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I question the argument that existing residents have incentive to oppose new housing for pricing purposes. Increasing density in the long run increases property

by dv_dt 9y ago

I question the argument that existing residents have incentive to oppose new housing for pricing purposes. Increasing density in the long run increases property prices. Look at prices in any downtown city....

skewart 9y ago
You don't think the causality goes the other direction for high-density downtown neighborhoods? Lots of people want to live and work downtown (for a variety of reasons). When thousands of people are will to pay a premium to be within the same square mile it suddenly becomes possible to cover the massive cost of building a steel frame high-rise tower. If density itself increased property values then you could buy a few acres of ranch land in Montana for five hundred dollars, build a high-rise and rake in profit. Density is a trailing indicator of demand to live or work in some particular place. It's that demand that pushes up prices. Of course, in some particular cases where some parcel of vacant urban land had been zoned at low density and then suddenly became up-zoned to allow higher density then its value can go up as a result. It had been able to allow maybe just a $2.5 million single-family home, but now it's possible to build an apartment building worth $60 million, so of course the price would go up.
- HillaryBriss 9y ago
  i live in LA and my take is that people in single family dwelling residential blocks often resist construction of higher density buildings because quality of life goes down (i.e. more cars on the streets, more smog, traffic, noise, unfamiliar people, potential crime, less access to government resources like schools and law enforcement, per capita, because those resources are not built out as fast as population growth in LA). so, the proposal becomes: if these new zoning changes allow apartments on your block, you'll reap a 200% gain if you sell your house today, but you'll immediately lose backyard privacy, quiet streets, sunshine in parts of your yard, easy access to the freeway, and so your enjoyment of life will decrease and you'll have less free time outside of work, etc my take is simply that a lot of people think the price increase isn't high enough. if they want to keep their existing job in LA, where are they going to move to with that 200%? now, if the number were 2000% instead of 200% maybe zoning changes would be uncontroversial...
  - JamesBarney 9y ago
    But you have to remember that for that every home owner whose quality of life diminishes there are 100's of renters whose quality of life increases because they can live in a neighborhood they wouldn't have previously been able to afford.
    - hulahoof 9y ago
      For a majority of cases if the original home owners hadn't settled and allow infrastructure to mature around their investments then the density would likely not have increased to the point where re-zoning was viable. (At least that's the pattern I see in Australia, where we are at a much lower density across the board)
klipt 9y ago
> Increasing density in the long run increases property prices. I think you have your causality backwards there - city centers are inherently valuable (close proximity to jobs, food, recreation, etc) which favors dense development to take advantage of that value. On the other hand if you build a bunch of dense housing in the middle of the desert, it won't be worth much at all.
- dv_dt 9y ago
  Economics is a mesh of effects operating in a loop. There is no easily discerned causality. If no developer wants to build more houses (possibly asking for a zoning change) thereby increasing density, why would an existing homeowner have a decision at all to make in allowing it or preventing it?
- btmorex 9y ago
  On the other hand, all of your inherent values of a city center can be said to be caused by higher population density. Food and recreation spots will be opened close to where people live. Jobs are variable in terms of location, but there's certainly an advantage to moving close to population centers--at the very least, access to a vast workforce. My point is not really to argue that the opposite is true, rather that you can make an argument either way, whether higher demand leads to higher density or higher density leads to higher demand. There are certainly low density urban centers that no one wants to live in despite their proximity to jobs, food, and recreation.
- aninhumer 9y ago
  Obviously density isn't sufficient to create value on its own, but in the context of neighbourhoods of a city, more dense areas tend to become more valuable than less dense ones, because density supports better services. So if one suburb lets developers build high rises and another of similar value doesn't, the former is likely to end up more valuable in the future.
ScottBurson 9y ago
Limiting supply in the face of increasing demand causes prices to go up. Increasing density is the effect of higher prices, not the cause.

by dv_dt 9y ago

skewart 9y ago

You don't think the causality goes the other direction for high-density downtown neighborhoods? Lots of people want to live and work downtown (for a variety of reasons). When thousands of people are will to pay a premium to be within the same square mile it suddenly becomes possible to cover the massive cost of building a steel frame high-rise tower. If density itself increased property values then you could buy a few acres of ranch land in Montana for five hundred dollars, build a high-rise and rake in profit. Density is a trailing indicator of demand to live or work in some particular place. It's that demand that pushes up prices. Of course, in some particular cases where some parcel of vacant urban land had been zoned at low density and then suddenly became up-zoned to allow higher density then its value can go up as a result. It had been able to allow maybe just a $2.5 million single-family home, but now it's possible to build an apartment building worth $60 million, so of course the price would go up.

HillaryBriss 9y ago
i live in LA and my take is that people in single family dwelling residential blocks often resist construction of higher density buildings because quality of life goes down (i.e. more cars on the streets, more smog, traffic, noise, unfamiliar people, potential crime, less access to government resources like schools and law enforcement, per capita, because those resources are not built out as fast as population growth in LA). so, the proposal becomes: if these new zoning changes allow apartments on your block, you'll reap a 200% gain if you sell your house today, but you'll immediately lose backyard privacy, quiet streets, sunshine in parts of your yard, easy access to the freeway, and so your enjoyment of life will decrease and you'll have less free time outside of work, etc my take is simply that a lot of people think the price increase isn't high enough. if they want to keep their existing job in LA, where are they going to move to with that 200%? now, if the number were 2000% instead of 200% maybe zoning changes would be uncontroversial...
- JamesBarney 9y ago
  But you have to remember that for that every home owner whose quality of life diminishes there are 100's of renters whose quality of life increases because they can live in a neighborhood they wouldn't have previously been able to afford.
  - hulahoof 9y ago
    For a majority of cases if the original home owners hadn't settled and allow infrastructure to mature around their investments then the density would likely not have increased to the point where re-zoning was viable. (At least that's the pattern I see in Australia, where we are at a much lower density across the board)

klipt 9y ago

> Increasing density in the long run increases property prices. I think you have your causality backwards there - city centers are inherently valuable (close proximity to jobs, food, recreation, etc) which favors dense development to take advantage of that value. On the other hand if you build a bunch of dense housing in the middle of the desert, it won't be worth much at all.

dv_dt 9y ago
Economics is a mesh of effects operating in a loop. There is no easily discerned causality. If no developer wants to build more houses (possibly asking for a zoning change) thereby increasing density, why would an existing homeowner have a decision at all to make in allowing it or preventing it?
btmorex 9y ago
On the other hand, all of your inherent values of a city center can be said to be caused by higher population density. Food and recreation spots will be opened close to where people live. Jobs are variable in terms of location, but there's certainly an advantage to moving close to population centers--at the very least, access to a vast workforce. My point is not really to argue that the opposite is true, rather that you can make an argument either way, whether higher demand leads to higher density or higher density leads to higher demand. There are certainly low density urban centers that no one wants to live in despite their proximity to jobs, food, and recreation.
aninhumer 9y ago
Obviously density isn't sufficient to create value on its own, but in the context of neighbourhoods of a city, more dense areas tend to become more valuable than less dense ones, because density supports better services. So if one suburb lets developers build high rises and another of similar value doesn't, the former is likely to end up more valuable in the future.

ScottBurson 9y ago

Limiting supply in the face of increasing demand causes prices to go up. Increasing density is the effect of higher prices, not the cause.