4 ms·

We choose not to do it - and I dont believe its calls for subsidy alone, if you build 100,000+ market rate units in SF Bay, PDX, or SEA - the price for market r

by Aloha 4y ago

We choose not to do it - and I dont believe its calls for subsidy alone, if you build 100,000+ market rate units in SF Bay, PDX, or SEA - the price for market rate housing will drop, by some measurable amount. You keep letting developers build housing until there is no more demand to build more, even if it's the foo-foo luxury apartments - they will put downward price pressure on the 3rd floor walkups.

seanmcdirmid 4y ago
You are assuming that the economics of house building is such that developers would do as many projects as they could if only they were allowed to, but even in the current market, property developers are still very picky and have to make sure they can make a decent profit; land costs are only one part of that. If you let developers build 100,000 market rate places in one city, (a) they actually don’t have the resources (labor, capital) to do that in some reasonable time frame and (b) they would pull back if sale prices began dropping below their costs plus profit margin.
- Aloha 4y ago
  First, I mentioned regions, and do be clear, I'm referring to regions - Thats the point, there is a point where is does reach equilibrium and the price of lower tier and less desirable housing starts to fall. The Bay Area has 7m people in it, SF proper 800k, you could grow the number of housing units by 10% every decade, or less - and it's more than feasible. Seattle Metro is 4m people, and Portland is 2m. That works out to 700k housing units in SF Bay, 400k in Seattle Metro and 200k in Portland Metro - those while seemingly giant numbers are absolutely feasible to build. Why do you think Houston is so cheap to live in? or for that matter DFW? one, we have 100 miles of prairie in every direction to build in, so building is cheap - two, we impose few structural barriers to prevent new construction.
  - seanmcdirmid 4y ago
    They aren’t really though. Labor is limited, material production is limited, there is a lot of supply and demand going on that can drive up prices. You can’t magic away those costs. Houston is cheap to live in because it simply isn’t a place that a lot of people want to live. Young people who dream of Texas dream of living in Austin, not Houston or Dallas. That puts growth on Austin, stoking supply and demand, whereas Dallas and Houston are growing much more slowly. If you want affordable housing and are happy not living in a hot/popular location, things get much easier.
    - Aloha 4y ago
      As far as I can tell based on the statistics I can find, both DFW and Houston have built around 50% more housing in a given year than Austin over a 20 year period.
      - seanmcdirmid 4y ago
        The only data I can find is here, which is regional: https://theamericangenius.com/housing/big-data/these-50-us-cities-have-the-most-new-construction-homes/ https://theamericangenius.com/housing/big-data/these-50-us-c... Austin is at 11 with 150k housing starts, Dallas is first at 320k starts for SFHs, 133k vs 233k for MFH. Austin is growing at 25%, Dallas at 15%. But Dallas area is 7.6 million vs Austin Area at 2.35 million. So while Dallas is building more in absolute terms, it isn’t in relative terms.
        Aloha 4y ago
        Both are growing their hosing stock by between 5-11% of their population. How many more houses would Portland metro, Seattle or SF bay have to build to match?
        seanmcdirmid 4y ago
        Seattle is just behind Austin on the list, and ranks just above it in population (4 million). Seattle is already more than twice as dense as either Austin or Dallas (9000 per sqm vs 3000-4000 per sqm).

by Aloha 4y ago

seanmcdirmid 4y ago

You are assuming that the economics of house building is such that developers would do as many projects as they could if only they were allowed to, but even in the current market, property developers are still very picky and have to make sure they can make a decent profit; land costs are only one part of that. If you let developers build 100,000 market rate places in one city, (a) they actually don’t have the resources (labor, capital) to do that in some reasonable time frame and (b) they would pull back if sale prices began dropping below their costs plus profit margin.

Aloha 4y ago
First, I mentioned regions, and do be clear, I'm referring to regions - Thats the point, there is a point where is does reach equilibrium and the price of lower tier and less desirable housing starts to fall. The Bay Area has 7m people in it, SF proper 800k, you could grow the number of housing units by 10% every decade, or less - and it's more than feasible. Seattle Metro is 4m people, and Portland is 2m. That works out to 700k housing units in SF Bay, 400k in Seattle Metro and 200k in Portland Metro - those while seemingly giant numbers are absolutely feasible to build. Why do you think Houston is so cheap to live in? or for that matter DFW? one, we have 100 miles of prairie in every direction to build in, so building is cheap - two, we impose few structural barriers to prevent new construction.
- seanmcdirmid 4y ago
  They aren’t really though. Labor is limited, material production is limited, there is a lot of supply and demand going on that can drive up prices. You can’t magic away those costs. Houston is cheap to live in because it simply isn’t a place that a lot of people want to live. Young people who dream of Texas dream of living in Austin, not Houston or Dallas. That puts growth on Austin, stoking supply and demand, whereas Dallas and Houston are growing much more slowly. If you want affordable housing and are happy not living in a hot/popular location, things get much easier.
  - Aloha 4y ago
    As far as I can tell based on the statistics I can find, both DFW and Houston have built around 50% more housing in a given year than Austin over a 20 year period.
    - seanmcdirmid 4y ago
      The only data I can find is here, which is regional: https://theamericangenius.com/housing/big-data/these-50-us-cities-have-the-most-new-construction-homes/ https://theamericangenius.com/housing/big-data/these-50-us-c... Austin is at 11 with 150k housing starts, Dallas is first at 320k starts for SFHs, 133k vs 233k for MFH. Austin is growing at 25%, Dallas at 15%. But Dallas area is 7.6 million vs Austin Area at 2.35 million. So while Dallas is building more in absolute terms, it isn’t in relative terms.
      - Aloha 4y ago
        Both are growing their hosing stock by between 5-11% of their population. How many more houses would Portland metro, Seattle or SF bay have to build to match?
        seanmcdirmid 4y ago
        Seattle is just behind Austin on the list, and ranks just above it in population (4 million). Seattle is already more than twice as dense as either Austin or Dallas (9000 per sqm vs 3000-4000 per sqm).