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Comment by jobs_throwaway | Hacker News Reader

> Rents jumped 30.4% nationwide between 2019 and 2023

I don't understand how this isn't a major national emergency. The fact that your average voter cares more about, say, immigration, than this problem is absolutely ludicrous

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It is a major national emergency, but average voters don't care about it, because almost no politician is willing to address it -- there's no one to vote for, who would try to fix it.

Even politicians who are struggling with this specific issue themselves refuse to address it. (Members of Congress struggling to afford to maintain housing on $174k salaries, would rather petition for more money, than to make housing more affordable)

Old voters vote for old politicians who represent old voter interests. Old voters don’t care about rent, most of them own their home.

https://old.reddit.com/r/dataisbeautiful/comments/126b90d/oc...

https://news.ycombinator.com/item?id=40338619

https://www.ted.com/talks/scott_galloway_how_the_us_is_destr...

It's 18 minutes and 37 seconds of your time. I encourage you to watch it. The answer to the question Professor Galloway asks (I won't spoil it) is a resounding "no", based on policy decisions being made.

https://www.pewresearch.org/short-reads/2023/01/30/house-get...

> The median age of voting House lawmakers is 57.9 years, down from 58.9 in the 117th Congress (2021-22), 58.0 in the 116th (2019-20) and 58.4 in the 115th (2017-18). The new Senate’s median age, on the other hand, is 65.3 years, up from 64.8 in the 117th Congress, 63.6 in the 116th and 62.4 in the 115th.

So we are left with https://en.wikipedia.org/wiki/Planck%27s_principle#Formulati... and whatever window of time that looks like. 1.8M voters over the age of 55 age out every year, extrapolate accordingly to predict progress trajectory.

Very good read (I read the transcript rather than watch)

> 60 percent of the cost of building a home goes to permits

Is an incredible indictment of our system

That seems exceptionally high, and maybe true in some areas, but in others a "total home" permit is a flat fee on the final price, and that flat fee isn't 60%.

I think Galloway missed the mark on new housing construction (he's right wrt supply, but falls short wrt causes, from my quick review of the talk he may have been scoping to Vancouver BC specifically), there is a ton of nuance. It is a combination of permitting, zoning ("NIMBY/YIMBY" here fore brevity), cost of capital, and builders incentivized to deliver supply only so quickly.

https://www.housingwire.com/articles/builders-are-pulling-ba...

https://www.morningstar.com/news/marketwatch/20240508284/hom...

https://www.reuters.com/business/us-homebuilder-lennar-beats...

https://www.dallasnews.com/business/real-estate/2024/04/18/t...

There's only so much the executive branch can do on its own to fix this. This is a macro systems problem, and will take time and effort to fix.

https://www.whitehouse.gov/briefing-room/statements-releases...

Part of it is also that trying to solve local problems at the federal level can often just result in more insanity.

Around here from empty lot to built house is about 6 months, and that's within an hour of a major airport.

However, the builders are taking relatively little risk on each house/development, because if it falls through (unlikely) they're only out one house, and might lose a small amount or just hold the land and wait.

When the only developments you can do are multi-million, the risks now rise.

A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die and a new generation grows up that is familiar with it ...

An important scientific innovation rarely makes its way by gradually winning over and converting its opponents: it rarely happens that Saul becomes Paul. What does happen is that its opponents gradually die out, and that the growing generation is familiarized with the ideas from the beginning: another instance of the fact that the future lies with the youth.

— Max Planck, Scientific autobiography, 1950

That assumes no replenishment or preservation efforts of the “old” idea.

Never mind that it is a bad proposal to wait people out and hope they don’t notice or act out of self-preservation.

It's an observation, not an proposal. And its are worrisome one if true, because the young people are constantly exposed to quiet extreme opinions, lies and outrage influencers etc.

I.e. we've got people unironically saying they'd rather have their kids encounter a brown bear in the woods then an unknown man. That's how delusional people are becoming.

If the observation holds true, then the next 60+ years are basically locked into getting extremely bad...

Most of all voters own their house - 65% of households occupy their own property. [1]

1. https://fred.stlouisfed.org/series/RHORUSQ156N

Homeowners still make up the majority of voters by a pretty significant margin [0]. And one could argue that immigration is related, which is a serious problem in Canada, whereas there are much better solutions than curbing immigration in the US (increasing supply).

[0] https://www.statista.com/statistics/184902/homeownership-rat....

The "average" person that votes for national politicians (specifically those from swing states) are likely not being impacted by higher rents.

In fact, a significant majority of the voters (and non voters by not voting) themselves are likely responsible for voting for local government leaders that intentionally reduce supply of housing.

The root cause being that once someone is on track to owning property or already owns property, they are then incentivized to not want those below them on the socioeconomic ladder near them.

In the UK, hilariously we've gone the other way by ramping up regulations on landlords to the extent that tons are simply exiting the market.

To name a few: making evictions much harder; changing tax law so that mortgage interest isn't fully allowable; aggressive energy efficiency requirements that I don't even see as worth it as an owner occupier; HMO regulations preventing students etc sharing a house; the list goes on.

All of this at a time in which mortgage interest rates (generally only fixed for a few years in the UK) have quadrupled and net immigration is going gangbusters.

There is a pervasive mindset that landlords should be "punished". Well, they have been, and the result is that they're leaving the market - if you can't afford to buy, you're now competing against far more people in a supply restricted market.

Poverty mindset at its' finest.

California is similar. Its progressive caucus does everything possible to make it risky and expensive to be a landlord, then acts puzzled when rents go up and tenants have a hard time finding a place.

Yea, they're disincentivizing the wrong thing. It should be difficult and expensive to own multiple properties, regardless of whether or not you are renting them out. And it should be progressively (quadratically) more difficult and expensive to own the next property, the more properties you already own. That's the evil here: Single entities owning hundreds of properties for the purpose of value extraction rather than to live in.

You're falling into the same trap. Doing that would mean indirectly that renting out properties should be disincentivised.

Do that and the market price for rentals will increase as no-one wants to do it. The only rentals on the market will then be people who temporarily move, until they sell up, but even that will dry up as they won't be able to find anywhere to rent on the other side.

You don't want a world in which renting is twice (or more) as expensive as buying.

We should disincentivize landlording and renting by both 1. making it harder to landlord and 2. reducing/eliminating the barriers that drive people to rent: home prices, down payments, closing costs and fees, the real estate market itself being illiquid, the variable nature of home-related expenses.

If it was as easy and cheap to own as it is to rent, and if homeowners weren't so locked into their owned homes, then there would be little reason to rent.

That's not a world I want to live in as it would have made it impossible for me to study at University, impossible for me to start my career, impossible for me to leave my hometown, and many other things.

I think you're blinded by hate for wealth.

shit take. The transaction costs in the housing market alone are reason enough to rent if you have no plans to stay long term.

It is not evil to own even hundreds of properties for the purpose of renting them out at market rates. It is a good that should be celebrated.

They are related, millions of more unplanned civilians dramatically increases rent and reduces supply. At least that has been the case in Canada.

How do immigrants reduce supply? They're destroying homes when they get here?

edit: why am I being downvoted for pointing out a flaw in the premise I'm responding to?

More likely building them. It's zoning policy that makes sure those homes are overpriced, oversized, and out of reach of most people looking to transition into home ownership.

Higher demand leads to higher prices and doesn't lead to anything become net-net cheaper. That's a supply-side thing entirely and usually requires a massive regulatory or technological change.

Super high gasoline production today doesn't change the fact that it was so cheap in the past they would burn it off to get rid of it.

Supply of available places to rent…

> why am I being downvoted for pointing out a flaw in the premise I'm responding to?

This is not a good look for HN, but that's what you get in just about any discussion of economics on here. You're 100% correct, and the post you're responding to makes a statement that's at odds with everything we know about economics, with no elaboration.

Immigrants increase demand which has similar effects to reducing supply but is not the same thing, OP is imprecise.

In a "increase relative supply" there could be an argument about reducing demand to do so.

HN has a predominantly progressive audience that tends to view perspectives challenging their idealistic vision as misguided or offensive. When faced with specific, pointed issues that their position may not adequately address, some users feel compelled to downvote or suppress these viewpoints rather than engaging in constructive dialogue to find solutions. They seem to struggle with the notion of not having all the answers. Even expressing this sentiment sounds hyperbolic, but the evidence appears quite clear when observing discussions here and elsewhere online.

From the rules: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith. "

The OP meant "available supply" or "relative supply". Assuming they meant "absolute supply" feels like it fails this rule on your part.

So if I say "supply" when I mean "demand", everyone should just disregard what I actually said and assume I actually know what I'm talking about? Words matter

The wording is imprecise. They meant, immigrants live somewhere, so there wind up being fewer places in the available supply.

You're being downvoted for being so quick to jump on an apparent flaw, without seeming to have made much of an attempt to understand the actual point. HN is a place for thoughtful discussion, not "You worded it wrong! Gotcha!"

(I know, I'm supposed to choose to interpret your position charitably, too. I leave open the possibility that you truly didn't see their point. But I found the GP's actual point really obvious, despite the imprecise wording, so I'm really having to struggle to do so...)

the wording is important! We're talking an issue of economics, so when we say supply when we really mean demand, that deserves to be corrected. Fixing a supply issue looks very different from fixing a demand issue. I thought maybe OP had some reasoning as to how he meant what he said, which is why I asked the question

Thoughtful discussion =/= pointing out flawed premises

It's not a flawed premise! It's bad wording.

The premise is, given an inelastic supply of housing, more immigrants means more of the supply occupied by them, leaving less of the supply available for non-immigrants. Point out a flaw in that, if you see one.

> millions of more unplanned civilians dramatically increases rent and reduces supply. At least that has been the case in Canada.

Why are the civilians unplanned? Is Canada planning for zero population growth, or otherwise, what went wrong with their planning?

This covers it:

https://www.cbc.ca/amp/1.7080376

Weird—they set immigration levels years in advance, and never plan for "where are those people going to live?"

> Immigration accounts for nearly all population growth in Canada

Imagine if people started having kids again! Where would anyone live?!

It's honestly somewhat terrifying to see skyscrapers flying up in my neighborhood. You'd think I'd be delighted, increased supply should decrease prices, right? Only, my kid is having a terrible time in school in large part because the student:teacher, and student:classroom ratios have been flying up as well. For all the dozens of luxury condo towers we're building, we are not building out commensurate services for the kids who will inevitably occupy those towers.

Many years ago, my dad worked down in Dallas. And there were so many people moving there, that schools had classrooms in trailers while they built new, larger schools. And then when those larger schools were completed, so many people had kept moving that they still had classrooms in trailers. I don’t fully understand why planning for growth is so hard. I believe that it is, I just don’t get it.

demographics. 1/3 of households rent. 2/3 of people under 35 rent.

https://ipropertymanagement.com/research/renters-vs-homeowne...

This is a complete misunderstanding of supply and demand. Immigration reduces the housing supply which causes rents to jump.

how does immigration reduce housing supply? Say a country has 10 homes and 10 citizens. Then 2 people immigrate there. How has supply decreased?

Provided 10 citizens occupied all 10 houses the supply was 0 and remained 0 so it could not decrease even more since there is no negative supply. But if any of the houses had been for rent then immigrants moving into them decreased the supply of houses for rent, pretty straightforward.

Supply = number of units being rented or available for rent. Demand = number of people trying to rent. Youve got supply and demand backwards.

No, supply in this case is the number of units available for rent, units being rented are unavailable on the market. Same as real estate market, when they talk about housing supply they don't count houses that are already sold.

In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual. https://en.wikipedia.org/wiki/Supply_(economics)

The powers that be would rather you quibble over inconsequential immigration than notice the other hand reaching into your wallet. It’s just that simple.

> powers that be would rather you quibble over inconsequential immigration

Those powers being two thirds of Americans [1]. (And a greater fraction of voters [2].)

It's tempting to blame a conspiracy. But at least the housing cost side of the equation is quite obviously a policy choice in much of the country.

[1] https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...

[2] https://www.route-fifty.com/management/2022/08/problem-homeo...

Why are you citing homeownership stats? I saw fox news on tv in public recently. The headline cited “millions of migrants overwhelming border.” These are the powers that be who I am referring to. The powers who craft those unhinged headlines and also stand to benefit in some way by entrenching those headlines into the formative minds of their dedicated political base.

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