# "Building more expensive housing helps everyone"



## Brendan Burgess (12 Feb 2022)

A very interesting article by David McWilliams









						David McWilliams: Dereliction is vandalism and must be stopped
					

Parts of Limerick – potentially a wonderful, liveable city – are literally falling down




					www.irishtimes.com
				




I thought we should bring in incentives to encourage builders to build more starter homes.  But his argument (after you wade through all the waffle) is that if you build posh homes, the posh people will vacate smaller houses, and this will work its way through.

Or alternatively, if you don't build expensive homes, there will be a shortage of them and expensive people will buy less expensive homes and this will push people down so that starter homes won't be affordable.

_One of the obvious consequence of having too few homes is that everyone shunts down. By this I mean, if there are not enough exclusive homes for rich people than they will buy the homes that used to be the preserve of the middle class. The middle class will then shunt downwards.

So homes that were once solidly working class are bought up by middle-class people elbowed out of their traditional areas by richer people who just out-bid them. This is why old council estates, traditionally homes for the industrial working class, are now full of barristers, marketing executives and journalists. Then the children of former council estates move out to commuter towns because they have also been priced out.

Finally, the shunting process stops as the poor, who are now priced out at the cheap end of the market, end up homeless or on various subsidised rent schemes._


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## Brendan Burgess (12 Feb 2022)

It's an interesting idea, but I am not sure. 

We have limited resources to build houses.   As a society, would we not be better off building three 700 sq ft houses than one 2,100 sq ft house?


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## PebbleBeach2020 (12 Feb 2022)

Can't read the article as I'm not a subscriber


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## skrooge (13 Feb 2022)

I kind see the logic. Government policy is stuck in the 1980s. The idea of incentivising first time buyers to purchase new builds is a throwback to a time when new builds were in someway inferior to existing stock. The modern new build far exceeds the standards of the past. Unfortunately this also makes new builds expensive - significantly out of reach of a typical first time buyer. We overcome that issue by giving them massive grants.... Cause that's what we did before and somehow before was better than now.



Two things the government wants to do is have more housing and retrofit the existing stock. 

If you want retrofit existing houses but only offer to pay for half of it that leaves owners of existing stock with having to fund the remaining half themselves. Pay back on such investments are measured in years if not decades. For those of a certain age it's not worth it for others they may have the wealth but it's locked up in their homes. Government policy should encourage these people to trade up to the posh A-rated houses and enjoy the comfort they have. Reduce the costs associated with trading up i.e., remove stamp duty on new builds

Let the younger (and less posh) people purchase the older houses - with the supports that are currently focused on buying new builds - these are the people with the greatest incentive to improve the existing property stock. 

We should stop trying to come up with policies that try to bypass the property ladder - that doesn't work and ultimately adds to the dysfunction.


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## Leo (14 Feb 2022)

Brendan Burgess said:


> We have limited resources to build houses. As a society, would we not be better off building three 700 sq ft houses than one 2,100 sq ft house?


Perhaps extending his point, a shortage of larger homes has seen lots of people with money extending their existing homes to meet their needs. Building developments of 3-4 bedroom homes is more efficient than lots of one off extensions.


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## Zenith63 (14 Feb 2022)

Trickle-down economics has given trickle-down a bad name, trickle-down housing makes perfect sense.


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## AlbacoreA (15 Feb 2022)

Lots of people needing cheaper housing will not fit into less people need more expensive housing. 
Gallon into a pint pot etc. 

Which will make more profit. The expensive housing...


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## Purple (15 Feb 2022)

AlbacoreA said:


> Lots of people needing cheaper housing will not fit into less people need more expensive housing.
> Gallon into a pint pot etc.
> 
> Which will make more profit. The expensive housing...


I suppose the ground works costs (sewage, drainage, utilities etc) are the same and the cost of the land is the same per square metre and since soft costs account for 52% of the total cost of housing the actual additional construction costs aren't that much higher.


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## AlbacoreA (15 Feb 2022)

Can't see how the ground works for 50 small houses would the same as 10 large ones.

Sub division invariably adds cost and complexity. Never mind the resources to service more people in a denser space.


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## Purple (15 Feb 2022)

AlbacoreA said:


> Can't see how the ground works for 50 small houses would the same as 10 large ones.
> 
> Sub division invariably adds cost and complexity. Never mind the resources to service more people in a denser space.




The same per unit.


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## T McGibney (15 Feb 2022)

AlbacoreA said:


> Lots of people needing cheaper housing will not fit into less people need more expensive housing.
> Gallon into a pint pot etc.
> 
> *Which will make more profit. The expensive housing...*


Not axiomatically.  Remember, Primark is vastly more profitable than House of Fraser.


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## AlbacoreA (15 Feb 2022)

T McGibney said:


> Not axiomatically.  Remember, Primark is vastly more profitable than House of Fraser.



This isn't about profitability. 

There are simply more people looking for cheaper houses than expensive one. People moving up doesn't create enough supply at the bottom end. 
Trying to justify focus on expensive housing as means to solve supply is illogical. 

I only mentioned profit as focusing on the high end is about profit margins, not supply. Which is fine, but lets not pretend its about supply. It will have an impact, but lets not over state it.


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## T McGibney (15 Feb 2022)

AlbacoreA said:


> This isn't about profitability.
> ..
> I only mentioned profit





AlbacoreA said:


> focusing on the high end is about profit margins, not supply. Which is fine, but lets not pretend its about supply. It will have an impact, but lets not over state it.


All construction is about profit margins. If there are profits, there will be abundant supply, assuming the market is allowed do its thing.  And vice versa.


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## AlbacoreA (15 Feb 2022)

T McGibney said:


> All construction is about profit margins. If there are profits, there will be abundant supply, assuming the market is allowed do its thing.  And vice versa.



That a bit like saying the profit margins on €1000 iPhones are driving down the cost and increasing the supply of cheap Android Phones.


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## T McGibney (15 Feb 2022)

AlbacoreA said:


> That a bit like saying the profit margins on €1000 iPhones are driving down the cost and increasing the supply of cheap Android Phones.


How? I made no assertion that the profit margins on expensive houses are driving down the cost and increasing the supply of cheap houses.

But in the case of phones it's probably true, when you think about it.


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## AlbacoreA (15 Feb 2022)

Well thats the subject of the thread. 

Supply at the top end will give supply at the bottom end. 
Why pick the worst and least effectual way of doing something. Makes no sense.


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## T McGibney (15 Feb 2022)

AlbacoreA said:


> Well thats the subject of the thread.
> 
> Supply at the top end will give supply at the bottom end.
> Why pick the worst and least effectual way of doing something. Makes no sense.


No, there's no mention of profits in the subject of the thread.

And your view on what is "worst and least effectual" is totally subjective.

Builders and developers do not owe a responsibility to anyone to ameliorate or cure social ills. They will build and develop wherever and in whatever manner there is a profit to be made. And if they build and develop enough units, their collective actions will collectively ameliorate or cure the social ill that is the housing shortage. But that happy outcome will be merely a byproduct of their activity.

On the other hand, any command for them to direct their energies to ameliorate or cure the housing shortage, will most likely end in failure, as this objective will sooner or later conflict with the objective to make a profit on what they do.

It's an example of the principle of obliquity.


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## Purple (15 Feb 2022)

T McGibney said:


> No, there's no mention of profits in the subject of the thread.
> 
> And your view on what is "worst and least effectual" is totally subjective.
> 
> ...


Yep, then the State is unable to provide social infrastructure and attempts to shoehorn the private sector into providing it instead it invariably makes things worse. Rent controls, section 23's, first time buyers grants etc all result in a worse medium to long term situation in the housing market.
The State's input into the housing market is one of the biggest problems; VAT, Development levies, planning delays, the cost of provision of utilities. All of these things have a significant influence on the price of housing but rather than getting their own house in order they screw things up on the other side.


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## AlbacoreA (15 Feb 2022)

Depends what the goal is. The Developers goal isn't to solve the crisis. Its should be the Govts goal though.

High end supply will not significantly effect the supply at the bottom end indirectly or otherwise. 

"...Building more expensive housing helps "Everyone"..."   ..too much faux altuism for me.  

My criticism here is of the Govt.  Not the market or those active within it. But what is the purpose of the article. What's the message? If there is one.


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## T McGibney (15 Feb 2022)

AlbacoreA said:


> Depends what the goal is. The Developers goal isn't to solve the crisis. Its should be the Govts goal though.
> 
> High end supply will not significantly effect the supply at the bottom end indirectly or otherwise.
> 
> "...Building more expensive housing helps "Everyone"..."   ..too much faux altuism for me.


It's nothing to do with altruism, and all to do with the principle of obliquity. And in a situation of acute shortages of a particular category of goods, there is obviously a clear social benefit to adding to its available stock, whether it be at the higher or the lower end of the market.


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## Purple (15 Feb 2022)

AlbacoreA said:


> My criticism here is of the Govt.  Not the market or those active within it. But what is the purpose of the article. What's the message? If there is one.


The Government is the biggest player in the market. 

They are the biggest landlord in the country, the biggest driver of increased rental costs as instead of building social housing they take homes out of the private market for social housing (they use private renters taxes to price them out of the market).
That reduces stock for rent and for sale and decreases liquidity in the market. People can't trade up or down because there are so few properties for sale. That means there are more homes under occupied and over occupied. 
Anything that increases supply is a good thing.


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## AlbacoreA (15 Feb 2022)

T McGibney said:


> It's nothing to do with altruism, and all to do with the principle of obliquity. And in a situation of acute shortages of a particular category of goods, there is obviously a clear social benefit to adding to its available stock, whether it be at the higher or the lower end of the market.



We'll have agree to disagree that adding new stock where's these least demand has any social benefit at the height of historic housing crisis. 



> Hundreds of luxury apartments lie vacant at two of Dublin’s most prominent rental blocks controlled by a billion-dollar US fund.
> 
> A detailed analysis of the Residential Tenancies Board (RTB) register by the _Business Post_ has shown nearly four-fifths of the 246 apartments in phase three of Clancy Quay in Dublin 8 are empty.
> 
> Nearly half of the apartments in Capital Dock, a 190-apartment, 22-storey built-to-let tower in Dublin’s Docklands are also vacant....


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## T McGibney (15 Feb 2022)

AlbacoreA said:


> We'll have agree to disagree that adding new stock where's these least demand has any social benefit at the height of historic housing crisis.


You're ignoring basic economics. 

How do you ever ameliorate a shortage except by suppressing demand (impossible as long as the population is either stable or rising) or increasing supply?

And what's your point in relation to Clancy Quay?


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## AlbacoreA (15 Feb 2022)

The premise here is that its a common homologous market. It isn't.


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## Purple (16 Feb 2022)

T McGibney said:


> You're ignoring basic economics.
> 
> How do you ever ameliorate a shortage except by suppressing demand (impossible as long as the population is either stable or rising) or increasing supply?
> 
> And what's your point in relation to Clancy Quay?


Higher interest rates and higher property taxes would suppress prices though.


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## BlackandBlue (16 Feb 2022)

Just curious.
I wonder has any serious thought been made at a government level regarding encouraging the supply of smaller houses in urban areas to facilitate trading down?

In our estate and there is a steadily ageing coterie of owners.
Most are 4 bedrooms and a couple have 1 or 2 occupants'
There is nothing that I can see in town to encourage them to sell up and downsize.


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## T McGibney (16 Feb 2022)

Purple said:


> Higher interest rates and higher property taxes would suppress prices though.


....while probably making the shortage considerably worse.


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## AlbacoreA (16 Feb 2022)

BlackandBlue said:


> Just curious.
> I wonder has any serious thought been made at a government level regarding encouraging the supply of smaller houses in urban areas to facilitate trading down?
> 
> In our estate and there is a steadily ageing coterie of owners.
> ...



Lot to be said as you age, staying where you know everyone on the street and in the area. Support network etc.


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## Purple (16 Feb 2022)

T McGibney said:


> ....while probably making the shortage considerably worse.


Will it? The building costs will be the same but they are less than half the total cost of the house. Land values should drop and certainly a site value tax levied on all zoned land would encourage less hoarding.

We've a problem with under and over occupancy and I do think that the lack of supply is making the market far less liquid and so there is less trading down/right-sizing.


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## Purple (16 Feb 2022)

BlackandBlue said:


> Just curious.
> I wonder has any serious thought been made at a government level regarding encouraging the supply of smaller houses in urban areas to facilitate trading down?
> 
> In our estate and there is a steadily ageing coterie of owners.
> ...


I think that's a big problem and very hard to address. Higher property taxes would offer a stick but with nowhere to go it's like beating someone who is cornered.


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## T McGibney (16 Feb 2022)

Purple said:


> Will it? The building costs will be the same but they are less than half the total cost of the house. Land values should drop and certainly a site value tax levied on all zoned land would encourage less hoarding.
> 
> We've a problem with under and over occupancy and I do think that the lack of supply is making the market far less liquid and so there is less trading down/right-sizing.


Interest rate hikes always make it harder for borrowers to acquire property and riskier for developers and builders to deliver it.

Higher property taxes just scare off developers and undermine the confidence of those who fund them.


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## Purple (16 Feb 2022)

T McGibney said:


> Interest rate hikes always make it harder for borrowers to acquire property and riskier for developers and builders to deliver it.


The market cost of a house is linked to the cost of money. If there are 5 people in the queue for a house the person with the most money will get it. The interest rate decides how much they borrow, that's all.



T McGibney said:


> Higher property taxes just scare off developers and undermine the confidence of those who fund them.


What makes you think that?


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## T McGibney (16 Feb 2022)

T McGibney said:


> Higher property taxes just scare off developers and undermine the confidence of those who fund them.





Purple said:


> What makes you think that?


I'm amazed you need to ask. Higher taxes add to risk, and property development is already a highly risky activity without adding to it. It's no coincidence that a tax cutting programme kickstarted our building boom from 1997/98 and higher taxes have helped stymie hopes of a resurgence since 2009.


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## T McGibney (16 Feb 2022)

Purple said:


> The market cost of a house is linked to the cost of money. If there are 5 people in the queue for a house the person with the most money will get it. The interest rate decides how much they borrow, that's all.


And if a higher interest rate means that they can borrow less, and thus pay less, doesn't that mean that fewer vendors will sell, and fewer developers will develop, as long as prices are depressed as a consequence?


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## Purple (16 Feb 2022)

T McGibney said:


> I'm amazed you need to ask. Higher taxes add to risk, and property development is already a highly risky activity without adding to it. It's no coincidence that a tax cutting programme kickstarted our building boom from 1997/98 and higher taxes have helped stymie hopes of a resurgence since 2009.


Property taxes are levied on the owner of the property, not the developer. Why would increasing them deter builders? VAT is a deterrent but I don't see how a tax on the end user or, in the case of the owner of a zoned site the land owner, is a deterrent to the developer.
Tax incentives from 1997/98 caused a massive misallocation of capital into construction where there was little market demand. I benefitted from them but as a country they did us little overall good. Transaction taxes deter activity but do capital taxes?


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## Purple (16 Feb 2022)

T McGibney said:


> And if a higher interest rate means that they can borrow less, and thus pay less, doesn't that mean that fewer vendors will sell, and fewer developers will develop, as long as prices are depressed as a consequence?


Other than Landlords people sell houses because they need to or because Granny died etc, not really because their value has increased.


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## T McGibney (16 Feb 2022)

Purple said:


> Property taxes are levied on the owner of the property, not the developer. Why would increasing them deter builders?



Basic economics.  A tax on any good will decrease the attractiveness of owning that good and increase risk for those who produce that good in the hope of selling it.



Purple said:


> VAT is a deterrent but I don't see how a tax on the end user or, in the case of the owner of a zoned site the land owner, is a deterrent to the developer.


Again this is very basic and I'm amazed that you have to ask.  Property development inherently involves acquisition and ownership of zoned land.


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## T McGibney (16 Feb 2022)

Purple said:


> Other than Landlords people sell houses because they need to or because Granny died etc,



Well obviously, but not in sufficient quantities to satisfy market demand at a time when the population is at or near a historic high.


Purple said:


> not really because their value has increased.


I honestly don't know where to start with this. It's not 1 April, is it?


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## Purple (16 Feb 2022)

T McGibney said:


> Basic economics.  A tax on any good will decrease the attractiveness of owning that good and increase risk for those who produce that good in the hope of selling it.


A property tax will make the hoarding of zoned land as a form of capital price speculation less attractive. That's a good thing. In the context of the overall risk of developing a site a site value tax is a minimal consideration. I'm amazed you think otherwise. 



T McGibney said:


> Again this is very basic and I'm amazed that you have to ask.  Property development inherently involves acquisition and ownership of zoned land.


See above. I'm amazed you think that a site value tax will have any significant impact on the decision of a developer to develop a site. If anything it would free up the availability of zoned land thus making it cheaper to buy and decrease the cost of the land. 
We have what is effectively an oligopoly in Dublin where a small number of partied control the majority of the zoned land. They can control the price by controlling the supply. This is far more complex than "basic economics".


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## T McGibney (16 Feb 2022)

Purple said:


> A property tax will make the hoarding of zoned land as a form of capital price speculation less attractive. That's a good thing. In the context of the overall risk of developing a site a site value tax is a minimal consideration. I'm amazed you think otherwise.
> 
> 
> See above. I'm amazed you think that a site value tax will have any significant impact on the decision of a developer to develop a site. If anything it would free up the availability of zoned land thus making it cheaper to buy and decrease the cost of the land.
> We have what is effectively an oligopoly in Dublin where a small number of partied control the majority of the zoned land. They can control the price by controlling the supply. This is far more complex than "basic economics".


Either you're trolling or you haven't the first clue about economics.  It's a truism that taxes on an activity disincentivise that activity. And a tax on land hoarding will clearly disincentivise property development as it's impossible to be a property developer without some level of land hoarding.

If you're prepared to claim that people don't sell houses because their prices have gone up, I'm only wasting my time here, sorry.


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## Purple (16 Feb 2022)

T McGibney said:


> Well obviously, but not in sufficient quantities to satisfy market demand at a time when the population is at a historic high.


Okay, I didn't say otherwise. but you agree with that so why the smart This post will be deleted if not edited to remove bad language remark below?



T McGibney said:


> I honestly don't know where to start with this. It's not 1 April, is it?


How many people have sold up because the price of their house has gone up? Do they then live in a tent or a camper van? 

The problem here is a supply side issue. We can't build houses fast enough.
Making them more expensive won't change that. 
Increasing the money supply hasn't increased supply.
We don't have the people to build them using our Dickensian construction methods.
We can't get the planning approved using our byzantine planning structures.  

It is idiotic to think that throwing more money at that will solve it. It doesn't work for the Health Service and it won't work for the housing sector.


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## T McGibney (16 Feb 2022)

Purple said:


> Okay, I didn't say otherwise. but you agree with that so why the smart This post will be deleted if not edited to remove bad language remark below?


I made no "This post will be deleted if not edited to remove bad language" or other smart remark.



Purple said:


> How many people have sold up because the price of their house has gone up? Do they then live in a tent or a camper van?


I know hundreds who have done so. The town and region where I work is full of such people, who typically sold in Dublin, bought in East Cavan and banked a profit. I know others who emigrated and only sold up when property prices improved. And others still who sold and moved back home.

Do you really know nobody in any of these cohorts?



Purple said:


> It is idiotic to think that throwing more money at that will solve it. It doesn't work for the Health Service and it won't work for the housing sector.


Red herring. I haven't mentioned throwing money at anything.


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## Purple (16 Feb 2022)

T McGibney said:


> Either you're trolling or you haven't the first clue about economics.  It's a truism that taxes on an activity disincentivise that activity. And a tax on land hoarding will clearly disincentivise property development as it's impossible to be a property developer without some level of land hoarding.


You're having a laugh here, right?
You say that taxing an activity will disincentivise it and then you say that a tax on land hoarding will not free it up. To be clear, those who hoard the land and those who develop the land are not the same people. The developer buys the land and develops it as fast as they can. 


T McGibney said:


> If you're prepared to claim that people don't sell houses because their prices have gone up, I'm only wasting my time here, sorry.


If you think that people sell their homes simply because the price has gone up then I'm wasting my time.


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## T McGibney (16 Feb 2022)

Purple said:


> If you think that people sell their homes simply because the price has gone up then I'm wasting my time.


We clearly both are.


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## Purple (16 Feb 2022)

T McGibney said:


> I made no "This post will be deleted if not edited to remove bad language" or other smart remark.
> 
> 
> I know hundreds who have done so. The town and region where I work is full of such people, who typically sold in Dublin, bought in East Cavan and banked a profit. I know others who emigrated and only sold up when property prices improved. And others still who sold and moved back home.
> ...


I know people who have downsized because they have retired. I know people who have up-sized because they have more kids. I don't know anyone who sold only because the price went up. That's a nonsensical proposition. 


T McGibney said:


> Red herring. I haven't mentioned throwing money at anything.


You keep talking about increasing prices as if it will increase supply.


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## T McGibney (16 Feb 2022)

Purple said:


> I know people who have downsized because they have retired. I know people who have up-sized because they have more kids. I don't know anyone who sold only because the price went up. That's a nonsensical proposition.





Purple said:


> You keep talking about increasing prices as if it will increase supply.


I thought you said you were wasting your time here? 

Anyway, I'm done here.


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## Purple (16 Feb 2022)

T McGibney said:


> I thought you said you were wasting your time here?


No, I said if you think that people are selling simply because their house price has gone up I was wasting my time. 
It seems you do. Wow. 


T McGibney said:


> Anyway, I'm done here.


You've shown an amazing ability to not understand the issue so perhaps that's for the best.


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## T McGibney (16 Feb 2022)

Purple said:


> No, I said if you think that people are selling simply because their house price has gone up I was wasting my time.
> It seems you do. Wow.


We all know people who sold houses and other assets because they were offered amounts that they couldn't refuse. It beggars belief that you can deny that this phenomenon even exists.



Purple said:


> You've shown an amazing ability to not understand the issue so perhaps that's for the best.


You and me both so.


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## Purple (16 Feb 2022)

T McGibney said:


> We all know people who sold houses and other assets because they were offered amounts that they couldn't refuse. It beggars belief that you can deny that this phenomenon even exists.


So they were perfectly happy where they were until someone called to their door and offered them a big wad of cash to sell up? 
Or where there other factors which drove the decision?


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## Purple (16 Feb 2022)

With reference to taxing zoned land as a way to get it back into use, from the article which started this thread;


> Dereliction, often seen as a problem of poverty, is in fact a problem of wealth. Land is an asset and only the truly wealthy are rich enough to let an asset go to waste. Once we appreciate this slightly counterintuitive logic, things become easier. Bringing these properties or sites back to life involves encouraging good behaviour, which demands accurately identifying the buildings and then encouraging development. The site must be taxed to bring the property or the asset into use and to prevent hoarding by making hoarding expensive.


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## T McGibney (17 Feb 2022)

Purple said:


> With reference to taxing zoned land as a way to get it back into use, from the article which started this thread;





> Dereliction, often seen as a problem of poverty, is in fact a problem of wealth. Land is an asset and only the truly wealthy are rich enough to let an asset go to waste.



Easy to see that McWilliams hasn't been down the country much since Covid hit. Practically every small town and village has derelict and rapidly depreciating properties and the surrounding countryside has neglected and underutilised land. Allowing for a few exceptions here and there, it's a reliable rule of thumb that the further towards the west and north-west that you go, the worse this problem gets.  And the problem is getting worse all the time.

Only someone totally out of touch with this reality of this decline could see it as a byproduct of true wealth.  It is more often a byproduct of the sort of dysfunction described here:  https://www.askaboutmoney.com/threa...ciaries-unwilling-to-complete-process.226485/


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## Purple (17 Feb 2022)

T McGibney said:


> Easy to see that McWilliams hasn't been down the country much since Covid hit. Practically every small town and village has derelict and rapidly depreciating properties and the surrounding countryside has neglected and underutilised land. Allowing for a few exceptions here and there, it's a reliable rule of thumb that the further towards the west and north-west that you go, the worse this problem gets.  And the problem is getting worse all the time.
> 
> Only someone totally out of touch with this reality of this decline could see it as a byproduct of true wealth.  It is more often a byproduct of the sort of dysfunction described here:  https://www.askaboutmoney.com/threa...ciaries-unwilling-to-complete-process.226485/


A very small proportion of the properties in this country are worth €100k or less. 
The derelict properties in the places people want to live are, obviously, what is being discussed.


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## T McGibney (17 Feb 2022)

Purple said:


> A very small proportion of the properties in this country are worth €100k or less.


Patently untrue. Talk to any estate agent an hour or more outside the M50. And land even in remote areas, and middling at best for agriculture, is routinely going for over €10k an acre. But very little of it is being sold. If any significant volume of it went on the market at any one time, market values would collapse. The current use value of much of it is trivial.



Purple said:


> The derelict properties in the places people want to live are, obviously, what is being discussed.


Selectively untrue.  The town where I'm based, Virginia - five minutes from a motorway and an easy 45 minutes from the M50 - is littered with derelict and decaying properties and also has a serious shortage of housing relative to demand. And runaway rents and property prices.


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## Purple (17 Feb 2022)

T McGibney said:


> Patently untrue. Talk to any estate agent an hour or more outside the M50. And land even in remote areas, and middling at best for agriculture, is routinely going for over €10k an acre. But very little of it is being sold. If any significant volume of it went on the market at any one time, market values would collapse.


Okay, so I said that a small proportion of properties were worth less than €100k and you answered telling me the price of land.

I've argued that a site value tax would discourage land hoarding and thus reduce land costs. You've argued against that but now in relation to land prices you say that "_If any significant volume of it went on the market at any one time, market values would collapse_".


T McGibney said:


> The current use value of much of it is trivial.


And the current cost of doing nothing with it is trivial. Therefore nothing is done with it. Tax it so that the cost of doing nothing is higher than the cost of doing something. 



T McGibney said:


> Selectively untrue.  The town where I'm based, Virginia - five minutes from a motorway and an easy 45 minutes from the M50 - is littered with derelict and decaying properties and also has a serious shortage of housing relative to demand. And runaway rents and property prices.


You are arguing in favour of McWilliam's point and in favour of a site value tax.


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## T McGibney (17 Feb 2022)

Purple said:


> Okay, so I said that a small proportion of properties were worth less than €100k and you answered telling me the price of land.



I didn't. I answered and then I mentioned the price of land separately, explaining how it's overvalued.



Purple said:


> I've argued that a site value tax would discourage land hoarding and thus reduce land costs. You've argued against that but now in relation to land prices you say that "_If any significant volume of it went on the market at any one time, market values would collapse_".
> 
> And the current cost of doing nothing with it is trivial. Therefore nothing is done with it. Tax it so that the cost of doing nothing is higher than the cost of doing something.



The State and the EU decided decades ago that it's better from an environmental viewpoint not to have it fully utilised. I don't see the logic of taxing it to generate a different outcome.


Purple said:


> You are arguing in favour of McWilliam's point and in favour of a site value tax.


No, I'm not.  I simply don't believe it would work. I'm generally highly sceptical of the idea that higher or new taxes stimulate economic activity.


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## Brendan Burgess (17 Feb 2022)

Folks we should be able to have a discussion on important topics without insulting each other.

I have deleted the last few posts.  I am not going to read the entire thread to see who started it. 

If someone makes a personal comment in future - please just ignore it in your response or if you are offended, report it.

Don't respond in kind.

Brendan


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