Hacker News Reader

Comment by littlestymaar | Hacker News Reader

> Excessive regulation is 90% of it.

If it was, then the housing price would be correlated with the level of regulation, but it's not (housing less dense places is always cheaper than housing in big cities, even if you compare the most heavily regulated place on earth with the least regulated big city in the world.

> Here's how a rational market works.

A rational market made from human is as realistic as “dry water”.

The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.

View on HN

> The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.

I like your thesis, but can you give more information on the nature of the policies that drive the housing market in the manner you describe, but which aren't just "regulation" that makes it directly harder (e.g. you can't build housing in this zone) or more expensive (e.g. minimum plot sizes, parking requirements, building codes)?

Interest rates is the biggest one, but also most fiscal policies related to housing (fiscal exemptions on the revenues coming from rents, the possibility for an individual to deduce the interests of their mortgage from their income taxes, or the absence of taxes on the benefits you make from selling a house).

There are as many such policies as there are countries so not all the above examples necessarily exist in your country (my country — France — having the first and the last one above but not the one about mortgage interests for instance) but they all share the same underlying world model of housing being an “asset you invest on” instead of the “commodity that slowly but surely loses value over time” it really is.

No. The key issue is just the rise and rise of inequality. As more money funnels to the top (thanks covid) the top buy more of the available assets leading to asset inflation.

Nothing will reverse this other than a tax on wealth. Tax wealth, not income.

This is way too narrow of an explanation.

Yes rising inequalities are a problem, but the housing price being absurdly high is a much broader problem: when a middle class family spends $500k+ for a house, they are part of the systemic problem. Same when the same family expects such a sum when selling the old house they inherited from their boomer parents.

Reply on news.ycombinator.com