In some localities what would help a lot is if city governments could get out of their own way and let developers build. The reason why the vast majority of housing developments in the SF Bay Area...
In some localities what would help a lot is if city governments could get out of their own way and let developers build.
The reason why the vast majority of housing developments in the SF Bay Area and especially SF itself are “luxury” (a somewhat farcical label, but that’s another topic) is because developers have to jump through so many hoops and adhere to so many regulations that building affordable housing would not only be unprofitable, but put the developers underwater. “Luxury” housing is the only way they can hope to have any margin.
In other words, misadministration of cities is partly to blame for housing shortages, for which solutions like mentioned in the article won’t help. In theory this could be fixed by voters but we have yet to see this happen, likely due to the powers of entrenched interests.
Counter. I live in rural Nova Scotia where plenty of land aren't even zoned, let alone any heavy red tape for developers. I can't get quotes from builders for a small house at anything less than...
Counter.
I live in rural Nova Scotia where plenty of land aren't even zoned, let alone any heavy red tape for developers. I can't get quotes from builders for a small house at anything less than $200k, with road and grade and power and foundation left for me to work out. Trailer homes brand new start at $160k+, delivery and again foundation hookups extra. And that's the ultra rare ones willing to even entertain me with a rough quote.
Developers have gotten fat gains during the boom and they'd be darned if they're willing to cut their own throat with actually affordable housing anymore. Not while they can moan and whine about how they're just dying to help with affordable housing if only red tape can be reduced to zero.
I highly doubt they will build affordable units even if all admin costs go to zero. They'll whine about raw materials and labour costs next. The reality is that while these are all legitimate costs to their bottom line, the reality is that they're so busy making money hand over fist their first priority will always be to extend the gravy train.
Why build at lower prices when the expensive ones are still selling like hot avocado toast? If you were a builder and "luxury" builds are still being bought up, why would you undercut your own market? When there is an adjustment, why cut your own profit first when you can whine your way into lowering development overhead?
Consumer facing prices will be the last thing to come down.
There is a finite number of rich people, so if you only target rich people eventually your margins fall because of heightened competition in the space, and it becomes more profitable to move down...
There is a finite number of rich people, so if you only target rich people eventually your margins fall because of heightened competition in the space, and it becomes more profitable to move down market. Additionally, for the rental market as a whole, more luxury units still applies downward pressure on average rental prices.
I agree, that's why they're not targetting rich people per se, just a bigger segment of the population looking for a roof over their heads, ie, everyone. They're not luxury in the sense that only...
I agree, that's why they're not targetting rich people per se, just a bigger segment of the population looking for a roof over their heads, ie, everyone.
They're not luxury in the sense that only the 1% can afford. They're luxury in the sense that what they're charging is what used to be paid by the 1%. There's nothing actually luxurious about these new units, and in fact they're being bought by desperate middle income earners well over extending themselves on loans, gifts and an incredible percentage of combined income plus rent from roommates.
But much like food, people don't have the option to skip for a few years and wait for market to cool.
And so we see people needing homes, developers standing their ground on profits, and then what must give is people calling for lowering costs for developers in hopes that costs will then come down. My point was that they won't.n
Why won't they? There's numerous case studies. Tokyo is one, for instance. In recent times, and in a more familiar area for most readers, Minneapolis, which has had rent DEFLATION while the rest...
Why won't they? There's numerous case studies. Tokyo is one, for instance. In recent times, and in a more familiar area for most readers, Minneapolis, which has had rent DEFLATION while the rest of the country skyrocketed over the last 5 years:
I'm so glad you brought those up. Japan has a national zoning thing that I think more countries should emulate. No more tiny municipal rulingd. Their economy also lost two solid decades though,...
I'm so glad you brought those up.
Japan has a national zoning thing that I think more countries should emulate. No more tiny municipal rulingd. Their economy also lost two solid decades though, that isn't the same story for US/Canada.
That's a great study about Minneapolis and I hope that's where things are headed for more cities. The idea isn't to deregulate and allow capitalism even freer rein: it's to use government policies that encourage reasonable builds to solve affordability problems.
They got rid of SFH zoning and good riddance. But they didn't just sit back and allow developers to go nuts:
...since 2018 has invested $320 million for rental assistance and subsidies.
Currie Commons is a 187-unit complex under construction in the Harrison neighborhood of north Minneapolis, where the poverty rate exceeds 30%. A quarter of the apartments will be reserved for those making less than 30% of area median income — or $35,500 for a family of four. [...]
David Wellington, its developer, said such projects have more complicated financing and take longer to build than apartments with market-rate rent.
stringent rent-control policy implemented in St. Paul in 2021
The policies outlined in the article are the opposite of let 'em build as much as they want.
Left to developers, without low income and rent control policy requirements, they wouldn't have build any of these kinds of housing at all. It frustrates me that when people propose more units, they often cheer in a policy free vaccum and imagine that unlimited, unregulated builds equals more supply then less demand and cheaper. It doesn't work like that. More of certain kinds of builds would solve the problem, not more unaffordable units.
Rent-control in St. Paul cratered development though. It's an absolutely awful policy that almost all economists agree kills a city. It hurts everyone that ever wants to move, even to a different...
Rent-control in St. Paul cratered development though. It's an absolutely awful policy that almost all economists agree kills a city. It hurts everyone that ever wants to move, even to a different unit. Rent control is like Prop 13 in California on steroids.
Are you referring to their cost of housing over the last two decades or something else? Because Japan is the 3rd or 4th largest economy in the world depending on how you slice is, and they have...
Their economy also lost two solid decades though, that isn't the same story for US/Canada.
Are you referring to their cost of housing over the last two decades or something else? Because Japan is the 3rd or 4th largest economy in the world depending on how you slice is, and they have maintained this while the population has been declining for almost 50 years. Are you referring the their "Lost Decade" from 1991 - 2001?
Anyway, Japan is the only model I am aware of in history of a post population growth economy. It's going to happen to every developed nation in the next ~100 years unless we start growing babies in labs and raise them without parents.
As far as I'm aware, they've only really made real gains in the last two years. I'm referring to the 失われた20年, a term which is letting up in popularity only after the rise of 失われた30年, the lost 30...
As far as I'm aware, they've only really made real gains in the last two years. I'm referring to the 失われた20年, a term which is letting up in popularity only after the rise of 失われた30年, the lost 30 years.
From 1991 to 2003, the Japanese economy, as measured by GDP, grew only 1.14% annually, while the average real growth rate between 2000 and 2010 was about 1%, both well below other industrialized nations.[6][4] Debt levels continued to rise in response to the financial crisis in the Great Recession in 2008, Tōhoku earthquake and tsunami and Fukushima nuclear disaster in 2011, the COVID-19 pandemic, the subsequent recession in January 2020 and October 2021. (Wiki lost decades)
In the following decade, Japan's GDP growth averaged only 0.5% per year as sustained slow growth carried over right up until the global financial crisis and Great Recession.2 As a result, many refer to the period between 1991 and 2010 as the Lost Score, or the Lost 20 Years.
From 2011 to 2019, Japan's GDP grew an average of just under 1.0% per year,2 and 2020 marked the onset of a new global recession as governments locked down economic activity in reaction to the Covid-19 pandemic. Together the years from 1990 to the present are sometimes referred to as Japan's Lost Decades.
The pain is expected to continue for Japan. According to research from the Federal Reserve Bank of St. Louis, recent growth rates imply that Japan's GDP will double in 80 years when previously it doubled every 14 years.3 (investopedia)
Because there's not enough housing that can be build. You have a city like SF where they grant 1-3 large housing permits a year, and of course since there's immense pent up demand in ALL consumer...
Because there's not enough housing that can be build. You have a city like SF where they grant 1-3 large housing permits a year, and of course since there's immense pent up demand in ALL consumer sections, the one highrise apartment that can be built targets the highest margin section.
Because those areas don't actually allow permissive enough zoning for supply to reach equilibrium. The case study in the US of "fuck it just build" is Minneapolis, where it has very clearly been...
Because those areas don't actually allow permissive enough zoning for supply to reach equilibrium. The case study in the US of "fuck it just build" is Minneapolis, where it has very clearly been effective at pushing down rental prices.
“I can’t tell you how many people were like, ‘Oh, look at all this supply, look at all these just brand new buildings,’ and kind of scoffing at it like this was going to lead to gentrification or rents skyrocketing,” said Minneapolis Mayor Jacob Frey, a two-term Democrat, in an interview. “The exact opposite has happened.”
Rent growth in Minneapolis since 2017 is just 1%, compared with 31% in the US overall, according to the Pew Charitable Trusts. Its share of affordable rental units and ratio of rent to income are better than most comparable US metro areas.
I replied to you elsewhere, but what Minneapolis did was not "forget it just build". In fact they tried that in Vancouver too: allow developers to build buildings with X number of low income...
I replied to you elsewhere, but what Minneapolis did was not "forget it just build".
Thirty years ago, a deal between the provincial government and a private developer earmarked six large lots in Yaletown for affordable housing. Several weeks ago, the city announced affordable housing would be built on just three of the lots.
The tenants understood that to mean that when they moved back, they would sign a lease for the same rent they had been paying before they moved (in Gray's case, $1,091 a month), and after two years, their landlord could raise the rent by the roughly two per cent per year currently allowed by B.C.'s rent laws.
But in December 2019, they received another document from Reliance. This one said the arrangement would actually involve signing a lease at the market rent – for Gray, $2,350 for a one-bedroom – and then getting a monthly rebate from Reliance for the difference between the new rent and what they had been paying ($1,112 in Gray's case). At the end of the two years, Gray and his husband would pay the full market rate of $2,350 – a 90 per cent increase, and a rate that would take up around 50 per cent of their combined income.
Just a few of many many many such supply side "solutions" that end up fattening developer wallets and worsening affordability
Developers have near infinite capital, can stall a project for 10+ years, and when hundreds of millions of profit are on the line, they cannot be counted on to do the right thing.
Housing affordability needs a careful multi-prong approach. Free for all builds encourage wild speculators and the worst of capitalism: free builds do not fix affordability issues.
Housing isn't immune from supply and demand. If it's easy to build, developers with always try to undercut each other until there's either a price floor (material costs) or demand decreases (city...
Housing isn't immune from supply and demand. If it's easy to build, developers with always try to undercut each other until there's either a price floor (material costs) or demand decreases (city population shrinks). It takes years to build enough supply to support a healthy market, and Canada's market is beyond fucked on the supply side for a lot of reasons.
Also, rents are whatever people can pay; by definition, some people can afford to pay current rents. If people can't afford to pay, then the building owner doesn't make any money and will drop prices. If all rents in San Francisco were halved tomorrow, there would still be a critical supply shortage causing thousands of people to become homeless.
I'm not defending those specific developers that pulled the rug with their developments. I'm arguing that housing isn't immune from supply and demand. And rent being too damned high isn't that...
I'm not defending those specific developers that pulled the rug with their developments. I'm arguing that housing isn't immune from supply and demand. And rent being too damned high isn't that straightforward.
Rent is only as high as people are willing to pay and developers can get away with charging due to supply constraints (caused by NIMBY regulations).
That would be a separate issue - that there’s a labor shortage in construction. That is what it is, people work and need money. It’s not like when someone is building their own unit that they’re...
That would be a separate issue - that there’s a labor shortage in construction. That is what it is, people work and need money. It’s not like when someone is building their own unit that they’re being forced to build “luxury units”. That’s just part of rural living, since labor is scarcer and you don’t have economies of scale as you do with dense urban areas.
You say this, but after the $3k+ per month units went up across the street, units around me continued to raise in price despite being 30 years older and with no updates. To the point where the...
Additionally, for the rental market as a whole, more luxury units still applies downward pressure on average rental prices.
You say this, but after the $3k+ per month units went up across the street, units around me continued to raise in price despite being 30 years older and with no updates. To the point where the unit I was renting prior to it is now currently $500USD more per month for the same unit.
I don't expect the price of new housing to go down either. From what I've been reading on the Construction Physics blog, figuring out how to cut costs on housing is just hard. The cost of labor...
I don't expect the price of new housing to go down either. From what I've been reading on the Construction Physics blog, figuring out how to cut costs on housing is just hard. The cost of labor goes up, materials go up (sometimes), and it's hard to find ways to make efficiency gains.
But that doesn't mean all is lost. As long as someone is buying new housing and they keep building it, that should take some pressure off the "used" housing market. Historically, mansions in formerly trendy areas get divided up into apartments, etc.
Agree. It's not regulation that drives prices up. Regulations always existed, specially here in Brazil where we are way more strict than the USA. Our houses are made of actual big bricks and...
Agree. It's not regulation that drives prices up. Regulations always existed, specially here in Brazil where we are way more strict than the USA. Our houses are made of actual big bricks and things that don't burn or fall apart.
Blaming regulations is a liberal/capitalist scapegoat. It's always the same. Cars would be more affordable if there are less regulations and taxes! Food would be more affordable if there are less regulations! Without regulations we would be living in luxury tents and drive plastic cars.
It's speculation. You can drop down regulations to zero and housing will still retain it's high cost. The gains will just be bigger.
In Brazil we have more abandoned and empty houses than we have homeless people. We already could house everyone with the existing unoccupied buildings.
The main reason is profit. Housing should be a right, not a market.
I’m not arguing for no regulation, but for removal of truly onerous regulations that directly conflict with the goal of meaningfully increasing housing supply. San Francisco is particularly...
I’m not arguing for no regulation, but for removal of truly onerous regulations that directly conflict with the goal of meaningfully increasing housing supply.
San Francisco is particularly encumbered with these. For instance there’s a couple of “approved” companies that all developers have to work through in order to be able to build in SF, which smells of cronyism and increases costs unnecessarily.
Another is how the city fervently protects a bunch of cheap drafty Victorian houses that were quickly built in the early 1900s following the earthquake, making replacing them with denser (or even just more energy efficient) housing more difficult than necessary. It’s not legal to tear them down for new construction, so as a workaround what people do is tear down all but one wall of the house and then build around that wall since then it’s technically renovation instead of construction.
That’s just a couple examples. SF has tons of these. I’m all for regulations that protect the environment and safety of people (though environmental regulations are often abused by NIMBYs to kill projects), but many of SF’s are not of that sort and are just stupid.
Zoning is somewhat important though, and I'm always a bit skeptical when I hear people advocating for removing it as much as possible. Not to say it doesn't get abused...theres few if any reasons...
Zoning is somewhat important though, and I'm always a bit skeptical when I hear people advocating for removing it as much as possible. Not to say it doesn't get abused...theres few if any reasons high-density housing should be outright banned unless the terrain is not stable enough for tall dwellings. Or that residential and commercial zones can't intermingle.
The biggest thing that comes to mind is zoning arable land for agriculture. That land is often infinitely more valuable when it's permitted to be parcelled out and built on....but that kind of is at odds with the goal of growing enough food to feed people.
I'd push for the elimination of single-family zoning. That's the main issue. In a lot of places it exists specifically for racist reasons. Universally it's classist.
I'd push for the elimination of single-family zoning. That's the main issue. In a lot of places it exists specifically for racist reasons. Universally it's classist.
We're stuck at an impasse where policies which will help everyone will possibly bring down housing prices for those who already bought, and thus are political suicide to push. Instead, policies to...
We're stuck at an impasse where policies which will help everyone will possibly bring down housing prices for those who already bought, and thus are political suicide to push.
Instead, policies to zone even more SFH into green belt and forests and sprawl, subsidized by additional road and car spending, are much more popular.
I understand. Ideally we'd have some 3rd option. I say this as someone that's planning to buy a home soon: fuck NIMBYs. If someone prioritizes a marginal increase in retirement comfort over a...
I understand. Ideally we'd have some 3rd option.
I say this as someone that's planning to buy a home soon: fuck NIMBYs. If someone prioritizes a marginal increase in retirement comfort over a generation's ability to even own a home they are the problem. I wish YIMBYs could harness the level of intra-American hatred the right uses to screw over the poor to screw over the rich.
Oh I'm so with you on that. I wish more fellow home owners would organize YIMBY power like you said, even if it means lowering my property prices. Why should I make such gains from doing nothing...
Oh I'm so with you on that. I wish more fellow home owners would organize YIMBY power like you said, even if it means lowering my property prices. Why should I make such gains from doing nothing at all while young people have their life blood sucked out by rent?
Congrats on almost buying a home btw. Huge step these days.
I don't think it's quite that gloomy. For example, single-family zoning laws were recently invalidated in California. (It will take time for that to have much effect, though.)
I don't think it's quite that gloomy. For example, single-family zoning laws were recently invalidated in California. (It will take time for that to have much effect, though.)
It's a small step (and we may need to do this in many small steps, so that's okay). As far as I understand what they did was redefine single-family to mean two-family. Politically, It actually...
It's a small step (and we may need to do this in many small steps, so that's okay). As far as I understand what they did was redefine single-family to mean two-family. Politically, It actually works pretty well. It doesn't change the character of any neighborhoods. And if you have a SFH your home's value will, if anything, go up higher as other buildings are cut in half or torn down to be replaced with duplexes. The remaining SFHs will be rarer and rarer commodities.
Exactly. "Character of neighborhood" is often a pretty big warning sign, unless it's only talking about restricting things like billboards and consistency of commercial signage. And also proper...
Exactly. "Character of neighborhood" is often a pretty big warning sign, unless it's only talking about restricting things like billboards and consistency of commercial signage.
And also proper exemptions for proper historical buildings are nice...they don't make them like they used to and it's always a shame to see some beautiful architecture stripped in favor of yet-another-grey/white building.
You would also want to zone industrial zones for pollution segregation away from the rest of the city. (This also applies to livestock farmland, but you’re already proposing to protect it for...
You would also want to zone industrial zones for pollution segregation away from the rest of the city. (This also applies to livestock farmland, but you’re already proposing to protect it for different reasons)
Zoning is incredibly important. Otherwise we would have houses whose windows open into a neighbour's wall, units with no fire escape routes, skyscrapers with no parking spaces, building on wet...
Zoning is incredibly important. Otherwise we would have houses whose windows open into a neighbour's wall, units with no fire escape routes, skyscrapers with no parking spaces, building on wet tidal sand, and all kinds of nonsense that people can get away with.
And yes losing farm land to development is a huge huge issue.
Oh man, but I love the "door to nowhere" that sometimes appears when a single-family is haphazardly converted to a duplex. Though I think many of the things you mention are covered under building...
Oh man, but I love the "door to nowhere" that sometimes appears when a single-family is haphazardly converted to a duplex.
Though I think many of the things you mention are covered under building codes and setbacks more than zoning, although I suppose they intermingle as different zones can have different building codes.
Although setbacks are the only thing really keeping me from having a small wind turbine. The town managed to set them just enough to keep out of trouble from the state law while severely limiting the number of homes that can practically do it without a lengthy variance petitioning process.
Oh my apologies, are set backs not part of bylaws and zonings in the states? Over in BC, ON and NS (where I've looked) how far you can build to property line, if you can keep livestock and how...
Oh my apologies, are set backs not part of bylaws and zonings in the states? Over in BC, ON and NS (where I've looked) how far you can build to property line, if you can keep livestock and how many, if you can build over water and how close are outlined in the municipal zoning. As is how many parking lots min and max. Whereas fire escapes is indeed building code, my apologies.
Off topic,
I'm intrigued by this wind turbine idea. As mentioned I live in un zoned rural Canada. As long as we're not loud about messing with the creek it's basically free for all here. Wind turbine for electricity? I would love a wind energy thing to help fetch water to the back area, and maybe to power basic things in a tiny cabin, but being generally not a handy person I haven't done any homework on that yet. Asking to see if I can copy yours.
Edit: haha yes there are indeed several "door to nowhere"'s in my immediate neighbourhood.....
Here's a start to the wind turbine rabbithole. Oh they can be yes, but they also can be independent (thinking things like the fire escape requirements, elecrical/plumbing code in particular) that...
Oh they can be yes, but they also can be independent (thinking things like the fire escape requirements, elecrical/plumbing code in particular) that exist outside of the zoning laws themselves and exist only as a reference to meeting their requirements. Setbacks in my town are universal regardless of zone, requiring a variance for any deviation.
Could you explain why losing farm land to housing development is a huge issue in the US? I'm not well-versed in the particular subject, but based on the broad information I know, it seems like a...
Could you explain why losing farm land to housing development is a huge issue in the US?
I'm not well-versed in the particular subject, but based on the broad information I know, it seems like a small increase in urban land use shouldn't matter. I looked up some stats, and it seems like urban land use is 3% of total land, rural residential 4%, and agricultural land 52%. So even if we increased urban land use by 10% (0.3 percentage points), that would be enough to add a huge amount of housing, especially if there is a focus on high density housing. Going from 52% to 51.7% land use shouldn't make much of a dent in food production, especially since we export 20% of our food and waste 40% of the food we keep.
I grew up next to like a 200 acre farm. Once those zoning laws eased up, boom, farm is gone. In its place several 3000sqft McMansions with 1/2 acre of land each, a giant maze of cul-de-sacs, and a...
I grew up next to like a 200 acre farm. Once those zoning laws eased up, boom, farm is gone.
In its place several 3000sqft McMansions with 1/2 acre of land each, a giant maze of cul-de-sacs, and a bunch of imported sod full of invasive weeds and pesticides coating that previously nutrient-rich living-soil farmland which was growing food because the farmer could cash out to a developer at 3x the price they could for the farmland itself.
And just like that, the USA's food production capability decreased by 200 acres, essentially permanently. Rinse and repeat thousands upon thousands of times across the nation.
Arable land is not exactly a renewable resource. We might be overproducing food now, but not if we let every farm get turned into a Walmart or retirement home because "free market."
In terms of ecological damage done, 400ish new houses were built in a way that makes it impossible to do anything but drive a car to them. It would have been better to let that land go fallow instead of parcelling out to make America's car dependence even worse.
And to be clear, this was not an area or time that was exactly hurting for housing availability. It was the kind of thing that ushered in the rush for only catering to "luxury" housing to justify higher margins.
I think we fundamentally view things very differently. Some of the points you present as a negative I view as a positive. I think it's a good thing that a farmer can cash out to a housing...
I think we fundamentally view things very differently. Some of the points you present as a negative I view as a positive.
I think it's a good thing that a farmer can cash out to a housing developer. If society values the land more as housing than as farmland, it's an efficiency that such a transaction and conversion is allowed to happen. This way more people get what they want.
When you say "200 acres ... thousands upon thousands of times across the nation" I feel like you're implying that this is enough to make it a significant problem, but looking at the scale makes me feel like you're agreeing with a point in my previous comment. Just ballparking, 200 acres x 10,000 times = 2M acres. Given that the current amount of agricultural land is ~1.2B acres, this represent a decrease of 0.2%, basically a rounding error. As of 2020, the housing supply shortage nationwide was 3.8 million units. So to oversimplify it for the sake of quantifying value, if we just sacrificed another 0.2% of farmland and divided it into 4M half acre units, that would cover the entire housing shortage. To be crystal clear, I'm not actually suggesting we do something like this, just a calculation to show scale and value. I'm not a fan of suburban sprawl either so your points on environmental damage are well taken, but in general it seems like a good value proposition to convert some farmland to housing.
Not sure where you're getting your numbers from, but there's only about 410M acres of cropland in the USA. But yes, I'll grant that there are places (especially places that are not suitable due to...
Not sure where you're getting your numbers from, but there's only about 410M acres of cropland in the USA.
But yes, I'll grant that there are places (especially places that are not suitable due to water demands) where it could make sense to build out. Even then, I feel 'emminent domain the ag land at market value for ag land, then convert to development land with high density and auction off at new value' is a better path. A farmer shouldn't be getting a bigger payday for bypassing the rules intended to protect farmland. Especially since nowadays the 'small farmer' is basically nonexistent compared to the before times.
Part of the reason to keep it protected is also that not every bit will be parcelled out into proper small lots. Many turn into 2/5/10 acre lots.
A fair bit of this farmland doesn't exist anywhere remotely near public transportation or really any infrastructure more interesting than a Walmart SuperCenter. It won't really solve the housing crisis partially because it doesn't really alleviate the pressure off the spots where housing is really in demand. Most of these areas already have plenty of housing available for well under $200k.....just you probably have to put in some elbow grease and jumpstart an economy.
USDA I don't know if you were specifically excluding pasture land, but my experience is that agricultural land near cities can be either crop or pasture land. In fact, my father lives in a...
The U.S. land area covers nearly 2.3 billion acres ... About 52 percent of the 2012 U.S. land base (including Alaska and Hawaii) is used for agricultural purposes, including cropping, grazing (on pasture, range, and in forests), and farmsteads/farm roads.
I don't know if you were specifically excluding pasture land, but my experience is that agricultural land near cities can be either crop or pasture land. In fact, my father lives in a community that was pasture land when I was younger.
While cities retain ownership of the properties and profits are funneling into city coffers I would prefer that cities use their power to offer either a buyback program for tenants or lifelong...
While cities retain ownership of the properties and profits are funneling into city coffers I would prefer that cities use their power to offer either a buyback program for tenants or lifelong leases in order to spur residents to maintain and keep the properties up, a sense of ownership goes very far. A buyback program could even be backed by the city to offer tenant-buyers cheaper interests rates and/or prices. I think it's valid to worry that as revenue sources get diverted by politics and periodic budget crunches come up that maintenance and updating of these properties could easily get cut and these projects could slowly become slums for the poor.
An interesting program is springing up around the US as cities begin to invest in affordable housing themselves. The innovations of these programs lay in providing developers favorable loan terms...
An interesting program is springing up around the US as cities begin to invest in affordable housing themselves. The innovations of these programs lay in providing developers favorable loan terms and lower taxes to spur development because developers would prefer to chase higher returns made possible by such benefits.
I grew up in Montgomery Co, back in the 70s and 80s. In sixth grade there was forced bussing of kids from "the projects" into our middle class (though ethnically diverse) school. I remember...
I grew up in Montgomery Co, back in the 70s and 80s. In sixth grade there was forced bussing of kids from "the projects" into our middle class (though ethnically diverse) school. I remember driving by the place where some of my new classmates lived and being shocked at how miserable, dirty and depressing it was.
I am very happy to see that this is changing in a positive way, and I really hope it is only the beginning.
In some localities what would help a lot is if city governments could get out of their own way and let developers build.
The reason why the vast majority of housing developments in the SF Bay Area and especially SF itself are “luxury” (a somewhat farcical label, but that’s another topic) is because developers have to jump through so many hoops and adhere to so many regulations that building affordable housing would not only be unprofitable, but put the developers underwater. “Luxury” housing is the only way they can hope to have any margin.
In other words, misadministration of cities is partly to blame for housing shortages, for which solutions like mentioned in the article won’t help. In theory this could be fixed by voters but we have yet to see this happen, likely due to the powers of entrenched interests.
Counter.
I live in rural Nova Scotia where plenty of land aren't even zoned, let alone any heavy red tape for developers. I can't get quotes from builders for a small house at anything less than $200k, with road and grade and power and foundation left for me to work out. Trailer homes brand new start at $160k+, delivery and again foundation hookups extra. And that's the ultra rare ones willing to even entertain me with a rough quote.
Developers have gotten fat gains during the boom and they'd be darned if they're willing to cut their own throat with actually affordable housing anymore. Not while they can moan and whine about how they're just dying to help with affordable housing if only red tape can be reduced to zero.
I highly doubt they will build affordable units even if all admin costs go to zero. They'll whine about raw materials and labour costs next. The reality is that while these are all legitimate costs to their bottom line, the reality is that they're so busy making money hand over fist their first priority will always be to extend the gravy train.
Why build at lower prices when the expensive ones are still selling like hot avocado toast? If you were a builder and "luxury" builds are still being bought up, why would you undercut your own market? When there is an adjustment, why cut your own profit first when you can whine your way into lowering development overhead?
Consumer facing prices will be the last thing to come down.
There is a finite number of rich people, so if you only target rich people eventually your margins fall because of heightened competition in the space, and it becomes more profitable to move down market. Additionally, for the rental market as a whole, more luxury units still applies downward pressure on average rental prices.
I agree, that's why they're not targetting rich people per se, just a bigger segment of the population looking for a roof over their heads, ie, everyone.
They're not luxury in the sense that only the 1% can afford. They're luxury in the sense that what they're charging is what used to be paid by the 1%. There's nothing actually luxurious about these new units, and in fact they're being bought by desperate middle income earners well over extending themselves on loans, gifts and an incredible percentage of combined income plus rent from roommates.
But much like food, people don't have the option to skip for a few years and wait for market to cool.
And so we see people needing homes, developers standing their ground on profits, and then what must give is people calling for lowering costs for developers in hopes that costs will then come down. My point was that they won't.n
Why won't they? There's numerous case studies. Tokyo is one, for instance. In recent times, and in a more familiar area for most readers, Minneapolis, which has had rent DEFLATION while the rest of the country skyrocketed over the last 5 years:
https://fortune.com/2023/08/09/minneapolis-housing-zoning-real-estate-inflation-yimby-nimby-minnesota/
How? By allowing developers to build a lot, and very big, housing units. As much as they want.
I'm so glad you brought those up.
Japan has a national zoning thing that I think more countries should emulate. No more tiny municipal rulingd. Their economy also lost two solid decades though, that isn't the same story for US/Canada.
That's a great study about Minneapolis and I hope that's where things are headed for more cities. The idea isn't to deregulate and allow capitalism even freer rein: it's to use government policies that encourage reasonable builds to solve affordability problems.
They got rid of SFH zoning and good riddance. But they didn't just sit back and allow developers to go nuts:
The policies outlined in the article are the opposite of let 'em build as much as they want.
Left to developers, without low income and rent control policy requirements, they wouldn't have build any of these kinds of housing at all. It frustrates me that when people propose more units, they often cheer in a policy free vaccum and imagine that unlimited, unregulated builds equals more supply then less demand and cheaper. It doesn't work like that. More of certain kinds of builds would solve the problem, not more unaffordable units.
Rent-control in St. Paul cratered development though. It's an absolutely awful policy that almost all economists agree kills a city. It hurts everyone that ever wants to move, even to a different unit. Rent control is like Prop 13 in California on steroids.
Are you referring to their cost of housing over the last two decades or something else? Because Japan is the 3rd or 4th largest economy in the world depending on how you slice is, and they have maintained this while the population has been declining for almost 50 years. Are you referring the their "Lost Decade" from 1991 - 2001?
Anyway, Japan is the only model I am aware of in history of a post population growth economy. It's going to happen to every developed nation in the next ~100 years unless we start growing babies in labs and raise them without parents.
As far as I'm aware, they've only really made real gains in the last two years. I'm referring to the 失われた20年, a term which is letting up in popularity only after the rise of 失われた30年, the lost 30 years.
Because there's not enough housing that can be build. You have a city like SF where they grant 1-3 large housing permits a year, and of course since there's immense pent up demand in ALL consumer sections, the one highrise apartment that can be built targets the highest margin section.
Because those areas don't actually allow permissive enough zoning for supply to reach equilibrium. The case study in the US of "fuck it just build" is Minneapolis, where it has very clearly been effective at pushing down rental prices.
https://fortune.com/2023/08/09/minneapolis-housing-zoning-real-estate-inflation-yimby-nimby-minnesota/
I replied to you elsewhere, but what Minneapolis did was not "forget it just build".
In fact they tried that in Vancouver too: allow developers to build buildings with X number of low income units. The developers instead built luxury-priced condos and just paid a fine instead of actually delivering on low income units. Other ones whined and cried and moaned after they got the permit plus cheap land and keep strong arming the city for concessions after concession
Here's another one (2018):
And this bait and switch
Just a few of many many many such supply side "solutions" that end up fattening developer wallets and worsening affordability
Developers have near infinite capital, can stall a project for 10+ years, and when hundreds of millions of profit are on the line, they cannot be counted on to do the right thing.
Housing affordability needs a careful multi-prong approach. Free for all builds encourage wild speculators and the worst of capitalism: free builds do not fix affordability issues.
Housing isn't immune from supply and demand. If it's easy to build, developers with always try to undercut each other until there's either a price floor (material costs) or demand decreases (city population shrinks). It takes years to build enough supply to support a healthy market, and Canada's market is beyond fucked on the supply side for a lot of reasons.
Also, rents are whatever people can pay; by definition, some people can afford to pay current rents. If people can't afford to pay, then the building owner doesn't make any money and will drop prices. If all rents in San Francisco were halved tomorrow, there would still be a critical supply shortage causing thousands of people to become homeless.
I'm not defending those specific developers that pulled the rug with their developments. I'm arguing that housing isn't immune from supply and demand. And rent being too damned high isn't that straightforward.
Rent is only as high as people are willing to pay and developers can get away with charging due to supply constraints (caused by NIMBY regulations).
That would be a separate issue - that there’s a labor shortage in construction. That is what it is, people work and need money. It’s not like when someone is building their own unit that they’re being forced to build “luxury units”. That’s just part of rural living, since labor is scarcer and you don’t have economies of scale as you do with dense urban areas.
You say this, but after the $3k+ per month units went up across the street, units around me continued to raise in price despite being 30 years older and with no updates. To the point where the unit I was renting prior to it is now currently $500USD more per month for the same unit.
Because the supply shortage is so bad that one "luxury" building isn't gonna house everyone that needs a home.
I don't expect the price of new housing to go down either. From what I've been reading on the Construction Physics blog, figuring out how to cut costs on housing is just hard. The cost of labor goes up, materials go up (sometimes), and it's hard to find ways to make efficiency gains.
But that doesn't mean all is lost. As long as someone is buying new housing and they keep building it, that should take some pressure off the "used" housing market. Historically, mansions in formerly trendy areas get divided up into apartments, etc.
Agree. It's not regulation that drives prices up. Regulations always existed, specially here in Brazil where we are way more strict than the USA. Our houses are made of actual big bricks and things that don't burn or fall apart.
Blaming regulations is a liberal/capitalist scapegoat. It's always the same. Cars would be more affordable if there are less regulations and taxes! Food would be more affordable if there are less regulations! Without regulations we would be living in luxury tents and drive plastic cars.
It's speculation. You can drop down regulations to zero and housing will still retain it's high cost. The gains will just be bigger.
In Brazil we have more abandoned and empty houses than we have homeless people. We already could house everyone with the existing unoccupied buildings.
The main reason is profit. Housing should be a right, not a market.
I’m not arguing for no regulation, but for removal of truly onerous regulations that directly conflict with the goal of meaningfully increasing housing supply.
San Francisco is particularly encumbered with these. For instance there’s a couple of “approved” companies that all developers have to work through in order to be able to build in SF, which smells of cronyism and increases costs unnecessarily.
Another is how the city fervently protects a bunch of cheap drafty Victorian houses that were quickly built in the early 1900s following the earthquake, making replacing them with denser (or even just more energy efficient) housing more difficult than necessary. It’s not legal to tear them down for new construction, so as a workaround what people do is tear down all but one wall of the house and then build around that wall since then it’s technically renovation instead of construction.
That’s just a couple examples. SF has tons of these. I’m all for regulations that protect the environment and safety of people (though environmental regulations are often abused by NIMBYs to kill projects), but many of SF’s are not of that sort and are just stupid.
Zoning is somewhat important though, and I'm always a bit skeptical when I hear people advocating for removing it as much as possible. Not to say it doesn't get abused...theres few if any reasons high-density housing should be outright banned unless the terrain is not stable enough for tall dwellings. Or that residential and commercial zones can't intermingle.
The biggest thing that comes to mind is zoning arable land for agriculture. That land is often infinitely more valuable when it's permitted to be parcelled out and built on....but that kind of is at odds with the goal of growing enough food to feed people.
I'd push for the elimination of single-family zoning. That's the main issue. In a lot of places it exists specifically for racist reasons. Universally it's classist.
We're stuck at an impasse where policies which will help everyone will possibly bring down housing prices for those who already bought, and thus are political suicide to push.
Instead, policies to zone even more SFH into green belt and forests and sprawl, subsidized by additional road and car spending, are much more popular.
I understand. Ideally we'd have some 3rd option.
I say this as someone that's planning to buy a home soon: fuck NIMBYs. If someone prioritizes a marginal increase in retirement comfort over a generation's ability to even own a home they are the problem. I wish YIMBYs could harness the level of intra-American hatred the right uses to screw over the poor to screw over the rich.
Oh I'm so with you on that. I wish more fellow home owners would organize YIMBY power like you said, even if it means lowering my property prices. Why should I make such gains from doing nothing at all while young people have their life blood sucked out by rent?
Congrats on almost buying a home btw. Huge step these days.
I don't think it's quite that gloomy. For example, single-family zoning laws were recently invalidated in California. (It will take time for that to have much effect, though.)
It's a small step (and we may need to do this in many small steps, so that's okay). As far as I understand what they did was redefine single-family to mean two-family. Politically, It actually works pretty well. It doesn't change the character of any neighborhoods. And if you have a SFH your home's value will, if anything, go up higher as other buildings are cut in half or torn down to be replaced with duplexes. The remaining SFHs will be rarer and rarer commodities.
Exactly. "Character of neighborhood" is often a pretty big warning sign, unless it's only talking about restricting things like billboards and consistency of commercial signage.
And also proper exemptions for proper historical buildings are nice...they don't make them like they used to and it's always a shame to see some beautiful architecture stripped in favor of yet-another-grey/white building.
You would also want to zone industrial zones for pollution segregation away from the rest of the city. (This also applies to livestock farmland, but you’re already proposing to protect it for different reasons)
Zoning is incredibly important. Otherwise we would have houses whose windows open into a neighbour's wall, units with no fire escape routes, skyscrapers with no parking spaces, building on wet tidal sand, and all kinds of nonsense that people can get away with.
And yes losing farm land to development is a huge huge issue.
Oh man, but I love the "door to nowhere" that sometimes appears when a single-family is haphazardly converted to a duplex.
Though I think many of the things you mention are covered under building codes and setbacks more than zoning, although I suppose they intermingle as different zones can have different building codes.
Although setbacks are the only thing really keeping me from having a small wind turbine. The town managed to set them just enough to keep out of trouble from the state law while severely limiting the number of homes that can practically do it without a lengthy variance petitioning process.
Oh my apologies, are set backs not part of bylaws and zonings in the states? Over in BC, ON and NS (where I've looked) how far you can build to property line, if you can keep livestock and how many, if you can build over water and how close are outlined in the municipal zoning. As is how many parking lots min and max. Whereas fire escapes is indeed building code, my apologies.
Off topic,
I'm intrigued by this wind turbine idea. As mentioned I live in un zoned rural Canada. As long as we're not loud about messing with the creek it's basically free for all here. Wind turbine for electricity? I would love a wind energy thing to help fetch water to the back area, and maybe to power basic things in a tiny cabin, but being generally not a handy person I haven't done any homework on that yet. Asking to see if I can copy yours.
Edit: haha yes there are indeed several "door to nowhere"'s in my immediate neighbourhood.....
Here's a start to the wind turbine rabbithole.
Oh they can be yes, but they also can be independent (thinking things like the fire escape requirements, elecrical/plumbing code in particular) that exist outside of the zoning laws themselves and exist only as a reference to meeting their requirements. Setbacks in my town are universal regardless of zone, requiring a variance for any deviation.
Could you explain why losing farm land to housing development is a huge issue in the US?
I'm not well-versed in the particular subject, but based on the broad information I know, it seems like a small increase in urban land use shouldn't matter. I looked up some stats, and it seems like urban land use is 3% of total land, rural residential 4%, and agricultural land 52%. So even if we increased urban land use by 10% (0.3 percentage points), that would be enough to add a huge amount of housing, especially if there is a focus on high density housing. Going from 52% to 51.7% land use shouldn't make much of a dent in food production, especially since we export 20% of our food and waste 40% of the food we keep.
I grew up next to like a 200 acre farm. Once those zoning laws eased up, boom, farm is gone.
In its place several 3000sqft McMansions with 1/2 acre of land each, a giant maze of cul-de-sacs, and a bunch of imported sod full of invasive weeds and pesticides coating that previously nutrient-rich living-soil farmland which was growing food because the farmer could cash out to a developer at 3x the price they could for the farmland itself.
And just like that, the USA's food production capability decreased by 200 acres, essentially permanently. Rinse and repeat thousands upon thousands of times across the nation.
Arable land is not exactly a renewable resource. We might be overproducing food now, but not if we let every farm get turned into a Walmart or retirement home because "free market."
In terms of ecological damage done, 400ish new houses were built in a way that makes it impossible to do anything but drive a car to them. It would have been better to let that land go fallow instead of parcelling out to make America's car dependence even worse.
And to be clear, this was not an area or time that was exactly hurting for housing availability. It was the kind of thing that ushered in the rush for only catering to "luxury" housing to justify higher margins.
I think we fundamentally view things very differently. Some of the points you present as a negative I view as a positive.
I think it's a good thing that a farmer can cash out to a housing developer. If society values the land more as housing than as farmland, it's an efficiency that such a transaction and conversion is allowed to happen. This way more people get what they want.
When you say "200 acres ... thousands upon thousands of times across the nation" I feel like you're implying that this is enough to make it a significant problem, but looking at the scale makes me feel like you're agreeing with a point in my previous comment. Just ballparking, 200 acres x 10,000 times = 2M acres. Given that the current amount of agricultural land is ~1.2B acres, this represent a decrease of 0.2%, basically a rounding error. As of 2020, the housing supply shortage nationwide was 3.8 million units. So to oversimplify it for the sake of quantifying value, if we just sacrificed another 0.2% of farmland and divided it into 4M half acre units, that would cover the entire housing shortage. To be crystal clear, I'm not actually suggesting we do something like this, just a calculation to show scale and value. I'm not a fan of suburban sprawl either so your points on environmental damage are well taken, but in general it seems like a good value proposition to convert some farmland to housing.
I don't know what year this event happened in, but housing prices have been constantly rising year over year since at least the 70's. It may not have looked like we were heading towards a severe housing shortage at the time, but that frog has been boiling for a long time.
Not sure where you're getting your numbers from, but there's only about 410M acres of cropland in the USA.
But yes, I'll grant that there are places (especially places that are not suitable due to water demands) where it could make sense to build out. Even then, I feel 'emminent domain the ag land at market value for ag land, then convert to development land with high density and auction off at new value' is a better path. A farmer shouldn't be getting a bigger payday for bypassing the rules intended to protect farmland. Especially since nowadays the 'small farmer' is basically nonexistent compared to the before times.
Part of the reason to keep it protected is also that not every bit will be parcelled out into proper small lots. Many turn into 2/5/10 acre lots.
A fair bit of this farmland doesn't exist anywhere remotely near public transportation or really any infrastructure more interesting than a Walmart SuperCenter. It won't really solve the housing crisis partially because it doesn't really alleviate the pressure off the spots where housing is really in demand. Most of these areas already have plenty of housing available for well under $200k.....just you probably have to put in some elbow grease and jumpstart an economy.
USDA
I don't know if you were specifically excluding pasture land, but my experience is that agricultural land near cities can be either crop or pasture land. In fact, my father lives in a community that was pasture land when I was younger.
Yes, excluding forests, grazing and pasture land. Because I was talking about crops.
Pasture and grazing land is often not suitable for crops.
While cities retain ownership of the properties and profits are funneling into city coffers I would prefer that cities use their power to offer either a buyback program for tenants or lifelong leases in order to spur residents to maintain and keep the properties up, a sense of ownership goes very far. A buyback program could even be backed by the city to offer tenant-buyers cheaper interests rates and/or prices. I think it's valid to worry that as revenue sources get diverted by politics and periodic budget crunches come up that maintenance and updating of these properties could easily get cut and these projects could slowly become slums for the poor.
An interesting program is springing up around the US as cities begin to invest in affordable housing themselves. The innovations of these programs lay in providing developers favorable loan terms and lower taxes to spur development because developers would prefer to chase higher returns made possible by such benefits.
I grew up in Montgomery Co, back in the 70s and 80s. In sixth grade there was forced bussing of kids from "the projects" into our middle class (though ethnically diverse) school. I remember driving by the place where some of my new classmates lived and being shocked at how miserable, dirty and depressing it was.
I am very happy to see that this is changing in a positive way, and I really hope it is only the beginning.