8 ms·

The issue is 100% that we make it very hard to build in the areas that have highest demand. It is not short-term rentals, it is not individuals owning too many

• JohnFen 3y ago
  > It is that we suppress the construction of housing through to byzantine permitting, incredibly harsh zoning, vetocracy, and overburdening regulation. This isn't the cause everywhere. There are absolutely places that don't have such overbearing regulations but still have a serious housing shortage.
  • davidw 3y ago
    Almost nowhere in the US has a truly liberal zoning system. Houston kinda sorta. Where are you referring to?
    • JohnFen 3y ago
      I suspect that we disagree on what constitutes "overbearing" regulations. Fair enough.
      • davidw 3y ago
        Zoning should keep 1) noises 2) smells and 3) dangerous things away from where people live and schools and such. Not keep a 6-plex out of a neighborhood with luxury single family units. Or stop people from building on 1500 square foot lots.
      • antisthenes 3y ago
        I couldn't even build a simple 10x10 deck 12 inches from the ground without having to perform $8,000 worth of work to pour concrete piers and do several other destructive things to existing structures that make no sense. This was for a deck that was going to be used by 1-2 people at a time, that could be built for $1000 worth of materials. Same thing doubly applies for housing, except the numbers are 10-50x higher, because Karen in Bumfuck Permitting Services can't fathom that it's not necessary to build a single family dwelling up to Fort Knox standards, especially when it's made out of sticks and drywall anyway. It's almost like the code is designed to be especially convoluted to be a make-work program for local contractors.
        • deleted 3y ago
          [deleted]
        • bombcar 3y ago
          From what I understand Wyoming outside the cities may be the closest to what you want, there’s basically rules about setback and not much else.
          • antisthenes 3y ago
            Yes, I'm aware that moving out of city limits tends to relax the building code & zoning a little bit. Planning to do that eventually. But it was just an example of a thing that can contribute to rising construction/housing costs. I don't think it's particularly helpful to tell a young person "whoopsie, we could have built housing for you, but thanks to the last 10 recent code updates, the house is now 2x as expensive and you can't afford it".
    • barryrandall 3y ago
      Houston is on multiple "places with the worst housing shortages" lists, something I wouldn't expect if zoning was the only/majority cause of the problem.
      • HDThoreaun 3y ago
        Houston is gaining hundreds of thousands of people. They need to build even more to keep up.
        • barryrandall 3y ago
          How is that possible? Houston has some of the most lax zoning laws in the US. If housing shortages are caused by zoning laws, why does Houston still have a problem? Is it possible that housing shortages are caused by more than just zoning?
          • HDThoreaun 3y ago
            One city cant overcome the shortage the rest of the country creates. People are moving to houston because it is among the cheapest big cities because theyre actually building new housing. Houston is working on catching up with demand but it takes time. We have underbuilt for decades, this isnt something that can be solved instantly.
  • kelnos 3y ago
    Any idea why, though? If these places have fairly easy, quick processes to get new construction greenlit, why is no one building there?
    • bombcar 3y ago
      At least where I am it’s relatively cheap and easy (usable land goes for $10k, permitting, etc is $20k) and they’re building and selling. About three or four builders, but not many more.
• TheAlchemist 3y ago
  Almost agree with you - but I would put that at 90%. The short-term rentals, and rentals in general are definitely part of the problem. I strongly believe, that we should help people buy their first home and increasingly tax the second, third etc. In several developed countries, it's very lucrative for rich / upper middle class people to use their credit capability to just buy another house and rent it out - with tax incentives and deduction, it basically pays for itself over time. While the young renter who is living in it, do not have this possibility.
  • alephnerd 3y ago
    > use their credit capability to just buy another house Hence why most Western countries have jacked up interest rates, and will have to keep them quite high for the next several years.
    • scruple 3y ago
      But in a very real sense that's just pulling the ladder up and further securing the position of those who got there first. Something else / additionally has to happen here.
      • alephnerd 3y ago
        How do you force house prices to drop when 1. THERE IS A LABOR SHORTAGE IN CONSTRUCTION 2. ZONING WILL NEVER BE REFORMED AT THE LOCAL LEVEL 3. EVERYONE ASSUMES THE PRICE OF HOUSING WILL CONTINUE TO GROW MORE THAN INFLATION All 3 highlight a broken market due to inflated costs. The only solution is to slow the market down and play chicken with owners. > pulling the ladder up and further securing the position of those who got there first Such is life. You can't drastically change a market overnight. You'll get voted out of office. Welcome to the late 70s. This is how it was then too. Be happy we don't have a Volcker
        • medvezhenok 3y ago
          Nationwide rent control. We've done it once before (World War 2 - in that case it was even retroactive, so you couldn't hike rents in anticipation), and it increased homeownership rate by the highest rate in the 20th century (something like 5% jump in a few years) by making leasing less profitable than selling. Would also have to be combined with more building, but it does work. If you make investing in real estate less appealing (via rent control), people will sell - unless they're just hiding money (i.e. overseas investors). You would probably have to go on a crusade in order to promote it, and it would require a massive anti-landowner propaganda push (of the sort that existed during WWII), but it's theoretically doable.
• readthenotes1 3y ago
  You remind me of two things I have read here at hacker News in the last few months: 1. We have made substantial gains in productivity over the last few decades in many areas, but not in construction. The leading candidate for the cause is that we have increased regulations to keep things stable. 2. A private company in San Francisco was going to buy a downtown office building and converted into housing, hoping that even though that is incredibly expensive there would be enough demand. But then they realized that San Francisco had mandated a large percentage of new multifamily housing units must support low rent tenants and it made the whole project completely infeasible.
  • davidw 3y ago
    There are regulations, and regulations. Those regarding, say, fire safety are pretty important and worth it even at the cost of productivity. Zoning, on the other hand, that keeps corner stores, apartments and condos out of some neighborhoods... that is a huge problem and doesn't really exist for safety reasons.
    • wardedVibe 3y ago
      Even fire safety is frequently done in an overly onerous and ineffective way, e.g. the double staircase requirement that doesn't apply in many other places because other, more space efficient solutions were found. https://www.youtube.com/watch?v=iRdwXQb7CfM&t=648s https://www.youtube.com/watch?v=iRdwXQb7CfM&t=648s
      • readthenotes1 3y ago
        I have a friend who is putting in a temporary tent structure for a party on top of a swimming pool. Fire Marshal said it must have a sprinkler system...
• ororo7 3y ago
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• anothernewdude 3y ago
  > It is not short-term rentals, it is not individuals owning too many houses, it is not rich people moving in to a neighborhood, it is not Chinese money fleeing the PRC, and it is not private equity "commodifying" housing. It's all those things. Stop looking for a single explanation. That's not how the world works. > overburdening regulation. Last two times my country tried to cut out the red tape it ended up costing trillions in fixes, and meant fewer builds in the end. Building regulations are good, there is a reason they exist.
  • kelnos 3y ago
    > It's all those things. Stop looking for a single explanation. Yes, it is all those things. They all contribute some non-zero amount. But if you just build more housing, those other things end up not mattering. Consider: There are too many short-term rentals, and people can't find houses to buy -> Build more housing, problem solved. Too many people own second homes, and people can't find houses to buy -> Build more housing, problem solved. Rich people / foreigners / private equity are buying up housing, and people can't find houses to buy -> Build more housing, problem solved. (This one also solves the cause as well; if there's enough housing -- because you keep building -- this housing becomes less attractive to rich people / foreigners / private equity, because they don't envision a return on their investment that's worth it.) > Last two times my country tried to cut out the red tape it ended up costing trillions in fixes, and meant fewer builds in the end. Building regulations are good, there is a reason they exist. Those aren't the kind's of things the GP is talking about. Safety standards are of course something we should not relax. What we're talking about: * Restrictive zoning (e.g. "only single family homes", "no street level retail", "max height two stories", "must have parking for N cars per household", etc.). * Allowing people who live nearby to object to construction on any grounds, which kicks off months (or years) of hearings and legal fights, that often results in projects being greatly scaled down or cancelled. (Ultimately, the homeowners just don't want more housing because they fear it will affect their own property values. Pretty much everything else is just an excuse to attempt to avoid sounding greedy or classist.) * Laws like the CEQA (California Environmental Quality Act) -- a reasonable law with good intentions -- that is abused by other homeowners to tie up development projects in court. * Capricious city planning departments that can hold up or deny approval for arbitrary reasons having nothing to do with building codes. * Long permitting processes that are necessary, but the bureaucracy spends more time than necessary. All of this ends up killing projects, or making projects prohibitively expensive. If you're a developer looking to build a condominium building, even though the actual build might only take 6 months, you will have to factor in legal costs, and just the cost of sitting around doing nothing for possibly a year or more (while the loan you took out to buy the land still needs its interest payments) before you can start building. And that's if you're lucky; maybe your project gets cancelled, or maybe it gets scaled down to the point where it's not financially feasible at all. And if you do finally get approval and finish your build, you now have to sell the units at what many would consider "luxury" prices, because your costs to build ended up being far higher than they needed to be.
• supportengineer 3y ago
  High demand areas in the Bay Area would be places like Atherton, Woodside, Los Altos Hills. The existing home owners have a lot of resources to fight developments such as high rise apartments or condos. They have no incentive to allow such development.
  • jimbob45 3y ago
    Why fight high-rise apartments? Those are going to preserve the character of a city better than anything.
    • kelnos 3y ago
      Atherton, Woodside, and Los Altos Hills are not cities (at least not the way you're thinking). They're relatively small communities full of people who live in large single-family homes on multi-acre lots, often surrounded by a fence or some other privacy-type barrier. The "character" they want to preserve is not that of an urban center with multi-family housing.
      • fragmede 3y ago
        They're absolutely not cities. They're small wealthy villages with a tiny population that exist in rural California.
• seanmcdirmid 3y ago
  If you mentioned china, then we should look at China’s massive building of housing there for inspiration? They have none of the restrictions you say is keeping us back, but because housing is a speculative asset (and the only generic one of value given a untrusted stock market), prices still go up, people cant get places to rent in Beijing or Shanghai, one bedroom apartments going for $1 million, etc… of course, the issue is the speculation, not the lack of supply. We already rely on market forces to ensure that everyone doesn’t just move to one of a few popular cities. We don’t just need more housing, we need them specifically in Seattle, SF, LA, Denver, Manhattan places where people want to live. I still don’t see how SF achieving Manhattan density would cause its prices not to be Manhattan comparable. Something else is going on with increased supply having the ability to induce even more demand. Overbuilding is also a danger. Berlin had excess capacity of housing and work space for a couple of decades before demand could fill it. Just because there is demand today doesn’t mean there will be demand when your project is finished, eg interest rate increases can put a damper on speculative demand. A Japanese style mega property crash is something no one wants to deal with.
  • HDThoreaun 3y ago
    Speculation only works when the asset is supply constrained. China's problem is that they've moved 600 million people from rural areas to urban in the last 70 years.
    • seanmcdirmid 3y ago
      They have enough housing for twice their population now, supply isn’t the constraint.
      • LargeTomato 3y ago
        The original argument mentioned China as a country that does not have a housing shortage. Somehow you just decided that the poster is suggesting we transition our system to a complete free for all, unregulated market. It's unclear why or how you arrived at that conclusion. Also, the Chinese have been simulating the housing sector to encourage domestic growth. The Chinese housing sector did not grow out of control just due to lack of regulation. It was also financial stimulus and incentives to encourage building. So, you just pounced on that other commenter, accused them of something they didn't say, and despite believing that you understand the Chinese housing market you actually have no clue. You are literally the Dunning Kruger effect manifest info a hacker news commenter.
• Clent 3y ago
  If this were true it should be trivial to point out specific laws that went into effect around the time of the drop off. My armchair economist opinion is that we are still dealing with the effects of the 2008 housing crash.
  • LargeTomato 3y ago
    And that is why you are an armchair economist. While you may be able to point to a causal chain from the 2008 recession to what's going on today there are so many other things happening and contributing to the economy that saying "2008" is an insufficient answer.
    • cced 3y ago
      The irony here is that you’re saying this while providing none of those many things. Why not add more meat around the bone while criticizing others for not doing so?
• DanielHB 3y ago
  There is something to be said of the shifting demographics: people moving more into a few hot-spots cities, a lot of rural areas emptying and small cities dying that put dramatic pressure on the demand side. The legislation and processes to get new housing done haven't kept up
• adql 3y ago
  Having house be store of value/investment rather than commodity is a big part, it's not just "getting permission is hard", because as long as it is a an investment, everyone that has housing will do everything in their power to keep the status quo, including pushing the lawmakers to make it hard to do anything that would lower housing value.
• afpx 3y ago
  Fighting NIMBY has been a thing since the 80s. Have there been any successes?
• barryrandall 3y ago
  Option A: The housing shortage is 100% a product of public policy and the only solution is to support someone's favored political candidate or party. Option B: Housing shortages are caused by a combination of factors that include public policy, and solving the problem requires understanding and considering all of them.
• ryanisnan 3y ago
  In my area, a condo complex of 93 units was purchased by 16 individuals (or companies). All of the things you mentioned are definitely a part of the problem.
• postalrat 3y ago
  It would be pretty easy to overcome all that if they didn't have to spend so much money actually build the housing. Make it cheap to build housing and it will be done.