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Comment by adam_arthur | Hacker News Reader

Agreed that the past generation has made policy at the expense of their children/descendants. That's what taking on a higher debt as a percentage of GDP effectively is.

But there is no housing shortage. There was a shortage of listings for a period of time, not a structural shortage. Number of housing units per household is same as it was 20 years ago. 1.1:1

[Different metric, but gives an idea] https://fred.stlouisfed.org/graph/?g=MvZv

Prices in previous tech hub areas will fall drastically if remote work sticks, so won't be a problem for future residents of SF/Bay/Seattle/Austin.

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> there is no housing shortage.

you are factually inaccurate there, for most US metropolitan areas on the East and West coasts. In particular, the San Francisco Bay Area for sustained decade+, had several hundred thousand more available jobs than available places to live.

source: professional Urban Planners in California

I'm talking nationally. There are going to be outliers you can cherry pick for local concerns. The national data is quite clear on this, reference any stats you want on FRED or otherwise

And those jobs in SF are likely to go remote in large part, as we've already seen a strong transition towards. It's not very economically efficient to make employment contingent on location, so I'm doubtful that will continue to be the baseline model for white collar work.

Home prices in the Bay Area are driven by local employment, yet I can take the same job now and move to Texas and buy a 300k house rather than 3 million. The amenities and culture will develop over time.

Doesn't seem to be a very favorable outlook from a fundamental perspective for BA RE prices to me

And Silicon Valley is uniquely messed up by Prop 13 and NIMBYs, not to mention the fact that there is no room to sprawl out like midwest cities given the geography.

That's not to say that other cities don't have a similar mix, but those other cities are not home to the headquarters of highly-paid software folks who all compete for housing. Even Seattle folks priced out can possibly afford places way up north in Everett or down south in Tacoma, if one absolutely must have a house for whatever reason. Even cities that are a heinous commute to Silicon Valley (e.g. Santa Cruz) are still wildly expensive.

With real estate management software enabling the market to act as a cartel you can have an 'excess' of housing yet maintain an apparent shortage and extract monopoly rents.

True, though I question how effectively a cartel on rents can be formed in practice.

I believe that specific piece of software is already being investigated by the Government for anti-competitive, price fixing like behavior

Effective enough to elicit government investigation. There is a huge industry of data aggregators and managers for which this cartel like emergent behavior is the primary value offering. My current rent is managed by it and I can presume at least 10% rent hike every year. The entrenched money benefits from this status quo so without an establishment threatening crisis I doubt much would be done about it.

Rents are declining nominally right now, not rising. If you look at recent MoM data. The software can't just tell companies to raise rents 10% if the market doesn't bear it.

It would require a unilateral cartel without meaningful supply outside of that agreement to actually fix prices.

That being said, this kind of behavior should be subdued as much as possible, within reason

They would be declining more without the software, you can still extract monopolistic rents in an economic downturn. Just because the rents have declined does not mean they’re not monopolistic.

A lot of this is geographical monopolies and actual liquid stock is often quite limited, so long as price is set at the margin and the managed property is on that margin they can elevate the price. This is easy enough to do as low rent options don’t stay on the market. Plus non-managed properties will benchmark themselves against the market which includes the managed properties allowing for price leadership.

There is a whole zoo of anti-competitive behavior strewn through business that is tolerated due to the immense amount of money that is made that is beneficial to governments who tax it and politicians who receive donations. I don’t know how to fix it, step 1 seems to be fix political corruption and that already seems impossible. Once something becomes corrupted it’s very difficult to un-corrupt it.

Note that "total housing units / working age population" is the wrong metric. Many baby boomers are choosing to stay in their houses long after they have retired, and retirement lasts longer because life expectancy is now ~15 years past retirement (more in many of the blue states that are the most housing constrained).

The proper metric would be "population entering peak home-buying & child-rearing years / (deaths + population entering senior homes + new home construction)". I'm pretty sure that metric is pretty bleak just looking at the U.S. population pyramid:

https://www.populationpyramid.net/united-states-of-america/

I gave the "housing units to households" metric, which is the one that matters most.

It's 1.1 housing unit to 1 household, same as it was in 2001. You can corroborate with FRED data for total households vs total housing units

Demographics were favorable for demand for the past few years due to millenials reaching homebuying age, but they quickly shift against demand over the next decade due to large elderly population passing on and lower population growth. Not even considering that homebuilding is at an all time high

https://fred.stlouisfed.org/series/UNDCONTNSA

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