> As in, if the UK was allowing and even encouraging energy including wind and nuclear
Good news, one of the new Labour governments first acts this week was instantly lifting the ban on new onshore wind in England alongside instant approvals for several large renewable projects that had been stuck in planning application hell for years.
My wife is building a house in Kenya (four bedroom, ~180m²/2000sq ft total). Total cost ~50000US$, not including land (300m²; which she already owned). Building in Kenya is increadibly cheap and the house is nice (no central heating though).
I am going to predict that the "chuck a $20,000 down payment at your kid" experiment would serve to teach countless people that taking advantage of the free money spigot, I mean government-backed fixed-rate lending system is a good idea and do way more than the subsidy itself would directly predict, because it's a one-time subsidy to teach you take advantage of another massive subsidy.
To think about it differently, what happens if you have a Massive Free Money Hole that only some people are used to taking their money boat on money-fishing trips in, and you announce that there is now a $20,000 subsidy for everyone who makes their first stop at the Massive Free Money Hole? I predict greatly amplified long term effects for this.... Accelerationism on the mortgage lending system maybe? Lol.
We should handle mortgage lending like everywhere else, as a normal loan, not a positive-expected-real-returns monstrosity. The current system is massively skewing the rent-v-buy calculation and there's no reason to do that.
> Also note that if all home values go up by $5000, that does not mean that homeowners are that much wealthier unless they own more house than they need. If you live in one house and own one house, you are closer to economically flat housing than to being long one house. You have to live somewhere.
This is true until homeowners borrow against their home equity. Say all homes go up in value by $1M. Many homeowners would be able to tap their equity and sustain a higher standard of living, especially if interest rates are low.
Here's an idea I think about sometimes: it's basically California Forever, but somewhere that has less onerous state laws for development (Texas?). A bunch of rich people buy up mostly undeveloped land, build a starter town or even a starter city (they do something to get a decent amount of people there quickly, with the goal of attracting more businesses and people - it's the startup network effect strategy but for creating a city). Most importantly, the rules for future development on the area are as relaxed as possible, and are written to be very hard to change. I'd be interested to see how this goes for several reasons: first, how much do local zoning and other regulations affect development, vs. state and federal laws? And second, let's say this really takes off: maybe this would inspire change if people saw firsthand how easy the housing shortage could be solved, and how much better off people would be for it. It could be a literal shining city on a hill - maybe not, but I'd like to see someone try.
I'm thinking of something like Houston on steroids. Houston doesn't have zoning, but it does have rules that affect development (I'm not an expert on this, but googling gives results like https://www.houstonchronicle.com/news/houston-texas/article/doesn-t-houston-zoning-laws-18653170.php: "In its absence of zoning laws, the city does regulate land use in other ways including deed restrictions, historic preservation, tax increment reinvestment zones, a buffering ordinance, density, airports and lot sizes"). My idea is, what if we had a city with even less regulation than Houston? As for Texas, I just threw that out as the first state that came to mind where it seems to generally be easier to build things, compared to a state like California. As much as possible, I'd want the project to limit the possibility of having the positive effects of limited regulations at the local level be swamped by regulations at the state level
Isn't this also basically Irvine (although admittedly that's also in CA), except that Irvine deliberately hasn't gone full-send on density presumably for QoL reasons?
Irvine is a good example! I would say "hasn't gone full-send on density" is doing a lot of work here - I'm imagining if there is a density rule, for example, it's something like the city is allowed to be at least as dense as Manhattan's current density, about 16x Irvine's. Actually now that you mention Irvine, I remember Scott Alexander had written about it some time ago, and this article of his is pretty similar to my idea, I've also thought of this as just charter cities but in the US (https://slatestarcodex.com/2018/10/04/next-door-in-nodrumia/). So, uh, sorry Scott if I stole your idea
For the record, Irvine came to mind precisely because Scott had written about it!
(My point regarding density in Irvine was more the observation that If you use Google maps, Irvine sticks out for appearing to significantly less dense and much greener than the immediately surrounding part of Greater LA to either side of it.)
I can think of two provisos to the environmentalist argument for YIMBY exemplified by the Island example (granting the basic logic of it). YMMV on how convincing these are, but the basic point is "demand for housing increasing without bound should be viewed as in and of itself an environmental problem here rather than solely as an exogenous issue to be accommodated by policy."
Firstly, to make a complete environmentalist argument for this, I think you to be specific about having some kind of telos regarding population growth (if there's one thing I would demand of Matt Y with respect to some of his policy preferences, it's that he's insufficiently explicit about what, if any, desired population end-state he has. For a philosophy major I sometimes just want to shake him and shout "Give me a fucking telos! Think about how the Categorical Imperative applies here!"). Sure, there are are more trees with one apartment building than with the sprawl scenario.....but in a positive population-growth world, there's also a lot of undeveloped land tempting to you build another apartment building on it. And now you have two apartment-buildings worth of people reproducing, and a lot of land around to build on that looks tempting, and so on, and so on. If you don't have an enforceable Schelling point around population growth (or at minimum a robust explanation as to why natural growth won't continue without bound despite constant selection for high fertility), you just end up with the entire island covered in apartment buildings at time T1[1] and you've recapitulated the Malthusian trap of Rat Island from Meditations of Moloch without even the shade trees, baseball fields, non-overcrowded parks, and yards / lawns you get in the suburban sprawl scenario. Zoning at least forestalls this outcome locally (although not globally, globally you're fucked either way under positive population growth and local cooperation looks like global defection because you're increasing land area consumption and forcing surplus population elsewhere). The point being that "accommodating arbitrary amounts of population growth" is a bad problem to have in the first place and the YIMBY attempt to address it is good on the margins but generally bad on the terminal values. Zoning restrictions at least look a little bit more like a stab at acknowledging something that looks like a fixed carrying-capacity for the island with an upper bound on how much displacement and degradation you can have due to human encroachment -- worse on the margins for any given growth phase, better on the (localized) terminus.
Secondly, preserving the environment by ensuring no one lives in it is clearly appropriate in various circumstances (e.g., national parks) and is instrumentally sound, but it's kind of a shit equilibrium as far as environment-as-consumption-good goes. Live in Manhattan and never see the constellations, or any animal bigger than a raccoon, or climb a mountain or go skiing or swim in a creek or just wander somewhere without the sound of traffic surrounded by people and competing with other humans for space, other than at high cost in money and (especially) time because it take 30-90 minutes just to leave the city. Part of supporting an environmental rationale for policy X is getting to actually enjoy the environment, which low-density rather than medium- or high-density living tends to better foster at lower cost.
[1] Notably, for existence proofs, this seem to have basically already happened with Toyko, for which the Greater MSA occupies to first order 100% of the contiguous lowland area in its vicinity and about 7% of the entire area of Island of Honshu.
Erm, isn’t Tokyo an existence proof that you can saturate at a high density level and population growth still stops? Real estate prices are probably part of the fertility decline in the Anglosphere but the fertility decline happens everywhere.
New York is a vastly better place to live for exposure to nature than Houston. If you build dense, you can have good interior parks and have nature close by. Suburbia is an absolutely disastrous way to try to sort-of be exposed to nature. Grass and cars are not what nature is.
More generally, I don’t really think the infinite-time telos of a policy has virtually any relevance for whether it should be advocated now (AI issues excepted for some of the audience here, sort of—but even that is more about not destroying the world in our lifetime than about preventing future generations from being enabled to do so.) We can avoid doing things that will directly leave a much worse world for our descendants, but it’s absurd hubris to try to set policy on the basis of avoiding hypothetical second-order effects in a hundred years.
Tokyo's population is actually continuing to grow although that of the rest of Japan isn't -- the metropole is gaining population faster than Japan at large is losing it. The point I'm making with Tokyo is that if you look at Edo-period Tokyo, say "wait, if we keep growing Tokyo without bound eventually we'll have no wilderness left because it'll all be buildings!" that that's basically exactly what happened (at least in everywhere buildable, and granting the greater MSA does have a few tilled fields so it's not quite literally all buildings.).
Conversely, I disagree that it's "absurd hubris to try to set policy on the basis of avoiding hypothetical second-order effects in a hundred years" -- what's the proverb about the best time to plant a tree? And what are current concerns about fertility collapse if not exactly a form of setting policy on the basis of avoiding hypothetical second-order effects in a hundred years?
The dangers of fertility collapse are active, like, right now for Japan and will be by 2040 for similarly aging countries to the extent they aren’t already. It has nothing to do with 100 years from now, nor with hypothetical effects, nor second-order ones, but with the impracticality of the actually currently existing young working age population supporting the actually currently existing retirement and near-retirement population in a whole range of countries. Planting a tree, similarly, is not about encouraging second-order effects.
Regarding Matt Y's telos for population, he literally wrote a book titled One Billion Americans. So I think that's pretty solid evidence for what he thinks the US population "should" be, at least for certain values of the word "should."
Unless I’m misunderstanding his PoV I don’t think Matt has any principled belief in or policy ideas in favor of stopping at One Billion - I think the title is implicitly [At Least] One Billion Americans.
Despite what I read as the distinctly pro-developer tone of this piece, I appreciated its more balanced proposals.
However, I remain convinced that the housing crisis defies whole solutions because it is one symptom of an even larger problem: Growing and accelerating wealth disparity.
Demand is a function of what people can afford as much as it is what they prefer. The what and where decisions the vast majority of people make about how to house themselves is less a matter of preference than of their income and available capital as it determines the size of deposit (or down payment) and rent (or debt service) they can afford.
I don’t have documentation on hand, but suspect that the biggest demand for housing today is from corporations and the very wealthy for investment-grade (high-end) units which are under-utilized as perks for traveling clients, customers, or for traveling execs, short-term rentals, or simply for their appreciating value. Subsidizing housing development in general only exacerbates that piece of the puzzle. A sort of instinctive reaction to this may explain some of the resistance to densification initiatives. I know that within two blocks of my (formerly zoned Single-Family) neighborhood, two houses have just recently been had at least one story converted to short-term rental units by absentee owners.
Not only does this kind of thing fail to address housing shortages, it poisons the whole idea of densification and building more housing among the general public and current residents.
So, “trickle-down” housing policies have a place, but are already too prominent a feature of the landscape IMHO.
Also, I have to say that this piece went further in pursuit of dubious justifications than necessary, so it was overly long. It seemed to me to twist some logical pretzels. It clearly took some time to research and compose. It would benefit from one more proof-reading and edit. So It was even harder to read than most by this author.
... The demand for housing is from people who want to live in houses, mate. That's it. That's all. It makes no sense for "investors" to buy houses no one wants to live in.
Supply and demand is a thing. The lack of cities in the top right quadrant (high building, high prices) is the obvious outcome, but the empirical evidence is overwhelming.
Also, whether people build luxury housing or not is completely irrelevant. The people who would live in luxury apartments would instead live in the next apartment down instead, bidding up its price, and so on and so forth.
My shitty 850sqft terraced house in an undesirable part of London is worth half a million pounds because I needed a place to live. I'm a banker, I earn in the top 1% of incomes. All that happens when you restrict supply is that prices are bid up, so people fall off the bottom end. This is not a complex thought experiment.
Ahh, but empty homes have been, and will be again, a good investment when other markets are not performing as well. Did you buy your house for what it is worth now? Will you be selling it for even more than it is now worth? You will if you time the sale right. In my case, appreciation of my home’s value makes it the best investment I have ever made in the 35 years since I bought it. High-rise condos in San Diego near its convention center near the bay are empty except for temporary visitors. Someone (or something) bought them, but nobody lives there.
Prices are rarely bid up by people who finally got their family into a home of some kind after being homeless. They are bid up by flippers and other investors.
Desireable homes in desireable locations are no longer an option for the unhoused, and it’s a long way on the economic ladder from between someone willing to settle for an undesirable home in an undesirable location and those who can afford what they want; too far, IMO, for transactions at the upper level to have an appreciable impact on the bottom rungs in less than a decade.
The missing “upper right” quadrant is contrary to my experience. I’m not sure where the data on those charts is from. I need to go back and look. Other than a recent boom in construction of new “student housing” in my town, the most activity is on large new custom SF houses outside of town where large parcels can be had. Those are not showing up on these charts for some reason.
And I’m not for restricting demand anyway. I’m looking for balance through improving the economic position of lower-income earners. I see Income and wealth-limited demand (as distinct from need) for low-end housing as the root culprit. It’s not something housing policy can address. It involves national taxation, economic, and labor law policy, at the very least.
Most dangerous idea in housing is "we don't just need more housing, we need the RIGHT housing". Typically this means "missing middle housing", affordable housing, purpose built rental etc. This sentiment is catnip to planners who can use it to justify trying to solve a problem caused by too much planning with more planning.
From a housing market perspective, you are not trying to create buildings, but vacancies. And the type of buildings that are vacant in a particular period are mostly buildings that were recently vacated, not buildings that were recently built.
Finally, if I lived on that island, I would much rather have my own house than live in a giant apartment building. No offense to the fine people of Whittier, Alaska.
Sure, you would rather have your own house, but what would you rather everyone else have? There's a bit of a potential Tragedy of the Commons going on there.
> I assume that the 100+ applications are because of rent control. Otherwise, you can respond by raising your price.
I think another major non rent control factor is difficulty evicting. If an eviction is really hard to get, you don’t want to take any chances with your choice of tenant. I have heard of landlords saying things to the effect of, “$30,000 is not that much to have in your bank account, do you have any other assets?”.
Regarding SB 9, I think a common anti-pattern when thinking about or reporting on legal decisions is to look only at the effect of the decisions on the parties. That’s not (mainly) how our legal system works; we have rules of law in order to make the system predictable and “fair”, in some sense of the word, even if the result is counterintuitive.
In this case the state constitution specifies that the legislature has to cast a particular magic spell in order to override charter cities’ powers, and part of that spell is that the law has to state a particular purpose. The legislature stated the purpose was “affordable housing”, and I think we can all agree (with disapproval perhaps) that the way those two words are used in government does not in fact apply to market rate housing. That a judge reached this conclusion does not make it a “bad decision” from a legal perspective, nor does it mean the judge is imposing a particular political viewpoint. We should all want judges to interpret the law systematically, and give them our particular approval when they do so in a way that is controversial or unpopular.
Can the legislature fix this? Absolutely. Probably. Just change the purpose to “adequate housing supply” or something.
> The UK really does have it far worse than us on housing.
I think the commentary about the UK's housing regulation problem is overblown (not disputing that we do have a substantial problem in the UK). I assume by "us" you mean the US, and not SF, because otherwise that's obviously nonsense. For the US, that is a defendable claim, but note that the graph you quote further up under Stop Restricting Supply shows the UK as better than the US both on absolute houses/people and on growth. The UK is obviously much worse than the US (or any other developed country outside of maybe east asia) on square metres of space per person (not quoted on the graph), but I think that's a much lesser problem. The key thing is having somewhere to live comfortably with the people you want to live with. Having a lot of space isn't *bad*, but it's not that important.
> London has Detroit wages and San Francisco rents
The first part definitely doesn't seem to be true. The median income in London is around $50k; in Detroit it's barely half that (unless the sources I'm checking are wildly off). Granted, income and wage are not quite the same thing. I'm not so sure about rents.
I refuse to believe that forcing people to house strangers in rooms in their own house is remotely in the Overton window in UK politics. "Nudge" policies designed to encourage letting rooms, or encourage downsizing, especially for the elderly, maybe. But I don't think they would necessarily be a bad thing.
> I’ll hand this one off. Iron Economist has various amusing counterpoints, some of which you know already, some details you likely don’t.
It’s quite funny because while most points he gives seem correct, he’s just flat out wrong about comparison with Poland (which has both more divorces per capita and lower fertility rate than the UK).
> As in, if the UK was allowing and even encouraging energy including wind and nuclear
Good news, one of the new Labour governments first acts this week was instantly lifting the ban on new onshore wind in England alongside instant approvals for several large renewable projects that had been stuck in planning application hell for years.
It's such a strange feeling, waking up to good news and sensible policies days after day. Pinch me!
My wife is building a house in Kenya (four bedroom, ~180m²/2000sq ft total). Total cost ~50000US$, not including land (300m²; which she already owned). Building in Kenya is increadibly cheap and the house is nice (no central heating though).
I am going to predict that the "chuck a $20,000 down payment at your kid" experiment would serve to teach countless people that taking advantage of the free money spigot, I mean government-backed fixed-rate lending system is a good idea and do way more than the subsidy itself would directly predict, because it's a one-time subsidy to teach you take advantage of another massive subsidy.
To think about it differently, what happens if you have a Massive Free Money Hole that only some people are used to taking their money boat on money-fishing trips in, and you announce that there is now a $20,000 subsidy for everyone who makes their first stop at the Massive Free Money Hole? I predict greatly amplified long term effects for this.... Accelerationism on the mortgage lending system maybe? Lol.
We should handle mortgage lending like everywhere else, as a normal loan, not a positive-expected-real-returns monstrosity. The current system is massively skewing the rent-v-buy calculation and there's no reason to do that.
Great newsletter as always Zvi! Do you know what paper the are from under Do Not Give the People What They Want (labelled Figure 4.1 and Figure 4.2) ?
EDIT: seems to be here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4811534
> Also note that if all home values go up by $5000, that does not mean that homeowners are that much wealthier unless they own more house than they need. If you live in one house and own one house, you are closer to economically flat housing than to being long one house. You have to live somewhere.
This is true until homeowners borrow against their home equity. Say all homes go up in value by $1M. Many homeowners would be able to tap their equity and sustain a higher standard of living, especially if interest rates are low.
Alternatively, if and when the property is inherited, the heirs will be able to collect the surplus.
Yep. This would basically be a wealth transfer from one group (renters) to another group (homeowners and their heirs).
Here's an idea I think about sometimes: it's basically California Forever, but somewhere that has less onerous state laws for development (Texas?). A bunch of rich people buy up mostly undeveloped land, build a starter town or even a starter city (they do something to get a decent amount of people there quickly, with the goal of attracting more businesses and people - it's the startup network effect strategy but for creating a city). Most importantly, the rules for future development on the area are as relaxed as possible, and are written to be very hard to change. I'd be interested to see how this goes for several reasons: first, how much do local zoning and other regulations affect development, vs. state and federal laws? And second, let's say this really takes off: maybe this would inspire change if people saw firsthand how easy the housing shortage could be solved, and how much better off people would be for it. It could be a literal shining city on a hill - maybe not, but I'd like to see someone try.
But isn’t this just already Houston? Not clear what you demonstrate by doing it in Texas.
I'm thinking of something like Houston on steroids. Houston doesn't have zoning, but it does have rules that affect development (I'm not an expert on this, but googling gives results like https://www.houstonchronicle.com/news/houston-texas/article/doesn-t-houston-zoning-laws-18653170.php: "In its absence of zoning laws, the city does regulate land use in other ways including deed restrictions, historic preservation, tax increment reinvestment zones, a buffering ordinance, density, airports and lot sizes"). My idea is, what if we had a city with even less regulation than Houston? As for Texas, I just threw that out as the first state that came to mind where it seems to generally be easier to build things, compared to a state like California. As much as possible, I'd want the project to limit the possibility of having the positive effects of limited regulations at the local level be swamped by regulations at the state level
Isn't this also basically Irvine (although admittedly that's also in CA), except that Irvine deliberately hasn't gone full-send on density presumably for QoL reasons?
Irvine is a good example! I would say "hasn't gone full-send on density" is doing a lot of work here - I'm imagining if there is a density rule, for example, it's something like the city is allowed to be at least as dense as Manhattan's current density, about 16x Irvine's. Actually now that you mention Irvine, I remember Scott Alexander had written about it some time ago, and this article of his is pretty similar to my idea, I've also thought of this as just charter cities but in the US (https://slatestarcodex.com/2018/10/04/next-door-in-nodrumia/). So, uh, sorry Scott if I stole your idea
For the record, Irvine came to mind precisely because Scott had written about it!
(My point regarding density in Irvine was more the observation that If you use Google maps, Irvine sticks out for appearing to significantly less dense and much greener than the immediately surrounding part of Greater LA to either side of it.)
Patio11 post on title insurance if you missed it: https://www.bitsaboutmoney.com/archive/working-title-insurance/
Podcast episode for this post
https://askwhocastsai.substack.com/p/housing-roundup-9-restricting-supply
I can think of two provisos to the environmentalist argument for YIMBY exemplified by the Island example (granting the basic logic of it). YMMV on how convincing these are, but the basic point is "demand for housing increasing without bound should be viewed as in and of itself an environmental problem here rather than solely as an exogenous issue to be accommodated by policy."
Firstly, to make a complete environmentalist argument for this, I think you to be specific about having some kind of telos regarding population growth (if there's one thing I would demand of Matt Y with respect to some of his policy preferences, it's that he's insufficiently explicit about what, if any, desired population end-state he has. For a philosophy major I sometimes just want to shake him and shout "Give me a fucking telos! Think about how the Categorical Imperative applies here!"). Sure, there are are more trees with one apartment building than with the sprawl scenario.....but in a positive population-growth world, there's also a lot of undeveloped land tempting to you build another apartment building on it. And now you have two apartment-buildings worth of people reproducing, and a lot of land around to build on that looks tempting, and so on, and so on. If you don't have an enforceable Schelling point around population growth (or at minimum a robust explanation as to why natural growth won't continue without bound despite constant selection for high fertility), you just end up with the entire island covered in apartment buildings at time T1[1] and you've recapitulated the Malthusian trap of Rat Island from Meditations of Moloch without even the shade trees, baseball fields, non-overcrowded parks, and yards / lawns you get in the suburban sprawl scenario. Zoning at least forestalls this outcome locally (although not globally, globally you're fucked either way under positive population growth and local cooperation looks like global defection because you're increasing land area consumption and forcing surplus population elsewhere). The point being that "accommodating arbitrary amounts of population growth" is a bad problem to have in the first place and the YIMBY attempt to address it is good on the margins but generally bad on the terminal values. Zoning restrictions at least look a little bit more like a stab at acknowledging something that looks like a fixed carrying-capacity for the island with an upper bound on how much displacement and degradation you can have due to human encroachment -- worse on the margins for any given growth phase, better on the (localized) terminus.
Secondly, preserving the environment by ensuring no one lives in it is clearly appropriate in various circumstances (e.g., national parks) and is instrumentally sound, but it's kind of a shit equilibrium as far as environment-as-consumption-good goes. Live in Manhattan and never see the constellations, or any animal bigger than a raccoon, or climb a mountain or go skiing or swim in a creek or just wander somewhere without the sound of traffic surrounded by people and competing with other humans for space, other than at high cost in money and (especially) time because it take 30-90 minutes just to leave the city. Part of supporting an environmental rationale for policy X is getting to actually enjoy the environment, which low-density rather than medium- or high-density living tends to better foster at lower cost.
[1] Notably, for existence proofs, this seem to have basically already happened with Toyko, for which the Greater MSA occupies to first order 100% of the contiguous lowland area in its vicinity and about 7% of the entire area of Island of Honshu.
Erm, isn’t Tokyo an existence proof that you can saturate at a high density level and population growth still stops? Real estate prices are probably part of the fertility decline in the Anglosphere but the fertility decline happens everywhere.
New York is a vastly better place to live for exposure to nature than Houston. If you build dense, you can have good interior parks and have nature close by. Suburbia is an absolutely disastrous way to try to sort-of be exposed to nature. Grass and cars are not what nature is.
More generally, I don’t really think the infinite-time telos of a policy has virtually any relevance for whether it should be advocated now (AI issues excepted for some of the audience here, sort of—but even that is more about not destroying the world in our lifetime than about preventing future generations from being enabled to do so.) We can avoid doing things that will directly leave a much worse world for our descendants, but it’s absurd hubris to try to set policy on the basis of avoiding hypothetical second-order effects in a hundred years.
Tokyo's population is actually continuing to grow although that of the rest of Japan isn't -- the metropole is gaining population faster than Japan at large is losing it. The point I'm making with Tokyo is that if you look at Edo-period Tokyo, say "wait, if we keep growing Tokyo without bound eventually we'll have no wilderness left because it'll all be buildings!" that that's basically exactly what happened (at least in everywhere buildable, and granting the greater MSA does have a few tilled fields so it's not quite literally all buildings.).
Conversely, I disagree that it's "absurd hubris to try to set policy on the basis of avoiding hypothetical second-order effects in a hundred years" -- what's the proverb about the best time to plant a tree? And what are current concerns about fertility collapse if not exactly a form of setting policy on the basis of avoiding hypothetical second-order effects in a hundred years?
The dangers of fertility collapse are active, like, right now for Japan and will be by 2040 for similarly aging countries to the extent they aren’t already. It has nothing to do with 100 years from now, nor with hypothetical effects, nor second-order ones, but with the impracticality of the actually currently existing young working age population supporting the actually currently existing retirement and near-retirement population in a whole range of countries. Planting a tree, similarly, is not about encouraging second-order effects.
Regarding Matt Y's telos for population, he literally wrote a book titled One Billion Americans. So I think that's pretty solid evidence for what he thinks the US population "should" be, at least for certain values of the word "should."
Unless I’m misunderstanding his PoV I don’t think Matt has any principled belief in or policy ideas in favor of stopping at One Billion - I think the title is implicitly [At Least] One Billion Americans.
Yeah, I think that's probably right but it was hard for me to resist posting that, given the title of the book.
Despite what I read as the distinctly pro-developer tone of this piece, I appreciated its more balanced proposals.
However, I remain convinced that the housing crisis defies whole solutions because it is one symptom of an even larger problem: Growing and accelerating wealth disparity.
Demand is a function of what people can afford as much as it is what they prefer. The what and where decisions the vast majority of people make about how to house themselves is less a matter of preference than of their income and available capital as it determines the size of deposit (or down payment) and rent (or debt service) they can afford.
I don’t have documentation on hand, but suspect that the biggest demand for housing today is from corporations and the very wealthy for investment-grade (high-end) units which are under-utilized as perks for traveling clients, customers, or for traveling execs, short-term rentals, or simply for their appreciating value. Subsidizing housing development in general only exacerbates that piece of the puzzle. A sort of instinctive reaction to this may explain some of the resistance to densification initiatives. I know that within two blocks of my (formerly zoned Single-Family) neighborhood, two houses have just recently been had at least one story converted to short-term rental units by absentee owners.
Not only does this kind of thing fail to address housing shortages, it poisons the whole idea of densification and building more housing among the general public and current residents.
So, “trickle-down” housing policies have a place, but are already too prominent a feature of the landscape IMHO.
Also, I have to say that this piece went further in pursuit of dubious justifications than necessary, so it was overly long. It seemed to me to twist some logical pretzels. It clearly took some time to research and compose. It would benefit from one more proof-reading and edit. So It was even harder to read than most by this author.
... The demand for housing is from people who want to live in houses, mate. That's it. That's all. It makes no sense for "investors" to buy houses no one wants to live in.
Supply and demand is a thing. The lack of cities in the top right quadrant (high building, high prices) is the obvious outcome, but the empirical evidence is overwhelming.
Also, whether people build luxury housing or not is completely irrelevant. The people who would live in luxury apartments would instead live in the next apartment down instead, bidding up its price, and so on and so forth.
My shitty 850sqft terraced house in an undesirable part of London is worth half a million pounds because I needed a place to live. I'm a banker, I earn in the top 1% of incomes. All that happens when you restrict supply is that prices are bid up, so people fall off the bottom end. This is not a complex thought experiment.
Ahh, but empty homes have been, and will be again, a good investment when other markets are not performing as well. Did you buy your house for what it is worth now? Will you be selling it for even more than it is now worth? You will if you time the sale right. In my case, appreciation of my home’s value makes it the best investment I have ever made in the 35 years since I bought it. High-rise condos in San Diego near its convention center near the bay are empty except for temporary visitors. Someone (or something) bought them, but nobody lives there.
Prices are rarely bid up by people who finally got their family into a home of some kind after being homeless. They are bid up by flippers and other investors.
Desireable homes in desireable locations are no longer an option for the unhoused, and it’s a long way on the economic ladder from between someone willing to settle for an undesirable home in an undesirable location and those who can afford what they want; too far, IMO, for transactions at the upper level to have an appreciable impact on the bottom rungs in less than a decade.
The missing “upper right” quadrant is contrary to my experience. I’m not sure where the data on those charts is from. I need to go back and look. Other than a recent boom in construction of new “student housing” in my town, the most activity is on large new custom SF houses outside of town where large parcels can be had. Those are not showing up on these charts for some reason.
And I’m not for restricting demand anyway. I’m looking for balance through improving the economic position of lower-income earners. I see Income and wealth-limited demand (as distinct from need) for low-end housing as the root culprit. It’s not something housing policy can address. It involves national taxation, economic, and labor law policy, at the very least.
Most dangerous idea in housing is "we don't just need more housing, we need the RIGHT housing". Typically this means "missing middle housing", affordable housing, purpose built rental etc. This sentiment is catnip to planners who can use it to justify trying to solve a problem caused by too much planning with more planning.
From a housing market perspective, you are not trying to create buildings, but vacancies. And the type of buildings that are vacant in a particular period are mostly buildings that were recently vacated, not buildings that were recently built.
Finally, if I lived on that island, I would much rather have my own house than live in a giant apartment building. No offense to the fine people of Whittier, Alaska.
Sure, you would rather have your own house, but what would you rather everyone else have? There's a bit of a potential Tragedy of the Commons going on there.
> I assume that the 100+ applications are because of rent control. Otherwise, you can respond by raising your price.
I think another major non rent control factor is difficulty evicting. If an eviction is really hard to get, you don’t want to take any chances with your choice of tenant. I have heard of landlords saying things to the effect of, “$30,000 is not that much to have in your bank account, do you have any other assets?”.
Regarding SB 9, I think a common anti-pattern when thinking about or reporting on legal decisions is to look only at the effect of the decisions on the parties. That’s not (mainly) how our legal system works; we have rules of law in order to make the system predictable and “fair”, in some sense of the word, even if the result is counterintuitive.
In this case the state constitution specifies that the legislature has to cast a particular magic spell in order to override charter cities’ powers, and part of that spell is that the law has to state a particular purpose. The legislature stated the purpose was “affordable housing”, and I think we can all agree (with disapproval perhaps) that the way those two words are used in government does not in fact apply to market rate housing. That a judge reached this conclusion does not make it a “bad decision” from a legal perspective, nor does it mean the judge is imposing a particular political viewpoint. We should all want judges to interpret the law systematically, and give them our particular approval when they do so in a way that is controversial or unpopular.
Can the legislature fix this? Absolutely. Probably. Just change the purpose to “adequate housing supply” or something.
> The UK really does have it far worse than us on housing.
I think the commentary about the UK's housing regulation problem is overblown (not disputing that we do have a substantial problem in the UK). I assume by "us" you mean the US, and not SF, because otherwise that's obviously nonsense. For the US, that is a defendable claim, but note that the graph you quote further up under Stop Restricting Supply shows the UK as better than the US both on absolute houses/people and on growth. The UK is obviously much worse than the US (or any other developed country outside of maybe east asia) on square metres of space per person (not quoted on the graph), but I think that's a much lesser problem. The key thing is having somewhere to live comfortably with the people you want to live with. Having a lot of space isn't *bad*, but it's not that important.
> London has Detroit wages and San Francisco rents
The first part definitely doesn't seem to be true. The median income in London is around $50k; in Detroit it's barely half that (unless the sources I'm checking are wildly off). Granted, income and wage are not quite the same thing. I'm not so sure about rents.
I refuse to believe that forcing people to house strangers in rooms in their own house is remotely in the Overton window in UK politics. "Nudge" policies designed to encourage letting rooms, or encourage downsizing, especially for the elderly, maybe. But I don't think they would necessarily be a bad thing.
Given that you didn't link it in the title insurance paragraph, I assume you haven't seen https://www.bitsaboutmoney.com/archive/working-title-insurance/ yet?
> I’ll hand this one off. Iron Economist has various amusing counterpoints, some of which you know already, some details you likely don’t.
It’s quite funny because while most points he gives seem correct, he’s just flat out wrong about comparison with Poland (which has both more divorces per capita and lower fertility rate than the UK).