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Comment by warning26 | Hacker News Reader

Remember, high rents are always one of the following:

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!

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There was a recent article on a software-mediated version of (A) that seems to be happening all over the US: https://www.propublica.org/article/yieldstar-rent-increase-r...

Keeping property vacant because you only care about appreciation and don’t want the hassle of being a landlord is a reasonable course of action, even if immoral. Property tax acts as friction against this, but often isn’t good enough to force people to rent out their property.

Sure, but in that instance the correct policy response there is to stop the policies that force house prices eternally upwards, meaning that this strategy doesn't work in the long term.

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.

Is it moral for a city to control how I price my products? Is it moral for that same city to give me nothing when renters stop paying rent and utterly destroy my property before they leave after many months or years of mandated delays? Is it moral for a city to keep prices so low I can’t possibly afford to maintain the place for tenants and also make my own mortgage payments?

Why would it be immoral for society to do things in its best interests, instead of only yours?

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'.

Well that does nothing to address my questions, but at a minimum New York landlords are paying the highest taxes in the country. They are literally being forced to contribute to the public good with a little or no oversight as to the effectiveness of their involuntary contributions. Also you appear to have hallucinated things I didn’t say.

And that only happrns because regulation of new housing keeps demand for the empty property high.

Forcing people to rent out their property is immoral. Forcing people to conserve land which is a scarce resource in urban environments is not.

And I'm of the mind that letting people hoard a scarce, necessary to life resource, when they aren't even using it is immoral.

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.

If the tenant laws mean being a landlord isn’t profitable, then no one will bother doing it. Capital will flee from the market chasing better returns elsewhere, and then who is servicing rental demand?

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.

If we build more housing, existing land owners are best positioned to buy more housing.

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

> If we build more housing that will just drive prices up! Somehow!

Well, induced demand is a popular theory in other areas, so... maybe?

> In economics, induced demand – related to latent demand and generated demand – is the phenomenon whereby an increase in supply results in a decline in price and an increase in consumption. In other words, as a good or service becomes more readily available and mass produced, its price goes down and consumers are more likely to buy it, meaning that demand subsequently increases. This is consistent with the economic theory of supply and demand.

https://en.wikipedia.org/wiki/Induced_demand

Has it been observed in housing?

The concept fundamentally does not really apply.

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”.

Building more housing in hit areas can unsuppress suppressed demand. Say, somebody in Spokane really wants to move to Seattle, but hears about how hard is to get a place to live so stays put in Spokane. But then they build a bunch of new apartments, leading to vacancies, making their dream of moving to the big city more realistic. So if Seattle caters to all housing demand, they could grow from 700k to 7 or 70 million. Which obviously isn’t feasible.

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.

Prices going down is a prerequisite for induced demand, so no.

Building more houses is just like building roads. It increases demand for that housing. Higher population means more demand, which outstrips how fast you can build, which leads to higher prices.

There's your "somehow". Being intentionally obtuse just makes you look stupid at best.

This is exactly right. The only way to lower housing prices is to start demolishing housing. The more apartments we convert to office space, the lower prices will go.

If we destroyed all houses, the cost of housing would be zero!

Weirdly, that kind of describes Detroit in the 2000's.

New subdivision next door, so I bought two houses to live in.

Roads are free at the point of use, so this analogy doesn't hold (and I think you'd be hard-pressed to find empirical evidence of what you're describing)

There's more housing in NY now than there was in the 1900s and house prices have only increased.

There's no more choice in using roads than there is to live somewhere.

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