Re:Let's build houses for people, not cars
by erik_seaberg on Tuesday August 27, 2019 @02:44PM
(#20813125)
When there's a shortage of luxury units, rich people grudgingly bid up the low-end units because they still have to live somewhere. That's why low-end units here have higher prices than luxury units in other places.
Or they decide to live in a different neighborhood, suburb, city, state, or country. That is the primary flaw with all this discussion of theoretical housing markets. Housing markets are not closed systems. Demand is not fixed. People regularly enter into or exit specific housing markets all the time due to changes in prices which prevent these pricing changes from completely flowing through the entirety of the market. It doesn't matter how expensive housing in California gets, most "rich" people will move away before they spend a few thousand dollars a month on SRO housing.
Re:Let's build houses for people, not cars
by erik_seaberg on Wednesday August 28, 2019 @05:41PM
(#20824280)
It's pretty hard to build housing that only rich people would refuse to live in. In practice it's the working poor who end up commuting from Tracy and Morgan Hill because everything else was outbid, and that will continue until we legalize the housing glut the market is crying out for.
The argument is not trickle down economics although, it's wealthy demand traps. Ex:
"If rich people can't buy ferraris, and there is a limit to 100 BMWs and 100 civics, then rich people will boost the price of all the BMWs and Civics and all you can buy is really old broken down chevrolets, if you can buy one at all."
"But I bought my civic when it was an affordable price, and I have a special old person subsidized gas price, why do we need build more civics, ferraris and BMWs for all of these new immigrants?! Why can't they just stay in their own country?"
My point is that housing isn't all easily substitutable Ferraris, BMWs, and Civics. There are also private jets and mopeds. Jets and mopeds might both be forms of transportation, but a drop in the price of jets isn't going to impact moped prices.
Mopeds are illegal to build although (SRO) and the minimum legal house is a civic, and nobody protests the building of local large single family jet mansions. And you haven't seen the used market price of a porsche in a market with a lot of them ;) Berlin 15 years ago is one example of that.
And what people call 'luxury jet housing' is usually really sad 600sqft housing that would be called honda fit housing elsewhere.
The analogy is getting strained at this point. Not being able to build new SRO housing doesn't mean we have to knockdown all the SROs and replace them with high rise luxury condos. That might even increase housing density if a 5 story building is replaced by a 15 story building. That doesn't mean the people displaced by the new construction will benefit in any way.
We also need to recognize that trickle down economics doesn't work when it comes to housing just like it doesn't work when it comes other areas of economics. A 1500 square foot high rise 1 bedroom condo with an in-unit washer and dryer is so different from a 200 square foot unit that doesn't even have an in-unit shower that they function as completely separate markets.
Those two things mean we likely need more regulation not less. Although that doesn't mean the regulation we have currently is necessarily good. Removing regulation regarding parking might still be a smart move.