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The thing I don't understand in conversations around affordable housing is why does it have to be new construction? Of course new construction is going to be e

• seibelj 5y ago
  This is why luxury housing and condos is actually helpful for lower-income housing - the luxury housing of 60 years ago becomes the affordable housing as the top of the market continues moving into better places. Basically all housing whatsoever is helpful. But the optics of it makes it difficult to understand.
  • dv_dt 5y ago
    Unless of course the luxury housing gets periodically torn down and rebuilt or remodeled making it even higher end housing. If the core neighborhood is already high-rent and or desirable real estate, why would high cost real estate buildings somehow allow themselves become low rent?
    • seibelj 5y ago
      If you don’t build new luxury housing, then the top end goes to the next best thing, and the next to the next best, and so on. Building more helps increase total supply which alleviates pressure everywhere.
      • dv_dt 5y ago
        That step down doesn't necessarily happen at all - old luxury housing may get upgraded in place, or upgraded to higher luxury housing which then becomes less efficient at serving many. The total supply may shrink from serving the luxury market.
        • seibelj 5y ago
          My larger point is that knee-jerk opposition to luxury housing isn’t helpful, and actually damaging to the cause of increased affordable housing. In the OP you can see how uneconomic building affordable housing is - so build luxury if that’s all that can be done.
        • crooked-v 5y ago
          How is that "shrinking"? If new luxury housing gets built now and refurbed later, the additional unit count is still there.
          • dv_dt 5y ago
            Upgraded luxury housing often reduces the unit count as well as the number of people housed.
  • dzhiurgis 5y ago
    Somewhat. A lot of that old housing goes to rentals.
  • heavyset_go 5y ago
    The luxury housing around here goes to high earners from cities that are far away, and then wealthy people's adult children from all over the world move into the homes in the city after they leave. Housing here and in the cities has only gotten more expensive.
    • lupire 5y ago
      That's fine. Tax that property and build more market rate housing. Repeat.
  • newsclues 5y ago
    In reality older housing gets bought renovated and marketed as luxury housing, so the affordable housing is lost to the higher profit market.
    • lupire 5y ago
      Richer people will always outbid poorer people.
      • kortilla 5y ago
        There are fewer rich people than the capacity to build homes. Keep building homes until the rich stop buying them.
        • yvdriess 5y ago
          Houses are bought using money, not heads.
          • newsclues 5y ago
            Good thing governments can collect taxes or print money and hire people to build housing.
          • kortilla 5y ago
            Rich people won’t buy houses if there isn’t a stupidly low restriction on capacity. That’s the same reason they don’t hoard land.
  • dylan604 5y ago
    Please, I've never seen this in my day to day personal experience. Do you have examples of this. It sounds very suspicious to me.
    • digisign 5y ago
      Just drive to the nearest new luxury condo and count how many low-income folks just moved in. If you don't build these things, you'll have to compete in a bidding war with rich people to rent an old, renovated shitbox. Guess who will win?
      • dylan604 5y ago
        I think might have misunderstood. I know low income people are not moving into fancy new condos. I'm just not familiar with older fancy condos being opened up to low income residents. They just stay high rent, but with "charm" since they are older.
        • digisign 5y ago
          That's because extreme scarcity distorts the market to the point that old housing never gets to its natural cheap point. If they stopped building but only a few cars, a pimped out Datsun 240Z from the 70s would still look a lot better than walking, and fetch a lot better than 70s prices. In fact you could raise them with impunity. Didn't something similar happen in Cuba?
        • bombcar 5y ago
          It’s not instantaneous but it does happen - go look at some of the random lower price housing in a big city - it’s often in older neighborhoods that have “fallen on hard times”.
        • pertymcpert 5y ago
          How would you know? Compare original 30 year old apartments to new builds and see the rent difference. There is one.
• giantg2 5y ago
  Probably because it doesn't meet the preferences of renters/owners. It seems preferences drive housing cost in general. There certainly don't seem to be many (any?) new Craftsman 800 sqft houses today. Although this article seems to be more about high density apt/condos, the resource utilization of the dominate preference (larger, fancier, sfh) can affect the overall housing system (material, local labor costs). Edit: why downvote with no reply? It seems this topic must be highly political with all the unexplained downvoting with no debate.
  • bombcar 5y ago
    It’s likely that the 800 sq ft house is actually illegal nowadays - the minimum zoning requirements continually climb and many houses couldn’t be built today. There’s even special fire insurance riders to cover this.
    • giantg2 5y ago
      Interesting. In my state, I believe it's 650 sqft. Why would the fire insurance be high for smaller homes? I thought that smaller homes would be cheaper to insure since the asset is cheaper than a larger house.
      • bombcar 5y ago
        It's not - fire insurance on existing small houses is higher if you take the "rebuild it to current code" rider.
        • giantg2 5y ago
          Ah, I see. You're not insuring the current structure really. You're insuring the cost of the larger replacement structure.
• crooked-v 5y ago
  Many US cities have a massive shortage in needed housing, and none of it will ever be affordable unless quite a lot gets built quickly. It's particularly striking in California, where they ended up passing multiple state law to outright override local zoning. (It will be interesting see what happens with San Francisco by 2025, when their inability to meet housing approval mandates will turn into developers getting free reign from the state to build dense housing anywhere in the city.)
  • mjevans 5y ago
    Maybe if California finally begins to fix it's housing issues the overflow to other west coast areas (E.G. Seattle, Portland (Oregon), maybe even Vancouver BC) as well as surely all the other cities will feel a tiny bit of relief. Though most of these places have their own similar issues (E.G. urban growth boundaries or just lack of practical space without increasing density near cities; and also see a recent comment in my history about 'dense' housing not built to quality of life levels that make it desirable to live in.) * https://news.ycombinator.com/item?id=30823426#30825978 https://news.ycombinator.com/item?id=30823426#30825978
    • bobkazamakis 5y ago
      the very cool systems integration between Federal and State in practice seems to mean that California problems are California problems? Similar to the legalization of marijuana by the states, it seems like problems are pushed under the rug until the rug is a few inches off the ground, at which point it finally gets addressed. By nature, this disproportionately impacts anyone who isn't able to simply travel to another state where their a particular issue is not a problem (abortion laws, various tourism, etc). It sounds great for all the states to solve their problems individually, but where do you draw the line and have the government step in to prevent problems from getting bigger in the first place?
    • digisign 5y ago
      You touch on the fact that it is a nation-wide problem. However the implication is that it would let more people move to California instead of other places isn't a sustainable solution.
• cplusplusfellow 5y ago
  Do you have much experience with construction? I own a construction company ($10m-20m annual revenue) as my side hustle. It’s generally speaking not cheaper to refurbish something once you consider all of the factors. I’m on mobile so I can’t enumerate those but I’ll try to return on desktop where I can properly type and give an overview.
  • qeternity 5y ago
    > as my side hustle. If you don't mind my asking, what is your main hustle?
    • severine 5y ago
      C++?
      • Plasmoid 5y ago
        rust
      • cplusplusfellow 5y ago
        Yes, and Golang but I’m wanting to get into Rust soon.
    • nsonha 5y ago
      Maintaining open sourse C++ libraries for free :))
  • radu_floricica 5y ago
    But how about you don't refurbish? The point is satisficing vs optimizing. An old house or apartment is already livable, in a supermajority of cases. It "needs" nothing, in the strictest sense of the word, and putting it through capital repairs will very likely put it in the red, possibly even compared to building a new house. Sure, some repairs and improvements may be useful. A universal coat of paint is probably the lowest hanging fruit, mostly due to the broken window effect, and especially if it includes common spaces. Very cheap credits for stuff that will definitely pay itself in a few years, like thermal insulation or heat pumps, depending on climate. Regular checks to make sure it passes very very low safety standards. And that's about it.
• zozbot234 5y ago
  Right, you don't build affordable housing, and you don't even reserve housing as "affordable" (that's gratuitously inviting corruption via basically giving away underpriced housing as a 'gift' to cronies and associates). You build as much new housing as you can afford to, and let older housing filter down to "affordable" levels.
  • dylan604 5y ago
    >let older housing filter down to "affordable" levels. you're forgetting the part where it is the older housing that is currently affordable that is getting demolished so that this new construction can use that land instead.
    • lupire 5y ago
      That is why the number that (should) matter for regulation is not price, it's net change in unit count.
      • dylan604 5y ago
        I like this metric as well. However, if you displace X number of lower income residents with your new fancy schmancy high dollar condos, just increasing the unit count does not allow the displaced residents to be able to afford to live where they currently were. More than likely, they will be pushed further away from city centers. This causes more burden especially if the new location places them at a distance that mass transit does not reach.
    • asdff 5y ago
      That's not what I observe in my city. They tear out a few single family homes that you would need a deposit of $200k to even be competitive for, thats probably why its a developer buying it vs working people anyhow, or its like a few old tire shops occupying a parcel caddy corner from a subway station or a few bus lines that really should be repurposed into something more useful the the community anyhow. Hardly ever do you see multi family older housing being demoed and rebuilt because these things get more complicated with more tenants.
• KoftaBob 5y ago
  > Many US cities have large stocks of older housing in moderate condition and which is already occupied. In order for housing supply to keep up with demand, it needs to increase, hence new construction.
  • 9wzYQbTYsAIc 5y ago
    I’m not sure if you are aware of this, but the commenter is likely referring to US cities and their stock of abandoned, unlivable, or otherwise city-owned houses. You can find houses for sale by a city where the asking price can be as low as four figures. Sometimes those houses even come with the full list of required repairs and an estimate of the costs. Spending $20k to buy a house that needs $60k in repairs can work out for some situations.
• jefftk 5y ago
  At least around here (Boston), the old housing in poor condition is the affordable housing. This often gets called "naturally occurring affordable housing". But it's not enough, which is why even housing in poor condition is so expensive.
• kelnos 5y ago
  The existing housing is likely already occupied. What do you do with those tenants?
• caconym_ 5y ago
  Existing housing already has people living in it. Prices are so high because demand is high and supply is low; if your model for creating new affordable housing involves incentivizing for-profit developers to buy existing supply in this kind of market and sell or rent units to people who could not afford to do so themselves without the middleman, who is presumably being propped up by public money incentives, why even have the middleman? You could just hand out rent vouchers (or whatever) and achieve the same result for less. New high-density construction on lots that were previously low-density is better all around: It's more likely to be profitable for the developer, and it increases supply in a market that sorely needs it.
  • JaceLightning 5y ago
    Handing out vouchers will increase the demand causing prices to rise. If you give people $10,000 to buy a house, congrats! You just made houses $10,000 more expensive. Do you live in a skyscraper? Does anyone want to live in a skyscraper? I don't.
    • caconym_ 5y ago
      > Handing out vouchers will increase the demand causing prices to rise. If you give people $10,000 to buy a house, congrats! You just made houses $10,000 more expensive. To be fair, I think you are glossing over the fact that only handing out said vouchers to lower-income people will cause their buying power in the market to proportionally increase relative to wealthier buyers. However, you are absolutely right that this strategy will increase demand without increasing supply, and overall drive prices higher. I should clarify that I don't think it's a good idea; in fact, I think it's an absolutely absurd idea for precisely this reason. How anyone can suggest making housing more affordable by taking actions that will obviously make it more expensive is beyond me. This sort of thing probably only makes sense in the eyes of wealthy urban "liberals" who want to appear virtuous while maintaining their property values, and from far-left perspectives with no qualms about making life worse for the middle class to achieve their social justice-oriented goals for a relatively small fraction of the population. > Do you live in a skyscraper? Does anyone want to live in a skyscraper? I don't. I'm not sure of the relevance here.
• ashtonkem 5y ago
  Because its hard to find existing construction that’s 1. In the right location. 2. Dense enough. 3. Cheap enough. 4. In good condition and zoned properly. The last bullet point is the real kicker. It’s very tempting to point at older real estate, often shuttered light industry or commercial, and ask about converting it. Unfortunately a lot of these buildings are illegal/hard to rezone as residential, or have an uncertain cost to convert them for habitation. And of course the financiers of any project hate uncertainty.
• ricardobayes 5y ago
  If they are in good condition, how do you plan to reduce their prices? If they are not, doing them up usually is comparable to a new build.
• deleted 5y ago
  [deleted]
• gumby 5y ago
  It’s because of the time base. You need a diverse supply because you have a diverse candidate pool (both people with money, not all who feel like moving right now, and people without, who desperately do). Also inexpensive housing is cheaper to build than high end housing so there’s more bang for the buck (more impact on the housing shortage/$) than building the same number of high end homes.
• hackbinary 5y ago
  The problem with the housing crisis we are facing is one of supply, therefore we need to build additional housing stock.
• gremlinsinc 5y ago
  I want to throw up a gofundme and buy some land, and just start 'adding' affordable housing in rural areas. Think 50 acres, 10% will be an airbnb glamp-camp for some revenue, 20% farm area, 20% common buildings for work and storage and things, then the rest will be traditional 'tiny homes' or yurts or earth-bag homes, etc. Maybe dig a deep hole and bury a container home, dig out some holes for a sunroof, etc... Good insulation. Very affordable design and dev. Not everything needs to be old-school housing, it just needs to get the job done: Warm in winter, cool in summer, decent access to utilities and esp. clean water. The more eco-friendly the better and solar panels would be nice.