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Change my mind: Density increases local but decreases global prices

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Re: Change my mind: Density increases local but decreases global prices

#31

Post by tivert »

lukasb wrote: post #7
endisneigh wrote: post #4

Earlier quoted context omitted.

> Very dense, but housing prices are very affordable it's not, though. Tokyo is substantially more expensive than other cities in Japan. Tokyo is also more expensive than American cities when adjusted to per sq/ft rent and PPP. "Tokyo is so cheap" is a meme at this point. Tokyo is cheap the same way having roommates is cheap (roommates are much, much rarer in Tokyo compared to NYC).

But Tokyo has accommodated growth without rent increasing significantly. No US city can say the same (edit: zip1234 proves me wrong below.)

> But Tokyo has accommodated growth without rent increasing significantly. No US city can say the same.

Isn't Tokyo famous for stuff like tiny, tiny microapartments? Are the rent increases comparisons you allude to measured per apartment or per square foot?

Re: Change my mind: Density increases local but decreases global prices

#32

Post by endisneigh »

s1artibartfast wrote: post #28
endisneigh wrote: post #11

Earlier quoted context omitted.

I am not against building more. I am simply saying that if you look at the data, there is no evidence what so ever that building more decreases the price of housing. What it does is slow the price increases, but the very demand that is driving price increases was generated by the density, that is exacerbated by building more. We need a better metric. If you have some number to describe the quality of a city, perhaps…

Density doesn't drive price. Nobody pays more for "density". Density and price are both simply measures that track other desirable factors like jobs. It is correlation, not causation.

agreed that it's correlation. however that's all you're going to get. no one is going to run a city wide experiment in this way. however if you look at the trend it's clear that cities have seen higher median price increases than suburbs. you can search yourself.

Re: Change my mind: Density increases local but decreases global prices

#33

Post by engineer_22 »

hnboredhn wrote: post #18

Isn't the obvious arrow here that high prices drives density? The fact that NYC is the densest and most expensive seems to be an obvious story of high prices incentivizing people to build up. The question is whether or not an old building being replaced by a tower or a single family house will lead to more expensive housing throughout the city. I still am confused as to how density would hurt locally here.

I hadn't thought of it like this before, but I think he's arguing that there is a network effect. High density is more convenient, which induces demand.

Re: Change my mind: Density increases local but decreases global prices

#34

Post by nomel »

cammikebrown wrote: post #17
colinsane wrote: post #10

Earlier quoted context omitted.

“Tokyo is cheap” is a new phrase to my ears. i’m more familiar with the meme of people posting 150sqft closets and saying “i wouldn’t live anywhere else, even if the rent was half the $2000/mo i pay now”. truth looks to be somewhere in the middle, but interesting how the polar opposites can exist so close to each other.

The average apartment in Tokyo is small, but under $1,000 USD/month.

what's the average income? Affordable isn't $.

Re: Change my mind: Density increases local but decreases global prices

#35

Post by zip1234 »

endisneigh wrote: post #8
lukasb wrote: post #7

Earlier quoted context omitted.

But Tokyo has accommodated growth without rent increasing significantly. No US city can say the same (edit: zip1234 proves me wrong below.)

Tokyo, and Japan, is a stagnant nation population wise and GDP wise. Not sure why people even bother using it as an example. Look no further than the USD:YEN conversion. funny how no one can cite any other city. if the theory was true there should be dozens of examples.

Tokyo's population has grown while prices for housing have remained constant. For another example of building more housing keeping prices down, look at Houston. https://fee.org/articles/how-spontaneous-order-keeps-houston...

Re: Change my mind: Density increases local but decreases global prices

#36

Post by endisneigh »

zip1234 wrote: post #35
endisneigh wrote: post #8

Earlier quoted context omitted.

Tokyo, and Japan, is a stagnant nation population wise and GDP wise. Not sure why people even bother using it as an example. Look no further than the USD:YEN conversion. funny how no one can cite any other city. if the theory was true there should be dozens of examples.

Tokyo's population has grown while prices for housing have remained constant. For another example of building more housing keeping prices down, look at Houston. https://fee.org/articles/how-spontaneous-order-keeps-houston...

the assertion is that building more reduces prices, not merely keeps them the same, though. and it's complicated to say that tokyo population has grown while prices for houses remain constant. what has happened to the other areas? how has the median wage changed?

Re: Change my mind: Density increases local but decreases global prices

#37

Post by zip1234 »

endisneigh wrote: post #11
konschubert wrote: post #6

Earlier quoted context omitted.

Even if it didn’t slow the price increases - just the fact that building more housing means that more people get to live where they want to live- isn’t that a good thing and enough reason to build? And as you said, the neighbourhood gets improved - isn’t that a good thing? Or are you saying that the solution to the housing crisis is to make cities as inhospitable as possible such that people are forced to live in the…

I am not against building more. I am simply saying that if you look at the data, there is no evidence what so ever that building more decreases the price of housing. What it does is slow the price increases, but the very demand that is driving price increases was generated by the density, that is exacerbated by building more. We need a better metric. If you have some number to describe the quality of a city, perhaps…

There is very much evidence that building more housing decreases the price of housing. I'm not sure why you think there isn't. https://www.upjohn.org/research-highlights/new-construction-...

Re: Change my mind: Density increases local but decreases global prices

#38

Post by Panzer04 »

nullc wrote: post #29

Why is it that many of the same people who argue against more roads and more parking lots on the basis of induced demand preventing more roads from meaningfully solving congestion seem to think that in the densest and most competitive cities that adding units will necessarily make hosing affordable?

Because the characteristics are different. Denser housing is very efficient, in the sense that it requires less infrastructure spend. Roads are just not very efficient - you need to spend a lot of money to get the same result as a transit line etc (and that’s after ignoring the fact that roads have lots of other expenses to the user that transit does not).

People want to live in dense, well-serviced cities, and they actually pay for the privilege of doing so. Not so much for roads, unless it’s a toll road.

Re: Change my mind: Density increases local but decreases global prices

#39

Post by endisneigh »

zip1234 wrote: post #37
endisneigh wrote: post #11

Earlier quoted context omitted.

I am not against building more. I am simply saying that if you look at the data, there is no evidence what so ever that building more decreases the price of housing. What it does is slow the price increases, but the very demand that is driving price increases was generated by the density, that is exacerbated by building more. We need a better metric. If you have some number to describe the quality of a city, perhaps…

There is very much evidence that building more housing decreases the price of housing. I'm not sure why you think there isn't. https://www.upjohn.org/research-highlights/new-construction-...

then why are the places with the most units the most expensive? the research seems bad - they use a simulation, not actual data.

Re: Change my mind: Density increases local but decreases global prices

#40

Post by crooked-v »

endisneigh wrote: post #36
zip1234 wrote: post #35

Earlier quoted context omitted.

Tokyo's population has grown while prices for housing have remained constant. For another example of building more housing keeping prices down, look at Houston. https://fee.org/articles/how-spontaneous-order-keeps-houston...

the assertion is that building more reduces prices, not merely keeps them the same, though. and it's complicated to say that tokyo population has grown while prices for houses remain constant. what has happened to the other areas? how has the median wage changed?

> the assertion is that building more reduces prices, not merely keeps them the same, though

Building more reduces prices below what they would have been if that building didn't happen.

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