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What about wealth inequality as the root cause of housing shortage? Keep building. Eventually there are more houses than people who want to be in them, regar

What about wealth inequality as the root cause of housing shortage? Keep building. Eventually there are more houses than people who want to be in them, regardless of whether or not they're being rented or owned. When that happens you'll see the prices fall. After all, if nobody wants to rent your house, you'll either rent it for lower or sell it. If nobody wants to buy it, you'll lower the price. Ad nauseum.

dandanua 1y ago
This will not work if there is an exponential wealth inequality in a society, which is where everything is heading.
- 627467 1y ago
  Can you explain "exponential wealth inequality"? Sounds a bit like "problem A is unsolvable because - look at here! - no one is solving problem C!"
  - shazbotter 1y ago
    I mean, I can't speak to housing problems in this thread, but your second sentence sounds like every post mortem and root cause analysis I've ever seen. Sometimes problems have root causes that must be addressed first.
  - hdgvhicv 1y ago
    40 years ago you could buy a share in American companies for an hours work. Today you have to work 25 hours to buy the same share In 40 years time you’ll have to work 4 months to buy what in 1985 would cost 1 hour.
Tade0 1y ago
China did that on a large scale, at one point using more concrete in three years than the US in the entire 20th century. There's reportedly enough housing stock to house the population twice over, yet prices still only increased. Where there's sufficient inequality, the country will run out of eligible land before the wealthy run out of money.
- aianus 1y ago
  Rents in China are dirt cheap and hardly increase if you’re rational about your housing instead of chasing status and face.
  - Tade0 1y ago
    Rents - yes. Real estate - no. One huge sign of the housing market being out of control is the decoupling of renting from real estate prices. There's hardly a stronger indicator of it being irrelevant whether someone lives there or not.
tsimionescu 1y ago
This only works if all those houses are on the market. Nothing is stopping today's rich people from buying up all new housing, and only letting a handful be on the market so as to not flood the market and not let prices go down.
- nikanj 1y ago
  Ah, the classic investment strategy of eating up the cost of keeping a house empty, so that others who do accept renters would make more money ”The rich” aren’t that stupid, why would they take the losses to support someone else making a profit?
  - ImHereToVote 1y ago
    It's not about the rich being stupid. It's about banks only creating credit for "sure bets". Housing.
  - sensanaty 1y ago
    I recall an article on HN quite a while ago about one of those property management companies/websites in the Bay Area. The article was detailing that, while the majority of people looking to rent out their properties were individuals and not the ultra wealthy, the app "encouraged" price-fixing, including things such as keeping a certain % of lots vacant on purpose in order to drive up prices artificially. I put encouraged in quotes because it turned out that a prerequisite of managing your properties through this application was actually complying with the price fixing, on an app-wide scale of all its users. So despite it making no financial sense on an individual, house-by-house level, what happened in practice is that the market itself got strangled by this collusion and despite the existence of many empty houses available for either purchase or rent, you ended up with a non-negligible amount of these places not ending up in the market organically and as such driving up the costs for everyone. The property owners win big with this scheme of course, and the way things were setup you'd be a fool to go against the grain and try outcompete on cheaper housing, since you can't beat an entire market getting strangled. So yes, "the rich" aren't that stupid, they just so happen to have systems that make these sort of moves profitable.
thrance 1y ago
And who will build homes if there's no one to buy them?
- spicyusername 1y ago
  Having more homes than people want to buy would be an amazing problem to have.
  - thrance 1y ago
    Yes but that's impossible, the builder needs a buyer before he builds.

dandanua 1y ago

This will not work if there is an exponential wealth inequality in a society, which is where everything is heading.

627467 1y ago
Can you explain "exponential wealth inequality"? Sounds a bit like "problem A is unsolvable because - look at here! - no one is solving problem C!"
- shazbotter 1y ago
  I mean, I can't speak to housing problems in this thread, but your second sentence sounds like every post mortem and root cause analysis I've ever seen. Sometimes problems have root causes that must be addressed first.
- hdgvhicv 1y ago
  40 years ago you could buy a share in American companies for an hours work. Today you have to work 25 hours to buy the same share In 40 years time you’ll have to work 4 months to buy what in 1985 would cost 1 hour.

Tade0 1y ago

China did that on a large scale, at one point using more concrete in three years than the US in the entire 20th century. There's reportedly enough housing stock to house the population twice over, yet prices still only increased. Where there's sufficient inequality, the country will run out of eligible land before the wealthy run out of money.

aianus 1y ago
Rents in China are dirt cheap and hardly increase if you’re rational about your housing instead of chasing status and face.
- Tade0 1y ago
  Rents - yes. Real estate - no. One huge sign of the housing market being out of control is the decoupling of renting from real estate prices. There's hardly a stronger indicator of it being irrelevant whether someone lives there or not.

tsimionescu 1y ago

This only works if all those houses are on the market. Nothing is stopping today's rich people from buying up all new housing, and only letting a handful be on the market so as to not flood the market and not let prices go down.

nikanj 1y ago
Ah, the classic investment strategy of eating up the cost of keeping a house empty, so that others who do accept renters would make more money ”The rich” aren’t that stupid, why would they take the losses to support someone else making a profit?
- ImHereToVote 1y ago
  It's not about the rich being stupid. It's about banks only creating credit for "sure bets". Housing.
- sensanaty 1y ago
  I recall an article on HN quite a while ago about one of those property management companies/websites in the Bay Area. The article was detailing that, while the majority of people looking to rent out their properties were individuals and not the ultra wealthy, the app "encouraged" price-fixing, including things such as keeping a certain % of lots vacant on purpose in order to drive up prices artificially. I put encouraged in quotes because it turned out that a prerequisite of managing your properties through this application was actually complying with the price fixing, on an app-wide scale of all its users. So despite it making no financial sense on an individual, house-by-house level, what happened in practice is that the market itself got strangled by this collusion and despite the existence of many empty houses available for either purchase or rent, you ended up with a non-negligible amount of these places not ending up in the market organically and as such driving up the costs for everyone. The property owners win big with this scheme of course, and the way things were setup you'd be a fool to go against the grain and try outcompete on cheaper housing, since you can't beat an entire market getting strangled. So yes, "the rich" aren't that stupid, they just so happen to have systems that make these sort of moves profitable.

thrance 1y ago

And who will build homes if there's no one to buy them?

spicyusername 1y ago
Having more homes than people want to buy would be an amazing problem to have.
- thrance 1y ago
  Yes but that's impossible, the builder needs a buyer before he builds.