5 ms·

Housing will never be relatively cheap until it’s easier to build a house. It will never be easier to build a house until zoning is more lenient. No state is i

Housing will never be relatively cheap until it’s easier to build a house. It will never be easier to build a house until zoning is more lenient. No state is incentivized to make zoning more lenient. Therefore it falls on the federal government, who lack the authority. The only thing they can do is something similar to what they do with the highways and threaten to take away funds unless all plots of land can be zoned for up to 4-family houses (FHA limit). Potentially quadrupling the amount of housing will do it.

danans 5y ago
> No state is incentivized to make zoning more lenient. Yet this is exactly what is happening in California via SB9 (though admittedly with significant local opposition): https://www.mercurynews.com/2021/09/16/gov-newsom-abolishes-single-family-zoning-in-california/amp/ https://www.mercurynews.com/2021/09/16/gov-newsom-abolishes-... Ironically, single family zoning as a tool was invented in California.
andrewmutz 5y ago
I agree completely. While its fun to place the blame for high prices on the investors, in reality the high prices are for the same reason that we see high prices of everything else: there is a shortage. Zoning reform is a solution to get out of this mess, but zoning is not the only cause of this problem. If you look at the last 10 years of housing construction in this country, and you compare it to the previous 50 years, you see that we have simply not been building enough housing: https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST If a nation spends 10 years not building enough housing, high prices are what happen. If you add low 2020 interest rates to the mix, the effect on housing prices are explosive in the short term.
namlem 5y ago
Zoning laws are determined at the municipal level. It's local government that is the problem. State governments have actually started pushing reforms thankfully.
- ngngngng 5y ago
  Exactly, this is one of clearest examples I know of where small, local government backfires. For example, my small town recently passed a law allowing all homes to have an accessory dwelling unit. Come to find out the only reason it was passed was because the state required it by law. But within my towns borders there's an HOA that doesn't have to allow them, since of course HOA's are a loophole to the law. I imagine more HOA's are going to start appearing.
avasylev 5y ago
Massachusetts is trying to force Boston suburbs to lift single family restrictions. Great intention, though i have feeling each town is going to fight for years against it. https://www.mass.gov/info-details/multi-family-zoning-requirement-for-mbta-communities https://www.mass.gov/info-details/multi-family-zoning-requir...
- Steltek 5y ago
  It's not compulsory and it's not lifting, only requiring multifamily zoning around transit catchment areas. Towns that refuse to implement it lose out on state funding meaning the wealthy towns are free to ignore it. Perversely, those towns will now cost even more to live in because they need to offset the lost state money. In short, it's a good idea but needs more teeth.
rednerrus 5y ago
Oregon passed a law requiring this.
dublinben 5y ago
>No state is incentivized to make zoning more lenient. All states are actually incentivized to increase their supply of housing, because an increasing population allows them to eventually gain greater representation in Congress relative to states with less growth. States like California, New York, and Illinois are losing out to states like Texas, Florida, and North Carolina.
- digisign 5y ago
  This is true, but I'm guessing many don't realize it. Also, statewide is probably not local enough to counteract nimbyism.
- seanmcdirmid 5y ago
  California and Texas had the same number of people just 80 years ago. I don’t think California has done that badly in the long run.
thebean11 5y ago
> No state is incentivized to make zoning more lenient. Why not? Wouldn't it encourage more people to move to the state and increase income tax / sales tax / property tax revenue?
- dymk 5y ago
  The people electing the officials that make these policies are the ones that want to keep low-density housing. It's suicide for a politician to sponsor rezoing legislation.
dionidium 5y ago
Yes, I'm really disappointed to see so many other comments here that misidentify this fundamental problem. Investors are only interested in housing now because prices were already rising thanks to constraints on building due to zoning. These investors aren't the ones making the prices higher (or they weren't initially, at least); they're responding to conditions that were already making prices higher, which makes their investment more attractive. But you don't have to take my word for it; it's literally what they say in their prospectuses: https://mobile.twitter.com/mattyglesias/status/1482762838074699785 https://mobile.twitter.com/mattyglesias/status/1482762838074... Everybody has their favorite group that's easy to hate in this space -- it's the vacant investment properties, or the foreign investors, or the REITs, or the rich people with vacation homes -- but those are tiny factors relative to the main driver of this, which is your typical one-house-occupying all-American homeowner who opposes any new housing in their neighborhood.
- refurb 5y ago
  Exactly this. Investors aren’t buying up housing for fun, it’s because their investment thesis tells them they’ll make a lot of money. As soon as the prospect of housing appreciation disappears so will the investors. But then we’ll have sad stories about people being underwater on their mortgages.
mywittyname 5y ago
> No state is incentivized to make zoning more lenient. Zoning is largely a local issue. And zoning is talked about a lot at local council meetings. The problem is people have very strong opinions when it comes to how the place they live will change. It's trivial to get a sizable contingent of people to oppose zoning permits. There's a huge argument going on a few towns down from me as to whether a 100yo, vacant building in disrepair should be torn down to make room for a community center. One would think this is something obvious that would go unchallenged by locals, but nope. Making zoning a state issue would probably help a lot, but it would piss off home owners. Even early champions of the change are going to hate it when their neighbor's houses get torn down so that a casino or something can be built in their place.
- dionidium 5y ago
  > Even early champions of the change are going to hate it when their neighbor's houses get torn down so that a casino or something can be built in their place. Even the strongest critics of the status quo don't think we should eliminate all zoning, so that you'd be able to put a casino on a residential street. What we believe is that you should able to build more residences (and maybe a corner store) on residential streets.
  - mywittyname 5y ago
    From what I see from zoning reform advocates, many look at Japan as the solution, precisely because in most of japan, residential houses can go in most any zone. Meaning, an old warehouse could be torn down and replaced with SFH without any change in zoning, but theoretically, a gas station or strip mall can be built right next to those same houses. You can replace an old warehouse in the USA with SFHs. The major difference is the area will have to be rezoned completely before construction starts and the public will get their chance to voice their opinions. This allows everyone to agree on what else may be built on this land before houses go up. Will it be mixed use? Residential only? Are multi-tenant buildings allowed? Then there's the big issue of who controls zoning? Should it be at the state or local level? Both have their positives and negatives.
asdff 5y ago
Zoning is an issue but there's also the onerous costs to building something today even when you do have the zoning to add capacity to a given lot. For example, you might notice every apartment you see has a balcony. That's because code dictates balconies for every living unit, meaning the build just got that much more expensive per unit just because some people on city council 50 years ago thought apartments with balconies were more seemly or something. There's also long review periods. It's typical even in growing urban areas to see lots bought for development, raised, then seemingly left to sit vacant for years sometimes even with earth-moving equipment or cranes laying idle, biding time, while the permits cycle through the purgatory that is the building office in city hall. This is all the result of corruption. City councilmembers in cities across this country found themselves in the position of kingmaker. Decades of entrenchment of the political class saw this role refined, distilled, and now it's practically impossible to remove the layers and layers of ossified process that has corrupted anything we do. This is why housing is not being built, why construction costs on projects are so high, why timetables of doing anything at all are decades out, and why the FBI indicts major local politicians for corruption every year. Decades and decades of systemic corruption that has not ever been rooted out has led us to this current broken state.
- mullingitover 5y ago
  > Decades of entrenchment of the political class saw this role refined, distilled, and now it's practically impossible to remove the layers and layers of ossified process that has corrupted anything we do. I would love to see a federal regulation stating that any housing construction permit that isn't reviewed within ten business days is automatically approved.
- bluGill 5y ago
  Not all states are that bad. In the midwest things tend to be approved much faster. Which is why our housing costs are not as bad as CA (still not great, but they much more reflect the cost of building)
  - seanmcdirmid 5y ago
    Midwest houses are cheap because the Midwest economy isn’t that hot. You just can’t get a good job very easily in Toledo Ohio anymore.
AnimalMuppet 5y ago
I don't think it would take quadrupling. It would take adding enough housing that housing quits being a good investment for investors, so they stop buying up houses and start selling the ones they have. I suspect we reach that point long before we quadruple the supply. Why? Because investors would have more and more houses sitting empty. That would force a change fairly soon... wouldn't it?
Auracle 5y ago
I’m in a rural area with no zoning concerns and house prices are still stupid high right now.

danans 5y ago

> No state is incentivized to make zoning more lenient. Yet this is exactly what is happening in California via SB9 (though admittedly with significant local opposition): https://www.mercurynews.com/2021/09/16/gov-newsom-abolishes-single-family-zoning-in-california/amp/ https://www.mercurynews.com/2021/09/16/gov-newsom-abolishes-... Ironically, single family zoning as a tool was invented in California.

andrewmutz 5y ago

I agree completely. While its fun to place the blame for high prices on the investors, in reality the high prices are for the same reason that we see high prices of everything else: there is a shortage. Zoning reform is a solution to get out of this mess, but zoning is not the only cause of this problem. If you look at the last 10 years of housing construction in this country, and you compare it to the previous 50 years, you see that we have simply not been building enough housing: https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST If a nation spends 10 years not building enough housing, high prices are what happen. If you add low 2020 interest rates to the mix, the effect on housing prices are explosive in the short term.

namlem 5y ago

Zoning laws are determined at the municipal level. It's local government that is the problem. State governments have actually started pushing reforms thankfully.

ngngngng 5y ago
Exactly, this is one of clearest examples I know of where small, local government backfires. For example, my small town recently passed a law allowing all homes to have an accessory dwelling unit. Come to find out the only reason it was passed was because the state required it by law. But within my towns borders there's an HOA that doesn't have to allow them, since of course HOA's are a loophole to the law. I imagine more HOA's are going to start appearing.

avasylev 5y ago

Massachusetts is trying to force Boston suburbs to lift single family restrictions. Great intention, though i have feeling each town is going to fight for years against it. https://www.mass.gov/info-details/multi-family-zoning-requirement-for-mbta-communities https://www.mass.gov/info-details/multi-family-zoning-requir...

Steltek 5y ago
It's not compulsory and it's not lifting, only requiring multifamily zoning around transit catchment areas. Towns that refuse to implement it lose out on state funding meaning the wealthy towns are free to ignore it. Perversely, those towns will now cost even more to live in because they need to offset the lost state money. In short, it's a good idea but needs more teeth.

rednerrus 5y ago

Oregon passed a law requiring this.

dublinben 5y ago

>No state is incentivized to make zoning more lenient. All states are actually incentivized to increase their supply of housing, because an increasing population allows them to eventually gain greater representation in Congress relative to states with less growth. States like California, New York, and Illinois are losing out to states like Texas, Florida, and North Carolina.

digisign 5y ago
This is true, but I'm guessing many don't realize it. Also, statewide is probably not local enough to counteract nimbyism.
seanmcdirmid 5y ago
California and Texas had the same number of people just 80 years ago. I don’t think California has done that badly in the long run.

thebean11 5y ago

> No state is incentivized to make zoning more lenient. Why not? Wouldn't it encourage more people to move to the state and increase income tax / sales tax / property tax revenue?

dymk 5y ago
The people electing the officials that make these policies are the ones that want to keep low-density housing. It's suicide for a politician to sponsor rezoing legislation.

dionidium 5y ago

Yes, I'm really disappointed to see so many other comments here that misidentify this fundamental problem. Investors are only interested in housing now because prices were already rising thanks to constraints on building due to zoning. These investors aren't the ones making the prices higher (or they weren't initially, at least); they're responding to conditions that were already making prices higher, which makes their investment more attractive. But you don't have to take my word for it; it's literally what they say in their prospectuses: https://mobile.twitter.com/mattyglesias/status/1482762838074699785 https://mobile.twitter.com/mattyglesias/status/1482762838074... Everybody has their favorite group that's easy to hate in this space -- it's the vacant investment properties, or the foreign investors, or the REITs, or the rich people with vacation homes -- but those are tiny factors relative to the main driver of this, which is your typical one-house-occupying all-American homeowner who opposes any new housing in their neighborhood.

refurb 5y ago
Exactly this. Investors aren’t buying up housing for fun, it’s because their investment thesis tells them they’ll make a lot of money. As soon as the prospect of housing appreciation disappears so will the investors. But then we’ll have sad stories about people being underwater on their mortgages.

mywittyname 5y ago

> No state is incentivized to make zoning more lenient. Zoning is largely a local issue. And zoning is talked about a lot at local council meetings. The problem is people have very strong opinions when it comes to how the place they live will change. It's trivial to get a sizable contingent of people to oppose zoning permits. There's a huge argument going on a few towns down from me as to whether a 100yo, vacant building in disrepair should be torn down to make room for a community center. One would think this is something obvious that would go unchallenged by locals, but nope. Making zoning a state issue would probably help a lot, but it would piss off home owners. Even early champions of the change are going to hate it when their neighbor's houses get torn down so that a casino or something can be built in their place.

dionidium 5y ago
> Even early champions of the change are going to hate it when their neighbor's houses get torn down so that a casino or something can be built in their place. Even the strongest critics of the status quo don't think we should eliminate all zoning, so that you'd be able to put a casino on a residential street. What we believe is that you should able to build more residences (and maybe a corner store) on residential streets.
- mywittyname 5y ago
  From what I see from zoning reform advocates, many look at Japan as the solution, precisely because in most of japan, residential houses can go in most any zone. Meaning, an old warehouse could be torn down and replaced with SFH without any change in zoning, but theoretically, a gas station or strip mall can be built right next to those same houses. You can replace an old warehouse in the USA with SFHs. The major difference is the area will have to be rezoned completely before construction starts and the public will get their chance to voice their opinions. This allows everyone to agree on what else may be built on this land before houses go up. Will it be mixed use? Residential only? Are multi-tenant buildings allowed? Then there's the big issue of who controls zoning? Should it be at the state or local level? Both have their positives and negatives.

asdff 5y ago

Zoning is an issue but there's also the onerous costs to building something today even when you do have the zoning to add capacity to a given lot. For example, you might notice every apartment you see has a balcony. That's because code dictates balconies for every living unit, meaning the build just got that much more expensive per unit just because some people on city council 50 years ago thought apartments with balconies were more seemly or something. There's also long review periods. It's typical even in growing urban areas to see lots bought for development, raised, then seemingly left to sit vacant for years sometimes even with earth-moving equipment or cranes laying idle, biding time, while the permits cycle through the purgatory that is the building office in city hall. This is all the result of corruption. City councilmembers in cities across this country found themselves in the position of kingmaker. Decades of entrenchment of the political class saw this role refined, distilled, and now it's practically impossible to remove the layers and layers of ossified process that has corrupted anything we do. This is why housing is not being built, why construction costs on projects are so high, why timetables of doing anything at all are decades out, and why the FBI indicts major local politicians for corruption every year. Decades and decades of systemic corruption that has not ever been rooted out has led us to this current broken state.

mullingitover 5y ago
> Decades of entrenchment of the political class saw this role refined, distilled, and now it's practically impossible to remove the layers and layers of ossified process that has corrupted anything we do. I would love to see a federal regulation stating that any housing construction permit that isn't reviewed within ten business days is automatically approved.
bluGill 5y ago
Not all states are that bad. In the midwest things tend to be approved much faster. Which is why our housing costs are not as bad as CA (still not great, but they much more reflect the cost of building)
- seanmcdirmid 5y ago
  Midwest houses are cheap because the Midwest economy isn’t that hot. You just can’t get a good job very easily in Toledo Ohio anymore.

AnimalMuppet 5y ago

I don't think it would take quadrupling. It would take adding enough housing that housing quits being a good investment for investors, so they stop buying up houses and start selling the ones they have. I suspect we reach that point long before we quadruple the supply. Why? Because investors would have more and more houses sitting empty. That would force a change fairly soon... wouldn't it?

Auracle 5y ago

I’m in a rural area with no zoning concerns and house prices are still stupid high right now.