5 ms·

In an ideal world, supply would rise because landlords would want to make more money in total. So the question is why isn't supply rising? Is it because exist

In an ideal world, supply would rise because landlords would want to make more money in total. So the question is why isn't supply rising? Is it because existing landlords aren't funding housing construction or the difficulty of entering the market? Surely it cannot be that the supply of land is that limited. Or is it? Due to zoning regulations?

stass 2y ago
Land in desirable areas is limited and zoning and other government red-tape prevents high-density housing from being built (or any housing being built period in cases like San Francisco).
violet13 2y ago
New construction is rapidly getting more expensive in many of the markets where it's needed the most. While it'd be cool to point to a single factor, it's a combination of several things. People are expecting more (more square footage, higher-end finish), the government is demanding more (environmental and energy regulations), labor is getting costlier, and yes - there's NIMBYism manifesting through zoning laws and other "conservation" rules.
- llamaimperative 2y ago
  In high cost-of-living areas it's the land price.
  - violet13 2y ago
    Not entirely, but either way, land value is tied to all of that. If the city can't grow due to zoning and conservation rules, and if you can't subdivide existing parcels, you basically have more and more money chasing the same lots. By "not entirely", I mean that while land value often dominates, lowering it doesn't solve the problem, because even if you somehow acquired a city lot for $50k in the Bay Area, you wouldn't be able to build a house on that lot for $100k. So, solving one problem doesn't make it affordable.
llamaimperative 2y ago
Yes all of the above. Landlords lobbying against new development under various guises (environmental, "character", "history"); landlords very cheaply withholding vacant land from use (minimal taxes to pay, no rent to pay, no penalties for vacancy); landlords utilizing zoning regulations to prevent effective use of other people's land
ilikehurdles 2y ago
At the macro level, landlords and property owners stand on one side opposed to developers on the other. Developers are incentivized to add housing supply and the others are incentivized to secure it against competition. Tenants _should_ stand on the side of developers but I’m not sure that’s true in general, given the anti-developer sentiment in some of most dense and progressive cities in America. It’s zoning, it’s environmental review, it’s historic/landmark review, it’s good neighbor agreements, it’s disorganized and/or corrupt permitting departments, etc. All of this gets weaponized against new supply. Ultimately. City electeds answer to voters, not builders, so they get the government they deserve. Some places are building, adding supply, and consequently lowering prices. Austin is a prime example. From JosephPolitano on X: Last year, Austin MSA (population: 2.4M) permitted 21,300 units worth of 5+ unit apartment buildings—more than LA (pop: 12.8M) and SF (pop: 4.6M) combined. San Francisco permitted 1,151 housing units over the last 15 months. Austin permitted 1,248 in January alone. Austin averages 28+ units per day this year. San Francisco has allowed 15 units total in all of 2024.
- riku_iki 2y ago
  Austin has area for expansion, and SF not much..
  - ilikehurdles 2y ago
    And yet its skyline is blowing up with high density replacing low density. Meanwhile California and Oregon are too busy raging against macroeconomic forces with central planning committees and their obstructionist, well-connected nonprofit partners.
rehitman 2y ago
It doesn't always work smoothly, sometimes players can corner the market, or become too big and own both side of development, and rental. That is why we need an agency to look at price fixing, monopoly and stuff like that. In a good system, government doesn't subsidize cost. It just enters whenever the system is broken to work based on supply and demand of market.
999900000999 2y ago
Super duper NYMBys! In LA, you used to have a ton of extremely cheap studio apartments. We're talking $600 for a nice studio apartment with its own bathroom, you had SROs as well which while not luxury apartments, provided housing. But the vast majority of this housing stock was very old and created before there was thousands upon thousands of regulations, for example most apartments in Los Angeles need to be constructed with parking. You have to have a certain amount of outdoor space, etc. So you end up having housing cost twice as much as it really needs to . It's really sad too, because just 15 years ago or so you could have a minimum wage job and afford your own place. Now that's not really obtainable anywhere in the United States. I've met tons of young adults, some even ranging into their 30s who have really bad home lives but can't afford to move out . Solutions to this are often really short-sighted, you have affordable housing units going up which are costing $600 to $700,000 for the city to build. Obviously this just doesn't work so you have a bizarre lottery system just to have a roof over your head. Personally I think the solution would be a combination of subsidized high speed rail and an aggressive rethinking of what a town needs to be. Imagine being able to hop on a high speed train that goes about 150 miles an hour. You could have a community of affordable housing that's a short train ride away from San Francisco, LA, or any other unaffordable city. I've also noticed you have a very bizarre system where many working-class people, rail operators, firefighters, teachers, etc. They have super commutes which are ranging from 1 to 2 hours each way just to get to work.
- pdonis 2y ago
  > Personally I think the solution would be a combination of subsidized high speed rail and an aggressive rethinking of what a town needs to be. I think a big part of the solution is remote work. Uncoupling as many jobs as possible from specific locations changes the game substantially.
  - 999900000999 2y ago
    A lot of jobs can't be done remotely, you can't exactly remotely work as a firefighter.
    - 2y ago
Aloisius 2y ago
Supply is rising. We just have a huge deficit. There are a wide variety of issues at play: high interest rates, localized shortages of construction workers, rising material costs, zoning restrictions, local opposition and years of underbuilding.

stass 2y ago

Land in desirable areas is limited and zoning and other government red-tape prevents high-density housing from being built (or any housing being built period in cases like San Francisco).

violet13 2y ago

New construction is rapidly getting more expensive in many of the markets where it's needed the most. While it'd be cool to point to a single factor, it's a combination of several things. People are expecting more (more square footage, higher-end finish), the government is demanding more (environmental and energy regulations), labor is getting costlier, and yes - there's NIMBYism manifesting through zoning laws and other "conservation" rules.

llamaimperative 2y ago
In high cost-of-living areas it's the land price.
- violet13 2y ago
  Not entirely, but either way, land value is tied to all of that. If the city can't grow due to zoning and conservation rules, and if you can't subdivide existing parcels, you basically have more and more money chasing the same lots. By "not entirely", I mean that while land value often dominates, lowering it doesn't solve the problem, because even if you somehow acquired a city lot for $50k in the Bay Area, you wouldn't be able to build a house on that lot for $100k. So, solving one problem doesn't make it affordable.

llamaimperative 2y ago

Yes all of the above. Landlords lobbying against new development under various guises (environmental, "character", "history"); landlords very cheaply withholding vacant land from use (minimal taxes to pay, no rent to pay, no penalties for vacancy); landlords utilizing zoning regulations to prevent effective use of other people's land

ilikehurdles 2y ago

At the macro level, landlords and property owners stand on one side opposed to developers on the other. Developers are incentivized to add housing supply and the others are incentivized to secure it against competition. Tenants _should_ stand on the side of developers but I’m not sure that’s true in general, given the anti-developer sentiment in some of most dense and progressive cities in America. It’s zoning, it’s environmental review, it’s historic/landmark review, it’s good neighbor agreements, it’s disorganized and/or corrupt permitting departments, etc. All of this gets weaponized against new supply. Ultimately. City electeds answer to voters, not builders, so they get the government they deserve. Some places are building, adding supply, and consequently lowering prices. Austin is a prime example. From JosephPolitano on X: Last year, Austin MSA (population: 2.4M) permitted 21,300 units worth of 5+ unit apartment buildings—more than LA (pop: 12.8M) and SF (pop: 4.6M) combined. San Francisco permitted 1,151 housing units over the last 15 months. Austin permitted 1,248 in January alone. Austin averages 28+ units per day this year. San Francisco has allowed 15 units total in all of 2024.

riku_iki 2y ago
Austin has area for expansion, and SF not much..
- ilikehurdles 2y ago
  And yet its skyline is blowing up with high density replacing low density. Meanwhile California and Oregon are too busy raging against macroeconomic forces with central planning committees and their obstructionist, well-connected nonprofit partners.

rehitman 2y ago

It doesn't always work smoothly, sometimes players can corner the market, or become too big and own both side of development, and rental. That is why we need an agency to look at price fixing, monopoly and stuff like that. In a good system, government doesn't subsidize cost. It just enters whenever the system is broken to work based on supply and demand of market.

999900000999 2y ago

Super duper NYMBys! In LA, you used to have a ton of extremely cheap studio apartments. We're talking $600 for a nice studio apartment with its own bathroom, you had SROs as well which while not luxury apartments, provided housing. But the vast majority of this housing stock was very old and created before there was thousands upon thousands of regulations, for example most apartments in Los Angeles need to be constructed with parking. You have to have a certain amount of outdoor space, etc. So you end up having housing cost twice as much as it really needs to . It's really sad too, because just 15 years ago or so you could have a minimum wage job and afford your own place. Now that's not really obtainable anywhere in the United States. I've met tons of young adults, some even ranging into their 30s who have really bad home lives but can't afford to move out . Solutions to this are often really short-sighted, you have affordable housing units going up which are costing $600 to $700,000 for the city to build. Obviously this just doesn't work so you have a bizarre lottery system just to have a roof over your head. Personally I think the solution would be a combination of subsidized high speed rail and an aggressive rethinking of what a town needs to be. Imagine being able to hop on a high speed train that goes about 150 miles an hour. You could have a community of affordable housing that's a short train ride away from San Francisco, LA, or any other unaffordable city. I've also noticed you have a very bizarre system where many working-class people, rail operators, firefighters, teachers, etc. They have super commutes which are ranging from 1 to 2 hours each way just to get to work.

pdonis 2y ago
> Personally I think the solution would be a combination of subsidized high speed rail and an aggressive rethinking of what a town needs to be. I think a big part of the solution is remote work. Uncoupling as many jobs as possible from specific locations changes the game substantially.
- 999900000999 2y ago
  A lot of jobs can't be done remotely, you can't exactly remotely work as a firefighter.
  - 2y ago

Aloisius 2y ago

Supply is rising. We just have a huge deficit. There are a wide variety of issues at play: high interest rates, localized shortages of construction workers, rising material costs, zoning restrictions, local opposition and years of underbuilding.