4 ms·
America's housing situation continues to be zoning-driven. Cities where the jobs are located constrain housing supply via capricious zoning policies designed sp
by arcticbull 2y ago
America's housing situation continues to be zoning-driven. Cities where the jobs are located constrain housing supply via capricious zoning policies designed specifically to make housing more expensive. It is done to the benefit of existing landowners who vote for them, naturally, as landowners tend to be older, wealthier and voracious voters.
Sure there's plenty of houses in Detroit but you can't commute from Detroit to NYC or the Bay Area.
Single-family zoning was pioneered in Berkeley in 1916 specifically to prevent minorities from moving to white neighborhoods in Berkeley by pricing them out. After the Fair Housing Act passed outlawing restrictive covenants it became one of the most powerful lawful weapons to enforce class and race segregation in cities. [0] Now 96% of all residential land in California, over half of the Bay Area and 2/3 of SF is single-family exclusive zoning. The Bay Area, the single most economically productive place in the entire US has a population density of 600 people per square mile, in line with an average European agrarian hamlet.
Housing is not the only market in the history of the world that is immune to supply and demand. When supply is constrained to below demand, pricing rises to the highest level the market can bear. When supply exceeds demand, prices fall towards the cost of construction.
The premium capricious zoning policy in SF creates is estimated at $400,000 per unit. [1]
I don't understand how progressives took up the mantle of "no more housing thanks we're good, let's just apply rent control" as if rent control actually helps. In the face of an expanding population this is outright regressive policy. Studies in SF show that it reduced supply and increased prices. [2] If you have enough supply, prices don't increase, so you don't need rent control.
[edit] I once again remind readers that the housing market is interstate commerce and the federal government has the power to overturn all these silly zoning shenanigans. Japanese-style federalized zoning is a great way out of this. The Fair Housing Act itself was passed under the justification that housing is interstate commerce via the Dormant Commerce Clause. [3, 4]
[0] https://en.wikipedia.org/wiki/Single-family_zoning https://en.wikipedia.org/wiki/Single-family_zoning
[1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
[2] https://www.gsb.stanford.edu/faculty-research/publications/effects-rent-control-expansion-tenants-landlords-inequality-evidence https://www.gsb.stanford.edu/faculty-research/publications/e...
[3] https://nysba.org/how-the-dormant-commerce-clause-can-fight-zoning-discrimination/ https://nysba.org/how-the-dormant-commerce-clause-can-fight-...
[4] https://www.justice.gov/crt/housing-and-civil-enforcement-cases-documents-192 https://www.justice.gov/crt/housing-and-civil-enforcement-ca...
- zamfi 2y agoZoning also creates this "positive" (in the technical, not social sense) feedback loop, where housing is so expensive that it drives up the cost of any kind of local production, including housing, because labor is (now) the primary driver of construction costs in California. That said, building codes also drive up housing construction costs: originally intended for safety, building codes now also enforce energy efficiency (including window size, insulation, etc.), accessibility, sound transmission, material selection (for reasons other than safety), beyond the usual structural design, electrical/HVAC safety, and fire concerns. This is before we even get to planning codes (i.e., zoning) which has restrictions on lot coverage, etc. that end up causing stronger correlations between land prices and unit costs.
- hypeatei 2y ago> via capricious zoning policies designed specifically to make housing more expensive This coincides with treating housing as an investment. Older generations (even Gen X) will flaunt how great it is that their house went up by X% in the last 5 years. It completely ignores that housing is meant to keep a roof over your head and not be treated as a spreadsheet line item in your portfolio.
- arcticbull 2y agoAh yes, I left that out but it's amazing how people continue to want housing to be both "affordable" and "a good investment" when those are fundamentally antithetical goals. A good investment gets less affordable over time.
- zamfi 2y agoMaybe, but these are primarily antithetical when density doesn't increase. It's totally possible to have housing be "affordable" (i.e., condos, apartments in multi-unit complexes) and "a good investment" -- buildable land close to amenities/jobs/etc. rises in value, and so selling to a developer who will add more units on that land can net the owner a solid profit. The contradiction appears when you want the same units (i.e., SFHs in perpetuity) to be both affordable and appreciate in value.