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New York's rent stabilization isn't that bad, but it also doesn't have a major effect on rents, either for those who have it or those who don't. (Rent-stabilize

New York's rent stabilization isn't that bad, but it also doesn't have a major effect on rents, either for those who have it or those who don't. (Rent-stabilized apartments can go up by a few percent per year.) It's the 1947-era legacy rent control that is patently ridiculous. Most people underestimate the harm of that program because they don't understand price elasticity. It's true that only ~1-2% of apartments are under that system. However, 1-2% supply destruction can actually double prices. (See: oil shocks.) Another problem is that this country is run by scumbags and pussies who allow foreigners to own real estate (many countries don't). Now, I'm all for a reasonably open immigration policy, and letting foreigners live here is not the issue. (The people who move here to live here don't have a major effect on the rent, and are good for the country overall.) But the types of foreigners who buy U.S. real estate are usually corrupt officials who want a place to live if their own country brings them to trial. (In China, corruption is a death-penalty offense.) This is the real reason why Silicon Valley is so expensive: every fucking Communist Party scumbag in China and murdering Russian oligarch and Arab slave state billionaire has bought a place (even if it goes uninhabited) in California. It doesn't affect a large number of houses, strictly speaking, but it's enough of a margin to have massive impacts on the price level. I am amazed at Americans' willingness to be "patriotic" about stupid things and get into nonsensical wars... but then we go and let corrupt, murdering dictators and billionaires from all over the world buy California and Manhattan real estate. It's fucking disgusting.

refurb 12y ago
Do you have any evidence to back-up the claim that foreigners are driving up the cost of property? I can't find the source now, but from the data I've seen, foreign purchases amount to less than 10%. What really drives up housing pricing in the bay area is speculation where contractors purchases homes for cash and flip them. The other thing to think about is, do you really think "communists from china" are buying 1-bedroom apartments in the Mission? No, they are buying the multi-million dollar homes in Russian Hill. For the average American those homes were never within budget.
- FeeTinesAMady 12y ago
  Vancouver is a good case study in how foreigners can drive up property prices.
  - refurb 12y ago
    Vancouver is a great example, but the evidence doesn't seem to back it up. http://www.theglobeandmail.com/news/british-columbia/scant-evidence-behind-myth-of-vancouver-real-estates-foreign-buyers/article9000860/ http://www.theglobeandmail.com/news/british-columbia/scant-e... I think you could argue that foreign money is driving up home prices in Vancouver, but it's certainly not the main factor raising home prices.
    - waps 12y ago
      The simple fact that cities don't scale beyond a certain point is driving up prices.
      - michaelochurch 12y ago
        Cities scale just fine. They become more efficient as you build up. That goes until you're at about 50 stories, which is more average height than most US cities by far (New York has a lot of prime real estate at 3-5 stories, such as in the Village). The problem is people. People usually fight against "ugly" new development and "Manhattanization" and change of all kinds, and while they make arguments based on urban beauty, they're really just trying to protect their obscene premiums on real estate by blocking new supply. I actually think urban home ownership makes no sense for most people. Ownership is about a sense of control. If you live in the woods and sit on an acre of land or two, you can be pretty sure that no one's going to block your morning sun, or set up a nightclub next door. Cities can't afford to grant those assurances. It's just better, from that standpoint, for most people to rent. Why make your primary investment something that another person with more power and more money can easily fuck up, just by buying space near it?

refurb 12y ago

Do you have any evidence to back-up the claim that foreigners are driving up the cost of property? I can't find the source now, but from the data I've seen, foreign purchases amount to less than 10%. What really drives up housing pricing in the bay area is speculation where contractors purchases homes for cash and flip them. The other thing to think about is, do you really think "communists from china" are buying 1-bedroom apartments in the Mission? No, they are buying the multi-million dollar homes in Russian Hill. For the average American those homes were never within budget.

FeeTinesAMady 12y ago
Vancouver is a good case study in how foreigners can drive up property prices.
- refurb 12y ago
  Vancouver is a great example, but the evidence doesn't seem to back it up. http://www.theglobeandmail.com/news/british-columbia/scant-evidence-behind-myth-of-vancouver-real-estates-foreign-buyers/article9000860/ http://www.theglobeandmail.com/news/british-columbia/scant-e... I think you could argue that foreign money is driving up home prices in Vancouver, but it's certainly not the main factor raising home prices.
  - waps 12y ago
    The simple fact that cities don't scale beyond a certain point is driving up prices.
    - michaelochurch 12y ago
      Cities scale just fine. They become more efficient as you build up. That goes until you're at about 50 stories, which is more average height than most US cities by far (New York has a lot of prime real estate at 3-5 stories, such as in the Village). The problem is people. People usually fight against "ugly" new development and "Manhattanization" and change of all kinds, and while they make arguments based on urban beauty, they're really just trying to protect their obscene premiums on real estate by blocking new supply. I actually think urban home ownership makes no sense for most people. Ownership is about a sense of control. If you live in the woods and sit on an acre of land or two, you can be pretty sure that no one's going to block your morning sun, or set up a nightclub next door. Cities can't afford to grant those assurances. It's just better, from that standpoint, for most people to rent. Why make your primary investment something that another person with more power and more money can easily fuck up, just by buying space near it?