Posts by James Butler
Last ←Newer Page 1 2 3 4 5 Older→ First
-
Hard News: Not yet standing upright, in reply to lprent,
Having a high informal count will probably send a pretty good signal about this silly process, and more importantly it’d stop more people just not voting.
But it also means that the votes which are actually considered will contain a higher proportion of votes by people who actually like one of the alternatives, therefore raising the chances of having an alternative in the final runoff which those people will vote for.
-
Hard News: Not yet standing upright, in reply to Euan Mason,
Next: A $26 million panel, comprising neither poets nor musicians, to select a short list for a new national anthem.
I'm eagerly waiting to be called up to a panel on sports or business policy.
-
Hard News: Not yet standing upright, in reply to Matthew Poole,
I’m a big fan of the “Vote hypnoflag!” plan, and fully intend to promote it at every opportunity
The alternative is the RSA’s "old man yells at cloud" plan to influence the process, which seems somewhat self-defeating. Voting hypnoflag fnord is probably the best way to help avoid any of the four winning (it helps that it’s the one of the four that I prefer, although I really wanted Wā kāinga).
-
I refused chicken and vegetarian burgers on principle.
And yet centrists accuse the left of identity politics!
-
This is probably the right place in the discussion to push LVT and UBI. Subsidise low income buyers, and penalise high-income rentiers.
-
Speaker: House prices and the "Magic Money", in reply to BenWilson,
Then we don’t have to have these futile discussions about which cause is most important. Instead we acknowledge that we should be both increasing supply and controlling demand, and then we do both at the same time.
[...]
The levers we can then tinker with are pretty clear. For supply, natural technological change is always a upwards driver, but it’s not controllable. Increasing the speed of approvals is a tap that can be turned up or down. For demand, interest rates are a lever we already use. Limits on foreign capital flows are another, and they could free up the other lever considerably. Trying to do it all with interest rates is like trying to swim with one arm. Then there’s the obvious possibility of redistribution through various subsidizations. I’m sure there’s others.Minor quibbles with two of your levers. Restricting foreign investment is a tool you might consider using, but I suspect that if you can keep price growth down other ways then it simply won't be needed - why would anyone who doesn't want to live here want to invest in an asset whose value grows slower than wages? And subsidies have to be used very carefully - for example in the current situation, giving more money to buyers might help equalize the relative buying power of some groups but overall it would push prices up even faster.
-
I think I've worked out what frustrates me most about this discussion. We're talking about the difference between housing value and housing debt, and trying to work out where the "extra" money is coming from; but I'm sure most of us have seen first-hand this missing money being created. Someone who bought a house in Auckland for $200k in 2005 now has a $700k asset, but no-one's lent them that money, and unless they sell then no offshore investor has swooped in to give it to them.
This is trivially obvious, which is I guess my point. We know that housing prices are rising dramatically, and we can argue all day about why that is (and I'm sticking with "Auckland's run out of all the easy places to add a dwelling" until I see good evidence that it's not the case); but the "magic money" gap only tells us that it has happened, and I can't see what it adds about why.
-
Speaker: House prices and the "Magic Money", in reply to BenWilson,
I can see that constraining land supply will mean that rising demand will lead to rising prices. What I don’t see is where so much demand came from. If land supply were rising at the same pace as demand, then prices would remain stable.
Are we seriously suggesting that Auckland is meant to grow at roughly the rate that it’s property prices have been rising? So 26% in the last year alone? We’re meant to build a whole quarter of the city in one year?
No. Why would that follow? If the problem is that demand has exceeded supply - and that doesn't mean that there's suddenly more demand, just that the demand curve has crossed the supply curve - then you would expect prices to increase at a greater rate than before, as the value of the existing dwelling stock increases.
Also please let's talk about dwelling supply rather than land supply, it's less prone to being misinterpreted.
-
Speaker: House prices and the "Magic Money", in reply to Russell Brown,
Also, what form of demand would cause an increase in Auckland land prices so tremendously out of proportion to population increases in the past five years? If demand for land is driving up prices, where is that demand coming from?
Remember price isn't driven just by demand; it's the combination of demand and supply. In the case of a finite resource, if there is still demand for the resource after the finite source is used up then prices will increase. It's trivial to say that land is a finite resource, but the real case of a city with new developments opening and new dwellings being built on old land is more complicated. But it's not unimaginable that if a city passed the point where new development and intensification was easily keeping up with population growth, then it might see a great increase in prices as the supply tightened, even if the population growth was more steady.
-
Speaker: House prices and the "Magic Money", in reply to Swan,
After the change point, the rise was more about revaluation of existing assets, and specifically increases in the value of the underlying land. We know land values have increased hugely in our cities over the last decade.
Incidentally this fits in perfectly with the argument that land supply is the main culprit when it comes to housing affordability.
With the caveat that "land supply" is shorthand for something like "excess dwelling capacity" - let's not forget that we could build more dwellings on our existing land - I think I agree.
Consider Lucy's case, except the village is on a tiny, crowded atoll with extensive viewsheds of the neighbouring volcano. What happens to the total value of houses in the village when someone new needs a home, whether they arrived from another island or are the grown-up child of existing villagers?