4 ms·

What do you do when that equilibrium point is hopelessly above what the average person can afford?

wiradikusuma 7mo ago
Won't the market fill the gap? For example, in Indonesia, "standard size" houses are mostly out of reach for new buyers (young generations), so they build houses farther away and/or smaller.
pinkmuffinere 7mo ago
there are many things you can do, but essentially you want to make it profitable for builders to make houses at a lower price point, or give the average person more money. Some approaches (not all of which I'm endorsing): - reduce restrictions around planning / construction / etc (because it takes time and expertise to comply, both of which cost money) - find a way to bring in cheaper labor, or make it possible for construction companies to hire the same labor at a lower price. Maybe a subsidy, maybe reduced taxes, maybe relaxed labor laws - add a subsidy for homes - make your citizens more wealthy, so the price is no longer above their means - outsource construction to a place that can build it more cheaply (eg, prefab homes)
- locknitpicker 7mo ago
  > - find a way to bring in cheaper labor, or make it possible for construction companies to hire the same labor at a lower price. Maybe a subsidy, maybe reduced taxes, maybe relaxed labor laws It's far easier than that: just have your regional/local government finance urban renewal projects that increase occupation density. You can even tie the project to the expansion of a public transportation system.
tirant 7mo ago
That means there’s an invisible hand keeping prices up, or basically that the market is not free enough. That’s caused most of the time due to excessive regulation. Another reason is high demand in locations where offer is limited due to physical limitations. There’s always demand to live in Broadway, and offer can never catch up due to its physical limitations.
- locknitpicker 7mo ago
  > That means there’s an invisible hand keeping prices up, or basically that the market is not free enough. That’s caused most of the time due to excessive regulation. No. Why do you guys fall so easily for the "regulation" cliche? The answer is far easier: unwillingness to invest. Why are there investment funds willing to burn through tens of millions in stupid stuff like NFTs or pets.com, but investing $10m on a 5 story apartment building that can get you a solid RoI of 20% is frowned upon?
  - otherme123 7mo ago
    Why the investment funds have to build the houses? Houses has been built/funded from zero by the future owners since forever, either individually or through cooperatives. That way, "investors" don't need a positive ROI, and they happily lose money overall if they get a home. I know some people that are currently "willing to invest" in buying a ship container or two and transform it into a house to get costs down. The problem? Regulations don't allow them to put the container in their own property.
    - Dylan16807 7mo ago
      Using a shipping container is almost always a stupid plan compared to just putting up some wood. As much as I want to make zoning more flexible, I'm not in a rush to change that particular regulation.
      - otherme123 7mo ago
        Sounds arrogant to block someone else plan to have a home, just because you don't like it. And then claim regulations are not the problem, but lack of willing to invest. If you think containers are a bad idea, don't buy one.
        Dylan16807 7mo ago
        The demand for containers is rare and they don't really save money over building small out of reasonable materials. That specific regulation isn't blocking anyone from having a home.
CalRobert 7mo ago
Remove parking minimums and work to address inequality? If that the case in Austin though?
- dnautics 7mo ago
  it isn't
mchusma 7mo ago
Not sure I buy the premise. Austin has a household $133k median income with a $435k median home price. It’s very affordable. But, to make Austin more affordable still, you make it less expensive to build so that it’s profitable to build. Typical regulations that do this are: - Lower minimum sizing requirements - open zoning - raise height limits - make sure you don’t have unwarranted restricted fire codes (some places have elevator stairwell requirements that are insane) - make permitting easier or not required at all for some cases - no min parking requirements Pretty sure as good as Austin is, they could easily reduce the costs by up to 30% (there are parts of the country with 50% the cost per sq ft for new construction).
inglor_cz 7mo ago
Where does this happen, in presence of a reasonably free market? I can only think of extremely land-limited places like Monaco and Gibraltar. Where the answer is "not everybody should live in Gibraltar". But the US has a lot of land. So much land that it can afford wasting it on endless sprawl of single family homes, which is the least efficient way of providing housing. Most Asian megacities would not be able to exist if they had as strict zoning principles as the US has. Maybe you should also think about barriers such as "bans on boarding houses". This is what messes with poor people the most. A room in a house full of rowdy individuals sucks, but it is still a room. Possibly you may spend just a year there, then find something better. A tent in an encampment of rowdy individuals is strictly worse on all accounts except cost, and bouncing back from that is harder.

Won't the market fill the gap? For example, in Indonesia, "standard size" houses are mostly out of reach for new buyers (young generations), so they build houses farther away and/or smaller.

pinkmuffinere 7mo ago

there are many things you can do, but essentially you want to make it profitable for builders to make houses at a lower price point, or give the average person more money. Some approaches (not all of which I'm endorsing): - reduce restrictions around planning / construction / etc (because it takes time and expertise to comply, both of which cost money) - find a way to bring in cheaper labor, or make it possible for construction companies to hire the same labor at a lower price. Maybe a subsidy, maybe reduced taxes, maybe relaxed labor laws - add a subsidy for homes - make your citizens more wealthy, so the price is no longer above their means - outsource construction to a place that can build it more cheaply (eg, prefab homes)

locknitpicker 7mo ago
> - find a way to bring in cheaper labor, or make it possible for construction companies to hire the same labor at a lower price. Maybe a subsidy, maybe reduced taxes, maybe relaxed labor laws It's far easier than that: just have your regional/local government finance urban renewal projects that increase occupation density. You can even tie the project to the expansion of a public transportation system.

tirant 7mo ago

That means there’s an invisible hand keeping prices up, or basically that the market is not free enough. That’s caused most of the time due to excessive regulation. Another reason is high demand in locations where offer is limited due to physical limitations. There’s always demand to live in Broadway, and offer can never catch up due to its physical limitations.

locknitpicker 7mo ago
> That means there’s an invisible hand keeping prices up, or basically that the market is not free enough. That’s caused most of the time due to excessive regulation. No. Why do you guys fall so easily for the "regulation" cliche? The answer is far easier: unwillingness to invest. Why are there investment funds willing to burn through tens of millions in stupid stuff like NFTs or pets.com, but investing $10m on a 5 story apartment building that can get you a solid RoI of 20% is frowned upon?
- otherme123 7mo ago
  Why the investment funds have to build the houses? Houses has been built/funded from zero by the future owners since forever, either individually or through cooperatives. That way, "investors" don't need a positive ROI, and they happily lose money overall if they get a home. I know some people that are currently "willing to invest" in buying a ship container or two and transform it into a house to get costs down. The problem? Regulations don't allow them to put the container in their own property.
  - Dylan16807 7mo ago
    Using a shipping container is almost always a stupid plan compared to just putting up some wood. As much as I want to make zoning more flexible, I'm not in a rush to change that particular regulation.
    - otherme123 7mo ago
      Sounds arrogant to block someone else plan to have a home, just because you don't like it. And then claim regulations are not the problem, but lack of willing to invest. If you think containers are a bad idea, don't buy one.
      - Dylan16807 7mo ago
        The demand for containers is rare and they don't really save money over building small out of reasonable materials. That specific regulation isn't blocking anyone from having a home.

CalRobert 7mo ago

Remove parking minimums and work to address inequality? If that the case in Austin though?

dnautics 7mo ago
it isn't

mchusma 7mo ago

Not sure I buy the premise. Austin has a household $133k median income with a $435k median home price. It’s very affordable. But, to make Austin more affordable still, you make it less expensive to build so that it’s profitable to build. Typical regulations that do this are: - Lower minimum sizing requirements - open zoning - raise height limits - make sure you don’t have unwarranted restricted fire codes (some places have elevator stairwell requirements that are insane) - make permitting easier or not required at all for some cases - no min parking requirements Pretty sure as good as Austin is, they could easily reduce the costs by up to 30% (there are parts of the country with 50% the cost per sq ft for new construction).

inglor_cz 7mo ago

Where does this happen, in presence of a reasonably free market? I can only think of extremely land-limited places like Monaco and Gibraltar. Where the answer is "not everybody should live in Gibraltar". But the US has a lot of land. So much land that it can afford wasting it on endless sprawl of single family homes, which is the least efficient way of providing housing. Most Asian megacities would not be able to exist if they had as strict zoning principles as the US has. Maybe you should also think about barriers such as "bans on boarding houses". This is what messes with poor people the most. A room in a house full of rowdy individuals sucks, but it is still a room. Possibly you may spend just a year there, then find something better. A tent in an encampment of rowdy individuals is strictly worse on all accounts except cost, and bouncing back from that is harder.