Legalize housing. It is both a good slogan and also a good idea. The struggle is real, ongoing and ever-present. Do not sleep on it. The Housing Theory of Everything applies broadly, even to the issue of AI. If we built enough housing that life vastly improved and people could envision a positive future, they would be far more inclined to think well about AI.
Counterargument to the step by step upzoning idea: it raises the total amount of destruction/construction you need for the same housing stock, focuses it on areas that are already dense (since the area getting built up to level N is already at level N-1), which maximizes the number of people inconvenienced by the construction noise. It also requires more jobs, but there's a labor shortage in construction (which could be solved if we also solved immigration, but that one seems even harder than housing)
> (which could be solved if we also solved immigration, but that one seems even harder than housing)
So you get one generation of maybe more construction workers per capita than the US population in exchange for endless generations of more people consuming more housing and all kinds of other negative political externalities. This is not a "solution".
1) The strong 'migr' appears only once in this entire article, in reference to Japan. Extraordinarily high immigration is clearly the dominant factor behind recent spikes in Anglosphere housing prices, especially in Canada/Britain/Australia (the US having both much less immigration and more destination centers for it). If you really believe in the Housing Theory of Everything, surely it warrants a mention?
2) Look carefully at the graph of housing prices for five American cities, and notice Minneapolis collapsing in 2020. A significant chunk of Minneapolis was on fire in 2020, and it was the epicenter of the Floyd effect, with one of the largest crime increases in the country. Its status reflects falling demand, not just increased supply.
3) There's a consistent pattern in the US of the Republicans being far better about housing policy than the Democrats. I don't think this is changeable within existing political coalitions; the Republican voter and especially activist base is far more pro-market than the Democratic one generally, and Republicans benefit electorally from higher homeownership.
If you want an ungated article on manufacturing homes, the consistently fantastic Construction Physics substack had a two-part series on the rise and fall of manufactured homes, as well as a third article that was a response to the Yglesias article:
"The hope is that once you have one line, getting more lines becomes far more attractive and feels more real. It is very American to start its high speed rail with a line that gives up on getting the right to go to actual central LA and then connects it to Vegas. I suppose one must start somewhere"
Please let's start somewhere else! The line is currently estimated to cost 12B. Cost over-runs are the rule, so it will probably cost a least 15B (it will probably be more). The train will probably be slower than expected. The capital maintenance costs will be high, and it's an area that's prone to earthquakes and other fun disasters (meaning abnormally high likelihood of spending 15B dollars and then a massive fire shuts it down for anywhere between a few weeks to a few months, or a completely expected earthquake causes it to be down or slowed to normal rail speed for months or years).
Currently you can fly LA to LV for ~52-150 dollars round trip.
Just paying capital maintenance costs, servicing debt and labor costs will mean the tickets (today) would have to ~150 dollars minimum, before you turn a profit. If demand shifts? Your 15B line is outdated and you can maybe reuse some portion of the tracks. When one of the startups working on commuter EV planes is successful? 15B line is outdated.
Building high-speed intercity rail is the finest 20th century answer to a 21st century problem. If we simply MUST do something before EV commuter planes come online, and we're talking 5B-10B, do a bus rapid transit only highway. The speeds will be lower, but it will connect into way more locations, cost less and can be reused for other projects/systems gently over time as technology advances.
The key question is: Why is a private enterprise doing something that will be a profitless boondoggle? I think the answer here is: We've subsidized it so much, and the specific terms mean they will get a cut off the top even when it fails, such that they are perfectly happy to privatize the profit and publicize the risk.
Quite right. If we were to allow private construction and it was worthwhile (read: profitable), then it would already be happening. So, it's either not profitable, or we don't allow what would be needed to make it profitable.
I see absolutely no good reason to spend billions of dollars making transportation options that will rarely be used and never worthwhile compared to existing options.
It's not like trains are perfectly green, either. Carbon is carbon, and the electricity needed to move those trains was likely created with significant amounts of carbon.
EV commuter planes will likely never make sense: by the time battery density is good enough it will have been leapfrogged by SAF or hydrogen. None of the current startups are going anywhere. Happy to expand on that if you’re curious or looking to short something
I mostly agree with you, if they do exist it will probably be for a limited period of time on short (regular routes) or because ultracaps or dome other tech increases density more than expected. Regardless, the answer is not trains. It is some mix of repurposable tech like BRT, planes (possibly using alternative fuel systems) and "future tech".
I have to agree that high speed rail in California won’t be Japan high speed rail or whatever these people are thinking of. Japan's has an effective network to get you to the station and no security. In California have they committed to not having security for it?
Bus Rapid Transit. The exact definition varies based on implementation, but the basic idea is make a railroad, but use buses and concrete vs trains and rails. It's wildly cheaper, but top end speed isn't as fast as highspeed rail, and you can always turn the BRT lanes into extra lanes/expressways or HOV stuff if your needs change.
There are a lot of tradeoffs, but if you look at the costs of trains in America (incredibly high, light rail has passed 200m+ PER MILE avg cost) and the actual speeds delivered (often a lot lower than advertised in the "please fund us" docs, sometimes slower than normal trains) I don't see how you can support trains unless you're just really into the idea of trains. Caveat: NY and maybe a handful of other lines (not cities, individual lines) can have strong arguments made b/c of density, ridership and other costs. This is not one of those times.
The ongoing YIMBY delusion of affordable housing while advocating for virtually unlimited immigration which will effortlessly consume housing supply faster than anyone could ever conceivably increase it. No, really. Housing can literally never be affordable in e.g. NYC because there will always be more people to come along and drive the price back up once supply becomes available. Having a whole bunch of new apartments in the dozen largest cities in the US will just make it even easier for the federal government to allow more migrants to come in because there's more capacity for them and it's entirely self-defeating.
And no, US cities are not high trust places. The idea that you have to avoid inner areas of your biggest cities because of all the crime and anti-social behavior is unheard of in much of europe and east asia. This is another YIMBY delusion - they almost always support "diversity" and "anti-racism" while decrying urban sprawl/suburbanism. But they're not smart enough to put 2 and 2 together and realize that all this "diversity" is a large part of why so many people left the inner cities in the first place. They instead screech about "white supremacy" when people don't want to raise their families around violent criminals and drug dealers. And of course, the answer to all of this is "investment in education", reflecting their borderline religious beliefs about the impact of education and education spending that are completely divorced from any empirical evidence.
I read this article to try and fall asleep. I nearly succeeded several times. But the ending…
Yes Let’s kids roam
You first
It’s not up to you though
And creating a world where no one calls the cops is what I’m interested in
How, zvi? Not just as a pretty thought experiment
It’s as pointless as the flower in the end of the gun, disarmament, and “end capitalism now” if you don’t actually say how and instead only “if we all just choose to”
Two things struck.me here. One is, I think the excitement for circumventing local control is a little too naive. Maybe it's necessary....
[EDIT: INn general given how tyrannical the HOA as an organization is, limiting their power is probably a good thing, on balance.]
But the urge to centralize, to have everything one -size-fits-all, causes a lot of those regulatory problems as well. If a state gets to circumvent any local say.... Well, they get to take away a community's park, or landmark, or street name, without the community's say-so, because they can, whether the community wants it or not, especially if it can be claimed to benefit some other, needier community or groul. Maybe they can already do it, but it doesn't sit right.
Also, re: NIMBY in the wild. Separate from the policy issue, the writer of that thread is so smug. If this Allison person were on a city board planning new construction, I wouldn't trust her to even give my issues a fair hearing. And frankly the NIMBY, again, separate from the correct policy decision here, isn't wrong about the renter's attitude or lack of investment in the neighborhood.
I love Minneapolis but that steep price drop in, uh, mid-to-late 2020 is presumably about demand not supply. Especially if the data excludes the suburbs.
Apologies for something only tangentially related, but there at least is an AI link in the post...
Can anyone recommend a good book on AI? Specifically, I'm looking for a book that focuses on societal, cultural, economic, etc. implications. Not a technical book. I'm finding the topic hard to navigate given how rapidly everything seems to change, and curious if anyone's aware of a decent book-length treatment.
RE: Solving homelessness through increased housing supply.
We really need to separate out different kinds of homelessness. I think we can look at three major categories.
1) Those that have incomes and are pretty stable, but can't afford housing in their desired area. These people will tend to live with family or friends, or in illegal or semi-legal rental situations where a sane society would not think of them as homeless. In previous generations they would have been considered more normal, and outside the US living with generations of family is not that weird as to conflate them with the other categories of homeless. Bringing back boarding houses would help significantly with this kind of situation as well.
These people's problems would definitely be helped by increasing supply, and likely solved by significantly increasing supply.
2) Those who had housing, but ran into a specific problem. Often this would be loss of a job, divorce, house fire, or similar time-limited situation. These people also often live with family or friends, but on a more temporary basis. Most of the time these people stabilize in a few weeks or months and are back into more normal housing.
These people would be helped by cheaper housing, but were not homeless for lack of it. Even significantly cheaper housing (50% less) would not fix all of these issues, and realistically cheaper housing (10-20% less) may make no difference at all for them in terms of whether they are homeless.
3) The people who we might refer to as chronically homeless. These are the most visible kinds, who often live on the street and homeless encampments. They're the ones we usually hear about dropping used needles and feces on city streets.
These people would not be helped by cheaper housing. Much of the time they would only be minimally or temporarily helped by *free* housing. They often lack the ability to literally send money to the electric company, even if they had the money to spend. They would likely make extremely poor decisions if given control of the housing (i.e. sell it). They also tend to get kicked out of homeless shelters and city-provided housing for being really bad neighbors and refusing to give up the drugs and destructive life decisions.
If we're talking about solving the homeless crisis, we need to grapple with the different forms of it. It would be helpful to know who falls into which category, and what their relative numbers are. As I said, I don't think a sane society would call #1 homeless, and we should open up alternative living arrangements (legally) or just make them more normal again. These are also the people who would most benefit from generally cheaper housing. #2 would be helped more by emergency shelters of various kinds, and assistance with solutions on how to fix their immediate problems. Cheaper housing would make this easier, but again, wouldn't solve it. #3 is the central case of what people mean when they talk about the homeless, and would not really be helped at all by anything in this article. I'm definitely in favor of your suggestions, but we should not kid ourselves that they would solve this particular problem.
I have seen this described as the "have nots, can nots, and will nots". Each has different needs and responds differently to different policy interventions and incentives.
Have nots — people who are just poor and can't afford housing. Often used to be housed by then fell behind on rent. Usually own a car.
Can nots — people with serious mental illness or other disabilities that prevent them from participating in society or holding their life together.
Will nots — people who just prefer the independence and freedom gained from not participating in capitalist society. "hobos".
“A per-year tax of 11.8% of value is quite a lot. Presumably the way the math works is that the value of the land gets reduced by the cost of future taxes, which should mean it decline by more than half, while the additional value of built property goes up as it is now taxed less than before. It seems good to turn over the land quickly, so perhaps charging this much, well past the revenue-maximization point, isn’t crazy?”
This shows confusion over what makes a tax decline in revenue past a certain point. Taxes usually reduce the quantity of what is being taxed. For example, a 90% income tax would make much less people want to work for income, or at least over the table. When it comes to land, there’s not a way for the quantity to decline and therefor revenue just keeps on increasing at higher rates.
Of course it is optimal to tax some percentage of land rent rather than the sale price of the land because taxing land rent has revenue scale linearly with the percentage taxed rather than having declining marginal revenue.
What I am saying is that the stream of taxes on the land reduces its value, and makes people unwilling to own and build,which reduces revenue. I get that quantity is fixed.
It does reduce the sale value of the land, but sale value of the land does not decrease faster than the tax increases.
I’m not sure why it would make people unwilling to build. If people don’t want to own the land, they will try to sell it. Price will decrease until the market clears. At no point do the returns to building change (outside of the reduced taxes on structure which incentivizes more building).
I think you will find the value of the land can indeed drop faster than the tax increases. At the limit people will simply abandon the land as owning it and building upon it is not worth the taxes. Before you get to that point people will only wish to own it if the taxes are low enough to make the owning of it worth while, and whether or not it is worth while depends on whether the costs + tax < benefits.
In other words, supply stays constant but the value of the land drops such that the 11.8% of value equals whatever people are willing to put up with in taxes. That can very easily be less than current revenue, all the way to 0 revenue at the extreme. Tax land ownership enough and people will stop wanting to own land.
I don't understand the economic circumstances in which you would abandon the land with a tax raised on market value. If people are unable to sell the land with current taxes, the price would go down close to zero and the tax would also go to zero. If your critique is that the government will evaluate property prices wrong, that's fine. I think that's a good critique and is why people don't tend to support LVTs above 80% of land rent.
Let's formalize the math. Assume MP0 is the market price with no tax and MP1 is the market price after tax. Both are set by discounted future cash flows.
MP1 = MP0 - Present value of the tax
MP1 = MP0 - taxrate MP1 / discount rate
MP1 + t*MP1/r = MP0
MP1(1+t/r) = MP0
MP1 = MP0 / (1 + t/r)
As t approaches infinity, MP1 approaches 0 but for any finite positive t and r, MP1 will be some positive number.
You need to consider the actual process of selling the property and thus establishing the market value, as your math abstracts away most of the process. How this transaction happens is a huge part of the question, as you seem to understand. If the government bases market value on the last sale price you can be stuck if the current price is effectively zero, which is to say, no one wants to buy it. It becomes cheaper to walk away from the land than go through the transaction costs of selling it for next to nothing.
But of course, what if you do sell the land for a dollar? Well, firstly the government revenue is going to drop like a stone, which is pretty much what the original point was: the value of the land can drop faster than the tax increases, reduced revenue on fixed amounts of land despite increased tax rates.
Secondly though, does anyone believe that the government will accept drastically reduced revenues? The expected change in future taxes will depress the market value further, because people know (or will very quickly realize) that if the local government needs funds it will get them from somewhere. So again, finding buyers can be very difficult, and it can quickly get to the point where walking away from the property is the least cost option for want of someone to take the opposite side of the transaction.
People abandon property fairly frequently. In theory people could buy up huge swaths of Detroit for pennies, yet it doesn't happen.
One cheer in favor of ADUs -- they're so obviously an inoffensive idea that seeing NIMBYs go crazy over them is polarizing. "Oh, I should be able to turn my existing garage into a similarly-sized thing that my kids' grandpa can live in" is obviously fair, and seeing otherwise-friendly neighbors nearby go INSANE over a proposed ADU is a strong proof of the YIMBY diagnosis.
With regard to Minneapolis: I think that it is important to keep in mind that Minneapolis is very different from NYC, Philly and DC in one critical regard: it is VERY easy to commute into/across from outside. When I lived there (on the St Paul side) we lived in the north east suburbs, well outside the town parts, but it only took me ~30-40 minutes to drive my daughter to school on the south side of St Paul and then drive into the upper center of St Paul to my job. That would be an hour or more easily here around Philly. Likewise I could get to anywhere in Minneapolis in about 45 minutes (although I never tried at rush hour) despite needing to cross at least one bridge, and there was a lot more area to live on on that side of the Mississippi.
In effect this means that unless you really want to live in the city for its own sake it is much easier to just live outside and commute in. I can think of quite a few reasons why people stopped wanting to live in the city for its own sake, as it turns out, so I would bet a lot of those drops in rents are people just moving 10 miles out.
In that regard I think Minneapolis is more similar to Lancaster, PA, where the housing prices outside the city are almost exactly the same as inside the city, seemingly because there is no good reason to live inside the place because you can easily commute wherever you want to go and avoid the problems of living in the urban area (terrible schools, for one.) Even better than Lancaster really, as MN has some really great highways around that area to go with the dead flat landscape and minor rivers.
I'm in an unusual position as I'm a public servant, in a white collar position, and also unionized (and not related to construction). We have a union shop here; if you're hired into my position, you join the union.
I also think the union should negotiate solely for the benefit of existing members. Prospective members don't pay union dues. Bringing on new members might benefit the union organization, but unless it benefits the existing members, I don't want to do it.
Does this make me NIMBY? Does it reduce or increase the size of the public service? Don't care. The union is for the benefit of the existing members, full-stop. If I could leave the union I would, but failing that, I want the union to do its mandate, and only that.
Counterargument to the step by step upzoning idea: it raises the total amount of destruction/construction you need for the same housing stock, focuses it on areas that are already dense (since the area getting built up to level N is already at level N-1), which maximizes the number of people inconvenienced by the construction noise. It also requires more jobs, but there's a labor shortage in construction (which could be solved if we also solved immigration, but that one seems even harder than housing)
> (which could be solved if we also solved immigration, but that one seems even harder than housing)
So you get one generation of maybe more construction workers per capita than the US population in exchange for endless generations of more people consuming more housing and all kinds of other negative political externalities. This is not a "solution".
This has always been the solution for cities. It may as well be the definition of what a city is.
I notice four things when reading this:
1) The strong 'migr' appears only once in this entire article, in reference to Japan. Extraordinarily high immigration is clearly the dominant factor behind recent spikes in Anglosphere housing prices, especially in Canada/Britain/Australia (the US having both much less immigration and more destination centers for it). If you really believe in the Housing Theory of Everything, surely it warrants a mention?
2) Look carefully at the graph of housing prices for five American cities, and notice Minneapolis collapsing in 2020. A significant chunk of Minneapolis was on fire in 2020, and it was the epicenter of the Floyd effect, with one of the largest crime increases in the country. Its status reflects falling demand, not just increased supply.
3) There's a consistent pattern in the US of the Republicans being far better about housing policy than the Democrats. I don't think this is changeable within existing political coalitions; the Republican voter and especially activist base is far more pro-market than the Democratic one generally, and Republicans benefit electorally from higher homeownership.
If you want an ungated article on manufacturing homes, the consistently fantastic Construction Physics substack had a two-part series on the rise and fall of manufactured homes, as well as a third article that was a response to the Yglesias article:
https://www.construction-physics.com/p/the-rise-and-fall-of-the-mobile-home
https://www.construction-physics.com/p/the-rise-and-fall-of-the-manufactured
https://www.construction-physics.com/p/on-yglesias-on-manufactured-homes
"The hope is that once you have one line, getting more lines becomes far more attractive and feels more real. It is very American to start its high speed rail with a line that gives up on getting the right to go to actual central LA and then connects it to Vegas. I suppose one must start somewhere"
Please let's start somewhere else! The line is currently estimated to cost 12B. Cost over-runs are the rule, so it will probably cost a least 15B (it will probably be more). The train will probably be slower than expected. The capital maintenance costs will be high, and it's an area that's prone to earthquakes and other fun disasters (meaning abnormally high likelihood of spending 15B dollars and then a massive fire shuts it down for anywhere between a few weeks to a few months, or a completely expected earthquake causes it to be down or slowed to normal rail speed for months or years).
Currently you can fly LA to LV for ~52-150 dollars round trip.
Just paying capital maintenance costs, servicing debt and labor costs will mean the tickets (today) would have to ~150 dollars minimum, before you turn a profit. If demand shifts? Your 15B line is outdated and you can maybe reuse some portion of the tracks. When one of the startups working on commuter EV planes is successful? 15B line is outdated.
Building high-speed intercity rail is the finest 20th century answer to a 21st century problem. If we simply MUST do something before EV commuter planes come online, and we're talking 5B-10B, do a bus rapid transit only highway. The speeds will be lower, but it will connect into way more locations, cost less and can be reused for other projects/systems gently over time as technology advances.
The key question is: Why is a private enterprise doing something that will be a profitless boondoggle? I think the answer here is: We've subsidized it so much, and the specific terms mean they will get a cut off the top even when it fails, such that they are perfectly happy to privatize the profit and publicize the risk.
Quite right. If we were to allow private construction and it was worthwhile (read: profitable), then it would already be happening. So, it's either not profitable, or we don't allow what would be needed to make it profitable.
I see absolutely no good reason to spend billions of dollars making transportation options that will rarely be used and never worthwhile compared to existing options.
It's not like trains are perfectly green, either. Carbon is carbon, and the electricity needed to move those trains was likely created with significant amounts of carbon.
EV commuter planes will likely never make sense: by the time battery density is good enough it will have been leapfrogged by SAF or hydrogen. None of the current startups are going anywhere. Happy to expand on that if you’re curious or looking to short something
I mostly agree with you, if they do exist it will probably be for a limited period of time on short (regular routes) or because ultracaps or dome other tech increases density more than expected. Regardless, the answer is not trains. It is some mix of repurposable tech like BRT, planes (possibly using alternative fuel systems) and "future tech".
What’s BRT?
I have to agree that high speed rail in California won’t be Japan high speed rail or whatever these people are thinking of. Japan's has an effective network to get you to the station and no security. In California have they committed to not having security for it?
Bus Rapid Transit. The exact definition varies based on implementation, but the basic idea is make a railroad, but use buses and concrete vs trains and rails. It's wildly cheaper, but top end speed isn't as fast as highspeed rail, and you can always turn the BRT lanes into extra lanes/expressways or HOV stuff if your needs change.
There are a lot of tradeoffs, but if you look at the costs of trains in America (incredibly high, light rail has passed 200m+ PER MILE avg cost) and the actual speeds delivered (often a lot lower than advertised in the "please fund us" docs, sometimes slower than normal trains) I don't see how you can support trains unless you're just really into the idea of trains. Caveat: NY and maybe a handful of other lines (not cities, individual lines) can have strong arguments made b/c of density, ridership and other costs. This is not one of those times.
https://en.wikipedia.org/wiki/Bus_rapid_transit
https://ti.org/antiplanner/?p=21580
https://www.chicago.gov/content/dam/city/depts/cdot/Bus%20Rapid%20Transit/GSG_BRT_BusinessBrochure_FINAL.PDF
I have no knowledge on your 2nd question.
I might add self driving cars to the list of possible technologies that could make trains less attractive
The ongoing YIMBY delusion of affordable housing while advocating for virtually unlimited immigration which will effortlessly consume housing supply faster than anyone could ever conceivably increase it. No, really. Housing can literally never be affordable in e.g. NYC because there will always be more people to come along and drive the price back up once supply becomes available. Having a whole bunch of new apartments in the dozen largest cities in the US will just make it even easier for the federal government to allow more migrants to come in because there's more capacity for them and it's entirely self-defeating.
And no, US cities are not high trust places. The idea that you have to avoid inner areas of your biggest cities because of all the crime and anti-social behavior is unheard of in much of europe and east asia. This is another YIMBY delusion - they almost always support "diversity" and "anti-racism" while decrying urban sprawl/suburbanism. But they're not smart enough to put 2 and 2 together and realize that all this "diversity" is a large part of why so many people left the inner cities in the first place. They instead screech about "white supremacy" when people don't want to raise their families around violent criminals and drug dealers. And of course, the answer to all of this is "investment in education", reflecting their borderline religious beliefs about the impact of education and education spending that are completely divorced from any empirical evidence.
I read this article to try and fall asleep. I nearly succeeded several times. But the ending…
Yes Let’s kids roam
You first
It’s not up to you though
And creating a world where no one calls the cops is what I’m interested in
How, zvi? Not just as a pretty thought experiment
It’s as pointless as the flower in the end of the gun, disarmament, and “end capitalism now” if you don’t actually say how and instead only “if we all just choose to”
Lol.
Two things struck.me here. One is, I think the excitement for circumventing local control is a little too naive. Maybe it's necessary....
[EDIT: INn general given how tyrannical the HOA as an organization is, limiting their power is probably a good thing, on balance.]
But the urge to centralize, to have everything one -size-fits-all, causes a lot of those regulatory problems as well. If a state gets to circumvent any local say.... Well, they get to take away a community's park, or landmark, or street name, without the community's say-so, because they can, whether the community wants it or not, especially if it can be claimed to benefit some other, needier community or groul. Maybe they can already do it, but it doesn't sit right.
Also, re: NIMBY in the wild. Separate from the policy issue, the writer of that thread is so smug. If this Allison person were on a city board planning new construction, I wouldn't trust her to even give my issues a fair hearing. And frankly the NIMBY, again, separate from the correct policy decision here, isn't wrong about the renter's attitude or lack of investment in the neighborhood.
I love Minneapolis but that steep price drop in, uh, mid-to-late 2020 is presumably about demand not supply. Especially if the data excludes the suburbs.
Apologies for something only tangentially related, but there at least is an AI link in the post...
Can anyone recommend a good book on AI? Specifically, I'm looking for a book that focuses on societal, cultural, economic, etc. implications. Not a technical book. I'm finding the topic hard to navigate given how rapidly everything seems to change, and curious if anyone's aware of a decent book-length treatment.
Thanks in advance for your help!
RE: Solving homelessness through increased housing supply.
We really need to separate out different kinds of homelessness. I think we can look at three major categories.
1) Those that have incomes and are pretty stable, but can't afford housing in their desired area. These people will tend to live with family or friends, or in illegal or semi-legal rental situations where a sane society would not think of them as homeless. In previous generations they would have been considered more normal, and outside the US living with generations of family is not that weird as to conflate them with the other categories of homeless. Bringing back boarding houses would help significantly with this kind of situation as well.
These people's problems would definitely be helped by increasing supply, and likely solved by significantly increasing supply.
2) Those who had housing, but ran into a specific problem. Often this would be loss of a job, divorce, house fire, or similar time-limited situation. These people also often live with family or friends, but on a more temporary basis. Most of the time these people stabilize in a few weeks or months and are back into more normal housing.
These people would be helped by cheaper housing, but were not homeless for lack of it. Even significantly cheaper housing (50% less) would not fix all of these issues, and realistically cheaper housing (10-20% less) may make no difference at all for them in terms of whether they are homeless.
3) The people who we might refer to as chronically homeless. These are the most visible kinds, who often live on the street and homeless encampments. They're the ones we usually hear about dropping used needles and feces on city streets.
These people would not be helped by cheaper housing. Much of the time they would only be minimally or temporarily helped by *free* housing. They often lack the ability to literally send money to the electric company, even if they had the money to spend. They would likely make extremely poor decisions if given control of the housing (i.e. sell it). They also tend to get kicked out of homeless shelters and city-provided housing for being really bad neighbors and refusing to give up the drugs and destructive life decisions.
If we're talking about solving the homeless crisis, we need to grapple with the different forms of it. It would be helpful to know who falls into which category, and what their relative numbers are. As I said, I don't think a sane society would call #1 homeless, and we should open up alternative living arrangements (legally) or just make them more normal again. These are also the people who would most benefit from generally cheaper housing. #2 would be helped more by emergency shelters of various kinds, and assistance with solutions on how to fix their immediate problems. Cheaper housing would make this easier, but again, wouldn't solve it. #3 is the central case of what people mean when they talk about the homeless, and would not really be helped at all by anything in this article. I'm definitely in favor of your suggestions, but we should not kid ourselves that they would solve this particular problem.
I have seen this described as the "have nots, can nots, and will nots". Each has different needs and responds differently to different policy interventions and incentives.
Have nots — people who are just poor and can't afford housing. Often used to be housed by then fell behind on rent. Usually own a car.
Can nots — people with serious mental illness or other disabilities that prevent them from participating in society or holding their life together.
Will nots — people who just prefer the independence and freedom gained from not participating in capitalist society. "hobos".
“A per-year tax of 11.8% of value is quite a lot. Presumably the way the math works is that the value of the land gets reduced by the cost of future taxes, which should mean it decline by more than half, while the additional value of built property goes up as it is now taxed less than before. It seems good to turn over the land quickly, so perhaps charging this much, well past the revenue-maximization point, isn’t crazy?”
This shows confusion over what makes a tax decline in revenue past a certain point. Taxes usually reduce the quantity of what is being taxed. For example, a 90% income tax would make much less people want to work for income, or at least over the table. When it comes to land, there’s not a way for the quantity to decline and therefor revenue just keeps on increasing at higher rates.
Of course it is optimal to tax some percentage of land rent rather than the sale price of the land because taxing land rent has revenue scale linearly with the percentage taxed rather than having declining marginal revenue.
What I am saying is that the stream of taxes on the land reduces its value, and makes people unwilling to own and build,which reduces revenue. I get that quantity is fixed.
It does reduce the sale value of the land, but sale value of the land does not decrease faster than the tax increases.
I’m not sure why it would make people unwilling to build. If people don’t want to own the land, they will try to sell it. Price will decrease until the market clears. At no point do the returns to building change (outside of the reduced taxes on structure which incentivizes more building).
I think you will find the value of the land can indeed drop faster than the tax increases. At the limit people will simply abandon the land as owning it and building upon it is not worth the taxes. Before you get to that point people will only wish to own it if the taxes are low enough to make the owning of it worth while, and whether or not it is worth while depends on whether the costs + tax < benefits.
In other words, supply stays constant but the value of the land drops such that the 11.8% of value equals whatever people are willing to put up with in taxes. That can very easily be less than current revenue, all the way to 0 revenue at the extreme. Tax land ownership enough and people will stop wanting to own land.
I don't understand the economic circumstances in which you would abandon the land with a tax raised on market value. If people are unable to sell the land with current taxes, the price would go down close to zero and the tax would also go to zero. If your critique is that the government will evaluate property prices wrong, that's fine. I think that's a good critique and is why people don't tend to support LVTs above 80% of land rent.
Let's formalize the math. Assume MP0 is the market price with no tax and MP1 is the market price after tax. Both are set by discounted future cash flows.
MP1 = MP0 - Present value of the tax
MP1 = MP0 - taxrate MP1 / discount rate
MP1 + t*MP1/r = MP0
MP1(1+t/r) = MP0
MP1 = MP0 / (1 + t/r)
As t approaches infinity, MP1 approaches 0 but for any finite positive t and r, MP1 will be some positive number.
You need to consider the actual process of selling the property and thus establishing the market value, as your math abstracts away most of the process. How this transaction happens is a huge part of the question, as you seem to understand. If the government bases market value on the last sale price you can be stuck if the current price is effectively zero, which is to say, no one wants to buy it. It becomes cheaper to walk away from the land than go through the transaction costs of selling it for next to nothing.
But of course, what if you do sell the land for a dollar? Well, firstly the government revenue is going to drop like a stone, which is pretty much what the original point was: the value of the land can drop faster than the tax increases, reduced revenue on fixed amounts of land despite increased tax rates.
Secondly though, does anyone believe that the government will accept drastically reduced revenues? The expected change in future taxes will depress the market value further, because people know (or will very quickly realize) that if the local government needs funds it will get them from somewhere. So again, finding buyers can be very difficult, and it can quickly get to the point where walking away from the property is the least cost option for want of someone to take the opposite side of the transaction.
People abandon property fairly frequently. In theory people could buy up huge swaths of Detroit for pennies, yet it doesn't happen.
One cheer in favor of ADUs -- they're so obviously an inoffensive idea that seeing NIMBYs go crazy over them is polarizing. "Oh, I should be able to turn my existing garage into a similarly-sized thing that my kids' grandpa can live in" is obviously fair, and seeing otherwise-friendly neighbors nearby go INSANE over a proposed ADU is a strong proof of the YIMBY diagnosis.
With regard to Minneapolis: I think that it is important to keep in mind that Minneapolis is very different from NYC, Philly and DC in one critical regard: it is VERY easy to commute into/across from outside. When I lived there (on the St Paul side) we lived in the north east suburbs, well outside the town parts, but it only took me ~30-40 minutes to drive my daughter to school on the south side of St Paul and then drive into the upper center of St Paul to my job. That would be an hour or more easily here around Philly. Likewise I could get to anywhere in Minneapolis in about 45 minutes (although I never tried at rush hour) despite needing to cross at least one bridge, and there was a lot more area to live on on that side of the Mississippi.
In effect this means that unless you really want to live in the city for its own sake it is much easier to just live outside and commute in. I can think of quite a few reasons why people stopped wanting to live in the city for its own sake, as it turns out, so I would bet a lot of those drops in rents are people just moving 10 miles out.
In that regard I think Minneapolis is more similar to Lancaster, PA, where the housing prices outside the city are almost exactly the same as inside the city, seemingly because there is no good reason to live inside the place because you can easily commute wherever you want to go and avoid the problems of living in the urban area (terrible schools, for one.) Even better than Lancaster really, as MN has some really great highways around that area to go with the dead flat landscape and minor rivers.
I'm in an unusual position as I'm a public servant, in a white collar position, and also unionized (and not related to construction). We have a union shop here; if you're hired into my position, you join the union.
I also think the union should negotiate solely for the benefit of existing members. Prospective members don't pay union dues. Bringing on new members might benefit the union organization, but unless it benefits the existing members, I don't want to do it.
Does this make me NIMBY? Does it reduce or increase the size of the public service? Don't care. The union is for the benefit of the existing members, full-stop. If I could leave the union I would, but failing that, I want the union to do its mandate, and only that.