California’s housing crisis: how a bureaucrat pushed to build • Hacker News Board

Re: California’s housing crisis: how a bureaucrat pushed to build

#501

Post by rcpt » Sat, Feb 15, 2020, 1:03 AM UTC

AnthonyMouse wrote: post #488

SlowRobotAhead wrote: post #439

Earlier quoted context omitted.

Correct, also in the places that the market does not bear it. If your only concept of renting is in the Bay Area or Brooklyn or some high end captive market, you don't really get that you can't always just raise rent until costs are covered. Most of the country won't bear it so the landlord eats it. I have rentals, I know this first hand.

Real estate is one of the most efficient markets. Landlords all over make approximately the same returns as one another, outside of a handful of places where where people are making (or losing) money from speculation. What happens when you increase property taxes is that property values go down to compensate; it's less valuable to own when you have to pay more to do it. So in the short term the property tax increase…

> Landlords all over make approximately the same returns as one another

In California long time landlords get Prop 13 tax cuts. New ones don't. They compete for the same tenants and charge the same rent.

Long time landlords have much bigger profit margins because of that law.

Other states have property tax restrictions but I don't know as much about them.

Re: California’s housing crisis: how a bureaucrat pushed to build

#502

Post by ScottBurson » Sat, Feb 15, 2020, 1:03 AM UTC

buss wrote: post #478

tryitnow wrote: post #469

Earlier quoted context omitted.

I used to be YIMBY, but I doubt more construction would lead to lower costs of living. When I researched this I couldn't find any strong evidence suggesting that more building would lead to more affordable housing. You would think that more construction would lead to more affordable housing, but it seems like more construction doesn't just increase supply, it also increases demand, which can offset any price effects…

There's absolutely zero evidence of "induced demand" for housing. And all available evidence suggests that 1: SF & CA have huge shortages of homes and 2: Building more is a good solution. Please see this non-exhaustive list of things which all show building more housing leads to housing affordability. * http://cityobservatory.org/another-housing-myth-debunked-nei... * https://www.bizjournals.com/sanfrancisco/news/201…

While I vigorously support more construction in the SF metro area, I think expectations need to be set correctly as to the amount of construction required to actually bring prices down, instead of just slowing their rate of increase. It's a lot. I don't recall all the numbers, but I believe I saw something suggesting that we need to increase the rate of housing starts by a factor of 4 just to stabilize prices. To actually bring them down would require even more than that. Again, we should absolutely do it, in my opinion, but if we were to only double construction — difficult as that will already be, politically — and prices didn't plateau, people might conclude that it doesn't work. We need to make sure they know what it's going to take.

It's not so much induced demand as it is pent-up demand. Lots more people would already love to live here — indeed, many have moved away solely because of housing costs.

Re: California’s housing crisis: how a bureaucrat pushed to build

#503

Post by tmh79 » Sat, Feb 15, 2020, 1:03 AM UTC

x0054 wrote: post #440

tmh79 wrote: post #401

Earlier quoted context omitted.

The reason we have a housing crises is because people want high density living. Our market crises is a literal refutation of your proposed solution.

What proof do you have for that? Why isn't it more likely that what people actually want is good paying jobs without having to spend 2 hours in traffic every day? Say you have 2 options, one is to live in a lower density area with plenty of playgrounds for your kids, space to decompress and have fun, and a good paying job that you can do from home or close by. Option two is being shoved like sardines into a 20 story…

"What proof do you have for that?"

rural areas are depopulating and cities/metropolitan areas are rising in both population and inflation adjusted real estate prices, both in the US and around the world.

Say you have 2 options...

This is a false framing. For most, the choice is between lower density area with a long usually car based commute or a higher density area with a shorter non car based commute. Things become more complicated when you have a life partner and you both have jobs, then you need to minimize the commutes while maximizing the job opportunities for both of you, and that happens best within cities.

"shoved like sardines into a 20 story high density apartment building"

this is also false framing. Some of the highest density neighborhoods in the united states are filled with 3 story buildings, like triple decker homes (ex: somerville MA) that are essentially 5k sqft homes 3 story homes subdivided into 3 units, one on each floor.

"What's the point of high density living"

The point of high density living is that it takes you less time to get to the things you want to do, it allows you to live without using a car to get everywhere, it allows for higher specializations of places, ex higher densities can support a niche board game store and gathering place, it allows a higher group of people to live within your commute shed so that you have more opportunities to make friends.

The past 5000 years of human history has included a nearly universal and constant theme of people moving from the countryside to the city. Post WWII America was a slight abberation from that, but we're back on trend like the rest of the world.

Re: California’s housing crisis: how a bureaucrat pushed to build

#504

Post by rcpt » Sat, Feb 15, 2020, 1:06 AM UTC

zhoujianfu wrote: post #351

fra wrote: post #127

Earlier quoted context omitted.

Many of us are homeowners. Speaking for myself, I simply believe affordable housing for all is more important than my property value.

What I don’t get is wouldn’t allowing more development in a neighborhood increase property values? Like if your single family home’s lot gets up zoned, didn’t you just hit the jackpot in terms of the land value?

Why Are There NIMBYs?

https://www.dartmouth.edu/~wfischel/Papers/00-04.PDF

When all your wealth is tied up in a single leveraged asset anything that might lead to a big change in it is more risk than most people will tolerate.

Re: California’s housing crisis: how a bureaucrat pushed to build

#505

Post by rcpt » Sat, Feb 15, 2020, 1:08 AM UTC

dv_dt wrote: post #424

hodgesrm wrote: post #320

Earlier quoted context omitted.

There's resistance to change but economics are far more important and explain the consistent opposition across the state. It's not as simple as sell your house and make a profit, then find something nicer. If your neighbors sell first to the developer of the N-story apartment building it can drop the value of houses around it. Also, buying a house in California resets your property taxes to current property value (a…

How does Prop 13 make it hard to sell your home? It only affects the owners property taxes but not the property buyer's. At the time of purchase, there's no delta to the buyers taxes vs a property that was taxed at a full market rate assessment the whole time.

Lots of detail here: https://www.nber.org/digest/apr05/w11108.html

Re: California’s housing crisis: how a bureaucrat pushed to build

#506

Post by RangerScience » Sat, Feb 15, 2020, 1:10 AM UTC

mlyle wrote: post #313

RangerScience wrote: post #47

Earlier quoted context omitted.

There's good reasons to keep part of it. I figure: You get to have the Prop 13 effect on one property - notionally, your home, but since it's difficult / gameable to determine which place is "your home", fuggedaboutit, and just say "pick one". Because yeah, it'd suck to lose your home that you're supposed to own because your neighborhood got pricey.

Lots of states have regimes where you can defer (often interest-free) the amount of property tax increase above a certain limit to time of sale. This may be a better way to handle it than what California does. That is, if your property tax was $10,000 last year when you bought, and would increase to $12,000 this year, the state would give you an indefinite, interest free loan for $1500 or whatever secured by the prop…

Hmm. I like the sentiment, but I'd be worried about the implementation (sounds like complex tax math) and with potential downsides (make less money when selling could lead to selling less; I can imagine a housing bubble popping and you end up under water due to owed taxes when the property was worth more).

Although, if other states do it, should be data to talk to those predictions...

Re: California’s housing crisis: how a bureaucrat pushed to build

#507

Post by tmh79 » Sat, Feb 15, 2020, 1:10 AM UTC

6gvONxR4sf7o wrote: post #476

tmh79 wrote: post #397

Earlier quoted context omitted.

If you look at the data for SF, 95% of brand new units are first occupied by people who have lived here for a at least a few years. New housing serves people who are already here. What causes people to migrate to the bay is the office creation, not the housing creation.

That logic doesn't work. 95% of new units going to existing residents doesn't mean that if I built 100 new units, I only get 5 new houses. Those 95% who move to new units leave their old local places open, which in turn go to god knows where.

There is a natural population growth in the bay area from people having and raising children here. Our housing growth rate is slower than the rate of children coming of age. The unoccupied units that current residents are moving into can theoretically be occupied by the children of the current residents as they come of age.

Re: California’s housing crisis: how a bureaucrat pushed to build

#508

Post by mateo411 » Sat, Feb 15, 2020, 1:14 AM UTC

wbronitsky wrote: post #59

mateo411 wrote: post #53

Earlier quoted context omitted.

> When you bought a house back in 2008 for $300k and now its worth $2M Do you have any examples of this? The Bay Area housing market has had a nice run, but it hasn't grow 666% percent in the last 12 years.

FWIW, Personal anecdote: My parents bought a house on the Peninsula in the SF Bay Area for $500k in 2000 and it is now worth at least $2m.

True, but that's 400% over a longer time period.

Re: California’s housing crisis: how a bureaucrat pushed to build

#509

Post by dang » Sat, Feb 15, 2020, 1:15 AM UTC

marknutter wrote: post #279

hannasanarion wrote: post #253

Earlier quoted context omitted.

You are absolutely correct that the root cause of the housing crisis is capitalism and the commodification of housing. However, a socialist restructuring of the entire housing market is not likely to happen any time soon. While we wait for the revolution, we might as well encourage the for-profit developers to build in the least destructive ways, so that less people suffer in the short term from the choked supply and…

[flagged]

Please don't take HN threads further into ideological flamewar. The GP comment shouldn't have been flamebaity, but not taking the bait is actually more important.

https://news.ycombinator.com/newsguidelines.html

Re: California’s housing crisis: how a bureaucrat pushed to build

#510

Post by zhirafovod » Sat, Feb 15, 2020, 1:16 AM UTC

Housing:

* European way - build centrally design urban cities, with infrastructure, schools, public transportation, community spaces, recreation/business spaces.

* American way - let for-profit developers build luxury houses around enormous google/fb/other tech giant campuses, and let struggling communities to figure out how to live with it...

Medical care:

* European way - build an efficient medical system which is paid by taxes, affordable to everyone.

* American way - let medical system to be a for profit business and put a burden of medical insurance for all on the medium income population and let them figure it out

Good news on the housing - the companies reached the plato of the salaries for the bay area employees and many actively moving to the other urban areas which should spread the stress from the bay area. Its is 21st century, and if a company can't establish an effective distributed collaboration processes, it does not deserve to be a leader in high tech space.