We are talking about the United States, not a free market. In the United States, the stated policy of the central bank (hint: free markets have no central banks that control interest rates and pick winners and losers) for the last 8 years is to inflate housing prices. The FED and the big banks still have trillions of dollars of worthless derivatives on their books that they have not "marked to market" because they are derived from mortgages on homes that are underwater. The FED has taken over 5 trillion dollars onto its balance sheet in the last 8 years in order to artificially inflate housing prices (not including off-balance sheet loans, guarantees, and other tangible efforts taken to prop up banks and home prices).
This is the opposite in a free market. In a free market, housing prices would plummet with demand and credit availability, and would reach an equilibrium with income. This is impossible in our centrally controlled economy that runs on debt service in which even a small bump in interest rates or a small drop in assets prices will cause the whole scheme to fall apart.
Edit: The Downvotes without replies are somewhat amusing. I can't decide if its out of ignorance of the financial system on the part of those who read the hacker news, or cognitive dissonance. I suspect a mix of both. I welcome anyone who thinks any of the above is inaccurate to chime in.
As far as downvotes go, HN leans left, that is not news, any conservative or libertarian views will collect the usual down votes. Strangely it happens in bunches too.
https://www.newyorkfed.org/markets/ambs/ambs_faq.html
>The Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to purchase additional MBS and longer-term Treasury securities (see http://www.federalreserve.gov/monetarypolicy/fomccalendars.h... for the most recent FOMC statement). The FOMC also directed the Desk to maintain its existing policies of reinvesting principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction. The FOMC noted that these actions should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
https://www.justlanded.com/english/Sweden/Sweden-Guide/Prope...
You could claim that it's not a free market with the set of freedoms or policies that you'd like to have implemented, but to claim that the US is not a free market just because the Fed has taken some action seems like a fallacy to me. (BTW I agree with you in questioning the wisdom of that particular set of Fed actions..)
Most cities in the US have all kinds of zoning regulations that prevent cities from reaching higher population densities: https://news.ycombinator.com/item?id=11918230. For example, there are quite a few livable cities in the world supporting > 15,000 per sq km, most cities in the US hardly reach half that amount.
This is definitely not a free market phenomenon; I am pretty sure that in a free market (or even a market with rationally determined, not NIMBY based regulations), there would be increases in population density of major cities in the US.
Another would be keeping people 'in the system' long-term, otherwise it doesn't really work (if the original landlord tires of it, what stops them from 'just reverting' to the old system?)
It's an interesting idea, but it'd be hard to test out.
There are multitudes of banks with different policies. There are multitudes of other ways to get capital. In the D community, we used Kickstarter to fund the first D conference, for example.
> what stops them
That's what contracts are for. Contracts are a central feature of a free market.
So, you don't think that it's a hurdle that your rent has to be split 20% to the previous tenant, 10% to the tenant before that, 15% to the tenant before that, 8% to the tenant before that, 33% to the tenant before that, and 20% to the tenant before that? Who is doing the legwork in tracking these tenants down? What happens when the combined 'equity' goes over 100%? When does the landlord bug out? Who wants to keep tabs on their 8% equity of a rental home that they occupied for a year five years ago, along with paying 8% of the upkeep for any repairs or administrative work? Who wants to chase up all the previous tenants and get them to cough up the money? How much time does that person waste if even one previous tenant won't pay (or can't)? If the original owner wants to sell the property, what happens to the tenants with equity? What if they have more equity than the original owner, can they force the owner not to sell? Can they force the owner to a reserve price? Does a new tenant have to make a contract with the owner and all previous tenants? Is there a new kind of corporate body to handle this new form of renting? Are the contracts around this new way of renting going to be easy enough for the general public to understand, or are they going to provide plenty of loopholes for sharks to operate?
I think that's enough to classify as 'a hurdle', and people need to be in the system long-term and at scale to figure out how it's going to work well. Hand-waving that problem away with "meh, contracts" doesn't solve the long-term issues.