There's no reason people should be collecting houses like baseball cards.
- qwytw 3y ago
  > It’s pretty clear that treating housing as an investment and not as a fundamental right has led us No, it's pretty clear that insufficient supply in certain areas has led us here. Treating housing as an investment is just a symptom (it's really unavoidable if the good is scarce).
  - 3y ago
xnx 3y ago
Cars are not investments, and plenty of them keep being made. What makes housing different?
- zdragnar 3y ago
  We already have houses that are not investments, just like cars. RVs, park model trailers and mobile homes. Most people would prefer a regular house or apartment, given the option.
  - subpixel 3y ago
    In today's market a mobile home is an investment, they sell used for ~$200k on a lot
- konschubert 3y ago
  The house itself is a depreciating asset just like a car. It's the land under the house that appreciates in value. If you want to reduce that land value appreciation, here are two good ideas: Land value taxes help to discourage the hogging of land while encouraging construction, which in turn dampens the price of land. Removing restrictive zoning polices means that the demand for land is decreased, thus dampening the price of the land.
  - jjav 3y ago
    > The house itself is a depreciating asset just like a car. You can't compare a house and a car in terms of value. Both require maintenance and both can decay to unusable if left abandoned too long. That much is similar. But maintaining a car beyond the point where parts are available becomes very expensive since everything becomes a custom job. There are few 100 year old cars running around and those which exist are a labor of love, but from an economic perspective makes no sense. It would be far cheaper to just buy a new car. This never happens with housing. You can maintain a house indefinitely, through many generations and it never becomes cheaper to buy a whole new house. (Barring some disaster to it, natural or human-induced, of course.) So a house can't become a depreciating asset. A roof over your head will always have value (that's why this whole discussion exists, everyone agrees there is value to a home) and since that house will last essentially forever, it can't possibly become worthless.
throwawaaarrgh 3y ago
What would happen is there wouldn't be a giant payout for construction anymore, so public housing could finally get bids that aren't 3x what private goes for. For decades the problem hasn't been cities refusing to build, it's that contractors fuck cities on bids.
- konschubert 3y ago
  The main cost drive of housing is the land shortage, artificially created by zoning.
  - throwawaaarrgh 3y ago
    The cost is driven by multiple factors and zoning is often not an issue for public housing. San Francisco is not reflective of the rest of the country
greenie_beans 3y ago
> If you remove real estate as a form of investment, no new apartment buildings will be built. this isn't true. vienna's social housing program is a good example of how this works. and they have cheap median rent in 2023 compared to other cities their size.
- konschubert 3y ago
  I don't think the state capacity of the US Government is sufficient to build state-funded social housing to the extend that meets demand. And this is putting it mildly. I also think that the kind of housing that results from Communism isn't very desirable. Regarding Vienna: They still allow private investment into real estate.
  - greenie_beans 3y ago
    vienna did it at the local level, not the national level. so that's one way you're wrong. and did i ever say anything against private investment into real estate? no. this black and white thinking is part of the problem. > I also think that the kind of housing that results from Communism isn't very desirable. what is undesirable about cheap housing with good urban planning on a decentralized, local level like they did in vienna?
    - konschubert 3y ago
      GP wrote > Until we remove real estate as a form of investment That’s what I was responding to. I see now that this isn’t your opinion.
      - greenie_beans 3y ago
        you're right, i see how my response could be interpreted as "remove all real estate as an investment". sorry to respond in a knee jerk!

toomuchtodo 3y ago

Government can build if private industry will not. If you argue "we can only fix this with the private sector and private investment", welp, we tried that and we're plain ol' fucked at the moment. Vienna is a great example. https://www.youtube.com/watch?v=41VJudBdYXY https://www.youtube.com/watch?v=41VJudBdYXY (Youtube: Vienna's Radical Idea? Affordable Housing For All) https://www.youtube.com/watch?v=d6DBKoWbtjE https://www.youtube.com/watch?v=d6DBKoWbtjE (Youtube: Does Vienna Have the World's Best Council Housing?)

JKCalhoun 3y ago
I thought we also tried government housing and got "the projects" instead.
- toomuchtodo 3y ago
  Define we. My example shows government housing can be done. Swap out people and policy if needed. "Insanity is doing the same thing over and over again and expecting different results." -- Einstein
- klyrs 3y ago
  Having grown up in the projects, they were a million times better than tent cities.

justin66 3y ago

> we have a supply shortage, not a pricing problem You think those are different things?

konschubert 3y ago
Yes. If prices go up because demand is high and supply is low, then the way to fix this is by increasing supply. If you cap the prices, supply will be even lower and you get shortages. A pricing problem is when you have sufficient supply, but the sellers in the market are colluding to fix high prices. This can be fixed by trust breaking and/or price controls, but this isn't what's happening in real estate. Real estate is an extremely competitive market.

fernandopj 3y ago

Presented to you by the same makers of "if artists didn't make money, art would stop being produced" I don't see clothes as investments but I still buy them, same as food. And industries are there to provide and profit over it. If somehow magically houses stop being "investments" to hoard and rent away, people would still build houses, you know, to live in them.

konschubert 3y ago
The companies that make the clothing you are wearing see it as an investment. In the same way, real estate investors are necessary to build apartment buildings. You are right that a piece of clothing is a depreciating asset. And maybe what you mean is that a house should also be a depreciating asset. Well, we can make it so by properly taxing the land value. Maybe that's what you mean, and in this case I'd say we agree!

baby 3y ago

Are you an engineer? If so you should try to think about how to make it work, not about one downside. It’s pretty clear that treating housing as an investment and not as a fundamental right has led us here. Unless you’re invested in real estate in which case your incentives are to keep the system in place.

Workaccount2 3y ago
Real estate should be an investment, it drives new construction, it just shouldn't have the ridiculous returns that it currently does.
- konschubert 3y ago
  It doesn't have high returns, except if you already own the land. We need to limit land value increases. A land value tax helps with that. Increasing supply by upzoning might help even more.
dfxm12 3y ago
Unless you’re invested in real estate in which case your incentives are to keep the system in place. That's the hard part. I imagine most homeowners are of the idea "I got mine, who cares about anyone else?" We see this line of thought in many parts of politics. Honestly, I'll take a bath on my home value if it means my kids, their friends, my niece, etc. get to secure housing. I don't care. Hell, I might find myself in a hard spot in the future and I don't want housing to be an issue. Housing is so important to one's dignity, ability to work/access some services and safety. There's no reason people should be collecting houses like baseball cards.
qwytw 3y ago
> It’s pretty clear that treating housing as an investment and not as a fundamental right has led us No, it's pretty clear that insufficient supply in certain areas has led us here. Treating housing as an investment is just a symptom (it's really unavoidable if the good is scarce).
- 3y ago

xnx 3y ago

Cars are not investments, and plenty of them keep being made. What makes housing different?

zdragnar 3y ago
We already have houses that are not investments, just like cars. RVs, park model trailers and mobile homes. Most people would prefer a regular house or apartment, given the option.
- subpixel 3y ago
  In today's market a mobile home is an investment, they sell used for ~$200k on a lot
konschubert 3y ago
The house itself is a depreciating asset just like a car. It's the land under the house that appreciates in value. If you want to reduce that land value appreciation, here are two good ideas: Land value taxes help to discourage the hogging of land while encouraging construction, which in turn dampens the price of land. Removing restrictive zoning polices means that the demand for land is decreased, thus dampening the price of the land.
- jjav 3y ago
  > The house itself is a depreciating asset just like a car. You can't compare a house and a car in terms of value. Both require maintenance and both can decay to unusable if left abandoned too long. That much is similar. But maintaining a car beyond the point where parts are available becomes very expensive since everything becomes a custom job. There are few 100 year old cars running around and those which exist are a labor of love, but from an economic perspective makes no sense. It would be far cheaper to just buy a new car. This never happens with housing. You can maintain a house indefinitely, through many generations and it never becomes cheaper to buy a whole new house. (Barring some disaster to it, natural or human-induced, of course.) So a house can't become a depreciating asset. A roof over your head will always have value (that's why this whole discussion exists, everyone agrees there is value to a home) and since that house will last essentially forever, it can't possibly become worthless.

throwawaaarrgh 3y ago

What would happen is there wouldn't be a giant payout for construction anymore, so public housing could finally get bids that aren't 3x what private goes for. For decades the problem hasn't been cities refusing to build, it's that contractors fuck cities on bids.

konschubert 3y ago
The main cost drive of housing is the land shortage, artificially created by zoning.
- throwawaaarrgh 3y ago
  The cost is driven by multiple factors and zoning is often not an issue for public housing. San Francisco is not reflective of the rest of the country

greenie_beans 3y ago

> If you remove real estate as a form of investment, no new apartment buildings will be built. this isn't true. vienna's social housing program is a good example of how this works. and they have cheap median rent in 2023 compared to other cities their size.

konschubert 3y ago
I don't think the state capacity of the US Government is sufficient to build state-funded social housing to the extend that meets demand. And this is putting it mildly. I also think that the kind of housing that results from Communism isn't very desirable. Regarding Vienna: They still allow private investment into real estate.
- greenie_beans 3y ago
  vienna did it at the local level, not the national level. so that's one way you're wrong. and did i ever say anything against private investment into real estate? no. this black and white thinking is part of the problem. > I also think that the kind of housing that results from Communism isn't very desirable. what is undesirable about cheap housing with good urban planning on a decentralized, local level like they did in vienna?
  - konschubert 3y ago
    GP wrote > Until we remove real estate as a form of investment That’s what I was responding to. I see now that this isn’t your opinion.
    - greenie_beans 3y ago
      you're right, i see how my response could be interpreted as "remove all real estate as an investment". sorry to respond in a knee jerk!