The solution is to build more housing. California has historically been terrible about that but SB9 and 10 are significant steps in the right direction.
Even just straight up rolling back to zoning codes that existed in 1960 without much further change would do a lot for supply. Los Angeles in 2010 had a population of 4 million and was zoned for 4.3 million homes. Los Angeles in 1960 on the other hand had a population of 2.5 million and was actually zoned for 10 million homes.
Another issue with increasing supply/density: where is every household going to park its 2-3 cars?!
(Disclaimer: I've been watching tons of City Beautiful and Not Just Bikes on Youtube)
We don't have as many skyscrapers here.
Regardless there are plenty of reasons not to want car-centric suburbian neighbourhoods. Unwalkable, outrageously expensive to maintain, encourages car ownership and usage (yay more debt and running costs), etc.
The most amazing example of this was the stamp-duty holiday to help stimulate the market for a few months during covid. The maximum you could save was £15k. The average house price increased during that time by about £16k...
The real problem isn't supply at all, it's the distribution of supply and the choices of people to live there.
I’ve said this plenty of times; America has plenty of homes, it just doesn’t have enough homes where people actually want to live.
You can get a home in my parents home town (which they left) for $60-100k right now. The issue is that there are no jobs and even fewer services. It was probably a great place to live 80 years ago when small towns were the norm, but now it’s shrinking, aging, and a long distance from any of the amenities that most Americans now demand.
Not necessarily. You can't use the overall picture data to make claims about localized or subcategories of data. Especially if the bulk of the people live in suburban and urban areas.
"... a long distance from any of the amenities that most Americans now demand."
Like what? Many amenities and services have been moving to the at-home or online model for decades - arcades, movies, shopping, car buying, telehealth, etc. It seems there should be less reliance on physical amenities now than in the past.
We are starting to movement from HCOL and high tax areas. Companies are moving for tax and regulatory purposes and most people seem happy to follow when the cost of living is significantly lower.
> Like what? Many amenities and services have been moving to the at-home or online model for decades - arcades, movies, shopping, car buying, telehealth, etc. It seems there should be less reliance on physical amenities now than in the past.
My parents town’s nearest major store is a Walmart 45 minutes away. There is a significant difference between “we need less amenities now” and “we need no amenities”. Committing to an hour and a half drive for anything Amazon can’t deliver is sub ideal.
It would be utterly impractical to live there most of the year. And yet compared to NFT's and some cryptocurrencies it's probably a great investment. There's definitely a bubble going on, I just don't know when it will end or why.
The vacancy rate may be at a low, but it is still about 10%. Sure, we still need to build more houses, but the point here is that distribution is important to both. If you build houses in a HCOL area, the cost will be higher. We should be looking at redistributing to areas with the highest rates of vacancy an LCOL.
Part of why prices are going up is inflation and cost of materials and labor. Prices in rural america are up, but I wouldn't say skyrocketing. There might be places that are skyrocketing, but I'm guessing they are in commute distance of the cities.
The housing crisis is more accurately an imbalance of houses-to-jobs in a metro area.
Why the companies are moving from California to Texas is exactly because Texas' local zoning laws aren't as stringent allowing for cheaper housing.
The fix really isn't that complicated, it's allow more houses to be built where jobs are demanded. Not quite sure why people always twist and turn justifications for why only 1-story houses should be built.
Or move jobs to areas where housing is cheaper and easier to build. Just allowing more houses to be built doesn't solve it entirely. For example, labor will be more expensive in HCOL areas.
"Why the companies are moving from California to Texas is exactly because Texas' local zoning laws aren't as stringent allowing for cheaper housing."
Not really, although it might be a secondary component. The main part is taxes and regulation.
Labor increased cost is really nothing compared to the zoning barring new construction. If labor was truly the barrier then when upzoned no construction would take place. Additionally a large reason why labor is so expensive is from the constrained housing in the first place -- again stemming from the zoning.
> Not really, although it might be a secondary component. The main part is taxes and regulation.
Zoning is regulation.
Business regulation.
"If labor was truly the barrier then when upzoned no construction would take place."
Not a barrier, but a factor. You seem to be misunderstanding me. It's not that it can't be done in the populated area, but that it's better done in areas not already in a precarious situation.
"Additionally a large reason why labor is so expensive is from the constrained housing in the first place -- again stemming from the zoning."
So we have circular logic here. If the labor is expensive, you aren't going to make it cheaper (at least short term) by building more houses because the labor cost to build those houses will still be high. They have to pay their existing mortgages.
Are you really not aware that when people are mentioning Texas' easy regulation many times they are literally often talking about zoning?
> You seem to be misunderstanding me. It's not that it can't be done in the populated area, but that it's better done in areas not already in a precarious situation.
No I completely understand you, and find the "too many dense already" line of logic ludicrous. Most of these American cities have zoned over 80% of their land at one story buildings only. American cities are already at the lowest density compared to European or other countries density. They can accommodate plenty of housing fine.
> So we have circular logic here. If the labor is expensive, you aren't going to make it cheaper (at least short term) by building more houses because the labor cost to build those houses will still be high.
No there is no circular logic here. As I already noted the larger burden of the cost of housing comes from zoning restricting the amount of buildable land. And yes you will need to build lots of housing -- thats what happens one restricts building housing for decades.
Source? The ones I have seen say "business-friendly regulations". They also mention companies moving their headquarters to the state, which means taking advantage of incorporating there, which extends to out of state worker, for which zoning does not apply.
The cheaper housing is why many individuals are moving to TX.
"They can accommodate plenty of housing fine."
If the infrastructure is only set up for single family homes and the land is covered in them, then you would need massive infrastructure updates which the cities can't afford, and you would also have to demolish many existing homes to make room - what a waste.
"No there is no circular logic here. As I already noted the larger burden of the cost of housing comes from zoning restricting the amount of buildable land."
Do you have an economics background? Can you explain how the labor cost suddenly decreases as the demand for labor increase and their costs stay the same?
"... and find the "too many dense already" line of logic ludicrous."
My position is more nuanced than that. It seems you've already made up your mind and dont care to explore my position. Good luck.
Zoning also is for businesses too. For example Elon's relatively fast approvals for their new factories
> the infrastructure is only set up for single family homes and the land is covered in them, then you would need massive infrastructure updates which the cities can't afford
Again another ludicrous claim. Seriously every country around the world can build this infrastructure for supporting beyond 1 story tall. America is not some special snowflake here. Yes it'll cost some money to upgrade it -- not it's not rocket science nor some giant cost.
You're just working backwards justifying why American cities couldn't accommodate anything beyond 1 story tall then grabbing any reason to block it.
> Do you have an economics background? Can you explain how the labor cost suddenly decreases as the demand for labor increase and their costs stay the same?
I could ask the same to you do you have an economics background? But in any case yes I do.
Regarding the labor cost, I was responding to why you think labor costs are a barrier to housing and while it's true, the root cause to solve it goes the other way around. Aka even if labor costs were flat it wouldn't solve the housing crisis.
> My position is more nuanced than that. It seems you've already made up your mind and dont care to explore my position. Good luck.
It can be as complicated as you want but as the end of the day if it's stemming from blocking housing it really isn't that special.
The Midwest and the South are both way ahead of California on the whole "just build more housing" thing, for example, and have been for many years. And yeah, it makes us somewhat cheaper than a coastal city if you have California dollars to burn. But our Price-to-Income-Ratio's are still in the high 5-7+ range too, just like everywhere else.
We have basically zero population growth, and every single stray piece of land is getting built on right now (record high construction, record high new housing starts, for the past three years straight) and housing prices still rise 10% to 15% every single year like clockwork, with no end in sight.
"Just build more" sounds really pretty, but that alone will never get housing prices back down to a real-world-affordable figure for most people.
You are partially right that Econ-101 doesn't explain it well, but if you take Econ-201 it does explain how housing supply/demand works. Why it doesn't work as easy as 101 is that the location matters for the 'good' unlike say cars which can be shipped in from anywhere. And also zoning artificially constrains land from being used for housing.
NYC on the other hand is a good example of what you’re talking about - it’s expensive to live there and pretty dense already. But Tokyo for example had 150k housing starts on a recent year, which is more than LA, NYC, Boston, and Houston combined (source: https://www.google.com/amp/s/www.wsj.com/amp/articles/what-h...) - amp link to get around paywall.
I think there’s tons of evidence that we just don’t build enough myself. In bangkok, another market, they’re throwing up more new tall buildings every year than almost the entire USA does.
Seems fitting that in the 21st century we flip that on its head. Cost of living in SF or Seattle got you down? Go East, young man! Head down to Texas or east to Ohio, and register to vote when you get there.
Be the change you want to see.
The solution is, and always has been, to increase supply, specifically in the form of increased density.