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Comment by airhead969 | Hacker News Reader

Isn't this what terrible public housing is already? Could it be less terrible or would it always devolve into a housing caste system because middle-/upper-classes would never use it? Set-asides for "affordable housing" in new developments are an absolute joke because there are very few units, they often have separate "servant-like" entrances, and may not be treated equally compared to other residents.

Also, the root cause isn't housing prices, it's a lack of supply because of NIMBYs, a lack of fast/cheap transportation, developing for maximum traffic/commute times like LA, and a lack of development around walkable/self-contained living areas.

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The root cause is way too little development relative to demand, orchestrated via zoning regulations. Wikipedia spells this out in detail for San Francisco [1].

> Since the 1960s, San Francisco and the surrounding Bay Area have enacted strict zoning regulations. Among other restrictions, San Francisco does not allow buildings over 40 feet tall in most of the city, and has passed laws making it easier for neighbors to block developments. Partly as a result of these codes, from 2007 to 2014, the Bay Area issued building permits for only half the number of needed houses, based on the area's population growth. At the same time, there has been rapid economic growth of the high tech industry in San Francisco and nearby Silicon Valley, which has created hundreds of thousands of new jobs.

(Supply << Demand) -> Price goes up.

If we're to solve the housing affordability crisis, city councils simply need to drop onerous zoning regulations and permit construction such that supply can meet demand.

Anything short of this is just a beat-around-the-bush bandaid that hasn't and won't achieve anything. For instance, rent control. What a regressive concept, with tons of unintended consequences.

[edit] for real do you think there'd be a housing shortage or affordability crisis if the entire southern and western 3/4 of San Francisco was allowed to build up from 4 stories to 6? Basically everything other than districts 3 and 6. [2] That'd easily add 50% more housing.

[1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage

[2] https://voterguide.sfelections.org/en/san-francisco’s-superv...

> The root cause is way too little development relative to demand, and zoning regulations.

Trying to mimic 1960s TV neighborhoods thru single use zoning regs has not served our country well.

I’m pretty sure a lot of people enjoy living in those neighborhoods. Surely if no one actually liked living in those neighborhoods it wouldn’t still be the ideal people strive for.

Don’t get me wrong. There are plenty of people in the burbs living an idilic life of winding roads and manicured lawns just the same as the people who enjoy rural, small town, or city life but there’s a huge group of people who are forced via their life circumstances to go to where there’s work and where they can afford.

This doesn't make any sense, if people like those neighborhoods, why would they pay for housing whose value is based around what its potential rent income would be if zoning was not restricted.

The fact that you can (eventually) build a 2 story apartment building on that plot of land is already priced in.

If you like it this way then enjoy the needless suffering and economic inefficiency, it can only get worse. Turning one city into an "ugly" 10 million metropolis could have spared a dozen other cities.

To quote what all of them are saying...

>Turning one city into an "ugly" 10 million metropolis could have spared a dozen other cities.

"Great, turn one city like that and spare the rest... just not in my city.

That's fine, people can like what they like. One of the best parts of my life was living in a duplex built in the 1930s close to downtown. It's hard and increasingly expensive to live in those around here because they have been illegal to build in most of the city for almost a century.

We do not have to ban single family homes. We do have to stop banning everything else.

Yeah this is a big problem. Demographics have changed. There are more old people who don't need 3 bedrooms and a big garden. Single person households have increased- in the 1960s everyone married and started a family in their twenties and divorce was pretty rare.

We shouldn't build houses for a society that doesn't exist anymore.

Yes but people like living in certain neighborhoods not just certain homes.

I like a lot of things. Most of them don't need to be legally enforced by the government. I just freely choose the things I like and people who like differently choose differently.

Why does one specific form of housing need to be legally required instead of just letting people build the type of housing that they want?

The difference is that people don't care about one form of housing... they care about one form of neighborhood which necessarily includes many houses.

It still seems like you are forcing your preference on others.

Maybe, but some don't and are only there because 99% of the school-quality/house-price/distance-to-work sweet spot is in winding-road McMansion neighborhoods, so that's basically the only option.

I feel like you could justify all sorts of weird stuff this way. Smoking was popular. Obesity is popular and its popularity is increasing over time. Destroying the planet with fossil fuels is something everybody wants to do. These are ideals everybody is striving for.

Playing with puppies is popular, getting an A in class is popular. These are all ideals everybody is striving for.

I don't think that this argument really addresses the point that vilifying something might be hurting the problem more.

I think there is still a place for government action to help prevent historic populations of a community from getting displaced.

But those programs should be implemented as subsidies, not price controls! The only reason we're so reliant on the latter is it is more easy politically to put the costs on suppliers and hope the electorate doesn't notice that you're actually exacerbating the problem.

> But those programs should be implemented as subsidies, not price controls!

Subsidies for historic populations without price controls would be a windfall for landlords, and an accelerant to runaway general unaffordability. You could probably split the difference with weaker rent controls and subsidies that make it look like stronger rent control from the renters side, which might mitigate the worst problems of either policies (albeit, at thr cost of combining thr problems of both.)

What would probably be better is to find a way to lean into displacement, or at least accept it, while giving displaced residents a stake in the unleashed value.

Strong rent control but with a buyout option where the the bought-out renter gets some share of the excess (compared to what they could have been charged with rent control) rent over a specified period with some floor might be an option.

> Subsidies for historic populations without price controls would be a windfall for landlords

How is it a windfall for landlords? If the rent prices are going up, they will be making the money regardless of whether the renter is paying for it or the government is paying for some of it.

If your point is that a subsidy will shift demand and increase the price, that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!

> lean into displacement

What does this mean? I think there is some level of societal interest in preventing displacement, there are negative externalities from displacement that the market can't properly price in.

> If your point is that a subsidy will shift demand and increase the price, that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!

As long as that same government is using law (ie. violence) to prevent building more housing, no amount of subsidies can be effective.

What do you intend landlords do? Hire an army to defend cheap housing from the government?

Yes, subsidies should be paired with dezoning.

Yes, law includes the threat of coercion, I don't see what adding that little tidbit does to improve your point.

> How is it a windfall for landlords? If the rent prices are going up, they will be making the money regardless of whether the renter is paying for it or the government is paying for some of it.

Subsidies for a population that otherwise couldn’t afford it will accelerate the rate at which market price increases, especially since those subsidies will also increase as the market price does. It’s like student loans and college prices, but worse.

> tudent loans and college prices, but worse.

It's not worse if there is cost-sharing.

And as I said above,

> that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!

Inevitably, trying to keep displacement from happening is going to increase prices for newcomers. The question is whether we want to do that in a way that incentivizes increasing supply or one that keeps people out.

> A price signal to the market to build more housing

And, as basic economics will tell you, sending such a signal to a market is a windfall for people that already own the underlying asset in that market--i.e., landlords. They get a windfall because they bought the asset when the market undervalued it (because the price signal was not being sent).

Sure, but if paired with dezoning, the loss due to the elimination of rent-seeking through constricted suply would likely be larger decrease for landlords than the increase from demand surge from the subsidy.

> Sure, but if paired with dezoning, the loss due to the elimination of rent-seeking through constricted suply would likely be larger decrease for landlords than the increase from demand surge from the subsidy.

Landlords benefit from dezoning; increased density increases the rent value realized per unit of land area, even if it might decrease it per unit of living area, even without subsidies (and the slumlords that go whole hog on density will make those islands of private communities that don’t even more valuable, so long as the crime and other unattractive effects of the former can be kept out of sight, out of mind, from the latter.

The people opposed to dezoning aren’t landlords, they are residents who prefer low density conditions.

IIRC, by modern economists that inflation doesn't work like that in the real world. Real estate is based primarily on desirability, the order-of-magnitudes of wealth influx, and comparables. Overall, housing prices are uninvolved in changing inflation, but mostly externally-caused inflation changes housing prices slightly.

> I think there is some level of societal interest in preventing displacement,

Why?

‘Historic populations’ is a euphemism for Black in most cases.

In most large cities I’ve lived in, there is typically a section of town plagued by bad schools, high crime, bad infrastructure, and crumbling residences, and it is usually monoethnic.

Why is this a good thing?

It seems that whites in the more affluent areas and suburbs are willing to throw a lot of money at these ‘historic’ populations so that the residents won’t move to their side of town.

Kinda perverse.

‘Ethnic’ neighborhoods in large cities are quaint. Sometimes they become tourist attractions. But, in large part, many are simply ghettos and the faster the ethnicity is integrated into the larger housing market, the better for everyone.

Those neighborhoods are often targeted for redevelopment the moment the ghetto starts improving, and as the ethnic residents are often renters, they have little recourse when it begins.

See: gentrification.

Isn't it typically a windfall for richer people posing as poorer and clever poorer people for improved survival who can utilize or resell earmarked subsidies meant for extremely struggling people?

Welfare fraud is one of those instance of things where it is really salacious so people love reading about it in the media but is not actually that common.

Rent control laws are a different beast altogether because they are not means tested typically.

Its simple - tax landlordism out of viability.

How do people who can't afford to buy then survive? I'm in NZ and we've just seen laws introduced that makes being a landlord more expensive and unsurprisingly it's seen rental increases as a result.

Yeah, I guess that's the logical conclusion. I'd naively expect that the decreased profitability of an asset would decrease its market value, but the owner, banks and government are all interested in keeping the prices high, so instead of offloading less lucrative properties at cheaper prices, the rents get increased :/ I've rented most of my adult life, never did the landlords not be assholes. There must be a better way.

> I'd naively expect that the decreased profitability of an asset would decrease its market value

It actually does (kind of), the problem is that the gap between "not profitable" and "affordable" is a chasm. Someone who is currently paying $350/week rent with minimal savings behind them (which statistically is an optimistic assumption) is not going to be able to find a 10% (or maybe higher) deposit on a $500,000+ property.

The other issue is that right now we're experiencing massive inflation of house prices. Median house value in NZ increased 24% in March - that means you'd need to save around $2000/week just to not lose ground. It's madness, I'm glad I bought at what I thought was the top of the market in March 2000.

Spend the money on new houses without asking anyone for permission. (Specially not home owners who financially benefit from homelessness.)

You could even do a construction project and bill the land lords for that directly. In an even crazier universe they would get something in return for the [forced] investment.

You don't make landlordism more expensive. You make it more difficult and less profitable.

House prices will go down, and more people will be able to buy. For others, there is public-ownership rental and even public housing (that would be of much higher quality than today)

> You don't make landlordism more expensive. You make it more difficult and less profitable.

How is that any different? If it's more difficult then it inherently consumes more time and/or money - given that money is (arguably) how we measure the value of labour I don't see any way of escaping this.

Not if you bound the profit. Then it consumes more time without yielding more money, and is thus less interesting of a proposition -> property values go down. You're assuming an equilibrium return on investment (and unchanging prices), and a perfectly stable market, here.

I have no idea. It seems like, in the US with spotty social assistance, people aren't able to conduct typical investments and savings for retirement and spend much more at convenience businesses for life's essentials such that they become trapped in poverty / economic immobility.

That doesn't make sense. You only need to tax the appreciation of the land value via land value taxes. Building housing and renting them out is economically productive, we want more of that but property taxes are paid on the productive part. This makes land value appreciation a far more reliable way of earning money even though you are doing absolutely nothing that is economically productive.

...and what? What do you expect that to do?

I don't want to own a home. I don't want to have to sell a house/apartment when I move and I don't want to be responsible for it in the meantime.

Cool, then let the government do it. Your "rent" can even build equity in such a scheme.

Subsidies for historic populations without price controls would be a windfall for landlords

This is specifically addressed in the introduction to The Affordable City, and is why "Supply, Stability, and Subsidy" are a three-point policy.

Without supply, yes, subsidies are swallowed up by landlords, and stability (tenants' rights measures) benefit a small minority. Without subsidy, those temporarily or permanently disadvantaged still lack housing or assurance of it. And without stability, tenants remain at risk of being abused by landlords.

(If this sounds like "please read the book", it's because it is. I'm not yet sold, but the proposals seem far-better fledged than most I've seen.)

The supply of landlords is not fixed. If subsidies make it attractive for suppliers to offer housing, more housing will be built and the prices they can demand will fall. Subsidies naturally give rise to a glut and underconsumption which is exactly what you want.

Subsidies and not price controls or lowest cost junk housing unsuitable for livable communities.

I wish there was some way to fix the incentives so people valued growth properly.

Currently the incentives are broken. If you buy in you’re incentivized to limit any future growth to capitalize your ownership of restricted supply. This takes many forms, but zoning, “neighborhood character”, “environmentalism”, noise, shadows, etc. - it’s all about supply restriction.

If there was a way for everyone to get the increased value that came from growth more explicitly then I think the political incentives would shift. You’d still have to overcome some status quo bias, but at least there wouldn’t be a direct economic incentive for owners to restrict supply.

No idea how something like this could be structured.

At least new RHNA numbers seem good, I’d also like to see something that revokes prop13 protection for localities that block new housing. If you’re going to fuck everyone else over, you should at least have to pay for it.

There already is value given for not limiting growth - it is called growth and absence of pronlems. The main issue is that they don't see them.

One dumb top of the head idea is a new development "tax" to existing owners within a certain radius. It is pretty perverse in its self. Hopefully it would be offset by absense of NIMBY costs. Probably not the best concept by any means and had loads of flaws I haven't noticed but it could technically help.

San Francisco housing isn’t going to change until a natural forcing function like a large earthquake destroys a significant amount of the city.

The pandemic was a natural forcing function that brought rents down significantly.

The real root cause is that everyone wants to live (for obvious reasons) in places where housing supply is constrained like SF, LA, or NYC. Home ownership is easy in places like Detroit or Oklahoma boonies, but unsurprisingly no one wants to go there.

Instead of cramming more people onto the same set of square mikes, how about we develop more (non coastal) places for people to aspire moving to instead?

Not everyone has to or should move to California.

Those other locations have similar problems at lower price-levels: relative to incomes you still have to get to moderately large commute distances to get affordable housing.

One improvement would effective transportation that makes the outlying locations nearly as attractive for commuting purposes.

Housing affordability and precarity are widespread problems. $/ft^2 an $/br is high on the coasts. Rent:income and evictions/10k are high throughout much of the U.S.

No, the issue is housing supply is arbitrarily and artificially constrained in these areas. It's vastly more efficient to simply concentrate housing and development in a small area rather than sprawling into undesirable areas.

Weird, I wonder what happened in America in the 1960s that would make so many people try to prevent others from moving into their neighborhoods.

> Set-asides for "affordable housing" in new developments are an absolute joke because there are very few units, they often have separate "servant-like" entrances, and may not be treated equally compared to other residents.

I’ve lived in 80/20 buildings. None of the things you list make them a “joke” except the number of units.

Yes, the 20% apartments aren’t as nice, don’t get to use the gym for free, and in a couple of cases had a separate entrance.

So what?!? They were still massively subsidized and had giant lotteries for people that would have loved to get them.

No, outrage mongers notwithstanding, the real issue is that the programs are incredibly inefficient. The builders get millions of dollars of tax benefits for each of those lottery units.

Why house one lucky family in the most expensive part of town, and give four families nothing, when you could get rid of the program, not waive any taxes, and use the tax money from the luxury building in the fancy part of town to house all five families in a working class part of town?

Like so much of contemporary upper-middle class driven leftism it’s about the appearances—-hence the outrage over poor doors—-rather than actually helping people.

Privileged people want curated poor neighbors (bonus points if they are “diverse”) as an amenity.

Working-class areas and luxury areas aren’t a problem if there’s effective transportation. As it is most of California is packed to the gills with freeways and little in the way of rail.

(Sadly rail is often opposed by the luxury areas - the Santee extension of the Trolley was campaigned against as “importing crime”.)

The government already builds "too much" public housing in undesirable areas. For instance the San Francisco Housing Authority has had all waitlists closed for 10+ years. Many other relatively desirable areas are the same. But places like San Joaquin county have units available right now in Manteca. There are many people who have lived their whole lives in places like SF, Oakland, LA, and are illegally displaced, and would rather wait years for permanent housing under the current system.

Is it really helping them to force them to move far away?

My experience is in NYC. If you have no working class neighborhoods in your city, you have a different problem. One that is also unlikely to be solved by the standard “affordable housing” playbook.

Public housing as typically formulated in the US (and pardon some very hazy recollections and understanding) has been more an assistance/entitlement system offering only usefruct rights (that is: a roof over one's head), and no equity valuation.

The Shane Phillips / Lewis Centre proposal specifically addresses equity rights in addition, which is at the very least rare, if not novel.

(There are some co-housing / co-op structures which have some similarities, these are largely smaller scale.)

The housing market is FUBAR because the people who already have a house absolutely 100% need prices to go up indefinitely to fund their lifestyle. The government can't do anything either besides tell banks to lend starters more $ because the system cannot be allowed to collapse.

Doesn’t this depend on whether those homeowners have borrowed against their (rising) equity? I wonder what fraction of homeowners actually do so. Personally I wouldn’t dream of it, so rising prices don’t really affect my lifestyle at all.

A lot of home owners use their equity to invest (typically, in another property).

I think a lot of people see their family house as their pension plan. A house is an asset now.

You say “fund their lifestyle” like people’s houses appreciating is paying for their summer home or m5 when in reality it’s funding their ability to move with work and not get their equity eaten by inflation.

People need their houses to not deprecate and to roughly increase by value of the work put into the house during their time lived there.

i bet there's a lot of people refinancing their homes right now and rolling their car loans and other stupid stuff into the new mortgage by using the equity. i watched a lot of people do that in 2006-2008.

hell even i'm considering taking out a loan against my increase in equity from the last two years to buy a plane because interest rates are so low.

With interest rates having nowhere to go but up, look for the government to introduce the fifty year mortgage in order to keep the party going.

why would the gov't be in control of the mortgage period? That's between the borrower and the bank.

In the vast majority of US mortgages the bank is the government. It’s deceptive because borrowers deal with private originators and servicers, but they are just contractors for the government.

In the US, most of the mortgage market has the government as the guarantor, via Fannie Mae, Ginnie Mae, and Freddie Mac.

If you have a conforming loan, then whoever is collecting interest is basically insured by the US taxpayers.

https://en.wikipedia.org/wiki/Conforming_loan

> Also, the root cause isn't X, it's Y

Unfortunately unaffordable housing is a problem with many causes, not one simple root cause that explains everything to the detriment of all other factors.

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