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0 pointsno_wizard3y ago0 comments

> When you're just a small renter, it's fine for when the handyman doesn't show up the apartment keeps flooding

Not to overly quibble but it really isn’t. If we let the small renter get away with such egregious behavior the bigger renters will take note and do the same

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3 comments · 1 top-level

ke88y3y ago· 2 in thread

The analogy is stretched, for sure. I think the analogy works a bit better if you say that one apartment building houses enough people that there aren't enough hotel rooms to house everyone if the building becomes uninhabitable, thus making the apartment building structurally significant to the local housing supply in some sense.

But again, it's just an analogy.

no_wizardOP3y ago

Still feels like it breaks. Given the new analogy, proper planning would be to set policy to steadily increase housing supply relative to renters based on likelihood of them being able to purchase a home, adjusted quarterly (or maybe yearly) and/or increase the number of available renter units relative to the amount of new renters coming online (IE, graduating college or moving into a new job that requires them to live in the area).

Don't be overly dependent on any one local thing in another words. You can't 100% plan for total failure of course, but this would blunt it significantly.

In another words, SVB did a bad job at hedging risk, and there's really no excuse for it.

ke88y3y ago

> Still feels like it breaks

I'm not in love with the analogy, but agree with the underlying argument, fwiw.

> Given the new analogy, proper planning would be to set policy to steadily increase

Ironically, on this count, the analogy actually works!!! Bank runs sort themselves out on the sort of time frames that "steady" policies operate. Just like housing supply sorts itself out in the steady state (well, apparently not, but we need that assumption for your point to work) BUT steadily adding supply is NOT a good solution to "we literally don't have places for people to live because your apartments flooded and there isn't enough temporary housing to keep the city working".

> In another words, SVB did a bad job at hedging risk, and there's really no excuse for it.

Yeah I think we're violently agreeing. (Additionally -- FDIC/USFG bailed out SVB depositors above and beyond what they should've done.)

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