More than 60k rent-stabilized apartments are now vacant
thecity.nyc
thecity.nyc
Affordable housing is uninvestable housing. Until advocates admit this, the walking in circles will continue.
i) Price controls do not work at reducing prices, there are two millennia worth of proof for this.[1]
ii) Higher interest rates lower housing prices by lowering the availability of loans. This is a good thing unless you are already bought into the ponzi of ever declining rates.
iii) Affordable housing is uninvestable housing. A house is a deprecative asset, the same way cars are. A house does not produce anything. You live in it and it wears down.
Housing is not different. Except that there are some people who would prefer to limit the builds of new housing.
The market is just gambling at this point the company can hype their stock.
>Stonks go up, we just like the stonk
That is what that is. Establish ownership (of capital), exploit that ownership.
Capitalism in a nutshell.
Buying an apartment and renting it for long duration without any value added is a problem. If you buy something without expectations of its economical value increasing, only its price, that's a problem.
Buying an apartment and hosting it for short duration in Airbnb (or another way) to tourists, while providing real service, is a real investment. It created real economic value. I'm OK with these kind of investments.
The root of the problem comes from the central bank. There's asset inflation that is virtually ignored, created by low rates, QE, and regulation around mortgages. That asset inflation makes "investing" without creating value a good strategy.
There's no economic value in "providing long term housing to residents". You hodl the asset which someone else required and added no economic value. They could've bought the asset themselves because they wanted to be there for a long term. But they can't because everyone is hodling. When economic incentives are good, you should sell an asset or an investment when you do not expect to gain economic value from it anymore.
Why do people "provide long term housing" instead of just selling their assets ? I see houses as an asset similar to cars. They decay, they break, old houses are horse trade, they require high maintenance. Their economic value only goes down, and their prices would too if there wasn't a housing cartel opposing new construction and high population growth combined with bad government housing policy, but most importantly, if the regulation around mortgages was similar to any other asset.
The core problem is that land ownership is an entitlement (derived ultimately from the application of historical violence) and not a liability.
I expect these entitlements will be expunged from humanity one day but it'll be as arduous to eradicate as absolutist monarchy was. Land redistribution of any kind always invites a violent backlash from elites.
In many countries, the population has already began to stabilize or decrease. Look at Japan for an example of what is in store for many other countries. There is just not enough people being born to drive the sort of demand required to keep property prices increasing forever.
Maybe innovation in housing drives some type of infinite growth picture, where houses keep getting better so whoever is left on earth just keeps paying more for them, but I'm not sure if that's a reality.
There might be a large influx of immigrants to fill apartments thanks for climate refugees, but they're (very sadly) not going to be coming to NYC with a bunch of money?
Are property price slumps sad for people? Yes, are they the end of civilization? I don't think so.
In reality, these massive companies buying up apartments can hold apartments vacant for 20 years. If an investment company has $100 billion in funds, what does it matter to them if they have $100 million in apartments in Manhatten? It's only .001 of their funds. It's nothing to them. And as new properties become available to them, they can snap them up creating even more of a oligopoly and quasi-price-fixing - or at least contribute to it.
And the problem is that it is everywhere, not just New York. "Fundrise LLC, an online property-investing platform that purchased 124 houses in Conroe, Texas, for $32 million, paying building firm D.R. Horton Inc. "roughly twice what it typically makes selling houses to the middle class" — illustrating how home builders stand to make more money by selling houses to investment firms instead of middle-class Americans who want to own their first home." The report goes on to detail how "yield-chasing investors are snapping up single-family houses to rent out or flip," contributing to the scarcity of houses for sale and driving up prices for everyone. According to one estimate from John Burns Real Estate Consulting, as many as 1 in 5 houses sold in the nation's top housing markets is purchased by someone who will never move in. As a result, the consulting firm expects prices to continue to rise. "You now have permanent capital competing with a young couple trying to buy a house," said company CEO John Burns. "That's going to make U.S. housing permanently more expensive." Burns notes there are more than 200 big money companies and investment firms competing with families and first-time buyers for houses, including titans of finance J.P. Morgan Asset Management and BlackRock Inc.
These companies will buy up new neighborhoods or start buying piecemeal in desireable neighborhoods and due to the near monopoly will jack prices up double.
All this can lead to a housing bubble, to be sure, but then the capital companies snap up undervalued homes and hang on to them, just like they did in 2008.
Invitation Homes is owned by Blackstone Group, the world’s largest real-estate investor. Created after a company called Treehouse Group was folded into Blackstone, then renamed in 2012, Invitation Homes was on a $10 billion spree, purchasing $150 million worth of houses per week. “At an auction in Sacramento, a house flipper named Ryan Heck was bewildered by a bidder who bought every house that hit the block,” Dezember writes, noting that the bidder went one dollar over every other bid until the other bidders conceded. “He had a handful of cashier’s checks,” Dezember writes. “The new guys had duffle bags full.”
The bonanza really took off in 2011, when Morgan Stanley issued a report called “A Rentership Society.” With over 1.6 million foreclosed homes in the United States and more on the way, the report forecast “a surge in the number of renters and a potentially massive opportunity for investors to convert the glut of repossessed homes into rental properties.”
America’s investment managers were all in. By 2012, “more than $1 billion had been raised by investors for the purpose of doing just that. Some of the biggest names in finance were hoarding houses.”
Soon we will return to feudal times when there are a few vast landholders and everyone else is a serf.
There is even a lobbying organization, the National Rental Home Council, to look after large investment companys' interests in the government, such as defeating rent-control laws.
a three-bedroom, two-bath home in Spring Hill, Tennessee, that went on the market in April 2017. In the strong, fast-growing market, the seller had four bids on the house within hours.
“The high bid of $208,000 came from a couple with a child looking for their first house,” Dezember writes. “American Homes 4 Rent matched their offer, all cash.”
American Homes got the house, the seventh it had purchased on that street. since 2010, 700 houses in Spring Hill have been purchased by just four companies, including American Homes 4 Rent and Progress Residential, Dezember writes. As a result, rents skyrocketed. The town’s vice mayor, Bruce Hull, in April 2017, said, “It hasn’t been that long since you could get a three-bedroom, two-bath for $1,000 a month.” Those houses were now closer to $1,800 a month, and this was by design.
Personally, I think the government should put limits on how many units - houses, apartments, duplexes, etc - that a corporation or subsidiaries can purchase. I don't like this, but the larger societal implications must be taken into account.
Meanwhile, people need apartments right now. To live.
Even though the population has been steadily increasing?
https://www.macrotrends.net/cities/23083/new-york-city/popul...
Canada is a good example of that, we have a lollipop demographic, lots of old people, not enough young.
Housing is going to crash here over the next decade, I just don't see how it can't with the pop crash that is coming.
Immigration isn't making up for the loss either and doesn't appear to be able to as we have trouble retaining people.
I'm not sure where you got that idea. Population is increasing nearly everywhere, including the two most populous countries (China and India):
China has a median age of 67 I think now, they went from 1.8b to 1.4 or 1.2b, they are not growing in pop.
Japan was just leading the way, outside of Africa, the USA, France and Mexico to a degree it's all old people.
And for US and most european countries, they may have ageing populations with low fertility, but they still have massives immigration inflows.
Wtf does city population have to do when the entire country going from 1.8b to 1.2b in the last 10 years and how does that mean pop growth
China is hemorrhaging people at an alarming rate..one child policy is bitting them in the ass.
This has absolutely zero to do with the demographics crash, you are talking about migration patterns.
The total number is going down and fast.
1.5 kids per women is below replacement and 100 men per 1 women means you have a hard limit on the # of possible children.
China will drop down to less than 500m over the next 2 decades
The rate of increase is falling everywhere except sub-Saharan Africa, last time I checked a decade ago.
Many developed countries have falling populations.
It is still (as of a decade ago when I stopped actively studying this) a mystery as to why.
It used to be thought that it was because of life long secure prospects for the children you do have and for yourself in old age. What children you do have will live, and you do not expect to need a lot of children to support you in your old age.
But them some developed countries went into serious decline. The USSR, as was in particular. The population rate did not go up.
The latest theory (a decade old, "latest") is that it has to do with the education of women.
It has nothing to do with availability of contraception, surprisingly.
Amish are literally going to take over America in 30-50 years if it continues
You seem to have the vision that my property is not my property and somebody else should decide what I do with my property, not me. This kind of vision ended up in blood and death of some many millions of people all over the world.
you acquire it by fiat - and enforce that acquisition by force.
You're absolutely right and we need more of that.
I am sure you will find your answer if you read some history.
Property is Theft! [1]
The English have a rights of way so you can walk through some private land. [2]
and there's also the concept of common land [3]
[1]https://en.wikipedia.org/wiki/Property_is_theft!
Don’t believe me? Start building a gas station in your driveway and see how far you get.
I agree about making housing uninvestable, but the issue is supply, not demand.
The "investors" are profit maximisers. Housing suppliers do not have to be like that.
Housing prices are driven by comps. That is, what did similar-ish properties in the same area sell for. In other words, one sale today can drive the price of multiple other properties tomorrow.
If investors are more able and willing to bid up, those effects will be felt elsewhere in that area whether investors are involved in those other properties or not.
I do agree, the solution is to address supply. But I wanted to address your point about investors not impacting all sales. The fact is, they can and I presume do.
Again, I didn't say investors don't impact pricing...I said they are a symptom.
Investors have different motives, and those motives are often self-fulfilling.
Ok, an investor can be more willing to "go big"...whatever that means, but presuming it means to bid more aggressively, so what? Self-fulfilling motives? What does this even mean?
You've said a lot of hand-wavy things without actually arguing how any of this results in mispricing.
Self-fulfilling means that they have enough "positions" to raise prices and pull up the value of their portfolio value as they do so.
You know...the things everyday Joe & Jane can't do. Am I hand waving or are you too slow to figure out the nature of the game? It's not rocket science. To equate institutional investment outfits with solo families is naive. No one should have to explain that here.
You can move the prices of all houses in a market by moving the sale price of less than 0.25%-0.5% of the total supply. Some people will learn this fact the hard way when prices go the other direction.
I'm certain these properties were refinanced when ZIRP hit.
Now interest rates are so damn high, they can pay off their refinancing without doing anything.
The property is now essentially free even without a tenant.
Yay!
I did. This is a specific microcosm in one city. My comment was in reply to many other commenters here speaking more generally.
But see my other comment re: govt intervention. This dynamic exists because of price controls. Price controls do not work, and will never work...they always results in supply shortages which is what you're seeing here.
Then I encountered a senior lawyer. They earned in a month what a person on an average wage gets in a year. They were running out of places to put money and some of it went into property, as a "stash". They had not much thought of "return". The high pressure hose pipe of cash they were receiving swamped that.
Being a lawyer they would have no illusions about the morality and ethics of the "financial advisor" system, so would not use it. Hence leaving money lying around, in houses. Tenants were just another bother and the financial return of tenants when compared to the cash income....
It happens. Rich people by housing ad leave it empty.
Astonishingly high land taxes on empty houses in shortage areas is the only solution I can see
Unless you believe the legends of shady foreign investors who buy scores of homes, and then leave them empty
https://www.propublica.org/article/realpage-accused-of-collu...
This is 100% inaccurate.
Land, which is the real "value" in owning a home does not depreciate, nor can you make more of it. As more and more people mature and look to enter the real-estate market they can either:
- Pay more to live where they want and convince someone to move
- move further away, to a new subdivision.
Next, not all cars depreciate, nor do houses. If properly maintained they last a long time. Head over to your local car show and see what it costs to buy a car from the 1960's now vs what is cost back then.
I once owned a house built in 1915 and it was still in great shape.
> i) Price controls do not work at reducing prices, there are two millennia worth of proof for this.[1]
Strongly agree. it is insane when renters protest they want more and more rent control. It simply doesn't work and demanding more of something that has failed to do anything is odd.
And even for a condo in a desirable neighbourhood in Manhattan, >50% the value of the property is likely in the value of the structure. i.e. the land value portion would be <50%
So the parent is accurate.
Yep, some of these homes from 1700's are just so worn out.. They must be worth absolutely nothing.
Suggest you head over and offer $1 for them?
These houses are very old, and must be worn out. Therefor they would have depreciated to zero...
It's very likely the land is worth more than the structure, but that doesn't mean the value of said structure is literally nothing.
"noun a reduction in the value of an asset with the passage of time, due in particular to wear and tear."
Given enough time, depreciation leads to zero, or some "scrap value".. this is literally part of its definition.
https://en.wikipedia.org/wiki/Depreciation
When house values "fall" this is NOT depreciation, but market forces (supply/demand, interest rates, mortgage rates, government policy...).
The point of "depreciation" is normally to allow things to be written off at a reduced value over the assets lifetime.
Cars do "depreciate" because over time, they face wear and tear and at the end of their lifespan they are traded in for "scrap value".
Homes do not depreciate because there is no logical reason why this asset's value would reduce over time/wear/tear when it can be properly maintained, as is the case of the houses from the 1700's i sent you.
Given enough, time, such as millions of years, yes any human made structure will likely depreciate to zero value. Because even solid granite can be eroded down into dust from simple weathering, let alone normal building materials.
That doesn't guarantee any specific structure, such as the one you linked, will depreciate to zero within human timescales.
And obviously if structures are maintained they will probably not.
That doesn't invalidate the concept of wear and tear or depreciation.
If you maintain a structure you are by definition putting resources such as energy, materials, labor, etc., into it, so maintenance isn't free.
Those resources represent a real cost that someone has to pay for.
Got it.
Instead of posting here, why not take your fantastic housing model (they depereciate) and go buy homes.
you can show up at their house with your spreadsheeet and show them how you applied an appropriate depreciation factor and now they should sell the house because this is the fair market value.
You can also explain to everyone how over longer times scales houses almost always appreciate. If you look at the SP500 for a week it may go down, but over a decade it is almost always positive.
Houses are the same, so where exactly is the depreciation you speak of?
Again, using your theory of depreciation and long time scales.
From the linnk i sent you: "W. B. Yeats so much that he purchased it for £35 around 1917. From then on it became known as the Yeats’ Tower."
What is the current value of this house, after factoring in your depreciation factors?
It is often true that the old house on a piece of valuable land would cost more to repair than it would cost to build a new house on that land.
Often enough the added cost of removing the old house (the use of asbestos in the past often vastly increases that cost) added on top of everything means that the land itself can loose its value.
We see this a lot with old industrial sites, but it happens to residential buildings too.
As for "timescales", do not be mean. The time-scale for depreciation of a car that is in use is measured in seconds New cars loose a third (? I know more about property than cars?) of their value when driven off the lot. Houses take a bit longer, but not "geological time-scales"
If you genuinely cannot understand that the concepts of depreciation, wear and tear, etc., can exist side by side with the concept of appreciation of the underlying land value, then I recommend you do some reading before engaging in conversations on HN that simply discredit yourself.
In any case, since the last reply seems to not make any coherent points at all, I won't try to deduce if there's any further meaning.
That is quite obtuse.
Depreciation can be countered with maintenance. It is literally a physics concept: Entropy. It is a natural process but not unavoidable.
A house that is thirty years old that has not been maintained can be a complete wreck. The roof has leaked all over the interior finish, the windows have broken and let in local animals to make their nests. Etcetera.
The house next door that is thirty years old and had the roof maintained and windows fixed etcetera might be pristine.
I think it is fun to see people on Hacker News forgetting about, even denying, entropy!
Even in not-so-fancy neighborhoods, you're paying a lot for the land itself these days. I live in a <1M provincial city in Belgium in a semi-detached house, and a property assessor calculated that our house represents 30-35% of the total value of our property.
THIS!
I live in Ontario (Canada) and my property assessment shows something similar, the value of the home is ~40% of the assessed value.
There are plots of land in Toronto where the house is not livable selling for north of a million dollars. Given they have no house, it is purely land value.
Given your choice of spelling, it would appear Manhattan is not your core knowledge as well?
https://www.blogto.com/real-estate-toronto/2022/10/toronto-c....
"As land values increase, we see more units on a single property, which means many of those individual units are smaller," said Greg Martino, MPAC Vice President and Chief Valuation and Standards Officer.
MPAC is responsible for determining property values in Ontario, so do they know a thing or two about this topic. (https://www.mpac.ca/en)
If structures wear down, how long until they reach zero value? Have you seen many houses for sale in the zero dollar range because of depreciation?
it is not obvious that structures wear down. As i posted below, many of these houses are from the 1700's
https://spearswms.com/10-oldest-houses-in-the-world/
Which one do you feel has depreciated to zero?
Yes. Plenty. It is not unknown. Not common but it definitely happens
I really think the era of "depreciation" on cars is coming to an end.
If a new law allowed an old 289 design to be installed in a new mustang with no modern emission requirements, the new car would not suddenly skyrocket in value.
If you want to properly make land uninvestable, you have to put property taxes at the rental rate.
Saying investing will kill something is easy. The alternative is much, MUCH harder. It is easier to run a mail service like usps than create more housing and maintain it using govt money. People have like zero clue about finance smh
They have worked in some cities in Europe.
It has to more than just a cap on price. Demand is managed too with systems of entitlement.
I am unsure of the details but I know my children tangled with the system whilst on OE in Amsterdam. It was well established and functioning.
Basically, you cannot raise rents aside from annual increases that are below inflation, and you are limited to a relatively small amount of renovations, and cannot increase the rents much if you do.
So you either commit to a potentially multi lifetime below market tenancy that will bankrupt you eventually, or you keep it vacant and hope to demolish it or combine units or pray that the law will change.
Or sell it to a guy who will run air bnbs until the city puts him out of business at which point it will go in the tax lien sale. In any event, nobody is investing in bringing these units back online in this legislative environment.
That doesn't mean we shouldn't try, or that we need to stick to a counterproductive plan because some people think arguing about regulations on free markets is more important than fixing a pressing problem.
Similar laws exists in Tokyo and it seems like a non-issue. Find me an empty apartment in Tokyo and I’ll be surprised. Maybe the problem exists elsewhere in society, for example: maybe the cost of living and property in NYC is just too expensive no matter what regulations exist?
I’m saying this because I’d imagine if people don’t think it’s worth renting the apartments, why not sell to citizens so they can buy in them and live there?
I feel like the world is starting to wake up to the fact that while it’s not easy to outlaw properly speculation, it’s going to be one if the major problems that define our time.
I’m not sure why the response took an emotional turn, but it wasn’t warranted.
I wish there were sites where more people people could wage discussions in your manner.
I’m sorry you live with such a negative view of others.
If so, I'm sorry you live with such a negative view of education.
Also, these kind of things get priced in, leading to lower property values. There will always be a willing buyer as long as the market price is above $0, implying that the benefits exceed the costs of ownership.
Rents are a product of market conditions. You have to solve those conditions rather than try to stop the output from changing. Fixing the rent results in supply dropping off so the supply/demand equation is still met.
Ebbing and flowing is a typical effect of inelastic markets.
This is not the case with housing, at least in a local area. Prices go up, people move away and demand goes down. That's elastic.
If housing suddenly cost 10 billion dollars a day in Manhattan, the city would be a ghost town tomorrow. Elastic.
Housing on the supply side is relatively inelastic when compared to other markets. Even if demand is high it might not quickly lead to new construction.
On the demand side the market is also relatively inelastic as moving has a lot of friction compared for instance with not making a luxury good purchase or postponing a holiday.
When I think of private property I not only think of the object itself but also a stream of public services for which you barely even have to pay something. If you are a landowner you could now come up with the idea of selling the public services. The revenue that this process produces is called ground rent.
Is the market distorted by the landowner who is basically just selling free services from the government or is it the government that makes these blatant gifts paid for with taxes unrelated to land ownership?
Manipulation of rents will not reduce those public services, the value of the land remains.
The problem is a lack of housing. You either live with higher prices (reduced demand) or increase supply.
Everything else is just a shell game.
I mean if you own a parcel of undeveloped land are you going to build a small mobile-home park or expensive condos? One of those two is going to make you a fantastic profit.
“The beauty of YieldStar is that it pushes you to go places that you wouldn’t have gone if you weren’t using it,” said Kortney Balas, director of revenue management at JVM Realty, referring to RealPage’s software in a testimonial video on the company’s website.
The nation’s largest property management firm, Greystar, found that even in one downturn, its buildings using YieldStar “outperformed their markets by 4.8%,” a significant premium above competitors, RealPage said in materials on its website.
Allowing landlords to actually build would drive prices down but overregulation and zoning laws have broken the supply end of the market.
Do they break the kneecaps of their potential new landlord rivals so they don't build new apartments and provide competition?
Except that investing in new property might bring the revenues and profits of their current properties down, so there's a direct disincentive not to build more.
Why would pricing the rent lower than the insane market prices cause bankruptcy for the owner?
A landlord owns a house like a hedge-fund owns stocks: its not about the houses or the stocks themselves. Obvious problems arise since houses are actually rare things people want for their own sake, and stocks are not.
I feel like the discussion often trends towards criticizing legislature, but we should not forget that choosing the darwinist approach is still very much a choice made by the individual in their own favor.
Why is lowering risk/maximizing gain at the expense of others a defendable choice because it produces/saves money for an already wealthy individual. Why is this not viewed similarly to other things which are legal but unethical, say cheating on a spouse?
Why is it that the government needs to produce ever smarter and more complicated legislature to prevent people from exploiting others for wealth?
Is government really to blame for this rat race? I don't think so.
Most people I know absolutely hate landlords. I've hated 3/4 of mine. But what are you going to do? I can sneer at my landlord all I want but I still have to pay him my rent. I don't want to move out of New York (not yet at least) and buying seems nonsensical.
I don't think anyone is defending them, but do you expect the investor who owns 100 units to not attempt to maximize profit? Most people who get into that business can be assumed to prioritize money over community. The only realistic way to change things is to make it not profitable to sit on these.
> Why is it that the government needs to produce ever smarter and more complicated legislature to prevent people from exploiting others for wealth?
Humanity has kind of always been that way. And even if most people aren't, a small number can disproportionately affect many.
When you need to buy an apartment and have a job you go to the bank and the bank assesses if you earn enough to pay back the mortgage and if you do they pay for your new apartment which might be just being built.
The reason scalping is possible is that the official prices are below market prices. In this case, is the inference is that scalping is made possible by rent control? That's what I'm getting out of the parent's comment.
What about you buy the property for you and your family to live in rather than as an investment that needs high return?
The property value will still increase with time. That should offer some form of protection for the initial capital investment if you need to sell later in life.
A much more logical system would be for the government to raise minimum wage and welfare to the point that people can afford rentals at the market rate rather than rent control which is a head in sand solution.
As long as a good is scarce and controlled by the market there is no reason for the situation to improve for people who want that good.
Thats why housing should never be part of a market, because people don't want houses, people need houses.
I am taking the OPs use of "house" as "place to live" not "detached residential building with single family occupancy"? Are you ?
Furthermore, in context of the topic at hand, we're talking about housing _in NYC_, which people certainly don't need. I certainly don't. I don't even want it.
A van does not solve the problem. A van is a shitty place to raise a family. And remote working is not going to cut it - if your job does not pay you enough to afford a house, it's unlikely to be a nice middle class job where you can sit at a laptop.
Did we just add "being able to raise a family" to the "need" column too?
Kids are more expensive than housing.
"People don't need nutritious food, you can survive just fine on bread and water for many decades. Do people suddenly "need" to live long healthy lives."
The point is that society should agree on some level of basic needs, if you think a van fulfills the requirements for a residence for the majority of people this discussion needs to be held on a much more fundamental level of how you view other people and their requirements for life.
And yes, if you want the future to be in any way a human future, "being able to raise a family" is absolutely in the "need" column.
Finally, to give you some perspective of problems a real society would actually face if this ridiculous scenario were true: what do you think would happen to the price of Walmart parking spots if "van-life" was a common choice.
That's because it's a good argument. And no, people don't need nutritious food either. Unless you _want_ them to live healthy lives. To satisfy your "want", there is a list of "needs". If you really want to, you can turn any want into a need by applying it to a higher level want. I happen to want people to live long healthy lives but I'm not going to frame that as a "need" because it simply isn't.
> The point is that society should agree on some level of basic needs
Ok, let's start there.
> how you view other people and their requirements for life.
I would _like_ everyone to live a happy and fulfilled life free of suffering. I pay taxes and donate to charity to help provide that for people. It is, however, not a requirement for life or a "need" in any way.
> And yes, if you want the future to be in any way a human future, "being able to raise a family" is absolutely in the "need" column.
Ok. If that's the goal, yes. Is that the goal? People are having children at a sub-replacement level. It doesn't seem like that's really a goal for those people.
I _want_ to live in a free society. I _want_ there to be no or minimal human suffering. If humanity goes extinct through a process of dwindling birthrates because people choose not to have children, I really could not care less.
Every "need" has an implicit "in order to accomplish [goal]" on the end of it. Framing something as a "need" assumes a common goal which is often abused people to put more and more things into the "need" column when there is no consensus goal.
So what do people "need" housing for? The availability of affordable housing is already an accomplished goal. The availability of affordable housing in NYC is not an accomplished goal.
The availability of affordable housing in NYC is only a need for the survival of NYC itself which I, again, could not care less about (provided humans don't suffer in the collapse).
People talk past each other constantly by omitting their priors discussing these things. When you say "housing is a need", for what? And in the context of this article, I'd interpret your statement of "need" to be NYC specific so, "housing in NYC is a need", for what?
If you don't consider happiness and lack of suffering a goal that is worthy of using the word "need" you are just doing some Jordan Peterson-esque word salad defense of something that cannot be coherently understood outside your in-group, even if you wrote a book on it.
For a claim like this you’re going to need to do better than “lots”.
I don't understand this at all.
A market is designed to solve the problem of allocation of resources (think: scarce).
Can you state your non-market proposal to provide housing (in economic terms)? Sorry, but the idea of managing allocation of resources without a market is very foreign to me. I just don't know what you're proposing, and I can't imagine how it would work.
Separately - not much talk about the importance of location. NYC housing is expensive... why live in NYC?
Easy. There are so many options. Here is one:
Establish housing trusts, whose purpose of existence is to house people. Non profit (that is not their purpose) . No debt, start them off with a huge wad of cash. Allow them to build, convert, do what ever.
Such a trust can set up its own systems for allocation, but not entirely at whim. There can be political control too.
Allow an occupation right where tenants cannot be evicted for no reason (that can be applied to all housing, and in civilised places it is - not where I live amongst barbarians)
Not perfect, nothing is.
There is no need to outlaw private property or private land lords, there will still be niches for them. But the great mass of rental housing could be supplied by such trusts.
> but the idea of managing allocation of resources without a market is very foreign to me
Please open yur mind, look into some economic history, look around the world. Markets are not the only solution to allocation and markets can reach terrible equilibriums.
The Irish Potato Famine happened in a free market. Markets can even be genocidal.
Managing resources without a market is actually quite simple: you work out what people actually need, and what you have, and you divide what you have over the people that need it.
This might sound weird because we're bringing it up in the context of housing, but it's something we do all the time everywhere. Some good examples here are: healthcare, insurance, infrastructure, military, utilities, public transport, science, education, etc. Basically anything your taxes go to is managed this way, its pretty boring stuff.
Most of these things have long histories of socialist community-thinking that make them very obvious shared resources that are placed outside markets, but somehow housing missed the boat. This does not make housing significantly different in any way though: one can own a mansion just like one can own a Tesla, it does not prevent public housing or public transport from existing, nor does it adversely affect the market from profiting off luxury goods where common goods are freely available. The trouble is, a house is now a luxury, even though you can feel in your guts that this is just not true.
The market effect on housing should decide the quality of house that you have, not whether you have a house at all.
They aren’t individually purchasable units.
The only thing you're doing when prioritizing that type of investment over others is you're picking winners and losers for political reasons... at great cost to everyone else.
It's extremely different from an investment in many ways. If the value of a house goes up spending a day in it does not feel any different.
If someone offers you a lot of money for it you can sell it but you still have to buy or rent another one. Very very few people want to have a lot of cash but live under a bridge.
Absolutely.
> It's extremely different from an investment in many ways
That is not so true, and is part of the problem, in two ways.
(1) People are buying properties to live in at one stage in their lives, when they have high incomes, or prospect of high incomes, thinking they will sell when they are older and make a large profit they will use to fund their retirement. This drives up prices and drives out people with lower incomes.
(2) The above is part of the cause of the housing bubble. Also driven by increasing populations. As that bubble goes the way of all bubbles, especially as population decline sets in, those people get to retirement with an asset that is not worth anything like what they expected. This will cause a lot of impoverishment (some actual poverty too) amongst a lot of those older people
Yes. We all need somewhere to live. Also most of us (those who have incomes) need a place to save.
It is a problem that the two things are confused now.
The first is a crucial need, the second is a want.
> It is a problem that the two things are confused now.
Yes, that's what I meant. And when they mix together the investment market takes over because it drive prices above the house-as-necessity market. Which translates into: houses are taken away from people who need shelter and give to people with money to invest.
You have implicit profit living in your property through imputed rent.
People keep talking about evil investors and taxing secondary and investment properties. But the biggest group of housing investors are primary residence owners: we turned housing into a nest egg retirement plan, and now we can’t undo that.
Housing cannot be both affordable and a good investment. Housing should not be any different from any other good or service. This all stems from massive government intervention in housing markets decades ago on the basis of horrible conclusions of family wealth, and further intervention isn’t going to fix things.
You want cheaper housing? Slash regulations and NIMBYism, and get government out of the equation.
Sadly, NIBMYism was created to give more voice and democracy to everyone. Giving local community groups veto power and other rights empowered some of the worst of us into using it to block all types of housing (especially affordable housing). A perfect example of how a republic is sometimes better than a democracy.
NIMBYism wasn't created, it's a naturally emergent property of a rational actor. Then the government poured fuel on the fire with subsidized housing loans, and quantitative easing more generally.
But NIMBYism exists because most people have been conditioned over the past decades that they will make a lot of money from their primary residence. And this is what needs to die.
I talked to him about it a bit and mentioned that it was almost textbook NIMBYism and he agreed. The thing is that at no point was home value ever part of his thinking - he bought this house at a bit of a premium to live in the neighborhood that had larger lots, relatively older, professional families, and quiet nights (his old house was near a college campus and had lots of renters who liked to party it up on all nights of the week).
He just wanted to keep his quiet, low-traffic neighborhood. He'd be happy if his house never increased in value since he plans on living there indefinitely and all an increase in price means to him is more in wealth/property taxes.
He is not the only one I've talked to who thinks this way.
I don't think NIMBYism is inherently undemocratic: in most cases, it has to work through (semi) democratic means, like elected officials.
NIMBYism has an impact on democratic representation sometimes through gerrymandering, though. Maybe that's the connection you're talking about?
https://news.berkeley.edu/2021/06/21/how-american-racism-is-...
My wife is actively involved in redistricting litigation, in Texas, and core root of it is from pro-segregation redlining in the early-to-mid 20th century; the intent is disenfranchisement. The set of laws, covenants, HOAs, and attitudes (NIMBY) towards the construction of suburbs is entirely rooted in segregation. That was one of their literal selling points. To this day, there are home purchase covenants restricting Jews and Colored Persons — it's super unfunny when the real estate agent laughs and asks "you're not Jewish, are you? There's this weird, unenforceable provision..."; and, then, you still have to get a Judge to strike the restriction.
But other communities, a long way physically and culturally from Berkley have the same problem.
Here in Aotearoa we have just bought in a law that allows housing intensification, as a right, in three of our largest cities. (The local councils are screaming blue murder in at least one of those). This is because of nimbyism and a chronic housing shortage.
Watch this space. See how it goes.
Redlining is literally a form of zoning where the explicit law is “I don’t want that person in this neighborhood”
When that became illegal it turned into you can’t build a certain type of housing in this neighborhood. It’s not coincidence that the type of housing that was banned was the type that certain people could afford.
I've mentioned this to a number of people, one thing I've noticed - most people really don't understand compound interest and exponentials well.
> compound interest and exponentials well.
They are not magic. Wealth cannot increase exponentially unless it increases exponentially.
Exponential growth never continues.
People draw lines on graphs and say: "compound interest and exponential growth" without making the connection to reality.
You cannot eat interest payments nor lines on graphs.
That said, there seem to be multiple factors going on, all combined resulting in the prices we're seeing today: housing as retirement plan, investment companies, population growth, increased urbanisation, AirBnB and short-term rentals, increase of expats, dysfunctional government. It's very hard for me to tell which factor is responsible for how much, which will probably differ per locality, but I don't think there a single factor that explains it all.
Because it's the same system proposing and implementing them. A broken system is very unlikely to ever produce correct results.
I’m from New Zealand.
We live in a world of abundance where kids in developed countries (UK, US) still go hungry, and it got worse in the past 10 years.
I don't think most left-ish people like me are asking to a return of 19th/early-20th century economic models, we are asking for a return of social democratic values over the hegemony of markets and finance. It's not that hard to imbue some humanity back unto an amoral system, we know now through empiric experience that pricing simply has not taken into account human suffering and externalities wreaking havoc into our environments, we just look for more humane ways for markets to function. Left to their own devices markets will only seek profits, at all costs, we, the people and workers, are the ones who can steer it into boundaries where profit-seeking isn't, ultimately, life-destroying.
> A broken system is very unlikely to ever produce correct results.
I agree there are plenty of net positive regulations made by good systems _at the time_. But it’s not producing good regulations _now_ and is very resistant to change.
I suspect it inhibits NIMBYism by keeping asset values down. Land is more scarce than construction materials and labor.
High rents->high asset values->freaking out about your riculous mortgage->freakimg about additional supply driving down your property price->turning up to town planning meeting to declare a laundrette "historic".
Incentivize construction and cutting red tape to mass produce housing of a few million houses a year. This will hurt property owners but will open up affordability.
How it will work you all can argue
E: over comment limit
@Eisenstein They're not. I'm a fan of them. Like JP mega cities are relatively affordable with greater Tokyo having "reasonably" 22M people. But for US/west, highly desirable cities + high immigration, cities like NYC, I think has capacity draw/support people that push past what's stustainable based on regional geographic ceiling. NYC's already depend on stupidenous water transport infra. I feel (based on no evidence in particular) that NYC would grow to 40M people and run out of water, but rent stays the same/if not higher because there's even more opportunties and 80M people wants to move there.
Interventions might fail, just like leaving this to the market might fail. It's all a constant juggling of incentives, unforeseen consequences and catching up. UBIs and minimum wage are not designed to solve house affordability, so I'm not even sure why you'd lump it into capping rents, etc.
Without interventions you leave all the power to the profiteers, to the ones seeking to rent-seek as most as possible, so I'm very sure your approach of "less intervention" would just bring another set of unforeseen consequences with a worse side: complete lack of accountability. At least a failed governmental intervention has someone accountable for it, leaving the system to regulate itself (free market™) leaves no one accountable for the suffering it causes. Or even worse, it becomes a personal responsibility™ issue and the victims will be blamed for not trying hard enough.
Enough is fucking enough of this...
We became richer, thanks to the industrial revolution, not government coordination, and could afford to abolish slavery and work less. Same way we stopped wars of conquest conveniently when they stopped being profitable compared to large scale manufacturing and trade.
Government is at the mercy of these large trends just like the people.
That's not my narrative. The government was forced to give more rights after a lot of bloodshed in multiple countries, it was ultimately a governmental intervention in the labour market which turned those protections into law.
The industrial revolution made societies richer, the workers through social movements and the power of government made the industrial revolution livable. If left by its own devices the industrial revolution barons would still be requiring people to work 12-14h days, including children over 12 years old.
Government is the collective voice of the people, we should let a decently democratic government have power over the markets, that's my narrative.
Those laws should be abolished.
I don't think you completely understand what a regression to a world with no labour protections would mean. Either that or you'd be the one exploiting such lack of protections.
What's your proposal for the abolishment of labour protections, exactly?
There is no trick to make a free market work, for certain things we are in this together and should funnel a lot of money to lift up the poor.
The essence of civilization is helping out each other, that's why the first civilizations are defined as the ones where archeologists could find signs of medical procedures.
Second, there are some functions of society that may operate better outside a capitalistic system.
One could make the argument that the police are a necessary function of society that should not be governed by market forces.
I wonder if basic housing is a similar necessity?
I'm of the mindset where if you need housing, the community or government should provide housing. American is wealthy enough to do this and it's just the ethical thing to do. I also feel that if you are given housing, it should be local, but not always your desired location. For example, if you grew up in the East Village and you now need public housing, be prepared to move to Inwood. You're still in Manhattan, but its a 30 minute express train to your old neighborhood.
> Any time a tenant vacated, landlords received a “vacancy bonus” that let them increase the rent of the unit by up to 20%, and once an apartment’s rent reached a certain dollar amount — most recently, $2,774 a month — the unit left the rent-regulation system entirely, allowing the landlord to rent it at any price.
$2774 / month is definitely less than I'd want to charge to deal with a tenant that cannot be evicted, but whose apartment must be maintained using labor priced for NYC. I'd guess most of the apartments that are being held off-market are way below that threshold, and also need substantial repairs.
Being a landlord isn’t really a full time job unless you have a lot of units. I think my landlord puts in <1hr a month of work so anything I pay over his mortgage seems like “free money”.
Most people are normal innocent people who won’t cause trouble even if they can’t be evicted.
Most apartments in SF are rent controlled and you can’t be evicted (everything in SF is rent controlled unless the city exempts it from being too new). It seems like that’s the least of the cities problems. If anything, the city needs more rent controlled units to encourage land development.
Or you leave it vacant and still lose money, but you don't have to work as hard doing it
It seems that with rent control, you’d have higher demand and lower supply resulting in excess demand (both theoretically and it seems in practice). Does anyone know of any studies that:
- Analyse the effects of rent control in the presence of “vacancy-busting” measures like heavy vacancy tax/fines? (i.e forcing supply to stay high?)
- Analyse the price elasticity of the demand and supply respectively? (i.e is the excess demand mostly demand driven or supply driven?)
- western house prices are driven (up) mostly by available mortgages and a vaguely poor future discounting ability by most people. In other words adding 10k to the offer just to get the win does not add much to your mortgage but gets you a house.
- increases in rates badly hurts people
- a free market in real estate is never really going to happen (because politics) but if it existed it would move the politics over to other parts of the economy- if people could not afford to live in the city, wages would need to be adjusted.
In short there is no place for a "free" market because the point of human civilisation is to protect (ourselves / our tribe / those we sympathise with) people from the cold winds of unfettered nature. Whatever part of the whack-a-mole politics is being focused on, the end goal is "decent lifestyle with minimised suffering / extremes".
Ie - insurance against the worst.
providing insurance against the worst for all society is either a question of paying the huge cost of tragedy for everyone as their tragedy hits, or it is a question of government laying their hands across all ye whack-a-moles and trying to prevent anyone from having the worst outcomes.
I think I am arriving at a theory of government that has the goals of totalitarianism but different methods - probably Thaler's Liberterian Paternalism.
Anyway - understanding the mechanisms of the housing market is important from mortgage availability, land availablity, road and infrastructure building and workers available all seem the big parts.
The problem is once you're deep in the problem, how do you get out? If you let prices collapse then a lot of homeowners will face negative equity.
It's scary in Europe where we are facing rising interest rates coupled with the energy crisis and cost-push inflation from that and supply chain issues. It's like the governments have just accepted that hundreds of thousands of people will face redundancy and homelessness next year, with no plan whatsoever.
Curious to know what you suggest.
In Europe (or at least Sweden) you don’t make money by working; you make it on your home appreciation. People even talk openly about their “housing careers”. I’m not kidding, that’s the exact wording they use and it’s a mainstream term, e.g. used regularly on Swedish television. You can regularly hear indoctrinated youth say things like “when you own a home you pay (interest) to yourself” and other such nonsense.
Now all those that bought into this giant Ponzi scheme of course want to be made whole, with tax money. It will get ugly for sure, and I’m not at all certain that they won’t succeed (to the unspeakable detriment of the country/continent).
Easy. You tax the shit out of non-primary and empty residences. This puts negative pressure on 'investing' into a house/apartment and waiting for it to appreciate, then selling it, without ever living in it or renting it. This also doesn't disadvantage people who bought to live.
Many locations already do this, though I guess it could be increased. Where I live now, non-owner occupied housing pays 4-5x more in property taxes. It most likely get passed on to renters.
It also has a weird effect in a nearby, very expensive neighborhood where most of the houses are vacation homes. Since locally, a total property tax number is decided and then split among houses, anyone actually living in the very expensive neighborhood is subsidized by second homes and pays some of the lowest property taxes around.
Aside from those issues, recently Evergrande (one of China's biggest real estate developers) failed to service it's debt, and is considered by many to be extremely over leveraged. China recently updated regulation to place stricter limits on real estate developers debt.
If that were even a tiny, tiny bit true, corporations would have been banned from SFH long ago. As would 'investors' and AirBNB...
But it's kind of ironic to me that one of the known negative externalities of rent-stabilization is a loss of inventory. I'm not so sure how shocked I should be to see ... a loss of inventory.
https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy...
We’ve come full circle.
Few things have been proven as resoundingly as "price controls don't work", or more accurately "are very net negative".
This gets forgotten every time someone really wants them to work.
This applies to rent control as much as any other price.
When you want the price of something to be lower, subsidising demand increases prices rather than lowering them.
Suppliers and owners will not simply accept lower prices, even if you really wish they did.
The Great Forgetting - price controls don't work.
If the government is forcing rents to remain under inflation, eventually something will break.
I have just given up trying to be nice about this, despite HN's capitalist slant
Markets for food work pretty well. And for loans.
Markets are pretty efficient. That doesn’t mean you don’t regulate them.
Please look up how much subsidy is given to the American farmers. It's probably more than you think it is.
> And for loans.
Might have agreed more with you, but then 2008 happened.
That argument can literally be applied to any product or service, yet here we are.
There is a peculiar correlation I have noticed with these views - it tends to be (white) upper middle class suburban upbringing Americans that profess them. Principal agent problem of sorts, I guess.
It kind of reminds me of the argument that philanthropy is bad because individual rich people shouldn't get to choose who is helped; governments should tax the rich more and use it to help people. Well yeah, I agree, they should. But if they don't, it certainly doesn't make someone a bad person for choosing to voluntarily donate to charity.
Developer buys land. Spends all their money on land and building a house.
Investor comes along and buys the house to rent it out.
Developer now has money to buy another lot and build another house (and other developers notice that they can build houses and get paid to do so).
Like, literally, if there were no landlords, by definition there would be no rental properties. So people who couldn't afford to buy a house outright would have nowhere to live. That can't be what you're advocating?
Are you really so ideologically brainwashed that you're incapable of imagining any other system that doesn't inherently exploit poor people and concentrates cash at the top???
Secondarily, since tradespeople tend to like food with their meals, landlords paying tradespeople is an important motivation for them to do that work.
I regularly see these takes hn and I don't get what's so assholeish about my situation. I know that my tenant is on a temporary visa. Are we arguing that ethically he should have bought my property?
The sad thing is that people don’t bother digging much into it and take simple answers like “greed” instead of figuring out exactly where the monies are going.
The colonists certainly didn't pay the natives for their land, and the revolutionaries sure didn't pay Britain to take ownership
When land isn't being used effectively, it's moved to another owner with limited to no compensation
It is a solution - "Those who make peaceful revolution impossible will make violent revolution inevitable."
Own 10 houses, all vacant, then you can either sell or rent out. Having people hoard these properties does no good for society.
It's perfectly fine to complain about a system, without being a perfect citizen yourself. I can complain about oil companies, and still be dependent on a car.
That’s not a complaint. It is a naked authoritarian call to steal from people who legally do things you disapprove of.
Do you give permission to people who dislike your policy positions to take away your livelihood?
A. Evil landlords meet at their secret underground fortress and collectively agree to charge too much for rent
B. Evil rich people / foreigners (pick whichever you find more objectionable) have bought up all the housing and are keeping the units vacant to spite everyone
Supply and demand doesn't apply to housing, of course. If we build more housing that will just drive prices up! Somehow!
Well, induced demand is a popular theory in other areas, so... maybe?
Building lots and lots of housing will never induce more per capita housing use in the same way that better roads induce longer per capital commutes.
Because the fundamental concept of induced demand doesn’t really track with the concept of having a place to live. You need a place to live, you don’t start using more “place to live” because there are more of them.
It can only happen at the fringes — fewer shared leases, more people with 2nd homes. The vast majority will still have one place to live for their family.
Population mobility to desirable neighborhoods is also not “induced demand”.
Likewise, when we (Americans at least) talk about housing shortages, we don’t mean the USA as a whole, it’s just a few cities that everyone wants to live in, not say small towns in the Midwest or Deep South. So a lot of demand and is already suppressed because not everyone can live in those few hot places.
There's your "somehow". Being intentionally obtuse just makes you look stupid at best.
There's no more choice in using roads than there is to live somewhere.
I've certainly been told by a corporate landlord "we checked nearby rentals, and decided that we should match their rent increases" so I guess A is the proper option?
The article says B is also true, and the evil landlords are aiming to coerce policy change by making people homeless
It takes quite distorted incentives for the obvious course of action to be (1) build a house => (2) leave it empty. For that to make economic sense for more than maybe 12 months, the government has to have really come in swinging with crazy policies.
Whether these actions work or not, it is not immoral to attempt them.
There is no 'human right to profit at the expense of others'.
The discomfort you experience of having to let out your bought-for-the-purposes-of-renting properties, instead of letting them sit fallow is less important to me than the discomfort of the person you're evicting. Fortunately, vacancy taxes can solve this problem very easily.
You want to be a landlord? Comply with tenant laws. If you don't like it, you won't be missed, it's not like you can leave and take that apartment with you.
In China, rental returns are so paltry compared to purchase prices that many property speculators simply don’t rent out their properties (renovating a property reduces its value in that market, so leaving it unfinished is a winning strategy). That has nothing to do with regulation and everything to do with an out of control property bubble, but the same principle applies. Here in Seattle, being a landlord is an increasingly untenable position, especially for private individuals. They are instead in it just for the appreciation (property bubble again) and so it makes sense for them to just leave the house vacant and keep squatters away.
https://www.amazon.com/Forty-Centuries-Wage-Price-Controls/d...
Applying this to healthcare, does it hold? Socialised healthcare appears to be less expensive.
I might be missing your point though…
> Suppliers and owners will not simply accept lower prices, even if you really wish they did.
This isn’t always true. It probably devolves into a discussion on monopsony behaviour which become relevant at a certain point.
And to a lesser extent, I bet it can be marginally cheaper because of a reduction in redundant administration costs across multiple providers. But that, and all other of those facets are dwarfed by the single payer negotiating.
A surgery enthusiast startup for cardiac surgery or a garage side hustle pharmaceutical dispensary do not sound like a good idea.
Yes, regulation costs, and a lot of that is reasonable.
I want trained staff, calibrated machinery, audited processes and tested drugs.
If landlords are being abusive, we should update regulations to suitably punish them for that abuse.
If landlords are keeping rentals empty, we should add an onerous tax on empty housing
When that happens, you don't give up trying to regulate - you regulate them further.
Clearly they need a LVT or tax on empty living space to make them play ball.
Rent controls are essentially the only thing that has ever worked for cheaper rent.
Yeah we need to send Vinny and Sal over there to get those assholes to play ball. Whose city do they think this is! /s
The mafia and the government operate on the same concepts. Coercion and violence to take your property.
> Consider the following hypothetical example:
>> Trespass: George is walking across a field when David jumps out from behind a bush, grabs him, and gently but forcefully removes him from the area.
> In this example, it certainly looks as though David is the one committing an act of aggression against George. After all, George is simply walking along, minding his own business, when David comes from out of nowhere, physically lays hands on him, and drags him off the field.
> But suppose that the field in this example is David’s property, and that George is knowingly trespassing across it. In that case it is clear that most libertarians would say that it is actually George who has committed aggression. David’s violence, they would say, is simply an appropriate response to George’s impermissible intrusion upon his land.
https://www.cambridge.org/core/journals/social-philosophy-an...
Libertarians oppose expropriation and eminent domain because the government is the one initiating the aggression against the property owner by forcible seizure. (Although libertarians support limiting the power of the state, it is not the same thing as eliminating the state entirely. That would be anarchism, not libertarianism.)
The state works because they have a monopoly on violence and imprisonment. As long as they operate for general good and operate via a strict system of laws which prevents abuses and maintains rights, then that is a good thing.
Making my neighbor stop dumping waste into my drinking water (which I don't own at the point they are dumping in) by having to come up with enough money to buy them out and shut them down is not viable.
If they own that part of the river, they are dumping it on their property. This is the definition of an externality.
When you said:
> The state works because they have a monopoly on violence and imprisonment. As long as they operate for general good and operate via a strict system of laws which prevents abuses and maintains rights, then that is a good thing.
did you think that most libertarians would disagree? The status quo is that the state has a role in protecting human and property rights, and in regulating public and common goods. No pragmatic libertarian would suggest removing the state from these roles without finding a suitable replacement.
If you believe that a state should exist and should protect human rights, even so far as to use their monopoly on violence to shut down a private property holder who is causing damage to property owners no where near them based on economic externalities such as providing markets for endangered species parts, then what is the difference between a 'statist' and a 'pragmatic libertarian'?
Because most libertarians are not anarchists, and because statism encompasses all sizes of governments, statism can be compatible with libertarianism. However, people who want to abolish government altogether cannot be statists, and people who support government expansion to an excessive and unnecessary extent cannot be libertarians.
The problems I have with libertarianism are around these issues and your handwaving of them, and this is compounded by the fact that you haven't defined what libertarianism actually is, besides that it is 'not anarchy'.
Have you really thought about these things, or do you just find the idea of self-sufficiency and absolute personal freedom enticing?
Since the status quo is that public lands are regulated by the state, the state will sue people who illegally poach endangered species within its jurisdiction. However, if another state allows the poaching of the same endangered species within its jurisdiction, a libertarian approach in the first state would allow for animal parts to be imported from the second state and sold within the first state.
A comprehensive definition from Wikipedia:
> Libertarians seek to maximize autonomy and political freedom, and minimize the state's encroachment on and violations of individual liberties; emphasizing pluralism, cosmopolitanism, cooperation, civil and political rights, bodily autonomy, free association, free trade, freedom of expression, freedom of choice, freedom of movement, individualism and voluntary association. Libertarians are often skeptical of or opposed to authority, state power, warfare, militarism and nationalism, but some libertarians diverge on the scope of their opposition to existing economic and political systems.
https://en.wikipedia.org/wiki/Libertarianism
You seem to be painting all libertarians as a homogeneous extremist bloc, which is just as fallacious as ascribing minority hardline stances to "all liberals" or "all conservatives". The above describes general concepts that libertarians support, and absolutes such as "absolute personal freedom" are ideologies that pragmatists recognize as infeasible.
No, libertarians are not like 'liberals' or 'conservatives', they are libertarians, and they believe in an absolutely minimal amount of state intervention. Have you talked to any before? It seems like you read a few books and have some notion of some kind of libertarianism which is not at all what is advocated for by real life 'libertarians'. There is a 'Libertarian' party in the USA and they have candidates and an agenda. You may believe one thing, and call other people's views 'fallacious' but those views are based very much on Libertarianism as represented by Libertarians.
Here are some candidates for the Libertarian party.
Since the first-past-the-post voting system used in most U.S. states makes it difficult for third parties to gain traction, most politicians who prioritize winning elections run under one of the two major parties. A libertarian candidate who focuses on reducing taxes is more likely to become elected on the Republican ticket than the Libertarian ticket. A libertarian candidate who prioritizes legalizing marijuana will stand a better chance on the Democratic ticket than the Libertarian ticket. The goal is to push for changes that would advance the libertarian agenda on specific issues while maintaining the status quo party line on other issues, since it is easier to enact targeted changes than to fight on all fronts. Political candidates who choose to be affiliated with the Libertarian Party need to be sufficiently radical to reject the two dominant platforms that are much more likely to win them elections.
Voters know that third parties including the Libertarian Party are disadvantaged in U.S. elections, and in races that Libertarian Party candidates are certain to lose or do not participate in, many libertarian voters select the candidate from one of the two major parties that they believe would do the best job advancing or preserving the parts of the libertarian philosophy that they prioritize. This is the most effective short-term voting strategy when voter prefers one of the major party candidates more than the others. In the long term, libertarians in the U.S. support ranked choice voting and other reforms that would empower third parties like the Libertarian Party. If the Libertarian Party does manage to gain traction, its platform would adapt to become more moderate, mainstream, and pluralistic to accommodate its larger voter base and encompass more of the libertarian philosophy.
There aren't many surveys that focus on libertarians, but this 2014 one from the Pew Research Center shows that self-described libertarians tend to be more diverse and less radical than you perceive them to be:
https://www.pewresearch.org/fact-tank/2014/08/25/in-search-o...
> Self-described libertarians tend to be modestly more supportive of some libertarian positions, but few of them hold consistent libertarian opinions on the role of government, foreign policy and social issues.
...
> None of the seven groups identified by the 2014 political typology closely resembled libertarians, and, in fact, self-described libertarians can be found in all seven. Their largest representation is among the group we call Business Conservatives...However, they are also supportive of an activist foreign policy and do not have a libertarian profile on issues of civil liberties.
Libertarian's as described in that survey (and as you probably are as well) are 'Republicans who like smoking weed and don't have a problem with homosexuals'.
Your perception of what libertarians believe in is more closely attuned to anarcho-capitalism, which is a radical subset of libertarianism. Most libertarians are not anarcho-capitalists. I described your comments as fallacious because you are attacking libertarianism using arguments directed at anarcho-capitalism (straw man).
I have never described my political affiliation here, so please don't make assumptions. The Pew Research survey says that 12% of Republicans, 6% of Democrats, and 14% of independents describe themselves as libertarians, so it is not reasonable to label all libertarians in that survey as Republicans.
At this point in time it is clear you are not going to change your mind on this -- and as long as you continue to claimn that I am wrong and fallacious for making assumptions about libertarian political ideas based on my direct experience with people espousing them, then I am afraid we are at an impasse.
Radicals tend to be louder than moderates, but judging an entire demographic based on the opinions of its most radical subset is not going to yield a realistic picture of the demographic. If you only consider people libertarians if they pass a purity test that requires them to subscribe to radical beliefs such as the complete abolition of the state, then the resulting group of people will be radical and non-representative of libertarians as a whole.
> convincing people how reasonable you can be instead of distancing yourself from the crazies
Again, I did not express any political ideology. When I saw you making comments conflating libertarianism with anarcho-capitalism, I explained the difference and brought in evidence to show that self-described libertarians generally do not hold the radical views that you believe they do. Equating libertarianism to anarcho-capitalism makes as much sense as conservatives equating progressivism to antifa and warning of a far-left takeover.
It doesn't account for massive differences in power, there's nothing in libertarian philosophy which takes into account that a multi-trillion dollar corporation will, always, have absurdly more power than any citizen or small collection of citizens.
Suing someone/something is not a magic bullet, in your utopian libertarian world you'd have to pay lawyers for that. You'd require lawyers that want to work with you instead of large corporations, corporations which would be free to blacklist any lawyer working against them to work for them. Not taking into account that these corporations can just slowly dial up the inconvenience to communities they'd like to push out, are you gonna sue them multiple times? What exactly do you expect that your powerless minimal government be able to do if you win a trial against such actors, to fine them? If they can just pay the fine, over and over, and they calculate those fines are just a cost of business that will be paid off by ROI, is that ok? Or do you expect the government to take action and shutdown a company that's constantly breaking the law?
I simply cannot understand why you really believe that suing a massively more overpowering force in a libertarian world is achievable, not only achievable but required to keep a balance of... Power.
It's absurd.
Libertarian world = no control of the government over any aspect of the economy, no public ownership, only private property is a right, everything is negotiated through contracts between private parties in society.
Authoritarian = almost total to total control of society by the government. Economy, customs, culture, speech. No dissent to the official government line of policies is tolerated, the people are completely controlled and submissive to the whims of the leadership. Decision-making is reserved to the political elites and the people have no voice in the process of it.
One is an economic-political philosophy, the other is a political system of control, not sure why you want to compare both.
When people say things such as "Libertarians don't account for externalities" and use a caricature of a "libertarian utopia" to attack libertarianism at large, it pigeonholes libertarians as extremists, and does not paint a realistic picture of how libertarianism actually influences politics every day.
I'm aware that Libertarianism as a philosophy has much broader branches of it, that it includes by definition concepts of freedoms and autonomy. Unfortunately most of the interactions I have with self-identified libertarians (both in Sweden and in Brazil) go towards extremism. As much as most of the philosophies under the umbrella of Libertarianism aren't that extreme that's what I see in public discourse, it's a caricature.
Libertarian thinking is also responsible for inspiring trickle-down economics, free market privatisations across the board and so on. These policies have been, at least, a mixed bag of results with plenty of it being failures (e.g trickle-down and privatisation of healthcare/education). We know, empirically, what the consequences of purely libertarian policies such as the ones brought by neoliberalism can be: monopoly/monopsony formations (i.e corporations mergers), empowerment of elites, diminished power of labour and so on.
Libertarianism defers too much power to private individuals, without much regard to the power imbalances that will arise from its philosophy, just trusting that certain mechanisms will balance it all out. That's my main reservation with the philosophy as a whole.
Is it your contention that people are misrepresenting libertarianism as extremist out of ignorance or malice?
Do you think that is unreasonable to view libertarianism as extreme because people who are 'real' libertarians are forced to run as Republicans, and because in the future the libertarian party is going to become more moderate and reasonable?
I am trying to understand why you expect people to have a nuanced view of a political group that does not present itself as such, because you feel that it should or will be something else.
In the U.S., self-described libertarians as a whole do not uniformly hold the views that you assume they hold. When 11% of people in the U.S. describe themselves as libertarians and correctly identify the term per Pew Research's definition ("someone whose political views emphasize individual freedom by limiting the role of government"), yet only 1.2% of U.S. voters chose the Libertarian Party ticket in the 2020 U.S. presidential election despite a 66.8% turnout rate,* you are not accounting for most libertarians in the U.S. when you limit your awareness of libertarianism to what is presented in the Libertarian Party platform.
* https://en.wikipedia.org/wiki/2020_United_States_presidentia...
Money is the property of the state that prints it. Land likewise. You're leasing at best.
It’s also important to remember that rent stabilization is not rent control - landlords are free to raise the rent by an amount set annually by a board of landlord and tenant representatives. As a practical matter, that means that the rent increases track closely to inflation and consumer prices.
What it protects isn’t rising rent, it protects tenants from landlords jacking up the rent to kick them out, and then lowering it back again to get tenants of a different age or ethnicity, or saddling tenants with the risk that if they advocate for their rights as tenants that their lease may not be renewed next year.
It’s easy to say “price controls don’t work” while ignoring that the landlord / tenant relationship is so skewed from a power dynamic that there needs to be some sort of protection from abuse.
Landlords abusing tenants is totally irrelevant because rent control doesn't address that problem at all, it just shifts that abuse to new tenants for the benefit of long term residents, since the entire policy is a wealth transfer to people who never move from where they live.
As both the article and the GP pointed out, rent stabilization does allow for rents to increase.
Are you trying to say they aren't allowed to increase enough, or are you under the impression they don't rise at all?
In any case, the exact same economic phenomena has been observed regardless of if you fix rent increases to inflation or never allow for rents to increase, because the two approaches are just incredibly similar variants of price controls.
Without rent stabilization, landlords can and do raise rents arbitrarily to drive our particular renters and then offer better rents to preferred renters. Or equally likely drive out a family to subdivide an apartment into multiple rooms to rent.
If you pass laws that say, for example, you have to offer a renewal to an existing tenant, that doesn’t help, they’ll just play the same game with the rent. Mandate that the same rent has to be offered to new and existing? Well now we are in the realm of price controls.
The power dynamic is so massive between landlords and tenants, especially for people who aren’t fortunate enough to have disposable income, that there needs to be some sort of protection.
This is positing that landlords engage in complicated schemes to lower the rent they are paid. I speak with supreme confidence, the median landlord is not going to do that unless these 'preferred renters' are measurably better than the people getting kicked out, in ways that make objective sense. Frankly, if a landlord is engaging in this practice then they probably aren't a 'landlord', they've just taken the property out of the rental market so their kids can live there or something.
> ...drive out a family to subdivide an apartment into multiple rooms to rent.
A landlord is much more likely to do that, but the complaint here is that there are people willing to value the m2 of the apartment higher than the family. There is no way to block that from happening without price controls and, eventually, shortages emerging.
The landlords in the article are greedy, they don't want their apartments to be empty. They want to be renting them out for whatever the most willing renter is going to give them. But they also aren't stupid, and they aren't going to rent them out anticipating that they will make losses.
That’s all well and good but that isn’t the issue. Part of the contract for renting an apartment in NYC is that you must offer renewals. A lease is a contract that, unless there’s an eviction, only the tenant can end. And allowing landlords to violate the spirit of the law by saying “we didn’t kick them out we only raised the rent to $10k/mo” defeats the whole purpose of it which is to not rip housing out from underneath people.
But it is going to be mighty difficult to take people who take up the landlord side of that deal. And things like, say, 60k rent controlled apartments sitting empty seems like a reasonable outcome - y'know, might have to be an idiot to rent out an apartment for a deal that bad. It sounds ruinous. Sounds like a bad law, really.
I'll also point out that despite the fact that rent stabilization isn't required for new rental construction, there are a few areas in nyc where the city offered incentives in the form of property tax abatements in exchange for the landlords agreeing to rent stabilization - what do you think happened? Almost all of the new construction in those areas agreed to being rent stabilized. If it was so bad, so ruinous, why would they agree to that?
The story here isn't "rent stabilization is bad", it's "landlords are having a hissy fit that they can't exploit their tenants as much as before, so they're keeping apartments off the market on the off chance they win a court case"
And no-one is getting tricked here, it seems pretty obvious what is going on.
> The story here isn't "rent stabilization is bad", it's "landlords are having a hissy fit that they can't exploit their tenants as much as before, so they're keeping apartments off the market on the off chance they win a court case"
What do you think the symptoms would be if rent stabilisation was bad?
Bad for whom? Tenants? Landlords?
If landlords of rent stabilized buildings were declaring bankruptcy and the city had to take over and operate the buildings, that would be a clear sign that the economics of rent stabilization made it impossible for the free market to work.
Except that hasn’t happened, in fact, being a landlord is still so lucrative that they can afford to keep units off the market in the event of the small chance that the laws get changed in the next year.
I can guarantee you that once the court case is settled, those units will gradually come back on the market and everything will go back to the way it was.
I can imagine other creative ways to achieve the goal. However, I'm having difficulty wraping my head around your scenario.
The landlord decides they want an 18 year old Liliputian, but accidentally rents it to an 85 year old Belfuscian instead? Later, they realize their error, and temporarily jack the price up to kick out the Belfuscian they were totally fine renting it to earlier?
Isn't it more likely that, instead of suddenly becoming racist/ageist, the landlord is trying to get rid of them for some reason that became apparent after they signed the lease (late payments, noise, illegal activity, etc...)?
There are a few scenarios:
- landlord rents to belfuscian because that’s the market. Then a Lilliputian makes a popular tv show that depicts the neighborhood as cool and affordable. Landlord starts getting interest, so they force out the belfuscian so they can get the Lilliputians.
- landlord just wants to run a building and make a living. They get an offer too good to pass up and sell the building. New owner plans to make the money back by forcing our existing tenants and jacking the rent.
- the tenant believes that they have a right to an apartment without roaches and mice. The landlord feels like that’s not reasonable because it’s NYC, and there are roaches and mice. The landlord decides to get rid of these tenants and hope to raise the rent.
And yes, sure, there are bad tenants who landlords want to kick out. But let’s talk about who is more likely to end up in a bad situation- the low income tenant trying to get by, or the landlord who owns a building they want to maximize revenue from?
Around here, most bigger buildings are corporate-owned (equally good or terrible to all), or small enough where loopholes allow everyone to be evicted at sale.
The landlord is the property owner. Yes, they can kick renters out of their house after the lease, a contractual agreement to temporarily live in it, has expired. As long as the renter signed the contract, understood the terms, and wasn’t under duress that should be the end of it.
When someone otherwise takes something that doesn’t belong to them (In this case, someone’s house) that’s called stealing. When the government enables people to steal you get a bunch of weird market dynamics that reduce the supply of affordable housing.
You cannot end run around the law by trying to be “clever” and technically offering a lease renewal of 10 billion dollars a month. The world doesn’t work by programmer logic.
It’s not rent control, but someone else is, ah, controlling how much I can charge for the building I paid for.
?
Stabilization requires control.
Forcing X to do Y against their will requires control.
Argue for rent control if you want but your pissing on my leg and telling me it's raining.
“Rent control” in NYC is a specific term that applies to a separate set of regulations and laws that govern a particular set of rental properties. Tenants who live in these properties are effectively immune from rent increases for as long as they or their families live in the apartment.
Of course rent stabilization is a form of rent control, but it is not the same as Rent Control in NYC. In online discussions about NYC rental law, the two things often get conflated, as they have at several points in this thread.
Rent control is where both the initial rent price, and the increases are controlled.
We're in a technical forum, so it's reasonable to actually differentiate terms we're discussing.
Artificially lowering prices is a good way to lower supply of housing, if that's what you're going for. Since people generally aren't interesting in lowering supply of housing and making the market less efficient, it's not a good approach.
The other thing rent control specifically does is give you are larger incentive to live where you've already been living, so if everybody did it, everybody would figure out it was irrational to ever move from the first home they ever rented. This doesn't actually stop "gentrification", it merely slows it, by simply making it hard to move to a new home in general. It also makes the existing residents more wealthy than newcomers, and the existing residents don't consider themselves the "Gentry" no matter how valuable the NY real estate they sit on is.
I feel there is a huge mismatch between what rent control actually does and what people are trying to accomplish by implementing it.
Real world free markets consistently fail to reflect the cost of externalities such as the effect of only rich people being able to afford housing in a wide area.
Rent controlling privately owned real estate does not work and has never worked. It literally just doesn't do what is claimed. It mostly repeatedly crops up generally because of how politics is structured means long term residents have a lot of clout to propose policies that benefit themselves while spinning BS about how rent control ends homelessness.
If you want the right to live in a specific area with specific amenities, well you can't always get what you want. The reality of resource scarcity and power differentials always crops up somewhere.
There's a lot of vilifying of landlords here. I was a landlord for a while because I wasn't ready to move. That got me my two first and only legal cases (one settled, one won but never collected $10k owed because the con artist skipped country). The insane level of stress got me out of that and I was lucky because only months later, all landlords got left holding the bag with the covid non-eviction mandate which meant renters could just stop paying rent. I'll never ever rent anything out again.
If people could build a house to rent out at a reasonable profit (and if the planning commission let them do so), then they'd build new housing. It's not like there's a capital shortage in NYC or SF, or new houses are some magic unproven technology.
The increased supply of modern units would create a downward pressure on old unit pricing, and therefore the rents paid by blue collar workers. This would decrease the price of construction to something vaguely approaching national norms.
Rent control (and, at least in California, insane codes) breaks this loop, so we have a situation where there is a shortage of housing, housing is completely unaffordable, and building new housing is unprofitable. (Also, the cost of construction has been completely decoupled from the price of materials. In most places, material costs are most of the budget!)
Real estate, as far as markets go, is exceptionally prone to profiteering via reduced supply. It’s unlikely that these 60k units would be unprofitable for their owners; the owners have simply determined that they’re not profitable enough.
> Few things have been proven as resoundingly as "price controls don't work", or more accurately "are very net negative".
I don't see how this follows. NYC has had rent stabilization for over 50 years, and the story here is: "the number of rent-stabilized homes reported vacant on annual apartment registrations rose to over 61,000 in 2021 — nearly doubling from less than 34,000 in just a year as the city emerged from COVID lockdown."
In other words, a very recent problem.
If price controls don't work, then wouldn't they have failed in the year 1971 rather than the year 2021?
Only Black Swan data applies.
> Altogether, the state numbers show a loss of over 95,000 stabilized apartments for rent after 2019 — the year a major overhaul in Albany of the state’s rent laws blocked landlords from significantly jacking up rents on vacant units when letting them to new tenants.
I think it is based on a mathematical theorem or something, but i have long since forgotten.
With price controls, there is a limit to how much you can invest in a property to fix it up to attract new tenants.
There are building permits with harsh rules. The reasons of these permits and rules is to keep the city livable, beautiful and functional.
Since you cannot build freely if left unchecked the prices would go to the sky. And you don't want that because functional city needs working class people, you need nurses, shop attendants, janitors, etc...
Maybe you think city planning and urbanism are bad ideas and that we should let the free market magically solve all the problems.
https://news.ycombinator.com/item?id=33224502 - discussing how Yieldstar, a consultancy, advises some landlords/property managers to hold or accept a higher vacancy rate while raising rents to increase overall profit.
What do you mean, rents may only go up? That's not how it works anywhere. It's only true over specific time periods.
Edit ignore this I misread the comment
But rental changes are literally neighborhood-specific. COVID had some neighborhoods in NYC flat, others rising, others falling.
In any case, rents fall. That's the point. It's normal.
Rents are subject to supply and demand just like everything else.
One popular way to “flip” an apartment building of 100 units or so is buy one that is 100% rented and slowly raise rents until it is 80-90% rented and then sell it n
For one thing, rent-stabilization may mean that if a landlord lowers the rent to fill a vacancy, he will not be able to raise the rate again. This creates a very powerful incentive to not lower the rates. Another pernicious effect of government price controls.
It’s not an “opinion” the law is bad. It is a well understood part of capitalism.
I lived in an NYC rent stabilized apartment for a number of years, and my rent was always articulated as legal rent is X, offered rent is Y.
It’s interesting how rent controls work perfectly but property tax controls (prop 13) is widely known to be the cause of all ills.
The landlord can decide to change the rent to anything up to the legal rent, but cannot go over.
There’s no mystery here, everyone knows the score, it’s just that landlords try to take advantage.
Then it does.
A certain amount of empty property should be expected - they do require renovation and repair.
In commercial real-estate, I believe 10% is considered healthy for offices.
It looks like 3% is considered healthy for apartments?
[1] Residential vacancy rate source for "healthy" - https://www.suburbsfinder.com.au/resources/vacancy-rate-expl...
[2] Commercial vacancy rates: https://www.statista.com/statistics/194054/us-office-vacancy...
You don't have a real market unless there is a bit of slack.
You'd expect a lot more empty property than just what currently needs maintenance. If you have no empty and rentable properties, then when someone comes to you wanting to rent an apartment, you can't rent them one. That's a big problem for you.
This is the same reason you don't expect a secretary's day to be filled with work. You need idle capacity so that when something comes up, you can handle it.
This sounds more like profit optimization. Maybe it is true that it is acceptable to have x% vacancy if it means that your overall occupied rental price remains higher.
An analogy here would be if you're running a hot dog stand, you start selling hot dogs for $10 instead of $5, and have greater unsold hot dogs but higher overall profit.