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Taxing empty properties might help a bit. But it doesn't address the root of the problem. That housing has become such a scarce resource it can be treated as a

Taxing empty properties might help a bit. But it doesn't address the root of the problem. That housing has become such a scarce resource it can be treated as a commodity. We have the technology to build denser and higher. There's no economic reason that housing should cost much more than the cost of construction. Which should only get cheaper with time, as technology improves. Certainly not more expensive. But this doesn't happen. Why? Because the people commoditizing homes want to protect their investment. The scarcer housing is, the more money they make. It's an incredibly perverse system. It hurts the poor especially. Even the middle class ends up losing most of their income to it. It leads cities to stagnate instead of grow.

valuearb 10y ago
You are missing the bigger pictures. Housing costs are directly related to the cost of land, which is much higher in dense urban areas. The other driver isn't "commoditizing" homes, no individual owner can affect the market price of similar homes by not renting it. It's land use regulation, and rental regulations. The NIMBYs in every city want tight land use controls to restrict the construction of new housing that would impact the value of their homes. The renters want tons of regulations demanding things from landlords the renters can't get by contract. In NY or SF renting a home means giving a renter a massive amount of control over it. Evicting them when their lease expires and you want to sell or move back can be a nightmare. So the rental regulations are keeping homes off the market.
- toomuchtodo 10y ago
  I propose the following solutions: 1. A building's minimum height is dictated by the demand in the area; your existing building can stay, but if you want to bulldoze and rebuild as a developer, you must build up if the local real estate demand dictates so (I don't have enough experience to determine how you'd calculate demand, perhaps trailing rents for the last 24 months?). 2. Renters rights remain in place, with the government providing subsidies and relocation assistance when necessary (funded by a special property tax on non-owner occupied units). An equilibrium can be reached, but the idea of "property rights" will need to change a bit, with the understanding that a healthy neighborhood is more important to society than you having full control of your property (which is already the case, considering zoning laws and what not).
  - wbl 10y ago
    Get rid of maximum heights and FAR and 1 is solved automatically.
- losteric 10y ago
  I think zoning is the crux of it. NIMBYs distort the market through land use regulation, which leads to high demand / low supply, which leads to landlords that have no incentive to work with renters, ending up with renters fighting for rental regulations, which keeps homes off the market (as the land itself is profitable). Lower density zoning eventually ends up hurting mass transportation networks, incentivizing cars and leading to urban sprawl... which just spreads the problem over a wider area with more autonomous political representatives.
- loeg 10y ago
  > Housing costs are directly related to the cost of land, which is much higher in dense urban areas. Land and labor. The dense townhouse-style constructions have significant non-land cost. Anecdote from a tiny lot Seattle: 17% of our house "value" is land; the rest is all labor and materials.
- Houshalter 10y ago
  >Housing costs are directly related to the cost of land, which is much higher in dense urban areas. If you build up, the cost of land gets distributed over many more people. Instead the cost per unit approaches the cost of construction cost of building one more story. You don't even need super high rises to vastly increase the available housing. Even a small increase in housing would drive rent down a lot.
orschiro 10y ago
Hang on, wasn't the point of the article that there are many empty buildings due to speculations of their owners on the financial markets?
runamok 10y ago
With density (usually) comes more traffic and more requirement for services. That is what the people that are already there want to prevent. That being said that will always be the case and most cities find a way to deal with this though with growing pains.
- Houshalter 10y ago
  The alternative to density is sprawl, which is hardly better. That increases traffic even more. Since people can't afford to live close to where they work and have to drive miles to get there. No one except landlords benefit from this situation. Even the people that want to preserve the city suffer. When they kicked out because they can't afford the absurd rent.

valuearb 10y ago

You are missing the bigger pictures. Housing costs are directly related to the cost of land, which is much higher in dense urban areas. The other driver isn't "commoditizing" homes, no individual owner can affect the market price of similar homes by not renting it. It's land use regulation, and rental regulations. The NIMBYs in every city want tight land use controls to restrict the construction of new housing that would impact the value of their homes. The renters want tons of regulations demanding things from landlords the renters can't get by contract. In NY or SF renting a home means giving a renter a massive amount of control over it. Evicting them when their lease expires and you want to sell or move back can be a nightmare. So the rental regulations are keeping homes off the market.

toomuchtodo 10y ago
I propose the following solutions: 1. A building's minimum height is dictated by the demand in the area; your existing building can stay, but if you want to bulldoze and rebuild as a developer, you must build up if the local real estate demand dictates so (I don't have enough experience to determine how you'd calculate demand, perhaps trailing rents for the last 24 months?). 2. Renters rights remain in place, with the government providing subsidies and relocation assistance when necessary (funded by a special property tax on non-owner occupied units). An equilibrium can be reached, but the idea of "property rights" will need to change a bit, with the understanding that a healthy neighborhood is more important to society than you having full control of your property (which is already the case, considering zoning laws and what not).
- wbl 10y ago
  Get rid of maximum heights and FAR and 1 is solved automatically.
losteric 10y ago
I think zoning is the crux of it. NIMBYs distort the market through land use regulation, which leads to high demand / low supply, which leads to landlords that have no incentive to work with renters, ending up with renters fighting for rental regulations, which keeps homes off the market (as the land itself is profitable). Lower density zoning eventually ends up hurting mass transportation networks, incentivizing cars and leading to urban sprawl... which just spreads the problem over a wider area with more autonomous political representatives.
loeg 10y ago
> Housing costs are directly related to the cost of land, which is much higher in dense urban areas. Land and labor. The dense townhouse-style constructions have significant non-land cost. Anecdote from a tiny lot Seattle: 17% of our house "value" is land; the rest is all labor and materials.
Houshalter 10y ago
>Housing costs are directly related to the cost of land, which is much higher in dense urban areas. If you build up, the cost of land gets distributed over many more people. Instead the cost per unit approaches the cost of construction cost of building one more story. You don't even need super high rises to vastly increase the available housing. Even a small increase in housing would drive rent down a lot.

orschiro 10y ago

Hang on, wasn't the point of the article that there are many empty buildings due to speculations of their owners on the financial markets?

runamok 10y ago

With density (usually) comes more traffic and more requirement for services. That is what the people that are already there want to prevent. That being said that will always be the case and most cities find a way to deal with this though with growing pains.

Houshalter 10y ago
The alternative to density is sprawl, which is hardly better. That increases traffic even more. Since people can't afford to live close to where they work and have to drive miles to get there. No one except landlords benefit from this situation. Even the people that want to preserve the city suffer. When they kicked out because they can't afford the absurd rent.