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Comment by ggm | Hacker News Reader

What rate of return is socially acceptable? Putting the market to one side, there's affordability to tenants, this is a home not just an investment vehicle which has to balance off against investment returns, in many cases LPTs are what pension funds invest in, so the income in turn is funding retirement.

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> What rate of return is socially acceptable?

the market rate of return. You establish this by making sure that a market has enough participants that they all vie for the investment. This will drive down the rate of return, down to an acceptable level that allows participants to continue.

Microeconomics suggests there are multiple common scenarios where consumers are priced out of the market entirely. If you can't afford rent then you can't afford to move. People homeless to appease shareholder value.

Land/location is not a capital good and isn't affected by the same market rules as capital goods, because it is unique and possesses monopoly properties. It's essentially impossible for land and other natural resources to have a free market, by nature.

Seeing a free market fundamentalist preach in 2022 is like watching a doomsday cultist try to explain why the world didn't end on time last week.

0%, large landlords should be non profit cooperatives, there should be several to ensure efficiency/prevent monopoly stagnation and they should be under constant scrutiny from independent parties.

Sure, who wants to put money into that?

People who actually need the housing? It’s not like land is cheap after all.

Why do you think it doesn't happen? I believe that if you extend it to all the services you get a communist state. There may be no profit for sure but you get low performance as well with a lot of corruption.

Also no amount of housing will fix the issue with people wanting to live all in the same place(i.e location, location, location). You can build your own house if you want to cut off the middle man but it won't be in the city center.

Hmm, maybe we should ban selling housing for more than the purchase price + inflation based on some index. If rent controls are popular, why not also have price controls on properties themselves. Maybe allow some increase if entire building is replaced, but some value must be attributed to land that can not increase in value.

Why would anyone invest money just to get the same returns they can get on an inflation adjusted government bonds?

What if the government guaranteed income as risk management on this form of investment and made the housing bond a gilt, at marginal cost rather than absorbing the full cost of social housing?

I mean I still prefer public housing but if we're on a mixed economy road, don't have a national pension model that works and people do market investment in property trusts for income class reliable returns...

Do you know anything about the history of public housing in the US? Has it ever produced desirable housing?

The other suggestion is basically section 8 vouchers that the government already does.

It's effectively the new risk-free rate. So whatever watershed where it stops making sense to put money in a mortgage instead of a viable, profit-making, problem-solving business.

Rate of return is irrelevant. Affordability matters.

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