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Ticket Scalping and Housing Vouchers: A Tale of Limited Supply
Daryl Frweather
Contributor
Redfin’s Chief Economist, leading economic research about housing.
In recent months, the soaring prices of concert tickets have ignited a wave of public outrage and government attention. Accusations have been thrown at companies like TicketMaster and scalpers for profit inflating prices beyond what many fans can afford to pay. President Biden has even suggested legislation med directly at these issues. But akin to the complex dynamics of real estate markets, ticket unaffordability is fundamentally a consequence of limited supply.
The Tension Between Artist Pricing and Fan Demand
In the world of live concerts, there exists an inherent tension between what top-tier artists like Taylor Swift or Beyonce aspire to charge their fans versus the prices that wealthier individuals are willing to pay. These stars might want to ensure all their supporters can access affordable concert tickets, but affluent audiences frequently exceed the price point set by the artist and the venue capacity. Due to constrnts on stadium sizes and artists' touring schedules, this demand imbalance results in ticket prices that fall beyond what average fans can afford. Some are priced out altogether, while many willing to sp hundreds of dollars might only have access to seats in the less desirable sections.
An illustration of this mismatch is clear when music superstars opt for limited audience events. In 2011, Beyonce performed four nights at Roseland Ballroom with a capacity of just over 3,200 attees. The first show sold out in an astonishing 22 seconds, followed by the remning shows selling out within minutes of each other. Any fan who lacked lightning-fast reflexes was left to either shell out hundreds or thousands of dollars on the resale market for access or miss the event entirely.
Housing Vouchers: Limited Access and Potential Misuse
A similar situation plays out in the realm of affordable housing through government-assisted programs like housing choice vouchers, which provide rental assistance to low-income families. Eligible families often ure years wting for their chance at assistance, even as others face struggles with housing costs. The government’s ideal vision is that every qualified family could receive the support needed, but the scarcity of both vouchers and affordable housing units forces many households to continue grappling with affordability challenges.
Unfortunately, the issue gets more complicated by instances of misuse in the program. Some landlords exploit this mismatch between supply and demand for profits through overcharging or providing subpar living conditions. A study from Milwaukee found that tenants receiving housing assistance pay around $60 extra per month compared to other renters, echoing the scalping phenomenon seen at concerts. Bad actors take advantage of limited access to affordable homes by inflating prices.
Eliminating Scalping: Increase Supply
The most effective way to combat scalping is by increasing the supply of tickets avlable for purchase. Take, for example, the controversial case of rapper Travis Scott's recent concert tour. Initially, a rapid sellout was expected given high demand and limited avlability. This situation attracted scalpers who quickly purchased thousands of tickets at an original price of approximately $60 each, with plans to resell them at inflated prices.
In a twist of fate, Travis Scott responded by adding more dates to his concert schedule in response to overwhelming fan interest. Suddenly, the scarcity that scalpers had bet on was no longer present, and this led to a plummeting resale value for tickets down into the single digits on popular platforms like eBay or StubHub. For many scalpers, this meant facing steep losses from their investment of tens of thousands of dollars.
Achieving Affordable Housing through Policy Changes
To make housing truly affordable and eradicate these bad actors, we need more supply of homes across all price points. This can be achieved by:
Eliminating single-family zoning that restricts development.
Removing bureaucratic barriers that slow down the construction process for new homes.
Providing financial incentives for developers to build affordable housing units.
Constructing affordable housing on government-owned land.
By successfully increasing supply, rents stabilize and become more accessible for families across income levels. Homeowners who have reaped significant profits from rental properties could see their earnings reduced, but many would experience the satisfaction of living in communities that better suit their lifestyle needs. In this scenario, those investors whose business model relied on exploiting renters through high rental prices lose out the most.
Join me on Twitter for updates and insights into housing markets or check out my website and articles here.
Daryl Frweather
Chief Economist at Redfin and upcoming author of Hate The Game: Economic Cheat Codes for Life, Love, and Work April 2025.
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