> ... These days most people regard that as horrible and in no way justified.
Sure, but does that mean the family of five that was finally able to afford a home last year after scraping for years should pay for that? They could even be in the same demographic as the original victims of those exclusionary policies.
> Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does
I'm not so sure, depending on how it's handled. Housing is a free market, and as such it's subject not just to supply and demand, but people's expectations of supply and demand. If I just bought a house and policies were announced that I thought might not just stagnate my house value, but actually reduce it over time, inflation-be-damned, I would be mightily tempted to sell if I had options. Get enough people doing that, and you might have a run-away market drop. The people who mainly benefit from that are those that are poised to take advantage of the situation on short notice (those with money available already and can take advantage of the eventual rebound).
There are obviously ways you could crater the housing market in an area on purpose through policy, so it's not out of the question it could happen accidentally. I'm mainly arguing for people to see both sides and try to prevent that, and soften any blow and be prepared to counter a market that looks to be behaving irrationally.
> In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value.
I agree. I just think it's a complex situation that requires nuanced policy and constant attention, and isn't as simple as "build more houses" implies.
I would encourage you to attend some planning hearings, city council meetings, and so on before asserting that. Because it really, really isn't. Look at a zoning map of your city.
I mean the buying and selling of existing houses, not the building of new houses. Those comments are primarily with respect to what could happen to the housing market for existing homes in a city that implements large changes housing policy.
If you believed in principles of free market you wouldn't start by explaining how bad it is for person X that their investment dropped in value.
They made a bet, they lost it.
Someone else made a different bet and won.
That's how free market works. People are free to make bets and they loose or win based on how right they were.
Trying to enact policies that mess with market forces because you want to protect that person who lost the bet is the opposite of free market and also a bad economic policy.
> California’s high housing costs are crimping economic productivity, increasing poverty rates, lowering homeownership, increasing crowding and lengthening commute time
This is the cost of protecting the investment of your hypothetical family not paying "unfair" prices.
Not to mention that your hypothetical scenario wouldn't happen if we had reasonable zoning policies to begin with.
The only reason price of a house could significantly go down due to new construction is that we allowed to prices to go up 10x in the past.
If we were building enough to meet the demand, everyone would be paying roughly the same price and price increases would roughly match inflation, not exceed it by miles.
I kind of get his point though: what if all this is pushed to the breaking point, and things snap suddenly?
First of all, I just don't think that will happen. Regulations aren't changing quickly, houses aren't that fast to build, and if prices start to go down, building is going to slow down too.
Second of all, if "the dam breaks", it's only because of years and years of doing the wrong thing, so yeah, it still sucks for whoever gets caught out, but the longer you put off fixing things, the worse it's going to be.
> If you believed in principles of free market you wouldn't start by explaining how bad it is for person X that their investment dropped in value.
Houses are bought and sold on a free market. Houses are so much more than just an investment to the majority of people that purchase them. If you disagree with that, fine. Feel free to work towards changing many decades, if not centuries, of culture.
> They made a bet, they lost it.
There many are reasons why the government, whether it be local, state or federal might not want to punish people that tried to set down roots to establish stability just because other people decided that was a good market to play in, even if the latter group's thinking has infected the former to some degree.
> That's how free market works. People are free to make bets and they loose or win based on how right they were.
Yes. The problem here is that while a free market is agreed upon by many people to be an effective way to make sure the housing market is somewhat fair, it's also a very dangerous way to allow a very important resource to be handled if there are no controls. Would you argue that bread and meat should be allowed to reach 1000% or more the current price in a short period, or should the government step in to stabilize the market because these are essentials for many people? What about electricity? Housing isn't quite on the same level, but it's important and is not some abstract fungible product to the majority of people.
> Trying to enact policies that mess with market forces because you want to protect that person who lost the bet is the opposite of free market and also a bad economic policy.
No, providing stabilizing controls to markets is not bad economic policy. If you think so, perhaps we should abolish the Federal Reserve, and just let the market do what it wants? How bad can it get? Geez, why did we even start the Fed anyway...
> If we were building enough to meet the demand, everyone would be paying roughly the same price and price increases would roughly match inflation, not exceed it by miles.
Then let's do that, and let's look to make sure we're actually doing that by tracking demand, and prices, and trying to make sure we make informed decisions.
Has a single thing I've said lead to you believe I'm not for that? Because I'm pretty sure I've advocated for exactly that type of thing in every comment.
> Even IF people bought a lifetime worth of food or electricity, I still wouldn't care. A 90% decrease in costs for food and electricity would STILL save 10s of thousands of lives every year.
And yet the "saving lives" portion of this comparison only works with food, and a select other few items. Do I really have to explain why making a comparison between items and using a feature that only exists within the compared to situation makes for a poor comparison?
Are you saving millions, or even hundreds, of lives by dropping house prices immediately in a locale instead of looking for policies that both create housing (hopefully affordable) while also trying to reduce the most egregious losses from the middle class?
To be clear, again, I'm not against allowing house prices to drop, and I'm not against building more housing. I'm for a considered approach that tries to reduce extreme negative impact for people who would also have a hard time dealing with a large drop in their home price? Because I'm having a hard time understanding why people are so averse to trying to find a best possible option instead of just doing the thing that immediately just sounds like the simple thing to do.
Feel free to have the last comment. On this topic, I think I'm done telling people over and over again how they've ignored the actual point of my argument only to have them double down.
Sure, but does that mean the family of five that was finally able to afford a home last year after scraping for years should pay for that? They could even be in the same demographic as the original victims of those exclusionary policies.
> Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does
I'm not so sure, depending on how it's handled. Housing is a free market, and as such it's subject not just to supply and demand, but people's expectations of supply and demand. If I just bought a house and policies were announced that I thought might not just stagnate my house value, but actually reduce it over time, inflation-be-damned, I would be mightily tempted to sell if I had options. Get enough people doing that, and you might have a run-away market drop. The people who mainly benefit from that are those that are poised to take advantage of the situation on short notice (those with money available already and can take advantage of the eventual rebound).
There are obviously ways you could crater the housing market in an area on purpose through policy, so it's not out of the question it could happen accidentally. I'm mainly arguing for people to see both sides and try to prevent that, and soften any blow and be prepared to counter a market that looks to be behaving irrationally.
> In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value.
I agree. I just think it's a complex situation that requires nuanced policy and constant attention, and isn't as simple as "build more houses" implies.
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