I live in a popular vacation destination. The locals didn't panic when wealthy multiple-home owners started buying up houses because ... their property values were increasing! Now local business can't find workers, towns can't find employees all because housing is out of reach for the working and lower-middle class. Like boiling a frog, most people won't care until it's too late.

> towns can't find employees all because housing is out of reach for the working and lower-middle class.

Why not simply increase the supply?

That's always the answer. For some reason it's makes some people on here angry, but the only long term viable solution to expensive housing is to end NIMBYism and draconian zoning laws. Anything else is a short-term half-measure, including affordable housing, rent controls, etc.

If you want to actually solve the housing crisis, you just have to build more housing. It really is that simple.

> For some reason it's makes some people on here angry

It's because some people here own real estate and don't want to see YIMBY policies that would cause their rental income to fall

Or maybe there's an ideal size for a given area based on geography and maybe many areas are already at that size.

Stop inviting more people then, why do you hog all the jobs and then complain that people are coming to the place with all the jobs?

A single family home is never the ideal size for any amount of geography.

A single family home is the ideal, period. Ideally with ten or more acres.

Some people would increase density until we're all living in Blade Runner hoping it would make rents drop.

If your goal is for housing to be affordable for the average person, a single family home is never the ideal for any piece of geography. It just comes down to priorities.

Saying it twice doesn't make it less wrong. The priority is never packing as many people as possible into a given area. Its quality of life.

It might be ideal for the family.

It's a geographically limited space which limits sprawl and there's a lot of density laws and zoning that limit height. Lastly, NIMBYs block and delay affordable housing developments for a variety of reasons: "traffic" "change the character of the neighborhood" etc. Just getting "accessory dwelling" allowances was a battle for each town in the region.

The supply was fine before multi-home owners and property management companies took up most of it and jacked up the prices. Increasing the supply would only increase the wealth of the homeowners, it won't lower prices.

Increasing the supply means building new buildings, and that often means building huge lots of five-over-ones, priced as luxury apartments in a growing market. The people building the new supply expect to make a profit, and in a market with growing prices, they aren't selling for less than what they think they can get out of it.

We see this in big cities where vacancies are at an all-time high (aka a lot more supply), but prices aren't going down.

I do real estate for a living and this opinion is like a zombie that never dies no matter how many times it is proven wrong.

You are putting forward that landlords acted collectively to increase the price of realestate. This is obviously wrong. The price of homes is determined by the market. It doesn’t matter who owns those homes, they are worth what the market says they are. Landlords do not control the market and even if they banded together in a conspiracy to increase the price of homes, they couldn’t because the vast majority of homes are owned by regular people.

The high price of housing is caused by a shortage. If you don’t believe me then watch the 60 minutes segment about it. There’s no conspiracy. If there weren’t landlords building new stock it would be even worse. It’s so ironic that the hive mind spits in the face of the only people building new housing; the only people making the problem better.

Nice try.

Landlords and homeowners and the finance industry don't control the market... they just form a political bloc that controls zoning and taxes and transportation infrastructure and central finance, and these knobs in turn control the market. For some reason, they always vote for policies that pump their holdings. Can't imagine why. These policies do create problems, though, and it's not only reasonable to attribute the problems back to the people who voted for them, it's unreasonable to do anything else.

"It's just the market!" is on par with "Look, a squirrel!" in terms of critical thinking.

Again, landlords aren’t a big enough group or coordinated enough to do anything. There’s no landlord lobby. Homeowners are a different story. It’s them who stop us from building more. But yea, it’s just the market and there’s no conspiracy and landlords are the last people to blame. Your comment on my cognitive abilities is a petty insult and is not allowed on this platform.

"You don't need a formal conspiracy when interests converge."

The landlords don't need to conspire - they know what's good for them and the politicians either own property themselves or are connected enough to landlords to help them out.

None of these parties have an immediate interest in the lower class affording housing or maintaining the community fabric in the long term - especially the faceless incorporated ones.

Blackrock doesn’t have any lobbyists? Apartment consortiums don’t have lobbyists?

Homeowners outnumber them and local politicians listen to them more than to some far away group of people in NYC. Really it is quite simple, homeowners vote in tax cuts for themselves which also apply to landlords.

Why would homeowners vote tax cuts for landlords as well? I wish that the politicians listened to the citizens. You have a very naive take on politicians and how they are motivated. Think campaign donations and hobnobbing for a cushy job when they leave office —- that’s what motivates politicians.

There are luxury condos right where I live that are sold by a property management company. They are unoccupied, and have been unoccupied for months. The prices have not gone down.

There's no super strong market force to push the price of a house down, while there is a large market force to keep it valued where it is or make it go higher.

Respectfully, this doesn't prove that the law of supply and demand no longer applies. Any individual seller may choose not to decrease their prices -- but if they do it long enough, they run out of money and are forced to sell.

It's also difficult to tease out the effect of general price inflation. If house prices stay stagnant but currency is devauled, prices are decreasing in real terms.

Some places have tax breaks for unoccupied property rentals. Instead of lowering prices they leave them high and break even on the losses (or close enough such that they weather the short term until demand at their preferred price is reached)

Months is way too short a timeline to say anything. There is no market force that says these houses must sell right now today and so like literally every other asset they’re being held until in the expectation that offers will come in that meet the asking price.

What are the odds these are used to park (questionably acquired) assets by wealthy foreigners?

But eventually the vacant apartments will get rented out because they're costing their owners money (in taxes, mortgages, maintenance) and not bringing any in, and you can't spend more than you make forever.

Rents go down when landlords go bankrupt.

That's what happened in 2009-2010. It took about 4 years after peak homebuilding, and 2.5 years after peak home prices, and about 12-18 months after the financial crisis started. Real estate tends to lag financial markets by about that time period. But it does happen - eventually markets respond to supply and demand, and firms that try to buck the trend get swept out of the market.

> But eventually the vacant apartments will get rented out because they're costing their owners money

Owners make money leaving properties vacant all the time. In fact, in many markets capital gains have been much more significant than rental income for a long time now.

Not in a down market. Everybody's a genius in a bull market, where you make money just because your assets went up in value. In a bear market, where your assets go down in value, anyone without cash flow goes bankrupt.

A 13 year old would have made money in real estate over the last 5 years. One could have literally selected a property at random and made money, even one that was trashed.

In a lot of cities and countries you pay less taxes if your property is considered unsuited for rental or is just an empty plot of land. There is an incredible financial incentive to avoid providing housing as much as possible.

Be careful with vacancy numbers. Some sources seem to include houses that should not be considered part of the housing supply.

There are people who own vacant houses that they have zero interest in renting, and are not looking to sell. This could be a vacation home for a billionaire that they seldom get around to visiting, but want to have ready for them, and just have staff check in periodically. Renting it when not in use may be uninteresting (have to lock up their belongings, arrange some form of management company, have insurance concerns (if somebody realizes they are renting from a billionaire, they might get "hurt", hoping for a big quick payday) etc.)

Similarly there are vacant houses own by speculators that have zero interest in renting out the unit, and are not currently looking to sell, since the market isn't right yet.

This is among many other scenarios where vacant does not mean available to rent or purchase (well at least not at anything close to market rates. Some of these people may reconsider if offered way above market rates, but that generally only happens if a property is uniquely valuable to just that one buyer.)

I think all of those cases should be reported as vacancies. Those are shelters going unused, that other people could be using. And I think they're relevant to the current discussion because those unused homes are taking up the extra supply, increasing price

> We see this in big cities where vacancies are at an all-time high (aka a lot more supply), but prices aren't going down.

Where?

I don't agree with your way of thinking. I know it's extraordinarily popular, but I think there is a different, more productive way to think about this.

Think of houses sold to outsiders as a form of export. It's the best form of export: the good you are selling does not leave the premises, and the local community continues to collect taxes on that. The outsider does not consume government services as much as a local, so, what's not to like? Even better, when those outsiders visit, they spend much more on local businesses, because they are tourists.

The more houses that are empty most of the year, the better for the local community. Because that's tax money that gets collected at very little cost for the local government.

The problem, of course, is the artificial barriers to build more. People have this idea that the land is fully built up, there no way to build more.

That is so far from true. I live in one of the most densely populated neighborhoods on Earth (17k people per km2). Recently a 67-story tower was built across the street from my building. The neighborhood does not feel any more or less crowded than before. If they want to build some more, they can build more. There is (almost) no lot that's not built up, but you can take down a 12-story building and erect a 50-story one.

So, here's my thesis: let builders build as many residential units as they can (provided they are safe, or course). This way the house prices will come down to earth. People will be able to move from the rural areas to the big metropolitan areas, where the jobs are. They can't move right now because the housing costs are just so damn high.

Such a migration would result in both increased GDP growth, and lower impact on the environment. Much lower. I used to live in a very dense city before (3600/km2) before I moved to my current incredibly dense neighborhood. My energy footprint went down maybe by a factor of 10. Easily. Grocery is across the street. Before it was a 15 min drive.

Can you believe that? More affordable housing, higher GDP growth, lower environmental impact? There's no closer thing to a free lunch in our modern society.

So your approach is to maximize tax revenue for the inefficient governments to hopefully use for some purpose? Seems very ineffective to have loads of empty houses. What other purpose should a residential home serve than to house people that need housing?

The trend toward homes being investment and stores of value for the wealthy is contrary to the goals of building healthy communities that are not filled with ghost homes.

If you remove the artificial constraints on supply, then house prices will go down, and people will stop considering houses as an investment.

The price of a house should go down in time, just like the price of a car goes down in time. Or the price of any other good.

Yes, supply side restrictions should be reduced.

However, artificial demand must be dealt with as well, or we overbuild resulting in a bunch of empty homes. Another disadvantage to only dealing with the supply side is the prices of building materials will be unnecessarily high due to additional artificial demand from investors building homes as stores of value.

Finally, supply side only solution creates a potential nonlinear event where investors dump once the homes start to depreciate. A seesawing which the Fed has bolstered with artificially low rates across many asset classes. Not necessarily a bad thing altogether for the housing asset class, but it seems inefficient from a resource standpoint.

I believe in most cases the structure value does go down (or at most stay constant), it is the value of the land that is going up.

Land should also go down (generally) in price though if the supply of buildable land goes up along with reduced supply restrictions. Of course, this only works in areas where there is abundance of buildable land near the desirable locations or nearby buildable areas that provide a decent substitute. Obviously, areas like the San Francisco peninsula and Manhattan where there is limited land due to surrounding water, land prices are likely to continue to go upward.

Manhattan is surrounded by water, but guess what, there are subways that go to Brooklyn, Queens, the Bronx, Jersey City and Hoboken. If your office is in downtown Manhattan, you can get there faster if you live in Brooklyn than if you live in Haarlem (which is part of Manhattan).

In principle the supply side has natural constraints, but they are easily 2 times above what has been built until now.

You can think of it this way: the population density of Manhattan is about 27000/km2. The entire NYC has a density of about 10000/km2, while Jersey city has 7000/km2.

We agree. Those would be “nearby buildable areas that provide a decent substitute”.

I'm sure if they just paid a little bit more they would attract people to drive into the town from the assuredly cheaper nearby towns.

It's useful to see what happens when this isn't possible:

https://www.outsideonline.com/culture/essays-culture/how-to-...

That's called urban sprawl...

Except that frogs, as (all? not a biologist) amphibians, have very good sensitivity to external temperature. Unlike humans.

It is just an expression. Frogs are actually smart enough to jump out of a gradually heated-to-boiling pot of water.

Humans in a slowly boiling pot seems to be more accurate.

I don't think it's that simple. Maybe if someone has lots and lots of investment homes, they may think that way, but someone owning a single home shouldn't be excited about its price inflating--it's not like you can sell it and reap the profits, because you'll just be buying another similarly inflated house.

You can do a cash out refi and invest into other higher yielding cashflowing assets. People do this all the time for e.g. renovations, additions etc

You eventually have to pay that back though, right? So the benefit is fleeting.

If you cash out refi at 3%, and invest into 6% yielding asset, then you are permanently making 3% extra return on that money.

(of course there's risk etc)

To which you add, people that buy houses want to be able to sell making a large benefit. So you profit from using it (by living in it or renting it) and sell it for more than you did put into it...

Do they plan to live in a tent after they 'used' the house and sold it? Because if they plan to buy a new house to replace the one they sold, they haven't made any money. And if they want to upgrade, they lost money and the price difference will have increased.

The only case where you benefit from rising hoise prices is if all of your income comes from owning property, rather than working a job - i.e. you are a major landowner.

If you are doing anything economically productive, from running a business to working a job, houae prices are a blood-sucking vampire squid.

People that had money 3 or 4 decades ago tend to own a few houses and get some income from renting.

Also, older people think more about downsizing than about upsizing their homes.

Do they also hate their children?

Nope, I would bet a lot of these people had the means to gift their kids a nice down payment for their first home. That's why the best indicator of where you end up financially is where you start.

downpayment doesn't get you out of the hole -> you are still on the hook for decades, to keep sinking the majority of your earnings into that house. That's money lost to productive economy, and money lost to you.

They want their children to rule in hell rather than serve in heaven. Not the wisest deal ever struck.

Well, if we're doing pseudo-philosophical soundbites, then hell is other people.

Better to rule than be ruled. At the very least it gives you a bigger safety net when you fall out of power.

That is how you get in the mess in the first place. You are scared of being ruled by other people who are scared of being ruled by you.

A true acracy, i.e. a classless society, is never even considered.

They can either downsize towards the end of their life, move to a less desirable housing market (because there are no jobs in it), or take a loan against their home.

Normally people optimise for their life, not for their eventual few years of retirement and death.

The Realtor and homebuilder lobbies are part of the thinking, too.