Post AhtugtctZ2C1wwGbx2 by wreimers@mastodon.social
(DIR) More posts by wreimers@mastodon.social
(DIR) Post #AhtuD4VWXmeZ0db7Fw by ZachWeinersmith@mastodon.social
2024-05-15T02:02:03Z
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Stupid econ question:So it looks like a lot of remaining inflation is rent. In that case, wouldn't you want to lower rates to increase home-building and home-ownership in order to reduce rent pricing?
(DIR) Post #AhtuQVWjOhZaZbZLHs by brennen@federation.p1k3.com
2024-05-15T02:04:25Z
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@ZachWeinersmith as a counterpoint, why not do everything possible to create a permanent underclass
(DIR) Post #AhtugtctZ2C1wwGbx2 by wreimers@mastodon.social
2024-05-15T02:07:26Z
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@ZachWeinersmith More corporate owners would result, nullifying any kind of market shift. Ultimately, this strategy would lead to higher rents. :(
(DIR) Post #Ahtuok4gxdCUdt0fke by czimm_economist@sciences.social
2024-05-15T02:08:51Z
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@ZachWeinersmith This would take a very long time to be finally reflected in rents.
(DIR) Post #AhtupAbCLOeQuEQ01o by WolfIsMe@mstdn.social
2024-05-15T02:08:54Z
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@ZachWeinersmith There's a lot of other things involved with increasing housing. One of the bigger obstacles, from what I've read (and see) is zoning. And that ties directly in with people who already own their single-family homes who'll cry murder at the mere suggestion of changing zoning to allow more density.It also plays with the idea that one's home and increases in value are the biggest part of most people's equity, so anything that could devalue that will be challenged. 🤷‍♂️ It's beyond me
(DIR) Post #AhtutfLvwbDZRgQFTE by jessta@aus.social
2024-05-15T02:09:44Z
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@ZachWeinersmith The problem is that people borrow money for more things than housing.
(DIR) Post #AhtuuIOQnFOAWitIHI by johnefrancis@mastodon.social
2024-05-15T02:09:52Z
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@ZachWeinersmith yes. Lowering rates reduces mortgage carrying costs, less expense to be recovered by rent.And no. Lower rates reduces mortgage carrying costs, making larger mortgages more attractive and causing more money to chase the available properties or construction driving up prices . Govts have to work hard at ensuring supply will increase. It can't really be done just with rates. Or even just with money. It requires legislative, policy, and direct action. Like... building housing.
(DIR) Post #Ahtuv67TuXXWkdLSng by duncan_bayne@emacs.ch
2024-05-15T02:09:59Z
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@ZachWeinersmith Nit-picky answer (of the sort I hope you appreciate): inflation is, strictly speaking, increase in the monetary supply.The question itself is a sound one :) But stating that any proportion of inflation is rent is conflating two separate concerns: increases in the cost of living rises, and rising inflation.
(DIR) Post #Ahtv00itP263ShBdJo by mivox@mivox.net
2024-05-15T02:10:52Z
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@ZachWeinersmith Banning investment companies from owning single family homes, or multiple apartment buildings, would make a much bigger difference much faster.
(DIR) Post #AhtxGz0pDTb0zGnMga by Doomed_Daniel@mastodon.gamedev.place
2024-05-15T02:36:21Z
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@ZachWeinersmith Who is "you" in that question, and are they even interested in reducing inflation?Assuming "you" is your government/Fed (who else would be in the position to lower rates), isn't inflation good for them (as long as it's not hyper-inflation), because it reduces the value of the national debt?
(DIR) Post #AhtyB8Zwpr2YsF04DQ by LovesTha@floss.social
2024-05-15T02:46:30Z
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@ZachWeinersmith If access to funds to buy/build was actually the problem, then yes.But at least in the far south west psuedo state of Australia the reason rents/purchasing costs are high is because developers enjoy having them high. Building enough public housing to keep housing costs in check through having real competition is the only way to really solve things.
(DIR) Post #AhtzrSOvcvOkT5ab1U by nitpicking@mstdn.party
2024-05-15T03:05:22Z
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@ZachWeinersmith In isolation, maybe. In practice, lowering interest rates has other effects. Also, it would take years--home-building is not generally an overnight thing. And home ownership is bad for society, for many reasons. (No, I wouldn't say provocative things. What gives you that idea?)
(DIR) Post #Ahu1dkqKSmKtWF025I by JPalmerGD@mastodon.social
2024-05-15T03:25:17Z
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@ZachWeinersmith realistically interest rates do not benefit affordability by the masses. If they're low, properties are bought up by those with capital. If they're high, they are rented at exorbitant rates.We need laws that discourage and tax multiple ownership. Then use those taxes to subsidize housing costs.Instead the US further reinforces its poverty class system.
(DIR) Post #Ahu3bP2qjjfxF6rWgy by Neblib@mastodo.neoliber.al
2024-05-15T03:47:15Z
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@ZachWeinersmith I think that'd increase demand further on an already low supply. We simply have a lot of supply side shortages in materials, workers, and prime land legally zoned for cost effective improvements that we need to address before subsidizing demand further (via lowering raters or rent controls) can make much of a difference.
(DIR) Post #Ahu59iHrniYGimoKa8 by andrei_chiffa@mastodon.social
2024-05-15T04:04:42Z
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@ZachWeinersmith who would want that? Insane rents not only generate quasi-guaranteed revenues compared to anything else, they also drive the property value up. Due to how it grew, a lot of people’s retirements depend on it, and depend on it keeping growing.
(DIR) Post #Ahu5s9jR7iZsa5tkXo by ardouglass@mastodon.social
2024-05-15T04:12:44Z
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@ZachWeinersmith the entire neighborhoods being built as rental properties is probably the primary challenge to this.
(DIR) Post #AhuH6ZD6I6K99Qqbke by utterfiction@mastodon.me.uk
2024-05-15T06:18:34Z
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@ZachWeinersmith Something something Land Value Tax. But it’s not a popular idea, particularly amongst those in power, who typically own a lot of land. The USA would definitely have a philosophical and possibly constitutional problem with it.
(DIR) Post #AhuWM9p5wjG8MNVlIm by twasink@aus.social
2024-05-15T09:09:28Z
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@ZachWeinersmith building houses lowers rents the way expanding highways solves traffic jams. It’s part of the solution, but without the other parts, you end up back with the same problem a few years later.
(DIR) Post #AhufR23FAUMFI8WpPc by BenAtkinsonPhD@econtwitter.net
2024-05-15T10:51:11Z
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@ZachWeinersmith Rates do need to be lowered, but I believe the best approach is to build more affordable housing. I do not totally oppose rent controls in the very short term while the housing is built, but such regulations without increased housing supply would only make the shortages worse in the long run.
(DIR) Post #AhugCX0Zt95ougvmcq by toaster@mastodon.online
2024-05-15T10:59:47Z
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@ZachWeinersmith in the UK low rates led to land hoarding not building alas. In theory low rates -> rising prices makes building competitive, but that also increases the price of good sites. If you can afford to buy and build on 1 site… you can instead just buy 5 and wait for their prices to rise. Then you’ve got a strong incentive not to build on any, or sell to anyone who would, as it’d decrease the value of your portfolio.
(DIR) Post #AhumeD9DvFqp9NYaQa by proprietous@mastodon.social
2024-05-15T12:12:01Z
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@ZachWeinersmith Let me weep in your general vicinity about the state of zoning in areas where rents are high. :( A lot of cities seem to be taking the "discourage people from moving here" tact rather than the "build more housing" tact and it makes me very frustrated! Unfortunately, because a lot of people's wealth is tied up in the value of their homes, they have an incentive to discourage new home construction.
(DIR) Post #Ahuop80bZMIGJ0rJqa by ZachWeinersmith@mastodon.social
2024-05-15T12:36:23Z
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@proprietous But if we get ENOUGH zoning restrictions maybe can can justify a Mars base!
(DIR) Post #Ahuot0oYGAql9Q4b1E by kentwillard@zirk.us
2024-05-15T12:37:06Z
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@ZachWeinersmith Yes. Shelter price as BEA & BLS measure it lags market rent by 12+ mo due to panel survey methodology. Weirder is assumption that homeowners rent their house to themselves at market rent for a house (not apt). Regardless, we need more multifamily; permits have plummeted in past year.The PCE weight for shelter is much smaller than CPI (~ 15% vs 32%). PCE remains high because of auto & home insurance inflation, which have mandated, inelastic demand, so higher rates won't help.
(DIR) Post #AhutM7O1ItHDkSnVU8 by proprietous@mastodon.social
2024-05-15T13:27:11Z
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@ZachWeinersmith breathable air now requires a variance that must be granted by City Council after a community design review scheduled with the neighborhood Registered Community Organization (RCO), which is required for Zoning Board of Approvals (ZBA) review, which must happen after a review by the historic commission and the art commission.Also if the parcel in question hasn't been updated in the city's land records database your review will be rejected. There's an 18 month update backlog.
(DIR) Post #AhutaxH5BKNKjMcxOq by ronstieger@mastodon.online
2024-05-15T13:29:51Z
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@ZachWeinersmith no. (1) the rent in CPI includes owner-equivalent rent, so lower interest rates -> higher home prices -> higher “rent” component of CPI. (2) interest rates don’t just affect one sector, so even if it did lower rent due to more construction, it would increase inflation in other sectors. If you want to target just rent, you need to do that via regulation (reduce zoning restrictions, reduce tariffs on construction materials, don’t subsidize demand, etc.)
(DIR) Post #AhuxQKfkFTgdveLxZY by zenten@dice.camp
2024-05-15T14:12:45Z
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@ZachWeinersmith it would raise the costs of house purchases, at least in the short term. Home building would also take a long time to kick in, and for rentals especially is more supply constrained by things like what rules municipalities have for what can be built where