4 ms·

People don't like being told that the problem is a housing shortage.

jsbg 1y ago
Really. If obsessive zoning and building regulations didn't artificially restrict the supply then there would be no reason for anyone to "invest" in houses.
- breakyerself 1y ago
  100%. I'm a far left anticapitalist, but facts are facts. Zoning, restrictive building codes, and the death of much of the housing construction industry post 2007. All contribute to housing costs and homelessness. I'd like to see zoning opened back up for increasing density wherever it's needed, but I would also like to see a strong social housing policy.
- rconti 1y ago
  That doesn't strike me as true at all. Nationwide, housing has generally been a "good investment", regardless of whether we're talking about an area that restricts supply or one that does not.
  - breakyerself 1y ago
    The places where it's a good enough investment for investors to buy up real estate are in these high demand markets where housing supply has massively lagged demand. Homeowners may be satisfied that their home values have increased everywhere, but black Rock isn't buying houses in small towns in Idaho and ohio because the ROI isn't as high.
  - tptacek 1y ago
    Rents and home prices have repeatedly fallen in places that have authorized large scale new building. In the past, those price pressures were probably offset by large-scale moves from the northeast and midwest into the Sun Belt, but those appear to have mostly equilibrated now.
- grafmax 1y ago
  An unregulated supply will still offer promising investment opportunities to those with enough money to buy them up. Look at crypto or private equity. These markets are lightly regulated. But prices are bid up by big money. Unfortunately just dumping regulation is unlikely to fix housing.
  - tptacek 1y ago
    People say this but then never draw the rest of the owl. It costs money, substantial money, to hold on to a house. As soon as you propose that you're going to close that gap by renting the house out, you're competing in the market with everybody else letting out houses, and supply-and-demand kicks in. Can you explain the mechanism by which accumulating vacant houses would provide the same reward structure as crypto speculation?
    - grafmax 1y ago
      Professional property managers can scale the cost of ownership in a way individual owners can’t. Besides that speculators can also withhold supply, artificially inflating prices. 2008 occurred due to speculation, independent of NIMBY regulation. As for crypto, housing can actually be more profitable than crypto since investors see rentier income not just speculative appreciation. Ultimately, this isn't just a supply-and-demand problem in an idealized market. It's a resource allocation issue where investors with significant capital can hoard housing, driving up costs, while many people struggle with homelessness. Simply greasing the market with deregulation won't solve this fundamental imbalance.
      - tptacek 1y ago
        I'm sure they can do lots of things homeowners can't, but they can't defy gravity. Again: I'm looking for an explanation for how investors could come out ahead amassing houses they keep vacant in the face of increasing supply.
        grafmax 1y ago
mordae 1y ago
Huh. So, like, maybe if rents were not spiking and people were not bleeding money to predatory landlords, maybe, hear me out, maybe they would instead pay someone to build them a house.
- klipt 1y ago
  > pay someone to build them a house On what land? With what planning permits?
- NewJazz 1y ago
  Sorry but this is a fundamental misunderstanding of supply and demand.
- bpt3 1y ago
  2021 called, it would like its performative talking points back. Build more housing, and "predatory" landlords will have more competition. The endless restrictions on residential construction are the root cause, not your envy of wealthy individuals. Side point: There are many people who are in no position to own a home or have one built for them. Where do they live if there aren't any landlords?
  - breakyerself 1y ago
    Public housing, housing cooperatives.
jayd16 1y ago
Percentage owned by investors doesn't really imply inventory vs demand, does it?
- breakyerself 1y ago
  Investors tend to invest where the ROI is good. Which tends to be where demand is outstripping supply, but I don't think investor percentages would track that perfectly. I'd expect there to be confounding variables.
gosub100 1y ago
A problem, not the problem. Regulations block new supply. If this cannot be overcome, why not add another regulation that private equity cannot own houses? There's no reason they should not be subject to CAs extensive regulations too.
- tptacek 1y ago
  Private equity owns virtually none of the homes in the municipality I live in, just outside the city of Chicago, adjacent to redlined neighborhoods with abysmal schools full of families who would love a chance at the resources we have. Despite insanely high property taxes that depress housing values, our home prices set new records every year. Homeowners here would just love to spend a year workshopping regulations to prevent investors from buying homes. They know that those regulations would do nothing at all to address the scarcity that drives their home prices, and wouldn't result in them having to adapt to large numbers of new neighbors. It's the exact same reason they obsess over inclusionary zoning ordinances (IZOs). Affordability is so important! That's why we need new, toothier regulations to ensure that no new housing projects here can ever pencil out for the developers. PE is a complete sideshow. The root cause of the housing crisis is exclusionary zoning.
akmiller 1y ago
That's because it's not. That's a cop-out. Wealth inequality is the crux of the issue.
- bpt3 1y ago
  Then why is almost every metric of housing affordability highly correlated to housing availability? Or maybe I am misunderstanding what "issue" you're referring to?
  - akmiller 1y ago
    I'm not an economist but if you listen to Gary Stevenson talk about this very issue he discusses it in depth. But, when it comes down to it if EVERYTHING is getting more expensive that looking at on variable in one market can't be the crux of the issue. When you have large transfers of wealth and the wealth gap grows significantly the only thing for rich people to do is buy up assets. Assets are fixed, so the share of assets owned by rich people are drastically increasing. This is inline with the # of houses owned by private investors and #'s of assets owned by other investors will reveal the same thing.
    - bpt3 1y ago
      > But, when it comes down to it if EVERYTHING is getting more expensive that looking at on variable in one market can't be the crux of the issue. Everything isn't getting more expensive. For example, housing prices and rents have gone down in areas where restrictions on new residential construction have been reduced. > When you have large transfers of wealth and the wealth gap grows significantly the only thing for rich people to do is buy up assets. That's not the only thing for rich people to do, but it is something people who make smart financial decisions do. > Assets are fixed, so the share of assets owned by rich people are drastically increasing. They aren't fixed in any asset class, so there's no real reason to explore your point here. > This is inline with the # of houses owned by private investors and #'s of assets owned by other investors will reveal the same thing. CA actually has a lower than average percentage of homes owned by investors, and I haven't seen any evidence it's increasing by a meaningful amount.
twiceaday 1y ago
This is naive. The problem is that there are enough people with enough power who want house prices to keep going up. The solution must involve making them upset that they cannot get their way. Anything that doesn't have this shape is a stalling tactic in their favor.
tamimio 1y ago
Not entirely, the major factor is banks' credit creation. When any person can go and take a loan that was created from nothing (literal digits created by your bank), and sometimes based on another "speculated value" of a house you own, you will flood the market with an exponential rise of demand that will ALWAYS be higher than the supply. To solve the housing issue you have to follow the root cause, and always follow the money: first, halt credit creation, disincentivize it (ban interest), no speculation values. Second, make housing a depreciated asset, like cars, etc. Without these two, housing markets will never be solved. The thing is, the government knows that, but it's in its interest to keep the prices up, because that will mean more paid taxes! Which is why they fought WFH and created this hybrid model, to keep people around urban areas and keep prices up. I think Canada even admitted it later -I remember I read it somewhere. It's a multi-dimensional issue and the only losing party here is the average middle class person.
- kyleee 1y ago
  Instead of all those unrealistic things we should just build enough houses

jsbg 1y ago

Really. If obsessive zoning and building regulations didn't artificially restrict the supply then there would be no reason for anyone to "invest" in houses.

breakyerself 1y ago
100%. I'm a far left anticapitalist, but facts are facts. Zoning, restrictive building codes, and the death of much of the housing construction industry post 2007. All contribute to housing costs and homelessness. I'd like to see zoning opened back up for increasing density wherever it's needed, but I would also like to see a strong social housing policy.
rconti 1y ago
That doesn't strike me as true at all. Nationwide, housing has generally been a "good investment", regardless of whether we're talking about an area that restricts supply or one that does not.
- breakyerself 1y ago
  The places where it's a good enough investment for investors to buy up real estate are in these high demand markets where housing supply has massively lagged demand. Homeowners may be satisfied that their home values have increased everywhere, but black Rock isn't buying houses in small towns in Idaho and ohio because the ROI isn't as high.
- tptacek 1y ago
  Rents and home prices have repeatedly fallen in places that have authorized large scale new building. In the past, those price pressures were probably offset by large-scale moves from the northeast and midwest into the Sun Belt, but those appear to have mostly equilibrated now.
grafmax 1y ago
An unregulated supply will still offer promising investment opportunities to those with enough money to buy them up. Look at crypto or private equity. These markets are lightly regulated. But prices are bid up by big money. Unfortunately just dumping regulation is unlikely to fix housing.
- tptacek 1y ago
  People say this but then never draw the rest of the owl. It costs money, substantial money, to hold on to a house. As soon as you propose that you're going to close that gap by renting the house out, you're competing in the market with everybody else letting out houses, and supply-and-demand kicks in. Can you explain the mechanism by which accumulating vacant houses would provide the same reward structure as crypto speculation?
  - grafmax 1y ago
    Professional property managers can scale the cost of ownership in a way individual owners can’t. Besides that speculators can also withhold supply, artificially inflating prices. 2008 occurred due to speculation, independent of NIMBY regulation. As for crypto, housing can actually be more profitable than crypto since investors see rentier income not just speculative appreciation. Ultimately, this isn't just a supply-and-demand problem in an idealized market. It's a resource allocation issue where investors with significant capital can hoard housing, driving up costs, while many people struggle with homelessness. Simply greasing the market with deregulation won't solve this fundamental imbalance.
    - tptacek 1y ago
      I'm sure they can do lots of things homeowners can't, but they can't defy gravity. Again: I'm looking for an explanation for how investors could come out ahead amassing houses they keep vacant in the face of increasing supply.
      - grafmax 1y ago

mordae 1y ago

Huh. So, like, maybe if rents were not spiking and people were not bleeding money to predatory landlords, maybe, hear me out, maybe they would instead pay someone to build them a house.

klipt 1y ago
> pay someone to build them a house On what land? With what planning permits?
NewJazz 1y ago
Sorry but this is a fundamental misunderstanding of supply and demand.
bpt3 1y ago
2021 called, it would like its performative talking points back. Build more housing, and "predatory" landlords will have more competition. The endless restrictions on residential construction are the root cause, not your envy of wealthy individuals. Side point: There are many people who are in no position to own a home or have one built for them. Where do they live if there aren't any landlords?
- breakyerself 1y ago
  Public housing, housing cooperatives.

jayd16 1y ago

Percentage owned by investors doesn't really imply inventory vs demand, does it?

breakyerself 1y ago
Investors tend to invest where the ROI is good. Which tends to be where demand is outstripping supply, but I don't think investor percentages would track that perfectly. I'd expect there to be confounding variables.

gosub100 1y ago

A problem, not the problem. Regulations block new supply. If this cannot be overcome, why not add another regulation that private equity cannot own houses? There's no reason they should not be subject to CAs extensive regulations too.

tptacek 1y ago
Private equity owns virtually none of the homes in the municipality I live in, just outside the city of Chicago, adjacent to redlined neighborhoods with abysmal schools full of families who would love a chance at the resources we have. Despite insanely high property taxes that depress housing values, our home prices set new records every year. Homeowners here would just love to spend a year workshopping regulations to prevent investors from buying homes. They know that those regulations would do nothing at all to address the scarcity that drives their home prices, and wouldn't result in them having to adapt to large numbers of new neighbors. It's the exact same reason they obsess over inclusionary zoning ordinances (IZOs). Affordability is so important! That's why we need new, toothier regulations to ensure that no new housing projects here can ever pencil out for the developers. PE is a complete sideshow. The root cause of the housing crisis is exclusionary zoning.

akmiller 1y ago

That's because it's not. That's a cop-out. Wealth inequality is the crux of the issue.

bpt3 1y ago
Then why is almost every metric of housing affordability highly correlated to housing availability? Or maybe I am misunderstanding what "issue" you're referring to?
- akmiller 1y ago
  I'm not an economist but if you listen to Gary Stevenson talk about this very issue he discusses it in depth. But, when it comes down to it if EVERYTHING is getting more expensive that looking at on variable in one market can't be the crux of the issue. When you have large transfers of wealth and the wealth gap grows significantly the only thing for rich people to do is buy up assets. Assets are fixed, so the share of assets owned by rich people are drastically increasing. This is inline with the # of houses owned by private investors and #'s of assets owned by other investors will reveal the same thing.
  - bpt3 1y ago
    > But, when it comes down to it if EVERYTHING is getting more expensive that looking at on variable in one market can't be the crux of the issue. Everything isn't getting more expensive. For example, housing prices and rents have gone down in areas where restrictions on new residential construction have been reduced. > When you have large transfers of wealth and the wealth gap grows significantly the only thing for rich people to do is buy up assets. That's not the only thing for rich people to do, but it is something people who make smart financial decisions do. > Assets are fixed, so the share of assets owned by rich people are drastically increasing. They aren't fixed in any asset class, so there's no real reason to explore your point here. > This is inline with the # of houses owned by private investors and #'s of assets owned by other investors will reveal the same thing. CA actually has a lower than average percentage of homes owned by investors, and I haven't seen any evidence it's increasing by a meaningful amount.

twiceaday 1y ago

This is naive. The problem is that there are enough people with enough power who want house prices to keep going up. The solution must involve making them upset that they cannot get their way. Anything that doesn't have this shape is a stalling tactic in their favor.

tamimio 1y ago

Not entirely, the major factor is banks' credit creation. When any person can go and take a loan that was created from nothing (literal digits created by your bank), and sometimes based on another "speculated value" of a house you own, you will flood the market with an exponential rise of demand that will ALWAYS be higher than the supply. To solve the housing issue you have to follow the root cause, and always follow the money: first, halt credit creation, disincentivize it (ban interest), no speculation values. Second, make housing a depreciated asset, like cars, etc. Without these two, housing markets will never be solved. The thing is, the government knows that, but it's in its interest to keep the prices up, because that will mean more paid taxes! Which is why they fought WFH and created this hybrid model, to keep people around urban areas and keep prices up. I think Canada even admitted it later -I remember I read it somewhere. It's a multi-dimensional issue and the only losing party here is the average middle class person.

kyleee 1y ago
Instead of all those unrealistic things we should just build enough houses