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Comment by mrktf | Hacker News Reader

That is broader problem to solve, not taking account any civil infrastructure the houses will be bought by corporate rent company and renters will be charged "fair price" - pretty same as now (not long ago the was article with discussion about rent price fixing https://news.ycombinator.com/item?id=39575803 )

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Well, as long as builders aren’t colluding to fix supply, it doesn’t matter.

Corporations can buy up all they want… but idle units are unprofitable. Between property taxes, borrowing costs and maintenance (which accrues whether units are empty or not), units need revenue or they are a drag on profits. Cartels fall apart very rapidly under these conditions.

Right now demand outstrips supply by a wide margin. This makes it profitable to buy and rent it out. Build enough housing to put some slack in the market and that equation will rapidly reverse.

TL;DR corporate ownership is a symptom, not a cause of housing supply issues.

More supply often helps that problem too. It's easier to engage in price-fixing when there are only a few items of supply that are controlled by only a few. Once there are more options, it's much harder to obtain or maintain monopoly control. It's also much harder to hide illegal price-fixing schemes when you need to have tens of thousands of co-conspirators.

The root cause is the state or local govt preventing new housing. If there were enough housing, rent fixing wouldn't even make a dent.

Then why are rents going up drastically all over texas, even in small towns where damn near anything can be built?

Sigh, it is always supply and demand. If demand is higher than supply, prices rise.

It is a universal law of economics that people pretend doesn't apply to housing.

In these towns, do you have evidence demand is stable and yet prices rise?

https://scott-wiener.medium.com/yes-supply-demand-apply-to-h...

Adam Smith would disagree.

Thanks for posting relevant data. I have changed my stance entirely.

I would expect that someone discussing this topic would be familiar with the various things Adam Smith and others have said about collusion to increase prices and related topics.

Some/much of this may be just inflation and the devaluing of the dollar.

Never mind the small towns. Houston has no zoning laws at all, yet:

https://www.houstonpublicmedia.org/articles/housing/2023/07/...

Houston has covenants which basically pick up the role of zoning laws. Famously they have massive parking minimums which prevents densifying.

IIRC Houston does not have zoning in direct sense of the word, but has a set of regulations and restrictions (e.g. on height, setbacks, parking minimums, lot sizes, etc.) that still drastically limits options for buildings.

That may be one cause, in some towns and cities, but it is far from universal. For one thing, demand growth has accelerated in many places, so building homes at a historic rate went from sufficient to meet to demand, to insufficient. You have flippers taking low-priced homes off the market, and you have AirBnb'ers taking other homes off the market (or not selling theirs when they move). There are higher expectations of what a house should contain (sq ft, # of bathrooms, closet/garage size, quality of fixtures) so lots of housing stock technically exists but is not really part of the supply for most buyers.

> but it is far from universal

None of what you said contradicts that. Supply is always measured relative to demand.

You wrote: "The root cause is the state or local govt preventing new housing."

And I'm saying supply and demand can get out of whack for reasons that have nothing to do with the government, they can even get misaligned under pro-growth policies.

The root cause is that houses are built for decades. It's impossible to plan ahead at this timescale. The alternative is to make standard places for stackable houses, with flexible infrastructure (electricity, water, sewer, road, parking space) to fulfil demand in days, instead of decades.

Yeah, capital accumulation is an inherent quality of capitalism, and accumulated capital then controls the state making so-called regulation impossible. It's only a matter of time.

Only in certain regimes, like when labor competition is high.

The challenge is houses are the product of both capital and labor, so even if real capital returns are negative, you get stuck with high prices for construction.

Nonsense. Capital simply regulates labor competition to be low. Whether it's by increasing migration of cheap labor, policing worker organizing, company towns, regressive taxes, or many other strategies. There was one single period in history when this changed for a brief moment and capital learned its lesson to always use its power to keep the workers down. It has done so ever since.

I think it is more accurate to say that there is simply a larger supply of labor than demand for much of history, resulting in relatively lower wages, and favoring capital holders.

You see much higher wages in sectors where demand for workers outstrips supply. AI architects and neurosurgeons don't need labor organization to capture high salaries.

Also nonsense, but irrelevant regardless.

By exactly your logic, technology has always increasingly displaced demand for labor. This isn't new at all. So-called "reskilling" is always outsourced to the responsibility of labor. The professions you describe are regulated into scarcity on an ongoing basis by capital. Any exception to this rule is simply that. In the aggregate, capital accumulates.

I dont understand your objection. Are you saying that captital regulates AI scientists and Surgeons into scarcity, and that by doing so, they make more profit than if they payed lower salary to those professions?

For AI scientist, the data is not in and it's all financial speculation so a different conversation.

For surgeons, yes. The American medial industry is uniquely exploitative so invests a tremendous amount of capital in backing up its claims of prividing the "best" medical care (only for wealthy people). Of course, the American Medical Association and American Association of Physicians play their parts in contributing to the scarcity by lobbying for extremely expensive education requirements that can only be afforded by those with inherited wealth (with a few exceptions only via charity).

Just as the feudalist aristocracies, the capitalist bourgeoise pull up the ladders behind them. It only works when capital has an incentive. In the case of a few American industries like medical, those incentives are especially strong. However, such incentives do not exist in almost any other country, and salaries reflect this.

For Surgeons, you are conflating and blaming the actions of labor and the actions of capitalists.

I the AMA and AAP driving up is labor driving up costs in its own interest. Same as any other workers association or union working to restrict supply. Capitalists (e.g. hospital owners), have an incentive for lower salaries.

Similarly, its not the owners of salons that pushes things like 1,000 hours of training required for a barber.

Just because it is anti-consumer, doesn't make the person behind it a capitalist. My fundamental point however is independent of the reason for scarcity, but that labor scarcity itself is what drive high salary for those roles, and an oversupply of qualified workers drive down supply in other roles.

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