3 ms·

> if density is the answer, why is affordability in the US roughly inversely proportional to density? Because affordability is inversely proportional to demand

> if density is the answer, why is affordability in the US roughly inversely proportional to density? Because affordability is inversely proportional to demand, and higher-demand areas tend to have more dense housing.

majormajor 9y ago
Right. And more dense areas draw more business which draws more people which draws more business and also increases price more and more... so density isn't a cure by itself, it's part of the cycle that causes the problem we're trying to fix. The same way "add another lane to the highway" doesn't fix traffic.
- nerfhammer 9y ago
  Dense cities are the one weird trick to human civilization itself. China has seen unbelievably explosive growth in its cities and has also seen 1 billion people lifted out of poverty during exactly the same time period. Coincidence? People flock to cities because they can get paid five times more than they could back in their home village – they're not cavorting, scheming millionaires. Trying to strangle your cities because cities are bad is the dumbest thing you could do in terms of economic growth other than than trying to strangle trade on the theory that those scheming foreigners are going to take all of our money away. I'm sure downtown Shenzen is more expensive today than it was when it was a small fishing village. Would the world be a better place if it had been kept as a small fishing village?
  - seanmcdirmid 9y ago
    The Chinese property bubble makes the USA property bubble look tame in comparison. At least rents are cheap ($1000/month rent is about $1 million to buy). Density doesn’t fix anything if many apartments are speculative investments and not worth the effort of renting out (because rents are low anyways compared to the appreciation).
  - majormajor 9y ago
    > other than than trying to strangle trade on the theory that those scheming foreigners are going to take all of our money away. Wait, you don't think China has been doing this too? --- The US has had decentralized economic booms in the past; even China's current one is based around several cities and regions, and China continues to build outwards, not simply make Beijing and Shanghai ever denser inside the same radius. They do it at a higher density than we do in the US, sure, but other than that the strategy doesn't seem completely unfathomable - I think the Chinese-style answer to the Bay Area is less likely to be "make SF denser" and more "move a bunch of development to the East Bay or Dublin or something and make new companies start up over there." Expanding on what I said in a separate comment (sigh, I was headed to bed, maybe after this one), we are currently in the US letting many of our cities die while putting a ton of eggs into NYC/SF/etc baskets. I don't think further density in just a few places is going to fix anything price-wise or have any superior outcomes than reducing those bottlenecks would.
- deleted 9y ago
  [deleted]
- dionidium 9y ago
  I don't think this is right. Highways induce demand in a much more immediate way. It takes time for cities to outgrow themselves. And even a very dense city like New York just simply hasn't kept up. Rents haven't always been as high in NYC as they are now. It's not as though the city's history is one of inducing demand that it can't meet with adequate supply. The city has always been expensive, but not in the ridiculous way it is today. I'll leave the inflation calculations to you, but this demonstrates my point: http://www.millersamuel.com/change-is-constant-100-years-of-new-york-real-estate/ http://www.millersamuel.com/change-is-constant-100-years-of-...
- saosebastiao 9y ago
  Traffic isn't even close to a good analogy. Because traffic isn't anything but an objectively bad thing. Sure the same pattern of induced demand may occur with housing development, but induced demand in urban development a bad thing? There is evidence that if actually accommodated that induced demand over the last half century, instead of suppressing it, that our national economic growth would have been 50% higher than it actually was. http://www.nber.org/papers/w21154 http://www.nber.org/papers/w21154
  - seanmcdirmid 9y ago
    Driving a personal car is personally desirable (convenience) even if it is bad for society. The same thing could be said about many housing choices (e.g. single detached home).
  - dionidium 9y ago
    I agree entirely. But I think what you'll find underneath a lot of complaints about housing prices is the desire for neighborhoods to remain in exactly whatever state they were in on the day the person you're talking to moved in. What is the correct density? It's the exact density that existed when I bought in. That's what people -- incumbents, I mean -- are really saying.
  - majormajor 9y ago
    I'm not saying density is a solely bad thing like traffic, I'm suggesting traffic and high prices both are part of feedback loops (traffic is bad :: high rent is bad), and this is exacerbated when in geographically constrained areas. Chicago, Dallas, Atlanta, etc, have unlimited sprawl which helps keep both the traffic and costs down, since the regions can be less centralized. LA, SF, NY do not, and none of them show a good example of "higher density -> lower prices." Instead, the most dense parts of them are the most expensive, fitting the feedback loop model I'm suggesting. That could very well be because growth in demand has outstripped increase in supply without any sort of feedback relationship, but that itself raises interesting follow-up questions. Is rapid growth undesirable for everyone not directly benefiting from higher salaries from the growth, which is probably most people? Do developers have an incentive to keep growth in supply lagging, since it means they can get a lot more return on investment for what they do raise funds to build? Even for homeowners, your property values go up, but so does everyone else's, so you're not relatively any better off/able to upgrade. What are the political implications of that, if so? In the past, productivity was not so concentrated in a handful of cities, making me skeptical of that linked model. Big confounding factors there in the death of industries across most of the country happening at the same time as increased global prominence and money concentrating to more and more first-and-second-tier cities. What that sort of model also misses is that you have at least as many people preferring low density to high density as the reverse (based on empirical trends in the post-car US), and you also have a lot of people who won't be happy with a solution to job distribution that's just "pull up your roots and move to a better city, sorry." It doesn't seem to result in constructive policy recommendations that have a snowball's chance of being welcomed.

majormajor 9y ago

Right. And more dense areas draw more business which draws more people which draws more business and also increases price more and more... so density isn't a cure by itself, it's part of the cycle that causes the problem we're trying to fix. The same way "add another lane to the highway" doesn't fix traffic.

nerfhammer 9y ago
Dense cities are the one weird trick to human civilization itself. China has seen unbelievably explosive growth in its cities and has also seen 1 billion people lifted out of poverty during exactly the same time period. Coincidence? People flock to cities because they can get paid five times more than they could back in their home village – they're not cavorting, scheming millionaires. Trying to strangle your cities because cities are bad is the dumbest thing you could do in terms of economic growth other than than trying to strangle trade on the theory that those scheming foreigners are going to take all of our money away. I'm sure downtown Shenzen is more expensive today than it was when it was a small fishing village. Would the world be a better place if it had been kept as a small fishing village?
- seanmcdirmid 9y ago
  The Chinese property bubble makes the USA property bubble look tame in comparison. At least rents are cheap ($1000/month rent is about $1 million to buy). Density doesn’t fix anything if many apartments are speculative investments and not worth the effort of renting out (because rents are low anyways compared to the appreciation).
- majormajor 9y ago
  > other than than trying to strangle trade on the theory that those scheming foreigners are going to take all of our money away. Wait, you don't think China has been doing this too? --- The US has had decentralized economic booms in the past; even China's current one is based around several cities and regions, and China continues to build outwards, not simply make Beijing and Shanghai ever denser inside the same radius. They do it at a higher density than we do in the US, sure, but other than that the strategy doesn't seem completely unfathomable - I think the Chinese-style answer to the Bay Area is less likely to be "make SF denser" and more "move a bunch of development to the East Bay or Dublin or something and make new companies start up over there." Expanding on what I said in a separate comment (sigh, I was headed to bed, maybe after this one), we are currently in the US letting many of our cities die while putting a ton of eggs into NYC/SF/etc baskets. I don't think further density in just a few places is going to fix anything price-wise or have any superior outcomes than reducing those bottlenecks would.
deleted 9y ago
[deleted]
dionidium 9y ago
I don't think this is right. Highways induce demand in a much more immediate way. It takes time for cities to outgrow themselves. And even a very dense city like New York just simply hasn't kept up. Rents haven't always been as high in NYC as they are now. It's not as though the city's history is one of inducing demand that it can't meet with adequate supply. The city has always been expensive, but not in the ridiculous way it is today. I'll leave the inflation calculations to you, but this demonstrates my point: http://www.millersamuel.com/change-is-constant-100-years-of-new-york-real-estate/ http://www.millersamuel.com/change-is-constant-100-years-of-...
saosebastiao 9y ago
Traffic isn't even close to a good analogy. Because traffic isn't anything but an objectively bad thing. Sure the same pattern of induced demand may occur with housing development, but induced demand in urban development a bad thing? There is evidence that if actually accommodated that induced demand over the last half century, instead of suppressing it, that our national economic growth would have been 50% higher than it actually was. http://www.nber.org/papers/w21154 http://www.nber.org/papers/w21154
- seanmcdirmid 9y ago
  Driving a personal car is personally desirable (convenience) even if it is bad for society. The same thing could be said about many housing choices (e.g. single detached home).
- dionidium 9y ago
  I agree entirely. But I think what you'll find underneath a lot of complaints about housing prices is the desire for neighborhoods to remain in exactly whatever state they were in on the day the person you're talking to moved in. What is the correct density? It's the exact density that existed when I bought in. That's what people -- incumbents, I mean -- are really saying.
- majormajor 9y ago
  I'm not saying density is a solely bad thing like traffic, I'm suggesting traffic and high prices both are part of feedback loops (traffic is bad :: high rent is bad), and this is exacerbated when in geographically constrained areas. Chicago, Dallas, Atlanta, etc, have unlimited sprawl which helps keep both the traffic and costs down, since the regions can be less centralized. LA, SF, NY do not, and none of them show a good example of "higher density -> lower prices." Instead, the most dense parts of them are the most expensive, fitting the feedback loop model I'm suggesting. That could very well be because growth in demand has outstripped increase in supply without any sort of feedback relationship, but that itself raises interesting follow-up questions. Is rapid growth undesirable for everyone not directly benefiting from higher salaries from the growth, which is probably most people? Do developers have an incentive to keep growth in supply lagging, since it means they can get a lot more return on investment for what they do raise funds to build? Even for homeowners, your property values go up, but so does everyone else's, so you're not relatively any better off/able to upgrade. What are the political implications of that, if so? In the past, productivity was not so concentrated in a handful of cities, making me skeptical of that linked model. Big confounding factors there in the death of industries across most of the country happening at the same time as increased global prominence and money concentrating to more and more first-and-second-tier cities. What that sort of model also misses is that you have at least as many people preferring low density to high density as the reverse (based on empirical trends in the post-car US), and you also have a lot of people who won't be happy with a solution to job distribution that's just "pull up your roots and move to a better city, sorry." It doesn't seem to result in constructive policy recommendations that have a snowball's chance of being welcomed.