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Comment by arcticbull | Hacker News Reader

This is only part of the problem - and a small part of the problem at that.

The real problem as always is zoning. Houses cost roughly the same on a $/sqft basis, adjusted for inflation, as they did in the 1970s. They're more expensive now because outside of town they're twice as big on average [1] - in part due to zoning rules. In town, zoning rules preclude densification necessary for supply to meet demand [2]. And, families are smaller.

Check out Japan housing CPI - a market where supply meets demand thanks to federal zoning rules, and is also centrally banked. Dead ass flat. [3] This chart alone basically debunks the theory the Fed is solely responsible for lower housing affordability.

Zoning is the issue, not the Fed.

[edit] Yes, the fed contributes a little - monthly affordability of a more expensive house is the same when interest rates are lower, but down payments are not. However, if you want to solve the affordability crisis build more houses. Any houses. Now. Compare the Japan housing CPI in [3] to the US housing CPI in [4] and weep. Housing in the US is driving inflation, not responding to it.

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

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

[3] https://fred.stlouisfed.org/series/JPNCPIHOUMINMEI

[4] https://fred.stlouisfed.org/series/CPIHOSNS

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While I agree zoning is a huge issue (I think that interest rates being so low doesn't help, either, but I concur with your thesis that zoning is the bigger problem), this, however:

> Houses cost roughly the same on a $/sqft basis, adjusted for inflation, as they did in the 1970s.

Sorry, but no. My parents bought their first home for $72/sq ft. real¹. They sold it for $99/sq ft. The same house last sold for $208 sq ft., and is Zestimated today at $302/sq ft. The value of the home has averaged >7% gains YoY, well outpacing published inflation.

Their current home, built significantly later, and like you say, significantly larger, was $149/sq ft. at purchase, and is $182/sq ft. today.

Every house I look at sings this same tune. Accounting for inflation, where my parents got a large house ready to move into, for the same amount to day I'm looking at what I call a "contractor's paradise", and that will require significantly more than the sticker price to make it habitable.

¹all dollar figures in this comment will be in 2021 real dollars, not nominal ones. I.e., adjusted for inflation.

The inflation adjusted $/sqft statement is a blended average across the US. It’s lower outside of towns and higher inside towns. This is tracked by the Census bureau but as always with averages there are values on both sides of the mean. [1]

One caveat is it does reflect only new construction.

[1] https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5

> blended average across the US > One caveat is it does reflect only new construction.

I am not sure what a blended average is but averaging new constructions makes your stats utterly useless?

Where are people living mostly and how does the real estate market go there.

It's the average price of new construction over time. Generally one would not expect new construction to come in dramatically under market right?

You're conflating the market for suburban family homes with the market for real estate. What about apartments, commercial real estate, etc.? Rent has absolutely exploded, which might not be priced into suburban family homes that aren't built to be rented and don't directly compete with more urban apartments.

under market, no. but due to locality there are a lot of different real estate markets. dragging prices of wyoming into the dataset when you are interested in nyc or sf makes just no sense. then you have the problem of the different types of new constructions too. i don't see how averaging helps here.

at least where i am looking (european country), cities have roughly seen a 100% price increase since 2010. income hasn't kept up with inflation or the housing prices.

Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) They can make way more money catering to the people who can “afford” to build a $500k home, and people who want a very custom design and lots of space. On the renting end, “luxury” apartments will make more money than really basic cheap units. So most of the new housing stock doesn’t help address the problem for people new to housing. Even if you want to build out a very basic, small house, you have to have cash to DIY without a bank, or find some way to finance a builder (increasing the significant labor cost) without having existing equity. So the part of the market that does want cheap, basic housing doesn’t even have a way to influence those units. There is loads of demand for them (young people without money make up a huge portion of the population), but no developers willing to meet that demand when they can just make expensive units. And not enough developers so that some need to chase the cheap market.

And in cities, the lot cost is very prohibitive too, before even getting into building a very basic house.

> Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.)

This is like saying that Toyota would rather sell Lexuses than Camrys.

Yes, it's true, but they sell Camrys anyway. Why? Because the market for luxury is only so big. They can make more money total addressing other parts of the market.

So why doesn't this apply to housing? Land + zoning. Imagine if Toyota was only allowed to produce 10,000 cars a year. What kind of models would they choose to make?

Can only speak for my city (Seattle), but no one’s building Camrys and building is constant. It’s not because any zoning prevents building affordable units. It’s because there’s limited land to develop at all and demand for property of any kind is extraordinarily high. All of the development in residential neighborhoods is already zoned for everything that could accommodate 4-10 times as many tenants. But they’re building luxury units anyway.

Doesn’t surprise me but this zoning explanation ain’t it.

50% of the developable land in Seattle is designated for single-family homes, and not one single inhabitable SFH in Seattle city limits is what anyone would call "affordable". The fact that it's illegal to replace those SFHs with duplexes, quadplexes, or midrises is a primary driver of housing unaffordability.

Seattle's population growth has outpaced its housing growth for multiple decades. There's a huge amount of "catching up" to do, and SFH zoning is blocking that from happening.

Once enough there's enough housing to hold all the rich people that want to live here, of which there are many, you will see some downmarket construction happening. But we're a long way away from that.

They’re replacing SFHs with multiplexes all over the city all the time. Instead of assigning A/B/C units or fractions they just split the numbers already designated for the lot.

Zoning for MFHs won’t change that. It’ll maybe bring more skepticism to luxury developments. But people buying million dollar units with no lot will know they’re buying the same thing.

And mixed use luxury apartments are the only development otherwise. No one is building anything more affordable in zoning more favorable for it. At best this is trickle down economics where everyone who needs somewhere affordable to live might be able to get scraps at the most dangerous furthest flung place in Lake City.

So if this is a "problem" for government to fix via either Zoning being abused or the free-market being naughty, then why doesn't the government just create very specific and targeted "high-density, high-rise, cheap-price" zone that can only be built with the right and necessary units?

Dude have you been to lake city? The only area that’s dangerous is where there city built one street up with all projects. It’s significant safer than Ballard university district and and capital hill

Seattle development is absolutely constrained by zoning. Not sure why you think otherwise.

https://www.seattle.gov/opcd/population-and-demographics/abo...

> As of 2019, there were 367,806 housing units in Seattle, representing a 19 percent increase since 2010 (according to Washington State Office of Financial Management). The growth in the number of housing units in Seattle from 2010 to 2019 surpassed the 14 percent growth seen between 2000 and 2010. However, even with the rapid increase this decade, expansion of our housing stock has not kept up with Seattle's population growth of 22 percent between 2010 and 2019.

And here's Seattle's land zoning ("Land Use" tab on the same website):

https://www.seattle.gov/Images/Departments/OPCD/Demographics...

50% is zoned SFH. Only 14% is zoned for any kind of (residential) density.

> Can only speak for my city (Seattle), but no one’s building Camrys and building is constant

I'm in the Seattle metro. Building higher density housing is still illegal in most of the city, because attitudes there are still fundamentally NIMBY, even if it's not as bad as SF.

The city has generally upzoned little slices at a time around 'urban villages', and while that's certainly better than nothing, it's a lot less effective than largest scale upzones, and streamlining building processes.

This is a poor analogy. People rely on cars way differently then they rely on housing. If the only car you could buy was a Lexus, you might stretch you budged, take out a big loan and buy one, or you might simply not buy a car, get a bicycle instead, take the train, a cab, or pay a coworker to carpool.

Housing doesn’t give you this option. If you don’t want to be homeless you may be able to rent, but that is pretty expensive too.

It seems to me like your list has analogs in housing without squinting too hard: spend more of your budget on housing, get a mortgage (big loan and buy one), get a smaller place (bicycle), rent a place (train), or move in with roommates (carpool).

So many landlords have taken old homes and converted them into single apartments, raising the cost without creating any value. I would say destroying something of intangible value as well. That trend has definitely driven the cost of housing up.

> So why doesn't this apply to housing?

Because selling a Camry doesn't reduce the selling price of Lexuses built in proximity to it by more, in aggregate, than the profit from the Camry. Which is why developer-founded and controlled HOAs have much more restrictive rules than public zoning rules.

One theory, and this may just apply to my location, starter homes supply is being eaten up by firms who are going to turn around and rent it out. So they are essentially grab what little supply there is of new construction starter homes, then turning around and renting them out for quiet a bit of a sum that still prices quiet people out of them unless they are fine eating shit.

We don't seem to have an issue with Hertz coming in and scoping up all the camrys.

There are plenty of yuppies to buy up any fancy new houses in town, though. So no cheap houses are built inside the cities proper.

In the US, there's always more land - it's just further away! The cheap "Camry" houses still get built, but never as infill. It just gets pushed further and further out to the exurbs.

Unless you take money (or cheap debt) out of the hands of the yuppies, nothing changes here.

I'm not so sure about this line of reasoning. Housing doesn't obey the simplistic demand-supply model [1].

[1] https://alastairparvin.medium.com/if-the-uk-built-1-million-...

It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Any new stock you add increases supply, which leads to lower prices across the board.

[edit] and btw, I think builders aren't tripping over their shoelaces to service the low end of the market because they know the city is so aggressively capping how much they can build. This means they will only build the most profitable units, the high end today. But once the high end is saturated, the low end ones will be the profitable ones anyways.

> It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants.

Only if the old housing stock isn't torn down to make room for the new housing stock. Thankfully property taxes aren't driven in the potential value of land (rather, they are tied to actual value), but most small scale landlords of affordable housing right in it are in it for property appreciation, not rents. Their exit plans are often to sell to a developer as tear downs.

> This means they will only build the most profitable units, the high end today.

There are costs are too high (to acquire property and build) to justify anything but going after the highest end of the market. Once the high end is say satisfied, money (investment) could simply move away from housing if it can't make any money there. Money chases the highest returns between all of the markets, not just one market.

> Thankfully property taxes aren't driven in the potential value of land (rather, they are tied to actual value)

That's not a thankful thing at all, it incentivises using the limited land in wasteful (low-value) ways.

> Once the high end is say satisfied, money (investment) could simply move away from housing if it can't make any money there. Money chases the highest returns between all of the markets, not just one market.

Available capital is practically unlimited these days, anything that's profitable and legal to build will get built.

>Available capital is practically unlimited these days, anything that's profitable and legal to build will get built.

And it's mostly chasing monopolies like location.

> Only if the old housing stock isn't torn down to make room for the new housing stock

This is about zoning too. Normally, if the demand is there for it a smart land owner would build more housing on the same plot, e.g. turning a single family into a two family, but of course that is illegal in many places.

Yes, that is exactly what is happening in Ballard (Seattle area) right now. Those cheap 100 year old low income housing complexes (one or two stories) are being raised for a bunch fo three story townhomes, smart developers can sell each of those town homes for $1 million each, and they could get much less if they kept it as a hotel-like complex. I just bought one of those town homes, so I'm not going to complain too much, but I'm self aware about what is going on here.

So poor people are still getting screwed. My daily walk to the grocery store passes by a few places that are pretty shabby (so low income) and right across the street they are building a bunch of luxury town homes. It doesn't take a rocket scientist to figure out what will happen to those shabby places in a year or so.

> a smart land owner would build more housing on the same plot

This is an uncomfortably extremist position, should maximizing revenue per investment be the one and only consideration society takes into account?

I do many things that provide joy in life in other ways, even if I know they don't maximize revenue or savings. I wouldn't want to go through life thinking about nothing else than ROI for every action.

>property taxes aren't driven in the potential value of land (rather, they are tied to actual value)

That means multifamily properties have higher tax bills for absolutely no reason. Expensive locations need to provide more housing per area so charging a fixed fee based on the value of the land is a much better approach. You get to build a single family home and pay through the nose or split the bill with a multi family home.

> That means multifamily properties have higher tax bills for absolutely no reason.

Not true: most localities use a significant portion of property taxes to fund public schools, and more families = more kids.

I hear this repeated a lot. In practice, at least in the cities I've lived in, I've only seen housing go downmarket when there's an explicit exodus. The reason is that housing is built for a specific living space size. Los Angeles has so many single family houses that it's impossible to cater to people downmarket...unless houses are torn down and multi-unit housing is built. You could rip those down and build upscale, large apartments, but I feel like I see them sitting vacant instead of moving downmarket. The bust sucks for everyone and the boom (gentrification) sucks for the less well off.

Maybe we're saying the same thing, but instead of gradually reaching a equilibrium like you're describing I see a dramatic boom bust cycle--both are held back by lack of building.

> It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Any new stock you add increases supply, which leads to lower prices across the board

I could definitely see that being how it works in a lot of cases, but it seems like a stretch to assume that's some sort of natural law of prices. If I have a market of ten potential buyers, the first who has $1, the second who has $2, and so forth until the tenth buyer has $10, I could put an infinite number of goods for $10 for sale, and none beyond the first would be able to be purchased. Sure, you could argue that it would be silly of me to price in that way, and you would be right, but in reality you don't know the exact financial details of every potential buyer of your whole market. GP is hypothesizing that basically this exact scenario is happening with housing, and I don't know if they're right or not, but your rebuttal doesn't seem very convincing that this is an impossibility.

The price of a house is not fixed. Likewise, in your example, you would have to lower the price from $10 to sell your goods.

My point is that it's at least mathematically possible for a scenario to exist where the assertion I was responding true does not happen. If the idea is that _in practice_ people always lower the prices, then it seems more direct to just say that rather than claim some sort of law of economics that doesn't actually have any mathematical proof.

If they priced at $6, they’d sell 5 units for $30 and 5 people would still be unable to afford to buy housing while the seller held onto 5 more units waiting for another person to come along with $6. If they priced at $7, they’d sell 4 units for $28, which still might be better for them.

This might not be that far off from what’s happening.

We have the same problem with the car market. I can only afford a $5,000 car, but the car manufacturers make all their money building $20,000 cars. I just can't see how Honda making another $20,000 fit is going to help me afford a $5,000 car.

The problem from the manufacturers' perspective is that the gear required to meet 2021 safety, emissions, and fleet efficiency standards by itself almost pushes a new car's price over $5000, and that's without leaving any budget left over to make it a car anybody would want to buy.

They do sell vehicles at that price which get around all of those standards, but they lose two wheels in the process.

You can still easily buy a decent used car for $5k.

Try buying a half-decent used home for 25% of its initial sticker price.

You used to be able to buy a decent used car for $5k but as of recent you can't find any without connections. I've been telling folks interested in Japanese cars that it's $10k at this time to buy used with low mileage for a sedan and $15k to buy used with low mileage for an SUV.

Is is true that the used car market has gone way up, but it is nowhere near that bad yet.

Tons of perfectly good used cars for under 5K on CL. And this is SF Bay area where prices tend to higher.

https://sfbay.craigslist.org/search/cto?purveyor-input=owner...

I mean VW makes $100,000 Porsches and $20,000 Jettas. At some point it’s not economical to make cheaper cars due to materials and workmanship. You can certainly buy an e-bike for half that, I did.

The cost of construction in America is $150/sqft. We’re not even close in cities. Off by an order of magnitude.

Sorry I guess I was more obtuse than I intended. My point was I can buy a used car for $5,000, and Honda building new cars allows that even if the new cars are out of my price range.

Ah I see, that makes sense, I misread!

Some analysts believe that in another 5-10 years in the US, you'll get if not quite a $5K USD car off the Internet, a $10K USD car from a Chinese manufacturer, and the Detroit automakers will reprise their arrogance-into-bankruptcy role from the 70's again when Japanese cars entered the US market, when they famously remarked the new entrants can have that cheap unit market.

Watching the Detroit product roadmaps, I'm inclined to agree with that analysis at this time.

Are you forgetting that used housing and cars are cheaper? Nobody is forcing you to buy a brand new car.

This was my point, that like cars, luxury homes and apts turn into affordable housing over time.

In cities with no zoning todays luxury housing is tomorrows affordable housing. For example in Houston apartments and houses that were touted as luxury in the 80s are slums now.

This also holds for smaller cities in the Rust Belt. My childhood home, purchased almost new in 1980, is only worth about 2x what my parents paid at a time of 20% interest rates. It has been very well kept and sits on about an acre and a half. Everyone with means has moved away. Retirees and people with no better options are all that's left.

We're seeing a massive demographic shift to single person households all across the first world countries from Canada to Korea. But for some reason the housing market is still geared towards families.

Households with two or more incomes are more likely to be able to afford real estate than single-income households - both in absolute income levels as well as in economic crisis where it is less likely all family is losing their all of their income simultaneously than a single person..

> The real problem as always is zoning.

If the real problem was always zoning, wouldn't dense cities like NYC and Shanghai be cheaper than average, not way over average?

> Check out Japan housing CPI - a market where supply meets demand thanks to federal zoning rules, and is also centrally banked.

Japan went through a huge bubble in the 1980s. Also, housing (the structures at least) rapidly depreciates in Japan, which prevents them from being used a speculative asset as in countries (even then they still went through a huge bubble in the 80s). It is definitely an alternative model to our own, but I'm not sure how many people will want to experiment with that. Japan also much more strictly restricts immigration than other countries, which makes it, for example, a bad place for Wenzhou house wife real estate speculation.

> If the real problem was always zoning, wouldn't dense cities like NYC and Shanghai be cheaper than average, not way over average?

It's not about supply by itself, it's supply vs demand.

Big cities have big populations and economies, which means a lot of demand.

But as far as zoning goes, note that like other metros, NYC has actually effectively downzoned areas over time; in fact, a huge proportion of buildings there would now be illegal due to different types of density restrictions: https://www.nytimes.com/interactive/2016/05/19/upshot/forty-...

A lot of NIMBY's tend to go, "well, there's still some areas where it's possible to build more, so there's no real issue there". This is approximately like restricting car manufacturing to one state, and then when car prices go through the roof, saying "well, there's still more land to build car factories there, so I don't see the problem, it couldn't possibly be this rule".

NYC housing has pushed outwards into Queens and the Bronx, manhattan is less populated these days because it lacks full time residents (the apartments are still sold, but their owners list upstate/Connecticut/long island properties as their permanent addresses, and they have many less occupants in them even when full, not like the turn of the century when more than a few people were crammed into small apartments).

> A lot of NIMBY's tend to go, "well, there's still some areas where it's possible to build more, so there's no real issue there". This is approximately like restricting car manufacturing to one state, and then when car prices go through the roof, saying "well, there's still more land to build car factories there, so I don't see the problem, it couldn't possibly be this rule".

My only point was that making cities more dense seems to make them more desirable, causing more people to want to live there. Yes density is a great thing! But it doesn't solve affordability problems on its own. Can you imagine if San Francisco (6.2k/sqm) had NYC-level density (27k/sqm), would it be more or less affordable? I'm going to go with the less.

What is really holding us back are the American libertarians who are afraid of a public housing system like the one in Singapore.

> My only point was that making cities more dense seems to make them more desirable, causing more people to want to live there.

Increasing housing in this manner would probably boost land prices, but over a greater number of units, so result in overall decrease in housing cost.

NYC is a bit of a weird spot in real estate, in that having a Manhattan address (and probably a Williamsburg or Bushwick address to a lesser degree these days) is a status symbol for foreigners, in the same way that London or Paris might be. Most American cities do not have this kind of cachet and so at some point prices will fall if you build enough.

The problem is really that housing production would have to increase by an incredible amount to get to affordable. To use the example of Tokyo as affordable, let's look at comparative housing production statistics.

* The 23 special wards of Tokyo, 8.9M people, built 110,000 new homes that year.

* The entire country of England, population 53M, built 115,000 homes a year.

* The metropolitan area of NY, population 20.3M, approved 27,000 units in 2012, but approvals != actual construction.

https://nextcity.org/urbanist-news/entry/tokyo-housing-high-...

> * The 23 special wards of Tokyo, 8.9M people, built 110,000 new homes that year.

Since housing is refreshed in Japan on a 20-30 year basis, you can't quote the number of housing built without comparing it to the number of housing torn down (since, as mentioned before, housing depreciates).

> * The metropolitan area of NY, population 20.3M, approved 27,000 units in 2012, but approvals != actual construction.

Do you mean no housing was built in 2012?

So the way it works in NY IIRC, you can get an approval and not actually act on it, and the reason you can do this is because the approval can be sold with the property, which isn't an uncommon thing.

NYC does not track construction starts like that, or at least not when that article was written

Demand isn't unlimited, and you have the causation mostly backwards. Cities being successful causes people to flock to them, which means there's demand for density.

The problem is that it isn't just those on the right opposed to density -- the left is little better. Sure, progressives are largely okay with what density already exists, but propose upzoning and they flip out. Just look at the California state legislature, or major west coast cities.

Demand is pseudo unlimited. The real problem is betting on a single location. All 300 million Americans won't fit into new york. Why not build more new yorks?

New York became a hub for commerce and culture because it was a very successful port city. With the completion of the Erie canal, it connected the American heartland to the Atlantic Ocean. This naturally led to it being the main port for immigration as large numbers of people came to the US in search of economic opportunity. Decades of sitting at the center of the northeast corridor, the richest metropolitan area in human history, has made it a solid contender for the financial capital of the world. You can't simply build more New Yorks, the geography and history that produced it are unique.

Of course not everyone wants to live in New York, indeed there are many cities that each have their own unique circumstances drawing vast numbers of people, and all of them experience great demand. But there's a reason you can't just through up a bunch of skyscrapers in South Dakota and get everyone to move there.

> My only point was that making cities more dense seems to make them more desirable

You have it backwards, it is making the spot desirable that leads to them becoming dense. More people keep moving in, you build denser to accommodate them. Can you imagine how expensive NYC would become if 77% of current residences suddenly stopped being unavailable?

Yes, you will have some non-linear effects, people do want to live in big cities where the action is, but the reason those cities exist in the first place is because the action's already there. New York is a massive hub of commerce and culture which is ultimately a consequence of it's position as a major port. You won't make it undesirable by decreasing density so long as its still the center of the financial world.

> Can you imagine if San Francisco (6.2k/sqm)

I'm pretty sure this is wrong. Yes, it's the first answer that comes up if you Google this stat, but this is off by a factor of 3 or so. Before the pandemic San Francisco had a density of around 18K/sqm. Although a lot of people left SF during the pandemic, 6.2k/sqm is still way to low.

Now, that we have that out of the way. In general, I agree with you. Most cities that have a high population density are expensive places to live. It's a good thing to allow cities to accommodate more people, but those places will still have a high cost of living, because many people still want to live there.

Libertarians have effectively zero say in US politics generally. They have blogs. Trump and Bush Jnr couldn't care less about Libertarians.

However, the place with the lack of Zoning rules that appeals most to Libertarians, Houston, is doing pretty well.

Houston has seen an increase in population from 3.8M in 2000 to 6.4 M in 2020 and has a median house price of $285K.

https://www.macrotrends.net/cities/23014/houston/population

https://www.redfin.com/city/8903/TX/Houston/housing-market

> Libertarians have effectively zero say in US politics generally.

The Republican party is inundated with Libertarian philosophy. Even the Democratic party is often forced to go along.

> Houston has seen an increase in population from 3.8M in 2000 to 6.4 M in 2020 and has a median house price of $285K.

Yes, Houston is probably the best example of a libertarian city in the world. Most of us don't want to live there, but someone obviously does.

The irony is that Singapore has a public housing fix to their problem, but is also often touted as being a very economic libertarian city state.

It’s wild that manhattans population was ~2.5 million in 1910 and is now only ~1.6 million.

Doesn't it make sense though? In 1910, manhattan was expensive but a lot of people still lived/worked there. The apartments would be crazily subdivided so you could fit 10 people into a 3 or even 2 bedroom. Now they are all owned by wallstreet bankers with small families, and they spend much of their time somewhere else (they might not even list their manhattan apartment as their "main domicile" during the census).

Demand for Manhattan apartments is crazy high, it's just illegal for taller ones to be built to meet demand most of the time.

People think Manhattan is mostly skyscrapers, but the reality is very different. Only a small portion of the land has high rises on it, just glance at Google Maps with 3D view on.

Manhattan is mostly multi level apartment buildings, at least 4 stories or so. I don't know why your point would contradict mine. Yes, units in the taller skyscrapers are more expensive and sell for tens of millions of dollars, if not more.

I wonder how NYC would do with cheap 30 story Chinese concrete apartment blocks? (30 stories, because any taller requires steel, at least with construction practices that use cheap migrant labor).

yeah, the two big changes are

* multigenerational to nuclear households

* decline in number of kids

This pattern of living is still common to a lesser degree in outer-borough immigrant neighborhoods, which is why they were so hard hit during NYC's massive COVID wave.

Zoning is also an issue in NYC. The suburbs are unable to become dense do to zoning which causes the prices to go up.

Brooklyn increases the density steadily. I see a lot of construction around me, mostly higher-density replacing low-density, but it's relatively slow.

I don't think this is entirely right. The cost of building a home has shot up too, to the point you must take out a very sizeable loan to do so.

> This chart alone basically debunks the theory the Fed is solely responsible for lower housing affordability.

Have you looked at Japan's population, its "dead ass flat" while US population keeps going up.

https://datacommons.org/tools/timeline#place=country%2FJPN%2...

Doesn't really matter. What matters is that in Japan supply and demand are equal. You could achieve the same outcome in the US with more supply.

No, demand is actually down in Japan[0]. That chart shows residential housing vs. under 65 year-old population. So demand is decreasing but residential RE is rising slightly. Your analysis is also ignoring that services cost a lot more in the US than they did in the past. You can't build cheaply in NYC or SF or Seattle anymore because construction workers cost more.

[0]: https://lh3.googleusercontent.com/-xDrQEcMyF5Y/YWDyNh-3TiI/A...

I should have said supply >= demand.

Yes, SF has the second-highest construction costs in the US. $330/sqft. [1] Average home prices are $900-1200/sqft.

[1] https://www.investsf.com/why-san-francisco-has-the-second-hi...

The idea that zoning is the issue is always funny to me because it’s very easy to disprove. Plenty of paces in the US have permissive zoning (like the NY metro area). If zoning was the issue, then one would expect affordable housing in these areas, but it is still totally out of reach for most.

Please stop. Zoning issues/lack of supply would imply that there are lots of homeless people without a roof over their head.

Investors have too much access to property. It's a system of greed that benefits those who entered the market early (typically boomers).

Just stop blaming zoning already.

Sorry but it's zoning's fault haha.

> Zoning issues/lack of supply would imply that there are lots of homeless people without a roof over their head.

The price of housing only matters to people who don't already have homes they own. 65% of Americans own homes, so that cuts down your working set dramatically.

There are a lot of homeless people, yes - 0.2% of the population - but lack of affordable housing tends to be roughly equivalent to "perma-renting" as renting has a lower barrier to entry.

To buy a home you have to come up with a lump sum of money to make a down payment. If you can't do that, you're forced to rent or split accommodation or live with your parents. Lack of affordable housing doesn't mean homelessness. There's a lot of elasticity there.

> Investors have too much access to property. It's a system of greed that benefits those who entered the market early (typically boomers).

Investors buy property to rent because home ownership is unaffordable. Blackrock buying up property is a symptom of the market, not a cause. They don't see houses becoming cheaper because they don't see zoning reform on the horizon, so they believe there will be long-standing demand for their rental units.

If housing were to become affordable, due to a large increase in supply, these investors would get bowled over twice - once due to lower real property value and once more due to lack of demand for rental units as folks buy instead.

Even foreigners parking capital abroad, more supply makes that (a) a bad idea and (b) kind of irrelevant. I'm not saying that shouldn't be tackled too, but once again, zoning would solve the problem.

the conflict you ond i have is you believe investors are benevolent and are helping poor folk who can't buy.

i don't believe anything of what youre arguing simply because more supply will continue to be purchased by investors to further drive up prices.

Ah, I may just be doing a bad job of explaining myself. I certainly don't believe investors are benevolent :)

> i don't believe anything of what youre arguing simply because more supply will continue to be purchased by investors to further drive up prices.

I think Japan shows us there are limits to this.

Anyways, I appreciate your thoughts!

There are lots of homeless people. There's an even larger population of people who are, for example, living in their parents basements, or over-occupying small apartments, or commuting for hours because they are living in distant, cheaper areas.

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