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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

#261

Post by giggles_giggles »

lukifer wrote: post #225
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…

> It's time to re-think the idea of housing as an "investment." Shameless policy plug: part of the reason that property tends to be a good investment is that a significant portion of its value derives not from improvements, but from "location, location, location": proximity to businesses and community services. Some economists (Henry George, Milton Friedman) have advocated shifting property tax to be based on the uni…

I like the idea of a land value tax more than a property tax, but I feel like I'm missing something. If I sit on an empty lot while the city builds up around me, doesn't the unimproved value of my land still go up?

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

#262

Post by arcticbull »

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…

Or interest tax deductions, property tax deductions and the fact any renovations you do can be used to raise your cost basis to offset some of those gains. Also your mortgage inflates away over time too.

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

#263

Post by maxsilver »

Nasrudith wrote: post #190
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…

Gentrification is perfectly possible without new construction. Boston found apparently that luxury condos had a containing effect on gentrification overall - they reduced demand for other areas. Also wouldn't it be authentic inflation of value? The tax bill objection also strikes me as odd given that it is synonymous with a windfall to owners - the renters it makes perfect sense for.

> synonymous with a windfall to owners

It's not. It's just inflation. If I double your salary, but jack the price of everything up 50%, you "got a windfall", but have in real-world dollars earned nothing.

If you own a house worth $100k, but a luxury condo goes up next door full of $600k/each units, and your old house is now "worth" $300k, have you really gotten a windfall?

You still need somewhere to live, the windfall doesn't cover even half the new cost of housing. You could sell it, but there's no where safe for you to land nearby without doubling your mortgage (since your house went up, all nearby ones did too), and paying the extra on your mortgage just to remain housed is a destruction of wealth, not a windfall. You could get a home equity loan out of the new equity, but you'd just have to pay that all back with interest.

It's technically a "windfall" on paper, but it's mostly fake wealth. You are now liable for this "windfall" and owe taxes on it anyway, despite it the fact that it's never physically existed in the real world, and is mostly unusable (except for a few specific scenarios, like cashing out your home to Gentrify some other poorer people out of their homes, in some other different place)

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

#264

Post by Kalium »

telchar wrote: post #215
treis wrote: post #143

Earlier quoted context omitted.

A full appliance package can be bought for under 2 grand retail. You can save a little bit of labor/material by eliminating the need for a couple circuits, but not that much. Not much extra work to pull additional wires if you already have to do one. So the savings just aren't there to meaningfully impact the housing cost.

You're talking out of both sides of your mouth here. You say that kitchens and bathrooms are the "big cost items" yet here you say that omitting or scaling them back doesn't save much. How can both things be true?

Appliances are cheap-ish. The structure and space for extra bathrooms or a full kitchen are much more expensive than a full appliance package.

So you can save money - but not much - by not having full appliances. You can save a lot more by not building a full kitchen and a second bathroom.

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

#265

Post by nybble41 »

giggles_giggles wrote: post #261
lukifer wrote: post #225

Earlier quoted context omitted.

> It's time to re-think the idea of housing as an "investment." Shameless policy plug: part of the reason that property tends to be a good investment is that a significant portion of its value derives not from improvements, but from "location, location, location": proximity to businesses and community services. Some economists (Henry George, Milton Friedman) have advocated shifting property tax to be based on the uni…

I like the idea of a land value tax more than a property tax, but I feel like I'm missing something. If I sit on an empty lot while the city builds up around me, doesn't the unimproved value of my land still go up?

Yes, exactly. A land value tax is not actually a tax on the land but rather a tax on improvements people have made in the area around the land. Literally unimproved land has no value to tax.

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

#266

Post by dmix »

ogre_codes wrote: post #234
rch wrote: post #185

Earlier quoted context omitted.

It's worth noting that some of the groups you mention are motivated by a general opposition to rent seeking developers, and would be perfectly amenable to a 6 unit resident-owned coop in the same location.

Nobody ever says "I just don't want a new housing unit there". Every single one of those groups has some kind of justification for why they don't want new housing near where they are. Some say it's to prevent "Rent Seeking Developers", some say it's to improve the quality of local parks, sometimes it's because the unit they are replacing adds some "special character" to their block. In the end though they all have th…

A big one is they don't want additional underground parking in their neighbourhood which means more cars. Of course cars are evil and they should not exist or be in someone else neighbourhood, parked along side-streets next to bike lanes.

Better yet keep those cars in the suburbs! But also suburbs are lame and we make fun of them (I would never be caught living there!). But yeah back to why I dont want more housing downtown... /s

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

#267

Post by [deleted] »

slg wrote: post #141
treis wrote: post #113

Earlier quoted context omitted.

>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 popula…

>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…

[deleted]

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

#268

Post by danans »

earlINmeyerkeg wrote: post #145

The reason midwestern cities hardly have housing bubbles like the coastal areas do is because old housing is cheap and competes with renting. Landlords can't afford to not be lenient. Although the only change I wish to see is that tenants could more easily enforce their rights and Landlords had to follow the law. Most midwestern state governments are very laissez faire about the whole thing which is incredibly annoyi…

> The reason midwestern cities hardly have housing bubbles like the coastal areas do is because old housing is cheap and competes with renting.

Sure, but isn't the reason that housing is cheaper because those cities don't have anywhere near the level of demand that coastal cities have.

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

#269

Post by Dylan16807 »

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'…

>> At least the poor would have the choice between the barely livable pod in downtown, or a house 2 hours commute away.

> You don't really save all that much money by building a barely livable pod vs an actual apartment.

Okay, so build normal size apartments then. Even if it's the same price as a house 2-3 hours away, you're removing 3-6 hours of commute time.

The important part is splitting land costs over tens of units instead of just one or two, not exactly how many tens.

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

#270

Post by giggles_giggles »

nybble41 wrote: post #265
giggles_giggles wrote: post #261

Earlier quoted context omitted.

I like the idea of a land value tax more than a property tax, but I feel like I'm missing something. If I sit on an empty lot while the city builds up around me, doesn't the unimproved value of my land still go up?

Yes, exactly. A land value tax is not actually a tax on the land but rather a tax on improvements people have made in the area around the land. Literally unimproved land has no value to tax.

Then I feel like I really must be dense. Doesn't this mean that there's still an incentive to hoard land while nearby land is improved, so that you can sell at a profit? And if that's the case, for the purpose of dissuading land hoarding and encouraging building housing how is a land value tax functionally different from a property tax? In both cases if you have an empty lot in an area that gets built up, you make a big unearned profit, right?
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