They’re sorta doing this in my city, but they’re not putting a lot of money into public transportation so basically only people who both live and work in the city benefit from it, and the only...
They’re sorta doing this in my city, but they’re not putting a lot of money into public transportation so basically only people who both live and work in the city benefit from it, and the only people who can afford to do that are rich people.
It sounded great, but turned into a cash grab for the land owners and developers. The new apartments they built with the space are luxury apartments and you’d have to walk like 20-30 mins to the nearest public transportation so in practice everyone still owns cars, its just more expensive to pay for parking now.
The city does look nice without all the massive parking lots, though.
Comment box Scope: comment response, personal perspective Tone: neutral Opinion: yes Sarcasm/humor: none Public transportation is definitely an important part of better urban design....
Comment box
Scope: comment response, personal perspective
Tone: neutral
Opinion: yes
Sarcasm/humor: none
they’re not putting a lot of money into public transportation
Public transportation is definitely an important part of better urban design. Transit-oriented development should go hand-in-hand with parking reform. This doesn't need to be heavy rail, although it can; a good bus network is almost as effective for small cities, and far less costly to implement.
I recommend reaching out to your local councilor to advocate for some kind of transit. Getting involved with a local advocacy group who can formally lobby for this in the budget process is also critical.
But you do also need a "push" factor. Scientific meta-analyses of parking reforms demonstrate that you can't just offer public transportation in order to reduce car dependency, you also have to make driving a car at least marginally less convenient to get people over the initial hurdle. There is value to simply building housing and forcing the municipal government to respond to the newfound demand for transit services. We can absolutely afford it. The transit benefits all residents and visitors. It's much easier for a politician to prioritize transit if people are asking for it.
the only people who can afford to do that are rich people.
Over time an increased amount of housing stock reduces area prices, which is why it's important to alleviate demand. This is true even if, in the short term, construction leads to population growth that tilts the market.
Medium- and long-term, parking reform and transit-oriented development consistently make urban living more affordable while offering better access to employment and amenities.
Yeah I’m not saying it was a bad idea, just discussing how the rich people in my city ran with something that could have been great and used it to enrich themselves while giving nothing back.
Yeah I’m not saying it was a bad idea, just discussing how the rich people in my city ran with something that could have been great and used it to enrich themselves while giving nothing back.
I mean they made a profit by increasing the supply of housing. I don't think there's anything wrong with being paid for building homes? I think increasing the number of people that can live in...
I mean they made a profit by increasing the supply of housing. I don't think there's anything wrong with being paid for building homes?
I think increasing the number of people that can live in your city is almost certainly a good thing for all the people that decided to move into the new homes. Maybe traffic is a bit worse until transit, walking, and cycling infrastructure is improved, but new residents means you have less to pay in property taxes. I'm sure the people moving into the homes are happy with them or else they wouldn't have moved in.
I think the key problem is the "giving nothing back.". Oh and not building affordable housing. Frankly, this is why we need to yank back housing from private capital. Affordable housing never gets...
I think the key problem is the "giving nothing back.". Oh and not building affordable housing.
Frankly, this is why we need to yank back housing from private capital. Affordable housing never gets built unless mandated by law, and often gets yanked back ASAP to make more room for "luxury".
Transitioning housing buildout to a housing authority, especially in denser areas, will solve many problems. If we don't like the idea of local governments flat-out owning housing, they should transition ownership to housing cooperatives.
It's only "giving nothing back" if you don't count building housing, which is what developers do for a living. This is sort of like saying a doctor gives nothing back because you don't count the...
It's only "giving nothing back" if you don't count building housing, which is what developers do for a living.
This is sort of like saying a doctor gives nothing back because you don't count the health benefits for patients, because you find them unsympathetic.
The point is that developers are only building housing that nobody can afford. Like making medical treatments you can only access as a billionaire. And I think the "nothing back" is more in...
The point is that developers are only building housing that nobody can afford. Like making medical treatments you can only access as a billionaire.
And I think the "nothing back" is more in reference to the perpetual profiting, then subsequent lobbying to prevent collecting taxes on those profits to maintain infrastructure.
We just tax the bejesus out of private equity and use it to fund public housing development. There's no reason to have housing built by non-public entities short of "but then rich people can't profit from it."
Comment box Scope: comment response, explanation, analysis Tone: neutral Opinion: a little, but this is mostly explanatory Sarcasm/humor: none This is broadly not true. Housing is only constructed...
Comment box
Scope: comment response, explanation, analysis
Tone: neutral
Opinion: a little, but this is mostly explanatory
Sarcasm/humor: none
The point is that developers are only building housing that nobody can afford.
This is broadly not true. Housing is only constructed if developers are confident that a landlord can find relatively stable tenants (in the case of a rental) or that an organization can find buyers (in the case of a condominium, cooperative, or for-sale SFH).
The landlord is not necessarily the developer, but the likelihood of finding tenants who can pay a certain amount of money is what directly informs the amount the developer will list the building for when selling to a landlord. The landlord pays that sale price on leverage, so there is a specific incentive for the landlord to set rental unit pricing at a rate corresponding to at least the amount they need to pay the mortgage plus operational fees.
But I understand what you mean. I am being pedantic because the perception you express tends to fuel NIMBY policies that reduce the housing supply. It's important to be clear that any new construction increases supply, by definition. From a mathematical perspective, it does not matter who lives in which house so long as there are enough houses that are connected to transportation, amenities, and employment (hence transit-oriented development).
I agree with you in principle that explicitly requiring some affordability in new development is valuable. This has qualitative benefits to neighborhood character and social equity. Personally I think all municipalities should require some sort of community benefit agreement when developers are pushing for disruptive construction. However, this is not technically necessary to reduce area prices. Having new housing stock alone reduces area prices. All people have an absolute housing need, whether they are wealthy or poor, and the number of people occupying houses is finite. Any increase in supply necessary decreases demand and therefore prices across a total market.
There is a distinction here:
Neighborhood prices - the average price of a unit within a subordinate market
Area (regional) prices - the average price of a unit across an entire market, which is made of relatively tightly coupled subordinate markets. We can think of an area market as the area surrounding a metropole/city center (everything in commute distance, and a bit further), i.e. the area in which a person feels relatively flexible moving while at a given job
State and national prices - the average price of a unit across several loosely coupled area/regional markets, and more influenced by material costs and cultural preferences than supply changes, which tend to be regional
New construction is often, but not always, done in areas perceived to be populated with people who are relatively likely to be good tenants. I will ignore zoning laws and NIMBYism for now. This is just because developers think they can command a higher sale price to landlords who expect tenants who are wealthier than average. Landlords prefer wealthy tenants because they are just more likely to pay their rent on time, in addition to being willing to pay more. Developers know that landlords feel this way.
It tends to be the case that wealthy people already live near the best amenities, like very good public transit. In some cases, developers try to preempt the market by building in areas that are not already populated by wealthy people, but which they think a landlord thinks could attract wealthier-than-average tenants. When people talk about gentrification, this is what they mean. In a subordinate market, a building craze can coincide with higher prices due to incoming "gentry."
But since there are a finite number of occupants in the housing system, an occupant moving into a "hot" neighborhood/subordinate market necessarily leaves a different neighborhood simultaneously. They might sub-let their original unit, but in virtually all cases they are not occupying it, meaning it is freed up for another person to live in. So while they may be occupying new supply in the hot market, their move corresponds to a drop in demand in the old market, meaning prices fall in the old market. An overvalued/hot market will correct a bit over time, so the average price of the area remains lower even if the neighborhood the new construction exists in remains priced higher than before.
In other words, there is a cascading effect whereby a wealthy person might move into a newly constructed apartment, and a less wealthy person will move into their now-unoccupied and now-less-expensive former apartment, and repeat. (Of course since construction happens in many places simultaneously, and people don't solely move "upward" in housing stock, this pattern isn't linear.)
There are other reasons why subordinate markets can have high price deltas from each other, like people preferring to live in areas already populated by the ethnic group they belong to, and local taxation policies and associated school qualities for parents. But speaking mathematically, any new construction still reduces prices across a market, even if it has some negative local impacts. There are cases where the nature of new construction can have significant negative local impacts to the extent that that subordinate market becomes undesirable, but this is atypical due to the very high demand for housing that exists in almost every country in the world except Japan. For example, an extraordinarily ugly skyscraper right in the middle of a quaint, low-rise neighborhood can make that unattractive. But people will basically always move into the new building and there will be more residents than before, even if some of the old-timers qualitatively don't like the aesthetics of the new housing. If that skyscraper's facade was shaped in a way that concentrated sunlight onto nearby residences, increasing temperatures by a technically safe but extremely irritating margin, that could make the subordinate market undesirable. But that is an exceptionally unusual circumstance which would be addressed by reasonable government regulation.
We just tax the bejesus out of private equity and use it to fund public housing development. There's no reason to have housing built by non-public entities short of "but then rich people can't profit from it."
This is not my area of expertise, but I think private equity companies usually are not the ones building housing, they just hoard existing housing in profitable ways. So it comes down to a supply problem again.
I agree that corporations buying up all the housing can be a problem, but this is actually not the cause of the housing shortage in most markets, especially in suburbs. People complain about private equity buying new single-family homes, but they only control about 1% of the housing market. This is enough to meaningfully temporarily shift some subordinate markets if that supply is really concentrated, but most housing shortage in a micro-market is caused by extremely strict zoning requirements:
Maximum building height limits (virtually always to stop apartments from being built)
Minimum setback requirements (increases sprawl, reducing housing density and therefore accessibility to employment)
Minimum parking requirements (increases sprawl likewise; and these tend to be utterly arbitrary and unscientific)
Minimum road width requirements (suburbs may unnecessarily build roads to highways standards, increasing sprawl)
Bans/restrictions on construction of accessory dwelling units (artificially reduces supply)
Bans/restrictions on certain kinds of cost-effective construction techniques, like 5-over-1s, for aesthetic reasons (artificially reduces supply)
In some cases, requirements that multifamily buildings have more egress staircases or other non-housing spaces than necessary (artificially reduces supply)
We can argue about whether some of these are qualitatively worthwhile, but local regulation is ultimately what stops housing from being built.
So for a given neighborhood that has access to great amenities already, the reason why it is expensive is mostly because it is exclusive. If you build more housing, it becomes less exclusive and therefore less expensive.
It's pretty hard to convince neighbors to completely change building codes, but it's reasonable to work on one problem at a time, like reducing or removing excessive minimum parking requirements.
To be clear (and I probably shouldn't have used these interchangeably), I mean any private capital, not just the private equity firms. And I do generally agree. But what's the difference between a...
To be clear (and I probably shouldn't have used these interchangeably), I mean any private capital, not just the private equity firms. And I do generally agree.
But what's the difference between a private developer building a new apartment and HUD building a new apartment? The HUD can use the proceeds to build more buildings in a more accountable way. Which also addresses the 'but muh taxes' issue; Governments owned housing becomes its own source of perpetual revenue.
And yes, any new housing stock is good housing stock in a crisis, but luxury housing tends to be its own form of NIMBY. In my town which has basically ran out of usable land, the way this works out is them building a giant McMansion which sells for $1,500,000 rather than build a duplex which sells for 2x$500k on the same plot. In a denser area, that manifests as 4 new condos instead of a 8-unit apartment.
To expand this a bit further, in my town the average time a McMansion (at or above the $1mil but less than $3mil) sits on the market is on the order of 3 months. But any place under $600k goes in less than a month unless it's falling apart at the seams.
So in my microcosm, there is plenty of housing stock at that million price point, but nowhere near enough below it. The only way this gets resolved is if we solve wealth inequality such that a new mansion goes unsold for years on end. Or we ban building single family homes.
But that's actually the (perhaps unintentional) point: the plebs get pushed to the lower CoL towns nearby with crappier school districts.
Comment box Scope: comment response, analysis Tone: neutral Opinion: yes Sarcasm/humor: a little, in my description of the pro-housing coalition I agree with you that the government should build...
Exemplary
Comment box
Scope: comment response, analysis
Tone: neutral
Opinion: yes
Sarcasm/humor: a little, in my description of the pro-housing coalition
But what's the difference between a private developer building a new apartment and HUD building a new apartment? The HUD can use the proceeds to build more buildings in a more accountable way. Which also addresses the 'but muh taxes' issue; Governments owned housing becomes its own source of perpetual revenue.
I agree with you that the government should build more housing. But I don't think most HUD projects are close to financially self-sufficient. Many of them I know of are in extraordinary states of disrepair despite collecting tenant rents. Everyone wants the government to "tax the rich" until they realize that they are the ones being taxed. By contrast it's easy to offload development to the private sector; less government expenditure, and now local politicians have a great scapegoat - good for reelection.
I think higher corporate taxes can have benefit here, especially if they're really targeted, but the most lucrative source of tax revenue will always be income tax.
With land values being what they are, and government construction soft costs being as intractably high as they are, we are looking at some awfully long payback windows for HUD projects. The fiscally responsible thing to do would be to charge outrageous rents to make up for the state's over-expensive debt. In the current political sphere, the kinds of people who believe in strong central government for the purpose of social equity are, in general, the same people who believe that landlording is inherently immoral. I don't see that coalition staying together.
There's currently an uneasy alliance between urban development corporations and progressive housing advocates on the basis that "more housing = good," but the corporations are in it for profit and the advocates are in it for some variety of moral sanctitude. Those advocates are split into several camps that agree on almost nothing:
The YIMBYs are focused on increasing supply at any cost, even if that means building "out of scale" with surrounding structures and/or tearing down a few minor historic landmarks to make way for more and better housing; they may be socially minded, but are far more concerned with economics than identity politics. They predictably tend to disillusion the on-the-fence NIMBYs
The New Urbanists want to implement their Cities: Skylines maps in real life to distribute the population in the mathematically optimal way, and maybe get developers to pay for some TOD or plant some extra trees; they ally with the YIMBYs but are less single-minded and therefore less internally unified
The cultural activists instigate widespread public backlash against any project in proximity to low-income neighborhoods on the basis of preventing gentrification (but are indifferent toward development in rich neighborhoods); a mix of ideological and personal/cultural/racial incentives, and may pragmatically lean into anti-intellectualism to set the narrative, to the dismay of New Urbanists
The Neiman Marxists just learned what "redlining" means but don't leave campus often enough to know the city; they have nevertheless formulated several theses on Twitter, perhaps based mostly on said public backlash
The NIMBYs (more broadly) can be convinced of the merits of new housing, so long as it is constructed in a different neighborhood. We can distinguish between identity politic NIMBYs (ideological cultural activists) and wealthy liberal NIMBYs (the ones who show up to city council meetings and don't care about ideology so much as aesthetics... or are quietly racist, it's a toss-up); neither tend to be planning experts, but they wield great authority
This coalition is close to shattering in the wind already. It's so impossibly fragile that there's no wonder no one gets elected on a genuine pro-housing platform. It's so hopelessly easy for some anti-housing (not that they'd call themselves that) candidate/official to complain about how these new apartments just ruin the character of the neighborhood, or they might displace six people, or they would require a tree to be cut down, etc. and half the coalition will suddenly refuse to back a given project. Do this enough times and very little housing is built - that's where we are right now.
So in my microcosm, there is plenty of housing stock at that million price point, but nowhere near enough below it. The only way this gets resolved is if we solve wealth inequality such that a new mansion goes unsold for years on end. Or we ban building single family homes.
I would say this remains a zoning (regulation) issue and not necessarily a "who is building" issue. McMansions are built on plots zoned exclusively for single-family homes, probably also with minimum setback requirements and minimum parking requirements, and other restrictions. To fix this issue, I don't think you have to ban SFHs, just open more lots up to more kinds of housing. If there's actually demand for apartments, and not too many other restrictions, apartments will be built.
The practice of what some people call "Euclidean" zoning (terrible name) -- by which they mean large swaths of single-use zoning rather than mixed-use zoning or interspersed zones -- necessarily creates large areas where the only thing it is legal to build is a residence. Local regulation further restricts that to certain kinds of residences built certain ways. In theory the local government has the ability to reject basically any construction. They write the laws.
California's governor or legislature passed some rules recently overruling all local zoning to allow duplexes on lots zoned for SFHs. More places need this; excessive local control of zoning leads to a mismatch between supply and demand (aka a market with low "responsiveness" to specific kinds of demand). The OECD agrees:
The evidence also provides indications that a higher degree of decentralization of land-use policies is associated with lower supply, consistent with the home-voter hypothesis predicting that homeowners turn to local politicians in order to protect the value of their housing investment by restricting undesired development of land.
It's just so politically unpopular in this country to overrule local preferences. "Self-rule" is baked into the foundations of the US. Unfortunately that means something different to everyone so challenging that is a non-starter on the basis that no one even agrees on definitions. I'm amazed CA did this.
In my town which has basically ran out of usable land
The Parking Reform Network has a great tool demonstrating how much of our cities is actually just parking. The maps are manually constructed, so they've only done them for fairly dense areas, but as an exercise you may want to go onto Google Satellite and determine what percentage of your town is parking lots, driveways, etc. It is probably more than you realize.
The little town I grew up in would claim to have "run out of usable land," except for all the parking lots, gas stations, unused space between houses, air above houses, etc. If we're thinking about policies that are politically unpopular, a bit of demolition of SFHs and reconstruction of higher-profile multifamily housing in a few locations can improve affordability. This is more effective if other towns nearby do the same thing so that it's not just one town becoming the focus of all new development. Of course no mayor will use eminent domain to proactively demolish housing to build "better" housing, except in so-called "blighted" areas (i.e. where poor people live).
But the mayor or council could rezone any number of lots as multi-family or single-family. It's the homeowner's decision to sell to another family or to a developer. They usually sell to whoever pays them more, which is usually the developer. Problem handled by itself, in 10 years, and mayor probably still wins reelection.
But that's actually the (perhaps unintentional) point: the plebs get pushed to the lower CoL towns nearby with crappier school districts.
This is a significant problem.
Personally I do not attribute this to the construction of more housing but rather the fact that school districts are funded locally rather than statewide. Like housing, I think education is best controlled at the regional or state level, not local.
A judge in Pennsylvania ruled last year that the state was failing to equitably distribute resources between schools and ordered the state to solve this problem. The issue was specifically that the state contributes too little to the public system, leaving local municipalities to do almost all of it; with predictably inequitable results.
Public education is fairly popular. More states could create better constitutional or legislative protections for equitable distributions of funding to education, and that would reduce one of the most important impacts of displacement from micro-level gentrification.
Are you arguing that the new homes are empty? Surely they're not stupid enough to build housing that just sits unused. New housing is almost always "luxury" and if no-one could afford it then it...
The point is that developers are only building housing that nobody can afford.
Are you arguing that the new homes are empty? Surely they're not stupid enough to build housing that just sits unused. New housing is almost always "luxury" and if no-one could afford it then it wouldn't get built.
If the rich yuppies can't get new luxury apartments, they will outbid grandma and cause increased displacement and gentrification. Building more housing supply is the best way to support existing and new residents.
It depends on the specifics, but I suspect that some housing built by private developers gets sold to people who aren't billionaires, and the new homeowners are sometimes happy with their...
It depends on the specifics, but I suspect that some housing built by private developers gets sold to people who aren't billionaires, and the new homeowners are sometimes happy with their purchase? Not sure why you're assuming it's mostly housing that "nobody can afford."
Affordable housing can be built with subsidies. That's how a lot of the post-WW2 housing boom was financed. It's hard to convince existing residents to pay higher taxes to build new affordable...
Affordable housing can be built with subsidies. That's how a lot of the post-WW2 housing boom was financed. It's hard to convince existing residents to pay higher taxes to build new affordable homes though.
There's also the reality that in places like Chicago and LA, government funded "affordable" housing projects cost significantly more than private development...
I'm not certain the public sector is any better at building cheap and affordable housing. Putting more units on the market and increasing supply reduces pressure on cheaper and more affordable units, so I just want more homes built.
Yeah, I mean, the city looks stunning. This definitely needed to be done. The city hasn’t really put the money to good use though. Theres a housing voucher program but it comes nowhere close to...
Yeah, I mean, the city looks stunning. This definitely needed to be done.
The city hasn’t really put the money to good use though. Theres a housing voucher program but it comes nowhere close to actually addressing the needs of those who have been displaced by the revitalization. Theres a lot of folks who are salty because what use is more housing when the people who have lived here for forever cant afford it. Also, property taxes went up anyway.
That's partially because subsidizing demand (to use an economics term) doesn't work when the real issue is a supply shortage. Giving everyone more money doesn't create more of a scarce good. It...
Theres a housing voucher program but it comes nowhere close to actually addressing the needs of those who have been displaced by the revitalization.
That's partially because subsidizing demand (to use an economics term) doesn't work when the real issue is a supply shortage. Giving everyone more money doesn't create more of a scarce good. It just pushes up the sale price since everyone has more money to spend.
It's kinda crazy cause I know the rent for a 600 sq ft 1 br in those building is like 2500 a month, and statistically most people can't afford that, so where are all of these rich people coming...
It's kinda crazy cause I know the rent for a 600 sq ft 1 br in those building is like 2500 a month, and statistically most people can't afford that, so where are all of these rich people coming from?
I'm in the tech industry which totally imploded in 2022 and hasn't recovered, new grads can't find jobs, wages are actually decreasing, all of the entry level jobs have been shipped overseas and it seems like all white collar work is in this situation, so like, who is living in these places?
I know one person who lived there two years ago (and rent has gone up since then) and she's a therapist so she makes absolute bank.
According to the US government, rent is affordable if it makes up a third of pre-tax income. Doing some quick math: $2500/month * 3 * 12 months/year = $90k/year to afford that one bedroom. That is...
2500 a month
According to the US government, rent is affordable if it makes up a third of pre-tax income. Doing some quick math: $2500/month * 3 * 12 months/year = $90k/year to afford that one bedroom. That is and isn't a lot of money. A dual income couple would need to make ~$21/hour per person to comfortably afford that. Though realistically, some people choose to live in high cost of living areas and pay insane percentages of their income on rent. In general, it's very easy for a dual-income couple with college degrees to afford that rent.
The tech sector isn't high-flying like during COVID or the era of free money, but it's still doing fine. Most white collar industries outside of tech and media are doing pretty well actually (we just hear more cause it's two high-visibility industries that frequently shape narratives).
I haven’t looked at apartments in ten years so anything over $1000/mo for a 1br is still crazy to me. The last apt I lived in was 1000 for a 2 br that we split three ways lol Most of the people I...
I haven’t looked at apartments in ten years so anything over $1000/mo for a 1br is still crazy to me. The last apt I lived in was 1000 for a 2 br that we split three ways lol
Most of the people I know don’t make 90k a year, they make 50-60 but they’re married and together they probably clear six figures.
My opinion has always been that living alone is a luxury, and I really feel for the single parents trying to make that work.
We're seeing similar issues in my town, and as the city staff and country transit representative remind us: it's often a chicken and egg situation. They often can't justify expanding lines when...
We're seeing similar issues in my town, and as the city staff and country transit representative remind us: it's often a chicken and egg situation. They often can't justify expanding lines when "no one uses the transit options available" but in reality those options aren't super viable as they have limited run times (so like hourly or bi-hourly loops) and aren't well interconnected with other municipalities to allow for cross transit. So folks don't use them. I wish we could get past the point where there needs to be aggravation for ridership before expansion and improvements follow.
All that said, the reform will be helpful in the long term. It will likely just feel like a squeeze for the folks your talking about in the short term. As u/scroll_lock highlighted, local advocacy goes a long way. I'm a planning commissioner for my little town and the only folks who call in and show up to meetings are retired old folks who motherfuck every little improvement we propose. If you can mobilize support for transit options, and have them show up to meetings, it's likely you could get your local public works and potentially even a county level org (like you local transit operator) to make some helpful changes.
I don’t live in the city unfortunately. I’m about an hour away in the next county over. Here, we’re mostly concerned that our water treatment plant is at capacity and developers keep getting the...
I don’t live in the city unfortunately. I’m about an hour away in the next county over. Here, we’re mostly concerned that our water treatment plant is at capacity and developers keep getting the green light to keep building.
There are tons of people working to get public transport improvements in the city, but the best the council has come up with recently is extra taxes on sales to pay for it. Instead, we get a brand new football stadium that no one wanted.
They’re sorta doing this in my city, but they’re not putting a lot of money into public transportation so basically only people who both live and work in the city benefit from it, and the only people who can afford to do that are rich people.
It sounded great, but turned into a cash grab for the land owners and developers. The new apartments they built with the space are luxury apartments and you’d have to walk like 20-30 mins to the nearest public transportation so in practice everyone still owns cars, its just more expensive to pay for parking now.
The city does look nice without all the massive parking lots, though.
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Public transportation is definitely an important part of better urban design. Transit-oriented development should go hand-in-hand with parking reform. This doesn't need to be heavy rail, although it can; a good bus network is almost as effective for small cities, and far less costly to implement.
I recommend reaching out to your local councilor to advocate for some kind of transit. Getting involved with a local advocacy group who can formally lobby for this in the budget process is also critical.
But you do also need a "push" factor. Scientific meta-analyses of parking reforms demonstrate that you can't just offer public transportation in order to reduce car dependency, you also have to make driving a car at least marginally less convenient to get people over the initial hurdle. There is value to simply building housing and forcing the municipal government to respond to the newfound demand for transit services. We can absolutely afford it. The transit benefits all residents and visitors. It's much easier for a politician to prioritize transit if people are asking for it.
Over time an increased amount of housing stock reduces area prices, which is why it's important to alleviate demand. This is true even if, in the short term, construction leads to population growth that tilts the market.
Medium- and long-term, parking reform and transit-oriented development consistently make urban living more affordable while offering better access to employment and amenities.
Yeah I’m not saying it was a bad idea, just discussing how the rich people in my city ran with something that could have been great and used it to enrich themselves while giving nothing back.
I mean they made a profit by increasing the supply of housing. I don't think there's anything wrong with being paid for building homes?
I think increasing the number of people that can live in your city is almost certainly a good thing for all the people that decided to move into the new homes. Maybe traffic is a bit worse until transit, walking, and cycling infrastructure is improved, but new residents means you have less to pay in property taxes. I'm sure the people moving into the homes are happy with them or else they wouldn't have moved in.
I think the key problem is the "giving nothing back.". Oh and not building affordable housing.
Frankly, this is why we need to yank back housing from private capital. Affordable housing never gets built unless mandated by law, and often gets yanked back ASAP to make more room for "luxury".
Transitioning housing buildout to a housing authority, especially in denser areas, will solve many problems. If we don't like the idea of local governments flat-out owning housing, they should transition ownership to housing cooperatives.
It's only "giving nothing back" if you don't count building housing, which is what developers do for a living.
This is sort of like saying a doctor gives nothing back because you don't count the health benefits for patients, because you find them unsympathetic.
The point is that developers are only building housing that nobody can afford. Like making medical treatments you can only access as a billionaire.
And I think the "nothing back" is more in reference to the perpetual profiting, then subsequent lobbying to prevent collecting taxes on those profits to maintain infrastructure.
We just tax the bejesus out of private equity and use it to fund public housing development. There's no reason to have housing built by non-public entities short of "but then rich people can't profit from it."
Comment box
This is broadly not true. Housing is only constructed if developers are confident that a landlord can find relatively stable tenants (in the case of a rental) or that an organization can find buyers (in the case of a condominium, cooperative, or for-sale SFH).
The landlord is not necessarily the developer, but the likelihood of finding tenants who can pay a certain amount of money is what directly informs the amount the developer will list the building for when selling to a landlord. The landlord pays that sale price on leverage, so there is a specific incentive for the landlord to set rental unit pricing at a rate corresponding to at least the amount they need to pay the mortgage plus operational fees.
But I understand what you mean. I am being pedantic because the perception you express tends to fuel NIMBY policies that reduce the housing supply. It's important to be clear that any new construction increases supply, by definition. From a mathematical perspective, it does not matter who lives in which house so long as there are enough houses that are connected to transportation, amenities, and employment (hence transit-oriented development).
I agree with you in principle that explicitly requiring some affordability in new development is valuable. This has qualitative benefits to neighborhood character and social equity. Personally I think all municipalities should require some sort of community benefit agreement when developers are pushing for disruptive construction. However, this is not technically necessary to reduce area prices. Having new housing stock alone reduces area prices. All people have an absolute housing need, whether they are wealthy or poor, and the number of people occupying houses is finite. Any increase in supply necessary decreases demand and therefore prices across a total market.
There is a distinction here:
New construction is often, but not always, done in areas perceived to be populated with people who are relatively likely to be good tenants. I will ignore zoning laws and NIMBYism for now. This is just because developers think they can command a higher sale price to landlords who expect tenants who are wealthier than average. Landlords prefer wealthy tenants because they are just more likely to pay their rent on time, in addition to being willing to pay more. Developers know that landlords feel this way.
It tends to be the case that wealthy people already live near the best amenities, like very good public transit. In some cases, developers try to preempt the market by building in areas that are not already populated by wealthy people, but which they think a landlord thinks could attract wealthier-than-average tenants. When people talk about gentrification, this is what they mean. In a subordinate market, a building craze can coincide with higher prices due to incoming "gentry."
But since there are a finite number of occupants in the housing system, an occupant moving into a "hot" neighborhood/subordinate market necessarily leaves a different neighborhood simultaneously. They might sub-let their original unit, but in virtually all cases they are not occupying it, meaning it is freed up for another person to live in. So while they may be occupying new supply in the hot market, their move corresponds to a drop in demand in the old market, meaning prices fall in the old market. An overvalued/hot market will correct a bit over time, so the average price of the area remains lower even if the neighborhood the new construction exists in remains priced higher than before.
In other words, there is a cascading effect whereby a wealthy person might move into a newly constructed apartment, and a less wealthy person will move into their now-unoccupied and now-less-expensive former apartment, and repeat. (Of course since construction happens in many places simultaneously, and people don't solely move "upward" in housing stock, this pattern isn't linear.)
There are other reasons why subordinate markets can have high price deltas from each other, like people preferring to live in areas already populated by the ethnic group they belong to, and local taxation policies and associated school qualities for parents. But speaking mathematically, any new construction still reduces prices across a market, even if it has some negative local impacts. There are cases where the nature of new construction can have significant negative local impacts to the extent that that subordinate market becomes undesirable, but this is atypical due to the very high demand for housing that exists in almost every country in the world except Japan. For example, an extraordinarily ugly skyscraper right in the middle of a quaint, low-rise neighborhood can make that unattractive. But people will basically always move into the new building and there will be more residents than before, even if some of the old-timers qualitatively don't like the aesthetics of the new housing. If that skyscraper's facade was shaped in a way that concentrated sunlight onto nearby residences, increasing temperatures by a technically safe but extremely irritating margin, that could make the subordinate market undesirable. But that is an exceptionally unusual circumstance which would be addressed by reasonable government regulation.
This is not my area of expertise, but I think private equity companies usually are not the ones building housing, they just hoard existing housing in profitable ways. So it comes down to a supply problem again.
I agree that corporations buying up all the housing can be a problem, but this is actually not the cause of the housing shortage in most markets, especially in suburbs. People complain about private equity buying new single-family homes, but they only control about 1% of the housing market. This is enough to meaningfully temporarily shift some subordinate markets if that supply is really concentrated, but most housing shortage in a micro-market is caused by extremely strict zoning requirements:
We can argue about whether some of these are qualitatively worthwhile, but local regulation is ultimately what stops housing from being built.
So for a given neighborhood that has access to great amenities already, the reason why it is expensive is mostly because it is exclusive. If you build more housing, it becomes less exclusive and therefore less expensive.
It's pretty hard to convince neighbors to completely change building codes, but it's reasonable to work on one problem at a time, like reducing or removing excessive minimum parking requirements.
To be clear (and I probably shouldn't have used these interchangeably), I mean any private capital, not just the private equity firms. And I do generally agree.
But what's the difference between a private developer building a new apartment and HUD building a new apartment? The HUD can use the proceeds to build more buildings in a more accountable way. Which also addresses the 'but muh taxes' issue; Governments owned housing becomes its own source of perpetual revenue.
And yes, any new housing stock is good housing stock in a crisis, but luxury housing tends to be its own form of NIMBY. In my town which has basically ran out of usable land, the way this works out is them building a giant McMansion which sells for $1,500,000 rather than build a duplex which sells for 2x$500k on the same plot. In a denser area, that manifests as 4 new condos instead of a 8-unit apartment.
To expand this a bit further, in my town the average time a McMansion (at or above the $1mil but less than $3mil) sits on the market is on the order of 3 months. But any place under $600k goes in less than a month unless it's falling apart at the seams.
So in my microcosm, there is plenty of housing stock at that million price point, but nowhere near enough below it. The only way this gets resolved is if we solve wealth inequality such that a new mansion goes unsold for years on end. Or we ban building single family homes.
But that's actually the (perhaps unintentional) point: the plebs get pushed to the lower CoL towns nearby with crappier school districts.
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I agree with you that the government should build more housing. But I don't think most HUD projects are close to financially self-sufficient. Many of them I know of are in extraordinary states of disrepair despite collecting tenant rents. Everyone wants the government to "tax the rich" until they realize that they are the ones being taxed. By contrast it's easy to offload development to the private sector; less government expenditure, and now local politicians have a great scapegoat - good for reelection.
I think higher corporate taxes can have benefit here, especially if they're really targeted, but the most lucrative source of tax revenue will always be income tax.
With land values being what they are, and government construction soft costs being as intractably high as they are, we are looking at some awfully long payback windows for HUD projects. The fiscally responsible thing to do would be to charge outrageous rents to make up for the state's over-expensive debt. In the current political sphere, the kinds of people who believe in strong central government for the purpose of social equity are, in general, the same people who believe that landlording is inherently immoral. I don't see that coalition staying together.
There's currently an uneasy alliance between urban development corporations and progressive housing advocates on the basis that "more housing = good," but the corporations are in it for profit and the advocates are in it for some variety of moral sanctitude. Those advocates are split into several camps that agree on almost nothing:
This coalition is close to shattering in the wind already. It's so impossibly fragile that there's no wonder no one gets elected on a genuine pro-housing platform. It's so hopelessly easy for some anti-housing (not that they'd call themselves that) candidate/official to complain about how these new apartments just ruin the character of the neighborhood, or they might displace six people, or they would require a tree to be cut down, etc. and half the coalition will suddenly refuse to back a given project. Do this enough times and very little housing is built - that's where we are right now.
I would say this remains a zoning (regulation) issue and not necessarily a "who is building" issue. McMansions are built on plots zoned exclusively for single-family homes, probably also with minimum setback requirements and minimum parking requirements, and other restrictions. To fix this issue, I don't think you have to ban SFHs, just open more lots up to more kinds of housing. If there's actually demand for apartments, and not too many other restrictions, apartments will be built.
The practice of what some people call "Euclidean" zoning (terrible name) -- by which they mean large swaths of single-use zoning rather than mixed-use zoning or interspersed zones -- necessarily creates large areas where the only thing it is legal to build is a residence. Local regulation further restricts that to certain kinds of residences built certain ways. In theory the local government has the ability to reject basically any construction. They write the laws.
California's governor or legislature passed some rules recently overruling all local zoning to allow duplexes on lots zoned for SFHs. More places need this; excessive local control of zoning leads to a mismatch between supply and demand (aka a market with low "responsiveness" to specific kinds of demand). The OECD agrees:
It's just so politically unpopular in this country to overrule local preferences. "Self-rule" is baked into the foundations of the US. Unfortunately that means something different to everyone so challenging that is a non-starter on the basis that no one even agrees on definitions. I'm amazed CA did this.
The Parking Reform Network has a great tool demonstrating how much of our cities is actually just parking. The maps are manually constructed, so they've only done them for fairly dense areas, but as an exercise you may want to go onto Google Satellite and determine what percentage of your town is parking lots, driveways, etc. It is probably more than you realize.
The little town I grew up in would claim to have "run out of usable land," except for all the parking lots, gas stations, unused space between houses, air above houses, etc. If we're thinking about policies that are politically unpopular, a bit of demolition of SFHs and reconstruction of higher-profile multifamily housing in a few locations can improve affordability. This is more effective if other towns nearby do the same thing so that it's not just one town becoming the focus of all new development. Of course no mayor will use eminent domain to proactively demolish housing to build "better" housing, except in so-called "blighted" areas (i.e. where poor people live).
But the mayor or council could rezone any number of lots as multi-family or single-family. It's the homeowner's decision to sell to another family or to a developer. They usually sell to whoever pays them more, which is usually the developer. Problem handled by itself, in 10 years, and mayor probably still wins reelection.
This is a significant problem.
Personally I do not attribute this to the construction of more housing but rather the fact that school districts are funded locally rather than statewide. Like housing, I think education is best controlled at the regional or state level, not local.
A judge in Pennsylvania ruled last year that the state was failing to equitably distribute resources between schools and ordered the state to solve this problem. The issue was specifically that the state contributes too little to the public system, leaving local municipalities to do almost all of it; with predictably inequitable results.
Public education is fairly popular. More states could create better constitutional or legislative protections for equitable distributions of funding to education, and that would reduce one of the most important impacts of displacement from micro-level gentrification.
Are you arguing that the new homes are empty? Surely they're not stupid enough to build housing that just sits unused. New housing is almost always "luxury" and if no-one could afford it then it wouldn't get built.
If the rich yuppies can't get new luxury apartments, they will outbid grandma and cause increased displacement and gentrification. Building more housing supply is the best way to support existing and new residents.
It depends on the specifics, but I suspect that some housing built by private developers gets sold to people who aren't billionaires, and the new homeowners are sometimes happy with their purchase? Not sure why you're assuming it's mostly housing that "nobody can afford."
Affordable housing can be built with subsidies. That's how a lot of the post-WW2 housing boom was financed. It's hard to convince existing residents to pay higher taxes to build new affordable homes though.
There's also the reality that in places like Chicago and LA, government funded "affordable" housing projects cost significantly more than private development...
I'm not certain the public sector is any better at building cheap and affordable housing. Putting more units on the market and increasing supply reduces pressure on cheaper and more affordable units, so I just want more homes built.
Yeah, I mean, the city looks stunning. This definitely needed to be done.
The city hasn’t really put the money to good use though. Theres a housing voucher program but it comes nowhere close to actually addressing the needs of those who have been displaced by the revitalization. Theres a lot of folks who are salty because what use is more housing when the people who have lived here for forever cant afford it. Also, property taxes went up anyway.
That's partially because subsidizing demand (to use an economics term) doesn't work when the real issue is a supply shortage. Giving everyone more money doesn't create more of a scarce good. It just pushes up the sale price since everyone has more money to spend.
It's kinda crazy cause I know the rent for a 600 sq ft 1 br in those building is like 2500 a month, and statistically most people can't afford that, so where are all of these rich people coming from?
I'm in the tech industry which totally imploded in 2022 and hasn't recovered, new grads can't find jobs, wages are actually decreasing, all of the entry level jobs have been shipped overseas and it seems like all white collar work is in this situation, so like, who is living in these places?
I know one person who lived there two years ago (and rent has gone up since then) and she's a therapist so she makes absolute bank.
According to the US government, rent is affordable if it makes up a third of pre-tax income. Doing some quick math: $2500/month * 3 * 12 months/year = $90k/year to afford that one bedroom. That is and isn't a lot of money. A dual income couple would need to make ~$21/hour per person to comfortably afford that. Though realistically, some people choose to live in high cost of living areas and pay insane percentages of their income on rent. In general, it's very easy for a dual-income couple with college degrees to afford that rent.
The tech sector isn't high-flying like during COVID or the era of free money, but it's still doing fine. Most white collar industries outside of tech and media are doing pretty well actually (we just hear more cause it's two high-visibility industries that frequently shape narratives).
I haven’t looked at apartments in ten years so anything over $1000/mo for a 1br is still crazy to me. The last apt I lived in was 1000 for a 2 br that we split three ways lol
Most of the people I know don’t make 90k a year, they make 50-60 but they’re married and together they probably clear six figures.
My opinion has always been that living alone is a luxury, and I really feel for the single parents trying to make that work.
We're seeing similar issues in my town, and as the city staff and country transit representative remind us: it's often a chicken and egg situation. They often can't justify expanding lines when "no one uses the transit options available" but in reality those options aren't super viable as they have limited run times (so like hourly or bi-hourly loops) and aren't well interconnected with other municipalities to allow for cross transit. So folks don't use them. I wish we could get past the point where there needs to be aggravation for ridership before expansion and improvements follow.
All that said, the reform will be helpful in the long term. It will likely just feel like a squeeze for the folks your talking about in the short term. As u/scroll_lock highlighted, local advocacy goes a long way. I'm a planning commissioner for my little town and the only folks who call in and show up to meetings are retired old folks who motherfuck every little improvement we propose. If you can mobilize support for transit options, and have them show up to meetings, it's likely you could get your local public works and potentially even a county level org (like you local transit operator) to make some helpful changes.
I don’t live in the city unfortunately. I’m about an hour away in the next county over. Here, we’re mostly concerned that our water treatment plant is at capacity and developers keep getting the green light to keep building.
There are tons of people working to get public transport improvements in the city, but the best the council has come up with recently is extra taxes on sales to pay for it. Instead, we get a brand new football stadium that no one wanted.