5 ms·

it's crazy that people nowadays seriously question basic market pressure being a thing

by muyuu 7mo ago

lesuorac 7mo ago
Eh, people really need to be questioning econ 101 more often. It's built upon untrue assumptions - infinite buyers / sellers - perfect information - no switching / transaction costs --- The article itself has 3 different year ranges provided so I'm not sure how you can use it as evidence. Plus overall the rent is still up by a lot since 93% - 4% is still at least 80%. - Rents increase by 93% from 2010 to 2019 - Housing increase from 2015 to 2024 (this overlaps with when rents increased ...) - Rents fell from 2021 to 2026 by 4%
- pembrook 7mo ago
  Ah yes, that 150 year old meme reflexively copy-pasta'd by internet commenters since the days of usenet to refute basic concepts like supply and demand. "Lol economists are dumb they think humans are robots!" No they don't. Sorry, we won't be throwing away an entire field of human endeavor based on a straw man caricature that isn't true. We don't call physicists dumb and throw out their ideas because the real world isn't a perfect vacuum either. They know this, don't be silly.
  - lesuorac 7mo ago
    We do throw out everything from physics 101. The movement of satellites is not modeled using distance = speed * time. It would do well to consider if econ 101 is an accurate way to model the world since for other domains the 101 course is not.
    - pembrook 7mo ago
      Yet the overwhelming factor in modeling the movement of those satellites is still distance = speed * time. The existence of nuance and external factors don't negate the original principle. The equivalent to arguments made by 'economics deniers' in this thread would be if you argued: the satellite moving at 7.8 km/s actually causes the earth to spin 8 km/s faster, so trying to make the satellite move faster makes it go slower! Applying acceleration doesn't help! No. Making the satellite move faster generally makes it move faster. Building more housing generally makes it cheaper. Let's not do the HN thing and get lost in pedantry.
      - lesuorac 7mo ago
        > The existence of nuance and external factors don't negate the original principle. Eh, ok throwing out all of physics 101 is a little strong. But you still don't use the original formulas you learned to do actual analysis. So using the basic models from econ 101 to do analysis can lead you to incorrect answers (but also correct ones; from a False premise you can imply both True and False; see "Material Implication" [1]). So sure on a forum like HN it can be appropriate to use basic econ 101 logic but when somebody is trying to be an expert or write an article for thousands+ people you should really question why they're only using 101 logic. > Let's not do the HN thing and get lost in pedantry. Lets actually do the not HN thing and read the article. There's too little rigor in the article to support the argument in the title. The articles _own numbers_ are that after building 120k housing units the rent went up 85% (4% decrease after 96% increase). Just looking causally at this the only data in the article supports more housing = more rent; the article is only casual observations so little reason to do anything else ... [1]: https://en.wikipedia.org/wiki/Boolean_algebra#Secondary_operations https://en.wikipedia.org/wiki/Boolean_algebra#Secondary_oper...
  - datsci_est_2015 7mo ago
    I mean “Econ 101” is an equally dumb meme. The laws of supply and demand have their limits, otherwise there would be nothing to study after Econ 101.
- Qwertious 7mo ago
  Housing is also really weird: - the main input (land) is also an output, so when the price of the output goes up, so does the value of the input. - economies of scale don't really work, due to the impracticality of transporting the good (houses) and fitting the good inside a machine (in house "factories", normal workers go inside the house and work on it by hand; not a lot changes compared to traditional construction) - more supply in one area increases the value (and therefore demand) in that area, so it's not actually clear-cut whether building more would reduce the price more than it increases it, at first glance.
- energy123 7mo ago
  First year economics doesn't ignore any of this. There's behavioral economics and microeconomics, for example.
  - AdamN 7mo ago
    That may be true recently but there was alot of effort required to unseat Homo economicus as the sole building block of economic theory.
varenc 7mo ago
I'm with you, but many people still question this. Here's a recent pre-print paper that was in the news arguing that inequality, not lack of supply, is the real source of housing affordability: https://osf.io/preprints/socarxiv/95trz_v1 https://osf.io/preprints/socarxiv/95trz_v1
- rcpt 7mo ago
  The black pill about that story isn't that a (crappy) preprint exists, it's that it got coverage in the press and was viral on social sites.
  - hunterpayne 7mo ago
    Telling people lies that they want to believe has always been profitable.
datsci_est_2015 7mo ago
Who are the people that “seriously question basic market pressure being a thing”? Am I missing something?
- ivewonyoung 7mo ago
  There was an article on HN front page a few months ago which stated(paraphrased) "building more housing to reduce prices is a right wing ideology that doesn't match reality" or some such. I'll reply here if I find it.
  - datsci_est_2015 7mo ago
    hn.algolia.com is a great search interface. I searched “housing” and top posts in the past year and didn’t see anything related to your quote on the first two pages. Maybe I need to search deeper.
    - ivewonyoung 7mo ago
      What I paraphrased wasn't in the article headline but inside the text, almost in passing. The best I could find was a couple of comments from two years ago which have a similar theme. https://news.ycombinator.com/item?id=39206707 https://news.ycombinator.com/item?id=39206707
- terminalshort 7mo ago
  Just look through the comments on any post about housing or immigration and you will see hordes of them.
  - datsci_est_2015 7mo ago
    Are the comments in the thread with us right now? At best, from what I’ve seen, this is a strawman against the people that argue that building housing is not the only thing that should be done regarding housing. I’ve seen no comments that claim we shouldn’t build housing to alleviate the housing crisis. Most comments that I see are about how from a policy perspective it’s more complicated. There’s no single “build more homes” magic wand that works for every market. And in some markets there are real people with real issues who could be helped by temporary policies that make landlording less profitable on the margins while people figure out how to best “build more homes” for that market.
terminalshort 7mo ago
Housing and immigration are two areas where people just can't accept basic economics. You can see some olympic level mental gymnastics routines all over this comments section.
callamdelaney 7mo ago
They are often happily blinded by ideology. Try to tell someone in Britain that wages have been seriously suppressed due to mass immigration and most of them will look at you like you’re stupid.
- wat10000 7mo ago
  Immigration is not so obvious. Each immigrant contributes to both supply and demand.
  - callamdelaney 7mo ago
    Yes, supply of workers and demand for houses. So not only is mass immigration cutting wages, it's increasing the cost of living. British people are being squeezed between stationary salaries, rampant inflation, insane taxes and huge cost of living increases.
    - wat10000 7mo ago
      Also supply of houses and demand for workers.
kevstev 7mo ago
I think the issue is that we have under built so much for so long, that it often feels futile to build more. NYC can feel like this, because due to zoning and general difficulties in building, all that seems to happen is a new building goes up and drives up rents. But if we built 20x more of those and sated demand, we would. On a micro level though, it can appear that "new building makes rents go up." And this pattern repeats across the US. Add in the fact that people want to freeze the area they moved to in time (like suburbs refusing to increase density, even urban yet car reliant neighborhoods panicking if a single parking space is removed: https://hudsoncountyview.com/outraged-jersey-city-residents-denounce-south-side-bike-lane-at-gilmores-meeting/ https://hudsoncountyview.com/outraged-jersey-city-residents-...) and we get constant blockers to housing supply growth we so desparately need. Its been frustrating watching the half baked measures to make housing "more affordable" by making mortgages cheaper when really they need to stimulate the supply side. It seems like an easy political win IMHO as long as you can sell it up front- stimulate GDP by juicing house building, and everyone gets cheaper housing. Just keep it under control lest you end up in a China type situation.

it's crazy that people nowadays seriously question basic market pressure being a thing

by muyuu 7mo ago

it's crazy that people nowadays seriously question basic market pressure being a thing

Eh, people really need to be questioning econ 101 more often. It's built upon untrue assumptions - infinite buyers / sellers - perfect information - no switching / transaction costs --- The article itself has 3 different year ranges provided so I'm not sure how you can use it as evidence. Plus overall the rent is still up by a lot since 93% - 4% is still at least 80%. - Rents increase by 93% from 2010 to 2019 - Housing increase from 2015 to 2024 (this overlaps with when rents increased ...) - Rents fell from 2021 to 2026 by 4%

pembrook 7mo ago
Ah yes, that 150 year old meme reflexively copy-pasta'd by internet commenters since the days of usenet to refute basic concepts like supply and demand. "Lol economists are dumb they think humans are robots!" No they don't. Sorry, we won't be throwing away an entire field of human endeavor based on a straw man caricature that isn't true. We don't call physicists dumb and throw out their ideas because the real world isn't a perfect vacuum either. They know this, don't be silly.
- lesuorac 7mo ago
  We do throw out everything from physics 101. The movement of satellites is not modeled using distance = speed * time. It would do well to consider if econ 101 is an accurate way to model the world since for other domains the 101 course is not.
  - pembrook 7mo ago
    Yet the overwhelming factor in modeling the movement of those satellites is still distance = speed * time. The existence of nuance and external factors don't negate the original principle. The equivalent to arguments made by 'economics deniers' in this thread would be if you argued: the satellite moving at 7.8 km/s actually causes the earth to spin 8 km/s faster, so trying to make the satellite move faster makes it go slower! Applying acceleration doesn't help! No. Making the satellite move faster generally makes it move faster. Building more housing generally makes it cheaper. Let's not do the HN thing and get lost in pedantry.
    - lesuorac 7mo ago
      > The existence of nuance and external factors don't negate the original principle. Eh, ok throwing out all of physics 101 is a little strong. But you still don't use the original formulas you learned to do actual analysis. So using the basic models from econ 101 to do analysis can lead you to incorrect answers (but also correct ones; from a False premise you can imply both True and False; see "Material Implication" [1]). So sure on a forum like HN it can be appropriate to use basic econ 101 logic but when somebody is trying to be an expert or write an article for thousands+ people you should really question why they're only using 101 logic. > Let's not do the HN thing and get lost in pedantry. Lets actually do the not HN thing and read the article. There's too little rigor in the article to support the argument in the title. The articles _own numbers_ are that after building 120k housing units the rent went up 85% (4% decrease after 96% increase). Just looking causally at this the only data in the article supports more housing = more rent; the article is only casual observations so little reason to do anything else ... [1]: https://en.wikipedia.org/wiki/Boolean_algebra#Secondary_operations https://en.wikipedia.org/wiki/Boolean_algebra#Secondary_oper...
- datsci_est_2015 7mo ago
  I mean “Econ 101” is an equally dumb meme. The laws of supply and demand have their limits, otherwise there would be nothing to study after Econ 101.
Qwertious 7mo ago
Housing is also really weird: - the main input (land) is also an output, so when the price of the output goes up, so does the value of the input. - economies of scale don't really work, due to the impracticality of transporting the good (houses) and fitting the good inside a machine (in house "factories", normal workers go inside the house and work on it by hand; not a lot changes compared to traditional construction) - more supply in one area increases the value (and therefore demand) in that area, so it's not actually clear-cut whether building more would reduce the price more than it increases it, at first glance.
energy123 7mo ago
First year economics doesn't ignore any of this. There's behavioral economics and microeconomics, for example.
- AdamN 7mo ago
  That may be true recently but there was alot of effort required to unseat Homo economicus as the sole building block of economic theory.

varenc 7mo ago

I'm with you, but many people still question this. Here's a recent pre-print paper that was in the news arguing that inequality, not lack of supply, is the real source of housing affordability: https://osf.io/preprints/socarxiv/95trz_v1 https://osf.io/preprints/socarxiv/95trz_v1

rcpt 7mo ago
The black pill about that story isn't that a (crappy) preprint exists, it's that it got coverage in the press and was viral on social sites.
- hunterpayne 7mo ago
  Telling people lies that they want to believe has always been profitable.

datsci_est_2015 7mo ago

Who are the people that “seriously question basic market pressure being a thing”? Am I missing something?

ivewonyoung 7mo ago
There was an article on HN front page a few months ago which stated(paraphrased) "building more housing to reduce prices is a right wing ideology that doesn't match reality" or some such. I'll reply here if I find it.
- datsci_est_2015 7mo ago
  hn.algolia.com is a great search interface. I searched “housing” and top posts in the past year and didn’t see anything related to your quote on the first two pages. Maybe I need to search deeper.
  - ivewonyoung 7mo ago
    What I paraphrased wasn't in the article headline but inside the text, almost in passing. The best I could find was a couple of comments from two years ago which have a similar theme. https://news.ycombinator.com/item?id=39206707 https://news.ycombinator.com/item?id=39206707
terminalshort 7mo ago
Just look through the comments on any post about housing or immigration and you will see hordes of them.
- datsci_est_2015 7mo ago
  Are the comments in the thread with us right now? At best, from what I’ve seen, this is a strawman against the people that argue that building housing is not the only thing that should be done regarding housing. I’ve seen no comments that claim we shouldn’t build housing to alleviate the housing crisis. Most comments that I see are about how from a policy perspective it’s more complicated. There’s no single “build more homes” magic wand that works for every market. And in some markets there are real people with real issues who could be helped by temporary policies that make landlording less profitable on the margins while people figure out how to best “build more homes” for that market.

terminalshort 7mo ago

Housing and immigration are two areas where people just can't accept basic economics. You can see some olympic level mental gymnastics routines all over this comments section.

callamdelaney 7mo ago

They are often happily blinded by ideology. Try to tell someone in Britain that wages have been seriously suppressed due to mass immigration and most of them will look at you like you’re stupid.

wat10000 7mo ago
Immigration is not so obvious. Each immigrant contributes to both supply and demand.
- callamdelaney 7mo ago
  Yes, supply of workers and demand for houses. So not only is mass immigration cutting wages, it's increasing the cost of living. British people are being squeezed between stationary salaries, rampant inflation, insane taxes and huge cost of living increases.
  - wat10000 7mo ago
    Also supply of houses and demand for workers.

kevstev 7mo ago

I think the issue is that we have under built so much for so long, that it often feels futile to build more. NYC can feel like this, because due to zoning and general difficulties in building, all that seems to happen is a new building goes up and drives up rents. But if we built 20x more of those and sated demand, we would. On a micro level though, it can appear that "new building makes rents go up." And this pattern repeats across the US. Add in the fact that people want to freeze the area they moved to in time (like suburbs refusing to increase density, even urban yet car reliant neighborhoods panicking if a single parking space is removed: https://hudsoncountyview.com/outraged-jersey-city-residents-denounce-south-side-bike-lane-at-gilmores-meeting/ https://hudsoncountyview.com/outraged-jersey-city-residents-...) and we get constant blockers to housing supply growth we so desparately need. Its been frustrating watching the half baked measures to make housing "more affordable" by making mortgages cheaper when really they need to stimulate the supply side. It seems like an easy political win IMHO as long as you can sell it up front- stimulate GDP by juicing house building, and everyone gets cheaper housing. Just keep it under control lest you end up in a China type situation.