7 ms·

> prices are inflated the word 'inflated' presumes that the price is higher than _it should be_. The underlying assumption is that homes _should_ cost less, an

by chii 2y ago

> prices are inflated the word 'inflated' presumes that the price is higher than _it should be_. The underlying assumption is that homes _should_ cost less, and the current price is artificially high. It isn't. The price if a house is not artificially high - it is high for market driven reasons. Therefore, it is a market price. Nobody is inflating the price via some nefarious scheme.

bb88 2y ago
In a free, fair, and regulated market. Yes. I agree with you.
davidw 2y ago
Housing is one of the most highly regulated markets there are. There are all kinds of rules and regulations - primarily zoning codes - that have the effect of limiting the amount of housing in a given area.
charlie90 2y ago
You dont need a nefarious scheme to have a market bubble.
ty6853 2y ago
>Nobody is inflating the price via some nefarious scheme. Lol I built a house from scratch including all labor and legal aspects. Almost the whole system is designed as a nefarious scheme to grandfather in the prior generation while kicking anyone in the teeth who wants to build a place the way the voters had their own houses built 50 years ago.
quantified 2y ago
Simply via other schemes.
UtopiaPunk 2y ago
If housing feels expensive, and there are a lot of people who would like to buy a house, then under a free market, a greedy landlord simply needs to build a 6-plex or an apartment complex to make lots of money. More people living on one plot of land should reduce costs for the individuals living there, and the landlord should still make tons of money because they are renting to, say, six families instead of one. Another greedy landlord sees this success and does something similar - the market price has been suppressed a tiny bit, but the demand is so huge and supply so low, it is barely a blip. Do this many times over, though, and we'd expect to see denser and cheaper housing over time. Landlords and developers should essentially be competing for customers by offering an attractive product (ideally, some healthy balance between good prices and good quality). Why don't we see that happening at a meaningful scale? Because the housing market is not free - it's regulated very very badly. Where developers can build, there is a huge amount of red-tape and often a crushing process of input from neighbors - neighbors who, mind you, already own their own houses, so this new development would never be used by them. And these neighbors are also strongly incentived to keep their property values as high as possible, as owning a house has very much become an investment. It's no wonder that home owners find all kinds of reasons to say no to denser developments near their homes. And then there's the fact that huge swathes of attractive neighborhoods are zoned for single-family homes. Developers cannot even legally consider building in such areas (and I encourage you to look into this for a city near you, it's shocking). In LA, of all the land that is zoned for residential use at all, about 75% is zoned as single-family housing. Los Angeles! I'm not a strong proponent of the "free" market, but bad regulation is a nightmare.
- thunky 2y ago
  > More people living on one plot of land should reduce costs for the individuals living there But it also reduces the value of existing homes and changes the environment in a negative way, which is why people that already own homes there dislike this idea. It's easy for someone to say that someone else should be good with this for the greater good, but regulation and zoning is everywhere and most people actually want it that way. The people that move in your 6-plexes will probably not like when they start stacking up 50 unit apartment buildings between their 6-plexes either.
  - UtopiaPunk 2y ago
    "But it also reduces the value of existing homes..." Yes! Homes should be a place to live, not a financial investment. But this is exactly why neighbors would oppose denser development. "... and changes the environment in a negative way." Denser development is much more environmentally friendly than sprawling low density. Less acreage can be devoted to housing, and more devoted to nature (and to be clear, a lawn of grass is not "nature"). Additionally, low density sprawl makes it necessary to use a car and drive longer distances, because you are physically further away from stuff. In a high density area, public transit is more effective, or one can just simply walk around the corner to the grocery store or whatever.
    - thunky 2y ago
      > Homes should be a place to live, not a financial investment Maybe they shouldn't be investments, but they are, and you can't expect people to ignore this. I will agree that the government shouldn't incentivise this behavior, but even without the government's help they will continue to be a large portion of household wealth, like it or not. > Denser development is much more environmentally friendly Sorry when I said "the environment" I meant the living environment, as in: the common preference to live in a quiet low density neighborhood rather than a loud dense urban environment with all of the problems that come with it. I don't know where you live, but ignoring money and housing/rental values, if the population of your block increased 10x would you be happy about it? Even if you would be excited by that, not everyone will agree with you that stacking ourselves on top of eachother is the pinnacle of human civilization.

by chii 2y ago

bb88 2y ago

In a free, fair, and regulated market. Yes. I agree with you.

davidw 2y ago

Housing is one of the most highly regulated markets there are. There are all kinds of rules and regulations - primarily zoning codes - that have the effect of limiting the amount of housing in a given area.

charlie90 2y ago

You dont need a nefarious scheme to have a market bubble.

ty6853 2y ago

>Nobody is inflating the price via some nefarious scheme. Lol I built a house from scratch including all labor and legal aspects. Almost the whole system is designed as a nefarious scheme to grandfather in the prior generation while kicking anyone in the teeth who wants to build a place the way the voters had their own houses built 50 years ago.

quantified 2y ago

Simply via other schemes.

UtopiaPunk 2y ago

If housing feels expensive, and there are a lot of people who would like to buy a house, then under a free market, a greedy landlord simply needs to build a 6-plex or an apartment complex to make lots of money. More people living on one plot of land should reduce costs for the individuals living there, and the landlord should still make tons of money because they are renting to, say, six families instead of one. Another greedy landlord sees this success and does something similar - the market price has been suppressed a tiny bit, but the demand is so huge and supply so low, it is barely a blip. Do this many times over, though, and we'd expect to see denser and cheaper housing over time. Landlords and developers should essentially be competing for customers by offering an attractive product (ideally, some healthy balance between good prices and good quality). Why don't we see that happening at a meaningful scale? Because the housing market is not free - it's regulated very very badly. Where developers can build, there is a huge amount of red-tape and often a crushing process of input from neighbors - neighbors who, mind you, already own their own houses, so this new development would never be used by them. And these neighbors are also strongly incentived to keep their property values as high as possible, as owning a house has very much become an investment. It's no wonder that home owners find all kinds of reasons to say no to denser developments near their homes. And then there's the fact that huge swathes of attractive neighborhoods are zoned for single-family homes. Developers cannot even legally consider building in such areas (and I encourage you to look into this for a city near you, it's shocking). In LA, of all the land that is zoned for residential use at all, about 75% is zoned as single-family housing. Los Angeles! I'm not a strong proponent of the "free" market, but bad regulation is a nightmare.

thunky 2y ago
> More people living on one plot of land should reduce costs for the individuals living there But it also reduces the value of existing homes and changes the environment in a negative way, which is why people that already own homes there dislike this idea. It's easy for someone to say that someone else should be good with this for the greater good, but regulation and zoning is everywhere and most people actually want it that way. The people that move in your 6-plexes will probably not like when they start stacking up 50 unit apartment buildings between their 6-plexes either.
- UtopiaPunk 2y ago
  "But it also reduces the value of existing homes..." Yes! Homes should be a place to live, not a financial investment. But this is exactly why neighbors would oppose denser development. "... and changes the environment in a negative way." Denser development is much more environmentally friendly than sprawling low density. Less acreage can be devoted to housing, and more devoted to nature (and to be clear, a lawn of grass is not "nature"). Additionally, low density sprawl makes it necessary to use a car and drive longer distances, because you are physically further away from stuff. In a high density area, public transit is more effective, or one can just simply walk around the corner to the grocery store or whatever.
  - thunky 2y ago
    > Homes should be a place to live, not a financial investment Maybe they shouldn't be investments, but they are, and you can't expect people to ignore this. I will agree that the government shouldn't incentivise this behavior, but even without the government's help they will continue to be a large portion of household wealth, like it or not. > Denser development is much more environmentally friendly Sorry when I said "the environment" I meant the living environment, as in: the common preference to live in a quiet low density neighborhood rather than a loud dense urban environment with all of the problems that come with it. I don't know where you live, but ignoring money and housing/rental values, if the population of your block increased 10x would you be happy about it? Even if you would be excited by that, not everyone will agree with you that stacking ourselves on top of eachother is the pinnacle of human civilization.