Housing doesn't need to be this way, but in much of the developed world we've artificially turned it into a zero-sum game with development restrictions, zoning rules, height limits, historic districts, green belts, and tons of other rules. None of those things is inherently bad on its own, and some are even a net good for society like a well managed green belt. Zoning in north america has an awful racist history and needs to be first on the chopping block. In combination all these restrictions have made adding density and housing units in areas with economic opportunity nearly impossible.

Those who already own property (myself included) are participating in a system that is increasingly pulling up the ladder on those who wish to join. The housing market is one of the least free. Rules requiring bedrooms have 2 points of egress and that building have minimum fire resistance are fantastic and need to stay. Rules that do things like prevent 2, 3 and 4-plexes, mandate a whole city can't go above 4 stories, and require 1:1 parking for every adult need to get tossed out right away.

> Rules that do things like prevent 2, 3 and 4-plexes, mandate a whole city can't go above 4 stories, and require 1:1 parking for every adult need to get tossed out right away.

In places like California, simply strictly applying the existing rules would be a huge step forward. Instead, even projects that are 100% compliant with all building and zoning rules and already granted building department approval are subject to an endless and often patently illegal "community review" process. See, e.g., https://www.sfchronicle.com/sf/article/State-gives-S-F-30-da... and https://www.sfchronicle.com/sf/article/Supervisor-Mar-pushes...

Under Supreme Court precedent such ex post facto community "vetoes" are unconstitutional. The community votes by passing laws a priori, not through ad hoc, targeted manipulation of the regulatory review process. But for complex procedural and policy reasons the Supreme Court has unfortunately been too reticent to police violations of this principle. My disposition is toward federalism and local control, but in many cases the system is violating fundamental principles in our society about the creation and application of law. Principles even more basic and fundamental than property, free speech, or personal liberty rights.

> the value is all about how developed it is

If by "developed", you mean "built upon", that's empirically not the case:

Here's an empty lot in the heart of San Francisco for $2 million dollars: https://www.fortressofdoors.com/content/images/2021/08/image...

Here's a building next door to it on a similar sized lot for $2.3 million dollars: https://www.fortressofdoors.com/content/images/2021/08/image...

Location, Location, Location. The vast majority of the value of urban real estate is land (locational) value.

The land value is increased by the nearby development known as "San Francisco".

The same land in the same location, with no development nearby, would be worthless.

This is why it is sometimes referred to as "location value" rather than land value. The dirt is approximately worthless, but the location is worth a lot due to the surroundings (usually, because of human development of the surroundings).

Advocates of a land value tax therefore often call it a location value tax, or a site value tax, because it is the location and the society around the location that has value, not the dirt itself.

Yes, that was my point. That is exactly how land appreciation works. The owner of the land gains value from the work of his neighbors, whether he contributes or not.

It's possible to build more houses... up to a limit.

Cities need to be supported by enough resources -- that includes enough water, proximity to arable land, hospitable climate, and ease of access. The 2% figure you quoted can be a bit misleading because we can never develop 100% of the land into houses.

But as Japan/China/Korea has shown, it is probably still very possible for England to become much denser than it currently is. It would require all the residents to change their lifestyles to match though.

>proximity to arable land

Any land is arable if we want to. See Phoenix.

That potentially just shifts to another zero sum game for water rights. The West is dealing with that currently.

This is purely a result of the fact that water is so cheap and water rights don’t incentivize water saving technologies.

There are residential and agricultural technologies that dramatically reduce water usage. For instance drip irrigation. Also the city of Las Vegas recycles almost all the recyclable water and consequently is extremely efficient at using water

Can you elaborate? I agree water cost does not tend to incentivize conservation and leads to what seems to be inappropriate choices of crops for example. It’s also interesting how the idea of water rights in the East/West evolved differently because of scarcity. Is your point that the problems in the West would be solved by more expensive water?

I’d worry that it would upend agrarian economies (in the short and medium term, at least $

Ocean is full of water. It just costs money (maybe a lot) to desalinate it.

(And to move it).

That just pushes it to another zero sum game of money.

Why does it matter if it's zero sum? Sometimes things we need aren't free.

The GGP post was claiming housing was zero-sum. Posts responding to it seem to be trying to contradict it.

My point is that in a world of finite resources, it's going to be zero-sum at some point whether that's land, water, money, labor, or something else. It's not good or bad, but you do have to pick your poison to a certain extent.

Land != land. Gresham law applies.

City center land > suburban land > rural land > land on Mars > land in faraway galaxy.

There is always scarcity of land even though there is an infinite capacity of it across the Universe.

To what end? How many houses do we need before we’re just making houses to enrich people rather than create shelter?

States like Oregon and Washington that greatly limit supply are widely praised for their natural beauty and conservation precisely because they don’t chop down forestry to build cheap homes to sell to the CCP.

Fools have created an acronym - NIMBY - to denigrate those who don’t want to waste land just for personal financial gain. However, there remain very real benefits to conserving forests and very real consequences to turning every square mile of land into an AirBNB. The landlord won’t live in that area and the renter won’t stay in the area long enough to care about the area but the long-term residents will pay the price regardless.

If you can afford to live in one of those places it's great. If your homeless you'd probably be ok with a little less green space if it meant you had a home to live in.

Also very little of the NIMBY vs YIMBY debate is whether or not to turn forests into condos, it's almost also SFH vs denser construction.

> Fools have created an acronym - NIMBY - to denigrate those who don’t want to waste land just for personal financial gain.

Coming at this from a UK perspective, housing is a nightmare here too. But our green belt is at an all time low and London is an unbelievable sprawl. No, I'd rather rent forever than ruin the countryside.

The value is very much about the location of the land. The neighborhood, school district, proximity to parks or transit. The actual structure matters less and less these days. It is "possible" to build more, but rarely politically viable.

Schools, parks and transit are not static and new ones can be built. Those all fall under "development".

You say this as if it's fast or easy. All of these can easily take 10s of years build from conception to completion due to a myriad of reasons. Land acquisition, federal state and local funding, environmental review, court cases, zoning changes, public review proceses, etc. It's not like someone decrees that a school should be built and 6 months later it's up and running. And the school is the easy one on that list :)

I agree with your comment in theory but I'd say that only applies over a long-enough horizon. At any given point in time when someone enters the market, there's a fixed supply. Sure, someone could commission the construction of their own home, but good luck with that in an urban area.

> Houses are not zero-sum, as it's possible to build more.

Every newly-built house lowers the value of every already-built house. It is straightforward to specify initial conditions where the result is negative-sum.

> Every newly-built house lowers the value of every already-built house.

Do you mean every already-built house nearby or every already-built house in the world?

If you mean nearby then your theory would predict that places like San Francisco, Manhattan, and Paris would be among the cheapest places in the world to buy housing. This is very much the opposite of the truth, so if that's what you mean, then either your theory is completely wrong or the effect it describes is swamped by other effects that are much more important determinants of housing value.

If you mean in the world then I suppose it's possible that you're correct in a market-value sense, since the effect on the price of my house due to someone in Shanghai building a nice new condo would be to drop the price by, say, US$0.00003. But if we're talking about use-value rather than exchange-value (which is the sense in which it really matters whether things are zero-sum, positive-sum, or negative-sum) it's hard to see how that could be true. Perhaps you think the use-value of my house is primarily that it enables me to laugh at the suffering of the homeless beggars of Dhaka? I assure you I spend zero time on that activity.

So I think it's clear that your theory is just completely bogus.

It's not bogus. It really is as simple as supply and demand. Yes, SF and NYC etc. are super expensive despite their density, however, what you're missing is that 1: Supply hasn't kept up with demand, and 2: SF/NYC would be even more expensive if they weren't as dense as they are now, and continuing to build (however slowly).

(I notice that you didn't answer the two questions I asked, an omission I deem discourteous.)

So evidently the main determinant of housing prices is "demand", not your hypothetical effect of houses getting cheaper because other houses are nearby.

What do you think produces "demand"? Why is there more demand for houses in Phoenix than for houses 200 km to the northwest? In some cases, of course, there are real differences in land quality: land that is close to waterways or railroads is more valuable for industry than land that isn't, land that's close to iron ore deposits is more valuable for automotive manufacturing, land that's frozen cold 9 months out of the year is less valuable for human habitation, and so on. But none of these explains the universally observed price premium for land in cities over land in the nearby countryside, which often amounts to three orders of magnitude.

It turns out that the main driver of demand for housing is being close to other housing. So building houses drives up the price of land nearby. Not down, as your theory predicts.

> (I notice that you didn't answer the two questions I asked, an omission I deem discourteous.)

One of your questions was “Perhaps you think the use-value of my house is primarily that it enables me to laugh at the suffering of the homeless beggars of Dhaka?”

I think omitting a proper response to that question is more courteous than discourteous.

How am I supposed to rationally engage with their thesis, given that their theory of value is so ambiguous that I can't even tell if they think the value of my house is primarily a use-value in that it enables me to laugh at the suffering of the homeless beggars of Dhaka? The fact that they refused to answer even such basic questions makes me think that, rather than attempting to engage in reasonable discourse, they are playing some kind of sadistic mind game.

I'm not really sure what point you're trying to prove. You're using land and housing prices interchangeably, when the problem being discussed is about real estate prices not land prices specifically. Yes land prices are part of real estate costs, but that's not all of it by a long shot.

Building codes, bureaucracy, and NIMBYism all contribute to construction costs, which in many cases severely constrict supply (SF being a shining example), and thus make existing units more expensive. Focusing solely on land prices is missing the forest for the trees. The problem is that there isn't enough supply to meet demand, so prices are skyrocketing.

Building more housing will drive prices down at best, or slow price increases at worst, but it doest affect housing affordability, which is the original statement I was commenting on.

>It turns out that the main driver of demand for housing is being close to other housing.

This seems to be conflating the symptom with the cause. I doubt housing is more attractive because there are more houses nearby; they're attractive because more services are nearby. Granted, they are going to correlate strongly but I think it's a mistake to conflate the two.

Consider the following:

1) A house with no neighbors within a 100 mile radius. But it has all the best restaurants, utilities, schools etc. within walking distance.

2) A neighborhood with hundreds of houses, but none of those services within 100 mile radius. It's a little isolated island of housing.

Which do you think would cost more to live in?

I think this is an interesting thought experiment. I suppose the restaurants, utilities, and schools are all fully automated, like Automats or Skinner's Teaching Machine? (Or perhaps they have employees, but they all commute from over 160 km away?) And my family is the only consumer of those automated services?

It seems like the price of each meal at the restaurants would need to be sufficient for the restaurant to operate for a month or two, perhaps a few thousand dollars. That seems like it would discourage eating at these wonderful restaurants.

Have you considered that density may drive demand?

What is one supposed to do with that consideration, not build more housing? Because that's already happening, and it's not going well.

It lowers the "value" as a monopolistic asset class but not the "housing/day units" value.

The second value is what society should care about increasing, and it should go out of it's way to destroy the first kind of "value".

Why assume housing demand is fixed? Population increase, people want second homes, people want vacation rentals…