Chris Derrick

Formerly @bowermantc and @StanfordXCTF

[Chris Derrick @CDerrickRun]

@AidanReed45 let's take a deep breath. jet fuel isn't even at all-time highs in nominal dollars and supply elasticities are higher in the long-run than the short-run.

[Chris Derrick @CDerrickRun]

@alexbronzini @NathanJRobinson Many people think that only production line workers generate value and everyone above that is parasasitic on their labor. Obviously wrong, but its an intuition people have.

[Chris Derrick @CDerrickRun]

@MattZeitlin Something to this. Reading The Power Broker, its striking how many ambitious people think the way to fame and popularity is building stuff. Seems insane now that any ambitious person would think they could become famous - or even successful - managing public works projects.

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman We probably disagree on the impact that would have, but I'm happy to support a Land Value Tax!

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman What I don't really get is what the housing community needs to "come to the table" on? Specifically, what is the ask?

More broadly, what does moving away from speculation mean? What sorts of things would be discourage / encouraged?

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman I think we're aligned on tax rates. My vision is that you try to get as much housing built as you can and then you separately try to redistribute income. I think almost attempts to redistribute income through housing policy directly fail because they discourage supply.

[Chris Derrick @CDerrickRun]

@agrailforyou @MikeFellman @releepseveer I do disagree with Mike on how much more liberal zoning and permitting could do to impact costs (including cost of capital), but that's a more marginal disagreement.

[Chris Derrick @CDerrickRun]

@agrailforyou @MikeFellman @releepseveer On this specific issue that makes me even more opposed to things like IZ. You need a value-cost gap and the structural trend is towards higher costs. Intentionally pushing down value makes the problem worse and means you need even higher market rents to sustain building.

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman I guess I don't understand what it means to move away from speculation if speculation also includes people paying more to live in places they want to live.

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman Moreover, is it true that speculation is what drives housing inequality? It seems to me that most of the rise in prices is driven by end users bidding for space they want to live in.

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman Building new housing is among the most "speculative" things you can do in housing. I don't see how you can have robust private housing supply growth without "speculation". Now if the goal is everything should be directly or indirectly public, that coheres, but is a different goal

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman I think the one scenario where IZ works is if you're already committed to not upzoning. Then you'll get inflated land values and IZ restrictions can take a slice of those inflated values. In my view, that's strictly worse than doing upzoning, but perhaps a second best solution.

[Chris Derrick @CDerrickRun]

@releepseveer @agrailforyou @MikeFellman IZ is an attempt to force investors to accept lower returns, generally won't work. They'll build less on the margin. If you think private capital is too expensive, the solution is to deploy public capital.

[Chris Derrick @CDerrickRun]

@MikeFellman I'm glad to see that despite your YIMBY skepticism you still believe in the one true doctrine* of maximizing the supply side and dealing with unequal consumption with ex-post cash (like) transfers. 🫡

*left neoliberalism

[Chris Derrick @CDerrickRun]

@releepseveer @MikeFellman Investors are going to have return thresholds for any project based on that project's risk. There's no actual way to beat down those returns in the long run. If you try to tax it away you'll just get less investment (building) until the returns are high enough again.

[Chris Derrick @CDerrickRun]

@steviewelles55 @OverCommonName @mattyglesias Yes land is priced in $ / sqft of zoned area. If you increase the amount of zoned area across a city you can:
1. Decrease the $ / sqft of zoned area (through increased supply)
2. Increase the $ / sqft of land area (through increased density)
This is the point of YIMBYism.

[Chris Derrick @CDerrickRun]

@mattyglesias The piece missing from these anti-YIMBY takes is that land for apartments is generally priced in terms of $ per sqft of zoned floor area. Where that price is very high the government can immediately lower it (and the cost to build) by increasing the amount of zoned density.

[Chris Derrick @CDerrickRun]

@GS05445168 @biggestcatt @Birdyword Part of the larger critique that the main sin of finance is that its pointless (all the engineers and rocket scientists who did risk management instead, the completely unconvincing way Spacey says "Our talents have not been wasted").

[Chris Derrick @CDerrickRun]

@GS05445168 @biggestcatt @Birdyword I always read it as clearly being Goldman, but the Fuld reference is implying they'll meet their end someday as well. Lehman was once considered extremely sharp, after all. Irons basically says this at the end to Sam, although he clearly doesn't believe it.