3 ms·

it doesn't matter if prices are falling or rising, it only matters how the ROI of building compares to other investment opportunities we can also make it cheap

it doesn't matter if prices are falling or rising, it only matters how the ROI of building compares to other investment opportunities we can also make it cheaper to build. easing taxes on imported materials, bringing in more skilled labor, expediting permits, and even direct subsidies like tax breaks

estearum 7mo ago
> it doesn't matter if prices are falling or rising, it only matters how the ROI of building compares to other investment opportunities Correct, which it basically doesn't in Austin, which is why construction is decelerating. > we can also make it cheaper to build Yep, this is the only structural solution. The "just add supply" runs into the problem of price equilibriums. The reality is the input costs of building housing basically guarantees that housing is hard-to-attain for any local market. We need to address the cost of inputs. Temporary reductions in price are temporary and the market will self-correct back to restrict supply (as we're seeing in Austin) until prices go back up to being hard-to-attain.
- pfdietz 7mo ago
  The problem is it can't drive prices below what the free market would dictate? Talk about praising with faint damns.
  - estearum 7mo ago
    No, the problem is that the free market in advanced economies appears to dictate a price point for housing that is unattainable for broad swaths of society. Classic case of Baumol's disease, which is not solved by "well duh we just gotta build more." People will not "just build" enough to solve the problem because they won't "just build" beyond equilibrium (for long).
    - pfdietz 7mo ago
      No, the problem is the government has artificially restricted housing supply and this has driven up prices. It's not a market failure, it's a government failure.
      - myrmidon 7mo ago
        I think it's not helpful to talk of "government failure" as long as democratic principles are upheld. You could call it "voter failure" instead. But I'd argue that many of those voters are just acting in their own best interest, because they already own a home and more construction/housing supply does not help them at all. Some part you might be able to blame on the system, because I'm pretty confident that owners of at least one home are politically overrepresented literally everywhere (just look at home ownership percentages of politicians compared to citizens). I personally think a lot of this is just the natural consequence of an aging population, where young-people-concerns are basically "underrepresented" by design.
        pfdietz 7mo ago
        Of course it's helpful, unless one has the ridiculous idea that democracies can't make mistakes. Yes, voters are acting in their own interests, or at least what they perceive to be their interests at the time. This can lead to bad outcomes. It's why we have things like the Bill of Rights, which restricts what even a majority can impose. The idea that voters are always right would also seem to eliminate the possibility of arguing for change. Voters are responsible for current policy therefore it must be right, so how could change be good?
        myrmidon 7mo ago
        > The idea that voters are always right would also seem to eliminate the possibility of arguing for change. Voters are responsible for current policy therefore it must be right, so how could change be good? I'd argue the exact opposite. If voters are wrong, and cause bad outcomes, why would you blame "the government", when it's clearly voters being stupid? And I'm not arguing for "no change"-- the fix is to vote better next time. I think it is only fair to directly blame "the government" in a democracy if it either acts against its voters, or is otherwise incompetent, hypocritical or corrupt. I'd argue that the largest "problems" government causes with housing are institutionalized NIMBYism and more generally policies to prop up housing values. This happens (mostly) because (many) voters want it. To fix this, we need more votes from people that suffer most (i.e. young voters, which notoriously don't) and more awareness/priority/empathy from all voters (ideally even the ones not directly affected). I strongly dislike blanket blaming "the government" for issues like this, because I feel it kinda disenfranchises people. I'd argue that any policy problem that wouldn't be solved via re-election is never really a "government problem", it's a "people problem" (voters being stupid) or an "incentives" problem ("vote cost" being compensated indirectly by political donations, media attention or similar).

estearum 7mo ago

> it doesn't matter if prices are falling or rising, it only matters how the ROI of building compares to other investment opportunities Correct, which it basically doesn't in Austin, which is why construction is decelerating. > we can also make it cheaper to build Yep, this is the only structural solution. The "just add supply" runs into the problem of price equilibriums. The reality is the input costs of building housing basically guarantees that housing is hard-to-attain for any local market. We need to address the cost of inputs. Temporary reductions in price are temporary and the market will self-correct back to restrict supply (as we're seeing in Austin) until prices go back up to being hard-to-attain.

pfdietz 7mo ago
The problem is it can't drive prices below what the free market would dictate? Talk about praising with faint damns.
- estearum 7mo ago
  No, the problem is that the free market in advanced economies appears to dictate a price point for housing that is unattainable for broad swaths of society. Classic case of Baumol's disease, which is not solved by "well duh we just gotta build more." People will not "just build" enough to solve the problem because they won't "just build" beyond equilibrium (for long).
  - pfdietz 7mo ago
    No, the problem is the government has artificially restricted housing supply and this has driven up prices. It's not a market failure, it's a government failure.
    - myrmidon 7mo ago
      I think it's not helpful to talk of "government failure" as long as democratic principles are upheld. You could call it "voter failure" instead. But I'd argue that many of those voters are just acting in their own best interest, because they already own a home and more construction/housing supply does not help them at all. Some part you might be able to blame on the system, because I'm pretty confident that owners of at least one home are politically overrepresented literally everywhere (just look at home ownership percentages of politicians compared to citizens). I personally think a lot of this is just the natural consequence of an aging population, where young-people-concerns are basically "underrepresented" by design.
      - pfdietz 7mo ago
        Of course it's helpful, unless one has the ridiculous idea that democracies can't make mistakes. Yes, voters are acting in their own interests, or at least what they perceive to be their interests at the time. This can lead to bad outcomes. It's why we have things like the Bill of Rights, which restricts what even a majority can impose. The idea that voters are always right would also seem to eliminate the possibility of arguing for change. Voters are responsible for current policy therefore it must be right, so how could change be good?
        myrmidon 7mo ago
        > The idea that voters are always right would also seem to eliminate the possibility of arguing for change. Voters are responsible for current policy therefore it must be right, so how could change be good? I'd argue the exact opposite. If voters are wrong, and cause bad outcomes, why would you blame "the government", when it's clearly voters being stupid? And I'm not arguing for "no change"-- the fix is to vote better next time. I think it is only fair to directly blame "the government" in a democracy if it either acts against its voters, or is otherwise incompetent, hypocritical or corrupt. I'd argue that the largest "problems" government causes with housing are institutionalized NIMBYism and more generally policies to prop up housing values. This happens (mostly) because (many) voters want it. To fix this, we need more votes from people that suffer most (i.e. young voters, which notoriously don't) and more awareness/priority/empathy from all voters (ideally even the ones not directly affected). I strongly dislike blanket blaming "the government" for issues like this, because I feel it kinda disenfranchises people. I'd argue that any policy problem that wouldn't be solved via re-election is never really a "government problem", it's a "people problem" (voters being stupid) or an "incentives" problem ("vote cost" being compensated indirectly by political donations, media attention or similar).