
Oakland shows how to expand housing supply: tell developers they can build homes - RickJWagner
https://www.city-journal.org/oakland-rezoning-california-housing
======
arcticbull
The whole topic of conversation around housing affordability is backwards.
Specifically, housing affordability is 100%, entirely, a problem of artificial
constraints on supply by city councils.

(1) Americans consider housing to be an investment. An investment is only an
investment if you expect a positive return over time. We generally want that
investment to match or exceed inflation.

(2) That's antithetical to the idea of affordable housing. It's either
affordable _or_ an expensive, appreciating asset. It literally cannot be both
at the same time. The only reason it's worked thus far is the broad-based
expansion of the US economy and of specific population centers like SF has
masked the problem for many, many years. Especially in conjunction with
30-year mortgages requiring 2% down. That's some serious leverage.

We don't talk about the lack of affordable AAPL shares do we? That's insane,
it's an investment, we _want_ it to go up. The less affordable, the better!

(3) Renters tend to be younger, transient and not vote. Owners tend to be
older, wealthier, have deep roots in the community, and vote their asses off.
They also aren't huge fans of change. They vote their interests: whatever
keeps their, on average, largest investment performing well.

If you want cheap housing forget rent control. Allow developers to build up as
high as the infrastructure can sustain. Allow smaller units, too, micro-
apartments like whatever that place is on Mission, Panoramic. It's time to re-
think the idea of housing as an "investment." We need to re-focus the
narrative to make housing much more utilitarian.

This is reflected in major housing markets around the world, like Tokyo. They
don't consider housing an investment, and they have some of the most
affordable housing in any major metro in the world. [1]

[1] [https://www.vox.com/2016/8/8/12390048/san-francisco-
housing-...](https://www.vox.com/2016/8/8/12390048/san-francisco-housing-
costs-tokyo)

~~~
huntertwo
Two thoughts

1) Isn't a developer also making an investment when they build these high as
hell micro-apartment apartment buildings?

2) How do you avoid a race to the bottom in terms of housing quality when you
allow said micro-apartments? Do we want a culture where the poor are living in
barely livable wage slave pods while the rich are living in abundant villas?

I'm all for affordable housing but it seems too nuanced to allow market forces
to take care of it. I think the correct solution revolves around government
subsidized/funded housing but that's a whole other can of beans.

~~~
bonniemuffin
Currently the poor are homeless or enduring multi-hour mega-commutes or
stuffing a bunch of people into a single studio apartment. Well-located
"barely livable wage slave pods" would be a huge improvement for a lot of
people. I agree that the race to the bottom effect is a problem, but I think
even the worst-case scenario would still be better than our existing housing
situation.

~~~
wnissen
Correct. A fire in a nice, completely unremarkable neighborhood about 40 miles
east of San Francisco destroyed 4 units and made 35 people homeless. Almost 9
people to a home. And this is a solid 3-hour roundtrip commute from San
Francisco or Mountain View. "Dickensian" is the word for it. Not literally,
perhaps, because the housing situation in Dickens's time was even worse, but
there is human misery on a broad scale.

[https://www.independentnews.com/news/chestnut-street-fire-
in...](https://www.independentnews.com/news/chestnut-street-fire-in-
livermore/article_c8f2e59c-e2e0-11e8-b09c-731ef788e7f9.html)

------
balfirevic
I saw this tweet recently, by patio11:
[https://twitter.com/patio11/status/1199366332468224000](https://twitter.com/patio11/status/1199366332468224000)

"Tokyo has positive population growth of about 100,000 people a year, and
rents and home prices are roughly stable for last decade.

How? Outconstructing NYC. And LA. And SF. And Boston. And Houston.

Combined.

Every year."

~~~
papreclip
Tokyo is an 845 mi² megacity. Is population growth of 100k/yr something a city
should aspire to? At a certain point I feel like some kind of family planning
makes sense at larger levels of society just like it does with the family
unit. I don't look forward to the day when there are 1000 mi² of concrete and
20M people crammed together where San Diego used to be

~~~
balfirevic
If people want to come live there you can either build homes for them or they
will outbid existing inhabitants, housing prices will shoot up and less
wealthy people will have to move out.

Those are the options. You can decide which one you look forward to more.

------
raldi
See also: Friday's “Don’t Blame Tech Bros for the Housing Crisis” column:

[https://www.nytimes.com/2019/11/30/opinion/sunday/housing-
cr...](https://www.nytimes.com/2019/11/30/opinion/sunday/housing-crisis-
silicon-valley.html)

~~~
MarketRateSucks
Real galaxy brain take there. “Housing prices have always fluctuated,
therefore these fluctuations are unrelated to this other highly correlated
factor”.

Not that I disagree much with the substance of pointing out Prop 13, etc, but
you should also definitely blame tech for loading an entire industry into a
metro area.

~~~
helen___keller
> definitely blame tech for loading an entire industry into a metro area

Supply and demand gonna supply and demand. It's weird to "blame tech" for
existing and injecting a massive amount of jobs into our economy; there's _no_
metro region that could have handled that growth without the same effect on
price, and there is no singular entity responsible for concentrating tech into
a single city instead of distributed more evenly.

Maybe Houston could have come close to handling it without massive price
increases, but I'm guessing Houston is too spread out to enjoy strong network
effects, and probably would have become gridlocked with traffic to boot.

New York could have "handled" it, from a raw housing & transit perspective,
but the region is already pricy and all of Manhattan (which has the best
access to jobs and transit across the metropolitan region) has long since
gentrified, so I don't know if that really counts.

(Of course, part of the reason no region could have handled it is precisely
because of how Americans approach zoning and growth. Like our politics, our
cities and neighborhoods seem to be static until there's an absolutely
overwhelming force against the status quo, and even then sometimes that's not
enough to change anything)

~~~
mrep
I'm biased since I grew up in Chicago, but I think Chicago could have handled
it fine with the endless farmland to develop with housing especially if the
companies put their offices in high rises downtown as Chicago has double
decker trains that go from the suburbs to downtown [0]. We also love high rise
architecture so there are plenty of high rises to live in downtown if you want
to.

[0]: [https://en.wikipedia.org/wiki/Metra#/media/File:Metra-
System...](https://en.wikipedia.org/wiki/Metra#/media/File:Metra-System.png)

~~~
helen___keller
Growth only happens upwards or outwards. Your post seems to suggest that
Chicago still has both available, which is (pleasantly) surprising to me as I
was under the impression that every major american city had hit the limit on
outward growth (usually because the roads are clogged by traffic and there's
no political will to build more trains, so nobody wants more farmland
developed).

------
3fe9a03ccd14ca5
> _the city passed a series of neighborhood plans in and around downtown that
> relaxed zoning and removed parking requirements, making it easier and
> cheaper to build._

Wait, you mean deregulation isn’t just a republican talking point? And
restrictive city (and state) governments were the problem this whole time???

~~~
jayd16
Except its just as regulated, just differently. Its certainly not "the private
sector policing itself." Efficient regulation that conforms to need is not the
same as deregulation.

~~~
pitaj
Removing parking requirements = fewer requirements = less regulation =
deregulation.

Deregulation does not equal zero regulation.

------
earlINmeyerkeg
The reason midwestern cities hardly have housing bubbles like the coastal
areas do is because old housing is cheap and competes with renting. Landlords
can't afford to not be lenient. Although the only change I wish to see is that
tenants could more easily enforce their rights and Landlords had to follow the
law.

Most midwestern state governments are very laissez faire about the whole thing
which is incredibly annoying. Apartment cleaning is illegal to make tenants
pay for or withold a security deposit, yet they still do it anyway cause
landlords know tenants aren't taking them to small claims for it. As a tenant,
you need housing references. So taking your landlord to court over $100 is a
surefire way to making you ineligible for further tenancy basically.

Landlords don't like tenants that know and enforce their rights.

~~~
danans
> The reason midwestern cities hardly have housing bubbles like the coastal
> areas do is because old housing is cheap and competes with renting.

Sure, but isn't the reason that housing is cheaper because those cities don't
have anywhere near the level of demand that coastal cities have.

~~~
earlINmeyerkeg
Yes and I'm not denying that. Also the midwest hasn't seen radical
overvaluation of property that the coastal areas do. Since demand is so high
there, the value of the property is not determined upon is "worth," but on
someones ability to pay. You can see how that becomes a major issue when
things crash. Suddenly many people lose out on the value of the place they
paid for.

~~~
danans
> Since demand is so high there, the value of the property is not determined
> upon is "worth," but on someones ability to pay.

The monetary value of the something is by definition what the highest bidder
is willing to pay for it. How would you determine it otherwise?

------
iav
Oakland has built less housing per capita than SF over the last 5 years, as
mentioned in the article. Appears like a few big projects finished
construction and 2019 was an outlier year. The article implies this bounty
will continue by citing “15,000 units in development” but doesn’t mention that
SF has 4x as many “in development” and many projects linger in that category
for a decade and many never get built.

~~~
hkmurakami
For large projects it takes 3- 5 years to get through municipal approval.

------
exabrial
How to increase the housing supply: get the government out.

Places in California requires things like requiring all homes to have a high
amperage outlet in the garage for charging electric cars. Do you really think
people that are struggling to keep a roof over their head are driving a Tesla?

~~~
arcticbull
Yes, let's get the government out, of deciding how tall houses can be.

Removing the requirement for a high-amperage outlet (a tiny incremental cost
during building) is like an umbrella in a hurricane. Nice to have, but totally
doesn't solve the real problem.

~~~
ajkjk
I think that was an example, not the entire point.

~~~
exabrial
Lost on both of them. You should look up other useless stuff, like how many
outlets are required in kitchens.

~~~
arcticbull
My argument is many of these represent small incremental costs and even if all
of them were eliminated then affordability wouldn’t change in any appreciable
degree.

On the other hand increasing supply (even if somewhat more expensive in a per
unit basis due to regulations that neither of us can really say are good, bad
or cost effective) will.

It’s the easy win.

------
mr_tristan
I'm not sure what Oakland is doing is actually a major change. It's like
something just triggered the money to flow to finish a bunch of projects in
the east bay. But the spigot could just turn off again.

There's something broken in city planning that seems to be the largest hurdle
to addressing affordability. Cities seem to want to have a box with a label on
a map that doesn't change much. Then, if something changes within that box,
there needs to be this big massive process. The "real fix" might be figuring
out how cities can work on a smaller scale, not with these massive projects.

Just look at the report for the Oakland plan:
[https://cao-94612.s3.amazonaws.com/documents/FINAL_DOSP-
Publ...](https://cao-94612.s3.amazonaws.com/documents/FINAL_DOSP-Public-
Review-Draft-Plan_082819_Compressed.pdf)

I'm struck by how much it must have cost to even _generate_ that plan. And,
there's a ton of goals, but no feedback loop. As the plans are implemented
over the next _decade or two_ , how do they know what's going well and what
isn't?

------
xivzgrev
Not surprising. San Francisco seems to vote more owner friendly vs Oakland
which votes more renter friendly. For SF I thought the recent proposition E
was encouraging. It reduced zoning requirements on public zoned land for
affordable housing. It was first proposition I’ve seen that reduces zoning
requirements, it seems like a “toe in the water” for reducing complexity for
addressing housing. Of course one might argue fuck toes in water we are in
crisis, but given my first statement, I saw it as a trial balloon. Hopefully
we see more aggressive measures in next few elections

------
delfinom
Lacking from the article are the statistics for how affordable those homes are
and actual occupancy. Developers overwhelmingly love upselling to "luxury
homes" that are kept as investment deeds in someones closet. NYC for example
is building new apartments like bloody crazy, none of them are affordable to
anyone other than investors.

~~~
BurningFrog
The price of housing is determined by supply and demand, not the developer.

Building new housing lowers prices for _all_ preexisting housing.

~~~
maxsilver
> Building new housing lowers prices for all preexisting housing

This is not true in the US. Housing in the US is valued solely by the value of
the housing around it (called 'comps' or 'comparables'). Building new luxury
housing _raises_ the price for _all preexisting_ nearby housing, because your
comparables will now be based on whatever the luxury housing prices are (even
if your own house is very modest, even if your own house could never fetch a
similar price, even if you never try to sell your house)

This is one of the big reasons you see pushback by rational, logical, well-
informed residents in the US. Luxury housing _usually_ raises all non-luxury
housing costs nearby, simply by proximity. Is is effectively a form of
financial pollution. Some people's wealth is so obscene, that the mere fact it
exists in a physical location, punishes everyone else in proximity to that
location.

 _This is what Gentrification looks like in non-California, non-coastal
cities_. Wealthy people artificially inflate the value of property in an area
(which they can do, because there's never any limits or restrictions on
construction of any kind, so they always build the highest-cost highest-margin
property possible). And regular residents are now forced to bear that cost,
forever.

It is possible to continue this bubble, irregardless of any actual demand for
the housing, long after all real humans have checked out of the system. (See
2008 Financial Crisis). This process was not primarily driven by real people's
housing needs, but by private capital's desire to store or grow their wealth,
so real people have little control over it.

And, in non-Californian states like mine where property taxes are not locked
in, but are recalculated constantly based on "market comparables", the bill
for this financial pollution will hit you instantly on your next property tax
invoice. Luxury condos go up on your block? Congrats, the tax bill for your
old modest home is now doubled next year. Don't like it? Your only other
option is to rent the unaffordable shitty luxury crap they just built.

~~~
BurningFrog
> _Building new luxury housing raises the price for all preexisting nearby
> housing_

If this was true, you could create infinite wealth by just building more and
more "luxury" housing.

You will not find any economist agreeing with this "folk wisdom".

~~~
maxsilver
> If this was true, you could create infinite wealth by just building more and
> more "luxury" housing.

I mean, it works until the bubble bursts. But the last time that happened, the
federal government bailed out everyone participating in it -- they carefully
re-assembled the bubble, like nothing had ever happened.

So, uh, until federal policy changes, this sort of does just create infinite
wealth (on paper, at least).

~~~
BurningFrog
Then the government should just do that and replace a lot of taxes with this
income source!

------
itstartsnow
i have a plan small homes starting at 500sqft suitable for the x military also
our elderly most will have small 1 room apartments to help with living costs.
for every 2000 houses a collage will be built.max tuition will be $1500per
semester and every 4 years tuition will go down 25% until it is free. 1st
phase 150,000 homes priced approximtly 50,000 per home nothing fancy built to
last all solar power stage 2 300,000 homes stage 3 electric glide monorail
train coast to coast 2hr traveling speed of 2000 kmph change it starts now we
the people are not asking we are demanding

------
afpx
How much do you think it will affect housing prices? Is there a model that can
predict the effect?

I'll be surprised if it helps a lot. Demand seems infinite.

~~~
whack
> _Is there a model that can predict the effect?_

Yes, the model is called supply and demand. When you increase the quantity
supplied, the only way the extra quantity can be sold, is if the price drops.
If you increase the quantity supplied without reducing the price, the extra
units will never be sold. Why would they... anyone who was willing to pay the
previous price, would have already done so and will already have a home in
SF/Oakland. The only way to fill the new units is to entice new residents who
aren't willing to pay the previous price point.

~~~
afpx
Obviously. But, are you expecting a 10% decrease in prices, or 0.5%?

Why so defensive? I’m asking Because if it works, I’d like to sell the idea to
skeptics. We all lean scientific here, right?

~~~
pertymcpert
It's not him/her being defensive, it's basic economics that shouldn't have to
be explained...

~~~
afpx
Sometimes one has to understand intermediate economics ....

For instance, in cases of inelastic demand and low liquidity (like housing),
if prices are pegged at a maximum that buyers can pay, the actual equilibrium
price could be much higher. In that case, a small amount of extra supply will
not lower prices.

------
jelliclesfarm
How can we think of housing without considering resource constraints. It’s not
just space to build vertically that determines how many homes can be
built..it’s traffic, infrastructure, roads, water, power, schools, essential
services, public services, public spaces, community amenities..the list goes
on.

Urban density cannot keep on increasing. You cannot ‘keep on adding homes’. We
are already having very high costs of living and this also contributes to
unaffordability of Bay Area cities.

The only winner is the state which can get more property tax dollars in Bay
Area and other urban centers than elsewhere in California. Essentially a
handful of high tech dollar fueled California cities are subsidizing the
entire state.

This state will implode with this ‘high density is sustainable’ and ‘build and
they will come’ mantra. We are already having power outages, crumbling
infrastructure, increasing water rates, more and more tolls, high rents,
overcrowded schools and unending traffic jams. And the rent is nothing to
sneeze at..

The high density lobby is going to incinerate my state. Having already
witnessed the devastation this kind of building has caused in my home country,
this breaks my heart and frankly I am terrified for the future.

~~~
joe_the_user
_How can we think of housing without considering resource constraints. It’s
not just space to build vertically that determines how many homes can be
built..it’s traffic, infrastructure, roads, water, power, schools, essential
services, public services, public spaces, community amenities..the list goes
on._

High density living is potentially more efficient than low density living
(look European or some Asian cities, etc). Indeed, the US model of the low-
density mega-city is the thing that has become unsustainable - commuting from
city to suburb or suburb-to-suburb involves a huge amount of infrastructure
that is simple to build but expensive to maintain.

The problem of the US in particular is that low-density has had the upper hand
for so long that efforts to produce sane high density get sabotaged in a
variety of ways (look the difference in cost per mile of public transit in the
US versus Europe).

~~~
jelliclesfarm
You can also think China and eastern bloc. What people want is not high
density housing but high density luxury living. Every home is no less than
1200 sq ft and two cars and 2 kids if it’s a family..and a million dollar.
This is not sustainable high density. It’s a scam.

You can’t compare Asian and European (i have lived in both places)high density
building to what is touted in the Bay Area.

~~~
joe_the_user
There's little evidence that "people" all want 1200 sq ft houses in the US.
They are a zoning standard but a lot of zoning is a scam to push low density,
extensive development.

------
jelliclesfarm
I think there has been a very successful diversion of derision towards
‘Americans who own homes’ and ignoring the vast majority of foreigners who own
properties(both rent seeking and farmland) in the Bay Area as
speculative/investment properties that they have purchased sight unseen.

Deriding pensioners on fixed income whose taxes actually built the
infrastructure and schools and roads of the Bay Area is shameful..Whose final
home is not ‘speculative property’, but their retirement nest egg. Not
everyone has a pension from a public sector job.

Look into pension funds, foreign investors,insurance companies, university
investment funds ..and yes, Wall Street..who are literally raiding California
from the other side of our state to see how this inequality and
unaffordablility is caused. And the Govt in the state of California seated in
Sacramento is complicit in this.

On a broader scale, they are also stealing our water(example: family farms in
Paso Robles can’t grow their crops like alfafa and corn because of a water
moratorium because Harvard investment funds have bought acres and acres to
grow grapes in vineyards..and drilling wells at the fence line which makes it
legal but essentially taps into aquifers and water tables meant for the entire
region. 1500 ft when water was found at 300 ft.)

This is causing a divide between rural and urban causing the former to become
unliveable and increasing population pressures on highly dense urban hubs.

~~~
throwaway34241
What is the cause/effect here? You seem to be laying the blame at foreigners,
wall street, etc for causing the housing shortage, but the cause/effect of
voters/local governments prohibiting building housing -> housing shortage is
pretty straightforward, I don't see why pointing it out should be "shameful".

I don't think homeowners are a unified block on this issue, but specifically
the local organizations that put a lot of effort into preventing housing
during a serious shortage seem to reasonably deserve some criticism. In the
bay area even small proposals (like allowing 1 story of apartments over shops,
or some mid-density near transit) often get killed by groups that uniformly
oppose all housing.

~~~
jelliclesfarm
Is it a housing shortage or an excess of population in urban centers?

What are you going to do living like sardines in a can where high density
housing has been approved if there is a high cost to scarce
water/power/infrastructure and support services.

~~~
throwaway34241
The population hasn't increased tremendously, it's the price that has gone up.
So it doesn't seem like excess population is probably the problem.

You could lay the blame at demand for housing in cities (instead of supply).
It seems less possible to make housing affordable by reducing demand though.

I don't think it's wrong to dislike cities and to want to live in the suburbs
or countryside. But people will need to commute longer and longer and pay more
and more to landlords unless more housing is built.

I think what makes sense is for the cities to expand to accommodate the
demand, then be surrounded by suburbs. If the people who want to live in
cities can live there, that should make the suburbs more affordable. And there
is no way to have an affordable suburb right in the city anyway.

------
edoo
They forget the human cost. Increasing density decreases quality of life. The
people are the product of the cities in the commercial sense. The well being
of the people is lost in the drive for infinite growth.

~~~
marcinzm
You opinion on density is just that, your opinion, not everyone agrees.

Density means a larger selection of jobs, increased variety in entertainment
(ie: more likely to find something you personally love), increased selection
of medical professionals, increased variety in food, ability to avoid driving
commutes, kids who can self-manage without being driven everywhere, etc. To
some people that's worth more cramped living, to others it's not. Quality of
life is taken as a whole and not based on part of the whole.

~~~
dominotw
> You opinion on density is just that, your opinion, not everyone agrees.

Sure but curious why that comment is downvoted and yours is not?

Disagreeement != downvote.

~~~
epistasis
It's not stated as opinion, and has some ridiculous statements like this in
it:

> The well being of the people is lost in the drive for infinite growth.

There is no drive for infinite growth, that I have found. People are just
trying to have enough housing for everyone, yet this "infinite growth might
happen therefore we are going to impose housing austerity" is the attitude
that has been prevalent in older suburban homeowners, and that's exactly how
we got into this mess of a housing crisis.

Categorically dismissing the large number of people that choose to live in
cities because they prefer them is ridiculous. If it really were worse, prices
would be lower in the cities than outside them. More people want what cities
have to offer than are allowed to access them.

~~~
dominotw
> There is no drive for infinite growth, that I have found.

What about Carbon emission projections. Isn't that proof of 'drive for
infinite growth' ?

~~~
epistasis
That doesn't make sense, unless your definition of infinite growth is not
infinite.

Rather, I suspect "infinite growth" is a hyperbole to stand in for "everybody
has it as good as I do."

And carbon emissions are a particularly bad example of that because carbon
emissions are falling per person without a decrease in the standard of living
for people, or for the amount of useful energy they use in their lives.

