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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

#131

Post by ethanbond »

renewiltord wrote: post #89
jltsiren wrote: post #76

Earlier quoted context omitted.

Either those numbers are obvious nonsense, or this is yet another way California is dysfunctional. In Finland, a typical 8-story midrise is ~50% more expensive to build (per square meter) than a typical single-family home. Construction costs only start rising significantly after 10-12 stories.

It is an American characteristic. Many more things are possible in this world than are possible in America but to Americans they seem like immutable characteristics rather than the result of choices. Mostly, it is regulation. Example of something is the two staircase rule for buildings.

Mostly it is zoning which is largely pushed by NIMBYs who are trying to protect their real estate investments.

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

#132

Post by lumb63 »

joshlemer wrote: post #85
somenameforme wrote: post #81

Earlier quoted context omitted.

People generally don't seem to be aware of Japan's economic state. Here are some relevant data: Graph of Japanese Stock Market: https://www.macrotrends.net/2593/nikkei-225-index-historical... Graph of Japan's Population: https://tradingeconomics.com/japan/population Graph of Tokyo's Population: https://www.macrotrends.net/cities/21671/tokyo/population Average Salary in Tokyo: https://www.timedoctor.com/blog/average-s…

I personally don't think it's such a bad thing if our population stays stable rather than increasing, even small decline I don't think is such a bad thing.

The big issue IMO with a declining population is a lot of our economic structure here in America is built on the assumption growth is infinite.

Social security would be insolvent if not enough people paid in to fund those being paid out. Stock prices and home prices would decrease as well. Debt would become more expensive since there would be fewer people to pay it back.

Because assets are priced based on their future value, growth is a huge component of the prices assets. The value of most everything in our society is predicated on that rate of growth.

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

#133

Post by seanhunter »

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.

Yes exactly it is obvious. The article attempts to address this by saying this effect is not the full story, which seems highly unconvincing to me. His argument is stripped of density, Manhattan is just another island like lots of islands in Maine that didn’t end up having very expensive real estate. But firstly lots of islands (eg Martha’s Harbour, Long Island, which isn’t really an island but close enough) in the area are significantly less dense and have very expensive real estate so I don’t think that argument bears any scrutiny at all.

In general his thought experiments with data in the article just seem completely handwavy. “Imagine if I added 5x more houses to Oakland”. Well we can imagine that but we would likely be wrong about what would happen so it didn’t prove anything. Besides anything the most likely outcome would be you would have a lot of empty houses.

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

#134

Post by ghaff »

renewiltord wrote: post #89
jltsiren wrote: post #76

Earlier quoted context omitted.

Either those numbers are obvious nonsense, or this is yet another way California is dysfunctional. In Finland, a typical 8-story midrise is ~50% more expensive to build (per square meter) than a typical single-family home. Construction costs only start rising significantly after 10-12 stories.

It is an American characteristic. Many more things are possible in this world than are possible in America but to Americans they seem like immutable characteristics rather than the result of choices. Mostly, it is regulation. Example of something is the two staircase rule for buildings.

That sounds like a very reasonable regulation to me. I couldn't tell you how regulations pencil out in general for taller buildings but the higher you go, the higher the percentage of the floor plan consumed by things like elevators.

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

#135

Post by floatrock »

lumb63 wrote: post #132
joshlemer wrote: post #85

Earlier quoted context omitted.

I personally don't think it's such a bad thing if our population stays stable rather than increasing, even small decline I don't think is such a bad thing.

The big issue IMO with a declining population is a lot of our economic structure here in America is built on the assumption growth is infinite. Social security would be insolvent if not enough people paid in to fund those being paid out. Stock prices and home prices would decrease as well. Debt would become more expensive since there would be fewer people to pay it back. Because assets are priced based on their futur…

Well when you put it that way, it kinda sounds like you're describing a ponzi scheme.

What happens when this infinite growth starts to run up against finite planetary boundaries?

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

#136

Post by imtringued »

lumb63 wrote: post #132
joshlemer wrote: post #85

Earlier quoted context omitted.

I personally don't think it's such a bad thing if our population stays stable rather than increasing, even small decline I don't think is such a bad thing.

The big issue IMO with a declining population is a lot of our economic structure here in America is built on the assumption growth is infinite. Social security would be insolvent if not enough people paid in to fund those being paid out. Stock prices and home prices would decrease as well. Debt would become more expensive since there would be fewer people to pay it back. Because assets are priced based on their futur…

Also most economists make assumptions of endless economic growth. Especially the Austrian Economists with their pure time preference theory implicitly assume endless growth as pure time preference makes no sense in an economy that is stagnating or shrinking. Why would patience be rewarded in the future if the future will be worse?

A lot of the foundations of economics fall apart once you assume logistic growth.

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

#137

Post by imtringued »

floatrock wrote: post #135
lumb63 wrote: post #132

Earlier quoted context omitted.

The big issue IMO with a declining population is a lot of our economic structure here in America is built on the assumption growth is infinite. Social security would be insolvent if not enough people paid in to fund those being paid out. Stock prices and home prices would decrease as well. Debt would become more expensive since there would be fewer people to pay it back. Because assets are priced based on their futur…

Well when you put it that way, it kinda sounds like you're describing a ponzi scheme. What happens when this infinite growth starts to run up against finite planetary boundaries?

You start a world war to reset the board game.

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

#138

Post by spacebanana7 »

seanhunter wrote: post #133
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.

Yes exactly it is obvious. The article attempts to address this by saying this effect is not the full story, which seems highly unconvincing to me. His argument is stripped of density, Manhattan is just another island like lots of islands in Maine that didn’t end up having very expensive real estate. But firstly lots of islands (eg Martha’s Harbour, Long Island, which isn’t really an island but close enough) in the a…

> But firstly lots of islands (eg Martha’s Harbour, Long Island, which isn’t really an island but close enough) in the area are significantly less dense and have very expensive real estate so I don’t think that argument bears any scrutiny at all.

This really depends on how you measure real estate prices. Long Island can have very low price per square foot of ground land compared to Manhattan, even if the unit price of housing or price per square foot of interior space is similar.

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

#139

Post by ghaff »

seanhunter wrote: post #133
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.

Yes exactly it is obvious. The article attempts to address this by saying this effect is not the full story, which seems highly unconvincing to me. His argument is stripped of density, Manhattan is just another island like lots of islands in Maine that didn’t end up having very expensive real estate. But firstly lots of islands (eg Martha’s Harbour, Long Island, which isn’t really an island but close enough) in the a…

Typically the building of housing and the use of land in fairly exclusive resort/beach/etc. communities is very tightly controlled. People in the Hamptons on the weekends don't want it to be another Manhattan. They already probably have a condo in Manhattan. Some real estate is desirable because of location (often beach/mountains) and community exclusivity--and often some degree of accessibility to wealthy population centers. (As you go up the Maine coast waterfront property is not necessarily outrageously expensive.)

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

#140

Post by spacebanana7 »

chii wrote: post #78
antognini wrote: post #75

I feel like this (along with many discussions about urban housing) slightly misses the real issue. A lot of these discussions center around how to make housing affordable in cities and whether denser construction leads to lower housing costs or higher housing costs. But cities don't exist to minimize housing costs. They exist to maximize opportunities: job opportunities, dating opportunities, friendship opportunities…

I think you got it the wrong way around - cities _form_ around opportunities, rather than produce them. Initially, geographic advantage (such as being near harbour, river, or some other geographic feature) gives a settlement that's not yet a city a big advantage in attracting more people there. This in turn, forces the city to grow as more people cram in. To artificially build denser by policy doesn't produce opportu…

> To artificially build denser by policy doesn't produce opportunities - those opportunities would have to be there first!

Density is an effective way of substituting for transport speed, which is the binding constraint on many opportunities.

The number of coffee shops I can choose to visit on my 15 minute break after stand up is limited by the density of the urban environment, for a given mode of transport.

Many public, private and social enterprises have this dynamic. A police station needs to be within a certain travel distance of the outskirts of their community to be useful, likewise a supermarket or nightclub.

There is an argument that, at a certain extreme point, density might have such a negative impact on transport speed that it might increase transit time. I'm personally split on this issue. Density definitely hurts motor vehicle speed but has little effect on walking speed and might even improve rail speed.

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