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Household size and the housing stock

kevinerdmann.substack.com

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Re: Household size and the housing stock

#91

Post by giantg2 »

bsder wrote: post #23
giantg2 wrote: post #15

Earlier quoted context omitted.

"Not enough is legal, and not enough is built as a result." It's a preferences and distribution problem. There are plenty of places with vacancies or where it is legal and practical to build. The problem is people don't want to live there or it has too few jobs. If the market works the way it should, then people should shift out of the tighter areas and into the looser areas, reaching something closer to an equilibri…

> If the market works the way it should, then people should shift out of the tighter areas and into the looser areas, reaching something closer to an equilibrium. The problem is that households require two wage earners. Consequently, it is very difficult for a family to move since both earners have to find better jobs simultaneously. One of the reasons to stay in the overpriced areas is that when one person loses a j…

"Consequently, it is very difficult for a family to move since both earners have to find better jobs simultaneously."

If cost of living is significantly lower, they don't have to be better.

My whole comment was about job distribution. What are we doing to address it? Do the mega corp leaders not see the social and business value in opening offices in smaller cities?

Re: Household size and the housing stock

#92

Post by giantg2 »

riku_iki wrote: post #18
giantg2 wrote: post #15

Earlier quoted context omitted.

"Not enough is legal, and not enough is built as a result." It's a preferences and distribution problem. There are plenty of places with vacancies or where it is legal and practical to build. The problem is people don't want to live there or it has too few jobs. If the market works the way it should, then people should shift out of the tighter areas and into the looser areas, reaching something closer to an equilibri…

> then people should shift out of the tighter areas and into the looser areas, reaching something closer to an equilibrium thats if infrastructure(roads, airports, hospitals, grid, etc) will appear there

There are plenty of places with infrastructure that also have available land within about an hour or so from an airport. Many of those places have decent hospitals with great hospitals (for specialists) a reasonable drive away. Those decent hospitals would likely get better if they had employed patients to reduce the percentage of their patients on Medicare and Medicaid (both low reimbursing).

Re: Household size and the housing stock

#93

Post by davidw »

fire_lake wrote: post #75
SoftTalker wrote: post #21

Earlier quoted context omitted.

In my view, it's also the aspect ratio of the lots. Most suburban lots are fairly close to square. That leaves wide side yards that are just wasted space. Who ever really does anything in their side yard? Lots should be narrower. You could get more houses on a block, and they'd could all still have a usable front and back yard. In fact I'd allow them to be built closer to the street, because nobody really uses their…

Front gardens are a benefit to everyone in the neighbourhood, maintained at cost to the owner. They are an anti-SUV, in a way. I could even support tax benefits for maintaining green space in the public view. The alternative (I saw this the UK) is that people turn their front garden into parking or expand their building towards the street.

Grassy front yards are a complete waste of space and water. Kids don't play on them. The person who uses a front yard to grow food is pretty rare.

At the end of the day, too, we have a housing crisis, not a front-yard crisis.

Re: Household size and the housing stock

#94

Post by davidw »

2four2 wrote: post #59
underlipton wrote: post #6

I don't buy it. One thing that stands out to me: he has a ton of charts, but this crucial bit: >But, since 2008, vacancies have been declining steeply. is missing one. It looks like this statement is based on his estimates. So... original research. I'll leave it to an actual statistician to analyze his methodology, but that statement doesn't jive with my experience. I continue to suspect that the "housing shortage" (…

Another point overlooked is that the main focus of the article cites fewer people per household, then discounts things like AirB&B, which directly contributes to this statistic. It seems like a casual dismissal of the statistic, painting it as simply no one having children.

Short Term Rentals do not help, but ... as someone who has been doing housing stuff for a few years now, they're one of several bogeymen that people want so badly to be 'the real problem'. But they aren't. It's your neighbors who show up to oppose housing, like this crowd at a hearing I attended to support some apartments: https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...

That's 40 homes (aka 'units') that are not built, and it's not because of STR's, foreign buyers, Blackstone or whatever other bogeyman.

That happens all over the place, every single day.

Re: Household size and the housing stock

#95

Post by scotty79 »

pas wrote: post #77
scotty79 wrote: post #65

The cause of the problem is that real estate is a good investment asset. The way to solve the problem is making it a bad investment asset. The best way to do it is to tax real estate progressively. The more you own, the higher percentage of its value you must pay every year. That taxation scheme would make investors drop millions of houses on the market like a hot potato. Prices would tank. This might cause issues wi…

that's the effect, the cause is that supply did not keep up, and that's caused by all kinds of restrictions and disincentives against high-density and corresponding cities (this stretched out populations, increased overall costs) just as white flight completely turned cities inside out (negating a lot of their economic benefits) the resistance to even gradual "citification" of SFH suburbs further pushed costs up

It's impossible for the supply to keep up for the demand for investment vessel. China has already built 3 times the number of the apartments that are needed to house the entire population and the demand still outpaces the supply.

Re: Household size and the housing stock

#96

Post by scotty79 »

hackerlight wrote: post #80
scotty79 wrote: post #65

The cause of the problem is that real estate is a good investment asset. The way to solve the problem is making it a bad investment asset. The best way to do it is to tax real estate progressively. The more you own, the higher percentage of its value you must pay every year. That taxation scheme would make investors drop millions of houses on the market like a hot potato. Prices would tank. This might cause issues wi…

But rents are also high. High rents aren't caused by investors. Rents are caused by too many people wanting to live somewhere versus a small number of dwellings. It's the pigeon hole principle, which you can't solve by reducing investors. Also, let's think about unintended consequences. A lot of housing starts happen only because of investor capital. Given the existence of a rental crisis, if you inadvertently reduce…

Of course high rents are caused by the investors. After all, rents are huge part of the return on their investment and also huge factor in determining the asset price.

Solution to rental crisis is the reduction of what percentage of people rent vs buy. With a flood of cheap properties on the market more people would consider buying. Also they'd need smaller mortgages so they could be easier to acquire.

Re: Household size and the housing stock

#97

Post by seanmcdirmid »

OJFord wrote: post #70
seanmcdirmid wrote: post #35

Earlier quoted context omitted.

The trend in Seattle at least is to take one SFH policy and build three town homes on it that don’t share walls but have the minimum buffers between them and the property line. People don’t really build homes at all, developers do, and they want to maximize the earnings they can get on an expensive plot of land.

Fwiw, that's my non-American impression of North American suburban homes everywhere (as far as I've seen, largely TV/film of course) - y'all say scathing things about terraced houses in Europe, but then your own seem for the most part detached only as a technicality. (And probably it is mostly about making legal and construction matters easier? No party wall; if you want to tear it down and put a new one up you can d…

We have townhomes that share walls as well. My wife wasn’t a fan although I loved one place like that. It’s mostly preference going on.

Re: Household size and the housing stock

#98

Post by mastax »

tmnvix wrote: post #55
mastax wrote: post #41

Earlier quoted context omitted.

https://fred.stlouisfed.org/series/RHVRUSQ156N https://fred.stlouisfed.org/series/RRVRUSQ156N

Your links don't measure underutilised and vacant property (e.g. AirBnBs and second homes, or land banked properties). From the links: The homeowner vacancy rate is the proportion of the homeowner inventory that is vacant for sale. The rental vacancy rate is the proportion of the rental inventory that is vacant for rent. So essentially this is a measure of how many properties are vacant and available for rent or purc…

You are correct, here is a better statistic: https://fred.stlouisfed.org/series/EVACANTUSQ176N

Re: Household size and the housing stock

#99

Post by randerson »

scotty79 wrote: post #65

The cause of the problem is that real estate is a good investment asset. The way to solve the problem is making it a bad investment asset. The best way to do it is to tax real estate progressively. The more you own, the higher percentage of its value you must pay every year. That taxation scheme would make investors drop millions of houses on the market like a hot potato. Prices would tank. This might cause issues wi…

The tax change would have to be made gradually to avoid a shock to the system, and it could exclude primary residences so that middle-class homeowners aren't punished. Just incentivizing the wealthy to offload their pied-à-terres would free up plenty of housing stock.

Re: Household size and the housing stock

#100

Post by mindslight »

DoreenMichele wrote: post #2

In the 1950s, average size of new homes was about 1200 square feet. In 2000, it was more than 2400 square feet and held one less person (iirc: 4.5 VS 3.5 people). We are building 1950s suburban homes on steroids in a post-baby-boom world where average household size has shrunk. There are a lot of problems with this.

IMO the tiny 1950's boxes were the start of the problem. "Everybody gets a house", yet it made for an extreme pressure for kids to gtfo as soon as possible rather than living in the bedroom across the hall from your parents (assuming the parents even allow that).

My grandparents had a bona fide two family house, two stories with the common "balloon" construction from the (earlier) period. Looking at how its use changed through the years, it allowed for great flexibility. Lots of bedrooms for kids, somewhat private space as they got into their teenage+ years. Then after most moved out and settled down on their own, one stayed in the upstairs apartment with their husband and own kid, and helped out grandma while grandma helped watch the next generation. Then when grandma passed, the house passed to a different brother, who lived in one apartment and rented out the second.

Now modern humongous homes are trying to recreate some of that flexibility, but not doing a great job at it. They're still focused on a singular living space where everyone has to interact with each other. This is often due to zoning regulations directly aimed at preventing people from creating full second living spaces that would be possible to rent on the open market - when it's exactly that independence that allows scaling how much house you're actually using.

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