4 ms·

> And the gain wouldn't exist with stricter zoning because it comes from the fact that your property is worth more when somebody can buy it and build twice as m

by mertd 6y ago

> And the gain wouldn't exist with stricter zoning because it comes from the fact that your property is worth more when somebody can buy it and build twice as much housing on it. Counterpoint Bay Area. Industry hotspot, liberally allows office development, aggressively fights any new residential develpment and also freezes property taxes at the time of purchase.

AnthonyMouse 6y ago
Three of those are just other ways of increasing real estate prices. They're additive, not alternative. Now suppose somebody could knock down your million dollar three bedroom home there, put up five condos that size on the same lot and sell them each for $750K. That'd make the property itself worth more than a million dollars, right?
- feteru 6y ago
  Isn't that the residential development they're talking about that is prohibited/restricted?
- mertd 6y ago
  Your general point is true. I'm pointing out an alternative where zoning stays predominantly single family yet the real estate prices grow unbounded.
- asdff 6y ago
  Prices are high because there is demand. Zoning keeps supply scarce. The reason why you can sell these condos for 750k is because of demand and scarcity. If everyone turned their million dollar home into condos, supply would increase, demand would be met, prices would fall, and suddenly you wouldn't have a million dollar home or 5 750k condos. On top of that in CA, if you were to hold your million dollar home, your property taxes are locked in even while the asset value increases exponentially. You can even give your house to your kid, and they will pay the tax rate you paid. If you tear out your house and build 5 new condos, suddenly you are paying market rate property tax again.
  - AnthonyMouse 6y ago
    > Prices are high because there is demand. Zoning keeps supply scarce. Which is why the price falls from a million dollars to $750k for the same amount of square footage. But now you have five times as much square footage on the same piece of land, which is more than the decrease in price per square foot. And still would be even if the price per unit fell to $400k. > On top of that in CA, if you were to hold your million dollar home, your property taxes are locked in even while the asset value increases exponentially. Which is just a facet of existing local tax law. You could get to the same place by just having very low property taxes in general.
  - rumanator 6y ago
    > Zoning keeps supply scarce. Not really. Zoning specifies density limits but demand depends of far more factors. If you replace a mansion with a low density housing project, the reason the price will go down is not due to an increase in supply.

by mertd 6y ago

AnthonyMouse 6y ago

Three of those are just other ways of increasing real estate prices. They're additive, not alternative. Now suppose somebody could knock down your million dollar three bedroom home there, put up five condos that size on the same lot and sell them each for $750K. That'd make the property itself worth more than a million dollars, right?

feteru 6y ago
Isn't that the residential development they're talking about that is prohibited/restricted?
mertd 6y ago
Your general point is true. I'm pointing out an alternative where zoning stays predominantly single family yet the real estate prices grow unbounded.
asdff 6y ago
Prices are high because there is demand. Zoning keeps supply scarce. The reason why you can sell these condos for 750k is because of demand and scarcity. If everyone turned their million dollar home into condos, supply would increase, demand would be met, prices would fall, and suddenly you wouldn't have a million dollar home or 5 750k condos. On top of that in CA, if you were to hold your million dollar home, your property taxes are locked in even while the asset value increases exponentially. You can even give your house to your kid, and they will pay the tax rate you paid. If you tear out your house and build 5 new condos, suddenly you are paying market rate property tax again.
- AnthonyMouse 6y ago
  > Prices are high because there is demand. Zoning keeps supply scarce. Which is why the price falls from a million dollars to $750k for the same amount of square footage. But now you have five times as much square footage on the same piece of land, which is more than the decrease in price per square foot. And still would be even if the price per unit fell to $400k. > On top of that in CA, if you were to hold your million dollar home, your property taxes are locked in even while the asset value increases exponentially. Which is just a facet of existing local tax law. You could get to the same place by just having very low property taxes in general.
- rumanator 6y ago
  > Zoning keeps supply scarce. Not really. Zoning specifies density limits but demand depends of far more factors. If you replace a mansion with a low density housing project, the reason the price will go down is not due to an increase in supply.