Both are band aids for the real problem. Housing can't both be an investment and a basic need. You need to pick one or find an opinionated middle ground.
If housing is an investment, then remove all protections and open up the supply. No height regulations, no minum parking regulations, no mandatory HOAs. No moratoriams or legal protections when loans default.
If housing is a need, then regulate it like a limited resource. Ration it on the lower end. Ban hoarding (vacancies, empty plots). Limited access to repeat consumers.
When the powerful talk about "finding balance", they usually mean having their cake (earn like an investment) and eat it too (protected like a need).
IMO, Georgism strikes the best opinionated middleground of housing as an investment vs housing as a need. Grounding taxation in land's economic value regulates hoarding. Grounding the value of land in its economic outcomes makes it a transparent investment, rather than the cartelized asset that it is today.
I'm personally opposed to too-much-regulation. It always ends up being a tool for the powerful. Rent control, Prop 13, affordable housing, stacks-of-paperwork and similar regulations always do more harm than good.
You don't have to remove the sensible regulations. You need to make enforcement of regulations and the approval process easy, low risk, fast, and cheap - instead of the typical multi-month (or year) bog down that most planning departments in major cities turn into. Removing things like natural spaces, parking, fire safety, and all the other stuff that city planners enforce to keep a city livable is not going to help in any long run situation.
Why is there not more funding for those departments to make approval/revisions a breeze and make building lower risk and cheaper for construction companies? Welp - home owners (and big construction/investment companies) are the ones who vote. I expect politicians know exactly what they're doing, keeping things a complicated swamp.
But without some sort of governing regulation, I fail to see how anyone benefits in the long run with the tragedy of the commons that would ensue.
> Housing can't both be an investment and a basic need.
Yes it can, and it was for large chunks of the 20th century. Imputed rent can have high yields and therefore imply good "investment" income for households with long term stable housing demand.
My theoretical point that high rental yields can imply houses are a good asset to own without price spirals stands regardless of time period.
The 20th century is relevant because it had long periods of time where homes could be bought at high rental yields because there was lots of new construction in the USA.
I think the general premise is housing can't both be so cheap that people with nearly no net worth can get it, but so valuable that it can serve as a substitute for retirement savings. This is from first principles true, but it's really only a problem in urban areas: my pet theory is that spiking demand for urban housing is driving 100% of this. Americans used to move far more than they do now [move], even when you factor in the pandemic, and they used to be more comfortable living in all kinds of different places, but now people move to cities and stay put. This is for all kinds of reasons, all under the category "it sucks not to live in a city for almost everyone". Economic opportunity is way, way lower [econ]. Racism, misogyny, homo/transphobia, hyper religiosity, and lack of diversity are huge problems. Urban schools dramatically outperform rural schools [schools]. Health care is harder to get [health care]. I think the data bear me out here; in particular general homeownership rates are basically what they were in 1963 [homeownership], but urban homeownership rates are way below the average [urban homeownership].
There are some signs that this trend is reversing, but I think that was entirely a pandemic phenomenon. Big numbers of Americans regret their pandemic moves [regrets], so I think the environment hasn't actually changed.
It's hard to see where this goes. Most other places solve this by becoming very very dense (Hong Kong) or building great mass transit (Tokyo). It really seems like the US won't do either of those things--maaaaaaybe NYC will but that would be all. I tentatively predict that we have to wait for most of the Boomers to die and leave their wealth/houses to Millennials before we know if this is a bona-fide societal crisis or not: if enough Millennials get what they want this way it'll take the oomph out of any kind of policy change (probably reverse the momentum actually--if anyone thinks Millennials will be any better than Boomers they're super mistaken).
But, neither outcome is really good. On the one hand you have the daunting prospect of a dramatic economic reorganization of the most powerful nation on Earth. On the other you have the calcification of the most powerful nation on Earth into something fundamentally unequal, illiberal and corrupt.
What part of Georgism is Anarcho-capitalism ? It is merely a way to reason about land and taxation.
For a country with near-zero historic buildings, the US has some of the most suffocating housing regulations. Making the regulations easier to navigate does not make it anarcho-capitalism.
The US housing crisis is an urban problem. Take California for example. Prop 13 handles land-taxation, which lets you pay pennies on prime real eastate. The Bay-area is the world's tech capital and has the world's most expensive real-estate. Yet you'd struggle to see an 5-floor+ building outside of a small pocket in down-town SF & SJ. Nimbys have practically outlawed any building by exploiting environmental regulations. The troubles associated with the new Apple Campus and the SJ downtown transit extension are recent examples among many.
In the above examples, housing of those who have it, is being protected by the laws as if it is a need. However, it explicitly prices-out those without housing through the same means. The individuals who protect their housing, do so to protect an investment. To me, taking away the ability of NIMBYs to project power outside their own walls limits exclusionary regulation. And standardizing taxation by land value generates the kind of fair-market pressure that keeps supply coming.
Now yes, it fully embraces housings as an investment, and it will inevtiably comes with it's fair share of problems. But first, investments come with well-understood regulations to avoid abuse (cartelization, hoarding). And second, I can't imagine how it would be anywhere close to how bad things are now.
If you have a better solution, then I'm all ears. But, at least don't be condescending if you aren't willing to engage.
> What part of Georgism is Anarcho-capitalism ? It is merely a way to reason about land and taxation.
Sure, but that's not what you espoused. You mentioned it as the best opinionated middle ground, but ultimately concluded, too much regulation was bad--Georgism involves far more regulation than we currently have. Note that Georgism isn't just about land.
> Making the regulations easier to navigate does not make it anarcho-capitalism.
Sure, but "making regulations easier to navigate" is quite a bit different from listing every current regulation you can think of and saying they are the cause of our current problems.
Even if we charitably assume you're genuinely proposing Georgism as the end goal, that's a complicated ideology to implement. What are the steps to get there? It seems like your only concrete solution is to get rid of the too-much-regulation examples you mentioned--the few weak protections we have--and vaguely "implement Georgism". Whether you intend it as such or not, that's a motte-and-bailey fallacy: the end result of this plan is simply to get rid of regulation and then fail to implement Georgism.
I don't share your optimism that land value tax cannot simply be passed on to renters. Closing that massive loophole involves implementing the rest of Georgism, which I'm not convinced you know exists since you've failed to mention it entirely. And ultimately, I am not convinced that loophole is possible to close.
And then there's the separate problem of accurately valuing land in order to tax it.
> The US housing crisis is an urban problem.
No, it's not. Homeless flock to urban areas because it's easier to survive without a home in an urban area, and small-town/suburban cops have a lot more ability to just imprison all the homeless they encounter under some pretext. But a lack of affordable housing in suburban and rural areas is absolutely a cause of homelessness just as much as a lack of housing in urban areas is. If anything, the lack of employment opportunities in suburban/rural areas creates more housing insecurity.
> In the above examples, housing of those who have it, is being protected by the laws as if it is a need.
Is it? I don't think so, and you conveniently talked around zoning laws which are more obviously treating housing as an investment and not a basic need.
These laws presuppose that housing as an investment is a reasonable thing. I suppose that assumption doesn't mutually exclude housing as a basic need, but the laws you mention completely lack the sorts of protections with real effect that regulate investors in other basic needs. If your water company or electric company fail to provide service, they get fined--who gets fined for failing to provide housing? When food supplies became insecure, we subsidized farming at a level that creates a permanent excess of food: who are we subsidizing to create a permanent excess of housing?
> If you have a better solution, then I'm all ears.
Well, housing is a basic need. You keep dropping phrasing like "if housing is a basic need" or "as if it is a basic need", but the statement "Housing is a basic human need" surely is not under debate? So maybe we treat things the way they are. There's no need for an "opinionated middle ground"--there are not two sides to this coin: housing is a basic need. I do not care about investors in housing: people withholding people's basic needs to collect rent are a blight and should be treated as such.
No one should be able to own houses they do not live in. I have no objection to simply giving landlords a year to sell off their rental properties, but realistically this sort of regulation is hard enough to pass without cutting the oligarchy out of their pound of flesh, so some sort of compromise that reimburses landlords somewhat is a reasonable compromise if we can solve homelessness permanently.
The crux is that people can agree that "housing is a basic need" without agreeing that "no one should be able to own houses they do not live in".
Even the most well-intentioned attempts to implement this will probably be more harm than good. There will always be enough loopholes to create many of the same problems while the added restrictions can introduce other problems of their own.
Some people cannot afford to buy, and some would not buy even if they could, preferring flexibility or a different kind of market exposure. For them to have a place to rent, someone else -- be that a company, family, or individual -- has to own a place they don't live in so they can rent it out. There will always be a need for this, you can't just ban it.
Aside: Don't tell me you want state-built housing projects. People seem to forget that the USA already tried that. Even in Russia and China virtually anyone who can afford to move to private housing does and never looks back.
Australia's state housing projects may have kept some people off the streets but have not prevented runaway housing prices for everyone else. One could argue they took up valuable land that could have helped with the supply side.
It's not "anarcho-capitalist" to recognize that many laws and regulations have had paradoxical effects once implemented. Even the most die-hard planned economy maximalist has to acknowledge that the plan can function differently in practice to how it was imagined by the committee. History is full of examples of well-intentioned plans functioning far worse for both the collective and the individual.
...and crashing housing prices drastically would solve this.
> and some would not buy even if they could, preferring flexibility or a different kind of market exposure.
A lack of flexibility in home ownership means a lack of liquidity in the market. A more liquid market is the solution here, not rent.
Paying rent is not market exposure. It's explicitly excluding renters from any market appreciation. No one chooses to rent so they can "gain exposure" to monetary loss. This is an absurd argument.
> Aside: Don't tell me you want state-built housing projects. People seem to forget that the USA already tried that.
People who hate government housing love to point to urban projects built in primarily black neighborhoods before the civil rights movement, and conveniently forget that postwar housing programs built much nicer housing in primarily white neighborhoods. I grew up in one such house.
> Even in Russia and China virtually anyone who can afford to move to private housing does and never looks back.
Imagine seeing people who would otherwise be homeless become stable enough to move into nicer private homes and seeing that as a failure of public housing.
My guy, people are sleeping on cardboard outside in 10 degree weather here. Grow a sense of perspective. Yes, I also support improving quality of housing, but if your criticism is that my solution doesn't result in perfect housing, I'll point out that your opposition to all real solutions doesn't result in housing.
> Australia's state housing projects may have kept some people off the streets but have not prevented runaway housing prices for everyone else.
Sorry, what was that first part?
Australia's state housing projects couldn't meet the demands of investor greed, because corporate greed is limitless. It should be unsurprising that as long as investment is allowed in housing, housing can't be cheap.
> It's not "anarcho-capitalist" to recognize that many laws and regulations have had paradoxical effects once implemented.
True. It becomes anarcho-capitalist when you see the complexity of regulation and use it as an excuse to oppose any and all regulation.
> History is full of examples of well-intentioned plans functioning far worse for both the collective and the individual.
History is also full of examples of well-intentioned plans functioning quite well. You like working no more than 40 hours a week? You like that your boss can't lock you in your office and let you burn to death if the place catches fire? You like that your food has to be inspected for foodborne illness?
Many of the regulations we have were written in blood and there are many people still suffering because regulations have not yet been written. Your free market ideology brought us sweatshops, cars that explode when rear-ended, paychecks paid in company store credit, black lung disease, prison slavery, Chromium-related cancer clusters, opiods, microplastics, kitchen grease fires--the list is endless, and in every one of these cases people knew what they were doing was harmful, did it anyway, and walked away with the profits of, in some of these cases, literal murder, because people like you are too blinded by ideology to prioritize human lives over freedom of the market and regulate before untrustworthy corporations cause harms that they obviously will.
e: if you don't agree with my idea, please comment why instead of down voting.
--
> Housing can't both be an investment and a basic need.
Housing as investment is a beautiful solution to how many people fail to properly save for retirement. For many people entering retirement, their home is a huge part of the investment portfolio, because they always made sure to make that payment.
If properties didn't appreciate, old people would not have the assets to retire on, then what?
Not exactly sure what you're implying, but I'm assuming you're saying that Grandma moves in with you and now you can't afford to have kids and take care of grandma (which is the current situation of several of my friends).
ah, my hypothesis there is the younger generations will think they are getting their parent's house, but for many families, mom & dad will sell their house to pay for long term care facilities when they can't take care of themselves or walk up the stairs, leaving the kids with nothing.
Families have 1.9 children in the US, so all children inheriting suburban middle class homes from their dying parents is already off the table unless their parents divorced and or have some other reason to own two homes.
Let's say half of families divorce. But we then factor in your "long term care costs" and the liens those people will have requiring home sales rather than gifting and we're probably right back at half (at best) of kids possibly inheriting housing when they're in their 60s and their parents kick the bucket.
How is restricting supply not a problem? The fewer houses there are to buy, the higher prices will get, because there are more people competing for less.
Because the U.S. doesn't actually have a supply problem, despite this often getting repeated.
U.S. construction of homes has actually kept up with population growth and moves, by every conceivable metric.
What IS happening though is that landlords (private and corporate) "warehouse" units constantly to artificially restrict supply and demand, and they do it in collaboration with each other.
Every single city and state in the U.S. has a vacancy problem. We DO have both houses and apartments that are ready and able to be rented and owned.
The problem is simply the price, and the prices aren't being driven by legitimate supply and demand.
You can see this effect happen where prices increase NOT to match population (and often in SPITE of it), but they increase to match the upper bounds of regional income.
You need a place to live more than landlords need a few months of rent. This strategy to prevent downward price pressure from the market allows them to justify the current prices while setting up a "baseline" for the next few years.
Unless I’m misreading, the first two references support the idea that vacancy rates are too low but don’t comment on why.
The last reference indeed argues in favor of too much financialization of housing units but that blog is also tripping a lot of my crackpot alarms.
Can you succinctly explain why you believe the low vacancy rates in major metros (which I think we agree is the cause of high rents / purchase costs) are caused primarily by units which are intentionally held empty despite demand?
In partial defense of your assertion, the FRED data does show that 1/4 to 1/3 of vacant units are for sale or rent at any given time.
Total vacancy rate seems to hover around 10%? Rentable and buyable unit rates are an order of magnitude lower.
I’m not convinced that the Fed owning a bunch of mortgages is evidence that private companies bought homes and aren’t renting them. Wasn’t that a bail out to prevent people from losing their homes (because the companies owning the homes weren’t solvent and I guess if the company fails maybe you get foreclosed? I’m not sure why we did things the way we did in 08)
Could not the explanation also be that a lot of homes are in places that lack demand and therefore the owners don’t bother putting them up for sale or rent?
I copy-pasted this comment to my friend, who's the chief economist at a major real estate company you've heard of. Here's their response, verbatim:
> "Bullshit. It's not population that matters it's household formation. Millennials are the biggest generation and they are at the age now where they are forming their own households and there isn't any housing for them near jobs. Vacancies are all in dying rust belt towns no one wants to live in. California absolutely does not have a vacancy problem. That's just a lie."
This aligns with my (admittedly less-informed) knowledge as well.
Your assertion that "every city" has a vacancy problem is particularly mystifying to me. I live in Seattle, and there does not seem to be a residential vacancy problem of any kind. Some quick Googling shows "a homeowner vacancy rate of 1.0% and a rental vacancy rate of 2.5%." That does not sound like a vacancy problem to me. Quite the opposite. Very, very, very few homes are available for sale, even as the city's population explodes.
I also did a quick and unbiased Google search of "population growth vs housing supply." Here's what came up immediately: "In 2023, the U.S. saw 1.67 million household formations, resulting in 17.2 million household formations between 2012 and 2023. In this time period, 14.7 million housing units were started, and 13.4 million were completed." So again, household formation is outpacing housing supply, which results in more competition and thus higher prices.
Both your comment and the links you included (which I perused) seem less like they're concerned with fixing housing affordability, and more like they have an axe to grind against landlords and the wealthy in general.
Let's see the data then. Other than some "trust me bro" comment. Not sure why you expect me to engage with vague assertions of authority, especially when "he" started out emotionally unstable.
EDIT:
You heavily edited your comment. The stats you are referencing do not say what you think they say, they are not a force for increasing prices. There are already houses that were previously built, they do exist.
You made the vague assertion that "[e]very single city and state in the U.S. has a vacancy problem." You provided zero data to support that statement, or anything remotely close to that statement. I quoted data in my comment that directly refutes that, by showing very low vacancy rates in Seattle.
So you are the one who needs to provide data, otherwise you're spreading misinformation and not helping the problem.
I see you are choosing to be dishonest. You heavily edited your comment. It grew in size by ~85%.
And again, you quoted data but it is not asserting what you think it is. Look at what the data is telling you. It is a delta over a specific time period. It is not making the assertion you think it is.
>So you are the one who needs to provide data.
I provided 3 different links that go over this in pretty good detail.
Respectfully you've demonstrated you are not going to approach this in a constructive manner or in good-faith, so I won't be engaging with you past this comment.
What's one piece of data from your links that supports your assertion that "[e]very single city and state in the U.S. has a vacancy problem"?
There isn't any.
I'm not sure what your motives are. But your claim about vacancy problems is false, and your lack of desire to correct that misinformation leads me to question your motives.
What if the people building the houses are incentivized to build large, expensive homes? That means the buyer does not have choices in their preferred price range and must buy above what they actually want
You see this a lot with new condos, where the only kind of condos being built are "luxury condos" with fancy amenities and features. There's some theorizing that these will eventually become downmarket units as they age, but I'm somewhat skeptical.
I once lived in a condo built in the 70s and the materials used were very pedestrian - linoleum counters and flooring in the kitchen, carpet everywhere else. Ceilings were 8'. No balcony. I don't see today's granite and hardwood condos with 10' ceilings ever becoming downmarket.
I've heard the theory that high-end housing still creates opportunities for lower-end housing. If a desirable neighborhood gets new expensive units, that means (1) some residents who now earn more than when they first came can "upgrade", leaving their older and cheaper units open, and (2) people who can only afford the older units don't need to compete as much with wealthier buyers.
>That means the buyer does not have choices in their preferred price range and must buy above what they actually want
But we don't see this happening though. Even in this scenario, there would still be downward price pressure. The market should (or would, rather) reach some equilibrium here.
Instead what we see is UPWARD price pressure and vacancy despite legitimate market forces and environment.
I've kind of already laid it out in the previous post but the next question anyone should have is "why is that happening?"
And it's not because the units don't exist or need to be built.
I know in California there are so many requirements and fees on home construction that companies are incentivized to build larger expensive homes to dilute those costs.
These aren't incompatible. Household sizes are falling and number of homes is an input to population, so you can have residents moving out on net while prices increase due to the remaining residents being more wealthy. California is an entire state of ~40 million people where this happens: low and middle income families move out; high income families move in.
You're confusing increases in household formation with increases in homebuying.
You can create a new household without buying a house. For example, if you live with your parents as a 22yo, you and your parents count as one household. If you then move out and into an apartment by yourself, you are now your own household. But you haven't bought a house. As millennials age, more of them will obviously move out from living with their parents, which means increasing household formation.
In addition, you can expect homebuying to increase within a generation as that generation matures and earns more money. Of course millennials will be buying more houses when they're in their 30s than when they were in their 20s. That's to be expected. Something would be seriously wrong if that were not the case. But this doesn't automatically mean that housing is not expensive.
I don't think anyone said anything about solving homelessness. I read this in the context of outrageous home purchase prices. Those can be related but are certainly not the same thing.
Im ok with people owning multiple homes. I might not want to buy something in a place where I’ll live for 1 year. Or many other reasons to not want to own.
HOWEVER, make it an inconvenience to have the place sit empty. No tax because they’ll just raise rent to cover the offset, but make it a law or just very bureaucratic and people will either choose to rent it out or sell it to someone that will use it.
If all second home owners were forced to sell, that'd still only add 500k properties, and it would displace in other ways seeing as many of those are used as holiday lets. Given the Gov reckons 500k is the number of households needed to be built per year is 500k it'd be helpful but not a panacea.
People buying multiple hones is a blessing - it makes building home cheaper (economy of scale) the problem is obly in the tweasted reality of abosolutly rampant regulation, the only problem is government and local regulation if you artificially restrict supply you don't have enough homes.
It's a bit like when a big chain goes bankrupt - the profitable restaurants don't close another buyer comes in and takes over. Like Red Lobster and the staff in the profitable restaurants stay the same the renters stay in the same apartments or houses paying the same rent.
That sure seems like an article written to rile people up who want to be riled up.
Let’s use simple reason here…
If there isn’t enough supply, rates will go up, coordination or not.
If there is no supply issue, landlords who conspire to raise rents will be immediately undercut by those that do not.
Article makes allegations, and nothing came of them. It’s not illegal to call and ask prices. Prices that they’re “agreeing on” were all what people were paying.
Is the FTC unbiased enough for you?[0]. This is a real problem. Many landlords use the same software to determine how much to charge, this software is intended to maximize rent by fixing the price.
Is it communism to not allow people to buy up all the water supplies and sell it back to you at an extortionate rate?
The truth about the housing market is that it's not a free market anyway it's controlled by special interests, bad laws, zoning, local nimbys and councils the list goes on.
Shelter is a necessity but lots of people think they’re entitled to live wherever they want at a price they can afford. They go to SF or NY and complain about rents when there is a whole country they can live in.
I don’t think communities have to allow higher density and the lower quality of life that comes with it. Desirable places are going to be expensive and that’s okay.
Personally I think if we have better rail, people can live in a wider range of places but still access jobs. You see this in Europe, and it lets smaller communities keep their way of life.
Lots of employers think they're entitled to in-office days when remote work suffices. Argument would be stronger if there were a whole country to do all work in.
There is available work in many places. But I do think many want to only do certain kinds of jobs, get paid a certain amount, and live wherever they want. That feels more like entitlement to me. For example many college educated adults look down on trade jobs and want a desk job in whatever field they studied in a coastal urban city. But that’s not reasonable.
Non sequitur. Read carefully, there isn't all work in all places. It's not about how much it pays. It's the demand to come to an office in "a coastal urban city" to work when the work can be completed elsewhere. It seems you not only want to deter people from living in desirable places, but also want to deter people from working in jobs they were trained for for no reason at all.
Why is the problem always rich people? They're going to do what they're going to do.
The poors need to hold themselves accountable and stop working for unsustainable wages that can't get them even a small, run-down home. They continue to drive their own wages further and further down and make it that much harder for those that come after them.
It's ridiculous that they expect other people to sacrifice when they won't sacrifice (unionize, strike, or just opt out) to make the world a better, more equal place.
The wealthy will always try to squeeze everything out of the lower classes. If you accept unsustainable wages for your labor, you are part of the problem in devaluing labor (ie you are traffic). The working classes need to hold themselves accountable for the exploitation of their labor.
Exactly. It's insane how there are "landlords" (companies or even hedge funds) with dozens of flats in Airbnb in Spanish cities.
All the people and companies with some money in this country are buying those flats to rent them to tourists, and it's the most lucrative business someone can have as the expenses are minimum in comparison to the earnings.
If they taxed heavily having more than 10 homes they weren't whole neighbourhoods of tourists in our cities, and those who born there would have some opportunity to rent or buy something there, instead of having to having really far and losing most direct social relations they had
Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.