4 ms·

Agreed. “Nobody lives in cities any more, they can’t afford the rent there”.

AnthonyMouse 3y ago
> “Nobody lives in cities any more, they can’t afford the rent there”. This is literally what happened. The population increases but building higher density (i.e. cities) is prohibited or made prohibitively expensive so instead the suburbs get built and people live there instead because the city doesn't have housing for them. Then the city becomes less attractive because the advantage it would otherwise have over the suburbs gets offset by the high rents -- it stops being consumer surplus and gets captured by landlords through artificial scarcity.
- lazyasciiart 3y ago
  If life were that simple, then there wouldn't be anyone living in a housing unit that somebody else would pay a higher rent for. It isn't that simple because housing is a very strongly regulated market with poor liquidity, and there are many many people living outside cities who would be willing to pay more than current occupants inside cities. Cities have not become less attractive.
  - AnthonyMouse 3y ago
    > If life were that simple, then there wouldn't be anyone living in a housing unit that somebody else would pay a higher rent for. This is essentially what happens in the absence of bad laws. If someone else would pay more then the landlord increases the rent. The occupant might still choose to stay and pay the higher rent, but then they're not paying less than the other person would. This is all fine and good because high rents are the market incentive to build more housing, which is the thing that lowers them again. The problem is reintroduced when you have other bad laws that inhibit housing construction; you have to get rid of both kinds of bad laws to not have a bad time. > housing is a very strongly regulated market with poor liquidity This is all the more reason people don't want to move into a city where rents are high. Then they'd be stuck there paying the high rents indefinitely until they suffer the cost to move again.
    - lazyasciiart 3y ago
      Entertaining to see someone willing to assume an actual free market of spherical housing, but not applicable enough to the real world to be useful outside a 101 class.
      - AnthonyMouse 3y ago
        Housing is actually a fairly competitive market. In a given city there are many thousands of housing units with many thousands of separate owners. Nobody has market power because there are so many other units you could take instead. In that kind of market the long-term price is going to approach the cost of constructing new units, because if it was higher then someone could make money by doing just that, and they would, and then the increase in supply would lower the price. Supply and demand is in econ 101 because it's generally what actually happens. This is why existing property owners don't keep prices high by colluding with each other -- cartels don't work with that many people. They have the government do it, by restricting where and how you can build housing, imposing expensive requirements on it, lowering the incentive to do it through rent control etc. Then when demand goes up through population growth, supply can't respond and instead prices go up. If you want to claim the ordinary way that everything works isn't how this works, you have to explain why. "Not all housing units are perfectly fungible" doesn't do it -- in that case they won't all be the same price, which is obviously true, but you're still left having to explain why the cheapest ones aren't actually cheap and why nobody would want to make money by building more when prices are high unless the regulatory environment was suppressing their ability to do that.

> “Nobody lives in cities any more, they can’t afford the rent there”. This is literally what happened. The population increases but building higher density (i.e. cities) is prohibited or made prohibitively expensive so instead the suburbs get built and people live there instead because the city doesn't have housing for them. Then the city becomes less attractive because the advantage it would otherwise have over the suburbs gets offset by the high rents -- it stops being consumer surplus and gets captured by landlords through artificial scarcity.

lazyasciiart 3y ago
If life were that simple, then there wouldn't be anyone living in a housing unit that somebody else would pay a higher rent for. It isn't that simple because housing is a very strongly regulated market with poor liquidity, and there are many many people living outside cities who would be willing to pay more than current occupants inside cities. Cities have not become less attractive.
- AnthonyMouse 3y ago
  > If life were that simple, then there wouldn't be anyone living in a housing unit that somebody else would pay a higher rent for. This is essentially what happens in the absence of bad laws. If someone else would pay more then the landlord increases the rent. The occupant might still choose to stay and pay the higher rent, but then they're not paying less than the other person would. This is all fine and good because high rents are the market incentive to build more housing, which is the thing that lowers them again. The problem is reintroduced when you have other bad laws that inhibit housing construction; you have to get rid of both kinds of bad laws to not have a bad time. > housing is a very strongly regulated market with poor liquidity This is all the more reason people don't want to move into a city where rents are high. Then they'd be stuck there paying the high rents indefinitely until they suffer the cost to move again.
  - lazyasciiart 3y ago
    Entertaining to see someone willing to assume an actual free market of spherical housing, but not applicable enough to the real world to be useful outside a 101 class.
    - AnthonyMouse 3y ago
      Housing is actually a fairly competitive market. In a given city there are many thousands of housing units with many thousands of separate owners. Nobody has market power because there are so many other units you could take instead. In that kind of market the long-term price is going to approach the cost of constructing new units, because if it was higher then someone could make money by doing just that, and they would, and then the increase in supply would lower the price. Supply and demand is in econ 101 because it's generally what actually happens. This is why existing property owners don't keep prices high by colluding with each other -- cartels don't work with that many people. They have the government do it, by restricting where and how you can build housing, imposing expensive requirements on it, lowering the incentive to do it through rent control etc. Then when demand goes up through population growth, supply can't respond and instead prices go up. If you want to claim the ordinary way that everything works isn't how this works, you have to explain why. "Not all housing units are perfectly fungible" doesn't do it -- in that case they won't all be the same price, which is obviously true, but you're still left having to explain why the cheapest ones aren't actually cheap and why nobody would want to make money by building more when prices are high unless the regulatory environment was suppressing their ability to do that.