12 ms·

How to make housing more affordable

47 points by jseliger 5y ago

throwthere 5y ago
A more appropriate title is something like "How to make housing more affordable in California." Housing is plenty-affordable in most of the country, even with the latest boom.
- zip1234 5y ago
  In almost any area with high demand, the prices are almost as high as California. The same zoning restrictions are everywhere.
  - throwthere 5y ago
    CA's this weird place with an amazing climate and lots of high-paying jobs. You can look at a similarly booming place like Austin, and still find affordable housing within a 1 hour drive anywhere. Same with Chicago, Atlanta, Boston, Philadelphia... Even NYC has affordable housing within a 1 hour commute.
    - BigRedDog1669 5y ago
      Where can you find affordable housing within 1 hour of Boston or New York? (That you can actually commute to those cities within an hour during normal working hours)
- c0nducktr 5y ago
  Most of the country is empty space.
deleted 5y ago
[deleted]
netfl0 5y ago
Nice to see a fresh perspective. High density appears to create fragility. People were fleeing from cities during covid.
- alistairSH 5y ago
  True, but an epidemic like COVID is generally a once in a lifetime (or less) occurrence. Probably best not to allow it to drive housing policy.
- coryrc 5y ago
  Tiny pools of high-priced, high-density studios and single bedrooms in a country where restaurants are forced to close for years now? Yeah, rents dropped maybe 20% for a year. Widespread, affordable, high-density 3- & 4-bedroom units in South Korea where people will wear masks? Still occupied.
  - cyber_kinetist 5y ago
    Um, you might want to erase the “affordable” in your last sentence. South Korea also has a pretty serious housing bubble issue right now, it is really hard for a newly married couple to get a Jeonse [1] on an apartment in Seoul (unless your parents are rich). And you really need to be careful when comparing South Korea’s housing market with other countries. It has its own unique properties that would probably make no sense at all to outsiders at first glance. [1] https://en.wikipedia.org/wiki/Jeonse https://en.wikipedia.org/wiki/Jeonse
    - coryrc 5y ago
      It seems the whole world is getting worse in that regard...
hellbannedguy 5y ago
Prevent corporations, non-citizens, from buying up realestate could be a start. Heavily taxing the third piece of realeste one adult buys. (A guy buys a home, and a getaway pad, fine. Tax the third property a lot to avoid homes being being accumulated.) Put a unoccupied tax on vacant realestate too.
- MattGaiser 5y ago
  This makes home ownership more affordable. Anyone want to rent? Well, your market just got a lot smaller.
  - kennywinker 5y ago
    Landlords don't provide housing, construction workers do. Build houses, let people own them. For every 1 person who buys a vacation property, there'll likely be 10 who buy a second rental income property anyway, so I doubt that this would actually make renting that difficult.
    - Guzba 5y ago
      Hm, I get your point but you've never wanted to live somewhere for just a few years? Renting is great for many circumstances. Huge transaction fees and risks related to owning are not great if you're not looking to settle down longer-term. The idea this need is covered by a bunch of people owning just one property seems stretched. What is truly wrong with meeting a need more efficiently?
      - kennywinker 5y ago
        I feel pretty confidant that the ability to move somewhere for a couple years would be safe. Rental markets can be handled by multi-tenant housing (suites and laneway houses), shared living spaces, socialized student housing, and private second home rentals, and of course just buying a house for a couple years... > Huge transaction fees and risks related to owning When houses cost millions, yes this is true. But if we got house prices down to an actually affordable level, this would not be such a concern. If I decided today to move to winnipeg for a couple years, houses are so cheap (at least compared to what I'm used to) that I'd strongly consider just buying a house or a condo for the time I was there.
kennywinker 5y ago
Libertarian organization delivers libertarian hot-take. No surprise there. It's tempting to believe! We all know the old story of the "law" of supply and demand. And there may be specific places where there is actually too much blocking new construction. Where I live, Vancouver, we have plenty of new construction - and have been pretty developer friendly for decades now. The problems I've seen with it are 1. it doesn't bring down prices and 2. all that gets built are luxury homes for the rich and condos for everyone else. Meanwhile developers and investors have gotten very rich off it. As a recent-ish example, the olympic village development sat mostly empty for YEARS, held by investors. There was no noticeable dip in prices when that development came online. Long story short - yeah, we need to build more homes - but not using laissez-faire capitalism. As far as I can see in my lifetime that hasn't worked. Large scale socialized row-housing developments are what I'd like to see tried next.
- mfcl 5y ago
  Why do you think it does not work? And what would you do instead?
  - kennywinker 5y ago
    End real estate purchased for investment, rather than housing. Socialized row housing.
- bryanlarsen 5y ago
  BC has added three times as many people as housing units in the last decade. So there definitely has not been plenty of new housing built.
- tptacek 5y ago
  This is essentially an argument that well-educated professional class "socialists" use to justify the protection of their own home values while paying lip service to a housing fix that clearly will not happen. It envisions two kinds of residents: those who will compete up the the cost of houses, and those who will be placed in state-run housing.
kwertyoowiyop 5y ago
Agreed. Just start looking in the Bay Area and you’ll see lots of parcels (either under-utilized or entirely empty) of various sizes that could be used for an apartment or house. It’s nice to see the apartments being built along El Camino now, and a lot more could be done.
rmk 5y ago
It will be interesting to see what the recent legislation will do to California housing prices. I'm not entirely sure if there are enough large lots to sustain multiplexes on them. But even if people start building duplexes, it may help ease the lack of inventory.
- alistairSH 5y ago
  I haven’t seen it mentioned, but does the recent legislation override HOA contracts? Not sure about CA, but most homes built since the mid-70s near DC have HOAs of some sort.
  - rmk 5y ago
    I have seen developments in Virginia, in the middle of nowhere or along important highways, with houses built in clusters. I did not realize they all had HOAs. I do not know the details of the legislation, but it is my understanding that the owner of a lot can raze the house and seek permits to put up up to four houses, depending on lot size. And the permit process will be on an 'as-of-right' basis, i.e., your neighbors can't block you with the CEQA nonsense: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml... Here is the relevant excerpt: The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment. CEQA does not apply to the approval of ministerial projects. This bill, by establishing the ministerial review processes described above, would thereby exempt the approval of projects subject to those processes from CEQA.
lordnacho 5y ago
Has anyone suggested reducing the amount of credit available? That won't increase the number of houses, but people compete on how much they can pay, and if they can pay less houses will cost less.
- gizmo686 5y ago
  That would make homes cheaper, but not more affordable. Since the money to buy homes becomes more expensive you end up with about the same monthly cost.
  - foogazi 5y ago
    So which is it, are homes more expensive now or not? Interest rates have gone from 10% to 2.5% and housing prices went up - it’s the same thing
mrfusion 5y ago
It’s so strange everyone makes this out to be a complicated problem. We just need to build more.
- bananamerica 5y ago
  Build more what? Where? How?
  - tptacek 5y ago
    Housing. On SFBA real estate. By drastically increasing the number of permits issued.
  - anonuser123456 5y ago
    Houses. Everywhere. Using labor.
    - fighterpilot 5y ago
      High-rise apartments, ideally.
  - wpasc 5y ago
    Houses, apartment buildings, government housing. Everywhere that has high housing demand with square footage prices far exceeding the national average. Reduce the governmental burdens to building new housing such as easing impact studies, reducing the influence of local zoning boards, and cutting unnecessary red tape (I don’t mean go to 0 government rules but we have a severely onerous amount now especially in the most popular places).
  - GaryTang 5y ago
    Housing. On land. With our hands. Unfortunately, the single greatest hurdle is bureacracy which requires layers upon layers of paperwork to build a single thing. On top of that, the taxes don’t help pricing the asset either. Nor do the additional 1000s of pages of regulations that prevent laypeople from making money on that housing.
zz865 5y ago
I've been looking at Singapore which is interesting with most people living in pseudo-public housing. The govt owns the apt buildings and people buy 99 year leases ( which you can sell). The idea that you can't own land/space outright, just for 99 years actually makes a lot of sense. You get to live there for your whole life, you aren't buying some intra-generational asset that will get passed to your kids & grandchildren etc. As a result the condos are much cheaper. I think we could do the same with land. You can't buy a yard or farm, you just buy a 99 year lease after which it returns to the city or state.
- kory 5y ago
  Completely disagree. If I buy a piece of land and spend to make improvements, I’d expect to sell at a price that justifies the investment or let my kids inherit my life’s work. Land leases massively disincentivize making improvements to land or structures, because it’s not even yours. What a great way to ensure the quality of our neighborhoods goes down over time.
  - zz865 5y ago
    We're on this thread here to make housing more affordable, not to ensure your kids get your investment. Actually with a 99 year lease they probably will get it, just not your grandkids.
    - kory 5y ago
      Property improvements on personal residences aren't a financial investment. They usually don't have a high, or even positive, rate of return. Rather, they're improvements to your home and your quality of life. They're also your kids' home, and could be their kids' home, and so on. Government bureaucrats should not have free control over those improvements after 100 years. Making all land rentable clearly isn't about encouraging development and affordability; a land value tax could do that. Making all land only rentable is clearly a scheme to allow government to steal valuable land from the current owners who otherwise could afford the taxes and wouldn't sell. Many NIMBYs don't even care about their home value (unless they've purchased recently and don't want to be underwater on their mortgage). If you actually talk to most homeowners, especially the long term ones, they care much more about the neighborhood and home they've built so hard to create. Seeing a life of memories razed for concrete and glass townhomes/towers isn't an easy pill for anyone to swallow. All that said, we do need to upzone for affordability. But all of this talk of "we aren't protecting your investment" is misguided, that isn't what single family homeowners care about.
hn_throwaway_99 5y ago
I mean, the article gets at this at the end, but these days I don't think there is much disagreement in the root causes: 1. Yes, if you want more affordable housing, you need to make it much easier to build homes. 2. The root cause of current housing crises, though, is that once any individual buys a home in an area, they immediately then have a strong economic incentive to make building new homes as difficult as possible (assuming they already live in a built-up area). So the question is how you fix number 2, because in virtually any area home owners will have outsized political power. So the article talks about this somewhat at the end: removing local control over housing policy and giving more of that power to the state, which I agree is one way to address the issue. But I still think the fundamental problem that needs more attention is how do you adjust (or nullify) incentives so that existing homeowners are prevented from making the house permitting process more difficult for everyone else.
- wwweston 5y ago
  I’d also say homeowner economic incentives don’t even cover it. You buy into a community as it is — that’s what you saw the benefit of investing in not only economically but socially and in terms of years of your life. You may well be particular about its social, architectural, and natural features and resist change to them. If that’s true, then affordable housing pushes that address individual incentives also need to address incentives around “social equity.”
- Lammy 5y ago
  Regarding number 2, I can’t help but notice the inflection point of homeowner equity is ~1965, right in between the 1964 and 1968 civil rights statutes. Smells like “segregation with extra steps” to me: https://fred.stlouisfed.org/series/OEHRENWBSHNO https://fred.stlouisfed.org/series/OEHRENWBSHNO To the crowd at large: I would love to learn more about what exactly changed during this time period to change peoples’ incentives on such a massive scale. Was there some change in law/regulations to make housing a “safer” investment for people, besides just tanking the interest rates for other types of investments like is all over the news these days? Links or hints would be very appreciated :)
- ItsMonkk 5y ago
TradingPlaces 5y ago
Seattle had rent inflation at 7% a year. See if you can tell on this chart when they passed the law allowing higher density on some single-family lots https://fred.stlouisfed.org/graph/fredgraph.png?g=H4YO https://fred.stlouisfed.org/graph/fredgraph.png?g=H4YO
- nostrademons 5y ago
  I'm curious which law you speak of. From the chart, it looks like something happened in 2018, but when I googled [seattle higher density on sfh lots] or [seattle single family upzone], I only got articles from this year saying that such legislation was being considered.
  - TradingPlaces 5y ago
    MHA passed late 2017. Upzoned 27 neighborhoods
SaberTail 5y ago
This ignores the inherent contradiction in current housing policy: housing cannot be both a good investment and affordable. If housing is a good investment, that means it's appreciating faster than inflation, which will make it increasingly unaffordable as time passes. If housing is affordable, and remains so, then it is not appreciating enough to make a good investment. For decades, governments have made policies to make housing into a good investment. Things like government guarantees on mortgages to reduce the interest rate, mortgage interest deductions, property tax limits, and (yes) restricting the supply of housing through permits and zoning are all policies that serve to make housing a good investment, at the expense of affordability.
- ch4s3 5y ago
  Housing is multiple markets even within narrow geographic bounds. We could produce a lot of apartments and they would be affordable, but a single family home a mile away may still gain value faster than inflation. Making the ownership of a single family home affordable is in contradiction with making that a good investment vehicle.
- civilized 5y ago
  It would be great if cryptocurrency moved people's irrational fetish for artificially scarce, low-risk, rapidly appreciating assets into the digital sphere. Then we could be rid of this curse in the real world, where it ruins lives and societies.
- tptacek 5y ago
  It doesn't ignore the contradiction; it acknowledges it very early on in the article, in a paragraph dedicated to the point. "Would my net worth suffer if housing was affordable?" the paragraph opens. "Yes."
  - rsj_hn 5y ago
    Yes, this is like a breath of fresh air. A lot of people think we have what seem to be intractable problems because a shadowy group is sobatoging The Popular Will. But the truth of the matter is we have intractable problems because there are tough trade offs, and having frank conversations about these trade offs is unpleasant, thus we focus on the Shadowy Group.
deleted 5y ago
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xnx 5y ago
This article presents no new insight into how you get existing (voting!) property owners to accept depreciation of their assets. My greatest hope for a technological solution is self driving cars which would reduce the duration and significance of travel times.
- ertian 5y ago
  That's not a fix, though. Reducing the pain of a commute would mean more people would move out to the suburbs, which would grow, which would add to the traffic. People are apparently willing to drive 1 hour each way in a normal car, which is a huge pain. I would assume they'd therefore be willing to be driven even further in a self-driving car. You'd end up with an equally unpleasant equilibrium.
  - xnx 5y ago
    I agree that people would be willing to put up with a longer commute in a self-driving car. This should have the effect of increasing home construction in the exburbs and lowering average housing costs overall.
haroldp 5y ago
> So why do I make an exception in this case, favoring the state government’s nullification of local government rules? I had this same reservation, but that is looking at it the wrong way. The US constitution's 1st amendment isn't central control, it is a human rights guarantee. Liberalizing restrictions on housing is likewise not central control, but shoring up property rights against local deprivation. Japan had a housing crisis in the 1980s, but they pulled themselves out of it by massively liberalizing zoning and other restrictions on home construction, at the national level. Today families earning median incomes in Tokyo can afford to buy homes. That is something not true of San Francisco, New York, London Paris, etc. https://archive.is/pVrex https://archive.is/pVrex
squabble 5y ago
I think we need to change our attitude towards money. People hurt each other without intending or realizing it, because it's hidden behind this abstraction called "money".
baron816 5y ago
> Would my net worth suffer if governments allowed more housing? Absolutely. This is the crux of the issue, not because it’s true, but because people believe it’s the case. The value of the house itself would fall, but the value of the land would still increase with more flexibility in how it’s used. An 1800 sf home is never going to be worth $5 million. At some point, people will make other sacrifices to not have to pay that. But I imagine that same lot could support a 10 unit building (just guessing). At $500k each, that property is now worth $5 mil, and each unit is comparatively affordable. Even if the property owner doesn’t turn it into a 10 unit complex, others that do would cause nearby single family lots worth more since they could be converted, or kept for a super rich guy. An underrated aspect is that most California leftists refuse to believe free market capitalism can solve the problem, regardless of the evidence. I think there are fewer people who are just protecting their property values than we think. We need to start talking about the issue with that in mind if we want things to change.
- harambae 5y ago
  >An 1800 sf home is never going to be worth $5 million. https://www.zillow.com/homedetails/181-Fremont-St-UNIT-58A-San-Francisco-CA-94105/249665545_zpid/ https://www.zillow.com/homedetails/181-Fremont-St-UNIT-58A-S...
naveen99 5y ago
The value in land is just a proxy for a configuration of people. You move the people, you move the value.
yellowapple 5y ago
The proposal here - eliminate restrictions on building housing - is a good one, but only addresses half of the problem. The other half of the problem is highlighted here: > Many people believe that the main reason housing is expensive in coastal California is that land is so scarce. As the saying goes, “They’re not making any more land.” That view is plausible. It’s also incorrect. Turns out this take is itself incorrect. Land is scarce (more precisely, it has inelastic supply), and the reasoning for deeming the scarcity argument to be "incorrect" - that land permitted for building sells for a higher price than land not permitted for building - only demonstrates that some land is being artificially suppressed in value due to zoning restrictions, and says nothing about land scarcity's actual contribution to housing costs. It doesn't take a top-notch economist to figure out that if two identical houses on identically-sized plots in SF and Bakersfield go for $1m and $250k, respectively, the only remaining variable there is the demand for that land relative to its supply. For this reason, the other half of the solution is to pair that eradication of zoning restrictions with a reworked property tax structure that incentivizes denser construction and penalizes hoarding empty/underdeveloped land (or otherwise treating land as a speculative asset). Such a concept happens to have a name: a land value tax. Replacing traditional property taxes with LVT (and, ideally, replacing other taxes like income and sales taxes with LVT, too, but non-land property taxes are the relevant one in this context) and loosening zoning restrictions both complement one another and together disincentivize the land-speculation-driven NIMBYism that dominates the current housing cost spiral in places like California.
xx511134bz 5y ago
Vienna is doing a nice job, building new "old town" areas with 75% affordable units. [Bloomberg] Vienna's Radical Idea? Affordable Housing For All https://www.youtube.com/watch?v=41VJudBdYXY https://www.youtube.com/watch?v=41VJudBdYXY

47 points by jseliger 5y ago

A more appropriate title is something like "How to make housing more affordable in California." Housing is plenty-affordable in most of the country, even with the latest boom.

zip1234 5y ago
In almost any area with high demand, the prices are almost as high as California. The same zoning restrictions are everywhere.
- throwthere 5y ago
  CA's this weird place with an amazing climate and lots of high-paying jobs. You can look at a similarly booming place like Austin, and still find affordable housing within a 1 hour drive anywhere. Same with Chicago, Atlanta, Boston, Philadelphia... Even NYC has affordable housing within a 1 hour commute.
  - BigRedDog1669 5y ago
    Where can you find affordable housing within 1 hour of Boston or New York? (That you can actually commute to those cities within an hour during normal working hours)
c0nducktr 5y ago
Most of the country is empty space.

deleted 5y ago

[deleted]

netfl0 5y ago

Nice to see a fresh perspective. High density appears to create fragility. People were fleeing from cities during covid.

alistairSH 5y ago
True, but an epidemic like COVID is generally a once in a lifetime (or less) occurrence. Probably best not to allow it to drive housing policy.
coryrc 5y ago
Tiny pools of high-priced, high-density studios and single bedrooms in a country where restaurants are forced to close for years now? Yeah, rents dropped maybe 20% for a year. Widespread, affordable, high-density 3- & 4-bedroom units in South Korea where people will wear masks? Still occupied.
- cyber_kinetist 5y ago
  Um, you might want to erase the “affordable” in your last sentence. South Korea also has a pretty serious housing bubble issue right now, it is really hard for a newly married couple to get a Jeonse [1] on an apartment in Seoul (unless your parents are rich). And you really need to be careful when comparing South Korea’s housing market with other countries. It has its own unique properties that would probably make no sense at all to outsiders at first glance. [1] https://en.wikipedia.org/wiki/Jeonse https://en.wikipedia.org/wiki/Jeonse
  - coryrc 5y ago
    It seems the whole world is getting worse in that regard...

hellbannedguy 5y ago

Prevent corporations, non-citizens, from buying up realestate could be a start. Heavily taxing the third piece of realeste one adult buys. (A guy buys a home, and a getaway pad, fine. Tax the third property a lot to avoid homes being being accumulated.) Put a unoccupied tax on vacant realestate too.

MattGaiser 5y ago
This makes home ownership more affordable. Anyone want to rent? Well, your market just got a lot smaller.
- kennywinker 5y ago
  Landlords don't provide housing, construction workers do. Build houses, let people own them. For every 1 person who buys a vacation property, there'll likely be 10 who buy a second rental income property anyway, so I doubt that this would actually make renting that difficult.
  - Guzba 5y ago
    Hm, I get your point but you've never wanted to live somewhere for just a few years? Renting is great for many circumstances. Huge transaction fees and risks related to owning are not great if you're not looking to settle down longer-term. The idea this need is covered by a bunch of people owning just one property seems stretched. What is truly wrong with meeting a need more efficiently?
    - kennywinker 5y ago
      I feel pretty confidant that the ability to move somewhere for a couple years would be safe. Rental markets can be handled by multi-tenant housing (suites and laneway houses), shared living spaces, socialized student housing, and private second home rentals, and of course just buying a house for a couple years... > Huge transaction fees and risks related to owning When houses cost millions, yes this is true. But if we got house prices down to an actually affordable level, this would not be such a concern. If I decided today to move to winnipeg for a couple years, houses are so cheap (at least compared to what I'm used to) that I'd strongly consider just buying a house or a condo for the time I was there.

kennywinker 5y ago

Libertarian organization delivers libertarian hot-take. No surprise there. It's tempting to believe! We all know the old story of the "law" of supply and demand. And there may be specific places where there is actually too much blocking new construction. Where I live, Vancouver, we have plenty of new construction - and have been pretty developer friendly for decades now. The problems I've seen with it are 1. it doesn't bring down prices and 2. all that gets built are luxury homes for the rich and condos for everyone else. Meanwhile developers and investors have gotten very rich off it. As a recent-ish example, the olympic village development sat mostly empty for YEARS, held by investors. There was no noticeable dip in prices when that development came online. Long story short - yeah, we need to build more homes - but not using laissez-faire capitalism. As far as I can see in my lifetime that hasn't worked. Large scale socialized row-housing developments are what I'd like to see tried next.

mfcl 5y ago
Why do you think it does not work? And what would you do instead?
- kennywinker 5y ago
  End real estate purchased for investment, rather than housing. Socialized row housing.
bryanlarsen 5y ago
BC has added three times as many people as housing units in the last decade. So there definitely has not been plenty of new housing built.
tptacek 5y ago
This is essentially an argument that well-educated professional class "socialists" use to justify the protection of their own home values while paying lip service to a housing fix that clearly will not happen. It envisions two kinds of residents: those who will compete up the the cost of houses, and those who will be placed in state-run housing.

kwertyoowiyop 5y ago

Agreed. Just start looking in the Bay Area and you’ll see lots of parcels (either under-utilized or entirely empty) of various sizes that could be used for an apartment or house. It’s nice to see the apartments being built along El Camino now, and a lot more could be done.

rmk 5y ago

It will be interesting to see what the recent legislation will do to California housing prices. I'm not entirely sure if there are enough large lots to sustain multiplexes on them. But even if people start building duplexes, it may help ease the lack of inventory.

alistairSH 5y ago
I haven’t seen it mentioned, but does the recent legislation override HOA contracts? Not sure about CA, but most homes built since the mid-70s near DC have HOAs of some sort.
- rmk 5y ago
  I have seen developments in Virginia, in the middle of nowhere or along important highways, with houses built in clusters. I did not realize they all had HOAs. I do not know the details of the legislation, but it is my understanding that the owner of a lot can raze the house and seek permits to put up up to four houses, depending on lot size. And the permit process will be on an 'as-of-right' basis, i.e., your neighbors can't block you with the CEQA nonsense: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB9 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml... Here is the relevant excerpt: The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment. CEQA does not apply to the approval of ministerial projects. This bill, by establishing the ministerial review processes described above, would thereby exempt the approval of projects subject to those processes from CEQA.

lordnacho 5y ago

Has anyone suggested reducing the amount of credit available? That won't increase the number of houses, but people compete on how much they can pay, and if they can pay less houses will cost less.

gizmo686 5y ago
That would make homes cheaper, but not more affordable. Since the money to buy homes becomes more expensive you end up with about the same monthly cost.
- foogazi 5y ago
  So which is it, are homes more expensive now or not? Interest rates have gone from 10% to 2.5% and housing prices went up - it’s the same thing

mrfusion 5y ago

It’s so strange everyone makes this out to be a complicated problem. We just need to build more.

bananamerica 5y ago
Build more what? Where? How?
- tptacek 5y ago
  Housing. On SFBA real estate. By drastically increasing the number of permits issued.
- anonuser123456 5y ago
  Houses. Everywhere. Using labor.
  - fighterpilot 5y ago
    High-rise apartments, ideally.
- wpasc 5y ago
  Houses, apartment buildings, government housing. Everywhere that has high housing demand with square footage prices far exceeding the national average. Reduce the governmental burdens to building new housing such as easing impact studies, reducing the influence of local zoning boards, and cutting unnecessary red tape (I don’t mean go to 0 government rules but we have a severely onerous amount now especially in the most popular places).
- GaryTang 5y ago
  Housing. On land. With our hands. Unfortunately, the single greatest hurdle is bureacracy which requires layers upon layers of paperwork to build a single thing. On top of that, the taxes don’t help pricing the asset either. Nor do the additional 1000s of pages of regulations that prevent laypeople from making money on that housing.

zz865 5y ago

I've been looking at Singapore which is interesting with most people living in pseudo-public housing. The govt owns the apt buildings and people buy 99 year leases ( which you can sell). The idea that you can't own land/space outright, just for 99 years actually makes a lot of sense. You get to live there for your whole life, you aren't buying some intra-generational asset that will get passed to your kids & grandchildren etc. As a result the condos are much cheaper. I think we could do the same with land. You can't buy a yard or farm, you just buy a 99 year lease after which it returns to the city or state.

kory 5y ago
Completely disagree. If I buy a piece of land and spend to make improvements, I’d expect to sell at a price that justifies the investment or let my kids inherit my life’s work. Land leases massively disincentivize making improvements to land or structures, because it’s not even yours. What a great way to ensure the quality of our neighborhoods goes down over time.
- zz865 5y ago
  We're on this thread here to make housing more affordable, not to ensure your kids get your investment. Actually with a 99 year lease they probably will get it, just not your grandkids.
  - kory 5y ago
    Property improvements on personal residences aren't a financial investment. They usually don't have a high, or even positive, rate of return. Rather, they're improvements to your home and your quality of life. They're also your kids' home, and could be their kids' home, and so on. Government bureaucrats should not have free control over those improvements after 100 years. Making all land rentable clearly isn't about encouraging development and affordability; a land value tax could do that. Making all land only rentable is clearly a scheme to allow government to steal valuable land from the current owners who otherwise could afford the taxes and wouldn't sell. Many NIMBYs don't even care about their home value (unless they've purchased recently and don't want to be underwater on their mortgage). If you actually talk to most homeowners, especially the long term ones, they care much more about the neighborhood and home they've built so hard to create. Seeing a life of memories razed for concrete and glass townhomes/towers isn't an easy pill for anyone to swallow. All that said, we do need to upzone for affordability. But all of this talk of "we aren't protecting your investment" is misguided, that isn't what single family homeowners care about.

hn_throwaway_99 5y ago

I mean, the article gets at this at the end, but these days I don't think there is much disagreement in the root causes: 1. Yes, if you want more affordable housing, you need to make it much easier to build homes. 2. The root cause of current housing crises, though, is that once any individual buys a home in an area, they immediately then have a strong economic incentive to make building new homes as difficult as possible (assuming they already live in a built-up area). So the question is how you fix number 2, because in virtually any area home owners will have outsized political power. So the article talks about this somewhat at the end: removing local control over housing policy and giving more of that power to the state, which I agree is one way to address the issue. But I still think the fundamental problem that needs more attention is how do you adjust (or nullify) incentives so that existing homeowners are prevented from making the house permitting process more difficult for everyone else.

wwweston 5y ago
I’d also say homeowner economic incentives don’t even cover it. You buy into a community as it is — that’s what you saw the benefit of investing in not only economically but socially and in terms of years of your life. You may well be particular about its social, architectural, and natural features and resist change to them. If that’s true, then affordable housing pushes that address individual incentives also need to address incentives around “social equity.”
Lammy 5y ago
Regarding number 2, I can’t help but notice the inflection point of homeowner equity is ~1965, right in between the 1964 and 1968 civil rights statutes. Smells like “segregation with extra steps” to me: https://fred.stlouisfed.org/series/OEHRENWBSHNO https://fred.stlouisfed.org/series/OEHRENWBSHNO To the crowd at large: I would love to learn more about what exactly changed during this time period to change peoples’ incentives on such a massive scale. Was there some change in law/regulations to make housing a “safer” investment for people, besides just tanking the interest rates for other types of investments like is all over the news these days? Links or hints would be very appreciated :)
ItsMonkk 5y ago

TradingPlaces 5y ago

Seattle had rent inflation at 7% a year. See if you can tell on this chart when they passed the law allowing higher density on some single-family lots https://fred.stlouisfed.org/graph/fredgraph.png?g=H4YO https://fred.stlouisfed.org/graph/fredgraph.png?g=H4YO

nostrademons 5y ago
I'm curious which law you speak of. From the chart, it looks like something happened in 2018, but when I googled [seattle higher density on sfh lots] or [seattle single family upzone], I only got articles from this year saying that such legislation was being considered.
- TradingPlaces 5y ago
  MHA passed late 2017. Upzoned 27 neighborhoods

SaberTail 5y ago

This ignores the inherent contradiction in current housing policy: housing cannot be both a good investment and affordable. If housing is a good investment, that means it's appreciating faster than inflation, which will make it increasingly unaffordable as time passes. If housing is affordable, and remains so, then it is not appreciating enough to make a good investment. For decades, governments have made policies to make housing into a good investment. Things like government guarantees on mortgages to reduce the interest rate, mortgage interest deductions, property tax limits, and (yes) restricting the supply of housing through permits and zoning are all policies that serve to make housing a good investment, at the expense of affordability.

ch4s3 5y ago
Housing is multiple markets even within narrow geographic bounds. We could produce a lot of apartments and they would be affordable, but a single family home a mile away may still gain value faster than inflation. Making the ownership of a single family home affordable is in contradiction with making that a good investment vehicle.
civilized 5y ago
It would be great if cryptocurrency moved people's irrational fetish for artificially scarce, low-risk, rapidly appreciating assets into the digital sphere. Then we could be rid of this curse in the real world, where it ruins lives and societies.
tptacek 5y ago
It doesn't ignore the contradiction; it acknowledges it very early on in the article, in a paragraph dedicated to the point. "Would my net worth suffer if housing was affordable?" the paragraph opens. "Yes."
- rsj_hn 5y ago
  Yes, this is like a breath of fresh air. A lot of people think we have what seem to be intractable problems because a shadowy group is sobatoging The Popular Will. But the truth of the matter is we have intractable problems because there are tough trade offs, and having frank conversations about these trade offs is unpleasant, thus we focus on the Shadowy Group.

deleted 5y ago

[deleted]

xnx 5y ago

This article presents no new insight into how you get existing (voting!) property owners to accept depreciation of their assets. My greatest hope for a technological solution is self driving cars which would reduce the duration and significance of travel times.

ertian 5y ago
That's not a fix, though. Reducing the pain of a commute would mean more people would move out to the suburbs, which would grow, which would add to the traffic. People are apparently willing to drive 1 hour each way in a normal car, which is a huge pain. I would assume they'd therefore be willing to be driven even further in a self-driving car. You'd end up with an equally unpleasant equilibrium.
- xnx 5y ago
  I agree that people would be willing to put up with a longer commute in a self-driving car. This should have the effect of increasing home construction in the exburbs and lowering average housing costs overall.

haroldp 5y ago

> So why do I make an exception in this case, favoring the state government’s nullification of local government rules? I had this same reservation, but that is looking at it the wrong way. The US constitution's 1st amendment isn't central control, it is a human rights guarantee. Liberalizing restrictions on housing is likewise not central control, but shoring up property rights against local deprivation. Japan had a housing crisis in the 1980s, but they pulled themselves out of it by massively liberalizing zoning and other restrictions on home construction, at the national level. Today families earning median incomes in Tokyo can afford to buy homes. That is something not true of San Francisco, New York, London Paris, etc. https://archive.is/pVrex https://archive.is/pVrex

squabble 5y ago

I think we need to change our attitude towards money. People hurt each other without intending or realizing it, because it's hidden behind this abstraction called "money".

baron816 5y ago

> Would my net worth suffer if governments allowed more housing? Absolutely. This is the crux of the issue, not because it’s true, but because people believe it’s the case. The value of the house itself would fall, but the value of the land would still increase with more flexibility in how it’s used. An 1800 sf home is never going to be worth $5 million. At some point, people will make other sacrifices to not have to pay that. But I imagine that same lot could support a 10 unit building (just guessing). At $500k each, that property is now worth $5 mil, and each unit is comparatively affordable. Even if the property owner doesn’t turn it into a 10 unit complex, others that do would cause nearby single family lots worth more since they could be converted, or kept for a super rich guy. An underrated aspect is that most California leftists refuse to believe free market capitalism can solve the problem, regardless of the evidence. I think there are fewer people who are just protecting their property values than we think. We need to start talking about the issue with that in mind if we want things to change.

harambae 5y ago
>An 1800 sf home is never going to be worth $5 million. https://www.zillow.com/homedetails/181-Fremont-St-UNIT-58A-San-Francisco-CA-94105/249665545_zpid/ https://www.zillow.com/homedetails/181-Fremont-St-UNIT-58A-S...

naveen99 5y ago

The value in land is just a proxy for a configuration of people. You move the people, you move the value.

yellowapple 5y ago

The proposal here - eliminate restrictions on building housing - is a good one, but only addresses half of the problem. The other half of the problem is highlighted here: > Many people believe that the main reason housing is expensive in coastal California is that land is so scarce. As the saying goes, “They’re not making any more land.” That view is plausible. It’s also incorrect. Turns out this take is itself incorrect. Land is scarce (more precisely, it has inelastic supply), and the reasoning for deeming the scarcity argument to be "incorrect" - that land permitted for building sells for a higher price than land not permitted for building - only demonstrates that some land is being artificially suppressed in value due to zoning restrictions, and says nothing about land scarcity's actual contribution to housing costs. It doesn't take a top-notch economist to figure out that if two identical houses on identically-sized plots in SF and Bakersfield go for $1m and $250k, respectively, the only remaining variable there is the demand for that land relative to its supply. For this reason, the other half of the solution is to pair that eradication of zoning restrictions with a reworked property tax structure that incentivizes denser construction and penalizes hoarding empty/underdeveloped land (or otherwise treating land as a speculative asset). Such a concept happens to have a name: a land value tax. Replacing traditional property taxes with LVT (and, ideally, replacing other taxes like income and sales taxes with LVT, too, but non-land property taxes are the relevant one in this context) and loosening zoning restrictions both complement one another and together disincentivize the land-speculation-driven NIMBYism that dominates the current housing cost spiral in places like California.

xx511134bz 5y ago

Vienna is doing a nice job, building new "old town" areas with 75% affordable units. [Bloomberg] Vienna's Radical Idea? Affordable Housing For All https://www.youtube.com/watch?v=41VJudBdYXY https://www.youtube.com/watch?v=41VJudBdYXY