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Comment by IronWolve | Hacker News Reader

Yes, its just price fixing, bypassing laws by using 3rd party tools.

And with no increase in supply and the increase of people needing housing, the prices can go only go higher. Infrastructure designed for populations 30-50 years ago, city planning didn't foresee the need for the public transportation and housing needs for these mega cities.

And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue.

Top if off with the increasing inflation and interest rates which is also compounding the situation.

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But actual data says opposite. Amount of housing is growing while household size shrinking.

>>US-wide, homes built in the last 6 years are 74% larger than those built in the 1910s, an increase of a little over 1,000 square feet. The average new home in America, be it condo or house, now spreads over 2,430 square feet. It is also important to note that, parallel to the rise in living space, households have been getting smaller over the same period. In 2015, the average number of people in a household is 2.58, compared to 4.54 in 1910. This means that today the average individual living in a newly built home in the US enjoys 211% more living space than their grandparents did, 957 square feet in total

Data doesn't say anything. You need to interpret it correctly. For example, any time you see 'average', you should probably run away quickly, because it is almost certainly full of monsters.

https://www.thestar.com/news/insight/when-u-s-air-force-disc...

just some quick things that jumped out at me:

- of homes actually built, hides that there's a lot of demand for smaller starter homes or housing in cities

- the average household can get smaller if there's a bimodal distribution, ie poorer households growing in size. or people not having kids because they don't have and can't feasibly afford a spare bedroom.

- "the average individual living in a newly built home" im leaving this one as an exercise for the reader

Does this control for short-term rentals? I could totally see us building more 3 bedroom Airbnb flats while simultaneously moving families into smaller apartments.

This has long been a suspicion of mine; I've wondered what the actual ratio of housing square footage per person in the US is. I see the wealthy building palatial 3rd homes that are occupied a few weeks a year and wonder if that's a big enough demographic to have any noticeable affect on the national market. Seems wasteful regardless.

There is an inundation of foreign nationals holding in various camps and temporary housing that are fueling inflation (gov’t money printing, aka fraud) and will drive price increases soon as they start being interleaved into society.

The other side of the equation is also that the same inundation of foreign nationals into the system will drive down wages.

We are all riding the dragon. We shall see how it unravels.

Yeah, this is annoying. Even the 55 and older neighborhood that was built a few miles from me recently, the smallest is about 2K sqft. What the heck??

Surely the math must make sense to someone.

> And then the increase in local taxes to try to compensate for the mass costs

I don't know if it's like this everywhere, but our local taxes have gone up by a big percentage over the past several years. They say they haven't raised our taxes, but since valuations go up, our taxes go up... by thousands of dollars.

If valuations are up across the board, and the revenue requirements remain fixed, then your mill levy should be lower and your tax burden should be the same as the past. It should be pretty clear that your municipality is collecting more taxes than they were previously from published reports. If they aren't, then that means your property valuation has gone up more than others in your region...that should be considered a good thing, even if you have a slightly higher tax burden because of it.

In what conceivable reality could housing costs go up across the board but municipal revenues remain flat? Municipal employees need a place to sleep, so housing costs lead directly to new revenue needs.

If municipal revenue doesn't remain flat, then you can't say taxes haven't gone up.

Exactly. Our tax rates were cut (very slightly) this year, but valuations are still up so the tax bill is up as well. The city acts like we should be super grateful.

This was the main reason behind California's Proposition 13 in 1978. At the time, homeowners were seeing their taxes go up and up every year just based on valuation increases. Meanwhile their incomes weren't necessarily increasing at the same rate. Prop 13 has had some negative effects but the anger by voters at the time is entirely understandable.

The biggest issue with prop 13 is they also rolled it out for commercial properties not just your primary residential home. So much prime land is squandered as a result by things like 1950s era single story retail at best or just a surface lot that sees minimal overhead but a lot of upside for the absentee owner.

Deferring taxes until death or home sale seems like it would work better. Now, you just have a system where the newest members of a neighborhood pay way more for services than extant members of the neighborhood.

Deferring taxes does nothing to prevent wasteful over spending by local governments. For all of its faults, Prop 13 was effective in capping spending.

Well sure but its basically a system where you massivly, massivly benefit people already have property, and literally take a huge shit on everybody else.

Its basically a "lets give property owners billion and billions in subsidies" and make everybody else pay.

Seattle keeps raising property taxes in order to reduce the housing shortage.

My property taxes have gone down for the last few years, probably because King County has moved the equation to taxing land more than structures (and I live in a town home on a small piece of land).

Not to mention that construction has seen little gains in productivity over the past few decades resulting in the Baumol effect in the industry. There's little reason that constructing new housing cannot be automated to the degree that car construction is automated, but a variety of regulatory hurdles and little foreign competition makes building construction prices rise steadily. We need a well-funded startup to pull an Uber and indiscriminately sidestep regulation to disrupt the real estate market.

So if we are happy with criminality to “sidestep regulation” how would you feel about squatting vacant homes?

Netherlands had this problem in the 60s and the solution came in the form of a squatting movement.

I feel in the US people are ok with corporations committing crimes but not humans. Weird seeing as the humans are the ones without a home and the corporations are just trying to get rich.

https://en.m.wikipedia.org/wiki/Squatting_in_the_Netherlands

> So if we are happy with criminality to “sidestep regulation” how would you feel about squatting vacant homes?

That already happens in the states. Sometimes, you just need to go on vacation for a couple of weeks and come back to find your home squatted with a fake lease drawn up in crayon to throw you into a civil legal process. You can find tutorials online.

So would you endorse it legally? It was the solution to the crisis in Netherlands. You used to tell the local police station that you were occupying the house.

Empty units stopped being a thing.

It does happen without legal recourse. Since the USA doesn't have a registered lease system (no registration, police don't care), anyone can take property and claim it is theirs, and live there while the courts sort it out. This includes just going on vacation for a couple of weeks.

It isn't a solution to anyone's problems except maybe as a way to live free while doing lots of drugs.

It’s not protected at all though, we both know that.

I'm not sure what you mean by protected. A squatters life is to find one squat, wait until the courts/police kick them out, and then find the next one...wash rinse and repeat. It isn't a great life, but people do it, which sucks if they happen to choose your house.

So, some countries have protections for squatting.

Squatting is legal.

In the USA property rights are very strong. Read the article I posted earlier. Basically in Amsterdam a lot of companies were colluding to keep apartments empty which inflated the price. In response people were legally allowed to squat the apartments provided they were unoccupied.

This fixes the problem of empty apartments.

Comparing the rights of squatters in the USA to the rights of squatters in other countries is a non-starter. I'm saying if citizens in the USA had the same rights to squat as they had in the Netherlands in the 70's and 80's the problem would be fixed.

> We need a well-funded startup to pull an Uber and indiscriminately sidestep regulation to disrupt the real estate market.

Whether or not this would be to the public benefit in terms of automation, this is exactly what's happening here but with pricing. The law forbids price fixing, but courts are tech-dumb and so long as you pass your price fixing through an algorithm you've got decent shruggability on any claims made.

They are only able to do this price fixing because of the scarcity of housing right now. If much more housing is built, prices will drop.

I don't think this is true - for one, housing in the US isn't all that scarce (~14M vacant units) [1], and housing doesn't behave like most markets vis a vis supply / demand - there are too many confounding factors and it's not exactly a liquid market.

This would also make sense given that this algorithmic pricing platform is used by so many clients. If just enough real estate firms can maximize their profits in this way, they can afford to buy out anyone who might compete on price.

1 - https://fred.stlouisfed.org/series/EVACANTUSQ176N

I'd be curious to see where these 14 million vacant units are located. It's quite likely that the majority of them would be located in places where people do not want to live.

Right, but that's part of the problem - just being able to build more houses isn't going to solve problems for, say, NY or LA where it's not an issue of how many units but an issue of pricing

> There's little reason that constructing new housing cannot be automated to the degree that car construction is automated

What experience do you have that you would be able to make a lofty claim like this?

Are the people working at DR Horton and Lennar and the like missing something obvious? I figure businesses that construct and sell tens of thousands of homes in a year are at the bleeding edge of figuring out how to most efficiently construct a house.

People like custom built homes.

There's an old housing development nearby, perhaps constructed in the 1940s. There were two basic plans, along with mirror images of the plans. You have to look closely to see this, because over the decades the houses have been extensively remodeled and improved with things like garages, extensions, etc.

I live in a neighborhood like this. Our house was built in 1947 and the other original houses are either the same or a simple variation. Of course, most of the original houses on the street have been torn down for large, mostly unique houses.

One can observe the increase in quality and variety of prefab and manufactured homes, which fully take advantage of new manufacturing efficiency advances, while also observing assorted regulations that make building such housing infeasible in many parts of the US.

What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim.

>What's you're special experience that makes you so confident this is not the case? Seems like a pretty extraordinary claim.

The comment I responded to was edited to include the component about regulations being the problem. Obviously, the parameters within which to construct a house includes regulations, so my experience that automating home construction is not cost efficient yet is the fact that the largest and most successful home builders do not use those techniques. Aka reality.

Whether or not regulations are appropriate or not is a separate discussion, but in my experience, most are good other than the ones that forbid the type of housing being built (such as higher density), or excessive setbacks that waste land.

Edit: never mind, the comment I replied to was not edited, I just didn’t read it thoroughly. My bad!

I replied to you before the parent was edited.

I think we are pretty on the same page regarding regulations. Safety is important. But forbidding density via setbacks, parking minimums, and certain types of housing is what bites us. And there are some regulations enacted in the name of.safety, which create nonstandard requirements where a prefab home factory must either special case that one state/locality, or forbid selling there.

As an example, any factory-manufactured home sold in California must have a sprinkler system. Sprinkler systems are expensive, and while they're very valuable in large shared buildings, I question whether they are necessary to mandate in single family homes.

Of course this isn't targeted at manufactured homes; California mandates this in every new house.

But this fragments the manufacturing of homes and causes issues with getting the efficiencies you would expect from a factory. Multiple SKUs need to be built.

> There's little reason that constructing new housing cannot be automated to the degree that car construction is automated

I strongly disagree with this. I watch several general contractors on Youtube. They come across as smart, educated individuals. They frequently talk about the things they do to save time or optimize. Yet, it's obvious that huge portions of their job still involve on the fly decision making.

You might be able to automate this, but it'd come with incredible upfront costs to de-risk and plan every detail. Factory based manufacturing largely doesn't have to deal with this since the environment is so highly controlled. Further, automated manufacturing puts significant time ahead of production building draft parts.

Maybe I need more coffee, but I can't tell if this is satire or not.

A comment doesn't conform to my worldview, so it has to be satire, right? Your solution is what? More government?

Totally wrong. Infrastructure was not designed for population 30-50 years ago. The opposite, to much bad infrastructure was built for to few people.

There are lots of town the same amount of people but about 5x more infrastructure per person.

Even the places with growth have massivly overbuilt infrastructure. And low value housing ever further out is just not helping because the housing + transport cost equation doesn't add up for people.

Its simply bad infrastructure, badly planned with a totally disfunctional insentive structure.

The infrastructre isnt actually supported by the local taxes and raising taxes can often even in the best case only cover maintenance at best.

Look at the data from Stong Towns or Urban 3. If R1 zoneing (single family homes) is 80% of you land and each on is losing money from a tax perspective, its not suprising.

You have medium sized cities that have to maintaine roads that can reach half way accross the country. Indianapolis has to maintaine a road that reaches from it to Alaska.

Lots of good infrastructure like trains and walkable neiberhoods were systematically destroyed and replaced with less efficent infrastructure.

Any county with a great inner city somewhere is profiting massivly and that city is paying for all the infrastructure around it.

Even delapidated inner cities are better from a a tax efficency point of view then single family homes or a wallmarkt.

The poor neiberhoods are overtaxed and the richer ones are undertaxed by a large margin. Even if you assume the poor get the full service they should have, and they often don't.

But im sure the solution is to make the highway threw Austin wider ...

> And then the increase in local taxes to try to compensate for the mass costs, and hurting the current tax base, is a major issue.

My favorite is when jurisdictions let people past a certain age freeze the property tax rate at a certain point. Of course, these were the same people who:

1) campaigned against any and all housing that would disrupt the "charm" of the area

2) insisted on a 3/2 single-family home on a significant fraction of an acre

3) insisted that said home be miles away from the city center, requiring lots of infrastructure while simultaneously reducing the population density that would pay for said infrastructure

4) did nothing to shore up the budgets at the local, state, and national level over the last 30 years

Are you under the impression that only people who fall into one of those four categories age?

This is a list of things that a generation by-and-large did, not a list of categories.

And don't forget stagnant wages, forcing desperate sales to those with capital in the bank go acquire property, and then rent it back for even more money....

> …forcing desperate sales

Are you referring to single or multifamily property?

Either way, demand is strong and prices are high. Sellers still have a lot of power in this market and I haven’t really seen examples of anyone selling a property being taken advantage of.

Price fixing and no penalty for leaving units vacant.

question: how can a municipality determine if a unit is vacant?

On the other hand, the main reason the landlords using RealPage were not raising rent, seemingly, when they could, was vibes.

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