Economy The Western housing crisis

[SandisLL]

Might add here russia and china and ASAP relocate to these dreamlands for idiots.
Will be approx the same, sorry, uncle Putin might sent to trenches to protect Motherland Russia from evil bad west.
All OK comrades.
Normal flats in good areas more expensive than in Finland etc.
Cool aid for idiots.....

 

[Jack V Savage]

Don't worry guys - immigration like this, in a country with 40 million people, does nothing whatsoever to add pressure to the housing supply and fuel a housing crisis. @Jack V Savage , explain it to these chuds. I'm sure you have a study handy.

Trying to shrink the population or prevent it from growing is one of the dumbest possible ways to address housing shortages. It should be legal to build more where there is demand for it.

 

[Scerpi]

Trying to shrink the population or prevent it from growing is one of the dumbest possible ways to address housing shortages. It should be legal to build more where there is demand for it.

Agreed... Kamala is stupid

 

[Deleted member 592570]

Leave the cities. There's loads of affordable housing in rural areas.

 

[SandisLL]

Leave the cities. There's loads of affordable housing in rural areas.

+ jobs.,,?

 

[Andy Capp]

Don’t let foreign billionaires buy property in your country and turn it into rentals.

Or just turn it over by selling to other rich people a couple more times just to jack up the asking price.

 

[Fluffernutter]

Insane to me that any government would allow a foreign national to own land despite not living or working in the country and deprive their own citizens of the opportunity or ability to purchase land for themselves.

It should have such a heavy tax involved it's not worth it for the foreign nationals to do without actually living it in and contributing to the local economy.

I disagree.

Moving to the US, buying some property, starting a business, enrolling your kids in the neighborhood school. It's the American dream and a great way to be a part of the community.

After all, being economically part of the community is a great way to assimilate.

 

[Andy Capp]

It's obviously well past time to tell NIMBYs to get stuffed and rezone large areas for multi-dwelling buildings and then make loads of them.

 

[Andy Capp]

I disagree.

Moving to the US, buying some property, starting a business, enrolling your kids in the neighborhood school. It's the American dream and a great way to be a part of the community.

After all, being economically part of the community is a great way to assimilate.

He said "...despite not living or working in the country...."

 

[Jack V Savage]

So I think of the guy who got charged for buying up all the hand sanitizer at the beginning of Covid and then reselling it for crazy amounts. These companies aren't much different. Buying up massive amounts of a necessary commodity (MORE necessary than hand sanitizer) making it unattainable for a lot of the population. But because they have billions of dollars (and thus influence, lobbyists, and high priced attorneys on retainer) they can get away with it.

This really doesn't make any sense as an explanation for housing becoming less affordable or as investor behavior in the housing market.

It's really kind of a simple issue at heart. In some places, growth in jobs (and especially high-paying jobs) has exceeded growth in housing supply. That causes relative prices to go up. Markets generally handle that situation well--if demand for something is higher, it becomes more expensive if there isn't an increase in supply, which in turn causes more people to produce that thing and for prices to come back down. That's why market-based economies do so well. In this case, there are legal restrictions on supply growth that prevent that process from working.

Imagine if in 2008, gov'ts passed laws restricting smart-phone production. Prices would go way up, as more people would want them. If it were impossible to make enough to meet demand, companies would focus on the top of the market, and you'd have idiots saying that allowing more phones to be made just makes them more expensive. You'd probably have some hoarding, and more idiots saying that hoarding is the reason for the high prices.

 

[Misanthropist]

The question is why no one seems to protest anything about the high cost of living? All the criticism i’ve seen is over online. People just accept it and LDAR.

 

[SummerStriker]

I feel like all this new mcmansion construction is going to eventually turn into low income housing. The neighborhoods aren't very good to live in, and the people living there would jump ship the very second it looks like housing values will go down.

 

[MeatheadMike]

This really doesn't make any sense as an explanation for housing becoming less affordable or as investor behavior in the housing market.

It's really kind of a simple issue at heart. In some places, growth in jobs (and especially high-paying jobs) has exceeded growth in housing supply. That causes relative prices to go up. Markets generally handle that situation well--if demand for something is higher, it becomes more expensive if there isn't an increase in supply, which in turn causes more people to produce that thing and for prices to come back down. That's why market-based economies do so well. In this case, there are legal restrictions on supply growth that prevent that process from working.

Imagine if in 2008, gov'ts passed laws restricting smart-phone production. Prices would go way up, as more people would want them. If it were impossible to make enough to meet demand, companies would focus on the top of the market, and you'd have idiots saying that allowing more phones to be made just makes them more expensive. You'd probably have some hoarding, and more idiots saying that hoarding is the reason for the high prices.

In many areas there's actually glut in commercial real estate. Seems like an obvious logical solution to alleviate the housing shortage would be to convert some of that commercial space to residential, but zoning is a problem.

In any event, it doesn't seem like either side is looking to push any major policy to address this issue, and I don't think it will be resolved by the free market alone anytime soon.

 

[PG29 red0 Jr]

Leave the cities. There's loads of affordable housing in rural areas.

The house next door to my place in the UP just sold for $5,000. When I bought my place 20 years ago, I paid $1,800.

 

[mkess101]

This really doesn't make any sense as an explanation for housing becoming less affordable or as investor behavior in the housing market.

It's really kind of a simple issue at heart. In some places, growth in jobs (and especially high-paying jobs) has exceeded growth in housing supply. That causes relative prices to go up. Markets generally handle that situation well--if demand for something is higher, it becomes more expensive if there isn't an increase in supply, which in turn causes more people to produce that thing and for prices to come back down. That's why market-based economies do so well. In this case, there are legal restrictions on supply growth that prevent that process from working.

Imagine if in 2008, gov'ts passed laws restricting smart-phone production. Prices would go way up, as more people would want them. If it were impossible to make enough to meet demand, companies would focus on the top of the market, and you'd have idiots saying that allowing more phones to be made just makes them more expensive. You'd probably have some hoarding, and more idiots saying that hoarding is the reason for the high prices.

I'm not arguing against loosening restrictions on building though. IMO it's not an issue that should only be addressed from one angle. Allowing foreign corporations to essentially set the market in certain areas by buying up almost every available property isn't something you fix by just saying "Build more". Because there's a ton of variables with that too. Commodity costs, access to capital for builders, their risk tolerance, etc.

For example, if foreign companies have bought up most properties in an area to rent them which has driven prices higher, building more properties (be they single family dwellings or rental properties) can absolutely alleviate some of that price stress. But it's not a fix-all. Builders may look at the area and say "Well prices have been elevated due to a supply crunch, but we don't know exactly how much more legs this market has (how much more capacity is really being sought). Commodity prices are crazy high, we can't borrow $ for almost nothing anymore...so going crazy building here doesn't fit our risk model or our business plan."

I'm not arguing against allowing the markets to **generally** operate on their own. But there need to be guardrails when it comes to necessities like housing. The government has laws against people hording then gouging right? We all agree that for necessary items that makes sense. I don't think it's unreasonable for there to be some limitations on foreign companies being allowed to come in and scoop up entire neighborhoods (how common that is I admittedly don't know, but it sure seems as though a lot of people are claiming it's what's happening--which could be an exaggeration but the prices rising so rapidly tells me it's likely not) just to rent them out.

 

[Jack V Savage]

I'm not arguing against loosening restrictions on building though. IMO it's not an issue that should only be addressed from one angle. Allowing foreign corporations to essentially set the market in certain areas by buying up almost every available property isn't something you fix by just saying "Build more". Because there's a ton of variables with that too. Commodity costs, access to capital for builders, their risk tolerance, etc.

For example, if foreign companies have bought up most properties in an area to rent them which has driven prices higher, building more properties (be they single family dwellings or rental properties) can absolutely alleviate some of that price stress. But it's not a fix-all. Builders may look at the area and say "Well prices have been elevated due to a supply crunch, but we don't know exactly how much more legs this market has (how much more capacity is really being sought). Commodity prices are crazy high, we can't borrow $ for almost nothing anymore...so going crazy building here doesn't fit our risk model or our business plan."

I'm not arguing against allowing the markets to **generally** operate on their own. But there need to be guardrails when it comes to necessities like housing. The government has laws against people hording then gouging right? We all agree that for necessary items that makes sense. I don't think it's unreasonable for there to be some limitations on foreign companies being allowed to come in and scoop up entire neighborhoods (how common that is I admittedly don't know, but it sure seems as though a lot of people are claiming it's what's happening--which could be an exaggeration but the prices rising so rapidly tells me it's likely not) just to rent them out.

I think "foreign investors" (like immigrants) are a handy scapegoat but have a small impact on the real issue. And I look at the issue as "housing costs" rather than "house costs." Meaning, an increase in the rental supply is also good. I think it's good for the gov't to intervene and ensure that people have a place to live, but without a supply increase, such intervention cannot work (just kind of pushing the bubble down).

 

[Jack V Savage]

In many areas there's actually glut in commercial real estate. Seems like an obvious logical solution to alleviate the housing shortage would be to convert some of that commercial space to residential, but zoning is a problem.

In any event, it doesn't seem like either side is looking to push any major policy to address this issue, and I don't think it will be resolved by the free market alone anytime soon.

It's more of a local issue, and we're seeing a lot of major policy here in CA to address it. This is one of the things that markets do really well, if policy doesn't stop them from working.

 

[SurferH2O]

I'm trying to figure out the Math of it all, as it does not make sense here in California. We have a population that is reducing, yet they are throwing up low income housing everywhere they can fit it. They have taken away R1 zoning and people are building dormitories in their backyards. Those are filling with Asians that barely speak English. It's all kind of weird.

I have a Vietnamese (2nd Generation) neighbor/friend that is bitching and moaning about all the new Asian (Chinese) immigrants that can't speak English or drive for shit. He's good to have a beer with and he's sounding off like he's from the Gangs of New York, but he makes some thoughtful points.

 

[mkess101]

I think "foreign investors" (like immigrants) are a handy scapegoat but have a small impact on the real issue. And I look at the issue as "housing costs" rather than "house costs." Meaning, an increase in the rental supply is also good. I think it's good for the gov't to intervene and ensure that people have a place to live, but without a supply increase, such intervention cannot work (just kind of pushing the bubble down).

Not that you're comparing the two on this front, but immigrants and foreign investors really shouldn't be looked at in the same way at all on this issue. (Again, you aren't necessarily doing that but some are). Immigrants live in the community (be it owning or more often renting if they're relatively new additions to our society). They shop at the businesses, work, pay taxes and have at least a degree of interest in what the quality of life in a particular area is. (The amount they're invested of course depends on how transient they are--the longer one is likely to stay, the more they care about what life is like in that particular place). Foreign investment companies care about the bottom line. If they can push prices up by consuming the supply, that's generally good enough for them. They pay some taxes to be fair, but that's the extent of their contribution to that area. I suppose it doesn't even need to be "foreign" money either, really any investment group has this effect.

But yes, an infusion of supply in areas that need it is part of the solution. I agree. It's just not the entire solution.

 

[Ruke Doufus]

I disagree.

Moving to the US, buying some property, starting a business, enrolling your kids in the neighborhood school. It's the American dream and a great way to be a part of the community.

After all, being economically part of the community is a great way to assimilate.

Sounds like we do agree then since I said the tax should only apply to foreign nationals owning property and not living in it aka not participating in the economy.