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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

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

wbl 7y ago
Explain Tokyo then.
- hash872 7y ago
  No lol. Teasing out how housing prices or rents are connected to macroeconomic conditions & public policy & developer sentiment & the interest rate environment is already complex enough- way more complex than these YIMBY 'supply and demand, it's economics 101 brah!' type arguments. Adding in another country with its own laws and policies and customs and macroeconomic environment is way too complex. My point is that YIMBY/Matt Yglesias-types are already making complex concepts way too simple- we don't need to add in another country that (frankly) virtually no one on Hacker News is qualified to explain on an economic & policy level. Like, Japan famously hasn't grown in years and years and is arguably suffering from deflation. Does that affect their housing prices as much as anything else? Does anyone here have a PhD to help explain these complex multi-causal factors? Probably not
- zjaffee 7y ago
  Tokyo is able to solve affordability with massive economies of scale around prefabricated buildings (that include multifamily buildings). To develop a comparable economy of scale, the US would need to significantly relax zoning rules and develop national by right standards.
pcwalton 7y ago
> The most viable way to create affordable housing is to admit that a very small number of Tier 1 US cities are effectively full Density of San Francisco: 18,838/mi^2. Density of Barcelona: 41,000/mi^2. > encourage smart young people to move to Denver and Charlotte and Miami and Raleigh and Indianapolis and Phoenix and Burlington and Madison and This is a failed strategy, and a bit of reflection shows why it is. Think from the perspective of Google. If Google thinks the best engineers are in the Bay Area†, Google needs to be in the Bay Area. Otherwise, the best Bay Area engineers, who have a choice in where they work by virtue of the fact that they're the best engineers, will go work for competitors. Now realize that this dynamic is true for Apple, Facebook, and even Amazon and Microsoft, and you see why the situation is the way it is. Given this, the realistic options are (1) drive everyone but the rich out of the Bay Area; (2) build more housing. So far, rich municipalities like San Francisco are choosing option (1) under the guise of "progressivism". Besides, even if it were possible to force Google to move, it isn't fair for rich people in the Bay Area to gentrify Modesto just because they don't want to build housing. †I'm not arguing that engineers in the Bay Area are actually better than engineers elsewhere. The point is that the big tech companies think that the best concentration of engineering talent is here, and economically, that's what matters.
- mwcampbell 7y ago
  I find it ironic that leading Internet software companies, of all things, don't go all-remote and start hiring people from all over without requiring them to relocate to a few over-populated hubs. Wouldn't that solve the problem? We know that distributed software teams can indeed work effectively.
  - pcwalton 7y ago
    If the market was going to solve the problem that way, then it would have by now. Hoping that Google would hire remotely more often won't fix the housing crisis. Some employees prefer offices, and not all jobs can be remote, such as Apple's hardware work. And there are other benefits of physical proximity: meetups, conferences, venture capital, etc. etc.
- zjaffee 7y ago
maxsilver 7y ago
This would be a good idea, if Tier 2 and Tier 3 cities weren't also "effectively full" (they aren't full, but their land is mostly all claimed by someone and unusable for human housing, so they are effectively 'full') We have an affordability crisis in Michigan because average rents are now up into the $1600/month range in many areas. Once you adjust for income, a $1600/month rent in Michigan is an effectively identical expense to a $3200/month rent in SF/NYC. When NYC / SF / other top-tier cities chew you up it's no big deal -- cash out and move to the Midwest. But what can someone do when a Midwest or other bottom-tier cities chews them up? They're stuck, there's nowhere cheaper to move that still has any jobs.

wbl 7y ago

Explain Tokyo then.

hash872 7y ago
No lol. Teasing out how housing prices or rents are connected to macroeconomic conditions & public policy & developer sentiment & the interest rate environment is already complex enough- way more complex than these YIMBY 'supply and demand, it's economics 101 brah!' type arguments. Adding in another country with its own laws and policies and customs and macroeconomic environment is way too complex. My point is that YIMBY/Matt Yglesias-types are already making complex concepts way too simple- we don't need to add in another country that (frankly) virtually no one on Hacker News is qualified to explain on an economic & policy level. Like, Japan famously hasn't grown in years and years and is arguably suffering from deflation. Does that affect their housing prices as much as anything else? Does anyone here have a PhD to help explain these complex multi-causal factors? Probably not
zjaffee 7y ago
Tokyo is able to solve affordability with massive economies of scale around prefabricated buildings (that include multifamily buildings). To develop a comparable economy of scale, the US would need to significantly relax zoning rules and develop national by right standards.

pcwalton 7y ago

> The most viable way to create affordable housing is to admit that a very small number of Tier 1 US cities are effectively full Density of San Francisco: 18,838/mi^2. Density of Barcelona: 41,000/mi^2. > encourage smart young people to move to Denver and Charlotte and Miami and Raleigh and Indianapolis and Phoenix and Burlington and Madison and This is a failed strategy, and a bit of reflection shows why it is. Think from the perspective of Google. If Google thinks the best engineers are in the Bay Area†, Google needs to be in the Bay Area. Otherwise, the best Bay Area engineers, who have a choice in where they work by virtue of the fact that they're the best engineers, will go work for competitors. Now realize that this dynamic is true for Apple, Facebook, and even Amazon and Microsoft, and you see why the situation is the way it is. Given this, the realistic options are (1) drive everyone but the rich out of the Bay Area; (2) build more housing. So far, rich municipalities like San Francisco are choosing option (1) under the guise of "progressivism". Besides, even if it were possible to force Google to move, it isn't fair for rich people in the Bay Area to gentrify Modesto just because they don't want to build housing. †I'm not arguing that engineers in the Bay Area are actually better than engineers elsewhere. The point is that the big tech companies think that the best concentration of engineering talent is here, and economically, that's what matters.

mwcampbell 7y ago
I find it ironic that leading Internet software companies, of all things, don't go all-remote and start hiring people from all over without requiring them to relocate to a few over-populated hubs. Wouldn't that solve the problem? We know that distributed software teams can indeed work effectively.
- pcwalton 7y ago
  If the market was going to solve the problem that way, then it would have by now. Hoping that Google would hire remotely more often won't fix the housing crisis. Some employees prefer offices, and not all jobs can be remote, such as Apple's hardware work. And there are other benefits of physical proximity: meetups, conferences, venture capital, etc. etc.
zjaffee 7y ago

maxsilver 7y ago

This would be a good idea, if Tier 2 and Tier 3 cities weren't also "effectively full" (they aren't full, but their land is mostly all claimed by someone and unusable for human housing, so they are effectively 'full') We have an affordability crisis in Michigan because average rents are now up into the $1600/month range in many areas. Once you adjust for income, a $1600/month rent in Michigan is an effectively identical expense to a $3200/month rent in SF/NYC. When NYC / SF / other top-tier cities chew you up it's no big deal -- cash out and move to the Midwest. But what can someone do when a Midwest or other bottom-tier cities chews them up? They're stuck, there's nowhere cheaper to move that still has any jobs.