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Yes you're absolutely right, housing cannot be both a good investment and affordable by definition. Time to give up the narrative. It doesn't make sense. I've

Yes you're absolutely right, housing cannot be both a good investment and affordable by definition. Time to give up the narrative. It doesn't make sense. I've mentioned this before but it's worth saying again: 1 square foot of housing is approximately the same price - adjusted for inflation - as it was in the 1970s, on average. [1] There's a few caveats however. (1) New houses are 2x bigger on average than they were back then, and the average American family is smaller [1]. (2) City councils, and by extension zoning rules, in major metros preclude construction meaning that supply cannot meet demand. This benefits existing landowners to the detriment of both the next generation and renters. San Francisco is a prime example [2] - SF needed to build 6X as many houses as it did between just 2012 and 2016 just to meet the job growth in the area. This pushes the price per square foot inside metros up way above what they would otherwise be. (3) Zoning rules outside of major metros, including setback rules and minimum size rules, parking rules, etc, make houses outside metros much bigger. Also, expectations have shifted. This pushes the square footage of suburban homes up - and with it the total price. (4) This applies mostly in the last few years - but lower interest rates make houses that are more expensive much more affordable on a monthly basis, which is totally fine as most folks end up with a 30 year fixed rate mortgage. A drop from 3% to 2% makes a house about 25% more expensive cost the same amount per month. Yes, it increases down payments, but down payments tend to be up to 20% of the price - so an increase not of 25% but 4%. So what can we do? Easiest thing is state-wide or federal zoning rules. Build up. Allow smaller homes. [edit](Stop with the mandatory parking.) In Japan, supply and demand meet, and a new 3 bedroom house in Tokyo is like 400K USD [edited for current data] - right around the cost of construction. This is thanks to their federal zoning rules. [3] [1] https://fee.org/articles/new-homes-today-have-twice-the-square-feet-per-person-as-in-1973/ https://fee.org/articles/new-homes-today-have-twice-the-squa... [2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage [3] https://marketurbanism.com/2019/03/19/why-is-japanese-zoning-more-liberal-than-us-zoning/ https://marketurbanism.com/2019/03/19/why-is-japanese-zoning...

wesapien 5y ago
How do you with prime real estate markets like NYC, Bay Area, LA, etc? I would assume similar highly coveted areas will be exception to the rule. What about the Japan housing model? Apparently they don't have these property bubbles anymore.
deleted 5y ago
[deleted]
robocat 5y ago
> lower interest rates make houses that are more expensive much more affordable on a monthly basis, which is totally fine as most folks end up with a 30 year fixed rate mortgage Absolutely false in the long term due to feedback, although it is true in the short term. With lower interest rates, people bid up the price of houses because they can afford to spend more on their mortgage. The amount spent on mortgage repayments trends towards the same figure as always (approximately as much as your wages allow). I believe houses are a prime mover of the middle class economy, because it is something most people are willing to “invest” a lot of time working to achieve owning the property they want (often status driven).
- arcticbull 5y ago
  I think we might be in agreement on this - I didn't mean that a house 25% more expensive was more affordable period. I meant it was almost equally affordable after it normalizes. This is a fact a lot of articles and graphs gloss over when they compare simply the top-line numbers.
bazooka_penguin 5y ago
I'm inclined to think a lot of people only live near cities because 1) they work in it and have no choice but to live nearby, otherwise suffer a nightmarish commute and 2) it's the only city near them. Why isn't building new, smaller cities a viable option? Surely building something from scratch also comes with advantages, like being able to plan and build infrastructure optimally from the start, rather than trying to retroactively update ancient infrastructure piecemeal. If we're going to go with a state or federal level approach anyway why funnel the money into existing cities?
- xapata 5y ago
  I suppose a single example can't contradict "a lot of people," but I am one such person. I live in the city, because I like cities.
  - elymar 5y ago
    Same here. I pay a premium to live in NYC even though I work remote. I love the vibe and culture.
- jacobolus 5y ago
  > why funnel the money into existing cities? Among other reasons, we should because the existing cities are the most resource-efficient and lowest-environmental-impact living places we have at scale, and typically subsidize the infrastructure of other places.
  - CalRobert 5y ago
    True, though US "cities" are generally asphalt hellscapes. Design something like Houten, or let Culdesac loose to build a whole city, and now you're talking.
    - taza999 5y ago
      1 giant apartment complex? Culdesac is not the answer.
jacobolus 5y ago
SF board of supervisors just voted unanimously against turning an old barely used church into 300 small shared-kitchen studio apartments, because it’s not “family friendly” enough. https://www.sfchronicle.com/bayarea/article/S-F-supes-say-no-to-316-micro-homes-in-16512303.php https://www.sfchronicle.com/bayarea/article/S-F-supes-say-no... (This will of course instead force 300 people who would live in those to awkwardly pair up and live as unrelated roommates in 150 scattered 2-bedroom flats, taking them off the market and contributing to high rents throughout the Bay Area.) The board also just voted against turning a parking lot into a 500-unit apartment building, citing the recent Florida condo collapse as justification, and worrying that it will “gentrify” the corner of 6th and Market (!). https://www.sfchronicle.com/sf/article/State-investigating-S-F-s-decision-to-reject-16573167.php https://www.sfchronicle.com/sf/article/State-investigating-S...
- darawk 5y ago
  Imagine what has to be going on in your mind that you believe turning non-housing into housing will gentrify something.
  - noduerme 5y ago
    Asking as someone who lived there until the first dot com crash: Does anyone actually need to live in San Francisco anymore?
    - novok 5y ago
      Lets get more meta, does anyone ever need to live anywhere in particular /s
      - eloisant 5y ago
        Well, it might not be true for the tech workers roaming HN, but there are still people who are forced to live in a big city to get a job!
        5y ago
wiseowise 5y ago
> In Japan, supply and demand meet, and a new 3 bedroom house in Tokyo is like 400K USD [edited for current data] - right around the cost of construction. Uh uh, apartment, not a house. There's a huge difference.
- Broken_Hippo 5y ago
  It doesn't matter, honestly. You still own it. Owning apartments is normal in more crowded areas - like tokyo. I'm pretty sure apartments greatly outnumber houses in most of Tokyo. And sure, there is a difference, but it is only minor as we are still speaking of living spaces that you own instead of rent.
  - wiseowise 5y ago
    Own as in own a garage, I wouldn't want to live there though.
  - indymike 5y ago
    In the most of the US you pay rent to the owner of the apartment you live in. A partitioned building where you own the unit you live in is usually referred to as a "condominium" or "condo".
    - eloisant 5y ago
      Yeah that sounds pretty different from other countries like France or Japan where there is no such distinction. When a developer builds a housing building, they sell the apartments to people who will either live there or rent it to someone else. Then when the owners sell their apartment later, it can go from a resident owner to an investor, or the other way around. As a result there is a mix of owners and renters in any condominium.
    - Broken_Hippo 5y ago
      I understand this completely - English is my mother tongue and I'm American. People do own apartments, especially in larger cities. A lot of folks don't call them condos: It depends on where you live and what the developer decided to call them. In fact, my idea of a "condo" isn't an apartment in a high rise or even half of a house you own, but rather row houses, mostly with a front and back yard (basing this off of condos in places like Kokomo, Indiana and Nashville, Tennessee). Owner keeps up inside, they keep up outside. Renting is not owning an apartment: You can renovate an apartment you own, but not a rental. This is much the same as renting a house instead of owning it.
AmericanChopper 5y ago
> housing cannot be both a good investment and affordable by definition. Real estate is the only asset class where this isn’t true. The existence of the mortgage, which is one of the most unique debt instruments available to the general public, means that house price inflation only needs to exceed interest rates about about 0.6% to beat stock market returns.
- loeg 5y ago
  I think you're missing the core idea. For one party to see returns exceeding interest, another party has to pay for that (exponential) rate of return. It's unaffordable for the second party. These prices compound, exponentially, and as a result younger generations spend much more of their money in wealth transfers to older landowners. It's unsustainable unless the wages of younger generations also start to rise at similar rates, which isn't happening.
  - AmericanChopper 5y ago
    > These prices compound, exponentially, and as a result younger generations spend much more of their money in wealth transfers to older landowners. This is just factually untrue. House prices do not grow exponentially. The rate at which they grow goes up and down, but it’s never been exponential. The entire premise of your argument is indisputably incorrect.
- nfzOndjy 5y ago
  Can you elaborate that? Under what assumptions will real estate beat what benchmark?
  - AmericanChopper 5y ago
    Real estate is the only asset class where you can very easily get 10-20x leverage, and at rates that are only modestly above the risk free rate. If you used $1,000,000 to buy $20,000,000 worth of property in San Francisco, and you wanted to get a 15% annual return to beat the market, the numbers would look like this: You’d be paying around $600,000 in interest, say you’ve got another $100,000 in expenses, and you want to get $150,000 for your return. That’s $850,000 that needs to come from somewhere, in San Francisco I think the rent to price ratio is about 1:50, so that’s $400,000 in rent, and the remaining $450,000 needs to come from house prices increasing. So to beat the market your property assets needs to appreciate by 2.25%, or about what the fed targets inflation to be. This is only possible because the mortgage is a very unique debt instrument. As far as access to cheap debt goes, it is comparable only to the highest credit corporate and sovereign bonds. The only type of debt that a regular consumer has access to, that is somewhat comparable, are subsides student loans.
noduerme 5y ago
>> (1) New houses are 2x bigger on average than they were back then, and the average American family is smaller [1]. This is good, because it means people can afford more. >> (2) City councils, and by extension zoning rules, in major metros preclude construction This is good because unregulated growth is a net drain on society. No one wants to buy a house if the property next door can be turned into a 30 story apartment building. More people own property now than at any time in history. How about that? Stop making babies, right now, and there will be plenty of space for everyone. I don't have babies, I own a house, everyone who has babies wants not just to pollute the world with their offspring and tax me to pay for their spawn's upbringing, they also think they deserve free property. Just don't have babies and problem solved.
- fxtentacle 5y ago
  Historically speaking, that kind of argument tends to end in the young generation executing the elderly to forcibly make space.
  - noduerme 5y ago
    Hah, is this the best passive-aggressive threat gen Z can hint at? You're gonna commit some kind of genocide of old people? Wow. I guess I wouldn't be surprised. We're in a funny moment, because my generation didn't want children; also, we assumed (wrongly) that not wanting to pollute the world with children was a sound ecological and moral decision. The boomers older than us had kids en masse and let them be raised by wolves (or Facebook). So gen x was basically skipped and now is being told what to do by the spoiled spawn of those hellish narcissists. The torch has been passed to this generation of hellicopter-raised, angry, historically ignorant (viz. your comment) whiners about micro-aggression who casually reference mass murder as a possible solution to stuff they don't like on the internet. Yeah, there are examples of generations like yours massacring their elders, but there's no precedent for one so incredibly passive-aggressive doing so.
    - jcpham2 5y ago
      Whoa there, simmer down whipper snapper
xg15 5y ago
> 1 square foot of housing is approximately the same price - adjusted for inflation - as it was in the 1970s, on average. Average over what, though? I'd assume that 1sq in a dense metropolitan quarter in high demand goes for a lot more than 1sq in a poor neighborhood or in the middle of nowhere. The global average doesn't really mean anything except "somewhere in the US there is still affordable housing". Most critics of rising housing prices that I know of aren't arguing that housing is becoming unaffordable everywhere but that it's becoming unaffordable in high-density places where housing would be needed. You acknowledge this in: > This pushes the price per square foot inside metros up way above what they would otherwise be. Also shouldn't actions include at least having a look at building speculation in high-density areas?
- noduerme 5y ago
  >> the middle of nowhere. So as a tech worker who's lived in the "middle of nowhere" and worked remotely for 20 years, why the hell is anyone paying a premium to live in San Francisco now?
  - xg15 5y ago
    Different lifestyles and requirements. No everyone is a tech worker who can work remotely. Maybe covid now changes this now, but the ability to have stores and RL venues without having to drive will stay in demand, I' pretty sure.
    - noduerme 5y ago
      Yeah, RL venues and stores will always draw people to the cities. This should be actually a cheap, cool thing for young people like it was in New York or San Francisco in the 60s, or the 80s. It probably will be like that about 20 years from now, when it becomes "cool" to live in a city again. We were so close to an urban renaissance... the period from 2000 until covid was the best time for urban centers and downtowns since the late 19th century, before trolley lines and buses and cars moved everyone out. I thought we were centralizing and going to a walkable, car-less future. Covid did change all that, because without office workers there's no lunch crowd; with no lunch crowd there are no restaurants; with no restaurants there are no hipsters wanting to live downtown (they alone can't sustain the restaurants). Then you have the riots and the meth population and everything boarded up. We're in for 20 years before downtowns recover as a "hip" zone. The thing is, RL venues are important, but they do exist outside of San Francisco. Increasingly, very little exists in the urban cores, and yet the prices for rent are still insane.
8eye 5y ago
what if some people want a bigger house because they want bigger family though? i guess some areas would have to be zoned for people who plan to have more kids than 2, i couldn't imagine raising a family of 5 in a 2-3 bedroom house, i was raised in a big family. 10 kids. so a bigger house came in handy
- mastax 5y ago
  Buy/build a bigger house? The point is to eliminate restrictive zoning, not replace it with new restrictions that only allow tiny houses.
mindslight 5y ago
Your (1) and (4) are assuming a direction of causality. Alternatively: (4) Monthly payments on new mortgages are essentially fixed for any point in time. A drop in interest rates from 3% to 2% makes housing asset prices 25% more expensive, and along with them downpayments, real estate taxes, and the amount required to pay mortgages off early. (1) In order for a house to keep up with market appreciation, it has to be a desirable to the future "average buyer". Monthly payments are relatively fixed, less bidding competition for land outside of metro areas means that the feedback effect in my (4) isn't as strong, and so a bit more money goes into the structure.
nicoffeine 5y ago
In addition to your points here, I found the hypothesis below very interesting. In a nutshell, American governments are incentivized to zone for expensive land that doesn't require much infrastructure. So we get giant, sparse suburbs and institutional opposition to affordable housing because that reduces the tax base. 'Local German officials, like local leaders everywhere, seek bigger budgets to provide more and better services to their constituents. What’s different about Germany is that the way to get bigger budgets is to increase local populations. And, as Professor Buettner says, “Ultimately, to get people, municipalities will need to support housing.” The result is a system of incentives that is the opposite of “fiscal zoning”—the US practice of zoning land in ways that maximize local governments’ income and minimize their costs. In places with high sales taxes, such as Washington State, leaders zone more land for shopping centers. In places where residential property taxes are capped, such as California, they zone less land for homes and more for offices. In affluent suburbs, they often zone land for houses on large lots, excluding low-income people. Maximizing property values is such a central concern of local government in the United States that Dartmouth economist William Fischel developed the notion into an entire political theory. His “homevoter hypothesis” holds that local governments are almost single-mindedly focused on maximizing real estate values, because homeowners typically vote their home values in local elections. German jurisdictions gain financially by maximizing population, not house values, and because renters outnumber homeowners in the country, homevoters are not the dominant electoral force in local German elections. Renters are.' https://www.sightline.org/2021/05/27/yes-other-countries-do-housing-better-case-2-germany/ https://www.sightline.org/2021/05/27/yes-other-countries-do-...

wesapien 5y ago

How do you with prime real estate markets like NYC, Bay Area, LA, etc? I would assume similar highly coveted areas will be exception to the rule. What about the Japan housing model? Apparently they don't have these property bubbles anymore.

deleted 5y ago

[deleted]

robocat 5y ago

> lower interest rates make houses that are more expensive much more affordable on a monthly basis, which is totally fine as most folks end up with a 30 year fixed rate mortgage Absolutely false in the long term due to feedback, although it is true in the short term. With lower interest rates, people bid up the price of houses because they can afford to spend more on their mortgage. The amount spent on mortgage repayments trends towards the same figure as always (approximately as much as your wages allow). I believe houses are a prime mover of the middle class economy, because it is something most people are willing to “invest” a lot of time working to achieve owning the property they want (often status driven).

arcticbull 5y ago
I think we might be in agreement on this - I didn't mean that a house 25% more expensive was more affordable period. I meant it was almost equally affordable after it normalizes. This is a fact a lot of articles and graphs gloss over when they compare simply the top-line numbers.

bazooka_penguin 5y ago

I'm inclined to think a lot of people only live near cities because 1) they work in it and have no choice but to live nearby, otherwise suffer a nightmarish commute and 2) it's the only city near them. Why isn't building new, smaller cities a viable option? Surely building something from scratch also comes with advantages, like being able to plan and build infrastructure optimally from the start, rather than trying to retroactively update ancient infrastructure piecemeal. If we're going to go with a state or federal level approach anyway why funnel the money into existing cities?

xapata 5y ago
I suppose a single example can't contradict "a lot of people," but I am one such person. I live in the city, because I like cities.
- elymar 5y ago
  Same here. I pay a premium to live in NYC even though I work remote. I love the vibe and culture.
jacobolus 5y ago
> why funnel the money into existing cities? Among other reasons, we should because the existing cities are the most resource-efficient and lowest-environmental-impact living places we have at scale, and typically subsidize the infrastructure of other places.
- CalRobert 5y ago
  True, though US "cities" are generally asphalt hellscapes. Design something like Houten, or let Culdesac loose to build a whole city, and now you're talking.
  - taza999 5y ago
    1 giant apartment complex? Culdesac is not the answer.

jacobolus 5y ago

SF board of supervisors just voted unanimously against turning an old barely used church into 300 small shared-kitchen studio apartments, because it’s not “family friendly” enough. https://www.sfchronicle.com/bayarea/article/S-F-supes-say-no-to-316-micro-homes-in-16512303.php https://www.sfchronicle.com/bayarea/article/S-F-supes-say-no... (This will of course instead force 300 people who would live in those to awkwardly pair up and live as unrelated roommates in 150 scattered 2-bedroom flats, taking them off the market and contributing to high rents throughout the Bay Area.) The board also just voted against turning a parking lot into a 500-unit apartment building, citing the recent Florida condo collapse as justification, and worrying that it will “gentrify” the corner of 6th and Market (!). https://www.sfchronicle.com/sf/article/State-investigating-S-F-s-decision-to-reject-16573167.php https://www.sfchronicle.com/sf/article/State-investigating-S...

darawk 5y ago
Imagine what has to be going on in your mind that you believe turning non-housing into housing will gentrify something.
- noduerme 5y ago
  Asking as someone who lived there until the first dot com crash: Does anyone actually need to live in San Francisco anymore?
  - novok 5y ago
    Lets get more meta, does anyone ever need to live anywhere in particular /s
    - eloisant 5y ago
      Well, it might not be true for the tech workers roaming HN, but there are still people who are forced to live in a big city to get a job!
      - 5y ago

wiseowise 5y ago

> In Japan, supply and demand meet, and a new 3 bedroom house in Tokyo is like 400K USD [edited for current data] - right around the cost of construction. Uh uh, apartment, not a house. There's a huge difference.

Broken_Hippo 5y ago
It doesn't matter, honestly. You still own it. Owning apartments is normal in more crowded areas - like tokyo. I'm pretty sure apartments greatly outnumber houses in most of Tokyo. And sure, there is a difference, but it is only minor as we are still speaking of living spaces that you own instead of rent.
- wiseowise 5y ago
  Own as in own a garage, I wouldn't want to live there though.
- indymike 5y ago
  In the most of the US you pay rent to the owner of the apartment you live in. A partitioned building where you own the unit you live in is usually referred to as a "condominium" or "condo".
  - eloisant 5y ago
    Yeah that sounds pretty different from other countries like France or Japan where there is no such distinction. When a developer builds a housing building, they sell the apartments to people who will either live there or rent it to someone else. Then when the owners sell their apartment later, it can go from a resident owner to an investor, or the other way around. As a result there is a mix of owners and renters in any condominium.
  - Broken_Hippo 5y ago
    I understand this completely - English is my mother tongue and I'm American. People do own apartments, especially in larger cities. A lot of folks don't call them condos: It depends on where you live and what the developer decided to call them. In fact, my idea of a "condo" isn't an apartment in a high rise or even half of a house you own, but rather row houses, mostly with a front and back yard (basing this off of condos in places like Kokomo, Indiana and Nashville, Tennessee). Owner keeps up inside, they keep up outside. Renting is not owning an apartment: You can renovate an apartment you own, but not a rental. This is much the same as renting a house instead of owning it.

AmericanChopper 5y ago

> housing cannot be both a good investment and affordable by definition. Real estate is the only asset class where this isn’t true. The existence of the mortgage, which is one of the most unique debt instruments available to the general public, means that house price inflation only needs to exceed interest rates about about 0.6% to beat stock market returns.

loeg 5y ago
I think you're missing the core idea. For one party to see returns exceeding interest, another party has to pay for that (exponential) rate of return. It's unaffordable for the second party. These prices compound, exponentially, and as a result younger generations spend much more of their money in wealth transfers to older landowners. It's unsustainable unless the wages of younger generations also start to rise at similar rates, which isn't happening.
- AmericanChopper 5y ago
  > These prices compound, exponentially, and as a result younger generations spend much more of their money in wealth transfers to older landowners. This is just factually untrue. House prices do not grow exponentially. The rate at which they grow goes up and down, but it’s never been exponential. The entire premise of your argument is indisputably incorrect.
nfzOndjy 5y ago
Can you elaborate that? Under what assumptions will real estate beat what benchmark?
- AmericanChopper 5y ago
  Real estate is the only asset class where you can very easily get 10-20x leverage, and at rates that are only modestly above the risk free rate. If you used $1,000,000 to buy $20,000,000 worth of property in San Francisco, and you wanted to get a 15% annual return to beat the market, the numbers would look like this: You’d be paying around $600,000 in interest, say you’ve got another $100,000 in expenses, and you want to get $150,000 for your return. That’s $850,000 that needs to come from somewhere, in San Francisco I think the rent to price ratio is about 1:50, so that’s $400,000 in rent, and the remaining $450,000 needs to come from house prices increasing. So to beat the market your property assets needs to appreciate by 2.25%, or about what the fed targets inflation to be. This is only possible because the mortgage is a very unique debt instrument. As far as access to cheap debt goes, it is comparable only to the highest credit corporate and sovereign bonds. The only type of debt that a regular consumer has access to, that is somewhat comparable, are subsides student loans.

noduerme 5y ago

>> (1) New houses are 2x bigger on average than they were back then, and the average American family is smaller [1]. This is good, because it means people can afford more. >> (2) City councils, and by extension zoning rules, in major metros preclude construction This is good because unregulated growth is a net drain on society. No one wants to buy a house if the property next door can be turned into a 30 story apartment building. More people own property now than at any time in history. How about that? Stop making babies, right now, and there will be plenty of space for everyone. I don't have babies, I own a house, everyone who has babies wants not just to pollute the world with their offspring and tax me to pay for their spawn's upbringing, they also think they deserve free property. Just don't have babies and problem solved.

fxtentacle 5y ago
Historically speaking, that kind of argument tends to end in the young generation executing the elderly to forcibly make space.
- noduerme 5y ago
  Hah, is this the best passive-aggressive threat gen Z can hint at? You're gonna commit some kind of genocide of old people? Wow. I guess I wouldn't be surprised. We're in a funny moment, because my generation didn't want children; also, we assumed (wrongly) that not wanting to pollute the world with children was a sound ecological and moral decision. The boomers older than us had kids en masse and let them be raised by wolves (or Facebook). So gen x was basically skipped and now is being told what to do by the spoiled spawn of those hellish narcissists. The torch has been passed to this generation of hellicopter-raised, angry, historically ignorant (viz. your comment) whiners about micro-aggression who casually reference mass murder as a possible solution to stuff they don't like on the internet. Yeah, there are examples of generations like yours massacring their elders, but there's no precedent for one so incredibly passive-aggressive doing so.
  - jcpham2 5y ago
    Whoa there, simmer down whipper snapper

xg15 5y ago

> 1 square foot of housing is approximately the same price - adjusted for inflation - as it was in the 1970s, on average. Average over what, though? I'd assume that 1sq in a dense metropolitan quarter in high demand goes for a lot more than 1sq in a poor neighborhood or in the middle of nowhere. The global average doesn't really mean anything except "somewhere in the US there is still affordable housing". Most critics of rising housing prices that I know of aren't arguing that housing is becoming unaffordable everywhere but that it's becoming unaffordable in high-density places where housing would be needed. You acknowledge this in: > This pushes the price per square foot inside metros up way above what they would otherwise be. Also shouldn't actions include at least having a look at building speculation in high-density areas?

noduerme 5y ago
>> the middle of nowhere. So as a tech worker who's lived in the "middle of nowhere" and worked remotely for 20 years, why the hell is anyone paying a premium to live in San Francisco now?
- xg15 5y ago
  Different lifestyles and requirements. No everyone is a tech worker who can work remotely. Maybe covid now changes this now, but the ability to have stores and RL venues without having to drive will stay in demand, I' pretty sure.
  - noduerme 5y ago
    Yeah, RL venues and stores will always draw people to the cities. This should be actually a cheap, cool thing for young people like it was in New York or San Francisco in the 60s, or the 80s. It probably will be like that about 20 years from now, when it becomes "cool" to live in a city again. We were so close to an urban renaissance... the period from 2000 until covid was the best time for urban centers and downtowns since the late 19th century, before trolley lines and buses and cars moved everyone out. I thought we were centralizing and going to a walkable, car-less future. Covid did change all that, because without office workers there's no lunch crowd; with no lunch crowd there are no restaurants; with no restaurants there are no hipsters wanting to live downtown (they alone can't sustain the restaurants). Then you have the riots and the meth population and everything boarded up. We're in for 20 years before downtowns recover as a "hip" zone. The thing is, RL venues are important, but they do exist outside of San Francisco. Increasingly, very little exists in the urban cores, and yet the prices for rent are still insane.

8eye 5y ago

what if some people want a bigger house because they want bigger family though? i guess some areas would have to be zoned for people who plan to have more kids than 2, i couldn't imagine raising a family of 5 in a 2-3 bedroom house, i was raised in a big family. 10 kids. so a bigger house came in handy

mastax 5y ago
Buy/build a bigger house? The point is to eliminate restrictive zoning, not replace it with new restrictions that only allow tiny houses.

mindslight 5y ago

Your (1) and (4) are assuming a direction of causality. Alternatively: (4) Monthly payments on new mortgages are essentially fixed for any point in time. A drop in interest rates from 3% to 2% makes housing asset prices 25% more expensive, and along with them downpayments, real estate taxes, and the amount required to pay mortgages off early. (1) In order for a house to keep up with market appreciation, it has to be a desirable to the future "average buyer". Monthly payments are relatively fixed, less bidding competition for land outside of metro areas means that the feedback effect in my (4) isn't as strong, and so a bit more money goes into the structure.

nicoffeine 5y ago

In addition to your points here, I found the hypothesis below very interesting. In a nutshell, American governments are incentivized to zone for expensive land that doesn't require much infrastructure. So we get giant, sparse suburbs and institutional opposition to affordable housing because that reduces the tax base. 'Local German officials, like local leaders everywhere, seek bigger budgets to provide more and better services to their constituents. What’s different about Germany is that the way to get bigger budgets is to increase local populations. And, as Professor Buettner says, “Ultimately, to get people, municipalities will need to support housing.” The result is a system of incentives that is the opposite of “fiscal zoning”—the US practice of zoning land in ways that maximize local governments’ income and minimize their costs. In places with high sales taxes, such as Washington State, leaders zone more land for shopping centers. In places where residential property taxes are capped, such as California, they zone less land for homes and more for offices. In affluent suburbs, they often zone land for houses on large lots, excluding low-income people. Maximizing property values is such a central concern of local government in the United States that Dartmouth economist William Fischel developed the notion into an entire political theory. His “homevoter hypothesis” holds that local governments are almost single-mindedly focused on maximizing real estate values, because homeowners typically vote their home values in local elections. German jurisdictions gain financially by maximizing population, not house values, and because renters outnumber homeowners in the country, homevoters are not the dominant electoral force in local German elections. Renters are.' https://www.sightline.org/2021/05/27/yes-other-countries-do-housing-better-case-2-germany/ https://www.sightline.org/2021/05/27/yes-other-countries-do-...