So much of the journalism we read is heavily processed and barely-reported and it's startling to see how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed.
We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.
I've been loving Thompson's substack (which is mostly not about housing policy so far).
Reporters used to start at something like the City News Bureau.[1] For a century, the City News Bureau covered local news for Chicago and sent it in to the local newspapers. Lasted until 2005. Young reporters started there, covering every police station, every major crime, every major fire, every major trial, and getting the facts right, or else.
The bureau`s unsentimental motto: ”If your mother says she loves you, check it out.”
We need that again. As I point out occasionally, read news, and ask yourself which stories started out as a press release. For the City News Bureau, nothing started as a press release. They had people pounding the streets of Chicago for a century. Today, the pundit to reporter ratio is far too high.
There's a great book about the Bureau, called "Hello, Sweetheart, Get Me Rewrite". (by Dornfield, not the one by Sears, which is something else entirely.)[1]
Legacy journalism has changed from a low-barrier-to-entry working man's occupation, with entry level reporting leading to high-paying punditry, into a high-barrier-to-entry ivy league occupation with new entrants to the field expecting prestigious positions from the start.
It’s also what’s called a high prestige low pay career which is by definition exclusionary of poor and middle income people, so the news makers are further and further detached from regular people.
There are still hundreds of thousands of journalists around the country who don't have ivy league educations and are getting paid a pittance to work in their fields. I once worked for a publisher which hired reporters making $12 an hour who easily worked over 60 hours a week. Big city reporters might push out a few stories a week. The small town people are cranking them out by the dozen, with about 3/4ths of their bylines being "<newpaper>" Staff so that people remain unaware of how understaffed these papers are.
The problem is that nobody would pay for it. People expect news to be free, and click bait and lazy copy paste or LLM journalism is cheaper and works just as well to get clicks for ad dollars.
Depending on the specifics of the publication, we can broadly say that print media used to get more revenue from advertising than people actually buying the physical media.
You could Google it and read about the decline but Wikipedia is a place to start:
You're really just observing that the marginal cost of reading is tiny. That doesn't mean that the fixed cost of producing an article or edition isn't very large, and needs to be paid for somehow.
I think about this from time to time. Personally I would pay per article if it's convenient. I don't want to shell out $20/mo for, say, the Economist right now but if there was a particular article I wanted to read I'd probably pay a few bucks.
The papers wouldn't go for it, but these days I can subscribe to individual writers I like on Substack rather than paying for a newspaper subscription and subsidizing content I don't care about. More bang for buck. People have to be met halfway.
> I don't want to shell out $20/mo for, say, the Economist right now but if there was a particular article I wanted to read I'd probably pay a few bucks.
The Economist is one of the few news sources worth paying for.
Every week, there's a tour of the world's major events, by region. There will also be an in-depth article on one country (how's Rwanda getting along?), an in-depth article on one industry (what's the situation with bauxite supply?) and maybe a section on some technology (water desalination, who's doing it?) Over a year, most of the world and most of the industries are covered. Read the Economist for a year and you get a sense of how the world works.
The target audience is the movers and shakers of the world. Look at the employment ads.
There's a general pro-capitalism bias, but it's British-European, not US-oriented.
I love their writing, but I hate their subscriptions. The only way to cancel is to talk to customer service via chat or phone, who will keep begging and insisting that you not cancel and offering discounts to try to stop you. When I finally did manage to cancel, it required at least half an hour of insisting to some salesman.
I originally planned to just take a break, but after that distasteful cancellation procedure, I didn’t feel like resubscribing.
The Economist regularly goes on sale at discountmags.com. For years it was $1/week, but recently the price increased to $75/yr. It's not on sale at the moment, but for anyone interested, I recommend setting up a deal alert at slick deals [1] to get notified the next time it's on sale - probably around Black Friday / Christmas.
I have been subscribing to the Economist through DiscountMags for over a decade now, and consider DiscountMags to be a totally legitimate business. DiscountMags does automatically enroll you for their "DiscountLock" auto-renewal when you place an order, but you can turn it off at any time through their website without talking to anyone (and I would recommend turning off DiscountLock as it no longer locks in the original price like it used to... so better to just re-up during a sale period).
The problem with current paywalls is that each one wants you to purchase a monthly subscription to read the article, I don't want to have a subscription for each news site I might want to read an article from. I'd like a convenient way to pay a few cents per article, I could maintain my own balance of "news budget" per month and spend it, but paying US$ 5-10 at each paywall I encounter is simply not viable.
All newspapers got fucked by the internet, I can't comprehend how they didn't figure out that banding together to provide a centralised service to allow me to keep a balance and pay out per article read might have worked. Instead they defaulted to using Big Tech ad networks to patch their lost revenue.
Make it convenient and people might pay, requiring a subscription is definitely a huge friction on the top of the funnel, I'd even say it's a very fine mesh grater. No one wants to go through a fine mesh grater to read news articles.
> The problem with current paywalls is that each one wants you to purchase a monthly subscription to read the article, I don't want to have a subscription for each news site I might want to read an article from.
Yet people love their monthly subscriptions to listen to a song or an album (Spotify), or to watch a movie (Netflix). It's clear to me that the future of written content, especially news, is mass syndication (like you mention). Where you pay a monthly subscription to get access to a wast library of content from different sources.
One big difference there is that for the vast majority of people, they can get the vast majority of their music or video content from that single service (or at worst a small number of them).
But for reading news articles, there's a LOT of diversification. It's nowhere near one-stop shopping. In fact, a responsible reader ought to want to diversify points of view to avoid bubbles.
Of course, that doesn't eliminate the possibility of an industry consortium allowing a reader to pay into a single pool and read content from many sources, with payment distributed in some equitable manner.
That's what I'm suggesting. If music streaming services can offer both gangster rap, classical music, heavy metal and pop, then surely a news/article syndicator should be able to offer access to papers from vastly different perspectives. I want both extreme right and extreme left, and everything in between in the same subscription.
Lets be real here, in the past advertisers did pay for it, but all advertising spend has moved on to the clickbait-youtube/google/Facebook garbage heap.
Nobody pays for news from the NYT. NYT is a game developer that also provides news on the side. Their games are their main draw; my gf subscribes and never reads the news.
The legacy media were advertising companies who also happened to provide news. People aren't willing to subscribe for advertising, but they will for games.
If we're going by anecdata, here's another data point: I subscribe to NYT and don't play any of their games. Yes, I read it for the articles but also, to a large degree, for the subscriber comments as well. Similarly to the reason I frequent Hacker News. And to stay up to date with what has been my home for a long time. And also NYT Cooking, though I only access that once in a blue moon.
It's fascinating to me that people would pay to read obvious political propaganda.
I get that the state-sponsored "news" in many EU countries is heavily politically coloured, but why would something like NYT be if they have paying subscribers? I never did the research, but I'm guessing they must have huge additional streams of income besides payments from readers?
Don’t take it too seriously. NYT reporting contrary to the reader’s politics = propaganda/shilling. NYT reporting in line with the reader’s politics = hard hitting journalism speaking truth to power.
You think nobody accused the NYT of propaganda during the Pentagon Papers years? Or ultimately, any other publication during any other period? What's new?
It's a form of tithing. You give to the propagandists providing the slant you align with, even if they're wealthy billionaires. It's been common for belief communities for centuries. Poor people do it for access to wealthy individuals or as a form of gambling on the promises of the propaganda, and wealthy individuals, when they give, are also doing so for influence (access to poor people en masse). Its propaganda all the way down.
Traditionally it was ads that contributed most of the money a newspaper took in, but the fact that people were paying for the paper re-assured the people buying the ads that the papers were actually being read.
NYT is an exception, or more specifically it's much bigger than most other news shops and has the luxury of having a large loyal customer base, a brand reputation to defend, and a full time business analysis and data science team to upkeep its excellence. Your local papers are barely scraping by and are mostly owned by hedge funds whose primary objective to squeeze the consumer via judicial usage of paywalls and clickbaits. A commitment to truth and deep investigative reporting for them does not keep the lights on. The other papers and magazines are all subsidized by billionaires or other vested interests. The price for those is indoctrination.
Just like the old days, when people would subscribe to the daily newspaper for the crossword, the comics, the TV listings, the want ads, or the ads and coupons with the Sunday paper.
NYT is really just making the old newspaper model work in the new age, albeit with higher reliance on subscription revenue and less an ad revenue.
I’m reasonably sure that most of the national-level news media companies have been owned by millionaires (and now billionaires) for the last century. William Randolph Hearst, E.W. Scripps, the Ochs-Sulzberger family, Raoul H. Fleischmann, Cyrus H. K. Curtis are a few of the prominent wealthy owners of nationally-distributed news outlets and publications in 1925. Back farther to the Civil War you find more “independent” publications but it’s a challenge to determine which of them were privately owned by individuals of considerable wealth vs. those owned by their publishers who may or may not have been wealthy.
That's no different from the other papers and magazines.
Paid subscriptions have never been a significant source of revenue to newspapers. They relied on advertisements, just like the websites that killed them.
That's not entirely true for NYT as OP mentioned. NYT is 170 years old. They have been through many phases and models.
Luckily NYT is a public company and you can look up their revenue split on the SEC website going back to 1994. In 1994 they had 35% revenue from circulation vs 65% from ads. In 2021 it was 24% ads and 68% subscribers and 8% "Other"
Tells you how hard advertising collapsed in the same time period. I was at a small chain of local papers from about '09-'13. I saw it first hand.
Classifieds used to be a cash cow... not EASY money nessesairly, it's made $20 or so at the time, but it was a lot of money. Things like apartments for rent or cars for sale.
Then craigslist came a long and killed that.
Similarly ads went from large purchases, often for very large placements (we'd do things like sell rights to entire sections for flat fees), went to Pay Per Impression models paying hundreths of a cent, with no guarantees or minimums.
The Washington Post is also a public company (before 2013). In their 2009 filing, they state that the newspaper's revenue (in 2008) was 51% ads, with the other 49% not attributed.
At that time operating expenses exceeded revenues by 25 million dollars, though this was not an immediate problem for them because they owned several other more profitable companies.
By contrast, in that same year the New York Times announced that they had managed to stave off insolvency by securing a large personal loan from Carlos Slim, who went on to become their biggest shareholder.
How are we distinguishing between these two newspapers? What's supposed to be "exceptional" about the New York Times?
Why are you looking at 2009? Is it because you think it fits your narrative? What happened in 2008 I wonder that may cause companies to be struggling? NYT is a profitable company with majority of their income coming from paid subscriptions. Does that answer your question about how they are different or do you wanna check their revenue split and financials in 1928 too?
A business secured a loan from a billionaire after the GFC and paid it off in 6 years. The billionaire also acquired a significant position in the business that he has mostly exited with a significant profit generated from the business subscription model. More on this crazy story as it unfolds at 11
It's no different -> Paid subscriptions have never been a significant source of revenue to newspapers -> well, they were struggling in 2009 -> ...
I'm looking at 2009 because the claim above was that newspapers other than the New York Times, but not the New York Times, are subsidized by billionaires, and 2009 is the year that the New York Times had to beg for a subsidy from a billionaire. Was that not clear from my comment?
How is taking a loan a subsidy? do you understand how loans work?
It's no different -> Paid subscriptions have never been a significant source of revenue to newspapers -> well, they were struggling in 2009 -> they took a loan that one time -> ...
If the NYT could sell those shares at the market price, they'd have been able to sell them to public markets. The only reason they'd possibly have to transacting with an individual is if there was something about the deal that exceeded the debt or equity financing available publicly.
> Slim's investments in the company included large purchases of Class A shares in 2011, when he increased his stake in the company to 8.1% of Class A shares,[43] and again in 2015, when he exercised stock options -- acquired as part of a repayment plan on the 2009 loan -- to purchase 15.9 million Class A shares, making him the largest shareholder.
Your point being? I just want a coherent response from you. Your initial question was how is the NYT different as you assumed they make all their money from a billionaire benefactor and that subscriptions are not a significant part of the income of any news paper. Now it's about that one year where their income wasn't doing well. And they took a loan. And the creditor bought stock that they sold later.
Surprised that no one has mentioned 404 media, a dedicated news sub I pay for annually. Good reporting is worth it to me, especially to get past all the b.s. marketing hype and influencer shilling. Maybe they’re unpopular here on HN but I stand by the sentiment: legit, good journalism is worth supporting financially.
The underlying assumption is that of capitalism, that is, that things should be profitable or at least self-sustaining. But if you do that, things like the USPS donkey train [0] would be stripped, the US military would / should be reduced to a fraction of its current size or down to nothing, etc.
Independent news should be completely free from capitalist interests.
> But if you do that, things like the USPS donkey train [0] would be stripped, the US military would / should be reduced to a fraction of its current size or down to nothing, etc.
and that is a problem because?
These are funded by tax dollars collected. It's impossible for people to stop paying for them whether they make sense or not.
Sorry to derail this thread on journalistic merit..
I just thought that this other thread on housing microeconomics is worth pointing out, to anyone who might be excited about the prospects of enlightened tax policy
Yes the deeply depressing thing is that these sort of city news articles are now very much taken verbatim from press releases, and those press releases are from professional police communications departments, and so this gives enormous new powers to the police in able to shape the broader narrative as their politics and agenda see fit.
Maybe it wasn't even an overworked city reporter that did this but simply an automated AI creating news articles straight from the police press releases.
> We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.
I think a large part of it is that major news organizations too often don't do this kind of reporting, and often just seem to chase the same hot button topics as the rest of the crowd over and over again. And even then, few really dive into the details.
You're larger point is entirely correct, that there's a ton to be learned from old school journalism, and there are people out there doing it. But it's unsettling how much of it only gets covered by citizen journalists doing this in their free time, not by professionals who are supposed to be doing this for a living.
For example, the D.C. Attorney's Office had been simply dropping 2/3's of the criminal cases that came to them. No one noticed this until a anonymous internet account, DCCrimeFacts, went through the records and realized that this had been happening for years. Once that account wrote about it and it gained traction, major papers like the Washington Post started reporting on the story, it eventually ended up being an issue in Congressional hearings, and lead to changes in the way the U.S. Attorney's Office operates.
The account spent a lot of time digging through records and reporting on issues with the criminal justice system you wouldn't find elsewhere. But it was someone's side project, and there haven't been posts in a year.
Another example is the FAA scandal, when the best information has come from a single blog post by a law student who happened to go through the legal paperwork and was surprised that this hadn't been reported on.
The professional news media outlets do have some good reporters, and sometimes there are important deep dives there as well. But they feel few and far between, usually opting to chase infotainment (or sometimes the pet projects of a particular journalist).
It's amazing how many big stories we only get if some random citizen happens to spend their free time doing a personal journalism project, and if that project happens to get enough traction that people actually read it.
> I think a large part of it is that major news organizations too often don't do this kind of reporting, and often just seem to chase the same hot button topics as the rest of the crowd over and over again. And even then, few really dive into the details.
The point of most media is to drive agendas, not uncover the truth. Doing proper reporting would create a problem and get in the way of what you want people to do.
Journalism has all the problems of being a shrinking high status low income industry. Living in NYC I know a few journalists, and if you scratch below the surface on many of their bios they are quite often from wealth of one form or another. At least enough wealth to subsidize them living in an expensive NYC zipcode on awful starting pay with low growth and ceiling.
So it really is quite a monoculture. 20 years ago they all lived in UWS, now it's somewhere between Park Slope and North Brooklyn. Ever noticed how many local color stories used to be UWS focussed and are now Brooklyn? A lot of trends pieces are "stuff I noticed in my friends group" type of depth, and they all have the same friends groups. They literally don't know what they don't know.
> how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed.
Matthew Stoller called the people Derek Thompson called, and some said Derek had misrepresented their opinions. So shoe leather caused the narrative of this so-called reputation to collapse as well.
In any event, my argument was also that three other factors — particularly financial policy changes starting in the 1980s that deprived small builders of bank capital, helped Wall Street to exert control over large builders and impose production discipline on them...
Musharbash's argument, however, is dependent on the exercise of oligopoly power (whether he admits that or not, and given that he's long argued that the oligopoly is present...), and there's no evidence of it!
He tries to twist Lambert's words to say he's only saying there's no evidence of builders throttling at a national scale, thereby leaving room for his argument that it's happening in particular markets (https://x.com/musharbash_b/status/1951133245342404888). The only problem? Lambert clearly isn't specifying a national scale when he says "US," because he then continues by providing an explanation for the local weakening seen in some metros.
Musharbash seems smart enough to understand that, which leaves intentional misrepresentation. He's doing damage control, and hoping to wave his hands hard enough that it isn't noticed.
Understood, but it's also the case that people frequently cite Stoller as if he's a legitimate analyst like a New York Times or Wall Street Journal reporter with skills and editors, and he doesn't actually understand any of the subjects he's trying to report on. I'll dial the snark back.
That didn’t age well. Based on the response it sounded like he made it up whole cloth or just completely ignored big portions of what the people he called said?
I've been involved in a lot of discussions about "what is journalism? what do real journalists do?", and the best response I've heard was from Ian Betteridge (of Betteridge's Law fame), who told me "Journalists pick up the phone." It may have already dated as a pithy description, but the idea of literally calling[1] people to fact-check or dig deeper is a low bar that a surprising amount of current journalism doesn't clear. And I say this as someone who has definitely done the non-journalism: just writing an opinion, or a column, or blog post, or whatever. Or, perhaps most insidiously, when you have a thesis for an article and you just collect the (partial) facts you need to flesh out that thesis.
I know why people blame the internet, the drop in rewards for journalism, the pressures to churn out text, that has led to. But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do. But it's as Thomas says, that scarcity means that it's still as valuable (and recognisable) as it always was.
[1] Or emailing -- but emailing, and emailing, and emailing, then calling, and emailing again until you get an answer.
> I know why people blame the internet, the drop in rewards for journalism, the pressures to churn out text, that has led to. But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do.
As someone both built for and trained to do it, I can tell you I'd be making at least US$150k/year less if I was still doing it. I wager I'd be short about $1.25M in career earnings through just salary in the time since I moved from the copy desk to tech.
That's factoring in how, through the first third of my tech career I was still making just $35-60k/year. And I was ecstatic, because $35k was a five-figure raise over running the front section of a daily newspaper.
Every person in the first two newsrooms I worked in is either dead or has left the journalism field completely, including a Pulitzer Prize-winning author and the entire team of editors, artists, and photographers who worked on the winning story. Most are now in PR, consulting, or (as a symptom of being near the Gulf Coast) in some arm of the fossil-fuels industry. One of the last whose career I keep track of just took up mail-order baking.
It's a financially unsustainable field in any market. At 5 years' experience at the head of the editing wheel, I was living paycheck-to-paycheck paying just $400/month in rent, living with two roommates in a single-wide trailer in the middle of a sugar cane field.
The vast majority of those City Desk-style journalism jobs made primary-school teaching salaries look attractive _25 years ago_, much less now. By the time I left, all of those jobs that I knew of had either moved to contract gigs or stringers (freelancers paid by column inches of text) unless you were in a big-city market or working for a regional/national paper.
The myth of building up a journalism career at an institution from the bottom of the org through shoe-leather reporting alone, without already knowing or being related to someone who could move you ahead of the rest, was already far past dead in most of the US.
If I could find a journalism job that paid half what I make now, made me travel constantly, had shit benefits, got me put on watchlists, made me deal with some of the slimiest people on the planet in the forms of career local politicians and court lawyers on the daily, and put me in precarious situations... I'd still probably take it, because I miss it every day. But that job flat-out does not exist in any form that I'd get a callback for unless I married into a publisher's extended family, and hasn't for decades.
I was a teacher and stopped in 2011. Pay was $38k/yr with summer school. Looks like the same southern California inner city school district pays $68k/yr now for the same pay step. That is a big jump but I am not sure I would call it attractive. And in North Carolina's state capital, where I am now, the rate is $50k/yr. That is some struggle-bus territory.
My first programming gig doubled my income and nearly halved my hours. The stress lowering alone would have been worth it. I haven't had anyone try to physically fight me as a dev. I think the same applies today; teachers are underpaid.
In Chicagoland, it's one of the better benefits packages you can get in a widely-available job. Defined-benefit pension, great health, huge amounts of vacation.
I assume I'm somewhat impartial, I don't know this author, it's the first time I hear of the "antitrust left" or of the argument that big monopoly builder purposely keep the market scarce to increase prices. And it's not an issue that I hold a strong opinion about.
The way the piece reads to me is a "He said, She Said". And I have to choose whose word I trust.
Two articles, both claim to have spoken to expert sources, both claim the expert have told them X and Y. One says the expert told them things that corroborates the idea of the "antitrust left", and the other claims the sources actually disagreed with it.
So my personal take is that both appear untrustworthy and biased, pushing their own distorted narrative.
The crazy part about this is that it is fundamentally a competition problem, but they misidentified the perpetrators. It's not predominantly construction companies colluding with each other in the market, it's land owners colluding through regulatory capture of zoning boards to constrain construction.
Or, to the extent that it is construction companies, it's still regulatory capture rather than market collusion, but in their case it's capture of occupational licensing to artificially restrict people from entering into the trade labor market.
Hold on. Take the first claim. Derek Thompson called the author of the paper who effectively said "no my paper does not support the claims made".
So either:
1. Derek Thompson is flat out lying
2. The author is wrong and confused, or
3. The critics are wrong
The critics haven't claimed to speak from the author to confirm their interpretation is correct. So to think the critics are right you have to think the convo is a lie or the author is muddled and confused.
I think it's possible that Derek Thompson is just doing the same thing he is calling out.
4. Derek Thompson interpreted a short conversation with the author the way he wanted to hear it.
The author might have said a bunch of "nuanced details" in that conversation, and he took it as: "I knew it, author thinks their claims are bogus."
If I recall, I don't remember seeing any part of their conversation quoted word for word, or even the name of the author he contacted in the article. (though I might have just missed it)
It's this one. The person he called made a lengthy follow up post. It's clear Thompson purposely misrepresented the conversation.
It's helpful to understand why the "abundance" movement exists. Its only purpose is to stop the Democratic Party from addressing concentrated economic power. It's funded by the concentrated economic power.
This isn't an academic debate, it's an attempt to maintain power by a discredited group of people who recently presided over the collapse of the Democratic Party and are desperately casting around for a narrative where that's not what happened.
No, this article is saying that the sources are saying they never supported the original thing.
It’s a proof by falsification. It’s not saying necessarily that there isn’t some monopoly builder issue somewhere. It’s saying the current movement is based on complete bullshit.
I sometimes think back to a passage in "dialectic of enlighenment" where the authors write what amounts to "input without analysis is meaningless, but analysis without new input is madness as the analysis eventually becomes only analysis of other analysis".
I think that generally a true problem nowadays. Popular culture does a lot of "analysis", but not a lot of reality seeking.
This article is good, but the phrase "antitrust left" really turned me off. I am probably some kind of a leftist (I want higher taxes on rich people and a society much more welfare oriented with a substantial degree of labor and resource allocation performed democratically instead of by markets) but I don't know a single leftist who actually cares about this housing shit except to think that houses should be cheaper by any means necessary. Like the idea that there is an active contingent of leftists trying to construct some kind of defense of the current housing system or critique of reforms (in general) aimed at making it easier to build houses strikes me as truly bizarre.
There may be some environmentalists who have housing as a pet peeve or something, and there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way.
I live in a very wealthy, extraordinarily progressive muni (almost certainly in the top 5 nationally), and my primary political project is zoning reform, and I assure you that left-NIMBYism is a thing, and that the "we should make blue state governments perform better and increase supply of things people want" thesis of "Abundance" (Thompson and Klein's book) is a bête noire among those leftists.
The argument isn't that the left broadly construed opposes housing legalization! Just that there's a prominent faction of them that do. Right-NIMBYs are a much bigger problem across the US.
Thompson recently recorded a podcast episode with Zephyr Teachout, taking the "we shouldn't do anything before we address antitrust" side of the argument; you can listen to it if you think "the antitrust left" isn't a real thing. Understand: the issue isn't antitrust; it's a totalizing worldview based purely on antitrust. Antitrust is probably super important! But where I live, zoning reform is much more important.
Keep in mind: Klein and Thompson's political project is a plan to organize the Democrats. They're not talking to the Republicans. Not in the sense they're talking to Democrats, at least. I don't think they could make that much clearer than they have.
Here in extremely liberal Portland, there are a huge number of people who genuinely believe that 'greedy developers' are the cause of the nationwide housing shortage, having talked themselves into the nonsense belief that building fewer homes makes people more money.
That belief has reached prominent political leaders as well. I listened to a bit of the Ocasio-Cortez/Tim Walz Madden livestream on Twitch, and they were talking about how something needed to be done about the greedy developers who were driving the housing shortage.
So people in comments are pushing it? That's not meaningful. I can find a Republican who pushes pedophilia would you act against Republicans because of that?
I have been doing YIMBY stuff for around 8 years now, and it does not map nicely onto any kind of left-right narrative.
There was one conservative dude who ran for city council here who was all about 'private property' and 'get rid of government regulations', who also ran against the idea of liberalizing zoning.
I've met left wing people who I agree with on many issues who will do the most spectacular, Olympic level mental gymnastics to avoid the notion that 'supply and demand' apply to housing.
There are moderate Democrats who are big backers of various reforms. And some on the far left who get that if you want Vienna style social housing, you also need Vienna style zoning and building regulations.
A former mayor here is a moderate Republican - he totally got what we were about and said some really nice things about welcoming new neighbors in one speech a few weeks after he met up with our YIMBY group.
It's just not an issue that - so far - has been slotted into the trench warfare that other issues have been.
It's dogmatic among the left that "market based solutions are bad". And because Abundance embraces market solutions, it must therefore be bad too.
Basically, all the arguments I've seen against Abundance tend either towards the ideological, or irrelevant. I tend to see very little empirical arguments.
Tons of the critics of the book haven't even read it, because large portions of it are about making the government work better, not just using market-based solutions for all our problems.
Housing, though, could definitely use a better market with less constraints like zoning.
I don't disagree with that. I think economic power getting concentrated in a relatively small number of hands is unequivocally bad.
That said, the Abundance argument for building more housing is that in many local housing markets, the pendulum has swung too far the other way in ways that are well-meaning but ultimately counterproductive. This very article makes the case that oligopolistic economic power is not the reason for unaffordable housing.
The housing market is anything but a free market. In a free market, a bunch of NIMBYs like these would not have been able to stop homes from being built:
But you literally described the moderates being YIMBY and the more radical being NIMBY, which is left-right, but instead of left vs. right on pole ends opposing, it's the leftists and rights agreeing on NIMBY against the moderate centrists. Horseshoe theory strikes again. There is a growing populist frustration where citizens like both people like Tucker Carlson and Bernie but hate the moderate establishment. Low educated are frustrated with outcomes (ironically being NIMBY on housing is a primary cause) and go extreme compared to the educated moderates.
I also included a far left example who got it. I should have kept going with the examples because there are also plenty of moderates who do not want to rock the boat. The governor of CT vetoed their big housing bill this year.
Supply destruction to put a floor on prices is not an unknown phenomenon.
The effort to make it seem silly to think that there aren't enough houses because the industry whose job it is to build houses did not build enough houses is itself a little silly. Circumstantial as the evidence may be, it's logical to assume that they didn't because it was more profitable not to.
> Circumstantial as the evidence may be, it's logical to assume that they didn't because it was more profitable not to.
This willfully ignores evidence that community after community has actively passed laws to stop that industry from building more.
Chesterton's Fence: why do those laws exist? Because people thought they were necessary to stop housing construction (especially, but hardly exclusively, densification).
It's not a partisan thing - red states are full of NIMBYs and littered with HOAs too - but the largest cities in red states have happened to not be hit quite as hard yet because they are generally newer cities, with plenty of room to sprawl horizontally still, starting from a lower baseline.
> Supply destruction to put a floor on prices is not an unknown phenomenon.
The business model of construction companies is to buy a piece of property, develop it and then sell it for something more than the cost of buying it plus the cost of developing it. Constraining supply increases the cost of property which they then have to pay in order to acquire properties to develop. It isn't really in their interest to increase their own costs.
The most significant way it could be is if they were buying lower density units and replacing them with higher density units, so they'd be selling more units than they're buying and therefore benefit from the price per unit increasing. But in order to benefit from that they'd need to be increasing rather than decreasing the supply, which is contrary to the premise of them doing the opposite.
> The effort to make it seem silly to think that there aren't enough houses because the industry whose job it is to build houses did not build enough houses is itself a little silly. Circumstantial as the evidence may be, it's logical to assume that they didn't because it was more profitable not to.
Suppose that it would be profitable to buy a single family home and replace it 10 condo units, except that there is a law prohibiting you from doing that. Then it would be more profitable not to build those units, since doing so is illegal. But who is to blame for this?
> The business model of construction companies is to buy a piece of property, develop it and then sell it for something more than the cost of buying it plus the cost of developing it. Constraining supply increases the cost of property which they then have to pay in order to acquire properties to develop. It isn't really in their interest to increase their own costs.
Let's say for a moment that this is close but not quite actually the business model.
Let's say that the construction companies have spent a long time buying up vacant lots, faster than they are developing them, such that they now have a large inventory of land and would not have costs go up to continue operating if they did what you say.
At that point you've ceased to describe construction companies and are now describing real estate speculators while calling them construction companies.
Moreover, notice how little sense that business model makes. To do that you would be sinking capital into vacant lots that you're neither developing nor receiving rents from while paying both property taxes and opportunity costs. You're paying interest on the loan or could have been getting ~10%/year by putting your money into the stock market. A real construction company would be trying to minimize the period they're holding an unproductive property.
And even if you wanted to be a real estate speculator, how does that make you more money than investing in rental properties and then actually renting them out so you receive rental income on top of any price appreciation?
Meanwhile, what, if not for zoning rules and other regulations, is preventing anyone else from undoing your attempt to constrain supply by opening up a new construction company which is actually a construction company?
You must be drawing from experience in a specific locality in the US, probably a rural one, because what I described is how land sales in the largest cities in the US has worked for half a century.
Doing what I described in New York City is exactly how Donald Trump made an initial fortune back in the 80s. It's happening right now in Seattle.
The business model not making sense, is due to the incorrect assumptions you make. For one, that land or buildings in cities appreciate less quickly than the stock market.
> At that point you've ceased to describe construction companies and are now describing real estate speculators while calling them construction companies.
I'm not sure what you think the difference is in practice. There may exist some construction companies that don't engage in real estate speculation, they just aren't the big or most profitable ones. Which addresses:
> Meanwhile, what, if not for zoning rules and other regulations, is preventing anyone else from undoing your attempt to constrain supply by opening up a new construction company which is actually a construction company?
The fact that the most valuable land is owned by other construction companies who have more money because of the real estate speculation.
> Doing what I described in New York City is exactly how Donald Trump made an initial fortune back in the 80s.
The total value of NYC real estate is approximately $2.8T. Trump has a net worth of something like $5B. Even if all of that was invested only in NYC real estate (which it isn't), it would be less than 0.2% of the NYC real estate market, which is hardly enough to have market power.
> The business model not making sense, is due to the incorrect assumptions you make. For one, that land or buildings in cities appreciate less quickly than the stock market.
That doesn't appear to be accurate. Metro housing prices have increased by more than wages but not by more than e.g. the S&P 500.
> I'm not sure what you think the difference is in practice. There may exist some construction companies that don't engage in real estate speculation, they just aren't the big or most profitable ones.
You're just pointing out that real estate speculation has been more profitable than construction, which is exactly the problem -- we make construction too expensive, on purpose, which is what increases the profitability of speculation. That some companies do both is a poor excuse to blame the construction companies for what the speculators are doing.
> The fact that the most valuable land is owned by other construction companies who have more money because of the real estate speculation.
Nobody even owns most of the land in any major US city, much less all of it. The properties that could derive the largest increase in housing units would be to replace single family homes with multi-unit complexes and the majority of existing single-family homes are owner-occupied.
> Klein and Thompson's political project is a plan to organize the Democrats.
“Abundance” appeals to the financial backers of the Democratic Party because deregulation doesn’t threaten them. But our problems are much graver that what YIMBYism can address: authoritarianism, climate change, austerity, warmongering toward China.
It’s because the wealthy block left-wing populism that so many people have turned to right-wing populism. Which is only making our problems worse.
At this rate, it’s only a matter of time before society cracks. There’s a good chance it doesn’t end well for the financial backers of “abundance.”
"Abundance" directly addresses climate change in the book. The scenario it describes is that we need to electrify at a pace far beyond what we're doing today in order to find off climate change, but large scale clean energy projects are often stymied by red tape and legal challenges. Also lack of government investment in scientific research.
> Keep in mind: Klein and Thompson's political project is a plan to organize the Democrats.
This is the crux of the opposition. It's not that leftists necessarily have a problem with zoning reform, I don't at least, its fine. It's that the "abundance" project is a play for control of the party by the same losers who gave us Biden and Kamala.
People on the left feel that we need to be speaking to economic problems that regular people face. "Think of the millionaire land developers" is a losing message even if it does indirectly help regular people 10 years later. It's not even actionable at the federal level.
Its about the message. Centering the message on something that has indirect, timelagged effects and isnt even actionable at the federal level is terrible messaging strategy for the national party.
"Build more" is direct and actionable. Regulatory reform is only one dimension.
Up north, Carney ran on a platform of building 500k homes annually, approx double the rate of housing starts. That's direct and done at the federal level, with billions in financing. It's impossible to be less timelagged than that by way of policy. So-called "affordable housing" qua government funding development (price controls after the fact notwithstanding) still entails hoop jumping and waiting for approvals, they don't spring up the next day.
The effects of zoning reform where they're implemented are reflected quickly as well. See: Minneapolis.
The general trend I see is that the left attacks the "Abundance agenda" without having read about it. Either that or the fact that it isn't just about market solutions is deliberately ignored.
Fair, and I have to give credence that messaging effectively is extremely important. It's not enough to be "right", you have to sway and win. Will quibbble that the left is not exactly known for message-discipline, what's popular with them does not often translate well to most voters.
Many leftists have a problem with zoning deregulation.
Housing supply is the biggest economic problem that regular people face.
Ezra Klein & Derek Thompson did not bring us Joe Biden, Ezra became one of the most critical mainstream journalists of Biden. Their politics are meaningfully different.
> Many leftists have a problem with zoning deregulation.
I've been in leftist housing advocacy circles. I studied urban planning.
1) Every leftist I know who cares about housing hates euclidean zoning
2) Every leftist I know who cares about housing hates down-zoning
3) Every urban planning class I took said that euclidean zoning is bad
Euclidean zoning is the principle land use regulation in the United States because it is supported by powerful people, landowners and yes property developers (who are also almost always land speculators.)
Thompson and Klein misrepresent euclidean zoning as a leftist project and then set it up as a wicker man to stuff with all the environmental and labor protections they want to torch.
I live and am politically active in a front-line municipality for these issues (Oak Park, IL --- the actual redlining bastion of the western suburbs, a 4.5 square mile gravity well for Cook County school funding so egregious it was one of the first examples in Johnny Harris's NYT "Blue States, You're The Problem video) and I'm telling you, straight out, leftist defenses of existing zoning rules are a very real thing. In fact, where I live, they are the entire defense of those zoning rules: progressives have a supermajority of the board.
Leftists are not solely or distinctively responsible for exclusionary zoning and housing restriction in the US. Nationally, they're not even the biggest problem. But in many jurisdictions, places that should be the vanguards and test cases for housing reform, they are the controlling factor.
Which is why Derek Thompson addresses them so directly. What would be the point of aiming these criticisms at Republican-controlled municipalities? They don't share these values to begin with! They're not listening!
Right now, we have two parties actively propping up home values and the interests of the upper middle class. Klein and Thompson propose: what if on this issue we had two parties?
I think that conflating "blue state" with leftist is incorrect. "Blue state" confidently implies "centrist" and "not too much on the right". It does include also leftists, but not just them.
The parties are asymmetric. "Red state" implies very much on the right and is much more radicalized then democrats. But democrats themselves are centrists and unlike the republicans, tend to push away more radical parts.
I guarantee you all your Oak Park neighbors are the type who were With Hillary in 2016 (probably calling Bernie a sexist) and voted for Biden and against progressive income tax in 2020. They are not leftists. You seem to be having some trouble understanding the difference between democrats, liberals, and leftists.
T&K are fundamentally dishonest about the role of euclidean zoning in american cities, who supports it and why it's so powerful. Their basic project is to strip environmental and labor protections by tying them to euclidean zoning and saying "it's all the same."
And by the way, they may get their way (Newsom is already forcing repeals of environmental protections in California while toasting Klein) but at the end of the day euclidean zoning will still be around, because it is supported by people who are way too powerful.
Another by the way: I remember fighting the big Chicago rezoning in 2004. They had us chasing our tails by trying to double the parking requirements and letting us fight to get them back down to where they were in the old code, feeling like we won a big victory.
"I guarantee you all your Oak Park neighbors are the type who were With Hillary in 2016"
Its both. That's the problem. In my neighborhood, the construction of any market rate housing will be blocked by Hillary voting land-owners and single family home owners and card-carrying Bernie Bros mad that a private developer even gets to set foot in the city.
It's this alliance that has basically blocked housing in most metro cities.
When it comes to 100% affordable housing, yes the Hillary voters are on their own, but those are like 1-2 headline causing projects. For every affordable housing project there are 10 market rate housing projects that never even see the light of day.
As an example when I was active in housing in Chicago one of the organizations that was with us on the left was a developer of affordable housing: https://www.bickerdike.org/
Several of the activist actually worked for this developer.
Real leftist housing rights supporters are not against developers. They are against for-profit, private equity, land banking speculators, and yeah nimby homeowners. In general we hated the Oak Park type nimby liberal more than we hated the right to be honest.
The “private developer risk” the article derides is an enforceable approval timeline that lets private developers have bounded risk. Apparently that’s a bridge too far.
In a market system, Creating a system that is "against for profit" housing developers very predictively restricts housing supply & drives up the cost of living for everyone.
You couldn't be more wrong; this is absolutely Bernie country. In the primaries, it made Washtenaw County MI look like Maricopa County. No, I think I understand just fine what I'm talking about.
Again: this is one of the 5 most progressive municipalities in the country.
Speaking of Washtenaw County, as a resident, it is also "the leftists" that are protecting existing zoning and are the major NIMBYs. It is the "evil corporate right wingers" that want to build all kinds of housing, but are prevented from doing so. There is literally two ballot measures for next week where the left wing NIMBYs want to protect a "park" (which is literally a parking lot) from being turned into a larger library and actual green space, because we also want to build more housing as well above the library.
Sounds like you're just applying somewhat arbitrary purity rules to what falls into the "leftist" bucket or not.
I believe that for most people "leftists" means "on the left side of the political spectrum", and so, in the US, it would be a strict superset of democrats & Liberals. But for you, it sounds like it's only subset of these, based on some criteria you haven't made explicit.
Fair enough, but that's a somewhat non-standard definition.
For what it's worth back, a lot of the opposition towards "establishment libs" is based more on optics than policy IMO.
Voters feel ripped off by the establishment. Running on "we're the establishment and we're here to help" is a loser, and letting Trump be the rebel is malpractice.
No, that's not what “leftist" generally means, it means adherence to any of a broad grouping of anti-capitalist ideologies (the more widely recognizable being the various forms of socialism and communism). It overlaps a little bit with the progressive wing of the Democratic Party in the US, but beyond that is mostly outside of the US major party system. The only people who use “leftist" to describe a superset of the Democratic Party also use “socialist” and “communist” in the same way.
I think you're injecting your personal views into the definition, which don't align with the common meaning of the word.
Here's the definition of the word taken from macOS's built-in dictionary (New Oxford American Dictionary):
> leftist, noun: a person who has left-wing political views or supports left-wing policies.
> left-wing, noun: the section of a political party or system that advocates for greater social and economic equality, and typically favors socially liberal ideas; the liberal or progressive group or section
Anti-capitalist thought represents a subset, but is certainly not the sole marker of left-wing political thought.
Now, my _personal_ take on this is that western left-wing thinking and liberalism (in the moral philosophical sense) are deeply intertwined (given the Enlightenment and its values), but anti-capitalist thought is deeply illiberal in nature. It is this fundamental contradiction that leads to permanent infighting within the left-wing spectrum.
> I think you're injecting your personal views into the definition,
I think I'm injecting what I know from getting a degree in political science and a two and half subsequent decades of experience paying attention to how political terminology is used by scholarly, journalistic, popular, and activist sources across the political spectrum into the definition.
> Here's the definition of the word taken from macOS's built-in dictionary
And that's a tolerably decent definition for a relatively compact general dictionary, but it misses a lot of nuance; outside of activist sources using it as a slur for their opponents, it is not used in nearly the local-politics-relevant way that left/right (especially qualified with a national label, like "American left") is.
FWIW: Ezra Klein called for Biden to step down before most others and asked for a fast national convention (not Kamala). Broad brushstrokes are energy saving, but just incorrect.
I guess this is a bit definitional, but I do not think of "very wealthy, extraordinarily progressive" people as typically leftist. I think of them as liberal and only in the American brain is that associated with leftism, so much so that we usually distinguish between "leftists" and "liberals" rhetorically. With, say, Hillary Clinton, being a classic American liberal and Bernie Sanders being more like a leftist. If you visit the DSA contingent I doubt you'd find anyone per se against zoning revisions to build more housing. Eg, Mamdani had literally building more housing as a part of his platform.
Leftists tend to feel very little solidarity with wealthy progressives and don't really vibe with their political interests, in general. It seems really weird that the specific label of "leftist" is being thrown around in this context. Especially in the context of organizing the Democrats where there is a meaningful and material difference between liberal and leftist.
Again, if you try to collapse this down to "leftists" vs "Derek Thompson", you're totally missing the point. Thompson's rhetorical adversary here are "people who believe we shouldn't do the zoning and envelope reforms required to increase the supply of housing", a subset of whom are on the political left and thus in his target audience: his term for them --- fairly applied! --- is "the antitrust left", but you could (like I do) call them "left-NIMBYs" and be in the same rhetorical place.
Most leftists gag over current anti-housing laws (I wish that were true of the right, but right-YIMBYs make up a tiny minority of the political right).
Right-YIMBYs are a tiny minority, but have you seen one in person? Truly a majestic, noble creature. You know they will fiercely stand their own ground but at the same time also go to extreme lengths to avoid putting their noses where they don’t belong.
Long thought extinct, sightings have been reported.
> houses should be cheaper by any means necessary.
That's basically the position Klein has in the book Abundance, but everywhere I go online the left automatically comes out hostile to it or anything that embraces market solutions. Your anecdote might be true but beyond your small sample size it doesn't seem representative. Broadly, they want populist solutions. This is why Sanders and Warren gave a lukewarm criticism of tariffs, and why they like price controls for grocery stores despite their having small margins, and risk of food shortages it could bring.
UK Greens aren't NIMBYs. They're against doing more of what's being done across UK cities already - which is building generic boxy blocks of cheap housing that look like they fell out of Minecraft, and selling them for unreasonable prices.
Many of the flats end up in the hands of landlords, who charge even more unreasonable rents.
There is no sense in which that's a workable long-term solution to the housing problem.
The Green pitch is "That's clearly not working, let's not do more of it." Which has nothing in common with "We don't want anyone to build anything anywhere."
Mamdani wants to freeze rents of housing that is already under rent stabilization. He is also an advocate for reform and deregulation, and working backwards from outcomes. He has been talking to people from the construction industry and one of their main concerns is predictable time scales. He seems very pragmatic.
Talk vs action. The Australian Greens opposed Australia's build-to-rent legislation. They didn't oppose the entire legislation. They opposed the one part of the legislation that would have helped the problem.
Aside from the fact that the few policies they made explicit in their platform would actually be counter-productive to getting more supply (such as National-level rent freezes), they also don't have a good track record at the local level when it comes to housing.
I've been very involved in council-level politics where repeatedly the Greens members were aligning themselves with the right-wing members ("ratepayers rights"-type groups) when it came to delaying/blocking development permits, enforcing parking requirements, preventing/delaying rezoning, etc. They fundamentally don't understand the issue at all. All talk, no substance.
And that's before we get to the CFMEU matter, which I think was the final blow for them during the last election.
My guess is that the "leftist critique" isn't one of not wanting new houses built, but of not wanting extensive government subsidies and political energy to go to builders and other groups who will not solve the problem, a la our storied history with broadband subsidies.
This pitched debate may very well simply represent an attempt to forestall action by bogging efforts down in debate over what's effective or correct, of course. It's worked for any number of groups looking to forestall what seems like an obvious and inevitable solution: reducing lead exposure by banning its use in consumer products, reducing tobacco-related illness by making it difficult and more uncomfortable to partake, and, in our case, making housing affordable by letting prices fall.
It's a disturbing trend that extremely complex issues are framed as a 'symptom' of broad political leanings. At the very least, it's a distraction and disservice to their own good argument, when an otherwise-intelligent narrative constantly reverts back to the polarisation "it's mostly those Others, from the Other Side".
Just let arguments stand on their own merits. The minute an article includes the term "lefties" or "righties", it's gone wrong imo.
This is one of those extremely important points that we say every once in a while and then forget to emphasize. Opposing good ideas or supporting bad ideas because they somehow get tagged into weird ideological buckets along with completely unrelated issues is a big reason why our political system is so dysfunctional.
> resource allocation performed democratically instead of by markets
The economy is too complex to be planned in details and such attempts at control have failed again and again.
I think some people also miss that, crucially, the market is not an external force, it is just the aggregate of each individual's need, decision, and desires. SO in a way a working market is as free and democratic as can be.
I like to say the market is undefeated thoughout history.
You can add regulations or limitations that incentivize the market one way or another to achieve social goals, but these distortions add up. And when there are too many distortions in the market, it stops acting how you want it to act, and starts acting how it will. And usually, that means negative unintended consequences.
"there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way"
People tend to call the Democrats the left, as they're at least somewhat leftward of the Republicans. It's at least easier for discussion purposes than speaking of the right and the other right.
Yeah, I get it. But we also use liberal and I think in this particular case its worth drawing the distinction between these two "camps" of the democratic party.
The meaning of liberal and conservative has shifted so much over time that the term is now useless. The original meaning of liberal was about not killing you neighbor if they were a different religion - from which we get freedom of religion. That slowly expanded to things like freedom for slaves and women voting.
You're describing classical liberalism. The meaning of the term liberalism in the US switched to social liberalism back in the great depression (unless specified with a qualifier). It has remained roughly constant for as long as most people on this site have been alive. Though I will grant that the policies social liberals support have changed since then.
In every American community, you have varying shades of political opinion. One of the shadiest of these is the liberals. An outspoken group on many subjects. Ten degrees to the left of center in good times, ten degrees to the right of center if it affects them personally.
1966 is still modern. The liberals I'm describing go back much farther. The decleration of independence is perhaps their most famiuos work though even then things were changing
No. Republicans believe in full privatization of schools, Social Security, and Medicare, in flat taxation, the abolition of the regulatory state, the replacement of government-provided services with cash vouchers, and policymaking devolved out to the states. Liberals generally commit to none of these beliefs.
I've gone out of my way here not to make value judgements; Republicans have coherent arguments for why all these policies are better. "Republicans who don't hate minorities" is not a good way to describe liberals, who make up the majority of the Democratic party, the "other" American party that opposes the Republicans.
> Liberals generally commit to none of these beliefs.
Liberals fucking love charter schools, 401ks, they voted against the Illinois progressive income tax (Biden won Illinois big when that got defeated). I could go on. You're so far off the scent.
They are usually also ok with LGBQT people, which is good. Realistically, I think liberals are just not particularly reflective about the economic realities our system creates. Americans are drowning in propaganda, of which the right wing sort which characterizes Trumpism is only the most obvious. Add on top of that that the 20th Century makes a pretty compelling case that leftism as imagined in that century isn't a going concern, its not really a sign of a major moral failing that one might be a "republican who isn't into cruelty."
Also, in fairness, there are a lot of republicans who aren't into cruelty too. Its just that the jerks are an important part of the current right coalition.
Excellent comment. I agree that not many leftists support the current housing system. Probably only some existing home owners are excited about how it works today - they may want home prices to stay high. I'm lucky to be a home owner but I also see that the current system is incredibly destructive, having not enough homes and very high home purchase prices is really hard on people. We should not have to spend so much of our income pursing a home.
What is it like living a life completely ignorant of reality?
If you'd like to learn, feel free to ask chatgpt on the leftish pushback against abundance. Or historical examples of leftists blocking housing projects. Or environmentalists prioritizing niche interests over those of the general community. There are many, many examples.
If the problem is in our midst, we must acknowledge it.
Local boards in blue cities (California in particular) have blocked new housing for decades using every tool at their disposal. Places that lean left have anomalous rent growth. Places that lean left approve fewer new houses. Places that lean left have anomalously high building costs. This is a matter of written record. Embarrassingly, the only US city to buck this trend is Austin, a city in red-Texas known for a recent influx of radicalized right wingers.
> yuppies who want to defend their housing prices
Yuppies, but definition, are young professionals. They don't own houses, they rent. They are the ones paying the high rental costs as neighborhoods gentrify. They want more housing. The 35+ home owning population is the one that blocks new housing.
> I don't associate this position with leftism in any way
The leftist - YIMBY conflict shows up on 3 fronts.
First, Leftists have issues with the free-market. They reject market-housing solutions as a way to create new housing.
Second, Leftists like Govts and regulation. YIMBY wants less regulation, so they can maximize for space and price. Regulated Govt built housing is both more expensive and worse than what free markets already provide.
Third, and the most important, is a subtle accusation: "Leftists act just as selfish as everyone else, once they are the ones in power". Having come from an ex-socialist country, I have a deeply rooted belief in this accusation. Not that leftists are worse people, but that people are people, and systems should work around their imperfections rather than having expectations of ideological virtue.
The anti-trust left is a nice way to point a sub-section of the left which uses regulation, social outrage and critiques of free-market as a way to get personally beneficial outcomes, at the expense of the wider population. I understand - #NotAllLeftists. YIMBY & abundance advocates themselves have left-sympathies. But the anti-trust left is a non-trivial number and the conversation must start from acknowledging that they exist.
You can just look at the empirical evidence. Where are homes being built? Primarily Texas, Florida, Nevada, Arizona. Where are they not being built? New York, California, Illinois.
Abundance YIMBYism has many shortcomings. It doesn't address the risk of gentrification and displacement, the slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities. Journalistic ideologues deserve little praise for dismantling the weakest counterarguments of their opponents while ignoring core criticisms.
Abundance YIMBYism in housing decreases gentrification. Gentrification happens when the only housing that is affordable is in low-income neighborhoods. If there is plenty of housing supply throughout a city, the demand for those low-income neighborhoods is lower.
Nothing in the Abundance agenda states that direct public housing is bad, per se. The argument is that what we need is more housing, and the only realistic way for that to happen is to make housing easier and cheaper to build, typically by easing zoning restrictions and other things like parking minimums that drive up costs.
These are ironically the weakest counterarguments to abundance housing. Rich people don't move to a city because of their love of 5 over 1 buildings. Otherwise, developers could just build them in rural Kansas and everyone would be happy. They move the jobs and culture, which doesn't change regardless of any new housing built. Making it easier to build privately owned housing also makes it easier to build publicly owned housing. Public housing projects are also delayed by permitting and environmental reviews and have to pay for inflated land prices and parking spaces.
Jobs and culture are indeed reasons for people to move to the city, but it’s odd to claim that housing types don’t factor into consumer demand. Because housing types do, developers are incentivized to build housing that is the most profitable (such as less dense and luxury housing) not housing that best serves the needs of low income people (as more expensive units make more money). At best we can only expect minor effects from deregulatory mechanisms.
Which brings us to public housing. The main obstacle to public housing is funding these projects. Reasonable deregulation of public housing projects makes sense, sure, even though that is not the main blocker.
But public housing deregulation is not the argument of abundance, it’s YIMBY deregulation. Its proponents claim that it’s market based supply/demand effects that need to be unleashed by deregulation to provide adequate housing. Because “abundance” holds that YIMBY deregulation is the solution - not public housing - it misdirects efforts to address housing issues faced by low income people.
What YIMBY deregulation do you view as problematic? YIMBYs aren't calling for more billionaire row towers and multifamily to single family townhouse conversions. They are calling for more apartment complexes, ADUs, and other utilitarian forms of housing.
New housing developments only gets branded as "luxury" because that's the way that housing is priced right now. It costs the city of San Francisco over $1 million to build a single affordable housing unit.
Blindly throwing more money at the problem doesn't help. SF is spending $846 million on housing, over $1000 per resident. Despite this, homelessness is actually increasing. Increasing funding is something that should be prioritized after you made development as frictionless as possible. If public housing is cheaper and faster to build, more voters would be willing to support funding it.
I gave SF a lot of shit, but to be clear, they're the least problematic city in the Bay Area, as they at least allow some denser development.
> It doesn't address the risk of gentrification and displacement
This is a puzzling critique because it seems very much in the wheelhouse of "abundance YIMBYism" to advocate for cheaper housing--an argued byproduct of which is that fewer people are displaced. It probably changes the problem statement of gentrification since, if housing is abundant and displacement is low, there's not much to distinguish "gentrification" from just "investing in the neighborhood".
>the critical need for direct public housing to serve low-income communities
This isn't a problem caused by YIMBYism, nor one whose solutions are obstructed by it. We could by that reason malign it for not solving heart palpitations or cancer too.
This “abundance” ideology which aims to influence Democratic policy promotes YIMBYism to address housing shortages by deregulating construction. It’s this claimed benefit I’m criticizing. Public housing does address this issue, which is why I bring it up.
Similarly, gentrification is enabled by this narrow focus on YIMBYism. Upzoning increases land value. Developers build profitable market rate houses there. This increases prices in the neighborhood leading to gentrification. This in turn leads to displacement - a key phenomenon that this ideology purports to address.
My issue is not YIMBYism in particular but that it’s offered as a solution to these problems.
You are arguing as if buildling more make things worse, when in fact, this is not the case. The opposite of buildling more is building less. Building less will increase existing price a lot more on an existing neighborhood than building a new buildling will ever do.
When there's not enough housing for people to live in, people start competing on rent and bidding wars on purchases, this drives price very fast.
That's why you have to build more. To avoid the biggest issue which is a housing shortage.
Is that the ONLY solution? Of course not! Public housing is great. But the same things that prevent YIMBY policies is the same thing that prevents public housing to be built. When you advocate for more zoning to prevent new condos in your neighborhood, it's not just new condos at market price that will be prevented, it's a whole range of housing.
>When there's not enough housing for people to live in,
In the country I live in, our population is a shrinking. Quite literally. There would be fewer people today than last year, and will be fewer people next year than this year. Except...
Unless you are upzoning ONLY in low-income neighborhoods, this doesn't add up. The assumption is that upzoning makes development more attractive. But this would apply to the entire city, and would therefore increase housing supply outside those low-income neighborhoods as well, which actually reduces the propensity for displacement.
Public housing construction typically has to follow the law as well, so how does it help in cities where increasing housing units is heavily restricted, and outright banned in 90%+ of the city? YIMBY upzoning is strictly necessary no matter what funder you want for development.
Market rate housing doesn't need to trickle down. Most NIMBY regulations focus on the prevention of building low-value housing. Let developers flood the market with small, high density units, and they'll be cheap right away.
Developers are incentivized to build whatever units are most profitable, not what lowest income people need. More expensive units make more money.
Besides that, land and construction are both limited resources that constrain developers ability to “flood the market with small, high density units.” For example in high-land-value urban areas, developers need to build expensive units to be able to make a profit.
Yes, developers are incentivized to build whatever units are most profitable, but the price per square foot is much higher for small units than for large units, so without regulations prohibiting high-density projects, you'll end up with far more units for a given amount of resources. Instead of building 20 units of 2,000 sq ft, if allowed a developer could instead build 40 units of 1,000 sq ft, for a similar cost, and sell them for less per unit but more per square foot. Without using any more land, foundation, or roofing, and only needing extra fixtures and interior walls, it would reduce the labor and materials needed per unit, while increasing the income.
It’s more than just extra fixtures and interior walls but bathrooms, kitchens, plumbing, and HVAC - some of the most expensive parts of a build. For example if a developer has 4,000 square foot of land, and it costs $1.6 million to build 4 units selling at $2.4 million total - vs costing $1.2 million to build a luxury unit selling at $2.2 million, they will build the single luxury unit. The overall price for the construction is lower, the price per square foot is lower, but they make more profit.
> It’s more than just extra fixtures and interior walls but bathrooms, kitchens, plumbing, and HVAC - some of the most expensive parts of a build.
That isn't necessarily saving anything. A 4000 square foot unit could very plausibly have four baths and HVAC zones, especially if it's a luxury unit.
Meanwhile not doing that is exactly the sort of thing the existing rules nefariously prohibit. Suppose you want to turn that 4000 square feet into eight studio units with a dorm-style shared kitchen and bathrooms. Now you've significantly lowered your construction costs while increasing the total you can sell for because you're offering eight units, so that becomes the most profitable thing as long as there are enough people who want lower rents more than space, except that hardly anywhere allows you to do it that way.
A developer in our example would still profit by offering a luxury unit with 3 bathrooms instead of 4. But you’re right that there will often be multiple baths and HVAC systems in a luxury unit - although electrical, plumbing, and fire suppression systems still scale up with the number of units.
And kitchens remain a problem. Your dorm-style kitchen layout is creative, but the problem with this idea is that there is very little demand for dorm-style housing. Developers are able to charge higher prices for more conventional layouts - where the demand is - which is what they will build even in the absence of regulation.
Markets can handle some things well but the inability to provide merit goods (like housing) is one of their shortcomings. Unfortunately we need policies with more scope and ambition than YIMBYism if we want to tackle society’s larger problems.
> A developer in our example would still profit by offering a luxury unit with 3 bathrooms instead of 4.
Would they though? Having one fewer bathroom would lower costs but also lower the value of the unit. Meanwhile it doesn't actually cost $400,000 to build one bathroom.
> Your dorm-style kitchen layout is creative, but the problem with this idea is that there is very little demand for dorm-style housing.
There is very little supply of dorm-style housing, because building it is banned. And it's banned because there is demand for it, especially when rents are high. Why would they bother to ban something nobody was going to do? If nobody wants it then there is no harm in getting rid of the ban because nobody will build it anyway, right?
> Developers are able to charge higher prices for more conventional layouts - where the demand is - which is what they will build even in the absence of regulation.
Let's suppose that's true in some cases. There is currently a lot of demand in some area for 4000 square foot units so that they're more profitable to build than four 1000 square foot units.
Then if you let them build 4000 square foot units, they do, and satisfy the demand for those units. At which point the price of those units comes down because the supply has increased. Which makes it more profitable to build smaller units going forward, because now that's where the unsatisfied demand remains -- in your example, the increase in supply of 4000 square foot units causes their price to fall from $2.2M to $1.9M while the four 1000 square foot units are still going for $2.4M and are now the more profitable alternative even if they cost more to build.
> Markets can handle some things well but the inability to provide merit goods (like housing) is one of their shortcomings. Unfortunately we need policies with more scope and ambition than YIMBYism if we want to tackle society’s larger problems.
The thing that I find suspicious is that if you actually want some specific thing, like more smaller units, there are obvious ways to make that happen. Just provide a tax credit for building smaller units, or a credit per-unit so that one 4000 sq ft unit gets you one credit and four 1000 sq ft units get you four credits each in the same amount. The result is going to be more smaller units than the market would otherwise demand, which is what you wanted, right?
But meanwhile people start proposing things like having the government not just build but actually operate rental properties, or constrain who is allowed to live in them, which tend to create nasty problems like "sorry, you make $1000/year more than the threshold for affordable housing so now there's a cliff where your rent goes up by $1000/month", or create a handful of housing projects that turn into an area of concentrated poverty while not actually providing enough housing for everyone who needs it and in particular not getting housing costs down for middle-income people.
And those policies strike me as attempts to disguise a desire to not solve the problem. They're token efforts to be able to claim that something is being done on paper so that housing costs can remain high in practice.
So I guess what I'm asking is, what are you actually proposing? And how is it better than some combination of "remove policies that inhibit construction" and "provide tax incentives to build more housing"?
This is exactly what the developers say. Low income housing, which is unaffordable even on middle class income, is only viable if heavily subsidized. So the tax payers have to pay the developer to take the guaranteed loss. And even then, 3000 rent on a low income studio apartment is only possible for low income people who have subsidies. So the tax payers pay the developers to build it, and then pay the tenants to rent, and people have the gall to refer to this as the “free market” solution.
If you wanna break it down by "systems" the most expensive part is the regulatory compliance you need to engage in before you start.
People shit on the healthcare industry for being written into law and they shit on the credit processors for taking a cut of every transaction but the degree to which various flavors of paper pushing engineers are required by law to be given a cut of every single creation, alteration and major repair of a structure is mind boggling.
And this racket is a large part of what puts the squeeze on low end projects.
If it takes me $50k of engineering to be granted a $100 permit to do another $50k of tree clearing and dirt work on a lot then whatever I build needs to make up for that. If not for BS compliance those numbers would be something like $5k, $100, $20k
All of this expense, levied upon literally every single project everywhere, all to prevent the 1/100 or 1/1000 case where someone does something (that they likely knew was) stupid and causes a runoff problem or whatever, that could likely be mitigated by the same costs after the fact where and when it happens.
And this is before you start discussing all the areas where industry and company lobbyists have got their clients inserted into the IBC at the expense of the public.
there are a ton of build code issues in the US that raise the cost of construction without substantionally improving benefits. As an example, I am in Europe right now, most apartment buildings here have single stair entry and smaller elevators, both of which are prevented by US building regs for bad reasons. Fixing these regs would expand the market for new construction at the low end (lower costs for marginal opportunities) and the high end (makes 4 unit condos feasable).
Western Democracies usually (always?) have planning laws that allow for democratic (ie for the benefit of the people) building plans. In short, we don't have to allow developers to choose.
We could equally levy pressure to improve quality.
In UK, house price inflation has well outstripped material and wage inflation, we should be getting exceptional housing that fits the need of the demos.
> the slow and unproven trickle-down effect of market-rate housing
Slow and unproven? Supply and demand is the most reliable law of economics. Cities like Austin that are building market rate housing are actively seeing affordability improve.
Furthermore, even if it wasn't sufficient, abundance YIMBYism would still be helpful and necessary.
Gentrification isn't actually a problem if it doesn't force lower income residents to leave. They wouldn't be forced to leave if their housing wasn't some of the only options for higher income people to inhabit
Studies show the same percent of people move out of neighborhoods regardless of whether or not the neighborhood is gentrified. They also show that those low-income people who stay in a gentrified neighborhood see their incomes rise. Those low-income people who are in a neighborhood that is not gentrified see their income go down.
Your intuitions are wrong following them is making the problems worse.
These are not actual issues with regards to housing being too expensive. These are pet issues divorced from economics.
> the slow and unproven trickle-down effect of market-rate housing
This is absolutely proven in the data, and even a basic thought experiment using the pigeon hole principle will show that more houses means the prices drop of existing stock.
> critical need for direct public housing to serve low-income communities
Why is this a critical need? More housing being built could also mean more public housing, but removing zoning and land use regulations doesn't hurt this.
It seems you are more disappointed that your personal pet political issues are being ignored in favor of a market solution to house prices.
What it doesn’t address is the role of finance and the financial sector in explaining why things are the way they are.
It’s not just a missing detail it’s fatal to their entire argument.
Which isn’t an accident, since the goal of the “abundance movement” is to stop the actual progressive movements that want to take on concentrated financial power.
This is a bad-faith description of the abundance movement.
The central thesis of the abundance movement is this: Every time we make a regulation, we are making a tradeoff. In the case of housing, an example would be "zoning only for single family housing". It's trading off affordability for quieter neighborhoods. Another might be "public housing contracts must favor minority-owned contractors". It trades off affordability for the development of a disadvantaged constituency.
Over time, many of these such regulations accumulate. Environmental reviews. Impact studies. Public comment periods. And while every individual regulation might be well meaning, the totality of them creates market distortions that disincentivize or even utterly prevent the very thing we're trying to accomplish.
So, the abundance movement looks at these and says we need to think about these in terms of tradeoffs, and pare back the regulations that have bad tradeoffs. This is often derided by critics as deregulation which makes developers more profitable. While that might be a side effect, it's not the main reason. It's deregulation to remove market distortions that, in the case of housing, constrain supply and therefore drive up housing costs.
The abundance movement IS a bad faith movement. It’s entirely the creation of the donor/billionaire set and its rollout is designed to stop the Democratic Party from taking the obvious next step of tackling concentrated economic power, following the utter and abject failure of corporate centrism.
There’s literally no ambiguity here, the abundance summits feature obvious had faith actors like Andreesen.
This kind of thing has been going on for decades. It’s the same playbook as Third Way and New Dems and so on.
These people’s ideas led to the current political situation we’re in today. They don’t want to be held accountable for that.
So we get this Calvinball style collection of principles that change weekly but never seem to ever even consider doing something that Reid Hoffman and Mark Cuban and their friends don’t like.
Maybe I'm missing context but this would be the exact opposite of the Abundance agenda.
If your point is that Andreesen advocates for abundance policies, but then also opposes them in classic NIMBY fashion when it affects him, well, that's an indictment of Marc Andreesen, not Abundance mentality. In fact, your point inadvertently seems to say "Marc Andreesen is not Abundance enough!" since he is engaged in anti-Abundance activity in lobbying against multi-family housing.
The abundance movement is not a grassroots group of people, it’s a lab creation of billionaire/donor types. Andreesen is one of them, that’s the context for the link. Reid Hoffman is another.
These people want to find a way to distract from the appeal of progressive policies of the kind put forward by Lina Khan and others who actually attempt to directly take on the concentrated economic power that’s strangling normal people in this country. They’re the ones doing the strangling.
It’s propaganda, a PR project by oligarchs. It’s fundamentally done in bad faith and there’s absolutely nothing obligating me to take them at face value.
The abundance mindset as described in Klein and Thompson's book fails to address the actual problem that prevents abundance, as defined by them.
The problem that they've identified is real and obvious: people can't afford housing, things are increasingly precarious for the middle class, and so on.
The actual solution is that concentrations of market power have to be broken up, we are being strangled by monopolies and cartels, and the way we run the macro economy is in favor of the financial sector. We prioritize returns on large scale capital over absolutely everything else.
There's no way to address the actual problems without doing things differently. In order for regular people to win, some powerful people will have to lose, at least a little.
Those powerful people don't want this, so they're happy to fund Klein and Thompson and a slew of other think tanks and politicians to advance the narrative that there's some other way to do things. Mostly the usual tactic of "blame it on the hippies" that has been so effective for them since the 1990's and the Clinton administration.
Given all this context, there aren't really any merits to the argument of the book. It's the equivalent of someone arguing with you that better diet and exercise is the way to fix an open stab wound. Also they're the person that stabbed you.
Like diet and exercise are good ideas. But if I'm like hey what the fuck you're a murderer and you come back with something about how that's an ad-hominem, and also why are you disagreeing with the ideas that diet and exercise are good, I don't really need to engage with you on the merits of those arguments right this second.
> slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities
Your claims are unsubstantiated. I've only ever seen vague critiques by anti-abundance commentators. If you think YIMBY is wrong, then be specific in your criticisms. There is nothing special about direct public housing. It is housing built by the govt. The govt gets caught between regulations, is slower, wasteful & pays higher wages to workers. It's market rate housing but worse in every way. Chicago [1] is contemporary proof that Govt. can't build housing.
On the other hand, YIMBY Austin [2] has seen slower rent growth despite rapid migration over the last decade.
> gentrification and displacement
You realize this is a home ownership problem right ?
YIMBY doesn't cause gentrification. It is a balm to reduce the pain of inevitable gentrification. A neighborhood gentrifies because increased economic opportunity draws new transplants in. If housing supply is limited, then existing residents are going to get priced out one way or another. As a neighborhood starts to gentrify, YIMBY redevelopment projects roll in & existing landowners see large windfalls. It's great if you own. Gentrification is only bad if you rent. Even then, YIMBY redevelopment projects increase housing supply, giving locals an option to move to home ownership and reduce the magnitude of rent spikes. It curbs the supply crunch.
Anti-abundance people don't have a coherent alternative other than rent control. Rent control has an unbeaten track record of failure in the western world. Either, prices diverge [3] and create a rental class system between new tenants and old residents. Or, they turn dilapidated like America's famous inner-city 'projects'.
There are 2 ways to look at it: the empathetic lens vs the pragmatic lens.
We've looked through the empathetic lens for the existing residents. But, from a pragmatic lens, why do they deserve to live exactly where they want to ? Yes, A city should provide sufficient housing to earning families within its boundaries. But, why should a person deserve to live on a specific block over another ? The existing renter had a choice to lock a spot down by buying it, and they didn't. Now, the renter is owed no such right. The newcomer and the old renter both have a valid claim to reside on the land, and rent control takes an unequal stance by favoring the older renter over the newcomer. Even in its best rendition, rent control is discriminatory. And rent control's best rendition lives in the same realm as Santa Claus or True Communism, called 'things that never happen'. At least YIMBYism buys time and opportunity for the older renter to figure out their next move.(opportunity to buy new housing, time because rents creep up slower)
> The govt gets caught between regulations, is slower, wasteful & pays higher wages to workers. Chicago [1] is contemporary proof that Govt. can't build housing.
This is overstated. Government can effective build public housing, many governments have succeeded in doing so. That article lists several issues with government housing in Chicago such as unstable funding and administrative overhead. The choice is between YIMBY policy regulatory changes to nudge housing supply or policy changes to improve public housing. And improving, expanding, and financing public housing is the structural solution to the problem not a bandaid. For example, market can never house the homeless because they don’t have money to pay for a house, even in a completely efficient market where housing is sold at cost. YIMBY effects are at best small, slow, and don’t significantly benefit the populations who need housing most.
That the people writing it do very little of their own reporting. "Reporting" isn't writing or thinking; it's the act of collecting external facts. Calling a primary source on the phone is reporting; traveling to a location and observing events is reporting. Synthesizing existing facts and reporting is not reporting. It's still journalism! Reporting is a specific practice within journalism.
It's copy-pasted from Twitter, or it's explicitly a press release from a company with minor rewording. There is no digging for the truth because the news can't afford any labor
I agree - journalism isn't that hard - Derek Thompson does a good job here. There's lots of good journalism out there.
Still, probably more expensive that having ai write something, and it's not politically on point. Agendas aren't well-served by attempts to describe the truth!
I like when the right and left can actually talk to each other -- solutions are more likely to emerge that way.
They had a meta-discussion of the fact that Fridman has been "coded" by the left (Thompson and Klein firmly representing the left).
I get that, because Fridman can be so uncritical that it can rise to the level of shilling.
But I also find it curious that many on the left won't sit for 3 hours with him. In contrast, Thompson and Klein sat for 3 hours, which shows me that they have something to say which stands up to scrutiny.
They have something to say that doesn't have to be carefully boxed into 30 or 60 minutes of talking points.
---
Related: even though Fridman can be annoyingly uncritical, I think this also serves the purpose of journalism. Because he gets the primary sources to talk freely.
For example, IMO this part an interview with Demis Hassabis is revealing. He asks if they're worried they will run out of high quality training data:
From my perspective, Hassabis gives a mealy-mouthed answer about generating synthetic data of the right distribution, and then they change the subject. I would bet there's a lot more to it than that. If they had a good angle of attack, I feel like he'd be more excited to talk about it, and say something more substantive.
I guess you can argue that he's being cagey to not reveal anything to competition, but it seems like a real point of concern to me.
The rest of the interview is talking about AGI time frames and similar sales talk. Whereas my takeaway is that there's significant worry that LLMs are limited by training data, because they interpolate from it (rather than extrapolating), and are inefficient at using it.
If you want to say Fridman's content is "barely-reported", i.e. he barely does journalism, then I won't really argue.
But the interviews are NOT heavily processed, and that's precisely why some on the left won't sit with him. (But not Thompson and Klein, because they actually have something to say.)
So ironically, it kinda balances out. Being credulous attracts guests who talk almost as if they are off the record
I'm not making a value judgement. There are analysts and opinion writers I enjoy reading and get a lot of value from. But hosting a podcast interview with someone is basically the opposite of shoe-leather reporting. I guess if you did "stitch incoming" every couple minutes and cut to Fridman calling someone else to have conversations with other sources about whatever claim his primary guest just made, you'd be getting closer.
My point is: some of the prevailing take on HN about journalism probably comes from the fact that we tend to pay much more attention to the Fridmans and much less to shoe-leather reporters.
That's all!
Much later: a funny thing I could point out here is that the same thing I'm saying about Fridman also applies to Ezra Klein, Thompson's "Abundance" co-author --- I like Klein a lot!
I think there's journalistic value to showing a raw conversation on a podcast. It's closer to the primary source than calling them on the phone and writing down parts of the conversation.
If the interviewer is a bit credulous, then we can take that into account.
I don't need other opinions to be inserted in the same show, because it's not the only show I watch. I get different viewpoints from others. (And Klein's show happens to be a primary example of that)
Journalism is about presenting a topic, not about presenting a person. I don’t care about Elon Musk as a person. I don’t care about his opinions on lawn care or cooking eggs. But in a story about self driving car technology I want to hear his input and the input of Ford and GM and Waymo and Uber and suppliers and academics and regulators and users. Compiling all those sources and presenting a narrative on the topic of self driving cars is journalism.
Giving one person an uncritical platform for three hours isn’t journalism. For that to resemble journalism you would have to squint so hard your eyes would be shut.
I would take it a step further and argue that it's not so much a topic as facts. Like objectively measurable things about the real world.
There's always going to be some limit to what we can actually measure and how much time we have to do it, but there's no reason not to try to get close to what we we're capable of doing.
I would argue that there are very few people who are actually authorities on a subject worth uncritically transcribing for 3 hours on a subject. Elon Musk is an easy target, the only thing he's an expert on is being Elon Musk, which isn't a very interesting topic.
What he has to say on any given subject does sometimes matter, because some people believe what he says, so it's useful for me to know some of it, but it's more useful to know what the actual facts are.
I don't want reporters who write an article that says "well I talked to one side and they said it's raining and I talked to the other side and they said it was hailing", I want a reporter who goes out and checks what the weather actually is.
Yes, absolutely. Journalism is fundamentally a fact or truth seeking exercise. I do still think there is room for presenting factually incorrect opinions so they can then be challenged and disproved. So I will meet you in the middle and say that journalism is the factual presentation of a topic. One of those facts could be that an influential person believes or says things that are incorrect.
Wikipedia's definition seems excellent to me:
> Journalism is the production and distribution of reports on the interaction of events, facts, ideas, and people that are the "news of the day" and that informs society to at least some degree of accuracy.
That "some degree" is an important concession. Nobody will be right all the time but the objective of journalism is to discover and present the truth of a topic.
Someone "interviewing" a pundit by letting them speak for 3 hours contributes very little to our understanding of reality. We might understand a bit more about the pundit's opinions, which can be entertaining, and could theoretically be valuable, but rarely is.
Someone actually looking for facts about reality would be far more useful and valuable to society. Not that we reward that sort of thing.
Letting someone talk for 3 hours is good information. It contributes a lot. Just because it's not distilled and you're not told what to think about doesn't make it not valuable.
>We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.
The average article posted to HN is actually of far higher quality than the average newspaper article. Sit down and read many of the “big names” cover to cover. You’ll cry. Contrast them with the same newspaper twenty years ago and you’ll lose hope entirely.
I have a hypothesis. In the 2000s it became more common to Google things instead of asking people. For years, this worked out well, but today the quality of Google (and websites!) is terrible. Today we have an entire generation of journalists that know to do their research with the internet, and surprise, when your inputs are garbage, so are the outputs. The inputs are also homogenized content slop, so there aren’t any real different perspectives. Take any topic, say road construction or a controversial bill or new technology, and read articles about it twenty years ago and now. Twenty years ago you might see some really off the wall ideas - but now, all the articles will be the same. Left, right, whatever, nobody really has any new perspectives, they just have their specific bias projected onto the same universal set of 5 thoughts. If you’ve read one, you’ve read them all.
Back to this article, it seems well written and I have no bones to pick - but what the author did (pick up the phone and call people) would have been entirely unremarkable not long ago. The fact that we’re remarking on it now is an indication of how deeply fucked the profession is.
You can be aligned with a group who benefits from the same position without being associated with that group or lobbying FOR that group i.e. the KKK members probably want cheaper electricity and I want cheaper electricity but that doesn't mean when I lobby for it, I'm lobbying for the KKK.
Please stop commenting like this here. Rebut the substance of the piece or don't, but whatever weird grievance you have with its author belongs somewhere other than HN.
On this thread you can tell if somebody is lobbying hard for people who need homes because they bring up realpage or public housing and get BURIED in downvotes: https://news.ycombinator.com/item?id=44750927
The only solution that will make a difference, apparently, is relieving the private sector of onerous regulations which impact their profit margins shrug.
I thought neoliberalism was going out of fashion but apparently not.
I just couldn't keep reading with the constant "antitrust left" being refered to on every sentence.
The issue, is that for me, the reader, it framed the piece as the author seemingly positioning themselves as the "the other side", the one that knows best and isn't those "antitrust left". It felt like it was creating a strawman and was engaging in tribal signaling.
And when you consider the rest of the piece was them claiming they called the sources, and that the sources said that the "antitrust left" had misquoted them and misrepresented their findings, but the author somehow is this unbiased truth, and definitely really for real called the the sources and didn't at all misconstrue or anything, no they wouldn't do that, unlike the "antitrust left".
I'm about as far left as you can be, as a syndicalist anarchist, and I definitely perceived a bit of what you described. But I'm not super worried about it because he didn't say "the left", but rather a specific lefty position.
But also, the left isn't uniform on housing policy. Some folks want anti trust and limited capital ownership. Some folks want to de commodify housing. Some folks want all housing to be government built and owned. The left is a very diverse place (and the joke is no one hates leftists more than other leftists).
The people the article quoted as "left" like Stoller are really not left, and the whole anti-left felt more like a unnecessary strawman label and definite turn off for me reading it. I would characterize Stoller as an independent anti-monopolist - not really on the right or left spectrum at all politically. Unless the right is now pro-monopoly.
Zephyr Teachout wrote an early article critiquing Abundance, the book by Derek Thompson and Ezra Klein. She appeared on Ezra's podcast and (IMHO) did not appear to have thought very deeply about the problem of housing affordability; instead defaulting to "monopoly in housing construction" as the problem. Stoller and Musharbash are re-iterating the position that had been staked out by Zephyr Teachout in March.
> Let’s assume that reforming rules on setbacks, parking, single-family zoning, and local input would achieve what they desire (the evidence is not straightforward; cities that have these reforms have lower costs, but they are rising at the same rate as in other cities). It would still seem relatively small-bore as a novel solution: Half of the 10 biggest cities in America—many in Texas—already have a zoning and procedural regime fairly close to what Klein and Thompson want. Are they simply arguing that Dems embracing Texas zoning approaches would transform national politics? That can’t be it.
Much of the criticism of Abundance from prominent pundits on The Left (including Teachout and Nathan Robinson) has been along the lines of "the actual problem is corporate monopoly" rather than zoning. (Or maybe: "zoning is an easy problem to fix and a distraction from the real problem of corporate monopoly".)
Yes, Teachout is one of the most prominent anti-monopoly advocates (along with Tim Wu). She wrote one of the first critical reviews of Abundance. She was then invited onto Klein's show to discuss the topic candidly with critics. Her positions are not "her's" but of a large section of the left who wants to blame the housing crisis on corporations rather than on cartel-like supply effects pushed by homeowner groups.
Presumably because anti monopoly right is much less common? Or because the anti monopoly right is concerned with different aspects of monopoly?
If someone said they were anti monopoly, that the government should do something to prevent businesses from operating like that, I'd never expect them to be from the right to be honest.
> If someone said they were anti monopoly, that the government should do something to prevent businesses from operating like that, I'd never expect them to be from the right to be honest.
So consider several perspectives:
a. The government should be in charge of, or at least heavily involved in, planning and organizing most resources in a country.
b. The market is a good way of solving most problems, and it works best if you just leave it alone, enforcing only very minimal rules (like property ownership, contracts, and such).
c. The market can be a good way of solving many problems, if it's regulated so that it has the properties you want.
Now consider other questions: Should abortion or pornography be legal / easily available? Should we invest in a large military? Should the government actively support "diversity" programs? Should gay marriage be allowed? How should the government relate to transgender people?
There are LOTS of people who believe in c as a principle, but have very non-"lefty" opinions on the other questions. Loads of people who consider themselves "on the right" think that everyone "on the left" actually believes a, not c; and loads of people who consider themselves "on the left" think that everyone "on the right" actually believes b, not c.
My sense is actually that the reason he talks that way is to make sure that people who consider themselves "on the left" don't mistake him for being someone "on the right" (and therefore in camp b), and immediately dismiss his claims.
>My sense is actually that the reason he talks that way is to make sure that people who consider themselves "on the left" don't mistake him for being someone "on the right"
If so he has sorely missed the mark. I pretty heavily associate the phrasing "the $X left" with disengenuous right wing pundits. Knowing nothing else about the author, seeing that pop up repeatedly doesn't merely suggest that he's on the "right", but that he's writing the piece with a politically motivated axe to grind.
> My sense is actually that the reason he talks that way is to make sure that people who consider themselves "on the left" don't mistake him for being someone "on the right" (and therefore in camp b), and immediately dismiss his claims.
This is a tad naive I think. "antitrust left" is also to useful term to use to signal to the billionaire class of Democratic party that you are not their enemy. If the author actually agreed with many of the antitrust group's positions and housing policy was one of the few exceptions they disagreed on, they would shy away from using the term. The only reason you would use that term is because you want to bring disrepute to their entire platform.
These abundance folks appear to be the only hope the billionaire Democrats have after having sunk so low as to direct their media assets to support Cuomo and to pour bucketloads money into the coffers of the corrupt disgraced governor in order prevent those "wacky socialists" to gain any more traction.
Since the authors are arguing for removing a lot of current housing regulation, I have a hard time seeing how "the billionaire class of the Democratic Party" would consider them their enemy -- unless, of course they're mistaken for people in class b.
>Since the authors are arguing for removing a lot of current housing regulation
Human beings like to know if the person they're reading is on their side before they take the time to read a long ass article to make sure they are in fact on their side, especially if they're billionaires and think they don't have the time to read long ass articles about housing policy unless they think it's going to an extremely useful to them beforehand. That's the whole point of giving that signal literally in the intro paragraph.
Because the underlying beliefs of a 'left' anti-monopolist and a 'right' anti-monopolist are likely very different, and similarly their proposed solutions and view of an ideal society will also diverge significantly?
---
Also, it should be noted that we lack sufficiently concise but specific terms to use instead, and because alternative terms that are used are relative, and open to interpretation.
e.g.:
Many political commentators currently use the term "populist" to describe someone who's somewhat divergent from the capitalist political mainstream (and in US terms, I'd include the current Democrat establishment and traditional non-MAGA Republicans in this group). But when the term is applied to people as diverse as Corbyn, Sanders, and AOC on the one side, and Orban, Farage, and Trump on the other, it's nonsensical without much more explanation.
> Because the underlying beliefs of a 'left' anti-monopolist and a 'right' anti-monopolist are likely very different, and similarly their proposed solutions...?
Just curious, how "left" and "right" anti-monopolist solutions might be different? I mean, naturally some "left anti-monopolist" people might be in favor of governments taking over industries, but presumably that's not what most of the people in question are advocating at the moment.
> But when the term [populist] is applied to people as diverse as Corbyn, Sanders, and AOC on the one side, and Orban, Farage, and Trump on the other, it's nonsensical without much more explanation.
I don't think so. It's essentially an accusation that they haven't thought through the hard issues: they're saying "We're going to achieve X", when in fact X is simply not possible given the current state of play (or perhaps, not possible without significant negative consequences, like erosion of human rights or setting up an economic or ecological disaster further down the road).
Boris Johnson's promise to conservatives that they'd be able to "make a deal" which allowed them to trade freely with Europe while not accepting immigrants from Europe was just a fantasy. A lot of populist "progressive" politicians make similar kinds of promises.
> I don't think so. It's essentially an accusation that they haven't thought through the hard issues...
...which itself is nosensical as a generic label, without considering policies individually.
Virtually all politicians say things to help them get elected which are somewhere on a spectrum from 'a vision for the future that is unlikely to be delivered' to 'outright lie'. Of course, on the one hand, we want leaders with a positive vision for the future, which means speaking about possibilities which aren't yet realised, but when even leaders as sensible/stodgy as Starmer/Reeves are doing it ("it's all about growth"... then deliver virtually no policies to meaningfully drive growth) you can see where the growing mistrust of politicians comes from.
I'd characterise "populist" more as "willing to challenge the status quo" - where the status quo in this case is boring centerist politics that rarely/never delivers exciting or meaningful change, is more or less (depending on the country) in the pocket of big business and donors, and which has overseen a progressive worsening of financial inequality and funadamental justice over decades. Which is why the establishment are threatened and use "populist" as an insult, while "populists" are growing their support, be they on the left or right - because people are crying out for something different, even if it comes with potential downsides.
It's a shame to let two words color your opinion on an entire piece like that; I found it to be really compelling.
Your last paragraph is a bit confusing; is it your position that Derek's lying? Which quote did you think was inaccurate? Or are you specifically concerned with his rhetoric?
Two words that were repeated at least a half dozen times and used as the framing for the article. I literally went and looked at past articles to see how much this framing was used (and it wasn't) because when you use this framing you are literally appealing to tribalism and usually that comes with a LOT of other baggage.
Yes, that's why I commented, as a kind of feedback, the piece could be so much better with a very small tweak. Replace "antitrust-left" with the name of the exact handful of people whose book/article/stance you are refuting.
Yeah this article treats it like an either/or situation where monopoly's somehow make it so regulations aren't the issue instead of what most of the monopoly takes say which is that monopoly builders make the situation worse and combine with the other problems.
There is a specific group of people, matt stoller being the primary leader in the media, who are the "anti trust left". There is another specific group of people who are "abundance liberals" (dereck thompson and ezra klein being main media leaders) and there is an active competition inside the democratic/left of center politico-academic-policy-legal-media blob over prioritization of laypeoples attention and allegiance/belief which is in fact a finite resource and relatively zero sum between the two camps.
I sense the labelling is a tell of sorts. As to the critique, I think the focus on homebuilder corporate profits leaves out important parts of the ecosystem. As example: Observing the only profitablity of Toys R Us as it collapsed would mislead you as to the very profitable exploit that KKR and Bain executed.
Its a great article though, lots of facts to ponder. Would love a view of the next layer up into financial arrangements in those Texas housing markets.
I watched an interview with both the authors. They read as both left leaning but self critical of the regulations the left has put in place. It seemed like this leftist identity is part of the story so maybe that is why it is mentioned so much.
The abundance vs anti abundance schism is internal on the left wing side of politics.
The author of this article was also one of the authors of the titular Abundance book which named the movement, so he’s not positioning himself as the other side of the “anti trust left”, he quite literally is the other side that that group is fighting with
It all makes sense when you take "abundance liberalism" for what it actually is: a rebranding of neoliberalism in support of establishment democrats. Its main goal is not to provide the democratic party with a new direction, but to defend the status quo against the populist left, incarnated by the likes of AOC and Mamdani.
It makes sense then, that they'd spend more time attacking the left than the right, as they realize where the existential threat to the current democratic party lies. Personally, I think it's good that they're afraid.
The Abundance movement is decidedly not pushing for the status quo. They are pushing for removing a good number of regulations on home building and zoning.
You misread my comment, I meant the status quo of the current democratic party leadership.
Whatever deregulation "abundance liberalism" pushes for, it will immediately be killed off or undone by the people that benefitted from those regulations. The democratic party is plagued by private interests (almost as much as the republicans), who very much do not want to see homes getting cheaper.
The establishment, through its neoliberalist direction, has shown that it has either no interest or is completely powerless to curb the growing inequalities and societal issues stemming from them. Only a fool would fall for it again, because it is rebranded from "neoliberalism" to "abundance liberalism". "Deregulation" has been the chief word in politics for 50 years, what makes you think it will lead to somthing any different this time?
No, this guy (the writer of the article) has no idea what he’s talking about. I say this as someone isn’t even on the left.
He sets a false dichotomy to protect himself from criticism. Zoning/building codes being too strict and monopolies existing in that market aren’t incompatible.
It’s worth noting that there’s a lot of money behind this abundance movement or whatever, so that’s something to take into account when reading this stuff.
Truthfully, I don't. IMHO, abundance liberalism has a blind spot when it comes to the power of money in modern politics. We didn't stumble into a situation where buying a house requires an entire lifetime of work out of sheer bad luck. Some private interests greatly benefit from this situation and have enough power to keep things from changing.
Until we address this, and the abundance crowd doesn't want to, all of this is pointless bickering.
Have you read the book? A large portion of it is dedicated to how we got here.
Nimbyism and people’s desire to keep their property value high is part of it. The levers that have been used to make those values high include a ton of regulation that makes it impossible to build start ups homes even if you were a perfectly moral actor seeking to generate exactly 0 profit.
> until we address all of this
Address what? I was convinced by Ezra and Derek because they constantly show real evidence as the opposing side keeps bringing vibes.
What are your actual, concrete issues that you think the abundance crowd is not addressing and what are your specific policy positions that you think need to be implemented first?
> people’s desire to keep their property value high is part of it.
Yes, exactly, and what are Klein and Thompson proposing to fix this? Fuck all. They only write about curing the symptoms of this crisis while telling us to ignore the root cause of it all: housing is now a very popular investment vehicle, used by many powerful private interests who absolutely wouldn't want to see their portfolios halve in values.
How are we to believe that the Democratic establishment, lead by the same old people, backed by the same old wealthy donors, will now be able to make a stand against the very people that put us in this situation in the first place, and are now funding the politicians and "thinkers" behind this movement?
Abundance liberalism is nothing but a rebranding of neoliberalism in a desperate attempt to astroturf a renewed interest in the failing democratic party. It is running away from any reform that would be critical to capital, hence why they dispense so much vitriol on the progressives and almost none on the right.
tldr: abundance does not address money in politics because it is birthed from it, and will therefore never be able to fix the housing crisis because its existence is convenient to capital.
What they proposed is that we reduce regulations strangling the building of housing. The sheer quantity of regulation being the problem. We can have some for things we really care about, but we need to value actually building housing at something other than at the bottom of the priority list.
If you want a real world example of policies under this agenda that have now been put into place, look at the California budget passed under Newsom a month ago under the section literally titled “Advancing an Abundance Agenda”
> It is running away from any reform that would be critical to capital, hence why they dispense so much vitriol on the progressives and almost none on the right.
It has vitriol to the type of progressive who crows about if you scratch a liberal a fascist bleeds. The default for the right is that they are bad, the type of discussions like the one in the article this thread is about are internal left infighting, not intended for the general public.
Also I will quibble on you that it’s not a reform to capital. Saying everyone gets rich from the benefits of capitalism, by structural design, is a reform from our current “git gud” increasingly laissez faire approach.
If you’re one of those folks whose arguing for abolishing capitalism entirely, I agree with your end goal but I think we’re a century or two of progress at reducing scarcity away from implementing that level of reform
Why do I see so many critiques of the abundance movement based on factional motives and ad hominem, and so little critique of the arguments they make?
If progressives want to expand government, government needs to be effective. Abundance liberalism is about learning from the mistakes of the past and making government better able to achieve to goals both liberals and progressives want.
If we're talking about factional infighting, leftists are "afraid" the neoliberals will offer a compelling path forward instead of pivoting to socialism, so they resist arguments that would otherwise be beneficial to their political goals.
Here's how a rational market works. If I build an apartment complex, eventually those apartments will get older and more affordable. And even before that upper middle class folks will move in, freeing up their previous homes.
But that's not how many in local governments see it. So you have affordable housing quotas on new developments.
The problem is twofold, first it's too difficult to build homes. In California you can literally just claim a new highrise will block your sunlight and make you sad. That's enough to delay a construction.
Parking requirements ensure space that could be occupied by people is instead reserved for vehicles. Plus the parking structure itself drives up the cost to build, 30% of your construction cost isn't unreasonable.
On a macro level, many cities should of fixed their issues with inadequate housing construction decades ago.
On a personal level, you need to go where you can afford.
After about 4 generations of living in LA about half my family has left. It's more than possible to make it off a middle class salary, but you need to make that choice.
If you stay in an unaffordable city you can't wait around waiting for politicians to fix it.
Might regulations be the result of these "rational markets"? After all, if I invest a lot of money to build apartments, I might want to protect that investment by lobbying for regulations to make it harder for competitors, increasing the value of my investment. Or if I buy an apartment, I might want to prevent others from ruining my view, prevent noise, etc. All completely rational.
I think this is the thing these types of arguments miss. Regulations are the result of another type of market, the vote market. That's the whole point, to counteract hidden failures of the market with another feedback mechanism.
For what it's worth, imho Thompson presents a strawman argument about oligopolies to avoid the real critiques. He even kinda contradicts himself at the end because it's convenient for his argument.
It's never really about oligopolies writ large, it's about the players in the local decision in the moment (which is all that matters) and who profits at whose expense with what consequences.
Whether it is or isn't seems immaterial if you're of the opinion that government should step in to solve issues where the market has proved ineffective.
If it's the case that market participants have an imperative to convince the government to screw everyone else over: a solution preventing the government from being convinced by small petty nonsense seems remarkably simple, relative to the other kinds of policy challenges that exist.
For years in Washington DC there was one single crank who went to every community engagement meeting and prevented hundreds of units of housing from getting built.
I’ll be so interested to see what happens to this kind of thing.
I feel like we saw the absurd version of it over the past decade, where society at large had acted as though highly online reactionaries are quality signals of an underlying current.
It seems as though market share in that model is failing. I predict the pendulum will swing the other way across the board, and loud minorities in in-person forums will be given less credence… for good (by my estimation in this case) and bad.
Perhaps they have not been given the credence that you assume. It is typically not the NIMBY complainers who have the capacity to hire powerful experts to argue their cases in Councils and courtrooms ad nauseam. That is heavily weighted towards the developer side. I say that having worked for such developers, to further their cases in great detail.
Factors like failing or under-capacity infrastructure are coming to the fore a lot more in recent years. I've been in land development for about 25 years, and an increasingly common theme in my region is that a landowner wants a new suburb, but is not willing to upgrade all the necessary pipes and roads in order to not overwhelm existing upstream/downstream systems, and conversely the public are literally not able to subsidise that for them - public money is almost always stretched very thin already.
Housing crisis is observed in almost all what is called "first world" (europe, japan, usa). I believe that 90% of the issue is more global than a regulation.
Japan doesn't have a housing crisis. I'm in a great location in Tokyo, the rent is under $750/month, and it's been the same for the decade+ I've been in this specific place.
If there's a problem, it's too many empty homes in aging rural areas. Cities are doing just fine, even with a growing population in Tokyo.
New apartment prices in Tokyo are double what they were a few years ago. [1] The reason is foreign investors buying up loads of properties and sitting on them or turning them into AirBNBs. Locals can't afford them because wages aren't increasing. The concept of buying a property to resell it also isn't a thing amongst locals, so it's clueless rich people and corporations buying up properties and thinking they can flip them, which won't be happening any time soon.
But after a few years of squeezing, locals may have no choice but to pay their entire paycheck to foreign investors. Though thankfully the government is planning to take steps to potentially outlaw foreign buyers. If we're lucky, and some parties get their way, they might just strip the properties from them. If you're not living here, you have no business owning dozens of homes.
My shallow experience of Japan tells me that if there's one country that can regulate the shit of the airbnb problem, it's this one. We're so used in the west to see properties as an asset that only appreciates that we've lost sight of what homes are meant to be. Meanwhile the whole Mediterranean coast is being bought by foreigners with the help of greedy local fucks. I've been told the Portuguese have it much worse even.
Nothing vents off like a bit of class hate, doesnt it. Locals from your description act legally within the limits of the law, if you dont like situation change laws, thats the way for a change.
Everybody maximizes their profit and thinks first and foremost about themselves and only then about the rest. Case point - a better half of this forum works/worked for faangs and their variants who destroy privacy and more of whole mankind for the sake of profit for themselves, and even pat themselves in the back how effectively they helped the 'the goal'.
> if you dont like situation change laws, thats the way for a change
Which is done by protesting and advocating for it. Not being in a "that's the way things are" attitude.
> Everybody maximizes their profit and thinks first and foremost about themselves and only then about the rest.
What a sad way to see life. It is so easy to find countless examples of people doing exactly not that. American individualism really got to your brain.
I see a difference in-between selling your property at current market rate and having a business which relies on destroying the housing supply to make profit. I don't work for companies who "destroy privacy and more" even though it would be in my interest, many of us are not pure profit-maximizers.
> it's clueless rich people and corporations buying up properties and thinking they can flip them
so the original owner got a nice priced deal out of the sale. Then, when said clueless rich person decides to sell in the future due to being unable to hold on to it any more, they make a loss (which is a gain for that future buyer, whoever they are).
> after a few years of squeezing, locals may have no choice but to pay their entire paycheck to foreign investors
why the squeeze? If the airBNB is being occupied, then it simply means the price for the rental was correct, and it was artificially low before (due to the demand not being met for short term stays).
An AirBNB can be occupied for 2 days a week and make more than typical rent.
People who see homes as a mere unit of value meant to be priced on a global scale, and not something people should be living in, are simply inhuman. People in cities around the world are getting fed up with it, with justified protests and even riots happening.
Rentseeking has no limit. Unimaginably rich corporations can buy up every property and leave almost everyone homeless. They can take 90% of the paychecks of everyone else. And they'll say "well prices were artificially low before." No. Now they're artificially high. People in desperate situations pay more and take out debt because they have no other reasonable choice.
The global issue is that elected representatives are becoming weaker.
The idea that a city hall would need to organize some sort of public meeting before approving a construction project is a fairly new one. The city council is elected to represent the people. If they need "community input" why are they even here? (Nevermind the obvious problem with such participatory process - sane and normal people can't participate in every local government decision unless it's their job. Hence why we have representative democracy.)
If you told someone in the 1980s that the British parliament couldn't impose its will on QUANGOs and local governments to build a rail line, they'd look at you as if you were insane. Parliament's power is supposed to be absolute. Yet that's what's happening with HS2.
"Sane and normal people can't participate in every local government decision unless it's their job. Hence why we have representative democracy".
While true, times have changed. The information flow is orders of magnitude faster and have you seen any sane and normal people lately? The norm is spending hours scrolling social media. The argument that nobody has spare time/attention and thus we all need representatives falls flat to me.
We need to explore alternative forms of representation to allow people to choose their level of engagement in various levels of government. Perhaps I'm happy to delegate all national matters to a representative I trust but want to regularly weigh in on local decisions.
Between the technical challenge of trust/security and the inevitable political resistance to such ideas, I sadly don't expect to see them implemented any time soon.
Is this because the representatives are becoming weaker - or is it because we're asking the government to get involved in such a huge portion of what used to be free (as in speech) that it's impractical for them to pay attention themselves at the necessary level, and have to offload the work somehow?
That is, I'm claiming that government can't scale to the levels that the 20th Century escalated it to, with any degree of efficiency at all.
Housing prices have skyrocketed in the developed world since the 90s, and it has nothing to do with inflation (as the inflation in the 90s — early 2000s was very limited).
Japan does not.
But it's also the place that didn't (fully) decide to try to keep it's population growing into perpetuity with migration and also has some other more unique market and monetary conditions.
If it was, then the housing price would be correlated with the level of regulation, but it's not (housing less dense places is always cheaper than housing in big cities, even if you compare the most heavily regulated place on earth with the least regulated big city in the world.
> Here's how a rational market works.
A rational market made from human is as realistic as “dry water”.
The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.
> The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.
I like your thesis, but can you give more information on the nature of the policies that drive the housing market in the manner you describe, but which aren't just "regulation" that makes it directly harder (e.g. you can't build housing in this zone) or more expensive (e.g. minimum plot sizes, parking requirements, building codes)?
Interest rates is the biggest one, but also most fiscal policies related to housing (fiscal exemptions on the revenues coming from rents, the possibility for an individual to deduce the interests of their mortgage from their income taxes, or the absence of taxes on the benefits you make from selling a house).
There are as many such policies as there are countries so not all the above examples necessarily exist in your country (my country — France — having the first and the last one above but not the one about mortgage interests for instance) but they all share the same underlying world model of housing being an “asset you invest on” instead of the “commodity that slowly but surely loses value over time” it really is.
No. The key issue is just the rise and rise of inequality. As more money funnels to the top (thanks covid) the top buy more of the available assets leading to asset inflation.
Nothing will reverse this other than a tax on wealth. Tax wealth, not income.
Yes rising inequalities are a problem, but the housing price being absurdly high is a much broader problem: when a middle class family spends $500k+ for a house, they are part of the systemic problem. Same when the same family expects such a sum when selling the old house they inherited from their boomer parents.
I don’t care what kind of towel you buy to dry yourself off with, I do care that you inherited a house from your ancestors who moved into the area 200 years ago and now a major metro area can’t build enough housing because you like the view.
That is not a sufficient justification to infringe upon property rights.
While I'm sympathetic to the whining about "well they're a big business interest they oughta be able to work around the constraints" we are at least nominally all equal under the law where those things trickle down and at the end of the day that type of garbage winds up most applying to the little guy who can't afford lawyers and convolution
But you are infringing on others property rights just because you consider your rights higher and better than others and your cause holier than theirs. May be true or not, not something I nor you can judge objectively. Your rights end where others' begin and so on.
If by property rights you mean your right to have house/apartment where you like it, otherwise no idea what you mean.
Throw out a made up percentage and proceed to start talking about rational markets as if they exist in the real world. I immediately know this analysis is going to be great. Older houses are obviously cheaper for some reason even though housing prices in city centers keep increasing. Poor people are the real problem for needing a place to live. With the conclusion that there is nothing that can be done and people just have to take it. That's abundance (jazz hands)
There is an incredibly large lobby group who is fully invested in
house prices rising or at least not falling, namely homeowners.
and since most politicians at a high level usually own one or more
houses, they are fully invested in it as well.
I'm a homeowner and rising house prices are terrible for me. Property taxes have doubled, and the prospect of switching neighborhoods (as one might consider doing for work, school, or other reasons) feels off the table given the high costs involved in the transaction, since agent fees are a percentage of the sale.
But some homeowners are to blame, at the civic level, where those who are happy with the way things are reinforce the roadblocks against affordable housing. Minimum lot sizes and anti-apartment legislation dissuade the pesky low-income riff-raff from moving in.
> and since most politicians at a high level usually own one or more houses,
That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!
> That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!
Even if the data seems to indicate that's true, I do see this statement thrown around a lot without much granularity into the groups counted.
In your link, it's broken down into a few different groups, but in terms of renters vs owners I'm kind of less interested in proportion of people eligible to vote who fit into each broad category, and more interested in normalized categories. How many more people who didn't vote and are renters share a rental unit with someone they're not tied to long-term, or rent alone, compared to people who own alone or own in a long-term committed relationship where both people would be owners and likely to physically vote together, for example.
As in, is there as significant of difference between households of the same structure, income level, age bracket, in terms of voter turnout (a couple sharing the status of renting or sharing the status of owning). I feel like you'd be much more likely to vote if your spouse that you split expenses and responsibilities with also votes, whereas your roommate might not give a damn and it has nothing much to do with you.
Likewise if you own a 1 bedroom condo alone, does that show up as different than someone who rents a 1 bedroom condo alone?
It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments and own undesired property. Cities don't want housing prices to fall, since they were counting on money from developers and property taxes.
I don’t agree with this take, we’re overly simplifying the nature of housing here. It depends on the housing mix as well. If the vast majority of the pro-housing prices crowd is heavily invested in single family residential then they should favour widespread upzoning and deregulation of apartments because that would increase the value of their SFHs through two mechanisms: 1) presumably single family homes will be destroyed so any remaining single family homes become more valuable and 2) every single family home is now a potential townhouse or high density building which increases the value a developer would pay for it.
Are there any serious objections to that line of reasoning?
No, what you said is mostly correct; but I'm mostly talking about not having home prices go down, which is different but related.
There are different kinds of homeowners. There are those who are flipping houses and directly betting that the values go up, which is the crowd that you're describing. But at least in my area of the world, the majority of the anti-housing crowd is just old and is more anti-change than anything else. Even if the value of their home skyrockets even more, they won't sell and move. Their complaints are more about noise, traffic, and "quality of life" than home values.
I think the value of their main residence is a bigger driver than opportunities through zoning changes. It's easier to sit in your house year after year as it increases in value than it is to go through a redevelopment process, and have to move or end up with a less impressive residence. I'd guess that many would look for opportunities in denser suburbs elsewhere than agitate to change zoning closer to home.
There are strong factors around character of a neighbourhood: I think people in valuable SFHs tend to resent people in units as one example. Housing prices have typically risen without the assistance of zoning changes.
Property taxes are relatively independent from the absolute value of the property. Only the relative value of a property to other properties in municipality determines property taxes.
In Nevada, it's a percentage (approximately 0.5%, varying from city to city and with other conditions, like commercial usage) of its assessed value, which is 35% of taxable value. Taxable value is the market value of the bare land plus the replacement cost for all improvements on the land, less depreciation.
The cost of running a city is largely independent of house prices, so if the real estate market crashes there is no getting around that municipalities need to increase tax rates to meet their cashflow needs. People may not like that they feel they are getting ripped off, but the existing infrastructure has relatively fixed ongoing costs to maintain.
Ok, where does the percentage come from? It is an arbitrary number set by the municipality to collect enough money from the property owners. Basically, if the city needs $100 million/year to operate it is just going to tweak the tax rate to hit that income number.
For example, in Vancouver the residential tax rate is around 0.15% and homes average around $2 million. Where I live which is a few hundred kilometres away the residential tax rate is around 0.5% and homes average around $600k. If you do the math, for both places the average place has $3000/year in taxes due — which is totally independent of house costs.
What does make the difference is if your house is more expensive than the average house. If you have a $2million dollar house in the place with 0.5% tax rate you are paying $10000/year in taxes despite your counterpart in Vancouver with a $2million dollar house is paying $3000/year.
I get this can be different across the world, but that is generally how it works in Canada.
I never see the NIMBY movement really engage with what falling prices would mean in practice. It just seems impossible to be allowed for any really duration over a large area.
I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).
> I never see the NIMBY movement really engage with what falling prices would mean in practice
It means the landed gentry lose, and the working class win. Unlike the status quo of the past few decades where the landed gentry make fistfuls of cash by doing 0 actual work.
Obviously housing prices going down will make some people's assets mixes worth less. That's why they fight to stop building housing. But that's true for lots of commodities and businesses too. Just because many people are invested in diamonds doesn't mean we have to ban lab grown to save diamond prices
> I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).
If you read between the lines that seems to be what Canada's approach to house affordability is going to be. Their leaders are promising housing will be more "affordable" but that the goal isn't to decrease home prices.
The "anomaly" happened when we were less productive overall. What change made it possible, and why can't we go back?
Western societies are naturally below replacement rate, getting back to sfh as the norm seems like the inevitable outcome without the significant efforts at the national policy level.
Massive federal investment (paid for by the entire nation but often only able to be capitalized on by white Christian nuclear families) and municipal bonds that pushed the costs of building infrastructure out decades.
>why can't we go back?
The original loans are still due and/or replacement costs for the infrastructure require new funding, at 2025 inflated prices, and civil rights and demographic changes mean that the old resistributive model can't work (not the least of which because of the outsize costs that will be incurred to maintain quality of life for the oldest Americans in the next two decades). There's probably more.
Not to say that reimagining the sfh couldn't lead to it still being viable. But 2500 sqft on an acre probably isn't tenable.
If we can keep the price of homes flat for 10 years then homeowners won't get hosed (still increasing equity by paying off principle) and homes get more affordable (assuming steady inflation and wage growth)
There's also a large lobby group that is fully invested in building new houses, namely real estate developers, and since most politicians at a high level usually need large campaign contributions, they are fully invested in it as well.
This is not the problem. We should not castigate people who want to build homes and earn a rightful profit from that endeavor. The problem is the undemocratic process that is the town hearing. It is unreasonable to expect working families and young adults to attend week day, day time hearings to state their position on the construction of new homes or anything else for that matter. The atrocities of urban renewal by Robert Moses and his followers in the 50s and 60s which wrecked many urban and black urban communities, many of which still haven’t recovered, led us into this mess. The antidote was that all movements towards progress must be debated by citizens (mostly seniors as they are the only ones with the luxury of time) in a hearing format. The citizens able to participate are most likely not going to live long enough to see the results of their positions anyways. It’s a disaster.
You want to let rich outsiders make decisions about what happens to a community instead of the people who live there, because... town hearings are undemocratic. All those annoying old people are just going to die anyway, so it's really best to ignore them.
All these old people are going to die now so their incentives don’t really align with people from other demographics. This is factually true, same with how people that have more wealth generally have different incentives than poor people.
I'm all for building more housing, as long as it comes with the necessary infrastructure - schools, roads, parking, public transportation, etc. Where I live, developers seem to get government approval to build in locations where they can rake in a lot of money at high prices without having to worry about such things.
(In fact, my local government is actually closing roads near new housing because "f#ck cars" is apparently a hip idea these days.)
There’s a puzzling contradiction between your claim that developers are the problem, on one hand, and then your own anecdote on the other, not to mention the article that very convincingly debunks the idea that housing shortage is the fault of developers. I must be missing something, because frankly this isn’t making any sense.
I'm not saying that developers are the cause of the housing shortage.
I'm saying that developers are eager to build housing and sometimes are able to cut corners via undue influence over public officials. That leads to more housing (good), but it also erodes the quality of life for residents (bad).
Indeed, that is the only alternative and the favoured option for those trying to make it safe for their kids to bike to school. Though I prefer mules myself.
Usually the town was made "desirable" by residents there from ~1890-1940, and the current NIMBY's are leeching off that. In most cases the desirable part was bulldozed in the 50's-70's to make parking for the suburbanites. Portland, OR had streets that could make you think you were in Budapest before they were demolished in the 40's
That's fine. On one hand the other saying "no" too much will stagnate the local economy, on the other a city doesn't need to accommodate an infinite number of people moving there. Either extreme will hurt property values in the long run, so there's a balance. I've seen places sell themselves out, I've also seen suburban sprawls where naive homeowners feel good about holding a house 20 years only to make 30% gain.
Nobody else should decide the balance but the residents who have semi-permanently set up their lives there. People considering where to move have no skin in the game, they can pick somewhere else if they don't like what they see or can't afford it. Developers at least have something to lose once they've set up shop, but they're still not raising families there. And by "should" I mean, I wouldn't buy a home in a place where homeowners don't have the most say. Those places do exist, and I'd only rent there temporarily.
This has just lead to Boomers getting a death grip on every city. Young people are forced to pay out the nose to rent the scraps of housing left, and then also get taxed to pay out the pensions of the same boomers because they moved all of their cash out of the bank and stocks to put in to a 5 bedroom house in Sydney so now they qualify for welfare.
What do you propose instead to allow younger people to buy homes, and if it were implemented, why would young people still want to buy a home under those rules?
I propose construction approvals be managed by a higher government level than the local council which has so far resulted in disastrous outcomes.
At the state level, planning can be done for the benefit of the whole city. Entrenched groups of property owners holding inner city areas hostage won't be able to push young people to the outskirts where there is no PT, schools or facilities. Medium and high density buildings would be able to be built where they make the most sense, not just where there is the least political resistance.
Young people want to live near jobs, transport, and entertainment. But those areas are currently locked up by property owners preventing construction of appropriate housing.
You're saying young people are pushed to outskirts, but it seems like you mean they can only buy there, and others are renting. Otherwise, there's no way boomers just occupy the entire main part of the city, there aren't that many of them.
So if you enabled them to buy the more desirable homes instead of merely renting, where in this are they actually benefiting from doing so?
What about wealth inequality as the root cause of housing shortage? Even if supply is eased, the wealthy (those who have enough capital to earn passive income) will buy the extra supply and rent to the poor. The Piketty effect takes over, they invest their profit in more housing, wealth inequality continues to get worse, and while more housing exists, it owned by an increasingly small cohort.
Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.
My gut feeling is that wealthy people buying up the housing stock to rent out is not actually as common just supply restrictions not meeting the demands of individuals.
I used to live in Vancouver, and on my street almost all occupants were owners. But guess what, the number of houses on that street has not changes in 100 years, and the number of people who want to live in Vancouver has probably increased tenfold.
The issue wasnt that all the housing stock was bought up, the issue is that housing stock did not increase to satisfy demands.
Additionally, a place like Vancouver is really a global real estate destination. People with money who are not from Canada come to Vancouver and drop a few mil on a single family home and outprice all the locals. If you are buying a house in Vancouver you are competing with wealthy people local, but also the top wealth from across the globe.
BC did pass legislation to make all single family homes qualified for quadplexes, but I think it is too little too late.
Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.
I gave up a few years ago and moved somewhere else. Vancouver is no longer for Canadians.
> Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.
You forgot eliminating favorable taxation for real estate as well.
But actually if you kept all of those factors and simply just increased supply, it would still lower prices. It's not that complicated. It doesn't matter how many incentives you place on top of real estate. If you build more and prices decrease by 20%, it doesn't make demand shoot up by 20%.
The vast majority of people will never purchase more than one home, and will also never leave the metro-area they grew up in.
I think Vancouver people imagine the demand of Chinese real estate investors interested in their city is endless. It is not. Vancouver is the city that has the highest percentage of Chinese-owned real estate outside of China (globally) and its still at only 30%.
And the vast vast majority of cities do not have this dynamic or anything close to it. And the Chinese population is massively declining over the next 40 years, not growing.
That is a huge amount. I don’t blame immigration and foreign ownership as the only issues with Vancouver prices, but 30% of housing stock being owned just by Chinese population is massive. I knew several people who were Chinese nationals and owned a factory or large business in China and then bought a $4 million home in Vancouver. I don’t have any personal issues with these people and I befriend several, but I also realize that foreign capital from the richest residents outside of Canada were out competing locals.
Another thing to consider is that a large number of foreign nationals buying real estate in Vancouver come from countries that have strong capital controls (China, India) whereas Canada has basically no capital controls which results in a pretty onesided trade relationship.
Why not tax primary residences too? Why should housing hoarders pay no tax when someone who invests in a productive business or hoards mostly useless shiny metals has to pay capital gains tax?
They probably could be taxed but not a lot of countries do this and those that do have exemptions.
There's many arguments against taxation of primary residents but the strongest is probably that it punishes and hinders the ability for people to make sideways movements from similar properties to other similar properties, so it hinders housing liquidity, labour movement etc.
Piketty logic assumes infinite demand. Housing demand is very large, large enough to seem infinite when North American cities have spend 100 years banning every form of housing imaginable except the single family house, but it is not actually infinite.
If Piketty was correct, then inflation adjusted housing cost per sqft floor would always go up everywhere all the time. But we see dramatic differences in different periods of history, between different cities and we see rents stabilize & decline after building booms. We see housing costs go up the most in the places that build the least and the least in places that build the most.
If Piketty was correct, rich people could do this with things other than housing - they could buy cars and rent them out and then reinvest the profits to buy more cars. Ofc this doesn't actually work because there is no scarcity of cars - for better or worse we have chosen to place almost no limits on the quantity and density of cars in any city, state or country, while placing extremely tight & arbitrary limits on the quantity & density of floorspace in every city. For every car a rich person buys up to rent out, a car company reinvests the profits to build 1 more and then some. There is no functional reason residential floorspace cannot be exactly like that.
The housing market is much more inelastic than eg. the cars market. Whether demand in housing is infinte is a question of scale of population and wealth growth and elasticity. With that given, i would assume the postulated effect of run-off construction and renting, but we only have poluation growth and not the other two.
Just off the top of my head I can think of plenty of functional reasons why residential floor space cannot be analogous to cars.
Most importantly location matters. Space and buildings are not something that you can easily ship from one market to another to balance supply and demand. Space is inherently limited and replacing existing buildings with new more efficient ones is also problematic when you have people happily living in those old buildings, especially in high demand areas. Construction work takes time and in the meanwhile the displaced families will create even more demand.
There are practical limits on how densely you can pack floor space before it becomes prohibitively expensive, unsafe, or simply impractical. As you build higher the costs grow exponentially while the livable space per floor keeps decreasing due to the tapered shape of the building and need for larger structural core and more elevators. Above certain height you will be forced to target wealthier residents which means either offices or large luxury apartments that are anything but space efficient.
Construction is extremely capital intensive. A building takes a large upfront investment, and it takes a long time for it to pay off. With cars the cost of making more is marginal once you have an assembly line in place so it's significantly easier to re-invest profits into ramping up production.
Renting real estate makes more sense than renting automobiles because real estate is more expensive, less liquid, and better at holding its value over time. Owning a house is more difficult even when it would make financial sense to do so (not everyone can get a mortgage, or commit to living in the same city for an extended period of time).
> for better or worse we have chosen to place almost no limits on the quantity and density of cars
Even worse, most places have chosen to place a lower limit on the quantity and density of cars through parking mandates. It is absolutely insane that we are still wasting space on parking even in densely populated urban centers where it's impossible to accommodate everyone commuting by car.
> Space is inherently limited and replacing existing buildings with new more efficient ones is also problematic when you have people happily living in those old buildings, especially in high demand areas. Construction work takes time and in the meanwhile the displaced families will create even more demand.
The main reason old buildings with lots of people are replaced with somewhat taller new buildings, is because of bad laws that require new apartments to go only where old apartments already exist. IMO these are exactly the laws that need to be reformed and or abolished. It doesn’t mean that no one’s old apartment building will ever be demolished for a new one, but right now that’s effectively a requirement. If you want to add four space to a city, you are first required to demolish a large amount of apartment space, and evict everyone inside. If you could simply purchase a house that was already on the market, whose owners wanted to sell and didn’t want to live there anymore, and replace it with an apartment building he wouldn’t evict anyone. This transaction was once common place, but is now effectively illegal almost everywhere in North America because “house people” demand segregation from apartment people.
> There are practical limits on how densely you can pack floor space before it becomes prohibitively expensive, unsafe, or simply impractical. As you build higher the costs grow exponentially while the livable space per floor keeps decreasing due to the tapered shape of the building and need for larger structural core and more elevators. Above certain height you will be forced to target wealthier residents which means either offices or large luxury apartments that are anything but space efficient.
All true, but these limits are really only relevant or binding in Manhattan and perhaps one of two square miles worth of downtown cores in a few large cities. If someone wants to say that Manhattan will always be expensive for those reasons, that’s fine, but it’s no excuse for the other 99.99% of places people want to live in.
Reforming land use successfully IMO doesn’t require us to solve the problem of “how to make Manhattan (or places like Manhattan) even taller” but the much more economical goal of “it should be legal to build a 4 storey walk up with no parking, anywhere you can build a house.” That’s a tough political goal to be sure, but it doesn’t come close to having to deal with any sort of physical or efficiency limits regarding construction of very tall buildings.
You haven't actually worked this example out. Try it. The wealthy buy the extra supply; they now compete with all the existing supply for tenants. What happens next?
I live in Seattle, and this is a scapegoat. it's another way to point a finger at anything but massive restrictions on supply. The easiest solution to collusion to keep prices high is to let lots of other people build and compete down price. In Washington, most new construction happens on a very small number of parcels, because that's the only place we allow it.
Nobody concerned about rent price fixing thinks that we don't also need to build more housing here. This is just another part of the problem. Are you defending the practice?
I think it simply doesn't matter. The only reason it could have any impact at all is in an incredibly constrained market. Unconstrain the market and they just won't be able to; it wouldn't work.
Also - I don't think it actually affects prices. It's just that they've gotten good at seeking price equilibrium.
Seattle upzoned huge chunks of the city, allowed ADUs (now two adus are permitted on all lots), and removed single family zoning. All within the past five years.
Last year, Seattle built 20% more houses than the highest of any of the previous ten years. (~13k units) And this year we're 11% above last year, so far.
What about that is not "actually encouraging more building"? I'd say your data might need revising.
It's honestly not that much. I know it looks good when comparing to recent years, but it doesn't look as good when you look at regional numbers (the city limits don't matter much in a housing market) - and the number of ADUs you can build in the entire city in a year is lower than some single new apartment buildings. We aren't keeping up with demand, much less drawing down the likely hundreds of thousands (seriously) of units we need to allow.
Housing is a depreciating asset. Even if you're trying to continuously corner the market, you'll be losing money in the long run if you're not actually renting the units for more than you're buying them for.
If supply can be built to meet demand, trying to corner the market to achieve monopoly rents will fail in the long run.
Land isn't. And the house is depreciating, but not the value of having a rental at that location. My house is worth four times what I bought it for a decade ago. The house itself is depreciating, and because I rent a portion of it, I can claim that depreciation, but the value of the property is going up.
Collusion on housing only works when there is a shortage. As soon as the shortage ends units go unfilled and landlords defect. Collusion works in industries where supply can change in the short run, tough to do that in real estate. Real estate elasticity is so high though that small collusion can work, but only if there is already a shortage. Yet, again the solution is just build more.
Their point is that an increased housing supply should shift it to a buyer's market - it's not just how many tenants there are but how many housing units vs how many tennants.
The premise here is investors that just continually buy up all the supply, even as supply continues to increase, in the hopes that some day housing, the single largest asset class in the United States, will reach the limit of all possible supply? You don't feel like this is "spherical cow" calculating? The amount of investor-owned housing in most metro markets is a rounding error, and the amount of vacant investor-owned housing is smaller than that.
The logic you're using here depends on deliberate vacancy; as soon as you concede that investors let out properties, you force them to compete in the market for housing with all the other supply.
I'm trying to track this argument through this thread but I feel like something has gotten lost here, is there someone arguing against increasing the housing supply? Like, did someone upthread say something like "no, I think we should not build more houses"?
Or is the argument that merely building more houses isn't sufficient?
(Also presumably you could build an infinite amount of houses, but the land itself is somewhat of a fixed supply...)
> is there someone arguing against increasing the housing supply?
Yes. The central thesis of the blog post is that increasing the housing supply solves the housing price issues.
And other people in this thread are going: "Uhh, well actually, have you considered that this is the fault of wealthy investors, and/or collusion or something"?
Anything to distract from the extremely simply and obvious idea that building more housing causes prices to fall.
Yeah except it almost always gravitates to a cartel, almost always, because that is how people work, even when piloting corporate machines.
I'm speculating here, but I'm guessing you haven't been month to month rent in a while..
EDIT: you seemed to have tried to redirect the question to this "always buy up more land as an appreciating asset", when both can be true. "Buying that land is an appreciating asset (we haven't made much more I'm aware)" and that "forming an asymmetrical power relationship with the renters improves owners life" are mutually beneficial activities
Housing returns have constantly lagged behind equities in the US. In the long run it’s almost always preferable to hold stocks as most of your investments in the US.
If - hypothetically - I had a ton of money and buying another house or two or fifteen wasn't a big deal, wouldn't there be a clear-ish signal that I should stop my demand for more housing lest too much supply screw with my income? I would also have an incentive to deploy some of my resources/capital to making sure that the supply of housing is juuuuuuust right for my extractive needs.
It is all fine as long as repayments on principal are faster than depreciation. Might mean larger down payments or shorter durations. As long as you can reasonably expect collateral to stay above principal math does work out in my mind.
Car loans have been a thing. And they attach to depreciating asset.
Yeah, Neither you nor the parent have worked the forces out to describe what's happening now.
What's happening now is the wealth and the middle are buying houses and apartments not for rental income but for appreciation. This motive is what stands in the way of new home building in any given area. This is why rents rise beyond an area can sustain at all - rents are set to maintain the ostensible value of a property - selling an empty property is fine, even encouraged.
We'd revert to the state that applied for most of human history: 99% of humans will be serfs renting from 1% hereditary landlords. We'll have shown the American mid-century home-owning middle-class phenomena to be an historical anomoly. Average living standards will plummet and equity barons will never have lived so well. Any short-term rental rate drops will quickly be erased by a combination of growing population and well-known market manipulation, in particular further wealth consolidation.
Mere millionaires think they are safe; they are not. We live in a world that has a ~10 OOM wealth scale; being at level 7 does very little to protect you from 8s 9s and 10s, just as 2s are powerless to 4s and above. To a 10 a 7 may as well be a New Dehli beggar.
If capital returns 5% and the economy grows at 1%, where does the extra wealth come from? Spoiler: it's a transfer from the poorest to the wealthiest. Asset classes include stocks, bonds, real-estate, art, and metals. So if artists make more art, will this make art ownership more accessible to the average person? Or will it be a small transient soon erased by the monumental financial forces pulling all assets into the ownership and control of a tiny few? That art that your grandparents bought for $500 is now work $100k; you have student debt and high rent, so of course you sell it. The house your parents bought for $18k is worth $1M and they need end-of-life care, and you're own kids are expensive, so of course you sell it. The movement is irrestable.
tptacek is asking how investors buying properties to rent them out, which clearly leads to increased rental supply, then somehow supposedly leads to higher, not lower, rents.
Increased rental supply at the cost of decreased home ownership.
There is already price manipulation with rental properties. If a cartel is in control of enough of the supply they can set their prices as high as the market can afford. There is already a nationwide shortage of affordable housing in desirable places with jobs and the idea ITT is that it will only get worse as the investment class are the only people that can afford desirable property.
> they can set their prices as high as the market can afford.
which is the correct price - because you dont need a cartel to set the price at as high as the market can afford; each individual landlord chooses to price their rental at the highest profit they can, with the lowest chance of a vacancy.
A cartel makes it possible to set the price _higher_ than the market can afford. Which is why a cartel is illegal.
Recognizing your frustration with reality's failure to adhere to the academic: the fact is that rent rates for corporate-owned units generally don't go down. At least, not in recent history. In the rare cases where cartel behavior doesn't work to cement rates, and owners have to respond somehow to market conditions in order to avoid cash-flow disruption, they will offer "specials" that lower the out-of-pocket cost, but not the on-paper rental rate, for a unit. Your oft-found "1 month free"-type deals (that are actually a monthly bill credit for the initial lease term). Upon renewal, your increase is based on that paper rate, not what you were actually paying.
Recent history has been corporate rents not decreasing amid tight supply, the question being asked repeatedly (and repeatedly not answered) in this thread is “how exactly would landlords continue seeking high rents if housing were no longer scarce?” The only answer so far has been “by buying up the supply and renting it out” which completely ignores the obvious fact that renting out housing may reduce the supply of purchasable properties, but increases the supply of rental properties. There is no reason to assume collusion among a set of landlords would be enough to keep rental prices high if supply is no longer tight. So how exactly would landlords continue seeking be able to keep prices high if supply continues to increase?
Not a direct response but just a follow up question. I'm curious how much surplus supply folks think there needs to be in such a scenario. We've seen that landlords are willing to hold units vacant in order to keep their property values up and avoid renting out at a lower price. At what point does thw math say that should collapse? 10% vacancy? 15%? 30%?
Empty properties barely exist as a percentage of total housing supply in high cost of living areas in the US. You’re looking at no more than a few tenths of of a percentage point of NYC’s more than 4 million units.
Examining empty ownership as a percentage of overall housing in America, which has tens of millions of units, is not a very helpful way of categorizing a highly localized and locally felt phenomenon.
The real effect of this type of ownership is that it distorts the high end of the market and the effects ripple downstream. They force cash to move elsewhere in search of housing, which inflates those markets, so then those who could afford those markets move elsewhere, etc.
Despite all of the data that gets lobbed around on this topic, we don’t seem to have a very good mental model for how small changes in one segment of the market explode into the others and cascade dramatically.
It’s just not very meaningful to examine this as a percentage of units.
> Examining empty ownership as a percentage of overall housing in America, which has tens of millions of units, is not a very helpful way of categorizing a highly localized and locally felt phenomenon.
That’s why I specified NYC. There’s actually very good economic work on how the housing market is segmented and how demand and supply spill over. There’s some good studies from the NYU’s Furman Center on the topic.
> It’s just not very meaningful to examine this as a percentage of units.
Warehoused condos make up a small fraction of high cost housing in NYC and exist almost solely in a handful of blocks in Manhattan. They have virtually no effect on the broader luxury market, and take up very little land as they are mostly crammed into a small number of buildings.
Feb 2024 (last year there's data, I think) was a record low and it was 1.4% empty, according to NYC[1].
But I don't really know the methodology, and according to other nyc gov data it's surprising, since we still haven't recovered our population from COVID[2].
The first statistic (housing pressure) is based on population growth, but the NYC population statistics suggest still meaningful population loss since 2020.
I have seen articles in the past that suggest that apartment vacancy rates in NYC are self-reported and misleading at best, but I don't really understand how that would work and I can't find any sources on that now.
It's also my understanding that some classes of landlords can mark empty apartments as income losses, basically or partially making up for the loss of revenue in tax rebates. But that's also not something I understand well, just something I have seen asserted.
1.4% vacancy in a housing market is extraordinarily low. Remember: there is structurally always some material amount of vacancy, because people vacate housing units well before new people move into them. This, by the way, is a stat whose interpretation you can just look up. Real estate people use it as a benchmark.
Yeah I know it's among the lowest in the world, it's still an ~order of magnitude higher than a few tenths of a percent, which would be shocking for the reasons you mention.
My point though was just that I've seen arguments that these numbers can be manipulated, and the city's own data doesn't make sense by itself: either the 1.4% number is wrong or the slowly recovering population estimate is wrong. Especially considering the 60,000 housing units (representing 2% growth) created.
Vacancy doesn’t mean units held empty as either a parking place for cash or held off the market. Vacancy happens when you’re painting and repairing between rentals. Vacancy happens when there’s a renovation. Things like that are normal and not nefarious. Have 1.4% vacancy rate means there is essentially no usable housing for rent.
I was talking about the myth that there are tons of apartments held by rich people who don’t use them for anything.
My understanding is that vacancy means available units for rent. So, plausibly, if you say 50 of the 100 units in your building aren't available for rent because you say they're being painted then they don't contribute to the vacancy of your building.
That's almost the exact opposite of your definition, but I agree that a 1.4% vacancy rate means there's almost nothing available for rent.
Do you have any actual data on the rate of unoccupied properties that are not recently or soon to be available to rent in any major US markets? It seems like kind of hard data to find from my brief perusing around. I'm very interested in seeing some reliable data on this.
I had thought such units would have been included in the housing vacancy statistics, but apparently they are not.
I haven’t spent much time looking at any place other than New York. But there’s census data, tax data, and a lot of public records. The number of empty units is small. The total is probably close to 40k, but that’s a fuzzy number and moving target. That includes regular vacant units.
The total housing supply remains static - the number of owners goes down and the tenants increase, so the S/D curve for housing stays the same. Then the wealthy consolidate the supply into smaller, more powerful groups who drive up rents via monopolist and cartel behavior (eg RealPage).
It costs money to hold on to a unit of housing. Supply is increasing (that's the premise; nobody is proposing a one-time increase in supply). How does the investor profit?
The investor profits from the appreciation of the property - they may Airbnb in the meantime also. Especially, often the speculator will fix-up the property for a sale - and then the next buyer fixes it up as well. Eventually it be a vacation home or someone might even buy it but the entire process keep a lot of property off the rental market and that increases rents.
If a small number of landlords continue to control the supply (which I understand to also be part of the premise) then they can charge whatever rate allows them to profit. Housing is pretty inelastic and is a first order priority for most people, so they will pay the maximum they can afford if they have to. At least near me, most of the housing being created is owned by large corporations like the Irvine Company, it’s not individual owned.
I'm asking: how does a small number of landlords continue to "control the supply" of an ever-increasing supply of housing when each of their holdings is non-remunerative (and, in fact, incurs tax and maintenance costs). This seems like a pretty simple math problem, a bet that you would not take if it was laid out in front of you, but I'm waiting for someone to explain how that might not be the case.
Keep in mind: as soon as you concede that investor-owners are letting out properties, they are competing in the market: further supply of housing decreases their returns, because they compete with all other suppliers of housing, the high-order bit of which is existing owners. You have to make this math work with owners who deliberately keep their units vacant, or it doesn't even work as an idea.
I’m not arguing they’re keeping it vacant, that’s someone else in the thread.
I reject the notion that the units are not making money, and the notion that they are competing on price. We know corporate landlords engage in cartel behavior using price setting algorithms, and there is a deep well of tax-incentives for real estate (eg 1031s) that make it a more complex math problem than you are making it out to be.
How did Uber et al. offer services below cost until they'd driven out all competition? The property holdings are not these landlords' only source of income. Why would milk producers deliberately dump millions of gallons of milk (representing a commensurate amount of labor to both produce and then dispose of)? Because they've created an oversupply that threatens to destabilize the price.
I never understand why people think Uber is some kind of mic drop. I don't like Uber as a company, but Uber is vastly better than the system it replaced. It this a generational thing? Are the people casting Uber as archvillains just too young to remember not being able to get a cab at 9PM, or having their cabs kick them out halfway to their destination because they decided to go on a break?
"Uber" was not the mic drop; "[Company] can use 'losing money today on one venture' as a business tactic, in search of higher future profits, if it has another source of cash to cover its losses," was, at least in the sense that it directly answered your question as to how a business losing money on one front could continue to operate. The company doesn't matter; loss-leading is not rare or unknown.
I think it's largely revulsion that Uber ignored regulations, with the revulsion mostly coming from the types of people outraged by things like Newsom's recent CEQA reform.
They support these sorts of stifling rules and believe that skirting or changing those rules is a right-wing ultra-capitalist attack on the public good, despite the situation actually being the exact opposite.
I think it's less the ignored regulations (I'm also happy with the CEQA reforms), and more that they engaged in predatory pricing schemes to stifle competition. This has resulted in a duopoly that engages in politicking to lock in their position and suppress labor rights (e.g. Prop 22).
That does seem to be a right-wing capitalist attack on the public good? Like, do we still believe in markets, or are we just cool with mega-corporations setting prices and wages?
Rents - yes. Real estate - no. One huge sign of the housing market being out of control is the decoupling of renting from real estate prices. There's hardly a stronger indicator of it being irrelevant whether someone lives there or not.
I mean, I can't speak to housing problems in this thread, but your second sentence sounds like every post mortem and root cause analysis I've ever seen. Sometimes problems have root causes that must be addressed first.
This only works if all those houses are on the market. Nothing is stopping today's rich people from buying up all new housing, and only letting a handful be on the market so as to not flood the market and not let prices go down.
They do not have enough capital to do that. Housing is such as large market that eventually anyone but the state would run out of capital. And it is not actually even that profitable... There is much better investments.
You don't have to buy out the whole market. You buy the houses that are likely to turn over, and then you make sure that they don't until you want them to. Housing and rent is set at the margins. If the average price in your area over the last year for comparable housing was $300k, and the last three comps sold for $400k, your asking is $400k.
It's exactly the situation you'd expect with record high prices and low sales volume, which is where we're at.
I recall an article on HN quite a while ago about one of those property management companies/websites in the Bay Area. The article was detailing that, while the majority of people looking to rent out their properties were individuals and not the ultra wealthy, the app "encouraged" price-fixing, including things such as keeping a certain % of lots vacant on purpose in order to drive up prices artificially. I put encouraged in quotes because it turned out that a prerequisite of managing your properties through this application was actually complying with the price fixing, on an app-wide scale of all its users.
So despite it making no financial sense on an individual, house-by-house level, what happened in practice is that the market itself got strangled by this collusion and despite the existence of many empty houses available for either purchase or rent, you ended up with a non-negligible amount of these places not ending up in the market organically and as such driving up the costs for everyone. The property owners win big with this scheme of course, and the way things were setup you'd be a fool to go against the grain and try outcompete on cheaper housing, since you can't beat an entire market getting strangled.
So yes, "the rich" aren't that stupid, they just so happen to have systems that make these sort of moves profitable.
There are multiple lawsuits, and settlements are already in with some property managers. Yieldstar/RealPage are not the only culprits, either: https://imgur.com/a/EmJQryv
Not commenting on the ethical side of it, in many instances rentals are just a side income, the real value is in the increasing price of the house due to demand outpacing supply. See https://news.ycombinator.com/item?id=37855625 for past discussion on this.
Demand is out pacing supply because while the greatest and silent generation was happy to retire on stonks, pensions and bonds the boomers all went out and bought more and more homes and condos and whatnot for rental income.
It used to be that rental housing was either owner occupied, like a landlord living on one side of a duplex or it was a big commercial investment. The current trend of every idiot having their starter house from 20yr ago listed as an airBnB wasn't a thing back then.
So basically we "need" way more housing per capita now so that they can all have their stupid little side gigs.
When interest rates were rock-bottom a bigger chunk of new builds were purchased, but they're not anymore. Vacancy rates in cities, though, are very low, and if you constrain supply of rental units, rent prices go up. That impacts the poor demographic far more. People who rent entire houses are not typically poor, unless maybe you count places where houses are cheap like Mississipi.
The actual data does not agree with you at all. In places that have implemented zoning reform, housing gets cheaper. In areas where it's easier to build (red states), housing is cheaper. There is no reality at all where supply of housing jumps high but prices do also.
> Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.
Where investors are concerned, these are purchased to flip, or with the expectation that prices would rise. Given that we had inelastic supply but perpetually growing demand, that was a good bet. So, if you build way more, an investor wouldn't be so confident about that price increase. Now compound that with the risk of borrowing at higher interest rates to buy those properties.
Higher supply still means lower prices. Even if "the wealthy" buy it all and rent it, they are still competing with all the other wealthy who are doing the same thing and that will limit how much they can charge for rent, and will make it a less profitable investment than other things the wealthy could invest in.
Housing is not really a great investment. It's great for small investors because it's the only place where they can invest with leverage via a mortgage. If you have billions there's much better things you can invest in.
The wealthy are generally monetarily shrewd, and building homes makes home ownership a worse investment. If there is a deluge of homes being built, the wealthy will take their money elsewhere. Being a landlord typically has ~10% annual return. Compared to just sticking money in the stock market, it's actually been worse as of late.
The goal of the wealthy isn't to make people suffer, it's to maximize their ROI.
If there’s 1 million people and 2 million houses then the wealthy aren’t going to be. Using up to rent out as the return on investment will trend to zero.
If there’s 1 million people and 500k houses they will buy them up because everyone needs somewhere to live and will keep paying more and more to avoid the overcrowded slums that someone has to live in.
If general housing is abundant enough that it has very low ROI compared to other available investments, then no they won’t buy up housing. One pretty simple way to do this is to raise property taxes high enough that a vacant condo is a very bad investment. This is what it would mean to commoditize housing.
I think it’s a realistic goal for apartments/condos. Single family homes will always be constrained by land.
(Edit): I think you, and a lot of people who are anti-capitalist on housing, make the implicit assumption that all housing is a fixed good. There is only so much housing and our political goal is to allocate that fixed amount. In a lot of major US cities this is sort of true because we have regulated the construction of new housing to the point where even the government can’t build it. But the anti-regulation perspective is that if we get rid of the regulations preventing housing construction, then enough housing will be constructed that the allocation problem isn’t much of a problem. (Or something in between, ie it’s a lot easier to build/buy social housing to give away to people if housing is already made very abundant, and the fact that even governments like California have to spend truly ludicrous amounts of money just to get a few crappy studios built)
I have a soft spot for anyone with a background in Turbo Pascal from the 90s (my father built our family business on Turbo Pascal then Delphi through the 80s and 90s, so I grew up with it around the house).
I just wish you'd dial back the combative tone of your comments on HN. You've been engaging in a lot of political/ideological battle recently, and it would be good if you could remind yourself of the guidelines and make an effort to use HN in the intended spirit.
We're trying for curious conversation here. Different perspectives about economics are very welcome. Slurs and swipes are not.
"Trickle-down" economics is a direct subsidy for high-income earners meant to spur demand. That's the opposite of what increasing the housing supply does.
Totally wrong strawman missing the bigger point. It's still a vague, misguided utopian ideology focused on helping the rich supposedly "overproduce" while doing nothing for everyone else. That's trickle-down economics 101.
Well, you have the economics wrong, and our ability to handwave at each other about whose policy is "miguided" and "utopian" seems like a pretty boring conversation. Regardless: it's obviously not "trickle-down economics". Trickle-down economics are policies that deliberately and directly subsidize the wealthy in the hopes of spurring demand.
Supply and demand is not an ideology, it’s the most fundamental way that pricing works in a capitalist society. Has been studied for centuries. To think that supply and demand would not apply to housing and instead be trickle down economics is a hell of a statement.
The Supply and Demand model makes some assumptions that are not always true (perfect competition, for example).
The model isn’t an ideology, it is just a model. But there are a lot of ideological beliefs around this stuff. Some people seem to think that all markets have perfect competition, or that the resulting efficient pricing is inherently always good.
Housing seems pretty far from perfect competition to me.
How about for fun, instead of rhetorical devices and snarky projection, just look at the facts. The data on effects of zoning reform in places like Minneapolis and others, about where housing is cheaper wherever it's easier to build, about rent dropping ( https://denverite.com/2025/07/25/denver-rent-prices-drop-q2/) when you build way more units, etc.
I mean it was the Big Beautiful Bill that just added 3-5 trillion in debt and reduced taxes on the very wealthy. I don't think those impotent Dems had any sway in this.
Then you're too focused on political concerns. Neoliberalism doesn't recognize political parties, it recognizes money. As Gore Vidal would say, the Property party.
I think I was confused (speed) reading through it and hit the Democrats part and was just thinking to myself... They have extremely limited power right now, and aren't passing laws?
There are some wild political takes on the internet sometimes, and it can be hard to parse out exactly what the person is trying to say (especially if the reader failed their speed reading comprehension ;-) )
Pretty much any criticism of a current housing market can't happen without mentioning the quality of said housing. I have just come back from one of the apartments I was looking at to see an abysmally small shoebox with some sort of doors and windows installed in there. I live in a house with 9-foot ceilings and I feel like a king. But this is insane.
Recently I've visited a rental property to find shallow, not sound-proofed walls, askew doors made of something that looks like paper and not a single straight corner. And this is a 2023 build! It's brand new. And still looks awful.
That's right, and that's caused by restrictions on supply. Almost every problem we have with housing comes down to us restricting how much can be built so much that extremely low quality units are competitive. If you allowed 10 times as much construction, those units wouldn't be able to compete, because other builders would offer better units for the same price.
Apparel markets are much more free and competitive than housing markets, and have basically no restrictions on supply. Yet, the quality of available clothing across the world have fallen. And we get incredibly cheap incredibly low-quality garbage.
These things are much more complex than simplistic single-variable models.
I don't think clothing quality has fallen. Quite the opposite. We are able to buy high quality clothing at a very low price. More advanced materials, more consistent construction, better construction, greater selection, etc.
Much of what you can buy today did not even exist 30 years ago. For example, trail running shoes more or less did not exist. Perhaps you could have had a pair custom made, at a high price, with the worse materials available at the time, but today you can them "off the shelf".
Even the many shirts I've received for free are very high quality and have endured years of abuse.
> the quality of available clothing across the world have fallen
Do you have a source for this? Anecdotes along the lines of "they don't make 'em like they used to" are incredibly common but often fail to stand up to scrutiny.
Circumstantially, the dominance of fast fashion, produced quickly and sold cheaply, suggests that some aspect of production is more "efficient" than historically so. I've seen YouTube fashion experts explain exactly how (lower quality fabrics, simpler and less durable sewing, cuts that use less fabric than would be so in higher quality garments), and while I'm not experienced enough to corroborate, they were convincing.
I mean by that logic wouldn't the cheap house just cost even less? What about housing prevents it from being a race to the bottom like every other product?
Like yes a nice pair of boots costs more and you do get more value out of them compared to Amazon basics boots.. but far more people end up buying the cheap option because it's cheap and available.
When you say "like every other product" - if you're interested in me really answering your question seriously, give me an example product category. I usually use cell phones to demonstrate, but most major consumer products will do.
The restrictions, paradoxically, are what cause garbage! when the unit you build is in incredibly high demand, you do not have to build good quality, someone will pay you for it. If you are competing with other people building for the same rental market, you can't get away with that.
Depends on the restrictions.
Not being allowed to cast a shadow on the neighbor’s zucchini garden or having to pay off permit expediters has no impact on building quality, mandating wood vs cardboard does.
Fewer regulatory roadblocks like zoning would lead to more supply, which would lead to more competition, which would lead to better quality and cheaper rents.
At least in cities, it will probably just lead to more high-end housing that's bought up by people who don't even live there. The market doesn't work with so much income inequality.
High end housing takes pressure off of moderately high end housing, which takes pressure off mid end housing... all the way down the line. Housing supply simply takes pressure off the cost of living for everyone.
Well that's what they say, but it seems like there should already be enough competition for people to cause less garbage to be built, and it's not working, they just build it anyway.
My town has a bunch of half empty new buildings that are keeping their prices high instead of competing on price (they're also garbage construction, so they didn't compete on quality either). Apparently it makes more financial sense to the owner to keep empty units instead of competing because of the value of snagging a few tenants at higher rents or something.
I had to break a lease on an apartment recently. The apartment was built in 2023 or 2024, marketed as a luxury apartment. We had no hot water for a month because they used a couple centralized tankless water heaters, and we happened to be the furthest away from the heaters - if they turned it too hot, it was burning hot for the apartments closer to it.
Not only that, but the walls/floors were paper thin. We could hear the floor creak when our upstairs neighbors so much as shifted their weight.
Don't you love the feeling when your neighbor from upstairs seemingly plays bowling while horseback riding? (Especially when you found out that in reality he just dropped a penny on the floor that acts like a megaphone.)
Rest assured, the quality has gone up, just not in ways that you, or most anyone, cares about. You'll be satisfied knowing that every house in the country is built with outlets every 12 feet, with independent circuits for the for every few hundred watts of lighting, able to withstand Arizona heat, California earthquakes, Florida hurricanes, Louisiana humidity, Minnesota cold, and everything else you may or more likely may not care about.
Inflated building code is a great way to repress the rate of new construction, and if it's all in the name of safety or energy conservation, no one can stop it, even if it's entirely useless for your house. That leaves low quality materials as the only ones affordable for a starter house.
The last hurricane I survived, I had to spend time in my office building. It is made of concrete and real brick and mortar. There is no need whatsoever to “hurricane-proof it", save for the special shatterproof windows. Big, 4 by 6 shatterproof windows.
The shoebox I live in currently features the same shatterproof windows. 2x1 feet, small windows. I had to re-install all the light fixtures in the rented house because despite featuring white walls, it’s darker than a necromancer’s cave.
The former was built in the 70s. The latter - in 2023. The latter does boast an impressive array of anti-hurricane features. For example, it is bolted down to the foundation so it can't be torn by a wind gust. And the frame was re-inforced so it won't lean under the wind.
Shall I mention the fact that none of those features are necessary for a brick building?
To top it off, the AC has leaked in 2024, so I had to deal with that already. It was less than 1 year old at that moment.
My parents bought a house in the mid 80's, that another family member currently lives in. It still has the original air conditioner, which is a heat pump, so it's run for 40+ summers and 40+ winters with minimal repairs and effectively zero maintenance.
Exactly. Qualiflation. We have substituted the inflation with the inflation of quality. Yes, the AC in 80x used to cost $2k, and thank pete, in the current market it costs only $2.5k. But if you compare the quality, you will get the idea that that old AC is about $15k right now, cause it was so damn good and unbreakable.
In Australia most of the narrative on the housing affordability crisis is around lack of supply and nimbyism. In the meantime Melbourne has dropped to 4th most expensive city in the country and becoming more affordable. Most likely reason - land tax change in that state which is turning off accumulating multiple properties through investment and investors turning to other states where prices are still going up. So, while supply is relevant, I would say it is investor demand that is driving prices up.
It’s not a coincidence that many abundists see nothing wrong with rent-seeking. They’re incentivized by it. Rent-seeking has corrupted market forces. Mao 2.0 will arrive eventually.
This reverses causation. Investors are involved because prices are going up, not the other way around.
"Investors buying up housing" is a common explanation alongside "short term rentals taking over" but neither make up a large enough portion of the demand to explain prices.
In a feedback loop, every element in the loop is both a cause and an effect. The way to stop the feedback is to shift one or more relationships in the loop.
If you are lucky there can sometimes be arranged some convenient control elements- but in many difficult problems a lever that you can pull that only affects that one thing doesn't exist. You have choices of levers that affect a multitude of things, maybe many of which go counter to the desired independent effect
I don't know what's so hard to understand about the idea that prices are high because the people who have the most influence over the prices want the prices high.
This is a very online oriented debate. Derek Thompson might hear mostly from left coded anti-trust types on twitter, but I really don't think that's the main opponent to abundance.
If you spend time in the individual communities where this battle happens, the voice of the classic NIMBY (worried about property values and crime) drowns out the left-NIMBYs that worry about "greedy developers" and gentrification. At least that's been my experience in West LA. Many of the less-online left critics eventually come around to realize that upzoning type solutions and public housing type solutions aren't actually in conflict with each other even if they disagree on relative priority and impact.
Gary's Economics claims wealth inequality is at the root of housing unaffordability. Basically as wealth concentration grows, the ultra-rich bid up the assets. See the price of gold doubling in the past few years. Government stimulus is also captured by the richest. It's also a global phenomenon, i.e., every major city is now unaffordable for most people.
There's some truth in that, and I support the idea of shifting the tax burden from work to wealth. But I also think this is too simplistic. Remember that Gary was a financial trader, so he has a zero sum game perspective.
The UK had a decades long phase where they built a ton of affordable housing (council housing). This program was largely dismantled under Thatcher. Also over time, building regulations became more restrictive in the wrong ways, which makes supply more expensive.
Regulation plays a large role. But the right keyword is "reform". The right outcomes don't just happen magically if you deregulate.
There are places where housing got drastically increased in recent years, like in Paris under Hidalgo (7000 units/year).
This! Since our money is being inflated away, hard assets like precious metals, bitcoin, and real estate get bid up because those with cash bleed out purchasing power.
Where I live, housing cost is directly proportional to school district quality - and local school funding (vs. state-level funding) is a significant cause of inequality.
Rapid growth of cheaper housing in a town is a financial challenge for the town because it creates a larger student base without creating a meaningfully larger tax base. In towns with a commercial tax base, the costs increase more than the tax base; in towns without a commercial tax base, taxes typically increase on the oldest / most established residents - which drives fixed-income people from the homes and towns they supported for decades.
In my suburban area, there are two main arguments to anti-growth zoning: (1) people don't want the density increase; they built lives in a less-dense area by choice and want to see that choice preserved. (2) There are legitimate school funding issues and tax base issues that encourage controlling the rate of growth.
I'm dubious of _any_ argument that finds a singular cause for housing prices. It's an extremely tangled and complex issue that touches on taxation, local control vs. state control, education, property rights, politics, a cyclical capital-intensive industry, immigration and labor supply, interest rates...
Personally, I vote for denser housing and more liberal residential zoning. But I also understand and respect the opinions of my neighbors who disagree. Looser zoning gives control of land-use to capital and takes that control away from the people who built and sustained the town for, sometimes, generations.
I know very little about economics so I can only parrot what I've heard from others but the consensus from everyone I've personally heard talk about Gary - not just Abundists - is that he's a crank when it comes to economics.
a quick google for 'garys economics critique' throws up a good few places to get started :) - I would summarise here, but I'm no expert and am just digging into this myself.
I had a quick search and there's a Reddit thread where the first comment is critical but they get corrected by replies. Then some right wing blogs that spend more time on ad hominem and remarks about "lefty" admirers than actually going into detail.
Did you find any intelligent criticism you can point out? I'm too lazy to trawl through endless stupidity to try and find a nugget of truth! :)
This doesn't make sense. Each wealthy family can only live in one house at a time. Yes, they might have multiple homes, but a billionaire having a luxury vacation home in Lake Tahoe or a penthouse in Manhattan are not the reason housing is unaffordable. The type of home a billionaire would buy would never be affordable anyway.
You assume they are buying homes to live in. I don't think that's a reasonable assumption. Maybe they buy real estate because it's a useful part of a portfolio. They can rent it or just sit on it and sell it later.
Renting it still increases the housing supply, someone can live there.
I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that? It’s a stupid and expensive place to park money. You have to pay taxes, possibly condo/co-op/HOA fees, pay someone to do maintenance and keep out squatters, pay transaction costs both buying and selling, it can’t be sold quickly.
Why would you do all that instead of just buying treasuries or some other liquid instrument that actually earns money?
There may be some of this from foreign investors that don’t have easy access to financial markets, but again, some Russian oligarch buying a $50M penthouse in Manhattan is not the reason an average 3 bed 2 bath suburban home is $700k. They are not remotely in the same market.
They definitely will. JP Morgan for example charges SOFR+1.85% for 10M+ accounts[0], which is better than the mortgage rate they offered me. Or depending on what you mean by wealthy, you might be able to afford having someone get you a better deal by trading on the markets (e.g. selling SPX box spreads) assuming you don't have the expertise to do that kind of thing yourself/aren't interested in doing your own wealth management.
Why would you borrow money and use it to buy a house and leave it vacant? Now you're paying interest on top of everything else. Do you think wealthy people just light money on fire for no reason?
If there are more buildings than people who want to live in them, then the owners have no leverage. They have to compete for renters. You make that happen by building more housing.
But once you own a house, it's in your interest financially to stop others from building them. Either as a bloc or as a massive corporate landlord, pressuring cities to "retain the historic character of a neighborhood".
> I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that?
In high-demand areas property value often increases in value over time. You can literally “buy and hold” property, keeping it empty, doing nothing with it and expecting to sell it for a profit at some point in the future. It’s relatively safe and the rate of return can be significantly greater than inflation.
This ignores property taxes and costs of doing business of course. But there are also situations where you might want a reported tax loss on a profitable asset.
And zoning restrictions are part of the reason why housing prices "always go up." Constrained supply is exactly and precisely what makes housing a profitable investment.
One of many reasons. Supply is also constrained because people are buying it as an investment. It’s a feedback loop.
If I were extremely rich and had a lot of properties to rent in California, I’d look at relaxed zoning laws as an opportunity to buy even more properties.
Bill Gates owns 275,000 acres in the USA. I doubt he's even gazed upon half of it. The billionaires aren't buying homes to live in like us proles, they're buying lots of finite land and water rights and such.
That is about .01% of the US land area, and I’m guessing it’s not downtown in major cities or other places that people want to live. It’s probably mostly undeveloped wilderness for conservation, right? That has zero effect on home prices.
There is no shortage of land in the US. There are huge, huge empty spaces. There is only a shortage of housing in places where people want to live because local governments won’t let anyone build new housing.
Edit: Looked this up, and Bill Gates owns farmland, which is producing food, so this also wouldn't be available for people to live on anyway.
The housing crisis is a cultural problem. We don't want to build density, and we don't want to build transportation, because this all lowers housing values, and besides the millions of homeowners you'll piss off, you'll destabilize an economy primarily built on the mortgage. Not a good reelection plan.
The places you're seeing growth are places where we could buy the land for cheap: suburbs and exurbs. We build huge ass subdivisions and then we run highways to them. This fucks no one's housing value, it bails out struggling/dying land owners, the auto industry loves it, the energy industry loves it, people love their faux-castles with lawn moats, it's a full employment plan to developers, and it's essentially all middle/upper-middle class housing so it's thoroughly unobjectionable to the voting majority.
The reason cities in Texas are out building blue cities is that they just do the suburb/exurb thing. Blue cities don't: where are the workable SF or NYC exurbs? Abundance gets so close, it more or less blames bureaucrats and the Jane Jacobs veto points built into the liberal building process. But these things arise out of the culture on the left, and whether we admit it or not, we like the walled gardens we built. We like our multi-million dollar castles we've got something like $80k in. We like people not driving/riding trams/buses through our neighborhoods, and we vote accordingly.
I personally think this is intractable. I think SF/NYC/etc have reached the ceiling and if we're gonna fix the housing crisis we need to build density elsewhere. I think we should lean heavily into remote work, lighten the infra grid costs with off-grid tech like solar, lighten the construction costs with low-car built environments (few if any parking requirements, rail instead of huge highways for shipping/transit, etc), invest heavily in the schools, and subsidize people moving to these areas--like with cash, not tax rebates. This is essentially "build the exurbs", but the progressive version of it that better meets health and climate goals, while also building communities we know are better for human flourishing (less isolation, more eyes on the street, etc). Focusing on permitting reform or democratic veto points is way, way too small a vision here.
SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water.
New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs.
The US simply needs to build new cities, and link them with high-speed rail. You do that by taking federal spending (military bases, universities and research labs, tax cuts for large industries) and directing it to places that would fit according to a high-speed-rail master plan. Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions, but the lack of a larger master plan in helping link these regions with better transportation links and job creation has prevented them from reaching their full potential.
>Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions,
Not really. All of downtown Portland, OR has been designated an Opportunity Zone[0]. "the Ritz Carlton Hotel that’s going up in downtown Portland was partly funded with these tax breaks."
> SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water.
> New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs.
All kinds of places overcome these things. Pittsburgh, Hong Kong, etc. etc. Bridges and tunnels. NYC was doing this, but mysteriously stopped. SF and NYC don't even come close to densities in many Asian cities. You can think two things about this: we reject that kind of density, or we reject moving a city's center of commerce to a more geographically scalable area. For some reason, we put a low ceiling on density and refused to move where the jobs were, and I'm saying that reason was liberals culturally resisting it. We simply liked the status quo.
> The US simply needs to build new cities...
Extreme, full agree. Even if I disagree w/ you as to the causes of building woes in blue cities, I think we agree it's not worth it to fix. Let's try some new things.
> You do that by taking federal spending (military bases, universities and research labs, tax cuts for large industries)
Something that's different now than the last time we did this is that those large industries aren't gonna be (well, at least shouldn't be) places like auto plants or steel mills. I think the "large industries" part of your prescription should be some level of new tech.
Yes, but it requires political will. America is rather characteristic (I want to say unique, but that's probably false) in its lack of political will to increase density anywhere that isn't already dense. Like I said, you're not going to suddenly see 50 story towers blanket San Francisco. This is why, as cities develop suburban and exurban sprawl to the point where the distances no longer become feasible to commute in an automobile, we need to develop new cities, with a strategy for reducing commute time between them (i.e. high speed rail).
> some level of new tech
I mean... it's not going to be datacenters, seeing as how they require a minimum of people and lots of power generation. So unless you have a suggestion, I would go with tried-and-proven approaches, yeah? A master plan for high-speed rail, with the budget to boot, is already a big spend of the innovation budget, the rest should be boring choices, right?
Nah I think we need to go big. This will require a big investment and we won't recoup it unless a big part of it is redoubling our high-end manufacturing and agriculture. This is stuff like robotics, sensors/chips/solar panels/batteries, biopharmaceuticals, modular housing, sustainable farming and textiles, etc.
As an aside, puts on Jane Jacobs defender hat I just want to point out that Jane Jacobs was on the record with the assertion that an ideal urban fabric was effectively small apartment buildings at densities well beyond what your typical North American city and suburb currently has.
It's deeply sad that Boomers took her ideas and distorted her message to preserve an ultra low density single family detached housing status quo.
Hey I think she was basically right (I think her ideas on local control are applicable way beyond building neighborhoods). But we have to admit the ability to get up at some board meeting and veto stuff was her idea. It wasn't perverted by people who came after. Jacob's herself used these veto points in her time in Toronto. I'm not saying she was wrong to oppose the stuff she opposed, but the ability to obstruct in this way was her idea.
It's a challenging thing to come down on in a clear cut simple way because there were a lot of things that that generation did fight against with grass roots neighbourhood democratic protest that are agreeable, such as fighting against razing neighbourhoods for freeway expansion.
The problem is that along the way somehow local citizens having a voice in how their city changes became a veto over development, and that veto became one dominated by those that had the most time to participate and dominate discussion, which were older, established wealthy, landowning residents. We didn't and still haven't developed systems for genuine real equitable participatory city making though I would like to think in recent years we are slowly making progress.
Oh I think it's getting way better. It's wild how fast this is all happening. People are alive today who remember when there were no highways and no commercial air travel. We're in extreme early days and iterating fast; I'm optimistic here actually.
this is sort of wrong though, there is a measurable increase in positive economic activity with increased density. you can increase housing in an area in a way that doesn’t mess with people’s existing home evaluations, at least in urban enough areas
That's interesting, are there comparable examples? Like, I'm sure China could do this by telling everyone what home values will be for the next 3 years while they build literally millions of housing units, but I'm skeptical we could double the density of SF without cratering its housing values or significantly changing its boundaries.
This makes sense, but as far as I can tell it doesn't really answer the question of whether the housing crisis is driven by "monopolies and the corruption of big business". It just rebuts a particular article's claims about whether the housing market is driven by monopolies in the homebuilding industry. But I would say the issue is larger than that. Monopolies and corruption in general have led to great wealth inequality and that is at least exacerbating (if not driving) a housing crisis in many places.
Monopolistic activity and corporate consolidation are driving up prices in many industries in the United States. Why wouldn't corporate consolidation be a major factor in driving up housing prices, like it is in so many other sectors? I am suspicious of journalists like Derek Thompson and Ezra Klein because their solutions seem to punch down on municipal governments and homeowners instead of punching up at our nation's corporate masters and elite class, who would be much more threatened by effective antitrust action against homebuilders than they would by a movement to deregulate zoning in cities. I am open to the idea that excessively restrictive zoning could be a part of the problem, maybe even a big part. But I am skeptical of anyone who wants to act like excessive regulation is the sole driver of skyrocketing housing prices. It doesn't hold water to me.
This opinion sets up corporate consolidation as the cause of all issue in the US. I don't think it makes sense for that to be the null hypothesis that needs to be disproven.
For this specific issue, homebuilding, and construction in general, are very regional businesses. There just aren't a few giant homebuilders controlling the industry across the nation.
There are certainly some antitrust issues with rentals, but they don't seem to be nearly as widespread as the housing issue in general.
I don't think the punching down vs up lense is a particularly effective way to analyz this issue. Nor do I think its easy to figure out who's "down" and who's "up".
Housing crisis is just a result of increasing income inequality and the resulting real estate investment craze. The population of America (real demand) did not suddenly double at any state/city.
Rich have become so much richer that can afford bidding wars at unattainable prices. They can buy investment homes and be cashflow negative for decades in anticipation of the increased market bidding prices. Of course they oppose any sort of legislation that would increase competition.
The population of a place doesn't have to double, or even change at all, for prices to go up. All that is necessary is for more people to want to live in a place. Those with the $ to satisfy that desire will outbid those who don't and you can easily double/triple/10x prices with no change in population.
Your factual statements are wrong. The US population isn't flat over time, and housing (supply) decays over time. Prices aren't up everywhere, just the places people actually want to live.
Your figure doesn't contradict my claim. We have spare housing capacity in undesirable places people don't want to live (rural towns, small midwest cities). We have shortages in the (especially coastal) cities, where the jobs are. This is obvious from prices, which are set by supply and demand.
This seems like it contributes to the problem, but doesn't feel like the root cause at all. Every homeowner, not just the ultra wealthy, has an incentive to oppose new housing. (Though in many metros any homeowner is automatically wealthy by some definition). The lack of supply seems like the core issue here.
If it is just internal money the bubble will burst. If you have the entire world pouring cash to bid on us real estate it can really go to almost infinity
The main reasons that international cash comes in is either speculation or offshoring money.
If the housing supply actually matched demand, the housing market becomes unattractive for speculation.
If foreigners are buying houses just to park their money, building more housing to meet the demand helps to alleviate that. This situation feels like a case where regulations designed to prevent housing supply from sitting empty can make sense but I have no evidence or story on how would need to be implemented to achieve that goal without negative unintended consequences.
A lot of the time it's not rich people bidding over a home, it's people in a game of chicken to see who will put themselves in the worse financial position.
Too often people hear that some lions escaped from the zoo, and then hear that shoplifting went up, and decide that the lions must be robbing convenience stores.
Sometimes a problem and a cause don't snap together so obviously. I'm no fan of private equity but I've tried to inject some perspective into discussions on HN where people automatically assume that "private equity has operated in a space" and "there are problems in the space" form a complete mathematical equation and we don't need to look beyond them for any other factors.
It's always pretty suspect when you first hear about the opposition to something in its rebuttal. I've heard lots of critiques of the abundance movement and this is my first time hearing anything about housing cartels. Maybe someone had this critique but it isn't the dominant strain of criticism of the abundance people. It feels like Thompson picked the weakest argument to debunk rather than one of the many stronger ones.
Fish Tank Thinking is where your thinking is so constrained by some artificial walls that you cannot actually ... well actually think. It is the wages stupid. Let me repeat that. It is the wages stupid. What happens when a society is so brain washed that it cannot even consider that if you don't pay people they can't afford housing. Or cars. Or medical care. Or food.
If you actually have some desire to consider the problem rather than discuss how many angels can dance on a pin head, start with considering why "Inflation" is not a measure of anything thing, but rather the sound of one hand clapping. What is the other hand? Wages.
In this country rather than fixing wages we are discussing solutions that make things worse. Let us add tariffs so that people can buy less. Let's create tax incentives that create more housing people cannot afford, with the tax incentives coming out of the pockets of the people who cannot afford that housing.
While I 100% agree that there are wage issues, the question with housing is why it's growing faster than general inflation.
House prices seem to be increasing fastest in places with high incomes. This leads me to believe increasing incomes wouldn't solve this particular problem.
You seem to be guilty of Fish Tank Thinking here yourself.
Housing costs are not divorced from the laws of supply and demand. Raising wages creates increased demand for housing, but you still need the supply! Raising wages without increasing housing supply will just make housing more expensive.
If wages go up, housing will assuredly go up as people outbid each other. Wage stagnation is a problem, but it's not the solution to the housing crisis. People would still be unable to afford homes as they get outbid by people who have slightly more than them.
Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong. I appreciate the attention he brings to the topic and his diligence in digging up stories but his own analysis is often just totally wrong. I don’t think he’s worth taking seriously as an analyst. Maybe as a reporter at best.
A contributing factor to housing costs I don't often see mentioned is urbanization. In the 21st century, population density has increased faster in major cities than rural areas.
The picture is probably more nuanced in the last half decade (post COVID), with many people moving to the countryside.
Another factor is smaller households. People are staying single longer and waiting longer to move in with partners, creating more demand for housing even without population growth.
> So, Dallas doesn’t meet Quintero’s oligopoly threshold. Now let’s consider the rest of the country. I tracked down a complete listing of the country’s 50 largest homebuilding markets, from #1 Dallas to #50 Cincinnati. How many meet Quintero’s first oligopoly threshold (two companies = 90 percent of the market)? Zero out of 50. And how many meet his second threshold (six companies = 90 percent of the market)? One: Cincinnati. It turns out that the largest homebuilding markets just aren’t that concentrated
> I wanted to know how a careful monopoly-hunter like Roberts would answer the question: If six firms account for 90 percent of a local industry, is that automatic proof of a monopoly? “No, it’s not,” Roberts said. “The statistic isn’t totally vacuous, but there’s basically no useful information about market power in that statistic alone.”
---
> the number of new single-family houses permitted per capita in the Dallas metro area rose steadily between 2010 and 2022. (This is illustrated in the graph below[1].) I mentioned to Quintero that steadily rising construction per capita in a fast-growing city seemed like a weird example of monopolistic abuse.
> First, he uses 2006 as his baseline. This was a highly atypical year in housing. Just before the housing crash that triggered the Great Recession, May 2006 was the peak of 21st century construction employment. That very month was construction's single highest share of total employment since the postwar era. Using a bubble year as a baseline could easily throw off the overall findings of any economic analysis.
[1] graph clearly shows long term downward trend, with growth from 2010 to 2022 being entirely recovery post 2008 crash and still being below late 90s levels.
---
> The whole thing looks like a lawyer who arrived in Dallas with a conviction in hand and shaped the evidence to fit the indictment.
*spends entire article cherry picking evidence in an attempt to discredit one article specifically to advance a competing narrative.
As someone whose built houses as a contractor and subcontractor for 20+ years, I’d say these article has it mostly right, but misses two major factors in increased costs.
And that is permitting time/costs and the costs of complying with ever more stringent codes.
If we could build homes to the codes of 1990 and the permitting process was the same as it was in 1990, you’d immediately knock 20-30% off of the cost of construction.
What leftists and bureaucrats (and most people in general) never understand is the time value of money. Every extra day added to the construction of a $500K project is a few hundred dollars of interest costs, risk costs, and lost opportunity costs. Those numbers add up quickly. And nowadays, projects take much longer from idea to completion than they used to.
You are agreeing with abundance theory here 100%. The author of the article is one of the Abundance folks. The issues with code and permitting and environmental review take up a substantial portion of the book.
Am I wrong, or is this kind of a silly date range considering the housing crash was in the middle?
> According to the National Association of Home Builders, profit margins as a share of overall home-sale prices actually declined slightly between 2002 and 2024.
Over reglementation and over regulation is also destroying housing markets in Europe. In some European cities new homes are scarce and prices are skyrocketing. While politicians claim they are protecting the people and the environment.
This article appears to be focused mostly on the line of argument that there is some cabal of builders that keep housing prices high. This also mostly seems to use Dallas as a case study, which is weird, b/c you can't test a lot of other argument about the effects of building/permitting requirements.
It should probably instead be titled something like "This one anti-abundance critique on housing is wrong"
Where I live the city has gained 90,000 people in the past 5 years. It’s about 68 new residents a day or about 30 families.
They have been building houses as fast as possible here. When single family houses weren’t springing up fast enough then came the explosion of giant apartment complexes.
I am not discounting the actual economic causes mentioned in the article, but securing financing appears to be a major factor that slows things down.
> The Builder’s Daily sounds like an anti-monopoly shop. But in our conversation, McManus sounded like a straight-up YIMBY.
This is a false dichotomy. His opponents are clearly claiming that oligopolies restrict supply. Therefore they are intending to be YIMBY even if they might be wrong about the cause of the restriction.
So this is a weird rhetorical attack that undermines the claims in the rest of the piece.
And now I think about it, it applies to the title too.
I find the term “anti-abundance left” odd. He wrote a book called “Abundance” laying out the case for deregulating zoning laws. Claiming global monopolies in aggregate seems more like a conspiracy theory. I thought the mainstream (left) opposition to deregulation was to subsidize affordable housing regardless of the cause.
Restating something I said upthread, but I think the right way to think about Thompson's rhetorical adversary here is "people on the political left who believe that antitrust is the high-order bit on housing affordability and that zoning reform shouldn't occur until after antitrust issues are addressed". He's arguing with people who are pushing back on legalizing housing density. He is not arguing broadly against the political left; in a reasonable US macro view of politics, he is part of that political left; there are people much further to his left that are nonetheless in lock step with him on housing, all of whom I believe he'd be thrilled to endorse.
Paraphrasing: along with a dozen other pressing issues, anti-trust was out of scope for this book.
> He is not arguing broadly against the political left...
Yes and: NIMBY vs YIMBY is (mostly) olds vs youngs, rather than partisanship. Witness the coalition behind the Montana Miracle (recent pro-housing legislation).
So far. As you know, most positions eventually get coded as left or right, as needed, to defend the corptacracy.
There really is an internal struggle in the Democratic party (totally natural after a major election loss!) and people are just inclined to read everything as taking one side or the other in it. Ironically, Klein and Thompson really tried to go out of their way not to take either side; in fact, most of the oxen that get gored in the book are establishment Democrats!
Quote: "I don’t see the value in discussing a “national” crisis in homebuilding oligopoly from which the 49 biggest metros are exempt."
I enjoyed most of this article, but it did slide into opinions periodically. This quote in particular stood out given the issues rural communities face regarding availability of competition in a lot of other services.
> … profit margins as a share of overall home-sale prices actually declined slightly
So the profit in real terms more than doubled? At a constant percentage home building and gas pumping both become more profitable when unit prices increase faster than inflation.
While we’re debunking that can we debunk the weird leftist conspiracy theories around index fund companies like Blackrock “buying up all the residential homes.”
Yes, the largest index fund company that sells investment products that allow people to invest in indexes (entire markets) is going to defacto be a custodian on holdings across the entire economy, including homes. Operating the funds offered in your 401k doesn’t mean they own the companies that invest in residential real estate. It means you actually do.
If you have a 401k it’s actually you who is in this “secret evil cabal.”
I won't defend Fink's role in pushing the whole 2010s ESG mania, but they were ultimately toothless in that too, because they are a glorified custodian of funds...nothing more.
i hope the next part of his article covers the zoning issues. because I'm certainly not seeing the zoning issues making the homes be on bigger lots or requiring things like 3 car garages? If anything the lots in new tract developments in dallas fort worth are smaller and have less land using features like they don't have alleys. and then in Dallas city limits any small slice of land that can possibly be used for new houses have way smaller lots than any neighboring decades old homes.
the only instance I can think of that I know of is there as a historical black neighborhood near love field airport where Dallas changed the zoning to make redevelopment less profitable by requiring the houses take up less of the lot. This way developers can't build huge houses to offset the fact that the land is expensive or they can't build duplexes big enough to make them worth selling either. In fact there were a few duplexes going in to replace detached SFH and the developers were left in the lurch. I think even had to tear them down? I never followed up on the story. This was basically a policy to prevent gentrification by making the land less valuable by policy. Unfortunately gentrification and yimbyism seem like they go hand in hand because if you can develop bigger or more dense the property value goes up and people scream.
Where I can see regulation getting in the way is in the new codes. You can't build a house like you could in the 50s-70s anymore The code today is insanely expensive. Now those 70s houses weren't great. But they aren't didn't cost $200-300+/sqft at the low end.
in my view new single family housing can never be affordable because the cost is just so high. in fact. generic home ownership is as unaffordable as ever due to inflation. call a plumber to fix a leaky faucet? That will be $300. A new fence? $10k. A new HVAC system? $20k. A roof? $12k. These are all real costs for "small" homes. At least in the rental scenario the costs are controlled because not every single thing is a one-off. There are efficiencies at scale. If it's a housing rental company your maintenance guy is on a route, if it's an apartment you have building maintenance, etc.. The roof repair is a contract worth a million bucks where every roof is only $8000 instead of $12000.
It's absolutely a zoning issue. The Texas legislature is literally overriding large cities to force them to allow smaller lot sizes. Most of Dallas, for example, is R-7.5, which drives up cost because land is expensive and it requires you to dedicate a lot of it to your yard (max 45% coverage). Only a few areas, like some PDs in old east Dallas, have been rezoned to allow the smaller lots, though you seem to believe its all of Dallas city limits.
He just did a podcast episode about envelope restrictions and how they're pushing the market for housing out of the sun belt. The subtext of all this stuff is ultimately zoning.
Increasingly, we're seeing home services companies like plumbing and HVAC owned by private equity. This is how you end up paying $300 an hour for the plumber (plus a $300 service fee just for showing up). The technician isn't getting the majority of that money.
Good rule of thumb is that if you see a home services company with billboards, or branded vehicles, they are going to be super expensive.
I feel lucky in the sense that I have both the physical ability and the skill to do almost all of my own maintenance myself. With what I saved on landscaping alone I was able to buy all the tools I needed for almost any project.
Long permitting processes also encourage construction of larger SFHs. The permitting cost is largely fixed whereas three profit margins scale with the value of the home which mostly scales with the size of the home
yes bigger houses to an extent are way more profitable because there is a somewhat linear relationship between sqft and value but houses have a lot of fixed cost. there's probably a sweet spot around 2500sqft in suburban/exurban Dallas Fort Worth to maximize the market for the house and still generate low $/sqft such that the guy building something bigger next tract over isn't crushing you on $/sqft.
that 2500sqft house is still $200-250/sqft way out in the middle of nowhere where the land doesn't really even factor in much.
All this is why I believe our best bet is allowing density. Even if one doesn't want to live in a busy city center, making this an option for those who want it, reduces demand and thus prices for people who want SFHs
> The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.
ctrl-F "RealPage" - nothing. hmm.
ctrl-F "rent" - also nothing. really?
from about a year ago: Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Renters [0]
> The Justice Department, together with the Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, filed a civil antitrust lawsuit today against RealPage Inc. for its unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.
> ...
> Another landlord commented about RealPage’s product, “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing…”
if I hear about antitrust in the context of housing policy, RealPage making it easier for apartment buildings to collude on rent prices is the very first thing that leaps to mind.
it seems like Thompson is being awfully selective about which antitrust-related criticisms he's responding to here. he seems to be focusing exclusively on building single-family homes, and completely ignoring the concrete example of monopoly power being used for apartment rentals, and antitrust laws being used to address that.
'One of the most detailed articles in this space is an analysis of the Dallas, Texas, housing market by the lawyer and writer Basel Musharbash. In “Messing With Texas: How Big Homebuilders and Private Equity Made American Cities Unaffordable”'
Musharbash doesn't mention RealPage either, so go blame him, since he doesn't think RealPage contributes to Dallas's problems.
yes, he's responding to [0] which was written by Musharbash and published in Matt Stoller's newsletter.
and as I said, he's being selective about what criticism he's responding to and what he's ignoring. because Stoller has also published, in the same newsletter, articles about RealPage price fixing [1, 2].
Thompson says:
> The antitrust left, however, claims...
if he's going to say "here's what the antitrust left believes" and then proceed to debunk it, I think it's reasonable to point out that his response is cherry-picking only part of what that "antitrust left" believes.
of course, if he wants to publish a follow-up article defending RealPage, I'd love to read it.
It's not on him to rebut every single argument Stoller has ever made. Several arguments Stoller made were refuted by the authorities Stoller himself cited, which is both interesting to read and also telling.
Stoller is free to find similarly decisive refutations of arguments Thompson had made (they're unlikely to be forthcoming).
I think for this to be interesting to an outside observer, it should at least address the bulk of the debate around the topic. If the GP is right and it's missing the key points of the anti-abudance critique, then I'm afraid it's missing the forest for the trees and misleading to a general audience.
I feel like not a lot of celebrity gossip consists of calls with economics professors who wrote cited papers discussing those citations, but we might just read different rags.
Notably, he never included the full conversation. It's almost like the question asked to the economic professors and their responses are completely different from the way the questions are presented in the article. Claims and questions the target article never mentions or implies.
I think there's like, I don't know, a few fallacies named for such practices.
Also just some general life advice, if reading Thompson's article didn't didn't set off any red flags for you (regardless of what you did or did not know going into this conversation) I would employ a little bit more skepticism and spend a little more time reading the source material in the future.
Disagree with him if you want but calling Thompson a grifter makes it hard for me to take anything Musharbash seriously or want to dive deeper into whatever he's written.
> It's not on him to rebut every single argument Stoller has ever made.
yeah, I never said it was.
Thompson himself says:
> Still, I wanted to spend more time engaging with the arguments of the antitrust housing folks.
he says he wanted to engage with the arguments made by the antitrust left.
which means he chose which of those arguments he was going to engage with.
and he chose to make this a 2-part post about why he thinks the antitrust left is wrong about homebuilding monopolies:
> Thanks for reading. Come back tomorrow for Part 2 of my analysis, where I’ll explain what really happened in Dallas and why I think unaffordability became a national phenomenon if the cause isn’t oligopolies.
now, if there's a part 3 where he talks about RealPage and antitrust as it applies to rentals rather than single-family homebuilding, I'll gladly eat crow.
but until that happens, I'm going to call Thompson intellectually dishonest, because there's a cute little sleight-of-hand trick he's doing here. his opening paragraph:
> The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.
he's saying some of the best criticisms of his book come from the antitrust left.
and that he's evaluated some of the arguments made by the antitrust left and thinks they're wrong.
if you miss the sleight-of-hand, you might come away thinking that he's responding to the best arguments made about housing by the antitrust left.
but he's pretty clearly not doing that. because the "antitrust left" argument against RealPage doing algorithmic rent-fixing (detailed in a 115-page federal lawsuit [0]) is much stronger than the "antitrust left" argument about homebuilding monopolies in Dallas (detailed in a Substack post by some guy)
Collusion among landlords can only work in a housing shortage. With an abundance of rental units, individual landlords would "defect" (in a game theory sense) and lower rents in order to fill their vacant units at the market price.
Don't we have a housing shortage? Also, many (institutional?) landlords are happy to leave units vacant and/or evict tenants spuriously for higher profits.
I wish everyone who cares about the price of housing could go to a hearing like this one. Sadly, they happen in every community so if you're curious, you ought to go:
Now, Real page probably jacks up prices a bit. A bit multiplied by a lot of renters means real harm and it was probably worth taking them to court over.
However, at the end of the day, RealPage is simply not enough to get Los Angeles rents out of Houston property. Supply and demand are still where it's at.
You're claiming that your idea of 'X' is true, and for evidence of this, you're linking to a site that was created by people whose mission is to advocate for the idea of X.
Am I likely to be getting an impartial view of the situation from a source which solely exists to push X-related messaging?
Is such a group/site really going to give a fair shake to other theories Y and Z, or to conflicting data?
I care about fixing the housing shortage in the city I live in. I spend hundreds of hours as a volunteer, see a lot and read a lot. I'm pointing out what I see on the ground doing the work. And what I see is NIMBYs, not institutional investors or RealPage or 'foreigners' or whatever else the bogeyman du jour is.
If I were convinced the problem lay elsewhere, I would focus on that, because I don't have anything invested in the problem being a specific thing.
Why do people think they have a right to live wherever they want? The people Bend are happy with Bend as it is. If you can't afford to live there, move.
Why do people that happen to live somewhere believe they have a right to prevent others from living there? If you don't like who's moving to Bend, move somewhere else.
Can you cite some evidence of a place where RealPage's supposed power has led to a consumer harm like higher rents? I may be biased because my research has been cited by RealPage in their suit against the city of Berkeley, but to me RealPage just finds the market clearing price, and that's not particularly evil in my book.
The first two go hand in hand, and could elegantly be solved together:
1 & 2. Pervasively (and perversely), "property taxes" greatly undertax negative externalities, and then heavily (punitively) tax positive externalities.
1. The undertax is that only a fraction of property taxes are just for the land. Land is a limited resource, and "ownership" of land is exclusionary. Exclusion is a negative externality, which is ok as long as that is economically accounted for.
So taxing land more, would encourage more efficient and effective use of it.
2. Property on land is the positive externality. We all benefit when land enables higher active value. More housing, office space, etc.
But it requires investment to improve the usefulness of land, and we not only tax that, but tax it annually, an annual wealth tax!
This is highly perverse, in that it undermines the economics of increasing the productivity of land. Whether a land owner is rich or poor, the economics of putting work or capital into improving one's property come at the cost of being taxed on that improvement - every year - forever.
The solution is to only tax land, not property on it, so land is incentivized to be used efficiently, and investments that improve its active usefulness, are not economically disincentivized.
Making that change and renormalizing "property taxes", not just land taxes, for neutral public revenue, solves both problems with one stone.
A decade or so transition, would allow this change to happen, while giving land and property owners who have made investments under today's regime, time to adapt.
But the end result would be better for everyone.
More efficient, parsimonious, effective use of land. More investments and innovation in increasing property's useful for everyone.
Unlocked growth in real estate returns, as a market primarily based on improving net usefulness, with higher returns, than passive ownership. The latter providing no net benefit to society or the net real estate market.
Credit for the above analysis: Economist Henry George [0]
The third problem significantly compounds the problems of the first two, but would go away naturally if they were solved:
3. Markets take advantage of anything, even inefficiencies.
Given that land is a limited resource, that the value of land increases as investments are made in adjacent properties, even without investments in one's own land, buying up land (with whatever property is on it), and letting others invest in neighboring land is a very good way to get a reliable return on capital. Because demand for land is always going to up, even when used inefficiently, with the current tax regime.
This is an economically parasitical way to make money. It treats land like Bitcoin or gold, in prioritizing its use for passive returns, instead of investment in increasing its active value.
And "parking" of money, for its passive returns, is so reliable, that the financial instrument demand for land drives up prices. Not just by a percentage, but in a self-sustaining and compounding circle of ever rising prices. For an investment "use" that has no net benefit to society.
Resolving problems 1 and 2 would greatly reduce the passive return on land. Which would not only make land use more efficient, but eliminate the compounding pricing problems of near universal use of land as a passive parking place for wealth.
Abundance liberalism still seems like a poor attempt to curb the populist left to me.
Let's look at it from a high-level. "Fixing" the housing criris would require a major depreciation of housing assets. Does anyone believe the companies and individuals holding onto multiple homes will accept this without fighting? Of course not. The same people that are arguably responsible (directly or indirectly) for the housing crisis have a vested interest in it persisting. And we know how powerful their voices are with the establishment democrats, the ones this ad-hoc "abundance" movement defends.
There is no simple solution to this crisis, it will require something more radical than just tweaking some numbers on a spreadsheet.
I have the same view on it as you. The "abundance" people are carrying water for the establishment while trying to co-opt disaffected voters (who might otherwise find their way to the populist left) into a way of seeing things that won't meaningfully alter the status quo. Any solution to the real problems our nation is facing will require a shift of who holds power. The "abundance" folks are doing anything to distract people from the fact that this is all about power.
Correlation isn't causation - the post here says smaller homebuilders can't get financing right now, and so a supply shortage is correlated with larger actors who can, but it isn't caused by concentration directly. The question is if government can have remedies for broken markets other than breaking up companies, because here it sounds like "fixing builder financing" would help:
Most interesting proposal I heard on this topic, is that the solution to housing prices is to ban renting altogether.
It's so radical that it's almost impossible to predict if it would be better or worse. But at least it had the moral ground that rent is one of the last remnant of pre-capitalist lords and barons economies.
The idea being it would commoditize housing. Millions of units would now be for sale, prices would drop, tons of people would now be able to afford buying. Home builders would be incentivize to build nicer, cheaper, as the competition would move entirely to the selling/buying market.
It's radical for sure, but I've always found the thought experiment fascinating.
What would happen to those who can't afford to buy? Say student just turned 18? Continue to live at home and gather some money for down payment? Who would keep these assets and maintain them until next buyer comes around? What if there is no buyer and they make loss?
There is nothing inherently wrong with renting. The landlords provide capital that renter lacks for time being. But due to supply constraints prices have been driven too high.
Prices would drop where homes are commonly rented. I suppose rent could turn into lease to own in the interim period. It’s an interesting idea, I wonder if any economists have played it out.
What about those people that have homes but rent out a room? Or a townhouse that has 3 units, but the landlord lives in one?
I guess they could sell the units or move to a smaller place, but I think there may be an adverse effect of potential housing staying locked up because there isn’t a legal way to preserve options of ownership. It may decrease housing in some instances. Which force is more powerful though, I am not sure.
Unfortunately this is the type of magical thinking that gets passed off as serious policy analysis based on nothing but anti-capitalist dogma. There is no evidence to support these conclusions, and in fact plenty of evidence that it would worsen the housing crisis.
What I remember from the proposal of it, it was making a pro-capitalist argument.
Based on a quick AI chat it seems that: "Some argue this form of passive income generation through rent-seeking is actually parasitic on productive capitalism rather than being truly capitalistic itself, since it doesn't create new value or contribute to economic productivity"
I think this is what I remember from the article. They claim landlords are anti-capitalistic, and one of the last holdout of pre-capitalism in our economy. They argued banning this rent-seeking behavior was needed to turn the housing market into a capitalist one.
It wouldn't work. Good luck trying to enact that. Also, the amount of leftism in this thread is like a pure-sugar-diet for Marxists. When houses have no value, people don't value them. Look at what happens when you give large amounts of people free housing, what do they do with it?
I don't know about the left/right. But like I said, when I read this idea, it was presented as an argument that the housing market was not capitalist enough, and that was the issue. In order to properly make it capitalist, so it can act like our other markets, you need to ban rent-seeking and landlordism which are pre-capitalism models that date from the old days.
It would not allow for example the government to hand out "cheap to rent housing either".
That builders can't construct housing in whatever form-factor they want and whatever part of a municipality they want might be a problem. But the analysis of why these kinds of restrictions exist, to my mind, is not correct.
Do niche interest groups have influence on housing policy? Sure. But these niche interest groups don't usually have a monetary interest in the outcomes they're promoting. But individual homeowners (who often band into interest groups of their own) and large real estate conglomerates do have such a monetary interest. They consider certain types of housing built in a certain way to have *more value* and be worth more. So they promote politicians who introduce zoning and other rules to protect that value.
For someone looking to make a profit off of housing (or even to invest in housing), what is more appealing? A traditional U.S. suburb? Or a Kowloon walled city? One is denser, cheaper per capita, and (if you're not careful) unappealing to look at. In other words, it's worth less. So there is a great monetary pressure from people who already own homes to prevent "mixing" this type of housing into existing planned communities. People who need homes, on the other hand, are a little bit less discerning (to say the least). They don't have a monetary interest necessarily. They're primarily looking for a permanent residence.
So I just don't buy this "abundance" stuff in general. If you remove all of these restrictions, will some companies start building housing? Some will. But my guess is most will say the juice is not worth the squeeze -- the profit margins and the long-term values of these properties will make it unappealing. Just like it's unappealing for grocery stores to set up in big urban areas. Or for hospital providers to set up in rural areas. Food deserts don't exist because of too much government intervention. A lack of rural hospitals is not a problem because of too much government intervention. It's because those things are not profitable.
So in my opinion, if you want to reform zoning rules or things of that nature, it's only really going to be effective if you *force* (or if you want to be politically correct, "incentivize") housing companies to build in these areas too.
I don't really consider this an "anti-trust" argument. It can be equally true if there's a lot of competition in the housing market and if there's next to no competition. It's more of an incentives argument. This is an argument that, like with medical care, we're treating something that is a fundamental need of every living human to have a stable and peaceful and fruitful life as if it were a standard market commodity. And when you do that, you get poor outcomes. We need to support the building of housing *even if* it's unaffordable or has low (or even non-existent) profit margins
Incredibly dishonest article. It's shocking to see people support this. And I love the way it's framed in a conspiratorial tone, and uses coded language to make you doubt this is a quantifiable problem.
All while he ignored many parts of the text he allegedly was critiquing. I'm still shocked that this is getting upvoted.
The very first sentence in the article is this:
>This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.
"Insists" is doing a lot of work here to support the rest of the article. But it's lies through omission.
>At a high level, I have never found these arguments persuasive
Irrelevant if it persuades you. This isn't a high school debate class, facts and metrics are what matters.
>One hallmark of a monopolistic market is rising profits.
Not even close to true in theory or practice. In theory, monopolies have ever way in order to set prices for whatever goal their after. They may also lower supply thereby lowering aggregate profits. Long term profits can justify anything now.
Anti competitive practices are mainstays of monopolies. Not whatever the author just made up.
>The Musharbash essay on Dallas—like too much of the antitrust left’s work on housing
Oh boy here we go! The boogeyman has been setup, the ominous "they" is out.. checks notes... make housing available for average people.
>is filled with out-of-context quotes, overconfident assertions lacking evidence, and generally misguided claims.
Pot. Kettle. Black.
The next 5 paragraphs are about him talking to Quintero. He starts by framing the issue saying Dallas is not a good fit for Quintero’s theoretical model or previous research, which Quintero agrees with. He then uses this agreement to act like he's right about everything else and even misquotes his "100%".
It was shocking to see how we just kind took one affirmative agreement for one thing and turned it into an agreement about another. Talk about hearing what you want!
But that's not the rub.
The rub is that the Musharbash's essay isn't referencing the John Hopkin's research paper (Quintero) to say DFW fits it's described model, it's that the use of a market intelligence broker has effectively made the firms act as single (or a few) unit(s), enough to make the DFW's conclusions relevant.
Here's the snippet from Musharbash:
>Over the past two decades, most — if not all — significant builders in DFW have converged on the same source of market intelligence to drive their decision-making: a consulting firm named Residential Strategies, Inc. (“RSI” for short). [0]
> [...] While RSI is reportedly careful not to share sensitive information or facilitate explicit collusion among builders, it does not have to do so to play a role in limiting competition. [1]
Moving back (unfortunately) to the Thompson article, here's his next little "misquote":
>Claim #2: Dallas housing experts say local homebuilders are monopolies who are “devouring” the market.
The article didn't even claim this. The quote the source articles quote DIRECTLY below the claim from Musharbash's article really highlights how far out of the way Thompson went to misquote it:
From Musharbash's article, whihch again Thompson also hilariously quotes:
>Indeed, “[t]he scale and sway of market leaders” — particularly D.R. Horton and Lennar — means they “often monopolize access to trades and vendor resources” in local markets, constraining the ability of smaller builders to build at all, according
Unless D.R. Horton is a "local", "Dallas" builder I'm not even sure Thompson misread this piece so badly. If he wasn't an established journalist I'd call into question his reading comprehension skills.
So I have to assume it's not stupidity, it's malice.
There's also a subtext claim here where he continues to talk with McManus about land use regulations. McManus says land use regulation is the primary and SINGULAR cause of the housing issue, but what Musharbash's article points out is that land use regulations and zoning laws really have changed while the issue continues to intensify:
> I discovered that pretty much the same dynamics afflicting blue states are also afflicting red ones — a fact that should have important implications for how we think about housing politics and policy in this country. [2]
> [...] not of land use regulations, which have remained relatively stable in recent decades, but of two critical segments of the housing supply chain: The homebuilding industry that builds new houses, and the resale market in which people buy and sell existing housing stock. Both have experienced dramatic changes over the past four decades [3]
This is exhausting, not going to lie. But let's continue.
>Claim #3: Industry experts have data proving that homebuilding oligopolies are holding back national housing construction [...] Did Lambert agree with the antitrust folks, who love to quote him so much, that the consolidation of big homebuilding companies was hurting housing supply?
No. Nope. No again. That's not what was written. Here's what was written:
>By facilitating high-priced home sales with these cut-rate mortgages, large homebuilders impose a double handicap on small builders while inflating property valuations in the region as a whole. [4]
> [...] The largest homebuilders benefit from this dynamic because they sit on large amounts of real estate whose valuations they want to maintain or raise, but it makes it that much more expensive for small builders to buy land to build on in the first place.[5]
>>By tying home sales and mortgages, Dominant homebuilders can sell their houses at higher prices with higher gross margins, while issuing bigger mortgages with bigger origination fees and bigger resale values on the securitization market. As their below-market mortgages get buyers to accept higher sticker prices, these inflated prices feed high-priced comps into local property databases — pushing land and home valuations up market-wide. The largest homebuilders benefit from this dynamic because they sit on large amounts of real estate whose valuations they want to maintain or raise, but it makes it that much more expensive for small builders to buy land to build on in the first place. [6]
The picture being painted here is not one of "no one is building houses" but people are building the wrong houses for the wrong reasons. And smaller, local builders aren't able to build the houses people WANT and NEED because the system is let's just say... self-fulfilling.
The big builder's aren't going to build you your affordable home. It's not just that they don't have to, but it benefits them not to. More homes at the appropriate market prices would cause their stranglehold to completely unravel.
Let me just tab back over to the article yet again and continue.
>Claim #4: “X companies account for Y percent of this industry” is a smart way to think about market concentration.
You know what, I'm actually done.
Terrible article. Terrible journalist. I would say he should feel ashamed but the fact that he's willing to be so dishonest on paper with his name stamped over it tells me he couldn't give a shit.
This "Abundance" nonsense is simply liberal repackaging of Reagan's trickle down economics and deregulation. That's all it is. Reagan's policies were designed to transfer wealth from the young and the poor to the old and the wealthy. Abundance will do (more of) exactly the same.
The very best case fo housing deregulation as per this Abundance nonsense is Houston. And that's only if you have essentially unlimited land.
Private industry simply will not lower house prices long term. We need to stop with this nonsense of looking for market-based solutions and public-private partnerships.
The only solution to housing is for the government to maintain a sufficient stock of quality housing such that the private sector simply cannot corner the market to drive up prices.
The example I always come back to is Vienna where ~60% of the housing stock is owned by the government. Residents essentially have permanent leases. It's affordable and accessible. Vienna has some of the lowest rents in a European city.
The purpose of the modern Democratic Party in the US is support American imperialism and to not upset their corporate donors. "Abundance" only exists so Ezra Klein can get invited to all the cool parties, get speaking engagements and generally curry the favor of the billionaire class and the Democratic establishment. It's just a liberal face on Reaganism.
"your margin is my opportunity" will lower prices and does so in all areas of the economy that aren't highly regulated. The exception are of course cartels but Thompson shows here that those aren't present
Sigh. The whole housing narrative has been hopelessly taken off the rails by well-meaning but clueless urbanists.
And quite predictably, once the poisoned fruits of their labors start to bloom, it's always the fault of capitalism. Or maybe foreign investors and private equity.
All I know is I moved to the Dallas area 4 years ago, and I'm still shocked at the housing affordability compared to where I moved from. Both in terms of absolute price and general overall cost of living.
The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy.
Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.
Affordable housing is NIMBY whitewashing of reducing supply through rationining. (Note the supporters of affordable housing programmes count the largest landowning families in San Francisco and New York among their ranks.)
There is an article on the front page, right now, about Denver moderating its rents through construction [1]. We've also seen this in Montana [2].
If you build infinite luxury apartments, in the limit their value is zero.
Build more luxury housing and the inventory increases. If you've met the city's housing demands (which you probably won't since nearly every city is behind on meeting demand), then it follows that typically less desirable inventory experiences less demand and will subsequently experience a price drop.
The problem is nobody is building enough. The equations of taxes, property value, and developer profit all balance each other out and control the rate of building. Regulations slow this equilibrium even more.
A few policies that can help:
- Remove stupid regulations against building dense housing. Keep the fire safety regulations, but nix the multifamily zoning regulations, the building height regulations, curb space and parking space minimums, etc. There are so many NIMBY and outdated 1950's era regulations that make it costly and time consuming to break ground.
- Tax unproductive land use, eg. storage units and parking garages. This will convert those plots into housing and businesses.
- Heavily tax unused and dilapidated land that is not currently occupied by businesses or residents. Burned out houses have no place in the city. Tax these properties to the point that they fall into foreclosure and give cities the power to take over the land and sell it at a profit to developers. Give owners the chance to cure the issue, but make quick work of clearing these useless plots.
- More controversially, tax single family housing more than multi-family housing. Tax it proportional to how many people could live on the plot if it were occupied by a 10-story development. Or if you don't want to raise taxes, lower taxes on multi-family housing. This will encourage density.
- Give tax breaks to developers, apartment and condo complexes, and businesses that help underwrite development.
Note that these policies only make sense in dense metropolitan cities. Suburbs and rural areas don't need to operate in this way.
The people moving into the new luxury units are moving out of older less desirable units, which (with enough of this movement) see their prices decline
It's a law of human nature. Value is inherently subjective, which makes deriving it from natural laws conditional upon a physical explanation for humanity.
Ecologists have been studying how groups of animals deal with famines, natural disasters, loss of habitat, climate change, etc for many years. These conditions change supply and demand on resources that are out of those animal populations control. Studying cooperation in bacteria colonies from a similar lens was pretty hot in academia in the late 2010s from what I remember.
Each animal defines value differently (heck, different groups of different people define value differently). A half-eaten sandwich thrown on the street is trash to you, but a jackpot for your local crow. The crow has no interest in the housing market though.
- Computational systems, distributed systems, and operating system theory model resources and demand. They often attribute a cost to units of space, time, or compute based on availability.
- Ecological systems very closely model economics with respect to predator-prey dynamics.
- There are so many systems in biology that resemble economics. Evolutionary systems often increase gene dosage over generations in order to meet demand for gene products: polyploidity in plants, gene duplication, promoter amplification, etc. There are then also suppressive measures taken when deleterious effects arise. The balance of telomerase, etc. Within a living organism, there are the dynamics of apoptosis and proliferation pathways to follow the developmental program, to avoid disease states, etc. And then there are the biochemical flux of metabolites, etc.
Value is partly subjective but all value eventually can tied to the reversal of entropy. And the reversal of entropy costs energy.
It is naive to think the topic is wholly subjective. Subjectivity is one aspect of value but not only does the subjectivity coincidentally correlate with entropy reversal… but entropy reversal is also intrinsic to all value as even a human being alive and assigning value to something carries an energy cost. This cost is non trivial as it takes a lot for you to live and a lot more to have the luxury to think in terms of value.
There's that, but also it's more difficult to get mixed-density builds than detached homes developed, or the type of builds the left associate with "affordable housing".
While being able to build detached homes faster is nice and all for those on the market, for an effective YIMBY approach allowing density is preferable.
Plus, trying to sprawl out into perpetuity is putting cities in the hole. The suburbs are money pits that are subsidized by the city cores.
If US car sales were capped at 10 million cars per year manufacturers would immediately focus on their luxury brands and leave their regular brands out of stock. When you keep strict zoning, give NIMBYs veto power, let environmental review be weaponized as a delay tactic, you are capping new construction.
New housing is simply more expensive; so it's marketed as "luxury", and it's sold at a premium to the higher end of the housing market. This reduces demand for the older, more affordable existing housing stock, and with depreciation and wear and tear, the new housing will become more affordable as time goes on.
If you're in a market with a shortage of housing, those with more money will simply outbid those with less, even for older, less desirable housing. I've seen it, where when I moved out of my last apartment before I bought a house, my landlady raised rent considerably when looking for a new tenant, and even then she got a tenant who wanted to pay her over the rate that she was asking for to ensure that they were able to get the apartment over all of the other applicants. Wealthy empty-nesters who were downsizing, and willing to pay a premium for an older apartment in a desirable neighborhood, forcing out anyone who might have otherwise been able to afford it.
So yes, while it does help for there to be some push to build more affordable housing, if taken to an extreme building only luxury housing will leave an unbalanced market, in a lot of cases building luxury housing is exactly what you want to do to reduce the competition for the existing, more affordable housing stock.
There is no natural reason for this to be the case. If anything, learning curves and economies of scale should result in new units costing less, not more, than ones built by artisans.
Baumol’s Cost Disease means construction labor cost rises faster than productivity. We’re allergic to prefab construction - banks and insurance companies block it. A lot of construction workers left the industry after 2007. Baby Boomers are retiring and told their kids to not get a blue collar job. New housing has to be ADA compliant. People expect to give each kid their own bedroom and have two car garage instead of one car or no garage at all. Recent immigration crackdowns and trade wars are the icing on the cake.
> Baumol’s Cost Disease means construction labor cost rises faster than productivity
Baumol’s applies to jobs that “experienced little or no increase in labor productivity.” I’m arguing there may be extraneous causes for construction’s productivity stasis.
there are! Land use code. And permitting. Municipal processes for permitting housing have stifled any really serious innovation in construction.
you know why we don't have modular, factory built apartment buildings? Not at scale? Because the municipalities won't permit them. and the real reason they won't permit them is because it would put all their inspectors out of business if you didn't have to do any walls open inspections because it was all built in a factory...
Houses depreciate if there's an adequate supply of newer housing keeping up with the housing demand of the area. If there isn't then the general GDP growth of the area in which the house is located dictates that the house's value grows as well.
When you build the high-margin apartment, people vacate other housing units to move into it, reducing demand on the older units, which reduces prices in the area. This is just the law of supply and demand, but you don't have to derive it axiomatically: it's empirically what happens when we increase supply at market rates.
I'd like a land value tax too, but it's not going to happen, and an LVT would guarantee market-rate development.
The number of rich people buying random unoccupied apartments in new multifamily developments has measure zero in the greater scheme of North American housing policy. Meanwhile: the construction of still more housing works against the interests of anyone who would buy a random apartment and hold it vacant as an investment interest, so this is a doubly facile point.
was almost a decade late, like a nuclear reactor, and they realized only after it was built that there is no market in our town for "luxury senior housing" because seniors with money go to Florida or Arizona. If they could fill the places you might say that it's better business to build expensive rather than cheap apartments but when these places are vacant you start to wonder if they are farming tax writeoffs or something
What you expect first is they are going to tell the local town they can't pay the property taxes, in a few years they'll tell the bank they can't afford the loans they took out to build it.
Other "luxury apartment" projects outside of Collegetown usually have some segment of subsidized "affordable" units, one of these has at least two police calls to it a day and in the last few weeks these have included murder and arson.
How are they still able to live in subsidized affordable housing after they are convicted of murder or arson? Don't we have jails for this kind of criminals?
Exactly -- all new housing is going to be marketed as "luxury".
Who is going to build a brand-new apartment and say "well, this is janky low-quality housing, you might want to live here if you're poor or something"?
I go outside and look at my neighborhood of bungalows largely built immediately after the war, they were not sold as luxury. They were sold as affordable housing.
Plus housing you are mostly paying for the land. The land is expensive because it is finite and because zoning constrains how much housing you can build on it.
In many places the land is 2/3 the cost of the housing. The cost difference in building what left nimbys deride luxury and what would be considered affordable is really marginal. It’s like $100k in finishes in a $1.5M condo type difference.
The problem is that you don't generally destroy the used car in order to build a new one. So increasing the new cars on the road eventually also increases the number of used cars on the road.
> De-densification isn't required; a one-for-one knocking down and rebuilding of a single family residence suffices
Sure. The only reason developers do that is because land-use restrictions prevent the construction of denser, more-profitable and more-efficient housing.
This is the real answer, not the pat “no one builds new used cars” nonsense. It is entirely possible to build new, no-frills apartments that are 100% habitable and to code. But because of all the regulatory boxes one needs to check — namely all the fees spent, and time spent waiting for seemingly endless approvals — it is simply not possible to rent out bottom-dollar builds at a low market rate. The same logic applies for single family homes sold for purchase. The startup costs are just too damn high.
You are right of course. I was being flip. There are multiple reasons it is no longer profitable for car companies to make small trucks. CAFE regs are part of that.
Except that outside of Japan, it is unusual for detached homes to depreciate in value. Apartments though you do have a point. Unless the location adds the value they will depreciate over time.
Detached houses almost always depreciate in value everywhere and require constant maintenance expenses just to keep from falling apart. It's the land under the house that appreciates in value. People often mix those two numbers up.
This is a fair point, but the analogies to vehicles don't really work anyway: they're a depreciating asset, houses are not. Even a tiny rundown place can cost millions owing to location.
But all things held equal, if you have a new house that's big and a new house that's small, the smaller one is cheaper. And further, mixed density builds will be cheaper than single detached homes. Beyond that there's nothing caked-in to the walls that makes a house cheaper or expensive. Shitty houses are just unmaintained, dilapidated. Flooding the market with houses will drop prices.
When housing is scarce, all housing, even 100 year old dumps, will sell or rent at luxury prices.
No one is building apartments made of solid gold or concrete mixed with diamonds. They are building thoroughly ordinary buildings of concrete, wood and drywall. They fetch "luxury" prices & rents because for each one that exists, there are 40 ppl trying to live where, so they raise the price or rent to capture the riches of the 40, despite there being nothing particularly special or expensive about the physical structure.
You can do this with non-profit/govt/social/public housing too - if there isn't enough of it, every unit will require a "luxury" of time to wait for it to become available, even if the nominal price or rent is affordable.
Building only affordable housing is how you get cities into a downward spiral. The people who want luxury housing are the well-to-do. They probably contribute 10x the sales tax per capita than the people who live in affordable housing. And almost by definition luxury housing causes more property tax to be paid to cities than affordable housing. Both sales tax and property tax revenues shrink. And the city gets into a fiscal crisis. The city reduces services. People leave. Housing becomes more affordable but also more undesirable.
Yes, new builds are targeting wealthier people. Those wealthy people then move out of their previous housing and that becomes the affordable housing. Like another commenter pointed out, you can't get affordable used cars without producing new cars.
Today's affordable housing are the "luxury" units from 30 years ago. If you want to decrease the cost of housing you need to build more of whatever people will buy.
Presumably, if they're sitting at 20-30% occupancy, somebody (like the developer) is going to be having trouble paying their bank loans. You understand what happens next? (hint: prices plummet). If that isn't happening then your diagnosis of the problem is very likely wrong.
Toronto's housing market has a similar problem, except they also mostly built one bedroom shoeboxes for investors. Will be interesting to see how this unwinds[1].
Agree. I am not seeing starter homes being built in Omaha. They keep moving further out west, north and south — there's nothing there but fields and fields. I'm not sure that they're in anyone's "back yard".
And yet, they build expensive homes because (I assume) that is where the bigger profits are.
This is one of the funniest articles I’ve read in a a long time. I’m not sure what is better, the “I quite literally set out to find support for my narrative and find exactly one (1) guy that’s both willing to call himself an expert and give me my desired answer for each of my individual points” thing or the lazy neocon virtue signaling
> The antitrust left
I love this phrasing. Derek Thompson has done some Serious Journalism and has discovered that if you support competition between homebuilders you are a Leftist.
Also there isn’t a concentration of homebuilders (in Dallas) but even if there was it doesn’t affect prices (in Dallas). Well there may be a concentration of homebuilders nationally, but Thomson spoke to a guy that doesn’t care about that. Anyway, wasn’t the takeaway from the Great Recession that monopolies are good?
But then I’m not sure he knows what a monopoly is
> If a homebuilding monopoly purposefully made crappy new homes, they’d be out-competed quickly
Or what is a good outcome or a bad outcome
> Can big companies hurt subcontractors by forcing them to accept lower prices?
> “Maybe, but if big homebuilders can offer trades longer guaranteed contracts”
Hmm… they can force subcontractors to accept lower rates, but that’s not that big of a deal because they can force them to accept lower rates for a longer period of time. Like for example it would suck to have your paycheck cut in half but knowing that there’s no chance of it going back up for several years would take the sting out of it. This is the reasoning of somebody that took a Hat Man dose of Benadryl
So much of the journalism we read is heavily processed and barely-reported and it's startling to see how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed.
We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.
I've been loving Thompson's substack (which is mostly not about housing policy so far).
Reporters used to start at something like the City News Bureau.[1] For a century, the City News Bureau covered local news for Chicago and sent it in to the local newspapers. Lasted until 2005. Young reporters started there, covering every police station, every major crime, every major fire, every major trial, and getting the facts right, or else. The bureau`s unsentimental motto: ”If your mother says she loves you, check it out.”
We need that again. As I point out occasionally, read news, and ask yourself which stories started out as a press release. For the City News Bureau, nothing started as a press release. They had people pounding the streets of Chicago for a century. Today, the pundit to reporter ratio is far too high.
There's a great book about the Bureau, called "Hello, Sweetheart, Get Me Rewrite". (by Dornfield, not the one by Sears, which is something else entirely.)[1]
[1] https://www.chicagotribune.com/1990/06/20/if-city-news-burea...
[2] https://www.amazon.com/Hello-Sweetheart-Get-Me-Rewrite/dp/08...
Legacy journalism has changed from a low-barrier-to-entry working man's occupation, with entry level reporting leading to high-paying punditry, into a high-barrier-to-entry ivy league occupation with new entrants to the field expecting prestigious positions from the start.
It’s also what’s called a high prestige low pay career which is by definition exclusionary of poor and middle income people, so the news makers are further and further detached from regular people.
https://economistwritingeveryday.com/2022/02/07/the-dangers-...
There are still hundreds of thousands of journalists around the country who don't have ivy league educations and are getting paid a pittance to work in their fields. I once worked for a publisher which hired reporters making $12 an hour who easily worked over 60 hours a week. Big city reporters might push out a few stories a week. The small town people are cranking them out by the dozen, with about 3/4ths of their bylines being "<newpaper>" Staff so that people remain unaware of how understaffed these papers are.
The problem is that nobody would pay for it. People expect news to be free, and click bait and lazy copy paste or LLM journalism is cheaper and works just as well to get clicks for ad dollars.
Would people pay for real journalism?
Depending on the specifics of the publication, we can broadly say that print media used to get more revenue from advertising than people actually buying the physical media.
You could Google it and read about the decline but Wikipedia is a place to start:
> https://en.wikipedia.org/wiki/Decline_of_newspapers?wprov=sf...
Newspapers used to give copies of their daily paper away in bulk to distribution hubs so as to boost circulation. In fact, they still do.
You can often pick up a paper for free when boarding a flight.
You're really just observing that the marginal cost of reading is tiny. That doesn't mean that the fixed cost of producing an article or edition isn't very large, and needs to be paid for somehow.
"You can often pick up a paper for free when boarding a flight."
I have literally never seen this. In the US?
In Europe for instance
The beginning of the end was Gannett and USA today...
I think about this from time to time. Personally I would pay per article if it's convenient. I don't want to shell out $20/mo for, say, the Economist right now but if there was a particular article I wanted to read I'd probably pay a few bucks.
The papers wouldn't go for it, but these days I can subscribe to individual writers I like on Substack rather than paying for a newspaper subscription and subsidizing content I don't care about. More bang for buck. People have to be met halfway.
> I don't want to shell out $20/mo for, say, the Economist right now but if there was a particular article I wanted to read I'd probably pay a few bucks.
The Economist is one of the few news sources worth paying for.
Every week, there's a tour of the world's major events, by region. There will also be an in-depth article on one country (how's Rwanda getting along?), an in-depth article on one industry (what's the situation with bauxite supply?) and maybe a section on some technology (water desalination, who's doing it?) Over a year, most of the world and most of the industries are covered. Read the Economist for a year and you get a sense of how the world works.
The target audience is the movers and shakers of the world. Look at the employment ads.
There's a general pro-capitalism bias, but it's British-European, not US-oriented.
I love their writing, but I hate their subscriptions. The only way to cancel is to talk to customer service via chat or phone, who will keep begging and insisting that you not cancel and offering discounts to try to stop you. When I finally did manage to cancel, it required at least half an hour of insisting to some salesman.
I originally planned to just take a break, but after that distasteful cancellation procedure, I didn’t feel like resubscribing.
The Economist regularly goes on sale at discountmags.com. For years it was $1/week, but recently the price increased to $75/yr. It's not on sale at the moment, but for anyone interested, I recommend setting up a deal alert at slick deals [1] to get notified the next time it's on sale - probably around Black Friday / Christmas.
I have been subscribing to the Economist through DiscountMags for over a decade now, and consider DiscountMags to be a totally legitimate business. DiscountMags does automatically enroll you for their "DiscountLock" auto-renewal when you place an order, but you can turn it off at any time through their website without talking to anyone (and I would recommend turning off DiscountLock as it no longer locks in the original price like it used to... so better to just re-up during a sale period).
[1] https://slickdeals.net/f/18290980-the-economist-magazine-1-y...
For what it’s worth, they offer subs via IAP in the iOS App Store. If you subscribe that way, unsubscribing is just a couple of taps.
That €349 per year is pretty steep, though.
I sent them an email to unsubscribe one time to take a break too, though I'm European that was many years ago. I hope it didn't get worse.
Yeah, it's good. I just find it expensive to pay for regularly.
>Would people pay for real journalism?
See the comments every time a pay-walled article is posted here.
The problem with current paywalls is that each one wants you to purchase a monthly subscription to read the article, I don't want to have a subscription for each news site I might want to read an article from. I'd like a convenient way to pay a few cents per article, I could maintain my own balance of "news budget" per month and spend it, but paying US$ 5-10 at each paywall I encounter is simply not viable.
All newspapers got fucked by the internet, I can't comprehend how they didn't figure out that banding together to provide a centralised service to allow me to keep a balance and pay out per article read might have worked. Instead they defaulted to using Big Tech ad networks to patch their lost revenue.
Make it convenient and people might pay, requiring a subscription is definitely a huge friction on the top of the funnel, I'd even say it's a very fine mesh grater. No one wants to go through a fine mesh grater to read news articles.
> The problem with current paywalls is that each one wants you to purchase a monthly subscription to read the article, I don't want to have a subscription for each news site I might want to read an article from.
Yet people love their monthly subscriptions to listen to a song or an album (Spotify), or to watch a movie (Netflix). It's clear to me that the future of written content, especially news, is mass syndication (like you mention). Where you pay a monthly subscription to get access to a wast library of content from different sources.
One big difference there is that for the vast majority of people, they can get the vast majority of their music or video content from that single service (or at worst a small number of them).
But for reading news articles, there's a LOT of diversification. It's nowhere near one-stop shopping. In fact, a responsible reader ought to want to diversify points of view to avoid bubbles.
Of course, that doesn't eliminate the possibility of an industry consortium allowing a reader to pay into a single pool and read content from many sources, with payment distributed in some equitable manner.
That's what I'm suggesting. If music streaming services can offer both gangster rap, classical music, heavy metal and pop, then surely a news/article syndicator should be able to offer access to papers from vastly different perspectives. I want both extreme right and extreme left, and everything in between in the same subscription.
Lets be real here, in the past advertisers did pay for it, but all advertising spend has moved on to the clickbait-youtube/google/Facebook garbage heap.
Don't people already pay for things like the NYT?
I guess local papers might be harder, they may have to demonstrate they can reveal the journalistic failures of other papers in local affairs.
Nobody pays for news from the NYT. NYT is a game developer that also provides news on the side. Their games are their main draw; my gf subscribes and never reads the news.
https://www.axios.com/2024/01/29/wordle-nyt-games-news-media...
The legacy media were advertising companies who also happened to provide news. People aren't willing to subscribe for advertising, but they will for games.
If we're going by anecdata, here's another data point: I subscribe to NYT and don't play any of their games. Yes, I read it for the articles but also, to a large degree, for the subscriber comments as well. Similarly to the reason I frequent Hacker News. And to stay up to date with what has been my home for a long time. And also NYT Cooking, though I only access that once in a blue moon.
It's fascinating to me that people would pay to read obvious political propaganda.
I get that the state-sponsored "news" in many EU countries is heavily politically coloured, but why would something like NYT be if they have paying subscribers? I never did the research, but I'm guessing they must have huge additional streams of income besides payments from readers?
It's depressing to see the paper that once had the courage to publish the Pentagon Papers seen as publishing political propaganda.
What alternative revenue incentive do you see that could support independent journalism?
Don’t take it too seriously. NYT reporting contrary to the reader’s politics = propaganda/shilling. NYT reporting in line with the reader’s politics = hard hitting journalism speaking truth to power.
You think nobody accused the NYT of propaganda during the Pentagon Papers years? Or ultimately, any other publication during any other period? What's new?
It's a form of tithing. You give to the propagandists providing the slant you align with, even if they're wealthy billionaires. It's been common for belief communities for centuries. Poor people do it for access to wealthy individuals or as a form of gambling on the promises of the propaganda, and wealthy individuals, when they give, are also doing so for influence (access to poor people en masse). Its propaganda all the way down.
It's just called exchanging money for goods and services. When did HN contract reddit's obsession with billionaires in every thread?
Traditionally it was ads that contributed most of the money a newspaper took in, but the fact that people were paying for the paper re-assured the people buying the ads that the papers were actually being read.
NYT is an exception, or more specifically it's much bigger than most other news shops and has the luxury of having a large loyal customer base, a brand reputation to defend, and a full time business analysis and data science team to upkeep its excellence. Your local papers are barely scraping by and are mostly owned by hedge funds whose primary objective to squeeze the consumer via judicial usage of paywalls and clickbaits. A commitment to truth and deep investigative reporting for them does not keep the lights on. The other papers and magazines are all subsidized by billionaires or other vested interests. The price for those is indoctrination.
Also NYT has spent a lot of time and energy into diversifying into things that are not news.
There is a subset of its customers that is only really paying for the games like the crossword. There is a subset only really paying for Cooking. etc.
Just like the old days, when people would subscribe to the daily newspaper for the crossword, the comics, the TV listings, the want ads, or the ads and coupons with the Sunday paper.
NYT is really just making the old newspaper model work in the new age, albeit with higher reliance on subscription revenue and less an ad revenue.
I’m reasonably sure that most of the national-level news media companies have been owned by millionaires (and now billionaires) for the last century. William Randolph Hearst, E.W. Scripps, the Ochs-Sulzberger family, Raoul H. Fleischmann, Cyrus H. K. Curtis are a few of the prominent wealthy owners of nationally-distributed news outlets and publications in 1925. Back farther to the Civil War you find more “independent” publications but it’s a challenge to determine which of them were privately owned by individuals of considerable wealth vs. those owned by their publishers who may or may not have been wealthy.
For a current breakdown, see: Index of News Media Ownership: https://futureofmedia.hsites.harvard.edu/index-us-mainstream...
> The problem is that nobody would pay for it
User "api" said "nobody", so that is enough to refute their point. Some people would might pay for it, it seems.
> NYT is an exception
> The other papers and magazines are all subsidized by billionaires or other vested interests.
How is the NYT an exception?
a large paid subscription base
That's no different from the other papers and magazines.
Paid subscriptions have never been a significant source of revenue to newspapers. They relied on advertisements, just like the websites that killed them.
That's not entirely true for NYT as OP mentioned. NYT is 170 years old. They have been through many phases and models.
Luckily NYT is a public company and you can look up their revenue split on the SEC website going back to 1994. In 1994 they had 35% revenue from circulation vs 65% from ads. In 2021 it was 24% ads and 68% subscribers and 8% "Other"
That's creepy when you consider how much subscription to ALL newspapers has collapsed between 1994 and 2021.
Tells you how hard advertising collapsed in the same time period. I was at a small chain of local papers from about '09-'13. I saw it first hand.
Classifieds used to be a cash cow... not EASY money nessesairly, it's made $20 or so at the time, but it was a lot of money. Things like apartments for rent or cars for sale.
Then craigslist came a long and killed that.
Similarly ads went from large purchases, often for very large placements (we'd do things like sell rights to entire sections for flat fees), went to Pay Per Impression models paying hundreths of a cent, with no guarantees or minimums.
The Washington Post is also a public company (before 2013). In their 2009 filing, they state that the newspaper's revenue (in 2008) was 51% ads, with the other 49% not attributed.
At that time operating expenses exceeded revenues by 25 million dollars, though this was not an immediate problem for them because they owned several other more profitable companies.
By contrast, in that same year the New York Times announced that they had managed to stave off insolvency by securing a large personal loan from Carlos Slim, who went on to become their biggest shareholder.
How are we distinguishing between these two newspapers? What's supposed to be "exceptional" about the New York Times?
Why are you looking at 2009? Is it because you think it fits your narrative? What happened in 2008 I wonder that may cause companies to be struggling? NYT is a profitable company with majority of their income coming from paid subscriptions. Does that answer your question about how they are different or do you wanna check their revenue split and financials in 1928 too?
A business secured a loan from a billionaire after the GFC and paid it off in 6 years. The billionaire also acquired a significant position in the business that he has mostly exited with a significant profit generated from the business subscription model. More on this crazy story as it unfolds at 11
It's no different -> Paid subscriptions have never been a significant source of revenue to newspapers -> well, they were struggling in 2009 -> ...
I'm looking at 2009 because the claim above was that newspapers other than the New York Times, but not the New York Times, are subsidized by billionaires, and 2009 is the year that the New York Times had to beg for a subsidy from a billionaire. Was that not clear from my comment?
How is taking a loan a subsidy? do you understand how loans work?
It's no different -> Paid subscriptions have never been a significant source of revenue to newspapers -> well, they were struggling in 2009 -> they took a loan that one time -> ...
If the NYT could sell those shares at the market price, they'd have been able to sell them to public markets. The only reason they'd possibly have to transacting with an individual is if there was something about the deal that exceeded the debt or equity financing available publicly.
What shares are you talking about? Debt != shares
From wikipedia:
> Slim's investments in the company included large purchases of Class A shares in 2011, when he increased his stake in the company to 8.1% of Class A shares,[43] and again in 2015, when he exercised stock options -- acquired as part of a repayment plan on the 2009 loan -- to purchase 15.9 million Class A shares, making him the largest shareholder.
[my emphasis, https://en.wikipedia.org/wiki/The_New_York_Times_Company ]
Your point being? I just want a coherent response from you. Your initial question was how is the NYT different as you assumed they make all their money from a billionaire benefactor and that subscriptions are not a significant part of the income of any news paper. Now it's about that one year where their income wasn't doing well. And they took a loan. And the creditor bought stock that they sold later.
> by securing a large personal loan from Carlos Slim, who went on to become their biggest shareholder.
NYT has dual class shares. It’s run by the Sulzberger family despite Slim’s stake.
They are rich, but not billionaires.
Surprised that no one has mentioned 404 media, a dedicated news sub I pay for annually. Good reporting is worth it to me, especially to get past all the b.s. marketing hype and influencer shilling. Maybe they’re unpopular here on HN but I stand by the sentiment: legit, good journalism is worth supporting financially.
The underlying assumption is that of capitalism, that is, that things should be profitable or at least self-sustaining. But if you do that, things like the USPS donkey train [0] would be stripped, the US military would / should be reduced to a fraction of its current size or down to nothing, etc.
Independent news should be completely free from capitalist interests.
[0] https://facts.usps.com/8-mile-mule-train-delivery/
> But if you do that, things like the USPS donkey train [0] would be stripped, the US military would / should be reduced to a fraction of its current size or down to nothing, etc.
and that is a problem because? These are funded by tax dollars collected. It's impossible for people to stop paying for them whether they make sense or not.
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The article here is about bad faith left wing arguments. Presumably you'd pay for those I guess?
No. What I would pay for is good faith left wing arguments.
Sorry to derail this thread on journalistic merit..
I just thought that this other thread on housing microeconomics is worth pointing out, to anyone who might be excited about the prospects of enlightened tax policy
https://news.ycombinator.com/item?id=44750961
>This is most clear in insurance data where replacement cost is isolated from land value.
The Rust evangelists don't want you know this, but a land value tax would fix data races
Haha it feels like it makes sense!
Yes the deeply depressing thing is that these sort of city news articles are now very much taken verbatim from press releases, and those press releases are from professional police communications departments, and so this gives enormous new powers to the police in able to shape the broader narrative as their politics and agenda see fit.
For example we can see here that this news article is lifting directly from the police press release. https://bsky.app/profile/kwardvancouver.bsky.social/post/3lu...
Maybe it wasn't even an overworked city reporter that did this but simply an automated AI creating news articles straight from the police press releases.
> We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.
I think a large part of it is that major news organizations too often don't do this kind of reporting, and often just seem to chase the same hot button topics as the rest of the crowd over and over again. And even then, few really dive into the details.
You're larger point is entirely correct, that there's a ton to be learned from old school journalism, and there are people out there doing it. But it's unsettling how much of it only gets covered by citizen journalists doing this in their free time, not by professionals who are supposed to be doing this for a living.
For example, the D.C. Attorney's Office had been simply dropping 2/3's of the criminal cases that came to them. No one noticed this until a anonymous internet account, DCCrimeFacts, went through the records and realized that this had been happening for years. Once that account wrote about it and it gained traction, major papers like the Washington Post started reporting on the story, it eventually ended up being an issue in Congressional hearings, and lead to changes in the way the U.S. Attorney's Office operates.
The account spent a lot of time digging through records and reporting on issues with the criminal justice system you wouldn't find elsewhere. But it was someone's side project, and there haven't been posts in a year.
Another example is the FAA scandal, when the best information has come from a single blog post by a law student who happened to go through the legal paperwork and was surprised that this hadn't been reported on.
The professional news media outlets do have some good reporters, and sometimes there are important deep dives there as well. But they feel few and far between, usually opting to chase infotainment (or sometimes the pet projects of a particular journalist).
It's amazing how many big stories we only get if some random citizen happens to spend their free time doing a personal journalism project, and if that project happens to get enough traction that people actually read it.
Links for the curious - DCCrimeFacts [0] and I assume the FAA case is Tracing Woodgrains [1], though I could be wrong
[0] https://dccrimefacts.substack.com/
[1] https://www.tracingwoodgrains.com/p/the-faas-hiring-scandal-...
> I think a large part of it is that major news organizations too often don't do this kind of reporting, and often just seem to chase the same hot button topics as the rest of the crowd over and over again. And even then, few really dive into the details.
The point of most media is to drive agendas, not uncover the truth. Doing proper reporting would create a problem and get in the way of what you want people to do.
or to sell ads
Journalism has all the problems of being a shrinking high status low income industry. Living in NYC I know a few journalists, and if you scratch below the surface on many of their bios they are quite often from wealth of one form or another. At least enough wealth to subsidize them living in an expensive NYC zipcode on awful starting pay with low growth and ceiling.
So it really is quite a monoculture. 20 years ago they all lived in UWS, now it's somewhere between Park Slope and North Brooklyn. Ever noticed how many local color stories used to be UWS focussed and are now Brooklyn? A lot of trends pieces are "stuff I noticed in my friends group" type of depth, and they all have the same friends groups. They literally don't know what they don't know.
> how much of a superpower simple shoe-leather reporting actually is. Derek Thompson's an incredibly sharp writer, but not really a subject matter expert on housing economics; all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed.
Matthew Stoller called the people Derek Thompson called, and some said Derek had misrepresented their opinions. So shoe leather caused the narrative of this so-called reputation to collapse as well.
> and some said Derek had misrepresented their opinions
Because he did? Or because once the entire cumulative picture got painted they looked bad and needed to walk their opinions back?
Link? I'd love to read countervailing reporting.
I want to say something about Stoller bringing a knife to a gunfight but really this fight only required Thompson to have a telephone.
https://x.com/DKThomp/status/1951083395146231957
What did Stoller think was going to happen? Calling people up on the phone is Thompson's entire schtick at this point.
Musharbash left a meaty reply in the thread:
In any event, my argument was also that three other factors — particularly financial policy changes starting in the 1980s that deprived small builders of bank capital, helped Wall Street to exert control over large builders and impose production discipline on them...
https://xcancel.com/DKThomp/status/1951089471501508766#m
Musharbash's argument, however, is dependent on the exercise of oligopoly power (whether he admits that or not, and given that he's long argued that the oligopoly is present...), and there's no evidence of it!
He tries to twist Lambert's words to say he's only saying there's no evidence of builders throttling at a national scale, thereby leaving room for his argument that it's happening in particular markets (https://x.com/musharbash_b/status/1951133245342404888). The only problem? Lambert clearly isn't specifying a national scale when he says "US," because he then continues by providing an explanation for the local weakening seen in some metros.
Musharbash seems smart enough to understand that, which leaves intentional misrepresentation. He's doing damage control, and hoping to wave his hands hard enough that it isn't noticed.
Please don't link to x.com, it is impossible to read a conversation there without an account.
BTW, you can use 'xcancel' (or even post the Blue Sky links) if you don't want to give traffic to the guy reposting what's in the screenshot:
https://bsky.app/profile/whstancil.bsky.social/post/3lv6ul7x...
Appreciate the fact digging!
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Please don't post personal attacks to Hacker News. It's not what this site is for, and destroys what it is for.
https://news.ycombinator.com/newsguidelines.html
Understood, but it's also the case that people frequently cite Stoller as if he's a legitimate analyst like a New York Times or Wall Street Journal reporter with skills and editors, and he doesn't actually understand any of the subjects he's trying to report on. I'll dial the snark back.
I read that as a very useful public service message. It also seems to be true. It also seems to be about a public person.
That didn’t age well. Based on the response it sounded like he made it up whole cloth or just completely ignored big portions of what the people he called said?
I've been involved in a lot of discussions about "what is journalism? what do real journalists do?", and the best response I've heard was from Ian Betteridge (of Betteridge's Law fame), who told me "Journalists pick up the phone." It may have already dated as a pithy description, but the idea of literally calling[1] people to fact-check or dig deeper is a low bar that a surprising amount of current journalism doesn't clear. And I say this as someone who has definitely done the non-journalism: just writing an opinion, or a column, or blog post, or whatever. Or, perhaps most insidiously, when you have a thesis for an article and you just collect the (partial) facts you need to flesh out that thesis.
I know why people blame the internet, the drop in rewards for journalism, the pressures to churn out text, that has led to. But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do. But it's as Thomas says, that scarcity means that it's still as valuable (and recognisable) as it always was.
[1] Or emailing -- but emailing, and emailing, and emailing, then calling, and emailing again until you get an answer.
> I know why people blame the internet, the drop in rewards for journalism, the pressures to churn out text, that has led to. But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do.
As someone both built for and trained to do it, I can tell you I'd be making at least US$150k/year less if I was still doing it. I wager I'd be short about $1.25M in career earnings through just salary in the time since I moved from the copy desk to tech.
That's factoring in how, through the first third of my tech career I was still making just $35-60k/year. And I was ecstatic, because $35k was a five-figure raise over running the front section of a daily newspaper.
Every person in the first two newsrooms I worked in is either dead or has left the journalism field completely, including a Pulitzer Prize-winning author and the entire team of editors, artists, and photographers who worked on the winning story. Most are now in PR, consulting, or (as a symptom of being near the Gulf Coast) in some arm of the fossil-fuels industry. One of the last whose career I keep track of just took up mail-order baking.
It's a financially unsustainable field in any market. At 5 years' experience at the head of the editing wheel, I was living paycheck-to-paycheck paying just $400/month in rent, living with two roommates in a single-wide trailer in the middle of a sugar cane field.
The vast majority of those City Desk-style journalism jobs made primary-school teaching salaries look attractive _25 years ago_, much less now. By the time I left, all of those jobs that I knew of had either moved to contract gigs or stringers (freelancers paid by column inches of text) unless you were in a big-city market or working for a regional/national paper.
The myth of building up a journalism career at an institution from the bottom of the org through shoe-leather reporting alone, without already knowing or being related to someone who could move you ahead of the rest, was already far past dead in most of the US.
If I could find a journalism job that paid half what I make now, made me travel constantly, had shit benefits, got me put on watchlists, made me deal with some of the slimiest people on the planet in the forms of career local politicians and court lawyers on the daily, and put me in precarious situations... I'd still probably take it, because I miss it every day. But that job flat-out does not exist in any form that I'd get a callback for unless I married into a publisher's extended family, and hasn't for decades.
Urban primary school teachers get a pretty attractive comp package these days!
I was a teacher and stopped in 2011. Pay was $38k/yr with summer school. Looks like the same southern California inner city school district pays $68k/yr now for the same pay step. That is a big jump but I am not sure I would call it attractive. And in North Carolina's state capital, where I am now, the rate is $50k/yr. That is some struggle-bus territory.
My first programming gig doubled my income and nearly halved my hours. The stress lowering alone would have been worth it. I haven't had anyone try to physically fight me as a dev. I think the same applies today; teachers are underpaid.
This is very region dependent. When I left education for consulting after 10 years as a HS teacher, I was making 55k. I started at 38k.
In Chicagoland, it's one of the better benefits packages you can get in a widely-available job. Defined-benefit pension, great health, huge amounts of vacation.
I know a few retired teachers in the Chicago area, and it’s uniquely generous*.
Appreciate the inside perspective.
I'm curious what's your take on news agencies like Reuters and AP? Do they pay better? Do they have resources to do real journalism?
> But I'd also emphasise that it's a vocational skill that not everyone is built for, or trained to do.
Somewhat-related to another front-page item today about, how lots of jobs sound kind of crazy if you really detail them out: https://news.ycombinator.com/item?id=44710651
> all he did here was read papers and call up the authorities they cited, and the narrative behind those papers collapsed
Did it collapse, or he simply created another dubious narrative to replace the previous one?
It collapsed.
I assume I'm somewhat impartial, I don't know this author, it's the first time I hear of the "antitrust left" or of the argument that big monopoly builder purposely keep the market scarce to increase prices. And it's not an issue that I hold a strong opinion about.
The way the piece reads to me is a "He said, She Said". And I have to choose whose word I trust.
Two articles, both claim to have spoken to expert sources, both claim the expert have told them X and Y. One says the expert told them things that corroborates the idea of the "antitrust left", and the other claims the sources actually disagreed with it.
So my personal take is that both appear untrustworthy and biased, pushing their own distorted narrative.
The crazy part about this is that it is fundamentally a competition problem, but they misidentified the perpetrators. It's not predominantly construction companies colluding with each other in the market, it's land owners colluding through regulatory capture of zoning boards to constrain construction.
Or, to the extent that it is construction companies, it's still regulatory capture rather than market collusion, but in their case it's capture of occupational licensing to artificially restrict people from entering into the trade labor market.
I have never heard antitrust left either. The author casually namesdrop it like some school of thought. I just read it as a virtue signaling epithet.
Hold on. Take the first claim. Derek Thompson called the author of the paper who effectively said "no my paper does not support the claims made".
So either:
1. Derek Thompson is flat out lying
2. The author is wrong and confused, or
3. The critics are wrong
The critics haven't claimed to speak from the author to confirm their interpretation is correct. So to think the critics are right you have to think the convo is a lie or the author is muddled and confused.
I think it's possible that Derek Thompson is just doing the same thing he is calling out.
4. Derek Thompson interpreted a short conversation with the author the way he wanted to hear it.
The author might have said a bunch of "nuanced details" in that conversation, and he took it as: "I knew it, author thinks their claims are bogus."
If I recall, I don't remember seeing any part of their conversation quoted word for word, or even the name of the author he contacted in the article. (though I might have just missed it)
> 1. Derek Thompson is flat out lying
It's this one. The person he called made a lengthy follow up post. It's clear Thompson purposely misrepresented the conversation.
It's helpful to understand why the "abundance" movement exists. Its only purpose is to stop the Democratic Party from addressing concentrated economic power. It's funded by the concentrated economic power.
This isn't an academic debate, it's an attempt to maintain power by a discredited group of people who recently presided over the collapse of the Democratic Party and are desperately casting around for a narrative where that's not what happened.
No, this article is saying that the sources are saying they never supported the original thing.
It’s a proof by falsification. It’s not saying necessarily that there isn’t some monopoly builder issue somewhere. It’s saying the current movement is based on complete bullshit.
"He said they said, so I talked to them, and they said otherwise".
That's what she said.
In the "he said, she said".
No it’s not. “He said, she said” applies to two people talking about an event and there is no root source of truth.
In this case there are direct researchers and the researchers are saying their work is being misrepresented.
The researchers wrote neither of the articles.
Two people are claiming the researchers say/mean different things.
In both cases you have no access to what the researchers have actually told either.
So yes, you have two people talking about an event (their interaction/reading of some research and the researchers).
Both are telling you that the research and researchers prove their point of view.
I sometimes think back to a passage in "dialectic of enlighenment" where the authors write what amounts to "input without analysis is meaningless, but analysis without new input is madness as the analysis eventually becomes only analysis of other analysis".
I think that generally a true problem nowadays. Popular culture does a lot of "analysis", but not a lot of reality seeking.
This article is good, but the phrase "antitrust left" really turned me off. I am probably some kind of a leftist (I want higher taxes on rich people and a society much more welfare oriented with a substantial degree of labor and resource allocation performed democratically instead of by markets) but I don't know a single leftist who actually cares about this housing shit except to think that houses should be cheaper by any means necessary. Like the idea that there is an active contingent of leftists trying to construct some kind of defense of the current housing system or critique of reforms (in general) aimed at making it easier to build houses strikes me as truly bizarre.
There may be some environmentalists who have housing as a pet peeve or something, and there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way.
I live in a very wealthy, extraordinarily progressive muni (almost certainly in the top 5 nationally), and my primary political project is zoning reform, and I assure you that left-NIMBYism is a thing, and that the "we should make blue state governments perform better and increase supply of things people want" thesis of "Abundance" (Thompson and Klein's book) is a bête noire among those leftists.
The argument isn't that the left broadly construed opposes housing legalization! Just that there's a prominent faction of them that do. Right-NIMBYs are a much bigger problem across the US.
Thompson recently recorded a podcast episode with Zephyr Teachout, taking the "we shouldn't do anything before we address antitrust" side of the argument; you can listen to it if you think "the antitrust left" isn't a real thing. Understand: the issue isn't antitrust; it's a totalizing worldview based purely on antitrust. Antitrust is probably super important! But where I live, zoning reform is much more important.
Keep in mind: Klein and Thompson's political project is a plan to organize the Democrats. They're not talking to the Republicans. Not in the sense they're talking to Democrats, at least. I don't think they could make that much clearer than they have.
Here in extremely liberal Portland, there are a huge number of people who genuinely believe that 'greedy developers' are the cause of the nationwide housing shortage, having talked themselves into the nonsense belief that building fewer homes makes people more money.
That belief has reached prominent political leaders as well. I listened to a bit of the Ocasio-Cortez/Tim Walz Madden livestream on Twitch, and they were talking about how something needed to be done about the greedy developers who were driving the housing shortage.
,"having talked themselves into the nonsense belief that building fewer homes makes people more money."
Can you show me an example of someone pushing this?
keep reading along in the comments, I've come across an example already
So people in comments are pushing it? That's not meaningful. I can find a Republican who pushes pedophilia would you act against Republicans because of that?
I have been doing YIMBY stuff for around 8 years now, and it does not map nicely onto any kind of left-right narrative.
There was one conservative dude who ran for city council here who was all about 'private property' and 'get rid of government regulations', who also ran against the idea of liberalizing zoning.
I've met left wing people who I agree with on many issues who will do the most spectacular, Olympic level mental gymnastics to avoid the notion that 'supply and demand' apply to housing.
There are moderate Democrats who are big backers of various reforms. And some on the far left who get that if you want Vienna style social housing, you also need Vienna style zoning and building regulations.
A former mayor here is a moderate Republican - he totally got what we were about and said some really nice things about welcoming new neighbors in one speech a few weeks after he met up with our YIMBY group.
It's just not an issue that - so far - has been slotted into the trench warfare that other issues have been.
It's dogmatic among the left that "market based solutions are bad". And because Abundance embraces market solutions, it must therefore be bad too.
Basically, all the arguments I've seen against Abundance tend either towards the ideological, or irrelevant. I tend to see very little empirical arguments.
Tons of the critics of the book haven't even read it, because large portions of it are about making the government work better, not just using market-based solutions for all our problems.
Housing, though, could definitely use a better market with less constraints like zoning.
No, the problem is when the markets are freer than the people.
I don't disagree with that. I think economic power getting concentrated in a relatively small number of hands is unequivocally bad.
That said, the Abundance argument for building more housing is that in many local housing markets, the pendulum has swung too far the other way in ways that are well-meaning but ultimately counterproductive. This very article makes the case that oligopolistic economic power is not the reason for unaffordable housing.
The housing market is anything but a free market. In a free market, a bunch of NIMBYs like these would not have been able to stop homes from being built:
https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...
But you literally described the moderates being YIMBY and the more radical being NIMBY, which is left-right, but instead of left vs. right on pole ends opposing, it's the leftists and rights agreeing on NIMBY against the moderate centrists. Horseshoe theory strikes again. There is a growing populist frustration where citizens like both people like Tucker Carlson and Bernie but hate the moderate establishment. Low educated are frustrated with outcomes (ironically being NIMBY on housing is a primary cause) and go extreme compared to the educated moderates.
I also included a far left example who got it. I should have kept going with the examples because there are also plenty of moderates who do not want to rock the boat. The governor of CT vetoed their big housing bill this year.
It really does not map onto left-right.
Supply destruction to put a floor on prices is not an unknown phenomenon.
The effort to make it seem silly to think that there aren't enough houses because the industry whose job it is to build houses did not build enough houses is itself a little silly. Circumstantial as the evidence may be, it's logical to assume that they didn't because it was more profitable not to.
> Circumstantial as the evidence may be, it's logical to assume that they didn't because it was more profitable not to.
This willfully ignores evidence that community after community has actively passed laws to stop that industry from building more.
Chesterton's Fence: why do those laws exist? Because people thought they were necessary to stop housing construction (especially, but hardly exclusively, densification).
It's not a partisan thing - red states are full of NIMBYs and littered with HOAs too - but the largest cities in red states have happened to not be hit quite as hard yet because they are generally newer cities, with plenty of room to sprawl horizontally still, starting from a lower baseline.
I mean, in my local case, the Chesterton's Fence answer is pretty clearly and directly racism.
> Supply destruction to put a floor on prices is not an unknown phenomenon.
The business model of construction companies is to buy a piece of property, develop it and then sell it for something more than the cost of buying it plus the cost of developing it. Constraining supply increases the cost of property which they then have to pay in order to acquire properties to develop. It isn't really in their interest to increase their own costs.
The most significant way it could be is if they were buying lower density units and replacing them with higher density units, so they'd be selling more units than they're buying and therefore benefit from the price per unit increasing. But in order to benefit from that they'd need to be increasing rather than decreasing the supply, which is contrary to the premise of them doing the opposite.
> The effort to make it seem silly to think that there aren't enough houses because the industry whose job it is to build houses did not build enough houses is itself a little silly. Circumstantial as the evidence may be, it's logical to assume that they didn't because it was more profitable not to.
Suppose that it would be profitable to buy a single family home and replace it 10 condo units, except that there is a law prohibiting you from doing that. Then it would be more profitable not to build those units, since doing so is illegal. But who is to blame for this?
> The business model of construction companies is to buy a piece of property, develop it and then sell it for something more than the cost of buying it plus the cost of developing it. Constraining supply increases the cost of property which they then have to pay in order to acquire properties to develop. It isn't really in their interest to increase their own costs.
Let's say for a moment that this is close but not quite actually the business model.
Let's say that the construction companies have spent a long time buying up vacant lots, faster than they are developing them, such that they now have a large inventory of land and would not have costs go up to continue operating if they did what you say.
What would you expect would happen in that case?
At that point you've ceased to describe construction companies and are now describing real estate speculators while calling them construction companies.
Moreover, notice how little sense that business model makes. To do that you would be sinking capital into vacant lots that you're neither developing nor receiving rents from while paying both property taxes and opportunity costs. You're paying interest on the loan or could have been getting ~10%/year by putting your money into the stock market. A real construction company would be trying to minimize the period they're holding an unproductive property.
And even if you wanted to be a real estate speculator, how does that make you more money than investing in rental properties and then actually renting them out so you receive rental income on top of any price appreciation?
Meanwhile, what, if not for zoning rules and other regulations, is preventing anyone else from undoing your attempt to constrain supply by opening up a new construction company which is actually a construction company?
You must be drawing from experience in a specific locality in the US, probably a rural one, because what I described is how land sales in the largest cities in the US has worked for half a century.
Doing what I described in New York City is exactly how Donald Trump made an initial fortune back in the 80s. It's happening right now in Seattle.
The business model not making sense, is due to the incorrect assumptions you make. For one, that land or buildings in cities appreciate less quickly than the stock market.
> At that point you've ceased to describe construction companies and are now describing real estate speculators while calling them construction companies.
I'm not sure what you think the difference is in practice. There may exist some construction companies that don't engage in real estate speculation, they just aren't the big or most profitable ones. Which addresses:
> Meanwhile, what, if not for zoning rules and other regulations, is preventing anyone else from undoing your attempt to constrain supply by opening up a new construction company which is actually a construction company?
The fact that the most valuable land is owned by other construction companies who have more money because of the real estate speculation.
> Doing what I described in New York City is exactly how Donald Trump made an initial fortune back in the 80s.
The total value of NYC real estate is approximately $2.8T. Trump has a net worth of something like $5B. Even if all of that was invested only in NYC real estate (which it isn't), it would be less than 0.2% of the NYC real estate market, which is hardly enough to have market power.
> The business model not making sense, is due to the incorrect assumptions you make. For one, that land or buildings in cities appreciate less quickly than the stock market.
That doesn't appear to be accurate. Metro housing prices have increased by more than wages but not by more than e.g. the S&P 500.
> I'm not sure what you think the difference is in practice. There may exist some construction companies that don't engage in real estate speculation, they just aren't the big or most profitable ones.
You're just pointing out that real estate speculation has been more profitable than construction, which is exactly the problem -- we make construction too expensive, on purpose, which is what increases the profitability of speculation. That some companies do both is a poor excuse to blame the construction companies for what the speculators are doing.
> The fact that the most valuable land is owned by other construction companies who have more money because of the real estate speculation.
Nobody even owns most of the land in any major US city, much less all of it. The properties that could derive the largest increase in housing units would be to replace single family homes with multi-unit complexes and the majority of existing single-family homes are owner-occupied.
> Klein and Thompson's political project is a plan to organize the Democrats.
“Abundance” appeals to the financial backers of the Democratic Party because deregulation doesn’t threaten them. But our problems are much graver that what YIMBYism can address: authoritarianism, climate change, austerity, warmongering toward China.
It’s because the wealthy block left-wing populism that so many people have turned to right-wing populism. Which is only making our problems worse.
At this rate, it’s only a matter of time before society cracks. There’s a good chance it doesn’t end well for the financial backers of “abundance.”
"Abundance" directly addresses climate change in the book. The scenario it describes is that we need to electrify at a pace far beyond what we're doing today in order to find off climate change, but large scale clean energy projects are often stymied by red tape and legal challenges. Also lack of government investment in scientific research.
Politics is local and there's nothing more local than your housing values
> Keep in mind: Klein and Thompson's political project is a plan to organize the Democrats.
This is the crux of the opposition. It's not that leftists necessarily have a problem with zoning reform, I don't at least, its fine. It's that the "abundance" project is a play for control of the party by the same losers who gave us Biden and Kamala.
People on the left feel that we need to be speaking to economic problems that regular people face. "Think of the millionaire land developers" is a losing message even if it does indirectly help regular people 10 years later. It's not even actionable at the federal level.
> People on the left feel that we need to be speaking to economic problems that regular people face.
Housing is that.
This just sounds like you want populist things and the outcome doesn't matter. Like price controls and tariffs.
Its about the message. Centering the message on something that has indirect, timelagged effects and isnt even actionable at the federal level is terrible messaging strategy for the national party.
"The dairy industry ran ads saying milk was good for you for 20 years and sales went down. Then they tried 'got milk' and sales went up" https://youtu.be/keCwRdbwNQY?si=kc14Ms7ECxglNgbl
"Build more" is direct and actionable. Regulatory reform is only one dimension.
Up north, Carney ran on a platform of building 500k homes annually, approx double the rate of housing starts. That's direct and done at the federal level, with billions in financing. It's impossible to be less timelagged than that by way of policy. So-called "affordable housing" qua government funding development (price controls after the fact notwithstanding) still entails hoop jumping and waiting for approvals, they don't spring up the next day.
The effects of zoning reform where they're implemented are reflected quickly as well. See: Minneapolis.
The general trend I see is that the left attacks the "Abundance agenda" without having read about it. Either that or the fact that it isn't just about market solutions is deliberately ignored.
> "Build more" is direct and actionable. Regulatory reform is only one dimension.
I could get behind "build more" much more easily than "abundance". You're onto something there IMO.
Fair, and I have to give credence that messaging effectively is extremely important. It's not enough to be "right", you have to sway and win. Will quibbble that the left is not exactly known for message-discipline, what's popular with them does not often translate well to most voters.
Many leftists have a problem with zoning deregulation.
Housing supply is the biggest economic problem that regular people face.
Ezra Klein & Derek Thompson did not bring us Joe Biden, Ezra became one of the most critical mainstream journalists of Biden. Their politics are meaningfully different.
> Many leftists have a problem with zoning deregulation.
I've been in leftist housing advocacy circles. I studied urban planning.
1) Every leftist I know who cares about housing hates euclidean zoning
2) Every leftist I know who cares about housing hates down-zoning
3) Every urban planning class I took said that euclidean zoning is bad
Euclidean zoning is the principle land use regulation in the United States because it is supported by powerful people, landowners and yes property developers (who are also almost always land speculators.)
Thompson and Klein misrepresent euclidean zoning as a leftist project and then set it up as a wicker man to stuff with all the environmental and labor protections they want to torch.
I live and am politically active in a front-line municipality for these issues (Oak Park, IL --- the actual redlining bastion of the western suburbs, a 4.5 square mile gravity well for Cook County school funding so egregious it was one of the first examples in Johnny Harris's NYT "Blue States, You're The Problem video) and I'm telling you, straight out, leftist defenses of existing zoning rules are a very real thing. In fact, where I live, they are the entire defense of those zoning rules: progressives have a supermajority of the board.
Leftists are not solely or distinctively responsible for exclusionary zoning and housing restriction in the US. Nationally, they're not even the biggest problem. But in many jurisdictions, places that should be the vanguards and test cases for housing reform, they are the controlling factor.
Which is why Derek Thompson addresses them so directly. What would be the point of aiming these criticisms at Republican-controlled municipalities? They don't share these values to begin with! They're not listening!
Right now, we have two parties actively propping up home values and the interests of the upper middle class. Klein and Thompson propose: what if on this issue we had two parties?
I think that conflating "blue state" with leftist is incorrect. "Blue state" confidently implies "centrist" and "not too much on the right". It does include also leftists, but not just them.
The parties are asymmetric. "Red state" implies very much on the right and is much more radicalized then democrats. But democrats themselves are centrists and unlike the republicans, tend to push away more radical parts.
I guarantee you all your Oak Park neighbors are the type who were With Hillary in 2016 (probably calling Bernie a sexist) and voted for Biden and against progressive income tax in 2020. They are not leftists. You seem to be having some trouble understanding the difference between democrats, liberals, and leftists.
T&K are fundamentally dishonest about the role of euclidean zoning in american cities, who supports it and why it's so powerful. Their basic project is to strip environmental and labor protections by tying them to euclidean zoning and saying "it's all the same."
And by the way, they may get their way (Newsom is already forcing repeals of environmental protections in California while toasting Klein) but at the end of the day euclidean zoning will still be around, because it is supported by people who are way too powerful.
Another by the way: I remember fighting the big Chicago rezoning in 2004. They had us chasing our tails by trying to double the parking requirements and letting us fight to get them back down to where they were in the old code, feeling like we won a big victory.
"I guarantee you all your Oak Park neighbors are the type who were With Hillary in 2016"
Its both. That's the problem. In my neighborhood, the construction of any market rate housing will be blocked by Hillary voting land-owners and single family home owners and card-carrying Bernie Bros mad that a private developer even gets to set foot in the city.
It's this alliance that has basically blocked housing in most metro cities.
When it comes to 100% affordable housing, yes the Hillary voters are on their own, but those are like 1-2 headline causing projects. For every affordable housing project there are 10 market rate housing projects that never even see the light of day.
As an example when I was active in housing in Chicago one of the organizations that was with us on the left was a developer of affordable housing: https://www.bickerdike.org/
Several of the activist actually worked for this developer.
Real leftist housing rights supporters are not against developers. They are against for-profit, private equity, land banking speculators, and yeah nimby homeowners. In general we hated the Oak Park type nimby liberal more than we hated the right to be honest.
“leftist housing rights supporters are not against developers.”
They certainly are in my neighborhood.
https://www.ourneighborhoodvoices.com/48-hills-cost-of-growt...
The “private developer risk” the article derides is an enforceable approval timeline that lets private developers have bounded risk. Apparently that’s a bridge too far.
In a market system, Creating a system that is "against for profit" housing developers very predictively restricts housing supply & drives up the cost of living for everyone.
You couldn't be more wrong; this is absolutely Bernie country. In the primaries, it made Washtenaw County MI look like Maricopa County. No, I think I understand just fine what I'm talking about.
Again: this is one of the 5 most progressive municipalities in the country.
Speaking of Washtenaw County, as a resident, it is also "the leftists" that are protecting existing zoning and are the major NIMBYs. It is the "evil corporate right wingers" that want to build all kinds of housing, but are prevented from doing so. There is literally two ballot measures for next week where the left wing NIMBYs want to protect a "park" (which is literally a parking lot) from being turned into a larger library and actual green space, because we also want to build more housing as well above the library.
Sounds like you're just applying somewhat arbitrary purity rules to what falls into the "leftist" bucket or not.
I believe that for most people "leftists" means "on the left side of the political spectrum", and so, in the US, it would be a strict superset of democrats & Liberals. But for you, it sounds like it's only subset of these, based on some criteria you haven't made explicit.
Fair enough, but that's a somewhat non-standard definition.
It's standard among self-described leftists, to distinguish themselves from establishment liberals.
I'm not even very far left and I identify with the term because party leadership are all 80yo and out of touch.
"Liberal" is an epithet here too (I'm a liberal, for whatever that's worth).
For what it's worth back, a lot of the opposition towards "establishment libs" is based more on optics than policy IMO.
Voters feel ripped off by the establishment. Running on "we're the establishment and we're here to help" is a loser, and letting Trump be the rebel is malpractice.
I am a libertarian (anarcho-capitalist) but people do not know the differences and similarities to liberal, because both has the prefix "liber".
Both ideologies evolved from the same source of classical liberalism, and still share plenty in common today.
But liberals would definitely down-vote me if I talked about Rothbard and Mises. Why do you think that is?
Because they have a difference in opinion with you about the degree to which markets should be allowed to exclusively allocate resources?
I personally am in favor of free market. Are they? I do not shy away from being a minarchist either, to be honest.
No, that's not what “leftist" generally means, it means adherence to any of a broad grouping of anti-capitalist ideologies (the more widely recognizable being the various forms of socialism and communism). It overlaps a little bit with the progressive wing of the Democratic Party in the US, but beyond that is mostly outside of the US major party system. The only people who use “leftist" to describe a superset of the Democratic Party also use “socialist” and “communist” in the same way.
I think you're injecting your personal views into the definition, which don't align with the common meaning of the word.
Here's the definition of the word taken from macOS's built-in dictionary (New Oxford American Dictionary):
> leftist, noun: a person who has left-wing political views or supports left-wing policies.
> left-wing, noun: the section of a political party or system that advocates for greater social and economic equality, and typically favors socially liberal ideas; the liberal or progressive group or section
Anti-capitalist thought represents a subset, but is certainly not the sole marker of left-wing political thought.
Now, my _personal_ take on this is that western left-wing thinking and liberalism (in the moral philosophical sense) are deeply intertwined (given the Enlightenment and its values), but anti-capitalist thought is deeply illiberal in nature. It is this fundamental contradiction that leads to permanent infighting within the left-wing spectrum.
> I think you're injecting your personal views into the definition,
I think I'm injecting what I know from getting a degree in political science and a two and half subsequent decades of experience paying attention to how political terminology is used by scholarly, journalistic, popular, and activist sources across the political spectrum into the definition.
> Here's the definition of the word taken from macOS's built-in dictionary
And that's a tolerably decent definition for a relatively compact general dictionary, but it misses a lot of nuance; outside of activist sources using it as a slur for their opponents, it is not used in nearly the local-politics-relevant way that left/right (especially qualified with a national label, like "American left") is.
FWIW: Ezra Klein called for Biden to step down before most others and asked for a fast national convention (not Kamala). Broad brushstrokes are energy saving, but just incorrect.
I guess this is a bit definitional, but I do not think of "very wealthy, extraordinarily progressive" people as typically leftist. I think of them as liberal and only in the American brain is that associated with leftism, so much so that we usually distinguish between "leftists" and "liberals" rhetorically. With, say, Hillary Clinton, being a classic American liberal and Bernie Sanders being more like a leftist. If you visit the DSA contingent I doubt you'd find anyone per se against zoning revisions to build more housing. Eg, Mamdani had literally building more housing as a part of his platform.
Leftists tend to feel very little solidarity with wealthy progressives and don't really vibe with their political interests, in general. It seems really weird that the specific label of "leftist" is being thrown around in this context. Especially in the context of organizing the Democrats where there is a meaningful and material difference between liberal and leftist.
Again, if you try to collapse this down to "leftists" vs "Derek Thompson", you're totally missing the point. Thompson's rhetorical adversary here are "people who believe we shouldn't do the zoning and envelope reforms required to increase the supply of housing", a subset of whom are on the political left and thus in his target audience: his term for them --- fairly applied! --- is "the antitrust left", but you could (like I do) call them "left-NIMBYs" and be in the same rhetorical place.
Most leftists gag over current anti-housing laws (I wish that were true of the right, but right-YIMBYs make up a tiny minority of the political right).
Right-YIMBYs are a tiny minority, but have you seen one in person? Truly a majestic, noble creature. You know they will fiercely stand their own ground but at the same time also go to extreme lengths to avoid putting their noses where they don’t belong.
Long thought extinct, sightings have been reported.
> houses should be cheaper by any means necessary.
That's basically the position Klein has in the book Abundance, but everywhere I go online the left automatically comes out hostile to it or anything that embraces market solutions. Your anecdote might be true but beyond your small sample size it doesn't seem representative. Broadly, they want populist solutions. This is why Sanders and Warren gave a lukewarm criticism of tariffs, and why they like price controls for grocery stores despite their having small margins, and risk of food shortages it could bring.
Mamdani - rent control. Dean Preston - NIMBY. UK Greens Party - NIMBY. Australian Greens Party - NIMBY.
Explain?
UK Greens aren't NIMBYs. They're against doing more of what's being done across UK cities already - which is building generic boxy blocks of cheap housing that look like they fell out of Minecraft, and selling them for unreasonable prices.
Many of the flats end up in the hands of landlords, who charge even more unreasonable rents.
There is no sense in which that's a workable long-term solution to the housing problem.
The Green pitch is "That's clearly not working, let's not do more of it." Which has nothing in common with "We don't want anyone to build anything anywhere."
Dehydrated man, after drinking one glass of water, rejects more water, reasoning that he's still thirsty.
Thats being a nimby in all but name. The UK does not build flats relative to its needs.
Uk greens are unfortunately nimbys. They even shut down solar farms and things you would think they would be in favour of.
> Mamdani - rent control
Mamdani wants to freeze rents of housing that is already under rent stabilization. He is also an advocate for reform and deregulation, and working backwards from outcomes. He has been talking to people from the construction industry and one of their main concerns is predictable time scales. He seems very pragmatic.
In the last election, Australia's Green Party was the only party whose housing plan involves actually building homes.
The major parties went with throwing more money at the problem.
Talk vs action. The Australian Greens opposed Australia's build-to-rent legislation. They didn't oppose the entire legislation. They opposed the one part of the legislation that would have helped the problem.
Aside from the fact that the few policies they made explicit in their platform would actually be counter-productive to getting more supply (such as National-level rent freezes), they also don't have a good track record at the local level when it comes to housing.
I've been very involved in council-level politics where repeatedly the Greens members were aligning themselves with the right-wing members ("ratepayers rights"-type groups) when it came to delaying/blocking development permits, enforcing parking requirements, preventing/delaying rezoning, etc. They fundamentally don't understand the issue at all. All talk, no substance.
And that's before we get to the CFMEU matter, which I think was the final blow for them during the last election.
My guess is that the "leftist critique" isn't one of not wanting new houses built, but of not wanting extensive government subsidies and political energy to go to builders and other groups who will not solve the problem, a la our storied history with broadband subsidies.
This pitched debate may very well simply represent an attempt to forestall action by bogging efforts down in debate over what's effective or correct, of course. It's worked for any number of groups looking to forestall what seems like an obvious and inevitable solution: reducing lead exposure by banning its use in consumer products, reducing tobacco-related illness by making it difficult and more uncomfortable to partake, and, in our case, making housing affordable by letting prices fall.
It's a disturbing trend that extremely complex issues are framed as a 'symptom' of broad political leanings. At the very least, it's a distraction and disservice to their own good argument, when an otherwise-intelligent narrative constantly reverts back to the polarisation "it's mostly those Others, from the Other Side".
Just let arguments stand on their own merits. The minute an article includes the term "lefties" or "righties", it's gone wrong imo.
This is one of those extremely important points that we say every once in a while and then forget to emphasize. Opposing good ideas or supporting bad ideas because they somehow get tagged into weird ideological buckets along with completely unrelated issues is a big reason why our political system is so dysfunctional.
> resource allocation performed democratically instead of by markets
The economy is too complex to be planned in details and such attempts at control have failed again and again.
I think some people also miss that, crucially, the market is not an external force, it is just the aggregate of each individual's need, decision, and desires. SO in a way a working market is as free and democratic as can be.
I like to say the market is undefeated thoughout history.
You can add regulations or limitations that incentivize the market one way or another to achieve social goals, but these distortions add up. And when there are too many distortions in the market, it stops acting how you want it to act, and starts acting how it will. And usually, that means negative unintended consequences.
"there are lots of yuppies who want to defend their housing prices who might be liberal but I don't associate this position with leftism in any way"
People tend to call the Democrats the left, as they're at least somewhat leftward of the Republicans. It's at least easier for discussion purposes than speaking of the right and the other right.
Yeah, I get it. But we also use liberal and I think in this particular case its worth drawing the distinction between these two "camps" of the democratic party.
The meaning of liberal and conservative has shifted so much over time that the term is now useless. The original meaning of liberal was about not killing you neighbor if they were a different religion - from which we get freedom of religion. That slowly expanded to things like freedom for slaves and women voting.
You're describing classical liberalism. The meaning of the term liberalism in the US switched to social liberalism back in the great depression (unless specified with a qualifier). It has remained roughly constant for as long as most people on this site have been alive. Though I will grant that the policies social liberals support have changed since then.
https://en.m.wikipedia.org/wiki/Classical_liberalism https://en.m.wikipedia.org/wiki/Social_liberalism
This is Phil Ochs describing liberals in 1966
In every American community, you have varying shades of political opinion. One of the shadiest of these is the liberals. An outspoken group on many subjects. Ten degrees to the left of center in good times, ten degrees to the right of center if it affects them personally.
They haven't changed.
1966 is still modern. The liberals I'm describing go back much farther. The decleration of independence is perhaps their most famiuos work though even then things were changing
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No. Republicans believe in full privatization of schools, Social Security, and Medicare, in flat taxation, the abolition of the regulatory state, the replacement of government-provided services with cash vouchers, and policymaking devolved out to the states. Liberals generally commit to none of these beliefs.
I've gone out of my way here not to make value judgements; Republicans have coherent arguments for why all these policies are better. "Republicans who don't hate minorities" is not a good way to describe liberals, who make up the majority of the Democratic party, the "other" American party that opposes the Republicans.
> Liberals generally commit to none of these beliefs.
Liberals fucking love charter schools, 401ks, they voted against the Illinois progressive income tax (Biden won Illinois big when that got defeated). I could go on. You're so far off the scent.
They are usually also ok with LGBQT people, which is good. Realistically, I think liberals are just not particularly reflective about the economic realities our system creates. Americans are drowning in propaganda, of which the right wing sort which characterizes Trumpism is only the most obvious. Add on top of that that the 20th Century makes a pretty compelling case that leftism as imagined in that century isn't a going concern, its not really a sign of a major moral failing that one might be a "republican who isn't into cruelty."
Also, in fairness, there are a lot of republicans who aren't into cruelty too. Its just that the jerks are an important part of the current right coalition.
Excellent comment. I agree that not many leftists support the current housing system. Probably only some existing home owners are excited about how it works today - they may want home prices to stay high. I'm lucky to be a home owner but I also see that the current system is incredibly destructive, having not enough homes and very high home purchase prices is really hard on people. We should not have to spend so much of our income pursing a home.
What is it like living a life completely ignorant of reality?
If you'd like to learn, feel free to ask chatgpt on the leftish pushback against abundance. Or historical examples of leftists blocking housing projects. Or environmentalists prioritizing niche interests over those of the general community. There are many, many examples.
If the problem is in our midst, we must acknowledge it.
Local boards in blue cities (California in particular) have blocked new housing for decades using every tool at their disposal. Places that lean left have anomalous rent growth. Places that lean left approve fewer new houses. Places that lean left have anomalously high building costs. This is a matter of written record. Embarrassingly, the only US city to buck this trend is Austin, a city in red-Texas known for a recent influx of radicalized right wingers.
> yuppies who want to defend their housing prices
Yuppies, but definition, are young professionals. They don't own houses, they rent. They are the ones paying the high rental costs as neighborhoods gentrify. They want more housing. The 35+ home owning population is the one that blocks new housing.
> I don't associate this position with leftism in any way
The leftist - YIMBY conflict shows up on 3 fronts.
First, Leftists have issues with the free-market. They reject market-housing solutions as a way to create new housing.
Second, Leftists like Govts and regulation. YIMBY wants less regulation, so they can maximize for space and price. Regulated Govt built housing is both more expensive and worse than what free markets already provide.
Third, and the most important, is a subtle accusation: "Leftists act just as selfish as everyone else, once they are the ones in power". Having come from an ex-socialist country, I have a deeply rooted belief in this accusation. Not that leftists are worse people, but that people are people, and systems should work around their imperfections rather than having expectations of ideological virtue.
The anti-trust left is a nice way to point a sub-section of the left which uses regulation, social outrage and critiques of free-market as a way to get personally beneficial outcomes, at the expense of the wider population. I understand - #NotAllLeftists. YIMBY & abundance advocates themselves have left-sympathies. But the anti-trust left is a non-trivial number and the conversation must start from acknowledging that they exist.
You can just look at the empirical evidence. Where are homes being built? Primarily Texas, Florida, Nevada, Arizona. Where are they not being built? New York, California, Illinois.
Do with that information what you please.
Abundance YIMBYism has many shortcomings. It doesn't address the risk of gentrification and displacement, the slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities. Journalistic ideologues deserve little praise for dismantling the weakest counterarguments of their opponents while ignoring core criticisms.
Abundance YIMBYism in housing decreases gentrification. Gentrification happens when the only housing that is affordable is in low-income neighborhoods. If there is plenty of housing supply throughout a city, the demand for those low-income neighborhoods is lower.
Nothing in the Abundance agenda states that direct public housing is bad, per se. The argument is that what we need is more housing, and the only realistic way for that to happen is to make housing easier and cheaper to build, typically by easing zoning restrictions and other things like parking minimums that drive up costs.
These are ironically the weakest counterarguments to abundance housing. Rich people don't move to a city because of their love of 5 over 1 buildings. Otherwise, developers could just build them in rural Kansas and everyone would be happy. They move the jobs and culture, which doesn't change regardless of any new housing built. Making it easier to build privately owned housing also makes it easier to build publicly owned housing. Public housing projects are also delayed by permitting and environmental reviews and have to pay for inflated land prices and parking spaces.
Jobs and culture are indeed reasons for people to move to the city, but it’s odd to claim that housing types don’t factor into consumer demand. Because housing types do, developers are incentivized to build housing that is the most profitable (such as less dense and luxury housing) not housing that best serves the needs of low income people (as more expensive units make more money). At best we can only expect minor effects from deregulatory mechanisms.
Which brings us to public housing. The main obstacle to public housing is funding these projects. Reasonable deregulation of public housing projects makes sense, sure, even though that is not the main blocker.
But public housing deregulation is not the argument of abundance, it’s YIMBY deregulation. Its proponents claim that it’s market based supply/demand effects that need to be unleashed by deregulation to provide adequate housing. Because “abundance” holds that YIMBY deregulation is the solution - not public housing - it misdirects efforts to address housing issues faced by low income people.
What YIMBY deregulation do you view as problematic? YIMBYs aren't calling for more billionaire row towers and multifamily to single family townhouse conversions. They are calling for more apartment complexes, ADUs, and other utilitarian forms of housing.
New housing developments only gets branded as "luxury" because that's the way that housing is priced right now. It costs the city of San Francisco over $1 million to build a single affordable housing unit. Blindly throwing more money at the problem doesn't help. SF is spending $846 million on housing, over $1000 per resident. Despite this, homelessness is actually increasing. Increasing funding is something that should be prioritized after you made development as frictionless as possible. If public housing is cheaper and faster to build, more voters would be willing to support funding it.
I gave SF a lot of shit, but to be clear, they're the least problematic city in the Bay Area, as they at least allow some denser development.
> It doesn't address the risk of gentrification and displacement
This is a puzzling critique because it seems very much in the wheelhouse of "abundance YIMBYism" to advocate for cheaper housing--an argued byproduct of which is that fewer people are displaced. It probably changes the problem statement of gentrification since, if housing is abundant and displacement is low, there's not much to distinguish "gentrification" from just "investing in the neighborhood".
>the critical need for direct public housing to serve low-income communities
This isn't a problem caused by YIMBYism, nor one whose solutions are obstructed by it. We could by that reason malign it for not solving heart palpitations or cancer too.
This “abundance” ideology which aims to influence Democratic policy promotes YIMBYism to address housing shortages by deregulating construction. It’s this claimed benefit I’m criticizing. Public housing does address this issue, which is why I bring it up.
Similarly, gentrification is enabled by this narrow focus on YIMBYism. Upzoning increases land value. Developers build profitable market rate houses there. This increases prices in the neighborhood leading to gentrification. This in turn leads to displacement - a key phenomenon that this ideology purports to address.
My issue is not YIMBYism in particular but that it’s offered as a solution to these problems.
You are arguing as if buildling more make things worse, when in fact, this is not the case. The opposite of buildling more is building less. Building less will increase existing price a lot more on an existing neighborhood than building a new buildling will ever do.
When there's not enough housing for people to live in, people start competing on rent and bidding wars on purchases, this drives price very fast.
That's why you have to build more. To avoid the biggest issue which is a housing shortage.
Is that the ONLY solution? Of course not! Public housing is great. But the same things that prevent YIMBY policies is the same thing that prevents public housing to be built. When you advocate for more zoning to prevent new condos in your neighborhood, it's not just new condos at market price that will be prevented, it's a whole range of housing.
>When there's not enough housing for people to live in,
In the country I live in, our population is a shrinking. Quite literally. There would be fewer people today than last year, and will be fewer people next year than this year. Except...
"Upzoning increases land value. Developers build profitable market rate houses there"
Unless you are upzoning ONLY in low-income neighborhoods, this doesn't add up. The assumption is that upzoning makes development more attractive. But this would apply to the entire city, and would therefore increase housing supply outside those low-income neighborhoods as well, which actually reduces the propensity for displacement.
> Public housing
You can't have Vienna style public housing without having Vienna style zoning codes and building codes.
Most of the housing in Vienna would be illegal to build in like 99% of American cities.
Public housing construction typically has to follow the law as well, so how does it help in cities where increasing housing units is heavily restricted, and outright banned in 90%+ of the city? YIMBY upzoning is strictly necessary no matter what funder you want for development.
Market rate housing doesn't need to trickle down. Most NIMBY regulations focus on the prevention of building low-value housing. Let developers flood the market with small, high density units, and they'll be cheap right away.
Developers are incentivized to build whatever units are most profitable, not what lowest income people need. More expensive units make more money.
Besides that, land and construction are both limited resources that constrain developers ability to “flood the market with small, high density units.” For example in high-land-value urban areas, developers need to build expensive units to be able to make a profit.
Yes, developers are incentivized to build whatever units are most profitable, but the price per square foot is much higher for small units than for large units, so without regulations prohibiting high-density projects, you'll end up with far more units for a given amount of resources. Instead of building 20 units of 2,000 sq ft, if allowed a developer could instead build 40 units of 1,000 sq ft, for a similar cost, and sell them for less per unit but more per square foot. Without using any more land, foundation, or roofing, and only needing extra fixtures and interior walls, it would reduce the labor and materials needed per unit, while increasing the income.
It’s more than just extra fixtures and interior walls but bathrooms, kitchens, plumbing, and HVAC - some of the most expensive parts of a build. For example if a developer has 4,000 square foot of land, and it costs $1.6 million to build 4 units selling at $2.4 million total - vs costing $1.2 million to build a luxury unit selling at $2.2 million, they will build the single luxury unit. The overall price for the construction is lower, the price per square foot is lower, but they make more profit.
> It’s more than just extra fixtures and interior walls but bathrooms, kitchens, plumbing, and HVAC - some of the most expensive parts of a build.
That isn't necessarily saving anything. A 4000 square foot unit could very plausibly have four baths and HVAC zones, especially if it's a luxury unit.
Meanwhile not doing that is exactly the sort of thing the existing rules nefariously prohibit. Suppose you want to turn that 4000 square feet into eight studio units with a dorm-style shared kitchen and bathrooms. Now you've significantly lowered your construction costs while increasing the total you can sell for because you're offering eight units, so that becomes the most profitable thing as long as there are enough people who want lower rents more than space, except that hardly anywhere allows you to do it that way.
A developer in our example would still profit by offering a luxury unit with 3 bathrooms instead of 4. But you’re right that there will often be multiple baths and HVAC systems in a luxury unit - although electrical, plumbing, and fire suppression systems still scale up with the number of units.
And kitchens remain a problem. Your dorm-style kitchen layout is creative, but the problem with this idea is that there is very little demand for dorm-style housing. Developers are able to charge higher prices for more conventional layouts - where the demand is - which is what they will build even in the absence of regulation.
Markets can handle some things well but the inability to provide merit goods (like housing) is one of their shortcomings. Unfortunately we need policies with more scope and ambition than YIMBYism if we want to tackle society’s larger problems.
> A developer in our example would still profit by offering a luxury unit with 3 bathrooms instead of 4.
Would they though? Having one fewer bathroom would lower costs but also lower the value of the unit. Meanwhile it doesn't actually cost $400,000 to build one bathroom.
> Your dorm-style kitchen layout is creative, but the problem with this idea is that there is very little demand for dorm-style housing.
There is very little supply of dorm-style housing, because building it is banned. And it's banned because there is demand for it, especially when rents are high. Why would they bother to ban something nobody was going to do? If nobody wants it then there is no harm in getting rid of the ban because nobody will build it anyway, right?
> Developers are able to charge higher prices for more conventional layouts - where the demand is - which is what they will build even in the absence of regulation.
Let's suppose that's true in some cases. There is currently a lot of demand in some area for 4000 square foot units so that they're more profitable to build than four 1000 square foot units.
Then if you let them build 4000 square foot units, they do, and satisfy the demand for those units. At which point the price of those units comes down because the supply has increased. Which makes it more profitable to build smaller units going forward, because now that's where the unsatisfied demand remains -- in your example, the increase in supply of 4000 square foot units causes their price to fall from $2.2M to $1.9M while the four 1000 square foot units are still going for $2.4M and are now the more profitable alternative even if they cost more to build.
> Markets can handle some things well but the inability to provide merit goods (like housing) is one of their shortcomings. Unfortunately we need policies with more scope and ambition than YIMBYism if we want to tackle society’s larger problems.
The thing that I find suspicious is that if you actually want some specific thing, like more smaller units, there are obvious ways to make that happen. Just provide a tax credit for building smaller units, or a credit per-unit so that one 4000 sq ft unit gets you one credit and four 1000 sq ft units get you four credits each in the same amount. The result is going to be more smaller units than the market would otherwise demand, which is what you wanted, right?
But meanwhile people start proposing things like having the government not just build but actually operate rental properties, or constrain who is allowed to live in them, which tend to create nasty problems like "sorry, you make $1000/year more than the threshold for affordable housing so now there's a cliff where your rent goes up by $1000/month", or create a handful of housing projects that turn into an area of concentrated poverty while not actually providing enough housing for everyone who needs it and in particular not getting housing costs down for middle-income people.
And those policies strike me as attempts to disguise a desire to not solve the problem. They're token efforts to be able to claim that something is being done on paper so that housing costs can remain high in practice.
So I guess what I'm asking is, what are you actually proposing? And how is it better than some combination of "remove policies that inhibit construction" and "provide tax incentives to build more housing"?
This is exactly what the developers say. Low income housing, which is unaffordable even on middle class income, is only viable if heavily subsidized. So the tax payers have to pay the developer to take the guaranteed loss. And even then, 3000 rent on a low income studio apartment is only possible for low income people who have subsidies. So the tax payers pay the developers to build it, and then pay the tenants to rent, and people have the gall to refer to this as the “free market” solution.
If you wanna break it down by "systems" the most expensive part is the regulatory compliance you need to engage in before you start.
People shit on the healthcare industry for being written into law and they shit on the credit processors for taking a cut of every transaction but the degree to which various flavors of paper pushing engineers are required by law to be given a cut of every single creation, alteration and major repair of a structure is mind boggling.
And this racket is a large part of what puts the squeeze on low end projects.
If it takes me $50k of engineering to be granted a $100 permit to do another $50k of tree clearing and dirt work on a lot then whatever I build needs to make up for that. If not for BS compliance those numbers would be something like $5k, $100, $20k
All of this expense, levied upon literally every single project everywhere, all to prevent the 1/100 or 1/1000 case where someone does something (that they likely knew was) stupid and causes a runoff problem or whatever, that could likely be mitigated by the same costs after the fact where and when it happens.
And this is before you start discussing all the areas where industry and company lobbyists have got their clients inserted into the IBC at the expense of the public.
there are a ton of build code issues in the US that raise the cost of construction without substantionally improving benefits. As an example, I am in Europe right now, most apartment buildings here have single stair entry and smaller elevators, both of which are prevented by US building regs for bad reasons. Fixing these regs would expand the market for new construction at the low end (lower costs for marginal opportunities) and the high end (makes 4 unit condos feasable).
Western Democracies usually (always?) have planning laws that allow for democratic (ie for the benefit of the people) building plans. In short, we don't have to allow developers to choose.
We could equally levy pressure to improve quality.
In UK, house price inflation has well outstripped material and wage inflation, we should be getting exceptional housing that fits the need of the demos.
> the slow and unproven trickle-down effect of market-rate housing
Slow and unproven? Supply and demand is the most reliable law of economics. Cities like Austin that are building market rate housing are actively seeing affordability improve.
Furthermore, even if it wasn't sufficient, abundance YIMBYism would still be helpful and necessary.
> gentrification
Gentrification isn't actually a problem if it doesn't force lower income residents to leave. They wouldn't be forced to leave if their housing wasn't some of the only options for higher income people to inhabit
> gentrification displacement is not a thing
Studies show the same percent of people move out of neighborhoods regardless of whether or not the neighborhood is gentrified. They also show that those low-income people who stay in a gentrified neighborhood see their incomes rise. Those low-income people who are in a neighborhood that is not gentrified see their income go down.
Your intuitions are wrong following them is making the problems worse.
https://www.youtube.com/@justine-underhill
Your arguments are not backed up by anything.
> gentrification and displacement
These are not actual issues with regards to housing being too expensive. These are pet issues divorced from economics.
> the slow and unproven trickle-down effect of market-rate housing
This is absolutely proven in the data, and even a basic thought experiment using the pigeon hole principle will show that more houses means the prices drop of existing stock.
> critical need for direct public housing to serve low-income communities
Why is this a critical need? More housing being built could also mean more public housing, but removing zoning and land use regulations doesn't hurt this.
It seems you are more disappointed that your personal pet political issues are being ignored in favor of a market solution to house prices.
What it doesn’t address is the role of finance and the financial sector in explaining why things are the way they are.
It’s not just a missing detail it’s fatal to their entire argument.
Which isn’t an accident, since the goal of the “abundance movement” is to stop the actual progressive movements that want to take on concentrated financial power.
This is a bad-faith description of the abundance movement.
The central thesis of the abundance movement is this: Every time we make a regulation, we are making a tradeoff. In the case of housing, an example would be "zoning only for single family housing". It's trading off affordability for quieter neighborhoods. Another might be "public housing contracts must favor minority-owned contractors". It trades off affordability for the development of a disadvantaged constituency.
Over time, many of these such regulations accumulate. Environmental reviews. Impact studies. Public comment periods. And while every individual regulation might be well meaning, the totality of them creates market distortions that disincentivize or even utterly prevent the very thing we're trying to accomplish.
So, the abundance movement looks at these and says we need to think about these in terms of tradeoffs, and pare back the regulations that have bad tradeoffs. This is often derided by critics as deregulation which makes developers more profitable. While that might be a side effect, it's not the main reason. It's deregulation to remove market distortions that, in the case of housing, constrain supply and therefore drive up housing costs.
The abundance movement IS a bad faith movement. It’s entirely the creation of the donor/billionaire set and its rollout is designed to stop the Democratic Party from taking the obvious next step of tackling concentrated economic power, following the utter and abject failure of corporate centrism.
There’s literally no ambiguity here, the abundance summits feature obvious had faith actors like Andreesen.
This kind of thing has been going on for decades. It’s the same playbook as Third Way and New Dems and so on.
These people’s ideas led to the current political situation we’re in today. They don’t want to be held accountable for that.
So we get this Calvinball style collection of principles that change weekly but never seem to ever even consider doing something that Reid Hoffman and Mark Cuban and their friends don’t like.
This is a purely ad-hominem attack.
Ad-hominem is a great way to understand a group of people that are obviously full of shit and engaged in self-serving advocacy.
Unless you think this guy is actually interested in building more housing:
https://fortune.com/2022/08/13/atherton-california-housing-m...
Maybe I'm missing context but this would be the exact opposite of the Abundance agenda.
If your point is that Andreesen advocates for abundance policies, but then also opposes them in classic NIMBY fashion when it affects him, well, that's an indictment of Marc Andreesen, not Abundance mentality. In fact, your point inadvertently seems to say "Marc Andreesen is not Abundance enough!" since he is engaged in anti-Abundance activity in lobbying against multi-family housing.
It’s Andreesens all the way down.
The abundance movement is not a grassroots group of people, it’s a lab creation of billionaire/donor types. Andreesen is one of them, that’s the context for the link. Reid Hoffman is another.
These people want to find a way to distract from the appeal of progressive policies of the kind put forward by Lina Khan and others who actually attempt to directly take on the concentrated economic power that’s strangling normal people in this country. They’re the ones doing the strangling.
It’s propaganda, a PR project by oligarchs. It’s fundamentally done in bad faith and there’s absolutely nothing obligating me to take them at face value.
Nothing in your assertion addresses the actual merits of the abundance mindset as described in Klein and Thompson's book.
If you want to argue that Andreesen is co-opting or manipulating those ideas for his own ends, that's something else.
The abundance mindset as described in Klein and Thompson's book fails to address the actual problem that prevents abundance, as defined by them.
The problem that they've identified is real and obvious: people can't afford housing, things are increasingly precarious for the middle class, and so on.
The actual solution is that concentrations of market power have to be broken up, we are being strangled by monopolies and cartels, and the way we run the macro economy is in favor of the financial sector. We prioritize returns on large scale capital over absolutely everything else.
There's no way to address the actual problems without doing things differently. In order for regular people to win, some powerful people will have to lose, at least a little.
Those powerful people don't want this, so they're happy to fund Klein and Thompson and a slew of other think tanks and politicians to advance the narrative that there's some other way to do things. Mostly the usual tactic of "blame it on the hippies" that has been so effective for them since the 1990's and the Clinton administration.
Given all this context, there aren't really any merits to the argument of the book. It's the equivalent of someone arguing with you that better diet and exercise is the way to fix an open stab wound. Also they're the person that stabbed you.
Like diet and exercise are good ideas. But if I'm like hey what the fuck you're a murderer and you come back with something about how that's an ad-hominem, and also why are you disagreeing with the ideas that diet and exercise are good, I don't really need to engage with you on the merits of those arguments right this second.
What we need to do first is take the knife away.
> slow and unproven trickle-down effect of market-rate housing, or the critical need for direct public housing to serve low-income communities
Your claims are unsubstantiated. I've only ever seen vague critiques by anti-abundance commentators. If you think YIMBY is wrong, then be specific in your criticisms. There is nothing special about direct public housing. It is housing built by the govt. The govt gets caught between regulations, is slower, wasteful & pays higher wages to workers. It's market rate housing but worse in every way. Chicago [1] is contemporary proof that Govt. can't build housing.
On the other hand, YIMBY Austin [2] has seen slower rent growth despite rapid migration over the last decade.
> gentrification and displacement
You realize this is a home ownership problem right ?
YIMBY doesn't cause gentrification. It is a balm to reduce the pain of inevitable gentrification. A neighborhood gentrifies because increased economic opportunity draws new transplants in. If housing supply is limited, then existing residents are going to get priced out one way or another. As a neighborhood starts to gentrify, YIMBY redevelopment projects roll in & existing landowners see large windfalls. It's great if you own. Gentrification is only bad if you rent. Even then, YIMBY redevelopment projects increase housing supply, giving locals an option to move to home ownership and reduce the magnitude of rent spikes. It curbs the supply crunch.
Anti-abundance people don't have a coherent alternative other than rent control. Rent control has an unbeaten track record of failure in the western world. Either, prices diverge [3] and create a rental class system between new tenants and old residents. Or, they turn dilapidated like America's famous inner-city 'projects'.
There are 2 ways to look at it: the empathetic lens vs the pragmatic lens.
We've looked through the empathetic lens for the existing residents. But, from a pragmatic lens, why do they deserve to live exactly where they want to ? Yes, A city should provide sufficient housing to earning families within its boundaries. But, why should a person deserve to live on a specific block over another ? The existing renter had a choice to lock a spot down by buying it, and they didn't. Now, the renter is owed no such right. The newcomer and the old renter both have a valid claim to reside on the land, and rent control takes an unequal stance by favoring the older renter over the newcomer. Even in its best rendition, rent control is discriminatory. And rent control's best rendition lives in the same realm as Santa Claus or True Communism, called 'things that never happen'. At least YIMBYism buys time and opportunity for the older renter to figure out their next move.(opportunity to buy new housing, time because rents creep up slower)
[1] https://citythatworks.substack.com/p/construction-costs-for-...
[2] https://constructioncoverage.com/research/cities-with-the-la...
[3] https://www.theguardian.com/commentisfree/2025/jun/30/rents-...
> The govt gets caught between regulations, is slower, wasteful & pays higher wages to workers. Chicago [1] is contemporary proof that Govt. can't build housing.
This is overstated. Government can effective build public housing, many governments have succeeded in doing so. That article lists several issues with government housing in Chicago such as unstable funding and administrative overhead. The choice is between YIMBY policy regulatory changes to nudge housing supply or policy changes to improve public housing. And improving, expanding, and financing public housing is the structural solution to the problem not a bandaid. For example, market can never house the homeless because they don’t have money to pay for a house, even in a completely efficient market where housing is sold at cost. YIMBY effects are at best small, slow, and don’t significantly benefit the populations who need housing most.
What does it mean that “so much of what we read is […] barely reported”?
That the people writing it do very little of their own reporting. "Reporting" isn't writing or thinking; it's the act of collecting external facts. Calling a primary source on the phone is reporting; traveling to a location and observing events is reporting. Synthesizing existing facts and reporting is not reporting. It's still journalism! Reporting is a specific practice within journalism.
It's copy-pasted from Twitter, or it's explicitly a press release from a company with minor rewording. There is no digging for the truth because the news can't afford any labor
This has nothing to do with journalism. Both sides of this argument are advocates for points of view.
I agree - journalism isn't that hard - Derek Thompson does a good job here. There's lots of good journalism out there.
Still, probably more expensive that having ai write something, and it's not politically on point. Agendas aren't well-served by attempts to describe the truth!
Yes, and I found Derek Thompson and Ezra Klein to be very credible on Lex Fridman:
Ezra Klein and Derek Thompson: Politics, Trump, AOC, Elon & DOGE - https://www.youtube.com/watch?v=DTPSeeKokdo
I like when the right and left can actually talk to each other -- solutions are more likely to emerge that way.
They had a meta-discussion of the fact that Fridman has been "coded" by the left (Thompson and Klein firmly representing the left).
I get that, because Fridman can be so uncritical that it can rise to the level of shilling.
But I also find it curious that many on the left won't sit for 3 hours with him. In contrast, Thompson and Klein sat for 3 hours, which shows me that they have something to say which stands up to scrutiny.
They have something to say that doesn't have to be carefully boxed into 30 or 60 minutes of talking points.
---
Related: even though Fridman can be annoyingly uncritical, I think this also serves the purpose of journalism. Because he gets the primary sources to talk freely.
For example, IMO this part an interview with Demis Hassabis is revealing. He asks if they're worried they will run out of high quality training data:
https://youtu.be/-HzgcbRXUK8?t=3931
From my perspective, Hassabis gives a mealy-mouthed answer about generating synthetic data of the right distribution, and then they change the subject. I would bet there's a lot more to it than that. If they had a good angle of attack, I feel like he'd be more excited to talk about it, and say something more substantive.
I guess you can argue that he's being cagey to not reveal anything to competition, but it seems like a real point of concern to me.
The rest of the interview is talking about AGI time frames and similar sales talk. Whereas my takeaway is that there's significant worry that LLMs are limited by training data, because they interpolate from it (rather than extrapolating), and are inefficient at using it.
Fridman is on the other end of the spectrum I'm describing.
You said heavily processed and barely-reported
If you want to say Fridman's content is "barely-reported", i.e. he barely does journalism, then I won't really argue.
But the interviews are NOT heavily processed, and that's precisely why some on the left won't sit with him. (But not Thompson and Klein, because they actually have something to say.)
So ironically, it kinda balances out. Being credulous attracts guests who talk almost as if they are off the record
I'm not making a value judgement. There are analysts and opinion writers I enjoy reading and get a lot of value from. But hosting a podcast interview with someone is basically the opposite of shoe-leather reporting. I guess if you did "stitch incoming" every couple minutes and cut to Fridman calling someone else to have conversations with other sources about whatever claim his primary guest just made, you'd be getting closer.
My point is: some of the prevailing take on HN about journalism probably comes from the fact that we tend to pay much more attention to the Fridmans and much less to shoe-leather reporters.
That's all!
Much later: a funny thing I could point out here is that the same thing I'm saying about Fridman also applies to Ezra Klein, Thompson's "Abundance" co-author --- I like Klein a lot!
I think there's journalistic value to showing a raw conversation on a podcast. It's closer to the primary source than calling them on the phone and writing down parts of the conversation.
If the interviewer is a bit credulous, then we can take that into account.
I don't need other opinions to be inserted in the same show, because it's not the only show I watch. I get different viewpoints from others. (And Klein's show happens to be a primary example of that)
Journalism is about presenting a topic, not about presenting a person. I don’t care about Elon Musk as a person. I don’t care about his opinions on lawn care or cooking eggs. But in a story about self driving car technology I want to hear his input and the input of Ford and GM and Waymo and Uber and suppliers and academics and regulators and users. Compiling all those sources and presenting a narrative on the topic of self driving cars is journalism.
Giving one person an uncritical platform for three hours isn’t journalism. For that to resemble journalism you would have to squint so hard your eyes would be shut.
This is a great point and well made.
I would take it a step further and argue that it's not so much a topic as facts. Like objectively measurable things about the real world.
There's always going to be some limit to what we can actually measure and how much time we have to do it, but there's no reason not to try to get close to what we we're capable of doing.
I would argue that there are very few people who are actually authorities on a subject worth uncritically transcribing for 3 hours on a subject. Elon Musk is an easy target, the only thing he's an expert on is being Elon Musk, which isn't a very interesting topic.
What he has to say on any given subject does sometimes matter, because some people believe what he says, so it's useful for me to know some of it, but it's more useful to know what the actual facts are.
I don't want reporters who write an article that says "well I talked to one side and they said it's raining and I talked to the other side and they said it was hailing", I want a reporter who goes out and checks what the weather actually is.
Yes, absolutely. Journalism is fundamentally a fact or truth seeking exercise. I do still think there is room for presenting factually incorrect opinions so they can then be challenged and disproved. So I will meet you in the middle and say that journalism is the factual presentation of a topic. One of those facts could be that an influential person believes or says things that are incorrect.
Wikipedia's definition seems excellent to me:
> Journalism is the production and distribution of reports on the interaction of events, facts, ideas, and people that are the "news of the day" and that informs society to at least some degree of accuracy.
That "some degree" is an important concession. Nobody will be right all the time but the objective of journalism is to discover and present the truth of a topic.
I never said there was "no journalistic value" to anything.
You are touting "call up the authorities" and shitting sitting down and talking face to face with authorities, which reads like a value judgement.
> sitting down and talking face to face with authorities
I think the issue is the number of authorities. One isn’t enough.
Not the authorities. The sources.
Someone "interviewing" a pundit by letting them speak for 3 hours contributes very little to our understanding of reality. We might understand a bit more about the pundit's opinions, which can be entertaining, and could theoretically be valuable, but rarely is.
Someone actually looking for facts about reality would be far more useful and valuable to society. Not that we reward that sort of thing.
Letting someone talk for 3 hours is good information. It contributes a lot. Just because it's not distilled and you're not told what to think about doesn't make it not valuable.
> ...and that's precisely why some on the left won't sit with him. (But not Thompson and Klein, because they actually have something to say.)
Im sorry but what evidence do you have to support such a claim?
>We're often so down on journalism on HN, and I believe a big part of that is we tend to read so much opinion and analysis and so little basic reporting.
The average article posted to HN is actually of far higher quality than the average newspaper article. Sit down and read many of the “big names” cover to cover. You’ll cry. Contrast them with the same newspaper twenty years ago and you’ll lose hope entirely.
I have a hypothesis. In the 2000s it became more common to Google things instead of asking people. For years, this worked out well, but today the quality of Google (and websites!) is terrible. Today we have an entire generation of journalists that know to do their research with the internet, and surprise, when your inputs are garbage, so are the outputs. The inputs are also homogenized content slop, so there aren’t any real different perspectives. Take any topic, say road construction or a controversial bill or new technology, and read articles about it twenty years ago and now. Twenty years ago you might see some really off the wall ideas - but now, all the articles will be the same. Left, right, whatever, nobody really has any new perspectives, they just have their specific bias projected onto the same universal set of 5 thoughts. If you’ve read one, you’ve read them all.
Back to this article, it seems well written and I have no bones to pick - but what the author did (pick up the phone and call people) would have been entirely unremarkable not long ago. The fact that we’re remarking on it now is an indication of how deeply fucked the profession is.
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You can be aligned with a group who benefits from the same position without being associated with that group or lobbying FOR that group i.e. the KKK members probably want cheaper electricity and I want cheaper electricity but that doesn't mean when I lobby for it, I'm lobbying for the KKK.
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Please stop commenting like this here. Rebut the substance of the piece or don't, but whatever weird grievance you have with its author belongs somewhere other than HN.
I'm curious how we can distinguish between someone lobbying hard for the homebuilding industry and someone lobbying hard for people who need homes?
It doesn't have to be a competition. If you're having trouble deciphering which is which, their interests might just be aligned.
On this thread you can tell if somebody is lobbying hard for people who need homes because they bring up realpage or public housing and get BURIED in downvotes: https://news.ycombinator.com/item?id=44750927
The only solution that will make a difference, apparently, is relieving the private sector of onerous regulations which impact their profit margins shrug.
I thought neoliberalism was going out of fashion but apparently not.
And you obviously already got your big expensive house and just want number to go up...
Just flag comments that violate the guidelines, don't retaliate with your own violations.
I just couldn't keep reading with the constant "antitrust left" being refered to on every sentence.
The issue, is that for me, the reader, it framed the piece as the author seemingly positioning themselves as the "the other side", the one that knows best and isn't those "antitrust left". It felt like it was creating a strawman and was engaging in tribal signaling.
And when you consider the rest of the piece was them claiming they called the sources, and that the sources said that the "antitrust left" had misquoted them and misrepresented their findings, but the author somehow is this unbiased truth, and definitely really for real called the the sources and didn't at all misconstrue or anything, no they wouldn't do that, unlike the "antitrust left".
I'm about as far left as you can be, as a syndicalist anarchist, and I definitely perceived a bit of what you described. But I'm not super worried about it because he didn't say "the left", but rather a specific lefty position.
But also, the left isn't uniform on housing policy. Some folks want anti trust and limited capital ownership. Some folks want to de commodify housing. Some folks want all housing to be government built and owned. The left is a very diverse place (and the joke is no one hates leftists more than other leftists).
The people the article quoted as "left" like Stoller are really not left, and the whole anti-left felt more like a unnecessary strawman label and definite turn off for me reading it. I would characterize Stoller as an independent anti-monopolist - not really on the right or left spectrum at all politically. Unless the right is now pro-monopoly.
He’s specifically talking about Zephyr Teachout. Her work is specifically in anti-monopoly stuff.
I'm confused, that name does not seem to occur in the article. Are you talking about some other context
Zephyr Teachout wrote an early article critiquing Abundance, the book by Derek Thompson and Ezra Klein. She appeared on Ezra's podcast and (IMHO) did not appear to have thought very deeply about the problem of housing affordability; instead defaulting to "monopoly in housing construction" as the problem. Stoller and Musharbash are re-iterating the position that had been staked out by Zephyr Teachout in March.
> Let’s assume that reforming rules on setbacks, parking, single-family zoning, and local input would achieve what they desire (the evidence is not straightforward; cities that have these reforms have lower costs, but they are rising at the same rate as in other cities). It would still seem relatively small-bore as a novel solution: Half of the 10 biggest cities in America—many in Texas—already have a zoning and procedural regime fairly close to what Klein and Thompson want. Are they simply arguing that Dems embracing Texas zoning approaches would transform national politics? That can’t be it.
https://washingtonmonthly.com/2025/03/23/an-abundance-of-amb...
Much of the criticism of Abundance from prominent pundits on The Left (including Teachout and Nathan Robinson) has been along the lines of "the actual problem is corporate monopoly" rather than zoning. (Or maybe: "zoning is an easy problem to fix and a distraction from the real problem of corporate monopoly".)
Yes, Teachout is one of the most prominent anti-monopoly advocates (along with Tim Wu). She wrote one of the first critical reviews of Abundance. She was then invited onto Klein's show to discuss the topic candidly with critics. Her positions are not "her's" but of a large section of the left who wants to blame the housing crisis on corporations rather than on cartel-like supply effects pushed by homeowner groups.
Her review: https://washingtonmonthly.com/2025/03/23/an-abundance-of-amb...
Discussion with Teachout: https://youtu.be/Ib1wzwbL7Is
Then why even bother calling it "left" at this point? Just say they're anti-monopoly. Is there really nobody on the right who are also anti-monopoly?
Presumably because anti monopoly right is much less common? Or because the anti monopoly right is concerned with different aspects of monopoly?
If someone said they were anti monopoly, that the government should do something to prevent businesses from operating like that, I'd never expect them to be from the right to be honest.
> If someone said they were anti monopoly, that the government should do something to prevent businesses from operating like that, I'd never expect them to be from the right to be honest.
So consider several perspectives:
a. The government should be in charge of, or at least heavily involved in, planning and organizing most resources in a country.
b. The market is a good way of solving most problems, and it works best if you just leave it alone, enforcing only very minimal rules (like property ownership, contracts, and such).
c. The market can be a good way of solving many problems, if it's regulated so that it has the properties you want.
Now consider other questions: Should abortion or pornography be legal / easily available? Should we invest in a large military? Should the government actively support "diversity" programs? Should gay marriage be allowed? How should the government relate to transgender people?
There are LOTS of people who believe in c as a principle, but have very non-"lefty" opinions on the other questions. Loads of people who consider themselves "on the right" think that everyone "on the left" actually believes a, not c; and loads of people who consider themselves "on the left" think that everyone "on the right" actually believes b, not c.
My sense is actually that the reason he talks that way is to make sure that people who consider themselves "on the left" don't mistake him for being someone "on the right" (and therefore in camp b), and immediately dismiss his claims.
>My sense is actually that the reason he talks that way is to make sure that people who consider themselves "on the left" don't mistake him for being someone "on the right"
If so he has sorely missed the mark. I pretty heavily associate the phrasing "the $X left" with disengenuous right wing pundits. Knowing nothing else about the author, seeing that pop up repeatedly doesn't merely suggest that he's on the "right", but that he's writing the piece with a politically motivated axe to grind.
> My sense is actually that the reason he talks that way is to make sure that people who consider themselves "on the left" don't mistake him for being someone "on the right" (and therefore in camp b), and immediately dismiss his claims.
This is a tad naive I think. "antitrust left" is also to useful term to use to signal to the billionaire class of Democratic party that you are not their enemy. If the author actually agreed with many of the antitrust group's positions and housing policy was one of the few exceptions they disagreed on, they would shy away from using the term. The only reason you would use that term is because you want to bring disrepute to their entire platform.
These abundance folks appear to be the only hope the billionaire Democrats have after having sunk so low as to direct their media assets to support Cuomo and to pour bucketloads money into the coffers of the corrupt disgraced governor in order prevent those "wacky socialists" to gain any more traction.
Since the authors are arguing for removing a lot of current housing regulation, I have a hard time seeing how "the billionaire class of the Democratic Party" would consider them their enemy -- unless, of course they're mistaken for people in class b.
>Since the authors are arguing for removing a lot of current housing regulation
Human beings like to know if the person they're reading is on their side before they take the time to read a long ass article to make sure they are in fact on their side, especially if they're billionaires and think they don't have the time to read long ass articles about housing policy unless they think it's going to an extremely useful to them beforehand. That's the whole point of giving that signal literally in the intro paragraph.
Tbh classification that makes most sense is wealth level.
Ultra rich and very rich and rich and upper middle class and ..
Because the underlying beliefs of a 'left' anti-monopolist and a 'right' anti-monopolist are likely very different, and similarly their proposed solutions and view of an ideal society will also diverge significantly?
---
Also, it should be noted that we lack sufficiently concise but specific terms to use instead, and because alternative terms that are used are relative, and open to interpretation.
e.g.:
Many political commentators currently use the term "populist" to describe someone who's somewhat divergent from the capitalist political mainstream (and in US terms, I'd include the current Democrat establishment and traditional non-MAGA Republicans in this group). But when the term is applied to people as diverse as Corbyn, Sanders, and AOC on the one side, and Orban, Farage, and Trump on the other, it's nonsensical without much more explanation.
> Because the underlying beliefs of a 'left' anti-monopolist and a 'right' anti-monopolist are likely very different, and similarly their proposed solutions...?
Just curious, how "left" and "right" anti-monopolist solutions might be different? I mean, naturally some "left anti-monopolist" people might be in favor of governments taking over industries, but presumably that's not what most of the people in question are advocating at the moment.
> But when the term [populist] is applied to people as diverse as Corbyn, Sanders, and AOC on the one side, and Orban, Farage, and Trump on the other, it's nonsensical without much more explanation.
I don't think so. It's essentially an accusation that they haven't thought through the hard issues: they're saying "We're going to achieve X", when in fact X is simply not possible given the current state of play (or perhaps, not possible without significant negative consequences, like erosion of human rights or setting up an economic or ecological disaster further down the road).
Boris Johnson's promise to conservatives that they'd be able to "make a deal" which allowed them to trade freely with Europe while not accepting immigrants from Europe was just a fantasy. A lot of populist "progressive" politicians make similar kinds of promises.
>Just curious, how "left" and "right" anti-monopolist solutions might be different?
Regulating monopolies out of existence vs deregulating them out of existence.
Both approaches have obvious situations they fail in that their peddlers are careful to frame the discussion to avoid.
Right anti-monopolistic policy: tariffs
Left anti-monopolistic policy: destroy Musk via the press/court system.
It can just be an empirical question, right?
> I don't think so. It's essentially an accusation that they haven't thought through the hard issues...
...which itself is nosensical as a generic label, without considering policies individually.
Virtually all politicians say things to help them get elected which are somewhere on a spectrum from 'a vision for the future that is unlikely to be delivered' to 'outright lie'. Of course, on the one hand, we want leaders with a positive vision for the future, which means speaking about possibilities which aren't yet realised, but when even leaders as sensible/stodgy as Starmer/Reeves are doing it ("it's all about growth"... then deliver virtually no policies to meaningfully drive growth) you can see where the growing mistrust of politicians comes from.
I'd characterise "populist" more as "willing to challenge the status quo" - where the status quo in this case is boring centerist politics that rarely/never delivers exciting or meaningful change, is more or less (depending on the country) in the pocket of big business and donors, and which has overseen a progressive worsening of financial inequality and funadamental justice over decades. Which is why the establishment are threatened and use "populist" as an insult, while "populists" are growing their support, be they on the left or right - because people are crying out for something different, even if it comes with potential downsides.
It's a shame to let two words color your opinion on an entire piece like that; I found it to be really compelling.
Your last paragraph is a bit confusing; is it your position that Derek's lying? Which quote did you think was inaccurate? Or are you specifically concerned with his rhetoric?
Two words that were repeated at least a half dozen times and used as the framing for the article. I literally went and looked at past articles to see how much this framing was used (and it wasn't) because when you use this framing you are literally appealing to tribalism and usually that comes with a LOT of other baggage.
Yes, that's why I commented, as a kind of feedback, the piece could be so much better with a very small tweak. Replace "antitrust-left" with the name of the exact handful of people whose book/article/stance you are refuting.
Yeah this article treats it like an either/or situation where monopoly's somehow make it so regulations aren't the issue instead of what most of the monopoly takes say which is that monopoly builders make the situation worse and combine with the other problems.
There is a specific group of people, matt stoller being the primary leader in the media, who are the "anti trust left". There is another specific group of people who are "abundance liberals" (dereck thompson and ezra klein being main media leaders) and there is an active competition inside the democratic/left of center politico-academic-policy-legal-media blob over prioritization of laypeoples attention and allegiance/belief which is in fact a finite resource and relatively zero sum between the two camps.
I sense the labelling is a tell of sorts. As to the critique, I think the focus on homebuilder corporate profits leaves out important parts of the ecosystem. As example: Observing the only profitablity of Toys R Us as it collapsed would mislead you as to the very profitable exploit that KKR and Bain executed.
Its a great article though, lots of facts to ponder. Would love a view of the next layer up into financial arrangements in those Texas housing markets.
I watched an interview with both the authors. They read as both left leaning but self critical of the regulations the left has put in place. It seemed like this leftist identity is part of the story so maybe that is why it is mentioned so much.
https://youtu.be/D9wga7S3nAw?si=mZT3yhUG_z2DKref
The abundance vs anti abundance schism is internal on the left wing side of politics.
The author of this article was also one of the authors of the titular Abundance book which named the movement, so he’s not positioning himself as the other side of the “anti trust left”, he quite literally is the other side that that group is fighting with
I mean, the article is responding specifically to a particular ideology... the antitrust left, so it makes sense.
It all makes sense when you take "abundance liberalism" for what it actually is: a rebranding of neoliberalism in support of establishment democrats. Its main goal is not to provide the democratic party with a new direction, but to defend the status quo against the populist left, incarnated by the likes of AOC and Mamdani.
It makes sense then, that they'd spend more time attacking the left than the right, as they realize where the existential threat to the current democratic party lies. Personally, I think it's good that they're afraid.
The Abundance movement is decidedly not pushing for the status quo. They are pushing for removing a good number of regulations on home building and zoning.
That is an active change
You misread my comment, I meant the status quo of the current democratic party leadership.
Whatever deregulation "abundance liberalism" pushes for, it will immediately be killed off or undone by the people that benefitted from those regulations. The democratic party is plagued by private interests (almost as much as the republicans), who very much do not want to see homes getting cheaper.
The establishment, through its neoliberalist direction, has shown that it has either no interest or is completely powerless to curb the growing inequalities and societal issues stemming from them. Only a fool would fall for it again, because it is rebranded from "neoliberalism" to "abundance liberalism". "Deregulation" has been the chief word in politics for 50 years, what makes you think it will lead to somthing any different this time?
Do you think this specific criticism of the “populist left” by the “abundance liberals” is valid though?
No, this guy (the writer of the article) has no idea what he’s talking about. I say this as someone isn’t even on the left.
He sets a false dichotomy to protect himself from criticism. Zoning/building codes being too strict and monopolies existing in that market aren’t incompatible.
It’s worth noting that there’s a lot of money behind this abundance movement or whatever, so that’s something to take into account when reading this stuff.
Truthfully, I don't. IMHO, abundance liberalism has a blind spot when it comes to the power of money in modern politics. We didn't stumble into a situation where buying a house requires an entire lifetime of work out of sheer bad luck. Some private interests greatly benefit from this situation and have enough power to keep things from changing.
Until we address this, and the abundance crowd doesn't want to, all of this is pointless bickering.
Have you read the book? A large portion of it is dedicated to how we got here.
Nimbyism and people’s desire to keep their property value high is part of it. The levers that have been used to make those values high include a ton of regulation that makes it impossible to build start ups homes even if you were a perfectly moral actor seeking to generate exactly 0 profit.
> until we address all of this
Address what? I was convinced by Ezra and Derek because they constantly show real evidence as the opposing side keeps bringing vibes.
What are your actual, concrete issues that you think the abundance crowd is not addressing and what are your specific policy positions that you think need to be implemented first?
> people’s desire to keep their property value high is part of it.
Yes, exactly, and what are Klein and Thompson proposing to fix this? Fuck all. They only write about curing the symptoms of this crisis while telling us to ignore the root cause of it all: housing is now a very popular investment vehicle, used by many powerful private interests who absolutely wouldn't want to see their portfolios halve in values.
How are we to believe that the Democratic establishment, lead by the same old people, backed by the same old wealthy donors, will now be able to make a stand against the very people that put us in this situation in the first place, and are now funding the politicians and "thinkers" behind this movement?
Abundance liberalism is nothing but a rebranding of neoliberalism in a desperate attempt to astroturf a renewed interest in the failing democratic party. It is running away from any reform that would be critical to capital, hence why they dispense so much vitriol on the progressives and almost none on the right.
tldr: abundance does not address money in politics because it is birthed from it, and will therefore never be able to fix the housing crisis because its existence is convenient to capital.
What they proposed is that we reduce regulations strangling the building of housing. The sheer quantity of regulation being the problem. We can have some for things we really care about, but we need to value actually building housing at something other than at the bottom of the priority list.
If you want a real world example of policies under this agenda that have now been put into place, look at the California budget passed under Newsom a month ago under the section literally titled “Advancing an Abundance Agenda”
https://www.gov.ca.gov/2025/06/30/governor-newsom-signs-into...
> It is running away from any reform that would be critical to capital, hence why they dispense so much vitriol on the progressives and almost none on the right.
It has vitriol to the type of progressive who crows about if you scratch a liberal a fascist bleeds. The default for the right is that they are bad, the type of discussions like the one in the article this thread is about are internal left infighting, not intended for the general public.
Also I will quibble on you that it’s not a reform to capital. Saying everyone gets rich from the benefits of capitalism, by structural design, is a reform from our current “git gud” increasingly laissez faire approach.
If you’re one of those folks whose arguing for abolishing capitalism entirely, I agree with your end goal but I think we’re a century or two of progress at reducing scarcity away from implementing that level of reform
Why do I see so many critiques of the abundance movement based on factional motives and ad hominem, and so little critique of the arguments they make?
If progressives want to expand government, government needs to be effective. Abundance liberalism is about learning from the mistakes of the past and making government better able to achieve to goals both liberals and progressives want.
If we're talking about factional infighting, leftists are "afraid" the neoliberals will offer a compelling path forward instead of pivoting to socialism, so they resist arguments that would otherwise be beneficial to their political goals.
Excessive regulation is 90% of it.
Here's how a rational market works. If I build an apartment complex, eventually those apartments will get older and more affordable. And even before that upper middle class folks will move in, freeing up their previous homes.
But that's not how many in local governments see it. So you have affordable housing quotas on new developments.
You have developers building units for the homeless at 600k each. https://abc7news.com/post/new-high-rise-building-house-skid-...
Affordable housing vouchers, section 8, etc, become a dystopian nightmare.
11 year waiting list. https://laist.com/news/section-8-waiting-list
The problem is twofold, first it's too difficult to build homes. In California you can literally just claim a new highrise will block your sunlight and make you sad. That's enough to delay a construction.
Parking requirements ensure space that could be occupied by people is instead reserved for vehicles. Plus the parking structure itself drives up the cost to build, 30% of your construction cost isn't unreasonable.
On a macro level, many cities should of fixed their issues with inadequate housing construction decades ago.
On a personal level, you need to go where you can afford.
After about 4 generations of living in LA about half my family has left. It's more than possible to make it off a middle class salary, but you need to make that choice.
If you stay in an unaffordable city you can't wait around waiting for politicians to fix it.
> Here's how a rational market works.
Might regulations be the result of these "rational markets"? After all, if I invest a lot of money to build apartments, I might want to protect that investment by lobbying for regulations to make it harder for competitors, increasing the value of my investment. Or if I buy an apartment, I might want to prevent others from ruining my view, prevent noise, etc. All completely rational.
I think this is the thing these types of arguments miss. Regulations are the result of another type of market, the vote market. That's the whole point, to counteract hidden failures of the market with another feedback mechanism.
For what it's worth, imho Thompson presents a strawman argument about oligopolies to avoid the real critiques. He even kinda contradicts himself at the end because it's convenient for his argument.
It's never really about oligopolies writ large, it's about the players in the local decision in the moment (which is all that matters) and who profits at whose expense with what consequences.
What is the strawman
> It's never really about oligopolies writ large…
Then why is the anti abundance crowd crowing about how it’s about oligopolies and monopolies?
Whether it is or isn't seems immaterial if you're of the opinion that government should step in to solve issues where the market has proved ineffective.
If it's the case that market participants have an imperative to convince the government to screw everyone else over: a solution preventing the government from being convinced by small petty nonsense seems remarkably simple, relative to the other kinds of policy challenges that exist.
For years in Washington DC there was one single crank who went to every community engagement meeting and prevented hundreds of units of housing from getting built.
I’ll be so interested to see what happens to this kind of thing.
I feel like we saw the absurd version of it over the past decade, where society at large had acted as though highly online reactionaries are quality signals of an underlying current.
It seems as though market share in that model is failing. I predict the pendulum will swing the other way across the board, and loud minorities in in-person forums will be given less credence… for good (by my estimation in this case) and bad.
Perhaps they have not been given the credence that you assume. It is typically not the NIMBY complainers who have the capacity to hire powerful experts to argue their cases in Councils and courtrooms ad nauseam. That is heavily weighted towards the developer side. I say that having worked for such developers, to further their cases in great detail.
Factors like failing or under-capacity infrastructure are coming to the fore a lot more in recent years. I've been in land development for about 25 years, and an increasingly common theme in my region is that a landowner wants a new suburb, but is not willing to upgrade all the necessary pipes and roads in order to not overwhelm existing upstream/downstream systems, and conversely the public are literally not able to subsidise that for them - public money is almost always stretched very thin already.
These people were only ever given credence as a pretext for whatever the entrenched interests wanted to do in the first place.
Every avenue of life has it’s weirdoes, but why have we as a society decided a single weirdo can stop a hundred homes from being built?
I don’t think a decision was made, we just fell down the slippery slope to Vetocracy.
It requires active energy to keep a thing alive and we haven’t been fighting hard for building things.
> Excessive regulation is 90% of it.
Housing crisis is observed in almost all what is called "first world" (europe, japan, usa). I believe that 90% of the issue is more global than a regulation.
Japan doesn't have a housing crisis. I'm in a great location in Tokyo, the rent is under $750/month, and it's been the same for the decade+ I've been in this specific place.
If there's a problem, it's too many empty homes in aging rural areas. Cities are doing just fine, even with a growing population in Tokyo.
It didn't. But it's entering one now.
New apartment prices in Tokyo are double what they were a few years ago. [1] The reason is foreign investors buying up loads of properties and sitting on them or turning them into AirBNBs. Locals can't afford them because wages aren't increasing. The concept of buying a property to resell it also isn't a thing amongst locals, so it's clueless rich people and corporations buying up properties and thinking they can flip them, which won't be happening any time soon.
But after a few years of squeezing, locals may have no choice but to pay their entire paycheck to foreign investors. Though thankfully the government is planning to take steps to potentially outlaw foreign buyers. If we're lucky, and some parties get their way, they might just strip the properties from them. If you're not living here, you have no business owning dozens of homes.
[1] https://www.nikkei.com/article/DGXZQOUC183D80Y4A110C2000000/
My shallow experience of Japan tells me that if there's one country that can regulate the shit of the airbnb problem, it's this one. We're so used in the west to see properties as an asset that only appreciates that we've lost sight of what homes are meant to be. Meanwhile the whole Mediterranean coast is being bought by foreigners with the help of greedy local fucks. I've been told the Portuguese have it much worse even.
Nothing vents off like a bit of class hate, doesnt it. Locals from your description act legally within the limits of the law, if you dont like situation change laws, thats the way for a change.
Everybody maximizes their profit and thinks first and foremost about themselves and only then about the rest. Case point - a better half of this forum works/worked for faangs and their variants who destroy privacy and more of whole mankind for the sake of profit for themselves, and even pat themselves in the back how effectively they helped the 'the goal'.
It's my class that I'm blaming.
> if you dont like situation change laws, thats the way for a change
Which is done by protesting and advocating for it. Not being in a "that's the way things are" attitude.
> Everybody maximizes their profit and thinks first and foremost about themselves and only then about the rest.
What a sad way to see life. It is so easy to find countless examples of people doing exactly not that. American individualism really got to your brain.
I see a difference in-between selling your property at current market rate and having a business which relies on destroying the housing supply to make profit. I don't work for companies who "destroy privacy and more" even though it would be in my interest, many of us are not pure profit-maximizers.
> it's clueless rich people and corporations buying up properties and thinking they can flip them
so the original owner got a nice priced deal out of the sale. Then, when said clueless rich person decides to sell in the future due to being unable to hold on to it any more, they make a loss (which is a gain for that future buyer, whoever they are).
> after a few years of squeezing, locals may have no choice but to pay their entire paycheck to foreign investors
why the squeeze? If the airBNB is being occupied, then it simply means the price for the rental was correct, and it was artificially low before (due to the demand not being met for short term stays).
An AirBNB can be occupied for 2 days a week and make more than typical rent.
People who see homes as a mere unit of value meant to be priced on a global scale, and not something people should be living in, are simply inhuman. People in cities around the world are getting fed up with it, with justified protests and even riots happening.
Rentseeking has no limit. Unimaginably rich corporations can buy up every property and leave almost everyone homeless. They can take 90% of the paychecks of everyone else. And they'll say "well prices were artificially low before." No. Now they're artificially high. People in desperate situations pay more and take out debt because they have no other reasonable choice.
The global issue is that elected representatives are becoming weaker.
The idea that a city hall would need to organize some sort of public meeting before approving a construction project is a fairly new one. The city council is elected to represent the people. If they need "community input" why are they even here? (Nevermind the obvious problem with such participatory process - sane and normal people can't participate in every local government decision unless it's their job. Hence why we have representative democracy.)
If you told someone in the 1980s that the British parliament couldn't impose its will on QUANGOs and local governments to build a rail line, they'd look at you as if you were insane. Parliament's power is supposed to be absolute. Yet that's what's happening with HS2.
"Sane and normal people can't participate in every local government decision unless it's their job. Hence why we have representative democracy".
While true, times have changed. The information flow is orders of magnitude faster and have you seen any sane and normal people lately? The norm is spending hours scrolling social media. The argument that nobody has spare time/attention and thus we all need representatives falls flat to me.
We need to explore alternative forms of representation to allow people to choose their level of engagement in various levels of government. Perhaps I'm happy to delegate all national matters to a representative I trust but want to regularly weigh in on local decisions.
Between the technical challenge of trust/security and the inevitable political resistance to such ideas, I sadly don't expect to see them implemented any time soon.
Is this because the representatives are becoming weaker - or is it because we're asking the government to get involved in such a huge portion of what used to be free (as in speech) that it's impractical for them to pay attention themselves at the necessary level, and have to offload the work somehow?
That is, I'm claiming that government can't scale to the levels that the 20th Century escalated it to, with any degree of efficiency at all.
UPD I'm wrong about Japan. Thanks for pointing out.
Add UK, Australia, Canada, the Netherlands to the list of countries with housing crisis.
> Housing crisis is observed in almost all what is called "first world" (europe, japan, usa).
You mentioning Japan gives out that you maybe don't know what you are talking about.
> I believe that 90% of the issue is more global than a regulation.
Or maybe the case it, that also globally most urban areas tend to develop a version of excessive regulation.
Is there a housing specific crisis? Or is inflation impacting housing like it impacts everything?
Housing prices have skyrocketed in the developed world since the 90s, and it has nothing to do with inflation (as the inflation in the 90s — early 2000s was very limited).
> Housing prices have skyrocketed in the developed world since the 90s
And in many parts of what we might label as third world.
And excessive regulation is the norm in all of those (at least US and EU, no idea about Japan).
Japan does not. But it's also the place that didn't (fully) decide to try to keep it's population growing into perpetuity with migration and also has some other more unique market and monetary conditions.
Most of the first world has a habit of mimicking the US.
where is the housing crises in japan?
> Excessive regulation is 90% of it.
If it was, then the housing price would be correlated with the level of regulation, but it's not (housing less dense places is always cheaper than housing in big cities, even if you compare the most heavily regulated place on earth with the least regulated big city in the world.
> Here's how a rational market works.
A rational market made from human is as realistic as “dry water”.
The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.
> The key issue is that housing is treated as an asset, and the policies made to boost housing construction are designed around building a market in a way that gives housing the same kind of financial yields as stocks. But while stock prices can grow because productivity increase, housing value can only increase if housing becomes more expensive.
I like your thesis, but can you give more information on the nature of the policies that drive the housing market in the manner you describe, but which aren't just "regulation" that makes it directly harder (e.g. you can't build housing in this zone) or more expensive (e.g. minimum plot sizes, parking requirements, building codes)?
Interest rates is the biggest one, but also most fiscal policies related to housing (fiscal exemptions on the revenues coming from rents, the possibility for an individual to deduce the interests of their mortgage from their income taxes, or the absence of taxes on the benefits you make from selling a house).
There are as many such policies as there are countries so not all the above examples necessarily exist in your country (my country — France — having the first and the last one above but not the one about mortgage interests for instance) but they all share the same underlying world model of housing being an “asset you invest on” instead of the “commodity that slowly but surely loses value over time” it really is.
No. The key issue is just the rise and rise of inequality. As more money funnels to the top (thanks covid) the top buy more of the available assets leading to asset inflation.
Nothing will reverse this other than a tax on wealth. Tax wealth, not income.
This is way too narrow of an explanation.
Yes rising inequalities are a problem, but the housing price being absurdly high is a much broader problem: when a middle class family spends $500k+ for a house, they are part of the systemic problem. Same when the same family expects such a sum when selling the old house they inherited from their boomer parents.
> you can literally just claim a new highrise
> will block your sunlight and make you sad
If a high-rise blocks a single electron of my apartment's normal sunlight, it would definitely make me sad.
Good news! You can't perceive the electrons in sunlight, only the photons.
did you just well-actually'ed me?
> If you stay in an unaffordable city you can't wait around waiting for politicians to fix it.
Sadly this is the best advice for personal well-being. 'Sadly' because it disrupts families.
> In California you can literally just claim a new highrise will block your sunlight and make you sad. That's enough to delay a construction
So what's the problem?
Land use should be regulated imho, just like air pollution and other commons phenomena.
I don't care what kind of towel you buy to dry yourself off with, but I do care if a developer affects the environment and housing around it.
I don’t care what kind of towel you buy to dry yourself off with, I do care that you inherited a house from your ancestors who moved into the area 200 years ago and now a major metro area can’t build enough housing because you like the view.
>So what's the problem?
That is not a sufficient justification to infringe upon property rights.
While I'm sympathetic to the whining about "well they're a big business interest they oughta be able to work around the constraints" we are at least nominally all equal under the law where those things trickle down and at the end of the day that type of garbage winds up most applying to the little guy who can't afford lawyers and convolution
But you are infringing on others property rights just because you consider your rights higher and better than others and your cause holier than theirs. May be true or not, not something I nor you can judge objectively. Your rights end where others' begin and so on.
If by property rights you mean your right to have house/apartment where you like it, otherwise no idea what you mean.
Throw out a made up percentage and proceed to start talking about rational markets as if they exist in the real world. I immediately know this analysis is going to be great. Older houses are obviously cheaper for some reason even though housing prices in city centers keep increasing. Poor people are the real problem for needing a place to live. With the conclusion that there is nothing that can be done and people just have to take it. That's abundance (jazz hands)
>With the conclusion that there is nothing that can be done and people just have to take it. That's abundance (jazz hands)
The conclusion is you should go to where affordable housing exist.
The other option is to get on that 11 year waiting list.
There is an incredibly large lobby group who is fully invested in house prices rising or at least not falling, namely homeowners. and since most politicians at a high level usually own one or more houses, they are fully invested in it as well.
> namely homeowners
I'm a homeowner and rising house prices are terrible for me. Property taxes have doubled, and the prospect of switching neighborhoods (as one might consider doing for work, school, or other reasons) feels off the table given the high costs involved in the transaction, since agent fees are a percentage of the sale.
But some homeowners are to blame, at the civic level, where those who are happy with the way things are reinforce the roadblocks against affordable housing. Minimum lot sizes and anti-apartment legislation dissuade the pesky low-income riff-raff from moving in.
> and since most politicians at a high level usually own one or more houses,
That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!
https://nlihc.org/resource/new-census-data-reveal-voter-turn...
> That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!
Even if the data seems to indicate that's true, I do see this statement thrown around a lot without much granularity into the groups counted.
In your link, it's broken down into a few different groups, but in terms of renters vs owners I'm kind of less interested in proportion of people eligible to vote who fit into each broad category, and more interested in normalized categories. How many more people who didn't vote and are renters share a rental unit with someone they're not tied to long-term, or rent alone, compared to people who own alone or own in a long-term committed relationship where both people would be owners and likely to physically vote together, for example.
As in, is there as significant of difference between households of the same structure, income level, age bracket, in terms of voter turnout (a couple sharing the status of renting or sharing the status of owning). I feel like you'd be much more likely to vote if your spouse that you split expenses and responsibilities with also votes, whereas your roommate might not give a damn and it has nothing much to do with you.
Likewise if you own a 1 bedroom condo alone, does that show up as different than someone who rents a 1 bedroom condo alone?
It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments and own undesired property. Cities don't want housing prices to fall, since they were counting on money from developers and property taxes.
I don’t agree with this take, we’re overly simplifying the nature of housing here. It depends on the housing mix as well. If the vast majority of the pro-housing prices crowd is heavily invested in single family residential then they should favour widespread upzoning and deregulation of apartments because that would increase the value of their SFHs through two mechanisms: 1) presumably single family homes will be destroyed so any remaining single family homes become more valuable and 2) every single family home is now a potential townhouse or high density building which increases the value a developer would pay for it.
Are there any serious objections to that line of reasoning?
No, what you said is mostly correct; but I'm mostly talking about not having home prices go down, which is different but related.
There are different kinds of homeowners. There are those who are flipping houses and directly betting that the values go up, which is the crowd that you're describing. But at least in my area of the world, the majority of the anti-housing crowd is just old and is more anti-change than anything else. Even if the value of their home skyrockets even more, they won't sell and move. Their complaints are more about noise, traffic, and "quality of life" than home values.
I think the value of their main residence is a bigger driver than opportunities through zoning changes. It's easier to sit in your house year after year as it increases in value than it is to go through a redevelopment process, and have to move or end up with a less impressive residence. I'd guess that many would look for opportunities in denser suburbs elsewhere than agitate to change zoning closer to home.
There are strong factors around character of a neighbourhood: I think people in valuable SFHs tend to resent people in units as one example. Housing prices have typically risen without the assistance of zoning changes.
But assuming that the upzoning and deregulation doesn't happen, isn't their calculation correct?
Property taxes are relatively independent from the absolute value of the property. Only the relative value of a property to other properties in municipality determines property taxes.
In Nevada, it's a percentage (approximately 0.5%, varying from city to city and with other conditions, like commercial usage) of its assessed value, which is 35% of taxable value. Taxable value is the market value of the bare land plus the replacement cost for all improvements on the land, less depreciation.
Ok, but if real estate prices half the city can just double the tax from 0.5% to 1%? Correct?
Yes, but every elected official will lose their job at that millage rate increase and you'll have riots.
Why? If the real estate prices half and the municipality doubles the tax rate, everyone pays the same amount of tax in dollars per year?
Because people don't enjoy paying taxes if they perceived they should go down.
The cost of running a city is largely independent of house prices, so if the real estate market crashes there is no getting around that municipalities need to increase tax rates to meet their cashflow needs. People may not like that they feel they are getting ripped off, but the existing infrastructure has relatively fixed ongoing costs to maintain.
Oh absolutely, but that ignores the political cost of doubling tax rates.
Better to not get into that mess to begin with. Strongtowns is a great resource for cities looking to be prudent financially.
> Property taxes are relatively independent from the absolute value of the property.
In most places they are not. What would even compel you to write something like this?
Property values are regularly re-assessed according to recent sales and a % of the property value is then levied as tax.
Ok, where does the percentage come from? It is an arbitrary number set by the municipality to collect enough money from the property owners. Basically, if the city needs $100 million/year to operate it is just going to tweak the tax rate to hit that income number.
For example, in Vancouver the residential tax rate is around 0.15% and homes average around $2 million. Where I live which is a few hundred kilometres away the residential tax rate is around 0.5% and homes average around $600k. If you do the math, for both places the average place has $3000/year in taxes due — which is totally independent of house costs.
What does make the difference is if your house is more expensive than the average house. If you have a $2million dollar house in the place with 0.5% tax rate you are paying $10000/year in taxes despite your counterpart in Vancouver with a $2million dollar house is paying $3000/year.
I get this can be different across the world, but that is generally how it works in Canada.
That's a different question that I'm glad you were able to answer for yourself.
I live in California where property tax is fixed at 1% due to Prop 13, so I don't really know how it works anywhere else.
Ok, I guess that is specific to California. Where I live it doesn’t work that way.
I never see the NIMBY movement really engage with what falling prices would mean in practice. It just seems impossible to be allowed for any really duration over a large area.
I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).
> I never see the NIMBY movement really engage with what falling prices would mean in practice
It means the landed gentry lose, and the working class win. Unlike the status quo of the past few decades where the landed gentry make fistfuls of cash by doing 0 actual work.
Obviously housing prices going down will make some people's assets mixes worth less. That's why they fight to stop building housing. But that's true for lots of commodities and businesses too. Just because many people are invested in diamonds doesn't mean we have to ban lab grown to save diamond prices
> I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).
If you read between the lines that seems to be what Canada's approach to house affordability is going to be. Their leaders are promising housing will be more "affordable" but that the goal isn't to decrease home prices.
10 years of 2% is a real value decrease of 20%. that would be amazing!
But it’s pretty rare to see a contentious policy last that long without really clear results.
And people don’t seem to understand inflation. They expected to see real prices go down (deflation) and were upset when that did not happen.
They are going down the same path of making a lower quality product available, then using deceptive averages.
I have not seen anything that would create a supply of equally desirable properties (compared with detached dwellings).
Most families being able to afford a detached SFH was a historical anomaly that came with massive costs, and won’t be sustainable long term.
The "anomaly" happened when we were less productive overall. What change made it possible, and why can't we go back?
Western societies are naturally below replacement rate, getting back to sfh as the norm seems like the inevitable outcome without the significant efforts at the national policy level.
>What change made it possible?
Massive federal investment (paid for by the entire nation but often only able to be capitalized on by white Christian nuclear families) and municipal bonds that pushed the costs of building infrastructure out decades.
>why can't we go back?
The original loans are still due and/or replacement costs for the infrastructure require new funding, at 2025 inflated prices, and civil rights and demographic changes mean that the old resistributive model can't work (not the least of which because of the outsize costs that will be incurred to maintain quality of life for the oldest Americans in the next two decades). There's probably more.
Not to say that reimagining the sfh couldn't lead to it still being viable. But 2500 sqft on an acre probably isn't tenable.
Falling prices are bad for economy. Lending brokers, construction companies, material suppliers - all will be hurt if price falls.
The best solution in my perspective is to have stagnant housing prices so eventually general inflation will make housing cheaper.
If we can keep the price of homes flat for 10 years then homeowners won't get hosed (still increasing equity by paying off principle) and homes get more affordable (assuming steady inflation and wage growth)
Many of the home owners would win in a freer market because their land would be worth more.
There's also a large lobby group that is fully invested in building new houses, namely real estate developers, and since most politicians at a high level usually need large campaign contributions, they are fully invested in it as well.
This is not the problem. We should not castigate people who want to build homes and earn a rightful profit from that endeavor. The problem is the undemocratic process that is the town hearing. It is unreasonable to expect working families and young adults to attend week day, day time hearings to state their position on the construction of new homes or anything else for that matter. The atrocities of urban renewal by Robert Moses and his followers in the 50s and 60s which wrecked many urban and black urban communities, many of which still haven’t recovered, led us into this mess. The antidote was that all movements towards progress must be debated by citizens (mostly seniors as they are the only ones with the luxury of time) in a hearing format. The citizens able to participate are most likely not going to live long enough to see the results of their positions anyways. It’s a disaster.
You want to let rich outsiders make decisions about what happens to a community instead of the people who live there, because... town hearings are undemocratic. All those annoying old people are just going to die anyway, so it's really best to ignore them.
I think I've heard everything now.
All these old people are going to die now so their incentives don’t really align with people from other demographics. This is factually true, same with how people that have more wealth generally have different incentives than poor people.
The casual ageism in this thread is disappointing. I hope you live long enough to see it from the other side.
Are you suggesting that the problem with housing is that we are producing too much of it?
No, I'm suggesting that one problem with housing is wealthy real estate developers who have undue political influence.
I wish they had more influence, then they’d be able to build more and prices would go down.
I'm all for building more housing, as long as it comes with the necessary infrastructure - schools, roads, parking, public transportation, etc. Where I live, developers seem to get government approval to build in locations where they can rake in a lot of money at high prices without having to worry about such things.
(In fact, my local government is actually closing roads near new housing because "f#ck cars" is apparently a hip idea these days.)
Your own example seems to show that the culprit lies with local governance, not developers, wouldn’t you agree?
No. Let's not pretend that it's OK for developers to try to obtain undue influence over government officials.
There’s a puzzling contradiction between your claim that developers are the problem, on one hand, and then your own anecdote on the other, not to mention the article that very convincingly debunks the idea that housing shortage is the fault of developers. I must be missing something, because frankly this isn’t making any sense.
I'm not saying that developers are the cause of the housing shortage.
I'm saying that developers are eager to build housing and sometimes are able to cut corners via undue influence over public officials. That leads to more housing (good), but it also erodes the quality of life for residents (bad).
It's really not that hard to understand.
Money is politics, at least since Citizens United. Depending on your locality, for much longer.
It's been hip since drivers started showing up and killing people. The less parking the better.
Right. Let's just go back to agrarian times when people rode horses to get around.
Indeed, that is the only alternative and the favoured option for those trying to make it safe for their kids to bike to school. Though I prefer mules myself.
Let me guess. You already own a home?
Yep. A town can become desirable after its residents carefully built its character and reputation, then suddenly apartment/condo developers want in.
Usually the town was made "desirable" by residents there from ~1890-1940, and the current NIMBY's are leeching off that. In most cases the desirable part was bulldozed in the 50's-70's to make parking for the suburbanites. Portland, OR had streets that could make you think you were in Budapest before they were demolished in the 40's
That's fine. On one hand the other saying "no" too much will stagnate the local economy, on the other a city doesn't need to accommodate an infinite number of people moving there. Either extreme will hurt property values in the long run, so there's a balance. I've seen places sell themselves out, I've also seen suburban sprawls where naive homeowners feel good about holding a house 20 years only to make 30% gain.
Nobody else should decide the balance but the residents who have semi-permanently set up their lives there. People considering where to move have no skin in the game, they can pick somewhere else if they don't like what they see or can't afford it. Developers at least have something to lose once they've set up shop, but they're still not raising families there. And by "should" I mean, I wouldn't buy a home in a place where homeowners don't have the most say. Those places do exist, and I'd only rent there temporarily.
This has just lead to Boomers getting a death grip on every city. Young people are forced to pay out the nose to rent the scraps of housing left, and then also get taxed to pay out the pensions of the same boomers because they moved all of their cash out of the bank and stocks to put in to a 5 bedroom house in Sydney so now they qualify for welfare.
What do you propose instead to allow younger people to buy homes, and if it were implemented, why would young people still want to buy a home under those rules?
I propose construction approvals be managed by a higher government level than the local council which has so far resulted in disastrous outcomes.
At the state level, planning can be done for the benefit of the whole city. Entrenched groups of property owners holding inner city areas hostage won't be able to push young people to the outskirts where there is no PT, schools or facilities. Medium and high density buildings would be able to be built where they make the most sense, not just where there is the least political resistance.
Young people want to live near jobs, transport, and entertainment. But those areas are currently locked up by property owners preventing construction of appropriate housing.
You're saying young people are pushed to outskirts, but it seems like you mean they can only buy there, and others are renting. Otherwise, there's no way boomers just occupy the entire main part of the city, there aren't that many of them.
So if you enabled them to buy the more desirable homes instead of merely renting, where in this are they actually benefiting from doing so?
What about wealth inequality as the root cause of housing shortage? Even if supply is eased, the wealthy (those who have enough capital to earn passive income) will buy the extra supply and rent to the poor. The Piketty effect takes over, they invest their profit in more housing, wealth inequality continues to get worse, and while more housing exists, it owned by an increasingly small cohort.
Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.
My gut feeling is that wealthy people buying up the housing stock to rent out is not actually as common just supply restrictions not meeting the demands of individuals.
I used to live in Vancouver, and on my street almost all occupants were owners. But guess what, the number of houses on that street has not changes in 100 years, and the number of people who want to live in Vancouver has probably increased tenfold.
The issue wasnt that all the housing stock was bought up, the issue is that housing stock did not increase to satisfy demands.
Additionally, a place like Vancouver is really a global real estate destination. People with money who are not from Canada come to Vancouver and drop a few mil on a single family home and outprice all the locals. If you are buying a house in Vancouver you are competing with wealthy people local, but also the top wealth from across the globe.
BC did pass legislation to make all single family homes qualified for quadplexes, but I think it is too little too late.
Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.
I gave up a few years ago and moved somewhere else. Vancouver is no longer for Canadians.
> Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.
You forgot eliminating favorable taxation for real estate as well.
But actually if you kept all of those factors and simply just increased supply, it would still lower prices. It's not that complicated. It doesn't matter how many incentives you place on top of real estate. If you build more and prices decrease by 20%, it doesn't make demand shoot up by 20%.
The vast majority of people will never purchase more than one home, and will also never leave the metro-area they grew up in.
I think Vancouver people imagine the demand of Chinese real estate investors interested in their city is endless. It is not. Vancouver is the city that has the highest percentage of Chinese-owned real estate outside of China (globally) and its still at only 30%.
And the vast vast majority of cities do not have this dynamic or anything close to it. And the Chinese population is massively declining over the next 40 years, not growing.
> only 30%
That is a huge amount. I don’t blame immigration and foreign ownership as the only issues with Vancouver prices, but 30% of housing stock being owned just by Chinese population is massive. I knew several people who were Chinese nationals and owned a factory or large business in China and then bought a $4 million home in Vancouver. I don’t have any personal issues with these people and I befriend several, but I also realize that foreign capital from the richest residents outside of Canada were out competing locals.
Another thing to consider is that a large number of foreign nationals buying real estate in Vancouver come from countries that have strong capital controls (China, India) whereas Canada has basically no capital controls which results in a pretty onesided trade relationship.
All of the housing stock was bought up. In 1953.
Why not tax primary residences too? Why should housing hoarders pay no tax when someone who invests in a productive business or hoards mostly useless shiny metals has to pay capital gains tax?
They probably could be taxed but not a lot of countries do this and those that do have exemptions.
There's many arguments against taxation of primary residents but the strongest is probably that it punishes and hinders the ability for people to make sideways movements from similar properties to other similar properties, so it hinders housing liquidity, labour movement etc.
I would be fine with house sales incurring capital gains/losses. You are right, it is just another asset.
Piketty logic assumes infinite demand. Housing demand is very large, large enough to seem infinite when North American cities have spend 100 years banning every form of housing imaginable except the single family house, but it is not actually infinite.
If Piketty was correct, then inflation adjusted housing cost per sqft floor would always go up everywhere all the time. But we see dramatic differences in different periods of history, between different cities and we see rents stabilize & decline after building booms. We see housing costs go up the most in the places that build the least and the least in places that build the most.
If Piketty was correct, rich people could do this with things other than housing - they could buy cars and rent them out and then reinvest the profits to buy more cars. Ofc this doesn't actually work because there is no scarcity of cars - for better or worse we have chosen to place almost no limits on the quantity and density of cars in any city, state or country, while placing extremely tight & arbitrary limits on the quantity & density of floorspace in every city. For every car a rich person buys up to rent out, a car company reinvests the profits to build 1 more and then some. There is no functional reason residential floorspace cannot be exactly like that.
The housing market is much more inelastic than eg. the cars market. Whether demand in housing is infinte is a question of scale of population and wealth growth and elasticity. With that given, i would assume the postulated effect of run-off construction and renting, but we only have poluation growth and not the other two.
Just off the top of my head I can think of plenty of functional reasons why residential floor space cannot be analogous to cars.
Most importantly location matters. Space and buildings are not something that you can easily ship from one market to another to balance supply and demand. Space is inherently limited and replacing existing buildings with new more efficient ones is also problematic when you have people happily living in those old buildings, especially in high demand areas. Construction work takes time and in the meanwhile the displaced families will create even more demand.
There are practical limits on how densely you can pack floor space before it becomes prohibitively expensive, unsafe, or simply impractical. As you build higher the costs grow exponentially while the livable space per floor keeps decreasing due to the tapered shape of the building and need for larger structural core and more elevators. Above certain height you will be forced to target wealthier residents which means either offices or large luxury apartments that are anything but space efficient.
Construction is extremely capital intensive. A building takes a large upfront investment, and it takes a long time for it to pay off. With cars the cost of making more is marginal once you have an assembly line in place so it's significantly easier to re-invest profits into ramping up production.
Renting real estate makes more sense than renting automobiles because real estate is more expensive, less liquid, and better at holding its value over time. Owning a house is more difficult even when it would make financial sense to do so (not everyone can get a mortgage, or commit to living in the same city for an extended period of time).
> for better or worse we have chosen to place almost no limits on the quantity and density of cars
Even worse, most places have chosen to place a lower limit on the quantity and density of cars through parking mandates. It is absolutely insane that we are still wasting space on parking even in densely populated urban centers where it's impossible to accommodate everyone commuting by car.
> Space is inherently limited and replacing existing buildings with new more efficient ones is also problematic when you have people happily living in those old buildings, especially in high demand areas. Construction work takes time and in the meanwhile the displaced families will create even more demand.
The main reason old buildings with lots of people are replaced with somewhat taller new buildings, is because of bad laws that require new apartments to go only where old apartments already exist. IMO these are exactly the laws that need to be reformed and or abolished. It doesn’t mean that no one’s old apartment building will ever be demolished for a new one, but right now that’s effectively a requirement. If you want to add four space to a city, you are first required to demolish a large amount of apartment space, and evict everyone inside. If you could simply purchase a house that was already on the market, whose owners wanted to sell and didn’t want to live there anymore, and replace it with an apartment building he wouldn’t evict anyone. This transaction was once common place, but is now effectively illegal almost everywhere in North America because “house people” demand segregation from apartment people.
> There are practical limits on how densely you can pack floor space before it becomes prohibitively expensive, unsafe, or simply impractical. As you build higher the costs grow exponentially while the livable space per floor keeps decreasing due to the tapered shape of the building and need for larger structural core and more elevators. Above certain height you will be forced to target wealthier residents which means either offices or large luxury apartments that are anything but space efficient.
All true, but these limits are really only relevant or binding in Manhattan and perhaps one of two square miles worth of downtown cores in a few large cities. If someone wants to say that Manhattan will always be expensive for those reasons, that’s fine, but it’s no excuse for the other 99.99% of places people want to live in.
Reforming land use successfully IMO doesn’t require us to solve the problem of “how to make Manhattan (or places like Manhattan) even taller” but the much more economical goal of “it should be legal to build a 4 storey walk up with no parking, anywhere you can build a house.” That’s a tough political goal to be sure, but it doesn’t come close to having to deal with any sort of physical or efficiency limits regarding construction of very tall buildings.
You haven't actually worked this example out. Try it. The wealthy buy the extra supply; they now compete with all the existing supply for tenants. What happens next?
Collusion using online management services to fix prices across a region.
I think Washington State is working on legislation around rental services due to this already being a problem in the Seattle area.
“Extra supply” is added to the portfolio containing housing they’ve already purchased. They own part of “existing supply” too.
I live in Seattle, and this is a scapegoat. it's another way to point a finger at anything but massive restrictions on supply. The easiest solution to collusion to keep prices high is to let lots of other people build and compete down price. In Washington, most new construction happens on a very small number of parcels, because that's the only place we allow it.
Nobody concerned about rent price fixing thinks that we don't also need to build more housing here. This is just another part of the problem. Are you defending the practice?
I think it simply doesn't matter. The only reason it could have any impact at all is in an incredibly constrained market. Unconstrain the market and they just won't be able to; it wouldn't work.
Also - I don't think it actually affects prices. It's just that they've gotten good at seeking price equilibrium.
“Yes” would’ve been a sufficient answer.
And yet action gets taken about the rent price fixing, but not about actually encouraging more building.
Seattle upzoned huge chunks of the city, allowed ADUs (now two adus are permitted on all lots), and removed single family zoning. All within the past five years.
Last year, Seattle built 20% more houses than the highest of any of the previous ten years. (~13k units) And this year we're 11% above last year, so far.
What about that is not "actually encouraging more building"? I'd say your data might need revising.
It's honestly not that much. I know it looks good when comparing to recent years, but it doesn't look as good when you look at regional numbers (the city limits don't matter much in a housing market) - and the number of ADUs you can build in the entire city in a year is lower than some single new apartment buildings. We aren't keeping up with demand, much less drawing down the likely hundreds of thousands (seriously) of units we need to allow.
That's a different goal post. Seattle is doing things to encourage building housing. Full stop. Which refutes the claim made.
Whether Seattle is building enough housing, or whether the region is doing enough to encourage housing development are separate claims.
Housing is a depreciating asset. Even if you're trying to continuously corner the market, you'll be losing money in the long run if you're not actually renting the units for more than you're buying them for.
If supply can be built to meet demand, trying to corner the market to achieve monopoly rents will fail in the long run.
Land isn't. And the house is depreciating, but not the value of having a rental at that location. My house is worth four times what I bought it for a decade ago. The house itself is depreciating, and because I rent a portion of it, I can claim that depreciation, but the value of the property is going up.
> Housing is a depreciating asset.
It ought to be, but that is not how America works
Collusion on housing only works when there is a shortage. As soon as the shortage ends units go unfilled and landlords defect. Collusion works in industries where supply can change in the short run, tough to do that in real estate. Real estate elasticity is so high though that small collusion can work, but only if there is already a shortage. Yet, again the solution is just build more.
There are too many competing landlords to form a functional cartel.
Why this collusion doesn’t happen in Austin where rents are falling 2 years in a row?
Depends on how many tenants there are: is is a buyers' or sellers' market?
Their point is that an increased housing supply should shift it to a buyer's market - it's not just how many tenants there are but how many housing units vs how many tennants.
Whether it's a buyer or seller's market depends on supply!
If the wealthy buy up existing limited housing supply and there are many tenants looking for housing, then they can continue to raise rents, no?
The premise here is investors that just continually buy up all the supply, even as supply continues to increase, in the hopes that some day housing, the single largest asset class in the United States, will reach the limit of all possible supply? You don't feel like this is "spherical cow" calculating? The amount of investor-owned housing in most metro markets is a rounding error, and the amount of vacant investor-owned housing is smaller than that.
The logic you're using here depends on deliberate vacancy; as soon as you concede that investors let out properties, you force them to compete in the market for housing with all the other supply.
I'm trying to track this argument through this thread but I feel like something has gotten lost here, is there someone arguing against increasing the housing supply? Like, did someone upthread say something like "no, I think we should not build more houses"?
Or is the argument that merely building more houses isn't sufficient?
(Also presumably you could build an infinite amount of houses, but the land itself is somewhat of a fixed supply...)
> is there someone arguing against increasing the housing supply?
Yes. The central thesis of the blog post is that increasing the housing supply solves the housing price issues.
And other people in this thread are going: "Uhh, well actually, have you considered that this is the fault of wealthy investors, and/or collusion or something"?
Anything to distract from the extremely simply and obvious idea that building more housing causes prices to fall.
Yeah except it almost always gravitates to a cartel, almost always, because that is how people work, even when piloting corporate machines.
I'm speculating here, but I'm guessing you haven't been month to month rent in a while..
EDIT: you seemed to have tried to redirect the question to this "always buy up more land as an appreciating asset", when both can be true. "Buying that land is an appreciating asset (we haven't made much more I'm aware)" and that "forming an asymmetrical power relationship with the renters improves owners life" are mutually beneficial activities
Housing returns have constantly lagged behind equities in the US. In the long run it’s almost always preferable to hold stocks as most of your investments in the US.
Again, that means the answer is to stop limiting how much housing is built.
If - hypothetically - I had a ton of money and buying another house or two or fifteen wasn't a big deal, wouldn't there be a clear-ish signal that I should stop my demand for more housing lest too much supply screw with my income? I would also have an incentive to deploy some of my resources/capital to making sure that the supply of housing is juuuuuuust right for my extractive needs.
Thats what I'm trying to figure out myself, which bank is going to give out loans on a depreciating asset. Funding will dry up as supply increases.
It is all fine as long as repayments on principal are faster than depreciation. Might mean larger down payments or shorter durations. As long as you can reasonably expect collateral to stay above principal math does work out in my mind.
Car loans have been a thing. And they attach to depreciating asset.
A lot of the supply will become second or third homes for the affluent, or short term rentals, not residentially leased property.
That's already the case with a lot of properties in highly desirable locales whether high demand cities or holiday destinations.
Yeah, Neither you nor the parent have worked the forces out to describe what's happening now.
What's happening now is the wealth and the middle are buying houses and apartments not for rental income but for appreciation. This motive is what stands in the way of new home building in any given area. This is why rents rise beyond an area can sustain at all - rents are set to maintain the ostensible value of a property - selling an empty property is fine, even encouraged.
The situation is visible everywhere.
There's just no evidence to support this. Appreciation is nowhere near as cost-effective as putting that same money in the stock market.
>What happens next?
We'd revert to the state that applied for most of human history: 99% of humans will be serfs renting from 1% hereditary landlords. We'll have shown the American mid-century home-owning middle-class phenomena to be an historical anomoly. Average living standards will plummet and equity barons will never have lived so well. Any short-term rental rate drops will quickly be erased by a combination of growing population and well-known market manipulation, in particular further wealth consolidation.
Mere millionaires think they are safe; they are not. We live in a world that has a ~10 OOM wealth scale; being at level 7 does very little to protect you from 8s 9s and 10s, just as 2s are powerless to 4s and above. To a 10 a 7 may as well be a New Dehli beggar.
I was thinking more along the lines of a simple math problem and less along the lines of an outline for a dystopian novel. Like, show the work.
If capital returns 5% and the economy grows at 1%, where does the extra wealth come from? Spoiler: it's a transfer from the poorest to the wealthiest. Asset classes include stocks, bonds, real-estate, art, and metals. So if artists make more art, will this make art ownership more accessible to the average person? Or will it be a small transient soon erased by the monumental financial forces pulling all assets into the ownership and control of a tiny few? That art that your grandparents bought for $500 is now work $100k; you have student debt and high rent, so of course you sell it. The house your parents bought for $18k is worth $1M and they need end-of-life care, and you're own kids are expensive, so of course you sell it. The movement is irrestable.
tptacek is asking how investors buying properties to rent them out, which clearly leads to increased rental supply, then somehow supposedly leads to higher, not lower, rents.
Increased rental supply at the cost of decreased home ownership.
There is already price manipulation with rental properties. If a cartel is in control of enough of the supply they can set their prices as high as the market can afford. There is already a nationwide shortage of affordable housing in desirable places with jobs and the idea ITT is that it will only get worse as the investment class are the only people that can afford desirable property.
> they can set their prices as high as the market can afford.
which is the correct price - because you dont need a cartel to set the price at as high as the market can afford; each individual landlord chooses to price their rental at the highest profit they can, with the lowest chance of a vacancy.
A cartel makes it possible to set the price _higher_ than the market can afford. Which is why a cartel is illegal.
Recognizing your frustration with reality's failure to adhere to the academic: the fact is that rent rates for corporate-owned units generally don't go down. At least, not in recent history. In the rare cases where cartel behavior doesn't work to cement rates, and owners have to respond somehow to market conditions in order to avoid cash-flow disruption, they will offer "specials" that lower the out-of-pocket cost, but not the on-paper rental rate, for a unit. Your oft-found "1 month free"-type deals (that are actually a monthly bill credit for the initial lease term). Upon renewal, your increase is based on that paper rate, not what you were actually paying.
Recent history has been corporate rents not decreasing amid tight supply, the question being asked repeatedly (and repeatedly not answered) in this thread is “how exactly would landlords continue seeking high rents if housing were no longer scarce?” The only answer so far has been “by buying up the supply and renting it out” which completely ignores the obvious fact that renting out housing may reduce the supply of purchasable properties, but increases the supply of rental properties. There is no reason to assume collusion among a set of landlords would be enough to keep rental prices high if supply is no longer tight. So how exactly would landlords continue seeking be able to keep prices high if supply continues to increase?
Not a direct response but just a follow up question. I'm curious how much surplus supply folks think there needs to be in such a scenario. We've seen that landlords are willing to hold units vacant in order to keep their property values up and avoid renting out at a lower price. At what point does thw math say that should collapse? 10% vacancy? 15%? 30%?
> “how exactly would landlords continue seeking high rents if housing were no longer scarce?”
I think land lords wont lease out at marker rate due to that would lower the book value of the house which would make the banks call in loans.
Like, bank and land lords have some sort of understanding which in practice is some sort of price fixing and market collusion via proxy.
Can you at very least try to answer the comment you're replying to?
Nice points. And of course your first reply in this thread is anlredy light grayed. Classic Hacker News
They leave it empty (that actually happens a lot, especially with foreign investors) or convert it to their 100th AirBnB.
Empty properties barely exist as a percentage of total housing supply in high cost of living areas in the US. You’re looking at no more than a few tenths of of a percentage point of NYC’s more than 4 million units.
Examining empty ownership as a percentage of overall housing in America, which has tens of millions of units, is not a very helpful way of categorizing a highly localized and locally felt phenomenon.
The real effect of this type of ownership is that it distorts the high end of the market and the effects ripple downstream. They force cash to move elsewhere in search of housing, which inflates those markets, so then those who could afford those markets move elsewhere, etc.
Despite all of the data that gets lobbed around on this topic, we don’t seem to have a very good mental model for how small changes in one segment of the market explode into the others and cascade dramatically.
It’s just not very meaningful to examine this as a percentage of units.
> Examining empty ownership as a percentage of overall housing in America, which has tens of millions of units, is not a very helpful way of categorizing a highly localized and locally felt phenomenon.
That’s why I specified NYC. There’s actually very good economic work on how the housing market is segmented and how demand and supply spill over. There’s some good studies from the NYU’s Furman Center on the topic.
> It’s just not very meaningful to examine this as a percentage of units.
Warehoused condos make up a small fraction of high cost housing in NYC and exist almost solely in a handful of blocks in Manhattan. They have virtually no effect on the broader luxury market, and take up very little land as they are mostly crammed into a small number of buildings.
> a few tenths of a percentage point of NYC
Feb 2024 (last year there's data, I think) was a record low and it was 1.4% empty, according to NYC[1].
But I don't really know the methodology, and according to other nyc gov data it's surprising, since we still haven't recovered our population from COVID[2].
The first statistic (housing pressure) is based on population growth, but the NYC population statistics suggest still meaningful population loss since 2020.
I have seen articles in the past that suggest that apartment vacancy rates in NYC are self-reported and misleading at best, but I don't really understand how that would work and I can't find any sources on that now.
It's also my understanding that some classes of landlords can mark empty apartments as income losses, basically or partially making up for the loss of revenue in tax rebates. But that's also not something I understand well, just something I have seen asserted.
[1]: https://www.nyc.gov/site/hpd/news/007-24/new-york-city-s-vac... [2]: https://s-media.nyc.gov/agencies/dcp/assets/files/pdf/data-t...
1.4% vacancy in a housing market is extraordinarily low. Remember: there is structurally always some material amount of vacancy, because people vacate housing units well before new people move into them. This, by the way, is a stat whose interpretation you can just look up. Real estate people use it as a benchmark.
Yeah I know it's among the lowest in the world, it's still an ~order of magnitude higher than a few tenths of a percent, which would be shocking for the reasons you mention.
My point though was just that I've seen arguments that these numbers can be manipulated, and the city's own data doesn't make sense by itself: either the 1.4% number is wrong or the slowly recovering population estimate is wrong. Especially considering the 60,000 housing units (representing 2% growth) created.
I was replying to this claim
> They leave it empty (that actually happens a lot, especially with foreign investors
Not talking about rental vacancy.
Vacancy doesn’t mean units held empty as either a parking place for cash or held off the market. Vacancy happens when you’re painting and repairing between rentals. Vacancy happens when there’s a renovation. Things like that are normal and not nefarious. Have 1.4% vacancy rate means there is essentially no usable housing for rent.
I was talking about the myth that there are tons of apartments held by rich people who don’t use them for anything.
My understanding is that vacancy means available units for rent. So, plausibly, if you say 50 of the 100 units in your building aren't available for rent because you say they're being painted then they don't contribute to the vacancy of your building.
That's almost the exact opposite of your definition, but I agree that a 1.4% vacancy rate means there's almost nothing available for rent.
I'm having trouble finding an official definition from a source that reports them, but my definition matches things that I can find online, eg https://www.brickunderground.com/rent/vacancy-rate-what-does...
Do you have any actual data on the rate of unoccupied properties that are not recently or soon to be available to rent in any major US markets? It seems like kind of hard data to find from my brief perusing around. I'm very interested in seeing some reliable data on this.
I had thought such units would have been included in the housing vacancy statistics, but apparently they are not.
I haven’t spent much time looking at any place other than New York. But there’s census data, tax data, and a lot of public records. The number of empty units is small. The total is probably close to 40k, but that’s a fuzzy number and moving target. That includes regular vacant units.
https://gothamist.com/news/how-many-nyc-apartments-are-vacan...
Yes, we get it, they buy the unit and leave it empty. What happens next.
The total housing supply remains static - the number of owners goes down and the tenants increase, so the S/D curve for housing stays the same. Then the wealthy consolidate the supply into smaller, more powerful groups who drive up rents via monopolist and cartel behavior (eg RealPage).
It costs money to hold on to a unit of housing. Supply is increasing (that's the premise; nobody is proposing a one-time increase in supply). How does the investor profit?
The investor profits from the appreciation of the property - they may Airbnb in the meantime also. Especially, often the speculator will fix-up the property for a sale - and then the next buyer fixes it up as well. Eventually it be a vacation home or someone might even buy it but the entire process keep a lot of property off the rental market and that increases rents.
If a small number of landlords continue to control the supply (which I understand to also be part of the premise) then they can charge whatever rate allows them to profit. Housing is pretty inelastic and is a first order priority for most people, so they will pay the maximum they can afford if they have to. At least near me, most of the housing being created is owned by large corporations like the Irvine Company, it’s not individual owned.
I'm asking: how does a small number of landlords continue to "control the supply" of an ever-increasing supply of housing when each of their holdings is non-remunerative (and, in fact, incurs tax and maintenance costs). This seems like a pretty simple math problem, a bet that you would not take if it was laid out in front of you, but I'm waiting for someone to explain how that might not be the case.
Keep in mind: as soon as you concede that investor-owners are letting out properties, they are competing in the market: further supply of housing decreases their returns, because they compete with all other suppliers of housing, the high-order bit of which is existing owners. You have to make this math work with owners who deliberately keep their units vacant, or it doesn't even work as an idea.
I’m not arguing they’re keeping it vacant, that’s someone else in the thread.
I reject the notion that the units are not making money, and the notion that they are competing on price. We know corporate landlords engage in cartel behavior using price setting algorithms, and there is a deep well of tax-incentives for real estate (eg 1031s) that make it a more complex math problem than you are making it out to be.
How did Uber et al. offer services below cost until they'd driven out all competition? The property holdings are not these landlords' only source of income. Why would milk producers deliberately dump millions of gallons of milk (representing a commensurate amount of labor to both produce and then dispose of)? Because they've created an oversupply that threatens to destabilize the price.
The math works, it's just heinous.
I never understand why people think Uber is some kind of mic drop. I don't like Uber as a company, but Uber is vastly better than the system it replaced. It this a generational thing? Are the people casting Uber as archvillains just too young to remember not being able to get a cab at 9PM, or having their cabs kick them out halfway to their destination because they decided to go on a break?
"Uber" was not the mic drop; "[Company] can use 'losing money today on one venture' as a business tactic, in search of higher future profits, if it has another source of cash to cover its losses," was, at least in the sense that it directly answered your question as to how a business losing money on one front could continue to operate. The company doesn't matter; loss-leading is not rare or unknown.
I think it's largely revulsion that Uber ignored regulations, with the revulsion mostly coming from the types of people outraged by things like Newsom's recent CEQA reform.
They support these sorts of stifling rules and believe that skirting or changing those rules is a right-wing ultra-capitalist attack on the public good, despite the situation actually being the exact opposite.
I think it's less the ignored regulations (I'm also happy with the CEQA reforms), and more that they engaged in predatory pricing schemes to stifle competition. This has resulted in a duopoly that engages in politicking to lock in their position and suppress labor rights (e.g. Prop 22).
That does seem to be a right-wing capitalist attack on the public good? Like, do we still believe in markets, or are we just cool with mega-corporations setting prices and wages?
Eventually there are more houses than people who want to be in them, regardless of whether or not they're being rented or owned.
When that happens you'll see the prices fall. After all, if nobody wants to rent your house, you'll either rent it for lower or sell it.
If nobody wants to buy it, you'll lower the price.
Ad nauseum.
China did that on a large scale, at one point using more concrete in three years than the US in the entire 20th century.
There's reportedly enough housing stock to house the population twice over, yet prices still only increased.
Where there's sufficient inequality, the country will run out of eligible land before the wealthy run out of money.
Rents in China are dirt cheap and hardly increase if you’re rational about your housing instead of chasing status and face.
Rents - yes. Real estate - no. One huge sign of the housing market being out of control is the decoupling of renting from real estate prices. There's hardly a stronger indicator of it being irrelevant whether someone lives there or not.
This will not work if there is an exponential wealth inequality in a society, which is where everything is heading.
Can you explain "exponential wealth inequality"?
Sounds a bit like "problem A is unsolvable because - look at here! - no one is solving problem C!"
I mean, I can't speak to housing problems in this thread, but your second sentence sounds like every post mortem and root cause analysis I've ever seen. Sometimes problems have root causes that must be addressed first.
40 years ago you could buy a share in American companies for an hours work.
Today you have to work 25 hours to buy the same share
In 40 years time you’ll have to work 4 months to buy what in 1985 would cost 1 hour.
This only works if all those houses are on the market. Nothing is stopping today's rich people from buying up all new housing, and only letting a handful be on the market so as to not flood the market and not let prices go down.
They do not have enough capital to do that. Housing is such as large market that eventually anyone but the state would run out of capital. And it is not actually even that profitable... There is much better investments.
You don't have to buy out the whole market. You buy the houses that are likely to turn over, and then you make sure that they don't until you want them to. Housing and rent is set at the margins. If the average price in your area over the last year for comparable housing was $300k, and the last three comps sold for $400k, your asking is $400k.
It's exactly the situation you'd expect with record high prices and low sales volume, which is where we're at.
What’s stopping rich people from buying up every car in existence and making you pay $1 million for an accord?
Ah, the classic investment strategy of eating up the cost of keeping a house empty, so that others who do accept renters would make more money
”The rich” aren’t that stupid, why would they take the losses to support someone else making a profit?
I recall an article on HN quite a while ago about one of those property management companies/websites in the Bay Area. The article was detailing that, while the majority of people looking to rent out their properties were individuals and not the ultra wealthy, the app "encouraged" price-fixing, including things such as keeping a certain % of lots vacant on purpose in order to drive up prices artificially. I put encouraged in quotes because it turned out that a prerequisite of managing your properties through this application was actually complying with the price fixing, on an app-wide scale of all its users.
So despite it making no financial sense on an individual, house-by-house level, what happened in practice is that the market itself got strangled by this collusion and despite the existence of many empty houses available for either purchase or rent, you ended up with a non-negligible amount of these places not ending up in the market organically and as such driving up the costs for everyone. The property owners win big with this scheme of course, and the way things were setup you'd be a fool to go against the grain and try outcompete on cheaper housing, since you can't beat an entire market getting strangled.
So yes, "the rich" aren't that stupid, they just so happen to have systems that make these sort of moves profitable.
Seems like this article had a large impact on your understanding of the housing system. Could you post it so that others can read it too?
It's likely something related to this:
https://www.propublica.org/article/yieldstar-rent-increase-r...
There are multiple lawsuits, and settlements are already in with some property managers. Yieldstar/RealPage are not the only culprits, either: https://imgur.com/a/EmJQryv
It's not about the rich being stupid. It's about banks only creating credit for "sure bets". Housing.
And who will build homes if there's no one to buy them?
Having more homes than people want to buy would be an amazing problem to have.
Yes but that's impossible, the builder needs a buyer before he builds.
Where's the evidence that wealth inequality is the root cause of housing shortage, as opposed to say, the real and factual lack of building?
Even if the wealthy did buy up extra supply to rent out, that would only mean increased supply of rentals, which would lower rents.
Not commenting on the ethical side of it, in many instances rentals are just a side income, the real value is in the increasing price of the house due to demand outpacing supply. See https://news.ycombinator.com/item?id=37855625 for past discussion on this.
Demand is out pacing supply because while the greatest and silent generation was happy to retire on stonks, pensions and bonds the boomers all went out and bought more and more homes and condos and whatnot for rental income.
It used to be that rental housing was either owner occupied, like a landlord living on one side of a duplex or it was a big commercial investment. The current trend of every idiot having their starter house from 20yr ago listed as an airBnB wasn't a thing back then.
So basically we "need" way more housing per capita now so that they can all have their stupid little side gigs.
Want something really interesting? There's a pretty decent chance that our wealth inequality is entirely caused by restricting housing supply. ;)
The ultra wealthy don't even care if it's rented, they're just diversifying their asset portfolios.
It can be both. Wealthy people make it illegal to subdivide large housing units.
If people had the wealth to own land and build on it then they'd build their own.
When interest rates were rock-bottom a bigger chunk of new builds were purchased, but they're not anymore. Vacancy rates in cities, though, are very low, and if you constrain supply of rental units, rent prices go up. That impacts the poor demographic far more. People who rent entire houses are not typically poor, unless maybe you count places where houses are cheap like Mississipi.
The actual data does not agree with you at all. In places that have implemented zoning reform, housing gets cheaper. In areas where it's easier to build (red states), housing is cheaper. There is no reality at all where supply of housing jumps high but prices do also.
> Personally I'd like to see legal constraints on investment in primary, single-family homes, and fewer legal constraints on building them.
Where investors are concerned, these are purchased to flip, or with the expectation that prices would rise. Given that we had inelastic supply but perpetually growing demand, that was a good bet. So, if you build way more, an investor wouldn't be so confident about that price increase. Now compound that with the risk of borrowing at higher interest rates to buy those properties.
Who owns housing is orthogonal to the rent or imputed rent for an owner occupied unit. The effective monthly rent is supply and demand.
Higher supply still means lower prices. Even if "the wealthy" buy it all and rent it, they are still competing with all the other wealthy who are doing the same thing and that will limit how much they can charge for rent, and will make it a less profitable investment than other things the wealthy could invest in.
Housing is not really a great investment. It's great for small investors because it's the only place where they can invest with leverage via a mortgage. If you have billions there's much better things you can invest in.
>will buy the extra supply and rent to the poor.
The wealthy are generally monetarily shrewd, and building homes makes home ownership a worse investment. If there is a deluge of homes being built, the wealthy will take their money elsewhere. Being a landlord typically has ~10% annual return. Compared to just sticking money in the stock market, it's actually been worse as of late.
The goal of the wealthy isn't to make people suffer, it's to maximize their ROI.
If there’s 1 million people and 2 million houses then the wealthy aren’t going to be. Using up to rent out as the return on investment will trend to zero.
If there’s 1 million people and 500k houses they will buy them up because everyone needs somewhere to live and will keep paying more and more to avoid the overcrowded slums that someone has to live in.
Rental stress is a bigger problem than price appreciation, though. Investors cannot cause rents to increase by buying stock.
The causality is in the other direction, see (as I posted in another comment) https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...
To the extent that housing speculation exists, it's because of the lack of supply. So you have the cause and effect reversed.
So why are rents falling in Austin for multiple years in a row?
Why did the wealthy simple didn’t buy all of it to extort more rent?
If general housing is abundant enough that it has very low ROI compared to other available investments, then no they won’t buy up housing. One pretty simple way to do this is to raise property taxes high enough that a vacant condo is a very bad investment. This is what it would mean to commoditize housing.
I think it’s a realistic goal for apartments/condos. Single family homes will always be constrained by land.
(Edit): I think you, and a lot of people who are anti-capitalist on housing, make the implicit assumption that all housing is a fixed good. There is only so much housing and our political goal is to allocate that fixed amount. In a lot of major US cities this is sort of true because we have regulated the construction of new housing to the point where even the government can’t build it. But the anti-regulation perspective is that if we get rid of the regulations preventing housing construction, then enough housing will be constructed that the allocation problem isn’t much of a problem. (Or something in between, ie it’s a lot easier to build/buy social housing to give away to people if housing is already made very abundant, and the fact that even governments like California have to spend truly ludicrous amounts of money just to get a few crappy studios built)
Why is it OK to constrain investments on SFH but not apartments or condos?
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I have a soft spot for anyone with a background in Turbo Pascal from the 90s (my father built our family business on Turbo Pascal then Delphi through the 80s and 90s, so I grew up with it around the house).
I just wish you'd dial back the combative tone of your comments on HN. You've been engaging in a lot of political/ideological battle recently, and it would be good if you could remind yourself of the guidelines and make an effort to use HN in the intended spirit.
We're trying for curious conversation here. Different perspectives about economics are very welcome. Slurs and swipes are not.
https://news.ycombinator.com/newsguidelines.html
"Trickle-down" economics is a direct subsidy for high-income earners meant to spur demand. That's the opposite of what increasing the housing supply does.
Totally wrong strawman missing the bigger point. It's still a vague, misguided utopian ideology focused on helping the rich supposedly "overproduce" while doing nothing for everyone else. That's trickle-down economics 101.
Well, you have the economics wrong, and our ability to handwave at each other about whose policy is "miguided" and "utopian" seems like a pretty boring conversation. Regardless: it's obviously not "trickle-down economics". Trickle-down economics are policies that deliberately and directly subsidize the wealthy in the hopes of spurring demand.
Supply and demand is not an ideology, it’s the most fundamental way that pricing works in a capitalist society. Has been studied for centuries. To think that supply and demand would not apply to housing and instead be trickle down economics is a hell of a statement.
The Supply and Demand model makes some assumptions that are not always true (perfect competition, for example).
The model isn’t an ideology, it is just a model. But there are a lot of ideological beliefs around this stuff. Some people seem to think that all markets have perfect competition, or that the resulting efficient pricing is inherently always good.
Housing seems pretty far from perfect competition to me.
https://en.wikipedia.org/wiki/Perfect_competition#Idealizing...
How about for fun, instead of rhetorical devices and snarky projection, just look at the facts. The data on effects of zoning reform in places like Minneapolis and others, about where housing is cheaper wherever it's easier to build, about rent dropping ( https://denverite.com/2025/07/25/denver-rent-prices-drop-q2/) when you build way more units, etc.
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Trickle down was a Reagan thing.
I'm very confused by your statements.
I mean it was the Big Beautiful Bill that just added 3-5 trillion in debt and reduced taxes on the very wealthy. I don't think those impotent Dems had any sway in this.
Dems are also beholden to the wealthy--not sure they tried that hard, overall.
Then you're too focused on political concerns. Neoliberalism doesn't recognize political parties, it recognizes money. As Gore Vidal would say, the Property party.
To avoid confusion: neoliberalism has not much to do with the liberals (Democrats). It's closer to libertarianism, but only about money.
I think I was confused (speed) reading through it and hit the Democrats part and was just thinking to myself... They have extremely limited power right now, and aren't passing laws?
There are some wild political takes on the internet sometimes, and it can be hard to parse out exactly what the person is trying to say (especially if the reader failed their speed reading comprehension ;-) )
Neoliberalism, trickle down, abundance. They are all similar and/or the same.
Pretty much any criticism of a current housing market can't happen without mentioning the quality of said housing. I have just come back from one of the apartments I was looking at to see an abysmally small shoebox with some sort of doors and windows installed in there. I live in a house with 9-foot ceilings and I feel like a king. But this is insane.
Recently I've visited a rental property to find shallow, not sound-proofed walls, askew doors made of something that looks like paper and not a single straight corner. And this is a 2023 build! It's brand new. And still looks awful.
I have an article about that. https://medium.com/@ifcllc/qualification-f33ec8fcb736 but man, it's getting worse and worse.
Just to have a 2-room apartment that I used to live in 30 years ago would cost over 1.5 mil today. Adjusted for that inflation of quality.
That's right, and that's caused by restrictions on supply. Almost every problem we have with housing comes down to us restricting how much can be built so much that extremely low quality units are competitive. If you allowed 10 times as much construction, those units wouldn't be able to compete, because other builders would offer better units for the same price.
Apparel markets are much more free and competitive than housing markets, and have basically no restrictions on supply. Yet, the quality of available clothing across the world have fallen. And we get incredibly cheap incredibly low-quality garbage.
These things are much more complex than simplistic single-variable models.
I don't think clothing quality has fallen. Quite the opposite. We are able to buy high quality clothing at a very low price. More advanced materials, more consistent construction, better construction, greater selection, etc.
Much of what you can buy today did not even exist 30 years ago. For example, trail running shoes more or less did not exist. Perhaps you could have had a pair custom made, at a high price, with the worse materials available at the time, but today you can them "off the shelf".
Even the many shirts I've received for free are very high quality and have endured years of abuse.
This is substantially better than really bad apartments that are expensive or nice apartments that are very expensive!
It is not actually more complex, you don't spend ~40% of CPI on apparel.
> the quality of available clothing across the world have fallen
Do you have a source for this? Anecdotes along the lines of "they don't make 'em like they used to" are incredibly common but often fail to stand up to scrutiny.
Circumstantially, the dominance of fast fashion, produced quickly and sold cheaply, suggests that some aspect of production is more "efficient" than historically so. I've seen YouTube fashion experts explain exactly how (lower quality fabrics, simpler and less durable sewing, cuts that use less fabric than would be so in higher quality garments), and while I'm not experienced enough to corroborate, they were convincing.
I mean by that logic wouldn't the cheap house just cost even less? What about housing prevents it from being a race to the bottom like every other product?
Like yes a nice pair of boots costs more and you do get more value out of them compared to Amazon basics boots.. but far more people end up buying the cheap option because it's cheap and available.
When you say "like every other product" - if you're interested in me really answering your question seriously, give me an example product category. I usually use cell phones to demonstrate, but most major consumer products will do.
It seems like fewer restrictions would mean more garbage getting built.
Bundling all regulation into a single monolith is a classic mistake.
Some regulations are bad. Some regulations are good.
The abundance types do not want to remove good regulations, like structural integrity or fire safety regs.
They want to remove bad regulations, like parking minimums or building height limits.
Please understand this very important distinction.
The restrictions, paradoxically, are what cause garbage! when the unit you build is in incredibly high demand, you do not have to build good quality, someone will pay you for it. If you are competing with other people building for the same rental market, you can't get away with that.
Depends on the restrictions. Not being allowed to cast a shadow on the neighbor’s zucchini garden or having to pay off permit expediters has no impact on building quality, mandating wood vs cardboard does.
Fewer regulatory roadblocks like zoning would lead to more supply, which would lead to more competition, which would lead to better quality and cheaper rents.
At least in cities, it will probably just lead to more high-end housing that's bought up by people who don't even live there. The market doesn't work with so much income inequality.
High end housing takes pressure off of moderately high end housing, which takes pressure off mid end housing... all the way down the line. Housing supply simply takes pressure off the cost of living for everyone.
More realistically: right now it can take years to get approval to build somewhere, only specific builds for specific places.
The idea is that there will be more competition.
Well that's what they say, but it seems like there should already be enough competition for people to cause less garbage to be built, and it's not working, they just build it anyway.
My town has a bunch of half empty new buildings that are keeping their prices high instead of competing on price (they're also garbage construction, so they didn't compete on quality either). Apparently it makes more financial sense to the owner to keep empty units instead of competing because of the value of snagging a few tenants at higher rents or something.
I had to break a lease on an apartment recently. The apartment was built in 2023 or 2024, marketed as a luxury apartment. We had no hot water for a month because they used a couple centralized tankless water heaters, and we happened to be the furthest away from the heaters - if they turned it too hot, it was burning hot for the apartments closer to it.
Not only that, but the walls/floors were paper thin. We could hear the floor creak when our upstairs neighbors so much as shifted their weight.
Don't you love the feeling when your neighbor from upstairs seemingly plays bowling while horseback riding? (Especially when you found out that in reality he just dropped a penny on the floor that acts like a megaphone.)
Rest assured, the quality has gone up, just not in ways that you, or most anyone, cares about. You'll be satisfied knowing that every house in the country is built with outlets every 12 feet, with independent circuits for the for every few hundred watts of lighting, able to withstand Arizona heat, California earthquakes, Florida hurricanes, Louisiana humidity, Minnesota cold, and everything else you may or more likely may not care about.
Inflated building code is a great way to repress the rate of new construction, and if it's all in the name of safety or energy conservation, no one can stop it, even if it's entirely useless for your house. That leaves low quality materials as the only ones affordable for a starter house.
Oh man, how much I agree on a building code.
The last hurricane I survived, I had to spend time in my office building. It is made of concrete and real brick and mortar. There is no need whatsoever to “hurricane-proof it", save for the special shatterproof windows. Big, 4 by 6 shatterproof windows.
The shoebox I live in currently features the same shatterproof windows. 2x1 feet, small windows. I had to re-install all the light fixtures in the rented house because despite featuring white walls, it’s darker than a necromancer’s cave.
The former was built in the 70s. The latter - in 2023. The latter does boast an impressive array of anti-hurricane features. For example, it is bolted down to the foundation so it can't be torn by a wind gust. And the frame was re-inforced so it won't lean under the wind.
Shall I mention the fact that none of those features are necessary for a brick building?
To top it off, the AC has leaked in 2024, so I had to deal with that already. It was less than 1 year old at that moment.
My parents bought a house in the mid 80's, that another family member currently lives in. It still has the original air conditioner, which is a heat pump, so it's run for 40+ summers and 40+ winters with minimal repairs and effectively zero maintenance.
Exactly. Qualiflation. We have substituted the inflation with the inflation of quality. Yes, the AC in 80x used to cost $2k, and thank pete, in the current market it costs only $2.5k. But if you compare the quality, you will get the idea that that old AC is about $15k right now, cause it was so damn good and unbreakable.
Apartments are either "small" or "luxury". No matter what you do, you get smeared for building housing.
In Australia most of the narrative on the housing affordability crisis is around lack of supply and nimbyism. In the meantime Melbourne has dropped to 4th most expensive city in the country and becoming more affordable. Most likely reason - land tax change in that state which is turning off accumulating multiple properties through investment and investors turning to other states where prices are still going up. So, while supply is relevant, I would say it is investor demand that is driving prices up.
It’s not a coincidence that many abundists see nothing wrong with rent-seeking. They’re incentivized by it. Rent-seeking has corrupted market forces. Mao 2.0 will arrive eventually.
This reverses causation. Investors are involved because prices are going up, not the other way around.
"Investors buying up housing" is a common explanation alongside "short term rentals taking over" but neither make up a large enough portion of the demand to explain prices.
In a feedback loop, every element in the loop is both a cause and an effect. The way to stop the feedback is to shift one or more relationships in the loop.
If you are lucky there can sometimes be arranged some convenient control elements- but in many difficult problems a lever that you can pull that only affects that one thing doesn't exist. You have choices of levers that affect a multitude of things, maybe many of which go counter to the desired independent effect
I don't know what's so hard to understand about the idea that prices are high because the people who have the most influence over the prices want the prices high.
This is a very online oriented debate. Derek Thompson might hear mostly from left coded anti-trust types on twitter, but I really don't think that's the main opponent to abundance.
If you spend time in the individual communities where this battle happens, the voice of the classic NIMBY (worried about property values and crime) drowns out the left-NIMBYs that worry about "greedy developers" and gentrification. At least that's been my experience in West LA. Many of the less-online left critics eventually come around to realize that upzoning type solutions and public housing type solutions aren't actually in conflict with each other even if they disagree on relative priority and impact.
Gary's Economics claims wealth inequality is at the root of housing unaffordability. Basically as wealth concentration grows, the ultra-rich bid up the assets. See the price of gold doubling in the past few years. Government stimulus is also captured by the richest. It's also a global phenomenon, i.e., every major city is now unaffordable for most people.
https://youtu.be/BTlUyS-T-_4?si=P0mdHxtq1F7DV4jo
There's some truth in that, and I support the idea of shifting the tax burden from work to wealth. But I also think this is too simplistic. Remember that Gary was a financial trader, so he has a zero sum game perspective.
The UK had a decades long phase where they built a ton of affordable housing (council housing). This program was largely dismantled under Thatcher. Also over time, building regulations became more restrictive in the wrong ways, which makes supply more expensive.
Regulation plays a large role. But the right keyword is "reform". The right outcomes don't just happen magically if you deregulate.
There are places where housing got drastically increased in recent years, like in Paris under Hidalgo (7000 units/year).
Every metal, and really every commodity, has has recent price hikes above the official BLS CPI numbers.
That says far more about official inflation numbers than it does commodity markets.
This! Since our money is being inflated away, hard assets like precious metals, bitcoin, and real estate get bid up because those with cash bleed out purchasing power.
You have the causality backward - housing explains ~100% of the variation of inequality. If you liberalized zoning, excess inequality would more or less disappear: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...
Where I live, housing cost is directly proportional to school district quality - and local school funding (vs. state-level funding) is a significant cause of inequality.
Rapid growth of cheaper housing in a town is a financial challenge for the town because it creates a larger student base without creating a meaningfully larger tax base. In towns with a commercial tax base, the costs increase more than the tax base; in towns without a commercial tax base, taxes typically increase on the oldest / most established residents - which drives fixed-income people from the homes and towns they supported for decades.
In my suburban area, there are two main arguments to anti-growth zoning: (1) people don't want the density increase; they built lives in a less-dense area by choice and want to see that choice preserved. (2) There are legitimate school funding issues and tax base issues that encourage controlling the rate of growth.
I'm dubious of _any_ argument that finds a singular cause for housing prices. It's an extremely tangled and complex issue that touches on taxation, local control vs. state control, education, property rights, politics, a cyclical capital-intensive industry, immigration and labor supply, interest rates...
Personally, I vote for denser housing and more liberal residential zoning. But I also understand and respect the opinions of my neighbors who disagree. Looser zoning gives control of land-use to capital and takes that control away from the people who built and sustained the town for, sometimes, generations.
I know very little about economics so I can only parrot what I've heard from others but the consensus from everyone I've personally heard talk about Gary - not just Abundists - is that he's a crank when it comes to economics.
Really? I've never heard that. He seems reasonable to me. Can you provide a link where someone dismisses him as a "crank"?
I'd be interested to see whose opinion this is.
a quick google for 'garys economics critique' throws up a good few places to get started :) - I would summarise here, but I'm no expert and am just digging into this myself.
I had a quick search and there's a Reddit thread where the first comment is critical but they get corrected by replies. Then some right wing blogs that spend more time on ad hominem and remarks about "lefty" admirers than actually going into detail.
Did you find any intelligent criticism you can point out? I'm too lazy to trawl through endless stupidity to try and find a nugget of truth! :)
This doesn't make sense. Each wealthy family can only live in one house at a time. Yes, they might have multiple homes, but a billionaire having a luxury vacation home in Lake Tahoe or a penthouse in Manhattan are not the reason housing is unaffordable. The type of home a billionaire would buy would never be affordable anyway.
You assume they are buying homes to live in. I don't think that's a reasonable assumption. Maybe they buy real estate because it's a useful part of a portfolio. They can rent it or just sit on it and sell it later.
Renting it still increases the housing supply, someone can live there.
I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that? It’s a stupid and expensive place to park money. You have to pay taxes, possibly condo/co-op/HOA fees, pay someone to do maintenance and keep out squatters, pay transaction costs both buying and selling, it can’t be sold quickly.
Why would you do all that instead of just buying treasuries or some other liquid instrument that actually earns money?
There may be some of this from foreign investors that don’t have easy access to financial markets, but again, some Russian oligarch buying a $50M penthouse in Manhattan is not the reason an average 3 bed 2 bath suburban home is $700k. They are not remotely in the same market.
Banks will not loan you money to put it into the S&P. The wealthy generate money by generating credit in part.
They definitely will. JP Morgan for example charges SOFR+1.85% for 10M+ accounts[0], which is better than the mortgage rate they offered me. Or depending on what you mean by wealthy, you might be able to afford having someone get you a better deal by trading on the markets (e.g. selling SPX box spreads) assuming you don't have the expertise to do that kind of thing yourself/aren't interested in doing your own wealth management.
[0] https://www.jpmorgan.com/wealth-management/wealth-partners/l...
Why would you borrow money and use it to buy a house and leave it vacant? Now you're paying interest on top of everything else. Do you think wealthy people just light money on fire for no reason?
You rent out or naturally. If most buildings in a given area are rented out. Then the owners have leverage on the renters.
If there are more buildings than people who want to live in them, then the owners have no leverage. They have to compete for renters. You make that happen by building more housing.
But once you own a house, it's in your interest financially to stop others from building them. Either as a bloc or as a massive corporate landlord, pressuring cities to "retain the historic character of a neighborhood".
> I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that?
In high-demand areas property value often increases in value over time. You can literally “buy and hold” property, keeping it empty, doing nothing with it and expecting to sell it for a profit at some point in the future. It’s relatively safe and the rate of return can be significantly greater than inflation.
This ignores property taxes and costs of doing business of course. But there are also situations where you might want a reported tax loss on a profitable asset.
And zoning restrictions are part of the reason why housing prices "always go up." Constrained supply is exactly and precisely what makes housing a profitable investment.
One of many reasons. Supply is also constrained because people are buying it as an investment. It’s a feedback loop.
If I were extremely rich and had a lot of properties to rent in California, I’d look at relaxed zoning laws as an opportunity to buy even more properties.
Bill Gates owns 275,000 acres in the USA. I doubt he's even gazed upon half of it. The billionaires aren't buying homes to live in like us proles, they're buying lots of finite land and water rights and such.
That is about .01% of the US land area, and I’m guessing it’s not downtown in major cities or other places that people want to live. It’s probably mostly undeveloped wilderness for conservation, right? That has zero effect on home prices.
There is no shortage of land in the US. There are huge, huge empty spaces. There is only a shortage of housing in places where people want to live because local governments won’t let anyone build new housing.
Edit: Looked this up, and Bill Gates owns farmland, which is producing food, so this also wouldn't be available for people to live on anyway.
The housing crisis is a cultural problem. We don't want to build density, and we don't want to build transportation, because this all lowers housing values, and besides the millions of homeowners you'll piss off, you'll destabilize an economy primarily built on the mortgage. Not a good reelection plan.
The places you're seeing growth are places where we could buy the land for cheap: suburbs and exurbs. We build huge ass subdivisions and then we run highways to them. This fucks no one's housing value, it bails out struggling/dying land owners, the auto industry loves it, the energy industry loves it, people love their faux-castles with lawn moats, it's a full employment plan to developers, and it's essentially all middle/upper-middle class housing so it's thoroughly unobjectionable to the voting majority.
The reason cities in Texas are out building blue cities is that they just do the suburb/exurb thing. Blue cities don't: where are the workable SF or NYC exurbs? Abundance gets so close, it more or less blames bureaucrats and the Jane Jacobs veto points built into the liberal building process. But these things arise out of the culture on the left, and whether we admit it or not, we like the walled gardens we built. We like our multi-million dollar castles we've got something like $80k in. We like people not driving/riding trams/buses through our neighborhoods, and we vote accordingly.
I personally think this is intractable. I think SF/NYC/etc have reached the ceiling and if we're gonna fix the housing crisis we need to build density elsewhere. I think we should lean heavily into remote work, lighten the infra grid costs with off-grid tech like solar, lighten the construction costs with low-car built environments (few if any parking requirements, rail instead of huge highways for shipping/transit, etc), invest heavily in the schools, and subsidize people moving to these areas--like with cash, not tax rebates. This is essentially "build the exurbs", but the progressive version of it that better meets health and climate goals, while also building communities we know are better for human flourishing (less isolation, more eyes on the street, etc). Focusing on permitting reform or democratic veto points is way, way too small a vision here.
SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water.
New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs.
The US simply needs to build new cities, and link them with high-speed rail. You do that by taking federal spending (military bases, universities and research labs, tax cuts for large industries) and directing it to places that would fit according to a high-speed-rail master plan. Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions, but the lack of a larger master plan in helping link these regions with better transportation links and job creation has prevented them from reaching their full potential.
>Opportunity Zones have shown a lot of promise at helping to direct capital to under-developed regions,
Not really. All of downtown Portland, OR has been designated an Opportunity Zone[0]. "the Ritz Carlton Hotel that’s going up in downtown Portland was partly funded with these tax breaks."
[0]https://www.opb.org/article/2021/10/22/new-book-looks-at-por...
> SF is surrounded by water on three sides. Palo Alto was the suburb. San Jose was the exurb. You could build 50 story towers all over San Francisco and it wouldn't suddenly make it feasible to build on water.
> New York has a similar story. You can't build on the Atlantic. Brooklyn and Queens were the suburbs. Long Island and Hartford were the exurbs.
All kinds of places overcome these things. Pittsburgh, Hong Kong, etc. etc. Bridges and tunnels. NYC was doing this, but mysteriously stopped. SF and NYC don't even come close to densities in many Asian cities. You can think two things about this: we reject that kind of density, or we reject moving a city's center of commerce to a more geographically scalable area. For some reason, we put a low ceiling on density and refused to move where the jobs were, and I'm saying that reason was liberals culturally resisting it. We simply liked the status quo.
> The US simply needs to build new cities...
Extreme, full agree. Even if I disagree w/ you as to the causes of building woes in blue cities, I think we agree it's not worth it to fix. Let's try some new things.
> You do that by taking federal spending (military bases, universities and research labs, tax cuts for large industries)
Something that's different now than the last time we did this is that those large industries aren't gonna be (well, at least shouldn't be) places like auto plants or steel mills. I think the "large industries" part of your prescription should be some level of new tech.
> All kinds of places overcome these things
Yes, but it requires political will. America is rather characteristic (I want to say unique, but that's probably false) in its lack of political will to increase density anywhere that isn't already dense. Like I said, you're not going to suddenly see 50 story towers blanket San Francisco. This is why, as cities develop suburban and exurban sprawl to the point where the distances no longer become feasible to commute in an automobile, we need to develop new cities, with a strategy for reducing commute time between them (i.e. high speed rail).
> some level of new tech
I mean... it's not going to be datacenters, seeing as how they require a minimum of people and lots of power generation. So unless you have a suggestion, I would go with tried-and-proven approaches, yeah? A master plan for high-speed rail, with the budget to boot, is already a big spend of the innovation budget, the rest should be boring choices, right?
Nah I think we need to go big. This will require a big investment and we won't recoup it unless a big part of it is redoubling our high-end manufacturing and agriculture. This is stuff like robotics, sensors/chips/solar panels/batteries, biopharmaceuticals, modular housing, sustainable farming and textiles, etc.
> Jane Jacobs veto
As an aside, puts on Jane Jacobs defender hat I just want to point out that Jane Jacobs was on the record with the assertion that an ideal urban fabric was effectively small apartment buildings at densities well beyond what your typical North American city and suburb currently has.
It's deeply sad that Boomers took her ideas and distorted her message to preserve an ultra low density single family detached housing status quo.
https://viewpointvancouver.ca/2012/06/01/jane-jacobs-style-d...
Hey I think she was basically right (I think her ideas on local control are applicable way beyond building neighborhoods). But we have to admit the ability to get up at some board meeting and veto stuff was her idea. It wasn't perverted by people who came after. Jacob's herself used these veto points in her time in Toronto. I'm not saying she was wrong to oppose the stuff she opposed, but the ability to obstruct in this way was her idea.
yeah that is true.
It's a challenging thing to come down on in a clear cut simple way because there were a lot of things that that generation did fight against with grass roots neighbourhood democratic protest that are agreeable, such as fighting against razing neighbourhoods for freeway expansion.
The problem is that along the way somehow local citizens having a voice in how their city changes became a veto over development, and that veto became one dominated by those that had the most time to participate and dominate discussion, which were older, established wealthy, landowning residents. We didn't and still haven't developed systems for genuine real equitable participatory city making though I would like to think in recent years we are slowly making progress.
Oh I think it's getting way better. It's wild how fast this is all happening. People are alive today who remember when there were no highways and no commercial air travel. We're in extreme early days and iterating fast; I'm optimistic here actually.
this is sort of wrong though, there is a measurable increase in positive economic activity with increased density. you can increase housing in an area in a way that doesn’t mess with people’s existing home evaluations, at least in urban enough areas
That's interesting, are there comparable examples? Like, I'm sure China could do this by telling everyone what home values will be for the next 3 years while they build literally millions of housing units, but I'm skeptical we could double the density of SF without cratering its housing values or significantly changing its boundaries.
This makes sense, but as far as I can tell it doesn't really answer the question of whether the housing crisis is driven by "monopolies and the corruption of big business". It just rebuts a particular article's claims about whether the housing market is driven by monopolies in the homebuilding industry. But I would say the issue is larger than that. Monopolies and corruption in general have led to great wealth inequality and that is at least exacerbating (if not driving) a housing crisis in many places.
Monopolistic activity and corporate consolidation are driving up prices in many industries in the United States. Why wouldn't corporate consolidation be a major factor in driving up housing prices, like it is in so many other sectors? I am suspicious of journalists like Derek Thompson and Ezra Klein because their solutions seem to punch down on municipal governments and homeowners instead of punching up at our nation's corporate masters and elite class, who would be much more threatened by effective antitrust action against homebuilders than they would by a movement to deregulate zoning in cities. I am open to the idea that excessively restrictive zoning could be a part of the problem, maybe even a big part. But I am skeptical of anyone who wants to act like excessive regulation is the sole driver of skyrocketing housing prices. It doesn't hold water to me.
This opinion sets up corporate consolidation as the cause of all issue in the US. I don't think it makes sense for that to be the null hypothesis that needs to be disproven.
For this specific issue, homebuilding, and construction in general, are very regional businesses. There just aren't a few giant homebuilders controlling the industry across the nation.
There are certainly some antitrust issues with rentals, but they don't seem to be nearly as widespread as the housing issue in general.
I don't think the punching down vs up lense is a particularly effective way to analyz this issue. Nor do I think its easy to figure out who's "down" and who's "up".
From the article: a) there is not really monopolistic activity going on, and b) homes have a fierce second hand market which pushes down on this
Here's the political solution: Do both public housing and zoning reform.
Unlike zero-sum political disputes where there is a winner and loser, this is a rare issue where both camps can win without impacting the other camp.
What we should not do is give the left their worst ideas, like rent control or stopping AirBNB. Give them their best idea, which is public housing.
You realize that local busybodies hate both of those things and they're the only political group that matters
> Here's the political solution: Do both public housing and zoning reform.
You just described the Abundance agenda. Do whatever is politically viable to build more.
Housing crisis is just a result of increasing income inequality and the resulting real estate investment craze. The population of America (real demand) did not suddenly double at any state/city.
Rich have become so much richer that can afford bidding wars at unattainable prices. They can buy investment homes and be cashflow negative for decades in anticipation of the increased market bidding prices. Of course they oppose any sort of legislation that would increase competition.
The population of a place doesn't have to double, or even change at all, for prices to go up. All that is necessary is for more people to want to live in a place. Those with the $ to satisfy that desire will outbid those who don't and you can easily double/triple/10x prices with no change in population.
How come more people want to live in the entire US if the population is relatively flat? Prices are up everywhere.
The only answer is that the increased observed demand is a result of the increased investment demand (rather than native demand)
Your factual statements are wrong. The US population isn't flat over time, and housing (supply) decays over time. Prices aren't up everywhere, just the places people actually want to live.
Let’s see some data:
https://jabberwocking.com/we-dont-have-a-housing-shortage/
Housing construction exceeds the population growth for the past 20 years. But housing prices are skyrocketing especially the last 10 years.
Your figure doesn't contradict my claim. We have spare housing capacity in undesirable places people don't want to live (rural towns, small midwest cities). We have shortages in the (especially coastal) cities, where the jobs are. This is obvious from prices, which are set by supply and demand.
https://pbs.twimg.com/media/Gw_BQYXbUAEicud?format=jpg&name=...
This seems like it contributes to the problem, but doesn't feel like the root cause at all. Every homeowner, not just the ultra wealthy, has an incentive to oppose new housing. (Though in many metros any homeowner is automatically wealthy by some definition). The lack of supply seems like the core issue here.
What if the housing crisis is what's causing wealth inequality? Piketty's data pointed to this.
Definitely is a negative feedback loop. So I expect the trend to accelerate as long as foreign investment keeps flowing into the US in the same rates
Other than people claiming it, what actual evidence have you seen that foreign investment would be a problem if we weren't restricting housing supply?
If it is just internal money the bubble will burst. If you have the entire world pouring cash to bid on us real estate it can really go to almost infinity
The main reasons that international cash comes in is either speculation or offshoring money.
If the housing supply actually matched demand, the housing market becomes unattractive for speculation.
If foreigners are buying houses just to park their money, building more housing to meet the demand helps to alleviate that. This situation feels like a case where regulations designed to prevent housing supply from sitting empty can make sense but I have no evidence or story on how would need to be implemented to achieve that goal without negative unintended consequences.
> The population of America (real demand) did not suddenly double at any state/city.
The population has literally doubled multiple times, and housing supply has not increased. There used to be significantly more units per capita.
A lot of the time it's not rich people bidding over a home, it's people in a game of chicken to see who will put themselves in the worse financial position.
Too often people hear that some lions escaped from the zoo, and then hear that shoplifting went up, and decide that the lions must be robbing convenience stores.
Sometimes a problem and a cause don't snap together so obviously. I'm no fan of private equity but I've tried to inject some perspective into discussions on HN where people automatically assume that "private equity has operated in a space" and "there are problems in the space" form a complete mathematical equation and we don't need to look beyond them for any other factors.
It’s difficult to get a man to understand something when the value of his home depends on his not understanding it.
The antitrust pushback against regulatory efforts to increase housing development is approaching a reversal of that New Yorker cartoon.
[ set in an urban tent city ]
"Sure, we destroyed the expectation of dignified living standards, but the glorious fact remains that we've capped returns to certain shareholders."
"Abundance" is really just supply and demand 101. Which has proven to work over and over and over and over again throughout human history.
It's always pretty suspect when you first hear about the opposition to something in its rebuttal. I've heard lots of critiques of the abundance movement and this is my first time hearing anything about housing cartels. Maybe someone had this critique but it isn't the dominant strain of criticism of the abundance people. It feels like Thompson picked the weakest argument to debunk rather than one of the many stronger ones.
What are some of the many other, stronger criticisms of the abundance agenda? Maybe Thompson has replied to some of those, too.
Fish Tank Thinking is where your thinking is so constrained by some artificial walls that you cannot actually ... well actually think. It is the wages stupid. Let me repeat that. It is the wages stupid. What happens when a society is so brain washed that it cannot even consider that if you don't pay people they can't afford housing. Or cars. Or medical care. Or food.
If you actually have some desire to consider the problem rather than discuss how many angels can dance on a pin head, start with considering why "Inflation" is not a measure of anything thing, but rather the sound of one hand clapping. What is the other hand? Wages.
In this country rather than fixing wages we are discussing solutions that make things worse. Let us add tariffs so that people can buy less. Let's create tax incentives that create more housing people cannot afford, with the tax incentives coming out of the pockets of the people who cannot afford that housing.
While I 100% agree that there are wage issues, the question with housing is why it's growing faster than general inflation.
House prices seem to be increasing fastest in places with high incomes. This leads me to believe increasing incomes wouldn't solve this particular problem.
You seem to be guilty of Fish Tank Thinking here yourself.
Housing costs are not divorced from the laws of supply and demand. Raising wages creates increased demand for housing, but you still need the supply! Raising wages without increasing housing supply will just make housing more expensive.
Exactly! This video goes into this phenomenon more in-depth: https://www.youtube.com/watch?v=N_GLfxaYTYI&t=2s
This has actually been a known issue for over a century with Winston Churchill even commenting on it.
If wages go up, housing will assuredly go up as people outbid each other. Wage stagnation is a problem, but it's not the solution to the housing crisis. People would still be unable to afford homes as they get outbid by people who have slightly more than them.
Because if you fix wages, you fix inequality, and inequality is the entire goal of this coup.
Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong. I appreciate the attention he brings to the topic and his diligence in digging up stories but his own analysis is often just totally wrong. I don’t think he’s worth taking seriously as an analyst. Maybe as a reporter at best.
>Not surprising at all to hear that Matt Stoller got the economics of an antitrust issue wrong.
I mean he didn't. The article is legitimately straw-manning. All of his claims are not present in the source article.
It's a disgusting, sleazy piece of journalism.
So no, you didn't hear he got it wrong. You were lied to by the author.
I have a PhD in economics with a specialization in antitrust policy.
Fact:
“Matt stoller gets big, important issues wrong in antitrust all the time and his analysis shouldn’t be taken seriously.”
Source: me
You are welcome to cite that.
But he doesn't get them wrong. Your opinion on this is like a doctor saying the COVID vaccines don't work.
Sure you _might_ be a doctor, but your position is objectively deficient on this topic.
ALSO WEIRDLY, it's noticeable you didn't have anything to say about the fact that he's strawmanning.
You don't need a hyper focus in any field to see that's exactly what the author did. Or the fact that you don't seem to care about it.
Want to explain that one buddy?
A contributing factor to housing costs I don't often see mentioned is urbanization. In the 21st century, population density has increased faster in major cities than rural areas.
The picture is probably more nuanced in the last half decade (post COVID), with many people moving to the countryside.
Another factor is smaller households. People are staying single longer and waiting longer to move in with partners, creating more demand for housing even without population growth.
> So, Dallas doesn’t meet Quintero’s oligopoly threshold. Now let’s consider the rest of the country. I tracked down a complete listing of the country’s 50 largest homebuilding markets, from #1 Dallas to #50 Cincinnati. How many meet Quintero’s first oligopoly threshold (two companies = 90 percent of the market)? Zero out of 50. And how many meet his second threshold (six companies = 90 percent of the market)? One: Cincinnati. It turns out that the largest homebuilding markets just aren’t that concentrated
> I wanted to know how a careful monopoly-hunter like Roberts would answer the question: If six firms account for 90 percent of a local industry, is that automatic proof of a monopoly? “No, it’s not,” Roberts said. “The statistic isn’t totally vacuous, but there’s basically no useful information about market power in that statistic alone.”
---
> the number of new single-family houses permitted per capita in the Dallas metro area rose steadily between 2010 and 2022. (This is illustrated in the graph below[1].) I mentioned to Quintero that steadily rising construction per capita in a fast-growing city seemed like a weird example of monopolistic abuse.
> First, he uses 2006 as his baseline. This was a highly atypical year in housing. Just before the housing crash that triggered the Great Recession, May 2006 was the peak of 21st century construction employment. That very month was construction's single highest share of total employment since the postwar era. Using a bubble year as a baseline could easily throw off the overall findings of any economic analysis.
[1] graph clearly shows long term downward trend, with growth from 2010 to 2022 being entirely recovery post 2008 crash and still being below late 90s levels.
---
> The whole thing looks like a lawyer who arrived in Dallas with a conviction in hand and shaped the evidence to fit the indictment.
*spends entire article cherry picking evidence in an attempt to discredit one article specifically to advance a competing narrative.
>spends entire article cherry picking evidence in an attempt to discredit one article specifically to advance a competing narrative.
Worse than that. He's lying about what the article claims. Straw-man is too generous of a term, he's blatantly just making shit up.
Do you have an example?
Yeah. I wrote a pretty lengthy comment on it in this very thread. https://news.ycombinator.com/item?id=44751520
You could also just read the sourced article and it's pretty flipping obvious.
It's absurdly blatant.
As someone whose built houses as a contractor and subcontractor for 20+ years, I’d say these article has it mostly right, but misses two major factors in increased costs.
And that is permitting time/costs and the costs of complying with ever more stringent codes.
If we could build homes to the codes of 1990 and the permitting process was the same as it was in 1990, you’d immediately knock 20-30% off of the cost of construction.
What leftists and bureaucrats (and most people in general) never understand is the time value of money. Every extra day added to the construction of a $500K project is a few hundred dollars of interest costs, risk costs, and lost opportunity costs. Those numbers add up quickly. And nowadays, projects take much longer from idea to completion than they used to.
You are agreeing with abundance theory here 100%. The author of the article is one of the Abundance folks. The issues with code and permitting and environmental review take up a substantial portion of the book.
Am I wrong, or is this kind of a silly date range considering the housing crash was in the middle?
> According to the National Association of Home Builders, profit margins as a share of overall home-sale prices actually declined slightly between 2002 and 2024.
Over reglementation and over regulation is also destroying housing markets in Europe. In some European cities new homes are scarce and prices are skyrocketing. While politicians claim they are protecting the people and the environment.
This article appears to be focused mostly on the line of argument that there is some cabal of builders that keep housing prices high. This also mostly seems to use Dallas as a case study, which is weird, b/c you can't test a lot of other argument about the effects of building/permitting requirements.
It should probably instead be titled something like "This one anti-abundance critique on housing is wrong"
Where I live the city has gained 90,000 people in the past 5 years. It’s about 68 new residents a day or about 30 families.
They have been building houses as fast as possible here. When single family houses weren’t springing up fast enough then came the explosion of giant apartment complexes.
I am not discounting the actual economic causes mentioned in the article, but securing financing appears to be a major factor that slows things down.
If you like instances of people calling out citation misrepresentation, you may enjoy Brian Conrad's report about drafts of the California Math Framework: https://sites.google.com/view/publiccommentsonthecmf/#h.ko8q...
Sadly, many of the issues he called out remain in the final, approved version.
> The Builder’s Daily sounds like an anti-monopoly shop. But in our conversation, McManus sounded like a straight-up YIMBY.
This is a false dichotomy. His opponents are clearly claiming that oligopolies restrict supply. Therefore they are intending to be YIMBY even if they might be wrong about the cause of the restriction.
So this is a weird rhetorical attack that undermines the claims in the rest of the piece.
And now I think about it, it applies to the title too.
I find the term “anti-abundance left” odd. He wrote a book called “Abundance” laying out the case for deregulating zoning laws. Claiming global monopolies in aggregate seems more like a conspiracy theory. I thought the mainstream (left) opposition to deregulation was to subsidize affordable housing regardless of the cause.
Restating something I said upthread, but I think the right way to think about Thompson's rhetorical adversary here is "people on the political left who believe that antitrust is the high-order bit on housing affordability and that zoning reform shouldn't occur until after antitrust issues are addressed". He's arguing with people who are pushing back on legalizing housing density. He is not arguing broadly against the political left; in a reasonable US macro view of politics, he is part of that political left; there are people much further to his left that are nonetheless in lock step with him on housing, all of whom I believe he'd be thrilled to endorse.
Paraphrasing: along with a dozen other pressing issues, anti-trust was out of scope for this book.
> He is not arguing broadly against the political left...
Yes and: NIMBY vs YIMBY is (mostly) olds vs youngs, rather than partisanship. Witness the coalition behind the Montana Miracle (recent pro-housing legislation).
So far. As you know, most positions eventually get coded as left or right, as needed, to defend the corptacracy.
There really is an internal struggle in the Democratic party (totally natural after a major election loss!) and people are just inclined to read everything as taking one side or the other in it. Ironically, Klein and Thompson really tried to go out of their way not to take either side; in fact, most of the oxen that get gored in the book are establishment Democrats!
Quote: "I don’t see the value in discussing a “national” crisis in homebuilding oligopoly from which the 49 biggest metros are exempt."
I enjoyed most of this article, but it did slide into opinions periodically. This quote in particular stood out given the issues rural communities face regarding availability of competition in a lot of other services.
Agreed. Especially since more than 50% of the population lives outside those areas.
> … profit margins as a share of overall home-sale prices actually declined slightly
So the profit in real terms more than doubled? At a constant percentage home building and gas pumping both become more profitable when unit prices increase faster than inflation.
The vapid arguments around this topic are tiring.
> Small companies can have downsides, and big companies can have benefits. A virtue of scale is that it can provide resilience in an age of crisis.
Nassim Taleb would argue the polar opposite of this.
I like the article. Starting to make assertions about benefits seems premature.
While we’re debunking that can we debunk the weird leftist conspiracy theories around index fund companies like Blackrock “buying up all the residential homes.”
Yes, the largest index fund company that sells investment products that allow people to invest in indexes (entire markets) is going to defacto be a custodian on holdings across the entire economy, including homes. Operating the funds offered in your 401k doesn’t mean they own the companies that invest in residential real estate. It means you actually do.
If you have a 401k it’s actually you who is in this “secret evil cabal.”
>While we’re debunking
The entire article is just blatantly lying about what the source article says lol.
While, I am not onboard with leftist conspiracy theories, I find the defense of BlackRock a little odd:
"You have to force behaviors. At BlackRock, we are forcing behaviors." - Larry Fink, CEO of BlackRock.
I won't defend Fink's role in pushing the whole 2010s ESG mania, but they were ultimately toothless in that too, because they are a glorified custodian of funds...nothing more.
i hope the next part of his article covers the zoning issues. because I'm certainly not seeing the zoning issues making the homes be on bigger lots or requiring things like 3 car garages? If anything the lots in new tract developments in dallas fort worth are smaller and have less land using features like they don't have alleys. and then in Dallas city limits any small slice of land that can possibly be used for new houses have way smaller lots than any neighboring decades old homes.
the only instance I can think of that I know of is there as a historical black neighborhood near love field airport where Dallas changed the zoning to make redevelopment less profitable by requiring the houses take up less of the lot. This way developers can't build huge houses to offset the fact that the land is expensive or they can't build duplexes big enough to make them worth selling either. In fact there were a few duplexes going in to replace detached SFH and the developers were left in the lurch. I think even had to tear them down? I never followed up on the story. This was basically a policy to prevent gentrification by making the land less valuable by policy. Unfortunately gentrification and yimbyism seem like they go hand in hand because if you can develop bigger or more dense the property value goes up and people scream.
Where I can see regulation getting in the way is in the new codes. You can't build a house like you could in the 50s-70s anymore The code today is insanely expensive. Now those 70s houses weren't great. But they aren't didn't cost $200-300+/sqft at the low end.
in my view new single family housing can never be affordable because the cost is just so high. in fact. generic home ownership is as unaffordable as ever due to inflation. call a plumber to fix a leaky faucet? That will be $300. A new fence? $10k. A new HVAC system? $20k. A roof? $12k. These are all real costs for "small" homes. At least in the rental scenario the costs are controlled because not every single thing is a one-off. There are efficiencies at scale. If it's a housing rental company your maintenance guy is on a route, if it's an apartment you have building maintenance, etc.. The roof repair is a contract worth a million bucks where every roof is only $8000 instead of $12000.
It's absolutely a zoning issue. The Texas legislature is literally overriding large cities to force them to allow smaller lot sizes. Most of Dallas, for example, is R-7.5, which drives up cost because land is expensive and it requires you to dedicate a lot of it to your yard (max 45% coverage). Only a few areas, like some PDs in old east Dallas, have been rezoned to allow the smaller lots, though you seem to believe its all of Dallas city limits.
https://www.texastribune.org/2025/06/01/texas-legislature-sm... https://developmentweb.dallascityhall.com/publiczoningweb/#d... https://dallascityhall.com/departments/sustainabledevelopmen...
oh cool thanks. max 45% coverage is pretty low. I guess I must be thinking of some very specific developments that must have gotten variances.
He just did a podcast episode about envelope restrictions and how they're pushing the market for housing out of the sun belt. The subtext of all this stuff is ultimately zoning.
Increasingly, we're seeing home services companies like plumbing and HVAC owned by private equity. This is how you end up paying $300 an hour for the plumber (plus a $300 service fee just for showing up). The technician isn't getting the majority of that money.
Good rule of thumb is that if you see a home services company with billboards, or branded vehicles, they are going to be super expensive.
I feel lucky in the sense that I have both the physical ability and the skill to do almost all of my own maintenance myself. With what I saved on landscaping alone I was able to buy all the tools I needed for almost any project.
Long permitting processes also encourage construction of larger SFHs. The permitting cost is largely fixed whereas three profit margins scale with the value of the home which mostly scales with the size of the home
yes bigger houses to an extent are way more profitable because there is a somewhat linear relationship between sqft and value but houses have a lot of fixed cost. there's probably a sweet spot around 2500sqft in suburban/exurban Dallas Fort Worth to maximize the market for the house and still generate low $/sqft such that the guy building something bigger next tract over isn't crushing you on $/sqft.
that 2500sqft house is still $200-250/sqft way out in the middle of nowhere where the land doesn't really even factor in much.
All this is why I believe our best bet is allowing density. Even if one doesn't want to live in a busy city center, making this an option for those who want it, reduces demand and thus prices for people who want SFHs
For the Western US? It's all about water scarcity.
> The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.
ctrl-F "RealPage" - nothing. hmm.
ctrl-F "rent" - also nothing. really?
from about a year ago: Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Renters [0]
> The Justice Department, together with the Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, filed a civil antitrust lawsuit today against RealPage Inc. for its unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.
> ...
> Another landlord commented about RealPage’s product, “I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing…”
if I hear about antitrust in the context of housing policy, RealPage making it easier for apartment buildings to collude on rent prices is the very first thing that leaps to mind.
it seems like Thompson is being awfully selective about which antitrust-related criticisms he's responding to here. he seems to be focusing exclusively on building single-family homes, and completely ignoring the concrete example of monopoly power being used for apartment rentals, and antitrust laws being used to address that.
0: https://www.justice.gov/archives/opa/pr/justice-department-s...
Thompson is responding to a specific paper.
'One of the most detailed articles in this space is an analysis of the Dallas, Texas, housing market by the lawyer and writer Basel Musharbash. In “Messing With Texas: How Big Homebuilders and Private Equity Made American Cities Unaffordable”'
Musharbash doesn't mention RealPage either, so go blame him, since he doesn't think RealPage contributes to Dallas's problems.
> Thompson is responding to a specific paper.
yes, he's responding to [0] which was written by Musharbash and published in Matt Stoller's newsletter.
and as I said, he's being selective about what criticism he's responding to and what he's ignoring. because Stoller has also published, in the same newsletter, articles about RealPage price fixing [1, 2].
Thompson says:
> The antitrust left, however, claims...
if he's going to say "here's what the antitrust left believes" and then proceed to debunk it, I think it's reasonable to point out that his response is cherry-picking only part of what that "antitrust left" believes.
of course, if he wants to publish a follow-up article defending RealPage, I'd love to read it.
0: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
1: https://www.thebignewsletter.com/p/antitrust-enforcers-the-r...
2: https://www.thebignewsletter.com/p/up-to-a-quarter-of-rental...
It's not on him to rebut every single argument Stoller has ever made. Several arguments Stoller made were refuted by the authorities Stoller himself cited, which is both interesting to read and also telling.
Stoller is free to find similarly decisive refutations of arguments Thompson had made (they're unlikely to be forthcoming).
I think for this to be interesting to an outside observer, it should at least address the bulk of the debate around the topic. If the GP is right and it's missing the key points of the anti-abudance critique, then I'm afraid it's missing the forest for the trees and misleading to a general audience.
>Several arguments Stoller made were refuted by the authorities Stoller himself cited
That's not true. At all. That's what Thompson _claims_. Look at what was actually written.
It's incredibly sleazy writing. It's so one-sided it might as well be a celebrity gossip magazine piece.
I feel like not a lot of celebrity gossip consists of calls with economics professors who wrote cited papers discussing those citations, but we might just read different rags.
Notably, he never included the full conversation. It's almost like the question asked to the economic professors and their responses are completely different from the way the questions are presented in the article. Claims and questions the target article never mentions or implies.
I think there's like, I don't know, a few fallacies named for such practices.
But hey, don't take my word for it. Here's Musharbash very patiently dealing with this himself: https://x.com/musharbash_b/status/1950938130447479281
Also just some general life advice, if reading Thompson's article didn't didn't set off any red flags for you (regardless of what you did or did not know going into this conversation) I would employ a little bit more skepticism and spend a little more time reading the source material in the future.
Disagree with him if you want but calling Thompson a grifter makes it hard for me to take anything Musharbash seriously or want to dive deeper into whatever he's written.
"If you point out that someone I like is doing something bad, that's too uncomfortable and I'll just stop listening" - You
> It's not on him to rebut every single argument Stoller has ever made.
yeah, I never said it was.
Thompson himself says:
> Still, I wanted to spend more time engaging with the arguments of the antitrust housing folks.
he says he wanted to engage with the arguments made by the antitrust left.
which means he chose which of those arguments he was going to engage with.
and he chose to make this a 2-part post about why he thinks the antitrust left is wrong about homebuilding monopolies:
> Thanks for reading. Come back tomorrow for Part 2 of my analysis, where I’ll explain what really happened in Dallas and why I think unaffordability became a national phenomenon if the cause isn’t oligopolies.
now, if there's a part 3 where he talks about RealPage and antitrust as it applies to rentals rather than single-family homebuilding, I'll gladly eat crow.
but until that happens, I'm going to call Thompson intellectually dishonest, because there's a cute little sleight-of-hand trick he's doing here. his opening paragraph:
> The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.
he's saying some of the best criticisms of his book come from the antitrust left.
and that he's evaluated some of the arguments made by the antitrust left and thinks they're wrong.
if you miss the sleight-of-hand, you might come away thinking that he's responding to the best arguments made about housing by the antitrust left.
but he's pretty clearly not doing that. because the "antitrust left" argument against RealPage doing algorithmic rent-fixing (detailed in a 115-page federal lawsuit [0]) is much stronger than the "antitrust left" argument about homebuilding monopolies in Dallas (detailed in a Substack post by some guy)
0: https://www.justice.gov/archives/opa/media/1364976/dl?inline
Thompson writes these articles to deflect valid criticism.
Collusion among landlords can only work in a housing shortage. With an abundance of rental units, individual landlords would "defect" (in a game theory sense) and lower rents in order to fill their vacant units at the market price.
Don't we have a housing shortage? Also, many (institutional?) landlords are happy to leave units vacant and/or evict tenants spuriously for higher profits.
Yes we do. The OP's point is that _if_ there is collusion, building housing will help solve the collusion problem _and_ solve the housing shortage.
Spending effort on theoretical collusion which may or may not be happening is a diversion from the real problem, which is lack of housing supply.
Explain the economics of keeping units vacant in the face of increasing supply.
Maybe read the referenced article?
> it seems like Thompson is being awfully selective about which antitrust-related criticisms he's responding to here
He was responding to a specific critique of his book. So... yes. That's how that works.
I wish everyone who cares about the price of housing could go to a hearing like this one. Sadly, they happen in every community so if you're curious, you ought to go:
https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...
That is your housing shortage right there.
Now, Real page probably jacks up prices a bit. A bit multiplied by a lot of renters means real harm and it was probably worth taking them to court over.
However, at the end of the day, RealPage is simply not enough to get Los Angeles rents out of Houston property. Supply and demand are still where it's at.
You're claiming that your idea of 'X' is true, and for evidence of this, you're linking to a site that was created by people whose mission is to advocate for the idea of X.
Am I likely to be getting an impartial view of the situation from a source which solely exists to push X-related messaging?
Is such a group/site really going to give a fair shake to other theories Y and Z, or to conflicting data?
I care about fixing the housing shortage in the city I live in. I spend hundreds of hours as a volunteer, see a lot and read a lot. I'm pointing out what I see on the ground doing the work. And what I see is NIMBYs, not institutional investors or RealPage or 'foreigners' or whatever else the bogeyman du jour is.
If I were convinced the problem lay elsewhere, I would focus on that, because I don't have anything invested in the problem being a specific thing.
If you start digging into this issue you'll find every example you want. If you only challenge people you disagree with, you will remain wrong.
"You're claiming X is true, and providing me with a source you believe has good arguments for X being true. Very suspicious."
Why do people think they have a right to live wherever they want? The people Bend are happy with Bend as it is. If you can't afford to live there, move.
Why do people that happen to live somewhere believe they have a right to prevent others from living there? If you don't like who's moving to Bend, move somewhere else.
"Why do people think they have a right to control what other people build on private land? If you don't like what's getting built, move."
Why is the govt's job to control where people live? I thought individual freedom was a big part of the whole deal?
Can you cite some evidence of a place where RealPage's supposed power has led to a consumer harm like higher rents? I may be biased because my research has been cited by RealPage in their suit against the city of Berkeley, but to me RealPage just finds the market clearing price, and that's not particularly evil in my book.
Three major problems with housing economics.
The first two go hand in hand, and could elegantly be solved together:
1 & 2. Pervasively (and perversely), "property taxes" greatly undertax negative externalities, and then heavily (punitively) tax positive externalities.
1. The undertax is that only a fraction of property taxes are just for the land. Land is a limited resource, and "ownership" of land is exclusionary. Exclusion is a negative externality, which is ok as long as that is economically accounted for.
So taxing land more, would encourage more efficient and effective use of it.
2. Property on land is the positive externality. We all benefit when land enables higher active value. More housing, office space, etc.
But it requires investment to improve the usefulness of land, and we not only tax that, but tax it annually, an annual wealth tax!
This is highly perverse, in that it undermines the economics of increasing the productivity of land. Whether a land owner is rich or poor, the economics of putting work or capital into improving one's property come at the cost of being taxed on that improvement - every year - forever.
The solution is to only tax land, not property on it, so land is incentivized to be used efficiently, and investments that improve its active usefulness, are not economically disincentivized.
Making that change and renormalizing "property taxes", not just land taxes, for neutral public revenue, solves both problems with one stone.
A decade or so transition, would allow this change to happen, while giving land and property owners who have made investments under today's regime, time to adapt.
But the end result would be better for everyone.
More efficient, parsimonious, effective use of land. More investments and innovation in increasing property's useful for everyone.
Unlocked growth in real estate returns, as a market primarily based on improving net usefulness, with higher returns, than passive ownership. The latter providing no net benefit to society or the net real estate market.
Credit for the above analysis: Economist Henry George [0]
The third problem significantly compounds the problems of the first two, but would go away naturally if they were solved:
3. Markets take advantage of anything, even inefficiencies.
Given that land is a limited resource, that the value of land increases as investments are made in adjacent properties, even without investments in one's own land, buying up land (with whatever property is on it), and letting others invest in neighboring land is a very good way to get a reliable return on capital. Because demand for land is always going to up, even when used inefficiently, with the current tax regime.
This is an economically parasitical way to make money. It treats land like Bitcoin or gold, in prioritizing its use for passive returns, instead of investment in increasing its active value.
And "parking" of money, for its passive returns, is so reliable, that the financial instrument demand for land drives up prices. Not just by a percentage, but in a self-sustaining and compounding circle of ever rising prices. For an investment "use" that has no net benefit to society.
Resolving problems 1 and 2 would greatly reduce the passive return on land. Which would not only make land use more efficient, but eliminate the compounding pricing problems of near universal use of land as a passive parking place for wealth.
[0] https://en.wikipedia.org/wiki/Henry_George
So the simple easy to digest lie ends up wrong...
There's a common theme emerging here.
Abundance liberalism still seems like a poor attempt to curb the populist left to me.
Let's look at it from a high-level. "Fixing" the housing criris would require a major depreciation of housing assets. Does anyone believe the companies and individuals holding onto multiple homes will accept this without fighting? Of course not. The same people that are arguably responsible (directly or indirectly) for the housing crisis have a vested interest in it persisting. And we know how powerful their voices are with the establishment democrats, the ones this ad-hoc "abundance" movement defends.
There is no simple solution to this crisis, it will require something more radical than just tweaking some numbers on a spreadsheet.
I have the same view on it as you. The "abundance" people are carrying water for the establishment while trying to co-opt disaffected voters (who might otherwise find their way to the populist left) into a way of seeing things that won't meaningfully alter the status quo. Any solution to the real problems our nation is facing will require a shift of who holds power. The "abundance" folks are doing anything to distract people from the fact that this is all about power.
Correlation isn't causation - the post here says smaller homebuilders can't get financing right now, and so a supply shortage is correlated with larger actors who can, but it isn't caused by concentration directly. The question is if government can have remedies for broken markets other than breaking up companies, because here it sounds like "fixing builder financing" would help:
https://x.com/NewsLambert/status/1951100530341847343
Most interesting proposal I heard on this topic, is that the solution to housing prices is to ban renting altogether.
It's so radical that it's almost impossible to predict if it would be better or worse. But at least it had the moral ground that rent is one of the last remnant of pre-capitalist lords and barons economies.
The idea being it would commoditize housing. Millions of units would now be for sale, prices would drop, tons of people would now be able to afford buying. Home builders would be incentivize to build nicer, cheaper, as the competition would move entirely to the selling/buying market.
It's radical for sure, but I've always found the thought experiment fascinating.
What would happen to those who can't afford to buy? Say student just turned 18? Continue to live at home and gather some money for down payment? Who would keep these assets and maintain them until next buyer comes around? What if there is no buyer and they make loss?
There is nothing inherently wrong with renting. The landlords provide capital that renter lacks for time being. But due to supply constraints prices have been driven too high.
> What would happen to those who can't afford to buy?
That's what I find fascinating in the thought experiment, it forces you to think outside the box in these areas as well.
What happens to people today who can't afford to rent?
If prices were lower due to this, maybe mortgages would let you take a loan at 0% down-payment.
If you think of cars... What happens to people who can't afford a car? Generally there is public transit, maybe we'd have public housing.
You can still own multiple properties, you just can't rent it out. So the owner would have to lower its price probably, or find another buyer.
Or like another commenter said, maybe you could have lease to own purchase plans instead.
Prices would drop where homes are commonly rented. I suppose rent could turn into lease to own in the interim period. It’s an interesting idea, I wonder if any economists have played it out.
What about those people that have homes but rent out a room? Or a townhouse that has 3 units, but the landlord lives in one?
I guess they could sell the units or move to a smaller place, but I think there may be an adverse effect of potential housing staying locked up because there isn’t a legal way to preserve options of ownership. It may decrease housing in some instances. Which force is more powerful though, I am not sure.
Unfortunately this is the type of magical thinking that gets passed off as serious policy analysis based on nothing but anti-capitalist dogma. There is no evidence to support these conclusions, and in fact plenty of evidence that it would worsen the housing crisis.
> on nothing but anti-capitalist dogma
What I remember from the proposal of it, it was making a pro-capitalist argument.
Based on a quick AI chat it seems that: "Some argue this form of passive income generation through rent-seeking is actually parasitic on productive capitalism rather than being truly capitalistic itself, since it doesn't create new value or contribute to economic productivity"
I think this is what I remember from the article. They claim landlords are anti-capitalistic, and one of the last holdout of pre-capitalism in our economy. They argued banning this rent-seeking behavior was needed to turn the housing market into a capitalist one.
It wouldn't work. Good luck trying to enact that. Also, the amount of leftism in this thread is like a pure-sugar-diet for Marxists. When houses have no value, people don't value them. Look at what happens when you give large amounts of people free housing, what do they do with it?
I don't know about the left/right. But like I said, when I read this idea, it was presented as an argument that the housing market was not capitalist enough, and that was the issue. In order to properly make it capitalist, so it can act like our other markets, you need to ban rent-seeking and landlordism which are pre-capitalism models that date from the old days.
It would not allow for example the government to hand out "cheap to rent housing either".
That builders can't construct housing in whatever form-factor they want and whatever part of a municipality they want might be a problem. But the analysis of why these kinds of restrictions exist, to my mind, is not correct.
Do niche interest groups have influence on housing policy? Sure. But these niche interest groups don't usually have a monetary interest in the outcomes they're promoting. But individual homeowners (who often band into interest groups of their own) and large real estate conglomerates do have such a monetary interest. They consider certain types of housing built in a certain way to have *more value* and be worth more. So they promote politicians who introduce zoning and other rules to protect that value.
For someone looking to make a profit off of housing (or even to invest in housing), what is more appealing? A traditional U.S. suburb? Or a Kowloon walled city? One is denser, cheaper per capita, and (if you're not careful) unappealing to look at. In other words, it's worth less. So there is a great monetary pressure from people who already own homes to prevent "mixing" this type of housing into existing planned communities. People who need homes, on the other hand, are a little bit less discerning (to say the least). They don't have a monetary interest necessarily. They're primarily looking for a permanent residence.
So I just don't buy this "abundance" stuff in general. If you remove all of these restrictions, will some companies start building housing? Some will. But my guess is most will say the juice is not worth the squeeze -- the profit margins and the long-term values of these properties will make it unappealing. Just like it's unappealing for grocery stores to set up in big urban areas. Or for hospital providers to set up in rural areas. Food deserts don't exist because of too much government intervention. A lack of rural hospitals is not a problem because of too much government intervention. It's because those things are not profitable.
So in my opinion, if you want to reform zoning rules or things of that nature, it's only really going to be effective if you *force* (or if you want to be politically correct, "incentivize") housing companies to build in these areas too.
I don't really consider this an "anti-trust" argument. It can be equally true if there's a lot of competition in the housing market and if there's next to no competition. It's more of an incentives argument. This is an argument that, like with medical care, we're treating something that is a fundamental need of every living human to have a stable and peaceful and fruitful life as if it were a standard market commodity. And when you do that, you get poor outcomes. We need to support the building of housing *even if* it's unaffordable or has low (or even non-existent) profit margins
Y'all are discovering how censorship in capitalism works...
It's about volume(loudness), access(to data) and exposure(visibility).
Incredibly dishonest article. It's shocking to see people support this. And I love the way it's framed in a conspiratorial tone, and uses coded language to make you doubt this is a quantifiable problem.
All while he ignored many parts of the text he allegedly was critiquing. I'm still shocked that this is getting upvoted.
The very first sentence in the article is this:
>This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.
"Insists" is doing a lot of work here to support the rest of the article. But it's lies through omission.
>At a high level, I have never found these arguments persuasive
Irrelevant if it persuades you. This isn't a high school debate class, facts and metrics are what matters.
>One hallmark of a monopolistic market is rising profits.
Not even close to true in theory or practice. In theory, monopolies have ever way in order to set prices for whatever goal their after. They may also lower supply thereby lowering aggregate profits. Long term profits can justify anything now.
Anti competitive practices are mainstays of monopolies. Not whatever the author just made up.
>The Musharbash essay on Dallas—like too much of the antitrust left’s work on housing
Oh boy here we go! The boogeyman has been setup, the ominous "they" is out.. checks notes... make housing available for average people.
>is filled with out-of-context quotes, overconfident assertions lacking evidence, and generally misguided claims.
Pot. Kettle. Black.
The next 5 paragraphs are about him talking to Quintero. He starts by framing the issue saying Dallas is not a good fit for Quintero’s theoretical model or previous research, which Quintero agrees with. He then uses this agreement to act like he's right about everything else and even misquotes his "100%".
It was shocking to see how we just kind took one affirmative agreement for one thing and turned it into an agreement about another. Talk about hearing what you want!
But that's not the rub.
The rub is that the Musharbash's essay isn't referencing the John Hopkin's research paper (Quintero) to say DFW fits it's described model, it's that the use of a market intelligence broker has effectively made the firms act as single (or a few) unit(s), enough to make the DFW's conclusions relevant.
Here's the snippet from Musharbash:
>Over the past two decades, most — if not all — significant builders in DFW have converged on the same source of market intelligence to drive their decision-making: a consulting firm named Residential Strategies, Inc. (“RSI” for short). [0]
> [...] While RSI is reportedly careful not to share sensitive information or facilitate explicit collusion among builders, it does not have to do so to play a role in limiting competition. [1]
Moving back (unfortunately) to the Thompson article, here's his next little "misquote":
>Claim #2: Dallas housing experts say local homebuilders are monopolies who are “devouring” the market.
The article didn't even claim this. The quote the source articles quote DIRECTLY below the claim from Musharbash's article really highlights how far out of the way Thompson went to misquote it:
From Musharbash's article, whihch again Thompson also hilariously quotes:
>Indeed, “[t]he scale and sway of market leaders” — particularly D.R. Horton and Lennar — means they “often monopolize access to trades and vendor resources” in local markets, constraining the ability of smaller builders to build at all, according
Unless D.R. Horton is a "local", "Dallas" builder I'm not even sure Thompson misread this piece so badly. If he wasn't an established journalist I'd call into question his reading comprehension skills.
So I have to assume it's not stupidity, it's malice.
There's also a subtext claim here where he continues to talk with McManus about land use regulations. McManus says land use regulation is the primary and SINGULAR cause of the housing issue, but what Musharbash's article points out is that land use regulations and zoning laws really have changed while the issue continues to intensify:
> I discovered that pretty much the same dynamics afflicting blue states are also afflicting red ones — a fact that should have important implications for how we think about housing politics and policy in this country. [2]
> [...] not of land use regulations, which have remained relatively stable in recent decades, but of two critical segments of the housing supply chain: The homebuilding industry that builds new houses, and the resale market in which people buy and sell existing housing stock. Both have experienced dramatic changes over the past four decades [3]
This is exhausting, not going to lie. But let's continue.
>Claim #3: Industry experts have data proving that homebuilding oligopolies are holding back national housing construction [...] Did Lambert agree with the antitrust folks, who love to quote him so much, that the consolidation of big homebuilding companies was hurting housing supply?
No. Nope. No again. That's not what was written. Here's what was written:
>By facilitating high-priced home sales with these cut-rate mortgages, large homebuilders impose a double handicap on small builders while inflating property valuations in the region as a whole. [4]
> [...] The largest homebuilders benefit from this dynamic because they sit on large amounts of real estate whose valuations they want to maintain or raise, but it makes it that much more expensive for small builders to buy land to build on in the first place.[5]
>>By tying home sales and mortgages, Dominant homebuilders can sell their houses at higher prices with higher gross margins, while issuing bigger mortgages with bigger origination fees and bigger resale values on the securitization market. As their below-market mortgages get buyers to accept higher sticker prices, these inflated prices feed high-priced comps into local property databases — pushing land and home valuations up market-wide. The largest homebuilders benefit from this dynamic because they sit on large amounts of real estate whose valuations they want to maintain or raise, but it makes it that much more expensive for small builders to buy land to build on in the first place. [6]
The picture being painted here is not one of "no one is building houses" but people are building the wrong houses for the wrong reasons. And smaller, local builders aren't able to build the houses people WANT and NEED because the system is let's just say... self-fulfilling.
The big builder's aren't going to build you your affordable home. It's not just that they don't have to, but it benefits them not to. More homes at the appropriate market prices would cause their stranglehold to completely unravel.
Let me just tab back over to the article yet again and continue.
>Claim #4: “X companies account for Y percent of this industry” is a smart way to think about market concentration.
You know what, I'm actually done.
Terrible article. Terrible journalist. I would say he should feel ashamed but the fact that he's willing to be so dishonest on paper with his name stamped over it tells me he couldn't give a shit.
Full on Bullshit Asymmetry Principle (https://en.wikipedia.org/wiki/Brandolini%27s_law) on display here.
Links:
[0]: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
[1]: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
[2]: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
[3]: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
[4]: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
[5] https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
“Abundance” is neoliberal BS. Typical centrism, half measures that don’t actually make anything better and manage to make everyone angry.
This "Abundance" nonsense is simply liberal repackaging of Reagan's trickle down economics and deregulation. That's all it is. Reagan's policies were designed to transfer wealth from the young and the poor to the old and the wealthy. Abundance will do (more of) exactly the same.
The very best case fo housing deregulation as per this Abundance nonsense is Houston. And that's only if you have essentially unlimited land.
Private industry simply will not lower house prices long term. We need to stop with this nonsense of looking for market-based solutions and public-private partnerships.
The only solution to housing is for the government to maintain a sufficient stock of quality housing such that the private sector simply cannot corner the market to drive up prices.
The example I always come back to is Vienna where ~60% of the housing stock is owned by the government. Residents essentially have permanent leases. It's affordable and accessible. Vienna has some of the lowest rents in a European city.
The purpose of the modern Democratic Party in the US is support American imperialism and to not upset their corporate donors. "Abundance" only exists so Ezra Klein can get invited to all the cool parties, get speaking engagements and generally curry the favor of the billionaire class and the Democratic establishment. It's just a liberal face on Reaganism.
"your margin is my opportunity" will lower prices and does so in all areas of the economy that aren't highly regulated. The exception are of course cartels but Thompson shows here that those aren't present
How would government go about creating that additionl housing?
Sigh. The whole housing narrative has been hopelessly taken off the rails by well-meaning but clueless urbanists.
And quite predictably, once the poisoned fruits of their labors start to bloom, it's always the fault of capitalism. Or maybe foreign investors and private equity.
All I know is I moved to the Dallas area 4 years ago, and I'm still shocked at the housing affordability compared to where I moved from. Both in terms of absolute price and general overall cost of living.
I know this isn't how our political system works, but if I were king of America I'd try to solve the problem of expensive housing like this:
-Confirm housing is too expensive (for whom, where)
-Ask people why they think housing is too expensive and read some books on the topic
-Come up with a list of a few reasonable reasons from said reading
-try addressing those reasons with experiments in different locations to see what works (or check if someone has already done this)
-apply learnings broadly.
Instead our system is more like: -try to get elected and win points by criticizing others' ideas
-do nothing or spend a trillion dollars trying to solve it based on an idea a lobbying group told me is the reason housing is expensive
-be replaced by someone who disagree with me completely in 2 or 4 years
The first part of this may be overly simplistic but I got a good chuckle reading the second part.
The bigger problem, at least in my neck of the woods, is they're not building affordable housing. By-and-large they are building luxury apartments and luxury homes. We've torn down half the city to build luxury apartments that sit at 20-30% occupancy.
Building luxury housing won't help the housing crisis until the sellers are on the brink of bankruptcy and forced to sell their properties at a reasonable price.
Affordable housing is NIMBY whitewashing of reducing supply through rationining. (Note the supporters of affordable housing programmes count the largest landowning families in San Francisco and New York among their ranks.)
There is an article on the front page, right now, about Denver moderating its rents through construction [1]. We've also seen this in Montana [2].
[1] https://denverite.com/2025/07/25/denver-rent-prices-drop-q2/
[2] https://montanafreepress.org/2024/09/09/can-bozeman-find-rel...
100%
"Supply and Demand" is a law of nature.
If you build infinite luxury apartments, in the limit their value is zero.
Build more luxury housing and the inventory increases. If you've met the city's housing demands (which you probably won't since nearly every city is behind on meeting demand), then it follows that typically less desirable inventory experiences less demand and will subsequently experience a price drop.
The problem is nobody is building enough. The equations of taxes, property value, and developer profit all balance each other out and control the rate of building. Regulations slow this equilibrium even more.
A few policies that can help:
- Remove stupid regulations against building dense housing. Keep the fire safety regulations, but nix the multifamily zoning regulations, the building height regulations, curb space and parking space minimums, etc. There are so many NIMBY and outdated 1950's era regulations that make it costly and time consuming to break ground.
- Tax unproductive land use, eg. storage units and parking garages. This will convert those plots into housing and businesses.
- Heavily tax unused and dilapidated land that is not currently occupied by businesses or residents. Burned out houses have no place in the city. Tax these properties to the point that they fall into foreclosure and give cities the power to take over the land and sell it at a profit to developers. Give owners the chance to cure the issue, but make quick work of clearing these useless plots.
- More controversially, tax single family housing more than multi-family housing. Tax it proportional to how many people could live on the plot if it were occupied by a 10-story development. Or if you don't want to raise taxes, lower taxes on multi-family housing. This will encourage density.
- Give tax breaks to developers, apartment and condo complexes, and businesses that help underwrite development.
Note that these policies only make sense in dense metropolitan cities. Suburbs and rural areas don't need to operate in this way.
And housing is a substitutable good.
The people moving into the new luxury units are moving out of older less desirable units, which (with enough of this movement) see their prices decline
> "Supply and Demand" is a law of nature
It's a law of human nature. Value is inherently subjective, which makes deriving it from natural laws conditional upon a physical explanation for humanity.
Ecologists have been studying how groups of animals deal with famines, natural disasters, loss of habitat, climate change, etc for many years. These conditions change supply and demand on resources that are out of those animal populations control. Studying cooperation in bacteria colonies from a similar lens was pretty hot in academia in the late 2010s from what I remember.
Each animal defines value differently (heck, different groups of different people define value differently). A half-eaten sandwich thrown on the street is trash to you, but a jackpot for your local crow. The crow has no interest in the housing market though.
A lot of other models closely resemble economics:
- Computational systems, distributed systems, and operating system theory model resources and demand. They often attribute a cost to units of space, time, or compute based on availability.
- Ecological systems very closely model economics with respect to predator-prey dynamics.
- There are so many systems in biology that resemble economics. Evolutionary systems often increase gene dosage over generations in order to meet demand for gene products: polyploidity in plants, gene duplication, promoter amplification, etc. There are then also suppressive measures taken when deleterious effects arise. The balance of telomerase, etc. Within a living organism, there are the dynamics of apoptosis and proliferation pathways to follow the developmental program, to avoid disease states, etc. And then there are the biochemical flux of metabolites, etc.
Value is partly subjective but all value eventually can tied to the reversal of entropy. And the reversal of entropy costs energy.
It is naive to think the topic is wholly subjective. Subjectivity is one aspect of value but not only does the subjectivity coincidentally correlate with entropy reversal… but entropy reversal is also intrinsic to all value as even a human being alive and assigning value to something carries an energy cost. This cost is non trivial as it takes a lot for you to live and a lot more to have the luxury to think in terms of value.
> Tax unproductive land use, eg. storage units and parking garages.
Good luck doing that before you've fixed transit, which will take forever even with a miracle of political will.
There's that, but also it's more difficult to get mixed-density builds than detached homes developed, or the type of builds the left associate with "affordable housing".
While being able to build detached homes faster is nice and all for those on the market, for an effective YIMBY approach allowing density is preferable.
Plus, trying to sprawl out into perpetuity is putting cities in the hole. The suburbs are money pits that are subsidized by the city cores.
If US car sales were capped at 10 million cars per year manufacturers would immediately focus on their luxury brands and leave their regular brands out of stock. When you keep strict zoning, give NIMBYs veto power, let environmental review be weaponized as a delay tactic, you are capping new construction.
They did exactly this when supply chain disruptions limited the amount of cars they could produce.
Asking why they don't build affordable housing is like asking why don't they build used cars
This is a perfectly succinct way to put it.
New housing is simply more expensive; so it's marketed as "luxury", and it's sold at a premium to the higher end of the housing market. This reduces demand for the older, more affordable existing housing stock, and with depreciation and wear and tear, the new housing will become more affordable as time goes on.
If you're in a market with a shortage of housing, those with more money will simply outbid those with less, even for older, less desirable housing. I've seen it, where when I moved out of my last apartment before I bought a house, my landlady raised rent considerably when looking for a new tenant, and even then she got a tenant who wanted to pay her over the rate that she was asking for to ensure that they were able to get the apartment over all of the other applicants. Wealthy empty-nesters who were downsizing, and willing to pay a premium for an older apartment in a desirable neighborhood, forcing out anyone who might have otherwise been able to afford it.
So yes, while it does help for there to be some push to build more affordable housing, if taken to an extreme building only luxury housing will leave an unbalanced market, in a lot of cases building luxury housing is exactly what you want to do to reduce the competition for the existing, more affordable housing stock.
> New housing is simply more expensive
There is no natural reason for this to be the case. If anything, learning curves and economies of scale should result in new units costing less, not more, than ones built by artisans.
You would think, but constructions seems amazingly resistant to this. construction-physics.com writes extensively and convincinly on this.
https://www.construction-physics.com/p/sketch-of-a-theory-of...
Baumol’s Cost Disease means construction labor cost rises faster than productivity. We’re allergic to prefab construction - banks and insurance companies block it. A lot of construction workers left the industry after 2007. Baby Boomers are retiring and told their kids to not get a blue collar job. New housing has to be ADA compliant. People expect to give each kid their own bedroom and have two car garage instead of one car or no garage at all. Recent immigration crackdowns and trade wars are the icing on the cake.
> Baumol’s Cost Disease means construction labor cost rises faster than productivity
Baumol’s applies to jobs that “experienced little or no increase in labor productivity.” I’m arguing there may be extraneous causes for construction’s productivity stasis.
there are! Land use code. And permitting. Municipal processes for permitting housing have stifled any really serious innovation in construction.
you know why we don't have modular, factory built apartment buildings? Not at scale? Because the municipalities won't permit them. and the real reason they won't permit them is because it would put all their inspectors out of business if you didn't have to do any walls open inspections because it was all built in a factory...
> This is a perfectly succinct way to put it.
I think the entire analogy falls apart the minute you realize houses almost always appreciate while cars do the opposite.
Land appreciates. Houses depreciate.
Houses appreciate too. The materials and labor cost required to build my house have outpaced inflation by far.
This is most clear in insurance data where replacement cost is isolated from land value.
Houses depreciate if there's an adequate supply of newer housing keeping up with the housing demand of the area. If there isn't then the general GDP growth of the area in which the house is located dictates that the house's value grows as well.
Cars would appreciate the same way if we only let you build half as many as there are demand for. And kept doing that for 50 years.
With cars you can build a high margin luxury and a low margin affordable model if there are two buyers and collect profit from both.
With an apartment if there's one plot available, you build the high margin apartment.
Land constraints matter.
A 100% land value tax would help solve this problem and would make buying apartments more like buying a car.
When you build the high-margin apartment, people vacate other housing units to move into it, reducing demand on the older units, which reduces prices in the area. This is just the law of supply and demand, but you don't have to derive it axiomatically: it's empirically what happens when we increase supply at market rates.
I'd like a land value tax too, but it's not going to happen, and an LVT would guarantee market-rate development.
Your argument here is simply "rich people dont take second homes".
I think it's rather obvious that they do.
The number of rich people buying random unoccupied apartments in new multifamily developments has measure zero in the greater scheme of North American housing policy. Meanwhile: the construction of still more housing works against the interests of anyone who would buy a random apartment and hold it vacant as an investment interest, so this is a doubly facile point.
The project to build
https://www.libraryplaceithaca.com/
was almost a decade late, like a nuclear reactor, and they realized only after it was built that there is no market in our town for "luxury senior housing" because seniors with money go to Florida or Arizona. If they could fill the places you might say that it's better business to build expensive rather than cheap apartments but when these places are vacant you start to wonder if they are farming tax writeoffs or something
https://www.youtube.com/watch?v=9wfblqh9icQ
What you expect first is they are going to tell the local town they can't pay the property taxes, in a few years they'll tell the bank they can't afford the loans they took out to build it.
Other "luxury apartment" projects outside of Collegetown usually have some segment of subsidized "affordable" units, one of these has at least two police calls to it a day and in the last few weeks these have included murder and arson.
How are they still able to live in subsidized affordable housing after they are convicted of murder or arson? Don't we have jails for this kind of criminals?
Exactly -- all new housing is going to be marketed as "luxury".
Who is going to build a brand-new apartment and say "well, this is janky low-quality housing, you might want to live here if you're poor or something"?
I go outside and look at my neighborhood of bungalows largely built immediately after the war, they were not sold as luxury. They were sold as affordable housing.
Exactly
Plus housing you are mostly paying for the land. The land is expensive because it is finite and because zoning constrains how much housing you can build on it.
In many places the land is 2/3 the cost of the housing. The cost difference in building what left nimbys deride luxury and what would be considered affordable is really marginal. It’s like $100k in finishes in a $1.5M condo type difference.
r/cars swears up and down that they'd buy a brown manual wagon pre-used from the factory!
Because most people are out here driving used Ferraris and Koenigseggs and living in old mansions?
Your argument falls apart when you realize they manufacture and sell explicitly affordable cars. It's nearly half the market.
The problem is that you don't generally destroy the used car in order to build a new one. So increasing the new cars on the road eventually also increases the number of used cars on the road.
> you don't generally destroy the used car in order to build a new one
There is very little de-densification construction happening in hot housing markets.
De-densification isn't required; a one-for-one knocking down and rebuilding of a single family residence suffices.
> De-densification isn't required; a one-for-one knocking down and rebuilding of a single family residence suffices
Sure. The only reason developers do that is because land-use restrictions prevent the construction of denser, more-profitable and more-efficient housing.
Why don't they build $10,000 Ford Rangers anymore?
The same reason housing isn't being built, it was regulated out of existence.
This is the real answer, not the pat “no one builds new used cars” nonsense. It is entirely possible to build new, no-frills apartments that are 100% habitable and to code. But because of all the regulatory boxes one needs to check — namely all the fees spent, and time spent waiting for seemingly endless approvals — it is simply not possible to rent out bottom-dollar builds at a low market rate. The same logic applies for single family homes sold for purchase. The startup costs are just too damn high.
It's simplistic to say that the US car market is "regulated out of existence".
Consider how huge trucks that mow down children because they can't even be seen over the hood are unregulated, even incentivised. (1)
Wrong regulation, maybe. But not merely "too much regulation".
1)
https://news.ycombinator.com/item?id=36480122
https://www.nbcnews.com/news/us-news/americas-cars-trucks-ar...
https://www.vox.com/future-perfect/24139147/suvs-trucks-popu...
You are right of course. I was being flip. There are multiple reasons it is no longer profitable for car companies to make small trucks. CAFE regs are part of that.
> Why don't they build $10,000 Ford Rangers anymore?
Fleet economy standards.
Except that outside of Japan, it is unusual for detached homes to depreciate in value. Apartments though you do have a point. Unless the location adds the value they will depreciate over time.
It's not unusual at all. Here's a bunch in America just over the past 12 months and during a huge economic expansion with low unemployment.
https://www.realtor.com/news/trends/zip-codes-cities-home-pr...
Detached houses almost always depreciate in value everywhere and require constant maintenance expenses just to keep from falling apart. It's the land under the house that appreciates in value. People often mix those two numbers up.
Not my experience. Cost to rebuild and cost/sqft seem to outpace inflation.
[dead]
No… it’s like asking why they don’t build cheap cars. Which they do.
This is a fair point, but the analogies to vehicles don't really work anyway: they're a depreciating asset, houses are not. Even a tiny rundown place can cost millions owing to location.
But all things held equal, if you have a new house that's big and a new house that's small, the smaller one is cheaper. And further, mixed density builds will be cheaper than single detached homes. Beyond that there's nothing caked-in to the walls that makes a house cheaper or expensive. Shitty houses are just unmaintained, dilapidated. Flooding the market with houses will drop prices.
Do they? Are there any production cars under 20k? Plenty of used ones for that.
Building "luxury" apartments dropped rents in Bozeman, Montana, which is one of those cities that "everyone wants to move to"
https://montanafreepress.org/2025/06/23/has-bozemans-rental-...
When housing is scarce, all housing, even 100 year old dumps, will sell or rent at luxury prices.
No one is building apartments made of solid gold or concrete mixed with diamonds. They are building thoroughly ordinary buildings of concrete, wood and drywall. They fetch "luxury" prices & rents because for each one that exists, there are 40 ppl trying to live where, so they raise the price or rent to capture the riches of the 40, despite there being nothing particularly special or expensive about the physical structure.
You can do this with non-profit/govt/social/public housing too - if there isn't enough of it, every unit will require a "luxury" of time to wait for it to become available, even if the nominal price or rent is affordable.
Building only affordable housing is how you get cities into a downward spiral. The people who want luxury housing are the well-to-do. They probably contribute 10x the sales tax per capita than the people who live in affordable housing. And almost by definition luxury housing causes more property tax to be paid to cities than affordable housing. Both sales tax and property tax revenues shrink. And the city gets into a fiscal crisis. The city reduces services. People leave. Housing becomes more affordable but also more undesirable.
Luxury is just a realestate buzzword that means newly built and has stone countertops. Nothing that actually meaningfully impacts the pricing.
The vast majority of "luxury" properties are just regular property that spend a marginal amount on nicer appliances and finishing.
No matter, it comes down to what people will pay for. At the very least they're selling/renting to people with more wealth.
Yes, new builds are targeting wealthier people. Those wealthy people then move out of their previous housing and that becomes the affordable housing. Like another commenter pointed out, you can't get affordable used cars without producing new cars.
Today's affordable housing are the "luxury" units from 30 years ago. If you want to decrease the cost of housing you need to build more of whatever people will buy.
Presumably, if they're sitting at 20-30% occupancy, somebody (like the developer) is going to be having trouble paying their bank loans. You understand what happens next? (hint: prices plummet). If that isn't happening then your diagnosis of the problem is very likely wrong.
Toronto's housing market has a similar problem, except they also mostly built one bedroom shoeboxes for investors. Will be interesting to see how this unwinds[1].
[1] https://financialpost.com/news/toronto-condo-market-falls-of...
Where is this city with 20% occupancy?
Agree. I am not seeing starter homes being built in Omaha. They keep moving further out west, north and south — there's nothing there but fields and fields. I'm not sure that they're in anyone's "back yard".
And yet, they build expensive homes because (I assume) that is where the bigger profits are.
This is one of the funniest articles I’ve read in a a long time. I’m not sure what is better, the “I quite literally set out to find support for my narrative and find exactly one (1) guy that’s both willing to call himself an expert and give me my desired answer for each of my individual points” thing or the lazy neocon virtue signaling
> The antitrust left
I love this phrasing. Derek Thompson has done some Serious Journalism and has discovered that if you support competition between homebuilders you are a Leftist.
Also there isn’t a concentration of homebuilders (in Dallas) but even if there was it doesn’t affect prices (in Dallas). Well there may be a concentration of homebuilders nationally, but Thomson spoke to a guy that doesn’t care about that. Anyway, wasn’t the takeaway from the Great Recession that monopolies are good?
But then I’m not sure he knows what a monopoly is
> If a homebuilding monopoly purposefully made crappy new homes, they’d be out-competed quickly
Or what is a good outcome or a bad outcome
> Can big companies hurt subcontractors by forcing them to accept lower prices?
> “Maybe, but if big homebuilders can offer trades longer guaranteed contracts”
Hmm… they can force subcontractors to accept lower rates, but that’s not that big of a deal because they can force them to accept lower rates for a longer period of time. Like for example it would suck to have your paycheck cut in half but knowing that there’s no chance of it going back up for several years would take the sting out of it. This is the reasoning of somebody that took a Hat Man dose of Benadryl