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Let the office real estate industry crash and burn, so that developers lobby for the zoning to build more housing instead of more offices. The worst thing we c

• dingusdew 4y ago
  [dead]
• davidw 4y ago
  What'd be really fantastic is to just have "zoning" that keeps truly noxious uses (slaughterhouses, say) separated. Offices, housing, light commercial operating during daytime hours... it's not really that big a deal if it's mixed up a lot more than it is now. In many ways, it'd be preferable, so that people didn't need to go so far to do things.
  • lallysingh 4y ago
    I don't know, how would that play out with school districts?
    • davidw 4y ago
      Where there's demand: build more schools. Where demand falls: decommission or repurpose the schools.
    • ryukafalz 4y ago
      Aren't school districts mostly funded by local tax revenue and by states proportionally to the number of students? More residents (and thus more students) means more funding to work with. They probably would need to expand, though.
      • ghaff 4y ago
        > More residents (and thus more students) means more funding to work with. Except in my town, as is fairly common, an incremental student costs more than the contribution from local property taxes and the state. So the fairly rural town of about 7,000 generally resists any plans that would markedly increase the number of students in the town.
        • onlyrealcuzzo 4y ago
          How are you sure they're trying to keep out students and not keep out something else, or trying to pump up something (their home prices on leverage)?
          • ghaff 4y ago
            Because I've heard the discussions at town hall and seen the actual figures. In fact that was just a very contentious vote to rezone some residential land for light industry (like distribution centers) primarily for the financial reasons.
        • ryukafalz 4y ago
          Is the difference made up by federal funding now then? (I don't know as much about federal school funding but it doesn't seem to scale by the number of students.)
          • ghaff 4y ago
            No. They have to balance the budget which may mean taking money from other things like public services. (Although something like 60% of property taxes already goes to schools.) And, if they can't make that work, there will need to be a vote to raise property taxes.
            • olddustytrail 4y ago
              How does that work? If we fix the school budget as it is, then obviously if you only have one student and one family there's not enough money to run it. So presumably adding more students and families is what makes it affordable. Why does that stop? What's the inflexion point?
  • DelaneyM 4y ago
    Generally I agree, but unfortunately many newer, denser, cities can't be easily rezoned/rebuilt into residential/mixed use because the city infrastructure (usually plumbing) can't handle it. So major conversion projects need not only zoning approval but also major municipal investments. It turns out zoning is not just an arbitrary categorization, but also a guidance for public works. This is a tough trap, because it's hard to convince a local gov to put up much more capacity than required for office use when an office building goes in (that would be a waste of taxpayer funds). (I've tried to do this, even put up capital and hired an architect, but it hit this wall.)
    • davidw 4y ago
      Zoning is extremely arbitrary, especially at a neighborhood scale. You could easily get rid of it and just let the technical limitations fall where they may. They'll differ a lot between different places. Also newer cities in the US tend to not be denser. Because of zoning. I've read that converting actual office buildings is tricky and often not worth it outside of all but the most expensive housing markets, but that's different from liberalizing the zoning regime.
      • Animats 4y ago
        > converting actual office buildings is tricky In large commercial buildings, too much of the floor space is too far from a window. This is why dead malls are so useless.
        • ghaff 4y ago
          Dead malls have all sorts of problems. The buildings are usually often old and cheaply constructed and would probably largely need to be gutted which is probably not worth it. But even if you contemplate just building from scratch, if a mall is dead it's probably because it's located somewhere there isn't a ton of demand. That's certainly the case with the one near me.
      • ericmay 4y ago
        There are a few problems, Zoning is probably the least of the problems in the sense that we could effectively waive a magic wand and solve it, but it is a political problem which makes it more difficult than it needs to be. One reservation I have is what zoning we get rid of and where. Many cities such as Columbus where I live have fantastic, medium-density neighborhoods that we really shouldn't touch. On the other hand the downtown area is full of surface parking lots that are not only empty most of the time in the evenings but post-COVID empty most of the time all of the time. Something I'd advocate for in a 1-2 punch would be to remove parking minimums city-wide but also to remove zoning restrictions in the downtown core first to create density there where we lack it before we try and remove it in our neighborhoods that we know are good and appropriately dense to start with. Most of the density/zoning problems as they relate to neighborhoods exist in the suburbs, not cities. You're right about the office renovation though too. That's an issue. Thankfully those buildings are owned by someone who, frankly, has to spend the money to do something useful with them. We should make/let them solve their own problem there because whatever they solve for will be good for downtown cores. Unfortunately zoning is going to become a political nightmare. Already state governments in locations such as Ohio where I live are now working to block cities from slowing down traffic or providing alternate means of transportation options instead of the car-only (the government says you aren't allowed to do anything but drive a car) infrastructure we pay for now.
  • spywaregorilla 4y ago
    traffic, plumbing, electric substations, schools, noise, animals, safety, affordability, walkability, public transit, etc.
  • PuppyTailWags 4y ago
    Zoning already separates commercial and industrial uses. Slaughterhouses, refineries, and the like are industrial.
    • davidw 4y ago
      It also does things like separate single family homes from, say, 3-plexes, or from corner stores, which is very arbitrary, and terrible in a number of ways, like increasing economic segregation and preventing people from being able to walk to every day amenities. Good book for the curious: https://islandpress.org/books/arbitrary-lines https://islandpress.org/books/arbitrary-lines
      • bombcar 4y ago
        Zoning has a lot of "good ideas" if you will, but arbitrarily implemented by limiting the types of building. So instead of specifically limiting heavy truck access on a given street, it tries to limit the type of buildings. Much of zoning could be fixed by directly aiming at the problems instead of just saying "only single family homes are permitted here".
        • deleted 4y ago
          [deleted]
      • brk 4y ago
        I think there is a harsh reality that the buyers that want nicer single family homes WANT economic segregation. There is generally no benefit for those buyers to live next to or near "affordable housing". This creates a disincentive to create this kind of housing layout.
        • davidw 4y ago
          It wasn't that long ago that buyers wanted racial segregation too: https://www.epi.org/publication/the-color-of-law-a-forgotten-history-of-how-our-government-segregated-america/ https://www.epi.org/publication/the-color-of-law-a-forgotten... That's one of many reasons that a lot of the better reforms we're seeing are at the state level, where it's easier to do the right thing and where politicians are less beholden to a few local loudmouths.
  • dsfyu404ed 4y ago
    We already have this in the form of environmental regulations. They do a pretty good job preventing all but the most moneyed interests from doing stuff that will have effects off their and only their property.
  • soperj 4y ago
    Don't know if you've ever been to a city with a slaughterhouse, but you can't exactly zone the smell away. Normally you can smell the city before you can see it.
    • davidw 4y ago
      Fair enough, it's just an example of something that I think most people really would consider a truly noxious land use, rather than, say, a corner store, or a 3-plex, which are things that current zoning has a big say about in a lot of places.
    • readthenotes1 4y ago
      or papermill
    • mikem170 4y ago
      I know that Japan has a separate industrial zoning category for things like that. In most of the developed world stuff like this often ends up the east side of town, because in the northern hemisphere prevailing winds usually come from the west. Poor people often end up on the east side of towns for the same reason.
• passwordoops 4y ago
  "The worst thing we can do right now is bail out commercial real estate investors" Which is why you know they're gonna do it. Can't let market forces get in the way of a good "campaign contribution", right ? :/
  • jjoonathan 4y ago
    They're gonna try to do it. The battle is not yet lost.
• ghaff 4y ago
  It remains to be seen where city populations end up if convenient commute to an office and hangout with workmates in the city are no longer factors that play into living in a city for many.
  • Someone1234 4y ago
    Presumably with more walkable suburban neighborhoods where you can hang out with your neighbors during your lunch breaks or after work. With the unfortunate side-effects of fewer vehicles, lower emissions, better traffic for those who do have to travel, and more economic efficiencies.
    • RestlessMind 4y ago
      Why would existing neighborhoods become suddenly walkable? Will there be a change in zoning? Will some single family houses be replaced by retail stores? Will there be sidewalks constructed everywhere (a prerequisite for walkability)? Would be great to see examples of suburban walkable neighborhoods. I might even consider moving there.
  • toomuchtodo 4y ago
    Closer to family and a school if they need one for kids. No kids and no need to be near family? Closer to whatever makes your quality of life better in some way.
    • ghaff 4y ago
      Think that's about right. Sure, some--especially younger--people will want to live in the city anyway. But remove avoiding a 2 hour unpleasant roundtrip commute every day as an incentive for urban living and the equation probably changes for a lot of people--even if they still end up going in once a week or so.
• short_sells_poo 4y ago
  > Markets as optimization tools only work if people are made to suffer their losses when they occur; bailouts subvert the process and pervert the outcomes. This is such an important aspect of optimization that is often forgotten. Small crashes have to happen and as much pain as they cause, they are nothing compared to what will get heaved if they turn systemic. They have an important function of keeping the players honest and up to date about their risk models. In a world where nobody is allowed to fail, risk taking will balloon monotonically until the entire system fails. This is basically axiomatic. Real estate investments are again seen as a risk free asset class, where the only way is up. You know things are bad when we have landlords clutching their pearls about having a negative year of returns. This is nuts. The pain is important. It reminds everyone about the left tails and that they should de-lever carefully now, before things get amplified into a systemic crash where controlled de-levering becomes impossible.
  • lamontcg 4y ago
    > Small crashes have to happen and as much pain as they cause, they are nothing compared to what will get heaved if they turn systemic. The CMBS crash is very likely to be systemic.
    • RichEO 4y ago
      In the event of a systemic crash, human beings should be bailed out by government support. Corporations should be allowed to fail. Corporations already exist to shield their owners from consequences of their decisions.
      • lamontcg 4y ago
        Which causes rippling credit defaults and money market failures and now every corporation can't get short-term financing for payroll and ATMs stop working. And really that last sentence is the problem. Even if the companies fail it lands on the stockholders, who often had no idea what was going on, a good chunk of them having bought the company through 401(k) funds. The executives go on to other businesses and there's no real consequences for the humans that actually made the decision. We need to really end the fiction that its the legal entity of corporations that make decisions and should be punished. In reality its the humans behind the curtains doing the deciding, that curtain needs to get stripped away if there is to be real consequences.
• AlbertCory 4y ago
  Big non-residential buildings are hard to just convert to residential. They tend to stay as commercial. At least that's my observation in my 'hood. The Lucky supermarket is becoming a Whole Foods. The Orchard Supply Hardware was a Goodwill for a while, and now it's going to be a Costco. The Rite Aid became a dim sum palace. A Chinese restaurant became a Sprouts grocery store. None of them became homes. Why not? I can only guess, not being in that business.
  • robertlagrant 4y ago
    They're zoned as commercial, no doubt.
  • bell-cot 4y ago
    Article is "Office Landlord...", your examples seem all to be "large retail". Though obviously a stand-alone grocery store or such would be easier to knock down and replace with residential, vs. a (say) 5+ story office. (And the article clearly focuses on much taller office towers.)
    • AlbertCory 4y ago
      You're right, but there aren't any tall office towers near me. The office buildings that I'm aware of have not been converted to anything. Do you know of some?
  • nradov 4y ago
    Most commercial buildings just aren't suitable for residential use. The plumbing, electrical, and interior walls are all wrong for code compliance and to make separate units where people actually want to live. Exterior windows and doors might also be missing. So developers have to completely gut the structure and rebuild. In high cost areas, most of the cost comes from land acquisition, permitting, and various impact fees or mandates (like requirements for BMR units). The construction cost is a relatively small fraction. Might as well demolish the existing structure and rebuild from scratch.
  • kevin_thibedeau 4y ago
• 300bps 4y ago
  bailouts subvert the process and pervert the outcomes Moral Hazard https://en.wikipedia.org/wiki/Moral_hazard https://en.wikipedia.org/wiki/Moral_hazard
• thwayunion 4y ago
  Good luck. The dominant economic ideology in the USA is capitalism, not marketism.
• jschveibinz 4y ago
  I’m not a commercial real estate guy, but…please be careful about wishing a “crash” on any sector of the economy. Whether you live in the US or not, commercial real estate investments are widely held—not just “those stinkin’ bilyunares.” A commercial real estate default would kill many urban centers and that only makes things worse for urban residents-rich or poor. Here is a relevant stat: 150 million Americans own some type of investment in REIT’s. Even if you don’t believe the number, I betting that the order of magnitude is correct. https://www.reit.com/data-research/research/nareit-research/150-million-americans-own-reit-stocks https://www.reit.com/data-research/research/nareit-research/...
  • olddustytrail 4y ago
    Sure, but how many of those are in funds of some sort where 1% is in REITs? They might not care that much.
• lamontcg 4y ago
  > Markets as optimization tools only work if people are made to suffer their losses when they occur; bailouts subvert the process and pervert the outcomes. Their losses become our losses when the failures create systemic risk of a banking and financial collapse. A total lockup of the US financial system would mean that companies with a yearly business cycle wouldn't be able to make monthly payroll and ATMs would stop working. You can't isolate the pain down only to the bad actors, everyone suffers. If wall street builds a shitty nuclear reactor and it melts down in the middle of Manhattan, there really is no option for "well just let it fail" because the fallout will cover the area. It works the same way with finance. Once the whole system is at risk then the government has to act in order to save it. What needs to happen is regulation up front. Once the financial system is melting down then the system has to be rescued. What we could alternatively do is at least jail the executives and remove the liability protections of working from within a corporate structure. But the idea to just let everything fail is how you destroy the US financial system. And we actually tried that back in 2008 when the Bush Administration let Lehman fail. That was bad enough that it would up with Paulson down on one knee begging Nancy Pelosi to not play politics and to rescue the financial system.