
Can Technology Help Fix the Housing Market? - pseudolus
https://www.nytimes.com/2019/01/29/upshot/can-technology-help-fix-the-housing-market.html
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resalisbury
Here's and oversimplified way to thing about the housing problem. It's 90% a
policy problem and 10% a technology problem. Todays technology allows you to
build economy housing for $200 / sqft. That's pretty much no different from
the 1960s when it also cost $200 / sqft. There has be no productivity growth
in the construction industry [0]. But that's not the real problem! In San
Francisco the median price per square foot is just over $1000 [1]. That's a
gap of $800 /sqft between the raw production cost and the market value. That
gap has nothing to do with technology and everything to do with policy
(zoning, historical association, neighborhood review, environmental review,
various other forms of NIMBYism). If we had a HUGE productivity boom in
housing production, we could maybe knock 50% off the construction cost. That
would save $100 per square foot. Only policy can help bring down the rest.

If you want to nerd out a bit, you can read Ed Glaeser who wrote a piece "The
Economic Implications of Housing Supply" which seeks to calculate the Minimum
Profitable Production Cost (MPPC) per square foot for every place in America.
He then compares that to the actual price per square foot. Anytime there is a
gap there is a huge public policy failure.

[0] [https://www.economist.com/leaders/2017/08/17/the-
constructio...](https://www.economist.com/leaders/2017/08/17/the-construction-
industrys-productivity-problem) [1] [https://www.zillow.com/san-francisco-
ca/home-values/](https://www.zillow.com/san-francisco-ca/home-values/) [2]
[https://pubs.aeaweb.org/doi/pdf/10.1257/jep.32.1.3](https://pubs.aeaweb.org/doi/pdf/10.1257/jep.32.1.3)

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resalisbury
This is the key line "the fundamental tension [is] that Americans want housing
to be both affordable and a good investment."

You can't have both! You cannot have your home be a good investment because
prices keep rising and have homes be affordable. We have a national narrative
that the best path to wealth accumulation is through home ownership. That is a
terrible terrible narrative to promote. You can make it true, but only if you
massively subsidize home ownership (which we do) and make in incredibly
difficult to build homes in desirable locations like most of California (yup
we do that too).

We need a new national narrative. Housing is not a tool for wealth
accumulation. A home is a place to live. The cheaper that place is the more
people will be able to live in one.

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anovikov
Start fighting zoning laws and you will pay for your housing with the time you
spend to commute - because traffic will become insane as cities will be
overfilled with people who will live in new unrestricted density communities.

There is no problem with housing costs. A median existing house in U.S., as
well as just in any country, is affordable for the majority of people. Problem
is concentration: there are few places where people want to live and costs in
these places are insane. And it has no fix because this is dictated with how
digitalized economy where almost every success is infinitely scalable, works.
Face it: housing is about social competition, 1% will pay a lot for their
places, 99% will be quasi-unemployed, that's how the future will look.

