The Great Downzoning(worksinprogress.co)
worksinprogress.co
The Great Downzoning
https://worksinprogress.co/issue/the-great-downzoning/
120 comments
Even if you need your home to live in, you can still borrow against your property value, essentially "eating the bricks".
Alternatively, you can use the value of your house as an emergency fund: If you desperately need money, you can move into something smaller, or more distant from the city, and cash out.
If you do neither of these things, your children will inherit the value of your house. Either way, the money you gain are real money, and you actually gain them.
Alternatively, you can use the value of your house as an emergency fund: If you desperately need money, you can move into something smaller, or more distant from the city, and cash out.
If you do neither of these things, your children will inherit the value of your house. Either way, the money you gain are real money, and you actually gain them.
> Even if you need your home to live in, you can still borrow against your property value, essentially "eating the bricks".
This is not a source of money, it's only a source of collateral. Anything you borrow not only has to be paid back, you have to pay interest. And interest rates are higher than they used to be and the standard deduction is now large enough that most people don't get to deduct the interest anymore.
Moreover, it only means anything if the difference in value would have made a difference. If you want to borrow $20,000 then a house with $100,000 in equity is quite sufficient and another $100,000 in equity isn't doing much for you.
> If you desperately need money, you can move into something smaller, or more distant from the city, and cash out.
Houses are much worse for this than e.g. stocks, because they're hard (and extremely inconvenient when you live in it) to sell in a hurry unless you want to a lose a lot of value. A lot of people also can't do this anymore because they got a fixed-rate mortgage before rates went up and now they can't move or they'll have to refinance at the higher rate which would eat most if not more than all of the difference in value.
> If you do neither of these things, your children will inherit the value of your house.
But then they need a place to live and then either can't sell it because they're living in it or get the money from selling it but pay that much again to acquire a different place to live.
This is not a source of money, it's only a source of collateral. Anything you borrow not only has to be paid back, you have to pay interest. And interest rates are higher than they used to be and the standard deduction is now large enough that most people don't get to deduct the interest anymore.
Moreover, it only means anything if the difference in value would have made a difference. If you want to borrow $20,000 then a house with $100,000 in equity is quite sufficient and another $100,000 in equity isn't doing much for you.
> If you desperately need money, you can move into something smaller, or more distant from the city, and cash out.
Houses are much worse for this than e.g. stocks, because they're hard (and extremely inconvenient when you live in it) to sell in a hurry unless you want to a lose a lot of value. A lot of people also can't do this anymore because they got a fixed-rate mortgage before rates went up and now they can't move or they'll have to refinance at the higher rate which would eat most if not more than all of the difference in value.
> If you do neither of these things, your children will inherit the value of your house.
But then they need a place to live and then either can't sell it because they're living in it or get the money from selling it but pay that much again to acquire a different place to live.
It's a housing version of the national debt philosophy, where debt doesn't matter as long as you're outpacing it with growth. If last decade you had $25k HELOC on a 400k house and today you have $50k HELOC on a 800k house, your finances have clearly improved
Except that you still can't sell the house or you won't have a place to live, so they've only improved on paper before you account for the opportunity cost of the higher imputed rent, i.e. the higher cost of living. Meanwhile you could have gotten the $50k HELOC against the $400k house, which was the only part doing anything that would actually affect your life.
You can sell your house and then rent, and that's what old house owners should consider before they have completely exterminated the youth.
If you sell your house and then rent then you'd be paying rent and therefore have direct negative exposure to the high housing costs. That also doesn't create any new supply. You're still living somewhere and therefore still need somewhere to live. For someone else to have a housing unit while you still have one, you have create more, not just play musical chairs.
When you are old maybe you don't need to live in a house that was made for a family? Or you can give your house to your children, and then let them pay your rent. They're already paying their own rent.
Sure, but the only thing available anywhere in your neighbourhood is big houses made for families.
That's the whole missing middle thing, there's luxury pied-à-terre sold to millionaires downtown, and then there's the endless stretch of large single-family houses in the suburbs.
That's the whole missing middle thing, there's luxury pied-à-terre sold to millionaires downtown, and then there's the endless stretch of large single-family houses in the suburbs.
>the standard deduction is now large enough that most people don't get to deduct the interest anymore.
They don't get to itemize their interest deduction, but they still get to deduct from their taxable income an amount equal to or greater than the interest they paid.
The standard deduction was not significantly increased in order to reduce total deductions, it was simply to remove the need to itemize them as often. (And incidentally, to replace the personal exemption deduction which was removed.)
This is in reference to changes to U.S. income tax beginning in 2017.
They don't get to itemize their interest deduction, but they still get to deduct from their taxable income an amount equal to or greater than the interest they paid.
The standard deduction was not significantly increased in order to reduce total deductions, it was simply to remove the need to itemize them as often. (And incidentally, to replace the personal exemption deduction which was removed.)
This is in reference to changes to U.S. income tax beginning in 2017.
> They don't get to itemize their interest deduction, but they still get to deduct from their taxable income an amount equal to or greater than the interest they paid.
But they get to deduct that amount regardless of whether they paid any interest, so if they take the loan they're paying all of the interest themselves relative to what happens if they don't take the loan.
But they get to deduct that amount regardless of whether they paid any interest, so if they take the loan they're paying all of the interest themselves relative to what happens if they don't take the loan.
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I know this solution has you interacting with the disgusting poors, but if you have multiple bedrooms, you can rent them out and have roommates defray the cost of the mortgage and property tax, possibly for a profit. Crazy idea, I know, but just something to keep in mind, should one find themselves in that situation.
> I have to wonder to what extent that's actually true.
It’s fairly easy to do the exercise in many real estate markets. For example, look at recent sales on your favorite real estate platform and find neighborhoods with very different property sizes but otherwise similar features. An easy one is Atherton vs the areas of Menlo Park directly adjacent to it. Effectively identical commutes, literally the same schools, etc. Menlo Park is quite down-zoned by any reasonable standard, but Atherton is very down-zoned and has huge lots. The houses in Atherton look more expensive, but they’re actually dramatically less valuable per unit property size. If you owned property in Atherton and wanted to increase your property value, the best thing you could do is to magically teleport your property a single block away out of Atherton.
It’s fairly easy to do the exercise in many real estate markets. For example, look at recent sales on your favorite real estate platform and find neighborhoods with very different property sizes but otherwise similar features. An easy one is Atherton vs the areas of Menlo Park directly adjacent to it. Effectively identical commutes, literally the same schools, etc. Menlo Park is quite down-zoned by any reasonable standard, but Atherton is very down-zoned and has huge lots. The houses in Atherton look more expensive, but they’re actually dramatically less valuable per unit property size. If you owned property in Atherton and wanted to increase your property value, the best thing you could do is to magically teleport your property a single block away out of Atherton.
You’re picking literally the worst comparison. Atherton is almost impossible to compare to anything because houses like that are so insanely expensive to maintain and top end market size caps the value.
Literally you have no idea what you’re talking about. I mean it’s hard to imagine someone would have written this in good faith it’s so ridiculous.
This seems to be the conundrum in arguments like these — they baffle us because the comments are either quite obviously disingenuous or so radically stupid you lose hope in humanity.
Literally you have no idea what you’re talking about. I mean it’s hard to imagine someone would have written this in good faith it’s so ridiculous.
This seems to be the conundrum in arguments like these — they baffle us because the comments are either quite obviously disingenuous or so radically stupid you lose hope in humanity.
I tend to agree. There might be a big window for someone motivated to get a course "how to maximise the value of your house purchase" into schools to cover all that. If people are going to be greedy and selfish at least they shouldn't be stupid about it, land and housing policy is one of the more consequential things society deals with.
It can go both ways. If a developer wants your house for the land you want big. But if you stay as a house and your neighbour becomes the high rise and you cant then you lose out.
That's assuming there would only be one developer building one new building, which isn't really the idea here.
Not the idea but in reality without government initiated land forced sale you need
1. Someone(s) to agree to sell some land
2. Usually several adjacent plots to have enough space to build - get them all to sell
3. Planning permission
4. Zoning (but we assume that is fixed here)
5. Profit in the proposed development
6. The buyer
So a lot is needed. Now game theoretically it may be better to be nimby.
Also some people wont sell they are sentiment motivated.
1. Someone(s) to agree to sell some land
2. Usually several adjacent plots to have enough space to build - get them all to sell
3. Planning permission
4. Zoning (but we assume that is fixed here)
5. Profit in the proposed development
6. The buyer
So a lot is needed. Now game theoretically it may be better to be nimby.
Also some people wont sell they are sentiment motivated.
> Someone(s) to agree to sell some land
If you rezone some area, there are already going to be some number of units on the market to begin with. Then add developers willing to pay more than the current market price because it has become profitable and you get even more.
> Usually several adjacent plots to have enough space to build - get them all to sell
This is by no means necessary. You buy one plot of land, replace a single house with a 5-story condo containing 10-20 units. The whole idea is that you don't need a lot of land but rather taller buildings.
> Planning permission
This is the same premise as zoning.
> Profit in the proposed development
If you can buy a unit for e.g. $500,000 and build 20 units that each sell for $350,000, that's likely to be profitable.
> The buyer
The problem we're trying to solve is the huge amount of unmet demand for housing. If you ran out of buyers the problem is solved.
If you rezone some area, there are already going to be some number of units on the market to begin with. Then add developers willing to pay more than the current market price because it has become profitable and you get even more.
> Usually several adjacent plots to have enough space to build - get them all to sell
This is by no means necessary. You buy one plot of land, replace a single house with a 5-story condo containing 10-20 units. The whole idea is that you don't need a lot of land but rather taller buildings.
> Planning permission
This is the same premise as zoning.
> Profit in the proposed development
If you can buy a unit for e.g. $500,000 and build 20 units that each sell for $350,000, that's likely to be profitable.
> The buyer
The problem we're trying to solve is the huge amount of unmet demand for housing. If you ran out of buyers the problem is solved.
> If you can buy a unit for e.g. $500,000 and build 20 units that each sell for $350,000, that's likely to be profitable
True, forgetting construction costs and assuming you have a gun to point at the land seller's head to sell cheap.
> This is the same premise as zoning.
No you need to get approval to build the thing. Zoning is one aspect. Necessary but not sufficent.
> This is by no means necessary. You buy one plot of land, replace a single house with a 5-story condo containing 10-20 units. The whole idea is that you don't need a lot of land but rather taller buildings.
Depends. Maybe quarter acre is enough but typical burbs you may have 200-400sqm. Depends what country I guess.
Hard to do this individually. And profitably. That is why in London you see long streets of appartments 5 stories high. Or maybe they were houses but already terraces so easy to convert. It will all depend on the specifics but most often you need to join lots unless fortunate to have a big plot of land or something that only requires repartitioning.
> The problem we're trying to solve is the huge amount of unmet demand for housing. If you ran out of buyers the problem is solved.
I meant buyer of the land. Not the end product.
True, forgetting construction costs and assuming you have a gun to point at the land seller's head to sell cheap.
> This is the same premise as zoning.
No you need to get approval to build the thing. Zoning is one aspect. Necessary but not sufficent.
> This is by no means necessary. You buy one plot of land, replace a single house with a 5-story condo containing 10-20 units. The whole idea is that you don't need a lot of land but rather taller buildings.
Depends. Maybe quarter acre is enough but typical burbs you may have 200-400sqm. Depends what country I guess.
Hard to do this individually. And profitably. That is why in London you see long streets of appartments 5 stories high. Or maybe they were houses but already terraces so easy to convert. It will all depend on the specifics but most often you need to join lots unless fortunate to have a big plot of land or something that only requires repartitioning.
> The problem we're trying to solve is the huge amount of unmet demand for housing. If you ran out of buyers the problem is solved.
I meant buyer of the land. Not the end product.
> True, forgetting construction costs and assuming you have a gun to point at the land seller's head to sell cheap.
$500k is more than the median US house price and the construction company is in the business of doing construction. The construction costs are their profit.
> No you need to get approval to build the thing. Zoning is one aspect. Necessary but not sufficent.
The premise is that you're going to reform planning and zoning to allow new construction. That implies changing the rules so that the planning people are going to approve it.
> Maybe quarter acre is enough but typical burbs you may have 200-400sqm.
The lot size? A lot of these places are currently a single house on a one acre lot.
> I meant buyer of the land.
The buyer of the land is the construction company.
$500k is more than the median US house price and the construction company is in the business of doing construction. The construction costs are their profit.
> No you need to get approval to build the thing. Zoning is one aspect. Necessary but not sufficent.
The premise is that you're going to reform planning and zoning to allow new construction. That implies changing the rules so that the planning people are going to approve it.
> Maybe quarter acre is enough but typical burbs you may have 200-400sqm.
The lot size? A lot of these places are currently a single house on a one acre lot.
> I meant buyer of the land.
The buyer of the land is the construction company.
Neighbours can get together to sell their land together, then you can set minimum prices etc. Of course, it requires only one owner not to join for this to not work, but depending on their location they might experience a lower QoL due to construction and a changed neighbourhood if their neighbours sell.
I feel it’s a bit disingenuous to discuss that a developer might pay more for a lot with a house on it, to build more houses, but you don’t really touch on, at all, how much the resulting housing might cost. Surely 20 units on a single lot will be cheaper than the single family house.
Now you have potentially 20 families, or at least 20 individuals, paying taxes, participating in the local economy, etc instead of just one single family. Lots of economic benefits to consider here but saying “downzoning good, actually” because a developer might pay more? Idk. seems pretty poorly thought out.
Now you have potentially 20 families, or at least 20 individuals, paying taxes, participating in the local economy, etc instead of just one single family. Lots of economic benefits to consider here but saying “downzoning good, actually” because a developer might pay more? Idk. seems pretty poorly thought out.
> Surely 20 units on a single lot will be cheaper than the single family house.
Those units will cost less -- largely because at scale they're resulting in more housing supply -- but the detached houses will decline in value in terms of housing but increase in value in terms of land because you can now build more on the lot.
> saying “downzoning good, actually” because a developer might pay more?
The argument is the opposite. Downzoning is bad -- even for existing homeowners -- because a developer would otherwise pay them more for their land than they'd be losing in the value of their house.
Those units will cost less -- largely because at scale they're resulting in more housing supply -- but the detached houses will decline in value in terms of housing but increase in value in terms of land because you can now build more on the lot.
> saying “downzoning good, actually” because a developer might pay more?
The argument is the opposite. Downzoning is bad -- even for existing homeowners -- because a developer would otherwise pay them more for their land than they'd be losing in the value of their house.
I wonder about this. There's all this noise about a great housing shortage in San Francisco, but the population of SF is up only 65,000 people in 10 years. There are a lot more tall buildings. This may be a monopoly overpricing situation rather than an actual shortage. There's a huge amount of empty office space.
Remember, the world passed "peak baby" back in 2013. Population is leveling off in the developed world.
Remember, the world passed "peak baby" back in 2013. Population is leveling off in the developed world.
Population growth is reduced by a housing shortage because people who otherwise want to move in can't if there aren't units available for them to move in to.
Moreover, who is supposed to have a monopoly on housing in San Francisco? Is there any single entity that owns even as much as 1% of all the housing in the city? And even if there was, wouldn't building more housing still fix it, because the more you build the more you dilute their monopoly?
Moreover, who is supposed to have a monopoly on housing in San Francisco? Is there any single entity that owns even as much as 1% of all the housing in the city? And even if there was, wouldn't building more housing still fix it, because the more you build the more you dilute their monopoly?
> Is there any single entity that owns even as much as 1% of all the housing in the city?
Yes. 12 big landlords own a majority of SF bay area property.[1] The San Francisco Chronicle has an online map, but it's behind their paywall.
[1] https://www.fastcompany.com/90792419/12-mega-landlords-own-m...
Yes. 12 big landlords own a majority of SF bay area property.[1] The San Francisco Chronicle has an online map, but it's behind their paywall.
[1] https://www.fastcompany.com/90792419/12-mega-landlords-own-m...
The title of the link indeed says "the majority of the San Francisco Bay Area" but it also says that the largest of them owns 293 buildings, so for twelve times that to be a majority there would have to be no more than about five thousand total properties in the San Francisco Bay Area.
Meanwhile the Chronicle says there are about 2.3 million total properties, I couldn't find them repeating the claim that those 12 landlords represent a majority but they did say that "this list of 12 includes some of the region’s major power players in residential real estate, housing tens of thousands of families". Which I wouldn't expect to be a majority of the >7 million people who live there.
Meanwhile the Chronicle says there are about 2.3 million total properties, I couldn't find them repeating the claim that those 12 landlords represent a majority but they did say that "this list of 12 includes some of the region’s major power players in residential real estate, housing tens of thousands of families". Which I wouldn't expect to be a majority of the >7 million people who live there.
That is not by any reasonable definition a monopoly. 12 landowners owning more than 50% of the property isn’t even an oligopoly.
> This may be a monopoly overpricing situation rather than an actual shortage.
An actual shortage is characterized by prices being prevented from rising. It is already understood that "shortage" is being used colloquially here.
An actual shortage is characterized by prices being prevented from rising. It is already understood that "shortage" is being used colloquially here.
I noticed there is a split how this topic is discussed in (center-)left and (center-)right circles.
The right generally takes as a given that the cause of the problem (if there is a problem at all) is that there is not enough housing and we just have to build more.
The left argues that in we in fact do have enough units that could be used for housing (or at least the situation is not as clear-cut), but that other factors prevent them to be available at affordable prices, like the effects of extreme income and wealth inequality on the market.
Personally, I think the "left-wing" explanation makes more sense - at least I've never understood where that sudden shortage of physical housing is supposed to have come from. We neither had a population explosion, nor a war or catastrophe that would have destroyed a lot of houses. So then why would there have been "enough" housing in the past but not anymore today?
The right generally takes as a given that the cause of the problem (if there is a problem at all) is that there is not enough housing and we just have to build more.
The left argues that in we in fact do have enough units that could be used for housing (or at least the situation is not as clear-cut), but that other factors prevent them to be available at affordable prices, like the effects of extreme income and wealth inequality on the market.
Personally, I think the "left-wing" explanation makes more sense - at least I've never understood where that sudden shortage of physical housing is supposed to have come from. We neither had a population explosion, nor a war or catastrophe that would have destroyed a lot of houses. So then why would there have been "enough" housing in the past but not anymore today?
About 14 thousand people move to Prague yearly (netto), but construction hasn't kept pace by any means; Czech building permits are a bureaucratic hell on Earth - hello fighting a 10 year paper war over a banal block of flats!
By pure mathematics, there must be a shortage, and there indeed is.
There isn't any shortage in Ostrava where I am from, because the city lost 40 thousand people since the 1990s. But there is a shortage of well-paid jobs.
By pure mathematics, there must be a shortage, and there indeed is.
There isn't any shortage in Ostrava where I am from, because the city lost 40 thousand people since the 1990s. But there is a shortage of well-paid jobs.
Because people want to live in cities again. Lot of people do not want to live in suburbs / exurbs. they want walkability. bikability. community. car-lite living. It’s high in demand, short on supply.
> Personally, I think the "left-wing" explanation makes more sense - at least I've never understood where that sudden shortage of physical housing is supposed to have come from.
It comes from construction dropping far below what was necessary to keep up with historical utilization in proportion to population after the Great Recession and, while it has recovered above the amount needed to keep up, it hasn't been far enough ahead for long enough to cover the accumulated post-GR deficit.
While this is a couple years old, it illustrates the issue: https://www.axios.com/2023/12/16/housing-market-why-homes-ex...
(And the national story undersrates the problem going on in lots of in-demand cities, which weren't keeping up with local need before the broader collapse of the GR.)
It comes from construction dropping far below what was necessary to keep up with historical utilization in proportion to population after the Great Recession and, while it has recovered above the amount needed to keep up, it hasn't been far enough ahead for long enough to cover the accumulated post-GR deficit.
While this is a couple years old, it illustrates the issue: https://www.axios.com/2023/12/16/housing-market-why-homes-ex...
(And the national story undersrates the problem going on in lots of in-demand cities, which weren't keeping up with local need before the broader collapse of the GR.)
Thanks for the pointers. That argument makes some sense actually.
However that would still not explain the existing vacancies:
https://www.ourneighborhoodvoices.com/sfgate-there-are-more-...
https://www.axios.com/local/san-francisco/2025/06/27/office-...
OT, I found a look at the US population growth trends quite interesting, especially Figure 2 and the apparent massive explosion in immigration in the last years. Not sure what exactly is going on there.
https://www.census.gov/library/stories/2024/12/population-es...
However that would still not explain the existing vacancies:
https://www.ourneighborhoodvoices.com/sfgate-there-are-more-...
https://www.axios.com/local/san-francisco/2025/06/27/office-...
OT, I found a look at the US population growth trends quite interesting, especially Figure 2 and the apparent massive explosion in immigration in the last years. Not sure what exactly is going on there.
https://www.census.gov/library/stories/2024/12/population-es...
There might not be a housing shortage on the North American continent, but that doesn't help because people want to live in New York, not upper Saskatchewan
You may personally prefer New York, but the data shows much greater population growth in Saskatchewan.
But presumably pricing plays a role. If the cost of housing between NYC and Saskatchewan was comparable I imagine the former would have the higher growth rate.
If you change any attribute about these places at random then the migration patterns are likely to change, but that's a silly way to look at it. The comparison is around what is, not what could be in some other magical universe.
Google suggests a whopping 15% if SF homes are empty.
London by comparison is about 2.5%
Why is SFs figure so high. Why are people holding on to unproductive assets, paying to maintain them.
London by comparison is about 2.5%
Why is SFs figure so high. Why are people holding on to unproductive assets, paying to maintain them.
I hesitate because there's not a lot of data out there. Are those being measured the same way? Are they even real measurements and not just repeated talking points...?
Maybe land banking?
You have to look at the average household size and number of children, not just population.
A world where most households are man + woman + 0..3 children is very different than one where most households are 1..2 people + cat/dog. The latter demands far more housing than the former, even when populations are otherwise equal.
A population of 10 million singles demand 4 times more "housing units" than a population of 10 million people in 4-person families.
This is what makes immigration-driven population growth so pernicious compared to childbirth-driven. The family structures you end up with are completely different.
A world where most households are man + woman + 0..3 children is very different than one where most households are 1..2 people + cat/dog. The latter demands far more housing than the former, even when populations are otherwise equal.
A population of 10 million singles demand 4 times more "housing units" than a population of 10 million people in 4-person families.
This is what makes immigration-driven population growth so pernicious compared to childbirth-driven. The family structures you end up with are completely different.
> A population of 10 million singles demand 4 times more "housing units" than a population of 10 million people in 4-person families.
Those housing units are not interchangeable. Families often want extra bedrooms, and units with extra bedrooms are frequently sorely lacking.
This is one thing that is very strikingly different in different markets. A lot of US metros have a fair amount of new housing but almost none with even two bedrooms per unit, let alone three. In a place like Taiwan, there are similarly absurd housing prices, but the new dense developments have four- and five-bedroom units.
Those housing units are not interchangeable. Families often want extra bedrooms, and units with extra bedrooms are frequently sorely lacking.
This is one thing that is very strikingly different in different markets. A lot of US metros have a fair amount of new housing but almost none with even two bedrooms per unit, let alone three. In a place like Taiwan, there are similarly absurd housing prices, but the new dense developments have four- and five-bedroom units.
I don’t have any data or links to contribute, but my gut feeling is that this effect would be dwarfed by population movement, specifically urbanisation - if rural areas are emptying out as everyone moves to the city, you can get the same patterns (e.g. reduced housing supply in cities and all the flow on effects from that) without any change in total population.
Where I live in France there was a big relaxation in building permits in the 50s to 70s, and we are dealing with these projects badly designed (because of the lack of oversight) today. Neighborhoods that are urban hell, disfigured city centers with giant hotels 5 times higher than other buildings, etc.
With better planning the same capacity could have been added but with way better quality of life.
With better planning the same capacity could have been added but with way better quality of life.
What you need is to require new construction to have a certain density along with building standards (sunlight, insulation, etc.).
Just deregulating exposes the land to the whim of the developer’s good will — trusting them not to get the most bang for the buck out of building a slum, which is a fickle guarantee.
If there’s no short term profitability, public sector needs to step in. Housing is infrastructure, it’s crucial to the land’s growth.
Just deregulating exposes the land to the whim of the developer’s good will — trusting them not to get the most bang for the buck out of building a slum, which is a fickle guarantee.
If there’s no short term profitability, public sector needs to step in. Housing is infrastructure, it’s crucial to the land’s growth.
We should distinguish between technical standards and zoning.
You can enforce technical standards so that no "slum-like" building gets built, and already in the planing phase. Zoning is more about precluding certain type of buildings, or maybe any new buildings, altogether.
You can enforce technical standards so that no "slum-like" building gets built, and already in the planing phase. Zoning is more about precluding certain type of buildings, or maybe any new buildings, altogether.
If every developer was able to build as much housing as they ever wanted, the quality would go up through competition.
In pretty much every other sector of the economy, the government regulates safety, and quality comes via competition. Housing should be no different.
But because we've artificially throttled the amount of housing that can be built, the best way to improve profits is to push down the quality as the buyers don't really have an alternative
In pretty much every other sector of the economy, the government regulates safety, and quality comes via competition. Housing should be no different.
But because we've artificially throttled the amount of housing that can be built, the best way to improve profits is to push down the quality as the buyers don't really have an alternative
I'm not an economist but my armchair opinion thinks you're wrong about quality going up; competition is about driving pricing down and undercutting others, cutting corners as much as possible.
Take Amazon or the Chinese webshops, they've flooded the market with products that do the same thing but cheaper, but whose quality is way lower.
Take the acquisitions of e.g. power tool brands by investors, who then use the brand's brand awareness and quality inertia to cut costs and boost their profit margin.
Take hotels, which used to feel luxurious but which have over time been redesigned to require minimal maintenance and personnel.
The only competitive market where they try to one-up each other on quality is aimed at the rich where money is not an issue. The middle ground is disappearing.
Take Amazon or the Chinese webshops, they've flooded the market with products that do the same thing but cheaper, but whose quality is way lower.
Take the acquisitions of e.g. power tool brands by investors, who then use the brand's brand awareness and quality inertia to cut costs and boost their profit margin.
Take hotels, which used to feel luxurious but which have over time been redesigned to require minimal maintenance and personnel.
The only competitive market where they try to one-up each other on quality is aimed at the rich where money is not an issue. The middle ground is disappearing.
I would expect the competition to work the same way it does in laptops, cars or food: producing everything from cheapest-still-legal options to outright luxury. We have this sort of choice in most sectors of the economy.
BTW A mediocre apartment in your name is still an apartment. I grew up in one, but in our then-relatively-precarious family situation, the fact that we weren't renting and no one could just throw us out made a lot of other problems and crises way, way more bearable. Even though the bathroom was subpar and the kitchen horribly old.
We shouldn't be dismissive of lower quality products if they still can provide value to their owners.
BTW A mediocre apartment in your name is still an apartment. I grew up in one, but in our then-relatively-precarious family situation, the fact that we weren't renting and no one could just throw us out made a lot of other problems and crises way, way more bearable. Even though the bathroom was subpar and the kitchen horribly old.
We shouldn't be dismissive of lower quality products if they still can provide value to their owners.
The problem is housing, in general, is a an inelastic good - we can't just apply free market thinking to it, it doesn't work. For a few reasons:
1. It takes a really long time to develop housing in a meaningful way, like on the order of decades to build communities.
2. People don't actually really choose where to live, it's a lot like hospitals. You live where your job is, which means the more economically strong a place is (city) the more housing you need. Which is why cities are dense. It might sound obvious, but it's not like choosing which brand of cereal to buy.
1. It takes a really long time to develop housing in a meaningful way, like on the order of decades to build communities.
2. People don't actually really choose where to live, it's a lot like hospitals. You live where your job is, which means the more economically strong a place is (city) the more housing you need. Which is why cities are dense. It might sound obvious, but it's not like choosing which brand of cereal to buy.
Competition would have that effect… in a perfect market, which is a theoretical construct. Especially in context of urbanism, building an abomination can hurt the entire community and takes space from proper construction.
Here my thoughts about ideal markets https://news.ycombinator.com/context?id=46085880
Here my thoughts about ideal markets https://news.ycombinator.com/context?id=46085880
> urban hell, disfigured city centers with giant hotels 5 times higher than other buildings, etc.
you have quite a breezy perception of hell. does something like this actually bother anyone with a brain who chose to live in a city?
you have quite a breezy perception of hell. does something like this actually bother anyone with a brain who chose to live in a city?
> same capacity could have been added
That’s not at all likely.
That’s not at all likely.
The one thing that makes assumptions about free market forces miss the mark is the fact that ideal markets don’t exist in the real world.
I case of housing, in the US, we’re as far from free market as possible. So making assumptions about what will happen if we build more based on a naive supply and demand model isn’t going to work.
A paradigm shift is to think in terms of power distribution and policy incentives. Why would a homeowner support zoning reforms? Even if they become a minority, will they be able to get the others to not vote or vote against their own interests?
The system caps its own growth.
I case of housing, in the US, we’re as far from free market as possible. So making assumptions about what will happen if we build more based on a naive supply and demand model isn’t going to work.
A paradigm shift is to think in terms of power distribution and policy incentives. Why would a homeowner support zoning reforms? Even if they become a minority, will they be able to get the others to not vote or vote against their own interests?
The system caps its own growth.
The housing market in the US is extremely competitive. Major cities have hundreds of thousands if not millions of competing landlords and a similar number of owner-occupied units.
The supply constraint isn't that Comcast and AT&T each own half of the land and you can only get it from one of them, it's that the government effectively prohibits building more, so all the competing construction companies who want to increase supply because that's what makes them money are unable to do it because it's prohibited by law.
> Why would a homeowner support zoning reforms?
Because zoning reforms that allow higher density may lower the value of the house but increase the value of the land, and homeowners of single-family homes have a high ratio of land to house. And because they lower cost of living and lower crime and they like paying less for things and not getting robbed.
Or because they have a small house but need a bigger house, and then higher prices hurt them. Or because they have a bigger house and need a smaller house, in which case they're about to sell it and it's better for them to add a bunch of developers to the bidding who want to build more on the lot and then cash out before the new developments come onto the market. Or because they live in city B and want to move to city A where housing is more expensive, and then they would support state or national-level policies to reduce housing scarcity for the same reason as the person who needs a bigger house.
The supply constraint isn't that Comcast and AT&T each own half of the land and you can only get it from one of them, it's that the government effectively prohibits building more, so all the competing construction companies who want to increase supply because that's what makes them money are unable to do it because it's prohibited by law.
> Why would a homeowner support zoning reforms?
Because zoning reforms that allow higher density may lower the value of the house but increase the value of the land, and homeowners of single-family homes have a high ratio of land to house. And because they lower cost of living and lower crime and they like paying less for things and not getting robbed.
Or because they have a small house but need a bigger house, and then higher prices hurt them. Or because they have a bigger house and need a smaller house, in which case they're about to sell it and it's better for them to add a bunch of developers to the bidding who want to build more on the lot and then cash out before the new developments come onto the market. Or because they live in city B and want to move to city A where housing is more expensive, and then they would support state or national-level policies to reduce housing scarcity for the same reason as the person who needs a bigger house.
They are competing, but not for the customer but for the land, which appreciates. Remember, there are different forms of competition.
The "supply constraint" is that the landowners don’t want to change zoning laws, and that space around big cities is limited. The government doesn’t act of it’s own initiative, it represents people.
If your logic held, it should be the homeowners pushing for density. Real world disagrees with your assessment, but you seem to be doubling down on it.
Why not update your model?
The "supply constraint" is that the landowners don’t want to change zoning laws, and that space around big cities is limited. The government doesn’t act of it’s own initiative, it represents people.
If your logic held, it should be the homeowners pushing for density. Real world disagrees with your assessment, but you seem to be doubling down on it.
Why not update your model?
> The "supply constraint" is that the landowners don’t want to change zoning laws
The only ones who are acting in their own interest are the ones who own land that already contains a tall building and who either don't live in the area or are so rich they aren't affected by local cost of living, and they're quite outnumbered by everyone else.
> If your logic held, it should be the homeowners pushing for density.
It's possible and even common for people to be misinformed about the effects of a policy and then vote against their own interests.
The only ones who are acting in their own interest are the ones who own land that already contains a tall building and who either don't live in the area or are so rich they aren't affected by local cost of living, and they're quite outnumbered by everyone else.
> If your logic held, it should be the homeowners pushing for density.
It's possible and even common for people to be misinformed about the effects of a policy and then vote against their own interests.
So let's say for a moment that you're right and such a policy would be beneficial to the landowners.
I'm sure you'll appreciate that it's a great concession — after all, it assumes that they don't have non-financial motivations (like living in a non-crowded area, or preferring the burbs), and that the economics of building high will work out (individual flats will be multiple times more affordable than the current houses, but the land will be more expensive than it is now). There won't be traffic issues because of more people commuting from the same area. The quality of life will stay the same. This frees you from having to argue against all homeowners in the country and labeling them as irrational.
It still doesn't matter if they're wrong or right. They have the power, and given the environment they're in, this is what they'll decide. The government can't do anything here to relax the laws.
I'm sure you'll appreciate that it's a great concession — after all, it assumes that they don't have non-financial motivations (like living in a non-crowded area, or preferring the burbs), and that the economics of building high will work out (individual flats will be multiple times more affordable than the current houses, but the land will be more expensive than it is now). There won't be traffic issues because of more people commuting from the same area. The quality of life will stay the same. This frees you from having to argue against all homeowners in the country and labeling them as irrational.
It still doesn't matter if they're wrong or right. They have the power, and given the environment they're in, this is what they'll decide. The government can't do anything here to relax the laws.
> it assumes that they don't have non-financial motivations (like living in a non-crowded area, or preferring the burbs)
Why wouldn't the people who prefer this just take the developer's money, buy another house somewhere that hasn't been rezoned and pocket thousands of dollars?
> that the economics of building high will work out (individual flats will be multiple times more affordable than the current houses, but the land will be more expensive than it is now)
Individual flats will be somewhat more affordable than they are now because supply will increase. They don't have to be "multiple times more affordable" to cost some double-digit percentage less than they do now. Land will be worth more than it is now because you can build taller buildings on it so there will be new demand for land from the people increasing the supply of housing.
> There won't be traffic issues because of more people commuting from the same area.
Higher density areas allow mass transit to become viable, which reduces car traffic.
> They have the power, and given the environment they're in, this is what they'll decide. The government can't do anything here to relax the laws.
To begin with, if you convince them then they vote for something else.
Moreover, the status quo is self-destructive. As prices go up, fewer people can afford a home, and then if it's homeowners voting for the status quo, they become a minority and get overruled by the growing number of people who can't afford housing.
Why wouldn't the people who prefer this just take the developer's money, buy another house somewhere that hasn't been rezoned and pocket thousands of dollars?
> that the economics of building high will work out (individual flats will be multiple times more affordable than the current houses, but the land will be more expensive than it is now)
Individual flats will be somewhat more affordable than they are now because supply will increase. They don't have to be "multiple times more affordable" to cost some double-digit percentage less than they do now. Land will be worth more than it is now because you can build taller buildings on it so there will be new demand for land from the people increasing the supply of housing.
> There won't be traffic issues because of more people commuting from the same area.
Higher density areas allow mass transit to become viable, which reduces car traffic.
> They have the power, and given the environment they're in, this is what they'll decide. The government can't do anything here to relax the laws.
To begin with, if you convince them then they vote for something else.
Moreover, the status quo is self-destructive. As prices go up, fewer people can afford a home, and then if it's homeowners voting for the status quo, they become a minority and get overruled by the growing number of people who can't afford housing.
> Why wouldn't the people who prefer this just take the developer's money, buy another house somewhere that hasn't been rezoned and pocket thousands of dollars?
This one is obvious - they want to live close to where they've lived so far, and they want to stay in their house. Rezoning will inflate the house prices in the vicinity (because of the effect that you're describing of people moving close) so the residents won't feel confident that they can keep affording that area, and won't be pushed out into the countryside.
> Individual flats will be somewhat more affordable than they are now because supply will increase.
This works if the supply will overwhelmingly (in the scale of the entire metro), exceed demand. Here multiple things can happen. One is that demand increases with supply, prices of the apartments go up and match the prices of houses, and prices of houses will grow like you predict. The other one is that people don't want to live in a mixed zone neighborhood, the developer won't make money, so they'll build cheap slum housing instead of normal housing, and the value of the houses in the neighborhood decreases with the new construction. This really depends on the real world situation, and can't be accurately predicted with a supply and demand model.
> Higher density areas allow mass transit to become viable, which reduces car traffic.
People from the burbs don't want to take the bus, so they won't vote for that.
> To begin with, if you convince them then they vote for something else.
Good luck with that, but if you look back in 10 years, we'll be in the same spot.
> Moreover, the status quo is self-destructive. As prices go up, fewer people can afford a home, and then if it's homeowners voting for the status quo, they become a minority and get overruled by the growing number of people who can't afford housing.
This assumes the majority will vote according to their interests. They likely won't. The power to manufacture consent is still with the owning class.
This one is obvious - they want to live close to where they've lived so far, and they want to stay in their house. Rezoning will inflate the house prices in the vicinity (because of the effect that you're describing of people moving close) so the residents won't feel confident that they can keep affording that area, and won't be pushed out into the countryside.
> Individual flats will be somewhat more affordable than they are now because supply will increase.
This works if the supply will overwhelmingly (in the scale of the entire metro), exceed demand. Here multiple things can happen. One is that demand increases with supply, prices of the apartments go up and match the prices of houses, and prices of houses will grow like you predict. The other one is that people don't want to live in a mixed zone neighborhood, the developer won't make money, so they'll build cheap slum housing instead of normal housing, and the value of the houses in the neighborhood decreases with the new construction. This really depends on the real world situation, and can't be accurately predicted with a supply and demand model.
> Higher density areas allow mass transit to become viable, which reduces car traffic.
People from the burbs don't want to take the bus, so they won't vote for that.
> To begin with, if you convince them then they vote for something else.
Good luck with that, but if you look back in 10 years, we'll be in the same spot.
> Moreover, the status quo is self-destructive. As prices go up, fewer people can afford a home, and then if it's homeowners voting for the status quo, they become a minority and get overruled by the growing number of people who can't afford housing.
This assumes the majority will vote according to their interests. They likely won't. The power to manufacture consent is still with the owning class.
> they want to live close to where they've lived so far, and they want to stay in their house.
Which they can still do. But they can also get a very similar house a few miles down the road and simultaneously get a large amount of money to put in their pocket.
> Rezoning will inflate the house prices in the vicinity (because of the effect that you're describing of people moving close) so the residents won't feel confident that they can keep affording that area, and won't be pushed out into the countryside.
If they're homeowners then the price they paid for housing was set when they bought their house, so they can't be pushed out. If they're renting then the value of the land going up isn't that relevant when the thing they care about is the value of a housing unit, which would go down as more units can be built on the same land, and thereby make it easier for them to stay.
> One is that demand increases with supply, prices of the apartments go up and match the prices of houses, and prices of houses will grow like you predict.
But that only makes further development even more profitable and creates even more supply.
> The other one is that people don't want to live in a mixed zone neighborhood, the developer won't make money, so they'll build cheap slum housing instead of normal housing
This is contrary to what has been observed in practice. People are willing to pay a premium to live in areas with mixed zoning and slums are created when existing neighborhoods decline for unrelated reasons and then landlords conclude that saving costs through lack of maintenance would be more profitable than trying to get blood from a stone.
The primary instance of slums being created by new housing construction are government housing projects which explicitly limit residents to people in poverty. That was a failed experiment and we shouldn't do it anymore.
> People from the burbs don't want to take the bus, so they won't vote for that.
It's not them who take the bus. The bus stops at the new condo tower so all the people who moved into it aren't clogging up your roads.
> The power to manufacture consent is still with the owning class.
Manufacturing consent requires bread and circuses. You make people enough homeless and miserable and you're going to get riots.
Which they can still do. But they can also get a very similar house a few miles down the road and simultaneously get a large amount of money to put in their pocket.
> Rezoning will inflate the house prices in the vicinity (because of the effect that you're describing of people moving close) so the residents won't feel confident that they can keep affording that area, and won't be pushed out into the countryside.
If they're homeowners then the price they paid for housing was set when they bought their house, so they can't be pushed out. If they're renting then the value of the land going up isn't that relevant when the thing they care about is the value of a housing unit, which would go down as more units can be built on the same land, and thereby make it easier for them to stay.
> One is that demand increases with supply, prices of the apartments go up and match the prices of houses, and prices of houses will grow like you predict.
But that only makes further development even more profitable and creates even more supply.
> The other one is that people don't want to live in a mixed zone neighborhood, the developer won't make money, so they'll build cheap slum housing instead of normal housing
This is contrary to what has been observed in practice. People are willing to pay a premium to live in areas with mixed zoning and slums are created when existing neighborhoods decline for unrelated reasons and then landlords conclude that saving costs through lack of maintenance would be more profitable than trying to get blood from a stone.
The primary instance of slums being created by new housing construction are government housing projects which explicitly limit residents to people in poverty. That was a failed experiment and we shouldn't do it anymore.
> People from the burbs don't want to take the bus, so they won't vote for that.
It's not them who take the bus. The bus stops at the new condo tower so all the people who moved into it aren't clogging up your roads.
> The power to manufacture consent is still with the owning class.
Manufacturing consent requires bread and circuses. You make people enough homeless and miserable and you're going to get riots.
It’s a magical policy under that makes better off both the owner of a small house who needs a bigger house and the owner of a large house who needs a smaller house.
If the owner of the large house would be better off by the presence of bids by developers, wouldn’t that tend (strongly) to work against the interests of the owner of the small house seeking a larger house?
It might work to help the owner of a small house who wants to move into a larger apartment or condominium.
If the owner of the large house would be better off by the presence of bids by developers, wouldn’t that tend (strongly) to work against the interests of the owner of the small house seeking a larger house?
It might work to help the owner of a small house who wants to move into a larger apartment or condominium.
> It’s a magical policy under that makes better off both the owner of a small house who needs a bigger house and the owner of a large house who needs a smaller house.
Because the person who needs a smaller house sells the bigger house immediately, the developer turns it into ten bigger houses (or condos), and that increases the supply of bigger units for the person who needs a bigger unit.
> If the owner of the large house would be better off by the presence of bids by developers, wouldn’t that tend (strongly) to work against the interests of the owner of the small house seeking a larger house?
The developer doesn't care about the size of the existing structure because they're going to knock it down and build a taller one, so then the smaller house increases in value by as much as the bigger one because a developer would pay that much more for that one too since what they really want is the land. In which case what happens is that the developer buys the smaller house and then that person has the extra money to outbid some other developer for the bigger house and they both win.
> It might work to help the owner of a small house who wants to move into a larger apartment or condominium.
It works even if they prefer a bigger house, because there are others who have no preference and only want a bigger space, and then some of the demand for larger units gets satisfied by the new condos and frees up houses to the people who specifically want a house.
Notice that if you're turning one house into 10 or 20 condos, the supply of houses is only going down by 1 but the unsatisfied demand for the remaining stock is going down by 10 or 20.
Because the person who needs a smaller house sells the bigger house immediately, the developer turns it into ten bigger houses (or condos), and that increases the supply of bigger units for the person who needs a bigger unit.
> If the owner of the large house would be better off by the presence of bids by developers, wouldn’t that tend (strongly) to work against the interests of the owner of the small house seeking a larger house?
The developer doesn't care about the size of the existing structure because they're going to knock it down and build a taller one, so then the smaller house increases in value by as much as the bigger one because a developer would pay that much more for that one too since what they really want is the land. In which case what happens is that the developer buys the smaller house and then that person has the extra money to outbid some other developer for the bigger house and they both win.
> It might work to help the owner of a small house who wants to move into a larger apartment or condominium.
It works even if they prefer a bigger house, because there are others who have no preference and only want a bigger space, and then some of the demand for larger units gets satisfied by the new condos and frees up houses to the people who specifically want a house.
Notice that if you're turning one house into 10 or 20 condos, the supply of houses is only going down by 1 but the unsatisfied demand for the remaining stock is going down by 10 or 20.
> It works even if they prefer a bigger house, because there are others who have no preference and only want a bigger space
People looking to open a new office might fall into this category, but I have serious doubts that enough people fall into the category you describe to leave the owner of the smaller house better off because how larger houses are too-low priced.
People looking to open a new office might fall into this category, but I have serious doubts that enough people fall into the category you describe to leave the owner of the smaller house better off because how larger houses are too-low priced.
Housing in higher-density areas currently has a higher cost per square foot than it does in the suburbs, implying that unmet demand for it is currently higher than demand for suburban real estate. You'd have to build enough to make that not the case before anyone who doesn't want to live in a condo would have any reason to choose it over a similarly-sized house. And if you actually managed that then it would be from building enough condos to make them more affordable, which would start attracting some people with only a weak preference for a house and still make them better off because they'd get lower housing costs. Meanwhile the people with a strong preference for a house would just pay the extra money for a house, which in the long term would still be less than they're paying now because there wouldn't be so much housing scarcity.
> less than they're paying now because there wouldn't be so much housing scarcity
And now we’ve circled back to where the owner of a big house looking to downside isn’t made better off.
Housing policy is complex and tied up in economics and emotions. Arguing (as you seem to be) that all users of housing are made better off by a policy change that’s so simple and obvious that no one has tried it is going to leave many people more skeptical of your idea, not less. Arguing “these users are made better off at the expense of these other users is probably more accurate and more persuasive”; if you can’t find anyone made worse off, it’s possible you’ve cracked a problem facing society for well over a century, but it’s more likely that you just have thought/looked hard enough.
And now we’ve circled back to where the owner of a big house looking to downside isn’t made better off.
Housing policy is complex and tied up in economics and emotions. Arguing (as you seem to be) that all users of housing are made better off by a policy change that’s so simple and obvious that no one has tried it is going to leave many people more skeptical of your idea, not less. Arguing “these users are made better off at the expense of these other users is probably more accurate and more persuasive”; if you can’t find anyone made worse off, it’s possible you’ve cracked a problem facing society for well over a century, but it’s more likely that you just have thought/looked hard enough.
> And now we’ve circled back to where the owner of a big house looking to downside isn’t made better off.
Except that by then they've already sold it. There is a time delay between when the area is rezoned and when the new construction the rezoning allows has been able to bring sufficient new supply into the market. This is long enough for the existing homeowner to unload their house onto a developer at the premium that exists while the scarcity is still high.
> Arguing (as you seem to be) that all users of housing are made better off by a policy change
It isn't all users. For example, if you already own a 50 story building then the units in that building might get less expensive once more supply comes online, but a developer isn't going to pay you for that land so they can knock it down and build a taller one because it's already a tall building and there is no sense in that when they could do the same to a 1-story building. And then those will be the ones lobbying most strongly against zoning reform -- and they have a lot of money, which is why we hardly ever get to try this.
Banks also like high housing prices because that means bigger mortgages and more interest, and their marketing materials to customers are likely significantly responsible for the impression among homeowners that it's the homeowner rather than the bank who is receiving the benefit of that.
Except that by then they've already sold it. There is a time delay between when the area is rezoned and when the new construction the rezoning allows has been able to bring sufficient new supply into the market. This is long enough for the existing homeowner to unload their house onto a developer at the premium that exists while the scarcity is still high.
> Arguing (as you seem to be) that all users of housing are made better off by a policy change
It isn't all users. For example, if you already own a 50 story building then the units in that building might get less expensive once more supply comes online, but a developer isn't going to pay you for that land so they can knock it down and build a taller one because it's already a tall building and there is no sense in that when they could do the same to a 1-story building. And then those will be the ones lobbying most strongly against zoning reform -- and they have a lot of money, which is why we hardly ever get to try this.
Banks also like high housing prices because that means bigger mortgages and more interest, and their marketing materials to customers are likely significantly responsible for the impression among homeowners that it's the homeowner rather than the bank who is receiving the benefit of that.
This effect is quite broken in many US markets. Developers are, for various reasons, building higher-density developments consisting almost exclusively of studios and 1-bedroom units.
Developers build what's profitable, i.e. what's in demand. And they don't have to build the thing you want to make more of it available to you. You want a big house, someone who currently has a big house just wants a place to live, so if someone builds them a 1-bedroom then they take your money, pay a fraction of that for the 1-bedroom and pocket the difference. They get the new unit and a pile of money and you get the existing bigger house.
That continues until demand for bigger units starts to outstrip demand for smaller units, at which point developers start building something else.
That continues until demand for bigger units starts to outstrip demand for smaller units, at which point developers start building something else.
> Developers build what's profitable, i.e. what's in demand.
This is only true to the extent that regulations don’t constrain the developers. As I understand it, in much of the US, regulations make it very difficult to build high density family housing.
This is only true to the extent that regulations don’t constrain the developers. As I understand it, in much of the US, regulations make it very difficult to build high density family housing.
There is plenty of opportunity to build high density family housing legally, even despite current regulations.
What’s not as easy is to build it as quickly and profitably as high-margin single families for end-users in the suburbs. High-density buildings for landlords are sold to relative experts in real estate who know their numbers. Low-density luxury-appearing houses can be sold to end users who don’t know their numbers as well and who are spending partly on their dreams and emotions.
(I say this as someone who bought two houses as an end-user and I mean no disrespect to end-user, non-expert buyers.)
What’s not as easy is to build it as quickly and profitably as high-margin single families for end-users in the suburbs. High-density buildings for landlords are sold to relative experts in real estate who know their numbers. Low-density luxury-appearing houses can be sold to end users who don’t know their numbers as well and who are spending partly on their dreams and emotions.
(I say this as someone who bought two houses as an end-user and I mean no disrespect to end-user, non-expert buyers.)
> As I understand it, in much of the US, regulations make it very difficult to build high density family housing.
Absolutely they do, but the 1-bedroom and studio units are the things those rules prohibit. Which is why they're in demand anywhere they're actually allowed and why developers start building them anywhere you remove the constraint.
Absolutely they do, but the 1-bedroom and studio units are the things those rules prohibit. Which is why they're in demand anywhere they're actually allowed and why developers start building them anywhere you remove the constraint.
> Because zoning reforms that allow higher density may lower the value of the house
For most detached single family homes in in-demand areas where housing (and thus sustainable population) are constrained by the supply of housing units, they probably won't do that, either; not only will they increase the land value, the fact that they increases population while decreasing the supply of ainglet-family homes will drive up the price of existing single family homes.
What it does, though, is reduce the use value (experienced utility of use) for current owner-residents for whom the particular local character is a factor in enjoyment, and make alternative replacements with the quality that is now missing from the current home that are in the same area (and thus compatible with existing jobs, etc.) harder to find, as well.
For most detached single family homes in in-demand areas where housing (and thus sustainable population) are constrained by the supply of housing units, they probably won't do that, either; not only will they increase the land value, the fact that they increases population while decreasing the supply of ainglet-family homes will drive up the price of existing single family homes.
What it does, though, is reduce the use value (experienced utility of use) for current owner-residents for whom the particular local character is a factor in enjoyment, and make alternative replacements with the quality that is now missing from the current home that are in the same area (and thus compatible with existing jobs, etc.) harder to find, as well.
> What it does, though, is reduce the use value (experienced utility of use) for current owner-residents for whom the particular local character is a factor in enjoyment, and make alternative replacements with the quality that is now missing from the current home that are in the same area (and thus compatible with existing jobs, etc.) harder to find, as well.
Which is apparently something which is currently in oversupply since housing in the suburbs costs less per square foot than it does in even the higher density areas that are within the same commuting radius.
Which is apparently something which is currently in oversupply since housing in the suburbs costs less per square foot than it does in even the higher density areas that are within the same commuting radius.
Well, you either get nice but prohibitively expensive places that also look and function like segregation tools increasing and perpetuating inequality, or you get slums that get progressively worsened simply as the time passes. Is there even a middle ground?
Like, moderately expensive areas that are medium density, so that they exacerbate the housing crisis but aren't particularly nice to live in?
I think people voted with their feet to expand geographically into the suburbs where city cores experienced the bimodal outcomes.
If the only place people would genuinely and completely freely choose to live inside a city is a place they can’t afford, but 3-30 miles away is a beautiful neighborhood of detached houses that they can afford, you don’t have to think very long to predict that there will be intense interests in these suburbs by people seeking to escape the city.
If the only place people would genuinely and completely freely choose to live inside a city is a place they can’t afford, but 3-30 miles away is a beautiful neighborhood of detached houses that they can afford, you don’t have to think very long to predict that there will be intense interests in these suburbs by people seeking to escape the city.
Sounds like a great test case for public intervention to shake up a bad market equilibrium: acquire large areas of land and build new cities and neighborhoods unencumbered by land use and zoning bylaws.
The places where cities make sense are generally the places where they already are. You could hypothetically build the trappings of a new city in North Dakota or West Texas, but who is going to move to a place which is just a bunch of empty buildings surrounded by farmland? You can already buy a house in such places for less than it costs for one in a major city but there is a reason that people don't.
Whereas if you would just rezone the areas with high demand to allow new construction to actually happen there then you don't need the government to raise and spend a ton of money, all you need them to do is to stop prohibiting the thing people would otherwise be doing.
Whereas if you would just rezone the areas with high demand to allow new construction to actually happen there then you don't need the government to raise and spend a ton of money, all you need them to do is to stop prohibiting the thing people would otherwise be doing.
I wonder, could you manufacture that? It seems to be happening in e.g. the middle east where they conjure up a city in the middle of the desert and just... create demand for a city there.
Take SF, which has a lot of tech jobs that aren't tied to any geographical location. Build a new city, offices, a university, loads of housing and make that the tech / internet capital of the world.
Take SF, which has a lot of tech jobs that aren't tied to any geographical location. Build a new city, offices, a university, loads of housing and make that the tech / internet capital of the world.
Could you manufacture that for like a trillion dollars? Maybe, but there are better things to spend a trillion dollars on. That's the entire Medicare budget.
Could you manufacture that for like a billion dollars? No.
Could you manufacture that for like a billion dollars? No.
That’s the Medicare budget for one year. Cities have a useful life span measured in multiple centuries.
(I also think it’s impractical to pull off, with Las Vegas being perhaps the most recent long-term conjuring of a city from “not much”, but comparing a multi-century stream of value to an annual consumption budget line seems like a strange way to make your case.)
(I also think it’s impractical to pull off, with Las Vegas being perhaps the most recent long-term conjuring of a city from “not much”, but comparing a multi-century stream of value to an annual consumption budget line seems like a strange way to make your case.)
You'd have to spend that amount of money in one year (or thereabouts) in order to make it work. It's also not really creating much new value so much as moving it around.
All the 'large areas of land' that people want to live in already have dense cities. This sort of ideas have been tried again and again, and it falls apart because people just don't want to move there.
Would you be enthusiastic about relocating if this was forty minutes away from Vegas in the desert?
Would you be enthusiastic about relocating if this was forty minutes away from Vegas in the desert?
Worked in the U.K. Milton Keynes is 250k population which was under 50k 50 years ago.
UK has the feature that you can bootstrap new towns because from the new town you are probably within 1000s of jobs in neigbouring towns. I used to joke to myself you could get a C# job in commuting distance (car may be needed) from anywhere in the UK even in the sticks. (Before remote working boom)
It’s a half hour drive to the nearest station and I don’t exactly live in the middle of nowhere.
US could build a new town 50 miles out of San Francisco with 4tph.
Holster-Gilroy looks potential. Petaluma-SantaRosa too, or Fairfield.
From a Quick Look on the map Those could all massively increase in size and be easily commutable to the entire SF area
US could build a new town 50 miles out of San Francisco with 4tph.
Holster-Gilroy looks potential. Petaluma-SantaRosa too, or Fairfield.
From a Quick Look on the map Those could all massively increase in size and be easily commutable to the entire SF area
> All the 'large areas of land' that people want to live in already have dense cities.
If by people you mean 18th century farmers or 19th century merchants, sure. I guess you could make some semblance of an argument for countries like Belgium or Japan, but it's downright ridiculous to claim United States, one of the most sparsely populated developed nations, already has all the large cities it can support.
Increasing population merely to EU average would create housing for hundreds of millions.
If by people you mean 18th century farmers or 19th century merchants, sure. I guess you could make some semblance of an argument for countries like Belgium or Japan, but it's downright ridiculous to claim United States, one of the most sparsely populated developed nations, already has all the large cities it can support.
Increasing population merely to EU average would create housing for hundreds of millions.
> United States, one of the most sparsely populated developed nations, already has all the large cities it can support.
That was not my argument, please don't twist my words.
I was replying to the idea that you should be able to take empty land and turn it into good cities. The reason that would not work is empty land nowadays is in pretty unattractive places. It worked 300 years ago I assume.
Sure you can turn a suburb or town into a city, that's how cities appear after all.
That was not my argument, please don't twist my words.
I was replying to the idea that you should be able to take empty land and turn it into good cities. The reason that would not work is empty land nowadays is in pretty unattractive places. It worked 300 years ago I assume.
Sure you can turn a suburb or town into a city, that's how cities appear after all.
People have and will move in the middle of nowhere if it offers them a way to make a living.
How does a bunch of empty buildings in the middle of the desert offer them a way to make a living?
It doesn't. But it could. My point is if you offer something attractive besides just housing, people will come. Imagine company towns or things like that. They work because people get jobs there.
That's exactly the point.
The areas where you could easily do something that provides work for a lot of people are already occupied by large cities, near river deltas, trade routes and coastal areas good for ports.
The only recent exception is SpaceX's Starbase town. And they could do this because of a very new 'requirement', frequently launch rockets where you have a south facing coastline as close as possible to the equator.
The areas where you could easily do something that provides work for a lot of people are already occupied by large cities, near river deltas, trade routes and coastal areas good for ports.
The only recent exception is SpaceX's Starbase town. And they could do this because of a very new 'requirement', frequently launch rockets where you have a south facing coastline as close as possible to the equator.
The "requirement" might be in this case "has cheap land and nice views". I see no reason you could not build such a thing, seems just difficult to kickstart.
Company towns are built because there is e.g. a mine in the middle of nowhere and then you have to build a town to support all the mine workers. If there was actually something like a viable mine there then it would happen on its own and if there isn't then it's still just a bunch of empty buildings in the desert.
That watercolor promoting "cite jardin de Gennevilliers" has a stormy and threatening sky. Lead white is probably the culprit (reacts with sulfur over time).
> nearly every city in the Western world banned densification.
I mean thats not true, as you well know. London put a massive belt around it to stop it from growing, which means its artificially dense. Its population density is 4/5x of amsterdam.
The US has a predilection for urban sprawl, but elsewhere thats not the case so much in Europe because land is expensive.
I mean thats not true, as you well know. London put a massive belt around it to stop it from growing, which means its artificially dense. Its population density is 4/5x of amsterdam.
The US has a predilection for urban sprawl, but elsewhere thats not the case so much in Europe because land is expensive.
"Residents of the London neighborhood South Tottenham recently persuaded their local councils to let them double the height of their houses", says the article, so evidently there was a restriction on height there. Elsewhere in London there are tower blocks, of course.
Ok look at n15(south tottenham) https://www.google.com/maps/place/London+N15/@51.5823145,-0....
look at it in 3D. It has a mix of late victorian terraces (mostly posh ones) and then a large amount of 1960s-70s medium density blocks/maisonettes. That shit is already dense. Adding new floors doesn't actually make it more dense(unless people buy and split it into flats.)
currently, you can easily add 6m extension out the back and up by one floor without too much hassle (so called permitted development). This means that you can easily double the floor space of a house, with little issue from the planning(zoning) people. The innovation that's pointed out is that they can add two floors up. Which is unusual, because its fucking expensive.
We also don't have HoA bullshit, so adding extensions doesn't require brownosing the local busybody community. just pay £750 and wait a few weeks.
look at it in 3D. It has a mix of late victorian terraces (mostly posh ones) and then a large amount of 1960s-70s medium density blocks/maisonettes. That shit is already dense. Adding new floors doesn't actually make it more dense(unless people buy and split it into flats.)
currently, you can easily add 6m extension out the back and up by one floor without too much hassle (so called permitted development). This means that you can easily double the floor space of a house, with little issue from the planning(zoning) people. The innovation that's pointed out is that they can add two floors up. Which is unusual, because its fucking expensive.
We also don't have HoA bullshit, so adding extensions doesn't require brownosing the local busybody community. just pay £750 and wait a few weeks.
Doesn't London still have scandals about people renting out illegally small cupboards, or things like that? Why aren't all the house owners building those extensions, splitting the place into flats, renting them out at a thousand a month, and moving their own accommodation to Essex?
> Doesn't London still have scandals about people renting out illegally small cupboards
Oh yes.
> Why aren't all the house owners building those extensions, splitting the place into flats, renting them out at a thousand a month, and moving their own accommodation to Essex?
Thats a good question, but I suspect its probably down to its not that profitable, and it requires a boat load of cash.
https://www.zoopla.co.uk/for-sale/details/71387241/ is 900k, thats been extended (pre planning changes)
You could _possibly_ rent it out for 5K a month, but you'd need to buy a similar sized house in commuting distance, which is 400-600k.
London is stupidly expensive.
Oh yes.
> Why aren't all the house owners building those extensions, splitting the place into flats, renting them out at a thousand a month, and moving their own accommodation to Essex?
Thats a good question, but I suspect its probably down to its not that profitable, and it requires a boat load of cash.
https://www.zoopla.co.uk/for-sale/details/71387241/ is 900k, thats been extended (pre planning changes)
You could _possibly_ rent it out for 5K a month, but you'd need to buy a similar sized house in commuting distance, which is 400-600k.
London is stupidly expensive.
I am not sure that London is the example needed for the topic, in part due to what happened in 1666, which was when the 'great fire' decimated the city, leading to some reforms such as requiring buildings to be built from anything but wood and for them to have parapets to prevent a burning roof setting fire to an adjacent building. Coupled with this was a height restriction, for the Fire Brigade, not to 'preserve views of St Pauls'.
In America, if the city burns to the ground, they just get on with it, they aren't 'institutionally traumatised' for centuries, but the Great Fire cast a long shadow over history and building codes, which restricted the density of the housing.
Also important but not discussed in the article, is the matter of building materials. When Sir Christopher Wren was redesigning London after the fire, he could not specify glass and steel since that wasn't around back then (well, glass existed but the Pilkington process to make flat glass hadn't been devised yet).
Most British towns can be dated by their building materials, starting with the original buildings built from stone from the local quarry. The type of stone found locally determines what these buildings are like, so you might have limestone, as in Cotswold stone, with a creamy colour, or, you might have nice red stone, for example, in the Welsh Borderlands.
Next came the canals, and with it things like Welsh slate and iron. Then the trains came along, bringing bricks and steel with it. Then there are modern times when you can have marble from Italy and whatever else flaunts wealth (or is cheapest).
Putting it all together, familiarity with the materials and where they are from enables the relative age of parts of a British town to be identified.
Needless to say, all roads lead to somewhere, in the UK it is London, where so much has changed that it is not so easy to see the 'onion layers' of materials used in the city as it has grown, mostly because London is more like hundreds of villages that merged together as they all grew. Plus, London is always under constant redevelopment.
The green belt is a relatively recent development, dating back only a century ago, when the smog situation in London meant that kids had rickets due to lack of sun. Pea-soupers made it necessary for there to be some escape to the countryside. Interestingly, trams were what you needed to get around in that era because smog was like the worst fog imaginable, making it impossible to get from A to B on a vehicle that was not on rails.
Also not in the article is how the railways had a sideline in building towns for their railways to serve. The low density suburbs were once far from London, therefore requiring the train, and the dream was to escape the city with the smog for these new 'garden cities'. Had they built vast sky scrapers in (say) Hemel Hempstead, instead of actual houses then you would not have the same appeal.
If you are in the UK and interested in seeing development patterns, one gem is the Lever estate on the Wirral, built to serve Liverpool's industry on the Mersey River, which was where the Lever Brothers operated. They were Quaker types and, on their worker estates, they built wonderful parks, libraries and art galleries. The Lever estate has this amazing art gallery in the middle of it, with artwork far better than anything you would expect to find anywhere outside the big European capitals.
The whole thing with the Quakers was a 'war on slavery' that was won in 1807 and 1833-1838, with the idea being that machines would replace slaves. They wanted their workers to be anything but slaves. Despite being few in number, they had many sectors of industry sewn up, notably confectionary and soap. Places such as the Lever Estate 'set the standard' for those wanting more than slums.
Finally, we did have the high rises of the 1960s. They didn't work out as they lacked community, leading to crime and a general downward spiral. Glasgow, once the second city of the empire, was notable for these, however, most of them had to come down, for lower density housing estates to be built elsewhere, further up or down the Clyde.
I am not sure the article makes sense in the British context, it reads more like examples picked to suit a hypothesis. I also would have liked it if the author had explained why inflation came in to play from 1914. Note that after WW1, the UK lost all of its skilled tradesmen because someone decided that they were needed for cannon fodder. This was a tragedy, not just for them and their families, but also for the quality of housing and what was possible after WW1.
Mortgages also need to be in the picture, in feudal times there was no market in property, however, the mortgage came into being and that changed how development happened in a big way. This too affected how dense housing would be.
In America, if the city burns to the ground, they just get on with it, they aren't 'institutionally traumatised' for centuries, but the Great Fire cast a long shadow over history and building codes, which restricted the density of the housing.
Also important but not discussed in the article, is the matter of building materials. When Sir Christopher Wren was redesigning London after the fire, he could not specify glass and steel since that wasn't around back then (well, glass existed but the Pilkington process to make flat glass hadn't been devised yet).
Most British towns can be dated by their building materials, starting with the original buildings built from stone from the local quarry. The type of stone found locally determines what these buildings are like, so you might have limestone, as in Cotswold stone, with a creamy colour, or, you might have nice red stone, for example, in the Welsh Borderlands.
Next came the canals, and with it things like Welsh slate and iron. Then the trains came along, bringing bricks and steel with it. Then there are modern times when you can have marble from Italy and whatever else flaunts wealth (or is cheapest).
Putting it all together, familiarity with the materials and where they are from enables the relative age of parts of a British town to be identified.
Needless to say, all roads lead to somewhere, in the UK it is London, where so much has changed that it is not so easy to see the 'onion layers' of materials used in the city as it has grown, mostly because London is more like hundreds of villages that merged together as they all grew. Plus, London is always under constant redevelopment.
The green belt is a relatively recent development, dating back only a century ago, when the smog situation in London meant that kids had rickets due to lack of sun. Pea-soupers made it necessary for there to be some escape to the countryside. Interestingly, trams were what you needed to get around in that era because smog was like the worst fog imaginable, making it impossible to get from A to B on a vehicle that was not on rails.
Also not in the article is how the railways had a sideline in building towns for their railways to serve. The low density suburbs were once far from London, therefore requiring the train, and the dream was to escape the city with the smog for these new 'garden cities'. Had they built vast sky scrapers in (say) Hemel Hempstead, instead of actual houses then you would not have the same appeal.
If you are in the UK and interested in seeing development patterns, one gem is the Lever estate on the Wirral, built to serve Liverpool's industry on the Mersey River, which was where the Lever Brothers operated. They were Quaker types and, on their worker estates, they built wonderful parks, libraries and art galleries. The Lever estate has this amazing art gallery in the middle of it, with artwork far better than anything you would expect to find anywhere outside the big European capitals.
The whole thing with the Quakers was a 'war on slavery' that was won in 1807 and 1833-1838, with the idea being that machines would replace slaves. They wanted their workers to be anything but slaves. Despite being few in number, they had many sectors of industry sewn up, notably confectionary and soap. Places such as the Lever Estate 'set the standard' for those wanting more than slums.
Finally, we did have the high rises of the 1960s. They didn't work out as they lacked community, leading to crime and a general downward spiral. Glasgow, once the second city of the empire, was notable for these, however, most of them had to come down, for lower density housing estates to be built elsewhere, further up or down the Clyde.
I am not sure the article makes sense in the British context, it reads more like examples picked to suit a hypothesis. I also would have liked it if the author had explained why inflation came in to play from 1914. Note that after WW1, the UK lost all of its skilled tradesmen because someone decided that they were needed for cannon fodder. This was a tragedy, not just for them and their families, but also for the quality of housing and what was possible after WW1.
Mortgages also need to be in the picture, in feudal times there was no market in property, however, the mortgage came into being and that changed how development happened in a big way. This too affected how dense housing would be.
userbinator(4)
We built a world that genuinely made a generation of people more or less happy.
And it turns out happiness makes you indifferent toward the future and the people who have to live in it.
And it turns out happiness makes you indifferent toward the future and the people who have to live in it.
I have to wonder to what extent that's actually true. To begin with, if you have a single family home in an area with high demand, upzoning could make someone willing to pay you even more than the house is currently worth because they could still turn a profit when turning it into ten or twenty times as much housing on the same lot. In other words, the value of the house may go down but the value of the land goes up when you can build more housing on it.
On top of that, higher housing prices don't necessarily equate to a better life or even more money. If your house is worth more but you still need a place to live then you can't sell it, unless you are planning to sell it soon in which case upzoning gets you more money because developers start bidding on your house before the new housing the upzoning allows to be built is on the market yet.
If not, it's not just your house that costs more. The other ones do too, which increases cost of living. Local shops have to pay higher rents and pass on that cost to you, or can't find local workers because young people can't afford local rent, so they have to close down. Then you get higher local unemployment and more crime and homelessness. You might even lose your own job because your employer moved out. What do you think drives offshoring? High domestic costs.
And if people are only thinking about the first order effect then they might imagine downzoning is to their advantage when it isn't. Which makes them support it but only until someone shows them the math.