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> How does density actually hurt landowners? If you own a house in a heavily consolidated urban area your property value will hardly have decreased. Correct be

> How does density actually hurt landowners? If you own a house in a heavily consolidated urban area your property value will hardly have decreased. Correct because, and I can only speak for America, those big cities stopped building. San Francisco alone is short about a quarter million homes, like 33% of the existing population. There’s a whole Wikipedia article on it. That’s why it’s so unaffordable. > Also consider that maybe people just don't want to live in a highrise legoland, or think that endless urban consolidation is a good thing for our cities. This is a pretty funny position to take. Those cities didn’t get to high rises because nobody wanted to live in them. You know those buildings are full … right? If nobody wanted to live there prices would be way lower and they never would have built denser housing. Tokyo is a great example of a major metro where supply and demand are roughly equal and they haven’t seen houses increase in price since 1990. Their units cost a bit more than cost of construction. This is the power of federalizing zoning rules so city councils can’t get between you and building a house on your property.

robocat 4y ago
> San Francisco alone is short about a quarter million homes If they added a quarter million homes, do you think they would still be short another quarter million homes? Not saying densification is bad. But in some cities the density can keep increasing and not have any drop in demand. Apartment prices in dense cities don’t drop?
- arcticbull 4y ago
  > If they added a quarter million homes, do you think they would still be short another quarter million homes? Not in this market, haha. The number was based on the quantity of houses added vs the quantity of jobs added in SF and the surrounding area. (From [1]: "For example, from 2012 to 2016, the San Francisco metropolitan area added 373,000 new jobs, but permitted only 58,000 new housing units") But over time? Maybe. > Apartment prices in dense cities don’t drop? There are very few cities where supply of housing is allowed to meet demand for housing - but as I mentioned, Japan is a great example. Japan hasn't seen an increase in the cost of housing since edit: [1995, not 1990 as I mistakenly claimed in GP post]. [2] Compare to the US. [3] What happens is that they stop going up in price. [1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage [2] https://fred.stlouisfed.org/series/JPNCPIHOUAINMEI https://fred.stlouisfed.org/series/JPNCPIHOUAINMEI [3] https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS
- ericmay 4y ago
  Yea, also adding more homes or more units will just increase rents and prices anyway, especially with higher interest rates. At the end of the day a lot of people have this very wrong idea that living in the best weather and in the epicenter of a global city with top-tier jobs, food, etc. will ever be “affordable”. It simply will not be. Ever.
  - arcticbull 4y ago
    Tokyo has all of those things, and yet. Why do you think supply and demand do not exist in the housing market? Why is this the one market on earth where it won't ever work? If you have as many houses as jobs in the nearby area then it will be more affordable. That's just facts. Further higher interest rates lead to lower house prices, to an extent (but only to the extent supply exceeds demand) because people buy houses based on monthly mortgage affordability. People have looked into this. Here are the results. [1] > The resultant high demand for housing, combined with the lack of supply, (caused by severe restrictions on the building of new housing units) caused dramatic increases in rents and extremely high housing prices. I'm not saying you'll be able to live in SF for the cost of living in a shack in the corn belt, but there's no reason it'll be "unaffordable forever and there's nothing we can do about it" when that historically wasn't the case and there are other global counter-examples. And a ton of research was done on this. [1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
    - ericmay 4y ago
      > Why do you think supply and demand do not exist in the housing market? Why would you think that I think this? That's really confusing. I think the issue you have here is that you are thinking in extremely simplistic terms and not really accounting for real supply and demand in this particular market. Instead of looking to Tokyo (which is a generally bad example because Tokyo and Japan are not great generalized models) you should look to New York City to see what will happen if you continue to build housing in the Bay Area. It won't get cheaper, in fact, the more you build the more expensive it'll get for a few of reasons: Interest rates Housing standards (environment, earthquakes, etc.) Developers do not want to build low-margin housing so they'll only build "luxury" housing with cheap, but perceived higher-end finishes so they can charge more rent per sqft Lack of available workers As developers build additional housing they'll only build for higher rental rates, but because there is a near infinite demand for housing in San Francisco and California as a whole, as additional units come onto the market they'll raise the median rent, but it won't make existing housing cheaper, it'll just be the new floor. If you could build a million units or something in a year, you may be able to reduce prices, but construction doesn't work that quickly. Demand far outstrips supply and will continue to do so. Tokyo is incomparable for a few reasons, but you can start by examining Japanese birth rates, immigration policy, and California's comparable car-only infrastructure. Historical examples aren't very useful here because historically there were far fewer people, travel from the highly populated east coast to California was long and arduous and the benefits were "unknown", and people had a lot less money and stronger family ties. Trying to do global comparisons is generally suspect as well. But I guess if you want to see what things would look like, New York City, Hong Kong (pre commie China takeover) and the similar extremely high housing costs and density are appropriate versions of the future of the Bay Area real estate market. With that being said, who knows what will happen with remote work and the like, but probably won't have much in the way of price reductions there anyway over the longer term. If you want less expensive housing you'll have to live somewhere else. That's just how the world works.

robocat 4y ago

> San Francisco alone is short about a quarter million homes If they added a quarter million homes, do you think they would still be short another quarter million homes? Not saying densification is bad. But in some cities the density can keep increasing and not have any drop in demand. Apartment prices in dense cities don’t drop?

arcticbull 4y ago
> If they added a quarter million homes, do you think they would still be short another quarter million homes? Not in this market, haha. The number was based on the quantity of houses added vs the quantity of jobs added in SF and the surrounding area. (From [1]: "For example, from 2012 to 2016, the San Francisco metropolitan area added 373,000 new jobs, but permitted only 58,000 new housing units") But over time? Maybe. > Apartment prices in dense cities don’t drop? There are very few cities where supply of housing is allowed to meet demand for housing - but as I mentioned, Japan is a great example. Japan hasn't seen an increase in the cost of housing since edit: [1995, not 1990 as I mistakenly claimed in GP post]. [2] Compare to the US. [3] What happens is that they stop going up in price. [1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage [2] https://fred.stlouisfed.org/series/JPNCPIHOUAINMEI https://fred.stlouisfed.org/series/JPNCPIHOUAINMEI [3] https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS
ericmay 4y ago
Yea, also adding more homes or more units will just increase rents and prices anyway, especially with higher interest rates. At the end of the day a lot of people have this very wrong idea that living in the best weather and in the epicenter of a global city with top-tier jobs, food, etc. will ever be “affordable”. It simply will not be. Ever.
- arcticbull 4y ago
  Tokyo has all of those things, and yet. Why do you think supply and demand do not exist in the housing market? Why is this the one market on earth where it won't ever work? If you have as many houses as jobs in the nearby area then it will be more affordable. That's just facts. Further higher interest rates lead to lower house prices, to an extent (but only to the extent supply exceeds demand) because people buy houses based on monthly mortgage affordability. People have looked into this. Here are the results. [1] > The resultant high demand for housing, combined with the lack of supply, (caused by severe restrictions on the building of new housing units) caused dramatic increases in rents and extremely high housing prices. I'm not saying you'll be able to live in SF for the cost of living in a shack in the corn belt, but there's no reason it'll be "unaffordable forever and there's nothing we can do about it" when that historically wasn't the case and there are other global counter-examples. And a ton of research was done on this. [1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
  - ericmay 4y ago
    > Why do you think supply and demand do not exist in the housing market? Why would you think that I think this? That's really confusing. I think the issue you have here is that you are thinking in extremely simplistic terms and not really accounting for real supply and demand in this particular market. Instead of looking to Tokyo (which is a generally bad example because Tokyo and Japan are not great generalized models) you should look to New York City to see what will happen if you continue to build housing in the Bay Area. It won't get cheaper, in fact, the more you build the more expensive it'll get for a few of reasons: Interest rates Housing standards (environment, earthquakes, etc.) Developers do not want to build low-margin housing so they'll only build "luxury" housing with cheap, but perceived higher-end finishes so they can charge more rent per sqft Lack of available workers As developers build additional housing they'll only build for higher rental rates, but because there is a near infinite demand for housing in San Francisco and California as a whole, as additional units come onto the market they'll raise the median rent, but it won't make existing housing cheaper, it'll just be the new floor. If you could build a million units or something in a year, you may be able to reduce prices, but construction doesn't work that quickly. Demand far outstrips supply and will continue to do so. Tokyo is incomparable for a few reasons, but you can start by examining Japanese birth rates, immigration policy, and California's comparable car-only infrastructure. Historical examples aren't very useful here because historically there were far fewer people, travel from the highly populated east coast to California was long and arduous and the benefits were "unknown", and people had a lot less money and stronger family ties. Trying to do global comparisons is generally suspect as well. But I guess if you want to see what things would look like, New York City, Hong Kong (pre commie China takeover) and the similar extremely high housing costs and density are appropriate versions of the future of the Bay Area real estate market. With that being said, who knows what will happen with remote work and the like, but probably won't have much in the way of price reductions there anyway over the longer term. If you want less expensive housing you'll have to live somewhere else. That's just how the world works.