A reason for high housing prices: restrictive land-use regulations
strongtowns.org
strongtowns.org
Presumably from people trying to escape regulation and high material costs.
So, what would housing prices be if Atlanta did have restrictions? The research says higher. But, it's hard to show that with any rigor since what would you compare Atlanta with? Every city is different and it's a challenge to get a good comparison.
Going after regulations is a red herring: the real problem is the investor class snapping up the housing supply.
I bought a townhome last year at the height of the market in a great and competitive neighborhood, paid a very reasonable price and faced zero counter offers. Why? My HOA agreement has provisions that prevent the owner from using the property as a short-term rental. Contrast that to single family homes that were going hundreds above asking price and with cash offers. As soon as you remove the incentive to purchase a home purely as an investment, the experience improves dramatically for buyers looking for a place to live.
This is a misconception: https://kinder.rice.edu/urbanedge/forget-what-youve-heard-ho...
I don’t understand why this narrative keeps popping up. Institutions own a very small percentage of homes in the US. They much prefer to own apartments, which is the most effective way of increasing the available shelter.
I understand that it’s convenient to blame the wealthy… but don’t you think homes are expensive because of 0% interest rates over the last decade?!
For example, there are 10x as many active AirBnb rentals in Sevierville, TN (a popular mountain tourism spot) as there are homes on the market. The overall percentage of home ownership by investors might be small, but they represent a large percentage of real estate transactions taking place today.
Buying a house today largely means being able to outbid people with millions of dollars in cash and real estate at their disposal, you will see this firsthand if you ever try to buy a home in a competitive area.
In my experience this is certainly true with any large land plot, which can easily be subdivided into smaller plots with houses.
Also I don’t really understand your point…a small TN mountain town who thrives off tourism is SO far away from the shelter needs of 99.99% of Americans.
Investors impact the market to some extent…but the insane monetary policy of 0% rates and 5 rounds of QE is EASILY the biggest factor. It’s not even close.
EDIT: lol at your last comment. I bought a brand new house in midtown Atlanta 2021.
While there may not be 'traditional' zoning, there seem to be a bunch of regulations:
> There are a number of reasons this line of questioning is a mistake, but the most fundamental one is that people misunderstand what “no zoning” means in the Houston context. If land use in Houston were genuinely unregulated, then this Nancy Sarnoff article[1] about possible revisions to Houston land use rules would make no sense. In fact, the city features extensive regulation of minimum lot size and maximum parking requirements just like every other major American city.
* https://slate.com/business/2011/11/the-myth-of-zoning-free-h...
> What are the real-life impacts? When the rental property developers press in, people can petition for their areas to be classified as historic. In effect, people are using [historic] district-making in place of zoning to push back against change.
* https://www.deeds.com/articles/houston-the-zoning-free-city-...
> This buffering ordinance is the latest edition in the city’s history of enacting land-use regulations without using the word “zoning.” Urban planners and scholars have long debated whether Houston has zoning codes that are clad in terms like “buffering.” The reality is that Houston has created a host of regulations that govern what can be built where.
* https://therealdeal.com/texas/2023/03/16/dont-say-the-z-word...
If housing prices are going up and higher density housing isn't going up then you have regulation blocking it.
After all if people are willing to pay a $2,000 mortgage for a home you can put 4 apartments in that space and trivially get $1,000 rent for each.
Note that doesn't scale down much and so lower cost of living places not going high density makes sense.
In either case a normal sized house in Southern California isn't worth over a million dollars because of material costs and only indirectly due to regulation. The core reason is always demand outstrips supply.
OP is saying "you can't have a balance if you restrict the supply".
If I was a big developer in cahoots with a local government, wouldn't I seek to influence zoning laws to impede my competitors and harm consumers by inflating prices?
This feels like another one of those things that looks inherently bad until you realize with governance and a culture of anti corruption, it might actually work great.
RE agents have 0 power over you when Zillow and Redfin have 99% of the same data that the agents have.
Like it or not, agents serve an important role in real estate transactions by helping guide homebuyers through an incredibly complicated process. And it’s totally possible to be your own buying agent and save money if you’re willing to put in the work.
“You should offer 20% above asking” is the agent giving you advice on how to win the deal, and a good agent will know when offer above or when to come in slightly under and see how open the seller is to negotiating. The agent doesn’t get paid until you buy the property, so they’re motivated to put you in the best position to buy.
This is rarely true. The seller has negotiated and agreed to a commission with their agent, and that is getting paid regardless of whether the buyer is represented or not. Perhaps you can negotiate a purchase price low enough that the seller's agent fee is the seller's problem, but only in a buyer's market (which currently does not exist in any major market I'm aware of). The only time it makes sense to not use an agent is if you're confident you can market and close a transaction yourself selling your own property.
It's really unfortunate that there is a 3-6% drag on real estate transactions from agent and brokerage commissions, but various attempts to disrupt this model and drive down the cost have not been successful.
> It’s really unfortunate that there is a 3-6% drag on real estate transactions
That’s because dealing with real estate is very difficult and tedious, as we’ve seen companies try and fail to disrupt this system.
We've found that agents are most useful when we're driving them towards the outcome that _we_ want. That means two things:
* When possible, do our own market research. Form an opinion then compare that to the agent's opinion.
* Ask questions like "what do you typically see", "how have other people handled X", etc, etc. Instead of having your agent simply tell you what to do, leverage their knowledge to inform your opinion.
-----
With that being said, I've interacted seem to think they can magically make a house worth more than the market values it.
Agents have no duty to be honest, do non anecdotal research. they have every incentive to get a client and close a deal (at the highest price that will close)
They are not finical advisors or investment experts. They simply find a price that will close a deal, and ensure that it closes swiftly. If you want that, perfect.
A good agent will tell you what bid would likely win.
If they can find someone paying more for a nicer house and someone paying less for a worse house you are likely going to be in the clear.
Technically they are supposed to adjust to get your home value from comparables but the magic "market adjustment" means that they can basically always do that.
If you look the regions with the highest prices often have geographical and political barriers to build more supply. NYC, LA, SF, MI and Seattle.
Not Dallas, Austin, Chicago etc.
There’s other reasons for demand side being the cause but immigration has got to be pretty far down on that list.
Also, not all immigration is from destabilised homelands. For instance, the people taking up H1B visas or similar.
There was a recent case of a fire in a T2 apartment. 12 immigrant were living in that single apartment. Similar situations are being reported in every city in this small country.
This means you can rent apartment you have, and there’s always immigrants looking for it, that can share/subrent with an absurd amount of people, each get their check and so your apartment rent is fully paid paid by social security.
More factors, deportations almost don’t happen, government is facilitating immigration.
This all adds up when you notice that the government figureheads were all previously mayors, and traditionally corruption at the mayor level was paid with real estate. So they are just using social security funds to charge absurd rents, and keep pressure on raising price.
Guess what happens when rent is high? House prices are also high.
But don’t worry, government is helping everyone with their payments by sending checks to everyone paying rent or house loan.
That was a "blame the corrupt government" post. It clearly want rents to rise. Uncontrolled immigration is just one of many "tools" it uses.
"Helping the families" policies that they have implemented only made tiktok full of videos "Move to X and receive Y$, here's how"
And I say this as someone with a large house that's nearly doubled in value since I bought it with only 5 or 6 years left on their mortgage. Personally high house prices benefit me.
If you look at Canada (especially southern Ontario) you'll see a large correlation between incoming international students rates and property prices (first in Toronto, then across the region). See especially the trends in 2015.
Canada's population rose by one million people in 2022:
* https://www.cbc.ca/news/canada/canada-record-population-grow...
We did not build one million housing units (even taking into account things like families of four, students having room mates, and various other forms of 'household').
That's a pretty small percentage of total immigration surely? All things considered it's reasonable to assume too-high an immigration rate will put upwards pressure on housing prices. If that means we need temporary restrictions on where recent immigrants are allowed to purchase homes I don't see an issue - I certainly don't believe it would be fair for me to move to the US and immediately be able to buy a house wherever I like, helping price out those who have their whole lives rooted there already.
I've heard this touted as the reason for a housing shortage for as long as I can remember.
However, by the time an area has become popular, restricting development will only hurt rent affordability. I guess some would like to prevent their neighborhoods from becoming popular in the first place though.
A community can improve on average while some people see less of that benefit.
*(That is, however far you're convinced that there even is a market; for rent, thanks to "discounts" that allow property owners to avoid actually advertising lower rates, supply and demand don't exist, only the imperative to raise rates annually.)
The problem is not that there isn't enough housing in any one particular area. There are a lot of issues with the argument that everyone everywhere just needs to build as much as possible, no matter what, and it's disingenuous to any such argument as NIMBYism.
The problem is that there aren't enough nice places that are actually comfortable to live: good access to transit, access to green spaces, not too much traffic, access to shopping and grocery stores, etc. This is broadly because of how American cities and towns are designed.
Only per unit not per square meter.
Funny how that works.
For example, "Why do the powers that be continue to restrict land use? Don't they know that it drives up housing prices?"
Instead: "Because high and stable housing prices are desirable for society as a whole, restrictions on land use are put in place in order to carefully limit the amount of supply in the system. The people, voters and institutions doing this are not stupid or malicious, but know exactly what they are doing, and do it quite well."
The Impact of Zoning on Housing Affordability: https://www.nber.org/system/files/working_papers/w8835/w8835...
Here is (IME) one of the more common blind spots when discussing housing prices (specifically rents): price fixing by corporate-run algorithmic cartels: https://www.propublica.org/article/yieldstar-rent-increase-r...
The more you tax, say, cars, the fewer youll get and vice versa.
The more land is taxed, the more becomes available and vice versa.
Land isnt taxed and the main proxy for land tax (property taxes) are at historic lows.
> One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing.
The article also has multiple anecdotes that run counter to your own. Just because you saw rents drop in response to demand decline doesn't mean this is what happens in practice most of the time.
> For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.
> Hutchinson, who is an analyst for the police department, wondered if a computer algorithm was behind building staff’s inflexibility. “It was pretty obvious they should have been dropping prices,” she said. “They were digging their heels in.”
Please remember: this isn't some economics game like the price of cars or eggs. Housing is something you need TO LIVE and for which there is NO SUBSTITUTE. Increasing supply will only go so far, as long as your society allows it to be controlled by entities that see is it as a profit maximization game, you will see horrific outcomes.
That is all that matters. Get vacancy rates above 10% and maybe then we’ll talk about dynamic pricing boogiemen.
Is it fair to call the US a capitalist country? Honestly, I don't think so. It's a weird disastrous mishmash of socialism, capitalism, and English bureaucracy. It's just "more capitalist" than other countries who at least have the intellectual honesty to more fully commit to a system.
We have some very limited vestiges of social democracy, but social democracy is not socialism. Socialists and social democrats were not allies. Google the meme: “SocDems killed Rosa.”
What you’re observing is what unregulated capitalism will always devolve into. It goes by many names: capitalism, crony capitalism, neoliberalism, corporatism, oligarchy, fascism. But the idea is the same. Labor is violently oppressed. The State only serves the interests of capitalists. The State and Capital are often indistinguishable. There is no competition. There are structural barriers that stifle small businesses and enrich rent seeking trusts. It’s a new Gilded Age, brought to life by a new Lochner era for the Supreme Court.
I have good news and bad news: this system, whatever you call it, is extremely unstable. Its collapse is inevitable, well within the span of a single human lifetime.
Except for the half of the entire federal budget that is spent strictly on wealth redistribution to enhance equity between the rich and the poor - Social Security, Medicare, Medicaid. Seriously, these three programs are fully half of all federal spending.
Not to mention all the state wealth redistribution programs, that cover housing (section 8), food (food stamps), education (public school system for k-12, pell grants above), utilities (utility vouchers), healthcare (ACA), telecom ("obamaphones", broadband vouchers), and more.
I've seen estimates that in the most progressive states, welfare benefits can amount to as much as $42,000 a year for a small family.
You can argue that on a PPP & CoL basis, that isn't much money in e.g. Bay Area (where that is well below poverty level), but that's also a global top 10% income.
To say there is "nothing" socialist about the US is disingenuous, politicized, and pedantic at best. There is substantial social wealth redistribution and there exist substantial worker protections in the USA. You can find plenty of countries with a FAR less socialist nature. In fairness, it is likewise hyperbolic to describe the USA as a communist or even "fully" socialist country.
We also spend about a sixth on interest payments.
Everything else the entire federal government does combined is only about one sixth the federal budget.
The UK NHS is a socialized healthcare system. The profit motive is not allowed to corrupt any part of the system. Pharmaceutical prices are strictly controlled (none of this $26k/year Alzheimer's drug nonsense). It is fully nationalized. Nationalizing an entire industry in peacetime is often (but not always) associated with socialism.
Even Canada's single payer system is not socialist in any sense of the word. It's just a government-run insurance plan. There are many multi-payer insurance systems in the world that perform far better than ours. Single-payer is not a panacea without price controls. Price controls are somewhat socialist. Funnily enough, the last US president to enact price controls was Richard Nixon, known friend of Marxists across the globe /s.
There's nothing socialist whatsoever about Social Security. It does not redistribute wealth. The tax is infamously capped at the first ~$130k of income you make per year. Any income above the cap is untaxed by Social Security. Your benefits are proportional to what you paid into it. Social Security is definitely not "wealth distribution." It is an income tax. It's income distribution if anything, but that's still pretty ghoulish framing for a stipend for retired folks that barely keeps them out of poverty.
> I've seen estimates that in the most progressive states, welfare benefits can amount to as much as $42,000 a year for a small family.
No citations, just some half-remembered statistic from a right-wing propaganda outlet that conveniently adds up to the weed number. Very believable. Very representative of the average person's lived experiences. I cannot overstate how pathetic you have to be, in order to be resentful about welfare benefits while making a tech worker's salary.
Is redistributive wealth policy count as democratic socialist policy or not?
>There's nothing socialist whatsoever about Social Security.... Your benefits are proportional to what you paid into it.
This simply isn't true. SS payments are not at all proportional to what you put in, with higher earners subsidizing lower. compare payouts for SS on 13k income and 130k income. What you pay in goes up by 10X and what you get back goes up by 3.5X you can play with a calculator if you want [1].
Tax on 13K income, SS benefit at retirement: $18,362/yr
Tax on 25K income, SS benefit at retirement: $24,627/yr
Tax on 50K income, SS benefit at retirement: $37,678/yr
Tax on 100k income, SS benefit at retirement: $56,505/yr
Tax on 130k income, SS benefit at retirement: $63,846/yr
https://smartasset.com/retirement/social-security-calculator...
You don't remedy shortcomings and failures of authority by abolishing it. Doing so only multiplies the problem.
For talking about boneheaded and unsophisticated ideas, this post is severely lacking in nuance. No one is suggesting anarchy, and removing a generally malfunctioning authority can be quite productive.
What we have is best described as a mixed economy (like China's, just with a different mix of market and state that leans more towards market than China does), with an unhealthy dose of corporate regulatory capture.
Regardless of whether you're on team "big government" or team "free market", I'm pretty sure we're all quite dissatisfied with a big government that's largely captured and controlled via a revolving door between the powerful regulatory agencies and entrenched international corporations that have weaponized regulatory agencies as a business "moat" against competition.
Again, regardless of whether you're team "big government" or team "free market", it seems a vast majority of politically conscientious people ought to be opposed to such revolving doors, corporate capture, and money in politics in general.
It's deeply regrettable that even in a Democracy, positions of power have a tendency to attract people who are drawn to power, who seem to be some of those least inclined to wield it cautiously and responsibly.
I haven't exactly figured out a solution, but I wouldn't be opposed in a strictly conceptual sense (e.g. not agreeing to a specific implementation without considerable discussion / peer review) to restricting voting to
1. People with a stake in the future stability and strength of the whole system (land owners? people who've had children? not sure what the right mechanism here is, but the litmus test is a provably vested interest in the success of the whole system on a long time horizon)
and/or
2. People who are civically engaged enough to even be familiar with the process of government (civics test? I know in the past these have been abused to facilitate discrimination - I just have a hard time believing that our species is incapable of devising a knowledge-based litmus test that isn't being deliberately used to facilitate discrimination).
and/or
3. More mature people: Raising the age of majority in general from 18 to [21-25], including voting age. We know the prefrontal cortex plays an important role in making good, responsible decisions by weighing long term consequences, and it's not done developing until mid-late 20s. That said, it would be a politicized act to change voting age but not lawful firearm ownership age based on this concept, or vice versa. The politically neutral and principal-based solution here is to just raise the age of majority across the board to more accurately reflect our improved understanding of the nature of human brain development.
Why would making subsets of the population work and rent but not allow them a voice improve anything?
Everything you suggested would result in the current problems getting worse. Land owners don't mind the raising housing prices as long as the taxes don't impact them. Older people got theirs and are fine with policies that lead to younger generations getting screwed.
The first litmus test needs to be in determining whether one has a vested interest in the long-term stability of the whole system.
The second litmus test is more about capability to participate in the system as intended by determining whether one even understands the system (and hence their role and responsibilities in it). I like another commenter suggesting US native-born citizens should be able to pass the same immigration test that immigrants are required to pass in order to naturalize and gain the right to vote.
What I'm not for is making sweeping changes that aren't peer-reviewed, discussed, and widely agreed upon, precisely for the reasons you outlined - the intent is not to benefit any one segment of society at the expense of another. We all have blind spots and the ability to call out eachother's blind spots (as you've done for mine) is kinda the selling point of peer review :)
Hell I would love to hear an example of such a restriction that wasn't beneficial to a particular part of society.
This isn't a "need better rules" thing it is a "access to voting is not our problem" thing.
I believe age 18 came about because of the Vietnam War draft. Old enough to die; old enough to vote & drink. Something to consider.
The tax system is a problem also. There's an agency issue; it all about getting someone else to pay more taxes. Don't want to open that can of worms now.
Landownership, by proxy, also used to mean "white male". I'm 100% opposed to race-based and sex-based litmus tests like that, but I:
A. Remain unconvinced that, conceptually, the landownership aspect by itself (in a vacuum, devoid of the race and sex overtones), was a bad thing - land owners have a vested interest in the health of the political system that influences the value of their land in a way that renters simply do not. This isn't a diss against renters (I am one), and the reasons so many people are relegated to renting are a long list of problems of their own.
B. Firmly believe we can design such vested-interest litmus tests that do not facilitate discrimination of any protected classes.
I also firmly believe 18 year olds shouldn't be dying in pointless imperial crusades, regardless of whether they're in Vietnam, Iraq, Afghanistan, or Ukraine. Most 18 year olds of today (at least in the US) are very much so still kids in many ways. No more dead kids.
Your consideration suggestion is noted but slices both ways. Not old enough to drink or own a handgun? Not old enough to drive or die in pointless wars.
Well somewhere along the line we changed our minds on the drinking age, which is 21 in all 50 states
Sellers, agents, and banks all want you to pay as much as possible. Want a loan? "What is your monthly income? We'll figure out how much you qualify for." You might be able to resist these forces, but most people can't, and they set the market rates.
330M people in the USA, let’s say NYC’s public transit/urban environment serves 4M of its people.
20 NYC like cities means 76M more people’s desire to live in a NYC like environment can be satisfied.
Surely once you start getting into the tens of millions range, the supply gets closer to meeting demand, if not exceeding it, and prices drop. There are only so many people, after all.
A 10 lane highway can easily be saturated by tens of thousands of people in a small window of time. A 100k lane highway would be a better comparison.
NYC doesn't have uniform extreme density, with places in Queens and Staten Island having large swaths of single family homes. The popularity of NYC should mean the city is getting even more dense, but the restrictive zoning means units are being added at a much lower rate than demand. Of course prices are going to rise.
This thread does not disappoint.
Someone mentioned supply and demand and was summarily put down. And yet, that's at the top of the list in every city in the world.
Here, let's explore...picking at random:
https://www.zillow.com/homes/for_sale/La-Crescenta.dash.Mont...
16 results
https://www.zillow.com/homedetails/2713-Starfall-Dr-La-Cresc...
Built in 1972, 4 bedrooms, 3 bathrooms, 2,201 square feet.
$1,675,000
Let's move north a bit.
https://www.zillow.com/homes/Palmdale,-CA_rb/
500 results
https://www.zillow.com/homedetails/38903-Barrington-St-Palmd...?
Built in 1991, 4 bedrooms, 3 bathrooms, 2,202 square feet.
$580,000
Move north a bit more...
https://www.zillow.com/homes/california-city,-ca_rb/
500 results
https://www.zillow.com/homedetails/10600-Peach-Ave-Californi...
Built in 2022, 4 bedrooms, 3 bathrooms, 2,137 square feet.
$379,000
Of course, some of the price reflects quality of build, finish and materials. However, at a baseline, these homes are comparable.
Why does the first cost nearly three times the cost of the second and 4.4x that of the third?
When all the smoke and bullshit clears out, the answer is brutally simple:
- People are not willing to pay the same price
for a similar house in different locations
- Less homes are available where people want to live
- People bid-up prices in an effort to buy homes
where they want to live
Why?
You can't double or triple the number of homes in the first neighborhood presented. It is physically and logistically impossible. The area cannot support such a move.
Someone might say: Sure you can! Buy all the homes and build apartment buildings.
Sure, in fantasy land anything is possible. Just the lawsuits from neighboring communities due to the destruction of property values, increased traffic, etc. will take 50 years to resolve. If we leave fantasy-land, this is simply impossible. The power, water an sewer system in that neighborhood might not be able to support expansion.
The point is, there's a difference between fantasy and reality.
The more expensive homes don't necessarily cost more due to higher construction costs. Although, yes, it does cost more to build in some of these neighborhoods because there is a minimum expectation of quality of materials, fit and finish.
For example, in that neighborhood, most homes have smooth flat walls without texture applied. This might not make sense to non-US reader, sorry. Spray texture is used on drywall to hide and mask imperfections. This allows for more relaxed finish requirements, massively reducing labor and all other costs. A smooth wall without texture is what's called a "Level 5" wall and sometimes referred to as "Gallery Finish"...because of how expensive it can be.
And still, at the core, it's supply and demand. It's what people are willing to pay to live somewhere. If more people want to live somewhere, prices go up. As prices pass a certain threshold, build quality and architectural design move up several levels, contributing to higher prices as well.
This is where all the other factors start to come-in. The cost of materials, labor, fuel, freight/transportation, regulatory frameworks and fees also play a part. If you want to build a house today it will cost you a lot more (maybe double or more) than the same house built, say, ten years ago. That's just a fact of our economic reality. This is affected by everything, from minimum wage to the cost of oil.
Real estate isn't complicated. And, no, the housing shortage has little to do with evil planning on the part of the elites to keep the little guys from their turf. This is the same all over the world. Want to buy a house on the Herengracht in Amsterdam? Good luck. You are going to pay about $1MM per 100 square meters (~1000 square feet). Why? Because there are only so many homes. People want them. And they are willing to pay more.
Reality does matter.
Scaling cities is asymptotic. You get to a point beyond which it is --outside of fantasy land-- as close to impossible as you are going to get.
Brother, we can't even build a fucking high speed train in California and you are talking about ripping-up cities to increase density.
We can't generate enough power to support the electrification of transportation, and you are saying things like "it's not even hard".
Have you ever built anything? I have. Multiple times. Let me tell you, it isn't easy. It's hard, very hard. And it easily goes exponentially expensive. Case in point, the California High Speed train --again.
The other issue often ignored in fantasy-land is this virtual-reality mentality that you can click and mouse and rebuild entire cities and neighborhoods. Well, reality isn't a video game. Things don't work that way. The relative cost of any construction today has reached astronomical levels. There isn't enough revenue to take a city of non-trivial scale and, say, double the infrastructure. Like I said, things are asymptotic. I know that's hard to understand when looking at reality as if it were a video game fantasy. Well, it isn't. Sorry.
No, what you are thinking is firmly planted in fantasy land. You might not realize it now. Give it a few decades and more experience and you might understand.
Why do I say "more experience"? Because nobody --nobody-- who truly understands construction would say the things you are saying. Only those observing from the outside think this way.
Go try to build something in a city like Los Angeles and see how much fun it is. And by that I mean, something where you need new sewers, electricity, water, roads, schools.
In my town they built a new high school at a completely new location (vacant lot, unused land, etc.).
It took THIRTHY FIVE YEARS. And they still made a mess of it. And you think densifying a city is "not even hard"? Please.
I have more than enough experience to know it can be done. I’m living that experience every day. I’m sorry you’re so bad at building things that you think it’s not possible, but luckily we’re not all incompetent.
NYC 20MM today, 200MM after your fantasy
Los Angeles, 12MM to 120MM
Chicago, 9MM to 90MM
Etc.
Now, if you are talking about building where there’s nothing (3000 people per square mile is nothing), well, have at it. That’s not where housing availability is a problem.
Oh, yes, your attempt to use density to impress is hilarious. I did note you said “your neighborhood”. One or a few apartment buildings can easily cause a 10x density increase in a neighborhood, given that “neighborhood” can be just a few blocks.
If you actually want to make the point you are attempting to make, provide links to the many stories that would have been written about a non-trivial CITY increasing the population by a factor of ten within its own boundaries. Otherwise, I think you are trying to inflate two apartment buildings into something they are not.
This is about providing affordable housing for tens of millions of people. That cannot be done within the boundaries of major cities in the US. That problem is asymptotic.
I’m so glad I don’t work with anybody like you. What a fucking nightmare.
This is capitalism in its purest form.
Capitalism is the only reason developers create shelter in the first place…
Why aren’t you and GP out there building houses for a loss? None of the people complaining about capitalism ever actually practice their own ideals.
Anyone is free to start a non-profit org that builds homes and you can still cut yourself + employees a salary.
It is just that enlisting everything and everyone on the planet into a pure financial model that can be leveraged for rents and speculaion is what it is about.
Real estate is investment and no one ever wants their investments to devalue. And the only way to slow stop or even decrease housing is to devalue it by building beyond what’s needed. No investor will ever do that.
It is capitalism in its purest form. And no kind of free market will fix this issue.
Developers absolutely want to build and sell as many homes as possible.
Private enterprise is literally what created all the shelter in the first place. Who else is gonna build shelter? It definitely isn’t gonna be the government…
I also have two daughters who are young adults and still living at home because they can't afford rent. So even for that reason alone I REALLY don't want expensive housing prices.
You’re already profiting simply by having a higher net worth.
The benefit comes from gains being definitively accumulated by percentage. When your owned amount is higher, equal percent gain is greater absolute gain.
> Gains are locked into a property until sold or mortgaged.
This is essentially the equivalent of "Gains are locked into money until spent on goods or services." True. But gains are gains and worth is worth regardless of how many seconds or minutes it takes to spend. The only difference is immediate urgency of conversion within a very narrow time window (it does not take that long to get a mortgage on an owned property that is now worth X percent more than it was yesteryear).
Maybe "profit" was a poor choice of words. But this has turned into an utterly meaningless semantic argument that has nothing to do with the point I was trying to make.
No, they're saying the price of the house is irrelevant. If they bought both houses for $250k, say they're now worth $750k, they're a millionaire and got a million dollars of profit!
Their point is they need two houses for their family and will until they die. If they have two houses still worth $250k or two houses worth $750k it doesn't matter to their quality of life.
If having more money available to you through conversion doesn't have a direct and measurable impact on your quality of life, that's exclusively because of decisions you make about what to do with it. Assets don't follow you into the afterlife, so, bare minimum, when you get old you can sell it and rent or put a mortgage on it and have a much bigger pile of cash to spend until you die than the person with the less valuable house would.
Or, if you have children and are into such things, you can engage in massive generational wealth transfer and make it so they never have to work a day in their lives to cover rent. There are a lot of people out there who don't get to experience such a wondrous bounty that they didn't do anything to earn but which is an extremely relevant benefit with extremely measurable impacts on quality of life nonetheless.
The benefit is having that option.
There's something about money that brings out the worst in people, whether that be malice or simply stupidity.
However, home prices are, many times, also a reflection of the local economy and the earning and/or spending power of the locals (or tourists). And usually, higher earning/spending power is better than lower earning/spending power.
You just have to ensure you are in position to grab a portion of that economic activity, which is a better situation to be in than trying to grab a portion of no or little economic activity in a struggling region.
As an aside, my property has approximately doubled (in Zillow guesstimate and in assessed value) since we bought it in 2007. Our property taxes over that time went from around $8K to around $12K. An inflation calculator over that period would say that $8K in 2007 is worth $11.7K today, suggesting that property taxes track general inflation much more closely than they follow property values.
So, my property has doubled in nominal value, representing a 36% increase in real dollars, while my property taxes have gone up by only 3% in real terms.
Edit to add: inflation of course massively helps mortgage borrowers. If I bought my house for 100 units of currency, borrowing 80 and the currency change worth such that it now takes 147 units of currency to buy the house (just from inflation effects), then I still owe only the original 80 units of the now less valuable currency (minus principal repaid in the meantime). Inflation just paid off over 30% of my mortgage for me.
Correct, but that is because the current politics are all about shifting the burden to future generations, and one of those ways is vis drastic subsidies to land owners from non land owners via undeservedly low land value taxes.
Perhaps my claim of 1 to 1 relationship between property (land value) tax and land/house price is too strong, but at some point, it will have to go higher and catch up.
This is the reason that "you need housing so why would you want house prices to go up" -> some large fraction of homeowners are levered up to their eyeballs
"Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!"
There is a method actually though. Voters of the state can vote for state laws that affect all cities, and voters of the nation can vote for national law repesentives that affect all cities.
And it ultimately seems like politicians have more to fear from the immediate prospect of losing votes from NIMBY constituents than the potential gain of future votes years down the line from grateful new residents.
Specifically, when do they vote and on what do they vote? If you dig into this you eventually end up with the premise of the article.
In a past life I wanted to build dense housing. i.e. more units per square meter. I went to buy land, and at the same time started going through the bureaucratic process of getting things approved by the government so that I could start building.
I have the necessary know-how to build what I wanted with my own resources, I was willing to apply for all permits necessary. However, I got turned down flat by the government. The only thing I was allowed to build on this land was ONE house. The land could have fit 15+ houses or an apartment building with dozens of units, but no, the city zoning board had decreed that this land was zoned ONLY to single family housing. So the only thing that could be built on this site was one single family house. Guess who the members of the zoning board were that turned me down? Local homeowners, who did not want to see the character of their neighborhood change.
This is the root of the problem. The free market is not allowed to function, because of this process.
And the thing is: this same process exists in every metro area in the US. Zoning boards populated by local homeowners with no desire to change anything.
The economic incentives already exist for denser, more affordable, housing; but developers are not allowed to build anything other than what the land has been zoned for. The people in charge of that zoning have the opposite incentive, they want their beautiful, low-density, neighborhood to never change.