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Housing =/= Land. But our policies which heavily kneecap our ability to build more [0] make it such that Housing starts behaving like Land. The solution is to
by huevosabio 4y ago
Housing =/= Land. But our policies which heavily kneecap our ability to build more [0] make it such that Housing starts behaving like Land.
The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build.
I personally think that achieving affordable housing prices via mainly government intervention is not a sustainable approach. You end up consuming both economic and political capital.
A more sustainable approach sets clear, transparent rules that specify under what conditions do you get to build by right. Then 90% gets satisfied by the market, the remaining 10% can be addressed by government investments, if needed.
The only sustainable way to get affordable housing is when the market price is affordable.
Land, on the other hand, is another story. There is strong economic evidence that many of the observations of Henry George [1] are spot on: Land rents tend to take a massive toll in the economy, cause inequality and misery, all without requiring their owners to provide any added value. The proposed solution, again with solid economic fundamentals, is to tax the unimproved value of land at 100%. Henry George further argues that the proceeds should be equally divided among citizens, a citizen dividend if you will.
[0] e.g. it takes 4 years on average to get a new building permit in SF, 90% of the city is zoned for single family housing, any neighbor etc.
[1] https://www.gameofrent.com/ https://www.gameofrent.com/
- m_ke 4y agoI'm no NIMBY but places like NYC will never be able to build enough to outpace demand.
- eloff 4y agoAnd yet it works in Tokyo, a city of almost double the population?
- deleted 4y ago[deleted]
- Zxian 4y agoNew York City already has a significantly higher population density than Tokyo (~11,300/km2 vs ~6,300/km). It's easier to develop more housing when you have more land.
- coryrc 4y agoYou need to include Newark, Yonkers, Long Island, etc if you want to compare those figures. Tokyo is 13400 sq km, NYC is 780 sq km. If I rounded Tokyo's land area to the same sig figs as I did for NYC, it would be lowered by half the total area that NYC takes up!
- timr 4y ago> You need to include Newark, Yonkers, Long Island, etc if you want to compare those figures. That's just not an accurate comparison. Live in NYC. Lived in Japan. The difference is transit. It is far easier to get to Saitama or Kawasaki or Yokohama or Chiba than it is to get to Long Island from NYC. You can do the former in an hour at rush hour. Try getting to downtown Manhattan from Bay Shore as a daily commute. You'll go mad. Here's Tokyo and New York at the same zoom level: Tokyo: https://www.google.com/maps/@35.736739,139.6246444,10z https://www.google.com/maps/@35.736739,139.6246444,10z NYC: https://www.google.com/maps/@40.7983574,-73.948053,10z https://www.google.com/maps/@40.7983574,-73.948053,10z The gray area of Tokyo on that map is pretty much all considered an exurb of Tokyo, more-or-less feasible for daily commute by rail. Most of the NYC region is inaccessible from Manhattan, except by car. Look at the Seibu Shinjuku line, or the Chuo line on the Tokyo map -- both offer express trains that will take you from the distant western exurbs, right into the middle of downtown Tokyo: https://en.wikipedia.org/wiki/Seibu_Shinjuku_Line https://en.wikipedia.org/wiki/Seibu_Shinjuku_Line https://en.wikipedia.org/wiki/Ch%C5%AB%C5%8D_Line_(Rapid) https://en.wikipedia.org/wiki/Ch%C5%AB%C5%8D_Line_(Rapid)
- coryrc 4y agoI understand, but that doesn't change my assertion that comparing Tokyo density to only-NYC density makes no sense, especially as an argument that there is no room for to build more. Hogwash! Half your NYC map is pure green, but even leaving that, most of the land area on that map that is housing is SFH. The density of the NYC MSA is 1/3 that of Tokyo: https://en.m.wikipedia.org/wiki/New_York_metropolitan_area https://en.m.wikipedia.org/wiki/New_York_metropolitan_area There's plenty of room to grow up. Just because the reason we don't is shitty government organization and FPTP voting doesn't mean we can just ignore the vast swaths of low-density just outside Manhattan 's borders.
- zamadatix 4y agoGreater Tokyo Area? Tokyo Metropolis? Previous Tokyo City limits? New York City metro area? New York City? Manhattan? These can be 2 orders of magnitude apart in scale but they've all been talked about like it was the same location A and location B. At the small scale Tokyo's densest ward is ~22,700/km^2 and Manhattan is ~28,800/km^2 with Manhattan being ~4x-5x the land area of the former (i.e. the core is a lot more dense). At the large scale the Greater Tokyo Area is ~2,900/km^2 and the New York Metropolitan Area is ~2,053/km^2 (i.e. the urban area around Tokyo is a lot more dense). "Tokyo" is a good example that you can get affordable housing by focusing on how to spread the population over a large urban area but it's not a good example building more housing downtown is a scalable approach.
- rr888 4y agoI'm not sure why you think Tokyo works, it wasn't long ago that it was multiple times the price of NYC. It might be affordable now but only because of a economic slump and Japan's falling population.
- ZoomerCretin 4y agoTokyo's population grew, actually.
- sixo 4y agoIncrementally, building improves living conditions. It's not all-or-nothing.
- j0hnyl 4y agoI think they can. The thing is the corporate landlords would rather have their high rises sit empty than rent the units at reasonable rates.
- suchow 4y agoDo you know what would motivate this behavior? Naively, any rent is more than zero rent, so why let a unit sit empty?
- kyawzazaw 4y agoIt keeps the market rate high for other units/properties.
- jallen_dot_dev 4y agoThat does not make sense from a game-theoretic standpoint. You would be helping other landlords at your own expense. It would be better to let other landlords make that sacrifice and rent our your own properties for as much as you can get.
- kyawzazaw 4y agothat's the thing. They are okay with helping other landlords because they themselves hold other multiple properties. There is more benefits by having the rates high than losing money on a few units. It totally makes sense for the rental property owners.
- PolCPP 4y agoIIRC Sometimes some of these units are tied to a mortgage. Renting it at a reasonable price could make the price of the unit to drop making the money lender wanting to renegotiate the mortgage contract.
- macksd 4y agoMy gut feeling is this doesn't entirely explain it, but any tenant is also more work than no tenant, so they may not want to do the work of signing a new lease and dealing with the work it will trigger for less than you're making per-head on your current tenants. There's probably also a fear that if you let a new tenant in for lower rent, this might lower the rent other people expect and the problem starts snowballing.
- runeks 4y agoWhy do you believe that?
- m0llusk 4y agoCannot speak for the poster, but the big current issue is that the value of residential units has gone from being strongly linked to wages to residences being an extremely valuable chip for playing financial games. Residences, especially inherently valuable ones like NYC apartments, have sufficient demand from financial game players that wage earners are barely able to keep up. Exactly how things break down is not clear, but there is this idea that demand for residences for financial purposes is competing aggressively with people who want homes.
- ch4s3 4y agoThis is a well studied idea, the percentage of units sitting empty is a round error in the total supply of housing. At the start of the pandemic there were a paltry 4000 vacant condos. For reference there are 2.3 million apartments in the city.
- thfuran 4y agoBut how many vacant apartments were there (or how many total condos)?
- ch4s3 4y agoThe vacancy rate of apartments is just at or under 4.5% which is considered a very tight rental market. I don't have the total condo numbers readily at hand.
- m0llusk 4y agoThat is not directly related. People and institutions holding residential units for investment purposes usually rent them out.
- 4y ago
- the_only_law 4y agoI thought there was a ton of empty housing in NYC, it's just insanely expensive.
- slama 4y agoThis isn't true - vacancy rates are below the healthy threshold https://citylimits.org/2022/05/17/nycs-latest-vacancy-survey-is-bad-news-for-affordable-apartment-seekers/ https://citylimits.org/2022/05/17/nycs-latest-vacancy-survey...
- mattwad 4y agoAll over NYC, there are empty buildings and apartments. There's space, but landlords are artificially reducing supply.
- refurb 4y agoRead up on rent control in the 70’s and landlord’s burning down their own buildings to collect insurance. Artificially forcing prices low just reduces supply. But no doubt NYC will head down that path. Seems like all major cities are repeating the policies of the 60’s-80’s that causes populations to drop.
- intrasight 4y agoFlashback to late 1970s driving through the Bronx with my family - an annual ritual as most of the extended family was still in the NYC area while we had moved to Rochester. We would pass blocks of empty high-rise apartments in the South Bronx. As a middle-middle-class suburban kid, I just couldn't conceive of how the wealthiest city on earth could have sections that looked like a bombed-out and evacuated European city following World War II. I asked my father what had happened here. He answer was "rent control".
- colinmhayes 4y agoNyc apartments are at 4% vacancy, a decent bit below the national average. This meme is just straight up false.
- patrickthebold 4y agoThe article is about Manhattan. Do you have any idea if it has similar problems? In my mind, Manhattan is pretty dense.
- lotsofpulp 4y agoThe high prices in Manhattan are caused by the low supply of other Manhattan-like density and public transit capable cities in the US.
- lupire 4y agoManhattan is expensive because rich people want to live there. Brooklyn and Queens and Harlem have density and transit but cost less.
- lotsofpulp 4y agoTransit in Brooklyn and Queens is much worse than Manhattan. See my other comment: https://news.ycombinator.com/item?id=32098815 https://news.ycombinator.com/item?id=32098815
- sjtindell 4y agoIn my mind it is the same problem everywhere. Supply is too low and is kept low for many reasons. There is insane demand from around the world to live in Manhattan.
- huevosabio 4y agoI am obviously less informed on Manhattan shenanigans, but enough to know that there's plenty of obstacles to new construction in NYC and Manhattan proper. I recall AOC lobbying for stopping an apartment complex in a formerly industrial area. And a articles on how certain areas of Manhattan don't allow towers. In fact, a quick look at the zoning map [0] has, eg, large areas zoned as "R8B contextual districts are designed to preserve the character and scale of taller rowhouse neighborhoods". SF is the worst offender, but NYC is still pretty bad. [0] https://zola.planning.nyc.gov https://zola.planning.nyc.gov
- sbf501 4y agoToo bad there are "investment luxury hi-rises" popping up all over the skyline that are largely unpopulated. If that's what people want to build to park their billions, we have other problems to tend to first.
- surement 4y agothat's what you get when there's rent control; luxury housing doesn't count so there's more of an incentive to build that instead
- dionidium 4y agoThis is a conspiracy-theory-level analysis that isn't supported by any available evidence.
- kyawzazaw 4y agohttps://nypost.com/2021/08/05/nearly-half-of-luxury-units-empty-in-billionaires-row-buildings/ https://nypost.com/2021/08/05/nearly-half-of-luxury-units-em...
- dionidium 4y agoSeven buildings. That's not representative of...anything. It's not even worth talking about. And the effects are largely positive for the city, anyway. You've got a few big, empty buildings concentrated on one street where billionaires park their money, pay a bunch of property taxes, and use zero city services. That's an unqualified win.
- lupire 4y ago
- ineptech 4y agoNo idea why you're being downvoted. This meme (rich people buying luxury condos, letting them sit vacant, and then profiting somehow) doesn't make any sense, and that article posted as evidence for it undermines it by depicting those units as being un-rentable due to oversupply in the market.
- mschuster91 4y ago> The only sustainable way to get affordable housing is when the market price is affordable. And the only way to reduce the market price to affordable rates is to crack down on the demand - there is no reasonable way to expand the offer side in many cities any more since they don't have the space. And most demand is driven by the fact that rural areas have been left in a decrepit state for decades: highways, bridges and other infrastructure is crumbling, there is no public transport worth the name, forget about fast internet (or fast internet offered by a crap monopolist), employers have closed down or moved to urban areas, schools and medical services are constantly closing or underfunded... To fix the urban rent explosion problem, we need to fix rural areas and make them livable again.
- MrMan 4y agoits actually important for the long trend towards urbanization to continue, for many reasons.
- jwolfe 4y ago> The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build. The other two secrets are tiny apartments (200-400 sqft), and an incredibly reliable public transportation system. Tokyo has a massive sprawl -- people can and do live far from their work. The average one-way commute time in the Tokyo metro area is almost an hour.
- jahnu 4y ago400sqft is about 37m2 That’s pretty much the smallest apartment you’ll find in Vienna, and only for individuals living alone. But yes they are smaller than houses but mostly bigger than Manhattan family apartments :) Every family I know lives in about 80m2 to 120m2 and pays around 1000-2000 euros/month rent. Depending heavily on location and quality of course.
- hailwren 4y agoI think, fundamentally, the problem is that there is a highly speculative market (real-estate) attached to a basic needs market (housing). I think of myself as right-of-center, but think George was more or less spot on w.r.t. land. I wonder if there is a solution in banning rent itself? i.e. force owners to transfer a % of ownership equal to rental fees received from tenants and allow them to discount improvements against that.
- ZoomerCretin 4y agoWhether housing is rented or owned has no relation to its price. Making it illegal to speculate/profit from housing doesn't solve the underlying issue that is a massive (xx,000,000) unit shortage of housing in the United States.
- hailwren 4y agoAbsolutely it has a relation to its price. A domicile's value in any setting is determined by it's speculative value + a discounted income model. This model wildly decreases the discounted income value without addressing the speculative value. As far as I'm aware there are more housing units than people in the US. We do have an incentive structure that puts property owners' needs at odds w/ society's needs on multiple factors, and some of them (i.e. NIMBYism) can be addressed orthogonally to the intractability of housing as investment vs housing as housing.
- pjmorris 4y ago> The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Population densities (per sq k): Manhattan: 38000 Tokyo: 6158 Vienna: ~5000 I don't see how supply is Manhattan's problem here.
- colinmhayes 4y agoThe problem is that Manhattan is the only truly dense area with good transit in a country of 330 million. Tokyo is much larger than Manhattan and is dense throughout. Other Japanese cities are dense too, so people have options when prices out.
- jjav 4y ago> The solution is to build more I wonder, because it is always stated that if only density was increased by building more, housing would become cheap. But this article is about NYC, the densest city in the US, not being cheap at all.
- spaniard89277 4y agoThe solution of course is to build more, but it just happens that the private initiative always build under demand because it is inelastic and it's in their interest to keep the market as so. Of course the Vienna success came from public intervention because otherwhise you'd have exactly the same situation of hundreds of other cities where rent is always a hefty amount of modal income and no matter how easy and cheap is to build it just happens those with access to capital never meet demand. You need to build more, in many cite MUCH more, and you need vacant housing so floating population can come and go easily.