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Baby boomers are making it harder for millennials to buy homes

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Re: Baby boomers are making it harder for millennials to buy homes

#51

Post by mythrwy »

omegaham wrote: post #50
mythrwy wrote: post #32

Earlier quoted context omitted.

I hear you and apologies for the rant. Down votes are entirely understandable as I don't care for radical sounding rants either. I'm not saying in in the US, nor concretely, but philosophically I think when a person is born they inherit the right to inhabit a piece of earth. You shouldn't arrive in the earth and not be able to sleep on piece of it without paying someone. I guess I feel that land in general belongs to…

> Leave wealth building for bitcoin and Apple stock and companies that make mascara. The flip side of this - people then complain that we have 25 different high-tech varieties of boner pills while the developing world is dealing with antibiotic-resistant infections and malaria. Despite the SV Founder Changing The World rhetoric, most people are in business to get paid. People go where the money is. If you declare tha…

Yup. That is the problem right here in the real world. Don't disagree a bit. We've seen what happens with price controls, rent controls, government subsidies and mandates.

That's why I say I see the problem, not the answer. But I'm pretty sure we can do better than we are right now. Policies discouraging wealth accumulation through living quarters might be a good start.

Re: Baby boomers are making it harder for millennials to buy homes

#52

Post by kevinburke »

scythe wrote: post #49
jrapdx3 wrote: post #36

Earlier quoted context omitted.

The question I have has several parts, but fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Not saying that the housing supply isn't excessively restricted, but how much can restrictions be decreased and how much difference would it make? An analogy is building freeways to relieve traffic congestion. What regularly happens is that additional roads or add…

In order to increase the housing supply "significantly", you need to increase zoning limits in >10% of the relevant population-weighted land area. However balkanization makes it impossible to do this through a single political entity. The solution IMO is a "trigger" law that will increase zoning heights in a suburb when the nearby suburbs pass similar laws. This prevents any one town from becoming gentrified if they…

The biggest impediment to building in CA isn't zoning laws; most areas are zoned for way more density than they are built to.

As an example, Habitat for Humanity wants to build 6 stories of below-market-rate condos in Redwood City, which complies with zoning codes, but are being opposed by a lawyer who lives on the block, because it's "out of character" with the other buildings in the neighborhood.

It's a byzantine approval process that includes City Councils who are 100% responsible for local housing decisions, and are elected and responsible only to current city residents. Zealous Planning Commission boards who consider things like shadows and wind when making decisions, EIR (environmental impact report) appeals, CEQA lawsuits, a constitutional housing amendment (Prop 13) that incentivizes existing homeowners to oppose new development, and more...

(It help if more areas were upzoned, but it's not the reason by any stretch)

Re: Baby boomers are making it harder for millennials to buy homes

#53

Post by rcpt »

saosebastiao wrote: post #47
jrapdx3 wrote: post #36

Earlier quoted context omitted.

The question I have has several parts, but fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Not saying that the housing supply isn't excessively restricted, but how much can restrictions be decreased and how much difference would it make? An analogy is building freeways to relieve traffic congestion. What regularly happens is that additional roads or add…

If you consider the fact that developers have been building at near peak-Dubai paces in Seattle for salable prices that are much lower than the bay area , I'd say you're worried about nothing of consequence. If you merely let them, they'll build until they can't cover their costs.

> building at near peak-Dubai paces in Seattle

I'm curious about this - do you have some data? Not that I doubt it's true, I'm simply interested in how one would quantify this kinda thing.

Re: Baby boomers are making it harder for millennials to buy homes

#55

Post by jld »

rcpt wrote: post #53
saosebastiao wrote: post #47

Earlier quoted context omitted.

If you consider the fact that developers have been building at near peak-Dubai paces in Seattle for salable prices that are much lower than the bay area , I'd say you're worried about nothing of consequence. If you merely let them, they'll build until they can't cover their costs.

> building at near peak-Dubai paces in Seattle I'm curious about this - do you have some data? Not that I doubt it's true, I'm simply interested in how one would quantify this kinda thing.

I can't speak to the Dubai comparison, but Seattle is bringing 10,000 apartments online this year.

http://www.seattletimes.com/business/real-estate/seattles-re...

Re: Baby boomers are making it harder for millennials to buy homes

#56

Post by Kluny »

Camillo wrote: post #33
kevinburke wrote: post #23

I'm going to sound like a broken record here but there are policy and other decisions being made in the Bay Area that are restricting the housing supply and driving up the price of existing housing. You don't have to be a bystander in this process, you can help lobby for more supply. A list of propositions and legislation to support (SF, Brisbane, Mountain View, the CA state legislature) can be found here: https://ne…

There should be a site where these actionable things are concisely listed. Not a HN comment, a real website. Maybe people could even sign up for emails whenever a new action item pops up. OTOH, many people here are not US citizens, so they cannot really do much about any of this.

strongtowns.org can keep you posted as well.

Re: Baby boomers are making it harder for millennials to buy homes

#57

Post by [deleted] »

Camillo wrote: post #33
kevinburke wrote: post #23

I'm going to sound like a broken record here but there are policy and other decisions being made in the Bay Area that are restricting the housing supply and driving up the price of existing housing. You don't have to be a bystander in this process, you can help lobby for more supply. A list of propositions and legislation to support (SF, Brisbane, Mountain View, the CA state legislature) can be found here: https://ne…

There should be a site where these actionable things are concisely listed. Not a HN comment, a real website. Maybe people could even sign up for emails whenever a new action item pops up. OTOH, many people here are not US citizens, so they cannot really do much about any of this.

[deleted]

Re: Baby boomers are making it harder for millennials to buy homes

#58

Post by jrapdx3 »

kevinburke wrote: post #41
jrapdx3 wrote: post #36

Earlier quoted context omitted.

The question I have has several parts, but fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Not saying that the housing supply isn't excessively restricted, but how much can restrictions be decreased and how much difference would it make? An analogy is building freeways to relieve traffic congestion. What regularly happens is that additional roads or add…

> fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Yes, it can; SF built 5,000 units last year, a record, and rents and owner move-in evictions finally declined. At the very least, building more housing can prevent further large price rises. > BTW this is what's happening here in Portland OR, where a building boom has been going on for years. The area po…

You might be right, possibly housing prices could be higher. If in fact prices have stabilized or leveled out (it's sure hard to get up to date info of that kind), it suggests there's an equilibrium between increasing population and housing availability. The more housing the higher the population will go for any particular average housing price point. Simplistically, price = population/amount of housing.

I think an issue is building new housing attracts an influx of population up to the point that housing is not too expensive, keeping the average price point about the same. Conversely, outflux of population would cause prices to plummet, which has happened in the past during recessions and high unemployment. In effect, housing stocks then are reduced by being removed from the market, but that's not exactly healthy for the community either.

> I contend that the people moving in would outbid everyone for the existing housing stock, which would drive rent increases even more than rents are currently going up.

That's possible, but unless people moving in are much wealthier than the people already there, the price could only rise a certain amount before no one could afford it and sales would fall off. That's similar to certain (expensive) condo prices around here, but still seems there's a ceiling effect.

Your comment inspires me to talk with some real estate folks I know, it's been a while since getting their perspective on the market.

Re: Baby boomers are making it harder for millennials to buy homes

#59

Post by jrapdx3 »

saosebastiao wrote: post #47
jrapdx3 wrote: post #36

Earlier quoted context omitted.

The question I have has several parts, but fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Not saying that the housing supply isn't excessively restricted, but how much can restrictions be decreased and how much difference would it make? An analogy is building freeways to relieve traffic congestion. What regularly happens is that additional roads or add…

If you consider the fact that developers have been building at near peak-Dubai paces in Seattle for salable prices that are much lower than the bay area , I'd say you're worried about nothing of consequence. If you merely let them, they'll build until they can't cover their costs.

I don't have the data at my fingertips, but IIRC Seattle housing prices were historically lower than SF, but higher than Portland OR. I think that could make it hard to assess the effects of bringing more housing on line in Seattle, at least comparing to SF would be misleading. However the history of housing costs in Seattle might be informative.

> If you merely let them, they'll build until they can't cover their costs.

The problem in the building industry is that financial commitments are made years in advance, meaning even if things are in a slump, units may be built anyway because the project was on track to happen well before the slump came about. It's also occurred that units are constructed just before a slump hits and as a result the completed units sit empty, the developer goes bankrupt, etc. Overbuilding can and does happen and it can take many years, even decades for a property to finally break even.

Re: Baby boomers are making it harder for millennials to buy homes

#60

Post by jrapdx3 »

scythe wrote: post #49
jrapdx3 wrote: post #36

Earlier quoted context omitted.

The question I have has several parts, but fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Not saying that the housing supply isn't excessively restricted, but how much can restrictions be decreased and how much difference would it make? An analogy is building freeways to relieve traffic congestion. What regularly happens is that additional roads or add…

In order to increase the housing supply "significantly", you need to increase zoning limits in >10% of the relevant population-weighted land area. However balkanization makes it impossible to do this through a single political entity. The solution IMO is a "trigger" law that will increase zoning heights in a suburb when the nearby suburbs pass similar laws. This prevents any one town from becoming gentrified if they…

Portland is unique among similar cities in that large tracts of undeveloped land became available for housing construction in the last several years. That means thousands of units will be available in the near future, in addition to the large number recently added to the inventory in the metro area. I'm guessing that would well exceed the 10% zoning limit increase you mention.

I haven't checked housing costs recently, but anecdotal data (from people looking for apartments, etc.) is that prices are still through the roof (so to speak). It could be prices will decline later this year or into next year, but pretty soon the supply of new housing will cease to increase so rapidly.

It remains to be seen what happens to housing costs. I could be all wrong, but I'll predict there won't be a significant decrease despite the rapid pace of development.

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