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This paper primarily considers house prices and quantities in terms of single-family homes. They use data sources like the single-family repeat-sales index and

• no_wizard 2y ago
  I also don't see a detailed run down in the paper of zoning laws and other local regulations and how that contributes to cost. They looked at a lot of top level numbers (from what I could tell) without diving into the specifics. Zoning laws while not completely uniform, do seem to follow patterns across the country. The long and short of it is, the more desirable some place is to live, the more restrictive zoning laws and harder it is to get approval for builds and it depresses housing inventory over time.
  • llamaimperative 2y ago
    All of which, they argue, ends up not predicting the movement of prices. Meanwhile, simple income level does predict the movement of prices.
    • GoatInGrey 2y ago
      Doesn't that seem like a given? That people without the incomes to afford housing in a given locality don't own housing there?
      • kulahan 2y ago
        No. It’s a given that people without the incomes to afford housing won’t enter that locality, but many could remain from before it was a popular place to live. Gentrification actually only affects a very small percentage of people who end up refusing to sell and holding out until they cannot afford anymore. But the point remains that a 90 year old living on Social Security could potentially own a million dollar home.
        • jlhawn 2y ago
          > Gentrification actually only affects a very small percentage of people who end up refusing to sell and holding out until they cannot afford anymore. In California, gentrification almost never affects long time homeowners. Once you pay off your mortgage, your only housing costs are maintenance and property taxes which are highly subsidized thanks to Proposition 13. However, renters who make up 44% of all California households very often do experience increasing housing price pressures which drives them to move to lower cost (and lower opportunity) areas. Some municipalities have tight rent controls, but most do not. There's a state law which prevents rent increases in older units above 5% plus inflation but that is still an allowable rate which quickly outpaces income growth. I happen to like some rent controls but I'm not saying that universal rent controls are a solution here. There just has to be some explanation for why housing construction costs seem to grow just as fast as housing prices in general. If housing prices are growing faster than wages and the producer price index for materials then it cant just be construction labor and materials! What I am alluding to is that there is simply a lack of locations which are able to be developed into new housing. Sometimes that's onerous land use constraints, very long project entitlement and permitting timelines which increases financing costs, local taxes/fees or exactions on development, or some combination of all of these!
          • bombcar 2y ago
    • no_wizard 2y ago
      It predicts movement in policies. As neighborhoods get wealthier, they trend toward regulatory capture. Zoning laws get more onerous, building codes get more restrictive (ever wonder why you don't see 25 story condominium complexes for example?) and the cost of entering the neighborhood is artificially inflated as a result. They correlate, but it itself is not the cause in the sense that income levels directly cause housing prices to go up. What they do enable though, is as folks become wealthier they tend to also spend more time lobbying for these types of city regulations to preserve their home values. They spend more time on this as the income bracket goes up. Couple this with the fact that wealthier home owners tend to be older, they often have more time relative to others in many respects to lobby consistently for the status quo. The issue I have with the report is it takes none of that into account, and instead takes the correlation (that income rising === higher home prices) without looking more closely at what happens as the income trend goes up.
      • potato3732842 2y ago
        >It predicts movement in policies. As neighborhoods get wealthier, they trend toward regulatory capture. Zoning laws get more onerous, building codes get more restrictive (ever wonder why you don't see 25 story condominium complexes for example?) This. Once people are rich enough to have no real problems the setback of someone else's shed on someone else's land and the spacing of outlets in the walls of other people's houses suddenly start looking like things worth caring about, all of which drives down the efficiency by which dollars can be converted into use of land. >and the cost of entering the neighborhood is artificially inflated as a result. Worse, it's a feedback loop. High cost of entry means only more of the same will enter
        • no_wizard 2y ago
          >This. Once people are rich enough to have no real problems the setback of someone else's shed on someone else's land and the spacing of outlets in the walls of other people's houses suddenly start looking like things worth caring about. Worse yet, the seeming backbone of the US real estate market is that homes are your biggest investment. They're seen as both a place to live and an asset that is a portion of your net worth. For it to be both, means owners will always incentivize the asset increasing in value and as we see, the result is most home owners will fight zoning de-regulation tooth and nail. Its worth noting that this is true regardless of which political party is in power locally, assuming we're talking about the US. As a result land use reforms are some of the hardest to get through legislatures in the US. For example, it took years for California to pass a law that simply allows people to rent secondary dwellings on their property, and this was heralded as a big deal because it usurped local regulations banning such practices. Keep in mind, this does relatively little to move the needle on real estate pressures (there's only so many places that have excess capacity of this nature to begin with and there aren't a ton of incentives to create more, as the law is still limited in a variety of ways). This took many years to get through, and its a very very very small reform! I am both a land owner (I have a niche farming operation, but don't live on that land) and a home owner, and I find this obsessive behavior among other land/home owners to be misguided at best and appalling at worst. The simple truth is it can be either an asset or a commons good, but it really can't be both. Thats a major part of the issue to begin with, and why I'm an advocate for the Land Value Tax
    • xhkkffbf 2y ago
      In my experience, a huge number of people spend the most they can on housing. So the local price level is set by the local income distribution. Their observation lines up perfectly with my experiences. This also suggests two solutions that are bound to be unpopular: * To make housing prices more reasonable, give everyone a pay cut. * Trying to set a "living wage" is futile since boosting income will feed right through to the price of housing.
      • zamfi 2y ago
        Why doesn't it feed through to the price of food? Of vehicles? Of energy? It only feeds through to the price of certain classes of goods: housing, healthcare, education. Those are also "markets" that are artificially supply-constrained, through zoning, the AMA, and accreditation. To be clear, I'm not saying that we should get rid of zoning, the AMA, and accreditation—but we should be much more careful to avoid use of those tools to curb supply.
        • llamaimperative 2y ago
          Food, vehicles, and energy all have elastic supply. Higher prices induces more supply. This is not the case with land.
          • zamfi 2y ago
            > This is not the case with land. Not with that attitude! Kidding aside, most people looking for housing aren’t buying land, they’re buying housing — which absolutely does not have elastic supply by policy, not by natural law.
            • llamaimperative 2y ago
              Well, they are buying land because housing exists on land. As discussed elsewhere in the thread, if you make the housing upon that land more elastic (e.g. by loosening zoning restrictions), that elasticity pretty much immediately gets baked into the price of land itself. This is so significant an effect that there is a highly lucrative business in simply buying low-density zoned land and going through the entitlements to turn it into a high-density zone. This does not just generate a free lunch for a developer to build more units on the same plot of land at the same price, it makes the land instantly more expensive.
    • appreciatorBus 2y ago
      The most common reason the simple income level of a region changes is that increasing housing costs push lower income people out, meaning the simple income level is only measuring those who remain.
      • llamaimperative 2y ago
        Except that the order of events goes the other way
• cycomanic 2y ago
  > This emphasis on single-family homes in their data sources affects the generalizability of their conclusions about the impact of supply constraints across different types of housing markets, especially in dense urban areas where multi-family units and rentals are more prevalent. But that's what people are typically complaining the most about, so fair enough that they focus on it. > They also only go as far back as 1980. The difference between supply constraints between 1980 and 2025 is very small compared to the difference between 1965 and 1980. Take Los Angeles as an example [1]. The zoned capacity of many metro areas was dramatically reduced by the mid 1970s. That' supports their point though, if the supply constraints differences have been small between 1980 and 2025, but the house price increase has been large, then supply constrains can't really explain house price increase? Or am I misunderstanding your point?
  • jlhawn 2y ago
    From the abstract: > These results challenge the prevailing view of local housing and labor markets and suggest that easing housing supply constraints may not yield the anticipated improvements in housing affordability. If their finding is that increases in incomes leads to increases in demand which then increases prices, that’s not surprising. But their claim is that reducing artificial constraints (onerous land use regulation, discretionary entitlement and permitting, etc) would not have any impact on the supply curve. That’s highly suspect. To make a plainly true statement which sounds similar to the paper title, "Increasing Incomes Coupled With Supply Constraints Explain House Price and Quantity Growth Across U.S. Cities." Spot the difference.
    • deleted 2y ago
      [deleted]
    • throwaway545673 2y ago
      No, it just means that removing supply constraints doesn't increase supply (enough) relative to demand.
• h0l0cube 2y ago
  > rental markets Specifically because the paper is about house price, not rental price. For most people, the issue of achievable secure home ownership is different to rental affordability. > multi-family housing units Not really the kind of place that most people want to buy to live in for the remainder of their lives (unless starved of options).
  • oblio 2y ago
    > Not really the kind of place that most people want to buy to live in for the remainder of their lives (unless starved of options). This is such a true, yet sad, reflection of American society.
    • h0l0cube 2y ago
      > yet sad Doesn't everyone want to touch grass or have decent access to fresh air and sunlight? I guess if we could hypothetically build really cheap apartments deep underground, it would be sad if people didn't want to live there?
      • guhwhut 2y ago
        [dead]
        • h0l0cube 2y ago
          > Your straw man here is absurd. I've lived in an apartment for a few years, and those were issues for me. The stumbling block of having to wait for an elevator and walk across roads to get to a park was enough to stop me from going. It's not the same as simply walking outside the door. Other apartment buildings blocked out natural light, even onto the park, and I had just a view to one side of the building. All this in a city that had terrible weather to begin with.
          • oblio 2y ago
            HackerNews, the bastion of logic. First of all, not having the energy to wait for an elevator (!!!) and walk across roads to get to a park sounds like depression. I hope that it was checked out. Or hey, maybe it was just the living circumstances but usually it's a complex thing, having to do with loneliness and general life issues. Secondly, urban environments are very varied outside the US. In Europe the most frequent apartment buildings are mid rises, 4-6 stories high, which can make for incredible environments. Shops everywhere, life everywhere. People going about their business, easy access to everything. Thirdly, that "touch grass" argument is ridiculous, even in the US. 90% of front and backyards I've seen are... just grass. I don't know if it's due to people or HOA being cheap or regulations, but there's a dearth of shrubs, hedges, trees, general greenery. You know, the type of green stuff that makes life worth living, not just sterile, manicured lawns. And those are exactly the things that aren't missing in most urban parks. Yes, you have to share the space, and that's fine. In most places not overrun by homeless people and drug addicts (much bigger problems in the US than in most other developed countries), parks are just lovely. And in many places multiple apartment buildings share the same common backyard, which is a lot larger than what a single family home in a suburb will have, and that will be a semi-private mini park, just for residents. Behaving like it's crazy for people to want to live in apartments, globally, is truly sad. Apartments don't require as much maintenance. They can offer nicer views, especially higher up. They are generally in walkable and bikeable areas with easy access to everything... The benefits are innumerable, especially for kids or the elderly. Edit: Oh, North America is particularly dastardly, for a developed region, in creating urban hell landscapes. I tried walking from the Las Vegas Strip to Downtown Las Vegas. I took the monorail to the end and then figured I'd walk the remaining distance, which is not huge (something like 4km). I turned around after about 20 minutes, even though the weather was awesome. It's incredibly how such wealth can create environment were an average person outside of a car is constantly under assault from noise, pollution, bad sidewalks full of debris, glass, etc. and the environment is so barren and devoid of beauty.
• isuckatcoding 2y ago
  [flagged]
  • jlhawn 2y ago
    this is actually just several different comments I made on Bluesky yesterday about this paper, but I combined them into one comment here so that's maybe why it's a little weird. https://bsky.app/profile/josh.hawn.xyz/post/3lkopsdsxis2j https://bsky.app/profile/josh.hawn.xyz/post/3lkopsdsxis2j
• throwaway545673 2y ago
  There has just never been much reason to believe that supply constraints were the primary driver of housing price increases. If they were people would have moved, or somewhere would have ended up being a lot better. It used to be that housing costs tracked incomes. If you had a medium to high salary you had decent housing. Since the 90s with urbanisation and increased wealth not only do more people want to live in the same places but some have a lot more to invest. So you now need high wealth to have decent housing. What many really want is housing below market rate so they either don't have to work thier entire lives or can also become wealthy, and preferably both. Which is understandable but not realistic. Anyone who doesn't believe this should note that this has already been discussed on HN for at least 10 years and still hasn't been solved anywhere I know of globally. But instead still roughly tracks local wealth (and income). And will likely continue to do so. Because that is what the housing market does. Allocates valuable assets to those who pay the most. Nowhere on the tin does it also say that it promotes social mobility or equality. Maybe it should, but it certainly won't as long as there is the idea that it already does. That said, is there some effect of supply constraints? Sure. But ultimately it would increase urbanisation, making the situation worse. Affordable housing is already available on the market. Just in places with lesser jobs and living conditions. Which again it is understandable that many don't want to live in. But it isn't a market issue.
  • jlhawn 2y ago
    > If they were people would have moved, or somewhere would have ended up being a lot better. sorry, I am not going to bother reading the rest of your comment before writing this reply because reading this part stopped me immediately. Gentrification and displacement has been a growing issue for decades. Especially in California, people who grow up here can't afford to stay here and end up moving from high cost coastal areas to exurbs in the central valley or inland empire or just leave the state entirely for places like arizona, nevada, texas, or beyond. These are the places that have been growing most over the past couple of decades. Population in the high-cost areas may be increasing too (or at least staying the same) but that's because higher-income people who can afford it are willing and able to move there.
    • 2y ago
• WalterBright 2y ago
  That's why economics is the dismal science - it is impossible to isolate the variables.
  • milesrout 2y ago
    No it is why malicious research designed to mislead is useless. This research was done with the goal of reaching a particular conclusion, clearly. You can do that with any subject.
• AStonesThrow 2y ago
  There are some really interesting supply issues here at the level of multifamily tenant. Now imagine you're a landlord with 500 units and they've all got the same appliances and fixtures. To keep everything in repair for 40 years or so, you'll need a consistent supply chain of all the parts that are ever going to break and be replaced: toilet flush mechanisms, handles, switches, motors in fans, grilles and plates, the shelves in the fridge or range. You name it. And rental tenants can be especially hard on fixtures we don't own. Every time I clean something I manage to also break something, I guess. It's embarrassing. When I moved in, I felt like I had thoroughly inspected, and the landlord graciously replaced+upgraded nearly every AC outlet and everything was like-new. But long, long afterwards I noticed that pieces and racks were missing from both the range and fridge, and prevented me from maximizing their usage. But landlord is unable to replace stuff like that for everyone. When a few things broke around here, I decided to DIY and rocked up to some hardware-supply websites and my local store. Come to find out, these items are special MFH brands, and ordinary mortals cannot obtain them at any price, or they're simply "always sold out" on the open market. And just think about all that's been discontinued or deprecated in 40+ years and landlords trying to conserve the costs of ripping out and replacing HUNDREDS of instances of those because they've become unmaintainable. Now think about landlords who install Amazon Ring or some cloud-based crap with planned obsolescence. SFH owners can replace appliances and fixtures at a whim, at least more readily than a landlord could, and the costs are all pushed directly to the consumer in SFH cases, so a homeowner should be as savvy in order to map out their long-term maintainability. And I realized that it would be a disservice to landlords if tenants could indeed DIY, because we'd stop reporting damage or breakage to the office, and self-repair can be horribly detrimental, and landlords have a right to know what's going on with their fixtures and appliances. So I was rather relieved to find out that I simply couldn't replace parts at my own expense.
• dionidium 2y ago
  > This emphasis on single-family homes in their data sources affects the generalizability of their conclusions about the impact of supply constraints across different types of housing markets, especially in dense urban areas where multi-family units and rentals are more prevalent. People generally seem to struggle with the fact that it's the land, not the house that's on top of it, that's valuable in desirable metro areas, but this reality suggests something really quite lucky, which is that eliminating land-use restrictions probably won't tank single-family housing prices, even as it lowers rents. Incumbents get richer, because looser zoning rules mean the land is more valuable. Renters and those who otherwise couldn't afford to be incumbents get cheaper rent. It's a fortuitous win-win.
  • jlhawn 2y ago
    yeah but one of the reasons why land value for single family homes is even higher is due to the zoning constraints which cause what I like to call "land value spillover" effects. Land value in suburbs an hour from a city center is higher than it naturally would be because zoning constraints closer to the city center cause housing demand to spread out across a larger geographic area. To give an example in the bay area, the cities of Livermore and Concord primarily exist in the form and population they do today because more homes could not be built closer to the core of the bay area, not to mention places like Antioch, Brentwood, and Tracy.