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The housing market needs more condos

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Re: The housing market needs more condos

#131

Post by DoingIsLearning »

Wonnk13 wrote: post #46

I'm in the process of moving to Boston and it's utter insanity. Housing here is like something out of Kafka novel. Now I empathize with my friends who lived in SF pre-covid. Build, Build, Build!! I do think it's important now more than ever with remote work to build more duplex / 3 bedroom condos. I'm 33 and I have no desire to move out to the burbs, but marrying and starting a family in a 2 bedroom condo isn't total…

> starting a family in a 2 bedroom condo isn't totally appealing to me.

I think the main issue is not the condo itself but where the condo is.

From my experience living in an apartment but with walkable area around me and several large parks within walking distance felt very much equivalent in life quality than now living in a house with a garden. If anything large park areas are usually a lot more interesting for kids than your garden.

I do think urban planning should incentivize "village" building. For x square meters of construction you must build y square meters of green spaces and z square meters of local commerce. Otherwise you just get Truman show suburbs.

Re: The housing market needs more condos

#132

Post by nly »

jopython wrote: post #92
whiddershins wrote: post #27

Any housing you purchase but has a HOA is suboptimal, in my opinion. Once you have an HOA you don’t own your home in the way you would otherwise. At that point I would start doing the math carefully about buying versus rent + investing. Renting has the huge luxury of being able to leave with minimal hassle, and not deal with any maintenance.

The math is clear. You don't gain any equity by paying rent.

The math is far from simple.

Let's say you have a 3% mortgage and the interest component on your loan is 20% lower than the rent you're paying on a similar property.

Sounds like a no brainer, until you consider the opportunity cost of carrying the repayment part. It's earning (really saving) you 3%/yr instead of the 5-10% you could earn long term in the stock market.

Sure if house prices rise just 1% a year, the equity you're building is nice, but that is not guaranteed going forward, especially when you're buying in to an area where median house prices could already be 10x median earnings.

Re: The housing market needs more condos

#133

Post by trinovantes »

pydry wrote: post #129
trinovantes wrote: post #102

The housing market needs to deregulate zoning and let the free market decide what gets built Not everyone wants to chose between a 2000sqft McMansion or a 500sqft shoebox in the sky

The problem is that free market is deciding and it's deciding that returns on providing stores of wealth to the very, very, very rich are greatest and as such that crowds out investment in places to actually....live. If you're looking for a wealth store fungibility is a net positive. McMansions and standardized condos are known quantities that can be valued accordingly.

The free market is simply reacting to the artificial scarcity caused by zoning laws, which is the exact opposite of a free market

Make it legal to build more supply then speculation will move onto other assets

Re: The housing market needs more condos

#134

Post by pydry »

trinovantes wrote: post #133
pydry wrote: post #129

Earlier quoted context omitted.

The problem is that free market is deciding and it's deciding that returns on providing stores of wealth to the very, very, very rich are greatest and as such that crowds out investment in places to actually....live. If you're looking for a wealth store fungibility is a net positive. McMansions and standardized condos are known quantities that can be valued accordingly.

The free market is simply reacting to the artificial scarcity caused by zoning laws, which is the exact opposite of a free market Make it legal to build more supply then speculation will move onto other assets

The scarcity is driven by land being untaxed. There is very little cost any more to treating property as a bitcoin-like store of wealth. This is partly why there 1.5 million empty homes - 3x the number of homeless.

China has a similar problem which is why it has ghost cities - thats where the hoarding instinct channeled wealth.

Zoning laws are a red herring. They're the worst enemy of the property developer building yet more luxury condos to be shoved into a hedge fund's real estate portfolio but they dont address the underlying cause of not enough property.

We hear about it a lot because property developers have lots of money a significant financial incentive to drive public opinion, but that doesnt make it true.

Drive up either property taxes or institute a land value tax and the instinct to hoard property as a bitcoin like store of wealth will collapse, freeing up land for real people to live on.

Re: The housing market needs more condos

#135

Post by seanmcdirmid »

likpok wrote: post #118
seanmcdirmid wrote: post #103

Earlier quoted context omitted.

> Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see plenty more condos. This happens in Japan, but happens mainly as a result of: a. No one sees real estate as a sure shot after the excess of the 80s. b. Declining population means even Tokyo has a lot of extra housing. c. It is easy to rebuild housing, so people rarely buy "used" homes, leaving on the…

Tokyo’s population has constantly risen, even as japan’s has fallen. Tokyo has inexpensive housing because they’ve allowed people to build it. You can compare the chart of new housing growth in Tokyo versus Paris, London and NY, and Tokyo blows them out of the water.

Yes, but not explosively so, and increasing density of built structures means prices haven’t really risen much.

Don’t count new housing growth in Tokyo if you aren’t counting housing destruction as well, otherwise the numbers aren’t comparable to other cities (where new housing usually means “new” housing, not just rebuilt housing).

Re: The housing market needs more condos

#136

Post by seanmcdirmid »

aaomidi wrote: post #115
seanmcdirmid wrote: post #107

Earlier quoted context omitted.

Considering china is still very rural that doesn’t seem surprising. But China is still in their 1980s Japan phase where real estate in Shanghai is worth more than all of California.

China just builds out entire cities years before they're necessary.

Yes, and often those cities will be torn down before they are actually used. It’s all good: turns out demolition also counts as positive GDP in their statistics.

Re: The housing market needs more condos

#137

Post by notfromhere »

sidlls wrote: post #73
neelc wrote: post #64

Earlier quoted context omitted.

Unpopular opinion: IMHO single family homes are an idea whose time passed, at least in big urban areas. While the "American Dream" is to own a home with a backyard, it is logically easier if everyone lived in highrise condos and apartments in urban areas. Homes would be cheaper, since you could scale up and not just out (e.g. avoid urban sprawl). Not to mention lower gas costs and we don't need to cut down as many tr…

Almost nobody, having had the pleasure of living in even a modest SFH, would prefer to be packed in like sardines the way modern high-rise buildings do. It's possible to make high density housing that doesn't feel like that, but it's not as profitable so developers don't. That's why the vast majority of high-rise condos are one and two bedroom shoeboxes instead of spacious three (or more) bedroom homes. We won't get…

You could just do a lot of 4-5 story buildings like in Paris. Building up too high has its downsides because it requires more space on the ground, plus a good percentage of space (30-40%) in a high-rise isn't actually usable living space.

Most places don't need high-rise condos everywhere when low-rise condos in a dense neighborhood orientation would work out great.

Re: The housing market needs more condos

#138

Post by notfromhere »

nly wrote: post #132
jopython wrote: post #92

Earlier quoted context omitted.

The math is clear. You don't gain any equity by paying rent.

The math is far from simple. Let's say you have a 3% mortgage and the interest component on your loan is 20% lower than the rent you're paying on a similar property. Sounds like a no brainer, until you consider the opportunity cost of carrying the repayment part. It's earning (really saving) you 3%/yr instead of the 5-10% you could earn long term in the stock market. Sure if house prices rise just 1% a year, the equi…

Most people are bad at saving and investing, so housing acts like a forced savings account.

People won't be investing the difference between rent and their mortgage, they'll be using it for other expenses. Especially for anyone that's at the median or below, you're not making enough to actually save much, so the mechanism here is effective.

The most important thing is that a mortgaged house is a hedge against rent inflation, as it locks in a flat housing payment for the next 30 years. Then when you're paid off and you retire , you only have to worry about maintenance + property tax, which is cheaper than the mortgage ever was.

Re: The housing market needs more condos

#139

Post by dec0dedab0de »

brewdad wrote: post #108
dec0dedab0de wrote: post #81

Earlier quoted context omitted.

I would call those townhouses, it's probably just a regional thing. The row houses I'm thinking about are in Philadelphia, and I think most other east coast cities. Occasionally you'll see one with the neighboring house(es) demolished, and there are usually remaining bricks from the missing house on the now exterior wall.

Has anyone built a new rowhouse, like those in Philly, since the end of WWII? Serious question. I don't think they are allowed anywhere in the US anymore. Existing ones are grandfathered in.

I just googled and found new rowhouses, and soon to be built ones in Philly. The style seems to be more modern, but the basic idea is the same.

Re: The housing market needs more condos

#140

Post by pandaman »

matsemann wrote: post #45

Lots of FUD in this thread, but I guess it depends on where one lives? My experience with things mentioned here: My condo is noiseless. The codes in my country are strict on this. I got families with children all around me, only hear them when sitting on my balcony during summer. And codes in general makes sure that buying a modern condo is safe. Here it's 5 years where the builder has to fix stuff that's not as it s…

>Can't see why a condo inherently should appreciate less than a house?

People shop for monthly payment and not for the sticker price. On a condo the payment includes the HOA fee so for the same monthly payment you can get a more expensive house than a condo. As the property grows older and becomes more expensive to maintain, the HOA fees raise to reflect this and that reflects on the appreciation speed too.

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