Why Can't We Build an Affordable House?

I read so much about this during my Masters of Urban Planning and he's spot on. Getting land approved for development is costly, time consuming, and uncertain. This leads to lower supply, and since housing is fairly inelastic, it has consumed an increasing share of domestic income.

Here are some more points:

- building restrictions are overturned or overruled, but only after expensive lawsuits. These are impossible for small builders to do but routine for large builders. They are also better financed and more experienced than the municipalities they are suing, so they eventually win after several years and millions of dollars.

- With or without a lawsuit, it's easier to build get bigger houses on bigger lots approved. That's fine for the builder - all they need is an ROI - but it eliminates the low-end option.

- People move often so resale value is a very high priority, especially for first time buyers. I live in the suburbs and would love to have a condo, but I would never want to try to sell a condo in the suburbs so I bought a house instead. Condos and townhouses are cheaper and would serve many people's needs better, but these are marginal properties that will suffer most in a down market.

- External factors (proximity to transit, good public schools, proximity to workplaces, etc) reduce total cost of living and increase home prices by roughly the same amount. In Chicago suburbs, Naperville has excellent schools, Aurora not so much. Identical houses across the school district boundary are over $100K different. Being close enough to walk to transit saves (at least) $40/mo on parking but more like $100 when you include gas,etc, which corresponds to about $10-15K in house prices. But it saves time, which can be valued very highly, so a house 1/3 mile from a commuter rail station would cost $75-150K more than a house a mile from the station. (probably a bigger deal in Chicago/NYC/Boston more than anywhere else). Ditto if you don't need private schools.

- As supply goes down (or grows slowly), houses are competing for a smaller slice of the upper end of buyers. If only the top 50% of potential buyers can afford a house, the needs of the bottom 50% are ignored. If only the top 10% can afford it, the bottom 90% are ignored. So if most potential buyers are DINKs (dual income, no kids), then new construction will be 1-2BR condos/townhomes, with very few 3BR. The 3BR units will be much more expensive both because they are larger but also rarer. If most buyers are families, the sizes might start at 3BR and go up and there probably won't be any 1-2BR at any price.

Obsoletion doesn't come from nowhere. What's the problem with current LAN-cabling that warrants the coming of a new network technology? Yeah, wireless, but it's still nice to have some places to easily plug in the access points.

Pairs of copper wire is, if anything, a proven technology. And it's not like we're anywhere near pushing the limit of Ethernet technology for domestic purposes.

Even if a new technology will come along, the fact that entire cites are wired from top to bottom with cat-5, you're guaranteed that any new technology wil be heavily biased towards backwards compability on the physical layer.

The whole article is based on the failed idea that the burbs are the way to go. Many people who have read A Pattern Language understand that the neighborhood is also key, though they often can't realize it alone, so they instead build really fancy and eclectic single-family two-story homes, (how novel /sarcasm).

I would be interested in connecting with more people who understand and want to realize Christopher Alexander's ideas, and encourage anyone who reads Hacker News to get A Pattern Language. It's not really made to be a straight read. It's more like a library of architectural functions with comments on how to apply them. Good to have at hand. The problem is that to fully realize what is clearly a better solution than the burbs, you would need to collaborate with dozens of other people, who all understand the ideas.

Here's a couple of starting points for those unfamiliar with the architectural ideas:

http://www.livingneighborhoods.org/

https://www.patternlanguage.com/

The house I live in was built 120 years ago. Wanna bet that Cat-5 will still be around several decades from now?

It is technically true that the terms don't change when the house value changes, but it is misleading to suggest that house value doesn't affect affordability.

The distinguishing feature of most subprime loans is that the interest rate changes after a few years. A typical subprime loan could be 3 years at 8%, then 27 years at 12%. The assumption (made by bankers to justify the subprime model) was that after paying lower prices for a few years, the borrower would have some equity built up in the house, so they would be a better credit risk, and they could refinance at that point for a lower rate.

But, when housing prices dropped, many of these houses were now worth less than the outstanding amount on the mortgage, even after a few years of paying down the loan. So the plan of refinancing after a few years didn't work any more.

Basically, it is easier to afford a house if it maintains its value after you buy it, because the equity gives you more flexibility in refinancing.

Sorry if this is too boring ;-) But if you are curious to read more about the particular characteristics of subprime mortgages I recommend this paper -

http://www.kc.frb.org/publicat/sympos/2008/Gorton.08.04.08.p...