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How Tokyo built its way to abundant housing

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Re: How Tokyo built its way to abundant housing

#91

Post by saosebastiao »

FreakyT wrote: post #37
maxerickson wrote: post #33

Earlier quoted context omitted.

The planning commission in my small town recently blocked a $10 million apartment building that would have mostly been cheaper housing. Some directly stated that they didn't want the poor people living in the area, which is stupid because they already live there (demographically it's already the poorest zone in the county). A few others said they didn't want to disturb the historical character of the shabby, decades…

> The real reason is that they don't consider reducing housing prices a good outcome. I think this is the key. If you're a property owner, any outcome that reduces the value of your property is naturally a negative outcome. A rational economic actor, in that case, would always oppose anything that would reduce housing costs. It's a tough problem to combat, because what can be done? Barring property owners from partic…

> It's a tough problem to combat, because what can be done? Barring property owners from participating in local governance?

Zoning shouldn't be local governance, because it's too easy to capture. It should be regional at the very least. A San Francisco politician doesn't have to care that most of the people working in his city have to commute 1hr+ to get there...that's someone else's problem. All he has to care about are the people in his own district. If he is given jurisdiction over a decision like zoning where a net negative to the region is a net positive for his constituents, he's going to make the decision that benefits his constituents. He shouldn't be given a decision like that.

Re: How Tokyo built its way to abundant housing

#92

Post by renw0rp »

kingofhdds wrote: post #56
renw0rp wrote: post #42

Earlier quoted context omitted.

while definitely pre-fabricated building were grey and ugly, they still look better than British council houses in London; especially after many of them, for example in Warsaw, got renovated, insulated, covered with plaster and colourfully painted.

Worth mentioning these pretty renovations happened well after the system which brought them stopped its existence.

that's for sure, mostly 10-15 years after. Doesn't change the fact that this never happened in the UK; old council houses are still ugly, energy inefficient and often mouldy inside... not to mention some awful&impractical design choices

Re: How Tokyo built its way to abundant housing

#93

Post by conanbatt »

Retric wrote: post #82
conanbatt wrote: post #80

Earlier quoted context omitted.

> I would posit that the best solution is state level control + an infrastructure tax on new development. Charging ~30k per SFH might seem to make things more expensive but by allowing new entry to pay their own way let market forces work while adjusting for externalities. Why should the new pay the burden of the new and the old together?

The old has already paid for a lot of infrastructure or their would be no roads etc. New people need both new and old infrastructure their property taxes offset the use of old infrastructure, but the added cost of new should be paid for by the people who need it.

The idea that the current residents have a right to extract a tax on the future ones is the basic motivation of nimbysm. Then come zoning controls, come construction controls, all those that make the new buildings more expensive to make, and the old ones more and more increasing in value, even at the decay of services or population.

Re: How Tokyo built its way to abundant housing

#94

Post by saosebastiao »

seanmcdirmid wrote: post #54
macspoofing wrote: post #40

Earlier quoted context omitted.

>Many supply restrictions are geographic rather than based on regulation. That's true. At the end of the day there are only so many desirable beachfront properties, or direct views on Central Park. Those are going to be expensive. >Singapore has a semi-socialized system that seems to work. I know very little about Singapore, but I'll make two comments: 1) I'm skeptical about the feasibility of models that work in tin…

Singapore is dense like NYC is, and, outside of its public housing program, is equally, if not more, expensive than NYC. Singapore is otherwise a very capitalistic country, and its housing program is basically ownership with restrictions that fade overtime. But more to the point: every super dense city I’ve lived in has had more expensive housing than the lesser dense cities I’ve lived in. Obviously something else is…

> Obviously something else is going on, density itself isn’t magic.

Of course it's not. You can have dense cheap cities (Tokyo, Chicago), dense expensive cities (Hong Kong, NYC), sprawled cheap cities (Houston, Indianapolis), and sprawled expensive cities (Palo Alto, Los Angeles). Density doesn't make a city cheap any more than it makes it expensive. Supply relative to demand does.

If you want a nearly perfect predictor of housing prices, don't look at density, look at the vacancy rate. The vacancy rate is probably the most direct way of measuring supply vs demand. If you have a high vacancy rate, you have a cheap city, and if you have a low vacancy rate, you have an expensive city.

The reason density is often touted as the solution is because increasing density is an increase in supply. It only moves the needle in one direction. Sprawl also moves the needle in that same direction. Cities with lots of space to move out have both options, and typically sprawl is cheaper. A city like Seattle or San Francisco doesn't have both options, so density is the only way to increase supply.

Re: How Tokyo built its way to abundant housing

#95

Post by Retric »

conanbatt wrote: post #93
Retric wrote: post #82

Earlier quoted context omitted.

The old has already paid for a lot of infrastructure or their would be no roads etc. New people need both new and old infrastructure their property taxes offset the use of old infrastructure, but the added cost of new should be paid for by the people who need it.

The idea that the current residents have a right to extract a tax on the future ones is the basic motivation of nimbysm. Then come zoning controls, come construction controls, all those that make the new buildings more expensive to make, and the old ones more and more increasing in value, even at the decay of services or population.

This tax is not going to increase the cost of a new home 1:1 as markets still exist. It's going to reduce the profit of a new home construction and thus the value of existing land. As the tax is very much levied on the person building the house not the person buying the house the person selling land is also going to take a hair cut.

Really I am saying local governments lose the ability to limit growth.

The ideal amount of growth is where the total cost of new construction balances the demand for new construction. I am simply including externalities as part of that cost. Any other system makes some group richer at the cost of everyone else.

Re: How Tokyo built its way to abundant housing

#96

Post by snidane »

renw0rp wrote: post #42
macspoofing wrote: post #23

Earlier quoted context omitted.

>Housing is in many places (mostly successful cities) the economic disaster. Fully exposed to financialization, business cycles, inflation prone. Rather than signalling to supply, prices adjust to whatever the median person can afford to pay Why should housing not be to governed by market forces? Housing shortages are due to regulations, from limiting new development outright, to limiting high density buildings, to h…

while definitely pre-fabricated building were grey and ugly, they still look better than British council houses in London; especially after many of them, for example in Warsaw, got renovated, insulated, covered with plaster and colourfully painted.

This is a reault of huge EU subsidies coming from Brussels/western Europe. Causing set of new problems in the region like making rich people and firms who can orient in the subsidy bureaucracy labyrinth. Which makes it quite similar to Soviet era economics where you had to be well connected to get around.

Re: How Tokyo built its way to abundant housing

#97

Post by Retric »

saosebastiao wrote: post #88
Retric wrote: post #83

Earlier quoted context omitted.

In my new system local government can't say no. Making that objection meaningless. They simply collect money from new people to pay for it, because it's very much needed.

Maybe theoretically that works. But it's still not fair in the way that you think it is. 100k people move in and several things happen: you need a new sewage treatment plant, new some more transit capacity, new schools, etc. You are proposing that the new people pay for this expansion. But you are neglecting the ways in which you benefit. By building more schools, each school serves a geographically smaller area, mea…

That's an agreement around what the tax should be not that it should not exist.

Re: How Tokyo built its way to abundant housing

#98

Post by conanbatt »

Qworg wrote: post #89
conanbatt wrote: post #79

Earlier quoted context omitted.

Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. The two single most important factors that make housing not behave efficiently as a market are zoning and taxation. Zoning because it puts limits on what can be built, which means the process to expand is now bureaucratic. The original article talks about how in tokyo zoning hasnt been a problem f…

No zoning is awful - just look at Houston. Factories and power plants build abutting residential neighbourhoods without any communal impact discussions. How do you properly price these impacts?

Good point. I do agree that a certain level of zoning is justified. Industrial vs residential is a solid example of that, as you say. However, give it the power to the local to block the future dweller and he will use it to his own benefit at the expense of the other.

Zoning should be more of a technocratic issue than a political one.

Re: How Tokyo built its way to abundant housing

#99

Post by conanbatt »

dalbasal wrote: post #86
conanbatt wrote: post #79

Earlier quoted context omitted.

Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. The two single most important factors that make housing not behave efficiently as a market are zoning and taxation. Zoning because it puts limits on what can be built, which means the process to expand is now bureaucratic. The original article talks about how in tokyo zoning hasnt been a problem f…

>> Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. IDK if you can just take that as a premise. I think we've had a body of evidence, hard to refute, suggesting that laissez faire markets improve industrial output.. substantially. Not necessarily pure laissez faire, but the effective systems seems to have effective price systems, and private pro…

> Housing...? I think that we've seen laissez faire markets can build a certain type of city (car-suburb) in certain conditions (green-field). In cities that already exist... IDk. Housing in europe is not that much better now that socialism is gone. The stuff in the house, way better. The house, nope.

I can't speak for europe's cases. Can you share some data, anecdotes or articles? Housing is also one of the things where every country has its own rules.

For example, in San francisco you have 3 story buildings galore, and in argentina you have 8 story buildings much like spain does. And yet both places, by similar criteria, restrict higher buildings: in SF they dont want taller than 3 stores, and in argentina they dont want anything taller than 12 stories.

Housing has also, globally, been part of a very particular cycle in the last 20 years. First the run up to 2008, and now a decade of rising city populations, pent-up demand and low interest rates.

> Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards.

More than half the population are owners, at least in the us and most countries I looked at. So no, they do not want ration cards. Moreover the biggest issue of implementing housing policy is that the locals are permanent but the visitors , even though they are more, dont stay long and dont have the capacity to vote. If San Francisco made a law about construction, and allowed any person that lived more than 1 year in san francisco in the last decade to vote, the renters, foreigners and visitors would land-slide any vote where the local property owners would like get their way. But because that is impractical and impossible, the locals get to put the rules, rules like prop 13, rent control, etc.

Housing IS unique en the aspects you say: land is limited, and thus deciding how to split it is a hard problem. Thankfully the solution old, known and consented by economists: just put a land value tax. Let every piece of land be responsible for the local taxes, and suddenly the locals themselves, being responsible for their expenditures, will vote for construction themselves.

Re: How Tokyo built its way to abundant housing

#100

Post by conanbatt »

Retric wrote: post #95
conanbatt wrote: post #93

Earlier quoted context omitted.

The idea that the current residents have a right to extract a tax on the future ones is the basic motivation of nimbysm. Then come zoning controls, come construction controls, all those that make the new buildings more expensive to make, and the old ones more and more increasing in value, even at the decay of services or population.

This tax is not going to increase the cost of a new home 1:1 as markets still exist. It's going to reduce the profit of a new home construction and thus the value of existing land. As the tax is very much levied on the person building the house not the person buying the house the person selling land is also going to take a hair cut. Really I am saying local governments lose the ability to limit growth. The ideal amou…

> This tax is not going to increase the cost of a new home 1:1 as markets still exist. It's going to reduce the profit of a new home construction and thus the value of existing land.

Reducing the profit of new construction increases the value of land, as it reduces the supply of housing. Study case, san francisco. It has a 0.1 supply elasticity: if rental prices went up 100%, construction units move by 10%.

Any tax that is put on construction reduces construction.

> The ideal amount of growth is where the total cost of new construction balances the demand for new construction. I am simply including externalities as part of that cost. Any other system makes some group richer at the cost of everyone else.

Your system makes local homeowners with very old large houses very rich: not for the house, but the land they have that appreciates because it is harder to build around it.

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