10 ms·

There’s no such thing as affordable housing

140 points by warning26 4y ago

0max 4y ago
Maybe "non-market housing" should be the more widely used term in North America for the kind of service "affordable housing" provides. It better frames the idea that the unit of housing isn't meant to be sold and priced based on market forces and dynamics.
HideousKojima 4y ago
>Why is there “no such thing as affordable housing”? Because affordability is not, and has never been, an intrinsic quality of a building. We draw bad conclusions when we talk about it as though it is. Who, exactly, is talking about affordability as though it's an intrinsic part of housing?
- airza 4y ago
  Countless municipal governments are trying to mandate a certain of units or percent of units be affordable.
  - HideousKojima 4y ago
    Sure, but that's just variations on rent control, or tax incentives to builders to increase density, or whatever else they're using to try to increase the stock of housing. I still don't see how that suggests that the affordability is somehow intrinsic?
    - klipt 4y ago
      "Affordable" is often used as marketing speak for "subsidized". In effect, the city is forcing the property owner to select some random poor people and give them monthly "cash" to help pay their rent. Except that "cash" can only be used for one particular unit, which locks them in, so it's economically much less efficient than real cash. It's basically just an inefficient tax on property owners that gets redistributed to a handful of lucky people.
- epicureanideal 4y ago
  Many politicians and news media talk about it as if it’s an intrinsic quality, and also there are even “affordable” housing programs where affordable takes on special meanings that imply subsidies and set asides and so on. So whereas previously it was a neutral description it’s becoming a very particular thing.
  - Vt71fcAqt7 4y ago
    It's the same trick as "access to healthcare" as if healthcare is just the ability to walk into a hospital. (Now, strictly speaking, one (less common) definition of access is "freedom or ability to obtain or make use of something" but the connotation intented is really "permission, liberty, or ability to enter, approach, or pass to and from a place or to approach or communicate with a person or thing"[0] because in the former "access" could be dropped entierly in sentences like "they don't have access to healthcare" to simply "they don't have healthcare." So it is clearly being used to create a certain (false) connotation) [0]https://www.merriam-webster.com/dictionary/access https://www.merriam-webster.com/dictionary/access
- omeid2 4y ago
  Unaffordable houses are not good for anyone; including investors. So just about everyone with skin in the game, developers, investors, municipalities, aspiring buyers, and economists almost always talk about affordability.
- kube-system 4y ago
  I have often heard the criticism that “developers only build luxury housing” and demand local government intervention to require “affordable” new construction.
- Hermitian909 4y ago
  I'm in the bay area. If you're at all involved in local housing you'll find there's a vocal group here opposed to any housing that isn't "affordable". While they may not actually believe it's intrinsic, the way they use rhetoric implies it is. This group and their rhetorical methods have successfully killed a lot of projects that could have housed hundreds of people (often with 30% of units being affordable).
- djur 4y ago
  Anyone who refers to new market-rate units as "luxury apartments", which is something you hear about new developments all the time.
jdkee 4y ago
"It doesn’t help that reporting and the prevailing political discourse alike often frame the entire problem as “how to build more affordable units.” (How to add to the 13,000.) Meanwhile, we fail to stanch the bleeding on the private market, where rents keep rising faster than incomes." People, acting as rational agents, will pay more to live in good neighborhoods and the market is simply responding to this fact.
roxgib 4y ago
So the tl;dr is that building more housing, of any kind, will alleviate prices at the lower end of the market. I think this makes a lot of sense, though I find it weird that he starts off by saying that new construction doesn't have any impact, and then finishes by saying the opposite. I hear this same thing a lot from economists who say the impact of new construction is too small because it only accounts for <1% of the total housing stock each year at best, but that doesn't make sense to me - what other levers are you going to pull? Immigration? Anyway, I'm putting all my hopes on remote work.
- et1337 4y ago
  I think the article is saying that new construction of all kinds of homes, including luxury homes, is the answer. As opposed to the meager handful of affordable housing units cities fund now while making it as hard as possible to build anything at all.
- yazaddaruvala 4y ago
  Create High-density Land Use taxes that roughly force people to sell parking lots and gas stations and other small buildings for tall housing developments? Enforce super blocks that are equally residential as they are comercial? ie if X job spaces exist in a super block there should be slightly more than X bedrooms available in the same super block. Target 100x more sqft by 2030? Instead of targeting 1%^7 more sqft by 2030
- charlieflowers 4y ago
  I don’t think that’s what he’s saying. He says new housing is underpowered. Rather, we need home values to decline instead of rise as properties age. And yet, too many have vested interests in them rising, making that the prevailing political context.
markus_zhang 4y ago
> The market forces pushing housing prices stratospheric in California are largely about the state’s severe housing shortage. I wonder where does QE lay on the list.
- ddorian43 4y ago
  Wasn't the FED buying all the 2.5% mortgages?
  - metaphor 4y ago
    Interested to learn the source of where you got this 2.5% figure from. That QE activity peaked circa Apr 2022[1]. The Fed subsequently announced monetary policy circa May 2022[2] to reduce the size of their balance sheet; with respect to agency mortgage-backed securities, that means predictably liquidating assets in the open market at a rate cap of $35 billion per month. The Fed's weekly H.4.1[3] § 3 reports agency MBS assets are overwhelmingly residential. They were slowly ratcheting down commitments to buy MBS, and effectively reached 0 circa end of Oct 2022. [1] https://fred.stlouisfed.org/graph/?g=ZcQw https://fred.stlouisfed.org/graph/?g=ZcQw [2] https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [3] https://www.federalreserve.gov/releases/h41/20230119/ https://www.federalreserve.gov/releases/h41/20230119/
- epistasis 4y ago
  I'm not sure that QE has much to do with the shortage. That was started and is maintained by local political forces that want to stop new housing nearby. And most of those folks had paid off their mortgage or had it close to paid off, and have experienced so much appreciation that their purchase price is less than a current down payment.
- maximilianroos 4y ago
  Did they not have QE in Dallas or Detroit?
jamesblonde 4y ago
One of the things that makes Stockholm a great city for workers is the large amount of rent-controlled housing. You can get one of these apartments by queuing - the longer you are in the queue, the better the choice you have. Now, obviously this supports insiders over outsiders. And there are problems with having to queue for 10 years just to get an apartment in a nice area - as soon as you turn 18, put yourself in the queue (it's only 50 bucks/year). But the net effect is that the percentage of your income that goes on housing is less than half of what it would be if you bought a house or your own condo. It means people can afford to also own a motor boat, a summer house, and have a high quality of life.
- TideAd 4y ago
  What do people do during the 10 years they have to wait in line?
  - fredsir 4y ago
    They have to find another solution. But instead of that lasting forever since their situation never becomes so that they can afford to buy a nice home, which is the case for many people, they only have to deal with that for 10 years at which point they get a lot of choices for nice homes at an affordable price. It’s the same here in Denmark.
    - lettergram 4y ago
      Gotta say, I feel bad for Europeans. In the states just about everyone can afford what you’d probably consider a “nice home” at an “affordable price”. To put it into perspective; at 20 my friend bought a house in the suburbs — 3 bedroom, 2 bath, 0.3 acres; decent neighborhood, driveway for his 2 cars; etc. he’s not college educated and cuts trees down for a living.
      - fredsir 4y ago
        Is that ignoring all the homeless people in the states, the people living in trailers, in their cars and so on while working multiple jobs?
johnea 4y ago
And there won't be, as long as there's an AirBnB option for investor ownership...
- mjevans 4y ago
  Or _any_ form of rental. It should be punishingly taxed to own more than 2 homes * (some people are really attached to 'summer' homes), and I will keep saying, the best way is to only exempt a home the family (if married/single/etc) has lived in for at least 35% of the year exempt. (Allows moves, up to 2 homes, etc).
patientplatypus 4y ago
[dead]
aiisahik 4y ago
There are two very simple policy strategies for ensuring housing is affordable: (1) make it easier to build high density housing (2) make housing an unattractive financial asset Many have already talked about (1) but few understand (2) and what types of policies would promote it. This would include - heavily taxing capital gains owning land (not taxing the improvements) - limiting ownership to a very long lease (e.g. 99 yrs) similar to what they do in Singapore. Both would be highly politically unpopular for the majority of Americans and therefore they do not get implemented. What people don't realize is that fixing the housing problem actually requires certain people to GIVE UP something: - giving up the quality of your nice neighbourhood because a giant complex was built next door - giving up much of the capital appreciation in your house because it appreciated Both would be be highly unpopular for the majority of existing home owners. As a result everyone complains but politicians don't actually do anything and nothing changes. There is no such thing as additional affordable housing without any cost. There is a price to be paid. Most are not willing to pay it.
- jjcon 4y ago
  > fixing the housing problem actually requires certain people to GIVE UP something That sounds like just introducing new problems not fixing the problem, I'd rather extremely expensive housing over either 1 or 2
  - SQueeeeeL 4y ago
    >I'd rather extremely expensive housing over either 1 or 2 Damn I love hacker news. Can't wait for the ballooned tech salaries to pop in the USA when that next generation of engineers graduate
    - jjcon 4y ago
      Huh? What’s that have to do with things? I’m not even working in the USA
- maximilianroos 4y ago
  How would (2) change rental prices? Show its effect on the supply & demand of rental housing.
lifeisstillgood 4y ago
The obvious other option not mentioned is that if affordability is where cost (rent) is 30% or less of household income, and cost goes up, "simply" increase the household income. Policy action to force house prices lower might be socially beneficial - but changing the distribution of wealth to a fairer level also works for social good.
- ako 4y ago
  With supply and demand staying equal, higher income would just result in higher cost.
  - lifeisstillgood 4y ago
    If everyone had 70k per year housing costs would be less than 70k pa. Or another way to phrase your point (uncharitably) would be "if we gave poor people more money, then 'the market' would take it away again". Which either is giving malevolence to 'the market' for poor people specifically (while it obviously works well for the rich, or means that the market structure only rewards those above certain (relative) income My point is that redistribution of wealth obviously works at the extreme, so it's a market structure issue for points between that and current situation. (the 70k was something I worked out few years back by dividing the global GDP by global population. surprised me)
    - AnnikaL 4y ago
      The math seems a bit off on the 70k USD per person redistribution; GDP per capita in rich countries is around $70,000, but worldwide it's much lower. Wikipedia: > The per capita PPP GWP in 2017 was approximately 17,500 international dollars according to the World Factbook. According to the World Bank, the 2020 GWP in current dollars was approximately $84.705 trillion. (https://en.wikipedia.org/wiki/Gross_world_product https://en.wikipedia.org/wiki/Gross_world_product)
      - lifeisstillgood 4y ago
        My bad. I was thinking of total wealth - not sure where I got the figure back then (took longer than this) but wikipedia has total global wealth at 450 Trillion dollars or 57,000 per person (8bn). I suspect with PPP or different assumptions 70k is quite feasible. I think my main argument is stronger - if everyone had 70,000 of wealth then houses would be less than 70k. I am reminded of watching a movie with my kids - "Home" about a group of bumbling aliens who take over earth and move all the humans to Australia. (One girl escapes with a friendly alien and has adventures and learns the meaning of ... etc). It's fun for younger kids. Anyway, the point is that super advanced (but bumbling and ultimately nice) aliens simply transport every human to Australia and plonk them all down in front of instantly created suburban houses. Some people (elites?) will lose out - their houses will be less nice than pre-invasion, but for the vast majority of people it's a major upgrade - a life changing improvement. And roughly that's what the "if everyone had 70,000" idea is about. As the plot was not challenging especially on the third rewatch, I would try to imagine what happens next in Australia. Do people live pleasent suburban lives and human happiness is complete, or does it devolve into Haiti-like chaos ? Sadly my money is on Haiti as what keeps us from not killing or eating our neighbours is a sort of common story about how safe we are, how police and other services are there for us etc My only upside is that the aliens might do a random sorting of humans. If you were say in Fallujah or Haiti or Yemen and you and your neighbours and society all got moved to the same neighbourhood in Australia, then you take the same social structures, the same pressures of expectation and social performance, the same grudges. Disaster. But randomly spread (families) out and it seems different - the idea you will hold onto political grudges against a Norweigian neighbour and a Brazilian opposite seems odd - especially now you have to overcome the shock of the chnage and frankly the much nicer living standards you now have. Also lots of ice cream was available which might have helped
skybrian 4y ago
The "musical chairs" metaphor is slightly misleading because people can pay to take up more or less space. Most obviously by owning houses that are mostly vacant, but there are more subtle forms of it with it, like how you use "spare" bedrooms. Someone who needs the money will rent a spare bedroom out.
eagleinparadise 4y ago
I work in CRE. Came across a landsite where the city designated this site as surplus land about 15 years ago. It's 90k square feet and the city has an exclusive agreement with an affordable non-profit to build maybe 40 units or so. I'm trying to negotiate something nextdoor and the owner has a 150 unit project almost approved with small, rent restricted units. It uses some density bonuses but it's a private funded deal. The lot is also 1/4th the size as the lot I described above, but 3x the number of housing units. Great right? Except it's over parked so with the restricted rents, it's going to be tough for a private developer to pencil it. What about an affordable housing developer, who can pursue LIHTC funding? Here's feedback from LIHTC developers: It's too many units. The only money right now is in special needs development (housing for homeless, people with mental illness)... way too many units where 50% of the building has to be people with problems in one property. LIHTC is funding smaller projects than this. 9% tax credits only pay up to a cap $2.5M or so in developer fees... so no incentive to do bigger projects. Plus, gov't funding means you have to build lots of "extra stuff" in the project... so you end up losing unit count and end up with bigger units and more non-residential space. I'm not in affordable, but ask anyone in the affordable space. It's complicated, messy, and incentives are all over the place, not always going in the 'right' direction due to how the reality of the ground is (i.e. affordable developers play the game of making development fees... not building the most amount of units (you get penalized)) Want people to solve the housing crisis? Make it easy and cheap to build. Affordable housing often times is more expensive than market rate housing, just so you know. There's a lot of B.S. added through the process.
- anankaie 4y ago
  > not building the most amount of units (you get penalized)) Given that the whole point is to increase the number of units, this seems to be like a massive WTF that needs to be fixed - in the sense of "stop the whole process and fix this one thing", since it seems to be directly disincentivizing the specific outcome that is desired.
  - eagleinparadise 4y ago
    Yup... agreed
dukeofdoom 4y ago
Barndominium? Didn't know it was a thing until I saw it on youtube. Pretty much everyone is worse off since the pandemic except for pfizer. The decline continues, but the gaslighting intensifies. Soon ...follow up articles: "There's No Such thing as an Affordable Big Mac. " and "You will eat the Bugz"
solatic 4y ago
Building more luxury housing only creates vacancies in lower-tier housing markets if the wealthy people who bought the new luxury housing (a) move into the new luxury housing, (b) move out of their old housing, and (c) put their old housing on the market. Sadly this doesn't often seem to be the case. Sometimes new housing is purchased in order to have an additional permanent residence in another state, sometimes the new housing is purchased as an investment and kept empty. Sometimes housing is rented out (literally an economic rent) where the wallets of those less well-off are squeezed to line the pockets of the propertied class. There is a fundamental mismatch between real estate and housing. The feudal lords of centuries ago may have been far fewer in number and with far more day-to-day power, but the effect of private ownership of real estate being the lever of economic power is still quite real and true today. This isn't an argument for public ownership. Transportation and gridlock aside, suburbanization, where middle class people owned a small parcel of land on which their sole residence lay, was an enormous boon to those fortunate enough to access it. A modern approach that prioritizes density and modern transportation approaches while keeping that inherent formula - one residence for one family, with no other real estate holdings - will fix the housing market. How does this look like? * New development may not be purchased by private people, but by a public sector entity only, single-payer style. This public sector entity is then responsible for putting long-term housing on the market via rent-to-own at an auctioned price, i.e. the public sector entity establishes a price and holds an auction for the monthly rent, the person who bids the highest gets stable rent at that price for thirty years, after which the person becomes the registered owner of the property. If there are no bids, then a new auction is held; whether the price drops in the new auction or not are subject to market and political pressures. * Private sales of older developments are still legal, as is inheritance. Private renting is illegal. * Maintaining multiple residences incurs heavy property taxes at the federal level, with a three month overlap grace period to permit people to move into a new residence and put their old residence up for sale. Property owners may purchase adjacent properties (or buyout adjacent rent-to-owners) and combine them into a single property without incurring the tax, and subsequently may decide to parcel off some of their property and sell it (which would be tax neutral), but still may not rent out any portion of their newly-combined property. Property owners may decide to privately pay for redevelopment on their own, sole property, which would be tax neutral, and a grace period would be extended to ownership of a second property if that property is under redevelopment, for a maximum of one year, to not force people to live in a house that is under construction. If that could be enacted, watch real estate prices crash.
7e 4y ago
There's no such thing as affordable housing because humans are breeding animals. If they have available habitat, they will reproduce until they fill that habitat. Building houses decreases housing costs like building highways reduces traffic. It doesn't; it only makes the problem worse. High housing prices are a signal that humans are reaching equilibrium with their environment. Housing, food, educational and other costs are really the only things that can check the growth of humans, who have no natural predators.
- midoridensha 4y ago
  There's almost no evidence to support your assertion. In every developed country, the birthrate is well below replacement, and it's not because of housing costs, it's because people have better things to do with their time than to raise tons of kids. When given the choice and control over their reproduction, it seems most women only want 1-2 kids, with a bunch not wanting any. If housing cost really was keeping people from having kids, then billionaires' families would all look like the Duggars. They don't.
- eyelidlessness 4y ago
  This seems like a particularly callous or even cruel Malthusian position to take.
choeger 4y ago
That's a very particular perspective and I don't think it tells us a useful truth. While big cities definitely have this game of musical chairs, they already have lots of housing per sqkm. Yet, they all seem to have a housing crisis. Also, housing has a lower price limit. Adding more housing is expensive. Building new housing will always be more expensive than, say, ten years ago. It will also be the more expensive the higher you build. This premium needs to be paid for by rent. Thus, new housing will never filter completely to the bottom, unless the owners go bankrupt. Cities attract ever more people and that's the core reason of the housing crisis. Ironically, housing, and generally the lack of space, is one of the few factors that actually repulse migration into a city. Ease it and migration will increase, worsening the space (and housing) problem again, probably to a new level. I would argue that it's pointless to try to "solve" that problem, as long as cities profit from ever more people living in them and people economically profit from moving into or close to cities. Any attempt to mitigate the problem will only lead to more migration into the cities, forming a vicious cycle. One "solution" would of course be to let housing become completely unaffordable (e.g., just stop increasing or even actively decrease housing). Areas then become uninhabited by normal people. For certain areas this seems to be largely accepted: I don't think anyone has complained lately about the housing crisis in London's financial district. Another option would be to make it completely unattractive to actually live in a city. One could, for instance, restrict all buildings to single-bedroom apartments by law, move schools to the outside if the city, etc. People might then spend the night there, but will hardly live there. The interesting question should be: Why do people pay as much as they do today to live inside a big city? What makes it so much more attractive than living 5km further outside with 5-10 times the space per person?
- brianl047 4y ago
  Cities provide concentration of services that people need. No city, no services. They also provide concentration of jobs, and concentration of people. For an extreme example you can't have the full set of services for 1 person in the middle of nowhere without an impossible cost. So it all depends how independent you are from everything and everyone. If you have complex medical needs or need to be around certain people also in the city, you might have to live in the city. Homeless and mentally ill get treated by programs and services that can be afforded by major cities (small towns apocryphally throw homeless on a bus to the big city to fix their homeless problems).
OrvalWintermute 4y ago
The locale in which I live had several developments with "affordable housing". Lucky people moved in, and after meeting the minimum term, were able to sell off their properties into the regular market, pocketing a cool 750k per home profit. Our local subsidized housing is also notorious for having highend Luxury SUVs parked there. The sweet old ladies that live there, well, their sons and grandsons often do too, exploiting the situation. No party affiliation specific to this issue, just bad systems and laws that didn't work properly. Maybe I am in the minority here, but I view affordable and excellent mass transit systems as part of the cure for this.
m463 4y ago
interesting that I just read this other front-page article: "japan has changed in important and visible ways" https://news.ycombinator.com/item?id=34509182 https://news.ycombinator.com/item?id=34509182 specifically the part about affordable housing: "In fact, Japan’s fervor for constant scrap-and-build construction is a major reason why rent there is so affordable"...
- midoridensha 4y ago
  Except it's wrong. That whole article is full of half-truths and should be taken with a container ship of salt. Housing is affordable in Japan because of zoning, full stop. Zoning here doesn't allow NIMBYism, so there's few impediments to building more housing, anywhere it can physically be built. So as long as there's market demand for housing, housing gets built. The devaluation of existing housing structures over time might help some, because it makes it more economically attractive to buy up older properties and demolish them and build bigger, newer buildings on the land. But the real reason is the zoning law, which makes it really hard to stop development.
eyelidlessness 4y ago
It’s rare that I come across a passage like this and even read on, much less generally agree with its author: > This feels like a damning observation. In terms of the human suffering it points to, it is. But it’s also a really mundane, obvious one. Usually the person saying this kind of thing is defending the mundane, obvious terrible thing. I’m glad that wasn’t the case here.
refurb 4y ago
I’m not sure why we’re trying to solve a situation where not everyone can afford to live in desirable cities. That’s impossible to solve. The demand will always be far higher than ability to pay as long it's a desirable place to live. Owning real estate in Paris, NYC, London, Shanghai will always be out of reach for the average, middle class citizen. In fact, it’s good that people are discouraged from buying in these cities. They’ll go to other cities and buy, further distributing the population. We don’t need to be like Asian cities (Thailand, Vietnam, Taiwan) where 70-80% of the countries population live in 2 or 3 metro areas. Those countries would love to distribute their populations more broadly.
- cloudfifty 4y ago
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perilunar 4y ago
120 comments and no one has mentioned Henry George yet. For shame, HN.
- refurb 4y ago
  "This one secret trick to cheaper housing. Landlord's hate it!!"
grahamm 4y ago
At last some sense. You also cannot build your way out of a housing crisis. Something the UK government and local councils haven't yet understood.
cat_plus_plus 4y ago
I think a better question is - why does everyone have to live in LA? One answer is that America lost jobs that used to be done in the rest of the country and concentrated cities are the only places conducive to few remaining jobs like tech and finance. This can be tackled by making competition with the rest of the world more fair - if we have certain labor laws or environmental regulations, we can require goods produced abroad to comply with similar laws or face tariffs to compensate American businesses for extra overhead. At the same time, we can make tech/finance more accessible everywhere in the country through remote work and skill training. But America as a whole is NOT overpopulated, there are plenty of places where homes are cheap and that desperately need more people.
crtified 4y ago
When the ecosystem is saturated with humans, as it currently is under our current lifestyles, the increasing speed of land price increase is simply a microcosm, a symptom, of the planet saying that it's unaffordable for further humans to exist. The answer is not to figure out how we can pack YET MORE of us into every visible empty space. But I suspect it will take some time and dramatics for that fairly existential realisation to bed in. The real estate market in Japan is evidence that land value stagnation goes hand-in-hand with population stagnation. Imagine suddenly doubling Japan's population over the next 30-40 years - you think those Tokyo apartments would keep getting cheaper??
- TheCoelacanth 4y ago
  We are absolutely nowhere close to running out of empty space for people to live. Population growth has slowed greatly and we most likely never will. We are running out of space that has a sufficient population density to sustain a viable economy for people who aren't farmers and where you are still legally allowed to build housing. The solution to that is simple, you just need to allow housing to be built.
  - crtified 4y ago
    The world-average ecological footprint in 2016 was 2.75 global hectares per person, a deficit of 1.1 hectares per person, or 40%. Unsustainability isn't some vague future concept or possibility. It's already here. The ecological inertia of the entire homo sapiens species is already too great to be behaviourally overcome within the timeframes necessary to avert significantly disruptive climate change. The growth trend cannot continue at it's recent historical rates.
    - TheCoelacanth 4y ago
      What a complete non sequitur. Our lifestyles aren't unsustainable because of too much urban housing. If anything, it's the exact opposite. Suburban sprawl and car centric development extending into unpopulated areas is unsustainable. Densifying already populated areas is much more sustainable.
nazgulnarsil 4y ago
People's revealed very strong preference is to not live near poor people. As long as the only legal and socially acceptable method of satisfying this preference is high house prices you will consistently see overwhelming voter support for high house prices.

140 points by warning26 4y ago

0max 4y ago

Maybe "non-market housing" should be the more widely used term in North America for the kind of service "affordable housing" provides. It better frames the idea that the unit of housing isn't meant to be sold and priced based on market forces and dynamics.

HideousKojima 4y ago

>Why is there “no such thing as affordable housing”? Because affordability is not, and has never been, an intrinsic quality of a building. We draw bad conclusions when we talk about it as though it is. Who, exactly, is talking about affordability as though it's an intrinsic part of housing?

airza 4y ago
Countless municipal governments are trying to mandate a certain of units or percent of units be affordable.
- HideousKojima 4y ago
  Sure, but that's just variations on rent control, or tax incentives to builders to increase density, or whatever else they're using to try to increase the stock of housing. I still don't see how that suggests that the affordability is somehow intrinsic?
  - klipt 4y ago
    "Affordable" is often used as marketing speak for "subsidized". In effect, the city is forcing the property owner to select some random poor people and give them monthly "cash" to help pay their rent. Except that "cash" can only be used for one particular unit, which locks them in, so it's economically much less efficient than real cash. It's basically just an inefficient tax on property owners that gets redistributed to a handful of lucky people.
epicureanideal 4y ago
Many politicians and news media talk about it as if it’s an intrinsic quality, and also there are even “affordable” housing programs where affordable takes on special meanings that imply subsidies and set asides and so on. So whereas previously it was a neutral description it’s becoming a very particular thing.
- Vt71fcAqt7 4y ago
  It's the same trick as "access to healthcare" as if healthcare is just the ability to walk into a hospital. (Now, strictly speaking, one (less common) definition of access is "freedom or ability to obtain or make use of something" but the connotation intented is really "permission, liberty, or ability to enter, approach, or pass to and from a place or to approach or communicate with a person or thing"[0] because in the former "access" could be dropped entierly in sentences like "they don't have access to healthcare" to simply "they don't have healthcare." So it is clearly being used to create a certain (false) connotation) [0]https://www.merriam-webster.com/dictionary/access https://www.merriam-webster.com/dictionary/access
omeid2 4y ago
Unaffordable houses are not good for anyone; including investors. So just about everyone with skin in the game, developers, investors, municipalities, aspiring buyers, and economists almost always talk about affordability.
kube-system 4y ago
I have often heard the criticism that “developers only build luxury housing” and demand local government intervention to require “affordable” new construction.
Hermitian909 4y ago
I'm in the bay area. If you're at all involved in local housing you'll find there's a vocal group here opposed to any housing that isn't "affordable". While they may not actually believe it's intrinsic, the way they use rhetoric implies it is. This group and their rhetorical methods have successfully killed a lot of projects that could have housed hundreds of people (often with 30% of units being affordable).
djur 4y ago
Anyone who refers to new market-rate units as "luxury apartments", which is something you hear about new developments all the time.

jdkee 4y ago

"It doesn’t help that reporting and the prevailing political discourse alike often frame the entire problem as “how to build more affordable units.” (How to add to the 13,000.) Meanwhile, we fail to stanch the bleeding on the private market, where rents keep rising faster than incomes." People, acting as rational agents, will pay more to live in good neighborhoods and the market is simply responding to this fact.

roxgib 4y ago

So the tl;dr is that building more housing, of any kind, will alleviate prices at the lower end of the market. I think this makes a lot of sense, though I find it weird that he starts off by saying that new construction doesn't have any impact, and then finishes by saying the opposite. I hear this same thing a lot from economists who say the impact of new construction is too small because it only accounts for <1% of the total housing stock each year at best, but that doesn't make sense to me - what other levers are you going to pull? Immigration? Anyway, I'm putting all my hopes on remote work.

et1337 4y ago
I think the article is saying that new construction of all kinds of homes, including luxury homes, is the answer. As opposed to the meager handful of affordable housing units cities fund now while making it as hard as possible to build anything at all.
yazaddaruvala 4y ago
Create High-density Land Use taxes that roughly force people to sell parking lots and gas stations and other small buildings for tall housing developments? Enforce super blocks that are equally residential as they are comercial? ie if X job spaces exist in a super block there should be slightly more than X bedrooms available in the same super block. Target 100x more sqft by 2030? Instead of targeting 1%^7 more sqft by 2030
charlieflowers 4y ago
I don’t think that’s what he’s saying. He says new housing is underpowered. Rather, we need home values to decline instead of rise as properties age. And yet, too many have vested interests in them rising, making that the prevailing political context.

markus_zhang 4y ago

> The market forces pushing housing prices stratospheric in California are largely about the state’s severe housing shortage. I wonder where does QE lay on the list.

ddorian43 4y ago
Wasn't the FED buying all the 2.5% mortgages?
- metaphor 4y ago
  Interested to learn the source of where you got this 2.5% figure from. That QE activity peaked circa Apr 2022[1]. The Fed subsequently announced monetary policy circa May 2022[2] to reduce the size of their balance sheet; with respect to agency mortgage-backed securities, that means predictably liquidating assets in the open market at a rate cap of $35 billion per month. The Fed's weekly H.4.1[3] § 3 reports agency MBS assets are overwhelmingly residential. They were slowly ratcheting down commitments to buy MBS, and effectively reached 0 circa end of Oct 2022. [1] https://fred.stlouisfed.org/graph/?g=ZcQw https://fred.stlouisfed.org/graph/?g=ZcQw [2] https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [3] https://www.federalreserve.gov/releases/h41/20230119/ https://www.federalreserve.gov/releases/h41/20230119/
epistasis 4y ago
I'm not sure that QE has much to do with the shortage. That was started and is maintained by local political forces that want to stop new housing nearby. And most of those folks had paid off their mortgage or had it close to paid off, and have experienced so much appreciation that their purchase price is less than a current down payment.
maximilianroos 4y ago
Did they not have QE in Dallas or Detroit?

jamesblonde 4y ago

One of the things that makes Stockholm a great city for workers is the large amount of rent-controlled housing. You can get one of these apartments by queuing - the longer you are in the queue, the better the choice you have. Now, obviously this supports insiders over outsiders. And there are problems with having to queue for 10 years just to get an apartment in a nice area - as soon as you turn 18, put yourself in the queue (it's only 50 bucks/year). But the net effect is that the percentage of your income that goes on housing is less than half of what it would be if you bought a house or your own condo. It means people can afford to also own a motor boat, a summer house, and have a high quality of life.

TideAd 4y ago
What do people do during the 10 years they have to wait in line?
- fredsir 4y ago
  They have to find another solution. But instead of that lasting forever since their situation never becomes so that they can afford to buy a nice home, which is the case for many people, they only have to deal with that for 10 years at which point they get a lot of choices for nice homes at an affordable price. It’s the same here in Denmark.
  - lettergram 4y ago
    Gotta say, I feel bad for Europeans. In the states just about everyone can afford what you’d probably consider a “nice home” at an “affordable price”. To put it into perspective; at 20 my friend bought a house in the suburbs — 3 bedroom, 2 bath, 0.3 acres; decent neighborhood, driveway for his 2 cars; etc. he’s not college educated and cuts trees down for a living.
    - fredsir 4y ago
      Is that ignoring all the homeless people in the states, the people living in trailers, in their cars and so on while working multiple jobs?

johnea 4y ago

And there won't be, as long as there's an AirBnB option for investor ownership...

mjevans 4y ago
Or _any_ form of rental. It should be punishingly taxed to own more than 2 homes * (some people are really attached to 'summer' homes), and I will keep saying, the best way is to only exempt a home the family (if married/single/etc) has lived in for at least 35% of the year exempt. (Allows moves, up to 2 homes, etc).

patientplatypus 4y ago

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aiisahik 4y ago

There are two very simple policy strategies for ensuring housing is affordable: (1) make it easier to build high density housing (2) make housing an unattractive financial asset Many have already talked about (1) but few understand (2) and what types of policies would promote it. This would include - heavily taxing capital gains owning land (not taxing the improvements) - limiting ownership to a very long lease (e.g. 99 yrs) similar to what they do in Singapore. Both would be highly politically unpopular for the majority of Americans and therefore they do not get implemented. What people don't realize is that fixing the housing problem actually requires certain people to GIVE UP something: - giving up the quality of your nice neighbourhood because a giant complex was built next door - giving up much of the capital appreciation in your house because it appreciated Both would be be highly unpopular for the majority of existing home owners. As a result everyone complains but politicians don't actually do anything and nothing changes. There is no such thing as additional affordable housing without any cost. There is a price to be paid. Most are not willing to pay it.

jjcon 4y ago
> fixing the housing problem actually requires certain people to GIVE UP something That sounds like just introducing new problems not fixing the problem, I'd rather extremely expensive housing over either 1 or 2
- SQueeeeeL 4y ago
  >I'd rather extremely expensive housing over either 1 or 2 Damn I love hacker news. Can't wait for the ballooned tech salaries to pop in the USA when that next generation of engineers graduate
  - jjcon 4y ago
    Huh? What’s that have to do with things? I’m not even working in the USA
maximilianroos 4y ago
How would (2) change rental prices? Show its effect on the supply & demand of rental housing.

lifeisstillgood 4y ago

The obvious other option not mentioned is that if affordability is where cost (rent) is 30% or less of household income, and cost goes up, "simply" increase the household income. Policy action to force house prices lower might be socially beneficial - but changing the distribution of wealth to a fairer level also works for social good.

ako 4y ago
With supply and demand staying equal, higher income would just result in higher cost.
- lifeisstillgood 4y ago
  If everyone had 70k per year housing costs would be less than 70k pa. Or another way to phrase your point (uncharitably) would be "if we gave poor people more money, then 'the market' would take it away again". Which either is giving malevolence to 'the market' for poor people specifically (while it obviously works well for the rich, or means that the market structure only rewards those above certain (relative) income My point is that redistribution of wealth obviously works at the extreme, so it's a market structure issue for points between that and current situation. (the 70k was something I worked out few years back by dividing the global GDP by global population. surprised me)
  - AnnikaL 4y ago
    The math seems a bit off on the 70k USD per person redistribution; GDP per capita in rich countries is around $70,000, but worldwide it's much lower. Wikipedia: > The per capita PPP GWP in 2017 was approximately 17,500 international dollars according to the World Factbook. According to the World Bank, the 2020 GWP in current dollars was approximately $84.705 trillion. (https://en.wikipedia.org/wiki/Gross_world_product https://en.wikipedia.org/wiki/Gross_world_product)
    - lifeisstillgood 4y ago
      My bad. I was thinking of total wealth - not sure where I got the figure back then (took longer than this) but wikipedia has total global wealth at 450 Trillion dollars or 57,000 per person (8bn). I suspect with PPP or different assumptions 70k is quite feasible. I think my main argument is stronger - if everyone had 70,000 of wealth then houses would be less than 70k. I am reminded of watching a movie with my kids - "Home" about a group of bumbling aliens who take over earth and move all the humans to Australia. (One girl escapes with a friendly alien and has adventures and learns the meaning of ... etc). It's fun for younger kids. Anyway, the point is that super advanced (but bumbling and ultimately nice) aliens simply transport every human to Australia and plonk them all down in front of instantly created suburban houses. Some people (elites?) will lose out - their houses will be less nice than pre-invasion, but for the vast majority of people it's a major upgrade - a life changing improvement. And roughly that's what the "if everyone had 70,000" idea is about. As the plot was not challenging especially on the third rewatch, I would try to imagine what happens next in Australia. Do people live pleasent suburban lives and human happiness is complete, or does it devolve into Haiti-like chaos ? Sadly my money is on Haiti as what keeps us from not killing or eating our neighbours is a sort of common story about how safe we are, how police and other services are there for us etc My only upside is that the aliens might do a random sorting of humans. If you were say in Fallujah or Haiti or Yemen and you and your neighbours and society all got moved to the same neighbourhood in Australia, then you take the same social structures, the same pressures of expectation and social performance, the same grudges. Disaster. But randomly spread (families) out and it seems different - the idea you will hold onto political grudges against a Norweigian neighbour and a Brazilian opposite seems odd - especially now you have to overcome the shock of the chnage and frankly the much nicer living standards you now have. Also lots of ice cream was available which might have helped

skybrian 4y ago

The "musical chairs" metaphor is slightly misleading because people can pay to take up more or less space. Most obviously by owning houses that are mostly vacant, but there are more subtle forms of it with it, like how you use "spare" bedrooms. Someone who needs the money will rent a spare bedroom out.

eagleinparadise 4y ago

I work in CRE. Came across a landsite where the city designated this site as surplus land about 15 years ago. It's 90k square feet and the city has an exclusive agreement with an affordable non-profit to build maybe 40 units or so. I'm trying to negotiate something nextdoor and the owner has a 150 unit project almost approved with small, rent restricted units. It uses some density bonuses but it's a private funded deal. The lot is also 1/4th the size as the lot I described above, but 3x the number of housing units. Great right? Except it's over parked so with the restricted rents, it's going to be tough for a private developer to pencil it. What about an affordable housing developer, who can pursue LIHTC funding? Here's feedback from LIHTC developers: It's too many units. The only money right now is in special needs development (housing for homeless, people with mental illness)... way too many units where 50% of the building has to be people with problems in one property. LIHTC is funding smaller projects than this. 9% tax credits only pay up to a cap $2.5M or so in developer fees... so no incentive to do bigger projects. Plus, gov't funding means you have to build lots of "extra stuff" in the project... so you end up losing unit count and end up with bigger units and more non-residential space. I'm not in affordable, but ask anyone in the affordable space. It's complicated, messy, and incentives are all over the place, not always going in the 'right' direction due to how the reality of the ground is (i.e. affordable developers play the game of making development fees... not building the most amount of units (you get penalized)) Want people to solve the housing crisis? Make it easy and cheap to build. Affordable housing often times is more expensive than market rate housing, just so you know. There's a lot of B.S. added through the process.

anankaie 4y ago
> not building the most amount of units (you get penalized)) Given that the whole point is to increase the number of units, this seems to be like a massive WTF that needs to be fixed - in the sense of "stop the whole process and fix this one thing", since it seems to be directly disincentivizing the specific outcome that is desired.
- eagleinparadise 4y ago
  Yup... agreed

dukeofdoom 4y ago

Barndominium? Didn't know it was a thing until I saw it on youtube. Pretty much everyone is worse off since the pandemic except for pfizer. The decline continues, but the gaslighting intensifies. Soon ...follow up articles: "There's No Such thing as an Affordable Big Mac. " and "You will eat the Bugz"

solatic 4y ago

Building more luxury housing only creates vacancies in lower-tier housing markets if the wealthy people who bought the new luxury housing (a) move into the new luxury housing, (b) move out of their old housing, and (c) put their old housing on the market. Sadly this doesn't often seem to be the case. Sometimes new housing is purchased in order to have an additional permanent residence in another state, sometimes the new housing is purchased as an investment and kept empty. Sometimes housing is rented out (literally an economic rent) where the wallets of those less well-off are squeezed to line the pockets of the propertied class. There is a fundamental mismatch between real estate and housing. The feudal lords of centuries ago may have been far fewer in number and with far more day-to-day power, but the effect of private ownership of real estate being the lever of economic power is still quite real and true today. This isn't an argument for public ownership. Transportation and gridlock aside, suburbanization, where middle class people owned a small parcel of land on which their sole residence lay, was an enormous boon to those fortunate enough to access it. A modern approach that prioritizes density and modern transportation approaches while keeping that inherent formula - one residence for one family, with no other real estate holdings - will fix the housing market. How does this look like? * New development may not be purchased by private people, but by a public sector entity only, single-payer style. This public sector entity is then responsible for putting long-term housing on the market via rent-to-own at an auctioned price, i.e. the public sector entity establishes a price and holds an auction for the monthly rent, the person who bids the highest gets stable rent at that price for thirty years, after which the person becomes the registered owner of the property. If there are no bids, then a new auction is held; whether the price drops in the new auction or not are subject to market and political pressures. * Private sales of older developments are still legal, as is inheritance. Private renting is illegal. * Maintaining multiple residences incurs heavy property taxes at the federal level, with a three month overlap grace period to permit people to move into a new residence and put their old residence up for sale. Property owners may purchase adjacent properties (or buyout adjacent rent-to-owners) and combine them into a single property without incurring the tax, and subsequently may decide to parcel off some of their property and sell it (which would be tax neutral), but still may not rent out any portion of their newly-combined property. Property owners may decide to privately pay for redevelopment on their own, sole property, which would be tax neutral, and a grace period would be extended to ownership of a second property if that property is under redevelopment, for a maximum of one year, to not force people to live in a house that is under construction. If that could be enacted, watch real estate prices crash.

7e 4y ago

There's no such thing as affordable housing because humans are breeding animals. If they have available habitat, they will reproduce until they fill that habitat. Building houses decreases housing costs like building highways reduces traffic. It doesn't; it only makes the problem worse. High housing prices are a signal that humans are reaching equilibrium with their environment. Housing, food, educational and other costs are really the only things that can check the growth of humans, who have no natural predators.

midoridensha 4y ago
There's almost no evidence to support your assertion. In every developed country, the birthrate is well below replacement, and it's not because of housing costs, it's because people have better things to do with their time than to raise tons of kids. When given the choice and control over their reproduction, it seems most women only want 1-2 kids, with a bunch not wanting any. If housing cost really was keeping people from having kids, then billionaires' families would all look like the Duggars. They don't.
eyelidlessness 4y ago
This seems like a particularly callous or even cruel Malthusian position to take.

choeger 4y ago

That's a very particular perspective and I don't think it tells us a useful truth. While big cities definitely have this game of musical chairs, they already have lots of housing per sqkm. Yet, they all seem to have a housing crisis. Also, housing has a lower price limit. Adding more housing is expensive. Building new housing will always be more expensive than, say, ten years ago. It will also be the more expensive the higher you build. This premium needs to be paid for by rent. Thus, new housing will never filter completely to the bottom, unless the owners go bankrupt. Cities attract ever more people and that's the core reason of the housing crisis. Ironically, housing, and generally the lack of space, is one of the few factors that actually repulse migration into a city. Ease it and migration will increase, worsening the space (and housing) problem again, probably to a new level. I would argue that it's pointless to try to "solve" that problem, as long as cities profit from ever more people living in them and people economically profit from moving into or close to cities. Any attempt to mitigate the problem will only lead to more migration into the cities, forming a vicious cycle. One "solution" would of course be to let housing become completely unaffordable (e.g., just stop increasing or even actively decrease housing). Areas then become uninhabited by normal people. For certain areas this seems to be largely accepted: I don't think anyone has complained lately about the housing crisis in London's financial district. Another option would be to make it completely unattractive to actually live in a city. One could, for instance, restrict all buildings to single-bedroom apartments by law, move schools to the outside if the city, etc. People might then spend the night there, but will hardly live there. The interesting question should be: Why do people pay as much as they do today to live inside a big city? What makes it so much more attractive than living 5km further outside with 5-10 times the space per person?

brianl047 4y ago
Cities provide concentration of services that people need. No city, no services. They also provide concentration of jobs, and concentration of people. For an extreme example you can't have the full set of services for 1 person in the middle of nowhere without an impossible cost. So it all depends how independent you are from everything and everyone. If you have complex medical needs or need to be around certain people also in the city, you might have to live in the city. Homeless and mentally ill get treated by programs and services that can be afforded by major cities (small towns apocryphally throw homeless on a bus to the big city to fix their homeless problems).

OrvalWintermute 4y ago

The locale in which I live had several developments with "affordable housing". Lucky people moved in, and after meeting the minimum term, were able to sell off their properties into the regular market, pocketing a cool 750k per home profit. Our local subsidized housing is also notorious for having highend Luxury SUVs parked there. The sweet old ladies that live there, well, their sons and grandsons often do too, exploiting the situation. No party affiliation specific to this issue, just bad systems and laws that didn't work properly. Maybe I am in the minority here, but I view affordable and excellent mass transit systems as part of the cure for this.

m463 4y ago

interesting that I just read this other front-page article: "japan has changed in important and visible ways" https://news.ycombinator.com/item?id=34509182 https://news.ycombinator.com/item?id=34509182 specifically the part about affordable housing: "In fact, Japan’s fervor for constant scrap-and-build construction is a major reason why rent there is so affordable"...

midoridensha 4y ago
Except it's wrong. That whole article is full of half-truths and should be taken with a container ship of salt. Housing is affordable in Japan because of zoning, full stop. Zoning here doesn't allow NIMBYism, so there's few impediments to building more housing, anywhere it can physically be built. So as long as there's market demand for housing, housing gets built. The devaluation of existing housing structures over time might help some, because it makes it more economically attractive to buy up older properties and demolish them and build bigger, newer buildings on the land. But the real reason is the zoning law, which makes it really hard to stop development.

eyelidlessness 4y ago

It’s rare that I come across a passage like this and even read on, much less generally agree with its author: > This feels like a damning observation. In terms of the human suffering it points to, it is. But it’s also a really mundane, obvious one. Usually the person saying this kind of thing is defending the mundane, obvious terrible thing. I’m glad that wasn’t the case here.

refurb 4y ago

I’m not sure why we’re trying to solve a situation where not everyone can afford to live in desirable cities. That’s impossible to solve. The demand will always be far higher than ability to pay as long it's a desirable place to live. Owning real estate in Paris, NYC, London, Shanghai will always be out of reach for the average, middle class citizen. In fact, it’s good that people are discouraged from buying in these cities. They’ll go to other cities and buy, further distributing the population. We don’t need to be like Asian cities (Thailand, Vietnam, Taiwan) where 70-80% of the countries population live in 2 or 3 metro areas. Those countries would love to distribute their populations more broadly.

cloudfifty 4y ago
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perilunar 4y ago

120 comments and no one has mentioned Henry George yet. For shame, HN.

refurb 4y ago
"This one secret trick to cheaper housing. Landlord's hate it!!"

grahamm 4y ago

At last some sense. You also cannot build your way out of a housing crisis. Something the UK government and local councils haven't yet understood.

cat_plus_plus 4y ago

I think a better question is - why does everyone have to live in LA? One answer is that America lost jobs that used to be done in the rest of the country and concentrated cities are the only places conducive to few remaining jobs like tech and finance. This can be tackled by making competition with the rest of the world more fair - if we have certain labor laws or environmental regulations, we can require goods produced abroad to comply with similar laws or face tariffs to compensate American businesses for extra overhead. At the same time, we can make tech/finance more accessible everywhere in the country through remote work and skill training. But America as a whole is NOT overpopulated, there are plenty of places where homes are cheap and that desperately need more people.

crtified 4y ago

When the ecosystem is saturated with humans, as it currently is under our current lifestyles, the increasing speed of land price increase is simply a microcosm, a symptom, of the planet saying that it's unaffordable for further humans to exist. The answer is not to figure out how we can pack YET MORE of us into every visible empty space. But I suspect it will take some time and dramatics for that fairly existential realisation to bed in. The real estate market in Japan is evidence that land value stagnation goes hand-in-hand with population stagnation. Imagine suddenly doubling Japan's population over the next 30-40 years - you think those Tokyo apartments would keep getting cheaper??

TheCoelacanth 4y ago
We are absolutely nowhere close to running out of empty space for people to live. Population growth has slowed greatly and we most likely never will. We are running out of space that has a sufficient population density to sustain a viable economy for people who aren't farmers and where you are still legally allowed to build housing. The solution to that is simple, you just need to allow housing to be built.
- crtified 4y ago
  The world-average ecological footprint in 2016 was 2.75 global hectares per person, a deficit of 1.1 hectares per person, or 40%. Unsustainability isn't some vague future concept or possibility. It's already here. The ecological inertia of the entire homo sapiens species is already too great to be behaviourally overcome within the timeframes necessary to avert significantly disruptive climate change. The growth trend cannot continue at it's recent historical rates.
  - TheCoelacanth 4y ago
    What a complete non sequitur. Our lifestyles aren't unsustainable because of too much urban housing. If anything, it's the exact opposite. Suburban sprawl and car centric development extending into unpopulated areas is unsustainable. Densifying already populated areas is much more sustainable.

nazgulnarsil 4y ago

People's revealed very strong preference is to not live near poor people. As long as the only legal and socially acceptable method of satisfying this preference is high house prices you will consistently see overwhelming voter support for high house prices.