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Comment by jeffbee | Hacker News Reader

None of the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies — will lower costs. Every one of them will raise prices. You can only fix this with supply: build homes.

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One of the key factors is the increased migration for China and India. While people did emmigrate before, it was much lower. So effectively they were walled off into their own pocket. Now, most of my co-workers are immigrants from India. It's like the rest of world's population is jumping by 2 billion. That is going to change the value of everything related to populations and living.

Got any numbers to back up this claim?

There’s another way to fix it. You can regulate financial speculators. In the US 1/4 of all US homes are owned by financial institutions. I doubt it’s very different in Europe unless they are regulated. This situation ensures only the rich can own a home as buyers are competing against hedge funds.

> In the US 1/4 of all US homes are owned by financial institutions.

That is not true unless you consider having a mortgage equivalent to renting from a bank.

What is true is that in some metro-areas like Atlanta, 1/4 of sales (in certain price categories) are to investors.

Yep. Homes can either be for shelter or for investment, but not both. We are experiencing this as a global culture.

I dream of a 100% tax rate on second homes, foreign ownership, and corporations owning single family homes and condos. Or even better, make it illegal. But any politician who pushes such a bill would immediately get removed from office and the law repealed.

None that is going to make a lick of difference. Because of longevity, birth rates, and preferences for smaller households, America is short 30 million homes. You can't tweak your way out of this.

Pretty sure that stat is incorrect. There were years in which 1/4 of available supply was bought by investors but that doesn't mean they ever owned 1/4 of homes. And they don't buy and sit on them. They renovated and rented or sold them. That's perfectly fine.

Your causation is reversed.

Financial speculation happens because people believe (reasonably) that the price of a home will increase. Why do they hold this belief? Because the demand has increased while the supply is kept artificially constant.

That's what's so frustrating about all of this -- it's a complete own goal. If we all collectively do nothing at all, developers will move in to capture the consumer surplus. It will be profitable to build, not buy and hold.

Yes, the “just build houses” contingent seems unaware that people (and as Mitt Romney famously said, “corporations are people too”) can own more than one house. Supply is certainly an issue, but inequality is as well.

Mitt Romney was not talking corporate personhood. He meant corporations are run by human beings.

I don’t remember the context that well, so you may be correct about that, but I think I disagree with him then - I think corporations are made of humans, but they are machines (perhaps primitive AIs) and are as uncaring as a lawnmower.

Every time a mob of people get together responsibility becomes diffuse. You may see a corporation do something negative that was the cumulative result of 100 human beings who thought they were doing what they were supposed to. People who saw themselves as not able to directly control the outcome. Same for any large group of people up to and including nations.

The good ol' "subsidize demand" approach to reducing prices. And if prices continue to climb? Well, just subsidize demand harder and in more diverse ways. I assure you, eventually price will fall. You just haven't subsidized the demand side enough yet.

The GP didn't say "subsidize demand". They said "increase supply". They're different things.

It's a response to his summary of the article, not a contradiction.

> the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies

Ah, got it. Sorry for the mixup on my part.

They're building constantly here in Omaha, Nebraska.

Affordable though? Apparently not. I mean if you have a lot for development are you going to build a $200K home or a $600K one on that lot?

It sounds like you have shifting baseline syndrome. Omaha last year built fewer houses than had built 25 years ago, but the city is a third larger than it was 25 years ago. So in fact it is building slower than it did in the past.

I don't doubt you have the numbers. I've only been here three years. I live on the west end of town where (seemingly) all the new construction is going on.

Sure.

New housing units permitted: https://fred.stlouisfed.org/series/OMAH531BPPRIV

Population Omaha (note: change in statistical area): https://fred.stlouisfed.org/series/OMAPOP

Housing starts per 1000 residents: https://fred.stlouisfed.org/series/OMAPOP

Single family homes are profoundly inefficient in so many ways. They're pretty much doomed to be expensive housing.

Make home ownership and renting them back to single families by corporations illegal. Seriously. It's the corporations doing ALL this. The people don't have the money.

> It's the corporations doing ALL this. The people don't have the money.

Maybe it's like that in America. In EU, where the investment 'culture' is different, there are hordes of people not knowing what to do with their money and buying homes only to sell them at a higher price (flippers). Case in point: Poland, where the housing market is quite bonkers - especially in big cities.

If you buy a second home as an investment property and plan to rent it out to a single family, your accountant and lawyer will probably recommend you form a corporation to operate under.

Just having a flat rule against corporations owning property will likely reduce the number of rentals available and a reduced supply will lead to higher prices.

Doesn't work, China built entire ghost cities and they were all bought up by investment firms and the prices remained sky high.

We need laws against corporate ownership of residential housing, simple as.

looking at China and applying that example to the US is absurd, these are entirely different situations

for one the "ghost towns" of China are in places no one wants to live, the complete opposite of what the US (or anyone) needs to do

The other reason this is absurd is because after the American press lost interest in making fun of Chinese "ghost cities" Chinese people moved into those cities. It's a case of Americans making fun of another country for planning ahead.

That's not the main source of the problem, it's governments printing money that's causing this.

No, it's the value of the dollar in free fall and our purchased economists not talking about it. It's the value of the dollar as reflected by the rest of the planet's confidence in the US, which is dropping faster than Trump can fall asleep and fart.

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