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The challenge you have is that people view housing as an investment. Americans expect their home values to keep pace with inflation. And because housing values

• lisper 6y ago
  You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding environment as well. People's desire to keep the environment from changing too much extends beyond financial interests. I live in a quiet suburban neighborhood, and I want it to remain a quiet suburban neighborhood even if the value of my house drops. In fact, I would love to see the value of my house drop, along with the value of all the houses around me, because that would make it easier for me to move locally and improve some of the sub-optimal features of my current situation, not least of which is that my house is much too big for my needs. But I can't move to a smaller house because the tax hit I would take makes it cost more than I can justify. The smaller houses around me now cost more than our house did when we bought it, so if we move we take both a one-time capital gains hit and an ongoing property tax hit. None of that would happen if houses depreciated like cars. UPDATE: Please take note that I am not saying I have any kind of right to keep my neighborhood from changing, only that my desire to keep it from changing is not purely financial. (In fact, in my case, it is the exact opposite!)
  • sokoloff 6y ago
    If your gains are less than $250K (single) or $500K (married-filing-jointly), you've owned it for 2 years, and you've lived there 2 of the last 5 years, your gains are excluded federally. In general, the structure does depreciate very slowly (in real dollars) and the land appreciates in value (at least in desirable areas), typically more than swamping the slight depreciation on the structure.
    • lisper 6y ago
      We live in Northern California. We bought this house at the bottom of the 2008 crash. Our gains are considerably more than the exclusion limit. (One of the many stupid things about the tax code is that the exclusion limit is not indexed to time.)
  • cltby 6y ago
    The structure itself does depreciate (ask any landlord!). It's the land value that's surging.
    • lisper 6y ago
      Sure, but the structure and the land are tightly bound. I can't buy or sell a structure without also buying or selling the land that it sits on, so this is kind of irrelevant.
      • shuckles 6y ago
        One of the advantages of non-single family zoning is exactly that it allows us to decouple the two.
      • c22 6y ago
        You absolutely can, but moving structures can get pretty expensive.
    • throwaway0a5e 6y ago
      Commercial structures often appreciate as an area gentrifies and starts using legislation to kick out industrial activity in favor of coffee shops and other consumer facing stuff. So the facilities (and permission to operate them) appreciate like there's no tomorrow.
  • shuckles 6y ago
    Unfortunately (for you), your desire for a quiet suburban neighborhood should not give you the ability to immiserate other people who want to live there by prohibiting the construction of homes for them. Do you value your quiet suburban neighborhood enough to buy and pay property taxes on the whole block or subdivision? If not, I recommend you look for estates on acreage in remote areas.
    • majormajor 6y ago
      You could reframe the opposition as "your money shouldn't mean you can just come into our area and remake it however you want." Neither side is purely unsympathetic here.
      • shuckles 6y ago
        Was one’s single family home a naturally occurring building? What gave one the right to build it? Your both sides argument sounds plausible but it’s not-sensical.
        • majormajor 6y ago
          That's sorta just how private property works. At some point, land was unowned, structures were unbuilt, etc. Ever since then, we've put the "rights" in the hands of the current owners and/or the government they live under... Short of arguing from a purely socialist or communist approach, saying the current owner's preferences matter less than the hypothetical would-be future occupants of the area is the non-sensical part, I think.
          • shuckles 6y ago
            And who was compensated when those rights were taken away from property owners by the invention of zoning in the early 1900s and down zoning in the mid 1900s? In addition, you are confusing owning a particular plot of land with rights over all neighboring plots. The latter is distinctly not your private property.
  • imtringued 6y ago
    >You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding environment as well. The expectation that one can settle down and expect their city to be built to a finished state which is kept frozen in time is an incredibly damaging mindset. City planners have to predict what is going to happen in the future decades ahead. People didn't do this 100 years ago. They didn't do this thousands of years ago. They did something far simpler. They built their city and then they rebuilt their city, house by house, incrementally, one step at a time over decades to match changing needs. Here's a talk by Charles Marohn regarding this topic: https://youtu.be/Em7nqDqQ8oM https://youtu.be/Em7nqDqQ8oM
    • majormajor 6y ago
      > City planners have to predict what is going to happen in the future decades ahead. Current trend: single family houses have shot up in demand due to remote work. So is the prescription "tear down single family houses"? Seems like cities that do that are just going to push people even faster towards other areas which aren't so saturated. If this trend continues some sort of balancing between not just SF/NY but even Dallas/Austin and smaller, more rural areas, is inevitable. There just isn't enough land for more single family houses in the most popular cities! But reacting as if consumer preferences for housing type doesn't matter seems like a recipe for putting yourself into an even worse position long-term.
      • nomel 6y ago
        Looking at the listings in the Bay Area, condos are more expensive than homes, with the same square footage, since they're new and "luxury". I question if tearing down houses for something high density would make anything cheaper.
        • spiralx 6y ago
          People are moving into the city and buying those luxury condos instead of buying houses in existing neighbourhoods and driving up prices there.
• enraged_camel 6y ago
  >> The challenge you have is that people view housing as an investment. Americans expect their home values to keep pace with inflation. Because real estate appreciation is one of the few ways left for people to be able to retire somewhat comfortably after working in jobs that pay garbage salaries and having to deal with medical costs that are sky high even with what people call “insurance”.
• rhino369 6y ago
  In California, the only reason people can oppose new projects is because the government enables them to have a say in someone else's property. So you don't have to force development, but you do have to remove NIMBY's ability to veto projects. That starts with reforming permitting processes and zoning regulations.
  • shuckles 6y ago
    Single family zoning, though invented in Berkeley, is a national phenomenon.
  • lazide 6y ago
    ‘Having a say in someone else’s property’ is really ‘voters voting for the rules and laws they want’. As long as the rules benefit most people who vote, why would they want to change it? And right now, that is exactly what is happening - it isn’t changing because most people who vote are benefitting from it. It’s a pretty fundamental part of a democracy. Until either 1) more people who don’t benefit from the current rules change the rules through voting, or 2) some non-democratic (in the sense of not directly answerable to an election) institution such as the courts change some rules, or 3) someone manages to convince the voting bloc to vote against their interests and change the rules, it is what is is. All the handwringing about the situation is just hot air.
    • jandrese 6y ago
      Of course the people who want to move in don't get a vote.
      • lazide 6y ago
        The renters do - but they often don’t vote. And realistically, would you want to be subject to the laws passed by someone who doesn’t live in your area? Even if they say they’d like to? It’s bad enough with things like federal marijuana laws vs state ones, and those don’t control where you can live or what gets built next to where you already do.
• majormajor 6y ago
  That's not the big challenge. Upzoning and higher density increases the value of the land. That's why developers want to do it in the first place. Cashing out when someone wants to buy up your neighborhood's land, and getting something nicer somewhere else, would be the purely-financial play. The big challenge is that people chose to live in a certain place because it had certain features. And people don't want to have to move constantly. So folks pushing to change the nature of the areas will always cause opposition ("why do we have to leave or change, why can't they go somewhere else?").
  • mschuster91 6y ago
    > The big challenge is that people chose to live in a certain place because it had certain features In Germany, the most sought-after features are quality mobile ans landline internet, as well as decent public transit. The problem is that our Conservative politicians outright sabotaged (Kohl with fibre vs cable TV, Schröder with the UMTS frequency auction) or, at best, simply sat doing nothing (Merkel) any efforts to improve this situation. The result? Everyone who can flees for the cities, while the rural areas generally only house those "left behind". And then politicians complain about exploding rents in cities or people leaving rural areas... well, d'oh, who would have thought young people and modern jobs require Internet.
  • Supermancho 6y ago
    > higher density increases the value of the land. That's a very short curve that quickly inverts. Density of commercial land is what converts the sprawl to an unprecedented explosion of high-rises in an epicenter. The residential density decreases the value of the land after it's been fully developed, which is then purchased for commercial use and "redeveloped". This happens in most cities at some point, where downtown is converted to the new "hip" redevelopment of the previous slums.
• Supermancho 6y ago
  > For these reason, they're going to oppose any new supply entering the market. Nobody is opposed to new supply entering the market. The opposition is 100% about the devaluation of the area, which is not about the supply per se. If you wanted to build a block up with 500 units which had adequate parking and everyone's homes/land would increase in value 5%, you would have widespread support. The problem of density is solved with substandard buildings that cut corners, alongside the increased density in Southern California.
• jandrese 6y ago
  It's really impossible to not view your house as an investment when you've been paying for it for 30 years and have hundreds of thousands of dollars tied up in it. This goes double if your plan is to work till retirement, then sell the house and move to someplace more laid back. So really the local government needs to be willing to tell people to pound sand when they hold up new construction. But since the local government is made up of those same people that's not going to happen. It is interesting watching movies and TV just how often the "evil developer" trope appears. Always trying to buy the almost-failed gym/ski slope/TV station/etc... until the plucky underdogs win the contest to save their small business. Developers are never the good guys. They're always the evil gentrifiers who want to let hundreds of families invade the quaint little neighborhood with their high rise eyesore.
  • rcpt 6y ago
    God I'd love to watch some movies where the developers win and kick those little NIMBY orphan shits out on their asses.
    • MrMan 6y ago
      Yeah! Anyone who buys a house is a bad person
• jjav 6y ago
  > The challenge you have is that people view housing as an investment. Is there any source to this claim? "View as investment" would mean people buy the house with the specific aim of making a profit. As a middle aged homeowner in suburbia where all my acquaintances are in the same demographic, I can't think of anyone ever saying they bought a house with the goal to make a profit. People buy a house so the kids have a place to play and to stabilize the housing expenses to make budgeting easier. Whether it can be sold for a profit or not in 40 years is not a consideration.