HN user
Huh? Not sure I'm following.
The $/sqft of housing tends to go up as density increases... for the same reason as the article is suggesting: incomes are higher, so people can eat higher prices.
No, those policies only matter, definitionally, in so far as they actually affect the elasticity of supply. The elasticity of supply is what they measured and found it does not matter, ergo those policies (and all related hypothetical supply-elasticity-affecting forces) effectively do not matter relative to other factors (well, one factor in particular: income).
It's not "bad math." It is exactly what the article (and I) describe: real estate's prices are principally set by the local income levels.
If the market couldn't bear it, you'd have vacancy. But you do not.
there is artificial scarcity up and down the chain with real estate
Which, according to this analysis, does not actually significantly affect prices relative to other factors.
I understand your theory and I intuitively don't find it "wrong" per se, but you're staring at an analysis that shows you otherwise. Your critique of it not factoring in things like policy is explicitly wrong: all of those factors are fully accounted for in the ultimate supply elasticity.
So if policy is accounted for (it is), and your theory doesn't hold, it's time to either come up with a different critique of the study or acknowledge it as clear evidence against your theory.
This is discussed elsewhere but "market prices" are a distribution of bids and asks. A buyer or seller can be on the high or low end of that distribution, which does not change the fact that the distribution itself moves up as local incomes go up.
Well, they are buying land because housing exists on land. As discussed elsewhere in the thread, if you make the housing upon that land more elastic (e.g. by loosening zoning restrictions), that elasticity pretty much immediately gets baked into the price of land itself.
This is so significant an effect that there is a highly lucrative business in simply buying low-density zoned land and going through the entitlements to turn it into a high-density zone. This does not just generate a free lunch for a developer to build more units on the same plot of land at the same price, it makes the land instantly more expensive.
Except that the order of events goes the other way
Because for instance, you'll rent at 30%, but if there was honest market pressure (and lets face it, there isn't) why wouldn't someone else rent at 28%? Or 25%? etc.
They do! And then like all other markets, equilibrium is found, and that equilibrium point is what moves up as incomes move up.
Food, vehicles, and energy all have elastic supply. Higher prices induces more supply. This is not the case with land.
No, seriously. I am a landlord. How do I set rent? I ask myself: "How much do people around here earn?" And I set my price at ~30% of that.
I am currently selling a house. How do I set my price? I ask myself: "What salary would someone moving to this area likely be making?" And I set my price accordingly.
Literally none of the zoning laws are necessary. This method is how price is set in 100% of real estate transactions in 100% of localities, regardless of any other regulations.
FWIW I'm also an LVT zealot. Have you read Progress & Poverty yet?
it itself is not the cause in the sense that income levels directly cause housing prices to go up.
It quite literally is directly the cause. The price of real estate in an area is overwhelmingly defined by the productivity of the local area.
Productivity goes up → income goes up → real estate prices go up.
It's not even that. Under the US Constitution everyone, citizen or not, illegal or not, desirable or not, has at least 1st Amendment and Due Process rights.
No no, you're misunderstanding. The study did factor locality-specific inputs like the ones you're describing. In fact they included all of them by measuring the actual realized supply production for each locale.
It's that those factors don't appear to matter.
1. Property tax is not land value tax, and "high property tax" does not behave at all like a quasi-land value tax even if land value is a component of the property tax.
2. No, it specifically makes sprawl very expensive relative to density, and economic decisions are largely made on a comparative basis. LVT makes it free to increase the density/productivity of your existing lot, while taking ownership of another lot (more area) introduces a huge new tax burden that you have to put to very productive use very quickly.
It's way, way cheaper to increase density than sprawl under LVT.
No, they specifically looked at changes in income. Incomes go up before housing prices go up.
All of which, they argue, ends up not predicting the movement of prices.
Meanwhile, simple income level does predict the movement of prices.
No one in this thread is proposing that
The term you’re looking for is “impoundment.”
They impounded funding. That’s exactly what they’re doing and it’s exactly what’s illegal.
Glad you don’t dispute Congress’s Constitutional role though!
Congress controls the budget, it really is that simple.
If I believe USAID is full of waste, fraud, and abuse, I’m free to express that at the ballot box where I vote for a congressperson who wishes to vote on the next budget accordingly.
The executive has many dimensions of freedom with regard to federal agencies. “Existence of” and “funding of” are not among those dimensions of freedom.
True integrity is being a fan of someone no matter what they do or say, indefinitely into the future
Even just a "little" (5%-10%) corruption is a moral stain on the whole thing.
Timeless: https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
How about let's solve problems practically instead of having trillion dollar decisions made in the name of virtue signaling about "moral purity."
But doesn't the DC bureaucracy represent a common enemy to those on either side who value democracy?
Uh, no. USAID etc. have money because our elected representatives gave it money, as prescribed by the Constitution which governs our country.
Land prices have been rising mostly because of productivity gains. Land is completely free. There is no inherent cost to it. All cost is derived from its productive power, and productive power rises as technology improves and as people congregate in greater density.
You could outlaw loans altogether and land would still not be anywhere close to free.
It's the land price. Rising land prices are the problem, and land is in completely fixed supply. You cannot induce more supply with rising prices. Land is the dominating factor, ergo local variations in housing elasticity don't really matter. Clearly there is some inelastic thing that is eating all the increased local income without inducing more supply: it's the land.
Edit: To the people saying "you can build more on each piece of land!" sure you can. And that should definitely mitigate price increases, but that's exactly what this paper says actually isn't predictive of prices, clearly because cost is dominantly driven by something that isn't affected by this elasticity. The value of higher density development gets immediately baked into the land prices, which then does not induce more supply of land.
Ah, Henry George was right once again.
Land Value Tax solves this.
Maybe vibes isn’t the best way to interpret the goings on in the world
Vertical integration among healthcare providers, insurers, and pharmacy benefit managers (PBMs) due to PBMs being extremely costly middlemen. So the big insurers and providers started buying the PBMs and using them to abuse pharmacies out of the market to continue their vertical integration and complete rent-capture of American health.
The reposte I receive when suggesting that society utilize charity as a vessel for ensuring the poor get what they need
Well you're kind of begging the question in your proposal. Sure, if we could ensure (the word you used) that needs would be met by private charity, that would be great. But the government IMO is a useful backstop to prevent the absolute worst case outcomes, and there's no reason private charity can't stack on top of that: which indeed it does.
If requesting private charity is sufficient to solve the problem (let's say... homelessness?), then why isn't it solved already? Is your contention that if people didn't have to pay taxes, they'd charitably give enough to solve the problems that today's combination of government and private charity cannot? It seems like if we're going to charity our way out of these problems (not that I believe that's necessarily the right directional solution), we need at least both of the forms we currently have.
I personally have not met anyone ever who believes private charity is undesirable, so not sure what change you're proposing.
We tried it for the first couple thousand years. Turns out it really sucked, which is why 100% of civilizations (in which you’d have any desire to live) figured out alternatives.
“Florida is too big for public transit” is entirely circular reasoning.
Things are so spread out because of dependence on private transit.
The more densely (and public-system connected) we can make our cities, the more divine Ocala National Forest-like experiences we can access and preserve for our children.
COVID and our current political predicament are basically the same event, and COVID was a once in a lifetime pandemic.
Sure something is always the most pressing threat to stability, but that does not imply all eras are similarly unstable.