3 ms·

In my corner of the world zoning is much more relaxed and where it isn't - circumvented by housing developers on a regular basis, yet prices still went up at th

by Tade0 3y ago

In my corner of the world zoning is much more relaxed and where it isn't - circumvented by housing developers on a regular basis, yet prices still went up at the same (or even worse) cadence than in the rest of the world. The problems you've mentioned, while real, are dwarfed by the seemingly infinite appetite for real estate as a store of value - housecoin if you will. The first step out of this is to recognize that this isn't a uniquely American problem.

logicchains 3y ago
What's the population density in the city you live relative to the US?
- Tade0 3y ago
  2.3k people per square kilometre, so approximately 87% that of say San Francisco.
- seszett 3y ago
  Relative to which city in the US? Not the person you're replying to but I feel like it applies to me as well, and it's easy to find US places more densely populated, or less densely. Density isn't even a large factor here, I'm building a house in a place with 140 inhabitants/km² (4000 total) and other than the ground (which is a minor part of the total price) it's not significantly cheaper than in my current city of 2600 inhabitants/km² (500 000 total within city limits, 1,5 million metro area).
jolmg 3y ago
It could be different reasons in different places. In the US it may be zoning and in other places it may be gentrification from Americans immigrating. This isn't to say that seeing real estate as a store of value or investment isn't also part of the problem.
- pydry 3y ago
  If it went up all across the western world and zoning is different all over then zoning is probably not the main culprit. Real estate's suitability as a store of value (the more land hoarded, the more it goes up in value) coupled with rising wealth inequality is a more likely cause than a global problem with local zoning codes.
  - lwansbrough 3y ago
    If your housing prices went up you have a supply shortage. If your city is near a larger city your demand may be auxiliary in which case it’s potentially related to the bigger city’s supply shortage, which in the US is predominantly caused by zoning and code.
    - pydry 3y ago
      Skyrocketing house prices are an international issue. It's still wealth inequality.
- Tade0 3y ago
  I would say that's overwhelmingly the problem. My country's population has been in slow decline since the late 90s, with very little(~1%) change over the 20 years before the pandemic - of course plenty of people moved out, but they didn't bother to report that so that's just the official number. Prices still went up before the 2008 crisis at the same pace as in the rest of the world and started going up in the latter part of the previous decade - exactly like in the rest of the world. All that despite record-breaking construction. There's no realistic explanation of this that doesn't involve treating real estate as a commodity.
  - anal_reactor 3y ago
    People are moving from poor areas to rich areas, from villages to cities, which is actually bad for both cities (overpopulation) and villages (dying out). Half of my parents' village is just empty houses. Meanwhile prices in the city 2h drive away are unimaginably high. Look at detailed population density map of any developed country across time. Nobody wants to live in villages, everyone comes to big cities, preferably the capital.
    - Tade0 3y ago
      Thing is, over here the urbanization rate peaked at 62% in the late 90s and also started declining because people increasingly moved out of cities into the suburbs due to the sheer inability to get a mortgage on any city property. Despite that prices went up across the board. The most egregious example this is a city(Łódź, Poland) which between 1995 and 2020 went from 823k inhabitants to 658k at a steady pace, all while prices going into overdrive mid last decade. There's clearly little demand from people who actually intend to live in the homes they purchased and government statistics confirm that.
- Staple_Diet 3y ago
  >It may gentrification from Americans immigrating I don't know any western nation outside the US (i.e., Canada, UK, Aus and NZ) where that'd be the cause. Yanks don't emigrate often and in large enough amounts to effect any other nation outside a few edge cases that I assume exist in Canada/Mexico. You mostly witness that within your own borders if I'm correct, e.g., the California exodus raising Texas and mid-west prices. For outside the US, while London is a mix of factors, the markets in the remaining nations were primarily upended by housing being seen as an investment vehicle in the late 90's by the preceding generation (boomers) and then later as a store of money by foreigners wanting to park cash offshore, predominantly Chinese nationals. Further manipulations by market players who stand to earn more the higher the price soars (banks, realtors) leaves us with a problem of house prices where no one loses, except the poor millenial buyer, the higher they go.
  - lwansbrough 3y ago
    UK had some of the most restrictive housing policy in the world. It’s not really multi-faceted, is it. It’s just a supply shortage. People want to live there but the UK doesn’t build enough homes.
xtracto 3y ago
I agree with this so much. In my view, the paradigm of residencial real state being an investment is wrong. Residencial properties should have economic properties similar to cars. When someone stops using a car she tries to sell it ASAP as it deprecates with time. That prevents hoarding. It still is OK to invest in commercial and industrial real state. But residential should be protected. The way I would do this is to establish pretty heavy taxation on 2nd, 3rd+ residential property ownership. In Mexico if you sell your house you have to pay tax. But If you prove that it's your main living property, the tax is waived. We should make something like that for the yearly "predial" house tax payment. Buy increase A LOT the tax for non-main properties.
lwansbrough 3y ago
Zoning is relaxed but your area is clearly not out supplying the demand. Doesn’t matter what the zoning laws are if you can’t or don’t build. Here in Canada our limitations are only with zoning and code because we otherwise have the facilities and resources to meet demand if we want to.

by Tade0 3y ago

logicchains 3y ago

What's the population density in the city you live relative to the US?

Tade0 3y ago
2.3k people per square kilometre, so approximately 87% that of say San Francisco.
seszett 3y ago
Relative to which city in the US? Not the person you're replying to but I feel like it applies to me as well, and it's easy to find US places more densely populated, or less densely. Density isn't even a large factor here, I'm building a house in a place with 140 inhabitants/km² (4000 total) and other than the ground (which is a minor part of the total price) it's not significantly cheaper than in my current city of 2600 inhabitants/km² (500 000 total within city limits, 1,5 million metro area).

jolmg 3y ago

It could be different reasons in different places. In the US it may be zoning and in other places it may be gentrification from Americans immigrating. This isn't to say that seeing real estate as a store of value or investment isn't also part of the problem.

pydry 3y ago
If it went up all across the western world and zoning is different all over then zoning is probably not the main culprit. Real estate's suitability as a store of value (the more land hoarded, the more it goes up in value) coupled with rising wealth inequality is a more likely cause than a global problem with local zoning codes.
- lwansbrough 3y ago
  If your housing prices went up you have a supply shortage. If your city is near a larger city your demand may be auxiliary in which case it’s potentially related to the bigger city’s supply shortage, which in the US is predominantly caused by zoning and code.
  - pydry 3y ago
    Skyrocketing house prices are an international issue. It's still wealth inequality.
Tade0 3y ago
I would say that's overwhelmingly the problem. My country's population has been in slow decline since the late 90s, with very little(~1%) change over the 20 years before the pandemic - of course plenty of people moved out, but they didn't bother to report that so that's just the official number. Prices still went up before the 2008 crisis at the same pace as in the rest of the world and started going up in the latter part of the previous decade - exactly like in the rest of the world. All that despite record-breaking construction. There's no realistic explanation of this that doesn't involve treating real estate as a commodity.
- anal_reactor 3y ago
  People are moving from poor areas to rich areas, from villages to cities, which is actually bad for both cities (overpopulation) and villages (dying out). Half of my parents' village is just empty houses. Meanwhile prices in the city 2h drive away are unimaginably high. Look at detailed population density map of any developed country across time. Nobody wants to live in villages, everyone comes to big cities, preferably the capital.
  - Tade0 3y ago
    Thing is, over here the urbanization rate peaked at 62% in the late 90s and also started declining because people increasingly moved out of cities into the suburbs due to the sheer inability to get a mortgage on any city property. Despite that prices went up across the board. The most egregious example this is a city(Łódź, Poland) which between 1995 and 2020 went from 823k inhabitants to 658k at a steady pace, all while prices going into overdrive mid last decade. There's clearly little demand from people who actually intend to live in the homes they purchased and government statistics confirm that.
Staple_Diet 3y ago
>It may gentrification from Americans immigrating I don't know any western nation outside the US (i.e., Canada, UK, Aus and NZ) where that'd be the cause. Yanks don't emigrate often and in large enough amounts to effect any other nation outside a few edge cases that I assume exist in Canada/Mexico. You mostly witness that within your own borders if I'm correct, e.g., the California exodus raising Texas and mid-west prices. For outside the US, while London is a mix of factors, the markets in the remaining nations were primarily upended by housing being seen as an investment vehicle in the late 90's by the preceding generation (boomers) and then later as a store of money by foreigners wanting to park cash offshore, predominantly Chinese nationals. Further manipulations by market players who stand to earn more the higher the price soars (banks, realtors) leaves us with a problem of house prices where no one loses, except the poor millenial buyer, the higher they go.
- lwansbrough 3y ago
  UK had some of the most restrictive housing policy in the world. It’s not really multi-faceted, is it. It’s just a supply shortage. People want to live there but the UK doesn’t build enough homes.

xtracto 3y ago

I agree with this so much. In my view, the paradigm of residencial real state being an investment is wrong. Residencial properties should have economic properties similar to cars. When someone stops using a car she tries to sell it ASAP as it deprecates with time. That prevents hoarding. It still is OK to invest in commercial and industrial real state. But residential should be protected. The way I would do this is to establish pretty heavy taxation on 2nd, 3rd+ residential property ownership. In Mexico if you sell your house you have to pay tax. But If you prove that it's your main living property, the tax is waived. We should make something like that for the yearly "predial" house tax payment. Buy increase A LOT the tax for non-main properties.

lwansbrough 3y ago

Zoning is relaxed but your area is clearly not out supplying the demand. Doesn’t matter what the zoning laws are if you can’t or don’t build. Here in Canada our limitations are only with zoning and code because we otherwise have the facilities and resources to meet demand if we want to.