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0 pointsdigbybk2y ago0 comments

> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence.

I hear this argument a lot and always wonder if the causal direction is flipped: people use housing as an investment because it’s scarce, not that it’s scarce because it’s used as an investment. If there weren’t so many restrictions on building, the supply would grow to meet the demand and parking your money in property wouldn’t be such a hot idea.

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7 comments · 3 top-level

dogcomplex2y ago· 2 in thread

Tbf many of those restrictions are there for good city planning reasons - and important to keeping a city livable and not outgrowing its infrastructure. But the cost of enforcing those is quite often a ridiculously bogged-down planning department that often takes months or a year to process applications and revisions, significantly inflating the risk and thus costs of construction, and relegating it to big firms that can handle all of the legalese and scheduling turmoil.

Now, why dont governments better fund those departments and emphasize faster throughput? Well, let's ask their main constituents - who are largely homeowners and companies in the industry - whether they'd like to dedicate more taxes to a service that would speed up construction and drop their housing prices.

AnthonyMouse2y ago

> Tbf many of those restrictions are there for good city planning reasons - and important to keeping a city livable and not outgrowing its infrastructure.

I don't believe this to be true. If someone wants to build a single multi-story building in an area, no additional infrastructure should be required. It's one building, the existing infrastructure shouldn't have so little slack in it that this could be a problem.

If lots of people are building lots of buildings, the city government can notice this taking place and while the buildings are going up they expand the capacity of the infrastructure in that area. It's no excuse to refuse the construction, it's just something the city has to do as a result, because that is a city's job.

Their job is not to decide what can be built, it's to allocate the property tax on the new buildings to paying for the things the new buildings need.

cycomanic2y ago

Nobody is talking about building a single multidwelling building. But you can't make rules just for a single building (what are you going to do for the next building... And the next). There are plenty of examples where local governments have removed lots of restrictions and essentially created Airbnb wastelands, a good example is the southbank in Melbourne. The last time I looked into it (admittedly some years ago), they had a single primary school and one post office for ~50000 people IIRC. It was definitely high density housing, but no infrastructure that makes it liveable except for running Airbnb and rich people who want a holiday apartment close to the casino.

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seanmcdirmid2y ago· 2 in thread

Ya, and housing used as an investment doesn’t need schools or any real infrastructure, so we could basically build them anywhere. Planning is only needed if people are going to live in them.

Macha2y ago

Ireland leading up to 2008 basically ended up trying that, with ghost estates that then got knocked. China has also basically done this.

It obviously doesn't work as housing, but even its value as an investment is at least nominally tied to the fact that someone, somewhere could value it as a house. Otherwise, eventually it's found the emperor has no clothes and it comes tumbling down.

65102y ago

I had a wonderful idea for this. The trick is to put some truly bizarre requirements on the constructions that when done in volume adds up to an extraordinary place to visit.

For example a single floor dwelling that is the socle of a giant statue depicting a person appropriate for that street. Each must come with a plaque describing who they are and a qr code to a website about them that lives up to some high standard. Think what you will, it is considerably more interesting than "buying" a picture on some blockchain.

65102y ago

People able to buy lots of properties as investment won't allow an increased supply as it ruins their investment. Restrictions on building is just a service one can buy.

j / k navigate · click thread line to collapse

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7 comments · 3 top-level

dogcomplex2y ago· 2 in thread

AnthonyMouse2y ago

> Tbf many of those restrictions are there for good city planning reasons - and important to keeping a city livable and not outgrowing its infrastructure.

Their job is not to decide what can be built, it's to allocate the property tax on the new buildings to paying for the things the new buildings need.

cycomanic2y ago

1 more reply

seanmcdirmid2y ago· 2 in thread

Ya, and housing used as an investment doesn’t need schools or any real infrastructure, so we could basically build them anywhere. Planning is only needed if people are going to live in them.

Macha2y ago

Ireland leading up to 2008 basically ended up trying that, with ghost estates that then got knocked. China has also basically done this.

65102y ago

I had a wonderful idea for this. The trick is to put some truly bizarre requirements on the constructions that when done in volume adds up to an extraordinary place to visit.

65102y ago

People able to buy lots of properties as investment won't allow an increased supply as it ruins their investment. Restrictions on building is just a service one can buy.

j / k navigate · click thread line to collapse