Comment by stoppingin | Hacker News Reader

Comment by stoppingin | Hacker News Reader

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Thank you for taking the time to make a nice reply, and for not taking my criticism of your post personally. I really appreciate that.

I feel like you have a very arbitrary definition of NIMBY. I'm writing this post right now from the 14th floor of a highrise building in Sydney's inner city, in the apartment I rent from a landlord who lives in mainland China. There are still rows of historic terrace houses in the nearby suburbs that have been heritage listed. I'm sure property developers would love to turn these into more highrise apartments. Even though I'm renting, I don't want these to be replaced with endless new apartments. I could list a dozen reasons too. For one, I don't think this would help create a city that people would actually enjoy living in.

I've been told by people who would know that one of Sydney's big problems is that property developers are able to artificially inflate property value by staggering the release of newly developed property onto the market. So more development isn't necessarily going to solve any of this country's problems with property value. It hasn't so far.

> There are still rows of historic terrace houses in the nearby suburbs that have been heritage listed. I'm sure property developers would love to turn these into more highrise apartments. Even though I'm renting, I don't want these to be replaced with endless new apartments. I could list a dozen reasons too.

Funny, I would have the opposite opinion. Just because someone was alive and rich back in 1950 or whenever these cute little houses were built, doesn't give them more of a right to live in that area than others, in my opinion.

Let's face it, most of these cute litte historic houses are probably owned by the same mega-rich investors and CCP party members as your apartment building.

1 person having a garden does not justify 15 families not being able to live there.

> a very arbitrary definition of NIMBY

NIMBY means not in my backyard. As in, I want the benefits of a thing but not its cost. Wanting affordable housing while denying development is NIMBY. Saying no development because you want higher property prices is not NIMBY, it's prohibitionism. (Depending on the environment, it could be reasonable and/or heartless.)

> been told by people who would know that one of Sydney's big problems is that property developers are able to artificially inflate property value by staggering the release of newly developed property onto the market

This is prudent pipeline management. Why would you bid up the cost of materials and labor only to dump the finished product at a loss?

On supply and demand: American house prices are elastic, but over long timelines [1]. In Sydney, dense housing is more elastic than detached housing [2]. The abundance of those historic terrace houses, together with long development approval times, cause the high prices and relative price inelasticity.

[1] https://www.sciencedirect.com/science/article/abs/pii/S00941...

[2] https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-8462....

> This is prudent pipeline management...

Doesn't this contradict your central thesis? If the supply of housing doesn't exceed the demand, the price isn't going to drop. How can urban consolidation actually benefit the renter class if property developers are able to artificially increase the value by restricting supply until mechanisms like immigration cause demand to catch up?

> Doesn't this contradict your central thesis?

No. In development-constrained world, particularly one with long approval timelines, you need to make money on margin. In a less-constrained world, you can bring to force economies of scale and make money in volume.

The thesis is: if you have an anti-development environment, developers will maximise margins. This isn’t a conspiracy and it isn’t artificially increasing value. It’s survival. If ten houses will get built but there is demand for twenty, and everyone pays the same for labour and materials and lobbyists, all those houses will be as high end as the market will bear. You’re competing in getting the right to build; the market is inelastic. If anyone can build twenty or thirty houses without years of approvals, you’re going to prioritise your costs, because there is a chance you don’t sell every single house. You’re competing on price and value; the market is elastic. (You also get a learning curve.)

This is why Sydney has price inelasticity for detached housing. The scarcity is a policy choice.

This sounds intuitively correct with regards to the economics of property development. I'm not a property developer though. I'm not really that concerned about their profits. I'm a young person renting an apartment in a city that is rapidly becoming unaffordable for the average Australian. The point of my post above was: If property developers are legally able to artificially constrain supply to maximise their profits, then how does all this YIMBYism actually benefit me? The main argument I hear for urban consolidation is that increasing supply lowers the cost. If this doesn't actually happen, then what's in it for us again?

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