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> one big way to prevent this downward trend in quality of life is to build more cheap housing One pedantic quibble. It's not necessary to build cheap housing

> one big way to prevent this downward trend in quality of life is to build more cheap housing One pedantic quibble. It's not necessary to build cheap housing specifically. It's perfectly fine simply to build more housing of any type. Today's new expensive housing will indirectly create more cheap housing in the pre-existing housing stock, by pulling demand out of the market. Throughout all of American history, new housing has almost exclusively been relatively expensive housing. The rich prefer to live in new housing stock, and the poor prefer to get discounts on old housing stock. The same way that a robust new car market creates a secondary market for cheap used cars. A lot of people with good intentions will try to block any type of development that doesn't specifically include affordable housing. But this is the exact opposite of what's needed. The best way to lower the cost of housing is to increase the supply of housing. And the best way to do that is to unleash developers whatever is most profitable whenever and whoever they want without government regulation and NIMBY activists getting in their way.

Tiktaalik 5y ago
Yes but we have a crisis now which means that we need both regular market housing now and affordable housing now. We do not uh have the luxury of building luxury housing only then waiting 40 years for it to eventually become affordable.
- BobbyJo 5y ago
  Market housing creates affordable housing by displacing demand. No matter what kind of housing you build, as long as it gets built now it will lower prices now.
  - TchoBeer 5y ago
    More luxery houses would lower prices for luxery housing, but not necessarily for affordable housing. I don't know how much those are competing markets
    - alisonkisk 5y ago
      They compete strongly. Rich people pay a lot for junky apartments due to the shortage.
      - TchoBeer 5y ago
        Somehow I doubt that's a considerable driver of affordable housing prices, but it's possible. Where did you get that from?
        dnautics 5y ago
        You ever seen techies living in the mission district?
    - nerfhammer 5y ago
      New housing is always relatively "luxury" because newness is itself a luxury. Much of what is relatively affordable now was relatively "luxury" when it was built. But if you stop building anything new it would be like trying to keep the price of cars down by banning new cars – what will happen after a decade or two if you did that?
      - TchoBeer 5y ago
        To use your car analogy- just because a new car will be worth more than a used one (and this is much more true of cars than houses), that doesn't mean there's no such thing as a luxery car. Sure, newness is a type of luxery (I'm not sure how much housing price depreciates with time, but I'll believe you on this one), but new houses can be built to cater to wealthy buyers or to cater to lower income buyers.
    - ajmurmann 5y ago
      In addition to the relation between luxury housing market and affordable housing market that others are calling out, regulations and other hurdles to build are a reason expensive units are built rather than cheap ones. If you need 15 permits to build in SoMa and changes requested by one council can require going through the process for another permit again, your fixed cost gets so high that you really have no choice but to build expensive units. I'm sure housing cost would quickly get under control of SF for example were to eliminate any height and other zoning constraints and have as the only requirement that you are able to get insurance for your building.
  - mikepurvis 5y ago
    That assumes there are market incentives to actually fill the housing that is built. What about when buildings of hundreds of luxury condos are built and they just sit empty, either owned by disinterested "investors" or unwilling to be sold for the market-directed price? Someone who studied this in Toronto by overlaying nighttime photos to find units where the lights are literally never on: https://www.movesmartly.com/articles/condo-units-sitting-empty-in-toronto https://www.movesmartly.com/articles/condo-units-sitting-emp...
    - tylerhou 5y ago
      That blogpost you cited says that there is a 5% vacancy rate. That's well within the normal range. So I don't see how it supports your argument. https://www.reddit.com/r/badeconomics/comments/musne8/disproving_the_vacant_homes_myth/ https://www.reddit.com/r/badeconomics/comments/musne8/dispro...
      - mikepurvis 5y ago
        Fair— I kind of picked one at random. Obviously part of the point of that dude's effort is that this is a difficult thing to get numbers on. Here's some other coverage around responses to a planned vacant unit tax: https://www.blogto.com/real-estate-toronto/2021/02/real-estate-investors-toronto-sell-vacant-home-tax/ https://www.blogto.com/real-estate-toronto/2021/02/real-esta...
    - ajmurmann 5y ago
      If you build more prices will come down and these "investments" will become nonviable.
      - mikepurvis 5y ago
        Maybe, but that is difficult when a) the "investors" are split between connected, powerful people who really don't want to see their investments go negative; and families just getting started who could be utterly ruined by an underwater mortgage, and b) the fact that the housing situation is a crisis now; there isn't time to faff around and hope that ten to twenty years the invisible hand of the market does this or that.
  - drewmate 5y ago
    I think you're mostly right, but it's not as straightforward as 1 dwelling per household and everyone just moves up a rung. Market housing could get bought up by people who are currently living with roommates (but would like their own home) or one of the 52% of young adults currently living with their parents.[0] Those spots are then unlikely to become available for the homeless. This is just another symptom of the major lack of housing in the US, and needs to be solved as well, but it highlights how difficult it is to alleviate homelessness when there are other casualties of the housing market as well. By all means, build as much housing as soon as possible, but some of it will probably need to be specifically targeted at homeless or poorer populations. [0] https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/ https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-...
    - BobbyJo 5y ago
      Why are those people living with roommates? Because they can't afford not to. If they suddenly move out and fill up a space they otherwise couldn't afford, that requires that prices have gone down. price = F(supply, demand) therefore demand = G(price, supply) and supply = H(price, demand)
- mixmastamyk 5y ago
  Not what was said. A new building automatically makes the ten-year-old next door look shabby in comparison, and so on. Still, we need to remove barriers that prevent middle-class housing from being built, such as parking minimums and other bureaucracy.
- BurningFrog 5y ago
  If you build enough luxury housing it will become cheap right away. San Francisco has ~400k housing units. If you build a million more, prices will go down very sharply. When there is more housing units than people who want to live there, prices go towards zero, whether they're "luxury" or not.
  - Tiktaalik 5y ago
    This is all true if we're talking about supply demand lines on a graph, but when on earth in real life is a for-profit company gonna whoops accidentally build so much that they have to take a loss and then keep building? lol. I mean the idea is correct, but I don't think we can depend on the private market to deliver on this concept. Don't get me wrong SF badly needs more housing and needs to approve tons more, I'm just saying there are limits to the outcome. At some point for profit developers will not build because they can't make a return. Now if we had a not for profit government agency that steadily built housing regardless of the market conditions, say they were working toward a vacancy rate goal, now that could create surplus housing. You might see friction there though in the private market would pull back.
    - BurningFrog 5y ago
      I was arguing against the idea that adding "luxury" housing won't lower prices. Most people understands it does it if you add a million units, but for some reason they can't grasp that each new unit contributes. I was not predicting anyone would build a million units overnight, certainly not accidentally. > At some point for profit developers will not build because they can't make a return. SF has been very near this point for decades. Because new construction is mostly illegal, and if not extremely expensive and slow. Because of explicit policy from the SF BoS. If housing construction were legalized in SF, say by adopting the regulations of Houston or Tokyo, there would be an enormous construction wave in the city. No one can predict to what level, but after that has transformed the city we can take stock and see if any other measures need to taken. But I don't see SF doing anything of the kind without at least a decade of hesitation. The city is far too conservative to change.
0xB31B1B 5y ago
Yea, 100% Agree. Fully supportive of all housing. I was specifically referring to SRO type housing or boarding houses which are currently illegal to build, but there is so much simple stuff to be done here anything helps.
- spfzero 5y ago
  Boarding houses used to be pretty common in the USA. Are they really illegal to build now? "Sober Living" homes seem legal to build, they're all over the place, and they meet the definition of "boarding house".
et-al 5y ago
I see you've read that CityObservatory article from a few years back [0]. Unfortunately as the Tiktaalik mentioned, we have a housing shortage now. So the trickle-down economics of luxury housing won't work for at least a generation. Also, all the actual luxury housing that ends up being built is bought by wealthy investors buying their third or fourth property. Just look at the housing market in London. > Throughout all of American history, new housing has almost exclusively been relatively expensive housing. Eichlers and Craftsman homes were targeted squarely at the middle class of their time. Now in the Bay Area, the price of a "middle class" home is probably skewed to something around $1,000/sqft, but I don't know if middle class wages can actually afford that. [0] - https://cityobservatory.org/how-luxury-housing-becomes-affordable/ https://cityobservatory.org/how-luxury-housing-becomes-affor...
- tylerhou 5y ago
  > Unfortunately as the Tiktaalik mentioned, we have a housing shortage now. So the trickle-down economics of luxury housing won't work for at least a generation. What data are you basing this claim off of? Many people (especially young people in finance and tech) move every few years, and some of them want luxury apartments. That reduces the demand for cheaper housing stock. A 25 y/o moving to SF isn't going to buy an apartment and stay there for their entire life.
  - barbecue_sauce 5y ago
    A 25 y/o moving to SF isn't going to buy an apartment period.
    - CivBase 5y ago
      I'm confused. What will a 25 y/o moving to SF buy? They can't all be homeless or wealthy enough to buy a house in SF.
      - nthj 5y ago
        I believe the confusion is over the term "buy." In San Francisco/US terminology, a 25 y/o is likely to rent or lease an apartment. Buying would more likely be of a condo (or a house, as you mentioned.)
onion2k 5y ago
Today's new expensive housing will indirectly create more cheap housing in the pre-existing housing stock, by pulling demand out of the market. Only if people actually live in those houses, and they're bought by people living in the cheaper houses right now who then move up in to the new housing stock. If people buy the new houses as investments and leave them empty most of the year then it has no impact on the rest of the housing market, or if people from outside buy them and move to the city then it just increases the population of the city with no effect on the lower social strata. This is precisely what happens in places like London. There's a boom in house building but it's often apartments bought by foreign investors (allegedly for money laundering... ). Directly building more social housing would have a far greater impact than trying to affect cheap housing stock by 'trickle down' methods.
- alisonkisk 5y ago
  Why wouldn't "social housing" get gentrified?
- tylerhou 5y ago
  What concrete data do you have to suggest that luxury homes aren't being occupied at significantly higher rates than general housing stock?
  - onion2k 5y ago
    https://www.actiononemptyhomes.org/pretty-vacant https://www.actiononemptyhomes.org/pretty-vacant "Wealth investment leaves an estimated 125,000 homes in London without anyone living in them." There are 268,385 empty homes in England according to the government (people get a tax break in most parts of England if they own a property that is unoccupied and unfurnished so its quite easy to track empty homes), and half of them are luxury houses in London. I'm not saying that's definitely the case everywhere, but I am saying it's worth considering.
    - maddyboo 5y ago
      What is the rationale for giving such a tax break? That seems ridiculous.
Causality1 5y ago
Assuming the infrastructure is there to support it. Developers are more than happy to pass costs onto the government/taxpayer while keeping the profit, such as by building enormous neighborhoods with a single access road or in high risk flood zones. My brother's neighborhood is right now dealing with a developer who is building a 500-unit housing project whose only entrance and exist is the two lane road in front of his house. They'd have direct access to the highway except for the fact they're too cheap to bridge a five foot wide creek.
slg 5y ago
This generally doesn't happen for two primary reasons. First cities are not closed systems. Places like LA and the Bay Area have a built up demand that exceeds housing. The new housing would have to be added at an extremely high right to keep up with that demand otherwise the city just grows rather than becomes cheaper. When a city simply grows, the cheaper units never flow down to the bottom of the market as someone else will move in who lives outside the city and was previously priced out of the mid-tier housing. We see the same type of thing when designing transportation systems in a city. Adding in a new road can actually increase traffic as it ends up encouraging more people to drive who otherwise wouldn't have. Also the housing market is not a singular market. The type of person who would live in a 3 bedroom luxury condo is not the same type of person who would live in an SRO hotel that shares a bathroom. Most people have a small window of what housing they consider acceptable and what budget they can afford. When a city gentrifies and knocks down SRO housing and replaces it with luxury condos (something that has happened a lot in both LA and the Bay Area over the last couple decades), the available units at the bottom of the market decreases in favor of the top of the market. That doesn't result in everyone in the city just moving up one rung on the housing ladder. Competition for the affordable units is now even higher because there are less of them available.
- JumpCrisscross 5y ago
  > cheaper units never flow down to the bottom of the market “Never” is too strong. It happened to me in New York. I negotiated down my rent on account of nearby buildings with better amenities opening at slightly higher but similar enough pricing, net effective. Meanwhile, Brooklyn and San Francisco were busy blocking all new construction, thereby forcing their restaurant workers to compete with millionaires.
  - slg 5y ago
    You are disputing a point I never made. I didn't say "no units ever get cheaper". I said when growth outpaces new housing "cheaper units never flow down to the bottom of the market". You said yourself that the new construction had slightly higher pricing meaning your unit was in the same basic market as the new construction and also implies you likely were not shopping at "the bottom of the market". Do you think you would have been able to negotiate your rent down if the new building was in an entirely different class and was charging 2x or 3x your rent?
EarthIsHome 5y ago
I'm all for building more housing for people. Ending homelessness, by definition, would mean to provide housing. But the thing is, we don't even need to build more housing. There are more than 30 times more vacant homes [0] than there are homeless. It makes the most sense to redistribute resources more effectively and efficiently. We should be looking at our system as a whole when it clearly doesn't distribute necessary resources effectively (e.g. food insecurity, wealth inequality, homelessness when there are 30 times more vacant homes than there are homeless, etc.) [0]: https://247wallst.com/housing/2019/09/30/there-are-over-17-million-vacant-homes-in-america/ https://247wallst.com/housing/2019/09/30/there-are-over-17-m...
- 0xB31B1B 5y ago
  This is the worst possible take. Yes, there are vacant homes. They are by and large vacant because there is no economic opportunity near these homes. The vacancy rates in cities with high homelessness rates are at or below 1%. Yes, there may be more homes than homeless in these cities but "the homeless that currently reside in a locale" are not the total extent of the stakeholders that may want to move in our out of a city.
- tunesmith 5y ago
  I don't think that "we don't need to build more housing" follows from "we have more vacant houses than houseless". It seems like the implicit assumption there is we have the ability to move all the houseless to those house, but that sounds really unlikely (albeit an extremely interesting project if it's tried).
- BurningFrog 5y ago
  Those houses are empty for a reason. Usually they are where there is a housing surplus, because population in the area has declined. I predict offering the people in my Oakland neighborhood shantytowns housing in abandoned rustbelt towns will not find many takers.
DemocracyFTW 5y ago
> It's not necessary to build cheap housing specifically because cheap housing falls from the sky. It trickles down, yknow. Some people get rich first, then we all profit from their breadcrumbs. There's a god, and god is just. Jeez.
JohnBooty 5y ago
The best way to lower the cost of housing is to increase the supply of housing. And the best way to do that is to unleash developers whatever is most profitable whenever and whoever they want without government regulation and NIMBY activists getting in their way. You had me up until here. There is surely a (messy) middle ground between "recognizing that increasing housing supply drives down pricing" and "letting real estate developers do literally whatever they want." I spent quite a few years living in a "trendy" area where housing developers crammed as much housing into it as possible. The results were not pretty. Very easy to create an environmental and quality-of-life nightmare which is particularly unfair to those already living in the area, with no say over what becomes of it. The goals of housing developers are not necessarily aligned with that of society.
mamurphy 5y ago
Another comment in this thread prompted me to research a bit. While building expensive housing is probably fine, it seems that the cities with the most success have adopted a housing first[0][1][2] policy. Building cheap housing (and housing homeless there) is a major part of what is seen by many as the most effective solution. [0]https://www.bloomberg.com/news/features/2020-07-06/why-is-homelessness-such-a-problem-in-u-s-cities https://www.bloomberg.com/news/features/2020-07-06/why-is-ho... [1]https://www.reuters.com/article/us-usa-homelessness-housing/once-a-national-model-utah-struggles-with-homelessness-idUSKCN1P41EQ https://www.reuters.com/article/us-usa-homelessness-housing/... [2]https://www.bbc.com/news/uk-england-46891392 https://www.bbc.com/news/uk-england-46891392
devwastaken 5y ago
Owning a home in LA is like investing in microsoft stock in the 90's. Now that it's so inflated, you don't want it to go down. More houses = less value to your house. When people are looking at having to lose a quarter million or more they're the ones showing up and running the city council.

Tiktaalik 5y ago

Yes but we have a crisis now which means that we need both regular market housing now and affordable housing now. We do not uh have the luxury of building luxury housing only then waiting 40 years for it to eventually become affordable.

BobbyJo 5y ago
Market housing creates affordable housing by displacing demand. No matter what kind of housing you build, as long as it gets built now it will lower prices now.
- TchoBeer 5y ago
  More luxery houses would lower prices for luxery housing, but not necessarily for affordable housing. I don't know how much those are competing markets
  - alisonkisk 5y ago
    They compete strongly. Rich people pay a lot for junky apartments due to the shortage.
    - TchoBeer 5y ago
      Somehow I doubt that's a considerable driver of affordable housing prices, but it's possible. Where did you get that from?
      - dnautics 5y ago
        You ever seen techies living in the mission district?
  - nerfhammer 5y ago
    New housing is always relatively "luxury" because newness is itself a luxury. Much of what is relatively affordable now was relatively "luxury" when it was built. But if you stop building anything new it would be like trying to keep the price of cars down by banning new cars – what will happen after a decade or two if you did that?
    - TchoBeer 5y ago
      To use your car analogy- just because a new car will be worth more than a used one (and this is much more true of cars than houses), that doesn't mean there's no such thing as a luxery car. Sure, newness is a type of luxery (I'm not sure how much housing price depreciates with time, but I'll believe you on this one), but new houses can be built to cater to wealthy buyers or to cater to lower income buyers.
  - ajmurmann 5y ago
    In addition to the relation between luxury housing market and affordable housing market that others are calling out, regulations and other hurdles to build are a reason expensive units are built rather than cheap ones. If you need 15 permits to build in SoMa and changes requested by one council can require going through the process for another permit again, your fixed cost gets so high that you really have no choice but to build expensive units. I'm sure housing cost would quickly get under control of SF for example were to eliminate any height and other zoning constraints and have as the only requirement that you are able to get insurance for your building.
- mikepurvis 5y ago
  That assumes there are market incentives to actually fill the housing that is built. What about when buildings of hundreds of luxury condos are built and they just sit empty, either owned by disinterested "investors" or unwilling to be sold for the market-directed price? Someone who studied this in Toronto by overlaying nighttime photos to find units where the lights are literally never on: https://www.movesmartly.com/articles/condo-units-sitting-empty-in-toronto https://www.movesmartly.com/articles/condo-units-sitting-emp...
  - tylerhou 5y ago
    That blogpost you cited says that there is a 5% vacancy rate. That's well within the normal range. So I don't see how it supports your argument. https://www.reddit.com/r/badeconomics/comments/musne8/disproving_the_vacant_homes_myth/ https://www.reddit.com/r/badeconomics/comments/musne8/dispro...
    - mikepurvis 5y ago
      Fair— I kind of picked one at random. Obviously part of the point of that dude's effort is that this is a difficult thing to get numbers on. Here's some other coverage around responses to a planned vacant unit tax: https://www.blogto.com/real-estate-toronto/2021/02/real-estate-investors-toronto-sell-vacant-home-tax/ https://www.blogto.com/real-estate-toronto/2021/02/real-esta...
  - ajmurmann 5y ago
    If you build more prices will come down and these "investments" will become nonviable.
    - mikepurvis 5y ago
      Maybe, but that is difficult when a) the "investors" are split between connected, powerful people who really don't want to see their investments go negative; and families just getting started who could be utterly ruined by an underwater mortgage, and b) the fact that the housing situation is a crisis now; there isn't time to faff around and hope that ten to twenty years the invisible hand of the market does this or that.
- drewmate 5y ago
  I think you're mostly right, but it's not as straightforward as 1 dwelling per household and everyone just moves up a rung. Market housing could get bought up by people who are currently living with roommates (but would like their own home) or one of the 52% of young adults currently living with their parents.[0] Those spots are then unlikely to become available for the homeless. This is just another symptom of the major lack of housing in the US, and needs to be solved as well, but it highlights how difficult it is to alleviate homelessness when there are other casualties of the housing market as well. By all means, build as much housing as soon as possible, but some of it will probably need to be specifically targeted at homeless or poorer populations. [0] https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/ https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-...
  - BobbyJo 5y ago
    Why are those people living with roommates? Because they can't afford not to. If they suddenly move out and fill up a space they otherwise couldn't afford, that requires that prices have gone down. price = F(supply, demand) therefore demand = G(price, supply) and supply = H(price, demand)
mixmastamyk 5y ago
Not what was said. A new building automatically makes the ten-year-old next door look shabby in comparison, and so on. Still, we need to remove barriers that prevent middle-class housing from being built, such as parking minimums and other bureaucracy.
BurningFrog 5y ago
If you build enough luxury housing it will become cheap right away. San Francisco has ~400k housing units. If you build a million more, prices will go down very sharply. When there is more housing units than people who want to live there, prices go towards zero, whether they're "luxury" or not.
- Tiktaalik 5y ago
  This is all true if we're talking about supply demand lines on a graph, but when on earth in real life is a for-profit company gonna whoops accidentally build so much that they have to take a loss and then keep building? lol. I mean the idea is correct, but I don't think we can depend on the private market to deliver on this concept. Don't get me wrong SF badly needs more housing and needs to approve tons more, I'm just saying there are limits to the outcome. At some point for profit developers will not build because they can't make a return. Now if we had a not for profit government agency that steadily built housing regardless of the market conditions, say they were working toward a vacancy rate goal, now that could create surplus housing. You might see friction there though in the private market would pull back.
  - BurningFrog 5y ago
    I was arguing against the idea that adding "luxury" housing won't lower prices. Most people understands it does it if you add a million units, but for some reason they can't grasp that each new unit contributes. I was not predicting anyone would build a million units overnight, certainly not accidentally. > At some point for profit developers will not build because they can't make a return. SF has been very near this point for decades. Because new construction is mostly illegal, and if not extremely expensive and slow. Because of explicit policy from the SF BoS. If housing construction were legalized in SF, say by adopting the regulations of Houston or Tokyo, there would be an enormous construction wave in the city. No one can predict to what level, but after that has transformed the city we can take stock and see if any other measures need to taken. But I don't see SF doing anything of the kind without at least a decade of hesitation. The city is far too conservative to change.

0xB31B1B 5y ago

Yea, 100% Agree. Fully supportive of all housing. I was specifically referring to SRO type housing or boarding houses which are currently illegal to build, but there is so much simple stuff to be done here anything helps.

spfzero 5y ago
Boarding houses used to be pretty common in the USA. Are they really illegal to build now? "Sober Living" homes seem legal to build, they're all over the place, and they meet the definition of "boarding house".

et-al 5y ago

I see you've read that CityObservatory article from a few years back [0]. Unfortunately as the Tiktaalik mentioned, we have a housing shortage now. So the trickle-down economics of luxury housing won't work for at least a generation. Also, all the actual luxury housing that ends up being built is bought by wealthy investors buying their third or fourth property. Just look at the housing market in London. > Throughout all of American history, new housing has almost exclusively been relatively expensive housing. Eichlers and Craftsman homes were targeted squarely at the middle class of their time. Now in the Bay Area, the price of a "middle class" home is probably skewed to something around $1,000/sqft, but I don't know if middle class wages can actually afford that. [0] - https://cityobservatory.org/how-luxury-housing-becomes-affordable/ https://cityobservatory.org/how-luxury-housing-becomes-affor...

tylerhou 5y ago
> Unfortunately as the Tiktaalik mentioned, we have a housing shortage now. So the trickle-down economics of luxury housing won't work for at least a generation. What data are you basing this claim off of? Many people (especially young people in finance and tech) move every few years, and some of them want luxury apartments. That reduces the demand for cheaper housing stock. A 25 y/o moving to SF isn't going to buy an apartment and stay there for their entire life.
- barbecue_sauce 5y ago
  A 25 y/o moving to SF isn't going to buy an apartment period.
  - CivBase 5y ago
    I'm confused. What will a 25 y/o moving to SF buy? They can't all be homeless or wealthy enough to buy a house in SF.
    - nthj 5y ago
      I believe the confusion is over the term "buy." In San Francisco/US terminology, a 25 y/o is likely to rent or lease an apartment. Buying would more likely be of a condo (or a house, as you mentioned.)

onion2k 5y ago

Today's new expensive housing will indirectly create more cheap housing in the pre-existing housing stock, by pulling demand out of the market. Only if people actually live in those houses, and they're bought by people living in the cheaper houses right now who then move up in to the new housing stock. If people buy the new houses as investments and leave them empty most of the year then it has no impact on the rest of the housing market, or if people from outside buy them and move to the city then it just increases the population of the city with no effect on the lower social strata. This is precisely what happens in places like London. There's a boom in house building but it's often apartments bought by foreign investors (allegedly for money laundering... ). Directly building more social housing would have a far greater impact than trying to affect cheap housing stock by 'trickle down' methods.

alisonkisk 5y ago
Why wouldn't "social housing" get gentrified?
tylerhou 5y ago
What concrete data do you have to suggest that luxury homes aren't being occupied at significantly higher rates than general housing stock?
- onion2k 5y ago
  https://www.actiononemptyhomes.org/pretty-vacant https://www.actiononemptyhomes.org/pretty-vacant "Wealth investment leaves an estimated 125,000 homes in London without anyone living in them." There are 268,385 empty homes in England according to the government (people get a tax break in most parts of England if they own a property that is unoccupied and unfurnished so its quite easy to track empty homes), and half of them are luxury houses in London. I'm not saying that's definitely the case everywhere, but I am saying it's worth considering.
  - maddyboo 5y ago
    What is the rationale for giving such a tax break? That seems ridiculous.

Causality1 5y ago

Assuming the infrastructure is there to support it. Developers are more than happy to pass costs onto the government/taxpayer while keeping the profit, such as by building enormous neighborhoods with a single access road or in high risk flood zones. My brother's neighborhood is right now dealing with a developer who is building a 500-unit housing project whose only entrance and exist is the two lane road in front of his house. They'd have direct access to the highway except for the fact they're too cheap to bridge a five foot wide creek.

slg 5y ago

This generally doesn't happen for two primary reasons. First cities are not closed systems. Places like LA and the Bay Area have a built up demand that exceeds housing. The new housing would have to be added at an extremely high right to keep up with that demand otherwise the city just grows rather than becomes cheaper. When a city simply grows, the cheaper units never flow down to the bottom of the market as someone else will move in who lives outside the city and was previously priced out of the mid-tier housing. We see the same type of thing when designing transportation systems in a city. Adding in a new road can actually increase traffic as it ends up encouraging more people to drive who otherwise wouldn't have. Also the housing market is not a singular market. The type of person who would live in a 3 bedroom luxury condo is not the same type of person who would live in an SRO hotel that shares a bathroom. Most people have a small window of what housing they consider acceptable and what budget they can afford. When a city gentrifies and knocks down SRO housing and replaces it with luxury condos (something that has happened a lot in both LA and the Bay Area over the last couple decades), the available units at the bottom of the market decreases in favor of the top of the market. That doesn't result in everyone in the city just moving up one rung on the housing ladder. Competition for the affordable units is now even higher because there are less of them available.

JumpCrisscross 5y ago
> cheaper units never flow down to the bottom of the market “Never” is too strong. It happened to me in New York. I negotiated down my rent on account of nearby buildings with better amenities opening at slightly higher but similar enough pricing, net effective. Meanwhile, Brooklyn and San Francisco were busy blocking all new construction, thereby forcing their restaurant workers to compete with millionaires.
- slg 5y ago
  You are disputing a point I never made. I didn't say "no units ever get cheaper". I said when growth outpaces new housing "cheaper units never flow down to the bottom of the market". You said yourself that the new construction had slightly higher pricing meaning your unit was in the same basic market as the new construction and also implies you likely were not shopping at "the bottom of the market". Do you think you would have been able to negotiate your rent down if the new building was in an entirely different class and was charging 2x or 3x your rent?

EarthIsHome 5y ago

I'm all for building more housing for people. Ending homelessness, by definition, would mean to provide housing. But the thing is, we don't even need to build more housing. There are more than 30 times more vacant homes [0] than there are homeless. It makes the most sense to redistribute resources more effectively and efficiently. We should be looking at our system as a whole when it clearly doesn't distribute necessary resources effectively (e.g. food insecurity, wealth inequality, homelessness when there are 30 times more vacant homes than there are homeless, etc.) [0]: https://247wallst.com/housing/2019/09/30/there-are-over-17-million-vacant-homes-in-america/ https://247wallst.com/housing/2019/09/30/there-are-over-17-m...

0xB31B1B 5y ago
This is the worst possible take. Yes, there are vacant homes. They are by and large vacant because there is no economic opportunity near these homes. The vacancy rates in cities with high homelessness rates are at or below 1%. Yes, there may be more homes than homeless in these cities but "the homeless that currently reside in a locale" are not the total extent of the stakeholders that may want to move in our out of a city.
tunesmith 5y ago
I don't think that "we don't need to build more housing" follows from "we have more vacant houses than houseless". It seems like the implicit assumption there is we have the ability to move all the houseless to those house, but that sounds really unlikely (albeit an extremely interesting project if it's tried).
BurningFrog 5y ago
Those houses are empty for a reason. Usually they are where there is a housing surplus, because population in the area has declined. I predict offering the people in my Oakland neighborhood shantytowns housing in abandoned rustbelt towns will not find many takers.

DemocracyFTW 5y ago

> It's not necessary to build cheap housing specifically because cheap housing falls from the sky. It trickles down, yknow. Some people get rich first, then we all profit from their breadcrumbs. There's a god, and god is just. Jeez.

JohnBooty 5y ago

The best way to lower the cost of housing is to increase the supply of housing. And the best way to do that is to unleash developers whatever is most profitable whenever and whoever they want without government regulation and NIMBY activists getting in their way. You had me up until here. There is surely a (messy) middle ground between "recognizing that increasing housing supply drives down pricing" and "letting real estate developers do literally whatever they want." I spent quite a few years living in a "trendy" area where housing developers crammed as much housing into it as possible. The results were not pretty. Very easy to create an environmental and quality-of-life nightmare which is particularly unfair to those already living in the area, with no say over what becomes of it. The goals of housing developers are not necessarily aligned with that of society.

mamurphy 5y ago

Another comment in this thread prompted me to research a bit. While building expensive housing is probably fine, it seems that the cities with the most success have adopted a housing first[0][1][2] policy. Building cheap housing (and housing homeless there) is a major part of what is seen by many as the most effective solution. [0]https://www.bloomberg.com/news/features/2020-07-06/why-is-homelessness-such-a-problem-in-u-s-cities https://www.bloomberg.com/news/features/2020-07-06/why-is-ho... [1]https://www.reuters.com/article/us-usa-homelessness-housing/once-a-national-model-utah-struggles-with-homelessness-idUSKCN1P41EQ https://www.reuters.com/article/us-usa-homelessness-housing/... [2]https://www.bbc.com/news/uk-england-46891392 https://www.bbc.com/news/uk-england-46891392

devwastaken 5y ago

Owning a home in LA is like investing in microsoft stock in the 90's. Now that it's so inflated, you don't want it to go down. More houses = less value to your house. When people are looking at having to lose a quarter million or more they're the ones showing up and running the city council.