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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

#191

Post by themaninthedark »

treis wrote: post #81
sampo wrote: post #37

Earlier quoted context omitted.

> Do we want a culture where the poor are living in barely livable wage slave pods At least the poor would have the choice between the barely livable pod in downtown, or a house 2 hours commute away. Currently they can only choose the latter.

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'…

I think that maybe a lot of little, it doesn't cost much to add things ends up costing a lot.

Think about bathrooms; my childhood home and my grandparent's home both only had 1 bathroom. My grandparent's was on the second floor with enough room for a sink with a toilet on one side and bathtub on the other. Mine was toilet, sink and single standing shower.

Newer homes started having a guest toilet. Then guest/second bath and master bath. Now newer constructions seem to have 1 bathroom per bedroom as well a guest. All while increasing the size of the bathroom. And increasing the size of the bedroom. And the size of the closets. And so on.

I bought a 3 br 2 ba ranch. Currently my 2 sons are 1 and 6, I don't need the second bathroom. It's nice when we have guests but when we don't it just sits there.

I see many new constructions but not any that are even close in size or price to what I have. I also see the older lots being bought and redeveloped.

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

#192

Post by ummonk »

maxsilver wrote: post #137
BurningFrog wrote: post #98

Earlier quoted context omitted.

The price of housing is determined by supply and demand, not the developer. Building new housing lowers prices for all preexisting housing.

> Building new housing lowers prices for all preexisting housing This is not true in the US. Housing in the US is valued solely by the value of the housing around it (called 'comps' or 'comparables'). Building new luxury housing raises the price for all preexisting nearby housing, because your comparables will now be based on whatever the luxury housing prices are (even if your own house is very modest, even if your…

New luxury housing is not used as comps for older housing, at least in California. There is always a massive price premium for newer housing over older housing, contrary to your claims.

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

#193

Post by jdminhbg »

mschuster91 wrote: post #134
hanniabu wrote: post #108

Earlier quoted context omitted.

> The big cost items are kitchens and bathrooms Why does a pod need a kitchen and bathroom? If it had those it'd be called a studio apartment. A pod is essentially anything from a dorm room styled apartment to a half-height room big enough to have a bed to sleep in and a shelf for a few items (like the Japanese have). In any of those cases you'd have communal kitchens and bathrooms. This would actually also be good s…

> Why does a pod need a kitchen and bathroom? Basic human dignity? Being forced to share an intimate thing such as a bathroom with strangers or depending on strangers not eating your food/trashing your stuff or not being able to feed yourself because another person is cooking a 5-rounds-meal is not something that should be acceptable in a developed nation.

I lived in a college dorm for four years and I don’t consider my human rights to have been violated in the process.

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

#194

Post by ummonk »

dominotw wrote: post #35
arcticbull wrote: post #3

Earlier quoted context omitted.

Not being able to afford a house decreases quality of life infinitely more than some increased density.

Wouldn't the world simply increase population where this is still the case even if we build more housing though?

So your argument is to build less housing and force people to be homeless so they don't have kids?

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

#195

Post by mywittyname »

arcticbull wrote: post #139
mschuster91 wrote: post #126

Earlier quoted context omitted.

> During the great suburban expansion, houses were parroted as your greatest asset and your biggest investment. The "investment" should not be "I can sell this in 20 years for a boatload of profit" but rather "I don't have to pay rent when retired, only property taxes + maintenance + energy".

A boatload of tax-free profit, the first $250K is tax exempt for individuals and 500K for couples.

You pay taxes on the funds used to maintain the property. So unless you're in a market with obscene growth rates, you still lose money even if you earned capital gains on the transaction.

I just put together a spreadsheet assuming 1% maintenance, 1% tax rate, and 3.5% mortgage rate on a 250k house. You still would need a 5% annual rate of return to make money. After 15 years you would have hit your $250k capital gains limit, but you'd only have $70k in profit after taxes, interest and maintenance. At 3%, you lose money until well after the house is paid off.

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

#196

Post by ajkjk »

arcticbull wrote: post #121
exabrial wrote: post #110

How to increase the housing supply: get the government out. Places in California requires things like requiring all homes to have a high amperage outlet in the garage for charging electric cars. Do you really think people that are struggling to keep a roof over their head are driving a Tesla?

Yes, let's get the government out, of deciding how tall houses can be. Removing the requirement for a high-amperage outlet (a tiny incremental cost during building) is like an umbrella in a hurricane. Nice to have, but totally doesn't solve the real problem.

I think that was an example, not the entire point.

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

#197

Post by svachalek »

mywittyname wrote: post #151
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.

There are dozens of us! I think most of this comes down to the fact that Americans generally had little savings outside of their home equity. This only became relevant in the 90-00s when home equity loans/LoCs took off and were widely available to almost anyone. Suddenly, it mattered how much equity you had in your home because you could spend it. There's another group of people that look at their parents' home and r…

Simple inflation too, the value of a dollar in 1990 was twice as much as now. But for most owners, inflation works in your favor since it negates some of the mortgage interest.

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

#198

Post by slg »

treis wrote: post #183
slg wrote: post #141

Earlier quoted context omitted.

>It does because the poor people move into the housing that the upper middle class vacated That only works if the system is closed. If housing in the bay area goes down in price, you get people moving in from New York, LA, Boston, Austin, etc who previously avoided the area due to costs. Do you just ship off those poor people to those vacated homes hundred or thousands of miles away? >Population growth is an independ…

>That only works if the system is closed. If housing in the bay area goes down in price, you get people moving in from New York, LA, Boston, Austin If that were true the bay area would have been empty long ago because of the ridiculous housing cost. Fact is most people won't change cities for lower housing cost. >The reason housing in the bay area is so high has nothing to do with fixed material costs or else housing…

>If that were true the bay area would have been empty long ago because of the ridiculous housing cost. Fact is most people won't change cities for lower housing cost.

Do you genuinely think that housing costs don't factor into which cities people choose to live? I'm not sure this conversation can go anywhere beneficial if we can't agree on that fundamental and in my opinion obvious fact.

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

#199

Post by mywittyname »

Spellman wrote: post #169
jdmichal wrote: post #105

Earlier quoted context omitted.

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.

Another way I say it is that buying a house is a hedge against homelessness. TBH I stole that from an article I read a while ago that I can't seem to Google now...

Except you need cash flow or savings to afford a house, even a paid off one. If you don't pay your mortgage or tax bill, then someone is going to evict you.

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

#200

Post by PeterisP »

jlmorton wrote: post #177
mrep wrote: post #97

Earlier quoted context omitted.

I'm with you. Granted, I do consider it an investment in the sense that every month I pay off part of the principal and thus I can get some money back when I sell it whereas I'd get nothing if I was renting but I don't expect greater than inflation appreciation on the house. However, this could just be because I grew up in Chicago where there is endless farmland that can be developed and thus expecting greater than i…

> but I don't expect greater than inflation appreciation on the house. Even expecting the house to hold its value is rather strange. You would naturally expect the value of a home to decrease by some amount each year. Most of us would prefer a modern home to an older home. The only reason it does not is because supply of new homes is restricted. In well functioning markets like Tokyo, that's exactly what we see: home…

I'd expect the value of a properly built and maintained house to decrease very slowly (e.g. the building I live in is ~110 years old and not that much worse than when it was built), and while that's still a negative, on the other hand the value of the land would appreciate even (and especially if) there's active building of new homes, so the total value of house+land can be quite stable even if supply is not restricted. It won't skyrocket, though.
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