> We don't have the space to incorporate a city, or urbanized living, within this small village of a community that we have," says Julie Lee, president of a neighborhood civic association and founding member of Arlingtonians for Upzoning Transparency, a group fighting the plan.
Comments to these zoning fights are full of gems like this. Arlington is about the size of Buffalo NY and 50% denser. It hasn’t been anything other than urban in my lifetime. Maybe this lady is 90 years old who knows.
An interesting question to ask is why do we always seem to grow by increasing density rather than establishing new small towns? Leon Krier's Drawing For Architecture contrasts over-expansion both with excessive density and excessive sprawl and by duplication.
It seems to me that if it were legal to do so there are plenty of tiny towns that could grow to the size of a small city like Arlington or Buffalo.
As long as we don't have teleportation there are network effects to concentration. I don't like it though, and would take a pay cut to move to a more roomy area.
> An interesting question to ask is why do we always seem to grow by increasing density rather than establishing new small towns?
That would be increasing the density of the rural area the new small town springs up in. New towns do spring up in places where they can, but it's usually either some company drops a facility there and then housing pops up to support the facility as people decide they'd like a shorter commute, etc; or it's in the outskirts of built up areas, but then people complain about sprawl.
> why do we always seem to grow by increasing density rather than establishing new small towns
We result don't expand by increasing density, this has been generally banned by zoning over the past 60 years.
We mostly expand with sprawl, which causes long commutes, massive pollution, social isolation, bad health, and all sorts of other things. Which for people who want it, great, enjoy! But we ban density, and don't ban sprawl.
As for expanding other towns, this must be done by those with the capital to buy a house, or start a business to offer jobs, etc. Young people starting our do not have these things, and we need to accommodate them somewhere. To everyone who suggests building in a different small town, I suggest that they be the change they wish to see and move out to make room for somebody else.
Because cities give so many more opportunities. We sortof do what you suggest, but the new small towns are called suburbs, and being close to the city is their draw.
Most small towns are not thriving despite the lack of legal barriers to their development.
Usually the reason is a lack of reasons to locate there. Even in the WFH era there are reasons to locate where existing good services and amenities are; a lot of amenities (niche business or cultural stuff, etc.) needs a critical mass of people to support it, and small towns generally don't have the mass. It is really hard to start up brand new septic or water delivery or whatnot in the middle of nowhere.
Also, consider that it doesn't take that many people to overwhelm a small town's population. What I hear in the Western states where remote WFH is becoming popular, is now WFH workers are pricing out existing residents, because rural salaries cannot compete with WFH wages. So WFH has mostly just resulted in exporting the housing crisis without significant easing in the places that had this problem pre-WFH.
> why do we always seem to grow by increasing density rather than establishing new small towns?
By "establishing small towns" I assume you mean suburbs.
It seems to be the opposite. Cities with tons of flat land around them (e.g. Houston) tend to expand their footprint and maintain density. It's mostly areas that cannot (e.g. SF, LA, NYC) that increase density. Once you hit natural limiting boarders, you have to build up.
I was noticing that west coast cities have higher density than rest of country. One cause is that many had big booms in the 20s and 50s which gave them walkable suburbs. Second is natural and legal boundaries that slowed growth. Bay Area and Los Angeles are surrounded by mountains. Third is that land prices were high and it was most profitable to squeeze in houses.
The problem the west coast has is not replacing housing once things got full and prices increased.
No I mean small towns with their own urban/town center. They wouldn't be as dense as a cities downtown but would support 2-4 story mixed use in a walkable core.
Every suburb I've ever lived in has been prone to ever-increasing low-density sprawl and resists building even a 2nd story for anything other than residence. I can drive past miles of 1 story strip-malls in virtually every suburb in America, and only rarely do I see an 2 story doctors office, or maybe a 3 story apartment or office building.
You have it backwards. We DO grow by establishing new "small towns" (better known as "housing developments" or "mixed-use developments"). Increasing density in a way that resembles older "small town" development would certainly be preferable, but is difficult with the transit policy status quo in much of the country. TODs are an example of attempts to do so anyway, with mixed results. The uncomfortable truth of our housing policy woes is that they're intertwined with transit policy and everything connected to that (American manufacturing and business, energy, political legacies, etc.).
New towns are less efficient than densifying existing cities. With new town, have to build all the infrastructure. New roads, new schools, new utilities. The transport is less efficient by driving everywhere. Single-family homes are less efficient than multi-family. Small town doesn’t have all the services so people drive to the Walmart or hospital. Or city if they need something special.
The same housing in Arlington is super efficient. Tear down house, build apartment building. Connect to sewer, roads, etc. The residents walk to the Metro stop.
A lot of the small town problems also apply to sprawl and exurbs. It is possible to build more efficient small towns, older ones have a walkable core.
As others have said, that’s what we do. The area west of Arlington, VA is a great example. In the movie houseboat it’s depicted as “the country.” Even when I was growing up in the 1990s, it was heavily farmland after you got west of Reston. Today, Reston is a major employment center and all the farmland in Loudoun county has half a million people.
Dunno why anyone downvoted you, it is an interesting question. It also has an interesting answer - turns out we get a much more complex and pleasant society if we cram everyone in tightly in a city.
The is a lesser-known branch of economics called economic geography that studies what happens when you have big concentrations of people. Turns out you get much better services and it is cheaper to support everything (eg, one big trainline which costs a lot but gets huge amount of use, one big market where you can buy and sell everything, etc).
The short of it is that small towns are not a bad thing, but if you want to live a comfortable life with lots of services and material luxuries then you had best seek a city.
Understanding that there is a mutual dependence between the countryside and the cites, it seems like in the past the limit on city growth has always been sanitation and the ability of the agricultural base to support the urban population with the labor that is available in the country.
I'm curious if you know any good entry-level or popular books on this topic.
No one is stopping anyone from building a single-family neighborhood, if it makes economical sense in the area. Neighborhoods are usually developed as a unit.
I live in a seven-unit apartment building on a block that is otherwise entirely single-family homes. It was built in 1890. As far as I can tell, none of the residents here could be noticed as out of the ordinary by anyone outside of our building; I have my gripes with the neighbors downstairs who play their TV too loud, but it has no effect on the rest of the neighborhood.
I can't say as much, however, for the house next door, which is rented by a group of college students who regularly hold loud parties with dozens of people over. I'm sure they're pretty conspicuous. In an economy where it is already very common for multiple adults to rent rooms in a "single-family" home, it is a mistake to blame people's behavior on the type of building they live in.
> I hate how that's phrased. No one is ending single-family housing.
That would be a fair complaint, if the word “housing” had been used in place of “zoning”. Single-family zoning is a legal restriction that allows only single-family housing. Ending it is not the same as ending single-family housing.
If you are going to complain about phrasing, you should complain about the actual phrasing.
I got the same impression from the headline. When trying to communicate I have found that it is best to be understood as opposed to being dictionary correct. Personally I would've went with "allow multi-family housing", but I also probably wouldn't click on the article because it's just saying that making smaller homes allows you to have more of them over a given area.
I suppose it depends who your audience is. If you’re writing for people who understand what single family zoning is, then suddenly inventing new terminology is likely to confuse them.
People who live in areas affected by single family zoning tend to be very familiar with the term.
People don't understand that the single family zoning is actually an apartment ban. So even if it's technically correct, it scares a lot of people unnecessarily.
Otherwise intelligent people have their brains broken when it comes to discussions about housing. We need to pick words carefully to not confuse.
I agree with this (words mean things), but have also been told to my face in community meetings during attempts to upzone parcels “we don’t want more people here.” These are not fancy burbs, average SFH value is ~$300k. The approach with the uneducated is different than that with an adversary.
Until more state laws (ie California’s recent legislation) are passed where density developers can reply “that’s a shame”, NIMBYs rule. NY is gearing up for a similar fight.
And then NIMBYs call efforts to allow taller buildings “one size fits all”, whereas it’s the exact opposite: the status quo in these neighborhoods is one size (SFHs only) fits all.
As far as an uninformed reader is concerned (think either the typical cable news watcher or the typical apolitical person), "ending single-family zoning" reads as "banning new single-family housing". Most voters, let alone most people, are every bit as clueless about public policy details as the people who held up "keep the government out of my Medicare" signs at the protests against Obamacare so you need to be really careful to explain what the existing policy is and how it is being changed.
> As far as an uninformed reader is concerned (think either the typical cable news watcher or the typical apolitical person), "ending single-family zoning" reads as "banning new single-family housing".
I really don’t think that’s true. Yes, the average citizen is uninformed about the average policy issue, but that alone doesn’t support a characterization that most unsophisticated readers has the same very specific misunderstanding of a particular policy issue when identified in the usual terms. There are some issues where something like that is the case, and there is polling to suggest that, but just making the unsupported leap from “unsophisticated citizens” to “this particular misunderstanding” with no evidence is not warranted.
This has been a major point of confusion. A lot of people respond as if their house will be torn down against their will and replaced with an apartment building.
It would be more accurate to say our experiment with apartment prohibition is coming to an end, and many American cities are returning to the rules that were in effect when all their best buildings were built and neighborhoods formed.
Nope, just needs to be more building. New luxury apartments will make the old stock cheaper. The fight over the number of affordable units in every single new development slows things down and exacerbates the affordability problem. Remove as many of the barriers to development as possible, and the problem will be solved.
How often are they new and how often are they "newly renovated"?
As I got a downvote I'm going to edit this and say I used to pay a little over $800/month for a particular apartment. About 7 years later I looked back at the complex. It had been completely remodeled and the cheapest unit was over $1600/month. How often is this happening?
From a market-level perspective, that's basically a no-op unless they're changing the number of units. They're increasing their own pricing power relative to others in the market, but most of that overall increase over the period you saw is probably due to the demand/supply imbalance growing for that whole market. The market clearing price of a place to live just increased by a lot.
But I'm talking about new developments. If you ever go to city council meetings where development proposals for new high density housing developments are discussed, you'll see a small slice of the incredible hassle they currently go through. Everyone wants to have a say in what others do with their land, numerous rounds of revisions are frequently required, and that means it's incredibly expensive to shepherd one of these things through. Fundamentally, those units cannot be cheap if that's what it takes to build them.
They can only do that as long as there is market demand. And there would be an increased demand in regular housing if you tore those down. Eventually (or immediately) the demand for regular homes would exceed the demand for luxury homes. Then it becomes a greater risk to build luxury homes vs. regular ones. So the developers choose the lower risk option..
I'm somewhat familiar with YieldStar and other dynamic rent-setting systems. I don't think it qualifies as price fixing, in that only a small percentage of the available stock uses it. If a large percentage used it, then maybe there'd be a case for it, since I'm guessing it uses advertised rents of nearby availabilities in addition to the in-building measures, so it'd be playing off of itself. But that wasn't the case when I left the industry, guessing it's still primarily big REITs that use it. It's pretty hard to get small landlords to use any tech at all, and they represent a huge portion of the market.
If housing stock expanded a lot, landlords would lose the pricing power that YieldStar is taking advantage of. The lack of surplus housing in desirable areas is the root problem, and the difficulty of getting new high density housing projects approved and developed in those areas is at the core of that. The vacancy rate of rental housing nationwide has been dropping for years, and that includes a lot of places where people aren't clamoring to live.
I see it as a form of a stand-alone complex. There are multiple companies engaging in this behavior, independently, but resulting in what resembles a concerted effort. However, for renters (and their representatives in government), the concern isn't so much that it's an accident of spookily aligned intent/incentives as it is that 1) it's clearly pushing up rents (beyond affordability), and 2) the companies engaging in it are aware that something they are doing is helping to drive these increases.[1]
I'll also note that a falling occupancy rate is not mutually exclusive with the alleged practice of property managers warehousing inventory to prop up pricing. I also wonder how much the common practice of offering "new renter specials", rather than simply lowering rents to meet demand, contributes to ever-increasing "market rates."
The percentage of landlords using it is likely too small to have the ability to engage in price fixing. They drive prices up, but only because the market clearing price in a lot of cities is higher than where they're currently priced.
Do you have a source for property managers warehousing housing inventory? It doesn't ring true, at all.
I did a check of my municipality. 80% of the apartment complexes in the area use 3rd-party software of the like in question for their property management. Their capture of the market is likely sufficient to drive prices, which is why at least one company (RealPage) is facing multiple lawsuits alleging price-fixing. As for warehousing, it is a known issue in NYC and likely used in other places.
I wonder what your interest is in handwaving these issues which are well-known and being acted on. You seem knowledgable except where it would tend to hurt your argument that everything is as it should be.
I don’t have any interest in it, it’s just not my understanding of the market. If I can help people avoid an inaccurate understanding of the world, I’ll try to help that, and if I’m the wrong one, then maybe I can learn and change my mind. I could certainly be wrong, it’s been a while since I worked on this stuff.
When you say 80%, what are you using to find those/take that survey? I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. This is also why you should never trust stats sourced from those sites, they don’t have a representative view of the market (a lot of news stories cite them uncritically when talking about rent trends).
Warehousing, care to cite something so I can read about it?
Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. What are you wondering about it?
>I don’t have any interest in it, it’s just not my understanding of the market.
I'm just going to say that I don't think you're being completely honest, and leave it at that.
>I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings.
We are talking about professionally-managed properties, so this isn't a problem. I don't think basement apartments, ADUs, etc. are representative of most people's experience with renting 1-3 bedroom apartments, particularly in my area, and I would be very surprised to find that they had a significant effect on the rate set for units in the large buildings and complexes where most renters live.
>Warehousing, care to cite something so I can read about it?
I will not. It has been written about extensively. It is suspicious that you would want to avoid an "inaccurate understanding", but have yet to look it up yourself. I would expect someone truly and dispassionately interested to have heard of it prior to this conversation, as it is evidently a significant issue wrt the nature of the contemporary rental market. A simple search will return many articles about it.
>Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount.
So, for example, a unit is rented for effectively $1300/m, discounted off a $1500/m base rent. The next year, there is no discount, and the unit renews at 5%-10% over the base, not discounted rent - potentially a $300 difference monthly. You don't think that this potentially distorts prices in the market?
One of the ways to address that is to tax vacant housing units. For example, you could double the property taxes for any house that is vacant for more than x days out of a year and the x could be surprisingly high. For multi-unit properties, the property taxes could be multiplied by 1.y where y is the percentage of vacant units or by 2 if all properties are vacant. The revenues from the tax can then go towards a good cause like funding homeless shelters.
If there's a need to not only put capacity on the market but fill it, the market will drive rent prices down because it is better to get something for your vacant unit than pay double the property taxes. If that doesn't work and there's still tons of vacant housing stock that is being held off the market to drive up rent, you can always keep raising the vacant housing tax until it works.
Price-fixing that is not done via consolidation is ultimately unstable from game theory point of view.
There's very strong incentive to defect from "optimal vacancy rate" and eat outsized profit compared to the rest of competition. Making building easier makes consolidation harder, as outsiders are now potential defectors as well. AFAIK we're not in monopoly situation (yet?) for rental properties.
Most of YieldStar value proposition on the other hand is ultimately just a price discovery mechanism. Prices raise because people *are willing* to pay that much for apartment. People are willing to pay that much, because supply doesn't keep with demand.
Yep, well put. It's only able to boost rents because the market clearing rate is higher than it is. Vacancy is extremely expensive, and there are too many small market participants to make it worth taking vacancy in exchange for boosting the rents on the other units.
It is a mistake to ignore the power imbalance between landlords and tenants, especially when the landlord is a business. Sure you can argue that the market is out of equilibrium which causes this inflation in rent, but to say that is the only reason is a blatant oversimplification.
Rich landlords will keep overcharging for rent as long as they are able. And more buildings just gives them more opportunities to exploit more renters. That is unless the renters strike or the government enforces rent control.
If developers build at a faster rate than new renters want to move in, the rent will decrease, because it will again become a competition between landlords to try to reduce their vacancy rate, for the same reason they're currently increasing rent - revenue maximization. Vacancies represent a lot of lost revenue.
Please, don't agitate for more rent control, it's such a bad idea.
Like I said, this ignores the power imbalance. A business has far less to loose by letting an apartment go vacant for a while, then a renter has by living on the street for even a week.
This becomes even more true as the business has a larger portfolio and more assets to devalue. It is in the common interest of all landlords to keep the rent high, so if they are able to sink the cost of keeping an apartment vacant, they will do it if it means that that cost will be realized as profit in their non-vacant units.
Tell me, why do you think rent control is a bad idea? For me it seems only bad if you are a landlord.
New apartments are inevitably going to be higher priced. Unless we're just going to deliberately build units with worse insulation, earthquake resistance, etc. all new construction of the same square footage is going to be higher value. Today's "luxury" apartments are tomorrow's affordable apartments. Today's dearth of affordable apartments is due to lack of construction in the past couple decades.
“Luxury” is often a marketing term used for very much not luxury apartments. There’s nothing “luxury” about a 900 sqft apartment that happens to have decent stainless steel appliances and a modern look.
New apartments (like new cars) are always priced higher than older buildings, but give it a few years and prices drop.
I usually use the terms “luxury apartment” and “arbitrarily high rent” to mean the same thing. A luxury apartment is simply an apartment with higher rent, that is the only “luxury” about it.
This is very true. I’ve been in a bunch of “luxury” apartments in the Boston area…the finishes are modern maybe but rarely luxury. Vinyl flooring, cheap (albeit stainless steel) appliances, small bathrooms, etc.
True affordability only occurs when market rates are affordable. That means more units, period. Set aside schemes are always inefficient and often corrupt.
Affordability is a market dynamic. If you look carefully you will find that newly built housing almost always commands a premium and truly affordable housing is almost always older stock. It is similar to but not exactly the same as used cars compared to new. There are cheaper cars but truly affordable transportation is used. It is also the case that as long as supply is highly restricted the prices will be as much as the wealthy side of the market can bear.
An increase in housing supply can only put downward pressure on prices, even if the majority go to rentals. There's no magic solution to high demand for limited land, the best we can do is build up.
Why is home ownership important? It’s a serious question. It’s currently important within the context of houses as a form of appreciating wealth that can be passed on to future generations, but a big part of the reason we have a housing crisis is due to conflating housing and investment.
We need to step back from the notion that houses should be significant stores of wealth and concentrate fully on creating enough housing so that everyone can comfortably afford a roof over their head. Using the scarcity of housing to build wealth is just short-sighted and will always lead housing shortages because the housing value above construction cost is only maintained by way of scarcity. If there’s enough housing for everybody, which should be our goal, home values will go down and the importance of owning a house goes away.
There's a perception of "renter mentality" being synonymous with indifference and lack of personal investment into the neighborhoods. E.g. ownership communities tend to have cleaner streets, less crime and fewer annoyances (like loud parties or improper parking) due to owners acting upon such infractions faster.
I.d argue it is confusing long and short term investments. If you will live in the same place for at least 40 years a house is a great investment because you live there rent free after it is paid off. This only works if you pay it off, and continue to live there.
Wow, it’s pretty simple. Owning a home means you don’t pay rent. You pay a mortgage and in such a case you earn equity. When you pay rent, your money is gone every month. You may pay it off and then live without paying the mortgage but just up-keep and property taxes or you may sell the house even before mortgage is paid off and possibly even earn a profit but certainly recoup much of your mortgage payments at the least. Your point about it just being about passing wealth to future generations seems to indicate you are just seeing home ownership through some extreme leftist lens. You may not even choose pass on anything and it is still financially beneficial. Why is earning an income important? That’s a “serious” question too. You say we “conflate” housing and investment, housing is investment, we don’t have to conflate these things, they are intrinsically intertwined because we live in a world in which scarcity exists, despite what the left might tell you. The rest of what you are saying is just very naive.
I agree with everything except that the importance of ownership would go away. There is a lot you can't do while renting, things that would improve your day to day life in ways you prefer. You can also just be moved on at any point, say the house sells or the landlord changes heart. Of course there are protections but renting is never as stable as ownership. It's a necessarily transient arrangement.
There are two parts to buy house. One is hedge for rising rents. You pay the same mortgage and then don’t pay anything. Decades ago and still in unpopular areas, house prices rose with inflation and weren’t really investment.
Two is investment. Land prices in popular areas started rising because of demand. Housing turned into way to make money and build wealth. But it is really land speculation.
You can be invested in your home in more than just a financial sense. If you don't own it, you have no incentive (or even much ability) to improve it. The owner who doesn't live in it is also incentivized to do the bare minimum to keep it rentable. If you you're going to live somewhere long term, it's nice to own your surroundings so that you can improve them for yourself, and to have neighbors that are similarly motivated and incentivized. Society works better when everyone's self-interests are aligned.
An underrated problem is that many suburbs use zoning to make small houses impossible to build. Urban YIMBYs don’t talk about it because they hate suburbs but forcing everyone to have a huge lot makes home ownership far more exclusionary, which of course was the intent.
Let me tell you about Spain. It appears to be a relatively low density country, but if you look at where people live, an extremely high percentage of the population lives in an apartment. Your average Spaniard lives in a square km that is about as dense as NY's upper east side. Therefore, based on your argument, you'd expect a lot of renters, right?
As it happens, While about a third of Americans rent, only about a fifth of Spaniards do: 78% of households live in an apartment they own. That's because regulation is set up in ways that make renting a pretty bad deal. I live in some midwestern suburb, and half of my street rents, as companies have outbid individual sellers when the people that originally bought their houses died or downsized. They are owned by Delaware companies, and good luck figuring out who is really behind them.
So while it might be a good idea to minimize renters, the tie between rentals and apartments in urban living is just regulatory. Suburbs are in no way immune to being purchased by investors: It's just that investors try to aim for properties that are expected to grow up in value the fastest, and it just happens that those tend to be in urban centers and in suburbs that are very close to said centers.
So really, limiting building dense housing is, if anything, going to make the problem worse, as it limits housing supply. If you want to prevent renting, make it a worse deal, tax wise, for companies to own and manage rental property. Again, the very dense Spanish cities do a better job at this than the US does.
Anecdote but dated a Spanish person who claimed that housing is very static for them and that the idea of young people moving out and buying their own place is extremely uncommon
It is critical that any housing solution incorporate equity, in my opinion. Taking away home ownership so we can all pay apartment owners for our entire lives is wrong.
You don’t need a lawn to have equity. There a plenty to frameworks that can offer equity in these recently legalized multi-family dwellings. Condominiums, duplexes, townhouses to make a few.
Good point. Thank you for clarifying. The legalization of multi-family homes would not prevent this trend but zoning for owner occupied units seems like a reasonable policy to shift the outcomes.
Renting has some benefits over owning. Particularly if you are in a stage in life where it's valuable to change your city.
In America, we have policies that subsidize owning over renting, like the mortgage interest tax deduction. I don't think we need more policies to make renting more expensive.
In the US, condo/apartment ownership is very rare by volume compared to rental apartments. I'm saying that rental apartments should not be the substitution of choice for single-family homes.
There are pros and cons. Renting can be a great choice. If you cash out refinance your house often as many do, then an apartment probably was the better long term choice.
I think that any delay of a solution needs to be weighed against the massive inequity of letting the status quo continue.
The status quo is of ever increasing unaffordability, means ever increasing displacement and gentrification. There's a cost for waiting for a perfect solution. Adding more housing now reduces rents for all compared to not doing anything, so even if it's not the perfect solution, we must start enacting parts that help.
Refusing to take any action is in itself an endorsement of the bad outcomes that are happening right now.
"Buying apartments" is not something that happens for most places in the United States, so no. Condos and townhomes exist, but are not what I call the norm compared to houses and apartments for rent.
I know people can rent single-family homes, but I am also against institutional home-ownership. My point is that living-quarters ownership should be more universal.
>Nobody's trying to "take away homeownership"
When houses come down and apartments go up, they are. When companies holding hundreds of millions of dollars of capital buy houses during a recession and say "millennials don't want to own homes anyway, we're doing them a favor", yes, they are.
30 million Americans own apartments; 40 million rent them. So yes, buying apartments is absolutely something that happens in the United States, and will happen more if the prices come down.
I know of no one in my life, acquaintance or otherwise, who has equity in a unit of housing in a building with a large number of units. And if someone does, that's typically called a condo, which at least in my 2 million person city is not common compared to houses or rental apartments.
People are being fact weenies to your post, but your point is fundamentally sound and showcases foresight. Some new construction is rent-only because its corporate backers rightly assume it will let them wring residents for all they're worth. If things continue to trend this way, then merely building more is not a sustainable solution to the housing squeeze.
My city has plenty of business facilities. They all sit vacant because all the young people move to the bigger cities and all the jobs pay whatever it costs to be with them.
The prices are high in major cities because lots of people want to live there. Remote work will reduce demand as people don’t need to commute. But lots of people like to live in the city, either because like what city provide or their life there. All the economic activity means there a lot of in-person jobs.
With remote work, lots of people who don’t care about particular city will move to smaller ones. But if increased density increases supply, I bet lots of people will move to desirable cities. People who want the big city or want the jobs, but couldn’t afford it before.
I am a pretty responsible dude but nothing has made me as invested in my community, surroundings, etc as owning a home. I always loved the US but once we bought the house I really understood it on the next level.
Apartments are great for single people and retirees. Families should have a house with a back yard and a drive way. It's our dream.
With all due respect that’s _your_ dream. I hated growing up in a house with a back yard and a driveway. I’m not sure I would have wanted to grow up in downtown Manhattan, but an apartment in a small city would have been infinitely better.
Mostly because it was boring and isolating. To be clear I didn’t dislike the yard! I disliked what living in an area of traditional SFHs (aka the suburbs) entailed.
My cousins growing up lived near the core of a small city and visiting them was like a breath of fresh air. So many fun activities nearby, things you could walk to, way more people to meet.
Where I grew up I was basically stuck on just my street unless I could convince my parents to drive me somewhere, and even when I had that there was nowhere interesting to go.
I guess when I was like <10 years old it didn’t really matter, but the older I got the worse it was. I’d never move back to a suburb personally, and I certainly wouldn’t raise kids there.
I had exactly this experience growing up too. My friends were all _at least_ a 2 mile walk from me, on 8 lane 60mph stroads with nothing but gated communities and strip malls along the way. Biking was not great either because of how hilly it could get. Once I got a car life got much better, but it didn't have to be that way.
For me, it's the fact that new single family developments are unwalkable and a major contributor to childhood depression. Children are meant to be out and about. This can happen in the rural countryside where kids can play in woods and the like. It can happen in the city where kids can hang out around town and see all kinds of people. It cannot happen in a suburb because the cars are too fast, there are too many of them, and there's no safe place for kids to walk by themselves.
And even if they could in most bedroom towns, there's nothing to do.
For me, I'd live in the country or the city never the suburbs.
I had to beg my parents to take me anywhere. My kids just leave the house and find friends or say hi to neighbors. No effort on our part and they get to be free.
Well, you are an extreme outlier. There are all kinds of people on this world but this very uncommon. Most people in apartment complexes are trying to get into their own home or hole that they can.
Extreme outlier? I know many people that can afford to live anywhere they want that choose to live in an apartment for its many advantages. It sounds like you are projecting your own biases. The notion that everyone desperately wants to live in a suburban house is manifestly false.
There is a reason the rents on nice urban apartments in good areas would easily cover the mortgage in an average suburb, yet are still in high demand.
Worth noting is that single family zoning in many places also prevents people from having houses as well. Small starter homes are basically illegal in many suburbs due to high minimum lot sizes and low FAR rating. I think that is frankly an issue that is underrated by most urbanists.
Maybe. But I think there are plenty of levers on that as well.
Example: 2 years ago we bought a house on Long Island, near NYC. If we were willing to live 30 minutes further east, the same house would cost half. If we were willing to live in a few nice part of Cleveland, the same house would go down by half again. And if we wanted to live right outside of Cleveland, it'd drop by half again.
Point being that things can get VERY affordable if you are willing to be creative and flexible with location. Which is easier now than ever with WFH. I also think boomers will start moving out soon and there'll be plenty inventory. Housing will be fine.
Would you have bought condo for half the price in nicer location? Would you have bought a smaller house or condo for less money?
The problem now is that we don’t give people the choice when only single family homes are allowed. Some people like apartments. Some people prefer location and would take whatever gets them there. Some people just need the cheapest housing.
You can still have your single-family home, that's fine. This is about giving people the option for apartments, condos, etc - because those are currently banned in the vast majority of the US. It's not taking away the option of a single-family home.
And with respect, as another commenter stated, that's your dream. There's a lot of options in between that just don't exist right now in most of the country.
Apartments are great for single people and retirees. Families should have a house with a back yard and a drive way. It's our dream.
There are a lot of households without children and not that many apartments—-especially higher end ones in nice places.
Allow some more of those to built so single people, retirees, and so-inclined others can move into them and that will free up houses with yards and white picket fences for families that want them.
My empty nester parents have no apartment options if they want to stay in the same community where they’ve lived for decades.
Plenty of people buy without becoming invested in the community and plenty of people rent who are invested in the community. I suspect it depends upon both the personality of the person and where they are in life. Even then, suggesting that someone doesn't want to be invested in their community because their views on what community means differs from yours is liable to be biased. For example, I often hear people criticizing students as being transient, yet they are frequently interested in contributing to the development of the communities in wbich they live. Yet you cannot expect their vision to be the same as someone who is midcareer and has children.
Communities take all different shapes, renters care about their community too. Personally growing up in a SFH was isolating and took away any sort of autonomy I had.
Want to go to a park? Well that's a 10 minute drive.
How about friends? Better hope I like my 3 neighbors (I didn't). Another 15 minute drive
My family and I live in a large apartment. My son has friends he can walk to see, a park he can walk to and we can relax in, and even a store where he can get treats with his allowance. I'm not his driver and he's more locked into the community than I ever was. All I knew in my community was who had a feud with who over a tree crossing into their yard.
I’ve never met a person who grew up in a city and told me they wished they’d been raised in the suburbs instead. Who needs a backyard when you have dozens of wonderful parks within a short travel distance? Who needs a driveway at all?
Interesting. From when I was 10 to adulthood, I grew up in a super-block style situation in a massive metropolis. Large apartment blocks with a big courtyard area in the middle (a few soccer fields in size). The things I miss from my childhood which it is apparent I won't be able to do here in the Bay Area in America are:
- unsupervised play
- mixed age un-chaperoned interaction
- have my children be raised by a village
I find most people's American suburban life is sort of an isolated existence. People have 3 or 4 people they know on the block. For us, there were numerous homes we could stop by as kids, and we were susceptible to policing from all adults in the vicinity. It was a real community experience - not isolated encounters here and there.
One thing I don't fully understand is why single family zoning is necessary to make this a reality? Won't density naturally fall off as you move out of the core? Since area increases with the square of the radius, it seems to me that a larger core means more core will be accessible to more suburbanites commuting in from surrounding areas. Couple that with an architecture that can better support things like commuter rail, and it just feels like a situation where everyone wins.
I don’t care much for multi-family housing personally. I don’t want to share a wall with anyone, not even a family member and I’m willing to make some concessions for that freedom.
However, recently I became interested in adding an “accessory dwelling unit” on my property to accommodate aging relatives. Despite having the space for a small 500-750 sqft unit on my property, my city’s zoning rules killed the idea. The rules had some interesting limitations like the ADU can’t be more forward than the front of the house, can’t be in a front yard, can’t be more than 40% of viewable property for front, has to be more than 20ft away etc.
Personally I’d be happy with more lax rules around ADU/mother-in-law units/etc. before everything becomes multiplexes.
Are you OK with other people living in multi unit housing, or does your desire for a detached unit extend to others' way of living?
I ask because it seems that where ever this happens, many people oppose merely allowing multiunit because they don't want to live in multiunit, even though it doesn't actually impact where they live. It's like lifting a ban on a certain type of car; it doesn't change your car, and there are still many types of vehicles on the market.
To me it’s replacing one problem with another. Simply changing zoning from single to multi-family doesn’t actually change core root problems in my opinion. A suburb full of single family homes or a suburb of multi-family homes are just different kinds of suburban hells. I think we need to be thinking about designing entire communities more intelligently with things like local markets, shops, parks, rest areas, schools, public transport etc. within walking distance.
Unfortunately people don’t like to admit the downsides of dense multi-family housing either: no parking, increases traffic/congestion, reduction in greenery, looking straight into neighbors windows, etc.
I’d personally like to see smarter zoning with mixed usage in a nice balance where all kinds of types of residences can coexist but I believe it requires proper administration. Otherwise the economic incentive for builders will result in the dominance of multi-family housing.
The upzoning will mostly affect walkable neighborhoods because those are the ones where there is most demand and where density will fit better. Those would be the pre-war streetcar suburbs and similar post-war suburbs.
The funny thing is that there are “missing middle” apartments in my neighborhood and similar ones. The duplexes and up were just banned for decades.
Suburbs aren’t the problem. There are walkable neighborhoods with all that stuff. I live in pre-war streetcar suburb that doesn’t feel like post-war but is mostly single family homes. Part of increasing density is making those things you want possible. My feeling is that most of the effect of upzoning will be felt in close-in walkable neighborhoods because they are most desirable and easier to upgrade.
Also, there is a wide range of multi-family housing from giant towers, mid-height apartments, and N-plexs. Most proposals are to mix “missing middle” housing in with single family. A lot of older neighborhoods already have some. A few triplexes are not going to cause problems. Around here, they are allowing 6-story apartments along major roads. They work well because there is good public transit.
> I think we need to be thinking about designing entire communities more intelligently with things like local markets, shops, parks, rest areas, schools, public transport etc. within walking distance.
Start by asking if these things you’re mentioning are literally banned. If so start there.
> it seems that where ever this happens, many people oppose merely allowing multiunit because they don't want to live in multiunit, even though it doesn't actually impact where they live
No, that's not the reason at all. It's concerns over traffic, impact on already-packed schools, and overall crowding.
Nah, those are code words. What they mean is they’re terrified it might negatively affect their home value (or for some, its racially motivated). Most of these people only care about other people until they think it might negatively effect their perceived wealth. Ask a hope owner if they’d support a bill that would shave 25% of their home value to help…starving children (and we’ll assume the program is proven successful) and most would come up with BS reasons to oppose it.
Traffic, no room in schools, and other crowding issues are not code words. They are quite literal concerns. Rather than argue that people are being disingenuous, I would rather someone explain how traffic would be offset or how many more schools would be built.
Or I guess we can just cry racism and greed and that’s that.
I would say that they are red herrings because despite directly and definitively addressing these issues with people that raise them, they simply come up with a new list of reasons to oppose.
I've been fighting this for years, and it's always the same, there is no way to address all the concerns because the list of concerns is bottomless.
You see it in this thread, we started with concerns about someone sharing a wall and here we are...
Pointing out that schools are emptying in an area due to lack of children with an agong population, and that same person that one second ago was burning with concern for school crowding now has an entirety different concern completely unrelated, and has switched gears without even acknowledging that their concern was addressed.
I don't believe a single person that says these are their actual concerns, unless they continue to show interest in their concern after their objection has been addressed.
These sorts of "concerns" are just stalling tactics, ways to avoid talking about their actual interest: stopping the housing at all costs.
I used to think that if average income cannot afford the average home, the market must necessarily correct. I’m wrong about this obviously but I still cannot understand why. I understand that wealthier people have vacation homes, but the only reason for a wealthy person to purchase an additional non-vacation home is to rent it out to someone less wealthy. Since the less wealthy person couldn’t cover the mortgage to begin with, the investment will be cash flow negative. The only hope is price appreciation which logically should never materialize.
> I’m wrong about this obviously but I still cannot understand why.
I have this theory (I wish I could think of a way to easily prove it right with some kind of cherry-picked statistics/data but I'm not confident I'd be able to) that we've finally reached a point (I'm sure it isn't the first time in history but I don't know a lot of history) in "late-stage capitalism" that the top 20% don't mind paying/can pay/will pay/are willing to pay/compete with each other to the point where the bottom 80% can't keep up.
My source is, I tried to buy a house semi-recently. All of the typical stuff you read. Lots of demand/competition. Middle class stuff. The houses sold for what it sold for because that's what people are willing to pay.
Whether it's because the couple who won the bid had bought a $300k house 10 years ago and it doubled and they had $300k extra in funny money equity fall out of the sky is almost irrelevant because it puts them in that "20%" category. Once you are in that category (in my mind), things like "I should drive a Corollla to be efficient" go out the window when every stop light is people who can comfortably afford $80k BMWs without blinking an eye. "Who would pay that?! You can get a good used car for $20k! Blasphemy"
I see it like this:
If a house is priced for $600k but your gut (bias based on historical data) says "it was just $400k not too long ago, it should be worth $400k! this is madness", but then the market moves on and leaves you in the dust (and that $600k house goes from $600k to $700k and beyond), it's just upper middle class people paying (hopefully) what they can afford/are willing to pay.
Essentially, the power of money grows exponentially. A well-off tech person earning a few hundred thousand dollars per year has the financial power equivalent to dozens of minimum wage people. I agree that we’re now at the point where there is so much money at the top that the power imbalance is too influential to be ignored. A few decades ago, the number of wealthy people was so small and their reach so short that it was unlikely the average person would experience any of their influence… nowadays, every block has someone wealthy enough to be buying up property with borrowed money to turn it into an airbnb. The influence of money today has permeated every aspect of our lives. And we, as well off tech people, are partly to blame.
> I agree that we’re now at the point where there is so much money at the top that the power imbalance is too influential to be ignored.
Would you agree if I said the problem isn't really the billionaires when it comes to why middle class hard working people can't afford a single family house, but instead it's people making $200k/yr+?
I think the most direct responsibility for the community level impact is with the people earning $200k+ who are irresponsibly exercising the power that income brings. For example, it’s so common for families making good money to do things like buy investment properties in their local community… which is growing their wealth at the expense of their community.
However, the reason we are all able to earn so much is due to the ruthless pursuit of capital further up the market. The only reason we are able to earn so much is because billionaire business people decided that the best way to maximise their company value was to take the not-innovative option and pay lots of people huge amounts of money.
> I think the most direct responsibility for the community level impact is with the people earning $200k+ who are irresponsibly exercising the power that income brings.
I think irresponsible is probably a poor word choice here (in my opinion) just because it leads my mind to think the assumption "why aren't they entitled to spend the money they earned the way they want to"
But instead of splitting hairs there, I'd be more curious to potentially partner with you in the effort to accurately determine whether the effects of the group we are specifically discussing are actually having a sizable impact in "harming" (preventing) the groups below them from being able to purchase a house
It is the combination that did it. Restrictive zoning limited available housing stock. Then financialization optimized the market for extractive high profits.
Make it possible to build more then the market should eventually correct, but the financial squeeze will continue until the market has plenty of supply as often referred to by economists as market clearance such that demand is saturated at all levels.
Anecdotally, when my wife and I were looking at homes it'd be inevitable we'd hear someone else at the open houses talking about their 7th or 8th investment property.
My wife is the chatty sort, so she'd ask them about how they could afford it and they'd always be leveraged up to the eyeballs. The cheap credit hog has been a complete disaster, and when the rates inevitably rise to where they should be we're going to see a lot of idiots with a lot of unbacked debt defaulting on everything.
If they locked in the rates for 30 years, then they can be leveraged and probably be fine. Anyone know if investment properties are eligible for the same 30-year fixed that primary homes are?
This kind of market-based intuition doesn't always work in a constrained market like housing, where what kind of housing you're allowed to build, how much of it, or whether you can build housing at all, is all heavily determined by local regulation.
The rationale I have for explaining situations where it doesn't feel like prices are being dictated by the relative levels of supply and demand is that there is latency involved in reaching equilibrium.
The time it takes for prices to reflect reality can take far far longer, in some cases, than anyone is comfortable accepting. There is no fundamental law that says things need to happen at the speed of convenience.
Certainly over the course of human history some sociopolitical or economic arcs took multiple human lifetimes to play themselves out.
because there’s a big gulf between “afford” and “survive”. The point at which most people could afford housing passed by long ago, nowadays housing is something many people are only able to survive the cost of by making big sacrifices elsewhere. Housing is not optional, there’s no room to cut a little cost here or a little cost there, so everything else is sacrificed before it.
Landlords couldn’t care less about affordability, so “the market” is very happy to make money by pushing people into survival mode.
(Affordability in housing is often measured as being up to 30% of income, whereas people can survive by sacrificing everything else — including heat, and food — spending up to 80% of their income on housing. That gap is where the increases and profit of the last decade have been coming from.)
It's not a free market due to restrictive zoning. If artificial rules limit the supply of housing in places where people actually want to live, how could the market correct?
The market cannot optimize itself because a number of legislation like Prop 13, restrictive zoning and height limitations are there to prevent an efficient market.
> Since the less wealthy person couldn’t cover the mortgage to begin with
In the US, this isn't true. It's not uncommon for property to rent for higher than the cost of mortgage, taxes and insurance. That is, be profitable from day one (assuming 20% down).
People complain about being able to afford a mortgage but not being given one. Or not being approved for a monthly payment of Y and instead paying Y+X a month in rent.
In China, the situation you described exists. Have no idea about in Europe.
Homeownership has never been anything close to 100% of the populaion. Historically I think its about 65%. It's probably more like you need a median income to afford a 25th percentile home. I don't have the actual data on that but it's my guess based on the fact that 65% of the population owns a home (which is verifiable).
The beneficiary from a market distortion is incentivized to invest (lobbyists, media, pressure campaigns) in maintaining and extending that distortion in order to make even more money.
Covering a mortgage payment each month is much more feasible than purchasing a house for most. The real issue is saving for the down payment and having good enough credit to get approved for a loan.
There's a considerable difference between the loan payment with a big down payment and good credit versus bad credit and a low down payment. That difference can essentially turn an unaffordable home purchase into an "affordable" monthly rent.
Your thesis is a large number of people are right at the inflection point between being able to afford mortgage payments but cannot qualify for a mortgage. I don’t mean to sound harsh but this seems like a highly unlikely explanation.
My thesis is that there are a lot of people that either can't qualify for a mortgage, can't save up enough money for a reasonable down payment, qualify for a mortgage that they can't reasonably afford, etc.
On a 300k house, the difference between 5% and 20% down results in around a 400 dollar difference per month in a mortgage payment. That can be a pretty big difference maker for a lot of families.
5% down on a house like that is also 15k. That's a significant amount of money to save for a lot of families.
There are other relevant factors here as well, but this is certainly a significant one.
Housing can not be both an investment and affordable.
This might sound like a complex or intricate statement, but it is deceptively simple.
If you graph housing price over time, is the graph increasing or decreasing? If it is increasing then housing is a good investment and therefore becoming less affordable, if it's decreasing then housing is not a good investment because it is becoming cheaper and therefore more affordable.
It is supply and demand. As long as supply is restricted homes will increase in value, and if homes increase in value, that's a pretty good indicator supply is not increasing.
This is in aggregate, of course.
Homeowners want their homes to appreciate in value, and many, particularly old people, are using homes as their main vehicles of investment, so of course any policy to increase supply is bad for them. This creates an incredibly powerful political force.
This can be solved with subdivision, sure grandmas land is now worth 3M. But we will build a mid rise apartment building on it that regular people can afford.
Why do we need to lower our expectations now? Single family homes are what most people want. Why jam people into apartments if they don’t want to live in them? All houses should be cheap imo - it is just a few cheap sticks and some plastic after all.
Some cities obviously have no room to expand so the only option is higher density. Where that is not the case, build single family homes en mass until anyone can afford one. I’m a home owner now but would rather see people be able to afford what they want than to see my own 2x4s appreciate.
To clarify the issue isn't really shortage of single family homes by itself but single family homes nearby amenities (jobs etc...) Which while one can build massive freeways (Los Angeles, Atlanta etc...) eventually you'll run out of land a circular radius or end up having to build ever larger freeways to reach those suburbs.
I'm not sure if the massive freeways will really be needed. If a significant portion of people can work from home, I don't see much reason for it. I think the ideal future for many is single family homes in a resort like setting. If you are already where you want to be, there are fewer reasons to drive to other places.
That’s miserable for kids because they will always be too far from their friends at school and will be stuck at home with nothing but video games and tiktok.
When I was in school most of my friends lived in the inner suburbs and had good access to public transport so they could all meet up in the city and do things, while I was further out in an arguably richer area but without public transport so I was stuck inside missing out.
Many people don’t actually want single family homes. In my 20’s I was regularly on the lookout for efficiencies but I could rarely find them. It wasn’t about cost I just liked the layout more.
I don't think I buy that without a bit more justification. On an individual case, or when analyzed very locally, there can be wild departures from the aggregate case, but if housing is rapidly increased compared to demand, in aggregate, how can that not plummet the price of grandma's land for the aggregate grandma?
> Housing can not be both an investment and affordable.
If old homes were somehow better and more desirable, they could theoretically be both. But homes aren't like comic books or magic cards: newer-built ones are generally better in quality, often dramatically so.
Homes may be both affordable and an investment as long as median income increases faster than inflation.
Being a good investment is a different question and really comes down to your alternatives. You need to sleep somewhere, and renting includes many overheads. Depending on how you value your time and what skills you have managing your own home can be worthwhile or a waste. A carpenter may use their downtime between jobs to improve and flip their houses while a doctor is wasting time calling people for even the most modest repairs.
> Housing can not be both an investment and affordable.
Mathematically this isn’t true, as housing (even owner-occupied housing) pays a dividend [0]. So a house whose price tracks inflation (0% real price return) that pays a 4% dividend in net operating income still has a respectable 4% real return. Juice that return way up with a fixed-rate mortgage and you still have a great investment without home prices racing past affordability for normal people.
But that’s just the theoretical perspective. I don’t know if housing can be a good investment and affordable in practice.
Price is not an issue when the choice is more expensive housing or more crime. Lower prices bring in more poor people which brings more crime. High prices are a feature, not a bug. This is perhaps the single most obvious and consistent, but most overlooked aspect of American urban development.
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[ 3.8 ms ] story [ 264 ms ] threadComments to these zoning fights are full of gems like this. Arlington is about the size of Buffalo NY and 50% denser. It hasn’t been anything other than urban in my lifetime. Maybe this lady is 90 years old who knows.
It seems to me that if it were legal to do so there are plenty of tiny towns that could grow to the size of a small city like Arlington or Buffalo.
Not sure why you aren't figuring urban sprawl into this equation.
That would be increasing the density of the rural area the new small town springs up in. New towns do spring up in places where they can, but it's usually either some company drops a facility there and then housing pops up to support the facility as people decide they'd like a shorter commute, etc; or it's in the outskirts of built up areas, but then people complain about sprawl.
We result don't expand by increasing density, this has been generally banned by zoning over the past 60 years.
We mostly expand with sprawl, which causes long commutes, massive pollution, social isolation, bad health, and all sorts of other things. Which for people who want it, great, enjoy! But we ban density, and don't ban sprawl.
As for expanding other towns, this must be done by those with the capital to buy a house, or start a business to offer jobs, etc. Young people starting our do not have these things, and we need to accommodate them somewhere. To everyone who suggests building in a different small town, I suggest that they be the change they wish to see and move out to make room for somebody else.
Usually the reason is a lack of reasons to locate there. Even in the WFH era there are reasons to locate where existing good services and amenities are; a lot of amenities (niche business or cultural stuff, etc.) needs a critical mass of people to support it, and small towns generally don't have the mass. It is really hard to start up brand new septic or water delivery or whatnot in the middle of nowhere.
Also, consider that it doesn't take that many people to overwhelm a small town's population. What I hear in the Western states where remote WFH is becoming popular, is now WFH workers are pricing out existing residents, because rural salaries cannot compete with WFH wages. So WFH has mostly just resulted in exporting the housing crisis without significant easing in the places that had this problem pre-WFH.
By "establishing small towns" I assume you mean suburbs.
It seems to be the opposite. Cities with tons of flat land around them (e.g. Houston) tend to expand their footprint and maintain density. It's mostly areas that cannot (e.g. SF, LA, NYC) that increase density. Once you hit natural limiting boarders, you have to build up.
The problem the west coast has is not replacing housing once things got full and prices increased.
Every suburb I've ever lived in has been prone to ever-increasing low-density sprawl and resists building even a 2nd story for anything other than residence. I can drive past miles of 1 story strip-malls in virtually every suburb in America, and only rarely do I see an 2 story doctors office, or maybe a 3 story apartment or office building.
The same housing in Arlington is super efficient. Tear down house, build apartment building. Connect to sewer, roads, etc. The residents walk to the Metro stop.
A lot of the small town problems also apply to sprawl and exurbs. It is possible to build more efficient small towns, older ones have a walkable core.
When we grow population we increase density. The two concepts have a direct linear relationship there’s no other thing that can possibly happen.
The only relevant question is where the density increases. A new small town in a rural area is an increase in density for that area.
Your argument thus reduces, entirely, to “why don’t people go somewhere else instead of where I live?”
The is a lesser-known branch of economics called economic geography that studies what happens when you have big concentrations of people. Turns out you get much better services and it is cheaper to support everything (eg, one big trainline which costs a lot but gets huge amount of use, one big market where you can buy and sell everything, etc).
The short of it is that small towns are not a bad thing, but if you want to live a comfortable life with lots of services and material luxuries then you had best seek a city.
Understanding that there is a mutual dependence between the countryside and the cites, it seems like in the past the limit on city growth has always been sanitation and the ability of the agricultural base to support the urban population with the labor that is available in the country.
I'm curious if you know any good entry-level or popular books on this topic.
I live in a seven-unit apartment building on a block that is otherwise entirely single-family homes. It was built in 1890. As far as I can tell, none of the residents here could be noticed as out of the ordinary by anyone outside of our building; I have my gripes with the neighbors downstairs who play their TV too loud, but it has no effect on the rest of the neighborhood.
I can't say as much, however, for the house next door, which is rented by a group of college students who regularly hold loud parties with dozens of people over. I'm sure they're pretty conspicuous. In an economy where it is already very common for multiple adults to rent rooms in a "single-family" home, it is a mistake to blame people's behavior on the type of building they live in.
That would be a fair complaint, if the word “housing” had been used in place of “zoning”. Single-family zoning is a legal restriction that allows only single-family housing. Ending it is not the same as ending single-family housing.
If you are going to complain about phrasing, you should complain about the actual phrasing.
People who live in areas affected by single family zoning tend to be very familiar with the term.
Otherwise intelligent people have their brains broken when it comes to discussions about housing. We need to pick words carefully to not confuse.
Until more state laws (ie California’s recent legislation) are passed where density developers can reply “that’s a shame”, NIMBYs rule. NY is gearing up for a similar fight.
https://www.politico.com/news/2023/02/11/hochul-faces-uprisi...
I really don’t think that’s true. Yes, the average citizen is uninformed about the average policy issue, but that alone doesn’t support a characterization that most unsophisticated readers has the same very specific misunderstanding of a particular policy issue when identified in the usual terms. There are some issues where something like that is the case, and there is polling to suggest that, but just making the unsupported leap from “unsophisticated citizens” to “this particular misunderstanding” with no evidence is not warranted.
There is a massive influx in many burbs of "luxury apartments" with rents $2500+ and I'm not talking downtown NYC. That's more than most mortgages.
How often are they new and how often are they "newly renovated"?
As I got a downvote I'm going to edit this and say I used to pay a little over $800/month for a particular apartment. About 7 years later I looked back at the complex. It had been completely remodeled and the cheapest unit was over $1600/month. How often is this happening?
But I'm talking about new developments. If you ever go to city council meetings where development proposals for new high density housing developments are discussed, you'll see a small slice of the incredible hassle they currently go through. Everyone wants to have a say in what others do with their land, numerous rounds of revisions are frequently required, and that means it's incredibly expensive to shepherd one of these things through. Fundamentally, those units cannot be cheap if that's what it takes to build them.
If housing stock expanded a lot, landlords would lose the pricing power that YieldStar is taking advantage of. The lack of surplus housing in desirable areas is the root problem, and the difficulty of getting new high density housing projects approved and developed in those areas is at the core of that. The vacancy rate of rental housing nationwide has been dropping for years, and that includes a lot of places where people aren't clamoring to live.
I'll also note that a falling occupancy rate is not mutually exclusive with the alleged practice of property managers warehousing inventory to prop up pricing. I also wonder how much the common practice of offering "new renter specials", rather than simply lowering rents to meet demand, contributes to ever-increasing "market rates."
1:https://web.archive.org/web/20220127071929/https://www.entra...
Do you have a source for property managers warehousing housing inventory? It doesn't ring true, at all.
I wonder what your interest is in handwaving these issues which are well-known and being acted on. You seem knowledgable except where it would tend to hurt your argument that everything is as it should be.
What say you on rent specials?
When you say 80%, what are you using to find those/take that survey? I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings. This is also why you should never trust stats sourced from those sites, they don’t have a representative view of the market (a lot of news stories cite them uncritically when talking about rent trends).
Warehousing, care to cite something so I can read about it?
Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount. What are you wondering about it?
I'm just going to say that I don't think you're being completely honest, and leave it at that.
>I’d just keep in mind that a lot of sites only show listings from buildings that are willing to pay, and there’s a high correlation with professionally managed buildings.
We are talking about professionally-managed properties, so this isn't a problem. I don't think basement apartments, ADUs, etc. are representative of most people's experience with renting 1-3 bedroom apartments, particularly in my area, and I would be very surprised to find that they had a significant effect on the rate set for units in the large buildings and complexes where most renters live.
>Warehousing, care to cite something so I can read about it?
I will not. It has been written about extensively. It is suspicious that you would want to avoid an "inaccurate understanding", but have yet to look it up yourself. I would expect someone truly and dispassionately interested to have heard of it prior to this conversation, as it is evidently a significant issue wrt the nature of the contemporary rental market. A simple search will return many articles about it.
>Rent specials are an easy way to adjust rent downward, without adjusting rent downward. If they rent to someone at a lower rate, then it’s a long term rather temporary discount.
So, for example, a unit is rented for effectively $1300/m, discounted off a $1500/m base rent. The next year, there is no discount, and the unit renews at 5%-10% over the base, not discounted rent - potentially a $300 difference monthly. You don't think that this potentially distorts prices in the market?
If there's a need to not only put capacity on the market but fill it, the market will drive rent prices down because it is better to get something for your vacant unit than pay double the property taxes. If that doesn't work and there's still tons of vacant housing stock that is being held off the market to drive up rent, you can always keep raising the vacant housing tax until it works.
Price-fixing that is not done via consolidation is ultimately unstable from game theory point of view.
There's very strong incentive to defect from "optimal vacancy rate" and eat outsized profit compared to the rest of competition. Making building easier makes consolidation harder, as outsiders are now potential defectors as well. AFAIK we're not in monopoly situation (yet?) for rental properties.
Most of YieldStar value proposition on the other hand is ultimately just a price discovery mechanism. Prices raise because people *are willing* to pay that much for apartment. People are willing to pay that much, because supply doesn't keep with demand.
Rich landlords will keep overcharging for rent as long as they are able. And more buildings just gives them more opportunities to exploit more renters. That is unless the renters strike or the government enforces rent control.
Please, don't agitate for more rent control, it's such a bad idea.
This becomes even more true as the business has a larger portfolio and more assets to devalue. It is in the common interest of all landlords to keep the rent high, so if they are able to sink the cost of keeping an apartment vacant, they will do it if it means that that cost will be realized as profit in their non-vacant units.
Tell me, why do you think rent control is a bad idea? For me it seems only bad if you are a landlord.
New apartments (like new cars) are always priced higher than older buildings, but give it a few years and prices drop.
No matter your view on home ownership, there’s a lot to be said of the ability to stabilize your budget’s largest line item via fixed rate mortgages.
This helps but is just a band aid.
We need to step back from the notion that houses should be significant stores of wealth and concentrate fully on creating enough housing so that everyone can comfortably afford a roof over their head. Using the scarcity of housing to build wealth is just short-sighted and will always lead housing shortages because the housing value above construction cost is only maintained by way of scarcity. If there’s enough housing for everybody, which should be our goal, home values will go down and the importance of owning a house goes away.
Two is investment. Land prices in popular areas started rising because of demand. Housing turned into way to make money and build wealth. But it is really land speculation.
As it happens, While about a third of Americans rent, only about a fifth of Spaniards do: 78% of households live in an apartment they own. That's because regulation is set up in ways that make renting a pretty bad deal. I live in some midwestern suburb, and half of my street rents, as companies have outbid individual sellers when the people that originally bought their houses died or downsized. They are owned by Delaware companies, and good luck figuring out who is really behind them.
So while it might be a good idea to minimize renters, the tie between rentals and apartments in urban living is just regulatory. Suburbs are in no way immune to being purchased by investors: It's just that investors try to aim for properties that are expected to grow up in value the fastest, and it just happens that those tend to be in urban centers and in suburbs that are very close to said centers.
So really, limiting building dense housing is, if anything, going to make the problem worse, as it limits housing supply. If you want to prevent renting, make it a worse deal, tax wise, for companies to own and manage rental property. Again, the very dense Spanish cities do a better job at this than the US does.
I'm suggesting we should be more active in calling for condos and townhomes instead of apartments.
In America, we have policies that subsidize owning over renting, like the mortgage interest tax deduction. I don't think we need more policies to make renting more expensive.
The status quo is of ever increasing unaffordability, means ever increasing displacement and gentrification. There's a cost for waiting for a perfect solution. Adding more housing now reduces rents for all compared to not doing anything, so even if it's not the perfect solution, we must start enacting parts that help.
Refusing to take any action is in itself an endorsement of the bad outcomes that are happening right now.
I know people can rent single-family homes, but I am also against institutional home-ownership. My point is that living-quarters ownership should be more universal.
>Nobody's trying to "take away homeownership"
When houses come down and apartments go up, they are. When companies holding hundreds of millions of dollars of capital buy houses during a recession and say "millennials don't want to own homes anyway, we're doing them a favor", yes, they are.
I know of no one in my life, acquaintance or otherwise, who has equity in a unit of housing in a building with a large number of units. And if someone does, that's typically called a condo, which at least in my 2 million person city is not common compared to houses or rental apartments.
Source: https://archive.is/eFvQJ , under the heading, "Condos of all kinds, everywhere"
It’s almost like gravity, it keeps centralising.
With remote work, lots of people who don’t care about particular city will move to smaller ones. But if increased density increases supply, I bet lots of people will move to desirable cities. People who want the big city or want the jobs, but couldn’t afford it before.
I am a pretty responsible dude but nothing has made me as invested in my community, surroundings, etc as owning a home. I always loved the US but once we bought the house I really understood it on the next level.
Apartments are great for single people and retirees. Families should have a house with a back yard and a drive way. It's our dream.
May I ask why?
My cousins growing up lived near the core of a small city and visiting them was like a breath of fresh air. So many fun activities nearby, things you could walk to, way more people to meet.
Where I grew up I was basically stuck on just my street unless I could convince my parents to drive me somewhere, and even when I had that there was nowhere interesting to go.
I guess when I was like <10 years old it didn’t really matter, but the older I got the worse it was. I’d never move back to a suburb personally, and I certainly wouldn’t raise kids there.
And even if they could in most bedroom towns, there's nothing to do.
For me, I'd live in the country or the city never the suburbs.
I had to beg my parents to take me anywhere. My kids just leave the house and find friends or say hi to neighbors. No effort on our part and they get to be free.
Most renters want to own because owning is cheaper. Renters live in houses too... It's not like home renters are less likely to want to own.
I know a family who rents a lovely house in a super nice neighborhood... They still want to own.
There is a reason the rents on nice urban apartments in good areas would easily cover the mortgage in an average suburb, yet are still in high demand.
What a problem to have. Wow.
Example: 2 years ago we bought a house on Long Island, near NYC. If we were willing to live 30 minutes further east, the same house would cost half. If we were willing to live in a few nice part of Cleveland, the same house would go down by half again. And if we wanted to live right outside of Cleveland, it'd drop by half again.
Point being that things can get VERY affordable if you are willing to be creative and flexible with location. Which is easier now than ever with WFH. I also think boomers will start moving out soon and there'll be plenty inventory. Housing will be fine.
The problem now is that we don’t give people the choice when only single family homes are allowed. Some people like apartments. Some people prefer location and would take whatever gets them there. Some people just need the cheapest housing.
And with respect, as another commenter stated, that's your dream. There's a lot of options in between that just don't exist right now in most of the country.
There are a lot of households without children and not that many apartments—-especially higher end ones in nice places.
Allow some more of those to built so single people, retirees, and so-inclined others can move into them and that will free up houses with yards and white picket fences for families that want them.
My empty nester parents have no apartment options if they want to stay in the same community where they’ve lived for decades.
Want to go to a park? Well that's a 10 minute drive.
How about friends? Better hope I like my 3 neighbors (I didn't). Another 15 minute drive
My family and I live in a large apartment. My son has friends he can walk to see, a park he can walk to and we can relax in, and even a store where he can get treats with his allowance. I'm not his driver and he's more locked into the community than I ever was. All I knew in my community was who had a feud with who over a tree crossing into their yard.
- unsupervised play
- mixed age un-chaperoned interaction
- have my children be raised by a village
I find most people's American suburban life is sort of an isolated existence. People have 3 or 4 people they know on the block. For us, there were numerous homes we could stop by as kids, and we were susceptible to policing from all adults in the vicinity. It was a real community experience - not isolated encounters here and there.
However, recently I became interested in adding an “accessory dwelling unit” on my property to accommodate aging relatives. Despite having the space for a small 500-750 sqft unit on my property, my city’s zoning rules killed the idea. The rules had some interesting limitations like the ADU can’t be more forward than the front of the house, can’t be in a front yard, can’t be more than 40% of viewable property for front, has to be more than 20ft away etc.
Personally I’d be happy with more lax rules around ADU/mother-in-law units/etc. before everything becomes multiplexes.
I ask because it seems that where ever this happens, many people oppose merely allowing multiunit because they don't want to live in multiunit, even though it doesn't actually impact where they live. It's like lifting a ban on a certain type of car; it doesn't change your car, and there are still many types of vehicles on the market.
Unfortunately people don’t like to admit the downsides of dense multi-family housing either: no parking, increases traffic/congestion, reduction in greenery, looking straight into neighbors windows, etc.
I’d personally like to see smarter zoning with mixed usage in a nice balance where all kinds of types of residences can coexist but I believe it requires proper administration. Otherwise the economic incentive for builders will result in the dominance of multi-family housing.
Ending single family zoning is also required to allow corner stores, not just allow apartments.
The funny thing is that there are “missing middle” apartments in my neighborhood and similar ones. The duplexes and up were just banned for decades.
Also, there is a wide range of multi-family housing from giant towers, mid-height apartments, and N-plexs. Most proposals are to mix “missing middle” housing in with single family. A lot of older neighborhoods already have some. A few triplexes are not going to cause problems. Around here, they are allowing 6-story apartments along major roads. They work well because there is good public transit.
Start by asking if these things you’re mentioning are literally banned. If so start there.
No, that's not the reason at all. It's concerns over traffic, impact on already-packed schools, and overall crowding.
Or I guess we can just cry racism and greed and that’s that.
I've been fighting this for years, and it's always the same, there is no way to address all the concerns because the list of concerns is bottomless.
You see it in this thread, we started with concerns about someone sharing a wall and here we are...
Pointing out that schools are emptying in an area due to lack of children with an agong population, and that same person that one second ago was burning with concern for school crowding now has an entirety different concern completely unrelated, and has switched gears without even acknowledging that their concern was addressed.
I don't believe a single person that says these are their actual concerns, unless they continue to show interest in their concern after their objection has been addressed.
These sorts of "concerns" are just stalling tactics, ways to avoid talking about their actual interest: stopping the housing at all costs.
Seriously... Just a few years ago, banks were giving you loans for like 1 - 5 percent down..
But the average income of folks in SF is really high, because people without very high incomes can't live in SF!
That's bad.
I have this theory (I wish I could think of a way to easily prove it right with some kind of cherry-picked statistics/data but I'm not confident I'd be able to) that we've finally reached a point (I'm sure it isn't the first time in history but I don't know a lot of history) in "late-stage capitalism" that the top 20% don't mind paying/can pay/will pay/are willing to pay/compete with each other to the point where the bottom 80% can't keep up.
My source is, I tried to buy a house semi-recently. All of the typical stuff you read. Lots of demand/competition. Middle class stuff. The houses sold for what it sold for because that's what people are willing to pay.
Whether it's because the couple who won the bid had bought a $300k house 10 years ago and it doubled and they had $300k extra in funny money equity fall out of the sky is almost irrelevant because it puts them in that "20%" category. Once you are in that category (in my mind), things like "I should drive a Corollla to be efficient" go out the window when every stop light is people who can comfortably afford $80k BMWs without blinking an eye. "Who would pay that?! You can get a good used car for $20k! Blasphemy"
I see it like this:
If a house is priced for $600k but your gut (bias based on historical data) says "it was just $400k not too long ago, it should be worth $400k! this is madness", but then the market moves on and leaves you in the dust (and that $600k house goes from $600k to $700k and beyond), it's just upper middle class people paying (hopefully) what they can afford/are willing to pay.
Would you agree if I said the problem isn't really the billionaires when it comes to why middle class hard working people can't afford a single family house, but instead it's people making $200k/yr+?
However, the reason we are all able to earn so much is due to the ruthless pursuit of capital further up the market. The only reason we are able to earn so much is because billionaire business people decided that the best way to maximise their company value was to take the not-innovative option and pay lots of people huge amounts of money.
I think irresponsible is probably a poor word choice here (in my opinion) just because it leads my mind to think the assumption "why aren't they entitled to spend the money they earned the way they want to"
But instead of splitting hairs there, I'd be more curious to potentially partner with you in the effort to accurately determine whether the effects of the group we are specifically discussing are actually having a sizable impact in "harming" (preventing) the groups below them from being able to purchase a house
Make it possible to build more then the market should eventually correct, but the financial squeeze will continue until the market has plenty of supply as often referred to by economists as market clearance such that demand is saturated at all levels.
My wife is the chatty sort, so she'd ask them about how they could afford it and they'd always be leveraged up to the eyeballs. The cheap credit hog has been a complete disaster, and when the rates inevitably rise to where they should be we're going to see a lot of idiots with a lot of unbacked debt defaulting on everything.
This kind of market-based intuition doesn't always work in a constrained market like housing, where what kind of housing you're allowed to build, how much of it, or whether you can build housing at all, is all heavily determined by local regulation.
The time it takes for prices to reflect reality can take far far longer, in some cases, than anyone is comfortable accepting. There is no fundamental law that says things need to happen at the speed of convenience.
Certainly over the course of human history some sociopolitical or economic arcs took multiple human lifetimes to play themselves out.
Landlords couldn’t care less about affordability, so “the market” is very happy to make money by pushing people into survival mode.
(Affordability in housing is often measured as being up to 30% of income, whereas people can survive by sacrificing everything else — including heat, and food — spending up to 80% of their income on housing. That gap is where the increases and profit of the last decade have been coming from.)
In the US, this isn't true. It's not uncommon for property to rent for higher than the cost of mortgage, taxes and insurance. That is, be profitable from day one (assuming 20% down).
People complain about being able to afford a mortgage but not being given one. Or not being approved for a monthly payment of Y and instead paying Y+X a month in rent.
In China, the situation you described exists. Have no idea about in Europe.
There's a considerable difference between the loan payment with a big down payment and good credit versus bad credit and a low down payment. That difference can essentially turn an unaffordable home purchase into an "affordable" monthly rent.
On a 300k house, the difference between 5% and 20% down results in around a 400 dollar difference per month in a mortgage payment. That can be a pretty big difference maker for a lot of families.
5% down on a house like that is also 15k. That's a significant amount of money to save for a lot of families.
There are other relevant factors here as well, but this is certainly a significant one.
This might sound like a complex or intricate statement, but it is deceptively simple.
If you graph housing price over time, is the graph increasing or decreasing? If it is increasing then housing is a good investment and therefore becoming less affordable, if it's decreasing then housing is not a good investment because it is becoming cheaper and therefore more affordable.
It is supply and demand. As long as supply is restricted homes will increase in value, and if homes increase in value, that's a pretty good indicator supply is not increasing.
This is in aggregate, of course.
Homeowners want their homes to appreciate in value, and many, particularly old people, are using homes as their main vehicles of investment, so of course any policy to increase supply is bad for them. This creates an incredibly powerful political force.
How do you fight that political force?
Some cities obviously have no room to expand so the only option is higher density. Where that is not the case, build single family homes en mass until anyone can afford one. I’m a home owner now but would rather see people be able to afford what they want than to see my own 2x4s appreciate.
When I was in school most of my friends lived in the inner suburbs and had good access to public transport so they could all meet up in the city and do things, while I was further out in an arguably richer area but without public transport so I was stuck inside missing out.
If old homes were somehow better and more desirable, they could theoretically be both. But homes aren't like comic books or magic cards: newer-built ones are generally better in quality, often dramatically so.
Being a good investment is a different question and really comes down to your alternatives. You need to sleep somewhere, and renting includes many overheads. Depending on how you value your time and what skills you have managing your own home can be worthwhile or a waste. A carpenter may use their downtime between jobs to improve and flip their houses while a doctor is wasting time calling people for even the most modest repairs.
Mathematically this isn’t true, as housing (even owner-occupied housing) pays a dividend [0]. So a house whose price tracks inflation (0% real price return) that pays a 4% dividend in net operating income still has a respectable 4% real return. Juice that return way up with a fixed-rate mortgage and you still have a great investment without home prices racing past affordability for normal people.
But that’s just the theoretical perspective. I don’t know if housing can be a good investment and affordable in practice.
[0] https://earlyretirementnow.com/2017/11/15/that-house-over-th...
Your house might pay a dividend, but it has immense maintenance cost.
If the dividend from your house, on average, is enough to pay this cost, we’re in this hellscape.