Sadly structurally the system favors housing incumbents. And it doesn’t take a lot to derail efforts to create more supply.
In my town we spent 8 years of public involvement in rezoning to increase supply and density. Including several city council elections of pro-housing council members elected over more NIMBY ones.
Only to have it all screwed up by 2-3 households that sued, pausing the zoning and throwing a wrench into a lot of new housing construction.
I feel like there has to be an effort at all layers of government to solve this structural problem where a few homes can derail a democratic process.
Yes but the unique piece here is ratcheting up of ever increasing codes, zoning, regulations while grandfathering in the old housing. The people voting made their own houses illegal but then said their own houses were exempt. They've created an effect where the incumbents own housing that would be illegal for anyone else to create, which helps prop up their home value massively since it artificially raises the price of the substitutive option of building a house.
There are many factors contributing to the housing crisis, not just zoning regulations. That’s why upzoning often coincides with higher prices, rising homelessness, and increased investor ownership.
We are best served by implementing effective public housing policies.
Or just apply the law equally? If you want to vote to increase regulation you agree it applies to your own house. If you're going to impose some $10,000 sprinkler system on the new guy you better be willing to renovate your house too.
Laws generally don’t apply retroactively; they don’t affect actions or events that occurred before the law was enacted due to principles rooted in fairness, legal stability, and practical governance.
Non-retroactivity protects individuals from arbitrary government power, ensures trust in legal systems, and promotes economic and social stability. Without this principle, people could be penalized for past decisions made in good faith, eroding confidence in governance.
> If you're going to impose some $10,000 sprinkler system on the new guy you better be willing to renovate your house too.
What about home building codes affecting structure, e.g. against earthquakes?
I don't follow. USA has made laws, say, that owning most explosives without a tax stamp is illegal (interestingly there is a law that this same stamp is $0 for other weapons which put people in a precarious position of facing 10+ years in prison for not paying a $0 tax). If you happen to already have one before they passed the law, the law still applies to you, just not before the law goes into effect. And they might not even give you the stamp even if you try to pay for it, if you don't pass a check. They won't charge you for the time you had it before the law went into effect. But they will charge you for owning it today without the tax stamp. (Now you can argue that law is unconstitutional, either from the takings clause or 2A but not because it is retroactive).
That's kind of how I see the housing law. It would not be retroactive. It would be, that tomorrow owning a house without a sprinkler system would be illegal. And anyone who possess the house without one is violating the law. And if you don't agree with equal application to everyone, maybe the law should not be there in the first place.
> USA has made laws, say, that owning most explosives without a tax stamp is illegal
I think you're referring to the National Firearms Act (NFA) of 1934 and its treatment of pre-existing explosive devices and destructive devices. It is an interesting example of how retroactive tax laws can affect previously legal property ownership.
What I will say is that retroactive compliance requirements, while controversial, have generally been upheld by courts when applied to dangerous items affecting public safety. The explosives/tax stamp example demonstrates the tension between property rights, retroactive legislation, and public safety regulation.
I don't know that your overall argument that all new building requirements should be applied to all existing properties. Not only would it be incredibly expensive (and probably having an even worse impact on people with less means), but also highly impractical in some instances. Does that make sense?
Certainly we could look at removing parking minimums and having less rigid zoning requirements. I don't see why I shouldn't be allowed to buy a coffee a walk away.
What do you do if the local service is expensive/not very good, and a higher-quality option is a drive away? Do you prefer to live with crappy coffee, drive, or remain ignorant of better options?
I'm in that situation right now. Local medical, restaurant, etc., are not very good, so I drive to the better option.
Some places mitigate to positive effect. One example ia japan where zoning is done nationally to remove nimby power by dluting the hyper local nimby power
>> I feel like there has to be an effort at all layers of government to solve this structural problem where a few homes can derail a democratic process.
What you describe is not a structural problem. On the contrary, it is precisely how a constitutional, rule-of-law system is meant to work.
Democracy does not mean pure majority rule. Our system is a constitutional democracy. Majorities make policy, but minority rights and legal limits constrain how they do it. Courts are there to enforce these limits even when a policy is popular.
Judicial review is part of the design. Reviewing legislative and administrative actions for legality is a built-in check and balance, not a veto by randos. The courts exist to ensure the other branches do not skip required steps or exceed their authorities.
More specifically, the legal concept of "standing" prevents this from being arbitrary. In most contexts, you cannot sue just because you dislike a decision. You must show concrete injury, such as living next to an affected area. That's why a "few households" can file: they're the ones with legally cognizable stakes.
Now, I will grant that in places like California with decades of existing laws, NIMBYs have done an excellent job figuring out exactly what buttons to press and what levers to pull to get their way. But this is not a flaw in the system. It just means that they have read all the manuals (because they are very strong incentivized, financially, to do so) and are now using it competently, even if it is self-serving and sometimes even in bad faith. But other locales have figured out the solutions to this problem. The article gives one such example: Austin, TX.
>> Only to have it all screwed up by 2-3 households that sued, pausing the zoning and throwing a wrench into a lot of new housing construction.
> Democracy does not mean pure majority rule. Our system is a constitutional democracy. Majorities make policy, but minority rights and legal limits constrain how they do it. Courts are there to enforce these limits even when a policy is popular.
When the minority is 20-30 percent you may have a point, when it's 2-3 people then that's just obstructionism.
And yet zoning is just one factor in housing supply. Even successfully implementing upzoning laws can find markets with higher prices, rates of homelessness, and investor ownership of housing - because many factors influence these outcomes not just zoning laws.
Those aren’t comparable. A delay in a standard stick built home would be due to legal issues.
Otherwise, tract homebuilders in the US have metrics of building a brand new house within 100 days.
The labor costs are high, but not that high that construction is delayed due to lack of labor. Land prices and clearing legal hurdles are the bigger problem.
> we argue that high prices have little to do with conventional models with a free market for land. Instead, our evidence suggests that zoning and other land use controls, play the dominant role in making housing expensive.
I’ve not been able to find any, which is not to say there aren’t any, but when you have these conversations the inevitable result is getting called a NIMBY so I tend to abandon them early.
There's a common view that home-ownership is important because a home is the most expensive asset most people will ever own and its increasing value is key to their comfortable retirement. But this view of a home as an appreciating asset is incompatible with increasing housing affordability.
There are definitely downsides to renting such as landlord issues or missing out on mortgage subsidies, but maybe a higher proportion of renters could lead to improvements in affordability. And if the well-off are renting as well, there's also more hope for better legal protections for renters.
People don't say home ownership is important because it's an asset for retirement; if you sold it, you wouldn't have a home in retirement!
They say that because owning a home allows you to reduce your bills, but also more crucially and viscerally because owning a home allows you to be free and have a place that is truly yours to do with what you will. You can paint the walls, have a pet, host a party, knock down a wall and build an extension, do whatever you like to make your mark on it and the world. It's yours and if you will it, it always will be. It's a level of peace and security that's almost incomparible. There's a reason in most of history there was a distinction drawn between bonded peasants and freeholders.
I think you listed great positives for ownership. I would agree with those. But the parent is correct that, at least in the USA, owning a home is considered a financial investment that should appreciate in value. I think treating a house as a financial investment leads to all kinds of bad outcomes, and here we are.
"People don't say home ownership is important because it's an asset for retirement; if you sold it, you wouldn't have a home in retirement!"
It's very common in the USA. A married couple has some kids and buys a house big enough to accommodate them comfortably. 20ish years later, the kids have moved out and the parents don't need such a big house. They also are about to or have recently retired, and they would like to stretch their retirement money. Sell the big house, make a lot of money, and then buy a smaller, cheaper house. In the USA this pattern is pretty common.
It’s all this but don’t underestimate predictability. If you own a home with a fixed rate mortgage you know what your payment is and it doesn’t change. You know where your kids are going to grow up.
Sure you might need a new roof and insurance and taxes fluctuate but that’s a BIG BIG deal as anyone who’s rented and been at the mercy of markets can tell you.
This is even more true now as the rental market (like so many markets) is coming to be dominated by corporate landlord La using revenue extracting software.
> "Buy a home, pay it off, then downsize to generate funds for retirement" is a pretty widespread approach.
[citation needed]
> The majority of retirees don't relocate. A 2015 analysis (the most cited historical data) from the U.S. Census Bureau’s American Community Survey showed that only about 5% of Americans age 55 and older move annually (local or long-distance).
[…]
> A more recent study, from Hire a Helper, showed that in 2024, only 22.7% of all retirees (both new and existing) moved, compared with 25.3% in the year before.
And of the half that say they are moving, half (25% of total) "want their next home to be the same size as their current one, and 22% want it to be larger".
Those are perfectly good reasons and in the hypothetical world of housing affordability such utility should compensate for the depreciation. Similarly many people find value in owning a car despite the nearly guaranteed decline in value. Ideally neither would be viewed as a wealth-building tool.
Also, it’s a risk hedge. In many very populous areas property tax increases are capped.
This allows someone to quite concretely limit their housing costs in retirement (a large portion of anyone’s expenses!) in a way that is impossible in almost any other way. The only other similar types of deals are specific types of rent control in very limited metro areas.
Even if property tax increases are not capped, they are generally a fraction of what the house payment would be. (though after 30+ years of inflation the tax is what the original house payment was)
Generally if you rent your share of property tax in the rent payment is higher than an equivalent house share would be Tenters don't see how property tax affects their rent and so they generally don't oppose property tax increases, if they even bother to vote which they are less likely to. To be fair, how tax affects tax is complex - rent is supply and demand first, things like taxes put a floor on prices and so affect supply but this means it is indirect and so hard to see even though it will catch up eventually.
I recall talking to a real estate guy as a recent high school graduate 25 years ago. He claimed real estate rates will stay above 7-10%. I countered that long term, real estate needs to remain tied to inflation or else all buyers will be priced out.
In a situation of supply scarcity all the market needs to do to function is to sell this limited supply. And this does not require the median citizen to be able to afford this supply. Thus the market isn't even irrational.
> But this view of a home as an appreciating asset is incompatible with increasing housing affordability.
It isn't, but it seems that way. If you pay your house off before/when you retire that means you live rent free (you still have property taxes and maintenance, but they are far cheaper than rent). Social security is the same either way. Your 401k and IRAs have maximum contributions and so again not having to pay rent means your retirement income is effectively higher.
A house as an appreciating asset is only good for retirement if/when you sell - but then you either need to invest that money and pay it out in rent which has also increased, or you need to buy a new house. There is also risk - if you go to a nursing home the house is treated special, but if you sell it the additional money is used to pay the nursing home before government kicks in. Which is to say that for retirement planning house values are meaningless.
An appreciating house is useful if like many people you "cash out refinance" I've seen many people refinance their house every few years to the current house value. They take very nice vacations paid for by the house increase in value. This is all good until they retire and now owe what the house is worth and so they are paying rent with their limited income.
If even a smaller group controlled the supply of something why would that supply decrease in value.
Currently rental prices have to compete with how much effort a boomer wants to put into profiting from their second or third homes, a fair amount but most realize a stress free tenant is better than maximizing profit.
If you remove these independent landlords then it falls to a tiny group of giant orgs that then control the market and can charge whatever price they want.
During most of history, slaves were allowed to purchase their freedom with money they had made on the side. Your argument is the equivalent to saying that maybe it is not worth it, because the price of freedom is too high to be worth it. Sure, that's a way to see it. But another way to see it is that something else is wrong in the situation.
We need to be critically honest about how our system operates.
Land is finite. As population grows, supply and demand dictate it will rise in value if you hold.
If you rent property that someone else would prefer to buy for habitation if made available at market rate, you’re benefiting at overall society’s expense. Similarly if you take units off the market as investment vehicles.
Productivity matters most in economics. Without it you’re just shifting money around. Owning as a middle man is essentially the opposite of productivity.
As rentals become the only option and a small percentage of land owners become the only housing option, we’re going to see a rise in wealthy untethered types who rent and move at will. Similarly, we’ll start seeing ghettos form in the scant land remaining after this fully plays out.
The problem is that you can’t tell an individual who had to go through hell to own a place, on the verge of a second home, not to rent instead of sell. This society is a hammer taking a chip out of every successful shoulder. “Why should I do society a favor when society did me none?” Is a common mindset that just exacerbates the issue.
We’re creating a resentful generation who feel disenfranchised and taken advantage of, and it’s only going to get worse. I fear for uprisings and surveillance states incoming.
For real solutions, bring back work from home. No need for dense housing when you’re not forced to live in a particular area.
> Land is finite. As population grows, supply and demand dictate it will rise in value if you hold.
Nitpick: There is a lot of land. We're not going to run out of it anytime soon. What we are consuming is 'good' land. That definition will depend on a lot of things, of course.
For instance, in Denver, there is a lot of land. It's just that all the land to the west is rugged mountains. Great, so all the land to the east then, plains, right? You can build houses all the way to Kansas! Yes, but all that land is filled with bentonite clay which expands 4x with water (yes really!). You can't build cheap and safe houses on it. So, land values increase as more people move to Denver, simple supply and demand.
This kind of thing is all over the world. You can build more houses just about anywhere, but making these houses safe, cheap, and where you actually want to live, that is the problem.
> My wife and I have been holding Treasury bills for the past few years waiting for mortgage rates or home prices to come down, but neither have. So, we keep rolling Treasuries until the right moment arrives.
Ouch. Holding T-bills instead of equities for the last few years has been incredibly costly for this couple.
What you are not wrong, this is misleading. We can say on hindsight what happened, but there is no way to know in advance it would have happened that way. There have been many times when equities have done very poorly for a short period of time. Any money you plan to spend in the near future should not be in equities, it should be in lower return investments like treasury bills, money market funds, or other similar investments that while they don't offer as good a return on investment also don't suddenly crash losing significant value for a few years.
Their real mistake was thinking the housing market would crash, which while not impossible seemed unlikely to most observers.
The housing market has crashed 2 times within the past ~30 years (90 and 2007). Housing is so over financialized + demographic shifts that it might be merited to expect crashes.
Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity.
Not just in the US. NIMBY looks almost exactly the same in the US, in New Zealand, in Israel, in Italy, in Czechia or in the UK.
Basically, as long as you allow other people to veto new construction, it is almost guaranteed that a few bitter fighters will devote their lives to stopping anything to be ever built again. Roads, trams, housing, anything at all. A veritable vetocracy, not too dissimilar from the legendary Polish-Lithuanian Commonwealth, where every noble could veto anything agreed upon by the Sejm by simply standing up and saying "I disagree".
The "community participation" ideal which looked very positive once turned out to empower the worst reactionaries.
The few countries that got this problem under control did so mostly by limiting the legal abilities of such people to throw wrenches into everything.
The problem with community participation is it can only work when significant numbers of people participate. Most people have too much in life as it is to get involved. On any given night there are 50 different events in my city I could go to - (knitting circle, bible studies, softball, DnD, book club, girl scouts, gymnastics...), plus I have my own hobbies at home I'm trying to work on: I don't have time to attend the community meetings as well - and neither does most people in my community. What is left with the "busy bodies" who decide to make time - but they don't represent the community and shouldn't get input (I went to one: Some women was asking a lot of questions on why the road department decided to not replace a road grader with 14900 hours on it even though the policy was replace it at 15000 hours - that is trying to micromanage the whole county as if the leaders are not competent to make decisions).
Curious to see that no one mentions the drastically rising inequality in western society as the root cause of the housing crises.
What we are seeing to date is a transfer of wealth from the working class, the middle class, and the government to rich people at a rate that is unprecedented in human history. The rich are getting richer at an extremely high rate, and barely any country taxes wealth.
So what you get is multimillionaires and billionaires who get passive income of several million dollars per month. What are they going to do with that money? There is a rule that you should let your money work for you, and so rich people buy: assets, stock, shares.
That’s why the prices of all of these things go up despite living standards falling and falling for ordinary people. We have an asset price inflation, due to the enormous amount of money given to the ultra rich.
Housing prices will never go down unless you tax the rich. Regardless of zoning laws or what not.
If investment was the only major issue, rental inflation would not be high. Rental inflation can only be explained by a lack of housing in areas people want to live.
I didn’t say it was the only factor, I’d never say that. But let’s say for the sake of argument that you are correct, supply is the one and only thing driving rent prices. What sorts of things cause supply shortages?
Once you understand fiat and feel inflation affect your buying power the fact property is an option as an investment at all to normal people is a Godsend.
Like what asset could non-investment savvy people move their increasingly worthless savings into otherwise?
I didn’t really place a value judgement on it, just made an assertion. My personal opinion is that if controlling housing prices is a goal you have to do it outside the market, but that is highly controversial and a non-starter in today’s America. Meanwhile the current orthodoxy of ‘upzoning’ prevails causing real damage to historic areas and mainly benefitting developers as far as I can see.
The umbrella of upzoning often includes relaxing historic review along with neutering enforcement of the same, resulting in the loss of historic structures to make way for new construction.
Ah yes, absolutely. I love historic architecture as much as anybody, but I am not a NIMBY and would prefer affordable housing for current and future members of my community more than I would preserving some particular moment in time for myself.
> Like what asset could non-investment savvy people move their increasingly worthless savings into otherwise?
Investing in businesses bringing jobs and prosperity to their community, their people, their nation.
Or investing in their children to help them start out in life and not live as serfs.
But no, better to lock up all the money into non-producing assets and completely destroy the economy, progress and the birth rate.
There's a reason why during most of history, your welfare in age depended on your children or extending that to your community. Any other system simply eradicates the people participating in it, as we see right now with rapidly diminishing younger generations, to the benefit of the olds.
My wife and I were remarking on this just yesterday. We were driving through a neighborhood of small starter homes, and noting that nobody builds anything like that anymore. A two bedroom one bathroom house is all anybody needs to start out and get into the homeownership game, but the only way to get one is from the constrained supply of old ones.
2br 1bath doesn’t make sense in single family homes. That’s a condo/apartment size residence. Maybe townhome if you live in a low density area.
Condos should be a lot more popular, especially for the young and old, but the fees are pretty much always ridiculous. The whole point is to spread out the maintence costs among many residents so they are trivial, instead condo fees are usually in the hundreds or thousands per month per unit for no apparent reason other than the landlord wants a big payday. It doesn’t cost millions per year to maintain some parking spots, a small unstaffed pool, a front desk, and building maintenance. It’s like paying rent on top of your mortgage.
Grew up in a three bed, one bath, with five people.
Home ownership in the 1950s got you a shoebox. It was affordable. That's why so many got into the equity game. Larger expectations and larger returns have changed the landscape.
If you pay someone to mow your lawn it will costs hundreds per month. Most people just buy a $100 lawn mower and don't count their time (or they count it as exercise) and so don't realize how expensive it is to pay someone to haul a lawn mower (a more expensive commercial model, truck, trailer, play labor - labor isn't just time to mow, but also time to get there and load/unload). There are a lot of other ways that homeowners often are doing labor themselves and saving a lot of money that a condo must pay.
2br 1bath is a fine entry point up until you're looking at a family of 4+ or when you're talking about teenage kids who would want their own rooms. Or retirees who want to downsize, no difference
The idea is that you live there cheaply while building equity for 5 years or so and then trade up to a family house once you are married and looking to settle down.
This comment doesn’t make sense. Are you using condos to refer to properties with shared walls where the whole building (and land) is owned by the condo owners? If so, then there is no landlord getting a big payday.
Condo expenses are what they are because taking care of a big building is expensive, but also because the condo board sometimes defers maintenance for many years or decades, and then the problems become expensive to fix.
Pretty much everyone aspires to have access to more than 1 toilet if the home has more than 1 person in it.
The marginal cost of a home with 2 full bathrooms compared to just 1 bathroom is negligible, and the value and security gained from the convenience and redundancy is immense.
Also, even today, there are tons of small 1,500 sq ft homes on 2,000 sq ft lots built and sold in the western US. It just depends on the local market for land prices and demand for small homes.
Ideally NIMBYs wouldn’t have an incentive to block housing construction because while the total number of houses goes up making the average house cheaper, the land itself gets more valuable due to the increased density/development/amenities; so those same homeowners can sell their lots for bug bucks. I guess this misalignment of incentives is a problem of zoning, permitting, and taxation distorting things?
While I hate the current housing gridlock, these laws represent a classic Chesterton fence. They were enacted precisely because "upzoning" fell heaviest on the poor, minorities, the elderly, and other functionally disenfranchised people.
Since I like sortition, here's a goofy idea... eminent domain should be of two sorts: adverse and voluntary. Voluntary is bought-and-done. Adverse means we pick some other property in a different part of the jurisdiction, at random, and also adversely posses it. To drive the point home, I'd bias the selection to be directly proportional to value, ie, the more valuable, the more likely to be selected. The lock up in the adverse possession should be no less than, say, 25 years, or the lockup on the original possession, whichever is longer.
Upzoning allows the owner to build more than one residence on what was a single family property. This might include removing an existing home to build a duplex or triplex, dividing a house into a duplex, or building an accessory dwelling unit on the property.
Urban renewal was typically the government using eminent domain to raze whole neighborhoods to build low income apartment buildings or some such. This also might include using the "Tower in a park" architecture that was all the rage at the time, but a terrible urban form.
Sure, but by the time upzoning makes it through city council and all the compromises are made it looks a hell of a lot like urban renewal. What else do you call allowing the removal of two historic structures from a city block to make way for another five over two?
It’s very interesting. Based on this theory, stock prices should decrease as interest rates lower.
A massive number of people who are waiting for interest rates to drop will sell their equities to buy a house when it happens. IE, many couples are waiting for lower interest rates before buying a house.
This runs counter to current equities markets where hints of rate drops from the Fed will increase stock price.
rent is expensive too, but cheaper than buying rn. high rent and high purchase price has a second order effect that is relevant to this forum: makes it harder to bootstrap a business.
it feels like every metro that has high innovation (lots of new businesses, creative art, etc) has had cheap housing first generally. SV is an interesting exception but a lot more money is pumped in to allow it?
i don't need an expensive metro to bootstrap what i'm working on. but my partner does for her career. that's the main problem for my situation, at least.
SV had much cheaper housing until the 90s. Not super cheap but it wasn’t until dot.com and then the housing bubble that it got stupid.
SF was more expensive, which is maybe why SV is the burbs.
The cool hippie art scene in SF was in the cheaper higher crime areas, as it usually is. Maybe we need to get those crime rates up to drive down housing costs.
It’s no longer really possible to bootstrap in the Bay Area unless you are doing something nuts like living on couches or cheap shitty boats. It’s too expensive even for modestly funded companies. It’s really just a place for big tech and lavishly funded ventures. If you don’t have a Saudi prince on the cap table your company is better off remote or in another city.
This is what poor people do in latin america, sans the RV. They just buy blocks as they can and add on to it.
This is also exactly what our family did, minus the 'expand' part. We could never afford to buy a house nor get access to credit but we could afford to build a tiny one on shithole land one brick at a time. The great thing is it also more or less works no matter how poor you are, if you die before it is complete your children can continue. Eventually after enough generations enough money is saved to have a house.
Unfortunately, a lot of the intermediate steps are prohibited by code in many locations. You'll get evicted from your own land if you try to live in an RV on it, you can't get a permit for a tiny house, you can't get utilities without a full site plan submitted.
There are places that still allow it. Not enough for everybody to do it. But since there is no 'fad' of doing it right now, not much competition, anyone who might come across my comment and reasonably wishes to do this near a place with jobs can 100% do so.
Most of those places are "middle on nowhere". Location matters in real estate, if I can't get to my job in a reasonable amount of time it doesn't matter what I can do. My job is in Des Moines, if you have me the largest mansion in SF for free (including taxes and utilities) I still couldn't afford to live there (plane tickets would cost me several hundred dollars/day and the flights are 5 hours each way by the time I get to the airport an hour early)
Its legal to live in a box made of packing palletes on the sidewalk and illegal to live in a box of pallets on land you own. perhaps the solution is to build your tiny house on the sidewalk in front of the parcel you bought.
Another thing people do in places like the Big Island (HI) is they drop shipping container houses on worthless lava field land owned under a burner LLC and every time the county gets to them they just burn the LLC and move the container to another lava field. The county/state cannot keep up with it.
This is illegal where I live in the United States. You can't "just build things" here.
Now you could probably do this really far out in the boonies where it could be illegal, but also unenforced. My uncle lives in a log cabin built this way. But it's also extremely far away from civilization (aka: jobs with income, and luxuries like groceries and clean water).
It's illegal in most the US but by selecting my county intentionally from the start I found a place within 20 minutes of a ton of jobs, grocery store, etc. I did it legally with permits, but my permit basically said "ok to build house and no codes/inspections" and that was pretty much the bulk of it.
You have to pick one of the places in the US with little to no codes / paperwork from the beginning. There are still quite a few of them left, but probably not places you have heard of.
do you have running water, electricity, sewage, and a road (whether paved or unpaved) provided by a municipality? or did you have to solve for some of these yourself?
Water - bought share in a private well (cost near zero, well share was unproven but miraculously worked perfectly). Some people haul water.
electricity - private power company. But started on a small cheap generator.
sewage - private septic system (county allows you to DIY build them so could do this for next to nothing)
roads - For miles and miles they are all private dirt roads, but with easements to allow me to pass. The easements go miles until they connect to a county road in town. I first built my road with a shovel, hatchet, and ripping small trees out with a truck.
I agree this is a good plan, but many places make this illegal (Ireland, for instance), because if people weren't forced in to life-long debt servitude to have a roof over their head they might exhibit too much agency.
Are you talking about buying remote, difficult to access land? For most people who want to live within reasonable distance to grocery or hospital, putting an RV or tiny house on a lot is not going to be permitted.
Oof. That's a tough one. In the US you have to get to a pretty high valuation (currently over 13 million dollars) before estate taxes start taking a bite.
> My wife and I have been holding Treasury bills for the past few years waiting for mortgage rates or home prices to come down, but neither have.
I wonder how long people remain in such states. I feel like for something as big as house ownership you need to decide if you really want it and if you do just go for it. How much of your life are you prepared to spend on "getting ahead"? They say "life is what happens to you while you're making other plans".
Their strategy was just bad. Housing prices do drop, occasionally, but waiting for that can take decades. And waiting for mortgage rates to drop is completely unnecessary. Just refinance when they finally do!
This is the current sentiment. But it is short sighted.
The best recommendation is to _know_ the fundamentals of house prices. To know when buying is cheap and expensive.
Eg. in relative terms: buying a house at 30 Price/Rent makes it more affordable to rent - in such an environment, just rent. If the P/R falls to 15-20, then buy.
Housing can also be unaffordable in absolute terms such as wanting to live in down town San Fransisco. In this case people should strongly consider if they want to pay a premium for that locality.
We don't have to go longer back than 2013 to when it made sense to buy over renting - and that will return at some point.
It's your choice to think about such things and therefore it's your choice to be unhappy about it. You can't change the past so you can either be unhappy about it, or not. It's your choice.
The whole economy is gambling, and there is no way not to gamble. When you gamble, you can lose. These people gambled and lost. And the stakes are your life.
If we all could agree that water, food and shelter are the essentials for human survival (which I know that most people here wouldn't agree on), then it's easy to see the absurdity of the so called "society" or "economy" or "system" that the younger generations have been born into. Because it would be the same thing as a person being forced to enter into life long debt in order to obtain drinking water.
How can it be that people can enslave the young generation by the motivation that they were born first and therefore own all the land, but they can't do that with water? Ie: "We were born first and own all the water rights and you have to go into debt slavery the rest of your life if you want to drink water!" Makes just as much sense as the current situation.
Why, after decades of failing against NYMBYs, are people so confident they can have any more success against NYMBYism as a whole? Homes are assets, and as such people and corporations who own homes really don't want them to depreciate, or even stop appreciating. Homeowners own the majority of this country's wealth, and since modern politics are entirely subservient to capital, the current situation makes perfect sense. Thinking it will only take a bit of deregulation to fix this mess seems foolish to me. Whatever the solution is, it will necessarily involve something more radical than tweaking a few numbers on a spreadsheet, and will require front-facing capital interests (something no political party is currently willing to engage in, not the democrats and certainly not the republicans).
NIMBY has proven the issues with it and so there are success. NIMBY started because people like Robert Moses proved what happens when you let some powerful person have too much power. If you (like me) are against NIMBY make sure you don't let things go too far that way - I don't know what is too far
I think if we could make housing affordable again the entire mood of the culture would change. A ton of nihilistic rage driven resentment politics on both sides of the political spectrum would ease up. Young people would no longer be doom spiraling. It would be like the fog lifted and the sun came out.
I pretty firmly believe that high housing prices are destroying civilization. I don’t think that’s hyperbole. I’ve been fond of saying it’s the economic problem in much of the developed world. The, singular. Make housing inexpensive and most of the other stats look at least okay.
We need to choose between real estate equity and literally all other things.
I will say I had my life absolutely destroyed somewhat recently. I thought I landed in my feet alright, till I learned I had basically become a pariah to the housing market. The past few months I’ve found myself more hateful and angry whenever
It’s almost entirely because of my current housing situation. I was not like this a few years ago.
False. Young people always find something to doom spiral about. They have been doing it all my life, and if you read old books you will see it go back much farther.
A side effect that is vastly underestimated in its impact is: the housing racket makes virtually all Western economies vastly more uncompetitive with Asian countries.
With urban areas routinely approaching or, even worse, outright exceeding 50% of net income going away for housing, that's setting a pretty high floor on wages and salaries, and that in turn drives up the price for domestic Things and Services.
And no, building housing will not solve the problem. At all. People keep whacking their cucumber over urbanisation because they deem it to be "cheaper" to provide essential utilities due to effects of scale/density - the problem is, space is still finite and denser housing costs more money to construct, especially once you build higher than the maximum usable height of a fire truck's ladder because now you need to invest into independent rescue/evacuation paths, and once you build above 10-ish (or less, depending on soil type and geological risks like earthquakes) stories you need to dig deep into the ground to build a foundation strong enough to keep the building from damaging during settling. Can't compromise on the fire safety regulations (otherwise all you get is a new Grenfell Tower style disaster), and you can't compromise with physics eithr.
Western countries need to build out essential infrastructure like broadband Internet, mobile phone service and public transit in rural and suburban areas. That's the only path that doesn't rely on utterly insane investments.
It is not "housing" but evictions and demolishion! Homeless people are very good at building new homes, shelters and tents, on any abandoned parking lot, street or park! You can build new home for $100!!!
The problem is their homes get demolished by rich people!!!!
We need better laws to protect people from eviction! It should be illegal to demolish any structure where someone lives!!!!
And we need to abolish police who demolished peoples homes!!!
The alternative to police is not that you get to do what you want. The alternative is that people who have fewer rules than the police are the ones who throw you out.
Sadly structurally the system favors housing incumbents. And it doesn’t take a lot to derail efforts to create more supply.
In my town we spent 8 years of public involvement in rezoning to increase supply and density. Including several city council elections of pro-housing council members elected over more NIMBY ones.
Only to have it all screwed up by 2-3 households that sued, pausing the zoning and throwing a wrench into a lot of new housing construction.
I feel like there has to be an effort at all layers of government to solve this structural problem where a few homes can derail a democratic process.
>structurally the system favors housing incumbents.
Isn't the the case throughout human civilization? And when it's not the case we often call it "conquest" or "colonization"
Yes but the unique piece here is ratcheting up of ever increasing codes, zoning, regulations while grandfathering in the old housing. The people voting made their own houses illegal but then said their own houses were exempt. They've created an effect where the incumbents own housing that would be illegal for anyone else to create, which helps prop up their home value massively since it artificially raises the price of the substitutive option of building a house.
There are many factors contributing to the housing crisis, not just zoning regulations. That’s why upzoning often coincides with higher prices, rising homelessness, and increased investor ownership.
We are best served by implementing effective public housing policies.
The research on upzoning simply does not bear out this conclusion.
Solution: no more codes, zoning or regulations?
Or just apply the law equally? If you want to vote to increase regulation you agree it applies to your own house. If you're going to impose some $10,000 sprinkler system on the new guy you better be willing to renovate your house too.
> Or just apply the law equally?
Laws generally don’t apply retroactively; they don’t affect actions or events that occurred before the law was enacted due to principles rooted in fairness, legal stability, and practical governance.
Non-retroactivity protects individuals from arbitrary government power, ensures trust in legal systems, and promotes economic and social stability. Without this principle, people could be penalized for past decisions made in good faith, eroding confidence in governance.
> If you're going to impose some $10,000 sprinkler system on the new guy you better be willing to renovate your house too.
What about home building codes affecting structure, e.g. against earthquakes?
I don't follow. USA has made laws, say, that owning most explosives without a tax stamp is illegal (interestingly there is a law that this same stamp is $0 for other weapons which put people in a precarious position of facing 10+ years in prison for not paying a $0 tax). If you happen to already have one before they passed the law, the law still applies to you, just not before the law goes into effect. And they might not even give you the stamp even if you try to pay for it, if you don't pass a check. They won't charge you for the time you had it before the law went into effect. But they will charge you for owning it today without the tax stamp. (Now you can argue that law is unconstitutional, either from the takings clause or 2A but not because it is retroactive).
That's kind of how I see the housing law. It would not be retroactive. It would be, that tomorrow owning a house without a sprinkler system would be illegal. And anyone who possess the house without one is violating the law. And if you don't agree with equal application to everyone, maybe the law should not be there in the first place.
> USA has made laws, say, that owning most explosives without a tax stamp is illegal
I think you're referring to the National Firearms Act (NFA) of 1934 and its treatment of pre-existing explosive devices and destructive devices. It is an interesting example of how retroactive tax laws can affect previously legal property ownership.
What I will say is that retroactive compliance requirements, while controversial, have generally been upheld by courts when applied to dangerous items affecting public safety. The explosives/tax stamp example demonstrates the tension between property rights, retroactive legislation, and public safety regulation.
I don't know that your overall argument that all new building requirements should be applied to all existing properties. Not only would it be incredibly expensive (and probably having an even worse impact on people with less means), but also highly impractical in some instances. Does that make sense?
Certainly we could look at removing parking minimums and having less rigid zoning requirements. I don't see why I shouldn't be allowed to buy a coffee a walk away.
What do you do if the local service is expensive/not very good, and a higher-quality option is a drive away? Do you prefer to live with crappy coffee, drive, or remain ignorant of better options?
I'm in that situation right now. Local medical, restaurant, etc., are not very good, so I drive to the better option.
Usually I walk or cycle, because I dislike being around cars. Though sadly other people’s cars make the walk less pleasant.
Some places mitigate to positive effect. One example ia japan where zoning is done nationally to remove nimby power by dluting the hyper local nimby power
...You'd call it a "conquest" for your children to have an easy time finding good housing when they move out?
Their children can get help with a downpayment, maybe even by refinancing their house. It’s others’ children that are classified as a conquest.
>> I feel like there has to be an effort at all layers of government to solve this structural problem where a few homes can derail a democratic process.
What you describe is not a structural problem. On the contrary, it is precisely how a constitutional, rule-of-law system is meant to work.
Democracy does not mean pure majority rule. Our system is a constitutional democracy. Majorities make policy, but minority rights and legal limits constrain how they do it. Courts are there to enforce these limits even when a policy is popular.
Judicial review is part of the design. Reviewing legislative and administrative actions for legality is a built-in check and balance, not a veto by randos. The courts exist to ensure the other branches do not skip required steps or exceed their authorities.
More specifically, the legal concept of "standing" prevents this from being arbitrary. In most contexts, you cannot sue just because you dislike a decision. You must show concrete injury, such as living next to an affected area. That's why a "few households" can file: they're the ones with legally cognizable stakes.
Now, I will grant that in places like California with decades of existing laws, NIMBYs have done an excellent job figuring out exactly what buttons to press and what levers to pull to get their way. But this is not a flaw in the system. It just means that they have read all the manuals (because they are very strong incentivized, financially, to do so) and are now using it competently, even if it is self-serving and sometimes even in bad faith. But other locales have figured out the solutions to this problem. The article gives one such example: Austin, TX.
>> Only to have it all screwed up by 2-3 households that sued, pausing the zoning and throwing a wrench into a lot of new housing construction.
> Democracy does not mean pure majority rule. Our system is a constitutional democracy. Majorities make policy, but minority rights and legal limits constrain how they do it. Courts are there to enforce these limits even when a policy is popular.
When the minority is 20-30 percent you may have a point, when it's 2-3 people then that's just obstructionism.
You should read the rest of my post. The reason it's "2-3 people" is because those 2-3 people are the ones who have legal standing to sue.
And yet zoning is just one factor in housing supply. Even successfully implementing upzoning laws can find markets with higher prices, rates of homelessness, and investor ownership of housing - because many factors influence these outcomes not just zoning laws.
Yes I agree it’s just one factor. It’s necessary but not sufficient.
I think I another huge constraint is construction labor. Which is very tight right now.
I’m reminded we built the Empire State Building in 9 months. I see delays for single family homes causing it to take years.
Those aren’t comparable. A delay in a standard stick built home would be due to legal issues.
Otherwise, tract homebuilders in the US have metrics of building a brand new house within 100 days.
The labor costs are high, but not that high that construction is delayed due to lack of labor. Land prices and clearing legal hurdles are the bigger problem.
Is there an example where upzoning has resulted in reduced housing prices?
Yes, here's an episode of a podcast with the authors of such a paper.
https://www.lewis.ucla.edu/2024/12/11/83-local-effects-of-up...
Yes there is. It’s one of many factors. I did a deep dive years ago before wanting to support the issue locally
IE:
The Impact of Zoning on Housing Affordability https://www.nber.org/papers/w8835
> we argue that high prices have little to do with conventional models with a free market for land. Instead, our evidence suggests that zoning and other land use controls, play the dominant role in making housing expensive.
> an example where upzoning has resulted in reduced housing prices
I found an argument in your paper but no such examples.
I’ve not been able to find any, which is not to say there aren’t any, but when you have these conversations the inevitable result is getting called a NIMBY so I tend to abandon them early.
There's a common view that home-ownership is important because a home is the most expensive asset most people will ever own and its increasing value is key to their comfortable retirement. But this view of a home as an appreciating asset is incompatible with increasing housing affordability.
There are definitely downsides to renting such as landlord issues or missing out on mortgage subsidies, but maybe a higher proportion of renters could lead to improvements in affordability. And if the well-off are renting as well, there's also more hope for better legal protections for renters.
People don't say home ownership is important because it's an asset for retirement; if you sold it, you wouldn't have a home in retirement!
They say that because owning a home allows you to reduce your bills, but also more crucially and viscerally because owning a home allows you to be free and have a place that is truly yours to do with what you will. You can paint the walls, have a pet, host a party, knock down a wall and build an extension, do whatever you like to make your mark on it and the world. It's yours and if you will it, it always will be. It's a level of peace and security that's almost incomparible. There's a reason in most of history there was a distinction drawn between bonded peasants and freeholders.
I think you listed great positives for ownership. I would agree with those. But the parent is correct that, at least in the USA, owning a home is considered a financial investment that should appreciate in value. I think treating a house as a financial investment leads to all kinds of bad outcomes, and here we are.
"People don't say home ownership is important because it's an asset for retirement; if you sold it, you wouldn't have a home in retirement!"
It's very common in the USA. A married couple has some kids and buys a house big enough to accommodate them comfortably. 20ish years later, the kids have moved out and the parents don't need such a big house. They also are about to or have recently retired, and they would like to stretch their retirement money. Sell the big house, make a lot of money, and then buy a smaller, cheaper house. In the USA this pattern is pretty common.
It’s all this but don’t underestimate predictability. If you own a home with a fixed rate mortgage you know what your payment is and it doesn’t change. You know where your kids are going to grow up.
Sure you might need a new roof and insurance and taxes fluctuate but that’s a BIG BIG deal as anyone who’s rented and been at the mercy of markets can tell you.
This is even more true now as the rental market (like so many markets) is coming to be dominated by corporate landlord La using revenue extracting software.
"Buy a home, pay it off, then downsize to generate funds for retirement" is a pretty widespread approach.
> "Buy a home, pay it off, then downsize to generate funds for retirement" is a pretty widespread approach.
[citation needed]
> The majority of retirees don't relocate. A 2015 analysis (the most cited historical data) from the U.S. Census Bureau’s American Community Survey showed that only about 5% of Americans age 55 and older move annually (local or long-distance).
[…]
> A more recent study, from Hire a Helper, showed that in 2024, only 22.7% of all retirees (both new and existing) moved, compared with 25.3% in the year before.
* https://www.kiplinger.com/retirement/retirement-planning/myt...
Lots of folks say they want/plan to downsize though:
* https://www.usatoday.com/story/money/2019/05/21/home-buying-...
And of the half that say they are moving, half (25% of total) "want their next home to be the same size as their current one, and 22% want it to be larger".
Those are perfectly good reasons and in the hypothetical world of housing affordability such utility should compensate for the depreciation. Similarly many people find value in owning a car despite the nearly guaranteed decline in value. Ideally neither would be viewed as a wealth-building tool.
Also, it’s a risk hedge. In many very populous areas property tax increases are capped.
This allows someone to quite concretely limit their housing costs in retirement (a large portion of anyone’s expenses!) in a way that is impossible in almost any other way. The only other similar types of deals are specific types of rent control in very limited metro areas.
That is huge.
Even if property tax increases are not capped, they are generally a fraction of what the house payment would be. (though after 30+ years of inflation the tax is what the original house payment was)
Generally if you rent your share of property tax in the rent payment is higher than an equivalent house share would be Tenters don't see how property tax affects their rent and so they generally don't oppose property tax increases, if they even bother to vote which they are less likely to. To be fair, how tax affects tax is complex - rent is supply and demand first, things like taxes put a floor on prices and so affect supply but this means it is indirect and so hard to see even though it will catch up eventually.
I recall talking to a real estate guy as a recent high school graduate 25 years ago. He claimed real estate rates will stay above 7-10%. I countered that long term, real estate needs to remain tied to inflation or else all buyers will be priced out.
He is doing very well.
Interest rates, or appreciation rates? They are different and I'm not sure which either of you are talking about.
Talking about investment returns.
Looks like you can both be right.
Classic ‘the market can be irrational longer than you can be solvent’ situation if I ever saw one.
In a situation of supply scarcity all the market needs to do to function is to sell this limited supply. And this does not require the median citizen to be able to afford this supply. Thus the market isn't even irrational.
All those tax cuts to the super rich have to go somewhere. Buying up property is one of them.
I don't see how I could ever afford to retire whilst still having to pay rent in the UK.
> But this view of a home as an appreciating asset is incompatible with increasing housing affordability.
It isn't, but it seems that way. If you pay your house off before/when you retire that means you live rent free (you still have property taxes and maintenance, but they are far cheaper than rent). Social security is the same either way. Your 401k and IRAs have maximum contributions and so again not having to pay rent means your retirement income is effectively higher.
A house as an appreciating asset is only good for retirement if/when you sell - but then you either need to invest that money and pay it out in rent which has also increased, or you need to buy a new house. There is also risk - if you go to a nursing home the house is treated special, but if you sell it the additional money is used to pay the nursing home before government kicks in. Which is to say that for retirement planning house values are meaningless.
An appreciating house is useful if like many people you "cash out refinance" I've seen many people refinance their house every few years to the current house value. They take very nice vacations paid for by the house increase in value. This is all good until they retire and now owe what the house is worth and so they are paying rent with their limited income.
I think people tend that think that home ownership is important as people tend to care more about thing they own.
But then again. Now where home ownership is so financialized, people don't dare to do zit out of the ordinary, which again leads to boring cities.
Don't own anything and be happy, kids!
Seriously, the fact this comment is, so far, at the top is mind boggling.
> But this view of a home as an appreciating asset is incompatible with increasing housing affordability.
Historically it's appreciated in the 2-5% range, which is roughly the same as inflation.
* https://www.longtermtrends.net/home-price-vs-inflation/
If even a smaller group controlled the supply of something why would that supply decrease in value.
Currently rental prices have to compete with how much effort a boomer wants to put into profiting from their second or third homes, a fair amount but most realize a stress free tenant is better than maximizing profit.
If you remove these independent landlords then it falls to a tiny group of giant orgs that then control the market and can charge whatever price they want.
That’s why the dynamic is unlikely to change until a large portion of boomers have died out.
Why would it change after the boomers die out? The population age histogram is going to get even more top heavy:
https://www.populationpyramid.net/united-states-of-america/2...
During most of history, slaves were allowed to purchase their freedom with money they had made on the side. Your argument is the equivalent to saying that maybe it is not worth it, because the price of freedom is too high to be worth it. Sure, that's a way to see it. But another way to see it is that something else is wrong in the situation.
We need to be critically honest about how our system operates.
Land is finite. As population grows, supply and demand dictate it will rise in value if you hold.
If you rent property that someone else would prefer to buy for habitation if made available at market rate, you’re benefiting at overall society’s expense. Similarly if you take units off the market as investment vehicles.
Productivity matters most in economics. Without it you’re just shifting money around. Owning as a middle man is essentially the opposite of productivity.
As rentals become the only option and a small percentage of land owners become the only housing option, we’re going to see a rise in wealthy untethered types who rent and move at will. Similarly, we’ll start seeing ghettos form in the scant land remaining after this fully plays out.
The problem is that you can’t tell an individual who had to go through hell to own a place, on the verge of a second home, not to rent instead of sell. This society is a hammer taking a chip out of every successful shoulder. “Why should I do society a favor when society did me none?” Is a common mindset that just exacerbates the issue.
We’re creating a resentful generation who feel disenfranchised and taken advantage of, and it’s only going to get worse. I fear for uprisings and surveillance states incoming.
For real solutions, bring back work from home. No need for dense housing when you’re not forced to live in a particular area.
> Land is finite. As population grows, supply and demand dictate it will rise in value if you hold.
Nitpick: There is a lot of land. We're not going to run out of it anytime soon. What we are consuming is 'good' land. That definition will depend on a lot of things, of course.
For instance, in Denver, there is a lot of land. It's just that all the land to the west is rugged mountains. Great, so all the land to the east then, plains, right? You can build houses all the way to Kansas! Yes, but all that land is filled with bentonite clay which expands 4x with water (yes really!). You can't build cheap and safe houses on it. So, land values increase as more people move to Denver, simple supply and demand.
This kind of thing is all over the world. You can build more houses just about anywhere, but making these houses safe, cheap, and where you actually want to live, that is the problem.
> My wife and I have been holding Treasury bills for the past few years waiting for mortgage rates or home prices to come down, but neither have. So, we keep rolling Treasuries until the right moment arrives.
Ouch. Holding T-bills instead of equities for the last few years has been incredibly costly for this couple.
What you are not wrong, this is misleading. We can say on hindsight what happened, but there is no way to know in advance it would have happened that way. There have been many times when equities have done very poorly for a short period of time. Any money you plan to spend in the near future should not be in equities, it should be in lower return investments like treasury bills, money market funds, or other similar investments that while they don't offer as good a return on investment also don't suddenly crash losing significant value for a few years.
Their real mistake was thinking the housing market would crash, which while not impossible seemed unlikely to most observers.
The housing market has crashed 2 times within the past ~30 years (90 and 2007). Housing is so over financialized + demographic shifts that it might be merited to expect crashes.
Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity.
> Regardless, one should not hold cash in anticipation of a housing crash but in the anticipation of a buying opportunity.
Isn't the housing crash in question also the buying opportunity in question, for many people who have been priced out of the market?
Edit: I'm not implying this is a sound strategy. Just more of a reality.
No, there are plenty buying opportunities without crashes.
A buying opportunity can arise in multiple ways: Eg. realizing that you are willing to move to a cheaper area.
There is plenty of well priced housing - just not on the soil people want it to be on. But in the end, not everyone can have the same address.
Lack of housing is most of what's wrong with __everything__ in the US right now.
Not just in the US. NIMBY looks almost exactly the same in the US, in New Zealand, in Israel, in Italy, in Czechia or in the UK.
Basically, as long as you allow other people to veto new construction, it is almost guaranteed that a few bitter fighters will devote their lives to stopping anything to be ever built again. Roads, trams, housing, anything at all. A veritable vetocracy, not too dissimilar from the legendary Polish-Lithuanian Commonwealth, where every noble could veto anything agreed upon by the Sejm by simply standing up and saying "I disagree".
The "community participation" ideal which looked very positive once turned out to empower the worst reactionaries.
The few countries that got this problem under control did so mostly by limiting the legal abilities of such people to throw wrenches into everything.
Exactly.
The problem with community participation is it can only work when significant numbers of people participate. Most people have too much in life as it is to get involved. On any given night there are 50 different events in my city I could go to - (knitting circle, bible studies, softball, DnD, book club, girl scouts, gymnastics...), plus I have my own hobbies at home I'm trying to work on: I don't have time to attend the community meetings as well - and neither does most people in my community. What is left with the "busy bodies" who decide to make time - but they don't represent the community and shouldn't get input (I went to one: Some women was asking a lot of questions on why the road department decided to not replace a road grader with 14900 hours on it even though the policy was replace it at 15000 hours - that is trying to micromanage the whole county as if the leaders are not competent to make decisions).
Curious to see that no one mentions the drastically rising inequality in western society as the root cause of the housing crises.
What we are seeing to date is a transfer of wealth from the working class, the middle class, and the government to rich people at a rate that is unprecedented in human history. The rich are getting richer at an extremely high rate, and barely any country taxes wealth.
So what you get is multimillionaires and billionaires who get passive income of several million dollars per month. What are they going to do with that money? There is a rule that you should let your money work for you, and so rich people buy: assets, stock, shares.
That’s why the prices of all of these things go up despite living standards falling and falling for ordinary people. We have an asset price inflation, due to the enormous amount of money given to the ultra rich.
Housing prices will never go down unless you tax the rich. Regardless of zoning laws or what not.
Lack of housing is not the primary issue. The problem is the mindset and various incentives to treat property as an investment vehicle.
If investment was the only major issue, rental inflation would not be high. Rental inflation can only be explained by a lack of housing in areas people want to live.
I didn’t say it was the only factor, I’d never say that. But let’s say for the sake of argument that you are correct, supply is the one and only thing driving rent prices. What sorts of things cause supply shortages?
Once you understand fiat and feel inflation affect your buying power the fact property is an option as an investment at all to normal people is a Godsend.
Like what asset could non-investment savvy people move their increasingly worthless savings into otherwise?
I didn’t really place a value judgement on it, just made an assertion. My personal opinion is that if controlling housing prices is a goal you have to do it outside the market, but that is highly controversial and a non-starter in today’s America. Meanwhile the current orthodoxy of ‘upzoning’ prevails causing real damage to historic areas and mainly benefitting developers as far as I can see.
What does “causing real damage to historic areas” mean? Causing damage in what sense?
The umbrella of upzoning often includes relaxing historic review along with neutering enforcement of the same, resulting in the loss of historic structures to make way for new construction.
Ah yes, absolutely. I love historic architecture as much as anybody, but I am not a NIMBY and would prefer affordable housing for current and future members of my community more than I would preserving some particular moment in time for myself.
> Like what asset could non-investment savvy people move their increasingly worthless savings into otherwise?
Investing in businesses bringing jobs and prosperity to their community, their people, their nation.
Or investing in their children to help them start out in life and not live as serfs.
But no, better to lock up all the money into non-producing assets and completely destroy the economy, progress and the birth rate.
There's a reason why during most of history, your welfare in age depended on your children or extending that to your community. Any other system simply eradicates the people participating in it, as we see right now with rapidly diminishing younger generations, to the benefit of the olds.
My wife and I were remarking on this just yesterday. We were driving through a neighborhood of small starter homes, and noting that nobody builds anything like that anymore. A two bedroom one bathroom house is all anybody needs to start out and get into the homeownership game, but the only way to get one is from the constrained supply of old ones.
2br 1bath doesn’t make sense in single family homes. That’s a condo/apartment size residence. Maybe townhome if you live in a low density area.
Condos should be a lot more popular, especially for the young and old, but the fees are pretty much always ridiculous. The whole point is to spread out the maintence costs among many residents so they are trivial, instead condo fees are usually in the hundreds or thousands per month per unit for no apparent reason other than the landlord wants a big payday. It doesn’t cost millions per year to maintain some parking spots, a small unstaffed pool, a front desk, and building maintenance. It’s like paying rent on top of your mortgage.
Grew up in a three bed, one bath, with five people.
Home ownership in the 1950s got you a shoebox. It was affordable. That's why so many got into the equity game. Larger expectations and larger returns have changed the landscape.
If you pay someone to mow your lawn it will costs hundreds per month. Most people just buy a $100 lawn mower and don't count their time (or they count it as exercise) and so don't realize how expensive it is to pay someone to haul a lawn mower (a more expensive commercial model, truck, trailer, play labor - labor isn't just time to mow, but also time to get there and load/unload). There are a lot of other ways that homeowners often are doing labor themselves and saving a lot of money that a condo must pay.
Hundreds per month but spread out over hundreds of units. Yes, condos have expenses, but the fees always seem grossly out of line with reality.
2br 1bath is a fine entry point up until you're looking at a family of 4+ or when you're talking about teenage kids who would want their own rooms. Or retirees who want to downsize, no difference
The idea is that you live there cheaply while building equity for 5 years or so and then trade up to a family house once you are married and looking to settle down.
This comment doesn’t make sense. Are you using condos to refer to properties with shared walls where the whole building (and land) is owned by the condo owners? If so, then there is no landlord getting a big payday.
Condo expenses are what they are because taking care of a big building is expensive, but also because the condo board sometimes defers maintenance for many years or decades, and then the problems become expensive to fix.
Pretty much everyone aspires to have access to more than 1 toilet if the home has more than 1 person in it.
The marginal cost of a home with 2 full bathrooms compared to just 1 bathroom is negligible, and the value and security gained from the convenience and redundancy is immense.
Also, even today, there are tons of small 1,500 sq ft homes on 2,000 sq ft lots built and sold in the western US. It just depends on the local market for land prices and demand for small homes.
Ideally NIMBYs wouldn’t have an incentive to block housing construction because while the total number of houses goes up making the average house cheaper, the land itself gets more valuable due to the increased density/development/amenities; so those same homeowners can sell their lots for bug bucks. I guess this misalignment of incentives is a problem of zoning, permitting, and taxation distorting things?
Some of us are old enough to remember upzoning by its old moniker urban renewal and the damage that was done in its name.
While I hate the current housing gridlock, these laws represent a classic Chesterton fence. They were enacted precisely because "upzoning" fell heaviest on the poor, minorities, the elderly, and other functionally disenfranchised people.
Since I like sortition, here's a goofy idea... eminent domain should be of two sorts: adverse and voluntary. Voluntary is bought-and-done. Adverse means we pick some other property in a different part of the jurisdiction, at random, and also adversely posses it. To drive the point home, I'd bias the selection to be directly proportional to value, ie, the more valuable, the more likely to be selected. The lock up in the adverse possession should be no less than, say, 25 years, or the lockup on the original possession, whichever is longer.
Not exactly the same thing.
Upzoning allows the owner to build more than one residence on what was a single family property. This might include removing an existing home to build a duplex or triplex, dividing a house into a duplex, or building an accessory dwelling unit on the property.
Urban renewal was typically the government using eminent domain to raze whole neighborhoods to build low income apartment buildings or some such. This also might include using the "Tower in a park" architecture that was all the rage at the time, but a terrible urban form.
Sure, but by the time upzoning makes it through city council and all the compromises are made it looks a hell of a lot like urban renewal. What else do you call allowing the removal of two historic structures from a city block to make way for another five over two?
It’s very interesting. Based on this theory, stock prices should decrease as interest rates lower.
A massive number of people who are waiting for interest rates to drop will sell their equities to buy a house when it happens. IE, many couples are waiting for lower interest rates before buying a house.
This runs counter to current equities markets where hints of rate drops from the Fed will increase stock price.
It’s definitely an interesting theory.
Equities markets are largely driven by institutional investors, save for some notable exceptions ("meme stocks").
Unless the theory is that institutional investors are doing the same, it's not that surprising.
rent is expensive too, but cheaper than buying rn. high rent and high purchase price has a second order effect that is relevant to this forum: makes it harder to bootstrap a business.
it feels like every metro that has high innovation (lots of new businesses, creative art, etc) has had cheap housing first generally. SV is an interesting exception but a lot more money is pumped in to allow it?
i don't need an expensive metro to bootstrap what i'm working on. but my partner does for her career. that's the main problem for my situation, at least.
SV had much cheaper housing until the 90s. Not super cheap but it wasn’t until dot.com and then the housing bubble that it got stupid.
SF was more expensive, which is maybe why SV is the burbs.
The cool hippie art scene in SF was in the cheaper higher crime areas, as it usually is. Maybe we need to get those crime rates up to drive down housing costs.
It’s no longer really possible to bootstrap in the Bay Area unless you are doing something nuts like living on couches or cheap shitty boats. It’s too expensive even for modestly funded companies. It’s really just a place for big tech and lavishly funded ventures. If you don’t have a Saudi prince on the cap table your company is better off remote or in another city.
SF had a ton of cheap, low-occupancy warehouses in Soma until the mid-late 2000s. Many have since been renovated into swanky offices.
Buy land. Save.
Put RV on it. Save.
Build utilities. Save.
Build tiny house. Save.
Expand house.
This is what poor people do in latin america, sans the RV. They just buy blocks as they can and add on to it.
This is also exactly what our family did, minus the 'expand' part. We could never afford to buy a house nor get access to credit but we could afford to build a tiny one on shithole land one brick at a time. The great thing is it also more or less works no matter how poor you are, if you die before it is complete your children can continue. Eventually after enough generations enough money is saved to have a house.
Unfortunately, a lot of the intermediate steps are prohibited by code in many locations. You'll get evicted from your own land if you try to live in an RV on it, you can't get a permit for a tiny house, you can't get utilities without a full site plan submitted.
There are places that still allow it. Not enough for everybody to do it. But since there is no 'fad' of doing it right now, not much competition, anyone who might come across my comment and reasonably wishes to do this near a place with jobs can 100% do so.
Most of those places are "middle on nowhere". Location matters in real estate, if I can't get to my job in a reasonable amount of time it doesn't matter what I can do. My job is in Des Moines, if you have me the largest mansion in SF for free (including taxes and utilities) I still couldn't afford to live there (plane tickets would cost me several hundred dollars/day and the flights are 5 hours each way by the time I get to the airport an hour early)
Its legal to live in a box made of packing palletes on the sidewalk and illegal to live in a box of pallets on land you own. perhaps the solution is to build your tiny house on the sidewalk in front of the parcel you bought.
Another thing people do in places like the Big Island (HI) is they drop shipping container houses on worthless lava field land owned under a burner LLC and every time the county gets to them they just burn the LLC and move the container to another lava field. The county/state cannot keep up with it.
Hah, I’ve been half wondering if I could just snatch up a cheap lot somehwhere and fucking camp on it.
I’m sure, in most cases though, it’s somehow made illegal to utilize you’re “owned” property.
This is illegal where I live in the United States. You can't "just build things" here.
Now you could probably do this really far out in the boonies where it could be illegal, but also unenforced. My uncle lives in a log cabin built this way. But it's also extremely far away from civilization (aka: jobs with income, and luxuries like groceries and clean water).
It's illegal in most the US but by selecting my county intentionally from the start I found a place within 20 minutes of a ton of jobs, grocery store, etc. I did it legally with permits, but my permit basically said "ok to build house and no codes/inspections" and that was pretty much the bulk of it.
You have to pick one of the places in the US with little to no codes / paperwork from the beginning. There are still quite a few of them left, but probably not places you have heard of.
Wonderful for people without families/friends/community.
Take some of them with you. Use your savings to visit from time to time.
do you have running water, electricity, sewage, and a road (whether paved or unpaved) provided by a municipality? or did you have to solve for some of these yourself?
Water - bought share in a private well (cost near zero, well share was unproven but miraculously worked perfectly). Some people haul water.
electricity - private power company. But started on a small cheap generator.
sewage - private septic system (county allows you to DIY build them so could do this for next to nothing)
roads - For miles and miles they are all private dirt roads, but with easements to allow me to pass. The easements go miles until they connect to a county road in town. I first built my road with a shovel, hatchet, and ripping small trees out with a truck.
Nothing was provided by the government.
I agree this is a good plan, but many places make this illegal (Ireland, for instance), because if people weren't forced in to life-long debt servitude to have a roof over their head they might exhibit too much agency.
Here's a nice website showing how to build a nice, modest home for under 50k. Too bad it's illegal. https://web.archive.org/web/20210216212333/https://www.irish...
Are you talking about buying remote, difficult to access land? For most people who want to live within reasonable distance to grocery or hospital, putting an RV or tiny house on a lot is not going to be permitted.
> if you die before it is complete your children can continue
If you didn’t have enough finances to complete before you die the land would be lost to inheritance tax at that point in most of the western world.
Oof. That's a tough one. In the US you have to get to a pretty high valuation (currently over 13 million dollars) before estate taxes start taking a bite.
> My wife and I have been holding Treasury bills for the past few years waiting for mortgage rates or home prices to come down, but neither have.
I wonder how long people remain in such states. I feel like for something as big as house ownership you need to decide if you really want it and if you do just go for it. How much of your life are you prepared to spend on "getting ahead"? They say "life is what happens to you while you're making other plans".
Their strategy was just bad. Housing prices do drop, occasionally, but waiting for that can take decades. And waiting for mortgage rates to drop is completely unnecessary. Just refinance when they finally do!
A 20-30 year long monthly reminder that your mortgage payments are significantly higher due to missing the boat. Ouch!
Painful for people that do not expect significant further income increases.
This is the current sentiment. But it is short sighted.
The best recommendation is to _know_ the fundamentals of house prices. To know when buying is cheap and expensive.
Eg. in relative terms: buying a house at 30 Price/Rent makes it more affordable to rent - in such an environment, just rent. If the P/R falls to 15-20, then buy.
Housing can also be unaffordable in absolute terms such as wanting to live in down town San Fransisco. In this case people should strongly consider if they want to pay a premium for that locality.
We don't have to go longer back than 2013 to when it made sense to buy over renting - and that will return at some point.
It's your choice to think about such things and therefore it's your choice to be unhappy about it. You can't change the past so you can either be unhappy about it, or not. It's your choice.
The whole economy is gambling, and there is no way not to gamble. When you gamble, you can lose. These people gambled and lost. And the stakes are your life.
Maybe we should invent a better system.
If we all could agree that water, food and shelter are the essentials for human survival (which I know that most people here wouldn't agree on), then it's easy to see the absurdity of the so called "society" or "economy" or "system" that the younger generations have been born into. Because it would be the same thing as a person being forced to enter into life long debt in order to obtain drinking water.
How can it be that people can enslave the young generation by the motivation that they were born first and therefore own all the land, but they can't do that with water? Ie: "We were born first and own all the water rights and you have to go into debt slavery the rest of your life if you want to drink water!" Makes just as much sense as the current situation.
Why, after decades of failing against NYMBYs, are people so confident they can have any more success against NYMBYism as a whole? Homes are assets, and as such people and corporations who own homes really don't want them to depreciate, or even stop appreciating. Homeowners own the majority of this country's wealth, and since modern politics are entirely subservient to capital, the current situation makes perfect sense. Thinking it will only take a bit of deregulation to fix this mess seems foolish to me. Whatever the solution is, it will necessarily involve something more radical than tweaking a few numbers on a spreadsheet, and will require front-facing capital interests (something no political party is currently willing to engage in, not the democrats and certainly not the republicans).
NIMBY has proven the issues with it and so there are success. NIMBY started because people like Robert Moses proved what happens when you let some powerful person have too much power. If you (like me) are against NIMBY make sure you don't let things go too far that way - I don't know what is too far
I think if we could make housing affordable again the entire mood of the culture would change. A ton of nihilistic rage driven resentment politics on both sides of the political spectrum would ease up. Young people would no longer be doom spiraling. It would be like the fog lifted and the sun came out.
I pretty firmly believe that high housing prices are destroying civilization. I don’t think that’s hyperbole. I’ve been fond of saying it’s the economic problem in much of the developed world. The, singular. Make housing inexpensive and most of the other stats look at least okay.
We need to choose between real estate equity and literally all other things.
I will say I had my life absolutely destroyed somewhat recently. I thought I landed in my feet alright, till I learned I had basically become a pariah to the housing market. The past few months I’ve found myself more hateful and angry whenever
It’s almost entirely because of my current housing situation. I was not like this a few years ago.
> Young people would no longer be doom spiraling
False. Young people always find something to doom spiral about. They have been doing it all my life, and if you read old books you will see it go back much farther.
A side effect that is vastly underestimated in its impact is: the housing racket makes virtually all Western economies vastly more uncompetitive with Asian countries.
With urban areas routinely approaching or, even worse, outright exceeding 50% of net income going away for housing, that's setting a pretty high floor on wages and salaries, and that in turn drives up the price for domestic Things and Services.
And no, building housing will not solve the problem. At all. People keep whacking their cucumber over urbanisation because they deem it to be "cheaper" to provide essential utilities due to effects of scale/density - the problem is, space is still finite and denser housing costs more money to construct, especially once you build higher than the maximum usable height of a fire truck's ladder because now you need to invest into independent rescue/evacuation paths, and once you build above 10-ish (or less, depending on soil type and geological risks like earthquakes) stories you need to dig deep into the ground to build a foundation strong enough to keep the building from damaging during settling. Can't compromise on the fire safety regulations (otherwise all you get is a new Grenfell Tower style disaster), and you can't compromise with physics eithr.
Western countries need to build out essential infrastructure like broadband Internet, mobile phone service and public transit in rural and suburban areas. That's the only path that doesn't rely on utterly insane investments.
It is not "housing" but evictions and demolishion! Homeless people are very good at building new homes, shelters and tents, on any abandoned parking lot, street or park! You can build new home for $100!!!
The problem is their homes get demolished by rich people!!!!
We need better laws to protect people from eviction! It should be illegal to demolish any structure where someone lives!!!!
And we need to abolish police who demolished peoples homes!!!
And BLM haters!!!!! Decolonization!!!
The alternative to police is not that you get to do what you want. The alternative is that people who have fewer rules than the police are the ones who throw you out.