[conanbatt]

Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one.

The two single most important factors that make housing not behave efficiently as a market are zoning and taxation.

Zoning because it puts limits on what can be built, which means the process to expand is now bureaucratic. The original article talks about how in tokyo zoning hasnt been a problem for the market as the championing difference.

Taxation is the second one. No matter how much you build, the people and the space require considerable resources to manage: sewage, garbage, public transportation, local courts ,etc. If you tax income, the more people you cram, and the more the expenditure of the government is, the more oppressive becomes rent. That is because as a dweller, you pay taxes that go to services that increase your rent. This great injustice is described in the book "Poverty and Progress" by henry george in the 1900's in california, where the concept of Land Value Tax was created and then validated by economists on the left (Krugman) and the right (Milton Friedman).

You would not see any problems with local neighbors in San Francisco if instead of state income taxes and sales taxes they moved that to land value taxes, and suddenly the guy with the picturesque 1920 house for himself will find that his taxes look like a monthly rent.

The biggest problems of housing, much like the biggest problems on almost any market, come from the government, not for the peculiarities of the market itself.

[dalbasal]

>> Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one.

IDK if you can just take that as a premise. I think we've had a body of evidence, hard to refute, suggesting that laissez faire markets improve industrial output.. substantially. Not necessarily pure laissez faire, but the effective systems seems to have effective price systems, and private profits. Post 80s China, West vs east europe in the 70s & 80s.

There are other sectors with good evidence too.

Housing...? I think that we've seen laissez faire markets can build a certain type of city (car-suburb) in certain conditions (green-field). In cities that already exist... IDk. Housing in europe is not that much better now that socialism is gone. The stuff in the house, way better. The house, nope.

Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards.

I just don't think that housing is like furniture or smartphone manufacturing. I don't think you can refer to the same lines of reasoning.

[conanbatt]

> Housing...? I think that we've seen laissez faire markets can build a certain type of city (car-suburb) in certain conditions (green-field). In cities that already exist... IDk. Housing in europe is not that much better now that socialism is gone. The stuff in the house, way better. The house, nope.

I can't speak for europe's cases. Can you share some data, anecdotes or articles? Housing is also one of the things where every country has its own rules.

For example, in San francisco you have 3 story buildings galore, and in argentina you have 8 story buildings much like spain does. And yet both places, by similar criteria, restrict higher buildings: in SF they dont want taller than 3 stores, and in argentina they dont want anything taller than 12 stories.

Housing has also, globally, been part of a very particular cycle in the last 20 years. First the run up to 2008, and now a decade of rising city populations, pent-up demand and low interest rates.

> Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards.

More than half the population are owners, at least in the us and most countries I looked at. So no, they do not want ration cards. Moreover the biggest issue of implementing housing policy is that the locals are permanent but the visitors , even though they are more, dont stay long and dont have the capacity to vote. If San Francisco made a law about construction, and allowed any person that lived more than 1 year in san francisco in the last decade to vote, the renters, foreigners and visitors would land-slide any vote where the local property owners would like get their way. But because that is impractical and impossible, the locals get to put the rules, rules like prop 13, rent control, etc.

Housing IS unique en the aspects you say: land is limited, and thus deciding how to split it is a hard problem. Thankfully the solution old, known and consented by economists: just put a land value tax. Let every piece of land be responsible for the local taxes, and suddenly the locals themselves, being responsible for their expenditures, will vote for construction themselves.

[Qworg]

No zoning is awful - just look at Houston. Factories and power plants build abutting residential neighbourhoods without any communal impact discussions.

How do you properly price these impacts?

[conanbatt]

Good point. I do agree that a certain level of zoning is justified. Industrial vs residential is a solid example of that, as you say. However, give it the power to the local to block the future dweller and he will use it to his own benefit at the expense of the other.

Zoning should be more of a technocratic issue than a political one.