6 ms·

Given the Boston market this will still help everyone. My household is making north of 300k and was still having trouble bidding on home where there were dead c

• michaelmrose 3y ago
  It's not clear that you can meaningfully effect availability of "regular" housing by building any reasonable number of luxury homes. Slightly reducing the cost of luxury apartments may attract more buyers from outside the city, average the rate of vacancy may increase without the price going down much. They can be purchased by the rich to be used as unlicensed hotels aka airbnb. They can be ought up as "investments" and not effectively rented out effectively enough as long as you don't build so much you literally flood the market. Even if the price of expensive apartments does go down a little because more people are able to afford "luxury" you don't necessarily have to let the little guy in on the savings you can as an industry collude to keep the price as high as the market can bear without literally becoming homeless. You don't even have to actually collude in an illegal fashion if your interests are actually sufficiently aligned that you all act in lockstep without overt coordination. Any real savings can be virtually entirely absorbed by the owner class.
  • eliasmacpherson 3y ago
    Agree - it's the 'Trickle-down Effect' except with property instead of wealth.
    • TulliusCicero 3y ago
      No, it's just basic supply and demand.
      • eliasmacpherson 3y ago
        A definition of demand: Demand is an economic concept that relates to a consumer's desire to purchase goods and services and willingness to pay a specific price for them. The poor do not have the willingness to pay a whole category of prices, as they are unable to finance it. Creating luxury accommodation can increase supply, but as the decrease in price does not necessarily put the older accommodation within reach, the owners of captial can choose to retain it.
        • watwut 3y ago
          Undesirable areas are full of cheap mansions, slowly decaying because no one wants to live in a place with no jobs. Housing is not that special, when there is a lot of it, it gets cheap.
          • eliasmacpherson 3y ago
            Nobody with enough capital to buy/rent them wants to live there.
        • ecshafer 3y ago
          If there are 10 houses available and there are 12 families looking to buy then the they will bid up and the 10 wealthiest families win. If you build 2 luxury homes, it doesn’t matter if poor families 11 and 12 can’t afford them, because 1 and 2 can, which makes them not bid on normal house 1, 2, …, n lowering all housing prices.
          • eliasmacpherson 3y ago
            why do you assume a wealthy family will only buy one house, or could be outbid by a poor family?
            • steveBK123 3y ago
              Are things made better or worse by building the 11th & 12th houses when there are 12 families in need of houses?
  • Karrot_Kream 3y ago
    > They can be purchased by the rich to be used as unlicensed hotels aka airbnb. They can be ought up as "investments" and not effectively rented out effectively enough as long as you don't build so much you literally flood the market. There's a natural floor to this though. For example, if Boston built 3 housing units for every human being on the planet, there would hardly be any problem even if every person wanted to live in Boston and own multiple units. This is obviously absurd, but hints at the greater point. There's a point along the supply/demand curve where prices will end up falling, no matter how much external demand or AirBnb rentals come into the area. The argument I think you're making is that there's no way to build enough housing units in a reasonable amount of time to meaningfully affect non-upper-end housing. There's not much controversy about that in practice (though weirdly enough there is a lot online.) California (and many Californian cities sweeten these deals) specifically offers developers many benefits for varying percentages of affordable housing mixes in their units. Boston also seems to have income-restricted housing as well. Most pro-housing policymakers agree that housing isn't just a build-build-build game but that incentives need to be offered to ensure affordable units are built along with upper end luxury housing.
    • lovich 3y ago
      We really just need to build in the Boston area. I’m politically pretty close to full on communist but all the policies I’ve seen around creating affordable housing are failures from my analysis. Rent control changes who gets a home from a decision of whose wealthiest to whose luckiest which isn’t any morally or functionally better. Subsidizing or requiring developers to have “affordable” units in developments either offloads the cost to the other purchasers which will increase the average unit price in the area, which will cause people who used to be able to afford a home to slide down into too poor to afford one. All that’s doing is just moving around who gets to lose when it comes to this scarce resource. The only answer to a scarce resource with high demand is to produce more of it. Unfortunately Boston, like most US cities, is full of nimbyism. It’s exacerbated by the fact that existing homeowners tend to have more political power just by virtue of the fact that they are more tied to the location and have a vested interest in voting in the area, vs renters who are more likely to up and move instead of invest time in local politics. I also harp on the luxury housing building quite a bit. Emotionally it hurts to see only luxury housing being built when there is a housing crunch hurting the poor or middle class. The pragmatic bit however is that developers are always going to be incentivized to build luxury housing since it nets them the most profit. These building eventually turn into non luxury housing as the building age and the owners decide to not repair the unit to spec, or standards change and what is considered high end today isn’t in 20 years. We should stop fighting the natural incentives here with developers and lean into them to just build build build, imo. The policy decisions that I think require actual thought are more along the lines of zoning and standards. Policies that require parking spots for every unit even when they are next to subway stations for instance hurt density a lot. Zoning being in the hands of towns who can act in a parasitic manner is also something that needs to be addressed, with my preference being something more along the lines of Japan’s zoning policies
  • JumpCrisscross 3y ago
    > not clear that you can meaningfully effect availability of "regular" housing by building any reasonable number of luxury homes Most of New York's affordable housing is former luxury townhouses subdivided. You saw similar subdividing in Phoenix post crash. Every time people study this, they find building housing–any housing–eases prices. Yet every time a debate about building housing in high-cost areas comes up, someone comes out with this and throws a wrench in the gears. (The marginal property in a high-cost area will always be luxury. That's what high cost means.) Anecdote: I've negotiated down my rent in New York based on new luxury developments nearby. I tallied up the cost of their amenities, saw how much I spend, compared the floor plans and showed my work to the landlord. Two units had already left, and I knew one had sized up to the luxury. Based on the math, it made sense–$200 for far more square footage. Landlord delayed but eventually agreed and reduced my rent to keep me.
• eli_gottlieb 3y ago
  >My household is making north of 300k and was still having trouble bidding on home where there were dead cockroaches visible during the showing. What size of place are you looking for? My partner and I bought in Boston in 2019 while making a fraction of that income.
  • steveBK123 3y ago
    you'd be surprised how much the market has moved my brother & his wife are expecting a kid and were looking at houses within 30min of Boston the last place they lost a bidding war on was $600K.. for a 3bed/1bath 1000 sq foot.. well outside the city, went for 20% over ask.. crazy stuff
  • lovich 3y ago
    Somerville around Sullivan square. Was paying 3200 a month all in on a 1200 sq ft townhouse. Looked at a few of the homes around our street and they were selling for 700k-1million and off market in a few days after posting. This was all a few months before covid. We found some places we could afford but they either made our commute fairly long(>1 hour each way), would stretch our budget to have zero tolerance for emergencies, or both
    • steveBK123 3y ago
      This describes my brothers situation pretty much. People also have a lot of received wisdom of how they were brought up in the burbs and just assume you HAVE TO buy. There's plenty of markets where prices/rent are upside down and you might as well rent indefinitely. People forget you are either renting housing or renting money to "own" housing. If you are disciplined enough to save the difference, renting can be better in some markets. Mostly its HCOL coastal cities where people are accepting ridiculously low rental yield because they are banking on price appreciation. If you don't know if you want to be in X location for the next 5.. probably more like 10 years, there's not always a solid reason to buy.
      • lovich 3y ago
        That was where we ended up on the math. We liked the idea of owning our own home and building equity in it, but the cost was too high and like you said, we couldn’t conclude we’d be in the area in even 2 years. Covid hitting a few months after we started looking also definitely helped solidify that opinion and things might have turned out differently if we didn’t have a worldwide plague causing me and my wife tons of uncertainty in the future