this ignores the basic economics which is that it’s too expensive to build housing. Labor is expensive, materials are expensive, and permitting is expensive.
The thesis being offered - which you will likely disagree with - can be read as - the economic capacity certainly exists, but the regulatory regime prices it out of the market.
Given that a regulatory change about AirBNB is under consideration, perhaps they should also consider changing the regime that has created the housing shortage and is actively putting working families on the street.
Until they change this bad regulatory regime, and regulate to provide enough housing rather than regulate to keep existing conservative homeowners happy, then they will continue to put regular folks in Hawaii through a meat grinder of housing austerity.
My perspective is that you can only regulate things out of production. You can't regulate things into production. If that were true, politicians could have made us all rich by their wise words and actions. But they don't. Because they can't. That's not the source of wealth.
Where we do agree is that things can be regulated out of production. That's clearly what's happened in Hawaii, intentionally, to limit the number of people in Hawaii. That's the entire source of the permitting costs, high labor costs, etc. etc. etc.
The prices were intentionally set high for new housing by regulation. That can be changed.
Further, it's slightly more tricky to regulate things into production, but we do it all the time. Take for example, roads, or water treatment, or any other public service. That's entirely the product of regulation, not of the free market, and would not happen otherwise.
Further, we can regulate non-publicly owned entities into production, and we do so frequently. For example financial products like a 30-year mortgage are entirely a creation of regulation, and would not exist without hearty regulation backing them. We can do similar things for construction loans, for training in the trades, for social housing, for pretty much anything.
Housing is a very solvable problem. However we actively choose not to solve it, and in fact we actively choose to make it more expensive in order to benefit those who already have housing, and to benefit those who speculate on it.
So if I have these views of housing, why am I not opposed to AirBNB? Because AirBNB is actually meeting some real need from real people, it's not pure speculation, or pure rent-seeking, like the regulatory regime that institutes housing austerity. There's real human gain from AirBNB, it's not merely an economic gain.
And I'm not entirely in favor of AirBNB either, it's just that it really really grates me that this is being falsely sold as a solution to the housing crisis. It is not. It's barely related, but related in a way that shows the true underlying problem: supply versus demand for housing.
You say its overpopulated, I see a state of mainly suburban small towns at least outside resort developments when I visited the place. There’s no shortage of space to meet demand if one builds up like is done in Japan or Hong Kong.
If Hawaii were overpopulated, we would see people leaving for other areas because there are too many people. Instead we only see people leaving because it's too expensive.
Agreed that housing on vacant land isn't the answer. The answer is to build up, in more socially-orinted ways.
seriously, mankind has been able to do this for 10s of thousands of years and all the sudden now, we're so pathetic we can't build housing anymore. do people really believe this?
It's not that we can't build more housing, it's that all the economic output has become concentrated in a few very small areas. This means that if you want a high-paying job you have to live within those very small areas or find a niche in a rural area that pays well. The middle between those two extremes has been pretty well erased in our economy.
You can no longer live in Podunk Michigan and go down the street and get a good paying job pushing a broom at the local factory. That work is done by a contractor who pockets the wage and gives a quarter of it to their employees. Or the factory closed because it was cheaper to build and ship widgets from somewhere else. So everyone has to either suffer the economic depression, drive for an hour or two to go to work, or move. This housing crisis is the end result of our economic policies of the last 40 or 50 years and the hollowing out of middle America and the consolidation of a lot of industries into two or three huge competitors slugging it out.
If we can fix that system and give people outside of major metros a shot at making a decent living again then the housing crisis would disappear. There are plenty of cities across the entire US that are tearing down houses because nobody wants to live in them and otherwise they become animal nests. Meanwhile there's a housing crisis on the coasts.
One thing I'd like to see is a federal payroll tax credit for remote workers. That would do a lot to reverse the "return to office" mandates of the last couple of years. If you disperse a bunch of bright and talented people into the middle of the country, at least some of them will find ventures locally that bloom into something big.
We can build housing very well. It’s a matter of cost. Labor is not cheap. Have you tried to price out construction recently? You don’t need to take it from a random comment on HN. Price the market and see what it tells you. If you happen upon a magical reserve of cheap labor though, please share with the group, as we’d love nothing more than to pitch in and make our housing problems melt away for everyone.
if you're saying labor is expensive and that building a house is too costly then we're not very good at building housing. if it takes 2000 days of your labor (exchanged for $ then purchase a house of course) but it only took 1000 days a century ago, that means we're getting worse at building housing, not better.
Since this comment has been downvoted, I’ll add more math.
Building housing takes anywhere from 3 to 4 years for any significant development that can make a dent. When the average investor can get 7% with minimal risk in the S&P500, you’re looking at rewarding investors a lot more than that in returns over this time period. People would rather invest elsewhere.
Once you factor that in, you’re looking at a large % required return factoring risks like lawsuits, construction mishaps, etc.
There is a reason every new development looks like luxury housing or luxury apartments. The economics don’t favor Levittown style massive buildouts anymore.
The market will reward those who can bring efficiency to something that’s clearly an opportunity to be more efficient. That’s not where we are with housing right now.
You can’t even run the experiment due to how restrictive the land use is in hawaii. 4% of land is residential and of that a good deal of it is bog standard post war suburban development. Why not just at least upzone the existing residential neighborhoods and attempt to let the market decide for itself if demand is sufficient to justify investing in development instead of making it an impossibility?
