4 ms·

That's a pretty misanthropic, and frankly, uninformed view. People know their interests. The tradeoff is transportation versus land. You want to stop paying re

by rsj_hn 9y ago

That's a pretty misanthropic, and frankly, uninformed view. People know their interests. The tradeoff is transportation versus land. You want to stop paying rent, but can't afford to buy your own place so you decide to buy farther out and spend more time traveling. We got a middle class in this country due to the Automobile and the suburbs, which let people get out from under the thumb of the landlord and buy their own land. Cars -- and transportation more generally -- is a produced good. Land is not a produced good. For all the complaints about sprawl, an economy in which we substitute produced goods for non-produced goods that are inherited from wealthy families is a better economy. Now you can argue that we should be using more electric vehicles, or fixed track vehicles, and all of that is worthy of discussion. But you cannot argue against sprawl. We continue to spread out as a society so that each person buys their own plot of land instead of paying endless rent to the landlords who monopolize the land in the city center. We continue to try to improve transportation and communication so that those who own key locations cannot extract the same rents from us as they used to. This is a virtuous feedback loop, and those wanting everyone to live as renters in large urban centers don't understand that this creates a permanent rentier class of landlords with unlimited power of taxation, and a permanent underclass of tenants who don't get to keep the gains of their increasing productivity. That's how you get serfs. That's why landlords have always opposed transportation innovation, whether it be opposition to the creation/subsidy of roads or of rail. It is also why we have a history of diffusion. The built up areas of cities house fewer people per square meter of land than they did 100 years ago, and there it's also fewer than 100 years before that, etc. Sprawl has been happening since Roman Times, and landlords have been screaming against it for all of history.

losteric 9y ago
How do condos fit into your model of what "we" want?
- rsj_hn 9y ago
  Condos are great, but not really relevant in the big scheme of things. They may be relevant in the future, but so far, the technological gains in the area of building construction have lagged the technological gains in the area of transportation and communication. Alternately, you can ask why does density keep declining even though we have the technology to build taller buildings? E.g. the skyline keeps going up but people/square meter in built up areas keep declining? Why is that? One reason is that building up is really inefficient. It costs a lot more in terms of $/sqft as you add another story, and those extra $ have to paid by the lower stories as well. They aren't just paid by the top floors. So even though tall buildings tend to capture our imagination, we don't really build a lot of tall buildings as a percentage of all buildings built. It's too expensive. Another reason is that space per person keeps increasing. We like to build our houses about 6% bigger each year. That number dwarfs any gains in density from taller buildings. E.g. in the past, you'd have 400 people living in a 4 story building and now you have 300 people living in an 8 story building. The building has gotten taller but density has decreased and the need for spreading out hasn't changed.
  - losteric 9y ago
    Sprawl simply is not an answer for most people. There is a limit to the commute anyone will tolerate, and people don't want to live in some cookie cutter house in the middle of nowhere. It's hard to build real livable towns quickly. American cities hesitate to raise construction limits until the problem gets really bad - selfish homeowners will voted against rezoning because they profit from the rising demand that prices others out of the area. It's extremely rare for a city to let supply freely follow demand. > Alternately, you can ask why does density keep declining even though we have the technology to build taller buildings? E.g. the skyline keeps going up but people/square meter in built up areas keep declining? Source?
closeparen 9y ago
Thank you. This is a point that usually gets missed on HN: car culture creates massive amounts of housing supply. It's hard enough to build at pace with urbanization. The contention for urban housing would be truly hopeless without the suburbs. Restricting a city's housing supply to what bicycles and buses could reasonably serve is equivalent to killing several hundred residential skyscrapers. Nevertheless, this isn't the middle ages, it's not that important to own land. Condos in high-rises work too. The current policy of low height limits is a lucrative handout to landlords: it keeps their competition small, just like restricting transportation does.
- rsj_hn 9y ago
  Unfortunately you can't blame this on zoning laws, because if you compare areas with and without strict zoning laws, you don't see much difference in this regard. E.g. San Francisco, for most of it's history, didn't have strict zoning laws. Yet, like most cities, you pretty much never tear down a whole neighborhood of two story buildings to replace them with 4 story buildings. Once an area is built up, it's built up. Whatever height/density there is tends to stay there. The way cities grow is by growing out -- recruiting new land -- and also via infill. Existing structures just aren't torn down that often. It happens, in the sense that houses are condemned and sometimes replaced with something bigger. But we don't see it happening at a fast rate, whether there are laws against it or not. Zoning laws are relevant at the margin -- when you add to the city, are you adding 2 story buildings or 4 story buildings. But once the neighborhood is built, that's the neighborhood for the next 100 years, whether there are strict zoning laws there or not. Assume no zoning laws at all. You as a contractor will need to contact all the individual owners and negotiate some deal with them to tear down a perfectly good property and replace it with something a bit taller. How likely is that to pencil out? You might be able to tear down one building, but not the whole neighborhood. The neighborhood will stay the way it is. There is also another issue at play, which is that once the first tall building is built, the land values go up in the other buildings around it. Land is one of those things where you don't need to actually build the housing in order for the landowner to benefit financially. The developer, after tearing down the first building will have to pay much more to buy out the second. And even more to buy out the third. Very quickly, the arbitrage profits that would drive a market solution disappear, so you don't get market solutions that support tearing down existing buildings on a mass scale. Historically, cities were changed like this after fires or earthquakes, but not in response to market forces. All those people who think that the reason Palo Alto is full of single family homes is just zoning, and if we were to get rid of zoning, Palo Alto would be filled with sky scrapers are in for a big disappointment. Market forces don't work very well here. Regardless of what happens with Zoning, Palo Alto will remain pretty much the same for a very long time, barring a massive fire. Even Nero had to start a fire, and he wasn't constrained by zoning.
Decade 9y ago
That is an overly simplistic view of land ownership. In reality, nobody is an island. Much of the value of your land is provided by the presence of nearby people. The landlords in the city center get a lot of benefit from their investment in the area, but in a functional environment they are limited by competition and regulation, i.e., neighbors building more densely and taxes that rise with land values. In effect, you should pay rent to the city for the benefit that it provides to you. Silicon Valley suffers from the limited mobility and perverse incentives from a bad 1978 tax law. http://www.slate.com/blogs/moneybox/2016/09/22/california_s_proposition_13_is_bad_policy_and_here_are_some_graphs_to_show.html http://www.slate.com/blogs/moneybox/2016/09/22/california_s_... Even outside California, American sprawl does not pay adequate rents. It was subsidized by tax benefits and federal matching funds for building to federal standards. In the long run, the suburbs need to either contract, going back to septic tanks and expensive bespoke utilities, or expand into full-fledged cities. https://www.strongtowns.org/the-growth-ponzi-scheme/ https://www.strongtowns.org/the-growth-ponzi-scheme/ https://www.strongtowns.org/journal/2016/6/22/greatest-hits-stroad-nation https://www.strongtowns.org/journal/2016/6/22/greatest-hits-... https://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-has-no-money https://www.strongtowns.org/journal/2017/1/9/the-real-reason... https://www.strongtowns.org/journal/2017/1/16/reinventing-the-city-at-scale https://www.strongtowns.org/journal/2017/1/16/reinventing-th...
- rsj_hn 9y ago
  I'm not sure what point you are responding to. I never said that man was an island. The idea that landlords "invest" in city centers by capturing rents is quite funny. They certainly aren't investing by earning income, nor is the quality of the housing stock very high. And of course Prop 13 ensures that landowners pay little in the way of taxes. So what exactly are these investments in exchange for people turning over 1/3 of their income to them? The truisms that Silicon Valley is limited by land aren't really relevant to any point being made by anyone in this discussion. The question is not whether land is a constraint, but what the best ways are of dealing with the constraint. So far, the consensus has been to recruit more land into use because improving transportation technologies gives us a more efficient way to recruit land rather than building taller buildings. This is true for a number of reasons -- e.g. look at the gains in efficiency in travel over the last 100 years versus the gains in efficiency in construction. Look at basic geography -- the ability to decrease transportation costs by 1/2 allows for a quadrupling of the available land that can be recruited. Or look at basic physics -- a 50% reduction in the cost of building an additional floor still requires tearing down the existing building before making it taller, as you can't just add another floor to an existing skyline like you can add another zone to an existing city. You need a stronger foundation before you can add a new floor. Anyways, you're not going to get anywhere with strawman arguments or by regurgitating talking points. Density has been declining all over the world in areas with or without zoning laws, because transportation has been advancing much faster than construction. This is a fundamental tradeoff that determines whether a region gets more or less dense.
solatic 9y ago
> You want to stop paying rent, but can't afford to buy your own place so you decide to buy farther out and spend more time traveling. This is the foundation your argument rests upon, but it's flawed: it assumes that urban property prices will always be high relative to the price of suburban housing due to the cheaper cost of low-rise construction. This is not inevitable because the proper economic comparison (especially in context) is the out-of-pocket cost in cash not only of housing but also of transportation. If suburban housing is cheaper than urban housing, but suburban transportation is so much more expensive than urban transportation that the combined cost of suburban housing plus transportation is higher than the combined cost of urban housing plus transportation, then it no longer makes microeconomic sense to move to the suburbs. In point of context, the real cost of suburban transportation is indeed much higher than the real cost of urban transportation. Suburban road infrastructure in America is falling apart because initial construction was subsidized by state and federal governments on the assumption that localities could pay for long-term maintenance, but most localities don't have that kind of budget and would need to raise local taxes by tens of thousands of dollars per household in order to afford proper maintenance (let alone expansions). High-density urban public transit, on the other hand, has high up-front costs for initial development, but can much more easily have its long-term maintenance costs covered by its large user base. TL:DR - you're wrong because the real cost of suburban lifestyles has been distorted through government policy to make suburban lifecycles artificially cheap, and correcting these distortions would make clear that sprawl is unsustainable.
- rsj_hn 9y ago
  > This is the foundation your argument rests upon, but it's flawed: it assumes that urban property prices will always be high relative to the price of suburban housing due to the cheaper cost of low-rise construction. LOL, I am saying the exact opposite! Look, this is econ 101 stuff -- I am describing a trade-off between transportation and construction technologies. Like any trade off, price will be at the indifference level between the two. So of course the price differential between living in the city center and a farther location will be the indifference point of cost of travel + price at new location vs price at old location. You and I agree. Now, look carefully at this equation: cost of travel + price at new location = price at old What happens when the cost of travel decreases, say due to some innovation in travel, or even due to a subsidy given to transportation? Does the suburb become more expensive or does the city become cheaper? Well, a bit of both, but mostly the city becomes much cheaper because there is a lot more land in the suburbs than in the cities. Alternately, look at what happens when transportation becomes more expensive. Does the suburb become cheaper or does the city center become more expensive? The city center becomes more expensive, because again there is a lot more land in the suburb. So what you have described in "refuting" my point is exactly the argument I have been making. That there is a trade off. Now, in this trade off, we have a situation in which so called advocates of housing have been condemning subsidies to transportation and in fact have been calling for reductions in transportation and taxes on transportation. They feel that the roads, automobile and the suburbs are a mistake and we should all be living in tall apartments in the city, with say nature preserves outside the city and no suburbs. My argument is that this causes the city center to be much more expensive, and so landlords benefit. This also hurts economic mobility. The second argument is that we have constrained areas like SV that are suffering from too expensive housing, and as a result we should again tax transportation more and subsidize housing more, etc. This is crazy. One nice thing about transportation, and why it should be subsidized, is that when you subsidize it you get more of it. It's a standard economic produced good. But when you subsidize land, you don't get more land, the land becomes more expensive. Look at Prop 13. It was a windfall for incumbent property owners but everyone who bought after Prop 13 came into effect had to pay for the benefit in the form of higher house prices, as the subsidy was capitalized into the current price. In the same way, the mortgage interest deduction doesn't help current owners, it helps the previous owners who bought when the law wasn't in effect, but for current buyers those benefits are already capitalized into the price. In other words, subsidies to property owners don't increase the supply of housing services consumed but subsidies to transportation do increase the supply of transportation services consumed. So if you are going to subsidize one thing to alleviate the housing crunch, subsidize transportation. Build a faster BART. Build more freeways. Give people vouchers for fuel. That is by far the most effective way to allow more people to work in Silicon Valley. It is unfortunately not politically correct, because the innumerate "smart growth" people think that we're going to tear down all of our single family homes and replace them with three story homes, thus tripling land density, and that this is the most efficient way of increasing housing available to centers like silicon valley.

by rsj_hn 9y ago

losteric 9y ago

How do condos fit into your model of what "we" want?

rsj_hn 9y ago
Condos are great, but not really relevant in the big scheme of things. They may be relevant in the future, but so far, the technological gains in the area of building construction have lagged the technological gains in the area of transportation and communication. Alternately, you can ask why does density keep declining even though we have the technology to build taller buildings? E.g. the skyline keeps going up but people/square meter in built up areas keep declining? Why is that? One reason is that building up is really inefficient. It costs a lot more in terms of $/sqft as you add another story, and those extra $ have to paid by the lower stories as well. They aren't just paid by the top floors. So even though tall buildings tend to capture our imagination, we don't really build a lot of tall buildings as a percentage of all buildings built. It's too expensive. Another reason is that space per person keeps increasing. We like to build our houses about 6% bigger each year. That number dwarfs any gains in density from taller buildings. E.g. in the past, you'd have 400 people living in a 4 story building and now you have 300 people living in an 8 story building. The building has gotten taller but density has decreased and the need for spreading out hasn't changed.
- losteric 9y ago
  Sprawl simply is not an answer for most people. There is a limit to the commute anyone will tolerate, and people don't want to live in some cookie cutter house in the middle of nowhere. It's hard to build real livable towns quickly. American cities hesitate to raise construction limits until the problem gets really bad - selfish homeowners will voted against rezoning because they profit from the rising demand that prices others out of the area. It's extremely rare for a city to let supply freely follow demand. > Alternately, you can ask why does density keep declining even though we have the technology to build taller buildings? E.g. the skyline keeps going up but people/square meter in built up areas keep declining? Source?

closeparen 9y ago

Thank you. This is a point that usually gets missed on HN: car culture creates massive amounts of housing supply. It's hard enough to build at pace with urbanization. The contention for urban housing would be truly hopeless without the suburbs. Restricting a city's housing supply to what bicycles and buses could reasonably serve is equivalent to killing several hundred residential skyscrapers. Nevertheless, this isn't the middle ages, it's not that important to own land. Condos in high-rises work too. The current policy of low height limits is a lucrative handout to landlords: it keeps their competition small, just like restricting transportation does.

rsj_hn 9y ago
Unfortunately you can't blame this on zoning laws, because if you compare areas with and without strict zoning laws, you don't see much difference in this regard. E.g. San Francisco, for most of it's history, didn't have strict zoning laws. Yet, like most cities, you pretty much never tear down a whole neighborhood of two story buildings to replace them with 4 story buildings. Once an area is built up, it's built up. Whatever height/density there is tends to stay there. The way cities grow is by growing out -- recruiting new land -- and also via infill. Existing structures just aren't torn down that often. It happens, in the sense that houses are condemned and sometimes replaced with something bigger. But we don't see it happening at a fast rate, whether there are laws against it or not. Zoning laws are relevant at the margin -- when you add to the city, are you adding 2 story buildings or 4 story buildings. But once the neighborhood is built, that's the neighborhood for the next 100 years, whether there are strict zoning laws there or not. Assume no zoning laws at all. You as a contractor will need to contact all the individual owners and negotiate some deal with them to tear down a perfectly good property and replace it with something a bit taller. How likely is that to pencil out? You might be able to tear down one building, but not the whole neighborhood. The neighborhood will stay the way it is. There is also another issue at play, which is that once the first tall building is built, the land values go up in the other buildings around it. Land is one of those things where you don't need to actually build the housing in order for the landowner to benefit financially. The developer, after tearing down the first building will have to pay much more to buy out the second. And even more to buy out the third. Very quickly, the arbitrage profits that would drive a market solution disappear, so you don't get market solutions that support tearing down existing buildings on a mass scale. Historically, cities were changed like this after fires or earthquakes, but not in response to market forces. All those people who think that the reason Palo Alto is full of single family homes is just zoning, and if we were to get rid of zoning, Palo Alto would be filled with sky scrapers are in for a big disappointment. Market forces don't work very well here. Regardless of what happens with Zoning, Palo Alto will remain pretty much the same for a very long time, barring a massive fire. Even Nero had to start a fire, and he wasn't constrained by zoning.

Decade 9y ago

That is an overly simplistic view of land ownership. In reality, nobody is an island. Much of the value of your land is provided by the presence of nearby people. The landlords in the city center get a lot of benefit from their investment in the area, but in a functional environment they are limited by competition and regulation, i.e., neighbors building more densely and taxes that rise with land values. In effect, you should pay rent to the city for the benefit that it provides to you. Silicon Valley suffers from the limited mobility and perverse incentives from a bad 1978 tax law. http://www.slate.com/blogs/moneybox/2016/09/22/california_s_proposition_13_is_bad_policy_and_here_are_some_graphs_to_show.html http://www.slate.com/blogs/moneybox/2016/09/22/california_s_... Even outside California, American sprawl does not pay adequate rents. It was subsidized by tax benefits and federal matching funds for building to federal standards. In the long run, the suburbs need to either contract, going back to septic tanks and expensive bespoke utilities, or expand into full-fledged cities. https://www.strongtowns.org/the-growth-ponzi-scheme/ https://www.strongtowns.org/the-growth-ponzi-scheme/ https://www.strongtowns.org/journal/2016/6/22/greatest-hits-stroad-nation https://www.strongtowns.org/journal/2016/6/22/greatest-hits-... https://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-has-no-money https://www.strongtowns.org/journal/2017/1/9/the-real-reason... https://www.strongtowns.org/journal/2017/1/16/reinventing-the-city-at-scale https://www.strongtowns.org/journal/2017/1/16/reinventing-th...

rsj_hn 9y ago
I'm not sure what point you are responding to. I never said that man was an island. The idea that landlords "invest" in city centers by capturing rents is quite funny. They certainly aren't investing by earning income, nor is the quality of the housing stock very high. And of course Prop 13 ensures that landowners pay little in the way of taxes. So what exactly are these investments in exchange for people turning over 1/3 of their income to them? The truisms that Silicon Valley is limited by land aren't really relevant to any point being made by anyone in this discussion. The question is not whether land is a constraint, but what the best ways are of dealing with the constraint. So far, the consensus has been to recruit more land into use because improving transportation technologies gives us a more efficient way to recruit land rather than building taller buildings. This is true for a number of reasons -- e.g. look at the gains in efficiency in travel over the last 100 years versus the gains in efficiency in construction. Look at basic geography -- the ability to decrease transportation costs by 1/2 allows for a quadrupling of the available land that can be recruited. Or look at basic physics -- a 50% reduction in the cost of building an additional floor still requires tearing down the existing building before making it taller, as you can't just add another floor to an existing skyline like you can add another zone to an existing city. You need a stronger foundation before you can add a new floor. Anyways, you're not going to get anywhere with strawman arguments or by regurgitating talking points. Density has been declining all over the world in areas with or without zoning laws, because transportation has been advancing much faster than construction. This is a fundamental tradeoff that determines whether a region gets more or less dense.

solatic 9y ago

> You want to stop paying rent, but can't afford to buy your own place so you decide to buy farther out and spend more time traveling. This is the foundation your argument rests upon, but it's flawed: it assumes that urban property prices will always be high relative to the price of suburban housing due to the cheaper cost of low-rise construction. This is not inevitable because the proper economic comparison (especially in context) is the out-of-pocket cost in cash not only of housing but also of transportation. If suburban housing is cheaper than urban housing, but suburban transportation is so much more expensive than urban transportation that the combined cost of suburban housing plus transportation is higher than the combined cost of urban housing plus transportation, then it no longer makes microeconomic sense to move to the suburbs. In point of context, the real cost of suburban transportation is indeed much higher than the real cost of urban transportation. Suburban road infrastructure in America is falling apart because initial construction was subsidized by state and federal governments on the assumption that localities could pay for long-term maintenance, but most localities don't have that kind of budget and would need to raise local taxes by tens of thousands of dollars per household in order to afford proper maintenance (let alone expansions). High-density urban public transit, on the other hand, has high up-front costs for initial development, but can much more easily have its long-term maintenance costs covered by its large user base. TL:DR - you're wrong because the real cost of suburban lifestyles has been distorted through government policy to make suburban lifecycles artificially cheap, and correcting these distortions would make clear that sprawl is unsustainable.

rsj_hn 9y ago
> This is the foundation your argument rests upon, but it's flawed: it assumes that urban property prices will always be high relative to the price of suburban housing due to the cheaper cost of low-rise construction. LOL, I am saying the exact opposite! Look, this is econ 101 stuff -- I am describing a trade-off between transportation and construction technologies. Like any trade off, price will be at the indifference level between the two. So of course the price differential between living in the city center and a farther location will be the indifference point of cost of travel + price at new location vs price at old location. You and I agree. Now, look carefully at this equation: cost of travel + price at new location = price at old What happens when the cost of travel decreases, say due to some innovation in travel, or even due to a subsidy given to transportation? Does the suburb become more expensive or does the city become cheaper? Well, a bit of both, but mostly the city becomes much cheaper because there is a lot more land in the suburbs than in the cities. Alternately, look at what happens when transportation becomes more expensive. Does the suburb become cheaper or does the city center become more expensive? The city center becomes more expensive, because again there is a lot more land in the suburb. So what you have described in "refuting" my point is exactly the argument I have been making. That there is a trade off. Now, in this trade off, we have a situation in which so called advocates of housing have been condemning subsidies to transportation and in fact have been calling for reductions in transportation and taxes on transportation. They feel that the roads, automobile and the suburbs are a mistake and we should all be living in tall apartments in the city, with say nature preserves outside the city and no suburbs. My argument is that this causes the city center to be much more expensive, and so landlords benefit. This also hurts economic mobility. The second argument is that we have constrained areas like SV that are suffering from too expensive housing, and as a result we should again tax transportation more and subsidize housing more, etc. This is crazy. One nice thing about transportation, and why it should be subsidized, is that when you subsidize it you get more of it. It's a standard economic produced good. But when you subsidize land, you don't get more land, the land becomes more expensive. Look at Prop 13. It was a windfall for incumbent property owners but everyone who bought after Prop 13 came into effect had to pay for the benefit in the form of higher house prices, as the subsidy was capitalized into the current price. In the same way, the mortgage interest deduction doesn't help current owners, it helps the previous owners who bought when the law wasn't in effect, but for current buyers those benefits are already capitalized into the price. In other words, subsidies to property owners don't increase the supply of housing services consumed but subsidies to transportation do increase the supply of transportation services consumed. So if you are going to subsidize one thing to alleviate the housing crunch, subsidize transportation. Build a faster BART. Build more freeways. Give people vouchers for fuel. That is by far the most effective way to allow more people to work in Silicon Valley. It is unfortunately not politically correct, because the innumerate "smart growth" people think that we're going to tear down all of our single family homes and replace them with three story homes, thus tripling land density, and that this is the most efficient way of increasing housing available to centers like silicon valley.