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Comment by WarmWash | Hacker News Reader

The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out.

Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...

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In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset.

But the current housing market doesn't feel sustainable. I don't understand how a proper middle class family could afford to buy in this environment, unless they are willing to put off any savings indefinitely.

covid was the largest money printing and wealth transfer event in history. When rich people get money they buy assets. We have had extreme asset inflation since then. Metals, equities, real estate etc. Watch Gary's Economics on youtube.

We get out of it by building more, read Abundance by Ezra Klein and Derek Thompson.

Its extremely simple.

There is one hackish solution though. Unilaterally implode the real estate prices worldwide. People were so busy stealing covid money that they simply dumped the loot into real estate. This will not trickle it down (nothing ever trickles down), but at least would evaporate it.

It is very simple. Housing is not built.

This is at least 80% of the problem. The system is behaving exactly as you'd expect it to with even an Econ 102-level understanding. New supply isn't being built, or is being severely hamstrung, and more people want the supply and are willing to sacrifice (often too much) to get it. Add in rent-seeking behavior, both figuratively and literally, and prices quickly double in even mediocre areas with minimal long-term prospects for growth.

Relaxed zoning requirements for SFH and MFH buildings, relaxed or eliminated height restrictions for high rise density projects in urban areas, eliminating rent control, and a laundry list of other things would help alleviate the upward pressure.

Even if new stock were built, new homes in Houston start around $300k for a 3/2 configuration, but those are bought up nearly instantly because not many are built, and the remaining stock are $400-700k.

I grew up with 6 family members in a 3/2 house that was 1250sqft. Houses today start at 2000+ square feet in the USA. We DON'T need that. On top of that, there is very limited stock of homes for people who no longer have kids.

Every type of manufacturing in the US has gone toward lower throughput, higher price. Luxury apartments, 2500 square foot houses with no yard, $50k for a car. And it is because we are all comparing ourselves to each other and wanting to appear like we can afford this lifestyle, and its finally breaking. But it was allowed to go this way, because it was working. Pricing out the bottom 25% didn't negatively affect the profitability of the companies making these items, in fact, it made them more profit.

The answer is still build more (which you basically admit yourself in your first sentence).

Homes skew larger and more expensive precisely because it's so hard to build them so developers need to make more money from each one. The fixed costs per unit are too high, so the ones that need to be lowered or eliminated should be. That will incentive building more units not just more expensive units. You'd see a lot more 1200sqft new builds if it was more economically viable and developers could make a profit on a $125k home instead of needing $400k.

> You'd see a lot more 1200sqft new builds if it was more economically viable and developers could make a profit on a $125k home instead of needing $400k.

You do see them, but they are factory built. I could have a $75k manufactured home dropped onto a $20k slab, with $15k utility hookup, and have 3 beds and 2 baths and 1200sqft. It is viable outside of HOAs and "master planned communities" but it is hard to find places in the US that allow this in a "desirable" area.

I agree we need more, but we need smaller too. My parents right now have a 3600 sqft house they will die in, and can't maintain because they are in/approaching their 70s. They built it in 2008 for around $190k when there were still 2 kids at home, my grandmother still lived there, and my sister had a baby on the way.

Now their home is valued at $750k according to the county (after fighting and revising it down from $800k), and if it weren't for all the homestead exemptions and senior rates and whatever other tax breaks they were given, their property taxes would be over $25k/yr.

They've actually tried to sell it a number of times, but 0 bites even discounting it down to $500k, because the town they are in has no comps (single level 4 bed, 4bath on 3 acres).

Build Moar seems to be too simplistic. There's just too much demand and too much investment capital seeking profit. No matter how much you build, most of the housing supply is going to get sponged up by investors, landlords, and private equity, and the price isn't going to go down. You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

When investors buy housing they almost always rent it out, increasing the supply of rentals and decreasing rent prices relative to the alternative universe in which no new housing is built.

> most of the housing supply is going to get sponged up by investors, landlords, and private equity

To earn a return through renting or appreciation. If there are more houses than buyers returns drop.

> You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

So do that.

>You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

Not at all. The important thing here is that price is set on the margin. Relatively modest supply increases can have outsized price effects. As an example, consider rents in Austin - something like 30% housing stock increase led to 16% drop in median rent, all while Austin simultaneously had massive in-migration, i.e., rents fell despite demand surging.

As another example of margin behavior: vacancy rates matter a lot, a modest vacancy rate increase can crater rents, which we see in the CRE market.

It's interesting to say something sounds simplistic when your argument is basically "I feel like __________" and in fact the evidence shows exactly the opposite.

Building new housing stock drives down the price of older, more beat up housing. So new housing being more expensive is fine, expected, and helps a ton still.

> And it is because we are all comparing ourselves to each other and wanting to appear

No. No no no! It's because capitalism rations by price and weights by wealth. Once inequality cooks up enough the whims of the wealthy outweigh the needs of the poor.

It is not the strength of those whims that squishes the poor, it is the strength of those whims multiplied by relative wealth that squishes the poor. The whims did not grow out of control. The multiplier did. Extreme inequality is the problem.

Every amount of new housing will be purchased by competitive investors. You are heavily underestimating the amount of money unsophisticated investors have, and the psychological effect of owning more and more of territory. Most people will never say no to owning more money and territory.

Tax homes that aren’t your primary residence to the point where it’s not a good investment.

This never works in real economy with real people. Even in Germany with very rigid address registration laws people invest in real estate like there's no tomorrow.

In other countries with lax address registration laws like Poland, real estate can be the only investment vehicle without capital gains tax. Yes, if you sell real estate in Poland after 5 years you pay zero capital gains tax and anyone can buy (please invest and make that mofo pop). Opposite to every other investment vehicle from bonds to shares to even currencies where the capital gains tax exists.

It's just pure rectified human greed.

In the context of rentals, wouldn't we expect ~100% of private sector rental units to be purchased, owned, and operated by investors?

So what, they will rent it out? If there's a lot of new housing being rented out, it drives down the rental prices, drives down the purchase prices, etc. Any investor that sits on vacant housing is losing money. When there's extreme shortage landlords can do this because the rise in value happens from the shortage and maybe the rents aren't worth it.

The only cure to investors buying housing is to build enough housing to keep it from being a good investment.

You don't tend to see a lot of this in expensive cities - the acquisition cost is too high. Investors tend to buy in lower cost areas.

I think there is another element, private equity (PE) has got involved in the housing market, and like anything that PE gets involved with it burns it to the ground and then exits with it's profit leaving behind a wasteland. PE equity will do anything to get their profit no matter who it hurts

This would not matter if housing could be built.

Yeah I tend to agree with this point. PE is a boggie man for not building enough housing where it matters. In fact if we could build more houses PE could buy it at above market prices all day and builders could boom and eventually rents would drop because PE aren't going to hold empty units because its investiments.

Private equity owns about 500,000 homes nationwide, so like less than a half of a percent.

Anyway they got into the housing market because the margins are so good because everybody refuses to allow new housing to be built. Congratulations, you played yourselves.

> you played yourselves

Owners played non-owners

Does it matter if they only own a small fraction of the homes? There's some studies that show that in markets where institutional investors do buy, prices typically noticeably increase for houses afterwards, even if they only own a tiny fraction of the housing units.

There's plausible argument as to network effects (e.g. my neighbor is charging that much, so why can't I?), as well as changing unit types to rentals, limiting owner-occupied supply and hence driving up prices.

I mean, I imagine it can be kind of similar in the stock market, where that you don't actually need to buy all a company's shares in existence to bid up a stock's price... you only need to buy enough of the available float to raise prices (sometimes which can be <0.5% of shares in existence).

The price of homes has drastically gone up even in some communities around the world where no housing is being built because there is no demand for it; the given region is experiencing severe depopulation as everyone leaves for the faraway big city, except for a few elderly holdouts. Yet owners feel some kind of pressure to keep their asking prices high. To me, that means the situation is far from simple.

Areas even in the USA where housing is not built but people leave and there is low demand are very cheap.

This reductionism doesn't seem useful. The population of people who want to buy homes has not grown in any way that is proportional to the cost of a home.

I've yet to hear anyone say why "build more" isn't a valid answer to lowering the cost of housing. Even if new builds stay at exactly the same price they're at today, the price of older homes will decrease as supply increases.

And I don't just mean in this thread, I mean ever. It's always hand-wavey "it doesn't work like that" when the evidence suggests that it does.

The underlying issue is that converting single-family suburbia to medium-density multifamily ‘ruins the neighborhood’, and cities don’t have the courage to eminent domain homes and replace them with apartment buildings themselves, so they outsource the housing function to the Free* Market, which is most definitely not interested in terminating the SFH market. Between the profitless-ness of apartments for the real estate industry and the use of suburbia zoning to discriminate since the early 20th century (nowadays in the guise of HOAs), the problem to solve isn’t in housing or urban planning, it’s in dethroning capitalism and classism. That’s why no explanation presents itself for why more housing isn’t a good idea: it’s a fine idea, but the U.S. ethos of ‘fuck you, got mine’ takes precedence, and it’s uncouth to say that out loud here.

Commercial new-build apartments happen elsewhere in the world, plenty of them in my city.

And then it’s $2000/m for paper thin wall and cheapest materials possible and has more stringent qualification requirements than a mortgage.

I asked why "build more" isn't a valid answer and your response is that we need to dethrone capitalism and Reddit-tier nonsense about HOAs?

Why is your solution "put 3 families in this single-family home" and not "build more single-family homes?" If the market isn't "interested" in "terminating" single-family homes what makes you think it would be a good thing to do so, other than the fact that it would hurt a cohort of people you seem to hate?

If you got rid of height caps, minimum lot sizes, and loosened zoning capitalist developers you hate so much would jump at the chance to build medium (and even high!) density housing. No need to have the government steal homes from people to do it.

Most U.S. cities cannot sustain purely-capitalist upzoning from low to medium; the profits for developers simply aren’t there, and the elected officials aren’t willing to upset homeowners. Three of the five cities I’ve lived in over the past fifteen years made the changes you describe to single-family zones. Developers largely did not, as you suggest, jump at the chance to build higher density housing. In one case where they did, their bank demanded they as part of the loan terms to set a minimum rent per apartment that was higher than neighboring single family homes, leading to persistently high vacancy rates, nonstop turnover, and a profitless development with 0% ground-level retail rented in the middle of a business-tourism district. So, for most U.S. cities, either they need to step in and commission redevelopment of the single-family homes of their voters, and take the profits or losses themselves on both their accounting books and their election outcomes, or upzoning simply won’t happen at all.

Not that simple. In Australia over the last 10 years, the number of dwellings increased by 19% while the population increased by a smaller 16% [1]. Yet house prices still doubled. This is the same trend that has continued for decades, growth in number of dwellings has tended to outstrip population growth but house prices shot up since 2001 when the tax settings were changed to massively benefit speculation.

We also have a pretty high number of unoccupied dwellings that are left empty, since some investors see the bother of renting them out as not worth the money, since they’ll make so much when they sell that it doesn’t matter!

1. https://australiainstitute.org.au/post/is-population-growth-...

We are talking about America. In your case housing would be even higher if it were not built. People continue to make things more complicated than it is.

Build, and keep building until it is cheap. Also, you would need to consider the specific places.

The claim is that if you increase supply the price will drop. The counter-example is a case where supply was increased and the price doubled. The question is why did that happen?

It very much looks like the "just build" model is insufficient to explain what's happened in that case.

Because demand outran the supply. Prices drop when demand falls below supply. Not when new supply is added.

Diiid you read what they said about Australia?

> the number of dwellings increased by 19% while the population increased by a smaller 16%

That is the opposite of demand outrunning supply.

People/businesses own multiple homes.

Demand for housing increased faster than supply. As people gain wealth they demand more housing, so just looking at population changes doesn’t tell you much about housing demand.

Where is the demand coming from, is what I'm getting at. Because it's not from the population on this case, it would seem.

First, lets remember that housing is extremely inelastic, Demand doesnt need to outstrip supply by very much for people to start bidding up properties and prices to double.

Ive never been to Australia, cant speak to the specific situation there, but where I live it is very common for people to have roommates. Many people even share bedrooms to save money. Post covid labor prices for the lowest paid workers has increased substantially. These low paid workers are the most likely to have roommates/shared rooms, and one of the first things they do when they get more money is move into places of their own. Where I live at least you also see the opposite happening. Since housing supply is legally unable to expand people who previously would be living on their own now often find themselves needing roommates, pushing housing demand down.

There are also many people who want second homes and tons of other ways for housing demand to shift without changing population.

What exactly they build in Australia, livable dwellings? In New Zealand cities they build 5 meters wide, two floor row houses, upstairs and downstairs split into separate apartments 25-30 sqm large. It's an investment token, not a dwelling. Across Europe they build the same housing tokens but buildings have more floors and are from a concrete instead of wood.

The law of supply and demand doesn't go away. If raw population numbers don't support increasing demand, something else does. My first guess would be less people per house, perhaps culturally driven like fewer roommates and families spreading out.

I think you have the hit the nail on the head, if you have unoccupied or a lot of buildings going out of the market at the same or similar rate as new units coming online than you are falling behind. I didn't do the background research on Austrialia but this I think happens a lot in the US we have a bunch of poorly built things that need to be rebuild in 30-50 years so we are not increasing active housing as much as new construction sometimes suggests

You can sprawl further out and you can build infill in sparsely populated areas, but you run up against the reality that desirable areas are going to be expensive because they're desirable, and the cost of demolishing existing multifamily homes to increase density further becomes infeasible in already dense areas.

I bet you actually can find affordable housing in the middle of nowhere / towns where people are actually leaving.

This is not to say there isn't low hanging fruit that market rate housing can help with, and some areas have more room for improvement that way than others, but there's a limit to where that takes you that reveals a deeper problem: we treat housing as an asset that "should" continue to appreciate indefinitely, and we even subsidize people using extensive leveraging to acquire it.

I don't think it's that simple. In my town, we're building like mad (thousands of units) and it is possibly slightly impacting pricing in that the rise is not as meteoric as it was 7 years ago. But new buyers are still priced out. Houses are vacant. There must be other factors.

The cost of land and labor to build a house is relatively the same no matter what house you build. This also applies to apartment buildings.

Fancy it up a bit (mostly nicer appliances) beyond that and you take a $300k house to a $1M house.

Developers make about 20% on the total ( https://www.nahb.org/news-and-economics/press-releases/2025/... ). They'd rather make 20% of $1M than 20% of $300k. Same work crew either way.

Next question then becomes "is it better to sell 3 houses at $1M each ($600k for the developer) out of 10, or all 10 houses at $300k ($600k for the developer)?"

This also applies to apartments. Do you build 200 "luxury" units? or 200 affordable ones?

Yes, great. Now ask the "why" housing is not being built.

And then ask the next "why".

Owners don't want it built. Owners vote. Non-residents (and many renters) don't vote.

Wrong. As an average owner I have 0 pull on the local council that instates building codes.

I'm not sure it is that simple. The housing units per capita numbers on first impression would suggest the number of housing units is keeping up with population growth, raising the question of why that isn't sufficient.

Some quick Googling for number of housing units in the US in 2006 and 2026 says 128 million then and 149 million.

Population then was 299 million and is 334 million now.

That's 16.4% more housing units and 15.4% more population. In terms of housing units per capita that's 0.45 now, and 0.43 in 2006.

Looking farther back it as 0.34 in the 1970 census, 0.39 in the 1980 census, and 0.41 in the 2000 census.

There was a dip from 2008 to 2016 from 0.428 to 0.419 then it resumed going up [1].

[1] https://fred.stlouisfed.org/graph/?g=Mc22

It's not just about sheer numbers but distribution - the areas where they're most needed are the ones that are building the fewest units, exceptions (Seattle, Austin) aside

Also, everyone wants to live in the same dozen places.

>I have yet to read a comprehensive overview of how this happened and how we get out of it

Allow me to introduce you to Bryan Caplan - https://www.amazon.com/dp/1952223415

i would love to hear a YIMBY consider the market forces/how capitalism works and not just reduce it to regulation. aka when it costs over $500k to build a single apartment unit and most of those costs are construction with very little of the regulation burden driving up that cost.

>most of those costs are construction with very little of the regulation

You would be surprised.

If we're talking about home prices why are you talking about apartments? There are a lot of costs associated with apartment buildings that simply don't exist for SFH and MFH builds.

Apartments are a different beast.

Indeed, there's an entirely separate, far more strict building code for apartments than for single-family detached housing.

This was an explicit goal of the designers of the early building code split: make single family homes as cheap as possible, and apartments as expensive as possible.

Permitting admin is part of regulation, which in turn is required for construction.

yeah for sure and i didn't say that isn't a cost. i said it's a small part of the cost, almost negligible compared to the cost to actually build

Is 10% negligible? 20%? How have you quantified this?

> i said it's a small part of the cost, almost negligible compared to the cost to actually build

Actually building is the same as building to regulations. Regulations make it more expensive. You can't just hand-wave separate them.

Ah, yes, that mythical "cost to actually build."

As in, the cost to build things in ways that completely ignore regulations. Regulations about building materials that won't collapse, and won't catch fire, and won't give everyone living there cancer. Regulations about safe electrification; safe, clean, adequate water; wastewater systems that won't drown the lower floors in raw sewage.

Do you know about the Grenfell Tower disaster?

70 people died, 70 more were injured, and hundreds were left without places to live, because the builders didn't think it was important to follow regulations. So they could make an extra buck.

So tell us about what the "cost to actually build" is. Please. Just remember that cost isn't only denominated in dollars and pounds.

idk you definitely need a lot of money to build a building, i didn't realize that was up for debate. also we are not talking about code regulations, we're talking about local regulations

>it costs over $500k to build a single apartment unit and most of those costs are construction with very little of the regulation burden driving up that cost.

What? What?

I dare anyone here who's simping for regulation to try to develop from scratch something that does not benefit from the myriad of exemptions that apply to 1-few family residential development (because there'd be no political will for the racket if the average homeowner was subject to it).

Those $500k costs include $100k of which is engineering for a SWPPP that any sane site planner who doesn't want shit to erode in no time flat would have gotten 95% of the same effect of anyway.

And the dirt work guy's bill includes god knows how many extra hours it takes to get it all spot on to meet the plans. He could've shot from the hip and done the job but there were plans and had to hit them.

And of course the lawyer has to go rounds with the town over what level of maintenance detail needs to be specified in the SWPP.

And of course the rent has to cover the landscaper who comes once a month to mow the ditch grass and stuff because that contract is how they cover their own ass.

The reason every goddamn modern property looks the same with the same shitty corporate bland sidewalks and same planters and same parking lot and entry way with the same five styles of door and the same light level and same everything is because every party involved if formulaically trying to meet the regulations related to their trade as cheaply as possible. And everyone knows this stupid. Every single party in the chain of developing a building from the initial survey to specing the lightbulbs knows they could, without even getting close to underperforming solutions, deliver infinitely more value if they could just exercise their goddamn professional discretion.

The guy delivering a rented trench box to a construction site that's chiseled out of bedrock knows what he's doing is wasteful and stupid just as much as the guy signing the check and the guys wasting their dime dropping it into the trench but hey, the rules are the rules and they're all billing the next guy down the line for it so it all goes on.

it most certainly is not going to cost me $100k in engineering to design a SFH in arguably one of the most regulatory burdened states in the US: vermont

>it most certainly is not going to cost me $100k in engineering to design a SFH in arguably one of the most regulatory burdened states in the US: Vermont

I can do that easily. Give me a ~10ac property where what isn't steep is stream or bog. I want to clear ~1ac total for 5-houses on 2ac each and the road to reach them needs to cross a stream and traverse some bog (read: offsets). The houses will have to be on piles because as expensive as that is that's cheaper than cutting flat land and doing walls or offsets.

surveys and delineation $20,000 bridge $25,000 road and driveway $75,000 stormwater $40,000 Wetlands offsetting $25,000 250 Permitting $140,000 the houses themselves (remember, they're on fancypants piles) $100,000 septics (mounds) and wells $75,000

total: $500k, 100k per house.

You could cut some out by DIYing the actual permitting submissions but even if you don't make costly mistakes in wording and/or detail level there's a lot of value in having your shit cross the government's desks on the letterhead of an engineering firm who's stuff they've approved a million times before.

The developer needs to then build the houses rich af on the inside and generally check every box to sell for enough to cover the costs. This kind of stuff is why so much of the development in Vermont is rich assholes from NYC in brand new million dollar homes on the world's shittiest gravel road with the world's shittiest driveways. Granite countertops and picture windows the size of rail cars are damn near free compared to the cost of putting a shovel in the ground.

i said "a SFH" not a neighborhood development with nice and fake numbers, and a scenario totally disconnected from reality. if costs that much to build in an area that shouldn't have a structure then that's on you.

thankfully we have regulations that disincentive those projects. there are plenty of other spots to build especially in the denser areas

I'm not sure what you're asking for here.

Used to be, the contractor would rent a trenchbox at his discretion. But that means "almost never", because the contractor that doesn't has lower prices than one that does, and just has to pay the occasional OSHA fine. But workers keep dying in trenches, so the government has to step in and make a rule "thou must always use a trenchbox".

We can't go back to "contractor's discretion", because then people die in easily preventable ways. The other alternative is MORE regulation, and the contractor has to do a soil study to know if they're required to use a trenchbox for this particular trench.

Sorry, you think that YIMBYs don't consider this? Perhaps you should follow some YIMBYs!

What does it take to get a more efficient building market? Lots of building, lots of competition in building. Low barriers to new contractors becoming builders, etc.

It's truly only the YIMBYs who ever talk about any of this stuff in my experience.

i never hear YIMBYs talk about this: https://yonahfreemark.com/wp-content/uploads/2019/01/Freemar...

Again, talk to YIMBYs, and you'll get an earful about that paper, about a low-demand market with already affordable housing, that has been generalized to apply to situations that are quite different.

Yonah Freemark has some OK work, and that's a fine piece in isolation, but it's an outlier in the literature but gets trotted out because NIMBYs want to use it to block housing, not because it's a significant piece that applies across the nation.

YIMBYs will point to a chart of new multifamily builds and conveniently not look at the building starts before the regulations were moved and then certainly not think about what was happening in the economy during that time.

a market with regulations: https://fred.stlouisfed.org/series/HOUST

crazy that there were more houses being built pre-GFC when all those burdensome regulations were so suffocating and it never rebounded

Middle class families can, but young families just don't now. Median homebuyer age is now 56, up from 31 decades ago:

https://x.com/heimbergecon/status/1943925791055917417

As for how it all happened, I don't have a comprehensive exploration of this to share, but look at interest rates and house sale prices:

https://fred.stlouisfed.org/series/MORTGAGE30US

https://fred.stlouisfed.org/series/MSPUS

Sale prices begin rising immediately once interest rates dipped to the lowest ever (borrowers could "afford" more principal - sale price - for similar monthly payments).

Combine that with houses making up a significant chunk of balance sheets for the US, and we (collectively) are loathe to let prices fall:

https://eyeonhousing.org/2024/02/homeownership-is-key-to-hou...

HN, we seem to care about this. We post a lot about it. Maybe we should put together a site to consolidate this sort of information, work on articulating something insightful about what is going on, and then a system/group/accountability(this is important) for pushing this to our politicians. My grandfather used to do that and the US was improving. My dad did nothing other than vote. I've done nothing other than vote. The US stopped improving. It's easy to setup a ghost website and do nothing though, so we would need a way to hold each other accountable, broken out simple to follow actions to take. Basically a 10 step program but with the steps being political action we hold each other accountable to take.

If you look at the amount of money created since Covid, this explains a lot of this increase in asset prices.

But beyond that, interest rates are a big driver of what people can afford for a monthly mortgage. These rates may come down a little. However, the FED facility that was creating sub 3% rates was likely a once in a lifetime opportunity.

Here are two.

Suburbs, good ones with low crime, access to jobs and good schools are desirable. Desirability leads to prices going up. Prices going up leads to property tax revenue going up. That budget going up leads to a higher $/pupil for schools, better infra, etc... Increasing desirability.

So, not a supply problem.

Here's another. Jobs are in cities. People don't like commutes, and value not owning a car if possible. Young people like cities. People go there, causing demand to skyrocket, while companies hire there. Places like NYC and Paris and London are not Houston - unlimited development would ruin the cities. There's no amount of supply that would ever make these cities cheaper. Moreover the land itself is expensive, and the building costs (labor and other costs), so there's a floor to what things should cost.

In every one of these conversations on building, you get these Reddit-style upvoted comments akin to 'it's due to zoning and NIMBYism'.

Newsflash, the world isn't California. The problem of housing costs has a lot of dimensions.

I propose - abolish the property tax paying for schools like in most of the country, and distribute school funds equally at the state level. This would reduce wealth inequality.

Second - let's revisit this return to office idiocy. If I have a million dollar apartment in a city, it's because of my commute, not because I necessarily enjoy or want to be there. More than happy to sell it to someone else who'd enjoy it more (a young person - what cities are for).

> So, not a supply problem.

What do you mean it's not a supply problem? Suburbs and the housing within them aren't naturally occurring features with limited supply. They're not oil deposits. You can just build more of them.

Same thing with places like NYC or Paris or London. The point isn't that they need more development, it's that other places need more development so people who want the NYC experience in the US don't have exactly one city to choose from. You don't make NYC cheaper with more building in NYC, you make NYC cheaper by making more NYC like cities.

I'm in agreement in general. I argue against people who think Manhattan should be more dense, or parklands should turn into apartment blocs.

The problem with a lot of the US is that the city designs are atrocious - if you can call them designed at all. Americans don't really understand how to create public transportation systems and to urbanize suburban areas. Instead of looking at Europe and copying, we bicker and argue and support this broken idea of local government. Btw, that's not a right or left thing - community groups are touted as a great thing to fight against gentrification, or over development in blue states, and defenders of freedom in red ones. The issue is the multi faceted bickering making it impossible to progress - why don't NJ and LA suburbs not have the best public transportation in the country or world? They easily could. It's just bad government and a lack of centralized planning at the federal level.

Look at the price of gold. Asset inflation is happening because we’ve 20 years of inflationary policies that hid in equities because of 0%-3% rates.

Now that the rates have gone up, that money is chasing lower downside risk investments. Assets and commodities are the safest place to park cash when you can’t trust monetary policy to protect savings.

I think there is a huge problem that the American Zeitgeist views houses as the only way to build generational wealth. It turns housing into an investiment and investiments need to be defended (NIMBY) and it puts a perceptional view that if house values are not rising America or heaven forbid going day the economy is in doomsday.

The problem with a house as investiment is that, its 1 consoldated undiversifed asset that ruins you if it goes down. Its bad strategy for your children because it makes it so houses will one day be unobtainable this generation or the next. We can try to build it out but I think a lot of the issues with building houses is that we have a shortage of the people that build houses and its a project that is not really DIYable anymore in the places that need houses. (the last point might be a stretch but you know)

Of all the jobs to get replaced by AI, I would be happy to see realtors to be first in line (but I also think this is wishful thinking).

I feel like I get very little value out of what seems to be a mostly fixed/required price.

I know flat fee realtors exist, and if/when we sell our home, I’ll be looking into this heavily.

But I feel like they rank up there with car salespeople/dealers.

Here's a recent nytimes article in a quote positive experience using ai in place of a realtor:

https://www.nytimes.com/2026/05/28/technology/sell-house-wit...

> All three bidders waived inspection and appraisal, and they all had healthy financing

> I was transacting in a thriving market, with no special circumstances

Yeah, a hot real estate market is where a seller is likely to derive the least benefit. Although a talented agent in a hot market can drive a more competitive process, potentially generating higher offers. All of which is, to the author's credit, highlighted in the article.

Agents earn their keep in more normal/weak markets.

Realtors are experts in the market. A good realtor pays for themselves by getting you the best selling price or finding the best home for your price range. If you don't understand opportunity cost, then obviously it appears to be a ripoff. But once you understand, it's clear that realtors have value. And realtors are probably going to be the last to be replaced with AI. It's all about value judgement and AI is garbage at judgement.

Also, it's true this article isn't recognizing the root cause, overpriced housing, because realtors in general do better when prices are high. But "realtors in general" is a very different category than "your realtor".

The decade of zirp between like 2013 and 2021 created a lot of shitty realtors because anyone with a pulse could sell or buy a house with ease. The true value of realtors is in bad economic conditions where serious work is needed to market and negotiate.

Realtors are indeed market experts (not product experts). Commission pay incentivizes them to close deals quickly, not to maximize sale price. Yes they can educate first time buyers that they cannot simultaneously get the best location, condition of the house, and price. Good realtors will ask their customer which two (or sometimes one) are their real priority and realistically match them to available listings. If you're moving into an area they can provide some local information although they legally cannot comment on schools or crime. If you've done this before, realtors mainly just serve as gatekeepers to a cartel and literally unlock houses for you to view.

> they legally cannot comment on schools or crime

Which for probably 70-80% of people, especially young couple with or considering children, are the top two things they care about if not the only two things.

I would disagree. Theres enough information readily available to be able to see what relative home values are, where the good school districts are, etc.

The only reason I’ve ever used a realtor is because I don’t have the time to deal with the contract/legal side of everything. Most would be better served by hiring an attorney and title company if your state allows.

But there is an adverse selection problem. Some realtors are experts in the market. Buyers or sellers have few ways to identify them accurately. Most of those ways amount to they themselves having good knowledge of the market.

It's the same problem as picking active fund managers.

I used a discount buyer's agent and it worked great! We viewed houses on the internet ourselves, went to open houses ourselves, and arranged showings with seller's agents ourselves. Once we had it narrowed down to two houses, we brought our buyer's agent to look at both houses, offer suggestions, and do all the bidding and purchase paperwork.

The realtor cartel still enforced a 6% commission, with half to the seller's agent and half to the buyer's agent. Our contract with the buyer's agent refunded half of his commission to us. So basically we got a 1.5% home discount. Our buyer's agent still made 1.5% but didn't have to babysit us while traipsing through dozens of potential homes, so it feels like everyone wins.

Yeah even our best realtor, who I actually liked and thought he did a good job (see other comment here) spent probably 1/3 of his total time on our purchase just hanging out or also walking around an open house. Such a waste IMO.

I did the same and outright offered 3% less and did not invoke buyer's agent at all.

Also when I sold my house (> 1M USD) 2 years ago I used $100 flat fee listing service and outright refused to pay anything to buyer's agents.

Both transactions went well.

Post-NAR settlement you would have to sign a separate agreement with your buyer's agent specifying their compensation before making an offer.

YMMV. When we sold in 2021, our realtor connected us with an interest-free lender who put up $76K for repairs and staging. This, and other services, made the difference between our selling for $1.8M and the $2.4M we got. Maybe we could someday get similar service from a realty AI, but in our recent experience, the humans made all the difference.

Yea,

"We currently have 10 houses renting at $2500 for 15 people who have $2000 to spend on rent. WHAT IF, we gave those 15 people $2500 instead. Housing crisis solved?"

-This article...basically.

Yes, might as well just give those $2500 to the landlords directly and skip the middle-man. It reads like a joke.

Supply and demand, supply and demand. It’s not that complicated.

I’m not sure how or why this article got published by an organization that should, given its very nature, understand economics. The article doesn’t paint them or their members as people I’d trust in either side of a major financial transaction.

have you met a realtor?

They can be some great people but as a profession they are known more for their extroversion and soft skills than their high IQ understanding of economics lol

It also depends on how hot the housing market is at any given time. Often time a realtor is just someone who decided everything else was too much work. (My whole family has been in the business for almost 70 years, both commercial and residential.)

I'm sure some do more, but my personal experience on the sales side is that realtors do nothing except serve as gatekeepers to get your house listed in the local MLS. Then they show up at closing to collect their commission.

On the buying side, they do more such as drive prospective buyers around to look at houses, though it's been long enough since I bought a house that I don't know how much virtual tours have replaced this. Either way, it's not what I'd call difficult work.

It is "work" in the sense that you can be busy doing things. Nothing is difficult by any reasonable sense of the word. All the realtors I know who are actually successful are constantly busy, constantly taking phone calls or responding to texts, there's very little downtime. I'm sure there's some nuance to it, and it probably helps to be in the business for a long time, but it's a backup job for 99% of people for a reason.

I've bought and sold a handful of properties in a couple states through my life and have dealt with probably 2 dozen realtors in some professional capacity, and only 1 has been what I would call "good" and that was basically just him giving us insight into the market, being willing to tell us not to buy a house because it wouldn't fit our needs 5 years in the future, etc. Basically just willing to sacrifice a faster or larger commission to get us what we wanted rather than just closing a deal ASAP, which IMO should be the minimum and not the mark of a "good" realtor.

Yes, many.

The realtors I’ve met understand economics and markets very well. Not as academics but as practitioners.

To the extent that an organization can understand anything, this one understands economics just enough to argue for policies that will get its members more money, and argue against policies that won't. Real estate is the quintessential stay-at-home-mom backup job so it's no surprise by and large they are not known for having a nuanced and academic understanding of economic theory.

They want wages to go up so that home prices go up even more, and their members make even more money for doing basically nothing most of the time.

> it's no surprise by and large they are not known for having a nuanced and academic understanding of economic theory

The folks I’ve worked with have been as dedicated to their career path as anyone, and while their expertise and skill varies that isn’t different than any job. I understand your point, but your (mis?)characterization hits me as a little biased and shallow.

It’s not “theory”; it’s literally what they do.

They're intentionally focusing on only one half of the equation because the other half is partly their fault, and addressing it hurts their members.

They either don't understand that addressing wages without supply simply increases prices, or they do understand and don't care because it's good for their pocketbook. Which one's worse?

The article does, agreed. But I don’t think it was written by actual realtors. It’s the product of an organization that is representing them poorly, or so it appears.

> given its very nature, understand economics

I'd say being a realtor is more about dealing with the psychology of buyers and sellers than the economy. And yes, you are wise to not trust them. Their interests are not yours.

And as the saying goes, it's difficult to get a man to understand something when his salary depends on him not understanding it. I bet most realtors would prefer housing prices to stay high and the average home owner to stay rich. They are not here to solve the housing problem. They are a part of the problem.

Build baby build. It's the only way.

Vicious cycle. There was a story yesterday about a couple's rent going up 70% after they told the landlord they were having a baby around the same time the lease was up for renewal.

https://sfstandard.com/2026/06/17/san-francisco-marina-landl...

> Increasing wages will not fix the housing crisis, and will just drive prices higher.

This is true though?

Did you mean "isn't"? The tone of your comment sounds like you mean to disagree with the quoted point.

No I am mostly agreeing with the quoted point

Is it the case that housing was previously just very cheap and this is the normal price?

What's your definition of normal? 300 years ago you'd just set up on a chunk of land and build your own house. I'm not saying that's preferable to today but the actual financial cost was comparatively extremely little.

I bet there is a middle ground where we could relax or eliminate a lot of building restrictions and NIMBY policies to ease the upward pressure or even exert some downward pressure on home prices. We're also fighting against 6-7% interest rates after an extensive period of 2-3%.

I don't think you're wrong; however, multiple things can be true at the same time.

In this case, housing prices are ridiculously high, and wages are ridiculously low, if you compare both to the overall cost of living excluding housing.

increasing wages will fix part of the inequality crisis because as you go up from working class to billionaires you get less income from wages and more from capital gains. if you raise wages that changes the distribution to be more equal and thats a good thing. but i agree it wont solve housing by itself.

for housing we need to replace zoning rules with a neighbor vote, put the community back in control instead of bureaucrats who block new apartments for dumb reasons or take bribes from developers to build luxury investment properties nobody wants. there should also probably be an escape hatch where anyone can build affordable/rent controlled apts without a vote but only if the location has high enough average rent. that would help balance out inequalities and break up exclusive rich neighborhoods, maybe even help against racism.

the other side is lower costs with less paperwork (removing zoning makes a big difference) and enforcing competition in the home building industry. make it easier to start a new business and break up corporate monopolies. create a safe path for undocumented immigrants to legalize themselves so they can have labor rights, make legal immigration cheaper and more predictable.

These are diametrically opposed:

> for housing we need to replace zoning rules with a neighbor vote, put the community back in control instead of bureaucrats who block new apartments for dumb reasons or take bribes from developers to build luxury investment properties nobody wants.

> there should also probably be an escape hatch where anyone can build affordable/rent controlled apts without a vote but only if the location has high enough average rent.

Realtors don’t own the houses.

Realtors earn commissions as a % of the price a house sells for.

Merch has to move for them to earn a percentage. If prices are systematically too high I would guess liquidity goes down.

Nothing a 50 year mortgage can't fix, I'm sure that article will be coming out soon to from our realtor friends.

It’s also a diabolical amount. My friend bought a house in San Jose, and both, the buyers and sellers agent got $50,000 each on a $2M house. They didn’t even help with the house search much.

Who agreed to those terms?

The buyers or sellers. No one is required to use a realtor. They simply provide a convenient service for a fee.

Tell me you have never bought a house in the US without telling me you have never bought a house in the US.

That's an odd accusation to make with confidence.

I've bought several houses in the U.S., and the last one I sold, I didn't have a realtor. I'm not sure what point you're making here.

That you have bought several houses in the USA makes your experience represent 0.01% of homeowners. Most people in the USA only buy one.

https://en.wikipedia.org/wiki/Burnett_v._National_Associatio...

This lawsuit is about realtors acting against your interest (agency problem), and is not about you being forced to pay a particular commission.

You can choose your realtor. You can discuss with them.

This person just bought a 2m house!

> not about you being forced to pay a particular commission

It's literally in the first paragraph of the article.

"At trial, a federal jury found that they violated antitrust law by conspiring to force home sellers to pay inflated commissions to real estate agents."

The force applies to "inflated," e.g. they agreed to pay a fee but were forced to pay an inflated fee. Not they were forced to pay any fee at all.

I don't understand the point of this clarification.

There is a difference between "forced to pay a fee" and "forced to pay an inflated fee." The GP said it's not about being forced to pay a particular commission, which is the first one, which is accurate.

https://news.ycombinator.com/item?id=48585389 the thread started here where the commenter said "diabolical fee". In any case this is high pedantry.

The get a percentage cut of the sale price of a house.

Not usually. But homeowners don't usually set the price themselves. Yes, yes, yes, yes, yes, technically they can. But a _realtor_ is in their ear telling them MORE MORE MORE.

of course they are. what else could they possibly do? pressure you into selling for a little less? get sued for not getting the seller the best price?

also, they don’t get paid if something doesn’t sell for being overpriced.

it’s a market system.

> get sued for not getting the seller the best price?

Are they legally required to do that? How would you even prove it was due to them?

Actually realtors egg on buyers to offer more more more. And sellers to reduce asking prices. Whatever makes the sale happen quicker.

I've had "Amazing, yes, no trouble, we'll sell this quickly" followed by "Not moving, try dropping the price by 20%" a month later.

Realtors negotiate for themselves, not for either buyers or sellers.

I did have one who dropped their commission a little to close a sale, but that's not a common experience. (And they still did very well out of it.)

A good realtor should help the seller set a realistic price. Because if the house doesn't appraise for the selling price or more, the deal will fall apart before closing.

The gp you replied to mentioned "realtors" because this thread's article domain is: realtor.com

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