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this post was submitted on 04 Jan 2024
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No Stupid Questions
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This would make sense if what was being proposed was increasing everyone's wealth proportionally to how much wealth they already have, but I don't think anyone is really suggesting that. Think about it this way; say you have 300k and are bidding on a house against someone who has 50 million dollars. They have a strong advantage. Now say you both were gifted 10 million dollars before bidding on the house. Your adversary still has the advantage, but much less of one.
As an aside I think what you're saying elsewhere about adjusting laws for more housing is right, but that can't be the whole solution when the market value of labor is being eroded away. Even if there is a large supply of housing, a share of wealth is needed to buy it, that share has to be somewhat evenly distributed or there are unavoidable problems.
You're ignoring the hundred other people with 300k that will getting money and now bidding against me. It's Supply and Demand.
I am not, I intended the person with 300k in this example to represent the whole class of people with less. Your assumption seems to be that the relatively accumulating mass of wealth held by the few is just not in competition for houses, but that begs the question, why wouldn't it be? You can extract rent from housing to profit on it over time. It serves as a safe investment very likely to increase in value. You can convert it into other forms of real estate. You can have multiple homes for convenient travel. There is a lot of incentive there.
An important feature of supply and demand is that the weight of demand doesn't depend on a quantity of people, but a quantity of money chasing the same supply. If no one ever had a reason to want more than one house for themselves, maybe it would have more to do with the quantity of individuals, but I think that's just not the case, they do want more, and it scales.
I’m not following your point at all here. I’d you give just me extra money, I can probably buy a house. I’d you give everyone more money then I’m back to bidding against everyone else and the cost of housing just rises. We don’t have enough housing in many areas of the country.
My point is that if you are currently bidding against wealthy financial interests as well as individuals just looking for a place to live, then giving everyone money will raise the buying power of those individuals relative to those interests (because their wealth increases more as a percentage), thereby making all of them more able to afford housing. I don't know how to put it simpler than that.
Of course it's also true that there is not enough housing, again I acknowledge that as the other part of the problem to be addressed separately.
But it’s not going to increase supply, and somewhere around 70% of homes purchased last year were by individuals. Home prices will rise as individuals can bid higher than before.
The only solution is to build more housing.
What if you remove individuals who already have a home from that number?
Again, consider relative buying power. Even if you aren't more wealthy relative to the average person and that stays the same, being more wealthy relative to the wealthiest still gives you greater ability to buy a home. This can be true even if demand and prices rise, and would be true even if it was only 30% of buyers that you're becoming more competitive against.
That really should be part of it, but ultimately it is not enough. If wealth inequality gets high enough, if the market regards labor as worthless enough, it isn't going to matter how much housing there is, it will get repurposed as golf courses or something.
I believe it only goes down from 70 to 55. A better shot for sure, but you’d still be overpaying and having to buy without an inspection etc.
I don’t see being more wealthy relative to the wealthiest as that beneficial in this scenario. They still have the ability to outbid if they want to.
Building more housing, particularly apartment building or condos that people can own is the simplest solution to the problem. Solving income equality is a massive task with no perfect solutions. Building more houses is straight forward.
Are you familiar with price elasticity of demand? If they have to pay a larger share of their wealth, they will buy fewer. If houses cost $100, couldn't you think of reasons to buy more than one, where you wouldn't if houses were priced within what you could afford but much more expensive than that?
IMO the distinction between income and wealth inequality is very important here. Income inequality is about jobs, wealth is about accumulated capital.
Yes, but again, there isn’t enough supply for everything you are saying to be the problem. It’s Supply supply supply.
Saying "supply" three times in a row isn't an argument that other factors are not also relevant.
Supply is the singles biggest factor is all
Well I don't disagree with that really