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Get rid of zoning, stop financializing homes as a financial asset, and this problem will go away. The market is actually pretty good at solving this issue. If h

Get rid of zoning, stop financializing homes as a financial asset, and this problem will go away. The market is actually pretty good at solving this issue. If homes get expensive, they'll replace houses with apartments and condos, or build more homes. This will increase supply to keep up with demand.

JumpCrisscross 3y ago
Exactly. Housing shortages are a policy choice made by local and state voters. This is not a natural crisis.
- pierat 3y ago
  Definitely. I tried to find a house in our nearby bigger city. The prices were 100k higher than I was planning on spending, and also had upwards of a 1 year wait to close because they were being used as a rental property. Instead, I was able to find a house in the nearby smaller town's outskirts. However that means that I live in the county, as I did before. It also means I have no say in the town's elections, nor do I have any say in the city's elections. And I'm 2000 feet away from the town, yet cant vote there. And I even worked in person in the bigger city, and lived in a trailer park 3 miles away from the city square, yet 1/3 of a mile away from the city. I spent 40 hours a week there, and no voting rights. I deserve a quarter of a vote given my taxes went there, and I was there quarter of my living hours. The ones who can afford to live there are the ones enforcing terrible laws, and are gatekeeping the rest of us out.
  - JumpCrisscross 3y ago
    > I deserve a quarter of a vote given my taxes went there The City of London does this. It doesn’t work in America: you can easily defuse it by claiming they’re votes for corporations or point to a random wealthy person in the suburbs.
starik36 3y ago
I was about to call bullshit on your assertion about removing zoning. I did a quick look comparing Houston, which has no zoning laws at all, vs Dallas. https://www.bestplaces.net/compare-cities/houston_tx/dallas_tx/housing https://www.bestplaces.net/compare-cities/houston_tx/dallas_... It appears (without me knowing anything else about the area conditions), that prices in Dallas rise faster. On the other hand, I don't want my quiet neighborhood to explode with dense high rise apartments. I appreciate the peace and quiet.
- justrealist 3y ago
  > I don't want my quiet neighborhood to explode with dense high rise apartments. I appreciate the peace and quiet. Don't want to be too capitalist about it, but cheap plentiful housing would make it easy for you to pick a cheap peaceful neighborhood somewhere else.
- bombcar 3y ago
  Houston has zoning by a different name, it's just covenants on the land.
  - astrange 3y ago
    Houston also still has other extremely expensive requirements like parking minimums. The national traffic engineers' guides for parking are based on some of the most made up statistics you've ever seen and feature things like parking requirements for bars, as if they were trying to encourage drunk driving.
    - pierat 3y ago
      > feature things like parking requirements for bars, as if they were trying to encourage drunk driving. I wonder if anybody's ever actually used that to say the State and Feds support inebriated driving, since they require parking for bar patrons. This place is for drinking alcohol, and the last thing that should be included is parking for the drinking customers. But drunk driving is illegal <wink wink>.
barelysapient 3y ago
Exactly this. And, a hard look at building construction standards in regards to HVAC, electrical and plumbing could help too. Plumbing is about $5.25 sq/ft for new construction [1] and electrical is about $9 sq/ft [2]. On a 2,000 sq/ft house, this is almost $30,000 alone. Permit costs should be looked at too. In my city, permit costs alone are $5,000 [3]. Permitting also has a hidden cost, because frequently in my city, the inspections take months. My neighbor's 1800 sq/ft 2bed 2 bath house build took two years, most of it spent waiting for inspections. This increases costs substantially. [1] - https://www.forbes.com/home-improvement/plumbing/install-replace-plumbing-cost/ https://www.forbes.com/home-improvement/plumbing/install-rep... [2] - https://www.electriciantalk.com/threads/estimate-for-new-house.278962/ https://www.electriciantalk.com/threads/estimate-for-new-hou... [3] - https://www.houzeo.com/blog/how-much-does-it-cost-to-build-a-house-austin-tx/ https://www.houzeo.com/blog/how-much-does-it-cost-to-build-a...
- bombcar 3y ago
  The fixed costs of building keep rising, so there is no point in building a minimum code sized house (you have some really great houses in 700 sq ft). Nobody will build a 700 sq ft house because the fixed costs are such that the per sq ft goes plaid.
  - jermaustin1 3y ago
    It really is such a shame. Houses just keep getting bigger. I would love a modern 1200 square foot house, but I would either have to buy a 1960s home with all the issues that come with it, or pay 2-3x per sqft of a "Master Planned Community"
    - pierat 3y ago
      Don't forget the $300/mo HOA fees with that 'master planned community'.
    - tzs 3y ago
      What issues are you worried about a 1960s home having? I can think of a few things that might be issues with some houses that old, but they are all things that your inspector would find. A home that old is unlikely to have any original appliances, and has a good chance to have been upgraded to 200 amp electrical service. The roof has probably been replaced a couple times. So for all that it isn't really much different than buying a house that is maybe 10 years old. Some things might be grandfathered in from earlier codes, which can be a little annoying but in most cases probably won't cause problems. Insulation might not be up to current standards, which could be a problem depending on the climate.
bugglebeetle 3y ago
The “market” is what created the financialization of homes to drive up returns on investments on them in the form of ever more baroque asset classes.
- mattnewton 3y ago
  There is very little “free” about the housing market- the supply side is incredibly regulated, often at the requests of home owners who treat their home equity as a savings account.
  - bugglebeetle 3y ago
    The market is how it exists, not in some libertarian fantasy of unfettered exchange. If there’s money to be made bribing politicians to prevent housing from being built or turning every single family home into a rental, the market will coalesce toward those ends. But feel free to tell me how you’re going to dismantle homes owner and investment firm power over the US political class and create a world where home values are flat or go down. The political party who did this would be immediately cast out of office.
    - mattnewton 3y ago
      I don’t disagree with any of that, I merely disagree that the anything resembling a free market created these issues through increased financialization. That is a symptom of the underlying issues you mentioned.
      - deleted 3y ago
        [deleted]
      - bugglebeetle 3y ago
        The underlying issue is what markets are in reality.
ToucanLoucan 3y ago
I see these first two arguments very often in online discourse but I've yet to have the zoning thing really explained. Zoning isn't why we have millions upon millions of homes sitting empty, it's the second one you've listed: that homes are treated as financial assets first, and a requirement for a life well lived second. So fair enough, then let's stop that. Tax the absolute hell out of vacant homes at rates so high it's financially disastrous to hold them as assets. Then the price of homes will crash as corporate landlords/holders dump stock to avoid the bill.
- whimsicalism 3y ago
  Millions of homes are sitting empty because they are in places people don't want to live or don't have jobs that allow them to afford their lives. > Tax the absolute hell out of vacant homes at rates so high it's financially disastrous to hold them as assets Higher taxes on homes - regardless of the action being taxed, will not get you to where we need to be on housing unless they are paired with subsidies. We already are not building enough of them, we should not be imposing higher costs unless we are prepared to offset it elsewhere. Vacancy taxes might be part of the solution, but they also encourage sparser living to occupy more homes simultaneously.
  - ToucanLoucan 3y ago
    > Millions of homes are sitting empty because they are in places people don't want to live or don't have jobs that allow them to afford their lives. I have a feeling it's much more the second than the first there. I know some people are picky but I have a hard time imagining a person who would willingly choose homelessness because they're just that committed to a given area. > Higher taxes on homes - regardless of the action being taxed, will not get you to where we need to be on housing unless they are paired with subsidies. I'm proposing higher taxes on houses, not homes. The difference being the former is held as stock to be sold later, and the latter is lived within by it's owner (or someone who has a business relationship with the owner.) > We already are not building enough of them, we should not be imposing higher costs unless we are prepared to offset it elsewhere. In what way in your mind is someone under my suggestion spending more money to build a home? > Vacancy taxes might be part of the solution That's literally what I've suggested. Taxing homes that are vacant.
nimbius 3y ago
The lack of zoning directly contributed to the damage or destruction of more than 150 homes during the 2020 houston chemical explosion. Zoning exists for very important life safety reasons the market cannot account for. https://en.wikipedia.org/wiki/2020_Houston_explosion https://en.wikipedia.org/wiki/2020_Houston_explosion
- astrange 3y ago
  That can be dealt with by environmental laws. Zoning exists to keep minorities out of whites-only neighborhoods. As in, when zoning was implemented this is the reason they said they were doing it and you can just go back and read the meeting minutes. As an example, the most famous restaurant in California is called "French Laundry" because "French laundries" were a way of signaling they were owned by white people, so white customers could go to them without accidentally supporting a Chinese immigrant business. But there's no environmental risk in allowing a corner store or a Chinese laundry in a residential neighborhood.
  - karaterobot 3y ago
    Could you say more about your claim that zoning exists to keep minorities out of white-only neighborhoods? Specifically, do you mean to say that all zoning laws exist for this purpose, or only some of them? And do you mean that all zoning laws still exist for this purpose, or that that was their original intent? And I assume your claim is specifically meant to apply with respect to the U.S., and not to other countries who've had zoning laws in place for thousands of years. Hypothetically, would you say that the U.S. would have ignored the precedent for zoning laws that came from, e.g., England if they did not provide a convenient way to keep minorities out of whites-only neighborhoods? Would we be living in a zoning-free society if not for racism?
    - astrange 3y ago
      > Could you say more about your claim that zoning exists to keep minorities out of white-only neighborhoods? As I said, you can just go read the meeting minutes when they were introduced in the early 20th century and it's why they said they were doing it. But there's a book called The Color of Law about it. > And do you mean that all zoning laws still exist for this purpose, or that that was their original intent? They still exist because they haven't been removed yet and the SCOTUS precedent (Euclid v Ambler) that authorizes them hasn't been overruled. Racial covenants on individual properties were removed, but not that. > precedent for zoning laws that came from, e.g., England To be clear, England doesn't have zoning, it has /much worse ideas/ where you can't do anything without planning permission and the US is a big improvement over it. (Urban growth boundaries are okay though, but the US has national parks so we're cooler.) > Would we be living in a zoning-free society if not for racism? We would still have things that you probably think of as zoning but are not actually zoning. For instance, it's legal to have a corner store in a housing district in any given old quaint European country, and Japan has some light forms of zoning strictly controlled at the national level so individual cities don't get big ideas about becoming exclusive.
whimsicalism 3y ago
> stop financializing homes as a financial asset ... The market is actually pretty good at solving this issue. "financializing" in this case is a scare word describing the functioning of markets. not sure how you finance the apartments you're constructing without "financializing."
- kelp 3y ago
  I think the point of the original comment was that in the US we setup a system where the default way to build wealth is to buy a primary residence and wait for it to appreciate in value. The "financialzing" is just that we decided owning a home was the best way for the middle class to build wealth. The downside of this is now every homeowner wants their residence to go up in value. So they support policies that encourage that. We've done that for so long, few people can afford to buy a home anymore. The alternative would be to 1) not have the gov involved in incentivizing homeownership 2) change zoning and permitting policies to encourage much much more supply Yes, there would be financial instruments involved in all of this. But it might look more like car ownership, where the asset depreciates over time. (Like is often the case in Japan with housing). But housing would not be something people look at as a way to build wealth. However, you could still make money building housing, apartments, etc. Or even owning apartment buildings and charging people to live in them.
  - whimsicalism 3y ago
    If anything, I would say it would mark a 're-financialization' of assets if we were to stop doing that, as given that the government owns pretty much all mortgages we're not talking about an actual financial market in mortgage debt as they normally function.
  - astrange 3y ago
    > But it might look more like car ownership, where the asset depreciates over time. (Like is often the case in Japan with housing). This is becoming less true over time. Japanese houses depreciated because they had terrible quality / no insulation / they kept updating the earthquake codes, but they've grown larger and are fairly decent now. But more importantly, in either place it's not the house that appreciates but the land under it. So the best policy to prevent this is a land value tax, but this very much annoys people who would like to make unproductive use of land they own, ie residential landlords or retirees.
tick_tock_tick 3y ago
Zoning cause the financializion (which is still so small as to basically a non issue). Build build build and the issue is solved.
- mcntsh 3y ago
  Not saying that building won't alleviate problems but people must understand there's a lower limit to home prices, considering labor/material and investment costs...
  - fragmede 3y ago
    That argues that how we pay for housing to be built is currently broken. One solution is for the government to subsidize the building of housing, which would let prices go below that lower limit.
strangattractor 3y ago
"Since the 1960s, Turkey has permitted periodic legal exemptions to developers and property owners, allowing them to bypass safety certification by paying a fee. At least 75,000 buildings in the affected earthquake zone were found to have received construction amnesties.May 17, 2023" https://www1.wsrb.com/blog/turkey-building-codes-and-the-importance-of-regulation#:~:text=Since%20the%201960s%2C%20Turkey%20has,to%20have%20received%20construction%20amnesties https://www1.wsrb.com/blog/turkey-building-codes-and-the-imp...
- bitcurious 3y ago
  Architectural engineering and zoning are orthogonal. As an example, zoning is about how tall a NYC skyscraper can be, engineering is about it not falling over. Your article is about the latter.
  - strangattractor 3y ago
    Really - I didn't read it that way at all. Sure the engineering was shitty because they wanted it cheap. Developers were allowed to bypass normal Zoning and other Regulations (building codes) that required certain engineering and inspections by paying a fee. The end result was quickly built buildings that in a big quake crushed human occupants. I think most of the Zoning laws are about what purposes the building can serve. Like do you really want a meat packing plant built in your neighborhood or a fireworks factory? Now there maybe overly restrictive Zoning but having no Zoning is likely not a good idea.
    - runako 3y ago
      Not speaking for OP, but when people are commenting on affordability and talk about getting rid of zoning, they typically mean "making it easy to build residential dwellings in areas zoned residential." Unfortunately, this is not the case in much of the country now. For example, if you own a single-family home, you are not likely able to: - convert it to a duplex, triplex, or quadplex without changing the footprint of the building - build an ADU for another resident on your property, even if it will fit and otherwise be up to code - tear your house down and build a 5-story residential building These codes aren't about preventing meatpacking plants from being built in residential neighborhoods as much as they are about creating an artificial ceiling on the number of residents of a residential neighborhood.
adamredwoods 3y ago
I think building materials, labor, and land is increasing prices. So the market cannot meet demand and is partly causing the problem. I do think cities can work on accelerating permits and zoning, but cities are strapped for funding to assign people to help with this. Again, shortage of workers. Down the street from us, is a nice land that has been parceled, they cleared and leveled the land, laid sewer, underground electricity, all set to build houses. Only one problem, the demand for housing has crashed, due to the market. 6 houses all set to be built, completely stalled. >> stop financializing homes as a financial asset I don't understand. Isn't this dictated by the market?
- runako 3y ago
  > accelerating permits and zoning, but cities are strapped for funding to assign people to help Permits are one of the few municipal services where this argument doesn't make sense. Permits aren't free, after all. Permit revenue scales with the number of permit applications. A city overwhelmed with permit applications by definition has more money to hire staff to work the permitting process.
  - PaulDavisThe1st 3y ago
    > A city overwhelmed with permit applications by definition has more money to hire staff to work the permitting process. Let's say you are paid "appropriately", and that your income comes from the fee payments associated with the tasks you complete. You're fully occupied, and the income from fees matches the expenses (including your salary). Things are in balance, so to speak. Now we increase the number of fee payments by 80%. You can no longer complete all the associated tasks in any reasonably time frame, but the fee payments will not pay for an additional full time member of staff.
    - runako 3y ago
      > the fee payments will not pay for an additional full time member of staff Fortunately, there is no requirement that municipalities only employ people full-time.
- 3y ago
ayakang31415 3y ago
I personally prefer with more aggressive zoning laws that prohibits high population density residency. What I would prefer to see instead is to designate affordable residential zones much more widely and implement very aggressive policy (which we do not have now unfortunately) to incentivize people to move into that new zones effectively (Of course, that's what public officials have been trying to do, but so far no one has achieved that to satisfactory standards). High population density city, I believe, actually exacerbates lots of problems that SF or NY cities currently have. I theorize that if you get rid of zoning and relax construction regulations, according to Pareto distribution, more people will flow into the highly desirable places easily and that will eventually lead to much higher housing prices and more problems that are associated with high density area. P.S: There is one case where Korean government relaxed zoning restrictions and construction regulations of Seoul to reduce the housing prices by providing more homes, but it failed as well (https://www.globalpropertyguide.com/asia/south-korea/price-history https://www.globalpropertyguide.com/asia/south-korea/price-h...). Moreover, now the city looks really really awful with all the high rise apartments (https://english.hani.co.kr/arti/english_edition/e_business/1000795.html https://english.hani.co.kr/arti/english_edition/e_business/1...)
- JumpCrisscross 3y ago
  > aggressive policy (which we do not have now unfortunately) to incentivize people to move into that new zones effectively This is urban sprawl. It’s what we’ve been doing for decades. It’s a social, environmental and economic disaster. Low density works for the very rich (can put through the inefficiency) and destitute (who accept the lower standard of living). For the educated or middle income, who won’t accept a lower standard of living at higher cost, it’s a road to increased emissions, shorter lives and less choice on everything.
  - ayakang31415 3y ago
    Yeah unfortunately everything we tried to achieve that failed AFAIK. But I honestly believe that zoning should be implemented accordingly.
lotsoweiners 3y ago
> Get rid of zoning, stop financializing homes as a financial asset, and this problem will go away. While I don’t disagree with you, you’re saying this like it is the easy part. It’s probably political career suicide for anyone who proposed getting rid of zoning and there isn’t really any way to stop homes from being a financial asset (because what would then be the point of home ownership)? Big building projects can take a decade or more so you wouldn’t likely see enough new housing stock to make a real difference in home prices for a generation or two. Mortgage rate increases have done nothing more than stall and slightly decrease home prices but now you have a higher mortgage payment. Currently, people who have a “starter home” or townhouse etc have no incentive to move up in house size which because of higher rates. This was previously very important for younger or less well off people to be able to afford something to own. I think a new mechanism needs to be developed that could incentivize people to sell their homes.
- JumpCrisscross 3y ago
  > Big building projects can take a decade or more so you wouldn’t likely see enough new housing stock to make a real difference in home prices for a generation or two This is a problem of permitting. Let developers build and you’ll see housing within two years.
  - lotsoweiners 3y ago
    You might see some amount of housing but you’re missing materials, labor, land availability, risk aversion, and probably a few other things.
- PaulDavisThe1st 3y ago
  > what would then be the point of home ownership having a place to live? Trading off potentially greater financial returns elsewhere for whatever one perceives as the benefits of actual ownership? It's not as if actual home ownership has made the USA so much better than the countries around the world where more people choose to rent.
  - 3y ago

JumpCrisscross 3y ago

Exactly. Housing shortages are a policy choice made by local and state voters. This is not a natural crisis.

pierat 3y ago
Definitely. I tried to find a house in our nearby bigger city. The prices were 100k higher than I was planning on spending, and also had upwards of a 1 year wait to close because they were being used as a rental property. Instead, I was able to find a house in the nearby smaller town's outskirts. However that means that I live in the county, as I did before. It also means I have no say in the town's elections, nor do I have any say in the city's elections. And I'm 2000 feet away from the town, yet cant vote there. And I even worked in person in the bigger city, and lived in a trailer park 3 miles away from the city square, yet 1/3 of a mile away from the city. I spent 40 hours a week there, and no voting rights. I deserve a quarter of a vote given my taxes went there, and I was there quarter of my living hours. The ones who can afford to live there are the ones enforcing terrible laws, and are gatekeeping the rest of us out.
- JumpCrisscross 3y ago
  > I deserve a quarter of a vote given my taxes went there The City of London does this. It doesn’t work in America: you can easily defuse it by claiming they’re votes for corporations or point to a random wealthy person in the suburbs.

starik36 3y ago

I was about to call bullshit on your assertion about removing zoning. I did a quick look comparing Houston, which has no zoning laws at all, vs Dallas. https://www.bestplaces.net/compare-cities/houston_tx/dallas_tx/housing https://www.bestplaces.net/compare-cities/houston_tx/dallas_... It appears (without me knowing anything else about the area conditions), that prices in Dallas rise faster. On the other hand, I don't want my quiet neighborhood to explode with dense high rise apartments. I appreciate the peace and quiet.

justrealist 3y ago
> I don't want my quiet neighborhood to explode with dense high rise apartments. I appreciate the peace and quiet. Don't want to be too capitalist about it, but cheap plentiful housing would make it easy for you to pick a cheap peaceful neighborhood somewhere else.
bombcar 3y ago
Houston has zoning by a different name, it's just covenants on the land.
- astrange 3y ago
  Houston also still has other extremely expensive requirements like parking minimums. The national traffic engineers' guides for parking are based on some of the most made up statistics you've ever seen and feature things like parking requirements for bars, as if they were trying to encourage drunk driving.
  - pierat 3y ago
    > feature things like parking requirements for bars, as if they were trying to encourage drunk driving. I wonder if anybody's ever actually used that to say the State and Feds support inebriated driving, since they require parking for bar patrons. This place is for drinking alcohol, and the last thing that should be included is parking for the drinking customers. But drunk driving is illegal <wink wink>.

barelysapient 3y ago

Exactly this. And, a hard look at building construction standards in regards to HVAC, electrical and plumbing could help too. Plumbing is about $5.25 sq/ft for new construction [1] and electrical is about $9 sq/ft [2]. On a 2,000 sq/ft house, this is almost $30,000 alone. Permit costs should be looked at too. In my city, permit costs alone are $5,000 [3]. Permitting also has a hidden cost, because frequently in my city, the inspections take months. My neighbor's 1800 sq/ft 2bed 2 bath house build took two years, most of it spent waiting for inspections. This increases costs substantially. [1] - https://www.forbes.com/home-improvement/plumbing/install-replace-plumbing-cost/ https://www.forbes.com/home-improvement/plumbing/install-rep... [2] - https://www.electriciantalk.com/threads/estimate-for-new-house.278962/ https://www.electriciantalk.com/threads/estimate-for-new-hou... [3] - https://www.houzeo.com/blog/how-much-does-it-cost-to-build-a-house-austin-tx/ https://www.houzeo.com/blog/how-much-does-it-cost-to-build-a...

bombcar 3y ago
The fixed costs of building keep rising, so there is no point in building a minimum code sized house (you have some really great houses in 700 sq ft). Nobody will build a 700 sq ft house because the fixed costs are such that the per sq ft goes plaid.
- jermaustin1 3y ago
  It really is such a shame. Houses just keep getting bigger. I would love a modern 1200 square foot house, but I would either have to buy a 1960s home with all the issues that come with it, or pay 2-3x per sqft of a "Master Planned Community"
  - pierat 3y ago
    Don't forget the $300/mo HOA fees with that 'master planned community'.
  - tzs 3y ago
    What issues are you worried about a 1960s home having? I can think of a few things that might be issues with some houses that old, but they are all things that your inspector would find. A home that old is unlikely to have any original appliances, and has a good chance to have been upgraded to 200 amp electrical service. The roof has probably been replaced a couple times. So for all that it isn't really much different than buying a house that is maybe 10 years old. Some things might be grandfathered in from earlier codes, which can be a little annoying but in most cases probably won't cause problems. Insulation might not be up to current standards, which could be a problem depending on the climate.

bugglebeetle 3y ago

The “market” is what created the financialization of homes to drive up returns on investments on them in the form of ever more baroque asset classes.

mattnewton 3y ago
There is very little “free” about the housing market- the supply side is incredibly regulated, often at the requests of home owners who treat their home equity as a savings account.
- bugglebeetle 3y ago
  The market is how it exists, not in some libertarian fantasy of unfettered exchange. If there’s money to be made bribing politicians to prevent housing from being built or turning every single family home into a rental, the market will coalesce toward those ends. But feel free to tell me how you’re going to dismantle homes owner and investment firm power over the US political class and create a world where home values are flat or go down. The political party who did this would be immediately cast out of office.
  - mattnewton 3y ago
    I don’t disagree with any of that, I merely disagree that the anything resembling a free market created these issues through increased financialization. That is a symptom of the underlying issues you mentioned.
    - deleted 3y ago
      [deleted]
    - bugglebeetle 3y ago
      The underlying issue is what markets are in reality.

ToucanLoucan 3y ago

I see these first two arguments very often in online discourse but I've yet to have the zoning thing really explained. Zoning isn't why we have millions upon millions of homes sitting empty, it's the second one you've listed: that homes are treated as financial assets first, and a requirement for a life well lived second. So fair enough, then let's stop that. Tax the absolute hell out of vacant homes at rates so high it's financially disastrous to hold them as assets. Then the price of homes will crash as corporate landlords/holders dump stock to avoid the bill.

whimsicalism 3y ago
Millions of homes are sitting empty because they are in places people don't want to live or don't have jobs that allow them to afford their lives. > Tax the absolute hell out of vacant homes at rates so high it's financially disastrous to hold them as assets Higher taxes on homes - regardless of the action being taxed, will not get you to where we need to be on housing unless they are paired with subsidies. We already are not building enough of them, we should not be imposing higher costs unless we are prepared to offset it elsewhere. Vacancy taxes might be part of the solution, but they also encourage sparser living to occupy more homes simultaneously.
- ToucanLoucan 3y ago
  > Millions of homes are sitting empty because they are in places people don't want to live or don't have jobs that allow them to afford their lives. I have a feeling it's much more the second than the first there. I know some people are picky but I have a hard time imagining a person who would willingly choose homelessness because they're just that committed to a given area. > Higher taxes on homes - regardless of the action being taxed, will not get you to where we need to be on housing unless they are paired with subsidies. I'm proposing higher taxes on houses, not homes. The difference being the former is held as stock to be sold later, and the latter is lived within by it's owner (or someone who has a business relationship with the owner.) > We already are not building enough of them, we should not be imposing higher costs unless we are prepared to offset it elsewhere. In what way in your mind is someone under my suggestion spending more money to build a home? > Vacancy taxes might be part of the solution That's literally what I've suggested. Taxing homes that are vacant.

nimbius 3y ago

The lack of zoning directly contributed to the damage or destruction of more than 150 homes during the 2020 houston chemical explosion. Zoning exists for very important life safety reasons the market cannot account for. https://en.wikipedia.org/wiki/2020_Houston_explosion https://en.wikipedia.org/wiki/2020_Houston_explosion

astrange 3y ago
That can be dealt with by environmental laws. Zoning exists to keep minorities out of whites-only neighborhoods. As in, when zoning was implemented this is the reason they said they were doing it and you can just go back and read the meeting minutes. As an example, the most famous restaurant in California is called "French Laundry" because "French laundries" were a way of signaling they were owned by white people, so white customers could go to them without accidentally supporting a Chinese immigrant business. But there's no environmental risk in allowing a corner store or a Chinese laundry in a residential neighborhood.
- karaterobot 3y ago
  Could you say more about your claim that zoning exists to keep minorities out of white-only neighborhoods? Specifically, do you mean to say that all zoning laws exist for this purpose, or only some of them? And do you mean that all zoning laws still exist for this purpose, or that that was their original intent? And I assume your claim is specifically meant to apply with respect to the U.S., and not to other countries who've had zoning laws in place for thousands of years. Hypothetically, would you say that the U.S. would have ignored the precedent for zoning laws that came from, e.g., England if they did not provide a convenient way to keep minorities out of whites-only neighborhoods? Would we be living in a zoning-free society if not for racism?
  - astrange 3y ago
    > Could you say more about your claim that zoning exists to keep minorities out of white-only neighborhoods? As I said, you can just go read the meeting minutes when they were introduced in the early 20th century and it's why they said they were doing it. But there's a book called The Color of Law about it. > And do you mean that all zoning laws still exist for this purpose, or that that was their original intent? They still exist because they haven't been removed yet and the SCOTUS precedent (Euclid v Ambler) that authorizes them hasn't been overruled. Racial covenants on individual properties were removed, but not that. > precedent for zoning laws that came from, e.g., England To be clear, England doesn't have zoning, it has /much worse ideas/ where you can't do anything without planning permission and the US is a big improvement over it. (Urban growth boundaries are okay though, but the US has national parks so we're cooler.) > Would we be living in a zoning-free society if not for racism? We would still have things that you probably think of as zoning but are not actually zoning. For instance, it's legal to have a corner store in a housing district in any given old quaint European country, and Japan has some light forms of zoning strictly controlled at the national level so individual cities don't get big ideas about becoming exclusive.

whimsicalism 3y ago

> stop financializing homes as a financial asset ... The market is actually pretty good at solving this issue. "financializing" in this case is a scare word describing the functioning of markets. not sure how you finance the apartments you're constructing without "financializing."

kelp 3y ago
I think the point of the original comment was that in the US we setup a system where the default way to build wealth is to buy a primary residence and wait for it to appreciate in value. The "financialzing" is just that we decided owning a home was the best way for the middle class to build wealth. The downside of this is now every homeowner wants their residence to go up in value. So they support policies that encourage that. We've done that for so long, few people can afford to buy a home anymore. The alternative would be to 1) not have the gov involved in incentivizing homeownership 2) change zoning and permitting policies to encourage much much more supply Yes, there would be financial instruments involved in all of this. But it might look more like car ownership, where the asset depreciates over time. (Like is often the case in Japan with housing). But housing would not be something people look at as a way to build wealth. However, you could still make money building housing, apartments, etc. Or even owning apartment buildings and charging people to live in them.
- whimsicalism 3y ago
  If anything, I would say it would mark a 're-financialization' of assets if we were to stop doing that, as given that the government owns pretty much all mortgages we're not talking about an actual financial market in mortgage debt as they normally function.
- astrange 3y ago
  > But it might look more like car ownership, where the asset depreciates over time. (Like is often the case in Japan with housing). This is becoming less true over time. Japanese houses depreciated because they had terrible quality / no insulation / they kept updating the earthquake codes, but they've grown larger and are fairly decent now. But more importantly, in either place it's not the house that appreciates but the land under it. So the best policy to prevent this is a land value tax, but this very much annoys people who would like to make unproductive use of land they own, ie residential landlords or retirees.

tick_tock_tick 3y ago

Zoning cause the financializion (which is still so small as to basically a non issue). Build build build and the issue is solved.

mcntsh 3y ago
Not saying that building won't alleviate problems but people must understand there's a lower limit to home prices, considering labor/material and investment costs...
- fragmede 3y ago
  That argues that how we pay for housing to be built is currently broken. One solution is for the government to subsidize the building of housing, which would let prices go below that lower limit.

strangattractor 3y ago

"Since the 1960s, Turkey has permitted periodic legal exemptions to developers and property owners, allowing them to bypass safety certification by paying a fee. At least 75,000 buildings in the affected earthquake zone were found to have received construction amnesties.May 17, 2023" https://www1.wsrb.com/blog/turkey-building-codes-and-the-importance-of-regulation#:~:text=Since%20the%201960s%2C%20Turkey%20has,to%20have%20received%20construction%20amnesties https://www1.wsrb.com/blog/turkey-building-codes-and-the-imp...

bitcurious 3y ago
Architectural engineering and zoning are orthogonal. As an example, zoning is about how tall a NYC skyscraper can be, engineering is about it not falling over. Your article is about the latter.
- strangattractor 3y ago
  Really - I didn't read it that way at all. Sure the engineering was shitty because they wanted it cheap. Developers were allowed to bypass normal Zoning and other Regulations (building codes) that required certain engineering and inspections by paying a fee. The end result was quickly built buildings that in a big quake crushed human occupants. I think most of the Zoning laws are about what purposes the building can serve. Like do you really want a meat packing plant built in your neighborhood or a fireworks factory? Now there maybe overly restrictive Zoning but having no Zoning is likely not a good idea.
  - runako 3y ago
    Not speaking for OP, but when people are commenting on affordability and talk about getting rid of zoning, they typically mean "making it easy to build residential dwellings in areas zoned residential." Unfortunately, this is not the case in much of the country now. For example, if you own a single-family home, you are not likely able to: - convert it to a duplex, triplex, or quadplex without changing the footprint of the building - build an ADU for another resident on your property, even if it will fit and otherwise be up to code - tear your house down and build a 5-story residential building These codes aren't about preventing meatpacking plants from being built in residential neighborhoods as much as they are about creating an artificial ceiling on the number of residents of a residential neighborhood.

adamredwoods 3y ago

I think building materials, labor, and land is increasing prices. So the market cannot meet demand and is partly causing the problem. I do think cities can work on accelerating permits and zoning, but cities are strapped for funding to assign people to help with this. Again, shortage of workers. Down the street from us, is a nice land that has been parceled, they cleared and leveled the land, laid sewer, underground electricity, all set to build houses. Only one problem, the demand for housing has crashed, due to the market. 6 houses all set to be built, completely stalled. >> stop financializing homes as a financial asset I don't understand. Isn't this dictated by the market?

runako 3y ago
> accelerating permits and zoning, but cities are strapped for funding to assign people to help Permits are one of the few municipal services where this argument doesn't make sense. Permits aren't free, after all. Permit revenue scales with the number of permit applications. A city overwhelmed with permit applications by definition has more money to hire staff to work the permitting process.
- PaulDavisThe1st 3y ago
  > A city overwhelmed with permit applications by definition has more money to hire staff to work the permitting process. Let's say you are paid "appropriately", and that your income comes from the fee payments associated with the tasks you complete. You're fully occupied, and the income from fees matches the expenses (including your salary). Things are in balance, so to speak. Now we increase the number of fee payments by 80%. You can no longer complete all the associated tasks in any reasonably time frame, but the fee payments will not pay for an additional full time member of staff.
  - runako 3y ago
    > the fee payments will not pay for an additional full time member of staff Fortunately, there is no requirement that municipalities only employ people full-time.
3y ago

ayakang31415 3y ago

I personally prefer with more aggressive zoning laws that prohibits high population density residency. What I would prefer to see instead is to designate affordable residential zones much more widely and implement very aggressive policy (which we do not have now unfortunately) to incentivize people to move into that new zones effectively (Of course, that's what public officials have been trying to do, but so far no one has achieved that to satisfactory standards). High population density city, I believe, actually exacerbates lots of problems that SF or NY cities currently have. I theorize that if you get rid of zoning and relax construction regulations, according to Pareto distribution, more people will flow into the highly desirable places easily and that will eventually lead to much higher housing prices and more problems that are associated with high density area. P.S: There is one case where Korean government relaxed zoning restrictions and construction regulations of Seoul to reduce the housing prices by providing more homes, but it failed as well (https://www.globalpropertyguide.com/asia/south-korea/price-history https://www.globalpropertyguide.com/asia/south-korea/price-h...). Moreover, now the city looks really really awful with all the high rise apartments (https://english.hani.co.kr/arti/english_edition/e_business/1000795.html https://english.hani.co.kr/arti/english_edition/e_business/1...)

JumpCrisscross 3y ago
> aggressive policy (which we do not have now unfortunately) to incentivize people to move into that new zones effectively This is urban sprawl. It’s what we’ve been doing for decades. It’s a social, environmental and economic disaster. Low density works for the very rich (can put through the inefficiency) and destitute (who accept the lower standard of living). For the educated or middle income, who won’t accept a lower standard of living at higher cost, it’s a road to increased emissions, shorter lives and less choice on everything.
- ayakang31415 3y ago
  Yeah unfortunately everything we tried to achieve that failed AFAIK. But I honestly believe that zoning should be implemented accordingly.

lotsoweiners 3y ago

> Get rid of zoning, stop financializing homes as a financial asset, and this problem will go away. While I don’t disagree with you, you’re saying this like it is the easy part. It’s probably political career suicide for anyone who proposed getting rid of zoning and there isn’t really any way to stop homes from being a financial asset (because what would then be the point of home ownership)? Big building projects can take a decade or more so you wouldn’t likely see enough new housing stock to make a real difference in home prices for a generation or two. Mortgage rate increases have done nothing more than stall and slightly decrease home prices but now you have a higher mortgage payment. Currently, people who have a “starter home” or townhouse etc have no incentive to move up in house size which because of higher rates. This was previously very important for younger or less well off people to be able to afford something to own. I think a new mechanism needs to be developed that could incentivize people to sell their homes.

JumpCrisscross 3y ago
> Big building projects can take a decade or more so you wouldn’t likely see enough new housing stock to make a real difference in home prices for a generation or two This is a problem of permitting. Let developers build and you’ll see housing within two years.
- lotsoweiners 3y ago
  You might see some amount of housing but you’re missing materials, labor, land availability, risk aversion, and probably a few other things.
PaulDavisThe1st 3y ago
> what would then be the point of home ownership having a place to live? Trading off potentially greater financial returns elsewhere for whatever one perceives as the benefits of actual ownership? It's not as if actual home ownership has made the USA so much better than the countries around the world where more people choose to rent.
- 3y ago