[HN Gopher] Barcelona buys apartment building at center of evict...
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Barcelona buys apartment building at center of eviction protests
Author : toomuchtodo
Score : 107 points
Date : 2025-02-18 15:19 UTC (4 days ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| toomuchtodo wrote:
| https://archive.today/9QHwT
| pestatije wrote:
| i have to pay EUR950 for an apartment 30km from the CBD, why on
| earth does this guy have the right to only pay EUR700 to live
| bang in the middle of the CBD?
| bell-cot wrote:
| You're paying (my guess) a market rate, which scales decently.
|
| He's getting a "fame _du jour_ " special deal - which for-sure
| does not.
| pestatije wrote:
| whatever the deal hes getting, why is it on my and everybody
| elses taxes?
| bell-cot wrote:
| Municipal politics often resembles a Reality TV wheel-
| squeaking contest. He worked to get on the show, played,
| and won a modest prize.
|
| Was it worth all his time & hassle? I'll guess "no", but I
| don't follow Spanish politics.
|
| Meanwhile, a wide variety of Spanish lotteries offer you
| chances to win vastly larger prizes, at taxpayer expense,
| with a quick & easy ticket purchase. Have you bought one?
|
| (/s?)
| miguelxt wrote:
| What do you mean at taxpayer expense? Spanish's National
| Lottery is one of the few State-run enterprises that
| returns real money to the taxpayer.
| bell-cot wrote:
| _Net_ , yes. But inside that Lottery - ticket sales are
| income, and collected winnings are expenses. And I'd bet
| that _unclaimed_ winnings end back up in the government
| 's coffers - therefor, you _claiming_ your winnings means
| that you benefit at taxpayer expense.
| aziaziazi wrote:
| I hate seeing my taxes wasted on roads maintenance,
| airports and medical facilities for the ones that didn't
| bother having a physical activity or eating healthy during
| they life (the list can go very long). Don't take me wrong,
| I'm happy to have roads and hospitals but not at that
| scale. I pay vastly more for those than what I benefit
| from.
|
| On the other hand I'm very happy to freely use the new
| cycling roads and benefit from a somewhat stable and secure
| society where the chances are low to encounter a furious
| outcast that want to rob me.
| luckylion wrote:
| You've misunderstood the point. Roads, airports, medical
| facilities are shared infrastructure. Private living
| arrangements are not.
| Ambolia wrote:
| It's a publicity stunt to score points while solving nothing.
| Same issue in Spain with squatters, it allows the goverment to
| confront tenants with landlords while the goverment does
| nothing.
| ljm wrote:
| Your problem still isn't with the guy paying lower rent, but
| scarcity amplified by companies repurposing residential housing
| stock as tourist accommodation.
|
| You too could live right in the city at an affordable rate if
| AirBnB and property owners didn't force out the locals to make
| a quick buck on holiday makers.
| energy123 wrote:
| Out of all the misdiagnoses of the housing crisis, this is
| the one I appreciate the most due to its adjacency to the
| truth.
|
| By blaming AirBnB as the root cause, you're implicitly
| admitting that the problem is too little housing supply.
|
| Great. So how can you increase housing supply? Your solution
| would be to ban AirBnB, which frees up only less than two
| years worth of new housing stock, while simultaneously
| reducing tourism revenue. This is a temporary and non durable
| solution that solves none of the underlying problems that
| will lead to a lack of supply 5 or 10 years down the road.
|
| The durable solution is to increase housing starts by
| deregulation and financial incentives or public housing. If
| you double housing starts, in a decade you would have to ban
| more than five AirBnBs worth of houses to break even. This is
| the durable solution.
| hombre_fatal wrote:
| We fixate on the easiest things to fixate on, and it
| becomes an easily attacked effigy for the real problem.
|
| When I lived in Mexico City, my friends would complain
| about gringos causing an increase in rents when the places
| they wanted to live for cheap were populated almost
| entirely by every Mexican who makes more money than they
| do.
|
| Yet there was this implication that if you could somehow
| shut down gringo tourism, there would be no competition for
| living in the nice apartments in the nice neighborhoods.
| They would be desperate for your 2000 pesos or something.
| titanomachy wrote:
| This sentiment is certainly true in some places, but
| Mexico City is so big and with such a huge permanent
| population that tourists will only ever be a drop in the
| bucket.
| scythe wrote:
| >The durable solution is to increase housing starts by
| deregulation and financial incentives or public housing.
|
| I think that there is a negligence of the economic
| conditions that face the construction industry in this and
| most similar arguments. Construction tends to be a pain
| point for costs, yet it is almost universally seen as a bad
| career. How can we reconcile this?
|
| It's a boom-and-bust industry. Some years there is more
| work than people can handle, others they are struggling to
| get paid. Part of the solution should be to try to level
| out the cycles by building public housing when there is a
| downturn, and pulling back when there is not.
|
| However, this is basically opposite of the cycle of
| populist demand for public housing, which tends to spike
| when prices are high and taper off when they go down. I
| don't have the deep knowledge of economics to make this
| argument robust, but what I think I'm aiming at is a sort
| of Keynesian approach to construction policy.
| ljm wrote:
| It's actually worth stepping back a bit because everyone
| has _a_ cause and everyone has _a_ solution.
|
| Short term lets, landlords, corporate investors, foreign
| investors, property speculators, immigrants... are all
| soaking up the supply of housing and pricing locals out of
| an area! Fix it by banning the lot of it!
|
| The other argument is always that none of that really
| matters, just build more houses okay? Millions of 'em.
| Deregulate, reform planning, do whatever it takes.
|
| Looking at the bigger picture you'd want to tackle both the
| demand and supply side. Housing is for living in, not
| investment, so disincentivise foreign investment, corporate
| landlords, buy to let, etc. and basically make it less
| attractive than other forms of investment.
|
| This would help in a city like Barcelona because housing
| density is already high and frees up existing supply that
| can be occupied by locals once more. You might find a place
| in Poble Nou or Gracia again instead of having to trek out
| past Sant Cugat.
|
| Similarly, houses need to be built and in many cases
| NIMBYism or planning regulation gets in the way of that.
| But another challenge is building the workforce to build
| not just the homes but the town infrastructure around them,
| as well as the incentives for businesses to do that as you
| say.
|
| If you don't tackle the issue on both the demand and supply
| side at the same time then I feel like you just end up
| where we are now, where lots of houses and flats are built
| but either unaffordable or snapped up by the wealth class
| as an asset.
| miguelxt wrote:
| Hard banning Airbnbs will for sure push long-term rent prices
| down, but not by an amount enough to make them affordable. We
| already have evidence from cities with active bans. Prices in
| NYC or Lisbon have not come down significantly.
|
| We still have to wait a few years to see the real effect that
| bans have on prices. Lowering prices at most 3-5% by banning
| Airbnb won't make anybody happy and will come with some
| negative effects like reduced tourism (and other economic
| activity), which is a very important part of Spain's GDP.
| kazinator wrote:
| Regarding tourism, I think airbnb encourages mainly poorer
| tourists, who just eat food, drink mostly water and take
| pictures.
|
| If you want $$$ from tourism, you have to find ways to
| attract the rich.
|
| D'oh!
|
| The rich don't necessarily like their destinations
| touristy. They don't like to elbow their ways through
| crowds, stand in lineups, or have stranger "extras" in
| their pictures.
|
| Airbnb contributes to "touristy".
| bombcar wrote:
| Another problem is AirBnB almost by definition are less
| dense than hotels.
|
| If there were no AirBnB, the economics for a new high-
| rise hotel would be much better.
|
| But it all comes down to increasing desirable supply
| (which may be density dwellings at the end of an express
| train) or building entire new cities (or rejuvenating
| others).
|
| At some point, if supply outstrips demand, prices will
| start to stabilize - maybe fall.
| scythe wrote:
| Tourism is by definition a small fraction of overall
| global economic activity. Basically the only places which
| can really run on tourism have major geographical
| (Barbados, Andorra) or extraordinary historical (Venice,
| Kyoto) advantages, or both (San Francisco, Cusco).
|
| My recommendation is that if you want to encourage
| tourism, change your mind. Build a great place to live
| and if you do a good job, you might get a boost in a
| century. I would call this "the Chicago model".
| motorest wrote:
| > i have to pay EUR950 for an apartment 30km from the CBD, why
| on earth does this guy have the right to only pay EUR700 to
| live bang in the middle of the CBD?
|
| You have to pay EUR950 for an apartment 30km away because the
| average rent in the city center is EUR2000.
|
| The average salary in Barcelona is EUR2800, whereas the average
| rent is EUR2000.
|
| Do you understand the problem? I mean, answer your own
| question. Why do you pay EUR950/month to live in the boonies?
| Would you pay EUR950/month to live 30km away if you could pay
| less than that to live closer to the city center?
| Xenoamorphous wrote:
| But why would anyone be entitled to be in the center? Am I
| entitled to a EUR80k BMW too?
|
| The most desirable areas to live are not for the average
| salaries.
|
| Don't get me wrong, I think housing is one of the most basic
| rights that every human being should have. That doesn't mean
| rent should be as cheap in highly desirable areas as in not
| so desirable ones. If people are living around big populous
| cities due to work then make public transport good, cheap
| etc.
| jddj wrote:
| This sounds like the market has reached equilibrium with the
| average dual income family paying 35% of their gross income
| on shelter.
|
| 35% is a touch high but not out of line with the 30%ish
| recommendations from banks/estate agents over the years.
|
| It might be an issue that the cost of the average 1br flat
| isn't attainable on a single average income. But I think we
| can see how we arrived here.
| motorest wrote:
| > This sounds like the market has reached equilibrium with
| the average dual income family paying 35% of their gross
| income on shelter.
|
| You need to redo your math. The effort rate is calculated
| taking into account all fixed monthly expenses, not just
| rent.
|
| By your own numbers, rent alone is already higher than the
| maximum admissible effort rate for a household with above
| average incomes. On top of this you still need to account
| for your actual cost of living.
|
| You're looking at a scenario where a household with an
| average or above average income has to endure a effort rate
| well above 40%-50% to afford living in Barcelona.
|
| To make matters worse, in Barcelona rents do not drop that
| much even if you start to entertain commutes of well over
| 2h/day.
|
| There's nothing healthy about it.
| smikhanov wrote:
| But why not?
| guax wrote:
| Maybe the best sentiment is to ask why do you have to pay 950
| and not why some small minority can get a better deal.
| titanomachy wrote:
| 30km? And you commute to Barcelona?
| bell-cot wrote:
| Interesting that the article talks about similar housing crises
| in other major European cities. But never hints at Vienna having
| solved the problem a century ago -
|
| https://www.bloomberg.com/news/features/2023-11-08/the-desig...
| wesselbindt wrote:
| But think of all the poor landlords who'd be out of work if we
| adopted Vienna's solution on a larger scale. And what about the
| profit margins of Blackstone and the like? Have you no heart?
| ido wrote:
| Did it solve it?
|
| I used to live in Vienna for 8 years (2005-2013). Looking at
| https://www.immobilienscout24.at/regional/wien/wien/wohnung-...
| the prices per square meter are a lot higher than I paid at the
| time: the cheapest rentals I saw was just above EUR10/m^2
| (rare) and more commonly were around EUR15-20/m^2. When we left
| in 2013 we were paying EUR480 per month for a 65m^2 apartment
| (that was already cheap at the time but is even more out of the
| ordinary today).
|
| Anecdotally everyone I know in Vienna started complaining about
| housing unaffordability around the time we left (it was never a
| topic when I got there) & that seems to still be the case.
| barrenko wrote:
| Guess what happened in 2013?
| firtoz wrote:
| The 2013 Vienna Philharmonic New Year's Concert?
| hiatus wrote:
| EUR480 in 2005 is EUR738 today from inflation alone. The
| prices are almost on par with 2005 accounting for inflation.
| ido wrote:
| EUR480 was in December 2012 when we left (I remember the
| date because we flew out Christmas eve '12). It was cheaper
| in 2005.
| orwin wrote:
| As oh 2025, prices in Vienna are much more affordable than
| other European capitals. The reason is obvious, only ~10% of
| the available to rent housing supply is free-market, almost
| half is municipal housing, and the rest is a mix of other
| non-market housing and rent-controlled housing.
| IncreasePosts wrote:
| How hard is it for a person from a random village in
| Austria to move to Vienna?
|
| Is it possible to get that affordable rent within, say, a
| year? My understanding is the wait list for this affordable
| housing can stretch multiple years.
|
| Maybe Vienna is affordable to people living there, but at
| the cost of extreme difficulty for outsiders (even Austrian
| outsiders) to move there.
|
| So, if you grew up in a poor village with little economic
| opportunity, you will have a lot of difficulty moving to
| Vienna to open up your job prospects. The affordable
| housing there comes at the cost of denying outsiders an
| opportunity to better their position in life.
|
| Is that better than riding rents displacing longer term
| residents? Maybe, I don't know, but there are invisible
| victims to many affordable housing schemes.
| truculent wrote:
| > They weren't cheap, either: About 25% of a tenant's wages
| went toward monthly rent
|
| This obviously a lot to pay for such miserable housing, but
| it's also significantly less than private renters currently pay
| in the UK[1]:
|
| > Excluding housing support, the average proportion of income
| spent on rent was 37% for social renters and 45% for private
| renters.
|
| I'm not trying to suggest the current situation is as bad as
| early C20 Vienna. Thankfully, such poor conditions are not, to
| my knowledge, widespread. I imagine other needs like food and
| clothing are more affordable than they were then.
|
| However, it does point to how expensive things have become. If
| we removed some regulation, would housing be pushed further
| towards cheaper but substandard dwellings?
|
| I don't think housing at 25% of low-income exists in the UK. If
| we extrapolated from the current, more expensive housing
| options, how different would 25% housing be from those in
| Vienna?
|
| [1]: https://www.gov.uk/government/statistics/chapters-for-
| englis...
| motorest wrote:
| > But never hints at Vienna having solved the problem a century
| ago -
|
| You seem to be confused, and a tad ignorant too. Public housing
| investments are nothing new, and Barcelona has already
| benefitred from a massive urban development program at the turn
| of the century.
|
| https://en.wikipedia.org/wiki/Eixample
|
| Barcelona has already one if the highest population densities
| in the world. The examples you listed in Austria are already
| eclipsed by the massive appartment blocks in Barcelona and
| neighboring municipalities. Your average city block in
| Barcelona is already 6 stories high or greater. It's a dense
| urban area covered by massive residential blocks.
|
| Even if you start demolishing blocks to replace them with
| hongkong-style skyscrapers, you would need a few decades to
| increase supply in a meaningful way, and even then the impact
| would be negligible.
|
| Barcelona's problem is not supply.
| miguelxt wrote:
| The fundamental issue cannot be ignored: supply and demand.
| Spain population has increased by 2 million in just 2 years,
| far outpacing residential construction. Right now, the system
| excludes those who cannot afford the ever-increasing rents.
| Rent control, although well-intentioned and a very popular
| policy, has numerous negative effects supported by a variety of
| studies both in Spain and abroad. Rent control or any other
| alternate system to allocate the scarce units will leave many
| without access to housing.
|
| The solution, IMHO, building more, could be theoretically be
| championed by the State, but with ever-increasing construction
| costs, regulation, taxes on everything, scarcity of land in big
| cities, and pensions entitlements, where will the money come
| from? It's not cheap to build with the quality standards that
| we all desire everyone to have.
|
| Building co-ops like those that exist in Vienna do exist in
| Spain, but they are not a panacea, the same problems that a
| State-run initiative has will apply.
| smikhanov wrote:
| numerous negative effects supported by a variety of studies
| both in Spain and abroad
|
| Would be interesting to hear about any of those effects, if
| you can elaborate.
| dmix wrote:
| > Right now, the system excludes those who cannot afford the
| ever-increasing rents
|
| It also creates a system where the only new buildings are
| luxury condos because on paper it's usually the only thing
| that would turn a profit after investing a decade of hoop
| jumping and political wrangling. No affordable development
| would ever pass that sort of system.
|
| So the gov is tasked with building affordable housing.
| Creating a bad situation themselves, pointing the finger at
| developers and only offering very expensive bandaids as the
| solution that happens to give them more power, money, and
| control over the city.
|
| Kingmakers in an high end market while feigning solutions for
| the low end, and pushing the middle to the suburbs and small
| towns.
| eitau_1 wrote:
| Vienna is less populous now than it was 100 years ago.
| awongh wrote:
| Singapore has also solved it to a certain degree.
| aimanbenbaha wrote:
| IMO if there is any model to follow to solve the housing crisis
| it should be Japan/Singapore. Vienna is too unique of a case
| and its housing market still suffers from negative
| externalities.
|
| Singapore is also hard to achieve but the HDB mandate made it
| that the government own monopoly on land so they're
| incentivized to provide maximum land utility to its population.
|
| Japan has the best land use zoning in a way it makes it so easy
| to build and develop. They also have a very practical view on
| housing and do not see it as an appreciating asset critical to
| accumulating wealth.
| franciscop wrote:
| > Japan has the best land use zoning in a way it's makes it
| so easy to build and develop. They also have a very practical
| view on housing and do not see it as an appreciating asset
| critical to accumulating wealth.
|
| I want to note that this is in big part due to earthquakes
| and nature in general. In Spain 100-year old houses (like in
| the article) are renovated and relatively easy to maintain.
| However in Japan, between the earthquakes, typhoons, and the
| weather in general, not only you need to be actively
| maintaining it (typhoons), but they become worse over time
| (earthquake damage accumulates).
|
| Source: Spaniard who lives in Tokyo.
| aimanbenbaha wrote:
| Yeah that would be a factor but there's more to that. For
| example the Japanese are so crafty with land use they even
| allow an odd type of development called Zakkyo. Which are
| multi-storey buildings wherein each floor is owned and
| managed independently. The foot traffic isn't restricted to
| the ground floor to enjoy these "third places".
|
| IMO geographical constraints should not be the all-in
| justification for a certain land-use/housing policy. I hear
| a lot chalk up the fact Barcelona stopped building since
| the 1980s because they're surrounded by mountains and the
| sea. Or recently with the LA fires people look at these
| wrong answers. There's no reason for things being like that
| other than NIMBYism and lack of long-term political will
| from local councils.
| hibikir wrote:
| Spain's multi-story buildings are often independently
| owned anyway: the "law of horizontal property", dealing
| with condominiums, is there to mostly deal with shared
| disputes among owners. Buildings where the ground floor
| is stores, the next three have small professional
| offices, all owning the space, and the rest is a
| collection of apartments occupied by their owners is very
| common where there's sufficient demand for said offices.
|
| Barcelona's problems come from a very complicated
| regulatory regime that hasn't just lowered construction,
| but ultimately led to fewer people living in the same
| space. Regulations that favor the renter enough to make
| putting housing up for rent pretty risky in many ways.
| Minimal property taxes that let having an apartment
| unused be pretty attractive. Big tax advantages for
| owning an expensive apartment vs living in a smaller one
| and putting your savings into stocks. Prices that don't
| come down. A location so interesting, and yet at prices
| that are globally affordable, so it is more profitable to
| have an apartment dedicated to low-occupancy rate foreign
| tourism than to have it occupied all year long by a long
| term tenant. Cheap enough for an American in tech to buy
| an apartment downtown, and use it 3 weeks a year.
|
| The market-centric changes that wouldn't just allow more
| building, but make the existing buildings be used more
| efficiently are just not in any local regulator's radar,
| because lowering prices might be nice for renters, but
| it'd be awful for owners, and there's a lot of those, and
| they vote.
| appreciatorBus wrote:
| What does "solved" mean in a non-market context?
|
| Does it mean that anyone, at any income level, and any family
| situation, in Austria can elect to move to Vienna and get a
| reasonable sized apartment within a short period of time,
| perhaps 1 month?
|
| There's nothing wrong with believing that non-market housing is
| the way to go, but we can't judge success on rents alone.
| Mistletoe wrote:
| That looks awful though, like a prison. If all of Vienna looked
| like Karl Marx Hof no one would want to go there.
| freefaler wrote:
| Strange that the main problem is not even mentioned:
|
| The entire process from urban planning to construction completion
| can take 10-12 years, including about 5-6 years for general urban
| development planning and 2 years for partial planning and urban
| development projects.
|
| source: https://www.bbvaresearch.com/wp-
| content/uploads/2024/11/Low-...
|
| So may be if you solve the supply first, then you won't need to
| try to regulate the pricing. The law of supply and demand is like
| the Newton's laws of physics, it works.
|
| But in Europe, the bureaucrats try to solve the problems created
| by regulation with even more regulation. It'll end badly when the
| far left/right use this to win the elections and who knows what
| will happen.
| fph wrote:
| Systems theory tells you that everything with a big lag in it
| is difficult to stabilize. It's like when you want to set the
| correct temperature on your shower; the longer it takes for you
| to feel the results, the trickier it is.
| hombre_fatal wrote:
| Use binary search and you can get that shower dialed in three
| moves.
| reaperman wrote:
| More than 3 moves if the 0%-100% control range is a very
| narrow sub-range of the input range. i.e. 90% of the handle
| movement doesn't do anything at all.
|
| This is actually surprisingly common, often the full range
| of hot to cold happens between 5-15% of actuation or 85-95%
| of actuation.
| PaulDavisThe1st wrote:
| Most European shower controls don't work this way
| anymore, they are thermostatic (i.e. you are just setting
| the desired water temperature, not directly adjusting the
| hot/cold balance). These are spreading to high-end US
| installs too.
| imtringued wrote:
| This is one of the weirdest things about showers. You set
| your shower temperature on the heater itself and then you
| pull the temperature handle all the way to the hottest
| temperature.
|
| There is no point in actually trying to dial in the
| temperature using the handle. Just don't.
|
| Btw. I'm talking about tankless heaters.
| PicassoCTs wrote:
| But the market does not want to devalue the immo-coin by mining
| more coin. The market wants to pump and dump.
| kubb wrote:
| > The law of supply and demand is like the Newton's laws of
| physics, it works.
|
| Do they teach this to you guys in school? Many people
| religiously believe it.
|
| Newtonian physics is a model approximating reality, but it
| breaks down if you analyze cases that can be safely ignored for
| many engineering purposes, like traveling at high speeds.
|
| Supply and demand are worse. They're concepts approximating
| certain trends in economic outcomes that almost always break
| down in real world situations.
|
| For example: more supply can generate more demand. Demand can
| be inflexible with respect to supply. Supply and demand are
| unstable and can change unpredictably. In a monopoly situation
| price can be manipulated. Short term large supply can hamper
| long term.
|
| It's weird that people try to explain the world with supply and
| demand as if everyone else was an idiot who doesn't understand
| simple truths, while in reality they are the ones who don't
| appreciate the complexity of things like urban development.
| Etheryte wrote:
| While this is true, roads in urban planning are a good
| example of this, the more lanes you build, the more traffic
| you induce, I don't think it applies to housing. For most
| part, housing really is a simple matter of we don't build
| enough housing in desirable areas. In many countries
| worldwide, housing construction doesn't even remotely keep up
| with immigration and as long as that's the case, the problem
| won't go away no matter what spin you put on talking about
| it.
| kubb wrote:
| The highest demand for housing is in central locations
| where there's barely any space left for construction. In
| Europe, cities were beginning to form around these nuclei
| often more than a thousand years ago.
|
| There are other factors to consider like transportation and
| traffic, the quality of life of the inhabitants, business,
| tourism, future growth, climate resilience and so forth.
|
| This isn't a let's cut down a bunch of trees and build a
| house out of low quality lumber in a week kinda situation.
| kragen wrote:
| There's plenty of space in Barcelona. It's above the
| buildings that are currently there.
|
| It took 20 months to build the 380-meter Empire State
| Building, which is about 6 days per story, and it is not
| made of low-quality lumber. Nowadays we know how to build
| taller buildings than that, though it usually takes a
| little longer; Yan Zhou Zhou Da Fu Zhong Xin took 6
| years to build (75 months) ending in 02016 and has 111
| floors in 530 meters, thus requiring about three weeks
| per floor. Barcelona wouldn't even be able to do the
| _paperwork_ to build a new building in 6 years.
|
| You might object that skyscrapers are impractically
| expensive. They can be a bit expensive, but they don't
| have to be. Yan Zhou Zhou Da Fu Zhong Xin is half
| residential, consisting of just over 600 apartments and
| hotel rooms, so contains space for about 1200 residences,
| and was built on a budget of US$1.5 billion, about US$1.3
| million per residence-equivalent. This is partly because
| the residences are large; the building's total floor area
| is 508k square meters, so we're talking about 400 square
| meters per residence-equivalent. If you'd carved it into
| 40-square-meter efficiency apartments it would hold 12700
| of them and house 25000 people, at a cost of US$120k per
| apartment. Also, skyscrapers that aren't among the
| world's tallest buildings are generally cheaper per unit
| area.
|
| Skyscrapers are not the only way to get high population
| density, just the least bad way. Yan Zhou Shi has 2500
| people per square kilometer and a per capita GDP of
| US$23k per year. Manhattan, where the Empire State
| Building is (but which has lost the ability to build) has
| 29000 people per square kilometer and a per capita GDP of
| US$550k per year. Giza has 45000 people per square
| kilometer, without many skyscrapers, and a per capita GDP
| of about US$7000 per year (nominal).
|
| Note that Yan Zhou Zhou Da Fu Zhong Xin occupies a lot
| of 27k square meters. The hypothetical same-sized
| building of efficiency apartments would have a population
| density of a million people per square kilometer, 20
| times Giza's and 6 times Imbaba, Giza's densest district.
| Even the actually existing luxury building has a
| population density of about 50k per square kilometer,
| probably denser than Giza.
|
| Barcelona? Barcelona has 15000 people per square
| kilometer and a per capita GDP of US$103k per year.
| Barcelona's problem is not that there isn't space for all
| the people or that greater density would inevitably
| produce misery.
| bruckie wrote:
| For those who don't read Chinese (like me):
|
| Yan Zhou Shi = Guangzhou
|
| Yan Zhou Zhou Da Fu Zhong Xin = Guangzhou Chow Tai Fook
| Center
|
| Edit: and BTW I find it bizarre to use Chinese characters
| like this on an English language forum without providing
| an English translation. To most readers here, they're a
| meaningless string of unfamiliar characters.
| kragen wrote:
| You're a hacker; you eat meaningless strings of
| unfamiliar characters for breakfast.
| Etheryte wrote:
| Wouldn't be surprised if both of those are valid Perl or
| whatever with the right flags.
| ipsento606 wrote:
| Barcelona has around half the population density of New
| York City
|
| "we've tried not building any housing, and we're all out
| of ideas"
| bombcar wrote:
| You only induce more traffic where there was already demand
| for it, or potential demand.
|
| Build a fifty lane wide highway in the wilds of Montana and
| it will carry about as many cars as the current freeway.
| appreciatorBus wrote:
| Yes. Induced demand is real IMO, and necessarily
| restricted to transport, but it's entirely about pricing
| & value, not some fantasy of infinite demand.
|
| We see induced demand in highways because the thing
| highways provide is valued (land for private vehicle
| operation), but the price charged is almost always far
| far less, usually zero. So just like a Starbucks that
| started to offer free coffee, the result is going to be
| long lines.
|
| If housing was being offered below value, then you would
| surely see induced demand in housing. Imagine for
| instance if a govt program committed to offering
| apartments of unlimited size for $0/month. People would
| absolutely decide they need a 5000 sqft apartment instead
| of a 2000 sqft apartment, just as today they decide they
| need to drive to a store 10 miles away, instead of
| walking to one around the corner.
| bombcar wrote:
| That's closer to tragedy of the commons (though not
| exactly) than induced demand.
| nradov wrote:
| Do those places need high levels of immigration?
| cyberax wrote:
| > I don't think it applies to housing.
|
| It does. Evidence: no large city in the US, Japan, or the
| Western Europe managed to lower housing prices long-term by
| increasing density.
|
| Prices only go down if the city population goes down or
| stops growing.
| Etheryte wrote:
| As highlighted elsewhere in the comments, Vienna very
| much did. Once they stopped building it eventually became
| an issue again though.
| cyberax wrote:
| No, they did not. They went down the "decrease
| population" route: https://www.macrotrends.net/global-
| metrics/cities/20107/vien...
|
| Once the population growth returned, the prices went up
| as well. And no amount of new construction helped:
| https://www.globalpropertyguide.com/europe/austria/home-
| pric...
|
| Again, perfectly fits my prediction and contradicts your
| model.
| miguelxt wrote:
| You are disregarding supply and demand because it's not a
| 100% bullet-proof model that can predict all price movements
| in all markets, times, places, or any combination of factors,
| and at the same time are introducing your own imperfect
| models and formulations:
|
| > For example: more supply can generate more demand. Demand
| can be inflexible with respect to supply. Supply and demand
| are unstable and can change unpredictably. In a monopoly
| situation price can be manipulated. Short term large supply
| can hamper long term.
|
| Any model that tries to predict human behaviour will be
| imperfect, we all know that.
|
| There is hardly a monopoly of housing in Spain, if we keep
| the current disconnection between supply and demand, prices
| will for sure keep increasing. There is evidence that
| building more reduces prices. It's not the only condition
| needed to reduce prices, but it's an important one:
|
| https://commonwealthbeacon.org/housing/study-says-
| boosting-h... https://www.upjohn.org/research-highlights/new-
| construction-...
| PaulDavisThe1st wrote:
| > You are disregarding supply and demand because it's not a
| 100% bullet-proof model
|
| I didn't any suggestion to "disregard" the "law of supply
| and demand". I saw a suggestion that whatever kind of "law"
| this is, it is a very different kind of thing than a law of
| physics, to which a comparison was being made.
|
| > Any model that tries to predict human behaviour will be
| imperfect, we all know that.
|
| Yet we can rarely even bound the actual scale of the
| imperfection, so discussing "laws" of economics as if they
| are in some way similar to the law of gravity seems a
| little silly.
| airstrike wrote:
| It's not different, it just has more parameters
| cyberax wrote:
| > You are disregarding supply and demand because it's not a
| 100% bullet-proof model
|
| OK. Can you provide me just one example of a large city
| that reduced the housing sale prices by building more dense
| units? Not by crashing its economy or otherwise decreasing
| the population.
|
| If your model is correct, there should be at least _some_
| examples.
|
| > There is evidence that building more reduces prices.
|
| There is none. Your studies are basically nonsense. Here's
| the strongest result:
|
| > One study cited in her report found that the average new
| apartment building lowers nearby rents by 5 percent to 7
| percent "relative to the trend rent growth otherwise would
| have followed"
|
| Translation: the prices grew, but we managed to P-hack a
| small subset of data that shows at least _some_ effect.
| They could not find actual _decreases_ and had to resort to
| "would have beens".
|
| There's an overview article (that also contains the links
| to the study mentioned in your link):
| https://furmancenter.org/files/Supply_Skepticism_-
| _Final.pdf - feel free to look for the evidence for the
| failure of the "just build more".
| crooked-v wrote:
| The obvious one is Austin, Texas, where average rents
| have dropped signficantly from a massive wave of
| apartment construction.
| https://www.texastribune.org/2025/01/22/austin-texas-
| rents-f...
| cyberax wrote:
| Nope. Rents dropped because the _population_ in Austin
| dropped. It has recovered to 2019 level only the last
| year and is still below the peak 2020 level (stats are
| taken at Jan 1).
|
| 2019 - 978,763 2020 - 995,484 2021 - 964,177 2022 -
| 975,418 2023 - 979,882
|
| For the same reason, the SF rents also dropped by 30%
| during the pandemic.
|
| And if you look at the surrounding Travis County (in TX),
| the population (and prices) there grew.
| lottin wrote:
| All the law of supply and demand says is that the market will
| reach an equilibrium where the quantity demanded equals the
| quantity supplied, and that such quantities as well as the
| equilibrium price are determined jointly by supply and
| demand. It doesn't say that the demand and supply curves are
| unmovable or that they have a particular slope.
| kubb wrote:
| In this form, the law can't be used to draw relevant
| conclusions about urban planning. It's also demonstrably
| false, as the demand and supply never perfectly match.
| lottin wrote:
| The immediate conclusion is that if there's an excess
| demand prices will go up in order to reach a new
| equilibrium. And this exactly what seems to be happening
| in the housing market.
| toyg wrote:
| Price equilibrium is a myth, in practice it's never
| observed. The reality is inflation, because the greed of
| man is unbound.
| appreciatorBus wrote:
| If greed of man is unbound, how come computers, TV's and
| airplane tickets are so much cheaper than decades
| previously?
|
| The idea that people involved in housing are some how
| uniquely greedy has a long history and it's just wrong.
|
| People who own housing - homeowners & landowners - are
| able to be more greedy than others because they are part
| of a cartel. The debate over housing reform & housing
| supply is about whether or not enforcing that cartel
| should be a government function.
| freefaler wrote:
| > It's also demonstrably false, as the demand and supply
| never perfectly match.
|
| Can you expand on that claim?
| whatshisface wrote:
| Supply and demand are defined as the willingness and
| ability to transact at each price. People who want
| something but who aren't willing or able to buy it at a
| given price are the cause of the supply curve. The
| marketplace is full, at any time, of people who _would_
| buy or sell if the price was right. That 's why they're
| curves and not points.
|
| Here is a free textbook that requires no more than
| highschool math: https://openstax.org/books/principles-
| economics-3e/pages/3-i...
| dalmo3 wrote:
| By definition, supply and demand perfectly match whenever
| money changes hands.
| PaulDavisThe1st wrote:
| That's not what "supply" or "demand" means and I suspect
| you know this.
|
| The "law of supply and demand" is a statement about
| aggregate, not individual behavior. "supply satifies
| demand" is not a statement about an inidividual
| transaction in which a person's desires/needs/wants were
| satisfied, it is about the aggregate behavior within an
| economy.
| dalmo3 wrote:
| The statement about the aggregate is meaningless without
| the materialised, individual transactions, because those
| are what determine the price.
|
| I think of it as an order book where supply is the ask
| and demand is the bid. You can only argue that supply
| never meets demand if there's no liquidity, but that
| doesn't refute the "law".
| PaulDavisThe1st wrote:
| The forest and the trees are not the same thing.
| freefaler wrote:
| > Newtonian physics is a model approximating reality, but it
| breaks down if you analyze cases that can be safely ignored
| for many engineering purposes, like traveling at high speeds.
|
| It's a very good approximation and there are special cases
| that it doesn't work. But for a practical human life-scale
| reality almost all of daily use technology is based on these
| laws.
|
| Does the supply/demand work in all situations? No, you need
| to have a at least some resemblance of a free market to let
| the market forces work.
|
| The reasons we know that this law is working are not only
| empirical understanding (try selling your laptop on ebay and
| you'll empirically understand why) but there were at least 2
| testing approaches that validated it:
|
| 1) Experimental validation via:
|
| - Market simulation: Repeated trading rounds (Chamberlin,
| Smith) show prices converging to equilibrium when
| participants learn from prior outcomes. Public price data
| accelerates this process.
|
| - Policy tests: Lab experiments confirm tax/price controls
| create predictable shortages (e.g., rent controls reducing
| housing availability).
|
| 2) Modeling approaches:
|
| - Random coefficients logit models: Isolate price-quantity
| relationships by controlling for unobserved factors like
| brand loyalty.
|
| - Industry analyses: Cement and airline markets demonstrate
| markup adjustments aligning with supply-demand predictions
| under competition.
|
| - Instrumental variables: Cost shifters (e.g., raw material
| prices) validate causal price-quantity responses.
|
| > It's weird that people try to explain the world with supply
| and demand as if everyone else was an idiot who doesn't
| understand simple truths about the world, while in reality
| they are the ones who doesn't appreciate the complexity of
| things like urban development.
|
| This is a strange argument. So basically the supply/demand
| curve works, but there are some consequences if you change
| the supply. Yes, they are. But if you want to have cheaper
| housing you will not save it if you don't build more even if
| there are other negatives from increased supply. And yes,
| urban development might be complicated, but the basics of
| "people need to live somewhere" is not. You might get favelas
| like in Brazil, but if your city grows and you don't build,
| because the people in the government and landlords get
| squeeze more profit from the market the problem will not be
| solved.
| atmosx wrote:
| > Do they teach this to you guys in school? Many people
| religiously believe it.
|
| Well, up until 2008, that was common wisdom. Post-2008?
| Anyone still pushing that line won't get far. In this case,
| that must be the _free_ part of OP's nickname speaking, right
| before the _faler_ kicks in.
| aimanbenbaha wrote:
| >For example: more supply can generate more demand. Demand
| can be inflexible with respect to supply. Supply and demand
| are unstable and can change unpredictably. In a monopoly
| situation price can be manipulated. Short term large supply
| can hamper long term.
|
| What you're describing here is jevon's paradox and it
| particularly works on unfulfilled markets with high price
| elasticity. Additionally the field of economics deals a lot
| of what you're describing in the contexts of
| monopolies/monopsonies.
|
| But as a general rule of thumb, if something has an inelastic
| demand (as in housing) the law of supply and demand will
| always be the guiding concept to explain the shortage and
| high prices.
| PaulDavisThe1st wrote:
| A law of supply and demand that applies only to something
| with inelastic demand (and housing is not a perfect example
| of such a thing) is very different than some universal law
| of economics, and even more different than any law of
| physics.
| whatshisface wrote:
| All of the scenarios you're talking about are covered in
| economics 101. You're _describing_ supply and demand with
| them.
|
| In supply and demand, you have these things called "supply
| curves," and "demand curves." The price is on the x axis, and
| the volume cleared in the marketplace is on the y axis.
| Changes in the situation move the curves around.
| PaulDavisThe1st wrote:
| > Changes in the situation move the curves around.
|
| Aye, there's the rub. Changes in the situation do NOT move
| the gravity curves around in any scenario where Newtonian
| physics is a reasonable model to be using. So whatever kind
| of "law" this "law of supply and demand" actually is, it
| clearly is not like the laws of physics.
| whatshisface wrote:
| The forces in Newtonian mechanics are situational. They
| would be one thing for gravity, another for springs.
| Mechanics is a framework for stating things about forces.
| Gimpei wrote:
| I'm sad to say that you are the one who does not understand
| urban development. There's actually quite a lot of research
| on induced demand (which is the name for what you're talking
| about) and there isn't any evidence of it in the housing
| market. Rather, new construction lowers rents across the
| board. Which makes sense. If a bunch of new people want to
| live in a place and no new housing is made for them, what
| else can happen but a rise in prices?
|
| Here's just a taste. Do please read and if you have a problem
| with the identification strategies, I would love to hear it.
|
| - https://blocksandlots.com/wp-content/uploads/2020/02/Do-
| New-... - https://www.dropbox.com/s/oplls6utgf7z6ih/Penningto
| n_JMP.pdf... -
| https://research.upjohn.org/up_workingpapers/316/ - https://r
| esearch.upjohn.org/cgi/viewcontent.cgi?article=1325... -
| https://furmancenter.org/files/Supply_Skepticism_-_Final.pdf
| - https://www.sciencedirect.com/science/article/pii/S00941190
| 2... - http://andreas-mense.de/wp-
| content/uploads/2020/02/Mense-202...
| davidw wrote:
| Here are more articles about housing, supply and demand:
|
| https://bendyimby.com/2024/01/01/housing-supply-and-demand/
| kurthr wrote:
| Interesting, please explain China.
|
| Seriously, all of the cities are massively overbuilt. More
| so the smaller ones, but even Shanghai, Beijing, Shenzhen,
| Chongqing. AirBnB is not allowed. Huge numbers of units sit
| never used and off market. BTW that's with a SHRINKING
| population. Overbuild estimate is 50M units (150M people)
| with some 20M units unfinished. Prices are insane and
| comparable to NYC/London @ $10k/m2, when incomes are only
| 30% as high.
|
| Why? Financialization. Yes, property values ONLY started
| falling WHEN builders stopped completing buildings. They
| were not places to live, they were investment vehicles.
| This is just as true in London, Vancouver, NYC, SF, Miami,
| etc.
| graeme wrote:
| That sounds like a bubble. What are rents like? A
| property bubble generally involves asset values rising
| past what rents support.
| alephnerd wrote:
| > What are rents like
|
| A 1 bedroom in the inner ring might go for around
| $400/mo, and in the outer ring around $200-300/mo. Double
| those numbers for 2bdrm, and 3-4x those numbers for the
| inner ring of a T1 like Beijing, Shanghai, Shenzhen, etc.
|
| By American standards, that might be affordable, but
| median household income in China is around $300-400/mo,
| and the urban median household income is around $500/mo.
|
| As such, it can be fairly unaffordable, but buyers who
| were lucky can continue to demand high(ish) rents while
| coasting on asset value depending on when they acquired
| property - especially inner ring property.
|
| > A property bubble generally involves asset values
| rising past what rents support.
|
| Rent is often used as a proxy for spending, but that
| doesn't necessarily work in China.
|
| In China, because incomes outside of a couple top tier
| white collar employers remain low, private rents can be
| fairly inaccessible for the bottom half, so employers
| such as large factories often provide subsidized
| dorms/apartments, but these factory cities tend to be
| isolated and self contained from the larger community.
|
| Furthermore, despite significant reforms, China still has
| a corruption problem, and the easiest way to convert
| black money into white money is real estate, so in that
| situation, asset depreciation is acceptable because it
| can make previously non fungible black yuan into fungible
| yuan or USD sellable or mortgagable assets.
|
| This problem has constantly manifested all over Asia, and
| has tripped various former high flying economies like
| Malaysia (1990s), Thailand (1990s), India (2010s),
| Vietnam (present), etc.
| kubb wrote:
| You might be simply struggling with some cognitive hurdle
| here, I don't know what it is, and it's hard for me to help
| you.
|
| Maybe try to research the city of Barcelona, its topology,
| the available space for construction, the process of
| developing high-rise buildings, and then try to ask
| yourself what steps need to be taken to build 100k new
| flats in the city?
|
| Consider the infrastructure, the cost, the timeframe, steps
| needed to ensure quality, and make sure that it doesn't
| become unliveable like american downtowns, compensation to
| the current residents whose flats would have to be
| demolished, damage to the city's character...
|
| Then you could maybe think about what happens when rent
| prices drop, and whether a decrease in apartment prices
| that follow would have some effect on the number of
| mortgage defaults.
|
| Maybe consider the political support you'd need for such a
| development and how you'd get it from the existing
| residents?
|
| Finally try to do some napkin math and figure out how
| quickly these new units would be bought up as vacation
| houses by the rest of Europe and the rest of Spain moving
| from smaller towns to the newly available stock in the
| city. For bonus points you could try to estimate how much
| new housing was built in Barcelona in the last 20 years.
|
| Maybe that'll help. I'm really not sure what you mean by
| "identification strategies", but thanks for all your
| research about just letting developers build denser
| housing. I'm sure if they just listened to your simple
| advice, the problem would have been solved long ago. NYC
| and SF are known for their affordable and high quality
| rentals.
| BurningFrog wrote:
| I'm sorry, but you are completely clueless about supply and
| demand. All the gotchas you think you've discovered are well
| known and covered in economics 101 or at least 102.
|
| I strongly recommend you find a good book and educate
| yourself. Grasping this stuff is the easiest way to
| understand the world better than most. It's also a source of
| lifelong frustration as you see how cluelessly the world is
| governed...
| raverbashing wrote:
| And to be very honest, the problem in Spain is much lower than
| in other European countries (including the UK) and they keep
| building
| mihaaly wrote:
| Property market in prime spots has to be regulated everywhere
| and is regulated everywhere including the (soon to be changing)
| freeest of the free country of US.
|
| Probably the real problem is the not enough regulation against
| investment focused property dealings when the population
| suffers with this essential (next to food, water, health)
| immediate and everyday human need. Those not letting the money
| do what it is for and not spend it but want to park it as long
| as possible drawing out increasing amount from the circulation
| laying dormant in property where it is not even not doing
| anything useful (but the fake value increase generated by
| parking itself) but suffocate the remaining part of society and
| economy sucking away money from other places dearly needed.
| Pulling back functional economy a lot.
|
| Law makers usually have high stakes in property ownership or
| are influenced very heavily by those with lots of wealth to be
| parked for the eternity and there are not enough regulations
| against speculative investments in this essential and everyday
| human need, distorting it, ruining it for the population really
| need it for its real purpose: shelter.
|
| Normally I'd say let people do what they want and after they
| drove the cities into ground with creating unlivable
| situations, take away its essence and charm and attractiveness
| as places where people live and strive then it will reborn on
| the ashes made by excessive tourism and investments, have a
| natural cycle of birth and death, but those could take several
| generations and we all live only a single one, it is difficult
| to watch the cities ruined by the greedy and the selfish while
| having a coffee with a 'this is fine' look.
| jisnsm wrote:
| Not only is the supply side constrained; Spain has received
| over 2 million immigrants in the last five years who need
| housing and who tend to go live in the cities since that's
| where jobs are.
| thrance wrote:
| How's the free market working for you? Is rent cheaper on your
| side of the pond? Can you afford your medicine?
|
| I am tired of this zealotry toward free market absolutism,
| thougtlessly reciting econ 101's tenets as a mantra. Free stuff
| is good actually, some industries just work better and more
| efficiently as a centralized common: electricity, water, rail,
| healthcare... That's an empirical fact. I believe housing too
| could be on the list.
|
| There is more to the economy than rational agents
| systematically looking for what's best at the lowest prices and
| lawful entrepreneurs tirelessly striving to improve the utility
| of their customers.
| dmix wrote:
| Housing is as regulated in American big cities as it is in
| Europe. That's always been the critique in SF and NYC and
| elsewhere?
|
| Aggressive city planning, outdated unchanging zoning,
| backlogs, rapid growth of heritage building, NIMBY
| protectionism supported by municipal gov, extreme tenant laws
| disincentivizing renting half empty properties, etc etc. The
| only solutions they've tried are rent control and extremely
| slow gov investment in housing which have done nothing to
| help (rent control historically reduces supply making the
| problem worse). They've tried everything except liberalizing
| the market and letting people build.
|
| We don't need to wait for huge gov spending programs to solve
| a problem when there's already a mountain of capital waiting
| to build the second the gov lets them do it.
| robocat wrote:
| > some industries just work better and more efficiently as a
| centralized common: electricity, water, rail, healthcare...
| That's an empirical fact.
|
| Not a fact. Easily demonstrated by falsification by examples
| of each of those where they have failed _because_ of
| centralization. Infrastructure is deviously hard to get
| right. Edit: we can find examples of decentralized
| infrastructure that works great (internet, Apps, banking).
|
| Healthcare in particular must always fail because there's an
| unreasonably infinite cost for and ideal service. There's no
| good answer to what price (what resource limitations) we
| should put on fixing little Jimmy's cancer. Governments
| struggle to make compromises in healthcare, and plenty of
| citizens are super unhappy with any compromises made. Of
| course a free market can't fix that problem either.
| Disclosure: I'm not a free market zealot.
|
| Too many people want to define sides and then get idealist
| about "their side"; how tiresome. Perhaps you are similar to
| the free market zealots?
|
| > I believe housing too could be on the
|
| Be careful of what you wish for. Government housing is rarely
| brought out as an example of success? Maybe Singapore. "Too
| much government" is a common reason for housing (market)
| failure. Supply availability is mostly constrained by
| regulations. Demand is driven by desirability. House prices
| are driven by mortgage availability in developed countries.
| House unavailablity is often because of governmental choices
| over regulations and interest rates. Governments obviously
| mostly fail to get those right. What makes you believe a
| government can get socialised housing right?
|
| We don't have infinite resources. Neither government provided
| services nor free markets solve that. Anyone answering with
| either of those solutions is the same.
|
| You might find this article interesting:
| https://washingtonmonthly.com/2020/08/30/libertarians-
| took-c...
| thrance wrote:
| It certainly is a complex topic, with no perfect solution.
| My personal answer to how much we should be willing to pay
| for little Timmy's cancer is "whatever it costs".
|
| By "empirical fact", I meant that our socialized healthcare
| system here in France seems to do a better job than
| America's in two key metrics: cost (we dedicate a lesser
| part of our income to healthcare than Americans, through
| taxes) and life expectancy (ours is slightly higher).
|
| The one caveat I would concede is that we have less access
| to experimental treatments for rare diseases, but we
| eventually get most of them. And at a better bargain than
| Americans too.
|
| For electricity, we had a very cheap, clean grid thanks to
| our nuclear reactors. It started going downhill the instant
| Europe asked us to "liberalize" our national monopoly.
| "Private companies" began reselling electricity for a
| premium. These are essentially useless parasites. Price got
| up, all else equal.
|
| As for housing, I know we already have more vacant homes
| than homeless people (from our national statistics agency).
| So the issue is only one of repartition. I don't care about
| any rationalization or gesturing about "market forces" or
| whatever. We ought to distribute housing to those that lack
| it.
|
| I'll read your article, thanks.
| ipsento606 wrote:
| > How's the free market working for you?
|
| There isn't a free market in housing in any large American
| city. They all have overly zealous zoning policies that
| restrict density, driving up prices.
| temp00345 wrote:
| > The law of supply and demand is like the Newton's laws of
| physics, it works.
|
| Adam Smith was not aware of advertising. Suppliers can
| fabricate demand to manipulate the price. It's not a law, it's
| an assumption about human psychology and a wrong one.
|
| In the case of Barcelona, supply is limited due to the
| geography of the area (sea/mountain) and the inner city is
| already extremely dense.
| freefaler wrote:
| > Suppliers can fabricate demand to manipulate the price.
| It's not a law, it's an assumption about human psychology and
| a wrong one.
|
| Really? Try selling pork sausages to Saudi market. There are
| many failed startups with huge marketing budgets failed,
| because there were not enough demand for their products.
| Mountain_Skies wrote:
| Someone made a bunch of money a few years ago selling
| singing pickles. Doubt there was a sudden human need for
| singing pickles. Someone created that demand.
| freefaler wrote:
| If they made the choice by their own volition (even if
| it's influenced by the marketing) may be they had some
| need for entertainment or consumerism fulfilled by it?
|
| To disprove supply/demand means that no matter the price
| of the pickles the number of pickles sold wouldn't
| change.
| PaulDavisThe1st wrote:
| "There is no X in Y" is not a proof that "There is no X".
|
| The MIT Press had a book in the 90s called "Philosophies of
| Manufacture" that gathered together writings, pamphlets,
| letters and more that flowed around as the industrial
| revolution ramped up in the USA. It is filled with the
| actual industrialists and/or capitalists fretting about how
| there would not be enough demand for their products, and
| openly formulating plans to increase demand via new means
| (which today we would call advertising and marketing). This
| is not some idea flowing from progressive politics, it
| originates with the capital class itself.
| guax wrote:
| That's why real estate in New York and SFO is so cheap and
| accessible. Free market!
| mmiyer wrote:
| The housing market in San Francisco is very much not free.
| Most areas are single family zoned so you are not allowed to
| build apartments (which are very much needed to meet demand),
| and extensive approvals are required to build anything.
| https://thefrisc.com/how-long-it-really-takes-to-get-a-
| build...
|
| Although it is true that the problem of excessive bureaucracy
| is not exclusive to Europe and very common in the US too.
| BobAliceInATree wrote:
| Who said a free market must be cheap or accessible?
| appreciatorBus wrote:
| If real eastate in NYC & SFO is a free market, why do
| homeowners & landowners need to go through a political
| process & seek favour with neighbours in order to get
| permission to build a 3 storey apartment building?
|
| A world where bakers had to seek permission of other bakers
| to increase their daily bread production wouldn't be called a
| market, it would be called a cartel, and no one would be
| surprised to see bread prices rising through the roof if the
| cartel members were successful at enforcement.
| Oarch wrote:
| It's the wild profiteering that must be addressed first.
| Otherwise the already wealthy buy up the new properties and the
| problem grows worse
| atmosx wrote:
| The situation is much the same in cities like Dublin, Athens, and
| London. The issue lies in voter demographics. Older generations,
| tend to be homeowners and homeowners have a vested interest in
| rising property values, not declines. As a result, politicians
| cater to them because they are the ones who turn out to vote.
| jsdwarf wrote:
| IMHO the crisis is fueled by the fact that more people want to
| enjoy the beauty of barcelona short-term (tourists) AND long term
| (digital nomads moving and working from there). Short term
| stayers "pay" with increasing hotel&airbnb prices, long-term
| stayers with low salaries. According to Glassdoor, a software
| engineer in Barcelona has a 30-40% lower salary than the same
| position in e.g. Vienna or Berlin. And believe me, hiring in
| Barcelona is easy.
| holoduke wrote:
| Finding good talent is hard. Spain is filled with low grade
| coders. A bit unrespectful, but I have experienced it already
| for many many years. And not only tech. Also sales etc. Quality
| output is hard to find there.
| vrnvu wrote:
| > Spain is filled with low grade coders.
|
| Are you hiring junior or lower-budget developers? That might
| explain your experience. I've worked with great engineers in
| Spain, but of course, like anywhere, quality varies.
| mezod wrote:
| Never let a good crisis go to waste. If you can use this one to
| finish the catalan middle class, go for it!
| bombcar wrote:
| Has this been tried? Create a non-profit (coop perhaps?) company
| that owns a residential building and rents at something akin to
| market rates or near it, but continually invests any profit into
| producing additional housing?
| pintxo wrote:
| It is a common model in Germany, together with city/state owned
| companies. The latter have often be privatized in the early
| 2000s, unfortunately.
| clayhacks wrote:
| I've heard of this project [0] creating a housing commons that
| owns the building and sells fractionalized "rent credits" to
| fund the initial purchase, with the plan of once one building
| is paid off they can purchase more. Not sure how it's doing tho
|
| 0: https://www.lowimpact.org/categories/economy/housing-
| commons...
| carom wrote:
| The problem with rent control policies is the value of
| properties have gotten away from what the rents justify. For a
| normal investor this means evicting everyone and rebuilding.
| For a coop that is trying to keep things rented it means that
| they are unprofitable.
|
| In LA for example, you can never get a rent controlled rent
| back to market. If someone is paying $600 for a 1 bedroom
| you're never going to catch back up to $1800.
|
| All that said, I don't know why it has to be non profit. What
| you described is a just a real estate developer. Zoning is a
| more limiting factor than anything else.
| bombcar wrote:
| The idea would be a real estate developer that has no reasons
| to extract profits beyond what is necessary to operate.
|
| By staying near market rates you're not "lottery winning"
| some people. By reinvesting all profit into additional units,
| you're going to slowly drive the costs down.
| derdrdirk wrote:
| IMO it is good that Barcelona bought the building. I don't think
| regulating rent prices and the housing market helps lower rents.
|
| In Poblenou, a district of Barcelona where I live, the city has
| decided that 50-70% of each property sold has to be purposed for
| social housing, i.e. limiting the rent to a fourth of the market
| price and choosing the tenants. Many of the district buildings
| are abandoned factory halls. I am rennovating one of them to
| become a house for my family, but am now forced to rent half of
| it to a poor family. From what I can see from the neighborhood is
| that there is almost no building activity and that private
| investments have stopped.
| MysticFear wrote:
| Europe will do everything, except build more housing supply, to
| lower rents.
| betaby wrote:
| Europe is not unique in this. Canada will go extra mile in
| order not to build.
| BobAliceInATree wrote:
| Yeah, the USA (in general) won't do anything at all.
|
| A few medium-sized cities like Austin are the exception to
| this.
| kortilla wrote:
| ???
|
| Lots of large cities are building a bunch. Every large
| city in Texas, Phoenix, Tucson, Salt Lake, etc.
| IncreasePosts wrote:
| Florida feels like every square mile is under
| construction with new builds too.
| bluGill wrote:
| Those could be called medium sized.
| epistasis wrote:
| It's the perfect political position if you want to pacify the
| less economically literate non-land-owners while also
| pleasing the land-owning class.
|
| So we do it inside US cities too.
| mytailorisrich wrote:
| Or limit immigration to reduce demand...
|
| In some European countries population growth is _only_ due to
| immigration. In Spain almost 19% of the population is
| foreign-born and annual population growth is >1%!
|
| It's quite odd that everyone is concerned about the "housing
| crisis" but few people want to mention the biggest root
| cause, even here which is supposed to be about curiosity...
| ajmurmann wrote:
| With the low birth rates in many countries the housing
| problem could be solved once and for all...
| mytailorisrich wrote:
| Population can't grow for ever. We'll need to learn to
| live with a constant population (and even decreasing for
| some time) at some point in any case...
|
| European governments do not want to face this reality and
| prefer to try to convince people that immigration is good
| (polls show that the people increasingly disagree).
| ajmurmann wrote:
| Why not? Earth doesn't look anything like Coruscant yet
| and we've barely settled a single planet
| cyberax wrote:
| Nope. "Urbanist advocates" can create real estate bubbles
| even with a shrinking population.
|
| Case in point: Tokyo. You just need to make sure you
| _have_ to live in The City, and that there are no other
| options for you. And a shrinking population makes that
| _easier_.
| rayiner wrote:
| Housing prices were lower in the past when birth rates
| were higher.
| ajmurmann wrote:
| Of course. I was hoping it was clear my response was
| facetious.
| willsmith72 wrote:
| > in some European countries population growth is only due
| to immigration
|
| You mean like the USA? Or just about every developed nation
| on the planet?
| WillPostForFood wrote:
| Yes, and? Just about every developed nation is having a
| housing problem.
| thfuran wrote:
| They're also mostly having low population growth compared
| to times when they weren't having a housing problem.
| mytailorisrich wrote:
| That's variable by country, and slums are no longer
| acceptable.
|
| The point remains that claiming that everything is down
| to "not building enough" misses half the equation.
|
| In any case, what is the rationale for building more only
| to be able to accommodate more immigrants? (Because
| that's the situation)
| willsmith72 wrote:
| because if you took the US without immigrants with its
| 1.6 birth rate, the economy would collapse
| visarga wrote:
| Housing problem comes from the job market. Cities with
| good jobs will attract people and the price of
| renting/buying will go as high as they can bear. Most of
| the benefit will go to landlords. Moving to a better job
| market will make you little benefit because your
| increased pay will be largely swallowed by the cost of
| housing.
|
| The problem is that employers want their employees
| physically present at the office, and roads can only
| carry them so fast, so being closer to job opportunities
| will reflect on the housing cost. Maybe the solution
| would be to make workplaces more widespread, improve
| transportation to expand commute reach under 30-60
| minutes, or support more remote work.
| cyberax wrote:
| Building more housing does not reduce rents (longer-term). It
| increases them.
|
| Your _only_ option is to make smaller cities (and suburbs)
| more attractive.
|
| Sorry. Harsh but true.
| AnthonyMouse wrote:
| You're repeating propaganda from the people who want rents
| to stay high.
|
| The highest demand areas are high density areas. If you
| convert a medium density neighborhood to a high density
| neighborhood, the demand increases _in that neighborhood_ ,
| but the supply increases _city-wide_.
|
| The reason rents increase in that neighborhood is that even
| though rents in high density areas have gone down and rents
| in medium density areas have gone down, that specific
| neighborhood has gone from a medium density area to a high
| density area and that limited amount of construction by
| itself isn't enough to cause high density areas overall to
| cost less than medium density areas had.
|
| But notice what effect you're having on rents. The medium-
| density area had been $3000 units and high density units
| had been $4000. Now it's high density units, high density
| units city-wide have fallen to $3500, medium density units
| city-wide have fallen to $2600, the amount of housing stock
| has increased by thousands of new units, and you have
| people telling you that you've done something bad because
| the new $3500 units are more than the old $3000 units.
|
| Then you do it again in another neighborhood. $2600 medium
| density units get converted to high density units, high
| density units go from $3500 to $3000, medium density units
| fall to $2300. The high density units are now as cheap as
| the medium density units originally were, but you're again
| accused of increasing rents from $2600 to $3000.
|
| By the third time the high density units are now less than
| the medium density units originally were -- if you haven't
| already been assailed by local landlords using these
| arguments to prevent this from continuing -- but once again
| you're replacing $2300 medium density units with $2700 high
| density units and the claim is that you must be stopped to
| prevent rents from going up.
| motorest wrote:
| > You're repeating propaganda from the people who want
| rents to stay high.
|
| I think you need to take a break and look at the real
| world. OP is right, and you don't understand it because
| you are oblivious to how things work in practice.
|
| The bulk of this sort of investment is focused on a
| gentrification strategy, where cheap residential
| buildings in low-income neighborhoods are bought to flip
| them to cater to a high-income market. Often, occupation
| density is also lowered as the number of apartments per
| floor is reduced so that the real estate investors can
| market larger, spacious apartments.
|
| The end result is that many low-income families are
| priced out of the market to make room to fewer high-
| income households. That's the reality of it.
|
| You call it propaganda, I call it ignorance.
| AnthonyMouse wrote:
| > The bulk of this sort of investment is focused on a
| gentrification strategy, where cheap residential
| buildings in low-income neighborhoods are bought to flip
| them to cater to a high-income market. Often, occupation
| density is also lowered as the number of apartments per
| floor is reduced so that the real estate investors can
| market larger, spacious apartments.
|
| What you're referring to is the type of construction
| which is _allowed_ under the existing regulations --
| increasing density is prohibited so the only way to
| profitably operate a construction company is to make the
| same number of units into more expensive ones.
|
| They don't convert a smaller number of units into a
| larger number of units because that's the thing they're
| _not allowed_ to do, which is exactly the problem. Buying
| a 5-unit building and turning it into a 50-unit building
| would otherwise be quite profitable because you get to
| sell 10 times more units than you bought, which is
| profitable as long as the price of a unit is higher than
| the construction cost.
| themgt wrote:
| A lot of this stuff just comes off as highly abstract and
| ideological, banging the same one-note drum over and over
| and not listening. Have you ever been to Barcelona? It's
| a real place, not just an abstraction. Here's a good
| photo to get a sense:
|
| https://handluggageonly.co.uk/wp-
| content/uploads/2015/07/Han...
|
| Here's an idealista link of properties for for sale:
|
| https://www.idealista.com/pt/point/venta-
| viviendas/41.39993/...
|
| A few things to point out is the city is already highly
| dense and meticulously planned (numbers suggest Barcelona
| has ~50% more people/sq km than NYC - it is far more
| densely populated than any city in the United States),
| and there's relatively a lot of property available for
| sale, but it's quite expensive if you're on a European
| salary. Arguably there's failed market clearing. And
| units are quite small by American standards, not at all
| something you can subdivide 5 units to 50 unless people
| are going to live in coffins. Final point is a large
| number of the cheaper properties will say "illegally
| occupied", because they have a (usually
| absentee/investor) owner who left the place empty and
| squatters have taken over who can't be evicted under
| Spanish law.
|
| It's a complex situation and many more pages could be
| written about it by people who are on the ground and have
| ideas, but this one-size-fits-all "just build more
| density!" solution, while often reasonable in the
| (globally bizarre) American context with lots of land,
| car culture, deserted crime-ridden downtowns, etc, is out
| of touch with the complexity of what's going on in
| Barcelona/Spain/Europe more broadly.
|
| And yes they could also just put up lots of 50 story
| steel skyscrapers to blot out Sagrada Familia, but then
| it would no longer be Barcelona.
| kortilla wrote:
| You're just saying that they destroy more units than they
| build. If that's the case then they shouldn't do that.
|
| That's most certainly not an argument against building
| MORE (as in net positive people capacity) housing.
| cyberax wrote:
| > You're repeating propaganda from the people who want
| rents to stay high.
|
| OK. Give me an example of a city that has:
|
| 1. Growing population.
|
| 2. New dense construction.
|
| 3. Decreasing sale prices (or at least flat prices).
|
| I now have a real estate database for all the US real
| estate transactions since 1995, Japan since 2000, and for
| parts of Europe. I was not able to find such an example
| in this set for a city larger than 200k population.
|
| And I'm sorry, I'm struggling to understand the logic in
| your post. In reality, rents are not a good indicator
| short-term. They are too mercurial and are affected by
| transient effects. For example, rents in SF fell by 30%
| during the pandemic. And not as a result of new
| construction.
|
| If you want a more reliable indicator, you can look at
| 3-5 year sliding average for rents, or at sale prices.
| J_Shelby_J wrote:
| Literally the opposite happened in Austin when they allowed
| more housing. Prices went down.
| cyberax wrote:
| Nope. Rents dropped because the _population_ in Austin
| dropped. It has recovered to 2019 level only the last
| year and is still below the peak 2020 level (stats are
| taken at Jan 1).
|
| 2019 - 978,763 2020 - 995,484 2021 - 964,177 2022 -
| 975,418 2023 - 979,882
|
| For the same reason, the SF rents also dropped by 30%
| during the pandemic.
|
| And if you look at the surrounding Travis County (in TX),
| the population (and prices) there grew.
| cycomanic wrote:
| But if you look at many cities you'll see that population has
| not grown significantly. What has happened is Airbnb which
| has made it viable to take a significant portion of the
| housing stock off the regular market. Just look at the inner
| cities of many places (e.g. Nice) in the off season, they are
| completely empty. The other thing is that rents going up
| dramatically is a global phenomenon, e.g. Australia's
| building industry is relatively unregulated and it
| experienced a housing boom (as did many places in Europe
| btw), and still rents shot through he roof.
|
| The argument that high rents are mainly due to large
| regulations and lack of building is largely not supported by
| the evidence. I mean, in most Europe there was such a
| building boom (due to low interest rates) that sand for
| concrete was getting scarce.
| bobthepanda wrote:
| Looking at raw population numbers is misleading.
|
| Average household size has declined due to changing social
| dynamics (longer times before marriage, fewer kids, etc.)
| so even if population is static you need more units. Spain
| went from 3 in 1990 to 2.5, which is a pretty drastic
| change.
| AnthonyMouse wrote:
| > What has happened is Airbnb which has made it viable to
| take a significant portion of the housing stock off the
| regular market.
|
| Suppose this is true. Then you replace that portion of the
| housing stock with new construction, and what problem is
| there? The problem is only if you're constrained from doing
| that.
|
| > The other thing is that rents going up dramatically is a
| global phenomenon
|
| There have been two major recent drivers of housing demand.
| One, the interest rates that until COVID were near-zero
| (which is a global phenomenon because capital markets are
| global). Two, since COVID, work from home causing people to
| move around and shift where the demand is. Also a global
| phenomenon.
|
| Both of these can drive short-term increases in rents on
| the order of a few years, but they should also drive new
| construction, and then once the construction has caught up
| to the demand the rents would go back down.
|
| Unless the construction isn't allowed to happen.
|
| > The argument that high rents are mainly due to large
| regulations and lack of building is largely not supported
| by the evidence.
|
| It very much is. You can take any two cities and account
| for things like median income and population density and
| when you're done you'll consistently find that the one with
| more restrictive zoning has higher rent.
| fodkodrasz wrote:
| > Suppose this is true. Then you replace that portion of
| the housing stock with new construction, and what problem
| is there? The problem is only if you're constrained from
| doing that.
|
| The problem is, as it can be observed in Budapest for
| example, that the new constructions focus on flats
| suitable for single people, or the short term renters, or
| the luxury segment, and the middle segment of the market
| is pretty much non-existent. Flats suitable for families
| are not being built, in the sizes and number of rooms
| where it would be useful you only have condos with
| rooftop terraces and such thins that unnecessarily
| inflate the prices.
| AnthonyMouse wrote:
| The construction will focus on whatever is in demand.
| Moreover, expensive luxury units often make more family
| units available, because then the new occupants of those
| luxury units vacate the existing family units they'd have
| otherwise occupied.
| thfuran wrote:
| No, it'll focus on whatever's expected to be most
| profitable, which is not necessarily the same thing.
| BrenBarn wrote:
| Unless they keep those vacated units to rent them out on
| AirBnB.
| epistasis wrote:
| If you didn't build those units, they would be taking
| existing units for that rather than the new units, right?
| SR2Z wrote:
| The middle segment of the market 10 years from now is the
| same as the high end segment today.
|
| Obviously when people construct buildings, they put in
| the nicest viable finishes and decor. No profit-seeking
| entity goes through all the effort of raising a structure
| only to finish it off with linoleum and shitty cabinets.
|
| The lack of housing for families is a consequence of 4
| roommates preferring cheaper rent in a 4bd than to rent 4
| singles.
| pineaux wrote:
| Thats not true. Social housing does exactly that.
| SR2Z wrote:
| The difference between "social housing" and "luxury
| housing" is literally whether or not anyone is making a
| profit on it. A new apartment tends to be nice regardless
| of how its construction was funded.
|
| In places where social housing works, the government
| builds enough new, shiny apartment buildings to keep the
| market rent low. Obviously, the construction of apartment
| buildings MUST FIRST BE EASY AND LEGAL for the government
| to do this.
| wongarsu wrote:
| It appears to me like we did manage to build from-scratch
| cheap housing at a profit in the 50s-80s in Europe. The
| key were cheap, dense, ~5 story prefabricated buildings,
| with some greenery around them. What is now known as
| commie blocks in the anglosphere.
|
| Turns out that when you build something that's not
| particularly nice when it's new it becomes unattractive
| as it ages, which creates unattractive high-crime
| neighborhoods. Great to solve housing, but very
| unattractive for anyone else in the area. We basically
| stopped building them
| Retric wrote:
| You _can_ maintain that housing just fine, the market
| generally chose not to.
|
| Further it's not housing that creates poverty, and thus
| crime ridden neighborhoods. Somewhere is going to be
| relatively poor and thus both poorly maintained and crime
| ridden. Cities have seen the exact same building go
| through cycles of poverty to prosperity and back.
| bobthepanda wrote:
| I would actually say it's very rare for a building type
| to be in tip-top shape constantly and not fall into some
| dereliction if anybody but upper-middle income people
| live there.
|
| At least in the US, a lot of the popular "historic"
| building types like the New York brownstone had a midlife
| period where they were deeply unpopular and ill-
| maintained.
| thrwwyfrobvrsns wrote:
| I think this has more to do with the ownership/residence
| situation. There was a study done of a redlined
| neighborhood, mid-century, that was slated for razing as
| part of an urban renewal initiative. The residents were
| all working-class black families. The houses that were
| owned by the residents were well-maintained; the ones
| that were owned by landlords and rented out were of a
| condition stereotypically associated with urban decay.
|
| This makes sense. Owners, even poor ones, will do their
| best to maintain their housing; less wealthy owners
| especially would know that they're likely stuck with
| their unit and should do their best to keep it
| comfortable. Renters have no incentive to (it might even
| be illegal for them to make improvements), and landlords
| are unlikely to cut into their profits if they can avoid
| it.
|
| I would say that policy which encourages long-term
| renting - per-property, as well as per-renter - is
| deleterious to the socioeconomic fabric. The majority of
| a housing unit's life should be spent inhabited by its
| owners, and the majority of a person's life should be
| spent in a house owned by themselves or their family.
| worik wrote:
| > No profit-seeking entity goes through all the effort of
| raising a structure only to finish it off with linoleum
| and shitty cabinets.
|
| Interesting, I observe the exact opposite
|
| New builds use low quality materials uniformly because
| that maximises their profit
|
| There are exceptions, but they are exceptions to the rule
|
| I am in New Zealand. Our building industry is in a
| dreadful state
| epistasis wrote:
| So what happens if you don't build those flats suitable
| for single people. Where are they supposed to go? Are not
| worthy of housing? I really don't understand what the
| problem is.
| thatfrenchguy wrote:
| > Flats suitable for families are not being built
|
| FWIW this is also very true in the United States, layouts
| of new units are generally completely unsuitable for
| families and that's why upper middle class but not rich
| enough folks in San Francisco tend to rent/buy condos in
| older buildings.
|
| Different problem than in France I guess, where the
| square meterage is just too low, here in the US it's just
| wasted.
| bobthepanda wrote:
| US flats generally have a lot more due to different
| social standards; the in-unit washer/dryer is not common
| globally, for example. Or apartments with double vanity
| bathrooms.
|
| The families thing is also because all other things being
| equal, more bedrooms will lower the price per sq ft of a
| unit due to weaker demand; and right now studio and one-
| bedroom demand is so high that you could reasonably build
| a building full of them and generate profits.
| anigbrowl wrote:
| Why don't the short-term rental enthusiasts just
| construct their own properties, instead of upending the
| regular rental market in pursuit of a quick buck?
| seanmcdirmid wrote:
| > It very much is. You can take any two cities and
| account for things like median income and population
| density and when you're done you'll consistently find
| that the one with more restrictive zoning has higher
| rent.
|
| If it were that simple can you give some good examples?
| Hong Kong has little regulation and crazy high prices,
| Tokyo is expensive for people on local salaries even if
| it looks cheap to us (and having structures depreciate to
| zero value over 20 years makes the market weird).
| kiba wrote:
| _If it were that simple can you give some good examples?
| Hong Kong has little regulation and crazy high prices,
| Tokyo is expensive for people on local salaries even if
| it looks cheap to us (and having structures depreciate to
| zero value over 20 years makes the market weird)._
|
| Tokyo is considered to have relatively affordable
| housing.
|
| Hong Kong's lack of regulation is not particularly
| relevant to the situation. It is mainly a political
| issue. Much of the land in Hong Kong remains unused.
| jajko wrote:
| You clearly haven't spent much time in Europe. Almost
| everybody wants to live in city centers where work is,
| especially the loudest complainers. Nobody ain't got no
| time for 1h commute to work each way, thats a bad
| situation by European standards and measurably lowers
| quality of life.
|
| Then there is the fact that city centers are choke full,
| no further place to build, what is there is often so old
| its protected from major changes by various rules and
| laws, and very expensive without exception. So where new
| stuff can be built is relatively remote. But then young
| folks complain how far that is from city center and their
| jobs, that they don't want to spend their lives
| commuting. Construction is certainly allowed, I haven't
| heard about single country banning it in any way, but
| folks want those central places for peanuts. Almost
| everybody wants them, still for peanuts. The fact is that
| even in proper communism stuff that was important, scarce
| and everybody wanted it was a prized treasure with hard
| competition and few winners.
|
| Thats one of the things I see is changing with new
| generations - wanting it all right now, never happy, not
| much humility or hard work to get to some desired place.
| Then hard disappointment when reality ain't some
| fabulated tiktok feed. Ie I am working on setting up my =
| my family modest wealth and even after moving to
| Switzerland with pretty good job it will take me till 60
| at least, even with my wife being a doctor. Young
| consider this a failure, maybe my kids will do so too but
| I don't care. Then folks vote for trump since he keeps
| saying how everything is shit, thats so easy to identify
| with. But for every unhappy western kid there are 10 or
| 100 ones coming from rest of the world working hard, not
| complaining, with laser focus on their goals. A bit of
| discipline and focus can get one pretty far, especially
| with such competition.
| prmoustache wrote:
| The real question is do we want historical city centers
| to become attraction parks only for tourists or do we
| still want people to live there.
|
| AirBnB and the boom of private tourism rental is
| transforming city centers in the former. New housing is
| constructed, just on the outskirts of these cities and
| push people off the city. This is bad for the dymamic of
| the city, this is bad for the environment when people
| pushed outside of city centers usually have to resort to
| drive to go to work...where they used to live, this is
| bad for kids and becomes a health issue when kids can't
| walk to school anynore and this is even ultimately bad
| for tourism itself as these places lose their soul and
| every single restaurant becomes a shitty tourist trap
| where no effort is needed or made in term of quality and
| service.
| CydeWeys wrote:
| > But if you look at many cities you'll see that population
| has not grown significantly.
|
| You've got cause and effect backwards here. The population
| hasn't grown _because_ the housing hasn 't been built for
| them. The city population would have grown if more housing
| were available, but instead what happened is that the
| limited supply drive rents up and kept some people out.
|
| Separately, there's also too few hotels in the city to
| accommodate tourists, so some housing was converted to that
| more profitable use. It all can be traced back to not
| building enough to satisfy increasing demand.
| SR2Z wrote:
| I don't know if you can say that Airbnb is the result of
| market forces - dodging STR regulations and taxes seem to
| be lucrative enough on their own.
| bluecalm wrote:
| Short term rentals fulfil important function. There is real
| demand for it. The problem is that it's expensive or just
| impossible to build anything and that it's very cheap to
| own.
|
| The solution is known: significant land value tax and
| looser regulations to actually use the land. This will not
| happen though because of lobbying of property and land
| owners who enjoy their rent seeking. They will always
| manage to find another scape goat. One day it's flippers,
| next day it's Airbnb. Anything but land owners being forced
| to pay taxes to fund the area they own land on.
| h2zizzle wrote:
| Correct. A phenomenon that IS global is the
| financialization or property (of which AirBNB is an
| aspect). Could it be as simple as, "Housing is now an
| investment, rent goes up because investors want returns,
| the solution is to limit or prohibit using housing as an
| investment"?
| Tade0 wrote:
| My very much European country has been building like crazy
| for the past two decades. Real estate still shot up in
| lockstep with the rest of the world because you can't and you
| won't build faster than people who see homes chiefly as an
| investment buy property.
|
| It got to a point where construction isn't even really
| providing housing, because the units are unusable for regular
| people. There's an apartment block of _just studios_ in my
| neighborhood which are not up to code (too small) but were
| grandfathered in as construction started before it changed.
| The change was enacted so that developers would stop making
| such useless buildings.
|
| China built enough to house its entire population twice over.
| Didn't help them keep housing affordable just how the price
| of gold goes up and down despite a steady increase in supply.
|
| We're well past the point where naive supply and demand is
| effective. There's infinite, induced demand.
| trinix912 wrote:
| The catch here is that the people who first get to buy that
| property usually already have tons of money and just use it
| as an investment, either to resell, rent it out, or use it
| for AirBnB & such. Solving that problem isn't very
| straightforward.
|
| Where I live, for example, the government has been debating
| taxing non-first properties up to 50% (the yearly real-
| estate tax). The idea of the proponents is to make it so
| unaffordable to own more than one property that people
| would stop buying it as an investment or sell off existing
| ones. But the issue is that the people who already own that
| estate (or have the money for more) would still be better
| off by just raising the rent to cover the increased tax
| instead of selling it. So it once again fails those who end
| up paying the rent.
|
| The only real solution seems to be government-funded
| developments with restrictions put in place on who can buy
| them, rent them out, etc. But to do that the government has
| to afford it somehow. They also need to put size minimums
| in place, otherwise we end up with the same _just studios_
| situation, which seems to be a thing with a lot of public-
| funded developments (perhaps because then the politicians
| can claim they "built X flats"?).
| kortilla wrote:
| If those buildings are "useless", how is the developer
| going to make money on it? That doesn't pass a basic smell
| test.
|
| Your example about China is pretty bad. They moved most of
| their population into cities over the past 50 years by
| massively building housing and making it affordable to
| their middle class.
|
| Young people struggling to afford their own place in a tier
| 1 city in China is not evidence of it failing, it's
| evidence of tenants being picky.
|
| China's housing has also had several bust cycles where the
| prices came down. Government intervention and bailouts
| prevented it from being as obvious, but supply and demand
| most certainly work.
| roughly wrote:
| > If those buildings are "useless", how is the developer
| going to make money on it? That doesn't pass a basic
| smell test.
|
| By selling them to someone else who intends to sell them
| to someone else, just like every other commodity on the
| market. Real estate as an investment is less a bet on
| rents and more a bet on land value.
| actionfromafar wrote:
| Which is why we need a land value tax.
| Tade0 wrote:
| > That doesn't pass a basic smell test.
|
| How do people make money on crypto? Just sell it to
| another sucker. I've seen listings titled "Sale! Ten
| studio apartments!" - someone was literally selling all
| of them in one go.
|
| Among the upper middle class around here it has become
| fashionable to have real estate investments -
| interestingly since recently also in Spain - because it's
| seen as a safe bet and, gradually, the default.
|
| As for China: over 70% of household wealth there is tied
| to real estate. Compare that to the US, where it's less
| than half of that and even if you assume pension funds
| pour all their money into real estate, it's still less.
|
| All those busts didn't decrease prices long term. Someone
| holding on to their _housecoin_ through these cycles
| would still stand to gain.
| drdec wrote:
| > As for China: over 70% of household wealth there is
| tied to real estate. Compare that to the US, where it's
| less than half of that and even if you assume pension
| funds pour all their money into real estate, it's still
| less.
|
| That feels wrong. For most households, their biggest
| investment by far is their house. Few households which do
| not own a house have any kind of investment.
|
| So if only 35% of all household wealth is in real estate,
| I would wager you have some outliers skewing the numbers
| (i.e. billionaires).
|
| (This is not a criticism, just trying to reconcile the
| numbers)
| thrwwyfrobvrsns wrote:
| _If those buildings are "useless", how is the developer
| going to make money on it?_
|
| >Build for $1 mil.
|
| >"This building is worth $2 mil! Give me a loan with it
| as collateral."
|
| >Use the $2 mil to invest in something else.
|
| Rinse and repeat. This is also the reason why CRE
| valuations have hardly fallen despite WFH et al. Everyone
| involved understands that valuations _cannot fall_ ,
| because more than the value of the buildings in question
| hangs in the balance.
| seanmcdirmid wrote:
| Chinese housing does not become cheaper during bust
| cycles. Instead, sales volume falls via sellers reluctant
| to sell and real estate companies (mostly owned by red
| families) reluctant to advise lower prices and less
| motivated to show property that is priced less. It's an
| incredibly distorted market for sure, and it's not just
| first tier cities that are expensive (my partner owns a
| villa in a tier 88 that's supposed to be half a mil).
|
| Unrenovated flats are mostly there for speculation
| purposes, think of them as gold to be traded rather than
| something to live in.
| motorest wrote:
| > Europe will do everything, except build more housing
| supply, to lower rents.
|
| I recommend you open Google maps, google Barcelona, and look
| at it. The whole city is a dense urban area, surrounded by
| steep hills. The whole city is covered with >6 story
| apartment blocks. This isn't the US, where you need to drive
| 8h to the nearest town.
| MysticFear wrote:
| I recommend you looking into this new tech called steel. It
| allows you to build vertically extremely tall buildings.
| rad_gruchalski wrote:
| And turn beautiful historical cities into American
| downtown copies?
| J_Shelby_J wrote:
| Woah, I wish and dream of a city in America with a higher
| population density than Barcelona!
| rad_gruchalski wrote:
| We dream about and wish for different things.
| profeatur wrote:
| Someone hasn't seen what Spanish cities look like outside
| the casco viejo...
| lentil_soup wrote:
| Not the case of Barcelona, though. The areas surrounding
| the old town are specially beautiful
| rad_gruchalski wrote:
| And glass skyscrapers are going to make it better?
| lentil_soup wrote:
| Barcelona is one of the densest cities in Europe,
| probably THE densest if you include L'Hospitalet. It
| would rank top 5 in density when compared to any US city
| kasey_junk wrote:
| But it's trending down (fairly dramatically) over time.
|
| I couldn't find stats quickly for Barcelona but in other
| places the amount of space per person takes up in housing
| has gone way up. People now simply won't accept housing
| conditions that were normal in the past.
|
| If more housing doesn't get built but each person demands
| more space faster than the population declines the
| outcome seems obvious.
| gadders wrote:
| Or prevent mass migration.
| whyever wrote:
| Except for Vienna.
| regularjack wrote:
| In many cities in Europe, including Barcelona, there is no
| space to build more houses, so alternative solutions are
| required.
| deepfriedchokes wrote:
| Go vertical?
| rad_gruchalski wrote:
| Yes yes we all crave for living in those 50 story
| skyscrapers with 5000 apartments inside. Like sardines.
| mytailorisrich wrote:
| Rent controls don't work because they do the opposite of what
| would be needed: they reduce supply and increase demand whereas
| you'd want to increase supply and reduce demand.
| righthand wrote:
| How do you reduce demand on an over populated planet where
| building happens slower that selling?
| mytailorisrich wrote:
| In specific areas demand is reduced via higher prices.
| Market 101. Hence why rent controls do the opposite...
|
| Now, in Europe the growing demand overall is due to
| immigration, which is a matter of policy and thus can also
| easily be reduced/regulated.
| hibikir wrote:
| An overlooked part of Spain's problem is that investing
| in having a very big apartment is a much better savings
| vehicle than investing in stock markets. The equivalent
| of an American 401k has a very small contribution limit,
| and wealth taxes hit pretty hard and pretty early. So as
| family sizes shrink, there's a lot of housing
| overconsumption. A single person, or a family of 2,
| living in what in the 80s was a family of 6, plus a live-
| in nanny. So for the same population, you need far more
| built space. The property tax for owning a pretty
| expensive apartment are very low by global standards, and
| housing appreciation isn't a real thing until you sell.
|
| My family in Spain is either very house poor, making
| little and having to rent, or inherited more house than
| they ever need, and keep it underoccupied because trying
| to put it to more productive use is pretty risky.
| Regulations that foster better utilization would make a
| big dent, but they would be extremely unpopular. Even
| those that don't own an apartment just want one to be
| cheap so they can use it as a wealth building tool, as
| almost nobody wants housing as an investment to be a
| pretty dubious deal.
| radu_floricica wrote:
| There _are_ other ways. Less efficient and arguably more
| expensive, but for completeness sake they should be
| mentioned.
|
| For example, build infrastructure that favor sprawling.
| This way people will prefer to live in nicer, smaller
| towns as long as they're still 30 minutes train ride from
| the city. (I'm in Paris now, and their RER is an awesome
| example of this.)
|
| Encourage remote work, or at least don't hinder it.
|
| Test some anti-car measures, like congestion taxes or
| just make whole neighborhoods car free. This makes
| commute time less directly proportional to physical
| distance - if you have to walk 10 minutes or take a train
| either way, you're more ok with living in a suburb.
| odiroot wrote:
| Well, I have a modest proposal...
| righthand wrote:
| If private investment had allowed for people of all income
| types to live in your neighborhood, then the investment
| wouldn't stop. However from your description it sounds like the
| "private investment" was people similar to you that wanted to
| create a neighborhood of ONLY private investor housing
| (wealthy). That's why Barcelona decided that 50-70% must be
| available for lower income levels. Otherwise it ends up like
| America where only 0-20% of housing must be affordable and the
| market ends up being mostly 2nd homes for the wealthy. Mostly
| empty buildings, dead neighborhoods, and airbnbs.
| simplerulezzz wrote:
| Simple rules can fix this and technology can help. Only
| residents can buy real estate. Only one property per household.
| They have to live in it at least 6 months a year. The rest of
| the 6 month they could rent, but only at a long term price. If
| a rental developer wishes to buy they should be steered in a
| area where rental development is allowed and encouraged. And
| then enforce the squatting laws. Because that is hurting the
| local population as well.
| radu_floricica wrote:
| And, I'm saying this in the nicest way possible, gives you
| the right to make up rules on what I can do with my property?
|
| Measures as drastic as this need correspondingly dire
| reasons. You can call it "housing crisis", but the truth is
| there are many ways to fix this that don't come even close to
| this level of communism.
|
| Dezoning, for once - I've linked this before:
| https://unchartedterritories.tomaspueyo.com/p/why-japan-
| succ...
|
| Simply building more, and encouraging people to build
| (instead of encouraging them to do absolutely anything else)
|
| Or, of last resort, what this article is describing - use
| public funds to buy buildings and rent them cheaply. It's
| insane, if you do the math, but it's a lot less insane than
| rent control or what you're suggesting.
|
| (apologies if Poe's Law).
| thfuran wrote:
| >gives you the right to make up rules on what I can do with
| my property?
|
| What gives you the right to make up rules about what
| everyone else can do with a particular place on their
| world?
| BrenBarn wrote:
| Well, what if we flip it around: What gives you the right
| to own a bunch of extra AirBnB properties in the first
| place? It's just a set of assumptions that we've been
| living under for a while and that we can change if the
| society overall wants to. Some feudal lord 500 years ago
| might have said "What gives you peasants the right to own
| any land at all, or question my judgment on any matter?"
| There's nothing magical about the particular conception of
| property rights we're currently immersed in.
| lostdog wrote:
| What gives you the right to remove squatters from locations
| you believe are your property?
|
| Laws are just rules that people happen to like. I know we
| consider the right to property to be fundamental, but the
| right to have somewhere to sleep is also pretty
| fundamental.
| elliotto wrote:
| 'Your' property exists as a line item on a ledger
| legitimized by violence of the state. In exchange for
| receiving electricity and water and transport and police
| support for securing it, you have to follow a few rules.
| IncreasePosts wrote:
| Emancipate your child and sell it to them!
| crooked-v wrote:
| > I don't think regulating rent prices and the housing market
| helps lower rents.
|
| We have proof from studies that rent control actively makes
| things worse for everyone, including the people currently on
| rent control, because owners convert buildings to condos or
| exit the market entirely, actually raising average rents for
| rent control tenants. https://www.brookings.edu/articles/what-
| does-economic-eviden...
| stackedinserter wrote:
| It's not "Barcelona" that is buying it, it's the rest of the city
| residents.
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