Hacker News Reader

Comment by Eridrus | Hacker News Reader

Regardless of basic income, fixing housing is super important since it's one of the biggest drains on everyone's income and the fixed nature of it suggests that just giving everyone more money will cause a lot of that money to just end up in landlord's pockets.

I think a lot of the change must be policy change though and cannot be purely free-market oriented since there is a public interest in seeing more housing stock built than a capitalist would want.

View on HN

So much this. We've see this over and over. If we get more productive the rentiers take it. We need to squash the rentier starting with land value tax. And stop taxing labour.

Then you have the true choice because you can achieve financial autonomy through work and then tell the man where he can stick his job if he refuses to pass on enough of your value added.

Cheaper land will see less people forced to work which will mean higher wages and more disposable income. And all the people doing nothing other than "investing" in extorting money from workers for the right to occupy space will have to suck it up.

This topic basically terrifies me. When I see people asking for basic income without addressing land issues (and money creation) it just shows they are on the wrong track. Big time. Basic income will just become "landlord income". In the UK we have "housing benefit" which sets a floor on rent and guarantees land owners get more than the market can support. It's "landlord benefit".

BI could have an impact because it could relieve the pressure on job centers (SF, NYC, LA, etc...) as people wouldn't be forced to move to look for work (and I imagine plenty of folks would leave those areas as well, because they are no longer as dependent on their job as they once were). At least in the US, there are a ton of midwest and rustbelt towns that have really cheap cost of living and plenty of land, but due to lack of jobs, are in really poor shape. BI could allow for people to relocate there, and the new influx of people (and income) could lead to revitalization.

Agreed BI would save on admin costs for benefits. But it's not going to solve the greater problem of economic rent extraction through land.

If we have more money they will take it off us via land. Saving on job centre costs makes us more efficient. Efficiency flows to the rentier. You'll be right back where you started with BI. Up BI and they'll up rent. And again.

In your example once you have your revitalisation and all the people pay taxes to build more roads and hospitals guess who's waiting for you with a big hat to shovel all the gains in? The land speculator. Up go the rents, up to the level where people have enough to live but no more. And back to square one.

Surely they deserve the gains, after all they are investing their hard won money? No! Fiat money takes no resources to create and the bankers will have your shirt. Private banks create money from nothing and "lend" it out if you promise to give them a cut of your labour as "interest" for 30 years.

Bank of England official blog:

http://bankunderground.co.uk/2015/06/30/banks-are-not-interm...

I think BI could mean the end of homes as an asset class. Mortgages will become a super low risk loan meaning that interest rates will go through the floor, in turn making home ownership supremely affordable. If everyone can afford a mortgage then why would anyone rent?

I don't see why you would think any of this would follow.

Why would mortgages be "super low risk?". Why aren't they low now?

Also lower rates means higher prices. Your post makes no sense.

They would be super low risk because everyone would have a guaranteed way of paying them every month. If you have to ask why they aren't low risk now then I assume you have no experience in being broke and not being able to make rent. High demand with unmatched supply means higher prices. Rates can influence demand but if you take the majority of rental properties out of the market because people sell them due to low rental demand it will sort itself out.

> High demand with unmatched supply means higher prices.

You've just negated your own argument that home ownership is more affordable under BI. BI would increase disposable income across the board, increasing demand for purchased homes that is not necessarily coupled with an increase in supply. Prices go up overnight.

And home mortgages are low risk now - rates are about 3.5% which is among the lowest you can get for any loan, especially one multiple times higher than the borrower's yearly income over multiple decades, and any responsible person will be paying their rent long after they've switched their diet to PB&Js and ramen noodles. It's the first thing coming out of every check.

In the short term you are right but long term rental market could drop out as people choose to buy instead of rent freeing up lots of housing (people selling their rental investments as their returns dwindle) so that supply matches demand.

Regarding low rate mortgages... you remember 2008 and the years leading up to it?

If everyone pours much of BI income into mortgages but the supply of housing stays limited, then the price of existing houses will just go up-- and much of the BI income will get eaten up by housing price inflation.

Supply is limited in large part because everyone wants to live in the same place (ie where there is lots of work). BI will change that too, allowing people freedom to move where they can afford to live without worrying whether there will be jobs waiting for them. The free market in action. The impact a BI will have on society means that many of the patterns we see now will be flipped on their heads.

I'd say the housing problem in the UK is a lot worse than the US, at the average income (£26,500) you won't be able to afford a house in 91% of the country:

http://www.theguardian.com/society/ng-interactive/2015/sep/0...

> just giving everyone more money will cause a lot of that money to just end up in landlord's pockets.

Are they not providing a valuable service? I mean you say this as if it's blatantly obvious that this is a negative consequence.

I don't think there would be any additional value created by giving them more money, they would simply be capturing more of the value that exists, and I don't think enriching moneyed special interests with no gain to the general populace is good policy.

And I also don't think they are creating any significant value so much as extracting rents.

Reply on news.ycombinator.com