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Comment by Ccecil | Hacker News Reader

From what I have seen there isn't a housing shortage as much as an "affordable housing" shortage.

Just my observation. Tons of overpriced apartments being built at 2x the price of the average renter.

Housing subsidies will be next. Another attempt to prop up the rampant capitalism by means of socialism.

The issue is skewed supply and demand. If it’s profitable to buy housing as an investment, lower to middle class folk can’t compete with the upper class and businesses in the purchasing power, no matter how much housing gets build. I’m not sure whether there’s a good solution to this problem.

There is. Progressive taxation. Your first purchase is tax free. Second is a percentage and the more you accumulate the higher the percentage.

I'm trying to see how this would work. Would this be single family homes only? Duplexes and triplexes? Apartments/condos?

It doesn't matter, any residential property.

If I build a 40-unit apartment building (provides housing for 36 families on average), am I taxed as if that’s 40 residential properties? Do we want to use tax policy to punish this construction?

No punish people buying multiple properties as "investments".

Tax the purchase not the construction.

If I build a 40 unit building and sell it to my wife (or my neighbor) or sell it to BlackRock, there’s no difference in how many units exist nor how many families can live there. My tax treatment should be the same as theirs.

If you restrict or punish the purchase of housing via tax policy, you simultaneously restrict the sale of it by original constructors, which serves as an impediment to that original construction.

Here in Norway they've tried to curb this somewhat by eliminating the wealth tax value discount you get on secondary homes. Your primary gets a 75% discount up to $1mill, then 30% on anything above $1mill, while secondaries count in full. So it's much less favorable to own multiple homes now as an investment.

Of course, most of those who did own extra homes as an investment rented them out as well, so rental prices here has gone through the roof as landlords and common folk with an extra apartment or two has sold the homes.

It's profitable for investment because of low supply.

I need to dig out the link, but there is a Study from Finland that shows this is incorrect:

As housing stock quality improves, everyone upgrades. Which leaves room at the bottom level to get on the ladder into lower quality cheaper housing.

Also supply and demand: if prices are increasing it is mostly because supply is not keeping up with demand.

Lastly, like all other products in a market, we should see a general improvement in quality, this isn't a bad thing (think how cars how 10x more reliable, comfortable and fuel efficient than they used to be).

I'd be interested in that study, because that doesn't match what I'm seeing on coastal US cities.

https://youtu.be/uuCuTThT_Tw

https://www.planetizen.com/news/2021/09/114685-study-market-...

Various studies have found that even building expensive housing reduces rents for the entire market as it pushes people with more money into the new housing and reduces upward price pressure on older housing. Yes, it'd be good to build housing of all types. But even just building luxury apartments or whatever has an effect.

> From what I have seen there isn't a housing shortage as much as an "affordable housing" shortage.

It's generally much more illegal to build cheap housing, both in the direct sense that building codes require all new housing to be built to extremely high standards, and the indirect sense that in places without by-right development (which is most desirable cities sadly) your neighbours are going to fight a lot more against cheap houses getting built than they'll fight against expensive houses getting built.

> Housing subsidies will be next. Another attempt to prop up the rampant capitalism by means of socialism.

Already been happening for years.

Not really talking about new builds.

Where I live the majority of affordable housing has been bought up and turned into investment rentals or vacation rentals. They will leave the houses empty instead of lowering rent.

Current average rental cost is 3x what the average renter makes. More apartments are being built (very cheap, inefficient designs) but the cost is still above what the average renter makes.

Collusion is a bigger issue than new builds.

Prices only keep going up as long as there's an expectation of future profits. Everyone loves to hate investors (especially foreign ones), but cornering the market only works if it's impossible for other people to build new houses.

I share your frustration with only overpriced, luxury housing being built. However, I think you are misattributing the blame here. The reason why only expensive luxury housing gets built in so many areas is almost always because the local government only allows developers to build luxury apartments. If housing construction was deregulated, then actual rampant capitalism would see profit in building affordable housing and then build affordable housing. Take a look at things like ibuprofen. Ibuprofen is a pretty awesome medicine, but it isn't only for rich people now. It is very cheap and affordable. Same with cell phones.

Not talking about luxury. It is about raising prices on what was affordable 5 years ago. Companies/Corporations purchasing the rentals in the area and doubling the rent because a website told them they should.

Just my observations from my area.

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