
Construction has kept rent in Chongqing, China to $75 a month - CryptoPunk
https://www.nytimes.com/2019/04/11/world/asia/chongqing-china-employment-ford-youth.html
======
tim333
I stayed in Guangzhou and was struck by how differently they'd handled housing
compared to London or SF. Basically there were a lot of approx 35 story
similar tower blocks and most people used public transport/taxis rather than
having cars. There's really no reason why London/SF couldn't do that apart
from government policy. I live in London and like it but wonder if having all
the property being some silly multiple of wages is the best way to do things.

This kind of stuff [https://www.scmp.com/magazines/post-
magazine/article/1761639...](https://www.scmp.com/magazines/post-
magazine/article/1761639/guangzhous-changing-face-city-its-people-cant-
recognise-any)

You'd want to put them in kind of nondescript areas to avoid taking out the
historic stuff as mentioned in the article and maybe pay out 50% above market
to existing buildings in the way so they are not too pissed off but it could
be doable.

~~~
rayiner
> You'd want to put them in kind of nondescript areas to avoid taking out the
> historic stuff as mentioned in the article

It’s amusing to suggest there is “historic stuff” in SF, as there is in China.
I saw a “historic” building with a plaque in Palo Alto. It was constructed in
the 1900s! Like, after my grandfather was born.

Historical preservation is stealing from the future. If I had my druthers, the
opportunity cost of designating buildings or areas as historic would come
directly out of the pockets of the preservationists.

~~~
csomar
> Historical preservation is stealing from the future.

No, it is not. SF problem can be fixed with a few blocks. A 35 stories
building with 1 bed-room condos can host up to 700-1000 persons. I'd bet lots
of SF tech developers will opt for a very small high tech condo with amenities
(pool, gym, library...) than the crap that is right now.

Say you build a hundred of these. That's 100K person and more than 10% of the
population of San Fransisco. You plot the land 10 miles south of the downtown.
You make a fast, efficient and new subway that connect from the plot to the
downtown.

It is easy considering that the Chinese, Korean, and Japanese are doing it
everyday. SF has the money, land and tech to do it.

~~~
incompatible
Are blocks of 35 story buildings the best that can be done? Perhaps some of
the arcology designs from historical urban design and scifi could be tried
instead.

~~~
csomar
Sure. But you don't need that. You can do what people around the world have
already done and there is ready tech for that.

~~~
incompatible
Yes, I guess we should prefer to go with tried and tested solutions and never
try anything new. Now where did I leave my abacus?

It will be interesting to see which cities do the best in future: the ones
that try to house large numbers of people at low cost? The ones that are
quickest to adopt new ideas? The ones where billionaires prefer to live? Who
knows.

~~~
csomar
That's not what I'm saying. The best is to try new innovative ideas. But if
you are in a hurry and your house is a mess, at least start with the
traditional house cleaning and then move from there.

------
baron816
So much of the arguments over housing contain some sort of slippery slope
statement of "I don't want my city to become Hong Kong or Dubai." But imagine
if SF/SV started building housing that looked a lot like Amsterdam
[https://www.jetsetter.com/uploads/sites/7/2018/04/lVBcs3gf-1...](https://www.jetsetter.com/uploads/sites/7/2018/04/lVBcs3gf-1380x690.jpeg),
Paris [https://c8.alamy.com/comp/RR1A0X/elegant-parisian-
apartment-...](https://c8.alamy.com/comp/RR1A0X/elegant-parisian-apartment-
block-along-rue-raumur-paris-france-RR1A0X.jpg), or even New York
[https://static01.nyt.com/images/2014/05/11/realestate/201405...](https://static01.nyt.com/images/2014/05/11/realestate/20140511-EXCLUSIVE-
slide-2S7H/20140511-EXCLUSIVE-slide-2S7H-master1050.jpg). Those 5-10 story
town houses are far nicer than anything that exists in SF and would provide a
huge boost in density. Sure, it would be hugely expensive to recreate
something that nice today, but the point is that you can create a beautiful,
dense city without going really tall.

~~~
jetrink
I completely agree that those areas should allow more 5-10 story buildings,
but let's not kid ourselves about what they would look like. They would be
One-Plus-Fives [1].

1\. [http://archplanbaltimore.blogspot.com/2015/03/how-one-
plus-f...](http://archplanbaltimore.blogspot.com/2015/03/how-one-plus-five-is-
shaping-american_27.html)

~~~
ema
This is a question to which I haven't found a satisfying answer yet: why do
old houses look better than new ones?

There are answers like "only good looking houses got preserved" or "it's just
perception, in a hundred years people will love the houses being build now as
much as the houses which were build in the nineteenth century". I don't really
buy such arguments. I had some musings about people no longer caring about
living in a beautiful house because with fast transportation there is less
incentive to make a good impression on your neighbors. Or maybe it's something
about craftsmen making less design decisions because of more planing and
prefabrication. But these too are just speculations.

~~~
chillacy
Are you just musing to yourself? That is, is your question "Why do old houses
look better [to me] than new ones?" or are you polling the public?

If you're polling the public, taste is a real thing too, modern architects
have a different aesthetic. Same shows up in clothing: a simple waterproof
polyester jacket from uniqlo vs a hand-sewn trench coat with a million
features like epaulets, grenade rings, gunflaps, etc.

------
lquist
Wait so you’re telling me that increasing real estate supply can help control
rent inflation!? SF take note

~~~
njepa
It isn't just supply though, but essentially inequality. Chinese cities have
completely different demographics than western cities. If you want to live
somewhere popular in China rents, and real estate values, are rapidly
increasing.

Housing isn't like manufactured goods where the marginal cost decrease the
more you make. Since the more you build in one area the less available space
there is. If you want to decrease cost you have to supply more space.

Still that is only the supply side. As long as there are people, or even an
increase of people, that are willing to pay it never becomes affordable even
if there are comparable.

~~~
hellcow
> Housing isn't like manufactured goods where the marginal cost decrease the
> more you make. Since the more you build in one area the less available space
> there is. If you want to decrease cost you have to supply more space.

This was probably true in 1750, but today you can build up. A 2000 SQ foot
home can become a 40,000 SQ foot tower.

~~~
fulafel
Marginal building cost per unit of space increases in this case.

~~~
dmoy
Right but sometimes the super expensive part is just the land it's built on.

My unit has a construction cost that's significantly less than half of my
unit's total value. The tiny one story ramblers across the street all sold for
over a million a pop, but the houses were worth ~negative to the purchaser and
got torn down and replaced.

------
quotemstr
Of course housing is subject to the iron law of supply and demand. It's
remarkable that so many people find seemingly-reasonable justifications for
denying it.

There must be a name for this pattern, which occurs in areas of life as varied
as technical debates, climate science, and health. The common thread is that
there's some strong effect that smart people would prefer not to be true and
that these smart people spend an inordinate amount of time and social capital
finding seemingly-rational justifications for denying this strong effect. The
result of this high-IQ motivated reasoning is an impenetrable mess of dueling
blog posts, cherry-picked studies, and sophisticated personal sniping that
leads regular people to throw their hands up in confusion and do nothing.

An example of this effect: the "zombie claim" (an idea that keeps circulating
after being debunked, mostly because it's rhetorically useful) that building
housing doesn't decrease prices because developers build only high-end
housing. Granted, this effect might be true for very limited times under very
limited circumstances in some special region of the supply curve, but it's
clearly not a general principle. But there are just enough studies purporting
to show this effect that people who want to block housing in general can point
to some official-looking LaTeX-typeset thing and say "Look! Economics proves
that construction doesn't lower prices!". By the time someone gets around to
reading that article and commenting, "if you read beyond the abstract, the
article it doesn't say that...", someone's already made some _other_ blog post
with the same discredited idea. It goes on and on and on and on and on.

I've become increasingly convinced that the whole scientific and rational
enterprise only works in collaborative mode, when there's some shared desire
to find the truth. You can never convince someone of something by using reason
and evidence, and your counterparty will suspect (rightfully so!) that your
"evidence" is just the sort of rhetoric-disguised-as-dialectic that I'm
talking about.

It's a dismal conclusion.

~~~
moosey
> You can never convince someone of something by using reason and evidence,
> and your counterparty will suspect (rightfully so!) that your "evidence" is
> just the sort of rhetoric-disguised-as-dialectic that I'm talking about.

I personally agreed with your general idea, but the place where we are today
was developed intentionally via propaganda systems designed to question the
validity of expertise. If a person believes that government bureaucrats are
all ineffective, that vaccines are dangerous, that all scientists believed a
new ice age was going to start back in the 80's, then it is very easy to deny
anything that experts say, and that your gut is right most of the time. This,
of course, couldn't be further from the truth.

There are huge swaths of humanity that are willing to change their opinions
based on the presentation of evidence. What is clear is that they are not good
at generating enough political power to start the grand collective ideas that
are necessary to fight homelessness locally (I know that I'm having trouble
pushing housing first ideas - I think that Americans are punitive,
culturally), or to fight climate change globally.

Still a dismal conclusion.

------
ackbar03
I think that kind of breathing room is also important for fostering
entrepreneurship. I moved to China from Hong Kong, you do have some people
bumming around but you also have some pretty bright people who quit their jobs
to really grind and work on a business idea. I can't imagine doing that in hk,
pretty soon your just priced out of soaring rent and cost of living

------
baybal2
Some times I feel that HN is a real estate forum. People, why are you so
crazed about housing? :)

I have following thing to say about real estate in China as a person who's
been going in and out of China for last 12 years: conventional supply and
demand economics fail to rationally explain the market, alike many other
things in the country.

There are big cities with really constrained supply, not unlike California,
and still having low rents, and there is Shanghai, with new suburbs and
microdistricts popping up every year, but still having highest rent in China
despite high vacancy rate even in the city centre.

Housing in China is also a very emotionally charged topic. A lot of status
connotation is attached to it, and there is peer pressure like "no wife for
you without a house."

Most Chinese I meet can't conceal their bemusement when they see foreigners
being so unconcerned with housing issue. These people don't know that in most
of the world, renting an apartment, and moreover luxury one, is more expensive
than paying for mortgage, and are utterly shocked when I show them the digits.
Chinese don't realise just how blessed they are with low rents.

And yes, there are still Chinese out there who are shocked discovering that
"most Americans are still living in wooden houses," and that ones who live
there tend to be richer than ones buying highrise apartments.

~~~
seanmcdirmid
Beijing isn’t as hot as Shanghai real estate wise, but I could never get my
head around how an apartment that would sell for a million dollars would rent
out for just 10k RMB/month. Why would anyone even bother buying with such
lousy rent to sale ratios?

Anyways, I saved a lot on rent during my 9 years in China.

~~~
reaperducer
_Why would anyone even bother buying with such lousy rent to sale ratios?_

You weren't a tenant. You were a placeholder.

Your function was to pay enough money for the owner to pay the property taxes
and maintenance until the value of the home rose to a level where it was worth
selling.

I live in such a place. The Chinese woman who owns my house is just waiting
for the market to reach the right price point where she can sell.

In the meantime, my function as a renter is to keep the place clean and safe
and do basic maintenance. That's not what's spelled out on the lease, but at
an abstracted level, I know that's what I am to her.

~~~
seanmcdirmid
I got the opposite idea from my landlord, he said something like “prices are
too high right now so no one is buying”.

Chinese real estate is bizarre.

~~~
osdiab
I heard the market for buying is different than many other places because of
the social pressure to own - when a man marries for example they often need to
have a house, or else it could put the marriage in jeopardy, in effect
increasing the value of the property beyond the value of a place to live;
extended families are willing to pile on to help a young person afford that
house, so owners know they can overcharge for their properties. But idk how
true that is/how much it explains the crazy divide between rent and sale
prices.

------
bearjaws
Wow when you don't treat housing as an investment it turns out that prices
reach sane levels? Who knew?

~~~
xvedejas
It's impossible to treat housing as an investment when so much is being built
every year. There's no scarcity. In Japan, and probably also China, houses are
depreciating assets.

~~~
zanny
There is tremendous housing scarcity where housing is scarce and in demand,
such as with transit access to major metro areas.

The depreciating housing is in places people don't want to live. In general
modern societies are centralizing in cities to a degree never before seen, but
that migration is stymied by catastrophic amounts of NIMBYism and regulation
holding back density.

In Tokyo most properties don't depreciate that much if at all, and modern
Japanese building code means new structures are much more permanent and last
longer. It takes time for the culture to shift as with all things, but the
Tokyo metro won't stay contrarian to every other metro for long - its been
trending away from the always-deprecating building for over 30 years now.

~~~
mcguire
Back in the late 80s and early 90s, Japan introduced 100 year mortgages
([https://www.sciencedirect.com/science/article/abs/pii/106195...](https://www.sciencedirect.com/science/article/abs/pii/1061951895900047)).

Then the economy went into a multidecade slide.

------
mcguire
Chongqing:

Apartment (1 bedroom) in City Centre 307.91 $[1]

Average Monthly Net Salary (After Tax) 825.35 $[1]

37%

San Francisco:

Apartment (1 bedroom) in City Centre 3,386.72 $[2]

Average Monthly Net Salary (After Tax) 6,497.75

52%

Oklahoma City:

Apartment (1 bedroom) in City Centre 857.50 $[3]

Average Monthly Net Salary (After Tax) 2,639.56 $[3]

32%

[1] [https://www.numbeo.com/cost-of-
living/in/Chongqing?displayCu...](https://www.numbeo.com/cost-of-
living/in/Chongqing?displayCurrency=USD)

[2] [https://www.numbeo.com/cost-of-living/in/San-
Francisco](https://www.numbeo.com/cost-of-living/in/San-Francisco)

[3] [https://www.numbeo.com/cost-of-living/in/Oklahoma-
City](https://www.numbeo.com/cost-of-living/in/Oklahoma-City)

~~~
foota
Not sure exactly what your point is. Oklahoma City has a density of 235 people
per square mile according to [http://www.usa.com/rank/us--population-density--
metro-area-r...](http://www.usa.com/rank/us--population-density--metro-area-
rank.htm). San Francisco's is 1300.

Of course it's cheaper to house people when land isn't scarce.

~~~
Hello71
Not sure exactly what your point is. Chongqing has a density of 960 people per
square mile according to
[https://en.wikipedia.org/wiki/Chongqing](https://en.wikipedia.org/wiki/Chongqing).

~~~
foota
The wikipedia entry (and the official entity?) is closer to a US state or
large county, with a size of 31,000 square miles (this would put it at ~the
40th largest state).

If you take the urban population listed there and divide by the listed urban
area you get 4,250. A bit above 960.

------
AFascistWorld
Using Chongqing as example is kinda cheeky, it's a west side big city, but a
rare one in which speculators haven't found the runaway success seen in other
ones.

~~~
seanmcdirmid
Chongqing is crazy overbuilt, which is weird since everything is so hilly
there (think Seattle or San Francisco and then add even more hills). A lot of
the speculation is along the lines that China is quickly urbanizing and
farmers will eventually buy these apartments, but the farmers aren’t really
rich enough to support the returns the speculators are looking for.

Chengdu is probably in a similar boat to Chongqing. Well, any tier 2 city
actually.

~~~
dis-sys
> Well, any tier 2 city actually.

Just came back from Hangzhou, the entire city is flooded with people in their
early 20s. I think the speculation is mainly on those annual 10 million
university graduates joining the workforces. Farmers are not going to buy
those apartments in tier-2 cities, their sons/daughters with university
degrees sometimes at postgraduate level are the ones buying.

~~~
whoevercares
Hangzhou is tier-1, for sure.

~~~
seanmcdirmid
Effectively ya, officially no. Zhejiang is rich in general.

------
klrr
Just want to shime in and recommend you to visit Chongqing. Incredibly
interesting city to explore, great food and still has some rural China vibe
that the other first tier cities start to lack.

~~~
_kyran
Anywhere in particular you would recommend exploring for a future visit?

I was there for two days earlier this year and felt like I just scratched the
surface.

------
swiley
Are there any countries that do this and don't have really scary censorship
and speech policies? I'd definitely want to live somewhere like that. It
wouldn't be hard to end up financially independent in a place like that on a
SWE salary.

------
g9yuayon
Isn't this simple supply and demand? The housing price is too high? Build more
houses or apartments. Yet San Francisco authorities tried every possible way
to suppress supply: rent control and all kinds of regulations, to say the
least. So much for so called "we fight for poor people".

------
billfruit
I wonder how the traffic is like in these large Chinese cities. In India, esp
Bangalore traffic and the crowding in the streets has grown up astronomically,
and the road system can barely handle it.

~~~
mixmastamyk
Currently the top comment:

"Basically there were a lot of approx 35 story similar tower blocks and most
people used public transport/taxis rather than having cars."

My understanding is that traffic does increase until a certain threshold of
density is achieved and then it craters from there. Cities should probably be
designed just above that.

------
redm
I think a more appropriate comparison is Chongqing and Tokyo.

------
Canada
Article makes me wonder if author ever set foot in Chongqing

------
LoSboccacc
and population control, that's an important factor controlling demand trough
time

~~~
swiley
The result of Chinese population control is a significantly higher number of
men than women. I'd personally rather pay more rent than live somewhere like
that.

~~~
LoSboccacc
of course I agree with you

