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What government policy would allow for a 2k apartment building and not a $500 apartment building? I just don't buy this argument. The reason there's not a $50

What government policy would allow for a 2k apartment building and not a $500 apartment building? I just don't buy this argument. The reason there's not a $500 apartments being built is because by expanding the residence out just a tiny bit you can charge $2000 for the same space that 2 $500 apartments would occupy. I'm seeing this play out where I live that has practically no zoning laws or regulations (LOTS of building in unincorporated land). There's almost no $500 housing going in but a lot of new luxery apartments. Boise ID, for reference.

belligeront 3y ago
Allowing SROs, which have been banned in most cities.
tinco 3y ago
Not the US, but here real estate developers are complaining that modern stringent building code requirements (i.e. gas free, highly insulated) combined with high labor costs make it so that it is infeasible to build lower income housing. I think the bigger problem is that land value is insanely high in The Netherlands right now, but there's probably a truth in the middle as well. Land costs might be lower in the US, but maybe not closer to metropolitan centers?
- theGnuMe 3y ago
  That’s all smoke and mirrors from the builders. Most high end luxury features are cheap to install but they can charge a lot for them. Lot size and location will matter but now they put houses right next to each other. Townhomes with shared walls are even cheaper! Builders will also complain about inspections though since time is money… but if you don’t have them they will take shortcuts.
NathanKP 3y ago
I have an external garage building that I'd love to turn into a small ADU, but it's not allowed in my area. Additionally, if you look at historical cheap rentals of the past, you see things like tenement buildings, which were arguably horrible, but provided a cheap alternate to homelessness. You can also see examples of what low rent places look like today in Asian countries, such as Hong Kong tiny apartments. Many of those types of residences are not allowed by local government policies. An actual $500 a month rental is going to be really tiny, might have a shared bathroom and kitchen with other units. And these are all things that are often disallowed by government policies.
- cogman10 3y ago
  In 2010, I had a $600/month rental with a kitchen, living room, bedroom, bathroom, in apartment washing machine/dryer and a fairly large walk-in closet. With 13 years of inflation, that'd be $850/month. That apartment now goes for over $1200/month (Almost certainly hasn't been renovated). [1] The issue is oligopolies. Few large businesses that own the majority of available rentals and thus can set prices to whatever they like to rake in the profits. And the way you can tell it's not government policy driving up prices is this trend has been seen across states. There's no federal zoning laws, so why would everywhere from California to Idaho see the same drastic spikes in home prices? Why are existing units that have existed since at least 2010 (and I believe back to 2005) commanding $400 premiums over what inflation would dictate? Do you think back in 2010 they were losing money renting to me? [1] https://www.camdenliving.com/apartments/irving-tx/camden-valley-park/available-apartments/cypress-floor-plan?unit=1019&floor=5 https://www.camdenliving.com/apartments/irving-tx/camden-val...
  - carom 3y ago
    It is government policy. Specifically, it is restrictive zoning. Landlords do not get to set prices to whatever they want, they set prices to what the market will pay. If rent has gone up faster than inflation it just means that demand has increased or supply has decreased in that time. You can build apartments for ~$250 per sqft. The issue is that local governments make it really hard to build more apartments. If you disagree I implore you to go get a construction loan, build some housing, and rent it out.
    - Draiken 3y ago
      Isn't that what lobbying is all about? You effectively have companies paying politicians to keep these zoning laws that keep the rents as high as possible. Profit above all else. Arguments that boil down to "government policy" can basically be translated to "big companies policies". Whether it's through illegal or legal bribing (lobbying), it's what we see after decades of influence.
      - 3y ago
jethro_tell 3y ago
If zoning regulations mean you're only going to be able to service 1/4 of the annual new construction demand, then the smart money is on serving the high end of the market. If things get zoned in a way that you can serve the whole market and not just the top end, you can bet that people will figure out how to build those units too. The market has been artificially constrained so that developers are making the choice between the segment of the market they want to serve, not serving the whole market. If they had the access to serve the whole market, we'd see someone who can get creative and do it cheaper, or more efficiently to compete on price instead of luxury. This is generally caused by strict land use and single family zoning. In a situation where you can build a duplex/triplex/4plex on every single family lot, you can run an excess of housing in the areas that people actually want or need to live in which allows people to compete on other market factors like price.
- TeMPOraL 3y ago
  Most of the markets in goods and services seem to evolve towards hollowing out the middle: companies offer either bottom-tier garbage or luxury price (but not necessarily luxury quality) options for those not price-sensitive. What makes people think housing is different? That with unencumbered ability to build, we'll end up with decent-quality, livable, mid-tier apartments? Other markers show we should expect a mix of luxury apartment with barely-livable tin can sized slums complexes. And all of them for rent, not to buy.
  - ETH_start 3y ago
    Not true. Automobiles have become vastly better at all price points over the last 50 years. Safer, more fuel efficient and longer-lasting. The same applies to smartphones, PCs, televisions, etc. And laser eye surgery. And passenger air travel since the Carter administration de-centralized (de-regulated) it in the late 1970s.
    - TeMPOraL 3y ago
      I won't comment much on automobiles - I don't buy new, and don't know anyone who buys new. It's all used market, and we're dreading the day the newest, touchscreen-controlled cars will be all that's available. But it appears to me that this market is highly regulated - safety, fuel efficiency and longevity still hit the bare minimum, just the legal minima have been tightened over the years. Laser eye surgery - I wasn't even aware this is a category and there is much to differentiate between service providers on the surgery specifically. Plus, it's another tightly-regulated space, countering natural market tendencies. Passenger air travel - you must be traveling first-class only to not notice that everything below is bottom-tier and getting noticeably worse every year. Sure, it's more affordable - I don't dispute that - but it's a question of how bad can quality go before it trumps price. Smartphones, televisions - all examples of what I'm talking about. A huge amount of bottom-tier products, a few high-end flagship products. There's a degree of market segmentation so there's still some middle-tier options, but my impression is, they're rapidly dragged to the bottom. As specific examples of what I have in mind, most of which I observed personally: everything not regulated about private healthcare; bikes and bike parts; food across the board; manual tools and power tools; clothes; toys; just about every commodity electronics. It's all low-quality noname brands, low-quality fake pseudo-brands, brands tricking people with old reputation, then nothing at mid-tier, then pricey brands that didn't start "capitalizing on their reputation" just yet. Overall, what I'm saying is that the natural tendency of the market is to optimize offerings to be the cheapest and shittiest the market can bear - and I think this is a problem; there's a mid-point we can't seem to be able to keep in established markets. And in arguments for deregulating housing, I don't see anything addressing this tendency.
jnwatson 3y ago
Setbacks, parking requirements, and permits are some of the imposed fixed costs that a developer would have to pay to make a 0 square foot apartment. Then you have natural fixed costs of design, engineering, acquisition. Still, it mostly comes down to a developer's understanding of the market. We're so housing starved that there's demand at all size levels. Why would they choose the less profitable path?
Kalium 3y ago
In many places, a combination of requirements become a de facto floor on apartment size. Examples include requirements for natural light, parking minimums, and shared common spaces. Some cities, like Seattle, go so far as to set an explicit minimum apartment size. It's obviously going to be challenging to build a brand new $500/mo apartment if it cannot be less than 500 sqft. All that said, looking few brand new cheap apartments is generally the wrong approach. There's a whole filtering process of older apartments that's supposed to assure that. Similarly, nobody expects brand new cars to be price-competitive with fifteen year old Honda Civics.
rmk 3y ago
Didn't Boise, ID have an influx of better-off people from the coasts during the Pandemic? If plenty of luxury housing is being built it was likely in response to that. Ultimately those houses will get rented or otherwise occupied, which should free up housing at the lower end. Compare this to places in the Bay Area, where it's not practical to spread out any farther (no good public transport because of a dozen or more transit agencies that are always fighting and Caltrain, which is a hugely dysfunctional organization that can't even run trains at a piddling frequency). We have houses being blocked using CEQA and other nonsense, all because people who work in unproductive industries or not at all (non-tech, retirees) have decided to get more than their share by denying permits for new construction. What's better? Some housing being built or none at all?
- cogman10 3y ago
  > Didn't Boise, ID have an influx of better-off people from the coasts during the Pandemic? Yup > What's better? Some housing being built or none at all? Loads of housing is getting built but what we've not seen is subsequent drops in housing prices (the opposite in fact). This speaks to problems beyond a housing shortage. Who knows, maybe in 10 years that will reverse and the market will correct back to pre-pandemic levels. Doesn't look like it, however.
  - hparadiz 3y ago
    USA is extremely behind on housing raw numbers by about 20 million homes based on population growth. We stopped building in 2008. Almost no homes were built that year. It took 10 years to ramp back up. Just in the past 2-3 years started to build as many homes as we need but the rate will take 15-20 years to catch up assuming it stays at the current rate. Basically if you're 40 now you will be 60 by the time it's okay again and that's if we even keep the current build rate for that long.
  - dnissley 3y ago
    > Loads of housing is getting built Googling around it looks like the population of Idaho has gone from around 1 million in 1990 to around 2.2 million today. Total housing starts from 1988 to today are around 400k (https://fred.stlouisfed.org/series/IDBPPRIVSA https://fred.stlouisfed.org/series/IDBPPRIVSA). So assuming that Idaho had "enough" housing in 1988, they've only built 1 unit of housing for every 3 new residents since 1990. This doesn't seem like loads of housing to me.
QuarterReptile 3y ago
Because I didn't see it in any of the other comments: ' The realistic path is that apartments become $500 apartments late in life cycle. It's extremely rare to build low-end housing, but not so unreasonable for units to filter down-market over time when new construction provides adequate supply at the upper end of the market. The logic of updating vs. repairing changes when new housing is a regular occurrence.
- Schiendelman 3y ago
  Interestingly - if you allow growth to keep up with demand, there are units today that are being held off market (as investments) that suddenly aren't good investments anymore, so they go back on market.
zeroonetwothree 3y ago
We know it’s from zoning laws because a few places don’t have this problem > “We have kept our rent increases to about 1% whereas the rest of the country was looking at 31%,” Mayor Jacob Frey said on Monday, citing data from The Pew Charitable Trusts. > “That’s a drastic difference. And in part, it’s due to the policies that we’ve passed.” > It’s mostly simple supply and demand, according to Mayor Frey. An explosion of housing, made possible by eliminating single-family zoning requirements, has kept prices down. https://kstp.com/kstp-news/top-news/rising-rent-costs-slow-dramatically-in-minneapolis-still-average-renter-is-cost-burdened/ https://kstp.com/kstp-news/top-news/rising-rent-costs-slow-d...
- mywittyname 3y ago
  This kind of zoning also builds desireable neighborhoods. The neighborhood I live in has six-ten unit apartments on the same streets as six-to-ten bedroom mansions. In some places, you can see where the owner of the mansion had an apartment building constructed in their front yard. I could never imagine this happening today. Yet everyone in the region knows of this neighborhood as being prestigious, with the best schools in the state, huge sidewalks that are packed with people, and a nice little downtown with a coffee shop, dairy whip, a public library branch, and some restaurants. People have no problem recognizing what a great neighborhood looks like. But for some reason, local politicians can't seem to enact zoning laws that allow them to be built in modern times.
  - nitwit005 3y ago
    > But for some reason, local politicians can't seem to enact zoning laws that allow them to be built in modern times. People show up at the city council meeting and scream at them that the construction will destroy the neighborhood.
    - JPws_Prntr_Fngr 3y ago
      [flagged]
  - escapedmoose 3y ago
mattnewton 3y ago
> What government policy would allow for a 2k apartment building and not a $500 apartment building? Basically all of them? All you need is minimum parking + a height limit. Since the ROI of the lot is a function of units *average price, and a height limit + parkinng requirements caps the # of units per lot, the average price has to be higher for it to make sense to an investor. Also it’s worth noting that supply is just incredibly constrained vs demand in nearly every major American city. Anything to help the supply side decreases housing costs across the board, even if it’s luxury housing.
- phatfish 3y ago
  I read today that there are 7 billion square feet of unsold homes in China. Apparently no government can get housing right. The west has too little due to bad regulation & NIMBYs. China built too much (due to certain regulations being too lax it seems, and corruption probably). https://www.reuters.com/world/china/even-chinas-14-bln-population-cant-fill-all-its-vacant-homes-former-official-2023-09-23/ https://www.reuters.com/world/china/even-chinas-14-bln-popul...
  - mattnewton 3y ago
    I think both are failures of planning over markets. China propped up giant companies that built whole cities speculatively, but in the US it’s a that they have comparatively strong municipalities that prevent new building in their neighborhoods. I think the solution there is to weaken the strength of these zoning laws. We have been kinda running an experiment across states and cities and can see the housing crisis is worse in places with stricter zoning laws. https://crsreports.congress.gov/product/pdf/IN/IN12195 https://crsreports.congress.gov/product/pdf/IN/IN12195
monknomo 3y ago
something I wonder about is that I'm pretty sure new builds target the more premium market. And I'm pretty sure that has mostly been true throughout history. But I wonder/think that in the past infill targeting $500 apartments would be an older house that gets subdivided. Like all those brownstones in NYC that were turned into SRO, or the mansions in Pittsburgh that were chopped into four-plexes, etc.
- oceanplexian 3y ago
  Because there is no such thing as a "new construction low end market". The finishings of a house or apartment aren't the expensive part of construction. Look at the inputs to construction, there's no difference between low end and high end. Everything has to meet building code up to an extremely high standard due to modern building regulations. New laws mandate things like low-e glass, tougher insulation codes, solar panels (California requires them on new builds now), seismic, radon mitigation, AFCI, firewall requirements, etc. The average 50 to 100-year-old apartment has none of those things, and it would be illegal to build such a thing today.
dukeyukey 3y ago
> What government policy would allow for a 2k apartment building and not a $500 apartment building? At least in the UK, it's because there's pushback against perceived "luxury" flats being built rather than affordable places. That luxury flats are still 2-bedroom 600sqft starter homes doesn't really come into it, it's the class of people each is perceived to be for. So local governments block mid-and-high end housing in favour of fewer, worse, cheaper homes instead.
eadmund 3y ago
> What government policy would allow for a 2k apartment building and not a $500 apartment building? Bans on single room occupancy: https://en.wikipedia.org/wiki/Single_room_occupancy https://en.wikipedia.org/wiki/Single_room_occupancy Requirements for parking spots. Parking spaces are not free to construct or to maintain. Requirements for windows. And no, of course I don’t wish to live in a windowless single-room apartment without a kitchen, private bathroom or space for my car. But were I broke, I would rather live in that than pay money I don’t have for a nicer place. > The reason there's not a $500 apartments being built is because by expanding the residence out just a tiny bit you can charge $2000 for the same space that 2 $500 apartments would occupy. I understand that the typical pattern is that new construction is luxury, and over time those units wear down and become more and more affordable. Adding new $2,000 units to the market reduces the value of existing units.
ProcNetDev 3y ago
You can rent an apartment in Tokyo on a min wage salary. https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-... https://resources.realestate.co.jp/rent/tokyo-budget-apartments-what-you-can-rent-for-550-now/ https://resources.realestate.co.jp/rent/tokyo-budget-apartme... Whats their secret? Sane zoning laws created at the federal level that separate industrial use from residential, but don't segregate humans based on race or class.
- Auracle 3y ago
  Or, you know, a shrinking population. It turns out the “demand” part of supply and demand is equally important, as Canada is now realizing. If only people could point that out in the US without being accused of racism.

belligeront 3y ago

Allowing SROs, which have been banned in most cities.

tinco 3y ago

Not the US, but here real estate developers are complaining that modern stringent building code requirements (i.e. gas free, highly insulated) combined with high labor costs make it so that it is infeasible to build lower income housing. I think the bigger problem is that land value is insanely high in The Netherlands right now, but there's probably a truth in the middle as well. Land costs might be lower in the US, but maybe not closer to metropolitan centers?

theGnuMe 3y ago
That’s all smoke and mirrors from the builders. Most high end luxury features are cheap to install but they can charge a lot for them. Lot size and location will matter but now they put houses right next to each other. Townhomes with shared walls are even cheaper! Builders will also complain about inspections though since time is money… but if you don’t have them they will take shortcuts.

NathanKP 3y ago

I have an external garage building that I'd love to turn into a small ADU, but it's not allowed in my area. Additionally, if you look at historical cheap rentals of the past, you see things like tenement buildings, which were arguably horrible, but provided a cheap alternate to homelessness. You can also see examples of what low rent places look like today in Asian countries, such as Hong Kong tiny apartments. Many of those types of residences are not allowed by local government policies. An actual $500 a month rental is going to be really tiny, might have a shared bathroom and kitchen with other units. And these are all things that are often disallowed by government policies.

cogman10 3y ago
In 2010, I had a $600/month rental with a kitchen, living room, bedroom, bathroom, in apartment washing machine/dryer and a fairly large walk-in closet. With 13 years of inflation, that'd be $850/month. That apartment now goes for over $1200/month (Almost certainly hasn't been renovated). [1] The issue is oligopolies. Few large businesses that own the majority of available rentals and thus can set prices to whatever they like to rake in the profits. And the way you can tell it's not government policy driving up prices is this trend has been seen across states. There's no federal zoning laws, so why would everywhere from California to Idaho see the same drastic spikes in home prices? Why are existing units that have existed since at least 2010 (and I believe back to 2005) commanding $400 premiums over what inflation would dictate? Do you think back in 2010 they were losing money renting to me? [1] https://www.camdenliving.com/apartments/irving-tx/camden-valley-park/available-apartments/cypress-floor-plan?unit=1019&floor=5 https://www.camdenliving.com/apartments/irving-tx/camden-val...
- carom 3y ago
  It is government policy. Specifically, it is restrictive zoning. Landlords do not get to set prices to whatever they want, they set prices to what the market will pay. If rent has gone up faster than inflation it just means that demand has increased or supply has decreased in that time. You can build apartments for ~$250 per sqft. The issue is that local governments make it really hard to build more apartments. If you disagree I implore you to go get a construction loan, build some housing, and rent it out.
  - Draiken 3y ago
    Isn't that what lobbying is all about? You effectively have companies paying politicians to keep these zoning laws that keep the rents as high as possible. Profit above all else. Arguments that boil down to "government policy" can basically be translated to "big companies policies". Whether it's through illegal or legal bribing (lobbying), it's what we see after decades of influence.
    - 3y ago

jethro_tell 3y ago

If zoning regulations mean you're only going to be able to service 1/4 of the annual new construction demand, then the smart money is on serving the high end of the market. If things get zoned in a way that you can serve the whole market and not just the top end, you can bet that people will figure out how to build those units too. The market has been artificially constrained so that developers are making the choice between the segment of the market they want to serve, not serving the whole market. If they had the access to serve the whole market, we'd see someone who can get creative and do it cheaper, or more efficiently to compete on price instead of luxury. This is generally caused by strict land use and single family zoning. In a situation where you can build a duplex/triplex/4plex on every single family lot, you can run an excess of housing in the areas that people actually want or need to live in which allows people to compete on other market factors like price.

TeMPOraL 3y ago
Most of the markets in goods and services seem to evolve towards hollowing out the middle: companies offer either bottom-tier garbage or luxury price (but not necessarily luxury quality) options for those not price-sensitive. What makes people think housing is different? That with unencumbered ability to build, we'll end up with decent-quality, livable, mid-tier apartments? Other markers show we should expect a mix of luxury apartment with barely-livable tin can sized slums complexes. And all of them for rent, not to buy.
- ETH_start 3y ago
  Not true. Automobiles have become vastly better at all price points over the last 50 years. Safer, more fuel efficient and longer-lasting. The same applies to smartphones, PCs, televisions, etc. And laser eye surgery. And passenger air travel since the Carter administration de-centralized (de-regulated) it in the late 1970s.
  - TeMPOraL 3y ago
    I won't comment much on automobiles - I don't buy new, and don't know anyone who buys new. It's all used market, and we're dreading the day the newest, touchscreen-controlled cars will be all that's available. But it appears to me that this market is highly regulated - safety, fuel efficiency and longevity still hit the bare minimum, just the legal minima have been tightened over the years. Laser eye surgery - I wasn't even aware this is a category and there is much to differentiate between service providers on the surgery specifically. Plus, it's another tightly-regulated space, countering natural market tendencies. Passenger air travel - you must be traveling first-class only to not notice that everything below is bottom-tier and getting noticeably worse every year. Sure, it's more affordable - I don't dispute that - but it's a question of how bad can quality go before it trumps price. Smartphones, televisions - all examples of what I'm talking about. A huge amount of bottom-tier products, a few high-end flagship products. There's a degree of market segmentation so there's still some middle-tier options, but my impression is, they're rapidly dragged to the bottom. As specific examples of what I have in mind, most of which I observed personally: everything not regulated about private healthcare; bikes and bike parts; food across the board; manual tools and power tools; clothes; toys; just about every commodity electronics. It's all low-quality noname brands, low-quality fake pseudo-brands, brands tricking people with old reputation, then nothing at mid-tier, then pricey brands that didn't start "capitalizing on their reputation" just yet. Overall, what I'm saying is that the natural tendency of the market is to optimize offerings to be the cheapest and shittiest the market can bear - and I think this is a problem; there's a mid-point we can't seem to be able to keep in established markets. And in arguments for deregulating housing, I don't see anything addressing this tendency.

jnwatson 3y ago

Setbacks, parking requirements, and permits are some of the imposed fixed costs that a developer would have to pay to make a 0 square foot apartment. Then you have natural fixed costs of design, engineering, acquisition. Still, it mostly comes down to a developer's understanding of the market. We're so housing starved that there's demand at all size levels. Why would they choose the less profitable path?

Kalium 3y ago

In many places, a combination of requirements become a de facto floor on apartment size. Examples include requirements for natural light, parking minimums, and shared common spaces. Some cities, like Seattle, go so far as to set an explicit minimum apartment size. It's obviously going to be challenging to build a brand new $500/mo apartment if it cannot be less than 500 sqft. All that said, looking few brand new cheap apartments is generally the wrong approach. There's a whole filtering process of older apartments that's supposed to assure that. Similarly, nobody expects brand new cars to be price-competitive with fifteen year old Honda Civics.

rmk 3y ago

Didn't Boise, ID have an influx of better-off people from the coasts during the Pandemic? If plenty of luxury housing is being built it was likely in response to that. Ultimately those houses will get rented or otherwise occupied, which should free up housing at the lower end. Compare this to places in the Bay Area, where it's not practical to spread out any farther (no good public transport because of a dozen or more transit agencies that are always fighting and Caltrain, which is a hugely dysfunctional organization that can't even run trains at a piddling frequency). We have houses being blocked using CEQA and other nonsense, all because people who work in unproductive industries or not at all (non-tech, retirees) have decided to get more than their share by denying permits for new construction. What's better? Some housing being built or none at all?

cogman10 3y ago
> Didn't Boise, ID have an influx of better-off people from the coasts during the Pandemic? Yup > What's better? Some housing being built or none at all? Loads of housing is getting built but what we've not seen is subsequent drops in housing prices (the opposite in fact). This speaks to problems beyond a housing shortage. Who knows, maybe in 10 years that will reverse and the market will correct back to pre-pandemic levels. Doesn't look like it, however.
- hparadiz 3y ago
  USA is extremely behind on housing raw numbers by about 20 million homes based on population growth. We stopped building in 2008. Almost no homes were built that year. It took 10 years to ramp back up. Just in the past 2-3 years started to build as many homes as we need but the rate will take 15-20 years to catch up assuming it stays at the current rate. Basically if you're 40 now you will be 60 by the time it's okay again and that's if we even keep the current build rate for that long.
- dnissley 3y ago
  > Loads of housing is getting built Googling around it looks like the population of Idaho has gone from around 1 million in 1990 to around 2.2 million today. Total housing starts from 1988 to today are around 400k (https://fred.stlouisfed.org/series/IDBPPRIVSA https://fred.stlouisfed.org/series/IDBPPRIVSA). So assuming that Idaho had "enough" housing in 1988, they've only built 1 unit of housing for every 3 new residents since 1990. This doesn't seem like loads of housing to me.

QuarterReptile 3y ago

Because I didn't see it in any of the other comments: ' The realistic path is that apartments become $500 apartments late in life cycle. It's extremely rare to build low-end housing, but not so unreasonable for units to filter down-market over time when new construction provides adequate supply at the upper end of the market. The logic of updating vs. repairing changes when new housing is a regular occurrence.

Schiendelman 3y ago
Interestingly - if you allow growth to keep up with demand, there are units today that are being held off market (as investments) that suddenly aren't good investments anymore, so they go back on market.

zeroonetwothree 3y ago

We know it’s from zoning laws because a few places don’t have this problem > “We have kept our rent increases to about 1% whereas the rest of the country was looking at 31%,” Mayor Jacob Frey said on Monday, citing data from The Pew Charitable Trusts. > “That’s a drastic difference. And in part, it’s due to the policies that we’ve passed.” > It’s mostly simple supply and demand, according to Mayor Frey. An explosion of housing, made possible by eliminating single-family zoning requirements, has kept prices down. https://kstp.com/kstp-news/top-news/rising-rent-costs-slow-dramatically-in-minneapolis-still-average-renter-is-cost-burdened/ https://kstp.com/kstp-news/top-news/rising-rent-costs-slow-d...

mywittyname 3y ago
This kind of zoning also builds desireable neighborhoods. The neighborhood I live in has six-ten unit apartments on the same streets as six-to-ten bedroom mansions. In some places, you can see where the owner of the mansion had an apartment building constructed in their front yard. I could never imagine this happening today. Yet everyone in the region knows of this neighborhood as being prestigious, with the best schools in the state, huge sidewalks that are packed with people, and a nice little downtown with a coffee shop, dairy whip, a public library branch, and some restaurants. People have no problem recognizing what a great neighborhood looks like. But for some reason, local politicians can't seem to enact zoning laws that allow them to be built in modern times.
- nitwit005 3y ago
  > But for some reason, local politicians can't seem to enact zoning laws that allow them to be built in modern times. People show up at the city council meeting and scream at them that the construction will destroy the neighborhood.
  - JPws_Prntr_Fngr 3y ago
    [flagged]
- escapedmoose 3y ago

mattnewton 3y ago

> What government policy would allow for a 2k apartment building and not a $500 apartment building? Basically all of them? All you need is minimum parking + a height limit. Since the ROI of the lot is a function of units *average price, and a height limit + parkinng requirements caps the # of units per lot, the average price has to be higher for it to make sense to an investor. Also it’s worth noting that supply is just incredibly constrained vs demand in nearly every major American city. Anything to help the supply side decreases housing costs across the board, even if it’s luxury housing.

phatfish 3y ago
I read today that there are 7 billion square feet of unsold homes in China. Apparently no government can get housing right. The west has too little due to bad regulation & NIMBYs. China built too much (due to certain regulations being too lax it seems, and corruption probably). https://www.reuters.com/world/china/even-chinas-14-bln-population-cant-fill-all-its-vacant-homes-former-official-2023-09-23/ https://www.reuters.com/world/china/even-chinas-14-bln-popul...
- mattnewton 3y ago
  I think both are failures of planning over markets. China propped up giant companies that built whole cities speculatively, but in the US it’s a that they have comparatively strong municipalities that prevent new building in their neighborhoods. I think the solution there is to weaken the strength of these zoning laws. We have been kinda running an experiment across states and cities and can see the housing crisis is worse in places with stricter zoning laws. https://crsreports.congress.gov/product/pdf/IN/IN12195 https://crsreports.congress.gov/product/pdf/IN/IN12195

monknomo 3y ago

something I wonder about is that I'm pretty sure new builds target the more premium market. And I'm pretty sure that has mostly been true throughout history. But I wonder/think that in the past infill targeting $500 apartments would be an older house that gets subdivided. Like all those brownstones in NYC that were turned into SRO, or the mansions in Pittsburgh that were chopped into four-plexes, etc.

oceanplexian 3y ago
Because there is no such thing as a "new construction low end market". The finishings of a house or apartment aren't the expensive part of construction. Look at the inputs to construction, there's no difference between low end and high end. Everything has to meet building code up to an extremely high standard due to modern building regulations. New laws mandate things like low-e glass, tougher insulation codes, solar panels (California requires them on new builds now), seismic, radon mitigation, AFCI, firewall requirements, etc. The average 50 to 100-year-old apartment has none of those things, and it would be illegal to build such a thing today.

dukeyukey 3y ago

> What government policy would allow for a 2k apartment building and not a $500 apartment building? At least in the UK, it's because there's pushback against perceived "luxury" flats being built rather than affordable places. That luxury flats are still 2-bedroom 600sqft starter homes doesn't really come into it, it's the class of people each is perceived to be for. So local governments block mid-and-high end housing in favour of fewer, worse, cheaper homes instead.

eadmund 3y ago

> What government policy would allow for a 2k apartment building and not a $500 apartment building? Bans on single room occupancy: https://en.wikipedia.org/wiki/Single_room_occupancy https://en.wikipedia.org/wiki/Single_room_occupancy Requirements for parking spots. Parking spaces are not free to construct or to maintain. Requirements for windows. And no, of course I don’t wish to live in a windowless single-room apartment without a kitchen, private bathroom or space for my car. But were I broke, I would rather live in that than pay money I don’t have for a nicer place. > The reason there's not a $500 apartments being built is because by expanding the residence out just a tiny bit you can charge $2000 for the same space that 2 $500 apartments would occupy. I understand that the typical pattern is that new construction is luxury, and over time those units wear down and become more and more affordable. Adding new $2,000 units to the market reduces the value of existing units.

ProcNetDev 3y ago

You can rent an apartment in Tokyo on a min wage salary. https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-... https://resources.realestate.co.jp/rent/tokyo-budget-apartments-what-you-can-rent-for-550-now/ https://resources.realestate.co.jp/rent/tokyo-budget-apartme... Whats their secret? Sane zoning laws created at the federal level that separate industrial use from residential, but don't segregate humans based on race or class.

Auracle 3y ago
Or, you know, a shrinking population. It turns out the “demand” part of supply and demand is equally important, as Canada is now realizing. If only people could point that out in the US without being accused of racism.