Beautifully put. This is a point I don't see often enough. Why should a system allow one person to own two homes and then rent one of them out and use it to pay off mortgages for both.
Housing is a human right. Vienna is a beautiful example of this: https://www.theguardian.com/society/2017/dec/12/vienna-housi...
A system involving rent controls may be easy to sell because it's a solution designed to satisfy existing tenants on the expense of prospective tenants. That doesn't make it a more fair system than one that operates on free market. Then if that's not enough, we have to be aware that when the market laws aren't the one that rule, other things are. For example, in the communist setting housing were provided "fairly" to anyone, so that the desirable locations had in them apparently all kinds of people. Only that many times the selection were far from random and you could bet value (in various forms) had to be exchanged under table. So Vienna? I wouldn't be surprised if on a closer look I'd find something gaming the system at some level. Let's say, (hypothetically) that some club rents out properties to its members, and whereas rents are regulated, club membership fees aren't.
I'm curious to understand why you aren't talking about the issue of people being unable to own their own home. Would you yourself really want to pay rent to another human your whole life? Probably not, right?
The fact that you focus on the market (and seeking a perfect calibration within the current capitalist system), and not on the original parasitic nature of absentee ownership and the bourgeois hoarding of capital (in this case housing stocks), already quickly shows me that you might not be very in touch with your fellow human beings and that you don't understand the real (and diverse) systemic oppression many people face (e.g. https://www.youtube.com/watch?v=qWSVG9nsRa4 [use yt1s.com to download if not in US], and also in the global south: https://www.youtube.com/watch?v=mleQVO1Vd1I).
> For example, in the communist setting housing were provided "fairly" to anyone, so that the desirable locations had in them apparently all kinds of people. Only that many times the selection were far from random and you could bet value (in various forms) had to be exchanged under table. So Vienna? I wouldn't be surprised if on a closer look I'd find something gaming the system at some level. Let's say, (hypothetically) that some club rents out properties to its members, and whereas rents are regulated, club membership fees aren't.
Your critique contains many unfounded assumptions, as well as generalizations, which distort what is really happening on the ground. The exact same argument you've made here could also be made about the current capitalist organization of housing: e.g. "I wouldn't be surprised if on a closer look at the capitalist organization of housing I'd find something gaming the system at some level." Capitalists game the system with the help of the bourgeois state, and collude to violently force people to work within capitalist production using capitalist-owned means of production (in the case of a software engineer/knowledge worker, proprietary software/hardware systems). When capitalists withhold this means of production it leads to the division of labor and alienation (this reaction to exploitation, this alienation, being something that unfortunately capitalists gaslightingly weaponize and label as 'individual failures', and calling it 'depression' [1]). Capitalists, together with the capitalist state that enforces bourgeois laws (which benefit only a very tiny minority), coerce laborers to forever pay them to rent their homes. They are to be kicked out and made homeless unless they participate in the bourgeois property system and the bourgeois production system. You're suggesting that the status quo, and the rules of the game, are somehow fair, yet we live in era where there is an incredible gap between the rich and the poor, the dynamic between capital-owning capitalist exploiters and exploited wage laborers. [2]
Why do you not talk about people being able to own their own home? Would you yourself want to pay rent to another human your whole life? Probably not, right?
Alastair Parvin from Wikihouse has a great take on the origins of this weird thing called 'rent':
"The origins of our land system
Like all journeys forwards, we have to begin by going backwards.
So where did our land system come from?
Weirdly enough, the land system that we have today has its origins in a problem specific to medieval kings, which is ‘how do I fund military campaigns and defence, without paying to keep a standing army?’
And it was William the Conqueror who perfected the answer. It was a piece of paper. And on that piece of paper was basically an agreement between the Crown and a noble, saying ‘if you provide men for military campaigns when I ask, in exchange I will grant you a monopoly over your own private fiefdom, where you can levy as high taxes as people can bear to pay’.
So effectively — rent is the original tax, paid via lords to the King.
In fact the word ‘feudal’ derives from the latin word feudalis — for ‘fee’. In other words, rent. So the whole system of government by which the Normans ruled over the Anglo Saxons was based on rent.
If you’re a King, there’s only really three groups of people you’re scared of: other kings, your family, and your nobles. So over time landowners managed to engineer a set of concessions, whereby increasingly taxes were levied directly on people and business, leaving them (the lords) as the owners of a monopoly right to extract privatised land tax.
So what you’re left with is a set of power relations in society: an enforced system of servitude and control. As the economist Henry George pointed out, it is essentially a diluted version of slavery.
“Ownership of land always gives ownership of people… Place one hundred people on an island from which there is no escape. Make one of them the absolute owner of the others — or the absolute owner of the soil. It will make no difference — either to owner or to the others — which one you choose. Either way, one individual will be the absolute master of the other ninety-nine.”" [3]
[1] https://www.theguardian.com/commentisfree/2012/jul/16/mental...
[2] https://www.theguardian.com/commentisfree/2017/mar/30/wealth...
[3] https://alastairparvin.medium.com/a-new-land-contract-684c3b...
Some incentive to avoid typical real estate inflation where investors jump in first needs to be put in for a successful experiment with goals that are beyond monetary concerns.
Are you aware that continuing to build tall buildings murders the planet, and thus humanity? [1] [2]
Does your proposal include any sort of mitigation for the environmental impacts of building tall buildings and using cement (as revealed by researchers in the articles below), or is this Silicon Valley "technological solutionism" [3] together with a belief in "The Californian Ideology" (both of which posit that any problem can be solved with a technological innovation, instead of by actually addressing the underlying socio-economic of the previous solutionist strategy), by someone who has unfortunately fallen victim to the fallacy of transferable expertise?
[1] https://theguardian.com/cities/2019/feb/25/concrete-the-most...
[2] https://theguardian.com/artanddesign/2020/jul/11/skyscrapers...
[3] https://technofilosofie.com/wp-content/uploads/2020/04/Cours...
I completely buy that skyscraper have higher fixed costs then lower buildings. It can be true that the optimal height from energy expenditure per capita would be 5, 8 or 12 stories. Or it can be false and sckyscrapers are the best energy investment per square feet of living space created. Your links don't provide any evidence either way.
> If you can undercut existing cities by a factor of 3 or more i am sure new people will come.
> Some incentive to avoid typical real estate inflation where investors jump in first needs to be put in for a successful experiment with goals that are beyond monetary concerns.
and then you wrote:
> Your links don't provide any evidence either way.
Your comment and the original post do not provide evidence to prove any of your points either (either way).
I am saying: why hasn't a strategy like this been tried before if it seems so obvious to you both?
I see it as a sign that an expert in one domain believes they can solve a complex issue in another domain without much effort. In other words, as mentioned above, I see them/you as having fallen victim to the fallacy of transferable expertise: believing they/you can solve domain specific problems in a domain in which they/you are not an in expert in - as made obvious by the fact that this proposal is stated without any links to current research/plans (which undoubtedly do exist).
I think the above is important to point out, mostly as someone who fell victim to both, and who wants to warn others who might still be unconscious perpetuators of the Californian Ideology. It's dangerous. This excerpt does a good job at explaining it (although for a proper tl;dr version/critique, the best part is probably the 'As the Dam Bursts...' intro):
"Across the world, the Californian Ideology has been embraced as an optimistic and emancipatory form of technological determinism. Yet, this utopian fantasy of the West Coast depends upon its blindness towards - and dependence on - the social and racial polarisation of the society from which it was born. Despite its radical rhetoric, the Californian Ideology is ultimately pessimistic about fundamental social change. Unlike the hippies, its advocates are not struggling to build 'ecotopia' or even to help revive the New Deal. [...] Interpreted generously, this retro-futurism could be a vision of a cybernetic frontier where digital artisans discover their individual self-fulfillment in either the electronic agora or the electronic marketplace. However, as the zeitgeist of the 'virtual class', the Californian Ideology is at the same time an exclusive faith. If only some people have access to the new information technologies, 'Jeffersonian democracy' can become a hi-tech version of the plantation economy of the Old South. Reflecting its deep ambiguity, the Californian Ideology's technological determinism is not simply optimistic and emancipatory. It is simultaneously a deeply pessimistic and repressive vision of the future." [1]
[1] http://www.comune.torino.it/gioart/big/bigguest/riflessioni/...
edit: I also enjoyed this https://www.metamute.org/editorial/articles/californian-ideo...
They should have said that the value of houses in smog-ridden areas will go up, which is independent of their price.
IANAE
However if the baker is paid in pennies, has cost-of-living in pennies, but owes the banker £1000000 for his bakery shop, this causes problems. Same with back taxes etc.
On the other side, inflation is hazardous to creditors: the lender gets back less than they originally gave out (creditors also include those holding bank deposits)
Debt aside, I would maintain that if people can barely afford bread, they are likely not buying cars, washing machines, or other more expensive items. That seems like a recipe for a vicious cycle where society ends up regressing towards individualism and barter, with less economic strength.
I'm not sure professional economists are either...
Why it is not in my interest if I can resell my fridge with upside after several years of using it?
This is a good thing because it ensures that food is used by the most productive and profitable citizens, right?
We have more empty houses than homeless people. Efficient market my ass.
Currently the most profitable use of land in London is building luxury apartments that are bough by Saudi and Russian billionaires who never live there or even let them out. They wait for their price to go up even more.
During covid 700,000 people left London, but real estate prices grew.
Price controls don't work, except for short term periods.... when you have a temporary disruption of few weeks (for an earthquake, weather, etc).
In long term famine, food that is price controlled disappears from shelves and almost never makes, and is resold in black markets at 3x the price (or whatever the market is).
Increasing food prices cause more food to be grown and food to be shipped over longer distances, lessening the impact of a famine. It also causes people to spend less on luxury foods that cost more per calorie.
> We have more empty houses than homeless people. Efficient market my ass.
Have you bought an unused home and given it to someone homeless lately? There are many that are quite inexpensive out there.
On the whole, I agree that our current housing and property market is not as efficient as it could be. One reason for this are our building codes; they raise the cost of housing making truly inexpensive homes illegal. There is definitely a lot of benefits to living in a properly–built house, but that is always going to be more expensive than a shack you built yourself on land you claimed from the wilderness at the edge of a growing population. When governments eliminate that possibility, they cause people to go homeless. I suspect that you will want to “fix” this by having the government step in and buy a house for everyone who wants one.
The bureaucracy expands to meet the needs of the expanding bureaucracy.
Yes, this doesn't work with land.
I don't know why anyone would believe that. It doesn't even work in places with no zoning restrictions at all. Building up gets you more housing, sure, but it also costs way more cash per square foot, it inherently drives the price of all nearby housing higher.
> higher housing prices cause people to reduce the square-footage they occupy as well.
This is just "famine" being spun as a benefit. "Bread prices at $10,000 per loaf and rising is good, actually. It will help those silly obese Americans lose weight!"
Your point is apriorism and not supported by evidence.
Interest rates go down, housing prices go up.
What people are buying is not a house, but a loan. The cheaper the loan, the more they buy.
I think most people would be shocked to learn that when a bank lends out money, they are actually “cloning” their money many times over: each dollar from their reserves actually gets loaned out multiple times over, to multiple people (such that e.g. 100 people all have claim to the same 1 “real” dollar that exists, although it’s not actually tracked that way). But because almost nobody uses physical cash any more in large quantities, no actual cash needs to be printed to cover this. Then, if/when the loan is later repaid (which again is not a physical transaction, but occurs as numbers being updated in balance sheets), the repaid “clones” get “erased” from circulation, and only the real original reserves remain [1]. The banks keep the (greatly multiplied) interest paid though as profit.
You (as a mere peasant) are not allowed to clone your money and lend/invest it out, but banks are (in fact, this is essentially what makes a bank a bank), and it’s called “fractional reserve banking”. Some argue that this is very unfair, and argue that this is actually the root cause of a lot of financial problems and wealth inequality in the world.
For example, this system inflates prices (usually starting with investment assets like land, stocks, etc. but can later trickle down and in very delayed way start to inflate food prices etc. too), due to this expansion of the money supply (commonly called “money printing” even though no actual printing needs to occur) being funneled through financial institutions and into various investment assets and derivatives.
[1] Note that in practice, the total amount of outstanding debt tends to increase over time, because old debt just ends up getting replaced/refinanced with newer debt of even larger size (e.g. due to decreasing interest rates). This creates a system where the global economy is essentially “addicted” to perpetually increasing amounts of debt. The official stance though is that central banks should be able to unwind this debt when we are in good economic health, but this is debated; for example, I don’t know of any case in modern history where overall money supply has actually been decreased without markets immediately panicking and starting to crash (after which the central banks always quickly give in and reverse course, usually re-inflating the money supply far more than even before).
Starbucks in London is staffed with poor sods who travel for 2 hours from outside the city to take their shift for hardly above minimum wage.
You could accelerate this by making employers pay for time spent commuting to and from work, but that will not be a panacea; it will eliminate some jobs that people rely on. The person in your example might end up completely unemployed, and given the choice they might prefer to commute for four hours per day than to be completely unemployed.
Historically some people sold themselves into slavery, should we bring back the good old days?
Also, how does any of this prove that having people travel 4 hours a day is economically productive?
> Also, how does any of this prove that having people travel 4 hours a day is economically productive?
It’s manifestly more productive than being unemployed. It might be a bad enough job that you can barely tolerate it, but that’s better than starvation. An employer whose employees are this close to the edge is taking a very large risk. If any alternative opens up, or if the job conditions get any worse, then they will suffer fatal turnover. They’ll either have to pay higher wages or improve conditions (or both) to survive, or their competitors will do it for them.
For jobs that pay above minimum wage, that's what already happens.
I certainly agree that it would be nicer if everyone could live in as nice a house as they wanted, located in as nice a place as possible, and if they could always eat all the food they wanted without regard for prices. We should aim as much as possible to build our world along those lines. But we must also recognize that it will only happen once we’ve built a Dyson swarm so that we have enough energy that it can be given away, and we’ve developed actual Star–Trek–style replicators (using nanotechnology, most likely, rather than teleportation) that produce as much food as people want without consuming any time or effort on the logistics of growing, preparing, shipping, and preserving food. But most everyone would still want to live in the big city, so land prices would still be a factor.
On the other hand, with a growing Dyson swarm we can start making as many O’Neil cylinders as people want. Even so, there will always be some places that are popular and crowded, and others that are almost empty and peaceful.
Even in novels like the Culture series, where free energy and free living space abound, there is still scarcity and economics. You might have heard of a really great place to live on the other side of the galaxy, but do you really want to pay the price of moving there? Sure, you wouldn’t have to buy any property there, or pay someone to move your stuff (in these books anyone can just hop on the next passing space ship and make their way to wherever they want to go, because those ships can house millions or billions of people.) But you would still have to pay the cost of the travel time, potentially years of it. You would eventually lose contact with the friends you have, and the place you grew up. All of these things are scarce, and it will cost you some or all of them to move across the galaxy. It would be nice to live in a civilization where those were the only costs, but it’s important to recognize that we haven’t built it yet. We can’t just legislate that people are not allowed to be poor until after we’ve eliminated the scarcity of physical goods.
Imagine we talked about anything else like that: 'bread is getting more expensive by the minute in Germany" - thats not a sign of doing well.
We all pay for this real estate not just in rent, every time we get a coffee a good chunk of that price is paying someone else's rent. In wages.
Just because you are a homeowner does not mean its in your interest for realestate to go up, any more than if you own a fridge it would be in your interest for fridge prices to go up. Anyone who ever plans to trade up to a bigger home, has kids that will need to buy a house, or needs local economy to function does not benefit net from house prices going up. The only time you profit is if you are a massive landowner or real estate business.
Its literally blood-sucking leech
The economy is doing well when neccessities of life such as housing, food, etc. Are as cheap as possible and then you do not spend 90% of your effort and income just to keep wolf from the door.
This disconnect between how we thing about housing and other goods is like a collective madness of oursociety