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Comment by ghufran_syed | Hacker News Reader

This whole discussion seems to miss the point that sellers always want to sell for as much as they can, and buyers always want to pay as little as they can. If the price goes too high, buyer's won't buy. You could get the same effect by having an auction every month for all the units that would be available in the next month - the price would still rise, but then you could blame the other buyers for "overbidding"

The optimal price for a seller is always "whatever the market will bear" - which we don't like the sound of it's a big "evil" corporation. But if any of us as individuals were selling a car for example, and some software would help us maximize the sale price, we would gladly use it - I don't see how the seller has a moral duty to take less money, same as the buyer has no moral duty to pay more

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Thing is, we are talking about housing here. A basic necessity for everyone. I can live without a car, I can live without that expensive new_shiny_toy_of_the_month but housing is something that's vital, it has the ability to impact so many aspects of my life.

So the whole debate here, as far as I understand is, how ethical is all this. Is it ethical to squeeze every last cent out of a person looking to house themselves and their family?

What’s unethical is not building enough housing to affordable house everyone.

I’d claim it’s more complicated as large groups could purchase said housing, and by intentionally introducing a certain amount of vacancy create enough of a shortage such that the rest of the portfolio becomes more expensive and “profitable”

Isn't it the case that houses in undesirable areas are much cheaper?

The literal roof over the head is generally affordable - but having it in the location and standard people want is where it gets expensive.

However the desirable area and standard of housing is a want not a necessity. I want it too btw, same as everyone else!

The other thing I wonder, is if everyone is 'entitled' to a nice area and house, who pays for it all, and how do we fit everyone into the nicer areas?

That's... not how markets work...

Discounts are often given to build relationships: Gillette razor handles are sold at a loss, so you'll keep buying Gillette razors; my loyal mechanic is willing to sell me a used car at a smaller than maximum profit, since he knows I'll come to him for service; I'm willing to sell my labor for less than the maximum, in order to work on an exciting project that will greatly advance my career.

Short-term profit is often the enemy of long-term profitability.

Necessities like housing and fuel are great for sellers because they have low price elasticity of demand (people will keep paying for necessities) and low substitutability (moving is difficult and expensive - or you may be locked into a lease or mortgage; switching from gasoline to hydrogen or electricity may require getting a new car, while public transit might not go where you need to go; etc.) and barriers to new market entrants and/or to increased supply (beyond the time it takes to build new oil wells, refineries, or apartment buildings there may be regulatory barriers like environmental or zoning requirements).

Restricted supply and barriers to entry favor cartels and explicit or tacit price collusion.

Necessities can also provide steady tax revenue, since people are basically forced into paying the (usually regressive) tax.

The resulting high prices are, of course, terrible for people who actually need these necessities.

The market for addictive drugs (nicotine, etc.) has similar properties, though with some risk of legal or regulatory penalties.

> sellers always want to sell for as much as they can, and buyers always want to pay as little as they can

Not actually true. Lots of people discount or donate $ or labor or commodities by choice, as cash flow is only one of many things different people want to maximize. You've made the mistake of assuming one kind of economic behavior is the default for everyone. It isn't. There are 4 predominant patterns of economic behavior that emerge in simple economic games:

https://www.science.org/doi/10.1126/sciadv.1600451

That only works if the buyer has the option to not buy ;)

Which is the case because there is not enough housing being built. That’s the real issue.

The buyer in this case is the renter. The seller is the landlord.

Looking for a lower price implies relocating which tends to have a huge cost. So it's not a free market.

And you seem to be missing the point that this article is discussing a cartel created via a middleman; they are restricting the quantity supplied, not just setting their prices individually.

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