Welcome to the Future: Middle-Class Housing Projects | Hacker News Reader

Welcome to the Future: Middle-Class Housing Projects

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61 pointssaeranv65 comments

It's self-evident why the middle class can't outbid rich families for single family homes near employment centers: the rich have more money and they want to live there too. But for dilapidated homes that are ready to be torn down, the strategy for outbidding the rich is clear: rich families who want to build a big home with a big yard can be outbid by several middle class families who are willing to live in smaller homes with smaller yards.

The problem is that we've made it illegal for the middle class to outbid the rich. Single family zoning laws have always been intended to segregate people by income, but the economics of urban growth have made the middle class the victims of the segregation laws they've always supported.

The effects are most egregious in high employment areas with predominantly single family zoning, like Silicon Valley, Seattle, and Austin, where I live. In Austin, the vast majority of the city is blanketed with laws that make it harder for the middle class to outbid the rich than any city in Texas. Where Houston allows four families to build homes to outbid the rich, Austin only allows one. It's no surprise that we're the most economically segregated city in the country[1], and the only growing city that has a shrinking black population[2].

We must fight to desegregate our cities. The middle class is suffering not because they can't afford to outbid the rich, but because it's illegal to outbid the rich.

[1] https://www.texastribune.org/2015/02/23/austin-most-economic...

[2] http://kut.org/post/austins-population-booming-why-its-afric...

I wonder if anyone could have standing to sue a municipality to change the zoning laws on these grounds, under the civil rights act.

This has been done before with cities who were more egregiously discriminatory with their zoning, as I mention in the long form of this argument[1]. I don't know what hurdles are in the way of using the courts to end this subtle segregation, but we should definitely find out and make it happen.

Economic segregation is the whole point of density-based zoning. It is widely supported by property owners. If we can't convince them that they are beneficiaries of unjust laws, then the courts are our best option.

[1] https://medium.com/@niranbabalola/we-must-repeal-our-segrega...

I think we are already convincing people with the cultural benefits. Who doesn't want to live in a neighborhood where the people who defined that neighborhood are still around as your neighbors, to be together in public places and share in the uniqueness of your home together. I believe the homeowners of this generation do want this.

Yuma Az was just successfully sued for zoning laws under the fair housing act. http://www.citylab.com/housing/2016/04/court-decision-on-dis...

Another group is trying to sue Lafayette, Ca http://www.citylab.com/housing/2015/09/suing-the-suburbs-ove...

Edit: fixed first link

That's because Houston has no zoning.

Zoning by use (residential, commercial, industrial, etc.) is just one of many land use tools. There are tons of rules in Houston about how much land you need for a building and what you can actually build, as well as restrictive covenants in individual deeds that limit what can be built.

We don't need to eliminate zoning, but density-based zoning is guaranteed to cause economic segregation. That's what it's for. We should eliminate it in our central cities and employment centers.

http://tinyvillages.org

>"Single family zoning laws have always been intended to segregate people by income"

That is completely unfounded.

I haven't found a citation on this, but I'm pretty confident that the folks who gave us explicit racial segregation said some pretty terrible things about poor people that I'll be able to cite. Unfortunately, the time I can spend on this is limited.

Whether or not it was the intention, that's been the effect. In a small town I grew up in, a commuter train line was installed and the place started to grow. They implemented minimum two acre lot sizes for all new construction; not many can afford such a huge lot, nevermind building the house afterwards.

We must fight to desegregate our cities. The middle class is suffering not because they can't afford to outbid the rich, but because it's illegal to outbid the rich.

No: The middle class is suffering because it's illegal to building housing for them. See http://jakeseliger.com/2015/09/24/do-millennials-have-a-futu... or The Rent Is Too Damn High http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp....

If you restrict the supply of a good in the face of increasing demand, prices rise. The rest is commentary.

We're saying the same thing. I've found that it's harder to convince people when I talk about buildings and economics, so I talk about the families our laws prevent from living in our neighborhoods.

Great write up on the subject Jake. Sadly, I think your hypothesis that emotional arguments will always drown out rational ones is correct.

Too many of the self-described progressives in places like Seattle and San Francisco are too entrenched to admit that market forces (or more accurately, the resistance of them) is the real problem.

You're violently agreeing. The point is, you take a large lot, you could build a condo building on it with five units, or you could build a large SFU. The OP's argument is five middle class people could outbid the rich guy. Except that the condo is illegal, the area is zoned for single family.

Another issue here is the wealth disparity. I think your typical millionaire could easily outbid five middle class families or even ten middle class families.

> Another issue here is the wealth disparity. I think your typical millionaire could easily outbid five middle class families or even ten middle class families.

They often could, but would they choose to? Less trivially.

Assuming they did not have to abide by height restrictions, why wouldn't they?

Austinite too. It's a mess that's growing out of control, but thankfully I find the suburbs more attractive as I age.

Huge issue is that the real estate market is growing faster than wages are. So you need to be able to throw down serious cash if you want in. I'm of the conclusion that you either better hustle hard and make a ton of money or move further out and schedule your commute accordingly. It's not going to change nor will the counsel fix it.

I personally think that Central areas have reached bubble status. Total dumpster fires going for nearly a million? Might as well move to the ocean for that much!

Anyway, I honestly don't think it's worth fighting. If you want in, the better solution is figuring out how you're going to get 200k cash in your bank account without devastating your life, and fast. Otherwise rent all your life, or see ya in Leander. Pick one.

I can afford to buy in central Austin. We should fight for those who can't. This is a battle that can be won, and if you're interested in helping, join Friends of Austin Neighborhoods, a group of individuals and neighborhood associations who love their neighborhoods and want to share them with others.

http://www.atxfriends.org/

Much of Silicon Valley is actually zoned multi-family. The big problem here is height restrictions, not single vs. multi-family.

While I mostly agree with the context of what you are saying... Austin was segregated long before we had zoning or high paying tech jobs.

As for the shrinking population of black people I believe this is more due to culture than anything. Austin never has had a very large black population and as I said always been quite segregated. The culture in Austin is and has always been very white compared to cities that were much larger like Dallas and Houston. My friends that have moved away due to this have told me they just don't feel like there are enough places for them to go to on Friday/Saturday night. For us white folks there is an insane amount of things to do culture wise, especially if you are into music.

Also Austin never had jobs compared to other large metros in Texas until the tech jobs came. You either worked at the State, UT or pretty much waited tables.

One other thing. The bay area interestingly has hills much like Austin. This surely has to do with high cost of housing in specific areas. The closer you get to the hills the more it cost to live. Now with the number of people moving here the center of town gets more unaffordable. If the amount of people moving here continues I don't think multi use housing can fix this fast enough.

Palo Alto is utterly stupid, and here's why: The last time a multi-unit building (ie. Apartments) were built in PA was in the 70s. They haven't approved one since, despite many hundreds of applications to build such things since then.

The middle class don't need subsidies, they need affordable housing. The best way to get that is to let people build affordable housing.

It's the same as with SF -- the city won't let people build to meet demand. You don't get to complain about the high price and then not let someone who wants to fix it actually fix it.

I've related this story before on HN, but it's good enough to share:

When I went and saw the new Wrath of Khan with my brother (now in Portland, at the time he was the Inner Richmond in SF), he surprised me when he told me what was most fantastic to him about the movie. It was not the space aliens, the faster than light travel, the giant spaceships, Cumberbatch's acting, no. To him, the most fantastic part was that there were highrises in SF. Space monsters? Sure. A sensible housing board? Woah buddy, you just crashed my suspension of disbelief!

Palo Alto is ridiculous. I saw firsthand how hard the residents went to the mattresses to protest a 17-unit senior housing development because they were worried about "increased urbanization." Jerks.

>the best way to get that is to let people build affordable housing.

Can you name an example of where this actually happens? I've never seen affordable housing built unless it was mandated by law or had some sort of government subsidy.

Even out here in tiny flyover midwest cities, where developers have no restrictions of any kind , there's no affordable housing being built that isn't government mandated or subsidized.

Lots of new developments, all 100% luxury apartments, or luxury homes. I wish it was as simple as "let them build it", but experience has taught me that if you let developers "just build", the only thing they ever build is impossibly expensive luxury units.

I meant that when supply meets demand, all housing will be affordable.

But even barring that, you can still do it with only limited mandates. You can put a limit on a property that says the rent can only be X% of the median, and as long as it's possible to build housing for that price, someone will build it and make a profit on it.

One example of no restrictions working out is (was) the city of Berkeley. In 1997 they got rid of rent control. All of a sudden, tons of new buildings went up, and at first rents were very high, but then they stabilized. It all got ruined in the last year when people in SF started to move to Berkeley in droves and shove out the students, but that's really SFs fault, not Berkeley's.

I doubt the people who are complaining that they can't afford housing are the same people who prevent multi-unit buildings from being built.

The bay area is screwed. I moved to Portland and never looked back

If you SV types keep moving to Portland, it's just going to be another SF housing debacle.

Perhaps Portland can learn from SF's mistake, and actually allow massive building of new housing if there's a spike in demand.

But then it wouldn't be "Portland" any more, just some terrible city full of huge ugly housing projects (or so the argument goes).

I've never seen a single example of this idea working.

I've seen this idea lead to higher rents, with fewer people owning and more people renting.

I've seen it lead to developer hand-outs in the name of tax incentives, zoning variances, and outright grants for subsidized (but still rental) housing.

I've seen it overload local infrastructure, allowing developers to reap the profits while externalizing the costs.

We need to address the root cause -- ever-growing income inequality -- not exacerbate the root cause by building an ever-higher wall between individuals and home ownership.

Tokyo, Toronto, and Houston are all examples of large cities where it is relatively easy to build housing and housing is relatively cheap.

Frist time I've heard anybody use Tokyo as an example of cities with cheap housing.

Desirable areas of housing in Houston are only cheap relative to SF area, downtown Portland, and downtown Seattle. Plenty of million dollar condos in Houston, and a nice but small one bedroom/studio in a good part of Houston start at about $1500 a month.

It does appear to be easy to build here, though. Tons of new high density residential being built, but it's not making the prices come down at all.

You're using a very unusual definition of "relatively cheap".

Wealth redistribution would only slow down the problem, not fix it. At some point you have to concede that market forces exist and no amount of economic fiddling (aside from total abolition of currency and private markets) will address the issue.

I think the days of Portland being the affordable West coast city are on the way out. Portland real estate prices are forecast to overtake Seattle in the near future. Dilapidated bungalows in our hood across the street from houses with bi-monthly drive by shootings are selling for 650K for the land alone...

Come to San Angeles. Not cheap by any stretch but costs are kept in check by the simple fact that there's so much of it.

Whatever you do, don't move to Denver. It's just full of potsmokers and Tebow fans. Yuck

How about we build a ton of homes?

Fantastic idea. Now you just have to convince the existing landed gentry--most of whom have the bulk of their personal wealth wrapped up in their primary residences--that building more won't actually cause their house to devalue to less than the cost of a Happy Meal. Or that building anything more dense than a single, regular-style house every 5,000sqft doesn't result in a Blade Runner dystopian future.

At least in Seattle, this has been a tough slog.

Building more doesn't devalue their land. It actually increases the value simply due to the fact that there's more revenue to be made on the same amount of land.

It also doesn't solve the housing crunch, because there's no meeting the demand. It doesn't matter how dense you go; even Manhattan isn't dense enough.

There are two things this does accomplish, though:

- It exacerbates the wealth divide, as it increases the market entrance costs and moves ownership into the hands of fewer and fewer "landed gentry" who, invariably, build rental units.

- It destroys quality of life for existing residents, as it foists all the scaling issues of upzoned density (traffic, crime, costs, required size of bureaucracy) right onto them.

Only an idiot thinks this. Imagine rezoning a single family home lot to permit a 15 floor tower to go on it. How can any functional human think that would result in a lower land value?

Because people don't think rationally about hosing.

Everyone says "the solution to expensive housing is to build more housing. Supply vs demand".

That's not accurate, it never has been. But if you believe that (as most people do), then you must also believe that building a 15 floor tower will lower land value (since it is "more supply" so demand and prices must drop because of it). Belief in one, implies the other.

In truth, a 15 floor tower would raise land value, for itself and properties around it. But that also means that "simply building more housing" won't actually make housing affordable. Because the new 15 floor tower and the single family home next door will both be worth more afterwards, making both less affordable.

Repeat that process a thousand times, and you have the US housing market. Lots of beautiful places getting built (and they should get built, because we need that new housing). But almost no one can afford to live in any of the new housing, and old housing never really gets cheaper, so "affordable housing" is this huge issue, despite new construction happening in every city nationwide.

Until when? Manhattan density? They still have this problem.

Do we not stop until until we've turned entire cities into Mega-City One?

How about until we've turned them into Boston? Boston and Manhattan are congested, admittedly, but Boston at least (I can't personally speak for Manhattan) is a wonderful place to live. It's a normal, natural, _human_ city, with medium-height buildings and mixed commercial and residential land use (businesses at street level, residences above and sometimes below); it's a far cry from the typical suburban wasteland, half Le Corbousier and half Leave it to Beaver.

Boston is much less dense than Manhattan and much more pleasant to walk in. Some of it is that there are fewer skyscrapers to block the sun. Some of it is the colors -- more red brick and green trees.

I agree strongly. But Boston as well as Manhattan is denser than SF (from what I've heard of SF); in answer to teacup50's question, I'd say "first develop to Boston levels, which are clearly still humane and habitable, then revisit the density issue after that."

Boston's average population density is 13.3k/sq mi.

San Francisco's average population density is 18.5k/sq mi.

SF has been developed beyond Boston levels, and it's still not enough.

Manhattan is actually cheaper than SF now, and they have easy public transit from all different areas (Brooklyn, Queens, Bronx, New Jersey, Yonkers, Staten Island, Long Island) where the lower classes can actually afford to live and commute into the city easily for work. It's much better laid out and planned than SF Bay Area.

Manhattan is only cheaper than SF because SF's market has been driven completely insane by local industry.

Manhattan is still wildly expensive.

Because building anything new drives the price up even higher than it already is. (High density generates more demand than it adds in units)

We need the new homes. But we also need to rethink the system here, because building new homes makes all nearby homes less affordable.

"We have a lack of supply, I agree. But building more supply makes it worse!!!"

You are sorely mistaken

In the thirty years I lived in SV I made more money from home appreciation than I did from salary, and I made top dollar.

Someone should tell Silicon Valley about this global telecommunications network that lets people connect in all kinds of ways to cooperate over vast distances.

Oh yeah but that gets in the way of daily sit-ups or "bring your dog to work day"

Someone should convince companies to let workers work remotely. Hell, I live on the peninsula and just don't want to commute to sf 5 days a week and most startups (definitely including every YC startup I've spoken to) demand you be in the office 5 days / week. So even being in the same timezone and having the flexibility to shift planned remote days and come to the office with a day's notice isn't good enough.

edit: and before I forget... Why doesn't everyone on the peninsula want to spend 10-15 hours / week commuting to sf? So strange. There's only one possible explanation: engineering shortage!

But it doesn't have elevators, so you can pitch some random rich guy and get off with $ 1e7 .

No this would require them to practice what they preach, big no no.

It does seem like VR is the missing piece. When you can work in Google's VR campus and live with your family back in Knoxville* I suspect property prices in Silicon Valley will come down a bit.

* where your kids can $0.80 autonomous cab ride to their grandparents 20 miles away, or $20 to put them on the same cab ride with a licensed babysitter. Things gon' change.

More generally, presence is the missing piece. VR is one possible solution to that, if you can solve the motion-sickness issues. Holographics (if real-time holos ever reach commercial viability...there's some interesting research on it now) is another possible solution. Perhaps there are other possibilities that people haven't found yet. Wrap around screens, like the Google Liquid Galaxy display? Projectors?

But someone needs to invent a way for office workers to feel like they can have an impromptu conversation, casually, with a coworker thousands of miles away before remote work really takes off.

To me, VR is presence. The metaverse has existed since the first network was turned on. It's the sensation of presence in the metaverse that people are referring to when they say "VR".

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