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California’s housing crisis: how a bureaucrat pushed to build

nytimes.com

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Re: California’s housing crisis: how a bureaucrat pushed to build

#571

Post by intopieces »

int_19h wrote: post #562
intopieces wrote: post #523

Earlier quoted context omitted.

Economic stability is a necessity for home ownership and is often exhibited by home owners, but home ownership is not a cause nor prerequisite for economic stability. The relationship between the two was muddled in the run up to the last financial crisis- that is, lenders were encouraged to lend to more people to buy houses because it was correlated with economic stability. This is a little like buying someone expens…

I wrote "greater economic stability", not "a prerequisite for economic stability". Would anybody seriously argue that not having to pay rent, and not facing with the possibility of eventually getting kicked out (even with all the protections, this can happen if the owner is taking the property off the market altogether), does not translate to more stability.

>Would anybody seriously argue that not having to pay rent, and not facing with the possibility of eventually getting kicked out [...] does not translate to more stability[?]

Paul Krugman does. [0]

Subsidies to home ownership increased economic volatility (people spend more when their house is worth more, spend less when its value decreases); weakened financial services; and made labour markets tend to become more rigid. [1]

[0]https://www.nytimes.com/2008/06/23/opinion/23krugman.html [1]https://www.economist.com/briefing/2009/04/16/shelter-or-bur...

Re: California’s housing crisis: how a bureaucrat pushed to build

#572

Post by usaar333 »

buss wrote: post #478
tryitnow wrote: post #469

Earlier quoted context omitted.

I used to be YIMBY, but I doubt more construction would lead to lower costs of living. When I researched this I couldn't find any strong evidence suggesting that more building would lead to more affordable housing. You would think that more construction would lead to more affordable housing, but it seems like more construction doesn't just increase supply, it also increases demand, which can offset any price effects…

There's absolutely zero evidence of "induced demand" for housing. And all available evidence suggests that 1: SF & CA have huge shortages of homes and 2: Building more is a good solution. Please see this non-exhaustive list of things which all show building more housing leads to housing affordability. * http://cityobservatory.org/another-housing-myth-debunked-nei... * https://www.bizjournals.com/sanfrancisco/news/201…

> There's absolutely zero evidence of "induced demand" for housing.

There absolutely is. Here's a great paper studying the effect of removing rent control in Cambridge, MA (https://economics.mit.edu/files/9760) which found that rent in non-rent controlled units went up as a result of the removal. The effect is similar to what GP stated -- gentrification causes a feedback loop that can affect all housing.

All said, it is very possible (and I subscribe to the idea) that the Bay Area would not suffer from much induced demand because people are in the area for the economic opportunity, not for local amenities.

Re: California’s housing crisis: how a bureaucrat pushed to build

#573

Post by AnthonyMouse »

refurb wrote: post #549
buss wrote: post #547

Earlier quoted context omitted.

That's not induced demand, that's a standard demand curve. The price drops and more people buy it. Induced demand is "adding supply increased the price"

The best example of induced demand ignores price. Build more freeways and you get more drivers.

> The best example of induced demand ignores price.

> Build more freeways and you get more drivers.

That's like having a McDonalds without enough cashiers and then saying "hire more cashiers and you sell more hamburgers" is induced demand because the hamburgers cost the same but you sell more of them.

That's not induced demand, you're just changing the price. Having to wait in line (or sit in traffic) is a cost. If you reduce the cost, demand goes up, but that's just ordinary supply and demand again.

Re: California’s housing crisis: how a bureaucrat pushed to build

#574

Post by dasil003 »

jariel wrote: post #566
buss wrote: post #546

Earlier quoted context omitted.

Yes, I unironically want 4 million new homes in San Francisco. The housing shortage in the Bay Area might be the single largest drag on American prosperity.

"Yes, I unironically want 4 million new homes in San Francisco." Why would any SF resident care even a little bit what non-residents think of their housing situation? "The housing shortage in the Bay Area might be the single largest drag on American prosperity." Have you considered that someone's home, their life is not a function of 'industrial prosperity'? And that they're not interested in having their neighbourho…

Facebook engineers are not the ones being forced out of the area.

Re: California’s housing crisis: how a bureaucrat pushed to build

#575

Post by tlb »

usaar333 wrote: post #572
buss wrote: post #478

Earlier quoted context omitted.

There's absolutely zero evidence of "induced demand" for housing. And all available evidence suggests that 1: SF & CA have huge shortages of homes and 2: Building more is a good solution. Please see this non-exhaustive list of things which all show building more housing leads to housing affordability. * http://cityobservatory.org/another-housing-myth-debunked-nei... * https://www.bizjournals.com/sanfrancisco/news/201…

> There's absolutely zero evidence of "induced demand" for housing. There absolutely is. Here's a great paper studying the effect of removing rent control in Cambridge, MA ( https://economics.mit.edu/files/9760 ) which found that rent in non-rent controlled units went up as a result of the removal. The effect is similar to what GP stated -- gentrification causes a feedback loop that can affect all housing. All said,…

The fact that ending rent control increases prices does not support the claim that building more homes increases prices. They should have opposite effects according to basic supply and demand theory.

Re: California’s housing crisis: how a bureaucrat pushed to build

#576

Post by pmiller2 »

jariel wrote: post #566
buss wrote: post #546

Earlier quoted context omitted.

Yes, I unironically want 4 million new homes in San Francisco. The housing shortage in the Bay Area might be the single largest drag on American prosperity.

"Yes, I unironically want 4 million new homes in San Francisco." Why would any SF resident care even a little bit what non-residents think of their housing situation? "The housing shortage in the Bay Area might be the single largest drag on American prosperity." Have you considered that someone's home, their life is not a function of 'industrial prosperity'? And that they're not interested in having their neighbourho…

Why do you assume the person you’re replying to isn’t a SF resident? Their profile indicates they are, in fact.

Re: California’s housing crisis: how a bureaucrat pushed to build

#577

Post by AnthonyMouse »

jbattle wrote: post #179
nostrademons wrote: post #113

Earlier quoted context omitted.

There's no need to assume this. Even if you treat land & housing as a private good, you're entitled to decide what you do with your own land . You're not entitled to decide what other people do with their land. Zoning laws, development restrictions, and HOAs violate this principle - they give existing homeowners a collective power to decide what other homeowners can do with their private property. This makes housing…

You are oversimplifying. Are you OK with someone opening hog farms all around your house? Setting up fracking rigs? Building a factory and running heavy industry?

> Are you OK with someone opening hog farms all around your house? Setting up fracking rigs? Building a factory and running heavy industry?

The reason people are not OK with those things next door is that they're loud and smelly etc. It should already be a basic principle that you shouldn't be allowed to invade your neighbor's property with foul sounds and smells. In practice that would de facto require such things to be in a rural area where the owner can surround it with enough empty space that it doesn't impact the neighbors -- but you don't need any zoning for that at all, because it's a restriction on what you can do to your neighbor's property, not what you can do to your own.

You can't get from there to prohibiting your neighbor from building some more housing units on their own property.

Re: California’s housing crisis: how a bureaucrat pushed to build

#578

Post by ScottBurson »

BurningFrog wrote: post #527
davidw wrote: post #513

Earlier quoted context omitted.

This is definitely a fair point. There's also - in my mind, living in a smaller town - the idea that it'd be nice if everyone coordinated to catch up mostly at the same time, so that it's not just Portland or Seattle or Boulder or San Diego or wherever... but everywhere.

The bigger point is that today allowing housing construction is a burden for cities. You hint that it would be good if all cities shared that burden. This is especially true in California, due to Prop 13. If we reformed the relevant rules, so cities profited from allowing new housing, I think a lot would change in this area!

Yeah, Prop. 13 is such a disaster.

Supposedly, the big selling point was that seniors on fixed incomes were getting priced out of their homes. But that would only happen because they have a substantial, appreciating asset. These aren't poor people who deserve our sympathy; they're relatively well-off people with a cash-flow problem! We could have solved their cash-flow problem without destroying our cities' tax bases by allowing them to defer some of their taxes [0] until their property was sold.

Here's a great article from 2014 that talks about it: https://techcrunch.com/2014/04/14/sf-housing/

As for cities profiting from allowing new housing, this might interest you: http://www.henrygeorge.org/pcontents.htm

[0] For example, the amount of tax due immediately could be allowed to grow at 2% annually, following the Prop. 13 formula. Also, the tax due at sale could be limited to, say, 70% of the gain on the sale. That limit would probably never take effect, in practice, but I've learned from previous occasions where I've proposed this that people tend to get hung up on the possibility that one might owe more in tax than one stood to make on the sale. In fact, if you run the numbers, it takes some very strange assumptions to make the deferred tax even approach getting that large; but this rule should assuage that concern. (Basically, you'd need several years of strong price growth followed by a sudden, huge collapse.)

Re: California’s housing crisis: how a bureaucrat pushed to build

#579

Post by unishark »

riazrizvi wrote: post #211
logfromblammo wrote: post #175

Earlier quoted context omitted.

The house that the owner lives in is not an asset. It's a durable consumer good. Wanting your home to appreciate in value forever is like expecting your 20-year-old car to sell for more than its sticker price. It really only works for art installations, created by a collaboration of architect, engineer, and builder, with some living space inside. Framed in these terms, most families do not have any significant assets…

So you're saying that a house is not a good investment? That despite a trend in increasing property values over the long term, as we have seen in the data since .. the beginning of cities, that a price correction is coming where homes will return to ... prehistoric levels? I don't see it. Instead look at a sample of home prices in the last twenty years in the Bay Area for example, and graph it against the value of a…

I think the point of the argument is that this trend is abnormal, and the increases we see are the result of (decades of) govt policies distorting the housing market.

Re: California’s housing crisis: how a bureaucrat pushed to build

#580

Post by jjeaff »

jariel wrote: post #565
buss wrote: post #478

Earlier quoted context omitted.

There's absolutely zero evidence of "induced demand" for housing. And all available evidence suggests that 1: SF & CA have huge shortages of homes and 2: Building more is a good solution. Please see this non-exhaustive list of things which all show building more housing leads to housing affordability. * http://cityobservatory.org/another-housing-myth-debunked-nei... * https://www.bizjournals.com/sanfrancisco/news/201…

There is no shortage of homes in San Francisco. Prices are a function of demand and that's it. Every city has to ultimately decide what kind of community they want to have and then act accordingly. As SF is an attractive city, every home ever built there will essentially be bought or occupied, there is nearly an unlimited number of people who would like to live there - so it's merely a matter of what kind of density…

SF is not a neighborhood of "fairly expensive homes". It is a neighborhood of some of the most expensive homes on the planet.

At a median home price of $1.7m, owning a home in SF is reserved for those grandfathered in or the wealthy.

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