8 ms·

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 affo

• 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.