Of course the more attractive we make home ownership as an investment, the more investors will flock to the market. We need policies specifically benefiting owner occupied homes or we need to stop treating the basic human need for shelter as an avenue for investment.
Neither seems likely to happen because we have already waited so long that the moneyed interests now have too much to lose and won't allow what needs to be done to happen.
https://www.vox.com/platform/amp/22524829/wall-street-housin...
> The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach.
I'm involved with a local YIMBY group, and what I see over and over again is my neighbors stopping homes from being built. No wonder investors think it's a great place to put some money - other people do the dirty work for them!
Plus even at low levels NIMBYism is often about investment. Sure, many object to new housing for reasons like "it will change the character of the neighborhood". But many others object because they are worried about the value of their own home going down. They are treating their home primarily as an investment because that is what they have been told to do their whole life. If I could snap my fingers and magically realign our political goals to maintaining stable home values instead of having them ever-increasing, many NIMBY objections would fade away.
Go to a planning meeting about some housing that people are pissed off about because reasons ( https://news.ycombinator.com/item?id=32569768 ) and you'll find a whole bunch of your neighbors. It's not institutional investors blocking this stuff, by and large.
> they are worried about the value of their own home going down. They are treating their home primarily as an investment because that is what they have been told to do their whole lives
Yes, that's much closer to what I've observed in person fighting these fights.
Yes, the institutional investors aren't going to be in your local council meeting. They will be meeting with your state assembly members. They will be meeting with your Congresspeople. They won't be literal NIMBYs focusing on anyone's "backyard". However they will be working towards the same goals at NIMBYs, just at a larger scale.
It's amazing the power those subjects have to turn "YIMBY" into "regulate me harder daddy".
The cognitive dissonance required to enable this about face is a bad thing and seems to be becoming more and more prevalent and accepted in all sorts of public policy contexts.
Now lobby dollars are another story. But renters can fix that by actually voting.
I don't know of any local councils that grant local votes to anyone -- they vote themselves. This should spark an idea of how rich people's dollars outweigh poor people's input. They only have to convince half of the council to vote one way. This can be done through wining and dining, sending "experts" to make presentations, making promises, and so on.
Local to me, we've had a few causes pop up with surprisingly well-run NIMBY efforts opposing them in recent years. The amount of money raised and the signs and slogans are way too good to be the product of the actual locals who speak out on behalf of these groups - somebody else is clearly funding them and doing some marketing.
It's not some psyop that has duped an entire nation, it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater.
What is those people's second biggest purchase which is also usually done with debt? Does anyone believe that the government should enact policies to ensure that car prices always increase so they would be a better investment? Houses obviously have a longer lifespan than cars, so I'm not suggesting they should necessarily depreciate the same way, but there is also no reason housing should always be appreciating.
We have this idea that the price you sell your home for should always be higher than the price you bought it for. There is no reason for us to preserve that idea beyond the fact that people have now internalized that idea and plan their financial lives around it. The longer we allow that to continue, the harder it becomes to change, but the idea itself is not some fundamental requirement of society.
The government could put the same energy to keeping housing costs in pace with inflation. They don't. Instead, the government tries to keep housing costs rising faster than inflation because housing is viewed as an investment. They have been successful in that goal as housing is greatly outpacing inflation.
> The government could put the same energy to keeping housing costs in pace with inflation. They don't
That's exactly what they did. Not just housing, but also food, cars, ... It's just that housing costs respond a lot better to credit availability than most other things. And yes, generally it's things that are seen as an investment that respond to credit availability.
The government has no direct control over any kind of pricing except the price of money. Also known as credit availability. They raise house prices 5% per year, so that when food and fuel refuse to adjust to inflation, it averages out to 2% per year. This caused larger price rises on everything that is seen as an investment (houses, education, cars, ...) than on things that are not.
Housing costs greatly outpacing inflation is not a recent phenomena of the last 15 years. In fact, home prices increased faster in the prior 15 years than the last 15 years.
>The government has no direct control over any kind of pricing except the price of money.
I'm not interested in debating the meaning of "direct control", but one rather direct control they have is the federal government could repeal the mortgage interest deduction. That would immediately decrease the financial incentive to buy a home therefore decrease demand and lower prices.
Only because the averages get pulled down in places where people don't want to live. Plus effective inflation going up (you know, the inflation including housing and education, not the made up government inflation number)
> I'm not interested in debating the meaning of "direct control", but one rather direct control they have is the federal government could repeal the mortgage interest deduction. That would immediately decrease the financial incentive to buy a home therefore decrease demand and lower prices.
Repealing it would create a big advantage for investing in homes rather than buying them to live in them. This sounds to me like the opposite of what you want. But maybe I'm an idiot.
Reality: for any resource there is supply X and demand Y, in specific markets.
X > Y: it matters a lot less what the exact policy is.
Y > X: someone will be very, very unhappy.
Rent prices, what we really care about, are not determined by who owns a house. They are determined by the amount of houses.
Except until you have a chip supply crunch, and used cars are selling higher than their original buying price.
Reliability is way, way down the wish-list. People don't really consider it until all the other key features they want are very solidly satisfied. And even then the take rate is maybe 50%. For every jerk in a 4Runner or Pilot there's an equal and opposite jerk in a Landrover or Tiguan.
- People who like to frequently change cars, not so frequent as to lease but still prefers to let it go between 50-100KMi. (Contrast folks who sell past 100k or drive cars into the ground, they care more about long term repair cost.)
- People who are using resale value as a proxy for reliability.
I suppose 'lease-e' may fall into this category, also by proxy (as high resale value means lower depreciation, lower lease cost.)
However I’m likely not to be representative.
There's an over reliance on 'ideas' in this message thread, and an under reliance on simply trusting people to reason their own self-interest.
absolutely. If anything investors provide for liquidity of the market.
The real issue is that investors, ie. the rich, are getting more and more ability to buy real estate while the middle and the low class are getting less and less capable of doing so. The reason is the huge sloshing amounts of money being given to the top, and thus those money causing a strong push for the price rise of the assets (back at the beginning of pandemic i said that it will result in the biggest redistribution of wealth https://news.ycombinator.com/item?id=23924777 toward the rich and large ones)
No, no, no. "providing liquidity" is not a good thing unless liquidity is actually a problem almost everywhere people talk about this.
The "liquidity" provided by high-frequency traders in the stock market does not benefit anyone but themselves. For everyone else the difference between trading in minutes and hours (or even days) is near-meaningless. And they don't provide liquidity for seldom traded stocks.
And on the housing market they are not providing liquidity for the market in general. They are buying and then renting those properties out. Since they are all-cash offers they often trump "regular" buyers out of the market, even when offering the same price. Again, the only ones who benefit by this are those investors themselves.
These investors are one of the major forces pushing up the prices, the are part of the problem, not the solution.
That liquidity is also what's driving the price of executing a retail trade to or below zero. You used to have to pay fees whenever you bought or sold stock.
To be honest, I just figured they were able to eliminate fees by front running and/or selling my trading information.
You could make an argument of the form "HFTs have made trading so cheap that people are hurting themselves more than they used to, and we need to bring the price of trading back up so that people won't be tempted". But that is a pretty different argument than "HFTs don't provide any value". They clearly do. When you place an order to buy or sell stock, you pay lower fees and you get better prices than you otherwise would, because you look just like a million idiots.
Yes there’s a few rich in there and it’s not like they’re egalitarian, but it isn’t Jeff Bezos either.
At least in my area, it's all about people wanting the area to remain semi-rural. They generally aren't opposing low density SFH in independent builds. The people in my area are against many development and medium density homes.
But, yeah, it's all because they have brown skin. Oh, wait, the tenants in question are whiter than I am.
If you want to know why we don't bother, it's because the owners of the surrounding houses use our place as dumping grounds and the owners have been there for decades and know all the housing inspectors and police. It seems pointless to even bother when the landlord wants the house to fall into disrepair and the neighbors will use their connections to authorities to dump on our grounds again as soon as we clean it up. On one occasion I was sent a notice that I would be imprisoned because of trash my neighbor put somewhere not even on our property and before I even moved in. I dutifully cleaned it up because it was clear I was going to be framed, but as that took the entire weekend I had little energy leftover afterwards to do yard work around my own place after being exhausted dealing with the neighbor owners.
Meanwhile the neighbors' house indeed did look spotless because they dumped all their trash on the renters' yards.
We know how people treat rental cars. I don't know why it's a big shock that people will treat rental properties in the same manner, and why other folks would rather not live next to that. Blame race and class if you like, but to not allow at least a little more nuance to the discussion is silly.
If people are going to do restrictions about who lives where, HOA's are probably better than zoning. They're more localized, and the costs of administering them are born by those who perceive them to be beneficial.
I'd never live in one, but to each their own. I'd rather have someone choose one of those in a free market than get involved to zone the entire city one way.
Make it so neighbors are competing to host whatever they are NIMBYing about currently because it comes with a package of goodies that will offset the problems. It doesn't have to include much new spending, rebalancing or reprioritization of existing resources to ensure fairness can be part of it.
Is this the norm? I feel like I haven't heard it often during debates over unpopular new developments.
It astonishes me how many people in that town are complaining how it used to be small and full of farm fields, and now there are all these new people and houses and neighbourhoods, and we need to stop the expansion.
Every.Single.One. of them moved there within their lifetime. NONE of them were born there. THey did the exact same thing they are now complaining and trying to stop others. None of them, when asked, are even remotely willing to move to a high density downtown condo, if they are so committed and passionate to preserving the fields and small community.
It absolutely astonishes me, the utter lack of self-awareness: why are you expecting others to be different than yourself?
---
(it's like when you're stuck in traffic, and somebody in your car gets frustrated "Why are all these people here? Where are they going??". It's not like everybody else has conspired to harm us - we are in this traffic, going somewhere else, contributing to it and making everybody else slower. It is US, not "them" )
* cheap land is usually cheap for a reason. Land in the middle of the desert West probably doesn‘t have the required water rights to support habitation. Land in the middle of nowhere in general has few services and high logistics costs. Former industrial land requires environmental remediation. Foreclosed land may require paying outstanding tax bills. And those are the relatively straightforward problems, to say nothing of places with high crime, bad schools or other complex societal issues.
* a lot of these places are going to turn NIMBY if a bunch of outsiders come, buy up housing and export their cost of living crisis to their community. It doesn‘t take that many people to tighten up the housing market in a town of 10,000.
It seems every city has areas within it with these issues. So this shouldn't affect the possibility of moving to areas that have decent schools. And there are solutions to many, like private schools can be a good option especially if the yearly cost is less than the property tax in a HCOL area.
"It doesn‘t take that many people to tighten up the housing market in a town of 10,000."
It doesn't have to be a huge influx, nor all at once. The point is that zoning is less restrictive and land is cheaper, so people can build. The depressed areas have relatively high vacancies anyways.
"Employers want to be where their clients and employees will be, residents want to be in a place with decent shops and services."
Some people want nature. Shops aren't as much of a concern today with internet delivery. I find it highly suspect that people all want exactly the same thing. It might be more likely that the people in one group are just being left behind.
It doesn't, but how much cheap land in Goldilocks-type areas really exists? The housing price problem is already becoming national in scale.
> It doesn't have to be a huge influx, nor all at once.
That ship sailed a long time ago. It already is. It turns out 1% of Californians leaving annually is still half a million people swarming other places. You cannot run into a town in the Mountain West or PNW where locals aren't complaining about Californians driving up prices. Encouraging more people to do this is going to exacerbate the problem.
> Shops aren't as much of a concern today with internet delivery.
There's still a baseline. To use your example of Appalachia in a different comment chain, consider that people in 40 counties in West Virginia today are food deserts without easy access to fresh food. Instacart is more expensive and not available everywhere.
https://www.wvpublic.org/podcast/inside-appalachia/2015-10-0...
That's my point - it doesn't have to be perfect. Otherwise nothing will solve it.
"Encouraging more people to do this is going to exacerbate the problem."
They should be moving to places that are shrinking. That's what I'm suggesting.
That food desert thing is a joke. They're talking about supermarkets, yet there are other sources like farm stands. 10 rural miles is nothing. That might be a 10-15 minute trip if you've ever driven in WV and seen the speeds people drive.
The biggest issue/cost isn't the actual building codes, as those are easy to meet in most places. It's the sanitation requirements. Those old shacks were allowed to have outhouses, or at least septic systems that would no longer pass. Septic systems are a pain to put in and are quite expensive.
> They should be moving to places that are shrinking. That's what I'm suggesting.
And we're back to "you can lead a horse to water but you can't make it drink."
> That food desert thing is a joke. They're talking about supermarkets, yet there are other sources like farm stands. 10 rural miles is nothing. That might be a 10-15 minute trip if you've ever driven in WV and seen the speeds people drive.
* Supermarkets in the US provide all kinds of out-of-season produce throughout the year. This is what consumers have come to expect, and is an inherent limitation of farm stands.
* Those most struggling with COL also struggle with the cost of transportation in the US, so driving a dozen miles is a non-starter.
1. https://maxread.substack.com/p/the-man-who-bought-pine-bluff...
I’ve spent time in Western, PA and while it’s definitely a lot safer than Pine Bluff, feels like there’s lots of issues with pollution, blight, and opiates even with fracking jobs and money coming into the area.
I'm sure there are plenty of candidate cities throughout the overall region, and it would likely depend on what the industry is. Someplace around Indiana PA would be good if you need semi close access to a commercial airport, a larger city, or a college. Erie could be similar. Johnstown PA area is good if you have government contracts, defense work, or need a regional or shipping airport. Bedford or Breezewood PA can be good for warehouses and shipping with the highways. Medium to small companies would be well served to position themselves between two medium/small towns for cheap land and larger workforce pool without being near the larger cities, like Millville and Stillwater as an example.
Workers don't want to move to sparsely populated areas because there aren't many jobs, and companies don't want to do it because there aren't any workers.
E.g. I wouldn't mind working in a sparsely populated area, but there's a good chance my employer would be the only one I could work for (without giving up and working retail or something). My employer doesn't want to relocate there because good luck convincing people to relocate there given the above.
There are infrastructure problems, too. Good luck getting a business class 40Gbps Internet connection in Nowhere, Wyoming.
It would go a long way if remote work was normalized (or legislated), and the FCC actually forced ISPs to run reasonable Internet connections outside of major metropolitan areas.
The above linked Vox article refers to another Vox article to back up its general claim that "Housing undersupply is the result of decades of locals opposing new home building."
https://www.vox.com/22264268/covid-19-housing-insecurity-hou...
Then, this referenced Vox article references the following study as if it applies to all housing in general:
"In 2017, Yale Law professor David Schleicher wrote a paper called “Stuck! The Law and Economics of Residential Stagnation.” In it, he documents local restrictions on housing development, arguing they have become so overbearing that the increase in the cost of housing and rents has made moving to a better place impossible for millions of Americans. Local zoning regulations are strangling opportunity."
https://www.yalelawjournal.org/article/stuck-the-law-and-eco...
This study however is clear that the impact of restrictive zoning policies is localized particularly to coastal metro regions beginning in the 1970's:
"Something dramatic happened to land-use regulation in the 1970s and 1980s: it became much, much stricter. Importantly, while this phenomenon affected all types of municipalities—from urban downtowns to inner-ring suburbs to exurbs—it only occurred in particular regions of the country. In particular, coastal metropolitan regions like San Francisco, New York, and Boston restricted construction in cities, suburbs, and exurbs. Because these popular regions restricted new housing, demand for living space outpaced supply. Housing prices soared, but population growth did not.
In contrast to these coastal regions, Southern and Southwestern metropolitan areas like Houston, Phoenix, and Atlanta continued to impose minimal land-use restrictions. Though demand to live in these regions grew as well, this demand led to increased housing construction and population, rather than substantially higher housing prices."
Most of the recent growth and migration in population has been occurring in these Southern belt areas, which have limited restrictions on building. Housing prices is a demand driven problem, not a supply problem throughout most of the United States.
Example: a .1% increase in shadow over Dolores Park in SF almost stopped a new 19 unit development - https://twitter.com/sam_d_1995/status/1415839145386196993/ph...
It was approved years later after adjustments - https://sfyimby.com/2022/04/supervisors-approve-shortened-pl...
Granted...this particular situation was unique as the development was market-rate units, not low-income, in a communal living layout. There were other concerns on part of neighbors (some real, some silly, and others just simply obstructive). This, along with CEQA in California have been constantly used by existing members of a town/city/neighborhood/etc to reduce additional development of any kind, not just low-income.
This is at a point where NIMBY isn't even the only acronym anymore, BANANAs is the new one the kids use these days - Build Absolutely Nothing Anywhere Near Anything.
Some more links - - https://www.theatlantic.com/ideas/archive/2022/06/how-san-fr... - ugh i know, the Atlantic, but its good - https://missionlocal.org/2021/07/developments-in-development... - https://www.ocregister.com/2022/03/16/berkeley-case-proves-c...
NIABY: Opposition to certain developments as inappropriate anywhere in the world is characterised by the acronym NIABY ("Not In Anyone's Backyard"). The building of nuclear power plants, for example, is often subject to NIABY concerns.
NAMBI: ("Not Against My Business or Industry") is used as a label for any business concern that expresses umbrage with actions or policy that threaten that business, whereby they are believed to be complaining about the principle of the action or policy only for their interests alone and not for all similar business concerns who would equally suffer from the actions or policies.
BANANA: is an acronym for "Build Absolutely Nothing Anywhere Near Anything" (or "Anyone").The term is most often used to criticize the ongoing opposition of certain advocacy groups to land development. The apparent opposition of some activists to every instance of proposed development suggests that they seek a complete absence of new growth.
NOPE: (Not On Planet Earth)To leave an uncomfortable situation, usually quickly.
LULU: Locally Unwanted/Undesirable Land Use planning.
NOTE: Not Over There Either (meaning is same NIMBY)
thanks for digging
Higher density housing is a massive component of building lower carbon footprint cities, as well as making our cities more financially resilient. It's also something that can increase equity a lot by giving people with lower incomes access to nicer areas and schools.
https://www.brookings.edu/research/we-cant-beat-the-climate-...
I lived in one throughout my entire childhood. Around half of people were OK, the other half just generally dickheads.
That has 0 to do with racism. Many UK towns have trivial populations of non-"White British".
The problem is mostly that over time (years or generations) poverty gradually turns people into a shell of what a well adjusted human could otherwise be.
And then what, you expect rich people to move in? They won't. Poor people are going to move in. And the rich people who made that area nice in the first place are going to flee, because it will turn into a not-nice area.
By contrast if your suburb is nice and quiet despite being right next to a city because decades of policy have locked it in place and it’s pricing people out… too bad? Other people need housing too and outward from an already dense city is where it makes the most sense to build them.
Stay in your concrete hellhole, and stop acting like you know what's best for everyone else. If I wanted to live like you, I'd live where you do. And no matter how much you want my area to change (because you clearly can't stand for people to live in ways you don't agree with) it's not going to.
So the side advocating for upzoning (allowing people to build what they want on their own properties) is "acting like they know what's best for everyone else" while you, advocating for strict limits on what others can do on their own properties according to your desires, aren't?
I guess we can make this consistent if you admit you're doing something you know isn't best for everyone else, and aren't even trying to. Which would be fine if you weren't using the state to support your aims.
If we don't do that, and both sides are trying to do what they think is best for everyone, this is a difference in degree not kind. There obviously need to be limits on any zoning.
> because you clearly can't stand for people to live in ways you don't agree with
You are in support of using the coercive power of government to restrict your neighbors from living in ways you disagree with, if those ways include building more housing!
https://twitter.com/issiromem/status/1557816668604141568
What your friend has observed is what happens when you keep it bottled up for years and years.
Instead of gradually moving to 4-plexes and 3 story apartments and narrow townhomes, when all that demand finally gets unleashed, it's a larger change.
Change can be disturbing, so we should aim for more frequent gradual changes than 'quantum leap' type stuff. That said, at least your friend has options in that their land is probably worth a ton of money now and they do have the possibility to get out and go somewhere more to their liking.
Tons of people in high cost cities like Seattle have no home at all due to housing costs.
It’s more important to me that people have places to live than that existing homeowners everywhere can have a neighborhood that never changes. The two are incompatible. It would be preferable for that change to be gradual, but given the current state of things I don’t see how that’s possible.
We do it on a national scale in most countries (visa policy). That's far harsher.
What differs between it being concentrated or spread out? I see you're making the argument that it should be spread out, but I don't see any explaination of the benefits.
Edit: why disagree? This is an honest question.
Low-income, high-density housing attracts problems. It has literally nothing to do with race. You could guarantee that the high-rise apartment building you want to construct down the street from me would be 100% filled with people who look like me, and I'd still oppose it.
Keep your YIMBY nonsense IYBY.
https://www.epi.org/publication/the-color-of-law-a-forgotten...
If that makes you feel uncomfortable, so be it.
Americans spend zillions of dollars every year visiting Europe, which is full of high density housing. And come home raving about how much they love it. It does not 'cause problems'.
That correlation may be because of historic and current structural racism, lack of access to mental health services and a social safety net, or a myriad of other socio-economic issues, but it doesn't change the fact that it exists.
Insinuating that anyone who brings up those issues is racist isn't helpful.
It would be more productive to say "Yes, I understand why neighborhoods might be resistant to denser, low-income tolerant development, and here are some ways we could incorporate that fact into a productive plan..." E.g. building more mixed-income developments.
Like with most policies, the details are much more nuanced.
Check out the history of the Gropiusstadt in Berlin:
Every time I’ve seen this type of argument brought up, it’s fallen flat when the same infrastructure is built here because it does end up working. We’re really not so unique.
And yet, if I suggested that the US do something a lot of (all?) European countries do, like having to present ID when voting, I’d get an endless stream of replies about why that’s fundamentally impossible in the US (and racist, naturally). And that’s a FAR easier problem to solve than pie-in-the-sky “make everything more dense and have high speed rail everywhere and European-style public transit in every city” daydreams that are so popular.
Maybe some things really aren’t that easy to do in the US.
Complaints about this usually revolve around the fact that voter ID laws aren't accompanied with increased funding for and availability of voter ID services. Show me a law where they added Saturday and late-evening DMV services, or pop-up voter ID registration services at grocery stores, pharmacies, post offices, churches, community recreation centers, and schools.
The purpose behind these laws is quite clear. It's fundamentally unfair to add voter ID laws to depress turnout under the guise of "election security".
https://en.m.wikipedia.org/wiki/List_of_countries_and_depend...
I think it would be good to do away with these simplistic this or that doesn't work here because... The US society was remodelled quite dramatically to be very car centred over a very short time and now people say that it can't be any other way because of the geography? The US was literally different 70-80 years ago.
Look up the US Census definition of "urban." In the town where I live, three houses around me are on 100 acres collectively--not to mention even more adjacent conservation land and that's classified as urban because it's near a smaller old mill town and only about 50 miles from a major city.
>Adopting 500 persons per square mile (PPSM) as the minimum density criterion for recognizing some types of urban territory.
https://www.federalregister.gov/documents/2022/03/24/2022-06...
Which basically means anything "town-like" or higher is "urban".
So most Americans live in urban areas even if they are in a tiny town in the middle of nowhere.
Urban in the sense of "don't need to own a car" is a much smaller slice--especially if you aren't adjusting your expectations.
Which doesn’t mean that the same infrastructure you’d see in a dense European city would make sense in your town, mind you. I just think that Europe and America aren’t as incomparable as some people seem to think.
About an hour drive from a major city.
Though not that different really from small English countryside towns I've walked through.
It seemed bizarre that even "one strip mall" towns didn't have certain categories of business. Down in the south, you can't measure a mile without hitting two serviceable Tex-Mex restaurants.
Up north? The nearest Tex-Mex is often 30 minutes away, and the nearest pizza place (which often isn't great) is 20 minutes.
The amount of violent criminality? Look at any major light rail network in America and they are nowhere near as safe as the European equivalents.
Look to Vienna’s social housing program for an example of this done very well. That doesn’t look like it attracts problems, now does it?
The reality is that in a suburb far from infrastructure, investors won't want to build a 30 stories building.
But they might want to build a 3-4 units building, something 2-3 stories maximum. But this is currently ILLEGAL. Only a single house is possible and ANY densification is impossible.
You go to the downtown of older cities and you don't see giant cement buildings. But you do see livable neighbourhood with buildings that are just slightly higher than the norm and can house multiple families.
Leave the suburbs alone. Every single place you people infect with your ideas turns to hell.
If you’re talking new suburbs of existing cities, well, that’s basically the only expansion we’ve done in many places. Some problems with that:
- It leads to more driving needed to get to the city (and thus more emissions, exactly what we need to avoid right now).
- If the implication is that you’re building outward because the inner suburbs are getting more expensive to live in (which will happen if they don’t densify at all and the population grows), then you’re basically forcing most kids to move far away from their parents/grandparents/etc. Some people won’t want to live near their family but many do, and being able to maintain those close family ties feels important.
How exactly is it best for the well-off? I'm curious what pros and cons it would have for them.
Restaurants are shutting down for want of workers. Because they can't afford it.
Low income workers provide valuable services in our communities. Telling them they can't live where they work creates all kinds of problems, both social and environmental - they often drive in to do those jobs, creating more pollution and traffic.
It's much easier to hire and retain staff for your business when your pool of potential employees isn't a 30+ minute bus ride away.
For the well-off residents, it means better and more consistent service at their neighborhood grocery, coffee shop, restaurant, pharmacy, etc.
Historically, the decline of most late-stage empires was triggered by spiraling economic bifurcation.
Sometimes, it's better to be less wealthy but on top of an ordered country vs more wealthy and without the rule of law as society breaks down.
Zoning laws ultimately restrict your property rights as you lose the right to do what you wish with your property. They ought to be abolished to protect property rights.
Most societies did just fine without zoning laws for the entirety of human history.
Note, that I don't approach this from the YIMBY or woke side of things. Rather, as a pretty staunch free market advocate, it is painfully obvious to me that we should not restrict people's rights to do with their property as they see fit.
As an example, I was recently going to buy land to develop into a business. However, zoning laws in this area of the county (in the middle of nowhere mind you) meant I would have to jump through endless permit and red tape. Any so-called supporter of property rights should be livid that this goes on in this country. Buying the land should be enough to give me rights to do what I wish with it. Environmental laws should deal with actual human health hazards, not how much shadow I'm spilling onto a neighboring property or how much view I'm blocking.
A lot of the issues with zoning is people attempting to own that which they don't. You don't own your neighbor's property.
The value of my house would be decimated if there were a pawn shop next door to it. I wouldn't have bought my house if that were even a remote possibility.
A totally free-market approach allows one party to reduce the use or value of another party's property. E.g. in the above, the high-rise blocks the sunlight, which will could kill any plants on the property and preclude a backyard. That combined with the lack of sunlight could dramatically diminish the value of the property. Meanwhile, the highrise increases in value because they got X extra floors that get sun.
There is absolutely utility in the sun; in the most obvious form, it can be used with solar panels to generate electricity which can be sold for cash. My neighbor shouldn't be able to build a solar array that blocks all the light that would hit my property.
Zoning laws, to me, are just a shortcut to avoid having to enumerate and manage those rights individually, per property. There's a lot of things that can contribute to the value of a property, and it would be a mess to manage them individually.
Um.. the qualifier is very broad. I would posit that the owner of the house ( and therefore part of a given community ) is in a very good position to judge whether or not a given project is, or is not, beneficial to that community. There is nothing to be quiet about. Neighborhoods that house predominantly black population tend to have houses with lower dollar value. As a result, chances to transform the owner's local habitat to one that that does not benefit the owner is highly irrational, regardless of current political winds.
<< It's also something that can increase equity a lot by giving people with lower incomes access to nicer areas and schools.
They are not nicer as a matter of fact. Part of that niceness is being funded with higher prices ( and taxes ). You take that away by adding some things NIMBYs are fighting about and the result is a neighborhood whites will flee. And cries of racism will continue.
edit: clarified value in first paragraph
Could have just ended the sentence there.
If it was up to me, I would already have moved somewhere with lower taxes, but "kids, school and so on" currently takes priority over my selfish needs.
<<They like city amenities though.
Yes. I pay for them. I better like them. Otherwise, I will be the one complaining during next board meeting.
things that people do increase when there are more people. really unclear what your point is here, and the way you said it really makes you look mean.
In my middle- to upper-middle-class mill town there's a proposal to turn a disused historic mill building into luxury apartments and residents are fighting hard against it. The main stated reason is traffic, although it's unclear to me if having a bunch of apartments will generate noticeably more rush-hour traffic than when the mill was operational. I think some folks are also put off by the term "luxury apartment" too, as this area is becoming less affordable than it once was. So they counter-productively fight against increasing the housing supply, which would actually create downward pressure on rent, even for non-luxury places, as folks in more modest apartments might be tempted to move to these fancy new places, creating vacancies for others.
I think a lot of people just don't like change, so they fight it - they want their town/neighborhood/whatever to be just the way it was in the "good ol' days", which just isn't realistic. The mill jobs aren't coming back, but we do have white collar workers willing to pay for attractive places to live. Why not re-use the damn mill building?
"Luxury" apartments are, 9 times out of 10, just brand new apartments that happen to be in an expensive location.
It's kind of like cars - a brand new Toyota Corolla is not the cheapest car out there. A 20 year old used one is going to be a lot more affordable. But you don't get old ones unless you build and sell the new ones to people who have the money to buy new cars. If there are not enough new cars, those people will drive up the price of the used cars.
Indeed, this is exactly what happened during the pandemic.
As someone who lives in a former mill town myself, feel free to write if you're curious about organizing in favor of housing. It's a lot of fun!
This is it, hilariously. Locally the railroad started building a rail yard, and everyone got up in arms and the city and county was howling and a meeting was called and the rail company politely explained that they're regulated federally and are building a nice berm around the rail yard, but there's nothing you can do to stop it.
And everyone stopped complaining, the yard got built, and nobody cares.
We need more of the straight bribery that used to happen around nuke plants - if the plant is approved, everyone gets $1k off their property taxes for X years or whatever.
if density == low:
return "This won't solve the problem"
if income == low:
return "This ruins the neighbourhood character"
if density == mid and income == high:
return "This is gentrification and soulless coffee shops!"
if density == high and income == high:
return "This is for Arab/Chinese/local-xenophobe-target-du-jour investors only"
return "This ruins the neighbourhood character"
Person moves to SF and puts down life savings as down-payment on 1:4 leveraged home...not a surprise they want to ensure they arent wiped out. A 20% decrease in value wipes out the life savings. The whole system is designed to perpetuate itsself.
Are there, other than "I don't want to live near the poors" and "I don't want to see people who have problems"? That's not a good reason.
A good neighbor who has fallen on hard times will have plenty of sympathy.
There is no ethical framework in which "I don't want to live next to the poors" is an ethical sentiment - even though it is understandable in some ways. Well, maybe in Objectivism, or "Fuck You, Got Mine". Though even an Objectivist would be hard pressed to argue against someone else's right to build whatever they want on their own property.
Right, it's harsh - pointlessly so. If your ethical system values the right of rich people to not interact with poor people over the right of everyone to have a roof over their head, that ethical system is evil.
What are these reasons? What makes them "good"?
So one group wants to maintain a financial investment that was sold to them as a sure-fire way to make money with little work and little risk, and another group wants...shelter. If it truly is the case that the desires of these two groups are butting up against each other and are mutually exclusive, is it really hard to decide which group should get what they want?
Even just a note to the city council saying "thanks" when you notice a new development is way more than most will ever do.
Of course, if responsibility suddenly means losses instead of effort-free gains, investors will try to squirm out of their responsibilities. Morally, though, the situation is crystal clear.
Well, kinda? It's more like getting paid to know the risks better than the market, or getting paid to be able to predict the future better than the market.
Little did I know when I went to claim the loss on my taxes: I could not claim the loss at all. Since it was an owner occupied house and not a house owned by a corporation, it did not count as a loss I could deduct from my income nor from my capital gains.
Houses are meant to trap and enslave common people. It decreases their mobility and roots them in areas they otherwise would want to leave. When you gain money from a house, there are all kinds of benefits. When you lose money as an owner, there are no protections for you.
The system is a racket designed to continuously inflate home prices.
Everyone participating in it should be ashamed for making their children serfs & homeless while they live in castles.
I.e, did you buy for $200k and sell for $130, or had you bought for $200k and sold for $330 which was $70k under the current market value?
The latter isn't a loss; and likely wouldn't be even for a corporation. You'd have to sell at full value and donate the $70k or something to get it to "work".
Amusingly enough, if one of the 87k IRS agents hears about it, they could go after the deserving family for taxes on the $70k windfall they got (though this one is really hard to prove, they will do it on forgiven loans).
It cuts both ways. Had you had a gain, you would not have had to pay taxes on the gains. If you had it as an investment, you would.
> Houses are meant to trap and enslave common people. It decreases their mobility and roots them in areas they otherwise would want to leave. When you gain money from a house, there are all kinds of benefits. When you lose money as an owner, there are no protections for you.
Hyperbole. For the majority of folks, home ownership outweighs the costs. Often significantly.
I, for one, would find it better to not spend my final days at the most profitable nursing home.
Answering your last paragraph: Worst case scenario, it'll probably take a couple of generations of literally living at our parent's house, waiting for the investor class to die out clenching the deeds to all houses and then finally being able to take back the world and start responsibly owning stuff. The cynic in me says that living at one's parents would be outlawed by political cronies.
Home ownership is a key part of retirement, as reducing monthly bills is critical and rent is a big one. It has been a fairly profitable investment for 30 years of decreasing interest rates, but it is no longer so.
I don't know in the US but in many European locations building of new housing has drastically slowed down over the past decades, which naturally puts am upward pressure on the market.
There is no need to demonise investing in property, which not the root of the problem (and frankly is often an ideological stance).
If anything, there should be more investment in new buildings to boost supply but very often the problem is planning restrictions.
I'm looking forward to hearing how Vancouver's vacant house tax affects their market the next few years. It sounds like a good idea and I'm glad they're running that experiment. It's hard to predict how these things go over time.
Edit: assuming the situation is where there are vacant homes and people willing (but not able to afford) to live in them.
Turns out having 10 people and 9 homes remains a problem, even if you enact more policies.
They’ve tried everything, except build enough homes. I’m under the impression this is the popular modern across North America
You made me go look and I think you're wrong. It wasn't a silver bullet (shocker!) but it did add 18,000 units to the rental market in 2019 and 2020 and raised $231 million in tax revenue that was used to support affordable housing developments.
https://news.gov.bc.ca/files/SVT_Annual_Mayors_Consultation_...
By what metric? I'm not sure that's accurate [0]. It looks like the vacancy rate has seen a steady decline and the money raised ($86.6m) helped Community Housing Incentive Program (CHIP) and Land Acquisition/Development opportunities.
[0] https://vancouver.ca/files/cov/vancouver-2021-empty-homes-ta...
> Vancouver continues to experience the lowest rental vacancy rates and highest rents among Canada’s major cities, making rental housing affordability and availability a significant challenge for those who live and work in Vancouver, and those who would like to in the future. In an effort to address this and increase the supply of rental housing in Vancouver, in 2017, the City of Vancouver introduced the Empty Homes Tax (EHT), also known as the Vacancy Tax.
If I understand your solution correctly it also puts a higher burden on the rest of the population who then have to pay higher land taxes each year (politically unpalatable) and I would argue that REITs probably have more capital to be able to pay off higher taxes where cranking up land taxes on the population makes home ownership more challenging.
The strictest Georgist philosophy would hold if you happened to homestead in the heart of Manhattan your family will eventually have to choose between paying the price for holding that piece of land hostage from the rest of society or letting someone else make use of it.
In practice, places like Denmark and Estonia make exemptions for owner-occupied dwellings.
You're literally proposing a scheme that views removing people from their homes as beneficial. Your values don't match with others. That's the disconnect.
And by the way, that increase in value over the years is because other people want to live in that area. Perhaps we should disincentivize that instead of punishing the people who made it a nice area to live in.
I expect most citizens would recognize this and any effective LVT would be politically DOA.
My point is that Americans who own one or more plots of land definitely do NOT believe they are renting that land from the government. Ownership is, of course, a degree of control and everything is a matter of degree. Meaningful LVT would be a qualitative change in a home- or farm- or business-owner’s degree of control over what they heretofore considered their property, and they’d recognize that.
I don't see how this follows. Would you mind explaining?
The LVT as envisioned by its advocates isn’t like that. It’s a fee—largely determined by market forces—to continue to occupy and make use of “your” land. If the government can insist you pay some market-set cost to remain on a plot of land, you don’t own it in the way we classically think about land title ownership. You’re not the market participant, the government is.
Suppose you do a “buy and hold” strategy on a neighborhood that is gentrifying. The increased taxes you pay each your will eat into your profits. If you sell, the buyer will have have to pay those taxes too, so the value will be lower.
Capital is make believe, a fiction, rows in a database. Physical laws are mandatory, everything else is a shared delusion or a suggestion. The rules can change at anytime with enough will.
Broad strokes, if Capital is primarily serving a small minority while the majority suffers for it, the tool (capital allocation) is broken and it is time to reevaluate the implementation.
With regards to the IRS, even though there are occasional delays, I’ve always had a top notch experience even when my own mistakes would have incurred thousands of dollars in penalties (which were waived more than once). If you want effective delivery of government services, you must fund them at the necessary levels. Effective government is not free.
For those concerned about sovereign debt, that should’ve been thought about before running it up on unnecessary conflicts (which there have been many!) and other unproductive efforts (tax cuts for the wealthy). Real needs coming up, and no excuses because of previously suboptimal governance. Lots of assets and wealth in the US to tax for those who really want the debt line go down, but if debt line doesn’t go down, nbd.
You could imagine other programs that could encourage renting, for example (no thought has been given to this, just an example/idea) - federal guarantee that you would pay NO capital gains tax if you could prove that you continued to rent out the property and never increased rent more than 1%, say.
A large % of the high density housing being built around Seattle is rental only, all that does is funnel money out of the city. Residents don't get to build equity, and rental prices keep going up year over year, vs mortgage payments that, except for the property tax portion, stay the same over 30 years.
Also large rental complexes don't build communities.
Someone who bought a small 2 bedroom house 10 years ago and who now rents it out, those people aren't the problem. Heck odds are they are renting that 2 bedroom out for less than what a large corporation would charge.
I used to live in a large, over 100 unit, town home complex.
Central to the complex was a very large open green space, larger than most suburban yards.
Over the years, about 50% of the units are now rented out, typically at a price lower than in the nearby built for rental apartment complexes. Individual landlords prize stability in tenants more than maximizing short term value, also if a person is only renting out 1 unit, that unit being vacant for a month or two is a lot of lost income, raising rent by $200 and then losing out on 4k of rental income due to having to lose then find a new tenant is not something a smart landlord does on a yearly basis.
Prior to that I lived in a luxury condo complex in a very nice area that was again, lots of rental units. From what I gather, soon to be retirees had bought in and were renting the units out until they they needed to move into them. They also prized stability and boring tenants over maximizing monthly income.
The point here is, within reason, today's fancy high end condos are tomorrows reasonably prized housing.
Will the 50 story skyscraper condos ever be reasonably prized? No, of course not, but if someone dropped 150,000 units of medium density housing into Seattle, I bet that in about 5-10 years housing prices would start to come down.
The other issue I have is the absurd number of 4 story town homes being built, which should instead be 4 story condo complexes. Insane square footage is wasted on stairs, and no one over 35 can live in those places, and raising a family in them is either impractical or horribly annoying. (Good for baby gate sales though...)
If it were up to me I'd remove elevator requirements for 4 and 5 story condo complexes in return for having the bottom floors requiring ADA units.
For example, many small-time landlords would have been better off just buying a much more valuable property to live in themselves, than buying one to live in and one to rent. Eg, buy a $400k house instead of two $200k houses and renting one.
There definitely needs to be some rentals, but I believe that there needs to be controls over how many and the rental price.
Also, rentals tend to be higher density than houses that are owned. If there is a housing crisis, this seems like a desirable thing. Ex: roommates (yes, possible with a house, but less likely), etc.
aside from the federal tax breaks and very high amount of leverage ($40k to get a loan on a $200k unit that you _might_ be able to resell at $300k to get into a larger $400k unit that you _might_ be able to resell at $500k to get into a larger $600k unit...), I never saw, and still don't see, the benefit of home ownership.
actually, that's not true. for people with families who need (or "need") stability, home ownership makes a lot of sense. you're going to be in the same town until the children reach maturity...might as well get a loan on a house since you're going to stay put for a while. cheaper than hoping that your landlord doesn't bump the rent up.
however, we are not having children, have moved three times in the last six years, and spend a lot of time traveling. i very much like emailing my landlord "hey, weird noise" and they bring in their contractor friends to look into it on their dime
i do hate how there is this sense that you should feel "bad" for not owning, i.e. renters are always pictured as troubled people in financial distress who don't have a choice but to rent.
One of the biggest benefit of owning is a hedge against housing inflation. Its not a perfect hedge, I do acknowledge. As property values increase my taxes go up, as housing materials increase in cost the cost to repair it goes up. But the amount my taxes will go up in a year is far less than how much I've been seeing rents shoot up.
They're "small" expenses but if you track out the various things and divide them over the ownership period, they do add up.
E.g. - current house, here 5 years, so far: furnace and A/C, $9k, fence, $14k, landscaping and misc, $2k, tools and supplies, $3k, plumber and window repairs, $2k. So about $6k a year, double my taxes and half my mortgage again. And I haven't even hit the big ones (and didn't count appliances as those were "optional" purchases).
Owning is still a good idea for many, and has benefits, and renting will almost by definition be more overall, but it's not a given. You note the main advantage - stability. If you're on a fixed loan (whether it be 5, 10, 20 or 30 years) your payments are calculable years in advance and you get to pay much with tomorrow dollars, which are almost always worth less than today dollars.
But you do have to want to stay in the area for years.
On the other hand, you have to count the mortgage interest as a cost but not the mortgage principal repayment.
Obviously, this won't hold true for all time-frames, and I'm not even necessarily a fan of thinking of primary residences as investment vehicles, but if you're going to compare it for opportunity cost it's still not necessarily a home run comparison.
Rent controls are unfortunately very similar in key ways. They've been tried, and the results may not quite line up with what you might be hoping for.
Technically true, but practically false. Yes, zoning exists in most of the US. And yes, most people have no trouble converting a region to residential zoning. I've known people on both sides, and most of the problems are the opposite - people who want to run businesses in a residential zone. I've yet to meet a single person who couldn't go the other direction.
There's a process to getting approval to build a house/apartment complex. You simply follow the process and get approval. Most of the US is not the Bay Area, Seattle or NYC.
So yes, you're absolutely right, technically true. In practice, they fundamentally don't do what the user wants them to do because that's not what caps are capable of doing. The tools don't work that way.
Renting is very much a poverty trap where the poor with bad credit get poorer and worse credit.
It's still a roof over my head regardless of how much it's worth. And more importantly, how much it's worth is completely irrelevant unless/until you want to sell. And if you do want to sell, and home values have crashed, then the next house you buy will also be cheap!
Yes, it often seems the rental cost will be less than your monthly payments, but do realize that you lose all the rental cost, but not all your monthly payment.
There are online rent vs buy calculators that you can use to generate these scenarios.
https://www.calculator.net/rent-vs-buy-calculator.html
Plug in negative appreciation for property values and watch how the comparison tilts.
* It gives you a fixed monthly houseing cost. No "10k new roof" or "1k new stove" suprises hit you.
* If you are say, saving 50% vs buying, you can put this difference in an index fund. This would over 10 or 20 years potentially give you a LOT of money over buying.
Look, buying is mostly great. It's one of the biggest builders of wealth for most Americans. But from a purely numbers game, it's not so clear "rent is just losing money".
2. So does a fixed-rate mortgage. Even better, refinancing a mortgage during a low-rate period (e.g. 2012, 2020) actually lets you reduce your payment, while contributing more to equity. How often do you have an opportunity to reduce your rent?
3. Saving 50% of what exactly? You can put the down payment into an index fund, yes, but remember than the house is an asset that gives you 5x leverage initially, assuming 20% down. You can't get 5x leverage at your broker, and even if you could, playing with 5x leverage on the stock market is insanely risky compared to real estate.
> But from a purely numbers game, it's not so clear "rent is just losing money"
It's pretty clear actually. They've compared retirees who rented all their life vs home-buyers. The difference in wealth was striking, a factor of 6x-7x if not more.
What's not clear is whether that trend will continue in perpetuity under the conditions of declining population.
Home values rising historically is good, but I don't think a clear win through all time. There is no instrinsic reason a house value should rise faster than inflation. You can always build a new house for cost X. Buying existing means that new house supply is too low or too costly.
But for what I've paid in rent over the years, I could have paid for entire dwellings. And had the freedom to fix and alter things per my desire.
Renting is the opposite of a fixed monthly cost, since rents go up all the time. If you rent, you can't tell me what your rent will be in ten years. I can tell you what my mortgage will be, exactly the same as today.
> No "10k new roof" or "1k new stove" suprises hit you.
If these bother you, you can sign up for house maintenance insurance programs to give you a fixed monthly cost. I'd recommend against that since they make a profit off you, you're better off putting that money into an investment account and withdraw from there when you neeed it.
New roof costs are pretty much never a surprise. You should know when you buy the house how much life is left in the roof and plan accordingly. If a natural disaster occurs that destroys your roof, insurance will cover it.
Appliance costs? Yeah, they are often surprises. Hard to find reliable appliances any more.
Oh, and it's hard to get a $10K roof these day :-)
> If you are say, saving 50% vs buying, you can put this difference in an index fund. This would over 10 or 20 years potentially give you a LOT of money over buying.
Yeah, I always wondered if I should do this analysis for my house, and I'd be curious on studies on how this would play out in most cases. For me, right from the get go the rent on a comparable house exceeded the monthly interest + tax + insurance (excluding principle). The tax benefits more than paid for all the maintenance costs. So the main questions would be:
1. How much would the down payment be worth in an index fund?
2. How much would the principle payments monthly in an index fund be worth?
I suspect that I'm ahead of the market significantly, what with all the crazy house appreciation (that alone is about 8x my down payment), and rents are quite high - easily increased by over 70% since I bought the house.
But once it's paid for, it's paid for. Now you just need maintenance and taxes, easier on a fixed income. And it's easier to build intergenerational wealth if one of your children doesn't need to blow money at all on rent or home purchase.
When the new roof goes in, what happens to you as a renter? I'm pretty sure you still have to pull together 4k for moving/security deposit/first several months
Only a fool treats their dwelling as an appreciating asset anyway. It's subject to market forces.
If you recall how these things were done before credit scores it was not pretty. Without them lending would virtually cease to all but the most obviously creditworthy people.
I generally agree the system for credit scores needs to change. In particular it should not be controlled by a veritable monopoly. But this does not discount the utility of it in general.
Stuff like bonus depreciation - yeah, let's get rid of that. Or 1031 exchanges. Regular folks cannot benefit from it.
The owner-occupied mortgage interest deduction serves to put owner-occupants onto the same footing as businesses; it’s not an incentive that gives them preference, but rather (closer to) equal footing.
Is there antitrust statute for housing stock?
That it's come sooner than most predicted is likely making those ghouls salivate even more.
Needless to say, we turned him down and just plunked our money into index and sustainable funds and chose handpicked stocks instead.
Other laws which discourage investment will also discourage construction.
People in ivory towers whipping black-box abstractions of businesses into needing to produce more profits through wage theft, cost-cutting by skirting regulations, or outsourcing to unregulated places.
There's little oversight throughout the process, and filled with the kind of people that want to turn everything into a business... and that have proposed "treating but not curing cancer" [1].
[1] https://www.cnbc.com/2018/04/11/goldman-asks-is-curing-patie...
In fact, we should probably repeal it altogether - in theory it subsidizes home ownership for the poor and middle class, but in practice the only people who take it are those who itemize deductions, which the poor generally don't.
I'm aware that interest is generally deductible for businesses, and I'm suggesting that houses should be an exception to that. We subsidize most business borrowing because we want businesses to borrow and invest in stuff, and we should have exceptions for things we want to discourage investment in. Sure, it's difficult to imagine how to keep a giant corporation from finding a way around this, but we have difficulty getting giant corporations to pay taxes generally. It would still make sense to narrow or end the subsidy to discourage individuals and small businesses from investing in RE so heavily, and consider other approaches to discouraging larger corps.
As an investor, you don't have a mortgage interest deduction benefit. You have a business expense benefit.
There’s a difference between owning two properties and owning a fund of thousands of homes (PE and REITs). The former is fine, the latter should be banished
What I think you are trying to say is that it is preferable that the investment in housing be made by the people who are going to live in the house (or by the government) and not by entrepreneurs.
Disgusted, I realized the harm that REITs and private equity are doing to housing markets, and wanted nothing to do with it.
We need legislation that discourages housing as investment if we are to maintain housing as shelter. Unlikely, as wealthy folks who make money with the status quo run things.