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Comment by kqr2 | Hacker News Reader

How would the builder's remedy work in a place like Atherton if the homeowners form a pact and refuse to sell to any developers? E.g. if Marc Andreessen (https://www.theatlantic.com/ideas/archive/2022/08/marc-andre...) and Steph Curry (https://therealdeal.com/2023/01/29/steph-curry-shoots-his-ni...) form a coalition with other residents then they can effectively keep the city down zoned even if builder's remedy is applied?

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The point of upzoning is to allow for more housing to be built, not to literally force it upon unsuspecting property owners.

If nobody wants to sell, nobody wants to sell.

But eventually...

Houses in Atherton are already the size of apartment buildings. You could house 10-20 units in them without any change to the exterior.

Change will happen, people would gladly pay a normal Bay Area house cost to get 1/10 of an Atherton house and live in that school district

Yeah, that'd be great.

School districts/boundaries being so unequal is at least partially the result of zoning policy that makes it harder for people of less financial means to move into affluent areas.

I saw a counterexample living in Munich, just in the sense that the differences between neighborhoods in apparent wealth were much less stark than in the US. Almost everywhere looked vaguely middling, very few places looked obviously rich or poor. And so it's no surprise that the differences between public schools was lesser too.

Schools are funded by the state government in germany, not by districts. The concept of a school district doesn't exist.

I'm talking about the area boundaries that determine where people go to school. Many terrible school districts or schools in the US actually have plenty of money (the DC school district is a famous example).

They’re going to be some crazy expensive apartments.

Initially, that's true. Though not as expensive as owning a house there, obviously.

Sure but still far less than the barrier to entry of a house there now.

Yep. Eventually the rich die and their kids have zero interest in living in the town and sell the property on an open market and huzzah now there is the potential start to open up the opportunities for more people to live in the gated community.

I think that's fine. I dont think the point of this is to confiscate land that people own and build condos on it. But realistically real estate ownership is pretty disperse, even in small town called Atherton there are going to be thousands of individuals that own 1 acre plots and maybe a hundred that own larger plots. It just takes a couple people to choose to sell their land or to die.

And the average home in America is owned for what, like 5-7 years? If someone is moving out of the community, are they really going to ignore a windfall payment from a developer?

And how about estate sales? Are the out-of-state heirs going to care to who their parent's property is sold? Or are they just going to go for the top dollar?

Put me on team top dollar. Hell, I'd even consider accepting a lower offer from a developer if I knew they were gonna build more properties in it (though of course this is extremely unlikely to happen as the developer planning on building more units stands to make more profit and the land is thus worth more to them).

They can try. It only takes one defector to cash a cheque. Or bankruptcy, divorce, general orneriness ...

Putting on the red team NIMBY hat, could they try and use private deed restrictions (https://www.carealtytraining.com/blogs/deed-restrictions-wha...) ? E.g. reuse the same mechanism that the city plans to use: "proposed building are deed-restricted to low income residents who make at or less than 80% the area median income."

This "hack" is apparently used in famous "no zoning" Houston to keep exclusive neighborhoods exclusive (https://kinder.rice.edu/urbanedge/houston-doesnt-have-zoning... )

Virtually every affluent residential neighborhood in Houston has strict private deed restrictions — and, remarkably many of those deed restrictions can be enforced by the city. That’s why River Oaks, Houston’s wealthiest neighborhood, doesn’t have apartment buildings or office buildings in the middle of the neighborhood.

That would only work if the state allowed those deed restrictions to stand, which it likely wouldn't. Just because Houston allows such a clause doesn't mean California would.

Those deed covenants go back to the KKK and whites-only policies imposed by the builder during lot subdivision. The game-theory doesn't work for retroactively imposing them on your neighbours. Why would someone selling promise to give up upside when they are moving away anyway? Like, are Anderson and Curry gonna show up on your lawn at midnight in hoods?

An example of such orneriness:

https://www.cnet.com/culture/george-lucas-to-build-affordabl...

I am excited to see how well a coalition of rich people performs once they start getting massive bids.

Especially when they fight with each other, as neighbors do. The wealthy aren't always a monolithic block of undifferentiated piles of money so, not that I know what the future holds, but imagine you've been squabbling with your neighbor for decades; you've always wanted to move back east. What better giant finger to that neighbor than selling your multi-acre estate to be replaced by a 30 or 100-unit apartment complex?

Right, a "spite" transaction.

But on the other hand, the coalition of rich neighbors could organize a counter-offer to buy out neighbors who want to leave. A bit like lands are bought up by conservation groups to prevent development. Put a price on how much you want to preserve your neighborhood.

They could even buy out the developer who purchased a spite sale, unless there are deed restrictions in that sale. Most developers are also doing it as a business, not for idealism, so it there ought to be a price point where they see it is more lucrative to fold than to go forward with the building project.

I'm not sure I understand the economic effect of something like this. At first blush it almost seems like the same feedback loop as land value taxes. But, it also creates a game-theoretic scenario where the coalition is pumping up the price of their own neighborhood and increasing the potential gains for the next defector, at which point the values could rapidly unwind if the coalition loses its way.

Seems like there would be massive, easy arbitrage in buying the home and saying you are moving in then changing your mind and building multi-family, then taking the buyout from the coalition of rich neighbors.

Free money for defection and could easily exhaust the resources of this coalition.

> What better giant finger to that neighbor than selling your multi-acre estate to be replaced by a 30 or 100-unit apartment complex?

You really do not realize how big (or small, rather) apartment complexes are. 100-unit building is the size of 6-7 single family homes (or maybe 3 McMansions), and maybe twice as high. It would barely be noticeable in such neighborhood.

See this for example: https://ctexaminer.com/2021/10/23/100-unit-apartment-complex...

It's not really the size of the building, it's the size of the parking lot and the resulting traffic. That's what *everyone* hates.

With parking minimums of 2 spots per unit, your standard 800 sq ft apartment requires another 600 sq ft of parking. And units can be stacked relatively cheaply, parking can't.

In my country parking spaces for residential buildings are all underground, outside parking is considered subpar, thanks to the climate. I've seen residential buildings with 3 underground levels, to accommodate all the parking requirements. But in case of 100-unit thing that should not be necessary, one level is enough.

The writer does indirectly allude to this:

" There’s a lot of questions still unanswered, though. This will all be legally challenged since we’re in new territory with the HAA. Many developers still can’t believe it and aren’t sure to propose nor have readied capital to propose projects. Other builders since the Santa Monica news appear quite excited to build apartments in exclusive, expensive enclaves they’ve always wanted to. There’s a political question too about whether HCD will let substandard housing elements through just to not anger cities and incite backlash. "

Very likely the 'political question' will not be limited to 'whether HCD will let substandard housing elements through'.

Just imagine one acreage selling out, and building a Manhattan-style pencil skyscraper on the plot. Hilarity would ensue.

Eventually, people die, and sometimes the children were not part of the monopoly...

I do wonder if anti-trust could be applied against such a "don't sell" pact, especially if it was successful enough to capture an entire town. Probably not, but that sort of anti-competitive behavior should most definitely be illegal, with stiff penalties for those who participate.

You only need one property owner to defect from the coalition, and this seems hard to avoid.

When it's a mall, factory or highway, eminent domain is never off the table. Curious to see if the pols would be so itchy for housing.

We aren't going to force anyone to sell their property. But realistically, Atherton has many property owners (including many that are far less rich than the ones you mentioned). The chance that none of them ever agree to sell is zero.

I'd happily sign and then sell to someone offering to give me multiple centuries of fuck-you money.

I'd imagine Atherton would remain more or less the same with the exception of some homes being converted to duplexes and triplexes. At least in Minneapolis with the 2040 plan, more affluent neighborhoods tend to stay that way.

How would a coalition work here? They have no power to stop anyone from defecting. Unless Marc and Steph offer to buy any property in Atherton at absurd values they're powerless to stop a developer from buying someones house.

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