5 ms·

The solution is simple: loosen regulation around building, and let people build more! When houses become an investment, that's when you start screwing young pe

The solution is simple: loosen regulation around building, and let people build more! When houses become an investment, that's when you start screwing young people! And it stops being an asset if you just simply build more

thrance 1y ago
Why would a larger supply stop private equity from buying it all?
- AnimalMuppet 1y ago
  Because if you get zoning out of the way, we can keep building, and keep building, and keep building. Let them keep buying. But if we build enough, they won't be able to rent it all out. Are they going to keep buying to control the rent-able supply forever? No, they'll run out of money before we run out of buildable land. (Maybe not before we run out of wood, shingles, and labor though...)
  - thrance 1y ago
    And then you're left with huge ghost towns, like that one place in Seattle. This seems like a terrible solution, although it might work. And let's not even talk about the environmental impact, it seems to be a taboo nowadays. Why not just prevent private companies from buying homes they don't use, and force them to sell the ones they are currently holding?
    - AnimalMuppet 1y ago
      Right, ghost towns owned by private equity. So I'm not crying. I agree about the environmental impact, though. "Prevent private companies from buying homes they don't use" is going to be a really hard sell legally. (Though, to be fair, changing zoning laws seems also to be a really hard sell...)
      - thrance 1y ago
        Ah, fair enough.
- Manuel_D 1y ago
  If loads of housing is built and the price of housing starts dropping, firms won't want to invest in housing because they'll lose money. Unfortunately, a lot of politically active home owners also want to keep the price of housing from dropping so this is a harder thing for local governments to put into practice.
  - mcntsh 1y ago
    Why would housing be built in the first place if the price starts dropping?
    - terminalshort 1y ago
      Same reason anything else keeps getting built when the price drops. Builders are not investors. As the price drops the cost of acquiring new land to build on also drops. As long as a builder has a margin between land + construction cost, they will build.
    - HDThoreaun 1y ago
      A huge part of the cost of building a house right now is the excessive regulation. By deregulating we will be able to build houses for less money and so builders will be able to sell them for less money. In addition apartments and especially larger apartment buildings are straight up illegal in many areas even though demand is high. Legalizing these units which are much cheaper than SFHs would allow all housing prices to decrease as some of the people competing for SFHs instead buy a condo.
    - xnx 1y ago
      Same reason most things (cars, furniture, laptops, vegetables) are made and sold: because they can be sold for more than they cost to make.
- davidw 1y ago
  They don't have the cash. Housing is a huge market. Downvote all you want, but math is math.
  - sorcerer-mar 1y ago
    They already don't buy with cash, which is actually one of the only advantages of scale in real estate: big firms can borrow cash more cheaply.
- energy123 1y ago
  You're fixated on price. Look at rent instead. Private equity cannot create new tenants. The number of tenants is fixed. That's why rental inflation is significantly better in Texas compared to California. Private equity is not a relevant variable here.
sorcerer-mar 1y ago
Supply constraints don't explain housing prices: https://www.nber.org/papers/w33576 https://www.nber.org/papers/w33576 Land prices rise with income. Through all places in all points of history. The solution is a land value tax.
- greenie_beans 1y ago
  upvoted then realized you are promoting LVT. this is why i think LVT is a terrible idea: https://news.ycombinator.com/item?id=44532444 https://news.ycombinator.com/item?id=44532444 land value is only a small part of housing costs.
  - sorcerer-mar 1y ago
    I don't think you understand LVT based on this "not to mention the political debates/decisions over what constitutes "fully utilized"." LVT doesn't require any such determination. Anyway, I'm not opposed to the solution you mention as well. We should subsidize supply of housing, and supply at any price will serve the same purpose of driving prices down, so yes I agree we should build public housing for higher price points.
    - greenie_beans 1y ago
      [dead]
- HDThoreaun 1y ago
  Land prices rise with income but housing constraints mean each family needs more land. Just look at the rental market in austin collapsing 20% while incomes continue to rise to empirically falsify your working paper.
greenie_beans 1y ago
i no longer buy the YIMBY argument as the sole reason we have a housing crisis. it's a very convenient narrative if you work in/around real estate and a lot of smart people have been duped by it. we had no problem in the past building housing with current regulations: https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST to be clear, regulations is part of the problem in some markets but not everywhere. how are local regulations causing a housing crisis everywhere? this problem is happening everywhere, and local municipalities across the country didn't coordinate to cause this. they stopped building after GFC bc it was too risky. market dynamics, the profit incentive, and now the cost for labor + material + borrowing costs is the problem. this is a better solution: https://www.npr.org/2024/10/07/nx-s1-5119633/housing-crisis-solution-public-housing-mixed-income-maryland https://www.npr.org/2024/10/07/nx-s1-5119633/housing-crisis-...
- energy123 1y ago
  > this is a better solution Public housing is very good, but I want to encourage a mindset shift. There are many plausible housing policies, and they are not in competition with each other. We should have public housing and we should follow the neoliberal abundance agenda and we should implement a LVT and we should do many other things. None of these policies somehow makes it difficult to implement the others. There's no tension. If anything they work in harmony. A LVT can be used to fund public housing, and neoliberal deregulations will also assist in making public housing cheaper for the taxpayer in terms of land use efficiency. If we care about housing, we need to get over these factional battles that only serve the landowning class.
  - greenie_beans 1y ago
    this is very valid point! i agree. but some ideas are bad, like LVT, which will not make housing cheaper: https://news.ycombinator.com/item?id=44532444 https://news.ycombinator.com/item?id=44532444

thrance 1y ago

Why would a larger supply stop private equity from buying it all?

AnimalMuppet 1y ago
Because if you get zoning out of the way, we can keep building, and keep building, and keep building. Let them keep buying. But if we build enough, they won't be able to rent it all out. Are they going to keep buying to control the rent-able supply forever? No, they'll run out of money before we run out of buildable land. (Maybe not before we run out of wood, shingles, and labor though...)
- thrance 1y ago
  And then you're left with huge ghost towns, like that one place in Seattle. This seems like a terrible solution, although it might work. And let's not even talk about the environmental impact, it seems to be a taboo nowadays. Why not just prevent private companies from buying homes they don't use, and force them to sell the ones they are currently holding?
  - AnimalMuppet 1y ago
    Right, ghost towns owned by private equity. So I'm not crying. I agree about the environmental impact, though. "Prevent private companies from buying homes they don't use" is going to be a really hard sell legally. (Though, to be fair, changing zoning laws seems also to be a really hard sell...)
    - thrance 1y ago
      Ah, fair enough.
Manuel_D 1y ago
If loads of housing is built and the price of housing starts dropping, firms won't want to invest in housing because they'll lose money. Unfortunately, a lot of politically active home owners also want to keep the price of housing from dropping so this is a harder thing for local governments to put into practice.
- mcntsh 1y ago
  Why would housing be built in the first place if the price starts dropping?
  - terminalshort 1y ago
    Same reason anything else keeps getting built when the price drops. Builders are not investors. As the price drops the cost of acquiring new land to build on also drops. As long as a builder has a margin between land + construction cost, they will build.
  - HDThoreaun 1y ago
    A huge part of the cost of building a house right now is the excessive regulation. By deregulating we will be able to build houses for less money and so builders will be able to sell them for less money. In addition apartments and especially larger apartment buildings are straight up illegal in many areas even though demand is high. Legalizing these units which are much cheaper than SFHs would allow all housing prices to decrease as some of the people competing for SFHs instead buy a condo.
  - xnx 1y ago
    Same reason most things (cars, furniture, laptops, vegetables) are made and sold: because they can be sold for more than they cost to make.
davidw 1y ago
They don't have the cash. Housing is a huge market. Downvote all you want, but math is math.
- sorcerer-mar 1y ago
  They already don't buy with cash, which is actually one of the only advantages of scale in real estate: big firms can borrow cash more cheaply.
energy123 1y ago
You're fixated on price. Look at rent instead. Private equity cannot create new tenants. The number of tenants is fixed. That's why rental inflation is significantly better in Texas compared to California. Private equity is not a relevant variable here.

sorcerer-mar 1y ago

Supply constraints don't explain housing prices: https://www.nber.org/papers/w33576 https://www.nber.org/papers/w33576 Land prices rise with income. Through all places in all points of history. The solution is a land value tax.

greenie_beans 1y ago
upvoted then realized you are promoting LVT. this is why i think LVT is a terrible idea: https://news.ycombinator.com/item?id=44532444 https://news.ycombinator.com/item?id=44532444 land value is only a small part of housing costs.
- sorcerer-mar 1y ago
  I don't think you understand LVT based on this "not to mention the political debates/decisions over what constitutes "fully utilized"." LVT doesn't require any such determination. Anyway, I'm not opposed to the solution you mention as well. We should subsidize supply of housing, and supply at any price will serve the same purpose of driving prices down, so yes I agree we should build public housing for higher price points.
  - greenie_beans 1y ago
    [dead]
HDThoreaun 1y ago
Land prices rise with income but housing constraints mean each family needs more land. Just look at the rental market in austin collapsing 20% while incomes continue to rise to empirically falsify your working paper.

greenie_beans 1y ago

i no longer buy the YIMBY argument as the sole reason we have a housing crisis. it's a very convenient narrative if you work in/around real estate and a lot of smart people have been duped by it. we had no problem in the past building housing with current regulations: https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST to be clear, regulations is part of the problem in some markets but not everywhere. how are local regulations causing a housing crisis everywhere? this problem is happening everywhere, and local municipalities across the country didn't coordinate to cause this. they stopped building after GFC bc it was too risky. market dynamics, the profit incentive, and now the cost for labor + material + borrowing costs is the problem. this is a better solution: https://www.npr.org/2024/10/07/nx-s1-5119633/housing-crisis-solution-public-housing-mixed-income-maryland https://www.npr.org/2024/10/07/nx-s1-5119633/housing-crisis-...

energy123 1y ago
> this is a better solution Public housing is very good, but I want to encourage a mindset shift. There are many plausible housing policies, and they are not in competition with each other. We should have public housing and we should follow the neoliberal abundance agenda and we should implement a LVT and we should do many other things. None of these policies somehow makes it difficult to implement the others. There's no tension. If anything they work in harmony. A LVT can be used to fund public housing, and neoliberal deregulations will also assist in making public housing cheaper for the taxpayer in terms of land use efficiency. If we care about housing, we need to get over these factional battles that only serve the landowning class.
- greenie_beans 1y ago
  this is very valid point! i agree. but some ideas are bad, like LVT, which will not make housing cheaper: https://news.ycombinator.com/item?id=44532444 https://news.ycombinator.com/item?id=44532444