4 ms·

This chart seems to be misleading, especially when we know that purchasing power was higher back then. It was far easier to buy a house with the income back th

by fouc 5y ago

This chart seems to be misleading, especially when we know that purchasing power was higher back then. It was far easier to buy a house with the income back then too.

arcticbull 5y ago
House prices are a zoning issue primarily. [1] In major metros, city councils prevented construction - as such supply could not meet demand and the price of housing in cities went up dramatically more than inflation. Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. That said, adjusted for inflation, 1 square foot of new house costs exactly the same today as it did in the 1970s. This is what it looks like when you have federalized zoning and allow supply to meet demand. [2, 3] This is what it looks like when you do not. [4] I also reject the idea that it was easier to buy houses back in the day on average on a per square foot basis. In the 70s, we saw mortgage interest rates as high as 12% on a 30 year fixed. You can buy a significantly more expensive house on the same monthly payment when you're on a 30-year fixed 2% APR mortgage vs a 12% APR mortgage. It doesn't matter that purchasing power was higher back then per unit because today you get significantly more units. [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://fred.stlouisfed.org/series/JPNCPIHOUQINMEI https://fred.stlouisfed.org/series/JPNCPIHOUQINMEI [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... [4] https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS
- seanmcdirmid 5y ago
  Zoning existed in the 1970s also. > Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. Outside major metros, the economy isn't as hot and demand is tapered back significantly. In cities that have poor economies, housing prices are also cheap. In places that are extremely dense (NYC) with hot economies, housing is still expensive. All I can tell from this is "popularity = high prices", it isn't clear that you could build enough housing to satisfy demand in a hot economy because more people might make the economy even hotter (attracting even more people).
  - arcticbull 5y ago
    In SF you can't build a house that casts a shadow over a park ever no matter how small. The entire western half of the city is zoned for 4-story housing. This is why housing is expensive in SF. SF added less than half as many houses over the last few decades as necessary to keep pace with job growth and there's simply no excuse for it. [1] [1] https://en.wikipedia.org/wiki/File:San_Francisco_aerial.jpg https://en.wikipedia.org/wiki/File:San_Francisco_aerial.jpg
    - seanmcdirmid 5y ago
      SF is one of the densest cities in the USA (17k/sqm vs. NYC's 27k/sqm). And...it is not like you HAVE to live in SF, there are plenty of cities nearby. Houses are expensive in SF because people want to live in SF. If SF had 10 times as many housing, then there would simply be 10 times as much economic activity and prices wouldn't budge. If you want cheap housing for your city, make your economy unattractive like Gary Indiana, or, if you like your economy, take the Tokyo approach and make housing speculation unattractive and let units be small.
      - arcticbull 5y ago
        > SF is one of the densest cities in the USA (17k/sqm vs. NYC's 27k/sqm). This is irrelevant, it's obviously not sufficiently dense to meet demand. If you look at the photo you'll obviously see that it's simply not particularly dense by visual inspection. > Houses are expensive in SF because people want to live in SF. They are expensive because they do not permit sufficient construction to meet the demand, what about that do you disagree with? It's not just that people want to live there - it's because people want to live there and city council would rather keep a derelict parking lot for Nordstrom than put up a 27-story 500 unit condo building in the middle of downtown. [1] > If you want cheap housing for your city, make your economy unattractive like Gary Indiana, or, if you like your economy, take the Tokyo approach and make housing speculation unattractive and let units be small. That has nothing to do with what Tokyo does. Tokyo permits construction via federal zoning rules. [1] https://thefrisc.com/how-to-unpack-one-supervisors-rejection-of-the-project-to-turn-an-sf-parking-lot-into-500-homes-2985ae7137e3 https://thefrisc.com/how-to-unpack-one-supervisors-rejection...

by fouc 5y ago

This chart seems to be misleading, especially when we know that purchasing power was higher back then. It was far easier to buy a house with the income back then too.

arcticbull 5y ago

House prices are a zoning issue primarily. [1] In major metros, city councils prevented construction - as such supply could not meet demand and the price of housing in cities went up dramatically more than inflation. Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. That said, adjusted for inflation, 1 square foot of new house costs exactly the same today as it did in the 1970s. This is what it looks like when you have federalized zoning and allow supply to meet demand. [2, 3] This is what it looks like when you do not. [4] I also reject the idea that it was easier to buy houses back in the day on average on a per square foot basis. In the 70s, we saw mortgage interest rates as high as 12% on a 30 year fixed. You can buy a significantly more expensive house on the same monthly payment when you're on a 30-year fixed 2% APR mortgage vs a 12% APR mortgage. It doesn't matter that purchasing power was higher back then per unit because today you get significantly more units. [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://fred.stlouisfed.org/series/JPNCPIHOUQINMEI https://fred.stlouisfed.org/series/JPNCPIHOUQINMEI [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... [4] https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS

seanmcdirmid 5y ago
Zoning existed in the 1970s also. > Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. Outside major metros, the economy isn't as hot and demand is tapered back significantly. In cities that have poor economies, housing prices are also cheap. In places that are extremely dense (NYC) with hot economies, housing is still expensive. All I can tell from this is "popularity = high prices", it isn't clear that you could build enough housing to satisfy demand in a hot economy because more people might make the economy even hotter (attracting even more people).
- arcticbull 5y ago
  In SF you can't build a house that casts a shadow over a park ever no matter how small. The entire western half of the city is zoned for 4-story housing. This is why housing is expensive in SF. SF added less than half as many houses over the last few decades as necessary to keep pace with job growth and there's simply no excuse for it. [1] [1] https://en.wikipedia.org/wiki/File:San_Francisco_aerial.jpg https://en.wikipedia.org/wiki/File:San_Francisco_aerial.jpg
  - seanmcdirmid 5y ago
    SF is one of the densest cities in the USA (17k/sqm vs. NYC's 27k/sqm). And...it is not like you HAVE to live in SF, there are plenty of cities nearby. Houses are expensive in SF because people want to live in SF. If SF had 10 times as many housing, then there would simply be 10 times as much economic activity and prices wouldn't budge. If you want cheap housing for your city, make your economy unattractive like Gary Indiana, or, if you like your economy, take the Tokyo approach and make housing speculation unattractive and let units be small.
    - arcticbull 5y ago
      > SF is one of the densest cities in the USA (17k/sqm vs. NYC's 27k/sqm). This is irrelevant, it's obviously not sufficiently dense to meet demand. If you look at the photo you'll obviously see that it's simply not particularly dense by visual inspection. > Houses are expensive in SF because people want to live in SF. They are expensive because they do not permit sufficient construction to meet the demand, what about that do you disagree with? It's not just that people want to live there - it's because people want to live there and city council would rather keep a derelict parking lot for Nordstrom than put up a 27-story 500 unit condo building in the middle of downtown. [1] > If you want cheap housing for your city, make your economy unattractive like Gary Indiana, or, if you like your economy, take the Tokyo approach and make housing speculation unattractive and let units be small. That has nothing to do with what Tokyo does. Tokyo permits construction via federal zoning rules. [1] https://thefrisc.com/how-to-unpack-one-supervisors-rejection-of-the-project-to-turn-an-sf-parking-lot-into-500-homes-2985ae7137e3 https://thefrisc.com/how-to-unpack-one-supervisors-rejection...