> Markets would love to build more housing... But they're prevented from doing so by the regulatory state
Interesting claim. Do you want to detail this more? Most of my experience is not with the State itself being an obstacle, but as a tool in the hands of landlords and capitalists to help enforce scarcity.
Yeah, there's really very little difference between "the State(TM)" at a city council level and the local property owners as a class, and a class that is overrepresented in electoral participation.
> Interesting claim. Do you want to detail this more? Most of my experience is not with the State itself being an obstacle, but as a tool in the hands of landlords and capitalists to help enforce scarcity.
I'm not even sure I really understand your question. Rents in San Francisco are extremely high. What that means is that if you build a new apartment building there you can charge a lot of money for your apartments. Therefore, any halfway intelligent capitalist understands it's a great idea to build apartment buildings in San Francisco. The only reason they are not doing this is that the local zoning laws prevent them from doing so.
> Therefore, any halfway intelligent capitalist understands it's a great idea to build apartment buildings in San Francisco
You don't mean "capitalist" here. You mean, "proponent of Free Markets."
An equally profitable "capitalist" play would be to find out what companies currently benefit from the shortages and to buy those companies, thus securing their revenue.
Capitalism is agnostic to free markets and in some cases even destructive to them.
> You don't mean "capitalist" here. You mean, "proponent of Free Markets."
I just mean any halfway intelligent person who has money and wants more. Their ideology doesn't matter.
> An equally profitable "capitalist" play would be to find out what companies currently benefit from the shortages and to buy those companies, thus securing their revenue.
No, it wouldn't. That's not how anything works. For one, those companies would be very expensive, precisely because they are making so much money. And more importantly, you keep treating this like it's a one player game. It's not. When thinking about how markets work you have to solve for the equilibrium of competing actors. If you go out and buy those companies, then the next guy is going to come along and build new apartments and all of a sudden you won't be able to charge exorbitant prices anymore.
I’m in Munich with skyrocketing prices. And you are wrong about your halfway intelligent capitalist. You see, doing nothing will end in more money earned anyway while doing nothing. So halfway intelligent capitalist can build couple hotels elsewhere. If this halfway intelligent capitalist builds apartment building, it will generate more rent from the new building, but less in total. That is not good for him and he will not build. And zoning laws is an argument to cover ugly truth.
That's not how anything works. You would be right if one person owned the entire city. But that isn't the case. The equilibrium of independent competing actors is for them to build. Yes, if they all colluded together and agreed not to build, they might be able to extract more money (actually they wouldn't in the medium and long term, maybe in the short term). But you'd have to be a complete fool to think that sort of collusion is possible at the scale that would be required.
What you do have are developers pressuring regulators to restrict competition. That is a real thing, and it's called regulatory capture. But that is exactly what I said needs to be fixed.
Maybe in a perfect world with equally distributed wealth it might be the case. But normally all cities have well connected wealthier groups inside.
About Munich’s case: since property tax is calculated based on value of the plot, regulators are not interested in new buildings. They do nothing and collect more and more taxes! What a great situation.
> Maybe in a perfect world with equally distributed wealth it might be the case. But normally all cities have well connected wealthier groups inside.
So, you are positing that the wealthy elite of Munich have come together and agreed not to build high density housing so that they can all make more money, even though if any one of them defects and builds an apartment building they personally would make more money than everyone else?
Interesting claim. Do you want to detail this more? Most of my experience is not with the State itself being an obstacle, but as a tool in the hands of landlords and capitalists to help enforce scarcity.