3 ms·

Why does no one want to increase the housing supply then unless they can get federal money to do so?

by th0ma5 3y ago

AnthonyMouse 3y ago
Plenty of people do, but zoning rules make it expensive. Suppose you want to build a 20 story condo. The most efficient thing to do is to find an empty plot of land or a single family home and build it there, but that's prohibited by zoning. 20 story buildings aren't allowed there. Now what you have to do is find an existing 10 story condo and knock that down, because it's in a place zoned for tall buildings. But that costs a lot more, and you also have to remove all the people who are already living there instead of just buying one house from someone who is already moving. It's so much more expensive than the first thing that it's not profitable, so it doesn't happen without a subsidy. Not only that, even if it does happen, you've now paid to build a 20 story building and only added 10 stories worth of housing.
- th0ma5 3y ago
  You're trying to make some kind of libertarian point, I'm talking about what real people are saying is really actually happening and what is needed. https://thehill.com/opinion/congress-blog/3499112-solving-the-housing-crisis-requires-long-term-federal-investment/ https://thehill.com/opinion/congress-blog/3499112-solving-th... ... You're saying that demand isn't high enough for them to justify spending the money? That's exactly my point but you're saying they are beholden to do nothing and blame the government when by your own logic they just want more money.
  - AnthonyMouse 3y ago
    > You're saying that demand isn't high enough for them to justify spending the money? What I'm saying is that they passed laws that make increasing supply so outrageously expensive that demand has to remain at outrageously high levels to trigger construction. You can't get to reasonable housing costs that way because construction companies can't sustainably operate at a loss. You have to make it sustainable by not prohibiting construction where it's the most cost effective. > by your own logic they just want more money. Of course they want money. They have to pay for land and construction crews. But if you increase their costs by prohibiting them from building on the most cost effective sites, the amount they want before they'll be willing to do it goes up. Construction companies don't make anything by not building. But they also don't make anything if government regulations increase their costs above real estate prices. So every time you increase their costs with a new regulation, real estate prices go up -- and stay there until you remove the rule that keeps their costs high. (Or something causes demand to go down, which is typically only something bad.)

Why does no one want to increase the housing supply then unless they can get federal money to do so?

by th0ma5 3y ago

Why does no one want to increase the housing supply then unless they can get federal money to do so?

Plenty of people do, but zoning rules make it expensive. Suppose you want to build a 20 story condo. The most efficient thing to do is to find an empty plot of land or a single family home and build it there, but that's prohibited by zoning. 20 story buildings aren't allowed there. Now what you have to do is find an existing 10 story condo and knock that down, because it's in a place zoned for tall buildings. But that costs a lot more, and you also have to remove all the people who are already living there instead of just buying one house from someone who is already moving. It's so much more expensive than the first thing that it's not profitable, so it doesn't happen without a subsidy. Not only that, even if it does happen, you've now paid to build a 20 story building and only added 10 stories worth of housing.

th0ma5 3y ago
You're trying to make some kind of libertarian point, I'm talking about what real people are saying is really actually happening and what is needed. https://thehill.com/opinion/congress-blog/3499112-solving-the-housing-crisis-requires-long-term-federal-investment/ https://thehill.com/opinion/congress-blog/3499112-solving-th... ... You're saying that demand isn't high enough for them to justify spending the money? That's exactly my point but you're saying they are beholden to do nothing and blame the government when by your own logic they just want more money.
- AnthonyMouse 3y ago
  > You're saying that demand isn't high enough for them to justify spending the money? What I'm saying is that they passed laws that make increasing supply so outrageously expensive that demand has to remain at outrageously high levels to trigger construction. You can't get to reasonable housing costs that way because construction companies can't sustainably operate at a loss. You have to make it sustainable by not prohibiting construction where it's the most cost effective. > by your own logic they just want more money. Of course they want money. They have to pay for land and construction crews. But if you increase their costs by prohibiting them from building on the most cost effective sites, the amount they want before they'll be willing to do it goes up. Construction companies don't make anything by not building. But they also don't make anything if government regulations increase their costs above real estate prices. So every time you increase their costs with a new regulation, real estate prices go up -- and stay there until you remove the rule that keeps their costs high. (Or something causes demand to go down, which is typically only something bad.)