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Why doesn't the government build and sell housing at a small profit? Here in Dubai, the largest housing construction companies are or were government owned. It'

Why doesn't the government build and sell housing at a small profit? Here in Dubai, the largest housing construction companies are or were government owned. It's one of the ways the government can have zero income tax despite oil being less than 1% of its economy. My only thought is that it's political, and some voters don't want their houses to lose value.

piva00 2y ago
Because of neoliberal policies. Some governments around the world did incentivise and even footed the bill for building public housing before neoliberalism took hold; for example the Swedish Million Programme [0] built 1 million dwellings between 1965-1974 where the government took the risk on 66% of the building costs to be repaid by tenants over 30 years. This system of building houses was completely scrapped by neoliberals, letting the "market" take control of supply with the government taking a background stance of mostly zoning out where they'd incentivise building new dwellings. I can see in a not-so-distant future talks about this kind of program being reignited in politics, the neoliberal approach has absolutely failed us. [0] https://en.wikipedia.org/wiki/Million_Programme https://en.wikipedia.org/wiki/Million_Programme
- EduardoBautista 2y ago
  > Some governments around the world did incentivise and even footed the bill for building public housing I am not referring to building public housing. I am saying the government should build housing as if it were a for-profit company. Take those profits, and re-invest into building even _more_ housing. Don't try to sell to those in need, sell to those who are speculating on real estate and increase supply at the same time.
  - b3ing 2y ago
    In the US no one trusts the government anymore and instead they want the private sector to do everything. But the private sector only cares about profit. It’s also a good way to ensure companies can milk the government of money and then the head of those companies can lobby the government to keep things how they are so they continue to get that government money.
    - EduardoBautista 2y ago
      I believe the main issue with many US government projects is that they _don't_ care about profit. If they did, maybe we could have public transportation as good as that of Hong Kong[0]. This idea that pursuing profits as a public entity is not productive when it could benefit society as a whole does more harm than good. [0]: https://www.youtube.com/watch?v=ELy9fOX8vtc https://www.youtube.com/watch?v=ELy9fOX8vtc
      - dopylitty 2y ago
        Profit is inherently waste. It is value that is taken out of an enterprise and doesn't contribute to improving the product of the enterprise. If there is surplus value it should stay in the enterprise and be used to improve the enterprise by improving processes or improving the lives of workers. Failing that it should be returned to the customers through lower prices. One good thing about government services is they're more efficient because they don't have this value being extracted by uninvolved parties. That means they're able to provide better service or lower prices with the value that would've been sucked out by profit takers.
        nradov 2y ago
        You seem to be a little confused about the nature of profit. If investors didn't expect to take out future profits then they obviously wouldn't put in the capital necessary to start the enterprise in the first place. A lot of the value in government services tends to be extracted by public employee unions. Politicians make excessive commitments around wages, pensions, and job security in order to buy union votes and maintain labor peace. Then the politicians move on and future taxpayers are left holding the bag.
        arcimpulse 2y ago
        I'm afraid you're the one that's confused. Profit is defined economically as revenue minus expenses, and so the grandfather post's first sentence is correct. What grandfather is suggesting is something like an ESOP, co-op, or etc. There are a long history of these kinds of organizations, and they thrive in free-market economies--unfortunately, nobody really lives in one of those anymore. It is telling that you say public employee unions "extract value" by demanding the pensions/job protections that should by rights belong to everyone (and often did, in the past). Conversely, private corporations "extract value" from the labor marker by struggling to provide any job security, any retirement, or even anything resembling a living wage. Just which sector is failing to be profitable, here?
  - piva00 2y ago
    Telling voters that their tax money will be used to build housing to be sold to speculators will absolutely not work. Even if in the long-term that somehow could end up helping people, no one will vote for this absurdity. You're asking for people to fund the infrastructure speculators thrive on with their money, on top of that you want to depress housing prices which another large cohort of society will vote against, politically your proposal doesn't make sense. If you cared to read the Wikipedia entry I shared the approach the Swedish government took was to pay 2/3 of the new constructions and sell those houses to people who would pay them back in 30 years, it's not "public housing" as you assumed...
    - thfuran 2y ago
      Aside from scale, it's pretty much the same thing but with the assumption that whoever is going to be buying is a friendly neighbor and not an evil speculator.
kylehotchkiss 2y ago
The land under UAE doesn’t have dozens or even hundreds of years of plot splitting and ownership claims too, there is just an enormous advantage to how new much of the county is and a government incentivized to grow. It does help that citizens form a smaller part of the population and that it seems like they get advantageous jobs and housing to keep them happy. Hard to compare to western counties.
- nasmorn 2y ago
  Also they build with what is almost slave labor.
  - kylehotchkiss 2y ago
    Blame the nearby countries providing no jobs, no education, and no future for these laborers instead. Also don’t forget the hundreds of thousands of people from the exact same countries who gain respectable middle class, stable jobs in UAE that their home countries don’t provide. I’m not here to defend every decision that UAE has made but they’ve done a lot of good for people who come from countries with unspeakably shitty governments that deserve a lot more condemnation.
    - nasmorn 2y ago
      In the Roman Empire if you found a child that would otherwise die you could adopt it into your household as a slave since that was certainly better. Your logic is absolutely sound if you dispute the concept of human rights entirely. The problem is you create a permanent underclass in the country since you take literally almost all rights from them. Including by the way the right to return where they came from.
    - mtalantikite 2y ago
      You don't just get to do human rights abuse because someone was born into poverty or conflict. [1][2][3] [1] https://en.wikipedia.org/wiki/Treatment_of_South_Asian_labourers_in_the_Gulf_Cooperation_Council_region https://en.wikipedia.org/wiki/Treatment_of_South_Asian_labou... [2] https://www.bbc.com/news/technology-50228549 https://www.bbc.com/news/technology-50228549 [3] https://www.youtube.com/watch?v=gMh-vlQwrmU https://www.youtube.com/watch?v=gMh-vlQwrmU
Tiktaalik 2y ago
Right wing activists and government have pushed the idea that government is hopeless, can't do anything and shouldn't try, and aggressively tried to make government as limited and as small as possible. This is often labelled "starve the beast" strategy. They may well have a point, that government should only do things that only government can do, and that by declining to be involved they're leaving space for private businesses to operate. But yea that's how we got here. At this point any attempt for a government to be more intentional and interventionist would result in severe push back from the right. Some governments are trying. In British Columbia, the government has changed laws to allow the arms length public transit agency to be able to buy and develop land around its transit stations.
- skidd0 2y ago
  Both "wings" is how we got here. This is not an issue from a single party.
downrightmike 2y ago
That's because the state employs most people, they have an interest in keeping people's costs down. The people depend on the state for their livelihoods.

piva00 2y ago

Because of neoliberal policies. Some governments around the world did incentivise and even footed the bill for building public housing before neoliberalism took hold; for example the Swedish Million Programme [0] built 1 million dwellings between 1965-1974 where the government took the risk on 66% of the building costs to be repaid by tenants over 30 years. This system of building houses was completely scrapped by neoliberals, letting the "market" take control of supply with the government taking a background stance of mostly zoning out where they'd incentivise building new dwellings. I can see in a not-so-distant future talks about this kind of program being reignited in politics, the neoliberal approach has absolutely failed us. [0] https://en.wikipedia.org/wiki/Million_Programme https://en.wikipedia.org/wiki/Million_Programme

EduardoBautista 2y ago
> Some governments around the world did incentivise and even footed the bill for building public housing I am not referring to building public housing. I am saying the government should build housing as if it were a for-profit company. Take those profits, and re-invest into building even _more_ housing. Don't try to sell to those in need, sell to those who are speculating on real estate and increase supply at the same time.
- b3ing 2y ago
  In the US no one trusts the government anymore and instead they want the private sector to do everything. But the private sector only cares about profit. It’s also a good way to ensure companies can milk the government of money and then the head of those companies can lobby the government to keep things how they are so they continue to get that government money.
  - EduardoBautista 2y ago
    I believe the main issue with many US government projects is that they _don't_ care about profit. If they did, maybe we could have public transportation as good as that of Hong Kong[0]. This idea that pursuing profits as a public entity is not productive when it could benefit society as a whole does more harm than good. [0]: https://www.youtube.com/watch?v=ELy9fOX8vtc https://www.youtube.com/watch?v=ELy9fOX8vtc
    - dopylitty 2y ago
      Profit is inherently waste. It is value that is taken out of an enterprise and doesn't contribute to improving the product of the enterprise. If there is surplus value it should stay in the enterprise and be used to improve the enterprise by improving processes or improving the lives of workers. Failing that it should be returned to the customers through lower prices. One good thing about government services is they're more efficient because they don't have this value being extracted by uninvolved parties. That means they're able to provide better service or lower prices with the value that would've been sucked out by profit takers.
      - nradov 2y ago
        You seem to be a little confused about the nature of profit. If investors didn't expect to take out future profits then they obviously wouldn't put in the capital necessary to start the enterprise in the first place. A lot of the value in government services tends to be extracted by public employee unions. Politicians make excessive commitments around wages, pensions, and job security in order to buy union votes and maintain labor peace. Then the politicians move on and future taxpayers are left holding the bag.
        arcimpulse 2y ago
        I'm afraid you're the one that's confused. Profit is defined economically as revenue minus expenses, and so the grandfather post's first sentence is correct. What grandfather is suggesting is something like an ESOP, co-op, or etc. There are a long history of these kinds of organizations, and they thrive in free-market economies--unfortunately, nobody really lives in one of those anymore. It is telling that you say public employee unions "extract value" by demanding the pensions/job protections that should by rights belong to everyone (and often did, in the past). Conversely, private corporations "extract value" from the labor marker by struggling to provide any job security, any retirement, or even anything resembling a living wage. Just which sector is failing to be profitable, here?
- piva00 2y ago
  Telling voters that their tax money will be used to build housing to be sold to speculators will absolutely not work. Even if in the long-term that somehow could end up helping people, no one will vote for this absurdity. You're asking for people to fund the infrastructure speculators thrive on with their money, on top of that you want to depress housing prices which another large cohort of society will vote against, politically your proposal doesn't make sense. If you cared to read the Wikipedia entry I shared the approach the Swedish government took was to pay 2/3 of the new constructions and sell those houses to people who would pay them back in 30 years, it's not "public housing" as you assumed...
  - thfuran 2y ago
    Aside from scale, it's pretty much the same thing but with the assumption that whoever is going to be buying is a friendly neighbor and not an evil speculator.

kylehotchkiss 2y ago

The land under UAE doesn’t have dozens or even hundreds of years of plot splitting and ownership claims too, there is just an enormous advantage to how new much of the county is and a government incentivized to grow. It does help that citizens form a smaller part of the population and that it seems like they get advantageous jobs and housing to keep them happy. Hard to compare to western counties.

nasmorn 2y ago
Also they build with what is almost slave labor.
- kylehotchkiss 2y ago
  Blame the nearby countries providing no jobs, no education, and no future for these laborers instead. Also don’t forget the hundreds of thousands of people from the exact same countries who gain respectable middle class, stable jobs in UAE that their home countries don’t provide. I’m not here to defend every decision that UAE has made but they’ve done a lot of good for people who come from countries with unspeakably shitty governments that deserve a lot more condemnation.
  - nasmorn 2y ago
    In the Roman Empire if you found a child that would otherwise die you could adopt it into your household as a slave since that was certainly better. Your logic is absolutely sound if you dispute the concept of human rights entirely. The problem is you create a permanent underclass in the country since you take literally almost all rights from them. Including by the way the right to return where they came from.
  - mtalantikite 2y ago
    You don't just get to do human rights abuse because someone was born into poverty or conflict. [1][2][3] [1] https://en.wikipedia.org/wiki/Treatment_of_South_Asian_labourers_in_the_Gulf_Cooperation_Council_region https://en.wikipedia.org/wiki/Treatment_of_South_Asian_labou... [2] https://www.bbc.com/news/technology-50228549 https://www.bbc.com/news/technology-50228549 [3] https://www.youtube.com/watch?v=gMh-vlQwrmU https://www.youtube.com/watch?v=gMh-vlQwrmU

Tiktaalik 2y ago

Right wing activists and government have pushed the idea that government is hopeless, can't do anything and shouldn't try, and aggressively tried to make government as limited and as small as possible. This is often labelled "starve the beast" strategy. They may well have a point, that government should only do things that only government can do, and that by declining to be involved they're leaving space for private businesses to operate. But yea that's how we got here. At this point any attempt for a government to be more intentional and interventionist would result in severe push back from the right. Some governments are trying. In British Columbia, the government has changed laws to allow the arms length public transit agency to be able to buy and develop land around its transit stations.

skidd0 2y ago
Both "wings" is how we got here. This is not an issue from a single party.

downrightmike 2y ago

That's because the state employs most people, they have an interest in keeping people's costs down. The people depend on the state for their livelihoods.