16 ms·

Is there a housing shortage or not?

107 points by telotortium 4y ago

thghtihadanacct 4y ago
Well written and researched. Its not about how many houses are available but how many are available where people want to be ... theres plenty of empty houses in Detroit, etc. I appreciate how this points out that areas that cant support more housing, or are already very desirable, fall into the group of 'they must need more houses'.
- onionisafruit 4y ago
  It’s because people are no longer content with living where they are from. We all prefer to live in the very best city until it isn’t the very best city anymore because everybody moved there.
  - majormajor 4y ago
    I've seen various reports that the reverse is true, people are moving away from their family less than in the past, although I'm struggling to find the right search terms ("migration" is flooded with immigration results; "mobility" is turning up economic stuff...). Compare today with a century ago: how many places went from "barely on the map" to "huge metropolis" in the USA since then? How many look poised to do the same over the next century? And I think when they are moving, they're similarly not moving to as "new" or "small" destinations - e.g. tons of sunbelt towns saw very rapid growth from young adults moving there in the 60s-90s. But many of those towns are still the ones seeing a lot of growth; anecdotally, my parents moved to Dallas after college. Where's the "new Dallas"? The cheaper towns with jobs that are being promoted are still the same ones as fifty years ago, and they're not nearly as cheap as they were then anymore. Combine that with rising population from immigration + the kids who grew up there and didn't move away, and you see a lot of cost inflation.
    - onionisafruit 4y ago
      You make a good point. I have no data to back up the comment you replied to. It’s just how I feel being from Austin and watching it grow way too fast. I wish I had another home town to move back to. I should have thought through my comment a bit more. Today I did some genealogy research and was amazed at how often my relatives moved in the 1700s and 1800s. It wasn’t uncommon for them to move cities three or four times during their life in a time when you couldn’t just rent a uhaul and head down the road.
      - majormajor 4y ago
        Yeah, I don't know how to get out of that dilemna. It's a behavioral change for the whole society with big impact: if your parents moved from LA to Dallas to escape rising costs (as a friend of mine's did in middle school), where do you move when the rising costs come for you? Why aren't there new destinations in the same way? Or is it that now that the prices are up in so many places, the behaviors will revert back? Is it gonna be places like Boise post-Covid? Will anyone do that same level of massive development? Would they be allowed to?
        onionisafruit 4y ago
        Maybe we just need to emulate my ancestors and move on to the next opportunity every 20 years. All I want at this point is to be near my grandkids. I don’t care where that is.
        lotsofpulp 4y ago
        > Why aren't there new destinations in the same way A few possible reasons that spring to mind are population growth, high quality information quickly traveling around the world rapidly removing arbitrage opportunities, automation and outsourcing obviating certain businesses in certain areas, technology and automation allowing economies of scale such that big only get bigger and suck the air out of the room for small players.
      - bsder 4y ago
        > It wasn’t uncommon for them to move cities three or four times during their life in a time when you couldn’t just rent a uhaul and head down the road. Except that you only needed one person to find a better job back then. The problem with now is that you need two people two find better jobs simultaneously. This was blocking people from moving when better opportunities pop up. I suspect this is more responsible for the Great Resignation than anything else. Once one person of a couple loses their job and has to start a job search, there's no longer anything slowing down the other from taking a better offer even if you have to move.
  - Johnny555 4y ago
    We all prefer to live in the very best city until it isn’t the very best city anymore because everybody moved there. Well, it was the best city until just after I moved there, then it became untenable and people should stop moving there.
  - bigDinosaur 4y ago
    A good city should be able to withstand people moving there. Otherwise it was probably only good for reasons that aren't actually inherently city qualities, such as culture or access to nature or cheap land.
    - tjr225 4y ago
      Well by that measure “good” cities are very rare, and thousands of years of societies of dredged on building cities without a single thought towards what a “good” city should be. Maybe you should start a lecture or something?
    - refurb 4y ago
      A good city can't withstand people moving there and maintaining the same standard of living at the same cost as earlier inhabitants. And I'm not sure we'd want it to anyways? When prices get too high for later folks to move, then that's a great signal to actually go elsewhere. I'm not sure why we'd want a system where everyone just migrated to one or two cities in the entire US. I've seen those cities in Asia that have populations of 15M or 20M and yeah, seems super inefficient once you get to a certain size.
      - bigDinosaur 4y ago
        Fair point. My ideal model for cities is what Germany does, lots of cities with a population of ~600k, medium density, lots of choice and good connections between cities.
  - brigade 4y ago
    If by "best" you mean "more job opportunities." That's always been true, and earlier migrants always hate the later migrants. At most, you could say that the preference of living in the city vs. its suburbs flipped compared to 20 years ago, which had previously flipped when cars made suburbs commutable.
  - Ericson2314 4y ago
    > until it isn’t the very best city anymore because everybody moved there. Wat. Cities are not parties that get diluted with lame people. London and Paris grew large and rich in comparison to their respective countries. To the extent there is an equilibrium at play, it is a power law. There is no rotating most popular city, not withstanding what people think about San Francisco. Density wins, and the winners keep on winning absent some sort of disaster. I'm sorry, but this seems like a classic example of pulling out some Hobbesian cynicism as a calling card for classy sober thinking...but in this case it's dead wrong.
    - teakettle42 4y ago
      > Wat. Cities are not parties that get diluted with lame people. If you fill a party past it’s optimal capacity, is the same kind of party? Are you still likely to enjoy being there? Why is a city any different? There are absolutely problems that only emerge with scale, and scale non-linearly with population and density. > London and Paris grew large and rich in comparison to their respective countries. “Large and rich” aren’t the values that most/many people want their communities to optimize for.
      - pm90 4y ago
        > “Large and rich” aren’t the values that most/many people want their communities to optimize for. Maybe. But for the high growth job generating urban centers in todays US that’s certainly the case.
      - Ericson2314 4y ago
        > optimal capacity Cities to do not have fixed capacity. > There are absolutely problems that only emerge with scale, and scale non-linearly with population and density. The biggest thing that doesn't scale is private car usage. But private car usage is terrible. I have not heard of extant cities hitting fundamental scaling constraints in and other way. > “Large and rich” aren’t the values that most/many people want their communities to optimize for. Then why aren't rents lower?
        4y ago
  - nerfhammer 4y ago
    On the contrary, labor mobility has declined precipitously since WWII, and this is a bad thing because it means people can't move to where there is a better job for them
  - paxys 4y ago
    "This city used to be perfect but now there are too many people here ruining it" – said by every resident of every city in every civilization in the world at any given point in their history.
- asdff 4y ago
  IMO looking at it as want to be somewhere is a bit simplistic. Ultimately there are that many people in pricey places because they are working jobs that can support them there. Sure half of boston can go to detroit and find lower prices, but will there be jobs available to them in detroit? and once there are jobs available to them at this talent level (given the high professional degrees per capita in boston), who is to say prices don't also rise in response if detroit fails to build housing in response to the increase in population driven by this job growth? Building housing in desirable areas is not to just keep piling people there, its to house labor where the growing economic activity is in demand for housing for labor.
coward123 4y ago
Solid analysis. If I might add some factors about my particular market that might be similar to other people's markets that I believe confound the issues: -- Builders are not building the kind of properties that buyers want. In my market these are suburban tract housing generally at a sub-$500K price point with low-end construction materials and finishes. Thus, buyers say "there's nothing to buy" because they aren't the kind of houses they want. They end up buying them anyway because it's all they can afford and/or other factors like proximity to work or family. But, looking at days on market, etc, relative to other properties, it's pretty clear buyers of these homes are acting more out of desperation. -- Obsolescence. We have a lot of (older) houses in our area that are simply not conducive to modern living and until someone is able to do major overhauls, they will always be less desirable. Think tiny parlor rooms, bedrooms that barely fit a double bed, kitchens closed off from the rest of the house, single bathrooms, etc. -- Non-turn key properties. My market is such that many local buyers live paycheck to paycheck and will not be able to afford renovations of any kind. Thus, the people buying non-turnkey properties are our out of area newcomers (of which there are many) but these buyers are such that they tend to want more amenities than our existing housing stock can provide. So basically anything not turnkey is sitting longer even in a competitive market. So my point in all of the above is to say that in some markets, I believe there is more inventory than believed, but because it is not in line with market expectations you end up with the general public believing there are limited opportunities.
- lotsofpulp 4y ago
  > In my market these are suburban tract housing generally at a sub-$500K price point with low-end construction materials and finishes. Thus, buyers say "there's nothing to buy" because they aren't the kind of houses they want. There is something to buy, but there is nothing to buy at the price buyers want to pay. Developers can get away with less expensive finishes because they know demand is still so high relative to supply that the houses will still be sold.
  - coward123 4y ago
    I'd actually be ok with them using less expensive finishes so long as the houses themselves were built to last more than 20 years... there's a house I drive past regularly in a development where it's obvious that the sheet siding wasn't even put up square. I mean - what do the studs, the foundation, the insulation, etc in that house look like if they couldn't even get the seams on the siding to hang correctly? The finishers all get swapped out every 5-15 years as fads change, and they are the easiest things for homeowners to do themselves (IE: a little Home Depot style remodel). But, it gets a lot harder to fix things in the walls that weren't done correctly from the beginning.
humaniania 4y ago
How many houses are AirBNBs and similar?
- missedthecue 4y ago
  The US has 660,000 Airbnb listings, but of course, not all of them are 'entire place' rentals. A lot of spare rooms and guest-houses.
  - imperfect_light 4y ago
    I live in Seattle, one of the hottest housing markets in the country. If I go to Airbnb and select "seattle" "entire place" "house" and "flexible" it comes up with 836 options. SF had roughly the same 700-800 (and a few from the larger bay area bled in). That doesn't seem very significant in cities of roughly 750K/875K (within city limits of Seattle and SF respectively)
jsiaajdsdaa 4y ago
There is a shortage of good housing. Humans are not meant to live in 100 year old rat trap paper thin apartments.
- batshit_beaver 4y ago
  Tell that to the Europeans. Unless we invent the ability to build single family homes into the 4th dimension, there is no physical way to build enough houses in good locations for everyone. And we can support only a certain amount of horizontal expansion, because eventually the cost of infrastructure and services becomes economically infeasible.
  - nradov 4y ago
    There are lots of good locations. Some people are just too picky. There's nothing wrong with living in Nashville or Cleveland. It's stupid to keep cramming more and more people into a few coastal cities.
    - bcrosby95 4y ago
      Potential future political developments might make that untenable for many.
    - asdff 4y ago
      People move to where they get hired and these coastal cities have a lot of demand for labor. If there were larger job markets in nashville or cleveland there would be larger populations. Cleveland in particular you can trace the population decline with the loss of manufacturing jobs from the downtown area and the increase of jobs in the exurbs.
    - autoexec 4y ago
      > It's stupid to keep cramming more and more people into a few coastal cities. Climate change is going to help solve that problem for us. I expect a lot of folks to be forced inland, if not by rising water, then by storms or water shortages. It's looking like we may lose large parts of the western US to heat and desertification too, but plenty of "fly over states" could end up being a lot more popular.
s1mon 4y ago
The comparison between the Bay Area and Atlanta is interesting. “There is essentially zero correlation - the metros with the largest rent increases had added population / added housing ratios no different than metros with smaller rent increases.” What this seems to be leaving out is the lack of much of an escape valve in the Bay Area. Where there’s density, there could be more - with zoning changes and years of red tape. Where there’s little density, geography is against much of anything. You have serious hills/mountains, the bay and the ocean dividing things up. Where there’s land with little or no housing, there’s no drinking water and/or regulations against building and/or those areas aren’t very well connected. Atlanta seems to be one gigantic sprawl that steadily transitions from relatively low density urban to suburban. If you can’t afford/find housing in the metro proper, just go a few miles further out.
- ceeplusplus 4y ago
  Half the peninsula is forests and grass fields with nothing there. You can't be serious? There's huge NIMBYism preventing those areas from being developed.
  - tjr225 4y ago
    Nothing but pristine natural beauty? Did you think this comment through?
  - stevenwoo 4y ago
    Someone owns that open space land. It cannot be developed unless one buys out the owners like San Francisco Water District (most of the open space visible on 280 for a long stretch is Crystal Springs Reservoir and the drainage into it even though a lot of the water comes from far away like Hetchy Hetch.) or the Mid Peninsula Open Space District or Santa Clara Water District (several large reservoirs and the drainage into them are only for recharging the underwater aquifers - if one builds over it, the reservoirs do not recharge and subsidence will be much worse like the Central Valley) or park land. The NIMBYism is people preventing high density development in places like Palo Alto.
- asdff 4y ago
closeparen 4y ago
Is population growth a good measure of demand? You can’t show up in the local census unless you actually land a place to live. The priced-out cohort seems relevant. Meanwhile fertility among the adult incumbents does raise the population, even though those children won’t demand housing units for at least 18 years. Maybe San Francisco has added a bunch of professionals living like college students while Atlanta has added a bunch of actual babies.
TimPC 4y ago
Georgists have known for a long time about the tendency for land prices to rise in a way that captures a sizeable percentage of the gains of labour (income). This tax on productivity is best solved through a land value tax.
- teakettle42 4y ago
  I already think property taxes are immoral, in that they tax unrealized value in perpetuity. I’m paying $2k more in property taxes this year because a bunch of very wealthy out-of-state home owners have decided they want to live here, and have driven up prices to an extreme. I’m not going to be convinced that I should be ruinously taxed on the unrealized value of my land in order to force me to develop it according to the whims of whatever entity we entrust to socially engineer land-use.
  - melissalobos 4y ago
    > I should be ruinously taxed I don't know where you are getting that it would be a ruinous tax. It should also be offset by not having other types of taxes in a pure Georgian system.
    - throwaway0a5e 4y ago
      >I don't know where you are getting that it would be a ruinous tax. I'm sure the "force people with existing single family homes to develop them into something else or sell them to someone who will" rhetoric the proponents of such taxes sling around has something to do with it.
  - atdrummond 4y ago
    Why do you think land taxes would be ruinous? The only single family home owners who would see major tax increases are those in markets like the Bay Area - many of whom are already paying well below what they would nearly anywhere else in the country due to their legislatively capped house value. I also find the morality argument interesting, as land has some unique attributes as an economic good that one could use to make very convincing arguments for the immorality of land ownership itself.
readthenotes1 4y ago
Just talked with someone in the concrete business. There is a national shortage of Portland cement (imports restricted, new plants regulated out) and high quality flyash (these people got it from a place that used to ash from coal burning). That can't help house prices...
usrn 4y ago
This is the result of the way we've been lending money. Before 2008 you could easily get a loan for constructing new houses so many people did. Now new families can only get a loan for existing houses, this necessarily constrained supply and I would argue is the primary driver in the housing crunch. Bring back land loans and the problem will solve itself.
- asdff 4y ago
  A lot of areas are already built out and there's nothing left for greenfield single family home development. Zoning needs to be fixed before building can even happen. There is plenty of demand and money ready for development.
  - usrn 4y ago
    The US really is mostly empty and zoning is the way it is because the infrastructure needs to be upgraded first.
    - asdff 4y ago
      Yeah but alot of it is too inaccessible. The dense areas like LA county are built out to the mountainsides. What's left is desert that has no good access to the urban core containing the rest of the population, due to the massive mountain range in the way and only like two good routes that are nowhere near a convenient straight shot through. Its a lot easier to just think about how we can stack up people where they already are, where the jobs already are, then to go off scarring up more and more of the earth with development. There's plenty scarred already, lets just build up there.
DoreenMichele 4y ago
For instance, consider a simplified model where every family has two kids that live with them until they’re 18. The ACA (Obamacare) extended coverage to age 26 for children because about half of young adults up to age 26 were living with their parents Since WW2, we've torn down about a million SROs.* We have also largely zoned out of existence the ability to build new Missing Middle housing. We have a dire shortage of a certain kind of housing: small, inexpensive housing near amenities. This is true nationwide. * https://en.m.wikipedia.org/wiki/Single_room_occupancy#:~:text=Single%20room%20occupancy%20%28more%20commonly%20abbreviated%20to%20SRO%29,a%20bed%2C%20chair%2C%20and%20sometimes%20a%20small%20desk https://en.m.wikipedia.org/wiki/Single_room_occupancy#:~:tex....
- isx726552 4y ago
  Boarding houses need to make a comeback.
  - ruined 4y ago
    They have, informally. There is a huge demographic of people in every major city who have never/rarely signed a lease, but simply sublet a room from an official lease-holder, often against the actual terms of the lease. These people generally tend to file taxes as individual households, despite all sharing what is statistically a single unit of housing. I wonder how this plays with the data in the article.
    - skrbjc 4y ago
      I was thinking the same thing. So many young people share houses in places like the Bay Area, but it doesn’t seem to be included in these numbers.
  - pkdpic 4y ago
    Thats a really interesting thought. I would guess there're are a lot of untapped ideas from the early 20th / 19th century that deserve reevaluation / resurrection. Like drinking more. I'm experimenting with that one. I'll let everyone know how it turns out on substack when I'm done.
countvonbalzac 4y ago
Isn't land use restriction just a proxy for added housing, so with population growth being equal isn't it a proxy for the added population / added housing ratio?
hn_throwaway_99 4y ago
I thought this was a great article, but one thing that I think was missing was an analysis of how rural vs. urban/suburban desirability has greatly changed housing demand. In the past 20-30 years, there has been a huge concentration of wealth in major metros, and many rural areas have been "hollowed out", with most young people looking to "get out" if they can. Some of this is anecdotal, but is also supported by various data sets. Even during the pandemic, where many folks left the cities and went to other areas, it was still that a lot of "tier 2" metros (think Boise, Charlotte, etc.) that took the influx. So my concern is that even if there are the same number of houses in the US nationwide, many of those houses have become completely undesirable as people move to areas with opportunity. Just think of all the boarded up $1 houses in Detroit, for example. Just think it would be interesting to see how much "low valued" housing there is (i.e. housing that has lost value or been stagnant) to calculate how much concentration of housing demand has been going on.
asdff 4y ago
Looking at things nationally is a little unclear imo. Locally the shortage is evident. In LA county back in the 1960s when prices were very affordable, the area was zoned for a population of 10 million people. Today after rezoning decades ago, its zoned for about half that, and nearly completely built out, and what do you know prices are high as a result. Capacity was available then it became scarce and prices rose.
yobbo 4y ago
In the graph: "Housing Units in the United States", one should point out that number of "Housing Units" is an upper bound on number of "Households". A gap between "Housing Units" and "Households" indicates some slack. When these two curves coincides, everyone is buying at the margin.
rufus_foreman 4y ago
What is it that people say here when there's an article that claims there is a shortage of labor? Raise wages (the price of labor) and the shortage will go away. Why doesn't the same principle apply here? We can just raise housing prices and the shortage will go away.
sam-s 4y ago
I am surprised no one mentions the elephant in the room - rent control. It makes it harder to discover the true rent (one has to pay a large lump sum to the previous tenant to get a rent-controlled apartment) and it discourages rental housing construction. Do you really think that these effects are best observable indirectly, as rent and construction?!
- wildrhythms 4y ago
  Why is your solution to abolish rent control rather than propose a public housing solution?
robocat 4y ago
One misconception in the article is that lots of people would like two houses, for example vacation homes, or work and weekend homes. They say "At the extreme end, you can’t have more households than there are people", which I think is incorrect thinking. It really matters when looking at houses getting built, because if those houses are holiday homes, then most analysts really screw up their analyses because the averages look like they improve, but actually the majority of people have no improvement.

107 points by telotortium 4y ago

Well written and researched. Its not about how many houses are available but how many are available where people want to be ... theres plenty of empty houses in Detroit, etc. I appreciate how this points out that areas that cant support more housing, or are already very desirable, fall into the group of 'they must need more houses'.

onionisafruit 4y ago
It’s because people are no longer content with living where they are from. We all prefer to live in the very best city until it isn’t the very best city anymore because everybody moved there.
- majormajor 4y ago
  I've seen various reports that the reverse is true, people are moving away from their family less than in the past, although I'm struggling to find the right search terms ("migration" is flooded with immigration results; "mobility" is turning up economic stuff...). Compare today with a century ago: how many places went from "barely on the map" to "huge metropolis" in the USA since then? How many look poised to do the same over the next century? And I think when they are moving, they're similarly not moving to as "new" or "small" destinations - e.g. tons of sunbelt towns saw very rapid growth from young adults moving there in the 60s-90s. But many of those towns are still the ones seeing a lot of growth; anecdotally, my parents moved to Dallas after college. Where's the "new Dallas"? The cheaper towns with jobs that are being promoted are still the same ones as fifty years ago, and they're not nearly as cheap as they were then anymore. Combine that with rising population from immigration + the kids who grew up there and didn't move away, and you see a lot of cost inflation.
  - onionisafruit 4y ago
    You make a good point. I have no data to back up the comment you replied to. It’s just how I feel being from Austin and watching it grow way too fast. I wish I had another home town to move back to. I should have thought through my comment a bit more. Today I did some genealogy research and was amazed at how often my relatives moved in the 1700s and 1800s. It wasn’t uncommon for them to move cities three or four times during their life in a time when you couldn’t just rent a uhaul and head down the road.
    - majormajor 4y ago
      Yeah, I don't know how to get out of that dilemna. It's a behavioral change for the whole society with big impact: if your parents moved from LA to Dallas to escape rising costs (as a friend of mine's did in middle school), where do you move when the rising costs come for you? Why aren't there new destinations in the same way? Or is it that now that the prices are up in so many places, the behaviors will revert back? Is it gonna be places like Boise post-Covid? Will anyone do that same level of massive development? Would they be allowed to?
      - onionisafruit 4y ago
        Maybe we just need to emulate my ancestors and move on to the next opportunity every 20 years. All I want at this point is to be near my grandkids. I don’t care where that is.
      - lotsofpulp 4y ago
        > Why aren't there new destinations in the same way A few possible reasons that spring to mind are population growth, high quality information quickly traveling around the world rapidly removing arbitrage opportunities, automation and outsourcing obviating certain businesses in certain areas, technology and automation allowing economies of scale such that big only get bigger and suck the air out of the room for small players.
    - bsder 4y ago
      > It wasn’t uncommon for them to move cities three or four times during their life in a time when you couldn’t just rent a uhaul and head down the road. Except that you only needed one person to find a better job back then. The problem with now is that you need two people two find better jobs simultaneously. This was blocking people from moving when better opportunities pop up. I suspect this is more responsible for the Great Resignation than anything else. Once one person of a couple loses their job and has to start a job search, there's no longer anything slowing down the other from taking a better offer even if you have to move.
- Johnny555 4y ago
  We all prefer to live in the very best city until it isn’t the very best city anymore because everybody moved there. Well, it was the best city until just after I moved there, then it became untenable and people should stop moving there.
- bigDinosaur 4y ago
  A good city should be able to withstand people moving there. Otherwise it was probably only good for reasons that aren't actually inherently city qualities, such as culture or access to nature or cheap land.
  - tjr225 4y ago
    Well by that measure “good” cities are very rare, and thousands of years of societies of dredged on building cities without a single thought towards what a “good” city should be. Maybe you should start a lecture or something?
  - refurb 4y ago
    A good city can't withstand people moving there and maintaining the same standard of living at the same cost as earlier inhabitants. And I'm not sure we'd want it to anyways? When prices get too high for later folks to move, then that's a great signal to actually go elsewhere. I'm not sure why we'd want a system where everyone just migrated to one or two cities in the entire US. I've seen those cities in Asia that have populations of 15M or 20M and yeah, seems super inefficient once you get to a certain size.
    - bigDinosaur 4y ago
      Fair point. My ideal model for cities is what Germany does, lots of cities with a population of ~600k, medium density, lots of choice and good connections between cities.
- brigade 4y ago
  If by "best" you mean "more job opportunities." That's always been true, and earlier migrants always hate the later migrants. At most, you could say that the preference of living in the city vs. its suburbs flipped compared to 20 years ago, which had previously flipped when cars made suburbs commutable.
- Ericson2314 4y ago
  > until it isn’t the very best city anymore because everybody moved there. Wat. Cities are not parties that get diluted with lame people. London and Paris grew large and rich in comparison to their respective countries. To the extent there is an equilibrium at play, it is a power law. There is no rotating most popular city, not withstanding what people think about San Francisco. Density wins, and the winners keep on winning absent some sort of disaster. I'm sorry, but this seems like a classic example of pulling out some Hobbesian cynicism as a calling card for classy sober thinking...but in this case it's dead wrong.
  - teakettle42 4y ago
    > Wat. Cities are not parties that get diluted with lame people. If you fill a party past it’s optimal capacity, is the same kind of party? Are you still likely to enjoy being there? Why is a city any different? There are absolutely problems that only emerge with scale, and scale non-linearly with population and density. > London and Paris grew large and rich in comparison to their respective countries. “Large and rich” aren’t the values that most/many people want their communities to optimize for.
    - pm90 4y ago
      > “Large and rich” aren’t the values that most/many people want their communities to optimize for. Maybe. But for the high growth job generating urban centers in todays US that’s certainly the case.
    - Ericson2314 4y ago
      > optimal capacity Cities to do not have fixed capacity. > There are absolutely problems that only emerge with scale, and scale non-linearly with population and density. The biggest thing that doesn't scale is private car usage. But private car usage is terrible. I have not heard of extant cities hitting fundamental scaling constraints in and other way. > “Large and rich” aren’t the values that most/many people want their communities to optimize for. Then why aren't rents lower?
      - 4y ago
- nerfhammer 4y ago
  On the contrary, labor mobility has declined precipitously since WWII, and this is a bad thing because it means people can't move to where there is a better job for them
- paxys 4y ago
  "This city used to be perfect but now there are too many people here ruining it" – said by every resident of every city in every civilization in the world at any given point in their history.
asdff 4y ago
IMO looking at it as want to be somewhere is a bit simplistic. Ultimately there are that many people in pricey places because they are working jobs that can support them there. Sure half of boston can go to detroit and find lower prices, but will there be jobs available to them in detroit? and once there are jobs available to them at this talent level (given the high professional degrees per capita in boston), who is to say prices don't also rise in response if detroit fails to build housing in response to the increase in population driven by this job growth? Building housing in desirable areas is not to just keep piling people there, its to house labor where the growing economic activity is in demand for housing for labor.

coward123 4y ago

Solid analysis. If I might add some factors about my particular market that might be similar to other people's markets that I believe confound the issues: -- Builders are not building the kind of properties that buyers want. In my market these are suburban tract housing generally at a sub-$500K price point with low-end construction materials and finishes. Thus, buyers say "there's nothing to buy" because they aren't the kind of houses they want. They end up buying them anyway because it's all they can afford and/or other factors like proximity to work or family. But, looking at days on market, etc, relative to other properties, it's pretty clear buyers of these homes are acting more out of desperation. -- Obsolescence. We have a lot of (older) houses in our area that are simply not conducive to modern living and until someone is able to do major overhauls, they will always be less desirable. Think tiny parlor rooms, bedrooms that barely fit a double bed, kitchens closed off from the rest of the house, single bathrooms, etc. -- Non-turn key properties. My market is such that many local buyers live paycheck to paycheck and will not be able to afford renovations of any kind. Thus, the people buying non-turnkey properties are our out of area newcomers (of which there are many) but these buyers are such that they tend to want more amenities than our existing housing stock can provide. So basically anything not turnkey is sitting longer even in a competitive market. So my point in all of the above is to say that in some markets, I believe there is more inventory than believed, but because it is not in line with market expectations you end up with the general public believing there are limited opportunities.

lotsofpulp 4y ago
> In my market these are suburban tract housing generally at a sub-$500K price point with low-end construction materials and finishes. Thus, buyers say "there's nothing to buy" because they aren't the kind of houses they want. There is something to buy, but there is nothing to buy at the price buyers want to pay. Developers can get away with less expensive finishes because they know demand is still so high relative to supply that the houses will still be sold.
- coward123 4y ago
  I'd actually be ok with them using less expensive finishes so long as the houses themselves were built to last more than 20 years... there's a house I drive past regularly in a development where it's obvious that the sheet siding wasn't even put up square. I mean - what do the studs, the foundation, the insulation, etc in that house look like if they couldn't even get the seams on the siding to hang correctly? The finishers all get swapped out every 5-15 years as fads change, and they are the easiest things for homeowners to do themselves (IE: a little Home Depot style remodel). But, it gets a lot harder to fix things in the walls that weren't done correctly from the beginning.

humaniania 4y ago

How many houses are AirBNBs and similar?

missedthecue 4y ago
The US has 660,000 Airbnb listings, but of course, not all of them are 'entire place' rentals. A lot of spare rooms and guest-houses.
- imperfect_light 4y ago
  I live in Seattle, one of the hottest housing markets in the country. If I go to Airbnb and select "seattle" "entire place" "house" and "flexible" it comes up with 836 options. SF had roughly the same 700-800 (and a few from the larger bay area bled in). That doesn't seem very significant in cities of roughly 750K/875K (within city limits of Seattle and SF respectively)

jsiaajdsdaa 4y ago

There is a shortage of good housing. Humans are not meant to live in 100 year old rat trap paper thin apartments.

batshit_beaver 4y ago
Tell that to the Europeans. Unless we invent the ability to build single family homes into the 4th dimension, there is no physical way to build enough houses in good locations for everyone. And we can support only a certain amount of horizontal expansion, because eventually the cost of infrastructure and services becomes economically infeasible.
- nradov 4y ago
  There are lots of good locations. Some people are just too picky. There's nothing wrong with living in Nashville or Cleveland. It's stupid to keep cramming more and more people into a few coastal cities.
  - bcrosby95 4y ago
    Potential future political developments might make that untenable for many.
  - asdff 4y ago
    People move to where they get hired and these coastal cities have a lot of demand for labor. If there were larger job markets in nashville or cleveland there would be larger populations. Cleveland in particular you can trace the population decline with the loss of manufacturing jobs from the downtown area and the increase of jobs in the exurbs.
  - autoexec 4y ago
    > It's stupid to keep cramming more and more people into a few coastal cities. Climate change is going to help solve that problem for us. I expect a lot of folks to be forced inland, if not by rising water, then by storms or water shortages. It's looking like we may lose large parts of the western US to heat and desertification too, but plenty of "fly over states" could end up being a lot more popular.

s1mon 4y ago

The comparison between the Bay Area and Atlanta is interesting. “There is essentially zero correlation - the metros with the largest rent increases had added population / added housing ratios no different than metros with smaller rent increases.” What this seems to be leaving out is the lack of much of an escape valve in the Bay Area. Where there’s density, there could be more - with zoning changes and years of red tape. Where there’s little density, geography is against much of anything. You have serious hills/mountains, the bay and the ocean dividing things up. Where there’s land with little or no housing, there’s no drinking water and/or regulations against building and/or those areas aren’t very well connected. Atlanta seems to be one gigantic sprawl that steadily transitions from relatively low density urban to suburban. If you can’t afford/find housing in the metro proper, just go a few miles further out.

ceeplusplus 4y ago
Half the peninsula is forests and grass fields with nothing there. You can't be serious? There's huge NIMBYism preventing those areas from being developed.
- tjr225 4y ago
  Nothing but pristine natural beauty? Did you think this comment through?
- stevenwoo 4y ago
  Someone owns that open space land. It cannot be developed unless one buys out the owners like San Francisco Water District (most of the open space visible on 280 for a long stretch is Crystal Springs Reservoir and the drainage into it even though a lot of the water comes from far away like Hetchy Hetch.) or the Mid Peninsula Open Space District or Santa Clara Water District (several large reservoirs and the drainage into them are only for recharging the underwater aquifers - if one builds over it, the reservoirs do not recharge and subsidence will be much worse like the Central Valley) or park land. The NIMBYism is people preventing high density development in places like Palo Alto.
asdff 4y ago

closeparen 4y ago

Is population growth a good measure of demand? You can’t show up in the local census unless you actually land a place to live. The priced-out cohort seems relevant. Meanwhile fertility among the adult incumbents does raise the population, even though those children won’t demand housing units for at least 18 years. Maybe San Francisco has added a bunch of professionals living like college students while Atlanta has added a bunch of actual babies.

TimPC 4y ago

Georgists have known for a long time about the tendency for land prices to rise in a way that captures a sizeable percentage of the gains of labour (income). This tax on productivity is best solved through a land value tax.

teakettle42 4y ago
I already think property taxes are immoral, in that they tax unrealized value in perpetuity. I’m paying $2k more in property taxes this year because a bunch of very wealthy out-of-state home owners have decided they want to live here, and have driven up prices to an extreme. I’m not going to be convinced that I should be ruinously taxed on the unrealized value of my land in order to force me to develop it according to the whims of whatever entity we entrust to socially engineer land-use.
- melissalobos 4y ago
  > I should be ruinously taxed I don't know where you are getting that it would be a ruinous tax. It should also be offset by not having other types of taxes in a pure Georgian system.
  - throwaway0a5e 4y ago
    >I don't know where you are getting that it would be a ruinous tax. I'm sure the "force people with existing single family homes to develop them into something else or sell them to someone who will" rhetoric the proponents of such taxes sling around has something to do with it.
- atdrummond 4y ago
  Why do you think land taxes would be ruinous? The only single family home owners who would see major tax increases are those in markets like the Bay Area - many of whom are already paying well below what they would nearly anywhere else in the country due to their legislatively capped house value. I also find the morality argument interesting, as land has some unique attributes as an economic good that one could use to make very convincing arguments for the immorality of land ownership itself.

readthenotes1 4y ago

Just talked with someone in the concrete business. There is a national shortage of Portland cement (imports restricted, new plants regulated out) and high quality flyash (these people got it from a place that used to ash from coal burning). That can't help house prices...

usrn 4y ago

This is the result of the way we've been lending money. Before 2008 you could easily get a loan for constructing new houses so many people did. Now new families can only get a loan for existing houses, this necessarily constrained supply and I would argue is the primary driver in the housing crunch. Bring back land loans and the problem will solve itself.

asdff 4y ago
A lot of areas are already built out and there's nothing left for greenfield single family home development. Zoning needs to be fixed before building can even happen. There is plenty of demand and money ready for development.
- usrn 4y ago
  The US really is mostly empty and zoning is the way it is because the infrastructure needs to be upgraded first.
  - asdff 4y ago
    Yeah but alot of it is too inaccessible. The dense areas like LA county are built out to the mountainsides. What's left is desert that has no good access to the urban core containing the rest of the population, due to the massive mountain range in the way and only like two good routes that are nowhere near a convenient straight shot through. Its a lot easier to just think about how we can stack up people where they already are, where the jobs already are, then to go off scarring up more and more of the earth with development. There's plenty scarred already, lets just build up there.

DoreenMichele 4y ago

For instance, consider a simplified model where every family has two kids that live with them until they’re 18. The ACA (Obamacare) extended coverage to age 26 for children because about half of young adults up to age 26 were living with their parents Since WW2, we've torn down about a million SROs.* We have also largely zoned out of existence the ability to build new Missing Middle housing. We have a dire shortage of a certain kind of housing: small, inexpensive housing near amenities. This is true nationwide. * https://en.m.wikipedia.org/wiki/Single_room_occupancy#:~:text=Single%20room%20occupancy%20%28more%20commonly%20abbreviated%20to%20SRO%29,a%20bed%2C%20chair%2C%20and%20sometimes%20a%20small%20desk https://en.m.wikipedia.org/wiki/Single_room_occupancy#:~:tex....

isx726552 4y ago
Boarding houses need to make a comeback.
- ruined 4y ago
  They have, informally. There is a huge demographic of people in every major city who have never/rarely signed a lease, but simply sublet a room from an official lease-holder, often against the actual terms of the lease. These people generally tend to file taxes as individual households, despite all sharing what is statistically a single unit of housing. I wonder how this plays with the data in the article.
  - skrbjc 4y ago
    I was thinking the same thing. So many young people share houses in places like the Bay Area, but it doesn’t seem to be included in these numbers.
- pkdpic 4y ago
  Thats a really interesting thought. I would guess there're are a lot of untapped ideas from the early 20th / 19th century that deserve reevaluation / resurrection. Like drinking more. I'm experimenting with that one. I'll let everyone know how it turns out on substack when I'm done.

countvonbalzac 4y ago

Isn't land use restriction just a proxy for added housing, so with population growth being equal isn't it a proxy for the added population / added housing ratio?

hn_throwaway_99 4y ago

I thought this was a great article, but one thing that I think was missing was an analysis of how rural vs. urban/suburban desirability has greatly changed housing demand. In the past 20-30 years, there has been a huge concentration of wealth in major metros, and many rural areas have been "hollowed out", with most young people looking to "get out" if they can. Some of this is anecdotal, but is also supported by various data sets. Even during the pandemic, where many folks left the cities and went to other areas, it was still that a lot of "tier 2" metros (think Boise, Charlotte, etc.) that took the influx. So my concern is that even if there are the same number of houses in the US nationwide, many of those houses have become completely undesirable as people move to areas with opportunity. Just think of all the boarded up $1 houses in Detroit, for example. Just think it would be interesting to see how much "low valued" housing there is (i.e. housing that has lost value or been stagnant) to calculate how much concentration of housing demand has been going on.

asdff 4y ago

Looking at things nationally is a little unclear imo. Locally the shortage is evident. In LA county back in the 1960s when prices were very affordable, the area was zoned for a population of 10 million people. Today after rezoning decades ago, its zoned for about half that, and nearly completely built out, and what do you know prices are high as a result. Capacity was available then it became scarce and prices rose.

yobbo 4y ago

In the graph: "Housing Units in the United States", one should point out that number of "Housing Units" is an upper bound on number of "Households". A gap between "Housing Units" and "Households" indicates some slack. When these two curves coincides, everyone is buying at the margin.

rufus_foreman 4y ago

What is it that people say here when there's an article that claims there is a shortage of labor? Raise wages (the price of labor) and the shortage will go away. Why doesn't the same principle apply here? We can just raise housing prices and the shortage will go away.

sam-s 4y ago

I am surprised no one mentions the elephant in the room - rent control. It makes it harder to discover the true rent (one has to pay a large lump sum to the previous tenant to get a rent-controlled apartment) and it discourages rental housing construction. Do you really think that these effects are best observable indirectly, as rent and construction?!

wildrhythms 4y ago
Why is your solution to abolish rent control rather than propose a public housing solution?

robocat 4y ago

One misconception in the article is that lots of people would like two houses, for example vacation homes, or work and weekend homes. They say "At the extreme end, you can’t have more households than there are people", which I think is incorrect thinking. It really matters when looking at houses getting built, because if those houses are holiday homes, then most analysts really screw up their analyses because the averages look like they improve, but actually the majority of people have no improvement.