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It's the land, stupid: How the homebuilder cartel drives high housing prices

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Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#61

Post by TulliusCicero »

onemoresoop wrote: post #27
xnx wrote: post #5

No shortage of land in the US, but everyone wants to live in the same few places (for good reason), and those places have a lot of restrictions on what can be built where. It's satisfying to blame a big bad "them" for this, but the problem is "us". We all want our properties to increase in value so we collectively conspire to suppress supply that would make our properties less valuable.

Why does everyone want to live in the same few places? Because all ways to make money and a living are there! Give people the option to work remotely and they can live wherever they want, and that is not in crowded expensive cities most of the time.

That's part of it, yes. But some areas can be more desirable for other reasons, too.

It'd be better overall for society if we just got rid of exclusionary zoning and made it easier for people to live where they wanna live.

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#62

Post by TulliusCicero »

theoreticalmal wrote: post #33
nnf wrote: post #12

> tax the land of lot developers so they don’t hold land off the market. This is something I dealt with a few years ago. There were a few acreage lots (5-15 acres) my partner and I were considering buying and building a house on, and all of them had been in the $200k range a year or two before but had been bought by land speculators (in some cases by the same person). Prices went from ~$200k to ~$750k, which we weren…

This seems a lot like a tax on unrealized gains. You’re taxing something that might have value in the future, rather than it’s actual value now.

And that's a good thing, because unlike other valuables, you can't just create or mine more land. Land is inherently valuable based on its location, you can't just get more of it somewhere and import it in.

There needs to be pressure to actually make productive use of land so that people don't just uselessly sit on it.

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#63

Post by iambateman »

Housing can’t be both a good investment AND affordable. As a kid, I was told that my house was a good investment and the houses rise in value overtime. Now, I own two houses which of both appreciated by about 9% per year for a decade.

We agree there is a problem.

But I doubt the premise that land hoarding is the key issue. It seems to me that everyone wants to live in a 3,500 square foot detached house near the city. But only so much of that exists.

At least one major reason is that neighborhoods actively fight the installation of semi-dense housing because it would “ruin the character of the neighborhood.” This gets encoded in zoning.

The people who have most power over local zoning regulations are neighborhood boards, not home builders.

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#64

Post by woah »

sroussey wrote: post #59
lotsofpulp wrote: post #38

Earlier quoted context omitted.

Yes, it’s called property tax, calculated by multiplying a property tax rate times assessed value of the property. Does anywhere not already have that?

Farther up they are talking about taxing based on what it could be worth, not what it is worth.

Land Value Tax (the Georgeism discussed in the article) just taxes the land on what it is worth, not the buildings on it. So holding land vacant costs more because the speculator is not making any money from it, while they could be making money from a building.

A side benefit for homeowners is that improvements increase equity and resale value without raising taxes

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#65

Post by kaibee »

toomuchtodo wrote: post #39
kaibee wrote: post #25

Earlier quoted context omitted.

The neat thing about capitalism is that stores will be built to serve the community if there's a market for it. We don't need to centrally plan the whole community up front. We do need zoning laws that ALLOW those stores to be built though.

This is not borne out by the evidence. https://www.ruralhealthinfo.org/topics/food-and-hunger https://www.propublica.org/article/food-desert-grocery-store...

Those are about rural communities. It makes perfect sense that a very low-density community doesn't generate enough demand for a robust grocery store. The 2nd article mentions that the community used the newly built grocery store for a while, before going back mostly shopping at a Walmart 30 miles away. My guess is that those people were going to that Walmart anyway for this or that in many cases. So at that point, why drive to two locations, esp for most people in the rural area, that grocery store isn't actually that much more convenient, and can't compete on price with Walmart?

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#66

Post by xnx »

lapcat wrote: post #21
xnx wrote: post #5

No shortage of land in the US, but everyone wants to live in the same few places (for good reason), and those places have a lot of restrictions on what can be built where. It's satisfying to blame a big bad "them" for this, but the problem is "us". We all want our properties to increase in value so we collectively conspire to suppress supply that would make our properties less valuable.

> No shortage of land in the US, but everyone wants to live in the same few places It's not enough to have land, though. The land needs access to water and electricity, not to mention roads, or it's a nonstarter, especially if you want to build a bunch of homes on the land. And the new homeowners will need access to food and supplies, i.e., stores. You need an entire community.

Very true. There are many areas in the US (Detroit for example) that have lost population over the past 50 years that wouldn't have to start from scratch with new development.

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#67

Post by dnissley »

aorloff wrote: post #50
dnissley wrote: post #41

Earlier quoted context omitted.

I feel like I need to make this point again and again: It's not about increasing the value of properties for most (after all, allowing apartments to be built in your neighborhood would increase the value of the remaining SFHs). It's about keeping the character of the neighborhood the same as it is now (SFH vibes), and all that comes with that ("family friendliness", etc).

Everyone wants to keep the character of their neighborhood . Forget that ! When you go to a dense city like Barcelona where every block is nearly 4 story high rise apartments, its wonderful. Change is beautiful, people enhance neighborhoods

I agree, and I think even the folks who are against that would actually end up enjoying it more. But people hate change, especially when it means changing something that has been that way for generations at this point. My main point though is that people who think this is about money are simply wrong. Trying to argue numbers with these folks will not move them an inch. It has everything to do with emotion.

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#68

Post by vundercind »

treis wrote: post #20

>And I realized that to call these businesses “homebuilders” is misleading. It’s striking how little of their business has to do with, well, building. For instance, here’s D.R. Horton in 2023: “Substantially all of our land development and home construction work is performed by subcontractors.” Here’s Lennar in 2023: “We use independent subcontractors for most aspects of land development and home construction.” I sus…

The structure of neighborhoods I’ve seen pop up in the last couple decades (maybe also earlier, I dunno) is that of a neighborhood developer who farms out the work of building the houses to (usually) a few select other firms, which do the actual GC work and sell the houses, having bought the lots they’re building on from the owner of the neighborhood. The neighborhood developer is mostly in land speculation, they don’t GC the building of houses. IDK if such outfits bill themselves as “home builders” in some contexts, but it wouldn’t surprise me.

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#69

Post by toomuchtodo »

kaibee wrote: post #65
toomuchtodo wrote: post #39

Earlier quoted context omitted.

This is not borne out by the evidence. https://www.ruralhealthinfo.org/topics/food-and-hunger https://www.propublica.org/article/food-desert-grocery-store...

Those are about rural communities. It makes perfect sense that a very low-density community doesn't generate enough demand for a robust grocery store. The 2nd article mentions that the community used the newly built grocery store for a while, before going back mostly shopping at a Walmart 30 miles away. My guess is that those people were going to that Walmart anyway for this or that in many cases. So at that point, w…

You said:

> The neat thing about capitalism is that stores will be built to serve the community if there's a market for it.

I am pointing out that this is not a given, magic that will just happen. Capitalism is not always efficient nor reliable, based on the evidence.

> before going back mostly shopping at a Walmart 30 miles away. My guess is that those people were going to that Walmart anyway for this or that in many cases. So at that point, why drive to two locations, esp for most people in the rural area, that grocery store isn't actually that much more convenient, and can't compete on price with Walmart?

https://www.washingtonpost.com/graphics/business/walmart-clo...

https://www.washingtonpost.com/news/wonk/wp/2016/02/05/what-...

Re: It's the land, stupid: How the homebuilder cartel drives high housing prices

#70

Post by sroussey »

theoreticalmal wrote: post #42
delichon wrote: post #16

Nearly 40% of the United States is public land, supported by taxpayers and managed by federal, state, or local governments. -- https://headwaterseconomics.org/public-lands/protected-lands/public-land-ownership-in-the-us/ Allocating a few more percentage points of that for housing could have a large effect on prices.

Probably any land the federal government would be okay selling to developers is also land that no developers would have the capital or physical ability to improve to the point of being valuable. Most of Nevada is federal land. Almost no one wants to live on it.

The major of Los Vegas says otherwise.

https://www.reviewjournal.com/opinion/commentary-government-...

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