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0 pointsTZubiri2mo ago0 comments

Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.

That's quite an extreme political take.

A more humble basic economic theory question would be:

If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good? Sure homes would be cheap, but very shortly after that the supply of new housing would drop dramatically, as there's no one to finance building homes, maybe the ultra rich will just invest in their own mansions or yachts?

Just very basic economics is the discussion here, not tariffs and china politics, but just a variant of the highschool/red-scare question of, "will anti-wealth laws have a positive effect on the economy"? in the past it was determined that no, and that you were a communist for suggesting it, but maybe there's a nuanced take like making a difference between some type of "institutional" investors and other types of investors?

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Aurornis2mo ago

> That's quite an extreme political take.

We're in a weird timeline when pointing out that dramatic tax increases on the inputs to home building will increase the price of homes.

> A more humble basic economic theory question would be:

> If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good?

There's nothing humble or basic about this question because it's so unrealistic that it could never possibly happen. Ban renting? What?

TZubiriOP2mo ago

It's a gedankedankexperiment man

kelipso2mo ago

Why would you need institutions to finance building new homes? You think the cost of building a home is more than the cost of buying a home? (Obviously not.) Normal people have been building their own homes using their own money for thousands of years.

TZubiriOP2mo ago

> You think the cost of building a home is more than the cost of buying a home? (Obviously not.)

Common misconception, I used to have this as well.

Building is more expensive than buying for 2 reasons:

1- People can build custom houses to their taste, they pay a premium for that. 2- House prices fluctuate, most of the time house prices are below maximums, it's only during brief periods of time that building houses is suddenly bottlenecked by capital.

Yes, there is an industry behind building houses. Sure people can build homes themselves, that's cheaper than both buying a home, and building a commercial home, but for homes that are both a commoditized asset with general appeal and a house to live in, it's a different type of asset.

A house you build by yourself will never be worth much, but you'll live in it for sure. You can even spend a lot in improvements, but you end up with YOUR house, not with a resellable asset.

FWIW, building your house is quite independent of market conditions, so if that's your game you shouldn't care about the macroeconomics of industrial residential construction or tariffs on China's iron.

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0 pointsTZubiri2mo ago0 comments

That's quite an extreme political take.

A more humble basic economic theory question would be:

0 comments

Aurornis2mo ago

> That's quite an extreme political take.

We're in a weird timeline when pointing out that dramatic tax increases on the inputs to home building will increase the price of homes.

> A more humble basic economic theory question would be:

> If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good?

There's nothing humble or basic about this question because it's so unrealistic that it could never possibly happen. Ban renting? What?

TZubiriOP2mo ago

It's a gedankedankexperiment man

kelipso2mo ago

TZubiriOP2mo ago

> You think the cost of building a home is more than the cost of buying a home? (Obviously not.)

Common misconception, I used to have this as well.

Building is more expensive than buying for 2 reasons:

A house you build by yourself will never be worth much, but you'll live in it for sure. You can even spend a lot in improvements, but you end up with YOUR house, not with a resellable asset.

j / k navigate · click thread line to collapse