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Comment by bpodgursky | Hacker News Reader

No, we just need to build more housing.

1. Those who own houses as an investment have an incentive to block new housing construction. So ending RE as an investment helps accelerate laxer zoning laws.

2. There’s a limit to how much housing can be built in an area, but no limit to the leveraged purchasing power of an investor.

If you look at high density property markets around the world such as several Asian cities and NYC, I think it’s clear that more construction alone can’t stop price increases due to speculation.

Tokyo has in fact stopped price increases by building a ton.

NYC is a good example of my original point; NYC barely builds any housing in a proportion to their existing housing stock, and they aren't even that dense outside of Manhattan!

And that means federal reform to municipal zoning codes, which are the primary driver of suburban sprawl. It should be legal to replace any single family home with a quadplex.

Oregon did it at the state level in 2019 with HB2001.

The federal government lacks the authority to regulate zoning, an amendment to the constitution would be required, and a constitutional amendment would be virtually impossible to pass.

That's easy to fix. The feds just say "You won't get $20 billion in infrastructure grants unless you do X" and suddenly zoning reform is on the table. Like so:

https://www.usatoday.com/in-depth/news/nation/2021/04/14/zon...

Your definition of "easy" is interesting.

We do need more housing, but what’s stopping these same investors from buying it all up?

They are only buying it up because prices are rising so fast. More housing would mean more stable home prices, which makes the sector less attractive to investors.

No, they’re buying them up because rates are so low it costs them little to borrow/buy.

They wouldn't be buying houses if houses weren't an appreciating asset. Let's change that.

Just to be clear, we shouldn't throw the baby out with the bathwater. Houses can and should be appreciating assets. However, their rate of return shouldn't be as astronomical as they are at present. In inflationary environments, money will always flock to real estate. That shouldn't change.

The goal of increasing supply is to lower returns to such a point that they remain attractive to first-time buyers but are suboptimal for the institutional investor.

You still haven't given a reason why they should be appreciating assets.

Why should houses be an appreciating asset?

Cars are an expensive depreciating asset, and the car economy works just fine.

Supply and demand. Keep building. It works for Tokyo.

Tokyo had a massive real estate bubble driven by speculation. It’s also seen weak population growth in the recent past, so it’s unclear whether it can be generalized.

That's the thing, we just keep building and selling to them, and then we take that money and build more. Eventually they'll run out but the state is never going to run out since it can just make more money.

You can try to solve a problem on more than one front. Zoning is a huge and fractured problem that will take decades and decades to solve at scale, if it happens at all. We need to be trying more than one thing.

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