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Comment by et-al | Hacker News Reader

I see you've read that CityObservatory article from a few years back [0].

Unfortunately as the Tiktaalik mentioned, we have a housing shortage now. So the trickle-down economics of luxury housing won't work for at least a generation.

Also, all the actual luxury housing that ends up being built is bought by wealthy investors buying their third or fourth property. Just look at the housing market in London.

> Throughout all of American history, new housing has almost exclusively been relatively expensive housing.

Eichlers and Craftsman homes were targeted squarely at the middle class of their time. Now in the Bay Area, the price of a "middle class" home is probably skewed to something around $1,000/sqft, but I don't know if middle class wages can actually afford that.

[0] - https://cityobservatory.org/how-luxury-housing-becomes-affor...

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Why would you need to wait a generation? More like a couple of months. People who are moving to luxury housing live somewhere now, which is less new. When they move out of there, someone else can move in, etc. and on down the line freeing up multiple housing units one by one at ultimately different prices. It adds to the total housing stock in the city immediately.

And no, “all” the luxury housing is not being bought by investors. Even in places where this is a problem it is nowhere near “all”. Investors can also just buy existing housing. Once again, what you anti-housing folks are claiming as a problem of building new housing, is a problem that is going to happen anyway and will be even worse if we don’t build new housing.

> People who are moving to luxury housing live somewhere now, which is less new.

People living a $1mil shithole aren't going to be moving into a $2mil luxury home. You need to find the buyer that can afford a $2mil luxury house. This is why the problem takes so long to work out. Prices are inflated, and luxury homes will be inflated even more - the people that would normally buy them aren't going to be able to move and afford them. Combine this with how people can just sit on homes rather than sell them, it's gonna take a real long time for prices to make their way down.

It’s very sad that the phrase “$1mil shithole” can actually be a thing.

I’m not sure it would be a whole generation, but I could see a decent percent taking a generation.

Anecdote time

I’m nowhere near rich, but we recently upgraded from a condo to a house and kept our condo. Our intention is to rent it out until our kid is old enough to move out and give it to them.

> Unfortunately as the Tiktaalik mentioned, we have a housing shortage now. So the trickle-down economics of luxury housing won't work for at least a generation.

What data are you basing this claim off of? Many people (especially young people in finance and tech) move every few years, and some of them want luxury apartments. That reduces the demand for cheaper housing stock. A 25 y/o moving to SF isn't going to buy an apartment and stay there for their entire life.

A 25 y/o moving to SF isn't going to buy an apartment period.

I'm confused. What will a 25 y/o moving to SF buy? They can't all be homeless or wealthy enough to buy a house in SF.

I believe the confusion is over the term "buy." In San Francisco/US terminology, a 25 y/o is likely to rent or lease an apartment. Buying would more likely be of a condo (or a house, as you mentioned.)

Do we actually have a "housing" shortage, though? I know that supply of stereotypical single-family, detatched homes is massively outstripped by demand in many parts of the US and that's a problem. But is there actually a shortage of "housing" - places to live - including apartments, condos, duplexes, mobile homes, etc?

This is not a rhetorical question, by the way. I'm genuinely curious as I've never been to LA or spent significant time in parts of the US where this problem is at its worse. I live in the midwest and there are plenty of places I could buy or rent here if I needed - cheap and expensive - but I'm lucky enough to have a decent place now so I can be picky about the next one.

Yes, there is a housing shortage in many major US cities. This is evident both from the high rent in these cities, and the large share of workers who commute long distances to work in these cities.

It can be hard to immediately see that there is a shortage of something like housing, because it’s rare that people will actually end up without housing because there isn’t enough to go around. But this is because people will rationally choose to live further and further from their jobs and commute longer and longer distances as the shortage drives prices up near their workplace, rather than choosing to go without housing.

Absolutely. I live in West LA, one of the places in the US worst hit by the housing shortage and it is hard to even find an apartment and vacancies are filled quick.

Luckily, I haven't had to move in a while, but it was bad enough that when I got my place, I signed for it purely based on the opinion of a friend who could go see it for me. If I had waited the extra week to come home from the trip I was on, it almost certainly would not have been vacant.

Technically there is a shortage of nice places to live.

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