You can't just demand more housing. You have to make people want it. This is why I'm strongly in favor of taxing land by area.
A ten story condo with 100 units takes up as much land as 8 houses with yards. By reducing everyone's taxes then making up the difference via a land tax, you effectively lower the taxes on people using high density land use homes. You make it a more desirable lifestyle.
I think there should be a national effort to "spread out" the economy and fight the trend towards centralization in a few areas. If you build more housing in CA, even more people will move there and the overcrowding will become even worse. There should be incentives for companies to move away from places like SV and NY.
More acceptance of remote work would help too but I wouldn't hold my breath for it.
This is an instance of Jevon's paradox. The more housing you build to meet housing need of people then even more people will come in creating even larger demand for housing.
I'm really curious about the pros and cons here. Neither way seems obviously better than the other. Why is concentration worse than distribution? Why is distribution better?
> There should be incentives for companies to move away from places like SV and NY.
There are already tons of incentives and tax breaks like this for companies. Just for a recent example, see Amazon HQ2. Companies also have the added incentive of lower labor costs. It's clearly not enough yet.
Cities are popular because they are relatively efficient. You can build more towns and suburbs but they will be underserved because of the many pipelines a state has to manage that cities will receive priority for — road maintenance, DMVs, shipping hubs. If you live in a town and need any of these, you might have to travel a long way just to get your needs met.
Tech companies and rich investors don't take much space and you would be hard pressed to find homeowners who would go against their interest and prevent these potential homebuyers to move into the area.
It's frustrating because, as propaganda, it's been extremely effective.
If you're an opponent of increased housing supply in California, you can roll out that talking point whenever threatened. It's tested, emotionally resonant, and most people don't have the time to be explained why it's wrong.
Supporters of increased housing in CA need to come up with their own powerful rhetoric, rather than whining about the fact that their opponents' rhetoric works.
(Whining further that bad rhetoric shouldn't be allowed is even worse--we live in a democracy; you have to influence people; rhetoric matters.)
Because the cost to create a unit makes them high end from the start. You have to add fire suppression systems, elevators, seismic reinforced construction and pay for the land. NPR had a segment on it, listing the costs to build a modern day high rise unit and it there is no way to build it for low-income housing and make a profit. Even if given the land, at most it is break-even.
Low income would have to rely on housing that wasn't new. Kinda like cars, it wouldn't make sense to have car manufacturers to try to create a sub $10k car when you require air bags, backup cameras, tire pressure monitors etc.
The notion that new construction being 'high-end' won't improve the market on the low-end is erroneous in markets where the spread of rent budgets of people forms smooth, continuous gradient. But the Bay Area is not such a market -- nor are places where significant cash infusions such as very high pay at the high-end or subsidies like military housing allowances to people of middle incomes will distort the field upwards. Then there's Prop 13, which disincentivizes the sale of legacy homes, removing many residents and homes in the middle of the income/rent spread from the liquidity of the market.
Developers want to build units that are 'high-end' because it's the best way to recoup their costs. Urban construction is expensive and many projects are made possible by a combination of loans, private equity funding, and government subsidies. The increase of supply in high-end apartments creates competitive pressure on older units, places with less amenities, places with dated design, and places in inferior locations. Since housing sorting resembles an auction, people with the highest rent budgets have the most options. Landlords of less ideal places will see some tenants filter out and replaced. Eventually, the replacements stop coming, because all people of higher rent budgets have already moved to more desirable places. Instead of letting apartments sit empty, the landlord might lower the rent while still staying within the profitability threshold.
This doesn't work every time. If people of high rent budgets never stop coming, they never have to lower prices: there's an undersupply on the high-end too. This is clearly the case in the Bay and other desirable areas of California.
A lot of today’s housing stock was originally built as higher-end units, and moved down the chain as it got older. The idea is that when higher-end units are built now, the wealthy vacate some of their current units, which then have downward price pressure and become middle-range units, and so on.
And it's self fulfilling too by those who limit housing construction. If only 10 units are built but there are 1000 units needed, those 10 units are going to be sold to the 1% wealthiest. If, seeing this, voters to restrict construction even more because the "wrong type" of person is buying, and only 1 unit is built, only the wealthiest buyer gets housing and it becomes even more "luxury."
The only way to start serving the needs of "normal" people with new construction is to issue permits for that full 1000, or maybe even better, try to get developers to build 1200 or 1500 and then compete for buyers, rather than having buyers compete for limited production.
Any new modern apartment is considered luxury. Its actually impossible to build non luxury apartments in Sf. It seems what people want is for builders to actively destroy the apartment after they build it so that it will be rented at a lower price.
Serving the customers who can pay the most first is pretty much what happens in almost every industry but for some magical reason housing is "special". It's probably just that they have let their "customers" wait so much there is now a massive backlog of hundreds of thousands of them and in the current political climate it will take decade to serve all of them.
The whole dogpatch to India Basin and hunters point areas could be upzoned massively to accommodate a few hundred thousand new residents very easily. Lay down a good street grid, have a plan to eventually put the third street light rail underground or overhead to give massive transit capacity and have a complete free for all of new high rise (20+ stories) apartments there. You could do this without touching any zoning anywhere else in the city. Yet we can’t even do this. Similar “win-win” options exist all over the Bay Area that don’t get done, and you begin to realize the real reason is preserving property values. All new housing is bad. Thus there is no negotiation with existing vested interests. They’ll run the city into the ground until the state forces their hand in some way.
They should tear down the Fed Mint building behind that Safeway and turn it into housing. I don't even believe that branch does anything other than print proofs. A waste of space, but it's not happening during this presidency for sure.
This is true, but I also think the answer is addressing the problem of seemingly all opportunity being concentrated in less than 10 cities. Cities face inevitable scaling limits.
There has always been regional inequality of opportunity, but never to this degree.
A great way to see the problem is to look at where the top ten most popular early personal computers came from. You will see places like Philadelphia (C64), Miami/Boca Raton (IBM), Dallas (TI), and Albuquerque (Altair). These days it would be almost all the Bay Area and maybe one from Seattle, NYC, Boston, or LA metro.
Strong disagree.
Urban aggregation is a global phenomenon in modern times, literally every country is seeing a rise of “mega cities”. It’s because workers are choosing to move to these cities as these cities have more opportunities for workers due to efficiencies of scale. The most dynamic economies are encouraging moving to mega cities (ex: China). Cities might have “scaling limits” but there is no evidence that any city in the world has approached these limits.
The scaling limits being reached in CA are completely self imposed ones that have tested to the limit just how far it is possible to sprawl a city. All the way into the central valley it turns out.
> There has always been regional inequality of opportunity, but never to this degree.
This has been happening since people first settled in permanent locations. The trend isn't going to stop and the only way to reverse it would be to interfere pretty strongly with the market. What are you going to do, set up a central government agency that tells citizens where they can and can't live? That says how many "computer companies" are allowed to exist in a city and ban anyone from starting a new one? It's a fair observation but it's a pointless one that distracts from reality and actual solutions.
How does ownership of apartments work in California?
In the UK, owning a flat is decidedly inferior to owning a house. In large blocks you will almost always have a leasehold, which almost always means being subject to a whole host of onerous conditions from the actual building's owner.
Share of freehold arrangements exist in smaller properties like old converted houses. But that only increases density slightly, and these sorts of places aren't really built any more; new developments are usually huge tower blocks or little houses.
I'm looking at buying a place soon and will be going for a small freehold house simply because that's the only way to actually own property in the UK as far as I can tell. I've wasted far too much time on attempting to negotiate sane leasehold conditions.
the most common way is to own a condominium. You own your apartment and a share of the common spaces / common infrastructure. The common stuff is administered by a homeowners association (HOA) that you as an owner are a part of. you typically then have a mortgage for the loan against the apartment and HOA dues to cover things like maintenance and insurance.
And what will be the source of the water for additional California residents to subsist on? We just went through a 7-year drought, and they seem to be becoming more frequent and longer; never mind that climate change is making it all worse, as the snow-pack gets smaller and melts quicker.
We can cut agriculture and build more dams somewhere to buffer more snow melt, but these are politically difficult to pull off, and of course have other negative effects on various constituencies (including migrant workers, like the ones who used to pick the crops where Silicon Valley now sits).
Not too long ago during the Camp/Paradise fires, just about everyone in northern CA was breathing a toxic cloud of burnt drywall, cars, chemicals, etc. for over a week. Think of the millions of gallons of water wasted, flame retardants dumped, and carbon emissions created. Californians need to live in denser construction near jobs. No more sprawling, low-level construction where fires can easily spread and jump from one building to the next.
California has been growing at a rate slower than other states. When it comes to domestic migration, it exports more people to other states than it accepts.
When it comes to international migration, net migration is less than births minus deaths, and that's with a low birth rate.
In the early 1960s, California had a population of 15 million and built 250k-300k homes per year. Currently California has a population of 40 million and build 80k homes per year.
After the next census, California is expected to lose representation in the House because most other states are growing faster than California.
California has had a major major change in population and building styles since 1980, but policy decisions are still made under the assumption that we are living with the 1960s numbers for building and population.
Have there been any studies examining the impact on the market of banning career landlords and REITs? What happens if you restrict residential housing to being owned by a single person who cannot own anything else in that area, rather than letting capital have the run of the place and treating homes as an investment plaything?
Short run, rents go up and purchas prices go down, fairly obviously since you restrict purchase demand and rental supply by excluding a big market segment from both of those roles.
Then what is the answer? People want to live in NYC, LA and the Bay Area. They need homes in the places they want to live, and if they don't get them they won't stay put: they'll move to sprawl in New Jersey, Orange County and Livermore. And those places will suck, and we'll all pay the costs in infrastructure stress.
Build housing where the jobs are. That absolutely is the answer. Any other solution is isomorphic to "put the desirable jobs somewhere else", a puzzle the whole world[1] is trying to solve, and failing. Housing is something we know how to do.
NYC offers a great deal -- it squeezes 5x the Bay Area housing stock into a tiny land area by building upwards. If anything, NYC doesnt do enough. Parts where the zoning allows 12stories (e.g., Brooklyn 4th Ave) should ideally be 24 stories or more. It is a heck of a lot more efficient to stack upwards rather than stack outwards. For those who want more space, you can go outwards, but for those who value shorter commutes, you can achieve that.
NYC is the largest metro ever, its size is not even comparable to bay area and still keeping its rent generally lower than bay area, even living in Manhattan is cheaper than south bay. I don't see how this can be a counterexample?
Absolutely agree! In my opinion the only way is to make smaller cities attractive! No matter how high or wide you build. People want to move to cities. Except they see a chance in smaller viliages. So we need more / attractive jobs in villages and better infrastructure. Including theaters, cinemas, shops, kindergartens etc etc.
California has a ‘too many people problem’. Housing is less critical than transportation, infrastructure, fire safety, jobs for all demographic groups (as opposed to tech jobs for well born young white men), and so on. Building housing is like giving candy to calm a child’s tantrum.
Since you're race baiting, I'd like to point out that there are plenty of us white guys out here who are not from privileged backgrounds and who have worked very hard to get to where they are. Please stop with the prejudice, for all people.
[+] [-] mabbo|7 years ago|reply
A ten story condo with 100 units takes up as much land as 8 houses with yards. By reducing everyone's taxes then making up the difference via a land tax, you effectively lower the taxes on people using high density land use homes. You make it a more desirable lifestyle.
Demand from voters leads to changes in law.
[+] [-] maxxxxx|7 years ago|reply
More acceptance of remote work would help too but I wouldn't hold my breath for it.
[+] [-] snidane|7 years ago|reply
https://en.m.wikipedia.org/wiki/Jevons_paradox
[+] [-] sanderjd|7 years ago|reply
[+] [-] jogjayr|7 years ago|reply
There are already tons of incentives and tax breaks like this for companies. Just for a recent example, see Amazon HQ2. Companies also have the added incentive of lower labor costs. It's clearly not enough yet.
[+] [-] rileymat2|7 years ago|reply
[+] [-] ironmagma|7 years ago|reply
[+] [-] imtringued|7 years ago|reply
[+] [-] epmatsw|7 years ago|reply
This is such a frustrating perspective.
[+] [-] maehwasu|7 years ago|reply
If you're an opponent of increased housing supply in California, you can roll out that talking point whenever threatened. It's tested, emotionally resonant, and most people don't have the time to be explained why it's wrong.
Supporters of increased housing in CA need to come up with their own powerful rhetoric, rather than whining about the fact that their opponents' rhetoric works.
(Whining further that bad rhetoric shouldn't be allowed is even worse--we live in a democracy; you have to influence people; rhetoric matters.)
[+] [-] adrr|7 years ago|reply
Low income would have to rely on housing that wasn't new. Kinda like cars, it wouldn't make sense to have car manufacturers to try to create a sub $10k car when you require air bags, backup cameras, tire pressure monitors etc.
[+] [-] niftich|7 years ago|reply
Developers want to build units that are 'high-end' because it's the best way to recoup their costs. Urban construction is expensive and many projects are made possible by a combination of loans, private equity funding, and government subsidies. The increase of supply in high-end apartments creates competitive pressure on older units, places with less amenities, places with dated design, and places in inferior locations. Since housing sorting resembles an auction, people with the highest rent budgets have the most options. Landlords of less ideal places will see some tenants filter out and replaced. Eventually, the replacements stop coming, because all people of higher rent budgets have already moved to more desirable places. Instead of letting apartments sit empty, the landlord might lower the rent while still staying within the profitability threshold.
This doesn't work every time. If people of high rent budgets never stop coming, they never have to lower prices: there's an undersupply on the high-end too. This is clearly the case in the Bay and other desirable areas of California.
[+] [-] trevyn|7 years ago|reply
[+] [-] epistasis|7 years ago|reply
The only way to start serving the needs of "normal" people with new construction is to issue permits for that full 1000, or maybe even better, try to get developers to build 1200 or 1500 and then compete for buyers, rather than having buyers compete for limited production.
[+] [-] friedman23|7 years ago|reply
[+] [-] imtringued|7 years ago|reply
[+] [-] temp99990|7 years ago|reply
[+] [-] erentz|7 years ago|reply
[+] [-] kradroy|7 years ago|reply
[+] [-] api|7 years ago|reply
There has always been regional inequality of opportunity, but never to this degree.
A great way to see the problem is to look at where the top ten most popular early personal computers came from. You will see places like Philadelphia (C64), Miami/Boca Raton (IBM), Dallas (TI), and Albuquerque (Altair). These days it would be almost all the Bay Area and maybe one from Seattle, NYC, Boston, or LA metro.
[+] [-] 0xB31B1B|7 years ago|reply
[+] [-] erentz|7 years ago|reply
The scaling limits being reached in CA are completely self imposed ones that have tested to the limit just how far it is possible to sprawl a city. All the way into the central valley it turns out.
> There has always been regional inequality of opportunity, but never to this degree.
This has been happening since people first settled in permanent locations. The trend isn't going to stop and the only way to reverse it would be to interfere pretty strongly with the market. What are you going to do, set up a central government agency that tells citizens where they can and can't live? That says how many "computer companies" are allowed to exist in a city and ban anyone from starting a new one? It's a fair observation but it's a pointless one that distracts from reality and actual solutions.
[+] [-] esotericn|7 years ago|reply
In the UK, owning a flat is decidedly inferior to owning a house. In large blocks you will almost always have a leasehold, which almost always means being subject to a whole host of onerous conditions from the actual building's owner.
Share of freehold arrangements exist in smaller properties like old converted houses. But that only increases density slightly, and these sorts of places aren't really built any more; new developments are usually huge tower blocks or little houses.
I'm looking at buying a place soon and will be going for a small freehold house simply because that's the only way to actually own property in the UK as far as I can tell. I've wasted far too much time on attempting to negotiate sane leasehold conditions.
[+] [-] matchagaucho|7 years ago|reply
Condos are owned but must comply with homeowners association (HOA) rules on upkeep and maintenance.
Apartments are rented and maintained by Landlord.
[+] [-] aaronblohowiak|7 years ago|reply
[+] [-] drfuchs|7 years ago|reply
We can cut agriculture and build more dams somewhere to buffer more snow melt, but these are politically difficult to pull off, and of course have other negative effects on various constituencies (including migrant workers, like the ones who used to pick the crops where Silicon Valley now sits).
[+] [-] 80mph|7 years ago|reply
[+] [-] orkon|7 years ago|reply
[1] https://en.wikipedia.org/wiki/Induced_demand
[+] [-] epistasis|7 years ago|reply
California has been growing at a rate slower than other states. When it comes to domestic migration, it exports more people to other states than it accepts.
When it comes to international migration, net migration is less than births minus deaths, and that's with a low birth rate.
In the early 1960s, California had a population of 15 million and built 250k-300k homes per year. Currently California has a population of 40 million and build 80k homes per year.
After the next census, California is expected to lose representation in the House because most other states are growing faster than California.
California has had a major major change in population and building styles since 1980, but policy decisions are still made under the assumption that we are living with the 1960s numbers for building and population.
[+] [-] ahelwer|7 years ago|reply
[+] [-] dahfizz|7 years ago|reply
[+] [-] conanbatt|7 years ago|reply
[+] [-] dragonwriter|7 years ago|reply
[+] [-] thatfrenchguy|7 years ago|reply
[+] [-] MagicPropmaker|7 years ago|reply
[+] [-] robertAngst|7 years ago|reply
>person wants more government
I've been confused about this perspective, can you break down the thought train you have?
[+] [-] honkycat|7 years ago|reply
[deleted]
[+] [-] dang|7 years ago|reply
https://news.ycombinator.com/newsguidelines.html
[+] [-] walshemj|7 years ago|reply
[+] [-] AbdulMohammad|7 years ago|reply
[+] [-] ajross|7 years ago|reply
Build housing where the jobs are. That absolutely is the answer. Any other solution is isomorphic to "put the desirable jobs somewhere else", a puzzle the whole world[1] is trying to solve, and failing. Housing is something we know how to do.
[1] Except for the handful of desirable cities.
[+] [-] weeksie|7 years ago|reply
[+] [-] TuringNYC|7 years ago|reply
[+] [-] conanbatt|7 years ago|reply
Clearly NYC housing structure services 10x what SF does.
[+] [-] summerlight|7 years ago|reply
[+] [-] Bombthecat|7 years ago|reply
[+] [-] DataWorker|7 years ago|reply
[+] [-] futureastronaut|7 years ago|reply
[+] [-] mabbo|7 years ago|reply
You're complaining that demand is too high as a reason to not increase supply.
[+] [-] imtringued|7 years ago|reply