by jhonovich on 10/21/22, 10:21 PM with 474 comments
by findthewords on 10/22/22, 9:01 AM
Affordable housing is uninvestable housing. Until advocates admit this, the walking in circles will continue.
i) Price controls do not work at reducing prices, there are two millennia worth of proof for this.[1]
ii) Higher interest rates lower housing prices by lowering the availability of loans. This is a good thing unless you are already bought into the ponzi of ever declining rates.
iii) Affordable housing is uninvestable housing. A house is a deprecative asset, the same way cars are. A house does not produce anything. You live in it and it wears down.
by CraigRo on 10/22/22, 2:48 AM
Basically, you cannot raise rents aside from annual increases that are below inflation, and you are limited to a relatively small amount of renovations, and cannot increase the rents much if you do.
So you either commit to a potentially multi lifetime below market tenancy that will bankrupt you eventually, or you keep it vacant and hope to demolish it or combine units or pray that the law will change.
Or sell it to a guy who will run air bnbs until the city puts him out of business at which point it will go in the tax lien sale. In any event, nobody is investing in bringing these units back online in this legislative environment.
by qeternity on 10/22/22, 11:16 AM
People keep talking about evil investors and taxing secondary and investment properties. But the biggest group of housing investors are primary residence owners: we turned housing into a nest egg retirement plan, and now we can’t undo that.
Housing cannot be both affordable and a good investment. Housing should not be any different from any other good or service. This all stems from massive government intervention in housing markets decades ago on the basis of horrible conclusions of family wealth, and further intervention isn’t going to fix things.
You want cheaper housing? Slash regulations and NIMBYism, and get government out of the equation.
by the_gipsy on 10/22/22, 7:34 AM
by hedora on 10/22/22, 2:55 AM
> Any time a tenant vacated, landlords received a “vacancy bonus” that let them increase the rent of the unit by up to 20%, and once an apartment’s rent reached a certain dollar amount — most recently, $2,774 a month — the unit left the rent-regulation system entirely, allowing the landlord to rent it at any price.
$2774 / month is definitely less than I'd want to charge to deal with a tenant that cannot be evicted, but whose apartment must be maintained using labor priced for NYC. I'd guess most of the apartments that are being held off-market are way below that threshold, and also need substantial repairs.
by gbronner on 10/22/22, 12:35 AM
Or you leave it vacant and still lose money, but you don't have to work as hard doing it
by alzamos on 10/22/22, 11:33 AM
It seems that with rent control, you’d have higher demand and lower supply resulting in excess demand (both theoretically and it seems in practice). Does anyone know of any studies that:
- Analyse the effects of rent control in the presence of “vacancy-busting” measures like heavy vacancy tax/fines? (i.e forcing supply to stay high?)
- Analyse the price elasticity of the demand and supply respectively? (i.e is the excess demand mostly demand driven or supply driven?)
by lifeisstillgood on 10/22/22, 8:23 AM
- western house prices are driven (up) mostly by available mortgages and a vaguely poor future discounting ability by most people. In other words adding 10k to the offer just to get the win does not add much to your mortgage but gets you a house.
- increases in rates badly hurts people
- a free market in real estate is never really going to happen (because politics) but if it existed it would move the politics over to other parts of the economy- if people could not afford to live in the city, wages would need to be adjusted.
In short there is no place for a "free" market because the point of human civilisation is to protect (ourselves / our tribe / those we sympathise with) people from the cold winds of unfettered nature. Whatever part of the whack-a-mole politics is being focused on, the end goal is "decent lifestyle with minimised suffering / extremes".
Ie - insurance against the worst.
providing insurance against the worst for all society is either a question of paying the huge cost of tragedy for everyone as their tragedy hits, or it is a question of government laying their hands across all ye whack-a-moles and trying to prevent anyone from having the worst outcomes.
I think I am arriving at a theory of government that has the goals of totalitarianism but different methods - probably Thaler's Liberterian Paternalism.
Anyway - understanding the mechanisms of the housing market is important from mortgage availability, land availablity, road and infrastructure building and workers available all seem the big parts.
by legitster on 10/22/22, 12:24 AM
But it's kind of ironic to me that one of the known negative externalities of rent-stabilization is a loss of inventory. I'm not so sure how shocked I should be to see ... a loss of inventory.
by colinmhayes on 10/21/22, 11:30 PM
by kjsingh on 10/22/22, 3:05 AM
https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy...
by scotty79 on 10/22/22, 2:18 PM
by refurb on 10/22/22, 7:59 AM
We’ve come full circle.
by ETH_start on 10/22/22, 1:54 AM
by Ekaros on 10/22/22, 11:34 AM
by Wolfenstein98k on 10/21/22, 11:54 PM
Few things have been proven as resoundingly as "price controls don't work", or more accurately "are very net negative".
This gets forgotten every time someone really wants them to work.
This applies to rent control as much as any other price.
When you want the price of something to be lower, subsidising demand increases prices rather than lowering them.
Suppliers and owners will not simply accept lower prices, even if you really wish they did.
The Great Forgetting - price controls don't work.
by anigbrowl on 10/21/22, 10:35 PM
https://news.ycombinator.com/item?id=33224502 - discussing how Yieldstar, a consultancy, advises some landlords/property managers to hold or accept a higher vacancy rate while raising rents to increase overall profit.
by jefurii on 10/22/22, 4:55 PM
by charlesrocket on 10/22/22, 1:13 PM
by mrlonglong on 10/22/22, 9:30 PM