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Why affordable housing is scarce in progressive cities

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Re: Why affordable housing is scarce in progressive cities

#21

Post by AnthonyMouse »

dvdhnt wrote: post #8
AnthonyMouse wrote: post #3

> a shortage of new construction, a lack of tenant protection "Tenant protection" -- especially rent control -- is a nontrivial cause of the shortage of new construction. High rents are a signal to developers that there is money to be made constructing new housing. If it's not possible to make the money, they won't do the construction, which is what rent control causes. You get a population of existing residents with…

I’m not saying you’re wrong, but saying there’s no benefit to building new housing because there’s not a fortune to be made, well that just seems like capitalist-apologizing. We’ve built a system where humans are expected to somehow accrue interest at the whim of the capitalist overlord. The soul of rent control is pretty important, so maybe rent control needs to evolve? I’m hard pressed to defend it completely becau…

> I’m not saying you’re wrong, but saying there’s no benefit to building new housing because there’s not a fortune to be made, well that just seems like capitalist-apologizing.

It's just math. The land costs a million dollars, the construction costs $500K, therefore the net present value of the future rents (less property taxes, insurance, etc.) has to be $1.5M, or the construction does not occur. Rent control puts the marginal construction project below the break-even point.

> We’ve built a system where humans are expected to somehow accrue interest at the whim of the capitalist overlord. The soul of rent control is pretty important, so maybe rent control needs to evolve?

The soul of rent control is bad math. If you want lower rents, adopt policies that encourage housing construction until rents are suitably low. At which point, who needs rent control?

Re: Why affordable housing is scarce in progressive cities

#22

Post by wernercd »

hristov wrote: post #16
AnthonyMouse wrote: post #3

> a shortage of new construction, a lack of tenant protection "Tenant protection" -- especially rent control -- is a nontrivial cause of the shortage of new construction. High rents are a signal to developers that there is money to be made constructing new housing. If it's not possible to make the money, they won't do the construction, which is what rent control causes. You get a population of existing residents with…

This is not how rent control works in any city in the US that I know of. Everywhere I know of rent control only applies to significantly older buildings. Which means that new buildings can charge much higher prices, which means that rent control actually encourages new buildings. The only time some type of rent control applies for new buildings is when they are specifically built as "affordable housing". This usually…

> This is not how rent control works

That's not how it works in theory...

That's how it works in reality.

That's the problem with most "progressive" theories like rent control... the theory doesn't match reality.

Re: Why affordable housing is scarce in progressive cities

#23

Post by js8 »

AnthonyMouse wrote: post #3

> a shortage of new construction, a lack of tenant protection "Tenant protection" -- especially rent control -- is a nontrivial cause of the shortage of new construction. High rents are a signal to developers that there is money to be made constructing new housing. If it's not possible to make the money, they won't do the construction, which is what rent control causes. You get a population of existing residents with…

I think you're wrong. In Prague, they started removing rent controls several years ago, and we have seen highest increase in property values in maybe three decades.

Also, if I owned some property, I am not sure I would want to invest in building new one and have to decrease rent rather than enjoy the fact that the rent is high.

All in all, I suspect that rent control might be quite insignificant factor in housing scarcity. More important is probably lack of actual housing construction financed by government.

Re: Why affordable housing is scarce in progressive cities

#24

Post by thrav »

jayd16 wrote: post #11

These article are pretty ridiculous and I see this political bent more and more on here. The article/book makes a huge leap in assuming progressive cities are somehow worse at housing. The reality is people actually want to live there. The most densely populated cities in the US, and in general all cities, lean left politically. Finding new housing is important but we're really losing perspective on how successful th…

There’s no denying that building is a hell of a lot easier in a place like Houston without zoning than anywhere else though.

Re: Why affordable housing is scarce in progressive cities

#25

Post by SolaceQuantum »

skybrian wrote: post #9

A philosophical question: is it ever okay for someone to have to move away to find affordable housing? Or do we say that once someone becomes resident of a community, they should be able to live there forever? (This isn't just renting; there are similar issues with home owners and property tax increases.)

I think the greater context here misses the trauma behind being forced to move out of a home. Being separated from your social network, familiar surroundings, into a new and unknown environment can be highly traumatizing to the people who move and the community which loses its members. Children have their educations interrupted, elders lose a family of support, adults need to forge new friendships in a time where we know the majority of friendships occur in childhood.

The greater question is if it's okay for someone to undergo the trauma of being moved because they can no longer afford the geographic location that they didn't choose to be born and raised into.

Re: Why affordable housing is scarce in progressive cities

#26

Post by vkou »

skybrian wrote: post #9

A philosophical question: is it ever okay for someone to have to move away to find affordable housing? Or do we say that once someone becomes resident of a community, they should be able to live there forever? (This isn't just renting; there are similar issues with home owners and property tax increases.)

An intelligent species would not have fallen into a number of traps that we are in today.

Defense spending, arms races, nuclear stockpiles, tobacco companies paying out settlements from past harm by inflicting future harm, races to the bottom, etc.

All of these are, when you take a step back, insane.

Re: Why affordable housing is scarce in progressive cities

#28

Post by shse »

mrep wrote: post #17
shse wrote: post #5

Cities are full. US population has doubled since 1960. If we get rid of zoning we will end up with overpopulated cities like Hong-Kong, Jakarta, Moscow, Tokyo.

No they are not, look at the varience in population density of us cities [0] and it's pretty obvious lots of them can expand. The real problem is that jobs are highly local and people want to live in an area where their are lots of job opportunities. Thus, cities with lots of good job opportunities beget more job opportunities like how Amazon chose New York instead of a smaller city. [0]: https://en.m.wikipedia.org/w…

When you build more appartments, more people come to the city. It’s a positive feedback loop. The result is a city with terrible quality of life. The city no one wants to live in. Only then it will stop growing.

Re: Why affordable housing is scarce in progressive cities

#29

Post by AnthonyMouse »

hedvig wrote: post #14
AnthonyMouse wrote: post #3

> a shortage of new construction, a lack of tenant protection "Tenant protection" -- especially rent control -- is a nontrivial cause of the shortage of new construction. High rents are a signal to developers that there is money to be made constructing new housing. If it's not possible to make the money, they won't do the construction, which is what rent control causes. You get a population of existing residents with…

Why aren't there developers that are willing to make 17% margins instead of 20% margins? You know what I'm saying. Related Group has always been happy to and does to this day build luxury units that get scooped up by elite Venezuelans and Russians. Who will build non-luxury units? The owners will claim they're luxury for the next 40 years, so there's no real trickle down effect.

> Why aren't there developers that are willing to make 17% margins instead of 20% margins?

Because the margins in a different city are 19%, or some entirely different class of investment now has better risk-adjusted returns so the funding falls through.

Re: Why affordable housing is scarce in progressive cities

#30

Post by kasey_junk »

AnthonyMouse wrote: post #7
kasey_junk wrote: post #4

Earlier quoted context omitted.

“Progressives” largely believe those things aren’t mutually exclusive. So why should they explain your position?

High home values and inclusive housing policies are directly opposed. They exclude anyone who can't afford high housing prices.

Yet there is public housing in Chelsea NYC.

We can argue about how to do ‘inclusive housing’ but the idea that it immediately precludes high home prices doesn’t hold up to basic inspection.

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