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Ask HN: Anyone else feels the commoditization of real estate is unethical?
488 points by newbie578 on Aug 13, 2022 | hide | past | favorite | 731 comments
I am reading more and more about startups which are focusing on investments in real estate [1].

Doesn't anyone feel uneasy about it, that more and more people are looking at real estate as a financial tool, not a basic human right to have a roof over one's head?

Aren't startups like this just adding oil to the fire which is the real estate market?

I do not understand how will someone expect for future generations to achieve their own personal freedom and living inside their own four walls.

[1] - https://techcrunch.com/2022/05/17/backed-by-forerunner-and-bezos-back-arrived-a-startup-that-lets-you-buy-into-single-family-rentals-for-as-little-as-100/




I definitely do. It's something that turns a basic necessity into a speculative asset, with a price distorted by the money poured into it. Airbnb is also a deeply harmful influence on housing prices.

Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it.

It's easy to get retail investors to buy things at inflated, speculative prices, so the price of water would go up. People would say, "Why are so many people dying due to lack of access to water?" And we would blame these startups, laws would be passed, and we would fix it.

Unfortunately the necessity of housing is not as direct and clear, and we have a long history of denying housing to people who are unlucky, sick, or the children of such people.


> Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it.

We're watching this happen before our eyes.


In most of the UK (England and Wales), water was privitised in 1989

General consensus even amongst the right-wing media and the media that aims to appeal to conservative voters [1-4] seems to be is that we have drought and hosepipe bans while the private companies pay out £1b dividends and it's not right.

[1] https://www.thetimes.co.uk/article/54e5542a-1a6b-11ed-b1f4-6...

[2] https://www.guardian-series.co.uk/news/20604864.privatisatio...

[3] https://www.thetimes.co.uk/article/37ddb10c-157e-11ed-a669-5...

[4] https://www.telegraph.co.uk/environment/2022/08/09/water-fir...


Showing my age, but back in 1976, where I lived, water was being brought in by tanker day and night during the hottest summer on record.

I'm not saying privatisation has been a glowing success but supply issues were much worse in the days of nationalisation, especially when you factor in the population growth over the past few decades.


There is the huge confounder that everywhere in the developed world - and even in the less developed world like East Germany, where I grew up, a lot of infrastructure was added and improved over the decades after WWII and it has nothing whatsoever to do with private vs. government (or, in the case of Germany mostly, for water and energy) municipal ownership. Many houses had coal stoves and privies a few decades ago, that is simply how it was, not a question of "we need to privatize water and heating".

Here in Germany especially water is usually operated and owned by local municipally owned enterprises, and I'd say it's a huge success. Even my home district in East Germany (GDR) build a huge water infrastructure project with a dam, many kilometers of large pipes, and one or more (don't know exactly how many) water processing plants, definitely nothing privately owned there. People including those in power just put a very high value on having enough and reliable supply of water in Germany, and it has nothing to do with private vs. government, given what we have now with mostly local and state governments providing. In recent years a lot more private companies entered the picture, but I'm not sure about ownership (municipalities also operate their own companies), in the end it's an attitude question more so than blaming it of "private better". You can have success or failure with either model.


There are still houses in the US being built right now that have zero water and all must be delivered by tanker.

No wells to be dug, no neighbors to beg from, and now that the Colorado River is dangerously low they are stopping the delivery trucks.

This means people will have to move eventually, and good luck selling your 1.5 million dollar home with no water access.

Lol, California has 'severe drought conserve water' as all the businesses keep watering their 100% unnecessary grass, Nestle bottles it up and sells it back to us, we have almonds being grown to make fucking almond milk, and we have strained power grids warning of high power consumption while every fucking business leaves their signage and parking lots lit up like fucking Christmas.

But it's we the people taking showers and running the AC that is the problem.

None of this makes any sense!


There have been precisely zero new reservoirs brought into service in England over the last 30 years while the population has as you say grown considerably. There has been relatively little infrastructure maintenance, leading to high-levels of leakage, and over-extraction from once healthy rivers. I'd agree that things weren't perfect in 1976 but privatization has failed to noticeably improve things either while totally failing to prepare for the changes required by a growing population and worsening climate.


Water leakage is not a problem. The water goes back into the aquifer, where it should be anyway. It's a minor waste of energy and treatment chemicals, since it's drinkable water, but the water itself is not lost.


Nestlé is at the forefront of taking over a water supply and selling it back to the locals to enrich the corporation at the expense of the humans who live there


If you don't like that, the logical thing is to support water commiditization so that nestle doesn't get it for free.


Water commodification is exactly what Nestlé is doing

What we need is regulation to stop them from doing that, not a different company selling and capturing the water. That's just more of the same thing which solves nothing.


Nestle gets all the water they want for a $200 permit. That's not water commodification. They sell bottled water, but that's also not commodification of water. Almost 0% of US water consumption comes from a plastic bottle, and you can't commodify a market with ~0% market share.


Your statement is false, what Nestlé does is literally the definition of commodification

Commodification definition:

the act or fact of turning something into an item that can be bought and sold: The commodification of water means that access is available only to those who can pay.

>https://www.dictionary.com/browse/commodification

Nobody mentioned the US. Nestlé does this in various other countries.

>https://www.theguardian.com/global/2018/oct/04/ontario-six-n...


Nestle sells portable bottles. That's what differentiates their product from the tap.


They sell bottles filled with water, not everyone has access to tap water and Nestlé captures so much of a water source that locals don't have access to the freely available water that they did before.

Are you not aware that fresh water from wells depletes sources? The water table is limited.

You seem to be intentionally twisting the scenario in a disingenuous manner. Nestlé is selling water that was once free to a populace.


If they didn't have access to freely available water, it cannot be true that Nestle is selling water that was once free to the populace. Your assertions are contradictory.


>they didn't have access to freely available water

Please quote my comment where I stated this.

I don't believe you have attempted to comprehend my statements, nor have you read the article I posted and are just making baseless assertions to be contradictory.


You won't have to imagine for long.


>I definitely do. It's something that turns a basic necessity into a speculative asset, with a price distorted by the money poured into it

The 30 year mortgage is one of the greatest inventions in the history of mankind. Being able to swing hundreds of thousands of dollars of margin on a near-zero-down investment that requires nothing more than proof of income and has a manageable monthly payment is the single most powerful financial tool available to the vast majority of people.

That kind of leverage is only possible with the commodification and securitization of real estate. It’s not a perfect system, but it has led to intergenerational family wealth accumulation among the common population more than anything else before.


I disagree somewhat. I think the 30 year mortgage has pushed prices up much higher than they would have been, because of the leverage, and people only look at the monthly repayment. The fact that it has led to intergenerational wealth (among the rich who can afford houses) is a direct side effect of the fact that houses are so expensive. It seems like saying it has generated wealth is begging the question.


Canada has shorter mortgage terms that require multiple mortgages to pay off a house at different times, transferring interest rate risk to the buyer. Canada also has higher house prices than the US. Mortgage term length may contribute to price growth to some extent, but I think the supply of and demand for housing swamp any effects of financing.

Being able to lock in a low interest rate for thirty years, the probable lifetime of the amortization period, is very advantageous. Combine this with a lack of a prepayment penalty and American mortgage holders get a great deal.


>people only look at the monthly repayment

That's somewhat understandable given that the alternative is pretty much writing a monthly rent check. In that respect, it's a bit different to my mind than an auto loan. (Maybe if you compare it to a lease.)

If you didn't have 30 year fixed mortgages in the US, property values might indeed drop somewhat. But it would mostly advantage people who had access to other capital. People who can't afford houses in expensive areas now mostly still wouldn't be able to.


> Airbnb is also a deeply harmful influence on housing prices.

It's simply unimaginable what it's done in cities across Europe too. I lived in a few places like Barcelona, Dublin and Berlin, and it's pretty much destroyed any rental opportunities for young people and artists. I'm all for regulation, including taxing them to make longer term rentals more profitable for owners.


> It's something that turns a basic necessity into a speculative asset

I see some broad parallels in this line of rhetoric to "Zeus brings misfortune because people are impious vs good fortune when they are worthy". It presumes a difference and a drive that is not there. All assets are both speculative and non-speculative at all times. There are no assets that cannot be bought speculatively and a house is always going to be an asset because it represents a big investment of capital.

If people are speculating on real estate, all that says is that the policy of an area is going to make housing rare vs the number of people who need housing. If people thought housing was going to be abundant they would not speculate.

There are problems in the housing market, but they are not to be found by worrying about people acting speculatively. People are responding to the real problem, whatever it is.


> There are problems in the housing market, but they are not to be found by worrying about people acting speculatively. People are responding to the real problem, whatever it is

We should do both. Build more housing and crack down on speculators.


Shooting the messenger has a bad record for making things better. Speculators don't drive markets, they just signal how the situation will develop as early as it is possible for predictions to be made.

Cracking down on speculators won't help people get roofs over their heads. Nor will calling them unethical. Speculators are the signal for whether there is going to be a housing problem in a few years time.

We should want a system that allows speculators and encourages them if there is going to be a housing problem so there is plenty of warning. Targeting speculators in particular is the old once-a-metric-becomes-the-target-it-becomes-a-bad-metric problem in a new guise.


This works for most goods that people have to constantly buy new, but does not work in the housing market. The people that decide the zoning are the residents of the city. The residents of the city don't need to buy, so they don't care about the speculation price effect. In actuality, through price increases of the speculation, they are better off! So they vote for SFH zoning[0]. The warning is ignored.

If you introduce a land value tax equal to the value of the unimproved land, this will kill speculation, but also make it instantly impactful to the citizens that there is not enough supply. This will mean that the people able to change the zoning of the city will instantly see a reason to change the zoning, as better zoning means more supply means lower taxes.

We don't need no speculation.

[0]: https://news.ycombinator.com/item?id=32350657


In my opinion you're overlooking that a speculator could "engineer" a situation faster than say a local council is able to act / realize what is happening.

For example, a speculator moves into a nice small village, sees potential and brings in a lot of foreign capital in a short amount of time. Buying up houses and outbidding potential new citizens. The price of land is also driven up from this, even if it's only a short term thing.

The damage has been done there and it had little to do with the number of houses. It was just a hostile takeover of a community.


This assumes that the speculators are correct. That is not a good assumption to make.


If the speculators are wrong the price goes down and people tend not to complain about them. People only start bringing up speculators when they are correct.


That's why bitcoin is such a good investment: the speculators are right about the price going up.

/s


They were right. The speculators from 2010-2020 were right that cryptocurrencies are going to be a reality from now on. Like it or not, it is clear that there is a market here that is measured in billions of dollars and it is going to stay with us.


Speculation is making crypto impossible to use as currency.

When the speculators run out of bigger fools the bubble will pop.

Crypto can at least just be purely speculative without really hurting anybody but it's not good for housing.


no, you should crack down on government making housing rare, which is who is at fault in pretty much all of North America. Zoning is mismatched to the task of housing the people who want to live in many areas and local governments need to drastically increase the higher density zoned areas and that is pretty much the extent of the problem and the solution.


> We should do both. Build more housing and crack down on speculators.

No, just building more housing will make housing less useful to speculative investment, and so speculators won't invest. Just reverse the messing with normal supply and demand. Don't apply ever more patches on top of patches to fix a situation that wouldn't exist without the messing in the first place.

Sadly, it is very hard for politicians to a) want to decentralise control, because it's much easier to declare a new controlling initiative than to say "actually, we're just getting in your way" and b) get to decentalise control, because it's much harder to argue strong economic principles than appeal to special interest groups who might vote for someone else.


> We should do both. Build more housing and crack down on speculators.

By this reasoning nobody could own multi-family properties because that would be considered speculation.

Because the only difference is this involves single family homes which are going to be rented out, an act that I’ve never heard called speculation. Of all the predatory tactics Silicon Valley gets up to (hello Uber) this isn’t one of them IMHO.

I’m not sure where people think the houses that get rented out come from but I can guarantee that it isn’t people who are running a charity to provide housing to needy families. They invest capital in real estate with the sole intention of seeking a return on said investment.


I have long supported the privatization and commiditization of water. It should be sold on the basis of supply and demand with markets, futures, and so forth.

Don't like almond farms, bottled water companies pumping millions of gallons for the price of a $200 permit, and golf courses watering their courses during a drought? Then you should too.


One thing you can absolutely guarantee when it comes to a necessity of life commodity, a black swan event will occur and people will die because they are priced out of the market.

Imagine, if you will, when the Texas grid went all wonky and those people who choose to buy power at open market rates had to prepay for their $13,000 kw/hr electricity because the power company had a limit on how much credit they will give you. Now imagine a drought where there is a disruption in the water supply because a pump burned out due to record setting high temperatures.

I’m no cheerleader for big government but if people insist on having one there are valid activities that they should engage in to protect the citizens from getting bitch slapped by the invisible hand of the market. This being one of them considering how capital intensive it is to provide a reliable water supply.


Black swan events can cause shortages no matter if it's a state controlled supply situation or decentralized market.


What if water were public for individual consumers but private for corporations?


Why?


Apparently so those water hoarding companies have to pay the full rate, instead of some subsidized rate. I.e. stop privatizing profits with socializing the costs


So that water supply becomes a workable business model, increasing supply, and so that uneconomic water usage is discouraged. Such as almond farming in Southern California during the summer


> Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it.

Lol we did that in England!


> It's something that turns a basic necessity into a speculative asset

The solution to that is the same as the housing problem - build more housing.

And it's fine if the new housing is "luxury" housing - then yesterday's luxury housing becomes today's not-so-luxurious, etc.


In theory. What we see in practice (here in SF) is a glut of vacant luxury homes next to people living in RVs and tents. Belvedere Island (where Captain Kirk will one day live) is mostly empty. The fancy homes there are almost all investments, few people actually live there.


So build more housing.

Keep doing it until the problem goes away. It will eventually.


And what are we doing about CORPORATIONS buying up our neighborhoods?

As far as I know, NOTHING.


"our" neighborhood implies that you own it - so if you owned something, and sold it, how can you complain that someone (or gasp, a corporation) is buying when you're selling?


No; it implies that WE own it.

I can complain because corporations enjoy purchasing advantages not available to individuals. Massive amounts of capital, for one thing, not to mention tax breaks and economies of scale that make it easy for them to dispense with financing and inspection contingencies.

When an elderly person dies and the children who inherit his property all live out of state, they're going to dump the property and split the proceeds. And they're going to maximize those proceeds and minimize the time to realize them. Corporations can take advantage of that.

So no, WE did not decide to sell. Think it through.


> they're going to dump the property and split the proceeds.

so you do agree that it is the individual that made the decision to sell, and that it isn't because the corporation is forcing them to sell.

Therefore, the character changes or selling is really just a sum of the aggregate behaviour of all of those individuals. It's like blaming the flood, when each individual rain drop is the reason for the flood in the first place.


You can float strawmen and invalid analogies all day, if that's how you get your jollies.


One needs a place to live.


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Textbook NIMBYism. Just because you bought a place does not entitle you to having the surrounding vicinity stay in stasis until you leave.


This is why nations as a whole are being done away with by the market controllers who have the capital.


You live here but you don’t own your neighbors homes and you have no right to tell them what they can do with them. Who cares what “reason” you bought your home for, that is literally no one else’s problem but yours. You’re no different from the HOA tyrants who scream at their neighbors for painting their house the wrong color.


> Imagine if we did the same thing with, say, water

Hm, maybe we can do the same thing with Air. We can even keep the same name, Airbnb, but this time people are paying for the best air.


I have recently paid literally for that. In the mountain village where I was spending my holidays they charged me tax because of the air I was breathing. They called it 'climate tax' but the better translation is 'environmental tax'. And fun fact, unfortunately the air was not that clean neither because the place is very popular..


It's a natural first impulse, but it's wrong. What is the correct impulse is to be concerned about how lopsided most cities zoning is towards single family, as that is what is driving the market power that makes real estate profitable as a financial asset. If most of a city was zoned to allow up to multi residential highrises rather than most of a city being zoned for single family it would cut the appreciation ability of the scarce and valuable land zoned for higher density already and would allow more people to live closer to where they want to live (i.e. close to work/wherever they daily commute).

The market isn't failing to function because someone realized they could buy up current stock and make a large profit over time, people noticed they could make a large profit over time because city governments zoned everything wrong for the actual demand.


> because city governments zoned everything wrong for the actual demand

This is the core problem. Commoditization, or rather, people cornering the market is secondary.

City government is doing this because it is elected by those who own single family units. This is self-stabilizing.

If the majority would live in multi residential highrises, there wouldn't be an incentive to artificially create scarcity. Instead, there would be an incentive to drop housing costs even further by increasing supply.

The problem is that nobody wants to invest in a city with a falling housing market. There needs to be some profit sharing between those who build the housing and those who own the real estate in the city center whose value increases when the city grows.


Some people invest in cities with falling house prices. They could be long-term speculators or more likely are landlords who expect the property to cash flow more than a property in an in-demand city. Generally the slower the asset price growth of a property the larger the margins on rent. You trade cash in the future upon sale for cash now from rent.

The thing that can really crater a housing market is a departure of jobs from an area.


Your last statement is not correct. People like to invest where they can make money and multi residential rent is profitable in most places and we have REITs and other financial instruments ready to grow and invest lots and lots into multi residential rentals to generate a decent cash flow to send back to investors. The problem for them now is that there is so little land zoned that way that these guys are often outbid by people building luxury apartment condos (because that's the most profitable up front thing to build and it is relatively low risk because of constrained land supply). In a land abundance situation it shifts profitability from scarce luxury apartments (because they no longer have to be scarce) to rental units, plus it allows buildings to age out into rental units rather than age out into being renovated or torn down to make higher value luxury apartment condos. All we need to do is force cities to zone land this way rather than allowing them to cave to nimby's trying to push up the value of their single family home.


Regarding my last statement: People like to invest into multi residentials now, but are those investments still profitable when the zoning changes?

How do you protect your investment when there is innovative pressure and housing units compete on price? Say you have a building and you try to monetize your investment over 20 years but after ten years, due to innovation, competing units can be built for half your costs. Then your tenants will move if you don't halve your rent which destroys your profits.

In a city with nimby's, that's never a problem because rent remains high, even if costs are reduced.

>All we need to do is force cities to zone land this way

This requires the vote of the nimby's which means that you need other options.


regarding your last point first: no, it doesn't require the vote of the nimbys. The state and/or province could force this very easily and that group of politicians is beholden to a group of people with more varied interests so are less under nimby pressure.

regarding your first point:The loss from rezoning will happen at the time of rezoning and will primarily affect the currently zoned high density land. With newly repriced lower, non scarce multi unit residential land it is unlikely to end up in a large downward risk situation because the sophisticated reits will be pricing what they will pay now for land off of what they think will happen over the next twenty years and will likely be pricing in a rent drop (which is what drives the drop in land prices for high density). You also aren't really at risk of technological disruption because the total turnover/increase in units is low relative to total housing stock even if we ented a building boom. If it suddenly costs half as much to build a high density residential building, it's still going to take decades for that to erode rental costs by half because you don't suddenly have enough supply of that cheaper to build stock to house everyone.


> If most of a city was zoned to allow up to multi residential highrises rather than most of a city being zoned for single family

The problem with this is the only entities with the financial power to build such buildings are large developers and corporate landlords. That leads to either high rents or high HOA fees. We need some way to pool prospective homeowners together to build this kind of high-density housing. Because otherwise we’re trading one problem for another and still failing to make home ownership affordable.


It still does mean more supply, so is beneficial for prices over a situation with less supply.

> We need some way to pool

That's e.g. a co-op, not exactly unusual concept to pay for housing construction at different scales.


But there's a causal connection between the commoditization of land (not real estate per se) and these zoning laws. You've given people a financial incentive to vote in politicians who then implement these restrictions. There'd be nothing wrong with such commiditization (and indeed it would be a good thing) if and only if that causal link can be broken via land taxation.


If people want to have families they should have to move out to the country side and build a family home. Apartments and single person residencies should be the only units allowed to be built in cities where young people have to work and try to build wealth.


Thats just wrong. Land should be zoned for much higher density but if someone wants to buy land and build a single family home that should be fine too. The problem isnt the single family home, the problem is so many cities have 70% or more of their residential zoned single family.


The zoning argument is such a myopic perspective on the problem. The issue with housing affordability is across many communities, most of which have no issues with shortages of buildable land nor even shortages of housing. The primary impact on prices is from the demand side due to cheap credit from artificially low interest rates and speculation by large investors and small time speculators moving into real estate.


Do you have an example city? I'm curious because when there is lots of supply to meet demand why would prices go up?


Virtually every city other than a few that are essentially islands or peninsulas that are fully built out like San Francisco and New York City. Some examples of cities with plenty of residential buildable land to expand into in the United States are Houston, Dallas, Austin, San Antonio, Tulsa, Atlanta, Charlotte, Orlando, Tampa (ex Saint Pete which is a peninsula), Jacksonville, Fort Meyers, San Diego, Los Angeles, Bakersfield, Sacramento, Las Vegas, Phoenix, Baltimore, Richmond, Greenville, Nashville, Knoxville, Chattanooga, and a myriad of other cities.

I already explained why prices go up when there is sufficient supply: hyper-fueled demand from essentially free money and new entrants like hedge funds looking for ways to invest the loads of cash they can borrow for nothing and money from their investors as well. In many cities, more than 30% of all home purchases were from investors.


Because real estate works somewhat similar to ponzi scheme because of low liquidity and lag in the transaction settlement. Everyone wants higher return one over the other on each sale and it ends up in speculation loop.

The price rises without new increase in the supply, because you would not lock-in to a particular house on just your first visit. So, each of these visits from each person constitutes each time to total demand. And demand gets a bit inflated. Speculative nature of real estate on top of that, encourages the sellers to hoard with higher prices (like a synthetic monopoly mindset).

Even if one buyer locks into a higher price, the effective market rate goes up because every seller in that area expects much higher price than that.

Price based on Supply and Demand only work properly in a Open Market with High Liquidity.


"I'm not doing any harm," you say. "I just want to keep what I own, that's all." You own! You are like someone who sits down in a theater and keeps everyone else away, saying that what is there for everyone's use is your own...If everyone took only what they needed and gave the rest to those in need, there would be no such thing as rich and poor. After all, didn't you come into life naked, and won't you return naked to the earth?

Ambrose, c. 350


It’s cute, but not a very practical philosophy though. Most valued resources are physically finite. Who decides how beachfront properties are allocated? Who decides who should clean the toilets?


We give the beachfront properties to the people who clean the toilets?


Maybe we should all take turns cleaning the toilets. Like jury duty.


The rich would find a way out of it.


If someone is willing to do it for money and I'm willing to pay them for it, why should I do it?


Money is a superpower, one of mankind's most potent inventions, and just like with anything of great power it is learning to restrain yourself, to recognize when it is and is not appropriate. Self-restraint in the use of great power is what makes the difference between good and evil.

With money, all actions take on a dimension of moral hazard. You pay for a thing, but you do not do the work, so you don't know how it is done and what effect the work has on the worker or on the world at large.

If the altruistic angle doesn't appeal, consider the selfish angle: money divorces you from the reality of an act, making you less able to do for yourself.

Like the Amish, I suggest that you carefully consider what you pay for and why, rather than just decide based on whether you can pay for it.


Your question presupposes that the arrangement where certain people have to do shit jobs to survive, and others don't, is desirable. It works out fine for you individually, but the more charitable and humane arrangement is to spread the shit jobs around so no one bears the full brunt.

https://en.wikipedia.org/wiki/Tragedy_of_the_commons


arguing against owning your home is arguing in favor of rent-seeking


Actually, in most of the world, owning your home (really the land underneath it that is zoned as residential) is a form of rent-seeking, which is why 'land value tax' taxes that economic rent (money earned without providing anything in return).

Unfortunately, people have somehow been convinced that house price inflation is good because their house has more and more value, like a wheelbarrow of inflated currency and that the only fix is for everyone to buy their own house/land, which only worsens the problem.


The parable is very explicitly contrasting taking what you need / taking one seat at the theatre / owning a home to live in, with taking everything and depriving others of the use of what should be common / taking all the seats at the theatre / hoarding homes to extract economic rent, respectively. I'm 99% sure you understood the point too.


"Taking one seat at the theater" is something any single family owner-occupier could learn from:

- Houses are way bigger than they need to be

- Their footprints are enlarged further by useless setbacks and lawns

- A single household monopolizes this footprint for the entire vertical dimension


I’m not sure there’s a practical or fair way to quantify what someone needs, how can that be measured? Or worse, enforced?


In general i think its not about enforcement, but incentives e.g. designing a tax system that penalises owning many homes.


but what if you have a valid plan in the work for the many homes? I think it is a huge violation of privacy for the government to need to vet you on the reasons for your private property


The implication of the ancient Roman theatre is that the person is trying to make a public space (theatre) private (their own use / enjoyment).

The implication being that the only rent seeker will be the state i assume


That is an argument against greedy hoarding, not home ownership.


>> "If everyone took only what they needed and gave the rest to those in need, there would be no such thing as rich and poor"

This theory is called communism and it is one of the deadliest ideas known to man.

That said, there's an element of truth to the statement. There would be no such thing as rich and poor, there would only be poor.


I think you read too much between the lines! To me it says that you should only get as much as you need, not more, not less, and leave the rest for the others..


Isn’t the “should” there what communism tries to enforce?


that’s an extremely anachronistic reading.


You're quoting an author from the 300's in a comment thread about today's housing market. That's an actual anachronism.


No, because governments' ability to procure it for the needy is a very separable problem. But let me play Devil's Advocate: agriculture, the foundation of the food supply, is one of the most commoditized markets that exist. Does this bother you too? Why not? If it's because food is generally a smaller part of income, highly responsive to market pressure to keep prices low in addition to some stabilizing subsidies from governments, why can't real estate work the same way?


> why can't real estate work the same way?

So I'll tackle this...

Food is highly responsive to market pressure because it is nearly entirely fungible. I'll throw this here for the sake of making sure we're on the same page when I say that

---

Fungible: able to replace or be replaced by another identical item; mutually interchangeable.

---

So food markets are sensitive to pressure because there is hardly ever anything special about the food any one entity produces. Someone charging too much for corn? Go buy identical corn, that fills exactly the same need from any one of the thousands of their competitors. "Organic" was, in large parts, an effort to make food that is less easily replaced, and is mostly marketing rather than quality or health related (seriously, go google some of the chemicals that we allow to be added to organic food).

In contrast to food - Real estate is very rarely fungible. A specific plot of land has characteristics that often make it very hard to replace. Whether that's proximity to people or locations or features themselves such as soil, water, grade (slope, slant), existing structures, mineral presence ,etc. Non of those are consistent between different plots of land (there's a reason "Location, Location, Location" is a saying).

So no - Personally, I don't believe that real estate will ever be able to be treated in a similar way as the food market. Desire for it is predicated too much on aspects other than mere "acres" of it that you can get.

Imagine if just finding the right steak to eat was enough to make you rich for life, or if that ear of corn was where your family has been buried for centuries, or if that lima bean reduced your commute from a 2 hour drive to a 5 minute walk. I think we'd see pretty insane food prices then as well.


> I think we'd see pretty insane food prices then as well.

All you are saying is "imagine if food supply was more constrained" with more words. Commodification and constrained supply are orthogonal concepts -- the argument here is that increased commodification may lead to increased supply, so long as the market is allowed to act freely.

> that ear of corn was where your family has been buried for centuries,

This argument of "what if your family lived there before" in housing discussions annoys me to no end. We don't live in a feudal society where the right to a particular village is passed down through bloodlines. The fact that your family lived somewhere in the past doesn't entitle you to anything; you're not a Hapsburg monarch.


> This argument of "what if your family lived there before" in housing discussions annoys me to no end.

It's NOT about right - it's about demand. It's not relevant at all if it annoys you, the issue is that people can and do form sentimental attachments to the places where they live, and those attachments influence their willingness to pay (or hinder their willingness to sell).

And no - I'm not saying "imagine if the food supply was more constrained". I'm very clearly saying that food is fungible (you know - the thing I actually said...).

The housing supply is both constrained and non-fungible. The food supply can be constrained or not, but it's fungible as all get out - For the purposes of not starving, a calorie is a calorie, and where it comes from is irrelevant in a broad sense.


> It's NOT about right - it's about demand.

Sure, that's fair. I'm really reacting to arguments about gentrification, where people do talk about "rights" to stay in a particular neighborhood that apparently get passed via genetic material.

> I'm very clearly saying that food is fungible

My point is that the reason "fungibility" is important is actually because it impacts supply: there aren't just 100k houses vs 100k households, there are actually 10k houses with some desirable property (close to where most people work, sufficiently large to raise children, whatever) vs 50k households willing to pay a premium for that desirable property. Your point about fungibility doesn't change the conversation about supply and demand, it's just a partial explanation of the mismatch.


So outside of the context of most of the previous discussion:

> I'm really reacting to arguments about gentrification, where people do talk about "rights" to stay in a particular neighborhood that apparently get passed via genetic material.

What is it that bothers you about this? Basically - my counter argument is: If a person has been living in an area for decades, and that area is now gentrifying, can't it be reasonably expected that person (or their family) were fundamentally a part of driving that gentrification?

It means that person was putting in their labor and money into that location for decades, and that labor and money was key for creating the conditions that are allowing for gentrification (even if the final catalyst was something else - like a company using the stable area for new expansion)

Simplifying - My counter argument is that forcing this person out is robbing them of the fruit of their labor: A nice neighborhood. They were there when it wasn't nice. They worked in making it nice. Now you kick them out because they were working with a lower income to do it (usually meaning they put in considerably more "sweat equity"). Seems pretty unfair to me.


Land has these properties, yes. We will never see mass affordable ownership of desirable land. Fortunately, that is almost irrelevant to housing issues. Legalize building vertically.


There are thousands of homes/apartments around where I live that are about equally attractive for me to live at. Most sold by different sellers. Housing is fungible.


It's fungible for you, since apparently few dimensions of housing are salient to you. In my experience, this is not the case for most people. Units on the same floor can differ vastly; buildings on the same block can differ vastly; the neighbors you have, the direction a unit faces, square footage, street noise are all examples of factors that matter to many people and which can vary dramatically on a geographic scale measured in feet. Many people don't consider housing fungible to the extent that produce is.


And I bet those apartments and homes carry roughly the same value/sqft...

The claim that housing is fungible is absolute non-sense, though.

If it were, we wouldn't see such drastic market variations, even within relatively close geographic markets (in some cases, literally blocks away)

We also wouldn't see such an intense pressure on evaluating real estate before purchasing (because if it was fungible - it's all the same, right?).

I basically don't know where to go in the conversation if you can't actually acknowledge the argument in front of you, and just say "No".


But that’s the problem. The housing market is becoming what the food production market would be without the pressure and government involvement.

Right now the supply of those two good and their general dynamics are totally different. Landlords can effectively extract maximum profit from a property without doing anything to improve it or remain competitive thanks to zoning restrictions and other things that make increasing supply difficult. Thanks to this set up, landlords effectively wind up capturing the capital gains that arise out of public improvements (like adding a new neighborhood park) as well since it makes the area more desirable without increasing supply.

In the most desirable areas you can literally do nothing as a landlord and raise rents almost perpetually.

Worse once these landlords raise rents it causes negative effects downstream. Producers of other goods that rent their land need to start charging more to pay the landlords.

The number of people that try to justify some kind of late pseudo-feudalist system like this is legitimately insane.


A land value tax would solve this - you want to use that acre of American Land, you pay the American People for the priviliege.


Ah sure. Old lady living in the house she bought 50 years ago will have to pay insanely high land tax because now it's red hot city location, what 50 years ago used to be suburbs.

Very clever idea.

Taxation was never a solution to any problem. It was a way to mask the problem in a very populist way. Taxation purpose was a redistribution from 'evil crooks' to poor, unlucky people.

The problem with Taxation always was that the middle class was paying this because the rich ones had plenty of solutions not to pay including with moving to an another country


> Very clever idea.

Yes. yes it is. She's made millions for doing nothing useful.

> the rich ones had plenty of solutions not to pay including with moving to an another country

How does a rich land owner avoid paying a land tax? Or a tax on the value of his copyrights (which would be land)

Yes the middle class get shafted on things like income and capital gains based taxes, that's the great thing about a land value tax, it taxes the immovable land, not the movable person.


No she doesn't make millions. It's not her fault that now her house is 10x more valuable ( on the paper ). As long as she doesn't sell, rent somebody else she has no income. No income, no tax.

Simple as fuck logic. She bought the property, not a license there for living up to her ends.

The thing you are here presenting is a tax of not realized potential income. It's diabolical insane idea.

If we can do it for real estate, why not for cars, and any idea property?

You basically want people buy a license for living in their flats.

About basically nor useful, she earned the money, paid multiple taxes for this and she bought this from the real property dealer / construction company which hired many people for this.

Isn't this tangible contribution for society?

All because people like you flocked to her location for work what used to be peaceful, quite suburbs


She's a millionaire. She bought it for $20k, it's now worth $2.5m. She's made $2.48m for doing nothing.

For someone else to live in that house they would have to make a fortune to pay it in rent. She could choose to move somewhere cheaper and have a massive income from either selling it or renting it out, but she doesn't, she's become rich because other people are making the area valuable.


>In the most desirable areas you can literally do nothing as a landlord and raise rents almost perpetually.

You can also do literally nothing even if you want to because of zoning. Remove all the market distortions and watch rental prices drop.

Call a contractor and see how much they charge for permitted work.


> agriculture, the foundation of the food supply, is one of the most commoditized markets that exist.

And one of the most regulated and subsidized markets...


The US housing market is regulated and subsidised…the American dream of owning a home is socialist…US mortgages are guaranteed by federal government.. this doesn’t happen in most other countries..


It's not about regulation, it's about replace-ability. Food prices stay low because corn is corn, regardless of who grew it - it fills the same need. In many cases, even food that's not a direct match is still a perfectly valid replacement (ex: I need to eat 2000 calories, but it doesn't matter all too much what food is providing them).

This is utterly untrue for real estate, which is about as non-fungible as you can get.


You raise an interesting point regarding fungibility…I wonder that with growing insitutional involvement, whether housing may move down the spectrum and may become more fungible… probably not by much tho


Yeah, I think that's an interesting point - if the goal is just to have a roof over your head close to where you work, institutional involvement may be able to help there (large apartment complexes and high rises are the old school methods of creating housing units that are mostly the same as each other).

I think the issue is that housing is intrinsically tied to real estate, and real estate (at large) likely won't become much more fungible. Land is just really complicated, and the uses for it aren't all that exchangeable.


>the American dream of owning a home is socialist…US mortgages are guaranteed by federal government..

"socialism" =/= government intervention.


The government created the programs that gave massive tax breaks to the boomers who bought homes.


Quite reductionist…

Having one element of a nation state being characterised as socialist doesn’t not equate to socialism… the world is not black and white..


It’s not really socialist at all. It’s in the governments best interest to have owners of properties. This leads to improvements making the capitalization of the country larger. It also develops more property tax capability.

A governments 2 main assets are its people and its land. Ensuring that people have ownership of the land ensures the people will continue to support the government as there’s mutual interest. So subsidizing loans via guarantees isn’t socializing so much as the government investing in itself and protecting its assets.


The response, above, lists pros but no rebuttal to why government-guaranteed mortgages are not socialist.

In a free, capitalist market, private providers would price and provide mortgages. This is not happening here..

For some Americans this may be difficult to digest since there may be cognitive dissonance…how can an American ideal be characterised as socialist.


Right but it isn’t due to charity. It’s in the governments best interests to do this. It is acting rational.

A socialist government would either ensure everyone qualifies or it wound instead build large dehumanizing concrete towers to stuff thousands of people in, block after block.


The subtext, from the statement above, is socialist government decision making is irrational while capitalist governments are rational.

Having traveled across many countries in Europe, I have seen governments with socialist traits make rational, sensible decisions. Again, while I agree that a capitalist government is probably more effective than most communist governments, the world is not black and white.


Because you can make more food but god ain't making any more land.


We have plenty of land.

When I moved to Manhattan, I was shocked to see how many apartment buildings that are only a couple floors tall and don't have elevators. I assumed every building in Midtown would be at least 50 floors and house thousands of people.

Counting the office space, which is completely unnecessary when people can work from home, even the densest neighborhood of America's most populated city has tons of room. I would bet that we can fit 20 times more people in Manhattan if we got rid of the height limitation laws and converted all the offices to apartments.

On the other hand, when we consider the average suburb there is a ridiculous surplus of land. We could fit the entire world population into Texas if we used it more efficiently.


There are many reasons why not every building in Manhattan is 50 storeys. The most obvious one is that each neighborhood's infrastructure imposes limits on the density of the block. Other considerations are public transit, water main, and school capacity. So the effective amount of "land" today, is closer to what exists today, relative to a block of residential 50-storey skyscrapers.


Infrastructure scales with development, q.e.f.


Cramming people together more tightly does not create more land.


But they flock to NYC. No one is "cramming" them there.


Not sure I follow your point. NYC is not affordable. Are you implying the New York real estate market is in a desirable state because people still want to live there despite exorbitant rents and never being able to buy a home?


Well, why can't real estate work the same way?


I'll try, because the incentives are totally different. Food will perish if hoarded and you need a constant supply of it. Housing and real estate is the opposite, it's in almost everyone's interest that land values and property go up over time, especially the people who currently own it which includes politicians and probably around 50% of people. There is also price competition in the food market, which property developer out there competes on value? They all compete on perceived quality, the square footage and where they can buy land.


The counter example to the OP's point about housing is agriculture? When we just had a story about how Bill Gates is now the US's largest land owner? When Farm AID was started to assist local farmers from corporate encroachment 40 years ago?! This whole thread points out how people who claim that the US has free markets are really deluding themselves. The FEDERAL government is heavily involved in EVERY non-trivial aspect of our PERSONAL lives, and they pick the winners and losers. It truly, truly sucks, but this trend of investment banks getting involved in buying up real estate, and driving up prices of home ownership is NOT going to go away. Owning a home will become so expensive that only corporations will be able to do so, and rent/lease it back to you. We truly are becoming a capitalistic country, and either you'll have "capital," or you won't. It's modern feudalism.


It should. The slow erosion of diversity of food production has put the nation at risk.

How much grain is watered with depleted groundwater? How much produce is dependent on the Colorado river?


> agriculture, the foundation of the food supply, is one of the most commoditized markets that exist. Does this bother you too?

Yes? Most people who have ever lived have always produced their own food. That most of us in the developed world have lost the ability to do so—and that access to the physical essence of our being is dependent on monetary transactions with faceless entities that value profit above human life—seems deeply alienating.


> agriculture, the foundation of the food supply, is one of the most commoditized markets that exist. Does this bother you too? Why not?

It does bother me


Markets and capitalism are a social hallucination.

Biology does not care about our philosophy; it allows emotional bonds between officials and elites that are leveraged against the masses.

Write on paper all the rules you want, collusion will happen.

Your defense of this system that’s also screwing you is bizarre; conviction to spoken traditions versus actual analysis. Very brain dead following orders of you. Very religious missionary of you. Human biology is easily convinced it’s spoken words of power are what rule the world.

I mean so it is; if you get burned by it, oh well. Remember; if this system takes your life from you, none of us have an obligation to you.


Yes, but I don't think this is just a recent trend.

In Hong Kong, we spent over half of our income for rent [1]. Median per capita floor area for accomodation of 15 square metres, with some people living in subdivided flats with per capita floor area of 5.3 square metres [2]. The average waiting time for public housing is 6.1 years [3], note that public housing are government provided housing available with lower rent for low-income households, which are much cheaper and larger than subdivided housing mentioned previously. The median house price is about 20 times the median family income [4].

Yes, we know that this is a problem. But the government officials don't have incentives to tackle this problem. In fact, about 1/5 of the government income comes from selling land [5], so they probably can't fix this problem and keep the same spending without increasing tax. Let alone many officials are related to this sector or hold many properties.

[1]: https://www.thestandard.com.hk/breaking-news/section/4/17694...

[2]: https://www.bycensus2016.gov.hk/en/Snapshot-09.html

[3]: https://www.scmp.com/news/hong-kong/society/article/3177511/...

[4]: https://www.chinadailyhk.com/article/119131

[5]: https://www.budget.gov.hk/2019/eng/io.html


But how would you tackle it without making the problem worse?


In Hong Kong, it's not a problem of over-densification. There's loads of unused land, but the government is incentivised to keep it empty and not zone it for high-density residential. When they do sell off a small parcel of land for new development, they auction it off leading to obscene land prices.

That's what OP means about there not being an incentive for the government to lower cost of living. The high cost of living is subsidising HK's notoriously low taxes.

There's a pretty good YouTube video about it: https://www.youtube.com/watch?v=hLrFyjGZ9NU

Oh and to answer the question, the solution is to zone lots more high-density residential, sell a lot of land for less money, and stop subversively taxing the poorest citizens via high CoL. Tax businesses and the wealthy to make up for it. But they're not going to do that, because low taxes on businesses and the wealthy is their USP.

Turns out when you optimise a city for business wellbeing at the expense of citizen wellbeing, then it impacts citizen wellbeing...


Fair points. Didn't know about the gov land sales. Honestly I presumed I was going to hear "rent controls!"


No, I don't know. I major in computer science, not economics or public policy. I just think that it is ludicrous that despite every chief executive said that they will tackle this problem, the price just keep rising and statistics keep worsening. They propose some absurd plans like massive 10+ year land reclamation plan [1] to build more houses, despite that there are actually quite a lot of unutilized land in the New Territories.

[1]: https://en.wikipedia.org/wiki/Lantau_Tomorrow_Vision


A high land value tax moves the problem around (instead of young people not being able to buy a house, older folk can't afford to keep the large one they spent their lives in).

In the process, it makes land completely unappealing to rent-seekers while incentivizing high-density development of desirable locations.


> older folk can't afford to keep the large one they spent their lives in

This is only a problem if you believe older folks should continue to live in big luxury houses for a pittance (read: gain the benefits of luxury without having the detriments of luxury), or the country does not have enough smaller housing for them to move.

In situations where housing is severely constrained at the cost of younger people, leaving old people in their large houses should be the last of your concerns. Doubly so for any social structures where older generations are extremely reliant on younger generations (almost every democratic, socialist or communist country).


I certainly feel that way, but the roughly-50% of voters who are either retired or close to retirement seem to disagree.


"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds"

— Thomas Paine, Agrarian Justice, 1797


This is of course why Smith argued for a tax on the undeveloped value of the land. Sadly not easy to work out, but much harder to avoid and much fairer in the sense that the undeveloped value of your land is that part which benefits most from the services provided by the state.


Not just the services provided by the state. The unimproved value of your land also depends on the value of the properties / land around your land. Which is even more of a reason to implement a land-value tax.


People consume state services. Not land.


And people who own more valuable land benefit proportionally more from state services.


Sure, and you can say the same for sports cars, stocks, cell phones, yachts, and basically anything that can be bought and sold.


You aren't permanently consuming a portion of the most important finite resource in a state (the land) by buying a cell phone or a sports car. You're certainly taking advantage of public resources and services on a global scale with those other purchases, which I also think is worth addressing. But in the case of land ownership the correlation is very local and easy to draw.


But it's not easy to draw the correlation between land usage and state resource usage. There is basically none because land doesn't use resources. People do.

Your argument confuses cause and effect. People that gain large benefits from the state do so because they are rich. And because they are rich they can afford expensive land.


The "land doesn't use resources" argument seems a bit out of nowhere, because we've been talking about people the whole time here - people's ownership of land. That's also why I mentioned valuable land and not large land. Land derives its value from proximity to other valuable things, and will be developed more densely the more desirable it is in that regard, putting proportional strain on public services and resources like utilities, roads, policing, etc. There's a clear cause and effect here in terms of land value and incentive to develop, and it's an advantageous route for taxation because it would be difficult to game.


And they pay more property tax.


Yeah, that's correct.

But property tax also taxes improvements that the owner made themselves. This disincentivises improving land too much.

The whole thing with Georgists and a land value tax is that it's specifically unearned wealth due to increases in unimproved land value that are taxed more.


The idea is the more and better improvements your property has the more you can afford to pay. I figure 50% of the reason they want a permit for any little thing is to ensure the tax assessor has a fresh view of the current state of improvements!


In the United States, we call that “property tax”.


Not really, property tax is based on the current value, which in theory includes all development.

"In theory" because in California there are strategies for doing renovations without triggering a reassessment.


Yes, really. The property tax is a privilege tax paid in exchange for exclusive use of the land. That it is calculated on a basis that includes improvements is a truly meaningless distinction.


So property taxes are even higher than land value taxes? Because they included land plus development.


Property taxes dissuade development, because the higher the value of that specific property the higher the tax.

Land value taxes encourage development because the tax is levied on the _unimproved_ value of the land, so you're incentivised to maximize the value of the improvements of the property.

At least that's the theory.


I think a lot of people, especially lifetime renters, don’t understand that. Between property tax and maintenance/improvements, land ownership is a burden in many ways.


There's no basic human right to have a roof over your head, for the simple reason that someone has to make the roof. Saying "I have a right to have it [without building it yourself]" is saying "I have a right to force someone to build it for me". I dunno about you, I'm uneasy about forced labor.

Even beyond that, there's certainly no right to have the roof over your head wherever you want - there is simply not enough space for everyone to have it. Commoditization of housing basically lets the scarcity be managed via market mechanism, the best we have - what creates the problems, like making scarcity worse, is /absence/ of commoditization - where someone decides that things should be a certain way, e.g. via zoning, design reviews, environmental rules, etc. If we could commoditize more in these areas (e.g. something like carbon tax for congestion/sewer use/... instead of a committee deciding; removing free public parking and letting the market resolve that and probably save space and reduce car use; etc.), there'd be more housing. If we commoditize less, scarcity would just be managed via different means - like corruption, connections, etc.


> I'm uneasy about forced labor.

I'm with you! But what I'm not okay with is gatekeeping of the resource that REALLY makes real estate valuable -- LAND. Nobody made the land.

I'm okay with paying for the labor and capital that goes into housing construction. I'm not okay with somebody extracting massive amounts of value out of the economy just because they own title to the land.

If you want to look at the stats for why real estate has become such a huge asset class, read this: http://gameofrent.com/content/is-land-a-big-deal


I agree with that, I am actually georgist. Of course, again, human right to land won't satisfy people calling for "housing as a human right". There's tons of cheap land everywhere, including close to cities, and in major cities. It's really "housing with amenities near where I like the weather, jobs and culture is a human right"


Okay but what's your solution? The reason land is valuable is because many people want it in specific areas. I genuinely don't have an answer to the question.


This characterization of rights seems somewhat melodramatic. A government is capable of providing its citizens with rights without forcing individuals at gunpoint to provide them. The way this happens is that the government creates an organization that is dedicated to the provision of these rights, and then individuals can voluntarily join it. The government can set the wage, or produce summery marketing material, or issue medals to encourage participation in civic practices.


Where does the government get the money? It still checks out to forced labor, once or N times removed. Not that I'm saying it's never acceptable - it's a trade-off, but we should call it as what it is, if used - a gift from others, a privilege. Not a human right. And, we should be strongly biased against it by default, not trivialize it.


> There's no basic human right to have a roof over your head, for the simple reason that someone has to make the roof.

I guess someone has to provide food and security too. Would you say that these also are not basic human rights?


"Right to security" thinking got us mass incarceration. Most progressive places are backing off of that one now. Perhaps 25 years ago.

Food is an excellent model for what I'd like to see around housing: extremely mature and sophisticated commodity market, government thumb on the scale of abundant and stable supply at low prices, subsidies for people whose incomes are genuinely below the cost of efficient production.

To the extent that food is a human right, it is incredibly important that we have GMOs, large-scale factory farms, global supply chain, etc. Food being a human right would make it all the worse to insist on only socially-optimal production: everything local, everything organic, everything vegan, community meetings to argue about who deserves to eat. But that's exactly what the "housing is a human right" crowd fights to preserve and entrench for housing.


While I agree (in the abstract) policies that make that roof unaffordably so that others might realize wealth without working seem a bit shortsighted.

A lot of people without roofs over their head is a recipe for social instability which affects everyone.


Maybe; it's different than saying it's a "human right" though.


Good point. A roof might not be a human right. But a piece of earth might be.


Yeah, I agree with that. I think the best answer to that is georgist; one could argue that an average piece of land is extremely cheap, so there's no problem, everyone can get one; but if people want a specific piece of land, and many people want the same ones, a distribution mechanism is needed.


Well when you say "human right" and a government insists that home ownership is something they will focus on as a human right in their program, to a finance person what you are really saying is "this asset has a free put option attached to it". And having a backstop like that is a very sought after feature for speculators. It isn't the only area where speculators take advantage of it( for example energy generation is another area with a built in backstop), but it is the biggest one.

What would be your proposed solution to this problem, as in how would you remake the real estate market in the US? And perhaps more importantly, how coherent is your solution with the US as it is today?


The poster above you (whittingtonaaon) proposed raising taxes on secondary, tertiary, etc. homes. That makes sense to me but "investors" looking for easy prey would surely hate on such solution. It's not like no one could have thought of this until now.

I do not say this with the US in mind.


How do you propose we would — systematically — provide housing to people who, for whatever reason, are not in a position to buy? Should housing be bifurcated into government-provided housing for renters and privately-owned housing for those fortunate enough to have the money and stability to buy? Would you like to live in government housing, or would you prefer to keep the investor-owned rental option, but have them pass a bunch of new taxes onto their customers? Or maybe, just maybe, realize that property rentals are a necessary service that is handled pretty well by the private markets and that landlords are no more or less deserving of earning a profit for the service they provide and risk they take on?


>How do you propose we would — systematically — provide housing to people who, for whatever reason, are not in a position to buy? Should housing be bifurcated into government-provided housing for renters and privately-owned housing for those fortunate enough to have the money and stability to buy?

So...council estates? Subsidized housing is a thing we have.

>realize that property rentals are a necessary service that is handled pretty well by the private markets and that landlords are no more or less deserving of earning a profit for the service they provide and risk they take on?

Landlords don't create added value. I'm skeptical that it is a necessary service; housing is necessary, but is renting housing necessary? Why would that be?


> Landlords don't create added value. I'm skeptical that it is a necessary service; housing is necessary, but is renting housing necessary? Why would that be?

There are many cases where this isn’t true. Many (most) residents in urban areas are transient. They stay for a couple of years, get married, then move to the suburbs or another city to start a family.

There are a bunch of other reasons why someone wouldn’t want to stay in a location for a long period of time.

Rentals absolutely make sense in this situation.


A house costs more than some people have. Without a rental market, those people become homeless or completely dependant on government. Neither is desirable.

Without the profit incentive, what developer would build a multi unit apartment building to achieve higher density living in cities?


I'd say a house costs more than almost anyone has; it's why people need to take out loans to purchase them. That said, without a rental market the price of houses goes way down. As a result, the people that cannot afford houses then are mostly the same people that cannot currently afford rent. This is because the mortgage payment and insurance for a home is actually lower than the monthly rent. If the top value were lower, it would be a safer risk for a bank but because it's so high, people don't have that access to credit.

A developer still has a profit incentive; mostly the same one they have now, actually. They sell the apartments.


So you have a city like Los Angeles or NYC. You convert all housing to single family homes. Can more people of fewer people live there now?


Why would you convert all housing to single family homes? Do people not own apartments for some reason?


>That said, without a rental market the price of houses goes way down.

I see that you are saying you would simply sell the apartments instead now. What is the solution for (e.g.) new grads who do not have a down payment yet? Why aren't tenants currently pooling their money, purchasing the properties they live at and converting it to a Tenancy in Common?

I do not think prices will drop without a rental market. Prices might even increase because you are making the market much less efficient. It will also make building new units more difficult as there will almost always be a holdout in the building.


>Landlords don't create added value. I'm skeptical that it is a necessary service

Subdividing your land and making it available to others is valuable. The world without that is all single family homes.


Landlords do not provide a service.

They take otherwise-purchasable properties off the market, then make money off preventing other people from owning them in perpetuity.

Some landlords also offer property management services, but that is a separate field entirely. It would be fairly easy for an apartment building to consist of entirely owner-occupied units, who could then join together in a co-op to either put individual local contractors on retainer for things like plumbing, electrical, and miscellaneous repair services, or find a one-stop-shop company to hire for it.


> How do you propose we would — systematically — provide housing to people who, for whatever reason, are not in a position to buy? Should housing be bifurcated into government-provided housing for renters and privately-owned housing for those fortunate enough to have the money and stability to buy?

Without speculators leeching off of them, 20 year old two bedroom units would cost less than they currently rent for each year.

Make property investors actually invest something by only allowing profit or rent on land that has been recently improved.


Why would landlords hate such a system. They can trivially pass on any tax to renters and have the incentives to figure out the loopholes in the tax code. It’s already common for single unit corporations to own rental properties.

Instead of taxing based on who owns the land, tax how it’s used. That way more units will be built increasing supply.

But then you’ll run into the real problem, not landlords, regular home owners who largely have a revealed preference to live on giant plots of land, in big houses far from multi unit dwellings. They’ll continue to use restrictive zoning to limit supply and keep prices up.


If it's taxed at least 100% of its land value +100% of its rental value they'll sell pretty quick.


Why not just pass a law saying only individuals can own property and they can only own one?


Because that means apartment buildings become illegal?

Homeownership is all well and good, but sometimes you really do just need a place to live for a year or two, and having to do a full-fledged real estate transaction at each end of that period is a lot of friction.


The tax the poster proposed was a de facto ban which was my point. But even then it wouldn’t work because some land is more desirable than others and by encumbering land ownership you encourage those that own the more desirable land to extract as much value as possible.

The thing we are dancing around in this thread is do landlords largely determine the housing prices. I think not. I think it’s supply constraints and government subsidized mortgages. These are largely issues driven by regular home owners not landlords.


How so? It's a fairly common model for each individual apartment to have their own owner, and a body corporate run by the owners manage common areas.


I like a system whereby individuals can own between one and a bit and three somewhere (including provision for commercial property where large facilities need to rent many people's fungible extra-property rights in some way). Mentioning 100% tax is just to head off idiotic straw men about passing the tax on to renters.

Also allowing benefiting from or even rent seeking on only the increased value of very recent property improvements (like taxing at the value it held 5 years ago with some buy-or-sell challenge type provision to prevent undervaluing).


Most money in real estate isn't made on selling people 2nd homes. Unless I misunderstood your comment and you think corporations and investors shouldn't be able to own more than a single home at once(so landlord abolishment)?


Raising taxes doesn't "abolish" anything, it may make it less lucrative, but that's a far cry from "abolishment"


Depends to what level they are raised, of course. Making something prohibitively expensive and then saying "hey look you can still technically do it, it's just not worth your time and you have to really execute everything perfectly" is not super different from just saying you can't do it.


Right, but unless somebody states that is the type of tax they are looking for, it is not appropriate to presume that is what they mean without further information. It seems pretty clear that a primary residence, one secondary home that is used for family vacations at least some of the time, one building/ piece of land that is actively used for a personally operated business, and all other real estate are each distinct categories that should receive different incentives and disincentives from the state - unless you are against governance, but that is another conversation altogether.

I personally think that primary residences should have a 100% homestead exemption, because I don't think you should have to rent your home from the State. And to make up that percentage of income, other real estate should be taxed a little higher. At the same time, there should be intelligent programs in place to make it easier to reach the point where you can own that first home. This last point would undoubtedly work best if there were either financial and/or statutory restrictions on ownership of residential real estate for investment purposes. So, in principle, it makes perfect sense as part of a larger goal of promoting home ownership. The conversation of how to best do this is of course more complex and there are many factors that need to be balanced - more than anything because high taxes raise rents, which would point towards regulation as an important part of the best way of dealing with this.


What possible justification is there for landlording? No-one can make new space and all owned land was stolen from the commons.


Implement a Land-Value Tax, as per Henry George's vision. All of the rent from land speculation will be returned to communities. Relatively easier to implement than other solutions (we already have assessors to determine the value of land + property) and should be an easy sell to most Americans, as most would see their tax burden drop dramatically.


> What would be your proposed solution to this problem, as in how would you remake the real estate market in the US?

Higher capital gains tax for investment properties to discourage speculation.

The rationale being that it’s perfectly fine to own investment real estate as long as it’s being occupied. Short term speculation incentivizes unrented property (look at any city in East Asia). Incentivizing longer holding periods makes it more likely that the property will be used to extract rents (that is, actually house people, which is what you want).


Very simple.

Any residence you don't live in as your only exempt residence for at least 2 years out of 5 is taxed at 100% pa. Any land with above median value is taxed at a progressive rate if you do live on it.

Any commercial building you don't work in for a similar period is taxed at 20%

You want to develop? Fine. Just have to make sure someone else owns or will own the land/strata before you start and charge them for the development.

You want to rent out a building? Fine. Put it on someone else's land and if they don't renew the lease you have to remove it or give up claim to it.


Most developers would not accept those terms. That's a proposal for predictable project losses. It's far less risk to own the project and land, seek institutional and similarly deep pocketed financing, then to suffer the fickle stinginess of a multitude of strata members. The developers who accept those terms will be looking to cut corners.


There are plenty of projects that are sold before they are started, and no reason the transaction would have to go the way you're claiming.

As long as at least one person is willing to assign their land claim to the project it could continue without that portion taxed, and acquiring or renting the claims would not have to be coupled to funding.

Modelling land as a fungible commodity that you're allowed to have as much as you want of is stupid and is just gifting a large portion of the productive output of society to those privileged enough to take on debt and those with the magic loan wand. There are plenty of other systems historically and currently that aren't as insane.


Pre-sales always include broad sweeping allowances for variances in final cost; for instance, folks who pre-bought condos two or three years ago are just starting to get sticker shock now that the final price has hit them, thanks to skyrocketing materials cost. The price they agreed to pay, with those variances they agreed to.

Without the assurance that someone else would shoulder the risk the builders would have walked away. Like they do in China, and where they have to demolish half finished towers because the builders dropped out and none will take it on.


IMHO the land belongs to all of us, like the air, and the water. ie '(wo)man is born free' rather than 'born to pay rent to a private owner until such time as they can buy a freehold and pass on the condition'.

That doesn't mean you can't have exclusive use of some part of it, how else would we encourage people to take care of the land and develop it. But you should continuously pay everyone else for it's exclusive use. Inherited, and corporate (basically immortal) land outright ownership is immoral IMHO.


Do you believe this expands globally or only within sociopolitical boundaries as they mutate?


A very good question. People should be able to choose where they live (that does require a more equal world though), but on the other hand, communities should have some say in who their members are and what their rules are. I do see current fixed national boundaries as problematic.


>but you should continuously pay everyone else for it's exclusive use.

So pay rent to the state instead of a private landholder?

I found your first paragraph very agreeable and convincing, but this feels like it's just passing the problem on up to the state. Would you just be suggesting that any ownership of land outside of a a single home or apartment be heavily rented/taxed to the government, or literally all use of space used exclusively (e.g. a private bedroom)?


> So pay rent to the state instead of a private landholder?

You pay rent to the people (via the state, which acts as a layer of indirection) who no longer get to use the piece of naturally occurring land that you're monopolizing.

Think of it like finite natural resources. Who really owns that? It's a gift of nature. Nobody made it. So if one person wants to dig those up and sell them, part of the proceeds should be shared with everyone. Because it's not even their property, so they have no moral right to privatize 100% of the gains in the first place.

Now if someone puts effort into transforming those resources into something more useful, then they should own the fruits of that labor. The distinction is labor (the fruits of which I should own) versus naturally occuring thing I had no role in making (which I should not own).


I think the logical consequence of the first paragraph is the second.

If the land belongs to everyone, but you want to occupy some part of it exclusively, you need to pay everyone else for the privilege. Not just one individual who happens to 'own' it through various historical doings. I'm not sure how you can 'pay eveyone else' except through some kind of 'state' mechanism.


Assuming OP is taking a Georgist perspective, the idea is that the land rent would be distributed equally among the community as a basic dividend.


Unethical? Should be disallowed period. I do strongly believe that once a propery is yours what you do with it is your concern and nobody else's. However, the business practice of purchasing properties to profit from selling it again in the future should not be allowed. So, what should happen is the government should not allow the transfer of ownership when the seller has a) multiple properties and b) is selling a propery for more than 3% (inflation adjusted) of the intial purchase value. I am all for living in a house and selling it at a ridiculous profit though so long as that is your only property.

With the exception of employee housing, any non-individual entity including agents of corporations should not be allowed to purchase even one residential property.

With the exception of diplomats, foreign citizens should not be allowed to purchase more than one property.

These laws should be applied in any developed country.

This is one of the reasons they wanted corporations to have rights as a person, because in regular reasoning a corporation owning houses, making speeches and donating to parties makes no sense as their activity and existence is entirely in the sphere of privileges not rights.


If companies can't own houses, and people can't own more than their primary residence, where should renters live?


People can own multiple residencies, they just can't sell them at more than 3-5% profit. Corporations can't own residencial buildings if they are single family units but for multi-family properties, so long as it is being offered as rent/lease/purchase that should of course be allowed. I was focusing more on single family units but you are right to highlight that.


That would seriously restrict supply because once people bought a house with the intention of renting it out they would never sell due to the price control. Just like an entailment, this property can never leave the family line.


Supply should come from new housing right? People selling their house to move to another house is a transfer of propery not generating supply.


Plenty of people rent single family units.


Yes, and that should be allowed so long as the landlord is an individual.


You've got this wrong because you're thinking about stable states, not state transitions.

1) "Multiple" here is wrong. What is the time when you own two houses? Well, when you're moving! You buy one, then you sell the other. During that time, you own two houses. That's multiple. Study the hermit crab.

2) Your three percent cap means that property renovation, repair, expansion, and so on is completely doomed. Why didn't you think of that?

This stuff is complex. It requires some careful, thoughtful approaches.


Like i said in other comments renovation and flipping can be done without owning as a service. It would be just like it is now with flippers paying the seller but not getting ownership at all.

You want to sell your house and it has 200k valuation? A flipper will give you 200k so you can buy another house, renovate without owning it and then at sell for say 250k and the benefit to the seller would be splitting the 50k with the renovator with whatever percentage they agree on. The key difference being the flipper now has an incentive to sell soon instead of wait years until the house costs say 500k because the original seller wants his cut soon so they can move on.

Flippers will not be doomed but flipping will be less profitable than it is now unless you do it at scale of course.

For your first point is it not obvious I meant at the time you place the house on market you if you owned multiple houses?


> This stuff is complex. It requires some careful, thoughtful approaches.

Is this comment allowed on the internet?


>I do strongly believe that once a propery is yours what you do with it is your concern and nobody else's

Not enough. That's how you get a voter base which pushes for plans which make properties more expensive, deprioritizes building and depending on other variables, causes population growth while telling the next generations to just deal with the smaller piece of the pie they have to share with a bigger population than before. That mentality effectively means you're dependent on home owners as a whole to care enough about others to prioritize their needs. Historically, this hasn't been true for almost a century in the majority of the developed world.

That's also why this problem is so difficult to tackle. We don't have a critical mass of individuals democratically yet, nor a critical mass willing to cause enough damage to make voters care. And the majority of politicians do not care enough about the long term consequences (or alternatively, realize caring about the long term consequences won't win them votes).


>b) is selling a propery for more than 3% (inflation adjusted) of the intial purchase value

This makes it more profitable to sit and collect rent than to sell. Property will never change hands. I hope the current owner knows how to build.


Except for new homes right? So what if property never changes hands so long as new housing can accomodate population growth? Also, people sell when they move so there is that


You are all for the things that can profit you i guess would be the gist of it. Let me guess you're a family man with spawn as well and these are all you care about.


I make ~4x my country's generous minimum wage and I'm struggling to find a decent flat I can afford - I'm not talking of something like a detached house, just a good flat in a non crappy urban area. I often wonder how people with an average job can stand the fact all they'll ever be able to own is a small flat in the middle of nowhere or in a run down area. The state of real estate is defeating.


I'm 95th percentile of my country's income according to government data, but struggling in the same way. Most of my friends who have houses have gotten them by inheritance or massive help from their parents.

"Why aren't people having kids? Why is no one marrying and starting families anymore?" Like dude, if I can't afford to buy a small property for myself as a single occupant, I'm not going to dive straight in to having children and renting for the rest of my life. I need financial stability.


Exactly, stability is the most important. I don't even care about large paycheck (like you said, 95th p.) if I still need to take a bad loan for 20 years in a country that has recently seen doubling in mortgage payments.

I just want to know it's going to be ok, for me and my family. After that requirement is satisfied we can talk about having kids, creating innovative companies, having breakthrough research. We can't achieve great things without this sort of stability.


>a basic human right

You do not have a basic human right to the labor of the people who build and maintain these houses.

This is where this entire discussion collapses for me. Yes, I agree there needs to be more access to housing. And it’s frustrating to me that our government is too inept to simply provide it. For instance: we have committed to about 45 Billion to Ukraine.

At a cost of $100k/unit (achievable at scale), that’s around 450,000 single family homes.

The “inflation reduction” act, at about $600 Billion, represents about 6 MILLION single family homes.

The “build back better” money, which appears to do approximately no building back of anything whatsoever would build about 40 MILLION single family homes all in.

This entire discussion is absurd to me. You’ve got politicians burning money, some people talking about housing as if they have a “right” to a house (that is: a right to force people like me to build them a house at gunpoint), and still surging homelessness.

Nobody seems to actually want to have a real discussion about any of this. When our elections come up, the “housing is a human right” group votes against any policies which would lead to people actually owning a home, and for the politicians looting the treasury. It’s all just absurd.


> You do not have a basic human right to the labor of the people who build and maintain these houses.

Correct! However, a significant portion of housing costs is not due to the stuff that's built on them -- something produced by labor -- but by the LAND that lies underneath it. Nobody built the land, it was already there. Someone just acquired it one day, and as it exchanges hands the prices have been progressively bid up, sucking money out of the productive economy and redirecting it towards those that own land.

Land is a really big deal, and we need to stop conflating land with capital if we want to fix the problems with the housing market:

http://gameofrent.com/content/is-land-a-big-deal


In other parts of this thread people are arguing that a land value tax wouldn't increase rental prices because landlords are price takers. How does land trading hands drive up rents if landlords are price takers?


I have a sense of overdramatization here. Nobody is holding anyone at gunpoint, we just want to have a safer future with regards to our basic needs.

Let's agree that there is a cost to building a house and someone has to pay for it, that's fair. What's not fair is making more and more, larger and larger luxury homes, turning other into AirBnBs and even keeping some empty (since it's "an investment") effectively making it harder for common people to have a place to live.

I don't want to be scared that if I get sick for a week I won't be able to pay my rent and will have to move... who knows where. I know there are people living in such fear while a multitude of homes stay empty.

In principle this boils down to private property rights and conservative way of thinking about society vs. making policies that would drive the standard of living up starting from the ones most in need. Both approaches are valid, they differ in the amount of suffering for the bottom 50%.


Remove zoning restrictions. I will build multi unit housing in my lifetime. I would do it sooner but it is expensive and permitting is hard. There are so many barriers that protect single family homes.


The actual cost of construction/materials of the house itself makes a negligible part of real estate speculation. A huge chunk of properties are bought with the expectation that they will not last more than a few decades.

We already face the scenario where people have to commute for over an hour each way to work in a city where they cannot afford to live. Let's not pretend that cost of constructing that shitty house a hundred years ago factors into the conversation. Should rich people be able to buy up land (and mineral rights underneath it) all over the country? What happens when there is none of it left?


> Should rich people be able to buy up land (and mineral rights underneath it) all over the country?

TFA is literally about giving people who don’t have the capital to outright buy a house the ability to invest in real estate. Like, you think real estate is a good place to put your money but you only have $5000 you can afford to invest. Or you want to spread out your investment across different markets but can’t afford to buy 20 homes.

I think if TFA was posted without the highly biased editorializing this discussion would be a lot different.


"The actual cost of construction/materials of the house itself makes a negligible part of real estate speculation"

We may have different definitions of "negligible"...


>The actual cost of construction/materials of the house itself makes a negligible part of real estate speculation.

$250/sqft, want to loan me 3 million? It will last more than a few decades.


Do you think humans have a right to own a peace of land on planet earth? (Not the labor just the land)

I find it very unjust being forced to buy land from someone else that the only thing they did was being born before.


Being born earlier is not nearly the only thing they did. They also (almost always) bought that land, (almost always) paid continual rent to the local government for the use of that land, improved and maintained that land, and finally, reached a decision that they needed to sell that land and improvements to someone else.


How do you feel about rent control? That gives someone who was there earlier a market distorting deal just because they were there first.


> You do not have a basic human right to the labor of the people who build and maintain these houses.

But you should have the right to live under a government who provide this for you.

It's like saying that you don't have a basic human right to have that doctor help you – no you don't, but you do have a right to have a doctor help you.

Safe housing is a human right, as is healthcare, as is food and water, because these things are essential for life.


Why do you have a right to having a doctor help you? What if he doesn’t want to help you? Can the government force him to?


You clearly didn't read my answer. No individual is forced to help you, you don't know their situation, but you have a right to have society in general help you.

Also using "he" to refer to a hypothetical doctor is somewhat exclusionary, I suggest "they" instead to be more neutral.


Society is composed of individuals. There is no such thing as societal help sans individual help.

You also forget, that society has rarely been consistent in who deserves help and on what terms.


If you don't want to treat all the sorts of people in a population, don't go into a field of public service. Period.

I don't care if you don't want to help someone because you think being trans is wrong. You still have to treat them if you are working in an ER, if you are a dermatologist, if you are basically any doctor. In a few cases, you might be able to refer the person to another doctor, if it is reasonable (as readily understood by laypeople), not urgent, and you (personally) pay any additional costs the patient might incur, including lost wages if they need to take another day off work, differences in insurance cost, and travel costs.

If you don't want to treat everyone, find another line of work. And yes, I think the same about other folks in public facing jobs. If you cannot help folks that are different than you, don't work retail. Don't be an accountant or lawyer the general public can hire. Policework, firefighting, and government jobs that deal with the general public would be off limits.

And yes, I think the government should force you to do this. They already do this in a lesser manner, though fair housing laws and fair labour acts and things like this. No, these aren't perfect, but nothing is - an imperfect fix that improves things is better than none at all, after all.


Doctors voluntarily take an oath to that effect. No government needed. Perhaps we need a, “Hestian” oath for home builders.


> > You do not have a basic human right to the labor of the people who build and maintain these houses.

> But you should have the right to live under a government who provide this for you.

Um... how do you think the government is going to do that? They're going to have to spend money to do it, that's how. And how are they going to get the money? They're either going to get it by raising taxes, or by borrowing it. The effect is the same, but with taxes it's more directly obvious. The government is providing you a house by taking taxes from the rest of us.

So... where do you get this "should"? And how should the government provide housing, without it giving you a right to the labor of the rest of us? (Not just those who build and maintain houses, but those who pay taxes to pay for it.)


> This entire discussion is absurd to me. You’ve got politicians burning money, some people talking about housing as if they have a “right” to a house (that is: a right to force people like me to build them a house at gunpoint), and still surging homelessness.

Isn't US homelessness mostly an issue of drug addiction and lack of mental health care? What percentage of US homeless do not fall into one of those categories?


For the visible homeless the percentage is high, but there are a lot of people living in their cars or on a friend's couch who just can't afford housing.


> You do not have a basic human right to the labor of the people who build and maintain these houses.

Food and security also require other peoples labour.


And are also not basic human rights.

A basic human right that is a corollary to security is the right to self-defense. You cannot obligate other's labor to provide your security, but you can provide your own security and that is your right.


> This entire discussion is absurd to me.

I wonder why that is.

> some people talking about housing as if they have a “right” to a house (that is: a right to force people like me to build them a house at gunpoint)

This must be the reason you think it's absurd, you've concocted a bizarre strawman that approximately nobody is advocating for.


Well inflation will go up even more thanks to that bill. Incomes will go down. So housing will become even more unaffordable


We need to accelerate this problem. Make it impossible to rent or get a mortgage in any city. Millions on the streets. Most of the cities kids eating from trash cans. Only then will we see change i think.


Oh no! Who will we turn to to solve this problem for us?


Any commodization of a necessary resource for living is inherently unethical. I know this isn't a popular opinion on HN, but I need you to think about this not as the property owner but as the tenant


You should probably think about how food gets to the plate before saying commoditization of necessary resources is unethical.


With food the question is less about the individual stocks of produce and more about the land occupied to generate it and who owns it, which in a distressing amount of cases is single large landowners


What you just said isn't responsive to the previous comment.


So it would be more ethical to take the 4 unit building I live in and make it a single family home?


If you own the building and live in one of the units the, in my opinion, most ethical course of action that still benefitted you would be to sell the remaining units to the current tenants or even better, if they've been living there long enough, treat their total rent paid as payment for the unit


The lot is zoned for 14 units, has 4 currently. If we give the 2 other families that live here a few hundred thousand dollar entitlement it will never be developed.

Your proposal is insane. They've paid 600 dollars (rent control) a month for (let's say) 10 years. 60k buy in for a quarter of a 1.2m dollar property? I'd take that deal as a renter.


That's why I said if the tenant has been there for a sufficient time. If they have covered the unit's cost, plus maintenance, they have effectively paid for all the owner's expenses. Shouldn't it be enough to effectively own the property they actually live in?


No, they took on zero risk to be in that position.

If my tenants lose their jobs they get six months free rent while I go through the eviction process. If I lose my job and can't get another I have to sell my property for a six figure loss.

I can make this property a single family home or I can make it available to other people as housing that they can't afford to buy outright. I don't understand the landlord hate. They can pool money, form an LLC, and buy a property if they want a tennant in commons situation. They can take on the risk and do the work.


There's no sense in arguing about it if you're a landlord, you have a monetary interest in the housing market staying this way and your relationship with your tenants is inherently adversarial


I have an interest in relaxing zoning so I can build. You can't even listen to someone deeply involved in a system telling you how it is broken, or what the incentives you are suggesting will lead to.

* Rent control privatizes the cost of a social problem (poor housing policy)

* Restrictive zoning and other barriers to building are why housing is expensive, this includes historic preservation and permitting too

* Parking minimums are a scourge

If your entire policy is some nimby reach around for single family home owners, I'm not sure anything I say will help you. I literally want to use my money to build more housing. I would also love to unwind all the distortions that currently exist (rent control).

If TiC collectives were a good solution we would see them more in the market. Your solution is just to ruin a market to make it work the way you want, but honestly, people are broke and cannot afford to buy. That also creates so many weird externalities that you seem to be unwilling to discuss.

Goodluck creating a single family home parking lot filled hellscape. I'll be adding units to the market (reducing rents) while you are complaining in la la land.


> Doesn't anyone feel uneasy about it, that more and more people are looking at real estate as a financial tool, not a basic human right to have a roof over one's head?

It’s always been viewed this way, at least in the west. Land ownership quite literally defined western social power structures for a very long time.

That said, the use case for housing is housing. Ownership generally isn’t that relevant, to the extent that prices are still set by supply and demand. If there are enough units on the market, prices or rents will be reasonable. If not, prices will go up.

My suspicion is that the attraction of single family houses as an investment asset on this scale are going to partially fade away. It’s driven by the fact that real estate is somewhat uncorrelated with equities and unleveraged returns have historically been comparable to the SP500. However, historical performance does not necessarily reflect future performance, and single family homes cost a lot to maintain.


After looking into achieving personal freedom through tiny home living (and which could take different forms than what we think of today with some creativity), I can say that one of the most challenging things standing in the way is zoning laws.

You'd be surprised how difficult it is to find any piece of land anywhere in the US where zoning allows relatively unfettered building of tiny or smaller dwellings. It's possible, but it's very difficult.


Isn't this why so many folks keep it on wheels / a trailer base? That seems to get around many of these issues, but does present difficulty if you're trying to claim it as your permanent domicile.


Yes, but some municipalities figured that out and banned anything that appears to be an RV or trailer parked for longer than a certain period of time.

Zoning laws for land often also include clauses such as, if you purchase land X in zone Y, you must construct a home of N,000 sq ft by time T or you are fined.


I think there is a big problem with housing affordability in many countries. It’s also a promising investment because, as Mark Twain says, “Buy land, they’re not making it any more.” This makes land unlike other commodities (you can just make more iPhones or whatever.) The situation leads to some movements which see land as inherently a public good, such as Georgism, on which there is a good Wikipedia article.

I think it would also be nice if there were some kind of scheme whereby property tax is low for a first home, but increases when you own more than one.


Every property tax I’ve ever paid has that property. At least the first one is lower than the rest. It’s frequently called a homestead exemption or a primary residence exemption.


Property crowdfunding (online trading of dividend paying shares in individually managed rental properties) has been a thing in the UK since not long after the the financial crisis.

This website[0] lists 18 companies in the property equity category, and I know of at least 1 more reputable firm not on the list.

The reality is that low yields, tax changes, and new regulations have recently made being a small time landlord a lot less attractive, which inevitably means big companies with economies of scale and tax efficiencies are going to start moving in on the industry.

[0] https://thecrowdspace.com/directory/real-estate-crowdfunding...


I have been thinking about this for a while...I cannot think of a way for it to be possible to profit from housing without causing poverty.

People say a lot of things as fixes:

1) Build more: this only works if they are affordable to the people who "need" them...not just the same investors who are already controlling the market.

2) Higher density: We had a highrise completed last year in my town. There are only 6 full time residents. The rest is investment/vacation rentals. Now another is being built. Meanwhile, affordable houses are being razed in order to leave the lots vacant or develop them into unaffordable housing.

3) Move to where nobody is: I live in Idaho. We used to be that state. Now we just have a market where you are required to make 2-3x what the average renter makes in order to purchase (assuming you can compete with the cash investment buyers). There are very few high paying jobs...and rents are increasing due to people buying investment properties in the middle of a bubble.

I would love to have a solution. The issue is greed. How many warning stories do we have about greed through history? Largely ignored...too much FOMO being exploited.

Currently, our town has companies shutting down (tons of unaffordable commercial/industrial rentals), restaurants closing multiple nights a week due to lack of staff, increasing homeless population in the region, but most importantly...the gap between "classes" is widening and the hatred is growing. Maybe that was the point the whole time.


I already posted a comment on this, but forgot to answer the actual question. I don’t think it follows that it’s wrong to commoditize basic necessities. Take, for example, food: the reason just about everyone in the western world can afford food is BECAUSE it is commoditized.

I would like the barriers to home ownership to be lowered. On the other hand, I don’t think the rental market is evil. A lot of people can’t afford to buy homes, and without homes for rent would be out on the street.


It's worth pointing out that when you say "people can't afford to buy homes" you don't mean that they can't pay the mortgage or maintain the building ~as well as a landlord, you mean that they don't have enough credit to convince a bank to buy the house and let them pay the bank monthly instead of a landlord.

Countries like China have ~80% home ownership rate amongst millennials (US is like 40%) precisely because they understand this: just because you can't convince a bank to give you a quarter of million dollars doesn't mean you can't reliably pay a mortgage.


The western world gets cheap food because it exploits the labor and resources of the less fourtunate.

Real estate investment is a direct example of wealth concentration. The less wealthy pay a richer individuals rent plus a little profit on top. That person should be able to buy the dwelling directly without a middleman extracting profit.


>The western world gets cheap food because it exploits the labor and resources of the less fourtunate.

This is true for vegetables and fruits. But the core calories come from corn and grain that is cheap because of industrialization. The US don't rely on an army of slaves to export soy to China.

Equally, housing could be much cheaper if a bigger share of construction would be industrialized.


Let's say you can build a rental unit for 300k. Third parties can't do this now. So individuals can come together, form a collective (LLC), and fund the development of a building they will live in.

Let's say they need 10% down only to do that construction. 30k each. What is the stat, 50% of people have less than 5k in the bank?

It took me 1 year of working with no college debt to save up 20k for a house. That was fast. Where do I live until I have 30k to build? My family? I was working on the other side of the country. What if you don't have family? You are homeless until you can afford to build?


Housing used to be cheap for the same reasons food was. General contractors and laborers didn't make much, and were subject to serious risk of bodily injury.

Nowadays they're paid well, and that is reflected in the cost to build.

Folks wanting to go back to cheap housing are arguing to reduce the compensation for builders.


Food is commoditized to the point where a lot of it involves slavery (Southern Europe) or exploitation of the state welfare system (UK), etc. So not quite the same.

Without homes to rent there would only be homes to buy and live in, taking all the rent seekers out the market would have a positive effect for most regular people because prices would fall to a level of basic affordability as we had had before 'buy to rent' became a bandwagon that everyone was jumping upon.

You can't introduce such wholescale inefficiency into a market without a lot of people suffering the consequences.

My parents bought their first house for about the same as the same house will fetch per month rental nowadays. That can't be right?


Do you really envision a world where every person who now rents is homeless, and every rental unit is sitting empty? Is that realistic in any way? The answer is that the market would adjust, prices would come down, different types of mortgages may be created to serve different markets, etc. It seems untenable that a huge percentage of people would be homeless while also having a similarly huge percentage of housing sitting empty and idle. Both things happen now, but if you're talking all renters, that's an order of magnitude more.


You are talking about different kind of commoditization. Food processing is commotized, not the food itself. In fact food is naturally immune to have a speculative market as it could only be stored for short term.


Food has one of the biggest speculative markets in the world, with insane amounts of leverage: commodity futures.


Speculative market can't change the price of food that has short expiry and long manufacturing time.


I agree. Real estate isn’t a commodity. One house cannot be treated just the same as another even if they are the same price and sitting next to each other. There is too much variation in maintenance, initial construction, terrain, landscaping and presentation.

Essentially you have to treat each house as unique and self judge if the price given is worth it for you.

So trying to treat it as a financial asset is problematic. Landlords have to be intimately aware of their properties condition .


Our property business (side hustle) provides nice places for people to live, where they do not have to worry about the larger maintenance and upkeep that comes with all property, not to mention the financing arrangements now required due to how our economy has (d)evolved.

I see it kind of like a what friend of mine, who was a pretty decent software engineer, said about going out on his own, rather than working for others (I am an entrepreneurial-type thinker, have run my own businesses for the last 30+ years, although not completed them in a buy-out process, just use them for cash flow).

Paraphrased: He didn't want the work of the overhead of running a business, he just wanted to work on software, then do other things in his life.

It is up to each person in life to do what they do as ethically as they think best for them, and up to each of us to choose whether we care to interact with others or not, with others' values/ethics in mind. And in that way, we get to benefit from others' expertise in areas we may not be as proficient.

Software can do great good, and it can do great harm. It is us humans that make the difference. Same with providing housing or commercial space. It is yet another tool, judge for yourself how that tool is being wielded by each practitioner.


Housing much more directly impacts individuals than software is likely to do in most cases. What makes being a landlord unethical by default, IMO, is you're participating in the commodification of one of the most basic human needs. Inevitably, even the most ethical landlord will, at the end of the day, have to make a decision based on their own economics which can easily cause a highly negative externality to the tenant, one the landlord is not required to deal with.


Yes, I think it would be a good idea to cap how many properties can be owned (at an amount reasonably high per private individual, but low for companies) although of course those intent on being real estate tycoons will find loopholes. I think, like many issues, this would best be implemented locally first. If a city/town has people who want less residential properties controlled by a few big owners (either for rent or to flip) they can demand their elected officials do something about it. Trying to enact broad change federally or even statewide casts too broad of a net with big holes that more likely than not would make it difficult for smaller owners to be able to do things but would most likely leave the international corporations only slightly inconvenienced. There really is no one solution that would be both effective and realistic but I do think it is very important for people to understand and discuss this topic, and not rely on assumptions. The market has changed drastically over time, as has public perception, and it's actually a lot more complicated than just "fill empty homes" and "foreign investors are owning all the houses".


It's unstoppable. The big difference between today and hundreds of years ago is that it's not enough to have a roof over one's head. Few people farm the land to make a living. One must live close to employment, family, friends, community; ideally in a neighborhood with low crime, close to commerce, and with access to quality affordable education for one's children. Not every neighborhood or property is equally appealing (or revolting) to all, but neither is the appeal of a specific neighborhood or property broadly debatable.

To bemoan the securitization (not commoditization, for not all real estate is equally fungible) of real estate is, ultimately, to bemoan that certain properties are closer to employment, closer to community, closer to commerce. But this is inevitable.

To seek otherwise would be to try to persuade businesses (through tax incentives etc.) to relocate to less-desirable areas, so that people will follow and invest with human capital. This has been tried, many times, in many countries, for reasons ranging from the economically to politically ideological. It has failed. Again and again.


> To seek otherwise would be to try to persuade businesses (through tax incentives etc.) to relocate to less-desirable areas, so that people will follow and invest with human capital.

I saw this in rural Austria, Im not austrian but it seems to have worked well. Many large industrial factories seemingly in thr middle of no where.


That's precisely my point. It's always possible to move individual companies or factories to somewhere rural with sufficient tax (etc.) incentive. But the initial artificial influx of capital fails to catalyze additional natural investment. Such places always remain "in the middle of nowhere."


It's stoppable because we have the internet and social networks.

>To bemoan the securitization (not commoditization, for not all real estate is equally fungible) of real estate is, ultimately, to bemoan that certain properties are closer to employment, closer to community, closer to commerce. But this is inevitable.

It could be the other way round. Using social networks, communities could organize to move to non-established properties. That could make real estate much more fungible.

Instead of going all virtual, Meta should solve the real estate market first. Otherwise, this leaves space for a startup.


I think this is blatantly unethical, but also stupid. By creating a speculative bubble fueled by low interest and moderate to high inflation, these people will put themselves upside down in their holdings. Meanwhile this drives up homelessness (plenty of tent cities popped up near me as rents and housing prices skyrocketed) which will drive political instability and increase crime as people become desperate.

Edit: one more thought, this also really hurts people who priced carefully by increasing their property tax and insurance rates by no fault of their own.


I agree about the housing speculation, but I challenge the (oft-repeated) assertion that this has caused homelessness. If you could afford to pay SOME rent in an area that got more expensive, then you can move to a less-expensive area and pay the same rent.


Who's paying for the move? How does the move affect commutes and how close is the new dwelling to essential services?

If you were already in the lowest priced area and that became too expensive, where do you go?


How many people are ejected from "the lowest-priced area?" I guess we can exempt all of them, then.

But nowhere in L.A. County (for example) is the lowest-priced area.

And regardless of where the next one might be, are we really to believe that living on the street is a better choice?


Assuming no economic frictions whatsoever, which in reality is not the case, especially when it comes to someone moving their entire life away from their social network and their familiar surroundings.


So your thesis is that people decide to become homeless to retain their social network?


My thesis is that economic frictions cause cases of homelessness that were theoretically avoidable. Their current social network isn't the only friction. Low IQ, mental health issues, no familiarity with COL or opportunities or people in other locations. These are other frictions. All the stuff that gets in the way of people making an optimal decision.


Yes. The commons morally shouldn't be owned by anyone. They can own the building on top of the commons, because they built it, but not the commons (land) itself, which they had no role in creating. If we want to invent the concept of land ownership, then people should pay rent to society for the privilege of monopolizing a slice of the commons (and the privilege of soaking up a larger proportion of the benefit of public investment in the armed forces, police and public infrastructure such as roads).


We do - it’s called property tax. How do you think local police, firefighters, schools, parks, services are funded? By land taxes.


I have no idea what country you're in, maybe wherever you live has that (albeit most likely it's woefully insufficient).

I'd just add that a property tax isn't that, because it also taxes the building.


It’s property value + land value. Even if I make 0 improvements to my property my tax seems to go up every year. It’s because the property value has gone up even if the improvements haven’t.


Yeah that's a property tax, not a land tax. Far from ideal because it punishes people for improving the land that they're occupying, which is the opposite of what we want to be doing.


I guess the affect really depends on where you live. Where I am land is really expensive. So even if you owned an undeveloped piece of land, your taxes would still be significant.

But I see what you’re saying. In a lot of places the land and taxes are relatively cheap.


George is that you?


Many of the causes of homelessness are anti-commodification:

“This is a family friendly neighborhood, we don’t want high arise apartments here. You can’t treat real estate like a commodity, these are peoples homes and communities! We need to preserve our neighborhoods character!”


I live in Buenos Aires, Argentina and it got really tiresome to hear the same people complaining about rent costs and lack of housing also complaining about high buildings, new apartments in their neighbourhood, etc. It's so annoying, they want all the cakes and eat them too.


But commoditization makes it easier to buy something, not harder. It means that people don't have to negotiate with individuals for housing, they can just find it on a market at a globally agreed price and aren't at someone's whim.


Food and shelter are basic human needs, but food is one of the oldest commodities, and the financialisation of food has real advantages in ensuring an adequate supply of food, stable prices, etc. There's extensive empircal and theoretcial evidence here.

There are issues with housing markets in many areas of many countries. There may also be issues with the trend you've identified. But if so, you need to identify a much better argument, because I think you've got it exactly backwards - that is, the real problem with housing is that it's not a commodity. (Specifically, housing is not fungible, and there is no liquid market in housing. Houses are not like bushels of wheat!)

> Aren't startups like this just adding oil to the fire which is the real estate market?

I mean....are they? Offhand, the problem appears to be a limited supply, and some of the companies buying houses (like BlackRock) have been very, very clear about this - they analyse markets to find places where housing is in short supply, and buy houses there, because they don't think market forces will be able to impact prices.

In a normal market, money flowing in to a commodoity that's in short supply would quickly lead to an increase in capacity, but it doesn't here. That's a problem!

...but it doesn't seem like one created by BlackRock, nor is it being exacerbated by them. It's not clear they're making things worse. But sure, let's sock it to them and drive the price of housing down. :)

> I do not understand how will someone expect for future generations to achieve their own personal freedom and living inside their own four walls.

Also something to consider - there's no shortage of housing. There's a shortage of housing where people want to live. We could change one side of the equation (build more hosuing) or we could change the other (live other places).

It's very easy to see how we can expect future generations to have shelter; the world is full of empty land and the materials needed to create shelter; given modern technology, shelter is technically cheaper to provide that at any time in history. It just happens to be illegal to build that shelter in the places people want it.

Can we expect future generations to be able to live in the tiny, tiny scraps of land we've decided are incredibly desirable to live in (SF, NYC, London...)? Maybe not.


> financialisation of food has real advantages in ensuring an adequate supply of food, stable prices, etc. There's extensive empircal and theoretcial evidence here.

Would you mind sharing some links or expand on this? I have always had the impression that as a civilization we should be moving towards providing completely free resources to people (limited in quantity and only basic ones, like water, rice, potatoes).


There's like...three fairly seperate ideas here.

1) Is financialisation of food good?

2) Is welfare/a social safety net good?

3) Shoud weldfare be provided as cash or in-kind?

Hitting them each in order:

1) The finacialisation of food seems clearly good. There's two main mecahnisms for this - first, large producers and consumers of food can bring future prices forward, locking them in and avoiding volatility. A farmer trying to decide whether to plant wheat or soy will want to know what the relative scarcity of these crops will be at harvest time. Future markets let the farmer determine this (using price as a proxy), and lock that price in. Equally, large consumers (mills, food processors, etc.) can go through the same process, smoothing out consumption by adjusting the timing and mix of what they process, and again, by locking in future prices.

Second, speculators also participate. Contrary to what some people seem to think, speculation in food is also valuable. Consider, for a moment, the Russo-Ukrainian War. It had a big impact on global food supplies, and the best possible thing that could have happened is if, well before the war broke out, people had speculatively planted extra wheat. Without the financialisation of food, there's no incentive to do so, nor any mechanism to funnel resources towards it. On the other hand with futures markets, a hedge fund could, say, look at satellite immages showing Russian troop movements towards the Ukrainian border and bid up wheat futures. A farmer with no idea what's going on in Eastern Europe could see the rising futures price, sell some what futures, use the money to buy extra seeds and fuel, and use those to plant a few extra acres, thereby ensuring that there will be extra wheat if a war does happen but (importantly!) costing the hedge fund (not the farmer) if no war breaks out. And equally, note that the use of futures markets and hedging actually did help smooth out prices once the war did happen.

For a further example, for stupid historical reasons the only food commodity in the US with no futures markets are onions. The prices of onions are more volatile than other food commodities.

2) None of this, however, has any real bearing on whether a welfare system or social safety net is good; they clearly are. But while we might argue (and I'd agree) that the government of any functional country should ensure all residents have access to, at a minimum, basic food, that doesn't tell us much about the most efficient way to ensure there's enough basic food go around. Egypt is the largest net importer of wheat, and also heavily subsidises basic staples, to the tune of billions of dollars a year. But that just means Egypt - more than almost any other nation - benefits from the financialisation of food. There's no contradiction here!

3) Economists are pretty united that cash payments are more efficient than in kind benefits. Coming back to Egypt, around 2/3 of the population qualifies for deeply subsidised bread - 5 loaves of flatbread per day, for a cost of less than 1 US cent per loaf. That's excellent news for every poor Egyption who loves flatbread; less good for anyone that doesn't care for it. If instead of paying bakers to produce loaves below cost you gave the money directly to the recipients, they could use it to pay for food of their choice. (Some might also use it the money to gamble or buy drugs; I lean towards a less paternalistic role for government, but reasonable minds can disagree here.)

So yes, it's reasonable to expect that in a country like the US, there should not be a single person without access to, sure, enough water, rice, and potatoes to sustain life. But access could mean many things, and it seems unlikely that dropping a big bag of rice off at everyone's door every month is the best way to do that. A better option might just be making sure that there is no person so poor that the price of such staples might be unaffordable, and that can be ensured in many ways (eg, subsidies, vouchers, food stamps/SNAP, cash payments, UBI, etc.) But another way of ensuring people can afford food is making sure food is relatively abundant and food prices are relatively stable, and the financialisation of food is one way of helping bring that about.

One further point: It might be tempting to think that some resources (water is often mentioned) should be free at point of use for consumers. But note that all resources are finite, and one way of ensuring relative abundance is ensuring they aren't wasted. Free or unmetered resources will inevitably be wasted by some. So while it may be true that every human on earth should have access to sufficient safe drinking water (I think it is!), not only does it not follow that drinking water must be free, making drinking water free could make it harder to ensure everyone has access to drinking water.

The more important the goal, the more important it is that we choose the right mechanisms to achieve the goal.


Here's one way to think about it:

In many countries, government policy has been (in some cases explicitly) that house prices should always go up. (The calculation is that more people own homes than rent, so this should be worth votes on net.)

If you have an asset class that, by government policy, keeps getting more expensive, then that will be very attractive for investors.

Is this a good policy? No, I think it's catastrophically short sighted. But it's what we've got. But it's important to keep in mind that while a pile of manure may attract flies, the flies didn't create the manure...


Despite the fierce rhetoric, the primary driver of the financialization of the US housing market has been A) US federal policy that grants preferential financial treatment of home ownership in the way of mortgage deductions and the Home Sale Tax Exemption B) Local and state governments which place supply restrictions on the construction of new homes, especially multi-family dwellings.

The latter is particularly serious. In normal markets, tight supply leads to higher prices. Producers respond to higher prices by increasing supply and prices moderate over time. In the housing market this is not happening: in high demand cities with well-paying jobs it is largely illegal to build new homes. Thus supply does not increase and prices continue to rise. In the oil industry in the 1970s, we saw how OPEC supply restrictions caused oil prices to rise. The same is happening in the housing market: local zoning laws are effectively operating as a cartel.

This government supported financialization of the housing market has created a haven for real estate speculators in the private sector. Continued low housing supply helps insure prices will continue to rise and thus make housing a good investment. This speculation makes the housing market even more frothy.

To break the cycle, we must end federal policies that encouraging housing to be seen as a primary asset investment for individuals; and we must reform local zoning laws that restrict new supply.


Absolutely yes. House buying should be restricted to self occupants or professional (ideally state owned) letting agencies IMO.

Here in Barcelona the market is screwed by shitty foreign investors with seedy letting agencies that totally ignore the tenant's rights. It's all about the money


The whole problem here is that housing works not enough like cars and laptops and food, which you can just buy for a probably-not-disastrous portion of your income.

Housing production is far too centered in the opinions of "the community." Does the community even exist when it is not opposing housing? One wonders. Housing cares far too much about your identity and character. Whether it is qualifying for a mortgage, passing a co-op board interview, or cities and neighborhoods calibrating their codes to attract the "right kind of people" and keep out the "wrong kind of people." This neighborhood isn't for renters. This neighborhood isn't for tech workers. This neighborhood isn't for multigenerational families. This neighborhood isn't for transit riders or cyclists. Housing types that mere professionals could afford would be inconsistent with the character of this aristocratic community.

Shut up! My money's as green as yours. Take it. In exchange I get a place to live. If there are not enough then someone can come along and make more. It would be so much better if housing were dramatically more commodified than it is.


There are no such things as human rights. You will never get anywhere wagging your finger at people.

> I do not understand how will someone expect for future generations to achieve their own personal freedom and living inside their own four walls.

Why would anyone expect that? It hasn’t been the case for most of human history. Maybe it’s not up to other people to figure out for you how to achieve your own freedom.


We have warped peoples minds so much they can’t think outside of a consumerist mindset. It’s like it’s a revelation to people that they need to be an active participant in their own lives. As if magical services ought to exist to serve them and bring them comfort on-demand, less they make a claim to being underserved. Magical carpenter elves should build them a home overnight using materials sourced by magic, by right.


But property, in its derivative sense, and by the definitions of law, is a right outside of society; for it is clear that, if the wealth of each was social wealth, the conditions would be equal for all, and it would be a contradiction to say: Property is a man’s right to dispose at will of social property. Then if we are associated for the sake of liberty, equality, and security, we are not associated for the sake of property; then if property is a natural right, this natural right is not social, but anti-social. Property and society are utterly irreconcilable institutions. It is as impossible to associate two proprietors as to join two magnets by their opposite poles. Either society must perish, or it must destroy property. - Pierre Joseph Proudhon


Real estate has always been commodified. But now there are more people with access to it than ever before. See home ownerships rates in the census [1].

There are real issues around the costs of developing. Building is insanely difficult and expensive now. There's tons of regulation around it increasing the cost, and ironically the labor movement makes it way more expensive in terms of labor (and materials... which also require labor to produce). Then you've got endless numbers of regressive NIMBYs masquerading as progressives who fight development with political means (via zoning), legal means (via lawsuits), and emotional means (via attacking it as gentrification). You face people like professors who decry gentrification, despite having moved into the area, owning multiple properties, acting as a landlord, and then collecting bogus evidence to prevent turning a private dog park into housing [2].

In Philly, you can either spend months or years getting a housing project approved and bribe council people like Darrell Clarke (who stays in office via appealing to NIMBYs and restricting development in blighted areas [3]), or you can build single family homes "by right" (according to existing zoning). Which means single family homes instead of high density or mixed use structures.

Even if land were free, building would still cause housing to be very expensive. Average cost to build a house in Philadelphia (cheap compared to other big US cities) is 300k. There are many places where you can get free land [4] but it turns out people want to live in a limited number of places generally.

1. https://www2.census.gov/programs-surveys/decennial/tables/ti...

2. https://billypenn.com/2021/03/29/west-philly-poop-study-feca...

3. https://whyy.org/articles/philly-council-limits-development-...

4. https://www.wideopencountry.com/free-land-in-the-us/


Unethical? No. Laughably stupid? Yes.

It is maddening, knowing that valuation is totally detached from reality - and still having no alternative but to join the game of musical chairs. I genuinely don't understand how anyone can think "Unlike every other thing since forever, my continued use of this property for 20 years actually makes it more valuable... better jack up the price to twice what I paid for it!"

In addition to the insult to your intelligence, you've got the government doing its very best to help investment banks outbid you. Injecting capital into the economy by providing interest free loans and bailouts to the very top of the power structure... what could possibly go wrong?


As others have mentioned the solution is to build more affordable housing… but where?! More unaffordable houses won’t solve the issue.

I think decentralization of work (WFH) will counter it in the long term. If you can work from anywhere then your housing options become limitless. I’ve lived in the country the last 15 years - absolutely no way I’ll live in pricy cities.

That said, people in the service industry will continue to suffer - I’ve heard of people commuting hours each way for work! Service industry and cities for that matter will have to get into real estate to provide community (I hope not dorms or projects) for workers.


I think the “decentralization of work” will only lead to large scale improvement if it also comes with decentralization of other needs as well; having social, cultural, and other needs met outside of large cities.

The decentralization of means that I could live in a flyover state or much more rural area, but there are many things one would still lose easy access to. You’re not going to convince most people to move to a food desert with unreliable internet, a 45 minute drive to the nearest grocery store, and 2 hours from the nearest airport just because their job is decentralized now


I absolutely agree - infrastructure and quality of life is an issue when it comes to small towns. Things like Starlink is giving me hope.

It’s not for everyone for sure - I’m more introverted than most. So I need to be close to airport for my twice a year flights - not at all.


> own personal freedom and living inside their own four walls.

I think this thinking has done more harm than corporatization of real estate. Owning a home has a outsized emotional impact on the psyche of regular Americans. Buying a TV isn't a life event , is it? nimby thinking is just downstream from this thought.

I think corporatization trend will finally disassociate real estate as the only wealth building tool for regular people. Cancel all the govt subsidies, lift all the nibmy restrictions, let the home commoditization begin for real. Lets start building homes like any other commodity.


Yeah, it's a problem. By treating housing as an investment, any profit motivated entity becomes interested. Companies start buying and holding them like stocks or gold because it is an asset that reliably appreciates in value faster than inflation.

Meanwhile, average homeowners are practically required to consider their house as an investment as well. In an increasingly precarious society, owning a home is one of a few things that a middle class person can do that guarantees some financial stability. Homeowners are incentivized to support policies that drive up their home's value so that they can sell it later (and maybe have enough money for retirement). Some of these policies include supporting single family zoning (of which there is a shocking amount) and opposing affordable housing projects in their neighborhood.

When housing costs rise faster than wage growth, the barrier to breaking into home ownership becomes increasingly difficult. A class system of renters, home owners, and landlords is forming and becoming rigid.

Housing is not supposed to be a financial investment strategy.


Entrepreneur in the RE industry from Europe (Luxembourg) here.

My gut feeling is "yes", and we hear more and more about Real Estate funds going to the residential market (they were dealing mostly with office and retail surfaces here before). It is kind of scary because it will accelerate a phenomenon. Commoditization will lead to the same thing, more money trying to buy a limited supply leading to a booming price.

However, recognizing that commoditization is a catalyst should not hide the fact that it is not the root of the problem. No one can promote demographic growth (globally or regionnaly), limit new dwellings and act as if booming prices are a surprise or the by product of greed. It is not, legal constraint has made construction a real pain but demand is growing.

To give a bit of nuance, on many markets rental yields has been collapsing has a consequences of this. Yes prices are climbing but rent are not. So yes, buying your home is a far away dream, but compared to the price of ownership rent have never been cheaper.


No. Nothing wrong with Buying a valuable thing for An expensive price. Its valuable.

What is wrong is fraud. Fraud happens when a bank is allowed to create money out of nothing (banks used to have to SAVE money to lend it, but the Central Bank makes it so they dont have to save money to lend it). That is unethical and also: FRAUD.

Buying a house is expensive and sucks but thats not unethical for things too be expensive. It is unethical for Banks to commit fraud by loaning money they dont have.

NOTE: central bank is there to save the banking cartel. If banks were just allowed to do what ever (free banking) they wouldnt get very far cause of runs on banks and competition between banks, but a central bank allows the tide to raise all ships (banks)


Folks talking about housing tend to only consider the list price when deciding if it's too expensive.

Far more interesting to consider, I think, is there cost per square foot to construct; which has skyrocketed in a few generations.

Dimensional lumber and other materials just cost more. Labour is compensated better. And yes, fees have gone way up in many municipalities.


To all the people saying 'where would the renters go?' - rental units don't have to be supplied by for-profit organizations. We could adapt the co-op system (or have it set up by the local gov i.e. council housing).

If anyone is / would like to work on something to further these ideas about definancializing housing please comment.


My extreme political opinion is that no one should be allowed to own more than one property in which they do not reside.


>Seattle-based Arrived claims that it is different from others in the category in that it is “fully SEC-qualified,” meaning that it has approval from the Securities and Exchange Commision to offer shares of individual homes.

I don't see this as being any different than the numerous REIT's that you can invest in.


Georgism is the idea that, although the improvements built on land can be owned by a private person, land itself cannot, being a part of the natural world which is by right the common property of all humankind. By this idea, anyone claiming exclusive use of a piece of land owes to the community a rent equal to the value of the unimproved land. This idea extends to all that is (or ought to be) the commons: natural resources, pollution, the EM spectrum, etc.

If you think about it this makes perfect sense: why is a small lot in a city (say central Paris) worth millions while a 10ha estate in the Australian outback worth a few thousand? Because of the community that throughout the generations built the city into a place with value where people want to live. It is therefore to the community that this economic value belongs.

Beyond the moral dimension of this proposal, there is also a surprising economic depth: this rent/"tax" would discourage unproductive use of land, as speculators cannot afford to sit in a property, wait for its value to go up, and collect the income from the hard work of the community around it.

I'll leave you with some quotes:

The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the takingby the community, for the use of the community, of that value which is thecreation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of thecommunity, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.

—Henry George

Landlords grow rich in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.

—John Stuart Mill

The underlying problem is the whole structure of our economy which has become more oriented at increasing rents than increasing productivity and real economic growth that would be widely shared in our society... but a tax on land rents would actually address some of the underlying problems. This is an idea that Henry George had more than 100 years ago but the analysis that I have done says it would actually go one step beyond Henry George. Henry George argued for a land tax because it was non-distortionary but this analysis says that a land tax actually improves the productivity of the economy because you encourage people to invest in productive capital rather than into rent generating wealth and the result of that shift in the composition of savings toward more productive investment leads to a more productive economy and leads to a more equal society.

—Milton Friedman (and believe me, I don't often quote Milton Friedman!)


Georgeism has my vote.

How do we get to SALSA (https://www.radicalxchange.org/media/blog/millennials-zoomer...) ?


Georgism really shines when applied to energy [1], maybe even better than to land. How ridiculously appalling we will appear to our far-future successors with "our" companies making trillions of dollars burning scarce resources because they can be easily "owned" while the big fiery explosion in the sky is unspent and for all intents and purposes unspendable, alas, also naturally un-ownable. The sun is one of the few current "georgist objects" in our present capitalist realism.

[1] From Conclusion, "[t]he petroleum industry is a perfect example of the way a Georgian tax system can be used to enforce communal interests in limited natural resources", Leeson, Joseph (2019) "A Georgist Perspective of Petroleum Taxation," Indiana Journal of Global Legal, https://www.repository.law.indiana.edu/cgi/viewcontent.cgi?a...


Many answers here seem to come from wishful thinking bordering on financial illiteracy.

Money has a cost. Whether you use it to build houses or indirectly invest in companies through stock markets or your own business or treasury bonds, all expect yield vs risk to match other investment opportunities. If you make it tough for new investors to enter housing markets, then new money will stop flowing into housing markets as they can find better yields else where. That means lower new supply and higher rents. If you assume your toothpaste company is ripping you off by increasing prices, then the answer is not to make it difficult for new toothpaste companies to enter the market (or add more taxes to the existing ones). The answer is to make it easy for other companies to enter the market and ensure its profitable for them to do so.


We want businesses and entrepreneurs to try new things with real estate, just like any market. I strongly believe that our physical spaces can get better/cheaper, but only if you allow investment and risk taking.

The main issue at the root of the OPs concerns is that as a society we have attempted to make real estate ON AVERAGE a good investment, which by definition means increase faster than inflation. There are demand side subsidies for home ownership, but many supply side issues as well. For example free parking and minimum parking requirements and max height restrictions. Many others have pointed these out. If we as a society tried to increase entrepreneurship in real estate by opening up more options, we could see a flourishing of options for people, with more range than ever, including lower cost options.


There's definitely a need for creative ideas. But also thinking about AirBnb I don't think this can come from the private sector.

That said I don't get why people don't invest in something else. There are some many different assets, using real estate to squeeze out a few percent every year on average seems a very weird thing to do. If landlords feel they get screwed over it's exactly because the margins are so thin.


The only problem with NIMBY is that there is not enough NIMBY. Poor and working class people should also have strong voices in the character and development of their neighborhoods -- not just the wealthy. Marc Andreessen should be able to have a say in the character and development of his neighborhood, and everybody else should, too.

California and the Sun Belt have too many people relative to the innate ecological fragility of the regions, and manipulating the market to cram even more people in there than the economy or environment can support is foolishness and irresponsibility masquerading as a moral crusade. Foolishness and irresponsibility always masquerade as moral crusades.


I 100% find it unethical and I think it's a parasitical thing to be working on.

I'm living in a rural mountain village that has become a little more trendy since remote work became a thing. It was a sleepy relaxed place comprised mostly of kind people.

Of course a wealth property mogul has snaked his way into the village after seeing an opportunity and now hunts down houses, out pricing local people and young families if possible and then sells the houses to the hedge fund he is working for, or buys them with his own personal wealth with plans to sell it later on at a much higher price than he paid for it to another wealth friend who doesn't even live in the same country.

This guy is actually hoping that his money will also drive up prices after other villagers see they could get more money (potentially) if they'd sell to him. Obviously people are free to choose who they sell to. But what a thing to try do? Essentially encourage the destruction of a community by waving money around. He will even interject on previously arranged deals and offer double the money hoping others can't pay and tempts the seller to take his money.

None of this behavior adds value to the community, it tears it apart, they just take. They use money to bully and create stress for everyone who genuinely would like to live here or start a business. Robbing people the chance to live a relaxed way of life and raise a family without too much financial pressure.

I talk with the guy and funnily enough he told me he'd occasionally "gift a house to a local family" rather than some other rich asshole so he looks like a nice guy and presumably older people fall for his cons and sell their places to him. I've also heard him tell me he has had death threats made against him, so yeah, this is what his behavior drives people too.

My only hope is, people, on average choose community over money, but in the world we live in with inflation etc, I can't blame them if they feel pressured to sell to the highest bidder.

I want finish this rant by saying this, everyone else in this community adds value by farming, running stores, running schools, being doctors, mechanics etc. This person adds nothing, he only takes for his own gain. Encourages others to come in and run businesses her purchased at a cheaper price.

He uses the very things people work hard to produce and which make the village a beautiful place, to sell it to other people. Similar to how Uber and Lyft make money out of the roads people pay for through taxes. It's leeching.


The financialization of housing is unethical.

Elora Lee Raymond at Georgia Tech continues to document and research the devastation in Atlanta — evictions of tenants, the resulting increase in deplorable rental options, the destruction of the market for working class homes in Atlanta’s Black communities.

https://www.atlantafed.org/-/media/documents/community-devel...


yeah, the pressure on housing is a problem in so many countries and it really became problematic the more and more people started using it as a way of investing. In many places it is one of the easier things to convince a bank to give you a large loan for, so you can get a lot of leverage. Once you get one, then you get as many as you can get finance for, etc etc. At the end of the day, it may require a lot of oil on that fire before governments legislate such that massive leverage on lots of residential properties is not as desirable as other investment options.


I don’t know how I’m supposed to feel anything but hopelessly depressed by the housing market.

My neighborhood consists of approximately 10% corporately owned rental homes purchased after the housing crash using money borrowed by said corporation for next to nothing.

These houses are now full of people such as myself who can’t afford to purchase homes, paying ever-increasing rents and never able to scrape together enough capital to buy anything of their own.

Sure looks to me like we’re reinventing feudalism, with serfs paying tribute to their investor lords.


Land rights as a basic right is an unsolved issue in _all_ parts of the world. Without this root issue being solved every thing else ends up being a band-aid/patch work. Georgism, I think come closes philosophically to solving the issue.

Side note: Land rights are even more important than things like free speech. Also I'm not saying that land rights as a basic right is easy to solve, it is actually very difficult, but for me it a per-requisite to every other 'right'.


You cannot fix housing. It is simply demand and supply. The problem to address, which is more fixable, is to incentivize employers to move to less popular areas. As an employee I also do not want to live in the largest metropolitan city. There is one distinct advantage of living in such a city, which is that finding new jobs is easier. But everything else just sucks, and I do not live 365 days a year looking forward to the day I need to find a new job.


"Leave your friends and family, abandon the area that you grew up in for 30 years" is not really practical advice. Maybe it works for you, but it does not for other people.

You are right about this though: it is supply and demand. And currently there is a lot of regulatory capture on the supply side. Meanwhile there are new investment vehicles on the demand side.

I don't know what the solution is, but when I watch my local news, not a week goes by that I don't see a headline about a developer trying to build some high density housing, but local residents show up to some board meeting and complain about it until they reduce the density. The reasons given make no sense. "It's not part of our community plan"... So change the plan??


The leaving your family part goes both ways.

Most young professionals have to leave their friends and family behind to move to the big city for their career and then live a miserable life away from the people that made their life meaningful. This is my perspective.


Nope (own my home + 8 rental units).

If you actually want to do something about it, advocate for zoning reform. People buy SFH because the lack of MFH in some areas makes them a pretty sure bet appreciation-wise. If developers were more free to build duplexes/quads/ADUs or larger, the increased supply would theoretically lower rents in the area and make SFH less attractive as an investment vehicle.


This WHY there's a "housing shortage", especially the removal of housing from long term occupancy due to short term rental...


I’m more concerned with overly rigid planning and zoning rules distorting the ability for high demand to increase motivation for supply.


I don't see owning a residential property as any more of a right than I do owning a luxury sportscar or private aircraft. Having access to an affordable roof over your head yes, owning that roof no.

Even if someone gave land to an individual, many would lack the ability to actually have a home constructed without saving for many years simply due to the cost of materials.


The problem isn't with housing. It's that private banks can create money on their books from nothing when they give someone a mortgage. This inflation of the money supply pushes up the housing prices and creates the speculative bubble. It also means that bankers can make interest on loans without actually doing much work for this profit.


Housing is a basic human right and should be protected as such. However, housing in a prime location in a big city isn't one. There just isn't enough.

The best method we have for distributing a luxury good with limited supply and excess demand is through markets and prices. Every alternative we tried have always lead to a lot of troubles.


Doesn't commoditization lower the prices of goods? I guess it comes down to the math and amount of speculation.

Maybe you're referring to the renting vs owning aspect of it that is potentially bad. In which case I would refer you to other countries' housing systems, and look into georgism/the land value tax.


Real estate in America is perversely incentivized. In America, you are raised often to believe that you have not "made it" until you are a home owner...And, many folks are surprised to truly understand that even if you pay off a mortgage loan, that the government can confiscate your home after you fail to pay taxes. And, then poof, you are no longer a home owner. When i was a young kid, I thought that once you pay off a mortgage, that;s it, you never have to pay *anyone* any sort of "rent" ever again...But that's factually wrong, if one considers taxes a sort of rent. I'm not against government nor taxes, and actually i have been happy (yes, happy) to pay my taxes for the 2 decades that i was a home owner, because i saw directly the great school system and decent management of some (though not all) town infrastructure that came from tax proceeds/revenue...But, this idea that being a homeowner means you never have to pay a sort of "rent" (after paying off the mortgage) is just not true. And, yet, the real estate industry and other adjacent industries keep pushing that idea into your head. Many Americans are tricked into living under concidtions that are way above their means, simply to feel like they have "made it in America". I'd be happy if everyone was just honest about things: that a person doesn't really entirely own their home in the way that the idea is promoted.

Oh, and separate of the decades that i owned a home, I also ran global web operations and digital products for one of America's largest real estate companies...and i can tell you that there's alot that people would not want to know on "how the sausage gets made". While there are plenty of honorable and good employees and real estate agents, sadly there are still enough shady folks...and its not all their fault...mostly because the industry incentivizes bad behavior...and by bad behavior i don't mean illegal (though of course that happens too), i mean simply unethical behavior. And, with this industry having survived the dotcom boom, the great recession, the pandemic, etc....there's just no way that things will get less shady. More and more parasitic behavior is on the horizon for this industry, so it doesn't surprise me that more startups are yet to come. Or, maybe I've just been too deep in the industry?

A nd, don't even get me started on how foolishly many American towns (and of course American homes) have been designed towards suburbia instead of better, densely (and less resource wasting) approaches like towns in other countries.


The megabull case for Bitcoin is when hedge funds realize Bitcoin is the much better property than real estate. They dump their real estate and buy up Bitcoin. Bitcoin doesn't degrade and the effort to manage it scales by a constant factor compared to how much you own unlike real estate


The problem is more fundamental or broad than housing. The problem is that a few groups have amassed way too much money, and they are desperate for solid places to put it (especially in those times when interest rates were negative!).

Naturally, they look to real estate since real estate is famous for being a "safe" place to park money. And as history usually shows, it's a place where your money will grow as the asset naturally increases in value... "They're not making any more real estate", as the motto goes.

If you stop and imagine a utopia where everyone had approximately the same wealth, give or take a "reasonable" factor of less than 10, then the wealthier people could own one really nice home or more than one not-so-fancy home. With their excess money, they could conceivably own and rent out another property. This would be fine, since the person on the bottom of the scale might not like the only home they could afford, or maybe they don't plan to stay put long; so they could rent a nicer home from the aforementioned wealthy person.

Of course regions which were more attractive to live in (coastal southern California, for example), the homes would be more expensive because there would be more demand. But still, there would be an upper limit on how expensive they could be because there wouldn't be people who could afford mansions. You might still find homeless people in southern Cali, because sleeping in the park by the beach in an ideal climate just might be worth it to some people compared to sleeping in a home in some suburb of Dallas, Texas.

Instead, we are on a clear path toward Corporatocracy. As long as you're a member of the elite in a corporation, you'll be fine. You'll have more than enough money to afford a very nice home... and perhaps even at a below-market price thanks to a corporate benefit, since your corporation may own thousands of homes.

I'm looking toward boats. There are beautiful places in the world where only smallish boats can go (so that keeps out the megayachts), and with some training you can relocate yourself relatively as you please, enjoying different parts of the world. As long as we have workable internet anywhere, which we do have mostly solved now, other needs should be relatively small and easy to manage.

A 40-50 foot sailing catamaran costs $250-750k depending on its age and quality. Figure 10% per year for maintenance, and you're still in the range of a reasonable home price. Plus you never have to live near crappy neighbors if you don't want to.


I’m a huge proponent of banning all foreign entities and funds purchasing homes here in Ireland, and capping the number of properties nonforeign entities can purchase. (No cap on building their own property is still a grey area for me though)


30 vacant homes for every 1 homeless person in the US and its just going to get worse.


Citation?


There definitely is a problem but I believe this sites’ demographics won’t let you find many voices towards taking measures that limit profit-seeking.

Entire sectors like healthcare and childcare are being gutted by prohibitive living costs associated with living in a city or close enough to it. The people of the cities don’t have enough essential workers anymore due to them being priced out.

Even private sector employers have to pay the price for the real estate sector cannibalizing economic growth and pushing corps to increase salaries (and the salaries increasingly just falling into the hands of real estate instead of businesses).

Productive business and economic growth is being captured by the non-productive housing sector and land-ownership class.

If taxes on the wealthy would have increased as fast and as comparatively much as rent has for the working classes then the wealthy would be at the barricades.


>more people are looking at real estate as a financial tool, not a basic human right to have a roof over one's head?

When was this ever the case? I can't think of a time in human history where housing was seen as a human right


I want to use your question as a jumping off point to talk out some thoughts I've been having in this area.

> When was [housing as a human right] ever the case?

North and South America before the coming of the Europeans.

Let's start in the far North. Here's the classic scene from "Nanook of the North" where Nanook builds an igloo: https://www.youtube.com/watch?v=3F0G3IZA6OI It takes two hours to make an overnight shelter, and a day or two to make a semi-permanent dwelling.

In the desert people built homes using earthen bricks (adobe) or dug into the sides of cliffs. https://en.wikipedia.org/wiki/Ancient_dwellings_of_Pueblo_pe...

In between there were tipis and lodges of all kinds, https://en.wikipedia.org/wiki/Tipi https://en.wikipedia.org/wiki/Hogan

The point is that in every part of the land the materials and methods to build a new home were freely available and widely known.

There were no homeless people, no economic destitution.

- - - -

Then for a long time there was the colonization phase, where anyone who wanted to could grab some land and start farming, provided they were willing to fight the Native Americans, and weren't imported as slaves.

> The Homestead Acts were several laws in the United States by which an applicant could acquire ownership of government land or the public domain, typically called a homestead. In all, more than 160 million acres (650 thousand km2; 250 thousand sq mi) of public land, or nearly 10 percent of the total area of the United States, was given away free to 1.6 million homesteaders

https://en.wikipedia.org/wiki/Homestead_Acts

There were also abundant natural resources (and here I would cite the usual: flocks of birds so thick they eclipsed the sun and turned day into night; rivers so swollen with fish you could walk across them without wetting your boots; herds of bison so vast they took more than a day to pass by; etc.)

- - - -

Eventually the frontier closed:

> Virgin farmland was increasingly hard to find after 1890—although the railroads advertised some in eastern Montana. Bicha shows that nearly 600,000 American farmers sought cheap land by moving to the Prairie frontier of the Canadian West from 1897 to 1914. However, about two-thirds of them grew disillusioned and returned to the U.S.[11][314] The Homestead Acts and proliferation of railroads are often credited as being important factors in shrinking the frontier, by efficiently bringing in settlers and required infrastructure.

https://en.wikipedia.org/wiki/American_frontier#End_of_the_f...

- - - -

I feel like there is still a lot of open, unused land that could be made into homesteads, but the political and economic realities have shifted.


This is a noble savage error. Shelter was still a valued commodity and not guaranteed human right. Tribes fought over land, and dwellings required labor. They often had many people to a dwelling because of this specifically.

If you wanted to build an igloo or adobe building today, the land is cheap as are the materials. No one is interested in doing this exactly because the conditions would be considered economic destitution.


> This is a noble savage error.

You said that last time ( https://news.ycombinator.com/item?id=31224977 ) I promise I'm not fantasizing about magic elves. :) However, it's clear that Native American lifestyles were preferable to European-American lifestyles. Graeber and Wengrow in "The Dawn of Everything" quote at length a letter from Ben Franklin on the subject:

> When an Indian Child has been brought up among us, taught our language and habituated to our Customs, yet if he goes to see his relations and make one Indian Ramble with them there is no persuading him ever to return, and that this is not natural merely as Indians, but as men, is plain from this, that when white persons of either sex have been taken prisoner young by the Indians, and lived awhile among them, tho’ ransomed by their Friends, and treated with all imaginable tenderness to prevail with them to stay among the English, yet in a Short time they become disgusted with our manner of life, and the care and pains that are necessary to support it, and take the first opportunity of escaping again into the Woods, from whence there is no reclaiming them. One instance I remember to have heard, where the person was to be brought home to possess a good Estate; but finding some care necessary to keep it together, he relinquished it to a younger brother, reserving to himself nothing but a gun and match-Coat, with which he took his way again to the Wilderness.

Anyway...

> Shelter was still a valued commodity and not guaranteed human right. Tribes fought over land, and dwellings required labor.

Sure, but there weren't homeless people. I mean a fire, flood, or enemy attack might leave people destitute, but there wasn't a perpetual destitute class, eh? Dwellings didn't require a lot of labor.

> They often had many people to a dwelling because of this specifically.

Are you sure? I am not an anthropologist (nor a Native American for that matter) but my impression is that that would have had more to do with family structure?

- - - -

Really the point I'm making isn't specific to the New World, it was common all over the world for people to build their own houses. In economic terms it wasn't very expensive to build a new dwelling.

> If you wanted to build an igloo or adobe building today, the land is cheap as are the materials. No one is interested in doing this exactly because the conditions would be considered economic destitution.

A lot of places won't let you build and live in an igloo or adobe building today.

But I'm not really advocating that. There are modern low-embodied-energy and high efficacy home designs (e.g. https://en.wikipedia.org/wiki/Earthship ) that would be much more comfortable for the modern sensibilities. Imagine if a modern home could be had for $10k instead of $100K ( https://en.wikipedia.org/wiki/Dymaxion_house )?


Is it that shocking that I would hold consistent views over time? I have some experience in this area that would be very difficult to dislodge.

I have lived off the power, sewage, phone, and internet grid for 20 years. I have built cheap homesteads and expensive ones. I have spent days foraging pinion nuts and weeks bowhunting deer.

I like to think I have some sense of the luxuries afforded by modern living, and what it is like to go without them.

>Really the point I'm making isn't specific to the New World, it was common all over the world for people to build their own houses. In economic terms it wasn't very expensive to build a new dwelling.

My specific point is that it still isn't, if you are willing to put up with the quality of lodgings non-industrialized people and settlers had. You can buy a wooded plot of land and build a log cabin for free. You can buy a steel shed that Native Peoples would have marveled at for a ~$1k.

>A lot of places won't let you build and live in an igloo or adobe building today.

Not in down town SF or most urban centers. If you leave these behind, nobody is going hunt you down and arrest you for living off-grid in a backcountry hovel. People actually do this!

>I promise I'm not fantasizing about magic elves. :) However, it's clear that Native American lifestyles were preferable to European-American lifestyles

I think you are fantasizing about elves. There is a lot positive to be said about native lifestyles, and negative to be said about industrialized lifestyles. However, I think most of them boil down to cultural issues and materialism, not the fact that Indians had somehow a superior material wellbeing.

Even the homeless have many superior luxuries to natives. What they lack is in a different category entirely.


> Is it that shocking that I would hold consistent views over time?

Not at all, in fact I respect that. I just didn't realize that we had talked about this before when I replied to your previous comment. On the one hand I feel a little silly, on the other hand I got to trot out that Ben Franklin quote, so that's cool. What do you think of that, what he wrote?

> I have some experience in this area that would be very difficult to dislodge. I have lived off the power, sewage, phone, and internet grid for 20 years. I have built cheap homesteads and expensive ones. I have spent days foraging pinion nuts and weeks bowhunting deer. I like to think I have some sense of the luxuries afforded by modern living, and what it is like to go without them.

That's fascinating! I don't want to get personal but I'd love to hear more about it?

> My specific point is that it still isn't, if you are willing to put up with the quality of lodgings non-industrialized people and settlers had. You can buy a wooded plot of land and build a log cabin for free. You can buy a steel shed that Native Peoples would have marveled at for a ~$1k.

> > A lot of places won't let you build and live in an igloo or adobe building today.

> Not in down town SF or most urban centers. If you leave these behind, nobody is going hunt you down and arrest you for living off-grid in a backcountry hovel. People actually do this!

You're right. My impression is that this is easier said than done, but that might be because I'm mostly only looking in California, where people have gotten kind of huffy about that sort of thing, at least in most counties. I've been looking at these cheap 2-5 acre parcels out in the desert (Utah, Arizona, NM, CO) that are just a couple of grand. Some of them even have electricity nearby. I guess the demand just isn't there.

- - - -

> > I promise I'm not fantasizing about magic elves. :) However, it's clear that Native American lifestyles were preferable to European-American lifestyles

> I think you are fantasizing about elves.

You think I am, I think I'm not, which one of us is closer to my brain? :)

> There is a lot positive to be said about native lifestyles, and negative to be said about industrialized lifestyles. However, I think most of them boil down to cultural issues and materialism, not the fact that Indians had somehow a superior material wellbeing.

There are very few cases of Native peoples voluntarily adopting Western lifestyles. They adopted useful things like guns and metal knives, but not culture.

That Ben Franklin quote makes it pretty clear that people preferred Native lifestyles despite the material lack. The fellow "reserving to himself nothing but a gun and match-Coat" shows that the "Wilderness" at that time actually met all his material needs, eh?

There's no doubt that the Indians did not have a superior material wellbeing. To me it's fascinating to speculate on what immaterial quality the Native life must have had that the European life didn't that outweighed the superior material wellbeing of the European.


It's unethical. As unethical firms are powered by unethical people, I wouldn't consider a job applicant with work history in this sector (e.g. AirBnB engineers need not apply if I'm the hiring manager).


There are no positive natural human rights, only the negative ones (rights to be free from violence, including bodily autonomy, freedom of speech, rights to keep property etc). There are no rights that have to be provided by others for free. If I need my own place to live, I am expected to earn money to rent or buy it; I can’t expect anybody to give me this for free, there is no “basic human right” for me to be kept under a roof.

Having said that, I am of course all for making housing more cheaper, and for disrupting the market in general, up to and including stopping the appreciation cycle. If you sell a used car, you will get less money than for a new car; the same should go for housing. The only thing preventing this are policies biased for existing homeowners; these are unnatural and should be repealed.


> There are no positive natural human rights, only the negative ones (rights to be free from violence, including bodily autonomy, freedom of speech, rights to keep property etc).

I'd say that there are no natural rights. Never heard a good argument for any of them.


It's outright evil. I am not joking or being ironic or anything like that. People who are doing real estate investing / flipping and all that are pretty much destroying our civilization now.


I'm very curious how population decline would affect this. Part of what made housing a business was the exponential supply of new humans for hundreds of years, but that trend is changing rapidly.


That decline doesn't affect urban centres, they're becoming even more dense - this is part of theproblem - but hard to reach rural/countryside areas where housing was not an issue.


The problem is that our system has perverse incentives around real-estate that encourage extreme profit seeking while liming the supply of affordable housing.

We need to restructure taxes around real estate and mortgages to encourage single family home ownership and affordable rental units. Then we can let capitalism run wild until people learn to game the new rules.


Housing reverts to the mean. Get a really good recession, and houses become viably priced again, even in inflation terms.

You can thank the Fed for the 12 glib years - their actions have these side effects.


Yes, I'm with you.

(Also... they are not the only business that is unethical).


"You'll own nothing; and be happy!"

In this sense, having no solution to the cost-of-housing problem, certain individuals have decided to make money by exacerbating the problem.


You can't really own property anyway. You can only rent it from the city/state. Try not paying that rent and see what happens to your "ownership".


I came to the conclusion that anything that involves speculation on any market is unethical. maybe it was necessary before , but today is just not efficient.


Tax land with a big fat rate (LVT) and give primary residence a big fat exception. Problem solved, and bonus, you can probably get rid of the income tax now.


Then you get a bunch of defaulted and abandoned properties. Cities often have a ton of property that nobody wants and sit on it for decades, and they make a bunch of weird rules that keep people from doing anything useful with the property once they do want it.

The value of the properties would just drop to 0 and you'd get nothing in taxes for it.


? Sounds like the land value is incorrect then. If no one wants it, the land value has plummeted (it being a market at all) which means the taxation should be next to nothing.

If you can't get rid of low-value land that carries no taxation, then the problem isn't the tax scheme.

In reality, this wouldn't happen. Location location location means that valuable land would be invested in, and if the taxation scheme replaced other schemes, a business would be equally likely to pay the tax to get close to customers, but also locate other facilities in low-tax remote areas, which means we're instituting a type of zoning using market mechanisms.

The only time you get abandoned properties in mass is when the value on paper is much higher than the value in reality, and that's a bigger and deeper problem than any tax scheme.


I feel it is more unethical to have single family homes, restrictive zoning, and other things that prevent providing housing on limited land.


Well yes, it's a play at technofeudalism. Good luck stopping it though.


I'd say living within your own four walls is less freedom, because it's harder to move, more time spent for maintenance etc.


Rent seeking has never been considered ethical.


It comes down to our dominant, collective set of values as a humanity. And our dominant values centre on the accumulation and leverage of material/financial wealth. It is the playground of the already wealthy, the aspiration of the vanishing middle class and the dream of the so-called less fortunate, the catalyst of the VC world. (Yes, I'm using broad strokes, but it is dominant, not the only). You are classed by it, judged by it, pigeon-holed by it. Most if not all of our current challenges, be they environmental, climate, ecological, economic, cultural, social, governmental have, at their root, a pursuit of unconstrained material wealth (and unlimited growth and productivity). SO why wouldn't enterprising souls in pursuit of such things see real estate, not as a human right, not as a basic need, not even just a family- or community-centric place to thrive and flourish and be fulfilled in ways other than the accumulation of financial wealth, but simply another "investment" (no matter the external and extraneous accumulative costs) from which to prosper.

Until there is deep enlightenment, until our capitalist-centric values change, until we (the majority we) rise up and say enough and are willing to change our own worldview and our own values in support of "enough is enough", these behaviours will continue to be rewarded and idolized (though many of us believe a forced readjustment, possibly catastrophic, is on the immediate horizon).


Absolutely! commoditization of real estate is the root of the housing crisis! Soon it'll be like all those other commodities, eg wheat/coffee/sugar/tea/oil/corn/electricity. Sugar, you'll recall, was once plentiful, but is now only in reach of the most affluent sugar investors/hoarders/robber barons, since its commoditization in the 1800s.


Overseas investment in something so unproductive as housing is deeply problematic, yes


Yes. But I think that it’s just part of a larger unethical system: the financial system(and it’s incestuous relationship with government). I am pro capitalism, but this is not capitalism. This is corporatism. The whole system is based on growth at any expense to maximize shareholder wealth. Perverse incentives lead to perverse outcomes such as lobbying/bribing the government, destroying nature, poisoning people, war mongering etc. On a smaller scale, this is the real estate market. Endless growth for assets can only come by debasing the currency to cause persistent inflation or by causing artificial scarcity. Both have been happening for many decades. You can see it in those birthday cards for older people where it shows the prices from like the 50’s compared to now. Housing prices are like 10-15x what they were 80 years ago. That is caused by purposeful “target” inflation which experts say is “healthy”. But healthy for whom? Antibiotics are healthy for the ill person but toxic to the bacteria. I feel like the populace has become the bacteria.


The prioritisation of the profit motive above all else is the defining characteristic of capitalism, so I think this distinction of corporatism is not meaningful. I would challenge you to find an era of capitalist economics where profit didn't lead to perverse incentives.


People have been landlords throughout history and renters can only rent if they can pay. Plenty of other generations didn’t have an ability to have their own place so the current people who can’t aren’t special. Each individual’s ethics are not always aligned so there is no one rule to fit all.


> People have been landlords throughout history

Cite? In all parts of the globe or just some?

> renters can only rent if they can pay.

Well, I mean, where the word "landlord" European feudalism, this was not exactly the relationship. The landlord took a portion of the peasants production, but non-producing members of the community still lived on the land too.

I'm not sure what you mean by "special". But it's certainly not unusual for people to exploit other people, sure.


There is nothing inherently wrong with landlords and rent. Anyone that says otherwise is a tankie. Landlords provide a valuable service. But there cannot be perpetual growth in rents like there is in say the growth of a startup. It’s the corporatization of landlords that is wreaking havoc by forcing them to maximize shareholder wealth. A simple solution is to bar corporations from charging rent for residential property. Limit landlords to only LLC’s. No incorporation and under no circumstances should they be publicly traded.


> There is nothing inherently wrong with landlords and rent. Anyone that says otherwise is a tankie. Landlords provide a valuable service.

What valuable service would that be, I wonder. Having a signature on a deed?

Also nice, argument: "my opinion is right and anyone that says otherwise is wrong". x)


See the definition of landlord and compare it to that of a slumlord.

> slum·lord (n)

> a landlord of slum property, especially one who profiteers. "Can you rent to the poor without being a slumlord?"


It takes considerable effort and funds to keep a house not just livable, but well kept, insured, managed, etc. If not for landlords, how else would all of that happen?


Plenty of landlords out there don't take care of these things.


Absolutely! But plenty do. How many tenants out there don't hold up their end of things?


Housing for a fee for a fixed term. There is inherent risk being a landlord that renters don't face.


What valuable service do landlords provide, exactly?

It's my understanding that barring regulatory requirements for standards of living, at their core a landlord is providing access to previously un-utilized monopolized space. That's not really a valuable service, in my mind; maybe it is in the way that 'we'll give you protection from ourselves coming back and breaking your windows' is a valuable service.


See my comment below to a similar concern. There are as many different kinds of landlords as there are people. The value the good ones bring are cared for, affordable places for people to live who prefer to not own a home. Repairing, maintaining, improving, insuring, all take a lot of costs and risks. The government does provide public land in which people can live for free. Why isn't that more popular?


House repair and maintenance is not really what a landlord does, though - they rent land. Perhaps as an added feature they can offer services like repairs and maintenance, but that is not inherent to the "job" of landlord.


Where is this free public land located in the USA?


BLM land. Anyone can camp there free for 2 week.


That's an interesting thought. At first read, I like the concept. I'm struggling to see the downsides here.


You're contradicting yourself.

LLC is a corporation.


Yes, but the spirit of what was meant is that smaller groups could only be the owners. Perhaps a different kind of "corporation" is needed. Maybe one with limits, reporting transparency and other benefits wrt maintaining and improving the property.


There are other kinds of communists than tankies.


As I'm sure you know, these types don't know what they're talking about. Calling someone a "red" is too old-fashioned so some people need a new thought-terminating cliche to toss around.


Got it, let’s change nothing about the status quo since it’s normal


Throughout history, people have smashed each other's brains for a place to live. Let's go back to that! /s


No, throughout history people have waged war over consumables (food, ore, oil).


Read law of induced demand. Real estate is not fixable. It is the way it is.


No, it doesn't bother me because it's a self-inflicted problem.

Low interest rates, zoning laws limiting supply, a shift into urban centers. It's really a perfect storm that pushed housing prices up and just encourage people to speculate. It could have been avoided. More housing could have been built. Government incentives to "get people owning their own homes" could have been better structured to avoid just goosing prices.

People treat houses like investments because, well, they produce returns like investments. If they didn't, people wouldn't look at them that way. You can't blame people for responding to incentives.

The best way to get people to stop buying houses houses as investments is to make them less attractive investments. Everything else will fail. Higher taxes, vacancy taxes, foreigner taxes - it all just encourages fraud, gaming the system, bending the rules. Take a look at Singapore's mess of public housing with built in profits. Every year they roll out some new rule to try and stay on top of it and every year Singaporean's get around the rule because it's just too lucrative not to.

But if you've been around long enough you'll realize it's a problem that will solve itself. Markets correct. People will move where houses are cheaper. Interest rates eventually rise. New houses will get built. New cities will become "desirable" and some old ones won't.

I remember back in 2008 when houses went from "you're a sucker if you don't buy now" to "I'm never owning a house again". It flipped like a light switch when suddenly the gravy train halted. Condo developers in Miami were selling units for $30k and had no buyers.

All this talk of "houses are being treated like a commodity" is just an observation, at a single point of time, at the top of the boom bust cycle. If you take a step back, you realize it's just a blip in time.

It reminds me of the quote from the movie Margin Call: "And it's certainly no different today than its ever been. 1637, 1797, 1819, 37, 57, 84, 1901, 07, 29, 1937, 1974, 1987-Jesus, didn't that fuck up me up good-92, 97, 2000 and whatever we want to call this. It's all just the same thing over and over; we can't help ourselves. And you and I can't control it, or stop it, or even slow it. Or even ever-so-slightly alter it. We just react. And we make a lot money if we get it right. And we get left by the side of the side of the road if we get it wrong. And there have always been and there always will be the same percentage of winners and losers. Happy foxes and sad sacks. Fat cats and starving dogs in this world. Yeah, there may be more of us today than there's ever been. But the percentages-they stay exactly the same."


Unethical but legal means you have no recourse in a land of the law.


It's not so much the commoditization as the financialization. There are deeper assumptions about Western models of financial capitalism which I would question. IMO Free markets are ok for commodities and goods, but free markets for credit are disastrous. There is a reason debt jubilees were common throughout history.


Cheap mobility and remote working will solve the housing problem.


It's problematic. One has to consider occupying a house or apartment if no other valid options are given. Just like certain rights are guaranteed to humans so should be basic needs. You are not a mere function of income and expenses.


HN is getting worse with these kinds of posts.


Your sentiment is valid, but I don't think anyone in this thread knows what the word "commoditization" means.


Yes, deeply and obviously.


Housing is a human right.


> a basic human right to have a roof over one's head?

I had a homeless friend that very much insisted on this. And I happen to agree.

As for degeneration of American capitalism to rentier capitalism, this is also something we need to address. I don't mind e.g. Henry Ford getting filthy rich -- at least he built something.


Worth noting both Adam Smith and Marx agreed that landlords were parasites.


I’m suspicious of the trend the same way I’m suspicious of cooks at restaurants who yak about the food being shit. Or the drug manufacturers who failed communities by driving profits in the sale of opioids.

If the investment vehicle is detached from the people who live in the homes, then I fear we loose touch with the humanity of the occupants. The slum lord is sociopathic. Home real estate investment vehicle yada yada’s will trend systematically in the same direction. A race to the bottom of inhumanities and language similar to real estate listing euphemisms—

‘quaint’ : cramped :: ‘quaint’ : single mother with four kids and drives for snoober.


Yes, 100%.


It's early, so I'm mostly going to stream-of-conciousness this answer, because real estate, and real estate policy is extremely complicated.

Tldr, the solution to housing supply issues to to build more housing. Full stop. If there was ample housing, a decision to buy vs rent would be up to the individual, and all of the talk of how to manipulate policy to allow housing to benefit group A/B/C over group D/E/F would go away.

From what I see, your concern here is about people not being able to afford to "buy a house for themselves because corporations are buying them all", and not on the "corporations that rent houses make people homeless" angle.

First, just in case, I'll address the second. Organizations that buy and rent property do not make people (as a population) homeless. Full stop. Unless they are keeping houses vacant for some other reason, if there are 100 houses, an organization buys them and rents them out, 100 families/groups still have homes. The number of housed people is the same.

In fact, you can argue that rented homes actually decrease overall homeless due to people being more willing to have roommates when they rent a property. Getting a 1 year lease with someone you know through a friend of a friend? Totally reasonable. Going halvies on a house with someone you know through a friend of a friend? Absolutely terrible financial decision. I highly suspect that people who own their home are overall less likely to actively go out searching for a roommate (I wish I had a reference on this)

Overall point, if the goal is to reduce homelessness, you need to build more houses. An organization/corporation renting units does not decrease the available supply. Arguments like "Well, organizations do slow remodels that take units off the market. If an owner owned it, they would live in it during a remodel!". The number of houses that affects is so small it's hardly even mentionable.

To the first point, many people are arguing that the way to do this is to make it so that you can't "profit" on owning a home. In the US, owning property is seen as the path to financial freedom. Enacting policy to actively prevent that will drive many people away from even wanting to buy. If there is artificially limited finanicial upside in buying a property, the math has changed and a lot of people may choose to rent instead. But the policy changes have made it way more difficult to find anywhere to rent. You're stuck buying something, being fully responsible for all of the components of it, and then hoping you can sell it when you need to. Realtors love this one trick to force people to buy/sell homes.

Finally, don't forget that the US already subsidizes home ownership to a large degress in the US. Federally backed mortgages that keep rates on 30-yr fixes terms well below a market rate, FHA programs so people can buy a home with 3.5% down (ie, leveraging thsmselves ~30x), property taxes and interest being tax deductible, 250-500k in tax-free capital gains when you sell a primary residence, and being able to use any improvements to increase your tax basis. None of these benefits exist for renters.

As discussed earlier, the main issue with housing is supply. When you have limited supply, and programs that are designed to increase demand, prices are going to go up. Whether there are startups/corporations involved or not.


Like another comment here mentioned, housing is complicated. People don't want to live in a random house in the middle of nowhere ('roof over your head'). Some people prefer to be homeless on the street versus getting to a roof over their head that they don't like.

People want to live where they want to live (near family, jobs, culture etc)

Take NYC for instance. Politicians try to address the NYC housing crisis from a demand/cost perspective. Rent is too high? Let's just screw the property owner and cap the rent. Or let's just raise minimum wage to make it easier for people to live in those properties.

The result in both cases: you didn't have enough housing before, you don't have enough housing now. You give more money to people, rents will just go up. You cap the rent, there's still a huge number of people that can't live where they want and you make it impossible for existing tenants to move (or for new/more development to be built, for that matter)

So, what instead? You want to build more housing in NYC? Great, that should work. But you have to make it cheap. Deregulate construction, get rid of unions, prioritize developer rights over tenant or homeowner rights. What? You don't think these are good things? Okay, but then you'll have to sit back and watch new construction trickle in and result in 'luxury' housing because that's the only way a developer can recoup their enormous land acquisition, regulation and construction costs. So the challenge with housing is that it requires fundamentally difficult decisions. To pretend that you can just spend 100 billion (or even a trillion) and the problem will be solved and people will be happy, is an illusion.


I would start by making property taxes substantially higher for non-owner-occupied property. If you are rent-seeking rather than residing on the property you should pay way more, maybe 4x or higher, in taxes.

Housing prices would crash and that would be the point; but everyone who owns property would be against it because they don't want to see their assets drop in value.

The counter-argument people make is "that would de-incentivize investment which would reduce the future housing supply". But I call b.s. on that. Residents would be able to afford new construction and maintenance if those things had lower price pressure.

It should raise the bar on an investor attempting to profit by owning property. They should need to do a substantially better job at maintaining and increasing the value of real estate to justify owning it instead of a resident.


The biggest thing missed when proposals like that is that not everyone wants to (or does it make sense to) buy a property. Making it 4x more expensive to own a rental property means that rent will be 4x more expensive for those that have to rent.

If I was moving to NYC for 6 months, or 2 years, there’s no way I want to spend tens of thousands of dollars buying-and-then-selling a property.


Not true, but I'm a Georgist so would be against the GP's targeting non-owner tax. Tax everyone according to the value of the unimproved value of their land.

I can show you plenty of places with $3k+ rents in SF with prop 13 property taxes that have not changed their tax meaningfully in decades. Taxes have absolutely no effect on what the renter pays. The tenant is always paying the land value. It's just going straight to the landlord if you don't have a land value tax, and it goes to society if you do. If you are going to buy a valuable property, why do you need to pay twice[0]?

If you adjust the land tax such that it equals the accruing land value, the price of land becomes zero. The local government can then use that tax money to do all sorts of things[1]. They can also use that as a way to reduce other taxes. Get rid of sales and income taxes. The Henry George Theorem states that a land tax should be able to solely fund governmental services. After all, all taxes come out of rents, so if you tax income, then that disincentives work, so you get less work. If you tax buildings, you get less buildings. If you tax land, there's always a set amount, so there is no harmful effects.

[0]: https://www.youtube.com/watch?v=kxvXzM1mBWo

[1]: https://www.youtube.com/watch?v=KVMGzkSgGXI


"Taxes have no effect on what the renter pays"; by this I assume you mean "market rate is market rate regardless of cost". Sure, to a point. The tax situation of my individual property does not impact the market rate. Just like how the market rate does not change if there is a mortgage on a property, or paid-in-full.

If the entire market is faced by a new tax all at once, you will see rents rise. Costs across the board went up, and every property owner isn't going to operate at a loss.

> Tax everyone according to the value of the unimproved value of their land.

Sure. This is the exact opposite of what the parent post was suggesting, where they suggested taxing people different based on the use of the same land improvements.


No. Renters are paying for the value of the land and the improvements. If the rental price of the apartment is above that, they won't pay it and find another place. If there are no places they will go homeless. Since landlords are already charging for this value, an increase of taxes does not increase the rents.

> every property owner isn't going to operate at a loss

So they will then sell. But who would buy at current prices? The main effect of a change in tax rate is a one-time change in the market price of the property. Someone won't be under water if the property was $1. The market will find a new clearing price.

I'm sympathetic to current owners, and this is why I prefer to combine the implementation of the Land Value Tax with a Land Tax credit equal to the existing value of the land to the deed owner. This will allow everyone to be net neutral over the transition period, and would even be net positive as the risk of ones property value dropping in recessions would go away.


> If the rental price of the apartment is above that, they won't pay it and find another place. If there are no places they will go homeless. Since landlords are already charging for this value, an increase of taxes does not increase the rents.

Nope. Sorry but that's not how it works.

If the landlord has to pay 4x tax they will pass some (all) of that increase to the renter. Also, a 4x increase in tax != 4x increase in rent.

So, say the property is worth 1mil$, and you pay 1% tax. That's 10k. You charge 3k rent. The taxman makes the tax 4%, now you have to pay 40k. You decide to pass 30k to the renter. So now they pay 36k+30k rent per year. 4x tax, 2x rent.

If a landlord does this, sure. Renters find a new place. No brainer. If all landlords do this, the renters arr fucked. Finding a new place will not save you. In effect you make it way worse on the renters.

The solution to the housing crisis is not some trick involving taxes, rent caps, adding more rules etc. The solution is simple: build more housing. That's the only thing that will work and will bring down the pressure.

We also need to stop conflating affordable housing with home ownership. If you are having trouble finding a place to rent you can afford there is no way you can buy a house. I feel like the HN bubble w/ our high sky salaries is somewhat disconnected from what the average person can actually do.


"If the landlord has to pay 4x tax they will pass some (all) of that increase to the renter. Also, a 4x increase in tax != 4x increase in rent."

How much of a tax gets passed along to the consumer is modeled in an introductory macroeconomics course. It depends upon the elasticity of supply and demand. A tax falls primarily on the side of the transaction with the lower elasticity, because they are less able to adapt behavior to avoid the tax.

https://www.khanacademy.org/economics-finance-domain/microec...

The reason economists like a land-value tax is because the elasticity of supply for land is effectively zero: there is a fixed amount of land, and regardless of what the tax rate is, landowners are either going to seek a return on their ownership or will sell it to someone else who'll get a better return. Elasticity of demand is pretty low too, but it's not zero: people can double up with roommates, move in with families, or become homeowners. So a tax on unimproved land ends up falling almost entirely on the landlord, with relatively little long-term impact on rents.

In practice, we're likely to see pretty severe reallocations of land and short-term price dislocations, as existing landowners find that their usage is not productive enough to pay the tax and so they need to sell to new firms who will use the land in different ways. But this is working-as-intended: the goal of an LVT is to incentivize better usage of land through high-density development of desirable parcels, individual homeownership (when density makes sense), and commercial activity.


[Pardon me if I don't have a lot of respect for economists and their crackpot theories (remember 2008? What about the current inflation generated by printing money like there is no to more?)]

There are at least two problems with your logic: if you take all the land you can make the claim about the elasticity of supply, but not all land is created equal. Location, infrastructure, usage all factor into this. Taking the example of unimproved land. If I buy a piece of the said land near a town and don't use it for anything I just pay the tax on it and effectively lose money, right? What if the city builds infra near my land that makes it effective now to develop? Should I pay more tax now? It's still unimproved. Should I pay more tax in case of a rezoning if I could potentially build a house but I don't? See how I actually created one class of land by substracting from another!

If I can buy and afford (ie have the capital) to hold land for the long term + I can see where new developments are going to take I will be incentivized to hoard land. I can also make the case that it's undeveloped and I should pay less tax.

Now there is land that just sits there when it could be used for farming. Now we are having food and housing shortages.


That's why it's a land value tax, on the unimproved value of the land. Not all land is created equal. Land that's out in the boonies, which nobody wants, is going to have a low value and hence low tax. Land in a downtown area, close to all the amenities, transit, parks, etc. - will have a high value and high tax.

To answer all your questions:

"If I buy a piece of the said land near a town and don't use it for anything I just pay the tax on it and effectively lose money, right?"

Yup. Don't do that.

"What if the city builds infra near my land that makes it effective now to develop? Should I pay more tax now?"

Yes, you should.

This is actually one of the biggest arguments for a LVT, and it has three angles. The first is moral - it's society that's building the schools/parks/transit/infra that made the land value go up, so it should be society that reaps the benefits. After all, the property owner didn't pay to build that subway stop, they just got lucky and got to free-ride off of public benefits. It makes sense that the returns for building public infrastructure go back to the public in the form of additional tax revenue, which they can use to fund maintenance and new infrastructure.

The second is the economic flip-side of this: an LVT provides an incentive to right-size the government. Without this economic feedback loop, there's no check on public-sector spending tax revenues in inefficient ways. Who cares whether a new transit stop benefits residents vs. provides a boondoggle to contractors, if the benefits to residents are all captured by landlords rather than either the residents or the government? But if further public funding is contingent upon raising rents and hence tax revenues within the city, the incentive is to spend money in ways that will actually make the city more desirable and justify those higher rents.

The third economic argument is on individual landlords and developers. An LVT discourages speculation - if you're sitting on that unimproved lot and not getting any revenue from it, you're still paying taxes and will eventually go broke. Your incentive is to sell it to a developer who will build more housing on it, so that more people can enjoy the public amenities that made the land valuable in the first place. Leading into your next question:

"Should I pay more tax in case of a rezoning if I could potentially build a house but I don't?"

Yes. That's how you ensure that land is fully utilized and people who need housing can get it.

"If I can buy and afford (ie have the capital) to hold land for the long term + I can see where new developments are going to take I will be incentivized to hoard land."

It's the opposite way around - you're disincentivized from hoarding land, because you have to pay taxes on the land that's not cash-flowing. You're incentivized to sell to the people who are actually going to build and buy those new developments.

"I can also make the case that it's undeveloped and I should pay less tax."

You can also make the case that the government should just give you money, but in both that and your example, you'd be wrong. Everybody pays the same land tax, based on the unimproved value of the land. A developer who built an 80-unit apartment complex on 2 acres might pay $200K/year; a speculator who sits on 2 acres of undeveloped land also pays $200K/year. The difference is that the developer might be pulling in $2M/year and making a profit of $1.8M/year, while the speculator is slowly going broke. That and the developer is providing housing for 80 families while the speculator is doing nothing useful.


>> "What if the city builds infra near my land that makes it effective now to develop? Should I pay more tax now?"

> Yes, you should.

Doesn't this make NIMBYism even more tempting? I've got to be against any changes near my land, because it's going to increase my taxes and push me to move. In addition to not liking change in general.


Depends if you assume people are rational.

A rational economic actor would not be a NIMBY under these conditions, because the increase in land values exceeds the increased tax they would pay, and so they could always sell their property for a profit and buy another one farther away from infrastructure if they don't like it.

In reality, people are change-averse and irrational for a variety of reasons, chief among them emotional attachment. So it wouldn't surprise me if people resist development in practice. A lot of NIMBYism is already of this vein - upzoning a property usually increases its value (because it can be redeveloped into more units), but is also frequently fiercely resisted by existing residents who won't sell at any price.

Note that a system can be rational even if participants are not - capitalism is, because actors who are irrational eventually go bankrupt and are forced to work for actors who are economically rational. That doesn't stop it from being unpopular, which, again, capitalism is. Many of the political issues getting an LVT adopted stem from this.


How is the value of unimproved land determined in places where there is no nearby unimproved land to compare with. For example, how would I determine this value in lower Manhattan?


You run a regression on the value of all the improvements, then subtract that from the sale price to get the value of the unimproved land. Smooth that over the per-square-foot value of neighboring properties and you can have a pretty good estimate of for the unimproved value of the land.

If you have a hundred thousand properties to collect data on, you can get a pretty good idea of "a 3BR unit increases the value of the property this much, a 2BR unit increases it by this much, X feet in height result in this change in value, per parking space the value increases by this much". Sophisticated real-estate investors and the banks that fund them are running this calculation anyway, that's how they know which properties are good deals. Once you have a formula for this, you plug in the stats of the property in question to figure out the value of the improvements, and then the unimproved value of the land is everything left over.


> So, say the property is worth 1mil$, and you pay 1% tax. That's 10k. You charge 3k rent. The taxman makes the tax 4%, now you have to pay 40k. You decide to pass 30k to the renter. So now they pay 36k+30k rent per year. 4x tax, 2x rent.

The price of the property is based on the return that the landlord can return. This should be obvious.

If you increase the tax by 4x, the most likely result is the market value will drop from $1 million to something like $250k-500k. The renters will be paying the same value. The new owner will have the same ROI that the previous owner had. Just different buying price and lower return per rental.


Or they sell it to someone for $1 million who is happy to live in it and pay the 1% tax without renting it out. (It may decrease in value some as it's no longer attractive as a rental property--especially if it isn't setup ideally as a home to live in.)


Not only that, but if I can afford it I will now buy all the land around me to insulate myself and make sure it doesn't get developed.

Also, what people don't get is that the same people that set the tax are the people that have the land and the political and economic power. Why would they do something that goes againt their best interest? We're all cool and open to all kinds of things until it happens in out backyards.


> If you increase the tax by 4x, the most likely result is the market value will drop from $1 million to something like $250k-500k.

Not really. This assumes it must remain a rental property.

What will happen is that this $1M property which was previously a rental now becomes a ~$1M property which is owner-occupied. The owner isn't going to take a 500K-750K loss just to keep it a rental.


So completely destroy the rental market? Do you really want a city where the only way you can move there is to full on buy a housing unit?


>No. Renters are paying for the value of the land and the improvements. If the rental price of the apartment is above that, they won't pay it and find another place.

Then why are investors a problem?


If investors are investing in apartments for people to live in there is no problem.

If investors are investing in land and leaving it empty waiting for the local city to build valuable infrastructure around them before they sell it, that's a major problem.

A land value tax will see the former do better and the later to do much worse.


Do capitalism!

No, not like that.

As a society we need to decide if we want to have the cake or eat the cake. If I own the land, I own the land. The city has a responsibility to consider this (and many other things) when developing infra.

There are a multitude of levers that can be pulled to deincentivize this behavior, but the tragedy is that the people who benefit from it are hand in hand with the people that make and apply the rules.


> Since landlords are already charging for this value, an increase of taxes does not increase the rents.

This seems to assume that a rental property is forever a rental property and will continue to be rented at market price no matter what.

But that's not true. It's only a rental property if the owner can rent it out and not be losing money. If the conditions change (like taxes on it) so that's it can no longer be profitable, it is taken off the rental market (most likely by selling to someone who wants to live in it).

If that's one unit, no problem, the renter can go elsewhere. In the proposal being discussed where all rental units have a 4x tax increase, this applies to all rental units at once. Rent prices go way up and most rental units disappear from the market.


Ah, this is true. Targeting a certain specific thing in a market will cause distortions.

This is why I am for the value of all land being taxed. No distortions.


Well said and interesting. Part of the problem with change is that there are always negative effects somewhere, but the answer should be to address those negative effects... not to postpone change until a mythical no-negative version is found.


probably the main negative consequence of any real estate regime change would be the destruction of incredible amounts of (paper) wealth. if you're going to reduce the market price of real estate, you're going to devalue one of the most foundational assets in the economy.

but, that's the point. you can't reduce real estate prices without reducing real estate prices.


Destruction of wealth would be bad since that would impact everyone (homeowner or not). I would opt for wealth transfer. Build more housing! Once the demand decreases the price will decrease. This also solves another fundamental problem: we pretend that there are X houses and X people that need a place to live. In reality there are more people than houses. Way more. Build more houses. Build high density housing. Stop treating housing like some sort of holy grail investment.


Landlords are price takers. Rental supply is completely fixed in the short to medium run. Landlords can’t change supply when faced with a price shock, which means that rental demand is the only factor that effects prices.a landlords goal is to rent all of their properties at the highest rent they can get, a tax hike doesn’t change that.


> Taxes have absolutely no effect on what the renter pays.

Of course taxes have an effect on the rent price.

If the property tax is very low and the market price rent for that unit is very high, you're right, the owner will charge the high price and pocket the difference.

But the reverse is obviously not true. If the property tax is quadrupled (as per OP proposal) and now the rent no longer covers the ownership costs there are only two possible outcomes: the rent goes up to cover the costs, or, if nobody is willing to pay the new higher rent the owner sells the property off to someone who wants to live in it instead of renting.

The latter is good if we want to incentivize home ownership for everyone. But it does take a former rental unit off the rental market, so if there are people hoping to rent a place, it's bad.


> Tax everyone according to the value of the unimproved value of their land.

Why ?

How do you figure the unimproved value of land ?

There is so much land in this country why do we have to fight over the coastal regions ?

Why not incentivize building out other areas and creating population hubs ?


If I sent you a picture of a home, and I asked you what it was worth, you wouldn't be able to answer me until I first mentioned it was in the middle of SF or if it was in the middle of the Arizona desert. The majority of urban values are not the value of the improvements but the value of the land.

The value of the unimproved value of land comes from your neighbors. It comes from your city. When roads and sewers and train stations are built, the value of being close to that infrastructure is given to the existing landowner. By properly returning this value to the city that created it, it gives them funding that they can use to build more infrastructure.

Eventually with a Land Value Tax is in place, what you propose of building new cities will happen. If you treat a city like a company, we might even see investment companies funding new cities. They make an investment of an infrastructure, get a profit, then they can use those profits and give back to their shareholders - the citizens. Or they could use those profits to build another city. The existing paradigm doesn't allow proper investment.

Right now they only charge for their costs and let the landowners take their share while the renters don't see a dime. Imagine if a company was not allowed to make a profit, and could only sell for a cost. That's exactly what happens with real estate today. They let landowners sit on empty lots that appreciate while they do nothing. They incentivize minimum parking requirements and single family zoned cities.


If I sent you a picture of a vacant piece of land in the middle of New York City's best neighborhood and asked you what it was worth, could you answer me?

You wouldn't be able to until I told you what kind of home you are allowed to build. If I only allow you to build a shack or make it a park you won't be able to extract any money by renting it out and thus you wouldn't buy it at any price, even though the neighborhood should command a steep price. If on the other hand I allow you to build a sky scraper of n storeys high, you will now be able to given other information on rents in the area that people are willing to pay.


Yes, land use is one factor.

What is interesting is that the dynamic actually flips once there is adequate zoning. Take a look at this[0] video on Tokyo zoning and how he talks about living in an industrial zoned area. He talks about how it's cheaper to do so, and if you want to move to a single family zoned area, it's actually more expensive!

Under the current system, landowners want their own land to be zoned as high as possible, while they want everyone else's land to be zoned as low as possible. Since 1 < everyone else, when people vote on zoning it is zoned as low as possible. With a LVT the system flips, everyone wants their land to be zoned as low as they desire, and they want everyone else's land to be zoned as high as possible. They would only accept land zoned restrictively if those people would pay higher taxes for the exclusive use of it.

This is a system with proper incentives.

[0]: https://www.youtube.com/watch?v=wfm2xCKOCNk


I don't see how one follows from the other.

In either system living in an industrial zone (or on the edge of it) will cost less as it is less desirable to live there (noise, air pollution, smells, further from grocery store, no parks etc) and nobody in their right mind would pay high rent there. Nothing to do with land value taxes.

Zoning changes what people will build there (we assumed it was even legal to have housing in an industrial zone there). If you rezone a residential area industrial and make it illegal to have housing there guess what will happen (assuming there's demand for industrially zoned areas)


Your argument is that places that are zoned lower are worth less, and places that are zoned higher are worth more. That's only true in the existing paradigm.

What would be true in the new paradigm is that places would only allowed to be zoned lower if people are willing to pay for that exclusive access. It's not just industrial areas, all higher zoned areas would be cheaper than lower zoned areas.

Land Value Tax incentivizes proper zoning, as the more scarce the housing is, the higher the tax. Proper zoning(like Tokyo has without a land value tax) flips the structure.


That is not my argument at all.

In fact the residential zoned houses at the edge of the industrial zone are worth less potentially than the industrial piece of land on that edge. (maybe not, because residential neighbors will get complainy ;))

I am saying that I don't see how a land value tax does what you propose. I had no idea what that even was until I read these posts and looked it up.

I don't see what you mean by zoned "lower" and "higher" actually. I can zone the land for another New York City in the middle of flyover country and that doesn't mean people will come just like that. The price this will command will be super low because there's nothing there (this is actually part of your land value tax system's reasoning). If I can find someone interested at all.

If instead I zone it agricultural I can sell it depending on vicinity to a small town, how flat it is (mountain side? No thank you for big agri, only small homesteaders will pay you a little at all). Flat and great soil near other agri infrastructure? Now we are talking pricy!


The value of the land is based on

1. The inherit value of the land - rivers, gold or oil being key examples.

2. The nearby infrastructure

3. The zoning policies

4. The community and commercial services

If there is land zoned for another NYC, with the infrastructure of NYC, including the excellent port access, it would very quickly become worth what NYC is worth as people showed up. We see this with the pop-up cities in China after they reach completion. Though no doubt some will stay in ghost status forever.

It is up to the local government to do what they can to make the most of their land, just as much as it is up to the landowner of an individual parcel to do what they can to make the most of their land. The city is incentivized to zone the area so that it is valued highest. If they do a poor job of that, that is on them.


I completely agree with that last post's reasoning for why a pop-up city might stay empty or become another New York.

I don't see why it needs a land value tax and having one causes anything. All the things you are putting into your land value calculation cause that. Not the tax.

Now don't get me wrong. I'd love me a land value tax as it would probably mean I'd pay less for where I live. But that's it so far. Color me unconvinced otherwise.


Yep, this is a very natural way to think and why Georgist policies have not been enacted.

I'm a programmer, as most are on this website. The thing that mostly interests me is when incremental changes don't lead to global maximums. As are most who study AI and say, Agile development. When is it that prisoner's dilemmas occur?

I pay attention to things like programmers who fix the bug they introduced fix the bug at a deeper level[0], I pay attention to Simple Made Easy[1], I pay attention to the systemic effects[2].

I point out that the Land Value Tax is so simple and yet fixes so many things. It fixes an inherit problem with society at a deep level. You need to pay attention to the incentives and how they mold the eventual outcomes. Land value taxation leads to correctly aligned incentives.

[0]: https://news.ycombinator.com/item?id=28128729

[1]: https://news.ycombinator.com/item?id=4173854

[2]: https://youtu.be/PCwtsK_FhUw


Are there any canonical examples / cities you can point us to where this approach is being taken successfully?


A full land value tax has never been tried.

Currently the closest example is Singapore[0], but they have much more central control than what a Georgist would find ideal. 99 year leases are far to long, and shorter leases would have much more beneficial effects.

Detroit was an example of a city that massively expanded[1] because of it, but eventually lost it's way.

Harrison, PA[2] is an example of a city that 'recently' used a revenue neutral split-rate system to keep from going bankrupt.

[0]: https://progressandpoverty.substack.com/p/singapore-economic...

[1]: https://www.dollarsandsense.org/archives/2013/0813clevelandg...

[2]: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...


4x higher tax, not 4x total cost. First housing prices would crash, so rental prices would also drop. And they wouldn't go up 1:1 with tax increases. They would go up by some percentage which is fine. It should be a little more expensive month-to-month to rent vs. own. Renting should still be available, but a lower proportion of housing should be rentals.


“It should be more expensive month to month to rent vs own”

It already is. There are many tax incentives geared towards making owning cheaper. If owning was t already subsidized do you really think anyone would be handing out 4% 30-yr fixed rate mortgages like candy? Removing these would also make housing prices crash, which would lower both purchase cost AND rent, yet I don’t see many people pushing that idea forward (because it also makes it almost impossible for most people to buy)

The “I think people should own property, so I’m okay making it more expensive for people who don’t” is bullshit.

> a lower portion of housing should be rentals

Without numbers (the baseline you’re considering as true, and the number that is “acceptable”) this is just trying to impose a specific viewpoint without any data to back it up.


In Canada we don’t have 30 year fixed mortgages, the longest I have heard of anyone getting is 7 years and that’s me. Despite not having cost certainty in the long term we have the same property market issues as every other desirable place to live.


Those mortgages are still subsidized though. A 5-yr term before it adjusts, with upward protections on rate increases is still not what a "free market" would provide. These are government sponsored (in some way) programs to increse demand for homeownership without a corresponding investment in increasing supply.

Housing being used as a bet on appreciation, which fuels buying, which causes appreciation is best solved by building more housing. The way to make housing cheaper (or not be a speculation vehicle) is to build more housing. Full stop.


7 year fixed mortgage? Do you pay off in 7 years or does the rate readjust?


The loans are fairly close to an ARM in the US, and they're amortized on (typically) 25yr. They also tend to have prepayment penalties, which the US does not have for residential mortgages anymore.


I was commenting on monthly cost. Upfront cost for owning is much higher. Compare a mortgage down payment to a rental deposit.

How much more expensive proportionally matters; it should be up for discussion democratically.

To own property is to accept responsibility for the land, architecture, and legal liability. If you abdicate that responsibility to another party you should pay for a service; and the bar should be high for the standards of that service.


> If I was moving to NYC for 6 months, or 2 years, there’s no way I want to spend tens of thousands of dollars buying-and-then-selling a property.

There's no fundamental reason real estate transaction costs should be what they are.


When it comes to realtor prices, you're absolutely correct. It's ludicrous that that effective monopoly has been able to persist.

There are other costs and risk though. Many places that have transfer taxes, plus inspection costs, appraisal costs, title insurance costs, and loan origination costs.

You also have to accomodate the risk or some major issue in the 1-2 years you're living there. "Saving some money over rent" doesn't necessarily justify the risk of having to cover costs for HVAC/electrical/plumbing work that has to be done.

If you have a bunch of properties with no stable ownership, where the buck will just be passed to the next person every couple of years, properties will fall into disrepair (moreso than they do now), and temporary bandaid fixes will be (more) or the norm.

Ie, I don't believe short-term property ownership is good for the property long-term.


> transfer taxes, plus inspection costs, appraisal costs, title insurance costs, and loan origination costs

Those other costs should be driven to a much lower floor as well. The majority could be automated, and likely are in the process of being (e.g. loan origination costs).

Essentially the only fundamental cost should be inspection: which is ultimately the buyer (and their lender) offloading systems assessment onto a third party. Who, if you read the fine print for inspectors and case law, is generally not legally liable if they miss something.

> some major issue

The solution to property maintenance seems surmountable. Require it for dense, neighbor-impacting scenarios (HOA, etc), and fund it via loans against the underlying asset (HELOC or home equity loans).

I'm sympathetic to your point, but I don't think it takes primacy over enabling individuals to own their own home.


This falls flat on its head when you consider that this would force a bunch of people in becoming small time landlords, with the inability to invest in their skills and competency by scaling up to multiple properties. Barely anyone would be interested in running multi-family real estate and they would migrate to commercial real estate. What would remain for residential is low density condos and shitty small time landlords with variable understanding of the expectations of their role, and variable notions of what's legal and what's harassment. Anything high density is too expensive (in time and capital) to do as a "coop" style endeavor and this means no high density residential would occur unless its luxury and expensive rent, to make up for the substantially higher taxes.

I'm sorry but you can't make more housing appear by simply raising the barrier of entry and throwing sticks in $INSERT_EVIL_GROUP's front bicycle wheel. Ultimately, things need to be cheaper and easier to build, and this will come at the cost of some people's freedoms (expropriating their land for redevelopment, displacing people for redevelopment, preventing bike shedding about neighbors' preferences).

It's easy to take a dump on so called rent-seeking landlords. But picture yourself becoming a landlord; imagine you're this newly minted, high spirited multi-family property owner and you want to do good for your neighborhood without becoming a charity and ruining yourself. Then look at what your options would be. In many US urban areas, there's already a lot of regulation in place that would drive you mad in your inability to make things better for your tenants and yourself in a sustainable manner. The rules literally push you into what you're seeing in the rental market (crappy apartments with high rent).


But the underlying point here (I think) is that people owning one home is higher priority than owning multiple homes. I’m not contradicting either of you, but it feels like you responded to a different question.


I don't disagree (favoring personal ownership over multiple ownership), but then I'm not sure how this works out. Single-family homes everywhere? It's causing housing problems due to sky rocketing prices due to low density. So I think it's accepted that we need multi-family homes, to gain higher density housing. Ultimately skyscrapers, but in most case a few units per building. In most jurisdiction, the cost of developing a unit goes up the less dense the project is, so economical units sort of by definition mean packing more units per project.

It works out if high density housing is built and then all sold as condos. People could pool together and buy land as a coop-style group, and then develop it as high density housing. But then its facing organizational hurdles (coop-style orgs don't have the best outcomes) and the whole thing need to survive years long timelines (to design, permit and build) while staying focused to avoid cost avalanches. Good luck!

I don't have an agenda in this (unlike other commenters suggested) and would love to discover a better way of doing all this. I think the current system is flawed but I don't hear convincing alternatives. And what's there right now is better than a feudal system, that's for sure... Hey, back then, Lords were owner occupiers! How has that worked out for the peasants?


I live in Norway, and it seems to work just fine. The density isn't all that high compared to, say, NYC, but anyways there definitely are plenty of multi-unit apartment building, which suffer from the same organizational problems, that manage to survive fine as individually owned units. I am not qualified to speak too much on this, but anyways it's certainly a solved problem, and there should be plenty of templates from other places to build off of.


Are they also built and developed as a group, or is it via a main developer who buys land, builds the building and then sells the individual units? If that's so, the same sometimes exists here, but because regulations, zoning and permitting is so limiting, lengthy and onerous, the units built end up being prohibitive and quite limited in numbers. Which really doesn't help much solve the problem.

Hence why I think the issue isn't about taxing more for stuff like "not owner occupied", but more about the opposite: make it faster and easier and cheaper to build high density residences. Then prices will fall and the affordable market will be served by smaller developers.


Why isn't there a downvote button? Such an agenda.


You're funny, I have no agenda. I'm a new owner of a triplex, always been a renter before, and we occupy one of the units. I'm just learning this as I go, but the economical dynamics are playing out in front of my eyes and I'm confused at the conflicting policies from local governments. Give me a chance and perhaps believe me if I say I just have honest and good intentions, and this is based on what I'm seeing as I explore this path? Or you can dehumanize me and pretend I'm some villain.


So you admit that you do have an agenda...


I have biases of course, but I don’t see what my agenda would be here? What is it that I’m plotting or trying to influence? Tell me what my agenda appears to be?


>but everyone who owns property would be against it because they don't want to see their net-worth drop.

They would be against it because it would mean they can never move, since they are now underwater on their mortgages.

Most people who only own one property don’t care about its impact on their net worth unless they are planning on downsizing, since they can’t just liquidate the house to purchase other things as they can with other assets.


It depends on where they want to move. For national policies prices should drop nation wide, ergo people would still be able to move inside the same country (probably 99% of relocations).

And if they don't sell, they wouldn't care much. Yeah, annoying, but as long as you pay the installments, not much changes in practice.


>For national policies prices should drop nation wide, ergo people would still be able to move inside the same country

No. Suppose I buy a million dollar house at 20% down. I thus owe $800k in principal to the bank. I live in the house for a few years, and build up $100k in additional equity beyond my down payment.

If housing prices stayed the same, I could sell the house for $1M, use $700k of that to pay off my remaining principal, and use the remaining $300k towards my next $1M house. (If housing prices appreciated by 20%, I have $300k in equity and $200k in profit to put towards another $1.2M house.)

Now suppose the housing market crashes by 50% and my house is worth $500k. If I sell my house for $500k, I still owe $200k of principal to the bank. I don’t have any leftover money to go towards another $500k house, or even a $0 house; instead, I have $200k in debt that buys me absolutely nothing.


Are there any financial products to help with this situation; ie allowing you to take out an $800k loan on the new house? Presumably this wouldn’t be any riskier for the bank than simply continuing to own the old underwater loan. Possibly less risky since the homeowner, living where they wanted to live, would have less incentive to simply walk away.


The whole situation is confused; banks often have quite the ability to "go after you" for deficiency but in actuality they rarely do.

And in some states, such as California, on the original purchase loan they cannot; it's non-recourse.

But they sold your loan long ago, and trying to "do the math" and resell a new underwater one doesn't work.


The key component in this scenario is that the owner (debtor) is taking 100% of the value decrease, while the mortgage lender is taking a 0% decrease.

In the event we implemented a market-wide adjustment, presumably we'd suspend business-as-usual to more evenly allocate that through the transition.


As others have said, this is an absolutely terrible idea and highly destructive to renters. There is simply no reason to boogeyman real estate investors so long as they are renting out the property. Renting is no less valid a form of housing than ownership and policies like you describe are already in place in many jurisdictions such as Ontario and it is already as we speak harming renters.

For all the people saying "it doesn't matter how much you tax landlords, the market rate is what the renters are willing to pay", don't be silly. Just take your argument to the extreme then. Why stop at 4x, why not charge 10x, 100x, or 1000x? Obviously as you raise taxes on landlording, the number and/or quality of rental units will go down and/or the prices will go up.

See Oh the Urbanity!'s recent video on the topic https://youtu.be/q3gtZcTdXaI


> Renting is no less valid...than ownership

I think ownership is better because people value securing the shelter where they sleep. Renting is worse because you can't make decisions about how to improve land and architecture. You are only permitted to be there under a limited contractual agreement vs. being able to stay put until you decide to sell.


You are welcome to think that. But it is an opinion, and not one shared by everyone. Both are equally valid options; in my opinion. I've been in times of my life where owning was better for me. I've been in times of my life where renting was better for me. At the times I was renting, I was very grateful for the landlord I had at the time (mostly; I've had a small number of landlords I did not like); they take on the risk and responsibility that wasn't something I wanted to deal with at the time.


People tend to talk about two different things when they say renting: control and affordability.

Anti-renting people emphasize the control inherent in the relationship. Landlord sets the rules, including price; tenant required to abide. (Attempts to address the market by regulation here have had their share of severe side effects)

Pro-renting people emphasize the affordability and ability to offer housing to those without access to the capital to purchase, as well as the shift of asset risk (physical and market) from the renter to landlord.

The central evil seems not the existence of renting, but the ability of a landlord to capture underlying asset appreciation and charge rent.

Coupled with areas of constrained supply, this leads to landlords getting richer and renters... not. Which seems unfair.


You are welcome to think that but your wrong and have some weird agenda


Many people expressly do not value the things you claim, you are projecting your preferences on to people at large. Renting transfers many costs, risks, and hassles to the landlord, which is a desirable arrangement for a significant percentage of people. It is not uncommon for people to strongly prefer renting even when they can easily afford to own a place to live because it is a better use of their time and money.


> Renting transfers many costs, risks, and hassles to the landlord, which is a desirable arrangement for a significant percentage of people.

Agreed that it transfers risks and hassles to the landlord. It doesn't transfer any costs though, as they'll be bundled in the rent price.

Renting is like using AWS. You pay for the convenience of someone else taking care of the hardware, but they're making a profit from providing that service.


Instead of supposedly basing rental figures on median home values, which is highly non-objective, just make the public tax data more transparent. When people can see the relationship between taxes and prices, they can ask the right questions and make their own decisions– through policy changes in their locale if necessary.

What works in small town USA won't necessarily make sense in a Big 6, unless it affects huge national investors like Blackrock but not your small landlords or medium multi-family dwelling manager/owners.

Also, "tax them? might as well kill them!" is the type of nefariously silly exaggeration that is used to shut down discussions. Yours doesn't go quite that far, and I get the point of your example but don't find that limits of infinity are generally helpful.


Yeah, Vancouver BC actually is creating policies like taxing unoccupied housing at a higher rate, instituting a tax on the sale of homes to foreign buyers, and further regulations around real estate "commoditization" and these are effective tools. I don't know why people say it's a difficult problem. Cities are actually just looking the other way.


I find that a lot of the criticisms of taxation and better housing policy are boiled down to the bad faith, we can't try anything because it's too complicated, but really they mean this is going to cause me or my rich friends problems so don't do it.


Even better when an alternative proposed solutions is “give me and my rich friends more power”


So basically a commonsense policy which the entire world has trouble implementing but it should. Nice.


There is a 10% tax when buying a house for renting (ie each house after the first one) in the Netherlands. It did stop some people from thinking of buying a house (like my wife) but there is still a huge shortage (and speculation/investment) so it didn't solve the problem. OTOH comparable per meter prices are way lower than London or Frankfurt


Wouldn't that mostly just increase the rents? I.e. the landlords can offload the extra tax to their clients (renters).


That would be true if rent was a percentage on top of cost. But it is not, it is whatever maximum renters are willing to pay.


How come rents for high-end real estate in Paris are vastly higher than in London? Sales prices on the other hand are vastly lower.

Are the prices so high because people in Paris are willing to pay much higher rents more people in London? Or are they so high because renting in Paris is super risky for the landlord due to aggressive tenant protections?


So to be clear, are rents in Paris vastly higher in general, or just for "high-end real estate"? If just the latter, then great, sounds like the policies are working.


Oh, rents in Paris are sky high regardless. Renting is also super difficult because landlords are terrified of tenants.

It’s just easier to compare the high-end of the market because offering is similar and concentrated in central areas, whereas lower-end real estate is scattered across lots of very different areas.


It's whatever maximum renters are willing to pay, combined with whatever minimum property owners are willing to accept and the availability of alternatives.

Applying a cost increase across the board, in a way where everyone knows it was across the board, will reset the market floor. If California (just as an example) can out and said "There will be a flat $200/month tax on all home rentals" you can be damn sure that every available property would align to +$200 over the course of a year or two.


And, if they can't rent it for that, they'll just take the property off the rental market and sell it.


The maximum that renters are willing to pay is a function of the availability of cheaper alternatives, and a tax on rental units increases rents across the board and removes cheaper alternatives, increasing the amount that people are willing to pay. This is literal Econ 101, supply and demand curve stuff.


> That would be true if rent was a percentage on top of cost. But it is not, it is whatever maximum renters are willing to pay.

Not exactly, rent price is either the max renters are willing to pay, or, a small percentage on top of ownership costs, whichever is higher.

In the case of the latter, if nobody shows up willing to pay the higher price then the rental unit is removed from the market. It won't make the price go down because the owner won't rent it out at a loss.


If this is true how do investors drive up price?


The main way if you look at it is investors willing to run on empty - buying houses and then failing to rent them at the amounts they're trying to get, where they sit empty for some time before the investor goes belly up.

This reduces the supply of housing in use.


So in this case the investor is taking a few hundred thousand dollar loss so the building can then be sold for a loss and rented at a price that makes market rent make sense?

I feel restrictive zoning is a much bigger issue than empty unsustainable houses.


It rarely actually happens I think, but it does happen. Zillow and that other home flipping company lost billions in total.


Honestly it would make owning a single family home more expensive and a rental cheaper. Since the rental is closer to maximizing the land's utility. Georgists never mention this. You'd also eliminate things like rent control and need to standardize zoning.


It's counter-intuitive but the majority of housing has to be non-owner-occupied for prices to fall.

>making property taxes substantially higher for non-owner-occupied property.

>but everyone who owns property would be against it because they don't want to see their assets drop in value.

After the initial dip, prices will rise again because residents will vote out every city government that tries to implement zoning that doesn't increase the value of their property.


> It's counter-intuitive but the majority of housing has to be non-owner-occupied for prices to fall

It seems likely the only way this happens is if the majority of real estate is owned by corporations or governments.

Replace "corporations" with "wealthy nobility" and we don't need to imagine how that plays out. Historically that's never been good for workers.


Don't forget that you are living in a democracy. If the tenants can make the rules they don't have to repeat history. However, as the zoning laws show, they are short-sighted, and most likely will repeat history.


Democracy is a system that rises out of power to the people.

People who own nothing have little power.


> It's counter-intuitive but the majority of housing has to be non-owner-occupied for prices to fall.

How do you see this being so?


Creating such huge distortions in a market always results in unintended consequences, usually counterproductive to the goal of them. For example, rent control makes for less units available to rent.


Remove depreciation, 1031b, and government backed loans for non owner occupied properties.

That would do the most damage.


You don't even have to removal all of them; just make it so you can't use all of them.

You're depreciating your asset? You don't get to depreciate, and deduct repair/maintenance costs.

You're depreciating? You don't get to 1031 the asset as well (and avoid recapture).

Regarding government back loans, I think you're right, ish. It's very weird that it's a thing at all, and that you can use subsidized loans for up to 4 unit properties. BUT I do believe this availability has been an on-ramp to a career in real estate, and a wealth building mechanism, for many, many previously-disadvantaged people. It's definitely been bastardized into something else over the last decade.

That aside though, individuals are limited to a maximum of 10 government-backed morgages, and it becomes much more difficult to qualify for new ones after 4. While yes, that sounds like a lot, large real estate companies that are managing 10s of thousands of units are not utilizing these programs, and eliminating them would serve only to limit the "mom and pop landlords" that, frankly, tend to offer a lot more flexibility for tenants than large management companies do.


> I would start by making property taxes substantially higher for non-owner-occupied property.

But that in turn means rents would go up substantially since the owner of that unit is now paying a lot more taxes on it because they rent it out instead of living in it themselves.

If the desired goal is to incentivize everyone to own their home and get rid of rentals mostly, that may work. But if there are people who want to rent affordably, it doesn't.


So it will be more economical for me to convert my apartment building to a single family home? OK. Sounds like the ideal neolib hellscape, single family home suburbia as far as the eye can see.

It is already difficult to make money in real estate. Your proposal would reduce housing stock.


> But I call b.s. on that. Residents would be able to afford new construction and maintenance if those things had lower price pressure.

Including those on minimum wage? Including secondary education students who have no income? Including (international/visiting) folks on a (consulting) contract that may not want to settle in the location?

There are many situations in which rental housing is the solution for people.

> They should need to do a substantially better job at maintaining and increasing the value of real estate to justify owning it instead of a resident.

"Increasing the value of real estate" is not the only metric to judge things by. Proving a valuable service to the public is another.


> There are many situations in which rental housing is the solution for people.

Then we can address that via rental vouchers to offset the taxes.

Real estate has the same problem as healthcare, in that it's an enormously complicated system, where any adjustment always has negative outcomes.

However, I agree with parent that the central and most critical failing is -- we are not incentivizing owner-occupied home construction at an accessible price point.

And a critical component of that is decoupling {build and sell to commercial landlord} and {build and sell to occupying owner}. The former will always be able to deploy more capital, and thus drive up the asset price to levels the latter can't afford.

And just to make it explicit: this is independent of density. You can have dense development that is still owner occupied (individual units).


If you are residing on your property rather than subdividing it and making it available up people who can't afford to buy you should pay way higher taxes, maybe 4x. Rental availability would explode and that would be the point.


I think that also highlights that there's an investment class outside of the reach of normal citizens.

If people can't pay to own property because it's easier for regulators and mega-owners to only have to deal with bulk-owners, then there's not a human-class. One cause is not enough resources in local government. Shrinking the abilities of the public servants until offices become autocratic, oligarchic hellholes is a long-favored strategy in consolidating authority.

We're in an era that has to balance a lot of novel challenges, but they have seemed to tip in the favor of the few over the many for the past generation or two.


Stuff like this always has unintended consequences. For example, if I inherit a house that I do not want to use as a primary residence and do not want to hold on to, I’d still get fucked over for 4x property taxes during the time it takes me to prepare the house for sale. You can’t write the rules with exceptions for every situation where you’d cause somebody unfair pain, because you can’t anticipate every such situation.


You wouldn't be fucked over, you just got a house for nothing and then you have to pay taxes on it because you weren't living in it. I don't see why that would warrant an exception.


> If you are rent-seeking rather than residing on the property

For the 10000th time, this isn't what rent-seeking means.


There are multiple taxes on rental properties. You have to pay both income tax, and if you are a corporation you have to pay corporate taxes.

That's roughly 20% and then another 20%.

If you wanted to go with this approach, the better solution is to remove tax deductions for corporate residential real estate investment


Competent landlords don’t pay income tax because they use depreciation and reinvesting to claim 0 income.


That's exactly what I was pointing out in the post you responded to


Even if the vacancy rate is 10%, that hardly seems likely to cause a "crash."


I like this idea but I think it should apply to rental income and not property tax, i.e. tax any income from rent higher. I know a few people that own multiple homes but have kids or friends of family staying there.


Tax land value appreciation, that is the rent seeking part of the equation. You want to incentivize developers to create more units, you want to discourage people buying units hoping to bank on appreciation.


Then you’ve pretty much forced every retired homeowner to sell and move when their neighborhood starts to become desired.


I didn’t mean as a property tax, I meant upon sale/transfer.


> I would start by making property taxes substantially higher for non-owner-occupied property.

You need to build more. Everything else is just redistributing scarcity one way or other.


This will just make rents more expensive.


"Some people prefer to be homeless on the street versus getting [...] a roof over their head that they don't like"

Do you have a reference to back up this statement? Have you ever spoken to any homeless people and asked them what they think about this?

Clearly there are some limits in which your statement holds; I would prefer to be homeless in a city in the UK than held in a forced labour camp with housing for example. I think once you include some basic minimum requirements very few people would prefer to be homeless.


I was also put off by the phrase "...roof over their head that they don't like", but the statement can be steelman'd into something I agree with and think is correct. Empirically homeless shelters operating below capacity and cheap housing in far off locations exist but we still see homeless people in tents under bridges and elsewhere.

I've seen numerous reports where homeless people say they don't use shelters because they're unsafe or the shelter's rules are too restrictive (eg "The shelter where I stayed briefly, you had to be in line. They technically opened at 7:00, but you had to be in line at 4:30 in the afternoon to be able to get your bed back..." [0]). I guess I don't know what homeless people would choose if they were offered a home in a far off town or something, but AFAIK, the only general options presented to homeless people are shelters, homelessness, and maybe social services in cities willing to work on the problem.

[0] https://www.npr.org/2012/12/06/166666265/why-some-homeless-c...


I have spoken to more than a couple homeless people that feel this way. Obviously “roof over their head they don’t like” is the big qualifier here. Many of the homeless I spoke to refused shelters because their drugs were stolen/confiscated. If you could get them into an apartment where no one bothered them they’d take it, but that’s not an option.


Every single homeless person in Boston can get free transitional housing but the Mass and Cass street area is still packed with tents and drug users


What is required of the homeless to qualify? Often there are big strings attached like you have to be sober or at least be working towards that. They often don't want to help addicts who don't want to quit using.


Right there will never be something good enough. They want an amazing hotel they can shoot up and congregate and party in with all of their druggie friends.

It’s totally reasonable to expect a bare minimum of compliance in order to get taxpayer funded housing. I don’t know if you have friends or family who are heroin addicts but I can promise you they are not pleasant people to be around, especially when they start stealing to fund their habit.


Do you think it is wrong for society to have contractual requirements such as "I will help you if you are trying to help yourself"?


Counterpoint: do you think it’s wrong to let the sick stay sick and not help them? Addiction is a sickness and often requires a lot of help addicts can not themselves do to quit. You can’t expect someone who isn’t able to help themselves help themselves. This is the crux of the issue.

Also, people in half way houses or assisted living absolutely should be sober so they don’t cause anyone else in the facility to regress, but it is a hard problem. These people often need intense rehabilitation and these programs are neither quick or cheap. Someone has to run the program and success is never guaranteed. Mandatory government funded rehab would be AMAZING, but imagine how many people would crow about their “freedom” to shoot up meth is being infringed if that happened at the federal level.

This is a very hard problem and there aren’t easy solutions. My opinion changed a bit after I married a girl with a masters in social work. This is very draining heavy emotional capital work.


Agreed we need to help the sick, I didn't make that clear enough. I was trying to understand if the previous poster thought it was wrong to say "Here is housing and a program. You can't have the housing without the program."

After working with foster and adoption of two preteens from an unhealthy home situation my opinions have changed a bit as well. Compassion is hard - it should push us to do. Now if I can just work on being less blunt ...


Empathy is the solution to many of society's current problems. That and more social workers.


Sometimes, yes.

When someone has thrown themselves off a bridge, do we send out rescuers always or only under particular circumstances?


Yet isn't this more due to control and oversight versus desire or location? Perhaps the options that are presented to them as "free" contain other entanglements that tips the scales towards camping?


It’s common for homeless in the US to not want to stay at shelters at least due to not agreeing with the requirements (being sober) or they think they’re dirty and might have bed bugs.

I’ve always tried to get food for betters outside of grocery stores or pharmacies whenever they’re asking for money.


In Russia there is depressing Vorkuta city, where prices for flats are literally near zero. :-) It's clear indicator that most people prefer to be homeless than own 2 bedroom flat in Vorkuta :-)))


housing is complicated

My bullshit detector went off right here. Housing isn't complicated. It's only complicated by investment money being involved. Having a roof over ones head is a basic human right.

In Australia, the market is so hot, very few young people can afford anything, if you're living in a nice place, you can easily be kicked out after your rent doubles. I know of good, professional people who migrated to Australia and went back to their home country of this behavior.

It's complicated because we've made it complicated. I also think it's why we're living in a world with a lot less creativity. Who can make nice things when all we're doing is racing to the bottom to make ends meet ?


But you need someone else to provide your ’basic human right’

Is housing expensive in popular cities or everywhere?

What is preventing people (you?) from building cheap houses on cheap land? Is it regulation?

We are headed for a massive population crash almost everywhere, the housing market will completely collapse in the next 10 years and will not recover.

You can look at Japan and Italy as a head up, they are starting to give away houses in the countryside.


>We are headed for a massive population crash almost everywhere

We're not. Many countries predict stable populations at worst for several decades still. Some continue to predict population growths. Politicians are all too eager to use immigration as a way to band-aid low birthrates, and many are already subsidizing children more.

Your last line gives it away too. Japan is primarily crashing in the countryside. Tokyo is lagging behind by almost two decades, only just starting to drop. The high housing prices globally are primarily in urban and suburban areas. Many of those areas are still growing tremendously at the expense of rural areas. People don't want to live in rural areas because there are no jobs. Even if there was a crash, it hardly matters if populations continue to rise or remain stable in areas where housing is getting too expensive for the jobs provided.


One thing I find interesting though is that at least in Australia, it's speculated that a lot of the property pressure is from foreign investment, especially from China.

So if China's population starts to crash or their economy goes bad at some stage what effect will this then have on the Australian market (for example)?

I'm guessing not much because the inflationary property price damage has been done. It's a curious thought.

Also in the case for "steady populations with little growth", wouldn't this mean that property prices will also stabilize and eventually drop? This stabilized property market will be interesting because people won't be able to make the huge capital gains and returns they were used too? A lot of property investors are also probably pretty heavily indebted and so any type of economic trouble might put many in a precarious position.


Too many variables to say. In theory, you would say a stable population all other things equal would keep the housing prices equal (or drop a little initially since predictions aren't green anymore). In practice, even without foreign money, there are still many ways with which the value of housing can go up. And as long as the majority of voters want housing to go up, it likely will.

Practice can be seen by the many cultural shifts we had which had zero to do with population growth / housing shortages, but still increased prices tremendously. Higher loans, longer mortgages and lower interest rates, for one. Increased dual incomes is another.


However, unless there is another population boom on the horizon (which really seems unlikely at present). Property speculators must have their doubts.

This combined with climate change and it's ability to change the landscape (literally) makes it getting harder to predict where people might actually want to live.

For example, I visited Scottsdale, Arizona not long ago which is going through it's own mini-boom at the moment. Will that be a nice place to live in ten years with rising temps? One would have to ask the question? Would people still pay huge money to live in Tahoe with poor snow quality and lots of bush fires in summer?

You did say there's too many variables :)


What I saw is fewer kids in almost all countries. The urbanisation push this even further as adult living in dense cities have even fewer kids. Yes, it will take some time, but the aging of population is already there. And old people consume very little. I agree that the speculative nature of housing is a problem, from what I see it is caused mainly by the devaluation of currencies.

You by a house at 100k$ with 90k$ of mortgage, your government print money making your mortgage worth less, bam you got a 200k$ house with 90k$ mortgage. Your 10k$ gave you 110k$ While your currency is worth half of its previous value.

It was the easiest way to get rich for a long time, it work as long as the currency keep debasing (you can count on that) and the housing market is good.


I don't think you know what cheap means.

I, and most people, don't have $10,000 to spend, and even that wouldn't be nearly enough to build a house, let alone buy a cheap lot of land, let alone install a septic system and a well, post for gas and maintenance for my car, all while incurring the time cost of living farther from work.


> But you need someone else to provide your ’basic human right’

For many people, this isn't true.

A lot of people would easily be able to afford to buy or build in a nicer area if there wasn't so much competition for land or housing due to investment. I think if there was much much higher cost of non-owner-occupied housing, you'd just see people move into nicer areas with less financial pressure to do so. This sounds like a nice thing.

Interesting new problem Japan is facing is that even in the areas where they're giving houses away, they're starting to have trouble servicing the surrounding infrastructure, roads etc which I guess is from not enough taxes, administration and construction workers left to keep these areas a float.


Populations are expected to keep rising until 2100 at least. India and China may see a big drop but everywhere else will continue to grow albeit slower than before

https://ourworldindata.org/future-population-growth#global-p...


> It's complicated because we've made it complicated.

And thus, it is complicated. Also worth taking into consideration: we may not be able to do otherwise. Currently, for sure (hence the commonality of conversations on this topic), and perhaps never if we don't/can't change the way we think.


Some of us can change how we think, but big corporations and investment firms (and banks with investment divisions) are not going to adopt our way of thinking.

They are thinking of what to do with their piles of cash, and how to make their piles grow. They are absolutely not concerned about the wellbeing of individuals outside their own organizations/families.

This is basically the housing ownership version of the monopoly concept (and I don't specifically mean the game). There are, or were, laws to prevent companies from becoming monopolies. People (and governments) realized that once a company grows and consumes or blocks out all its competition, things eventually get very bad for the consumers/public.

There seem to be quite a few people on HN in the "regulation is bad" camp, but there are a lot of regulations such as the ones related to prevention of monopolies which are critically important. And now we see that there need to be similar regulations to prevent the equivalent in housing.

For this to naturally correct itself (and laws to become demanded by the people and written by the government) will take decades and likely some level of revolt. Maybe it will happen sooner than I think. It will be ironic if the camp that has been promoting gun ownership while simultaneously screwing its supporters becomes subject to forceful demands of its angry former followers. (Actually we see this right now in US politics when someone from "the good team" finally speaks out loud negatively about their great leader. The "good team" followers become immediately vicious and threatening. Perhaps once enough of those armed good old boys finally put their puzzles together and realize they've been fooled on a grand scale, we'll start to see some change.)


> Some of us can change how we think, but big corporations and investment firms (and banks with investment divisions) are not going to adopt our way of thinking.

I wonder: can you overcome this way of thinking?

> People (and governments) realized that once a company grows and consumes or blocks out all its competition, things eventually get very bad for the consumers/public.

Realized to some degree.

> And now we see that there need to be similar regulations to prevent the equivalent in housing.

Some see this, some see other things (sometimes the opposite). Whose visions are correct?

> It will be ironic if the camp that has been promoting gun ownership while simultaneously screwing its supporters becomes subject to forceful demands of its angry former followers.

It would be even more ironic if all followers began to question the stories their leaders tell them, and the stories they tell themselves.

> Perhaps once enough of those armed good old boys finally put their puzzles together and realize they've been fooled on a grand scale, we'll start to see some change.

Surely, to some degree. But even more powerful would be if all people could do this simultaneously...or even a critical mass of people, especially if they managed to do it according to a non-partisan methodology. Perhaps someone will create something like that some day. Or, perhaps not, and we will remain at this local optimum indefinitely, content in the knowledge that it is all someone else's fault.


> Having a roof over ones head is a basic human right.

Prove it.


https://www.un.org/en/about-us/universal-declaration-of-huma...

Article 25


An organization saying X doesn't make X true.

Perhaps OP meant to write "According to the UN, having a roof over ones head is a basic human right."


"We" as evolved social animals have pretty universally come to the agreement that humans should have a few basic necessities, such as food, water, shelter, (and less agreed but equally important) personal safety.

I could ask if you continuing to live is your human right.

I'm not sure there's any absolute decree that everyone can agree on that says you deserve to live. However, we evolved people tend to assume that every human deserves to continue living (at least until our differences become too great, at which time we sometimes just kill each other).

Therefore, your demand for proof that having shelter is a human right is bunk.


OK, and here I was thinking that human rights were premised on a philosophical basis. Thank you for clarifying that they are merely a political matter.


Just because he said it in this way doesn't mean you can't think for yourself and realize that it also has a philosophical basis. You are a human. You are capable of your own independent thoughts and conclusions which are as valid as other people's. If you can yourself find ethical reasons to give humans a place to live by default, and I'm sure you can, (because suffering = bad, no home = suffering, true for every human) you just created a philosophical reason for why it might be valid to consider it a human right.


The same philosophical chain of reasoning would lead to government provided boyfriends and girlfriends, so I'm not sure about this line of argument.


huh enforcement is clearly lacking.


Among those the UN counts as members are the Taliban (by way of Afghanistan) and Putin’s Russia, which makes it arguable that the UN as a body is in a deciding position on fundamental human rights, let alone a coherent position.


How does one 'prove' that other than by appealing to a list of 'human rights', upon which you and the other commenter surely disagree? There is no fundamental philosophical principle beneath human rights in which it will rigorously generate a list of rights. It's a null question, and I suspect you know that.

The stellman of 'housing is a human right' is 'everyone should have adequate shelter', and that's a far more productive starting point. The 'right' angle adds nothing.


I agree! That's why I take issue with calling X or Y human rights. It misleads the average person person into thinking that there is actually is such a thing as a human right, rather than the term just meaning "thing we really like".

With that being said, I don't think it's unreasonable to expect that assertions about human rights by organizations such as the UN be internally consistent. The UN claims that human rights are universal. Human rights such as to food, shelter, medicine, etc. fail this universality. To provide them requires taking resources from others and reallocating them. Therefore, they are conditional upon the ability of a society to reallocate these resources. Therefore, they cannot be human rights, and assertions to the contrary should be identified as being politically motivated.


I. Not having shelter kills.

II. To not be killed is a basic human right.

=> Having shelter is a basic human right QED


If we are to assume that human rights are universal (the UN says so), premise two is invalid, as it is not universalizable.


I don't think universality is a prerequisite for validity

For that matter I guess I would disagree with the UN. Someone who forfeits their basic human rights, for example, would not be entitled to them. So in that sense they're not universal.


That logic doesn't follow. There are plenty of things that, in some cases, lack of them causes death; but are not human rights. There are people that cannot survive without a liver transplant; not everyone gets a liver transplant; some people die because they cannot get a liver transplant. A live transplant is not a basic human right.

There are many things that, as a society, we should do our best to make sure everyone has access to; housing, food, medical care, etc. The more people that have access to them, the better off we, as a society, are. Whether or not those things are a "basic human right" is debatable; but they fact that you need them to survive doesn't define them as such.


This is a normative fallacy. If people die because they didn't get healthcare, that doesn't mean they didn't deserve healthcare. I'd argue that everyone who needs a liver (which is not the same as a liver transplant) has the right to one.

> but they fact that you need them to survive doesn't define them as such

Isn't that basically saying that surviving needn't be in a definition of 'human right'?


> Isn't that basically saying that surviving needn't be in a definition of 'human right'?

Yes, because "surviving" isn't a human right. It's something we, as a society, should do our best to make sure everyone is able to do, but that's not the same as saying it's a human right. If it was, then "not having a heart attack" would be a human right, which is clearly ridiculous.


Not so clear to me. If some company flooded a river with heart attack inducing chemicals, would you say that's fine because not having heart attacks isn't a human right?

I'll put it to you like this. If you believe there is a human right, then someone can't pursue it if they're dead. So if, in order to pursue that right, they need to pursue being alive, the pursuit of being alive falls within that right, no?


It's amazing how many people in government globally refuse to understand this. The UK government has just been talking about inheritable 50 year mortgages. No one wants to build more housing.

I think it might help people understand to put it in terms like this: there are 100 housing units out there and 150 people. How do we solve the problem?


Yeah. You just have to build more. Simple as that.

I was talking to a NIMBY and converted her to YIMBY by relating to her that in Santiago anybody builds whatever the fuck wherever the fuck, zoning be damned basically, and that leads to rent being like $150 a month. For real, you get what you get in SF for $4000 a month for ah...$400 a month in Santiago. And the minimum is very low. Sometimes $100.


The NIMBYs are usually the ones owning the property and possibly charging $4k/month. They might say publicly how they want affordable housing but behind the scenes they’ll always vote against it.

Case in point Marc Andressen’s family as we discussed recently https://news.ycombinator.com/item?id=32350657


Having lived in a zoning-free US city (Houston), I can't say that I'm a fan of "build wherever you want". It leads to large disorganized, unwalkable and inaccessible areas that just don't make sense from an infrastructure standpoint.

People complain about how bad zoning is, and I agree that municipalities can get carried away with it, but most people highly underestimate the impact zoning has had on their lives and take even moderately executed city planning for granted.


Santiago de Chile or Cuba?

I know that’s not the case in Chile for any of the central neighborhoods (Yungay, Brazil, Lastarria, Franklin, etc…) which I think are probably close to SF in terms of size. 325k CLP is about the lower end for a nice, small 2BR. You can get more rooms but the square footage is smaller. Las Condes/Vitacura goes up from there.

You can buy a nice 2BR apartment for $175k USD though.


Haha yeah Santiago de Chile. Hey I bet you can get a great deal in Santiago de Cuba, way under $100, and it's notable enough people say "which Santiago" like you just did. Cuba has incredibly cheap rent, like Communism works, works mandatory unpaid overtime, in terms of cheap rent.

So those are all beautiful quaint neighborhoods--myself I'm in Lastarria, but come on that's expensive. Yungay, little less. Barrio Brasil, no he cotizado [I haven't seen prices]. Franklin I don't know. I bet Franklin isn't that bad. But uh, try Estación Central. Another place I heard of that sounded like a great idea was Parque Forestal near Baquedano. Huge places at a third the going rate, just because of the violence, which I seek out because it comes with low rent, and which I in particular can handle, as a local. That's my niche. Las Condes/Vitacura is of course much more expensive, because first there's zoning, second it's for GCU--gente como uno[1], they're much more restrictive with buildings than other neighborhoods. Another cheap one is Ñuñoa, practically no zoning, on the subway line and there's tons of huge buildings.

But you gotta be a street cat and adjust expectations. So for instance, there's lots of burglary. All the time. Steal anything, shoes shaver knives children's toys all kinds of shit. Anything. But they're looking for the macbooks. Violence: there's guns these days. It depends on the neighborhood. Bad sentences for armed crooks, like I knew in rehab a guy who put a kitchen knife like between his cheeks but at any rate in his pants for protection when he was partying in the poorer parts of town. He got busted, it looked bad on him, weapons are forbidden. But dude then there's poorer and poorer neighborhoods, cheaper and cheaper rent, it's only a matter of being tough enough for the cheap street. People live in Maipú (pronounced as you fear) for hella cheap.

You just mentioned the neighborhoods where the privileged live. Those are all nice neighborhoods, for the HN crowd, American-friendly (they'll cheat you and steal from you--not from me, but from you--but hell it's cheaper than SF rent). Hell, go live near Pajaritos or Neptuno, I can tell you the rent won't fuck up your checking account. And none of the places I mentioned are tent cities, there's those here too, along with--more common previously--poblaciones callampa, shroomtowns, popping up out of nowhere squatting on unsuited land like shrooms out of the ground, from one day to the next.

It's a mixture of continents. Europe in Sector Oriente, Asia a bit in Patronato (my agent scouted there when he needed Asian actors/models), like there's real Latin American poverty too, but not that that's worse, just poverty is suffering, not a stain on the dignity of the sufferer.

But there's no overlap with San Francisco. The most expensive Santiago place will come in cheaper than the cheapest San Francisco place.

[1] This is a joke indigenous to Chile. They idea is going back not many generations, the people in the target audience for this joke had some money and some status, before downward mobility as the fortunes of the country rose and fell repeatedly. So there's an in-crowd. Specifically, in Chile, one sociological measure of status is whether you have a Spanish surname. So Gutiérrez, Pérez, those are considered--by sociologists, and in general by the culture--low status. Then on the other side is the Basque surnames, with lots of z's and r's, very recognizable, long names. Basques did very well for themselves in Chile, and that's more or less the only thing that matters for status really, is money. Power much less. It has to do with the neoliberal economy, so like the lay of the land up til 2019 was best understood by reading an introductory economics textbook, whereas in America it's the Bible. Money is everything, and like how you go about getting it, where it springs and where it's scarce, and the myriad ways you get fucked when you don't know the trick they're pulling on you. Which you can usually figure out, again with an econ textbook. Gente como uno is like an in-joke of the recent immigrants, not the very recent immigrants from eg Venezuela, but the wave from before which had non-Spanish surnames, like Basque, but also Italian or Dutch or German, or English is good too, Irish is very good in Chile in particular despite the Irish community being vanishingly small (most of it mixed in producing more redheads than blondes, blonde hair is incredibly rare in Chile, to the point any shade of hair that is brown or blonde is called "rubio", which stands for blond/blonde. I got put down as "rubio" in castings, it's a cultural thing, in America I say I have brown hair. It's just blond by American standards, platinum blond, like many Chilean men I know before their hair darkens dramatically (Pedro Pascal being one example, the Mandalorian. I saw an analog picture of him as a child, platinum blond, just darkened dramatically, to jet black, this happens to some Chilean men), so platinum blond, is incredibly rare here, 1 in 10000 people or so. Like if you're a blonde woman interested in Latin men like the bravado the dancing, and sure it's the safest part of Latin America, if you're blonde Chile is not for you, it's considered intimidatingly beautiful, nobody will hit on you. So I'm told.


I've lived in both (Yungay and time in Maipú), looked at buying in 2019 Yungay/Ñuñoa (before October 18), and wives family is there, living in Maipú, Lastarria, etc... it's all kind of apples to orange though because the working class/middle class/upper class profiles are different than in SF. Maipú is probably the cheapest but of course you end up far away (unless you work in one of the places nearby, which is probably lower middle class to be honest).

Comparing via square footage, it's true - cheapest SF place is more expensive than most expensive Santiago place, but 3BR Parque Forestral penthouses (Even Barrio Italia) used to push $750k, for example, which you could get a 1BR place in SF for at the time probably too. If you go outside of SF city limits it gets much harder to compare.

Of course, these are just housing costs. Other things end up being more expensive in Chile in a different ways. We have kids, and even mediocre public schools like you find in the bay area are better than almost all private schools in Chile.


You can't buy absolutely anything for less than a million anywhere in SF.

So in that, you agreed with me. Let me take the chance to agree with you, public schools ("liceos") are not as good as Chile deserves. Well first off very underfunded, if you go and send your kids to Nido de Aguilas that's about the same budget per student as an American public school. And it's the best education. Just yeah it's hard scratching up that change in the Chilean economy, as it stands today. And there's plenty of schools, just education in America is subsidized and you have to pay your way in Chile.


Make small cities and towns desirable again and put those 50 people somewhere else.


Small towns are just inherently unsustainable in a globalized developed economy. Most of our economic activity comes from working with other people, that means the rational move is to move to where everyone else is, ie a city. Remote work can slow that process down, but it’s not reversing.


Yes, but you don’t need to live in a city of 8 million people to participate in the global economy anymore.

Globalism has made it easier to do global business in much of the US, logistics, transportation, and communication have changed dramatically since then.

People take for granted the fact that you can pop into any small town grocery store and find a vegetable grown in another country. That’s a relatively recent possibility.

But there’s also many cities of 100-300k residents with plenty of affordable housing and Fortune 500 offices.


I agree. What are your ideas on fixing that?

I watched my grandparent’s hometown (Newton, IA) become less and less desirable over the decades after Maytag moved the factory to China. They diversified a bit by adding a race track, but it’s a shell of its former self. Cheaper offshoring (not from one party or another, but encouraged by politicians on both sides) really wrecked the economy of small US cities and towns.


England has been building more housing - pretty much everywhere I go there's housing going up, new housing starts are apparently at their highest since the last housing bubble popped in 2008, and the national government basically removed the ability for local governments to block news housing development in order to encourage more to be built. It's just not working. Also, the areas where the jobs are have started to run out of important things like water and electric grid capacity.


Sounds like they’re behind. Or are you implying building enough homes is a bad strategy?


Make it OK for 2, 3 people to live in one "housing unit". The whole "out of the house by 20" thing is a pretty new and American idea. Intergenerational housing is going to be the future till this shit gets sorted.


> there are 100 housing units out there and 150 people. How do we solve the problem?

Double up or move to a cheaper place

That’s how the US west was populated, it’s how the US east was populated too - migration


Land is an asset. It needs to be a liability.

Virtually every other problem is either a distraction or an indirect consequence (e.g. NIMBYs, too much luxury housing) of this core issue.


Can you explain how making housing even more costly houses the extra 50 people?


When people speculate on land it doesn't get used as much as it should. By having people pay for the value of the land, that either forces them to make use of it, increasing housing supply, or get rid of it, which then the next person who buys will make use of it. Even a partial land value tax like we see in certain PA cities[0] yields real results and after implementing the tax vacant land went away and current homeowners actually saw a tax decrease.

When you tax land value, the initial price of the property drops to offset, which makes it easier for less wealthy people to afford a down payment. A perfect land value tax would set the price of land at zero with a hefty month tax payment.

If this raises more tax money then the government can meaningfully spend, you simply give it back evenly to the community. Note that, just like the carbon fee and dividend system, still incentivizes that people use as little land as they can.

[0]: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...


This sounds like the quick way to create a nation of renters. Otherwise, people would be priced out of their homes in short order by the ever increasing LVT. Which of course, isn't a bug, but the feature of Georgism (a family of 4 living making a home there probably won't permanently be the most efficient form of land use on that plot)


Renters are already paying for the land value, so if a renter can afford a property, so to can a homeowner. Under a Land Value Tax it is even easier to be a homeowner, as you no longer have a huge upfront cost of buying the land. As we saw in PA, current homeowners saw a tax decrease because so much vacant land went up for sale. A larger land tax would see even more positive effects. A larger land tax would also allow us to start reducing sales and income taxes, since that would end up simply increasing land values by more than they tax.

Since this incentivizes increasing the housing supply, zoning would quickly change from exclusionary to abundant. With those new homes being built, people would choose to move from their worn-down house into something new and better, and their current property would eventually have the same fate. It's not kicking people who love their homes out, it's letting people leave their homes for better ones.

You would still have apartments. You would still have AirBNB's. You would still have co-ops. You would still have houses.

Any tax money in excess of what is currently paid would be currently would simply be given back as a citizen's dividend, unless that tax money could be better spent on infrastructure, infrastructure that would pay for itself in higher land taxes that would yield even more land tax share dividends.


Precisely. A nation of renters rather than a two tiered class system with land owners at the top of the economic hierarchy and elderly renters at the very bottom.


Hmmm. I think what you are describing as a benefit most would think of as a bad thing.


Housing isnt land. Housing isnt intrinsically scarce.

Land being a liability means that the "owner" will have zero incentive to hoard it. It will mean that owners of low rise property in high demand locations wont be doing everything in their power to inhibit high rise development because theyre sitting on a pot of gold. Theyll be sitting on a pot of taxes instead.

It means any undeveloped land will be developed or sold to somebody who will.

It means slumlords who rent out shit housing will lose money.

We all recognise that this is the appropriate way to deal with electronic spectrum - auctioning off time limited rights. The idea that your great-great-grandfather owned 400-405MHz so you should too is no less ridiculous.


Life is all about asset liability truth right.


Yes, a ton of new homes need to be built, but also a lot of the existing homes are empty. The US has a vacancy rate of somewhere near 10%.


That sounded surprisingly high so I looked it up. Rental vacancy was 5.6% and homeowner vacancy was 0.8% in 2022Q2. Vacancy hasn’t been near 10% in about a decade.

How much rental vacancy is needed for there to be enough space for people to move around? 3-5%? Too low and you have gridlock.

https://www.census.gov/housing/hvs/files/currenthvspress.pdf


There are absolutely not a lot of existing homes sitting empty. I know the internet really wants to spin this as a "look at greedy people hoarding housing!" but real statistics begs to differ. Rental vacancies across the US are at about 6%[1]. This is spread across a wide number of areas, in major metros the vacancy rate is sub-4%, which is probably close to the minimum vacancy rate needed to turn-over tenants who want to move in/out of an area.[3]

Home vacancy rates are currently at about 0.9%(!!)[2]

These are both very low. In home vacancies it's probably the lowest the US has ever seen, and in rental rates it's almost the lowest, and many metropolitan areas are probably experiencing the lowest rate they've ever seen.

Supply is the problem. Almost every other comment I see on this topic seems to suggest that the issue is something else, but this is all really simple economics. Supply in the places where people want to live is very low, demand is very high (and possibly higher than ever due to pandemic pressures), prices go up up up until the supply-demand curve settles down.

I'm not afraid to use the government to try create justice in housing, but the fact is that the only thing that really matters at scale today is SUPPLY. If we get more supply in the places people actually want to live, prices will go down. The fastest and cheapest (and probably only) way a government can make this happen at the scale needed is by making construction of (or conversion to) new dwellings much cheaper. If you are proposing policies that don't do this, I think the best outcome is nothing and the likely outcome is an even more messed up market that will inevitably privilege the rich over the poor.

As far as commoditizing housing, I just don't think it's a problem (and probably not very viable either) so long as there is enough housing supply. Anyone who thinks the residential-real-estate party is never going to stop is out of their mind or trying to scam investors. The party will stop.

[1]https://www.census.gov/library/stories/2022/05/housing-vacan.... [2]https://fred.stlouisfed.org/series/USHVAC [3]https://ipropertymanagement.com/research/rental-vacancy-rate...


The US is a very big place, with lots of land that isn't in high demand. What's the vacancy rate in NYC or similar?


The national vacancy rate isn't very helpful. Abandoned houses in the industrializing cities or decaying rural towns don't help people who are trying to live closer to where jobs are. Look at the vacancy rates in the cities that are strongest economically, and you'll see just a few percent.


Common NIMBY falsehood.


> Some people prefer to be homeless on the street versus getting to a roof over their head that they don't like.

... why is this the top comment?


Because there was far more to the comment than that single sentence. On the balance of the comment, I felt that it contributed to the discussion, so I up voted it.

If you consider it not helpful in the discussion, then please down vote it. This will help to lower its ranking.


I've struggled to buy a house almost my entire adult life. I'll add some nuance to things you said, and hopefully that can connect the dots for some folks.

I don't like looking at a house as an investment, but it currently is. I'm a very frugal person and I save as much of my money as I can. Nevertheless, at 33, when I first met with my financial planner one of the first things she told me was that I'd already maxed out and exhausted places I could legally stick my money for long term investment... besides a house. There are a couple alternatives, but they likely won't be around long. One was a life insurance market account that you push money into every month - turns out, due to it's tax free nature, it can rival the growth of a home. Historically, when houses were lower barrier to entry, they were the simplest and most effective form of saving money.

Next, location. I don't need to live somewhere fancy, but when I bought a starter home ($200k) in Dallas the only place I could afford was about 45 minutes north of the city. My commutes to any place I could work were long. Prior to this I had moved to the country to save money to buy that house. My commute was 2.5 hours every day. Even with mass transportation, my commute would be long due to the size of the DFW metroplex. This weighed on me every day. I was missing time with my dogs and family.

I was trapped in a scenario with a bunch of tradeoffs that all yielded similar results just as the Dallas market was heating up. Quite literally, the only reason I got my house is because no one bid on it. It had been hit by a tornado and leveled a year prior. People were very superstitious about buying the house.


> . But you have to make it cheap. Deregulate construction, get rid of unions, prioritize developer rights over tenant or homeowner rights.

What's insane is that we never consider the obvious alternative. GOVERNMENTS HAVE TO PAY FOR THE HOUSING THEY NEED.

It's true that developers will not build if they can't make a profit. So we raise money through taxes and treat housing like an investment in our future.

This American notion of "free market or nothing" has left us with unlivable cities of sprawling suburban houses because that's where the profit is. But that's not what's good for our long term future. It turns out you can't laissez-faire your way to good urban planning


> This American notion of "free market or nothing" has left us with unlivable cities of sprawling suburban houses because that's where the profit is. But that's not what's good for our long term future. It turns out you can't laissez-faire your way to good urban planning.

While I agree America needs to put in some serious work into urban planning, the current and recent past of the US urban planning is anything but laissez-faire: strict zoning, housing codes, permits for most major building actions, minimum parking requirements...


> : strict zoning, housing codes, permits for most major building actions, minimum parking requirements...

Yeah, a bit of hyperbole. It seems more that the mess of regulations are just patches on top of patches, sometimes with conflicting intent and not with much long term design.

And a lot of it is controlled at a extremely local level. This means we end up with paradoxes where everyone acknowledges that we need more houses, nobody wants to densify areas near themselves. It's always someone else's problem.

It's the same story with power shortages in California. We need more generation but plant after plant was denied because the locals objected to the proposal for building near them.

It's clear we need planning at the state level and override local municipalities to force development. If they complain then the response should be "you had your chance to solve it and blew it. Too late now. "


> Deregulate construction, get rid of unions, prioritize developer rights over tenant or homeowner rights.

These all assume that the cost of new development is the building/development itself. It isn't. It's the land.

The correct solution to this is a land tax based on the assessed value of the land.


[UI confusion led me to think this was a reply in a nyc specific comment chain. It’s still relevant but less perfectly so.]

You land-tax to make sure the most efficient buildings end up using the land. But the construction industry in towns like SF and NYC is mostly constrained by what you can get approved, which comes down to connections and what politician-pleasing giveaways you have to tack on.

And expensive downtown Manhattan land has lots of potential competition, but with transportation infrastructure costs running $2 billion a mile (!!!!!)


That will merely increase the carrying cost of the land and ensure that only rich people can live there, and that's true even if you break it up into smaller units on each unit of land, it's just higher cost smaller units.

There is NO one single point of influence that works the way we want it to, and that starts right at the 2nd-order effects, not even tertiary effects.


What is the difference between 2nd-order and tertiary effects?


My understanding is that it is the next level of knock-on effect.

So, maybe an example of turning on & engaging the motor of a boat on a lake would be the primary effect is the boat accelerates, the secondary effect is the wave/wake created, and the tertiary effect is the wake bouncing other boats and it's effects on shore.

So with this land tax example, the primary effect of the tax is increased revenues for the city and costs for the landholders, the secondary effect would be restring ownership/renters to a wealthier set of people, and the tertiary effect might be changes in the mix of transportation used like more private cars and less public transport...


Don't many states/cities (if we're talking US) already do this?


I think there may be a disconnect here (and I apologize if there isn't; this is not my wheelhouse)...

1. Some people talk about "land tax" meaning a tax on the value of _only_ the land. So you pay a tax based on the land, but not anything built on it.

2. Some people talk about "land tax" meaning a tax on the value of the property if you were to sell it; including any construction on it. This is the common situation in the US, to the best of my knowledge.

The former, taxing _only_ the land, is what (I believe) a lot of people are talking about when they say it will promote more/better construction on the existing land. Because you're paying the same tax regardless of what is built on it, so build whatever it the most useful for you.


Everyone says there is a housing shortage, yet only the extremely poor live on the streets. So, there is no housing shortage: there are housing units available for almost everyone who has an income. Almost all the houses are just owned by landlords instead of by residents, where the owner uses the property as an investment rather than as a home.

The only shortage is in homes that are not investment properties


> Deregulate construction, get rid of unions, prioritize developer rights over tenant or homeowner rights.

That’s how you build slums. Which I think is what you’re proposing.


Most people in favor of the regulating construction are talking about removing density restrictions, not building codes.


Pretty sure that's the point they're making. It doesnt' sound like they're proposing it.


> So, what instead? You want to build more housing in NYC? Great, that should work. But you have to make it cheap.

> because that's the only way a developer can recoup their enormous land acquisition,

There you go - in order to make it cheap you need a land tax, nothing else will work (alternatives have been rehashed over and over decades by georgists).

Without land tax the property market is stalled without market clearing and both tenants and developers get stuck. You won't find a solution by catering to either. The solution resides outside of this left and right dimension.

If you want the real solution, you go asks georgists. If you want to score politics points with YIMBYs or NIMBYs you keep beating the same dead horse forever.


> There you go - in order to make it cheap you need a land tax

How would land-taxing make it cheap ?


Because you're buying the tax liability as well as the benefit of the potential rent. Under a perfect land tax those are equal, so the price of all land is zero.


A huge amount of housing issues across North America are due to zoning issues, with areas that don’t allow high density housing to be built (or where the residents fight fiercely against it). You don’t need to deal with most of the other problems you mentioned if you fix this first.

The other issue is vacancy. 10% of homes are unoccupied. Coming up with ways to fill even some of those properties would be hugely impactful.


> The other issue is vacancy. 10% of homes are unoccupied.

This is the second time I've seen this number thrown around, but as near as I can tell it's completely wrong[0]. Homeowner vacancy has never reached higher than 3%, and the 10% figure was rental vacancy at the height of the last recession: it's now 5.8%.

Aside from the fact that the number itself is outdated, it also lumps the entire US into a single category. Most of the land in the US isn't suffering from a housing crisis, and including homes in those areas in one big national vacancy rate doesn't help understand the degree to which vacancy is playing a role in the big cities. You need to be looking at vacancy by neighborhood, not by country.

[0] https://www.census.gov/library/stories/2022/05/housing-vacan...


Yeah it's all zoning gods.


You are right that throwing money at it isn't a solution. But corporations should not own residencial housing and no one should be allowed to sell propery at a meaningful profit if they own multiple properties.

The government should excecise it's power of taxation to take the profits of an investment housing sell (as defined above: multiple property owner selling at profit) with something like a 95% tax on profit and use that to build competitive housing (not for the homeless but for the regular person).

It is doable politically but only if there is support with the people. This bullshit about your housing being an equity investment and other related sentiment needs to go away.


Incentivizing individual home ownership I get, but killing the home flipping market, I don’t. Personality, I don’t want to renovate an out of date home, I just want to move in and done with it. Taxing flippers to death doesn’t seem progressive to me.


That's the first argument I usually get as well. I am very much saying end flipping. I don't know what is progressive about that at all. But to be practical, perhaps loosening the profit tax based on how long you owned it makes sense. Perhaps 1% for every year owned? That way you can flip it, live in it 20 years and sell it with inflation adjusted 20% profit?


That's not what people usually mean by flipping, and doesn't address your parent's point. They want to be able to buy property in good condition, and flippers are providing a useful service of increasing the supply of housing good condition.

(I would actually like us to deregulate housing construction past the point where flipping is no longer economic.)


Sellers themselves would be incentivized to make their house in good condition to sell it at a profit. If all they do is renovate then that should be a service to the original seller. If your house is devalued by 20% when selling, you pay a renovator to fix it up and take 50% of profits so instead you only lose 10%. Like you said they provide a service, they could handle the sale as a real estate agent and get more pay as well. My suggestion just means the original owner will retain ownership until an actual person who wants to live in the house buys it.


> Sellers themselves would be incentivized to make their house in good condition to sell it at a profit

Many sellers don't want to do this.

Consider someone who inherits their parents house, 1000 miles away. The house needs renovation.

You want them to uproot their lives or find a "service provider" (1000 miles away) instead of just doing an "as is" sale to someone who will do the renovation and sell it.

Sellers want out. There's no social benefit to making that more difficult.


Flippers are selling for profit so they will not sell until the market is suitable that means an incentive to artificially raise prices because as you point out flippers don't just want out unlike residents.


Many sellers can't afford to do a renovation and even if they can, they don't have the knowledge to do what the market wants. (They can't borrow without both equity and the ability to repay.) They also may not have the time.

Many buyers aren't interested in doing a renovation, and most of the other things apply.

People who renovate for a living do have those things.

You seem to think that holding out for more money is no-cost - you're wrong.

Flippers lose money if they're wrong about the market, so why are you so insistent that it's wrong for them to make money?

Which reminds me, how long does someone have to own something for you to be okay with them selling?


I won't repeat what I said about flippers since I replied to multiple other comments but they would still exist but provide flipping/renovation as a service(see other comments).

People can sell whenever they want, my restriction is the profit margin. I have no problem with that margin being more and more over time so long as that rate is nationally set to be uniform.


Are you going to cap the amount that flippers can lose as well? Why not? And, why should their profit be uniform? (Some flippers are better than others.)

Flipping as a service requires waiting by buyers and/or sellers which costs them money. Why is that a good thing? (A renovation may take 6-12 months.)


In your proposal the 'flipper' owns the house for 20 years, which is a completely different model and makes standard flipping uneconomical


That wouldn't be flipping just a side-effect of ownership. Flippers should provide renovation/real-estate as a service with the original owner maintaining ownership until the sale to someone else.


> Flippers should provide renovation/real-estate as a service

That's a general contractor, not a flipper. The key difference is who takes on the risk: if I hire a general contractor and they turn out to be not very good at their job, that's my problem.


Exactly, what I am suggesting is current flippers will guarantee a sale price to the seller, renovate and how much of the profit above the sale price they take is a matter of market/negotiation. They still take on the risk and work on multiple houses they just now have a seller pestering them to sell soon instead of hoard houses until price is high enough.


I agree, except E.G. retired 'snowbirds' really love a stable climate and might have two homes in different climate zones. There's also the case where someone is selling one home and moving into another.

The tax break should be made if someone's primary residence is occupied for at least 35% of a tax year. A number intentionally just a tiny bit bigger than one third, so the break can only apply to a maximum of two homes, but low enough to be flexible.


I mean, they can still own multiple properties and sell it close to the original purchase price, I am just saying they can't make a profit from the sale of their second or third property.


No one needs more than one house period.


Would you also like to limit the size of the houses?


Yeah, nobody should have vacation cabin. It's very bad for the sake of society.

I will paraphrase wrongly attributed to Bill Gates quote.

15m should be enough for each worker in this world.

Marx would be very happy hearing this.


You're right that building more housing is the solution. But we don't need to get rid of unions or deregulate construction. The main issue is land use regulation [0]. We just need to let developers build.

[0] https://scholar.harvard.edu/files/glaeser/files/why_is_manha...


Yup just "build more housing" simplistic to point of stupidity.


It looks like you can't see the real issue: too many people want to live in NYC. If you make it cheaper to own, build or rent in NYC even more people will come and the there will not be enough housing. Perhaps people should be encouraged to live somewhere else/in more places? Living in NYC is not a human right either.


The problem is that when the cost of living goes up, it tends to force out poorer residents that have been there for many years.

Encouraging people to just live somewhere else because they can no longer afford the home they've owned for decades undermines the entire premise of home ownership because it means that you may own the deed today, but you only control the property as long as the financial system underpinning your local real estate market operates within a range that you can afford.

And in 40 years when you're retired and on a fixed income that assumed you'd be paying a property tax rate that has now doubled and you can no longer afford the property, then it becomes your turn to GTFO and make room for the people who can afford it.


>>Encouraging people to just live somewhere else because they can no longer afford the home they've owned for decades undermines the entire premise of home ownership

Who is to blame that you stagnated financially all these years and the place you lived increased in value? You could sell the property you own and move somewhere else(cheaper) "living like a millionare". Chances are that if you are too poor to afford tax on the property you own or the places around (i.e restaurants surely got more expensive too) then you don't fell like you belong there anymore. You find the place hostile. Your friends may have moved as well or now they are too rich to hang out with you. If you don't want to get into this situation you should either make sure you have enough money when you retire or plan your retirement somewhere else or just consider that buying a property in the world's biggest financial center doesn't mean you will afford it forever. Change is part of life. Also consider that when you purchased your house you increased the value of the properties around and forced some people to move somewhere elese too. It's the circle of life, survival of the fittest.


I don't feel bad for the millionaire elderly taking up inordinate amount of space so young people can't afford anything.

However, if you feel differently, we could make gains in property tax payable on death or property sale.


I find it right that millionaire and less millionare eldery don't fell bad for young people whining that they can't live anywhere else except the "old town"/city center / downtown of the old people. The value of the land is really given by the people living there.


The existing paradigm creates extremes. We have Manhattan filled with 40-100 story skyscrapers, then we have the other boroughs with much less. We've got suburban NJ, CT, and NY. If those areas stopped their restrictive zoning policies, and allowed building more density, then the people who wanted to live in NYC could do so, and the people who wanted to live near NYC could do so.

When you take a look at Tokyo, who have had stable housing prices, and have a sane zoning system, what you see is that people can live where they want to live. Yes you have some skyscrapers. But you also have many places that aren't.


Tokyo as an example of city wirh affordable housing. I guess only on HN.


> Perhaps people should be encouraged to live somewhere else/in more places?

That’s what price does


I wonder why people don't get the message.


"get rid of unions"

I am as YIMBY as they come regarding zoning, but this is a complete non-sequitur. It also shows a casual disregard for basic republican values: the right to freely associate and to withhold one's labor.

An international comparative perspective, as well as a regional perspective, do not suggest that construction union density can explain the widespread housing affordability crisis in the U.S.

Only 12.6% of American construction workers are union, and residential construction is a less union dense subsector than commercial real-estate or large-scale infrastructure.

Many countries have both dramatically lower housing costs and higher union density in the construction trades that the United States [1].

Within the U.S., it's clear there are problems provisioning housing where construction workers on residential projects are rarely if ever union (e.g. Virginia, Florida).

1. https://data.oecd.org/price/housing-prices.htm


>> get rid of unions

> I am as YIMBY as they come regarding zoning, but this is a complete non-sequitur. It also shows a casual disregard for basic republican values: the right to freely associate and to withhold one's labor.

It does no such thing. Rather, it's noting that unions raise the cost of many things they are associated with; especially construction. The value added by the union being in place isn't being questioned (or even commented on). Just the fact that they add cost.

The same is true of safety regulations. Those regulations (generally) add a lot of value by keeping people safe/alive. But every safety regulation _also_ adds to the cost. Pointing out that they add to the cost in no way belittles their benefit or the desire to have them.


So why isn’t the focus on making more places where people want to live?


In my country (the US), real estate has been the main source of generational wealth that lifted tens of millions of people into the middle class. In 1950, the median home value was $7,400 [0] ($91,000 in 2022 dollars [1]). The median home sale price now is $440k [2]. Real estate is one of the few tools people have for accessing the power of compound interest, and a very large number of people essentially use real estate as their retirement savings. Supply and demand are major forces that impact prices, and that's why so many people fight tooth and nail to restrict the supply.

I'm firmly in the YIMBY camp (incidentally, I don't own any property), but I grew up near Detroit (1990's-mid-2000's), which is a city where supply vastly outstripped demand, largely because the population of the city declined consistently for decades [3] (which I'd largely attribute to a vastly overbuilt freeway system that enabled quick commutes from the suburbs, and explicitly racist federal housing policy [4]). There were hundreds of thousands of empty homes that no one wanted to buy, and this had some very undesirable effects. For one, many homes in Detroit have such low prices that banks can't justify the fixed costs (inspections, appraisals, etc) involved in backing a mortgage, so instead, people who can't just pay cash have to either rent or enter into a land contract [5], where the buyer pays the property owner every month and gets ownership after paying the entire contract off but accumulates no equity. Another issue of having hundreds of thousands of empty homes (ie more supply than demand) is crime and arson [6]. Empty homes in Detroit often became drug dens/crack houses/shooting galleries (pick your term), and thousands went up in flames every year, either accidentally started by drug users, recreationally started by bored youths, or intentionally started by community members trying to eliminate a blight from their block. A lot of Detroit's issues stem from the bulk of the tax base moving out of the city boundary greatly hindering Detroit's ability to fund police/firefighters/sanitation/other public service workers, so this may not generalize to other situations where oversupply makes real estate not a commodity [7], but I often feel other YIMBYs are a bit myopic about just building more housing without considering the potential impacts (both in the case of overbuilding in cities and the case where adequately meeting demand in cities/suburbs drains demand from exurbs or, or meeting demand in suburbs drains demand from the city). And lest it seem I'm just some white suburbanite dumping on Detroit, I love Detroit and think it's a great city with great cultural and engineering output, and I will always stop in to Lafayette Coney and John R King books any time I'm back.

TL,DR: I absolutely want everyone to have housing and we should build more and employ methods (like high property taxes) to discourage people from simply holding empty property as stores of value, but I've seen what can happen when real estate is not a commodity, and it can be terrible.

[0] https://archive.curbed.com/2018/4/10/17219786/buying-a-house...

[1] https://www.usinflationcalculator.com/

[2] https://fred.stlouisfed.org/series/MSPUS Note: prices not adjusted for inflation; adjust manually before making any comparisons to other times.

[3] https://en.wikipedia.org/wiki/Demographic_history_of_Detroit...

[4] https://www.huduser.gov/portal/sites/default/files/pdf/Feder...

[5] https://detroitmi.gov/departments/housing-and-revitalization...

[6] https://www.detroitnews.com/story/news/special-reports/2015/...

[7] https://patch.com/michigan/detroit/5-houses-you-can-pick-lit...


"Speculative asset" dirty words, "basic right" (not so your only "right" in America is to become homeless). Love these abstract discussions with no point of action regarding, does everyone get a house or not and who pays for them?

So stupid and why thing never change because no on can think their way to a point of action.


Land is for renters house is for renters. Basically a deeply ingrained class conflict despite all the irrelevant comments here confusing and obscuring some people are intended to be poor renters.


Basic human rights are largely bulkshit to cover up the real motivation in the U.S. elsewhere,money.

Unbelievable many here buy into the quaint notion anyone cares about everyone having a roof over their head the own and can then pay rent through taxes.

If you want your veil of a lie that everyone gets a house they own you have to make it so, not whine about a reality you are way late to discover. Geez.


Owning your own house and paying rent through taxes is a priviledge not a right in the U.S. Which is to say you are buying into quaint myth in most of comments here. An example of how a lie justifies a system of corruption and exploitation.


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What is a human right to you then? I think of human rights as those things required by all humans to live and be healthy, but you must have your own definition.


Probably a case of negative rights versus positive rights

https://alabamapolicy.org/research/understanding-the-differe...


That’s just the latest justification for the lack of critical thinking around what actually constitutes a right. Those “negative vs positive” rights people don’t seem to have any problem with the “right to an attorney, if you cannot afford one then one will be provided for you”. It’s always been an incredibly disingenuous argument.


Sorry, this is a strawman argument. You just claim without proof that all of these people have no problem with some random right and therefore the argument is disingenuous?

There are definitely people that don't think a right to a free attorney should be a right. There are also people who think that it's okay for this to exist but doesn't necessarily correspond to the same level of a right as a negative right like free speech. These are entirely consistent positions to hold.


It’s not a human right to have an attorney. It’s done by the government to legitimize its courts. It’s difficult to justify the use of force (court system and associated outcomes) if those you accuse of violating the state do not have the ability to competently defend themselves from the accusations.


I mean, plenty of them do, actually...

I agree with you, and I think what takes it apart is starting to think about the fact that humans are social, it is not really possible to be fully human apart from a community. The idea of an independent individual unreliant on anyone else as a starting point, which I think is the basis of this "negative vs postive rights" framework, is a myth, is not how humans work. The questions are what kinds of communities we want, how we want to relate to each other -- not whether to.


I don't consider (breast)milk a baby human right, much less diapers.


This is part of what I'm choosing to call the Tyranny of Austrian Economists [1]. There is an irrational belief, particularly in the US, that the market will somehow magically solve everything.

What you have with institutional investment in real estate, NIMBYism and the treatment of housing as an asset where it becomes a political goal to increase its value (and thus, by definition, reduce its accessibility) is an example of the exploitation of inelastic demand.

People need housing. There are other things they need like food, which has also been commoditized [2]. How about insulin? By having super-expensive insulin in the US you are quite literally profiting off something that people will die without.

Government is what's required here to protect people from predatory hyper-capitalism. It's also why any ideas like anarchism and libertarianism are so stupid.

Debt is built into your existence. Thing slike the commoditization and profit-seeking of inelastic demand are designed to keep you in debt, at work and compliant. It is a systemic problem.

On a personal level, yeah this isn't something I'd want to work on. You also have to live in the world so I don't really blame individuals for doing what they have to go to get by. For those of us who are fortunate to have choices on what not wo work on, yeah I'd hope you'd choose something that isn't designed to profit from human misery.

My one piece of advice is this: if you do choose to do something morally questionable, for your own sake, don't try and rationalize it. Be prepared to say "yeah this thing sucks but a few years of this will make life-changing money" or something like that. Personally, agree or not, I'll respect that as honest (FWIW). Just don't create some contorted rationalization for how it's actually ethical.

[1]: https://en.wikipedia.org/wiki/Austrian_School

[2]: https://theweek.com/articles/492432/did-goldman-sachs-provok...


I'm having trouble understanding your claim that "markets don't solve everything" and then give an example of a market, that you claims has been captured by unethical interests.

I mean yeah, of course the market doesn't solve that problem, because... it's not a free market?


No. I am against any "Government is your big brother" kind of thing, real estate is just like any other goods, like an internet or water or electricity, nobody feels uneasy when these were commoditized, so why would anyone feel same about real estate?


> Government is your big brother

Government IS your big brother, in the sense that it's a means of ensuring that a single individual can't run roughshod over the rights of others. These "government bad" hot takes ring so hollow at this point. We live in a society. That bespeaks responsibilities to our fellow citizens.

> nobody feels uneasy when these were commoditized

(I bet a sizable portion of the UK is feeling particularly uneasy about water commoditization right now.)


OBEY


> basic human right to have a roof over one's head

Is that a basic human right? If you build your roof, are you then required to share it with others? Why can't they build their own? Why should you build one if someone else already has?

Starting with that assumption severely limits the conclusions you can come to, doesn't it?


If not housing, what do you consider to be the set basic human rights?


What if no one wants to build you a house? Are your human rights being violated because others want to use their doing other things than building you a home?


> I do not understand how will someone expect for future generations to achieve their own personal freedom and living inside their own four walls.

Why would that be desirable?


Otherwise it would lead to a concentration of wealth among the few, and increase the gap between the rich and the poor. And are you asking why personal freedom is so important to people?


People can invest in stocks/index funds. Why is real estate only route to 'personal freedom'.


Because you need a home to live in, the same can't be said of securities.


Nothing wrong with renting, economies of scale make it cheaper than owning unless the government decides to ruin everything. (London vs Paris is a great example of this)


How can renting from a middleman who owns it be possibly cheaper than owning it directly? Unless the middleman is a charity which rents at a loss.


Middleman maintaining 100 apartments can do so for less money per unit than the guy maintaining a single apartment.


Wat? Is this skipping the real world of every condominium building apartment owner paying a maintenance fee and having a say in where/how the money gets allocated?

When you rent, you just give the power of choice away and have misaligned incentives (when you own, you give more of a shit than when you are merely extracting profit)


No, you’re ignoring all the maintenance your landlord would usually be responsible for.

Things like internal plumbing, internal wiring, air conditioning and appliances.


Why can't the owner pay a company to deal with that? You are conflating the part of the remuneration for the landlord that has to do with actual services rendered, with the part that simply has to do with the monopoly on capital rights.


Exactly. Economies of scale + the simple fact of things like a roof for 2+ story block of apartments is going to be far cheaper to replace than a roof for the same number of houses as units.


I wasn't aware that you couldn't own flats.


i don't have 'personal freedom' because i rent ?


Yes, you have less personal freedom to make changes to the house and your own lifestyle if you don't own the house.


You certainly have less of it.


Surely it's the other way around. The renter has far more freedom, they can easily pack up their things and go. The renter has also has far fewer responsibilities than the owner.


They would still need to complete their lease or pay the penalty, I dont think 'easily' is the appropriate adverb. Besides homeowners can also do this, it's called selling your home, people do it all the time albeit with a bit more paperwork than the renter.

The lack of freedom derives not from imaginary mobility constraints, but from the provision of shelter coming from a 3rd party landlord. Your roof is resting on the whims of a profit motive for someone who owes you nothing.

You can't see how that presents a fundamental lack of independence?


> whims of a profit motive for someone who owes you nothing.

what whims? I have a lease for X months. Yes all bets are off after that. No one is acting on whims.

Homeowners are also at the whims of cost of labor to make essential repairs , cost of necessary appliances , property tax increases, employment opportunities near your home if you lose your job and whims of the banks that can foreclose your home.

Nothing in life is a guarantee . Owing mortgage payments to a bank vs renting isn't more freedom. Renters can become homeowners if they want and homeowners are forced to become renters ( remember 2009 ) . So i don't really understand what 'freedom' being a homeowner gives you. Your financial status give you freedom not your home ownership status.


Then by extension, homeless people have the most personal freedom of anyone.

What kind of ridiculous argument is this?


I think yours is the ridiculous argument, how are homeless people relevant to this conversation?


They have more "freedom" than renters, right? They can pack up and head somewhere else whenever they want (as they're not bound by a lease), and they have absolutely zero responsibilities to anyone other than to obey the law.

But they have the least personal financial freedom, is my point.


How do homeowners have more personal financial freedom than renters with their money in index funds?


Thomas Sowell - Basic Economics:

Chapter 1: What is Economics?

“The fundamental principles of economics are not hard to understand, but they are easy to forget, especially amid the heady rhetoric of politics and the media.” In Chapter 1 of Basic Economics, Thomas Sowell introduces the concept of economics, scarcity, and productivity:

Economy – a system for the production and distribution of the goods and services we use in everyday life

Economics – the study of the use of scarce resources which have alternative uses

Scarcity – the wants of everyone add up to more than what exists; without scarcity, there would be no need for economics

Productivity – the effectiveness of effort as measured at the rate at which inputs are turned into outputs

Role of Economics – helps us try to make decisions that make the most of the options that we are presented with in life, especially when allocating resources

Chapter 2: The Role of Prices

In Chapter 2 of Basic Economics, Thomas Sowell discusses the importance of prices and shows how resources are allocated:

Market Economy – an economic system in which production and prices are determined by unrestricted competition between individuals and businesses, not central planners

Transactions – the instance of buying or selling between consumers, producers, retailers, landlords, or workers on whatever terms they can mutually agree on

Prices – an amount of money that conveys the terms of the transaction not just to the individuals immediately involved but throughout the entire economic system

Supply – the tendency of producers to supply more at a higher price and less at a lower price; the quantity supplied varies directly with the price

Demand – the tendency of consumers to buy more at a lower price and less at a higher price; the quantity demanded varies indirectly with the price

Link: https://theprocesshacker.com/blog/basic-economics-thomas-sow...


I've no idea what your point is supposed to be with this dump of opinionated definitions of economic terms.


Nice condescending comment.

https://en.m.wikipedia.org/wiki/Economic_ethics


So what? OP made a question about ethics.




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