The U.S. Needs More Housing Than Almost Anyone Can Imagine

https://www.theatlantic.com/ideas/archive/2022/11/us-housing-gap-cost-affordability-big-cities/672184/

by paulpauper • 4 years ago

55 33 4 years ago

The full picture gets worse the more you look into it.

The largest home builders in the nation aren’t building homes at budgets that most can afford.

So you’d say to yourself, well clearly they’re targeting the affluent then. Except there are only so many high income Americans you can sell to, and not all of them want expensive homes.

So what do these builders do? They build-to-rent! Yep. Those single-family homes you see in many large developments you can just think of as so-called “luxury” apartments by a different name.

I suspect most developed nations experiencing this issue are effectively stuck and growth capped markets.

Truly only dedicated policy targeting this problem will make a change, because the capital required to obtain land, rezone it for traditional residential building, then sell it requires either institutional capital, or small builders doing one-offs for select clients.

zbrozek4• 4 years ago

It's a stifling regulatory environment that's landed us here. Zoning is restrictive, planning commissions are slow and restrictive, councils are slow and restrictive. All of the agencies involved want to capture value from construction projects.

The net result is that very few projects pencil out, and the ones that do are expensive. We need to fix the root cause, which is lack of property rights.

froggychairs• 4 years ago

Zoning for who? America has no issue with single family zoning.

I’m assuming you’re speaking about middle and high density zoning. Since the issues you're describing are extremely common for those zoning projects.

yummypaint2• 4 years ago

The claims about zoning and property rights can be examined in the US, as Texas has no zoning. Housing costs are not remarkably different there.

The "capturing of value" that is actually happening is a net transfer of land and wealth from the general population to a handful of massive corporations and the people who control them. Once they own everything and have dismantled the market they can charge whatever they want.

jimrandomh• 4 years ago

This is a misunderstanding of how pricing works. The homes that are beig built aren't expensive because they're fancy, they're expensive because they're scarce and people need them, so they bid against each other. Every building markets itself as "luxury", but this is in fact just marketing. In principle you could make units cheaper by dividing them up into units with less floor space, but that people are already renting the larger units in groups.

theGnuMe2• 4 years ago

Agree. The luxury finishings are in fact quite cheap.

Gigachad2• 4 years ago

Expensive because they are new as well. Also even if you did constantly target the top end of the market. The people moving in moved out of somewhere else which has freed it up for others.

pydry• 4 years ago

So you’d say to yourself, well clearly they’re targeting the affluent then. Except there are only so many high income Americans you can sell to

They're targeting high net worth individuals looking for a store of value (or, in some cases, a foothold/bolthole from their repressive government).

High income Americans are to these flats what jewellery/smartphones are to gold - the underlying use value that, combined with natural scarcity, drives the hoarding instinct.

It's quite possible to pull the rug out from under the feet of the ultrawealthy by instituting a steep land value tax. This would kill the hoarding instinct, kill the NIMBY instinct and drive more efficient use of land.

andrewmcwatters2• 4 years ago

I don’t know anyone buying new development housing as an alternative to marketable securities.

neilwilson• 4 years ago

Not just the USA

The housing situation in the UK is beyond critical.

LatteLazy• 4 years ago

The UK's problems are about distribution not supply. We subsidise OAPs to sit alone in 4 bed houses in areas that need workers, then there is no space or money left for working families...

tmnvix2• 4 years ago

...distribution not supply

This is true in more than just the UK. It's also not simply old people living in oversized houses. Think holiday homes, AirBnB, second homes, land-banked properties, etc.

Any government that truly wanted to address it's accommodation crisis should start by conducting a thorough survey of residences and determine how many are actually being used as a primary residence.

chrisseaton• 4 years ago

I think it’s still possible to actually get housing in the UK, it’s just more expensive than you’d like. (There’s lots on the market near me.) Look at somewhere like Ireland where it’s getting to the point where there almost literally just isn’t any housing available at all. Lines of hundreds of people applying to get any property that comes onto the market.

rcarr3• 4 years ago

It's absolutely ridiculous now. It was also in the news today that net migration was 504,000 this year. I absolutely think it was the right thing to do (mostly refugees from Ukraine and Hong Kong) but if you're going to have these migration policies and you've got a housing supply and affordability crisis, you've absolutely got to implement mass house building policies at the same time. This government is an absolute joke but I have very little faith that Starmer is going to be much better. My plan is to leave whilst I still can.

Source: https://www.thetimes.co.uk/article/net-migration-at-record-l...

Aeolun• 4 years ago

But where will you go? Housing is ridiculous everywhere (except maybe Japan).

fy20• 4 years ago

A better way to look at it is how much is immigration of wealthy people propping up the UK economy? If you look at the number of new £1m+ apartments in London (which even if you are a couple of well paid engineers you probably could not get a mortgage for), then it paints a pretty stark picture.

_zfxr• 4 years ago

https://archive.ph/2pfx8

jasonjamerson• 4 years ago

There's no situation in which the NYC subway can accommodate a 50% increase in riders. Just building housing isn't enough.

I do think this article is right about a lot of things, but I think that if we could magically increase housing, we would find what NYC found building highways: building them actually created traffic, and they could never catch it.

If a city's infrastructure can't dramatically increase, the city's full. New York would need to double transit infrastructure to make current use comfortable.

theGnuMe2• 4 years ago

Show your work.

Gigachad2• 4 years ago

No situation? What about the situation where they build more lines/stations and run them more frequently?

ttcmuni• 4 years ago

One key thing to keep in mind is that, even if the population's stagnant, young people want to move out (and live in an apartment, later upgrading to a house when they have kids) while their parents and grandparents want to age in place in their existing home (occupancy goes from say 3-4 to 2). This is why housing production actually has to outpace population growth just to keep prices stable.

tmnvix2• 4 years ago

The best evidence for how much housing we need to build lies in the prices that people pay today.

No. The best evidence is the total number of households in the US compared with the total number of residences. How has that been tracking?

Demand for housing has been going up. This demand is not always for a primary residence (or even for properties intended to be rented out as a primary residence).

Ireland learnt the hard way that rising demand (as evidenced by rising prices) does not mean a shortage of residences that people could live in. Their shortage quickly turned to a surplus when the GFC hit (though they've somehow managed to engineer another accommodation crisis in Dublin since).

out-of-ideas• 4 years ago

more housing? need water sources ect for existing housing, not to mention new housing..

The U.S. Needs More Housing Than Almost Anyone Can Imagine

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