That said I strongly dislike when there's a conflation of "affordable housing" (lower-case, the general concept of providing for people on lower incomes) with specific schemes you have to qualify for (often "Afffordable Housing" upper-case) - in this case it seems to be deed restrictions on income that are required in exchange for floorspace bonuses and building code relaxations?
There's a big problem for me in the latter building inefficient bureaucratic systems and being able to be gamed (e.g. If I'm rich maybe I can still buy a lower income unit for my children or perhaps my wife or mother and then rent it out. I could lower my income for one year just to qualify etc.)
One major restriction has to be a covenant that you can only ever buy one of these if you meet the means-test they were initially sold under. That limits the market and the mortgages available therefore caps the price.
That or generational (eg 35y) leaseholds. In the UK apartments are almost always leasehold anyway, but a long-but-not-too-long lease would mean it always returns to the state without being resold or sublet indefinitely.
I agree, defining "means" in a means-tested transaction can be tricky but also, it's just data. If you can't or won't show enough history (even homelessness leaves a trail), it's not hard to find someone else who meets the criteria with a better history.
Ya, I don’t see any of these schemes being sustainable until they are somehow universal (eg an option even for the rich, but not one they can somehow monopolize). Like Singapore’s public housing, which isn’t gated by income, but rationed in other ways (marriage, have a family, must be a resident).
I think the only answer is that housing as an investment needs to be banned, it’s just too damaging. Not only is it making people poorer by the decade, eventually leading to a dead economy, it’s completely unproductive. Imagine if all that money were to be invested in business instead.
I am not sure if you can "rule investments by fiat" like this. People invest in housing because they distrust investment in businesses, or at least expect smaller returns. That has some underlying cause.
If you ban investment into housing, it does not follow that people will start trusting businesses more and give them their money. I would rather expect the money to find some hitherto unexpected side channel elsewhere.
If, on the other hand, housing ceases to be a good investment because of a glut of housing, people will start investing into something else even without legal pressure to do so.
What almost the entire West has is artificial scarcity of housing, because of overregulation weaponized by NIMBYs. Artificial scarcity can be remedied, though, just like they did in LA.
"It seems obvious that people would just put their money in the stock market or bonds like they do already."
Not obvious to me, but a lot would depend on the details.
The GP wishes for a law(?) that would ban investing into homes, but how do you even do that? As long as new construction is capital-extensive (and it won't stop) and at the same time subject to artificial scarcity by incessant vetoing of higher density developments, every sqm of living space in desirable places will generate huge returns to someone. So the loose capital will look for ways how to soak into mortar and bricks again, only perhaps more convoluted ways instead of directly.
The only way to break this combination is to remove the artificial scarcity, at which moment the entire field becomes a lot more competitive, and in competitive fields, prices generally sink.
A single failure doesn’t somehow cancel out the more successful versions, it says you should learn from them how not to repeat the mistakes. The toxic stew of racism of the south in the 1950s, for example, seems significant as does the realization that you can’t just toss up a building with no shopping, jobs, poor transportation access, etc. and expect it to go well.
Sure, but it wasn’t just one. Essentially every public housing project in America failed. I’d argue the main problem is American culture as a whole, which emphasizes an attitude of “if I don’t personally own something I should ruin it immediately”
It’s not true that every project failed, and you really have to keep things in context. The problem was not the concept of public housing but rather the racial segregation underlying much of that era’s policies and design, and those same policies had many other negative impacts. Saying that we shouldn’t build public housing is responding to the symptom, not the problem.
Pruitt Igoe suffered from a number of structural issues (including literal issues with the structures) that had little to do with it being government funded. Indeed one of the biggest issues was the government's unwillingness to fund it - several parts of the project were cancelled, then when the city's population started to plummet and vacancies started to mount there was no assistance to make up for the shortfall in maintenance revenue.
I agree, this is a bit like shareholder's ownership in the UK and the antiquated leaseholder setting.
Just no. The solution isn't to make home ownership an even more complicated topic but to increase the stock, within the parameters of building regulations.
> approving more units through this program in the last 13 months than all affordable housing approved in previous three years combined — without dedicating any additional subsidy.
That's not what I read from the article. Instead it seemed to be fairly arbitrary government regulations such as required shrubbery and facade articulation that make the cost of building prohibitively expensive.
Now, you may be saying it's NIMBY for the LA government to require unnecessary (or mildly necessary) stuff to keep the neighborhoods beautiful, but it's I'd guess it's probably more "just because I can means I do" typical petite bureaucratic power flexing.
I think the main point is the fast-tracking. Developers don't care if they need to add some landscaping to the whole thing, it just makes things more expensive in the end. What they care about is they don't want to start working on projects that then sit in drawers for years.
Of course "LA cracked" nothing, because the construction industry is in absolute shambles. It basically regressed into this cutesy artisanal nonsense, delivering a lot of single family homes (from the ugliest flimsiest Florida-grade paper-thin boxes to the enormous McMansions), and a few fancy high-rises.
Because there's nothing industrial in much of construction. It's one-off bespoke custom things with their separate paperwork. About as productive as wrapping rice by the grain.
> delivering a lot of single family homes [...] and a few fancy high-rises
Yes, because it turns out that local zoning and permitting in most major US cities makes everything else nonprofitable. Construction companies will build what is effective to build.
Change those local rules, as in the article, and suddenly lots of companies rush in to build that middle-density housing as soon as they can actually make any money doing so.
Is Florida-grade a thing? As far as I know, Florida is the only state where a majority (or plurality?) of single-family homes are built with CMU blocks, vs. the typical stick-framed construction.
I meant these mobile-home looking boxes. (for example Largo has this manufactured home community.)
Probably they are temporary/vacation homes, so they don't count. (Though if a storm is coming it might not care about the distinction. And evacuating ... well, looking at the sat view it's unlikely that a thousand or more cars can just whoosh away at the same time.)
> What they care about is they don't want to start working on projects that then sit in drawers for years.
This reminds me of another HN discussion about prediction markets, and how they can be misleading since profit is not the same as the time value of money.
For example, I could put down some money for a guaranteed profit against the people betting on "Trump will replace Biden in October 2024 after the aliens invade", but that's so far-out (in both senses) that it's not actually a good rate of return--I could be doing a lot more in-between now and then with the money.
In this case, perhaps developers could invest in a profitable project... but if the time-span is too long, the profit-per-time is bad so they'll look elsewhere.
This is decades of regulation set by people who may no longer be alive.
These archaic rules were crafted for a different era and are products of that time and thinking. Their desires and pressures were different than the ones we face today.
We need to garbage collect the rules and streamline for today's needs. Some regulations, such as fire safety, remain important. Many others are simply an unnecessary impediment that hold us back from meeting demand.
Their desire and pressures probably impedes the time they're in. It's just not immediately obvious, and even today it's not completely obvious.
Typically, the response to ever increasing traffic congestion is to invest in wider highway, but the consequence remain the same, yet people continues to push for highway expansion.
Toll lanes tend to have reduced congestion versus free lanes, but they can be regressive (when the toll is more than the fuel cost savings) and often come at the expense of free lanes.
Widening highways allows toll lanes to be added without reducing the number of free lanes.
And it's also appealing to NIMBYs that want to stop all new development after they have their own home.
Every extra hoop to jump through gives extra negotiation points or veto points. Anything that can provide a point of argumentation that allows further delay is a chance to stop a project. Every month of delay is a chance for construction costs to rise, for financing preapprovals to run out, for the builder to get tired of the process and pursue greener pastures.
Not necessarily. The housing market is very complex, and there is such a thing as induced demand - for example building lots more apartments in SF would make it even more attractive for e.g. tech companies to locate, and so they would quickly be filled, without moving the price.
Induced demand is just unsatisfied demand from parties not counted - if there are more people/companies that want to relocate to SF but can't because of a lack of available supply, that's just as much a shortage as for people and companies which wish to remain in SF.
It's not so simple. Some cities have too much housing. So much so the value of land goes down because of the house built on it.
Sure building more housing, pushing prices down might induce more demand, but there are a dozen other factors (not in the control of the city) that also influence demand - job vacancies, crime levels, quality of schools, etc, etc.
Induced demand refers to highways. Do you know of any studies demonstrating induced demand for housing?
As a counterpoint, look at all the empty cities China built in the middle of nowhere. According to the "induced demand" hypothesis, people should have materialized to occupy them, but that didn't happen.
Cities currently prevent the market from meeting even the regular demand, let alone any induced demand. Housing isn't going to get cheaper by not building housing.
Aren’t those empty houses in China prone to break down? I think I remember seeing a video of a guy visiting one of those buildings and managed to kick through the wall and floor pretty easily.
In Vienna they have this interesting thing where any apartment built before the 50s is rent-capped, so investors usually won't go for the very picturesque old-town properties.
This combined with 1/4th of apartments in the city being social housing really created a very affordable market for renters.
>really created a very affordable market for renters.
I wouldn't say it's very affordable in the post pandemic, post Ukraine world. It's affordable only if you get public social housing, or if you compare the private market rents to what's happening in the likes of London, Amsterdam, Berlin or Munich, but those are high paying banking/corporate/tech hubs, while Vienna is not, and so the lower rents also reflect the lower spending power of Viennese workers.
Most people can live in a rent-capped MRG apartment for two years and then immediately qualify for social housing and stay there until the day they drop dead - seems like a very affordable system to me, nonetheless.
The salaries are comparably horrible and that probably plays its part too in the equation, for sure, but on the other hand the salaries would also have to be higher if the state government didn't do such an excellent job at housing people for reasonable cost.
First question: How do you get in that system? Or is it reserved only for locals?
Because I contemplated moving to Vienna last year (most livable city, lowest rents and all that advertising) and I saw on Willhaben single bedroom apartments in decent shape were 1000+ Euros while software developer take home wages and perks weren't higher than in shitholes like Bucharest, Belgrade or Sofia (no offence, I'm also from around that region), sometimes even worse than there.
Second question: if the government is basically indirectly subsidizing employers by subsidizing housing for employees, meaning companies need to pay less for talent than in higher CoL areas, why then aren't more international tech companies opening offices in Vienna and instead keep hiring only in places with a housing shortage like London Berlin and Amsterdam? Something just doesn't add up. You'd think Vienna would be a magnet for companies instead of the overpriced cities with zero housing.
> How do you get in that system? Or is it reserved only for locals?
Any EU resident that has lived anywhere in Vienna for two years "gets in". After that, you either have to be under 30 or be below a certain income threshold at the time of getting the apartment. After you moved in you can earn however much you like - it doesn't matter. Some highly-ranked politicians still live in social housing because of this.
I've lived in a private single-bedroom apartment for ~300€ a month in Penzing (14th district) for a short while - there's plenty of older style apartments from before 1950 that are rent-capped through the MRG, so the owners can't charge too much for them. Vienna is big - not everywhere is the 1st district.
> Why then aren't more international tech companies opening offices in Vienna
Many international "old-school" tech companies like IBM are in fact heavily building work force in Vienna again due to the low labor cost (and point this out incessantly in DACH meetings - often to the displeasure of Austrians hearing how 'cheap' they are.) The issue is that for service-based work, most companies still near-shore to Romania, Czechia, Slovakia etc. since staff costs and taxes are considerably lower and you are spared the traditional regular strong union negotiations. Adding to this that Vienna is just culturally not a very techy or innovative place, never has been. And you can see and feel that with the (lack of) innovation happening. Many of my friends left to study in Graz, Munich or Zurich out right - they were usually the best of the best. Good tech talent here moves to Germany, Switzerland or even further westwards eventually for the salary.
But - on the other hand - Vienna is trying to build a start-up ecosystem with things like Brutkasten and success stories like Bitpanda and their start-up space in the Viertel Zwei area (2nd district).
Don't get me wrong, I love my city, but for various cultural reasons the move fast and break things tech mantra isn't something that leads to success here.
> A single person making $70,000 would qualify for a one-bedroom for about $2,000 per month. A family of four making $100,000 would qualify for a three-bed for about $2,500.
So not what most people would consider "affordable". It's "affordable" because it's currently affordable to people making below the area's median income and is deed restricted. It's nearly-market rate housing.
And that's a good thing! We need more housing of all kinds for all people.
>ED1 is not going to end homelessness in LA. (Though some non-profit developers — including the AIDS Healthcare Foundation, which spends millions of dollars advocating against housing policies like ED1 — are using the law to build affordable housing for the formerly homeless.)
The AIDS Healthcare Foundation is mentioned in a throwaway line, but it's truly one of the most bizarre parts of the housing discourse in California. It's a non-profit organization controlled by Michael Weinstein, who uses the organization as his personal slush fund to sue housing development that would block views from his office and his personal home, and sued to block any development in the city of Los Angeles. https://en.wikipedia.org/wiki/AIDS_Healthcare_Foundation
> So not what most people would consider "affordable".
Yeah, this is basically "slightly less unaffordable housing". The one-bedrooms are apparently even more expensive than the two-bedrooms here, which are already extortionary, about double the price they were less than a decade ago. I would know, as for our current place (two-bedroom) we started at under $1,000 per month and ended up here paying almost $2,000 per month instead.
Our family of three makes $35,000 a year. It's a wonder we're not homeless.
I think they need to revisit their definition of done. All I saw was a 3d render and some people who said "could I build this" and they've somehow cracked something.
Eli goldrat would say you've solved nothing until people are living in those homes and producing in your society. (Customers' customers have received value)
"The housing crisis of the middle class is largely self-inflicted. "
Yeah. With current technology, you can build an incredible amount of housing in a year or so.
The most prominent obstacle is legal, and that's mostly NIMBY activity. You can sink anything into decades of quagmire by weaponizing all sorts of environmental laws and bylaws.
What is “affordable housing”? All housing becomes affordable once you build enough of it. Is it just the politically correct way of saying “low-quality housing”?
> There are dozens of building code (not just zoning code) requirements that add cost and complexity to housing projects in cities like LA. Street trees, front setbacks, off-street parking, roof decks, façade articulation — these are nice to haves, yet LA requires these features in many cases.
> Without these goodies, some ED1 buildings will be ugly. Some will be poorly designed. Just about all of them, by definition, will be “out of scale” with their surroundings. (LA housing activist Joe Cohen has a great thread of renderings of ED1 projects.) I personally think all of that is ok. A housing emergency is no time for aesthetic perfection. LA, like San Francisco, is finally acting like it.
If "low quality" just means "ugly" then... Yes? But if "low quality" means "unlivable" then no.
I think it depends what permits they are waiving as part of this plan... Will we see a bunch of leaning buildings like Santos Brazil after their big tower boom?
I imagine they are keeping most of the safety ones.. but it wasn't well highlighted in the article
Because of the earthquakes LA has tight regulations on foundations which make leaning towers extremely unlikely. The leaning tower in SF is a fluke that was brought about by a corrupt builder choosing a bad foundation option, getting that approved, and then building a much heaver construction than originally proposed.
1. A polite way to say "housing project" or "subsidized housing" to not scare people.
2. A buzzword to force more housing density and/or promote social engineering agendas. When used in this sense, it isn't actually linked to affordability.
there are documented cases of small groups of investors immediately buying new housing stock just to flip it for a profit on some small time scale. rinse and repeat
Your statement is so hard for me to understand because quality, or lack thereof, is a function of modern construction and cost saving practices, and laws around what constitutes a livable dwelling. McMansions!
These practices either save or cost the builder, not the buyer, because the value is all locked up in land. And the extra layers of scarcity we impose around building on said land.
There's no big secret here. Dump restrictive zoning requirements, remove subjective approval processes, and make the permitting process a "shall approve" instead of "may approve", and you'll see a lot of new housing get built very quickly. All the slowdowns and immense extra expenses are self-inflicted by city residents who either don't care, don't want cheaper housing, or have been infected by the terminally brainless anti-housing pseudo-left.
The restrictive zoning practices, long approval processes ridiculous permitting costs etc are in place because most people's entire net worth is held up in housing and they vote for laws that keep the price high for that reason.
It's completely backwards to think that the reason why housing is expensive is because of those symptoms when the root cause is more than half the population wants mega high housing costs.
Despite the uniformed nonsense you might read here, the most active NIMBYs aren't primarily motivated by property values. If you actually talk to them you'll find that they have no wish to ever sell and are worried (sometimes irrationally) about quality of life issues: noise, parking, traffic, crime, privacy, etc.
You misunderstand. Most of them aren't specifically concerned with neighborhood character. They are mostly long-term resident homeowners (not landlords) who don't want the hassle and annoyance that comes with higher density. If you want to counteract their efforts then at least understand their motivations instead of treating them like caracitures.
At some point someone with authority just has to draw the line. Those people’s desires to not be hassled is not important, and the need for sufficient housing supply is.
Imagine you spend half your working class life saving for an absolute shit hole for half a million, knowing it's an NFT that no one can build more of. Then permitting laws are liberalized and suddenly your NFT is worth no more than the labor and material cost to physically build the house, minus depreciation.
It's difficult because losing that NFT means they are fucked in retirement. Oh well for them, stupid them for wanting a house while nimby zoning was in effect.
The losers unfortunately won't be the boomers that made the dumbass laws but the people they squeezed afterwards. It's a totally fucked situation.
The value is in the land, not the house. If you own a plot of land with a single family house on it, and suddenly someone is able to build an apartment building on that piece of land, it will actually become much more valuable because an apartment building generates much more revenue than a SFH. They could easily sell the land to a developer and retire somewhere else.
It's not obvious that would stay fixed: depending on the dynamics of the market, it could go up, it cold go down (The demand is for housing, not land. If you manage to increase supply for housing sufficiently by increasing density, then the value is the land could go down even if you could build many more homes on it than before). I agree it's not certain that it would go down, however.
It becomes obvious as housing density approaches infinity. Why would anyone buy your land for housing if they need one tiny spec to house a billion? This is simple supply and demand, high density housing lowers land value, as price isn't determined primarily by potential utility .
Sure, you can always make an obvious argument at an extreme, but then you need to demonstrate that the extreme is relevant (like, the function is monotonic, not very common in economics).
Why on earth would apartment builder buy my land specifically for housing when they can dump a mega apartment complex anywhere? This is simple supply and demand.
As density limits rise, housing land demand lowers. In the extreme of infinite density, demand goes to zero, as everyone can fit in a pinpoint and we don't need other land for housing. We get the opposite as your prediction as everyone lowers prices hoping to undercut to get the single pinpoint bid.
I hope it's clear that I'm not blaming the average person caught up in the housing market for the broader climate in which they live. It is fucked and I don't see a way out. If we build enough housing the price of their retirement asset drops and they are fucked and if we don't then we continue seeing mass homelessness and dropping birth rates.
I don't have a solution, I'm commenting that the typical things that are blamed for the housing shortage are symptoms not causes.
That is overly dismissive. Back in the post war era there was a huge problem with slum lords and corrupt builders constructing terrible residential units that were unlivable and began to fall apart as soon as tenants moved in. In response layers of requirements were added and regulators who had benign intentions went way too far. That all these rules would crash residential construction in the 1970s such that it would never recover was not foreseen at all.
If the problem is such slumlords and builder profiteers they wouldn't have made it damn near impossible to be an unregulated owner builder for your families own homestead, but instead imposed those regulations only on the profiteers who wouldn't be living there.
No, this is intentional. It was damn near impossible to find a place where a man can still build his own home near civilization without oversight.
The problem with "shall approve" is that sometimes the best answer really is "no".
A lot of ecological disasters are averted by processes that seem long and drawn out, but which actually are just companies not understanding that "no, we don't want you to burn down the planet around us". Residential is obviously somewhat different, but not entirely.
The environmental cost of saying "no" to denser housing on land that is already developed is extremely high, and leads to development on green fields where there is nobody to oppose the development.
There should be an automatic "yes" to any mixed use housing and small retail development that is infill, from an environmental perspective.
There should be an automatic "no" to any greenfield development, additional parking, or freeways. And to get over that "no" there should be strong environmental studies that show benefit, not just neutrality.
Our existing built environment is unsustainable and needs to change drastically. Keeping it in the current state is untenable. We should be radically reshaping it as fast as possible with the fewest brakes if we care about the environment.
"Ecological disasters" is covered by putting in objective instead of subjective rules. The point is to make objections like "doesn't fit neighborhood character" / "blocks the view" / "would replace this extremely historic run-down laundromat" hold no weight in the process.
Making things affordable in LA will be easy. Almost everyone I know is either in the process of leaving CA or planning on leaving. This includes everything from middle-class individuals to high-net-worth families, soon-to-retire and retired. Everyone is sick of the financially abusive environment in CA, at every level. And, of course, other issues.
My wife and I are so sick of it that it has become an almost weekly conversation. She is actively investigating where to go. There are a range of options, from other places in the US to Europe. Today she was showing me her research on opportunities in Valencia, Spain.
When we go, we will take three businesses and as many of the people working for us as possible out of CA. Logistically, it is far more likely that the move will happen within the US, of course.
So yeah, keep going on this path and housing affordability will not be a problem at all. That's my take on it. Right or wrong.
I have long followed your work, on and off hn, for a couple years now. Huge respect. Before you consider Spain etc., please give the midwest a chance. Idealogically and workwise, you will find that Indiana, Ohio, Michigan strongly align with your values. You can pick any flagship university here and draw a circle with 20 mile radius. You will find plenty of manufacturing capital, cheap land, and a rooted workforce looking for stable jobs in the industrial sector(rather than 150k swes). State funding & support for R&D, tons of expertise in aerospace/robotics/cad/mech/… purdue for example is a top-10 in several of these, with several hundred oncampus professors and over 50k students, most of who are midwest natives who prefer to stay put rather than catch the first flight to llm valley.
After a very long stint in CA, I made the move to the midwest and couldn’t be happier. Life is short. A certain amount of friction is fine, but if you are swimming against the tide every single damned day of your life, it quickly drains you. I find the midwest much more supportive of my values and politics.
> I find the midwest much more supportive of my values and politics.
What's going on in the US is so disheartening, demoralizing and sad that I just don't know what to think any more. A society in the grips of destructive ideological forces, from our schools up through our media and government. We are headed straight for the "Argentina experience" and people seem to be too ignorant to understand it. Sad.
My wife is now actively engage in evaluating potential European destinations with a reasonable mix of quality of life and support for entrepreneurs. I was just in Zurich a few weeks ago and everything I learned was encouraging. I met with entrepreneurs doing non-trivial projects in Spain and learned about how the government is working hard to promote the kinds of things we should be doing in the US. The same is true of other locations in Europe. Not saying it is utopia, just saying they might be waking up to what has to be done to stay relevant in a global stage. They also seem to finally have understood how much of a mistake it was to allow uncontrolled migration into various nations. Something we still don't seem to grasp here.
I also spent time in North Carolina. Interesting. It does feel promising. Waco, TX is also an interesting ecosystem. If they had a high-speed train to Dallas it would almost be a no-brainer. Phoenix, AZ, also interesting. Although, now we get into potentially punishing weather.
I don't know. Frankly, I feel like the country I love and call home has fully bought into a plan for self destruction. OK, maybe I am being too dramatic. I'll concede this. And yet, we have a government that thinks nothing of letting ten million people come in when we did not create --and cannot create-- ten million new jobs for them, much less good jobs for everyone else who needed them before they came in. In a nation ruled by sanity, this kind of thing would not happen. How can anyone trust that we are going to behave rationally when this is the best we seem to be able to do?
And so, yeah, I am exhausted, sick, tired of this. Why continue to fight for a team that despises me as an entrepreneur? Why? Why does my government make me pay $30K per year in health insurance? Why do they create the conditions that cause my home insurance to go from $800 per year to over $7K per year? Why are we paying nearly $8K in car insurance for normal vehicles and no issues at all, instead of $500? Why do we pay hundreds of dollars per year in car registration when in other parts of the nation it's tens of dollars? Why is gasoline, I don't know, over $5 per gallon? Why are we paying insane amounts of taxes with every gallon of gasoline and the roads are shit compared to other places in the nation and other countries? Why have we allowed our society to become so violently abusive and divisive?
I don't know. All I know is that I've had enough. And, I don't know when or where, but we are pretty much decided we are not playing any more. I am starting another company and we've been talking to partners in the UK and Switzerland to see what might be possible. Next month I am going to spend two weeks in Argentina. Things are changing. I want to see what happens.
Anyhow, not a rosy comment. I know. Anyone honest and reasonably rational should conclude that the US has become a circus. This isn't how to stay a world leader at all. This is how you destroy a nation from the inside. That is the only thing we are doing well. Which is sad.
Lose enough entrepreneurs and we are done. I was astounded to learn just how many foreign companies are recipients of funding from the laughably-named "Inflation Reduction Act". It's a joke. The whole thing is a sad joke.
I hear you. There's definitely a stur up going on these days.
> When we go, we will take three businesses and as many of the people working for us as possible out of CA. Logistically, it is far more likely that the move will happen within the US, of course.
I'm replying because this is just the tiny vocal minority. California is fucking BEAUTIFUL. People will want to live here until CA breaks off and sinks into the ocean from a major earthquake. Plenty of people. It's a non-issue.
disclaimer: born and raised CA kid. I hate that the West is so car centric. There's much to love about other places. But there is no place like CA.
The US is a beautiful place. I would not be so bolt as to make such a categorical statement.
Economically, in terms of business climate, affordability and more, CA is a dumpster fire. To the point that people at the new $15 to $20 per hour minimum wage that was supposed to solve so many problems actually have lower spending power than when they were earning at a lower rate. That should not be surprising when we pay 3x to 5x for auto licenses, 3x to 10x for auto insurance, 3x to 10x for homeowners insurance, 2x or more for gasoline, more in taxes across the board, from sales to income taxes and a bunch of little taxes on everything that just kills your money. Etc.
The only way CA improves is if there's a major ideological shift that permeates the state. I cannot see that happening for decades. I think it has to sink to a very painful bottom before people actually understand. CA needs to get the "Argentina experience" before voters will understand just how dumb it is to continue to support the charlatans and crooks who have been running this state.
The CA high speed rail was supposed to cost us $10 billion. We are well --way-- past $100 billion and nowhere completion. It will probably take this project another 25 years (if we are lucky), it might cost $500 billion and, if it ever really comes online, the cost per rider will be such that we could have sent everyone to the moon for less. Stupid voters. Ideologically broken crooks for politicians. Not a good combination. Time will tell.
As for affordable housing. Good luck. The very idea in CA violates the laws of physics. Unless there's a serious regime change this particular issue will not improve at all. Not at scale.
> There are a range of options, from other places in the US
> far more likely that the move will happen within the US
I don't know what you value in a place to live in, but many Southern and Midwestern states have much better fiscal and regulatory climates[0] and are full of midsized cities with surprisingly charming and walkable downtown areas. About the only thing you will not find is the delicious Mediterranean climate found in much of California.
> I don't know what you value in a place to live in
Sanity and reason would be a good starting point.
California is like dating a beautiful supermodel who is an horrible person. Everyone sees the outside and thinks "How lucky". Nobody know she the person she is inside that exterior.
It didn't use to be like this. There's only one reason it got this way, and that is the support of a putrid ideology that has, throughout history and across the world, destroyed everything it has touched. And here we are.
It’s the ideologies that have destroyed virtually all of Latin America and countless other nations throughout history.
The President of Argentina has done a pretty good job of laying out the case. Watch his videos. Gloria Alvarez is another person who has been speaking about this for years.
The good news is that we don’t have to base this on opinions. It’s a matter of historical fact across many nations over at least 100 years.
My main takeaway from this is that the free market may have already lowered housing costs if bureaucracy would just get out of the way.
I mean it seems like there is something to the bit of regulation that forces them to keep rent low, but broadly this suggests to me that the bulk of spend should be on somehow making the bureaucratic part of the system run more smoothly or be easier to navigate so more projects get approved and built.
The last bit about learning from Houston especially made me chuckle. Houston is cheap and big at the same time and likely because there are so little bureaucraticisms for zoning/roofdeck requirements. The cost is that the city is ugly and not "tier 1" but seems like a fine tradeoff.
Canada is seeing housing prices skyrocket like mad because they refuse to understand this. They recently passed a federal spending bill to help fund city planners, because a huge bottleneck in housing construction is the cities requiring a city planner to check boxes on a ton of things that were never important to begin with.
City planning is one of the most destructive professions in the United States. In terms of death, lost years of life to commuting, health issues, and social ills, it has no peer. We live shorter lives, with more health issues, and are lonelier than our rich peers in other countries because of our centrally-planned built environment. We built cities the same way for thousands of years: for humans on foot; and are only now coming to realize that our great auto-centric suburban experiment was an enormous and historic blunder.
Given california's long record of utter failure on this issue, I am skeptical.I see proposed, how many are actually approved and in construction? Its a decent start if they are actually managing to gwt building started
HUD and state/local counterparts should invest in real estate with the sole purpose of lowering housing costs. They should aim to break-even on their investments. They should also directly build and sell houses for profit to compete against commercial entities and drive down new housing cost.
Here's the thing: housing in dense cities will NEVER be affordable. Never.
What happened recently (and is happening in other cities like Seattle) is companies pivoting from building "luxury" crappy condos to sweet state-subsdizied housing. These kinds of projects are great for them, they don't need to care about the market demand.
“Two full-time workers earning Tokyo’s minimum wage can comfortably afford the average rent for a two-bedroom apartment in six of the city’s 23 wards.”
You do realize that people can read the articles you link to, right? For example:
> The flood of investment drove the average price for a new condominium in central Tokyo up 60% to a record 129.6 million yen ($865,000) in the first half of this year, according to the Real Estate Economic Institute.
Prices surged. Before the surge, professionals had this dream of owning. So your own article refutes your nonsensical statement that Dems housing can "never" be affordable.
Can you conceive of a cyclical nature to markets that affects pricing? Or is it that now that they went from affordable to less affordable, it means that purchasing will forever be changed now?
Or you assertion of "declining population"? Maybe on the national level, but it's not true of Tokyo!
And what is the difference in cost between renting and owning? Perhaps renting is affordable, but ownership is extremely expensive becuase of irrational speculation or temporary macro factors?
TL;DR your own article refutes your central hypothesis that housing can not be affordable in dense cities.
> Prices surged. Before the surge, professionals had this dream of owning.
You're literally repeating the joke.
A doctor asks a nurse:
- Was the patient sweating prior to death?
- Yes.
- Good, that's a good sign.
> Or you assertion of "declining population"? Maybe on the national level, but it's not true of Tokyo!
Indeed. And that's my point. Tokyo, like a leech, is sucking the life from its surroundings.
> And what is the difference in cost between renting and owning? Perhaps renting is affordable, but ownership is extremely expensive becuase of irrational speculation or temporary macro factors?
No. They are not temporary. The prices will not fall, they have been steadily growing for the last 2 decades.
That's 646 square feet. That's 25'5"x25'5". For an urban area, that's plenty of space. That doesn't mean literally every apartment is that small, just that small and cheap apartments are available for those who want them, and American-sized apartments with American prices are also available for those who want to pay for them.
That's one of the main reasons why housing is so expensive in the United States. We paternalistically decide that 760 square feet is the absolute minimum amount of livable space for a one-bedroom apartment, and instead force people who can't afford that much space to split a 1200 square foot apartment with three people.
Adults are more than capable of deciding for themselves how big of an apartment they would like to live in. Banning 60 square meter apartments doesn't help people who can't afford the legal mandated minimum.
And all while just a hundred miles away, beautiful historical houses can be bought for literally nothing. And that's with a rapidly declining population.
30 million people in the Tokyo area would like to disagree with you, myself included. Why do you think those beautiful historical houses are laying there empty?
I can tell you for a fact that I did not move to Tokyo because I was forced to by economic forces, I chose to move there out of my own accord despite being fully location independent. Just because you hate cities doesn’t mean everyone else does.
This is literally the opposite of everything the article is saying. These are not state-subsidized. They are just vanilla buildings. The city got rid of impact fees, "prevailing wage" union giveaways, and approved projects in 60 days or less, and because this reduced the costs of building by a large amount, it becomes profitable for builders to just do their thing without subsidies.
That's not really what the article says was going on. Those "luxuries" were being mandated by the bureaucratic agencies. Builders seem to have never really wanted them in the first place. The developers are apparently happy to ditch all the niceities and offer affordable housing if allowed it seems.
Not like I've done my own research, but the article was actually interesting.
You can, right this moment, purchase a 2-3 bedroom condo in a glass-and-steel high rise in a central business district from a profit-seeking entity, for less than $400,000. It’s called Chicago. Something SF, LA, Seattle, etc. would be immensely improved by imitating.
Where do these nonsense beliefs come from? There's no data to support them. No examples. Nothing?
It's so odd to see such undying certainty without any evidence, and without any clear path to political indoctrination. Or perhaps this sort of political indoctrination was present before mt times? Its just mystifying to see comments like this stated as if people would agree of believe these views by sheer force of will.
> Where do these nonsense beliefs come from? There's no data to support them. No examples. Nothing?
Have you actually tried to look at the data? Hint: no city in the US managed to lower prices by building new housing within the last 25 years. Not a single one.
You don't solve the problem of having more demand than supply by subsidizing demand. You solve it by making it legal to build housing. There is already plenty of monetary reward in building houses in places where housing is expensive; that's what it means for housing to be expensive.
Or seeing as how it's kinda important, we could stop regulatory capture for housing.
(There is an article here on hackers news not too long ago that said that while most industries had had huge productivity gains in the last 30 years, construction had been flat or decreasing - mostly because of increased regulation)
Coming from a construction family, this is THE problem with building right now. Material costs going up by an order of magnitude during COVID times (and not really recovering) was rough, but it doesn't hold a candle to the dumpster fire that is regulation.
Permits for everything (some permits are good, some are SO bad), mandates for things that increase cost for marginal/no gains in the finished product, and a ton of red tape/money going to people not involved in the actual work or the quality of the end product. If I, as a builder, have to go through all that bullshit for each house I build, the sane response is that I'm only building expensive houses that take more time but end up being similar $/hr for me, because I end up saving money and time dealing with the regulators.
I have a friend who builds temporary structures for events. He was telling me that a fire marshal insisted there be a sprinkler insistence installed in the tent over the swimming pool...
Or we could stop making it so painfully expensive and risky to try and build housing.
NIMBY policies have broken the traditional boom and bust cycles of housing in California that used to ensure there was enough housing for everyone.
It used to be that when demand was outrageously high, it'd start a housing boom where builders would start reinvesting profits from building higher-end places into building more and more until they'd overbuilt. Wealthier people would move to newer places freeing up stock for everyone else. During the bust, you'd have even more people upgrading as prices reset.
LA seems to be experimenting with suspending some of the anti-building policies which is certainly good, but they're still stuck on this idea that it should only be for below market-rate housing - as if the laws of supply and demand don't exist.
So let’s see if I have this right … build a bunch of shitty project housing … pols and devs get sweet kickbacks … slumlords create another junkie dealer hellhole. Everybody high fives and declares mission accomplished!
Cracking the code is about as easy as reversing a rot-13 cipher. Apparently "build more housing where people want to be" faces more... political difficulties than purely technical ones.
There's NOTHING good in building dense housing. It always (ALWAYS) leads to more misery down the road: higher housing costs, smaller units, more congestion, etc.
Want truly affordable housing? Bring jobs to smaller cities. You don't have ANY other option.
No, "transit-enabled" housing won't help you. No, banning cars and forcing people to bike won't help you. No, screaming at the "end stage capitalism" won't help you.
Ok, but please don't post in the flamewar style and please do make your substantive points without fulminating. This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html.
The basic reason for skyrocketing housing costs in major California cities is that there aren't enough housing units for the number of people living there. The solution to that is... ... ... denser housing.
Another is breaking apart the reasons want to live somewhere. Every conurbation wants all the jobs but it's so self-destructive.
Federally limit where multinationals can set up shop (so they can't use state-level tax incentives to play states off one another).
Connect cities and states together better. High speed rail services so that it's actually viable to live away from work. I know people who try to justify 4h daily commutes. It's not fair to shovel 4M people into a space to work where only 1.6M people can live.
What large US city has actually built enough housing to even match natural population growth in the last 25 years?
More housing can only lower prices, in absolute terms, if it actually exceeds demand, but it still lowers prices compared to what they would have been had nothing been built, all else being equal.
There is broad consensus among economists that it is stringent regulatory controls constraining supply that lead to higher housing prices - not building more housing.
If we look at the growth from 2000-2020, it basically went from 1% to .12%, so I guess we could use a step method to integrate (or just take population delta from 2024 to 1999 and subtract immigrants?). I don’t think we’ve grown that much, and growth is incredibly uneven.
> There is broad consensus among economists that it is stringent regulatory controls constraining supply that lead to higher housing prices - not building more housing.
People say things like this without backing it up. We get:
“Big Real Estate Says Regulations Caused Housing Crisis, But They Wrote the Rules”
But if you try to key in on specifically economists, they don’t say that. The fact that we have a global housing crisis, not just in America, seems to hint that something else is going on. Of course, we can build baby build Chinese style and wind up with 1.5 houses for every household, but that is probably a worse problem.
So you mean growth in population from 1975 to 2000 as the 25 year window we should be looking at?
We went through a property bust in the late 80s/early 90s due to Japan’s larger property bust and the S/L crisis, among having wicked recessions at the time.
I'm the person that wants more dense and walkable cities, so I'm really curious to learn more about why that will ALWAYS lead to more misery down the road. Honest question, do you have any stuff I can read or terms I can search on?
And it's written from the viewpoint of pro-density. Read the linked papers there, the best results of density increases are either extremely indirect ("migration chains") or insignificant (no sale price decreases, and single-digit percentage one-time decreases in rent).
I'm writing an analysis of all densifications in the US and Canada. So far, I have not found a _single_ example of density increases leading to even slowing down of sale prices. Never mind their reduction.
On the other hand, they ALWAYS lead to worsening commutes and shrinking square footage per capita.
Greenaway-McGrevy (2023) showed an increased supply of housing in Auckland reduced rents in 3-bedroom homes by 26-33% below a control.
Mense (2023) showed a 1% yearly increase in housing supply in Germany results in an average local municipality rent to fall by 0.2%.
Asquith et al. (2023) found in NYC, the average new building lowers nearby rents within 250 meters of the new building by 5% to 7% relative to the trend rent growth otherwise would have followed.
Li (2022), looked at new market rate buildings of 7+ stories and found that for every 10% increase to the housing stock that new high rises add within a 500-ft ring, residential rents for the buildings within that ring decrease by 1 percent.
Pennington (2021) found rents within 500 meters of a new project fell by 1.2 to 2.3% in San Francisco.
> Greenaway-McGrevy (2023) showed an increased supply of housing in Auckland reduced rents in 3-bedroom homes by 26-33% below a control.
Read it. Oh wow. That's a fucking propaganda piece with shoddy statistics.
They basically found a statistical anomaly in the data, with the one- and two- bedroom apartments rents showing no significant difference from the historical trend. And to exaggerate the trend, they used an overfitted exponential model.
And in both cases, there were NO price decreases. Rents continued to grow, outpacing the inflation.
> Greenaway-McGrevy (2023) showed an increased supply of housing in Auckland reduced rents in 3-bedroom homes by 26-33% below a control.
I have not read this one yet. Sounds suspicious, though.
The rest are basically what I told: one-time single-digit percentage decreases in rents. This one is also funny:
> Asquith et al. (2023) found in NYC, the average new building lowers nearby rents within 250 meters of the new building by 5% to 7% relative to the trend rent growth otherwise would have followed.
> one-time single-digit percentage decreases in rents
Why would one expect a single increase in supply of available housing units to cause more than a one-time decrease in rent?
> Rents still _increased_, but slightly slower.
I'm not entirely sure why you find this funny. It finds adding housing units reduces surrounding future rents. If you find it funny it didn't lower rent in absolute terms for some reason, extrapolate what would happen to the rent of an place within 250 meters of 20 new buildings.
Density increases actually make cities more popular, so the supply constraints remain or even worsen. They also generate wealth, meaning people earn more, and can bid up housing prices. I think people just like dense cities with good transit, so we should definitely do it, but let’s not pretend that SF would be affordable if only it had HK’s density (it would be as affordable as HK, which means not very).
There is plenty of history showing the long term effects and outcome of dense housing run by the Government. Dense housing ran by private companies will always be a race to capture the most amount of profit. While Government ran dense housing will be affected by an ever decreasing budget and ever increasing cost. OP is right. We need to invest in “fly over” states. There is an abundance of land and opportunity to achieve the American dream. Humans living in a tiny cube and commuting in a tiny cylinder (bus, subway) to a tiny office cube ad nauseam is the worst.
Neither the article nor the comment you are referring to were talking about government housing.
And you’re entitled to not want to live in a dense urban environment, but you might need to open your mind to the idea that not everyone feels the way you do.
> And you’re entitled to not want to live in a dense urban environment, but you might need to open your mind to the idea that not everyone feels the way you do.
You're entitled to move away from a toxic river that catches fire. But you might need to open your mind to the idea that not everyone feels the way you do. Perhaps some people like to work at the factory that produces the toxic slime.
Urban density is pollution. Its effects are not limited to cities.
By making it easier for companies to open offices in dense urban cores, it ensures that smaller cities are starved of jobs and die. So people are forced to move to ever-densifying areas, driving up the price. This in turn makes it even easier for companies to hire people living near dense urban cores.
> Urban density is pollution. Its effects are not limited to cities.
This is simply not the case. People living in dense walkable urban areas produce far less pollution than those living in the suburbs who need to drive much more and require far more infrastructure per household.
Switching from gas cars to EVs and downsizing from barn-sized SUVs to medium-sized cars will solve the emissions issues.
Moreover, extrapolating the self-driving vehicles trend a bit, mild automated car-pooling will completely negate emissions advantage of EVERY other intracity public transit method.
Even with EVs you still need to create far more infrastructure per person in the suburbs than in denser cities. When you remove most of the cars, walkable cities can be really pleasant places.
Small cities are a relic from 100 years ago when 40% of the US population worked on farms. Their diminished present day stature is a indication that they are not a productive use of resources (e.g. roads and other infrastructure). We don't need government intervention to save them.
> Do you think there are economic efficiencies in gathering a large workforce in one location?
Oh, absolutely. It's more efficient for companies to hire workforce in dense cities and offload the externalities (increasing cost of living) onto the public.
Just like with pollution: if you dump toxic sludge into rivers, your factory can make widgets cheaper, than a factory that has to take care of its waste.
> Do you think suburbia is an efficient and effective use of land?
I don't think _efficiency_ should be the reason for cities. A polluting factory is also more efficient than a clean factory. Yet we somehow don't appreciate that efficiency anymore.
Moreover, the amount of urban areas is around 2% of the total land area in the US. De-aggregating the cities will only result in its increase by maybe 20%.
Many examples of dense government built/run housing work fine. The common problems are not a function of housing but the people living in that housing. In cities where the government owns over half of all housing stock tenants end up representing the general population well and the system works fine with generally low prices and overhead.
The temptation is to only build government housing for the poor, but that’s a well known recipe for failure. The US has instead shifted to government spreading out poor population via subsidies but that’s doesn’t fix any of the core issues.
Thanks, so it's specifically govt run affordable housing. I read OP as the more general "dense cities = BAD" but seems like it's more specifically "govt run plans for dense housing". I can understand that.
Also, yes also agree about more jobs and opportunities more distributed across the land. That sounds good.
I think about my position as favoring walkable dense metros in the more organic manner - people like people - we WANT to be close to one another. And the infrastructure to make that possible, comfortable, affordable, and sustainable.. is great!
The exchange of ideas and tolerance leading to innovation, is a function of dense metros. Is that not just fundamentally...true?
This is anecdotal I guess but I know I'm not alone.. as someone who has been forced to live in more dense housing with each move the older I get.. (grew up in a house,shared walls, more shared walls, and now an apartment with shared walls and people above me). Misery vastly increases with density, at least for me. People are loud, inconsiderate and fucking gross. There's trash and broken shit everywhere, people idle their cars and cause noise pollution from the exhaust reverberating on the buildings or their stereos, no one owns the communal areas so they get trashed because nobody gives a shit. Common areas smell horrible, or are overpoweringly scented with air freshener. Living in dense housing as driven me absolutely mad, and I have more buying power than I've ever enjoyed in my life it's ridiculous so it's not like I'm forced to live in dense housing and poverty. So when I read shit like 'people like people - we WANT to be close to one another' I get triggered as fuck, I'm not sure I know any adult that would prefer to live in a house over an apartment. Also... There's almost zero cultural tolerance, people silo into their cultural bubbles and refuse to integrate.
I agree with every one of your points. I mean to say "people want to be close to one another" as a philosophy along a spectrum. People crave belonging, connection, intimacy, stimulus, novelty. In a grand sense we really do choose to congregate.
That said, yes for sure there's much suck about the filth, obliviousness, and inconsideration of "other people". I like people, but I do not live on top of people. I want the ability to walk or bike to my stimulus. And then retreat back to solitude.
Completely get you! In simple terms, I just think it has to occur silly to people, that 8 billion humans are gonna have their 2 acres of land and that that is somehow _actually_ ideal beyond "I want what I want the way I want it". Quite literally the concept of Civilization is honoring a WE more than an I.
Government planned housing being bad is just a feature of your specific local context, not an inevitability to all government subsidized/built housing.
Governments are human organizations, and it's not a surprise that some organizations are better ran than other.
Remote Work
You need pervasive remote jobs to move any meaningful number of people away from the companies that presently fund their lifestyle.
Government and Desirability
Flyover states are run by gross people whose theories on how our country ought to be run that are misaligned with the people you wish would move there. This is going to cause in not many years a crisis situation with doctors choosing to move to more desirable locations and small cities lack a lot of the amenities and interest of living in the big city. People are already choosing not to live there despite decrease costs. Small cities are BORING.
Fertility rates in cities are far below replacement and falling every year. In every country, religious or secular, liberal or conservative, socialized healthcare/education or no. So they are proving simply not capable of sustaining human life.
This only works as long as rural people keep having lots of kids to feed into the city, but that isn’t really happening anymore either.
This is insane - rural birthrates are higher, but birthrates are falling across the developed world in both urban and rural contexts.
It's not because of density - it's because people with options other than raising children tend to pick them since kids require a lot of effort.
SF and LA could easily be several times more dense than they currently are; that kind of increase would see the capacity of the entire state grow by double-digit percentages.
So now I've gotta ask you: if cities suck for population growth, then where would those double-digit population gains come from? It's not rural America, that's for sure.
For us it wasn’t about not being able to raise kids, it was seeing how garbage parents are with their massive consumption and a whole generation of iPad pacifier kids. This planet is fucked in a hundred years and I’m not bringing kids into that world.
Based on actual data urban individuals (80% of the pop) aren't dependent upon rurals (20% of the pop) having babies because by the numbers most of the native born sons and daughters are born in urban and suburban areas. In fact both are dependent upon immigration to maintain the same level of population.
If your dense housing leads to higher housing costs that's actually great news; it means that your city is enabling higher-productivity arrangements that boost local incomes, and all the concern about "lowering property values" was 100% bunk. That's the pattern you see in places like Manhattan. Wouldn't it be nice if most people in the U.S. had a bunch of Manhattan-level cities in their state that they could easily move to if they wished?
> Want truly affordable housing? Bring jobs to smaller cities. You don't have ANY other option.
Want big houses and cars? Bring good jobs to smaller cities, that still have little need for density. That's a pretty natural pattern of development. But the really high incomes will most likely still come from the very densest places, where people willingly put up with tradeoffs like living in a smaller place and doing without a car, because they're actually a lot better than the alternative.
If your dense housing leads to higher housing costs that's actually great news; it means that your city is enabling higher-productivity arrangements that boost local incomes
Take Milan as a counterexample. A single room in a shared flat costs around €700/month, a single-room studio €1200/month. Yet, people on average earn €30,000 a year, which means €24000 after taxes, or around €1800 per month. That's not what I would say increased salaries and productivity.
In Italy, there are serious problems with stagnating productivity and national, collective bargaining. Nevertheless, that doesn't mean rents do not skyrocket in big cities
This kind of anti-logic usually goes along with arguments like "well, they keep building lots of units and prices haven't gone down, so obviously it's useless to do anything but enact rent control for current residents and give the middle finger to anyone else who ever wants to live in that place", while ignoring that prices can't go down until we catch up on the literally decades of underbuilding in most US metro areas.
Prices do go down though. A new building in Oakland just got written down by the joint venture REIT that built it, in their filing they blame "historically high levels of new housing on the market". Rents in Oakland are down about 25% in real dollars from their peak in 2019.
Yes, but it's also Oakland - not really the most desirable place in the neighborhood. That's actually the kind of place where prices would be most likely to drop if you just increase density across the board. (Which is not a bad thing if you're overly worried about the detrimental effects of gentrification!)
People who say that are speaking from ignorance. These new buildings are ludicrously valuable. The newest, tallest in Oakland is worth > $500 million and the rents are $2k to $4k, and it's > 90% occupied. There are tons of jobs and demand for these homes.
Plenty of places with far worse reputations than Oakland are not dropping in prices, because they didn't build.
Any place will drop in prices if you keep on building in advance of demand.
Gentrification is more likely to come from lack of building than building. That's the story all throughout California and every other wealthy area in the US: extreme gentrification through lack of new housing. Its not the new housing that drives up prices, it's the lack of it.
It's like induced demand doesn't exist. As we all know, adding a new lane to a freeway can't lead to more congestion. It's simply against all logic that adding new road space could result in it!
If living in a denser place turns out to be more desirable due to better jobs and/or amenities, the demand effect can be so strong that it more than offsets the increased supply. But that's actually a very good thing; it means that dense housing is unlocking even more value than you might have expected it to.
Dense housing creates highly walk-able cities with extremely good public transportation. Furthermore, high density foot traffic creates improved economies of scale for businesses. Economies of scale might shift society to one where you don't need to cook at home because good inexpensive food is everywhere. Businesses themselves benefit from high concentrations of skilled workers in more condensed areas. The total cost of commuting for society diminishes. Public works also benefit because more people can benefit from every dollar spent. Dense living lets people take advantage of the economies of scale of the businesses and infrastructure around them.
The end result of dense housing is a highly desirable place to live, in other words, increased demand for housing, locally.
This can be seen in housing prices in NYC, Taipei, Seoul, Tokyo, Hong Kong, Singapore, etc.
So it is not dense housing that makes housing costs drop, it is dense housing built in excess of demand... But incumbent property owners will resist that tooth and nail because if production of housing can satisfy demand, their capital investments (and very often sole vehicle of retirement income) will decrease in value. When a person's wealth decreases, they desire political change. So housing policy that results in lower housing costs is extremely unpopular among those with power (education, money, time, etc.).
Devil's advocate: induced demand. Density increases interactions which are the economic point of cities, and why cities are wealthier than suburbs/rural areas (when suburbs/rural areas aren't juiced by subsidies and loans). Wealthier cities attract migration, migration increases demand for units.
That said, my personal belief is that prices are completely decoupled from demand and are more reflective of a desperation to keep them high for... other reasons.
(Keeping in mind that you are playing devils advocate, and that none of this is directed at you personally)
Induced demand for highways: sure. Well proven. Happens every single time.
Induced demand for housing? Gonna need to see some hard evidence on the time scales, etc.
Housing is very different from highways. People can go from using zero freeway miles to 50 freeway miles a day, if there's slightly cheaper housing further out. It's this drop in pricing that drives demand.
For housing, the increase in demand comes from having, presumable, more amenities, making the dense living more desirable. The change in time for amenities to develop is on the order of years, however. It takes a long time for businesses to develop, build customer bases, etc. And in that time, it's possible to build more housing. Housing scales far far far better than freeways. It's easy to double, triple, quintuple, and even 10x or more the density from single detached units. Freeways don't scale like that.
> Induced demand for housing? Gonna need to see some hard evidence on the time scales, etc.
Seattle: grew the number of units by 25% within the last 12 years. SF: only 5% within that timeframe.
Their price growth curve is nearly identical.
> Housing scales far far far better than freeways. It's easy to double, triple, quintuple, and even 10x or more the density from single detached units.
LOL, no. You have no idea how much city infrastructure costs.
> Freeways don't scale like that.
One mile of subway in Manhattan now costs more than 1000 miles of a 6-lane freeway.
I mean... The very existence of wealthy cities is a sort of proof. Remember that for America to temporarily be one of the few examples where dense cities were less wealthy than spread-out suburbs and exurbs, we had to combine massive subsidies and financing with good old-fashioned racism.
What I don't agree with from GP is the idea of real increases in housing costs for those already in cities. The rising tide lifts most boats, if density isn't being unduly suppressed. So, density increases housing value but also the wealth of city-dwellers, relative to everyone else. Supply keeps up with demand, except where we won't let it.
>the increase in demand comes from having, presumable, more amenities
Not necessarily. It can also come from the increased opportunity for exposure to people and culture.
> How does building dense housing lead to higher housing costs? That seems unintuitive to me.
By creating a denser unit, you're forcing (via economic forces) more people to move closer to denser areas. This in turn makes these areas more attractive for employers, making it easier to do business. This in turn makes dense areas more attractive for employees, so they are willing to pay more to live closer to dense areas.
Result: density increases, and prices rise along with it.
And an additional toxic component: the population is basically not growing anymore. It's nearly a zero-sum game now, so each new dense unit means one more dilapidated house in Kansas as its occupants had to move to find a job.
Making these kinds of sweeping, counter-intuitive, absolute statements in all caps without any justification gives the impression of an analysis that may be colored by ideology rather than a clear look at the facts in question. If cities are too expensive because everybody wants to live there...perhaps they have some qualities other than "misery" that you haven't considered?
There’s more to it than housing density (see below). For instance, there are also differences in public transport to spread the area of viable housing. Anecdotally, high rent cities such as New York or London tend to not do a great job at providing reasonably priced and efficient transport to nearby commuter towns or suburban areas compared to many in central Europe, for instance.
On densities, cities like New York, San Francisco, and Seattle (high rents) are comparable or higher in density than larger European cities with the exception of Paris (and I may have missed another). London, Berlin, or Madrid are noticeably lower than New York or possibly the other two US cities as well.
(Naturally, the city boundaries of somewhere like London include many less-urban areas so this doesn’t quite capture exactly what either of us presumably mean, but it’s loosely demonstrative.)
I think you are mixing units here (km2 vs square mile). According to wikipedia NY density is 11313/km2 which would ranked 18th city in Europe. SF would be 29th with 7194/km2. I would argue that NY public transit is absolutely doing a fine job (cleanliness appart) and it's moving 7.5 million peoples on a weekday (was higher pre-pandemic)
Density is needed for proper public transit and locally accessible services to flourish.
I don't have datasets for European rents. Can you provide an example of a sufficiently large European city where new density led to a _decrease_ in rents _and_ sale prices?
I agree in part with you, particularly the weird utopian beliefs people have about transit-enabled housing.
I lived in Tokyo which is full of high density and the world's best public transit without the drug abuse issues in the West. Safe, omnipresent public transit like this is absolutely necessary for high density — and it's not ideal at all.
Getting from point A to B for work is miserable. You walk to the station, wait for your train, then switch as necessary. Switching trains can be awful — Yotsuya to the Marunouchi line was particularly horrible. Maybe you are a winner with a job at Tokyo station; but I thought the point was empowering all people, not just the top tier of society?
Of course, you can choose to align yourself with the train system. Leaving aside your subsequent disadvantage when changing jobs, you are then competing with everyone for a decent place to live. Suddenly you need to fight for denser and denser (aka smaller and smaller) housing again and people eventually get priced out to a new town two hours out of Tokyo.
And that's in the city; Try visiting your family in Saitama if you live in the wrong part of Tokyo. Your selfish human desire to connect with family turns a 25-30 minute car ride into a 1.5 hour painful hassle, and one that is not cheap either. Try getting your friends together for a board game — transit is one reason why such home parties are so rare.
For the Bike utopians, I used to bike from Koenji to Ikebukuro at Sunshine 60 and would routinely beat the train. I had to stop because, even with the ideal small back roads, it was dangerous — and someone stole my bike. This is an inevitable part of density, you aren't going to have bigger roads and you get more rolls of the dice to encounter dishonest people.
Finally, the more density, the less you can do. Humans have their own social gravity and it shows. You will be poorer overall as going to the spice grocery is going to take up all your activity time (since so much will vanish in transit). Maybe it's ok if you wish to conform to everyone else's choice of food and activity but that's literally the opposite of diversity.
This is with the very best public transit system in the safest city in the world (for men, let's not talk sexual
harassment of women) — any attempt in North America will be much, much worse for reasons that are obvious.
I still believe cities should enable higher density as homelessness is worse than everything I outlined above; but it won't be pleasant and many people will be forced into a cramped housing situation that they will never be able to get out of.
In that context, finding ways to bring jobs to smaller cities makes a lot of sense. I am sorry you got downvoted op, but a lot of people seem to be attracted to high density without appreciating realistic drawbacks.
(And to be honest, I still like the Tokyo train system, I'm just not going to mindlessly worship it)
Credit has to be given to the governor Gavin Newsom here. He's made some questionable policy choices, particularly with seemingly random vetoes (which the legislature could override but they haven't done in decades because that would take up time in the next legislative session).
Prop 13 was about the absolute worst thing to ever happen to California housing. Rising property prices make people feel like they're richer but really they're not. You typically still own one housing unit of wealth in almost all cases. It's just the nominal value is higher. For this benefit, eye-wateringly massive subsidies have been given to Disney, institutional property holders and the very wealthy for absolutely no gain.
But this goes to show how powerful NIMBYs are and the level of delusional self-interest people possess.
For those unfamiliar, Prop 13 capped the annual property tax increases to 1-2%. Property tax rates are reset when the property is sold. Property held in LLCs is never reset because the LLC not the property is sold. This is why Disney's property tax rate was basically set in the 1960s and never been adjusted for current values. The net effect is that incumbent property owners from the 70s and 80s pay a tiny fraction of the assessable property tax on their properties and this has been a massive drain on state budgets. This was sold as not kicking seniors out of their houses. Texas handles this a lot better: property taxes can be deferred until death or the sale of the property.
But it gets worse: this beneficial tax rate can be inherited. It's just locking in generational wealth. It's also not allowing people to move because they can't keep this beneficial tax rate.
Recently, there was a very minor partial rollback on this known as Prop 19. What is it? It limits this beneficial property tax rate inheritance to only one property. That's right. If you owned 10 properties then your family could inherit all your tax rates prior to this. So this only affects people who bought multiple properties in the 20th century and sat on them. That's probably less than 1% of CAlifornians.
Prop 13 passed with only 51% of the vote. 49% of voters rejected this very minor reform. That's how powerful the NIMBY brain rot is.
Now against this force, which tends to overtake all local cities, towns, councils and planning boards, there have been a whole bunch of reforms: stopping the abuse of CEQA to block any development, increasing density without years-long planning approvals in certain cases (eg on major roads), all CA municpalities having to plan for how they're going to build more housing (aka the housing element) with real consequences for not complying (eg the builder's remedy) and so on.
Passing any of these given the power of NIMBYism with voters is a major accomplishment and I think these are starting to have an effect.
You did not ever seem to get around to the part where we have to give credit to Newsom. He hasn't shown leadership on this issue. State housing reform has come from Weiner and Skinner, enforcement from AG Rob Bonta, and these local Los Angeles improvements are executive orders of their mayor.
Capitulating to the depp pockets of NIMBYs and real estate developers would mean Newsom could easily kill all this with a few vetoes. He's not a passive actor here.
That said I strongly dislike when there's a conflation of "affordable housing" (lower-case, the general concept of providing for people on lower incomes) with specific schemes you have to qualify for (often "Afffordable Housing" upper-case) - in this case it seems to be deed restrictions on income that are required in exchange for floorspace bonuses and building code relaxations?
There's a big problem for me in the latter building inefficient bureaucratic systems and being able to be gamed (e.g. If I'm rich maybe I can still buy a lower income unit for my children or perhaps my wife or mother and then rent it out. I could lower my income for one year just to qualify etc.)