6 ms·

Given how abundant land is, does it imply that supply shortages are purely man-made? (e.g. policies not allowing large swaths of land to be built on). Otherwis

by nomilk 2y ago

Given how abundant land is, does it imply that supply shortages are purely man-made? (e.g. policies not allowing large swaths of land to be built on). Otherwise it doesn't make sense that prices are high for a good (housing) whose primary input (land) is in great supply.

User23 2y ago
The primary input isn’t land, it’s tolerable neighbors. That is of course what “good school district,” “location, location, location,” and similar euphemisms actually mean. If you have a high tolerance for crime and other antisocial behavior there is plenty of extremely affordable housing in major US cities with plenty of amenities like walkability and public transportation.
- xboxnolifes 2y ago
  Good school district doesn't just mean tolerable neighbors, it also means wealthy neighbors (for more collected school taxes).
- nradov 2y ago
  Or if you venture outside of major cities there is also plenty of affordable housing in unfashionable suburban. Many of those areas also have low crime and decent public schools. Not much public transportation, but plenty of free parking.
  - Auracle 2y ago
    Define affordable. My nearest town has a population of 500 or so and my home’s price has at least doubled in the last 10 years.
    - nradov 2y ago
      Absolute prices are irrelevant. Affordability is reflected in home ownership rates. In some states such as Alabama, Maine, Minnesota, Vermont, South Carolina, etc. the rates are above 70%. Regular people seem to be finding it affordable. https://www.propertyshark.com/info/us-homeownership-rates-by-state-and-city/#___Homeownership_by_State__ https://www.propertyshark.com/info/us-homeownership-rates-by...
      - ItsMonkk 2y ago
        How does a person becoming homeless effect the homeownership rate? They no longer get counted. How does someone owning (and living in) multiple properties effect the homeownership rate? They count multiple times! How does someone renting out a bedroom effect the homeownership rate? Their tenant doesn't count! This includes adult children. You can not use this metric in the way that you just assumed you could.
        nradov 2y ago
        Wrong. Instead of lying you should take a few minutes to understand how the rate is actually calculated. https://fred.stlouisfed.org/series/HOWNRATEACS006085 https://fred.stlouisfed.org/series/HOWNRATEACS006085
        ItsMonkk 2y ago
        Surely one of us is confused, but I am not lying. Here it is on the Census website. No where does the Homeownership rate depend on people. It depends on housing units. > Housing Unit. A housing unit is a house, an apartment, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters. > Homeownership Rates. The proportion of households that are owners is termed the homeownership rate. It is computed by dividing the number of households that are owners by the total number of occupied households. > https://www.census.gov/housing/hvs/definitions.pdf https://www.census.gov/housing/hvs/definitions.pdf When we get to the bottom of this we should edit the Wikipedia article if I am wrong. > The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate. Many households that are owner-occupied contain adult relatives (often young adults, descendants of the owner) who do not own their own home. Single building multi-bedroom rental units can contain more than one adult, all of whom do not own a home. > https://en.wikipedia.org/wiki/Homeownership_in_the_United_States https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...
        2y ago
lwansbrough 2y ago
That's not really how it works as far as I understand. Their are economic epicentres, and building near them means greater productivity and economic growth. The further out you get, the lower the ROI. The problem is, many cities in the west, controlled by an aging population of "haves" who bought when houses were the price of a sack of beans, feel that they are entitled to live in the same neighbourhood they purchased in. Incumbent homeowners are blocking new development, which stifles economic growth and creates a supply shortage, driving prices up. You got one part of it right: building more solves the housing crisis. But if you built outside cities, you're asking new homeowners (read: young people who contribute the most to economic growth) to live increasingly far away from where the economic growth happens.
- grumple 2y ago
  > feel that they are entitled to live in the same neighbourhood they purchased in. It's not a feeling, it's how purchasing things works.
  - Plasmoid 2y ago
    >> feel that they are entitled to live in the same neighbourhood they purchased in. > It's not a feeling, it's how purchasing things works. He means that people feel they get to control the neighbourhood. Exercising control over property they don't actually own.
    - grumple 2y ago
      We are also legally entitled to that as well, this is how voting works. Community boards and local governments are intended to give people democratic control over the areas in which they live.
      - B56c 2y ago
        The problem is that people overwhelming vote for neighborhood stasis, which makes it completely unable to handle long-term changes in growth patterns. People always want to preserve their nice neighborhood, but they never see that a neighborhood that can't change is a neighborhood in permanent decline.
phoehne 2y ago
First, not all land is the same. The US coasts, for example, have much better income and job availability than sparsely populated cities in the middle of the country. In Europe, the size of the city is somewhat "fixed," depending on geography, transportation, etc. The same is true of some US cities, meaning that land is just more valuable that other land. That's why you see houses that are almost free in some cities, but those towns and cities are not the place where most people want to live. Second is construction cost. A round number for the US is about 150 USD per square foot. So a 2,000 sq. foot house should be in the neighborhood of $300,000. (That does not include land, just the structure). However, in desirable cities this number is higher because labor costs are higher. In sparsely populated cities, that number is (of course) lower. This varies country to country, and in some space constrained cities, vertical is the only direction that you can build. (As one poster noted below, the $150/sq foot is only for single family. Multi-story buildings are significantly more expensive.) But probably the biggest problem are artificial barriers to construction. The zoning system in the US, for example, prevents the construction of higher density in some areas. For example, a neighborhood can be zoned at 1 per acre. It's illegal to build a duplex, apartment, or to divide the acre into four and build four houses, etc. The zoning is set by a local board elected by homeowners in that locality. Being near high-density housing often lowers the value of existing homes, including making traffic worse and stressing the school system. (Also, to be fair, a sudden, large influx of new people, before the tax base and services catch up, can stress EMS, hospitals, fire, police, public transportation, sewage, water, electrical grid, etc. as well as just schools and roads). Finally, there are builders, who would rather sell one large unit instead of lots of cheaper units. Building and selling a 1,000,000 USD home is cheaper and easier to manage than 5 200,000 USD homes. If you can only build one house per acre, or the space is constrained by geography, it doesn't make economic sense to build a 200,000 USD house. Even if space isn't constrained, the incentive is to build luxury, high end units as long as you can sell all your inventory.
seoulmetro 2y ago
Yes. Someone or something that man wants, made or desires is destroying the idea of housing for us. Not sure what it is, but there's a reason the largest, most empty countries are suffering the worst real estate problems. It's absolutely weird to see land go for $1m for a small lot, then 10 minutes drive there are cows grazing on huge acreage. Then if you do a 10 minute flight in any direction you can see thousands of hectares of empty, good, liveable land. (This is in Australia)

by nomilk 2y ago

User23 2y ago

The primary input isn’t land, it’s tolerable neighbors. That is of course what “good school district,” “location, location, location,” and similar euphemisms actually mean. If you have a high tolerance for crime and other antisocial behavior there is plenty of extremely affordable housing in major US cities with plenty of amenities like walkability and public transportation.

xboxnolifes 2y ago
Good school district doesn't just mean tolerable neighbors, it also means wealthy neighbors (for more collected school taxes).
nradov 2y ago
Or if you venture outside of major cities there is also plenty of affordable housing in unfashionable suburban. Many of those areas also have low crime and decent public schools. Not much public transportation, but plenty of free parking.
- Auracle 2y ago
  Define affordable. My nearest town has a population of 500 or so and my home’s price has at least doubled in the last 10 years.
  - nradov 2y ago
    Absolute prices are irrelevant. Affordability is reflected in home ownership rates. In some states such as Alabama, Maine, Minnesota, Vermont, South Carolina, etc. the rates are above 70%. Regular people seem to be finding it affordable. https://www.propertyshark.com/info/us-homeownership-rates-by-state-and-city/#___Homeownership_by_State__ https://www.propertyshark.com/info/us-homeownership-rates-by...
    - ItsMonkk 2y ago
      How does a person becoming homeless effect the homeownership rate? They no longer get counted. How does someone owning (and living in) multiple properties effect the homeownership rate? They count multiple times! How does someone renting out a bedroom effect the homeownership rate? Their tenant doesn't count! This includes adult children. You can not use this metric in the way that you just assumed you could.
      - nradov 2y ago
        Wrong. Instead of lying you should take a few minutes to understand how the rate is actually calculated. https://fred.stlouisfed.org/series/HOWNRATEACS006085 https://fred.stlouisfed.org/series/HOWNRATEACS006085
        ItsMonkk 2y ago
        Surely one of us is confused, but I am not lying. Here it is on the Census website. No where does the Homeownership rate depend on people. It depends on housing units. > Housing Unit. A housing unit is a house, an apartment, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters. > Homeownership Rates. The proportion of households that are owners is termed the homeownership rate. It is computed by dividing the number of households that are owners by the total number of occupied households. > https://www.census.gov/housing/hvs/definitions.pdf https://www.census.gov/housing/hvs/definitions.pdf When we get to the bottom of this we should edit the Wikipedia article if I am wrong. > The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate. Many households that are owner-occupied contain adult relatives (often young adults, descendants of the owner) who do not own their own home. Single building multi-bedroom rental units can contain more than one adult, all of whom do not own a home. > https://en.wikipedia.org/wiki/Homeownership_in_the_United_States https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...
        2y ago

lwansbrough 2y ago

That's not really how it works as far as I understand. Their are economic epicentres, and building near them means greater productivity and economic growth. The further out you get, the lower the ROI. The problem is, many cities in the west, controlled by an aging population of "haves" who bought when houses were the price of a sack of beans, feel that they are entitled to live in the same neighbourhood they purchased in. Incumbent homeowners are blocking new development, which stifles economic growth and creates a supply shortage, driving prices up. You got one part of it right: building more solves the housing crisis. But if you built outside cities, you're asking new homeowners (read: young people who contribute the most to economic growth) to live increasingly far away from where the economic growth happens.

grumple 2y ago
> feel that they are entitled to live in the same neighbourhood they purchased in. It's not a feeling, it's how purchasing things works.
- Plasmoid 2y ago
  >> feel that they are entitled to live in the same neighbourhood they purchased in. > It's not a feeling, it's how purchasing things works. He means that people feel they get to control the neighbourhood. Exercising control over property they don't actually own.
  - grumple 2y ago
    We are also legally entitled to that as well, this is how voting works. Community boards and local governments are intended to give people democratic control over the areas in which they live.
    - B56c 2y ago
      The problem is that people overwhelming vote for neighborhood stasis, which makes it completely unable to handle long-term changes in growth patterns. People always want to preserve their nice neighborhood, but they never see that a neighborhood that can't change is a neighborhood in permanent decline.

phoehne 2y ago

First, not all land is the same. The US coasts, for example, have much better income and job availability than sparsely populated cities in the middle of the country. In Europe, the size of the city is somewhat "fixed," depending on geography, transportation, etc. The same is true of some US cities, meaning that land is just more valuable that other land. That's why you see houses that are almost free in some cities, but those towns and cities are not the place where most people want to live. Second is construction cost. A round number for the US is about 150 USD per square foot. So a 2,000 sq. foot house should be in the neighborhood of $300,000. (That does not include land, just the structure). However, in desirable cities this number is higher because labor costs are higher. In sparsely populated cities, that number is (of course) lower. This varies country to country, and in some space constrained cities, vertical is the only direction that you can build. (As one poster noted below, the $150/sq foot is only for single family. Multi-story buildings are significantly more expensive.) But probably the biggest problem are artificial barriers to construction. The zoning system in the US, for example, prevents the construction of higher density in some areas. For example, a neighborhood can be zoned at 1 per acre. It's illegal to build a duplex, apartment, or to divide the acre into four and build four houses, etc. The zoning is set by a local board elected by homeowners in that locality. Being near high-density housing often lowers the value of existing homes, including making traffic worse and stressing the school system. (Also, to be fair, a sudden, large influx of new people, before the tax base and services catch up, can stress EMS, hospitals, fire, police, public transportation, sewage, water, electrical grid, etc. as well as just schools and roads). Finally, there are builders, who would rather sell one large unit instead of lots of cheaper units. Building and selling a 1,000,000 USD home is cheaper and easier to manage than 5 200,000 USD homes. If you can only build one house per acre, or the space is constrained by geography, it doesn't make economic sense to build a 200,000 USD house. Even if space isn't constrained, the incentive is to build luxury, high end units as long as you can sell all your inventory.

seoulmetro 2y ago

Yes. Someone or something that man wants, made or desires is destroying the idea of housing for us. Not sure what it is, but there's a reason the largest, most empty countries are suffering the worst real estate problems. It's absolutely weird to see land go for $1m for a small lot, then 10 minutes drive there are cows grazing on huge acreage. Then if you do a 10 minute flight in any direction you can see thousands of hectares of empty, good, liveable land. (This is in Australia)