5 ms·

It doesn't help when there are insane regulations like dedicating double digit percentage of new units to be "affordable"/subsidized/section 8. Anyone with a f

It doesn't help when there are insane regulations like dedicating double digit percentage of new units to be "affordable"/subsidized/section 8. Anyone with a full time minimum wage job would not qualify for "affordable" housing, you literally have to not work at all, it's such a scam.

zionic 7y ago
The entire idea is preposterous. The solution to affordable housing is oversupply of housing. Gov should incentivize new construction to reduce prices and let the market fix it.
- kelnos 7y ago
  The problem is that in most areas the government is primarily voted in by existing landowners, who don't want more housing, and don't care if lower-income renters are being forced out. The non-landowners are either not abundant enough, or only plan to live here for a short enough period of time that they don't bother to get involved in local politics.
  - vineyardmike 7y ago
    While this is the whole "NIMBY" thing... is that really a problem? No one complains that Americans can't vote in Britains elections, to set their laws. The whole point of voting is that the people who actively live there get to decide what happens to their city.
    - micmil 7y ago
      Yes, that's a problem. Nobody that bought a home on the vague notion that they HAVE to make money off of it when they sell it will ever vote to have a homeless shelter built across the road.
    - kelnos 7y ago
      I think the cause and effect is intertwined. Many of the people who now plan to only stay for a few years have that attitude because they feel disenfranchised and locked out of the planning process, while at the same time being priced out of the ability to put down roots.
- tmh79 7y ago
  Strong disagree, the solution to affordable housing includes a very large amount of private/free market housing, but the free market won't really address the needs of people below 30% of the median income. Additionally, good affordable housing is one of the best anti poverty tools that we have. IMO the long term solution is robust private market housing construction for the middle class, and a robust public housing construction system for those who truly need it.
  - formerchamp 7y ago
    Public housing is a complete failure and the epicenter of violence in every city. Name a current project in ANY big city you'd raise your family in?
    - zokula 7y ago
      Gemeindebau in Vienna Austria.
  - barry-cotter 7y ago
    > the free market won't really address the needs of people below 30% of the median income. It will if it’s not illegal to build. SROs are illegal. Boarding houses are illegal. Houses below a certain minimum are are illegal. https://www.economist.com/special-report/2020/01/16/what-is-the-future-of-the-rich-worlds-housing-markets https://www.economist.com/special-report/2020/01/16/what-is-... > From 2013 to 2017, Tokyo built many houses as the whole of England. > House prices in Tokyo are now 9% lower than they were in 2000, while in London they are 144% higher, adjusted for inflation.
    - micmil 7y ago
      Anyone using Japan as an example of housing prices does not understand Japanese housing. Zoning in Japan is done at a national level, not local. Once an area is designated for housing, housing goes there. Because of this there is a constant flow of new housing, which drives the price of old houses down. This is not possible anywhere zoning is done at a local level. Anytime one person has the ability to stop another from building you immediately create NIMBYdom and where the NIMBY exists, more housing does not because the NIMBY cares about nothing but their own property value. But that also feeds into the insane American idea of housing as an investment rather than a place to keep birds from crapping on you. Until the NIMBY is eliminated, and housing is no longer sold as an investment, housing costs will not go down.
malandrew 7y ago
Don't get me started on this. I helped an friend get into below market rate (BMR) housing in SF. She paid approximately $330k with almost no money down for a 2 bedroom, 2 bath condo in the center of Hayes Valley. Today, equivalent market rate units in her building sell for $1.5k to $2m. Basically, there is a supply of homes that are available to you at three points: 70%, 90% and 110% of the median income. How these three points are chosen I don't know. Very few are at 110% of median income. Most are available to those that make 70% or 90% of the median income. The reason this is bullshit is because it's estimated that you need to earn about 400% of the median income to be able to afford a market-rate home in SF. This pretty much leaves everyone between 110% and 400% of the median income without any real options. Worse yet, by making a policy that covers the just above the center of the income distribution to the bottom, you basically disincentivize those voters from becoming active and involved in supporting solutions that help the entire distribution. Basically those between 110% and 400% end up a permanent minority unable to achieve support for policies that will help their cohort. Needless to say, I don't live in California anymore, despite earning almost 3x what she earns because I can't really afford to buy into the market. California is fundamentally broken.
- defen 7y ago
  > She paid approximately $330k with almost no money down for a 2 bedroom, 2 bath condo in the center of Hayes Valley. Today, equivalent market rate units in her building sell for $1.5k to $2m. How does that work if/when she wants to sell the place? Is there some sort of cap on what she can sell it for?
  - jefftk 7y ago
    There are several ways to handle this, but a common one is to have a deed restriction that sets a maximum resale price and requires the buyer to meet income eligibility criteria. I wrote some about this, and about how I'm worried that wealthy people could abuse this, in https://www.jefftk.com/p/affordable-housing-workarounds https://www.jefftk.com/p/affordable-housing-workarounds
  - malandrew 7y ago
    She can only sell it for the purchase price adjusted for changes in the median income. If the median income in the city goes up (which it does over time because lower income renters are eventually forced out of the city), then she can sell it for more. It obviously won't increase as fast as market rates, but it will go for more than she purchased it. The house needs to be sold back through the BMR program. It can only be willed if her heir(s) also qualify for the BMR program at the time of death. At the end of the day, she gets the benefit of not having to tie up cash in home equity. While other people are paying $6000 or more a month in a lease, she's paying a little over $2000 a month in a lease and gets to put all the excess she has into more liquid assets like an index fund.
wan23 7y ago
Here in New York, at least, the eligibility for those units is based on the median income in the neighborhood where the building is. In some cases these affordable units end up with requirements that are pretty substantial, e.g. https://www1.nyc.gov/site/hpd/services-and-information/housing-connect-details.page?project=303%20Sumpter%20Street%20Apartments&acquireType= https://www1.nyc.gov/site/hpd/services-and-information/housi...

zionic 7y ago

The entire idea is preposterous. The solution to affordable housing is oversupply of housing. Gov should incentivize new construction to reduce prices and let the market fix it.

kelnos 7y ago
The problem is that in most areas the government is primarily voted in by existing landowners, who don't want more housing, and don't care if lower-income renters are being forced out. The non-landowners are either not abundant enough, or only plan to live here for a short enough period of time that they don't bother to get involved in local politics.
- vineyardmike 7y ago
  While this is the whole "NIMBY" thing... is that really a problem? No one complains that Americans can't vote in Britains elections, to set their laws. The whole point of voting is that the people who actively live there get to decide what happens to their city.
  - micmil 7y ago
    Yes, that's a problem. Nobody that bought a home on the vague notion that they HAVE to make money off of it when they sell it will ever vote to have a homeless shelter built across the road.
  - kelnos 7y ago
    I think the cause and effect is intertwined. Many of the people who now plan to only stay for a few years have that attitude because they feel disenfranchised and locked out of the planning process, while at the same time being priced out of the ability to put down roots.
tmh79 7y ago
Strong disagree, the solution to affordable housing includes a very large amount of private/free market housing, but the free market won't really address the needs of people below 30% of the median income. Additionally, good affordable housing is one of the best anti poverty tools that we have. IMO the long term solution is robust private market housing construction for the middle class, and a robust public housing construction system for those who truly need it.
- formerchamp 7y ago
  Public housing is a complete failure and the epicenter of violence in every city. Name a current project in ANY big city you'd raise your family in?
  - zokula 7y ago
    Gemeindebau in Vienna Austria.
- barry-cotter 7y ago
  > the free market won't really address the needs of people below 30% of the median income. It will if it’s not illegal to build. SROs are illegal. Boarding houses are illegal. Houses below a certain minimum are are illegal. https://www.economist.com/special-report/2020/01/16/what-is-the-future-of-the-rich-worlds-housing-markets https://www.economist.com/special-report/2020/01/16/what-is-... > From 2013 to 2017, Tokyo built many houses as the whole of England. > House prices in Tokyo are now 9% lower than they were in 2000, while in London they are 144% higher, adjusted for inflation.
  - micmil 7y ago
    Anyone using Japan as an example of housing prices does not understand Japanese housing. Zoning in Japan is done at a national level, not local. Once an area is designated for housing, housing goes there. Because of this there is a constant flow of new housing, which drives the price of old houses down. This is not possible anywhere zoning is done at a local level. Anytime one person has the ability to stop another from building you immediately create NIMBYdom and where the NIMBY exists, more housing does not because the NIMBY cares about nothing but their own property value. But that also feeds into the insane American idea of housing as an investment rather than a place to keep birds from crapping on you. Until the NIMBY is eliminated, and housing is no longer sold as an investment, housing costs will not go down.

malandrew 7y ago

Don't get me started on this. I helped an friend get into below market rate (BMR) housing in SF. She paid approximately $330k with almost no money down for a 2 bedroom, 2 bath condo in the center of Hayes Valley. Today, equivalent market rate units in her building sell for $1.5k to $2m. Basically, there is a supply of homes that are available to you at three points: 70%, 90% and 110% of the median income. How these three points are chosen I don't know. Very few are at 110% of median income. Most are available to those that make 70% or 90% of the median income. The reason this is bullshit is because it's estimated that you need to earn about 400% of the median income to be able to afford a market-rate home in SF. This pretty much leaves everyone between 110% and 400% of the median income without any real options. Worse yet, by making a policy that covers the just above the center of the income distribution to the bottom, you basically disincentivize those voters from becoming active and involved in supporting solutions that help the entire distribution. Basically those between 110% and 400% end up a permanent minority unable to achieve support for policies that will help their cohort. Needless to say, I don't live in California anymore, despite earning almost 3x what she earns because I can't really afford to buy into the market. California is fundamentally broken.

defen 7y ago
> She paid approximately $330k with almost no money down for a 2 bedroom, 2 bath condo in the center of Hayes Valley. Today, equivalent market rate units in her building sell for $1.5k to $2m. How does that work if/when she wants to sell the place? Is there some sort of cap on what she can sell it for?
- jefftk 7y ago
  There are several ways to handle this, but a common one is to have a deed restriction that sets a maximum resale price and requires the buyer to meet income eligibility criteria. I wrote some about this, and about how I'm worried that wealthy people could abuse this, in https://www.jefftk.com/p/affordable-housing-workarounds https://www.jefftk.com/p/affordable-housing-workarounds
- malandrew 7y ago
  She can only sell it for the purchase price adjusted for changes in the median income. If the median income in the city goes up (which it does over time because lower income renters are eventually forced out of the city), then she can sell it for more. It obviously won't increase as fast as market rates, but it will go for more than she purchased it. The house needs to be sold back through the BMR program. It can only be willed if her heir(s) also qualify for the BMR program at the time of death. At the end of the day, she gets the benefit of not having to tie up cash in home equity. While other people are paying $6000 or more a month in a lease, she's paying a little over $2000 a month in a lease and gets to put all the excess she has into more liquid assets like an index fund.

wan23 7y ago

Here in New York, at least, the eligibility for those units is based on the median income in the neighborhood where the building is. In some cases these affordable units end up with requirements that are pretty substantial, e.g. https://www1.nyc.gov/site/hpd/services-and-information/housing-connect-details.page?project=303%20Sumpter%20Street%20Apartments&acquireType= https://www1.nyc.gov/site/hpd/services-and-information/housi...