Nobody wants to hear this because it departs from the 'billionaire bad' trope. But Thiel has been remarkably consistent in his criticism of housing being the center of all of the Millenial economic woes.
Sure, Thiel is identifying some of the same problems, but the solutions he's proposing are basically the opposite of the ones Mamdani is. Unsurprisingly, he's proposing solutions that benefit billionaires rather than everyone else (e.g. just les us build whatever wherever we want, of course we'll build cheap housing that brings property houses down! Who could ever imagine we'll build luxury mansions that keep property prices high?).
How many times must it be explained that building luxury mansions still brings property prices down. Nobody ever voluntarily builds crappy low income housing. That’s never how development works. You let people build the new fancy buildings they want to build with all the margins and high prices. Then, when a bunch of rich people move in, that’s people that are no longer chasing all the other apartments. Eventually, way down the road, these swanky apartments will be tomorrow’s old and crappy ones in the neighborhood that’s not hip anymore, and low income people can rent them. This is how things actually work, and it’s fine.
What is NOT fine is when you have banks and private equity bullshit chasing homes purely as an asset to flip. That’s the thing we need to curtail, because it’s just money laundering at the expense of the American homeowner.
> Then, when a bunch of rich people move in, that’s people that are no longer chasing all the other apartments.
Maybe? Seems to me that there's a certain level of wealth where this no longer is true. Housing has (unfortunately in my eyes) become one of those black boxes that you put money in and money comes out; it's an investment. But what you're telling me goes contrary to what I know about the housing market: no, actually, houses depreciate in value because they'll have to ask poor people to buy / rent the place at some point. Can I go buy a mansion built in 1930 for a bargain price?
(I do agree about the private equity part, just the first bit doesn't pass a sniff test from me)
Oh, understood, the housing will "trickle down", right?
How many times do we need to learn that trickle down economics doesn't work? Making the rich richer and happier will never "trickle down" to the poor, it will stop at the rich.
With land, this is particularly obvious. There is a finite amount of land. The more of it is occupied with luxury mansions, the less land will be available for high-density housing. Building 1 new luxury mansion removes land from the pool that could house dozens if not hundreds of people. And rich people don't move in from cheaper housing to more expensive, they just keep both, or they buy the new mansion as a vacation home.
Property is an investment, and there are huge vested interests in keeping property values going up - and not just from rich people, but virtually everyone who owns their own home. You have to fight a lot of these interests to force prices to go down. "Just build more" doesn't work, the space in and around a city is limited.
Building a luxury mansion on top of unused and uninhabited marginal land - sure, that can bring prices down. But building a luxury mansion for one family by replacing dilapidated, and therefore cheap, high-density housing which used to house a dozen families brings prices up. And in practice, that is what is happening in cities. Old low-rise multi-family buildings in nice neighborhoods are being modernized and then converted into single-family mansions.
More housing, regardless of type, is directly correlated to cheaper average rents [0]. So Thiel is right in that regard, the red tape for construction and opposition from NIMBYs must be curtailed.
NIMBYs typically oppose especially lower cost housing, so it's not surprising that cutting red tape does help reduce housing prices, or at least slows down the rise.
The question is if it is enough - and I would be quite certain it's just a band aid. Unless you impose the construction of cheap housing, cheap housing will tend to not get built - almost every interest is opposed to it.
Good thing Mamdani is doing both, cutting red tape and constructing new housing, at least that's his plan, we shall see what others in his governance think about it.
Yeah, that's correct. Democrats aren't made the same. Austin has built the most housing. YIMBY-ism is just free market conservatism economic policy dressed up in liberal language. Most people vote based off of vibes, not actual policy. If you restate the case for YIMBY-ism in conservative terms, you get conservatives to vote for you and liberals shy away. If you restate it in social justice terms, then you get liberals, and conservatives shy away. Policy is the same. The people are stupid.
https://x.com/aphysicist/status/1937879912221667792
https://finance.yahoo.com/news/billionaire-peter-thiel-warns...
Nobody wants to hear this because it departs from the 'billionaire bad' trope. But Thiel has been remarkably consistent in his criticism of housing being the center of all of the Millenial economic woes.