Some new data and scenarios that need to fit your model of housing supply
Could you perhaps do a post comparing and contrasting the housing market to markets for other goods where fierce competition actually does push down prices?
- flatscreen TVs, which originally cost $20k and can now be found at Aldi for $200. Where advancements in screen technology permitted constant cost cutting, and no gov-granted monopoly barriers to entry exist
- the avocado market where we’re now hearing about a glut, also where competition can’t isn’t blocked by licensing or protectionism
Additionally, you’ve articulated when property owners naturally behave collusively to set the “speed limit” on new properties entering the market.
Could you perhaps explain when that behaviour could break down, like in severe economic downturn or banking system collapse like those seen in Japan, Ireland or Detroit?
Aggressively taxing land that is zoned residential, purchased, but sitting untouched for a length of time (say, a year) seems like an obvious starting point.
Allow a single block exception for individuals.
On a somewhat related note, I was recently directed to this article by The Algorithm and in it there's some commentary and graphs showing that quarterly housing completions have not changed appreciably for ****fifty years****.
Even units, apart from a ~5 year surge in the mid-2010s, remain at similar completions to the 1970s.
This is such a ridiculous situation I can't help but think there must be an error in the data somewhere ?
I am disappointed YIMBY-sympathetic researchers do not seem to respond or acknowledge the developer's constraining role. It feels like many upzoning proponents are mostly enjoy their time in the sun, rather than trying move the debate forward or inform policy. Even if the goal is densification directly, rather than living affordability, then hurrying developers should be a concern.
Simply abolish the ability of SME & the big boys like Lend Lease and Stcoklands to land bank. There is no disincentive currently to avoid this. However, a land tax high enough to significantly impose ongoing business expenses on holding that same land, rather than putting it to productive use, seems to me to be a decent alternative to discourage this.
There is zero economc & business sense in allowing approved land for development to simply sit idle for 40 years. None. Plus this would dissuade a lot of overseas purchases of Australian land who end up doing precisely the same thing.
Do note though the 2003 article quoted above: that headline was deliberate. Vested interest stir up controversy in the midst of a then land boom. Classic behaviour to witness during the 2nd half of a real eatate cycle, which is where we were in 2003.
A comment professing ignorance is not a good way to star, I know, but I do not understand the positive points you want to make. I'll suppose you are correct in refuting all the erroneous opinions you criticize, but exactly what do you want land use permitting bodies to do instead?
I'm coming at the from the US context, where in urban areas, it is not possible for regulatory reasons to build housing in many places where builders could satisfy market demand for it. In many cases this would result in an increase in density so favoring regulations that permit more housing looks like favoring "density" and indeed proponent often say that when pointing out that some of the demand that would be satisfied is for amenities that "density" provides proximity to places of shopping, recreation and employment. That is what gives the US debate an "anti-regulation" flavor.
Would love you to find 40 years of supply on the Gold Coast as stated in the LSDM!
Planners influence the construction of houses in ways other than by providing adequate areas that are zoned for housing. What if the zoning is for single rather than multiple residences per lot and the demand is for the latter?
Availability of lots zoned for development is one thing. How many are speculators who have no intention to build? Will the developer be happy to sell to speculators and see no houses actually built?
Are potential buyers in a financial position to put down a deposit.
How many will be able to finance the build?
What proportion of lot purchasers are intending to rent and making a judgement that although rents are healthy, a collapse in house values could be imminent?
Are people feeling insecure about their employment.
Is the recent increase in the cost of building and interest rates disenfranchising those who might like to build? Is the four bedroom two bathroom offer now beyond the capacity of the single income earner to finance? Is the zoning appropriate for three by one and two by one or would these styles not be allowed.
If we changed the offer to one where modular factory built houses were provided by the landowner on rural land that is rented along with the house rather than on land that is subdivided (to create freehold titles on land zoned for residential construction), would there be a rush to engage? If part of that land was set up to accommodate 'Tiny Homes', would there be demand?