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I want to point out some evidence for the theory can be found in Vancouver where the entire city was rezoned for fourplexes (a duplex where each side has a rent
by eloff 5y ago
I want to point out some evidence for the theory can be found in Vancouver where the entire city was rezoned for fourplexes (a duplex where each side has a rental unit.)
It has added barely any new supply at all.
I think it didn't go far enough. Rezone for 4-10 story apartment buildings, and now you're getting somewhere.
This single family home thing just doesn't work in cities with as much demand as San Francisco and Vancouver.
If you want to tackle the problem from the supply side, you need to be more aggressive about it. You need for the potential profit to be great enough to justify buying multiple adjacent homes, tearing them down, and combining the lots.
Even then, it might not be enough to solve the problem, but it's a start.
- austincheney 5y agoThat sounds like an epic value destroyer. It won’t lower prices. Instead it will drive out owners to be replaced by leasers incapable of owning property. The only people that win are owners of multi-tenant properties, which are often commercial businesses.
- eloff 5y agoIf they're condos, you can own it, at least as much as you can own half a duplex. If they're rental units, that's also ok, more supply brings down rents and lower rent causes more landlords to sell. Extra supply does add downward pressure on prices one way or another. I don't see where the "value destroyer" is.
- austincheney 5y ago> more supply brings down rents People say that on here all the time, but I have never seen that happen. Do you have an example where increased housing supply lowered prices aside from a natural or market disaster? Maybe, Detroit where people simply abandoned their homes with no intent to sell.
- eloff 5y agoThat's microeconomics 101, so it's theoretically sound. Is there some effect in real life that prevents it from working the way the theory predicts? I don't think so. I would put the burden of proof on you, if you want to go against a solid theory. It seems self evident that more housing supply means houses stay on the market longer (there is lots of evidence for that) and that means sellers have more incentives to lower the price to get a quicker sale (lots of evidence for that too.) Look for historical real estate inventory reports that include prices and you should see the effect when time on market increases. It's important to note that prices would only fall if the change in supply overwhelmed the change in demand. In cities like Vancouver the demand is increasing at such a rate that increased supply only means prices don't rise as much as they would have otherwise. Time on market is always short. There was a brief dip in prices early in the pandemic and then things compensated back in the other direction.
- austincheney 5y agoRight, but do you have any historic examples? I see none.
- eloff 5y agoThat's because you didn't look.
- austincheney 5y agoYou didn’t supply any for me to look at. Is this a child’s imagination game? Guessing at some 9th grade economics theory aside, what does the actual data say? Ignoring data like this is the only reason I can think of why people are willing to pay 10x more for a house of half the size that I paid.
- eloff 5y agoBurden of proof is you. It's not my job to do your research for you. You asked the question, challenging accepted theory, look up the answer.
- pempem 5y agoCondos are not advantageous to the owner. You're not building equity or able to borrow on the value, just ensure a very slow growth investment at risk of value destruction at the hands of the condo board.
- hamandcheese 5y ago> Instead it will drive out owners to be replaced by leasers incapable of owning property. Isn’t that exactly the point? These are the people that can’t afford to live in the city now.
- austincheney 5y agoDestroying value does not imply lower prices. It just means lost equity.
- hungrygs 5y agoIf Vancouver overall is as dense as SF then 4 plexes won't matter much. But there are many other cities - even LA - where I would think it would. Yet LA has vast amount of low rise commercial on 4 lane streets with bus lines that could support widespread 1+5 podium style designed buildings.
- brailsafe 5y agoSeems to me like in Van this is just a gradual process. Particularly in east van, I'm seeing houses be replaced or renovated to specifically accomodate at least twice the addresses and maintain the feel of the existing neighborhood; I'm living in one. I think something to consider though is that a lot of people were renting the basements anyway, and might instead be renting an intentionally constructed unit on the same property now. I'm also of course seeing nimbys against tower development at commercial and broadway, which would have the biggest short term impact imo. They want to protect their scarcity.
- eloff 5y ago> I'm also of course seeing nimbys against tower development at commercial and broadway, which would have the biggest short term impact imo. They want to protect their scarcity. Ugh. We have to put a stop to that if we don't want to end up like San Francisco. The Tokyo model is the one to emulate.
- brailsafe 5y agoDo you mean put a stop to nimbyism or put a stop to tower development? I'm not one for completely favouring towers, but in this particular neighborhood, there's basically no new buyable housing stock. If people want to live here, they're either renting or buying one of the endlessly appreciating massive houses. That need to rent and the scarcity drives up the big house value further, and the only people who can get ahead are the ones who cam buy something for 1.7m.