8 ms·

It's worth nothing that bigger cities in most first world countries generally have more expensive housing, rent or buy. Wages rise in bigger cities, too, but no

It's worth nothing that bigger cities in most first world countries generally have more expensive housing, rent or buy. Wages rise in bigger cities, too, but not as fast as housing prices. Sometimes we're told that it's a natural result of city living, sometimes we're told that without high rise apartment density, it's inevitable. Tokyo has 35 MM people, almost double the second largest first world city (Seoul, 21 MM), and has housing prices to income ratios far lower than London, New York, or Los Angeles. [0] Tokyo has very few high rises, medium density (150/hectare or 40k/mi^2)[1], low traffic, quiet streets, and mostly single family residential homes. What it doesn't have is low density suburbs (everyplace is medium density), mandatory free parking, or a street grid that serves much car traffic. There are eight first world cities over 10MM people and their housing to income ratios roughly run like this: (Middle class people can easily buy homes) Osaka/Kyoto Seoul Mexico City Tokyo (Things start to get really expensive) Paris Los Angeles London New York (Insanely expensive) Japanese zoning has a lot to be proud of. If Nagoya were a smidgen larger, Japan would dominate the liveable and affordable part of the list even more. [0]http://nextcity.org/daily/entry/japan-shows-the-way-to-affordable-megacities http://nextcity.org/daily/entry/japan-shows-the-way-to-affor... [1] SF is about 70/ha incl. parks, Manhattan 260/ha, Paris (20 arrondissements) 210/ha

deleted 12y ago
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maratd 12y ago
> Wages rise in bigger cities, too, but not as fast as housing prices. If you want to lower housing prices, get rid of rent control policies and ease up on the zoning. Developers will create more housing units and you'll see a substantial increase in supply, leading to a lowering of the price level. The problem is that those already living in the city don't want this. They are against new development and they're all for rent control. They want to continue paying artificially low prices, while keeping anyone else who may want to live there out. Just a tad bit selfish.
- liveoneggs 12y ago
  this is false and boston proved it
  - scott_karana 12y ago
    More information please, for those of us who aren't Bostonians?
    - MrFoof 12y ago
      NYT article comparing Boston post-rent-control and New York City: http://www.nytimes.com/2003/06/15/nyregion/when-rent-control-just-vanishes-both-sides-of-debate-cite-boston-s-example.html http://www.nytimes.com/2003/06/15/nyregion/when-rent-control... One of the big complaints about "increasing rents" is more of the matter that low-income rental stock is almost never built, whereas luxury apartments are built constantly (though they have to provide a number of low-income units that are the same quality as everything else in the building). The low-income stock still exists, it's just the most sought after rental stock in the Boston market.
- im_a_lawyer 12y ago
  Not going to happen. My city has no rent control and condo prices are going up 10% a year. Nothing but luxury condos with a mortgage sized maintenance cost for all those useless gyms, pools, doormen and other garbage.
- kjs3 12y ago
  I wish folks who got a B in Econ 101 would quit thinking that class explained all economics everywhere.
cperciva 12y ago
bigger cities in most first world countries generally have more expensive housing This is partly because they're innately more desirable locations -- people are willing to pay more to live in a city with major sports teams, museums, opera houses, universities, shopping centers, etc. housing prices to income ratios The most recent statistics I've seen show Vancouver as having the highest housing price to income ratio; while Vancouver's median housing price is relatively modest (closer to Santa Barbara than San Francisco or San Jose), Vancouver's median household income is quite low (around the same as Minneapolis or Baltimore). Interestingly, if you look at Vancouver's recent housing price trends, you'll see two very different trends: Prices of detached houses have roughly doubled in the past 8 years, while prices of condos have barely kept up with inflation. This makes perfect sense in terms of geography: There is no more land available for detached houses in Vancouver, but condo construction is booming (a few years ago Vancouver had more units of condos under construction than New York).
- seanmcdirmid 12y ago
  Vancouver is a distorted market...Any market that is inudated with Chinese speculators is.
  - Jack000 12y ago
    I don't buy the foreign ownership theory behind Vancouver property prices [1]. My personal theory is that the large Chinese-Canadian population in Vancouver forms most of the demand for overpriced detached homes. Within my family at least, there seems to be an irrational desire to own a home despite renting being a better financial decision. [1] http://www.theglobeandmail.com/news/british-columbia/scant-evidence-behind-myth-of-vancouver-real-estates-foreign-buyers/article9000860/ http://www.theglobeandmail.com/news/british-columbia/scant-e...
    - seanmcdirmid 12y ago
      They might be resident in Vancouver, sure, but the money being used to buy the house is coming from China, often gray money that is responsible for huge distortions in the Chinese market. And they'll go high end, which is why condos are more immune to this. It's not just Vancouver, but you see this in some parts of San francisco and Seattle (well, Bellevue) also.
twelvechairs 12y ago
As always comparing cities is problematic as there is no good way to determine what a city's boundaries are. The economic and transport autonomy/independence of outer areas of each 'city' varies wildly (as well as density). Some of these cities will include vast areas which may be comparable to, but excluded from the other. Zoning alone doesnt solve affordability though (SF is probably the outlier in this case as growth has been constrained for so long). Much of it is down to economic issues and policy. In Japan prices fell drastically from the boom due to large scale debt restructuring which has also led to a decade of stagflation.
- WildUtah 12y ago
  In the US context, boundaries matter because there is a steep density gradient from center to suburb. There is a technique called weighted perceived density to fix the difference and make cities comparable. [0,1] Tokyo, Osaka, Mexico City, Seoul, and (to a lesser extent) Paris don't have steep gradients of density from center to edge and have better defined natural boundaries between urban and rural. The blending in the USA edge cities is the result of heroic subsidy levels and Stalinist command and control zoning and minimum free parking mandate policies. It is not natural or compatible with free markets. The areas I quoted in the USA (NY County, NY and SF County, CA) are very specific and not at all fuzzy. [0] http://austinzoning.typepad.com/austincontrarian/2008/03/perceived-densi.html http://austinzoning.typepad.com/austincontrarian/2008/03/per... [1] http://www.uctc.net/access/37/access37_sprawl.shtml http://www.uctc.net/access/37/access37_sprawl.shtml
Xixi 12y ago
I'm not completely sure it's fair to compare Tokyo or Osaka to the like of Paris. There are two major differences that impact prices: - France population is increasing steadily, while Japanese population is in for a dive. You cannot reasonably expect land prices to soar in Japan like they will in Paris, since going forward there will be less and less people sharing said land. - Earthquakes (and the lack thereof in France). In France anything less than 50 years old is considered new. In Japan a house over 30 years old has negative value, and such properties are priced as follows: price of land minus price of house destruction/removal. If you are sitting on a lot of cash you simply cannot just buy anything in Tokyo or Osaka and wait for prices to rise. So you have much less speculative investments to drive prices up.
- rtpg 12y ago
  the waiting for prices to go up is a consequence of zoning laws. There's pretty much a fixed supply of housing in Paris and a rising population, so people just sit on it. The population point isn't super relevant because people are still moving into Tokyo (for work or school mainly), so Tokyo's actually growing _faster_ than Paris is (http://www.wolframalpha.com/input/?i=population+of+Tokyo+over+population+of+Paris http://www.wolframalpha.com/input/?i=population+of+Tokyo+ove...) The big difference being that almost nowhere in the Tokyo metropolitan area has low-density buildings (compared to people in nicer suburbs on the outskirts of paris with huge housing.) The fact that there are so many old buildings in Paris is also a consequence of making things hard to build in Paris. There's more than enough demand to make obscene amounts of money with a decent sized apartment complex in downtown Paris (if you could build it). It's not like Tokyo is falling over every 10 years to earthquakes. One thing is that houses in some Tokyo suburbs are built like crap, so old houses are falling apart (not building many houses out of stone). I think more recent housing is built more sturdily (not sure though) Anyways, the comparaison is fair, because the prime difference is what we're talking about : Zoning laws. There is nothing magical about Paris which makes it impossible to use the same techniques to solve this problem.
- bemmu 12y ago
  I see a lot of advertising for "earthquake proof" tech to reduce the amount of shaking in houses. I wonder if this 30+ years = worthless thinking in Japan will continue, or if it is just for this generation of houses.
nandemo 12y ago
> Tokyo has 35 MM people, almost double the second largest first world city (Seoul, 21 MM), and has housing prices to income ratios far lower than London, New York, or Los Angeles. What about house size? I looked into the original study linked there [1], and it does have a section about house size, but I couldn't figure out if and how they control for size when calculating the median house price. If they don't control for size, then it's not very surprising that Tokyo scores better than the US cities, given that the median Tokyo house is about half the size of the median US house. [1] http://www.demographia.com/dhi.pdf http://www.demographia.com/dhi.pdf

deleted 12y ago

[deleted]

maratd 12y ago

> Wages rise in bigger cities, too, but not as fast as housing prices. If you want to lower housing prices, get rid of rent control policies and ease up on the zoning. Developers will create more housing units and you'll see a substantial increase in supply, leading to a lowering of the price level. The problem is that those already living in the city don't want this. They are against new development and they're all for rent control. They want to continue paying artificially low prices, while keeping anyone else who may want to live there out. Just a tad bit selfish.

liveoneggs 12y ago
this is false and boston proved it
- scott_karana 12y ago
  More information please, for those of us who aren't Bostonians?
  - MrFoof 12y ago
    NYT article comparing Boston post-rent-control and New York City: http://www.nytimes.com/2003/06/15/nyregion/when-rent-control-just-vanishes-both-sides-of-debate-cite-boston-s-example.html http://www.nytimes.com/2003/06/15/nyregion/when-rent-control... One of the big complaints about "increasing rents" is more of the matter that low-income rental stock is almost never built, whereas luxury apartments are built constantly (though they have to provide a number of low-income units that are the same quality as everything else in the building). The low-income stock still exists, it's just the most sought after rental stock in the Boston market.
im_a_lawyer 12y ago
Not going to happen. My city has no rent control and condo prices are going up 10% a year. Nothing but luxury condos with a mortgage sized maintenance cost for all those useless gyms, pools, doormen and other garbage.
kjs3 12y ago
I wish folks who got a B in Econ 101 would quit thinking that class explained all economics everywhere.

cperciva 12y ago

bigger cities in most first world countries generally have more expensive housing This is partly because they're innately more desirable locations -- people are willing to pay more to live in a city with major sports teams, museums, opera houses, universities, shopping centers, etc. housing prices to income ratios The most recent statistics I've seen show Vancouver as having the highest housing price to income ratio; while Vancouver's median housing price is relatively modest (closer to Santa Barbara than San Francisco or San Jose), Vancouver's median household income is quite low (around the same as Minneapolis or Baltimore). Interestingly, if you look at Vancouver's recent housing price trends, you'll see two very different trends: Prices of detached houses have roughly doubled in the past 8 years, while prices of condos have barely kept up with inflation. This makes perfect sense in terms of geography: There is no more land available for detached houses in Vancouver, but condo construction is booming (a few years ago Vancouver had more units of condos under construction than New York).

seanmcdirmid 12y ago
Vancouver is a distorted market...Any market that is inudated with Chinese speculators is.
- Jack000 12y ago
  I don't buy the foreign ownership theory behind Vancouver property prices [1]. My personal theory is that the large Chinese-Canadian population in Vancouver forms most of the demand for overpriced detached homes. Within my family at least, there seems to be an irrational desire to own a home despite renting being a better financial decision. [1] http://www.theglobeandmail.com/news/british-columbia/scant-evidence-behind-myth-of-vancouver-real-estates-foreign-buyers/article9000860/ http://www.theglobeandmail.com/news/british-columbia/scant-e...
  - seanmcdirmid 12y ago
    They might be resident in Vancouver, sure, but the money being used to buy the house is coming from China, often gray money that is responsible for huge distortions in the Chinese market. And they'll go high end, which is why condos are more immune to this. It's not just Vancouver, but you see this in some parts of San francisco and Seattle (well, Bellevue) also.

twelvechairs 12y ago

As always comparing cities is problematic as there is no good way to determine what a city's boundaries are. The economic and transport autonomy/independence of outer areas of each 'city' varies wildly (as well as density). Some of these cities will include vast areas which may be comparable to, but excluded from the other. Zoning alone doesnt solve affordability though (SF is probably the outlier in this case as growth has been constrained for so long). Much of it is down to economic issues and policy. In Japan prices fell drastically from the boom due to large scale debt restructuring which has also led to a decade of stagflation.

WildUtah 12y ago
In the US context, boundaries matter because there is a steep density gradient from center to suburb. There is a technique called weighted perceived density to fix the difference and make cities comparable. [0,1] Tokyo, Osaka, Mexico City, Seoul, and (to a lesser extent) Paris don't have steep gradients of density from center to edge and have better defined natural boundaries between urban and rural. The blending in the USA edge cities is the result of heroic subsidy levels and Stalinist command and control zoning and minimum free parking mandate policies. It is not natural or compatible with free markets. The areas I quoted in the USA (NY County, NY and SF County, CA) are very specific and not at all fuzzy. [0] http://austinzoning.typepad.com/austincontrarian/2008/03/perceived-densi.html http://austinzoning.typepad.com/austincontrarian/2008/03/per... [1] http://www.uctc.net/access/37/access37_sprawl.shtml http://www.uctc.net/access/37/access37_sprawl.shtml

Xixi 12y ago

I'm not completely sure it's fair to compare Tokyo or Osaka to the like of Paris. There are two major differences that impact prices: - France population is increasing steadily, while Japanese population is in for a dive. You cannot reasonably expect land prices to soar in Japan like they will in Paris, since going forward there will be less and less people sharing said land. - Earthquakes (and the lack thereof in France). In France anything less than 50 years old is considered new. In Japan a house over 30 years old has negative value, and such properties are priced as follows: price of land minus price of house destruction/removal. If you are sitting on a lot of cash you simply cannot just buy anything in Tokyo or Osaka and wait for prices to rise. So you have much less speculative investments to drive prices up.

rtpg 12y ago
the waiting for prices to go up is a consequence of zoning laws. There's pretty much a fixed supply of housing in Paris and a rising population, so people just sit on it. The population point isn't super relevant because people are still moving into Tokyo (for work or school mainly), so Tokyo's actually growing _faster_ than Paris is (http://www.wolframalpha.com/input/?i=population+of+Tokyo+over+population+of+Paris http://www.wolframalpha.com/input/?i=population+of+Tokyo+ove...) The big difference being that almost nowhere in the Tokyo metropolitan area has low-density buildings (compared to people in nicer suburbs on the outskirts of paris with huge housing.) The fact that there are so many old buildings in Paris is also a consequence of making things hard to build in Paris. There's more than enough demand to make obscene amounts of money with a decent sized apartment complex in downtown Paris (if you could build it). It's not like Tokyo is falling over every 10 years to earthquakes. One thing is that houses in some Tokyo suburbs are built like crap, so old houses are falling apart (not building many houses out of stone). I think more recent housing is built more sturdily (not sure though) Anyways, the comparaison is fair, because the prime difference is what we're talking about : Zoning laws. There is nothing magical about Paris which makes it impossible to use the same techniques to solve this problem.
bemmu 12y ago
I see a lot of advertising for "earthquake proof" tech to reduce the amount of shaking in houses. I wonder if this 30+ years = worthless thinking in Japan will continue, or if it is just for this generation of houses.

nandemo 12y ago

> Tokyo has 35 MM people, almost double the second largest first world city (Seoul, 21 MM), and has housing prices to income ratios far lower than London, New York, or Los Angeles. What about house size? I looked into the original study linked there [1], and it does have a section about house size, but I couldn't figure out if and how they control for size when calculating the median house price. If they don't control for size, then it's not very surprising that Tokyo scores better than the US cities, given that the median Tokyo house is about half the size of the median US house. [1] http://www.demographia.com/dhi.pdf http://www.demographia.com/dhi.pdf