6 ms·

I used to be YIMBY, but I doubt more construction would lead to lower costs of living. When I researched this I couldn't find any strong evidence suggesting th

I used to be YIMBY, but I doubt more construction would lead to lower costs of living. When I researched this I couldn't find any strong evidence suggesting that more building would lead to more affordable housing. You would think that more construction would lead to more affordable housing, but it seems like more construction doesn't just increase supply, it also increases demand, which can offset any price effects from the increase in supply. This makes sense when you think that similar people want to live in proximity to people like themselves. So if there are more luxury condos in an area that's going to create demand for more high-end retail, which will enhance that neighborhood's appeals to wealthier customers which will then increase demand for more luxury residences. Vienna and Singapore seems to be cities that have overcome this trend. So I used to be an enthusiastic YIMBY, but there just doesn't appear to be any concrete evidence that more construction is going to lead to more affordable housing. Having said that, I do believe we should promote more construction, I just don't think it's going to reduce the cost of living to a sustainable level.

nrp 7y ago
The YIMBY argument mentioned in the article is that expensive new housing today becomes mid-range and eventually lower-end housing over decades as it ages. If you don’t put units into the front of that pipeline now, nothing comes out of the other end of it later. This seems plausible to me, and there is research stating the filtering effects may happen a lot faster than that on a regional level: https://www.citylab.com/perspective/2019/06/housing-supply-debate-affordable-home-prices-rent-yimby/591061/ https://www.citylab.com/perspective/2019/06/housing-supply-d...
- moultano 7y ago
  More than that, "expensive" new housing is typically half the price of the single family homes next to it. It's just marketed as "luxury" because everything is. Typically the people protesting "luxury" housing already live in housing that's more expensive than what is getting built. The role of new construction in affordability is more direct. The people who live in the shiny new places will just bid up the price of the next best thing if it isn't available, and this ripples down until the people at the bottom are priced out. So by building it, you're preventing other things from being bid up.
davidw 7y ago
Desirable places are never going to be the absolute cheapest option, for sure, but they could be a lot cheaper. Here are some concrete (ha ha) examples: https://www.sfchronicle.com/opinion/openforum/article/How-the-French-are-fixing-a-housing-crisis-14931728.php https://www.sfchronicle.com/opinion/openforum/article/How-th... https://www.vox.com/2016/8/8/12390048/san-francisco-housing-costs-tokyo https://www.vox.com/2016/8/8/12390048/san-francisco-housing-... https://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-affordable-housing/ https://www.sightline.org/2017/09/21/yes-you-can-build-your-...
buss 7y ago
There's absolutely zero evidence of "induced demand" for housing. And all available evidence suggests that 1: SF & CA have huge shortages of homes and 2: Building more is a good solution. Please see this non-exhaustive list of things which all show building more housing leads to housing affordability. * http://cityobservatory.org/another-housing-myth-debunked-neighborhood-price-effects-of-new-apartments/ http://cityobservatory.org/another-housing-myth-debunked-nei... * https://www.bizjournals.com/sanfrancisco/news/2019/12/02/how-oakland-has-become-a-renters-market.html https://www.bizjournals.com/sanfrancisco/news/2019/12/02/how... * https://jamesjgleeson.wordpress.com/2018/02/19/how-tokyo-built-its-way-to-abundant-housing/ https://jamesjgleeson.wordpress.com/2018/02/19/how-tokyo-bui... * https://www.sfchronicle.com/opinion/openforum/article/How-the-French-are-fixing-a-housing-crisis-14931728.php https://www.sfchronicle.com/opinion/openforum/article/How-th... * https://medium.com/land-buildings-identity-and-values/what-is-the-secret-to-tokyos-affordable-housing-266283531012 https://medium.com/land-buildings-identity-and-values/what-i... * https://fee.org/articles/why-isnt-rent-in-tokyo-out-of-control/ https://fee.org/articles/why-isnt-rent-in-tokyo-out-of-contr... * https://www.upjohn.org/research-highlights/new-construction-makes-homes-more-affordable-even-those-who-cant-afford-new-units https://www.upjohn.org/research-highlights/new-construction-... * https://www.theglobeandmail.com/canada/british-columbia/article-vancouver-study-indicates-low-income-residents-are-not-pushed-from/ https://www.theglobeandmail.com/canada/british-columbia/arti... * https://medium.com/@eddiesun/no-vacancy-the-housing-crisis-laid-bare-39dd04b5b43 https://medium.com/@eddiesun/no-vacancy-the-housing-crisis-l... * https://twitter.com/noahpinion/status/1165339989774749696?s=21 https://twitter.com/noahpinion/status/1165339989774749696?s=...
- ScottBurson 7y ago
  While I vigorously support more construction in the SF metro area, I think expectations need to be set correctly as to the amount of construction required to actually bring prices down, instead of just slowing their rate of increase. It's a lot. I don't recall all the numbers, but I believe I saw something suggesting that we need to increase the rate of housing starts by a factor of 4 just to stabilize prices. To actually bring them down would require even more than that. Again, we should absolutely do it, in my opinion, but if we were to only double construction — difficult as that will already be, politically — and prices didn't plateau, people might conclude that it doesn't work. We need to make sure they know what it's going to take. It's not so much induced demand as it is pent-up demand. Lots more people would already love to live here — indeed, many have moved away solely because of housing costs.
woodandsteel 7y ago
Huh? You mean the present sky-high housing prices in San Francisco, Los Angeles, New York and other cities is not due to a shortage of units?
barry-cotter 7y ago
> When I researched this I couldn't find any strong evidence suggesting that more building would lead to more affordable housing. Tokyo's population has grown 1.5X over the last two decades while rents and property prices have been essentially flat.
imtringued 7y ago
>You would think that more construction would lead to more affordable housing, but it seems like more construction doesn't just increase supply, it also increases demand, which can offset any price effects from the increase in supply. No shit sherlock. Do you even know where that additional drmand is coming from? It's coming from people in their 20s or even 30s who are forced to live with their parents. It is coming from all those migrants that live together with two other room mates. The pent up demand is so large after decades of stagnation that it will take at least 25 years of building to get where they should be today. Remember every single constructed unit allows another person to live there. The market rent shouldn't even enter the equation as a policy goal.
- ericmay 7y ago
  I’m not sure you really need to have an aggressive attitude when replying to someone. It’s rude. The problem with SF is that even if you caught up to this 25 years of pent-up demand, you still have more demand from all over the world to move to the Bay Area. It’s an induced demand problem. Most other cities don’t have this, except in maybe a few areas in those cities.

nrp 7y ago

The YIMBY argument mentioned in the article is that expensive new housing today becomes mid-range and eventually lower-end housing over decades as it ages. If you don’t put units into the front of that pipeline now, nothing comes out of the other end of it later. This seems plausible to me, and there is research stating the filtering effects may happen a lot faster than that on a regional level: https://www.citylab.com/perspective/2019/06/housing-supply-debate-affordable-home-prices-rent-yimby/591061/ https://www.citylab.com/perspective/2019/06/housing-supply-d...

moultano 7y ago
More than that, "expensive" new housing is typically half the price of the single family homes next to it. It's just marketed as "luxury" because everything is. Typically the people protesting "luxury" housing already live in housing that's more expensive than what is getting built. The role of new construction in affordability is more direct. The people who live in the shiny new places will just bid up the price of the next best thing if it isn't available, and this ripples down until the people at the bottom are priced out. So by building it, you're preventing other things from being bid up.

davidw 7y ago

Desirable places are never going to be the absolute cheapest option, for sure, but they could be a lot cheaper. Here are some concrete (ha ha) examples: https://www.sfchronicle.com/opinion/openforum/article/How-the-French-are-fixing-a-housing-crisis-14931728.php https://www.sfchronicle.com/opinion/openforum/article/How-th... https://www.vox.com/2016/8/8/12390048/san-francisco-housing-costs-tokyo https://www.vox.com/2016/8/8/12390048/san-francisco-housing-... https://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-affordable-housing/ https://www.sightline.org/2017/09/21/yes-you-can-build-your-...

buss 7y ago

There's absolutely zero evidence of "induced demand" for housing. And all available evidence suggests that 1: SF & CA have huge shortages of homes and 2: Building more is a good solution. Please see this non-exhaustive list of things which all show building more housing leads to housing affordability. * http://cityobservatory.org/another-housing-myth-debunked-neighborhood-price-effects-of-new-apartments/ http://cityobservatory.org/another-housing-myth-debunked-nei... * https://www.bizjournals.com/sanfrancisco/news/2019/12/02/how-oakland-has-become-a-renters-market.html https://www.bizjournals.com/sanfrancisco/news/2019/12/02/how... * https://jamesjgleeson.wordpress.com/2018/02/19/how-tokyo-built-its-way-to-abundant-housing/ https://jamesjgleeson.wordpress.com/2018/02/19/how-tokyo-bui... * https://www.sfchronicle.com/opinion/openforum/article/How-the-French-are-fixing-a-housing-crisis-14931728.php https://www.sfchronicle.com/opinion/openforum/article/How-th... * https://medium.com/land-buildings-identity-and-values/what-is-the-secret-to-tokyos-affordable-housing-266283531012 https://medium.com/land-buildings-identity-and-values/what-i... * https://fee.org/articles/why-isnt-rent-in-tokyo-out-of-control/ https://fee.org/articles/why-isnt-rent-in-tokyo-out-of-contr... * https://www.upjohn.org/research-highlights/new-construction-makes-homes-more-affordable-even-those-who-cant-afford-new-units https://www.upjohn.org/research-highlights/new-construction-... * https://www.theglobeandmail.com/canada/british-columbia/article-vancouver-study-indicates-low-income-residents-are-not-pushed-from/ https://www.theglobeandmail.com/canada/british-columbia/arti... * https://medium.com/@eddiesun/no-vacancy-the-housing-crisis-laid-bare-39dd04b5b43 https://medium.com/@eddiesun/no-vacancy-the-housing-crisis-l... * https://twitter.com/noahpinion/status/1165339989774749696?s=21 https://twitter.com/noahpinion/status/1165339989774749696?s=...

ScottBurson 7y ago
While I vigorously support more construction in the SF metro area, I think expectations need to be set correctly as to the amount of construction required to actually bring prices down, instead of just slowing their rate of increase. It's a lot. I don't recall all the numbers, but I believe I saw something suggesting that we need to increase the rate of housing starts by a factor of 4 just to stabilize prices. To actually bring them down would require even more than that. Again, we should absolutely do it, in my opinion, but if we were to only double construction — difficult as that will already be, politically — and prices didn't plateau, people might conclude that it doesn't work. We need to make sure they know what it's going to take. It's not so much induced demand as it is pent-up demand. Lots more people would already love to live here — indeed, many have moved away solely because of housing costs.

woodandsteel 7y ago

Huh? You mean the present sky-high housing prices in San Francisco, Los Angeles, New York and other cities is not due to a shortage of units?

barry-cotter 7y ago

> When I researched this I couldn't find any strong evidence suggesting that more building would lead to more affordable housing. Tokyo's population has grown 1.5X over the last two decades while rents and property prices have been essentially flat.

imtringued 7y ago

>You would think that more construction would lead to more affordable housing, but it seems like more construction doesn't just increase supply, it also increases demand, which can offset any price effects from the increase in supply. No shit sherlock. Do you even know where that additional drmand is coming from? It's coming from people in their 20s or even 30s who are forced to live with their parents. It is coming from all those migrants that live together with two other room mates. The pent up demand is so large after decades of stagnation that it will take at least 25 years of building to get where they should be today. Remember every single constructed unit allows another person to live there. The market rent shouldn't even enter the equation as a policy goal.

ericmay 7y ago
I’m not sure you really need to have an aggressive attitude when replying to someone. It’s rude. The problem with SF is that even if you caught up to this 25 years of pent-up demand, you still have more demand from all over the world to move to the Bay Area. It’s an induced demand problem. Most other cities don’t have this, except in maybe a few areas in those cities.