Comment on England worst place in developed world to find housing, says report

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BraveSirZaphod@kbin.social ⁨1⁩ ⁨year⁩ ago

That's categorically impossible, because value in an economic sense is not determined by any one person.

You can put limits on price, but that's a very different thing, and has several downstream effects that are often negative. If you mandate that the price be below an asset's actual value, the owner is highly incentivized to either sell it in less legal ways, or simply not sell it at all and wait until regulations change or they find some other way of getting its true value. In the basic context of real estate, for instance, you might just meet with people, reject all offers, and then sell the house to a friend who agrees to "gift" you some extra money for it.

If, in a rental context, you mandate that rents remain below the cost of ownership from mortgage and maintenance, you incentivize the owner to do things like never do any maintenance (because what's the tenant going to do? Lose a rent controlled apartment?). You incentivize builders to never build anything, because rents won't be high enough to recoup costs. Some particularly bold landlords may even try to deliberately destroy their units as a way to get rid of an expensive asset (see upper Manhattan in the 70s, where many buildings "mysteriously" burned down).

Price != Cost != Value. Failing to understand this causes a lot of broken analysis.

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