Why the High Cost of Big-City Living Is Bad for Everyone | Hacker News Reader

Why the High Cost of Big-City Living Is Bad for Everyone

newyorker.com

94 pointslafay129 comments

From the article: "One hardheaded answer is to build more housing. An increasing supply of housing would theoretically put downward pressure on prices. The reality, unfortunately, is that almost all urban construction happens too late."

That last sentence does not sound like an argument against this approach, but an additional argument for it. If there is a secular trend of urban rents outpacing inflation, it sure seems like a "better late than never" situation.

I live in Toronto. It is mind-blowing the number of condos being built. More are in progress now here than exist on Manhattan. But as far as world cities go, the condos and rent are both very affordable. So I think to a certain extent it does work to build more, but it is not 1:1, and lots of people come here because of the (relative) affordability.

It's a reminder that we have a prisoner's dilemma on our hands: if one city fixes things, they share an disproportionate burden of the load that will follow. Real success will only happen if everybody coordinates on better land-use policy.

The likely outcome is that they won't, and here we are.

What kind of land-use policy are you proposing and how will it be kept out of the hands of politicians who abuse it for their own personal gain?

My ideal reform would be the Land Value Tax[0], which admittedly has run into problems in execution with poor implementations.

It depends upon assessments on land value that reflect current market value of that land. In one notable case of the LVT in practice (Pittsburgh), assessors made a real hash of it, with assessments well out of proportion to market demand.

I would like to see a proof of concept to fix this, mainly an automated algorithmic assessment map of land values, based off of public sales records. It's a fun project to attempt; I should start up a repo some time.

[0] https://en.wikipedia.org/wiki/Land_value_tax

The problem with using sales records for LVT is the central concept of LVT is that it's based on unimproved value, and actual sales of land usually include improvements and separating out there unimproved value is non-trivial and hard to validate.

Yes, that's the challenge. But with some assumptions (within an urban area, neighboring plots have about the same land value; when a plot is sold at two different times, the difference in the prices may reflect the rise in land value), one could get some reasonable estimates.

Waiting for a plot to be sold may take too long. How about an auction based pricing model?

Property owner declares land value and pays tax based on that value. Taxman has checks and balances to make sure that the declared land value isn't egregiously low balled.

The declared land value is made public and anybody can make an offer to buy the land at that value plus a premium. If the offer is accepted, all is good and we have a new declared land value.

If the offer is declined, a new declared land value is set at the offer price. The owner pays an additional tax to reflect the new declared value and a penalty if it is found that the old declared land value was (significantly) below prevailing land values.

The trick is in setting the penalty in such a way that it becomes unappealing to declare less than fair market value. The risk is that declared market value is unduly inflated to protect against the penalty, but the property owners self interest in paying the least amount of taxes should protect against that. Also applying a (small) fudge factor to the acceptable fair market value when the penalty does not apply should help. Markets do move and there is no need to (harshly) penalize normal appreciation and market developments.

I've thought about something like this-- self-assessment seems very promising.

Two notes:

* If a person's offer is accepted to buy their land, we need to figure out how to agree upon the price of the improvements, too. I could imagine a system of arbitrators being useful here.

* People's natural loss-aversion would be a problem here-- one would expect a person to overstate the worth of their land by 50% or so.

I don't think loss aversion would be a big problem, as the owner would not be required to sell. They'd only be required to pay tax on the difference, if higher offers come in.

> The declared land value is made public and anybody can make an offer to buy the land at that value plus a premium.

That works for property tax, but it doesn't work for land value tax, because the key difference between LVT and property tax is the former is based on the unimproved value of the property, while the latter is based on the value of the property as it is, with all improvements.

A self-declared value that is legally tied to an offer to sell at a fixed premium is clearly a self-assessment of the improved value of the property, not the unimproved value that LVT is supposed to be based on.

Fair enough, but that just brings us back to the problem of separating the improved and unimproved value. If we can do that, which we must be able to do if LVT is ever to be implementable, we can still use the auction method proposed.

When a plot is sold two different times (without change to the state of the improvements -- which is actually impossible, because agree it's a relevant part of the state), the change is likely to reflect the change in supply/demand of equivalent improvements in the local market (i.e., houses of X square feet with Y bedrooms.)

This is true to a minor extent, but when land becomes scarce, we tend to see land values rise everywhere in similar amounts regardless of what type of improvements we see.

I agree that there are a lot of confounding variables, but with the right amount of filtering and smoothing, one can still get reasonable answers.

Real estate is risky, so mass construction never happens until the dumb money shows up.

My city is awash in luxury apartments and condos with 10 year tax abatements. They'll suck the life out of existing nice developments, and then every little LLC holding company will be bankrupt when the tax man comes back.

The threat of increased future supply should be enough to depress prices. That new condo won't look like such a good investment if you know there will be many more popping up in the neighborhood in the next 5 years.

I think the point is that by all means build more supply, but don't expect that that alone will solve all your problems.

There are real physical limits on the ability to create supply. Even after cutting red tape, developments need to be reviewed, and there are limits to the pace of reviewing and limits to the amount of trades available to build the approved buildings. As the article states construction takes time.

In a high demand environment, for example in a speculative housing bubble, demand could dominate the ability of a city to create new supply. In this case you can add more supply, but it won't halt price increases. You can't change the balance and create more affordable housing without also taking action on the demand side or by subsidizing in some form below market price housing.

A real world example of this would be Vancouver, which has consistently added supply over the decades, and currently has more housing starts than at any other point in the last several decades, and yet was continuing to see spiking property valuations. The Provincial government finally gave in and took action to limit demand, enacting a 15% tax on foreign purchases.

Established home owners inevitably appeal for increasingly restrictive, even slow, permit processes to prevent even a flattening in housing prices, let alone a decrease.

I am concerned that we will kill the golden goose...neighborhoods will consist of only the elderly (who remain by virtue of prop 13), and the wealthy. Seems inevitable that neighborhoods of this composition can only support service industries (hair salons, restaurants etc) and will eventually become economic dead zones.

In this model, the Bay Area becomes a glorified version of Sand Hill Road...cozy offices for a very few at the top...and every other facet of industry pushed out to affordable areas.

This is exactly what is happening. The whole South Bay is slowly imploding.

south bay isn't that expensive. It's just SF. South bay is cheap compared to the average income of the Bay area

Are you kidding me? Dunno, but $3k/mo for a 3bdrm apt is pretty unaffordable. Add $500 for duplex, and $1k for a single-family.

That's literally double what it used to cost 10y ago.

SF would be $3k for 1bdrm

San Francisco $84k median income vs $1.1 million median house cost. That is obscenely disproportionate. That's a $5k monthly payment for just P&I, which is 71% of income before taxes and savings. It's completely untenable.

http://www.sfhip.org/index.php?module=DemographicData&type=u...

http://www.zillow.com/san-francisco-ca/home-values/

Is there anything wrong with that though? Shall we not be held economic hostage and instead build New Cities? If I recall, YC even has a project for this!

Yes its akin to suggesting we let sick parents die in hopes children won't succumb to the same disease. Obviously, we should find the cure instead.

Its critical to learn healthy urban planning methods so that the child cities that later run into this problem have a solution other than moving on.

But you can't do so without overriding ownership rights. Which is fine, but something you'll need to be upfront about.

Maybe we could actually let people work remotely, and not waste billions of hours commuting. Then we could leave these fucking urban and suburban hellscapes, and go live somewhere with green grass, and trees, and mountains, and human-scale communities. Maybe people wouldn't be so neurotic.

Because there are too many people that think good communication is important and that good communication is comprised solely of face to face meetings.

IME these people are universally poor communicators in the much more important text medium.

I wouldn't go that far. There's a host of conscious and subconscious things we can only get when we're in the same room as someone. It's not surprising people rarely get funding, make hiring decisions, etc. solely from text communication. It's unfair to characterize people / companies who value the additional information as being backwards or old fashion (you didn't do this -- just a general statement).

Many jobs, like cutting hair, waiting tables, and changing car oil, are hard to do remotely. If your industry has options for remote work, pursue those instead of bemoaning your current situation.

Those jobs are hard to do remotely because they involve providing services to other people who live in the area - in the case of San Francisco, that's mostly tech industry workers who could work remotely but don't for reasons of industry politics. The hairdressers and mechanics and waiters required to service them act as a multiplier on the resulting population growth, but the cause is all the jobs that could be done remotely but aren't. Every tech firm that insists on operating from SF leads to a penumbra of non-tech workers around it being stuck in SF in jobs that cannot be done remotely.

Sure, as long as you're willing to pay for the sprawl of infrastructure needed to support all those towns spread out everywhere, 'cause as an urban dweller, I sure ain't.

Small towns are awesome if you want to live a mostly self-sufficient life. For most people, who want cheap crap dropped on their doorstep every other week, food coming from hundreds of miles, cable TV with 300 channels and fast internet, they just mean more roads, more trucks, more driving, more heating, more pollution.

> pay for the sprawl of infrastructure needed to support all those towns spread out everywhere

You mean the septic tank, well, and solar panels? Plus the dirt road? Frankly the only infrastructure you really need is the high speed internet connection.

No, I mean the hospitals, schools, warehouses, postal service, shops, electricity generation and distribution, mobile towers, roads that can support the trucks that transport everything, etc - and then the human infrastructure: courts, police, administration, etc.

That stuff already exists. In many cases, it's the only thing that still exists. In the podunk little town I grew up in, every scrid of industry has been outsourced or regulated out of existence, but the schools, hospital, local college, government services, and utilites are still around, and are the primary sources of employment, by an overwhelming margin. If you could halt the brain and youth drain out of the area, and put some people that were making real money back into the community, you could support some actual businesses, besides the WalMart and the gas station.

I actually have faster internet when I go visit my parents up there than I do where I live in the suburbs...

That stuff already exists. In many cases, it's the only thing that still exists. In the podunk little town I grew up in, every scrid of industry has been outsourced or regulated out of existence, but the schools, hospital, local college, government services, and utilites are still around

Just because the buildings exist doesn't mean they're now free; they have to be supplied and maintained, each and every one.

If you could halt the brain and youth drain out of the area, and put some people that were making real money back into the community, you could support some actual businesses, besides the WalMart and the gas station.

But why would we do that? What's the point of having "some actual businesses" in a podunk little town, where they'll be cutoff from the wider industry and where everything they need and produce (assuming it's not just software) must be shipped a bunch of extra miles?

My whole point is that small towns are inefficient unless the inhabitants are willing to be mostly self-sufficient. Supporting the creation of businesses, which require by definition tons of infrastructure and usually transportation of stuff goes directly against that.

Here's the thing. We already have towns spread everywhere--just like in pretty much every country in the world. The US is a large country. I live in an exurban town that's adjacent to a couple of older/smaller manufacturing cities within an hour of a major tech metropolis (though my office is actually much closer). I have septic, pay for water, pay for trash pickup, etc. And, not that I object (as I go into the city a fair bit), but a lot of my taxes seem to go into urban infrastructure projects.

It's not black and white. It's not central Manhattan and the middle of Montana.

[ADDED: And, by the way, my town was founded in 1653. It's not some recent suburban sprawl addition.]

This. There are all kinds of rural US towns with existing infrastructure that are slipping beneath the waves because there aren't any jobs. Not everyone wants to live in Manhattan - if I could telecommute from a more rural location I would.

The town I live in is in pretty good shape because it's on the outer ring of the Boston commuting radius--with pretty good rail. Plus until quite recently essentially all Boston tech was west of the city anyway.

But this idea that, if only we herded everyone into cities and stopped spending on other infrastructure, everything would be great is... silly.

New England, and indeed much of the East Coast, is a far cry from the rest of the country. The width of the entire state of Massachusetts is smaller than the distance between some neighboring towns in the Midwest.

Yes, but the point remains that all those spread-out towns already exist. Unless they're actually abandoned we're not going to bulldoze them.

The difference is that they're not within daily/weekly commuting distances of tech centers as are many of the outlying areas of most tech centers--the Bay Area being something of an exception. So living there would be true remote working as opposed to just not living in a desired city core.

Massacheusetts is almost 200 miles wide, I'm having a little bit of trouble picturing places that are that far removed from the nearest town outside of places like the empty parts of Nevada or Wyoming.

I guess it depends on your definition of "nearest town". By the official "settlement hierarchy", in which a thousand souls or more comprise a town, that's true. Once you get into 20k or 30k, though, it's pretty easy to find places in the West or Midwest that are more than 200 miles from the nearest town of that size.

There's a pretty wide gap between "1k" and "20k".

Also I don't have any GIS tools handy but I started poking around with google maps and 200 miles is a long way even in the west, It looks like all of Nebraska is within 200 miles of a 20k city, and so is almost all of Texas except maybe down by Big Bend.

>There's a pretty wide gap between "1k" and "20k".

That's true. I was a little surprised 1k is large enough to be considered a town.

this idea that, if only we herded everyone into cities and stopped spending on other infrastructure, everything would be great is... silly.

As the person who started this thread, I agree, that idea that nobody argued for is indeed silly. All I said is that small towns are inefficient for the typical citizen. Nobody claimed that eliminating small towns would make "everything great".

By the time we actually let people do that, we will have flying cars to commute with anyway.

That is only one of many factors involved. We are talking about communities. When a big new software innovation comes out people have meetups and talk things over. That doesn't work with a highly distributed workforce. No matter what employers do the same forces will be at work concentrating high end labor.

Most people aren't really high-end labor. If you're building a website or a glorified CRUD app or the vast majority of enterprise drudgery, you can do that from anywhere; sitting cheek by jowl with your coworker is not really any better than having an XMPP or Skype channel, and tens, hundreds, even thousands of miles between you.

We used to talk about things here, on the internet. We're doing it right now, in fact. I've had far more stimulating discussions with people here, and other places on the web, where you can draw people not just from one provincial area, but from the whole world.

I don't disagree that there's value to physical concentration and face to face. But not every talented engineer (and associated financial/business/etc. people) can live in Silicon Valley or wants to. It's a constraint. Yes, there are concentrating forces but, as an industry, we need to live with the fact that there are countervailing forces. Distribution, even if its not absolute, is the reality.

Meh, you can travel for a conference or to the city for the meetup. No different than now.

> It would mean, more or less, an urban Marshall Plan for housing.

I would like to see this, at the national level: federally strip all downzoning from urban cities, then increasingly tax single-occupancy houses, focusing on subsidizing and activating high-density housing for all income strata. There's no reason Seattle, San Francisco, LA, etc can't all be turned into high-density high-efficiency Manhattan-esque locations. With the increased density comes a more effective tax base and a better scale for urban services.

Oh, okay, yeah, we'll just MAKE people live however we want. We know best, so no one would ever resist.

Of course, the zoning, parking regulations, mortgage subsidies &c. which led to the present situation are all also instances of making folks live the way planners want.

Weren't those mostly in place before most people who currently live in those places moved there, and don't people often chose where to live based on the rules and regulations of that place?

I wouldn't call moving into a place being forced to live under the rules and regulations of that place.

Changing the rules and regulations on people who already live there, though, I'd say is forcing because it can be a major effort to move somewhere else, especially if they are an owner rather than a renter.

They changed the rules and regulations that made housing prices go roughly 3x before I was old enough to buy a house. Why is locking me out of the housing market by preserving other people's paper wealth a moral imperative? Are they more deserving of the money because they're older? Because they already have it?

I know the real answer is because they can vote for things that preserve it, and I can't vote for things that erode it.

People complain that millenials aren't buying into the american way of life while simultaneously making it so unaffordable as to be roughly financial suicide to participate.

Costs are specifically because people want to live there. Housing costs are dominated by infrastructure costs not by what specific homeowners spend. Thus, 'protecting' an investment is silly when it's not homeowners that made the real investment.

Housing policy is already being forced upon you in the US. Today, we call it zoning, along with various governmental services and political boundaries for them. On the less obvious level, it's also taxes, exemptions, and infrastructure such as bridges and roads. As Kim-Mai Cutler has been recording over the past 2-3 years, housing policy today is, in part, the result of explicit choices for low-density suburbs.

So while you have a point from a purely anarchist point of view (and that's not a slur on you, ok? anarchists have a great critique of existing systems), that ship has sailed so long ago in the first world that I don't think there's any meaningful point in trying to recall it.

I can't tell if this comment is genuine or sarcastic.

If it's genuine, how the heck would you get support for something like this? It'd be the ultimate NIMBY.

The federal government could at least stop subsidizing mortgages (which is more NMMYA than NIMBY).

NMMYA?

Not my mortgage you asshole.

(which just to be clear, I'm not saying that to anyone here, I'm putting it in the mouths of mortgage holders who like their tax deduction)

Not sarcastic. Seattle resident frustrated at NIMBYs who want to replicate the most asinine of the SFBA and NYC practices.

YIMBY, actually: NIMBYs are the folks who don't want to have development nearby.

League of Urban Voters: we would work together to draw up a workable plan for the next 12 election cycles (or so) - the LUV would accept members and donations from all who support the goal of increasing density and urbanization. Key congress people supporting the goals would be identified, along with professional city planners and professionals at universities. Supporting cast members would be industry groups and other coalitions that we find common cause with. We would collaborate with them to develop talking points and in-depth policy wonk analyses, policies, and plans.

After we had hammered out the key policy points and major reasons to shut down the pro-single-occupancy house policies & pro-suburb policies, we'd go onto the campaign path, understanding that it'd be a 48-60 year battle. There'd be a blog, a forum, probably eventually a think tank and a journal. Given a careful orchestration over the timespan of two generations, a reasonable success would be had.

There's no God-given right to live in your own home on an acre of land in the US. Or in a 120-story skyscraper. These capabilities are hammered out through politics, engineering, and money. If the sociopolitical scene is tuned to have cheap houses, it'll have cheap houses. If it's tuned for condos in skyscrapers, it'll be condos in skyscrapers. This genuinely is malleable stuff here.

N.b., this is not unique to housing policy. You can define the same general game plan for any particular issue you like.

Simply make it legal to build higher-density housing with smaller setbacks, less required parking, smaller room and unit sizes, etc. The affordability problem will take care of itself, no subsidies required.

For existing owners, they will get a huge payout because their land becomes MUCH more valuable. The downside is that certain neighborhoods where supply is most suppressed will change very much, very fast, and the people that don't sell and leave will probably not like that.

Preferences aside, this cannot be done without hugely disrupting municipal finance, primarily the provision of public schools. Residential property and services are subsidized by commercial/industrial tax revenues, and there is no linkage between assessed value of property and number of school-age children (e.g. two empty-nesters in a mansion pay multiples of the property tax of a family of 5 renting an apartment). And that's just operations! Building lots of new school capacity, when land has just become very expensive, is not something existing cities/school districts are equipped to do.

However, Americans are tough and smart and can figure stuff out. These are just the current obstacles that exist.

>For existing owners, they will get a huge payout because their land becomes MUCH more valuable.

But these very same owners are the ones blocking such construction, even despite being the same people that will receive a financial windfall; they prefer to keep the neighborhoods as is even at this tremendous opportunity cost.

So, it still requires some eminent domain or overriding local government.

Sure, owners prefer to sacrifice total windfall in favor of stability and control. That is proven across all cities everywhere that land use controls exist. I'm just saying it's not all bitter medicine for existing owners if land use controls are loosened.

> eminent domain or overriding local government

Really? You'd prefer that over working remotely, or staffing remote offices?

> build higher-density housing with smaller setbacks, less required parking, smaller room and unit sizes, etc

That's what we've been doing here in Australia to deal with a housing crisis; now there's a looming oversupply of apartments [1], and a lot of them are barely habitable "dog boxes" [2][3] built as investment assets (rather than, you know, for living in) while house prices are still sky high.

[1] http://www.domain.com.au/news/australia-to-have-too-many-hom...

[2] http://www.abc.net.au/news/2016-08-14/melbourne-dog-box-apar...

[3] http://www.macrobusiness.com.au/2016/03/melbournes-dog-boxes...

Again, I'm not saying to REQUIRE any of those things, simply make them not illegal. If developers build an oversupply housing that people do not deem acceptable at any price, then people will not buy/rent them and they will be removed. If people are renting them, then people find it an acceptable tradeoff. Sweatshop jobs have been more attractive than rural poverty since the Industrial Revolution began, and small, "substandard" apartments are a choice that many people would choose over longer more expensive commutes, health care, better nutrition, working one job instead of two, or any thing else that can be purchased with money.

Oh totally, I'm not disagreeing. I just think those regulations are there for a reason, and in our case the regulations have been wound back too far and now we have to adjust in the opposite direction.

I'm against the parking aspect for this...

UNLESS: The municipality becomes the 'building'. If you have parking silos at the edges (or in dedicated locations within), and excellent human scale transit (like people mover belts through commercial areas) between there and housing then I'm more for /centralized/ parking.

America is simply built on cars, and no matter how much you get rid of the need for a car in the city (and PLEASE reduce that as much as possible!) the car is /the/ interface for accessing the rest of the world, where families, lower density industrial, and other aspects live.

If you want to go out and access parks and other features that involve more trees, more natural animals, and less people that is also a requirement.

Not saying parking can't be built, just do not require parking minimums. Parking spots cost ~$10K and take ~180 sq ft of space + about half that again for access, or about the size of a small studio apartment. Parking garage spaces cost ~$20-$40K. If you have a parking lot, that limits the amount of land you can use for a building, and the number of spots limits the number of units (or sq ft for commercial/office). If you build a garage, you run into height limits, either from zoning or limitations of your construction method and materials.

Imagine if every room (not just bedrooms) was required to have a walk-in closet, because the American way is for people to have a lot of stuff and there's simply no way to provide for space if it's not mandated to be included in the cost and construction of every dwelling. It's be very convenient to have the space, but not everyone needs it, it would encourage people to buy and keep more stuff than they would choose if they had to pay, and it would reduce the amount of space available for anything besides closets.

But this is silly - people buy less, rent storage units, change habits, etc. Parking and transportation is the same. If your condo is $35K cheaper because there's no parking, and you forego a $35K car, then you save ~$1K/mo which pays for a lot of Ubers, delivery fees, and vacation cars. And if you want to have your own car, then you can always buy/rent a space!

> However, Americans are tough and smart and can figure stuff out. These are just the current obstacles that exist.

The key problem is that these zoning decisions are occurring at the local level, where petty biases and NIMBYism plays out - shoving externalities at the neighboring cities is par for the course.

Yeah, I meant figure out the municipal finance thing. Local rule of land use has directly led to underbuilding, limiting rental housing, and high prices. If that changed and the market for housing was allowed to correct, it would create the municipal funding problem, and that's what I said that Americans are smart enough to figure out a solution to.

There are many reasons that not all cities are as dense as lower Manhattan, starting with the fact that those of us in these cities don't want it and that outranks those outside who do.

Does the high density housing in SF allow for families? In Vancouver at least the majority of condos in the core are single bedroom so if you want a family you need to move to the suburbs.

San Francisco requires that a certain percentage of the apartments in new construction be two or more bedrooms.

San Francisco's school system pushes people to other cities/suburbs.

Although, realistically, that's what tends to happen anyway and has been for a long time. I know lots of people who liked the urban lifestyle even before it became as popular. Walk to a bar or restaurant or head to a play after work.

At least many of them started valuing a yard, easy access to a car, and better public schools after they had children.

The federal government doesn't have that authority, unless maybe if someone concocted a Commerce Clause argument for it.

Don't think it would be hard to argue that housing prices in major cities affect interstate commerce.

Anyways, you can tie HUD/DOT/etc grants to the conditions. Don't play ball = no funding.

Withholding DOT funding has been done before: http://www.theatlantic.com/politics/archive/2014/07/four-tim...

"The federal government now only has tax deductions for condos and renting in areas where the occupancy is > 10 adults/acre. Increasing deductions are possible through increasing the adult/acre density".

"The federal government will no longer provide security for single occupancy house mortgages"

"The federal government finds that policies preferring in any sense single-occupancy homes gives clear rise to racism. The Equal Housing authority will be auditing all sales and rentals of single housing homes; landlord violators will be fined severely; mortgage lenders who violate will be fined severely".

Also, with the demographic shifts in the US and how they affect urban areas, it's absolutely relevant to the nation's commerce.

Such a plan needs a good, clever name.

We could call it, "The great leap forward." Or maybe, a "Five-year plan".

Certainly the locals shouldn't have a say in what the feds do to their own cities.

If I want to live in a place and I can't afford to live there because "reasons" and that means I can't vote there, but due to work, etc I'm "stuck" commuting there, how do I affect change there? Property rights trump all and I can eff off? I mean that's clearly not the case; zoning exists so property rights aren't the end-all, be-all thing.

In fact, zoning is what is keeping people from building the kinds of buildings that people who can't currently afford living in city $X from living in city $X. Does one particular unit of government deserve more respect than all others?

Well, zoning is still determined largely by the local voters, albeit on the aggregate level rather than the individual property owner level. (For the most part, subject to legal challenges, etc.)

So, no, as a non-resident you don't have much of a say. Although, if you're working in a city, your company that is making you "stuck" working there presumably has some sway as a taxpayer.

I understand that "owns property here" is a reasonable approximation for "should have a voice in what goes on here" but there are lots of cases where it breaks down. Places that you "have" to travel through, places that you work but don't live, etc. Should a person who owns two houses and splits their time 51/49 REALLY only be allowed to vote about things at one of those houses? I'm strictly speculating; I don't own any properties so it passes me by completely. But it would certainly seem not entirely in line with democracy to do that to people.

how about "The New New Deal" or "the NeXT New Deal"?

The feds have already stuffed their hand deep up in housing policy. It's only a mild shift, and one that will stop the petty Balkanizations of regions like the SFBA, Seattle, Denver, St Louis, etc.

Sounds like a great way to fuck the middle class, whose only remaining wealth is real estate.

Thank god for democracy.

Think about this for a second-- is holding onto desirable real estate as a wealth asset really a sustainable method of building wealth for the middle class?

In the Bay Area, you see what happens when the supply runs out: the middle class becomes renters for life.

...Real estate has been a boon for some in the middle class, but it's important to consider the wider implications of speculation in land values as a source of wealth-- it's ultimately unsustainable and highly regressive.

It's been the most consistently effective method for at least 2500 years, probably longer than that. The oldest formula in the book is land=wealth.

But for whom?

For instance, consider John Arrillaga[0]. Land in the Silicon Valley made him billions. But does that make this a sensible system?

Silicon Valley would exist whether or not people speculated in land, and yet we consider fishing for gains to be a noble pursuit. I think it actively holds back actual improvements in communities.

[0] https://en.wikipedia.org/wiki/John_Arrillaga

Frankly, the bizarre phenomena that is Silicon Valley is the problem, not real estate.

It's a bubble that will burst.

Compare SF to other cities in the country, and you'll see that it's not some outlier:

http://www.economist.com/blogs/graphicdetail/2016/08/daily-c...

Those charts make my point. Look at the prices in real terms. SFO is more than 2x NYC and 4x the national average!

A $400k home in NYC is within reasonable reach of a dual income professional couple.

Prices are high generally because capital is cheap and monetary policy has made other traditional "safe" investments useless.

The income ratio based numbers reflect how the "middle class" is getting the proverbial shaft.

When wages are stagnant for 30 years and property appreciates, you need to accept the fact that you're not capable of supporting a circa 1986 middle class standard of living. My grandfather owned a home in NYC, kept new cars, and had a summer camp in the mountains on a blue-collar city government income and second job as a boilerman in the 1960s. That's no longer achievable. I personally barely have that level of buying power as a IT executive.

But how can you support the statement that the phenomenon of Silicon Valley created the unaffordability of houses when we see the same increases across the country? If it really was the tech scene, we'd expect the increases to be much higher in the Bay Area.

Click on the "prices in real terms" chart, which factors out inflation.

The average US price in real terms is up like 10% since 1980. The average SFO price is 400% above that. The average NYC price is 200% more. That's a real estate bubble.

Lots of factors influence what's happening. Between Tech workers who make too much, Chinese capital flight liking for a home and stupid bank underwriting practices, demand is wacky in a few cities.

Compare to Los Angeles, a city with similarly broken land-use policies to SF, but without the tech scene. It only lags by a small amount. I simply don't think you can attribute the tech scene as a unique cause of this.

This is going to sound insane on a site like this but you don't have to live in SF. You can certainly choose too, but if you look at the pros/cons of job offers, housing just makes SF untenable. There are plenty of other cities with plenty of other jobs.

>I would like to see this, at the national level: federally strip all downzoning from urban cities, then increasingly tax single-occupancy houses, focusing on subsidizing and activating high-density housing for all income strata.

Washington already exerts too much influence on far-flung localities. This is the last thing I want to see - people who live in a place should be the ones who set the rules for that place.

> This is the last thing I want to see - people who live in a place should be the ones who set the rules for that place.

I lost all sympathy for that argument when it was part of the key rationales for redlining and keeping the blacks out of town in the 1940s & 1950s.

The federal government can exclude those kinds of practices without taking over, though. It's not an either-or situation.

Cities are inherently places where wealth begets wealth. I can say after living in LA I see the process of its Mahattanization. My guess is my kids won't even understand a suburban LA other then as a historical artifact mostly represented in old films and TV shows.

Affordable suburbs are, I've come to believe, a transient phenomenon. They exist for a brief and beautiful moment when there's cheap land outside a city center. Then their demand exceeds their supply... and you know the rest.

SF specific anecdote - I had a radical idea while walking up Divisadero last week. What if we removed Divisadero and Geary St. and built apartments where the road is today. You'd have European style narrow streets for pedestrians and could increase the density massively. Imagine taking out the multiple lanes across Geary St and how much housing could be built. Would there even be a NIMBY problem since the road is publicly owned?

> Would there even be a NIMBY problem since the road is publicly owned?

Yes. NIMBYism is entirely about public policy. The fact that the land in question might be publicly owned is irrelevant. If anything, publicly owned land should be more subject to NIMBYism. Public land does indeed belong to the citizens.

Yes, huge NIMBY problem - people drive/bike/ride busses on those streets, and business are on those streets. (not saying they wouldn't benefit from a change, particularly businesses, but many people object to huge changes) You don't need to own something to be a NIMBY.

More practically, the width of even wide streets like Geary is narrower than the depth of a typical SF building - see https://goo.gl/maps/YbJmqxpgEW62. Roads overall take up a huge amount of space in a city, but no single road is all that much area. For instance, it looks like the right of way on Geary is about 110'. If it went the full length of SF (~7 miles), then the whole road takes up less than 100 acres. For reference, Park Merced is 150 acres.

It would be great if all the lightly trafficked side/residential streets could be squished from 60' to 40', you're talking about 50 blocks -> 1000' width, which is over 3 blocks wide and about a thousand acres, which is approaching the size of the Richmond district (and that's just if you squish in one direction). But you can't just pinch-to-zoom in real life :(

I actually think about that all the time. But instead of doing it on Geary or Divis, I think the real win is in SoMa. Our city has six lane streets in some cases -- that's absurd. Build a strip of housing, retail, and parks down the middle of Brannan, and you've turned what I consider one of the least walkable and desirable neighborhoods in SF into somewhere potentially very nice to live.

Article doesn't seem to assert that it's bad for everyone, just those who aren't already at the top of the ladder. The author even goes so far to say that city living is a "luxury good" for those who can afford it.

There are some inherent problems with making cities affordable.

Dense construction is more expensive per unit area. So even if you could spread out the cost of expensive land among many units, a high density building will cost more per unit to build. Shrinking living spaces can only be taken so far before they hurt quality of life.

So city dwellers will always pay more per unit area because of building costs.

Second, traffic from density imposes costs on transportation. So movement is more difficult in a dense environment.

Eventually, these costs overwhelm the networking benefits of cities, and dispersion is the result. This has already happened with industry, which requires more space than services to be profitable. We are now seeing the service economy priced out of the Bay Area, leaving only the rentier economy.

Density is not a panacea.

> So city dwellers will always pay more per unit area because of building costs.

And yet many will pay, because the benefits of cities are desirable.

> Second, traffic from density imposes costs on transportation. So movement is more difficult in a dense environment.

There may be an absolute limit, but with well-executed transit, the density of cities can offer mobility options that less dense communities could not begin to consider.

> Eventually, these costs overwhelm the networking benefits of cities, and dispersion is the result.

I agree, but in my take, that's largely because cities are artificially expensive owing to the speculative value of land-- you simply can't build better transit because the cost of land rights would be gigantic. You can't afford to build denser apartment buildings because homeowners enforce restrictive zoning to protect their land values...

It's exactly correct that this all benefits rentiers. But I think the right solution is better land-use policy which directly targets rent.

Maybe, as an academic exercise you could find an upper limit on the benefits of density.

In practice, however, we are so far from anything remotely resembling a natural limit on the benefits to density that we will see a lot of improvements by freeing cities to become more dense. Removing the artificial constraints on growth imposed by anti-growth nativists will do a lot to improve affordability.

Sure. I found this for Canada: http://www.altusgroup.com/media/4099/costguide_2015_web.pdf

Toronto (average $/sq ft to build given range) Medium Quality Tract House (assume 1 story): 180 Medium Quality Highrise (50-80 stories, average 65 stories): 270

This comes out to $1.38 more per square foot for each additional story.

Let's just assume land will be twice as expensive in the city center as at the edge of that metro. Assume the cheapest land is $200 per square foot.

Assume that the house will be built on the cheaper land, and assume one dwelling per story for simplicity.

As you add a story, the cost of land is halved. After adding the 65th story, it is divided 65 ways.

By adding the linear curve of building cost over the inverse curve of cost of land divided by story, you get the cost per square foot per story. In fact, this is maximized for a single-story building as land costs are born by a single tenant. Cost per floor falls until construction costs overcome the falling cost of land.

The minimum cost to add a story, $214.67 occurs for the 12th floor.

Again, back of the napkin and very naive.

A highrise will probably have less square footage per dwelling though. If we halve that the cost of land falls even faster, with building costs plus land costs bottoming out at $203.51 per square foot, for the 8th floor.

Finally, I added an $8,000 per square foot premium at city center. With this, the cheapest floor costs $348.44 per square foot for the sixth floor.

So as land prices become steeper from city center to periphery, it actually makes more sense to disperse. Likewise reducing dwelling size does not have as much of an effect as rising build costs.

And that's just the construction cost. Then the operating costs (maintenance, fluids, security, etc.) per square foot of a highrise can easily amount to 3x the one of a lowrise.

>Second, traffic from density imposes costs on transportation. So movement is more difficult in a dense environment.

haha what? no. Suburban sprawl and car oriented transportation systems are dramatically more expensive than denser communities where you can viably walk, bike and take public transit. There are all sorts of studies on this.

Consider how expensive it is to walk 15 minutes to work for example. (it's free)

Doing the same distance in a city, compared to the countryside or small towns, always takes longer.

Driving is slower (traffic jams, traffic lights, crossings everywhere...).

Public transportation is slower (think train and long/middle distance busses vs local busses and subway and tramway with their stops every few hundred meters).

Cycling is slower (same as for cars + the repeated effort of restarting after every slow down or stop + damn paint and gutter plates everywhere that should be avoided or ridden with care).

Heck! even walking is slower (pedestrian 'jams' slowing you down, avoiding people, traffic lights, crossings every 50 or 100 meters, cars/trucks parked on sidewalks...).

Basically, what's fast and efficient is a point to point transport with 'emptyness' between the nodes. It's not being bogged down on a dense axis or area.

Because of urbanization which will continue to go on for a long time it's going to be next to impossible to drive prices down around the big cities.

People will simply just move as close to opportunties as possible and that will drive prices further up.

This is why cost of living is going up not down. For all the great things technology does it doesn't solve one of the most fundamental needs of humans.

The best thing about a city is the forced contact with people who are radically different with each other. Only with time spent together can you begin to understand one another [1]. Given the vitrol and hatred being dished out between disparate groups around the country and the world, making city life affordable has an undeniable macro-level social good aspect to it.

[1] one reason why many of us are hopefuly that the Internet will increase our contact with others around the world with radically different upbringings and world views from our own, helping us understand and empathize with one another better.

Sorry but this feelgood empathy-saves-us-all stuff really irks me, frankly I'm not convinced the world will suddenly get better if we all learn to communicate our feelings more effectively.

There are plenty I wouldn't bother saving in a life-threatening scenario, and they're perfectly normal people that I just happen to have fundamental disagreements with.

That said, I think we are witnessing the effects of your ethno-emotional proposal -- we are all forced to confront each-other's differences as we all come online and the world is convulsing. The internet is amplifying hatred and fear rather than dispelling it.

That's because the Internet does not require human contact. We all act differently in person than from behind a keyboard and a Wi-Fi connection.

One of the key point that the article makes is that change happens over decades. That's not to say that some change can't happen over shorter periods but anything fundamentally altering is something that may produce effects in thirty years--and probably in a way at least somewhat different from what was intended.

It's 2016. Why is that picture blurry?

If you're using NoScript the image is blurry until you allow newyorker.com

I'm on my phone in Chrome (so no extensions) and it's super blurry.

I'm on Chrome (iOS) as well. It remains blurry for ~5 seconds and then gets up to normal resolution.

It's blurry for me unless I disable uBlock (ad blocker) and I don't use NoScript. It does still pop up the full clear version if you click on it. That's a new 'reason to disable ad blocker on our site' though without something pointing it out not sure if it's doing any good.

Maybe it's an artistic statement on how a beautiful city may exist before your eyes but if you can't afford it then it may as well be a mirage.

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