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Oakland shows how to expand housing supply: tell developers they can build homes

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Re: Oakland shows how to expand housing supply: tell developers they can build homes

#111

Post by exabrial »

nhebb wrote: post #80
arcticbull wrote: post #5

The whole topic of conversation around housing affordability is backwards. Specifically, housing affordability is 100%, entirely, a problem of artificial constraints on supply by city councils. (1) Americans consider housing to be an investment. An investment is only an investment if you expect a positive return over time. We generally want that investment to match or exceed inflation. (2) That's antithetical to the…

> (1) Americans consider housing to be an investment. Apparently I'm the lone dissenter on this, but I think for many people this is a side benefit that they may hope for, but the primary objective is simply to own a home that they can live in and raise a family.

At worst, you'll break even, at best, you'll make a profit, and if you don't, it's an automatic loss.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#112

Post by amanaplanacanal »

slg wrote: post #95
treis wrote: post #81

Earlier quoted context omitted.

You don't really save all that much money by building a barely livable pod vs an actual apartment. The big cost items are kitchens and bathrooms. Those are mostly fixed costs, i.e. it costs the same to plumb a toilet, shower, and sink in a 50 sq foot bathroom as a 100 sq foot one. Only when you get to stupid high real estate cost does a ~300 sq foot pod start making sense over ~600 ft 1 bed or ~1000 sq ft 2 beds. It'…

>It's a bit counter intuitive, but the best way to lower the cost of housing for the poor is to build more housing for the upper middle class and up. They will trade up houses which will increase the supply of used houses driving down their price The problem is that housing in any location is not a closed system with fixed demand. It is an open system in which increased supply can generate increased demand. When you…

If you keep building, eventually you will meet the pent up demand. Your scenario might match the first batch of new housing, but it can't continue indefinitely. Eventually you have more houses than people.

There is a ton of pent-up demand in the bay area, because this has been going on for a long time. People who own houses there are going to fight you the whole way.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#113

Post by treis »

slg wrote: post #95
treis wrote: post #81

Earlier quoted context omitted.

You don't really save all that much money by building a barely livable pod vs an actual apartment. The big cost items are kitchens and bathrooms. Those are mostly fixed costs, i.e. it costs the same to plumb a toilet, shower, and sink in a 50 sq foot bathroom as a 100 sq foot one. Only when you get to stupid high real estate cost does a ~300 sq foot pod start making sense over ~600 ft 1 bed or ~1000 sq ft 2 beds. It'…

>It's a bit counter intuitive, but the best way to lower the cost of housing for the poor is to build more housing for the upper middle class and up. They will trade up houses which will increase the supply of used houses driving down their price The problem is that housing in any location is not a closed system with fixed demand. It is an open system in which increased supply can generate increased demand. When you…

>upper middle class and up people who previously decided to live further away over paying the extreme rent costs move in, the population grows, and the price break never trickles down to the poor people in the city

It does because the poor people move into the housing that the upper middle class vacated. Population growth is an independent confounding factor. In other words, housing cost can still go up due to population growth but they would go up less if the new luxury housing is built.

> You need to build new homes at every pricing level

But you can't. You have high fixed costs like land, hook ups to the city utilities, architect work, plumbing, electrical, permits, and HVAC. These are pretty much the same regardless of how big of a house you build. The stuff that varies directly with size like dry wall, paint, framing, flooring, etc. doesn't cost that much. And even then the more you do at one time the cheaper it gets. In other words, hanging the last section of drywall costs a lot less than hanging the first one because you incur all of the over head to hang that first sheet.

The end result is that you can't build a new house that a poor person can afford. They probably can't even afford the fixed costs. Even if you could, it wouldn't be economically viable. You're way better off spending the ~10% more to get a upper middle class house that you can sell for 50-100% more. It's still good for affordability because you've increase supply. Everybody takes one step up the ladder and the benefit will trickle down to the poor.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#114

Post by Retric »

pas wrote: post #33
Retric wrote: post #27

Earlier quoted context omitted.

I agree with what you’re saying, but that’s overly simplistic. Infrastructure costs increase as you increase density. Charging an appropriate fee for new housing rather than limiting the growth is an efficient solution, but current methods allow for local corruption. That’s just one of the hidden reasons for our current system. Another, is most people want to live as far as possible from poor people.

> Infrastructure costs increase as you increase density. They increase much slower than the efficiency gains from having a higher density and the rate of per capita costs decrease from having much more people pay for those costs.

When a city passes ~20,000 people per square mile the per person cost of infrastructure increases as roads stop being efficient. You start needing tunnels for roads and or subway systems. You also need deeper pipes for water etc, it’s not a deal breaker, but it is a real issue.

Having existing residents subsidize new residents is a common approach, but understandably unpopular.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#115

Post by tomatotomato37 »

dominotw wrote: post #52
arcticbull wrote: post #43

Earlier quoted context omitted.

Tends to go the other way. Fertility is strongly negatively correlated with development, of which housing is a component. America's birth rate is already well below replacement (1.8 births per woman), and relies heavily on immigration to maintain a steady population. There's a stark graph of page "4074" (page 4, figure 1-E in the PDF) of fertility rate vs HDI. [1] I bet if you build more housing you'd have fewer kids…

> Fertility is strongly negatively correlated with development, of which housing is a component. America's birth rate is already well below replacement Wouldn't this imply america already has affordable housing ? Why are there endless articles in news that this isn't the case.

Because most journalist jobs and thus journalists are in over demanded hip cities, instead of random rural flyover country, and thus write what they know.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#116

Post by alistairSH »

iguy wrote: post #69
balfirevic wrote: post #41

I saw this tweet recently, by patio11: https://twitter.com/patio11/status/1199366332468224000 "Tokyo has positive population growth of about 100,000 people a year, and rents and home prices are roughly stable for last decade. How? Outconstructing NYC. And LA. And SF. And Boston. And Houston. Combined. Every year."

Does anyone know how much of such construction is re-construction, and how much new stock? I have heard (but am not sure) that the pattern is more to buy some land, knock down the previous guy's house, and build your own. On a time-scale of 20-30 years, closer to how Americans regard cars (e.g. having to buy used cars is undesirable) than how they regard houses (once built they stay in use forever, although renovated…

A fair chunk of that rebuilding is due to more relaxed zoning which is additive instead of single-purpose.

In the US, zones tend to be "single family home", "apartments", "town homes", "commercial", "retail". No overlap and the housing variants don't allow increased density without re-zoning, which is expensive.

In Japan, zones are more like a maximum usage. "homes", "homes+retail", "home+retail+commercial", etc. The housing zones are less restrictive - typically single family, duplex, and low-rise apartments are all allowed in the basic residential zone. High-rise would be in a different zone, along with retail, commercial, etc.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#117

Post by saiya-jin »

jdmichal wrote: post #105
nhebb wrote: post #80

Earlier quoted context omitted.

> (1) Americans consider housing to be an investment. Apparently I'm the lone dissenter on this, but I think for many people this is a side benefit that they may hope for, but the primary objective is simply to own a home that they can live in and raise a family.

I always like to say that everyone is short a house, and your first property is just covering that short position. It's only properties after that first one that are investments.

This doesn't cover many many people for various reasons. Ie I own 2 properties and I live in neither (house that I bought for my parents 1500km away, investment apartment in the mountains). I rent, because a) it doesn't make much sense to buy a property in traditional sense here where I live, too costly; b) we're not yet stabilized on location with first kid coming, and pinning us down to specific place before this is clear might be a huge mistake on many levels and massive stressor for our lives and relationship. We might end up not buying anything else till rest of our lives, dunno now.

Others might have other reasons for similar state.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#118

Post by keithnoizu »

arcticbull wrote: post #5

The whole topic of conversation around housing affordability is backwards. Specifically, housing affordability is 100%, entirely, a problem of artificial constraints on supply by city councils. (1) Americans consider housing to be an investment. An investment is only an investment if you expect a positive return over time. We generally want that investment to match or exceed inflation. (2) That's antithetical to the…

Housing is actually a depreciating asset in Tokyo, with a regular cycle of tearing down and rebuilding units every few decades.

But the poor youth don't need to vote, they can just simmer on things long enough until they break out in riots. I mean hey massive social upheaval and unrest nearly got the FAP passed under Nixon.

Let the kids burn down a few small suburbs and the government will figure out something.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#119

Post by amanaplanacanal »

Retric wrote: post #27
arcticbull wrote: post #5

The whole topic of conversation around housing affordability is backwards. Specifically, housing affordability is 100%, entirely, a problem of artificial constraints on supply by city councils. (1) Americans consider housing to be an investment. An investment is only an investment if you expect a positive return over time. We generally want that investment to match or exceed inflation. (2) That's antithetical to the…

I agree with what you’re saying, but that’s overly simplistic. Infrastructure costs increase as you increase density. Charging an appropriate fee for new housing rather than limiting the growth is an efficient solution, but current methods allow for local corruption. That’s just one of the hidden reasons for our current system. Another, is most people want to live as far as possible from poor people.

Infrastucture costs are higher for decreased density. This is well known. You have to lay a lot more pavement and pipe when people live farther apart. Your typical suburban subdivision doesn't even pay enough in property taxes to maintain their infrastructure, and is subsidized by the denser areas. The folks at StrongTowns have done tons of work in this area.

Re: Oakland shows how to expand housing supply: tell developers they can build homes

#120

Post by KoftaBob »

arcticbull wrote: post #5

The whole topic of conversation around housing affordability is backwards. Specifically, housing affordability is 100%, entirely, a problem of artificial constraints on supply by city councils. (1) Americans consider housing to be an investment. An investment is only an investment if you expect a positive return over time. We generally want that investment to match or exceed inflation. (2) That's antithetical to the…

Took the words out of my mouth. Zoning laws need to be completely overhauled and changed to be planned by the state, not local government.

When you let local town hall meetings give their input on every single development, it heavily hinders the ability of housing supply to keep up with demand. States need to create universal zoning laws that adapt to different situations and if a building meets it, it's automatically approved, full stop.

Holding up development by town hall meeting should be for exceptional cases where there's a gray area in meeting the zoning law, not the norm.

Can you imagine what NYC would look like today if they let local homeowners block every single building until their every desire was satisfied? It would be a shell of the metropolis it is today.

Homeowners need to get out of their head this idea that when you buy a home, you're entitled to a neighborhood that stays frozen in time to how you liked it. The only thing they have a say on is their own property, and thats it.

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