5 ms·

Not a NIMBY. But. What these type of pieces never discuss is how much they think rents will be brought down by upzoning. Manhattan/the Bay Area/LA/DC would nee

Not a NIMBY. But. What these type of pieces never discuss is how much they think rents will be brought down by upzoning. Manhattan/the Bay Area/LA/DC would need staggering rental decreases to reach anyone's definition of 'affordable', much less the government's definition of a middle class family. Like, 33-50%+. I struggle to find examples of this happening in market economies outside of a major natural disaster. If the US was an authoritarian dictatorship and we bulldozed every single family home in the Bay Area, and replaced them with 100 story apartment buildings as far as the eye can see, of course rents would dramatically decrease. Seeing as that's not an option- the discussion is how much could rents be brought down by upzoning in a market economy where only so many homes are sold every year, developers can only build so much per year, development is very economic cycle and interest rate driven, etc. Like, upzoning only works once the existing single family home owner sells, and then a developer purchases. Did you know the average turnover in many neighborhoods is 1-2% annually? Thousands of units are not exactly going to flood the market overnight. I'm for upzoning generally, but people assign it magical properties that don't exist IRL. The whole NIMBY/YIMBY/build more discussion is kinda reaching unrealistic fever pitches among the right crowd of people who, like, follow Noah Smith on Twitter or whatever

rory096 7y ago
>What these type of pieces never discuss is how much they think rents will be brought down by upzoning. Sure they do. In an unconstrained market, prices will decline to the marginal cost of building one more unit. See Glaeser & Gyourko (2002): https://www.nber.org/papers/w8835.pdf https://www.nber.org/papers/w8835.pdf
riku_iki 7y ago
in market economies developer will come to homeowner and propose to buy house for 50% more than market price, owner will sell, buy house in another place and have half million $ on bank account.
hinkley 7y ago
In my old neighborhood, someone was going around buying pairs of pillbox houses and putting condos up in their place. I'm fairly certain that developers aren't waiting for houses to go up for sale to approach people. I know a guy who got cold called about his rental property because some big developer was trying to build... something... and needed about 5 lots to do it. They bumped the offer about 10% every time they called and eventually he was the last holdout so they called him a 3rd time.
xvedejas 7y ago
It's not really all-or-nothing though; even relieving rent a little bit in these places would represent relief for a large number of people. And upzoning has other benefits. People who own small SFHs and have family struggling to make rent will be able to add ADUs to help house that family. And fundamentally, upzoning is reducing restrictions on peoples' private property which to me seem needless. It sounds hyperbolic or cliche, but why not do it in the name of Freedom?
clairity 7y ago
> "What these type of pieces never discuss is how much they think rents will be brought down by upzoning." [slighted edited for clarity] according to some quick and dirty searching, we build about 140,000 units per year in california and need another 110,000 to house the net increase in population. that means we need 250K units per year total. it now costs about $400K to build a unit of housing. so that means we need $100B of new housing per year in cali. incidentally, the gdp is about $3T and the annual state budget is about $200B. at that rate of building (250K units/year), you'd expect housing prices to stabilize. if you want prices to go down, you'd have to build more than that (hard to incentivize unless costs are brought down or subsidies are brought up). according to the census, even in metropolitan statistical areas, new residential construction is mostly (90+%) detached single family residences (SFRs). so if we upzone all SFRs (R-1 in LA) to two-family residences (R-2 in LA) and encouraged the building of 2-family structures, we'd expect housing prices to stabilize, at least in metro areas, where housing is at crisis levels. i think this was the reasoning behind california cities (like pasadena) experimenting with allowing in-law/accessory units (based on the quick calcs above). i would actually go even further and upzone to R-3 (as proposed by scott weiner in SB50 [0]), which would then allow fourplexes on what would only have a single home. fourplexes are nice because the massing (from the street) is about the same as a single family home, but it potentially quadruples density. then you'd actually see decreases in housing costs. i'd also encourage owner-occupied fourplexes to create more coherent neighborhoods, rather than corporate-controlled rentals that extract and deplete wealth from a neighborhood. [0] https://www.latimes.com/politics/la-pol-ca-single-family-zoning-changes-senate-bill-50-legislation-20190513-story.html https://www.latimes.com/politics/la-pol-ca-single-family-zon...
- hash872 7y ago
  > new residential construction is mostly (90+%) detached single family residences But how much brand new residential construction on vacant plots of land is going on in the most expensive cities? The slightly unrealistic YIMBY movement makes it sound like there's many plots of vacant land just waiting to be developed. But..... there's not. Upzoning mostly means buying existing SFRs and doing teardowns, not just building brand new on these imaginary vacant plots of land in San Fran or Manhattan. This is limited by number of SFR sellers, etc.
paulddraper 7y ago
> What these type of pieces never discuss is how much they think rents will be brought down by upzoning. That's not the way to measure success. The way to measure success is the number of new people living in the desirable area. It's not "Rent is now $200 cheaper"; it's "3,000 people can now afford to live here that couldn't before (because, FYI, the rent is $X cheaper)".
- BurningFrog 7y ago
  Or, more likely, "3,000 fewer people were forced to move out".
ummonk 7y ago
NYC is already relatively affordable compared to the Bay Area despite its massive population, thanks to aggressive upzoming. Sure, Manhattan is expensive but it manages to absorb a ton of people and makes the surrounding areas far more affordable. Contrast with the Bay Area, where anything within reasonable commute time of SF or Silicon Valley is still very expensive.
zjaffee 7y ago
Upzoning would not make a place like manhattan more affordable, there have been studies (https://www.federalreserve.gov/econres/feds/files/2018035pap.pdf https://www.federalreserve.gov/econres/feds/files/2018035pap...) that evaluate what up to a 20% increase in housing supply would bring to any one given area and they never say it would fall by anything more than 2% (and that would be if the supply was introduced all at once in todays current environment). What is shown by this is that, when you build more housing in desirable areas, people will always move in to fill it. The value of which being that more people can now experience such desirable areas. In fact, the price decreases aren't coming from the actual housing supply increase directly, but that prices fall when there is a bigger competitive pool of those seeking housing and those supplying it even with 1:1 increases on both sides. So what's the solution? The truth is there isn't one, in our current political environment we will neither see a command economy that seriously solves housing issues (or even something like what singapore does). We won't see national multifamily by right zoning/building codes that enable economies of scale for high density construction. We won't see every suburb in America allow density increases to the level that automotive travel becomes a serious hassle. Additionally, we won't see major financing efforts come about for new housing production at the scale of a trillion dollars a year (which is the level of investment needed from a debt financing perspective). Within the broader market, the cost of financing and construction are just too high right now for housing prices to fall on the production side of the equation. It is not possible to build 1000 sqft apartments in existing dense parts of the US that cost $100k on the production side (what it would cost to build a similar sized average single family home) in any of these major cities, and that's before land acquisition costs. The truth is, that the most viable way for creating affordable housing in this country right now would be to build an entirely new city made up of moderately sized row homes that would have the ability to sprawl as such for 60 miles in any direction from its center.
- granshaw 7y ago
  Sounds like a great environment to invest in Real estate!
- hash872 7y ago
  Was with you until that last sentence. The most viable way to create affordable housing is to admit that a very small number of Tier 1 US cities are effectively full- and encourage smart young people to move to Denver and Charlotte and Miami and Raleigh and Indianapolis and Phoenix and Burlington and Madison and..... But yeah, everything else you said is spot on. I previously worked in commercial real estate, and I find the Matt Yglesias-types' understanding of how property development works to be bordering on magical. I mean, again, I fundamentally agree with the YIMBY movement, and that many zoning laws are glorified rent seeking. But the affordability issue is fast leaving rational discussion and entering belief system territory. Manhattan & the Bay Area & LA are expensive because the demand to live there is 10,000x or 20,000x what it is to live in, say, Milwaukee. This is the root of the problem- you cannot possibly build enough to sate demand in a non-command economy
eli_gottlieb 7y ago
I tend to think of it in much more brutalist terms: what's the desirable or appropriate ratio of population to housing units for housing to be affordable for everyone? If the ratio in one area is too high, upzone. If it's too low and that's somehow causing problems as well, downzone.
throwing838383 7y ago
Think of it like Climate Change. Sure, we can't fix the entire environment by planting a few trees, but every little bit helps. we owe it to future generations to try our best and get as much housing supply as we possibly can. The whole problem isn't going away in 1 year, it took 4+ decades to create this problem and it will take multiple decades to fix it completely too. Look at Houston. It's the 4th largest city in the US and growing much more quickly than any other city in CA. Their housing prices are 100$/sq ft!! How did they accomplish that? No zoning laws. Developers built as much housing as people needed and everyone prospers: it's win/win, more jobs, more housing, more prosperity. There's no reason this can't be done in an area with "nice weather"
- dillonmckay 7y ago
  That is how people wind up in this situation... https://apps.texastribune.org/harvey-reservoirs/ https://apps.texastribune.org/harvey-reservoirs/ Building homes in reservoirs.
- secabeen 7y ago
  Houston is really sprawling, and can expand in all directions. If the LA area didn't have an adjacent ocean, and mountains, it would be easier. Instead, if we do expand out past the mountains, then everyone has to funnel through the passes.
zkms 7y ago
> I struggle to find examples of this happening in market economies outside of a major natural disaster. i would suggest looking outside the US. The zoning/land-use regime where single-family zoning dominates is not universal -- see http://devonzuegel.com/post/north-american-vs-japanese-zoning http://devonzuegel.com/post/north-american-vs-japanese-zonin.... In fact, Japan kind of is a shining example of upzoning bringing down (and keeping down) rents to levels unthinkable in US cities.
jdavis703 7y ago
> If the US was an authoritarian dictatorship and we bulldozed every single family home in the Bay Area No where in the Bay Area "is built out" so there's no need to bulldoze single family homes. There's lot of parking lots, abandoned or under-utilized malls (e.g. Valco) and land zoned for other uses like office or manufacturing that can be used for new construction. I'm pretty sure building more alone won't solve the affordability problem, but it will stop prices from rising. As it stands as a software engineer I can't afford rent in the average San Francisco apartment (I live in Oakland, so I'm OK for now). But that's why many housing advocates support the three Ps: Production, Protection and Preservation. These three ideas combine to build more homes, protect exist tenants from abuses and to preserve existing affordable housing stock such as SROs. Zoning is not a magic pill for ending the crisis, but we can't even begin to do things like build government subsidized housing when communities spend 20 years battling one apartment building to house 28 families [0]. 0: https://twitter.com/LibbySchaaf/status/1128517407486517248?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet https://twitter.com/LibbySchaaf/status/1128517407486517248?r...

rory096 7y ago

>What these type of pieces never discuss is how much they think rents will be brought down by upzoning. Sure they do. In an unconstrained market, prices will decline to the marginal cost of building one more unit. See Glaeser & Gyourko (2002): https://www.nber.org/papers/w8835.pdf https://www.nber.org/papers/w8835.pdf

riku_iki 7y ago

in market economies developer will come to homeowner and propose to buy house for 50% more than market price, owner will sell, buy house in another place and have half million $ on bank account.

hinkley 7y ago

In my old neighborhood, someone was going around buying pairs of pillbox houses and putting condos up in their place. I'm fairly certain that developers aren't waiting for houses to go up for sale to approach people. I know a guy who got cold called about his rental property because some big developer was trying to build... something... and needed about 5 lots to do it. They bumped the offer about 10% every time they called and eventually he was the last holdout so they called him a 3rd time.

xvedejas 7y ago

It's not really all-or-nothing though; even relieving rent a little bit in these places would represent relief for a large number of people. And upzoning has other benefits. People who own small SFHs and have family struggling to make rent will be able to add ADUs to help house that family. And fundamentally, upzoning is reducing restrictions on peoples' private property which to me seem needless. It sounds hyperbolic or cliche, but why not do it in the name of Freedom?

clairity 7y ago

> "What these type of pieces never discuss is how much they think rents will be brought down by upzoning." [slighted edited for clarity] according to some quick and dirty searching, we build about 140,000 units per year in california and need another 110,000 to house the net increase in population. that means we need 250K units per year total. it now costs about $400K to build a unit of housing. so that means we need $100B of new housing per year in cali. incidentally, the gdp is about $3T and the annual state budget is about $200B. at that rate of building (250K units/year), you'd expect housing prices to stabilize. if you want prices to go down, you'd have to build more than that (hard to incentivize unless costs are brought down or subsidies are brought up). according to the census, even in metropolitan statistical areas, new residential construction is mostly (90+%) detached single family residences (SFRs). so if we upzone all SFRs (R-1 in LA) to two-family residences (R-2 in LA) and encouraged the building of 2-family structures, we'd expect housing prices to stabilize, at least in metro areas, where housing is at crisis levels. i think this was the reasoning behind california cities (like pasadena) experimenting with allowing in-law/accessory units (based on the quick calcs above). i would actually go even further and upzone to R-3 (as proposed by scott weiner in SB50 [0]), which would then allow fourplexes on what would only have a single home. fourplexes are nice because the massing (from the street) is about the same as a single family home, but it potentially quadruples density. then you'd actually see decreases in housing costs. i'd also encourage owner-occupied fourplexes to create more coherent neighborhoods, rather than corporate-controlled rentals that extract and deplete wealth from a neighborhood. [0] https://www.latimes.com/politics/la-pol-ca-single-family-zoning-changes-senate-bill-50-legislation-20190513-story.html https://www.latimes.com/politics/la-pol-ca-single-family-zon...

hash872 7y ago
> new residential construction is mostly (90+%) detached single family residences But how much brand new residential construction on vacant plots of land is going on in the most expensive cities? The slightly unrealistic YIMBY movement makes it sound like there's many plots of vacant land just waiting to be developed. But..... there's not. Upzoning mostly means buying existing SFRs and doing teardowns, not just building brand new on these imaginary vacant plots of land in San Fran or Manhattan. This is limited by number of SFR sellers, etc.

paulddraper 7y ago

> What these type of pieces never discuss is how much they think rents will be brought down by upzoning. That's not the way to measure success. The way to measure success is the number of new people living in the desirable area. It's not "Rent is now $200 cheaper"; it's "3,000 people can now afford to live here that couldn't before (because, FYI, the rent is $X cheaper)".

BurningFrog 7y ago
Or, more likely, "3,000 fewer people were forced to move out".

ummonk 7y ago

NYC is already relatively affordable compared to the Bay Area despite its massive population, thanks to aggressive upzoming. Sure, Manhattan is expensive but it manages to absorb a ton of people and makes the surrounding areas far more affordable. Contrast with the Bay Area, where anything within reasonable commute time of SF or Silicon Valley is still very expensive.

zjaffee 7y ago

Upzoning would not make a place like manhattan more affordable, there have been studies (https://www.federalreserve.gov/econres/feds/files/2018035pap.pdf https://www.federalreserve.gov/econres/feds/files/2018035pap...) that evaluate what up to a 20% increase in housing supply would bring to any one given area and they never say it would fall by anything more than 2% (and that would be if the supply was introduced all at once in todays current environment). What is shown by this is that, when you build more housing in desirable areas, people will always move in to fill it. The value of which being that more people can now experience such desirable areas. In fact, the price decreases aren't coming from the actual housing supply increase directly, but that prices fall when there is a bigger competitive pool of those seeking housing and those supplying it even with 1:1 increases on both sides. So what's the solution? The truth is there isn't one, in our current political environment we will neither see a command economy that seriously solves housing issues (or even something like what singapore does). We won't see national multifamily by right zoning/building codes that enable economies of scale for high density construction. We won't see every suburb in America allow density increases to the level that automotive travel becomes a serious hassle. Additionally, we won't see major financing efforts come about for new housing production at the scale of a trillion dollars a year (which is the level of investment needed from a debt financing perspective). Within the broader market, the cost of financing and construction are just too high right now for housing prices to fall on the production side of the equation. It is not possible to build 1000 sqft apartments in existing dense parts of the US that cost $100k on the production side (what it would cost to build a similar sized average single family home) in any of these major cities, and that's before land acquisition costs. The truth is, that the most viable way for creating affordable housing in this country right now would be to build an entirely new city made up of moderately sized row homes that would have the ability to sprawl as such for 60 miles in any direction from its center.

granshaw 7y ago
Sounds like a great environment to invest in Real estate!
hash872 7y ago
Was with you until that last sentence. The most viable way to create affordable housing is to admit that a very small number of Tier 1 US cities are effectively full- and encourage smart young people to move to Denver and Charlotte and Miami and Raleigh and Indianapolis and Phoenix and Burlington and Madison and..... But yeah, everything else you said is spot on. I previously worked in commercial real estate, and I find the Matt Yglesias-types' understanding of how property development works to be bordering on magical. I mean, again, I fundamentally agree with the YIMBY movement, and that many zoning laws are glorified rent seeking. But the affordability issue is fast leaving rational discussion and entering belief system territory. Manhattan & the Bay Area & LA are expensive because the demand to live there is 10,000x or 20,000x what it is to live in, say, Milwaukee. This is the root of the problem- you cannot possibly build enough to sate demand in a non-command economy

eli_gottlieb 7y ago

I tend to think of it in much more brutalist terms: what's the desirable or appropriate ratio of population to housing units for housing to be affordable for everyone? If the ratio in one area is too high, upzone. If it's too low and that's somehow causing problems as well, downzone.

throwing838383 7y ago

Think of it like Climate Change. Sure, we can't fix the entire environment by planting a few trees, but every little bit helps. we owe it to future generations to try our best and get as much housing supply as we possibly can. The whole problem isn't going away in 1 year, it took 4+ decades to create this problem and it will take multiple decades to fix it completely too. Look at Houston. It's the 4th largest city in the US and growing much more quickly than any other city in CA. Their housing prices are 100$/sq ft!! How did they accomplish that? No zoning laws. Developers built as much housing as people needed and everyone prospers: it's win/win, more jobs, more housing, more prosperity. There's no reason this can't be done in an area with "nice weather"

dillonmckay 7y ago
That is how people wind up in this situation... https://apps.texastribune.org/harvey-reservoirs/ https://apps.texastribune.org/harvey-reservoirs/ Building homes in reservoirs.
secabeen 7y ago
Houston is really sprawling, and can expand in all directions. If the LA area didn't have an adjacent ocean, and mountains, it would be easier. Instead, if we do expand out past the mountains, then everyone has to funnel through the passes.

zkms 7y ago

> I struggle to find examples of this happening in market economies outside of a major natural disaster. i would suggest looking outside the US. The zoning/land-use regime where single-family zoning dominates is not universal -- see http://devonzuegel.com/post/north-american-vs-japanese-zoning http://devonzuegel.com/post/north-american-vs-japanese-zonin.... In fact, Japan kind of is a shining example of upzoning bringing down (and keeping down) rents to levels unthinkable in US cities.

jdavis703 7y ago

> If the US was an authoritarian dictatorship and we bulldozed every single family home in the Bay Area No where in the Bay Area "is built out" so there's no need to bulldoze single family homes. There's lot of parking lots, abandoned or under-utilized malls (e.g. Valco) and land zoned for other uses like office or manufacturing that can be used for new construction. I'm pretty sure building more alone won't solve the affordability problem, but it will stop prices from rising. As it stands as a software engineer I can't afford rent in the average San Francisco apartment (I live in Oakland, so I'm OK for now). But that's why many housing advocates support the three Ps: Production, Protection and Preservation. These three ideas combine to build more homes, protect exist tenants from abuses and to preserve existing affordable housing stock such as SROs. Zoning is not a magic pill for ending the crisis, but we can't even begin to do things like build government subsidized housing when communities spend 20 years battling one apartment building to house 28 families [0]. 0: https://twitter.com/LibbySchaaf/status/1128517407486517248?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet https://twitter.com/LibbySchaaf/status/1128517407486517248?r...