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I am not actually intending to be sarcastic at all - I think the entire industry is morally bankrupt. I am a real estate developer (re-developer actually - spec

by voisin 2y ago

I am not actually intending to be sarcastic at all - I think the entire industry is morally bankrupt. I am a real estate developer (re-developer actually - specializing in heritage buildings and other complicated adaptive reuse projects), so I deal with planners, committees, official plans, zoning by-laws and the building code daily. It is painful to see indefensible requirements being thrust on projects - even those projects (like mine) that the municipality seems predisposed to desire (saving old buildings, intensifying the core, etc etc). What’s worse, is to watch governments now rush to “fix” the mistakes that they are solely responsible for by punishing people - retroactively changing the rules - and costing average folk their savings. I refer to Canada specifically which made it so challenging to build housing for 40 years that we have a massive scarcity and housing crisis that is being “fixed” by taxing / fining people for having a second home.

BenFranklin100 2y ago
What is your opinion on the recent SCOTUS decisions declaring that forcing developers to pay for community improvements qualifies as a taking? Do you see this having a material effect on housing development?
- alistairSH 2y ago
  Do you have a link to a summary? I missed it, if it ever made the front page news. IANAdeveloper… if a developer is otherwise within code/zoning, SCOTUS is probably correct. If they’re asking for zoning changes, there should be room for negotiation on nearby improvements.
  - AnthonyMouse 2y ago
    The takings clause was ratified in 1791. Unless the current zoning restrictions predate that, there is an element of cheating to imposing a restriction and then "negotiating" to remove it in exchange for something that would otherwise be a taking.
  - carbocation 2y ago
    News article about it: https://www.cbsnews.com/sanfrancisco/news/supreme-court-ruling-could-pave-way-for-more-housing-developments-in-california/ https://www.cbsnews.com/sanfrancisco/news/supreme-court-ruli...
    - BenFranklin100 2y ago
      This is the ruling, thanks.
  - voisin 2y ago
    > If they’re asking for zoning changes, there should be room for negotiation on nearby improvements. The problem is that in many areas (of Canada at least), zoning bylaws are horribly outdated and inconsistent with municipal priorities. But municipalities don’t have an incentive to change them because if they allow things to be done “as of right” with modern zoning, they can’t shake down developers to fund their pet projects. So everything is a negotiation, which again adds uncertainty and cost. Governments need to get out of the way and let developers build, or accept that they are the source of the housing scarcity.
- voisin 2y ago
  I am Canadian so haven’t followed this decision, but I 100% support banning municipal governments from funding pet projects with fees on developers. It’s a major component of any project’s cost structure and absolutely flows through to the end buyer or renter. Landlords aren’t just absorbing these costs because the demand for housing exceeds the supply so house buyers/renters are price takers and ultimately shoulder the tax/fee.
  - BenFranklin100 2y ago
    Worse, the fees reduce new construction, thus limiting supply and raising rents on existing units. It's bad public policy regardless of its legality.
Workaccount2 2y ago
> by taxing / fining people for having a second home. I don't see the issue with this? The profits in Canadian real estate are not on the back of some new found resource. It's entirely an effective wealth redistribution from have-nots to haves. If you have property, the vast amount of value in it is strictly from the fact that it is artificially scarce. To get into the "haves" you have to pay an artificial tax in the form of a grossly inflated price.
- all2 2y ago
  The grossly inflated price comes from where though? I'd put it to you that a ban on usury where real estate was concerned would crush land values over night. Easy money (cheap loans) allow speculation, and speculation is one of the primary drivers of land value.
  - epistasis 2y ago
    A far bigger driver of speculation is scarcity. Without that scarcity, loans would do nothing to drive land value. Tight zoning is the primary driver of real estate value, because it further increases the scarcity of land. It makes small homes worth absolutely insane values. Further, though eliminating cheap loans will limit the amount that people can pay for the real estate, it also reduces the ability of people to pay, so every person is back to the same place with scarcity. So though eliminating loans may change the face value of the cost of housing, in real terms, eliminating loans does nothing for ordinary's people ability to obtain housing where they want it. Only increasing supply by removing overly restrictive zoning will actually improve the material conditions for people. All that said, we should definitely eliminate financial products in the US like the 30 year fixed rate mortgage, a government creation that does inflate prices, while reducing the ability of people to move. But we should get rid of it primarily because it reduces the ability of people to move by trapping them into the home they were in when mortgage rates were low.
  - voisin 2y ago
    What you call usury is also a government caused problem. It’s almost like 30+ year amortizations and ultra low interest rates… weren’t good for affordability. But now everyone but the government itself is the cause of this issue (in the government’s humble opinion). Blame immigrants, developers, AirBNB, investors… anyone but government! And if you must blame government, blame some other level of government!

by voisin 2y ago

BenFranklin100 2y ago

What is your opinion on the recent SCOTUS decisions declaring that forcing developers to pay for community improvements qualifies as a taking? Do you see this having a material effect on housing development?

alistairSH 2y ago
Do you have a link to a summary? I missed it, if it ever made the front page news. IANAdeveloper… if a developer is otherwise within code/zoning, SCOTUS is probably correct. If they’re asking for zoning changes, there should be room for negotiation on nearby improvements.
- AnthonyMouse 2y ago
  The takings clause was ratified in 1791. Unless the current zoning restrictions predate that, there is an element of cheating to imposing a restriction and then "negotiating" to remove it in exchange for something that would otherwise be a taking.
- carbocation 2y ago
  News article about it: https://www.cbsnews.com/sanfrancisco/news/supreme-court-ruling-could-pave-way-for-more-housing-developments-in-california/ https://www.cbsnews.com/sanfrancisco/news/supreme-court-ruli...
  - BenFranklin100 2y ago
    This is the ruling, thanks.
- voisin 2y ago
  > If they’re asking for zoning changes, there should be room for negotiation on nearby improvements. The problem is that in many areas (of Canada at least), zoning bylaws are horribly outdated and inconsistent with municipal priorities. But municipalities don’t have an incentive to change them because if they allow things to be done “as of right” with modern zoning, they can’t shake down developers to fund their pet projects. So everything is a negotiation, which again adds uncertainty and cost. Governments need to get out of the way and let developers build, or accept that they are the source of the housing scarcity.
voisin 2y ago
I am Canadian so haven’t followed this decision, but I 100% support banning municipal governments from funding pet projects with fees on developers. It’s a major component of any project’s cost structure and absolutely flows through to the end buyer or renter. Landlords aren’t just absorbing these costs because the demand for housing exceeds the supply so house buyers/renters are price takers and ultimately shoulder the tax/fee.
- BenFranklin100 2y ago
  Worse, the fees reduce new construction, thus limiting supply and raising rents on existing units. It's bad public policy regardless of its legality.

Workaccount2 2y ago

> by taxing / fining people for having a second home. I don't see the issue with this? The profits in Canadian real estate are not on the back of some new found resource. It's entirely an effective wealth redistribution from have-nots to haves. If you have property, the vast amount of value in it is strictly from the fact that it is artificially scarce. To get into the "haves" you have to pay an artificial tax in the form of a grossly inflated price.

all2 2y ago
The grossly inflated price comes from where though? I'd put it to you that a ban on usury where real estate was concerned would crush land values over night. Easy money (cheap loans) allow speculation, and speculation is one of the primary drivers of land value.
- epistasis 2y ago
  A far bigger driver of speculation is scarcity. Without that scarcity, loans would do nothing to drive land value. Tight zoning is the primary driver of real estate value, because it further increases the scarcity of land. It makes small homes worth absolutely insane values. Further, though eliminating cheap loans will limit the amount that people can pay for the real estate, it also reduces the ability of people to pay, so every person is back to the same place with scarcity. So though eliminating loans may change the face value of the cost of housing, in real terms, eliminating loans does nothing for ordinary's people ability to obtain housing where they want it. Only increasing supply by removing overly restrictive zoning will actually improve the material conditions for people. All that said, we should definitely eliminate financial products in the US like the 30 year fixed rate mortgage, a government creation that does inflate prices, while reducing the ability of people to move. But we should get rid of it primarily because it reduces the ability of people to move by trapping them into the home they were in when mortgage rates were low.
- voisin 2y ago
  What you call usury is also a government caused problem. It’s almost like 30+ year amortizations and ultra low interest rates… weren’t good for affordability. But now everyone but the government itself is the cause of this issue (in the government’s humble opinion). Blame immigrants, developers, AirBNB, investors… anyone but government! And if you must blame government, blame some other level of government!