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Comment by fezfight | Hacker News Reader

So I think folks overlook just how wealthy certain investors are when they propose the fix is to just build new properties. Those will also get snapped up by investors. To fix the problem, investing in housing needs to be either banned or made very unattractive. You only need one house to live in.

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I agree with you, that's a whole other problem. But housing like many goods is still subject to supply and demand. The investors buy the properties because they are actually good investments in situations where housing is in demand, and that's true in all the major cities where we're not building enough housing and appropriately sized housing. If we increase the supply, if we make smaller housing units so there are also affordable units for poorer renters. The investors will move on to more lucrative investments. They can only extract so much wealth from housing before people move for alternatives.

Everybody has a place to live. Housing isn't scarce. When housing is scarce, people are homeless or living in extremely tiny spaces. They are not. The problem is that people wouldn't be able to afford to own the places where they live.

Housing is only "scarce" in desirable places, and that's simply tautological. The sum of unfulfilled desires is the contrapositive of scarcity.

Housing is a market in which a very tiny percentage of goods are up for sale at any particular time, and the projected prices of those goods are heavily shared among a huge network of people who profit when the prices are high. The owners of those goods are often heavily leveraged, and can't afford to lower the price significantly, and the transaction and mortgage costs push them to raise the price to cover those costs at the next place they buy.

> They can only extract so much wealth from housing before people move for alternatives.

No such alternative, which is why the market is as lucrative to exploit as health care. Finding an "alternative" to health care is just to find another type of health care, and if you find an alternative to being housed, you've just found a new kind of house.

Ah yes, everyone without a home is simply a lazy poor who should just move to Mississipi where the land is cheap and the jobs are abundant.

I left California because I couldn't afford to own a home there.

Which is why California needs to fix the policies that led to its housing shortage. There is no inherent reason for California to be so expensive, it is a deliberate policy choice driven by local governments.

Maintaining the character of a neighborhood as single family houses. Even as prices exceed $1,000,000.

> Which is why California needs to fix the policies that led to its housing shortage. There is no inherent reason for California to be so expensive, it is a deliberate policy choice driven by local governments.

There's a lot of truth in that, but it's also an oversimplification.

There is plenty of cheap land in California, here, have a quarter acre lot for $15K:

https://www.redfin.com/CA/California-City/Princeton-Ave-9350...

Of course it's cheap since nobody wants to live there. If everyone wants to live in San Francisco, it's going to be much more expensive. Building more helps but in the end there's only so much that can realistically be built in 50 square miles. Some people will always be left out so there will always be some unmet demand, so it'll never be dirt-cheap.

So yes policy obstruction is a thing, but there are also inherent reasons why popular places will never be cheap.

> everyone without a home

I guarantee you're not talking about homeless people here, but people who live in a home that they are renting, reasonably near the place they work.

edit: also, somehow these so-called poors are always wealthy programmers trying to buy million-dollar houses.

By this logic oil & gas will never run out because rising prices will incentivize new extraction technology and formerly too expensive reserves will come online. Or supply will dwindle and the price rationing system will ensure it goes to the most productive use and energy consumers will switch to cheaper substitutes.

I actually think this is what will happen to oil and gas. It will become less and less of a feature of our lives over the long run. We will have to find alternatives (hopeful!) or cut back (painful!)

> You only need one house to live in.

Many people do not want to own a home, they would rather rent. Someone has to be the landlord for all those people, and to all those someones, the home is an investment. You can only get rid of homes as investments if you get rid of renting.

This line of reasoning is flawed. The government can build housing so that people have places to rent, in a way that isn’t “an investment” in the profit-seeking sense. That’s what they do in Vienna and it seems to work great.

https://www.huduser.gov/portal/pdredge/pdr_edge_featd_articl...

And then in Singapore they have very high home ownership rates, so we could also be dramatically reducing the number of people who actually need to rent, reducing the need for private investment:

https://charterforcompassion.org/shareable-community-ideas/p...

I rented (by choice) for many years. I never once thought, "I wish the government were my landlord." The arrangement actually works pretty great just how it is. I was very happy to write that rent check every month and always felt like I got a good deal for my money, even when I lived in a very expensive market (NYC). In every case, I desired something that was very important to me and for which there's a lot of demand. I was happy, therefore, to pay for it.

That the fact has not occurred to you personally does not mean such an arrangement in aggregate would not help solve the problem of housing as a profitable investment. Maybe you didn't think of this on your own accord, but I bet you WOULD have appreciated if the same unit was cheaper, and this would be the case if 50% of the housing in your market was public housing as is the case in Vienna, even if your unit was privately owned.

Plus your single example of being satisfied with your landlord is not evidence that we should accept landlords across the board. My own landlord sucks at repairing things that need repair, and I find it very frustrating.

There is public housing in NYC, and I can assure you that your landlord is better than NYCHA.

The article I shared in my first comment in this chain addresses problems in NYC and compares that to Vienna and Singapore, which are much better. So please take a look if you would like to learn about alternatives.

https://charterforcompassion.org/shareable-community-ideas/p...

I actually know already about Vienna and Singapore. I have zero confidence we can copy that model here. Every time we've tried to do public housing it's been a disaster. At some point it's just who we are. If I keep striking out, it's no use to tell me to look to Mike Trout for an example of what's possible. I'm not Mike Trout. I will never be Mike Trout. I will never achieve what Mike Trout has achieved. If we're talking about my batting average, then Mike Trout's success is irrelevant. I need an approach at the plate that accounts for my skills and limitations.

Private parties can build housing too, if you let them.

> Many people do not want to own a home

I hate to go all "citation needed" on you, but I'm not sure this is true.

Do I want to pay for upkeep of a property? Probably not. But since renting is basically equivalent to burning money in our economy, any responsible renter will eventually feel a pull towards ownership if only to stop the bleeding.

I think we need a society where renting isn't so expensive AND owning a property isn't so heavily subsidized by tax breaks. The entire housing market is a massive bubble because of investors and speculation. At some point, that bubble prices people out, leading to homelessness and missed opportunities because people aren't willing or able to move.

Much like freedom of car-free movement, housing ought to be a fundamental human right. Not a business or a place to hide your money.

> I hate to go all "citation needed" on you, but I'm not sure this is true.

Given the number of people that rent in large cities all over the world for their entire lives, I don't know why you would find my claim doubtful. Many people seem to want to live in large, densely populated areas, and for most people that is always going to mean renting.

> Much like freedom of car-free movement, housing ought to be a fundamental human right

I disagree with this as a blanket statement; neither car-free movement nor housing as a basic right will ever work in areas that are not densely populated. And many people (including me) want to live in areas that are not densely populated. We are quite willing to pay the costs of doing that and don't need handouts.

However, in densely populated areas, I think many people would agree with your statement--but I think they would also say that "housing as a human right", for them, means availability of affordable rentals, not home ownership.

> Given the number of people that rent in large cities all over the world for their entire lives, I don't know why you would find my claim doubtful.

How many could afford to buy though?

> Many people seem to want to live in large, densely populated areas, and for most people that is always going to mean renting.

The "for most people that is always going to mean renting" is that part that we could change through large scale collective policy. That's what Singapore has done for example. No one doubts whether people want to live in cities. We are asking whether the model of private landlords is the best way to manage large quantities of housing in cites. Look at Singapore:

"Eighty-two percent of Singapore’s residents live in HDB-built (Housing Development Board) apartments, of which there are more than 900,000. In contrast to both New York and Vienna, HDB encourages public housing residents to purchase their apartments. Nine out of ten HDB residents own their homes. The 50,000 rental units are, according to the HDB website, 'for the truly needy who have no other viable housing options.'" [1]

So yes, people want to live in dense cities. It does NOT automatically follow that they will have to rent. This is a policy choice.

[1] https://charterforcompassion.org/shareable-community-ideas/p...

We do not need to hand over ownership to the government to build more houses. Just simplify zoning laws. Private landlords want to build. People want to maximize the value of their properties. They can't because of zoning laws that favor single family home hellscapes.

> They can't because of zoning laws that favor single family home hellscapes.

This can easily go too far in the other direction though, carving up a single family sized living space into 5 tiny 400 sqft apartments. There have to be incentives for mixed sized living spaces.

There is, that is “the market is willing to buy mixed sized living spaces.” I live in Tokyo, my first apartment was shocked pikachu 230sqft! Oh, the horror!

And yet there are plenty of single family homes and 2500+ sqft apartments if you want that. Just in the USA, if you want to live small - the government forcibly tells you that you’re not welcome here.

The market is willing theoretically, but practically with high property values there's more incentive to build tons of smaller units since they'll sell for more in aggregate. This happened in my city, where there's a distinct lack of family-sized apartments in the downtown core. Only older buildings from the 80s prior to recent real estate booms built decent sized units suitable for families.

Well I guess that's the problem with having failed to produce housing supply for decades, until the balance of the market got so far out of whack that pressure for smaller units is that high. Tokyo built both housing and infrastructure to increase the viable land to live in striking distance to the commercial core, and so that's not an issue (although typical apartment sizes for family homes included are much smaller across the board because of the premium on space).

To me, it's a scenario of pick your poison - continue to be unaffordable because society is not willing to accept the consequences of its failures, or eat the consequences for a brighter future. In cities like SF, I don't see a world where it will ever get affordable if they insist that everyone needs to live in 1000+ sqft apartments, unless you plan to pack it to the gills with ultra-tall skyscrapers (never happening) or it becomes so undesirable to live there that people just stop moving there (unlikely, but given the rampant human rights violations it commits everyday to its denizens... well maybe that's the most likely scenario).

Aside, Americans don't know what small apartments even mean. The presence of super tiny Tokyo apartments is a great thing IMO, it means that people can still live centrally even if they aren't rich. I think a lot of people would happily accept a well-designed 200 sqft apartment over a 2-hour commute, if society gave them that option, since Tokyo residents do that en masse everyday.

> single family home hellscapes

"Hellscapes" is uncalled for. Many people like living in single family homes. The goal of housing should not be to enforce a single cookie cutter configuration on everybody. It should be to enable a free market in housing so that all of the different preferences people have for housing can have a reasonable chance of being met. I agree zoning laws should not favor single family homes to the detriment of other types, but equally they should not disfavor single family homes.

I agree, people should be able to do with their property what they want. Many SFH owners actively try to block development of the properties they do not own, unfortunately.

Condo model ownership is very common in dense urban areas. You "own" your apartment, and pay an association to manage the repairs and upkeep of the common building and amenities.

That said, renting in the short term is still something people will want to do. Some people will even want to do it longer term, if they want no responsibilities at all for repair and upkeep or freedom to leave with no strings attached at the end of the lease.

Most of the people renting in a large city are doing so because buying is so expensive and unattainable. Not because they prefer renting.

And if it's attainable, does it make financial sense? I rent an apartment now, and to buy a similar would be roughly 1000 times the monthly rent. I would have to bet very heavily on appreciation before that made financial sense, even with the leverage of a mortgage.

> to buy a similar would be roughly 1000 times the monthly rent.

Have you somehow inherited into a rent-controlled apartment still paying the same $5 rent from 1800?

Talking about the total apartment price, not a monthly installment.

Yes most of the city is rent controlled, this is a ten year old rental contract. Rent is about 600€ and apartment I estimate would be 500-600k. Could also be more though, I'm not exactly up to date.

I can buy a house here in Tokyo but it doesn’t make sense for me to. Partially because housing is a bad investment here and rents are very affordable (which is exactly the point of OP), and partially because I expect that my needs in my current situation will differ greatly from my future needs and don’t personally want to take on the burden of managing properties at this time to compensate for that.

If by "many" GP meant "a small but noticeable percentage of the population", I think the claim is reasonable. Buying a home is a process. In additional to the standard search and short personal inspection you'd do for a rental, there's an official inspection, securing a loan, etc. It consumes a significant amount of time for a month.

For someone moving every 6-12 months, spending a month or even two per year on buying properties and ensuring the previous owners aren't hiding issues isn't worth it. If a landlord hides something this type of tenant will only have to deal with it for a year at most, but if a seller hid something they would lose a lot of money on the move.

Moving every 6-12 months isn't the default, but it's relatively common for college students and recent graduates who haven't established roots yet. Next year it's a new city for a different job or a different school. For example, for many fields in the US going to the same university for grad and undergrad is highly discouraged.

(Not disagreeing with any of your other points.)

Good point. For those in niche situations where flexibility is king, renting will almost always make sense simply because of static purchase transaction fees. When I was in college and fresh out of college, I didn't have (tens of) thousands of dollars to float broker percentages, inspections, nor the time and know-how to navigate sales and inspection processes.

I think there's nothing wrong with renting, and for folks who just want shelter with a known cost up-front, it's a great solution. The problem is rental costs that creep up and up and up and housing policies that reward the haves (of housing) but indirectly penalize the have-nots (renters) because they miss out on massive tax writeoffs.

How many college students want to bother with owning a home for <4 years before potentially moving somewhere else entirely once done with their studies?

The number of people that end up never owning or wanting to own a home is likely small. But there is a very real case for non-ownership depending on what stage of life people are in and how they want to live their lives.

The even easier argument is how many college students and new grads can afford to buy a house? Subdividing property that people can't afford is a valuable service.

Not uncommon for parents to buy a house for their kid to live in, rent it to a few roommates to cover the mortgage, then keep it as an investment or sell for a profit when the kid graduates.

But notice how that only works for a fraction (the larger part “paying” the mortgage)

> I hate to go all "citation needed" on you, but I'm not sure this is true.

I don't have a paper to link to, but reading all the housing threads on HN for years there are always many people who sing the praises of renting for all kinds of reasons that make sense to them.

And why do people prefer renting to ownership? Because it's cheaper? Because the home buying process is too difficult?

Owning a home, even if its value is deprecating, is fundamentally still more attractive than renting. You get to recoup at least some of your investment, and you don't have property management invading your personal life.

Most people simply can't afford to buy homes in the first place.

I think many people enjoy the short term benefits of renting (spend money instead of saving for down payment) and undervalue the long term benefits of owning (lower housing cost when retired).

I'm sure many prefer it, but many also require it. Bundling the two groups is disingenuous.

Making ownership more accessible would attract a lot of prospective buyers, and getting rid of the landlord role and land investment would likely have that effect.

>Those will also get snapped up by investors.

Investors buy around 10-20% (depending on quarter) of all new properties (and likely because they paid to build most of that share).

That's a far cry from 100%.

If there's enough housing it doesn't matter who owns it. Unless units are being held vacant by landlords (they're not atm) housing prices will reach an equilibrium that represents the value they provide. Landlords can't just unilaterally raise prices without lowering supply levels.

Yes zero to low tax for primary residence. 10x tax for all secondary houses

Vacancy rates are low, investors don't just sit on the units.

They had to add a tax to empty homes in Vancouver to try and recover some of the units lost to investors just sitting on them.

[citation needed]

A tax was established, yes, but was it reasonable to do so (was it reasonable to expect that it will do much) and did it do anything? It seems the answers are no to both those questions.

I think it's a good signaling tax though. (I'm 50-50 on the extra tax for foreign buyers. Ethically there shouldn't be any difference based on where one's passport is from, but practically of course there is.)

Anyway, the real problem is constrained supply. Vancouver is still a fucking suburb compared to dense cities.

https://www.youtube.com/watch?v=evYOhpjMql0

https://www.statista.com/statistics/960174/vacancy-rates-res...

https://www.cbre.nl/-/media/cbre/countrycanada/images/insigh...

https://vancouversun.com/business/real-estate/three-years-in...

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