7 ms·

Decades of under-building due to restrictive zoning laws will do that.

by harryh 5y ago

whimsicalism 5y ago
Yes, that - plus the rapid reversal of white flight to the suburbs among young people in the last 10-15 years (more of an east coast phenomena). It is both a demand and supply problem, but short of creating a Hukou system I don't see any solution but building.
- WarOnPrivacy 5y ago
  > the rapid reversal of white flight to the suburbs among young people in the last 10-15 years The massive buy-ups in West & Central FL have led to an unprecedented shortage in housing. Rentals get 400 applicants each day and people with money in the bank are facing homelessness. People without have little hope.
  - deleted 5y ago
    [deleted]
- nradov 5y ago
  Another solution would be encouraging economic development in other areas instead of cramming increasing numbers of people into a small number of geographically constrained cities.
  - whimsicalism 5y ago
    I think these returns to scale/density are somewhat intrinsic.
seanmcdirmid 5y ago
Do you have numbers to back that up? If anything, underbuilding came from a moribund housing market after 2008, as many left the industry and it took way too long to ramp up on talent when housing began to boom again (a lack of people skilled in building houses is still a problem). But I doubt this is an under building problem at all. Look at Seattle and the area, and there isn’t a shortage of new housing projects at all. They are mostly all luxury, which is the only way builders can make a profit on high land prices, and they sell very quickly regardless.
- faet 5y ago
  https://www.forbes.com/sites/graisondangor/2021/06/16/the-housing-shortage-is-worse-than-ever-and-will-take-a-decade-of-record-construction-to-fix-new-reports-say/?sh=33804ba49535 https://www.forbes.com/sites/graisondangor/2021/06/16/the-ho... The U.S. built on average 276,000 fewer homes per year between 2001 and 2020 compared to the period between 1968 and 2000, according to the report which was covered earlier by the Wall Street Journal. Had building continued at the same pace, there would be 5.5 million more units of housing, the report estimated. To make up the shortage, the NAR report says the U.S. would have to build 2.1 million homes each year for a decade—more than it built each year during the housing boom of the mid-2000s.
  - seanmcdirmid 5y ago
    Why are you comparing a 19 year period to a 32 year period? Ah, I see it is a per year measure. Well, it isn’t weird that land runs out for new subdivisions. What is left is to build more dense (replace single family housing with apartments or town homes). Still, why is it zoning per se that is the problem rather than just the market? They have the same pricing problems elsewhere in countries with building booms (eg China).
    - sigstoat 5y ago
      > Still, why is it zoning per se that is the problem rather than just the market? dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted. > What is left is to build more dense (replace single family housing with apartments or town homes). yeah, that's exactly the thing that's banned in very many places where it would be most useful.
      - seanmcdirmid 5y ago
        > dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted. But where they are permitted, housing prices are still high. Higher even, like NYC and much of New Jersey near NYC. Is there a good example where increased density has led to lower prices, not higher ones?
duped 5y ago
Not everywhere is California
- whimsicalism 5y ago
  It's not just happening in California.
- WarOnPrivacy 5y ago
  It's true that all the other markets with severe housing shortages are not California.
- nebula8804 5y ago
  Many cheap places have other problems that are reflected in the price of the property (ie. There is a cost to living in a town full of anti-vaxxers/religious nutjobs/etc.) If you look at California exodus data, its mainly people making less than 100K, population is increasing for people making more than 100K. Despite this, property prices are still increasing elsewhere. This is a worst of all worlds scenario.
- tjr225 5y ago
  Look at any moderately sized midwest cities subreddit and you will find countless posts about rapidly rising housing costs.
  - duped 5y ago
    I live in a moderately sized Midwestern city. We don't have a shortage of new construction or regressive zoning laws.
    - tjr225 5y ago
      Well, that’s fantastic for you. I’ve got friends in Kansas City whose 100k house is now worth 300k. Friends in Omaha buying new construction for 400k. Housing shortages in Grand Rapids, Michigan where I am from. If you’re immune to all of this, you must be in either a very magical, or very undesirable place. It must not be California, that’s for sure.
throwaway0a5e 5y ago
> Decades of under-building due to failure to respect other people's property rights will do that. Fixed the language for you.
ashtonkem 5y ago
And continuously rising construction costs. Parking minimums are under-discussed here, as the apartment block I used to live in in Los Angeles was probably more underground car park than apartment if you looked at the balance sheet. And yet the parking lot was never more than 20% full.
_huayra_ 5y ago
Is there a dearth of skilled labor for building houses? As a "youth", I don't have any insight into this as I'm a renter for the foreseeable future, but my parents' and their friends complain about how difficult it is to get anybody to do any sort of construction / home upgrades, e.g. my parents putting in a heat pump. Given how much the "you're a loser if you don't go to college" narrative has propelled people who may have been happy and skilled at carpentry, plumbing, electrical work, etc, into soulless corporate jobs, this seems like something that the US could take a page out of Germany or Switzerland's book, i.e. much more emphasis on non-uni career tracks starting in high school.
- kingaillas 5y ago
  >Is there a dearth of skilled labor for building houses? Yes - https://www.npr.org/2021/07/30/1022642064/planet-money-why-arent-there-enough-skilled-people-to-build-houses https://www.npr.org/2021/07/30/1022642064/planet-money-why-a... In summary, the US has been underbuilding ever since the housing crisis, and this makes people avoid construction trades. Fixing it will take years.
ItsMonkk 5y ago
Restrictive zoning is a consequence of scarcity seeking incentives. Housing can't be both Affordable and a good Investment. Therefore the only proper value for a home is the price that it costs to build it. The way to do that is a 100% Land Value Tax.
- wonderwonder 5y ago
  Maybe I dont understand (which I am open too) but it does not seem to make sense unless we transition to a centrally managed economy. Supply and demand drive the price of housing. Whether a house is purchased as an investment or not, it will appreciate based on a variety of factors, including quality of schools, proximity to jobs, etc. If the price of housing did not fluctuate based on demand, and everyone could afford a house anywhere they wanted, who determines who gets the house? House A is on sale and 15 families can afford it. In the current situation, the highest offer takes it. If all offers were forced to be the same, who gets the house? How do you account for bias in the decision process?
  - wallacoloo 5y ago
    I think the way this looks in GP’s proposal is “he who can afford to pay the most rent (taxes) gets the home”, which is a lot like the current system you describe except the rent (taxes) goes toward funding the city and improving such public goods as the schools and roads you mention, instead of rewarding speculators.
    - ItsMonkk 5y ago
      Yes, exactly. I go into a bit more in how I envision the plan in a previous post[0]. A much better introduction to the LVT is this book review[1]. People would still bid for the home. You might get one offer for $190k, another offer for $200k. But if enough homes got bid up in the area, taxes would rise and those high bidders would probably lose a small amount. [0]: https://news.ycombinator.com/item?id=28525712 https://news.ycombinator.com/item?id=28525712 [1]: https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr...
refurb 5y ago
You know what else will do that? A general sense among the population that certain real estate is a “cant lose” investment and a general shift in desirability from suburbs to urban housing.
chasebank 5y ago
While I don't disagree, there have to be multiple forces at play here. Take a town like Boise. They have very lenient zoning / building req's. If it was just zoning, their property market wouldn't be so out of whack. In addition to zoning, speculative investing, low interest rates, housing authorities, rent control, the list goes on and on. IMO, CA prop 13 is just as guilty as restrictive zoning. We'll never get to see the other side of the experiment, the people of CA would never vote to remove it. Prop 13 interrupts the natural cycle of housing.
- whimsicalism 5y ago
  eh - I think short term housing fluctuations are different from long term underbuilding. My understanding was Boise was due to demand shocks that supply hadn't had a chance to respond to.
- IG_Semmelweiss 5y ago
  I don't disagree that there are other factors at play. The last part about Prop 13 seems like a bit of a cheap shot. CA is anything but a natural market. CA government set that poison pill to ensure it must listen to its constituents and remain as "natural" as possible. Now we find they can't enact meaningful reform around zoning, building requirements, parking, or making the city more welcoming to trades, etc. Why should old taxpayers carry the water for ineffectual govt ? CA: "We refuse to make the changes needed to let more people in at a reasonable cost. We will instead take more money from one group, so that they leave and we can fleecce someone else ! "

Decades of under-building due to restrictive zoning laws will do that.

by harryh 5y ago

Decades of under-building due to restrictive zoning laws will do that.

Yes, that - plus the rapid reversal of white flight to the suburbs among young people in the last 10-15 years (more of an east coast phenomena). It is both a demand and supply problem, but short of creating a Hukou system I don't see any solution but building.

WarOnPrivacy 5y ago
> the rapid reversal of white flight to the suburbs among young people in the last 10-15 years The massive buy-ups in West & Central FL have led to an unprecedented shortage in housing. Rentals get 400 applicants each day and people with money in the bank are facing homelessness. People without have little hope.
- deleted 5y ago
  [deleted]
nradov 5y ago
Another solution would be encouraging economic development in other areas instead of cramming increasing numbers of people into a small number of geographically constrained cities.
- whimsicalism 5y ago
  I think these returns to scale/density are somewhat intrinsic.

seanmcdirmid 5y ago

Do you have numbers to back that up? If anything, underbuilding came from a moribund housing market after 2008, as many left the industry and it took way too long to ramp up on talent when housing began to boom again (a lack of people skilled in building houses is still a problem). But I doubt this is an under building problem at all. Look at Seattle and the area, and there isn’t a shortage of new housing projects at all. They are mostly all luxury, which is the only way builders can make a profit on high land prices, and they sell very quickly regardless.

faet 5y ago
https://www.forbes.com/sites/graisondangor/2021/06/16/the-housing-shortage-is-worse-than-ever-and-will-take-a-decade-of-record-construction-to-fix-new-reports-say/?sh=33804ba49535 https://www.forbes.com/sites/graisondangor/2021/06/16/the-ho... The U.S. built on average 276,000 fewer homes per year between 2001 and 2020 compared to the period between 1968 and 2000, according to the report which was covered earlier by the Wall Street Journal. Had building continued at the same pace, there would be 5.5 million more units of housing, the report estimated. To make up the shortage, the NAR report says the U.S. would have to build 2.1 million homes each year for a decade—more than it built each year during the housing boom of the mid-2000s.
- seanmcdirmid 5y ago
  Why are you comparing a 19 year period to a 32 year period? Ah, I see it is a per year measure. Well, it isn’t weird that land runs out for new subdivisions. What is left is to build more dense (replace single family housing with apartments or town homes). Still, why is it zoning per se that is the problem rather than just the market? They have the same pricing problems elsewhere in countries with building booms (eg China).
  - sigstoat 5y ago
    > Still, why is it zoning per se that is the problem rather than just the market? dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted. > What is left is to build more dense (replace single family housing with apartments or town homes). yeah, that's exactly the thing that's banned in very many places where it would be most useful.
    - seanmcdirmid 5y ago
      > dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted. But where they are permitted, housing prices are still high. Higher even, like NYC and much of New Jersey near NYC. Is there a good example where increased density has led to lower prices, not higher ones?

duped 5y ago

Not everywhere is California

whimsicalism 5y ago
It's not just happening in California.
WarOnPrivacy 5y ago
It's true that all the other markets with severe housing shortages are not California.
nebula8804 5y ago
Many cheap places have other problems that are reflected in the price of the property (ie. There is a cost to living in a town full of anti-vaxxers/religious nutjobs/etc.) If you look at California exodus data, its mainly people making less than 100K, population is increasing for people making more than 100K. Despite this, property prices are still increasing elsewhere. This is a worst of all worlds scenario.
tjr225 5y ago
Look at any moderately sized midwest cities subreddit and you will find countless posts about rapidly rising housing costs.
- duped 5y ago
  I live in a moderately sized Midwestern city. We don't have a shortage of new construction or regressive zoning laws.
  - tjr225 5y ago
    Well, that’s fantastic for you. I’ve got friends in Kansas City whose 100k house is now worth 300k. Friends in Omaha buying new construction for 400k. Housing shortages in Grand Rapids, Michigan where I am from. If you’re immune to all of this, you must be in either a very magical, or very undesirable place. It must not be California, that’s for sure.

throwaway0a5e 5y ago

> Decades of under-building due to failure to respect other people's property rights will do that. Fixed the language for you.

ashtonkem 5y ago

And continuously rising construction costs. Parking minimums are under-discussed here, as the apartment block I used to live in in Los Angeles was probably more underground car park than apartment if you looked at the balance sheet. And yet the parking lot was never more than 20% full.

_huayra_ 5y ago

Is there a dearth of skilled labor for building houses? As a "youth", I don't have any insight into this as I'm a renter for the foreseeable future, but my parents' and their friends complain about how difficult it is to get anybody to do any sort of construction / home upgrades, e.g. my parents putting in a heat pump. Given how much the "you're a loser if you don't go to college" narrative has propelled people who may have been happy and skilled at carpentry, plumbing, electrical work, etc, into soulless corporate jobs, this seems like something that the US could take a page out of Germany or Switzerland's book, i.e. much more emphasis on non-uni career tracks starting in high school.

kingaillas 5y ago
>Is there a dearth of skilled labor for building houses? Yes - https://www.npr.org/2021/07/30/1022642064/planet-money-why-arent-there-enough-skilled-people-to-build-houses https://www.npr.org/2021/07/30/1022642064/planet-money-why-a... In summary, the US has been underbuilding ever since the housing crisis, and this makes people avoid construction trades. Fixing it will take years.

ItsMonkk 5y ago

Restrictive zoning is a consequence of scarcity seeking incentives. Housing can't be both Affordable and a good Investment. Therefore the only proper value for a home is the price that it costs to build it. The way to do that is a 100% Land Value Tax.

wonderwonder 5y ago
Maybe I dont understand (which I am open too) but it does not seem to make sense unless we transition to a centrally managed economy. Supply and demand drive the price of housing. Whether a house is purchased as an investment or not, it will appreciate based on a variety of factors, including quality of schools, proximity to jobs, etc. If the price of housing did not fluctuate based on demand, and everyone could afford a house anywhere they wanted, who determines who gets the house? House A is on sale and 15 families can afford it. In the current situation, the highest offer takes it. If all offers were forced to be the same, who gets the house? How do you account for bias in the decision process?
- wallacoloo 5y ago
  I think the way this looks in GP’s proposal is “he who can afford to pay the most rent (taxes) gets the home”, which is a lot like the current system you describe except the rent (taxes) goes toward funding the city and improving such public goods as the schools and roads you mention, instead of rewarding speculators.
  - ItsMonkk 5y ago
    Yes, exactly. I go into a bit more in how I envision the plan in a previous post[0]. A much better introduction to the LVT is this book review[1]. People would still bid for the home. You might get one offer for $190k, another offer for $200k. But if enough homes got bid up in the area, taxes would rise and those high bidders would probably lose a small amount. [0]: https://news.ycombinator.com/item?id=28525712 https://news.ycombinator.com/item?id=28525712 [1]: https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr...

refurb 5y ago

You know what else will do that? A general sense among the population that certain real estate is a “cant lose” investment and a general shift in desirability from suburbs to urban housing.

chasebank 5y ago

While I don't disagree, there have to be multiple forces at play here. Take a town like Boise. They have very lenient zoning / building req's. If it was just zoning, their property market wouldn't be so out of whack. In addition to zoning, speculative investing, low interest rates, housing authorities, rent control, the list goes on and on. IMO, CA prop 13 is just as guilty as restrictive zoning. We'll never get to see the other side of the experiment, the people of CA would never vote to remove it. Prop 13 interrupts the natural cycle of housing.

whimsicalism 5y ago
eh - I think short term housing fluctuations are different from long term underbuilding. My understanding was Boise was due to demand shocks that supply hadn't had a chance to respond to.
IG_Semmelweiss 5y ago
I don't disagree that there are other factors at play. The last part about Prop 13 seems like a bit of a cheap shot. CA is anything but a natural market. CA government set that poison pill to ensure it must listen to its constituents and remain as "natural" as possible. Now we find they can't enact meaningful reform around zoning, building requirements, parking, or making the city more welcoming to trades, etc. Why should old taxpayers carry the water for ineffectual govt ? CA: "We refuse to make the changes needed to let more people in at a reasonable cost. We will instead take more money from one group, so that they leave and we can fleecce someone else ! "