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I'm not opposed to this program or dispute the results. But it would be much more broadly effective to remove one digit from housing prices, chiefly by removing

I'm not opposed to this program or dispute the results. But it would be much more broadly effective to remove one digit from housing prices, chiefly by removing the artificial supply restrictions that have caused them to inflate so much over the last 5 decades. Programs like Down Payment Assistance siphon off public money from worthier causes and dump it into the housing pyramid scheme. I'm afraid a lot of UBI money might be destined for the same fate. The same goes for tech salaries in places like here in the Bay Area.

bdcravens 2y ago
Any attempt to open up building restrictions needs to ensure it doesn't just turn itself into an air drop for real estate investors, otherwise it's unlikely to benefit those most in need of housing.
- worstspotgain 2y ago
  They can invest in $100-300K houses and condos and rent them out for $400-1200/mo all they want. Or even Airbnb or keep them as vacation homes if they'd rather. If there are no supply restrictions, it's not gonna affect the availability of housing for everyone else. Which of course means they won't bother. The whole con is capturing working people's wages by raising rent and rent-derived prices. Conceptually it's similar to the nominally high-paying job in a company town, where almost all your wages get siphoned off by living expenses for company-owned housing and services. The only difference is the payer and the siphoner are different entities.
  - bdcravens 2y ago
    There would have to be an absolute deluge of supply to keep those with capital from buying up, thereby driving up, housing inventory. Like the kind of deluge that keeps building supply stores full of empty shelves for months and bankrupts home owners nationwide as the price of homes plummet. Personally I feel the solution is to clamp down on real estate investors. Also, your rent estimates are off by at least 3x.
    - worstspotgain 2y ago
      Housing is notoriously inelastic. If you assumed a strict rule of 1 person to a bedroom, you can theoretically get wild price swings around the zone where the number of people in a neighborhood is about the same as the number of bedrooms. You don't need to go crazy with oversupply at all to get the correct prices. Look at much of Texas today or at the rest of the country pre-1970 to see what a healthy housing market looks like. I'm sorry, but I have no tears left for those who participated in the pyramid scheme, claiming ignorance or that their peers were doing it too. If their investments bottom out, they usually have enough political clout to screw the taxpayer anyways (see 2008.) We need to fix the market once and keep it fixed. We should bring it back to where it should have been all along. If there are people who have valid claims after that, we can always use some of the humongous "peace dividends" to settle them.
    - zbrozek 2y ago
      We need to build enough to make housing depreciate with age. Speculative investors are only in the market because artificial supply constraints make it a good bet that prices will go up. If the market becomes free to produce supply, they will find higher-return places to park their money.
    - IG_Semmelweiss 2y ago
      don't throw the baby out with the bathwater. Simply restrict hard asset purchases to US citizens. See how that works. if the real estate broker lobby doesn't like it , you are probably on the right track
      - scotty79 2y ago
        Right, but just citizens, no companies. Every separate piece of real estate needs to be owned by a specific person. What a fun world would that be. Or maybe just funny.
    - graeme 2y ago
      But real estate investors can already buy property. What is your objection to lifting restrictions on building property?
- graeme 2y ago
  There's no magic mechanism where investors build a lot of housing and it becomes expensive because of who owns it. You build more of something and it becomes cheaper. Even if you only build luxury housing or whatever you fear, it becomes cheaper. Richer people will buy the new housing rather than bid up old housing, as they currently do. Investors have "air dropped" into consumer hardware and ai. Have the prices gone up or down?
  - bdcravens 2y ago
    Competition drives prices up. Individuals and investors are both competing for the same inventory, but with dramatically different incentives. Remove, or dramatically reduce, the ability of investors to access that inventory and it removes competition.
    - jeromegv 2y ago
      Sure, and I do agree we should tax more if people owns 3, 4 or 5 homes. But in most cases those investors are just renting out again. So they don’t reduce the pool of housing. So they might increase the purchase price, but they contribute to more rental being available. At the end of the day the same amount of housing is available. So investors aren’t the cause of housing shortage.
    - ethbr1 2y ago
      Absolutely agreed. There should be a multipronged approach. Step I: Ban institutional investment in single family homes. I.e. individuals/couples can own 3. After that, disincentives begin to kick in. Any non-individual/couple has strong disincentives against buying single family homes. Step II: Make it easier to build multi-family, denser housing, with a bias towards owner-occupied over renting. Up to and including removing local control over saying "No." Step III: Carve out a very specific space (and zoning) for what rentals (i.e. non-owner-occupied) should look like.
      - worstspotgain 2y ago
        To the person who's paying an exhorbitantly overpriced rent, it's little consolation if they're paying it to someone who owns 2 units rather than 200. They're still being effectively enserfed via the artificial housing shortage. Conversely, if there is no lack of housing, it might actually be more efficient to have a few large landlords than many small ones. If something is wrong and immoral, it doesn't matter much if it's perpretrated by a small-time crook or an industrial-sized one.
CSMastermind 2y ago
I'll dispute the results. Actual study here: https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2244/t/66a8cd0fc256a2303a8569fc/1722338580211/CGIR+LA+BIGLEAP+Final+Report.pdf https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2... One very obvious problem is that they had two groups: one that received $1,000 a month and another control group that received nothing. Their results are based on surveys completed by two groups. The incentive for filling out the survey was a $50 gift card. Unsurprisingly the control group saw significantly more attrition in terms of survey response than vs the people being given $1,000 / month. People who were even marginally better off in the control group were less likely to respond since the hassle of meeting someone in person to fill out a survey isn't worth the $50 to them. So the control group was essentially concentrated down to the respondents who were worse off vs the broader spectrum of the experimental group they were sampling. In a brilliant example of motivated reasoning the people conducting the study saw this difference in attrition as a sign that the payments were having a positive effect as opposed to concluding that people are more likely to show up to fill out your survey if you've given them thousands of dollars because humans have a fundamental sense of reciprocity. The actual study design itself is extremely questionable but even if you take the results at face value they were just comparing the people who got money with people who got nothing. As opposed to for instance comparing money with no strings attached to the efficacy of existing social welfare programs. I'm unfamiliar with the Center for Guaranteed Income but they seem like a political advocacy group more than a serious research team.
- snapplebobapple 2y ago
  Another group funded by that openai guy did the same study in dallas and chicago and found tge guys given 1k a month ended poorer than the control group after three years. Thats why you hear about secondary resul%s like the paid group going to the dentist more. The primary result is failure but they wanted to soin that study to support thwir goals
  - snapplebobapple 2y ago
    a decent summary of the study I referenced above: https://www.youtube.com/watch?v=oyoMgGiWgJQ https://www.youtube.com/watch?v=oyoMgGiWgJQ
solatic 2y ago
> chiefly by removing the artificial supply restrictions Building housing without restrictions gives you slums. Nice housing has lots of surrounding support - electric, gas, water, sewage, Internet lines; schools, parks, swimming pools, transport, not to mention industry, retail, and employment. Half the reason for the restrictions is to ensure that new housing can be supported by the surrounding infrastructure. People who are comfortable living somewhere without the surrounding support are already free to purchase housing at much cheaper cost in rural areas. The problem isn't artificial restrictions, it's a country that can't build anymore, that can't get the inherent and necessary bureaucracy streamlined, quick, and responsive; that can't raise sufficient money for public works construction which has no immediate profit potential; that can't persuade its young men to enter the construction trades instead of going to college.
- refulgentis 2y ago
  These polemics are stirring and feel true. It's a purple prose version of east coast 2010s YIMBY. But they're not true. > it's a country that can't build anymore, See above. > that can't raise sufficient money for public works construction Infrastructure spending is at an all time high; massive $300B infrastructure package was passed a few years back. > which has no immediate profit potential What form of public works construction would have immediate profit potential? > that can't persuade its young men to enter the construction trades instead of going to college. Nah. Young men college graduates are consistently decreasing since 2020 for men. https://www.statista.com/statistics/184272/educational-attainment-of-college-diploma-or-higher-by-gender/ https://www.statista.com/statistics/184272/educational-attai... Construction has added ~1 million jobs since December 2020. https://fred.stlouisfed.org/series/USCONS https://fred.stlouisfed.org/series/USCONS
- worstspotgain 2y ago
  Sorry, but these are pretty much some of the falsehoods that have been effective in fooling voters and putting the supply limits in place. The bureaucratic red tape is one of the artificial restrictions. Public works are impeded by the same mechanisms and for the exact same reason. People do go into the trades for the right salaries. Their salaries did rise. They are among the prices of goods that must be provided locally ("non-tradables") and are therefore determined by local rents. There are also union rules in many cities that require that only local labor be used - another one of said restrictions.
rustcleaner 2y ago
Maybe start holding back all the state money to a county if that county's average HUD wait is (say) longer than 3 months. Should really kickstart fixing zoning, fast!
jjav 2y ago
> But it would be much more broadly effective to remove one digit from housing prices How would you in the real world reduce prices by one order of magnitude? e.g. a $1M house would cost 100K tomorrow? Building that house has more than 100K in just parts and labor. Even if the land were free, which it is not.
- worstspotgain 2y ago
  It depends on how overpriced the local market is of course. The one-digit rule is not far from where SF and LA would fall, and works well for emphasis. New construction costs in much of the country are $100-200/sqft [1], but that partially reflects 5 decades of restrictionist overinflation. The price of land should be nominal in most places if you can go vertical without restriction, since the cost per sqft decreeases as the number of stories increases until you hit the dozens or thereabouts. Basically everywhere outside Manhattan and maybe a couple other zipcodes. [1] https://www.newhomesource.com/learn/cost-to-build-house-per-square-foot/ https://www.newhomesource.com/learn/cost-to-build-house-per-...
  - jjav 2y ago
    > New construction costs in much of the country are $100-200/sqft [1] I don't believe that for a moment. If you do, why don't you try to get a 1000sqft home built for $100K? Cheap housing! If that was actually possible (in the US), why isn't everyone doing it? Why is everyone complaining about housing prices instead of just having their own custom homes built for a mere $100K?
scotty79 2y ago
That's why any UBI should be financed by a tax on real estate ownership. Preferably progressive one to prevent concentration of real estate ownership. How much of real estate any entity and person owns should be easily traceable because ownership of real estate directly and ownership of entities that can themselves own property is already tracked.
- worstspotgain 2y ago
  So you want a still artificially-undersupplied market, but with novel ownership covenants and a different taxation regime, and an experimental one at that. Whereas if we just got rid of the artificial undersupply all these problems would vanish. That's not to say a UBI isn't a good idea. But if the lowest rents were around $100/mo (as they used to be even after adjusting for inflation) a large fraction of people who need help today would be able to get by on their own.
  - scotty79 2y ago
    Oversupply doesn't fix the problem of people with huge amounts of capital and people with no capital competing for the same limited essential resource with completely different goals in mind. Prices will always be skewed towards unaffordability regardless of the supply. With more abundant housing rich people and organizations could just buy more of it and drive the prices back high again. There are two supply sides to consider, not just supply and demand. One is supply of housing and the other is supply of money. Since financial world of the rich grew astronomically in recent decades there's huge oversupply of money looking for things to buy. The rich could swallow any amount of additional real estate you can throw at them just buy reducing how much stock market companies valuations are inflated just by a little bit. The only way to safeguard housing from that is making it a comparatively worse investment than other things. Just making more of it won't be sufficient at this stage. Look how much more housing supply China built and housing is still expensive there even though they already have few times more housing units in the country than families.

bdcravens 2y ago

Any attempt to open up building restrictions needs to ensure it doesn't just turn itself into an air drop for real estate investors, otherwise it's unlikely to benefit those most in need of housing.

worstspotgain 2y ago
They can invest in $100-300K houses and condos and rent them out for $400-1200/mo all they want. Or even Airbnb or keep them as vacation homes if they'd rather. If there are no supply restrictions, it's not gonna affect the availability of housing for everyone else. Which of course means they won't bother. The whole con is capturing working people's wages by raising rent and rent-derived prices. Conceptually it's similar to the nominally high-paying job in a company town, where almost all your wages get siphoned off by living expenses for company-owned housing and services. The only difference is the payer and the siphoner are different entities.
- bdcravens 2y ago
  There would have to be an absolute deluge of supply to keep those with capital from buying up, thereby driving up, housing inventory. Like the kind of deluge that keeps building supply stores full of empty shelves for months and bankrupts home owners nationwide as the price of homes plummet. Personally I feel the solution is to clamp down on real estate investors. Also, your rent estimates are off by at least 3x.
  - worstspotgain 2y ago
    Housing is notoriously inelastic. If you assumed a strict rule of 1 person to a bedroom, you can theoretically get wild price swings around the zone where the number of people in a neighborhood is about the same as the number of bedrooms. You don't need to go crazy with oversupply at all to get the correct prices. Look at much of Texas today or at the rest of the country pre-1970 to see what a healthy housing market looks like. I'm sorry, but I have no tears left for those who participated in the pyramid scheme, claiming ignorance or that their peers were doing it too. If their investments bottom out, they usually have enough political clout to screw the taxpayer anyways (see 2008.) We need to fix the market once and keep it fixed. We should bring it back to where it should have been all along. If there are people who have valid claims after that, we can always use some of the humongous "peace dividends" to settle them.
  - zbrozek 2y ago
    We need to build enough to make housing depreciate with age. Speculative investors are only in the market because artificial supply constraints make it a good bet that prices will go up. If the market becomes free to produce supply, they will find higher-return places to park their money.
  - IG_Semmelweiss 2y ago
    don't throw the baby out with the bathwater. Simply restrict hard asset purchases to US citizens. See how that works. if the real estate broker lobby doesn't like it , you are probably on the right track
    - scotty79 2y ago
      Right, but just citizens, no companies. Every separate piece of real estate needs to be owned by a specific person. What a fun world would that be. Or maybe just funny.
  - graeme 2y ago
    But real estate investors can already buy property. What is your objection to lifting restrictions on building property?
graeme 2y ago
There's no magic mechanism where investors build a lot of housing and it becomes expensive because of who owns it. You build more of something and it becomes cheaper. Even if you only build luxury housing or whatever you fear, it becomes cheaper. Richer people will buy the new housing rather than bid up old housing, as they currently do. Investors have "air dropped" into consumer hardware and ai. Have the prices gone up or down?
- bdcravens 2y ago
  Competition drives prices up. Individuals and investors are both competing for the same inventory, but with dramatically different incentives. Remove, or dramatically reduce, the ability of investors to access that inventory and it removes competition.
  - jeromegv 2y ago
    Sure, and I do agree we should tax more if people owns 3, 4 or 5 homes. But in most cases those investors are just renting out again. So they don’t reduce the pool of housing. So they might increase the purchase price, but they contribute to more rental being available. At the end of the day the same amount of housing is available. So investors aren’t the cause of housing shortage.
  - ethbr1 2y ago
    Absolutely agreed. There should be a multipronged approach. Step I: Ban institutional investment in single family homes. I.e. individuals/couples can own 3. After that, disincentives begin to kick in. Any non-individual/couple has strong disincentives against buying single family homes. Step II: Make it easier to build multi-family, denser housing, with a bias towards owner-occupied over renting. Up to and including removing local control over saying "No." Step III: Carve out a very specific space (and zoning) for what rentals (i.e. non-owner-occupied) should look like.
    - worstspotgain 2y ago
      To the person who's paying an exhorbitantly overpriced rent, it's little consolation if they're paying it to someone who owns 2 units rather than 200. They're still being effectively enserfed via the artificial housing shortage. Conversely, if there is no lack of housing, it might actually be more efficient to have a few large landlords than many small ones. If something is wrong and immoral, it doesn't matter much if it's perpretrated by a small-time crook or an industrial-sized one.

CSMastermind 2y ago

I'll dispute the results. Actual study here: https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2244/t/66a8cd0fc256a2303a8569fc/1722338580211/CGIR+LA+BIGLEAP+Final+Report.pdf https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2... One very obvious problem is that they had two groups: one that received $1,000 a month and another control group that received nothing. Their results are based on surveys completed by two groups. The incentive for filling out the survey was a $50 gift card. Unsurprisingly the control group saw significantly more attrition in terms of survey response than vs the people being given $1,000 / month. People who were even marginally better off in the control group were less likely to respond since the hassle of meeting someone in person to fill out a survey isn't worth the $50 to them. So the control group was essentially concentrated down to the respondents who were worse off vs the broader spectrum of the experimental group they were sampling. In a brilliant example of motivated reasoning the people conducting the study saw this difference in attrition as a sign that the payments were having a positive effect as opposed to concluding that people are more likely to show up to fill out your survey if you've given them thousands of dollars because humans have a fundamental sense of reciprocity. The actual study design itself is extremely questionable but even if you take the results at face value they were just comparing the people who got money with people who got nothing. As opposed to for instance comparing money with no strings attached to the efficacy of existing social welfare programs. I'm unfamiliar with the Center for Guaranteed Income but they seem like a political advocacy group more than a serious research team.

snapplebobapple 2y ago
Another group funded by that openai guy did the same study in dallas and chicago and found tge guys given 1k a month ended poorer than the control group after three years. Thats why you hear about secondary resul%s like the paid group going to the dentist more. The primary result is failure but they wanted to soin that study to support thwir goals
- snapplebobapple 2y ago
  a decent summary of the study I referenced above: https://www.youtube.com/watch?v=oyoMgGiWgJQ https://www.youtube.com/watch?v=oyoMgGiWgJQ

solatic 2y ago

> chiefly by removing the artificial supply restrictions Building housing without restrictions gives you slums. Nice housing has lots of surrounding support - electric, gas, water, sewage, Internet lines; schools, parks, swimming pools, transport, not to mention industry, retail, and employment. Half the reason for the restrictions is to ensure that new housing can be supported by the surrounding infrastructure. People who are comfortable living somewhere without the surrounding support are already free to purchase housing at much cheaper cost in rural areas. The problem isn't artificial restrictions, it's a country that can't build anymore, that can't get the inherent and necessary bureaucracy streamlined, quick, and responsive; that can't raise sufficient money for public works construction which has no immediate profit potential; that can't persuade its young men to enter the construction trades instead of going to college.

refulgentis 2y ago
These polemics are stirring and feel true. It's a purple prose version of east coast 2010s YIMBY. But they're not true. > it's a country that can't build anymore, See above. > that can't raise sufficient money for public works construction Infrastructure spending is at an all time high; massive $300B infrastructure package was passed a few years back. > which has no immediate profit potential What form of public works construction would have immediate profit potential? > that can't persuade its young men to enter the construction trades instead of going to college. Nah. Young men college graduates are consistently decreasing since 2020 for men. https://www.statista.com/statistics/184272/educational-attainment-of-college-diploma-or-higher-by-gender/ https://www.statista.com/statistics/184272/educational-attai... Construction has added ~1 million jobs since December 2020. https://fred.stlouisfed.org/series/USCONS https://fred.stlouisfed.org/series/USCONS
worstspotgain 2y ago
Sorry, but these are pretty much some of the falsehoods that have been effective in fooling voters and putting the supply limits in place. The bureaucratic red tape is one of the artificial restrictions. Public works are impeded by the same mechanisms and for the exact same reason. People do go into the trades for the right salaries. Their salaries did rise. They are among the prices of goods that must be provided locally ("non-tradables") and are therefore determined by local rents. There are also union rules in many cities that require that only local labor be used - another one of said restrictions.

rustcleaner 2y ago

Maybe start holding back all the state money to a county if that county's average HUD wait is (say) longer than 3 months. Should really kickstart fixing zoning, fast!

jjav 2y ago

> But it would be much more broadly effective to remove one digit from housing prices How would you in the real world reduce prices by one order of magnitude? e.g. a $1M house would cost 100K tomorrow? Building that house has more than 100K in just parts and labor. Even if the land were free, which it is not.

worstspotgain 2y ago
It depends on how overpriced the local market is of course. The one-digit rule is not far from where SF and LA would fall, and works well for emphasis. New construction costs in much of the country are $100-200/sqft [1], but that partially reflects 5 decades of restrictionist overinflation. The price of land should be nominal in most places if you can go vertical without restriction, since the cost per sqft decreeases as the number of stories increases until you hit the dozens or thereabouts. Basically everywhere outside Manhattan and maybe a couple other zipcodes. [1] https://www.newhomesource.com/learn/cost-to-build-house-per-square-foot/ https://www.newhomesource.com/learn/cost-to-build-house-per-...
- jjav 2y ago
  > New construction costs in much of the country are $100-200/sqft [1] I don't believe that for a moment. If you do, why don't you try to get a 1000sqft home built for $100K? Cheap housing! If that was actually possible (in the US), why isn't everyone doing it? Why is everyone complaining about housing prices instead of just having their own custom homes built for a mere $100K?

scotty79 2y ago

That's why any UBI should be financed by a tax on real estate ownership. Preferably progressive one to prevent concentration of real estate ownership. How much of real estate any entity and person owns should be easily traceable because ownership of real estate directly and ownership of entities that can themselves own property is already tracked.

worstspotgain 2y ago
So you want a still artificially-undersupplied market, but with novel ownership covenants and a different taxation regime, and an experimental one at that. Whereas if we just got rid of the artificial undersupply all these problems would vanish. That's not to say a UBI isn't a good idea. But if the lowest rents were around $100/mo (as they used to be even after adjusting for inflation) a large fraction of people who need help today would be able to get by on their own.
- scotty79 2y ago
  Oversupply doesn't fix the problem of people with huge amounts of capital and people with no capital competing for the same limited essential resource with completely different goals in mind. Prices will always be skewed towards unaffordability regardless of the supply. With more abundant housing rich people and organizations could just buy more of it and drive the prices back high again. There are two supply sides to consider, not just supply and demand. One is supply of housing and the other is supply of money. Since financial world of the rich grew astronomically in recent decades there's huge oversupply of money looking for things to buy. The rich could swallow any amount of additional real estate you can throw at them just buy reducing how much stock market companies valuations are inflated just by a little bit. The only way to safeguard housing from that is making it a comparatively worse investment than other things. Just making more of it won't be sufficient at this stage. Look how much more housing supply China built and housing is still expensive there even though they already have few times more housing units in the country than families.