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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

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.

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.