This seems more like the market's fault. If homes in a particular area are going for $2k/mo, then that's what they are going for. If this is the government's fault, are you proposing price controls?
But if we suddenly built a million “luxury” apartments in each major city, then they couldn’t all charge high prices because there would be a bit of competition for tenants. Prices on the “slightly less luxury but still nice” apartments would have to drop faster.
It's not supposed to saleable or rentable. But it does take up land that could be used for real housing. And it also drives up the perceived value - and price - of both rentals and outright buys.
Rent control may or may not be a solution. But many of these schemes are run through shady shell companies, and aggressive enforcement of financial reporting and taxation would go some way to fixing the problem.
That's what I'm asking: Exactly which laws? Nobody seems to be specific.
1. Land costs
2. Labor costs
3. Material costs
4. Zoning laws
5. Building codes
For example some zoning laws have a height restrictions, which limits my development to 3-story buildings, when I would actually want to build a 5-story building
For building codes, some would require me to put in $100 breakers, when I could do with simpler $20 breakers, etc. etc. for a LOT of items, which also feeds into the material costs.
If you want more specifics than that - open up your county/city website and start reading. It's not up to HN to do the legwork for you.
How would you realistically "suddenly" build a million apartments? Is there enough labor in the country to do that? Enough land in each major city? A million is a lot. Some ddging suggests San Francisco has about ~400K housing units, is adding a million realistic? Let alone suddenly?
> there would be a bit of competition for tenants
But no builder will build apartments that might have to be rented at a loss if the bidding war takes prices too low.
1) Developers want to continue in their business, so they cut costs. This means factory built components, vertical integration, the same things that cut costs in every other industry. Today they have no incentive to actually compete.
2) Without zoning, any privately held land becomes available for housing, so you see completely new business models. A developer builds an entire neighborhood from scratch, for instance - this is how many of our late 1800s / early 1900s neighborhoods happened, before zoning, and they're often some of the best walkable urban centers now.
3) New entrants bring innovative solutions at scale. Modular buildings explode. People come up with shit you cannot possibly think of today.
This is actually entirely backwards -- it's much more common for me to hear examples in informal conversation that show some understanding of how producers of household goods might want to avoid oversupply because it drives prices down and volume on smaller margins is a tough game, sometimes well worth the rewards, sometimes with its own undesirable consequences.
I literally never hear this from anyone who talks about housing supply, to the point where I'd be willing to bet the majority of people talking about it online are only tangentially familiar with the concept of diminishing marginal returns at all and the other 90% it just never occurred to them it relates.
> Today they have no incentive to actually compete.
As long as you've got competition you have incentive to compete. Along with the incentive that cutting production costs in the world we have produces greater margins as surely as in some imagined counterfactual world where there's no zoning or something.
> Without zoning
Without zoning you might get out of having to account to a municipality, but nothing changes about the demand for different kinds of use in a given area or the economics of providing it.
> Modular buildings explode. People come up with shit you cannot possibly think of today.
because markets, right?
Modular design and prefab have been a thing for decades. Where they have advantages, they should (and in some cases are) already thriving.
To stick close to the example, rooming houses (SROs) are effectively illegal in most cities these days. You simply can't have a commercial venture that rents out cheap barebones bedrooms with shared bathrooms. That's due to regulations that were designed to get rid of rooming houses. Bedrooms are also required by law to have a window and closet with doors in many places.
I'll admit that living in a place that looks like a college dorm isn't the best thing, but we are at the point where there is no middle ground between an apartment and a tent on the street.
Windows are required for fire escape, there are good reasons for that.
Where's Adam Neumann when we need him!?
Parking minimums, minimum unit sizes, long and costly “environmental review” (a classic in Seattle, where it’s sadly almost never used for environmental purpose), lengthy “community design review” (another classic for Seattle, which typically has the effect of allowing only extremely conservative design), zoning restricting how much can be built (Seattle is famous for having the highest percentage of land zoned SFH of any major city).
Seattle rental prices increase over the past 10 years is extremely correlated to the housing deficit (population growth minus housing built). It’s not just a matter of “homes going for $2k/mo”, it’s why they’re going for $2k/mo.
Multistory buildings with running water, electricity, heat, and other “basic” requirements are expensive to engineer and build. No one wants to build something and then lose money, but that’s where we are at with new construction.
Make no mistake, it is entirely the government’s fault. It is illegal everywhere to build something that costs less.
Zoning laws like single family zoning, requiring parking spots for every unit or even every bedroom, disallowing zero lot lines on lots that allow multiple units. All of these things add cost that may not pass along any value to people in the market.
Aside from the engineering complexities of modern buildings, we've also limited ourselves to building either single family or 200 unit apartments when most cities have a ton of space for 3/4 unit homes which are considerably cheaper to construct. We built our zoning laws on the idea that we could just always expand outward into suburbs forever. But that approach is broken as people start to move back into cities.