4 ms·

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 c

by 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.
    - jjav 2y ago
      > 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. No, it makes all the difference. If you only have small-time operators, by definition you have lots of them. Thus no single one has much power at all. You can move easily, change landlords and negotiate everything every time. OTOH if you have two or three megacorporations who own all the housing in your city (and you bet they collude), then you're playing with someone who holds all the cards and you have zero negotiating power. What are you going to do? Move to a different unit? They also own it.
      - worstspotgain 2y ago
        > Thus no single one has much power at all. Property owners are effectively cartelized - that's how they got the supply restrictions passed in the first place. You can't "move your way" out of the market rent, and the market rent is the cartel rent. It's set to the same level as the monopoly rent. It's even higher than if there were only two enormous landlords that did not benefit from the collusion built into the supply restriction system. A landlord duopoly would not have the political power to get the restrictions passed in the first place.
        jjav 2y ago
        > A landlord duopoly would not have the political power to get the restrictions passed in the first place. I'm at a loss on how to respond to this. This is exactly the polar opposite of how our (USA) political system works. Huge corporations are very well connected with the politicians. They contribute to their campaigns, go to all their fund raisers, play golf together. In exchange, they get to have a massive influence in how laws are written in their favor. You can search for endless cases where these companies directly write the text of the laws and then just pass it through their buddy legislator. In any market where there are only a few huge players, you can be 100% certain those players are connected with the politicians and buying their way into favorable legislation at every point. The only way to prevent that corruption is to have lots of tiny competitors, none of whom are rich/powerful enough to drive the laws to their benefit.
- graeme 2y ago
  But real estate investors can already buy any property they want. The post was about removing restrictions on building properties.
- mgh95 2y ago
  > Competition drives prices up. Competition doesn't drive prices up. Competition with restricted supply drives prices up. Competition is just the means of price discovery. Look up what happened in Minneapolis, MN when significant supply was added. In the presence of discovery, prices went down.

by graeme 2y ago

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.
  - jjav 2y ago
    > 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. No, it makes all the difference. If you only have small-time operators, by definition you have lots of them. Thus no single one has much power at all. You can move easily, change landlords and negotiate everything every time. OTOH if you have two or three megacorporations who own all the housing in your city (and you bet they collude), then you're playing with someone who holds all the cards and you have zero negotiating power. What are you going to do? Move to a different unit? They also own it.
    - worstspotgain 2y ago
      > Thus no single one has much power at all. Property owners are effectively cartelized - that's how they got the supply restrictions passed in the first place. You can't "move your way" out of the market rent, and the market rent is the cartel rent. It's set to the same level as the monopoly rent. It's even higher than if there were only two enormous landlords that did not benefit from the collusion built into the supply restriction system. A landlord duopoly would not have the political power to get the restrictions passed in the first place.
      - jjav 2y ago
        > A landlord duopoly would not have the political power to get the restrictions passed in the first place. I'm at a loss on how to respond to this. This is exactly the polar opposite of how our (USA) political system works. Huge corporations are very well connected with the politicians. They contribute to their campaigns, go to all their fund raisers, play golf together. In exchange, they get to have a massive influence in how laws are written in their favor. You can search for endless cases where these companies directly write the text of the laws and then just pass it through their buddy legislator. In any market where there are only a few huge players, you can be 100% certain those players are connected with the politicians and buying their way into favorable legislation at every point. The only way to prevent that corruption is to have lots of tiny competitors, none of whom are rich/powerful enough to drive the laws to their benefit.
graeme 2y ago
But real estate investors can already buy any property they want. The post was about removing restrictions on building properties.
mgh95 2y ago
> Competition drives prices up. Competition doesn't drive prices up. Competition with restricted supply drives prices up. Competition is just the means of price discovery. Look up what happened in Minneapolis, MN when significant supply was added. In the presence of discovery, prices went down.