7 ms·

While the article is interesting, there is one dynamic it missed: tech debt. Starting around 1975, housing supply stopped keeping up with the growth of housing

While the article is interesting, there is one dynamic it missed: tech debt. Starting around 1975, housing supply stopped keeping up with the growth of housing demand. It picked back up fifteen years later, around 1990: https://www.brookings.edu/research/the-goldilocks-problem-of-housing-supply-too-little-too-much-or-just-right/ https://www.brookings.edu/research/the-goldilocks-problem-of... (But that is on a national level: in the West, in comparison, housing growth hasn't been sufficient to house the new households formed at any time in the last 70 years and so the problems run deeper.) Normally, cheap housing is housing that was expensive housing 30-100 years ago. Think of all of the post-war apartments in NYC, or the Boston multi-family houses built around the previous turn of the century. Since many cities currently lack the recently-aging housing that would normally be filtering down market right now, the elasticity at the top is affecting housing too new for developers to be out of debt on, and thus we are unlikely to see it translate into lower prices on the low end until another 20-25 years pass and we get out of this housing doldrum. (Not the West, though. Sorry San Francisco: you just have to build more places where people can live.)

legerdemain 6y ago
If cheap housing is expensive housing built 30-100 years ago, we should have had decades and decades of delapidating housing stock left to go before hitting a shortage. Not to mention your example of housing in Boston built at the turn of the 20th century. A laissez faire policy that makes the poor wait 120 years for housing is hardly any policy at all.
- kelp 6y ago
  At least for San Francisco, the seeds of the current shortage started as early as 1912 with the establishment of the planning commission. See this amazing twitter thread with images of historical news paper clippings. https://twitter.com/enf/status/753435745272995840 https://twitter.com/enf/status/753435745272995840 Later on, in 1978, most of the city was down-zoned, and in the EIR (Environmental Impact Report) written at the time, it was clearly predicted that this would result in a supply shortage and increased prices. Unless the city made a point to increase density and development in the industrial parts of the city. That didn't really happy to the scale the EIR said was needed. See: https://twitter.com/enf/status/775185946941591553?s=20 https://twitter.com/enf/status/775185946941591553?s=20 So here we are.
- roguecoder 6y ago
  And many cities did, which is why the trend has been getting slowly worse. I didn't talk about any "laissez faire" policy, and as far as I know no city in the US is pursuing a laissez faire policy. I also don't know why you think it is bad to have housing stock that lasts; having lived in a number of those turn of the century homes, they were better and cheaper than the "affordable" new apartment options. They were well-built luxury homes that are comfortable to live in, but didn't have the modern status symbols the new luxury apartments had. It isn't a universal thing, either; it was specifically because the luxury housing from the time was _nice_. I looked at cheap apartments in 1970s cement bunkers and always went back to living in a beautiful Victorian with vaulted ceilings, even if they were dustier & colder. Affordable housing will always compromise on something, and personally I preferred finding roommates & buying space heaters to living in a shoebox. As someone below noted, these dynamics vary dramatically by local. California, much less San Francisco, is a whole different kettle of fish. But because we stopped building housing for a while, we are at best going to face a period of catch-up, no matter what we do.
  - throwaway0a5e 6y ago
    >I know no city in the US is pursuing a laissez faire policy Well of course. The people who want laissez faire anything don't wind up living in the cities that have these problems. they self select to live in rural areas and the occasional rust belt dump where there is either no regulation or no enforcement. The people who don't recoil at the thought of their property rights being violated wind up living in Boston, SF and their surrounding suburbs and vote for more of the same.
frongpik 6y ago
Insufficient housing creates competition among workers and they do more work for less pay, as nobody wants to be an outsider. The number of building permits is set by city councils and those listen to the capital as the latter can choose where to create jobs.
- totalZero 6y ago
  > the latter can choose where to create jobs Jobs such as "city councilman," for example.
Lammy 6y ago
> Starting around 1975 Guess what happened in October 1974: https://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act https://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act
- bathtub365 6y ago
  Can you explain the significance of this correlation?
  - Lammy 6y ago
    Have you ever seen people talk about how the 13th Amendment to the US Constitution outlaws slavery "except as a punishment for crime whereof the party shall have been duly convicted", leading to the modern prison-industrial complex that overwhelmingly targets black Americans with arrests for petty crimes and traps them in The System? https://sites.lib.jmu.edu/civic/2020/09/17/slaves-of-the-state-13th-amendment-mass-incarceration-and-the-prison-industrial-complex/ https://sites.lib.jmu.edu/civic/2020/09/17/slaves-of-the-sta... The ECOA makes it illegal for lenders to discriminate for home mortgage loans, which would lead to reduced racial segregation (following the Fair Housing Act of 1968), reduced discrimination against unmarried/divorced women, and many other nice things. The exception is that discrimination is still totally legal if the person just can't afford the home. As Atari once told me, Do The Math: https://fred.stlouisfed.org/series/OEHRENWBSHNO https://fred.stlouisfed.org/series/OEHRENWBSHNO Bonus points if we use the fear from the inevitable housing insecurity to make discriminated populations want to segregate themselves: https://books.google.com/ngrams/graph?content=gentrification&year_start=1950&year_end=2000&corpus=17&smoothing=2&direct_url=t1%3B%2Cgentrification%3B%2Cc0 https://books.google.com/ngrams/graph?content=gentrification...
    - marc__1 6y ago
      A book that goes deeper into this conversation is The Color of Money: Black Banks and the Racial Wealth Gap Well worth the read, the story had a lot of nuances https://www.goodreads.com/book/show/34758210 https://www.goodreads.com/book/show/34758210
chrisseaton 6y ago
> Since many cities currently lack the recently-aging housing that would normally be filtering down market right now Huh.... in the UK house prices go up for older houses. You'd pay a premium to get an interwar house, or a 19th century house. Do people not like old houses in the US? They're usually better built, with more character, built on more land, in my experience.
- toomuchtodo 6y ago
  Old houses in the US come with a lot of costs. They're usually poorly insulated, need to be brought up to code when renovations are performed, can have electrical and plumbing systems that need to be replaced in their entirety, and sometimes are just hard to insure in general (insurers can cancel your homeowners policy on any home in Florida over 40 years old at their discretion when your policy comes up for renewal). House has lead and asbestos? Remediation can be costly depending on your jurisdiction's requirements. This is less of a concern in highly desirable areas, as well to do buyers will buy for the land alone, demolish the property, and build new. Disclosure: I renovate homes as a hobby, and occasionally demo those beyond repair. Most recent project was an older duplex in Naperville, IL torn down to replace with a modern three flat.
  - fowkswe 6y ago
    'Old' houses in the US are different than old houses in the UK. Old in the US usually means 1930s/40s/50s and the majority of that housing stock was poorly constructed leading to the problems that @toomuchtodo alluded to. In the few places where we truly have old houses (19th century) - the North East and central parts of some cities - they do, usually, command a premium.
    - kube-system 6y ago
      Usually when I've seen 19th century homes for sale at premium prices, it's because they're of a desirable architecture in old-money neighborhoods and have been well maintained for their entire existence. I think it might be a bit of a survivorship bias.
billfruit 6y ago
You mean the "West coast" when you say West?
WalterBright 6y ago
> Starting around 1975, housing supply stopped keeping up with the growth of housing demand. That correlates with the boomers entering the housing market.
- unishark 6y ago
  Was going to say the same thing. Plus the Vietnam war had just ended.

legerdemain 6y ago

If cheap housing is expensive housing built 30-100 years ago, we should have had decades and decades of delapidating housing stock left to go before hitting a shortage. Not to mention your example of housing in Boston built at the turn of the 20th century. A laissez faire policy that makes the poor wait 120 years for housing is hardly any policy at all.

kelp 6y ago
At least for San Francisco, the seeds of the current shortage started as early as 1912 with the establishment of the planning commission. See this amazing twitter thread with images of historical news paper clippings. https://twitter.com/enf/status/753435745272995840 https://twitter.com/enf/status/753435745272995840 Later on, in 1978, most of the city was down-zoned, and in the EIR (Environmental Impact Report) written at the time, it was clearly predicted that this would result in a supply shortage and increased prices. Unless the city made a point to increase density and development in the industrial parts of the city. That didn't really happy to the scale the EIR said was needed. See: https://twitter.com/enf/status/775185946941591553?s=20 https://twitter.com/enf/status/775185946941591553?s=20 So here we are.
roguecoder 6y ago
And many cities did, which is why the trend has been getting slowly worse. I didn't talk about any "laissez faire" policy, and as far as I know no city in the US is pursuing a laissez faire policy. I also don't know why you think it is bad to have housing stock that lasts; having lived in a number of those turn of the century homes, they were better and cheaper than the "affordable" new apartment options. They were well-built luxury homes that are comfortable to live in, but didn't have the modern status symbols the new luxury apartments had. It isn't a universal thing, either; it was specifically because the luxury housing from the time was _nice_. I looked at cheap apartments in 1970s cement bunkers and always went back to living in a beautiful Victorian with vaulted ceilings, even if they were dustier & colder. Affordable housing will always compromise on something, and personally I preferred finding roommates & buying space heaters to living in a shoebox. As someone below noted, these dynamics vary dramatically by local. California, much less San Francisco, is a whole different kettle of fish. But because we stopped building housing for a while, we are at best going to face a period of catch-up, no matter what we do.
- throwaway0a5e 6y ago
  >I know no city in the US is pursuing a laissez faire policy Well of course. The people who want laissez faire anything don't wind up living in the cities that have these problems. they self select to live in rural areas and the occasional rust belt dump where there is either no regulation or no enforcement. The people who don't recoil at the thought of their property rights being violated wind up living in Boston, SF and their surrounding suburbs and vote for more of the same.

frongpik 6y ago

Insufficient housing creates competition among workers and they do more work for less pay, as nobody wants to be an outsider. The number of building permits is set by city councils and those listen to the capital as the latter can choose where to create jobs.

totalZero 6y ago
> the latter can choose where to create jobs Jobs such as "city councilman," for example.

Lammy 6y ago

> Starting around 1975 Guess what happened in October 1974: https://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act https://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act

bathtub365 6y ago
Can you explain the significance of this correlation?
- Lammy 6y ago
  Have you ever seen people talk about how the 13th Amendment to the US Constitution outlaws slavery "except as a punishment for crime whereof the party shall have been duly convicted", leading to the modern prison-industrial complex that overwhelmingly targets black Americans with arrests for petty crimes and traps them in The System? https://sites.lib.jmu.edu/civic/2020/09/17/slaves-of-the-state-13th-amendment-mass-incarceration-and-the-prison-industrial-complex/ https://sites.lib.jmu.edu/civic/2020/09/17/slaves-of-the-sta... The ECOA makes it illegal for lenders to discriminate for home mortgage loans, which would lead to reduced racial segregation (following the Fair Housing Act of 1968), reduced discrimination against unmarried/divorced women, and many other nice things. The exception is that discrimination is still totally legal if the person just can't afford the home. As Atari once told me, Do The Math: https://fred.stlouisfed.org/series/OEHRENWBSHNO https://fred.stlouisfed.org/series/OEHRENWBSHNO Bonus points if we use the fear from the inevitable housing insecurity to make discriminated populations want to segregate themselves: https://books.google.com/ngrams/graph?content=gentrification&year_start=1950&year_end=2000&corpus=17&smoothing=2&direct_url=t1%3B%2Cgentrification%3B%2Cc0 https://books.google.com/ngrams/graph?content=gentrification...
  - marc__1 6y ago
    A book that goes deeper into this conversation is The Color of Money: Black Banks and the Racial Wealth Gap Well worth the read, the story had a lot of nuances https://www.goodreads.com/book/show/34758210 https://www.goodreads.com/book/show/34758210

chrisseaton 6y ago

> Since many cities currently lack the recently-aging housing that would normally be filtering down market right now Huh.... in the UK house prices go up for older houses. You'd pay a premium to get an interwar house, or a 19th century house. Do people not like old houses in the US? They're usually better built, with more character, built on more land, in my experience.

toomuchtodo 6y ago
Old houses in the US come with a lot of costs. They're usually poorly insulated, need to be brought up to code when renovations are performed, can have electrical and plumbing systems that need to be replaced in their entirety, and sometimes are just hard to insure in general (insurers can cancel your homeowners policy on any home in Florida over 40 years old at their discretion when your policy comes up for renewal). House has lead and asbestos? Remediation can be costly depending on your jurisdiction's requirements. This is less of a concern in highly desirable areas, as well to do buyers will buy for the land alone, demolish the property, and build new. Disclosure: I renovate homes as a hobby, and occasionally demo those beyond repair. Most recent project was an older duplex in Naperville, IL torn down to replace with a modern three flat.
- fowkswe 6y ago
  'Old' houses in the US are different than old houses in the UK. Old in the US usually means 1930s/40s/50s and the majority of that housing stock was poorly constructed leading to the problems that @toomuchtodo alluded to. In the few places where we truly have old houses (19th century) - the North East and central parts of some cities - they do, usually, command a premium.
  - kube-system 6y ago
    Usually when I've seen 19th century homes for sale at premium prices, it's because they're of a desirable architecture in old-money neighborhoods and have been well maintained for their entire existence. I think it might be a bit of a survivorship bias.

billfruit 6y ago

You mean the "West coast" when you say West?

WalterBright 6y ago

> Starting around 1975, housing supply stopped keeping up with the growth of housing demand. That correlates with the boomers entering the housing market.

unishark 6y ago
Was going to say the same thing. Plus the Vietnam war had just ended.