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I see responses saying that we need more housing, but does that really fix the problem? Landlords will keep buying up the available houses and renting them out

I see responses saying that we need more housing, but does that really fix the problem? Landlords will keep buying up the available houses and renting them out as long as they can keep raising rents, which they can since... people can't afford to buy houses. It's not clear to me how building more houses changes anything.

cycrutchfield 3y ago
The principle of supply and demand doesn’t just magically turn off when talking about the price of housing. It’s very clear that there is a shortage of housing in places people actually want to live, and this is a huge driver in the price of housing in those areas increasing.
- caditinpiscinam 3y ago
  If you raise the price of tea, at some point I'll stop buying tea. If you raise the price of housing, I don't stop needing a place to live. "Supply and demand" is the "friction-less, mass-less pulley" of econ: a simplistic principle for a hypothetical world.
  - cycrutchfield 3y ago
    You also need food to live, but the principles of supply and demand seem to hold quite well for such goods. You can go ahead and call these principles simplistic but it doesn’t mean they are wrong in broad terms.
  - satvikpendem 3y ago
    It's simple, you will move, either voluntarily or be forced to via rising costs. I know many people who lived in high cost of living areas that now live in lower cost of living areas. Yes, they had to find new jobs and new friends, but that is really no different than any other time in human history. This is not to say that we should not build more housing so as to increase supply and thus lower prices, of course.
losteric 3y ago
Landlords do not have infinite capital, and there is not infinite demand by renters. As supply approaches or exceeds demand, rent-seekinf margins are forced down.
- worik 3y ago
  That does not happen until people are living in grinding poverty We have seen that over and over Housing in most western economies is where the market most obviously fails the people

cycrutchfield 3y ago

The principle of supply and demand doesn’t just magically turn off when talking about the price of housing. It’s very clear that there is a shortage of housing in places people actually want to live, and this is a huge driver in the price of housing in those areas increasing.

caditinpiscinam 3y ago
If you raise the price of tea, at some point I'll stop buying tea. If you raise the price of housing, I don't stop needing a place to live. "Supply and demand" is the "friction-less, mass-less pulley" of econ: a simplistic principle for a hypothetical world.
- cycrutchfield 3y ago
  You also need food to live, but the principles of supply and demand seem to hold quite well for such goods. You can go ahead and call these principles simplistic but it doesn’t mean they are wrong in broad terms.
- satvikpendem 3y ago
  It's simple, you will move, either voluntarily or be forced to via rising costs. I know many people who lived in high cost of living areas that now live in lower cost of living areas. Yes, they had to find new jobs and new friends, but that is really no different than any other time in human history. This is not to say that we should not build more housing so as to increase supply and thus lower prices, of course.

losteric 3y ago

Landlords do not have infinite capital, and there is not infinite demand by renters. As supply approaches or exceeds demand, rent-seekinf margins are forced down.

worik 3y ago
That does not happen until people are living in grinding poverty We have seen that over and over Housing in most western economies is where the market most obviously fails the people