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They are only lower in the sense that incomes are lower, and often not even that much lower than American cities even if incomes are ten times less. India, for

They are only lower in the sense that incomes are lower, and often not even that much lower than American cities even if incomes are ten times less. India, for example, if you take median home prices and median incomes, they don’t match at all. Yes, an American moving to India who retains an American salary somehow will find it affordable. The locals are struggling, much more than Americans could ever imagine. Japan housing wins by being smaller, and having less requirements like central heating, that would never fly in the west. We really should have that lower end housing, I agree, but then we are comparing apples to Orenjis. China is simply repeating what Japan went through in the 80s/90s. Maybe market sanity comes only after a period of crazy insanity.

AnthonyMouse 2y ago
> They are only lower in the sense that incomes are lower The urge to measure everything by income leads to absurd results, like putting Saudi Arabia and the UAE near the top of the "housing affordability" list because they're flush with oil money, and for the same reason the United States. > We really should have that lower end housing, I agree, but then we are comparing apples to Orenjis. But that's the point. Someone in the US who makes 20% of the median household income still needs somewhere to live, and by refusing to provide smaller units, we make things cost more for everyone else too. Because now they have to spend their entire salary on housing and make up the rest with government assistance, which bids up housing costs for people in the middle -- who are also the ones footing the bill for subsidies made necessary by the high costs. It's not just about the cost per square foot, it's also that small units aren't even available because the rules proscribe more units from being built on the same lot. The result is a de facto prohibition on smaller units because ordinarily it costs a similar amount to build a small number of large units and a large number of small units, but now the latter is unlawful and a small number of small units is uneconomical.
- seanmcdirmid 2y ago
  > The urge to measure everything by income leads to absurd results If you believe housing is for people to live while doing the work they can get at the salaries those jobs are willing to pay them, then it is absurd not to consider income in housing affordability.
  - geodel 2y ago
    Exactly right. Ignoring income of local buyers in market would be ridiculous. My family bought an apartment couple of hrs from Delhi for about $100K which is huge amount for locals considering it is center/ hub of nothing. And as far as fit/finish goes one can easily spend another $50K on it to bring it barely to level of basic rental apartment in US.
  - AnthonyMouse 2y ago
    If it costs e.g. $200,000/unit to create a housing as 5-story buildings then housing should not cost more than $200,000 anywhere that isn't already saturated with 5-story buildings (which includes every metropolitan area in the US), regardless of what local salaries are. Only regulatory rules that constrain construction prevent this from being the case. There is a minimum amount that it intrinsically costs to create housing, e.g. the cost of lumber, and in some places local wages are too low to afford that, and that sucks but the reason for it is low wages rather than housing scarcity. Then there are places where housing is unaffordable, not because wages are low, but because housing costs are artificially high, and that is a different problem with a different solution.
    - seanmcdirmid 2y ago
      There is a lot unpack here. First, it costs way more than $200k/unit for new builds where I live (Seattle). Unless they go for scale, then maybe they are getting $200k with lots of profit and a $1k/month HOA. The biggest cost these days is simply labor. Construction workers aren't cheap. Second, the housing is not at all equivalent in Asia. The standard 30 story overbuilt concrete apartment buildings, completely un-renovated (but at least you can get that done for cheap), but it keeps migrant workers employed (they overbuild on concrete for less technical builds, at the expense of increased building maintnence and/or reduced building lifetime). China and India just don't magic up these buildings, and often times it is used as a jobs program (or they would move on to more expensive but longer lasting builds, the fact that the buildings will be torn down in 20-30 years is seen as a feature and not a bug). But those cheap to build flats are still going for $1 million/each in cities like Shanghai or Shenzhen.
- jjav 2y ago
  > The urge to measure everything by income leads to absurd results What? Measuring relative to income is the only criteria that matters. What would be absurd is not to compare to income. There isn't any absolute number at which housing is affordable or not affordable. It is purely a function of what percentage you need to spend of your income to be housed.
  - AnthonyMouse 2y ago
    If the global price of materials means that it isn't possible to build a housing unit for less than $40,000 then in places where $40,000 isn't an affordable housing cost, your only options are to somehow lower global commodity prices or somehow raise local wages. Both of which are hard, and neither of which are particularly specific to the housing market. It's just not a place where that problem can be solved. Whereas if the global price of materials means that it is possible to build a housing unit for $40,000, but local regulations make it cost $800,000, and then as a result local housing costs are $800,000, that is a problem in the local housing market.

AnthonyMouse 2y ago

> They are only lower in the sense that incomes are lower The urge to measure everything by income leads to absurd results, like putting Saudi Arabia and the UAE near the top of the "housing affordability" list because they're flush with oil money, and for the same reason the United States. > We really should have that lower end housing, I agree, but then we are comparing apples to Orenjis. But that's the point. Someone in the US who makes 20% of the median household income still needs somewhere to live, and by refusing to provide smaller units, we make things cost more for everyone else too. Because now they have to spend their entire salary on housing and make up the rest with government assistance, which bids up housing costs for people in the middle -- who are also the ones footing the bill for subsidies made necessary by the high costs. It's not just about the cost per square foot, it's also that small units aren't even available because the rules proscribe more units from being built on the same lot. The result is a de facto prohibition on smaller units because ordinarily it costs a similar amount to build a small number of large units and a large number of small units, but now the latter is unlawful and a small number of small units is uneconomical.

seanmcdirmid 2y ago
> The urge to measure everything by income leads to absurd results If you believe housing is for people to live while doing the work they can get at the salaries those jobs are willing to pay them, then it is absurd not to consider income in housing affordability.
- geodel 2y ago
  Exactly right. Ignoring income of local buyers in market would be ridiculous. My family bought an apartment couple of hrs from Delhi for about $100K which is huge amount for locals considering it is center/ hub of nothing. And as far as fit/finish goes one can easily spend another $50K on it to bring it barely to level of basic rental apartment in US.
- AnthonyMouse 2y ago
  If it costs e.g. $200,000/unit to create a housing as 5-story buildings then housing should not cost more than $200,000 anywhere that isn't already saturated with 5-story buildings (which includes every metropolitan area in the US), regardless of what local salaries are. Only regulatory rules that constrain construction prevent this from being the case. There is a minimum amount that it intrinsically costs to create housing, e.g. the cost of lumber, and in some places local wages are too low to afford that, and that sucks but the reason for it is low wages rather than housing scarcity. Then there are places where housing is unaffordable, not because wages are low, but because housing costs are artificially high, and that is a different problem with a different solution.
  - seanmcdirmid 2y ago
    There is a lot unpack here. First, it costs way more than $200k/unit for new builds where I live (Seattle). Unless they go for scale, then maybe they are getting $200k with lots of profit and a $1k/month HOA. The biggest cost these days is simply labor. Construction workers aren't cheap. Second, the housing is not at all equivalent in Asia. The standard 30 story overbuilt concrete apartment buildings, completely un-renovated (but at least you can get that done for cheap), but it keeps migrant workers employed (they overbuild on concrete for less technical builds, at the expense of increased building maintnence and/or reduced building lifetime). China and India just don't magic up these buildings, and often times it is used as a jobs program (or they would move on to more expensive but longer lasting builds, the fact that the buildings will be torn down in 20-30 years is seen as a feature and not a bug). But those cheap to build flats are still going for $1 million/each in cities like Shanghai or Shenzhen.
jjav 2y ago
> The urge to measure everything by income leads to absurd results What? Measuring relative to income is the only criteria that matters. What would be absurd is not to compare to income. There isn't any absolute number at which housing is affordable or not affordable. It is purely a function of what percentage you need to spend of your income to be housed.
- AnthonyMouse 2y ago
  If the global price of materials means that it isn't possible to build a housing unit for less than $40,000 then in places where $40,000 isn't an affordable housing cost, your only options are to somehow lower global commodity prices or somehow raise local wages. Both of which are hard, and neither of which are particularly specific to the housing market. It's just not a place where that problem can be solved. Whereas if the global price of materials means that it is possible to build a housing unit for $40,000, but local regulations make it cost $800,000, and then as a result local housing costs are $800,000, that is a problem in the local housing market.