24 ms·

California should emulate Tokyo, where housing stayed ahead of population growth

333 points by krausejj 9y ago

ISL 9y ago
"Sadly, the bill is already encountering opposition from homeowners’ groups, which are no doubt eager to push up their property values." My impression is that neighborhood groups aren't generally interested in raising property values, but rather in preserving the less-developed neighborhood in which they have invested and chosen to live.
- mjevans 9y ago
  I agree, it's more the "I got mine, screw everyone else" mentality.
  - robotrout 9y ago
    A large influx of people into your area is almost guaranteed to lower your quality of life, either by increased crime, or just by increased congestion, increased noise, decreased property values, and possible demographic shifts that marginalize your culture. To minimize these concerns in the way you do seems non-productive and can only lead to more polarization. These types of initiatives stem from Agenda 21 https://en.wikipedia.org/wiki/Agenda_21 https://en.wikipedia.org/wiki/Agenda_21 proponents that, while advocating many admirable things, tend to completely ignore the feelings of the populations they are intent on engineering a radically different future for. I am saddened that the dream we all shared of allowing small towns to once again flourish, because knowledge workers could be located anywhere on the planet, are being quickly forgotten in favor of ultra-dense citiscapes.
    - jessaustin 9y ago
      ...guaranteed to lower your quality of life... This is why many people (not me!) support draconian immigration restrictions.
      - robotrout 9y ago
        I assume you are talking about Japan and Israels immigration restrictions. I support their right to them, personally, but I know there are many Americans who riot and march because those countries restrict their immigration so carefully.
        jessaustin 9y ago
        No, I was thinking of an American politician who has been in the news quite a bit, who is a big opponent of immigration. He really represents the values of his NIMBY supporters.
    - Arbalest 9y ago
      If you're worried infill will cause cultural degradation, then perhaps your culture is not well suited to centralisation. That is, not suited to city living. Why else use Tokyo as an example of the success of infill? Japan is famous for it's low (petty at least) crime rate The point of decreased property values is even mentioned in the article as desirable and here you are saying it isn't. The objective here is to make housing affordable, not the preservation of wealth centres.
    - spoonie 9y ago
      If the lot your house sits on in rezoned to allow for taller buildings your property’s value will very likely go up. It is definitely less conveneient to have to move out of your house and wait for something bigger to be built.
    - xracy 9y ago
      This is the definition of "vaguely racist": "increased crime... and possible demographic shifts that marginalize your culture" Don't want none of them other demographics moving here to increase the crime, and marginalize the culture.
      - robotrout 9y ago
        If you look at any crime heat map of a city, you will note, hopefully with no surprise, that crime rate is inversely proportional to income distribution. If low income housing enters an area, the crime will go up. You may be fine with that, but you have to imagine that the already established residents of that area might not wish their crime rate to increase. Calling those concerns selfish is just name calling.
        xracy 9y ago
        Yeah, You'll notice I called what you said racist, specifically because your statement didn't tie what you were saying to income, but instead to "demographics".
        xienze 9y ago
        “Demographics can refer to any subdivision of a population, it’s not a synonym for “race”.
      - ggg9990 9y ago
        Is that bad? If someone lives in a community that is 90% their race, with their neighbors listening to their kind of music, engaging in their kind of activities, going to the same kind of events, not wanting to become a 10% minority? It would be like a Chinese person not wanting to move to India or vice versa.
      - Mononokay 9y ago
        . . . It wasn't, though? He could easily be talking about Midwesterners moving there, too. He never brought up race, and thinking "Increased crime rates!? Demographic shifts by [Anything can go here, try "Neoconservatives" or "Neoliberals" or "Social Conservatives" or "Fiscally Conservative Liberals"]??!? HE MUST BE THINKING ABOUT [RACE]!" I think they're not the racist one here.
    - arebop 9y ago
      Cities are built on network effects. It's the suburbs specifically that are conceived and designed such that growth and diversity destroys value.
    - devopsforlyfe 9y ago
      > I am saddened that the dream we all shared of allowing small towns to once again flourish, because knowledge workers could be located anywhere on the planet, are being quickly forgotten in favor of ultra-dense citiscapes. It was always a futile dream, mostly propagated by people who themselves enjoy small towns and certainly not "shared by all". It turns out that many knowledge workers actually like big cities for the leisure options, health services, people and neighbourhood diversity, much bigger selection of potential life partners, and high availability of jobs.
      - JoeAltmaier 9y ago
        Circular? Remote workers means, there aren't more jobs just because you're in a city. As for neighborhoods, an expanding cityscape of just more apartment blocks means no neighborhoods at all. As for leisure options, a beach shared by 1M other people is not much of an option. Living in Colorado has orders of magnitude more leisure options for instance.
        lotsofpulp 9y ago
        Isn’t that why Colorado cities are some of the hottest markets to be in right now? I’ve heard a lot of complaining from people in Denver, Boulder, Aspen, etc.
    - pcwalton 9y ago
      > A large influx of people into your area is almost guaranteed to lower your quality of life Speak for yourself. My quality of life has been very positively correlated with population density. It's why I'm settling down on the east side of San Francisco, and I'm eagerly awaiting the new development there.
  - Arbalest 9y ago
    The term for that is NIMBY. Frankly, this is not news. The fact it has such an acronym means it is well established.
  - zeth___ 9y ago
    If developers were given the chance they would turn every plot of land into a Kowloon walled city. We need someone pushing the other way to keep some spaces livable.
    - sdwa 9y ago
      We do, but clearly the balance right now is far too much in the favour of the naked self interest of shameless home owners. I mean a place to live is not a luxury, it's up there with food and water.
      - zeth___ 9y ago
        And if you're starving and there is free food one block over you go and eat there. There is plenty of very cheap land to live in. The problem is that no one wants to live there because living in dense cities for whatever reason is extremely appealing now. The price of a house grows exponentially with the minimum travel time to a metropolis from it. Blaming home owners for this is very useful scapegoating while ignoring the context.
        thaumasiotes 9y ago
        > The price of a house grows exponentially with the minimum travel time to a metropolis from it. 10 minutes away: $1,000,000 20 minutes away: $2,000,000? 60 minutes away: $32,000,000?
        zeth___ 9y ago
        P_0 * exp(-k*d) Where P_0 is the price in the heart of the city, d is the effective distance to the heart of the city and k is a factor to get units matching up.
        thaumasiotes 9y ago
        Usually saying one quantity "grows with" another quantity would mean that one rising causes the other to rise, not fall.
  - kbenson 9y ago
    I think often it's more complex than that. If prices are high enough in LA, it might actually be a case of "I got mine, screw everyone else" mentality, but I think much more often is more nuanced. People work hard to afford s home, and how do you explain to someone that saved for five plus years to afford a home that because of a new housing policy, it's possible their home could drop quite a bit in value, and not just because of normal cyclical market forces (meaning it could take decades to reach the same real value, if ever)? It's a hard decision to support legislation or policies that may may hurt double digit percentages of your populace, just because of bad timing on their part. At the same time, the need for cheaper housing is real. It's just not as simple as rich vs poor.
    - davidw 9y ago
      People were (and many still are) convinced that if black people move in next door, that the value of their house would fall. So they created policies, and acted, both formally and informally, to prevent that. These days most people regard that as horrible and in no way justified. Maybe one day we'll view exclusionary zoning in the same way. Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does: at a certain point, people become less enthusiastic about investing in new housing, so it's a much smoother curve that, realistically, is probably not going to crash prices. In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value.
      - kbenson 9y ago
        > ... These days most people regard that as horrible and in no way justified. Sure, but does that mean the family of five that was finally able to afford a home last year after scraping for years should pay for that? They could even be in the same demographic as the original victims of those exclusionary policies. > Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does I'm not so sure, depending on how it's handled. Housing is a free market, and as such it's subject not just to supply and demand, but people's expectations of supply and demand. If I just bought a house and policies were announced that I thought might not just stagnate my house value, but actually reduce it over time, inflation-be-damned, I would be mightily tempted to sell if I had options. Get enough people doing that, and you might have a run-away market drop. The people who mainly benefit from that are those that are poised to take advantage of the situation on short notice (those with money available already and can take advantage of the eventual rebound). There are obviously ways you could crater the housing market in an area on purpose through policy, so it's not out of the question it could happen accidentally. I'm mainly arguing for people to see both sides and try to prevent that, and soften any blow and be prepared to counter a market that looks to be behaving irrationally. > In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value. I agree. I just think it's a complex situation that requires nuanced policy and constant attention, and isn't as simple as "build more houses" implies.
- zkms 9y ago
  > rather in preserving the less-developed neighborhood in which they have invested and chosen to live. If they didn't buy the property, they should have absolutely zero say about what kind of housing someone else builds on their property. Central-planning-via-veto (the effective state of USian land use law) is utterly broken in its giving veto authority to the most meddlesome moralistic normies on anything that they might not like, whether it be a cell tower, an apartment building, or bloody clothes lines (not kidding about the latter: https://en.wikipedia.org/wiki/Clothes_line#Controversy_in_North_America https://en.wikipedia.org/wiki/Clothes_line#Controversy_in_No...). That these people (the Twitter thread here has some prime material https://twitter.com/maelig/status/975219562433015808 https://twitter.com/maelig/status/975219562433015808) have the ability to obstruct the construction of housing (to the point that there are people literally living, shitting, and dying in US streets because housing is so unaffordable) is heinous. This is not how well-functioning societies look like.
  - stevenwoo 9y ago
    The UK has a similar homelessness problem as far as I can tell from perusing the BBC. Do you think the causes are the same? I only keep up with the news there so not certain of historical trends except impending Brexit has seemed to have cause a slight dip in housing prices in London.
reaperducer 9y ago
Meanwhile, rural places in Japan are being rapidly de-peopled by both urban migration and an aging population. I read last year that some towns will actually GIVE foreigners a house if they promise to live there a certain numbers of years.
- prawn 9y ago
  Not just in Japan either. There have been cases of crumbling historic villages in Italy promising very cheap housing provided that the buyer commits to renovating and living within a certain period. I think stories like this couple well with one also from this week on HN: Why Cities Boom While Towns Struggle https://archive.is/9yDHx
- chrischen 9y ago
  This is a sign that the city is simply becoming more efficient and provides more for the population than rural sprawl.
- John_KZ 9y ago
  There's a reason for this. People love to go to the countryside for a weekend trip, but nobody live there. Why? Because there are no jobs and no people (or very few of them). Many families would be glad to escape to the countryside once they grow older and bigger, but they usually don't, because these problems still exist. Would you give up your carreer and your disposable income when you start a family, just to move to a village? Can you even find a job there? What about your social circles? What about when your kids need to go to university? I remember hearing a lot of talk about "the need to promote de-centralization" when I was a kid, but I don't remember hearing a single valid reason for it. It's always someone else that needs to move back to the countryside, not the speaker.
bassman9000 9y ago
One other reason that density might have been more politically acceptable in Japan is that houses are not used as a vehicle for middle-class wealth accumulation. On the spot.
- aphextron 9y ago
  >One other reason that density might have been more politically acceptable in Japan is that houses are not used as a vehicle for middle-class wealth accumulation. How do the Japanese build wealth, then? Buying a desirable home in a solid market is pretty much the only way for an average person earning the median wage to make it into the middle class.
  - spoonie 9y ago
    Investing in the stock market over the long term is both simple and accessible to almost everyone.
    - kaycebasques 9y ago
      But in the case of Japanese specifically, I’m sure some of them are weary of stocks after the big crash in the 80s.
      - davidw 9y ago
        Housing prices can crash too. See: the US.
        kaycebasques 9y ago
        The question here was “how do Japanese build wealth?” and someone suggested the stock market, so I replied that in the Japanese case, that might not actually be likely, because they had a big crash in the 80s which they have yet to recover from. No offense intended, but your comment doesn’t seem relevant to the discussion.
draw_down 9y ago
Yeah, jeez, why didn't we think of that.
nimbius 9y ago
Here in Los Angeles we have some of the most overvalued real estate in America. a bungalow in the city can go for millions, and is often torn down and replaced by a gleaming white McMansion because renovation is slower and costlier than filing new papers with the city. We cant just build more housing because traditional neighborhoods will fight to the death in courts to prevent multi family housing from devaluing their property or worse, competing for their rental income. The large apartment complexes that do get built are divided between anyone who can affort 10k a month in rent and fees, and "lower income" applicants who pay a fraction of this but are also held to strict terms and conditions. You wind up with millionaires and single moms living in beachfront Santa Monica communities, while anyone with a regular office job often commutes 40-70 miles in from the valley. Its often said you dont quit your job in LA, you quit your commute. new apartments built are not priced affordably because banks and investors want their interest back quickly and have promised surrounding neighborhoods they will price accordingly to keep out the riff raff. in turn, dilapidated apartment complexes from the 60's go for about the same rates because these property owners know there is no "better offer" in town. this doesnt even cover the 73,000 homeless people in Los Angeles county we cant seem to find a place for because no beach city wants to house their own unsustainable numbers of homeless, and no desert community is within a radius of health and welfare services required by many transients. Then there are the haters. people like the Aids Healthcare Foundation who ran a 6 month campaign to defeat city legislation for new affordable housing. Why? Mike Weinstein doesnt want any development to obstruct the view from his penthouse. http://www.latimes.com/local/lanow/la-me-ln-aids-foundation-political-spending-20170221-story.html http://www.latimes.com/local/lanow/la-me-ln-aids-foundation-... My husband and I live in LA and love it. but honestly, its bittersweet. We will never truly own anything more than a latte here.
- jayd16 9y ago
  The last paragraph is interesting. If we get more multi-family homes in LA, that's still not something to own. I guess single family homes could all turn into condominiums, as long as that counts as true ownership.
  - 1stcity3rdcoast 9y ago
behindmyscreen 9y ago
Supply that meets demand means prices come down... however, it.needs to be the right supply for the right demand. A bunch of high end housing doesn't make middle or low end housing cheaper.
- jseliger 9y ago
  It does over time: http://cityobservatory.org/what-filtering-can-and-cant-do/ http://cityobservatory.org/what-filtering-can-and-cant-do/ or http://cityobservatory.org/urban-myth-busting-new-rental-housing-and-median-income-households http://cityobservatory.org/urban-myth-busting-new-rental-hou.... The problem is that we have a 40+ year backlog of underdevelopment: https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-the-1970s https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-.... We've waited till the symptoms are acute to even begin acting on the underlying problems. Then we're surprised when we don't see immediate, instantaneous fixes.
- AgentME 9y ago
  If people who would be buying high-end housing are forced to buy lower-end housing because the supply is tight, then prices will be forced to go up everywhere.
  - stevenwoo 9y ago
    That's been happening in Bay Area for last 20 years, folks buying lower-end and demolishing and doing a rebuild. Palo Alto/Menlo Park are just more local and visible to me, but I assume it's the same elsewhere gradually. Coming from a softer market back around 2000 it was crazy to get outbid on a starter home and see someone demolish it right away.
ortusdux 9y ago
I really like the idea of Japan's zoning laws. They have 12 zones nationwide, and they restrict by maximum allowable nuisance. Industry is considered the highest nussicance and low rise residential the lowest. You cannot build a business in a residential area, but you can build apartments in a commercial zone. I feel this opens up many more options for growth while maintaining the spirit of American zoning laws. Here is a good explanation: http://urbankchoze.blogspot.ca/2014/04/japanese-zoning.html http://urbankchoze.blogspot.ca/2014/04/japanese-zoning.html
- trisimix 9y ago
  True spirit of opportunity right here
- jacobolus 9y ago
  Also importantly, even the lowest-density Japanese residential zones seem to allow some low apartment buildings and some home businesses, while other residential zones are mixed-use and allow corner stores etc. In e.g. San Francisco, more than half of the city is zoned to only allow detached height-limited single-family houses or sometimes duplexes, with businesses restricted to designated commercial streets. When you add wide streets with several wide lanes, generous street parking, parking requirements for buildings, long skinny land parcels with (often unused) space for a small yard in the back, etc., land use overall is incredibly inefficient even if you want to preserve the “local character” of low buildings. Look at the sea of light yellow zones in the zoning map, http://default.sfplanning.org/zoning/zoning_map.pdf http://default.sfplanning.org/zoning/zoning_map.pdf And among cities in the region SF has higher density and more flexible zoning than most. If we upzoned the Richmond, Sunset, and Marina neighborhoods from pale yellow to orange and purple, and added better transit, we could easily double the population of the city without anything taller than low-rise apartments.
  - throwaway2048 9y ago
    paris is one of the highest density cities on earth with virutally no highrises whatsoever.
ajeet_dhaliwal 9y ago
No one gets the message in London. There should be high rise condo/apartment buildings like Manhattan, Hong Kong, Singapore, even Toronto, all over the place given the population but height restrictions persist so people live in cramped, miserable conditions. There are vested interest that make allowing this politically challenging, existing owners would see property prices plummet if this was allowed, and then there's some powerful people just block it for aesthetic reasons. Either way it can't continue without having an economic and innovation hit long term.
- user5994461 9y ago
  I'm not sure what you mean. There are quite a few skyscrapers in London. They are all new luxury properties and doesn't drop the price of anything.
- buf 9y ago
  New skyscrapers are going up all the time in London.
  - rurounijones 9y ago
    Only business though no? OPs point is that there are no / not enough residential high-rises being built.
    - sievebrain 9y ago
      No, some are residential. I know someone who just moved in to the new skyscraper by Battersea power station
      - ajeet_dhaliwal 9y ago
        The Battersea / Nine Elms area has seen development over several years from when the American embassy announced they would be moving there, new tube stops are coming too but it’s just one targetted area only and the prices are totally crazy for anyone who is an ‘employee’ of any sort. Got your own multi million dollar business going? Then it’s no problem.
pfedigan 9y ago
What if I don't want to live in an apartment most of my life?
- pchristensen 9y ago
  Earn more or move or commute longer.
  - majormajor 9y ago
    Or vote and be politically active. Ignoring that as a rational choice for many people already in expensive areas is just asking for your proposals to fail. We very frequently talk about the economic value that could be produced by different housing actions, but policy is not purely determined by economic value. I know more people opposed to upzoning because they like their yards and their space than because they're worried about their property values (denser cities in the US are very rarely cheaper).
  - xenihn 9y ago
    Or work remotely
- dibujante 9y ago
  Leave. Or ask millions of people to kindly stop existing.
- Daishiman 9y ago
  Pay up the real value of a house in a city.
- azernik 9y ago
  Then you should probably not be living in an area where land is in short supply and high demand.
- joejerryronnie 9y ago
  Then you will be ostracized on HN for not being pro-urban.
braderhart 9y ago
More affordable housing equals don't overpopulate cities. I don't understand why in a digital age we are not promoting a society that values a healthy balance. Capitalism creates an unbalance that favors the rich and punishes the poor. There is also a lot of white privilege happening still in America regarding money, access to education and other challenges. The tech industry should be diversifying and encouraging remote workspaces and helping build communities for free education and housing using new tools for training, such as augmented reality devices. We are not too far off, but I believe we need a progressive effort to get there by promoting and using open source tools.
walshemj 9y ago
which will only help the property developers IMHO
- kjksf 9y ago
  Let's also set limits on how much milk farmers can make. Producing enough milk to fully satisfy demand only helps farmers.
  - walshemj 9y ago
    you think developers aren't going to game the system big time
Apocryphon 9y ago
What are some other cities which are in-demand but have plentiful housing. Berlin? Montréal?
- s0rce 9y ago
  Not sure what the definition of plentiful is but Chicago is a great city and housing is far less expensive than other cities of similar size and with lots of stuff to do/eat. Doesn't have mountains or coastal California weather, so you win some you lose some. Seasons are nice though.
  - dredmorbius 9y ago
    And the residents complain of high property taxes. They may not realise the blessing.
    - s0rce 9y ago
      Better than prop 13. Also, Illinois has lower state sales and income tax than California (not as low as other places though).
dalbasal 9y ago
IDK about some of this. When thinking about what policies we should have, we tend to overemphasize policies' effects on whatever we're we're looking to fix. A common trope is policing methods and crime rates. For example, I've heard a lot of talk this past year about german housing policy with Berlin cited as the best example. It rarely mentions that Berlin's population peaked before the war, reunification and other things that aren't housing policy. I'm not saying that Tokyo's housing policies are not good, just that there's likely a lot of context to their successes. Housing can be pretty complicated and nuanced. Policies don't translate well from one place to another. Where I live (dublin), house prices are effectively a derivative of bank policies. Whatever banks will loan the median person becomes the median house price. Now that we've had boom, bust & boom again... it's very easy to see how these two things track. In a less supply constrained scenario I think bigger houses, not cheaper ones. Another big part of the story here is a near unanimous objection to development in general, more out of conservatism than NIMBYism. So, stasis biased. Anyway, my point is that it's complicated. The dynamic in Dublin is different from Austin or Berlin, and policies exist within these contexts. It sounds like NIMBYism is a big factor in california. I imagine that the economic & population growth in these cities is another big factor.
- stale2002 9y ago
  Bigger houses by definition mean cheaper, at least in the city. This is because a bunch of young people can get together and live together in this hypothetical bigger house. Twice the size IS half the cost if twice as many people are living there.
  - jacobolus 9y ago
    It’s bullshit that people who would prefer to live in studio or 1-bedroom apartments are forced to live 3–5 roommates to a house with all available rooms converted to bedrooms (for which the same land could easily fit several apartments) because the zoning doesn’t match demand, and otherwise it’s too expensive to stay anywhere within commute range. Especially bad when one of them wants to start a family but it’s simply impossible because giving up space in a rent controlled unit makes the whole region entirely unaffordable.
austincheney 9y ago
California is bleeding something like 60,000 residents to Texas each year. That sounds like a big number. https://qz.com/1189388/conservative-californians-are-moving-to-texas-for-the-home-prices-and-politics/ https://qz.com/1189388/conservative-californians-are-moving-...
- pascalxus 9y ago
  That's not nearly fast enough. We can't possibly loose enough people. But, it's a good start. Ideally, we would have a mass evacuation! I'd leave too, but we have family and friends here, not to mention a good job.
  - IkmoIkmo 9y ago
    I don't really see the reason for downvotes. I don't take his comment as hostile, but rather simply as a function of economics. Suppose for a moment that everyone of the 7 billion people wanted to live in a single city. Taking it to the extreme. It doesn't work. Land prices would make everything unaffordable, there wouldn't be enough space to produce goods and provide space to live and work. The best thing in such a situation would be to say, let's have substantial people move away from this particular city, to live and work somewhere else where natural resources (land, what's on and under it) is abundant. To me it seems pretty obvious that this is the position that some price cities find themselves in. You can sort of look at a heat-map or height-map of population density. This map essentially expresses demand for that land, and that expresses the cost of the land. In that sense, population density to land can be viewed as interest rates to debt. The smartest thing to do in a debt situation is move high-interest debt to low-interest debt. Redistribute your debt to where it is cheap. Similarly, we ought to redistribute our demand for land to where it is cheap, which means moving people around. In that sense, the above comment makes sense to me. I'm not advocating for some kind of forced migration or anything, but companies and governments should inform, educate and incentivise this redistribution in a soft manner. Introducing (progressive) land taxes is probably part of the story.
- adrr 9y ago
  LA increased in population by 42k last year. That’s not the metro area which is also increasing.
popcorncolonel 9y ago
Everything in America should emulate Japan, pretty much.
- azernik 9y ago
  Just not the oppressive gender norms, the work-life balance at mainstream employers, the level of direct political corruption, or the thousand other very real problems Japan has that are worse than in the US. Let's not idealize foreign countries, please and thank you.
  - buf 9y ago
    I agree that we shouldn't idealize. As an American, I've lived in western Europe, eastern Europe and spent months in Japan. There are some things these places do worth idealizing. Americans should travel more and replicate the best parts.
    - xenihn 9y ago
      >Americans should travel more and replicate the best parts. I hope you realize that the vast majority of the country isn't as privileged as we are when it comes to being able to afford to travel, or even to get time off in the first place.
      - eecsninja 9y ago
        > I hope you realize that the vast majority of the country isn't as privileged as we are when it comes to being able to afford to travel, or even to get time off in the first place. Yet those people will vote and otherwise support bad policies with their uninformed-ness.
      - azernik 9y ago
        I think this gives those of us who do have that privilege an obligation to be responsible about the ways we speak and write about our experiences. For the majority of Americans who never make it to e.g. Japan, it makes a difference how they hear travelers speak in person, on TV, or in commenters on reddit (or even, gasp, Hacker News).
nikanj 9y ago
It's too late for California. Either housing prices do come down considerably, and a lot of people have their futures ruined, or they don't come down considerably, and a lot of people have their futures ruined. Theoretically massive inflation would be able to fix this, except that would screw over everyone who's using the US dollar outside of California.
- John_KZ 9y ago
  Yep. I'm not an economist, but I've been watching this weird "urban inflation" trend too. People in big cities, even though they don't produce more or better work than others, get paid a lot more to account for the housing bubble, essentially increasing their buying power tremendously compared to people living in smaller cities. Imho we should give up on the idea of maintaining large cities as aesthetic monuments or something. It's bad enough for cities like London that have a decent population density, but places like LA where people just won't give up on the American suburbia model of housing is just insane. Cities aren't just a place to hang out and look at pretty buildings, people need to live there, work and transport within reasonable cost and time constrains. It's a very practical issue that needs to be solved. Living in a big city isn't just a luxury, it's a need too for many people.
  - barry-cotter 9y ago
    You’re wrong. People in cities do produce more and better work than others. They’re also easier to serve so more businesses are viable there. Firms do not pay people more when rent is higher out of the kindness of their hearts, they do it because it’s worth the greater expense to them, because the workers are more skilled and more productive. Some of those higher wages accrue to landlords. Relevant link https://en.m.wikipedia.org/wiki/Economies_of_agglomeration https://en.m.wikipedia.org/wiki/Economies_of_agglomeration
    - Johnny555 9y ago
      Exactly - if Google didn't get good business value from having so many employees working at a central HQ (and busing employees from SF to Mountain View), they wouldn't do it -- they could save a lot of money on salaries and office space by hiring a distributed workforce across the rural USA (and world). They find the tangible and intangible benefits of a central HQ to be worth the price. They have so many small offices across the country that they could easily spread out their workforce nationwide and get out of the expensive Bay Area... if they felt it would provide value.
mikekchar 9y ago
I think it's important to have a bit of perspective on this graph. While it includes the tail end of "the bubble", the vast majority of this graph documents a time that is pretty difficult to compare with any major city. After the bubble, real estate prices lost up to 80% of their value. It slowly crept back up and in the early 2000s there were signs of vigorous recovery, but in 2006 when the government saw prices going up again, they restricted loans. This stabilised prices. In the last decade, while the prices have gone up and down, the price index now is practically the same as it was in 2010. There are a couple of other important factors. Between 1988 and 2013 (the part documented by the graph), the population of the country grew by only 5 million people. Tokyo's population grew from about 11 million to about 13 million in that time -- so it absorbed almost half of the total population increase of the entire country. Although I haven't looked, I'm willing to bet that Osaka absorbed the other half. So it's quite a bit easier to focus the government when all of your growth is in the same place. Furthermore, if we look at the population increase and compare that to the household increases in the graph, something is pretty apparent. Population increased by 2 million and households increased by 2 million. What that means is that Tokyo was overcrowded in 1988, with large numbers of people living in the same household. As new residences became available, they spread out. It's especially important to understand that in the early nineties, prices were getting cheaper, so that made it easier for people to move. So while building new residences is important, there are a whole host of other factors that led to Tokyo's success in this regard. Personally, I think the resolve to avoid real estate bubbles, even at the cost of economic growth is huge. One last thing I really need to point out because it's confusing for people who don't live in Japan: "Tokyo" usually refers to the prefecture of Tokyo, not just the city. There are parts of Tokyo prefecture that are decidedly rural, so it is doubly difficult to compare it with cities in other countries.
- eecsninja 9y ago
  If you want more data, see the chart in this article (sometimes behind paywall, so I'm linking archived version): http://archive.is/oXNHv http://archive.is/oXNHv The chart shows a comparison of increase in population vs increase in price, for four regions: San Francisco, London, "Tokyo", and the central district of Minato-ku. While the first three are vaguely defined since they could be either city limits or metropolitan areas, there is no such uncertainty about Minato-ku. Minato had a much larger percentage population increase than SF or London but a much smaller percentage price increase.
kevinburke 9y ago
Please call your state legislators - Senator and Assemblymember - about SB 827, which will do more to accomplish this outcome than any land use bill in the last twenty years. A lot of homeowners are opposing the bill and we could use your voice. http://findyourrep.legislature.ca.gov/ http://findyourrep.legislature.ca.gov/
- JaggedJax 9y ago
  I very much hope this bill goes through. The city I live in is a terrible mix of NIMBYism and corruption making it impossible to move an electrical outlet or put up a private awning, let along build anything on your property (have experience with all these attempted permits and more). The only thing that can stop this is the state completely overriding local zoning laws like this bill does. The state tried the carrot and many cities like mine ignored it. It's time for the stick.
  - Decade 9y ago
    Don’t just hope. Join California YIMBY and contribute time and money to defeating NIMBYism. https://cayimby.org https://cayimby.org
MarkMc 9y ago
Seems that 'not in my back yard' is a big problem. So what about a rule that says, "If you build a high-density apartment you must financially compensate nearby residents"?
- nsnick 9y ago
  Nearby residents are already compensated. When you build a high density apartment, the value of land near it goes up.
  - MarkMc 9y ago
    The value of the land goes up, but the potential rental income goes down due to increase in supply. For house-owners the net change in property value will likely be positive, but for apartment-owners it might well be negative. In any case, support for NIMBY suggests the current level of financial compensation is insufficient.
ggg9990 9y ago
Japan is so idiosyncratic that you cannot assume that any policy from there will behave similarly anywhere else (except in some cases Singapore)
- eecsninja 9y ago
  When did "idiosyncratic" come to describe a country where people are polite and keep their society clean and running punctually? Japan has little litter even though there are few trash cans in public. In the NYC subway, there is a ton of litter in the tracks even near a trash can. Maybe it is the West that is actually idiosyncratic?
  - ggg9990 9y ago
    Idiosyncratic means unique. There are more countries with litter than without.
    - eecsninja 9y ago
      Fair point. But the laws of economics don't treat people differently just because they are culturally different -- supply, demand, price elasticity, cause-and-effect. If you restrict supply while demand goes up, don't be surprised that the city's real estate prices far outstrip people's incomes. Similarly, if you loosen the limitations to development, don't be surprised to see prices come down.
  - apotheothesomai 9y ago
    Every culture by definition is idiosyncratic compared to others. Cultures are demarcated by their differences. There is no objective measure by which individual aspects of one culture can be judged better than another, unless the majority of people from every culture involved in the comparison have agreed to certain principles, e.g. slavery is unacceptable. The litter example simply illustrates a different cultural norm in a very homogenous society. The US is profoundly diverse and individualistic. Besides, the NYC has litter, when Tokyo transit has men reading rape comics on the train. Japanese culture is not perfect, nor is any culture.
cmcginty 9y ago
One word. NIMBY
b123400 9y ago
I think culture helps to keep the house price low as well. 1. They don't like secondhand homes, they rather rebuild it[1]. So houses are not a good investment vehicles. 2. They values good business practices in housing. (I don't have any data to support). Few months ago I was finding a room in Tokyo, the agent told me people usually live in the same place for years without rent increased. It's not usual to raise the price because it's considered rude and it's something the yakuzas do. It's an entirely different story in Hong Kong where I came from. HK people almost always increase the price so much that people are forced to move every 2 years. AFAIK there is no rent control in both HK and Tokyo. [1]: "the ratio of used homes circulating in the entire housing market remains below 15 percent, substantially smaller than in the United States and European countries." https://www.japantimes.co.jp/news/2017/12/26/national/japans-glut-abandoned-homes-hard-sell-bargains-opportunity-knocks/ https://www.japantimes.co.jp/news/2017/12/26/national/japans...
- jac_no_k 9y ago
  /me has "owned" (mortgage) two single dwelling houses in Southern California and on his third house in the Tokyo area. Another reason for general dislike of second hand houses is that these houses are poorly designed. Older houses in the Tokyo area (Kawasaki included), from even ten to fifteen years ago have have a raft of design problems from lack of insulation to using too low cost of materials. The first and third house was a bespoke build and I was met with bewildered architects when I specified designs that they considered appropriate only for Hokkaido (northern island that get cold air from Siberia). Other crazy things I had to make them modify was moving the fresh air intake vent away from the fuel cell generator, that doubles as hot water boiler which has a backup burner. They didn't seem to realize that a backup burner exists. There were a number of other mistakes that I pointed out that seemed to have left the builder in a puzzled state. I made my sales guy work for his pay. Walking around the new development area I'm in, I could point out any number of usability flaws that most of the house have. If these were missed, most likely a large number of technical flaws crept in as well. The second house was second-hand. (ha!) Very bad decision under somewhat forced circumstances. Very cheap specc'd floors that scratched easily. Practically no insulation. Poor air control, with vents pulling in air directly from the outside with no filtration or pre-conditioning. One of the reasons for moving on. And while I'm here, the first place we bought (place 0 in Japan) was a room in a mansion (aka an apartment). We bought this new, upgraded to durable floors. I was lucky to have been able to sell the place five years later for nearly the same price as I purchased it. Unlike California, the all buildings depreciate to nothing in 30 years. The HOA (home owners association) is only run professionally for the first 10 years. The next 10 years is a hand off to the residents. From what I now understand, while under professional management, the fees while high are spent well and banked for renovations to be done every decade. But the pattern is that after the second decade, under home owner control, the association votes to cut the fees. The association quickly runs out of money and the building falls into disrepair, accelerating the depreciation. The apartment becomes nearly worthless and difficult to sell, leaving people with 35 year mortgages under water. Nuts. I've also been in rental apartments and they have been cheaply made. Regarding rentals, I think the attitude is that the owner would rather deal with someone who is known to pay rather then having to deal with an unknown entity. It's a risk averse culture.
bane 9y ago
Not only is there enough housing, but the market calibrates it to be affordable. https://www.youtube.com/watch?v=Jv6SbFlZMbU https://www.youtube.com/watch?v=Jv6SbFlZMbU And there's enough space in the housing market to allow for ultra-precision housing alternatives like capsule hotels. If you need to commute in, there's an astonishingly good public transit system. The same youtube channel has an excellent multipart series on homelessness in Japan that's absolutely worth watching. Here's the episode on housing the homeless: https://www.youtube.com/watch?v=kBPyN3LE65g https://www.youtube.com/watch?v=kBPyN3LE65g
Feniks 9y ago
How? California doesn't have a housing plan. In Tokyo they decide top down how many houses need to be built. America operates on a free market.
hokus 9y ago
I enjoyed this read a while back. How I Used Eve Online to Predict the Great Recession (2013) (gamasutra.com) https://news.ycombinator.com/item?id=16469619 https://news.ycombinator.com/item?id=16469619

333 points by krausejj 9y ago

ISL 9y ago

"Sadly, the bill is already encountering opposition from homeowners’ groups, which are no doubt eager to push up their property values." My impression is that neighborhood groups aren't generally interested in raising property values, but rather in preserving the less-developed neighborhood in which they have invested and chosen to live.

mjevans 9y ago
I agree, it's more the "I got mine, screw everyone else" mentality.
- robotrout 9y ago
  A large influx of people into your area is almost guaranteed to lower your quality of life, either by increased crime, or just by increased congestion, increased noise, decreased property values, and possible demographic shifts that marginalize your culture. To minimize these concerns in the way you do seems non-productive and can only lead to more polarization. These types of initiatives stem from Agenda 21 https://en.wikipedia.org/wiki/Agenda_21 https://en.wikipedia.org/wiki/Agenda_21 proponents that, while advocating many admirable things, tend to completely ignore the feelings of the populations they are intent on engineering a radically different future for. I am saddened that the dream we all shared of allowing small towns to once again flourish, because knowledge workers could be located anywhere on the planet, are being quickly forgotten in favor of ultra-dense citiscapes.
  - jessaustin 9y ago
    ...guaranteed to lower your quality of life... This is why many people (not me!) support draconian immigration restrictions.
    - robotrout 9y ago
      I assume you are talking about Japan and Israels immigration restrictions. I support their right to them, personally, but I know there are many Americans who riot and march because those countries restrict their immigration so carefully.
      - jessaustin 9y ago
        No, I was thinking of an American politician who has been in the news quite a bit, who is a big opponent of immigration. He really represents the values of his NIMBY supporters.
  - Arbalest 9y ago
    If you're worried infill will cause cultural degradation, then perhaps your culture is not well suited to centralisation. That is, not suited to city living. Why else use Tokyo as an example of the success of infill? Japan is famous for it's low (petty at least) crime rate The point of decreased property values is even mentioned in the article as desirable and here you are saying it isn't. The objective here is to make housing affordable, not the preservation of wealth centres.
  - spoonie 9y ago
    If the lot your house sits on in rezoned to allow for taller buildings your property’s value will very likely go up. It is definitely less conveneient to have to move out of your house and wait for something bigger to be built.
  - xracy 9y ago
    This is the definition of "vaguely racist": "increased crime... and possible demographic shifts that marginalize your culture" Don't want none of them other demographics moving here to increase the crime, and marginalize the culture.
    - robotrout 9y ago
      If you look at any crime heat map of a city, you will note, hopefully with no surprise, that crime rate is inversely proportional to income distribution. If low income housing enters an area, the crime will go up. You may be fine with that, but you have to imagine that the already established residents of that area might not wish their crime rate to increase. Calling those concerns selfish is just name calling.
      - xracy 9y ago
        Yeah, You'll notice I called what you said racist, specifically because your statement didn't tie what you were saying to income, but instead to "demographics".
        xienze 9y ago
        “Demographics can refer to any subdivision of a population, it’s not a synonym for “race”.
    - ggg9990 9y ago
      Is that bad? If someone lives in a community that is 90% their race, with their neighbors listening to their kind of music, engaging in their kind of activities, going to the same kind of events, not wanting to become a 10% minority? It would be like a Chinese person not wanting to move to India or vice versa.
    - Mononokay 9y ago
      . . . It wasn't, though? He could easily be talking about Midwesterners moving there, too. He never brought up race, and thinking "Increased crime rates!? Demographic shifts by [Anything can go here, try "Neoconservatives" or "Neoliberals" or "Social Conservatives" or "Fiscally Conservative Liberals"]??!? HE MUST BE THINKING ABOUT [RACE]!" I think they're not the racist one here.
  - arebop 9y ago
    Cities are built on network effects. It's the suburbs specifically that are conceived and designed such that growth and diversity destroys value.
  - devopsforlyfe 9y ago
    > I am saddened that the dream we all shared of allowing small towns to once again flourish, because knowledge workers could be located anywhere on the planet, are being quickly forgotten in favor of ultra-dense citiscapes. It was always a futile dream, mostly propagated by people who themselves enjoy small towns and certainly not "shared by all". It turns out that many knowledge workers actually like big cities for the leisure options, health services, people and neighbourhood diversity, much bigger selection of potential life partners, and high availability of jobs.
    - JoeAltmaier 9y ago
      Circular? Remote workers means, there aren't more jobs just because you're in a city. As for neighborhoods, an expanding cityscape of just more apartment blocks means no neighborhoods at all. As for leisure options, a beach shared by 1M other people is not much of an option. Living in Colorado has orders of magnitude more leisure options for instance.
      - lotsofpulp 9y ago
        Isn’t that why Colorado cities are some of the hottest markets to be in right now? I’ve heard a lot of complaining from people in Denver, Boulder, Aspen, etc.
  - pcwalton 9y ago
    > A large influx of people into your area is almost guaranteed to lower your quality of life Speak for yourself. My quality of life has been very positively correlated with population density. It's why I'm settling down on the east side of San Francisco, and I'm eagerly awaiting the new development there.
- Arbalest 9y ago
  The term for that is NIMBY. Frankly, this is not news. The fact it has such an acronym means it is well established.
- zeth___ 9y ago
  If developers were given the chance they would turn every plot of land into a Kowloon walled city. We need someone pushing the other way to keep some spaces livable.
  - sdwa 9y ago
    We do, but clearly the balance right now is far too much in the favour of the naked self interest of shameless home owners. I mean a place to live is not a luxury, it's up there with food and water.
    - zeth___ 9y ago
      And if you're starving and there is free food one block over you go and eat there. There is plenty of very cheap land to live in. The problem is that no one wants to live there because living in dense cities for whatever reason is extremely appealing now. The price of a house grows exponentially with the minimum travel time to a metropolis from it. Blaming home owners for this is very useful scapegoating while ignoring the context.
      - thaumasiotes 9y ago
        > The price of a house grows exponentially with the minimum travel time to a metropolis from it. 10 minutes away: $1,000,000 20 minutes away: $2,000,000? 60 minutes away: $32,000,000?
        zeth___ 9y ago
        P_0 * exp(-k*d) Where P_0 is the price in the heart of the city, d is the effective distance to the heart of the city and k is a factor to get units matching up.
        thaumasiotes 9y ago
        Usually saying one quantity "grows with" another quantity would mean that one rising causes the other to rise, not fall.
- kbenson 9y ago
  I think often it's more complex than that. If prices are high enough in LA, it might actually be a case of "I got mine, screw everyone else" mentality, but I think much more often is more nuanced. People work hard to afford s home, and how do you explain to someone that saved for five plus years to afford a home that because of a new housing policy, it's possible their home could drop quite a bit in value, and not just because of normal cyclical market forces (meaning it could take decades to reach the same real value, if ever)? It's a hard decision to support legislation or policies that may may hurt double digit percentages of your populace, just because of bad timing on their part. At the same time, the need for cheaper housing is real. It's just not as simple as rich vs poor.
  - davidw 9y ago
    People were (and many still are) convinced that if black people move in next door, that the value of their house would fall. So they created policies, and acted, both formally and informally, to prevent that. These days most people regard that as horrible and in no way justified. Maybe one day we'll view exclusionary zoning in the same way. Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does: at a certain point, people become less enthusiastic about investing in new housing, so it's a much smoother curve that, realistically, is probably not going to crash prices. In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value.
    - kbenson 9y ago
      > ... These days most people regard that as horrible and in no way justified. Sure, but does that mean the family of five that was finally able to afford a home last year after scraping for years should pay for that? They could even be in the same demographic as the original victims of those exclusionary policies. > Furthermore, if housing is expensive, adding to the supply won't crater the price like the economy going bust does I'm not so sure, depending on how it's handled. Housing is a free market, and as such it's subject not just to supply and demand, but people's expectations of supply and demand. If I just bought a house and policies were announced that I thought might not just stagnate my house value, but actually reduce it over time, inflation-be-damned, I would be mightily tempted to sell if I had options. Get enough people doing that, and you might have a run-away market drop. The people who mainly benefit from that are those that are poised to take advantage of the situation on short notice (those with money available already and can take advantage of the eventual rebound). There are obviously ways you could crater the housing market in an area on purpose through policy, so it's not out of the question it could happen accidentally. I'm mainly arguing for people to see both sides and try to prevent that, and soften any blow and be prepared to counter a market that looks to be behaving irrationally. > In the end, though, you can't have both housing that's affordable, and also treat housing like some kind of investment that's supposed to keep growing and growing in value. I agree. I just think it's a complex situation that requires nuanced policy and constant attention, and isn't as simple as "build more houses" implies.
zkms 9y ago
> rather in preserving the less-developed neighborhood in which they have invested and chosen to live. If they didn't buy the property, they should have absolutely zero say about what kind of housing someone else builds on their property. Central-planning-via-veto (the effective state of USian land use law) is utterly broken in its giving veto authority to the most meddlesome moralistic normies on anything that they might not like, whether it be a cell tower, an apartment building, or bloody clothes lines (not kidding about the latter: https://en.wikipedia.org/wiki/Clothes_line#Controversy_in_North_America https://en.wikipedia.org/wiki/Clothes_line#Controversy_in_No...). That these people (the Twitter thread here has some prime material https://twitter.com/maelig/status/975219562433015808 https://twitter.com/maelig/status/975219562433015808) have the ability to obstruct the construction of housing (to the point that there are people literally living, shitting, and dying in US streets because housing is so unaffordable) is heinous. This is not how well-functioning societies look like.
- stevenwoo 9y ago
  The UK has a similar homelessness problem as far as I can tell from perusing the BBC. Do you think the causes are the same? I only keep up with the news there so not certain of historical trends except impending Brexit has seemed to have cause a slight dip in housing prices in London.

reaperducer 9y ago

Meanwhile, rural places in Japan are being rapidly de-peopled by both urban migration and an aging population. I read last year that some towns will actually GIVE foreigners a house if they promise to live there a certain numbers of years.

prawn 9y ago
Not just in Japan either. There have been cases of crumbling historic villages in Italy promising very cheap housing provided that the buyer commits to renovating and living within a certain period. I think stories like this couple well with one also from this week on HN: Why Cities Boom While Towns Struggle https://archive.is/9yDHx
chrischen 9y ago
This is a sign that the city is simply becoming more efficient and provides more for the population than rural sprawl.
John_KZ 9y ago
There's a reason for this. People love to go to the countryside for a weekend trip, but nobody live there. Why? Because there are no jobs and no people (or very few of them). Many families would be glad to escape to the countryside once they grow older and bigger, but they usually don't, because these problems still exist. Would you give up your carreer and your disposable income when you start a family, just to move to a village? Can you even find a job there? What about your social circles? What about when your kids need to go to university? I remember hearing a lot of talk about "the need to promote de-centralization" when I was a kid, but I don't remember hearing a single valid reason for it. It's always someone else that needs to move back to the countryside, not the speaker.

bassman9000 9y ago

One other reason that density might have been more politically acceptable in Japan is that houses are not used as a vehicle for middle-class wealth accumulation. On the spot.

aphextron 9y ago
>One other reason that density might have been more politically acceptable in Japan is that houses are not used as a vehicle for middle-class wealth accumulation. How do the Japanese build wealth, then? Buying a desirable home in a solid market is pretty much the only way for an average person earning the median wage to make it into the middle class.
- spoonie 9y ago
  Investing in the stock market over the long term is both simple and accessible to almost everyone.
  - kaycebasques 9y ago
    But in the case of Japanese specifically, I’m sure some of them are weary of stocks after the big crash in the 80s.
    - davidw 9y ago
      Housing prices can crash too. See: the US.
      - kaycebasques 9y ago
        The question here was “how do Japanese build wealth?” and someone suggested the stock market, so I replied that in the Japanese case, that might not actually be likely, because they had a big crash in the 80s which they have yet to recover from. No offense intended, but your comment doesn’t seem relevant to the discussion.

draw_down 9y ago

Yeah, jeez, why didn't we think of that.

nimbius 9y ago

Here in Los Angeles we have some of the most overvalued real estate in America. a bungalow in the city can go for millions, and is often torn down and replaced by a gleaming white McMansion because renovation is slower and costlier than filing new papers with the city. We cant just build more housing because traditional neighborhoods will fight to the death in courts to prevent multi family housing from devaluing their property or worse, competing for their rental income. The large apartment complexes that do get built are divided between anyone who can affort 10k a month in rent and fees, and "lower income" applicants who pay a fraction of this but are also held to strict terms and conditions. You wind up with millionaires and single moms living in beachfront Santa Monica communities, while anyone with a regular office job often commutes 40-70 miles in from the valley. Its often said you dont quit your job in LA, you quit your commute. new apartments built are not priced affordably because banks and investors want their interest back quickly and have promised surrounding neighborhoods they will price accordingly to keep out the riff raff. in turn, dilapidated apartment complexes from the 60's go for about the same rates because these property owners know there is no "better offer" in town. this doesnt even cover the 73,000 homeless people in Los Angeles county we cant seem to find a place for because no beach city wants to house their own unsustainable numbers of homeless, and no desert community is within a radius of health and welfare services required by many transients. Then there are the haters. people like the Aids Healthcare Foundation who ran a 6 month campaign to defeat city legislation for new affordable housing. Why? Mike Weinstein doesnt want any development to obstruct the view from his penthouse. http://www.latimes.com/local/lanow/la-me-ln-aids-foundation-political-spending-20170221-story.html http://www.latimes.com/local/lanow/la-me-ln-aids-foundation-... My husband and I live in LA and love it. but honestly, its bittersweet. We will never truly own anything more than a latte here.

jayd16 9y ago
The last paragraph is interesting. If we get more multi-family homes in LA, that's still not something to own. I guess single family homes could all turn into condominiums, as long as that counts as true ownership.
- 1stcity3rdcoast 9y ago

behindmyscreen 9y ago

Supply that meets demand means prices come down... however, it.needs to be the right supply for the right demand. A bunch of high end housing doesn't make middle or low end housing cheaper.

jseliger 9y ago
It does over time: http://cityobservatory.org/what-filtering-can-and-cant-do/ http://cityobservatory.org/what-filtering-can-and-cant-do/ or http://cityobservatory.org/urban-myth-busting-new-rental-housing-and-median-income-households http://cityobservatory.org/urban-myth-busting-new-rental-hou.... The problem is that we have a 40+ year backlog of underdevelopment: https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-the-1970s https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-.... We've waited till the symptoms are acute to even begin acting on the underlying problems. Then we're surprised when we don't see immediate, instantaneous fixes.
AgentME 9y ago
If people who would be buying high-end housing are forced to buy lower-end housing because the supply is tight, then prices will be forced to go up everywhere.
- stevenwoo 9y ago
  That's been happening in Bay Area for last 20 years, folks buying lower-end and demolishing and doing a rebuild. Palo Alto/Menlo Park are just more local and visible to me, but I assume it's the same elsewhere gradually. Coming from a softer market back around 2000 it was crazy to get outbid on a starter home and see someone demolish it right away.

ortusdux 9y ago

I really like the idea of Japan's zoning laws. They have 12 zones nationwide, and they restrict by maximum allowable nuisance. Industry is considered the highest nussicance and low rise residential the lowest. You cannot build a business in a residential area, but you can build apartments in a commercial zone. I feel this opens up many more options for growth while maintaining the spirit of American zoning laws. Here is a good explanation: http://urbankchoze.blogspot.ca/2014/04/japanese-zoning.html http://urbankchoze.blogspot.ca/2014/04/japanese-zoning.html

trisimix 9y ago
True spirit of opportunity right here
jacobolus 9y ago
Also importantly, even the lowest-density Japanese residential zones seem to allow some low apartment buildings and some home businesses, while other residential zones are mixed-use and allow corner stores etc. In e.g. San Francisco, more than half of the city is zoned to only allow detached height-limited single-family houses or sometimes duplexes, with businesses restricted to designated commercial streets. When you add wide streets with several wide lanes, generous street parking, parking requirements for buildings, long skinny land parcels with (often unused) space for a small yard in the back, etc., land use overall is incredibly inefficient even if you want to preserve the “local character” of low buildings. Look at the sea of light yellow zones in the zoning map, http://default.sfplanning.org/zoning/zoning_map.pdf http://default.sfplanning.org/zoning/zoning_map.pdf And among cities in the region SF has higher density and more flexible zoning than most. If we upzoned the Richmond, Sunset, and Marina neighborhoods from pale yellow to orange and purple, and added better transit, we could easily double the population of the city without anything taller than low-rise apartments.
- throwaway2048 9y ago
  paris is one of the highest density cities on earth with virutally no highrises whatsoever.

ajeet_dhaliwal 9y ago

No one gets the message in London. There should be high rise condo/apartment buildings like Manhattan, Hong Kong, Singapore, even Toronto, all over the place given the population but height restrictions persist so people live in cramped, miserable conditions. There are vested interest that make allowing this politically challenging, existing owners would see property prices plummet if this was allowed, and then there's some powerful people just block it for aesthetic reasons. Either way it can't continue without having an economic and innovation hit long term.

user5994461 9y ago
I'm not sure what you mean. There are quite a few skyscrapers in London. They are all new luxury properties and doesn't drop the price of anything.
buf 9y ago
New skyscrapers are going up all the time in London.
- rurounijones 9y ago
  Only business though no? OPs point is that there are no / not enough residential high-rises being built.
  - sievebrain 9y ago
    No, some are residential. I know someone who just moved in to the new skyscraper by Battersea power station
    - ajeet_dhaliwal 9y ago
      The Battersea / Nine Elms area has seen development over several years from when the American embassy announced they would be moving there, new tube stops are coming too but it’s just one targetted area only and the prices are totally crazy for anyone who is an ‘employee’ of any sort. Got your own multi million dollar business going? Then it’s no problem.

pfedigan 9y ago

What if I don't want to live in an apartment most of my life?

pchristensen 9y ago
Earn more or move or commute longer.
- majormajor 9y ago
  Or vote and be politically active. Ignoring that as a rational choice for many people already in expensive areas is just asking for your proposals to fail. We very frequently talk about the economic value that could be produced by different housing actions, but policy is not purely determined by economic value. I know more people opposed to upzoning because they like their yards and their space than because they're worried about their property values (denser cities in the US are very rarely cheaper).
- xenihn 9y ago
  Or work remotely
dibujante 9y ago
Leave. Or ask millions of people to kindly stop existing.
Daishiman 9y ago
Pay up the real value of a house in a city.
azernik 9y ago
Then you should probably not be living in an area where land is in short supply and high demand.
joejerryronnie 9y ago
Then you will be ostracized on HN for not being pro-urban.

braderhart 9y ago

More affordable housing equals don't overpopulate cities. I don't understand why in a digital age we are not promoting a society that values a healthy balance. Capitalism creates an unbalance that favors the rich and punishes the poor. There is also a lot of white privilege happening still in America regarding money, access to education and other challenges. The tech industry should be diversifying and encouraging remote workspaces and helping build communities for free education and housing using new tools for training, such as augmented reality devices. We are not too far off, but I believe we need a progressive effort to get there by promoting and using open source tools.

walshemj 9y ago

which will only help the property developers IMHO

kjksf 9y ago
Let's also set limits on how much milk farmers can make. Producing enough milk to fully satisfy demand only helps farmers.
- walshemj 9y ago
  you think developers aren't going to game the system big time

Apocryphon 9y ago

What are some other cities which are in-demand but have plentiful housing. Berlin? Montréal?

s0rce 9y ago
Not sure what the definition of plentiful is but Chicago is a great city and housing is far less expensive than other cities of similar size and with lots of stuff to do/eat. Doesn't have mountains or coastal California weather, so you win some you lose some. Seasons are nice though.
- dredmorbius 9y ago
  And the residents complain of high property taxes. They may not realise the blessing.
  - s0rce 9y ago
    Better than prop 13. Also, Illinois has lower state sales and income tax than California (not as low as other places though).

dalbasal 9y ago

IDK about some of this. When thinking about what policies we should have, we tend to overemphasize policies' effects on whatever we're we're looking to fix. A common trope is policing methods and crime rates. For example, I've heard a lot of talk this past year about german housing policy with Berlin cited as the best example. It rarely mentions that Berlin's population peaked before the war, reunification and other things that aren't housing policy. I'm not saying that Tokyo's housing policies are not good, just that there's likely a lot of context to their successes. Housing can be pretty complicated and nuanced. Policies don't translate well from one place to another. Where I live (dublin), house prices are effectively a derivative of bank policies. Whatever banks will loan the median person becomes the median house price. Now that we've had boom, bust & boom again... it's very easy to see how these two things track. In a less supply constrained scenario I think bigger houses, not cheaper ones. Another big part of the story here is a near unanimous objection to development in general, more out of conservatism than NIMBYism. So, stasis biased. Anyway, my point is that it's complicated. The dynamic in Dublin is different from Austin or Berlin, and policies exist within these contexts. It sounds like NIMBYism is a big factor in california. I imagine that the economic & population growth in these cities is another big factor.

stale2002 9y ago
Bigger houses by definition mean cheaper, at least in the city. This is because a bunch of young people can get together and live together in this hypothetical bigger house. Twice the size IS half the cost if twice as many people are living there.
- jacobolus 9y ago
  It’s bullshit that people who would prefer to live in studio or 1-bedroom apartments are forced to live 3–5 roommates to a house with all available rooms converted to bedrooms (for which the same land could easily fit several apartments) because the zoning doesn’t match demand, and otherwise it’s too expensive to stay anywhere within commute range. Especially bad when one of them wants to start a family but it’s simply impossible because giving up space in a rent controlled unit makes the whole region entirely unaffordable.

austincheney 9y ago

California is bleeding something like 60,000 residents to Texas each year. That sounds like a big number. https://qz.com/1189388/conservative-californians-are-moving-to-texas-for-the-home-prices-and-politics/ https://qz.com/1189388/conservative-californians-are-moving-...

pascalxus 9y ago
That's not nearly fast enough. We can't possibly loose enough people. But, it's a good start. Ideally, we would have a mass evacuation! I'd leave too, but we have family and friends here, not to mention a good job.
- IkmoIkmo 9y ago
  I don't really see the reason for downvotes. I don't take his comment as hostile, but rather simply as a function of economics. Suppose for a moment that everyone of the 7 billion people wanted to live in a single city. Taking it to the extreme. It doesn't work. Land prices would make everything unaffordable, there wouldn't be enough space to produce goods and provide space to live and work. The best thing in such a situation would be to say, let's have substantial people move away from this particular city, to live and work somewhere else where natural resources (land, what's on and under it) is abundant. To me it seems pretty obvious that this is the position that some price cities find themselves in. You can sort of look at a heat-map or height-map of population density. This map essentially expresses demand for that land, and that expresses the cost of the land. In that sense, population density to land can be viewed as interest rates to debt. The smartest thing to do in a debt situation is move high-interest debt to low-interest debt. Redistribute your debt to where it is cheap. Similarly, we ought to redistribute our demand for land to where it is cheap, which means moving people around. In that sense, the above comment makes sense to me. I'm not advocating for some kind of forced migration or anything, but companies and governments should inform, educate and incentivise this redistribution in a soft manner. Introducing (progressive) land taxes is probably part of the story.
adrr 9y ago
LA increased in population by 42k last year. That’s not the metro area which is also increasing.

popcorncolonel 9y ago

Everything in America should emulate Japan, pretty much.

azernik 9y ago
Just not the oppressive gender norms, the work-life balance at mainstream employers, the level of direct political corruption, or the thousand other very real problems Japan has that are worse than in the US. Let's not idealize foreign countries, please and thank you.
- buf 9y ago
  I agree that we shouldn't idealize. As an American, I've lived in western Europe, eastern Europe and spent months in Japan. There are some things these places do worth idealizing. Americans should travel more and replicate the best parts.
  - xenihn 9y ago
    >Americans should travel more and replicate the best parts. I hope you realize that the vast majority of the country isn't as privileged as we are when it comes to being able to afford to travel, or even to get time off in the first place.
    - eecsninja 9y ago
      > I hope you realize that the vast majority of the country isn't as privileged as we are when it comes to being able to afford to travel, or even to get time off in the first place. Yet those people will vote and otherwise support bad policies with their uninformed-ness.
    - azernik 9y ago
      I think this gives those of us who do have that privilege an obligation to be responsible about the ways we speak and write about our experiences. For the majority of Americans who never make it to e.g. Japan, it makes a difference how they hear travelers speak in person, on TV, or in commenters on reddit (or even, gasp, Hacker News).

nikanj 9y ago

It's too late for California. Either housing prices do come down considerably, and a lot of people have their futures ruined, or they don't come down considerably, and a lot of people have their futures ruined. Theoretically massive inflation would be able to fix this, except that would screw over everyone who's using the US dollar outside of California.

John_KZ 9y ago
Yep. I'm not an economist, but I've been watching this weird "urban inflation" trend too. People in big cities, even though they don't produce more or better work than others, get paid a lot more to account for the housing bubble, essentially increasing their buying power tremendously compared to people living in smaller cities. Imho we should give up on the idea of maintaining large cities as aesthetic monuments or something. It's bad enough for cities like London that have a decent population density, but places like LA where people just won't give up on the American suburbia model of housing is just insane. Cities aren't just a place to hang out and look at pretty buildings, people need to live there, work and transport within reasonable cost and time constrains. It's a very practical issue that needs to be solved. Living in a big city isn't just a luxury, it's a need too for many people.
- barry-cotter 9y ago
  You’re wrong. People in cities do produce more and better work than others. They’re also easier to serve so more businesses are viable there. Firms do not pay people more when rent is higher out of the kindness of their hearts, they do it because it’s worth the greater expense to them, because the workers are more skilled and more productive. Some of those higher wages accrue to landlords. Relevant link https://en.m.wikipedia.org/wiki/Economies_of_agglomeration https://en.m.wikipedia.org/wiki/Economies_of_agglomeration
  - Johnny555 9y ago
    Exactly - if Google didn't get good business value from having so many employees working at a central HQ (and busing employees from SF to Mountain View), they wouldn't do it -- they could save a lot of money on salaries and office space by hiring a distributed workforce across the rural USA (and world). They find the tangible and intangible benefits of a central HQ to be worth the price. They have so many small offices across the country that they could easily spread out their workforce nationwide and get out of the expensive Bay Area... if they felt it would provide value.

mikekchar 9y ago

I think it's important to have a bit of perspective on this graph. While it includes the tail end of "the bubble", the vast majority of this graph documents a time that is pretty difficult to compare with any major city. After the bubble, real estate prices lost up to 80% of their value. It slowly crept back up and in the early 2000s there were signs of vigorous recovery, but in 2006 when the government saw prices going up again, they restricted loans. This stabilised prices. In the last decade, while the prices have gone up and down, the price index now is practically the same as it was in 2010. There are a couple of other important factors. Between 1988 and 2013 (the part documented by the graph), the population of the country grew by only 5 million people. Tokyo's population grew from about 11 million to about 13 million in that time -- so it absorbed almost half of the total population increase of the entire country. Although I haven't looked, I'm willing to bet that Osaka absorbed the other half. So it's quite a bit easier to focus the government when all of your growth is in the same place. Furthermore, if we look at the population increase and compare that to the household increases in the graph, something is pretty apparent. Population increased by 2 million and households increased by 2 million. What that means is that Tokyo was overcrowded in 1988, with large numbers of people living in the same household. As new residences became available, they spread out. It's especially important to understand that in the early nineties, prices were getting cheaper, so that made it easier for people to move. So while building new residences is important, there are a whole host of other factors that led to Tokyo's success in this regard. Personally, I think the resolve to avoid real estate bubbles, even at the cost of economic growth is huge. One last thing I really need to point out because it's confusing for people who don't live in Japan: "Tokyo" usually refers to the prefecture of Tokyo, not just the city. There are parts of Tokyo prefecture that are decidedly rural, so it is doubly difficult to compare it with cities in other countries.

eecsninja 9y ago
If you want more data, see the chart in this article (sometimes behind paywall, so I'm linking archived version): http://archive.is/oXNHv http://archive.is/oXNHv The chart shows a comparison of increase in population vs increase in price, for four regions: San Francisco, London, "Tokyo", and the central district of Minato-ku. While the first three are vaguely defined since they could be either city limits or metropolitan areas, there is no such uncertainty about Minato-ku. Minato had a much larger percentage population increase than SF or London but a much smaller percentage price increase.

kevinburke 9y ago

Please call your state legislators - Senator and Assemblymember - about SB 827, which will do more to accomplish this outcome than any land use bill in the last twenty years. A lot of homeowners are opposing the bill and we could use your voice. http://findyourrep.legislature.ca.gov/ http://findyourrep.legislature.ca.gov/

JaggedJax 9y ago
I very much hope this bill goes through. The city I live in is a terrible mix of NIMBYism and corruption making it impossible to move an electrical outlet or put up a private awning, let along build anything on your property (have experience with all these attempted permits and more). The only thing that can stop this is the state completely overriding local zoning laws like this bill does. The state tried the carrot and many cities like mine ignored it. It's time for the stick.
- Decade 9y ago
  Don’t just hope. Join California YIMBY and contribute time and money to defeating NIMBYism. https://cayimby.org https://cayimby.org

MarkMc 9y ago

Seems that 'not in my back yard' is a big problem. So what about a rule that says, "If you build a high-density apartment you must financially compensate nearby residents"?

nsnick 9y ago
Nearby residents are already compensated. When you build a high density apartment, the value of land near it goes up.
- MarkMc 9y ago
  The value of the land goes up, but the potential rental income goes down due to increase in supply. For house-owners the net change in property value will likely be positive, but for apartment-owners it might well be negative. In any case, support for NIMBY suggests the current level of financial compensation is insufficient.

ggg9990 9y ago

Japan is so idiosyncratic that you cannot assume that any policy from there will behave similarly anywhere else (except in some cases Singapore)

eecsninja 9y ago
When did "idiosyncratic" come to describe a country where people are polite and keep their society clean and running punctually? Japan has little litter even though there are few trash cans in public. In the NYC subway, there is a ton of litter in the tracks even near a trash can. Maybe it is the West that is actually idiosyncratic?
- ggg9990 9y ago
  Idiosyncratic means unique. There are more countries with litter than without.
  - eecsninja 9y ago
    Fair point. But the laws of economics don't treat people differently just because they are culturally different -- supply, demand, price elasticity, cause-and-effect. If you restrict supply while demand goes up, don't be surprised that the city's real estate prices far outstrip people's incomes. Similarly, if you loosen the limitations to development, don't be surprised to see prices come down.
- apotheothesomai 9y ago
  Every culture by definition is idiosyncratic compared to others. Cultures are demarcated by their differences. There is no objective measure by which individual aspects of one culture can be judged better than another, unless the majority of people from every culture involved in the comparison have agreed to certain principles, e.g. slavery is unacceptable. The litter example simply illustrates a different cultural norm in a very homogenous society. The US is profoundly diverse and individualistic. Besides, the NYC has litter, when Tokyo transit has men reading rape comics on the train. Japanese culture is not perfect, nor is any culture.

cmcginty 9y ago

One word. NIMBY

b123400 9y ago

I think culture helps to keep the house price low as well. 1. They don't like secondhand homes, they rather rebuild it[1]. So houses are not a good investment vehicles. 2. They values good business practices in housing. (I don't have any data to support). Few months ago I was finding a room in Tokyo, the agent told me people usually live in the same place for years without rent increased. It's not usual to raise the price because it's considered rude and it's something the yakuzas do. It's an entirely different story in Hong Kong where I came from. HK people almost always increase the price so much that people are forced to move every 2 years. AFAIK there is no rent control in both HK and Tokyo. [1]: "the ratio of used homes circulating in the entire housing market remains below 15 percent, substantially smaller than in the United States and European countries." https://www.japantimes.co.jp/news/2017/12/26/national/japans-glut-abandoned-homes-hard-sell-bargains-opportunity-knocks/ https://www.japantimes.co.jp/news/2017/12/26/national/japans...

jac_no_k 9y ago
/me has "owned" (mortgage) two single dwelling houses in Southern California and on his third house in the Tokyo area. Another reason for general dislike of second hand houses is that these houses are poorly designed. Older houses in the Tokyo area (Kawasaki included), from even ten to fifteen years ago have have a raft of design problems from lack of insulation to using too low cost of materials. The first and third house was a bespoke build and I was met with bewildered architects when I specified designs that they considered appropriate only for Hokkaido (northern island that get cold air from Siberia). Other crazy things I had to make them modify was moving the fresh air intake vent away from the fuel cell generator, that doubles as hot water boiler which has a backup burner. They didn't seem to realize that a backup burner exists. There were a number of other mistakes that I pointed out that seemed to have left the builder in a puzzled state. I made my sales guy work for his pay. Walking around the new development area I'm in, I could point out any number of usability flaws that most of the house have. If these were missed, most likely a large number of technical flaws crept in as well. The second house was second-hand. (ha!) Very bad decision under somewhat forced circumstances. Very cheap specc'd floors that scratched easily. Practically no insulation. Poor air control, with vents pulling in air directly from the outside with no filtration or pre-conditioning. One of the reasons for moving on. And while I'm here, the first place we bought (place 0 in Japan) was a room in a mansion (aka an apartment). We bought this new, upgraded to durable floors. I was lucky to have been able to sell the place five years later for nearly the same price as I purchased it. Unlike California, the all buildings depreciate to nothing in 30 years. The HOA (home owners association) is only run professionally for the first 10 years. The next 10 years is a hand off to the residents. From what I now understand, while under professional management, the fees while high are spent well and banked for renovations to be done every decade. But the pattern is that after the second decade, under home owner control, the association votes to cut the fees. The association quickly runs out of money and the building falls into disrepair, accelerating the depreciation. The apartment becomes nearly worthless and difficult to sell, leaving people with 35 year mortgages under water. Nuts. I've also been in rental apartments and they have been cheaply made. Regarding rentals, I think the attitude is that the owner would rather deal with someone who is known to pay rather then having to deal with an unknown entity. It's a risk averse culture.

bane 9y ago

Not only is there enough housing, but the market calibrates it to be affordable. https://www.youtube.com/watch?v=Jv6SbFlZMbU https://www.youtube.com/watch?v=Jv6SbFlZMbU And there's enough space in the housing market to allow for ultra-precision housing alternatives like capsule hotels. If you need to commute in, there's an astonishingly good public transit system. The same youtube channel has an excellent multipart series on homelessness in Japan that's absolutely worth watching. Here's the episode on housing the homeless: https://www.youtube.com/watch?v=kBPyN3LE65g https://www.youtube.com/watch?v=kBPyN3LE65g

Feniks 9y ago

How? California doesn't have a housing plan. In Tokyo they decide top down how many houses need to be built. America operates on a free market.

hokus 9y ago

I enjoyed this read a while back. How I Used Eve Online to Predict the Great Recession (2013) (gamasutra.com) https://news.ycombinator.com/item?id=16469619 https://news.ycombinator.com/item?id=16469619