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I’m not attacking you, your heart is in the right place, but your comment illustrates the problem. Housing absolutely should be a profit center. Home and mult

I’m not attacking you, your heart is in the right place, but your comment illustrates the problem. Housing absolutely should be a profit center. Home and multifamily builders should be unleashed to build as much housing as they can. Let them be greedy; let them get rich. It’ll make housing more affordable for everyone. High housing costs aren’t a failure of the free market - they’re a failure of central planning at every level of government.

SketchySeaBeast 4y ago
The problem with encouraging builders to go hard with few restrictions is you end up with a low-density urban sprawl that introduces a ton of its own issues. You end up with massively long commutes and a ton of infrastructure that now needs to be maintained, and none of that cost falls on the builder so they happily build fields of new homes miles away from work places or services.
- fshbbdssbbgdd 4y ago
  In Canada, exclusionary zoning rules prohibited the construction of mid-rise housing in most cities. Developers would build it if the system wasn’t set up to stop them from doing so. They want to sell more units of housing per acre of land.
  - SketchySeaBeast 4y ago
    As I asked another user - so you belief that the suburban sprawl would be high density housing instead? We'd have giant apartment buildings on the edge of the city?
    - ZoomerCretin 4y ago
      > We'd have giant apartment buildings on the edge of the city? Not necessarily high rises, but certainly apartment buildings, yes. This is the development pattern you see in places like Austin, Texas.
      - db48x 4y ago
        Yes, you see that in a lot of places. The city zoning laws mandate single–family homes, but then you get to the city boundary and revert to the county rules and a bunch of apartment complexes suddenly appear as if by magic.
    - jeromegv 4y ago
      No, they would be in the center of the city where it is currently illegal to do it. Listen to this recent podcast from 99% invisible (or read the summary), it explains it very well. Most of the territory of Toronto excludes apartment buildings. https://99percentinvisible.org/episode/the-missing-middle/ https://99percentinvisible.org/episode/the-missing-middle/
    - brailsafe 4y ago
      Actually we already see apartments going up at the edges of some cities, because of a combo of these factors making it tough to do otherwise. However, I also found that in Winnipeg, condo owners pay the same property taxes as a detached homeowner in a brand new cul-de-sac. For a $330k cad condo (probably not going to get much higher in price later) you pay $4k in annual property taxes on top of your condo fees and mortgage. That's an entire month of food if you ate out every single day. Meanwhile in Vancouver, the same type of place literally costs $1m in a less desirable area, but you pay only ~2k in property taxes, which contributes to fund 58% of the city's operating budget, and the city is able to improve over time. Same zoning problems though
    - fshbbdssbbgdd 4y ago
      Yes, this is a common sight outside many major cities. You end up with mid rise or high rise buildings randomly dotted around the burbs. It’s good that this housing exists, but because it’s not concentrated in the core, it doesn’t lead to the best possible outcomes. It’s hard to make the transit system work when housing and jobs are scattered around. You end up with lower-income workers commuting from an apartment over an hour away.
- ZoomerCretin 4y ago
  > The problem with encouraging builders to go hard with few restrictions is you end up with a low-density urban sprawl Low-density sprawl is a result of local governments banning medium and high density building, not the free market. 80% of Austin is still single family homes despite a massive influx to the area. This is not because single-family homes are the most profitable to build, but because they are the only thing that you can legally build.
  - SketchySeaBeast 4y ago
    So you are of the belief that, if it weren't for the regulations, the suburbs would be full of high density housing?
    - ZoomerCretin 4y ago
      ...yes? If I can buy four adjacent $1,000,000 homes and put up a mid-rise with 25 units at $400,000/each, I've just made $9,000,000 minus construction expenses.
      - SketchySeaBeast 4y ago
        Then why aren't they taking the time and energy to get those areas rezoned? It's possible, and I'm sure it's less expensive than the potential profit, especially if they choose an area far enough out that there are few neighbors to complain.
        ZoomerCretin 4y ago
        >Then why aren't they taking the time and energy to get those areas rezoned? Because of well-organized opposition from busy body homeowners. City governments aren't captured by business-interests the way state governments and the federal government are. >especially if they choose an area far enough out that there are few neighbors to complain. There are always enough people to complain about anything to kill it. A lot of people oppose anything new in their city entirely- not just in their neighborhood.
- twblalock 4y ago
  > The problem with encouraging builders to go hard with few restrictions is you end up with a low-density urban sprawl that introduces a ton of its own issues. You only end up with that if that is what sells, i.e. that is what homebuyers want. If the average Canadian didn't want that, the developers would build something else. Your real problem here is with the preferences of the people who buy new homes, and you aren't going to change those preferences by regulating housing developers.
  - com2kid 4y ago
    Ban commuter cars from cities and watch the demand for high density urban housing explode. Basically replicate the pre-car environment that the world's greatest cities were designed and developed during.
    - nine_k 4y ago
      Many large city centers in Europe already restrict or outright ban commuter cars.
      - com2kid 4y ago
        I was speaking more as a solution for American cities. :)
        nine_k 4y ago
        Yes. So, this is tried and known to work.
  - SketchySeaBeast 4y ago
    In that case it seems like the developers having more or less rules doesn't actually matter, no?
    - jeromegv 4y ago
      It does matter because most of the city of Toronto is zoned to prevent apartment buildings, low-rises, duplex, etc. Only a single family home is permitted. The only things being built in Toronto are either single family homes, or giant 50 floors condos. It takes YEARS of consultations to build anything in Toronto so developers only bother going through that process for very very high buildings. It's not worth it for the type of higher density apartment of 3-4 stories. It's called the missing middle, there's a good podcast/article here: https://99percentinvisible.org/episode/the-missing-middle/ https://99percentinvisible.org/episode/the-missing-middle/
- walrus01 4y ago
  look at the far outer suburbs of Dallas or most of the large cities in Arizona for some terrible examples of unconstrained urban sprawl.
- raxxorraxor 4y ago
  The vision of nice urban high density housing is a myth aside from very few exceptions that also happen to be quite expensive. Most people would want to escape that if their finances allow it. Pollution, noise, too much proximity to others are factors that makes this just plainly not attractive. Proximity to the work place is nice, but not the only factor that needs to be considered. This is primarily a problem of transport infrastructure.
awll 4y ago
I feel like the best counterexamples to this are Singapore(82% of the population lives in public housing which makes it affordable for local residents) and Vienna(25% of the city lives in publicly funded social housing which decreases costs for everyone).
frostwarrior 4y ago
By the free market alone, letting everyone get a home sounds like a terrible decision. There's a finite number of people that need a home and by the point everyone gets their own home, your business is doomed. On the other side, letting housing to be crazy expensive, with few people capable of getting a new house, will always be profitable.
- ZoomerCretin 4y ago
  Builders aren't monoliths, and they're not part of any cartel. They are competitors. It is always advantageous for a builder to be the only one creating new housing; they benefit from supply restrictions that drive prices up, while selling new supply. It is always best for them to build as much as they possibly can, because no one builder can build enough to affect the market by very much.
- space_fountain 4y ago
  Only maybe if you imagine developers as one person. It would always make sense for some new greedy developer to build a bunch of extra housing to drive down the cost because they still make more money that way
- im3w1l 4y ago
  You could ensure that very-basic shacks are affordable without destroying demand for superior products.
- milkey_mouse 4y ago
  If the free market were one entity that could coordinate and say "nobody build more housing, let's squeeze as much money from what we have already", sure, that would be pretty profitable. But if there are enough participants in the marketplace (which depends on the barriers to entry to homebuilding, like regulatory capture, knowledge, capital, and permits) one will want to undercut the others and build houses marginally cheaper than the competition until their marginal profit is zero. Having everyone agree not to build houses and keep prices high is like the "nobody snitch" outcome of a prisoner's dilemma: it's not a stable state/Nash equilibrium. At least this is what I heard in Econ 101, I'm sure I'm missing much nuance here.
oncewas 4y ago
Not attacking you, your heart is in the right place. If COVID-19 has taught us anything, learning to make businesses more efficient doesn't actually result in a better outcome for consumers. Take Nabisco for example, churned out record sales, didn't pay their burnt out employees more and Oreos cost more than ever before...
twblalock 4y ago
> Home and multifamily builders should be unleashed to build as much housing as they can. Let them be greedy; let them get rich. It’ll make housing more affordable for everyone. Yep. This is pretty much how all the existing housing stock got built. It was a gold rush for housing developers building entire subdivisions at a time. People seemed pretty happy about it at the time, too -- and now that it's harder to build, housing gets more expensive and it's the youngest generation that suffers most.
kelseyfrog 4y ago
The market has no telos other than to perform price discovery. I'm not sure where people get the idea that a market will do anything beyond that. Price discovery of housing has no bearing on being able to provide all people with a place to live. It's akin to saying that a market of Fabergé eggs will ensure everyone gets an egg. The problem is simple, there isn't enough housing irrespective of market or planning. Plainly, market-panaceaism is exhausting.
srcreigh 4y ago
Wouldn't this drop housing prices for existing home owners? As much as I agree with you, I don't think people who are left with expensive mortgage payments for a house worth 1/2 the original purchase price are gonna consider that policy to be the affordable option.
thinkingkong 4y ago
I think the challenge is that people assume there’s a free market but in housing that doesnt seem to be the case. Restrictions on height, location, design, building standards, as well as zoning are all constraints that the market operates within. Additionally, many of the affordable units were built with government capital then privatized later only to be torn down or renovicted into different classes of dwelling. If we had a truly free market up and down the supply chain then perhaps that would alleviate the problem. But that scenario simply does not exist today. Additionally, the market may even correct itself; but not withhout a day on the order of years or decades. Long after those affected will have made decisions as abrupt as perhaps ending their own life.
falcolas 4y ago
Trickle down economics, housing edition?

SketchySeaBeast 4y ago

The problem with encouraging builders to go hard with few restrictions is you end up with a low-density urban sprawl that introduces a ton of its own issues. You end up with massively long commutes and a ton of infrastructure that now needs to be maintained, and none of that cost falls on the builder so they happily build fields of new homes miles away from work places or services.

fshbbdssbbgdd 4y ago
In Canada, exclusionary zoning rules prohibited the construction of mid-rise housing in most cities. Developers would build it if the system wasn’t set up to stop them from doing so. They want to sell more units of housing per acre of land.
- SketchySeaBeast 4y ago
  As I asked another user - so you belief that the suburban sprawl would be high density housing instead? We'd have giant apartment buildings on the edge of the city?
  - ZoomerCretin 4y ago
    > We'd have giant apartment buildings on the edge of the city? Not necessarily high rises, but certainly apartment buildings, yes. This is the development pattern you see in places like Austin, Texas.
    - db48x 4y ago
      Yes, you see that in a lot of places. The city zoning laws mandate single–family homes, but then you get to the city boundary and revert to the county rules and a bunch of apartment complexes suddenly appear as if by magic.
  - jeromegv 4y ago
    No, they would be in the center of the city where it is currently illegal to do it. Listen to this recent podcast from 99% invisible (or read the summary), it explains it very well. Most of the territory of Toronto excludes apartment buildings. https://99percentinvisible.org/episode/the-missing-middle/ https://99percentinvisible.org/episode/the-missing-middle/
  - brailsafe 4y ago
    Actually we already see apartments going up at the edges of some cities, because of a combo of these factors making it tough to do otherwise. However, I also found that in Winnipeg, condo owners pay the same property taxes as a detached homeowner in a brand new cul-de-sac. For a $330k cad condo (probably not going to get much higher in price later) you pay $4k in annual property taxes on top of your condo fees and mortgage. That's an entire month of food if you ate out every single day. Meanwhile in Vancouver, the same type of place literally costs $1m in a less desirable area, but you pay only ~2k in property taxes, which contributes to fund 58% of the city's operating budget, and the city is able to improve over time. Same zoning problems though
  - fshbbdssbbgdd 4y ago
    Yes, this is a common sight outside many major cities. You end up with mid rise or high rise buildings randomly dotted around the burbs. It’s good that this housing exists, but because it’s not concentrated in the core, it doesn’t lead to the best possible outcomes. It’s hard to make the transit system work when housing and jobs are scattered around. You end up with lower-income workers commuting from an apartment over an hour away.
ZoomerCretin 4y ago
> The problem with encouraging builders to go hard with few restrictions is you end up with a low-density urban sprawl Low-density sprawl is a result of local governments banning medium and high density building, not the free market. 80% of Austin is still single family homes despite a massive influx to the area. This is not because single-family homes are the most profitable to build, but because they are the only thing that you can legally build.
- SketchySeaBeast 4y ago
  So you are of the belief that, if it weren't for the regulations, the suburbs would be full of high density housing?
  - ZoomerCretin 4y ago
    ...yes? If I can buy four adjacent $1,000,000 homes and put up a mid-rise with 25 units at $400,000/each, I've just made $9,000,000 minus construction expenses.
    - SketchySeaBeast 4y ago
      Then why aren't they taking the time and energy to get those areas rezoned? It's possible, and I'm sure it's less expensive than the potential profit, especially if they choose an area far enough out that there are few neighbors to complain.
      - ZoomerCretin 4y ago
        >Then why aren't they taking the time and energy to get those areas rezoned? Because of well-organized opposition from busy body homeowners. City governments aren't captured by business-interests the way state governments and the federal government are. >especially if they choose an area far enough out that there are few neighbors to complain. There are always enough people to complain about anything to kill it. A lot of people oppose anything new in their city entirely- not just in their neighborhood.
twblalock 4y ago
> The problem with encouraging builders to go hard with few restrictions is you end up with a low-density urban sprawl that introduces a ton of its own issues. You only end up with that if that is what sells, i.e. that is what homebuyers want. If the average Canadian didn't want that, the developers would build something else. Your real problem here is with the preferences of the people who buy new homes, and you aren't going to change those preferences by regulating housing developers.
- com2kid 4y ago
  Ban commuter cars from cities and watch the demand for high density urban housing explode. Basically replicate the pre-car environment that the world's greatest cities were designed and developed during.
  - nine_k 4y ago
    Many large city centers in Europe already restrict or outright ban commuter cars.
    - com2kid 4y ago
      I was speaking more as a solution for American cities. :)
      - nine_k 4y ago
        Yes. So, this is tried and known to work.
- SketchySeaBeast 4y ago
  In that case it seems like the developers having more or less rules doesn't actually matter, no?
  - jeromegv 4y ago
    It does matter because most of the city of Toronto is zoned to prevent apartment buildings, low-rises, duplex, etc. Only a single family home is permitted. The only things being built in Toronto are either single family homes, or giant 50 floors condos. It takes YEARS of consultations to build anything in Toronto so developers only bother going through that process for very very high buildings. It's not worth it for the type of higher density apartment of 3-4 stories. It's called the missing middle, there's a good podcast/article here: https://99percentinvisible.org/episode/the-missing-middle/ https://99percentinvisible.org/episode/the-missing-middle/
walrus01 4y ago
look at the far outer suburbs of Dallas or most of the large cities in Arizona for some terrible examples of unconstrained urban sprawl.
raxxorraxor 4y ago
The vision of nice urban high density housing is a myth aside from very few exceptions that also happen to be quite expensive. Most people would want to escape that if their finances allow it. Pollution, noise, too much proximity to others are factors that makes this just plainly not attractive. Proximity to the work place is nice, but not the only factor that needs to be considered. This is primarily a problem of transport infrastructure.

awll 4y ago

I feel like the best counterexamples to this are Singapore(82% of the population lives in public housing which makes it affordable for local residents) and Vienna(25% of the city lives in publicly funded social housing which decreases costs for everyone).

frostwarrior 4y ago

By the free market alone, letting everyone get a home sounds like a terrible decision. There's a finite number of people that need a home and by the point everyone gets their own home, your business is doomed. On the other side, letting housing to be crazy expensive, with few people capable of getting a new house, will always be profitable.

ZoomerCretin 4y ago
Builders aren't monoliths, and they're not part of any cartel. They are competitors. It is always advantageous for a builder to be the only one creating new housing; they benefit from supply restrictions that drive prices up, while selling new supply. It is always best for them to build as much as they possibly can, because no one builder can build enough to affect the market by very much.
space_fountain 4y ago
Only maybe if you imagine developers as one person. It would always make sense for some new greedy developer to build a bunch of extra housing to drive down the cost because they still make more money that way
im3w1l 4y ago
You could ensure that very-basic shacks are affordable without destroying demand for superior products.
milkey_mouse 4y ago
If the free market were one entity that could coordinate and say "nobody build more housing, let's squeeze as much money from what we have already", sure, that would be pretty profitable. But if there are enough participants in the marketplace (which depends on the barriers to entry to homebuilding, like regulatory capture, knowledge, capital, and permits) one will want to undercut the others and build houses marginally cheaper than the competition until their marginal profit is zero. Having everyone agree not to build houses and keep prices high is like the "nobody snitch" outcome of a prisoner's dilemma: it's not a stable state/Nash equilibrium. At least this is what I heard in Econ 101, I'm sure I'm missing much nuance here.

oncewas 4y ago

Not attacking you, your heart is in the right place. If COVID-19 has taught us anything, learning to make businesses more efficient doesn't actually result in a better outcome for consumers. Take Nabisco for example, churned out record sales, didn't pay their burnt out employees more and Oreos cost more than ever before...

twblalock 4y ago

> Home and multifamily builders should be unleashed to build as much housing as they can. Let them be greedy; let them get rich. It’ll make housing more affordable for everyone. Yep. This is pretty much how all the existing housing stock got built. It was a gold rush for housing developers building entire subdivisions at a time. People seemed pretty happy about it at the time, too -- and now that it's harder to build, housing gets more expensive and it's the youngest generation that suffers most.

kelseyfrog 4y ago

The market has no telos other than to perform price discovery. I'm not sure where people get the idea that a market will do anything beyond that. Price discovery of housing has no bearing on being able to provide all people with a place to live. It's akin to saying that a market of Fabergé eggs will ensure everyone gets an egg. The problem is simple, there isn't enough housing irrespective of market or planning. Plainly, market-panaceaism is exhausting.

srcreigh 4y ago

Wouldn't this drop housing prices for existing home owners? As much as I agree with you, I don't think people who are left with expensive mortgage payments for a house worth 1/2 the original purchase price are gonna consider that policy to be the affordable option.

thinkingkong 4y ago

I think the challenge is that people assume there’s a free market but in housing that doesnt seem to be the case. Restrictions on height, location, design, building standards, as well as zoning are all constraints that the market operates within. Additionally, many of the affordable units were built with government capital then privatized later only to be torn down or renovicted into different classes of dwelling. If we had a truly free market up and down the supply chain then perhaps that would alleviate the problem. But that scenario simply does not exist today. Additionally, the market may even correct itself; but not withhout a day on the order of years or decades. Long after those affected will have made decisions as abrupt as perhaps ending their own life.

falcolas 4y ago

Trickle down economics, housing edition?