Hacker News Reader

Comment by kelnos | Hacker News Reader

No, that's not a problem. If there is demand -- any kind of demand -- whether it's for people's primary residence, a vacation home, or a short-term rental property, you build more.

If someone can't find a house because there are short-term rental properties, the solution isn't to force someone to give up their STR, it's to build another house.

I absolutely recognize that short-term rentals have other undesirable effects on a neighborhood or building: noise, constant random strangers in the building/area, etc. I think those are reasonable reasons for banning or restricting STRs, but "housing shortage" is not among them. If you have a housing shortage, the solution is to build more housing, full stop.

View on HN

> No, that's not a problem. If there is demand -- any kind of demand -- whether it's for people's primary residence, a vacation home, or a short-term rental property, you build more.

In Spain, there was high demand for property prior to 2008. In areas in the UK, there was high demand for property across most of the country. Then credit became harder to get after the GFC, and suddenly the demand just wasn't there. In Spain, property prices in many area more than halved within a year. What happened? Suddenly everyone moved out? No, the demand was just demand from a different source.

Actual house price increases outstripped rent increases by multiples, but suddenly all of that demand to own just disappeared when the credit driven boom went bust (not everywhere).

There is often more to it that just build more.

It's worth pointing out that UK house prices are higher than the US, despite incomes being ~30% lower or so, _and_ homes being significantly smaller.

The base demand for housing compared to supply in the UK is that much worse.

The thing is, we are talking about building homes and apartments - it's easy to say 'just build more', but harder to do.

We would need 'China style' decisions - which ended up with building so many apartments, that they end up with a significant percentage of them being empty, and the ripples of those decision will crush their economy for the years to come.

People have been saying this forever but their economy keeps going along and does not look like it will stop until a dmeographic crisis.

Well, it's only recently that their home builders and lenders started collapsing.

The music has stopped. It will take some time, but the outcome is almost inevitable.

Even if that happens, they will have plenty of housing. Worse things to make too much of abound.

3 years ago, and it was induced by government policy. At any given point since I've become politically aware (around 08), there's been at least one narrative around China's coming collapse, and it hasn't materialised in the slightest yet.

Central planning is kind of where we are now already — housing construction is severely restricted, housing costs are subsidized in some areas for some people but not others, etc.

Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.

Cars are a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to chip shortages in the pandemic), but outside those no one really complains about a “car crisis”. There are new and used cars available at very many price points, old vehicles get retired and new ones are manufactured, etc.

In housing, one major reason we don’t “just build more” is precisely because of regulation that either prevents housing construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct vacant apartments — we have plenty of companies and individuals willing to build, we just need to let them.

We tore up all the train tracks and put down roads and parking lots everywhere. You can't get away from the effects of "central planning" just because you want to pretend the market is perfect.

I’m not pretending the market is perfect at all. I’m saying what central planning we do have has been very anti-housing development.

Your example perfectly supports that!

My point is that the world is complex. You can't just ignore external causes/effects for one case but not for the other. You can easily flip everything you said and it makes just as much sense. Look:

Central planning is kind of where we are now already — transportation options are severely restricted, transit costs are subsidized in some areas for some people but not others, etc.

Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.

Housing is a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to mortgage bubbles or material shortages in the pandemic), but outside those no one really complains about a “housing crisis”. There are new and used houses available at very many price points, old buildings get retired and new ones are manufactured, etc.

In transportation, one major reason we don’t “just build more” is precisely because of regulation that either prevents rail construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct unused trains — we have plenty of companies and individuals willing to build, we just need to let them.

Hmm. I sense you are trying to make a point here, one I might even agree with, but I confess I have no idea what it is.

Land. You can’t create more land. And neoliberals complain if local government has sufficient power, and the resources, to provide mass transit and build out housing schemes like they did in the past.

You can't create more land, no, but you can build higher on the land you have - unless some NIMBY-driven zoning code stops you.

We have a housing crisis because restrictive zoning codes prevent housing density from rising to meet demand. The market is not being allowed to work properly, and has not been for decades now in many places, so we have accumulated a huge backlog of unmet demand.

You can actually create more land, but we usually just do that for airports. Hong Kong is a great example of building up and up while prices are still sky high. I guess you are just referring to the states though, right?

Reply on news.ycombinator.com