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How private equity is changing housing

(www.theatlantic.com)
115 points harambae | 3 comments | 09 Dec 25 17:26 UTC | HN request time: 0.001s | source
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djoldman ◴[09 Dec 25 18:37 UTC] No.46208704[source]▶
> The United States is short 4 million housing units, with a particular dearth of starter homes, moderately priced apartments in low-rises, and family-friendly dwellings

The number cited links to here:

https://upforgrowth.org/apply-the-vision/2023-housing-underp...

Which has this as the report:

https://upforgrowth.org/wp-content/uploads/2023/10/2023_Hous...

The number is driven by this definition:

> Missing Households. Households that may not have formed due to lack of availability and affordability, e.g. households with children over 18 years of age still living with their parents or individuals or couples living together as roommates at levels exceeding historical norms.

replies(1): >>46209557 #
gruez ◴[09 Dec 25 19:40 UTC] No.46209557[source]▶
Did you intend to add something after the definition? For better or worse, "moving out once you reach 18" is widespread enough of an expectation that it can be used as a yardstick for housing shortage.
replies(1): >>46210277 #
djoldman ◴[09 Dec 25 20:35 UTC] No.46210277[source]▶
I think it's interesting how "shortage" is defined across different products.

From an economics standpoint, "shortage" isn't a useful word, unless it's applied in the extremely unlikely scenario where there nothing is available at any price. Generally, this is because price dictates supply.

"Shortage" for the current housing market is generally used to mean, "relative to historic trends, many people want houses who can't afford the current prices."

replies(2): >>46210831 #>>46211842 #
1. AnthonyMouse ◴[09 Dec 25 21:21 UTC] No.46210831[source]▶
Shortage in the absence of price controls generally means that something is inhibiting supply from increasing as demand does, causing increased demand to have the primary result of increasing prices rather than increasing production.

Sometimes this is expected or unavoidable, e.g. if you have a sudden increase in the demand for electricity then the price will increase temporarily until new power generation or transmission capacity can be brought online, and in the meantime you have a shortage.

The problem comes when the shortage is a result of artificial scarcity as it is with housing/zoning, because then it's not temporary, it persists until the cause of the artificial scarcity is defeated.

replies(1): >>46212143 #
2. djoldman ◴[09 Dec 25 23:28 UTC] No.46212143[source]▶
Shortage is almost always used with a hidden assumption that the current price is "bad."

Truckers are currently retiring faster than they're being replaced. So some folks are saying there's going to be a "trucker shortage." In reality, there are plenty of people out there who could get a CDL license and drive a truck, but don't. Why? Because the compensation for being a trucker isn't high enough because the demand isn't high enough.

For housing, from the house seller's point of view, they could have the viewpoint that there are far too many houses for sale, the supply is too high, they want a higher price for their house. And from the buyer's point of view, there aren't enough houses because they want to pay a lower price.

I'm not saying either side is right/wrong or good/bad. It's just that "shortage" isn't a very useful word.

replies(1): >>46224584 #
3. AnthonyMouse ◴[10 Dec 25 22:09 UTC] No.46224584[source]▶
> For housing, from the house seller's point of view, they could have the viewpoint that there are far too many houses for sale, the supply is too high, they want a higher price for their house. And from the buyer's point of view, there aren't enough houses because they want to pay a lower price.

And who is right is then determined by the market, because "not enough" means "the price is higher than the cost of creating more" at which point the market creates more. Unless the government is suppressing the ordinary market through rules imposing artificial scarcity, which is the evil to be prevented.