"Why Tokyo is the land of rising home construction but not prices" https://www.ft.com/content/023562e2-54a6-11e6-befd-2fc0c26b3...
An overview of zoning practices there: http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
However there’s no reason to think that would fix it all, transportation planning, design, and funding is almost entirely a state and federal affair, and the nimbys still torpedo all sorts of things that would be great for the region at the expense of a particular neighborhood or block.
To some extent though, that’s a feature of democracy, not a bug. There are a bunch of reasons we’re in the mess we’re in, and federal programs and subsidies contribute a lot. The threat to take away federal funding for places that don’t accept housing growth may be more effective than a brute force approach in the end, who knows.
I believe this is similar to the approach the feds used to move the drinking age to 21 , and the old nationwide 55 mph speed limit . They didn't force states to create laws, just said "Federal highway funding will be drastically reduced to states that do not meet X" and magically, this was done.
The amount of propaganda that would be pushed out to crush any changes to zoning would be on historic levels.
Renters are a growing political force.
Renters (often under rent control) are NIMBYs as well, don't understand or are convinced that supply and demand don't apply to housing.
This is a very SF-specific view of the world. :)
Rent control is specific to just a handful of locations and is often subject to statewide restrictions (e.g. Costa-Hawkins). In general, renters are less inclined toward NIMBYism. This is especially true for the younger ones, who don't benefit as much from RC even in the locations where it exists. And even rent controlled tenants don't like the fact that they can't move.
So, if it's “almost exclusive” to any pair of states, it's New Jersey and New York, not NY and CA.
(The source is also inaccurate in at least one respect, in that NY by the description given on the page and CA due to Costa-Hawkins both meet the criteria for a “Yes” in State Prohibits or Preempts Rent Control column, but both have blanks in that column.)
Depends on how home rule is set up in that state's constitution.
Because of strategic (cynical?) choices over how voter registration is implement, tenants have far less power at the polls.
But my point is that, suppose you are a low income neighborhood and the state naturally wants to blow up your houses to put in a freeway — because they know they can’t get it put through the rich neighborhoods. Shouldn’t you still have the right to fight that?
Would it? I feel like this has Commerce Clause uber alles written all over it.
In other words, don't ask me. Ask SCOTUS. They've used the Commerce Clause to justify regulations on activities that were far less obviously about interstate commerce than zoning is, most famously in Wickard_v._Filburn, which restricts a farmers right to grow wheat on his own property for his own consumption, which, according to the court, is indeed an example of interstate commerce.
My statement, in other words, has nothing to do with my own interpretation of those rulings. It's merely an acknowledgement of them. It's not difficult to think of ways in which local zoning restrictions affect national commerce. And that's been good enough for the Court in the past, it seems.
The constitution limits the authority of what the Federal government can do in the US and delegates everything else to state and local governments.
This HUD effort would be more minor, something like removing some zoning restrictions in order to get federal dollars. The existing political entities (probably cities) would then have to pass those rules to get the money.
Just because the restrictions on this are not in the federal Constitution doesn't mean they don't exist; just as the federal Constitution has rules on State-Federal power balance, State constitutions often have rules on State-local power balance.
State Constitutions are usually procedurally easier to amend than the federal one, though, so, the barriers, though real, are smaller.
I wonder about a state law creating a new type of township that is totally subordinate to the county (dissolving all functions of the township). Would it be a good thing? What are the pitfalls, etc.
It's not like housing would become more affordable anyway, Seattle only builds luxury housing for the rich (and they're having a hard time filling these units!).
They only build luxury housing because housing supply is restricted and the rich can outbid the poor for that restricted development.
And no, they aren't having a hard time filling units.
Seattle Times says otherwise.
Apparently in Boston contrary to concerns luxury high rises didn't act as gentrification locuses but stemmed its tide in other areas instead.
I wish. If that was true I'd be much happier with politics than I am.
Except that, AFAICT, didn't happen. (Though there is a current challenge to the Constitutionality of the Medicare changes, among other things.)
You may be thinking of the mandatory (for continued state participation in Medicaid) expansion of Medicaid portion of the ACA being made optional rather than mandatory by the Supreme Court.
Of course, one could argue that is an example that is arbitrary and, while it certainly evidences judicial limits, is hard to connect to it's Constitutional pretext, as it explicitly requires that both pre-expansion Medicaid are post-expansion Medicaid are Constitutional federal programs, but that Congress is somehow barred from replacing one with the others except by consent of the individual participating state.
It's folly to compare zoning rules when the spirit of the law is so different.
However, YIMBYs only want half of that -- they want Japanese zoning, with American infinite appreciation. Which is disastrous to basically everyone who works for a living.
I'd appreciate a source on this. Most self-identified YIMBYs I've met in San Francisco would be ecstatic if housing prices stabilized or fell – in fact that's one of their primary objectives.
Vocal YIMBYs I've met are either (1) young people who don't own property, for whom the current stratospheric prices are out of reach, or (2) employers who have to convince those young people to come and work in the Bay Area, despite the unbearably high cost of real estate.
I'm certainly not arguing that some markets need resetting, but as parent says, this isn't what the people who want this want. They'll sell progressively crappier and crappier property because that's what property markets will bear when unregulated.
The only way to depreciate without lowering quality is area decline. Sounds awful but I honestly think some places need this. If they keep growing, keep sucking in high paid jobs, the lower classes (that the upper classes need) won't be able to afford to live where they need to.
You might argue that it might become self-limiting based on what the market will bear... But looking at London, and the awful living conditions at the bottom end of the market only confirms that once you have critical mass, and people need to live somewhere, vendors and landlords can get away with murder and somebody will still chuck money at them.
Also, Japan is NIMBY at the national level, as in "not on my island". For instance, accepting few refugees.
Smart in other ways, not just the zoning, you see. They protect their culture.
People are racist and xenophobic, we know that. It’s not xenophobic to point out that, within a democratic framework, peoples’ racism and xenophobia, coupled with a hetrogenous population, could make it difficult to implement policies that more homogenous populations implement successfully.
For example, one mah argue that our justice system is strongly influenced by racism (an uncontroversial assertion, I think) and that’s a major reason why our voters prefer harsher sentencing and more aggressive policing than in Western Europe.
Would you care to provide some substance to this claim? You're tarring over a hundred million people with a very nasty brush.
But I would agree that Japan is generally racist, as in most Japanese believe there are fundamental differences between people due to what they call race. I am not sure whether most Japanese would consider Korean a different race, but I would not be surprised either.
For an example of how this affects who can live where and how where one lives affects non-residential opportunities, you can read up on burakumin (a disfavored heredity pseudo caste). Burakumin status still exposes one to highly non-trivial societal discrimination, and is primarily observable based on “Have you or yours ever lived in a burakumin neighborhood?” This makes e.g. historical maps which mark out burakumin neighborhoods into socially contentious informational hazards; Google Maps had to take them down after a (utterly well founded) fear that at least some employers and schools would cross-reference neighborhoods with current or historical applicant residential addresses and then go full Harvard University on them.
Similar observations can be made about ethnic Koreans, Japan’s rapidly growing population of long-term resident foreigners, etc.
The actual numbers are not known because they aren't collected as part of the census, but the government estimates that upwards of 98% of the population is "ethnically" Japanese. Furthermore, many of the ethnic Koreans that you mention, as well as ethnic Chinese (the next biggest group, as I'm sure you already know), are culturally fairly assimilated, even if many are second class (non)citizens in the eyes of laws and much of society.
A major factor there is the lack of cars (and higher buildings to wall out car noise from highways) compared to where I live, but even so people are just quiet. It was weird for a while, but coming back to the states I really miss it.
So it helps, but it may not account for all of it.
All of these factors (and more) result in the housing economy you see in Japan. HN people love to fixate on zoning, but it's not even close to the whole story. If we suddenly asked westerners to live the way Japanese people do, there would be open revolt and riots in the streets.
There is one thing they all have in common: they all allow housing supply to meet demand. Anything else is a distraction.
That's like "fixating" on the money supply. Sure, having more of it lowers prices. The point is: how do you get there? What are the side-effects of your proposal? These are not simple questions.
Fixating on zoning, at the exclusion of all other considerations, is a facile answer.
Japan is proof that zoning doesn't have to represent a restriction on housing supply. But don't just dismiss Tokyo because you think other cultural factors are at play: Montreal, Chicago, Dallas, Calgary, and plentiful other US/Canadian cities have confirmed what Tokyo has already taught us.
Chicago city average really hides the fact that the places most people would consider living in Chicago aren't super cheap; still cheap-ish when compared to other coastal cities
I have seen numbers compare rental price of 1/2/3 bedroom(s) in Tokyo to New York [1,2], but I do not trust those numbers, because they do not have the size of the apartment. I think it really matters, because apartments in Tokyo could be much smaller than those in NYC. I don't have a statistics for this, but there is an example .
OK. I found a table of comparison by sq instead of # of bedrooms .
There is no city like it in terms of population density. It is literally NYC + LA + Chicago, the largest 3 US metropolises, combined.
It would make more sense to use a remotely comparable city for comparison, like Osaka (still larger than any US metro)
No, it doesn't matter to most people. A country with smaller apartments will have smaller appliances, smaller computers, etc. - like Japan.
- movement into few urban mega-centers (you can't even say "into cities" because there are plenty of cities with little or even negativ population gain)
- immigration (e.g. see https://www.reuters.com/article/us-germany-immigration/immig...) -- and they mostly want into the already crowded areas, of course
- aging population needs different homes than young families
We probably can’t eliminate the scourge of land rents altogether but we can stop making the problem worse by putting in place more and more policies designed to raise housing prices rather than lower them. Such policies are exactly the opposite of what the government should strive for.
Add to it, land is the primary method by which "old money" remains in that category.
Yes, but that sum in the US is huge. Drive around the midwest or any region outside of an urban core and its empty space as far as the eye can see.
The problem is large-scale economic and demographic changes. The US used to have:
* A culture that prized living in suburbia away from dense areas.
* Labor-intensive agriculture that provided a lot of jobs in rural areas.
* Labor-intensive manufacturing that provided a lot of jobs in a large number of smaller cities.
All of those forces encouraged the population to spread out. Those forces are evaporating. The suburbs are now seen as soulless sources of miserable commutes. Automation and consolidation has dramatically reduced the number of farm employees needed for a given square acre of land. Automation and cheap imports from other countries have eliminated manufacturing jobs.
Without those forces counterbalancing things, there is a strong trend towards consolidating into large metropolises which can't absorb the growth that quickly.
We can try to stuff every more dense housing in those cities and gradually turn them into concrete boxes. Some amount of densification is good. But instead of investing almost entirely in that, I really wish the US was working to try to make small and mid-size cities more desirable too.
They choose not to.
> more dense housing in those cities… turn them into concrete boxes
A "US NIMBY-like" viewpoint. Paris is denser than the average city and lovely, as are many EU cities. US cities designed before the car took over usually nicer and more space-efficient as well, but are few and mostly on the East coast.
You're such an optimist. Governments around the world have been trying to relocate employment and labor for centuries and the best they have come up with is ¯\_(ツ)_/¯
In any new suburb or city you are not allowed to put jobs where the people are. There is exactly one house within comfortable walking distance of my office: the farmhouse that was here before the area was developed. If I bought a lot in this office park I would not be allowed to put apartments or houses. A couple miles away there are lots of houses, I wouldn't be allowed to buy a few and put in an office. A few miles in a different direction is a shopping mall that is failing. If I bought the mall I wouldn't be allowed to rent space for offices or apartments without first doing a zoning change, and then I'd have to choose either apartments or office, I wouldn't be allowed to put a house in the parking lot that is bigger than either apartments or offices would need.
Not to mention a city is more than housing. It's nice to walk to the corner pub, go to a theatre, sporting event, etc.
Various cities have tiny band aid programs under the rubric of affordable housing but the low hanging fruit is to stop actively intervening to make the problem worse.
Sorry to ruin your day ;-)
So this in effect keeps affordable housing out as developers either build 3000+ sq foot "luxury homes" or 55+ communities.
House prices move with mortgage credit growth. Credit growth is one of the key pillars of the politically sustained Ponzi-scheme that is the modern urban housing market.
Wealthy consumers love mortgages because it's a cheap way to leverage a huge asset for market-rate returns.
Normal consumers love mortgages because it allows them to buy a house.
Good luck taking that away.
Additionally, while access to credit raises housing prices, there's no guarantee that removing access to that credit will in any way make housing more affordable for moderate- or low-income people. More people would be forced to rent and it's possible that the wealthy apartment owners will engage in rent seeking and rents will just raise to match or exceed the cost of a mortgage.
That will rob lower income people of their biggest opportunity for wealth creation (housing appreciation) and increase wealth inequality.
I have noticed in recent years that improving without changing location or size is also often done as well. A cheap laminate counter is replaced by granite - no change functionally or in size, just an aesthetic change.
I posted that quote because it's the reference I found most speedily to the idea that high land prices impose private (i.e. paid into the private sector) taxation, rather than public. You didn't make the distinction between public vs private taxation in your comment and I thought it should be made.
Public taxation is also involved of course, e.g. when governments need to bail out the banking system; Help to Buy in the UK; etc.
Agreed, though I'm not sure that's much consolation to the ones paying it. With public taxation at least you can hope you're helping to fund something useful.
BTW, you mentioned reservations about possible overspending by Corbyn's Labour. I'm encouraged however by the noises they're making about productivity, e.g. in a recent report:
"The report’s guiding idea is to encourage finance to flow towards productive investment rather than speculation in property. This reflects an old complaint about the City of London: it is a global entrepot with little interest in promoting productive investment in the UK." 
And here is a very good primer on the important distinction between productive and unproductive credit. 
I agree that changing this is politically difficult, and it's downright depressing to see discussion threads on the topic filled wall-to-wall with turkeys demanding more Christmas, but there are limits to how far credit bubbles can take you, and there are signs we may finally be getting there.
Big mortgages would rapidly become a lot less popular if prices weren't a one-way bet guaranteed by the government.
Low rates, high LTV, and government guarantees all help to keep that ratio high.
Question: is there anything stopping these cities from just deciding to decline federal housing grants? The biggest culprit in this issue is Silicon Valley. Do they really need Federal housing grants to make people want to move there? The issue is too much demand already.
If Carson forces the issue, I can absolutely see San Francisco's city leadership just declining grants instead of changing their zoning. That might be enough to get some people voted out, but it'll take a while.
* Some cities might readily accept the leverage to change policy they weren't happy with.
* Some cities might decline the federal grants, under threat from home owners.
* Some cities might decline the federal grants, because pricing the lower class out was the entire point all along.
Maybe a later volley will force more hands, but it seems like this policy will blow up in HUD's faces.
Problem: cities are artificially keeping housing prices up, pushing lower income people out in favor of the upper class. The housing market is forcing lower income people out of cities.
Solution: tell cities they have to stop artificially keeping housing prices up, or the federal government will stop subsidizing low income housing and subsidized loans.
If the goal is to gentrify your city and keep prices high, how is that a real threat? That solution is only a threat if you assume these cities aren't paying attention to what's happening at all, and I don't think San Francisco's leaders are that dim.
Of course how this all works out is very complex and messy and will take dozens of years before we see anything significant.
It's been tremendously clear that San Francisco has become an experiment in seeing if you can still run a city while pushing out all the poor people. Its been worker infrastructure has been coming apart at the seams for years now and the city's leadership has made little attempt towards fixing it -- instead entrepreneurs are just trying to find ways to work around it. I have little confidence that threatening to pull federal housing funding will dissuade the city from their path.
Only those who already live there think there's too much demand. Everybody else on the planet recognizes that there's not enough supply.
SF Central Stubway took 20 years to construct and will take another 20 years to reach the wharf. Caltrain DTX has been in planning for 20 years, construction probably won't start until 2030s. Geary BART has been talked about since the 1960s with no motion. Second transbay tube is needed, no specific plans yet. Muni Metro is at capacity with no plans to fix.
So you can build a lot of housing and tell people to deal, but they may be retired or dead before it gets fixed.
I'd advise against this. We did that in Madison, and before we even got very far doing this, Mother Nature started to hint to us that it might not be a good idea.
Maybe there are places where you can just build Willy-Nilly. (I doubt it, but what do I know?) I suspect, however, most places are like Madison, just not quite as delicate. You probably have to be REALLY careful about what you're building.
And even more careful about where you're building it.
Could you explain what you mean by this?
So yeah, no new plans for any new massive footprint, high density buildings along that area in the near future. I suspect until they get this whole thing worked out. Point is that just digging out massive parking garages, paving over areas, building high density housing, it all sounds good on the surface. And it might be good for other cities? Who knows?
But we now have a better understanding that you need a more well thought out plan if you're a city built on a system of five lakes with a dam and locks system delicately balancing their water levels as it is.
Maybe you could claim that it is better to provide infrastructure before people, but it is actually the master planned cities that have yet to succeed, not the other way around. It's just too damn expensive to provide infrastructure for people that don't exist yet, and that deters people from moving there.
There were many ways to build upwards at the time but London favoured single family houses. Cities like Paris built upwards around that time. Even to this day Paris is more densly populated than New York because almost all buildings in Paris are around 7 stories rather than a very tall core surrounded by a lot of single family dwellings.
Nowhere? They would use public transit. If public transit didn't exist, they'd become an actual constituency forcing it to happen.
And yeah, sure, developers would have add electrical lines, substation, electrical capacity depending. Jeesh theses objections just seems substituting trees for forest.
Edit: And certainly, the calls for "just do it!" are response to a corrupt collection of interests who use "do it responsibly" to soak up vast amounts of money for doing anything and then throw-up their hands and say "see we tried", which is the way public transit has gone in the last fifty years in this country.
Uber/Lyft and now scooters have already 10x improved transit in SF. Living without a car and even without buses is totally possible now. The cost of Lyft 10 times a week compares favorably with a car, and scooters/bikes are much cheaper. See http://www.rideordrive.org/
Improving caltrain, muni and bart would be awesome, but there's plenty of transit to handle much more housing.
So "moar housing!"
Plus a broader tax base vs relying on Prop 13 property taxes.
Much of SF is 1 story buildings. You can absolutely convert those to 3-4 story buildings and get 100% more people in SF. The first floor can be restaurants, schools and grocery stores. In this new SF, like in Tokyo, you can get a flat for $600/month.
Think of the Mission, North Beach, Noe Valley, but building that in the Richmond and Sunset. Everyone wants to live there (see the current prices), why not build more if it? Why not build a bunch in Oakland?
People can just switch to scooters and bikes and there is tons of room on the streets. I remember a NY transit authority guy at a conference, he was just amazed at how much wider our streets are. There is tons of room.
Tokyo exists, it is a real big city with low rents and a great quality of life.
The reason you think more transit will be needed is because you are assuming that separate business and residential districts are required. However there is no particular reason it must be that way. If you can get people within walking distance of work and a few stores they won't needs as much transit. Transit becomes what you need for rare trips.
> You can’t just build taller buildings and dump 50% more people in a city.
Tell that to NY.
(And it's another way to pay people off-the-books and under-the table in the form of discounted housing. In theory, the discount is taxable income when it's provided because of employment, but good luck getting _these_ people to pay up.)
In Madison Wisconsin there were, for a long time, policies that tended to discourage building on the main east-side thoroughfare. Over time, no one really remembered why those policies, some of which one might construe as "inclusionary zoning", were in place. So we jumped on the urban development bandwagon. We were "All In" on it. I mean getting rid of older policies, introducing things like TIF for that very east side corridor, the whole nine yards. Fast forward to today, and there are buildings built down that corridor with giant footprints. And some people even think they are beautiful. So we congratulated ourselves.
Then something strange started to happen. Whenever it rained, that very corridor would flood. Odd? It never did that before? Well, we never built like that down that corridor before. Not to worry. The flooding wasn't really that bad. But it's gotten worse and worse. And only now are people starting to realize why those old guys back before and during the Greatest Generation wanted to discourage building anything critical there. Long story short, we're a city situated on a system of five lakes, we can't just look at what everyone else in the nation does and copy them. We need to follow a plan that makes sense for our geography. We need policies that make sense for us, even if on the surface, those policies appear to hamstring us economically.
I'm sure Madison is not special in this regard. It's likely most cities have some feature endemic to them that would similarly constrain where and how a wise man would build in that municipality. Like us, most cities have probably even forgotten the why of their constraints. I sympathize. But just as a piece of kindly intended advice from a people who have "been there, done that, currently trying to clean up the mess"...
don't look at old policies and say they're "outdated", or "nonsense"...
look at old policies and ask, "OK, what was the reason for this?"
If this proposal goes into effect, by clobbering local zoning codes, anything with sufficient money behind it is going to get built. This typically means projects that optimize for the developer's ability to extract rent from residents: 3 or 4-story apartments with small unit sizes, basic finishes made to aesthetically look high-end, and bare minimum green space or community space. A common approach is to use high-end appliances, a one-time cost, to ask for higher rent. This is the sort of construction that pops up in American suburbia today, where there's sufficient demand, and gets adapted to a more "urban" form with flat roofs and minimal changes.
Despite many of these projects being built, there's a price floor beyond which the rent will not drop, because the developer has to make payments on loans and maintain a profit. Therefore, while housing affordability is sure to improve in some places where it's absurdly high, it won't meaningfully be altered in places whose urban form is predominantly suburban. This is doubly so because the plentiful supply of single-family homes offers an a low-cost way to get started as a landlord.
Developers also have a choice on where to build. If it's cheaper after expenses to assemble a large parcel in Morgan Hill or Tracy or Vacaville, build out the site, and charge those rents, than to do the same in West Portal, one of them isn't getting built.
You want to redevelop a one story Sunset place into three stories? Meet the building codes and you are good to go. This would open up development to small contractors and small design/build architects. You wouldn't hire a city fixer + a lawyer + a pr person, you'd just hire an architect and a contractor. Each unit could be built much more cheaply.
Right now you could take a $1 million Sunset house and convert it into three $800,000 flats in a wood frame house. Developers would be DELIGHTED to do that.
The current system adds 5 years and a million dollars to each redevelopment. Developers don't want to build stuff for rich people, they want return on investment. They are as happy making 10% on affordable housing as making 10% on luxury housing.
The downside was (and in many places still is) an overloaded road network, as mass transit and road capacity did not keep up, despite equally frantic build-up.
So, you're saying that if the developer has costs of X $/mo month, then in a oversupplied market, rather than take, say 0.8X $/mo in rent and have losses of -0.2X $/mo, they'll refuse to rent at all and take losses of -X $/mo?
Often landlords do this today for zoning reasons. There are places that are in theory for rent, but the landlord built just because the zoning required it - they knew very well it would never be rented so they cut corners and pretend to have it for rent while in practice it will never be occupied. They make up for the loss with the other properties that went up at the same time.
Assuming we eliminate that, landlords will still sometimes not rent at all. When you have a lot of properties you reach a point where raising rent and causing someone to leave because they cannot afford the rent nets more money than the smaller rent fully occupied. In addition the non-occupied property is available for rent should someone want it - since tenants move all the time you better always be in the process of getting more.
Last, over the course of the year 10 months at full rent is worth more than 12 months at .8 rent. So landlords are always trying to figure out if it is better to lower the rent and long term make less, or hold out for another month.
That doesn't make any sense to me. Supply and demand exists in both the cities and the suburbs.
We do need to build housing, but it can't all be "luxury" housing.
This should be familiar to people because it's happening in the commercial space, too. It's the same thing as when storefronts would rather sit empty and waiting for a Chase Bank to come along than accept the lower rents from some other shop. The Chase Bank will pay far more in rent.
An oversupply on the other hand, would lead to older units being forced to lower prices, but won't happen until NIMBYs get out of the way.
That is, make affordable development a part of the price of luxury development if you must. Just don't stall the development completely.
This works best with large development companies and projects, though.
At first, I thought nominating Carson for head of HUD was a very strange choice. He's a neurosurgeon. Why???
But then... He was Director of Pediatric Neurosurgery at Johns Hopkins, so he had some administrative experience.
Then, I realized that Ben Carson has one bit of very relevant life experience that no other HUD director has ever had: He grew up in The Projects.
I thought then that that might lead to something interesting. Seems I may have been right.
So, why not cap the profits that can be gained from squatting on land? Or increase taxes on under-utilized land? Then, wouldn’t land owners have incentive to build more housing?
I, for example, only need about 1000sf of living space. In city where the minimum lot size is 3000sf and maximum FAR is 30%, my demand for land is 3000sf. However, in a city where 12 story buildings are abundant, my demand for land is only about 100sf, including proportionally allocated common area space.
By not allowing dense housing, city zoning codes are making affordability illegal by statute.
It's always great when an administration can repurpose unimplemented legislation designed to reduce segregation, and use it to enrich property speculators.