13 ms·

How Much Housing Will Be Built?

91 points by apsec112 10y ago

raldi 10y ago
If you click the link and, leaving all the rest of the defaults alone, drop the required affordable housing percentage from 10% to 0%, you lose about 4,000 affordable units but gain 6,000 market-rate ones. So, would this change increase or decrease displacement? Well, another recent Berkeley study concluded that a new market-rate apartment has about half the displacement-fighting impact of a below-market-rate apartment: http://www.urbandisplacement.org/sites/default/files/images/udp_research_brief_052316.pdf http://www.urbandisplacement.org/sites/default/files/images/... Therefore, the benefit of the extra market-rate units fails to offset the damage from the loss of affordable units (6000/2 < 4000). It fails similarly, but to a lesser degree, if you drop it to 5%. But if you crank it up to 15%, the gains from the extra affordable units are overwhelmed by the lost market-rate units (4000/2 > 784). So it looks like the default value of 10% is the sweet spot. By the way, the math is even easier for the 25% threshold that Supervisors Jane Kim and Aaron Peskin are proposing (http://www.sfchronicle.com/opinion/openforum/article/Prop-C-a-tool-to-help-solve-our-housing-crisis-7938760.php http://www.sfchronicle.com/opinion/openforum/article/Prop-C-...), because that would actually lead to less affordable housing being built. Less market-rate, too. A double displacement whammy.
- AnthonyMouse 10y ago
  The entire concept of low income housing is a scam to keep market rate prices high. Build enough market rate housing that the price falls to what low income people can afford and you don't need any low income housing. If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved.
  - raldi 10y ago
    So you're saying you don't believe that an affordable unit has twice the displacement-fighting power of a market-rate unit? If so, what's the basis for this belief? Have you read the study I linked to, which concludes otherwise? If so, what part of its reasoning do you contest?
    - AnthonyMouse 10y ago
      The flaw is scale. If you build one market rate unit (or ten or a hundred) then you get displacement, because the price of the market rate units remain too high for low income people to afford. You need to build a million.
      - raldi 10y ago
        Actually, just building 111,000 (increasing the city's supply by 30%) would cut housing costs in half. Source: http://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html http://experimental-geography.blogspot.com/2016/05/employmen...
        JoshTriplett 10y ago
        As far as I can tell, the model shown here doesn't seem to take supply and demand into account when calculating the price of the resulting housing.
        enf 10y ago
        What do you mean? The model is nothing but rent=demand/supply with an attempt to figure out what weights go on these parameters. What would you do differently? (Author of blog post here.)
        foobarqux 10y ago
        Unrelated: Why is the wages coefficient negative and large in your regression?
        enf 10y ago
        I think you're reading it backwards. The coefficients are the exponents that follow the parameters. The large negative one is the housing supply, because prices go down as more housing exists.
  - tsmffh 10y ago
    Government price controls do not fundamentally change the cost only the price. If the government is so efficient and can, somehow, make housing cheaper than it would be in a free market why shouldn't they also take control of the food supply? Computers? Software? All industry?
    - AnthonyMouse 10y ago
      The government created a market failure by passing restrictive zoning regulations leading to a severe under-supply of housing. Resolving the market failure requires either eliminating the restrictions or providing enough cash money to justify the builder's expense in contending with them. Obviously the better solution is to do away with the restrictions, but politics is the devil's day job and all that.
      - mcguire 10y ago
        "The government"? Good thing there's no actual people involved.
    - _9MOTHER9HORSE 10y ago
      Because thus far they have intervened with the opposite effect, to push housing prices upwards. In London this is through the Green Belt, torturous planning laws, height and density restrictions, low interest rates, government-backed mortgages and lending schemes, etc. Supply in the markets for food, computers, software, etc. is not nearly so controlled by government action (or inaction).
    - davidw 10y ago
      This is going off into the weeds, but the government can and does provide food assistance: food stamps. Still, though, people use those to purchase food at market prices, which makes sense.
      - eru 10y ago
        As a Central European, I have always been bewildered by American food stamps. But I guess it's because of different attitudes in these two parts of the world? American don't trust poor people with money?
  - kartan 10y ago
    > Build enough market rate housing that the price falls to what low income people can afford and you don't need any low income housing. There are other kind of problems like buy-to-leave (http://www.designingbuildings.co.uk/wiki/Buy_to_leave http://www.designingbuildings.co.uk/wiki/Buy_to_leave). In that scenario the amount of housing to build to get to a point that it is affordable is a lot higher than it should be. > subsidizing construction If you mean state owned properties. I agree on that. Having low rent housing competing in the market bring prices down. But the number should be significant enough. Otherwise it just becomes a lottery where a few win but has not broader impact in the market.
    - AnthonyMouse 10y ago
      > There are other kind of problems like buy-to-leave (http://www.designingbuildings.co.uk/wiki/Buy_to_leave http://www.designingbuildings.co.uk/wiki/Buy_to_leave). In that scenario the amount of housing to build to get to a point that it is affordable is a lot higher than it should be. Not if you publicly announce your intentions ahead of time. Then people have no incentive to do that because the expectation will be for housing prices to decline and the investment to lose value. > If you mean state owned properties. I mean giving subsidies to builders who create new market rate housing. Although another major problem is zoning regulations that prevent new housing from being constructed regardless of financing.
      - spiffage 10y ago
        Subsidies would be mostly unnecessary. Merely allowing the housing to get built would be a gigantic improvement.
    - efaref 10y ago
      The solution to buy-to-leave is surely extremely high taxation on properties left empty (and I'm talking "10% of market value" levels of taxation, enough to obliterate any possible returns on investment).
      - simonh 10y ago
  - eru 10y ago
    > If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved. Or just give poor people money?
    - fennecfoxen 10y ago
      And lose a third of it to the government bureaucracy? And probably construct a new generation of welfare-trap, making people afraid to earn more money for fear of losing their benefit?
      - eru 10y ago
        That giving the money to poor people was a suggestion relative to `give it to construction companies as a subsidy'---which is really, really stupid. Depending on your political leanings, you might be happier with just lower taxes. (And yes, the welfare-trap is probably real. Make sure to watch out for effective marginal tax rates of poor people especially.)
  - mathattack 10y ago
    The dangerous problem is that it isn't the government who subsidizes rents, it's everyone else. If the subsidy were visible (the government writing a check to landlords) people would raise hell. Instead it's a hidden subsidy. The housing costs and rents of everyone goes up (including low-income income people) except for the lucky few who win the subsidized housing lottery. The intent of low income housing is laudable, but the execution causes more problems than it solves.
    - eru 10y ago
      Same for cars, and their parking. The government forces everyone to write cheques to car owners. (Even the car owners themselves, of course. It's a tragedy of the commons; like eg communal charging for electricity in a whole city.) http://www.uctc.net/research/papers/351.pdf http://www.uctc.net/research/papers/351.pdf
      - AnthonyMouse 10y ago
        It's not tragedy of the commons, it's path dependence. If you don't have excellent mass transit then you need parking, so you build parking. Then if you have parking everybody drives and nobody is willing to invest in mass transit, so you continue to need parking.
        eru 10y ago
        I agree. Now, we mostly see the demand for parking at zero [#] marginal cost to the parker, not the demand for parking at its true cost---because the costs are shared by society. The short term demand for parking is relatively inelastic---so right after introducing pervasive charging for curbside parking and dropping minimum parking requirements for new developments, we will see roughly the same number of cars parked. (That's where your dependency comes in.) In the longer term, demand for parking is more elastic. (One can see a similar relationship between oil price and demand for gas guzzling cars: inelastic / path dependent in the short run. More elastic with enough time.) This holds even without public transport at all. Public transport is just one of the things that can serve as an (imperfect) substitute for private car rides. There are other ones, like car sharing, choosing job/home combinations that are closer to each other, telecommuting, home delivery of groceries, buying groceries in bulk, etc. (To take one example right now, people already prefer to work closer to home, and make trade-offs all the time when considering a home or a job. The point of indifference between eg home price/salary and commute length will shift. Full disclosure: I hate commuting myself and have decided to fork out the money to live very close to the office.) All the people in the market are probably much cleverer than me in coming up with substitutes. The price mechanism can guide them. Some of these substitutes can and are provided by the private market. Public transport is generally not. Though eg Britain has privatised train companies. Add in as another complication that without careful regulation, lots of public transport options are natural monopolies. One attempt to blunt this effect is by careful separation: eg run the rail network as a heavily regulated, public utility and make private companies bid for the right to run trains on it and for slots at the stations etc. And be very careful to specify that apart from meeting some minimum standards, the height of the bid alone determines the winner of the auction---politicians like beauty contests, because it gives them power to meddle. See https://en.wikipedia.org/wiki/Privatisation_of_British_Rail https://en.wikipedia.org/wiki/Privatisation_of_British_Rail for some lessons. Germany faces similar problems in eg their electrical power market. Since I'm already on a tangent: the American freight train market and its history are another interesting piece to learn from. (It's doing pretty well, mostly because they don't have many passenger trains clogging up the network like in Europe, and the new regulatory environment of the Staggers Rail Act (https://en.wikipedia.org/wiki/Staggers_Rail_Act https://en.wikipedia.org/wiki/Staggers_Rail_Act) seems to have worked out reasonably well. (They called it `deregulation', but that almost never happens---it's just a different form of regulation.) [#] Zero in terms of dollars plus the effort and hassle of congestion and cruising for parking.
  - mcguire 10y ago
    "If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved." What makes you think they don't? In fact, wasn't that the problem in 2008?
    - zanny 10y ago
      2008 was because of incredibly dangerous mortgages being handed out due to a mix of deregulation and the government still guaranteeing corporate profits (bailouts or otherwise) so the mortgage lenders involved didn't need to actually accept the risks. It was at the point where a bank would write you a mortgage on practically anything for any amount because they were effectively free money with no risk to the lender. That environment did artificially inflate the growth of urban sprawl McMansions above any working class persons paygrade, but it was nowhere close to direct intentional housing subsidy beyond trying to achieve some pipe dream of families on 30k combined income affording a 5k square foot house.
- apsec112 10y ago
  This is true as far as it goes, but it doesn't consider opportunity cost. Instead of building special units that would benefit 4,000 people, a tiny fraction of the Bay Area, cities could charge an equivalent general fee that benefits everyone. The money could pay for mass transit, parks, services for the poor, programs for children, and so on.
- natrius 10y ago
  That Berkeley study only considers units subsidized by taxpayers when it talks about subsidized housing. Inclusionary zoning is not studied, and like all disincentives to build more homes, I think it makes displacement worse.
eru 10y ago
Building denser has to be part of the solution. One way is to build up. Another is to also remove minimum parking requirements: See http://www.nytimes.com/2010/08/15/business/economy/15view.html?_r=1 http://www.nytimes.com/2010/08/15/business/economy/15view.ht... and http://www.uctc.net/research/papers/351.pdf http://www.uctc.net/research/papers/351.pdf
- IndianAstronaut 10y ago
  An easy fix might be to turn single story strip malls into two story dual purpose buildings. Stores on bottom, rooms on top. I doubt this would do much to change aesthetics.
  - rwhitman 10y ago
    Usually when a strip mall is re-zoned for mixed use, they demolish the older structure. But on the aesthetic side it's possible to turn these buildings into something interesting if they're renovated by someone creative. Worked across the street from this place when an architecture firm bought and renovated it: http://www.rchstudios.com/639-larchmont-boulevard/ http://www.rchstudios.com/639-larchmont-boulevard/
- superuser2 10y ago
  If you cut parking spaces without corresponding improvements in transit infrastructure, the city is strictly less livable and living sprawl looks like an even better idea.
  - eru 10y ago
    You just start charging for curbside parking, and remove mandatory minimum parking requirements for buildings. People are still free to build parking places (and even charge for them). The hope is that by ending the parking subsidy for car owners, they choices will be informed by something closer to their full economic impact. (The cost can even be borne by the same people---ie currently a car owner might as well be paying for his own parking on average with other taxes / higher rent / etc. The economics still work out to better incentives, if we allocate the whole cost to the decision that causes it.)
mickrussom 10y ago
The bay area. The best, brightest, smartest, pedigreed, hardest working most motivated people on earth. And we cant solve the simplest problems in the Maslow's hierarchy. American Indians solved the housing problems with Teepees and Wigwams - so much for being "smart." There was an article recently where a google employee was living in a 24 ft truck in the google parking lot. This Bay Area mess is a self inflicted joke. What I find amazing is Tokyo. Tokyo, 1945, burned to the ground, population 3.5 million. Today, Tokyo is at 13 million and the Tokyo-Yokohama urban area is 37.8 million. And if you've ever been to japan public transportation is functioning and the society seems to nail basic needs much better than smarty-pants bay area.
- meric 10y ago
  That is the consequence of focusing on solving problems for the world, instead of connecting with the people next to us.
- branchless 10y ago
  American Indians didn't believe in land enclosure and didn't have banks issuing fiat money against land, they also bartered I think rather than issuing paper against future labour. I think hacker news isn't smart at all about fiat money because it's inextricably bound up with the venture capital world where you agree to hand over your labour for paper. Fiat money is ex nihilo and therefore creatable in infinite amounts. Many of you won't be old enough to realise the productivity gains computers have brought. It's amazing. Yet here we are all scratching around for enough to cover our basic bills. It will always be like this when you have land enclosure and tax labour. Create more and you can devote more to land costs. Hurry up, the rentiers are waiting.
- pjc50 10y ago
  "What do you mean 'we', white man?" The problem is there's no solidarity with the newcomers, and a strong desire by incumbents to keep the place the same and not turn it into skyscraper-filled Guangzhou. For a lot of people not building housing is an important priority in their life that they will fight for. Not to mention the question of money. You might equally ask why the tech industry feels the need to be stuck so tightly to SF when it's far more amenable to remote work than most industries. There's also the little matter of the earthquake zone.
youngButEager 10y ago
Even if all the tougher regs were removed tomorrow, very few builders with the large $$$ it takes to build housing are also stupid enough to risk government seizure in the future. The population will keep growing. The demand for housing will increase. The city leaders have already proven that stealing control of someone's personal asset is something they will do. (the personal asset in this case is a pre-1979 mom-and-pop rental property) After 1979, long-term tenants moved in and the supply of rent controlled units dropped to nothing very quickly. Then what? You can't tell the entrenched 'fast movers' who got there first with the cheaper rent control units "move out and give someone else a chance." Once a government shows a willingness to steal control of someone's personal assets, NO one who is smart enough to afford to build housing is also DUMB enough to build in rent control zones. Only enticements get builders to build in those areas. And most builders see this: - in Southern California there was a move to 'move the goalposts' and instead of pre-1979 rentals being rent controlled, now everything built pre-1995 would become rent controlled. - here recently on the Peninsula the same topic came up -- re-classify candidate rental properties for rent control up to 1995. Both of those were defeated. But it signaled to developers that the goalposts can be moved. Until leadership stop stealing control of people's personal assets, it doesn't matter if all building code/zoning/etc. rules are removed -- very few builders will put a new project in a rent control area, where city leaders have already stolen control of personal assets. "You like to steal control of assets that don't belong to you? I won't be building assets near you." SIMPLE AS THAT.
ksec 10y ago
I could only wish the same can be done for Hong Kong.
cbr 10y ago
Properties included in the model have total development potential, measured by FAR and residential units, of 20% or less of the maximum allowed under local zoning law. All properties above this level are considered "built out" and do not factor in to the maximum potential units number. FAR is "floor area ratio" and controls how many square feet of building you can have on a given lot. I'd love to have a slider for this, since increasing the allowable FAR is a good way to make more efficient use of limited land. (For example, zoning where I live sets a maximum FAR of 0.75, but most properties are over that limit and grandfathered in, averaging more like 0.90. Allowing people to build to 0.90 instead of 0.75 would not substantially change the feel of the area, and would make a lot more units available.)
kdeldycke 10y ago
norea-armozel 10y ago
I think the housing troubles could easily be fixed if those jobs which can easily be moved over to telecommuting were done so over time. Like honestly, how many devs and QA staff have to physically be in the same place throughout the work week? I'd understand if we're talking a firm that built physical prototypes for products but a website/service is easily accessible from the high rise office as it is from home office. At some point, software development is going to have to suck it up and be 100% remote for day-to-day concerns (excluding certain meetings with clients and the like).
yetanotheracc 10y ago
Looks like streamlining the red tape would be a good place to start (19k additional units, 500M in taxes).
jrockway 10y ago
This was a fun game! I'm running for governor next whenever that happens. I really had to put myself in the shoes of a California voter to get the numbers to work out. I think for all new housing going forward, it's important that we enrich the state's coffers so that all y'all don't have to pay as much property tax -- as manded by the State Constitution. I'm therefore raising the fees per unit to the maximum this game allows (really not high enough but it's good as a working model). I also think the whole point of California is big open parking lots and lots of freeways; so I'm going to require that density be lowered by 40% and parking increased by 40%. I've noticed that there's no affordable housing in the entire state pretty much, so each new project will be required to set aside 40% of their units to qualified people-in-need-of-affordable-stuff. It's a real problem and these fat cat housing developers only care about themselves. Additionally, the banks going bust really fucked our economy a couple years ago, so I'm mandating that they charge no less than 10% per year of interest. Finally, as a show of good faith, the State of California is levying a tax on property development of 16% of the total project cost. With this, there is a 0% chance of any new housing being built. You won the lottery when you happened to be alive 40 years ago to buy a house, and it's my job as the Governor of California to protect that asset for you and your children. Vote for jrockway!

91 points by apsec112 10y ago

raldi 10y ago

If you click the link and, leaving all the rest of the defaults alone, drop the required affordable housing percentage from 10% to 0%, you lose about 4,000 affordable units but gain 6,000 market-rate ones. So, would this change increase or decrease displacement? Well, another recent Berkeley study concluded that a new market-rate apartment has about half the displacement-fighting impact of a below-market-rate apartment: http://www.urbandisplacement.org/sites/default/files/images/udp_research_brief_052316.pdf http://www.urbandisplacement.org/sites/default/files/images/... Therefore, the benefit of the extra market-rate units fails to offset the damage from the loss of affordable units (6000/2 < 4000). It fails similarly, but to a lesser degree, if you drop it to 5%. But if you crank it up to 15%, the gains from the extra affordable units are overwhelmed by the lost market-rate units (4000/2 > 784). So it looks like the default value of 10% is the sweet spot. By the way, the math is even easier for the 25% threshold that Supervisors Jane Kim and Aaron Peskin are proposing (http://www.sfchronicle.com/opinion/openforum/article/Prop-C-a-tool-to-help-solve-our-housing-crisis-7938760.php http://www.sfchronicle.com/opinion/openforum/article/Prop-C-...), because that would actually lead to less affordable housing being built. Less market-rate, too. A double displacement whammy.

AnthonyMouse 10y ago
The entire concept of low income housing is a scam to keep market rate prices high. Build enough market rate housing that the price falls to what low income people can afford and you don't need any low income housing. If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved.
- raldi 10y ago
  So you're saying you don't believe that an affordable unit has twice the displacement-fighting power of a market-rate unit? If so, what's the basis for this belief? Have you read the study I linked to, which concludes otherwise? If so, what part of its reasoning do you contest?
  - AnthonyMouse 10y ago
    The flaw is scale. If you build one market rate unit (or ten or a hundred) then you get displacement, because the price of the market rate units remain too high for low income people to afford. You need to build a million.
    - raldi 10y ago
      Actually, just building 111,000 (increasing the city's supply by 30%) would cut housing costs in half. Source: http://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html http://experimental-geography.blogspot.com/2016/05/employmen...
      - JoshTriplett 10y ago
        As far as I can tell, the model shown here doesn't seem to take supply and demand into account when calculating the price of the resulting housing.
        enf 10y ago
        What do you mean? The model is nothing but rent=demand/supply with an attempt to figure out what weights go on these parameters. What would you do differently? (Author of blog post here.)
        foobarqux 10y ago
        Unrelated: Why is the wages coefficient negative and large in your regression?
        enf 10y ago
        I think you're reading it backwards. The coefficients are the exponents that follow the parameters. The large negative one is the housing supply, because prices go down as more housing exists.
- tsmffh 10y ago
  Government price controls do not fundamentally change the cost only the price. If the government is so efficient and can, somehow, make housing cheaper than it would be in a free market why shouldn't they also take control of the food supply? Computers? Software? All industry?
  - AnthonyMouse 10y ago
    The government created a market failure by passing restrictive zoning regulations leading to a severe under-supply of housing. Resolving the market failure requires either eliminating the restrictions or providing enough cash money to justify the builder's expense in contending with them. Obviously the better solution is to do away with the restrictions, but politics is the devil's day job and all that.
    - mcguire 10y ago
      "The government"? Good thing there's no actual people involved.
  - _9MOTHER9HORSE 10y ago
    Because thus far they have intervened with the opposite effect, to push housing prices upwards. In London this is through the Green Belt, torturous planning laws, height and density restrictions, low interest rates, government-backed mortgages and lending schemes, etc. Supply in the markets for food, computers, software, etc. is not nearly so controlled by government action (or inaction).
  - davidw 10y ago
    This is going off into the weeds, but the government can and does provide food assistance: food stamps. Still, though, people use those to purchase food at market prices, which makes sense.
    - eru 10y ago
      As a Central European, I have always been bewildered by American food stamps. But I guess it's because of different attitudes in these two parts of the world? American don't trust poor people with money?
- kartan 10y ago
  > Build enough market rate housing that the price falls to what low income people can afford and you don't need any low income housing. There are other kind of problems like buy-to-leave (http://www.designingbuildings.co.uk/wiki/Buy_to_leave http://www.designingbuildings.co.uk/wiki/Buy_to_leave). In that scenario the amount of housing to build to get to a point that it is affordable is a lot higher than it should be. > subsidizing construction If you mean state owned properties. I agree on that. Having low rent housing competing in the market bring prices down. But the number should be significant enough. Otherwise it just becomes a lottery where a few win but has not broader impact in the market.
  - AnthonyMouse 10y ago
    > There are other kind of problems like buy-to-leave (http://www.designingbuildings.co.uk/wiki/Buy_to_leave http://www.designingbuildings.co.uk/wiki/Buy_to_leave). In that scenario the amount of housing to build to get to a point that it is affordable is a lot higher than it should be. Not if you publicly announce your intentions ahead of time. Then people have no incentive to do that because the expectation will be for housing prices to decline and the investment to lose value. > If you mean state owned properties. I mean giving subsidies to builders who create new market rate housing. Although another major problem is zoning regulations that prevent new housing from being constructed regardless of financing.
    - spiffage 10y ago
      Subsidies would be mostly unnecessary. Merely allowing the housing to get built would be a gigantic improvement.
  - efaref 10y ago
    The solution to buy-to-leave is surely extremely high taxation on properties left empty (and I'm talking "10% of market value" levels of taxation, enough to obliterate any possible returns on investment).
    - simonh 10y ago
- eru 10y ago
  > If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved. Or just give poor people money?
  - fennecfoxen 10y ago
    And lose a third of it to the government bureaucracy? And probably construct a new generation of welfare-trap, making people afraid to earn more money for fear of losing their benefit?
    - eru 10y ago
      That giving the money to poor people was a suggestion relative to `give it to construction companies as a subsidy'---which is really, really stupid. Depending on your political leanings, you might be happier with just lower taxes. (And yes, the welfare-trap is probably real. Make sure to watch out for effective marginal tax rates of poor people especially.)
- mathattack 10y ago
  The dangerous problem is that it isn't the government who subsidizes rents, it's everyone else. If the subsidy were visible (the government writing a check to landlords) people would raise hell. Instead it's a hidden subsidy. The housing costs and rents of everyone goes up (including low-income income people) except for the lucky few who win the subsidized housing lottery. The intent of low income housing is laudable, but the execution causes more problems than it solves.
  - eru 10y ago
    Same for cars, and their parking. The government forces everyone to write cheques to car owners. (Even the car owners themselves, of course. It's a tragedy of the commons; like eg communal charging for electricity in a whole city.) http://www.uctc.net/research/papers/351.pdf http://www.uctc.net/research/papers/351.pdf
    - AnthonyMouse 10y ago
      It's not tragedy of the commons, it's path dependence. If you don't have excellent mass transit then you need parking, so you build parking. Then if you have parking everybody drives and nobody is willing to invest in mass transit, so you continue to need parking.
      - eru 10y ago
        I agree. Now, we mostly see the demand for parking at zero [#] marginal cost to the parker, not the demand for parking at its true cost---because the costs are shared by society. The short term demand for parking is relatively inelastic---so right after introducing pervasive charging for curbside parking and dropping minimum parking requirements for new developments, we will see roughly the same number of cars parked. (That's where your dependency comes in.) In the longer term, demand for parking is more elastic. (One can see a similar relationship between oil price and demand for gas guzzling cars: inelastic / path dependent in the short run. More elastic with enough time.) This holds even without public transport at all. Public transport is just one of the things that can serve as an (imperfect) substitute for private car rides. There are other ones, like car sharing, choosing job/home combinations that are closer to each other, telecommuting, home delivery of groceries, buying groceries in bulk, etc. (To take one example right now, people already prefer to work closer to home, and make trade-offs all the time when considering a home or a job. The point of indifference between eg home price/salary and commute length will shift. Full disclosure: I hate commuting myself and have decided to fork out the money to live very close to the office.) All the people in the market are probably much cleverer than me in coming up with substitutes. The price mechanism can guide them. Some of these substitutes can and are provided by the private market. Public transport is generally not. Though eg Britain has privatised train companies. Add in as another complication that without careful regulation, lots of public transport options are natural monopolies. One attempt to blunt this effect is by careful separation: eg run the rail network as a heavily regulated, public utility and make private companies bid for the right to run trains on it and for slots at the stations etc. And be very careful to specify that apart from meeting some minimum standards, the height of the bid alone determines the winner of the auction---politicians like beauty contests, because it gives them power to meddle. See https://en.wikipedia.org/wiki/Privatisation_of_British_Rail https://en.wikipedia.org/wiki/Privatisation_of_British_Rail for some lessons. Germany faces similar problems in eg their electrical power market. Since I'm already on a tangent: the American freight train market and its history are another interesting piece to learn from. (It's doing pretty well, mostly because they don't have many passenger trains clogging up the network like in Europe, and the new regulatory environment of the Staggers Rail Act (https://en.wikipedia.org/wiki/Staggers_Rail_Act https://en.wikipedia.org/wiki/Staggers_Rail_Act) seems to have worked out reasonably well. (They called it `deregulation', but that almost never happens---it's just a different form of regulation.) [#] Zero in terms of dollars plus the effort and hassle of congestion and cruising for parking.
- mcguire 10y ago
  "If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved." What makes you think they don't? In fact, wasn't that the problem in 2008?
  - zanny 10y ago
    2008 was because of incredibly dangerous mortgages being handed out due to a mix of deregulation and the government still guaranteeing corporate profits (bailouts or otherwise) so the mortgage lenders involved didn't need to actually accept the risks. It was at the point where a bank would write you a mortgage on practically anything for any amount because they were effectively free money with no risk to the lender. That environment did artificially inflate the growth of urban sprawl McMansions above any working class persons paygrade, but it was nowhere close to direct intentional housing subsidy beyond trying to achieve some pipe dream of families on 30k combined income affording a 5k square foot house.
apsec112 10y ago
This is true as far as it goes, but it doesn't consider opportunity cost. Instead of building special units that would benefit 4,000 people, a tiny fraction of the Bay Area, cities could charge an equivalent general fee that benefits everyone. The money could pay for mass transit, parks, services for the poor, programs for children, and so on.
natrius 10y ago
That Berkeley study only considers units subsidized by taxpayers when it talks about subsidized housing. Inclusionary zoning is not studied, and like all disincentives to build more homes, I think it makes displacement worse.

eru 10y ago

Building denser has to be part of the solution. One way is to build up. Another is to also remove minimum parking requirements: See http://www.nytimes.com/2010/08/15/business/economy/15view.html?_r=1 http://www.nytimes.com/2010/08/15/business/economy/15view.ht... and http://www.uctc.net/research/papers/351.pdf http://www.uctc.net/research/papers/351.pdf

IndianAstronaut 10y ago
An easy fix might be to turn single story strip malls into two story dual purpose buildings. Stores on bottom, rooms on top. I doubt this would do much to change aesthetics.
- rwhitman 10y ago
  Usually when a strip mall is re-zoned for mixed use, they demolish the older structure. But on the aesthetic side it's possible to turn these buildings into something interesting if they're renovated by someone creative. Worked across the street from this place when an architecture firm bought and renovated it: http://www.rchstudios.com/639-larchmont-boulevard/ http://www.rchstudios.com/639-larchmont-boulevard/
superuser2 10y ago
If you cut parking spaces without corresponding improvements in transit infrastructure, the city is strictly less livable and living sprawl looks like an even better idea.
- eru 10y ago
  You just start charging for curbside parking, and remove mandatory minimum parking requirements for buildings. People are still free to build parking places (and even charge for them). The hope is that by ending the parking subsidy for car owners, they choices will be informed by something closer to their full economic impact. (The cost can even be borne by the same people---ie currently a car owner might as well be paying for his own parking on average with other taxes / higher rent / etc. The economics still work out to better incentives, if we allocate the whole cost to the decision that causes it.)

mickrussom 10y ago

The bay area. The best, brightest, smartest, pedigreed, hardest working most motivated people on earth. And we cant solve the simplest problems in the Maslow's hierarchy. American Indians solved the housing problems with Teepees and Wigwams - so much for being "smart." There was an article recently where a google employee was living in a 24 ft truck in the google parking lot. This Bay Area mess is a self inflicted joke. What I find amazing is Tokyo. Tokyo, 1945, burned to the ground, population 3.5 million. Today, Tokyo is at 13 million and the Tokyo-Yokohama urban area is 37.8 million. And if you've ever been to japan public transportation is functioning and the society seems to nail basic needs much better than smarty-pants bay area.

meric 10y ago
That is the consequence of focusing on solving problems for the world, instead of connecting with the people next to us.
branchless 10y ago
American Indians didn't believe in land enclosure and didn't have banks issuing fiat money against land, they also bartered I think rather than issuing paper against future labour. I think hacker news isn't smart at all about fiat money because it's inextricably bound up with the venture capital world where you agree to hand over your labour for paper. Fiat money is ex nihilo and therefore creatable in infinite amounts. Many of you won't be old enough to realise the productivity gains computers have brought. It's amazing. Yet here we are all scratching around for enough to cover our basic bills. It will always be like this when you have land enclosure and tax labour. Create more and you can devote more to land costs. Hurry up, the rentiers are waiting.
pjc50 10y ago
"What do you mean 'we', white man?" The problem is there's no solidarity with the newcomers, and a strong desire by incumbents to keep the place the same and not turn it into skyscraper-filled Guangzhou. For a lot of people not building housing is an important priority in their life that they will fight for. Not to mention the question of money. You might equally ask why the tech industry feels the need to be stuck so tightly to SF when it's far more amenable to remote work than most industries. There's also the little matter of the earthquake zone.

youngButEager 10y ago

Even if all the tougher regs were removed tomorrow, very few builders with the large $$$ it takes to build housing are also stupid enough to risk government seizure in the future. The population will keep growing. The demand for housing will increase. The city leaders have already proven that stealing control of someone's personal asset is something they will do. (the personal asset in this case is a pre-1979 mom-and-pop rental property) After 1979, long-term tenants moved in and the supply of rent controlled units dropped to nothing very quickly. Then what? You can't tell the entrenched 'fast movers' who got there first with the cheaper rent control units "move out and give someone else a chance." Once a government shows a willingness to steal control of someone's personal assets, NO one who is smart enough to afford to build housing is also DUMB enough to build in rent control zones. Only enticements get builders to build in those areas. And most builders see this: - in Southern California there was a move to 'move the goalposts' and instead of pre-1979 rentals being rent controlled, now everything built pre-1995 would become rent controlled. - here recently on the Peninsula the same topic came up -- re-classify candidate rental properties for rent control up to 1995. Both of those were defeated. But it signaled to developers that the goalposts can be moved. Until leadership stop stealing control of people's personal assets, it doesn't matter if all building code/zoning/etc. rules are removed -- very few builders will put a new project in a rent control area, where city leaders have already stolen control of personal assets. "You like to steal control of assets that don't belong to you? I won't be building assets near you." SIMPLE AS THAT.

ksec 10y ago

I could only wish the same can be done for Hong Kong.

cbr 10y ago

Properties included in the model have total development potential, measured by FAR and residential units, of 20% or less of the maximum allowed under local zoning law. All properties above this level are considered "built out" and do not factor in to the maximum potential units number. FAR is "floor area ratio" and controls how many square feet of building you can have on a given lot. I'd love to have a slider for this, since increasing the allowable FAR is a good way to make more efficient use of limited land. (For example, zoning where I live sets a maximum FAR of 0.75, but most properties are over that limit and grandfathered in, averaging more like 0.90. Allowing people to build to 0.90 instead of 0.75 would not substantially change the feel of the area, and would make a lot more units available.)

kdeldycke 10y ago

norea-armozel 10y ago

I think the housing troubles could easily be fixed if those jobs which can easily be moved over to telecommuting were done so over time. Like honestly, how many devs and QA staff have to physically be in the same place throughout the work week? I'd understand if we're talking a firm that built physical prototypes for products but a website/service is easily accessible from the high rise office as it is from home office. At some point, software development is going to have to suck it up and be 100% remote for day-to-day concerns (excluding certain meetings with clients and the like).

yetanotheracc 10y ago

Looks like streamlining the red tape would be a good place to start (19k additional units, 500M in taxes).

jrockway 10y ago

This was a fun game! I'm running for governor next whenever that happens. I really had to put myself in the shoes of a California voter to get the numbers to work out. I think for all new housing going forward, it's important that we enrich the state's coffers so that all y'all don't have to pay as much property tax -- as manded by the State Constitution. I'm therefore raising the fees per unit to the maximum this game allows (really not high enough but it's good as a working model). I also think the whole point of California is big open parking lots and lots of freeways; so I'm going to require that density be lowered by 40% and parking increased by 40%. I've noticed that there's no affordable housing in the entire state pretty much, so each new project will be required to set aside 40% of their units to qualified people-in-need-of-affordable-stuff. It's a real problem and these fat cat housing developers only care about themselves. Additionally, the banks going bust really fucked our economy a couple years ago, so I'm mandating that they charge no less than 10% per year of interest. Finally, as a show of good faith, the State of California is levying a tax on property development of 16% of the total project cost. With this, there is a 0% chance of any new housing being built. You won the lottery when you happened to be alive 40 years ago to buy a house, and it's my job as the Governor of California to protect that asset for you and your children. Vote for jrockway!