Economy Great Article Breaking Down the US Housing Crisis & Why Government Isn't Doing Anything About It

[panamaican]

I think the issue here is just authoritarianism vs. liberalism. If I don't want minorities, poor people, or restaurants in my neighborhood, should I be able to call on gov't force to prevent it or not?

I think trying to reframe the argument misses the core economics of "What do people want to live in?" and "What do developers want to build?"

Reframing it as some larger political conversation doesn't make sense if people don't first grasp the economic realities of construction.

 

[Blayt7hh]

Republicans are blocking people from owning homes!!!!

Except that home ownership in republican-run states is much higher than democrat-run states.

Maybe there are other actual factors at play? Maybe you should look up the data yourself before writing your anti-republican fan fiction?

But the mayors in those places are all democrats. At least that’s the line we get when it’s about crime.

Not to mention you’re just wrong. There’s quite a few blue states in the top two categories. There might be more red but not enough to prove a trend

Unrelated, but I am actually surprised ownership in Texas is so low. I wonder what’s causing that?

 

[panamaican]

I don't think that's a fair or accurate assessment of what I believe.

I believe that in general people want the most optimally located housing for the best price. People's individual priorities and tastes will change what they think an optimal location is but there's a reason that in real estate they have the say "location, location, location" is the first rule.

Right now the government is artificially restricting the market which I believe is a significant cause of the shortage in supply that is driving prices up. Allowing mixed use, multifamily housing in suburbs would offer more options both in terms of location and price point and would help increase supply across the metro area.

"Optimally located housing for the best price," only makes sense if you actually understand what home buyers want. An optimal location for a person with 3 young kids is very different from an optimal location for a 20 something with no attachments.

People move to the suburbs for space. The suburbs only exist because they can provide space. If someone wants a yard, it requires a larger plot of land. You cannot meet the larger plot of land requirements in cities. No matter how much someone changes the zoning. The space simply doesn't exist. You have to move outside of the urban centers to find enough undeveloped land to create a plot large enough to accommodate the large house and yard that people want. The tradeoff is that it comes with having to drive to get places.

It's not rocket science. Space requires driving. Walking requires less space because everything is closer. People who want space understand that means things will be further away.

Have you looked at the average size of American houses over the last 60 years? It's doubled (from ~1000 sq. to ~2500 sq. ft.). Why? Because people prefer space over proximity.

Builders are not building 2500 sq. ft. houses because people want to keep living in 1000 sq. ft. apartments or 1500 sq. townhomes.

There's a market, the easiest thing to do is actually look at what drives it instead of insisting that people want something they're just not buying.

 

[Andy Capp]

The problem with zoning changes is that they don't actually build anything. You can rezone everything to multi-family, mixed use but what are developers going to actually build in those spaces? My thing is that people talk about re-zoning but don't account for how much high end real estate fits quite nicely in those re-zoned areas.

Meh, like I said, rezone an area, build a bunch of government subsidized housing, rinse/repeat, is how I'd like to see things go, but there's an incentive for politicians to cave to the property tax base and until that changes it's gonna be same-ol' same-ol', IMHO, and that's where the supply issue really lies.

 

[JudoThrowFiasco]

But the mayors in those places are all democrats. At least that’s the line we get when it’s about crime.

Not to mention you’re just wrong. There’s quite a few blue states in the top two categories. There might be more red but not enough to prove a trend

Unrelated, but I am actually surprised ownership in Texas is so low. I wonder what’s causing that?

Why would you say texas is low? Seems high for a populated state

 

[Blayt7hh]

Why would you say texas is low? Seems high for a populated state

Well it’s in the third tier of that map and solidly in the bottom half of states by ownership. I am surprised because I believe that Texas doesn’t have property taxes so I would think that that translated to more home ownership.

On the other side of that though, Texas does have a lot of large cities and home ownership is always low in cities so maybe that’s the cause

 

[panamaican]

Wait, are we saying there's only one TYPE of suburbs? I just posted a clip from Edward Scissorhands that parodied suburban life, but this is also suburbs:



Suburbs dont NEED to be wide-built houses, far apart, on huge lots. They can be designed better to make them more walkable and make better use of the land, as well as implementing commerce within them.

I understand what you're saying but people don't want that. That's the whole thing. People don't want it.

The average size of the American house has gone from ~1000 sq. ft. to ~2500 sq. ft. This isn't because developers just feel like building big houses. It's because people want big houses with big yards so that their kids can run around and so that they can have friends and family visit without feeling cramped.

Developers are responding to that demand. They're not building ~1200 sq. ft. houses because no one with the money to choose wants them. I like them but I have one kid. I don't need 2500 sq. ft. But my parents felt cramped when they came to visit. So they bought a place in my building to so they'd have their own space while visiting us.

Very few people who are in an economic position to buy new construction are moving out to the suburbs so they can downsize their homes. This is an area where the market tells us what people want and then we have people arguing that policy should give them the opposite of what they want. And that makes no sense to me. People don't want something, you can't expect the free market to provide it. If you want, the government will have to do it themselves.

 

[JudoThrowFiasco]

Well it’s in the third tier of that map and solidly in the bottom half of states by ownership. I am surprised because I believe that Texas doesn’t have property taxes so I would think that that translated to more home ownership.

On the other side of that though, Texas does have a lot of large cities and home ownership is always low in cities so maybe that’s the cause

Texas has high property taxes (relative to the country) they dont have income tax. however, 61% owner occupied is really good for their population size. Yes, larger principal cities are more prone to rent over ownership. Texas doing better than NY and California.

 

[panamaican]

Meh, like I said, rezone an area, build a bunch of government subsidized housing, rinse/repeat, is how I'd like to see things go, but there's an incentive for politicians to cave to the property tax base and until that changes it's gonna be same-ol' same-ol', IMHO, and that's where the supply issue really lies.

I'd agree with that. Zone it and have the government build affordable housing (it's where a ton of 1950-70s era co-ops came from).

But it's foolish to rezone it and then wait for capitalist, profit motivated, developers to build affordable housing when they can use the same spaces to build high end housing and make a bigger profit from the same square footage.

The NIMBY-ism is that rich townhome owners don't want to live next to expensive 40 story condo buildings. No one genuinely believes it's going to be low income apartment buildings going up, lol. We have the data on that too.

 

[Sinister]

In what sense does the media or academia control anyone?

I sincerely hope you're not suggesting we're not heavily propagandize by our media. If I could go back in time and unalive someone before they became influential who isnt named Adolf Hitler, it would probably be Eddie Bernays:

 

[Rob Battisti]

I think trying to reframe the argument misses the core economics of "What do people want to live in?" and "What do developers want to build?"

Reframing it as some larger political conversation doesn't make sense if people don't first grasp the economic realities of construction.

some people need to frame every discussion as a matter of us vs them.

 

[Rob Battisti]

"Optimally located housing for the best price," only makes sense if you actually understand what home buyers want. An optimal location for a person with 3 young kids is very different from an optimal location for a 20 something with no attachments.

People move to the suburbs for space. The suburbs only exist because they can provide space. If someone wants a yard, it requires a larger plot of land. You cannot meet the larger plot of land requirements in cities. No matter how much someone changes the zoning. The space simply doesn't exist. You have to move outside of the urban centers to find enough undeveloped land to create a plot large enough to accommodate the large house and yard that people want. The tradeoff is that it comes with having to drive to get places.

It's not rocket science. Space requires driving. Walking requires less space because everything is closer. People who want space understand that means things will be further away.

Have you looked at the average size of American houses over the last 60 years? It's doubled (from ~1000 sq. to ~2500 sq. ft.). Why? Because people prefer space over proximity.

Builders are not building 2500 sq. ft. houses because people want to keep living in 1000 sq. ft. apartments or 1500 sq. townhomes.

There's a market, the easiest thing to do is actually look at what drives it instead of insisting that people want something they're just not buying.

Exactly. Well said.

 

[Sinister]

I understand what you're saying but people don't want that. That's the whole thing. People don't want it.

The average size of the American house has gone from ~1000 sq. ft. to ~2500 sq. ft. This isn't because developers just feel like building big houses. It's because people want big houses with big yards so that their kids can run around and so that they can have friends and family visit without feeling cramped.

Developers are responding to that demand. They're not building ~1200 sq. ft. houses because no one with the money to choose wants them. I like them but I have one kid. I don't need 2500 sq. ft. But my parents felt cramped when they came to visit. So they bought a place in my building to so they'd have their own space while visiting us.

Very few people who are in an economic position to buy new construction are moving out to the suburbs so they can downsize their homes. This is an area where the market tells us what people want and then we have people arguing that policy should give them the opposite of what they want. And that makes no sense to me. People don't want something, you can't expect the free market to provide it. If you want, the government will have to do it themselves.

I dont think that's the entirely the case. I mean I can ask some folks living in their car if they ONLY want a 2500 sq foot house with a yard (in a place with a water crisis) or if they'll take something smaller on a smaller plot, and we can see what they say. There are many metrics by which the market is currently being manipulated, and it's been demonstrated that National level builders of large planned communities have larger political power than smaller developers who would build more densely.

The suburban life was propagandized on the public:





We now know this was a failure, and its continuing to both grow and fail at the same time:

 

[Andy Capp]

"Optimally located housing for the best price," only makes sense if you actually understand what home buyers want. An optimal location for a person with 3 young kids is very different from an optimal location for a 20 something with no attachments.

People move to the suburbs for space. The suburbs only exist because they can provide space. If someone wants a yard, it requires a larger plot of land. You cannot meet the larger plot of land requirements in cities. No matter how much someone changes the zoning. The space simply doesn't exist. You have to move outside of the urban centers to find enough undeveloped land to create a plot large enough to accommodate the large house and yard that people want. The tradeoff is that it comes with having to drive to get places.

It's not rocket science. Space requires driving. Walking requires less space because everything is closer. People who want space understand that means things will be further away.

Have you looked at the average size of American houses over the last 60 years? It's doubled (from ~1000 sq. to ~2500 sq. ft.). Why? Because people prefer space over proximity.

Builders are not building 2500 sq. ft. houses because people want to keep living in 1000 sq. ft. apartments or 1500 sq. townhomes.

There's a market, the easiest thing to do is actually look at what drives it instead of insisting that people want something they're just not buying.

Big lots also consume lots of arable land which could be used for agriculture.

 

[blackheart]

I understand what you're saying but people don't want that. That's the whole thing. People don't want it.

The average size of the American house has gone from ~1000 sq. ft. to ~2500 sq. ft. This isn't because developers just feel like building big houses. It's because people want big houses with big yards so that their kids can run around and so that they can have friends and family visit without feeling cramped.

Developers are responding to that demand. They're not building ~1200 sq. ft. houses because no one with the money to choose wants them. I like them but I have one kid. I don't need 2500 sq. ft. But my parents felt cramped when they came to visit. So they bought a place in my building to so they'd have their own space while visiting us.

Very few people who are in an economic position to buy new construction are moving out to the suburbs so they can downsize their homes. This is an area where the market tells us what people want and then we have people arguing that policy should give them the opposite of what they want. And that makes no sense to me. People don't want something, you can't expect the free market to provide it. If you want, the government will have to do it themselves.

Lots of good stuff from you itt. I just have to push back on the idea that people don't want walkable spaces, and people prefer space over proximity. There is a lot of demand for both. Funny enough - all of the walkable mixed use areas in most major cities also happen to be the most expensive and most in-demand. But zoning has become so god damn restrictive that it would be illegal these days to build most of the "main street" up-town mixed use historic areas that were built like a century ago.

 

[Sinister]

Lots of good stuff from you itt. I just have to push back on the idea that people don't want walkable spaces, and people prefer space over proximity. There is a lot of demand for both. Funny enough - all of the walkable mixed used areas in most major cities also happen to be the most expensive and most in-demand. But zoning has become so god damn restrictive that it would be illegal these days to build most of the "main street" up-town mixed use historic areas that were built like a century ago.

Right outside Vegas there's a small town called Boulder City. Its walkable. The demand to live there is insane. The only chance someone has of buying a house there now is if someone dies and doesnt leave it to a family member.

 

[JudoThrowFiasco]

Right outside Vegas there's a small town called Boulder City. Its walkable. The demand to live there is insane. The only chance someone has of buying a house there now is if someone dies and doesnt leave it to a family member.

Hi demand, low inventory but a median of 439450? or $223 per sqaure foot? Seems like a steal/.

 

[Sinister]

Hi demand, low inventory but a median of 439450? or $223 per sqaure foot? Seems like a steal/.

I just took a glance on Zillow, $400k for a 2/1, nah I'm good. Lol, There's a couple 3/2's for a bit more but I'd bet my car they need work. Everything else is either condos or $900k and up for giant houses that overlook the lake. The design of the City is great though. Last year at the Christmas Parade we parked overlooking the lake on a hill and walked to main street in a little over 10 mins, with a stroller.

 

[Jack V Savage]

I sincerely hope you're not suggesting we're not heavily propagandize by our media. If I could go back in time and unalive someone before they became influential who isnt named Adolf Hitler, it would probably be Eddie Bernays:

Well, first "control" implies removing choices rather than informing them. If you have two dishes, I'm controlling you if I say you can only have one of them. if I say that one of them, say, has less sugar but is more widely liked, I'm informing you. Second, you ask a hundred different people how the media is "propagandizing" them, you'll get a hundred different answers. Fox is a fascist, and he'd probably say that it's by convincing people not to be racists (or however he'd phrase that). You'd probably say that they're turning people into capitalists or something. Which also raises the question: How are you able to escape this force that controls other people? Most people here think they arrived at their own views naturally after deep reflection and research, while people who disagree with them have been brainwashed by the media.

For the record, mass persuasion of all types has been a massive flop. IMO, if you killed a young Bernays, it would have exactly zero impact outside his social circle.

 

[JudoThrowFiasco]

I just took a glance on Zillow, $400k for a 2/1, nah I'm good. Lol, There's a couple 3/2's for a bit more but I'd bet my car they need work. Everything else is either condos or $900k and up for giant houses that overlook the lake. The design of the City is great though. Last year at the Christmas Parade we parked overlooking the lake on a hill and walked to main street in a little over 10 mins, with a stroller.

There would be a line up for days in Ontario ( and most of canada) at those prices. Goes back to my point of americans have it good compared to the rest of the west in terms of real estate cost.