I think it might help people understand to put it in terms like this: there are 100 housing units out there and 150 people. How do we solve the problem?
I was talking to a NIMBY and converted her to YIMBY by relating to her that in Santiago anybody builds whatever the fuck wherever the fuck, zoning be damned basically, and that leads to rent being like $150 a month. For real, you get what you get in SF for $4000 a month for ah...$400 a month in Santiago. And the minimum is very low. Sometimes $100.
Case in point Marc Andressen’s family as we discussed recently https://news.ycombinator.com/item?id=32350657
People complain about how bad zoning is, and I agree that municipalities can get carried away with it, but most people highly underestimate the impact zoning has had on their lives and take even moderately executed city planning for granted.
I know that’s not the case in Chile for any of the central neighborhoods (Yungay, Brazil, Lastarria, Franklin, etc…) which I think are probably close to SF in terms of size. 325k CLP is about the lower end for a nice, small 2BR. You can get more rooms but the square footage is smaller. Las Condes/Vitacura goes up from there.
You can buy a nice 2BR apartment for $175k USD though.
So those are all beautiful quaint neighborhoods--myself I'm in Lastarria, but come on that's expensive. Yungay, little less. Barrio Brasil, no he cotizado [I haven't seen prices]. Franklin I don't know. I bet Franklin isn't that bad. But uh, try Estación Central. Another place I heard of that sounded like a great idea was Parque Forestal near Baquedano. Huge places at a third the going rate, just because of the violence, which I seek out because it comes with low rent, and which I in particular can handle, as a local. That's my niche. Las Condes/Vitacura is of course much more expensive, because first there's zoning, second it's for GCU--gente como uno[1], they're much more restrictive with buildings than other neighborhoods. Another cheap one is Ñuñoa, practically no zoning, on the subway line and there's tons of huge buildings.
But you gotta be a street cat and adjust expectations. So for instance, there's lots of burglary. All the time. Steal anything, shoes shaver knives children's toys all kinds of shit. Anything. But they're looking for the macbooks. Violence: there's guns these days. It depends on the neighborhood. Bad sentences for armed crooks, like I knew in rehab a guy who put a kitchen knife like between his cheeks but at any rate in his pants for protection when he was partying in the poorer parts of town. He got busted, it looked bad on him, weapons are forbidden. But dude then there's poorer and poorer neighborhoods, cheaper and cheaper rent, it's only a matter of being tough enough for the cheap street. People live in Maipú (pronounced as you fear) for hella cheap.
You just mentioned the neighborhoods where the privileged live. Those are all nice neighborhoods, for the HN crowd, American-friendly (they'll cheat you and steal from you--not from me, but from you--but hell it's cheaper than SF rent). Hell, go live near Pajaritos or Neptuno, I can tell you the rent won't fuck up your checking account. And none of the places I mentioned are tent cities, there's those here too, along with--more common previously--poblaciones callampa, shroomtowns, popping up out of nowhere squatting on unsuited land like shrooms out of the ground, from one day to the next.
It's a mixture of continents. Europe in Sector Oriente, Asia a bit in Patronato (my agent scouted there when he needed Asian actors/models), like there's real Latin American poverty too, but not that that's worse, just poverty is suffering, not a stain on the dignity of the sufferer.
But there's no overlap with San Francisco. The most expensive Santiago place will come in cheaper than the cheapest San Francisco place.
[1] This is a joke indigenous to Chile. They idea is going back not many generations, the people in the target audience for this joke had some money and some status, before downward mobility as the fortunes of the country rose and fell repeatedly. So there's an in-crowd. Specifically, in Chile, one sociological measure of status is whether you have a Spanish surname. So Gutiérrez, Pérez, those are considered--by sociologists, and in general by the culture--low status. Then on the other side is the Basque surnames, with lots of z's and r's, very recognizable, long names. Basques did very well for themselves in Chile, and that's more or less the only thing that matters for status really, is money. Power much less. It has to do with the neoliberal economy, so like the lay of the land up til 2019 was best understood by reading an introductory economics textbook, whereas in America it's the Bible. Money is everything, and like how you go about getting it, where it springs and where it's scarce, and the myriad ways you get fucked when you don't know the trick they're pulling on you. Which you can usually figure out, again with an econ textbook. Gente como uno is like an in-joke of the recent immigrants, not the very recent immigrants from eg Venezuela, but the wave from before which had non-Spanish surnames, like Basque, but also Italian or Dutch or German, or English is good too, Irish is very good in Chile in particular despite the Irish community being vanishingly small (most of it mixed in producing more redheads than blondes, blonde hair is incredibly rare in Chile, to the point any shade of hair that is brown or blonde is called "rubio", which stands for blond/blonde. I got put down as "rubio" in castings, it's a cultural thing, in America I say I have brown hair. It's just blond by American standards, platinum blond, like many Chilean men I know before their hair darkens dramatically (Pedro Pascal being one example, the Mandalorian. I saw an analog picture of him as a child, platinum blond, just darkened dramatically, to jet black, this happens to some Chilean men), so platinum blond, is incredibly rare here, 1 in 10000 people or so. Like if you're a blonde woman interested in Latin men like the bravado the dancing, and sure it's the safest part of Latin America, if you're blonde Chile is not for you, it's considered intimidatingly beautiful, nobody will hit on you. So I'm told.
Comparing via square footage, it's true - cheapest SF place is more expensive than most expensive Santiago place, but 3BR Parque Forestral penthouses (Even Barrio Italia) used to push $750k, for example, which you could get a 1BR place in SF for at the time probably too. If you go outside of SF city limits it gets much harder to compare.
Of course, these are just housing costs. Other things end up being more expensive in Chile in a different ways. We have kids, and even mediocre public schools like you find in the bay area are better than almost all private schools in Chile.
So in that, you agreed with me. Let me take the chance to agree with you, public schools ("liceos") are not as good as Chile deserves. Well first off very underfunded, if you go and send your kids to Nido de Aguilas that's about the same budget per student as an American public school. And it's the best education. Just yeah it's hard scratching up that change in the Chilean economy, as it stands today. And there's plenty of schools, just education in America is subsidized and you have to pay your way in Chile.
Globalism has made it easier to do global business in much of the US, logistics, transportation, and communication have changed dramatically since then.
People take for granted the fact that you can pop into any small town grocery store and find a vegetable grown in another country. That’s a relatively recent possibility.
But there’s also many cities of 100-300k residents with plenty of affordable housing and Fortune 500 offices.
I watched my grandparent’s hometown (Newton, IA) become less and less desirable over the decades after Maytag moved the factory to China. They diversified a bit by adding a race track, but it’s a shell of its former self. Cheaper offshoring (not from one party or another, but encouraged by politicians on both sides) really wrecked the economy of small US cities and towns.
Double up or move to a cheaper place
That’s how the US west was populated, it’s how the US east was populated too - migration
Virtually every other problem is either a distraction or an indirect consequence (e.g. NIMBYs, too much luxury housing) of this core issue.
When you tax land value, the initial price of the property drops to offset, which makes it easier for less wealthy people to afford a down payment. A perfect land value tax would set the price of land at zero with a hefty month tax payment.
If this raises more tax money then the government can meaningfully spend, you simply give it back evenly to the community. Note that, just like the carbon fee and dividend system, still incentivizes that people use as little land as they can.
[0]: https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
Since this incentivizes increasing the housing supply, zoning would quickly change from exclusionary to abundant. With those new homes being built, people would choose to move from their worn-down house into something new and better, and their current property would eventually have the same fate. It's not kicking people who love their homes out, it's letting people leave their homes for better ones.
You would still have apartments. You would still have AirBNB's. You would still have co-ops. You would still have houses.
Any tax money in excess of what is currently paid would be currently would simply be given back as a citizen's dividend, unless that tax money could be better spent on infrastructure, infrastructure that would pay for itself in higher land taxes that would yield even more land tax share dividends.
Land being a liability means that the "owner" will have zero incentive to hoard it. It will mean that owners of low rise property in high demand locations wont be doing everything in their power to inhibit high rise development because theyre sitting on a pot of gold. Theyll be sitting on a pot of taxes instead.
It means any undeveloped land will be developed or sold to somebody who will.
It means slumlords who rent out shit housing will lose money.
We all recognise that this is the appropriate way to deal with electronic spectrum - auctioning off time limited rights. The idea that your great-great-grandfather owned 400-405MHz so you should too is no less ridiculous.
How much rental vacancy is needed for there to be enough space for people to move around? 3-5%? Too low and you have gridlock.
https://www.census.gov/housing/hvs/files/currenthvspress.pdf
Home vacancy rates are currently at about 0.9%(!!)[2]
These are both very low. In home vacancies it's probably the lowest the US has ever seen, and in rental rates it's almost the lowest, and many metropolitan areas are probably experiencing the lowest rate they've ever seen.
Supply is the problem. Almost every other comment I see on this topic seems to suggest that the issue is something else, but this is all really simple economics. Supply in the places where people want to live is very low, demand is very high (and possibly higher than ever due to pandemic pressures), prices go up up up until the supply-demand curve settles down.
I'm not afraid to use the government to try create justice in housing, but the fact is that the only thing that really matters at scale today is SUPPLY. If we get more supply in the places people actually want to live, prices will go down. The fastest and cheapest (and probably only) way a government can make this happen at the scale needed is by making construction of (or conversion to) new dwellings much cheaper. If you are proposing policies that don't do this, I think the best outcome is nothing and the likely outcome is an even more messed up market that will inevitably privilege the rich over the poor.
As far as commoditizing housing, I just don't think it's a problem (and probably not very viable either) so long as there is enough housing supply. Anyone who thinks the residential-real-estate party is never going to stop is out of their mind or trying to scam investors. The party will stop.
[1]https://www.census.gov/library/stories/2022/05/housing-vacan.... [2]https://fred.stlouisfed.org/series/USHVAC [3]https://ipropertymanagement.com/research/rental-vacancy-rate...