The U.S. Needs More Housing Than Almost Anyone Can Imagine(theatlantic.com)
theatlantic.com
The U.S. Needs More Housing Than Almost Anyone Can Imagine
https://www.theatlantic.com/ideas/archive/2022/11/us-housing-gap-cost-affordability-big-cities/672184/
42 comments
It's a stifling regulatory environment that's landed us here. Zoning is restrictive, planning commissions are slow and restrictive, councils are slow and restrictive. All of the agencies involved want to capture value from construction projects.
The net result is that very few projects pencil out, and the ones that do are expensive. We need to fix the root cause, which is lack of property rights.
The net result is that very few projects pencil out, and the ones that do are expensive. We need to fix the root cause, which is lack of property rights.
The claims about zoning and property rights can be examined in the US, as Texas has no zoning. Housing costs are not remarkably different there.
The "capturing of value" that is actually happening is a net transfer of land and wealth from the general population to a handful of massive corporations and the people who control them. Once they own everything and have dismantled the market they can charge whatever they want.
The "capturing of value" that is actually happening is a net transfer of land and wealth from the general population to a handful of massive corporations and the people who control them. Once they own everything and have dismantled the market they can charge whatever they want.
Zoning for who? America has no issue with single family zoning.
I’m assuming you’re speaking about middle and high density zoning. Since the issues you're describing are extremely common for those zoning projects.
I’m assuming you’re speaking about middle and high density zoning. Since the issues you're describing are extremely common for those zoning projects.
If you're the property owner it should be easy for you to build whatever level of residential density you want and think the market will make profitable. Why is it illegal for me to build townhouses on my land?
I'm in an area where it takes, on average, 1.8 acres per single family home. The next town over would put 18 single family homes in that same space. Zoning is restrictive even for single-family homes.
I'm in an area where it takes, on average, 1.8 acres per single family home. The next town over would put 18 single family homes in that same space. Zoning is restrictive even for single-family homes.
I don't think that's a particularly representative example. Zoning is determined locally in the U.S., and taking the most extreme locality doesn't really shed light on what's going on in the country as a whole, and isn't a useful avenue to approach this problem. Try instead to work with averages and representative localities. The U.S., like any area, has urban, suburban, and rural areas, with a continuous gradient in between. No point in discussing rural or near-rural areas when complaining about zoning, since the real issue is that people in urban areas need access to jobs. People living on the horse farms or rural ranches are not the problem here, and liberalizing zoning in Asheville isn't going to make housing more affordable in Austin or San Francisco, which is where the pain of restrictive zoning is felt.
> If you're the property owner it should be easy for you to build whatever level of residential density you want and think the market will make profitable. Why is it illegal for me to build townhouses on my land?
Isn't the entire concept of externalities in economics that things aren't that simple? Presumably you agree that your neighbor shouldn't be able to build a sewage treatment plant next to your house.
Isn't the entire concept of externalities in economics that things aren't that simple? Presumably you agree that your neighbor shouldn't be able to build a sewage treatment plant next to your house.
From what I can tell most economists will actively go out of their way to ignore externalities. For some externalities there are even market based methods for getting rid of them yet curiously almost no economist is interested in these types of institutions.
Sewage treatment plants are not residential construction.
Move to Texas and you can literally do this. There is no zoning. Go ahead and build those townhouses on your land. Your next door neighbors might build a strip club or pesticide manufacturing plant, though.
Even if you luck out with your current neighbors, the addional risk will lead to worse terms for you if you need investors to finance the project.
Even if you luck out with your current neighbors, the addional risk will lead to worse terms for you if you need investors to finance the project.
Zoning density is based partially on supporting infrastructure. If low density suddenly becomes higher density, will the roads be able to handle the additional vehicles/trips? Probably not, so who will cover costs to improve the roads so individuals can build multiple townhomes in their property?
This is precisely what impact fees are for when applying for building permits.
BuckyBeaver(3)
This is a misunderstanding of how pricing works. The homes that are beig built aren't expensive because they're fancy, they're expensive because they're scarce and people need them, so they bid against each other. Every building markets itself as "luxury", but this is in fact just marketing. In principle you could make units cheaper by dividing them up into units with less floor space, but that people are already renting the larger units in groups.
>So you’d say to yourself, well clearly they’re targeting the affluent then. Except there are only so many high income Americans you can sell to
They're targeting high net worth individuals looking for a store of value (or, in some cases, a foothold/bolthole from their repressive government).
High income Americans are to these flats what jewellery/smartphones are to gold - the underlying use value that, combined with natural scarcity, drives the hoarding instinct.
It's quite possible to pull the rug out from under the feet of the ultrawealthy by instituting a steep land value tax. This would kill the hoarding instinct, kill the NIMBY instinct and drive more efficient use of land.
They're targeting high net worth individuals looking for a store of value (or, in some cases, a foothold/bolthole from their repressive government).
High income Americans are to these flats what jewellery/smartphones are to gold - the underlying use value that, combined with natural scarcity, drives the hoarding instinct.
It's quite possible to pull the rug out from under the feet of the ultrawealthy by instituting a steep land value tax. This would kill the hoarding instinct, kill the NIMBY instinct and drive more efficient use of land.
I don’t know anyone buying new development housing as an alternative to marketable securities.
There's no situation in which the NYC subway can accommodate a 50% increase in riders. Just building housing isn't enough.
I do think this article is right about a lot of things, but I think that if we could magically increase housing, we would find what NYC found building highways: building them actually created traffic, and they could never catch it.
If a city's infrastructure can't dramatically increase, the city's full. New York would need to double transit infrastructure to make current use comfortable.
I do think this article is right about a lot of things, but I think that if we could magically increase housing, we would find what NYC found building highways: building them actually created traffic, and they could never catch it.
If a city's infrastructure can't dramatically increase, the city's full. New York would need to double transit infrastructure to make current use comfortable.
Not just the USA
The housing situation in the UK is beyond critical.
The housing situation in the UK is beyond critical.
It's absolutely ridiculous now. It was also in the news today that net migration was 504,000 this year. I absolutely think it was the right thing to do (mostly refugees from Ukraine and Hong Kong) but if you're going to have these migration policies and you've got a housing supply and affordability crisis, you've absolutely got to implement mass house building policies at the same time. This government is an absolute joke but I have very little faith that Starmer is going to be much better. My plan is to leave whilst I still can.
Source: https://www.thetimes.co.uk/article/net-migration-at-record-l...
Source: https://www.thetimes.co.uk/article/net-migration-at-record-l...
But where will you go? Housing is ridiculous everywhere (except maybe Japan).
At the minute I’m leaning towards going to Australia to take advantage of the new 3 year Working Holiday Visa for uk citizens. I’ll probably get a campervan over there and do the whole nomad thing for a while or just rent for a bit. After that I’m not sure, options I’m weighing up atm:
- study German over the next few years and then study in Germany (free or extremely low cost tuition)
- as above but in Argentina or another Latin American country (have already been studying Spanish for a couple of years so not far off the standard required)
- rent in Ireland for five years (can live and work there visa free as UK citizen), become a naturalised citizen then move anywhere I want in the EU
- move to Glasgow or Belfast where property is cheaper and the people are friendlier.
- do the whole digital nomad thing in more affordable countries like Thailand, Bali, Mexico etc
The only thing I know for sure is I am absolutely done with England and don’t want to be part of it anymore.
- study German over the next few years and then study in Germany (free or extremely low cost tuition)
- as above but in Argentina or another Latin American country (have already been studying Spanish for a couple of years so not far off the standard required)
- rent in Ireland for five years (can live and work there visa free as UK citizen), become a naturalised citizen then move anywhere I want in the EU
- move to Glasgow or Belfast where property is cheaper and the people are friendlier.
- do the whole digital nomad thing in more affordable countries like Thailand, Bali, Mexico etc
The only thing I know for sure is I am absolutely done with England and don’t want to be part of it anymore.
A better way to look at it is how much is immigration of wealthy people propping up the UK economy? If you look at the number of new £1m+ apartments in London (which even if you are a couple of well paid engineers you probably could not get a mortgage for), then it paints a pretty stark picture.
My understanding is that these apartments aren’t generally purchased by immigrants but by non-resident investors who just want a safe asset to park money in and take advantage of the ridiculous never ending house price inflation. They know that the government will never take any steps to correct the market because the severity of the after effects would make it electoral suicide. So London is just filled with tons of empty apartments and houses.
The UK's problems are about distribution not supply. We subsidise OAPs to sit alone in 4 bed houses in areas that need workers, then there is no space or money left for working families...
> ...distribution not supply
This is true in more than just the UK. It's also not simply old people living in oversized houses. Think holiday homes, AirBnB, second homes, land-banked properties, etc.
Any government that truly wanted to address it's accommodation crisis should start by conducting a thorough survey of residences and determine how many are actually being used as a primary residence.
This is true in more than just the UK. It's also not simply old people living in oversized houses. Think holiday homes, AirBnB, second homes, land-banked properties, etc.
Any government that truly wanted to address it's accommodation crisis should start by conducting a thorough survey of residences and determine how many are actually being used as a primary residence.
I think it’s still possible to actually get housing in the UK, it’s just more expensive than you’d like. (There’s lots on the market near me.) Look at somewhere like Ireland where it’s getting to the point where there almost literally just isn’t any housing available at all. Lines of hundreds of people applying to get any property that comes onto the market.
One key thing to keep in mind is that, even if the population's stagnant, young people want to move out (and live in an apartment, later upgrading to a house when they have kids) while their parents and grandparents want to age in place in their existing home (occupancy goes from say 3-4 to 2). This is why housing production actually has to outpace population growth just to keep prices stable.
more housing? need water sources ect for existing housing, not to mention new housing..
> The best evidence for how much housing we need to build lies in the prices that people pay today.
No. The best evidence is the total number of households in the US compared with the total number of residences. How has that been tracking?
Demand for housing has been going up. This demand is not always for a primary residence (or even for properties intended to be rented out as a primary residence).
Ireland learnt the hard way that rising demand (as evidenced by rising prices) does not mean a shortage of residences that people could live in. Their shortage quickly turned to a surplus when the GFC hit (though they've somehow managed to engineer another accommodation crisis in Dublin since).
No. The best evidence is the total number of households in the US compared with the total number of residences. How has that been tracking?
Demand for housing has been going up. This demand is not always for a primary residence (or even for properties intended to be rented out as a primary residence).
Ireland learnt the hard way that rising demand (as evidenced by rising prices) does not mean a shortage of residences that people could live in. Their shortage quickly turned to a surplus when the GFC hit (though they've somehow managed to engineer another accommodation crisis in Dublin since).
The largest home builders in the nation aren’t building homes at budgets that most can afford.
So you’d say to yourself, well clearly they’re targeting the affluent then. Except there are only so many high income Americans you can sell to, and not all of them want expensive homes.
So what do these builders do? They build-to-rent! Yep. Those single-family homes you see in many large developments you can just think of as so-called “luxury” apartments by a different name.
I suspect most developed nations experiencing this issue are effectively stuck and growth capped markets.
Truly only dedicated policy targeting this problem will make a change, because the capital required to obtain land, rezone it for traditional residential building, then sell it requires either institutional capital, or small builders doing one-offs for select clients.