Hacker News Reader

Comment by alephnerd | Hacker News Reader

How do you force house prices to drop when

1. THERE IS A LABOR SHORTAGE IN CONSTRUCTION

2. ZONING WILL NEVER BE REFORMED AT THE LOCAL LEVEL

3. EVERYONE ASSUMES THE PRICE OF HOUSING WILL CONTINUE TO GROW MORE THAN INFLATION

All 3 highlight a broken market due to inflated costs. The only solution is to slow the market down and play chicken with owners.

> pulling the ladder up and further securing the position of those who got there first

Such is life. You can't drastically change a market overnight. You'll get voted out of office.

Welcome to the late 70s. This is how it was then too. Be happy we don't have a Volcker

View on HN

Nationwide rent control.

We've done it once before (World War 2 - in that case it was even retroactive, so you couldn't hike rents in anticipation), and it increased homeownership rate by the highest rate in the 20th century (something like 5% jump in a few years) by making leasing less profitable than selling.

Would also have to be combined with more building, but it does work. If you make investing in real estate less appealing (via rent control), people will sell - unless they're just hiding money (i.e. overseas investors).

You would probably have to go on a crusade in order to promote it, and it would require a massive anti-landowner propaganda push (of the sort that existed during WWII), but it's theoretically doable.

WW2 was done via the War Powers Acts, and being at war with half the world is a bit of an edge case. Also the mechanism used to do that was ruled unconstitutional after WW2 [0]

> it's theoretically doable

So is a constitutional amendment banning sloppy blowjobs but that is completely unrealistic.

Jesus HN has gotten dumb.

[0] - https://openscholarship.wustl.edu/cgi/viewcontent.cgi?articl...

Rent control has worked spectacularly well everywhere it has been tried, and never has any downsides.

I mean that’s the theory, right? It’s never been truly tried?

There are great new ideas here though like seizing all the beachfront vacation homes

The great idea is to greatly increase property prices on unused/underutilized land/non primary homes.

I would even tie some portion of primary home property tax to the density of people living on a lot.

And then what? That's a very short-run solution. Eventually, you have to build.

This is sarcasm.

Rent control does not produce units. You get units by reducing barriers and costs to construction.

One avenue is stronger property rights. Don't let local governments and randos have an opportunity to make demands or issue denials.

It took me nearly four years to get approvals and permits to repair an existing home in California. Building a new one seems impossible.

I agree with you that the best thing to do is to relax the regulations for building (and permitting, etc etc). I was talking about fallbacks when building is not an option (either politically or because of a labor shortage or otherwise).

"New York University economics Professor Edward Wolff, a specialist in real estate statistics, said 4.48 percent of American households owned three or more residential properties in 1998, compared with fewer than 1 percent in the early '90s."

I wonder what that number is today...

One of the first things they teach in Econ 101 is how bad rent control is for an economy.

Reply on news.ycombinator.com