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Free markets for housing are likely to settle into an "optimum" where some percentage of people cannot afford housing at all, because while construction/rental

Free markets for housing are likely to settle into an "optimum" where some percentage of people cannot afford housing at all, because while construction/rental of housing for them would net a return, it's not worth the opportunity cost. Plus you should not wait for the market to respond to a lack of housing: people will be homeless in the meantime. Supply/demand is mostly reactive, because building for anticipated future demand years down the line is very risky, so most investors don't like that. Markets don't optimize for "everyone gets some", yet that's precisely what you need for housing. You'll always need the government to come in at some point to provide for those left behind by the free market.

dan-robertson 7mo ago
Isn’t the initial response to a lack of housing that people consume less housing than they would like, rather than homelessness, eg families with children sharing rooms more than they might like, adults living with roommates, or just people having to live further away from where they would like to be (or moving out of a city altogether)? I don’t dispute that there are levels of affordability that are bad enough that they start to lead to various forms of homelessness, but it doesn’t seem to me like a fundamental rule that, if some people can’t afford to live alone in a large amount of housing, they also can’t afford to live with roommates sharing a smaller amount of housing, and that the right level of housing prices should also price some people out of those arrangements (ie it demands a pretty high level of inequality if you assume that the market allows typical people to afford to live alone and that sharing can typically reduce per-person rents by half or more)
- polothesecond 7mo ago
  It’s all fun and games games until you’re municipality starts banning adult co-living situations. You underestimate how intrusive these people will be to protect the value of the single largest asset most of them will ever own
  - chmod775 7mo ago
    Individual landlords also dislike those and may not allow it, because the ability of the household to make rent now depends on all adults in that household. 3-4 broke adults who may only loosely know each other and with their own individual plans are a lot less stable than, for example, married couples. It's basically 3x the risk and hassle. Chances are you'd have to evict them after just a couple months. They'd rather just leave the apartment empty and hope to find a better tenant.
  - rootusrootus 7mo ago
    > municipality starts banning adult co-living situations Is that not typically happening only for more egregious situations? E.g. the ban is on more than 3 or 4 unrelated adults living together. There are plausible reasons why that should be regulated, it is not clearly a conspiracy by homeowners to prop up the value of their own homes.
BobbyJo 7mo ago
> Free markets for housing are likely to settle into an "optimum" where some percentage of people cannot afford housing at all, because while construction/rental of housing for them would net a return, it's not worth the opportunity cost You provide no basis for the idea that the returns on housing have to drop below the point at which its financially viable to build before housing becomes affordable. You just say "because" then restate your premise. > Markets don't optimize for "everyone gets some", yet that's precisely what you need for housing. Just because markets don't optimize for it, doesn't mean it doesn't achieve it. > You'll always need the government to come in at some point to provide for those left behind by the free market. Disagree.
- chmod775 7mo ago
  "Not worth the opportunity cost" is not the same as "not financially viable". It means that there are lower risk/higher return investment opportunities than creating that housing. More simply stated "Why would I want to turn my $100 into $110 +/- 20% if I could turn them into $130 +/- 20% instead?"
  - BobbyJo 7mo ago
    "I lost a foot" is not the same as "diabetes caused me to need my left leg amputated below the knee", but if you're talking about whether or not you can make it to the store a few blocks away without assistance the distinction isn't really important.
    - chmod775 7mo ago
      Absolute gibberish.
graeme 7mo ago
The thing about arguments like this is they're usually used in service of blocking housing. As in we shouldn't do what Austin did because it won't fully solve the problem. We should instead stick with the status quo, which gets much worse than Austin.
marcusverus 7mo ago
The trick is to acknowledge the market as the main mechanism at play, and have the sense to work around the margins. When the tinkerers get too enthusiastic, they tend to do more harm than good.
Hammershaft 7mo ago
Is that necessarily true or just incidentally true in certain metros given the regulatory restrictions we have now? Our food is supplied via markets and yet with just subsidies almost nobody starves across western countries.

dan-robertson 7mo ago

Isn’t the initial response to a lack of housing that people consume less housing than they would like, rather than homelessness, eg families with children sharing rooms more than they might like, adults living with roommates, or just people having to live further away from where they would like to be (or moving out of a city altogether)? I don’t dispute that there are levels of affordability that are bad enough that they start to lead to various forms of homelessness, but it doesn’t seem to me like a fundamental rule that, if some people can’t afford to live alone in a large amount of housing, they also can’t afford to live with roommates sharing a smaller amount of housing, and that the right level of housing prices should also price some people out of those arrangements (ie it demands a pretty high level of inequality if you assume that the market allows typical people to afford to live alone and that sharing can typically reduce per-person rents by half or more)

polothesecond 7mo ago
It’s all fun and games games until you’re municipality starts banning adult co-living situations. You underestimate how intrusive these people will be to protect the value of the single largest asset most of them will ever own
- chmod775 7mo ago
  Individual landlords also dislike those and may not allow it, because the ability of the household to make rent now depends on all adults in that household. 3-4 broke adults who may only loosely know each other and with their own individual plans are a lot less stable than, for example, married couples. It's basically 3x the risk and hassle. Chances are you'd have to evict them after just a couple months. They'd rather just leave the apartment empty and hope to find a better tenant.
- rootusrootus 7mo ago
  > municipality starts banning adult co-living situations Is that not typically happening only for more egregious situations? E.g. the ban is on more than 3 or 4 unrelated adults living together. There are plausible reasons why that should be regulated, it is not clearly a conspiracy by homeowners to prop up the value of their own homes.

BobbyJo 7mo ago

> Free markets for housing are likely to settle into an "optimum" where some percentage of people cannot afford housing at all, because while construction/rental of housing for them would net a return, it's not worth the opportunity cost You provide no basis for the idea that the returns on housing have to drop below the point at which its financially viable to build before housing becomes affordable. You just say "because" then restate your premise. > Markets don't optimize for "everyone gets some", yet that's precisely what you need for housing. Just because markets don't optimize for it, doesn't mean it doesn't achieve it. > You'll always need the government to come in at some point to provide for those left behind by the free market. Disagree.

chmod775 7mo ago
"Not worth the opportunity cost" is not the same as "not financially viable". It means that there are lower risk/higher return investment opportunities than creating that housing. More simply stated "Why would I want to turn my $100 into $110 +/- 20% if I could turn them into $130 +/- 20% instead?"
- BobbyJo 7mo ago
  "I lost a foot" is not the same as "diabetes caused me to need my left leg amputated below the knee", but if you're talking about whether or not you can make it to the store a few blocks away without assistance the distinction isn't really important.
  - chmod775 7mo ago
    Absolute gibberish.

graeme 7mo ago

The thing about arguments like this is they're usually used in service of blocking housing. As in we shouldn't do what Austin did because it won't fully solve the problem. We should instead stick with the status quo, which gets much worse than Austin.

marcusverus 7mo ago

The trick is to acknowledge the market as the main mechanism at play, and have the sense to work around the margins. When the tinkerers get too enthusiastic, they tend to do more harm than good.

Hammershaft 7mo ago

Is that necessarily true or just incidentally true in certain metros given the regulatory restrictions we have now? Our food is supplied via markets and yet with just subsidies almost nobody starves across western countries.