America Needs Small Apartment Buildings
bloomberg.com
bloomberg.com
Developers have a huge land bank upon which they could develop high density cheap accommodation using modern commercial property techniques however this would destroy their market. It's better to release 200k of 'stock' per year in the market to maintain high house prices.
It helps that the government has pretty much stripped the ability of councils to build houses, and more importantly, the sale of council houses (right to buy). Bring in the fact none of these houses have a 'no second home' clause means they are bought up as buy to let facilitated by a change in banking regulation in 1996 that allowed buy to let mortgages.
So yeah, we have a housing stock problem. Start thinking about it like the diamond business and the similarities are quite scary.
The only thing separating a buy-to-let landlord and their tenants is mortgage availability (i.e. Existing wealth and income multiples)
the renter pays more than
- Can't rent out the property.
- Property needs to undergo repair.
- Tenants don't pay rent, destroy the property.
- Liquidity risk: property is not as easy to sell as many other goods, in case of emergency.
All of the above happen with a certain probability and that needs to be priced in. The last one is rarely a problem but the others are major considerations. And I have not even mentioned transaction costs for buying/selling a property, not to mention taxation. For these reasons, property typically doesn't have a good ROI, vis-a-vis e.g. investing in shares. A lot of property investors are naive, and would be better off investing in a passive index fund. So in many cases tenants get a good deal. In my experience buy-to-let is lucrative primarily when
- Landlord has multiple properties, Economies of scale kicks in.
- Landlord has relevant skills (plumber, electrician, or ... tax expert, lawyer) so he can get some jobs that need to be done substantially below market price.
- Is physically close to the property, so can visit/check easily.
- Has unusually low cost of capital (lower than bank-based mortgages).
Ideally more than one of those.
only thing separating
Plenty of countries do quite well with mostly-rent based system. German Chancellor Merkel rents, for example.
>>For these reasons, property typically doesn't have a good ROI, vis-a-vis e.g. investing in shares.
Have you seen the UK property market recently?
This seems a bizarre assertion given market patterns over the last 15-20 years.
crowd out the market
push up prices
Neither have all that much to do with buying vs renting.
It changes the prices of properties. When existing owners have much easier access to cheap credit than potential owner-occupiers, they compete with these folks and push prices up. There is more demand to purchase. Not more demand for properties to live in, but more demand to purchase. First time and young buyers get priced out.
>> Rental prices
I wasn't talking about rental prices, I was talking about purchase prices.
The result is that instead of younger people paying a mortgage and gaining an asset over time, they are doing that for someone else.
young buyers get priced out
Giving a mortgage to everyone encourages financial rectlessness, which lead to the financial crisis of 2007–2008.
No, it's not, and it's not even to the owner-occupier's benefit that the market inflates so much.
>> Dwellings should be purchased only by those who are very likely to be able to afford this
Young people can afford this, who the hell do you think is paying the buy-to-let mortgage crowd's mortgage? The fecking fairies?
>> That's why stable job with good career prospects, married with children, being able to afford substantial deposit, being older, are good heuristics for who should by property.
They're good heuristics for who should already have property, and already have a substantial sum paid down. Something unachievable if people cannot get started in their 20s.
>> Giving a mortgage to everyone encourages financial rectlessness, which lead to the financial crisis of 2007–2008.
I'm not advocating giving a mortgage to everyone, I'm advocating giving out fewer mortgages to those who wish to buy more homes - they're effectively leveraging cheap mortgages to get someone else to buy them a huge asset, and at the same time making that asset further out of reach for the person who is really paying for it.
who the hell do you think is paying
should already have property
I'm advocating giving out fewer mortgages
This is less frequently the case in the UK, as the inflated market keeps people renting for longer.
>> Why? What's wrong with renting?
A lot, if that's not where you want to be, and have seen the market mutate in the space of a few years from somewhere that was inclusive for most people earning a decent wage, to something reserved for few, or those who already have property.
>> I'm advocating building enough dwellings,
Good luck with that. Restriction of mortgage is not "doctoring the symptoms" when easing up on certain mortgage categories has been a major cause.
I haven't mentioned those other methods, I have no opinion on them.
keeps people renting for longer.
A lot,
Restriction of mortgage is not
"doctoring the symptoms"
So what? People who don't want to move a lot find they must keep paying someone else's mortgage as they can't get their own.
>> Yes it is, because it neither reduces demand for, nor increases supply of dwellings.
If buying up housing is made, by whatever means, financially less attractive to those who already own homes then of course this tackles demand for purchases and allows more people who are forced into renting the ability to buy their own home.
as they can't get their own.
Finally nobody needs to own their dwelling -- renting is fine. I rented most of my life, and so did German chancellor Merkel.
someone else's mortgage
Finally you seem to think that there is a difference between a first and second mortgage: the first being given by magic first-mortgage-fairies out of the goodness of the lender's heart and the second out of sheer greed to oppress people like you. Well, I recommend a quick calculation how much you overpay on the property if you get a first mortgage, vis-a-vis a cash purchase.
forced into renting the ability
Highly leveraged buy-to-let empires are, on the other hand, the paragon of financial sensibility?
Much as private landlords are famed for keeping their properties in good repair?
Highly leveraged buy-to-let empires
> - Property needs to undergo repair.
> - Tenants don't pay rent, destroy the property.
> - Liquidity risk: property is not as easy to sell as many other goods, in case of emergency.
I think only the last one is a real problem. If you buy your own house, then you are your own tenant and your interests align with yourself. You won't destroy the property or leave it empty.
Liquidity is going to be a real risk in the coming negative equity / house price crash however. People forget that not only do house prices go down, but houses become difficult to sell at any acceptable price.
buy your own house
The one huge issue is that the (richer) buyer costs are normally subsidized by the (poorer) renter by government transfers and regulations that force prices up.
Remove the government mangling the sector, and I fully agree, there's no problem at all.
To illustrate, let's say there are no buy-to-let landlords. Let's also assume the majority have a strong preference to purchase a property over renting (a potentially "better") one (which they do in the UK).
Currently (esp. with the presence of cheap credit), individuals are constrained not by their monthly outgoings (as they would be with rent) but with the amount of leverage the bank will permit them (i.e. their existing capital).
This means the market stabilises at a lower monthly ongoing than it would do if there were no capital constraints.
Thus, once buy-to-let landlords with significantly more capital participate, individuals can be "priced" out of the purchase market they would otherwise participate in.
They are instead forced to participate in a rental market that has no capital requirements. Thus, the prices are no longer constrained and can rise.
This can quite reasonably be seen as an unpleasant situation for everyone currently with limited capital - as they are further prevented from obtaining more capital, by both having less disposable income and not receiving the capital they would have from ownership of their property.
They are a terrible idea, because they encourage irresponsible risk taking in two ways:
- People who are not stable enough to be able to carry a mortgage until it's paid off suddenly can buy dwellings.
- It fuels speculation: just get a dwelling in a desirable area, wait for a year and flip it.
Indeed this was what caused the financial crisis of 2007–2008. Do you want to go back to this?
Asking for ~ 1/3 of the dwelling's price as deposit is a good (and time-tested) heuristic for filtering out those who have a substantially high probability of being financially irresponsible.
prevented from obtaining more capital
While there have been shenanigans in the past, up to so called 'career mortgages', where the mortgage amount was based on your career potential, nowadays the lending norms are pretty strict.
I guess it helps there is a 2% tax on the total sum when buying a house, so flipping becomes even less attractive. At least I've never heard anyone about flipping, that is a foreign concept to us.
According to a graph[0] I found housing prices dropped 15-25% between 2008 and 2013. But I feel this was caused by the financial crisis, not the other way around. Yes, a lot of mortgages went under water, but there is simple fix for that: don't move.
Requiring 1/3 down payment seems like it wouldn't allow anyone to buy a home. That would basically require you to 'pay' the mortgage twice, once as rent and once as savings, for about 10 years. Using the average income of €35K, which leads to a max mortgage of €154K, you suggest not living in a home worth over €77K?? I'm not even sure those exist.
[0] https://www.berekenhet.nl/nieuws/prijsontwikkeling-huizenpri... (the lines are different types of homes)
In fact you now have a situation where people hitting retirement, buy houses to let to ensure good income.
We are now in a situation where generation X will almost not be buying a home for until their late 30s.
It's go so bad that St Ives introduced a 'no second homes' clause to all new builds.
I actually think there is nothing wrong with buy to let however you need strong rights for tenants as well as rent contol. Something Germany has successfully done and people are quite happy not owning houses and renting for their life knowing they have strong rights to stay with safe rent levels.
generation X will almost not be
buying a home for until their late 30s.
rent contol.
It's quite simple in fact: supply and demand of dwellings needs to be in synch. If you have immigration and/or reduction in family size, you need to build more. For various reasons the obvious solution is typically rejected ...
Germany
Germany only has "soft" rent controls. Their purpose is not to actually keep rents low, but to slow their increase so the market has time to react by building new homes. The rent index that municipalities maintain for that purpose also helps with keeping rents transparent, but that's more of a side benefit.
Buy an old house, preferably a Victorian terraced house or a solidly constructed 1930s-1960s council house.
With some modern design concepts (e.g. leaving plenty of plenum for unanticipated future cabling/plumbing needs) I think you could come up with a very pleasant place to live, just at probably quadruple the price.
Is anyone building stuff like this today? Or would this have to be some extremely custom stuff you need to research and act as a contractor managing a bunch of subcontractors?
> Is anyone building stuff like this today?
can it even be done while satisfying modern building codes and energy efficiency requirements?
They are built all of the time. Invest in good windows, metal roof, and good drainage and the house will be around 200 years from now.
The farmers I worked for as a teenager revovated their Dutch built barn (ca. 1660) into a home. The secret is keeping the water out.
Nearly every one of these criticisms is a desirable feature of traditional Japanese architecture. Houses are assembled from standardized materials produced off-site and fitted together without nails (wood joinery). Many interior walls and some exterior walls are literally made of paper, in sliding wooden frames (exterior shoji almost always have sliding wooden covers that are deployed at night). Special attention is paid to the thatched or tiled roof.
Japan is a very wet place. In summer there are typhoons at least every week and it's miserably hot and humid. Traditional houses are perfectly adapted for this: when you need to you can slide open most of the walls and take advantage of every breeze. I believe that most of the wood is cedar, which is resistant to rot, and most of the structure is left visible (i.e. no plaster) so any problems are readily apparent.
Houses seem less adapted to winter, but people adapt by using deep baths, kotatsu, and quilted clothing to heat their bodies rather than the entire inside of the house.
Earthquakes are pretty common in Japan, one of the reason lighter materials are used. Traditional buildings are typically built on stone foundations. Structural posts are fitted with stone "feet" that are free to slide around on the foundation during earthquakes.
Japanese don't value permanence in architecture the way Europeans do -- even the Ise Jungu (shrine), a national monument, is rebuilt every N years -- yet in the area I lived (Nara prefecture) there were many traditional houses over a hundred years old. There is at least one wooden building at Horyuji (temple) that is ~1200 years old.
[Thanks to Dr. Lloyd Fulton for that class in traditional Japanese architecture at Waseda U. Miss you, sensei.]
That may be a big part of the explanation. It's fairly common for Japanese people to have the existing house torn down and rebuilt when they buy a property.
More importantly, when you speak about these throwable houses, are you sure that is a "desirable feature"?
It might be that the UK has more than its fair share of cowboy builders. It is not the building technique that is at fault but the execution of it.
I'd speculate that a well-build modern wood-and-sheetrock house is probably more energy efficient and quieter than an early 20th-century double- or triple-brick house.
Also, wood-and-sheetrock is a lot easier/cheaper to replace than brick when a tornado comes along and knocks the house down, which is possible in 75% of the US.
The UK is basically tectonically stable, which means those brick houses aren't likely to collapse into a multi-ton pile of bricks when the mortar crumbles or cracks in an earthquake. The same cannot be said of many areas in the USA, and it only takes one earthquake every few decades to drive that point home.
Even until a few years back it was all clay bricks.
Agree with you. Full concrete homes are basically the furnace and freezer experience.
So in a thermal wall, you should match the rate at which heat conducts through the wall to the thickness of the wall, such that it takes about (12 + 24n) hours for heat applied to the exterior of the wall to radiate from the interior of the wall, and vice versa. You're trying to eliminate the daily temperature variation, so that the heating or cooling load will be more stable.
Adding phase-change materials to the concrete mix would help, but for the most part, the traditional building method in the region has been tuned by trial and error. If you build an adobe house in New Mexico, you make the walls from local materials, with the same thickness as the traditional homes. Or you get an engineer to do the thermal calculations.
Most houses built in the US just stick to the building code, which is generally good enough to accommodate local weather conditions without breaking out the calculators.
(the basic idea was to model the wall as extremely thin slices so the heat transfer between slices can be approximated easily. How thin? You kept making them thinner until the model stabilized).
The wall thickness we derived was very close to the wall thickness traditionally used by the indigenous people of the area. What are the odds? :-)
The outer cavity is designed to stop water from crossing from the outside to the interior.
There is a fashion for filling the cavity with insulating materials, but that leads to problems because it can draw water between the layers.
I also own a rental house that is 100 years old made of 14" thick mud adobe walls, including the interior walls! Also done for temperature control.
American construction is strong enough to last for a few hundred years if you maintain it. While it isn't passive house efficient it is efficient (and it isn't clear that a passive house is even possible in our climate - many of them make other compromises which means they rot out in a few years).
How can you know about r-values but not that every modern house built has cavity walls that can be/are insulated?[1]
Even hundred-year old houses can be insulated by DIY drylining. You'll lose about 10cm of floor space though. Sometimes there's even some government grants available for this[2]
[1]http://www.residentialenergydynamics.com/portals/0/Resources...
[2]http://i.telegraph.co.uk/multimedia/archive/02041/jeff-howel...
Note that bricks are not a strong as wood under tension. They do well under compression, but that is not all the loads to account for. Bricks are used in cities and commercial construction primarily because they do not burn and so you can use them as a safety barrier.
Seems like that would make it harder to frame a new subdivision in under a week.
At least until the next earthquake, which is a real possibility in much of the US. Light frame houses survive earthquakes pretty well. The brick chimneys on them don't.
> Houses here are routinely hundreds of years old where in the US the approach seems to be to knock down the wooden houses and build them again before they get that old.
Well, yes and no. The US isn't that old. There weren't a lot of homes here hundreds of years ago so obviously there aren't a lot of 200-year old homes now. But yes, there's also a fair bit of demolishing of 50-year old homes.
Yeah, I don't understand the comments in this thread that talk about water damage. Do people in Europe just not bother maintaining their roofs? You can get hidden water damage from a leak into a hollow wall, but it's really not that common. Typically there's visible water staining and severe damage only comes from willfully ignoring that signs.
https://en.wikipedia.org/wiki/New_Madrid_Seismic_Zone
It's going to be an ugly, ugly thing if another major quake hits there. The last time the region was sparsely populated. Now there are cities all over the place and and the seismic codes are far more lax than they are in California (if said codes even exist).
Most taxes have some sort of efficiency cost (e.g. income tax means people work less hours than they otherwise would have). Recent modelling by the Australian Treasury suggests that a LVT (set at a sensible rate) actually has a negative efficiency cost: that is, it increases economic efficiency, resulting in higher levels of economic output.
Modelling: http://i.imgur.com/NxWo7DP.png
EDIT: and just for some general background - https://en.wikipedia.org/wiki/Georgism
Instead they either have single family homes (that's okay) or they have trailer parks --if it's a college town then they have squat apartment buildings with little in the way of design other than cheap and utilitarian with very little noise dampening, for the most part.
If you travel thru rural California (HWYs 49, 120, 99, etc) there is so much sprawl consisting of cheap housing --instead of gobbling up farmland with crappy buildings they could build alright apartment buildings resulting in better quality of life for the residents (better concentrated service, more walkable for the poor folks, etc.) on the other hand, fewer taxes for the municipality, given the property tax system.
it's not expensive, either.
https://www.google.com/shopping/product/1727307288755176845?...
of course, I've never installed the stuff (I've heard stories, though) so I don't know what it does to labor costs.
Of course the cheapest thing of all is making a building out of concrete or masonry that can last for over a century and has inherently great noise dampening.
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The brackets are 'dry wall' but mandate the higher quality stuff that won't support mold growth.
Yes, there's an inner gap between the outer walls, and the floor/ceiling have a bit of extra padding of some structured engineering product that dampens vibrations.
The outer walls have studding to allow for cords and in-wall plumbing.
Do NOT run plumbing or put any shelving/fixtures on walls adjacent to another unit.
I haven't seen, or figured out my self, how to make the vertical noise isolation equally effective. I suspect a dedicated between floor crawlspace would be effective (but raise costs notably).
The core-wall approach CAN lower costs since it allows for a structural core with studs as dense as desired and no cut-outs.
1/2 layer of cork underneath the top layer of flooring is inexpensive and effective for noise isolation ...
Once I lived on the bottom apartment in a two storey apartment block. The floor boards were a nightmare and eventually we had to move. Upstairs footsteps across the floor were loud enough to wake us up, and I don't just mean squeaky boards, but just the thumping knocking sound resonation. Sometimes I could make out the words being said in their conversations. Never again.
In the concrete building, we could never hear neighbors above of below us, in the wood framed building, we could hear foot steps and even voices. Our upstairs neighbor had a squeaky bed and we could clearly hear the bed every time they were intimate.
I'm with you 100%. Let's focus on building high quality units that will actually last longer than 10 years. Sure, it'll drive up the rental prices, but hopefully people would move out of the cheap garbage everyone is used into nicer units with privacy. That would open up a lot of space in now less desirable units.
Health code would be a good start. Hell, create a new sound transmission standard & test that actually requires the range of frequencies you'll hear in an apartment (including subwoofers and doors slamming), and make landlords have to supply that information if requested. At least I could actually shop around for something better instead of rolling the dice on neighbors.
I'd love a smaller (in land use) community to move to that is walkable and dense enough, but it just doesn't exist, or the downtown core is too expensive for the area (apartments the same as a largish house just outside).
Small towns in the US used to be like this, but the main streets are all dead now for various reasons. (The big reason that I can think of is that franchises prefer to build their own buildings on the fringe of town rather than move into main street buildings, plus the rise of Wal-Mart, but there surely must be others.)
Having lived in high(ish)- and low-density developments, the biggest difference is that in higher density, you walk ... a few blocks and there is at least some level of commercial activity. In low density ... you travel at least a mile, often several. And even the old town centers are evicerated -- commerce is on boulevard strips (and now is fading fast even there).
Small rural towns have a WalMart, Love's, Sonic, and a boarded-up downtown.
Even Silicon Valley, with its staggering home values, barely has the density to support a marginal commercial district -- Castro, California Ave., University Ave., and Santa Cruz Ave. in Mountain View, Palo Alto, and Menlo Park, respectively, come to mind. Yes, there's some retail and activity there, but it's only modestly functional.
In older and more compact places which haven't entirely died, you'll find that density, and it works. It's almost always some sort of tourist destination these days, in the United States, though.
I will be a fossil before this ever happens in Mountain View.
I used to live in a garden-style apartment within walking distance of downtown Mountain View. It was an old building, and my rent was $1900. That was considered affordable for Mountain View, but no amount of savings could ever persuade me to move back to there. Like someone stated above, there were no amenities - no in-unit washer/dryer, no updated appliances, etc. The walls were horribly thin, and none of the cabinets or drawers closed properly.
So, I'm now living in a newly-built, sterile mid-rise 12 miles away in downtown SJ. I would have loved to stay in Mountain View and keep my short commute, but there is still not enough density to bring prices down for the nicer buildings. The newer construction on El Camino are going for $3k for a 1-bedroom (and this, when the market is supposed to be cooling off). There was talk of another building going up on Shoreline, but of course the NIMBY crowd shot it down fast.
A good portion of trailers in parks are owned by the resident. They simply pay lot rent, which is usually around 1/3 of the price of rent. The folks that rent usually find the place is often larger, cleaner, and/or more private (in the form of physical space between neighbors) for a similar price. Additionally, it is easier to find in a rural location.
The sorts of places you speak of are often unaffordable to a lot of folks as they tend to be newer and in cities. Most do have green space, but few shops and few parks.
My understanding is that the squat buildings are cheaper to build partially because it is simpler to follow the building codes: Higher buildings have more codes due to fire safety and such things. This is the main reason most apartment buildings in Indiana are only 2-3 stories. They also fit in a medium sized college town of 50-100k people.
They may not be luxury dwellings, but for what you can get in a prefab vs. what you get renting an apartment, it's not even close- the trailer is going to be more comfortable by a mile, and cheaper to live in to boot.
Imagine a small town as a square of 16 100 story towers. You wouldnt need much roads, public transit, cabling, pipes etc. You'd only need 1 police/fire hall (albeit a big one).
I imagine that the 3 uncleanly neighbors will cause all 100 stories to be infested with roaches, and a place like that is too big to put up for a few days to exterminate.
I imagine you'll need a much better evacuation plan and a parking garage. You'll need stairs and a elevators and escape ladders and such things.
+1 on the evac plan, but walkable communities need fewer parking spaces because people dont need cars.
You know, I considered not adding in the parking spaces because of that.
But to be honest, I don't need a car. I walk nearly everywhere - the the grocery and all that even. But I (we, I don't drive in Norway yet) do have a car and tend to use it about 1 or 2 times a month, plus vacations and short trips. It means we can visit his grandmother an hour away without being stuck overnight and relying on rides from folks and bus schedules. Just because folks aren't driving daily doesn't mean they don't need the parking space.
It's a lot harder to make a snap judgement regarding a person's socio-economic status if they live in an unremarkable apartment. If someone lives in a trailer park or a terrifying drug-infested cinder-block shithole, though, you can make some guesses about them right away.
I snark, but I'm also serious. An awful lot of lower-middle-class suburbanites see large, inexpensive housing complexes (be they trailer parks or low-rise apartment buildings) as systems for isolating lower-class people from the surrounding neighborhood.
I would expect a really small apartment building project, well-integrated with my neighborhood, to face grassroots opposition. Some of the suburban governments I've lived under actually planned to demolish well-kept, inexpensive, functioning apartments and replace them with expensive single-family houses. There is more than a hint of racism bound up in this, and this seems so obvious to me that I'm surprised the article didn't even broach the possibility.
When I was 20 years younger, I might well have made the argument you're making. But I would have been wrong.
"Instead of spreading out over dozens of acres, you could have a couple of complexes with nice communal gardens/parks/playgrounds and have people live vertically densely enough to encourage shops." This sentence fills me with an irrational, existential dread. Likely influenced by my upbringing living in a developing neighborhood on the foothills of a smaller Wasatch Front city in Utah, but spreading out, having actual nature (not constructed nature parks) to enjoy, and not seeing an abundance of humans everywhere you go simply feels better, while high rises (like I see in Bellevue/Seattle) and the associated mini-parks/artisanal shops/population density are unsightly and less comfortable.
On the one side of the brain, you have this stubborn independent streak, where you have to own what you own. Then on the other side of the brain, you have this rabid fascist streak, where other people have to be told what to do with their property. And twixt the two, you have homeowners' associations, restrictive covenants, condominium associations, zoning laws, and local code ordinances.
On the one side of the brain, we have a burning desire to own the places where we sleep. On the other, we mortgage ourselves up to the eyeballs and beyond, NIMBY each other relentlessly, and generally spoil any effort to make housing more affordable, even for ourselves, because poverty is simultaneously a grave character flaw and a contagious disease. The cure is to make living in poverty cost more money (per quality-of-life-unit) than living middle-class, so that only the most diligent and disciplined can escape it.
You cannot understand it. It is indistinguishable from insanity to the rest of the world. Without looking too closely, it suffices to say that sensible community housing would severely impair our ability to mercilessly extract rents from each other. You can't really build a residence unless you can continue to make money from it long after you transfer title to a new owner. You have to let people think that they own something, even while you still control their use of it.
(This form of insanity often persists after an American travels abroad, even when the travel is explicitly for the purpose of building affordable housing in the destination country.)
As such, much sprawl is caused by the following pattern. Person finds local restrictions on property use too stifling, and too expensive, and builds just beyond the jurisdictional border. That person almost immediately votes to institute new restrictions on property use in their new jurisdiction.
In the US you need a car anyway, so it's a better deal to buy or rent a trailer than to live in some shitshow apartment complex. Lot rents are cheap and getting a new or used trailer is also a better value.
Also, thanks to ADA, midsize building are out. You need to provide elevators on multi-story buildings in most cases. No playgrounds either for the same reason.
Store fronts are an anachronism. Building new commercial property in places where you can't put a service business like a bar is pointless. And very few people want to live above a bar.
the other significant benefit of mixed zoning is that the city doesn't concentrate office space into pockets and breaks up peak hour travel across multiple directions and locations.
In both cases, at least one of the rows of homes is actually large condo units on top of ground level retail space. The homes in both developments are selling quickly and in the first, the retail spaces are also condo (owner operated, or whatever you'd call it). It appears to be a mix of light food (coffee shop), retail, a fitness studio, and some small professional offices.
1 - http://www.crescentplaceleesburg.com/img/Waverly_Insert_Apr2...
2 - http://builtbytradition.com/development/developmentcurrent/j...
Oh wait, that's in my area, NYC. Maybe you should specify what area you're talking about too, this is a very regionally varying thing
Where I am you can get rent assistance from the council for up to 3 months. We this have lots of businesses that close after 3 months. A moderate newsagent type store on the high street is ~£5k per month (plus business rates, c.120m^2/1400sq.ft) - investors elsewhere don't need occupancy, they've already made back 100% of their purchase price in 10 years. They don't care if the space is occupied. Result, death to the city centre; it's all charity shops and pound shops.
... And like you say more shopping is moving off the high street too. But I'm not seeing the favorable high-street shop rentals you're suggesting.
(My current apartment happens to overlook a field in the middle of a city. It's great when they plant clover in the spring and the whole thing is bright red for a couple of weeks.)
What works much better, as far as I can tell, is a high-density neighbourhood with park nearby. See [2] for an example from the same city.
[1]: https://www.google.de/maps/@52.4408185,13.43766,3a,75y,87.23...
[2]: https://www.google.de/maps/@52.4957626,13.4272094,3a,75y,63....
I think a key distinction is that to work well these developments needs to be demand driven, and social housing needs to be integrated without being allowed to dominate.
Norway has its share of bigger apartment blocks built rapidly right after the war to cover a lot of social housing too, and they tend to have been a bigger problem. But most of the house building in Norway after the war was part funded by government through cheap loans etc., but were managed by private house-building associations that built based on which locations and types of housing was attractive to people. And that's what has driven a lot of the building of areas like the ones mentioned above.
So there were fewer large scale attempts at building these huge social housing estates that have served to basically concentrate social problems in some countries.
E.g. near where I live now in London we have a couple of major council estates that used to be big problems because they were basically a way of building cheap housing out in the middle of nowhere with no services, and dumping thousands of underprivileged people together there. It was thought of as massively progressive at the time - you built pretty much villages (these estates have their own shopping parades) out in the middle of nowhere. But while many of the people given flats there were regular families, many were also people with additional problems ranging from mental problems through drug/alcohol problems and other issues that contributed to making the estates themselves hotspots of social problems that affected everyone. One of these estates had a life expectancy five years below the UK average for a long time, and it took decades to normalise things there.
Currently, partly as a result of financial constraints, partly as a result of harsh lessons like that, most new social housing in London at least comes in form of concessions by developers as part of the planning process that involves much lower concentration of subsidised or council run properties in any development, rather than building these large estates.
So I don't think the problem with the more suburban apartment complexes had much to do with the concept, and much more to do with an execution where it was often driven by ideology and totally unproved theories about city planning that were allowed to run amok in the post war period in an urgent need for volume that favoured large projects even when how they affected the integrity of the cities was unproven.
i just believe the evidence points at high-density mixed commercial/residential housing to be the dominant option. My second example, for example, is from Berlin's historically poor neighbourhood, with unemployment today still at 13% (3 times national average). Yet it's the place where everyone wants to life.
Your example, of London requiring social housing as part of new developments, is the kind of policy that's made with an eye towards such observations. It's not just aimed at creating affordable housing, but something that will benefit everyone living there.
My hypothesis is that it is not the relative fraction of potentially troubled individuals (for lack of better words) that makes or breaks a neighborhood, but their absolute density. No matter how many affluent, stable, nice people you add to the mix, they are pretty much invisible when it comes to creating a positive or negative impression. If "misery per acre" reaches a certain threshold, sad individual fates start influencing each other negatively, multiply and eventually dominate the whole place. Up to a certain, moderate density, stable individuals pull up the troubled, upwards of some undefined density threshold, the troubled start pulling their environment down.
There are a few factors I've heard for this trend:
- There are ample green spaces between houses, but they're too small for some of the purposes parks serve, like sports, or to have barbecue without someone calling the police.
- At the same time, they don't replace gardens because you wouldn't be allowed to grow anything.
- They are, however, large enough to lower the density of the neighbourhood, to a point where retail locations are no longer comfortably reachable on foot. It's not quite obvious from looking at it, but my second example has probably 4x the people per area than the first.
- Depending on the social structures, these developments can further crime because they offer many small, unobservable spaces and getaway routes.
Some of it may also be the result of the location where these developments were build, or that they were initially occupied by a very homogenous population (young families in the 60ies -> old people now). But the trend has moved decidedly towards higher-density mixed environments.
That may be a measure of success. If people have chosen to stay in the same neighbourhood (or haven't chosen to leave) then it at least suggests the local community is functional?
My wife's grandmother lived in such a town, and when we visited it was clear the town had seen better days. Most things were closed, hardly any people our age, and those that remained were looking to leave. Almost everyone we saw was old.
It can mean success, but doesn't have to.
Real estate is cyclic. When I was a kid, whole stretches of blocks in the Bronx or Brooklyn looked like recent war zones. Now they are good working class neighborhoods.
Likewise, quaint country villages near where I live now are decaying rural slums.
* As a resident the grass is useless. You cannot use it like a garden because it's not yours. You cannot put garden furniture there or plant things. Sitting there feels weird because all the neighbors can watch you from above.
* It doesn't work as a park either. People will not feel comfortable walking around or picnicking on these bits of grass, because they are too small and clearly belong to an apartment building.
* They turn into parking lots, because people want parking more than useless bits of grass.
The traditional closed city block structure is better and very popular. Building around the perimeter right against the street and a shared space in the middle.
Green Parking Lots that would be something nice..
These are abundant in Germany, but the green that grows between them isn't exactly a pleasant sight. They are not so much used for the greenery but as a compromise between natural seepage and vehicle compatibility.
That seepage is important because any sealed off surface area increases flooding risk downstream. Of course nobody really cares for that, but the sealed surface also determines your utility bill for wastewater treatment, and people quite certainly do care for that.
I'm not saying the pictured is a horrible dystopia, but it could have been much nicer. Nobody is going to sit under those trees among the cars.
China does suburbs vertically.
Sure malls and other small time commerce will develop. Malls also exist to serve traditional American style suburbs. But these places will never be urban centers in their own right.
From what I've seen there's a ton of this type of development in China. Admittedly what I've seen of China's country side is mostly out a train window so obviously I'm only seeing places meant to be serviced by trains.
Owners of assets prefer to have those assets appreciate over time.
This applies whether you're holding cash, gold, stock, bonds, loans ... or real estate. Or capital goods, educational degrees, guild memberships, computer language skills, etc.
The basic principle is simple: if the value of whatever it is you're holding goes up, you have more financial wealth.
One consequence is that whoever it is that holds some asset will tend to talk it up or otherwise see that what you own, or have, or control, appreciates in value.
Among the key ways to do this is to control the supply of a thing -- this is what cartels (De Beers, OPEC, Standard Oil), guilds and professional societies (medical and lawyers credentialing organisation), taxi medallion holders, and homeowners do.
If the good is simply an investment asset, and has no productive or consumptive value of itself, say, stocks or bonds, this isn't much of a concern. You may still have problems of asset inflation bubbles, but nobody will be deprived of life nececessities because stock prices are doubling every 10 years.
For housing, both the price and the supply impacts have tremendous effects. Households are forced either to spend an inordinate amount of income on housing, to live far from work, or to crowd (often illegally) into small spaces shared with others.
Among the differences is that the investment asset is what I'd consider a Maslovian good: one that is essential to livelihood. Food, water, shelter, clothing, security.
There are some goods which have borderline properties -- they're both necessary and carry a strong Vebelen status-signalling component, such as college education (depending on the institution).
But generally, this case of treating things people need in order to live as investment vehicles ... seems problematic.
How to not do that becomes an interesting question. A Georgian land tax seems as if it might actually be one of the better options.
So you end up with a bunch of people, living in poor housing conditions, with poor access to quality transportation, which means the amount of time they are spending in transit, or the jobs that they can reasonably have access to, is constrained.
America should have spent more time trying to shift demand away from private car ownership and more towards effective public transportation. Doing so would make areas outside of major metropolitan areas available for middle/lower class people and allow smaller/mid sized cities benefit from the tax revenue.
Your most likely scenario is going to be a simulation that optimizes the preferences of the person seeing it up.
This is a problem and we haven't even come to the part about knowing how goals and actions interact with each other.
This would literally win you a Nobel prize and change the world.
You don't even need to run sims to get something better, you can just look at "organic" countries and cities and how they implemented their zoning.
Here's a comparison of Japanese and American/Euclidian zoning for instance: http://urbankchoze.blogspot.be/2014/04/japanese-zoning.html (the first link leads to an article on Euclidian zoning)
There are always going to be more desks than beds in central business districts.
The advantage of living close to a large urban center is that I can change jobs without a significant impact to my housing and lifestyle.
The opposite.
Like working from home?
I can't imagine why anyone wouldn't want to live this way.
We could just build more, better buildings; enough to make the price go down. There is no incentive for property developers to do this of course.
Today we have a much higher standard of living. We have decided that the toys, space, and luxury is worth more than the time we have to work to pay for it. Is this the right choice? That is an interesting discussion: I can take either side of it.
I know of a few people who have chosen to work less. They live a sparser life - generally working at WalMart or some such because the better paying jobs won't even give you the option of working less hours - this is a choice they made and they are happy with their life.
It is well known that there is a spike in deaths just after people retire: most people don't actually know what to do with more leisure time, and their work hours also double as part of their social hours. As such for many people working for luxuries is the correct choice.
Maybe we need to figure out a way to use technology to help the problem of high quality affordable homes.
Most people have multiple TVs with none smaller than 25 inches. Poor people today have 40+inch 1080 color TVs. Poor people often with a video game system. The Poor have cell phones and computers with internet service. No amount of money could get any of that in the 1950s, now it is considered normal for the poor to have them - legally.
If you think houses were better quality then you know nothing about construction. They might LOOK better, but in today's houses engineers have actually calculated wind load to ensure it will stand, r-values to ensure you can afford to heat it, and other safety standards so it doesn't kill the occupants. Of course most of that is invisible, you see something that seems like is is not flimsy and don't realize it is strong enough, while may things that seem strong are brittle.
http://www.epi.org/publication/charting-wage-stagnation/
http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor...
I'm not saying it's a zero sum game I'm saying that workers are getting screwed relative to capital.
https://www.amazon.co.uk/dp/B00I2WNYJW/ref=dp-kindle-redirec...
You can say "cheap Chinese labour has lead to cheaper goods". We aren't any richer adjusting for inflation, and are considerably poorer if you include land values in the inflation calculation.
And yeah 20-ish is really small.
I moved to Norway a few years ago. Getting a grasp on housing sizes has been a challenge so far.
His economy of scale argument cuts both ways. Putting a few more units in a city does not appreciably increase the strain on infrastructure and density, but it does much more so in the suburbs where he seems to want them.
"Failures" in urban planning are not necessarily shortsighted blunders that arose out of nothing waiting to be found by journalists.
99.9% of apartment buildings in Germany do not remotely resemble anything in Manhattan, and it works extremely well.
Those things don't cost very much when they're shared by a couple hundred units. That's why non-luxury hotels can afford to have such amenities for rather cheap nightly prices. A gym, in particular, is dirt cheap: ~5 exercise machines at even $1k apiece (a high estimate) is still only $5k, which is roughly a month's pay for many people. Spread that one-time cost over 200 units and that's $25 per unit. You can probably expect those machines to last at least 5 years, so that's $5 per year per unit. Whoopee. Definitely not "luxury", unless you're used to 3rd-world living conditions.
Probably if more decent small apartment buildings was available there would be even more of them. Especially in hot tech hubs such asn San Francisco it's ridiculous how many well-paid employees (FB,GOOG) still lie with roommates, because renting alone will eat too much of their paycheck.
Similarly I've gotten to play Rockband at people's houses but there's no way I could play Rockband in an apartment. Certainly not above the 1st floor with the drums nor on any floor with the singing.
Of course those are 1st world problems I suppose.
Nobody builds them, because people don't want to live in them. I lived in a "small" apartment building with like 8 units in New Orleans, and also in Seattle. They tend to be older, quaint, and rife with issues... heaters that don't distribute heat evenly, no amenities like a "full-size" apartment complex would offer (gym, pool, covered parking, in-unit washer / dryer hookups, proper cooking ventilation, someone to sign for package delivery, etc.), and not nearly enough sound insulation. Granted these things could probably be slightly improved with new buildings... but for a housing developer... why go through all the hassle of getting a lot zoned for multi-family if it's "cheaper for renters" (meaning probably less profit margin).
Having lived in small apartments and big apartments, and having my own house now... man, I love having a yard and space and not worrying about a line when I go to do laundry. But if I had to go back to apartment life, I'd want one of the big, resort-style complexes that felt like a college campus.
My mom own a few 4-12 unit apartments in CA. She bought them in the 90s, and charges what seems like a fortune in rent -- but after taxes, and maintenance, and all the various costs involved... she pretty much just breaks even. Her plan is to sell the buildings when she retires... and that'll be a nice windfall when that day comes.
Until then... as much as I hate to say it about my own mother, she's basically a slum lord. She does only the bare minimum to fix anything when it breaks, and drags her feet for tenants who complain too much in hopes they just move out. She has to manage the properties herself... deal with tenants who are late on rent, deal with all the hassles because if she hires someone it puts her into the red. We've had long discussions about it... the profit isn't there to justify spending more. She'll do the basics... whatever is legally required of her... past that she has no incentive to spend money on the properties.
Anyway I know there can be nice small multifamily structures, but in many places I think the landlords hit the scale issue. They don't make enough off the properties to hire better property management, or keep things as nice as the apartments that have hundreds of units. Maybe a brand new 6-9 unit building would be OK, but one that's 30-50 years old... it's going to have a lot of issues or sky-high rent -- or both.
If you lived in a city you could go to a gym run by someone who cares instead of something contributed by the original developer that will never be maintained.
You can't change up the population density, the property tax each family pays, and expect nothing to change about the school. Once I buy a house, I don't want that school to change... so yes, people do whatever they can to keep the population density of their school district from changing. Can't really blame them, can we?
We're watching the first part play out. At the end of our street, there's a garage that was built for a heating oil distribution company. Real estate prices are nuts (Boston area), and the heating oil company has either moved or gone under. The building owner is trying to redevelop it into a 4 story apartment (or condos, TBD) with 7 units. I went the the community meeting with my wife because she has domain expertise with the environmental side of such a redevelopment project.
People are having a fit about the building. It's too tall, it'll change the character of the neighborhood. What if the neighbors throw RAGING PARTIES on the terraces? What if they leave their lights on and they shine in the windows of the immediate neighbors? Can you put plants on the edge of the terraces to mitigate that? What if the new neighbors don't trim the plants?! The color the developers are proposing is too ... I don't know, but people don't like it.
The neighbors have been holding the developers feet to the fire over what amounts to 1) bikeshedding, and 2) what if we get bad neighbors? How much is it costing the developer to hold people's hands over these things? The only possible reason for doing this I can imagine is that there simply isn't a lot of unencumbered land waiting to be built upon, so infilling smaller buildings is the only way to go about developing unless you have the resources to develop something truly huge on a large ex-industrial parcel.
Don't get me wrong, I'm sympathetic to the fact that bad neighbors exist, and we like the neighborhood in part because it is quiet. Still, real estate prices are insane, and building more housing is the only way it's going to get better.
In the interests of full disclosure, we rent. Largely because we don't see staying here for more than another couple years (largely because we don't see a realistic way to become home-owners, so we're doing our part to perpetuate the property price problem).
We're largely insulated from any property value concerns that people may have about the new building. Still we like the neighborhood, and we do our part to be neighborly to the many owner-occupants we live near. We're as invested in the neighborhood as anybody who doesn't own is likely to be, but we do think the development is wholly reasonable and a great reuse of what is a hulking, windowless brick building.