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If only luxury housing gets built eventually the amount of middle class housing will become too scarce. This is quite apparent in Boulder, when I lived there th

If only luxury housing gets built eventually the amount of middle class housing will become too scarce. This is quite apparent in Boulder, when I lived there the citizens were quite good at banding together to prevent any development that wasn't going to be upper middle class and above.

burlesona 8y ago
Yes..... but historically a lot of middle class housing was luxury housing 20 years prior. You can see this in older areas all the time. I think a place like Boulder - smaller city, with most of its wealth and housing problems coming from national recognition and “lifestyle appeal” - is in a slightly different boat than most places.
Lazare 8y ago
On the face of that, this seems like a nonsensical objection. In my view, obviously "middle class housing" is just "average quality housing"; as more luxury homes are built, existing housing stock will start to be considered as middle class or working class. Further, this is how things have worked historically; in most cities I have been in, the working class housing stock is invariably older, and was originally built for other purposes, eg, a mansion now turned into apartments, or a middle class house now turned into a duplex, or simply a bunch of originally middle class tract housing now that the middle class can afford better. We have not historically, nor are we now, building large amounts of purpose-built working class housing. > If only luxury housing gets built eventually the amount of middle class housing will become too scarce. If housing of any type is built, then housing will not be scarce. If no housing of any type is built, then housing will be scarce. Worrying about the type seems like misguided micromanaging.
- andrewflnr 8y ago
  > If housing of any type is built, then housing will not be scarce. If no housing of any type is built, then housing will be scarce. Worrying about the type seems like misguided micromanaging. TFA is devoted entirely to debunking this idea and explaining in detail why worrying about the type of housing is very important. IMO it did a pretty solid job. If you have an actual counter-argument, let's hear it, but don't just assert it.
  - WillPostForFood 8y ago
    The counter argument is there is so little building happening, that while elasticity may be below 1 now, if we flood the market with construction, it would get close to 1. San Francisco added ~20k housing units between 2010 and 2017, an increase of 5%. This isn't even keeping up with demand. Do 20x more building, and then measure the elasticity.
    - burfog 8y ago
      You can't keep up with demand until the amount of housing (and thus people) is so high that the place becomes miserable enough that people start rejecting it. Different people have different thresholds of misery. Consider that people live in Manila, Mumbai, Guangzhou, and Dhaka. People even used to live in Kowloon Walled City, which looked like something out of the movie Bladerunner or maybe Soylent Green. That is what you'd get.
      - Redoubts 8y ago
        > the amount of housing (and thus people) is so high that the place becomes miserable What a bunch of nonsense.
- Cyclone_ 8y ago
  You're missing the point, people from middle class housing wont be able to move into luxury housing, most people don't have the means to do so. I don't see how you can believe that building luxury housing will help middle class people. Building middle class housing will help middle class people. If you don't believe that there's too few options for middle class people in Boulder and that it hasn't become too scarce I would encourage you to do some basic research using a simple tool like Zillow to look at prices. Building expensive homes raises the prices of everything around them so now most homes in a place like Boulder are out of reach.
  - AnthonyMouse 8y ago
    There are people who currently live in "middle class housing" even though they have more than middle class money because all housing is scarce. If you build more luxury housing then those people move out of the middle class housing into the new housing and then middle class people can move into the middle class housing. Moreover, there is no structural difference between "luxury housing" and "middle class housing". A building is a building. You take 10 units of "luxury housing" and add some walls and appliances and now it's 20 units of "middle class housing". The problem isn't what they're building, it's the zoning that prevents it from being subdivided that way.
    - Cyclone_ 8y ago
      That doesn't make any sense at all. No middle class person will be able to move into Boulder where the average home price is over $1 million. If someone moves out of there a middle class person wont be able to move in at that price point.
      - AnthonyMouse 8y ago
        It costs over $1 million because the existing owners aren't selling, because they don't have better properties to buy instead. Provide those and the existing properties go on the market, and once there are more of them on the market they can no longer command a million dollars.
  - 8y ago
eli 8y ago
Nobody is developing properties to leave them vacant, so any time you build housing you increase housing supply.
BurningFrog 8y ago
If you build enough "luxury housing" it will become very cheap. Prices are set by the number of units available vs number of people looking to rent/buy. The quality level is a very marginal factor.
JumpCrisscross 8y ago
> If only luxury housing gets built eventually the amount of middle class housing will become too scarce New Yorker here. Bunch of luxury buildings came up in my neighbourhood. The highest-income renters in my building decamped. As a result, my landlord reduced rents. Keep in mind that lots of present-day middle-class housing (e.g. Harlem) was once luxury housing.
jimrandomh 8y ago
The "luxury" housing that gets built in the Bay isn't actually special; it's just expensive because it's in high demand, and because being new means it isn't run down. The only axis on which housing ever really has much of a premium is square-footage, and the larger units just end up with more people living in them. It's sort of like the market for cars: poor and middle class people buy used, moderately wealthy people buy the same kinds of cars except new, and only a tiny fraction of the market is premium on any axis other than newness.

burlesona 8y ago

Yes..... but historically a lot of middle class housing was luxury housing 20 years prior. You can see this in older areas all the time. I think a place like Boulder - smaller city, with most of its wealth and housing problems coming from national recognition and “lifestyle appeal” - is in a slightly different boat than most places.

Lazare 8y ago

On the face of that, this seems like a nonsensical objection. In my view, obviously "middle class housing" is just "average quality housing"; as more luxury homes are built, existing housing stock will start to be considered as middle class or working class. Further, this is how things have worked historically; in most cities I have been in, the working class housing stock is invariably older, and was originally built for other purposes, eg, a mansion now turned into apartments, or a middle class house now turned into a duplex, or simply a bunch of originally middle class tract housing now that the middle class can afford better. We have not historically, nor are we now, building large amounts of purpose-built working class housing. > If only luxury housing gets built eventually the amount of middle class housing will become too scarce. If housing of any type is built, then housing will not be scarce. If no housing of any type is built, then housing will be scarce. Worrying about the type seems like misguided micromanaging.

andrewflnr 8y ago
> If housing of any type is built, then housing will not be scarce. If no housing of any type is built, then housing will be scarce. Worrying about the type seems like misguided micromanaging. TFA is devoted entirely to debunking this idea and explaining in detail why worrying about the type of housing is very important. IMO it did a pretty solid job. If you have an actual counter-argument, let's hear it, but don't just assert it.
- WillPostForFood 8y ago
  The counter argument is there is so little building happening, that while elasticity may be below 1 now, if we flood the market with construction, it would get close to 1. San Francisco added ~20k housing units between 2010 and 2017, an increase of 5%. This isn't even keeping up with demand. Do 20x more building, and then measure the elasticity.
  - burfog 8y ago
    You can't keep up with demand until the amount of housing (and thus people) is so high that the place becomes miserable enough that people start rejecting it. Different people have different thresholds of misery. Consider that people live in Manila, Mumbai, Guangzhou, and Dhaka. People even used to live in Kowloon Walled City, which looked like something out of the movie Bladerunner or maybe Soylent Green. That is what you'd get.
    - Redoubts 8y ago
      > the amount of housing (and thus people) is so high that the place becomes miserable What a bunch of nonsense.
Cyclone_ 8y ago
You're missing the point, people from middle class housing wont be able to move into luxury housing, most people don't have the means to do so. I don't see how you can believe that building luxury housing will help middle class people. Building middle class housing will help middle class people. If you don't believe that there's too few options for middle class people in Boulder and that it hasn't become too scarce I would encourage you to do some basic research using a simple tool like Zillow to look at prices. Building expensive homes raises the prices of everything around them so now most homes in a place like Boulder are out of reach.
- AnthonyMouse 8y ago
  There are people who currently live in "middle class housing" even though they have more than middle class money because all housing is scarce. If you build more luxury housing then those people move out of the middle class housing into the new housing and then middle class people can move into the middle class housing. Moreover, there is no structural difference between "luxury housing" and "middle class housing". A building is a building. You take 10 units of "luxury housing" and add some walls and appliances and now it's 20 units of "middle class housing". The problem isn't what they're building, it's the zoning that prevents it from being subdivided that way.
  - Cyclone_ 8y ago
    That doesn't make any sense at all. No middle class person will be able to move into Boulder where the average home price is over $1 million. If someone moves out of there a middle class person wont be able to move in at that price point.
    - AnthonyMouse 8y ago
      It costs over $1 million because the existing owners aren't selling, because they don't have better properties to buy instead. Provide those and the existing properties go on the market, and once there are more of them on the market they can no longer command a million dollars.
- 8y ago

eli 8y ago

Nobody is developing properties to leave them vacant, so any time you build housing you increase housing supply.

BurningFrog 8y ago

If you build enough "luxury housing" it will become very cheap. Prices are set by the number of units available vs number of people looking to rent/buy. The quality level is a very marginal factor.

JumpCrisscross 8y ago

> If only luxury housing gets built eventually the amount of middle class housing will become too scarce New Yorker here. Bunch of luxury buildings came up in my neighbourhood. The highest-income renters in my building decamped. As a result, my landlord reduced rents. Keep in mind that lots of present-day middle-class housing (e.g. Harlem) was once luxury housing.

jimrandomh 8y ago

The "luxury" housing that gets built in the Bay isn't actually special; it's just expensive because it's in high demand, and because being new means it isn't run down. The only axis on which housing ever really has much of a premium is square-footage, and the larger units just end up with more people living in them. It's sort of like the market for cars: poor and middle class people buy used, moderately wealthy people buy the same kinds of cars except new, and only a tiny fraction of the market is premium on any axis other than newness.