7 ms·

The subsidies aren't the root of the problem. It's municipal zoning laws. Just look at Japan. Went from having the worst housing bubble in world history to affo

by namlem 5y ago

The subsidies aren't the root of the problem. It's municipal zoning laws. Just look at Japan. Went from having the worst housing bubble in world history to affordability in 20 years thanks to sweeping zoning reform.

notch656a 5y ago
Here here. My plan to cheap housing 1) Unfuck Zoning. Be like Texas. 2) Unfuck building codes. Person signs their own death warrant? Let them live in a yurt or a the kind of shack people keep their garden tools in. There's a county east of Tucson like this, guess what, people no ded. 3) End all subsidies and government involvement in mortgages. Best way for skyrocketing price is for government to guarantee loans in a way a relatively free market would not. 4) Permit fees dropped for building housing. Cost of evaluating permits should drop without zoning or building codes. Only examine development to make sure it doesn't cause imminent harm to those outside the property line.
- padobson 5y ago
  This is a good list. 2) Unfuck building codes. I think it could be greatly simplified by holding the building owner/manager criminally liable for defects that lead to major injury or death, and civilly liable for smaller defects. There's no reason for the government to have an opinion about what type of concrete you're using or how many feet of wire you're using. They should be policing outcomes, not hiring and sending inspectors all over. If a building collapses, the people who own it and the people who built it should go to jail. And insurance companies can come after the owners for the smaller problems.
  - spiderice 5y ago
    This makes absolutely no sense. How is "let the building collapse then send the owner to jail" an improvement over "don't let the building collapse"? Why would we get rid of building codes, but then still jail people who don't follow the old building codes that we just got rid of. All this would accomplish is sending well-meaning people to jail, just because they didn't know their house had a serious problem, because we got rid of the building codes. I am so confused by your rational.
    - HPsquared 5y ago
      The argument is probably something along the lines of "most building codes are costly but not necessary for safety" aka "it can be somehow done significantly cheaper but just as safely, a way that doesn't follow the building codes". Not sure such a way exists...
      - notch656a 5y ago
        Are you in favor of bulldozing favelas in places like Brazil if the inhabitants can't afford to fix their shanty to meet up to code?
        HPsquared 5y ago
        I guess it comes down to comparing the risk of poor quality housing vs the risks of homelessness. Kind of like that saying "the real minimum wage is zero"
        notch656a 5y ago
        For many of those people, it's not a risk of homelessness but rather that they would have to rent someplace outside the favela at a much higher price, one they may be able to barely afford. Sort of like in the US, where zoning/building don't generally make people homeless but instead put a person into the situation of the favela dweller who has the option to rent while paying a large portion of their income, except without the option to build their own sub-code housing.
  - ThunderSizzle 5y ago
    No one wants liability. Builders wants to build and be gone ASAP. They'll build a $350k home using the cheapest parts and labor they can find and do their best to run away with the profit. 5 years time, after any sort of warranty, their workmanship (or rather, their lack of it) starts showing. I think your idea would be great, but there would be turmoil while the liability hot potato is thrown around until the industry figures out where that lands (probably some form of "malpractice insurance" on builders would become a thing, with higher premiums on those who suck more, eventually forcing them to be better or quit entirely).
- mywittyname 5y ago
  This might have the opposite effect. Permits and building codes are there for the lender. They want assurances that the property is going to last for at least the duration of their loan. If lenders decide these deathtraps aren't worth the risk, and they have no way of offloading that risk to someone like the government, they aren't going to bite. The entire housing industry is designed around lending. If policies are make that screw with the status quo, the industry is going to collapse then reform around the new one, and that could take decades. We have regulations for a reason. When you blindly get rid of all of them, history repeats itself. We find ourselves looking to solve the same problems. It wasn't that long ago in the USA when entire cities would burn to the ground because a cow kicked over a lantern because lack of building codes meant buildings weren't built with safety in mind.
  - tristor 5y ago
    Everything you just wrote sounds like a good thing to me. The fact that housing is structured around lending in the US is part of the problem. It should not require a loan to get a roof over your head, and combined with zoning making basic housing illegal, there's a lot of perfectly sound shelter that cannot be legally constructed in the US.
  - notch656a 5y ago
    > Permits and building codes are there for the lender. Aight, so if I'm the lender for myself let me nix them. If they're for some third party lender, let the lender and lendee solve that through private market rather than government. Surely someone can be trained to inspect a house. > [ mention of Great Chicago Fire ] The classic "make hundreds millions of people work for decades to afford a house, costing tens of millions of lifespans of work so we can save 300 people once a century from the great Chicago Fire". The calculus there is way way way off. I'll take my chances. >It wasn't that long ago It wasn't that long ago housing was far more affordable. > because a cow kicked over a lantern because lack of building codes You've fallen victim to a big tale, like santa clause. No one knows the cause of that fire. We do know that many of the conditions were completely unsubject government, such as a windy dry spell. >We have regulations for a reason They're there for good reasons, unfortunately the worst tyrannies and misdeeds happen at the gunpoint of those who purport to be acting for the common good. Building codes in practice are as much about taking your life away as they are as preserving it.
- theluketaylor 5y ago
  Zoning fixes are absolutely required, but Texas (particularly Huston) is not a good model. While many places in Texas don't have so-called 'zoning' they manage to implement pretty much all the restrictions zoning reform advocates want fixed through things like land use restrictions on deeds (which are even tougher to reform than zoning) Japan is the model I'd like to see: inclusionary zoning. A small number of zones that allow for maximum use.
- dr_dshiv 5y ago
  Isn’t there some small town that can be bought to test these hypotheses?
- corpMaverick 5y ago
  I believe that one of the things that make Texas more affordable is high property taxes. It keeps people from borrowing more money and competing as aggressively on price. So they pay in Taxes what they would be paying in interest. Taxes at least are spent in the community. Schools, roads, parks, etc.
  - seanmcdirmid 5y ago
    Housing prices have little to do with property taxes, just in how the amount levied is paid by homeowners, not in the amount levied. The reason property taxes are high in Texas is for the same reason they are high in Washington state: no state income tax. That doesn’t really keep our housing prices low, however.
- namlem 5y ago
  Texas sucks just like almost everywhere else. Oregon's reforms we're pretty aggressive though. The entire Portland metro area is zoned to at least quadplexes in residential areas, and duplexes statewide. No SFH zoning allowed. California I think only made the minimum two units.
lordnacho 5y ago
This sounds like something worth a deeper dive. Have you got something we can read about this?
- pitaj 5y ago
  I suggest checking out the Not Just Bikes channel on Youtube, they have a series about this.
  - rlguarino 5y ago
    Called "The Missing Middle" problem by strong towns. https://nebula.app/videos/not-just-bikes-the-houses-that-can-t-be-built-in-america-the-missing-middle https://nebula.app/videos/not-just-bikes-the-houses-that-can... A clip about Houston zoning specifically is in the "Why City Design is Important (and Why I hate Houston)" video at 12:30. https://nebula.app/videos/not-just-bikes-why-city-design-is-important-and-why-i-hate-houston https://nebula.app/videos/not-just-bikes-why-city-design-is-...
fellowniusmonk 5y ago
Your point should be a pretty easy hypothesis to test, you may not know this unless you are from Texas but Houston effectively doesn't have zoning laws. Cost of living calculation between Dallas and Houston says costs are roughly 15% different (as apples to apples a city I can identify to isolate zoning effects). So definitely some effect and a good lever to pull (in addition to others I am sure.) I agree that zoning reform is part of the issue, I think zoning reform combined with other tweaks would go a long way. I think that multiple issues cause these problem, we have runaway negative feedback loops in multiple areas, the problems has evolved organically over time so I doubt any one factor is enough to resolve the issue (as nice as that would be.) I'm not making the assertion that zoning is the sole issue so I don't need to defend it but I figured I could take a quick look and bring some numbers into the mix so we have some numerical grounding for conversation and exploring the problem.
- x3iv130f 5y ago
  Houston has zoning under a different name. It is illegal to build in Houston properties that would be legal in Japan or Europe.
  - fellowniusmonk 5y ago
    Do you have any examples of buildings like this, I've looked but can't find examples online? It seems zoning has a 15% overhead (all things being equal and as best as I could argue with the data I've found so far), maybe it's higher but I haven't found articulable/shareable evidence of that yet. IANAL, so hopefully an expert on HN can help chime in. I've looked (links below) and have done more querying than a comment thread like this probably warrants but wasn't able to find your assertion articulated anywhere. Neither Japan or Houston are unconstrained free-markets without land use control so I'm doing my best to roughly/quickly tease out zonings isolated impact on affordability. Neither locations have 0 laws so they are close to apples to apples and since we're just doing relative comparison I'd rather keep things data driven. Houston has deed restriction but that is a simple free-market/libertarian private contract solution. Does Japan ban deed restrictions? Both japan and houston have historical zones I've linked these two jstore articles as well as a more digestible video. https://www.jstor.org/stable/724839 https://www.jstor.org/stable/724839 https://www.jstor.org/stable/30238667 https://www.jstor.org/stable/30238667 https://japanpropertycentral.com/real-estate-faq/building-regulations-in-japan/ https://japanpropertycentral.com/real-estate-faq/building-re... https://www.planetizen.com/news/2021/04/113144-watch-debunking-myths-about-houstons-lack-zoning https://www.planetizen.com/news/2021/04/113144-watch-debunki...
cashsterling 5y ago
I think Japan also went into population decline... so declining demand for a existing supply of housing will rapidly lead to falling prices.
- dcolkitt 5y ago
  Japan is in decline as a whole, but Tokyo is still growing robustly (at a faster pace than NYC or London in fact) because of urbanization.
  - seanmcdirmid 5y ago
    Tokyo actually isn’t growing that fast in population. They just construct a lot of homes there because the Japanese don’t like to buy second hand ones (so tear down the 30-40 year old house and build a new one).
jmknoll 5y ago
Japan also has a declining population, which takes a lot of pressure off of housing markets.
- Auracle 5y ago
  We could also have that, or at least level off, if we got a handle on illegal immigration.
maerF0x0 5y ago
There's no reason it cant be both, and that both cant be addressed. I think this is a "Yes, and..." situation
nappy-doo 5y ago
Uh, and demographics.
SMAAART 5y ago
Can you elaborate on that?
evv555 5y ago
40% of homes in my city were bought by institutional investors with basically cash offers that no one can compete with. They openly state the point is to corner the market on a scarce resource and drive up rents which are also up 30+%. This is clearly a problem zoning or not.
seanmcdirmid 5y ago
The zoning laws didn’t change in between. Japan got burned on property speculation, and no one no longer sees residential real estate as much of an investment. Also, no one wants to buy second hand structures, so your appreciation is limited to land and the existing housing on that land is a liability (buyers have to tear it down before building a new house on the land). Japan has a large amount of housing starts because they have a large amount of demolitions. Liberal zoning allows for this, for sure, but I’m not sure many Americans would be willing to go that route.

by namlem 5y ago

notch656a 5y ago

Here here. My plan to cheap housing 1) Unfuck Zoning. Be like Texas. 2) Unfuck building codes. Person signs their own death warrant? Let them live in a yurt or a the kind of shack people keep their garden tools in. There's a county east of Tucson like this, guess what, people no ded. 3) End all subsidies and government involvement in mortgages. Best way for skyrocketing price is for government to guarantee loans in a way a relatively free market would not. 4) Permit fees dropped for building housing. Cost of evaluating permits should drop without zoning or building codes. Only examine development to make sure it doesn't cause imminent harm to those outside the property line.

padobson 5y ago
This is a good list. 2) Unfuck building codes. I think it could be greatly simplified by holding the building owner/manager criminally liable for defects that lead to major injury or death, and civilly liable for smaller defects. There's no reason for the government to have an opinion about what type of concrete you're using or how many feet of wire you're using. They should be policing outcomes, not hiring and sending inspectors all over. If a building collapses, the people who own it and the people who built it should go to jail. And insurance companies can come after the owners for the smaller problems.
- spiderice 5y ago
  This makes absolutely no sense. How is "let the building collapse then send the owner to jail" an improvement over "don't let the building collapse"? Why would we get rid of building codes, but then still jail people who don't follow the old building codes that we just got rid of. All this would accomplish is sending well-meaning people to jail, just because they didn't know their house had a serious problem, because we got rid of the building codes. I am so confused by your rational.
  - HPsquared 5y ago
    The argument is probably something along the lines of "most building codes are costly but not necessary for safety" aka "it can be somehow done significantly cheaper but just as safely, a way that doesn't follow the building codes". Not sure such a way exists...
    - notch656a 5y ago
      Are you in favor of bulldozing favelas in places like Brazil if the inhabitants can't afford to fix their shanty to meet up to code?
      - HPsquared 5y ago
        I guess it comes down to comparing the risk of poor quality housing vs the risks of homelessness. Kind of like that saying "the real minimum wage is zero"
        notch656a 5y ago
        For many of those people, it's not a risk of homelessness but rather that they would have to rent someplace outside the favela at a much higher price, one they may be able to barely afford. Sort of like in the US, where zoning/building don't generally make people homeless but instead put a person into the situation of the favela dweller who has the option to rent while paying a large portion of their income, except without the option to build their own sub-code housing.
- ThunderSizzle 5y ago
  No one wants liability. Builders wants to build and be gone ASAP. They'll build a $350k home using the cheapest parts and labor they can find and do their best to run away with the profit. 5 years time, after any sort of warranty, their workmanship (or rather, their lack of it) starts showing. I think your idea would be great, but there would be turmoil while the liability hot potato is thrown around until the industry figures out where that lands (probably some form of "malpractice insurance" on builders would become a thing, with higher premiums on those who suck more, eventually forcing them to be better or quit entirely).
mywittyname 5y ago
This might have the opposite effect. Permits and building codes are there for the lender. They want assurances that the property is going to last for at least the duration of their loan. If lenders decide these deathtraps aren't worth the risk, and they have no way of offloading that risk to someone like the government, they aren't going to bite. The entire housing industry is designed around lending. If policies are make that screw with the status quo, the industry is going to collapse then reform around the new one, and that could take decades. We have regulations for a reason. When you blindly get rid of all of them, history repeats itself. We find ourselves looking to solve the same problems. It wasn't that long ago in the USA when entire cities would burn to the ground because a cow kicked over a lantern because lack of building codes meant buildings weren't built with safety in mind.
- tristor 5y ago
  Everything you just wrote sounds like a good thing to me. The fact that housing is structured around lending in the US is part of the problem. It should not require a loan to get a roof over your head, and combined with zoning making basic housing illegal, there's a lot of perfectly sound shelter that cannot be legally constructed in the US.
- notch656a 5y ago
  > Permits and building codes are there for the lender. Aight, so if I'm the lender for myself let me nix them. If they're for some third party lender, let the lender and lendee solve that through private market rather than government. Surely someone can be trained to inspect a house. > [ mention of Great Chicago Fire ] The classic "make hundreds millions of people work for decades to afford a house, costing tens of millions of lifespans of work so we can save 300 people once a century from the great Chicago Fire". The calculus there is way way way off. I'll take my chances. >It wasn't that long ago It wasn't that long ago housing was far more affordable. > because a cow kicked over a lantern because lack of building codes You've fallen victim to a big tale, like santa clause. No one knows the cause of that fire. We do know that many of the conditions were completely unsubject government, such as a windy dry spell. >We have regulations for a reason They're there for good reasons, unfortunately the worst tyrannies and misdeeds happen at the gunpoint of those who purport to be acting for the common good. Building codes in practice are as much about taking your life away as they are as preserving it.
theluketaylor 5y ago
Zoning fixes are absolutely required, but Texas (particularly Huston) is not a good model. While many places in Texas don't have so-called 'zoning' they manage to implement pretty much all the restrictions zoning reform advocates want fixed through things like land use restrictions on deeds (which are even tougher to reform than zoning) Japan is the model I'd like to see: inclusionary zoning. A small number of zones that allow for maximum use.
dr_dshiv 5y ago
Isn’t there some small town that can be bought to test these hypotheses?
corpMaverick 5y ago
I believe that one of the things that make Texas more affordable is high property taxes. It keeps people from borrowing more money and competing as aggressively on price. So they pay in Taxes what they would be paying in interest. Taxes at least are spent in the community. Schools, roads, parks, etc.
- seanmcdirmid 5y ago
  Housing prices have little to do with property taxes, just in how the amount levied is paid by homeowners, not in the amount levied. The reason property taxes are high in Texas is for the same reason they are high in Washington state: no state income tax. That doesn’t really keep our housing prices low, however.
namlem 5y ago
Texas sucks just like almost everywhere else. Oregon's reforms we're pretty aggressive though. The entire Portland metro area is zoned to at least quadplexes in residential areas, and duplexes statewide. No SFH zoning allowed. California I think only made the minimum two units.

lordnacho 5y ago

This sounds like something worth a deeper dive. Have you got something we can read about this?

pitaj 5y ago
I suggest checking out the Not Just Bikes channel on Youtube, they have a series about this.
- rlguarino 5y ago
  Called "The Missing Middle" problem by strong towns. https://nebula.app/videos/not-just-bikes-the-houses-that-can-t-be-built-in-america-the-missing-middle https://nebula.app/videos/not-just-bikes-the-houses-that-can... A clip about Houston zoning specifically is in the "Why City Design is Important (and Why I hate Houston)" video at 12:30. https://nebula.app/videos/not-just-bikes-why-city-design-is-important-and-why-i-hate-houston https://nebula.app/videos/not-just-bikes-why-city-design-is-...

fellowniusmonk 5y ago

Your point should be a pretty easy hypothesis to test, you may not know this unless you are from Texas but Houston effectively doesn't have zoning laws. Cost of living calculation between Dallas and Houston says costs are roughly 15% different (as apples to apples a city I can identify to isolate zoning effects). So definitely some effect and a good lever to pull (in addition to others I am sure.) I agree that zoning reform is part of the issue, I think zoning reform combined with other tweaks would go a long way. I think that multiple issues cause these problem, we have runaway negative feedback loops in multiple areas, the problems has evolved organically over time so I doubt any one factor is enough to resolve the issue (as nice as that would be.) I'm not making the assertion that zoning is the sole issue so I don't need to defend it but I figured I could take a quick look and bring some numbers into the mix so we have some numerical grounding for conversation and exploring the problem.

x3iv130f 5y ago
Houston has zoning under a different name. It is illegal to build in Houston properties that would be legal in Japan or Europe.
- fellowniusmonk 5y ago
  Do you have any examples of buildings like this, I've looked but can't find examples online? It seems zoning has a 15% overhead (all things being equal and as best as I could argue with the data I've found so far), maybe it's higher but I haven't found articulable/shareable evidence of that yet. IANAL, so hopefully an expert on HN can help chime in. I've looked (links below) and have done more querying than a comment thread like this probably warrants but wasn't able to find your assertion articulated anywhere. Neither Japan or Houston are unconstrained free-markets without land use control so I'm doing my best to roughly/quickly tease out zonings isolated impact on affordability. Neither locations have 0 laws so they are close to apples to apples and since we're just doing relative comparison I'd rather keep things data driven. Houston has deed restriction but that is a simple free-market/libertarian private contract solution. Does Japan ban deed restrictions? Both japan and houston have historical zones I've linked these two jstore articles as well as a more digestible video. https://www.jstor.org/stable/724839 https://www.jstor.org/stable/724839 https://www.jstor.org/stable/30238667 https://www.jstor.org/stable/30238667 https://japanpropertycentral.com/real-estate-faq/building-regulations-in-japan/ https://japanpropertycentral.com/real-estate-faq/building-re... https://www.planetizen.com/news/2021/04/113144-watch-debunking-myths-about-houstons-lack-zoning https://www.planetizen.com/news/2021/04/113144-watch-debunki...

cashsterling 5y ago

I think Japan also went into population decline... so declining demand for a existing supply of housing will rapidly lead to falling prices.

dcolkitt 5y ago
Japan is in decline as a whole, but Tokyo is still growing robustly (at a faster pace than NYC or London in fact) because of urbanization.
- seanmcdirmid 5y ago
  Tokyo actually isn’t growing that fast in population. They just construct a lot of homes there because the Japanese don’t like to buy second hand ones (so tear down the 30-40 year old house and build a new one).

jmknoll 5y ago

Japan also has a declining population, which takes a lot of pressure off of housing markets.

Auracle 5y ago
We could also have that, or at least level off, if we got a handle on illegal immigration.

maerF0x0 5y ago

There's no reason it cant be both, and that both cant be addressed. I think this is a "Yes, and..." situation

nappy-doo 5y ago

Uh, and demographics.

SMAAART 5y ago

Can you elaborate on that?

evv555 5y ago

40% of homes in my city were bought by institutional investors with basically cash offers that no one can compete with. They openly state the point is to corner the market on a scarce resource and drive up rents which are also up 30+%. This is clearly a problem zoning or not.

seanmcdirmid 5y ago

The zoning laws didn’t change in between. Japan got burned on property speculation, and no one no longer sees residential real estate as much of an investment. Also, no one wants to buy second hand structures, so your appreciation is limited to land and the existing housing on that land is a liability (buyers have to tear it down before building a new house on the land). Japan has a large amount of housing starts because they have a large amount of demolitions. Liberal zoning allows for this, for sure, but I’m not sure many Americans would be willing to go that route.