I definitely do. It's something that turns a basic necessity into a speculative asset, with a price distorted by the money poured into it. Airbnb is also a deeply harmful influence on housing prices.
Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it.
It's easy to get retail investors to buy things at inflated, speculative prices, so the price of water would go up. People would say, "Why are so many people dying due to lack of access to water?" And we would blame these startups, laws would be passed, and we would fix it.
Unfortunately the necessity of housing is not as direct and clear, and we have a long history of denying housing to people who are unlucky, sick, or the children of such people.
In most of the UK (England and Wales), water was privitised in 1989
General consensus even amongst the right-wing media and the media that aims to appeal to conservative voters [1-4] seems to be is that we have drought and hosepipe bans while the private companies pay out £1b dividends and it's not right.
Showing my age, but back in 1976, where I lived, water was being brought in by tanker day and night during the hottest summer on record.
I'm not saying privatisation has been a glowing success but supply issues were much worse in the days of nationalisation, especially when you factor in the population growth over the past few decades.
There is the huge confounder that everywhere in the developed world - and even in the less developed world like East Germany, where I grew up, a lot of infrastructure was added and improved over the decades after WWII and it has nothing whatsoever to do with private vs. government (or, in the case of Germany mostly, for water and energy) municipal ownership. Many houses had coal stoves and privies a few decades ago, that is simply how it was, not a question of "we need to privatize water and heating".
Here in Germany especially water is usually operated and owned by local municipally owned enterprises, and I'd say it's a huge success. Even my home district in East Germany (GDR) build a huge water infrastructure project with a dam, many kilometers of large pipes, and one or more (don't know exactly how many) water processing plants, definitely nothing privately owned there. People including those in power just put a very high value on having enough and reliable supply of water in Germany, and it has nothing to do with private vs. government, given what we have now with mostly local and state governments providing. In recent years a lot more private companies entered the picture, but I'm not sure about ownership (municipalities also operate their own companies), in the end it's an attitude question more so than blaming it of "private better". You can have success or failure with either model.
There are still houses in the US being built right now that have zero water and all must be delivered by tanker.
No wells to be dug, no neighbors to beg from, and now that the Colorado River is dangerously low they are stopping the delivery trucks.
This means people will have to move eventually, and good luck selling your 1.5 million dollar home with no water access.
Lol, California has 'severe drought conserve water' as all the businesses keep watering their 100% unnecessary grass, Nestle bottles it up and sells it back to us, we have almonds being grown to make fucking almond milk, and we have strained power grids warning of high power consumption while every fucking business leaves their signage and parking lots lit up like fucking Christmas.
But it's we the people taking showers and running the AC that is the problem.
There have been precisely zero new reservoirs brought into service in England over the last 30 years while the population has as you say grown considerably. There has been relatively little infrastructure maintenance, leading to high-levels of leakage, and over-extraction from once healthy rivers. I'd agree that things weren't perfect in 1976 but privatization has failed to noticeably improve things either while totally failing to prepare for the changes required by a growing population and worsening climate.
Water leakage is not a problem. The water goes back into the aquifer, where it should be anyway. It's a minor waste of energy and treatment chemicals, since it's drinkable water, but the water itself is not lost.
Nestlé is at the forefront of taking over a water supply and selling it back to the locals to enrich the corporation at the expense of the humans who live there
Water commodification is exactly what Nestlé is doing
What we need is regulation to stop them from doing that, not a different company selling and capturing the water. That's just more of the same thing which solves nothing.
Nestle gets all the water they want for a $200 permit. That's not water commodification. They sell bottled water, but that's also not commodification of water. Almost 0% of US water consumption comes from a plastic bottle, and you can't commodify a market with ~0% market share.
Your statement is false, what Nestlé does is literally the definition of commodification
Commodification definition:
the act or fact of turning something into an item that can be bought and sold:
The commodification of water means that access is available only to those who can pay.
They sell bottles filled with water, not everyone has access to tap water and Nestlé captures so much of a water source that locals don't have access to the freely available water that they did before.
Are you not aware that fresh water from wells depletes sources? The water table is limited.
You seem to be intentionally twisting the scenario in a disingenuous manner. Nestlé is selling water that was once free to a populace.
If they didn't have access to freely available water, it cannot be true that Nestle is selling water that was once free to the populace. Your assertions are contradictory.
>they didn't have access to freely available water
Please quote my comment where I stated this.
I don't believe you have attempted to comprehend my statements, nor have you read the article I posted and are just making baseless assertions to be contradictory.
>I definitely do. It's something that turns a basic necessity into a speculative asset, with a price distorted by the money poured into it
The 30 year mortgage is one of the greatest inventions in the history of mankind. Being able to swing hundreds of thousands of dollars of margin on a near-zero-down investment that requires nothing more than proof of income and has a manageable monthly payment is the single most powerful financial tool available to the vast majority of people.
That kind of leverage is only possible with the commodification and securitization of real estate. It’s not a perfect system, but it has led to intergenerational family wealth accumulation among the common population more than anything else before.
I disagree somewhat. I think the 30 year mortgage has pushed prices up much higher than they would have been, because of the leverage, and people only look at the monthly repayment. The fact that it has led to intergenerational wealth (among the rich who can afford houses) is a direct side effect of the fact that houses are so expensive. It seems like saying it has generated wealth is begging the question.
Canada has shorter mortgage terms that require multiple mortgages to pay off a house at different times, transferring interest rate risk to the buyer. Canada also has higher house prices than the US. Mortgage term length may contribute to price growth to some extent, but I think the supply of and demand for housing swamp any effects of financing.
Being able to lock in a low interest rate for thirty years, the probable lifetime of the amortization period, is very advantageous. Combine this with a lack of a prepayment penalty and American mortgage holders get a great deal.
That's somewhat understandable given that the alternative is pretty much writing a monthly rent check. In that respect, it's a bit different to my mind than an auto loan. (Maybe if you compare it to a lease.)
If you didn't have 30 year fixed mortgages in the US, property values might indeed drop somewhat. But it would mostly advantage people who had access to other capital. People who can't afford houses in expensive areas now mostly still wouldn't be able to.
> Airbnb is also a deeply harmful influence on housing prices.
It's simply unimaginable what it's done in cities across Europe too. I lived in a few places like Barcelona, Dublin and Berlin, and it's pretty much destroyed any rental opportunities for young people and artists. I'm all for regulation, including taxing them to make longer term rentals more profitable for owners.
> It's something that turns a basic necessity into a speculative asset
I see some broad parallels in this line of rhetoric to "Zeus brings misfortune because people are impious vs good fortune when they are worthy". It presumes a difference and a drive that is not there. All assets are both speculative and non-speculative at all times. There are no assets that cannot be bought speculatively and a house is always going to be an asset because it represents a big investment of capital.
If people are speculating on real estate, all that says is that the policy of an area is going to make housing rare vs the number of people who need housing. If people thought housing was going to be abundant they would not speculate.
There are problems in the housing market, but they are not to be found by worrying about people acting speculatively. People are responding to the real problem, whatever it is.
> There are problems in the housing market, but they are not to be found by worrying about people acting speculatively. People are responding to the real problem, whatever it is
We should do both. Build more housing and crack down on speculators.
Shooting the messenger has a bad record for making things better. Speculators don't drive markets, they just signal how the situation will develop as early as it is possible for predictions to be made.
Cracking down on speculators won't help people get roofs over their heads. Nor will calling them unethical. Speculators are the signal for whether there is going to be a housing problem in a few years time.
We should want a system that allows speculators and encourages them if there is going to be a housing problem so there is plenty of warning. Targeting speculators in particular is the old once-a-metric-becomes-the-target-it-becomes-a-bad-metric problem in a new guise.
This works for most goods that people have to constantly buy new, but does not work in the housing market. The people that decide the zoning are the residents of the city. The residents of the city don't need to buy, so they don't care about the speculation price effect. In actuality, through price increases of the speculation, they are better off! So they vote for SFH zoning[0]. The warning is ignored.
If you introduce a land value tax equal to the value of the unimproved land, this will kill speculation, but also make it instantly impactful to the citizens that there is not enough supply. This will mean that the people able to change the zoning of the city will instantly see a reason to change the zoning, as better zoning means more supply means lower taxes.
In my opinion you're overlooking that a speculator could "engineer" a situation faster than say a local council is able to act / realize what is happening.
For example, a speculator moves into a nice small village, sees potential and brings in a lot of foreign capital in a short amount of time. Buying up houses and outbidding potential new citizens. The price of land is also driven up from this, even if it's only a short term thing.
The damage has been done there and it had little to do with the number of houses. It was just a hostile takeover of a community.
If the speculators are wrong the price goes down and people tend not to complain about them. People only start bringing up speculators when they are correct.
They were right. The speculators from 2010-2020 were right that cryptocurrencies are going to be a reality from now on. Like it or not, it is clear that there is a market here that is measured in billions of dollars and it is going to stay with us.
no, you should crack down on government making housing rare, which is who is at fault in pretty much all of North America. Zoning is mismatched to the task of housing the people who want to live in many areas and local governments need to drastically increase the higher density zoned areas and that is pretty much the extent of the problem and the solution.
> We should do both. Build more housing and crack down on speculators.
No, just building more housing will make housing less useful to speculative investment, and so speculators won't invest. Just reverse the messing with normal supply and demand. Don't apply ever more patches on top of patches to fix a situation that wouldn't exist without the messing in the first place.
Sadly, it is very hard for politicians to a) want to decentralise control, because it's much easier to declare a new controlling initiative than to say "actually, we're just getting in your way" and b) get to decentalise control, because it's much harder to argue strong economic principles than appeal to special interest groups who might vote for someone else.
> We should do both. Build more housing and crack down on speculators.
By this reasoning nobody could own multi-family properties because that would be considered speculation.
Because the only difference is this involves single family homes which are going to be rented out, an act that I’ve never heard called speculation. Of all the predatory tactics Silicon Valley gets up to (hello Uber) this isn’t one of them IMHO.
I’m not sure where people think the houses that get rented out come from but I can guarantee that it isn’t people who are running a charity to provide housing to needy families. They invest capital in real estate with the sole intention of seeking a return on said investment.
I have long supported the privatization and commiditization of water. It should be sold on the basis of supply and demand with markets, futures, and so forth.
Don't like almond farms, bottled water companies pumping millions of gallons for the price of a $200 permit, and golf courses watering their courses during a drought? Then you should too.
One thing you can absolutely guarantee when it comes to a necessity of life commodity, a black swan event will occur and people will die because they are priced out of the market.
Imagine, if you will, when the Texas grid went all wonky and those people who choose to buy power at open market rates had to prepay for their $13,000 kw/hr electricity because the power company had a limit on how much credit they will give you. Now imagine a drought where there is a disruption in the water supply because a pump burned out due to record setting high temperatures.
I’m no cheerleader for big government but if people insist on having one there are valid activities that they should engage in to protect the citizens from getting bitch slapped by the invisible hand of the market. This being one of them considering how capital intensive it is to provide a reliable water supply.
Apparently so those water hoarding companies have to pay the full rate, instead of some subsidized rate. I.e. stop privatizing profits with socializing the costs
So that water supply becomes a workable business model, increasing supply, and so that uneconomic water usage is discouraged. Such as almond farming in Southern California during the summer
In theory. What we see in practice (here in SF) is a glut of vacant luxury homes next to people living in RVs and tents. Belvedere Island (where Captain Kirk will one day live) is mostly empty. The fancy homes there are almost all investments, few people actually live there.
"our" neighborhood implies that you own it - so if you owned something, and sold it, how can you complain that someone (or gasp, a corporation) is buying when you're selling?
I can complain because corporations enjoy purchasing advantages not available to individuals. Massive amounts of capital, for one thing, not to mention tax breaks and economies of scale that make it easy for them to dispense with financing and inspection contingencies.
When an elderly person dies and the children who inherit his property all live out of state, they're going to dump the property and split the proceeds. And they're going to maximize those proceeds and minimize the time to realize them. Corporations can take advantage of that.
So no, WE did not decide to sell. Think it through.
> they're going to dump the property and split the proceeds.
so you do agree that it is the individual that made the decision to sell, and that it isn't because the corporation is forcing them to sell.
Therefore, the character changes or selling is really just a sum of the aggregate behaviour of all of those individuals. It's like blaming the flood, when each individual rain drop is the reason for the flood in the first place.
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You live here but you don’t own your neighbors homes and you have no right to tell them what they can do with them. Who cares what “reason” you bought your home
for, that is literally no one else’s problem but yours. You’re no different from the HOA tyrants who scream at their neighbors for painting their house the wrong color.
I have recently paid literally for that. In the mountain village where I was spending my holidays they charged me tax because of the air I was breathing. They called it 'climate tax' but the better translation is 'environmental tax'. And fun fact, unfortunately the air was not that clean neither because the place is very popular..
Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it.
It's easy to get retail investors to buy things at inflated, speculative prices, so the price of water would go up. People would say, "Why are so many people dying due to lack of access to water?" And we would blame these startups, laws would be passed, and we would fix it.
Unfortunately the necessity of housing is not as direct and clear, and we have a long history of denying housing to people who are unlucky, sick, or the children of such people.