How cheaper housing can boost productivity(economist.com)
economist.com
How cheaper housing can boost productivity
http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-12
9 comments
Housing is the #1 money sink in developed economy it consumes by far more money out of people's pockets than anything else. And the banks and the owners of capital are totally okay with this. And as the housing crisis showed, it's in no way a sure bet. It's a gamble just like anything else.
What makes houses in developed countries so expensive? I live in Kazakhstan. I can buy some land near city, it would cost me $5-10k for 100 sq. meters of land. I can build my own house for $40-80k (including materials and workers). It might not be the huge house, but it will be fine to live in.
Is land more expensive in developed countries? Are materials more expensive? Are workers more expensive? (probably all components are more expensive, but I still don't understand where those hundreds of thousands of dollars are coming from, those prices are just insane).
Is land more expensive in developed countries? Are materials more expensive? Are workers more expensive? (probably all components are more expensive, but I still don't understand where those hundreds of thousands of dollars are coming from, those prices are just insane).
In Kazakhstan you would have to save for that housing. In developed countries banks loan you the money for the housing. Which essentially means that housing price is determined by how much money people make. The more money people make, the more the people selling the house demand because the banks are willing to loan them that money, based on their ability to pay the amount on their mortgage. So in essence housing always costs a significant portion of whatever you make. That then affects the pricing of land. Labor is also very expensive, at least legal labor. In California you have a lot of illegal Mexicans that you can use for cheap construction, but elsewhere labor to build housing is also very expensive because they expect to be able to function in the economy so they charge a premium for their services, unlike in the third world where construction workers are treated like crap. So to answer your question everything is expensive here and the cost is determined by how much money people make rather than some other value.
This guy gets it. And the corollary? No matter how efficient we get land will soak up all surplus wealth creation.
Land value tax.
Land value tax.
I use to be against LVT until I thought about the scenario where you have someone who buys a house cheap (probably a poor neighborhood) and renovates it. Under our current system of property tax, which depends on the assessed value of the property plus improvements, that inevitably prices home owners and renters in the neighborhood over time. Hence one of the reasons why gentrification pushes out the original residents from the neighborhood. And who gains? Those who do the improvements and those who bought the property before the up tick in valuation (and property taxes).
But under LVT, the tax stays the same whether or not you improve the property. Obviously, there may be some means to game the tax, but ultimately land speculation and gentrification wouldn't work out so well. Rents would still rise due to property improvements, but people would be able to justify those rents based solely on said improvements and not on some market bubble due to speculation. Plus, any improvements done by anyone (speculator or not) are not taxed any worse than those who can't afford or see no use for improvements. Ultimately, it's a more balanced approach to a real problem to be sure. Or at least it's one part of the solution.
But under LVT, the tax stays the same whether or not you improve the property. Obviously, there may be some means to game the tax, but ultimately land speculation and gentrification wouldn't work out so well. Rents would still rise due to property improvements, but people would be able to justify those rents based solely on said improvements and not on some market bubble due to speculation. Plus, any improvements done by anyone (speculator or not) are not taxed any worse than those who can't afford or see no use for improvements. Ultimately, it's a more balanced approach to a real problem to be sure. Or at least it's one part of the solution.
It's a method that attributes reward to where the effort is put in, therefore you can be sure the rich hate it.
Supply and demand. Kazakhstan has a population density one hundredth that of the UK.
It's not demand. Prices have detached from wages. It's the application of near-unlimited credit.
Land with planning permission, in desireable areas, is very expensive. Random example from near me: http://www.plotfinder.net/plot/land-sale-city-edinburgh-situ... - that's just over $100k.
More stringent building regulations probably add to the cost, but the planning system is the big factor. "Desireable area" makes a difference in some cases: a while ago Stoke-on-Trent were selling derelict houses at £1 to anyone who promised to renovate and live in them.
More stringent building regulations probably add to the cost, but the planning system is the big factor. "Desireable area" makes a difference in some cases: a while ago Stoke-on-Trent were selling derelict houses at £1 to anyone who promised to renovate and live in them.
Planning permission is how the establishment introduce artificial scarcity.
Who will build the infrastructure (roads, electricity, water, sewage)? If you build sth without planning you can block or make it harder to provide these services to others. It only makes sense to plan such thing beforehand.
Sure. But in the UK the govt is planning to artificially restrict building land to boost asset prices in place of actual growth.
Planning restrictions are very popular with the local public. So much so that some places in the US invent their own weird private contract law versions (HOAs).
Planning restrictions are very popular with old people who are "alright thanks".
All those are more expensive, but its mostly land prices. We are talking about cities too, you can hardly buy a plot of land in London, as it is largely built on. Prime central London property costs £20k/square meter and rents are £50/square meter per month, so if you move your 100 square meters of land to London you can do well out of it!
> What makes houses in developed countries so expensive?
Demand and lack of (enough) supply. Buying a piece of land that you can build on in a city like SF costs a lot more than $5-10k for 100 m^2.
According to http://www.trulia.com/real_estate/San_Francisco-California/m...
Average price per square _foot_ for San Francisco CA was $962
Demand and lack of (enough) supply. Buying a piece of land that you can build on in a city like SF costs a lot more than $5-10k for 100 m^2.
According to http://www.trulia.com/real_estate/San_Francisco-California/m...
Average price per square _foot_ for San Francisco CA was $962
The big thing you pay for is to have good neighbours. You want to live close to highly productive in your field. You want to live far away from the criminals. You want to live close to fun people to hang out with.
If Alice and Bob want to hang out then they have to pay a big proportion of their wage to Charlie the Capitalist for the privilege. The land owners sell us to each other.
If Alice and Bob want to hang out then they have to pay a big proportion of their wage to Charlie the Capitalist for the privilege. The land owners sell us to each other.
I disagree that housing is a gamble. It's a long term investment and historically it has gone up. The housing crisis was a correction.
Time for this again, from The Bank of England's blog:
http://bankunderground.co.uk/2015/06/30/banks-are-not-interm...
> the key function of banks is the provision of financing, meaning the creation of new monetary purchasing power through loans, for a single agent that is both borrower and depositor. Specifically, whenever a bank makes a new loan to a non-bank customer X, it creates a new loan entry in the name of customer X on the asset side of its balance sheet, and it simultaneously creates a new and equal-sized deposit entry, also in the name of customer X, on the liability side of its balance sheet. The bank therefore creates its own funding, deposits, through lending. It does so through a pure bookkeeping transaction that involves no real resources, and that acquires its economic significance through the fact that bank deposits are any modern economy’s generally accepted medium of exchange.
Banks create money and lend it against land. This is how western "economies" create money which we then label "growth".
The more productive we become the more the landlord takes.
http://www.henrygeorge.org/pchp0.htm
http://www.henrygeorge.org/pcontents.htm
http://bankunderground.co.uk/2015/06/30/banks-are-not-interm...
> the key function of banks is the provision of financing, meaning the creation of new monetary purchasing power through loans, for a single agent that is both borrower and depositor. Specifically, whenever a bank makes a new loan to a non-bank customer X, it creates a new loan entry in the name of customer X on the asset side of its balance sheet, and it simultaneously creates a new and equal-sized deposit entry, also in the name of customer X, on the liability side of its balance sheet. The bank therefore creates its own funding, deposits, through lending. It does so through a pure bookkeeping transaction that involves no real resources, and that acquires its economic significance through the fact that bank deposits are any modern economy’s generally accepted medium of exchange.
Banks create money and lend it against land. This is how western "economies" create money which we then label "growth".
The more productive we become the more the landlord takes.
http://www.henrygeorge.org/pchp0.htm
http://www.henrygeorge.org/pcontents.htm
> One paper published in 2010 found that absenteeism among German workers would be 15-20% lower if they did not commute. If it were somehow possible to scrap commuting altogether, the British economy would see a productivity boost worth £12 billion a year, according to the Centre for Economics and Business Research, a think-tank.
Allowing occasional working from home has the same effects, and require no investment in infrastructure.
> But it is not just housing markets that hold back productivity. According to one study, employment in the Bay Area around San Francisco would be about five times larger than it is but for tight regulation on construction of all types.
I'm not familiar with Bay Area, but in Poland people constantly complain about overregulation of construction, and we have much less restrictive construction law than in western Europe (and it shows - public space in Poland is awful compared to Czech Republic or Germany).
You can have too loose construction law, and the result is a city centre were nobody lives - people just commute to work and back. This results in suburbia, and longer commute times - the direct opposite of the effect they wanted to achieve with the first point in that article.
Allowing occasional working from home has the same effects, and require no investment in infrastructure.
> But it is not just housing markets that hold back productivity. According to one study, employment in the Bay Area around San Francisco would be about five times larger than it is but for tight regulation on construction of all types.
I'm not familiar with Bay Area, but in Poland people constantly complain about overregulation of construction, and we have much less restrictive construction law than in western Europe (and it shows - public space in Poland is awful compared to Czech Republic or Germany).
You can have too loose construction law, and the result is a city centre were nobody lives - people just commute to work and back. This results in suburbia, and longer commute times - the direct opposite of the effect they wanted to achieve with the first point in that article.
> You can have too loose construction law, and the result is a city centre were nobody lives - people just commute to work and back.
It's not that Poland (or any other country) needs more laws. It's a problem of incentives, or lack thereof.
If a construction company has bribed politicians to keep giving them lucrative gigs on other people's money, they will have no incentive to actually do a good job.
If, on the other hand, there were free competition among construction companies, they would all strive to do their best so that they would be awarded more gigs in the future.
It's as simple as "corruption", but that's a misnomer because that's just the system working as intended. What's the point of being a city official if you're not in a position to get bribes one way or another?
With great power comes great.. opportunities for collecting bribes!
It's not that Poland (or any other country) needs more laws. It's a problem of incentives, or lack thereof.
If a construction company has bribed politicians to keep giving them lucrative gigs on other people's money, they will have no incentive to actually do a good job.
If, on the other hand, there were free competition among construction companies, they would all strive to do their best so that they would be awarded more gigs in the future.
It's as simple as "corruption", but that's a misnomer because that's just the system working as intended. What's the point of being a city official if you're not in a position to get bribes one way or another?
With great power comes great.. opportunities for collecting bribes!
I don't think the corruption is the main problem here. Nobody pays bribes to paint their commie block in fuchsia-green stripes (it's a thing here, I guess because of 50 years of shades of gray everywhere). Or to put 20-meter tall billboard on their small plot in front of XIII-th century castle. Or to build "Mountainer style one-family-house" between 16th century tenament houses. With huge brick wall all over it, and billboards on every square meter of the wall. It's chaos.
It's just that after communism people consider all regulation "communist-like restriction of God-given freedom".
It changes slowly for last few years, but '90s and '00s were awful.
It's just that after communism people consider all regulation "communist-like restriction of God-given freedom".
It changes slowly for last few years, but '90s and '00s were awful.
You seem to be describing the results of shitty construction companies getting gigs even though they produce shitty, "chaotic" results. But you somehow don't think it's because of "corruption" anyway?
Do you think you need a law that says "construction companies must build sturdy, reliable, good-looking buildings in good taste, or else!" .. ?
Do you think everything would be fine then?
Do you think you need a law that says "construction companies must build sturdy, reliable, good-looking buildings in good taste, or else!" .. ?
Do you think everything would be fine then?
> You seem to be describing the results of shitty construction companies getting gigs even though they produce shitty, "chaotic" results.
My examples were of people building or "upgrading" their houses by themselves and covering them in billboards. No developer or corruption needed. They have the right to do that - it pays (or it satisfies their needs) so they do that. Externalities be damned.
Sure, there is some corruption, but that's irrelvant, if there was law forbidding building malls with huge parking lots in a historic center there would be no malls and parking lots there, no matter the amount of corruption. Law isn't outright broken, just the corner cases are abused, and law covers very little of what it should.
> Do you think you need a law that says "construction companies must build sturdy, reliable, good-looking buildings in good taste, or else!" .. ?
There is no problem with "sturdiness". It's in the law, and people obey. The winter/summer cycle here ensures people don't skimp on good quality.
I think there should be law specifying which kind of buildings should be build in which region. Incliding details like "which kind of roof", "how high", etc. There's nothing wrong with one-family housing, but the kind of fence you can use should be specified. Otherways people build 3-meters-high solid walls to have village in the midle of city.
There should be ban on huge billboards in the city center. It's not some evil corporations donig it, it's small few-person or family companies. They are engaged in spiraling war for attention, covering cities with bigger and bigger ads. It's out of control, like banners on early '00s internet. And there's no adblock for brain.
My examples were of people building or "upgrading" their houses by themselves and covering them in billboards. No developer or corruption needed. They have the right to do that - it pays (or it satisfies their needs) so they do that. Externalities be damned.
Sure, there is some corruption, but that's irrelvant, if there was law forbidding building malls with huge parking lots in a historic center there would be no malls and parking lots there, no matter the amount of corruption. Law isn't outright broken, just the corner cases are abused, and law covers very little of what it should.
> Do you think you need a law that says "construction companies must build sturdy, reliable, good-looking buildings in good taste, or else!" .. ?
There is no problem with "sturdiness". It's in the law, and people obey. The winter/summer cycle here ensures people don't skimp on good quality.
I think there should be law specifying which kind of buildings should be build in which region. Incliding details like "which kind of roof", "how high", etc. There's nothing wrong with one-family housing, but the kind of fence you can use should be specified. Otherways people build 3-meters-high solid walls to have village in the midle of city.
There should be ban on huge billboards in the city center. It's not some evil corporations donig it, it's small few-person or family companies. They are engaged in spiraling war for attention, covering cities with bigger and bigger ads. It's out of control, like banners on early '00s internet. And there's no adblock for brain.
> Sure, there is some corruption, but that's irrelevant [..] Law isn't outright broken, just the corner cases are abused, and law covers very little of what it should.
How could it possibly be irrelevant? We're talking about countless millions of dollars (over time) of other people's money being used here. Why would anyone work hard to get himself into a position to decide who gets it, if there was nothing in it for him?
You want more regulation, but what exactly do you want the laws to say? If there's no problem with quality, what is the problem?
If the problem is just that you personally don't like X, Y and Z, then there is no real problem.
How could it possibly be irrelevant? We're talking about countless millions of dollars (over time) of other people's money being used here. Why would anyone work hard to get himself into a position to decide who gets it, if there was nothing in it for him?
You want more regulation, but what exactly do you want the laws to say? If there's no problem with quality, what is the problem?
If the problem is just that you personally don't like X, Y and Z, then there is no real problem.
> Why would anyone work hard to get himself into a position to decide who gets it, if there was nothing in it for him?
Well if you like to believe EVERYBODY in local administration is corrupted - your choice. I don't think so. Just like I don't think every programmer that writes software for banks - plants logic bombs and backdoors.
> If there's no problem with quality, what is the problem?
There is a problem with esthethic. I think I was clear about that. There is a problem with prioritising cars over everything else. Parking lots and 3-lane roads dividing city into small non-walkable parts. People escaping to suburbs. Growing traffic jams and growing commute times caused by that.
Quality isn't a problem, because there are strict laws about it. And it's quite easy to control. And people don't like to live in houses that can fall apart, or that are badly insulated, when it can be -20 C in winter and +35 C in summer.
On the other hand they have no issues with living in ugly city, designed as a drive-through. Or if they do - they react by escaping to suburbs, not by improving the city.
I don't know what the laws should be exactly, but I know it can be done, because Czechs and Germans did it much better than we.
Well if you like to believe EVERYBODY in local administration is corrupted - your choice. I don't think so. Just like I don't think every programmer that writes software for banks - plants logic bombs and backdoors.
> If there's no problem with quality, what is the problem?
There is a problem with esthethic. I think I was clear about that. There is a problem with prioritising cars over everything else. Parking lots and 3-lane roads dividing city into small non-walkable parts. People escaping to suburbs. Growing traffic jams and growing commute times caused by that.
Quality isn't a problem, because there are strict laws about it. And it's quite easy to control. And people don't like to live in houses that can fall apart, or that are badly insulated, when it can be -20 C in winter and +35 C in summer.
On the other hand they have no issues with living in ugly city, designed as a drive-through. Or if they do - they react by escaping to suburbs, not by improving the city.
I don't know what the laws should be exactly, but I know it can be done, because Czechs and Germans did it much better than we.
> Well if you like to believe EVERYBODY in local administration is corrupted - your choice.
Even if you don't believe they're all psychopaths, even normal people act according to incentives, and no one does anything without some sort of (perceived) benefit to themselves.
So when an official is deciding how to use other people's money, he will be trying to gain personally from his position, and that's where bribes come in.
But yes, in reality, they're pretty much all psychopaths, and they get themselves into positions of power because 1) that's what they crave (as psychos), and 2) they get to use their political power for their personal gain.
Look at what they do, look at the way politicians and officials have behaved everywhere since forever, and.. you'll have to accept that I'm right.
> There is a problem with esthethic. I think I was clear about that.
But you can't legally mandate good taste because most people just don't have it, and the same problems apply everywhere. So what's the real problem and how do you think laws would solve it?
> And people don't like to live in houses that can fall apart, or that are badly insulated
Do people want to look at buildings that are clearly just plain ugly? Do they want chaos and mayhem?
Of course not. So if you think quality is fine because people want quality, why wouldn't the other stuff be fine too if it's guided by what people want?
Even if you don't believe they're all psychopaths, even normal people act according to incentives, and no one does anything without some sort of (perceived) benefit to themselves.
So when an official is deciding how to use other people's money, he will be trying to gain personally from his position, and that's where bribes come in.
But yes, in reality, they're pretty much all psychopaths, and they get themselves into positions of power because 1) that's what they crave (as psychos), and 2) they get to use their political power for their personal gain.
Look at what they do, look at the way politicians and officials have behaved everywhere since forever, and.. you'll have to accept that I'm right.
> There is a problem with esthethic. I think I was clear about that.
But you can't legally mandate good taste because most people just don't have it, and the same problems apply everywhere. So what's the real problem and how do you think laws would solve it?
> And people don't like to live in houses that can fall apart, or that are badly insulated
Do people want to look at buildings that are clearly just plain ugly? Do they want chaos and mayhem?
Of course not. So if you think quality is fine because people want quality, why wouldn't the other stuff be fine too if it's guided by what people want?
> Even if you don't believe they're all psychopaths, even normal people act according to incentives, and no one does anything without some sort of (perceived) benefit to themselves.
I really don't think people in local government are any worse or better than people working in X, for any X. If you think otherways - your choice, but would be nice if you show some proofs.
As a programmer you are making decisions how to use others people money (your code will, and you decide what it does). As an architect you decide how to use others people money. Same for lawyer, banker, insurance agent, business analyst, contractor, ... This is true for most white-collar jobs.
I don't see how you can think local administration clerks are worse and we are better. It's intelectually lazy.
In the worst case - local administration comes from people, and are choosen by people. They are on average only as corrupted, as average citizen.
> Do people want to look at buildings that are clearly just plain ugly? Do they want chaos and mayhem?
Yes. Apparently they don't care. As long as they get paid for that billboard, and it's legal - they are blind. Look at this:
http://grafik.rp.pl/g4a/905243,471826,9.jpg
http://static.wirtualnemedia.pl/media/images/2013/images/szy...
http://www.poranny.pl/apps/pbcsi.dll/bilde?Site=KP&Date=2007...
http://ekoszalin.pl/sds/2013/06/11/51b71d299cc20.jpg
http://bi.gazeta.pl/im/b2/da/d4/z13949618Q,Reklamowy-chaos-w...
Tell me with a straight face it's not out of control.
This is how my country loooks like now. It can be solved, because I've seen it solved in countries like Germany, Czech Republic (and to lesser degree even Lithuania or Slovakia). It's simple - you restrict billboards and advertisments in the city. No need for definition of "bad taste" in law.
Then there's simple bad planning (or no planning). This is most true in new suburban districts. Typical image: http://m.ocdn.eu/_m/45a8af04428ecb9e04a332883176027c,29,1.jp...
Randomly choosen plots, random road network build after the fact so that everybody has some way to drive to their house, no matter in how contrived way. Costs for building infrastructure much higher than if someone spend a month thinking beforehand. Again - chaos. And it can be easily solved with proper urban planning. It's not rocket science.
As for bad taste - this is harder problem, but it can also be solved. Just to show what we are speaking about:
http://www.malak.com.pl/termomodernizacja/elewacje-rozane3.j...
http://www.malak.com.pl/termomodernizacja/elewacje-teczowe2....
http://img18.imageshack.us/img18/8974/1118221.jpg
http://naszglospoznanski.pl/wp-content/uploads/przedszkole_f...
This is understandable reaction to 50 years of gray communism, but still. At least the next generation will fix this with some paint.
I really don't think people in local government are any worse or better than people working in X, for any X. If you think otherways - your choice, but would be nice if you show some proofs.
As a programmer you are making decisions how to use others people money (your code will, and you decide what it does). As an architect you decide how to use others people money. Same for lawyer, banker, insurance agent, business analyst, contractor, ... This is true for most white-collar jobs.
I don't see how you can think local administration clerks are worse and we are better. It's intelectually lazy.
In the worst case - local administration comes from people, and are choosen by people. They are on average only as corrupted, as average citizen.
> Do people want to look at buildings that are clearly just plain ugly? Do they want chaos and mayhem?
Yes. Apparently they don't care. As long as they get paid for that billboard, and it's legal - they are blind. Look at this:
http://grafik.rp.pl/g4a/905243,471826,9.jpg
http://static.wirtualnemedia.pl/media/images/2013/images/szy...
http://www.poranny.pl/apps/pbcsi.dll/bilde?Site=KP&Date=2007...
http://ekoszalin.pl/sds/2013/06/11/51b71d299cc20.jpg
http://bi.gazeta.pl/im/b2/da/d4/z13949618Q,Reklamowy-chaos-w...
Tell me with a straight face it's not out of control.
This is how my country loooks like now. It can be solved, because I've seen it solved in countries like Germany, Czech Republic (and to lesser degree even Lithuania or Slovakia). It's simple - you restrict billboards and advertisments in the city. No need for definition of "bad taste" in law.
Then there's simple bad planning (or no planning). This is most true in new suburban districts. Typical image: http://m.ocdn.eu/_m/45a8af04428ecb9e04a332883176027c,29,1.jp...
Randomly choosen plots, random road network build after the fact so that everybody has some way to drive to their house, no matter in how contrived way. Costs for building infrastructure much higher than if someone spend a month thinking beforehand. Again - chaos. And it can be easily solved with proper urban planning. It's not rocket science.
As for bad taste - this is harder problem, but it can also be solved. Just to show what we are speaking about:
http://www.malak.com.pl/termomodernizacja/elewacje-rozane3.j...
http://www.malak.com.pl/termomodernizacja/elewacje-teczowe2....
http://img18.imageshack.us/img18/8974/1118221.jpg
http://naszglospoznanski.pl/wp-content/uploads/przedszkole_f...
This is understandable reaction to 50 years of gray communism, but still. At least the next generation will fix this with some paint.
>> Even if you don't believe they're all psychopaths, even normal people act according to incentives, and no one does anything without some sort of (perceived) benefit to themselves.
> I really don't think people in local government are any worse or better than people working in X, for any X. If you think otherways - your choice, but would be nice if you show some proofs.
You're not really addressing what I said there.
Why does someone work hard to get into a position of political power, if not to use it to his benefit? Not using it would be like working hard to be able to buy a BMW and then just letting it sit in the garage forever.
> As a programmer you are making decisions how to use others people money (your code will, and you decide what it does).
That's far-fetched, considering the programmer is being paid with private money, to do whatever the company wants him to do.
In other words, it's not even really the programmer deciding what happens with other people's money (to the extent it's even his program deciding anything, and not its user), and you can't be honestly suggesting you don't see a difference between that and a city official using other people's money.
As for the rest, again, you can't legally mandate people to have good taste. Apparently they just don't.
You also ignored my last point. If the building quality is fine because people want good quality, why wouldn't the other stuff be fine too, considering it's guided by what people want (instead of legislation)?
If Polish people want ugly buildings, then that just shows they have bad taste. You can't just command them to have good taste, and whatever Polish central committee would be in charge of new buildings would probably have bad taste too :P
They'll get better. In the meantime, move out if it bothers you enough.
> I really don't think people in local government are any worse or better than people working in X, for any X. If you think otherways - your choice, but would be nice if you show some proofs.
You're not really addressing what I said there.
Why does someone work hard to get into a position of political power, if not to use it to his benefit? Not using it would be like working hard to be able to buy a BMW and then just letting it sit in the garage forever.
> As a programmer you are making decisions how to use others people money (your code will, and you decide what it does).
That's far-fetched, considering the programmer is being paid with private money, to do whatever the company wants him to do.
In other words, it's not even really the programmer deciding what happens with other people's money (to the extent it's even his program deciding anything, and not its user), and you can't be honestly suggesting you don't see a difference between that and a city official using other people's money.
As for the rest, again, you can't legally mandate people to have good taste. Apparently they just don't.
You also ignored my last point. If the building quality is fine because people want good quality, why wouldn't the other stuff be fine too, considering it's guided by what people want (instead of legislation)?
If Polish people want ugly buildings, then that just shows they have bad taste. You can't just command them to have good taste, and whatever Polish central committee would be in charge of new buildings would probably have bad taste too :P
They'll get better. In the meantime, move out if it bothers you enough.
> You're not really addressing what I said there.
I am - you basicaly said that public sector is more corrupt than average, and you try to prove it by saying:
a) people working in public sector are selected for corruption
b) even if not - all people are suspectible to corruption.
My argument against a) is - you haven't shown any data suggesting that public sector is more corrupt, and you haven't shown any mechanism which should select for corruption in public sector, that isn't also present in private sector.
My argument against b) is - if all people are suspectible to corruption - then why assume they are corrupt by default, when you don't assume the same for people working in private sector?
> Why does someone work hard to get into a position of political power, if not to use it to his benefit? Not using it would be like working hard to be able to buy a BMW and then just letting it sit in the garage forever.
Because he wants the job? You know - to get paid? Or even to do sth he really wants to do? Same reason as people working to be a programmer, architect, lawyer, banker, etc have. All of these positions can be abused, but we don't usually think majority of these people only started doing it to get into position they can abuse.
> That's far-fetched, considering the programmer is being paid with private money, to do whatever the company wants him to do
And public officials are paid with public money to do what people want them to do. They may do that, or try to cheat. Same as the programmer. If you work for a big financial company you have bigger opportunities to steal than most local public officials. And bigger amounts. And it's not nessesarily money of people that hired you - you can just as well steal from clients.
Yes there is source control and they will catch you eventually.
And the same is true for public officials - they have to sign under their decisions.
May I remind you of the reasons for 2008 crisis? It wasn't corruption in public sector. BTW Poland had no banking crisis, because we had strict (and conservative) bank controlling institution (Komisja Nadzoru Finansowego) that didn't allowed banks to play with derivatives too much.
I fail to see the difference, especially in practice. I've had no first-hand experience of corruption in public sector. I've had experience with small-scale corruption in private sector (ticket controller in bus offering to let it go for a small bribe).
IMHO it's just that people think "they are bad and we are not".
> You also ignored my last point. If the building quality is fine because people want good quality, why wouldn't the other stuff be fine too, considering it's guided by what people want (instead of legislation)?
I've said it's a combination of many factors - quick predictable feedback loop (harsh weather every year) forces people to look for good quality or predictably and quickly suffer the consequences. Strict legislation forces developers to provide good quality in matters that aren't frequently and predictably tested by forces of nature (fire protection, not falling into pieces).
Esthethics is just higher up the Maslov hierarchy than "being warm and dry", and there's almost no legislation.
Also, the billboards situation is straightforward example of tragedy of commons. If you can't see the actual city behind advets anyway - you may as well put another on your plot and get the money, too.
And you failed to address my point about construction and advertising law in Germany being much stricter than in Poland. It's obviously possible without encoding "good taste" in law.
> They'll get better. In the meantime, move out if it bothers you enough.
That's disingenious. If people moved out instead of trying to improve what they don't like - nothing would get changed, ever. I might have got carried away to start this discussion on international forum. The suggestion of The Economist that making construction law less strict is the way to go triggered me ;)
I am - you basicaly said that public sector is more corrupt than average, and you try to prove it by saying:
a) people working in public sector are selected for corruption
b) even if not - all people are suspectible to corruption.
My argument against a) is - you haven't shown any data suggesting that public sector is more corrupt, and you haven't shown any mechanism which should select for corruption in public sector, that isn't also present in private sector.
My argument against b) is - if all people are suspectible to corruption - then why assume they are corrupt by default, when you don't assume the same for people working in private sector?
> Why does someone work hard to get into a position of political power, if not to use it to his benefit? Not using it would be like working hard to be able to buy a BMW and then just letting it sit in the garage forever.
Because he wants the job? You know - to get paid? Or even to do sth he really wants to do? Same reason as people working to be a programmer, architect, lawyer, banker, etc have. All of these positions can be abused, but we don't usually think majority of these people only started doing it to get into position they can abuse.
> That's far-fetched, considering the programmer is being paid with private money, to do whatever the company wants him to do
And public officials are paid with public money to do what people want them to do. They may do that, or try to cheat. Same as the programmer. If you work for a big financial company you have bigger opportunities to steal than most local public officials. And bigger amounts. And it's not nessesarily money of people that hired you - you can just as well steal from clients.
Yes there is source control and they will catch you eventually.
And the same is true for public officials - they have to sign under their decisions.
May I remind you of the reasons for 2008 crisis? It wasn't corruption in public sector. BTW Poland had no banking crisis, because we had strict (and conservative) bank controlling institution (Komisja Nadzoru Finansowego) that didn't allowed banks to play with derivatives too much.
I fail to see the difference, especially in practice. I've had no first-hand experience of corruption in public sector. I've had experience with small-scale corruption in private sector (ticket controller in bus offering to let it go for a small bribe).
IMHO it's just that people think "they are bad and we are not".
> You also ignored my last point. If the building quality is fine because people want good quality, why wouldn't the other stuff be fine too, considering it's guided by what people want (instead of legislation)?
I've said it's a combination of many factors - quick predictable feedback loop (harsh weather every year) forces people to look for good quality or predictably and quickly suffer the consequences. Strict legislation forces developers to provide good quality in matters that aren't frequently and predictably tested by forces of nature (fire protection, not falling into pieces).
Esthethics is just higher up the Maslov hierarchy than "being warm and dry", and there's almost no legislation.
Also, the billboards situation is straightforward example of tragedy of commons. If you can't see the actual city behind advets anyway - you may as well put another on your plot and get the money, too.
And you failed to address my point about construction and advertising law in Germany being much stricter than in Poland. It's obviously possible without encoding "good taste" in law.
> They'll get better. In the meantime, move out if it bothers you enough.
That's disingenious. If people moved out instead of trying to improve what they don't like - nothing would get changed, ever. I might have got carried away to start this discussion on international forum. The suggestion of The Economist that making construction law less strict is the way to go triggered me ;)
> I am - you basicaly said that public sector is more corrupt than average, and you try to prove it by saying: a) people working in public sector are selected for corruption b) even if not - all people are suspectible to corruption.
What I'm saying is that people act according to incentives, and their actions are purposeful. We have ends and means towards them. No one does anything without some perceived gain for himself, no matter what that might be.
What I'm also saying is that officials and politicians are psychopaths, because that's exactly the kind of "people" who are most attracted to those jobs, and the most adept at getting them too.
That's a claim, and some reasoning (based on premises) to back it up. You won't find studies that have determined all politicians to be psychopaths though, but that doesn't matter wrt. whether the reasoning is sound enough to accept the conclusion as "likely enough to be true".
> My argument against a) is - you haven't shown any data suggesting that public sector is more corrupt
You know, it would be the public sector itself publishing (and publicizing) that data. Do you think they might be biased?
> and you haven't shown any mechanism which should select for corruption in public sector, that isn't also present in private sector.
So what? Psychopaths are certainly everywhere, but the problem I'm talking about is that they rule over us.
> My argument against b) is - if all people are suspectible to corruption - then why assume they are corrupt by default, when you don't assume the same for people working in private sector?
Because psychopaths are not quite human. Do some research, but.. don't put too much emphasis on academic sources, because most of those have been produced by psychos themselves, and they're a bit biased.
Here's a breadcrumb to follow: https://www.youtube.com/watch?v=LsiTyPHMPh8
Of course, you might be one too, and just playing games with me.
> And public officials are paid with public money to do what people want them to do. They may do that, or try to cheat. Same as the programmer.
Public officials aren't exactly held accountable for their actions though, whereas programmers (with no political connections) are.
Pfft.. OK, I should be working instead of wasting time here, so I'll stop.
What I'm saying is that people act according to incentives, and their actions are purposeful. We have ends and means towards them. No one does anything without some perceived gain for himself, no matter what that might be.
What I'm also saying is that officials and politicians are psychopaths, because that's exactly the kind of "people" who are most attracted to those jobs, and the most adept at getting them too.
That's a claim, and some reasoning (based on premises) to back it up. You won't find studies that have determined all politicians to be psychopaths though, but that doesn't matter wrt. whether the reasoning is sound enough to accept the conclusion as "likely enough to be true".
> My argument against a) is - you haven't shown any data suggesting that public sector is more corrupt
You know, it would be the public sector itself publishing (and publicizing) that data. Do you think they might be biased?
> and you haven't shown any mechanism which should select for corruption in public sector, that isn't also present in private sector.
So what? Psychopaths are certainly everywhere, but the problem I'm talking about is that they rule over us.
> My argument against b) is - if all people are suspectible to corruption - then why assume they are corrupt by default, when you don't assume the same for people working in private sector?
Because psychopaths are not quite human. Do some research, but.. don't put too much emphasis on academic sources, because most of those have been produced by psychos themselves, and they're a bit biased.
Here's a breadcrumb to follow: https://www.youtube.com/watch?v=LsiTyPHMPh8
Of course, you might be one too, and just playing games with me.
> And public officials are paid with public money to do what people want them to do. They may do that, or try to cheat. Same as the programmer.
Public officials aren't exactly held accountable for their actions though, whereas programmers (with no political connections) are.
Pfft.. OK, I should be working instead of wasting time here, so I'll stop.
> If it were somehow possible to scrap commuting altogether.
Indeed. If only there were a way that people could do work without travelling to a specific desk in a specific building during specific hours.
Indeed. If only there were a way that people could do work without travelling to a specific desk in a specific building during specific hours.
This sentence jumped out at me too. Of course, not all jobs are amenable to remote work, but many are. However, it will take a long time to change the expectations of managers and coworkers to reflect this new reality.
The problem is actually in the time and boredom while traveling. So maybe autonomous cars, workplaces in trains or (far fetched ;-) teleportation could improve the 'commuting-problem'.
I think most people still like to work physically with other people. That is why I go to a co-worker space. Because I am actually more productive at home.
I think most people still like to work physically with other people. That is why I go to a co-worker space. Because I am actually more productive at home.
Boredom while traveling is something that could be solved for most, but it goes against the will of people and various cost-cutting solutions. You could get rid of cars in the big cities and replace them with more public transportation. But people won't willingly give up their cars because of various - often not very rational - reasons, and the public transportation is being developed in the wrong way too. Someone figured out the cheapest way to increase the capacity is to replace sitting places with standing places, and so each new generation of buses and trams has less space to sit down. To get rid of boredom in commute, you need the opposite - have much more sitting spaces, so that commuters can read books comfortably or work on their computers.
Not so very long ago, there seemed to be a movement in quite the opposite direction: live somewhere car-friendly and work on out-of-town campuses with ample parking.
While I'm another one who believes that the ideal commute is "step across the hallway" (or perhaps an office at the bottom of the garden...), I'd argue that the old low-density promise of commuting 20 or 30 minutes on open roads isn't so bad (and certainly no more taxing than what the public transport/new-urbanist lobby seem to be proposing). Why is this never on the agenda any more?
While I'm another one who believes that the ideal commute is "step across the hallway" (or perhaps an office at the bottom of the garden...), I'd argue that the old low-density promise of commuting 20 or 30 minutes on open roads isn't so bad (and certainly no more taxing than what the public transport/new-urbanist lobby seem to be proposing). Why is this never on the agenda any more?
I don't know why there's such "new-urbanist lobby" in the US, but in Europe you can't realize the dream of "open-road commuting" and low-density employment, not without turning the entire continent into one big suburbia. I don't think we have enough land for that.
I'm personally for public transit because of efficiency. Even if you could somehow get that "old low-density promise of commuting 20 or 30 minutes on open road", which would definitely be not a bad situation for commuting, it would still be an energy disaster. Mass transportation and high-density settlements are much more energy-efficient, and energy is one of the biggest problems we're facing as a civilization right now.
I'm personally for public transit because of efficiency. Even if you could somehow get that "old low-density promise of commuting 20 or 30 minutes on open road", which would definitely be not a bad situation for commuting, it would still be an energy disaster. Mass transportation and high-density settlements are much more energy-efficient, and energy is one of the biggest problems we're facing as a civilization right now.
The UK has 26.7M households in 243,610km^2. That's nearly a hectare per household -- doesn't sound "suburban" to me (although maybe some parts of the US would disagree!).
Of course, the UK population is very unevenly distributed at the moment...
Of course, the UK population is very unevenly distributed at the moment...
You still need land for agriculture, industry, forests, animal habitats, etc. Also, not all of the land in that 0.25M km^2 is habitable nor suitable for other uses mentioned above.
I've heard some calculations that in theory you could have all 7 billion people living comfortably on 50% of the land while the other 50% could go to agriculture, industry, forestation, etc. but that would require geoengineering on an unprecedented scale, not to mention being very energy inefficient.
I've heard some calculations that in theory you could have all 7 billion people living comfortably on 50% of the land while the other 50% could go to agriculture, industry, forestation, etc. but that would require geoengineering on an unprecedented scale, not to mention being very energy inefficient.
Yes, individuals optimize traveling focused on cost (less space = cheaper) so they get what they want. Whereas society and employers would like to see higher output. If only 'they' were willing to pay for that.
Personal happiness is mostly a long term goal which does not go well with short term needs.
Personal happiness is mostly a long term goal which does not go well with short term needs.
> in Poland people constantly complain about overregulation of construction
In Poland people constantly complain about overregulation of pretty much everything (I'd say complaining itself is our national sport, but that's another topic) - but that's probably typical of humans. It's easy to complain about overregulation when the government tells you you can't do whatever you want and dump externalities on everyone around you.
But I agree with your conclusion. We have quite lax construction laws and people still commute. I don't really see how the two are actually related in practice. Majority of people doesn't get to pick and choose jobs. You can spend months looking for a good opening, and if you don't like one because it's on the other side of the city, then no worries, there are thousands of people who will happily take your place.
In Poland people constantly complain about overregulation of pretty much everything (I'd say complaining itself is our national sport, but that's another topic) - but that's probably typical of humans. It's easy to complain about overregulation when the government tells you you can't do whatever you want and dump externalities on everyone around you.
But I agree with your conclusion. We have quite lax construction laws and people still commute. I don't really see how the two are actually related in practice. Majority of people doesn't get to pick and choose jobs. You can spend months looking for a good opening, and if you don't like one because it's on the other side of the city, then no worries, there are thousands of people who will happily take your place.
IMHO making it easier, cheaper, and less risky to rent flats is the low-hanging fruit.
You can't predict where you will work in 10 years, why expect to live in the same house for 10 years? Of course - not wanting to move kids to a different school is valid reason, but still kids change school every few years. Many people could reduce commute with no bad side-effects, if not for the problems with renting flats.
People are very careful about renting flats to families with kids, because it's very hard to expel them if they stop paying right now.
You can't predict where you will work in 10 years, why expect to live in the same house for 10 years? Of course - not wanting to move kids to a different school is valid reason, but still kids change school every few years. Many people could reduce commute with no bad side-effects, if not for the problems with renting flats.
People are very careful about renting flats to families with kids, because it's very hard to expel them if they stop paying right now.
>> If it were somehow possible to scrap commuting altogether...
I'm about to start a remote job, and this is the bit I'm most looking forward to. I'll be able to claw back that 2 hours I'm losing every day to a pointless commute.
I'm about to start a remote job, and this is the bit I'm most looking forward to. I'll be able to claw back that 2 hours I'm losing every day to a pointless commute.
Naively assumes that the building restrictions cause permanent productivity losses. Instead, building restrictions likely push some jobs elsewhere. Since housing is too expensive in SF, some tech jobs go to other places. Since housing and office space is too expensive in NYC, some finance jobs go elsewhere.
Some amount of municipal planning is a good thing. It provides needed services for residents and increases the quality of what is built. But there is probably a limit to how much growth a government can handle in a responsible way. That suggests that building restrictions might even be a good thing. If the government is overloaded, the restrictions push the growth to other areas where the governments are more eager to plan for the growth.
Some amount of municipal planning is a good thing. It provides needed services for residents and increases the quality of what is built. But there is probably a limit to how much growth a government can handle in a responsible way. That suggests that building restrictions might even be a good thing. If the government is overloaded, the restrictions push the growth to other areas where the governments are more eager to plan for the growth.
> push some jobs elsewhere
The theory goes that these high-density population centres have higher productivity, for a couple of reasons:
- "Truer" competition -- distance is an artificial barrier that reduces employees' access to jobs and reduces employers' access to job candidates. It also reduces companies' access to each other.
- More cross-pollination as people a free to move jobs more often and (in theory) have more interactions with other companies.
There are no doubt some downsides to concentrating all of your nation's business in one place, and things like telecommuting and fast public transport will have the effect of bringing people closer together without straining infrastructure as much, but there's really no alternative to density.
The theory goes that these high-density population centres have higher productivity, for a couple of reasons:
- "Truer" competition -- distance is an artificial barrier that reduces employees' access to jobs and reduces employers' access to job candidates. It also reduces companies' access to each other.
- More cross-pollination as people a free to move jobs more often and (in theory) have more interactions with other companies.
There are no doubt some downsides to concentrating all of your nation's business in one place, and things like telecommuting and fast public transport will have the effect of bringing people closer together without straining infrastructure as much, but there's really no alternative to density.
Its all about the vested interests.
One of the primary problems in London, and probably many countries with similar issues is that the politicians are far more likely to be landlords than the general public.
I read that in the UK 1 in 4 members of parliament are landlords, compared to 1 in 30 for the general public.
The side effect of this is that ever increasing demand for property, and then passing laws that make demand even stronger (right to buy for example), whilst limiting building programmes increases the politician's wealth for zero effort. They don't have the money to profit from lots of new builds, so its easier to constrain supply, and the general public who own houses will think they've never had it so good because their house is worth more.
Same thing in the US but for the arms industry.
Also mix in the fact that huge numbers of new build London apartments are being kept empty by Chinese owners (and others) and you've got a crisis waiting to happen.
There's going to be a tipping point for London - when young white collar workers such as software developers, accountants, graphic designers, marketing professionals and the other skills that make London competitive won't be arsed to travel to London for 1-2 hours, or live in a shoebox to get a salary that's 15% higher than in Leeds, Birmingham or Manchester where they could have a large house.
The way out isn't just building more property, but passing laws that force owners to rent out properties when they own more than say 3 or 4. Although that would of course crash rental income, so politicians won't do that either.
One of the primary problems in London, and probably many countries with similar issues is that the politicians are far more likely to be landlords than the general public.
I read that in the UK 1 in 4 members of parliament are landlords, compared to 1 in 30 for the general public.
The side effect of this is that ever increasing demand for property, and then passing laws that make demand even stronger (right to buy for example), whilst limiting building programmes increases the politician's wealth for zero effort. They don't have the money to profit from lots of new builds, so its easier to constrain supply, and the general public who own houses will think they've never had it so good because their house is worth more.
Same thing in the US but for the arms industry.
Also mix in the fact that huge numbers of new build London apartments are being kept empty by Chinese owners (and others) and you've got a crisis waiting to happen.
There's going to be a tipping point for London - when young white collar workers such as software developers, accountants, graphic designers, marketing professionals and the other skills that make London competitive won't be arsed to travel to London for 1-2 hours, or live in a shoebox to get a salary that's 15% higher than in Leeds, Birmingham or Manchester where they could have a large house.
The way out isn't just building more property, but passing laws that force owners to rent out properties when they own more than say 3 or 4. Although that would of course crash rental income, so politicians won't do that either.
Situation here (in Hong Kong) is one of the worst in developed world. Government owns all land and supply is almost nothing. Dispite the reputation of overpopulated city (its true) only ~20% of area is used and only ~8-10% is residential area.
Sadly, general public don't read Economist or at least look at the facts. Govt "subsidies" public housing instead of land supply and ppl seems to complain but not analyze the issue.
Sadly, general public don't read Economist or at least look at the facts. Govt "subsidies" public housing instead of land supply and ppl seems to complain but not analyze the issue.
It's funny how HN people are all like "capitalism is awesome!" and then they complain when housing prices are high.
The housing market is filled with massive government intervention. Zoning codes, building codes, state backed mortgages, etc.
Not sure if those are always the same people :). There's only a subset of HN participating in each discussion, and those subsets often don't overlap between the topics.
Putting aside the fact that capitalism is the private ownership of the means of production, and that you probably mean something like "free market" which is very much not the same thing at all, housing isn't a free market. It's subject to massive restrictions and barriers.
What are you talking about? The HN crowd is known for its anti-capitalism.
And its laissez-faire libertarianism.
how MASSIVELY regulated market can be considered capitalism/free market? It's exactly the opposite and so prices are high.
PS capitalism is awesome indeed
PS capitalism is awesome indeed
How so?
The high prices come from government intervention dude. Good job making yourself look like an uneducated fool.
> A ceiling on rents reduces the quantity and quality of housing available. (93% of economists agree)
http://gregmankiw.blogspot.de/2009/02/news-flash-economists-...
> A ceiling on rents reduces the quantity and quality of housing available. (93% of economists agree)
http://gregmankiw.blogspot.de/2009/02/news-flash-economists-...
> Unless productivity picks up, wages cannot grow. Investing more in education, health care and technology is the normal way of boosting productivity growth.
We could always put progressive tax on capital and property. It will be very efficient redistribution.
We could always put progressive tax on capital and property. It will be very efficient redistribution.
Yes these were the rules. And then the rules changed. Now people don't need an education as what are they going to do with that education if there are no jobs. There is no need for more productivity because there are no more jobs, the robotic algorithms are already designed to auto-optimize and so they are as efficient as can be. Health care eats most of the the budget because people are old and don't want to die. etc. etc. </hypothetical future>
It is a self-feeding problem in London. It attracts job so massive government investment is made, which attracts more people but also pushes prices up so high that we need to give benefits to certain people who can't afford to live there.
If investment was made to comparable levels in any of the 10 or more other large cities in the UK so companies don't feel the need to work in London, perhaps we would solve productivity without producing a Mega-city.
It sounds easy and I know there are loads of bureaucratic hurdles and it doesn't help that local councils don't always want the change that is needed in their nice cities to create the influx of jobs...
If investment was made to comparable levels in any of the 10 or more other large cities in the UK so companies don't feel the need to work in London, perhaps we would solve productivity without producing a Mega-city.
It sounds easy and I know there are loads of bureaucratic hurdles and it doesn't help that local councils don't always want the change that is needed in their nice cities to create the influx of jobs...
It's not just about the wealth added to private land holders via public investment. It's about loose credit from banks plus the fact that London is a great place to wash dirty money via property.
http://www.independent.co.uk/news/uk/home-news/london-proper...
Also why do we "need" to give housing benefits to people? They don't go to people they go to landlords who have set their prices higher than the market can bear.
I'm afraid I disagree with you - the jobs aren't paying for the cost of land. The state, corruption and printing money via land are. And without it all the UK economy would have collapsed.
They will never try to stop the cheap money and money laundering.
http://www.independent.co.uk/news/uk/home-news/london-proper...
Also why do we "need" to give housing benefits to people? They don't go to people they go to landlords who have set their prices higher than the market can bear.
I'm afraid I disagree with you - the jobs aren't paying for the cost of land. The state, corruption and printing money via land are. And without it all the UK economy would have collapsed.
They will never try to stop the cheap money and money laundering.