Refreshing to see some decent analysis of the demand side (as opposed to the usual supply side debate that typically just leads to simple calls to 'just build more').
Both things can be true, right? The demand side is hosed while at the same time regulation is ~40% of the cost of new multifamily development and ~25% of the cost of single-family development.
Yes to the bubble dynamic. Yes to the far-outpacing-inflation rise in regulatory cost. Yes to the need to build more, particularly starter homes of the sort that are largely rendered illegal by zoning in U.S. cities.
Absolutely. Impediments to new housing undoubtedly have an impact. I just find it a little frustrating that when discussing the accommodation crisis (I say 'the' but there are many) this side of the equation so often overshadows the problems we have created on the demand side.
Cheap credit (which favours those with capital). Tax advantages (relative to other investment classes). Speculative sentiment. Lack of effective regulation (e.g. allowing investors to essentially remove properties from the housing market via short term rentals). These are just a few of the demand side issues that get largely ignored when discussion is framed only in terms of a 'shortage'.
I don't think the phrase "allowing investors to essentially remove properties from the housing market via short term rentals" makes sense. Short term renters are still being housed. In general, landlords want their properties occupied by people paying rent, whether it's a long-term lease or a daily one (like a hotel).
Fair enough, though in my defence I don't consider hotels to be a part of the housing market. Short term rentals are part of the same market as hotels in my opinion.
If gains made by different classes are unevenly distributed, _every economic or financial improvement across the economy_ increases the disparities. The last thing that helps the poor is to have the economy do better, relatively speaking. In the economic arms race, anything that gives them a bullet gives their competition 100 bullets and a hand grenade.
Some may do better in some ways, but some will do worse in the same ways, and all of them fall further behind the classes that accrue more.
And yet, (almost) all people that can't afford to buy their own home, still live in one. And pay to do so.
In other words: in theory, they do have the means to afford the home they live in. Just not the bag of $$ required for an initial purchase.
Conclusion: they're still paying for the home they live in. It's just not their property they're paying for, but someone else's (aka landlord).
"Landlord" used very generic here. Entities which own real estate & rent it out, come in many shapes & sizes.
This is the sneaky bit of wealth inequality, as applied to housing: all the money needed to build, buy & maintain housing is still extracted from the population. But the advantages that come with owning those properties, winds up in the hands of a small minority. The rest do pay, but don't get those ownership advantages in return.
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[ 0.23 ms ] story [ 70.3 ms ] threadYes to the bubble dynamic. Yes to the far-outpacing-inflation rise in regulatory cost. Yes to the need to build more, particularly starter homes of the sort that are largely rendered illegal by zoning in U.S. cities.
Cheap credit (which favours those with capital). Tax advantages (relative to other investment classes). Speculative sentiment. Lack of effective regulation (e.g. allowing investors to essentially remove properties from the housing market via short term rentals). These are just a few of the demand side issues that get largely ignored when discussion is framed only in terms of a 'shortage'.
Some may do better in some ways, but some will do worse in the same ways, and all of them fall further behind the classes that accrue more.
In other words: in theory, they do have the means to afford the home they live in. Just not the bag of $$ required for an initial purchase.
Conclusion: they're still paying for the home they live in. It's just not their property they're paying for, but someone else's (aka landlord).
"Landlord" used very generic here. Entities which own real estate & rent it out, come in many shapes & sizes.
This is the sneaky bit of wealth inequality, as applied to housing: all the money needed to build, buy & maintain housing is still extracted from the population. But the advantages that come with owning those properties, winds up in the hands of a small minority. The rest do pay, but don't get those ownership advantages in return.