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Comment by greiskul | Hacker News Reader

There is also the Georgian explanation that rent seeking landlords will always increase rent to match any gains in production. Assuming that a landlord will always charge the maximum they can that market will sustain, any increase in production will mean an increase in what the market can pay for housing, and with time, what the landlord can extract from tenants. It neatly explains how cost of living correlates to job opportunities, and how all the productivity gains from technology end up not increasing the general population wealth.

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Isn’t that where remote work kicks in but we’re too stupid to realize? If the tech people don’t need to concentrate in one area, good luck jacking up the prices to siphon off that wealth.

Tech needs to create a box. Literally, a hurricane proof box that that plugs into plumbing. Drop it anywhere in the world and fucking live in it. It’s the same box for everyone, like the iPhone, iPhones are not more expensive in Bay Area or NY. All this nonsense over the fact that we all simply need to live in a box somewhere.

Tech people, even those working from home full time, have to contend with living somewhere nice with good schools and perhaps a place for their partner to work (if they can’t WFH also). Given that those places tend to correlate with expensive real estate, it doesn’t seem like WFH is going to do this work for us.

Techies just don’t want to live in just boxes.

I know people living in those famously cheap Midwest areas people online always propose as the obvious solution to avoid high rents. Rents even in nowhere areas have blown up recently.

And remote work really won’t change rents much for normal people. People want to live where their family and friends are, where some good restaurants are, where some good weekend activities are, where some nice nature is an hour or two away, where a good hospital isn’t too far, and where grocery stores stock good food. Any one of these and landlords decide it’s okay to raise prices 30% a year.

People theoretically have a choice, but every landlord everywhere is doing this. People leave one town with rapidly increasing rents and go to the next, and those landlords do the same while the people in the already expensive town never lower prices. There is no escape or alternative.

> Rents even in nowhere areas have blown up recently.

Home owners are snapping up rentals to prepare to sell their property at market peak.

In a rising rates environment, house sale prices tend to fall (or rise much more slowly at best).

Really? Can you share more about this mechanism?

I actually noticed someone opposite (are maybe it's the same mechanism) in the area I live in:

House sale prices are rising like everywhere else, but rents stay mostly flat.

I'd love to learn more about it.

Rent stayed flat because of the moratorium, not because of the demand. You will start seeing the rent increase as the leases are coming up for renewal, many places are already up for 20% rent increase.

House prices are roughly dependent on income which means dependent on monthly payments.

Rents are even MORE dependent on income and it’s easier for renters to move, so rents often end up below the mortgage cost for a similar purchase.

Take a fixed monthly payment, with lower rates the principal can go up. Thus house prices can go up. On other hand renters have the same pretty much fixed monthly payment.

Rent's are not tied directly to value of property, but need to service the debt linked to property. Or equivalent one.

sokoloff was talking about rising rates, not rising rents. And I agree completely, when interest rates rise money is more expensive, thus credit/mortgage has more interest, thus people can’t afford that much of a property price for the same monthly installment, thus property prices are going down.

Let's see if they can pick it.

That’s only possible if there’s is never enough housing for everyone. ITV does sort of work out because western building cannot be built for lower income folks as they cost too much. So low cost housing is essentialy all old end of life building

Personally, I think one of the greatest mistakes of capitalism is to make property an investment asset.

Nobody made it an investment asset, it just happened as certain pieces of land grew more valuable for practical reasons. This is unavoidable unless you make it so you can't sell property, which would also mean you can't buy property - the government would need to manage peoples' needs based on family size and do the maintenance of maintaining property to the same level as landlords.

Ending up in a monopoly.

This is not true. We did make it an investment asset around the advent of agriculture. And there is a way to avoid it without freezing the market, which is called the Land Value Tax. As far as I know, no serious economist (from any ideological perspective) seems to actually dispute the functional fitness of this tax.

https://en.wikipedia.org/wiki/Land_value_tax?wprov=sfti1

Bad money (like inflationary fiat currency) creates the need to use other assets to preserve wealth, which creates bubbles in those assets.

Bitcoin advocates say good money (Bitcoin) will return the value of all other assets to their utility value because the best passive store of value will be the money itself (which due to a fixed supply would be deflationary).

In that world, people would rather sell assets they don't use to accumulate bitcoin (or money x) because only useful activities will produce more yield than the money itself. This frees up housing, land, precious metals,... and all other resources that are artificially scarce due to hoarding for wealth preservation.

I've heard people estimate, under a Bitcoin standard, the actual utility value of a house would be approximately 5-10% of current prices.

This is hilarious.

Feel free to share if you have any criticism of this view.

It might not work in practice, but it is certainly a big factor behind using housing as an investment mechanism.

I think we really need to limit how many one can own. Start taxing very very very heavily for anything beyond a second home for individuals and and anything beyond another number based on statistics for a company. Also add attitional tax for every two months a property is owned but no one is living in it or using it for business. This should cut down on hording and incentivize companies and people to get rid of any property that is just lying there waiting for prices to go up.

Just institute high Land Value Tax and you kill these birds and their tax evasion schemes, with one very simple stone.

Land tax is horrid. A person should be able to live off the land if they choose, self sufficiently. This is impossible when the government demands yearly cash payment just for having your own place to farm.

A person who removes land from the common good should have to do something productive with it, give it back to the common good, or simply pay a fee to the commons for having kept it from productive use. A person absolutely should not be able to keep several blocks of downtown Manhattan off the market so they can run a private farm for themselves.

In practical terms, anywhere a person would want to do such a thing, the land would be cheap enough that LVT wouldn't really matter anyway.

They do pay a fee to the commons for removing it; it's called sales tax. They are also doing something productive with it, by living on it and using it.

If we are to keep trespassing laws, there must be ways to own land permanently and without further cost. There must be a way for man to survive without participating in government enforced labour. All land is owned by some entity; he can't live in the woods owned by the government or someone else; even after buying land and being entirely self sufficient, he cannot simply live, but must pay the government in their currency which he can only get through participating in the labor economy. There is literally no legal way to live freely by your own means. This is a form of slavery that the ancients would find absolutely intolerable.

Increase the price of land or the sales tax, limit the ownership a single person can have, levy inheritance tax, but an indefinite land tax is inhumane.

Huh... who does enforce trespassing laws? I'm 99% sure that's the state, and for good reason. Are you supposing that the unlanded should pay for the protection of the landed's assets, but that the landed doesn't need to?

> A person who removes air from the common good should have to do something productive with it, give it back to the common good, or simply pay a fee to the commons for having kept it from productive use. A person absolutely should not be able to breathe several kilos of downtown Manhattan oxygen off the market so they can continue their private lives.

Is this meant to be a counter argument? Because yes, if air in a given area were a strictly finite resource that everyone needs for survival (like land), one person should not be able to just indefinitely own enough of it for millions of people to live on.

if you want to live in my house, and within the safe and comfortable legal framework of tenancy in a property lease contact, then you have to pay competitive market rates to live there.

"Pay your fair share" to the "rent seekers" if it is a place to live that you are seeking...

This falls apart when the rent seeker refuses to sell, or prices the sale out of the reach of first time buyers.

I can't square a landlord running empty properties when the economy colludes to keep people from buying properties.

Homes should not be straight up financial instruments.

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