Hacker News Reader

Comment by hnuser847 | Hacker News Reader

Another article blaming speculators instead of central banking policy. The author never bothers to ask, why has every asset class, from residential real estate and RVs to penny stocks and junk bonds, dramatically increased in value since March of 2020?

View on HN

This has definitely been a problem long before last year. Heck, in 2018 Harvard Square lost a great cafe everyone liked that had been there for years because a landlord firm off in North Carolina figured they could charge triple the rent if they brought a VC-backed NYC chain restaurant in.

If a new tenant can afford triple the rent then they are (at least) 3x as productive. Why do you want to reward less productive businesses? Do you also enjoy working with coworkers who are have 1/3rd the productivity you?

Because lots of less productive businesses still provide excellent products or services. I can think of lots of local restaurants, bookstores and cafes near me that are less productive than McDonalds, Barnes & Noble and Starbucks, but non the less have better food, curation or coffee than their competitors.

Many of the common reasons that make companies able to pay more rent do not align well with preferences of locals. They could have higher prices, pay employees less, use lower quality ingredients, give less personal attention or externalize costs through say noise pollution. They also often have competitive advantages through brand recognition or company support, that don't actually increase quality

That's simply not true.

VC funding distorts this, since at that point what you can afford is no longer based on productivity, but how good you are at convincing investors. As a customer of the cafe, you're no longer serving my interests at that point since that has nothing to do with my experience.

Also, I would like to reward the service-oriented business that provide me the most enjoyment regardless of their 'productivity,' or, to put it another way, my (as a customer) enjoyment is exactly the 'productivity' that should be measured, not how much rent they pay.

All the while the long standing institutions that make Harvard Square what it is continue to shut down, only to be replaced by bank branches and national chains. This isn't really a new development, it's been happening since at least the 1980s, but has become much more apparent in the last 15 years.

The joke is several bank branches are starting to close in NYC because rent is too high. Hah.

+1 to this - it's fruitless to build public policy on businesspeople behaving economically irrationally, and worse can you imagine if they did?

It is reasonable and useful to pitch businesspeople on sacrificing short term gains for clear, low risk, long term benefits - and proof lies all around us from empty storefronts that could be leased at lower rates, to homeowners locking in 30 year mortgages.

Greater time horizons require much greater stability to control risk.

Theres definitely an inflation problem but in addition US realestate has had issues for most of the 21st century.

A lot of this is property taxes which has nothing to do with the banks

Reply on news.ycombinator.com