Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

thebignewsletter.com

Post reply on HN
Print view View original

81–90 of 223 posts

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

#81

Post by lapcat »

kaibee wrote: post #25
lapcat wrote: post #21

Earlier quoted context omitted.

> 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.

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.

> 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.

There's a chicken-and-egg problem here, though. Would you buy a new home and move in with no groceries or other stores in the area yet? If there's an existing community, then yes, stores will be built eventually, but that can't just happen overnight, so how do homeowners survive in the meantime?

That's why most new housing is built in the suburbs around existing cities. All of the amenities needed by homeowners are already nearby, or at least within reasonable driving distance. Starting a new community in the middle of nowhere would be extremely difficult, and would certainly cost a lot more money to the home builders, reducing profit.

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

#82

Post by nineplay »

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.

Property values are a small-to-none factor.

I don't want more noise.

I don't want more traffic.

I don't want more students at my kid's schools, which are already at a 35/1 kid to teacher ratio.

That's it for me. I think that's it for a lot of people, whether they live in cities or suburbs or far out in the country. Very few people want more crowding. The people who like living in dense cities already live there.

Blaming greed and property values is just a distraction.

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

#83

Post by linguae »

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.

Even with remote work, it may still be beneficial to live in or near a large metro area. From an American point of view, large metro areas generally offer many amenities such as a variety of cultural events (concerts, exhibits, festivals), a variety of shops and restaurants, international airports, a populace that is diverse and is more accepting of people from diverse backgrounds, expanded opportunities for education, and much more. Even if one chooses not to live in the Bay Area or New York City due to housing costs, there are still other desirable metro areas in the United States that offer these amenities and have lower (though definitely not low) housing costs. To add, if one could afford the housing costs of the Bay Area and New York City, there are many reasons to live in those places.

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

#84

Post by smcin »

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.

This on the same day that the SF Bay Area pulled its $20 billion housing bond from the November ballot [0], after objectors claimed the published costings were inaccurate. (SJMercuryNews: "The total cost, including principal and interest on the bond, is estimated at $48.3 billion and would take more than 50 years to pay off.")

Another relevant project is the Solano County ("California Forever") proposal [1], which is being dropped from the 2024 ballot but is still active (presumably for March 2026 ballot, when there will be gubernatorial primary and high turnout).

Also, after 2024 CA Proposition 5 ("Lower Supermajority from 66.67% to 55% for local bond measures to fund housing projects and public infrastructure")[2] has been voted on. (It's also being challenged by the Howard Jarvis Taxpayers Association.)

We will be able to compare timelines/costs/delays between the two development proposals and get answers on whether costs/delays in CA homebuilding are primarily due to the homebuilder, the city/county, CA state, the development process in general, or nearby residents' objections. The Solano County proposal is more greenfield and seems to have more supporters and fewer existing homeowners to object, so this outcome should be interesting and informative. (Of course, it's a distinct possibility that both proposals get killed politically, which would also give us the answer that it's not really about costs or timelines, and that a vocal minority of existing homeowners/landowners can game the process to pretty much kill any proposal, regardless how antisocial that might be.)

--

[0]: https://www.mercurynews.com/2024/08/13/20b-bay-area-housing-...

[1]: KQED Forum "What’s Next for California Forever’s Proposal to Build a New City in Solano County" https://www.kqed.org/forum/2010101906729/whats-next-for-cali...

[2]: Ballotpedia: CA Prop 5 https://ballotpedia.org/California_Proposition_5,_Lower_Supe...

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

#85

Post by nineplay »

dnissley wrote: post #67
aorloff wrote: post #50

Earlier quoted context omitted.

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.

> I agree, and I think even the folks who are against that would actually end up enjoying it more

That's a pretty remarkable belief. Many of us happy suburbanites have lived in large dense cities in our younger days. We are not ignorant of the joys of city living, we've just changed priorities.

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

#86

Post by chgs »

nineplay wrote: post #82
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.

Property values are a small-to-none factor. I don't want more noise. I don't want more traffic. I don't want more students at my kid's schools, which are already at a 35/1 kid to teacher ratio. That's it for me. I think that's it for a lot of people, whether they live in cities or suburbs or far out in the country. Very few people want more crowding. The people who like living in dense cities already live there. Blam…

Presumably double the density you also double the size of the school and double the teachers.

If you don’t, the problem isn’t the density.

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

#87

Post by chgs »

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

Barcalona is a terrible place to live due to mass tourism that the intenet has enabled.

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

#88

Post by jmyeet »

So you see a problem like this and your reaction generally falls into one of three buckets:

1. There is no problem. This is working as intended. Everything is fine;

2. There are a few bad apples on an otherwise good and functioning system; or

3. The entire system is fundamentally broken.

To blame the "homebuilder cartel" sounds very much like (2) to me. My view is that the entire system is broken and it goes back to enclosures and private property borne from capitalism and liberalism, respectively.

Liberalism is the deification of individualism, implicitly rejecting any sort of collectivism. A key pillar is the idea of private property, that is the ability to acquire and maintain a state-backed exclusive use of land well beyond your personal needs.

Capitalism is really the evolution of feudalism and the origins were in England with the Enclosure Acts [1]. These transformed land use for grazing by all to people having exclusive use thereof. You might hear as a counterargument things like "the tragedy of the commons". Interestingly, this term originated in 1968, some 350+ years later.

I bring this up because when I see people hoarding land and people voting out of narrow short-term self-interest to restrict supply and reduce housing in order to increase housing costs, I don't necessarily see that as a failure of government or the fault of a few bad actors. I see it as inevitable given our economic system.

So much of history can be viewed as simply a land grab.

I don't expect our economic system to change anytime soon but the governmentr can do a lot to alleviate this. At a minimum:

1. Ban single-family house zoning in urban areas. Multi-family units should be legal anywhere within city limits;

2. Stop subsidizing suburban expansion to the degree we do by building roads to a ridiculous degree;

3. Build public transit infrastructure. For the successfully-propagandized Americans who will fight this because "it'll raise our taxes", people on trains will make it faster and more convenient for you to drive. Literally everyone benefits.

4. Punitive taxes on non-prrimary residences (ie investment properties, second/vacation homes); and

5. Get rid of tax breaks for home buying.

I have zero confidence any of this will happen.

[1]: https://www.thecollector.com/what-were-the-enclosure-acts/

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

#89

Post by chgs »

sroussey wrote: post #75
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…

Seems like the developer wasn’t the problem.

Yes the inability for society to tax the land is the problem

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

#90

Post by ssimpson »

toomuchtodo wrote: post #22
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.

The fix is to enshrine remote work for jobs that can be remote (labor regulation and whatnot), enabling labor mobility to where housing is affordable, but the ideological challenges prevent that. So, instead, we gnash teeth and say there is no solution while we slowly build more housing stock and hope that'll catch us up eventually. It will, eventually, as immigration slows, and the death rate exceeds the birth rate…

In the US, per state employment regulations can hamper this as well.
Post reply on HN