7 ms·

The housing problem is because CA et al fight new construction. This does far more to hurt renters than anything else: https://www.latimes.com/local/lanow/la-m

The housing problem is because CA et al fight new construction. This does far more to hurt renters than anything else: https://www.latimes.com/local/lanow/la-me-ln-housing-bill-council-20180326-story.html https://www.latimes.com/local/lanow/la-me-ln-housing-bill-co...

knubie 7y ago
I see this conventional wisdom posted a lot here on hacker news and other forums, but is it really true? There are plenty of high density cities with high housing costs.
- zanny 7y ago
  High housing costs are always, without fail, a regulatory problem. If the rents are high because of a lack of available units, you build more units or make more units available. If you are at peak carrying capacity in a given city you need to expand infrastructure (vertically or horizontally) to support more & denser development. The trick is both can require public spending to make work. You can't just rezone and let a city go and expect magic in the first case scenario. You often need government subsidized building of cheap apartments to spur the economy to build up and attract investment / higher paying residents to build generalized housing. Most developers are looking for the highest margin building they can do, and while in theory any potential profit from building should eventually be met there are only so many construction companies, especially urban highrise class builders, and they prioritize the best deal.
  - sethammons 7y ago
    > If you are at peak carrying capacity in a given city you need to expand infrastructure... Why not say, "sorry, we are full"?
    - selectodude 7y ago
      Because here in the United States that isn’t something that you can say.
      - jimmaswell 7y ago
        Not taking a side but it seems like that's what a lot of people were trying to say with the idea of the wall and everything.
        harambaebae69 7y ago
        Legal residents of a country choosing to relocate to a new city is a different issue than the enforcement of national borders.
    - Retric 7y ago
      Because full depends on infrastructure. Tokyo sits at ~37.5 million people demonstrating few cities are near any real limits. https://en.m.wikipedia.org/wiki/Greater_Tokyo_Area https://en.m.wikipedia.org/wiki/Greater_Tokyo_Area
      - seanmcdirmid 7y ago
        Tokyo metro is 37 million, Tokyo city is 13 or so million. As always, City classifications are a bit weird in Asia (see Chongqing).
        Retric 7y ago
        It’s not that different from New York City which is technically 8.6 million, but people over a much larger area commute to the city center which has real impact on housing costs. Thus the Metropolitan Statistical Area (20.3 million) and other such approximations. https://en.m.wikipedia.org/wiki/New_York_metropolitan_area https://en.m.wikipedia.org/wiki/New_York_metropolitan_area It really comes down to transit not where lines are drawn on a map.
        seanmcdirmid 7y ago
        As long as we are comparing apples to apples. Actually Chongqing is worse since you can’t really commute daily from the hinterland into the city (same with Beijing and even Shanghai). Japan is quite unique with commuter oriented HSR (eg tokaido line for Tokyo, though it would be a horrible expensive life to commute daily from Yokohama).
    - kradroy 7y ago
      Well, that does happen implicitly, except the full statement is "Sorry, we are full to our limit of low income residents." They eventually get replaced by richer residents.
    - dodobirdlord 7y ago
      Cities in the United States have no mechanism to prevent nonresidents from moving in. If nonresidents want to move in and capacity is not expanding it will drive up prices and result in economic pressures on the poorest residents until they vacate enough space to reach an equilibrium. A city can control how many people get to live there, or it can work to ensure that all current residents can continue to live there, but the Takings Clause of the Constitution essentially prevents doing both. Saying "sorry, we are full" (like San Francisco) amounts to telling a large portion of your poorest residents to get out (like San Francisco). People are generally pretty bad at putting two and two together and realizing that their misfortune is the result of poor capacity planning by their city government, but they still tend to get angry and angry people tend to vote out whoever is currently running their city, so pissing off a large swath of residents is rarely a good strategy.
      - User23 7y ago
        Cities may not be able to control nonresidents moving in directly, but their taxing authority is more than sufficient to strongly discourage it. A municipality could massively raise property taxes and grandfather in current city residents for example. It could then use the new revenues to ensure the current residents can continue to live there.
        ericd 7y ago
        Yep, prop 13 and insane property prices serve that function in the SF Bay Area. If you buy now, you pay $2M upfront and ~$20k/yr property tax for a small ranch house, while your neighbor who has lived in a similar house for 40 years pays <$2k/yr, less on an inflation adjusted basis than when they moved in, thanks to prop 13. The cherry on top is that after paying a small fortune for your house, your municipal (and school) budgets are stretched thin, despite some of the highest land values in the country, because so few of the long time residents are paying anywhere near the nominal 1.x% rate. And then the long time residents loudly complain that infrastructure is buckling, and we can't afford to improve it, so we can't expand housing. It's maddening.
        7y ago
  - Retric 7y ago
    The need for massive investments in public transportation is a little more than just a regularly problem. The real solution is allowing but taxing new development and using that money to wisely pay for new infrastructure. This rarely happens because developers want to pocket that difference, nimby wants zero development, and everyone wants to spend that money on their own ‘critical’ projects.
  - mrep 7y ago
    > High housing costs are always, without fail, a regulatory problem. True, I would have built a 10,000 square foot single famly home with a massive yard in manhattan facing central park but those damn regulations are making it too expensive /s
  - ChrisLomont 7y ago
    >High housing costs are always, without fail, a regulatory problem. It's not possible that desirable places may have more demand than physical space?
manfredo 7y ago
The two are interconnected. There's less willingness to reduce communities' ability to block housing construction and approve of higher density limits because a large segment of renters have price-controlled housing.
- 80mph 7y ago
  I really enjoy reading your pro-housing arguments. I'm stuck in a debate with a NIMBYist on Nextdoor, and would appreciate your perspective. Do you have an email address I can contact you at? This is in the South bay.
rmrfrmrf 7y ago
San Francisco has 100,000 vacant homes and 10,000 homeless people. [1] https://sf.curbed.com/2019/3/21/18276227/vacancy-rate-san-jose-san-francisco-lendingtree https://sf.curbed.com/2019/3/21/18276227/vacancy-rate-san-jo... [2] https://abc7news.com/society/homeless-population-history-in-bay-area/5260657/ https://abc7news.com/society/homeless-population-history-in-...
- wonnage 7y ago
  Did you even read your source? 100k includes Oakland and Hayward. also, did you seriously think that the problem with homelessness is that they didn't have a house to stay in?
  - newshorts 7y ago
    We should always be respectful to one another.
  - deleted 7y ago
    [deleted]
- epistasis 7y ago
  Though you messed up the basic numbers, I think that the larger point needs addressing. Why are these homes vacant? Should people be allowed to take a month of vacation without losing their home? Is it ok for an apartment or house to be empty for a few months in between residents? One month in between tenants every two years is more than a 4% vacancy rate. What should the vacancy rate be? And what if in addition to housing the homeless we also want to house workers with unreasonable commutes? Every single person I know who has raise this X vacant homes and <X homeless has not bothered to ask these very basic questions. We need more homes. 25% more than we currently have, in the high demand areas. We don't need hem in Detroit or Stockton, we need them next to jobs. And we need to stop the profiteering home owners who speculate on the value of their homes by blocking others from living close to them.
  - fragmede 7y ago
    Obviously there will be some time between renters where units will sit vacant, but that's not the issue. Units are vacant because landlords don't want to rent them out for various reasons. Totally different situation! So, during this housing crunch units sit vacant and very little supply is being added. Sure, owning property means they're allowed to do whatever they want with it (within reason), but we're also free to complaint about the situation. As to why landlords leave units empty; rent control. Rent control and strong renters protections, combined with dramatically increasing market rate, means landlords will get more money if they keep a unit empty for a year.
human20190310 7y ago
You're assuming that things can get worse for renters. The housing market in California is already non-functional because supply is not allowed to meet demand, which puts renters at a tremendous disadvantage. Efforts to relax restrictions on new housing construction have failed. Adding restrictions until the market breaks in ways that everyone hates might be the only way to get any momentum toward fixing things.
em3rgent0rdr 7y ago
Both nimbyism and rent-control are problems.
- irq11 7y ago
  Rent control in SF is not really a problem: https://www.cato.org/publications/research-briefs-economic-policy/effects-rent-control-expansion-tenants-landlords https://www.cato.org/publications/research-briefs-economic-p... Pretty much the only study I’m aware of that took the issue head-on, from the Cato institute. They found that rent control greatly benefits recipients, that rents increase diffusely citywide (about 5%), and that the overall positive and negative impacts were roughly equally balanced (~$3Bn over 17 years). The net is slightly positive, in fact. In other words, rent control pretty much does what’s printed on the tin: helps certain renters a lot, hurts others a tiny amount, averages out to zero net impact. Here’s the TL;DR: ”On net, incumbent San Francisco residents appear to come out ahead, but this is at the great expense of welfare losses from future inhabitants.” You can certainly debate the desirability of that outcome, but it’s exactly as advertised.
  - irq11 7y ago
    It is absolutely pathetic that HN’s mods continue to allow politically biased censorship of factual comments using downvotes. Mods, if you can’t control the ideologues, it’s time to get rid of graying of downvoted comments. People are just using it to censor speech.
  - nugget 7y ago
    The practical result of rent control is the further enrichment of real estate developers and investors. It appears to be a populist focused measure and therefore wins support from certain political factions. Meanwhile it removes supply from the market and in a market where demand far exceeds supply - like the Bay Area - it drives up prices for new development. It's one of the more intriguing political coalitions out there. As housing prices increase, salaries have to increase in order to attract and retain talent. In the Bay Area, this represents a transfer of wealth from tech investors to real estate investors and developers. The generous valuations granted to tech companies by the private and public equity markets make this possible, for now.
m463 7y ago
I thought the California rent control: - didn't control much more than egregious rent increases - didn't apply to new housing - expired after a time
- cortesoft 7y ago
  There is no 'California rent control' Each city has its own law. Edit: whoops... I had meant the currently active laws, not the new statewide law. Now I realize the comment was about the new law.
  - gruez 7y ago
    what? https://www.nytimes.com/2019/09/11/business/economy/california-rent-control.html https://www.nytimes.com/2019/09/11/business/economy/californ...
    - cortesoft 7y ago
      Oh, I thought they meant the currently active laws. My bad.
- jedberg 7y ago
  >didn't control much more than egregious rent increases This is accurate, this year the increase limit is 7%, which is pretty much unheard of except in the most egregious cases. > didn't apply to new housing > expired after a time The expiration is on the waiver for new buildings. Rent control won't apply to buildings that opened within the past 15 years, and it won't apply to single-family homes, unless they’re owned by a corporation, or duplexes where the owner lives in one of the units.
  - m463 7y ago
    I might not understand the "expired" part. I understood that it meant the controls would only be in effect until 2030.
tootie 7y ago
Supply and demand. It's just that simple.
cowpig 7y ago
This is totally unrelated to the article, but are you by any chance the DanTheMan of Wilt Chamberlain Archive fame?

knubie 7y ago

I see this conventional wisdom posted a lot here on hacker news and other forums, but is it really true? There are plenty of high density cities with high housing costs.

zanny 7y ago
High housing costs are always, without fail, a regulatory problem. If the rents are high because of a lack of available units, you build more units or make more units available. If you are at peak carrying capacity in a given city you need to expand infrastructure (vertically or horizontally) to support more & denser development. The trick is both can require public spending to make work. You can't just rezone and let a city go and expect magic in the first case scenario. You often need government subsidized building of cheap apartments to spur the economy to build up and attract investment / higher paying residents to build generalized housing. Most developers are looking for the highest margin building they can do, and while in theory any potential profit from building should eventually be met there are only so many construction companies, especially urban highrise class builders, and they prioritize the best deal.
- sethammons 7y ago
  > If you are at peak carrying capacity in a given city you need to expand infrastructure... Why not say, "sorry, we are full"?
  - selectodude 7y ago
    Because here in the United States that isn’t something that you can say.
    - jimmaswell 7y ago
      Not taking a side but it seems like that's what a lot of people were trying to say with the idea of the wall and everything.
      - harambaebae69 7y ago
        Legal residents of a country choosing to relocate to a new city is a different issue than the enforcement of national borders.
  - Retric 7y ago
    Because full depends on infrastructure. Tokyo sits at ~37.5 million people demonstrating few cities are near any real limits. https://en.m.wikipedia.org/wiki/Greater_Tokyo_Area https://en.m.wikipedia.org/wiki/Greater_Tokyo_Area
    - seanmcdirmid 7y ago
      Tokyo metro is 37 million, Tokyo city is 13 or so million. As always, City classifications are a bit weird in Asia (see Chongqing).
      - Retric 7y ago
        It’s not that different from New York City which is technically 8.6 million, but people over a much larger area commute to the city center which has real impact on housing costs. Thus the Metropolitan Statistical Area (20.3 million) and other such approximations. https://en.m.wikipedia.org/wiki/New_York_metropolitan_area https://en.m.wikipedia.org/wiki/New_York_metropolitan_area It really comes down to transit not where lines are drawn on a map.
        seanmcdirmid 7y ago
        As long as we are comparing apples to apples. Actually Chongqing is worse since you can’t really commute daily from the hinterland into the city (same with Beijing and even Shanghai). Japan is quite unique with commuter oriented HSR (eg tokaido line for Tokyo, though it would be a horrible expensive life to commute daily from Yokohama).
  - kradroy 7y ago
    Well, that does happen implicitly, except the full statement is "Sorry, we are full to our limit of low income residents." They eventually get replaced by richer residents.
  - dodobirdlord 7y ago
    Cities in the United States have no mechanism to prevent nonresidents from moving in. If nonresidents want to move in and capacity is not expanding it will drive up prices and result in economic pressures on the poorest residents until they vacate enough space to reach an equilibrium. A city can control how many people get to live there, or it can work to ensure that all current residents can continue to live there, but the Takings Clause of the Constitution essentially prevents doing both. Saying "sorry, we are full" (like San Francisco) amounts to telling a large portion of your poorest residents to get out (like San Francisco). People are generally pretty bad at putting two and two together and realizing that their misfortune is the result of poor capacity planning by their city government, but they still tend to get angry and angry people tend to vote out whoever is currently running their city, so pissing off a large swath of residents is rarely a good strategy.
    - User23 7y ago
      Cities may not be able to control nonresidents moving in directly, but their taxing authority is more than sufficient to strongly discourage it. A municipality could massively raise property taxes and grandfather in current city residents for example. It could then use the new revenues to ensure the current residents can continue to live there.
      - ericd 7y ago
        Yep, prop 13 and insane property prices serve that function in the SF Bay Area. If you buy now, you pay $2M upfront and ~$20k/yr property tax for a small ranch house, while your neighbor who has lived in a similar house for 40 years pays <$2k/yr, less on an inflation adjusted basis than when they moved in, thanks to prop 13. The cherry on top is that after paying a small fortune for your house, your municipal (and school) budgets are stretched thin, despite some of the highest land values in the country, because so few of the long time residents are paying anywhere near the nominal 1.x% rate. And then the long time residents loudly complain that infrastructure is buckling, and we can't afford to improve it, so we can't expand housing. It's maddening.
        7y ago
- Retric 7y ago
  The need for massive investments in public transportation is a little more than just a regularly problem. The real solution is allowing but taxing new development and using that money to wisely pay for new infrastructure. This rarely happens because developers want to pocket that difference, nimby wants zero development, and everyone wants to spend that money on their own ‘critical’ projects.
- mrep 7y ago
  > High housing costs are always, without fail, a regulatory problem. True, I would have built a 10,000 square foot single famly home with a massive yard in manhattan facing central park but those damn regulations are making it too expensive /s
- ChrisLomont 7y ago
  >High housing costs are always, without fail, a regulatory problem. It's not possible that desirable places may have more demand than physical space?

manfredo 7y ago

The two are interconnected. There's less willingness to reduce communities' ability to block housing construction and approve of higher density limits because a large segment of renters have price-controlled housing.

80mph 7y ago
I really enjoy reading your pro-housing arguments. I'm stuck in a debate with a NIMBYist on Nextdoor, and would appreciate your perspective. Do you have an email address I can contact you at? This is in the South bay.

rmrfrmrf 7y ago

San Francisco has 100,000 vacant homes and 10,000 homeless people. [1] https://sf.curbed.com/2019/3/21/18276227/vacancy-rate-san-jose-san-francisco-lendingtree https://sf.curbed.com/2019/3/21/18276227/vacancy-rate-san-jo... [2] https://abc7news.com/society/homeless-population-history-in-bay-area/5260657/ https://abc7news.com/society/homeless-population-history-in-...

wonnage 7y ago
Did you even read your source? 100k includes Oakland and Hayward. also, did you seriously think that the problem with homelessness is that they didn't have a house to stay in?
- newshorts 7y ago
  We should always be respectful to one another.
- deleted 7y ago
  [deleted]
epistasis 7y ago
Though you messed up the basic numbers, I think that the larger point needs addressing. Why are these homes vacant? Should people be allowed to take a month of vacation without losing their home? Is it ok for an apartment or house to be empty for a few months in between residents? One month in between tenants every two years is more than a 4% vacancy rate. What should the vacancy rate be? And what if in addition to housing the homeless we also want to house workers with unreasonable commutes? Every single person I know who has raise this X vacant homes and <X homeless has not bothered to ask these very basic questions. We need more homes. 25% more than we currently have, in the high demand areas. We don't need hem in Detroit or Stockton, we need them next to jobs. And we need to stop the profiteering home owners who speculate on the value of their homes by blocking others from living close to them.
- fragmede 7y ago
  Obviously there will be some time between renters where units will sit vacant, but that's not the issue. Units are vacant because landlords don't want to rent them out for various reasons. Totally different situation! So, during this housing crunch units sit vacant and very little supply is being added. Sure, owning property means they're allowed to do whatever they want with it (within reason), but we're also free to complaint about the situation. As to why landlords leave units empty; rent control. Rent control and strong renters protections, combined with dramatically increasing market rate, means landlords will get more money if they keep a unit empty for a year.

human20190310 7y ago

You're assuming that things can get worse for renters. The housing market in California is already non-functional because supply is not allowed to meet demand, which puts renters at a tremendous disadvantage. Efforts to relax restrictions on new housing construction have failed. Adding restrictions until the market breaks in ways that everyone hates might be the only way to get any momentum toward fixing things.

em3rgent0rdr 7y ago

Both nimbyism and rent-control are problems.

irq11 7y ago
Rent control in SF is not really a problem: https://www.cato.org/publications/research-briefs-economic-policy/effects-rent-control-expansion-tenants-landlords https://www.cato.org/publications/research-briefs-economic-p... Pretty much the only study I’m aware of that took the issue head-on, from the Cato institute. They found that rent control greatly benefits recipients, that rents increase diffusely citywide (about 5%), and that the overall positive and negative impacts were roughly equally balanced (~$3Bn over 17 years). The net is slightly positive, in fact. In other words, rent control pretty much does what’s printed on the tin: helps certain renters a lot, hurts others a tiny amount, averages out to zero net impact. Here’s the TL;DR: ”On net, incumbent San Francisco residents appear to come out ahead, but this is at the great expense of welfare losses from future inhabitants.” You can certainly debate the desirability of that outcome, but it’s exactly as advertised.
- irq11 7y ago
  It is absolutely pathetic that HN’s mods continue to allow politically biased censorship of factual comments using downvotes. Mods, if you can’t control the ideologues, it’s time to get rid of graying of downvoted comments. People are just using it to censor speech.
- nugget 7y ago
  The practical result of rent control is the further enrichment of real estate developers and investors. It appears to be a populist focused measure and therefore wins support from certain political factions. Meanwhile it removes supply from the market and in a market where demand far exceeds supply - like the Bay Area - it drives up prices for new development. It's one of the more intriguing political coalitions out there. As housing prices increase, salaries have to increase in order to attract and retain talent. In the Bay Area, this represents a transfer of wealth from tech investors to real estate investors and developers. The generous valuations granted to tech companies by the private and public equity markets make this possible, for now.

m463 7y ago

I thought the California rent control: - didn't control much more than egregious rent increases - didn't apply to new housing - expired after a time

cortesoft 7y ago
There is no 'California rent control' Each city has its own law. Edit: whoops... I had meant the currently active laws, not the new statewide law. Now I realize the comment was about the new law.
- gruez 7y ago
  what? https://www.nytimes.com/2019/09/11/business/economy/california-rent-control.html https://www.nytimes.com/2019/09/11/business/economy/californ...
  - cortesoft 7y ago
    Oh, I thought they meant the currently active laws. My bad.
jedberg 7y ago
>didn't control much more than egregious rent increases This is accurate, this year the increase limit is 7%, which is pretty much unheard of except in the most egregious cases. > didn't apply to new housing > expired after a time The expiration is on the waiver for new buildings. Rent control won't apply to buildings that opened within the past 15 years, and it won't apply to single-family homes, unless they’re owned by a corporation, or duplexes where the owner lives in one of the units.
- m463 7y ago
  I might not understand the "expired" part. I understood that it meant the controls would only be in effect until 2030.

tootie 7y ago

Supply and demand. It's just that simple.

cowpig 7y ago

This is totally unrelated to the article, but are you by any chance the DanTheMan of Wilt Chamberlain Archive fame?