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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

#151
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?

"induced demand" is something that happens when something is subsidized like roads and parking lots.

You're supposed to pay for your own housing no matter how dense it is. Hence induced demand makes no sense here.

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

#152
I like a lot of Scott's work but this is an uncharacteristically shallow analysis. On his chart he considers SF more dense than NYC, this is a misleading comparison. It seems like he is only considering the urban area in each metro, which totally misses the point. NYC is over 50% denser than SF and the surrounding metro area of NYC is nearly five times denser than that of SF. Yet on his first chart housing is significantly more affordable in NYC. I can't find good numbers quickly but having lived in both places and with quick spot-checking living in a denser suburb in the greater NYC area with a 20-30 minute train commute to downtown Manhattan is significantly more affordable than a similarly located apartment in the Bay Area. There is also some weirdness in comparing cities directly because NYC has absorbed a lot more of the surrounding area and is much larger than SF so comparing the two is not straightforward. This is just one data point swap but to me it calls the whole method into question, he even considers LA denser than NYC which is simply ridiculous.

A common YIMBY complaint is that single family zoning forces urban areas to become even denser because they are the only places where multi-family housing is allowed. This is totally consistent with the data presented here. Does that mean it is true? Not necessarily, but the analysis does little to explore options simply referring to the induced demand effect as "obvious". It seems he is out of his element here.

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

#153
post #59

Earlier quoted context omitted.

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…

I don't really follow. The idea for roads is that congestion moderates the utility of roads, so over a wide range of capacities roads will remain congested or even become more congested as you add roads, since if you build more you make the roads more useful (reaching more places faster, through better connections or increased capacity) and so people will use them more, potentially resulting in more congestion but al…

Your first paragraph is nonsense. The problem can be boiled down to the cost benefit structure of roads. There are no congestion charges so the cost is zero or almost zero plus the time spent driving. Cities build roads where people want to go so the idea that someone would build a useless road should be thrown out. This means the benefits of a constructed road are on average positive. Positive benefits minus zero costs mean infinite demand or as others affectionately call it "induced demand". The only cost that remains that stops people is the fact that they still have to spend time driving so from the drivers perspective the cost benefit structure does not change no matter how much road capacity you build. If their time budget for driving is thirty minutes then the road will fill up until the trip takes longer than thirty minutes. This filling up effect can take the form of people switching from other modes of transportation like buses or bicycles to cars or from smaller cars to bigger cars that take up more space.

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

#154

Earlier quoted context omitted.

You can't have it both ways here. Either density is creating lots of high paying jobs in an area, that is driving up the price of housing, or it isn't. > Ironically denser places result in lower wages No it doesn't. The highest paid locations, in the US, are located in these high cost of living areas. > This is why people like remote work, so they can better arbitrage. Yes, they work remote, because dense locations h…

> It should be almost self evidently true that they pay more money, than random jobs, in the middle of nowhere, in the US. I'm talking about the wage relative to the price sq/ft. You're laughably wrong. Just google Median NYC salary and look at the median NYC sq/ft, and do the same with say, Dallas, TX. It's not even close. I'm not talking about nominal wages, I'm talking about sq/ft monthly rent adjusted wages. When…

Wage, measured in $/month

Housing cost, measured in $/month

Housing cost/sqft measured in ($/month)/sqft

Wage/(housing cost/sqft) measured in sqft.

Why is sqft a measure of earning potential?

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

#155

Earlier quoted context omitted.

> 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.

> Building more reduces prices below what they would have been if that building didn't happen. seems like moving the goal posts. it's only expensive to begin with due to the density and subsequent amenities enabled by such. why is for example Manhattan more expensive than Brooklyn? it's more dense, should be cheaper accordingly to the density makes cheaper logic. people keep moving the goal posts, but anyone can go o…

> why is for example Manhattan more expensive than Brooklyn? it's more dense, should be cheaper accordingly to the density makes cheaper logic.

It's more expensive because many more people want to live there than want to live in Brooklyn, outstripping the available housing to a greater degree. It's basic supply and demand.

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

#156

Earlier quoted context omitted.

They don't like the density, but they like the location? Usually, liking the location means you like that it's close to other things, right? In other words, you like the density.

They are not synonyms. Location means being close to things you like . Those things can be, but are not always other humans. you might like a location because it is beautiful, by the ocean, mountains, or a short commute. I might like a location because it is close to a high paid job, but hate the population density. That is to say, population density can be a negative attribute of a location.

I'd argue that being closer to work is more density, but it really doesn't matter. People like being near things they like, whether that is density or is merely correlated to it.

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

#158

Earlier quoted context omitted.

Call me stupid (I am not an economist) but I can't see how your conclusions follow from one another. > That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. ...How did those 5 million better-paid jobs got created? How did the 5 million people connect with them? Not everyone is 18-25 y/o you know, a lot of p…

Heating an apartment takes far less energy than heating a detached house. Public transit takes far less energy than driving a car. Walking or biking takes even less. There's no way that urban living isn't far more climate friendly than rural, even if the rural housing is getting some energy from solar or burning wood.

The greater the number of people in a given area the worse it will be for that environment.

Honestly, I even think detached houses beat most apartments. Apartments often depend on electric baseboard radiators and window AC units for heating and cooling. They often have multiple massive hot water heaters where the people on higher floors must leave their water running for 10-15 minutes before they start getting hot water. They also tend to have outdated appliances that are less energy efficient like electric ranges, and old refrigerators and ancient clothes washers/dryers. In most of the apartments I've lived in, it was firmly against the rules to hang your clothes on a line to be dried by wind and sun.

The appliances you get are often not as well maintained either. Tenants aren't pulling out the fridge to clean the coils and landlords rarely do either. Renters don't have the ability to make the kinds of improvements that would reduce their energy bills and landlords are incentivized to cut corners on construction and maintenance since it saves them money and the expensive utility payments are the renter's problem (a problem they can't even know about until after they've signed a lease and gotten their electric bill).

Public transportation is better than driving cars, but most people don't use public transpiration anyway and the number of cars on the road in dense urban settings is much higher than on rural streets. We can see that reflected in the air quality, which is abysmal in highly populated urban centers compared to rural areas.

Urban environments have fewer trees, fewer unpaved expanses of land, more pollution (air, water, light, noise), less wildlife (greater habitat destruction, more poisons and other dangers to animals) and more trash/litter.

Urban settings are by far less climate friendly than rural settings, but certainly we'd have new problems if everyone lived 2 miles from their nearest neighbor.

There's a middle ground that I don't think we've really reached yet but for now it's probably a good thing that we have masses of people concentrated into small tightly packed highly polluted pockets of filth and disease and also wide open spaces where it's clean and quiet, where animals can live, and the air is cleaner. We'd be smart to try to increase the efficiency of the spaces we move into while still avoiding going over the number of humans a given area can sustainably support, but I have a feeling that there will always be people who want to live farther way from anything else than is practical and people who want to live in areas that are too densely populated to be good for the environment.

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

#159
post #59

Earlier quoted context omitted.

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…

I don't really follow. The idea for roads is that congestion moderates the utility of roads, so over a wide range of capacities roads will remain congested or even become more congested as you add roads, since if you build more you make the roads more useful (reaching more places faster, through better connections or increased capacity) and so people will use them more, potentially resulting in more congestion but al…

I'm not sure about the expenses of more floors - those seem extremely high to me, on the face of it, though.

The benefit of dense housing is more so about the total resource expense of maintaining a city. If you have 1m people in single family homes, that city will sprawl, with attendant infrastructure requirements for roads, sewage and power distribution. A city with 1m people in (for example) denser 5 floor buildings will probably require 1/5 to 1/10th the space at a first level approximation, and probably even less after you eliminate excessive backyard space waste, less space dedicated to roads and freeways, etc.

The resident in the dense city will have to fund far fewer ancillary expenses, probably spend significantly less on transport and fuel, etc. That's how you get back the higher construction costs. This also ignores the value people place on convenience and the like, which is a significant component of why people choose to live in cities rather than suburbs.

However, in many cases housing is artificially expense, with very high cost components in the LAND, rather than the structure. You'd expect in a relatively efficient housing market most of the cost would be in the structure and construction, since there's enough housing that raw space wouldn't be an issue. In many places regulations make sufficiently dense housing impossible for fulfilling this requirement (since dense housing distributes the land cost amongst many dwellings)

Roads just don't scale the same way - someone else had a good comment on how free roads basically always fill up to take about the same time. Of course, more people are getting utility from it, but as you get more travelers you'd naturally expect the monetary benefit per person to come down;. PT doesn't have the same problem, since it can scale to more or less arbitrary amounts of people in comparison to a road.

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

#160

Earlier quoted context omitted.

Heating an apartment takes far less energy than heating a detached house. Public transit takes far less energy than driving a car. Walking or biking takes even less. There's no way that urban living isn't far more climate friendly than rural, even if the rural housing is getting some energy from solar or burning wood.

The greater the number of people in a given area the worse it will be for that environment. Honestly, I even think detached houses beat most apartments. Apartments often depend on electric baseboard radiators and window AC units for heating and cooling. They often have multiple massive hot water heaters where the people on higher floors must leave their water running for 10-15 minutes before they start getting hot wa…

That's nonsense. You don't get less environmental impact by having every person take up more land. Urban living is much more environmentally friendly because the alternative is paving over more of the environment.

The incentive to make improvements comes from ownership model, not form factor. Apartments can be owned and houses can be rented.

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