Paying for Dirt: Where Have Home Values Detached from Construction Costs?(buildzoom.com)
buildzoom.com
Paying for Dirt: Where Have Home Values Detached from Construction Costs?
https://www.buildzoom.com/blog/paying-for-dirt-where-have-home-values-detached-from-construction-costs
117 comments
The Brisbane proposal is a great example of the need for public input. Instead of expanding the town the idea is to build high density development on swampland far from town and services in a location so clearly undesirable that it has escaped even proposals for development since the Gold Rush. Reasonable expansion of existing towns is a good answer to this crisis while building large apartment buildings in fetid swamps far from transit, towns, and services is responding to one set of errors with even worse errors.
> "far from transit"
The proposed development is literally next door to a freeway (101), a Caltrain stop - Bayshore Caltrain - and a Muni stop. SF has proposed extending Muni into the new development for free.
"The public" largely wants new housing in the Baylands, if the city meetings were any guide, where a large majority of the speakers wanted to approve the housing proposal. You may have seen the signed letter from 40 different tech CEO's asking for housing on the Baylands, as well. The people who oppose it are Brisbane homeowners, because they have no incentive to add new housing.
> so clearly undesirable that it has escaped even proposals for development since the Gold Rush.
The choices are to build an office park and new apartments, or an office park; something is going to get built there. As part of the plan, the developer is proposing to spend $200 million cleaning industrial waste in the area. The only reason that pencils out is because of the new development.
The proposed development is literally next door to a freeway (101), a Caltrain stop - Bayshore Caltrain - and a Muni stop. SF has proposed extending Muni into the new development for free.
"The public" largely wants new housing in the Baylands, if the city meetings were any guide, where a large majority of the speakers wanted to approve the housing proposal. You may have seen the signed letter from 40 different tech CEO's asking for housing on the Baylands, as well. The people who oppose it are Brisbane homeowners, because they have no incentive to add new housing.
> so clearly undesirable that it has escaped even proposals for development since the Gold Rush.
The choices are to build an office park and new apartments, or an office park; something is going to get built there. As part of the plan, the developer is proposing to spend $200 million cleaning industrial waste in the area. The only reason that pencils out is because of the new development.
You got lost somewhere. The land near the Bayshore CalTrain station is the old factory, has already undergone extensive remediation and decontamination, and is having an entire new high density community build right there. The Brisbane proposal is for the ponds and swamp well down the line from there and several big blocks from town.
The core issue remains: Will we expand these towns as we should or will we in desperation put a lot of high density uses out on fringes that have far more value ecologically than economically? The real fight isn't for the fringes.
The core issue remains: Will we expand these towns as we should or will we in desperation put a lot of high density uses out on fringes that have far more value ecologically than economically? The real fight isn't for the fringes.
Will building more units / appartments/ houses bring the price down?
Have other cities seen home prices move toward affordability when more housing has been built?
I'm not saying it isn't a good idea, just that the logic seems flawed.
Have other cities seen home prices move toward affordability when more housing has been built?
I'm not saying it isn't a good idea, just that the logic seems flawed.
I'm not up on the sources, but a moderately pro-development candidate for Cambridge City Council has often quoted a statistic saying that there are only two ways to bring down house prices:
1. Make the city suck
2. Get the housing vacancy rate to 5.5%
And of course he says this to encourage everyone to work toward #2, and the way to do that without displacing anyone is to build new housing.
I don't really understand the opposite logic, which the NIMBYs like to use, saying that building new housing will drive the price up.
I mean, I am not some kind of libertarian free-market cheerleader, but it shouldn't be that controversial to say that a market exists, that the way to bring down the price in the face of overwhelming demand is with supply.
People point to how expensive newly-built market-rate housing is, but that's a symptom of the shortage. People want to live in good cities. If there's not a new home for them, they'll pay even more for a home someone lives in, so prices go up and a community gets displaced.
1. Make the city suck
2. Get the housing vacancy rate to 5.5%
And of course he says this to encourage everyone to work toward #2, and the way to do that without displacing anyone is to build new housing.
I don't really understand the opposite logic, which the NIMBYs like to use, saying that building new housing will drive the price up.
I mean, I am not some kind of libertarian free-market cheerleader, but it shouldn't be that controversial to say that a market exists, that the way to bring down the price in the face of overwhelming demand is with supply.
People point to how expensive newly-built market-rate housing is, but that's a symptom of the shortage. People want to live in good cities. If there's not a new home for them, they'll pay even more for a home someone lives in, so prices go up and a community gets displaced.
I don't see many people mentioning a proportional value-based land tax, which would probably be about the first thing a traditional economist would recommend?
Brings down prices, hurts land-banking, increases density, generates revenue for infrastructure, captures public benefit from value increase, etc...
Brings down prices, hurts land-banking, increases density, generates revenue for infrastructure, captures public benefit from value increase, etc...
Hurts grandmas/grandpas who lucked into houses with high property values, who could be rich but don't want to be because they have personal reasons not to move.
These are incidentally severely overrepresented among voters, and their votes are amplified by how easy it is to paint someone following the economic wisdom as an evil grandma-displacer.
It's much more politically convenient to displace young minorities. Nobody will really speak up for them, and they won't vote against you because you displaced them and they live somewhere else now!
These are incidentally severely overrepresented among voters, and their votes are amplified by how easy it is to paint someone following the economic wisdom as an evil grandma-displacer.
It's much more politically convenient to displace young minorities. Nobody will really speak up for them, and they won't vote against you because you displaced them and they live somewhere else now!
One solution would be to defer tax payments and put a lien on the property instead, payable upon change of ownership. That way no one will be forced out of their home, and the government can even use those liens as collateral if they need to borrow funds for current operations.
Allow those liens to compound over enough time, and eventually they become more than the value of the home. Also, many of these voters want to leave their property to their children, not the government.
Many of those voters also don't want to pay higher sales, value-added, or income taxes. The money to operate governments has to come from somewhere.
Sure, but just how much government we need is always a political question, subject to much debate. The point is, the solution isn't as simple as raising taxes.
The biggest stakeholders (landowners, especially corporate ones) don't want a value based tax, the only way it'll happen is if the rest of the state decides that the circus going on in the city is causing enough problems that taxes are happening with or without the city on board.
I don't see this happening in CA.
I don't see this happening in CA.
Prop 13 is pretty well baked into the state’s politics and any reform would have to start there. Most likely reforms are letting a home’s taxable value increase by more than 1% a year, especially if you are under 65.
I still don't get why younger generations should shoulder the burden of the mistake that was Prop 13. Start by jacking it up on those who have benefitted and profited the most.
“Should” and “will” are different things entirely. Also, homeowners vote more often than renters, which is sad.
You probably remember a few years back when the well-heeled Green candidate ran on a platform of bussing in homeless.
https://www.reddit.com/r/CambridgeMA/comments/3pd9k3/my_note...
https://www.reddit.com/r/CambridgeMA/comments/3pd9k3/my_note...
> I don't really understand the opposite logic, which the NIMBYs like to use, saying that building new housing will drive the price up.
It actually fits the "logic" of the model you mentioned.
If you build more housing, the city "sucks less", more people want to live there, so the price goes up. This is especially true with modern development, since it exclusively builds luxury units, which make that part of the city really suck less, and therefore drives prices really high, really fast.
--
Sure, in the very long run, building new housing lowers prices. But in all short-to-medium timeframes, new housing greatly increases all housing prices in the particular area development occurs, which is why you get so many local residents (even renters) opposed to it.
It actually fits the "logic" of the model you mentioned.
If you build more housing, the city "sucks less", more people want to live there, so the price goes up. This is especially true with modern development, since it exclusively builds luxury units, which make that part of the city really suck less, and therefore drives prices really high, really fast.
--
Sure, in the very long run, building new housing lowers prices. But in all short-to-medium timeframes, new housing greatly increases all housing prices in the particular area development occurs, which is why you get so many local residents (even renters) opposed to it.
It would seem to me that, even in that case, building new housing increases the housing price in that local area, while not building new housing increases the housing price everywhere.
Is there an alternative plan to make housing prices decrease? The long term is at least better than never.
I know there's the whole thing where you designate certain units as subsidized affordable housing and have people on a lottery/waiting-list to get it, and having some of that probably helps in the short term, but at least in Cambridge the subsidies are becoming unsustainable. Even people making six figures end up needing subsidized housing.
Is there an alternative plan to make housing prices decrease? The long term is at least better than never.
I know there's the whole thing where you designate certain units as subsidized affordable housing and have people on a lottery/waiting-list to get it, and having some of that probably helps in the short term, but at least in Cambridge the subsidies are becoming unsustainable. Even people making six figures end up needing subsidized housing.
One alternative plan would be to subsidize economic development in underpopulated cities. It's not healthy for our societies long term to squeeze everyone into just a few geographically constrained areas.
The phenomenon you’re describing perfectly describes “we are adding new supply but not enough to keep up with demand” and I think you’re getting the causation wrong. The California LAO has published reports showing areas with more new housing had less displacement, for example.
Actually, you get double bonus wherever you add housing, because you'll never add enough transportation or parking as necessary so that neighborhood will also start to suck! Also, housing people is a net drain on the tax base so the city services get worse or taxes increase.
Win, win!
Yeah, that's why NIMBY... on the other hand add transit, jobs, or retail somewhere and house prices go up locally with it because people want to live there (reduce their commute and buy $#&+) and it pays enough taxes. Retail moves where people flow. It takes planning and not just building.
Win, win!
Yeah, that's why NIMBY... on the other hand add transit, jobs, or retail somewhere and house prices go up locally with it because people want to live there (reduce their commute and buy $#&+) and it pays enough taxes. Retail moves where people flow. It takes planning and not just building.
So people move to reduce their commute, effectively their use of roads, but that shorter commute will not reduce their use but increase it? Tough proposition.
You also posit that people hold parking at a premium and that new house will not try to capture that premium. Mhhhh
You also posit that people hold parking at a premium and that new house will not try to capture that premium. Mhhhh
> Also, housing people is a net drain on the tax base so the city services get worse or taxes increase
I'm not sure what you're talking about here. It's far cheaper to provide services at higher density, far cheaper. You need fewer meters of sewer, conduit, etc. Transit lines can be shorter with fewer connections. Additionally, if you bring more people into a municipality, you generate more taxes through increased property values, increased sales tax revenue, and income taxes if you municipality does that.
I'm not sure what you're talking about here. It's far cheaper to provide services at higher density, far cheaper. You need fewer meters of sewer, conduit, etc. Transit lines can be shorter with fewer connections. Additionally, if you bring more people into a municipality, you generate more taxes through increased property values, increased sales tax revenue, and income taxes if you municipality does that.
This is actually not true in California where new housing pays property taxes at 2017 rates. Thanks to Prop 13 there are a lot of homes worth more than a million dollars that are still paying $5,000 or less per year in property taxes.
It's not a simple supply versus demand curve. Sometimes adding a little more housing without flooding the market does end up increasing prices due to gentrification that changes the characteristics of a neighborhood.
Building more housing does "make the city suck" for people who prefer quiet, privacy, and unobstructed views. In some areas it probably makes sense to build regardless of their objections but that will have to be resolved through a democratic process.
Building more housing does "make the city suck" for people who prefer quiet, privacy, and unobstructed views. In some areas it probably makes sense to build regardless of their objections but that will have to be resolved through a democratic process.
If the new housing replaces old housing, without adding any /many new units, it can certainly increase prices (new brand new apartment often costs more than a 20 year old one). That isn't what you are talking about here, but some NIMBYs may think that is what is going on in some situations- in those cases, education is key to persuasion.
> Will building more units / appartments/ houses bring the price down?
Ballooning housing prices are a prime example of demand exceeding supply leading to increased prices. Increasing supply will decrease prices or at least limit further price increase.
Ballooning housing prices are a prime example of demand exceeding supply leading to increased prices. Increasing supply will decrease prices or at least limit further price increase.
But it's not like demand is inelastic.
Do we know how much additional supply would have to be built to saturate demand? Is that even freasible?
It seems like an intractable problem to me because it's not like anything we do, in these big popular cities, is going to have much of an effect in the next 12 months to 5 years.
Personally, I solved the problem for myself by moving away from the big city I was in to a sub 100k population centre. There's no way I was going to be able to afford to buy a place within an hours drive of where I worked, not in the foreseeable future.
Do we know how much additional supply would have to be built to saturate demand? Is that even freasible?
It seems like an intractable problem to me because it's not like anything we do, in these big popular cities, is going to have much of an effect in the next 12 months to 5 years.
Personally, I solved the problem for myself by moving away from the big city I was in to a sub 100k population centre. There's no way I was going to be able to afford to buy a place within an hours drive of where I worked, not in the foreseeable future.
You’d need 5,000 units a year in San Francisco to keep rents steady. This is the goal SF’s mayor just set for the city, google “Ed Lee Medium” to find it.
It is definitely not an intractable problem given SF built 5,000 units in 2016. Upzoning, lowering impact fees, speeding housing approvals for things like ADU’s, making discretionary review tougher (it currently costs $700 to delay a project by three months), electing pro-housing candidates, having places like Brisbane choose apartments over another office park - all of these will help, it’s not intractable by any stretch.
It is definitely not an intractable problem given SF built 5,000 units in 2016. Upzoning, lowering impact fees, speeding housing approvals for things like ADU’s, making discretionary review tougher (it currently costs $700 to delay a project by three months), electing pro-housing candidates, having places like Brisbane choose apartments over another office park - all of these will help, it’s not intractable by any stretch.
If we just slightly upzoned the whole western half of the city, and added public transit to go with it (even better if streets were narrowed a bit and street parking reduced), San Francisco could fit a whole heck of a lot more people without ever needing new buildings taller than 4 or 5 stories.
San Francisco zoning through huge swaths of the city is restricted to single-family houses and scattered duplexes, with only a few mixed-use areas. It’s supposed to be a booming city, but more than half of it is zoned to be a sleepy beach town. (And a lot of the Bay Area is even worse.)
Here’s the SF zoning map. All the pale yellow part is very low density; If it were up to me we would change half or more of that pale yellow area to some mix of darker yellow, orange, and purple. http://default.sfplanning.org/zoning/zoning_map.pdf
San Francisco zoning through huge swaths of the city is restricted to single-family houses and scattered duplexes, with only a few mixed-use areas. It’s supposed to be a booming city, but more than half of it is zoned to be a sleepy beach town. (And a lot of the Bay Area is even worse.)
Here’s the SF zoning map. All the pale yellow part is very low density; If it were up to me we would change half or more of that pale yellow area to some mix of darker yellow, orange, and purple. http://default.sfplanning.org/zoning/zoning_map.pdf
5000 units, and you think that's a lot? Last year in Warsaw (which is smaller than SF) there were almost 20,000 new apartments built. You now see how much impact all those zoning laws have.
According to Wikipedia SF City and County has a population of 870k, Warsaw 1.8 million. The metro area 4.6M vs 3.1M respectively. So I'd say the same ballpark. That said 5000 units seems like nothing at these population sizes. I live near Wrocław (650k city population, 1.1M metro), there were 10.000 new units in 2016 and this year will be similar. And this number doesn't include private investments (people building a house for themselves), only housing built by developers and sold on the market.
> But it's not like demand is inelastic.
How many houses do you need to live on?
Housing is one of less elastic goods you will find around. Basic food is probably less elastic, it viewed as a single good, but you won't find many other counter examples.
How many houses do you need to live on?
Housing is one of less elastic goods you will find around. Basic food is probably less elastic, it viewed as a single good, but you won't find many other counter examples.
Broadly, yes, for the same reasons that destroying housing (as happened in Santa Rosa) increases competition for existing apartments and increases rents. Here's a report from the state LAO about the effects of building more housing on displacement: http://www.lao.ca.gov/Publications/Report/3345
In 2016 SF built 5,000 units, a record, and rents and owner move-in evictions both fell for the first time in a while. (They are not going to repeat that production in 2017 or 2018, in large part due to Prop C).
Across all 50 states, areas where population growth exceeded housing supply growth saw price increases: https://twitter.com/lenkiefer/status/871785655164182529
Austin, Houston, and Dallas don't have very restrictive zoning or rules around new home construction, and they lap California in home building and have seen rents hardly rise at all.
In 2016 SF built 5,000 units, a record, and rents and owner move-in evictions both fell for the first time in a while. (They are not going to repeat that production in 2017 or 2018, in large part due to Prop C).
Across all 50 states, areas where population growth exceeded housing supply growth saw price increases: https://twitter.com/lenkiefer/status/871785655164182529
Austin, Houston, and Dallas don't have very restrictive zoning or rules around new home construction, and they lap California in home building and have seen rents hardly rise at all.
> Austin, Houston, and Dallas don't have very restrictive zoning or rules around new home construction, and they lap California in home building and have seen rents hardly rise at all
not exactly true.. in htx new construction is all luxury, and many people are moving in from out of state; those that can afford it and want to can go to the luxury units and those have had price 'reductions' (from overpriced initial prices) but the 'regular' apts have seen rents rise quite a bit because the newcomers have squeezed the existing people into more competition for the cheaper units..
i posit that subsequently the emptier, overprovisioned high end buildings will start to fail, and become a glut of relatively high price condos, which will then cause the regular housing prices to go up..
not exactly true.. in htx new construction is all luxury, and many people are moving in from out of state; those that can afford it and want to can go to the luxury units and those have had price 'reductions' (from overpriced initial prices) but the 'regular' apts have seen rents rise quite a bit because the newcomers have squeezed the existing people into more competition for the cheaper units..
i posit that subsequently the emptier, overprovisioned high end buildings will start to fail, and become a glut of relatively high price condos, which will then cause the regular housing prices to go up..
Are new cars on average more “luxury” than used cars? If for some reason we didn’t produce any new cars, would the price of used cars rise or fall?
In a rational market, yes, absolutely; if prices are driven by a supply deficit then increasing supply cuts prices (or at least reduces price growth, if a smaller deficit remains).
Housing markets tend not to be all that rational, though; there's often an aspect of speculative mania to them. It's likely that increasing supply would cut prices, but it's not actually certain, as it may just increase speculative 'investor' demand from the "house prices always go up" crowd. The Irish property bubble in the late 90s to late noughties was originally driven by supply shortages, but even as supply started to meet demand prices kept going up for a couple of years due to property "investors" (before crashing spectacularly).
Housing markets tend not to be all that rational, though; there's often an aspect of speculative mania to them. It's likely that increasing supply would cut prices, but it's not actually certain, as it may just increase speculative 'investor' demand from the "house prices always go up" crowd. The Irish property bubble in the late 90s to late noughties was originally driven by supply shortages, but even as supply started to meet demand prices kept going up for a couple of years due to property "investors" (before crashing spectacularly).
Sure there is bubble like behavior at times but there’s also 68 years of data in SF showing that a 1% increase in supply leads to a 1.7% decrease in rents,
http://experimental-geography.blogspot.com/2016/05/employmen...
In the vast majority of places low supply is causing high prices, not speculation.
http://experimental-geography.blogspot.com/2016/05/employmen...
In the vast majority of places low supply is causing high prices, not speculation.
what differentiates a real estate investor from a speculator?
The speculator buys property because they expect it to go up in value; the rent is just covering part of their costs. For instance, if you have an "investment" property, but the rent doesn't cover the interest component of the mortgage, but you think that's okay because you expect it to go up in value, you're a speculator, not an investor.
Ok, so anyone who invests in stocks with no dividends is also a speculator too by your definition? Or is the criteria different for stock investors?
Diversification? Although drawing the line there would put plenty of big time "investors" on the speculator side. Maybe it's just a distiction without a difference.
It does if the new units surpass demand, even in the short term. If there are 5k available units but there is demand for 15k over the next 90 days, of course building 1500 won't affect prices much, if at all. You need to build until there is some vacancy, then landlords are forced to lower rent to prevent their units from being vacant, unless they have the means to hold out for someone who really wants that particular location.
Supplying more of something always reduces the price of that thing. The thing to keep in mind, though, is that it doesn’t reduce the price that people actually pay; it reduces the price that people would have paid.
home price increases in my neighborhood of manhattan have substantially slowed their rise in the past couple years as a bunch of new construction has come on the market. this will probably continue through next year as stuff in progress finishes up, and then probably rise again because homebuilders don't start projects when prices are flat.
For a more skeptical viewpoint: http://stumblingandmumbling.typepad.com/stumbling_and_mumbli...
I guess SF’s recent experience, where years of rent and owner move-in eviction increases ended the same year we built a record number of housing units, belies this.
Sure we may run into other problems, but right now a third of California renters are paying more than half their salary in rent. I’d take my chances with a lot of other crises to help with that one.
Sure we may run into other problems, but right now a third of California renters are paying more than half their salary in rent. I’d take my chances with a lot of other crises to help with that one.
>I guess SF’s recent experience, where years of rent and owner move-in eviction increases ended the same year we built a record number of housing units, belies this.
Care to link me? I'm interested in this.
But mainly I agree with the article that increasing building is only a long-term solution, to fix the ridiculous prices of housing in the short-term different measures are needed - there's just no way to build enough housing in the short term.
Care to link me? I'm interested in this.
But mainly I agree with the article that increasing building is only a long-term solution, to fix the ridiculous prices of housing in the short-term different measures are needed - there's just no way to build enough housing in the short term.
http://www.nbcbayarea.com/news/local/Eviction-Notices-San-Fr...
In the short term, building more housing will still result in lower rents relative to not building more housing; its the right thing to do for both time frames.
In the short term, building more housing will still result in lower rents relative to not building more housing; its the right thing to do for both time frames.
I got sick of living in a HCOL area and moved somewhere super cheap. Put 20% down on a nice house and have a $500/month mortgage payment. My total annual housing expenses are less than the taxes on a similar house in Seattle or San Francisco.
Pay is less on paper, but actually quality of life and savings are much higher.
Pay is less on paper, but actually quality of life and savings are much higher.
Where did you move to? I'm looking for a good area like this with the biggest requirement of having fiber or otherwise just a very good 250Mbps+ service.
If you can telecommute a lot, I recommend Maryland b/w D.C. and Annapolis. You can get a 4BR house for what a 1BR apartment costs in D.C., you can be at a farm in 20 minutes in one direction and a downtown bar in 10 minutes in the other, and I've got two different fiber providers available (I'm getting 2-gig installed soon). Unfortunately, the tech scene in the DMV area seems to be mostly in northern Virginia, which is probably the most overrated part of the entire country.
You just described any suburb in the Midwest.
Literally any.
Minus the fiber, but not entirely ("300mbs ought to be good enough for anyone").
Literally any.
Minus the fiber, but not entirely ("300mbs ought to be good enough for anyone").
Northern Virginia has very low unemployment and high paying jobs. The area also has all 4 seasons fairly balanced, zero significant natural disasters, plenty of rainfall to stay green in the summer etc. Granted, you may not like that tradeoff, but it has a lot going for it.
Sure I moved to MD due to my current job, but I am seriously considering moving back.
Sure I moved to MD due to my current job, but I am seriously considering moving back.
Even with high paying jobs (if you are fortunate to have one), NoVA also has incredibly high housing costs unless you decide to live in the less desirable locations (which come with their own problems) or move far out and give yourself a massive commute.
Depends on what your comparing it to. Northern VA has a mix of jobs and houses so it's possible to have a very short commute. It's easy to find an nice apartment around 1500$ / month just about anywhere which is not cheap, but not so crazy as NYC or SV.
A dual income professional family can generally afford a 4 bedroom home, but that's hard on a single income without a massive down payment or over sized salary.
In terms of living further out, it's frequent for people to telecommute 1-3 days a week which makes a huge difference.
A dual income professional family can generally afford a 4 bedroom home, but that's hard on a single income without a massive down payment or over sized salary.
In terms of living further out, it's frequent for people to telecommute 1-3 days a week which makes a huge difference.
And some of the best public school systems in the country.
I moved from Seattle to a midsized city in Texas. Gigabit is available, but expensive.
While my house is by far the nicest I have lived in, most of my neighbors have far larger/more expensive homes. It would have been easy to spend twice as much for more land and square footage, but I am very happy having something we can very comfortably afford.
While my house is by far the nicest I have lived in, most of my neighbors have far larger/more expensive homes. It would have been easy to spend twice as much for more land and square footage, but I am very happy having something we can very comfortably afford.
I moved from Seattle to the Raleigh/Durham area. I absolutely love it so far. Everything is cheaper here, and quality of life is (in my subjective opinion) far superior.
Feel free to ask me more about it.
Feel free to ask me more about it.
I don't know where he went but I've occasionally thought about Raleigh or Chicago as like, way cheaper than Boston, where I am.
I moved from Seattle to Raleigh, and love it so far.
I'd be happy to answer questions about it if that would be helpful to you.
I'd be happy to answer questions about it if that would be helpful to you.
Chicago and Illinois in general are in rough financial shape. Taxes are very high with no end to raises in sight.
I looked it up and Illinois just raised its income tax rate to just below that of Massachusetts.
Me too. That's one less state we can escape to.
I don't know about you but income tax isn't my main concern
Property and sales taxes are also high.
I think one major problem is the number of government bodies with taxing authority:
https://www.illinoispolicy.org/reports/too-much-government-i...
Essentially, Illinois has a long history of corruption and political patronage that I find detestable.
I think one major problem is the number of government bodies with taxing authority:
https://www.illinoispolicy.org/reports/too-much-government-i...
Essentially, Illinois has a long history of corruption and political patronage that I find detestable.
sure, its not the first concern. but, if you're going to pick everything up and leave all your friends and family behind, don't you want to find someplace ideal (consider all your choices and all factors involved) ?
[deleted]
Raleigh or Chicago aren't $500/mo mortgage for a nice house cheap.
No, but they have a livelier job market than, like, Rochester or Buffalo, and comparatively they still look quite cheap.
You got 80% of a nice house for something like 120-140k (guessing at interest rate and term here)? In the states, or a cheap foreign country?
I have seen a nice 4 story house sold for under 60k in the US. It's really all about location, location, location.
Wow, 60k USD for a home, incredible.
That's an older home then probably? Here in Belgium the absolute minimum would be double that, those would be the smallest, oldest buildings with nothing of insulation or modern comforts.
Here a building-stop has been announced for 2040 as all available land in flanders will be used up for homes!
Here a building-stop has been announced for 2040 as all available land in flanders will be used up for homes!
I did. It is easy to find nice places for less than 200k in Texas. Prices are going up, but still very affordable.
And you'll actually get to retire!
I quit my job in Bellevue WA and moved to Oregon City Oregon. Here's some things it has going for it:
5) It has a train station that connects it to every city from Los Angeles to Portland to Seattle via Amtrak
4) Portland's train system doesn't connect to it yet, but it will soon. At the moment, it takes about 15 minutes to get to the city train station.
3) Portland is overrun with homeless people, but Oregon City isn't.
2) The traffic isn't as bad as Portland
1) You can get a nice house for well under $1800 a month. If you can live with a condo, you can get that down to about $1200.
5) It has a train station that connects it to every city from Los Angeles to Portland to Seattle via Amtrak
4) Portland's train system doesn't connect to it yet, but it will soon. At the moment, it takes about 15 minutes to get to the city train station.
3) Portland is overrun with homeless people, but Oregon City isn't.
2) The traffic isn't as bad as Portland
1) You can get a nice house for well under $1800 a month. If you can live with a condo, you can get that down to about $1200.
I’m in Wilsonville, moved from Seattle (but I grew up in Portland).
One thing that WA has over OR is no income tax. I’d gladly have sales tax again to not pay the income tax.
One thing that WA has over OR is no income tax. I’d gladly have sales tax again to not pay the income tax.
We’ll see how long Washington can maintain its income-tax free environment [1].
1. https://www.seattletimes.com/seattle-news/politics/seattle-c...
1. https://www.seattletimes.com/seattle-news/politics/seattle-c...
> “Whoever goes against this is openly causing suffering,” she said.
This quote really stands out to me. Is this demonization of opposing viewpoints a new thing, or am I just noticing it more in the last two years?
This quote really stands out to me. Is this demonization of opposing viewpoints a new thing, or am I just noticing it more in the last two years?
>Is this demonization of opposing viewpoints a new thing, or am I just noticing it more in the last two years?
I think it's more in recent years. Especially in the US where things are highly polarized and every issue seems to have a "Republican" take and a "Democratic" take. So points of view on specific situations are taken to reflect much more about a person's overall position than they actually do. And we have more echo chambers reinforcing our conviction about being right in the first place.
Finally I think there is also something legitimate about connecting viewpoints to consequences and evidence where possible, and discussing higher level concepts with the low level consequences in peoples' lives, in order to understand the tradeoffs that each point of view entails. I do think certain viewpoints are tightly linked to certain outcomes, and it wouldn't be demonizing to say "If you are for policy X you are accepting the likely effects Y and Z".
I think it's more in recent years. Especially in the US where things are highly polarized and every issue seems to have a "Republican" take and a "Democratic" take. So points of view on specific situations are taken to reflect much more about a person's overall position than they actually do. And we have more echo chambers reinforcing our conviction about being right in the first place.
Finally I think there is also something legitimate about connecting viewpoints to consequences and evidence where possible, and discussing higher level concepts with the low level consequences in peoples' lives, in order to understand the tradeoffs that each point of view entails. I do think certain viewpoints are tightly linked to certain outcomes, and it wouldn't be demonizing to say "If you are for policy X you are accepting the likely effects Y and Z".
I think that this is probably a logical extension of the underlying logic.
Sales taxes are inherently harder on people with less money than people with more money. That's demonstrable just based on simple math.
Any argument for sales taxes over income taxes that doesn't recognize that fundamental mathematical truth is not being intellectually honest (or doesn't know the topic very well).
Sales taxes are inherently harder on people with less money than people with more money. That's demonstrable just based on simple math.
Any argument for sales taxes over income taxes that doesn't recognize that fundamental mathematical truth is not being intellectually honest (or doesn't know the topic very well).
The problem is that no one is naive enough to believe they'll somehow lower any existing taxes (either sales or property) with the introduction of an income tax. They'll keep them all, and try and introduce some new program that helps a specific demographic.
From what I see, this usually ends up with money moving between pockets with a bureaucracy taking its cut along the way. I try not to be overly political, but I can't stand the idea of a strong, central planning government.
Let's see a balanced, itemized budget. Even in the article they're just spitballing ideas with what they could do it an extra $140m.
From what I see, this usually ends up with money moving between pockets with a bureaucracy taking its cut along the way. I try not to be overly political, but I can't stand the idea of a strong, central planning government.
Let's see a balanced, itemized budget. Even in the article they're just spitballing ideas with what they could do it an extra $140m.
It doesn't seem like it logically follows to me. The government having more money is often a good thing, but it has to be weighed against the damage government programs can do and the costs to the people of higher taxation. It's debatable, and people like the woman in the article want to short-circuit the debate by calling the other side the devil.
Except this law violates various state laws, as well as the state constitution, so it will be struck down upon judicial review.
i once managed the product that calculated the cost basis for your property tax bill in most US counties & states (and some international jurisdictions), and it was common knowledge there that home prices were disconnected from construction costs.
construction cost relative to home prices is interesting to a company like buildzoom because they're in the construction business (and finding the coming construction booms is important to them), but if you want to understand home price inflation, it's not that interesting at all. shiller, of case-shiller fame, also showed that home prices are disconnected from construction costs in his book irrational exhuberance.
in a stable economy, you'd expect home prices to roughly follow GDP or inflation, not building cost. if you graphed median home prices against GDP, you'd literally see the bubble (between median home price and GDP) starting to form in the 80's and popping in 2008.
why? financial engineering--we turned homes from places to live into investments. greed fueled home price inflation. and real estate investment was accessible to the average american, unlike more complex financial instruments like bonds or derivatives. in classic bubble fashion, people knew (and still know) that prices are irrational, but we all think we can make a boatload and get out before the bubble pops (again).
but these are homes we're talking about, not some abstract concept like a futures contract on the production of black-eyed peas. these are not simple commodities that we can easily replace with a substitute. it's where we live.
and yet, we continue to allow financiers and investors to extract wealth through higher rents (now nearing 50% for many residents of big cities), regulatory capture, and collaterized debt (the risk on which is passed to taxpayers). but "everyone else is doing it" so it's ok, right?
construction cost relative to home prices is interesting to a company like buildzoom because they're in the construction business (and finding the coming construction booms is important to them), but if you want to understand home price inflation, it's not that interesting at all. shiller, of case-shiller fame, also showed that home prices are disconnected from construction costs in his book irrational exhuberance.
in a stable economy, you'd expect home prices to roughly follow GDP or inflation, not building cost. if you graphed median home prices against GDP, you'd literally see the bubble (between median home price and GDP) starting to form in the 80's and popping in 2008.
why? financial engineering--we turned homes from places to live into investments. greed fueled home price inflation. and real estate investment was accessible to the average american, unlike more complex financial instruments like bonds or derivatives. in classic bubble fashion, people knew (and still know) that prices are irrational, but we all think we can make a boatload and get out before the bubble pops (again).
but these are homes we're talking about, not some abstract concept like a futures contract on the production of black-eyed peas. these are not simple commodities that we can easily replace with a substitute. it's where we live.
and yet, we continue to allow financiers and investors to extract wealth through higher rents (now nearing 50% for many residents of big cities), regulatory capture, and collaterized debt (the risk on which is passed to taxpayers). but "everyone else is doing it" so it's ok, right?
https://en.wikipedia.org/wiki/Georgism.
Don't mean to boil down your entire well-written post to a single point, but I maintain that Georgism is the only sensible solution to this problem.
Don't mean to boil down your entire well-written post to a single point, but I maintain that Georgism is the only sensible solution to this problem.
i'm not familiar with Georgism, but i do agree that the land value tax should be a primary taxing mechanism for a property-ownership economic system (like ours in the US). it's progressive, fair, and according to the wikipedia article, doesn't get passed on to renters.
Why should abstract things like a futures contract be investable, while "real" things like houses shouldnt?
I guess the government should recommend bitcoin investing to everyone since its not real and nobody is affected?
I guess the government should recommend bitcoin investing to everyone since its not real and nobody is affected?
it's not so much that real things shouldn't be investable, but that a primary residence has unique properties (lke the lack of substitutability) that make it unlike commodities. and commodities are what capitalistic free markets was design for and for which it works best.
so a free-for-all market may not be ideal for a society when it comes to primary residences. i'd go so far as to argue that the american identity rests on the psychological safety of a reliable place to live (or at least it used to, before we turned them into slot machines).
entrepreneurship couldn't have flourished without it, along with reasonable bankruptcy laws that (until recently) fostered greater risk-taking among the labor class. it's hard to be the rugged individualist if a risk you take can lead to you and your family's death.
so a free-for-all market may not be ideal for a society when it comes to primary residences. i'd go so far as to argue that the american identity rests on the psychological safety of a reliable place to live (or at least it used to, before we turned them into slot machines).
entrepreneurship couldn't have flourished without it, along with reasonable bankruptcy laws that (until recently) fostered greater risk-taking among the labor class. it's hard to be the rugged individualist if a risk you take can lead to you and your family's death.
I did a crude analysis of the effects of density on cost in this thread: https://news.ycombinator.com/item?id=12362684
"Sure. I found this for Canada: http://www.altusgroup.com/media/4099/costguide_2015_web.pdf Toronto (average $/sq ft to build given range) Medium Quality Tract House (assume 1 story): 180 Medium Quality Highrise (50-80 stories, average 65 stories): 270 This comes out to $1.38 more per square foot for each additional story. Let's just assume land will be twice as expensive in the city center as at the edge of that metro. Assume the cheapest land is $200 per square foot. Assume that the house will be built on the cheaper land, and assume one dwelling per story for simplicity. As you add a story, the cost of land is halved. After adding the 65th story, it is divided 65 ways. By adding the linear curve of building cost over the inverse curve of cost of land divided by story, you get the cost per square foot per story. In fact, this is maximized for a single-story building as land costs are born by a single tenant. Cost per floor falls until construction costs overcome the falling cost of land. The minimum cost to add a story, $214.67 occurs for the 12th floor. Again, back of the napkin and very naive. A highrise will probably have less square footage per dwelling though. If we halve that the cost of land falls even faster, with building costs plus land costs bottoming out at $203.51 per square foot, for the 8th floor. Finally, I added an $8,000 per square foot premium at city center. With this, the cheapest floor costs $348.44 per square foot for the sixth floor. So as land prices become steeper from city center to periphery, it actually makes more sense to disperse. Likewise reducing dwelling size does not have as much of an effect as rising build costs."
More than happy if someone can poke holes in it, but my takeaway was that costs are minimized at lower density rates than I first assumed. Mid-rise buildings are the most cost-effective, moreso than high-rises.
I'm glad that the BuildZoom study confirmed my exercise somewhat, but it's still disappointing that sprawl seems to be the best way to make housing affordable.
"Sure. I found this for Canada: http://www.altusgroup.com/media/4099/costguide_2015_web.pdf Toronto (average $/sq ft to build given range) Medium Quality Tract House (assume 1 story): 180 Medium Quality Highrise (50-80 stories, average 65 stories): 270 This comes out to $1.38 more per square foot for each additional story. Let's just assume land will be twice as expensive in the city center as at the edge of that metro. Assume the cheapest land is $200 per square foot. Assume that the house will be built on the cheaper land, and assume one dwelling per story for simplicity. As you add a story, the cost of land is halved. After adding the 65th story, it is divided 65 ways. By adding the linear curve of building cost over the inverse curve of cost of land divided by story, you get the cost per square foot per story. In fact, this is maximized for a single-story building as land costs are born by a single tenant. Cost per floor falls until construction costs overcome the falling cost of land. The minimum cost to add a story, $214.67 occurs for the 12th floor. Again, back of the napkin and very naive. A highrise will probably have less square footage per dwelling though. If we halve that the cost of land falls even faster, with building costs plus land costs bottoming out at $203.51 per square foot, for the 8th floor. Finally, I added an $8,000 per square foot premium at city center. With this, the cheapest floor costs $348.44 per square foot for the sixth floor. So as land prices become steeper from city center to periphery, it actually makes more sense to disperse. Likewise reducing dwelling size does not have as much of an effect as rising build costs."
More than happy if someone can poke holes in it, but my takeaway was that costs are minimized at lower density rates than I first assumed. Mid-rise buildings are the most cost-effective, moreso than high-rises.
I'm glad that the BuildZoom study confirmed my exercise somewhat, but it's still disappointing that sprawl seems to be the best way to make housing affordable.
> but it's still disappointing that sprawl seems to be the best way to make housing affordable.
The other alternative is like much of Europe with lots of small cities and towns connected with trains and roads, and zoning enforced farms in-between. Isn't easy to get done in US though where developer $$ rule.
The other alternative is like much of Europe with lots of small cities and towns connected with trains and roads, and zoning enforced farms in-between. Isn't easy to get done in US though where developer $$ rule.
Midrise can be very dense. Think Paris. So can lowrise. Think rowhouses.
So no, sprawl is not the best way to make housing affordable. Doubly so if you account for transportation costs.
So no, sprawl is not the best way to make housing affordable. Doubly so if you account for transportation costs.
hey, i'm looking to buy a small plot of land and build a house on it in the next few years. my goal is to be able to have land and a house of my own without taking a loan, or a very big one at least. ive been looking at land in northern california and there seems to be a lot of promising deals. lake county california seems to be a pretty good spot.
if anyone has experience with buying land to settle on, in northern california or otherwise, i would be eternally grateful for advice and tips. in fact, i would greatly appreciate any advice or tips regarding anything that has to do with buying land, building a house, or owning property and a house.
if anyone has experience with buying land to settle on, in northern california or otherwise, i would be eternally grateful for advice and tips. in fact, i would greatly appreciate any advice or tips regarding anything that has to do with buying land, building a house, or owning property and a house.
Check out the book "County Property: Dirt Cheap". It has some good tips.
Note Lake County is high in fire danger, so depending on where you buy you'll want to take that into account for insurance cost or building style. Neighbors are also pretty critical to whether or not you'll be happy with this dream of yours.
Note Lake County is high in fire danger, so depending on where you buy you'll want to take that into account for insurance cost or building style. Neighbors are also pretty critical to whether or not you'll be happy with this dream of yours.
This is a pretty old book, being >20 years old. I wonder if anyone knows of a good book that takes into account searching via the internet.
Well, the principles still hold from the book, you'd be surprised. For internet searches, just looking at landwatch.com and Zillow. Between those two you will pretty much see all there is out here.
They really should normalize the costs on a per square foot basis and the numbers would be even more start. Homes tend to be smaller in areas with really high per square foot costs.
It just seems so sad. When you're driving along the highway and you see all these tiny homes jam packed together like some sort of Gehtto, only 2 feet between each home and yet there's miles and miles of space in every direction, outside the complex. I'm talking about the exerbs that surround the bay area. According to one govt report i read, Only 5% of CA land is currently being used!
It just seems so sad. When you're driving along the highway and you see all these tiny homes jam packed together like some sort of Gehtto, only 2 feet between each home and yet there's miles and miles of space in every direction, outside the complex. I'm talking about the exerbs that surround the bay area. According to one govt report i read, Only 5% of CA land is currently being used!
Lol they should do this for London, where 150 year old tiny apts cost millions.
...or beachfront property in (say) Santa Cruz. It's like a Mastercard ad:
simple beach bungalow.. $300,000
dirt and parking....... $3,000,000
35 steps to the sand... priceless> 150 year old tiny apts
Tiny is bad, but what's wrong with old?
I find older houses are usually built to a much higher standard (may just be those that remain but that's irrelevant), and have much more character.
Tiny is bad, but what's wrong with old?
I find older houses are usually built to a much higher standard (may just be those that remain but that's irrelevant), and have much more character.
Build quality in the UK is generally dire. Mortar and bricks of old buildings crumbles. Lots of asbestos. Leaky pipes cost too much to fix, electrics are old and a hazard... New buildings favour low cost over quality. Staircases crack away from walls 12 months in. Insulation is designed to meet green targets, but not to actually insulate. Compared with the standards-obsessed Germans, I suspect many buildings in the UK should really be demolished. It's but one of the reasons I'm selling up in London and moving to the mainland.
You miss out on a lot of modern advancements. A few things that come to mind from my lovely house:
* Single pane windows that leak heat / cool, also that rattle.
* Lack of insulation.
* Non-grounded wiring / unsafe wiring.
* Plaster instead of drywall, cracks very easily.
* Old heating systems (oil furnace with steam radiators).
* Crooked doorways and doors that don't close quite right.
* Single pane windows that leak heat / cool, also that rattle.
* Lack of insulation.
* Non-grounded wiring / unsafe wiring.
* Plaster instead of drywall, cracks very easily.
* Old heating systems (oil furnace with steam radiators).
* Crooked doorways and doors that don't close quite right.
Nothing wrong with old. Just that its related to the OP - construction costs are irrelevant when you can amortize the cost over a century or two.
for a lease hold instead of actual ownership too
TL;DR: Proximity to water and density of rich people drive up the cost of land.
It ain't rocket science people.
It ain't rocket science people.
Densification. Wish we would learn some of that in the SFBA.
Real estate values have always been rooted in location, location, and location (land).
- Brisbane may approve 4400 units of housing, or zero. 4400 units would be close to how many the Bay Area typically produces in a year.
- Cupertino and Sunnyvale residents frequently oppose new housing.
- San Francisco has a strong contingent of people that oppose large projects. There is one project near Glen Park BART, and another one with 1200 units at 700 Innes, that could use support in the coming months.
If you're not sure where to get started getting involved, contact me and I can point you in the right place. One good place to start would be to push your executives and VC's to actually work towards making housing affordable here in the Bay Area; for too many it's an afterthought.