There are goods and services with income-elastic pricing, like housing.
UBI indirectly and unfairly benefits only the people who control those goods and services. If everyone made $1000 more per month, housing prices would raise up to that amount for everyone. This means the majority of the UBI raise would go into just the landlords pockets.
This is why many welfare programs are expense- or need-dependent, because it maximizes the benefit to those who need it without impacting price inflation as much.
That said, the UBI inflation would incentivize construction. But this requires zoning changes, approvals, and consecutive land reclamation anyways.
Might as well start with:
- Removal/reduction in zoning
- Automate construction approval workflows
- Leverage eminent domain to aggregate land, and sell for profit to the builders.
Its just a win-win-win (given the views / property values would be reduced regardless without extra housing causing SF/LA/Seattle levels of homeless people):
- Homeowners get paid, by the city / local gov, at market rate or slightly above market rate.
- The city / local government has a new profit stream, to be used for more housing / services / reduced taxes. They would aggregate land, re-zone it, get approvals completed, and sell the whole package to the highest bidding developers.
- Developers reduce costs to aggregate land and due to interest payments while waiting for all the land + approvals.
- City gets to better plan the hosing market, i.e. superblocks, transit, etc.
- City dwellers get more access to housing (i.e. cheaper housing), and possibly reduced taxes. Also reduced crime and homelessness because the city is affordable for everyone.
Whitewashing UBI as a "win-win" is pretty bold considering I just showed how UBI disproportionately benefits property owners and discriminates against everyone else.
There are ways to achieve all of the above that doesn't require destroying income-elastic priced markets. UBI is not a good solution.
The win-win-win was for "Removal/reduction in zoning", "Automate construction approval workflows", "Leverage eminent domain to aggregate land".
UBI doesn't work well at all, like you stated, if there isn't a big increase in the supply of housing. For example, Seattle needs 10x more housing than it has today, and in 10 years it'll need 100x more housing than it has today. Ideally, all of these should be new luxury condo buildings, with 1000-3000 sqft condos, driving prices of all housing down by 10x. I would really like to see the city make this their only priority.
> For example, Seattle needs 10x more housing than it has today, and in 10 years it'll need 100x more housing than it has today.
Seattle has about 740k people and about 370k housing units. 10 times the housing units would be enough for the entire state population at an average occupancy of 2 persons/unit. 100 times would be enough for roughly every US state bordering on or one state out from the Pacific Ocean.
Seattle pretty emphatically does not need that much housing.
Greater Seattle has 3MM people many of whom would like to be in the city core in a 3000sqft lux condo instead, or Airbnb space for concert nights. You’re also greatly underestimating the number of people from around the US who would rather live in Seattle but just can’t afford it right now. Seattle has a labor shortage and just can’t fill it right now. Restaurants and even many bars close early because it’s not cost effective to stay open later.
Density also facilitates business and pulls in even more workers, who are also customers and it’s a positive cycle.
Seattle needs 100x more housing in the next 10 years if it wants to continue to be a competitive city. As a resident I sure hope it does.
> He's saying that if everyone has extra money, then everyone can afford higher prices.
UBI only gives everyone extra money if it is unfunded; typical UBI proposals are funded by either increased progressive income taxes or cutting other spending (which produces income to the recipient), and so is (in first order effects) zero-sum. (Typically, it replaces rapid clawbacks from means testing with slow clawbacks by progressive tax increases.)
That’s not how market prices are generally set. Competition and demand keep them low. It might happen the way you describe sometimes but it’s far from a guarantee.
