Oakland shows how to expand housing supply: tell developers they can build homes • Hacker News Board

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

#251

Post by jelliclesfarm » Mon, Dec 02, 2019, 7:46 PM UTC

mc32 wrote: post #202

jlmorton wrote: post #177

Earlier quoted context omitted.

> 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…

Housing in Tokyo is also built to have a useful lifespan of 30 years, so framing it as them being “new” lacks background information.

10 years is the norm. They build it..raze it down and rebuild it.

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

#252

Post by AnthonyMouse » Mon, Dec 02, 2019, 7:49 PM UTC

huntertwo wrote: post #24

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…

Two thoughts 1) Isn't a developer also making an investment when they build these high as hell micro-apartment apartment buildings? 2) How do you avoid a race to the bottom in terms of housing quality when you allow said micro-apartments? Do we want a culture where the poor are living in barely livable wage slave pods while the rich are living in abundant villas? I'm all for affordable housing but it seems too nuance…

> 1) Isn't a developer also making an investment when they build these high as hell micro-apartment apartment buildings?

The difference is that it's a value-creating investment rather than a purely speculative one. If you buy a piece of property for $500K and then build a dozen $300K condos on it, you come out with a sizeable profit, but each of the new residents gets the opportunity to live somewhere for $300K when they would have previously had to compete to pay $500K.

> 2) How do you avoid a race to the bottom in terms of housing quality when you allow said micro-apartments? Do we want a culture where the poor are living in barely livable wage slave pods while the rich are living in abundant villas?

You can't make someone's options worse by adding more of them. If you'd rather keep your existing two hour commute in exchange for a larger living space, that option continues to exist. But if people choose the closer, smaller apartment when given the choice, what does that tell you about whether having that option leaves them better off?

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

#253

Post by kyazawa » Mon, Dec 02, 2019, 7:49 PM UTC

larnmar wrote: post #246

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…

Tokyo has a declining population. When Tokyo’s population was still increasing, housing prices there were ridiculous (there was the 80s factoid about the Imperial Palace grounds being worth more than the entire state of California). If you look at many other major cities in Asia (especially China) you will see a combination of wall-to-wall skyscrapers as desired by yimby (usually really yiseby) types, plus insanely h…

I don't believe this is correct. All the sources I've read say that Tokyo has a growing population.

https://www.japantimes.co.jp/news/2018/07/12/national/japan-...

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

#254

Post by CamperBob2 » Mon, Dec 02, 2019, 7:55 PM UTC

keithnoizu wrote: post #118

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.

What was the FAP? I've never heard of that legislation, and it's obviously ungoogleable.

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

#255

Post by joe_the_user » Mon, Dec 02, 2019, 7:57 PM UTC

jelliclesfarm wrote: post #242

How can we think of housing without considering resource constraints. It’s not just space to build vertically that determines how many homes can be built..it’s traffic, infrastructure, roads, water, power, schools, essential services, public services, public spaces, community amenities..the list goes on. Urban density cannot keep on increasing. You cannot ‘keep on adding homes’. We are already having very high costs…

How can we think of housing without considering resource constraints. It’s not just space to build vertically that determines how many homes can be built..it’s traffic, infrastructure, roads, water, power, schools, essential services, public services, public spaces, community amenities..the list goes on.

High density living is potentially more efficient than low density living (look European or some Asian cities, etc). Indeed, the US model of the low-density mega-city is the thing that has become unsustainable - commuting from city to suburb or suburb-to-suburb involves a huge amount of infrastructure that is simple to build but expensive to maintain.

The problem of the US in particular is that low-density has had the upper hand for so long that efforts to produce sane high density get sabotaged in a variety of ways (look the difference in cost per mile of public transit in the US versus Europe).

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

#256

Post by throwaway34241 » Mon, Dec 02, 2019, 8:02 PM UTC

jelliclesfarm wrote: post #249

I think there has been a very successful diversion of derision towards ‘Americans who own homes’ and ignoring the vast majority of foreigners who own properties(both rent seeking and farmland) in the Bay Area as speculative/investment properties that they have purchased sight unseen. Deriding pensioners on fixed income whose taxes actually built the infrastructure and schools and roads of the Bay Area is shameful..Wh…

What is the cause/effect here? You seem to be laying the blame at foreigners, wall street, etc for causing the housing shortage, but the cause/effect of voters/local governments prohibiting building housing -> housing shortage is pretty straightforward, I don't see why pointing it out should be "shameful".

I don't think homeowners are a unified block on this issue, but specifically the local organizations that put a lot of effort into preventing housing during a serious shortage seem to reasonably deserve some criticism. In the bay area even small proposals (like allowing 1 story of apartments over shops, or some mid-density near transit) often get killed by groups that uniformly oppose all housing.

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

#257

Post by arcticbull » Mon, Dec 02, 2019, 8:16 PM UTC

mywittyname wrote: post #195

arcticbull wrote: post #139

Earlier quoted context omitted.

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 gain…

I believe with proper documentation remediation is tax deductible in that you can raise your cost basis when you sell.

Further, your mortgage interest up to $750K is also tax deductible, and you have to index the whole thing to inflation. Once you do all that the costs are either nominal or negative on a 3.5% 30 year fixed deducted from a Bay Area income. Until Donny took us for a ride property taxes were deductible too.

This is what it looks like when owners vote.

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

#258

Post by sib » Mon, Dec 02, 2019, 8:17 PM UTC

papreclip wrote: post #222

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."

Tokyo is an 845 mi² megacity. Is population growth of 100k/yr something a city should aspire to? At a certain point I feel like some kind of family planning makes sense at larger levels of society just like it does with the family unit. I don't look forward to the day when there are 1000 mi² of concrete and 20M people crammed together where San Diego used to be

Japan overall is in a long-term _negative_ population growth trend, so the Tokyo population growth seems to reflect an in-country geographic shift, rather than a problem with too-permissive family planning.

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

#259

Post by iguy » Mon, Dec 02, 2019, 8:20 PM UTC

alistairSH wrote: post #116

iguy wrote: post #69

Earlier quoted context omitted.

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…

Thanks, yes I'd heard it was more mixed. If you had to guess the proportion of construction which was new floor area (not just building 3 stories, but replacing a 1-story thing, etc.) would this be 10%, 50%, 90%?

(I would blindly guess 90% for the US.)

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

#260

Post by maxsilver » Mon, Dec 02, 2019, 8:24 PM UTC

BurningFrog wrote: post #207

maxsilver wrote: post #137

Earlier quoted context omitted.

> 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…

> Building new luxury housing raises the price for all preexisting nearby housing If this was true, you could create infinite wealth by just building more and more "luxury" housing. You will not find any economist agreeing with this "folk wisdom".

> If this was true, you could create infinite wealth by just building more and more "luxury" housing.

I mean, it works until the bubble bursts. But the last time that happened, the federal government bailed out everyone participating in it -- they carefully re-assembled the bubble, like nothing had ever happened.

So, uh, until federal policy changes, this sort of does just create infinite wealth (on paper, at least).