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The issue is always lack of building. Higher interest rates just mask the problem and hand more money to rich people for no effort. The problem is that the pri

The issue is always lack of building. Higher interest rates just mask the problem and hand more money to rich people for no effort. The problem is that the private housing production system responds to increased credit availability only at the margins and does not over produce. That’s largely because houses are still hand built and not really substitutable like a vehicle. You don’t generally have a choice of two houses on the same site. However if you produce houses publicly then you can force private housing to compete outside the margins. At which point you get excess supply, as we see with cars and then house prices start to stabilise and even depreciate. At which point the “investment” hoards would start to liquidate. We need the housing market to behave like the production car market, not the classic car market. The fix is public policy producing housing in order to force a situation of excess supply.

killjoywashere 2y ago
> The fix is public policy producing housing in order to force a situation of excess supply. So... we should have paid builders to build more houses during the pandemic?
- pfdietz 2y ago
  Eliminate regulations and laws limiting supply.
  - AmVess 2y ago
    Where I used to live, it cost $7k to get a plot of land ready to build on. Today, that cost is $70k and 6months to 1y to get past all the permits and paperwork. And then having to deal with a governing body that doesn't understand how money works, and it is no surprise no one builds affordable houses anymore.
  - dogcomplex 2y ago
    Or increase planning department funding with higher emphasis on throughput. It's the bureaucratic delay (nearly a year for approvals or revisions in many places) that causes much of the pain, not the regulations themselves.
    - brigadier132 2y ago
      Funding bureaucracy only serves to increase the amount of bureaucracy
    - Schiendelman 2y ago
      Giving them money is unlikely to help. They do not have any incentive to go faster.
    - lazyasciiart 2y ago
      About the biggest delay in Seattle permitting is the requirement to get a board of volunteer assholes to approve the visual appearance of the project, which is estimated to add an average of 8 months to the permitting process but is allowed to last for an indefinite period. The average total permitting time for these projects (over 35,000sq ft) is about 18 months. Hopefully they will be thrown out soon. The really fun note is that these boards are almost entirely made up of architects who are getting the chance to single-handedly destroy a competitor’s work.
      - mywittyname 2y ago
        This sucks. In addition to adding so much time and costs to projects, visual approval boards are going to be culturally suffocating. Some of the most iconic structures in the world were widely considered to be eye sores when new, see: Eiffel Tower.
        bluGill 2y ago
        Seems like the first amendment should prohibit that, but so far courts have not agreed.
      - ajkjk 2y ago
        At minimum any sort of approval system needs to come with some sort of rubric to bypass it: "build it this way and it's approved automatically". It gives the approvers the same agency while prohibiting holding anything up, and it puts the onus on the approvers to say what they want to see instead of the builders finding a way to hit a nebulous target.
- spankalee 2y ago
  Yes. One of the ways government can help us by funding counter-cyclical building, keeping the sector afloat and preventing supply crunches when a recession ends.
the_gipsy 2y ago
Lack of building is not the problem - on the contrary. You cannot realistically build enough so that the rents decrease. And when you build you just fuel the vicious cycle of people -> opportunities -> people.
- AnthonyMouse 2y ago
  > You cannot realistically build enough so that the rents decrease. I'm curious what makes you think this. Suppose you built twice as many housing units as you had residents. Rents wouldn't decrease? Why not? Or do you think that a sufficient amount of housing wouldn't fit? For reference, the San Francisco metro area has ~7.5M people in an area of ~3500 square miles. With housing at the population density of Manhattan, the number of people who could be housed in that area is approximately 250M people, i.e. three quarters of the entire US population. Obviously you wouldn't do this, but you could, so that can't be the constraint.
  - zdragnar 2y ago
    I think they answered in a curt but succinct way: > when you build you just fuel the vicious cycle of people -> opportunities -> people So long as a place is desirable to live, people will keep moving there. Obviously there's a logical limit to the argument- things get weird when you build more housing than there are people- but then so too do the logistical issues of sewer, water, electricity, and geology (some locations simply aren't economical to build high rise buildings on).
    - AnthonyMouse 2y ago
      > So long as a place is desirable to live, people will keep moving there. The underlying premise being that they're moving to this place from some other place. But that has an obvious solution: Build more housing everywhere. People can't increase the population of everywhere by moving from everywhere to everywhere. It also implies that building it in one place still helps to reduce the cost somewhere else. If you make San Jose more attractive and people move from San Francisco to San Jose then you're reducing demand in San Francisco and lowering the prices there. > Obviously there's a logical limit to the argument- things get weird when you build more housing than there are people- but then so too do the logistical issues of sewer, water, electricity, and geology (some locations simply aren't economical to build high rise buildings on). The constraints at the physical limit are irrelevant because you don't need to get anywhere close to it. The point is that you could if you had to, not that you actually have to.
munksbeer 2y ago
> Higher interest rates just mask the problem and hand more money to rich people for no effort. What higher interest rates? We're nowhere near high interest rates.
- hot_gril 2y ago
  Yeah, our current "high interest rates" are still artificially lowered by the Fed.
- fragmede 2y ago
  The almost 7% that the US is currently at, vs the < 3% it was at back in 2021, 2.3x as much. It's true 7% isn't high compared to a peak of 18.5% in 1981, but neilwilson said higher, not high.
VirusNewbie 2y ago
>The issue is always lack of building. This is why NY is cheaper than the midwest.
- diordiderot 2y ago
  More people are moving in then there are units available to accomidate them. This can be solved by, you guessed it... building.

killjoywashere 2y ago

> The fix is public policy producing housing in order to force a situation of excess supply. So... we should have paid builders to build more houses during the pandemic?

pfdietz 2y ago
Eliminate regulations and laws limiting supply.
- AmVess 2y ago
  Where I used to live, it cost $7k to get a plot of land ready to build on. Today, that cost is $70k and 6months to 1y to get past all the permits and paperwork. And then having to deal with a governing body that doesn't understand how money works, and it is no surprise no one builds affordable houses anymore.
- dogcomplex 2y ago
  Or increase planning department funding with higher emphasis on throughput. It's the bureaucratic delay (nearly a year for approvals or revisions in many places) that causes much of the pain, not the regulations themselves.
  - brigadier132 2y ago
    Funding bureaucracy only serves to increase the amount of bureaucracy
  - Schiendelman 2y ago
    Giving them money is unlikely to help. They do not have any incentive to go faster.
  - lazyasciiart 2y ago
    About the biggest delay in Seattle permitting is the requirement to get a board of volunteer assholes to approve the visual appearance of the project, which is estimated to add an average of 8 months to the permitting process but is allowed to last for an indefinite period. The average total permitting time for these projects (over 35,000sq ft) is about 18 months. Hopefully they will be thrown out soon. The really fun note is that these boards are almost entirely made up of architects who are getting the chance to single-handedly destroy a competitor’s work.
    - mywittyname 2y ago
      This sucks. In addition to adding so much time and costs to projects, visual approval boards are going to be culturally suffocating. Some of the most iconic structures in the world were widely considered to be eye sores when new, see: Eiffel Tower.
      - bluGill 2y ago
        Seems like the first amendment should prohibit that, but so far courts have not agreed.
    - ajkjk 2y ago
      At minimum any sort of approval system needs to come with some sort of rubric to bypass it: "build it this way and it's approved automatically". It gives the approvers the same agency while prohibiting holding anything up, and it puts the onus on the approvers to say what they want to see instead of the builders finding a way to hit a nebulous target.
spankalee 2y ago
Yes. One of the ways government can help us by funding counter-cyclical building, keeping the sector afloat and preventing supply crunches when a recession ends.

the_gipsy 2y ago

Lack of building is not the problem - on the contrary. You cannot realistically build enough so that the rents decrease. And when you build you just fuel the vicious cycle of people -> opportunities -> people.

AnthonyMouse 2y ago
> You cannot realistically build enough so that the rents decrease. I'm curious what makes you think this. Suppose you built twice as many housing units as you had residents. Rents wouldn't decrease? Why not? Or do you think that a sufficient amount of housing wouldn't fit? For reference, the San Francisco metro area has ~7.5M people in an area of ~3500 square miles. With housing at the population density of Manhattan, the number of people who could be housed in that area is approximately 250M people, i.e. three quarters of the entire US population. Obviously you wouldn't do this, but you could, so that can't be the constraint.
- zdragnar 2y ago
  I think they answered in a curt but succinct way: > when you build you just fuel the vicious cycle of people -> opportunities -> people So long as a place is desirable to live, people will keep moving there. Obviously there's a logical limit to the argument- things get weird when you build more housing than there are people- but then so too do the logistical issues of sewer, water, electricity, and geology (some locations simply aren't economical to build high rise buildings on).
  - AnthonyMouse 2y ago
    > So long as a place is desirable to live, people will keep moving there. The underlying premise being that they're moving to this place from some other place. But that has an obvious solution: Build more housing everywhere. People can't increase the population of everywhere by moving from everywhere to everywhere. It also implies that building it in one place still helps to reduce the cost somewhere else. If you make San Jose more attractive and people move from San Francisco to San Jose then you're reducing demand in San Francisco and lowering the prices there. > Obviously there's a logical limit to the argument- things get weird when you build more housing than there are people- but then so too do the logistical issues of sewer, water, electricity, and geology (some locations simply aren't economical to build high rise buildings on). The constraints at the physical limit are irrelevant because you don't need to get anywhere close to it. The point is that you could if you had to, not that you actually have to.

munksbeer 2y ago

> Higher interest rates just mask the problem and hand more money to rich people for no effort. What higher interest rates? We're nowhere near high interest rates.

hot_gril 2y ago
Yeah, our current "high interest rates" are still artificially lowered by the Fed.
fragmede 2y ago
The almost 7% that the US is currently at, vs the < 3% it was at back in 2021, 2.3x as much. It's true 7% isn't high compared to a peak of 18.5% in 1981, but neilwilson said higher, not high.

VirusNewbie 2y ago

>The issue is always lack of building. This is why NY is cheaper than the midwest.

diordiderot 2y ago
More people are moving in then there are units available to accomidate them. This can be solved by, you guessed it... building.