5 ms·

It's surprising to me that we aren't heavily subsidizing the development of high density apartments. Developers are building luxury housing because low and midd

It's surprising to me that we aren't heavily subsidizing the development of high density apartments. Developers are building luxury housing because low and middle income is not economically viable -- the cost of building materials and labor is rising, so why not use tax breaks and permit deregulation to spur more growth? I was surprised that the 2017 tax cut didn't seem to have any mechanisms to address the lack of middle class housing. I'm not sure if "opportunity zones" is sufficient.

wnissen 7y ago
Subsidizing? They are forbidden, period. My city is a Bay Area suburb and the last apartment building of any kind was built in 1978. Even if you could get zoning permission, the fee per housing unit is about $100K. This is supposed to cover the "impacts" on traffic, sewer, and, hilariously, affordable housing. A developer would have to be insane to build apartments for $200K when the city is getting $100K, when they can build a 2000 sq. ft. condo or zero-lot-line home instead.
cbhl 7y ago
I also found this surprising, until I realized that property taxes come from and city councils consist of the very people who like their neighbourhood and want it to stay exactly the way it is.
duxup 7y ago
I don't want to go too far down the path, but I don't think the motivations behind the 2017 US tax cut had anything to do with addressing middle class issues. The motivation wasn't about solutions as much as a sort of tax and government nihilism.
0xB31B1B 7y ago
Developers build luxury units not because constructing middle income housing not “economically viable” but rather because constructing middle income housing has essentially been banned in most cities by modern zoning codes and building regulations. Most cities either allow new housing as a single family home or as part of a 25+ unit building with minimum space requirements and 2 parking spots/unit. These regulations (parking, unit size minimums, the nature of constructing a 25 unit building, scarcity etc) make the housing more expensive. Minneapolis has recently changed their city wide zoning laws to allow for 4 unit building city wide, which will allow for cheaper “missing middle” type housing (2 - 6 unit building w no parking) that used to be constructed across urban neighborhoods in the US. There are new 2br units in 6plexes in Portland selling for ~350k. It’s possible to create new housing for the middle class, we just need to allow it.
- 40acres 7y ago
  Agreed, I live in downtown Portland and 3-5 luxury apartments have been built or are nearing completion within a 10 minute walk of my apartment. These all look like they can hold 100+ apartments, but are marketed towards yuppies and retirees. I grew up in a privately owned middle density (around 100 apartments) building, no parking but close to public transit and affordable for a wide range of income, it's baffling that more of these don't exist.
  - davidw 7y ago
    Basically any new housing in a place with a housing crisis is "luxury housing". Definitely worth supporting legislation like HB 2001 in Oregon that makes it possible to build slightly less expensive housing in broader areas.
    - 0xB31B1B 7y ago
      It’s ironic because in SF, the majority of new units constructed are in the bottom 35% cost for their neighborhood
- sologoub 7y ago
  Completely agree! One caveat though - living in big coastal cities we get decensitized to costs. 350k for a 2br isn’t really affordable. Using the rule of thumb from 60s - if median income is ~60k, the affordable home should not be more than 3x that, which is $180k.
helen___keller 7y ago
> It's surprising to me that we aren't heavily subsidizing the development of high density apartments Maybe a first step is to legalize higher density constructions in general - allow using a larger percentage of the same lot, subdivided into more units, all by right without the need to obtain exceptions from your local zoning board and without the chance for your neighbors to veto the development. If it were dirt simple to replace a single family home on a large lot with multiple homes on subdivisions of the lot, by right, for literally every single neighborhood in the state, we would avoid this cat and mouse game where everyone wants higher density until it comes to their neighborhood, because in their neighborhood the {traffic, schools, transit, lack of transit, sewer infrastructure, environmental concern, blocking sunlight, blocking view, etc} situation is too precarious to take the risk, so we need everyone to move somewhere else Even if we want the government to take heavy action to spur more construction, part of the reason every developer builds luxury housing is because it's so damn expensive and risky just to get through the stuff that comes before construction even begins (and consequently, lots sit idle for years at a time going through approval). That idle capital needs a return, so the only viable construction is luxury. We can address this issue now, and so if we inject taxpayer dollars to address housing later they will be more efficiently used anyways
rhino369 7y ago
Luxury housing is middle income housing with a doorman and better countertops. Luxury housing is built because it’s more profitable. But as new luxury is built, older luxury just becomes middle income. Hell, in DC the luxury places are often smaller than older middle income apartments. Also in some cities, middle income people cannot afford housing period.
bluGill 7y ago
https://www.strongtowns.org/journal/2017/12/11/immutable-laws-of-affordable-housing https://www.strongtowns.org/journal/2017/12/11/immutable-law... See rule 5. Developers always build luxury hosing, some years latter it is affordable as the rich move on.
Teckla 7y ago
high density apartments Light sleeper here. Apartments are a nonstarter for a lot of people, due to poor soundproofing. Unless and until soundproofing gets better -- and I mean a LOT better -- apartments will never be practical for a nontrivial percentage of the population, as much as we might otherwise prefer them.
- decebalus1 7y ago
  > Unless and until soundproofing gets better -- and I mean a LOT better -- apartments will never be practical for a nontrivial percentage of the population, as much as we might otherwise prefer them. Most likely never going to happen, at least not in the US where apartment buildings are basically wooden matchboxes. I grew up in the well-known gray communist concrete blocks in Eastern Europe and I never heard my upstairs neighbors peeing until I moved to the USA.
- imtringued 7y ago
  I don't get it. If my neighbours didn't renovate their apartments by drilling holes or hammering on the walls I wouldn't even know that other people besides me live in the same building. Sound proofing isn't going to stop walls from vibrating. Just suck it up. 2 days of noise a year isn't a nonstarter.
  - objectivetruth 7y ago
    Hi, let me help you "get" it with some counter anecdata: I've lived in places where I could fully hear spoken conversations of my neighbors. When you live in that situation for a while, hearing advice like "it's JUST 2 days a noise a year" and "Just suck it up" will drive you to a homicidal rage :)
- detaro 7y ago
  Soundproofing doesn't need to get better. Buildings just need to be built with it. (Annoyingly, retrofitting internal dampening appears to be very difficult, which is a problem)
- Cd00d 7y ago

wnissen 7y ago

Subsidizing? They are forbidden, period. My city is a Bay Area suburb and the last apartment building of any kind was built in 1978. Even if you could get zoning permission, the fee per housing unit is about $100K. This is supposed to cover the "impacts" on traffic, sewer, and, hilariously, affordable housing. A developer would have to be insane to build apartments for $200K when the city is getting $100K, when they can build a 2000 sq. ft. condo or zero-lot-line home instead.

cbhl 7y ago

I also found this surprising, until I realized that property taxes come from and city councils consist of the very people who like their neighbourhood and want it to stay exactly the way it is.

duxup 7y ago

I don't want to go too far down the path, but I don't think the motivations behind the 2017 US tax cut had anything to do with addressing middle class issues. The motivation wasn't about solutions as much as a sort of tax and government nihilism.

0xB31B1B 7y ago

Developers build luxury units not because constructing middle income housing not “economically viable” but rather because constructing middle income housing has essentially been banned in most cities by modern zoning codes and building regulations. Most cities either allow new housing as a single family home or as part of a 25+ unit building with minimum space requirements and 2 parking spots/unit. These regulations (parking, unit size minimums, the nature of constructing a 25 unit building, scarcity etc) make the housing more expensive. Minneapolis has recently changed their city wide zoning laws to allow for 4 unit building city wide, which will allow for cheaper “missing middle” type housing (2 - 6 unit building w no parking) that used to be constructed across urban neighborhoods in the US. There are new 2br units in 6plexes in Portland selling for ~350k. It’s possible to create new housing for the middle class, we just need to allow it.

40acres 7y ago
Agreed, I live in downtown Portland and 3-5 luxury apartments have been built or are nearing completion within a 10 minute walk of my apartment. These all look like they can hold 100+ apartments, but are marketed towards yuppies and retirees. I grew up in a privately owned middle density (around 100 apartments) building, no parking but close to public transit and affordable for a wide range of income, it's baffling that more of these don't exist.
- davidw 7y ago
  Basically any new housing in a place with a housing crisis is "luxury housing". Definitely worth supporting legislation like HB 2001 in Oregon that makes it possible to build slightly less expensive housing in broader areas.
  - 0xB31B1B 7y ago
    It’s ironic because in SF, the majority of new units constructed are in the bottom 35% cost for their neighborhood
sologoub 7y ago
Completely agree! One caveat though - living in big coastal cities we get decensitized to costs. 350k for a 2br isn’t really affordable. Using the rule of thumb from 60s - if median income is ~60k, the affordable home should not be more than 3x that, which is $180k.

helen___keller 7y ago

> It's surprising to me that we aren't heavily subsidizing the development of high density apartments Maybe a first step is to legalize higher density constructions in general - allow using a larger percentage of the same lot, subdivided into more units, all by right without the need to obtain exceptions from your local zoning board and without the chance for your neighbors to veto the development. If it were dirt simple to replace a single family home on a large lot with multiple homes on subdivisions of the lot, by right, for literally every single neighborhood in the state, we would avoid this cat and mouse game where everyone wants higher density until it comes to their neighborhood, because in their neighborhood the {traffic, schools, transit, lack of transit, sewer infrastructure, environmental concern, blocking sunlight, blocking view, etc} situation is too precarious to take the risk, so we need everyone to move somewhere else Even if we want the government to take heavy action to spur more construction, part of the reason every developer builds luxury housing is because it's so damn expensive and risky just to get through the stuff that comes before construction even begins (and consequently, lots sit idle for years at a time going through approval). That idle capital needs a return, so the only viable construction is luxury. We can address this issue now, and so if we inject taxpayer dollars to address housing later they will be more efficiently used anyways

rhino369 7y ago

Luxury housing is middle income housing with a doorman and better countertops. Luxury housing is built because it’s more profitable. But as new luxury is built, older luxury just becomes middle income. Hell, in DC the luxury places are often smaller than older middle income apartments. Also in some cities, middle income people cannot afford housing period.

bluGill 7y ago

https://www.strongtowns.org/journal/2017/12/11/immutable-laws-of-affordable-housing https://www.strongtowns.org/journal/2017/12/11/immutable-law... See rule 5. Developers always build luxury hosing, some years latter it is affordable as the rich move on.

Teckla 7y ago

high density apartments Light sleeper here. Apartments are a nonstarter for a lot of people, due to poor soundproofing. Unless and until soundproofing gets better -- and I mean a LOT better -- apartments will never be practical for a nontrivial percentage of the population, as much as we might otherwise prefer them.

decebalus1 7y ago
> Unless and until soundproofing gets better -- and I mean a LOT better -- apartments will never be practical for a nontrivial percentage of the population, as much as we might otherwise prefer them. Most likely never going to happen, at least not in the US where apartment buildings are basically wooden matchboxes. I grew up in the well-known gray communist concrete blocks in Eastern Europe and I never heard my upstairs neighbors peeing until I moved to the USA.
imtringued 7y ago
I don't get it. If my neighbours didn't renovate their apartments by drilling holes or hammering on the walls I wouldn't even know that other people besides me live in the same building. Sound proofing isn't going to stop walls from vibrating. Just suck it up. 2 days of noise a year isn't a nonstarter.
- objectivetruth 7y ago
  Hi, let me help you "get" it with some counter anecdata: I've lived in places where I could fully hear spoken conversations of my neighbors. When you live in that situation for a while, hearing advice like "it's JUST 2 days a noise a year" and "Just suck it up" will drive you to a homicidal rage :)
detaro 7y ago
Soundproofing doesn't need to get better. Buildings just need to be built with it. (Annoyingly, retrofitting internal dampening appears to be very difficult, which is a problem)
Cd00d 7y ago