[delish]

I'll try to invoke Cunningham's Law by saying: Housing is close to a perfectly-competitive market.

I think the above is true, but I'd welcome counterexamples.

So, the way to depress housing prices is to build more houses. _Most_ housing regulations, including making it illegal for people to own four houses, reshuffle the ownership of existing houses, and don't depress their prices. As regards that regulation: if the super-rich aren't able to own $many houses, the merely-rich will buy more, and thus housing prices would be the same.

[Buttons840]

This makes sense to me, if 10 families want a place to live and there are 8 places to live, housing prices will trend towards infinity, until people give up and multiple families live together.

We need more places to live, at the end of the day there's no way around that.

Regulation might help though. If we regulate it so that it's harder to profit from real estate, then people will find other investments instead. This is good, because as long as real estate is a favorite investment for the wealthy, there will be a "mysterious" resistance to any efforts to lower the prices by building more houses.

I'm not an expert here, but this makes sense to me. Did I miss anything?

[aaomidi]

Yes you did miss something.

You missed that it’s 10 families, with 20 houses. With one family owning 18 of them.

[Jensson]

So you are saying 80% of homes aren't lived in? I don't believe you, there is no way those numbers are anywhere close to accurate.

[aaomidi]

No a good portion of them are turned into rentals controlled by a few.

The demand will not go down. The supply always lags behind, and can face hurdles to build, for example - renters are generally not present in city politics.

The supply then use price controlling algorithms to slowly increase and extract the wealth and income of the renters.

[amluto]

> Housing is close to a perfectly-competitive market.

Pick any US jurisdiction (with the possible exception of Puerto Rico? I’m not very familiar with how taxation works there) and contemplate the tax implications of selling an appreciated property. Further contemplate how those implications are different for different potential buyers and sellers of that same property at the same price. Then say again that it’s perfectly competitive.

Hint: there are all manner of effects here. Capital gains. The basis step up at death. 1031 exchanges and their associated rules. Transfer fees, title fees (which is pretty close to being a tax).

(I’m not the one who downvoted you.)

[delish]

Transfer fees and title fees equally affect any buyer and any seller in the long run, don't they?

>Further contemplate how those implications are different for different potential buyers and sellers of that same property at the same price.

Sure -- this is why I was asking for examples. "Rich people having more options than poor people" (which is what I think 1031 exchanges and your nod to capital gains refers to) is true across all domains without exception. It's true that I tend to discount that, acknowledging its unfairness. My point was prices are public(!), and historic sale-prices are public(!). A _particular_ (rich) buyer may have individual reasons for buying a house, but the market is almost perfectly competitive, because prices are public.

[amluto]

> "Rich people having more options than poor people" (which is what I think 1031 exchanges and your nod to capital gains refers to)

Not really. They affect buyers and sellers in ways that are, for the most part, quite arbitrary. In expensive markets, capital gains taxes can hit homeowners harder than landlords, which has all manner of weird effects. (And homeowners are not necessarily poorer.)

Look around any old-ish city with heavily appreciated property values, especially in California, and you’ll see older people in oversized houses who can’t really afford to downsize. This, IMO, seriously corrupts the market and hurts people who want cheaper housing.

[Auracle]

The other way that everyone outside of Canada seems to ignore is get a handle on the demand side of things.

[lostinroutine]

Could you elaborate on Canada's approach? Are you referring to adjustable rate mortgages?

[Auracle]

No, although that also would help (though I don't think the downside is worth it).

I'm talking about people up north realizing that massive amounts of immigration isn't exactly great for home/rental pricing. "Build more homes" is easy to say but hard to do - you need skilled workers, there's only so much land in specific areas, NIMBYism, etc. "Reduce immigration" for some is hard to say but in practice is easy to do, and it has the exact same effect.

[7jjjjjjj]

The problem is that people generally have good reasons to immigrate. People don't deserve a lower standard of living just because they weren't born in a first-world country.

[Auracle]

People in our country don't deserve a lower standard of living because other people want to live here either. A country/government exists to help its own people.

Where's the line? How many people should be allowed, and of what caliber? That number is the whole point of having an immigration system.

[supertrope]

If the electorate wants to restrict immigration so be it. But it won't solve housing shortages caused by restrictive zoning. When apartments, duplex, townhomes, condos, etc. are literally illegal this will cause a shortage. Parking minimums mandates, setback requirements, floor area ratio rules, may issue permitting processes push down supply and push up cost.

Just imagine if we banned building new grocery stores or expanding existing ones. Lines would get longer and longer and produce would quickly go out of stock. And then instead of fixing the root of the problem, we banned people from moving to the area due to grocery shortages.

[Auracle]

The thing is I think you city people can't see the forest for the trees. Yes, on a city level zoning/permitting can be an issue.

However, I live in the middle of nowhere. The nearest town to me has a population of 600. Homes that were $300k pre-pandemic are now $500-$600k. Zoning is no issue here. There aren't many places in our country where home prices have gone down or stayed the same.

[supertrope]

When people are priced out of urban cores they select housing in suburbs. When those seeking suburban housing are priced out they bid up the price of rural housing.

There are a lot of immigrants working in construction. Decreased immigration in the past few years has pushed up wages especially in lower wage jobs like construction laborer. Trade wars and the aftershocks of the Covid pandemic have pushed up the cost of materials. 3% mortgages supercharged demand.

Restricting immigration won't stop a San Jose, CA resident from moving to Boise, ID.