How Tokyo built its way to abundant housing
jamesjgleeson.wordpress.com
jamesjgleeson.wordpress.com
> Japan has a relatively simple and unambiguous zoning code, one which the national government has repeatedly adjusted in order to allow for more housing growth in Tokyo. That has been done in the face of opposition at neighbourhood and even city level, opposition that in countries which have devolved land use decisions to a local level would be enough to stop densification or at least divert it to poorer areas.
We need more of this in the western world.
AFAIK EU zonings are not significantly (if at all) more complex than Japanese zoning, the US are the stand-out there with a constellation of byzantine exclusive zonings. I do know for certain that both french and german zoning are national/federal policy and (quite necessarily) mixed-use.
So it would probably be a good thing to unfuck US zoning (good luck with that though), but it can not be the "true essence" of the article.
My reading is not that the meat is "simple zoning" but:
1. Japanese people don't have "mandatory fantasies" of single-occupancy dwellings, and people are fine with living in good multi-family dwellings (apartments), note that the average Tokyoite dwelling is 64 sq m (690 sq ft)
2. Japanese people don't value buildings[0], only land
3. Which means tearing down buildings and replacing them is normal and expected
4. Which (combined with residential zoning concepts) means it's easy and common to redevelop low-density dwellings (single-occupancy and low-density 1~2 storeys apartment buildings) into higher-density ones, the graphs in the middle of the article could hardly be clearer there with single-occupancy dwellings having remained roughly flat but 3~5 and 6+ storey buildings having skyrocketed (alongside the number of homes having increased much faster than residential land acreage)
Simplifying zoning codes is not going to make Europe — let alone the US — adopt these mentalities.
[0] personal ones, family/clan homes & temples are a different case
This is becoming true in most of the housing-is-too-expensive cities of North America. In my neighbourhood in Toronto, most houses that weren't built in the last 20 years would be torn down immediately when bought so that a new monster mansion can be built. The plot of land is worth millions- but mainly because there's such a low supply of housing.
The trick is to build tall to multiply the amount of land. Otherwise, you get the horrendous situation Silicon Valley is in.
In London, views to St. Paul's Cathedral from a number of points around the city are listed, which apparently has made it nearly impossible (it's unlikely that it's the only reason, though) to build tall buildings where they would have mattered the most. London, of course, also has the green belt zoning restriction which also doesn't do house prices any favours, but doesn't explain why density in the more central parts of the city is so low.
Listings certainly serve a purpose in retaining some living history and culture, but in places it feels like the pendulum has swung all the way to making parts of the city into museum.
1. Buying houses is still very expensive. One of the reason it is "affordable" is because mortgages are low.
2. Housing is not a capital asset in Japan, but effectively a consumable good. As soon as you buy a house, the value get depreciated. I don't know the current numbers, but 10 years ago, the value of a house depreciated to nothing in 15 years.
3. This is one of the main reason why Japanese save so much, which has consequences on the economy.
4. The housing quality is terrible. Unless you can afford living in condos/high rise buildings/custom made houses, sound/heat isolation is non existent, amenities are not that great either. This is mostly caused by land high price: when you buy a house, 80+% of the cost is the land. Which explains 2. and 3.
IOW, I would not put too much on the cultural difference: there are fundamental reasons why buildings are not valued, which is linked to the exorbitant cost of land in cities, especially in Tokyo, because of the paucity of land in Japan. Japan has 130 millions people living in 250000 km2, 80% of which is not usable for housing. There are also a lot of regulations on the land itself: https://www.nri.com/global/opinion/papers/2008/pdf/np2008137...
Calling your state senator to leave a message of support takes just 30 seconds. Emailing them takes just one paragraph. In both cases, they don’t usually get much constituent feedback, so you really can make a difference.
The link above makes it easy.
For most people the "economy" mostly consists of (0) their job/income (1) food/consumable (2) stuff/durables (3) transport (4) vital services: health, education, etc. (5) housing.
1 & 2 are well served by free markets, and industrial capitalism^. We're "rich" in these. 3 & 4 are not, and are generally managed by governments. The long term trend is decent-ish though. Medicine, education and such have grown over the decades and people get more of this.
Housing is in many places (mostly successful cities) the economic disaster. Fully exposed to financialization, business cycles, inflation prone. Rather than signalling to supply, prices adjust to whatever the median person can afford to pay. Meanwhile, the whole market acts a mechanism transferring wealth up the generations & economic classes.
Especially in europe, the whole thing is stagnant too. Modern planning doesn't seem much better than old planning. Modern building is not much better/cheaper than old building. It seems that we have less ability to deliver on larger & more ambitious projects than they did 100 years ago.
Interestingly, this generational stagnation seems to hold for both the liberal and ex-communist parts of europe. No one wants to go back to soviet supermarkets, cars or electronics. Soviet housing system...? opinions vary.
Housing is the biggest problem in our economic lives.
^excepting mattresses :)
- land owners who wait to sell at even higher prices
- drastically reduced social housing construction (Sozialer Wohnbau)
- heavy influx of foreign capital (at least in major cities) reducing existing capacities
- missing holistic development concepts/strategies (one big exception is probably the Bahnstadt in Heidelberg)
- on average, low building height in city centers
The whole topic just hasn’t been a top priority lately and we’re moving way too slow to change that
It's just a dream with a lot of big holes, i'd love to hear how to make this viable.
Housing is nowhere near a free market. Public decisions control what can be built/rebuilt & where, essentially dictating "supply". It's also public infrastructure, services and wider economic policies that determine the value of that supply to consumers.
A quasi-laissez faire housing market can work. The US has many of them, in the geographically unrestricted cities like phoenix or.. lots of cities. The city/country builds roads. Land gets parceled into 1,000 - 5,000 sqm blocks and cheap houses are built on them, starting at $100k + taxes and land which are cheap relative to europe.
This can produce almost unlimited (given unlimited space) housing. Infrastructure is very basic: roads, sewage, etc. They usually don't have sidewalks, nevermind trams. They also produce low-density sprawl. As things get tighter, more and more burden is on cities to plan, provide infrastructure. Rights compete.
In theory, land efficiency and shorter transit distances should balance this out. In practice, land prices (enriched by infrastructure & proximity) generally outpace these efficiencies so house prices are higher anyway. Governments also limit supply in dense areas, because they can't keep up with the infrastructure requirements.
Truly revolutionary projects out of scope for private investors. First, horizons are too long. They can't wait 15 years for the value to emerge. Second, the governments' parts in the game (infrastructure & planning) is more important than private money's. Third, the money is too big, even for today's giant piles of cash. A small city (100k people) would cost 10bn to build, at least.
Often, that isn't possible due to zoning in these 'unrestricted' cities. Zoning tends to be really restrictive, up to the point of placing tight limits on the density of dwellings.
It's slow because you need to wait for many individuals in a market to act. They'll usually need to act in cooperation, piecing together smaller parcels. It's expensive because you are destroying housing to make housing.
Also, management of public infrastructure (even schools) is not flexible, adapting to local needs in realtime. A planner/zoner may look at an area, see that the infrastructure is insufficient and shut down population increases because they have no way to pay for more infrastructure.
https://collegiumacademicum.de/ (German)
Opinions vary for those who were exposed to privileged side only. In reality, most people had to wait decades for an apartment. There was an easy way to get an apartment though - get sent to bumfuck nowhere for infrastructure project (military base or factory, nuclear plant etc..). Or climb up the party ladder or get a job at well-connected company than get arrange you an apartment.
On top of that, many people were stuck in Kolchoz without any prospect of moving to a city. Thus were was no pressure to the system. If a city can't take in people - they're not sent in..
That's completely opposite to my experience in the GDR. Neither my aunt nor my grandparents had to wait "decades" to move into their Plattenbau apartments and I can assure you neither of them had been on the "privileged side", their Stasi files make that pretty clear.
For my grandparents it was a giant step up in terms of living conditions, previously they lived in an old house that didn't even have running water in the toilets.
In contrast to that, the Plattenbau apartments had very modern design and interiors, they are still living there happily to this day.
Of course, the GDR also saw its fair share of cronyism with all of its injustices, like they exist everywhere, but the Plattenbauten are still held in high regard by many East-Germans.
Maybe the Soviet approach wasn't actually that catastrophic it just didn't scale that well when applied to the more populated and bigger eastern bloc states compared to the GDR? GDR wasn't that big, so not that much need to force people to move around.
USSR had much worse conditions as a starting point. On top of that, it was an empire that had assimilation as one of it's goals as well as military targets to meet. Thus playing field for citizens was far from level. For example, even whole "strategic" cities were much nicer to live in that a regular cities. Better food, more exotic food options, better housing, more entertainment... You name it.
The whole approach of state-owned housing is not catastrophic. If you can build reasonably fast. USSR couldn't. After all, catastrophic productivity is what brought the red empire to it's knees. Why it was so bad is another topic though.
I was just comparing the average GDR house, to a modern one. It's not that different, and most people lived in an apartment then as they do now. Both are similar in quality & abundance to housing in West Germany, UK, etc.
Contrast this to manufactured goods. Eastern bloc residents couldn't get a car, and if they did it sucked. They couldn't get enough razors, toilet paper, car tyres. All the things that were abundant and cheap in the west, and are abundant and cheap in those countries now.
We can argue about the small/marginal differences in quality or abundance of housing under different systems. We can't argue about the massive quality & abundance differences for industrial goods.
This is why I'm quite leery of ideological "theory." From Marx to Rand, it all seems too grand to me. At the end of the day, these were economic policies and their successes and failures varied.
On top of that, a lot of people, even families with young kids, got "dorm" apartments with shared kitchens/bathrooms/etc.
So yes, housing quality between USSR and modern housing is quite big.
> In reality, most people had to wait decades for an apartment. There was an easy way to get an apartment though - get sent to bumfuck nowhere for infrastructure project (military base or factory, nuclear plant etc..). Or climb up the party ladder or get a job at well-connected company than get arrange you an apartment.
I don't see how that's meaningfully different from current day USA.
In America, you have to save for decades to afford a down payment on the chance to potentially land an apartment. But, if you enlist in the military or move to bumfuck nowhere, you can bypass that problem. And if you are willing to start climbing the ladder at a well-connected company, they will pay you enough to afford an apartment right away.
Sure, we swapped "government" for "corporation". But to a regular person, it's a pretty similar situation.
> If a city can't take in people - they're not sent in.. On top of that, many people were stuck in Kolchoz without any prospect of moving to a city. Thus were was no pressure to the system
As opposed to today in the US, where if a city can't take in people, they get people anyway, and they huddle under an overpass or setup a tent camp in a park somewhere. Pressure in the system is only useful if people react to it, and in America no one reacts to that pressure in any useful way. (to the extreme that it became national headline news when Utah decided to actually try to build housing for people who needed it - https://www.washingtonpost.com/news/inspired-life/wp/2015/04...).
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I'm not arguing that the Soviet system was good. But American housing has become so bad that it's understandable that for some, Soviet housing is starting to look appealing in comparison.
Indeed. And in Soviet system, nobody reacted for decades.
The main difference is fairness of playing field. In USSR, you could try to bribe your way into good living. In capitalist system, you can work your way through. In USSR, there was much less regard for quality work. On top of that, even the well-connected&bribed 1% of USSR would barely live like US middle class. If not lower-middle. Meanwhile working yourself up to middle class is quite doable in capitalist system.
Guess what? After collapse of communism, housing in small cities depreciate rapidly, while housing in capitals skyrocket. There's much many more small cities than there's economic demand for, hence not enough jobs in those.
EDIT: Even when new factories are built by capital, they are usually not in small cities in the middle of nowhere with limited worker pool, but on outskirts of medium-to-large cities in comfortable distance of capital/large city (think Tesla Factory). This makes small cities unfit for anything other than eco-tourism.
Of course it applies more to large countries, since small ones (like Montenegro) just never had the quantities of population to form too many extra cities.
Why should housing not be to governed by market forces? Housing shortages are due to regulations, from limiting new development outright, to limiting high density buildings, to heavy rent control (disincentivizing investment and maintenance), to regulations that just make housing investment expensive. Reasonable regulations should be the guideline, but they aren't. The most aggregious local example is San Francisco.
Soviet housing never worked. More to the point the wait lists for apartments was measured in years (ripe for corruption). The buildings were shoddy and depressing (hope you like grey). Urban planning was haphazard and may or not may have corresponded to where people actually wanted to live.
Also, Singapore has a semi-socialized system that seems to work.
That's true. At the end of the day there are only so many desirable beachfront properties, or direct views on Central Park. Those are going to be expensive.
>Singapore has a semi-socialized system that seems to work.
I know very little about Singapore, but I'll make two comments:
1) I'm skeptical about the feasibility of models that work in tiny regions with very specific constraints and applying them to big nations. But maybe there's something there to learn from.
2) At the end of the of the day, it's not magic. You have a lot of people, in a relatively small geographic area - you need to focus on density. You don't need a heavily socialized system to build dense housing - you just need to align regulations.
But more to the point: every super dense city I’ve lived in has had more expensive housing than the lesser dense cities I’ve lived in. Obviously something else is going on, density itself isn’t magic.
Of course it's not. You can have dense cheap cities (Tokyo, Chicago), dense expensive cities (Hong Kong, NYC), sprawled cheap cities (Houston, Indianapolis), and sprawled expensive cities (Palo Alto, Los Angeles). Density doesn't make a city cheap any more than it makes it expensive. Supply relative to demand does.
If you want a nearly perfect predictor of housing prices, don't look at density, look at the vacancy rate. The vacancy rate is probably the most direct way of measuring supply vs demand. If you have a high vacancy rate, you have a cheap city, and if you have a low vacancy rate, you have an expensive city.
The reason density is often touted as the solution is because increasing density is an increase in supply. It only moves the needle in one direction. Sprawl also moves the needle in that same direction. Cities with lots of space to move out have both options, and typically sprawl is cheaper. A city like Seattle or San Francisco doesn't have both options, so density is the only way to increase supply.
This tv show on amazon prime was really good insight to soviet life during stalin times, based on the life of Regina Zbarskaya. I really enjoying looking at the houses across social classes, streets in different cities, law enforcement, morality, relationships(eg: giving up your apartment is the biggest favor you could do, staying in relationship with someone because they have govt allocated apartment ect)
https://www.amazon.com/Part-9/dp/B01GU8D4IK/ref=sr_1_5?ie=UT...
And yet there was no homelessness in the USSR.
If that's a system that doesn't work, sign me up for two.
Seriously, I cannot find polite words for people praising USSR
But the USSR was just one system of social housing. Have a look at what's happening right now in South Africa with what they call RDP housing:
https://en.wikipedia.org/wiki/Reconstruction_and_Development...
Sounds good on paper. However it has so many problems:
https://www.dailymaverick.co.za/opinionista/2017-03-16-gover...
http://www.corruptionwatch.org.za/cracks-exposed-in-rdp-hous...
http://www.cplo.org.za/wp-content/uploads/2017/02/BP-432-RDP...
Since it was a subject of official denial, records and stats would likely be hard to find.
Was there no homelessness or did the state just say that? Just like there are no homosexuals in Saudi Arabia or Chechnya?
Just stop, you have absolutely no idea what you're talking about.
Source: grew up in USSR, 4 people in a 10 sqm room.
>If that's a system that doesn't work, sign me up for two.
Okay, step one is to starve millions of Americans to death in order to reduce demand. What's step 2 again?
The limit is transportation/infrastructure. not buildings. You need NYC's roads, schools, and subway etc before block after block of 40+ floor building are viable. It'a very much a tragedy of the commons situation as a single high rise is fine but 100 of them are not.
Unfortunately, most areas are regulated at the local level which while better than a free for all creates massive problems.
I would posit that the best solution is state level control + an infrastructure tax on new development. Charging ~30k per SFH might seem to make things more expensive but by allowing new entry to pay their own way let market forces work while adjusting for externalities.
Luckily, you can build infrastructure as it's needed. If traffic gets bad because 100k people moved in and it's straining the transit system, you've got an additional 100k people who will help pay for it. We've been doing it this way for thousands of years, so it's pretty hard to argue that it doesn't work.
When 100k people move in and you need a new water treatment plant. Those 100k people should pay for the water treatment plant not everyone that lives in the area who also paid for the last water treatment plant.
Further, you need to start building infrastructure now, not in 20 years when the new people have paid enough in taxes to pay for it. It's not like you need a new police station and a new school from a single new home but you do need them after X new homes.
Debt seems like the obvious solution to time shifting infrastructure, but that increases costs, adds risks, and still forces everyone to pay for new infrastructure. When a tiny home is worth 3x what would be somewhere else that value is from the existing infrastructure not the cost of building the house so adding a tax to capture that surplus is completely reasonable.
Requiring infrastructure to be built beforehand is nothing more than a way for incumbents to win in their quest to never let anything new get built.
They simply collect money from new people to pay for it, because it's very much needed.
100k people move in and several things happen: you need a new sewage treatment plant, new some more transit capacity, new schools, etc. You are proposing that the new people pay for this expansion. But you are neglecting the ways in which you benefit.
By building more schools, each school serves a geographically smaller area, meaning school buses drive a lot less. You can also have higher student-to-administrative ratios (even if student to teacher ratios stay the same). By having more transit riders, your transit system might need additional capacity, but it will be using that transit capacity much more efficiently, because transit system is a step-fixed cost business, and more riders means more profitability (or less subsidy). You aren't getting any benefits to scale on the sewage treatment plant, but you will get benefits on the water provision: smaller and higher density housing uses far less water per person than single family homes with yards, etc.
So yeah, if new people move in, you're gonna need a new sewage treatment plant. If you charge the new residents for the new sewage treatment plant, are you gonna credit them for the improved efficiency of the transit system, school system, and water system? Or are you gonna try to keep those benefits to yourself?
Somehow I think its all just a bit easier to treat every person as the same whether they're new to the area or not.
If you want to charge a newcomer more because the city had to build a sewer treatment plant to accommodate him, you should at least credit him back the ways in which he also made the city more efficient, such as by taking public transit or reducing school costs. And if you are willing to take on the burden of an extensive economic analysis of the marginal cost and benefit of every new housing unit, by all means go ahead. For most of us, a single property tax rate works fine.
Long term benefits are meaningless as they would impact long term property taxes. It's only a question of new construction which is a fairly simplistic annalists.
PS: Really it's hard let's play checkers is not an argument.
Why should the new pay the burden of the new and the old together?
Really I am saying local governments lose the ability to limit growth.
The ideal amount of growth is where the total cost of new construction balances the demand for new construction. I am simply including externalities as part of that cost. Any other system makes some group richer at the cost of everyone else.
Reducing the profit of new construction increases the value of land, as it reduces the supply of housing. Study case, san francisco. It has a 0.1 supply elasticity: if rental prices went up 100%, construction units move by 10%.
Any tax that is put on construction reduces construction.
> The ideal amount of growth is where the total cost of new construction balances the demand for new construction. I am simply including externalities as part of that cost. Any other system makes some group richer at the cost of everyone else.
Your system makes local homeowners with very old large houses very rich: not for the house, but the land they have that appreciates because it is harder to build around it.
In small towns on the other hand the infrastructure cost would be much lower.
The effect of concentrating a tax on something is to make it happen less, and less construction means higher home prices and higher rentals. San Francisco needs to build 1000 units to bring rental prices down 50 bucks. What you need is not to punish, but to make people responsible for the infrastructure they use, and everyone is responsible for the usage, and new construction even less so: until the building is used, the increased infrastructure usage is less. And once its built, all the dwellers pay sales tax and income taxes as well. They will be brining more than their fair share.
Perhaps you believe that the new construction represent a minority that can be exploited, after all, they found a way to profit from the city. But the ones that exploit it the most are the state and the current residents. SF has one of the highest budgets in the world, per city per inhabitant. It doesnt need more money, it needs more discipline.
But there you have the actual issue of SF and california, things like prop 13 that make it impossible to raise taxes on property owners but it makes it easy to apply sales taxes which are known and accepted to be regressive.
As it stands now anyone that can convince a zoning commission to change zoning get's a huge windfall from doing so as suddenly with zero other changes the land is more valuable. That's ripe for corruption on many levels and creates terrible incentives.
As to building infrastructure after people show up that's really does not work because building takes time. The lag between getting permission to build and someone moving in is not long enough to finish infrastructure but it is useful.
Housing can and should of course be managed by market forces. Land usage rights distribution is where the problem lies.
For physical reasons there is no supply of new land. We'd have to wait until Mars or Moon colonization, which would pop the ongoing land price inflation.
Until then it's just a market in which the sooner you get in the better off you'll be. Which is why older generations and aristocracy benefit from such arrangement.
Later generations are just told to shut up and accept that you have to slave more and more each decade to be afford living. Until a revolution of some sort.
The funny thing is the misnomer 'to own land'. The only thing you own is a right to use the parcel, which is guaranteed by no one else but the population. And the population is not paid to provide such a service.
Payment for actual usage on ongoing basis is a solution. Such as land tax or government lease.
Worked wonders in countries founded on this principle.
https://blog.p2pfoundation.net/successfull-examples-of-land-...
Some directly stated that they didn't want the poor people living in the area, which is stupid because they already live there (demographically it's already the poorest zone in the county). A few others said they didn't want to disturb the historical character of the shabby, decades old commercial building that is currently on the site.
The real reason is that they don't consider reducing housing prices a good outcome. Which is just bonkers. Variations of that problem will repeat all over the place. Entrenched interests are often at odds with the policies that would serve the larger group of people (and even be economically beneficial...).
I think this is the key. If you're a property owner, any outcome that reduces the value of your property is naturally a negative outcome. A rational economic actor, in that case, would always oppose anything that would reduce housing costs. It's a tough problem to combat, because what can be done? Barring property owners from participating in local governance?
Local government being able to stop individual projects rather than setting policy could be the problem. Maybe.
Zoning shouldn't be local governance, because it's too easy to capture. It should be regional at the very least. A San Francisco politician doesn't have to care that most of the people working in his city have to commute 1hr+ to get there...that's someone else's problem. All he has to care about are the people in his own district. If he is given jurisdiction over a decision like zoning where a net negative to the region is a net positive for his constituents, he's going to make the decision that benefits his constituents. He shouldn't be given a decision like that.
750,000 people live in Cobb county, which lies just northwest of the city center. Many of them commute to and from the city everyday for work via one large, congested interstate highway. Expanding MARTA, the Atlanta subway system, into Cobb county seems like a no-brainer way to cut down congestion and speed up travel times for workers who live in the suburbs, and make commuting to downtown events on nights and weekends much easier as well.
However, since the 1960's Cobb has blocked expansion of MARTA into the county. Many people point to racial tension as the reason. Cobb county is mostly affluent white suburbs, and voters have feared that creating a direct transit link with downtown will cause poor blacks to flood the area.
A quote from a state senator in 1971, “People fear that rapid transit would give Negroes greater mobility and consider the $0.15 fare as a gift to ‘a certain segment of the population.’” [0]
Opinions are supposedly starting to change, but as someone who lives (and thankfully works from home) in Cobb, it really does suck not having a quick link to downtown. For now, instead of adding true rapid transit, they're adding 30 miles worth of elevated express toll lanes to that same congested highway, at a cost of about a billion dollars. [1]
[0] http://www.mdjonline.com/cobb_business_journal/marta-s-expan...
[1] https://www.myajc.com/news/local/giant-toll-lane-project-ram...
There are scarce-few examples of things gone right. That's why Tokyo is relevant. That said, Tokyo has experienced relatively little population growth, Japan has experienced none and Japan hasn't had asset inflation and/or big economic growth for a long time. One example is good, but I'd prefer to have several. Preferably one or two in real growth cities.
You are right though. We have plenty of dense-but-still-expensive examples proving that density alone does not guarantee much.
Further one reason people want to live in just a few cities is because people don't want to be treated like outsiders. I know I'll probably be downvoted for saying this, but I grew up in Virginia but moved to California shortly after college. There's far less overt racism here than back home. I've also been to many rust belt cities, and can say I'm fairly certain those places are about the same as the U.S. South. For me at least, the subjective experience of racism is a reason why there are only a handful of US cities I'd live in.
The difference in America are the inequities between the wealthy and everyone else. The belief that it’s somehow just or moral to arrange society this way, to build entire cities that can’t function without the labor of poor people, but where they can’t afford to live or easily commute into on public transportation. That these aren’t problems that we should collectively solve, but just another disparity from which the rich can profit.
The two single most important factors that make housing not behave efficiently as a market are zoning and taxation.
Zoning because it puts limits on what can be built, which means the process to expand is now bureaucratic. The original article talks about how in tokyo zoning hasnt been a problem for the market as the championing difference.
Taxation is the second one. No matter how much you build, the people and the space require considerable resources to manage: sewage, garbage, public transportation, local courts ,etc. If you tax income, the more people you cram, and the more the expenditure of the government is, the more oppressive becomes rent. That is because as a dweller, you pay taxes that go to services that increase your rent. This great injustice is described in the book "Poverty and Progress" by henry george in the 1900's in california, where the concept of Land Value Tax was created and then validated by economists on the left (Krugman) and the right (Milton Friedman).
You would not see any problems with local neighbors in San Francisco if instead of state income taxes and sales taxes they moved that to land value taxes, and suddenly the guy with the picturesque 1920 house for himself will find that his taxes look like a monthly rent.
The biggest problems of housing, much like the biggest problems on almost any market, come from the government, not for the peculiarities of the market itself.
IDK if you can just take that as a premise. I think we've had a body of evidence, hard to refute, suggesting that laissez faire markets improve industrial output.. substantially. Not necessarily pure laissez faire, but the effective systems seems to have effective price systems, and private profits. Post 80s China, West vs east europe in the 70s & 80s.
There are other sectors with good evidence too.
Housing...? I think that we've seen laissez faire markets can build a certain type of city (car-suburb) in certain conditions (green-field). In cities that already exist... IDk. Housing in europe is not that much better now that socialism is gone. The stuff in the house, way better. The house, nope.
Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards.
I just don't think that housing is like furniture or smartphone manufacturing. I don't think you can refer to the same lines of reasoning.
I can't speak for europe's cases. Can you share some data, anecdotes or articles? Housing is also one of the things where every country has its own rules.
For example, in San francisco you have 3 story buildings galore, and in argentina you have 8 story buildings much like spain does. And yet both places, by similar criteria, restrict higher buildings: in SF they dont want taller than 3 stores, and in argentina they dont want anything taller than 12 stories.
Housing has also, globally, been part of a very particular cycle in the last 20 years. First the run up to 2008, and now a decade of rising city populations, pent-up demand and low interest rates.
> Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards.
More than half the population are owners, at least in the us and most countries I looked at. So no, they do not want ration cards. Moreover the biggest issue of implementing housing policy is that the locals are permanent but the visitors , even though they are more, dont stay long and dont have the capacity to vote. If San Francisco made a law about construction, and allowed any person that lived more than 1 year in san francisco in the last decade to vote, the renters, foreigners and visitors would land-slide any vote where the local property owners would like get their way. But because that is impractical and impossible, the locals get to put the rules, rules like prop 13, rent control, etc.
Housing IS unique en the aspects you say: land is limited, and thus deciding how to split it is a hard problem. Thankfully the solution old, known and consented by economists: just put a land value tax. Let every piece of land be responsible for the local taxes, and suddenly the locals themselves, being responsible for their expenditures, will vote for construction themselves.
How do you properly price these impacts?
Zoning should be more of a technocratic issue than a political one.
The how is somewhat complex , google 'Evans hartwich better homes greener cities' pg 13. On mobile so it's complicated to link to a PDF search result.
Byers want cheap housing, but existing owners want their property value to rise. Since those living in the area get to vote the natural outcome is stagnation.
Japan is somewhat getting around this for two reasons. National zoning laws as noted in that article, and expanded upon by e.g. [1], and a zoning law that doesn't lock areas into certain developments, which avoids American-style developments where certain parts of town are only residential, or only office space etc.
1. http://urbankchoze.blogspot.nl/2014/04/japanese-zoning.html
Don't assume US insanity has sway everywhere else. Continental EU zoning models are similar to Japan's, Germany and France zoning are national/federal policies and non-exclusive zoning.
Here's an article about how Paris only recently lifted height restrictions (and then in only some areas of the city): http://www.lemonde.fr/planete/article/2010/11/17/feu-vert-po...
Does that mean Paris has different zoning laws? I don't know, but for the purpose of this discussion it clearly amounts to the same thing. The local government is allowed to set policies which inflate the worth of existing properties by restricting the ability to build up.
I live in Amsterdam, and the zoning is extremely restrictive here, down to the level that only certain streets are allowed to have businesses of any sort, height & appearance restrictions etc.
I think around these parts there are two separate problems:
- foreign/1%er investors buying up property and leaving it empty. Across central Paris ~20-30% (depending on districts) of homes are empty [1].
- The city is geographically too small, being locked inside the area of its mid-19th century fortifications, replaced in the 70s by an urban highway. This makes most of the land (and homes) outside of this circular highway much less desirable and therefore a lot less dense. If the suburbs were built as densely as Paris proper, most of the people living in the metro area would be able to live in a space a tenth of the size, avoiding so much commute misery.
[0] https://en.wikipedia.org/wiki/List_of_cities_by_population_d...
[1] https://www.terraeco.net/A-Paris-toujours-plus-de-logements,...
For those unfamiliar with this bit of history, a significant quantity of Tokyo housing stock was burnt by a US Air Force incendiary bombing operation on March 10th, 1945. It was the single most destructive air attack of WWII, though it is likely that more individuals died in the Atomic bombing of Nagasaki.
Probably a good time for this reminder: https://en.m.wikipedia.org/wiki/Bat_bomb
>>> Bat bombs were an experimental World War II weapon developed by the United States. The bomb consisted of a bomb-shaped casing with over a thousand compartments, each containing a hibernating Mexican free-tailed bat with a small, timed incendiary bomb attached. Dropped from a bomber at dawn, the casings would deploy a parachute in mid-flight and open to release the bats, which would then roost in eaves and attics in a 20–40 mile radius. The incendiaries would start fires in inaccessible places in the largely wood and paper constructions of the Japanese cities that were the weapon's intended target.
I got such a delicious feeling of Schadenfreude from this.
If you take it as a single event, yes, but by far the cumulative effects of fire-bombing Japanese cities killed way more civilians that Nagasaki and Hiroshima combined.
this 2016 article covers the NYC scene pretty well https://ny.curbed.com/2016/9/19/12970542/micro-housing-nyc-f...
I happen to write this from a 24 square meter (~260 square foot) apartment, I am very happy with.
Japan is magic, you see. They must be doing something different there. It can’t possibly be something boring like “the city is built in an enormous, flat river delta.”