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Comment by Spyckie | Hacker News Reader

This article is well worth the read.

This is a perfect example of what makes history fascinating - its ability to make sense of the present and the future.

His conclusion, for those who can't get through it: housing is a dead end investment. It's a liability, not an asset in economic terms because it discourages mobility and doesn't have good (any?) returns. We should abolish policies that promote each man his own home, encourage renting, and come up with housing infrastructure solutions that are economically stimulating (in terms of mobilizing the workforce and bringing talent together).

The housing market seems ripe for technological innovation. Any ideas?

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Renting from whom?

Unless you're proposing the government operates a People's Barracks, then housing must be able to make a return for someone or there won't be any liquidity. Which will mean that renters will be just as immobile; they'll have no way to rent a new place at their destination.

Renting could decouple "home" from "house," allowing everyone to behave more rationally and giving the middle class better real estate portfolio diversification.

This doesn't require a People's Barracks. It could be done privately, merely by introducing a layer of indirection between individuals and housing stock.

I see a few problems with this idea. First, given the opportunity to behave more rationally, will most people act on it? Second, it doesn't fully decouple "home" from a physical place. It doesn't address the social environment of family and friends, or the costs of moving one's belongings. My other worry is acknowledged in the article but sort of dismissed: "homeownership has some social benefits—a higher level of civic engagement is one."

Rational behaviour is, in a way, the problem. When New Labour came to power in the UK in the late 1990s, Gordon Brown launched a raid on the pension funds to fuel his extravagant spending plans. Workers in the UK then identified a need for an alternative asset class to save for retirement, as the previously sacrosanct pensions were now seen by the government as a cash cow. Property was the preferred option, and everyone piled into that market.

But what were people supposed to do differently?

Well, right now if you want to move quickly and often, the hassle of moving in and out often makes it not worth it to mobilize, and hence you choose not to take a job that is somewhere else but utilizes your skills more effectively (allows you to produce more output in economic terms).

Don't know if a good solution exists... housing is a very messy optimization process because people want vastly different things in their homes. I guess you could focus on niche groups so you can get some standardization going.

The internet is already changing that market by putting retailers out of business and increasing liquidity. Specialized stores are moving online and freeing up real estate at the same time as Redfin and such sites are making purchasing a house slightly cheaper. Redfin charges a 3% comission, half the going rate, and thereby increases liquidity. This makes the number of empty houses at a given time (usually ~1.2 M, now ~2.2 M) fall because it's easier and cheaper to move in and out of them.

Of course, social capital goes out the window. Some people like to be surrounded by family, friends, and neighbors that they know. This used to be our society's "safety net" before everybody associated that term with the government.

I guess nowadays, everything is turning impersonal and people are losing the value of connection and belonging. I'm not sure the benefits of greater mobility are greater than the cost.

Get the self-refilling fridge up n running and you are the next WalGoogle.

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