It blows my mind that virtually every major city in the developed world is facing this same problem, yet nobody is doing anything about it.
It's a pretty simple problem with a pretty simple solution. The problem is that local city councils have restricted the freedom to build through excessive zoning laws and regulations in order to increase housing prices for their own private investment benefit.
The solution is to relinquish them of this self-interested tyrant-like overbearing power and set these policies on the national level - basically how Japan does it. The more localized the power, the more self-interest is going to favor a minority of private individuals at the expense of society.
A solution is to regulate it nationally. However, for the US I loathe that idea. I firmly believe communities have the right to regulate themselves in this way, which naturally produces wonderful diversity and character and autonomy and all that good stuff.
I like the option of looking at how/why entrenched landowners control those communities. If the city councils were more broadly representative, that might solve the problem.
If anything, New York City is the poster child for too-centralized regulation. Why are the codes not far more locally governed? Who knows.
Although I'm generally opposed to centralizing decision making, there seems to be proof that centralizing building restriction away from municipalities would help [1].
Restrictions on generating housing stock seems to be by far the biggest driver of income inequality and gentrification ("regulation accounts for 85% of the increase of house price dispersion from 1980 to 2009"). Not just gentrification within cities but the polarization of groups across a country.
>It blows my mind that virtually every major city in the developed world is facing this same problem, yet nobody is doing anything about it. It's a pretty simple problem with a pretty simple solution.
If it's a local problem with local solutions then why did it happen to more or less every major city in the developed world at the same time? Weird parking regulations are specific to Los Angeles.
It could be that wealth inequality is the primary cause of all of this but what do I know? I'm not the kind of person who would make a ton of cash if Los Angeles building regulations were slashed.
Ironically the architect actually indirectly points this proximate cause by pointing out that land prices have skyrocketed. He just didn't think to question why.
If land prices keep going up investors' incentive to treat apartments like bars of investment gold will keep going up too. If wealth inequality gets worse, more of that money will be stashed in land (luxury apartments), causing prices to rise. All of this will happen whether or not Los Angeles parking regulations are cut.
If California rolled back prop 13, on the other hand, that would help somewhat to de-goldify land and provide enough money to the state budget to build affordable housing the old fashioned way it has always been built: by the government.
What you've described is primarily an American problem, especially a Californian problem. As someone who spends a lot of time in Washington DC and The Netherlands it's not nearly as bad in either place. NIMBYism is particularly terrible in CA, but my experience in The Netherlands is that it doesn't cause near as many problems.
From my European point of view, I find the whole hangup about the parking space regulations very interesting.
Here in Zurich, there are the same sort of complaints about parking for new buildings going up, however there is now a different trend: Because rent for the parking space is typically charged separately from the apartment's rent, some parking space simply can't be rented out because residents don't have cars.
It also shows a table on page 3 that explains how you actually are allowed and required to build less and less parking spaces the closer you get to the city center, so much so that if you look at the maps on pages 6 to 7, you can see that that grey area allows <= 10% of the parking of the white area.
Just to confirm the European viewpoint, it is pretty much normal in Italy, France and Spain to have similar requirements.
But they are "logical" and at least here in cities, beyond and besides the building codes, having more parking space can be a resource, i.e. unused/excess parking places are commonly rented as there is anyway great scarcity of them for the people leaving in historical buildings that of course at the time they were built had no such requirements.
Of course it is a cost since, just like it is in the US, in the words of the architect:
>But wait, there’s more! That parking space for each unit either has to be at ground level (which is the most valuable real estate on the whole project), or it has to be above or below ground.
we cannot make them float in the air ;).
And of course requirements are not the same in city centres as they are in the outskirts, where areas are larger and building density allowed is much lower.
I don't fully agree with the added cost for parking to be the main reason for high costs of the building, I find the culprit to be more "the market" and also (within limits) the higher standards (and expectations of the customers).
I heve seen dramatic increasings in the costs of plumbing (not only the plumbing in itself, but also the kind of stuff that is installed, "design" basins, taps, showers, etc.), and electricity (here it is BOTH pricey switches, plugs, etc, and greatly increased number of them), besides safety related items.
As a side note, and it depends of course on specific zones, having an underground parking under the building may actually help with seismic compliance and with getting rid of radon, so some of it is not only "added cost", the real cost issues come when the size of the parking is big enough to "trigger" stricter fire safety provisions.
The EXACT same thing happened/is happening here, all the part starting from:
> All that was manageable to an extent before the crash of 2008.
is entirely accurate on this side of the pond, and has been described perfectly.
Before or around 2008 you couldn't find reliable people/contractors because they were 100% busy (while you could find a lot of only half-professionals), now you cannot find them simply because they became almost extincted.
My dad is in construction and I thought I'd chime in with another practical reason.
Once you're building at larger scales, the cost of materials between a luxury condo and a subluxury condo are different, but not astronomically so.
Developers will go to China, Mexico, etc. and source some really nice stuff very cheaply. Sure, there are exceptions, i.e., materials that are expensive no matter what, but once you figure out a way to use cheap labor, the actual building materials are cheap.
It's similar to luxury cars - the "luxury" part doesn't necessarily cost a lot more (but yes does cost a bit more) but it can be marked up a lot, lot more.
>It's similar to luxury cars - the "luxury" part doesn't necessarily cost a lot more (but yes does cost a bit more) but it can be marked up a lot, lot more.
This is also correct, but there is an additional twist to it.
Non-luxury may be not marketable (besides bringing less margin).
It is a curious market, I have seen more than one case of building companies that were put on their knees by the lack of buyers because they built "too basic" houses, believing that the relatively low price would have procured lots of willing buyers and this simply didn't happen, and they had to apply rebates over rebates, thus losing money in real terms to be able to sell them (if/when this actually happened).
This is an interesting point about college education:
Traditionally, contracting was the best paying "blue collar" job out there, and to a certain extent it still is. If you were smart, hardworking, but didn't go to college, you started hauling bricks on a construction site and then worked your way up to general contractor over the course of years. Lots of the best GCs out there did this. But, as less and less of super capable kids DON'T go to college, there are less super capable 18 yearolds hauling bricks and 10 years later, less super capable GCs.
As more and more kids are going to college, who will do these high-skill blue-collar jobs?
To me it appears the same group of kids is doing it, but now with college degrees. I have a friend who was a GC at 25, the main obstacle to his success was access to capital, which he achieved through a friend's father who was already in the business and looking for investment opportunities.
He spent a bunch of years working on his skills and doing his own work, but now just subcontracts all the labor (mostly to immigrants), deals with legal/zoning issues, and keeps the client happy.
I suspect the old system (start at the bottom, amass skills & capital until you're on top) won't work anymore, because the capital arrangement strongly favors people with a money connection over skills. But time will tell.
Probably the same super capable kids just starting 10 years later as - still super capable - adults, realizing that their college degree has brought them virtually zero advantage over everyone else in the labour market.
This is what happens when the upper-middle and upper classes are the only groups seeing an increase in quality of life. People would still be going into these industries if they were seen as long-term careers. If wages don't increase above real inflation, people will move to different industries.
This is the direct result of outsourcing and illegal immigration gutting the middle class.
LA, and most US cities, need to be more like Tokyo -- which has much better zoning/building regulations (as in, less onerous).
> Here is a startling fact: in 2014 there were 142,417 housing starts in the city of Tokyo (population 13.3m, no empty land), more than the 83,657 housing permits issued in the state of California (population 38.7m), or the 137,010 houses started in the entire country of England (population 54.3m).
Short version: affordable housing is illegal to build.
A bunch of people sit around thinking "Wouldn't rooftop gardens be nice? Hey, let's make it a law that you have to build them on all new towers!". And then they are surprised that the housing costs more and excludes lower-middle class.
Note that historic buildings converted into residential are exempt from any parking requirement. Downtown LA is teeming with historic buildings that are, if not actually then practically, vacant. Many of the commercial building conversions I'm aware of in downtown are becoming luxury lofts; a minority have been or will be converted into SRO or otherwise "non-luxury" housing.
But that's all anecdotes. If anyone has data on historic building conversions since, say, 2000, in downtown LA, or knows how I could get data like that, it would scratch an itch I've had for a while now.
[+] [-] RealityNow|8 years ago|reply
It's a pretty simple problem with a pretty simple solution. The problem is that local city councils have restricted the freedom to build through excessive zoning laws and regulations in order to increase housing prices for their own private investment benefit.
The solution is to relinquish them of this self-interested tyrant-like overbearing power and set these policies on the national level - basically how Japan does it. The more localized the power, the more self-interest is going to favor a minority of private individuals at the expense of society.
[+] [-] whiddershins|8 years ago|reply
I like the option of looking at how/why entrenched landowners control those communities. If the city councils were more broadly representative, that might solve the problem.
If anything, New York City is the poster child for too-centralized regulation. Why are the codes not far more locally governed? Who knows.
[+] [-] woodpanel|8 years ago|reply
Restrictions on generating housing stock seems to be by far the biggest driver of income inequality and gentrification ("regulation accounts for 85% of the increase of house price dispersion from 1980 to 2009"). Not just gentrification within cities but the polarization of groups across a country.
[1] http://idea.uab.es/jmarket/2016-2017/ANDRII%20PARKHOMENKO/Pa...
[+] [-] crdoconnor|8 years ago|reply
If it's a local problem with local solutions then why did it happen to more or less every major city in the developed world at the same time? Weird parking regulations are specific to Los Angeles.
It could be that wealth inequality is the primary cause of all of this but what do I know? I'm not the kind of person who would make a ton of cash if Los Angeles building regulations were slashed.
Ironically the architect actually indirectly points this proximate cause by pointing out that land prices have skyrocketed. He just didn't think to question why.
If land prices keep going up investors' incentive to treat apartments like bars of investment gold will keep going up too. If wealth inequality gets worse, more of that money will be stashed in land (luxury apartments), causing prices to rise. All of this will happen whether or not Los Angeles parking regulations are cut.
If California rolled back prop 13, on the other hand, that would help somewhat to de-goldify land and provide enough money to the state budget to build affordable housing the old fashioned way it has always been built: by the government.
[+] [-] utnick|8 years ago|reply
I think its more that most people just don't like change and want their neighborhoods to remain the same
If they really just wanted to increase their investments, up-zoning greatly increases the value of existing land in most cases.
[+] [-] AndyMcConachie|8 years ago|reply
[+] [-] adultSwim|8 years ago|reply
[+] [-] kevinburke|8 years ago|reply
[+] [-] ThePadawan|8 years ago|reply
Here in Zurich, there are the same sort of complaints about parking for new buildings going up, however there is now a different trend: Because rent for the parking space is typically charged separately from the apartment's rent, some parking space simply can't be rented out because residents don't have cars.
In case you speak German and are interested in this sort of stuff, the regulations are available at https://www.stadt-zuerich.ch/content/dam/stzh/portal/Deutsch... .
It also shows a table on page 3 that explains how you actually are allowed and required to build less and less parking spaces the closer you get to the city center, so much so that if you look at the maps on pages 6 to 7, you can see that that grey area allows <= 10% of the parking of the white area.
[+] [-] jaclaz|8 years ago|reply
But they are "logical" and at least here in cities, beyond and besides the building codes, having more parking space can be a resource, i.e. unused/excess parking places are commonly rented as there is anyway great scarcity of them for the people leaving in historical buildings that of course at the time they were built had no such requirements.
Of course it is a cost since, just like it is in the US, in the words of the architect:
>But wait, there’s more! That parking space for each unit either has to be at ground level (which is the most valuable real estate on the whole project), or it has to be above or below ground.
we cannot make them float in the air ;).
And of course requirements are not the same in city centres as they are in the outskirts, where areas are larger and building density allowed is much lower.
I don't fully agree with the added cost for parking to be the main reason for high costs of the building, I find the culprit to be more "the market" and also (within limits) the higher standards (and expectations of the customers).
I heve seen dramatic increasings in the costs of plumbing (not only the plumbing in itself, but also the kind of stuff that is installed, "design" basins, taps, showers, etc.), and electricity (here it is BOTH pricey switches, plugs, etc, and greatly increased number of them), besides safety related items.
As a side note, and it depends of course on specific zones, having an underground parking under the building may actually help with seismic compliance and with getting rid of radon, so some of it is not only "added cost", the real cost issues come when the size of the parking is big enough to "trigger" stricter fire safety provisions.
The EXACT same thing happened/is happening here, all the part starting from:
> All that was manageable to an extent before the crash of 2008.
is entirely accurate on this side of the pond, and has been described perfectly.
Before or around 2008 you couldn't find reliable people/contractors because they were 100% busy (while you could find a lot of only half-professionals), now you cannot find them simply because they became almost extincted.
[+] [-] gxs|8 years ago|reply
Once you're building at larger scales, the cost of materials between a luxury condo and a subluxury condo are different, but not astronomically so.
Developers will go to China, Mexico, etc. and source some really nice stuff very cheaply. Sure, there are exceptions, i.e., materials that are expensive no matter what, but once you figure out a way to use cheap labor, the actual building materials are cheap.
It's similar to luxury cars - the "luxury" part doesn't necessarily cost a lot more (but yes does cost a bit more) but it can be marked up a lot, lot more.
[+] [-] jaclaz|8 years ago|reply
This is also correct, but there is an additional twist to it.
Non-luxury may be not marketable (besides bringing less margin).
It is a curious market, I have seen more than one case of building companies that were put on their knees by the lack of buyers because they built "too basic" houses, believing that the relatively low price would have procured lots of willing buyers and this simply didn't happen, and they had to apply rebates over rebates, thus losing money in real terms to be able to sell them (if/when this actually happened).
[+] [-] pfranz|8 years ago|reply
[+] [-] panic|8 years ago|reply
Traditionally, contracting was the best paying "blue collar" job out there, and to a certain extent it still is. If you were smart, hardworking, but didn't go to college, you started hauling bricks on a construction site and then worked your way up to general contractor over the course of years. Lots of the best GCs out there did this. But, as less and less of super capable kids DON'T go to college, there are less super capable 18 yearolds hauling bricks and 10 years later, less super capable GCs.
As more and more kids are going to college, who will do these high-skill blue-collar jobs?
[+] [-] bb611|8 years ago|reply
He spent a bunch of years working on his skills and doing his own work, but now just subcontracts all the labor (mostly to immigrants), deals with legal/zoning issues, and keeps the client happy.
I suspect the old system (start at the bottom, amass skills & capital until you're on top) won't work anymore, because the capital arrangement strongly favors people with a money connection over skills. But time will tell.
[+] [-] Joe-Z|8 years ago|reply
[+] [-] TheAdamAndChe|8 years ago|reply
This is the direct result of outsourcing and illegal immigration gutting the middle class.
[+] [-] a3n|8 years ago|reply
The ones that can't get jobs in their college major.
[+] [-] Retric|8 years ago|reply
[+] [-] jeffbax|8 years ago|reply
> Here is a startling fact: in 2014 there were 142,417 housing starts in the city of Tokyo (population 13.3m, no empty land), more than the 83,657 housing permits issued in the state of California (population 38.7m), or the 137,010 houses started in the entire country of England (population 54.3m).
http://marginalrevolution.com/marginalrevolution/2016/08/lai...
http://marginalrevolution.com/marginalrevolution/2016/08/the...
[+] [-] wodenokoto|8 years ago|reply
[+] [-] dankohn1|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] jeffdavis|8 years ago|reply
A bunch of people sit around thinking "Wouldn't rooftop gardens be nice? Hey, let's make it a law that you have to build them on all new towers!". And then they are surprised that the housing costs more and excludes lower-middle class.
[+] [-] tomjakubowski|8 years ago|reply
Note that historic buildings converted into residential are exempt from any parking requirement. Downtown LA is teeming with historic buildings that are, if not actually then practically, vacant. Many of the commercial building conversions I'm aware of in downtown are becoming luxury lofts; a minority have been or will be converted into SRO or otherwise "non-luxury" housing.
But that's all anecdotes. If anyone has data on historic building conversions since, say, 2000, in downtown LA, or knows how I could get data like that, it would scratch an itch I've had for a while now.
[+] [-] givemefive|8 years ago|reply
they take care of parking with prefabricated 5 story garages.
[+] [-] thecopy|8 years ago|reply
[+] [-] mtanski|8 years ago|reply
[+] [-] pbreit|8 years ago|reply
[+] [-] mahyarm|8 years ago|reply
[+] [-] jrockway|8 years ago|reply
[+] [-] mcguire|8 years ago|reply
http://www.visualcapitalist.com/interactive-map-price-per-sq...
[+] [-] mtanski|8 years ago|reply