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People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. Any conversation about 'right', 'wrong',

People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. Any conversation about 'right', 'wrong', 'moral', it all goes out the window. It really sucks that so much of peoples' value is often tied up in a single property. It would be a gobsmackingly terrible investment decision, if you didn't need shelter to live reasonably well. So let's be clear. These people are being incredibly selfish, and that is reprehensible. But they also don't really have a good alternative that wouldn't lose them a lot of money in a time where, if they're not in the class that owns multiple houses, they're already struggling. And that is sort of ameliorating imo.

Erik816 9y ago
It's not always clear the selfishness is strictly financial. If your land gets zoned for higher density development (or similar regulations/barriers are removed), and there is strong demand, then the value of your property can go way up. What they generally want is to enjoy the current character of their neighborhood (big lots, green space, still close to the city, walkable, etc.), but also realize substantial gains in housing value by keeping new housing off the market. They might gain even more money if their particular land could be developed and they moved, but then they woud have to move.
- ddlatham 9y ago
  Many people don't care about the potential monetary value change, it's only about the character of their neighborhood that you mention. They just enjoy the way of life in a low density, single family home neighborhood - the gardens, space, easy parking, low traffic, kids playing in the street. That's why they chose to live there.
  - Retric 9y ago
    I think their is a strong bias that people which free time tend to care more about the neighborhood. Most people may not agree, but we rarely hear from an unbiased same.
  - mercutio2 9y ago
    They are welcome to buy all the empty lots and tear downs and make community land trusts out of them, or otherwise legally restrict their property with covenants. But if they don’t own the property, they need to stop trying to get Berkeley zoning to break Berkeley laws. Thank goodness for Nancy Skinner’s law that will make the city pay legal fees if the city does more crazy stuff like this. I can’t wait to vote Jesse out of office at the next election.
  - leggomylibro 9y ago
    Good point; but if it's only that, why not simply cash out of the urban core once it starts to expand, and buy a larger property further out? You might deal with a longer commute, but that's just down to money; if you could afford the same square footage in the city center...but alas.
    - robertcope 9y ago
      This sort of answer angers me. I bought a house in town because it is convenient. I don't want to drive an hour to work each way. The idea that I will likely be taxed out of my home in ten or fifteen years is irritating and the idea that I should be happy about it because I'll make money on my house is also irritating.
  - deleted 9y ago
    [deleted]
  - morgante 9y ago
    Then move somewhere else with their millions in appreciated value. There are plenty of places in the country where you could buy a beautiful home with gardens, space, easy parking, low traffic, and kids playing in the street for 1/5 the cost of the Bay.
wavefunction 9y ago
If we're talking about selfishness leading to homelessness, why don't we just seize the non-primary houses of the wealthy to house the poor? Why is it that the middle class who only have their single single-family house are the selfish ones? No, on the eve of what looks like the most disastrous tax policy in the history of this nation for working and middle class folks, I don't think it's the middle class who are being selfish by a long shot.
- Analemma_ 9y ago
  I’m all for confiscating the wealth of the rich. But even I have to admit that this is one problem that it won’t solve. The issue at play here is land— raw acreage— and the density thereof. While the rich may own big houses it doesn’t even come close to the total acreage of all the single-family housing in an area.
  - jstanley 9y ago
    > I’m all for confiscating the wealth of the rich. Why?
- rspeer 9y ago
  In the cities with massive housing shortages I'm aware of, everyone -- NIMBY and YIMBY alike -- would seize the non-primary houses of the rich (or at least tax the shit out of them) if they could. The problem with this, of course, is that it involves picking an economic fight against rich people, the people who win economic fights. Anyway. A lot of zoning policy is set by people who claim to be middle-class but own fabulously valuable property. They could become rich at any moment they choose because they are lucky enough to live in a home that has become worth about $3 million due to the housing shortage. It's in their interest, of course, to stay where they are and keep the housing shortage going until their house is worth $4 million. If we had a land value tax, maybe people would prefer to have a sensible rate of development that kept their home price stable. But accidentally-wealthy homeowners are a huge voting demographic, on top of the fact that blatantly rich people have a lot of political influence. So the land value tax is politically infeasible.
- 9y ago
ajross 9y ago
> But they also don't really have a good alternative that wouldn't lose them a lot of money in a time where, if they're not in the class that owns multiple houses, they're already struggling These people are property owners in Berkeley, California. While I'm sure yarns can be spun about the difference between asset value and cash liquidity, this is just not an impoverished class, sorry. They've seen their property values go through the roof, then the trees, now through the first cloud layer into the open sky with eyes toward low orbit. Arguing that they don't have an "alternative" is a little spun. To wit: cry me a river. Build those homes.
- bagels 9y ago
  Not everyone who owns a home has purchased it decades ago...
  - ajross 9y ago
    Per Zillow, the very house in the linked article is up 14.6% just in the last 12 months. Decades what now?
    - smsm42 9y ago
      If somebody bought it recently, chances are they own no more that 20-30% of it. Which means if the value goes up 14%, they are in good place (though not seeing a cent of that money until they move), but if the value goes down 20%, they are in trouble. And if they have to move, they are in real trouble.
      - incompatible 9y ago
        I had the impression (from the last financial crisis) that if prices go down, home owners just mail the keys to the bank and walk away. Assuming they have little equity to start with, of course.
        rainbowmverse 9y ago
asabjorn 9y ago
65% of SF residents are renters. If renters did not vote in lockstep with landlords/homeowners and against developer interests, we could change the politics to allow more housing to be build and stop some of the more egregious abuses of existing processes. It does not make sense for renters to vote against developer interests and for homeowner/landlord interests, as a supply constrained housing market increases rent. Even if you have rent control, wouldn't it be nice if you could move out of your moldy unit into a new one or from a one bedroom into a two bedroom without breaking the bank? Or from Berkeley to Menlo Park if that is where you find a job, without loosing out in rent?
- lisper 9y ago
  They're building tons of new apartment buildings in Redwood City, which is right next to Menlo Park. So come on down!
  - asabjorn 9y ago
    Great! We need to do much more of that, and build it near public transit and extend public transit to new up zoned areas. For instance BART would enable a lot of people to avoid traffic if it extended around the whole bay and straight across from Fremont to the peninsula.
  - Rapzid 9y ago
    I'm not sure how I feel about apartment buildings. On one hand the density option can be good, on the other it's consolidating property and rents into the hands of even fewer..
    - jessaustin 9y ago
      Condo buildings can be just as dense as apartment buildings. The difference is that people without savings can live in apartment buildings.
      - Rapzid 9y ago
lisper 9y ago
Some people want to live in a place that looks like this: http://www.unitedcountry.com/CountryHomes/img/Country_Homes_7.jpg http://www.unitedcountry.com/CountryHomes/img/Country_Homes_... and some people want to live in a place that looks like this: https://www.cmgsite.com/wp-content/uploads/2015/03/Presidio-Landmark-0031.jpg https://www.cmgsite.com/wp-content/uploads/2015/03/Presidio-... and some people want to live in a place that looks like this: https://upload.wikimedia.org/wikipedia/commons/2/23/Hong_Kong_Skyline_Restitch_-_Dec_2007.jpg https://upload.wikimedia.org/wikipedia/commons/2/23/Hong_Kon... The problem is that someone who moves to the first type of place doesn't want to have to move again when it turns into the second type of place, and someone who moves to the second type of place doesn't want to move again when it turns into the third type of place. It's not entirely unreasonable.
- Groxx 9y ago
  Not entirely unreasonable, definitely. But it seems somewhat expect-able over the course of a lifetime. A lifetime ago the world was a rather different place, and I imagine the same was true of the lifetime before that. Seems like you either stay and fight (which history implies does not work) or keep moving to new similar-to-before places. Always. Expecting otherwise is not entirely reasonable either.
- philwelch 9y ago
  Well I guess we just need to figure out how to geographically distribute the world's human population once and for all and never do anything that will ever require that to change, then.
  - lliamander 9y ago
    Or you could let the people who live in a given place have a vote as to whether they are OK with new housing. And if the local residents don't want a new housing development because it negatively impacts their home value, then maybe someone will find a way to make it worth their while (i.e. real-estate developer grants current residents a stake in the returns of the new development if they stay for 5 years after the new housing is constructed).
closeparen 9y ago
Are we sure that upzoning destroys homeowner value? If the land under the house is authorized for a more productive structure, the land should be worth more. It doesn’t seem obvious whether or not this would counteract the loss of “quiet suburban neighborhood” appeal.
- Clubber 9y ago
  Houses are usually based on what houses in the area sell for. So if you own a $200K house and a builder buys your neighbor's house and demos it, then replaces it with 3 cheaper houses @ $100K, the average goes way down. It's more complicated than that, but you get the idea.
  - smsm42 9y ago
    > Houses are usually based on what houses in the area sell for. I think it's more complicated than that - certainly $100K houses would not be the same size and features as $200K one, and when determining the price estimates, this is usually taken into account - 1bd/1br is not the same as 3bd/3br.
    - Clubber 9y ago
      It is more complicated, like I said. It's not a linear valuation, meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neighborhood, but it will be lower and push down the average home value. If houses in a neighborhood were sold strictly on a price / sq. foot basis, there probably wouldn't be much devaluation, in fact you would probably get an increase valuation based the costs incurred to just build a house without regards to sq footage. (meaning the first $125K is the first 1000 sq feet and the 2nd 1000 is only $75K more.
      - smsm42 9y ago
        > meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neighborhood, but it will be lower and push down the average home value. Average home value is largely meaningless if you are averaging substantially different houses. It only has meaning if we're talking about heterogeneous neighborhood or about something like a large area in rough comparison with another large area. Well, maybe not entirely meaningless as you still can get rough indicator of "price level", but useless in comparing the effect of this or that measure. It's like the reverse of the joke when Bill Gates walks into a pub and average income of everybody in the pub doubles. May be technically true but not a useful measure of anything.
Clubber 9y ago
>People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. You're damn right. I assume you don't give half your paycheck away either. >Any conversation about 'right', 'wrong', 'moral', it all goes out the window. Right wrong and moral? From perspective of whom? Those are such subjective constructs. Is it right, wrong or moral to actively attempt to triple the population of an already densely populated area when there are millions of underutilized acreage in the continental US? >It really sucks that so much of peoples' value is often tied up in a single property. It would be a gobsmackingly terrible investment decision, if you didn't need shelter to live reasonably well. It's actually a pretty decent investment, but does involve risk. Instead of paying someone rent and owning jack shit, you are paying a mortgage and keeping at least some of that money. Most houses will increase in value as well. Also, your mortgage payment won't go up every few years like rents do, particularly in densely populated areas. You also get a decent tax break on a mortgage. You can also borrow against it at much better rates than cards when you are in a pinch (or are even unemployed). >These people are being incredibly selfish, and that is reprehensible. Which people? The people who bought houses, or the people who want to devalue someone else's home so they can get cheaper rent in a already overpopulated area that they just have to move to? That isn't entirely clear to me.
- nine_k 9y ago
  > millions of underutilized acreage in the continental US? It's that land in Bay Area and SF which is underutilized. Because high density makes sense. Yes, I enjoy living in NYC. > devalue someone else's home A house is not money. It does not have a guaranteed value. It's property, like stock. If one's shares go down because of e.g. competition, people don't see it as an unjust assault.
  - prklmn 9y ago
    Don’t confuse yourself - YOU don’t see it as an unjust assault, not “people.” The 64% of Americans who do own a home would say otherwise. Also, houses are not like stock, nobody lives in stock.
    - 9y ago
jseliger 9y ago
People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. Any conversation about 'right', 'wrong', 'moral', it all goes out the window. Yet this problem got started in the 1970s: https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-the-1970s https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-..., and I don't think human nature suddenly changed then. So what did? In addition, Tokyo doesn't have this problem: https://www.vox.com/2016/8/8/12390048/san-francisco-housing-costs-tokyo https://www.vox.com/2016/8/8/12390048/san-francisco-housing-.... So it's probably something other than pure selfishness per se.
jogjayr 9y ago
> But they also don't really have a good alternative that wouldn't lose them a lot of money in a time where, if they're not in the class that owns multiple houses, they're already struggling. That's not true at all. They could sell their homes for their mindbogglingly inflated values to condo developers in exchange for multiple units in the new buildings. They wouldn't have to move at all (except temporarily, while construction is going on), and would even gain an asset that they can rent out or sell later. What they're fighting for is the right to keep their low-density suburb, single-family home, lifestyle. Which would be fine except that their insistence on doing this is impoverishing everyone else.
- leggomylibro 9y ago
  Heh. Try telling the average family that their lifestyle is unsustainable and unfairly subsidized by others. They will have a litany of troubles and problems that they go through, ready to fire off, no matter how well off they are. I know I have one. It's not fair, so I try not to listen to it, but I do have one. A whole litany.
  - AckSyn 9y ago
    > Try telling the average family that their lifestyle is unsustainable and unfairly subsidized by others. Well the fact remains that it does not happen. When I purchased my home in 2003 I received no tax credits, support from the government, bonuses, or a pat on the back. I put 20% down after saving up everything I could for a solid 5 years after landing a great job after college, which again wasn't subsidized or had grants for. No one else does this but me and the ridiculous sense of entitlement or attitude of it being "unfair" that someone else can't afford it really stems from a deeper issue.
    - einarvollset 9y ago
      Prediction: you vote GOP, yet do not consider the support you get from the government in terms a mortgage interest deduction, FHA loan eligibility of people who could buy your house propping your house value up, nor in fact how Fannie Mae and Freddie Mac (govt supported) actions makes it possible for you to rely on a fixed 30 year rate for your mortgage. Oh no, you did it all by yourself.
conanbatt 9y ago
> People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. Any conversation about 'right', 'wrong', 'moral', it all goes out the window. I disagree with the tone. Everyone is selfish. Everyone wants either their own benefit or their own benefit. Everyone is grasping. Moral, wrong or right can't correct that behavior, even if you could agree to it. Thats why the moral, wrong or right decisions dont have to be about what people want, but what you allow people to do or not do.
jstanley 9y ago
I don't understand why people want house prices to go up. I own a small house (with a mortgage). I'm hoping house prices go down over the next 10 years. I'll probably want to buy a larger house, so if prices come down I don't have to come up with as much cash. OK, I'll get less for the house I'm selling, but the difference in the prices is also less than if they were to go up. As long as I sell the current house for enough to pay off what's left of the mortgage, I think I'm winning if house prices go down.
- sokoloff 9y ago
  Because many people can't budget or plan on a multi-year, multi-step horizon like you are expressing above. For those people, if their house goes up in value, it represents an important source of financial security (if they haven't gutted it via refinancing and HELOCs for renovations returning $0.60 on the dollar, new cars or vacations) Even for people with decent financial planning skills, the home is such a large investment and typically bought with 5-33x leverage, that a small price drop is dangerous to their position.
- conanbatt 9y ago
  I get this concept but I dont think thats how it works. The correlation on the prices of a 1000 sq ft to a 3000 sq ft is not 1: if the first one increases 100% the second one might increase 50%. In cities, it is often that bigger appts are cheaper per sq/ft because the market for them is much smaller than 1br/2br.
- prklmn 9y ago
  It’s all relative. You own a cheaper house now so if prices went down your absolute loss in selling would be less than someone who sells a house that’s worth let’s say 10x more than yours, maybe the next house you want to buy. Also, not everyone is in the market for a new house in the 10 years, so sure you want houses to be cheap because you’re going to be buying, but it would be the opposite if you were looking to downsize. Home prices going up means personal net worths going up - most people like that.
- shostack 9y ago
  Because mortgages are one of the few leveraged investments Joe Consumer has access to. As such, it is often one of the only ways people can retire or afford property at all. Also, because it is highly leveraged for many, especially in the Bay, to have it reduce in value can actually easily bankrupt you. But for many, they feel they need to take the risk to lock in home prices, and also to grab what they still cling to as "the american dream" of owning a small single family home. Can't say I blame people for being upset by that, especially after this tax reform theft.
MichaelBurge 9y ago
I've never understood that. If people want to buy your single-family home and build a $1 billion skyscraper with 10000 units, surely it's worth more than if the law prevents that construction? If you had a single-family home in the middle of Manhattan, it'd be worth a lot just from the land. It seems like you'd want to encourage the city around you to be as highly developed as possible if money was the main concern.
dcosson 9y ago
I am sensitive to the investment aspect, because it is true what you thought you were buying has changed and possibly in a way that makes it less valuable. Ultimately, it’s not what you actually bought so that’s kind of on you. But I wonder if developers offered to buy neighboring houses at the same time they buy the first house, if that would help at all. Then the neighbors have the option of not losing any value because of the shadows that will go up or whatever. This would require by-right type laws where the developers could trust that housing is actually possible to build on these lots, otherwise buying multiple properties may be too big of a risk. I suspect NIMBYs might like this idea even less since it could more drastically change a bigger part of the neighborhood, but it seems like it would at least partially address their stated concerns of neighbors being financially impacted.
geebee 9y ago
Is resistance to zoning changes economically motivated? I'm not absolutely sure it necessarily is. In San Francisco, I actually think that nimbyism may not be the result of a desire to maximize the value of an asset. Here's why - it's true that the value of a SFH in many parts of SF would drop if a large apartment were built next door, if that house could only be sold as a SFH. But what would the value of the land beneath it be if zoning restrictions were relaxed? To be clear, I'm not sure, but I have a friend who owns a SF on one of those rare streets that is zoned R-2, and some of his neighbors have been cleared to build two flats where there was once a SFH. The two flats sell for considerably more than the SFH would have. Now, this might still reflect scarcity, and a rare flat in an otherwise SFH neighborhood might be more desirable than an entire neighborhood of them (maybe, but not necessarily, I doubt it - nob hill and Russian hill are more expensive than the SFH parts of the sunset and excelsior, and Manhattan/(+ some other parts of New York), one of the few urban areas that is more expensive than SF, is also the only large scale urban area that is considerably more densely built. Even if lots of people were to build 2 or 3 unit flats, vertically, that's a huge amount of additional housing. The value of the land sitting beneath the SFH would reflect this, even if the current owner chose not to undertake the project. I also believe that greater density in SF might very well stimulate additional economic activity, which could end up offsetting the additional supply, eat least enough that 3 apartments would be worth more than one house on the same plot of land (again, if density meant lower prices, Manhattan would be the cheapest place to rent in the entire US, and Nob Hill would be much cheaper than the Sunset). When I heard what people on this street had done, I was almost jealous. They replaced their aging SFH with two apartments that were just as spacious and nicer, building vertically. The backyard is now shared, but it's still big. And they got so much $$ for the additional unit that their mortgage is paid off with a nice fat chunk of change left over. I suspect that much of SF's famous nimbyism is actually motivated by a desire for things to stay the same. People like their SFH neighborhoods, and don't really want it to chance. They don't want to tear down their house and build a bunch of flats, even if this would be a way to wring a lot more money out of their investment - and because they don't want to, they don't stand to benefit if their neighbors do this either. Alternatively, they might not be aware of this possibility. Or, in a city of 75% renters, they may rent and not see any benefit to this new construction - at best, disruption during construction, at worst, losing their current rental. It may indeed be selfish, but I'm not sure it's asset maximization behind all this.
Sukotto 9y ago
> a gobsmackingly terrible investment decision Speaking only about the "investment" part of home ownership, I found this blog post insightful, and maybe interesting enough to share here: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrib... Here is a somewhat paraphrased version of the author's main points: * Not just an initial, but a relentlessly ongoing drain on the cash reserves of the owner requiring an endless parade of repairs and maintenance without which it will crumble * Illiquid. It takes months of time and effort to buy or sell * Expensive to buy and sell with very high transaction costs: 5%+ commissions, buying and selling * Undiversified. Represents a disproportionate percentage of a person’s net worth * Complex to buy or sell * Lots of extra fees and reports and documents you must pay for * Generates low returns. At or below the inflation rate * Leveraged. If the price goes up a little bit, leverage will magnify this and people will convince themselves it’s actually a good investment! Most will never consider that leverage is also very high risk and could just as easily wipe them out * Mortgaged. You pay interest on the loans. Many people borrow money against it more than once * Unproductive. Never pays interest, never pays dividends * Immobile. Fixed to one geographical spot so at any given time only a tiny group (if any) of potential buyers for it will exist * Subject to the fortunes of a single neighborhood * Fragile. Easily damaged by weather, fire, vandalism and the like. As such it requires expensive insurance to cover these risks. Often the the bad things that are most likely to happen aren’t actually covered * Heavily taxed. * * If it should go up in value, we tax that gain. If it goes down in value we do not offer a balancing tax deduction on the loss like with other investments * * Taxed annually, not just when bought or sold * * Tax rate goes up as value increases. Does not go down when value decreases * Subject to eminent domain * Increases stress, leads to more divorces, but then be impossible to divide (Note, I am biased against homeownership. Which hasn't stopped me from recently buying a house for a variety of reasons, mostly revolving around space needs for my family that could not be met with the available rental options in my current city)
- dragonwriter 9y ago
  > Tax rate goes up as value increases. Does not go down when value decreases The tax rate usually doesn't change in either direction with value, except in states like California which limit assessment increases, where the effective rate decreases if value increases rapidly (because the tax basis increases less than the full increase in value). And in most jurisdictions, value decreases are fully reflected in tax assessments, even when increases are only partially captured.
andrewjl 9y ago
No doubt, homeowners are in no way incentivized to fix the housing shortage. Legislate away their ability to unilaterally prevent more housing to be built, which is what California is doing. There is NO reason we can't have the same rate of home construction as Seattle, which built homes at the fastest rate in the nation. No infrastructure? Build it. No school slots? Build more. The Bay Aarea can easily accommodate double digit population increases with almost no perceived increase in density. It just requires action rather than whining about neighborhood "character" or traffic.
galfarragem 9y ago
> People are selfish Better: people are self-perserving.

Erik816 9y ago

It's not always clear the selfishness is strictly financial. If your land gets zoned for higher density development (or similar regulations/barriers are removed), and there is strong demand, then the value of your property can go way up. What they generally want is to enjoy the current character of their neighborhood (big lots, green space, still close to the city, walkable, etc.), but also realize substantial gains in housing value by keeping new housing off the market. They might gain even more money if their particular land could be developed and they moved, but then they woud have to move.

ddlatham 9y ago
Many people don't care about the potential monetary value change, it's only about the character of their neighborhood that you mention. They just enjoy the way of life in a low density, single family home neighborhood - the gardens, space, easy parking, low traffic, kids playing in the street. That's why they chose to live there.
- Retric 9y ago
  I think their is a strong bias that people which free time tend to care more about the neighborhood. Most people may not agree, but we rarely hear from an unbiased same.
- mercutio2 9y ago
  They are welcome to buy all the empty lots and tear downs and make community land trusts out of them, or otherwise legally restrict their property with covenants. But if they don’t own the property, they need to stop trying to get Berkeley zoning to break Berkeley laws. Thank goodness for Nancy Skinner’s law that will make the city pay legal fees if the city does more crazy stuff like this. I can’t wait to vote Jesse out of office at the next election.
- leggomylibro 9y ago
  Good point; but if it's only that, why not simply cash out of the urban core once it starts to expand, and buy a larger property further out? You might deal with a longer commute, but that's just down to money; if you could afford the same square footage in the city center...but alas.
  - robertcope 9y ago
    This sort of answer angers me. I bought a house in town because it is convenient. I don't want to drive an hour to work each way. The idea that I will likely be taxed out of my home in ten or fifteen years is irritating and the idea that I should be happy about it because I'll make money on my house is also irritating.
- deleted 9y ago
  [deleted]
- morgante 9y ago
  Then move somewhere else with their millions in appreciated value. There are plenty of places in the country where you could buy a beautiful home with gardens, space, easy parking, low traffic, and kids playing in the street for 1/5 the cost of the Bay.

wavefunction 9y ago

If we're talking about selfishness leading to homelessness, why don't we just seize the non-primary houses of the wealthy to house the poor? Why is it that the middle class who only have their single single-family house are the selfish ones? No, on the eve of what looks like the most disastrous tax policy in the history of this nation for working and middle class folks, I don't think it's the middle class who are being selfish by a long shot.

Analemma_ 9y ago
I’m all for confiscating the wealth of the rich. But even I have to admit that this is one problem that it won’t solve. The issue at play here is land— raw acreage— and the density thereof. While the rich may own big houses it doesn’t even come close to the total acreage of all the single-family housing in an area.
- jstanley 9y ago
  > I’m all for confiscating the wealth of the rich. Why?
rspeer 9y ago
In the cities with massive housing shortages I'm aware of, everyone -- NIMBY and YIMBY alike -- would seize the non-primary houses of the rich (or at least tax the shit out of them) if they could. The problem with this, of course, is that it involves picking an economic fight against rich people, the people who win economic fights. Anyway. A lot of zoning policy is set by people who claim to be middle-class but own fabulously valuable property. They could become rich at any moment they choose because they are lucky enough to live in a home that has become worth about $3 million due to the housing shortage. It's in their interest, of course, to stay where they are and keep the housing shortage going until their house is worth $4 million. If we had a land value tax, maybe people would prefer to have a sensible rate of development that kept their home price stable. But accidentally-wealthy homeowners are a huge voting demographic, on top of the fact that blatantly rich people have a lot of political influence. So the land value tax is politically infeasible.
9y ago

ajross 9y ago

> But they also don't really have a good alternative that wouldn't lose them a lot of money in a time where, if they're not in the class that owns multiple houses, they're already struggling These people are property owners in Berkeley, California. While I'm sure yarns can be spun about the difference between asset value and cash liquidity, this is just not an impoverished class, sorry. They've seen their property values go through the roof, then the trees, now through the first cloud layer into the open sky with eyes toward low orbit. Arguing that they don't have an "alternative" is a little spun. To wit: cry me a river. Build those homes.

bagels 9y ago
Not everyone who owns a home has purchased it decades ago...
- ajross 9y ago
  Per Zillow, the very house in the linked article is up 14.6% just in the last 12 months. Decades what now?
  - smsm42 9y ago
    If somebody bought it recently, chances are they own no more that 20-30% of it. Which means if the value goes up 14%, they are in good place (though not seeing a cent of that money until they move), but if the value goes down 20%, they are in trouble. And if they have to move, they are in real trouble.
    - incompatible 9y ago
      I had the impression (from the last financial crisis) that if prices go down, home owners just mail the keys to the bank and walk away. Assuming they have little equity to start with, of course.
      - rainbowmverse 9y ago

asabjorn 9y ago

65% of SF residents are renters. If renters did not vote in lockstep with landlords/homeowners and against developer interests, we could change the politics to allow more housing to be build and stop some of the more egregious abuses of existing processes. It does not make sense for renters to vote against developer interests and for homeowner/landlord interests, as a supply constrained housing market increases rent. Even if you have rent control, wouldn't it be nice if you could move out of your moldy unit into a new one or from a one bedroom into a two bedroom without breaking the bank? Or from Berkeley to Menlo Park if that is where you find a job, without loosing out in rent?

lisper 9y ago
They're building tons of new apartment buildings in Redwood City, which is right next to Menlo Park. So come on down!
- asabjorn 9y ago
  Great! We need to do much more of that, and build it near public transit and extend public transit to new up zoned areas. For instance BART would enable a lot of people to avoid traffic if it extended around the whole bay and straight across from Fremont to the peninsula.
- Rapzid 9y ago
  I'm not sure how I feel about apartment buildings. On one hand the density option can be good, on the other it's consolidating property and rents into the hands of even fewer..
  - jessaustin 9y ago
    Condo buildings can be just as dense as apartment buildings. The difference is that people without savings can live in apartment buildings.
    - Rapzid 9y ago

lisper 9y ago

Some people want to live in a place that looks like this: http://www.unitedcountry.com/CountryHomes/img/Country_Homes_7.jpg http://www.unitedcountry.com/CountryHomes/img/Country_Homes_... and some people want to live in a place that looks like this: https://www.cmgsite.com/wp-content/uploads/2015/03/Presidio-Landmark-0031.jpg https://www.cmgsite.com/wp-content/uploads/2015/03/Presidio-... and some people want to live in a place that looks like this: https://upload.wikimedia.org/wikipedia/commons/2/23/Hong_Kong_Skyline_Restitch_-_Dec_2007.jpg https://upload.wikimedia.org/wikipedia/commons/2/23/Hong_Kon... The problem is that someone who moves to the first type of place doesn't want to have to move again when it turns into the second type of place, and someone who moves to the second type of place doesn't want to move again when it turns into the third type of place. It's not entirely unreasonable.

Groxx 9y ago
Not entirely unreasonable, definitely. But it seems somewhat expect-able over the course of a lifetime. A lifetime ago the world was a rather different place, and I imagine the same was true of the lifetime before that. Seems like you either stay and fight (which history implies does not work) or keep moving to new similar-to-before places. Always. Expecting otherwise is not entirely reasonable either.
philwelch 9y ago
Well I guess we just need to figure out how to geographically distribute the world's human population once and for all and never do anything that will ever require that to change, then.
- lliamander 9y ago
  Or you could let the people who live in a given place have a vote as to whether they are OK with new housing. And if the local residents don't want a new housing development because it negatively impacts their home value, then maybe someone will find a way to make it worth their while (i.e. real-estate developer grants current residents a stake in the returns of the new development if they stay for 5 years after the new housing is constructed).

closeparen 9y ago

Are we sure that upzoning destroys homeowner value? If the land under the house is authorized for a more productive structure, the land should be worth more. It doesn’t seem obvious whether or not this would counteract the loss of “quiet suburban neighborhood” appeal.

Clubber 9y ago
Houses are usually based on what houses in the area sell for. So if you own a $200K house and a builder buys your neighbor's house and demos it, then replaces it with 3 cheaper houses @ $100K, the average goes way down. It's more complicated than that, but you get the idea.
- smsm42 9y ago
  > Houses are usually based on what houses in the area sell for. I think it's more complicated than that - certainly $100K houses would not be the same size and features as $200K one, and when determining the price estimates, this is usually taken into account - 1bd/1br is not the same as 3bd/3br.
  - Clubber 9y ago
    It is more complicated, like I said. It's not a linear valuation, meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neighborhood, but it will be lower and push down the average home value. If houses in a neighborhood were sold strictly on a price / sq. foot basis, there probably wouldn't be much devaluation, in fact you would probably get an increase valuation based the costs incurred to just build a house without regards to sq footage. (meaning the first $125K is the first 1000 sq feet and the 2nd 1000 is only $75K more.
    - smsm42 9y ago
      > meaning a 1500 sq. foot house won't be 1/2 the cost as a 3000 sq. foot house in the same neighborhood, but it will be lower and push down the average home value. Average home value is largely meaningless if you are averaging substantially different houses. It only has meaning if we're talking about heterogeneous neighborhood or about something like a large area in rough comparison with another large area. Well, maybe not entirely meaningless as you still can get rough indicator of "price level", but useless in comparing the effect of this or that measure. It's like the reverse of the joke when Bill Gates walks into a pub and average income of everybody in the pub doubles. May be technically true but not a useful measure of anything.

Clubber 9y ago

>People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. You're damn right. I assume you don't give half your paycheck away either. >Any conversation about 'right', 'wrong', 'moral', it all goes out the window. Right wrong and moral? From perspective of whom? Those are such subjective constructs. Is it right, wrong or moral to actively attempt to triple the population of an already densely populated area when there are millions of underutilized acreage in the continental US? >It really sucks that so much of peoples' value is often tied up in a single property. It would be a gobsmackingly terrible investment decision, if you didn't need shelter to live reasonably well. It's actually a pretty decent investment, but does involve risk. Instead of paying someone rent and owning jack shit, you are paying a mortgage and keeping at least some of that money. Most houses will increase in value as well. Also, your mortgage payment won't go up every few years like rents do, particularly in densely populated areas. You also get a decent tax break on a mortgage. You can also borrow against it at much better rates than cards when you are in a pinch (or are even unemployed). >These people are being incredibly selfish, and that is reprehensible. Which people? The people who bought houses, or the people who want to devalue someone else's home so they can get cheaper rent in a already overpopulated area that they just have to move to? That isn't entirely clear to me.

nine_k 9y ago
> millions of underutilized acreage in the continental US? It's that land in Bay Area and SF which is underutilized. Because high density makes sense. Yes, I enjoy living in NYC. > devalue someone else's home A house is not money. It does not have a guaranteed value. It's property, like stock. If one's shares go down because of e.g. competition, people don't see it as an unjust assault.
- prklmn 9y ago
  Don’t confuse yourself - YOU don’t see it as an unjust assault, not “people.” The 64% of Americans who do own a home would say otherwise. Also, houses are not like stock, nobody lives in stock.
  - 9y ago

jseliger 9y ago

People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. Any conversation about 'right', 'wrong', 'moral', it all goes out the window. Yet this problem got started in the 1970s: https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-the-1970s https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-..., and I don't think human nature suddenly changed then. So what did? In addition, Tokyo doesn't have this problem: https://www.vox.com/2016/8/8/12390048/san-francisco-housing-costs-tokyo https://www.vox.com/2016/8/8/12390048/san-francisco-housing-.... So it's probably something other than pure selfishness per se.

jogjayr 9y ago

> But they also don't really have a good alternative that wouldn't lose them a lot of money in a time where, if they're not in the class that owns multiple houses, they're already struggling. That's not true at all. They could sell their homes for their mindbogglingly inflated values to condo developers in exchange for multiple units in the new buildings. They wouldn't have to move at all (except temporarily, while construction is going on), and would even gain an asset that they can rent out or sell later. What they're fighting for is the right to keep their low-density suburb, single-family home, lifestyle. Which would be fine except that their insistence on doing this is impoverishing everyone else.

leggomylibro 9y ago
Heh. Try telling the average family that their lifestyle is unsustainable and unfairly subsidized by others. They will have a litany of troubles and problems that they go through, ready to fire off, no matter how well off they are. I know I have one. It's not fair, so I try not to listen to it, but I do have one. A whole litany.
- AckSyn 9y ago
  > Try telling the average family that their lifestyle is unsustainable and unfairly subsidized by others. Well the fact remains that it does not happen. When I purchased my home in 2003 I received no tax credits, support from the government, bonuses, or a pat on the back. I put 20% down after saving up everything I could for a solid 5 years after landing a great job after college, which again wasn't subsidized or had grants for. No one else does this but me and the ridiculous sense of entitlement or attitude of it being "unfair" that someone else can't afford it really stems from a deeper issue.
  - einarvollset 9y ago
    Prediction: you vote GOP, yet do not consider the support you get from the government in terms a mortgage interest deduction, FHA loan eligibility of people who could buy your house propping your house value up, nor in fact how Fannie Mae and Freddie Mac (govt supported) actions makes it possible for you to rely on a fixed 30 year rate for your mortgage. Oh no, you did it all by yourself.

conanbatt 9y ago

> People are selfish; if they make a big investment and you're about to reduce its value, they will fight tooth and nail. Any conversation about 'right', 'wrong', 'moral', it all goes out the window. I disagree with the tone. Everyone is selfish. Everyone wants either their own benefit or their own benefit. Everyone is grasping. Moral, wrong or right can't correct that behavior, even if you could agree to it. Thats why the moral, wrong or right decisions dont have to be about what people want, but what you allow people to do or not do.

jstanley 9y ago

I don't understand why people want house prices to go up. I own a small house (with a mortgage). I'm hoping house prices go down over the next 10 years. I'll probably want to buy a larger house, so if prices come down I don't have to come up with as much cash. OK, I'll get less for the house I'm selling, but the difference in the prices is also less than if they were to go up. As long as I sell the current house for enough to pay off what's left of the mortgage, I think I'm winning if house prices go down.

sokoloff 9y ago
Because many people can't budget or plan on a multi-year, multi-step horizon like you are expressing above. For those people, if their house goes up in value, it represents an important source of financial security (if they haven't gutted it via refinancing and HELOCs for renovations returning $0.60 on the dollar, new cars or vacations) Even for people with decent financial planning skills, the home is such a large investment and typically bought with 5-33x leverage, that a small price drop is dangerous to their position.
conanbatt 9y ago
I get this concept but I dont think thats how it works. The correlation on the prices of a 1000 sq ft to a 3000 sq ft is not 1: if the first one increases 100% the second one might increase 50%. In cities, it is often that bigger appts are cheaper per sq/ft because the market for them is much smaller than 1br/2br.
prklmn 9y ago
It’s all relative. You own a cheaper house now so if prices went down your absolute loss in selling would be less than someone who sells a house that’s worth let’s say 10x more than yours, maybe the next house you want to buy. Also, not everyone is in the market for a new house in the 10 years, so sure you want houses to be cheap because you’re going to be buying, but it would be the opposite if you were looking to downsize. Home prices going up means personal net worths going up - most people like that.
shostack 9y ago
Because mortgages are one of the few leveraged investments Joe Consumer has access to. As such, it is often one of the only ways people can retire or afford property at all. Also, because it is highly leveraged for many, especially in the Bay, to have it reduce in value can actually easily bankrupt you. But for many, they feel they need to take the risk to lock in home prices, and also to grab what they still cling to as "the american dream" of owning a small single family home. Can't say I blame people for being upset by that, especially after this tax reform theft.

MichaelBurge 9y ago

I've never understood that. If people want to buy your single-family home and build a $1 billion skyscraper with 10000 units, surely it's worth more than if the law prevents that construction? If you had a single-family home in the middle of Manhattan, it'd be worth a lot just from the land. It seems like you'd want to encourage the city around you to be as highly developed as possible if money was the main concern.

dcosson 9y ago

I am sensitive to the investment aspect, because it is true what you thought you were buying has changed and possibly in a way that makes it less valuable. Ultimately, it’s not what you actually bought so that’s kind of on you. But I wonder if developers offered to buy neighboring houses at the same time they buy the first house, if that would help at all. Then the neighbors have the option of not losing any value because of the shadows that will go up or whatever. This would require by-right type laws where the developers could trust that housing is actually possible to build on these lots, otherwise buying multiple properties may be too big of a risk. I suspect NIMBYs might like this idea even less since it could more drastically change a bigger part of the neighborhood, but it seems like it would at least partially address their stated concerns of neighbors being financially impacted.

geebee 9y ago

Is resistance to zoning changes economically motivated? I'm not absolutely sure it necessarily is. In San Francisco, I actually think that nimbyism may not be the result of a desire to maximize the value of an asset. Here's why - it's true that the value of a SFH in many parts of SF would drop if a large apartment were built next door, if that house could only be sold as a SFH. But what would the value of the land beneath it be if zoning restrictions were relaxed? To be clear, I'm not sure, but I have a friend who owns a SF on one of those rare streets that is zoned R-2, and some of his neighbors have been cleared to build two flats where there was once a SFH. The two flats sell for considerably more than the SFH would have. Now, this might still reflect scarcity, and a rare flat in an otherwise SFH neighborhood might be more desirable than an entire neighborhood of them (maybe, but not necessarily, I doubt it - nob hill and Russian hill are more expensive than the SFH parts of the sunset and excelsior, and Manhattan/(+ some other parts of New York), one of the few urban areas that is more expensive than SF, is also the only large scale urban area that is considerably more densely built. Even if lots of people were to build 2 or 3 unit flats, vertically, that's a huge amount of additional housing. The value of the land sitting beneath the SFH would reflect this, even if the current owner chose not to undertake the project. I also believe that greater density in SF might very well stimulate additional economic activity, which could end up offsetting the additional supply, eat least enough that 3 apartments would be worth more than one house on the same plot of land (again, if density meant lower prices, Manhattan would be the cheapest place to rent in the entire US, and Nob Hill would be much cheaper than the Sunset). When I heard what people on this street had done, I was almost jealous. They replaced their aging SFH with two apartments that were just as spacious and nicer, building vertically. The backyard is now shared, but it's still big. And they got so much $$ for the additional unit that their mortgage is paid off with a nice fat chunk of change left over. I suspect that much of SF's famous nimbyism is actually motivated by a desire for things to stay the same. People like their SFH neighborhoods, and don't really want it to chance. They don't want to tear down their house and build a bunch of flats, even if this would be a way to wring a lot more money out of their investment - and because they don't want to, they don't stand to benefit if their neighbors do this either. Alternatively, they might not be aware of this possibility. Or, in a city of 75% renters, they may rent and not see any benefit to this new construction - at best, disruption during construction, at worst, losing their current rental. It may indeed be selfish, but I'm not sure it's asset maximization behind all this.

Sukotto 9y ago

> a gobsmackingly terrible investment decision Speaking only about the "investment" part of home ownership, I found this blog post insightful, and maybe interesting enough to share here: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrib... Here is a somewhat paraphrased version of the author's main points: * Not just an initial, but a relentlessly ongoing drain on the cash reserves of the owner requiring an endless parade of repairs and maintenance without which it will crumble * Illiquid. It takes months of time and effort to buy or sell * Expensive to buy and sell with very high transaction costs: 5%+ commissions, buying and selling * Undiversified. Represents a disproportionate percentage of a person’s net worth * Complex to buy or sell * Lots of extra fees and reports and documents you must pay for * Generates low returns. At or below the inflation rate * Leveraged. If the price goes up a little bit, leverage will magnify this and people will convince themselves it’s actually a good investment! Most will never consider that leverage is also very high risk and could just as easily wipe them out * Mortgaged. You pay interest on the loans. Many people borrow money against it more than once * Unproductive. Never pays interest, never pays dividends * Immobile. Fixed to one geographical spot so at any given time only a tiny group (if any) of potential buyers for it will exist * Subject to the fortunes of a single neighborhood * Fragile. Easily damaged by weather, fire, vandalism and the like. As such it requires expensive insurance to cover these risks. Often the the bad things that are most likely to happen aren’t actually covered * Heavily taxed. * * If it should go up in value, we tax that gain. If it goes down in value we do not offer a balancing tax deduction on the loss like with other investments * * Taxed annually, not just when bought or sold * * Tax rate goes up as value increases. Does not go down when value decreases * Subject to eminent domain * Increases stress, leads to more divorces, but then be impossible to divide (Note, I am biased against homeownership. Which hasn't stopped me from recently buying a house for a variety of reasons, mostly revolving around space needs for my family that could not be met with the available rental options in my current city)

dragonwriter 9y ago
> Tax rate goes up as value increases. Does not go down when value decreases The tax rate usually doesn't change in either direction with value, except in states like California which limit assessment increases, where the effective rate decreases if value increases rapidly (because the tax basis increases less than the full increase in value). And in most jurisdictions, value decreases are fully reflected in tax assessments, even when increases are only partially captured.

andrewjl 9y ago

No doubt, homeowners are in no way incentivized to fix the housing shortage. Legislate away their ability to unilaterally prevent more housing to be built, which is what California is doing. There is NO reason we can't have the same rate of home construction as Seattle, which built homes at the fastest rate in the nation. No infrastructure? Build it. No school slots? Build more. The Bay Aarea can easily accommodate double digit population increases with almost no perceived increase in density. It just requires action rather than whining about neighborhood "character" or traffic.

galfarragem 9y ago

> People are selfish Better: people are self-perserving.