I really thought this documentary was very interesting, but what I did not like about it is that none of them, not even the economists they had on, seemed to talk about the actual economics involved here. Only at the end do they briefly talk about one potential solution, without discussing its merits.

Economics is about incentives. Greed has always existed and will always exist because it is somewhat human, no matter which system it exists in. There was greed in the Soviet Union, there is greed now under capitalism, and there was greed under feudalism.

But economics is about creating the right incentives to get the correct results. And none of them in the documentary seem to talk about that. Regulations such as who can move in where, and patchwork regulations like that, are not going to fix the underlying incentives that exist here.

They brought up an interesting example of the SBB choosing not to build a lot of new apartments because parties demanded them to be cheap instead of profitable. The impulse to demand this is understandable. But so is the response by the SBB to then not build the apartments, because real estate is not their purpose. That is just a side venture for them.

The government's job is to create the right incentives so that the goals we want to achieve, namely actually affordable prices and a high enough supply, are met. The government is failing at its job here. This is partly due to lobbying, but also due to voting habits, and more and more populistic solutions that sound good in theory, but again, are band-aids and do not solve the underlying incentives.

Market forces will always be stronger than the government. There are many examples of this around the world, and they will show themselves in many forms. The government's job is to steer those market forces in the right direction to achieve the desired goal. And that can only be achieved through the right taxation policy, instead of trying to demand singular projects be affordable, for example.

Edit: Spelling





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justyannicc

6 comments

  1. We can’t force private companies to build socialist utopia? *shocked pikachu face*

    Answer is lowering demand = immigration.

    And accepting reality. Olten is <30mins by train. If neither you nor your ancestors managed to secure any local real estate, maybe Zurich isn’t for you. Which is fine. 

  3. the problem is that we want 1) more housing, 2) affordable housing and 3) no new housing zones and as much greenery as possible.

    those 3 things simply cannot happen at the same time.

  6. I still need to watch it till the end, but I see a lot of ppl that had a great rent for several years and now they complain when the building is renovated and rent is update to market value?

    Of course I’m sympathetic to the short notice etc, but that is a risk of renting. You don’t have a lot of responsability of maintenance and don’t need the financial commitment but you are ‘at the mercy of the owner’.

    All this rethoric of the owner and cheap price in 1930, etc; that is populisum.

    In theory government driven affordable housing is the GOAT, but it’s difficult to have low taxes and a very structured government.

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