Street Votes: A proposed response to Ireland's housing crisis(thefitzwilliam.com)
thefitzwilliam.com
Street Votes: A proposed response to Ireland's housing crisis
https://www.thefitzwilliam.com/p/a-simple-and-elegant-response-to
178 comments
> Income taxes are also punishingly high - the top rate of tax (52%) kicks in under 100k
Wow -- got to make up for that famously lax corporate income tax, I guess! Which provides an interesting window into transnational company exploits. Ireland's decided to place more tax burden on individuals vs companies (which could have good reasons and could in theory even be net-neutral domestically, just shifting tax burden around between companies and their shareholders.) Now a giant tech company decides to domicile as much of itself as possible in Ireland, while themselves remaining US citizens and residents, since our tax code taxes individuals far more lightly than Ireland.
"This is a perfectly balanced game!"
Wow -- got to make up for that famously lax corporate income tax, I guess! Which provides an interesting window into transnational company exploits. Ireland's decided to place more tax burden on individuals vs companies (which could have good reasons and could in theory even be net-neutral domestically, just shifting tax burden around between companies and their shareholders.) Now a giant tech company decides to domicile as much of itself as possible in Ireland, while themselves remaining US citizens and residents, since our tax code taxes individuals far more lightly than Ireland.
"This is a perfectly balanced game!"
Well it isn't quite like this. The personal tax rate is banded, so only your income _above_ a certain amount is taxed at 52%.
Like, it's a progressive way to tax, rather than a lower flat rate.
Also, the gov just announced a big surplus again from multinationals, so I don't think it lines up to say the tax burden is shifted to individuals, when there is a really big take from corp tax also;
"Higher corporation tax receipts are expected to contribute to a budget surplus of €10 billion this year and €16.2 billion next year."
https://www.rte.ie/news/business/2023/0418/1377638-cso-gover...
Like, it's a progressive way to tax, rather than a lower flat rate.
Also, the gov just announced a big surplus again from multinationals, so I don't think it lines up to say the tax burden is shifted to individuals, when there is a really big take from corp tax also;
"Higher corporation tax receipts are expected to contribute to a budget surplus of €10 billion this year and €16.2 billion next year."
https://www.rte.ie/news/business/2023/0418/1377638-cso-gover...
Certainly, this is very normal. It makes sense to have a high rate of tax on extremely high earners!
But in the US the top tax rate kicks in at $539,901 (for a single person! Higher for married). In Ireland it kicks in at the princely sum of €70,044. We tax people on decent but not incredibly high incomes as though they're on Ferrari money. You might think "well that's Europe for you" but in Germany the highest rate of tax kicks in at €277,826 per year.
And for your taxes you get:
ridiculously expensive childcare (€1000 per month per kid - compared to nothing or a couple hundred a month per kid in other EU countries)
a collapsing HSE (wait times for pediatricians can be a year+ public, and I had to spend hours on the phone to find a private one who'd see my 3 year old in under a month)
(almost all) religious schools that still ask for a "voluntary" contribution
mediocre public transport
US-style car-dependent single use sprawl
horrible cycling infra
incompetent and agonizingly slow public bureaucracies (_especially_ immigration but tbf immigration is horrible most places)
and very high costs of living.
On the bright side, it's one of the better-shielded places from climate breakdown. The weather here is amazing. I grew up in a hot place and never want to be over 40C again.
But in the US the top tax rate kicks in at $539,901 (for a single person! Higher for married). In Ireland it kicks in at the princely sum of €70,044. We tax people on decent but not incredibly high incomes as though they're on Ferrari money. You might think "well that's Europe for you" but in Germany the highest rate of tax kicks in at €277,826 per year.
And for your taxes you get:
ridiculously expensive childcare (€1000 per month per kid - compared to nothing or a couple hundred a month per kid in other EU countries)
a collapsing HSE (wait times for pediatricians can be a year+ public, and I had to spend hours on the phone to find a private one who'd see my 3 year old in under a month)
(almost all) religious schools that still ask for a "voluntary" contribution
mediocre public transport
US-style car-dependent single use sprawl
horrible cycling infra
incompetent and agonizingly slow public bureaucracies (_especially_ immigration but tbf immigration is horrible most places)
and very high costs of living.
On the bright side, it's one of the better-shielded places from climate breakdown. The weather here is amazing. I grew up in a hot place and never want to be over 40C again.
I'm ok with that tax band at that level. And I imagine the majority of people in Ireland are, as there is no political appetite to tax the wealthiest people less.
People in finance and IT can make a ton compared to other folk. If the top tax band was raised to 500,000k or something all that extra money would just go on bigger houses, fancy cars and holidays and shit.
A less progressive tax system is bad for society. Eg. I just got a letter saying kids books will be free in primary schools now. Don't get me wrong, there are big problems in Ireland, but taxing well off people less is not gonna fix anything!
People in finance and IT can make a ton compared to other folk. If the top tax band was raised to 500,000k or something all that extra money would just go on bigger houses, fancy cars and holidays and shit.
A less progressive tax system is bad for society. Eg. I just got a letter saying kids books will be free in primary schools now. Don't get me wrong, there are big problems in Ireland, but taxing well off people less is not gonna fix anything!
>_especially_ immigration
At least that is good, as immigration takes a lot of what little available housing that is available.
It's the same in the USA. Housing prices are shooting up on everything and 40 million Mexicans - not counting all the immigrants from other countries - that have moved here. Don't tell me that has zero effect on the housing market here in the USA. Probably more than all other causes combined.
At least that is good, as immigration takes a lot of what little available housing that is available.
It's the same in the USA. Housing prices are shooting up on everything and 40 million Mexicans - not counting all the immigrants from other countries - that have moved here. Don't tell me that has zero effect on the housing market here in the USA. Probably more than all other causes combined.
> The personal tax rate is banded, so only your income _above_ a certain amount is taxed at [...]
Same for the US. Isn't every country like that? The US's highest federal income tax rate is 37%, and that applies to income over $578,125 for single people and $693,750 for married couples. This isn't counting state taxes (0-12.3% depending on the state) and FICA taxes (2.35% at that income level).
Same for the US. Isn't every country like that? The US's highest federal income tax rate is 37%, and that applies to income over $578,125 for single people and $693,750 for married couples. This isn't counting state taxes (0-12.3% depending on the state) and FICA taxes (2.35% at that income level).
So in some states you do match the Irish rates? There's no extra layers like state or city tax in Ireland for individuals, local government is funded by national government, business rates, and sometimes specific charged for services (e.g. bin collection, though private options exist too)
In no states do we hit the Irish rates on your marginal dollar for someone whose taxable income is say € 75000. ( = $82000 )
In Ireland your next euro would be taxed at 52% but in say, NYC which may have the highest burden since it has a rare local income tax:
Using single figures, married is different:
Federal tax -> falls into the 22% bracket (covers taxable income $41,776 to $89,075)
State tax -> 6.25% bracket
Local tax -> 3.819% bracket
Obviously we have the same marginal system you do, so I'm only talking about how much of your "next dollar" is taxed but that adds up to just over 32%.
On the other hand, health insurance. One guess from Google says "a Silver tier plan in New York costs $710 monthly" so using that 710 x 12 = 8,520 a year, or about 10% of your income (note: since we deduct health premiums off your income, it would actually effectively reduce your taxable income and rejigger those tax brackets). And our property tax can be staggering in high-cost areas, and is obviously passed on even to renters. Mine is in the neighborhood of $8,500 a year.
Also does Ireland have a "standard deduction"? This is just an amount that everybody gets to subtract before even using the brackets to compute, so our brackets don't really start taxing at dollar #1 like they appear to.
Anyway, it's all ridiculous, I know! But yeah, it looks like your "€75000 earner" isn't all that disadvantaged compared to here. Your €200000 earner definitely is, though! :D
Sources: * https://www.nerdwallet.com/article/taxes/federal-income-tax-...
* https://www.nerdwallet.com/article/taxes/new-york-state-tax
* https://propertyclub.nyc/article/new-york-city-income-tax#ny...
Using single figures, married is different:
Federal tax -> falls into the 22% bracket (covers taxable income $41,776 to $89,075)
State tax -> 6.25% bracket
Local tax -> 3.819% bracket
Obviously we have the same marginal system you do, so I'm only talking about how much of your "next dollar" is taxed but that adds up to just over 32%.
On the other hand, health insurance. One guess from Google says "a Silver tier plan in New York costs $710 monthly" so using that 710 x 12 = 8,520 a year, or about 10% of your income (note: since we deduct health premiums off your income, it would actually effectively reduce your taxable income and rejigger those tax brackets). And our property tax can be staggering in high-cost areas, and is obviously passed on even to renters. Mine is in the neighborhood of $8,500 a year.
Also does Ireland have a "standard deduction"? This is just an amount that everybody gets to subtract before even using the brackets to compute, so our brackets don't really start taxing at dollar #1 like they appear to.
Anyway, it's all ridiculous, I know! But yeah, it looks like your "€75000 earner" isn't all that disadvantaged compared to here. Your €200000 earner definitely is, though! :D
Sources: * https://www.nerdwallet.com/article/taxes/federal-income-tax-...
* https://www.nerdwallet.com/article/taxes/new-york-state-tax
* https://propertyclub.nyc/article/new-york-city-income-tax#ny...
> And our property tax can be staggering in high-cost areas, and is obviously passed on even to renters. Mine is in the neighborhood of $8,500 a year.
The high band of property tax is €300/yr and I've never heard it passed on to renters here.
> Also does Ireland have a "standard deduction"? This is just an amount that everybody gets to subtract before even using the brackets to compute, so our brackets don't really start taxing at dollar #1 like they appear to.
Yes, there's a minimum standard deduction of €3550 (€1775 for single person, plus €1775 for being an employee), that is effectively deducted from the tax bill at the final step, and others may replace these with larger amounts for different categories of workers, life circumstances on top of that.
The high band of property tax is €300/yr and I've never heard it passed on to renters here.
> Also does Ireland have a "standard deduction"? This is just an amount that everybody gets to subtract before even using the brackets to compute, so our brackets don't really start taxing at dollar #1 like they appear to.
Yes, there's a minimum standard deduction of €3550 (€1775 for single person, plus €1775 for being an employee), that is effectively deducted from the tax bill at the final step, and others may replace these with larger amounts for different categories of workers, life circumstances on top of that.
It would be passed on to renters as a higher price.
In theory yes, but this tax was introduced in recent memory and the rate of rent increases that year was not noticeably different to the rate of rent increases in other years, as the prices are limited (well "limited") by the ability of tenants to pay, rather than being driven by costs. And the most expensive areas have rent control anyway.
True, RPZ makes it harder to pass along costs. And it makes sense tenant ability to pay affects rents in the current shortage.
You add some excellent background and context. I was reading the article screaming "it's so much more complicated than this".
> Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested.
I'm curious how much you're listing it above your purchase price. Show me a vendor who doesn't succumb to estate agents whispering in their ear about what you can get for it or a belief they _have_ to participate in 'supply and demand' and I'll eat my hat. (Yes, I'm just as guilty of this)
> Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested.
I'm curious how much you're listing it above your purchase price. Show me a vendor who doesn't succumb to estate agents whispering in their ear about what you can get for it or a belief they _have_ to participate in 'supply and demand' and I'll eat my hat. (Yes, I'm just as guilty of this)
How would I not participate in supply and demand? I'll sell to the highest bidder, whatever that is.
Though I suspect I'll take a loss when all is said and done. I was stupid enough to buy a protected structure and thanks to heritage's intransigence I now have a thatched cottage (recently rethatched!) with a beautiful 120 sqm extension with huge windows, high ceilings, engineered wood floors, heat pumps, insulated foundation.... and no insurance. Because of the thatched bit...
Though I suspect I'll take a loss when all is said and done. I was stupid enough to buy a protected structure and thanks to heritage's intransigence I now have a thatched cottage (recently rethatched!) with a beautiful 120 sqm extension with huge windows, high ceilings, engineered wood floors, heat pumps, insulated foundation.... and no insurance. Because of the thatched bit...
I thought there was an imitation thatch people could use? Looks like thatch (for "protected structure" purposes); doesn't rot?
Removing or replacing the existing thatch with anything but the same material (oaten straw) is highly illegal and could land me in jail.
Of course, heritage's stubbornness is also why my own county lost 40% of thatched buildings in the last 20 years and will probably lose them all in the next 20.
In some cases buildings are worth literally less than nothing (the land would be worth more without them) because heritage is naive enough to think some rich eccentric wants to plow millions of Euro in to fixing some dump in the middle of nowhere.
I mean, 150,000 for this building is a joke - https://www.offalyexpress.ie/news/home/1081285/historic-mill...
The land would be worth more if the building were demolished (and it had planning permission to build homes). But heritage officers won't allow that, so nature will demolish slowly (and make the town ever uglier in the process) and THEN in 30 years or so it will finally be demolished.
Of course, heritage's stubbornness is also why my own county lost 40% of thatched buildings in the last 20 years and will probably lose them all in the next 20.
In some cases buildings are worth literally less than nothing (the land would be worth more without them) because heritage is naive enough to think some rich eccentric wants to plow millions of Euro in to fixing some dump in the middle of nowhere.
I mean, 150,000 for this building is a joke - https://www.offalyexpress.ie/news/home/1081285/historic-mill...
The land would be worth more if the building were demolished (and it had planning permission to build homes). But heritage officers won't allow that, so nature will demolish slowly (and make the town ever uglier in the process) and THEN in 30 years or so it will finally be demolished.
Heritage thatch?! Unbelievable! Ireland could easily be Singapore of Europe, especially after Brexit.
? Ireland remains in the EU. And it's common to have stricter rules for historical buildings (fair enough, my cottage is over 200 years old) but normally it comes with provisions for supporting maintenance, insurance, etc. Ireland just half-asses it.
Yeah that was an awkward phrasing on my part.
What I mean is that vendors/landlords can decide to sell/rent for less than the maximum being offered and collectively cool the market themselves, theoretically.
However it requires extreme coordination because if the vendor of my next property is trying to achieve maximum gains then it would be a financial double whammy for me if I take less than the maximum being offered.
The point is that by accepting the absolute maximum I can get for my property, I am playing a part in raising property prices, whatever the reason.
You said “I will sell”. It’s an active choice, not a law of nature. You make a decision. We all do
What I mean is that vendors/landlords can decide to sell/rent for less than the maximum being offered and collectively cool the market themselves, theoretically.
However it requires extreme coordination because if the vendor of my next property is trying to achieve maximum gains then it would be a financial double whammy for me if I take less than the maximum being offered.
The point is that by accepting the absolute maximum I can get for my property, I am playing a part in raising property prices, whatever the reason.
You said “I will sell”. It’s an active choice, not a law of nature. You make a decision. We all do
If you want to fix this think about modifying incentives that pull the levers of supply/demand.
Asking a random person on the internet to not do what is in their best interest because ... "utopia" is really naive, and quite absurd tbh.
Asking a random person on the internet to not do what is in their best interest because ... "utopia" is really naive, and quite absurd tbh.
Greed is a difficult thing to modify
I wasn’t meaning to single out the OP. Just including them in “we” and trying to point out that everyone plays a part
Do you have a more coherent and substantial reply or are you just looking to call me absurd?
I wasn’t meaning to single out the OP. Just including them in “we” and trying to point out that everyone plays a part
Do you have a more coherent and substantial reply or are you just looking to call me absurd?
The problem is that the focus on "greedy landlords" or "greedy corporations" or "greedy homeowners" is that it suggests the solution is to make people stop being greedy. As a "greedy homeowner" that's very convenient for me because I know it'll never happen. No, don't increase my property taxes, don't ask for CGT on my primary residence, just keep imploring me to "stop being greedy".
Unfortunately "greed" is about the only thing you see in the discourse on the matter in Ireland, which really remains pretty unsophisticated and unable to comprehend second-order effects. I posted once or twice on one of "Ciaran's crazy house prices" rants about greed saying that we needed systemic change and the focus on "greed" was absurd - humans in Ireland are no more greedy than anywhere else - and was shouted down. Similarly, if you say "letting tenants remain in properties for months or years without paying rent might discourage people from renting out homes and make the problem worse" or "making it impossible to evict people will result in more places never being rented out in the first place" then you're some kind of heartless bastard.
Everyone is greedy! Do you go to your boss and ask for a pay cut? Do you put your car on donedeal and say "10,000 or lowest offer"? What we need is _systemic_ change that acknowledges people are greedy and produces good outcomes despite that greed.
Not to mention that the idea of selling to someone based on something besides price invites all sort of prejudice and bias. Should I choose to sell to a nice local family and tell the immigrants to go to hell? Should I sell to someone who shares my own political views? How would you have me decide?
Finally, a lot of people are selfless until faced with the reality of the situation. The next house I buy? It's going to the highest bidder. The best way for me to make sure that bidder is me is to get the best price I can now for my current house.
It's going to the highest bidder.
Unfortunately "greed" is about the only thing you see in the discourse on the matter in Ireland, which really remains pretty unsophisticated and unable to comprehend second-order effects. I posted once or twice on one of "Ciaran's crazy house prices" rants about greed saying that we needed systemic change and the focus on "greed" was absurd - humans in Ireland are no more greedy than anywhere else - and was shouted down. Similarly, if you say "letting tenants remain in properties for months or years without paying rent might discourage people from renting out homes and make the problem worse" or "making it impossible to evict people will result in more places never being rented out in the first place" then you're some kind of heartless bastard.
Everyone is greedy! Do you go to your boss and ask for a pay cut? Do you put your car on donedeal and say "10,000 or lowest offer"? What we need is _systemic_ change that acknowledges people are greedy and produces good outcomes despite that greed.
Not to mention that the idea of selling to someone based on something besides price invites all sort of prejudice and bias. Should I choose to sell to a nice local family and tell the immigrants to go to hell? Should I sell to someone who shares my own political views? How would you have me decide?
Finally, a lot of people are selfless until faced with the reality of the situation. The next house I buy? It's going to the highest bidder. The best way for me to make sure that bidder is me is to get the best price I can now for my current house.
It's going to the highest bidder.
Greed is hardwired into the human condition and I think it would be absurd to try and persuade people into transactions that would not be in their best interest and think you can have success.
Especially where it is akin to a prisoner's dillema and a few bad actors can take advantage of your good intentions.
My point was if you really care about this issue you need to think about incentives and/or government regulation as a solution - not preaching.
Especially where it is akin to a prisoner's dillema and a few bad actors can take advantage of your good intentions.
My point was if you really care about this issue you need to think about incentives and/or government regulation as a solution - not preaching.
Sure, but I'm not a charity and I need to move somewhere else so I'm going to sell it to whoever is willing to pay me the most. My personal choices will not effect the systemic change needed.
What do you think of Dermot Desmond's article?
https://www.irishtimes.com/opinion/dermot-desmond-everyone-h...
https://www.irishtimes.com/opinion/dermot-desmond-everyone-h...
Haven't read it, though quickly skimming doesn't give much hope. All this talk about "hoarding" and not enough about how it's default-illegal to build a house until you satisfy every church biddy around. We need as-right zoning. I'd weep for joy if Ireland passed sensible ADU rules like California.
Not the OP, but I would describe this article as muddled. And in a way that’s common for people who haven’t thought deeply about the housing market.
For example he complains that 95% of apartments are owned by institutions, but also that rents are too high. These complaints are in tension. One of the key ways in which rental supply is expanded is through large developments that are owned and managed by companies. For example, here in Downtown Brooklyn we’re getting a new “super tall” building with 425 apartments for rent [1]. How can you create this kind of rental supply without institutions? Is your plan to somehow sell 425 apartments to individual owners and hope those owners can rent them out? I don’t think it makes sense.
[1] https://en.m.wikipedia.org/wiki/The_Brooklyn_Tower
For example he complains that 95% of apartments are owned by institutions, but also that rents are too high. These complaints are in tension. One of the key ways in which rental supply is expanded is through large developments that are owned and managed by companies. For example, here in Downtown Brooklyn we’re getting a new “super tall” building with 425 apartments for rent [1]. How can you create this kind of rental supply without institutions? Is your plan to somehow sell 425 apartments to individual owners and hope those owners can rent them out? I don’t think it makes sense.
[1] https://en.m.wikipedia.org/wiki/The_Brooklyn_Tower
One of the weird things moving from Australia to Germany was that most rentals are owned by private individuals in Australia and companies in Germany. The difference is huge - renter's rights are much greater in Germany, and that seems to go hand-in-hand with institutional landlords (I guess because the landlords aren't voters but the tenants are, so laws skew towards the tenants).
I've been fortunate to have a personal house we rented out, and also have insight into a larger organisation that has multiple properties to rent.
The difference between the two is the risk of a bad tenant.
With my personal property we were fortunate to never have a really bad tenant. We had high ish turnover (it's a starter home, indeed was our starter home, so typically people grow out of it.) we'd lose a month or so if rent between tenants, there would be some money spent on maintainence and so on. Our time was uncoated.
We have strong tenant laws here, so if you geg a bad tenant, who literally just stops paying, it can take months of lost rent, and significant legal fees to get an eviction. Bizarre as it sounds its cheaper to _pay_ a bad tenant to leave than drag it out in the courts.
For institutions this is a cost of doing business, and is factored into overall rent.
If a private owner encounters such a situation it basically causes them to sell out - one more private property goes into institutional hands.
In other words private owners don't understand the risks and "hidden costs". As long as they only gave good tenants things are rosy. First bad one, and they exit the supply chain (and have lots of good horror stories for their mates.)
So I think your cause/effect is backwards. Good tenant laws (which I think are generally a good thing for good tenants) can make house-rental unattractive to individuals. Resulting in mostly "for profit" housing supply. Plus good tenants subsidise bad ones.
Ironically strong tenant laws also make it a _very_ tough market for new, or risky, tenants. Landlords understand the high costs involved, and do become very risk-adverse with applicants. Which is bad if you have high risk factors (like self-employment).
It's a very delicate balance to get tight. We need strong tenant protections, but we also need some landlord protections to keep the market in balance.
The difference between the two is the risk of a bad tenant.
With my personal property we were fortunate to never have a really bad tenant. We had high ish turnover (it's a starter home, indeed was our starter home, so typically people grow out of it.) we'd lose a month or so if rent between tenants, there would be some money spent on maintainence and so on. Our time was uncoated.
We have strong tenant laws here, so if you geg a bad tenant, who literally just stops paying, it can take months of lost rent, and significant legal fees to get an eviction. Bizarre as it sounds its cheaper to _pay_ a bad tenant to leave than drag it out in the courts.
For institutions this is a cost of doing business, and is factored into overall rent.
If a private owner encounters such a situation it basically causes them to sell out - one more private property goes into institutional hands.
In other words private owners don't understand the risks and "hidden costs". As long as they only gave good tenants things are rosy. First bad one, and they exit the supply chain (and have lots of good horror stories for their mates.)
So I think your cause/effect is backwards. Good tenant laws (which I think are generally a good thing for good tenants) can make house-rental unattractive to individuals. Resulting in mostly "for profit" housing supply. Plus good tenants subsidise bad ones.
Ironically strong tenant laws also make it a _very_ tough market for new, or risky, tenants. Landlords understand the high costs involved, and do become very risk-adverse with applicants. Which is bad if you have high risk factors (like self-employment).
It's a very delicate balance to get tight. We need strong tenant protections, but we also need some landlord protections to keep the market in balance.
insightful, thanks :)
It's because the Soviet Union defeated the Nazis, resulting in very strong communist influence during the reconstruction era.
Hm the opinion of Ireland's 9th richest person - a past banker, current businessman and financier - on the housing market, this should be interesting.
(Maybe he could offer to pay for the refurbishment of the the Taoiseach's yacht (again), in an effort to influence housing policy?)
(Maybe he could offer to pay for the refurbishment of the the Taoiseach's yacht (again), in an effort to influence housing policy?)
> Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested.
Christ I would love to be, but 3.5 acres is way out of my league. Good luck with the sale man!
Christ I would love to be, but 3.5 acres is way out of my league. Good luck with the sale man!
The land is actually not expensive! This place is less than a 2 bed flat in parts of Dublin.
Best summary I've seen in years. I emigrated due to this nonsense.
Immigrating here was a mistake.
The tax-advantaged status of your primary residence is also a major driver of the housing bubble in Canada as well.
It could be, though I can't help but notice that the USA levies taxes on primary homes and in many jurisdictions in that country they also have very expensive real estate. (yes there's a sizeable exemption, but not so big that no one would ever pay it)
I suspect other issues such as low rental vacancy, not enough supply of homes and very low property taxes are more dominant causes of high Canadian real estate prices.
I suspect other issues such as low rental vacancy, not enough supply of homes and very low property taxes are more dominant causes of high Canadian real estate prices.
Isn't there a lifetime limit of capital gains shelter there much less than the price of homes in the big cities?
It's not like the US where mortgate payments are sheltered, right?
It's not like the US where mortgate payments are sheltered, right?
No, in Canada there is no limit to the tax exemption for primary residence.
> the US where mortgate payments are sheltered
Not sure what you mean by this. In the US, the interest on your mortgage is tax deductible up to a certain amount. But the amount of this tax advantage is fixed at your purchase price. You don't get increasing tax savings as the value of your home increases. As for capital gains tax deduction, this is limited to $250k for a single filer, or $500k for married.
> the US where mortgate payments are sheltered
Not sure what you mean by this. In the US, the interest on your mortgage is tax deductible up to a certain amount. But the amount of this tax advantage is fixed at your purchase price. You don't get increasing tax savings as the value of your home increases. As for capital gains tax deduction, this is limited to $250k for a single filer, or $500k for married.
Ah I see, there is a lifetime capital gains exemption limit but not applied to “primary” residence. There it seems to just be exempt.
And yes I meant there isn’t a mortgage deduction but had think while typing.
And yes I meant there isn’t a mortgage deduction but had think while typing.
> mortgages are capped at only 4x your income
How does this work? If I'm earning (say) 50k, can I only take a mortgage of up to 200k?
How does this work? If I'm earning (say) 50k, can I only take a mortgage of up to 200k?
Yes basically. I am in the process of getting a mortgage in Ireland and they will give you up to 4x the gross income of those applying. This doesn't include any deposit or savings you may have of course.
Wow. That seems very conservative.
Over here in Croatia they only look at your last 3-6 pay slips and that's it. I own a small LLC and I gave myself a raise before taking out a mortgage, then after I got the mortgage I returned back to my original salary.
On a 2.200 EUR before tax salary I was cleared for a 150.000 EUR mortgage, but could have went even above that. They don't care about deposits or savings, even though owning a credit card and investing briefly (40 EUR each month for 2-3 months, then you can stop investing) in one of the bank's funds does lower your interest rate (which was 2.48% before New Year, now it over 3%).
Over here in Croatia they only look at your last 3-6 pay slips and that's it. I own a small LLC and I gave myself a raise before taking out a mortgage, then after I got the mortgage I returned back to my original salary.
On a 2.200 EUR before tax salary I was cleared for a 150.000 EUR mortgage, but could have went even above that. They don't care about deposits or savings, even though owning a credit card and investing briefly (40 EUR each month for 2-3 months, then you can stop investing) in one of the bank's funds does lower your interest rate (which was 2.48% before New Year, now it over 3%).
Nowhere has a "YIMBY party" haha. YIMBY types are literally just profit-seeking developers.
> The left shrieks about "evil developers" and "affordable housing" and opposes new market-rate building.
See...there you are. The opposition is the YIMBY types.
> The left shrieks about "evil developers" and "affordable housing" and opposes new market-rate building.
See...there you are. The opposition is the YIMBY types.
> But you bought a house in 1992 and then shouted down all new development for the last 30 years and now can sell it for €1.5 million more than you paid? Why, that's your HOME you can't tax HOMES can you??
The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle.
Incentivising ownership through reducing capital gains for owners also encourages a society where people own their home which hugely softens the issues of retirement and pensions as well as greatly adding to peoples psychological sense of security.
Increasing annual land taxes is a better solution imo, especially in more desirable locations (they should stay low in poorer areas).
The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle.
Incentivising ownership through reducing capital gains for owners also encourages a society where people own their home which hugely softens the issues of retirement and pensions as well as greatly adding to peoples psychological sense of security.
Increasing annual land taxes is a better solution imo, especially in more desirable locations (they should stay low in poorer areas).
> The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle.
I don't think this really matters unless a lot of people are upside down on their homes.
We could probably target a 2% annual housing price decline (until builders stopped building) and still be fine in that regard.
I don't think this really matters unless a lot of people are upside down on their homes.
We could probably target a 2% annual housing price decline (until builders stopped building) and still be fine in that regard.
Everyone is upside down on a home in at least the first five years. In a world with job instability and lack of remote options, I can see their argument as valid.
I'm somewhat politically engaged in my local municipality over this issue; we're a small suburb directly adjacent to Chicago, and every viable piece of residential land was developed, overwhelmingly SFZ, decades ago.
The problem we have here seems like the solution this article proposes: any new development will, automatically, generate organized opposition from the block (and neighboring blocks) it's sited on, and the challenge is ensuring that the planning and zoning variance process makes decisions for the good of the municipality, and not just to suit the preferences of the neighbors.
I don't know how much our experience ports over to Ireland (probably not that much), but to me this is the opposite of what you'd want; rather, you'd want to do what California ostensibly does: moving control over residential zoning/planning to a level of government high enough that concentrated local interests can't derail the more important diffuse interest in getting more housing built.
The problem we have here seems like the solution this article proposes: any new development will, automatically, generate organized opposition from the block (and neighboring blocks) it's sited on, and the challenge is ensuring that the planning and zoning variance process makes decisions for the good of the municipality, and not just to suit the preferences of the neighbors.
I don't know how much our experience ports over to Ireland (probably not that much), but to me this is the opposite of what you'd want; rather, you'd want to do what California ostensibly does: moving control over residential zoning/planning to a level of government high enough that concentrated local interests can't derail the more important diffuse interest in getting more housing built.
Having lived in several places in Ireland and in the US, I think the dynamics are very similar. I live in Magnolia in Seattle, where the city planning meetings, Facebook groups, and NextDoor forums have many neighbors objecting to the first sign of real high density housing in the area, because they want to "preserve its character".
In Ballyfermot in Dublin, I see the very same in the groups there in response to similar developments. Ballyfermot is a well connected inner city suburb - perfect for more density - but most of the locals still seem against it. In Ireland the political party who campaign on housing and stand to benefit the most, Sinn Fein, are often objecting themselves to these projects. The fundamental dynamic is that the people who would benefit just don't live in the area yet, and their future theoretical votes don't count yet.
In Ballyfermot in Dublin, I see the very same in the groups there in response to similar developments. Ballyfermot is a well connected inner city suburb - perfect for more density - but most of the locals still seem against it. In Ireland the political party who campaign on housing and stand to benefit the most, Sinn Fein, are often objecting themselves to these projects. The fundamental dynamic is that the people who would benefit just don't live in the area yet, and their future theoretical votes don't count yet.
We have a couple of new estates going in on old farmland next to our 1970's era estate, and the outcry over the fact that building was happening was amazing. There's periodic calls to close a walkway through the wall to the next estate, because the wrong people walk through. This walkway is part of a designated quiet traffic route between parts of town. There's (finally) bike lanes going in on the main road, with initial sitework happening, and the first thing that people yelled about was that they weren't consulted. (Full public comment on that plan has been going on for 5 years. Why it takes 5 years to put a bike lane on .75km of a 50KPH road that connects 5 different schools. None of the students of those schools when the plan was proposed will be still there to take advantage of it.)
At one point last year were 5 places to rent in Meath on the biggest rental site.
We bought about 5 years back, when our rental went up for sale and we couldn't find a new rental then. Hindsight is saying it was a great move, even though prices in our estate have been pretty flat since then.
At one point last year were 5 places to rent in Meath on the biggest rental site.
We bought about 5 years back, when our rental went up for sale and we couldn't find a new rental then. Hindsight is saying it was a great move, even though prices in our estate have been pretty flat since then.
In WA SB 1110 just got approved, which would allow 4plexes in SFZ lots if the city is over 75k people, so we will see how long can things stay the same now that flood gates will open.
Now watch as cities suddenly split into multiple municipalities of 74k people...
There are only 16 cities in Washington over 75k. It simply doesn't apply to most municipalities in the state.
(That's out of 281 municipalities.)
https://en.m.wikipedia.org/wiki/List_of_municipalities_in_Wa...
(That's out of 281 municipalities.)
https://en.m.wikipedia.org/wiki/List_of_municipalities_in_Wa...
>if the city is over 75k people
My moral hazard alarm is ringing.
My moral hazard alarm is ringing.
Moral hazard alarm? What/why is that?
Could a city subdivide itself in order to avoid the new zoning?
We need to federalize zoning just like Japan. You should be able to build anything permissible on your land - and if your neighbors aren't happy with that they should buy your land to stop it, or move. Exceptions to this policy should be meaningful enough that you need to get the federal government involved.
I think state-level zoning hits the sweet spot— the US has some wildly different climates and geography, and I do appreciate that zoning in, say, Rhode Island, Nevada, and California have distinct enough geocultural situations to have their own codes. I don’t expect federal lawmakers from Ohio to worry about the California coastline, for example.
However, I don’t see any reason why Atherton gets to have a different zoning than San Francisco, or Santa Monica/Beverly Hills an entirely different code than Los Angeles.
Theoretically, it would be amazing to have a singular state zoning board pooled from all of the resources of smaller municipal offices, with one standard application and one process.
Right now it’s crazy that Los Angeles and Beverly Hills have two completely different zoning codes with two completely different processes— so much time wasted on two different bureaucracies (and sometimes, both! If the project is big enough) based on if something is one block over or not.
State level DOTs have shown, in a way, how effective this approach can be (though rather than encouraging sprawl, we do the same for density). If we built housing anywhere as fast as we do highways, imagine how much would get built.
However, I don’t see any reason why Atherton gets to have a different zoning than San Francisco, or Santa Monica/Beverly Hills an entirely different code than Los Angeles.
Theoretically, it would be amazing to have a singular state zoning board pooled from all of the resources of smaller municipal offices, with one standard application and one process.
Right now it’s crazy that Los Angeles and Beverly Hills have two completely different zoning codes with two completely different processes— so much time wasted on two different bureaucracies (and sometimes, both! If the project is big enough) based on if something is one block over or not.
State level DOTs have shown, in a way, how effective this approach can be (though rather than encouraging sprawl, we do the same for density). If we built housing anywhere as fast as we do highways, imagine how much would get built.
Sorry, no. You don't need state-level zoning, you can do it all at the national level.
Japan has a single national zoning code, and Japan also has wildly different climates and geography: snowy Hokkaido is nothing like tropical Okinawa. The zoning code is very simple, so there's no reason to make it different based on geography. Here's a nice blog posting about it:
http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
Japan has a single national zoning code, and Japan also has wildly different climates and geography: snowy Hokkaido is nothing like tropical Okinawa. The zoning code is very simple, so there's no reason to make it different based on geography. Here's a nice blog posting about it:
http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
To be clear, I would love a simple Japan-style federal zoning code.
I just don’t think that it’s politically feasible nor practical— like most everything at the federal level, including things as fundamental as the IRS tax code or debt ceiling, it would be subject to large changes every year.
“We won’t approve this tax code unless no new housing in California is allowed but also multi-family is banned in many these states” would now be a possible (even likely) debate.
At least California/Texas/whatever representatives are beholden to their own state enough that they won’t actively sabotage their constituents to gain political points. We saw this with the SALT tax repeal under Trump as a specific way to hurt populous blue states and do essentially nothing to rural red states (except Texas, which ironically was a big benefactor of that policy due to its high property taxes). Why wouldn’t federal zoning fall into the same trap?
Furthermore, from a constitutional perspective, there’s no way barring an amendment for the federal government to control how non-federally-owned land is used. The whole purpose of states is to govern matters within their borders, and the federal to govern matters which exceed any one state’s borders. Even the Federal Highway Administration, arguably the closest analog, is not in charge of building or planning highways directly— it just funds plans it approves, but it doesn’t dictate what those plans are, instead leaving it up to the states to grapple with routes and ROW.
I just don’t think that it’s politically feasible nor practical— like most everything at the federal level, including things as fundamental as the IRS tax code or debt ceiling, it would be subject to large changes every year.
“We won’t approve this tax code unless no new housing in California is allowed but also multi-family is banned in many these states” would now be a possible (even likely) debate.
At least California/Texas/whatever representatives are beholden to their own state enough that they won’t actively sabotage their constituents to gain political points. We saw this with the SALT tax repeal under Trump as a specific way to hurt populous blue states and do essentially nothing to rural red states (except Texas, which ironically was a big benefactor of that policy due to its high property taxes). Why wouldn’t federal zoning fall into the same trap?
Furthermore, from a constitutional perspective, there’s no way barring an amendment for the federal government to control how non-federally-owned land is used. The whole purpose of states is to govern matters within their borders, and the federal to govern matters which exceed any one state’s borders. Even the Federal Highway Administration, arguably the closest analog, is not in charge of building or planning highways directly— it just funds plans it approves, but it doesn’t dictate what those plans are, instead leaving it up to the states to grapple with routes and ROW.
> To be clear, I would love a simple Japan-style federal zoning code.
Japan doesn't really have a "federal zoning code", because Japan isn't a federation, it is a unitary state. Japan's prefectures aren't states. In a federal system, such as the Australia, Brazil, Canada, India, Germany, Mexico, Switzerland or the US, the constitution grants certain powers to the federal government and the states generally retain the rest. By contrast, in a unitary system, the national government retains all power, but may choose to delegate certain powers to subnational divisions, such as Japan's prefectures. Japan's prefectures are delegated responsibility for certain functions. They don't have general powers of legislation, only the power to make subsidiary laws on certain specific topics where national law grants them that authority. Japan's prefectures are actually just the first tier of Japan's two tiers of local government. There is a proposal to convert Japan into a proper federation (Dōshūsei, 道州制), by creating states/provinces as a new level of government in between the prefectures and national government (except for the prefecture of Hokkaido, which would become a state/province). However, although there is somewhat of a consensus in Japanese politics in support of this idea in principle, in practice not much progress has been made–I believe in part due to disagreements over exactly how many states/provinces to create, what should be their boundaries, and exactly what powers they should have.
The distribution of powers between the state and federal levels is different in every federation. For example, in Canada, Germany and India, enacting criminal law is a federal responsibility, and states lack the power to make their own criminal law, but they still play a major role in its enforcement; by contrast, in Australia and the US, every state has its own criminal law, with state and federal criminal law working in parallel. So there is no reason why, even in a federal system, you couldn't give the federal government powers over zoning. In practice, however, I'm not aware of any country in which that has happened. In most federal systems, zoning law is a state or local responsibility, and a constitutional amendment could be required to transfer that power to the federal level.
In Australia, there is a process called referral by which states can voluntarily transfer certain powers to the federal level, without requiring a constitutional amendment. In principle, Australia could adopt a federal zoning law, without changing the constitution, if every state passed a law referring that authority to the federal level. A state can unilaterally take back the power at any time by repealing its referral law. Never been used for zoning, and I doubt it ever would be, but it has been used in some areas of law – for example, it was used to establish Australia's uniform national corporations law. However, I don't know if that would work in the US, since while Australia's constitution explicitly says you can do this, the US constitution doesn't. Even were the Supreme Court to rule that "states can voluntarily delegate powers to Congress even without an explicit constitutional provision to authorise it", it is a lot easier to get every state to agree on something when you only have 6 as opposed to 50.
Another option would be a uniform law, instead of a federal law – in which every state voluntarily chooses to enact the same law. A famous example in the US is the Uniform Commercial Code. No reason in theory why you couldn't have a Uniform Zoning Code to go with it, but I doubt you'd ever get all 50 states to agree on its contents. Consensus is much easier in commercial law because it is the kind of dry legal area in which few people really care about the details, and few people would be impacted by different options as to what those details are
Japan doesn't really have a "federal zoning code", because Japan isn't a federation, it is a unitary state. Japan's prefectures aren't states. In a federal system, such as the Australia, Brazil, Canada, India, Germany, Mexico, Switzerland or the US, the constitution grants certain powers to the federal government and the states generally retain the rest. By contrast, in a unitary system, the national government retains all power, but may choose to delegate certain powers to subnational divisions, such as Japan's prefectures. Japan's prefectures are delegated responsibility for certain functions. They don't have general powers of legislation, only the power to make subsidiary laws on certain specific topics where national law grants them that authority. Japan's prefectures are actually just the first tier of Japan's two tiers of local government. There is a proposal to convert Japan into a proper federation (Dōshūsei, 道州制), by creating states/provinces as a new level of government in between the prefectures and national government (except for the prefecture of Hokkaido, which would become a state/province). However, although there is somewhat of a consensus in Japanese politics in support of this idea in principle, in practice not much progress has been made–I believe in part due to disagreements over exactly how many states/provinces to create, what should be their boundaries, and exactly what powers they should have.
The distribution of powers between the state and federal levels is different in every federation. For example, in Canada, Germany and India, enacting criminal law is a federal responsibility, and states lack the power to make their own criminal law, but they still play a major role in its enforcement; by contrast, in Australia and the US, every state has its own criminal law, with state and federal criminal law working in parallel. So there is no reason why, even in a federal system, you couldn't give the federal government powers over zoning. In practice, however, I'm not aware of any country in which that has happened. In most federal systems, zoning law is a state or local responsibility, and a constitutional amendment could be required to transfer that power to the federal level.
In Australia, there is a process called referral by which states can voluntarily transfer certain powers to the federal level, without requiring a constitutional amendment. In principle, Australia could adopt a federal zoning law, without changing the constitution, if every state passed a law referring that authority to the federal level. A state can unilaterally take back the power at any time by repealing its referral law. Never been used for zoning, and I doubt it ever would be, but it has been used in some areas of law – for example, it was used to establish Australia's uniform national corporations law. However, I don't know if that would work in the US, since while Australia's constitution explicitly says you can do this, the US constitution doesn't. Even were the Supreme Court to rule that "states can voluntarily delegate powers to Congress even without an explicit constitutional provision to authorise it", it is a lot easier to get every state to agree on something when you only have 6 as opposed to 50.
Another option would be a uniform law, instead of a federal law – in which every state voluntarily chooses to enact the same law. A famous example in the US is the Uniform Commercial Code. No reason in theory why you couldn't have a Uniform Zoning Code to go with it, but I doubt you'd ever get all 50 states to agree on its contents. Consensus is much easier in commercial law because it is the kind of dry legal area in which few people really care about the details, and few people would be impacted by different options as to what those details are
>We need to federalize zoning just like Japan.
Nit-pick: Japan does not have "federalized zoning", or federalized anything. Japan does not have a federal government; nor, does Ireland, nor most other countries in the world. This is an Americanism (though it applies to Germany too). In most countries, which have unitary governments, the top-most level of government is the "national government", so what you want is "nationalized zoning".
Anyway, yes, Japan's nationalized zoning is great. We're not having the ridiculous housing problems I keep reading about in western nations. However, it does have its detractors, like westerners vising Japan and then whining about how all the buildings look so different from each other and there's no "character". If you want historically-preserved neighborhoods, or neighborhoods where all the buildings have the same theme and architectural style, you won't find it in most of Japan.
Nit-pick: Japan does not have "federalized zoning", or federalized anything. Japan does not have a federal government; nor, does Ireland, nor most other countries in the world. This is an Americanism (though it applies to Germany too). In most countries, which have unitary governments, the top-most level of government is the "national government", so what you want is "nationalized zoning".
Anyway, yes, Japan's nationalized zoning is great. We're not having the ridiculous housing problems I keep reading about in western nations. However, it does have its detractors, like westerners vising Japan and then whining about how all the buildings look so different from each other and there's no "character". If you want historically-preserved neighborhoods, or neighborhoods where all the buildings have the same theme and architectural style, you won't find it in most of Japan.
> you won't find it in most of Japan.
What about historic districts? I noticed some unified styles around Asakusa (noticed while walking home drunk from Uueno, lively red lanterns everywhere and no high rises, just row homes), and definitely in Kyoto’s old town. I’m guessing this is mostly for the tourists, however.
What about historic districts? I noticed some unified styles around Asakusa (noticed while walking home drunk from Uueno, lively red lanterns everywhere and no high rises, just row homes), and definitely in Kyoto’s old town. I’m guessing this is mostly for the tourists, however.
You're not going to find a huge high-rise right next to a bunch of row homes; there's rules against that. High-rises have to have a certain amount of space around them anyway, but also there's rules about how much you're allowed to block your neighbors' sunlight. Basically, making taller buildings is allowed, but they can only be so much taller than the surrounding buildings. Over time, this means things could get very tall, but not quickly.
As for unified styles, there's no laws about that AFAIK. They're probably just like that because the landowners want it that way. Lots of stuff in Japan is done (or not done) without any formal laws or rules, but rather because of social pressure and consensus. It's possible that some very unique or culturally-important districts do have certain rules though, which is why I wrote "... in most of Japan".
As for unified styles, there's no laws about that AFAIK. They're probably just like that because the landowners want it that way. Lots of stuff in Japan is done (or not done) without any formal laws or rules, but rather because of social pressure and consensus. It's possible that some very unique or culturally-important districts do have certain rules though, which is why I wrote "... in most of Japan".
There's landscape policy per town https://www.city.kyoto.lg.jp/tokei/page/0000281400.html
Yes, so long as this appeal to a higher authority is about preventing localities from passing legislation that makes it impossible for residents to engage in ordinary economic activity and not instead about central planning by other means.
We've made it impossible to build housing for about 70 years. Let's stop doing that for a while and see what happens.
We've made it impossible to build housing for about 70 years. Let's stop doing that for a while and see what happens.
For people taking on this problem, these two groups are great resources that can give you a big boost in terms of learning how to do this kind of advocacy:
* https://yimbyaction.org/
* https://welcomingneighbors.us/
And: it's great and very rewarding. Housing, and how we build our cities, is so central to so many things. The economy, the environment, homelessness of course, and our health.
It's also something where there's been a lot of fairly rapid progress. The state of Washington just passed their 'middle housing' bill, following in the footsteps of Oregon, California and also Montana. The last one hints at an important aspect of the politics: everyone needs a place to live, whether their politics are 'red' or 'blue'.
* https://yimbyaction.org/
* https://welcomingneighbors.us/
And: it's great and very rewarding. Housing, and how we build our cities, is so central to so many things. The economy, the environment, homelessness of course, and our health.
It's also something where there's been a lot of fairly rapid progress. The state of Washington just passed their 'middle housing' bill, following in the footsteps of Oregon, California and also Montana. The last one hints at an important aspect of the politics: everyone needs a place to live, whether their politics are 'red' or 'blue'.
In Australia I'm observing a trend where state governments are continually removing powers from local councils to approve or deny applications as those councils have proven to be completely dysfunctional and work against the interests of the general population
> and work against the interests of the general population.
The non-homeowning population...
Home owner's mainly care about their investment, and the system is working as intended for these people.
The non-homeowning population...
Home owner's mainly care about their investment, and the system is working as intended for these people.
Good for those state governments!
Has anyone tried giving equity in the resulting property to the neighbours?
Doesn't moving the control to a higher level mean the rich-and-well-connected-at-state-level people get to have their way and the "little guy" is powerless? At least with a local system there is local accountability - the local politicians pushing something locally unwanted will probably not get re-elected. With state governments, it is doubtful that the exact placement of a development in a neighborhood will become an issue relevant to their re-election.
One serious way to think about this problem is that every hyper-local decision making body is corrupt, but states are only some of the time. There's no level at which you can make collective action decisions where there's no significant risk of corruption, but the narrower you go, the more natural and unavoidable the conflicts of interest become.
Genuine question, how is giving even more (hyper)local control gonna solve it? This is the exact breeding ground for NIMBYism and the like. The author doesn't really present an argument in favor of that, just sort of drops it as an assertion in the end with a CYA "but yea maybe I'm wrong".
It turns 'sell your house to a developer' into a prisoner's dilemma. If every other block is zoned single-family and your block votes to rezone for large apartment buildings, the value of your property goes up. Of course, then every block should do vote yes, and then the value of everyone's property goes down. And lots of housing gets built.
(City-wide NIMBYism is a solution to the prisoner's dilemma: band together to require that nobody be allowed to redevelop.)
Disclaimer: armchair analysis.
(City-wide NIMBYism is a solution to the prisoner's dilemma: band together to require that nobody be allowed to redevelop.)
Disclaimer: armchair analysis.
I think the unstated assumption is that if you limit the number of people who have a say enough, a developer could just offer kickbacks to the lot. It's hard to change people's mind by giving a lot of people a little money. It's much easier to give fewer people a modest amount of money.
Whats wrong with locals deciding local issues?
The Collective Action Problem. Locals have a concentrated interest in preventing development. The broader public's interest in there being housing outweighs that, but it's diffuse. You see the same thing play out over and over again in cities around the world: it's so much easier to organize opposition to housing than support that no housing gets built.
Sounds good to me. I don't really care for the masses/others.
Just take this a step further, bring "local" all the way down to "the person who owns the land". Let the locals decide what to do on the land they own. If they want an apartment, or a store, or a giant mansion in the middle of 20 acres, as long as they own the land let them do it! They're the most local individual, right?
I'd rather just manipulate zoning laws to prohibit soviet style apartment blocks from appearing in my little slice of heaven
To a US suburban resident in a single-family lot, any apartment building is a Soviet-style apartment block.
In any HN discussion on housing there is inevitably a couple of people acting like you’re trying to build a krushchevka on their lawn. It’s like if we pretended all detached housing was like the infamous “groverhaus”[0]. The user you’re replying to appears to be getting a kick out of trolling as a NIMBY, slightly odd but it takes all sorts I suppose.
[0] - best source is unfortunately knowyourmeme @ https://knowyourmeme.com/memes/groverhaus the phrase “load-bearing dry wall” appears
[0] - best source is unfortunately knowyourmeme @ https://knowyourmeme.com/memes/groverhaus the phrase “load-bearing dry wall” appears
I mean, I spend a lot of time discussing this stuff with actual local development opponents, so arguments like these in the abstract just aren't that aggravating. I'm often happy for people to mount the most superficial arguments against things I believe in; might as well lay the flimsiness of the opposition out clearly.
Do you have any tips for a NIMBY that may help me stop/slow-down/impede local development? Even delaying for a day is worth the time to me.
Honestly, step 1 would be to stop writing stuff like this.
This is my flavor of activism. FWIW, I've participated in activism to stop destruction of green space and nature preserves from commercial interests. Stopping the expansion of urban sprawl, mcdonalds and walmart, and destruction of greenery (whether it be housing or a self storage business) is something I'm passionate about.
If you don't want an apartment block on your lot, you don't have to build one! But if your neighbor wants to build one, what moral right do you have to stop them?
I dont' care about morals, I care about legality, and if there are legal means to stop such projects, I pursue them with full force.
Developer: "Hi neighbor, would you like me to build a house so that someone can live in it? Do keep in mind that it would increase housing supply in your area, thus increasing supply and putting downward pressure on your property's value. That okay?"
Neighbor: "No, thank you!"
Neighbor: "No, thank you!"
Sounds good to me. I'm surrounded by woods, I'd 100% oppose any development around me.
Do you own the woods around you? If not, it’s these attitudes as to why we can’t have nice things.
Understandable on a personal level, but bad policy. Other people's right to have somewhere to live trumps your right to be surrounded by woods.
That's an opinion, of course, but I can't see how any other opinion leads to a stable outcome for society at large.
That's an opinion, of course, but I can't see how any other opinion leads to a stable outcome for society at large.
Because "local issues" aren't just local issues, as much as NIMBYs hope to frame it that way for persuasion purposes. There are larger global effects. In this case, a crippling housing crisis, leading to disenfranchisement and alienation of large swathes of the populace, leading to human suffering, inequality, and political extremism.
You end up with people trying to optimize for their own personal well-being at a micro level leading to an untenable macro-level situation.
Sounds good to me. I tend to try and optimize for my own well being over the the macro-level of society, as most do.
Which is why you shouldn't be in charge of making those kinds of decisions :) neither should I, for similar reasons.
Nothing, so long as their decisions don't abridge other fundamental rights. I can't speak to Ireland, but we've pretty clearly in the U.S. created a regime that fundamentally violates foundational principles of private property.
There isn’t enough housing. To solve this we must do some of the following:
- Increase density of living in existing stock (no more solo pensioners living in mansions)
- Increase housing stock
This will have to impact someone, somewhere. All locals will say no so the problem will not get solved by local groups.
More fair is that there is a process by which the impact is spread somewhat evenly and extreme impact is avoided entirely.
This cannot be coordinated by locals because they have no incentive to take on any of the burden.
- Increase density of living in existing stock (no more solo pensioners living in mansions)
- Increase housing stock
This will have to impact someone, somewhere. All locals will say no so the problem will not get solved by local groups.
More fair is that there is a process by which the impact is spread somewhat evenly and extreme impact is avoided entirely.
This cannot be coordinated by locals because they have no incentive to take on any of the burden.
They profit by blocking other people from becoming locals.
This seems like an unwarranted assumption. Some people are going to want to keep others out, other people will have a different attitude. Why would you assume the incentives run the same way for everyone?
When the phenomenon locks out development in an entire municipality, we can stop discussing it as a benign consumer/resident preference, and start discussing it as the public policy problem it is. That's where we're at now.
In the US, I look at it this way: once you get your own school system, you surrender the moral authority to erect barriers to entry for new residents.
In the US, I look at it this way: once you get your own school system, you surrender the moral authority to erect barriers to entry for new residents.
Because the outcomes all seem to be the same.
They don't, but empirically the overwhelming majority of people who are property owners in some area will either do nothing or actively oppose new housing being built in their area.
The problem is which locals end up being those that dominate the deciding.
What we've seen happen over the decades is that those with the most amount of time and money available end up drowning out the voices of others, as they have more time to devote.
So inevitably older, wealthy, established interests end up dominating the discussion as younger, marginalized, working class people are too busy just trying to get by to engage in local planning.
Accordingly the local consultative process ends up favouring the older wealthy and established land owning locals and not the marginalized working renter class locals.
What we've seen happen over the decades is that those with the most amount of time and money available end up drowning out the voices of others, as they have more time to devote.
So inevitably older, wealthy, established interests end up dominating the discussion as younger, marginalized, working class people are too busy just trying to get by to engage in local planning.
Accordingly the local consultative process ends up favouring the older wealthy and established land owning locals and not the marginalized working renter class locals.
I actually support that. That's why I think someone local to a plot of land is the person who should decide what to build there.
That's a separate question. But I think all evidences points to that NOT solving any housing crises.
I moved from west Los Angeles (Mar Vista near Culver City) to Dublin and my rent is significantly higher in Dublin (renting a new-ish build 2br 800 sq ft near the Canal, city center). Dublin's a lovely city -- but it's a lovely city of half a million people in a country of 5 million, less than half greater Los Angeles county. London, Tokyo, New York, Los Angeles are major cities of the world. Dublin is a regional city. It's absurd. I never thought I'd live somewhere _more_ expensive than LA.
The "metro area" is 1,270,000 so a lot more than the "city" count and I imagine if you added in the neighboring areas that are part of the commuter belt that would increase even more (e.g. Dublin county itself has 1.388 million not counting Meath, Kildare, Wicklow etc ).
Ireland is a lot like Washington State, in size and population, and the size profile of the cities.
(though Washington has more real wilderness, and Ireland has a lot more small farm rural, but Seattle and Dublin occupy very similar weights in the regions)
(though Washington has more real wilderness, and Ireland has a lot more small farm rural, but Seattle and Dublin occupy very similar weights in the regions)
Washington state is the third most populous state west of the Mississippi (being beat by only Texas and California), and probably has more farmland than Ireland, though it depends on what you mean by small farm.
I think the biggest issue I have with the comparison is the density. Ireland is a relatively densely populated country. Rural land is very densely populated, there is no section of the country that isn't spoken for. This is because unlike large parts of the US, agricultural land is highly productive without irrigation.
This results in agricultural land being very expensive. In the US agricultural land can be expensive, but only because of it's water. Without water it's extremely cheap.
This land pressure results in land across the entire Country being expensive.
In the US, there is a lot of relatively empty/undeveloped land on which to build houses and cities. This should reduce the price of housing.
- in contrast to rural Ireland, urban Ireland is not very dense relative to other cities in Europe. Dublin has a height restriction on buildings (which may be being reconsidered) so there isn't much of the denser building that you get in cities like Paris (which has a lot of 5-6 story buildings which really ramp up the population density. Irish cities are instead rows of very tightly packed suburban homes - often terraced or semi-detached (sharing a side wall with a neighbor) with about 6-10 homes per acre.
- in contrast to rural Ireland, urban Ireland is not very dense relative to other cities in Europe. Dublin has a height restriction on buildings (which may be being reconsidered) so there isn't much of the denser building that you get in cities like Paris (which has a lot of 5-6 story buildings which really ramp up the population density. Irish cities are instead rows of very tightly packed suburban homes - often terraced or semi-detached (sharing a side wall with a neighbor) with about 6-10 homes per acre.
Austin sized :)
At 63, I have seen it and heard it all before. Tenants paying rent way in excess of a mortgage, indeed paying someone else's mortgage, has, continues and until this is changed will continue to be the major factor which impoverishes renters here and in other free market economies. The refrain 30 - 40 years ago was investing in a property to provide your pension income, the idea being that you took your pension pot and purchased a property outright to let and live off that income. This has morphed into scraping together 20- 30 % of the purchase price and tenants paying rents are your oysters, but unlike the oyster, tenants have no protection against the new parasite class of investor/ landlord. Probably it will be the same 30 - 40 years hence.
Housing is another clear example of governments being solely concerned with continued enrichment of the few at detriment of the many.
Solutions nearly always seem to come when these oligarchical groups can be bypassed.
I've had to move my family numerous times over the last decade due to a housing market whose sole purpose seems to be enrichment rather than human survival.
Western overly financialised and deindustrialised economies are now so completely dependent on continued asset price inflation so as to maintain the ongoing ponzi scheme that to change it will require huge pain to asset holders who hold all the power. And so it won't happen peacefully.
Solutions nearly always seem to come when these oligarchical groups can be bypassed.
I've had to move my family numerous times over the last decade due to a housing market whose sole purpose seems to be enrichment rather than human survival.
Western overly financialised and deindustrialised economies are now so completely dependent on continued asset price inflation so as to maintain the ongoing ponzi scheme that to change it will require huge pain to asset holders who hold all the power. And so it won't happen peacefully.
Except in the US, the government is... us. Show up to a local city council meeting sometime and tell me how many oligarchs show up to shout down new development, and then tell me how many of your own neighbors show up to do the same. You might be incredibly surprised by whom you see.
and if it starts to fall...they import migrants to show up demand artificially
> On Daft, Ireland’s most popular property website, fewer than 1,100 properties are available to rent in Ireland, a country of over 5 million people.
Wow. For comparison the US state of Minnesota has a population of 5.7 million and if you select the state on apartments.com it says "32,693 Apartments Available."
Wow. For comparison the US state of Minnesota has a population of 5.7 million and if you select the state on apartments.com it says "32,693 Apartments Available."
> Another example is Israel’s approach to urban densification. Israel increased apartment supply in Tel Aviv by around half through a rule known as ‘TAMA 38’. Under this rule, if 80% of a given apartment block’s residents agree, they can vote for redevelopment, demolish the block, and build a larger one
This was absolutely horrible. So, TAMA 38 was originally a plan for protecting buildings against earthquakes: If the residents undertake a fortification of their building, they get some extra rights in terms of built area on their property. In practice, the regions where an earthquake is more likely have seen almost no use of this arrangement - because fortification is expensive, and real-estate there is not very lucrative. But the Tel-Aviv/Gush Dan region, where there's a housing bubble, has seen massive use of this program - but of course not by residents. Rather, real-estate entrepreneurs make contracts with residents to perform the fortification, or an entire reconstruction of the building, in exchange for using the extra building rights for more apartments. But of course - nobody had any concern for the space around the building; the importance of unpaved ground, trees and vegetation for an urban environment; the extra pressure on all sorts of infrastructure to accommodate a denser populace etc. There are also aesthetic concerns, but let's put those aside. The result has been a massive windfall for such entrepreneurs, and a significant degradation of the quality of life where this occurs - not because of the density itself, but because of lack of urban planning to support it.
This was absolutely horrible. So, TAMA 38 was originally a plan for protecting buildings against earthquakes: If the residents undertake a fortification of their building, they get some extra rights in terms of built area on their property. In practice, the regions where an earthquake is more likely have seen almost no use of this arrangement - because fortification is expensive, and real-estate there is not very lucrative. But the Tel-Aviv/Gush Dan region, where there's a housing bubble, has seen massive use of this program - but of course not by residents. Rather, real-estate entrepreneurs make contracts with residents to perform the fortification, or an entire reconstruction of the building, in exchange for using the extra building rights for more apartments. But of course - nobody had any concern for the space around the building; the importance of unpaved ground, trees and vegetation for an urban environment; the extra pressure on all sorts of infrastructure to accommodate a denser populace etc. There are also aesthetic concerns, but let's put those aside. The result has been a massive windfall for such entrepreneurs, and a significant degradation of the quality of life where this occurs - not because of the density itself, but because of lack of urban planning to support it.
I'm very interested to see how this goes, especially since I was not aware of Ireland's particular housing shortage.
I'm a big fan of infill/increased urban density in general, as long as it is ~equally beautiful to the surroundings. (Ex. live-work units can be much more beautiful than single-family homes, but 5-over-1s are usually not)
Some other topical sites I've been reading recently that I'd recommend:
https://missingmiddlehousing.com/
https://www.strongtowns.org/ (North America specific)
One quote I'm unsure about:
> [Popular housing reform] means having strict rules on parking and driving, ensuring congestion doesn’t increase.
I'm unsure whether to read this as strict rules to increase car infrastructure as housing is increased to make way for more people's vehicles, or to make sure new housing development holds steady car flow / implements alternative transportation so as not to increase the number of cars.
The first interpretation would make me concerned about induced demand.
I'm a big fan of infill/increased urban density in general, as long as it is ~equally beautiful to the surroundings. (Ex. live-work units can be much more beautiful than single-family homes, but 5-over-1s are usually not)
Some other topical sites I've been reading recently that I'd recommend:
https://missingmiddlehousing.com/
https://www.strongtowns.org/ (North America specific)
One quote I'm unsure about:
> [Popular housing reform] means having strict rules on parking and driving, ensuring congestion doesn’t increase.
I'm unsure whether to read this as strict rules to increase car infrastructure as housing is increased to make way for more people's vehicles, or to make sure new housing development holds steady car flow / implements alternative transportation so as not to increase the number of cars.
The first interpretation would make me concerned about induced demand.
> (Ex. live-work units can be much more beautiful than single-family homes, but 5-over-1s are usually not)
I'm not sure why this is presented as fact. Most single-family homes in the US are humble midcentury boxes, or bland suburban copy/pastes, or hideously garish McMansions. None of these are any prettier to look at than a 5-over-1.
I'm not sure why this is presented as fact. Most single-family homes in the US are humble midcentury boxes, or bland suburban copy/pastes, or hideously garish McMansions. None of these are any prettier to look at than a 5-over-1.
I would rather walk past a 5-over-1 than SFH populated by roommates-who-don’t-want-roommates and homeless people on the sidewalk.
If maintaining an “aesthetic” costs keeping people in bad conditions, it’s not worth it.
And I agree, it’s a false dichotomy anyway as the most attractive development targets in a given area are the less desirable (ie less expensive) plots.
If maintaining an “aesthetic” costs keeping people in bad conditions, it’s not worth it.
And I agree, it’s a false dichotomy anyway as the most attractive development targets in a given area are the less desirable (ie less expensive) plots.
It's moot anyway. You shouldn't be able to veto a building you neither own nor live in simply because it doesn't suit your aesthetic tastes (ostensibly. I'm not convinced the accusations of "it's ugly!" aren't just another convenient excuse to shout down new structures).
I'm pretty YIMBY, but I don't really have an issue with popularly mandated style guides for development. As long as they are A) set in advance, not in response to individual development plans and B) aren't deliberately prohibitive of varying types of development. If an area wants to, say, mandate that all buildings are Art Deco, that'd be pretty cool to live in and visit. An area that wants to ban anything but single family homes should go rot.
I agree, you shouldn't be able to single-handedly veto buildings that have nothing to do with you. And I'd vastly prefer ugly dense buildings over the current failure to build anything.
However, we can build dense housing that isn't awful to look at for only marginal price increases in many cases, and where possible, I think it makes sense to do so. No individual should have veto power, but I think it makes sense for a community to have a stake in building beautiful urban areas.
However, we can build dense housing that isn't awful to look at for only marginal price increases in many cases, and where possible, I think it makes sense to do so. No individual should have veto power, but I think it makes sense for a community to have a stake in building beautiful urban areas.
I wasn't familiar with this term, so I'm dropping this here for the benefit of others who also are not: https://en.wikipedia.org/wiki/5-over-1
Ireland is an extremely car-dependent country and has copied the worst of US urban design patterns.
Yeah, the estates are crazy. Typical newer estates have one exit, and Walls/Fences surrounding them to make it difficult to cut through.
Essentially, They're designed so that there's no reason to enter the estate unless you're going there. There's minimal network of paths for walking or cycling, and all the car traffic is funneled into increasingly difficult turns onto the main roads.
Older estates might have a few footpaths out -- We're in the closest one to town, 3 different walking ways out, and the ability to walk places is so much nicer than farther out. (Note, there's a dog in the house that drives a lot of the walking we do.)
Essentially, They're designed so that there's no reason to enter the estate unless you're going there. There's minimal network of paths for walking or cycling, and all the car traffic is funneled into increasingly difficult turns onto the main roads.
Older estates might have a few footpaths out -- We're in the closest one to town, 3 different walking ways out, and the ability to walk places is so much nicer than farther out. (Note, there's a dog in the house that drives a lot of the walking we do.)
I live near Tullamore and it's horrifying how car-dependent even brand new estates are. My kid goes to school there (we drive, sadly, because I am hell-bent on her being in a secular school and not the local ones) and I was chatting with another dad about grabbing a coffee. We realized the only option even remotely near was an Applegreen a 22 minute walk away. It's a wasteland.
Yep, Harsh reality living in Ireland is the Housing crisis. Unless you are not earning a big fat salary, you won't be able to affort the current rent rates.
So your renting experience goes like this:
- Desperately try to find somewhere to live paying X amount on rent for 2-3 years.
- Landlord gives you 6 months notice because they want to sell the house.
- You try to find a new house to live. The availability is smaller each time, plus they take 800 euro more to rent with the same amount of rooms. Plus you have to move to a commuting area since the available properties in your area are non-existant or they take 150% of your salary.
- Rinse and repeat every 2-3 years until you pay 100%+ of your salary in rent or just leave cursing.
So your renting experience goes like this:
- Desperately try to find somewhere to live paying X amount on rent for 2-3 years.
- Landlord gives you 6 months notice because they want to sell the house.
- You try to find a new house to live. The availability is smaller each time, plus they take 800 euro more to rent with the same amount of rooms. Plus you have to move to a commuting area since the available properties in your area are non-existant or they take 150% of your salary.
- Rinse and repeat every 2-3 years until you pay 100%+ of your salary in rent or just leave cursing.
Personally, I've come to the conclusion that densification is a tweak against very powerful odds rather than a sustainable long term solution. Proper 21st century thinking would be to rethink work, mobility, culture, care and how people access things in a way that is modern and sane.
regardless of the rethink, density will have some scaling advantages in infrastructure, etc.
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> how people access things in a way that is modern and sane
Unless teleportation is invented, if you want to have access to a large variety of things that are not just generic grocery store/post office/non-specialised gym or similar - you're going to need density.
Unless teleportation is invented, if you want to have access to a large variety of things that are not just generic grocery store/post office/non-specialised gym or similar - you're going to need density.
I'm really curious to know what proportion of Ireland's housing is now in the short term rental market. Effectively removing dwellings from the housing stock should be heavily discouraged during an accommodation crisis.
On daft.ie I see 626 places to rent (long-term) in Dublin County: https://www.daft.ie/property-for-rent/dublin
Meanwhile there's 7,877 Airbnbs: http://insideairbnb.com/dublin
Meanwhile there's 7,877 Airbnbs: http://insideairbnb.com/dublin
Housing is a racket. Banks + Governments at the top of the pyramid....everyone else getting either screwed or doing the screwing for the guy upstairs to get their chance to get less screwed.....
it makes the human centipede look charming.
it makes the human centipede look charming.
I notice a lot of Irish immigration to the States. 2 Irish-Americans in our department alone. And several younger Irish-Americans in our building.
My mom's family came over in both the waves of pre-Revolutionary (American) War (early 18th c.) and the Famine (mid 19th c.).
My mom's family came over in both the waves of pre-Revolutionary (American) War (early 18th c.) and the Famine (mid 19th c.).
Irish? Proposal to cure social ills? I seriously thought this was going to be a play on https://en.wikipedia.org/wiki/A_Modest_Proposal
given the fact that the demographics of home/real estate ownership by age group are very much biased in favor of the elderly, one could say that indeed such a proposal featured here on hn just recently: https://news.ycombinator.com/item?id=35588997
A Movable Feast, indeed -Made from Organic Soylent
I guess the counter-reaction is to eat the rich then eh?
I guess the counter-reaction is to eat the rich then eh?
I don't follow the situation closely enough but I distinctly remember seeing footage of lots of half finished housing developments abandoned in Ireland. Can't they be restarted? (Or have they been and gone already?)
It's been 15 years - mostly the ones that were in a state to be completed have been, and any that were abandoned fifteen years ago and left untouched in that time are likely (a) in the middle of nowhere and not particularly sustainable or (b) in such poor state that it'd be a knock and rebuild job.
A lot of it is a consequence of the collapse of the building trade in 2008, population growth and poor regional planning forcing everyone into the cities
A lot of it is a consequence of the collapse of the building trade in 2008, population growth and poor regional planning forcing everyone into the cities
> poor regional planning forcing everyone into the cities
could you please elaborate on that? What kind of poor planning and in what ways did it force people into the cities?
could you please elaborate on that? What kind of poor planning and in what ways did it force people into the cities?
I'm in the middle of my application for a visa/permit to immigrate there with my wife. Reading the article and the conversation here makes me stress now :(
Houses are a large part of the engine for the capitalist economy, so if houses are desirable and available the economy will grow. Housing is the #1 form of savings for most people in wealthy countries. Also people get a job, then they bid as much as they possibly can to buy a house, then people spend decades working hard to pay it off. Making shitty dense housing doesn’t work as well for the economy if apartments don’t have a strong status signal (prestige/status-seeking drives housing which drives people working which drives economies). It feels wasteful, but it also seems how things currently work; although I would love to see us all find a better model.
Homeowners need skin-in-the-game so this article is interesting. In New Zealand we get property developers creating problems, because they don’t live in the houses they build and don’t have to face the consequences of their decisions. Christchurch example 1: powerful lobbying by developers so they can subdivide high-risk land (liquefaction risks or flooding risks). Local example 2: developers letting houses rot for decades because they are waiting for prices to increase (I’ve experienced examples in city-centre and New Brighton). Auckland example #3: leaky homes.
Homeowners need skin-in-the-game so this article is interesting. In New Zealand we get property developers creating problems, because they don’t live in the houses they build and don’t have to face the consequences of their decisions. Christchurch example 1: powerful lobbying by developers so they can subdivide high-risk land (liquefaction risks or flooding risks). Local example 2: developers letting houses rot for decades because they are waiting for prices to increase (I’ve experienced examples in city-centre and New Brighton). Auckland example #3: leaky homes.
> Housing is the #1 form of savings for most people in wealthy countries.
I believe this applies mostly to the anglophone wealthy countries. It is much less true (if it is true at all) for most people in non-anglophone wealthy countries. In many of the latter, the percentage of home ownership doesn't even make it to 50%.
[ EDIT: while made in good faith, this claim is wrong. https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...
Sorry for the misinformation (and meme spreading that had already infected me. ]
I believe this applies mostly to the anglophone wealthy countries. It is much less true (if it is true at all) for most people in non-anglophone wealthy countries. In many of the latter, the percentage of home ownership doesn't even make it to 50%.
[ EDIT: while made in good faith, this claim is wrong. https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...
Sorry for the misinformation (and meme spreading that had already infected me. ]
Home ownership is actually higher in many non-Anglosphere developed countries than the Anglosphere. Even with a relatively low home ownership country like Germany, it's a fair bet that the home is the most valuable item in the savings of most of the half of the population that own their home, and most of the half that don't own homes have relatively little in the way of savings...
You are correct, and I am wrong. I edited my post to reflect that.
You're talking about the wealth effect, but there's no reason you can't emulate that effect using stocks as the vehicle instead of housing. It is government policy, specifically additional tax breaks and SFZ, that drives capital into housing. The existence of the wealth effect isn't a coherent economic argument that justifies NIMBY policies.
The economic driver is status signals that you can show off to your peers. A home also has a multitude of opportunities to show off your status: art, appliances, garden, furniture, location, alterations, soirées, blah blah blah. Well known historically.
For most people, owning stocks cannot be as prestigious as owning a home. I agree it is for some investors, but they are the exception. Owning a stock has very limited opportunities for visibility or extra status variables.
For most people, owning stocks cannot be as prestigious as owning a home. I agree it is for some investors, but they are the exception. Owning a stock has very limited opportunities for visibility or extra status variables.
Nothing changes on that front with the repeal of SFZ. Housing will still be a status signal because luxurious single detached homes will still exist in most locales. Even in a hypothetical world where there's no single detached homes, which may occur in extreme density situations such as in Singapore or Hong Kong, there are still luxurious condos located in exclusive areas which act as a status signal all the same.
> Hong Kong
Decades ago I was there for a few months, and it was rare to see somebody’s apartment. Nothing like NZ where you often end up visiting work colleagues homes. Also at that time there were plenty of people that were working there only temporarily.
Can you tell me how the dynamics in HK work out these days? What different things make a middle-class apartment in HK a prestigious item worth competing about, that is visible to peers? Are apartments in HK something that people spend their working lives saving for for status, or mostly for function?
Singapore is weird, because are not the vast majority of homes owned by the state - I know there’s something odd about Singapore apartments but I don’t know the details.
Not disagreeing: I have seen flash-as apartments in London during multiple work-stints and vacations there, and postcode does matter https://en.m.wikipedia.org/wiki/The_Boltons
I just don’t know anything about HK.
Decades ago I was there for a few months, and it was rare to see somebody’s apartment. Nothing like NZ where you often end up visiting work colleagues homes. Also at that time there were plenty of people that were working there only temporarily.
Can you tell me how the dynamics in HK work out these days? What different things make a middle-class apartment in HK a prestigious item worth competing about, that is visible to peers? Are apartments in HK something that people spend their working lives saving for for status, or mostly for function?
Singapore is weird, because are not the vast majority of homes owned by the state - I know there’s something odd about Singapore apartments but I don’t know the details.
Not disagreeing: I have seen flash-as apartments in London during multiple work-stints and vacations there, and postcode does matter https://en.m.wikipedia.org/wiki/The_Boltons
I just don’t know anything about HK.
"other countries have delivered large increases in housing supply with popular support."
Such as? Just pure bs
Such as? Just pure bs
>>By giving locals the power to enable extra construction, and get a share of the resulting economic benefits
>>and get a share of the resulting economic benefits
THIS, right there, is the key.
Zoning rules of density caps exist to create & maintain a more pleasant environment. People building or purchasing into these areas pay higher costs initially and throughout their residency to maintain the better environment. These include everything from higher purchase cost, higher taxes, higher maintenance costs, higher regulatory costs, and more, and the benefits are worth it to them.
ANY proposal to rezone at higher density essentially steals this extra value the existing residents have created over the course of decades (and generally transfers it into the pockets of the developers). Whether it is a medium-density city street with postage-stamp lots, a tight suburb, or an exurb with genuine wildlife habitat, the value of both the existing property and the neighborhood goes down. They get zero benefit, the benefits they've worked and paid to create are destroyed, and the developers extract the value of the land that is now worth more per square foot, building higher-density housing. So, OF COURSE they vote against it at every opportunity.
However, this can all turn around if the existing landowners, who have paid for decades to create the value, share in the increase in values. If the property will devalue from 500x to 400x, but the compensation is 120x, then some will still vote against it because of the intangible environmental degradation (trees, wildlife, traffic, noise, etc.), but many will happily vote for it. The developers will still extract absurd amounts of money.
That is how you make it work. An actual market mechanism, not expropriating value that homeowners have paid over decades to build with fiat dictates.
>>and get a share of the resulting economic benefits
THIS, right there, is the key.
Zoning rules of density caps exist to create & maintain a more pleasant environment. People building or purchasing into these areas pay higher costs initially and throughout their residency to maintain the better environment. These include everything from higher purchase cost, higher taxes, higher maintenance costs, higher regulatory costs, and more, and the benefits are worth it to them.
ANY proposal to rezone at higher density essentially steals this extra value the existing residents have created over the course of decades (and generally transfers it into the pockets of the developers). Whether it is a medium-density city street with postage-stamp lots, a tight suburb, or an exurb with genuine wildlife habitat, the value of both the existing property and the neighborhood goes down. They get zero benefit, the benefits they've worked and paid to create are destroyed, and the developers extract the value of the land that is now worth more per square foot, building higher-density housing. So, OF COURSE they vote against it at every opportunity.
However, this can all turn around if the existing landowners, who have paid for decades to create the value, share in the increase in values. If the property will devalue from 500x to 400x, but the compensation is 120x, then some will still vote against it because of the intangible environmental degradation (trees, wildlife, traffic, noise, etc.), but many will happily vote for it. The developers will still extract absurd amounts of money.
That is how you make it work. An actual market mechanism, not expropriating value that homeowners have paid over decades to build with fiat dictates.
> ANY proposal to rezone at higher density essentially steals this extra value the existing residents have created over the course of decades (and generally transfers it into the pockets of the developers).
The complete opposite is closer to the truth. The homeowners resisting rezoning are the ones who are essentially stealing unearned extra value, as per Henry George's analysis. The majority of their home values do not come from the local investments made by fellow homeowners in the same block. The vast majority comes from physical network effects and public expenditure in the city and country at large. Everything from the army, judiciary and police, which protects the very existence of private land titles and therefore their value, to the local public roads and shopping centres and distance to the city heart which make that location desirable, to the public healthcare and overall GDP/prosperity of the country, which makes the country itself desirable. These are all variables and private and public expenditures which they haven't contributed to any more than someone living across the country who would like to move into their neighborhood. They steal this value by making it illegal to create new housing stock, which then causes all that public value to interalize into their private hands. It is classic capitalistic theft via using government as a tool, no different in spirit to crony capitalism, yet done by private individuals with a financial motive instead of by corporations.
The complete opposite is closer to the truth. The homeowners resisting rezoning are the ones who are essentially stealing unearned extra value, as per Henry George's analysis. The majority of their home values do not come from the local investments made by fellow homeowners in the same block. The vast majority comes from physical network effects and public expenditure in the city and country at large. Everything from the army, judiciary and police, which protects the very existence of private land titles and therefore their value, to the local public roads and shopping centres and distance to the city heart which make that location desirable, to the public healthcare and overall GDP/prosperity of the country, which makes the country itself desirable. These are all variables and private and public expenditures which they haven't contributed to any more than someone living across the country who would like to move into their neighborhood. They steal this value by making it illegal to create new housing stock, which then causes all that public value to interalize into their private hands. It is classic capitalistic theft via using government as a tool, no different in spirit to crony capitalism, yet done by private individuals with a financial motive instead of by corporations.
Nonsense.
Setting the criteria at the block level is an absurd strawman argument, guaranteed to yield the intended result.
A block of people better mowing their lawns and painting their houses obviousl costs something and does add a bit of value, but almost nothing is purchased at that level.
For example, the strong conservation, good services, open space preservation, etc. I cited above are all made at the town level. Town A doesn't invest in those, saves the costs, and Town B does invest and costs more, and creates more value. But because it isn't the block, he puts it on the "public" side of his ledger.
That's proof of nothing but George's willingness to paint the picture he and you want.
Plus, if you really want to create value on land, you do development. Zoning maximum density REDUCES the value of the properties. I could make enough to retire if I could take down my house and put up a condo unit. But it is 2-acre zoning, and I can't, and it was cheaper to buy.
I'm also a heluva lot less concerned once zoning density is high enough that there is effectively no ecosystem, it's just suburban hardscape, so maybe under quarter-acre zoning, it won't have much environmental effect as the flora & fauna are already pretty much gone, so development has much less impact beyond the heat island effect. But I don't know as much about the mix of buying/building/taxes/investment in those or city zones.
Setting the criteria at the block level is an absurd strawman argument, guaranteed to yield the intended result.
A block of people better mowing their lawns and painting their houses obviousl costs something and does add a bit of value, but almost nothing is purchased at that level.
For example, the strong conservation, good services, open space preservation, etc. I cited above are all made at the town level. Town A doesn't invest in those, saves the costs, and Town B does invest and costs more, and creates more value. But because it isn't the block, he puts it on the "public" side of his ledger.
That's proof of nothing but George's willingness to paint the picture he and you want.
Plus, if you really want to create value on land, you do development. Zoning maximum density REDUCES the value of the properties. I could make enough to retire if I could take down my house and put up a condo unit. But it is 2-acre zoning, and I can't, and it was cheaper to buy.
I'm also a heluva lot less concerned once zoning density is high enough that there is effectively no ecosystem, it's just suburban hardscape, so maybe under quarter-acre zoning, it won't have much environmental effect as the flora & fauna are already pretty much gone, so development has much less impact beyond the heat island effect. But I don't know as much about the mix of buying/building/taxes/investment in those or city zones.
> Setting the criteria at the block level is an absurd strawman argument, guaranteed to yield the intended result.
It isn't a strawman because altering the argument to a 5-8 miles radius township doesn't change much of substance. The valuations are primarily determined by proximity to city center/coast as well as desirability of the broader city/country, all of which have nothing to do with the township itself. A terrible house in a terrible location in a rich country costs more than a luxurious house in a poor country because that terrible house is free riding off the armed services, medical access, among other stolen global properties. So these are public goods whose fruits are stolen by the untaxed homeowners. A small percentage of variation in the valuation is due to strictly local features such as availability of shopping centers, but again that is private investment that the homeowners themselves had no part in and have no moral right to steal. Here, they are again free riding off other people's activity. If there are indeed things that the local homeowners themselves are doing which improve local valuations, these small contributions are dwarfed in magnitude by the above-mentioned free riding.
> once zoning density is high enough that there is effectively no ecosystem, it's just suburban hardscape
If you care about the ecosystem, then you should want more zoning density, because suburban sprawl is what destroys ecosystems, not pockets of density which allow for maximum land to be open green space.
It isn't a strawman because altering the argument to a 5-8 miles radius township doesn't change much of substance. The valuations are primarily determined by proximity to city center/coast as well as desirability of the broader city/country, all of which have nothing to do with the township itself. A terrible house in a terrible location in a rich country costs more than a luxurious house in a poor country because that terrible house is free riding off the armed services, medical access, among other stolen global properties. So these are public goods whose fruits are stolen by the untaxed homeowners. A small percentage of variation in the valuation is due to strictly local features such as availability of shopping centers, but again that is private investment that the homeowners themselves had no part in and have no moral right to steal. Here, they are again free riding off other people's activity. If there are indeed things that the local homeowners themselves are doing which improve local valuations, these small contributions are dwarfed in magnitude by the above-mentioned free riding.
> once zoning density is high enough that there is effectively no ecosystem, it's just suburban hardscape
If you care about the ecosystem, then you should want more zoning density, because suburban sprawl is what destroys ecosystems, not pockets of density which allow for maximum land to be open green space.
Yes, I'm aware of and generally sympathetic to the free-riding arguments (Elizabeth Warren is one of my State Senators who I'm happy to vote for).
Yet this "analysis" is not even close to valid or realistic; it is circular, self-proving, a tautology, not disprovable.
"Location, location, location" is indeed the standard real estate mantra, but acting as if location is created by entirely extrinsic factors, and a town (the unit which creates zoning) has little or nothing to do with creating value, is preposterous.
There are plenty of towns that have highly comparable locations (same commute distances to metro areas, shopping, etc.), yet vastly different desirability and valuations. And of course, they live under the same state and country-level services. The difference is the approach to managing the town.
In that regard, zoning is not unidirectional. In the town I live, zoning is 2-acre minimum, and there area active programs to maintain and purchase open space to preserve. Yet tax rates are higher and values are lower than a neighboring town that has smaller zoning and more development. As I said, I could retire if I could re-develop my land and replace my house with a 6-unit condo. But instead, I need to spend $thousands just for permission to move the front walk stairs, and I can also watch ducks and geese use the wetlands that take up half my yard in their spring and fall migrations.
It is creating different values, and it does cost real money.
And the argument that zoning laws exist only to free-ride value is nonsense. I've lived in a town that had zoning in place, then repealed zoning when developers convinced the old-time farmers to vote with"your grandfather never needed to get a permit to build a barn, why should you?"-type arguments. Then a few years later, the town saw what developers and "entrepreneurs" were doing, and reinstated zoning after the bad behavior. And this was after "private investment" created more units that reduced individual tax burdens by spreading it over more housing units. Also, this was 150km from any coast or major city, so zero commuting going on, etc.
The country argument is pretty much the same as the town argument. Some countries invest more, and are more desirable. Yet, that does not give me the right to go live there just because I want to. And the simple fact is, that if everyone did do that, it would literally destroy what they came for, like a horde of locusts. The only way to preserve it is to preserve it.
>>If you care about the ecosystem, then you should want more zoning density, because suburban sprawl is what destroys ecosystems, not pockets of density which allow for maximum land to be open green space.
Yes, agree. I've also lived in apartments in small towns and walk-up railroad flat in Manhattan. As far as I'm concerned, once you no longer have a yard that's yours, it doesn't matter much if it's a 6-unit building or a square kilometer 500m tall city-in-a-box. So, generally, I agree that it would be best to have very-high-density cities, and very low density exurbs.
The problem is that everything is done incrementally. The push is inexorably to higher-density zoning, and further out from the city centers. The result is simply more destructive sprawl.
So, how do we get planning and funding enabling entire square kilometers of city space to be razed and rebuilt as even higher-density urban superstructures?
Yet this "analysis" is not even close to valid or realistic; it is circular, self-proving, a tautology, not disprovable.
"Location, location, location" is indeed the standard real estate mantra, but acting as if location is created by entirely extrinsic factors, and a town (the unit which creates zoning) has little or nothing to do with creating value, is preposterous.
There are plenty of towns that have highly comparable locations (same commute distances to metro areas, shopping, etc.), yet vastly different desirability and valuations. And of course, they live under the same state and country-level services. The difference is the approach to managing the town.
In that regard, zoning is not unidirectional. In the town I live, zoning is 2-acre minimum, and there area active programs to maintain and purchase open space to preserve. Yet tax rates are higher and values are lower than a neighboring town that has smaller zoning and more development. As I said, I could retire if I could re-develop my land and replace my house with a 6-unit condo. But instead, I need to spend $thousands just for permission to move the front walk stairs, and I can also watch ducks and geese use the wetlands that take up half my yard in their spring and fall migrations.
It is creating different values, and it does cost real money.
And the argument that zoning laws exist only to free-ride value is nonsense. I've lived in a town that had zoning in place, then repealed zoning when developers convinced the old-time farmers to vote with"your grandfather never needed to get a permit to build a barn, why should you?"-type arguments. Then a few years later, the town saw what developers and "entrepreneurs" were doing, and reinstated zoning after the bad behavior. And this was after "private investment" created more units that reduced individual tax burdens by spreading it over more housing units. Also, this was 150km from any coast or major city, so zero commuting going on, etc.
The country argument is pretty much the same as the town argument. Some countries invest more, and are more desirable. Yet, that does not give me the right to go live there just because I want to. And the simple fact is, that if everyone did do that, it would literally destroy what they came for, like a horde of locusts. The only way to preserve it is to preserve it.
>>If you care about the ecosystem, then you should want more zoning density, because suburban sprawl is what destroys ecosystems, not pockets of density which allow for maximum land to be open green space.
Yes, agree. I've also lived in apartments in small towns and walk-up railroad flat in Manhattan. As far as I'm concerned, once you no longer have a yard that's yours, it doesn't matter much if it's a 6-unit building or a square kilometer 500m tall city-in-a-box. So, generally, I agree that it would be best to have very-high-density cities, and very low density exurbs.
The problem is that everything is done incrementally. The push is inexorably to higher-density zoning, and further out from the city centers. The result is simply more destructive sprawl.
So, how do we get planning and funding enabling entire square kilometers of city space to be razed and rebuilt as even higher-density urban superstructures?
Existing owners have paid nothing. They contribute next to nothing to make a neighborhood better. Public services do. They have bought the land years ago for peanuts and spent some resources keeping other people from doing the same.
It's basically just pulling the ladder up once you're on top.
It's basically just pulling the ladder up once you're on top.
Wrong.
I can tell you specifically as an existing landowner in an area with a very healthy ecological preservation culture and strict conservation regulations, that we pay A LOT more on a continuing basis to maintain this, and it benefits our values a lot less than aggressive construction.
First, the "public services" you mention? Yes, we pay more for those, because they are maintained at a high level. Everything from good roads and maintenance, good levels of service, conservation commission with a full-time employees in a tiny town, etc. Those public services cost money, and we are the only ones who foot the bill. (Not complaining, but don't act as if you are free or paid for by the state, county, etc.).
On top of that, everything is also more expensive. Merely getting an exception to a rule to change where the front walk comes from the driveway to the front door required a $2000 engineering plan and $350 application fee for board approval (and that was to get a de minimus exception so we didn't need to get a $9000 survey) because a few feet of the stairs was within a 100' wetland buffer zone. We'll also have to take extra steps & costs during the construction to prevent any impact on the wetlands.
There are also town taxpayer funds created to purchase open lands for wild area and recreational preservation. Again, all maintained OVER TIME by the town;s residents, and no one else.
The original purchase price is meaningless; they are paying to build a better environment the entire time.
It has zero to do with "pulling up the ladder", and everything to do with not wanting to do things like putting a 200-unit condo development on top of a steep wetland species harboring endangered species, multiplying traffic on rural roads by a factor of 20+, adding unpaid burdens to local public services, etc.
I can tell you specifically as an existing landowner in an area with a very healthy ecological preservation culture and strict conservation regulations, that we pay A LOT more on a continuing basis to maintain this, and it benefits our values a lot less than aggressive construction.
First, the "public services" you mention? Yes, we pay more for those, because they are maintained at a high level. Everything from good roads and maintenance, good levels of service, conservation commission with a full-time employees in a tiny town, etc. Those public services cost money, and we are the only ones who foot the bill. (Not complaining, but don't act as if you are free or paid for by the state, county, etc.).
On top of that, everything is also more expensive. Merely getting an exception to a rule to change where the front walk comes from the driveway to the front door required a $2000 engineering plan and $350 application fee for board approval (and that was to get a de minimus exception so we didn't need to get a $9000 survey) because a few feet of the stairs was within a 100' wetland buffer zone. We'll also have to take extra steps & costs during the construction to prevent any impact on the wetlands.
There are also town taxpayer funds created to purchase open lands for wild area and recreational preservation. Again, all maintained OVER TIME by the town;s residents, and no one else.
The original purchase price is meaningless; they are paying to build a better environment the entire time.
It has zero to do with "pulling up the ladder", and everything to do with not wanting to do things like putting a 200-unit condo development on top of a steep wetland species harboring endangered species, multiplying traffic on rural roads by a factor of 20+, adding unpaid burdens to local public services, etc.
In fact, zoning rules and density caps exist, in the US (where they were pioneered) at least, mostly to prevent Black families from moving into municipalities. They proliferated after the 1917 Supreme Court Buchanan case that outlawed outright racial zoning. This is also most of the reason for minimum lot sizes (they worked in tandem with mortgage underwriting restrictions for Black families to make home purchases viable for whites and non-viable for Blacks).
Interestingly Ireland has effectively no YIMBY party. The debate here reminds me of what I experienced in California 20 years ago. The left shrieks about "evil developers" and "affordable housing" and opposes new market-rate building. Meanwhile the right has mostly homeowners voting for them so they hardly have an incentive to allow more building.
It's also a place where making a return through investment is horribly discouraged; ETF's are kneecapped with a 41% tax on _unrealized_ gains, and capital gains tax is high (33%). Income taxes are also punishingly high - the top rate of tax (52%) kicks in under 100k, much lower than e.g. Germany.
But houses? Your primary residence is liable for only a laughably low property tax (a few hundred euro a year for most people) and you can sell it with no capital gains tax whatsoever, regardless of the gain. Even the US isn't so generous!
Make a million quid in the market? The notions on you, we'll be taking that thank you very much!
Have the gall to _work_ for it? Why we'll just take €520k, thanks!
But you bought a house in 1992 and then shouted down all new development for the last 30 years and now can sell it for €1.5 million more than you paid? Why, that's your HOME you can't tax HOMES can you??
No wonder money all flows to homes.
Not to mention that the government takes money from taxpayers and funnels it in to new house prices via help to buy, AND takes money from taxpayers and uses it to _outbid those very same taxpayers_ by buying property off the private market to meet social housing quotas. (Social housing is fine but for fuck's sake build your own, don't shrink the already tiny private market)
Even better, mortgages are capped at only 4x your income and you need a 10% deposit, so you can pay 2500 a month in rent to someone like me, who bought a house in cash. Because we need to protect people from themselves, of course!
(I live in my house, I don't rent it out, but you get the idea)
Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested.