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Solving the housing crisis requires fighting monopolies in construction (2020)

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Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#71

Post by teakettle42 »

schaefer wrote: post #38
oldgradstudent wrote: post #5

Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?

Here's a shred of evidence: Las Vegas is a city mostly surrounded by public lands. New private parcels are no longer made available as lots appropriate for single family homes. They are carved onto neighborhood sized chunks, sold to developers directly, and locked into HOA's for all eternity. Only the big boys that can tackle multi-million dollar bids can enrich themselves by the sale of our public lands.

Similar to upzoning land.

Only the big-boys that can tackle multi-million dollar bids and rental building development projects can enrich themselves by the upzoning of our existing neighborhoods, locking residents into a permanent rental class for all eternity.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#72

Post by hervature »

Certainly, the last year as been absolutely stupid, but I would argue that we've actually, for the first time since 2005, gotten to unsustainable levels. The headline is sensational, but please review the last graph here: https://realestatedecoded.com/real-monthly-mortgage-payment-...

What really matters to people are monthly payments relative to paycheck. Of course, if people also believe that inflation is underestimated, then the current housing situation is perfectly fine.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#73

Post by freework »

adam_arthur wrote: post #14
oldgradstudent wrote: post #5

Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?

Population is flat over the last two years, while housing units are up and the construction rate is all time high. There is no crisis, just rampant speculation that ate through active inventory. The actual data is very clear on this (FRED), despite the word of mouth "shortage" narrative. Now that the narrative is turning, inventory is skyrocketing as you would expect, and we will be in a glut within 6 months. Look at…

> the construction rate is all time high.

Not in my area. Where I live, there are about 4 or 5 housing developments, and every time I drive by them, I never see any progress. Occasionally I may see one truck and maybe 3 or 4 people working, but most of the time, I see no one. In the year I've lived here, I have notices zero progress on all new construction that I know of.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#74

Post by TedShiller »

workingon wrote: post #48
TedShiller wrote: post #24

Earlier quoted context omitted.

I can’t afford a lot of things. I don’t call it a crisis.

If you couldn’t afford a place to live you may feel differently.

I can't afford to live in NYC or SF or LA either, but that doesn't mean I can't afford a place to live.

If someone cannot afford to live in the most desirable locations in the world, but they can live almost anywhere else, that is not a crisis.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#75

Post by TedShiller »

zeraynor wrote: post #29
TedShiller wrote: post #24

Earlier quoted context omitted.

I can’t afford a lot of things. I don’t call it a crisis.

If housing was one of them you'd probably consider it a crisis.

Actually housing IS one of the things I cannot afford -- if you are talking about SF, LA, NYC, etc. But luckily for me and everyone else, those are not the only places one can live.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#76

Post by lazide »

zamfi wrote: post #49
lazide wrote: post #44

Earlier quoted context omitted.

I think you’re talking past each other a bit. The demand you’re talking about in the SF Bay Area is not necessarily driven by ‘butts in seats’ (aka actual people needing a roof and willing to pay a concrete price for it), but also by the cheap money narrative the FED has been feeding for a very long time. Which is what they are referring to in their post as having changed.

I don’t think we are talking past each other. There is absolutely a housing supply crisis in the Bay Area that is not reflected in the national stats. I’m not sure why so many people believe that housing prices in high-demand markets are dominated by things like interest rates — there is certainly an effect, sure — but by far the predmoinant reason a 2br house on a small lot with a small yard costs $2m+ in Palo Alto…

‘Demand’ includes availability of funds by potential buyers (and what they consider expensive) which is directly influenced by stock prices (which have seen major drops this year), and by interest rates.

The amount that can be loaned/supported by a given income, and hence a lot of underwriting standards, are based indirectly on the cost to service the loan relative to the income the person has.

The lower the interest rate; the bigger the loan someone can get if they shop around for the same income and assets.

This isn’t perfectly linear, as principal payments vs interest payments have different ratios based on interest rates, but it very much applies.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#77

Post by onlyrealcuzzo »

jelliclesfarm wrote: post #16

Unions. One of the major set backs for building more in Bay Area and San Francisco is not NIMBYism or zoning. It’s because construction unions have a big say with the counties and they have a big voice during elections. Anything that involves mortgages and the govt has to necessarily support unions and work with them. They don’t like modular homes as automation will replace union jobs.

> One of the major set backs for building more in Bay Area and San Francisco is not NIMBYism or zoning.

The Bay might be the worst major metro in the US for both NIMBYism AND current zoning in terms of building affordable housing...

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#78

Post by TedShiller »

oldgradstudent wrote: post #5

Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?

Don't assume there is even a housing crisis. Not everyone can live in NYC, that is a simple fact. Or LA, or SF. It's physically impossible. If you think building more housing lowers rent, then you've never been to a big city before.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#79

Post by novok »

TedShiller wrote: post #78
oldgradstudent wrote: post #5

Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?

Don't assume there is even a housing crisis. Not everyone can live in NYC, that is a simple fact. Or LA, or SF. It's physically impossible. If you think building more housing lowers rent, then you've never been to a big city before.

But building more housing does lower rent in big cities? It's status quo in tokyo, and it even happened locally where a mini-condo boom caused condo prices to stay flat around that area, while SFH house prices went up. Condos in other regions nearby continued to go up in price, where there wasn't a condo building boom.

Re: Solving the housing crisis requires fighting monopolies in construction (2020)

#80

Post by workingon »

TedShiller wrote: post #74
workingon wrote: post #48

Earlier quoted context omitted.

If you couldn’t afford a place to live you may feel differently.

I can't afford to live in NYC or SF or LA either, but that doesn't mean I can't afford a place to live. If someone cannot afford to live in the most desirable locations in the world, but they can live almost anywhere else, that is not a crisis.

The cognitive disconnect is pretty insane here. Affordability issues are a widespread phenomen. You may be able to remote work in a low cost of living area, but the type of people who have housing instability can't. They have to be supported by the shit-tier wages in the low cost of living area, which is why it's a low cost of living area. Except now the "low cost" housing there takes up more than half someone's income at a median job in Bumfuck, State.
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