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Comment by TulliusCicero | Hacker News Reader

The biggest problem is the cost of housing, and it's entirely a self-own. There's nothing inherent to America that means the cost of housing has to price into the stratosphere anywhere that has good jobs, we just constantly screw ourselves by not building enough housing.

Whether it's private developers or public, we just constantly refuse to do anything beyond quarter-assing the problem, prioritizing having enough free street parking for cars over affordable housing for families.

American productivity, our GDP per capita is still doing quite well, but it doesn't help the average person if all that money has to go into their rent or mortgage. And benefitting from property values rising from scarce housing is just a generational ponzi scheme.

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I used to think like this that it was a self-inflicted American thing. After talking with a number of Europeans, Australias, etc it seems to be a broad problem in most westernized countries.

If it were purely some single thing or circumstance of politics it should be less widespread. There’s clearly some structural issue in western societies. It’s still possibly self-inflicted but not by a simple reason like lack of supply.

Why would multiple Western & European countries have this same lack of supply? Is there a conflict of western values and an ideal of owning a home at all an issue with our population levels? Do our changing morals and increasing self centered-ness in our cultures lead our democracies to stall home building? I think we need more questions like these.

> It’s still possibly self-inflicted but not by a simple reason like lack of supply.

No, it's exactly that. It's just that pretty much all the Western countries put in a bunch of regulations that made it harder to build things. These were for nominally good reasons -- protecting the environment, not running roughshod over local interests, not putting in 'nuisance' properties/buildings, etc. -- but the end result is that the pendulum swung too far in the other direction and it got super hard to build.

Ask developers or even random people who try to build a new house or expand on their existing house and you'll hear similar stories where even basic things are a nightmare bureaucracy seemingly aimed at killing your dreams.

Contrast that with Japan, where building is more straightforward, and even Tokyo rents aren't too crazy, not compared to the biggest Western cities.

> put in a bunch of regulations that made it harder to build things.

Is it regulations? Or is it home-owners and realtors voting against expanded housing projects?

The problem is if you build more houses, there's entire tranche of people whose "investments" will be worth less. And for some reason we're afraid to tell them it was a mistake.

> Is it regulations? Or is it home-owners and realtors voting against expanded housing projects?

Those are the same thing. One is a motivation for the other.

That's fair! I, probably unfairly, split up regulations and "regulations" based on who profits and why.

Japan/Tokyo is not a good example, or not equivalent, as they have a shrinking population.

At least in Australia, we haven't really had a housing crisis like this for a while. For whatever reason demand for housing spiked at the same time as the cost of materials and labour did, hence building is now incredibly expensive.

> Japan/Tokyo is not a good example, or not equivalent, as they have a shrinking population.

It's a good example because Tokyo was still growing for a very long time and yet fairly had reasonable rents despite an enormous metro area population that's significantly larger than any Western city.

It's hard not to blame rampant immigration since COVID for Australia's housing woes.

> If it were purely some single thing or circumstance of politics it should be less widespread. There’s clearly some structural issue in western societies. It’s still possibly self-inflicted but not by a simple reason like lack of supply.

It is due to ZIRP for the past 10 years[*] in the USD 800# gorilla of a currency / economic area. Due to a large financial system in the US and Western Europe the liquidity flows into the financial system create asset bubbles instead of downstream inflation, and due to financing that affects housing as well. Thanks to other policies like tax cuts for the rich the inflation is confined mostly to the financial sector and things-that-rich-people-buy more broadly with limited spillover into the 'real' economy and downstream wages.

[*] and falling rates and 2% inflation targeting ever since the 1980s.

There's of course a selection bias here. If you are talking to the subset of people who live in big cities, you are by definition talking to people who are spending money to compete with others for the privilege of living in scarce housing.

The faircloth amendment prohibits an increase in public housing stock. Granted amendments can be repealed, but “refusal” is a bit of an oversimplification in the public housing case, it’s literally banned.

Is public housing the main driver of lower housing prices in comparable economies?

I would have guessed that the HUD being unable to build more housing isn't helping us, but isn't the main reason that prices are skyrocketing in urban areas.

Public housing is important, mostly because private housing growth contracts during economic slowdowns, and the delay in constructing new ones means an eventual crunch when the economy starts needing housing again. If the public housing pipeline is robust it can generate a more even supply.

> Is public housing the main driver of lower housing prices in comparable economies?

Most other Western countries seem to be suffering similar issues, with prices rising and various regulations making it hard to increase the supply of housing.

Vienna seems to be doing better as far as capital cities go, and it has a large amount of social/public housing.

That said, rents in Seoul and Tokyo are fairly reasonable given their size and national importance, and this seems to be because it's just a lot easier to make more housing.

Rent in Seoul is good, but price to income is pretty bad, worse than SF. For some reason South Korea's flavor of property investment prefers rental income (as opposed to China, where a lot of invested property is not even finished let alone sublet)

Vienna has a bit of an advantage in that it has been below its population peak for the past hundred years (since the peak was before WWI when it was an imperial capital)

It’s a prevention of increases above the existing levels that existed at the time of the Faircloth amendment. Pretty much all agencies are well below these levels in 2023.

How is that not exactly the kind of 'self-own' that I'm talking about? There's nothing technical or geographic that's stopping us here, it's literally just a law we ourselves passed to make the problem worse. The federal government could repeal it at any time but chooses not to.

Also, that's only for federal public housing IIRC, so cities/counties/states could still make their own public housing if they wanted to.

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