Is there a housing shortage or not?
constructionphysics.substack.com
constructionphysics.substack.com
The ACA (Obamacare) extended coverage to age 26 for children because about half of young adults up to age 26 were living with their parents
Since WW2, we've torn down about a million SROs.* We have also largely zoned out of existence the ability to build new Missing Middle housing.
We have a dire shortage of a certain kind of housing: small, inexpensive housing near amenities. This is true nationwide.
* https://en.m.wikipedia.org/wiki/Single_room_occupancy#:~:tex....
There has been a decline in households with four or more people and a rise in households with one to three people, but our housing stock tends to be geared towards nuclear families with a breadwinner father, homemaker mother and 2.5 children.
Last I checked, average new homes post-2000 were more than twice the size of new homes in the 1950s and held one less person on average. So you are seeing couples with one child buy four bedroom homes and turn the extra bedrooms into an office and a playroom or hobby space.
Meanwhile, the poorest of the poor are often unable to find housing at all. We have a lot of homeless people.
This would be much less of an issue if there were more affordable units. It's extremely hard to find units below $500 in the US. If you could readily find units for $400-$600, many people who currently can't afford housing would be fine.
It's the price itself that is the issue.
I’ve moved on to trying to buy an RV park or campground, or build one, and use tiny homes or Boxable for the structures. The purpose of a system is what it does, and it is not to get people into affordable housing. It is to protect property values and NIMBYs' desires, with a second order effect of disincentivizing density (even slight increases of it). Deeply disappointing for someone who works with the unhoused and is just trying to get them into housing that isn't a shelter or a tent behind the park.
Don’t put the onus on the private sector. You want landlords to make it easier for people to rent? Either have the government have programs to guarantee rent or make it easier to evict people for non payment.
There's likely other factors.
These people generally tend to file taxes as individual households, despite all sharing what is statistically a single unit of housing. I wonder how this plays with the data in the article.
I’m paying $2k more in property taxes this year because a bunch of very wealthy out-of-state home owners have decided they want to live here, and have driven up prices to an extreme.
I’m not going to be convinced that I should be ruinously taxed on the unrealized value of my land in order to force me to develop it according to the whims of whatever entity we entrust to socially engineer land-use.
Look at California. Everyone who bought here 40 years ago is super well off while those who moved more recently and are contributing a lot still can't get stability.
I realize property taxes go to plenty of local government ventures - but presumably the US government (and state government) does quite a bit to protect your property from outside forces and local thieves. It makes sense that the more value in property you have the more you should pay to protect that.
That assumes taxes are there to raise money. They're not.
Taxes are there to raise armies, not money. Government doesn't need any more land to do its work. Nor does it need money, since it is the currency issuer. What it needs is manpower. That manpower has to be released from the private sector who would otherwise employ them.
Therefore the most effective taxation is one that leads to fewer job offers from the private sector of precisely the sort of people government needs to hire to do its work.
Land and property is the least effective taxation that requires a large amount of fungibility in the economy to deliver the people government needs to hire, and is the least countercyclical to the business cycle.
Perhaps that baseless assertion rings true in the US, where the dominant anti-state and anti-social policy political views create a vicious cycle of sabotaging public services followed by arguing public services should not be provided because they are badly managed.
In Europe, whose countries have been criticized by US politicians for spending under 2% of the national budget in their armed forces, money tends to be mainly spent on healthcare and social programs.
It appears that allegory is a lost art in certain sections of the New World.
It's about manpower, not money
The criticism (whether I agree with it or not) is that Europeans largely live under the umbrella of US protection. The US contributed $73 billion to NATO in 2020 compared to Lithuania's $1 billion [0]. Who is more likely to drag the other one into a conflict with Russia?
[0] https://www.visualcapitalist.com/this-is-how-much-nato-count...
That was Trump's inflammatory and subjective accusation, but the only objective criticism was that most counties in NATO did not met the 2% GDP target for expenditure on their armed forces.
The US reportedly spends 3.5% of its GDP on their armed forces.
https://www.statista.com/statistics/266892/military-expendit...
Consequently, it's easy to see that OP's baseless assertion that "Taxes are there to raise armies, not money" is patently false, even when considering the world's leaders in military expenditure.
> The US contributed $73 billion to NATO in 2020 compared to Lithuania's $1 billion [0].
Completely irrelevant.
The US, the world's richest nation by far, has a population of around 329 million and it's GDP is around $21T.
Lithuania's population is around 1% of the US population (2.1 million, similar to New Mexico). Moreover, Lithuania is a pretty bad example regarding NATO's expenditure target, as it's military spending exceeds NATO's target (around 2.12% of its GDP).
GDP-wise, Russia is a kin to Italy, and the European Union's GDP is slightly lower than the US', at around $18T.
Instead of say, implementing a draft?
That's taxing. They are no longer available for the private sector to hire are they.
As I said tax isn't about raising money. It's about releasing resources. As you've cleverly discovered, there is more than one way to do that - given government's monopoly on violence. Time, currency, land are all up for confiscation when you control the big stick.
Of course there's what to do with the hoard of cash the private sector isn't spending on hiring people, but perhaps you can read "How to pay for the War" and discover the mechanisms for dealing with that.
And yes, maintaining the peg and free movement means that the higher level government does decide what to give them. That's what giving up sovereignty at a lower level implies.
Even at local level, they need manpower, not land. So you end up relying on fungibility.
[1]https://constitution.congress.gov/browse/essay/artI-S10-C1-2...
I'm also not exactly sure what you mean by your manpower statement. Say a town wants to build traffic lights and a new intersection. Surely it's easier to collect money and pay an outside firm (which may or may not have local employees) then engineer the road/lights locally?
Same with police. They use tons of tools and systems to both do their job and internally. Obviously raising money is going to be more efficient than each town designing its record management tools from scratch.
Land Value Tax is like taking property tax and removing the worst element of it. At least personally I think it moves the needle from "a very bad idea" to more in the realm of a necessary evil.
It's difficult to see how all the radical changes they promise would happen if property tax rates were lowered on average. That would tend to let people keep owning the property they have.
Some people might pay more tax, if lets say your area develops into a dense city core over 40 years your land will now be worth many millions, at that point your tax would be comparable to the skyscrapers around you. Which is reasonable since you are hurting the progress of the city at that point, and if you sell your property you will have so much money that you can easily move slightly outside the boundaries of the city core. But in most cases you wont strike it rich with your land getting worth that much.
Let's say someone has a house in a gentrifying area. The house isn't taxed but the land is, and property values are rising. Encouraging density means making it financially difficult for them to stay there, so they will sell to a developer. If the tax doesn't do that, LVT doesn't provide enough incentive to discourage speculation.
LVT advocates need to own up to what they're trying to do. There will be winners and losers. Someone with little income (retired) and property in a desirable location is going to lose.
And this is exactly the sort of thing that got Prop 13 passed in California. Homeowners really don't like it when their property tax goes up.
Can even keep prop 13, the important part is that improving the land shouldn't increase your tax as that discourages building things and encourages wasteful usage of that land like huge parking lots for a tiny shop etc. Land value tax would force those companies to sell or actually use it better, which is a good thing, they can't just sit on mostly unimproved land hoping the value goes up with time while paying almost nothing.
Most advocates of a higher LVT also advocate for a provision to defer the payment of the tax until sale of the property for pensioners.
You don’t?
LVT supplanting all other tax would absolutely mean it’d be ruinous to use land in ways contrary to the wishes of the government body socially-engineering land-use policy.
As it stands right now land ownership is just used to pass down dynastic wealth and reap economic rents (profit at the expense of someone else as opposed to earning it through work).
What's more immoral: Property taxes or zoning that prevents other people from building what they want on their own property? It's not the increased demand for homes that drives increases in prices, and hence property taxes, it's the prohibitions on new construction. Surely those are immoral too!
You need to answer this question.
>because a bunch of very wealthy out-of-state home owners have decided they want to live here
There it is.
Assess the actual cost, adjusted according to actual income — not the estimated value someone’s home.
It’s disingenuous to act like taxing that value is unfair, so much of local politics is related to property values.
The political priority of a home owner is the community in which they’ve made a literal lifetime investment in.
I don't know where you are getting that it would be a ruinous tax. It should also be offset by not having other types of taxes in a pure Georgian system.
I'm sure the "force people with existing single family homes to develop them into something else or sell them to someone who will" rhetoric the proponents of such taxes sling around has something to do with it.
So your land, through no effort of your own, has hugely gone up in value; don't you think there's something wrong with you benefiting from other people's labour that increased the value of your land?
In fact, as his tax liability went up he is actually paying more to accommodate the inevitable increase in spending on municipal amenities that the wealthy newcomers are likely to petition for, given how much they pay in property taxes.
If we imagine he did not desire these things in the first place, and was on fixed income like many thousands of individuals, he would be forced to sell his home as a result of the whims of the market.
The escalating cost of property in his area should leave him with a tidy sum of money to ease the transition, but that is little consolation for potentially being forced out of the home you raised your children in, met your grandchildren in, spent hundreds or thousands of hours maintaining and improving, among many other sentimental attachments.
To a homeowner who values their home and doesn't intend to sell, the increased value of land is an apology. It is a meagre recompensation for second order consequences of the market's capriciousness.
But at least the value went up right?
Now, we could certainly defer the payment of the tax until sale of the property for, say, pensioners, as no one wants to be kicking out retirees from their homes.
However, the issue of people losing their homes due to increases in value already exist for a massive section of the population: those who rent. As rents increase, many renters are forced to move. They don't even get to benefit from an increase in land value, from the community they helped build and improve.
A fantastic way to solve this issue would be a land value tax that taxes the economic rent of the land, in conjunction with removing all income and sales tax. This means that land sale prices are low, renters have more income to spend on things besides rent, and people sitting on land don't benefit enormously without returning that value to society.
The tax can be deferred until sale of the property for pensioners, for their primary residence.
Generally speaking 40 years worth of "I couldn't afford it" is a pretty decent apology.
This is working of NJ which has the highest rate at 2.5%, most states are lower.
Sure it sucks that you are paying $1k instead of $2k because your house is worth $200k instead of $100k but you know... You could sell your house for a profit of $100k.
The first people we lose are often those who have been here the longest, contributed greatly to the community, but are on a fixed income and cannot afford the tax increase.
Case in point, we’re losing our volunteer fire department’s rookie coordinator and training captain because he’s been priced out of the area.
He’s elderly, been a member of the department for decades, is hugely valuable and has a trove of institutional knowledge.
I’m glad he’s able to move elsewhere with the payout he’s getting from his home, but the loss to our community is enormous.
How is arbitrarily forcing people out of the communities they’ve built the moral (or constructive!) thing to do?
Every household that moves out of a neighbourhood is replaced by the household moving into a neighbourhood. A society where the most valuable neighbourhoods for working families aren’t disproportionately occupied by retirees paying a tiny fraction of the true cost of living there has benefits. Some households in the Bay Area are being undercharged in property tax by over $50,000/year at current rates. That’s $50,000 a year less for schools and services. It also means other, newer home owners have to pay a disproportionate amount more since if property taxes were based on market rates the percentage rate of the tax would go down.
That seems immoral to me, and I’m not convinced you’ve actually thought through the implications of your idealized grand vision.
“Your lost decades-long community members will be replaced by brand new people” is not the argument you seem to think it is, and could only be made by someone who had no experience building a functioning community.
I’m pretty sure it’s a bad idea because it’s pretty much a historical accident in California and implemented just about nowhere else. California can’t get rid of it because the policy creates a huge amount of inertia but people have tried on many occasions because the policy is also extremely bad.
The solutions to property tax rising are myriad. A person can take a mortgage out against the gains in property value. Since property taxes are well under 1%, this can pay for the property tax for 50 years easily and the only drawback is not owning 100% of the property. A person can also downsize to a smaller home or condo in the community, providing the community gets its act together enough on housing to provide said options. Ultimately, your community is losing someone because they decided the best option was to cash in the value of their home, take their profits and leave. They also decided there best bet for cheaper housing was elsewhere, which is something the community could have done something about with better policy. People should have that choice. The problem in this scenario is not property taxes going up with land value increases.
Lastly, artificially keeping communities together through massive subsidies to people who’ve been there a long time is just as much social engineering as having a property tax that’s based on current market value.
You’ve invented this idea whole-cloth.
We’re not subsidizing someone’s existence just because we could derive much more value from their land if we forced them to sell it to us.
> A person can also downsize to a smaller home or condo in the community, providing the community gets its act together enough on housing to provide said options.
We’re not obligated to pave over our community and turn our population into a permanent rental class, pouring wealth into the pockets of rent-seeking developers that will extract it from the local economy, just because you don’t like how we live.
I realize this is a bit inappropriate for yc, but just about everything you’ve said demonstrates a gross moral failing inherent in believing you have a rightful interest in forcing others to behave the way you want them to, instead of the way they’ve chosen to live.
You went to ad hominem very quickly on having your ideas challenged. It’s not a gross moral failing to want property tax to work the way it’s supposed to and does in nearly every jurisdiction on the planet. Except California because of weird historical accident.
There’s no such thing as a “market rate” when you’re discussing invented taxation schemes.
> You went to ad hominem very quickly on having your ideas challenged.
No, I went very quickly to calling out the immorality of your position upon your succinctly demonstrating the same.
> It’s not a gross moral failing to want property tax to work the way it’s supposed to …
Taxation schemes are an arbitrary invention. They’re not supposed to do anything other than whatever they’re designed to do.
Furthermore, the LVT scheme you proposed is not how property tax works in nearly every jurisdiction on the planet, and is designed to force people from their homes, coerce them into selling their property, and control how that property may be used under penalty of ruinous taxation for a failure to comply.
A $500,000 home is taxed $12,500 a year or a little over $1,000 per month in New Jersey the state with the highest property tax in the United States.
However that is an extreme example given few homes outside of super dense urban areas are worth that much and most states have much lower property taxes.
If we replace it with a $300,000 home and a tax rate of 1% (which is representative of most of the country) you instead get $3,000 a year or $250 a month. HoA fees are higher than that in many communities. That isn't ruinous at all.
The “option to downsize” is an odd euphemism for “forcing people from their homes to live the way I think they should have to”.
> Giving artificial tax breaks …
The tax itself is already an artificial, arbitrary construction.
Thats the same for literally any product or service in the world which you like which goes up in price due to increased demand. Is that immoral?
The only difference is that if LVT goes up it does mean you can charge more rent so you potentially could benefit even if you choose not to.
While renters in the same area are exposed to the same market forces. Theres no potential benefit to them they just need to pay more money.
I already own the home.
Imagine that sales tax was assessed yearly on every item you already own, based on the current market value if you were to chose to sell it that year.
> The only difference is that if LVT goes up it does mean you can charge more rent so you potentially could benefit even if you choose not to.
How does that help me if I’m not a rent-seeking landlord?
How does that help the community that you want to forcibly dismantle?
A privileged position the poorer half of the population doesnt share. They have to deal with rising rents along with rising gas prices.
>Imagine that sales tax was assessed yearly on every item you already own, based on the current market value
Imagine instead that it was limited just to the roof over your head. Voila youve just imagined rent. Something the poorer half of the population HAS to deal with.
Im just proposing leveling the playing field between renters and owners by limiting owners' right to capitalize on land value increases.
That is, taking away what are effectively handouts given to you. Free money. Wealth you didnt earn because the land value isnt about you or your house.
>How does that help me if I’m not a rent-seeking landlord
1. The option is always there. Whether you exercise it or not having the option of an additional stream of income DOES help you.
2. Your net worth literally goes up. You can easily convert that net worth into cash if you choose. Reverse mortgages, etc.
>How does that help the community that you want to forcibly dismantle?
With a higher land value tax land would HAVE to be used more efficiently. Denser housing etc. That means lower rents. That means renters who were priced out of their homes, forcibly dismantling their community, get to stay.
Some people think forcibly dismantling communities of renters is fine. Perhaps they dont think they matter coz theyre typically less white communities. Perhaps this is what they really want.
Nobody is capitalizing on unrealized land value increases. That’s literally the definition of “unrealized”.
“Make everything terrible for everyone” is one way to level a playing field, but rarely a good way.
> That is, taking away what are effectively handouts given to you. Free money. Wealth you didnt earn because the land value isnt about you or your house.
What free money? The wealth is unrealized. If I want to continue living in my community, it may never be realized.
When and if it ever is, you can tax it.
> With a higher land value tax land would HAVE to be used more efficiently
Forcing more people from their homes and destroying their community.
I also find the morality argument interesting, as land has some unique attributes as an economic good that one could use to make very convincing arguments for the immorality of land ownership itself.
Being allowed to sit on unrealized value from the land, deny its use to all others in society, _and_ not pay taxes on it seems like the immoral situation to me
By “sit on unrealized value”, you mean continuing to live in my home, in the community that I’ve worked with others to build, exactly as I have for many years prior?
It’s incredibly presumptuous to think you have the right to force me from my home and dismantle my community because you don’t like how we’re choosing to “sit on unrealized value”.
> deny its use to all others in society
I’m also denying the use of my lawnmower to all others in society, but I don’t have to pay a yearly tax on it.
There’s plenty of land, plenty of housing, and plenty of lawnmowers.
You’re not entitled to mine just because you really want to take it from me.
No one is entitled to anything that is your property. However, you still don’t own the land. Just a right to exclusiveish(barring other rights others hold to the land like easements) use of it as long as you pay your property taxes.
Wanting to keep a monopoly on the use of the land without paying the taxes is you feeling entitled to taking land from society.
The people being displaced are those on the margins who can’t afford it, many of whom our community is much worse off for losing.
Hence “immoral”; the government is forcing gentrification through property tax.
Imagine that instead, your income was taxed based on the government estimated income you could have if you switched to a new job that paid more, and you were taxed based on that hypothetical increase in your wages.
I see no profit from my home’s increased estimated value unless/until I sell and move out of the area.
That’s a great basis for not charging a tax.
> … especially when that tax is a tiny fraction of the actual value of the property.
How does that justify a tax?
Besides if Climate Change ends up half as bad as I think it will, some areas will need to designated as "no farm zones" or "no more people zones", some towns will need to be closed and maybe turned back into wilderness. The problems are already there, like California having a 20 year drought and importing most of it's water, at what point do you say "this is the new normal and we need to plan as such" because we continue to grow water heavy crops like pistachios in California when over 20 years tells us we shouldn't. But protection of ownership of a thing that probably shouldn't be owned will halt any effective amounts of change to be able to happen.
I'm not even entirely sure what I'm trying to say as I've not thought it out, but just recognize that we have these assumptions about things that maybe aren't or shouldn't be true.
If lots of people want something I occupy but I didnt create or make valuable why should I not have to pay society for that privilege?
In theory, nothing.
In practice rich people complain about everything that isn't "nice" and want it made nice. As the community gets richer as a result of the minimum buy-in going up the municipality will be be fixing more potholes, changing more street light bulbs, painting everything on a more regular schedule, hiring more enforcement officials to harass people over increasingly smaller violations, hiring more cops because rich people call the cops over more minor things resulting in more calls, etc, etc.
It costs a ton more money run a city/town the way people who can afford $500k houses and $2k rents want them run than the way people who can afford $200k houses and $800 rents want them run.
Georgism has a better moral basis than suburbanization. It’s possible to come up with a moral theory that justifies LVT and philosophers have done so. No philosopher has found a consistent moral theory to justify taking money from poor apartment dwellers and using it to pay for well-off suburbs. The current communities that exist are created through injustice and it’s unreasonable to demand they continue to exist unchanged when doing so requires perpetuating that injustice.
The fair allocation of a shared pool of taxes is a different question from LVT entirely.
Your philosophy is a weird sort of artificial elevation of the status quo. It's almost like you believe moral good is lack of change and everything should remain constant all the time. I on the other hand believe progress is a good thing, even when it requires some change and even when not all of that change is a-priori beneficial to those affected by it.
Your notions of what constitutes ruinous taxation is laughable since even a 100% LVT is set to the economic rent of the land. This can be expensive but it's certainly not ruinous since by definition the land can actually produce this value.
I could also characterize your position as a weird sort of worship of income tax. I could satirize your weak beliefs in bodily autonomy since you think so highly of the government interfering in labour contracts and taking income. This expression would result in equally damning statements akin to the moral outrage you have produced rather than addressing my argument. But it wouldn't be substantive debate, just like your current low-brow cheap-shots aren't.
Whatever injustice you think you’d be correcting, the one you’d be promulgating would be just as immoral.
You pretend to lofty ideals because you cannot actually justify the real human costs incurred by your desired form of government social engineering.
So there are substantial questions on why you are entitled to 100% of these gains you didn’t create. Short of libertarianism you’re not going to have a moral basis for a property right strong enough to justify it. And libertarianism is a terrible morass of bad philosophical ideas that don’t work.
That’s an invention to justify your desire to force people out of their homes to make way for your preferred use of their land.
You don’t want to only tax the profits when they actually do eventually sell; you want to tax unrealized “value” that they derive no benefit from and will never see if they remain in their homes and as part of their community.
I want to tax the economic rent of land. Your land being worth more has benefits to you even if you haven't yet cashed them in. The market taxes on your property going up functions similarly to rents going up from land increases and is just as justified. You treat it as a strange mystic unnatural phenomenon unlike anything that has ever existed. It's pretty bog standard.
If there is a moral basis for rent increases in response to land value increases there is a moral basis for increasing the amount of tax charged for land value increases. In both cases, the expense comes from unrealized value of land, the landlord doesn't have to sell in order to raise a rent. Property rights aren't magic that tears down the very fabric of reality.
No, I’m treating a taxation scheme as an arbitrary invention because that’s what it it is.
Nothing mystical or unnatural about it. Just, in this case, grossly immoral.
> If there is a moral basis for rent increases in response to land value increases there is a moral basis for increasing the amount of tax charged for land value increases.
You’re rather breezily glossing over the fundamental difference — property rights.
I get that you dislike property rights and want to steal them from people living contrary to how you believe they should, but your wanting to steal what other people have isn’t a position I’m going to agree with.
> Property rights aren't magic that tears down the very fabric of reality.
Your invented scheme to force people out of their homes so you can redevelop their land isn’t “the fabric of reality”.
People arguing for higher taxes on property are arguing an admissible public policy. The right to private property in land is contingent on taxation and there is a long-established moral basis for either property tax or land tax. I’m very curious for you to provide a definition of property rights that is more concrete than whatever you want them to be.
The model you’re proposing (LVT) is more sinister, in that the taxation rates would be set with the intention of directly coercing behavior and socially engineering other people’s lives according to your preferences.
Of course, I think you’d very quickly find that, thanks to corruption and regulatory capture, it would not be your preferences being prioritized, and you’d have simply handed a huge hammer to exploitative developers.
You mean the preferences of every single human that wants to live on that plot of land. The fact that you can't even see the fact that you personally as a single person want to override the wishes of countless of people and deny them the ability to fulfill their basic need of housing is what is truly sinister.
You complain about corruption yet you cannot see your own corrupt behaviour. An LVT is inherently an anti corruption policy.
But if you need to live in fantasy-land where NIMBYs are the ones saving the world instead of poisoning it, I guess you have every right to remain deluded.
I’m not advocating for an LVT to force my preferences on anyone. I advocate for an LVT because I think it’s a far better form of taxation than income tax. Left and right wing economists both agree.
You want to capture your own land rents so you don’t care how many developers do so as well or how harmful it is for society. Your position is basically “screw you, got mine” and it’s showing.
Surprised it took you this long to trot out “NIMBY”.
It’s pretty clear from the sudden uptick of people like you parroting the “Georgist” line that’s it’s a new (or, newly repurposed, anyway) faddish reframing of the same old ideas from the same old “give me yours” crowd.
You would have Urban workers paying most of their income and taxes, and remote white collar workers paying essentially zero taxes.
alternatively, if blue collar workers cant keep up with the tax, then they are commuting 2 hours each way to drive in from the countryside
Google on Googlers pay no taxes but plumbers and homeowners in urban areas pick up the slack. Sounds highly regressive
It also ignores the regressive nature of the tax. Many places have a vertical Supply for water, but that doesn't mean raising tax revenue based on water consumption isn't regressive
-- Builders are not building the kind of properties that buyers want. In my market these are suburban tract housing generally at a sub-$500K price point with low-end construction materials and finishes. Thus, buyers say "there's nothing to buy" because they aren't the kind of houses they want. They end up buying them anyway because it's all they can afford and/or other factors like proximity to work or family. But, looking at days on market, etc, relative to other properties, it's pretty clear buyers of these homes are acting more out of desperation.
-- Obsolescence. We have a lot of (older) houses in our area that are simply not conducive to modern living and until someone is able to do major overhauls, they will always be less desirable. Think tiny parlor rooms, bedrooms that barely fit a double bed, kitchens closed off from the rest of the house, single bathrooms, etc.
-- Non-turn key properties. My market is such that many local buyers live paycheck to paycheck and will not be able to afford renovations of any kind. Thus, the people buying non-turnkey properties are our out of area newcomers (of which there are many) but these buyers are such that they tend to want more amenities than our existing housing stock can provide. So basically anything not turnkey is sitting longer even in a competitive market.
So my point in all of the above is to say that in some markets, I believe there is more inventory than believed, but because it is not in line with market expectations you end up with the general public believing there are limited opportunities.
There is something to buy, but there is nothing to buy at the price buyers want to pay. Developers can get away with less expensive finishes because they know demand is still so high relative to supply that the houses will still be sold.
As for "non-turn key properties", whatever happened to living in a shithole for a few years and saving your money until you can afford to renovate?
In other words, "I had to suffer (or grew up with an expectation that many people had to suffer) this way, so no one else gets to complain about having to suffer this way, even if it's very possible to eliminate this kind of pointless suffering from the system."
Mom. I have wanted to buy land with a shitty trailer for years so that I can live there and build with cash. Wife thinks I'm nuts. I'm addicted to building things out of nothing though, affluency bores me.
I still cannot understand that trend, to be honest. Cooking generates smells, sometimes greasy fumes, and especially in summer unwanted heat, and I don't see why I need to purposely dump all those throughout the rest of the house.
In the past 20-30 years, there has been a huge concentration of wealth in major metros, and many rural areas have been "hollowed out", with most young people looking to "get out" if they can. Some of this is anecdotal, but is also supported by various data sets. Even during the pandemic, where many folks left the cities and went to other areas, it was still that a lot of "tier 2" metros (think Boise, Charlotte, etc.) that took the influx.
So my concern is that even if there are the same number of houses in the US nationwide, many of those houses have become completely undesirable as people move to areas with opportunity. Just think of all the boarded up $1 houses in Detroit, for example.
Just think it would be interesting to see how much "low valued" housing there is (i.e. housing that has lost value or been stagnant) to calculate how much concentration of housing demand has been going on.
And I think when they are moving, they're similarly not moving to as "new" or "small" destinations - e.g. tons of sunbelt towns saw very rapid growth from young adults moving there in the 60s-90s. But many of those towns are still the ones seeing a lot of growth; anecdotally, my parents moved to Dallas after college. Where's the "new Dallas"? The cheaper towns with jobs that are being promoted are still the same ones as fifty years ago, and they're not nearly as cheap as they were then anymore. Combine that with rising population from immigration + the kids who grew up there and didn't move away, and you see a lot of cost inflation.
I should have thought through my comment a bit more. Today I did some genealogy research and was amazed at how often my relatives moved in the 1700s and 1800s. It wasn’t uncommon for them to move cities three or four times during their life in a time when you couldn’t just rent a uhaul and head down the road.
Except that you only needed one person to find a better job back then. The problem with now is that you need two people two find better jobs simultaneously.
This was blocking people from moving when better opportunities pop up. I suspect this is more responsible for the Great Resignation than anything else. Once one person of a couple loses their job and has to start a job search, there's no longer anything slowing down the other from taking a better offer even if you have to move.
There's always work in California. And you can eat the grapes right from the vine. Got a handbill here that says so.
Something else was going on with the unattached 20-something millenials that crowded to existing cities instead of striking out on their own, though. Maybe when Elon gets to Mars, Gen Z+1 will have somewhere new to go. ;)
I think we should call this generation the ampersands.
Or is it that now that the prices are up in so many places, the behaviors will revert back?
Is it gonna be places like Boise post-Covid? Will anyone do that same level of massive development? Would they be allowed to?
A few possible reasons that spring to mind are population growth, high quality information quickly traveling around the world rapidly removing arbitrage opportunities, automation and outsourcing obviating certain businesses in certain areas, technology and automation allowing economies of scale such that big only get bigger and suck the air out of the room for small players.
Is it possible you only see it this way because your home town is a desirable place to live? If you had a home town nobody wanted to move to- would you want to move back there either?
Wat. Cities are not parties that get diluted with lame people.
London and Paris grew large and rich in comparison to their respective countries.
To the extent there is an equilibrium at play, it is a power law. There is no rotating most popular city, not withstanding what people think about San Francisco. Density wins, and the winners keep on winning absent some sort of disaster.
I'm sorry, but this seems like a classic example of pulling out some Hobbesian cynicism as a calling card for classy sober thinking...but in this case it's dead wrong.
Citation needed that high floor area per land area without low floor area per capita has environmental issues.
If you fill a party past it’s optimal capacity, is the same kind of party? Are you still likely to enjoy being there?
Why is a city any different?
There are absolutely problems that only emerge with scale, and scale non-linearly with population and density.
> London and Paris grew large and rich in comparison to their respective countries.
“Large and rich” aren’t the values that most/many people want their communities to optimize for.
Maybe. But for the high growth job generating urban centers in todays US that’s certainly the case.
Cities to do not have fixed capacity.
> There are absolutely problems that only emerge with scale, and scale non-linearly with population and density.
The biggest thing that doesn't scale is private car usage. But private car usage is terrible. I have not heard of extant cities hitting fundamental scaling constraints in and other way.
> “Large and rich” aren’t the values that most/many people want their communities to optimize for.
Then why aren't rents lower?
That doesn’t mean they don’t have optimal capacities.
The metrics you’re optimizing for are not necessarily high density and high population — like a dinner party, which would be impossible to scale and would ruin the experience if you tried.
> I have not heard of extant cities hitting fundamental scaling constraints in and other way.
You’re ignoring all other negatives to living in a city and high population density.
Crime. No need for community involvement; everything is provided by paid municipal services. Not knowing your neighbors. Not having space to breath, or to have a woodshop, or to garden.
The list is endless. You might not care about optimizing for those properties, but lots of other people do.
> Then why aren't rents lower?
They are in plenty of places, you just don’t want to live there.
> The metrics you’re optimizing for are not necessarily high density and high population — like a dinner party, which would be impossible to scale and would ruin the experience if you tried.
You continue to crudely reason by analogy without mentioning what these scaling limits might be.
> You’re ignoring all other negatives to living in a city and high population density.
> Crime.
What about cities are intrinsically more crime ridden?
> No need for community involvement;
What?
> everything is provided by paid municipal services.
False, even if I wish it were :P
> Not knowing your neighbors.
Again not intrinsic at all
> Not having space to breath, or to have a woodshop, or to garden.
You are confusing floor area per capita vs land area pre capita. Even gardens can be in boxes on balconies, see New Orleans.
> The list is endless. You might not care about optimizing for those properties, but lots of other people do.
> > Then why aren't rents lower?
> They are in plenty of places, you just don’t want to live there.
Hey buddy, if "weird city apologists" like me are not representative, then we can't bid up the the rent.
Clearly a lot of people are trying to live in the major cities or they wouldn't be as high.
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This is one of the worst comments I've ever responded to on HN. All vague NIMBY vibes, no actual reasoning whatsoever. Get that shit out of here.
Don’t know, but the stats are quite clear. Crime per capita correlates strongly with population density.
>> No need for community involvement;
> What?
Community involvement. I understand this is likely a totally foreign concept to you, but where I live, we rely almost entirely on volunteerism and community support to take care of each other.
That includes everything from municipal services like our volunteer fire department, to basic day-to-day support for others in our community.
It’s a rewarding and engaging way to live, and nothing comparable exists in a dense city; I spent 20 years living in SF and NYC before I lived here.
>> Not knowing your neighbors.
> Again not intrinsic at all
Of course it is. With 20k+ people per square mile, you can’t know your neighbors.
> You are confusing floor area per capita vs land area pre capita. Even gardens can be in boxes on balconies, see New Orleans.
Don’t piss on me and call it rain. That’s not the same and you know it very well.
> Hey buddy, if "weird city apologists" like me are not representative, then we can't bid up the the rent.
A lot of people packing themselves into a sardine can might only see the can and think that’s the limit of the universe.
That doesn’t make it true, or make you representative of the rest of us out here.
> This is one of the worst comments I've ever responded to on HN. All vague NIMBY vibes, no actual reasoning whatsoever. Get that shit out of here.
Given that you took things in this direction, allow me to respond in kind.
Grow up, learn about the world outside your tiny immature bubble, and don’t come back until you actually have something useful to share with the rest of us.
At most, you could say that the preference of living in the city vs. its suburbs flipped compared to 20 years ago, which had previously flipped when cars made suburbs commutable.
Well, it was the best city until just after I moved there, then it became untenable and people should stop moving there.
And I'm not sure we'd want it to anyways? When prices get too high for later folks to move, then that's a great signal to actually go elsewhere.
I'm not sure why we'd want a system where everyone just migrated to one or two cities in the entire US. I've seen those cities in Asia that have populations of 15M or 20M and yeah, seems super inefficient once you get to a certain size.
What this seems to be leaving out is the lack of much of an escape valve in the Bay Area. Where there’s density, there could be more - with zoning changes and years of red tape. Where there’s little density, geography is against much of anything. You have serious hills/mountains, the bay and the ocean dividing things up. Where there’s land with little or no housing, there’s no drinking water and/or regulations against building and/or those areas aren’t very well connected.
Atlanta seems to be one gigantic sprawl that steadily transitions from relatively low density urban to suburban. If you can’t afford/find housing in the metro proper, just go a few miles further out.
When you compare these metros and see similar growth but dramatically different prices, it does seem perplexing, until you consider the jobs. Median income is twice as high in SF than atlanta. That means there are more workers who are paid high enough wages to afford higher rents in SF, and landlords are pricing accordingly. In Atlanta there are fewer of these workers, and at a certain point it becomes difficult to price an apartment so high and still pull in prospective tenants as quickly as you'd like. As atlanta adds more high income jobs and fewer units of housing though, expect prices to rise in response and the low income workers more commonly pushed to the fringes or on top of eachother in overcrowded conditions.
> But there are other economic relationships that might have similar effects. One of these is income level - as incomes rise, demand curves shift to the right, which (all else being equal) should also cause an increase in prices. So we should expect an increase in housing prices to be partly driven by rising incomes, especially when the supply is fairly inelastic (as it is for housing.)
Meanwhile fertility among the adult incumbents does raise the population, even though those children won’t demand housing units for at least 18 years.
Maybe San Francisco has added a bunch of professionals living like college students while Atlanta has added a bunch of actual babies.
Unless we invent the ability to build single family homes into the 4th dimension, there is no physical way to build enough houses in good locations for everyone. And we can support only a certain amount of horizontal expansion, because eventually the cost of infrastructure and services becomes economically infeasible.
Climate change is going to help solve that problem for us. I expect a lot of folks to be forced inland, if not by rising water, then by storms or water shortages. It's looking like we may lose large parts of the western US to heat and desertification too, but plenty of "fly over states" could end up being a lot more popular.
Why does every city need to be a vertical one connected by state of the art high speed rail?
Those who want to live in the cities with their apartments are more than welcome to. Those who don't shouldn't be limited by some policies made by cityfolk.
Raise wages (the price of labor) and the shortage will go away. Why doesn't the same principle apply here? We can just raise housing prices and the shortage will go away.
There is a national shortage of Portland cement (imports restricted, new plants regulated out) and high quality flyash (these people got it from a place that used to ash from coal burning).
That can't help house prices...
They say "At the extreme end, you can’t have more households than there are people", which I think is incorrect thinking.
It really matters when looking at houses getting built, because if those houses are holiday homes, then most analysts really screw up their analyses because the averages look like they improve, but actually the majority of people have no improvement.
That doesn't seem very significant in cities of roughly 750K/875K (within city limits of Seattle and SF respectively)
A gap between "Housing Units" and "Households" indicates some slack. When these two curves coincides, everyone is buying at the margin.
Bring back land loans and the problem will solve itself.
It makes it harder to discover the true rent (one has to pay a large lump sum to the previous tenant to get a rent-controlled apartment) and it discourages rental housing construction.
Do you really think that these effects are best observable indirectly, as rent and construction?!