5 ms·

> Now my question is: why does it look like all cities in the area are colluding against this? What keeps even one city from breaking ranks and allowing massive

> Now my question is: why does it look like all cities in the area are colluding against this? What keeps even one city from breaking ranks and allowing massive amounts of building? The problem is that until all unmet demand at the upper end of the market has been satisfied, builders won't start building at the more affordable ends of the market. If one small city allows more construction, the overall impact on the market will be tiny, this is why the "urban villages" approach doesn't help bring down housing prices, throwing up a few dozen new apartment complexes doesn't help when thousands upon thousands of new complexes are needed.

eru 2y ago
> The problem is that until all unmet demand at the upper end of the market has been satisfied, builders won't start building at the more affordable ends of the market. As outlined in my original comment, I don't see how that is a problem? The whole point is that you can either you can let your real estate developers run wild and make lots of profit (and thus pay lots of taxes) building houses upon houses upon houses without any price drops from over-supply. Or you'll eventually see price drops, and thus more affordability. Btw, back in the old days the complaint was that greedy developers would build sub-par units to make money off poor people. Nowadays the complaint is that greedy developers will only sell nice units to the rich. How times have changed. Any new supply is good. If you don't supply excellent units at the top, you just have rich people outbid the middle class for slightly worse (but still nice) units. And the middle class gets pushed down to outbid the lower class for even worse units. The other way round, adding units at the top allows everyone on the ladder to move up one rung. All the way to the bottom. Developers should just concentrate on whatever's most profitable. > If one small city allows more construction, the overall impact on the market will be tiny, [...] That's the first of the two cases I outlined above. I would also classify that as a (local) success of allowing more housing. Being able to add lots of supply to an over-priced market without that dropping prices, is every suppliers' dream.
- com2kid 2y ago
  > The whole point is that you can either you can let your real estate developers run wild and make lots of profit (and thus pay lots of taxes) building houses upon houses upon houses without any price drops from over-supply. I think we are in agreement that if enough houses are built, price drops will follow. One issue we encountered here in Seattle (or at least we believe we encountered!) is that people move, so when housing got too expensive in California, people moved from California to Seattle where housing was cheaper. Now obviously if California reformed its housing policies, I think they could easily absorb pent up local demand along with some growth. However if a smaller locale like Seattle fixes its housing problems, I worry that Seattle couldn't absorb pent up demand for housing from California. > Being able to add lots of supply to an over-priced market without that dropping prices, is every suppliers' dream. Getting filthy rich is supplier's dream. Most builders (and arguably businesses) are short sighted, but if government policy makes them tons of $ they will still try to claim it was all part of their brilliant long term plan. If every major west coast city replaced its stupid zoning laws with, say, Japan's zoning system (see https://www.mlit.go.jp/common/001050453.pdf https://www.mlit.go.jp/common/001050453.pdf), then prices would come crashing down and everyone would make crap-fuck-tons of money. As a trivial example, on a 10k sqft lot right now in Seattle suburbs, builders are constructing single family homes and selling them for 2 million. With not-idiotic zoning, that could be 6 flats selling at 600k each. Never mind the rules that discourage constructing flats and instead push builders towards making 4 story townhomes.... (Perfect for able-bodied couples without kids who are under the age of 40! And no one else...)
  - eru 2y ago
    > Now obviously if California reformed its housing policies, I think they could easily absorb pent up local demand along with some growth. However if a smaller locale like Seattle fixes its housing problems, I worry that Seattle couldn't absorb pent up demand for housing from California. Are you saying that (A) Californian's won't come, and that's why Seattle won't absorb pent up demand from there? Or are you saying that (B) Californians will enthusiastically come, thereby preventing any price drop? Case (A) means Seattle can solve its own housing affordability problem by allowing more building. Case (B) means Seattle's real estate developers can have an endless boom. > If every major west coast city replaced its stupid zoning laws with, say, Japan's zoning system (see https://www.mlit.go.jp/common/001050453.pdf https://www.mlit.go.jp/common/001050453.pdf), then prices would come crashing down and everyone would make crap-fuck-tons of money. Yes. But my argument is that if just a single town adopted sensible measures, developers could make obscene amounts of money in that city. Especially if the rest of the area persists in their stupidity. So multiple cities finding sanity at the same time might be required to do anything about broader housing affordability in the Bay Area, but for a construction bonanza with insane profits it's actually better for the city that breaks ranks not to have competition from other cities finding sanity. So my question is: why does no single city seem to break ranks?

eru 2y ago

> The problem is that until all unmet demand at the upper end of the market has been satisfied, builders won't start building at the more affordable ends of the market. As outlined in my original comment, I don't see how that is a problem? The whole point is that you can either you can let your real estate developers run wild and make lots of profit (and thus pay lots of taxes) building houses upon houses upon houses without any price drops from over-supply. Or you'll eventually see price drops, and thus more affordability. Btw, back in the old days the complaint was that greedy developers would build sub-par units to make money off poor people. Nowadays the complaint is that greedy developers will only sell nice units to the rich. How times have changed. Any new supply is good. If you don't supply excellent units at the top, you just have rich people outbid the middle class for slightly worse (but still nice) units. And the middle class gets pushed down to outbid the lower class for even worse units. The other way round, adding units at the top allows everyone on the ladder to move up one rung. All the way to the bottom. Developers should just concentrate on whatever's most profitable. > If one small city allows more construction, the overall impact on the market will be tiny, [...] That's the first of the two cases I outlined above. I would also classify that as a (local) success of allowing more housing. Being able to add lots of supply to an over-priced market without that dropping prices, is every suppliers' dream.

com2kid 2y ago
> The whole point is that you can either you can let your real estate developers run wild and make lots of profit (and thus pay lots of taxes) building houses upon houses upon houses without any price drops from over-supply. I think we are in agreement that if enough houses are built, price drops will follow. One issue we encountered here in Seattle (or at least we believe we encountered!) is that people move, so when housing got too expensive in California, people moved from California to Seattle where housing was cheaper. Now obviously if California reformed its housing policies, I think they could easily absorb pent up local demand along with some growth. However if a smaller locale like Seattle fixes its housing problems, I worry that Seattle couldn't absorb pent up demand for housing from California. > Being able to add lots of supply to an over-priced market without that dropping prices, is every suppliers' dream. Getting filthy rich is supplier's dream. Most builders (and arguably businesses) are short sighted, but if government policy makes them tons of $ they will still try to claim it was all part of their brilliant long term plan. If every major west coast city replaced its stupid zoning laws with, say, Japan's zoning system (see https://www.mlit.go.jp/common/001050453.pdf https://www.mlit.go.jp/common/001050453.pdf), then prices would come crashing down and everyone would make crap-fuck-tons of money. As a trivial example, on a 10k sqft lot right now in Seattle suburbs, builders are constructing single family homes and selling them for 2 million. With not-idiotic zoning, that could be 6 flats selling at 600k each. Never mind the rules that discourage constructing flats and instead push builders towards making 4 story townhomes.... (Perfect for able-bodied couples without kids who are under the age of 40! And no one else...)
- eru 2y ago
  > Now obviously if California reformed its housing policies, I think they could easily absorb pent up local demand along with some growth. However if a smaller locale like Seattle fixes its housing problems, I worry that Seattle couldn't absorb pent up demand for housing from California. Are you saying that (A) Californian's won't come, and that's why Seattle won't absorb pent up demand from there? Or are you saying that (B) Californians will enthusiastically come, thereby preventing any price drop? Case (A) means Seattle can solve its own housing affordability problem by allowing more building. Case (B) means Seattle's real estate developers can have an endless boom. > If every major west coast city replaced its stupid zoning laws with, say, Japan's zoning system (see https://www.mlit.go.jp/common/001050453.pdf https://www.mlit.go.jp/common/001050453.pdf), then prices would come crashing down and everyone would make crap-fuck-tons of money. Yes. But my argument is that if just a single town adopted sensible measures, developers could make obscene amounts of money in that city. Especially if the rest of the area persists in their stupidity. So multiple cities finding sanity at the same time might be required to do anything about broader housing affordability in the Bay Area, but for a construction bonanza with insane profits it's actually better for the city that breaks ranks not to have competition from other cities finding sanity. So my question is: why does no single city seem to break ranks?