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We detached this subthread from https://news.ycombinator.com/item?id=39331110.
The basic reason for skyrocketing housing costs in major California cities is that there aren't enough housing units for the number of people living there. The solution to that is... ... ... denser housing.
No large city in the US managed to decrease prices by building more housing (dense or not) within the last 25 years.
There are several fundamental reasons why density increases won't work.
More housing can only lower prices, in absolute terms, if it actually exceeds demand, but it still lowers prices compared to what they would have been had nothing been built, all else being equal.
There is broad consensus among economists that it is stringent regulatory controls constraining supply that lead to higher housing prices - not building more housing.
https://www.brookings.edu/articles/u-s-population-growth-has...
If we look at the growth from 2000-2020, it basically went from 1% to .12%, so I guess we could use a step method to integrate (or just take population delta from 2024 to 1999 and subtract immigrants?). I don’t think we’ve grown that much, and growth is incredibly uneven.
> There is broad consensus among economists that it is stringent regulatory controls constraining supply that lead to higher housing prices - not building more housing.
People say things like this without backing it up. We get:
> https://truthout.org/articles/big-real-estate-says-regulatio...
“Big Real Estate Says Regulations Caused Housing Crisis, But They Wrote the Rules”
But if you try to key in on specifically economists, they don’t say that. The fact that we have a global housing crisis, not just in America, seems to hint that something else is going on. Of course, we can build baby build Chinese style and wind up with 1.5 houses for every household, but that is probably a worse problem.
We're facing shortages caused by 40 years of building below the level of population growth.
We went through a property bust in the late 80s/early 90s due to Japan’s larger property bust and the S/L crisis, among having wicked recessions at the time.
Houses have to be owner occupied, not investment vehicles. I know, I know "what about rentals", etc? When it comes to rentals may be the Vienna mode?
Owners occupying certainly doesn't make them any less of an investment vehicle.
Another is breaking apart the reasons want to live somewhere. Every conurbation wants all the jobs but it's so self-destructive.
Federally limit where multinationals can set up shop (so they can't use state-level tax incentives to play states off one another).
Connect cities and states together better. High speed rail services so that it's actually viable to live away from work. I know people who try to justify 4h daily commutes. It's not fair to shovel 4M people into a space to work where only 1.6M people can live.
Also, yes also agree about more jobs and opportunities more distributed across the land. That sounds good.
I think about my position as favoring walkable dense metros in the more organic manner - people like people - we WANT to be close to one another. And the infrastructure to make that possible, comfortable, affordable, and sustainable.. is great!
The exchange of ideas and tolerance leading to innovation, is a function of dense metros. Is that not just fundamentally...true?
Governments are human organizations, and it's not a surprise that some organizations are better ran than other.
That said, yes for sure there's much suck about the filth, obliviousness, and inconsideration of "other people". I like people, but I do not live on top of people. I want the ability to walk or bike to my stimulus. And then retreat back to solitude.
Completely get you! In simple terms, I just think it has to occur silly to people, that 8 billion humans are gonna have their 2 acres of land and that that is somehow _actually_ ideal beyond "I want what I want the way I want it". Quite literally the concept of Civilization is honoring a WE more than an I.
And you’re entitled to not want to live in a dense urban environment, but you might need to open your mind to the idea that not everyone feels the way you do.
You're entitled to move away from a toxic river that catches fire. But you might need to open your mind to the idea that not everyone feels the way you do. Perhaps some people like to work at the factory that produces the toxic slime.
Urban density is pollution. Its effects are not limited to cities.
By making it easier for companies to open offices in dense urban cores, it ensures that smaller cities are starved of jobs and die. So people are forced to move to ever-densifying areas, driving up the price. This in turn makes it even easier for companies to hire people living near dense urban cores.
Rinse, wash, repeat.
Do you think suburbia is an efficient and effective use of land?
Oh, absolutely. It's more efficient for companies to hire workforce in dense cities and offload the externalities (increasing cost of living) onto the public.
Just like with pollution: if you dump toxic sludge into rivers, your factory can make widgets cheaper, than a factory that has to take care of its waste.
> Do you think suburbia is an efficient and effective use of land?
I don't think _efficiency_ should be the reason for cities. A polluting factory is also more efficient than a clean factory. Yet we somehow don't appreciate that efficiency anymore.
Moreover, the amount of urban areas is around 2% of the total land area in the US. De-aggregating the cities will only result in its increase by maybe 20%.
This is simply not the case. People living in dense walkable urban areas produce far less pollution than those living in the suburbs who need to drive much more and require far more infrastructure per household.
https://www.brookings.edu/articles/its-not-just-cities-subur...
Switching from gas cars to EVs and downsizing from barn-sized SUVs to medium-sized cars will solve the emissions issues.
Moreover, extrapolating the self-driving vehicles trend a bit, mild automated car-pooling will completely negate emissions advantage of EVERY other intracity public transit method.
Remote Work You need pervasive remote jobs to move any meaningful number of people away from the companies that presently fund their lifestyle.
Government and Desirability
Flyover states are run by gross people whose theories on how our country ought to be run that are misaligned with the people you wish would move there. This is going to cause in not many years a crisis situation with doctors choosing to move to more desirable locations and small cities lack a lot of the amenities and interest of living in the big city. People are already choosing not to live there despite decrease costs. Small cities are BORING.
The temptation is to only build government housing for the poor, but that’s a well known recipe for failure. The US has instead shifted to government spreading out poor population via subsidies but that’s doesn’t fix any of the core issues.
This only works as long as rural people keep having lots of kids to feed into the city, but that isn’t really happening anymore either.
It's not because of density - it's because people with options other than raising children tend to pick them since kids require a lot of effort.
SF and LA could easily be several times more dense than they currently are; that kind of increase would see the capacity of the entire state grow by double-digit percentages.
So now I've gotta ask you: if cities suck for population growth, then where would those double-digit population gains come from? It's not rural America, that's for sure.
[0] https://www.census.gov/data/tables/time-series/demo/popest/2...
https://www.cdc.gov/mmwr/volumes/67/wr/mm6745a9.htm https://www.census.gov/library/stories/2017/08/rural-america...
Based on actual data urban individuals (80% of the pop) aren't dependent upon rurals (20% of the pop) having babies because by the numbers most of the native born sons and daughters are born in urban and suburban areas. In fact both are dependent upon immigration to maintain the same level of population.
And it's written from the viewpoint of pro-density. Read the linked papers there, the best results of density increases are either extremely indirect ("migration chains") or insignificant (no sale price decreases, and single-digit percentage one-time decreases in rent).
I'm writing an analysis of all densifications in the US and Canada. So far, I have not found a _single_ example of density increases leading to even slowing down of sale prices. Never mind their reduction.
On the other hand, they ALWAYS lead to worsening commutes and shrinking square footage per capita.
Mense (2023) showed a 1% yearly increase in housing supply in Germany results in an average local municipality rent to fall by 0.2%.
Asquith et al. (2023) found in NYC, the average new building lowers nearby rents within 250 meters of the new building by 5% to 7% relative to the trend rent growth otherwise would have followed.
Li (2022), looked at new market rate buildings of 7+ stories and found that for every 10% increase to the housing stock that new high rises add within a 500-ft ring, residential rents for the buildings within that ring decrease by 1 percent.
Pennington (2021) found rents within 500 meters of a new project fell by 1.2 to 2.3% in San Francisco.
I have not read this one yet. Sounds suspicious, though.
The rest are basically what I told: one-time single-digit percentage decreases in rents. This one is also funny:
> Asquith et al. (2023) found in NYC, the average new building lowers nearby rents within 250 meters of the new building by 5% to 7% relative to the trend rent growth otherwise would have followed.
Rents still _increased_, but slightly slower.
Why would one expect a single increase in supply of available housing units to cause more than a one-time decrease in rent?
> Rents still _increased_, but slightly slower.
I'm not entirely sure why you find this funny. It finds adding housing units reduces surrounding future rents. If you find it funny it didn't lower rent in absolute terms for some reason, extrapolate what would happen to the rent of an place within 250 meters of 20 new buildings.
Read it. Oh wow. That's a fucking propaganda piece with shoddy statistics.
They basically found a statistical anomaly in the data, with the one- and two- bedroom apartments rents showing no significant difference from the historical trend. And to exaggerate the trend, they used an overfitted exponential model.
And in both cases, there were NO price decreases. Rents continued to grow, outpacing the inflation.
> Want truly affordable housing? Bring jobs to smaller cities. You don't have ANY other option.
Want big houses and cars? Bring good jobs to smaller cities, that still have little need for density. That's a pretty natural pattern of development. But the really high incomes will most likely still come from the very densest places, where people willingly put up with tradeoffs like living in a smaller place and doing without a car, because they're actually a lot better than the alternative.
No, it's not. Density leads to quantifiably worse life: longer commutes, smaller living spaces.
> Want big houses and cars? Bring good jobs to smaller cities, that still have little need for density.
Except that this is impossible unless density is regulated.
> But the really high incomes will most likely still come from the very densest places
Right now, the highest incomes come from people living in suburbs (according to the IRS stats).
Take Milan as a counterexample. A single room in a shared flat costs around €700/month, a single-room studio €1200/month. Yet, people on average earn €30,000 a year, which means €24000 after taxes, or around €1800 per month. That's not what I would say increased salaries and productivity.
In Italy, there are serious problems with stagnating productivity and national, collective bargaining. Nevertheless, that doesn't mean rents do not skyrocket in big cities
Any place will drop in prices if you keep on building in advance of demand.
Gentrification is more likely to come from lack of building than building. That's the story all throughout California and every other wealthy area in the US: extreme gentrification through lack of new housing. Its not the new housing that drives up prices, it's the lack of it.
That said, my personal belief is that prices are completely decoupled from demand and are more reflective of a desperation to keep them high for... other reasons.
Induced demand for highways: sure. Well proven. Happens every single time.
Induced demand for housing? Gonna need to see some hard evidence on the time scales, etc.
Housing is very different from highways. People can go from using zero freeway miles to 50 freeway miles a day, if there's slightly cheaper housing further out. It's this drop in pricing that drives demand.
For housing, the increase in demand comes from having, presumable, more amenities, making the dense living more desirable. The change in time for amenities to develop is on the order of years, however. It takes a long time for businesses to develop, build customer bases, etc. And in that time, it's possible to build more housing. Housing scales far far far better than freeways. It's easy to double, triple, quintuple, and even 10x or more the density from single detached units. Freeways don't scale like that.
Seattle: grew the number of units by 25% within the last 12 years. SF: only 5% within that timeframe.
Their price growth curve is nearly identical.
> Housing scales far far far better than freeways. It's easy to double, triple, quintuple, and even 10x or more the density from single detached units.
LOL, no. You have no idea how much city infrastructure costs.
> Freeways don't scale like that.
One mile of subway in Manhattan now costs more than 1000 miles of a 6-lane freeway.
What I don't agree with from GP is the idea of real increases in housing costs for those already in cities. The rising tide lifts most boats, if density isn't being unduly suppressed. So, density increases housing value but also the wealth of city-dwellers, relative to everyone else. Supply keeps up with demand, except where we won't let it.
>the increase in demand comes from having, presumable, more amenities
Not necessarily. It can also come from the increased opportunity for exposure to people and culture.
The end result of dense housing is a highly desirable place to live, in other words, increased demand for housing, locally.
This can be seen in housing prices in NYC, Taipei, Seoul, Tokyo, Hong Kong, Singapore, etc.
So it is not dense housing that makes housing costs drop, it is dense housing built in excess of demand... But incumbent property owners will resist that tooth and nail because if production of housing can satisfy demand, their capital investments (and very often sole vehicle of retirement income) will decrease in value. When a person's wealth decreases, they desire political change. So housing policy that results in lower housing costs is extremely unpopular among those with power (education, money, time, etc.).
By creating a denser unit, you're forcing (via economic forces) more people to move closer to denser areas. This in turn makes these areas more attractive for employers, making it easier to do business. This in turn makes dense areas more attractive for employees, so they are willing to pay more to live closer to dense areas.
Result: density increases, and prices rise along with it.
And an additional toxic component: the population is basically not growing anymore. It's nearly a zero-sum game now, so each new dense unit means one more dilapidated house in Kansas as its occupants had to move to find a job.
On densities, cities like New York, San Francisco, and Seattle (high rents) are comparable or higher in density than larger European cities with the exception of Paris (and I may have missed another). London, Berlin, or Madrid are noticeably lower than New York or possibly the other two US cities as well.
(Naturally, the city boundaries of somewhere like London include many less-urban areas so this doesn’t quite capture exactly what either of us presumably mean, but it’s loosely demonstrative.)
Density is needed for proper public transit and locally accessible services to flourish.
I lived in Tokyo which is full of high density and the world's best public transit without the drug abuse issues in the West. Safe, omnipresent public transit like this is absolutely necessary for high density — and it's not ideal at all.
Getting from point A to B for work is miserable. You walk to the station, wait for your train, then switch as necessary. Switching trains can be awful — Yotsuya to the Marunouchi line was particularly horrible. Maybe you are a winner with a job at Tokyo station; but I thought the point was empowering all people, not just the top tier of society?
Of course, you can choose to align yourself with the train system. Leaving aside your subsequent disadvantage when changing jobs, you are then competing with everyone for a decent place to live. Suddenly you need to fight for denser and denser (aka smaller and smaller) housing again and people eventually get priced out to a new town two hours out of Tokyo.
And that's in the city; Try visiting your family in Saitama if you live in the wrong part of Tokyo. Your selfish human desire to connect with family turns a 25-30 minute car ride into a 1.5 hour painful hassle, and one that is not cheap either. Try getting your friends together for a board game — transit is one reason why such home parties are so rare.
For the Bike utopians, I used to bike from Koenji to Ikebukuro at Sunshine 60 and would routinely beat the train. I had to stop because, even with the ideal small back roads, it was dangerous — and someone stole my bike. This is an inevitable part of density, you aren't going to have bigger roads and you get more rolls of the dice to encounter dishonest people.
Finally, the more density, the less you can do. Humans have their own social gravity and it shows. You will be poorer overall as going to the spice grocery is going to take up all your activity time (since so much will vanish in transit). Maybe it's ok if you wish to conform to everyone else's choice of food and activity but that's literally the opposite of diversity.
This is with the very best public transit system in the safest city in the world (for men, let's not talk sexual harassment of women) — any attempt in North America will be much, much worse for reasons that are obvious.
I still believe cities should enable higher density as homelessness is worse than everything I outlined above; but it won't be pleasant and many people will be forced into a cramped housing situation that they will never be able to get out of.
In that context, finding ways to bring jobs to smaller cities makes a lot of sense. I am sorry you got downvoted op, but a lot of people seem to be attracted to high density without appreciating realistic drawbacks.
(And to be honest, I still like the Tokyo train system, I'm just not going to mindlessly worship it)
FWIW, Tokyo is maybe a contender for 3rd. Taipei and Seoul are both an order of magnitude better than Tokyo for public transportation, in my opinion.
I recall NYC being better than Tokyo, too (when it worked).