this post was submitted on 18 Jul 2023
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Incentivizing people to build housing is a good thing, actually.
Yes let me use valuable resources to manufacture something that ALREADY FUCKING EXISTS
Honestly, wood isn't that valuable.
Also we have an insane shortage of housing
And an extreme shortage of affordable housing.
Yes lack of supply with an increase in demand yields higher prices.
The issue isn't really supply though, it's that houses are held as investments, not as property, and it massively inflated their value. That's created a lot of pressures that benefit from desperate homebuyers.
Twenty percent of homes last quarter were bought by investors compared to ten percent in 2010. Can you guess what happens when a fifth of home purchases are intended to generate more profit? Rent goes up, houses are flipped and sold at even higher rates, and homebuyers are squeezed further out by deeper wallets. New home builders intentionally reduced production because letting demand grow makes people more likely to purchase new homes, which are sold at a premium over existing homes. We're manufacturing just over half of the homes per month that we did back in 2005, and whenever sales are too slow (like in 2018) they just reduce completions until the market is forced to buy at the prices they want.
The moment housing became an investment instead of a place to live it steadily screwed over the market. If too many residential homes are released onto the market investment groups lose potential profit, but strategic purchasing and selling can maintain rising prices and steady profits. Not to mention that the collective investment spending of a couple hundred billion a year on buying up residential properties has a vested interest to ensure the supply doesn't ever catch up and reduce the value of their investment.
Basically the housing market has been a disaster for decades, and it happily continues downhill.
Houses are held as investments because homes are good investments. Homes are good investments because supply is too low
That's... A truly remarkable perspective lol. I just told you that the supply is artificially constricted to inflate prices and gouge profit, and your response is "that's what makes it good."
What's next, investment groups buying up a significant percentage of non-perishable foods if it'll make "good investments because supply is too low"? Basic necessities of life shouldn't be investments because supply and demand aren't really relevant when you need something. It's just extortion with extra steps.
A huge portion of the population is choosing not to have kids because houses are too expensive, and even if they manage to get one, raising a family on top of that is too expensive. When investments are negatively impacting the entire population of a country, that's a bad thing.
I never said it was good. Homes shouldn't be investments. Ideally, they'd depreciate in value without renovation.
The reason they appreciate in value is we don't build enough.
Yes, though you did just call them good investments. An investment being good solely because the market is an anti-consumer purgatory isn't a good investment. The moment the housing market is fixed the investment collapses back to being driven by property location instead of the simple fact that its exists. Not to mention concerns about another housing market crash or recession waiting in the wings.
Homes should depreciate in value, similar to cars, and imagine what would happen if car manufacturers decided they liked the Covid price points and supply constriction, and started treating them like the housing market? There's more money to be made in ensuring there isn't enough supply than there is in meeting demand.
I can recognize the reality of a good investment while disagreeing that it should be a good investment.
People aren't building because they are choosing not to. They're not building because they literally can't.
Probably would have been worth clarifying that distinction earlier, but I'm not attacking families looking to pay for a home to be built. Construction companies that build new homes en masse are doing so to make money, not to address the housing shortage.
Much like Nissan being pleasantly surprised at making more money by discontinuing production of their cheaper models, larger construction companies aren't at some sad loss to meet demand. they acquire building permits based on how many months of completed housing supply they have waiting to be purchased. When it passes a certain level, apparently 6 months of supply, they slow down completions and reduce the number of new permits until the supply is sold at the prices they want.
Otherwise it would be less profitable. I'm not saying there aren't other issues, and smaller home building outfits struggle with local permitting, keeping employees, and rising prices for materials and appliances. But a huge issue with the industry is that it's fundamentally against their best interest to solve the housing shortage. There's a happy little feedback loop between builders and investors that keeps pumping home prices up, which lets new ones be sold for more, which pumps home prices up. Which restricts more and more of the housing market to investors, until the dystopian future where everyone rents except for the lucky souls that inherit the family property.
It is not against anyone's interest to build housing and you're making a lot of frankly absurd claims here, specifically just to villainize people.
Highly recommend you look up criticisms of SFH zoning policy
I have, and I'm not making absurd claims. Zoning issues (including NIMBY) are directly tied to housing values, with the restrictions on construction intended to prevent home values from dropping. They do this by reducing the development of supply in the area. Home builders reduce the number of housing starts and completions take longer when housing prices dip, this constrains supply until demand boils over and purchases new housing. Investment groups buy, rent, and occasionally sell residential properties and the wealth they control allows them to influence market rates and lobby against market reforms.
This isn't some conspiracy theory about how it's a massive organized anti-consumer effort, because it's not. What it is, is a series of natural market forces that all come together to sustain the problem because it's incredibly profitable, and any solution would immediately cut into that profitability. There's no direction to go that doesn't "harm" either builders, investors, or owners, which is why it remains deadlocked and the only government efforts attempted are toothless. Somebody's gonna have to lose potential profits, and there's not a lot of political will to make that happen.
https://journals.sagepub.com/doi/full/10.1177/00961442211029601 https://www.propublica.org/article/when-private-equity-becomes-your-landlord https://www.redfin.com/news/investor-home-purchases-q4-2021/ https://archive.is/8umYO https://www.housingwire.com/articles/homebuilders-are-pushing-through-inventory-backlog/ https://www.weforum.org/agenda/2022/06/affordable-housing-development-nimby/
So precisely the opposite of what builders want, then.
Glad to see you're a YIMBY, even if you're crazy. We'll take everyone we can get
Sure lol, the builders definitely aren't profit driven organizations that operate based on market forces. It's not some insidious thing, just a natural function of capitalism.
But yeah, we can at least agree on the YIMBYism. Out of everything, it at least provides a path forward that people can affect.
How is a builder going to make money if they aren't building lol
Capitalism works when we let it
By selling what they've built? They don't make any money while building. I don't expect you to read all of the links I offered, but at least skim them lol. Slowing completions and reducing starts keeps per unit profits high, as the alternative, cutting prices and accelerating completions and increasing starts boosts revenue but reduces per-unit profits. Small construction outfits have no choice other than continuing to work, but the larger ones can just slow expenses and refuse to move on price until they're purchased.
Capitalism just tries to make as much money as possible. That's only a benefit when human well-being and profit are aligned, and otherwise just inevitably results in monopolies if we let it.
Have another source https://archive.is/tosob
Bro your links are totally unrelated to the discussion.
This is just nonsense. Same team but like, that doesn't mean we need to interact.
Bro.
The first set were, in order, a deep dive on an investment firm and their impact on residential property, the impact of private equity on multi-family residential property, the broad spectrum impact of investors on the residential market, another article on investors driving up home prices, homebuilders drawing down production and waiting out customers at the same price, and the last is a global perspective on the housing crisis by the World Economic Forum.
If you actually read them, you'd recognize literally everything I've said. I get skipping the article on Blackstone, because it's an actual research article, but it details how Blackstone and Invitation Home would buy entire neighborhoods and then use that foundation to manipulate home and rent prices in the entire area, further improving their return on profits.
The one in the last comment was "Capitalism just working" during the pandemic lol. Which is half a joke, but to not see the relevance of the others is just wilful ignorance.
Bitch what?? You think trees aren't valuable??
Just because a corporate asshole doesn't put high monetary value to fuckin trees don't mean they aren't the literal biggest focal point for almost all human advancement.
removed you think we'd be even close to where we are without wood?
Not just that but wood is a nonrenewable fuckin resource bitch. It don't come back in our lifetime dumbass. Yeah it's fucking natural but so is me ripping your asshole out your mouth bitch.
Some trees are valuable, especially at certain times of year. Wood is hardly scarce.
You seem to not understand the difference between important and valuable. Grasshoppers are important, but not very valuable.
Tell all that to deforestation bruh. Tell that to the fuckin Amazon which is being cut and burned for fuckin money. Tell that to the trees that take centuries to fuckin grow meanwhile we cuttin them down by the millions.
If you ain't seein it yet you'll see it soon, but we need these fuckin things.
Again, some trees are indeed valuable. Is it your belief that wood for US homes comes from the Amazon? Lol
Do you think lumber is the only purpose trees have?
Do you only come on here when you're high as fuck, or what's up?