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Discussions of zoning, building codes etc. are valuable, but I think everyone's missing the main factor: If you somehow made housing 50% cheaper people would ju

by avar 3y ago

Discussions of zoning, building codes etc. are valuable, but I think everyone's missing the main factor: If you somehow made housing 50% cheaper people would just demand 50% larger housing. If you look at housing size over time people today are living in palaces by the standards of someone a century ago. In the US, the average household size has expanded by 1000 sq ft since the 70s [1]. That's an addition of an average household from the 1910s, which on average had two more people living in it compared to today. And where people don't demand extra space they demand more luxury. One example is AC. It's unthinkable to construct a house without it in some parts of the US, but people living there a 100 years ago somehow made do without. Over here in western Europe we've had less size inflation than the Americans, but we've had the same luxury inflation. People here want insulation and sound proofing that's extravagant by American standards so they won't hear the neighbours, huge windows, electric sockets everywhere etc. 1. https://populationeducation.org/wp-content/uploads/2020/04/average-house-household-size-in-us-infographic.jpg https://populationeducation.org/wp-content/uploads/2020/04/a...

quartesixte 3y ago
The size thing is getting out of hand. I grew up in older housing built in the 60s and 70s -- fairly small by modern standards, but there was a bigger backyard and still enough space to store everything. It felt adequate and honestly more than enough for sleeping, eating, and resting from the outside world with friends and family. And then I started visiting my friends' more modern home and I was flabbergasted by the sheer size. You have to text someone to get their attention because yelling across the house is not very convenient anymore. And so many rooms just stood empty like gallery spaces -- "to be used on specific occasions". I don't quite get it -- and I hope that construction costs come down and permitting eases. For once I am ready to buy a home, I want to be able to custom build my own small house.
- bombcar 3y ago
  The problem is that many prices for building are fixed, but increasing volume (size) is relatively cheap. It takes a builder about as much time to build a small house as a large one, and the large one is more profitable, so which do you think they’d like to build? You can certainly build a smaller house, but you get the $250k for a small house build but only $300-350 to double its size.
AnthonyMouse 3y ago
> If you somehow made housing 50% cheaper people would just demand 50% larger housing. The incremental value of the first 1000 sq ft is nowhere near as much as the next 1000 sq ft. In one case you're no longer living outdoors, in the other you have more space to put your junk. If you somehow made housing 50% cheaper people might just demand 20% larger housing, but so what? Also, even in your formulation the result would be that someone who can currently only afford a small apartment would then be able to afford a larger one and be able to start a family, which is good. > In the US, the average household size has expanded by 1000 sq ft since the 70s A major reason for this is that we effectively prohibited smaller ones. If zoning only allows you to build one housing unit on the lot, it will obviously be more profitable to make it a 2500 sq ft house than a 500 sq ft studio. Meanwhile you might have been inclined to make it a dozen 500 sq ft studios, but that's not allowed.
- kgwgk 3y ago
  > The incremental value of the first 1000 sq ft is nowhere near as much as the next 1000 sq ft Note that - intentionally or not - the parent comment said 50% larger and not 100% larger which is what they could buy for the same price if it was 50% cheaper.
  - AnthonyMouse 3y ago
    That depends on whether you take the "50% larger" as relative to the old size or the new size. 50% of a 2000 sq ft unit is 1000 sq ft, so a 2000 sq ft unit is 50% (of 2000 sq ft) larger than the 1000 sq ft unit. This is a less common usage but makes more sense in context, because having the size increase eat the entire cost reduction is a problem if you're trying to achieve affordability, whereas getting a 1500 sq ft unit for 3/4ths of the old price of a 1000 sq ft unit is hardly anything to complain about.
    - kgwgk 3y ago
      > a 2000 sq ft unit is 50% larger than the 1000 sq ft unit Ok then.
dalyons 3y ago
AC costs effectively nothing to install as a % of new home build cost these days. It’s expensive to run sure, but not to add to a build.
- avar 3y ago
  The article were discussing claims HVAC costs are 6% for a newly built home. That's not a trivial amount. As far as I can tell the minimum common standard in much of the US is only for heating [1]. Depending on your house layout and where you live that could be satisfied with a few portable electric radiators. Anyway, I'm not singling out HVAC in particular, but using it as an example of something that's not strictly required, but people demand. It's death by a thousand cuts. 1. https://up.codes/s/heating-equipment-and-systems https://up.codes/s/heating-equipment-and-systems
  - theluketaylor 3y ago
    All the areas of the US undergoing population growth absolutely require air conditioning to be livable spaces, like Georgia, Florida, Texas, and Arizona. AC is not optional in nearly every place substantial building is taking place. Heat pumps mean that heating and cooling are provided by the same device, so the cost of having cooling as a well as heating is zero, having one means having the other. Zoning costs are not well accounted for by the article since it’s based on all the housing that actually got built. Zoning cost to society also includes all the homes that didn’t get built because it was illegal to put a shovel in the ground.
    - avar 3y ago
      Air conditioning wasn't invented until 1902, and didn't start seeing wide deployment in the US until the 1960s[1]. I'll leave the comparison to the historical population of the states you mentioned as an exercise for the reader. I'll just say that I don't think you can convincingly argue that AC is required for human habitation in those places. Have you traveled much outside the US? There's plenty of places (e.g. in Africa and the middle-East) that are much hotter than that, and where AC is a rare luxury. If you don't have AC there's plenty of places in the US where you wouldn't really need heating either, or perhaps only a small space heater. Once you're at that point you'd drop all the fixed cost of having a heat pump setup. So no ducting etc. Don't take my word for it, read the article we're discussing here. But yes, if you've already paid for the fixed cost of installing all of the infrastructure required to have AC throughout your house the marginal cost of adding just the cooling component itself is trivial. But that's a really strange point to make, why would anyone want that if we're discussing dropping AC (for cost comparison purposes)? If you only want heating then running water-heated radiators on a closed loop is much cheaper. That's what we do in the parts of Europe that only really need heating, and not cooling. That or electric radiators, as is ubiquitous e.g. in Norway. The water-based systems are better if you're heating them with gas. Having said all that I wouldn't be keen to buy a house in the states you mentioned without AC, I also wouldn't like to buy a house where I don't have easy access to electric sockets etc. All I'm saying is that you need to factor those shifting preferences into the equation when asking why something's expensive. 1. https://blogs.sas.com/content/graphicallyspeaking/2019/10/02/when-did-household-air-conditioning-become-ubiquitous-in-the-us/ https://blogs.sas.com/content/graphicallyspeaking/2019/10/02...

by avar 3y ago

quartesixte 3y ago

The size thing is getting out of hand. I grew up in older housing built in the 60s and 70s -- fairly small by modern standards, but there was a bigger backyard and still enough space to store everything. It felt adequate and honestly more than enough for sleeping, eating, and resting from the outside world with friends and family. And then I started visiting my friends' more modern home and I was flabbergasted by the sheer size. You have to text someone to get their attention because yelling across the house is not very convenient anymore. And so many rooms just stood empty like gallery spaces -- "to be used on specific occasions". I don't quite get it -- and I hope that construction costs come down and permitting eases. For once I am ready to buy a home, I want to be able to custom build my own small house.

bombcar 3y ago
The problem is that many prices for building are fixed, but increasing volume (size) is relatively cheap. It takes a builder about as much time to build a small house as a large one, and the large one is more profitable, so which do you think they’d like to build? You can certainly build a smaller house, but you get the $250k for a small house build but only $300-350 to double its size.

AnthonyMouse 3y ago

> If you somehow made housing 50% cheaper people would just demand 50% larger housing. The incremental value of the first 1000 sq ft is nowhere near as much as the next 1000 sq ft. In one case you're no longer living outdoors, in the other you have more space to put your junk. If you somehow made housing 50% cheaper people might just demand 20% larger housing, but so what? Also, even in your formulation the result would be that someone who can currently only afford a small apartment would then be able to afford a larger one and be able to start a family, which is good. > In the US, the average household size has expanded by 1000 sq ft since the 70s A major reason for this is that we effectively prohibited smaller ones. If zoning only allows you to build one housing unit on the lot, it will obviously be more profitable to make it a 2500 sq ft house than a 500 sq ft studio. Meanwhile you might have been inclined to make it a dozen 500 sq ft studios, but that's not allowed.

kgwgk 3y ago
> The incremental value of the first 1000 sq ft is nowhere near as much as the next 1000 sq ft Note that - intentionally or not - the parent comment said 50% larger and not 100% larger which is what they could buy for the same price if it was 50% cheaper.
- AnthonyMouse 3y ago
  That depends on whether you take the "50% larger" as relative to the old size or the new size. 50% of a 2000 sq ft unit is 1000 sq ft, so a 2000 sq ft unit is 50% (of 2000 sq ft) larger than the 1000 sq ft unit. This is a less common usage but makes more sense in context, because having the size increase eat the entire cost reduction is a problem if you're trying to achieve affordability, whereas getting a 1500 sq ft unit for 3/4ths of the old price of a 1000 sq ft unit is hardly anything to complain about.
  - kgwgk 3y ago
    > a 2000 sq ft unit is 50% larger than the 1000 sq ft unit Ok then.

dalyons 3y ago

AC costs effectively nothing to install as a % of new home build cost these days. It’s expensive to run sure, but not to add to a build.

avar 3y ago
The article were discussing claims HVAC costs are 6% for a newly built home. That's not a trivial amount. As far as I can tell the minimum common standard in much of the US is only for heating [1]. Depending on your house layout and where you live that could be satisfied with a few portable electric radiators. Anyway, I'm not singling out HVAC in particular, but using it as an example of something that's not strictly required, but people demand. It's death by a thousand cuts. 1. https://up.codes/s/heating-equipment-and-systems https://up.codes/s/heating-equipment-and-systems
- theluketaylor 3y ago
  All the areas of the US undergoing population growth absolutely require air conditioning to be livable spaces, like Georgia, Florida, Texas, and Arizona. AC is not optional in nearly every place substantial building is taking place. Heat pumps mean that heating and cooling are provided by the same device, so the cost of having cooling as a well as heating is zero, having one means having the other. Zoning costs are not well accounted for by the article since it’s based on all the housing that actually got built. Zoning cost to society also includes all the homes that didn’t get built because it was illegal to put a shovel in the ground.
  - avar 3y ago
    Air conditioning wasn't invented until 1902, and didn't start seeing wide deployment in the US until the 1960s[1]. I'll leave the comparison to the historical population of the states you mentioned as an exercise for the reader. I'll just say that I don't think you can convincingly argue that AC is required for human habitation in those places. Have you traveled much outside the US? There's plenty of places (e.g. in Africa and the middle-East) that are much hotter than that, and where AC is a rare luxury. If you don't have AC there's plenty of places in the US where you wouldn't really need heating either, or perhaps only a small space heater. Once you're at that point you'd drop all the fixed cost of having a heat pump setup. So no ducting etc. Don't take my word for it, read the article we're discussing here. But yes, if you've already paid for the fixed cost of installing all of the infrastructure required to have AC throughout your house the marginal cost of adding just the cooling component itself is trivial. But that's a really strange point to make, why would anyone want that if we're discussing dropping AC (for cost comparison purposes)? If you only want heating then running water-heated radiators on a closed loop is much cheaper. That's what we do in the parts of Europe that only really need heating, and not cooling. That or electric radiators, as is ubiquitous e.g. in Norway. The water-based systems are better if you're heating them with gas. Having said all that I wouldn't be keen to buy a house in the states you mentioned without AC, I also wouldn't like to buy a house where I don't have easy access to electric sockets etc. All I'm saying is that you need to factor those shifting preferences into the equation when asking why something's expensive. 1. https://blogs.sas.com/content/graphicallyspeaking/2019/10/02/when-did-household-air-conditioning-become-ubiquitous-in-the-us/ https://blogs.sas.com/content/graphicallyspeaking/2019/10/02...