Construction has kept rent in Chongqing, China to $75 a month

https://www.nytimes.com/2019/04/11/world/asia/chongqing-china-employment-ford-youth.html

by CryptoPunk • 7 years ago

245 252 7 years ago

nytimes.com

lquist• 7 years ago

Wait so you’re telling me that increasing real estate supply can help control rent inflation!? SF take note

TomMarius2• 7 years ago

Don't tell them it's a law of economics, they might want to try to vote to change it

hackeraccount• 7 years ago

Funny that a communist country is demonstrating supply and demand curves.

Bayart2• 7 years ago

I don't think anybody would call China "communist" beyond a symbolic level.

yardie• 7 years ago

In China the people definitely do not control the means of production. The party controls that.

onetimemanytime• 7 years ago

Communist? NOPE. See all the billionaires and social classes in China. Dictatorship dressed up as communism, yes.

The current ruling class in China is very aware that people need to be happy with basic necessities or else.... That's all.

qaq• 7 years ago

Why would real estate owners acting in their own self interest want that ? The funny thing I notice is that the left rhetoric evaporates as soon is it has a chance to affect valuation of persons own assets.

njepa3• 7 years ago

It isn't just supply though, but essentially inequality. Chinese cities have completely different demographics than western cities. If you want to live somewhere popular in China rents, and real estate values, are rapidly increasing.

Housing isn't like manufactured goods where the marginal cost decrease the more you make. Since the more you build in one area the less available space there is. If you want to decrease cost you have to supply more space.

Still that is only the supply side. As long as there are people, or even an increase of people, that are willing to pay it never becomes affordable even if there are comparable.

hellcow• 7 years ago

Housing isn't like manufactured goods where the marginal cost decrease the more you make. Since the more you build in one area the less available space there is. If you want to decrease cost you have to supply more space.

This was probably true in 1750, but today you can build up. A 2000 SQ foot home can become a 40,000 SQ foot tower.

bufferoverflow• 7 years ago

You supply more by building up. Or even down, but that's a lot more expensive.

seanmcdirmid10• 7 years ago

Rents aren’t increasing that rapidly compared to real estate prices. There is a lot of slack supply as far as rentals go, to the extreme that many speculators don’t even bother renovating their properties for the rental market.

zanny5• 7 years ago

Increasing density is optimal for everyone and the environment. The more spread out we are, the more inefficiencies there are in our infrastructure, in our environmental footprint, and in the inconvenience of getting places when they are further apart.

Its purely cultural, but its burning trillions of dollars a year in maintenance, wasted time, and wasted potential.

ww520• 7 years ago

False comparison to SF. Build dense highrises in the middle of nowhere of course make the rent cheap. The dense highrises in the middle of Shanghai would have outrageous rent. Desirable places are always expensive.

ackbar03• 7 years ago

I think that kind of breathing room is also important for fostering entrepreneurship. I moved to China from Hong Kong, you do have some people bumming around but you also have some pretty bright people who quit their jobs to really grind and work on a business idea. I can't imagine doing that in hk, pretty soon your just priced out of soaring rent and cost of living

tim3332• 7 years ago

I stayed in Guangzhou and was struck by how differently they'd handled housing compared to London or SF. Basically there were a lot of approx 35 story similar tower blocks and most people used public transport/taxis rather than having cars. There's really no reason why London/SF couldn't do that apart from government policy. I live in London and like it but wonder if having all the property being some silly multiple of wages is the best way to do things.

This kind of stuff https://www.scmp.com/magazines/post-magazine/article/1761639...

You'd want to put them in kind of nondescript areas to avoid taking out the historic stuff as mentioned in the article and maybe pay out 50% above market to existing buildings in the way so they are not too pissed off but it could be doable.

lazyjones• 7 years ago

You'd want to put them in kind of nondescript areas to avoid taking out the historic stuff as mentioned in the article and maybe pay out 50% above market to existing buildings in the way so they are not too pissed off but it could be doable.

And, presumably, they'd be as cheap as possible, leading to higher probability of hazards like at Grenfell Tower?

baybal24• 7 years ago

Read the backstory. Isocyanate foam maker lobbied cheaper rockwool makers out of the country in UK, with all blessings from the "elites"

tonyedgecombe• 7 years ago

The council spent quite a lot of money on Grenfell tower, I seem to remember it worked out at £66K per flat.

tim3332• 7 years ago

I was thinking more medium quality. A lot of London stuff seems to either be bad council construction or £1m+ extra lux.

sgt1014• 7 years ago

24 floors (like Grenfell) will not happen again in London - at least in our lifetimes, foam or no foam, bad redesign or no redesign or one staircase or two. High residential is gone. On the other hand 8 to 12 floors is pretty dense and requires less surrounding space and infrastructure so works out quite well.

What's needed in London is a change in the development law that mandates 3 good sized bedrooms, two baths and one large living / cooking area. This would provide liveable accommodation for families and would chop out the drivers for a house at any cost.

madengr• 7 years ago

Soviet bloc housing; no thanks. That is the end result of government policy.

kzcqt• 7 years ago

This is very classist. Everybody should have the opportunity of living in a big city, especially given that that's where the jobs are (and it's only going to get worse every year).

Cerium• 7 years ago

I have spent some time living in one of these tall thin Chinese towers. They have benefits that are not at apparent at first glance. Since they are thin every room can have a window and they have good airflow. Since they are high density public transport can be very close, and catching a taxi is easy.

mikeash2• 7 years ago

The difference is that nobody would be forcing you to live in one.

Note that sprawling suburbs with identical single family houses and lawns controlled to the inch by HOAs are also the end result of government policy.

wongarsu2• 7 years ago

That is the end result of government policy.

Everything is the result of government policy. Even if the government did absolutely nothing, it would be the result of a government policy not to intervene.

trophycase• 7 years ago

Having seem them in person in China, they very much resembled bloc houses. 3x3 pr 4x4 squares of identical apartment buildings, and it seemed like there were miles and miles of these

rayiner2• 7 years ago

You'd want to put them in kind of nondescript areas to avoid taking out the historic stuff as mentioned in the article

It’s amusing to suggest there is “historic stuff” in SF, as there is in China. I saw a “historic” building with a plaque in Palo Alto. It was constructed in the 1900s! Like, after my grandfather was born.

Historical preservation is stealing from the future. If I had my druthers, the opportunity cost of designating buildings or areas as historic would come directly out of the pockets of the preservationists.

peteretep• 7 years ago

It’s amusing to suggest there is “historic stuff” in SF, as there is in China

It’s amusing to suggest there’s historic stuff in China, as there is in Europe. I saw a “historic” building in China. It was constructed in 1600s! Like, 400 years after the bar I used to work in started.

It’s amusing to suggest there’s historic stuff in Europe, as there is in Egypt. I saw a “historic” building in the UK. It was constructed in the 900s! Like, 4,000 years after the pyramids were built!

etc etc etc

That there’s older shit elsewhere doesn’t remove the historicity of anywhere else

PaulHoule• 7 years ago

I dunno.

As an Northeasterner, I am amused at the poor condition of single-story commercial buildings in California, particularly Los Angeles.

You don't see many buildings of that type built before 1970, particularly in New England, because they are poorly built and the roof starts to leak at some point. In the Northeast that is reason to rebuild, in LA you can probably manage a leaky roof with a bucket for much longer.

jdhn• 7 years ago

Historical preservation is stealing from the future.

There definitely needs to be more barriers when it comes to designating places and areas as historical, but this is a pretty harsh take.

loktarogar2• 7 years ago

Australia as a country was founded in 1901, so there's plenty of historic stuff from that era over here (it was only settled by europeans 113 years before that, so there's a very small window for historic buildings)

thatfrenchguy• 7 years ago

Yeah let’s destroy all the cute neighborhoods which makes San Francisco one of the only beautiful cities in the US, and forget about prop 13.

dragonwriter3• 7 years ago

Historical preservation is stealing from the future.

Historical preservation is sacrificing for the future. It's literally the exact opposite of stealing from the future

sgt1014• 7 years ago

On the other hand, once it's not preserved the future never gets to see it. So you could say that the cultural cost of removing the past should come out of the pockets of the developers.

AnthonyMouse3• 7 years ago

If I had my druthers, the opportunity cost of designating buildings or areas as historic would come directly out of the pockets of the preservationists.

The easiest way to do this would be to require consent of the current owner to designate a building as historic.

Then if you want to designate a building as historic but you don't actually want to own it, no problem, you buy the building, designate it as historic and then sell it again. The difference in value before and after comes out of your pocket.

BurningFrog4• 7 years ago

There are some things that should genuinely be historically preserved.

But overwhelmingly it is a pretext for NIMBYism as part of the overall strategy for always having an excuse to not build anything anywhere.

michaelmrose• 7 years ago

Historic value is what out of the multitude of current things that people in the future find worth keeping.

The only way to tax "historic value" would be to put a sliding scale tax on things in proportion to their subjective quality and incentivize garbage that nobody thinks anyone will want 20 years from now.

csomar4• 7 years ago

Historical preservation is stealing from the future.

No, it is not. SF problem can be fixed with a few blocks. A 35 stories building with 1 bed-room condos can host up to 700-1000 persons. I'd bet lots of SF tech developers will opt for a very small high tech condo with amenities (pool, gym, library...) than the crap that is right now.

Say you build a hundred of these. That's 100K person and more than 10% of the population of San Fransisco. You plot the land 10 miles south of the downtown. You make a fast, efficient and new subway that connect from the plot to the downtown.

It is easy considering that the Chinese, Korean, and Japanese are doing it everyday. SF has the money, land and tech to do it.

crdb• 7 years ago

You'd want to put them in kind of nondescript areas to avoid taking out the historic stuff as mentioned in the article and maybe pay out 50% above market to existing buildings in the way so they are not too pissed off but it could be doable.

Already exists, see e.g. Croydon. Yes, not in Zone 1, but 14 minutes to London Bridge by Thameslink, about the same time it took me to go from South Kensington to Westminster/St James in the early 2000s and probably without having to wait out a couple trains at rush hour due to lack of space within.

microcolonel2• 7 years ago

Of course, if you had to deal with the incredibly poor quality of this housing for much time, you'd probably change your mind.

reaperducer6• 7 years ago

I'm not sure why you're being downvoted. The construction quality in mainland China is terrible.

I've witnessed a lot of it, myself, but this video was posted on HN a couple of days ago:

https://www.youtube.com/watch?v=XopSDJq6w8E

As bad as that is, it only scratches the surface because they didn't actually go inside any of the buildings. It would be unimaginable for a building outside of the Chinese bubble to literally start collapsing upon itself after standing on its own for only three years.

ubercow132• 7 years ago

The quality of housing many people can afford in London can be pretty terrible too, in its own way

reaperducer6• 7 years ago

There's really no reason why London/SF couldn't do that apart from government policy.

Well, that "government policy" is the will of the taxpayers and voters who want to decide what happens to the city they live in and not just accept that living conditions imposed upon them by some bureaucrat. People in Guangzhou may be accustomed to living in Sim City, but that's not how it works in a democracy.

Personally, I've been to all three cities, and I wouldn't want to live in Guangzhou, compared to London or San Francisco.

People aren't robots to be warehoused.

TACIXAT• 7 years ago

You frame nimbyism and protectionist housing policies as the will of the people, but I'd take a Chinese city with clean air over 3400 / month in a second. SF housing is broken, I would not put it on a pedestal of being some grand embodyment of democracy.

nitrogen3• 7 years ago

People aren't robots to be warehoused.

Heh, that's how I would describe much of the SF market in comparison to the (better designed subset of) suburbs. An apartment in SF that is anything more than a place to park one's sleeping corpse is quite expensive.

zanny5• 7 years ago

I'd massively prefer to live on the 25th floor of block apartments with public transit access for $100 a month than to have no such option and be forced to toil a quarter of my adult life to have way more space than I want or need.

BurningFrog4• 7 years ago

But what if, compared to London or San Francisco, places like Guangzhou are the only places normal people can afford to live in?

dragonwriter3• 7 years ago

There's really no reason why London/SF couldn't do that apart from government policy. I live in London and like it but wonder if having all the property being some silly multiple of wages is the best way to do things.

But Guangzhou has a much higher property price to income ratio than either London or SF. So, the policy you suggest doesn't fix the problem you raise.

https://www.numbeo.com/property-investment/in/Guangzhou

https://www.numbeo.com/property-investment/in/San-Francisco

https://www.numbeo.com/property-investment/in/London

evancox1002• 7 years ago

But the higher prices in Guangzhou could be due to a much higher "maximal use" value from allowing denser development. If the property is 2x as expensive but holds 6x as many units (30 story tower in article vs typical 5 story American midrise), then that's a win. That type of cookie cutter high rise is very common in many Chinese cities. They will plop down several of these towers in the same area, typically 10+ stories, with few burdensome restrictions on parking and elevators. Can't speak to London, but I was blown away when visiting SF just how little dense development there was in most of the city, and how little new construction there was even of midrise buildings.

alexandercrohde• 7 years ago

Well, London and SF are historic and beautiful cities (at least architecturally). Part of the reason people WANT to live there is because they aren't full of skyscrapers and megacorporations.

In fact, one of the defining traits of San Francisco is that it disallows chain restaurants, walmarts, etc. It also has many parks. When I see a stone church that has stood for 200 years in a city, I think it's priceless.

If you don't, well there's plenty of cities that don't give a crap about aesthetics at all, and so they're cheap, and so they're full of poor people, and so they're full of crime.

wbl• 7 years ago

And SF isn't?

woah• 7 years ago

Your argument is that affordable market rate housing allows poor people to live in a city, which you don’t want?

I think we’ve found the world’s most honest NIMBYist!

ema2• 7 years ago

Wouldn't it be much more efficient to require a minimum income/wealth of would be residents and so lower the demand for housing enough that all these rich people can invest into something more productive than real estate?

justforyou• 7 years ago

Megacorporations are actually the reason SF has become the real estate nightmare that it is -- but hey, no poor people.

When a city makes decisions that don't favor its residents, it becomes an unaffordable haven for transplants, speculators and people who value the facade of the 200 year old stone church as opposed to the poor people the church was created to serve/bilk.

ComputerGuru2• 7 years ago

Well, London and SF are historic and beautiful cities (at least architecturally)

One is not like the other.

Seriously. You can't compare any American city with a European counterpart from a "historic" perspective.

bobthepanda• 7 years ago

Presumably you need some people to be poor in every metropolitan area, because six figure software developers are not going to scrub the office floors after hours or serve brunch. Without poor people basic services start falling apart, and they have to live somewhere.

thaumasiotes2• 7 years ago

one of the defining traits of San Francisco is that it disallows chain restaurants, walmarts, etc.

For very narrow values of "chain restaurants, walmarts etc." Target is basically the same thing as Wal-mart. Chain restaurants are common. (For example, I used to eat lunch at a nearby Jimmy John's, a sandwich chain from Illinois. Which Jimmy John's I ate at might vary; there was more than one nearby.) There's a Starbucks on every block.

gurumeditations• 7 years ago

You must be kidding if you’re suggesting SF isn’t full of crime and poor people. It’s a city known for being full of bussed-in homeless lining the streets, covered in shit and used needles, where you can expect to have your car broken into on a regular basis.

This speaks to a much larger problem. As opportunity concentrates in dense areas, the lucky few elite will try their hardest to keep it all to themselves, one way being by hoarding it in an artificially-low population city like SF. Eventually they’ll start building a wall to keep the undesirables out, or have police harass everyone who isn’t driving a luxury vehicle like in Marin.

badpun2• 7 years ago

Part of the reason people WANT to live there is because they aren't full of skyscrapers and megacorporations. When I see a stone church that has stood for 200 years in a city, I think it's priceless.

I think that actually there are megacorporations in SF (or within commuting distance in the Valley), and they are the reasons people want to live here. I see no less than 6 historic churches out of my window in a historic city in Poland, and yet rent is $300 a month and no one wants to move here. Why? No megacorporations.

hw• 7 years ago

If SF really gave a crap about aesthetics, they would tax residents like you in order to clean up its streets and build affordable housing (hello skyscrapers) for the homeless people who are ruining the aesthetics of such a 'beautiful' city. Good luck bringing your kids to one of the 'many parks' in the city to play without being worried about getting pricked with a used needle hidden in the grass, or walk to that beautiful 200year old stone church without getting harassed by the homeless.

SF is overrated. The reason you would pay $3000 for a tiny studio is because commuting into the city to work for one of the megacorporations is untenable. There are much nicer places to live in the Peninsula and South Bay, or even in other states.

Simon_says• 7 years ago

When I see a stone church that has stood for 200 years in a city, I think it's priceless.

Meh. When I see it, I see a monumental squandering of human labor.

didibus• 7 years ago

You'd want to put them in kind of nondescript areas to avoid taking out the historic stuff as mentioned in the article

You mean like the Projects?

I feel like that's been done before and failed.

dmoy2• 7 years ago

Projects failed for a lot of reasons, not simply because they were high density housing.

drugme2• 7 years ago

It isn't a simple matter of "paying people" to get them out of their homes. You have to force them out via eminent domain. And not only that, rewrite your laws to extend the powers of eminent domain well beyond their current scope -- which in most jurisdictions almost certainly do not cover the scale of forced redevelopment and mass evictions you are imagining.

You'd want to put them in kind of nondescript areas

These neighborhoods aren't "nondescript" to people who have been living there for generations. And your apparent obliviousness to this central fact goes to the heart of the matter of why redevelopment politics are so contentious in many cities.

BurningFrog4• 7 years ago

It isn't a simple matter of "paying people" to get them out of their homes. You have to force them out via eminent domain.

Nonsense.

If zoning was changed so large housing buildings became legal, existing home owners in prime locations could become very rich selling to skyscraper developers. Or even build tall buildings of their own.

All experience indicates that people with a chance to become very rich will take that chance.

sologoub3• 7 years ago

To make these liveable, you have to have very strong central planning. Many former/currently communist cities look like this with varying height.

In Moscow for example, new apartments tend to be 25-40 stories high. However, they have large offsets from the street, are not built “shoulder to shoulder” with neighbors and generally developments from inner courtyards that are big enough to have parking and a soccer field.

There’s also a phenomenon of what locals call “pinpoint development”, where some unscrupulous developer will try to stick a tower in these courtyards and ruin the setup for everyone.

Contrast that with SF or NYC - you hardly have open plots of lands and everything is one giant wall of buildings.

writeslowly• 7 years ago

NYC does this through zoning regulations. Older buildings were typically designed with setbacks [1]. After zoning code changes in the 1960s most buildings became tall boxes attached to open plazas or low rise buildings instead.

[1] https://en.wikipedia.org/wiki/1916_Zoning_Resolution

nine_k• 7 years ago

Moscow did a very similar thing in 1990s and 2000s, allowing to build huge swathes of 25-32 story buildings. It allowed for quite accessible mortgages, with the cost of the buildings being moderate.

It did allow for significant growth. It also put a lot of strain on public transportation.

mr_toad• 7 years ago

How many of your politicians national and local own multiple residential properties?

If England is like New Zealand guess it’s close to 100%

baybal24• 7 years ago

Some times I feel that HN is a real estate forum. People, why are you so crazed about housing? :)

I have following thing to say about real estate in China as a person who's been going in and out of China for last 12 years: conventional supply and demand economics fail to rationally explain the market, alike many other things in the country.

There are big cities with really constrained supply, not unlike California, and still having low rents, and there is Shanghai, with new suburbs and microdistricts popping up every year, but still having highest rent in China despite high vacancy rate even in the city centre.

Housing in China is also a very emotionally charged topic. A lot of status connotation is attached to it, and there is peer pressure like "no wife for you without a house."

Most Chinese I meet can't conceal their bemusement when they see foreigners being so unconcerned with housing issue. These people don't know that in most of the world, renting an apartment, and moreover luxury one, is more expensive than paying for mortgage, and are utterly shocked when I show them the digits. Chinese don't realise just how blessed they are with low rents.

And yes, there are still Chinese out there who are shocked discovering that "most Americans are still living in wooden houses," and that ones who live there tend to be richer than ones buying highrise apartments.

sampo• 7 years ago

conventional supply and demand economics fail to rationally explain the market

This is true for SF Bay Area as well.

AmericanChopper• 7 years ago

Conventional supply and demand economics perfectly explains both of these situations. SF has a massive under supply of housing, and restrictive zoning rules that prevent supply from increasing. China centrally funds huge amounts of developments, and many of those developments aren’t met with massive demand, so they end up with a lot of real estate that they struggle to give away in some situations.

seanmcdirmid10• 7 years ago

Beijing isn’t as hot as Shanghai real estate wise, but I could never get my head around how an apartment that would sell for a million dollars would rent out for just 10k RMB/month. Why would anyone even bother buying with such lousy rent to sale ratios?

Anyways, I saved a lot on rent during my 9 years in China.

EZ-E• 7 years ago

Why would anyone even bother buying with such lousy rent to sale ratios?

Speculation. Prices have been going up at crazy rates for years. Something like 10% a year isn't uncommon. Millions of people got rich just buying and selling few years later. That, and the necessity to buy before marriage that forces people to stop renting.

I don't envy them. Some people spend up to 70% of their income into 30 year mortgages, based on pure conviction that housing prices will always go up.

reaperducer6• 7 years ago

Why would anyone even bother buying with such lousy rent to sale ratios?

You weren't a tenant. You were a placeholder.

Your function was to pay enough money for the owner to pay the property taxes and maintenance until the value of the home rose to a level where it was worth selling.

I live in such a place. The Chinese woman who owns my house is just waiting for the market to reach the right price point where she can sell.

In the meantime, my function as a renter is to keep the place clean and safe and do basic maintenance. That's not what's spelled out on the lease, but at an abstracted level, I know that's what I am to her.

dis-sys4• 7 years ago

most Americans are still living in wooden houses

that is pretty much an American thing, e.g. in Sydney, people don't buy wooden match boxes, they prefer double brick federation home or californian bungalow.

mcguire3• 7 years ago

You could try to explain the last point with "imagine never having to listen to your neighbor's stereo at 2:00 in the morning.

mixmastamyk4• 7 years ago

Re: economics, not an expert obviously but would guess that China interferes as much give or take as California in the housing market.

AFascistWorld• 7 years ago

Using Chongqing as example is kinda cheeky, it's a west side big city, but a rare one in which speculators haven't found the runaway success seen in other ones.

seanmcdirmid10• 7 years ago

Chongqing is crazy overbuilt, which is weird since everything is so hilly there (think Seattle or San Francisco and then add even more hills). A lot of the speculation is along the lines that China is quickly urbanizing and farmers will eventually buy these apartments, but the farmers aren’t really rich enough to support the returns the speculators are looking for.

Chengdu is probably in a similar boat to Chongqing. Well, any tier 2 city actually.

dis-sys4• 7 years ago

Well, any tier 2 city actually.

Just came back from Hangzhou, the entire city is flooded with people in their early 20s. I think the speculation is mainly on those annual 10 million university graduates joining the workforces. Farmers are not going to buy those apartments in tier-2 cities, their sons/daughters with university degrees sometimes at postgraduate level are the ones buying.

bearjaws• 7 years ago

Wow when you don't treat housing as an investment it turns out that prices reach sane levels? Who knew?

xvedejas• 7 years ago

It's impossible to treat housing as an investment when so much is being built every year. There's no scarcity. In Japan, and probably also China, houses are depreciating assets.

zanny5• 7 years ago

There is tremendous housing scarcity where housing is scarce and in demand, such as with transit access to major metro areas.

The depreciating housing is in places people don't want to live. In general modern societies are centralizing in cities to a degree never before seen, but that migration is stymied by catastrophic amounts of NIMBYism and regulation holding back density.

In Tokyo most properties don't depreciate that much if at all, and modern Japanese building code means new structures are much more permanent and last longer. It takes time for the culture to shift as with all things, but the Tokyo metro won't stay contrarian to every other metro for long - its been trending away from the always-deprecating building for over 30 years now.

zanny5• 7 years ago

People are going to treat housing as an investment so long as government institutions artificially constrain it to such a preposterous degree that you can exploit unmet demand in perpetuity.

Even in China precincts with more recognized property rights will see this effect where even on massive government works projects contractors just build around holdouts whom can exploit the growing demand for the land they are on.

CryptoPunk• 7 years ago

Plenty of people in China treat housing as an investment. There is an over-supply of investment and development, leading to an abundance of units and affordable rental rates.

Preventing people from profiting by supplying the market (aka treating the good in question as an investment) leads to shortages and high prices, as the history of rent control amply demonstrates. Anecdotally, San Francisco has had some of the most stringent rent control laws in the US over the last 50 years and today has the highest rental rates in the world.

swiley3• 7 years ago

China treats it like an investment. In fact it's probably typical Chinese speculation (that is the creation of fantastic bubbles) driving the construction of these large buildings.

mensetmanusman• 7 years ago

It’s illegal to treat housing as a generational investment in China; after 100 years it goes to the state.

nwah1• 7 years ago

A construction boom is great, but temporary. Best way to ensure housing isn't treated as an investment or speculative commodity is to have a tax on land value.

Unfortunately, this view is very unpopular in the US, particularly among the most powerful special interests and voting blocs.

quotemstr2• 7 years ago

Of course housing is subject to the iron law of supply and demand. It's remarkable that so many people find seemingly-reasonable justifications for denying it.

There must be a name for this pattern, which occurs in areas of life as varied as technical debates, climate science, and health. The common thread is that there's some strong effect that smart people would prefer not to be true and that these smart people spend an inordinate amount of time and social capital finding seemingly-rational justifications for denying this strong effect. The result of this high-IQ motivated reasoning is an impenetrable mess of dueling blog posts, cherry-picked studies, and sophisticated personal sniping that leads regular people to throw their hands up in confusion and do nothing.

An example of this effect: the "zombie claim" (an idea that keeps circulating after being debunked, mostly because it's rhetorically useful) that building housing doesn't decrease prices because developers build only high-end housing. Granted, this effect might be true for very limited times under very limited circumstances in some special region of the supply curve, but it's clearly not a general principle. But there are just enough studies purporting to show this effect that people who want to block housing in general can point to some official-looking LaTeX-typeset thing and say "Look! Economics proves that construction doesn't lower prices!". By the time someone gets around to reading that article and commenting, "if you read beyond the abstract, the article it doesn't say that...", someone's already made some other blog post with the same discredited idea. It goes on and on and on and on and on.

I've become increasingly convinced that the whole scientific and rational enterprise only works in collaborative mode, when there's some shared desire to find the truth. You can never convince someone of something by using reason and evidence, and your counterparty will suspect (rightfully so!) that your "evidence" is just the sort of rhetoric-disguised-as-dialectic that I'm talking about.

It's a dismal conclusion.

moosey• 7 years ago

You can never convince someone of something by using reason and evidence, and your counterparty will suspect (rightfully so!) that your "evidence" is just the sort of rhetoric-disguised-as-dialectic that I'm talking about.

I personally agreed with your general idea, but the place where we are today was developed intentionally via propaganda systems designed to question the validity of expertise. If a person believes that government bureaucrats are all ineffective, that vaccines are dangerous, that all scientists believed a new ice age was going to start back in the 80's, then it is very easy to deny anything that experts say, and that your gut is right most of the time. This, of course, couldn't be further from the truth.

There are huge swaths of humanity that are willing to change their opinions based on the presentation of evidence. What is clear is that they are not good at generating enough political power to start the grand collective ideas that are necessary to fight homelessness locally (I know that I'm having trouble pushing housing first ideas - I think that Americans are punitive, culturally), or to fight climate change globally.

Still a dismal conclusion.

klrr• 7 years ago

Just want to shime in and recommend you to visit Chongqing. Incredibly interesting city to explore, great food and still has some rural China vibe that the other first tier cities start to lack.

_kyran• 7 years ago

Anywhere in particular you would recommend exploring for a future visit?

I was there for two days earlier this year and felt like I just scratched the surface.

billfruit• 7 years ago

I wonder how the traffic is like in these large Chinese cities. In India, esp Bangalore traffic and the crowding in the streets has grown up astronomically, and the road system can barely handle it.

mixmastamyk4• 7 years ago

Currently the top comment:

"Basically there were a lot of approx 35 story similar tower blocks and most people used public transport/taxis rather than having cars."

My understanding is that traffic does increase until a certain threshold of density is achieved and then it craters from there. Cities should probably be designed just above that.

LoSboccacc2• 7 years ago

and population control, that's an important factor controlling demand trough time

swiley3• 7 years ago

The result of Chinese population control is a significantly higher number of men than women. I'd personally rather pay more rent than live somewhere like that.

LoSboccacc2• 7 years ago

of course I agree with you

redm• 7 years ago

I think a more appropriate comparison is Chongqing and Tokyo.

baron816• 7 years ago

So much of the arguments over housing contain some sort of slippery slope statement of "I don't want my city to become Hong Kong or Dubai." But imagine if SF/SV started building housing that looked a lot like Amsterdam https://www.jetsetter.com/uploads/sites/7/2018/04/lVBcs3gf-1..., Paris https://c8.alamy.com/comp/RR1A0X/elegant-parisian-apartment-..., or even New York https://static01.nyt.com/images/2014/05/11/realestate/201405.... Those 5-10 story town houses are far nicer than anything that exists in SF and would provide a huge boost in density. Sure, it would be hugely expensive to recreate something that nice today, but the point is that you can create a beautiful, dense city without going really tall.

jetrink• 7 years ago

I completely agree that those areas should allow more 5-10 story buildings, but let's not kid ourselves about what they would look like. They would be One-Plus-Fives [1].

1. http://archplanbaltimore.blogspot.com/2015/03/how-one-plus-f...

ema2• 7 years ago

This is a question to which I haven't found a satisfying answer yet: why do old houses look better than new ones?

There are answers like "only good looking houses got preserved" or "it's just perception, in a hundred years people will love the houses being build now as much as the houses which were build in the nineteenth century". I don't really buy such arguments. I had some musings about people no longer caring about living in a beautiful house because with fast transportation there is less incentive to make a good impression on your neighbors. Or maybe it's something about craftsmen making less design decisions because of more planing and prefabrication. But these too are just speculations.

rb8083• 7 years ago

Nice, I lived in a 1+5, I didn't know they had a name.

TBH the quality was good enough. Sound could be quieter but was fine. The biggest problem was sprinkler system, at least once a year there would be a leak or a trigger that would completely destroy 1-3 apts. I dream of concrete now.

mixmastamyk4• 7 years ago

I don't see the problem. Could quibble about styling, but that is an order of magnitude nicer than the surface parking lots or 60s shitbox apartments that currently dominate Los Angeles.

Shivetya• 7 years ago

try to build in San Francisco, just try. The latest attempt was shot down because it would have shadow encroach eighteen percent of a city park, not even where kids congregate as its a two acre park next to a school [1]. This was after getting past every previous hurdle. As in, when anyone can block a private project nothing gets done. Oh you can try to put one up but you have to buy everyone off or so handicap your project it cannot be affordably built. Another horror story is the ever ongoing saga to build apartments by a laundromat owner [2]

America's housing project is simply because of government and the courts. Politicians through special interest groups which funnel money to their campaign and friends; namely highly paid positions with little more than a part time job, to courts which treat every opposing idea as having merit.

[1] https://www.sfchronicle.com/politics/article/SF-supervisors-...

[2] https://reason.com/2019/03/19/the-most-contested-apartment-b

rb8083• 7 years ago

True but those three cities aren't any cheaper than SF, esp given local salaries.

Canada• 7 years ago

Article makes me wonder if author ever set foot in Chongqing

mcguire3• 7 years ago

Chongqing:

Apartment (1 bedroom) in City Centre 307.91 $[1]

Average Monthly Net Salary (After Tax) 825.35 $[1]

37%

San Francisco:

Apartment (1 bedroom) in City Centre 3,386.72 $[2]

Average Monthly Net Salary (After Tax) 6,497.75

52%

Oklahoma City:

Apartment (1 bedroom) in City Centre 857.50 $[3]

Average Monthly Net Salary (After Tax) 2,639.56 $[3]

32%

[1] https://www.numbeo.com/cost-of-living/in/Chongqing?displayCu...

[2] https://www.numbeo.com/cost-of-living/in/San-Francisco

[3] https://www.numbeo.com/cost-of-living/in/Oklahoma-City

foota2• 7 years ago

Not sure exactly what your point is. Oklahoma City has a density of 235 people per square mile according to http://www.usa.com/rank/us--population-density--metro-area-r.... San Francisco's is 1300.

Of course it's cheaper to house people when land isn't scarce.

Hello71• 7 years ago

Not sure exactly what your point is. Chongqing has a density of 960 people per square mile according to https://en.wikipedia.org/wiki/Chongqing.

osdiab2• 7 years ago

What I see people missing here is the transportation aspect - land is only scarce in San Francisco if it’s permanently limited to a 7 by 7 mile square. Transportation increases the viable size of where you can live to access the city. So make land less scarce by building fast transit from other places.

That all said, it’s also a joke to think that SF uses its land wisely. What’s at the 24th st mission BART stop? A 1 story McDonald’s, what a great use of prime real estate to protect a treasured cultural relic.

g9yuayon• 7 years ago

Isn't this simple supply and demand? The housing price is too high? Build more houses or apartments. Yet San Francisco authorities tried every possible way to suppress supply: rent control and all kinds of regulations, to say the least. So much for so called "we fight for poor people".

swiley3• 7 years ago

Are there any countries that do this and don't have really scary censorship and speech policies? I'd definitely want to live somewhere like that. It wouldn't be hard to end up financially independent in a place like that on a SWE salary.

Construction has kept rent in Chongqing, China to $75 a month

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