To ease the housing crunch, more places end single-family zoning
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I live in a seven-unit apartment building on a block that is otherwise entirely single-family homes. It was built in 1890. As far as I can tell, none of the residents here could be noticed as out of the ordinary by anyone outside of our building; I have my gripes with the neighbors downstairs who play their TV too loud, but it has no effect on the rest of the neighborhood.
I can't say as much, however, for the house next door, which is rented by a group of college students who regularly hold loud parties with dozens of people over. I'm sure they're pretty conspicuous. In an economy where it is already very common for multiple adults to rent rooms in a "single-family" home, it is a mistake to blame people's behavior on the type of building they live in.
That would be a fair complaint, if the word “housing” had been used in place of “zoning”. Single-family zoning is a legal restriction that allows only single-family housing. Ending it is not the same as ending single-family housing.
If you are going to complain about phrasing, you should complain about the actual phrasing.
People who live in areas affected by single family zoning tend to be very familiar with the term.
Otherwise intelligent people have their brains broken when it comes to discussions about housing. We need to pick words carefully to not confuse.
Until more state laws (ie California’s recent legislation) are passed where density developers can reply “that’s a shame”, NIMBYs rule. NY is gearing up for a similar fight.
https://www.politico.com/news/2023/02/11/hochul-faces-uprisi...
I really don’t think that’s true. Yes, the average citizen is uninformed about the average policy issue, but that alone doesn’t support a characterization that most unsophisticated readers has the same very specific misunderstanding of a particular policy issue when identified in the usual terms. There are some issues where something like that is the case, and there is polling to suggest that, but just making the unsupported leap from “unsophisticated citizens” to “this particular misunderstanding” with no evidence is not warranted.
Comments to these zoning fights are full of gems like this. Arlington is about the size of Buffalo NY and 50% denser. It hasn’t been anything other than urban in my lifetime. Maybe this lady is 90 years old who knows.
It seems to me that if it were legal to do so there are plenty of tiny towns that could grow to the size of a small city like Arlington or Buffalo.
Not sure why you aren't figuring urban sprawl into this equation.
That would be increasing the density of the rural area the new small town springs up in. New towns do spring up in places where they can, but it's usually either some company drops a facility there and then housing pops up to support the facility as people decide they'd like a shorter commute, etc; or it's in the outskirts of built up areas, but then people complain about sprawl.
We result don't expand by increasing density, this has been generally banned by zoning over the past 60 years.
We mostly expand with sprawl, which causes long commutes, massive pollution, social isolation, bad health, and all sorts of other things. Which for people who want it, great, enjoy! But we ban density, and don't ban sprawl.
As for expanding other towns, this must be done by those with the capital to buy a house, or start a business to offer jobs, etc. Young people starting our do not have these things, and we need to accommodate them somewhere. To everyone who suggests building in a different small town, I suggest that they be the change they wish to see and move out to make room for somebody else.
Usually the reason is a lack of reasons to locate there. Even in the WFH era there are reasons to locate where existing good services and amenities are; a lot of amenities (niche business or cultural stuff, etc.) needs a critical mass of people to support it, and small towns generally don't have the mass. It is really hard to start up brand new septic or water delivery or whatnot in the middle of nowhere.
Also, consider that it doesn't take that many people to overwhelm a small town's population. What I hear in the Western states where remote WFH is becoming popular, is now WFH workers are pricing out existing residents, because rural salaries cannot compete with WFH wages. So WFH has mostly just resulted in exporting the housing crisis without significant easing in the places that had this problem pre-WFH.
By "establishing small towns" I assume you mean suburbs.
It seems to be the opposite. Cities with tons of flat land around them (e.g. Houston) tend to expand their footprint and maintain density. It's mostly areas that cannot (e.g. SF, LA, NYC) that increase density. Once you hit natural limiting boarders, you have to build up.
The problem the west coast has is not replacing housing once things got full and prices increased.
Every suburb I've ever lived in has been prone to ever-increasing low-density sprawl and resists building even a 2nd story for anything other than residence. I can drive past miles of 1 story strip-malls in virtually every suburb in America, and only rarely do I see an 2 story doctors office, or maybe a 3 story apartment or office building.
The same housing in Arlington is super efficient. Tear down house, build apartment building. Connect to sewer, roads, etc. The residents walk to the Metro stop.
A lot of the small town problems also apply to sprawl and exurbs. It is possible to build more efficient small towns, older ones have a walkable core.
When we grow population we increase density. The two concepts have a direct linear relationship there’s no other thing that can possibly happen.
The only relevant question is where the density increases. A new small town in a rural area is an increase in density for that area.
Your argument thus reduces, entirely, to “why don’t people go somewhere else instead of where I live?”
The is a lesser-known branch of economics called economic geography that studies what happens when you have big concentrations of people. Turns out you get much better services and it is cheaper to support everything (eg, one big trainline which costs a lot but gets huge amount of use, one big market where you can buy and sell everything, etc).
The short of it is that small towns are not a bad thing, but if you want to live a comfortable life with lots of services and material luxuries then you had best seek a city.
Understanding that there is a mutual dependence between the countryside and the cites, it seems like in the past the limit on city growth has always been sanitation and the ability of the agricultural base to support the urban population with the labor that is available in the country.
I'm curious if you know any good entry-level or popular books on this topic.
Seriously... Just a few years ago, banks were giving you loans for like 1 - 5 percent down..
But the average income of folks in SF is really high, because people without very high incomes can't live in SF!
That's bad.
I have this theory (I wish I could think of a way to easily prove it right with some kind of cherry-picked statistics/data but I'm not confident I'd be able to) that we've finally reached a point (I'm sure it isn't the first time in history but I don't know a lot of history) in "late-stage capitalism" that the top 20% don't mind paying/can pay/will pay/are willing to pay/compete with each other to the point where the bottom 80% can't keep up.
My source is, I tried to buy a house semi-recently. All of the typical stuff you read. Lots of demand/competition. Middle class stuff. The houses sold for what it sold for because that's what people are willing to pay.
Whether it's because the couple who won the bid had bought a $300k house 10 years ago and it doubled and they had $300k extra in funny money equity fall out of the sky is almost irrelevant because it puts them in that "20%" category. Once you are in that category (in my mind), things like "I should drive a Corollla to be efficient" go out the window when every stop light is people who can comfortably afford $80k BMWs without blinking an eye. "Who would pay that?! You can get a good used car for $20k! Blasphemy"
I see it like this:
If a house is priced for $600k but your gut (bias based on historical data) says "it was just $400k not too long ago, it should be worth $400k! this is madness", but then the market moves on and leaves you in the dust (and that $600k house goes from $600k to $700k and beyond), it's just upper middle class people paying (hopefully) what they can afford/are willing to pay.
Would you agree if I said the problem isn't really the billionaires when it comes to why middle class hard working people can't afford a single family house, but instead it's people making $200k/yr+?
However, the reason we are all able to earn so much is due to the ruthless pursuit of capital further up the market. The only reason we are able to earn so much is because billionaire business people decided that the best way to maximise their company value was to take the not-innovative option and pay lots of people huge amounts of money.
I think irresponsible is probably a poor word choice here (in my opinion) just because it leads my mind to think the assumption "why aren't they entitled to spend the money they earned the way they want to"
But instead of splitting hairs there, I'd be more curious to potentially partner with you in the effort to accurately determine whether the effects of the group we are specifically discussing are actually having a sizable impact in "harming" (preventing) the groups below them from being able to purchase a house
Make it possible to build more then the market should eventually correct, but the financial squeeze will continue until the market has plenty of supply as often referred to by economists as market clearance such that demand is saturated at all levels.
My wife is the chatty sort, so she'd ask them about how they could afford it and they'd always be leveraged up to the eyeballs. The cheap credit hog has been a complete disaster, and when the rates inevitably rise to where they should be we're going to see a lot of idiots with a lot of unbacked debt defaulting on everything.
This kind of market-based intuition doesn't always work in a constrained market like housing, where what kind of housing you're allowed to build, how much of it, or whether you can build housing at all, is all heavily determined by local regulation.
The time it takes for prices to reflect reality can take far far longer, in some cases, than anyone is comfortable accepting. There is no fundamental law that says things need to happen at the speed of convenience.
Certainly over the course of human history some sociopolitical or economic arcs took multiple human lifetimes to play themselves out.
Landlords couldn’t care less about affordability, so “the market” is very happy to make money by pushing people into survival mode.
(Affordability in housing is often measured as being up to 30% of income, whereas people can survive by sacrificing everything else — including heat, and food — spending up to 80% of their income on housing. That gap is where the increases and profit of the last decade have been coming from.)
In the US, this isn't true. It's not uncommon for property to rent for higher than the cost of mortgage, taxes and insurance. That is, be profitable from day one (assuming 20% down).
People complain about being able to afford a mortgage but not being given one. Or not being approved for a monthly payment of Y and instead paying Y+X a month in rent.
In China, the situation you described exists. Have no idea about in Europe.
There's a considerable difference between the loan payment with a big down payment and good credit versus bad credit and a low down payment. That difference can essentially turn an unaffordable home purchase into an "affordable" monthly rent.
On a 300k house, the difference between 5% and 20% down results in around a 400 dollar difference per month in a mortgage payment. That can be a pretty big difference maker for a lot of families.
5% down on a house like that is also 15k. That's a significant amount of money to save for a lot of families.
There are other relevant factors here as well, but this is certainly a significant one.
This might sound like a complex or intricate statement, but it is deceptively simple.
If you graph housing price over time, is the graph increasing or decreasing? If it is increasing then housing is a good investment and therefore becoming less affordable, if it's decreasing then housing is not a good investment because it is becoming cheaper and therefore more affordable.
It is supply and demand. As long as supply is restricted homes will increase in value, and if homes increase in value, that's a pretty good indicator supply is not increasing.
This is in aggregate, of course.
Homeowners want their homes to appreciate in value, and many, particularly old people, are using homes as their main vehicles of investment, so of course any policy to increase supply is bad for them. This creates an incredibly powerful political force.
How do you fight that political force?
Some cities obviously have no room to expand so the only option is higher density. Where that is not the case, build single family homes en mass until anyone can afford one. I’m a home owner now but would rather see people be able to afford what they want than to see my own 2x4s appreciate.
When I was in school most of my friends lived in the inner suburbs and had good access to public transport so they could all meet up in the city and do things, while I was further out in an arguably richer area but without public transport so I was stuck inside missing out.
If old homes were somehow better and more desirable, they could theoretically be both. But homes aren't like comic books or magic cards: newer-built ones are generally better in quality, often dramatically so.
Being a good investment is a different question and really comes down to your alternatives. You need to sleep somewhere, and renting includes many overheads. Depending on how you value your time and what skills you have managing your own home can be worthwhile or a waste. A carpenter may use their downtime between jobs to improve and flip their houses while a doctor is wasting time calling people for even the most modest repairs.
Mathematically this isn’t true, as housing (even owner-occupied housing) pays a dividend [0]. So a house whose price tracks inflation (0% real price return) that pays a 4% dividend in net operating income still has a respectable 4% real return. Juice that return way up with a fixed-rate mortgage and you still have a great investment without home prices racing past affordability for normal people.
But that’s just the theoretical perspective. I don’t know if housing can be a good investment and affordable in practice.
[0] https://earlyretirementnow.com/2017/11/15/that-house-over-th...
Your house might pay a dividend, but it has immense maintenance cost.
If the dividend from your house, on average, is enough to pay this cost, we’re in this hellscape.
No matter your view on home ownership, there’s a lot to be said of the ability to stabilize your budget’s largest line item via fixed rate mortgages.
This helps but is just a band aid.
We need to step back from the notion that houses should be significant stores of wealth and concentrate fully on creating enough housing so that everyone can comfortably afford a roof over their head. Using the scarcity of housing to build wealth is just short-sighted and will always lead housing shortages because the housing value above construction cost is only maintained by way of scarcity. If there’s enough housing for everybody, which should be our goal, home values will go down and the importance of owning a house goes away.
Two is investment. Land prices in popular areas started rising because of demand. Housing turned into way to make money and build wealth. But it is really land speculation.
As it happens, While about a third of Americans rent, only about a fifth of Spaniards do: 78% of households live in an apartment they own. That's because regulation is set up in ways that make renting a pretty bad deal. I live in some midwestern suburb, and half of my street rents, as companies have outbid individual sellers when the people that originally bought their houses died or downsized. They are owned by Delaware companies, and good luck figuring out who is really behind them.
So while it might be a good idea to minimize renters, the tie between rentals and apartments in urban living is just regulatory. Suburbs are in no way immune to being purchased by investors: It's just that investors try to aim for properties that are expected to grow up in value the fastest, and it just happens that those tend to be in urban centers and in suburbs that are very close to said centers.
So really, limiting building dense housing is, if anything, going to make the problem worse, as it limits housing supply. If you want to prevent renting, make it a worse deal, tax wise, for companies to own and manage rental property. Again, the very dense Spanish cities do a better job at this than the US does.
It’s almost like gravity, it keeps centralising.
With remote work, lots of people who don’t care about particular city will move to smaller ones. But if increased density increases supply, I bet lots of people will move to desirable cities. People who want the big city or want the jobs, but couldn’t afford it before.
There is a massive influx in many burbs of "luxury apartments" with rents $2500+ and I'm not talking downtown NYC. That's more than most mortgages.
How often are they new and how often are they "newly renovated"?
As I got a downvote I'm going to edit this and say I used to pay a little over $800/month for a particular apartment. About 7 years later I looked back at the complex. It had been completely remodeled and the cheapest unit was over $1600/month. How often is this happening?
But I'm talking about new developments. If you ever go to city council meetings where development proposals for new high density housing developments are discussed, you'll see a small slice of the incredible hassle they currently go through. Everyone wants to have a say in what others do with their land, numerous rounds of revisions are frequently required, and that means it's incredibly expensive to shepherd one of these things through. Fundamentally, those units cannot be cheap if that's what it takes to build them.
If housing stock expanded a lot, landlords would lose the pricing power that YieldStar is taking advantage of. The lack of surplus housing in desirable areas is the root problem, and the difficulty of getting new high density housing projects approved and developed in those areas is at the core of that. The vacancy rate of rental housing nationwide has been dropping for years, and that includes a lot of places where people aren't clamoring to live.
I'll also note that a falling occupancy rate is not mutually exclusive with the alleged practice of property managers warehousing inventory to prop up pricing. I also wonder how much the common practice of offering "new renter specials", rather than simply lowering rents to meet demand, contributes to ever-increasing "market rates."
1:https://web.archive.org/web/20220127071929/https://www.entra...
Do you have a source for property managers warehousing housing inventory? It doesn't ring true, at all.
I wonder what your interest is in handwaving these issues which are well-known and being acted on. You seem knowledgable except where it would tend to hurt your argument that everything is as it should be.
What say you on rent specials?
When you say 80%, what are you using to find those/take that survey? I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. This is also why you should never trust stats sourced from those sites, they don’t have a representative view of the market (a lot of news stories cite them uncritically when talking about rent trends).
Warehousing, care to cite something so I can read about it?
Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. What are you wondering about it?
I'm just going to say that I don't think you're being completely honest, and leave it at that.
>I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings.
We are talking about professionally-managed properties, so this isn't a problem. I don't think basement apartments, ADUs, etc. are representative of most people's experience with renting 1-3 bedroom apartments, particularly in my area, and I would be very surprised to find that they had a significant effect on the rate set for units in the large buildings and complexes where most renters live.
>Warehousing, care to cite something so I can read about it?
I will not. It has been written about extensively. It is suspicious that you would want to avoid an "inaccurate understanding", but have yet to look it up yourself. I would expect someone truly and dispassionately interested to have heard of it prior to this conversation, as it is evidently a significant issue wrt the nature of the contemporary rental market. A simple search will return many articles about it.
>Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount.
So, for example, a unit is rented for effectively $1300/m, discounted off a $1500/m base rent. The next year, there is no discount, and the unit renews at 5%-10% over the base, not discounted rent - potentially a $300 difference monthly. You don't think that this potentially distorts prices in the market?
If there's a need to not only put capacity on the market but fill it, the market will drive rent prices down because it is better to get something for your vacant unit than pay double the property taxes. If that doesn't work and there's still tons of vacant housing stock that is being held off the market to drive up rent, you can always keep raising the vacant housing tax until it works.
Price-fixing that is not done via consolidation is ultimately unstable from game theory point of view.
There's very strong incentive to defect from "optimal vacancy rate" and eat outsized profit compared to the rest of competition. Making building easier makes consolidation harder, as outsiders are now potential defectors as well. AFAIK we're not in monopoly situation (yet?) for rental properties.
Most of YieldStar value proposition on the other hand is ultimately just a price discovery mechanism. Prices raise because people *are willing* to pay that much for apartment. People are willing to pay that much, because supply doesn't keep with demand.
Rich landlords will keep overcharging for rent as long as they are able. And more buildings just gives them more opportunities to exploit more renters. That is unless the renters strike or the government enforces rent control.
Please, don't agitate for more rent control, it's such a bad idea.
This becomes even more true as the business has a larger portfolio and more assets to devalue. It is in the common interest of all landlords to keep the rent high, so if they are able to sink the cost of keeping an apartment vacant, they will do it if it means that that cost will be realized as profit in their non-vacant units.
Tell me, why do you think rent control is a bad idea? For me it seems only bad if you are a landlord.
New apartments (like new cars) are always priced higher than older buildings, but give it a few years and prices drop.
I'm suggesting we should be more active in calling for condos and townhomes instead of apartments.
In America, we have policies that subsidize owning over renting, like the mortgage interest tax deduction. I don't think we need more policies to make renting more expensive.
The status quo is of ever increasing unaffordability, means ever increasing displacement and gentrification. There's a cost for waiting for a perfect solution. Adding more housing now reduces rents for all compared to not doing anything, so even if it's not the perfect solution, we must start enacting parts that help.
Refusing to take any action is in itself an endorsement of the bad outcomes that are happening right now.
I know people can rent single-family homes, but I am also against institutional home-ownership. My point is that living-quarters ownership should be more universal.
>Nobody's trying to "take away homeownership"
When houses come down and apartments go up, they are. When companies holding hundreds of millions of dollars of capital buy houses during a recession and say "millennials don't want to own homes anyway, we're doing them a favor", yes, they are.
I know of no one in my life, acquaintance or otherwise, who has equity in a unit of housing in a building with a large number of units. And if someone does, that's typically called a condo, which at least in my 2 million person city is not common compared to houses or rental apartments.
Source: https://archive.is/eFvQJ , under the heading, "Condos of all kinds, everywhere"
However, recently I became interested in adding an “accessory dwelling unit” on my property to accommodate aging relatives. Despite having the space for a small 500-750 sqft unit on my property, my city’s zoning rules killed the idea. The rules had some interesting limitations like the ADU can’t be more forward than the front of the house, can’t be in a front yard, can’t be more than 40% of viewable property for front, has to be more than 20ft away etc.
Personally I’d be happy with more lax rules around ADU/mother-in-law units/etc. before everything becomes multiplexes.
I ask because it seems that where ever this happens, many people oppose merely allowing multiunit because they don't want to live in multiunit, even though it doesn't actually impact where they live. It's like lifting a ban on a certain type of car; it doesn't change your car, and there are still many types of vehicles on the market.
Unfortunately people don’t like to admit the downsides of dense multi-family housing either: no parking, increases traffic/congestion, reduction in greenery, looking straight into neighbors windows, etc.
I’d personally like to see smarter zoning with mixed usage in a nice balance where all kinds of types of residences can coexist but I believe it requires proper administration. Otherwise the economic incentive for builders will result in the dominance of multi-family housing.
Ending single family zoning is also required to allow corner stores, not just allow apartments.
The funny thing is that there are “missing middle” apartments in my neighborhood and similar ones. The duplexes and up were just banned for decades.
Also, there is a wide range of multi-family housing from giant towers, mid-height apartments, and N-plexs. Most proposals are to mix “missing middle” housing in with single family. A lot of older neighborhoods already have some. A few triplexes are not going to cause problems. Around here, they are allowing 6-story apartments along major roads. They work well because there is good public transit.
Start by asking if these things you’re mentioning are literally banned. If so start there.
No, that's not the reason at all. It's concerns over traffic, impact on already-packed schools, and overall crowding.
Or I guess we can just cry racism and greed and that’s that.
I've been fighting this for years, and it's always the same, there is no way to address all the concerns because the list of concerns is bottomless.
You see it in this thread, we started with concerns about someone sharing a wall and here we are...
Pointing out that schools are emptying in an area due to lack of children with an agong population, and that same person that one second ago was burning with concern for school crowding now has an entirety different concern completely unrelated, and has switched gears without even acknowledging that their concern was addressed.
I don't believe a single person that says these are their actual concerns, unless they continue to show interest in their concern after their objection has been addressed.
These sorts of "concerns" are just stalling tactics, ways to avoid talking about their actual interest: stopping the housing at all costs.
I am a pretty responsible dude but nothing has made me as invested in my community, surroundings, etc as owning a home. I always loved the US but once we bought the house I really understood it on the next level.
Apartments are great for single people and retirees. Families should have a house with a back yard and a drive way. It's our dream.
May I ask why?
My cousins growing up lived near the core of a small city and visiting them was like a breath of fresh air. So many fun activities nearby, things you could walk to, way more people to meet.
Where I grew up I was basically stuck on just my street unless I could convince my parents to drive me somewhere, and even when I had that there was nowhere interesting to go.
I guess when I was like <10 years old it didn’t really matter, but the older I got the worse it was. I’d never move back to a suburb personally, and I certainly wouldn’t raise kids there.
And even if they could in most bedroom towns, there's nothing to do.
For me, I'd live in the country or the city never the suburbs.
I had to beg my parents to take me anywhere. My kids just leave the house and find friends or say hi to neighbors. No effort on our part and they get to be free.
Most renters want to own because owning is cheaper. Renters live in houses too... It's not like home renters are less likely to want to own.
I know a family who rents a lovely house in a super nice neighborhood... They still want to own.
There is a reason the rents on nice urban apartments in good areas would easily cover the mortgage in an average suburb, yet are still in high demand.
What a problem to have. Wow.
Example: 2 years ago we bought a house on Long Island, near NYC. If we were willing to live 30 minutes further east, the same house would cost half. If we were willing to live in a few nice part of Cleveland, the same house would go down by half again. And if we wanted to live right outside of Cleveland, it'd drop by half again.
Point being that things can get VERY affordable if you are willing to be creative and flexible with location. Which is easier now than ever with WFH. I also think boomers will start moving out soon and there'll be plenty inventory. Housing will be fine.
The problem now is that we don’t give people the choice when only single family homes are allowed. Some people like apartments. Some people prefer location and would take whatever gets them there. Some people just need the cheapest housing.
And with respect, as another commenter stated, that's your dream. There's a lot of options in between that just don't exist right now in most of the country.
There are a lot of households without children and not that many apartments—-especially higher end ones in nice places.
Allow some more of those to built so single people, retirees, and so-inclined others can move into them and that will free up houses with yards and white picket fences for families that want them.
My empty nester parents have no apartment options if they want to stay in the same community where they’ve lived for decades.
Want to go to a park? Well that's a 10 minute drive.
How about friends? Better hope I like my 3 neighbors (I didn't). Another 15 minute drive
My family and I live in a large apartment. My son has friends he can walk to see, a park he can walk to and we can relax in, and even a store where he can get treats with his allowance. I'm not his driver and he's more locked into the community than I ever was. All I knew in my community was who had a feud with who over a tree crossing into their yard.
- unsupervised play
- mixed age un-chaperoned interaction
- have my children be raised by a village
I find most people's American suburban life is sort of an isolated existence. People have 3 or 4 people they know on the block. For us, there were numerous homes we could stop by as kids, and we were susceptible to policing from all adults in the vicinity. It was a real community experience - not isolated encounters here and there.