The anti-abundance critique on housing is wrong

https://www.derekthompson.org/p/the-anti-abundance-critique-on-housing

by rbanffy • 12 months ago

518 776 12 months ago

donatj3• 12 months ago

The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy.

Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.

Ericson2314• 12 months ago

Asking why they don't build affordable housing is like asking why don't they build used cars

bsder• 12 months ago

The problem is that you don't generally destroy the used car in order to build a new one. So increasing the new cars on the road eventually also increases the number of used cars on the road.

tiahura2• 12 months ago

Why don't they build $10,000 Ford Rangers anymore?

PaulHoule• 12 months ago

The project to build

https://www.libraryplaceithaca.com/

was almost a decade late, like a nuclear reactor, and they realized only after it was built that there is no market in our town for "luxury senior housing" because seniors with money go to Florida or Arizona. If they could fill the places you might say that it's better business to build expensive rather than cheap apartments but when these places are vacant you start to wonder if they are farming tax writeoffs or something

https://www.youtube.com/watch?v=9wfblqh9icQ

What you expect first is they are going to tell the local town they can't pay the property taxes, in a few years they'll tell the bank they can't afford the loans they took out to build it.

Other "luxury apartment" projects outside of Collegetown usually have some segment of subsidized "affordable" units, one of these has at least two police calls to it a day and in the last few weeks these have included murder and arson.

galangalalgol• 12 months ago

Except that outside of Japan, it is unusual for detached homes to depreciate in value. Apartments though you do have a point. Unless the location adds the value they will depreciate over time.

infotainment• 12 months ago

Exactly -- all new housing is going to be marketed as "luxury".

Who is going to build a brand-new apartment and say "well, this is janky low-quality housing, you might want to live here if you're poor or something"?

elliotec• 12 months ago

No… it’s like asking why they don’t build cheap cars. Which they do.

lambda• 12 months ago

This is a perfectly succinct way to put it.

New housing is simply more expensive; so it's marketed as "luxury", and it's sold at a premium to the higher end of the housing market. This reduces demand for the older, more affordable existing housing stock, and with depreciation and wear and tear, the new housing will become more affordable as time goes on.

If you're in a market with a shortage of housing, those with more money will simply outbid those with less, even for older, less desirable housing. I've seen it, where when I moved out of my last apartment before I bought a house, my landlady raised rent considerably when looking for a new tenant, and even then she got a tenant who wanted to pay her over the rate that she was asking for to ensure that they were able to get the apartment over all of the other applicants. Wealthy empty-nesters who were downsizing, and willing to pay a premium for an older apartment in a desirable neighborhood, forcing out anyone who might have otherwise been able to afford it.

So yes, while it does help for there to be some push to build more affordable housing, if taken to an extreme building only luxury housing will leave an unbalanced market, in a lot of cases building luxury housing is exactly what you want to do to reduce the competition for the existing, more affordable housing stock.

steveBK1232• 12 months ago

Exactly

Plus housing you are mostly paying for the land. The land is expensive because it is finite and because zoning constrains how much housing you can build on it.

In many places the land is 2/3 the cost of the housing. The cost difference in building what left nimbys deride luxury and what would be considered affordable is really marginal. It’s like $100k in finishes in a $1.5M condo type difference.

Der_Einzige• 12 months ago

r/cars swears up and down that they'd buy a brown manual wagon pre-used from the factory!

donatj3• 12 months ago

Because most people are out here driving used Ferraris and Koenigseggs and living in old mansions?

Your argument falls apart when you realize they manufacture and sell explicitly affordable cars. It's nearly half the market.

AlexandrB• 12 months ago

Toronto's housing market has a similar problem, except they also mostly built one bedroom shoeboxes for investors. Will be interesting to see how this unwinds[1].

[1] https://financialpost.com/news/toronto-condo-market-falls-of...

JumpCrisscross7• 12 months ago

Affordable housing is NIMBY whitewashing of reducing supply through rationining. (Note the supporters of affordable housing programmes count the largest landowning families in San Francisco and New York among their ranks.)

There is an article on the front page, right now, about Denver moderating its rents through construction [1]. We've also seen this in Montana [2].

[1] https://denverite.com/2025/07/25/denver-rent-prices-drop-q2/

[2] https://montanafreepress.org/2024/09/09/can-bozeman-find-rel...

echelon2• 12 months ago

100%

"Supply and Demand" is a law of nature.

If you build infinite luxury apartments, in the limit their value is zero.

Build more luxury housing and the inventory increases. If you've met the city's housing demands (which you probably won't since nearly every city is behind on meeting demand), then it follows that typically less desirable inventory experiences less demand and will subsequently experience a price drop.

The problem is nobody is building enough. The equations of taxes, property value, and developer profit all balance each other out and control the rate of building. Regulations slow this equilibrium even more.

A few policies that can help:

- Remove stupid regulations against building dense housing. Keep the fire safety regulations, but nix the multifamily zoning regulations, the building height regulations, curb space and parking space minimums, etc. There are so many NIMBY and outdated 1950's era regulations that make it costly and time consuming to break ground.

- Tax unproductive land use, eg. storage units and parking garages. This will convert those plots into housing and businesses.

- Heavily tax unused and dilapidated land that is not currently occupied by businesses or residents. Burned out houses have no place in the city. Tax these properties to the point that they fall into foreclosure and give cities the power to take over the land and sell it at a profit to developers. Give owners the chance to cure the issue, but make quick work of clearing these useless plots.

- More controversially, tax single family housing more than multi-family housing. Tax it proportional to how many people could live on the plot if it were occupied by a 10-story development. Or if you don't want to raise taxes, lower taxes on multi-family housing. This will encourage density.

- Give tax breaks to developers, apartment and condo complexes, and businesses that help underwrite development.

Note that these policies only make sense in dense metropolitan cities. Suburbs and rural areas don't need to operate in this way.

lanfeust613• 12 months ago

There's that, but also it's more difficult to get mixed-density builds than detached homes developed, or the type of builds the left associate with "affordable housing".

While being able to build detached homes faster is nice and all for those on the market, for an effective YIMBY approach allowing density is preferable.

Plus, trying to sprawl out into perpetuity is putting cities in the hole. The suburbs are money pits that are subsidized by the city cores.

kccqzy2• 12 months ago

Building only affordable housing is how you get cities into a downward spiral. The people who want luxury housing are the well-to-do. They probably contribute 10x the sales tax per capita than the people who live in affordable housing. And almost by definition luxury housing causes more property tax to be paid to cities than affordable housing. Both sales tax and property tax revenues shrink. And the city gets into a fiscal crisis. The city reduces services. People leave. Housing becomes more affordable but also more undesirable.

supertrope2• 12 months ago

If US car sales were capped at 10 million cars per year manufacturers would immediately focus on their luxury brands and leave their regular brands out of stock. When you keep strict zoning, give NIMBYs veto power, let environmental review be weaponized as a delay tactic, you are capping new construction.

xnx5• 12 months ago

They did exactly this when supply chain disruptions limited the amount of cars they could produce.

davidw9• 12 months ago

Building "luxury" apartments dropped rents in Bozeman, Montana, which is one of those cities that "everyone wants to move to"

https://montanafreepress.org/2025/06/23/has-bozemans-rental-...

Gigachad4• 12 months ago

Luxury is just a realestate buzzword that means newly built and has stone countertops. Nothing that actually meaningfully impacts the pricing.

nielsbot5• 12 months ago

No matter, it comes down to what people will pay for. At the very least they're selling/renting to people with more wealth.

bardak• 12 months ago

The vast majority of "luxury" properties are just regular property that spend a marginal amount on nicer appliances and finishing.

JKCalhoun• 12 months ago

Agree. I am not seeing starter homes being built in Omaha. They keep moving further out west, north and south — there's nothing there but fields and fields. I'm not sure that they're in anyone's "back yard".

And yet, they build expensive homes because (I assume) that is where the bigger profits are.

xnx5• 12 months ago

Today's affordable housing are the "luxury" units from 30 years ago. If you want to decrease the cost of housing you need to build more of whatever people will buy.

bwanab• 12 months ago

Presumably, if they're sitting at 20-30% occupancy, somebody (like the developer) is going to be having trouble paying their bank loans. You understand what happens next? (hint: prices plummet). If that isn't happening then your diagnosis of the problem is very likely wrong.

appreciatorBus5• 12 months ago

When housing is scarce, all housing, even 100 year old dumps, will sell or rent at luxury prices.

No one is building apartments made of solid gold or concrete mixed with diamonds. They are building thoroughly ordinary buildings of concrete, wood and drywall. They fetch "luxury" prices & rents because for each one that exists, there are 40 ppl trying to live where, so they raise the price or rent to capture the riches of the 40, despite there being nothing particularly special or expensive about the physical structure.

You can do this with non-profit/govt/social/public housing too - if there isn't enough of it, every unit will require a "luxury" of time to wait for it to become available, even if the nominal price or rent is affordable.

s1artibartfast3• 12 months ago

Where is this city with 20% occupancy?

tptacek37• 12 months ago

So much of the journalism we read is heavily processed and barely-reported and it's startling to see how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed.

We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.

I've been loving Thompson's substack (which is mostly not about housing policy so far).

delusional• 12 months ago

I sometimes think back to a passage in "dialectic of enlighenment" where the authors write what amounts to "input without analysis is meaningless, but analysis without new input is madness as the analysis eventually becomes only analysis of other analysis".

I think that generally a true problem nowadays. Popular culture does a lot of "analysis", but not a lot of reality seeking.

chubot3• 12 months ago

Yes, and I found Derek Thompson and Ezra Klein to be very credible on Lex Fridman:

Ezra Klein and Derek Thompson: Politics, Trump, AOC, Elon & DOGE - https://www.youtube.com/watch?v=DTPSeeKokdo

I like when the right and left can actually talk to each other -- solutions are more likely to emerge that way.

They had a meta-discussion of the fact that Fridman has been "coded" by the left (Thompson and Klein firmly representing the left).

I get that, because Fridman can be so uncritical that it can rise to the level of shilling.

But I also find it curious that many on the left won't sit for 3 hours with him. In contrast, Thompson and Klein sat for 3 hours, which shows me that they have something to say which stands up to scrutiny.

They have something to say that doesn't have to be carefully boxed into 30 or 60 minutes of talking points.

---

Related: even though Fridman can be annoyingly uncritical, I think this also serves the purpose of journalism. Because he gets the primary sources to talk freely.

For example, IMO this part an interview with Demis Hassabis is revealing. He asks if they're worried they will run out of high quality training data:

https://youtu.be/-HzgcbRXUK8?t=3931

From my perspective, Hassabis gives a mealy-mouthed answer about generating synthetic data of the right distribution, and then they change the subject. I would bet there's a lot more to it than that. If they had a good angle of attack, I feel like he'd be more excited to talk about it, and say something more substantive.

I guess you can argue that he's being cagey to not reveal anything to competition, but it seems like a real point of concern to me.

The rest of the interview is talking about AGI time frames and similar sales talk. Whereas my takeaway is that there's significant worry that LLMs are limited by training data, because they interpolate from it (rather than extrapolating), and are inefficient at using it.

tptacek37• 12 months ago

Fridman is on the other end of the spectrum I'm describing.

dannyobrien• 12 months ago

I've been involved in a lot of discussions about "what is journalism? what do real journalists do?", and the best response I've heard was from Ian Betteridge (of Betteridge's Law fame), who told me "Journalists pick up the phone." It may have already dated as a pithy description, but the idea of literally calling[1] people to fact-check or dig deeper is a low bar that a surprising amount of current journalism doesn't clear. And I say this as someone who has definitely done the non-journalism: just writing an opinion, or a column, or blog post, or whatever. Or, perhaps most insidiously, when you have a thesis for an article and you just collect the (partial) facts you need to flesh out that thesis.

I know why people blame the internet, the drop in rewards for journalism, the pressures to churn out text, that has led to. But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do. But it's as Thomas says, that scarcity means that it's still as valuable (and recognisable) as it always was.

[1] Or emailing -- but emailing, and emailing, and emailing, then calling, and emailing again until you get an answer.

Terr_• 12 months ago

But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do.

Somewhat-related to another front-page item today about, how lots of jobs sound kind of crazy if you really detail them out: https://news.ycombinator.com/item?id=44710651

starkparker• 12 months ago

I know why people blame the internet, the drop in rewards for journalism, the pressures to churn out text, that has led to. But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do.

As someone both built for and trained to do it, I can tell you I'd be making at least US$150k/year less if I was still doing it. I wager I'd be short about $1.25M in career earnings through just salary in the time since I moved from the copy desk to tech.

That's factoring in how, through the first third of my tech career I was still making just $35-60k/year. And I was ecstatic, because $35k was a five-figure raise over running the front section of a daily newspaper.

Every person in the first two newsrooms I worked in is either dead or has left the journalism field completely, including a Pulitzer Prize-winning author and the entire team of editors, artists, and photographers who worked on the winning story. Most are now in PR, consulting, or (as a symptom of being near the Gulf Coast) in some arm of the fossil-fuels industry. One of the last whose career I keep track of just took up mail-order baking.

It's a financially unsustainable field in any market. At 5 years' experience at the head of the editing wheel, I was living paycheck-to-paycheck paying just $400/month in rent, living with two roommates in a single-wide trailer in the middle of a sugar cane field.

The vast majority of those City Desk-style journalism jobs made primary-school teaching salaries look attractive _25 years ago_, much less now. By the time I left, all of those jobs that I knew of had either moved to contract gigs or stringers (freelancers paid by column inches of text) unless you were in a big-city market or working for a regional/national paper.

The myth of building up a journalism career at an institution from the bottom of the org through shoe-leather reporting alone, without already knowing or being related to someone who could move you ahead of the rest, was already far past dead in most of the US.

If I could find a journalism job that paid half what I make now, made me travel constantly, had shit benefits, got me put on watchlists, made me deal with some of the slimiest people on the planet in the forms of career local politicians and court lawyers on the daily, and put me in precarious situations... I'd still probably take it, because I miss it every day. But that job flat-out does not exist in any form that I'd get a callback for unless I married into a publisher's extended family, and hasn't for decades.

Animats2• 12 months ago

Reporters used to start at something like the City News Bureau.[1] For a century, the City News Bureau covered local news for Chicago and sent it in to the local newspapers. Lasted until 2005. Young reporters started there, covering every police station, every major crime, every major fire, every major trial, and getting the facts right, or else. The bureau`s unsentimental motto: ”If your mother says she loves you, check it out.”

We need that again. As I point out occasionally, read news, and ask yourself which stories started out as a press release. For the City News Bureau, nothing started as a press release. They had people pounding the streets of Chicago for a century. Today, the pundit to reporter ratio is far too high.

There's a great book about the Bureau, called "Hello, Sweetheart, Get Me Rewrite". (by Dornfield, not the one by Sears, which is something else entirely.)[1]

[1] https://www.chicagotribune.com/1990/06/20/if-city-news-burea...

[2] https://www.amazon.com/Hello-Sweetheart-Get-Me-Rewrite/dp/08...

api• 12 months ago

The problem is that nobody would pay for it. People expect news to be free, and click bait and lazy copy paste or LLM journalism is cheaper and works just as well to get clicks for ad dollars.

Would people pay for real journalism?

gsf_emergency_2• 12 months ago

Sorry to derail this thread on journalistic merit..

I just thought that this other thread on housing microeconomics is worth pointing out, to anyone who might be excited about the prospects of enlightened tax policy

https://news.ycombinator.com/item?id=44750961

This is most clear in insurance data where replacement cost is isolated from land value.

dlcarrier7• 12 months ago

Legacy journalism has changed from a low-barrier-to-entry working man's occupation, with entry level reporting leading to high-paying punditry, into a high-barrier-to-entry ivy league occupation with new entrants to the field expecting prestigious positions from the start.

Tiktaalik4• 12 months ago

Yes the deeply depressing thing is that these sort of city news articles are now very much taken verbatim from press releases, and those press releases are from professional police communications departments, and so this gives enormous new powers to the police in able to shape the broader narrative as their politics and agenda see fit.

For example we can see here that this news article is lifting directly from the police press release. https://bsky.app/profile/kwardvancouver.bsky.social/post/3lu...

Maybe it wasn't even an overworked city reporter that did this but simply an automated AI creating news articles straight from the police press releases.

nathan_compton4• 12 months ago

This article is good, but the phrase "antitrust left" really turned me off. I am probably some kind of a leftist (I want higher taxes on rich people and a society much more welfare oriented with a substantial degree of labor and resource allocation performed democratically instead of by markets) but I don't know a single leftist who actually cares about this housing shit except to think that houses should be cheaper by any means necessary. Like the idea that there is an active contingent of leftists trying to construct some kind of defense of the current housing system or critique of reforms (in general) aimed at making it easier to build houses strikes me as truly bizarre.

There may be some environmentalists who have housing as a pet peeve or something, and there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way.

tptacek37• 12 months ago

I live in a very wealthy, extraordinarily progressive muni (almost certainly in the top 5 nationally), and my primary political project is zoning reform, and I assure you that left-NIMBYism is a thing, and that the "we should make blue state governments perform better and increase supply of things people want" thesis of "Abundance" (Thompson and Klein's book) is a bête noire among those leftists.

The argument isn't that the left broadly construed opposes housing legalization! Just that there's a prominent faction of them that do. Right-NIMBYs are a much bigger problem across the US.

Thompson recently recorded a podcast episode with Zephyr Teachout, taking the "we shouldn't do anything before we address antitrust" side of the argument; you can listen to it if you think "the antitrust left" isn't a real thing. Understand: the issue isn't antitrust; it's a totalizing worldview based purely on antitrust. Antitrust is probably super important! But where I live, zoning reform is much more important.

Keep in mind: Klein and Thompson's political project is a plan to organize the Democrats. They're not talking to the Republicans. Not in the sense they're talking to Democrats, at least. I don't think they could make that much clearer than they have.

Alive-in-2025• 12 months ago

Excellent comment. I agree that not many leftists support the current housing system. Probably only some existing home owners are excited about how it works today - they may want home prices to stay high. I'm lucky to be a home owner but I also see that the current system is incredibly destructive, having not enough homes and very high home purchase prices is really hard on people. We should not have to spend so much of our income pursing a home.

svachalek• 12 months ago

"there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way"

People tend to call the Democrats the left, as they're at least somewhat leftward of the Republicans. It's at least easier for discussion purposes than speaking of the right and the other right.

lanfeust613• 12 months ago

houses should be cheaper by any means necessary.

That's basically the position Klein has in the book Abundance, but everywhere I go online the left automatically comes out hostile to it or anything that embraces market solutions. Your anecdote might be true but beyond your small sample size it doesn't seem representative. Broadly, they want populist solutions. This is why Sanders and Warren gave a lukewarm criticism of tariffs, and why they like price controls for grocery stores despite their having small margins, and risk of food shortages it could bring.

energy1237• 12 months ago

Mamdani - rent control. Dean Preston - NIMBY. UK Greens Party - NIMBY. Australian Greens Party - NIMBY.

Explain?

cocaclub5• 12 months ago

My guess is that the "leftist critique" isn't one of not wanting new houses built, but of not wanting extensive government subsidies and political energy to go to builders and other groups who will not solve the problem, a la our storied history with broadband subsidies.

This pitched debate may very well simply represent an attempt to forestall action by bogging efforts down in debate over what's effective or correct, of course. It's worked for any number of groups looking to forestall what seems like an obvious and inevitable solution: reducing lead exposure by banning its use in consumer products, reducing tobacco-related illness by making it difficult and more uncomfortable to partake, and, in our case, making housing affordable by letting prices fall.

crtified2• 12 months ago

It's a disturbing trend that extremely complex issues are framed as a 'symptom' of broad political leanings. At the very least, it's a distraction and disservice to their own good argument, when an otherwise-intelligent narrative constantly reverts back to the polarisation "it's mostly those Others, from the Other Side".

Just let arguments stand on their own merits. The minute an article includes the term "lefties" or "righties", it's gone wrong imo.

mgfist• 12 months ago

You can just look at the empirical evidence. Where are homes being built? Primarily Texas, Florida, Nevada, Arizona. Where are they not being built? New York, California, Illinois.

Do with that information what you please.

mytailorisrich• 12 months ago

resource allocation performed democratically instead of by markets

The economy is too complex to be planned in details and such attempts at control have failed again and again.

I think some people also miss that, crucially, the market is not an external force, it is just the aggregate of each individual's need, decision, and desires. SO in a way a working market is as free and democratic as can be.

screye2• 12 months ago

If the problem is in our midst, we must acknowledge it.

Local boards in blue cities (California in particular) have blocked new housing for decades using every tool at their disposal. Places that lean left have anomalous rent growth. Places that lean left approve fewer new houses. Places that lean left have anomalously high building costs. This is a matter of written record. Embarrassingly, the only US city to buck this trend is Austin, a city in red-Texas known for a recent influx of radicalized right wingers.

yuppies who want to defend their housing prices

Yuppies, but definition, are young professionals. They don't own houses, they rent. They are the ones paying the high rental costs as neighborhoods gentrify. They want more housing. The 35+ home owning population is the one that blocks new housing.

I don't associate this position with leftism in any way

The leftist - YIMBY conflict shows up on 3 fronts.

First, Leftists have issues with the free-market. They reject market-housing solutions as a way to create new housing.

Second, Leftists like Govts and regulation. YIMBY wants less regulation, so they can maximize for space and price. Regulated Govt built housing is both more expensive and worse than what free markets already provide.

Third, and the most important, is a subtle accusation: "Leftists act just as selfish as everyone else, once they are the ones in power". Having come from an ex-socialist country, I have a deeply rooted belief in this accusation. Not that leftists are worse people, but that people are people, and systems should work around their imperfections rather than having expectations of ideological virtue.

The anti-trust left is a nice way to point a sub-section of the left which uses regulation, social outrage and critiques of free-market as a way to get personally beneficial outcomes, at the expense of the wider population. I understand - #NotAllLeftists. YIMBY & abundance advocates themselves have left-sympathies. But the anti-trust left is a non-trivial number and the conversation must start from acknowledging that they exist.

Nimitz14• 12 months ago

What is it like living a life completely ignorant of reality?

If you'd like to learn, feel free to ask chatgpt on the leftish pushback against abundance. Or historical examples of leftists blocking housing projects. Or environmentalists prioritizing niche interests over those of the general community. There are many, many examples.

bnralt2• 12 months ago

We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.

I think a large part of it is that major news organizations too often don't do this kind of reporting, and often just seem to chase the same hot button topics as the rest of the crowd over and over again. And even then, few really dive into the details.

You're larger point is entirely correct, that there's a ton to be learned from old school journalism, and there are people out there doing it. But it's unsettling how much of it only gets covered by citizen journalists doing this in their free time, not by professionals who are supposed to be doing this for a living.

For example, the D.C. Attorney's Office had been simply dropping 2/3's of the criminal cases that came to them. No one noticed this until a anonymous internet account, DCCrimeFacts, went through the records and realized that this had been happening for years. Once that account wrote about it and it gained traction, major papers like the Washington Post started reporting on the story, it eventually ended up being an issue in Congressional hearings, and lead to changes in the way the U.S. Attorney's Office operates.

The account spent a lot of time digging through records and reporting on issues with the criminal justice system you wouldn't find elsewhere. But it was someone's side project, and there haven't been posts in a year.

Another example is the FAA scandal, when the best information has come from a single blog post by a law student who happened to go through the legal paperwork and was surprised that this hadn't been reported on.

The professional news media outlets do have some good reporters, and sometimes there are important deep dives there as well. But they feel few and far between, usually opting to chase infotainment (or sometimes the pet projects of a particular journalist).

It's amazing how many big stories we only get if some random citizen happens to spend their free time doing a personal journalism project, and if that project happens to get enough traction that people actually read it.

anitil• 12 months ago

Links for the curious - DCCrimeFacts [0] and I assume the FAA case is Tracing Woodgrains [1], though I could be wrong

[0] https://dccrimefacts.substack.com/

[1] https://www.tracingwoodgrains.com/p/the-faas-hiring-scandal-...

verisimi2• 12 months ago

I think a large part of it is that major news organizations too often don't do this kind of reporting, and often just seem to chase the same hot button topics as the rest of the crowd over and over again. And even then, few really dive into the details.

The point of most media is to drive agendas, not uncover the truth. Doing proper reporting would create a problem and get in the way of what you want people to do.

regularization• 12 months ago

how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed.

Matthew Stoller called the people Derek Thompson called, and some said Derek had misrepresented their opinions. So shoe leather caused the narrative of this so-called reputation to collapse as well.

tptacek37• 12 months ago

Link? I'd love to read countervailing reporting.

potato37328426• 12 months ago

and some said Derek had misrepresented their opinions

Because he did? Or because once the entire cumulative picture got painted they looked bad and needed to walk their opinions back?

kortilla3• 12 months ago

That didn’t age well. Based on the response it sounded like he made it up whole cloth or just completely ignored big portions of what the people he called said?

didibus10• 12 months ago

all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed

Did it collapse, or he simply created another dubious narrative to replace the previous one?

tptacek37• 12 months ago

It collapsed.

wodenokoto• 12 months ago

What does it mean that “so much of what we read is […] barely reported”?

tptacek37• 12 months ago

That the people writing it do very little of their own reporting. "Reporting" isn't writing or thinking; it's the act of collecting external facts. Calling a primary source on the phone is reporting; traveling to a location and observing events is reporting. Synthesizing existing facts and reporting is not reporting. It's still journalism! Reporting is a specific practice within journalism.

01HNNWZ0MV43FF2• 12 months ago

It's copy-pasted from Twitter, or it's explicitly a press release from a company with minor rewording. There is no digging for the truth because the news can't afford any labor

verisimi2• 12 months ago

I agree - journalism isn't that hard - Derek Thompson does a good job here. There's lots of good journalism out there.

Still, probably more expensive that having ai write something, and it's not politically on point. Agendas aren't well-served by attempts to describe the truth!

owenversteeg• 12 months ago

We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.

The average article posted to HN is actually of far higher quality than the average newspaper article. Sit down and read many of the “big names” cover to cover. You’ll cry. Contrast them with the same newspaper twenty years ago and you’ll lose hope entirely.

I have a hypothesis. In the 2000s it became more common to Google things instead of asking people. For years, this worked out well, but today the quality of Google (and websites!) is terrible. Today we have an entire generation of journalists that know to do their research with the internet, and surprise, when your inputs are garbage, so are the outputs. The inputs are also homogenized content slop, so there aren’t any real different perspectives. Take any topic, say road construction or a controversial bill or new technology, and read articles about it twenty years ago and now. Twenty years ago you might see some really off the wall ideas - but now, all the articles will be the same. Left, right, whatever, nobody really has any new perspectives, they just have their specific bias projected onto the same universal set of 5 thoughts. If you’ve read one, you’ve read them all.

Back to this article, it seems well written and I have no bones to pick - but what the author did (pick up the phone and call people) would have been entirely unremarkable not long ago. The fact that we’re remarking on it now is an indication of how deeply fucked the profession is.

grafmax8• 12 months ago

Abundance YIMBYism has many shortcomings. It doesn't address the risk of gentrification and displacement, the slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities. Journalistic ideologues deserve little praise for dismantling the weakest counterarguments of their opponents while ignoring core criticisms.

dlcarrier7• 12 months ago

Market rate housing doesn't need to trickle down. Most NIMBY regulations focus on the prevention of building low-value housing. Let developers flood the market with small, high density units, and they'll be cheap right away.

niam2• 12 months ago

It doesn't address the risk of gentrification and displacement

This is a puzzling critique because it seems very much in the wheelhouse of "abundance YIMBYism" to advocate for cheaper housing--an argued byproduct of which is that fewer people are displaced. It probably changes the problem statement of gentrification since, if housing is abundant and displacement is low, there's not much to distinguish "gentrification" from just "investing in the neighborhood".

the critical need for direct public housing to serve low-income communities

This isn't a problem caused by YIMBYism, nor one whose solutions are obstructed by it. We could by that reason malign it for not solving heart palpitations or cancer too.

CPLX7• 12 months ago

What it doesn’t address is the role of finance and the financial sector in explaining why things are the way they are.

It’s not just a missing detail it’s fatal to their entire argument.

Which isn’t an accident, since the goal of the “abundance movement” is to stop the actual progressive movements that want to take on concentrated financial power.

LargeWu14• 12 months ago

Abundance YIMBYism in housing decreases gentrification. Gentrification happens when the only housing that is affordable is in low-income neighborhoods. If there is plenty of housing supply throughout a city, the demand for those low-income neighborhoods is lower.

Nothing in the Abundance agenda states that direct public housing is bad, per se. The argument is that what we need is more housing, and the only realistic way for that to happen is to make housing easier and cheaper to build, typically by easing zoning restrictions and other things like parking minimums that drive up costs.

pitaj2• 12 months ago

the slow and unproven trickle-down effect of market-rate housing

Slow and unproven? Supply and demand is the most reliable law of economics. Cities like Austin that are building market rate housing are actively seeing affordability improve.

Furthermore, even if it wasn't sufficient, abundance YIMBYism would still be helpful and necessary.

aprilthird20212• 12 months ago

gentrification

Gentrification isn't actually a problem if it doesn't force lower income residents to leave. They wouldn't be forced to leave if their housing wasn't some of the only options for higher income people to inhabit

Aunche2• 12 months ago

These are ironically the weakest counterarguments to abundance housing. Rich people don't move to a city because of their love of 5 over 1 buildings. Otherwise, developers could just build them in rural Kansas and everyone would be happy. They move the jobs and culture, which doesn't change regardless of any new housing built. Making it easier to build privately owned housing also makes it easier to build publicly owned housing. Public housing projects are also delayed by permitting and environmental reviews and have to pay for inflated land prices and parking spaces.

screye2• 12 months ago

slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities

Your claims are unsubstantiated. I've only ever seen vague critiques by anti-abundance commentators. If you think YIMBY is wrong, then be specific in your criticisms. There is nothing special about direct public housing. It is housing built by the govt. The govt gets caught between regulations, is slower, wasteful & pays higher wages to workers. It's market rate housing but worse in every way. Chicago [1] is contemporary proof that Govt. can't build housing.

On the other hand, YIMBY Austin [2] has seen slower rent growth despite rapid migration over the last decade.

gentrification and displacement

You realize this is a home ownership problem right ?

YIMBY doesn't cause gentrification. It is a balm to reduce the pain of inevitable gentrification. A neighborhood gentrifies because increased economic opportunity draws new transplants in. If housing supply is limited, then existing residents are going to get priced out one way or another. As a neighborhood starts to gentrify, YIMBY redevelopment projects roll in & existing landowners see large windfalls. It's great if you own. Gentrification is only bad if you rent. Even then, YIMBY redevelopment projects increase housing supply, giving locals an option to move to home ownership and reduce the magnitude of rent spikes. It curbs the supply crunch.

Anti-abundance people don't have a coherent alternative other than rent control. Rent control has an unbeaten track record of failure in the western world. Either, prices diverge [3] and create a rental class system between new tenants and old residents. Or, they turn dilapidated like America's famous inner-city 'projects'.

There are 2 ways to look at it: the empathetic lens vs the pragmatic lens.

We've looked through the empathetic lens for the existing residents. But, from a pragmatic lens, why do they deserve to live exactly where they want to ? Yes, A city should provide sufficient housing to earning families within its boundaries. But, why should a person deserve to live on a specific block over another ? The existing renter had a choice to lock a spot down by buying it, and they didn't. Now, the renter is owed no such right. The newcomer and the old renter both have a valid claim to reside on the land, and rent control takes an unequal stance by favoring the older renter over the newcomer. Even in its best rendition, rent control is discriminatory. And rent control's best rendition lives in the same realm as Santa Claus or True Communism, called 'things that never happen'. At least YIMBYism buys time and opportunity for the older renter to figure out their next move.(opportunity to buy new housing, time because rents creep up slower)

[1] https://citythatworks.substack.com/p/construction-costs-for-...

[2] https://constructioncoverage.com/research/cities-with-the-la...

[3] https://www.theguardian.com/commentisfree/2025/jun/30/rents-...

ecshafer• 12 months ago

Your arguments are not backed up by anything.

gentrification and displacement

These are not actual issues with regards to housing being too expensive. These are pet issues divorced from economics.

the slow and unproven trickle-down effect of market-rate housing

This is absolutely proven in the data, and even a basic thought experiment using the pigeon hole principle will show that more houses means the prices drop of existing stock.

critical need for direct public housing to serve low-income communities

Why is this a critical need? More housing being built could also mean more public housing, but removing zoning and land use regulations doesn't hurt this.

It seems you are more disappointed that your personal pet political issues are being ignored in favor of a market solution to house prices.

socalgal2• 12 months ago

gentrification displacement is not a thing

Studies show the same percent of people move out of neighborhoods regardless of whether or not the neighborhood is gentrified. They also show that those low-income people who stay in a gentrified neighborhood see their incomes rise. Those low-income people who are in a neighborhood that is not gentrified see their income go down.

Your intuitions are wrong following them is making the problems worse.

https://www.youtube.com/@justine-underhill

steveBK1232• 12 months ago

Journalism has all the problems of being a shrinking high status low income industry. Living in NYC I know a few journalists, and if you scratch below the surface on many of their bios they are quite often from wealth of one form or another. At least enough wealth to subsidize them living in an expensive NYC zipcode on awful starting pay with low growth and ceiling.

So it really is quite a monoculture. 20 years ago they all lived in UWS, now it's somewhere between Park Slope and North Brooklyn. Ever noticed how many local color stories used to be UWS focussed and are now Brooklyn? A lot of trends pieces are "stuff I noticed in my friends group" type of depth, and they all have the same friends groups. They literally don't know what they don't know.

CPLX7• 12 months ago

This has nothing to do with journalism. Both sides of this argument are advocates for points of view.

evil-olive3• 12 months ago

The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.

ctrl-F "RealPage" - nothing. hmm.

ctrl-F "rent" - also nothing. really?

from about a year ago: Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Renters [0]

The Justice Department, together with the Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, filed a civil antitrust lawsuit today against RealPage Inc. for its unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.
...
Another landlord commented about RealPage’s product, “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing…”

if I hear about antitrust in the context of housing policy, RealPage making it easier for apartment buildings to collude on rent prices is the very first thing that leaps to mind.

it seems like Thompson is being awfully selective about which antitrust-related criticisms he's responding to here. he seems to be focusing exclusively on building single-family homes, and completely ignoring the concrete example of monopoly power being used for apartment rentals, and antitrust laws being used to address that.

0: https://www.justice.gov/archives/opa/pr/justice-department-s...

freddie_mercury3• 12 months ago

Thompson is responding to a specific paper.

'One of the most detailed articles in this space is an analysis of the Dallas, Texas, housing market by the lawyer and writer Basel Musharbash. In “Messing With Texas: How Big Homebuilders and Private Equity Made American Cities Unaffordable”'

Musharbash doesn't mention RealPage either, so go blame him, since he doesn't think RealPage contributes to Dallas's problems.

smcg• 12 months ago

Thompson writes these articles to deflect valid criticism.

evil-olive3• 12 months ago

Thompson is responding to a specific paper.

yes, he's responding to [0] which was written by Musharbash and published in Matt Stoller's newsletter.

and as I said, he's being selective about what criticism he's responding to and what he's ignoring. because Stoller has also published, in the same newsletter, articles about RealPage price fixing [1, 2].

Thompson says:

The antitrust left, however, claims...

if he's going to say "here's what the antitrust left believes" and then proceed to debunk it, I think it's reasonable to point out that his response is cherry-picking only part of what that "antitrust left" believes.

of course, if he wants to publish a follow-up article defending RealPage, I'd love to read it.

0: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

1: https://www.thebignewsletter.com/p/antitrust-enforcers-the-r...

2: https://www.thebignewsletter.com/p/up-to-a-quarter-of-rental...

jeffbee• 12 months ago

Can you cite some evidence of a place where RealPage's supposed power has led to a consumer harm like higher rents? I may be biased because my research has been cited by RealPage in their suit against the city of Berkeley, but to me RealPage just finds the market clearing price, and that's not particularly evil in my book.

nradov2• 12 months ago

Collusion among landlords can only work in a housing shortage. With an abundance of rental units, individual landlords would "defect" (in a game theory sense) and lower rents in order to fill their vacant units at the market price.

nielsbot5• 12 months ago

Don't we have a housing shortage? Also, many (institutional?) landlords are happy to leave units vacant and/or evict tenants spuriously for higher profits.

radixdiaboli• 12 months ago

it seems like Thompson is being awfully selective about which antitrust-related criticisms he's responding to here

He was responding to a specific critique of his book. So... yes. That's how that works.

davidw9• 12 months ago

I wish everyone who cares about the price of housing could go to a hearing like this one. Sadly, they happen in every community so if you're curious, you ought to go:

https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...

That is your housing shortage right there.

Now, Real page probably jacks up prices a bit. A bit multiplied by a lot of renters means real harm and it was probably worth taking them to court over.

However, at the end of the day, RealPage is simply not enough to get Los Angeles rents out of Houston property. Supply and demand are still where it's at.

thegrim33• 12 months ago

You're claiming that your idea of 'X' is true, and for evidence of this, you're linking to a site that was created by people whose mission is to advocate for the idea of X.

Am I likely to be getting an impartial view of the situation from a source which solely exists to push X-related messaging?

Is such a group/site really going to give a fair shake to other theories Y and Z, or to conflicting data?

tiahura2• 12 months ago

Why do people think they have a right to live wherever they want? The people Bend are happy with Bend as it is. If you can't afford to live there, move.

ThinkBeat• 12 months ago

There is an incredibly large lobby group who is fully invested in house prices rising or at least not falling, namely homeowners. and since most politicians at a high level usually own one or more houses, they are fully invested in it as well.

jerlam3• 12 months ago

It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments and own undesired property. Cities don't want housing prices to fall, since they were counting on money from developers and property taxes.

waldohatesyou• 12 months ago

I don’t agree with this take, we’re overly simplifying the nature of housing here. It depends on the housing mix as well. If the vast majority of the pro-housing prices crowd is heavily invested in single family residential then they should favour widespread upzoning and deregulation of apartments because that would increase the value of their SFHs through two mechanisms: 1) presumably single family homes will be destroyed so any remaining single family homes become more valuable and 2) every single family home is now a potential townhouse or high density building which increases the value a developer would pay for it.

Are there any serious objections to that line of reasoning?

__turbobrew__9• 12 months ago

Property taxes are relatively independent from the absolute value of the property. Only the relative value of a property to other properties in municipality determines property taxes.

xnx5• 12 months ago

and since most politicians at a high level usually own one or more houses,

That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!

https://nlihc.org/resource/new-census-data-reveal-voter-turn...

brailsafe• 12 months ago

That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!

Even if the data seems to indicate that's true, I do see this statement thrown around a lot without much granularity into the groups counted.

In your link, it's broken down into a few different groups, but in terms of renters vs owners I'm kind of less interested in proportion of people eligible to vote who fit into each broad category, and more interested in normalized categories. How many more people who didn't vote and are renters share a rental unit with someone they're not tied to long-term, or rent alone, compared to people who own alone or own in a long-term committed relationship where both people would be owners and likely to physically vote together, for example.

As in, is there as significant of difference between households of the same structure, income level, age bracket, in terms of voter turnout (a couple sharing the status of renting or sharing the status of owning). I feel like you'd be much more likely to vote if your spouse that you split expenses and responsibilities with also votes, whereas your roommate might not give a damn and it has nothing much to do with you.

Likewise if you own a 1 bedroom condo alone, does that show up as different than someone who rents a 1 bedroom condo alone?

lokar5• 12 months ago

I never see the NIMBY movement really engage with what falling prices would mean in practice. It just seems impossible to be allowed for any really duration over a large area.

I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).

kettlecorn• 12 months ago

I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).

If you read between the lines that seems to be what Canada's approach to house affordability is going to be. Their leaders are promising housing will be more "affordable" but that the goal isn't to decrease home prices.

aprilthird20212• 12 months ago

I never see the NIMBY movement really engage with what falling prices would mean in practice

It means the landed gentry lose, and the working class win. Unlike the status quo of the past few decades where the landed gentry make fistfuls of cash by doing 0 actual work.

Obviously housing prices going down will make some people's assets mixes worth less. That's why they fight to stop building housing. But that's true for lots of commodities and businesses too. Just because many people are invested in diamonds doesn't mean we have to ban lab grown to save diamond prices

munchler8• 12 months ago

There's also a large lobby group that is fully invested in building new houses, namely real estate developers, and since most politicians at a high level usually need large campaign contributions, they are fully invested in it as well.

brokencode• 12 months ago

Are you suggesting that the problem with housing is that we are producing too much of it?

frollogaston4• 12 months ago

Yep. A town can become desirable after its residents carefully built its character and reputation, then suddenly apartment/condo developers want in.

gboss2• 12 months ago

This is not the problem. We should not castigate people who want to build homes and earn a rightful profit from that endeavor. The problem is the undemocratic process that is the town hearing. It is unreasonable to expect working families and young adults to attend week day, day time hearings to state their position on the construction of new homes or anything else for that matter. The atrocities of urban renewal by Robert Moses and his followers in the 50s and 60s which wrecked many urban and black urban communities, many of which still haven’t recovered, led us into this mess. The antidote was that all movements towards progress must be debated by citizens (mostly seniors as they are the only ones with the luxury of time) in a hearing format. The citizens able to participate are most likely not going to live long enough to see the results of their positions anyways. It’s a disaster.

frollogaston4• 12 months ago

That's fine. On one hand the other saying "no" too much will stagnate the local economy, on the other a city doesn't need to accommodate an infinite number of people moving there. Either extreme will hurt property values in the long run, so there's a balance. I've seen places sell themselves out, I've also seen suburban sprawls where naive homeowners feel good about holding a house 20 years only to make 30% gain.

Nobody else should decide the balance but the residents who have semi-permanently set up their lives there. People considering where to move have no skin in the game, they can pick somewhere else if they don't like what they see or can't afford it. Developers at least have something to lose once they've set up shop, but they're still not raising families there. And by "should" I mean, I wouldn't buy a home in a place where homeowners don't have the most say. Those places do exist, and I'd only rent there temporarily.

Gigachad4• 12 months ago

This has just lead to Boomers getting a death grip on every city. Young people are forced to pay out the nose to rent the scraps of housing left, and then also get taxed to pay out the pensions of the same boomers because they moved all of their cash out of the bank and stocks to put in to a 5 bedroom house in Sydney so now they qualify for welfare.

cheriot• 12 months ago

Many of the home owners would win in a freer market because their land would be worth more.

ponector• 12 months ago

Falling prices are bad for economy. Lending brokers, construction companies, material suppliers - all will be hurt if price falls.

The best solution in my perspective is to have stagnant housing prices so eventually general inflation will make housing cheaper.

MetaWhirledPeas2• 12 months ago

namely homeowners

I'm a homeowner and rising house prices are terrible for me. Property taxes have doubled, and the prospect of switching neighborhoods (as one might consider doing for work, school, or other reasons) feels off the table given the high costs involved in the transaction, since agent fees are a percentage of the sale.

But some homeowners are to blame, at the civic level, where those who are happy with the way things are reinforce the roadblocks against affordable housing. Minimum lot sizes and anti-apartment legislation dissuade the pesky low-income riff-raff from moving in.

flustercan• 12 months ago

If we can keep the price of homes flat for 10 years then homeowners won't get hosed (still increasing equity by paying off principle) and homes get more affordable (assuming steady inflation and wage growth)

simpaticoder3• 12 months ago

What about wealth inequality as the root cause of housing shortage? Even if supply is eased, the wealthy (those who have enough capital to earn passive income) will buy the extra supply and rent to the poor. The Piketty effect takes over, they invest their profit in more housing, wealth inequality continues to get worse, and while more housing exists, it owned by an increasingly small cohort.

Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.

burnt-resistor3• 12 months ago

[flagged]

tptacek37• 12 months ago

"Trickle-down" economics is a direct subsidy for high-income earners meant to spur demand. That's the opposite of what increasing the housing supply does.

esseph2• 12 months ago

Trickle down was a Reagan thing.

I'm very confused by your statements.

I mean it was the Big Beautiful Bill that just added 3-5 trillion in debt and reduced taxes on the very wealthy. I don't think those impotent Dems had any sway in this.

tomhow• 12 months ago

I have a soft spot for anyone with a background in Turbo Pascal from the 90s (my father built our family business on Turbo Pascal then Delphi through the 80s and 90s, so I grew up with it around the house).

I just wish you'd dial back the combative tone of your comments on HN. You've been engaging in a lot of political/ideological battle recently, and it would be good if you could remind yourself of the guidelines and make an effort to use HN in the intended spirit.

We're trying for curious conversation here. Different perspectives about economics are very welcome. Slurs and swipes are not.

https://news.ycombinator.com/newsguidelines.html

lanfeust613• 12 months ago

How about for fun, instead of rhetorical devices and snarky projection, just look at the facts. The data on effects of zoning reform in places like Minneapolis and others, about where housing is cheaper wherever it's easier to build, about rent dropping ( https://denverite.com/2025/07/25/denver-rent-prices-drop-q2/) when you build way more units, etc.

tptacek37• 12 months ago

You haven't actually worked this example out. Try it. The wealthy buy the extra supply; they now compete with all the existing supply for tenants. What happens next?

nielsbot5• 12 months ago

Depends on how many tenants there are: is is a buyers' or sellers' market?

simpaticoder3• 12 months ago

What happens next?

We'd revert to the state that applied for most of human history: 99% of humans will be serfs renting from 1% hereditary landlords. We'll have shown the American mid-century home-owning middle-class phenomena to be an historical anomoly. Average living standards will plummet and equity barons will never have lived so well. Any short-term rental rate drops will quickly be erased by a combination of growing population and well-known market manipulation, in particular further wealth consolidation.

Mere millionaires think they are safe; they are not. We live in a world that has a ~10 OOM wealth scale; being at level 7 does very little to protect you from 8s 9s and 10s, just as 2s are powerless to 4s and above. To a 10 a 7 may as well be a New Dehli beggar.

bgwalter• 12 months ago

They leave it empty (that actually happens a lot, especially with foreign investors) or convert it to their 100th AirBnB.

arrosenberg4• 12 months ago

The total housing supply remains static - the number of owners goes down and the tenants increase, so the S/D curve for housing stays the same. Then the wealthy consolidate the supply into smaller, more powerful groups who drive up rents via monopolist and cartel behavior (eg RealPage).

gopher_space2• 12 months ago

Collusion using online management services to fix prices across a region.

I think Washington State is working on legislation around rental services due to this already being a problem in the Seattle area.

“Extra supply” is added to the portfolio containing housing they’ve already purchased. They own part of “existing supply” too.

joe_the_user2• 12 months ago

Yeah, Neither you nor the parent have worked the forces out to describe what's happening now.

What's happening now is the wealth and the middle are buying houses and apartments not for rental income but for appreciation. This motive is what stands in the way of new home building in any given area. This is why rents rise beyond an area can sustain at all - rents are set to maintain the ostensible value of a property - selling an empty property is fine, even encouraged.

The situation is visible everywhere.

danans• 12 months ago

A lot of the supply will become second or third homes for the affluent, or short term rentals, not residentially leased property.

That's already the case with a lot of properties in highly desirable locales whether high demand cities or holiday destinations.

spankalee2• 12 months ago

Where's the evidence that wealth inequality is the root cause of housing shortage, as opposed to say, the real and factual lack of building?

Even if the wealthy did buy up extra supply to rent out, that would only mean increased supply of rentals, which would lower rents.

immibis2• 12 months ago

It can be both. Wealthy people make it illegal to subdivide large housing units.

nicoburns• 12 months ago

If people had the wealth to own land and build on it then they'd build their own.

oarla• 12 months ago

Not commenting on the ethical side of it, in many instances rentals are just a side income, the real value is in the increasing price of the house due to demand outpacing supply. See https://news.ycombinator.com/item?id=37855625 for past discussion on this.

Schiendelman14• 12 months ago

Want something really interesting? There's a pretty decent chance that our wealth inequality is entirely caused by restricting housing supply. ;)

moneycantbuy3• 12 months ago

The ultra wealthy don't even care if it's rented, they're just diversifying their asset portfolios.

lokar5• 12 months ago

Who owns housing is orthogonal to the rent or imputed rent for an owner occupied unit. The effective monthly rent is supply and demand.

lanfeust613• 12 months ago

When interest rates were rock-bottom a bigger chunk of new builds were purchased, but they're not anymore. Vacancy rates in cities, though, are very low, and if you constrain supply of rental units, rent prices go up. That impacts the poor demographic far more. People who rent entire houses are not typically poor, unless maybe you count places where houses are cheap like Mississipi.

The actual data does not agree with you at all. In places that have implemented zoning reform, housing gets cheaper. In areas where it's easier to build (red states), housing is cheaper. There is no reality at all where supply of housing jumps high but prices do also.

Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.

Where investors are concerned, these are purchased to flip, or with the expectation that prices would rise. Given that we had inelastic supply but perpetually growing demand, that was a good bet. So, if you build way more, an investor wouldn't be so confident about that price increase. Now compound that with the risk of borrowing at higher interest rates to buy those properties.

energy1237• 12 months ago

Rental stress is a bigger problem than price appreciation, though. Investors cannot cause rents to increase by buying stock.

__turbobrew__9• 12 months ago

My gut feeling is that wealthy people buying up the housing stock to rent out is not actually as common just supply restrictions not meeting the demands of individuals.

I used to live in Vancouver, and on my street almost all occupants were owners. But guess what, the number of houses on that street has not changes in 100 years, and the number of people who want to live in Vancouver has probably increased tenfold.

The issue wasnt that all the housing stock was bought up, the issue is that housing stock did not increase to satisfy demands.

Additionally, a place like Vancouver is really a global real estate destination. People with money who are not from Canada come to Vancouver and drop a few mil on a single family home and outprice all the locals. If you are buying a house in Vancouver you are competing with wealthy people local, but also the top wealth from across the globe.

BC did pass legislation to make all single family homes qualified for quadplexes, but I think it is too little too late.

Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.

I gave up a few years ago and moved somewhere else. Vancouver is no longer for Canadians.

aianus2• 12 months ago

Why not tax primary residences too? Why should housing hoarders pay no tax when someone who invests in a productive business or hoards mostly useless shiny metals has to pay capital gains tax?

nikanj3• 12 months ago

All of the housing stock was bought up. In 1953.

pembrook3• 12 months ago

Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.

You forgot eliminating favorable taxation for real estate as well.

But actually if you kept all of those factors and simply just increased supply, it would still lower prices. It's not that complicated. It doesn't matter how many incentives you place on top of real estate. If you build more and prices decrease by 20%, it doesn't make demand shoot up by 20%.

The vast majority of people will never purchase more than one home, and will also never leave the metro-area they grew up in.

I think Vancouver people imagine the demand of Chinese real estate investors interested in their city is endless. It is not. Vancouver is the city that has the highest percentage of Chinese-owned real estate outside of China (globally) and its still at only 30%.

And the vast vast majority of cities do not have this dynamic or anything close to it. And the Chinese population is massively declining over the next 40 years, not growing.

appreciatorBus5• 12 months ago

Piketty logic assumes infinite demand. Housing demand is very large, large enough to seem infinite when North American cities have spend 100 years banning every form of housing imaginable except the single family house, but it is not actually infinite.

If Piketty was correct, then inflation adjusted housing cost per sqft floor would always go up everywhere all the time. But we see dramatic differences in different periods of history, between different cities and we see rents stabilize & decline after building booms. We see housing costs go up the most in the places that build the least and the least in places that build the most.

If Piketty was correct, rich people could do this with things other than housing - they could buy cars and rent them out and then reinvest the profits to buy more cars. Ofc this doesn't actually work because there is no scarcity of cars - for better or worse we have chosen to place almost no limits on the quantity and density of cars in any city, state or country, while placing extremely tight & arbitrary limits on the quantity & density of floorspace in every city. For every car a rich person buys up to rent out, a car company reinvests the profits to build 1 more and then some. There is no functional reason residential floorspace cannot be exactly like that.

throwawayqqq11• 12 months ago

The housing market is much more inelastic than eg. the cars market. Whether demand in housing is infinte is a question of scale of population and wealth growth and elasticity. With that given, i would assume the postulated effect of run-off construction and renting, but we only have poluation growth and not the other two.

andriamanitra• 12 months ago

Just off the top of my head I can think of plenty of functional reasons why residential floor space cannot be analogous to cars.

Most importantly location matters. Space and buildings are not something that you can easily ship from one market to another to balance supply and demand. Space is inherently limited and replacing existing buildings with new more efficient ones is also problematic when you have people happily living in those old buildings, especially in high demand areas. Construction work takes time and in the meanwhile the displaced families will create even more demand.

There are practical limits on how densely you can pack floor space before it becomes prohibitively expensive, unsafe, or simply impractical. As you build higher the costs grow exponentially while the livable space per floor keeps decreasing due to the tapered shape of the building and need for larger structural core and more elevators. Above certain height you will be forced to target wealthier residents which means either offices or large luxury apartments that are anything but space efficient.

Construction is extremely capital intensive. A building takes a large upfront investment, and it takes a long time for it to pay off. With cars the cost of making more is marginal once you have an assembly line in place so it's significantly easier to re-invest profits into ramping up production.

Renting real estate makes more sense than renting automobiles because real estate is more expensive, less liquid, and better at holding its value over time. Owning a house is more difficult even when it would make financial sense to do so (not everyone can get a mortgage, or commit to living in the same city for an extended period of time).

for better or worse we have chosen to place almost no limits on the quantity and density of cars

Even worse, most places have chosen to place a lower limit on the quantity and density of cars through parking mandates. It is absolutely insane that we are still wasting space on parking even in densely populated urban centers where it's impossible to accommodate everyone commuting by car.

spicyusername3• 12 months ago

    What about wealth inequality as the root cause of housing shortage?

Keep building.

Eventually there are more houses than people who want to be in them, regardless of whether or not they're being rented or owned.

When that happens you'll see the prices fall. After all, if nobody wants to rent your house, you'll either rent it for lower or sell it.

If nobody wants to buy it, you'll lower the price.

Ad nauseum.

dandanua• 12 months ago

This will not work if there is an exponential wealth inequality in a society, which is where everything is heading.

Tade02• 12 months ago

China did that on a large scale, at one point using more concrete in three years than the US in the entire 20th century.

There's reportedly enough housing stock to house the population twice over, yet prices still only increased.

Where there's sufficient inequality, the country will run out of eligible land before the wealthy run out of money.

tsimionescu• 12 months ago

This only works if all those houses are on the market. Nothing is stopping today's rich people from buying up all new housing, and only letting a handful be on the market so as to not flood the market and not let prices go down.

thrance7• 12 months ago

And who will build homes if there's no one to buy them?

Workaccount22• 12 months ago

will buy the extra supply and rent to the poor.

The wealthy are generally monetarily shrewd, and building homes makes home ownership a worse investment. If there is a deluge of homes being built, the wealthy will take their money elsewhere. Being a landlord typically has ~10% annual return. Compared to just sticking money in the stock market, it's actually been worse as of late.

The goal of the wealthy isn't to make people suffer, it's to maximize their ROI.

uses• 12 months ago

To the extent that housing speculation exists, it's because of the lack of supply. So you have the cause and effect reversed.

imgabe7• 12 months ago

Higher supply still means lower prices. Even if "the wealthy" buy it all and rent it, they are still competing with all the other wealthy who are doing the same thing and that will limit how much they can charge for rent, and will make it a less profitable investment than other things the wealthy could invest in.

Housing is not really a great investment. It's great for small investors because it's the only place where they can invest with leverage via a mortgage. If you have billions there's much better things you can invest in.

reliabilityguy2• 12 months ago

So why are rents falling in Austin for multiple years in a row?

Why did the wealthy simple didn’t buy all of it to extort more rent?

JackYoustra3• 12 months ago

The causality is in the other direction, see (as I posted in another comment) https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...

CalRobert4• 12 months ago

Why is it OK to constrain investments on SFH but not apartments or condos?

hdgvhicv2• 12 months ago

If there’s 1 million people and 2 million houses then the wealthy aren’t going to be. Using up to rent out as the return on investment will trend to zero.

If there’s 1 million people and 500k houses they will buy them up because everyone needs somewhere to live and will keep paying more and more to avoid the overcrowded slums that someone has to live in.

HEmanZ2• 12 months ago

If general housing is abundant enough that it has very low ROI compared to other available investments, then no they won’t buy up housing. One pretty simple way to do this is to raise property taxes high enough that a vacant condo is a very bad investment. This is what it would mean to commoditize housing.

I think it’s a realistic goal for apartments/condos. Single family homes will always be constrained by land.

(Edit): I think you, and a lot of people who are anti-capitalist on housing, make the implicit assumption that all housing is a fixed good. There is only so much housing and our political goal is to allocate that fixed amount. In a lot of major US cities this is sort of true because we have regulated the construction of new housing to the point where even the government can’t build it. But the anti-regulation perspective is that if we get rid of the regulations preventing housing construction, then enough housing will be constructed that the allocation problem isn’t much of a problem. (Or something in between, ie it’s a lot easier to build/buy social housing to give away to people if housing is already made very abundant, and the fact that even governments like California have to spend truly ludicrous amounts of money just to get a few crappy studios built)

denimnerd423• 12 months ago

i hope the next part of his article covers the zoning issues. because I'm certainly not seeing the zoning issues making the homes be on bigger lots or requiring things like 3 car garages? If anything the lots in new tract developments in dallas fort worth are smaller and have less land using features like they don't have alleys. and then in Dallas city limits any small slice of land that can possibly be used for new houses have way smaller lots than any neighboring decades old homes.

the only instance I can think of that I know of is there as a historical black neighborhood near love field airport where Dallas changed the zoning to make redevelopment less profitable by requiring the houses take up less of the lot. This way developers can't build huge houses to offset the fact that the land is expensive or they can't build duplexes big enough to make them worth selling either. In fact there were a few duplexes going in to replace detached SFH and the developers were left in the lurch. I think even had to tear them down? I never followed up on the story. This was basically a policy to prevent gentrification by making the land less valuable by policy. Unfortunately gentrification and yimbyism seem like they go hand in hand because if you can develop bigger or more dense the property value goes up and people scream.

Where I can see regulation getting in the way is in the new codes. You can't build a house like you could in the 50s-70s anymore The code today is insanely expensive. Now those 70s houses weren't great. But they aren't didn't cost $200-300+/sqft at the low end.

in my view new single family housing can never be affordable because the cost is just so high. in fact. generic home ownership is as unaffordable as ever due to inflation. call a plumber to fix a leaky faucet? That will be $300. A new fence? $10k. A new HVAC system? $20k. A roof? $12k. These are all real costs for "small" homes. At least in the rental scenario the costs are controlled because not every single thing is a one-off. There are efficiencies at scale. If it's a housing rental company your maintenance guy is on a route, if it's an apartment you have building maintenance, etc.. The roof repair is a contract worth a million bucks where every roof is only $8000 instead of $12000.

pixl972• 12 months ago

I feel lucky in the sense that I have both the physical ability and the skill to do almost all of my own maintenance myself. With what I saved on landscaping alone I was able to buy all the tools I needed for almost any project.

tptacek37• 12 months ago

He just did a podcast episode about envelope restrictions and how they're pushing the market for housing out of the sun belt. The subtext of all this stuff is ultimately zoning.

ajmurmann3• 12 months ago

Long permitting processes also encourage construction of larger SFHs. The permitting cost is largely fixed whereas three profit margins scale with the value of the home which mostly scales with the size of the home

denimnerd423• 12 months ago

yes bigger houses to an extent are way more profitable because there is a somewhat linear relationship between sqft and value but houses have a lot of fixed cost. there's probably a sweet spot around 2500sqft in suburban/exurban Dallas Fort Worth to maximize the market for the house and still generate low $/sqft such that the guy building something bigger next tract over isn't crushing you on $/sqft.

that 2500sqft house is still $200-250/sqft way out in the middle of nowhere where the land doesn't really even factor in much.

matthavener• 12 months ago

It's absolutely a zoning issue. The Texas legislature is literally overriding large cities to force them to allow smaller lot sizes. Most of Dallas, for example, is R-7.5, which drives up cost because land is expensive and it requires you to dedicate a lot of it to your yard (max 45% coverage). Only a few areas, like some PDs in old east Dallas, have been rezoned to allow the smaller lots, though you seem to believe its all of Dallas city limits.

https://www.texastribune.org/2025/06/01/texas-legislature-sm... https://developmentweb.dallascityhall.com/publiczoningweb/#d... https://dallascityhall.com/departments/sustainabledevelopmen...

denimnerd423• 12 months ago

oh cool thanks. max 45% coverage is pretty low. I guess I must be thinking of some very specific developments that must have gotten variances.

LargeWu14• 12 months ago

Increasingly, we're seeing home services companies like plumbing and HVAC owned by private equity. This is how you end up paying $300 an hour for the plumber (plus a $300 service fee just for showing up). The technician isn't getting the majority of that money.

Good rule of thumb is that if you see a home services company with billboards, or branded vehicles, they are going to be super expensive.

whoknowsidont10• 12 months ago

Incredibly dishonest article. It's shocking to see people support this. And I love the way it's framed in a conspiratorial tone, and uses coded language to make you doubt this is a quantifiable problem.

All while he ignored many parts of the text he allegedly was critiquing. I'm still shocked that this is getting upvoted.

The very first sentence in the article is this:

This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.

"Insists" is doing a lot of work here to support the rest of the article. But it's lies through omission.

At a high level, I have never found these arguments persuasive

Irrelevant if it persuades you. This isn't a high school debate class, facts and metrics are what matters.

One hallmark of a monopolistic market is rising profits.

Not even close to true in theory or practice. In theory, monopolies have ever way in order to set prices for whatever goal their after. They may also lower supply thereby lowering aggregate profits. Long term profits can justify anything now.

Anti competitive practices are mainstays of monopolies. Not whatever the author just made up.

The Musharbash essay on Dallas—like too much of the antitrust left’s work on housing

Oh boy here we go! The boogeyman has been setup, the ominous "they" is out.. checks notes... make housing available for average people.

is filled with out-of-context quotes, overconfident assertions lacking evidence, and generally misguided claims.

Pot. Kettle. Black.

The next 5 paragraphs are about him talking to Quintero. He starts by framing the issue saying Dallas is not a good fit for Quintero’s theoretical model or previous research, which Quintero agrees with. He then uses this agreement to act like he's right about everything else and even misquotes his "100%".

It was shocking to see how we just kind took one affirmative agreement for one thing and turned it into an agreement about another. Talk about hearing what you want!

But that's not the rub.

The rub is that the Musharbash's essay isn't referencing the John Hopkin's research paper (Quintero) to say DFW fits it's described model, it's that the use of a market intelligence broker has effectively made the firms act as single (or a few) unit(s), enough to make the DFW's conclusions relevant.

Here's the snippet from Musharbash:

Over the past two decades, most — if not all — significant builders in DFW have converged on the same source of market intelligence to drive their decision-making: a consulting firm named Residential Strategies, Inc. (“RSI” for short). [0]
[...] While RSI is reportedly careful not to share sensitive information or facilitate explicit collusion among builders, it does not have to do so to play a role in limiting competition. [1]

Moving back (unfortunately) to the Thompson article, here's his next little "misquote":

Claim #2: Dallas housing experts say local homebuilders are monopolies who are “devouring” the market.

The article didn't even claim this. The quote the source articles quote DIRECTLY below the claim from Musharbash's article really highlights how far out of the way Thompson went to misquote it:

From Musharbash's article, whihch again Thompson also hilariously quotes:

Indeed, “[t]he scale and sway of market leaders” — particularly D.R. Horton and Lennar — means they “often monopolize access to trades and vendor resources” in local markets, constraining the ability of smaller builders to build at all, according

Unless D.R. Horton is a "local", "Dallas" builder I'm not even sure Thompson misread this piece so badly. If he wasn't an established journalist I'd call into question his reading comprehension skills.

So I have to assume it's not stupidity, it's malice.

There's also a subtext claim here where he continues to talk with McManus about land use regulations. McManus says land use regulation is the primary and SINGULAR cause of the housing issue, but what Musharbash's article points out is that land use regulations and zoning laws really have changed while the issue continues to intensify:

I discovered that pretty much the same dynamics afflicting blue states are also afflicting red ones — a fact that should have important implications for how we think about housing politics and policy in this country. [2]
[...] not of land use regulations, which have remained relatively stable in recent decades, but of two critical segments of the housing supply chain: The homebuilding industry that builds new houses, and the resale market in which people buy and sell existing housing stock. Both have experienced dramatic changes over the past four decades [3]

This is exhausting, not going to lie. But let's continue.

Claim #3: Industry experts have data proving that homebuilding oligopolies are holding back national housing construction [...] Did Lambert agree with the antitrust folks, who love to quote him so much, that the consolidation of big homebuilding companies was hurting housing supply?

No. Nope. No again. That's not what was written. Here's what was written:

By facilitating high-priced home sales with these cut-rate mortgages, large homebuilders impose a double handicap on small builders while inflating property valuations in the region as a whole. [4]
[...] The largest homebuilders benefit from this dynamic because they sit on large amounts of real estate whose valuations they want to maintain or raise, but it makes it that much more expensive for small builders to buy land to build on in the first place.[5]
>By tying home sales and mortgages, Dominant homebuilders can sell their houses at higher prices with higher gross margins, while issuing bigger mortgages with bigger origination fees and bigger resale values on the securitization market. As their below-market mortgages get buyers to accept higher sticker prices, these inflated prices feed high-priced comps into local property databases — pushing land and home valuations up market-wide. The largest homebuilders benefit from this dynamic because they sit on large amounts of real estate whose valuations they want to maintain or raise, but it makes it that much more expensive for small builders to buy land to build on in the first place. [6]

The picture being painted here is not one of "no one is building houses" but people are building the wrong houses for the wrong reasons. And smaller, local builders aren't able to build the houses people WANT and NEED because the system is let's just say... self-fulfilling.

The big builder's aren't going to build you your affordable home. It's not just that they don't have to, but it benefits them not to. More homes at the appropriate market prices would cause their stranglehold to completely unravel.

Let me just tab back over to the article yet again and continue.

Claim #4: “X companies account for Y percent of this industry” is a smart way to think about market concentration.

You know what, I'm actually done.

Terrible article. Terrible journalist. I would say he should feel ashamed but the fact that he's willing to be so dishonest on paper with his name stamped over it tells me he couldn't give a shit.

Full on Bullshit Asymmetry Principle (https://en.wikipedia.org/wiki/Brandolini%27s_law) on display here.

Links:

[0] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

[1] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

[2] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

[3] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

[4] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

[5] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...

johndhi• 12 months ago

I know this isn't how our political system works, but if I were king of America I'd try to solve the problem of expensive housing like this:

-Confirm housing is too expensive (for whom, where)

-Ask people why they think housing is too expensive and read some books on the topic

-Come up with a list of a few reasonable reasons from said reading

-try addressing those reasons with experiments in different locations to see what works (or check if someone has already done this)

-apply learnings broadly.

Instead our system is more like: -try to get elected and win points by criticizing others' ideas

-do nothing or spend a trillion dollars trying to solve it based on an idea a lobbying group told me is the reason housing is expensive

-be replaced by someone who disagree with me completely in 2 or 4 years

tyleo• 12 months ago

The first part of this may be overly simplistic but I got a good chuckle reading the second part.

rahimnathwani• 12 months ago

If you like instances of people calling out citation misrepresentation, you may enjoy Brian Conrad's report about drafts of the California Math Framework: https://sites.google.com/view/publiccommentsonthecmf/#h.ko8q...

Sadly, many of the issues he called out remain in the final, approved version.

deckar01• 12 months ago

I find the term “anti-abundance left” odd. He wrote a book called “Abundance” laying out the case for deregulating zoning laws. Claiming global monopolies in aggregate seems more like a conspiracy theory. I thought the mainstream (left) opposition to deregulation was to subsidize affordable housing regardless of the cause.

tptacek37• 12 months ago

Restating something I said upthread, but I think the right way to think about Thompson's rhetorical adversary here is "people on the political left who believe that antitrust is the high-order bit on housing affordability and that zoning reform shouldn't occur until after antitrust issues are addressed". He's arguing with people who are pushing back on legalizing housing density. He is not arguing broadly against the political left; in a reasonable US macro view of politics, he is part of that political left; there are people much further to his left that are nonetheless in lock step with him on housing, all of whom I believe he'd be thrilled to endorse.

specialist2• 12 months ago

Paraphrasing: along with a dozen other pressing issues, anti-trust was out of scope for this book.

He is not arguing broadly against the political left...

Yes and: NIMBY vs YIMBY is (mostly) olds vs youngs, rather than partisanship. Witness the coalition behind the Montana Miracle (recent pro-housing legislation).

So far. As you know, most positions eventually get coded as left or right, as needed, to defend the corptacracy.

mlhpdx• 12 months ago

… profit margins as a share of overall home-sale prices actually declined slightly

So the profit in real terms more than doubled? At a constant percentage home building and gas pumping both become more profitable when unit prices increase faster than inflation.

The vapid arguments around this topic are tiring.

chrisg23• 12 months ago

All I know is I moved to the Dallas area 4 years ago, and I'm still shocked at the housing affordability compared to where I moved from. Both in terms of absolute price and general overall cost of living.

whatever15• 12 months ago

Housing crisis is just a result of increasing income inequality and the resulting real estate investment craze. The population of America (real demand) did not suddenly double at any state/city.

Rich have become so much richer that can afford bidding wars at unattainable prices. They can buy investment homes and be cashflow negative for decades in anticipation of the increased market bidding prices. Of course they oppose any sort of legislation that would increase competition.

appreciatorBus5• 12 months ago

The population of a place doesn't have to double, or even change at all, for prices to go up. All that is necessary is for more people to want to live in a place. Those with the $ to satisfy that desire will outbid those who don't and you can easily double/triple/10x prices with no change in population.

whatever15• 12 months ago

How come more people want to live in the entire US if the population is relatively flat? Prices are up everywhere.

The only answer is that the increased observed demand is a result of the increased investment demand (rather than native demand)

Schiendelman14• 12 months ago

What if the housing crisis is what's causing wealth inequality? Piketty's data pointed to this.

whatever15• 12 months ago

Definitely is a negative feedback loop. So I expect the trend to accelerate as long as foreign investment keeps flowing into the US in the same rates

varenc• 12 months ago

This seems like it contributes to the problem, but doesn't feel like the root cause at all. Every homeowner, not just the ultra wealthy, has an incentive to oppose new housing. (Though in many metros any homeowner is automatically wealthy by some definition). The lack of supply seems like the core issue here.

Workaccount22• 12 months ago

A lot of the time it's not rich people bidding over a home, it's people in a game of chicken to see who will put themselves in the worse financial position.

veqq• 12 months ago

The population of America (real demand) did not suddenly double at any state/city.

The population has literally doubled multiple times, and housing supply has not increased. There used to be significantly more units per capita.

jmyeet• 12 months ago

This "Abundance" nonsense is simply liberal repackaging of Reagan's trickle down economics and deregulation. That's all it is. Reagan's policies were designed to transfer wealth from the young and the poor to the old and the wealthy. Abundance will do (more of) exactly the same.

The very best case fo housing deregulation as per this Abundance nonsense is Houston. And that's only if you have essentially unlimited land.

Private industry simply will not lower house prices long term. We need to stop with this nonsense of looking for market-based solutions and public-private partnerships.

The only solution to housing is for the government to maintain a sufficient stock of quality housing such that the private sector simply cannot corner the market to drive up prices.

The example I always come back to is Vienna where ~60% of the housing stock is owned by the government. Residents essentially have permanent leases. It's affordable and accessible. Vienna has some of the lowest rents in a European city.

The purpose of the modern Democratic Party in the US is support American imperialism and to not upset their corporate donors. "Abundance" only exists so Ezra Klein can get invited to all the cool parties, get speaking engagements and generally curry the favor of the billionaire class and the Democratic establishment. It's just a liberal face on Reaganism.

ajmurmann3• 12 months ago

"your margin is my opportunity" will lower prices and does so in all areas of the economy that aren't highly regulated. The exception are of course cartels but Thompson shows here that those aren't present

specialist2• 12 months ago

How would government go about creating that additionl housing?

jjk166• 12 months ago

So, Dallas doesn’t meet Quintero’s oligopoly threshold. Now let’s consider the rest of the country. I tracked down a complete listing of the country’s 50 largest homebuilding markets, from #1 Dallas to #50 Cincinnati. How many meet Quintero’s first oligopoly threshold (two companies = 90 percent of the market)? Zero out of 50. And how many meet his second threshold (six companies = 90 percent of the market)? One: Cincinnati. It turns out that the largest homebuilding markets just aren’t that concentrated
I wanted to know how a careful monopoly-hunter like Roberts would answer the question: If six firms account for 90 percent of a local industry, is that automatic proof of a monopoly? “No, it’s not,” Roberts said. “The statistic isn’t totally vacuous, but there’s basically no useful information about market power in that statistic alone.”

---

the number of new single-family houses permitted per capita in the Dallas metro area rose steadily between 2010 and 2022. (This is illustrated in the graph below[1].) I mentioned to Quintero that steadily rising construction per capita in a fast-growing city seemed like a weird example of monopolistic abuse.
First, he uses 2006 as his baseline. This was a highly atypical year in housing. Just before the housing crash that triggered the Great Recession, May 2006 was the peak of 21st century construction employment. That very month was construction's single highest share of total employment since the postwar era. Using a bubble year as a baseline could easily throw off the overall findings of any economic analysis.

[1] graph clearly shows long term downward trend, with growth from 2010 to 2022 being entirely recovery post 2008 crash and still being below late 90s levels.

---

The whole thing looks like a lawyer who arrived in Dallas with a conviction in hand and shaped the evidence to fit the indictment.

*spends entire article cherry picking evidence in an attempt to discredit one article specifically to advance a competing narrative.

whoknowsidont10• 12 months ago

spends entire article cherry picking evidence in an attempt to discredit one article specifically to advance a competing narrative.

Worse than that. He's lying about what the article claims. Straw-man is too generous of a term, he's blatantly just making shit up.

mactrey5• 12 months ago

Do you have an example?

pembrook3• 12 months ago

While we’re debunking that can we debunk the weird leftist conspiracy theories around index fund companies like Blackrock “buying up all the residential homes.”

Yes, the largest index fund company that sells investment products that allow people to invest in indexes (entire markets) is going to defacto be a custodian on holdings across the entire economy, including homes. Operating the funds offered in your 401k doesn’t mean they own the companies that invest in residential real estate. It means you actually do.

If you have a 401k it’s actually you who is in this “secret evil cabal.”

whoknowsidont10• 12 months ago

While we’re debunking

The entire article is just blatantly lying about what the source article says lol.

dinkumthinkum2• 12 months ago

While, I am not onboard with leftist conspiracy theories, I find the defense of BlackRock a little odd:

"You have to force behaviors. At BlackRock, we are forcing behaviors." - Larry Fink, CEO of BlackRock.

pembrook3• 12 months ago

I won't defend Fink's role in pushing the whole 2010s ESG mania, but they were ultimately toothless in that too, because they are a glorified custodian of funds...nothing more.

huitzitziltzin2• 12 months ago

Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong. I appreciate the attention he brings to the topic and his diligence in digging up stories but his own analysis is often just totally wrong. I don’t think he’s worth taking seriously as an analyst. Maybe as a reporter at best.

whoknowsidont10• 12 months ago

Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong.

I mean he didn't. The article is legitimately straw-manning. All of his claims are not present in the source article.

It's a disgusting, sleazy piece of journalism.

So no, you didn't hear he got it wrong. You were lied to by the author.

huitzitziltzin2• 12 months ago

I have a PhD in economics with a specialization in antitrust policy.

Fact:

“Matt stoller gets big, important issues wrong in antitrust all the time and his analysis shouldn’t be taken seriously.”

Source: me

You are welcome to cite that.

scoofy4• 12 months ago

It’s difficult to get a man to understand something when the value of his home depends on his not understanding it.

cyberax• 12 months ago

Sigh. The whole housing narrative has been hopelessly taken off the rails by well-meaning but clueless urbanists.

And quite predictably, once the poisoned fruits of their labors start to bloom, it's always the fault of capitalism. Or maybe foreign investors and private equity.

IFC_LLC4• 12 months ago

Pretty much any criticism of a current housing market can't happen without mentioning the quality of said housing. I have just come back from one of the apartments I was looking at to see an abysmally small shoebox with some sort of doors and windows installed in there. I live in a house with 9-foot ceilings and I feel like a king. But this is insane.

Recently I've visited a rental property to find shallow, not sound-proofed walls, askew doors made of something that looks like paper and not a single straight corner. And this is a 2023 build! It's brand new. And still looks awful.

I have an article about that. https://medium.com/@ifcllc/qualification-f33ec8fcb736 but man, it's getting worse and worse.

Just to have a 2-room apartment that I used to live in 30 years ago would cost over 1.5 mil today. Adjusted for that inflation of quality.

Schiendelman14• 12 months ago

That's right, and that's caused by restrictions on supply. Almost every problem we have with housing comes down to us restricting how much can be built so much that extremely low quality units are competitive. If you allowed 10 times as much construction, those units wouldn't be able to compete, because other builders would offer better units for the same price.

ajkjk2• 12 months ago

It seems like fewer restrictions would mean more garbage getting built.

abdullahkhalids• 12 months ago

Apparel markets are much more free and competitive than housing markets, and have basically no restrictions on supply. Yet, the quality of available clothing across the world have fallen. And we get incredibly cheap incredibly low-quality garbage.

These things are much more complex than simplistic single-variable models.

kacesensitive• 12 months ago

I mean by that logic wouldn't the cheap house just cost even less? What about housing prevents it from being a race to the bottom like every other product?

Like yes a nice pair of boots costs more and you do get more value out of them compared to Amazon basics boots.. but far more people end up buying the cheap option because it's cheap and available.

energy1237• 12 months ago

Apartments are either "small" or "luxury". No matter what you do, you get smeared for building housing.

peab• 12 months ago

I had to break a lease on an apartment recently. The apartment was built in 2023 or 2024, marketed as a luxury apartment. We had no hot water for a month because they used a couple centralized tankless water heaters, and we happened to be the furthest away from the heaters - if they turned it too hot, it was burning hot for the apartments closer to it.

Not only that, but the walls/floors were paper thin. We could hear the floor creak when our upstairs neighbors so much as shifted their weight.

IFC_LLC4• 12 months ago

Don't you love the feeling when your neighbor from upstairs seemingly plays bowling while horseback riding? (Especially when you found out that in reality he just dropped a penny on the floor that acts like a megaphone.)

dlcarrier7• 12 months ago

Rest assured, the quality has gone up, just not in ways that you, or most anyone, cares about. You'll be satisfied knowing that every house in the country is built with outlets every 12 feet, with independent circuits for the for every few hundred watts of lighting, able to withstand Arizona heat, California earthquakes, Florida hurricanes, Louisiana humidity, Minnesota cold, and everything else you may or more likely may not care about.

Inflated building code is a great way to repress the rate of new construction, and if it's all in the name of safety or energy conservation, no one can stop it, even if it's entirely useless for your house. That leaves low quality materials as the only ones affordable for a starter house.

IFC_LLC4• 12 months ago

Oh man, how much I agree on a building code.

The last hurricane I survived, I had to spend time in my office building. It is made of concrete and real brick and mortar. There is no need whatsoever to “hurricane-proof it", save for the special shatterproof windows. Big, 4 by 6 shatterproof windows.

The shoebox I live in currently features the same shatterproof windows. 2x1 feet, small windows. I had to re-install all the light fixtures in the rented house because despite featuring white walls, it’s darker than a necromancer’s cave.

The former was built in the 70s. The latter - in 2023. The latter does boast an impressive array of anti-hurricane features. For example, it is bolted down to the foundation so it can't be torn by a wind gust. And the frame was re-inforced so it won't lean under the wind.

Shall I mention the fact that none of those features are necessary for a brick building?

To top it off, the AC has leaked in 2024, so I had to deal with that already. It was less than 1 year old at that moment.

BrenBarn• 12 months ago

This makes sense, but as far as I can tell it doesn't really answer the question of whether the housing crisis is driven by "monopolies and the corruption of big business". It just rebuts a particular article's claims about whether the housing market is driven by monopolies in the homebuilding industry. But I would say the issue is larger than that. Monopolies and corruption in general have led to great wealth inequality and that is at least exacerbating (if not driving) a housing crisis in many places.

phendrenad2• 12 months ago

Too often people hear that some lions escaped from the zoo, and then hear that shoplifting went up, and decide that the lions must be robbing convenience stores.

Sometimes a problem and a cause don't snap together so obviously. I'm no fan of private equity but I've tried to inject some perspective into discussions on HN where people automatically assume that "private equity has operated in a space" and "there are problems in the space" form a complete mathematical equation and we don't need to look beyond them for any other factors.

didibus10• 12 months ago

I just couldn't keep reading with the constant "antitrust left" being refered to on every sentence.

The issue, is that for me, the reader, it framed the piece as the author seemingly positioning themselves as the "the other side", the one that knows best and isn't those "antitrust left". It felt like it was creating a strawman and was engaging in tribal signaling.

And when you consider the rest of the piece was them claiming they called the sources, and that the sources said that the "antitrust left" had misquoted them and misrepresented their findings, but the author somehow is this unbiased truth, and definitely really for real called the the sources and didn't at all misconstrue or anything, no they wouldn't do that, unlike the "antitrust left".

shazbotter8• 12 months ago

I'm about as far left as you can be, as a syndicalist anarchist, and I definitely perceived a bit of what you described. But I'm not super worried about it because he didn't say "the left", but rather a specific lefty position.

But also, the left isn't uniform on housing policy. Some folks want anti trust and limited capital ownership. Some folks want to de commodify housing. Some folks want all housing to be government built and owned. The left is a very diverse place (and the joke is no one hates leftists more than other leftists).

gwd4• 12 months ago

Then why even bother calling it "left" at this point? Just say they're anti-monopoly. Is there really nobody on the right who are also anti-monopoly?

dv_dt3• 12 months ago

The people the article quoted as "left" like Stoller are really not left, and the whole anti-left felt more like a unnecessary strawman label and definite turn off for me reading it. I would characterize Stoller as an independent anti-monopolist - not really on the right or left spectrum at all politically. Unless the right is now pro-monopoly.

0xB31B1B3• 12 months ago

There is a specific group of people, matt stoller being the primary leader in the media, who are the "anti trust left". There is another specific group of people who are "abundance liberals" (dereck thompson and ezra klein being main media leaders) and there is an active competition inside the democratic/left of center politico-academic-policy-legal-media blob over prioritization of laypeoples attention and allegiance/belief which is in fact a finite resource and relatively zero sum between the two camps.

thrance7• 12 months ago

It all makes sense when you take "abundance liberalism" for what it actually is: a rebranding of neoliberalism in support of establishment democrats. Its main goal is not to provide the democratic party with a new direction, but to defend the status quo against the populist left, incarnated by the likes of AOC and Mamdani.

It makes sense then, that they'd spend more time attacking the left than the right, as they realize where the existential threat to the current democratic party lies. Personally, I think it's good that they're afraid.

tghccxs• 12 months ago

Do you think this specific criticism of the “populist left” by the “abundance liberals” is valid though?

aggie• 12 months ago

Why do I see so many critiques of the abundance movement based on factional motives and ad hominem, and so little critique of the arguments they make?

If progressives want to expand government, government needs to be effective. Abundance liberalism is about learning from the mistakes of the past and making government better able to achieve to goals both liberals and progressives want.

If we're talking about factional infighting, leftists are "afraid" the neoliberals will offer a compelling path forward instead of pivoting to socialism, so they resist arguments that would otherwise be beneficial to their political goals.

lovich6• 12 months ago

The Abundance movement is decidedly not pushing for the status quo. They are pushing for removing a good number of regulations on home building and zoning.

That is an active change

joenot443• 12 months ago

It's a shame to let two words color your opinion on an entire piece like that; I found it to be really compelling.

Your last paragraph is a bit confusing; is it your position that Derek's lying? Which quote did you think was inaccurate? Or are you specifically concerned with his rhetoric?

hobs• 12 months ago

Two words that were repeated at least a half dozen times and used as the framing for the article. I literally went and looked at past articles to see how much this framing was used (and it wasn't) because when you use this framing you are literally appealing to tribalism and usually that comes with a LOT of other baggage.

didibus10• 12 months ago

Yes, that's why I commented, as a kind of feedback, the piece could be so much better with a very small tweak. Replace "antitrust-left" with the name of the exact handful of people whose book/article/stance you are refuting.

spicyusername3• 12 months ago

I mean, the article is responding specifically to a particular ideology... the antitrust left, so it makes sense.

banku_brougham• 12 months ago

I sense the labelling is a tell of sorts. As to the critique, I think the focus on homebuilder corporate profits leaves out important parts of the ecosystem. As example: Observing the only profitablity of Toys R Us as it collapsed would mislead you as to the very profitable exploit that KKR and Bain executed.

Its a great article though, lots of facts to ponder. Would love a view of the next layer up into financial arrangements in those Texas housing markets.

cwmma• 12 months ago

Yeah this article treats it like an either/or situation where monopoly's somehow make it so regulations aren't the issue instead of what most of the monopoly takes say which is that monopoly builders make the situation worse and combine with the other problems.

animal_spirits• 12 months ago

I watched an interview with both the authors. They read as both left leaning but self critical of the regulations the left has put in place. It seemed like this leftist identity is part of the story so maybe that is why it is mentioned so much.

https://youtu.be/D9wga7S3nAw?si=mZT3yhUG_z2DKref

lovich6• 12 months ago

The abundance vs anti abundance schism is internal on the left wing side of politics.

The author of this article was also one of the authors of the titular Abundance book which named the movement, so he’s not positioning himself as the other side of the “anti trust left”, he quite literally is the other side that that group is fighting with

throwawaybob420• 12 months ago

“Abundance” is neoliberal BS. Typical centrism, half measures that don’t actually make anything better and manage to make everyone angry.

energy1237• 12 months ago

Here's the political solution: Do both public housing and zoning reform.

Unlike zero-sum political disputes where there is a winner and loser, this is a rare issue where both camps can win without impacting the other camp.

What we should not do is give the left their worst ideas, like rent control or stopping AirBNB. Give them their best idea, which is public housing.

rcpt2• 12 months ago

You realize that local busybodies hate both of those things and they're the only political group that matters

lanfeust613• 12 months ago

Here's the political solution: Do both public housing and zoning reform.

You just described the Abundance agenda. Do whatever is politically viable to build more.

didibus10• 12 months ago

Most interesting proposal I heard on this topic, is that the solution to housing prices is to ban renting altogether.

It's so radical that it's almost impossible to predict if it would be better or worse. But at least it had the moral ground that rent is one of the last remnant of pre-capitalist lords and barons economies.

The idea being it would commoditize housing. Millions of units would now be for sale, prices would drop, tons of people would now be able to afford buying. Home builders would be incentivize to build nicer, cheaper, as the competition would move entirely to the selling/buying market.

It's radical for sure, but I've always found the thought experiment fascinating.

cyberlurker2• 12 months ago

Prices would drop where homes are commonly rented. I suppose rent could turn into lease to own in the interim period. It’s an interesting idea, I wonder if any economists have played it out.

What about those people that have homes but rent out a room? Or a townhouse that has 3 units, but the landlord lives in one?

I guess they could sell the units or move to a smaller place, but I think there may be an adverse effect of potential housing staying locked up because there isn’t a legal way to preserve options of ownership. It may decrease housing in some instances. Which force is more powerful though, I am not sure.

dinkumthinkum2• 12 months ago

It wouldn't work. Good luck trying to enact that. Also, the amount of leftism in this thread is like a pure-sugar-diet for Marxists. When houses have no value, people don't value them. Look at what happens when you give large amounts of people free housing, what do they do with it?

didibus10• 12 months ago

I don't know about the left/right. But like I said, when I read this idea, it was presented as an argument that the housing market was not capitalist enough, and that was the issue. In order to properly make it capitalist, so it can act like our other markets, you need to ban rent-seeking and landlordism which are pre-capitalism models that date from the old days.

It would not allow for example the government to hand out "cheap to rent housing either".

Ekaros3• 12 months ago

What would happen to those who can't afford to buy? Say student just turned 18? Continue to live at home and gather some money for down payment? Who would keep these assets and maintain them until next buyer comes around? What if there is no buyer and they make loss?

There is nothing inherently wrong with renting. The landlords provide capital that renter lacks for time being. But due to supply constraints prices have been driven too high.

didibus10• 12 months ago

What would happen to those who can't afford to buy?

That's what I find fascinating in the thought experiment, it forces you to think outside the box in these areas as well.

What happens to people today who can't afford to rent?

If prices were lower due to this, maybe mortgages would let you take a loan at 0% down-payment.

If you think of cars... What happens to people who can't afford a car? Generally there is public transit, maybe we'd have public housing.

You can still own multiple properties, you just can't rent it out. So the owner would have to lower its price probably, or find another buyer.

Or like another commenter said, maybe you could have lease to own purchase plans instead.

LargeWu14• 12 months ago

Unfortunately this is the type of magical thinking that gets passed off as serious policy analysis based on nothing but anti-capitalist dogma. There is no evidence to support these conclusions, and in fact plenty of evidence that it would worsen the housing crisis.

didibus10• 12 months ago

on nothing but anti-capitalist dogma

What I remember from the proposal of it, it was making a pro-capitalist argument.

Based on a quick AI chat it seems that: "Some argue this form of passive income generation through rent-seeking is actually parasitic on productive capitalism rather than being truly capitalistic itself, since it doesn't create new value or contribute to economic productivity"

I think this is what I remember from the article. They claim landlords are anti-capitalistic, and one of the last holdout of pre-capitalism in our economy. They argued banning this rent-seeking behavior was needed to turn the housing market into a capitalist one.

matthest• 12 months ago

"Abundance" is really just supply and demand 101. Which has proven to work over and over and over and over again throughout human history.

robertclaus• 12 months ago

Quote: "I don’t see the value in discussing a “national” crisis in homebuilding oligopoly from which the 49 biggest metros are exempt."

I enjoyed most of this article, but it did slide into opinions periodically. This quote in particular stood out given the issues rural communities face regarding availability of competition in a lot of other services.

michaelmior• 12 months ago

Agreed. Especially since more than 50% of the population lives outside those areas.

mayneack• 12 months ago

This is a very online oriented debate. Derek Thompson might hear mostly from left coded anti-trust types on twitter, but I really don't think that's the main opponent to abundance.

If you spend time in the individual communities where this battle happens, the voice of the classic NIMBY (worried about property values and crime) drowns out the left-NIMBYs that worry about "greedy developers" and gentrification. At least that's been my experience in West LA. Many of the less-online left critics eventually come around to realize that upzoning type solutions and public housing type solutions aren't actually in conflict with each other even if they disagree on relative priority and impact.

cyberlurker2• 12 months ago

Am I wrong, or is this kind of a silly date range considering the housing crash was in the middle?

According to the National Association of Home Builders, profit margins as a share of overall home-sale prices actually declined slightly between 2002 and 2024.

asta123• 12 months ago

In Australia most of the narrative on the housing affordability crisis is around lack of supply and nimbyism. In the meantime Melbourne has dropped to 4th most expensive city in the country and becoming more affordable. Most likely reason - land tax change in that state which is turning off accumulating multiple properties through investment and investors turning to other states where prices are still going up. So, while supply is relevant, I would say it is investor demand that is driving prices up.

jondwillis• 12 months ago

It’s not a coincidence that many abundists see nothing wrong with rent-seeking. They’re incentivized by it. Rent-seeking has corrupted market forces. Mao 2.0 will arrive eventually.

pitaj2• 12 months ago

This reverses causation. Investors are involved because prices are going up, not the other way around.

"Investors buying up housing" is a common explanation alongside "short term rentals taking over" but neither make up a large enough portion of the demand to explain prices.

dv_dt3• 12 months ago

In a feedback loop, every element in the loop is both a cause and an effect. The way to stop the feedback is to shift one or more relationships in the loop.

If you are lucky there can sometimes be arranged some convenient control elements- but in many difficult problems a lever that you can pull that only affects that one thing doesn't exist. You have choices of levers that affect a multitude of things, maybe many of which go counter to the desired independent effect

h2zizzle5• 12 months ago

I don't know what's so hard to understand about the idea that prices are high because the people who have the most influence over the prices want the prices high.

9999000009992• 12 months ago

Excessive regulation is 90% of it.

Here's how a rational market works. If I build an apartment complex, eventually those apartments will get older and more affordable. And even before that upper middle class folks will move in, freeing up their previous homes.

But that's not how many in local governments see it. So you have affordable housing quotas on new developments.

You have developers building units for the homeless at 600k each. https://abc7news.com/post/new-high-rise-building-house-skid-...

Affordable housing vouchers, section 8, etc, become a dystopian nightmare.

11 year waiting list. https://laist.com/news/section-8-waiting-list

The problem is twofold, first it's too difficult to build homes. In California you can literally just claim a new highrise will block your sunlight and make you sad. That's enough to delay a construction.

Parking requirements ensure space that could be occupied by people is instead reserved for vehicles. Plus the parking structure itself drives up the cost to build, 30% of your construction cost isn't unreasonable.

On a macro level, many cities should of fixed their issues with inadequate housing construction decades ago.

On a personal level, you need to go where you can afford.

After about 4 generations of living in LA about half my family has left. It's more than possible to make it off a middle class salary, but you need to make that choice.

If you stay in an unaffordable city you can't wait around waiting for politicians to fix it.

imgabe7• 12 months ago

For years in Washington DC there was one single crank who went to every community engagement meeting and prevented hundreds of units of housing from getting built.

mjvmroz• 12 months ago

I’ll be so interested to see what happens to this kind of thing.

I feel like we saw the absurd version of it over the past decade, where society at large had acted as though highly online reactionaries are quality signals of an underlying current.

It seems as though market share in that model is failing. I predict the pendulum will swing the other way across the board, and loud minorities in in-person forums will be given less credence… for good (by my estimation in this case) and bad.

nikanj3• 12 months ago

Every avenue of life has it’s weirdoes, but why have we as a society decided a single weirdo can stop a hundred homes from being built?

TFYS• 12 months ago

Here's how a rational market works.

Might regulations be the result of these "rational markets"? After all, if I invest a lot of money to build apartments, I might want to protect that investment by lobbying for regulations to make it harder for competitors, increasing the value of my investment. Or if I buy an apartment, I might want to prevent others from ruining my view, prevent noise, etc. All completely rational.

niam2• 12 months ago

Whether it is or isn't seems immaterial if you're of the opinion that government should step in to solve issues where the market has proved ineffective.

If it's the case that market participants have an imperative to convince the government to screw everyone else over: a solution preventing the government from being convinced by small petty nonsense seems remarkably simple, relative to the other kinds of policy challenges that exist.

derbOac2• 12 months ago

I think this is the thing these types of arguments miss. Regulations are the result of another type of market, the vote market. That's the whole point, to counteract hidden failures of the market with another feedback mechanism.

For what it's worth, imho Thompson presents a strawman argument about oligopolies to avoid the real critiques. He even kinda contradicts himself at the end because it's convenient for his argument.

It's never really about oligopolies writ large, it's about the players in the local decision in the moment (which is all that matters) and who profits at whose expense with what consequences.

podgorniy2• 12 months ago

Excessive regulation is 90% of it.

Housing crisis is observed in almost all what is called "first world" (europe, japan, usa). I believe that 90% of the issue is more global than a regulation.

ghiculescu• 12 months ago

Is there a housing specific crisis? Or is inflation impacting housing like it impacts everything?

0xB31B1B3• 12 months ago

where is the housing crises in japan?

bluecalm• 12 months ago

And excessive regulation is the norm in all of those (at least US and EU, no idea about Japan).

ramchip• 12 months ago

Japan doesn't have a housing crisis. I'm in a great location in Tokyo, the rent is under $750/month, and it's been the same for the decade+ I've been in this specific place.

If there's a problem, it's too many empty homes in aging rural areas. Cities are doing just fine, even with a growing population in Tokyo.

username332211• 12 months ago

The global issue is that elected representatives are becoming weaker.

The idea that a city hall would need to organize some sort of public meeting before approving a construction project is a fairly new one. The city council is elected to represent the people. If they need "community input" why are they even here? (Nevermind the obvious problem with such participatory process - sane and normal people can't participate in every local government decision unless it's their job. Hence why we have representative democracy.)

If you told someone in the 1980s that the British parliament couldn't impose its will on QUANGOs and local governments to build a rail line, they'd look at you as if you were insane. Parliament's power is supposed to be absolute. Yet that's what's happening with HS2.

modo_mario• 12 months ago

Japan does not. But it's also the place that didn't (fully) decide to try to keep it's population growing into perpetuity with migration and also has some other more unique market and monetary conditions.

sampo• 12 months ago

Housing crisis is observed in almost all what is called "first world" (europe, japan, usa).

You mentioning Japan gives out that you maybe don't know what you are talking about.

I believe that 90% of the issue is more global than a regulation.

Or maybe the case it, that also globally most urban areas tend to develop a version of excessive regulation.

breakyerself• 12 months ago

Most of the first world has a habit of mimicking the US.

podgorniy2• 12 months ago

UPD I'm wrong about Japan. Thanks for pointing out.

Add UK, Australia, Canada, the Netherlands to the list of countries with housing crisis.

littlestymaar4• 12 months ago

Excessive regulation is 90% of it.

If it was, then the housing price would be correlated with the level of regulation, but it's not (housing less dense places is always cheaper than housing in big cities, even if you compare the most heavily regulated place on earth with the least regulated big city in the world.

Here's how a rational market works.

A rational market made from human is as realistic as “dry water”.

The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.

lll-o-lll• 12 months ago

No. The key issue is just the rise and rise of inequality. As more money funnels to the top (thanks covid) the top buy more of the available assets leading to asset inflation.

Nothing will reverse this other than a tax on wealth. Tax wealth, not income.

mft_3• 12 months ago

The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.

I like your thesis, but can you give more information on the nature of the policies that drive the housing market in the manner you describe, but which aren't just "regulation" that makes it directly harder (e.g. you can't build housing in this zone) or more expensive (e.g. minimum plot sizes, parking requirements, building codes)?

siwatanejo2• 12 months ago

you can literally just claim a new highrise
will block your sunlight and make you sad

If a high-rise blocks a single electron of my apartment's normal sunlight, it would definitely make me sad.

ndileas• 12 months ago

Good news! You can't perceive the electrons in sunlight, only the photons.

Sloowms• 12 months ago

Throw out a made up percentage and proceed to start talking about rational markets as if they exist in the real world. I immediately know this analysis is going to be great. Older houses are obviously cheaper for some reason even though housing prices in city centers keep increasing. Poor people are the real problem for needing a place to live. With the conclusion that there is nothing that can be done and people just have to take it. That's abundance (jazz hands)

9999000009992• 12 months ago

With the conclusion that there is nothing that can be done and people just have to take it. That's abundance (jazz hands)

The conclusion is you should go to where affordable housing exist.

The other option is to get on that 11 year waiting list.

MetaWhirledPeas2• 12 months ago

If you stay in an unaffordable city you can't wait around waiting for politicians to fix it.

Sadly this is the best advice for personal well-being. 'Sadly' because it disrupts families.

derbOac2• 12 months ago

In California you can literally just claim a new highrise will block your sunlight and make you sad. That's enough to delay a construction

So what's the problem?

Land use should be regulated imho, just like air pollution and other commons phenomena.

I don't care what kind of towel you buy to dry yourself off with, but I do care if a developer affects the environment and housing around it.

potato37328426• 12 months ago

So what's the problem?

That is not a sufficient justification to infringe upon property rights.

While I'm sympathetic to the whining about "well they're a big business interest they oughta be able to work around the constraints" we are at least nominally all equal under the law where those things trickle down and at the end of the day that type of garbage winds up most applying to the little guy who can't afford lawyers and convolution

lovich6• 12 months ago

I don’t care what kind of towel you buy to dry yourself off with, I do care that you inherited a house from your ancestors who moved into the area 200 years ago and now a major metro area can’t build enough housing because you like the view.

jrflowers• 12 months ago

This is one of the funniest articles I’ve read in a a long time. I’m not sure what is better, the “I quite literally set out to find support for my narrative and find exactly one (1) guy that’s both willing to call himself an expert and give me my desired answer for each of my individual points” thing or the lazy neocon virtue signaling

The antitrust left

I love this phrasing. Derek Thompson has done some Serious Journalism and has discovered that if you support competition between homebuilders you are a Leftist.

Also there isn’t a concentration of homebuilders (in Dallas) but even if there was it doesn’t affect prices (in Dallas). Well there may be a concentration of homebuilders nationally, but Thomson spoke to a guy that doesn’t care about that. Anyway, wasn’t the takeaway from the Great Recession that monopolies are good?

But then I’m not sure he knows what a monopoly is

If a homebuilding monopoly purposefully made crappy new homes, they’d be out-competed quickly

Or what is a good outcome or a bad outcome

Can big companies hurt subcontractors by forcing them to accept lower prices?
“Maybe, but if big homebuilders can offer trades longer guaranteed contracts”

Hmm… they can force subcontractors to accept lower rates, but that’s not that big of a deal because they can force them to accept lower rates for a longer period of time. Like for example it would suck to have your paycheck cut in half but knowing that there’s no chance of it going back up for several years would take the sting out of it. This is the reasoning of somebody that took a Hat Man dose of Benadryl

moneycantbuy3• 12 months ago

Gary's Economics claims wealth inequality is at the root of housing unaffordability. Basically as wealth concentration grows, the ultra-rich bid up the assets. See the price of gold doubling in the past few years. Government stimulus is also captured by the richest. It's also a global phenomenon, i.e., every major city is now unaffordable for most people.

https://youtu.be/BTlUyS-T-_4?si=P0mdHxtq1F7DV4jo

imgabe7• 12 months ago

This doesn't make sense. Each wealthy family can only live in one house at a time. Yes, they might have multiple homes, but a billionaire having a luxury vacation home in Lake Tahoe or a penthouse in Manhattan are not the reason housing is unaffordable. The type of home a billionaire would buy would never be affordable anyway.

moneycantbuy3• 12 months ago

Bill Gates owns 275,000 acres in the USA. I doubt he's even gazed upon half of it. The billionaires aren't buying homes to live in like us proles, they're buying lots of finite land and water rights and such.

shazbotter8• 12 months ago

You assume they are buying homes to live in. I don't think that's a reasonable assumption. Maybe they buy real estate because it's a useful part of a portfolio. They can rent it or just sit on it and sell it later.

dlcarrier7• 12 months ago

Every metal, and really every commodity, has has recent price hikes above the official BLS CPI numbers.

That says far more about official inflation numbers than it does commodity markets.

once_inc• 12 months ago

This! Since our money is being inflated away, hard assets like precious metals, bitcoin, and real estate get bid up because those with cash bleed out purchasing power.

meowface2• 12 months ago

I know very little about economics so I can only parrot what I've heard from others but the consensus from everyone I've personally heard talk about Gary - not just Abundists - is that he's a crank when it comes to economics.

olddustytrail2• 12 months ago

Really? I've never heard that. He seems reasonable to me. Can you provide a link where someone dismisses him as a "crank"?

I'd be interested to see whose opinion this is.

JackYoustra3• 12 months ago

You have the causality backward - housing explains ~100% of the variation of inequality. If you liberalized zoning, excess inequality would more or less disappear: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...

carefulfungi• 12 months ago

Where I live, housing cost is directly proportional to school district quality - and local school funding (vs. state-level funding) is a significant cause of inequality.

Rapid growth of cheaper housing in a town is a financial challenge for the town because it creates a larger student base without creating a meaningfully larger tax base. In towns with a commercial tax base, the costs increase more than the tax base; in towns without a commercial tax base, taxes typically increase on the oldest / most established residents - which drives fixed-income people from the homes and towns they supported for decades.

In my suburban area, there are two main arguments to anti-growth zoning: (1) people don't want the density increase; they built lives in a less-dense area by choice and want to see that choice preserved. (2) There are legitimate school funding issues and tax base issues that encourage controlling the rate of growth.

I'm dubious of _any_ argument that finds a singular cause for housing prices. It's an extremely tangled and complex issue that touches on taxation, local control vs. state control, education, property rights, politics, a cyclical capital-intensive industry, immigration and labor supply, interest rates...

Personally, I vote for denser housing and more liberal residential zoning. But I also understand and respect the opinions of my neighbors who disagree. Looser zoning gives control of land-use to capital and takes that control away from the people who built and sustained the town for, sometimes, generations.

dgb232• 12 months ago

There's some truth in that, and I support the idea of shifting the tax burden from work to wealth. But I also think this is too simplistic. Remember that Gary was a financial trader, so he has a zero sum game perspective.

The UK had a decades long phase where they built a ton of affordable housing (council housing). This program was largely dismantled under Thatcher. Also over time, building regulations became more restrictive in the wrong ways, which makes supply more expensive.

Regulation plays a large role. But the right keyword is "reform". The right outcomes don't just happen magically if you deregulate.

There are places where housing got drastically increased in recent years, like in Paris under Hidalgo (7000 units/year).

Atlas667• 12 months ago

Y'all are discovering how censorship in capitalism works...

It's about volume(loudness), access(to data) and exposure(visibility).

herf• 12 months ago

Correlation isn't causation - the post here says smaller homebuilders can't get financing right now, and so a supply shortage is correlated with larger actors who can, but it isn't caused by concentration directly. The question is if government can have remedies for broken markets other than breaking up companies, because here it sounds like "fixing builder financing" would help:

https://x.com/NewsLambert/status/1951100530341847343

DeathArrow• 12 months ago

Over reglementation and over regulation is also destroying housing markets in Europe. In some European cities new homes are scarce and prices are skyrocketing. While politicians claim they are protecting the people and the environment.

ZeroGravitas• 12 months ago

The Builder’s Daily sounds like an anti-monopoly shop. But in our conversation, McManus sounded like a straight-up YIMBY.

This is a false dichotomy. His opponents are clearly claiming that oligopolies restrict supply. Therefore they are intending to be YIMBY even if they might be wrong about the cause of the restriction.

So this is a weird rhetorical attack that undermines the claims in the rest of the piece.

And now I think about it, it applies to the title too.

camgunz6• 12 months ago

The housing crisis is a cultural problem. We don't want to build density, and we don't want to build transportation, because this all lowers housing values, and besides the millions of homeowners you'll piss off, you'll destabilize an economy primarily built on the mortgage. Not a good reelection plan.

The places you're seeing growth are places where we could buy the land for cheap: suburbs and exurbs. We build huge ass subdivisions and then we run highways to them. This fucks no one's housing value, it bails out struggling/dying land owners, the auto industry loves it, the energy industry loves it, people love their faux-castles with lawn moats, it's a full employment plan to developers, and it's essentially all middle/upper-middle class housing so it's thoroughly unobjectionable to the voting majority.

The reason cities in Texas are out building blue cities is that they just do the suburb/exurb thing. Blue cities don't: where are the workable SF or NYC exurbs? Abundance gets so close, it more or less blames bureaucrats and the Jane Jacobs veto points built into the liberal building process. But these things arise out of the culture on the left, and whether we admit it or not, we like the walled gardens we built. We like our multi-million dollar castles we've got something like $80k in. We like people not driving/riding trams/buses through our neighborhoods, and we vote accordingly.

I personally think this is intractable. I think SF/NYC/etc have reached the ceiling and if we're gonna fix the housing crisis we need to build density elsewhere. I think we should lean heavily into remote work, lighten the infra grid costs with off-grid tech like solar, lighten the construction costs with low-car built environments (few if any parking requirements, rail instead of huge highways for shipping/transit, etc), invest heavily in the schools, and subsidize people moving to these areas--like with cash, not tax rebates. This is essentially "build the exurbs", but the progressive version of it that better meets health and climate goals, while also building communities we know are better for human flourishing (less isolation, more eyes on the street, etc). Focusing on permitting reform or democratic veto points is way, way too small a vision here.

solatic2• 12 months ago

SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water.

New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs.

The US simply needs to build new cities, and link them with high-speed rail. You do that by taking federal spending (military bases, universities and research labs, tax cuts for large industries) and directing it to places that would fit according to a high-speed-rail master plan. Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions, but the lack of a larger master plan in helping link these regions with better transportation links and job creation has prevented them from reaching their full potential.

camgunz6• 12 months ago

SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water.
New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs.

All kinds of places overcome these things. Pittsburgh, Hong Kong, etc. etc. Bridges and tunnels. NYC was doing this, but mysteriously stopped. SF and NYC don't even come close to densities in many Asian cities. You can think two things about this: we reject that kind of density, or we reject moving a city's center of commerce to a more geographically scalable area. For some reason, we put a low ceiling on density and refused to move where the jobs were, and I'm saying that reason was liberals culturally resisting it. We simply liked the status quo.

The US simply needs to build new cities...

Extreme, full agree. Even if I disagree w/ you as to the causes of building woes in blue cities, I think we agree it's not worth it to fix. Let's try some new things.

You do that by taking federal spending (military bases, universities and research labs, tax cuts for large industries)

Something that's different now than the last time we did this is that those large industries aren't gonna be (well, at least shouldn't be) places like auto plants or steel mills. I think the "large industries" part of your prescription should be some level of new tech.

PopAlongKid• 12 months ago

Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions,

Not really. All of downtown Portland, OR has been designated an Opportunity Zone[0]. "the Ritz Carlton Hotel that’s going up in downtown Portland was partly funded with these tax breaks."

[0]https://www.opb.org/article/2021/10/22/new-book-looks-at-por...

ausbah• 12 months ago

this is sort of wrong though, there is a measurable increase in positive economic activity with increased density. you can increase housing in an area in a way that doesn’t mess with people’s existing home evaluations, at least in urban enough areas

camgunz6• 12 months ago

That's interesting, are there comparable examples? Like, I'm sure China could do this by telling everyone what home values will be for the next 3 years while they build literally millions of housing units, but I'm skeptical we could double the density of SF without cratering its housing values or significantly changing its boundaries.

Tiktaalik4• 12 months ago

Jane Jacobs veto

As an aside, puts on Jane Jacobs defender hat I just want to point out that Jane Jacobs was on the record with the assertion that an ideal urban fabric was effectively small apartment buildings at densities well beyond what your typical North American city and suburb currently has.

It's deeply sad that Boomers took her ideas and distorted her message to preserve an ultra low density single family detached housing status quo.

https://viewpointvancouver.ca/2012/06/01/jane-jacobs-style-d...

camgunz6• 12 months ago

Hey I think she was basically right (I think her ideas on local control are applicable way beyond building neighborhoods). But we have to admit the ability to get up at some board meeting and veto stuff was her idea. It wasn't perverted by people who came after. Jacob's herself used these veto points in her time in Toronto. I'm not saying she was wrong to oppose the stuff she opposed, but the ability to obstruct in this way was her idea.

rob_c• 12 months ago

So the simple easy to digest lie ends up wrong...

There's a common theme emerging here.

DaveZale• 12 months ago

For the Western US? It's all about water scarcity.

thrance7• 12 months ago

Abundance liberalism still seems like a poor attempt to curb the populist left to me.

Let's look at it from a high-level. "Fixing" the housing criris would require a major depreciation of housing assets. Does anyone believe the companies and individuals holding onto multiple homes will accept this without fighting? Of course not. The same people that are arguably responsible (directly or indirectly) for the housing crisis have a vested interest in it persisting. And we know how powerful their voices are with the establishment democrats, the ones this ad-hoc "abundance" movement defends.

There is no simple solution to this crisis, it will require something more radical than just tweaking some numbers on a spreadsheet.

wilkommen2• 12 months ago

I have the same view on it as you. The "abundance" people are carrying water for the establishment while trying to co-opt disaffected voters (who might otherwise find their way to the populist left) into a way of seeing things that won't meaningfully alter the status quo. Any solution to the real problems our nation is facing will require a shift of who holds power. The "abundance" folks are doing anything to distract people from the fact that this is all about power.

wilkommen2• 12 months ago

Monopolistic activity and corporate consolidation are driving up prices in many industries in the United States. Why wouldn't corporate consolidation be a major factor in driving up housing prices, like it is in so many other sectors? I am suspicious of journalists like Derek Thompson and Ezra Klein because their solutions seem to punch down on municipal governments and homeowners instead of punching up at our nation's corporate masters and elite class, who would be much more threatened by effective antitrust action against homebuilders than they would by a movement to deregulate zoning in cities. I am open to the idea that excessively restrictive zoning could be a part of the problem, maybe even a big part. But I am skeptical of anyone who wants to act like excessive regulation is the sole driver of skyrocketing housing prices. It doesn't hold water to me.

tvier2• 12 months ago

This opinion sets up corporate consolidation as the cause of all issue in the US. I don't think it makes sense for that to be the null hypothesis that needs to be disproven.

For this specific issue, homebuilding, and construction in general, are very regional businesses. There just aren't a few giant homebuilders controlling the industry across the nation.

There are certainly some antitrust issues with rentals, but they don't seem to be nearly as widespread as the housing issue in general.

I don't think the punching down vs up lense is a particularly effective way to analyz this issue. Nor do I think its easy to figure out who's "down" and who's "up".

adammarples2• 12 months ago

From the article: a) there is not really monopolistic activity going on, and b) homes have a fierce second hand market which pushes down on this

ph1sch3r• 12 months ago

A contributing factor to housing costs I don't often see mentioned is urbanization. In the 21st century, population density has increased faster in major cities than rural areas.

The picture is probably more nuanced in the last half decade (post COVID), with many people moving to the countryside.

mactrey5• 12 months ago

Another factor is smaller households. People are staying single longer and waiting longer to move in with partners, creating more demand for housing even without population growth.

talkingtab• 12 months ago

Fish Tank Thinking is where your thinking is so constrained by some artificial walls that you cannot actually ... well actually think. It is the wages stupid. Let me repeat that. It is the wages stupid. What happens when a society is so brain washed that it cannot even consider that if you don't pay people they can't afford housing. Or cars. Or medical care. Or food.

If you actually have some desire to consider the problem rather than discuss how many angels can dance on a pin head, start with considering why "Inflation" is not a measure of anything thing, but rather the sound of one hand clapping. What is the other hand? Wages.

In this country rather than fixing wages we are discussing solutions that make things worse. Let us add tariffs so that people can buy less. Let's create tax incentives that create more housing people cannot afford, with the tax incentives coming out of the pockets of the people who cannot afford that housing.

tvier2• 12 months ago

While I 100% agree that there are wage issues, the question with housing is why it's growing faster than general inflation.

House prices seem to be increasing fastest in places with high incomes. This leads me to believe increasing incomes wouldn't solve this particular problem.

LargeWu14• 12 months ago

You seem to be guilty of Fish Tank Thinking here yourself.

Housing costs are not divorced from the laws of supply and demand. Raising wages creates increased demand for housing, but you still need the supply! Raising wages without increasing housing supply will just make housing more expensive.

zkelvin• 12 months ago

Exactly! This video goes into this phenomenon more in-depth: https://www.youtube.com/watch?v=N_GLfxaYTYI&t=2s

This has actually been a known issue for over a century with Winston Churchill even commenting on it.

magicmicah85• 12 months ago

If wages go up, housing will assuredly go up as people outbid each other. Wage stagnation is a problem, but it's not the solution to the housing crisis. People would still be unable to afford homes as they get outbid by people who have slightly more than them.

h2zizzle5• 12 months ago

Because if you fix wages, you fix inequality, and inequality is the entire goal of this coup.

NiloCK• 12 months ago

The antitrust pushback against regulatory efforts to increase housing development is approaching a reversal of that New Yorker cartoon.

[ set in an urban tent city ]

"Sure, we destroyed the expectation of dignified living standards, but the glorious fact remains that we've capped returns to certain shareholders."

amosslade• 12 months ago

As someone whose built houses as a contractor and subcontractor for 20+ years, I’d say these article has it mostly right, but misses two major factors in increased costs.

And that is permitting time/costs and the costs of complying with ever more stringent codes.

If we could build homes to the codes of 1990 and the permitting process was the same as it was in 1990, you’d immediately knock 20-30% off of the cost of construction.

What leftists and bureaucrats (and most people in general) never understand is the time value of money. Every extra day added to the construction of a $500K project is a few hundred dollars of interest costs, risk costs, and lost opportunity costs. Those numbers add up quickly. And nowadays, projects take much longer from idea to completion than they used to.

ben7799• 12 months ago

You are agreeing with abundance theory here 100%. The author of the article is one of the Abundance folks. The issues with code and permitting and environmental review take up a substantial portion of the book.

abvdasker• 12 months ago

It's always pretty suspect when you first hear about the opposition to something in its rebuttal. I've heard lots of critiques of the abundance movement and this is my first time hearing anything about housing cartels. Maybe someone had this critique but it isn't the dominant strain of criticism of the abundance people. It feels like Thompson picked the weakest argument to debunk rather than one of the many stronger ones.

mactrey5• 12 months ago

What are some of the many other, stronger criticisms of the abundance agenda? Maybe Thompson has replied to some of those, too.

austin-cheney• 12 months ago

Where I live the city has gained 90,000 people in the past 5 years. It’s about 68 new residents a day or about 30 families.

They have been building houses as fast as possible here. When single family houses weren’t springing up fast enough then came the explosion of giant apartment complexes.

I am not discounting the actual economic causes mentioned in the article, but securing financing appears to be a major factor that slows things down.

Nevermark• 12 months ago

Three major problems with housing economics.

The first two go hand in hand, and could elegantly be solved together:

1 & 2. Pervasively (and perversely), "property taxes" greatly undertax negative externalities, and then heavily (punitively) tax positive externalities.

1. The undertax is that only a fraction of property taxes are just for the land. Land is a limited resource, and "ownership" of land is exclusionary. Exclusion is a negative externality, which is ok as long as that is economically accounted for.

So taxing land more, would encourage more efficient and effective use of it.

2. Property on land is the positive externality. We all benefit when land enables higher active value. More housing, office space, etc.

But it requires investment to improve the usefulness of land, and we not only tax that, but tax it annually, an annual wealth tax!

This is highly perverse, in that it undermines the economics of increasing the productivity of land. Whether a land owner is rich or poor, the economics of putting work or capital into improving one's property come at the cost of being taxed on that improvement - every year - forever.

The solution is to only tax land, not property on it, so land is incentivized to be used efficiently, and investments that improve its active usefulness, are not economically disincentivized.

Making that change and renormalizing "property taxes", not just land taxes, for neutral public revenue, solves both problems with one stone.

A decade or so transition, would allow this change to happen, while giving land and property owners who have made investments under today's regime, time to adapt.

But the end result would be better for everyone.

More efficient, parsimonious, effective use of land. More investments and innovation in increasing property's useful for everyone.

Unlocked growth in real estate returns, as a market primarily based on improving net usefulness, with higher returns, than passive ownership. The latter providing no net benefit to society or the net real estate market.

Credit for the above analysis: Economist Henry George [0]

The third problem significantly compounds the problems of the first two, but would go away naturally if they were solved:

3. Markets take advantage of anything, even inefficiencies.

Given that land is a limited resource, that the value of land increases as investments are made in adjacent properties, even without investments in one's own land, buying up land (with whatever property is on it), and letting others invest in neighboring land is a very good way to get a reliable return on capital. Because demand for land is always going to up, even when used inefficiently, with the current tax regime.

This is an economically parasitical way to make money. It treats land like Bitcoin or gold, in prioritizing its use for passive returns, instead of investment in increasing its active value.

And "parking" of money, for its passive returns, is so reliable, that the financial instrument demand for land drives up prices. Not just by a percentage, but in a self-sustaining and compounding circle of ever rising prices. For an investment "use" that has no net benefit to society.

Resolving problems 1 and 2 would greatly reduce the passive return on land. Which would not only make land use more efficient, but eliminate the compounding pricing problems of near universal use of land as a passive parking place for wealth.

[0] https://en.wikipedia.org/wiki/Henry_George

salynchnew• 12 months ago

This article appears to be focused mostly on the line of argument that there is some cabal of builders that keep housing prices high. This also mostly seems to use Dallas as a case study, which is weird, b/c you can't test a lot of other argument about the effects of building/permitting requirements.

It should probably instead be titled something like "This one anti-abundance critique on housing is wrong"

theincredulousk• 12 months ago

Small companies can have downsides, and big companies can have benefits. A virtue of scale is that it can provide resilience in an age of crisis.

Nassim Taleb would argue the polar opposite of this.

I like the article. Starting to make assertions about benefits seems premature.

biimugan• 12 months ago

That builders can't construct housing in whatever form-factor they want and whatever part of a municipality they want might be a problem. But the analysis of why these kinds of restrictions exist, to my mind, is not correct.

Do niche interest groups have influence on housing policy? Sure. But these niche interest groups don't usually have a monetary interest in the outcomes they're promoting. But individual homeowners (who often band into interest groups of their own) and large real estate conglomerates do have such a monetary interest. They consider certain types of housing built in a certain way to have *more value* and be worth more. So they promote politicians who introduce zoning and other rules to protect that value.

For someone looking to make a profit off of housing (or even to invest in housing), what is more appealing? A traditional U.S. suburb? Or a Kowloon walled city? One is denser, cheaper per capita, and (if you're not careful) unappealing to look at. In other words, it's worth less. So there is a great monetary pressure from people who already own homes to prevent "mixing" this type of housing into existing planned communities. People who need homes, on the other hand, are a little bit less discerning (to say the least). They don't have a monetary interest necessarily. They're primarily looking for a permanent residence.

So I just don't buy this "abundance" stuff in general. If you remove all of these restrictions, will some companies start building housing? Some will. But my guess is most will say the juice is not worth the squeeze -- the profit margins and the long-term values of these properties will make it unappealing. Just like it's unappealing for grocery stores to set up in big urban areas. Or for hospital providers to set up in rural areas. Food deserts don't exist because of too much government intervention. A lack of rural hospitals is not a problem because of too much government intervention. It's because those things are not profitable.

So in my opinion, if you want to reform zoning rules or things of that nature, it's only really going to be effective if you *force* (or if you want to be politically correct, "incentivize") housing companies to build in these areas too.

I don't really consider this an "anti-trust" argument. It can be equally true if there's a lot of competition in the housing market and if there's next to no competition. It's more of an incentives argument. This is an argument that, like with medical care, we're treating something that is a fundamental need of every living human to have a stable and peaceful and fruitful life as if it were a standard market commodity. And when you do that, you get poor outcomes. We need to support the building of housing *even if* it's unaffordable or has low (or even non-existent) profit margins

The anti-abundance critique on housing is wrong

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