[kavabean]

The market can never provide housing as cheaply as a properly functioning local/state government.

* The state can borrow money far cheaper than private developers.

* The state has far fewer regulatory risks (getting permits, etc).

* The state does not need to make a profit but only needs to pay the bond payments.

* The state profits even when it doesn't make immediate profits on the particular housing development. It does so by increased local spending (by housing tenants who pay affordable rents instead of every penny they earn, etc) and also by higher taxes on increased incomes/output due to higher productivity, the higher productivity due to reduced stress and churn in the community caused by a lack of funds for life expenses due to high rents. (Remember lower income tenants spend _all_ of their money, with a high proportion spent locally. High earning landlords are exactly the opposite. A much larger proportion of their income flows internationally, to wherever capital gets the highest return, or whereever luxury goods are made)

* The state gets an implicit discount on labour costs in development since it gets tax income from the workers.

With all of these incentives in play the state can provide housing for less than the state borrowing cost of the money for labour/materials to build an apartment. Since in Portland it costs 175-200/sqft to build multifamily units, a 1000sqft 1BR should cost the equivalent of state borrowing costs/month for $175k at 2.2% = $320. Imagine how much better life would be if we had a government that used all of these incentives to provide well-built housing for its people.

There is also the cost for land but the state owns a lot of land, and it has the ability to get land by rezoning, and also by using eminent domain as a last resort. At any rate for high density buildings, this is not the dominant cost.

[rlanday]

Your argument is clearly flawed because it goes way too far. It applies to literally any sort of economic activity it's possible to be engaged in. For example, I could make all your arguments as reasons why the California state government should take over pornography production from private producers. We know from experience that private industry is more successful than the government at many things…including building housing:

https://en.wikipedia.org/wiki/Public_housing_in_the_United_S...

[kavabean]

Top down state organisation is prone to corruption. It takes effort to keep that at bay. The public oversight required is an overhead that should only be used in select tasks.

The state is not suited for all tasks, especially those with rapid iteration, experimentation, low capital costs, and low cost of failure. Housing technology moves slower and is dominated by capital and bureaucratic concerns. It is also one of the dominating costs in modern life. The state is capable of doing this task and the public oversight burden is warranted.

For products and services that do not absolutely require the state, I believe worker cooperatives, incentivised by the state are a much better solution

[AnimalMuppet]

But the state also has no competitive pressure to be economically efficient, or to design units that aren't staggeringly ugly, or to not line the pockets of a buddy who's a contractor, or...

The general historical evidence is that government operations are not paragons of efficiency.

[kavabean]

The general story, told by who exactly? Oh right, the corporate press.

I live in the UK. For every careless ugly tower (there are some) there are solidly build, even solidly designed housing units that hold up over time. Many built in the 60's in a more politically active era won design awards. In general the initial construction quality of the public housing is much higher than private construction. From the thatcher era on maintanence was cut drastically which led to much of the decay.

The problem of insider graft and corruption is a real one. But it is fixable if citizens have real power and there is transparency and accountability instead of corporate funded elections which guarantee a disenfranchised population.

[nickpp]

The general story told by people who had no choice but live in these "wonderful" state-does-everything countries.

You live in UK? Come visit the Eastern Europe sometimes.

[blfr]

These points apply to many other economic activities, especially larger scale ones (like car manufacturing) and this is basically the argument for communism. Alas, it doesn't actually work.

[kavabean]

They do absolutely apply. And they work. Look at two incredible examples. Russia, post 1917, went from a third world feudal economy (albeit with incredible land resources and considerable intellectual institutions) to the second largest industrial economy in the world in 30 years. China: I will leave off their incredible growth curve over the last 40 years.

There are obviously downsides to top-down centrally controlled economies but to say they don't work is ridiculous.

I don't want to live in a top-down economy. It's too oppressive. I would prefer bottom-up socialism based on worker cooperatives.

But there are some services that are so critical that they cannot be left to the market with it's wealth-centralisation and pay-to-play politics leaving the vast majority in destitution.

Housing is one of these critical services.

[enoch_r]

For the USSR, what is the counterfactual? In retrospect, economic growth in the USSR was not particularly impressive compared to other poor, industrializing economics (which historically have often performed very well due to catch-up effects).[1][2]

Yes, China has experienced dramatic GDP growth over the past 40 years. By coincidence, 39 years ago, Deng Xiaoping began reforming much of the Chinese economy based on market principles.[3] Not necessarily a glowing recommendation for top-down, centrally controlled economies, especially considering the preceding few decades, which featured more central planning as well as economic stagnation and famine death tolls in the tens of millions.

[1] https://artir.files.wordpress.com/2016/03/all19301.png

[2] http://voxeu.org/article/stalin-and-soviet-industrialisation

[3] https://en.wikipedia.org/wiki/Chinese_economic_reform

[evgen]

I volunteer you to be one of the millions who perish in such a great leap forward.

The bloodbaths required for such endeavors literally boggle the mind, and in the end they still only managed to go from mass poverty and serfdom to a point where they are clinging to middle income by their fingernails. If that is what counts as working out for you then it is no wonder the far left has no credibility whatsoever. Better for you to use examples like Singapore or Korea, and I wonder why you avoided them as examples?

[focusgroup0]

Kept waiting for the satirical 'turn', but it never appeared.

(not trolling) Are there any examples that support this claim:

>The market can never provide housing as cheaply as a properly functioning local/state government.

[kavabean]

The housing and urban development department puts out price indices for construction of various types per sqft. https://www.amazon.com/Construction-Cost-Indices-Supportive-...

You will find these are not far off industry average.

I don't know of a quantative model of the local financial system that fully implements the factors I mention, but these ideas are getting more traction because of the practically western-world-wide housing crisis.

I guess decent models are forthcoming to study these effects.

[valuearb]

This appealing theory founders on the rock of reality. Government build housing is if anything more expensive.

[kavabean]

citation?

Also it's natural that public housing is at least somewhat more expensive. They have to follow code and not take shortcuts. Also there isn't the predatory, crushing, pressure to exploit the workers on the job in the same manner as in the private sector.

In general the difference is not very big. The bigger problem is graft and corruption.

[valuearb]

Everyone has to follow code. There is a huge difference because of

1) Motivation 2) Corruption

Private development has tons of #1, and little of #2, while public housing development is all #2 with very little #1.

#1 is how you find ways to build faster and better without taking shortcuts. It's called greater productivity.