[noduerme]

>> the incentive structure around deriving your income from rents can systemically produce inhumane outcomes

It's also the only thing that produces new construction. Properly regulated and harnessed, the incentives are necessary to draw capital to building.

[amw]

> It's also the only thing that produces new construction

It's not, though. People constructed housing for thousands of years without landlords. There are plenty of ways to fund constructions without markets. We have built a society that prefers to organize it that way, but that is also a society with more vacant units than there are homeless, where it is _normal_ to spend 50% or more of one's income on rent. Those outcomes, I argue, are inhumane, but also, maybe more controversially, avoidable in a system organized around something other than profit.

[joshlemer]

Exactly! And also the rest of the benefits of speculation apply to housing just as much as anything https://en.wikipedia.org/wiki/Speculation#Economic_benefits

Namely, real estate investors provide liquidity to the market, bringing price stability and absorbing risk from developers and homeowners.

[eric-hu]

From that same section, though:

> On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, and prices may become distorted.[8]

[noduerme]

Note that I said "properly regulated and harnessed". The creation of bubbles is a temptation for both speculators and governments.

Specifically, derivatives and futures based on real estate should be treated by governments as toxic / illegal speculation. In fact, banning bad money from bubble-making practices amplifies the incentive for small landlords to improve and build living space on property.

[eric-hu]

Yup. Your comment seemed to present advantages of speculation without saying it’s a pure good. The comment I replied to seemed more pure market.