The problem with charging below market prices for anything is that it necessarily leads to a mismatch of supply and demand. So the question is how do you allocate that supply?
One way is to have hidden costs. This could range from straight up bribes, to paid consultants to fill out a lot of forms or talk to the right people, to just knowing someone
Another way is a lottery which benefits a tiny percentage of people. Sure it's "fair" but the incentive to rig it is huge
But even with a lottery it's still inefficient. If you give someone an apartment with a market rent of 4k for only 1k you're effectively giving them a 3k apartment subsidy. But if you handed them 3k, maybe they would spend 1k dollars on extra apartment and 2k for something else.
There are other distortions. Overall these are the worst kinds of policies because it's all hidden costs. If we realized that with a system like this we're giving 1 out of 1k eligible people the equivalent of a 30k a year transfer, we'd likely realize it's a ridiculous policy. But instead we just say how nice it is so and so is paying only 600 Euros to live in the center of Paris
I used to think like you but no longer do. A city NEEDS to have people of all ages, backgrounds, income levels etc in it to not die. Yes those people who live in that most central subsidized housing are in some ways winning a lottery ticket, and the real policy is to build a lot more housing as close to the city as possible. But Paris are doing that! AND adding new public transit etc etc. This multifaceted approach is better than just sterile economista policy. Vienna does it very successfully as well. Almost no one owns their home there, they're all renting very cheaply very high quality beautiful homes, including inside and very close to the city.
Interesting, so to put this in market terms, the city is allowing the value that such people add to it to be offset against the cost of their rent. This would mean that cities like Paris choosing to do this is entirely rational and GP's calculation fails to reach this conclusion because it ignores the actual trade that is being made in these cases?
Or to make a clichéd example: being cool and arty isn't particularly rewarded by salaries because there are a limited number of opportunities for this to improve a company's profitability. But it can be rewarded by subsidised rents because people prefer to live in cities with a population of cool and arty people for the non-monetary benefits they bring to that society.
> But it can be rewarded by subsidised rents because people prefer to live in cities with a population of cool and arty people for the non-monetary benefits they bring to that society.
Well, some people do. But everyone is paying for it, even if they'd rather save.
If the value your espousing is, "No one should ever pay to have others live better than them off a livelihood that they don't support," a great portion of the remainder of America's middle class gets Thanos snapped. A lot of the decently-paying jobs in services, tech, etc. that these communities rely on essentially make the world a worse place, but they're profitable, and people gotta eat.
> A lot of the decently-paying jobs in services, tech, etc. that these communities rely on essentially make the world a worse place, but they're profitable, and people gotta eat.
If those jobs are paid for by voluntary customers, then that's fine. If they're subsidised through taxes of people who don't want them, that's the issue I'm mentioning.
there is no job on this planet that isn't subsidized by taxes
how do people show up to work at Google, Apple etc?
through everything from "not dying from preventably disease in adolescence" to "being educated in public schools" to "being carried to work on roads and transit paid for by the public"
That depends on the city. If it was originally a company town, probably the company. If it's a new build, probably the property developer. But either way, something that already exists is not subsidising the plumber's salary. The plumber is paid by the customer.
Anything built post-GD (which is going to be the vast majority of what you service) was likely touched by government subsidy in some fashion, whether grants, loans, or municipal bonds (tax-exempt, so effectively a subsidy). "Company towns" built before then were often subsidized, in effect, by companies not having to bear the financial burden of their many, many instances of illegal or rights-infringing behavior.
That's not considering your customers, who are likely also subsidized by the government in some fashion - if their jobs do not involve federal or state government contracts or supplying or servicing companies holding such contracts, they're almost certainly taking advantage of advantageous tax rebates or deductions.
You could equally say that tax money is all private money, so really it's all private. It's silly to talk about the provenance of money in these topics.
I guess ideally people who live in the city pay for such subsidies through various municipal taxes. People who do not value this policy and choose to live in a different city that aligns with their values would not pay for it. Everybody gets what they want.
I live in Southern Europe. A lot of the people I talk to (about half I would guesstimate) would rather live somewhere else but can't. Some would even prefer to move to a cheaper place but can't (work, elders, kids, mortgages, are some of the reason).
> People who do not value this policy and choose to live in a different city that aligns with their values would not pay for it. Everybody gets what they want
Well, not necessarily. People stay for jobs, family and friends. They will just pay for something they're not bothered about if it's not so expensive they're forced to move. That doesn't mean them staying is anything to do with the thing some people want.
I mean, OK, you could say the same about literally every public expenditure?
I'm passionately opposed to private automobiles and the fact that my tax money goes to subsidizing them (including stupid road upkeep etc)
unfortunately I don't get to choose not to pay for that (but I can choose to live in a place like Paris where the Mayor is taking active steps to support not only private automobiles but give equal importance to other modes of transport)
Yeah because you ardent motorists care so much about emergency vehicle access right?
I don't have a problem with roads, I have a problem with roads being gridlocked and destroyed by single occupancy private automobiles and the resulting unnecessary deaths and road upkeep.
You need to be able to speak without classifying people into groups. I'm not an ardent motorist. I don't think it's good to allow myself to be indoctrinated into any of the (frankly bizarre) transportation-obsessed groups that exist.
In general, I'm against govt interventions like this, but in the case of housing, I agree with you. For a society to function in a healthy way, it can't be divided in social class "gettos". It is the responsibility of the State to spend public funds to avoid that. This is not about fairness and equality. It's about the long term survival of a society.
Even further: extremely affordable technology now exists such that the leaders of our "democracies" could ask the public's opinions on such matters in a wide variety of fine-grained ways, or even better: facilitate a high quality moderated public conversation that actually involves the public on these and other matters. This may even be a requirement for a healthy society.
Unfortunately, current styles of "democracy" not only do not do this, they instead engage in deceptive propaganda to make it appear like they do this and more (how you can tell: observe how people praise "democracy", based on clearly silly memes). I often wonder if the quality of these institutions in an absolute sense (as opposed to a relative comparison to literal fascist dictatorships, the only other option dontchaknow) may have something to do with some people thinking they should be eliminated and replaced, a sentiment which is always and without exception represented as being dumb/etc.
Note also that these institutions also control school curriculum, which "denies" the public the skills needed to realize any of this is going on, how utterly riddled with error and deceit/delusion the public conversation is, etc.
take how Hidalgo is deprioritizing private automobiles on the streets of Paris
most of the public was passionately and intensely opposed to that, but she did it anyway
now, people can't imagine ever going back to how it was before - families being able to walk and ride bikes along the Seine and Rue de Rivoli is too nice
= asking for peoples opinion on stuff in lots of cases is just going to result in locking in status quo because people don't really know what they want, but they're usually pro status quo and opposed to change
It depends how you do it. For example, if you ask their opinion and then carry out that opinion without thinking about it, it would probably not yield optimum results, because humans almost always hallucinate (our culture teaches them this behavior). But with patient guidance I believe it is possible for people to improve over time.
As it is, we are at the mercy of bureaucrats with questionable ethics and goals, who also also always hallucinate (again, because of culture), so this is not a fantastic position to insist on maintaining either.
It has been well demonstrated that under very specific conditions, humans can achieve a state of high coherence. We've only managed this in a few select domains so far, because of hard work and counter-cultural attention to detail, and mainly: because a few individuals thought it seemed like a good idea, and made it happen against the odds. I personally think we can make it happen again, but not if no one tries.
> now, people can't imagine
Not quite. In fact, people cannot stop imagining, the problem is that they do not have control over it, or realize they are doing it. But we are in luck: we have children and teenagers, who have yet to fall victim to the hypnosis/Maya that has spread throughout the adult world. They could teach adults how to do it in a controlled manner, as we could in the past, or ideally even better (children and teenagers have never had enough say in decisions if you ask me, they are waaaaaaaay better than adults at specific forms and domains of thinking).
> asking for peoples opinion on stuff in lots of cases is just going to...
Local democracies on housing questions are extremely consistent the world over: no more people near me. If there absolutely must be more people near me, they better be exactly like me.
I agree. But then on the other hand, there is a wide variety of ways that can be brought to bear to "encourage" humans to change their minds.
Alternatively, we could [1] consider waking up for even a short period of time and put some mental effort into considering whether our most sacred operating system may not actually be what it is advertised (and thus: believed) to be.
Is it not rather funny that thousands of incredibly smart programmers, systems analysts, etc are not able to even consider whether the system that controls our lives and well being, not to mention the literal continued existence of many thousands of innocent people throughout the world could maybe be substantially improved?
Day after day we engage in the pointing of fingers, funny how the fingers never get pointed at ourselves.
[1] Well, I am speaking a bit loosely: the laws of physics in this environment support it, but that does not guarantee that it is completely supported.
Massive quantities of evidence exist demonstrating that human beings have at least some capacity to believe that they have concern for the well being of other humans.
Prime example: do you remember that big pandemic a few years ago? Do you remember how passionate most people were that everyone should go get their vaccinations, to protect each other? I sincerely think that these people genuinely believed that the feelings they were experiencing were sincere, and human belief even if non-genuine is an incredibly powerful force, maybe even the most powerful of all forces.
The charitable impulse in municipal housing politics gets you a cluster of tiny trailer homes on a parking lot surrounded by a 8 foot fence in an industrial part of town far away. Maybe, if you are feeling especially magnanimous, a servant’s outbuilding in the shadow of your house.
It’s not in human nature to give charity that would elevate others to the same or, God forbid, higher status as compared to the benefactor.
Wherever a young person, newcomer, or upstart has a reasonable chance of attaining what the incumbents enjoy, you’re probably going to find them taking it through market competition, not having it allocated to them by a vote of the incumbents.
Well, they don't live there, but they spend probably 10 hours/day there, or 60% of their waking hours. Where someone sleeps doesn't seem too important.
I would say what a person does with their life outside of their working hours is rather important actually, particularly when we're talking about the life and culture of a city.
Isn't it practically the same in Oslo, with rent control?
And I don't know about Zurich, but Monaco is clearly dying. Luckily they can build on the sea (and do so), but it suffered greatly from covid and Russia invasion of Ukraine, as without the Russian mob, a lot of 'amenities' aren't as available, which slow the 35yo+ fratboy life.
I don't get it either. Cities were dying for decades until people with money decided to move back into them and then they began to thrive. In fact, the actual data shows that as a city becomes more expensive it becomes more desirable and attracts more people and the city begins to grow. Places that were once considered off limits become spaces that are coveted. It's a flywheel that brings more and more prosperity. The best way to ruin that is to introduce masses of poor people to these areas. We did this in the starting in the late 1950's and the cities began to empty out because of the crime that came with it.
As the poor constituency builds greater numbers they attract politicians that promise them things by stealing from those with money. This in turn chases those people away and the city is left poorer and poorer and becomes worse and worse. Once nice areas become undesirable and decay sets in.
Are you suggesting there's a strong correlation between the number of low-salary workers living in the city and the presence of the Louvre or the Centre Pompidou?
Are you suggesting that nothing of cultural significance has happened in Paris since the Louvre opened as a museum in 1793? Or that Paris's culture can be reduced to a set of buildings?
>Are you suggesting that nothing of cultural significance has happened in Paris since the Louvre opened as a museum in 1793?
No; I'm not suggesting anything of the sort. In fact, that seems like a fairly strange statement given that I mentioned the Centre Pompidou (opened in the 1970s) in practically the same breath.
>Or that Paris's culture can be reduced to a set of buildings?
No; again, not sure where that's coming from.
My point, which you didn't address at all, was that you seemed to be implying that there was some kind of correlation between lower-income housing in cities and their cultural significance. Was that your goal? If so, can you explain further?
In a sentence: artists are poor. Hence the correlation. You can see this on a smaller scale with neighbourhoods in a given city. The culturally cutting edge neighbourhoods of NYC aren't the ones where all the rich people live.
Suppose you get a job offer, or your adult child has a newborn, or your aging parent's health takes a turn for the worse. Instead of being able to simply move, this instead starts a decade-scale process that has a 1% of chance of allocating you a public housing unit in the end. What does that do for dynamism?
People's intentions about when and where to move are important. A housing system that removes all individual agency from this question, abdicating everything to a government lottery/waiting list system, can meet other desiderata but is clearly losing something important.
Ok,think of the politician you dislike the most. Now imagine the discretion of "people of all ages backgrounds income levels etc" would fall to his or her purview to decide. Would you still support the system?
We should have a clear objective system of governance that allows even terrible people to oversee it
> Now imagine the discretion of "people of all ages backgrounds income levels etc" would fall to his or her purview to decide.
How much room for discretion is there actually in promoting diversity? I suppose you could forcibly break up poorer immigrant communities which would be pretty harmful.
It's simple, there are laws in the US that state that you cannot discriminate based on sex, religion, nationality, race, etc. if you would want to allow certain programs to help certain groups based on those characteristics you would have to lift those laws.
So I've thought about this before because the city I'm in has received the same critique. I'm in a 200-something thousand population city that's carrying a billion in debt, so about 5K EUR per inhabitant. Given your numbers that's pretty much about the same amount of city debt for each Parisian.
Big number scary, but looking at it on a per citizen basis is it really that big, or unreasonable a number? Assuming that this debt has been spent rationally on say infrastructure, social housing policies, QoL upgrades for xyz?
Yes, good fiscal policy to keep debt stable or reduce in the long term is necessary, but it sure doesn't seem as doom and gloom as people make it out to be.
You should see how much debt some countries are in... It's an order of magnitude more in the extreme cases.
It entirely depends on how the money is spent. If Paris is making investments that will enable it to substantially grow its tax base, it's a good prudent strategy, certainly better than the supposedly more fiscally responsible do-nothing strategy that can just as easily lead to financial ruin as irresponsible drunken-sailor spending.
> If Paris is making investments that will enable it to substantially grow its tax base
Obviously, this is not what they are doing, debts growing with quite high tax rises at the same time ("taxe fonciere" [property tax] doubled last year).
Paris is often depiected as a great model, especially by liberal foreign media, but the reality is rather different, and I believe that the Mayor's approval rating is currently abyssmal...
Not at all obvious. What is obvious is that returns on many investments, such as vastly improving housing and transportation for city residents, have multi-year lags. Like, obviously when you just spent billions on improving your RER, properly redesigning your streets to not be deadly by design anymore, and buying up housing, you'll be in the read that fiscal year.
>"taxe fonciere" [property tax] doubled last year
My French is rusty, but it was a 50% increase, it was previously the lowest of all cities in France, and it was not raised since 2011[0]. It is also peanuts compared to property taxes in Canada where I live, and especially compared to many parts of the US. Not an apples-to-apples comparison because property taxes pay for different things in different countries (i.e. in Canada provincial taxes pay for schools, in the US it comes out of your municipal property taxes). But still, we're not talking about one of the main taxes for an average French citizen, clearly.
You highlighted no facts, actually. The one fact was off by a factor of 2 and missing all context. What you call "nitpicking" is in fact the process of forming an opinion using facts and context. You could offer valuable insights, presumably being a Parisian, but instead you switch topics to beggars and crime. Oh well.
Debts ballooning and tax skyrocketing are facts. Everything I wrote are facts except of a small error in number but of course you chose to argue that the tax rise was 50% not 100% like if that made a difference to the point.
As I mentioned, rose-tinted glasses can be very strong, especially in people who have no insight but are looking for ideological reinforcement because, frankly, articles about how great Paris is in the NYT only serve that purpose, the readers will not know a thing about the actual situation.
Why does everybody need to concentrate in huge cities?
If Romans where able to relatively evenly spread their towns and population all over the place in the analogue age, then why aren't we able to do so in the digital age?
While being "huge", good European cities are quite homogenous throughout most of the area with 4-6 floor apartment buildings, small businesses in almost every building, parks, schools, good public transport system.
They don't feel exactly "huge".
The principles would be the same even if we concentrated on small cities. A city must promote social diversity to grow the quality of social interaction (even indirect interactions, like walking through a neighborhood built by different ideas and in different styles).
If you agree the city dies without people of all ages backgrounds and income levels what is your alternative proposal to subsidized housing. It's just a fact that some income levels are being priced out of the city and certain occupations may become entirely unavailable without some mechanism of solving that gap.
Building more types of housing. It's simple - allow people to build, allow denser construction, allow smaller apartments, etc. Hell most of NYC would not be allowed to be built today because the apartments are too small -- yet these are the most desirable areas...
Either you willingly misunderstood my comment, or you are so absolutist in your thinking that you're incapable of understanding the concept of a limiting principle in social policy.
Whoa whoa, dude. You're being unnecessarily hostile. GP's question was a fair one, and not (by my reading) unkindly phrased. Even if I'm wrong about that, personal attacks aren't welcome contributions: flag and move on.
I get these arguments against it and I'm sympathetic to the reasoning, but the point of public policy is results and the Parisian policy certainly seems to just work better than most US housing policy. SF, Boston, NYC also spend a ridiculous amount of money ostensibly trying to achieve similar outcomes but their approaches just don't work.
Paris housing works better than SF, Boston, or NYC because it is much denser, not because of public housing. American cities artificially limit density which drives up prices as everyone wants to live in the high demand area that cant densify.
Afaik 30% of all new luxury high rises are made low and middle income affordable and rent stabilized. In which ways is the NYC system inefficient? Do you believe that is due to policy, abuse by bad actors or some mixture of the two?
NYC is wildly unaffordable compared to Paris even accounting for the earnings differences. That is the outcome and the failure, not the presence or absence of some specific policy.
I am not saying Paris' approach is transplantable directly to NYC, but rather that first principle analyses (such as gp's commentary) that say that the Paris approach doesn't work are flawed. I know these analyses are flawed because one can look at Paris and see that they have achieved their policy objective of Paris being affordable for a wide swath of incomes.
Policies should be pursued, adopted, changed etc based on their outcomes above their adherence to abstract models. Models are great but once you have data that a policy has failed you should change that policy and try something else.
When someone rents a small apartment in the center of Paris for 4k on the private market in all likeliness they're paying more than 3k of pure rent profit to the owner.
The rent can be levied by the owner however the owner actually did not provide any of the investment or labor required to give the apartment the value it has. The apartment has value not because of anything inside the apartment or the building. It has value due to its location, something that the owner has no control over and did not spend a single penny to make more attractive.
This is obviously a huge inefficiency in the economy. Why should someone profit from the attractiveness of a location they haven't actually built? This is a positive externality.
Part of the solution of our huge housing crisis across most developed cities is obviously that there should just be more housing. This would bring prices down overall. However, new construction is extremely difficult, and that is due the in part to lobbies of wealthy owners which seek to keep prices high by maintaining scarcity.
Turning private rent housing into public housing is a good way to eliminate the economic inefficiency of rent in that one case and it also drives the price of nearby housing down too, as the private market has to compete with the public offering.
You've left out a few things the landlord does and the risks they assume (at least here in the USA, I'm not sure about Paris):
- mortgage costs
- property taxes
- insurance
- utilities
- repairs
- maintenance
- savings for large future capital outlays (new roof, furnace, etc)
- renters not paying
- empty rental units
- loss of investment opportunities of the capital locked up in the building
- possible loss of all income due to fire, etc
- 34 other things I'll leave out
It may look like landlords have it easy but as a former commercial landlord I can tell you it is not easy at all.
> It has value due to its location, something that the owner has no control over and did not spend a single penny to make more attractive
To be fair, the owner is paying property taxes - which do go towards improving the location.
> The apartment has value not because of anything inside the apartment or the building.
I think you'll find, in basically any city, that the quality of a building does correlate to it's rent price or value. You'll also find that owners do invest in increasing the quality of their buildings, which does improve the value or "niceness" of the location. If this wasn't true, gentrification couldn't exist.
> Why should someone profit from the attractiveness of a location they haven't actually built?
If you're claiming that since no real identifiable person or group "built" the attractiveness of a location, and that therefore no one should get to profit from it, you'd be seriously tampering with the signal that the natural markets supply/demand provides in the form of rental prices. That's going to lead to some significant "economic inefficiencies" for the area in the medium to long term.
Market prices rarely (almost never) consider externalities - situations like this where it is a societal decision, it is difficult to define what we want, much less define a objective function that the market prices can optimize on.
Case in point - congestion pricing
I prefer excess housing / school / living infra which is subsidized by the society
If the goal is to have a diverse economic mix of people to live in a city center, then let the results speak for themselves. If another city has the same goal and can achieve a better result with less resources then that’s worth considering.
The “they haven’t thought this through all the way” mantra you’ve espoused might be true. Also maybe you’ve not thought it all the way through. Maybe that has been tried and doesn’t work well for reasons. For example if you increase the flow of money into a market without increasing supply, prices tend to rise and the wealthier will absorb the rise better than the poorer. As you’ve helpfully pointed out, there are knock-on effects, however those effects don’t just apply to one side.
So that’s why I advocate for aligning and judging success on the goal and comparing like to like.
And yet Vienna is one of the most beautiful, livable cities in the world, with its masses of public housing, while major U.S. cities have homelessness crises and TV shows about house flipping for profit. Perhaps we should stop debating things based on the hokum of Econ 101 textbooks and look at what in the real world has actually worked (e.g. abolishing most forms of zoning, massive investments in public housing, robust public transportation, drastically curbing real estate speculation).
Vienna has had the luxury of having had relatively little demand for housing for over a century. The population peaked in WWI and still hasn't recovered (it was 2.24m in 1916, 2.00m in 2023).
vienna also had a lot of buildings destroyed in the war which increased the demand. population was as low as 1.5 or 1.6m in the late 80s/early 90s. it grew back to 2m in just a few decades, and it is going to continue to grow, so i'd argue that it has recovered quite well.
Right, that makes a lot of sense because the city absolutely exploded during the preceding decades. But having the population stagnate has certainly made it easier for them to catch up than if the population had kept increasing.
Manhattan's population dropped 25% from its peak in the early 1900s. Pre-war was just a different era, this is more of a function of changing living standards, people live larger, not of contemporary housing dynamics.
The US also has a per capita GDP 50% higher than Austria ($52,131 vs $76,399). At $52,131 a year per capita GDP, Austria would be neatly in second to last place as the poorest state in the Union, as it would beat Mississippi at $47,190 but be beaten by West Virginia at $53,852. So perhaps the US policy is doing something correctly.
A more relevant measure might be median income per capita/household, adjusted for purchasing power. On that basis Austria does quite well.
Additionally, quality of life amounts to more than measures for disposable income etc. If you consider access to education and healthcare the picture might take on greater depth.
How is GDP per capita relevant, especially not adjusted for purchasing power parity? For Austria the GDP per capita PPP is at $67-69k depending on the estimate, which would put it somewhere between 27 and 33 place of US states, so roughly in the middle.
If you compare the Quality of Life Index, Austria is 9th, USA is 15th. Freedom Index - Austria is 93, USA is 83. HDI USA is 20th with 0.927, Austria is 22nd with 0.926. Another fun one is Cost of Living index which shows that Austria is significantly cheaper to live in compared to the US (66.8 vs 72.9 out of NYC).
I can go on, but it's frankly ridiculous that you think GDP per capita is relevant, or somehow directly impacts the lives of Austrians and invalidates the good choices Austria and Vienna have made.
I don't think most indices are very valuable - when you drill down into them, you usually find out there's a lot of decisions about what that really means made for you by some NGO or think-tank in order to get the desired result. That's not to say they still can't reflect some underlying true reality about "freedom" or whatever to some degree, but I don't think it's worth citing them in a discussion.
You're quite correct he should have used GDP w/ PPP, but I don't think the fact that Austria would rank merely below-average rather than second-worst is a very powerful argument. And there is some truth to this: visit the average American household and they have a lot of material wealth compared to the average European. I remember being particularly shocked by the state Germans live in and find acceptable.
> You're quite correct he should have used GDP w/ PPP, but I don't think the fact that Austria would rank merely below-average rather than second-worst is a very powerful argument
It is, because they were implying that Austria having the social housing policies that it does, it severely impacts GDP; but it doesn't. A tiny mountainous country that was twice in the middle of disastrous wars in the last century, has practically no raw materials... and would be in the middle of the US GDP PPP-wise, which has a much bigger market, a lot more workers, a lot of raw materials, etc etc etc etc. And again, this is assuming GDP matters for the average person's life... and it doesn't.
> visit the average American household and they have a lot of material wealth compared to the average European
At the expense of crippling debt :) https://data.oecd.org/hha/household-debt.htm (don't forget the fact that American savings have to account for losing your job or getting sick, as well as retirement, while in Austria they don't).
> A tiny mountainous country that was twice in the middle of disastrous wars in the last century, has practically no raw materials... and would be in the middle of the US GDP PPP-wise, which has a much bigger market, a lot more workers, a lot of raw materials, etc etc etc etc.
Austria got screwed by WWII for sure, but it still had a literate, educated, relatively wealthy population and was once the center of a great empire that amassed great wealth. And, I mean, Vienna was practically the cultural center of Europe for a brief period.
> At the expense of crippling debt :) https://data.oecd.org/hha/household-debt.htm (don't forget the fact that American savings have to account for losing your job or getting sick, as well as retirement, while in Austria they don't).
I'll be the first to argue that the American safety net needs improvements, but Social Security, (retirement and disability benefits), Medicare (65+ government health insurance), Medicaid (poor, unemployed, and disabled health insurance), and unemployment insurance all exist in the US, and together with other benefit programs constitute the majority of US spending. Indeed, US government spending per capita on health care is higher than many European countries. It'd be a good example of where having a higher nominal dollar value doesn't buy as much even adjusted for PPP, since obviously despite this the US doesn't have universal public health care.
This is considered uncouth to say, but household debt is sometimes due to horrible exigencies, but it's much more often the result of easy access to debt and material consumption. It's really shocking to see the people you know cannot be making more than 40-60k driving around 50-70k vehicle, and who also have a nice boat and a huge house. But even people not doing these things tend to live more materially comfortable lives than most Europeans I know.
GDP Per capita isn't pa particularly good metric, but it is a measure for how productive a country is. So when the original poster laments that Vienna has this model of subsidizing housing while the US needs to "get rid of econ 101 hokum", I think it does do a good job as showing that for their differences, the US does do a good job at things (creating economically productive value in this case).
I have worked for some time in Austria and I have many friends who are US citizens.
While the latter have indeed revenues that seem much higher, I would say that there is no doubt that the quality of life of my former Austrian colleagues was higher, based on purchasing power, balance between job and personal life and quality of food and environment.
I look at the numbers and think they demonstrate how much more efficient Austria is compared to any US state. I would prefer living in Austria to Mississippi.
Less than 5% of households in Austria have air conditioning, vs 93% in Mississippi. Granted it gets hot and humid in Mississippi, but the average summer highs in Austria is a sometimes-muggy ~27C and it will probably get worse with climate change - heat waves up to 40C have already happened. I'll take the AC and the other conveniences the Americans have, though it would be nice to have the social atmosphere Austria has too. To a large degree, Austrian efficiency is just getting by with less than an American does.
European lack of AC is mostly that they historically haven't needed it. It's not like they can't afford ACs. Also, 27C (80° in freedom units) as your normal peak temp is pretty firmly in "why bother with AC" territory.
This is one of those things that are harder to compare. Mississippi, like all of the US, has free public K12 education. The public university system also extends automatic full scholarships for academically qualified (and the qualification is not that high) students, and also admits basically anyone else who is able to pay, though without academic qualifications they will have to take advantage of Pell Grants (free money but not much) and federal student loans. Of course, you could argue about the results of the system, and admitting students who are not going to succeed in college and thereby saddling them with debt in exchange for nothing is a failing of the US system.
For health care, there are many publicly owned hospital systems in Mississippi, and of course Medicare is available for everyone 65+. Mississippi is not a Medicaid expansion state, so while Medicaid (free health care) is available for children, pregnant women, and the disabled, there is a coverage gap between that and qualifying for the ACA subsidies for health insurance (aka "Obamacare") which is sort of similar to the German system if you wave your hands; I think Austria has something similar, but I'm not familiar, but obviously the coverage is broader.
Only an American could make this argument. Vienna tops global comparisons for quality of life all the time. Life expectancy is higher in Austria, as are safety, education standards and all other meaningful indicators.
Who cares about some silly numbers on a bank account? We live good lives.
To be honest West Virginia is the best US state (I also am close with back to landers communities, and visited through their lenses, so I am biased). Homemade booze (I don't drink, but still), homemade goat cheese (best cheese I had in the US), best kayaking rivers, great hiking trails, great people, great horses, great musicians. What's not to love.
If you used housing prices an an indication of desirability (and an attempt to stay on topic) people much prefer to live there than the smallish mid-western town that I bought a house in.
I mean, trees and mountains instead of miles and miles of corn...
Allocating public housing could be done through an auction system. Bidders would submit offers for annual rent. The surplus, after deducting costs, could then be allocated to buying or building additional housing for this program. Alternatively, it could be used directly to subsidize rent for low-income individuals.
In the end, this would solve the allocation problem while maximizing the available public housing. It would take a couple of years or decades to reach an equilibrium state I guess.
I'm probably missing something obvious here. Can somebody point out my mistake?
A developer charges as much as they can for their rental units. If profitable they take that surplus and build new units up until the point that the marginal cost of providing an apartment is equal to the marginal revenue for renting such a unit. This isn't due to benevolence but how you maximize profit. The developer also pays taxes which pays for public services
The problem with this so called 'market system' is it allows people to chose their neighbors through bidding only on properties they know the poors can't afford.
If the French wanted citizens to have the freedom of (dis)association they would have written it into their constitution.
Basically, you’re assuming that this system is going to be like the underfunded and scarce public housing in the United States where a difficult to win lottery will be necessary to secure an apartment. In that sort of market of scarce supply, slumlords can overcharge for low quality rentals. But they couldn’t do that in a market where the government is offering a real alternative that you can actually get into. From the article it seems like the Parisian government has such a large supply of public housing that it is a serious market force that can influence the rest of the city and the makeup of its neighborhoods.
Your description of the situation sounds more like America where a tiny inventory of antiquated public housing units built ~40 years ago (the last time any American politicians cared to lift a finger to address poverty and inequality) are made available by a bleak lottery.
Just because the public housing system doesn’t work in America where it’s basically an afterthought doesn’t mean that it isn’t working in other places.
> For many New Yorkers, the most desirable jackpot is not the New York Lotto, but to be selected in the city’s extraordinarily competitive affordable-housing lottery. Tens of thousands of people, and sometimes many more, vie for the handful of units available at a time. Since 2013, there have been more than 25 million applications submitted for roughly 40,000 units.
Central planning has been tried over and over and has failed and led to more scarcity. It's like fitting climate change by regulating thermometers. Maybe this time is different?
Yes if you support 40,000 units and your demand is much higher you're going to have problems. That tells you the system is underfunded. Central planning hasn't universally failed in every aspect and every application. Central planning tends to do poorly at solving problems that market mechanisms solve effectively, but it's sometimes useful at solving problems that market mechanisms solve poorly.
Centrally planned universal healthcare is generally effective and much cheaper than other systems. The US has out of control healthcare costs with its free market system. The next most expensive country to the US has less than 50% of the administration costs so the free market has actually come up with a bureaucracy that is more expensive to administer than what the government creates.
In general, central planning fails when market mechanisms are replaced by using force to allocate something. That doesn't mean opt-in programs with voluntary registration are going to experience the same type of failure. We know replacing salaries with a gun and telling people what they have to work on is a bad idea. That doesn't mean all central planning ever is a bad idea. I don't think anyone seriously argues we should abolish federal, state, city governments and let my local neighborhood manage it's own policy but that's the logical extreme of all central planning failing.
Ah yes, the old libertarian cop-out. The most free market healthcare system in the world is too highly regulated and if we just take the regulations away it will perform better because ideology. This is despite the fact that if you look at healthcare systems in the world most performance metrics improve with more regulation but not less. But lets forget about being data-driven when ideological purity is at stake.
I don't have any real issue with regulations per se but with people claiming that a highly regulated market is 'free market'.
I'm actually quite happy with my socialized health care aside from the last time I went to the emergency room they sent me home to die and when I came back a day later they were rapidly pulling out faulty body parts before I did indeed die. Well, then there's the Phoenix VA death list scandal.
I know I shouldn't complain as it not like I risked life and limb in service of my country and earned it as a direct result of military service or anything.
My issue is less with what we call the individual markets in the experiment. It's more with looking at healthcare across a large data set of countries and finding a general trend that more regulations lead to better cost structures and better health outcomes for the population and then somehow jumping to the conclusion we need no regulation for everything to work. That's just inconsistent with empirical reality and it's one of these purely ideological fantasy-land claims.
I would very much like to see a study from a credible source who came to this conclusion based on a survey of different health care systems.
What I believe is more likely is people looking at the kind of regulations being used and concluding that the correlation between good and bad regulations can be directly tied to the profit motives behind said regulations. A purely state run health care system has zero incentive to impose regulations that seek to raise costs and hurt competitors because, by definition, there is no completion. A purely private health care system has a lot of incentive to regulate the amount of doctors (to keep wages high) or make reporting costs extremely high to push out the smaller hospitals and increase their market share &etc.
I suspect that reality falls somewhere in the middle no matter what system you look at and everyone wants to argue from the extremes (or accuse someone else as being an extremist as you so helpfully demonstrated) so there is no real dialog for trying to fix anything.
> healthcare systems in the world most performance metrics improve with more regulation but not less
This claim is almost always because american lifetime expectancies are bad. But thats because Americans are unhealthy, not because our healthcare is bad. Do you have a different reason to make this claim?
No. It is the outcome of a culture that values individualism to a toxic level and has accepted decisions that make your life shorter as normal. Really very little to do with healthcare at all. Americans dont value their lifespan like others do but apparently that means our healthcare is bad? Like there are plenty of things to complain about with our healthcare why choose something that isnt even true.
I have 100% government provided healthcare (aside from dental) and I won't go see a doctor unless I'm literally going to die or want them to pull cancer off my arm. My diet would probably horrify you. Healthy as a horse except for another bit of suspected skin cancer I need to get checked out.
Your top comment sounded pretty sensible and fair but in your responses to comments you now just sound like a troll.
Central planning works very well: that's how every corporation, city, and state works. It works well as long as you apply it to a small enough market and e.g. don't try to plan the whole economy.
The problem in NYC is that there is not enough affordable housing. 40k units is nothing in the housing supply, and the rent inflation has been way too high lately.
The failure is not so much in central planning as it is in human cognition, across the board in every single person involved, operationally or in observance.
If we do not try to not fail, then we should not be surprised when we always fail.
> So the question is how do you allocate that supply?
To adress this specific question for Paris, they put an upper limit on your income to rent specific housing with lower rent.
I'll scale down your caricature of an example though, the offers you can see are usually 15% to 20% under market price, not 75% like you seem to imply.
Not exactly sure what is your point otherwise, the difference in terms of giving someone an apartment with a lower market rent vs. giving that money outright will eventually lead to the same thing, except that the former is also a way to curb the very high rent inflation (among other things), and results in both cases in a significant increase in purchasing power, at a given income.
> If we realized that with a system like this we're giving 1 out of 1k eligible people the equivalent of a 30k a year transfer
This is not equivalent because giving someone that money doesn't mean they'll chose to live inside Paris, and this is a measure that goes beyond financial support. It's also a city policy aimed at achieving a specific population distribution.
> This is not equivalent because giving someone that money doesn't mean they'll chose to live inside Paris, and this is a measure that goes beyond financial support.It's also a city policy aimed at achieving a specific population distribution.
I don't know, I would prefer the autonomy to choose where I live and how I spend my money. Why don't we afford the same respect to people that are less well off? Why do we want to essentially force them to live somewhere expensive when they would prefer to use that money elsewhere? They're not some pawn you can use to feel good about yourself. "Oh look at all these people from different cultures that live here". They're human beings
I think it's totally fair that a program designed to support people of a certain income living in Paris requires those people to live in Paris. If you want autonomy you can have it, just don't take the money/apartment. This feels like a cake and eat it to attitude. Government is totally allowed to have aims and reasons behind programs. Having low income people live in Paris ensures there are people available who can do work that can't afford to pay high wages. This is important to having a vibrant city and something reasonable for a government to aim for. If people could just take the money and screw off to anywhere in the country, then we'd effectively see people take a $30,000/year subsidy and go somewhere they could live entirely on that without working, which would accomplish very much the opposite of what the whole program was trying to do.
This doesn't force anyone's hand. If people don't want to live in Paris, that's their choice. No one is kidnapping them and shoving them in these apartments.
On the other hand, if they want to, they have an avenue to do this (and it's still going to be difficult, supply isn't nearly as plenty as the private market), even if they don't have the income needed to find housing in the same area otherwise.
> They're not some pawn you can use to feel good about yourself
That's not the reason Paris is doing this. There are benefits to encouraging diversity, among which fighting against getthoisation/communitarianism and prejudices, things that France has quite a poor records with in the last 50 years, and that had direct consequences on society cohesion.
Let's not use euphemisms. You're encouraging a certain racial and identity makeup of a city. It's literally the same policies that led to ghettoization. I don't want (often unelected) bureaucrats to put their finger on the scale on who can live in an area. It's not wrong because it was used to exclude [group] from certain areas, it's wrong on principle. And if we allow that power to the state, there's no reason it won't be used by someone with ideals that don't align with yours
First things first, we're talking about income-based public housing attribution. Not racial. Although if policies in the past means ethnic minorities have been disadvantaged all other things considered, then that will overlap, but as a consequence, not by design.
Secondly, Paris' policies are decided by the mayor of Paris and the city council, and they're elected (mayor directly, city council semi-directly). Not by "unelected bureaucrats".
Then your comment makes no sense. Policies favoring social diversity are the exact same policies that led to getthoisation? Do we agree on what getthoisation means? Because those two things are exclusive.
You say you don't want bureaucrats to put their finger on the scale of who can live in an area, that's your opinion. But if you're saying this should be purely left to supply and demand, then somewhat it is still a (non-)decision to put the finger on the scale, at one extremity, and it will have a certain outcome. Whether this outcome is good or bad will be a matter of opinion in certain cases, but not in others, e.g. what impact this has on the local economy for example, whether this leads to a more or less appeased society, and so on.
> Why don't we afford the same respect to people that are less well off?
This has to be facetious. They're perfectly free to go live in the country or move to Italy. I've never seen a desirable apartment I couldn't afford and then thought to myself how much I'm being respected by not being able to live there.
And with regard to the last point, no one is suggesting this as a means to have some peasant zoo in the city, a city needs a labor force. If you price out everyone who isn't a dev or a financier then you're not going to have a lot of the things that make a city nice. To some degree this is a subsidy for employers, because otherwise they'd need to pay more for their employees to afford living nearby.
It doesn’t take much to destroy a city with money, I can see it happen in a few cities in Europe now. Foreign money, mostly from non EU countries like Russia keeps pouring in raising the market value until no local can afford renting or owning an apartment anymore. Look at places like Sylt or some nicer towns in Switzerland or France, they basically got overrun by rich a••holes buying everything they could. Boggles my mind why people think it’s fair that local families compete with shady millionaires for living space.
Local families are the ones getting rich by having their houses surge in price. And they are probably also the reason why new houses are not being built.
One way is to have hidden costs. This could range from straight up bribes, to paid consultants to fill out a lot of forms or talk to the right people, to just knowing someone
Another way is a lottery which benefits a tiny percentage of people. Sure it's "fair" but the incentive to rig it is huge
But even with a lottery it's still inefficient. If you give someone an apartment with a market rent of 4k for only 1k you're effectively giving them a 3k apartment subsidy. But if you handed them 3k, maybe they would spend 1k dollars on extra apartment and 2k for something else.
There are other distortions. Overall these are the worst kinds of policies because it's all hidden costs. If we realized that with a system like this we're giving 1 out of 1k eligible people the equivalent of a 30k a year transfer, we'd likely realize it's a ridiculous policy. But instead we just say how nice it is so and so is paying only 600 Euros to live in the center of Paris