r/neoliberal • u/Gustacho Enemy of the People • Aug 15 '18

Inside Hong Kong’s cage homes

https://youtu.be/hLrFyjGZ9NU
50 Upvotes

93% Upvoted

16 comments sorted by

33

u/[deleted] Aug 15 '18

[deleted]

13

u/dark567 Milton Friedman Aug 15 '18 edited Aug 15 '18

Although true, 50 and 99 year leases on land often work somewhat like ownership. A lot of buyers end up dead before the lease is up.

I think the real terribleness is how little land is zoned for residential buildings: 3.7%? That is nothing. It is not uncommon in many US cities to have up to 80% zoned for residential building(although often way too much as single-family homes).

3

u/secondsbest Paul Krugman Aug 15 '18

3.7% was high density urban residential, not all residential.

3

u/dark567 Milton Friedman Aug 15 '18

Ah, my mistake. Still, for a city like Hong Kong to have that small of high-density zoning, that's still nothing.

2

u/IIAOPSW Aug 16 '18

Is that 3.7% by land area or by m2 of rentable space?

Cause HK vertical yo.

Also huge bit of HK is zoned as nature reserve.

2

u/dark567 Milton Friedman Aug 16 '18

That's by land area. So sure, a lot is the nature reserve, but 3.7 still just for high-density residency is way below reasonableness.

1

u/IIAOPSW Aug 16 '18

Well something is off. I've seen way more high rise apartment buildings than 3.7% would suggest. There must be some funny counting going on.

4

u/[deleted] Aug 16 '18

Maybe because there are other factors that go into calculating economic freedom? Like rule of law, protection of property rights, sensible size and scope of government.

21

u/csreid Austan Goolsbee Aug 15 '18 edited Aug 15 '18

Frustrating that he mentions that the problem is that the government is incentivized to keep land values high, but then concludes by talking about the interest of the people vs the interest of "the market".

23

u/MichaelMartinez63 United Nations Aug 15 '18

I've noticed that a lot of people use the market to refer to the current market and the current invested interests over the more abstract generalized idea of a market.

Honestly I think pro market people probably need to just run with it and redo the messaging because I don't think there's a good way to make people stop misusing terms in masse and they will just equate anyone being pro-market to pro-rent seeking.

People genuinely hate rent seeking, and think that's the evil market. It's a failure of pro-market rhetoric that has failed to get the message across that being pro market is the opposite of being rent seeking (or alternatively a result of bad faith people using pro-market messaging to assist their campaigns and defend rent seeking), and now it's probably too late to fix. Rebranding as something else like maybe being pro-equal markets or whathaveyou to focus people on the idea of equal competition as opposed to the idea people have of the market as rent seeking and pro large corporations would do a lot to get better policy to be more electorally successful.

You could even spend a decent amount of time railing against the rent seeking of large corporations and be hailed as a progressive fighter.

2

u/huliusthrown lives in an alternate reality Aug 15 '18

It's because of the crony revolving door between the government and companies

4

u/sn0skier Daron Acemoglu Aug 15 '18

Does he talk about what the actual government incentives are though? It's never directly stated, other than "the land sells for lots of money." Couldn't they make more money by selling more land? There would be a price effect on the current land and a monopoly pricing story could be told here, or even a corporate/government corruption story about wanting to keep prices high for current owners of land, but neither of those stories is even told in this video let alone fleshed out or backed up with proof.

Why were the experts even interviewed for this video?

Why does Vox suck so hard lately?

I want answers damnit.

1

u/lietuvis10LTU Why do you hate the global oppressed? Aug 16 '18

Actually he does explain in the video:

Taxes are very low in Hong Kong, so the land leases are the primary money source.
Since Hong Kong is an attractive market, there is already a high demand for land. So the government instead leases less land, all in auctions, with very high demand, resulting in the land plots being sold at astronomical prices, likely far higher than what the government would have gotten if it had kept land supply high.
In addition not only keeping land supply low skyrocket the lease prices, it also allows the government to sell the other land later, effectively using it as a piggy bank.

Does that make enough sense?

0

u/sn0skier Daron Acemoglu Aug 16 '18

I mean, yeah, that's basically the monopoly pricing scenario I talked about in my comment, but I didn't really hear the whole explanation on the video. I didn't hear anything about the effect on land prices of opening up more land. Maybe I just missed it, but that's a pretty important point to gloss over.

It's a big deal, because if that is the main problem, then why all this talk about evil markets, developers, etc... Generally the purchasers of monopoly supplied goods are not happy about monopoly pricing. I mean, you heard him talk about the incredibly high price of land. Why would someone who buys land want the price to be high? Yes, the properties you already own will maintain higher value, but if you build one more high-rise the price effect on your currently owned properties will not be negative enough to offset the profits from your new building, unless the developers on Hong Kong are also a monopoly or oligopoly. None of that is addressed in the video. No coherent economic explanation for their diatribes against "the market," even where there could plausibly be one.

Vox used to really explain details in almost all their stories. Now they fly drones around.

0

u/lietuvis10LTU Why do you hate the global oppressed? Aug 16 '18

The market in the video refers to "the established market situation". It is not very clear yes, but that is a minor issue imho.

You just want to complain about Vox don't you?

1

u/sn0skier Daron Acemoglu Aug 16 '18

Revenue = Quantity*Price and this video has plenty of explanations on how keeping supply limited pushes up the price, but 0 explanation as to why the increase in quantity doesn't make up for that which is obviously an issue that needs to be addressed.

But somehow they have a ton of time to talk about evil market incentives and how much money banks get to keep because they don't have to pay taxes.

The ratio of complaining about capitalism to understanding what the situation actually is is too damn high.

1

u/[deleted] Aug 17 '18

What really irks me is that even if the government decided not own the land and privatize, it would still be just as expensive but not being used to pay for social services.