How Reverse Game Theory Could Solve the Housing Shortage

xnx

Hugged to death? Archive: https://archive.is/yZYMa

peder

Leftists doing anything except just building more housing Rent is falling all over the Southeast where housing has been built in droves, and actually in greater quantities than new demand. The only solution is just flooding the market with housing.

antisthenes

Montgomery county is one of the worst places in the entire US for housing shortage. The whole first part of the article tries to highlight the success of the 1972-era zoning policy, but ends up making the opposite point, whereas agricultural land is preventing enough housing being built in the north of Montgomery County, whereas Virginia has successfully incorporated density (and more jobs as a result). Not sure if that was author's intention, or how game theory is even relevant here. It's just zoning and housing policy and understanding of the zero-sum dynamic for desirable land. Some other examples from the article don't make much sense either (except Houston). Source: DMV native for 20+ years, also an economist (by education, not profession). I suspect the publication paid the author to write a very particular opinion, because the article reads more like a NIMBY-defending piece.

jerf

If you want to understand a fairly non-trivial amount of the brokenness of the world, pondering the implications of "Hey, what if we thought about what our incentives will actually do instead of what we want them to do, and made plans based on that?" being a brilliant and bold breakthrough in the world of governance rather than common sense can take you a long way.

greggyb

Title is annoying and the article doesn't bear it out. This is not "reverse" game theory. It's just game theory and incentives: something you'd learn in any course of study of economics. But yes, if you change incentives, you can change behavior. And if you can find a way to create and enforce incentives that push toward an outcome you want, then you get more of that outcome. This is a good lesson to remind people of: incentives matter. So often---especially in discussion of public policy---we see conflation of stated desires with incentives, and of incentives with "cash paid to someone". The former is fallacy, and the latter myopic.

mindslight

> St. Patrick’s Cathedral used the new [air rights] system in 2023, selling some of its rights in a deal worth as much as $164 million to fund its maintenance I don't see how this creates a sustainable dynamic, rather than merely making a more comfortable journey to that same financialization attractor (ie Moloch). It's easy to feel good about this church (or that farmland) was given a cash infusion and could keep on running its same cute bespoke non-IREAM (inflation rules everything around me) operation, but what happens when that bolus of cash has been inevitably spent and they need another one? It feels like this is the fundamental problem with every heady touting of market-based reforms. Of course the initial trend is consensual and both parties benefit (positive sum) - otherwise it wouldn't happen! But then as the feedback loops from market optimization set in over the longer term, those positive qualities gradually disappear in favor of a dystopian nonconsensual dynamic. (FWIW I'm personally undecided whether the root problem here is that capital inevitably coalesces and therefore government intervention is required to keep it distributed, or whether the agglomerating dynamic stems from the centralized money-printing fountain that flows to the politically connected. But there is enough dumb money sloshing around these days that the distinction is probably moot)

avidiax

I agree with the general principle that game theory is a powerful tool for public policy, but the idea of these transferable development rights or "air rights" seems a bit absurd to me. What the government is saying by allowing these rights to be sold, is that the place to which they are transferred to has arbitrarily restrictive zoning. In my mind, the value of transferrable development rights should be zero. Zoning should actually have some hard principle behind it that isn't bendable by allowing the non-development of some other desirable piece of land. Either a building is too tall for the neighborhood or it isn't. It should be "too tall unless you pay a farmer 10 miles away". Why is uneven, concentrated development some kind of public good? How does this position unroll? How does the farm eventually get developed in 50 years? Do they have to buy TDR from someone else? Does an "equivalent" TDR have to be demolished?

vonneumannstan

Do you really need Game Theory to figure out you need to build more houses and can't let NIMBY's be in charge of the decisions for where and when that is done?

latenode

Housing policy fails because everyone is playing a different game. Zoning boards, developers, homeowners and renters all have completely different incentives and nobody is solving for the same outcome.

howdyhowdy

Go read about things like rent maximizer from yardi then come back. Another reason people can't afford to buy housing is because companies like these enable apartment complexes to collude on pricing under the guise of software. Rent is higher than a mortgage payment in some places, and folks can't afford to pack any savings away. So they rent until they fall behind, then they rent something less ideal, then they leave the area or live out of their car. Either way it's garbage. The only reason I could afford my home is because I managed to find a private renter who was charging significantly below market rate for years so that I could build a down payment, and I managed to buy at the right time. Two years after closing the 'value' of my home jumped 60% and I would have been priced out, it's all just bullshit. Maybe instead of going around our elbow to get to our asshole we should just call a spade a spade and make rent 'optimization' illegal. Then once people can actually afford a home we'll have a better picture of how many should be built. Because ultimately? People just want to be able to live without the stress of bills and the looming worry of maintaining a roof over their heads.

7e

The housing shortage is due to humans breeding and overrunning their habitats. It’s not something to be fixed. It’s badly needed backpressure which keeps the planet livable. Do you want to live in a concrete jungle? Do you want to kill the earth? Do we need any more people? Selfish influencers are trying to get housing built in “cool” spots, (because they don’t make enough money) rather than wait their turn or make other neighborhoods cool. Ignore them and their campaigns to ruin everything.

tancop

im not convinced about this. its way more simple to delete zoning laws and replace them with a resident vote. that means the community can decide directly in a bottom up local way without affecting the whole city. layer a tax incentive on top of that where part of the property tax rate is calculated from local average rent (of course thats impossible in cali with prop 13) so areas that want to keep themselves exclusive pay more and that money can go to public housing in other places with better neighbors.

gtrplyrjimi

Housing is a capital G, Government, issue. There are geo-political forces at play that make it hard to deal with housing rationally. The first starts at the border; you have to ensure you can count accurately who is coming and who is going (as well as who plans on coming and who plans on going). This doesn't mean lock down the borders. It means understanding the inputs and outputs. Which leads to the next force. Homelessness. We must have sensible laws and process from those who are unhoused. Is it financial, medical, psychological, addiction, abuse, etc? Each of these has a different solution; and the law needs to have enough teeth to enforce those solutions. It's a gradient of solutions. If you fall out of a bracket, there should be a more affordable bracket that is humane. The threat of living on the street doesn't help anything. Plus, in California alone, enough has been spent to solve the problem tenfold. I suspect devious forces at work behind that.... So we've controlled our population inputs / outputs from one vector, we've put a cap on homelessness, we now need....... affordable, mass, fast public transit. Look, we all can't live in NY or by the beach or in all the fun places. Uprooting the entire economic system is a no go with too many unforeseen consequences. Supply is only way to possibly lower the costs in desirable places, but you are competing against the world. The bare-minimum is that from anywhere in the country you live. You are not far from fast transportation. Bullet trains and things of that sort. That means you can actually develop farther and farther out, but still have those people participate in the main hub's economy. If you sort those things out, you will allow people to decentralize and will force commercial entities to do the same. This will put immediate pressure on the already over-stressed commercial real estate market. Once that relents, we may see the cost for housing come down everywhere.