5 ms·

If the mandate is to built 5 moderately sized appartements instead of 3 large units they increase supply.

by dtech 3y ago

xnx 3y ago
That seems mathematically true, but doesn't tell the whole story. Imagine a common scenario in my city where the prospective buyer/renter of one of those new apartments is considering tearing down and older multi-unit structure to build a single-family home. In that situation, the availability of an larger unit could result in more total housing units. Because they have financial incentive, developers are often the ones in the position to best understand what the market wants.
- sandworm101 3y ago
  >> developers are often the ones in the position to best understand what the market wants. Correct. Developers build to what the market wants. But that doesn't mean they build to what people want. If given total freedom, developers often chase the upscale market, rich people wanting high-priced units. That is where profit is to be made. That is what the market wants. But that is not necessarily what a city actually needs.
  - hedora 3y ago
    Ignoring what the market wants doesn't work. If you maximize the return on investment of building more housing, then more people will build houses. If you make housing construction unprofitable, then fewer people will build houses. Also, people act like a glut of luxury housing would be a problem. It absolutely wouldn't. It would displace and therefore depress prices for midrange units. If the developers end up losing money selling their new luxury housing at a loss, then they've effectively just subsidized the US housing supply. That's much less expensive for taxpayers than having the government subsidize + force people to build housing that sells for less than construction costs.
    - sandworm101 3y ago
      Well, history has not shown that. There are countless situations where large houses have been surrounded by legions of the working poor unable to afford living spaces. Or where vacation homes sit empty, owned by people living far away, while cities struggle to find local accommodation for working people.
      - hedora 3y ago
        Neither of those issues have anything to do with housing supply, and they're either be unaffected or exacerbated by affordable housing mandates. The one large house + not enough houses problem is due to income inequality. Making houses scarce increases the price of houses for everyone, so it exacerbates income inequality (it is hard to increase your income and educate your kids while living in a tent). Worse, most affordable housing projects that are currently being proposed deed-restrict the housing (otherwise, unless the initial purchaser is an idiot, they'd immediately sell at a large profit). That prevents poor people from profiting off of the appreciation of property in their neighborhood that and therefore increases long-term income inequality. You also get situations where the low income housing owner can't afford to use local amenities, or maintain their house (which they bought for far less than the cost of initial construction). The second issue (hoarding of vacant houses) can be solved with a vacancy tax. History supports both those arguments. Can you name an example of a city where supply has exceeded demand (measured in months of housing inventory on the market) for an extended period of time (multiple years, so longer than the 2008 crisis), and that also has a housing affordability and homeless crisis? Similarly, can you cite an example of a market where housing has been freely built and sold at a profit over the long term, and that also has a housing supply problem?
epistasis 3y ago
Except such mandates never exist, the only mandates on unit sizes are minimums, not maximums. Though I do propose such changes as part of my "urban planning is 100% wrong, simply replace the direction of every single cap and you will get a better result plan", this has not caught on with anybody but me. Also, rich people still get around maximums by joining together adjacent units. For example, SF board of supervisors (think city council) member Aaron Peskin did this with two units so that he could have a bigger more luxurious living space, even though nobody else is allowed to bend the permitting rules that way. (SF has permitting rules that disallow making two units into one, but it does not have any limits on maximum unit size, as far as I can tell.)

If the mandate is to built 5 moderately sized appartements instead of 3 large units they increase supply.

by dtech 3y ago

If the mandate is to built 5 moderately sized appartements instead of 3 large units they increase supply.

xnx 3y ago

That seems mathematically true, but doesn't tell the whole story. Imagine a common scenario in my city where the prospective buyer/renter of one of those new apartments is considering tearing down and older multi-unit structure to build a single-family home. In that situation, the availability of an larger unit could result in more total housing units. Because they have financial incentive, developers are often the ones in the position to best understand what the market wants.

sandworm101 3y ago
>> developers are often the ones in the position to best understand what the market wants. Correct. Developers build to what the market wants. But that doesn't mean they build to what people want. If given total freedom, developers often chase the upscale market, rich people wanting high-priced units. That is where profit is to be made. That is what the market wants. But that is not necessarily what a city actually needs.
- hedora 3y ago
  Ignoring what the market wants doesn't work. If you maximize the return on investment of building more housing, then more people will build houses. If you make housing construction unprofitable, then fewer people will build houses. Also, people act like a glut of luxury housing would be a problem. It absolutely wouldn't. It would displace and therefore depress prices for midrange units. If the developers end up losing money selling their new luxury housing at a loss, then they've effectively just subsidized the US housing supply. That's much less expensive for taxpayers than having the government subsidize + force people to build housing that sells for less than construction costs.
  - sandworm101 3y ago
    Well, history has not shown that. There are countless situations where large houses have been surrounded by legions of the working poor unable to afford living spaces. Or where vacation homes sit empty, owned by people living far away, while cities struggle to find local accommodation for working people.
    - hedora 3y ago
      Neither of those issues have anything to do with housing supply, and they're either be unaffected or exacerbated by affordable housing mandates. The one large house + not enough houses problem is due to income inequality. Making houses scarce increases the price of houses for everyone, so it exacerbates income inequality (it is hard to increase your income and educate your kids while living in a tent). Worse, most affordable housing projects that are currently being proposed deed-restrict the housing (otherwise, unless the initial purchaser is an idiot, they'd immediately sell at a large profit). That prevents poor people from profiting off of the appreciation of property in their neighborhood that and therefore increases long-term income inequality. You also get situations where the low income housing owner can't afford to use local amenities, or maintain their house (which they bought for far less than the cost of initial construction). The second issue (hoarding of vacant houses) can be solved with a vacancy tax. History supports both those arguments. Can you name an example of a city where supply has exceeded demand (measured in months of housing inventory on the market) for an extended period of time (multiple years, so longer than the 2008 crisis), and that also has a housing affordability and homeless crisis? Similarly, can you cite an example of a market where housing has been freely built and sold at a profit over the long term, and that also has a housing supply problem?

epistasis 3y ago

Except such mandates never exist, the only mandates on unit sizes are minimums, not maximums. Though I do propose such changes as part of my "urban planning is 100% wrong, simply replace the direction of every single cap and you will get a better result plan", this has not caught on with anybody but me. Also, rich people still get around maximums by joining together adjacent units. For example, SF board of supervisors (think city council) member Aaron Peskin did this with two units so that he could have a bigger more luxurious living space, even though nobody else is allowed to bend the permitting rules that way. (SF has permitting rules that disallow making two units into one, but it does not have any limits on maximum unit size, as far as I can tell.)