2024 Elections Thread

[ciao_yall]

We see the immigrants; we do not see the houses not built.

And the homeless.

At least in part, it's the same phenomenon.

By chance I came across this cutie:

Walmart House

At the time I read it, there was one only one comment, but it was prescient:

Check local zoning laws.

The point being that building housing is cheap. Getting land to build on is expensive. Canada and the United States are like Hong Kong? Really?

Land is cheap when it is far from job centers, services and public transportation.

One needs a lot more utilities to support housing than a Walmart. Police, fire, schools are also required nearby.

Let's see how this works out.

[dismalist]

We see the immigrants; we do not see the houses not built.

And the homeless.

At least in part, it's the same phenomenon.

By chance I came across this cutie:

Walmart House

At the time I read it, there was one only one comment, but it was prescient:

Check local zoning laws.

The point being that building housing is cheap. Getting land to build on is expensive. Canada and the United States are like Hong Kong? Really?

Land is cheap when it is far from job centers, services and public transportation.

One needs a lot more utilities to support housing than a Walmart. Police, fire, schools are also required nearby.

Let's see how this works out.

Land is cheap per person or per dwelling unit when you build up. What prevents that is zoning, decided locally in Canada and the US [and well, blocked locally in the UK]. The political coalition blocking looser zoning is existing homeowners who see their wealth increasing as the price of housing rises.

There is no hope that many or most small jurisdictions will liberalize zoning, but larger one's might. Even California is making moves in this direction. The reason being that not all voters in the State are homeowners.

By some accident of history, Houston, Texas has no zoning and has reasonable house prices.

The point not to be forgotten is that price increases are not just caused by extra demand from immigrants, or lest of all speculators, but by housing units which are not built. It's like a Sherlock Holmes story: The Curious Case of the Missing Houses.

[nebo113]

We see the immigrants; we do not see the houses not built.

And the homeless.

At least in part, it's the same phenomenon.

By chance I came across this cutie:

Walmart House

At the time I read it, there was one only one comment, but it was prescient:

Check local zoning laws.

The point being that building housing is cheap. Getting land to build on is expensive. Canada and the United States are like Hong Kong? Really?

Land is cheap when it is far from job centers, services and public transportation.

One needs a lot more utilities to support housing than a Walmart. Police, fire, schools are also required nearby.

Let's see how this works out.

Land is cheap per person or per dwelling unit when you build up. What prevents that is zoning, decided locally in Canada and the US [and well, blocked locally in the UK]. The political coalition blocking looser zoning is existing homeowners who see their wealth increasing as the price of housing rises.

There is no hope that many or most small jurisdictions will liberalize zoning, but larger one's might. Even California is making moves in this direction. The reason being that not all voters in the State are homeowners.

By some accident of history, Houston, Texas has no zoning and has reasonable house prices.

The point not to be forgotten is that price increases are not just caused by extra demand from immigrants, or lest of all speculators, but by housing units which are not built. It's like a Sherlock Holmes story: The Curious Case of the Missing Houses.

My very rural, very red area is weak on zoning so building here is relatively simple.  Of course, the best jobs are fast food. If you have a heart attack you're sent 100 miles to another state.  Need I continue? 

[dismalist]

We see the immigrants; we do not see the houses not built.

And the homeless.

At least in part, it's the same phenomenon.

By chance I came across this cutie:

Walmart House

At the time I read it, there was one only one comment, but it was prescient:

Check local zoning laws.

The point being that building housing is cheap. Getting land to build on is expensive. Canada and the United States are like Hong Kong? Really?

Land is cheap when it is far from job centers, services and public transportation.

One needs a lot more utilities to support housing than a Walmart. Police, fire, schools are also required nearby.

Let's see how this works out.

Land is cheap per person or per dwelling unit when you build up. What prevents that is zoning, decided locally in Canada and the US [and well, blocked locally in the UK]. The political coalition blocking looser zoning is existing homeowners who see their wealth increasing as the price of housing rises.

There is no hope that many or most small jurisdictions will liberalize zoning, but larger one's might. Even California is making moves in this direction. The reason being that not all voters in the State are homeowners.

By some accident of history, Houston, Texas has no zoning and has reasonable house prices.

The point not to be forgotten is that price increases are not just caused by extra demand from immigrants, or lest of all speculators, but by housing units which are not built. It's like a Sherlock Holmes story: The Curious Case of the Missing Houses.

My very rural, very red area is weak on zoning so building here is relatively simple.  Of course, the best jobs are fast food. If you have a heart attack you're sent 100 miles to another state.  Need I continue?

Alas, that's confusing demand with supply! :-)

[quasihumanist]

I don't think it's just zoning.  I think wealth inequality is skewing the housing market in many high price areas.  (And human capital is wealth in the form of expected income you can borrow against.)

Let's say you own an acre of land.  You can build 10 single family houses on it, or you can build 100 units of apartments.  It will cost you around $35M to build the apartments, and around $3.5M to build the houses - about $350K per unit for either.  (I googled for estimates, assuming 1000 sq ft apartments and 3000 sq ft houses, and these are in the right ballpark.  Apartments cost a good deal more per square foot because of all the additional structural costs of building up.)

Let's say you can sell the apartments as condos for $500K.  Great - excluding the cost of land, you've made $15M on the construction.  However, let's say you are in an area with lots of well-off people willing to throw money at houses.  If there are 10 people willing to buy houses for $2M each, you'd make $16.5M building houses.  (And if you find one super-rich person willing to pay $18M for a mansion taking up the whole lot, you sell it to them.)

Moral of the calculation: given that land is limited, if there are enough rich people willing to pay a high enough premium to have fewer neighbors, they buy up all the land and not-rich people become homeless.  Zoning isn't necessary for this to happen (though it can contribute - everything contributes).

I think, in certain places, this accounts for a lot of the housing shortage.  The tech industry is a Dutch Disease.  (Housing is part of the non-tradable sector.)

The solution to this kind of inequality-exacerbated inflation is simple: tax the rich.  If you want to be direct about it, go Georgist and put a big tax on the value of land.

[dismalist]

It's zoning. Mercy, build up! It's cheap. Cheap, cheap.

What is wrong with everybody?

-Nobody likes supply and demand analysis in this, a market made for it. There is clearly active resistance. I don't ask why.

-A Sherlock Holmes story: The Curious Case of the Missing Houses is not welcomed by the critics.

-How about song?

Where have all the houses gone?
Long time passing.
Where have all the houses gone?
Long time ago.
Where have all the houses gone?
Occupied every one.
Oh when will they ever learn?
Oh when will they ever learn?

Where have all the new homes gone?
Long time passing
Where have all the new homes gone?
Long time ago
Where have all the new homes gone?
Outzoned every one
Oh, when will they ever learn?
Oh, when will they ever learn?


Build, baby, build, and watch those prices come down!

[kaysixteen]

quasihumanist, fellow alum of Dear Alma Mater, your analysis seems pretty solid, but:

1) are you going to be able to get rich folks to pay $2m for a house built on 1/10 of an acre of land?

2) are there not some ways to reduce the cost of building a high-rise building to build apts?

3) mightn't you be able to find some middle ground trade-off here, say 33 or 50 apts instead of 100?

[Parasaurolophus]

1) are you going to be able to get rich folks to pay $2m for a house built on 1/10 of an acre of land?

Here, yes. That's just the price of a normal house in the city, and about how much land you get. If you have a family, it's pretty much the only thing you can get that will give you enough room (renting something large enough will basically cost as much as your mortgage, or more). But at that price point, it's not the rich people buying them. It's ordinary(ish) schmucks with help for the downpayment, and good-but-not-outrageous jobs. They do it with the downpayment help, a 25-year mortgage (the maximum you can get), and some sort of secondary suite they rent out, which brings the mortgage down.

The rich people pay a lot more, and get a lot more (e.g. ocean views and 4k+ square feet).

[kaysixteen]

So exactly what about your community is so great that someone, esp a rich someone, would pay this much for so little, in order to live there?  And given how much land Canada has, why aren't more acres available for building homes?

[jimbogumbo]

I (sort of) laughed. Maybe it really happened? https://www.threads.net/@michael.chabon/post/DBXBiYVyPM3?xmt=AQGzsnqhDcbJ9C5K0puFAcpD2GnS0Hup9iz5JEHlS0aLbg

[Parasaurolophus]

So exactly what about your community is so great that someone, esp a rich someone, would pay this much for so little, in order to live there?  And given how much land Canada has, why aren't more acres available for building homes?

Nothing. It's just the only way you'll get more than two bedrooms at 3000-4000 per month.

Space is constrained here because there's ocean to the west, the border to the south, and impassable mountains to the north.

[dismalist]

So exactly what about your community is so great that someone, esp a rich someone, would pay this much for so little, in order to live there?  And given how much land Canada has, why aren't more acres available for building homes?

Nothing. It's just the only way you'll get more than two bedrooms at 3000-4000 per month.

Space is constrained here because there's ocean to the west, the border to the south, and impassable mountains to the north.

But one can build up! That's actually cheap.

There is something called a Vancouver Plan. There's too much verbiage in there for my taste, but it has some very pretty and informative maps and pictures starting about page 56. The thrust is away from single-family homes, which is good. My guess is that the planners are still too restrictive about height, but they may be OK. Also missing is information about the surroundings of Vancouver proper, a faraway place about which I know little.

The sky's the limit!

[kaysixteen]

And what is to the east?

[dismalist]

Here's another, general, thing in zoning that wastes space, minimum parking mandates:  Parking, NYT, ungated.

Text is discombobulated at beginning and other places. Just scroll down. Fun read.

[secundem_artem]

And what is to the east?

Quebec and more oceans.

About 15 years ago, I was asked to do some consulting for a program at UBC in Vancouver.  The dean at the time had been brought up from somewhere in the American deep south.  Even on a dean's salary, all he could afford 15 years ago was a 1 BR condo apartment.  One of his complaints was that the only faculty he could seem to hire had to be coming up from San Francisco or maybe NYC.  Even a decade back, housing in major Canadian cities was unaffordable.  And as I understand it, much high rise new condo construction is being bought up by speculators, meaning even purchasing a high rise unit is out of reach for many.

My childhood home was a pretty average place in small town south-western Ontario.  My dad sold it when they moved to an apartment for something like $135,000.  That was about 16-18 years ago.  One of the neighbor's kids bought it.  Did some renovations.  Recently listed for just under a million.