- I live in one of those exact neighborhoods in suburban Cleveland. Single family housing for miles and miles and miles
- Cleveland has desperately old housing stock
- much of the discussion in the NYT series on this topic, from builders, is how building affordable housing is simply not profitable
- my undergrad specialty was in the micro economics of housing with Chip Case (RIP) of the Case- Schiller index, so I am not speaking out of my nether regions about this. I was studying the housing crisis before anyone even knew it existed
-
Our housing crisis has its roots in many things, but first and foremost it is our uniquely American lack of safety net. I too am basically in the black, minus retirement, because of housing.
I work in an industry (vet med) where my staff can't afford most of the treatments I prescribe for my patients.
Yet, everyone knows, that to accrue wealth, ya gotta buy a house.
No one I work with has any sense of security. Not with their car, not with their housing, hell, not with their groceries.
Enter people like that, who have slightly more money. They buy a house in the burbs...and think that is what is gonna bring them peace, Maslow's hierarchy of needs and all. In-built housing, to them, threatens that peace. There is no peace anywhere else in our lives as Americans. We get gunned down at the mall, at school at work. We go bankrupt because of medical bills. But, they can keep the wolves at bay, at home. And it works mostly.
The root of our housing problem is insecurities and the result is more insecurities.
But until single family homeowners see that same peace a house brings in other parts of their lives, they are gonna fight to keep the status quo...which makes the overall insecurity worse.
Housing can't be solved absent conversations about single payer health care, living wages and gun control.
And this whole argument doesn't even take into account racial issues and how few white people are comfortable with brown people. But again, that goes to insecurities.
When your retirement is dependent upon extracting 30 years of equity appreciation from your primary residence, *anything* that threatens the value of your home is a threat to your personal material well being.
Average Joe American homeowners want and need housing scarcity because they very often have nothing else. So resistance to new building is both rational from the individual household perspective and horribly destructive from the macro/societal perspective.
Do we have any evidence whatsoever that ‘Average Joe Homeowner’ pays attention to zoning policies or building policies or anything at all like that? Do we know if these policies were passed recently or in the 1920s? I just find this odd given that I know so many civic minded people and not one of them has a clue about any of this, nobody attends city planning meetings or pays any attention to any of this, wherever they live. It’s not even on people’s radar for the most part.
It seems untrue this whole ‘build more housing stock, and housing costs will go down’ in big desirable metro areas. The demand is almost inexhaustible. Do we really think that if Honolulu or Seattle or San Francisco or New York becomes as affordable as Topeka, people won’t just move there until the rates go right back up?
That’s certainly not a reason not to build but I am always seeing these things assumed and I am wondering why when they don’t seem very plausible.
I don’t find it plausible that a slowly boiling national crisis was created by Joe Schmoe Homeowners’ desires. That’s all that happened? Joe Schmoe just said recently ‘I don’t like it when houses get built where I live, for I am dependent on the scarcity of homes for my retirement funds...’ and went --where? to the city council?--and now we don’t have enough houses.
Seriously? That’s the main thing that happened?
I think people are using their intuitions for a complex problem.
However, that’s not to say we should not build a LOT more housing. We must. We simply need to understand what is making housing cost so much, and how to lower that cost. We need to increase density in cities even if it won’t lower the cost of housing because it is environmentally better and it will provide more places for people to live overall.
But there’s just something odd about the individualist framing.
Have you ever been to small town zoning hearings, or county planning meetings? Because yes, that is exactly what happens. 100 boomers show up and oppose affordable housing developments because those houses will decrease property values. Whether that is true or not is irrelevant. So the zoning code is written with minimum lot sizes, minimum setbacks, minimum square footage. All in response to *citizen demands*. This stuff doesn't come out of the ether.
If you have actual data and information that's not anecdotal I would love to see because housing prices went up globally. They went ip
nationally. They went up in places losing population. Rents increased in areas where vacancies did not increase. I just don't think the causal story can possibly be the whole story given that it depends on supply & demand & a lot of anecdotes that can't explain things in every region. As well as behavior and law that isn't occurring in every place prices went up. It's not convincing to show one town where people block a building and then say HERE is why global housing prices and shortages occurred ...Just stop these people and prices will decline.'
I am sure it happens but I live in one of the desirable metro areas and it doesn't happen here. Nobody thinks that they can stop buildings from going up, and developers are involved, and buildings are constantly going up. But demand cannot be met apparently as prices just keep going up.
Anyway, my point is about cause and effect. There are claims about causes of housing prices that seem false. E.g. claims that some nimbys ate increasing prices when the zoning codes are from LONG ago.
I agree with you that the roots of the housing crisis lie in our social/economic/political systems. You are so right about the lack of a social safety net. Also about health care: both it and housing are basic needs that have been commodified for profit and that's a terrible contradiction. But IMO we need to also be aware of how homeownership has been positioned culturally as an index of prosperity and the ultimate sign of success in capitalist terms. Political change and climate crisis have created a moment where that myth is coming undone for a generation which had the perfectly acceptable expectations of ultimately being better off than their parents. It's a very difficult and complex moment -- of disappointment, resentment, and fear among people of all ages. Also of a healthy questioning of capitalism how its processes are breaking down. I don't think we can build our way out of this one.
Agree on all and what your note further made me think of is that we can't WATER our way out of it. Artucle in the NYT this weekend about Phoenix building desalination in Mexico. We need so much infrastructure so badly...
Totally agree. I think it's easy and intuitive for many well-meaning progressive people to have reflexively anti-development/anti-anything-new views on housing that get all muddled up with gentrification concerns. Glad to see some progress as people change their minds, at least in California.
It certainly wouldn't solve everything, but I'd like restrictions on equity fund purchases of residential real estate. (Some of them have gone after mobile home parks and drove up rental prices there. Jeez.) Maybe because I just hate equity funds. Bunch of greedheads.
Oh, btw, you've earned a light week here. I very much appreciate that you have been consistently writing these newsletters. (I've subscribed, and subsequently cancelled subscriptions, to some writers who were hot out of the gate and then disappeared.) Best wishes on the book! Let us know when pre-orders are open!
I would like to see an comparable article that says "Time for developers and apartment owners to rethink their public spirit".
In Austin (where I have lived for 50+ years), we are engaged in converting small low income neighborhoods with single family homes into large luxury apartments and dense townhomes for the tech gentry (of which I am one).
They don't build higher than 3 stories due to increased costs so the Council is going to sacrifice many more homes in the name of affordability than your starting picture implies.
It appears that the developer crowd have found a clever way to socialize the risk and privatize the profits by using "affordability" and "NIMBY" framing to destroy the power of the neighborhoods. The wealthier west side of Austin is minimally impacted due to land prices and political muscle.
To make matters worse, the buildings are constructed on imported labor (not that I have anything against that except that it tends be a way to pay workers less) and out-of-state capital so little of the money flows back in community.
The shift to apartments is also problematic because renters don't have the same politic rights.
Unfortunately, I don't see any solutions. I'm helping a local non-profit that is developing a workforce program for people who are unhoused. That's my public contribution. Then I'm probably going to move out of Austin for the first time in my life.
"We still need to make more housing, everywhere, at all price points. We need to build, a lot. Even if you use regulation to bring down the price of a scarce asset, it is still scarce. We need housing to not be so scarce."
Can we really call an asset "scarce" when there are 16 million of them sitting vacant? Can we really "fix" the scarcity issue when there are already 10 million SECOND homes? The supply issue is not a real supply issue, it is a hoarding issue. Build all you want, they will just end up in the hands of people who already have one or more homes. We can't build our way out of a legislative issue.
This is not to say we should not build! This is to say that building alone will not make housing affordable.
Re: people thinking they’ll save the environment by limiting housing, let’s talk about how much green space we could have if we… didn’t pave everything over to let people drive around their low-density-ass neighborhoods! Also: part of this might be supply x demand, but it strikes me that when 20% of houses are now being sold to investors, there’s a weird other wrench being the thrown into the market.
Sure but there are some areas that we might want to keep the housing out of like riparian areas, wetlands, fragile coastal areas, etc. For one thing it’s just asking for trouble with flooding and fire-zones. For another, it’s still possible to build more densely in a lot of cities rather than destroy a creek for an apartment building in a ‘nicer’ (and more profitable) semi-rural location.
(I'd like to preface my question saying it's genuine, just in case it seems like a "gotcha" type question, I'm just generally shallowly informed on the matter and think this venue might be a place to find/receive a well-informed answer)
I've heard numerous times in various places that the number of empty homes in the u.s., maybe due to second homeownership, but I've mostly heard it mentioned specifically about foreclosed homes, is plenty enough to house all the unhoused people. Is this true? Is it out of date to the current crisis? Is it true but only in a facile way and, if so, what makes it variously infeasible?
More or less unrelated bit of info from around my own neck of the woods, a contributing factor to the housing crisis in some of these parts is specifically the lack of affordable housing and even more specifically the lack of affordable family housing. In one city a few years ago a law/ordinance/whatever was passed requiring all new developments be built with a minimum number of affordable units. Developers proceeded to make all the affordable units SROs or single bedrooms, so we ended up with families with multiple children/generations all living in single crowded rooms. It seems to me (maybe selective attention bias) that developers tend to have a lot of political sway and a lot of hands holding money in the political processes in most big cities in the u.s., at least on the east coast. But definitely the zoning and nimbyism is a big problem as well.
Similar things happening in my neck of the woods. Developers here are also able to buy their way out of the affordable housing requirement, which they regularly do. IMO "zoning and nimbyism" are straw men -- big development, private equity companies, corporations, politics, and money, money, money are driving the bigger machine.
Trolleys and subways changed housing construction in the past suggesting transportation could change things again . Would you examine commuting in Japan and Europe , please ?
Look at that tall building! Definitely a good thing.
Just imagine the views from the top. With a beach and park just next door, I'd definitely move there. I'd bring all my rich friends too and we'd each buy apartments. I'd probably live there full time, but my friends would likely use them for holidays only.
So this tower would definitely attract new migrants to the area and make for an attractive holiday home investment.
I wonder if there's any way it would make housing cheaper for the locals?
Well it'd certainly be cheaper to live on the sites now shaded by the tower. So there's one way. Maybe construction noise would be unbearable and some people would leave, pushing down rents? There's another way.
Could the locals afford to live in the tower? I doubt it. Right now they don't even have enough money to pay a developer to buy out some of those low-rises, demolish them, and redevelop up to the six-stories already allowed in the zoning regulations.
So I guess the main way this tower would make rents cheaper is by making it a worse place to live and driving people away.
Which makes me wonder.... if the poor people can't afford to bid away good locations and building resources from rich people, isn't the solution simply to take money from the rich people and give it to the poor people?
Whatever. If they want to stuff up their amenity by allowing development that has massive externalities, that's up to them. I have cash, so I'll be fine. I can move anywhere.
> In the course of compiling a section of the new socialism book focused on “conservative realism,” I came across a term which was uncharacteristically unique: usufruct. My initial reaction upon seeing it could be summed up as skeptical; I actually figured it was nothing more than a typo, albeit without the friendly red lines of MS Word’s liberal dictatorship. Closer investigation revealed that it refers to a very special idea: the relative status of private property.
> Americans in particular are adamant about their rights to do with property what they wish, even as the wretched scourge of HOA’s and property taxes fester well and strong. To us, the notion of being told what to do with our property is outrageous.
> But a lack of appreciation for different models does not mean they magically cease to exist. Put simply, it refers to the contrast between Eigentum (private property) and Besitz (possession). In the former, one is free to do whatever he pleases with the terrain, including sales or destruction. Besitz on the other hand means the individual can use the land for his creative or business purposes, but not at its expense or defilement.
> This supervision and ownership is conceived of typically to be the State, or perhaps a community and people. It theoretically allows folks to develop and advance personal wealth (as opposed to socialist stagnancy), yet prevents them from selling out to foreigners or poisoning the soil with their habits or business practices. Failure (or disinterest) in using the land means it will revert back to the community and be parceled out to another aspiring cultivator, one who must of course be native to the region.
> Conservatives have long lamented the decline of identity and culture, yet they also insist on a property system where any foreigner with money can waltz in and purchase land, upsetting the traditional balance of that location. Leftists complain about environmental decline, while also advancing open borders and refusing to seriously explore the possibility of degrowth. Both are victims of their own beliefs, and doomed to failure because of those precepts.
So counter-productive to blame homeowners for current housing problems. Also ageist, on the whole. Why foment a new kind of class conflict? You call for a generation to be generous and civic-minded but I see no generosity or tolerance in your argument. Resenting the past and jumping to the conclusion that homeowners are "selfish" and "immoral" is puritanical and over-simplifying. It shifts the issues from economical/social/political to personal and moral. You also elide in your argument the environmental costs of untrammeled growth; how will your grandchildren lead full lives in denatured and probably overcrowded developments? You're right that housing issues are very complex which is one reason why we must refer them to wider social issues: the systems we live under favor the wealthy at every turn. And yes, landowners do benefit from this -- it doesn't help to punish them for acquiring the property their society encouraged them to acquire decades ago. Zoning changes rarely address affordability and can lead to even more expensive housing. Density too brings with it problems -- rarely mentioned: congestion, destruction of greenspace, lack of access to amenities, inadequate infrastructure to support growth. Developers are making a fortune from the 'housing crisis' and have every reason to promote and prolong it. And yes, the system encourages them to do so. Let's work, hopefully without bitterness and harsh judgment, towards systemic change instead of punishing individuals or classes. Consider also that the housing crisis is being fueled in part by private equity companies buying up and speculating in housing stock. You make some good points in your piece, but you're grinding an ax and it shows.
“It is perfectly understandable that past generations, whose politics were formed when this affordable housing crisis was far less apparent, did not rank “maintaining housing supply” high in their mental list of public causes. Daniel Duane’s recent New York Times Magazine story about growing up in Berkeley beautifully details how his mother’s generation, who came of age fighting battles against racist real estate developers who were part and parcel of a local power structure that was trying to squelch radical protest, found themselves as staunch opponents of development decades later. The problem is that between 1963 and 2023, the state of the world changed.”
this strikes you as lacking any generosity or civil-mindedness? you put “selfish” and “immoral” in quotation marks but ctrl+F returns nothing for either word anywhere on the page besides your comment, so can i ask where these are supposed to be coming from? do you not think falsely attributing quotations evinces a lack of intellectual generosity? the piece is manifestly clear that anti-development political commitments came about in a time and context in which it was completely understandable and justifiable, only that the time and context has changed and their policy positions ought to change for the sake of fidelity to the very principles that led to the anti-development stance in the first place. you could only read “old people are selfish and immoral, fuck ‘em” into the piece from a position of severe defensiveness
Thank you for attentively reading my post and replying to it.
Allow me to remind you that quotation marks are not only used to offset quotations; they also serve as emphasis within a sentence and as a mark of irony. I used them in the last two ways. Nolan's piece is moralistic -- indeed his main effort seems to be to lay a moral duty on homeowners. I question this. Nolan has no right to personally decide what constitutes public duty now nor to urge his definitions on any "class" of society. I think this approach is inappropriate even in an opinion piece.
I find the analogies he makes between "protecting the environment" and "historical preservation"on the one hand and the current housing situation on the other to be unconvincing: these are all different issues. Certainly there are social problems associated with housing but this crisis is also being driven by massive vested economic interests. Surely these, and the kind of capitalism which supports them, are a worthier target than the homeowners whom Nolan acknowledges didn't have housing shortages on their minds when they bought their homes fifty years ago. It would be more effective to lecture Blackstone, Peter Thiel, and Jeff Bezos (whom Nolan already hates) rather than making homeowners easy targets for such old and new grievances. For these reasons I placed "immoral" and "selfish" in ironic quotation marks: I don't see the homeowning "class" as either of these things, and Nolan implicitly imputes to it both moral failure and self-seeking.
No, I don't see "generosity or civil-mindedness" in your quote from Nolan's piece. In its context the passage is part of a quasi-philosophical argument which claims, astonishingly, that public good "demands" that homeowners support all decisions which lead to increased new housing. To say that this is arrogant is an understatement. It's echoed in the conclusion to the piece: "But you must think about all of the people in your city . . . . You must think about the community. You must think about the public." What an ex-cathedra pronouncement! You're hearing not defensiveness but incredulity. Send this encyclical to Bezos, Thiel, Blackstone, developers, their shareholders, and other members of the 1%. Many of the homeowners being subjected to this kind of critique are middle-class and have worked hard to acquire and build up both their homes and their towns. It helps little to command them -- in the name of a shakily defined virtue and an arbitrarily imposed obligation -- to take the fall for the current mess.
This is really my question--if ALL homeowners in America vow to keep away from ANY possible building projects in their area--would Americans be able to find housing? Would housing become affordable? It’s not really clear to me that it would! Already most homeowners are not involved in city planning or paying ANY attention whatsoever to zoning or permits. How many homeowners have any investment in such things let alone even know if they’re happening? Only in a few communities does this happen, for whatever reason. And yes, it’s annoying. But suppose we got rid of those NIMBYs etc. Do we then suddenly SOLVE the crisis? I find this wildly implausible.
There has to be more to it than this.
I also wonder what people mean by ‘build housing’ because the yimby movement is laser focused on the most expensive markets in a weird way. But they have special issues that are way more complicated sometimes than just ‘the NIMBYs are causing a housing crisis.’ I suppose there are some places, like Hawaii, where the ‘locals’ are in fact, colonized, and whose community would be genuinely destroyed by every single developer descending to built high-rises on every scrap of land. Do they have to pay for the national (actually global) crisis by having Honolulu (in fact all the islands) turned into Hong Kong?
(I have no dog in this fight. I have never been to Hawaii. I just know some indigenous Hawaiians.)
It just seems like this is going to be a case-by-case thing if we’re not just going to be arguing that people that with money have a right to live everywhere. Because I keep hearing about how it’s fine that the luxury apartments aren’t solving any housing problems in the nice parts of California and all the poor people can just move to Stockton. But if we want housing for the whole country why is it never about the whole country?
Ro -- these are really interesting questions. I don't think getting rid of the NIMBYs would result in affordable housing: developers and their investors would continue to build market-price units and reap the profits. The NIMBY thorns in their sides would just be gone. As far as I know the YIMBYs believe that building tons of expensive housing all the time will eventually bring down housing prices. They apply the supply/demand paradigm unproblematically to housing and believe (again according to what I've learned) in 'trickle-down housing': as the rich buy up the new units the older ones are vacated for less wealthy occupants. Lots of problems with this theory, largely because trickling down doesn't happen. Communities ARE being destroyed -- everywhere, not just Hawaii. This is creating anger and grief, and IMO the profound social and psychological effects of such destruction are being overlooked. People who acquired their homes in good faith do feel that they're having to 'pay' so cities like Hong Kong can be built. If they try to defend and preserve at least some of their communities they're labeled as anti-change, politically conservative, selfish, immoral etc. The question becomes who do such cities serve? This is where larger arguments about capitalism come into play. Given that our society overwhelmingly favors the 1%, the 'new' cities are effectively being built for them. Some YIMBYs, I suspect, aspire to 1% status and see unlimited development as an opportunity to advance. The affordable housing cry can be a straw man. It's never about the whole country because it literally isn't. It's about profit and preserving the unequal economic status quo. The speculative interests of private equity firms and the ambitions of developers/realtors/the construction industry and their investors are driving the crisis. There simply is no money in affordable housing thus no incentive to build it. Everybody knows this but no-one will admit it. Also underpinning the crisis is climate change, anxiety about burgeoning population (especially as opportunities for the beleaguered middle class shrink), and an awareness that space and land are effectively finite. Something else that no-one wants to admit. We're also seeing, IMO, the understandable disappointment of a generation that's being betrayed by decades of unequal economic practice and the shredding of the social safety net that other wealthy countries often provide for their citizens. The mythic promise of home ownership as a sign of success seems withheld from those of them who are middle and working class. They may not end up wealthier than their parents. Unfortunately this sad possibility has opened the way to resentment and the search for scapegoats, especially among older home-owners. It's a very complex situation; housing is like health care -- both a need and a commodity to be traded, and the two impulses clash, especially now within an overall frame of forms of capitalism breaking down.
I don’t have a way of fact checking every claim you make here but I think we are in agreement on a couple things--that the crisis is much more complex but people’s feelings are attaching to one small idea, a kind of principle that it’s worth questioning should be absolute.
The principle ‘it’s always good to build more housing. There is a moral imperative to build more housing, and bad to block housing’ is a utilitarian principle. It’s not even clear whether it DOES lead to more happiness overall. That’s the assumption.
The one thing about utilitarianism is that you can just totally run roughshod over people’s rights. So it’s tailor made for something like European colonialism....’group membership isn’t important....people trying to preserve their way of life isn’t important...because eventually no one will remember and everyone will be assimilated and happy.’
It’s like the Borg. What? You’re HAPPY in the Borg cube! Why are you complaining? Nobody ever considers bigger picture things like ‘what if we had no private property at all’ or whatnot.
Who cares what used to stand here. Yes, the poor people occupied the cities and we want them now. But they’ll just be scattered to the four winds, and the rich people living in their excellent condos shall be just as happy. We have maximized utility.
The socially powerful are going to use this principle to divide the less powerful is my worry. I worry about the whole framing. of NIMBYISM and YIMBYISM. It substitutes generations for class. It makes poor black communities the REAL REASON condos cost so much. Or whatever.
On the other hand the left wing thing where NIMBYs are protesting building things seems so dumb that I sincerely wonder if there aren’t agent provocateurs getting them to be poster children for the YIMBY campaigns.
Something is off about the whole way it is shaped. But insofar as it sometimes sounds like it requires blanket libertarian assumptions that trump any kind of right or value, e.g., of the environment...I would say one shouldn’t adopt it.
Generally, I am skeptical it is a real thing. Too many of the claims are flimsy and implausible. I don’t know why leftists are falling for it. Is it is an attempt by larger financial entities to change the urban power structure in their favor because they want to have more control in the future? I don’t know. But whatever it is, I would like to see how it is going to lower housing costs, cure homelessness or do anything for anyone. So far this is all explained in the vaguest of terms, and whatever is supposed to happen is so far off in the future you could never hold anyone accountable if it doesn’t come to pass.
If a builder is allowed to build a 10 story apartment building in the middle of a street zoned residential, single-family, then that builder has enriched himself by stealing value from the surrounding property owners. Those property owners bought with the assurance from local government that the character of the surrounding area will not drastically change. There has to be some sort of compensation for this, doesn't there? There has always been eminent domain power, but that is usually only used for public commons projects.
There is plenty of room in the United States to build housing, that is easy to see by driving around in it. The problem is that the so many want to live in places that are already occupied, and the newcomers want to move in at less than the going rate.
"There is plenty of room in the United States to build housing, that is easy to see by driving around in it."
how exactly is this allowed on your account, though? did rural homeowners not also buy their property "with the assurance from local government that the character of the surrounding area will not drastically change?" if they bought their house because they liked that it abutted acres of undeveloped forest, or their closest neighbor was three miles away, are developers building in rural areas not also "enriching [themselves] by stealing the value from the surrounding property owners" when they clear the forest to put in a subdivision, or when they build a house between those two houses three miles apart? if we're taking your account in full seriousness, development doesn't seem like it should be allowed anywhere.
american cities are not especially dense by global standards, so the idea that they are presently too full to pursue a level of housing supply commensurate with housing demand does not seem possible to justify on the basis of any principle besides "fuck you, got mine"
"They like their neighborhood how it is." doesn't really explain it, though.
What they like is their neighbourhood's PRICES the way they are -- in other words, if you paid $400,000 for a three-bedroom house, you won't support any policies that drop housing prices to $100,000, even though many more people could afford housing. I don't know how we ever get around this.
Yes, there have been times, like 2008, when US housing prices did plummet --thousands of people got very badly hurt and may never have recovered financially. I don't think "affordable" housing policies will be possible if they require existing homeowners to go broke.
Protecting home values is certainly a large factor. But "we must be allowed to create a desperate housing crisis in order to enrich ourselves by throttling the market" is not a real strong argument morally speaking.
In my neck of the woods, "maintaining property values" is *the* #1 priority of local governing bodies, ie township trustees and small town city councils. Explicitly stated. People run on that platform and win every election. Citizens demand this for a reason, and it's not just mean spirited greed.
We have no social safety net and a pathetically underfunded and unreliable public pension scheme. Home equity is very often the only path to financial security and a comfortable retirement. Anything that threatens home values is an existential threat to household standard of living and material well being. In this context, protecting home values does become a moral imperative. Simply rephrase to emphasize the counterfactual to understand the position:
"We must be allowed to create a housing surplus in order to impoverish you and your children by flooding the market with new supply".
We can recognize that opposition to more housing, which effectively dilutes the housing stock and makes *my* property worth less, is a rationale response at the household level, while at the same time also recognize the deleterious effects at the macro societal level. Both of things can be simultaneously true. Bridging the gap is a very difficult problem. Nonpublic planner will ever succeed in implement policy that deliberately decrease home prices. Those people will never get elected or will be immediately thrown out.
The Canadian government has had various problems over the last 50 years - supporting mortgage loans, supporting builders, financing more rental builds, preventing foreign buyers, etc. - but in Canada, the highest housing prices are Toronto and Vancouver and politically its difficult to justify programs only aimed to help people in those markets. And anyone who spend a million dollars on a duplex in Toronto is deathly afraid of any government initiative that might jeopardize their equity.
I wonder if pandemic WFH (Work From Home) initiatives may end up being helpful by making it possible for some of us to work in cities without having to live there too.
There just aren’t going to be any building projects that are going to drop housing prices like that in any of the places where the housing market is out of control. It would be absolutely impossible to build so much housing that prices go down substantially. This just hasn’t happened anywhere.
I mean the good/bad news is that prices literally cannot increase forever and we're heading for another crash sooner or later. The higher the prices and the less dynamic the market (fewer overall sales, more folks parked and speculating) the more vulnerabilities appear.
Some perspective
- I live in one of those exact neighborhoods in suburban Cleveland. Single family housing for miles and miles and miles
- Cleveland has desperately old housing stock
- much of the discussion in the NYT series on this topic, from builders, is how building affordable housing is simply not profitable
- my undergrad specialty was in the micro economics of housing with Chip Case (RIP) of the Case- Schiller index, so I am not speaking out of my nether regions about this. I was studying the housing crisis before anyone even knew it existed
-
Our housing crisis has its roots in many things, but first and foremost it is our uniquely American lack of safety net. I too am basically in the black, minus retirement, because of housing.
I work in an industry (vet med) where my staff can't afford most of the treatments I prescribe for my patients.
Yet, everyone knows, that to accrue wealth, ya gotta buy a house.
No one I work with has any sense of security. Not with their car, not with their housing, hell, not with their groceries.
Enter people like that, who have slightly more money. They buy a house in the burbs...and think that is what is gonna bring them peace, Maslow's hierarchy of needs and all. In-built housing, to them, threatens that peace. There is no peace anywhere else in our lives as Americans. We get gunned down at the mall, at school at work. We go bankrupt because of medical bills. But, they can keep the wolves at bay, at home. And it works mostly.
The root of our housing problem is insecurities and the result is more insecurities.
But until single family homeowners see that same peace a house brings in other parts of their lives, they are gonna fight to keep the status quo...which makes the overall insecurity worse.
Housing can't be solved absent conversations about single payer health care, living wages and gun control.
And this whole argument doesn't even take into account racial issues and how few white people are comfortable with brown people. But again, that goes to insecurities.
There are just no easy answers.
When your retirement is dependent upon extracting 30 years of equity appreciation from your primary residence, *anything* that threatens the value of your home is a threat to your personal material well being.
Average Joe American homeowners want and need housing scarcity because they very often have nothing else. So resistance to new building is both rational from the individual household perspective and horribly destructive from the macro/societal perspective.
Very difficult problem.
Individually rational choices that have aggregately irrational consequences.
Do we have any evidence whatsoever that ‘Average Joe Homeowner’ pays attention to zoning policies or building policies or anything at all like that? Do we know if these policies were passed recently or in the 1920s? I just find this odd given that I know so many civic minded people and not one of them has a clue about any of this, nobody attends city planning meetings or pays any attention to any of this, wherever they live. It’s not even on people’s radar for the most part.
It seems untrue this whole ‘build more housing stock, and housing costs will go down’ in big desirable metro areas. The demand is almost inexhaustible. Do we really think that if Honolulu or Seattle or San Francisco or New York becomes as affordable as Topeka, people won’t just move there until the rates go right back up?
That’s certainly not a reason not to build but I am always seeing these things assumed and I am wondering why when they don’t seem very plausible.
I don’t find it plausible that a slowly boiling national crisis was created by Joe Schmoe Homeowners’ desires. That’s all that happened? Joe Schmoe just said recently ‘I don’t like it when houses get built where I live, for I am dependent on the scarcity of homes for my retirement funds...’ and went --where? to the city council?--and now we don’t have enough houses.
Seriously? That’s the main thing that happened?
I think people are using their intuitions for a complex problem.
However, that’s not to say we should not build a LOT more housing. We must. We simply need to understand what is making housing cost so much, and how to lower that cost. We need to increase density in cities even if it won’t lower the cost of housing because it is environmentally better and it will provide more places for people to live overall.
But there’s just something odd about the individualist framing.
Have you ever been to small town zoning hearings, or county planning meetings? Because yes, that is exactly what happens. 100 boomers show up and oppose affordable housing developments because those houses will decrease property values. Whether that is true or not is irrelevant. So the zoning code is written with minimum lot sizes, minimum setbacks, minimum square footage. All in response to *citizen demands*. This stuff doesn't come out of the ether.
If you have actual data and information that's not anecdotal I would love to see because housing prices went up globally. They went ip
nationally. They went up in places losing population. Rents increased in areas where vacancies did not increase. I just don't think the causal story can possibly be the whole story given that it depends on supply & demand & a lot of anecdotes that can't explain things in every region. As well as behavior and law that isn't occurring in every place prices went up. It's not convincing to show one town where people block a building and then say HERE is why global housing prices and shortages occurred ...Just stop these people and prices will decline.'
I am sure it happens but I live in one of the desirable metro areas and it doesn't happen here. Nobody thinks that they can stop buildings from going up, and developers are involved, and buildings are constantly going up. But demand cannot be met apparently as prices just keep going up.
Anyway, my point is about cause and effect. There are claims about causes of housing prices that seem false. E.g. claims that some nimbys ate increasing prices when the zoning codes are from LONG ago.
I agree with you that the roots of the housing crisis lie in our social/economic/political systems. You are so right about the lack of a social safety net. Also about health care: both it and housing are basic needs that have been commodified for profit and that's a terrible contradiction. But IMO we need to also be aware of how homeownership has been positioned culturally as an index of prosperity and the ultimate sign of success in capitalist terms. Political change and climate crisis have created a moment where that myth is coming undone for a generation which had the perfectly acceptable expectations of ultimately being better off than their parents. It's a very difficult and complex moment -- of disappointment, resentment, and fear among people of all ages. Also of a healthy questioning of capitalism how its processes are breaking down. I don't think we can build our way out of this one.
Agree on all and what your note further made me think of is that we can't WATER our way out of it. Artucle in the NYT this weekend about Phoenix building desalination in Mexico. We need so much infrastructure so badly...
Absolutely. Water is already shaping up to be the next crisis.
Totally agree. I think it's easy and intuitive for many well-meaning progressive people to have reflexively anti-development/anti-anything-new views on housing that get all muddled up with gentrification concerns. Glad to see some progress as people change their minds, at least in California.
It certainly wouldn't solve everything, but I'd like restrictions on equity fund purchases of residential real estate. (Some of them have gone after mobile home parks and drove up rental prices there. Jeez.) Maybe because I just hate equity funds. Bunch of greedheads.
Oh, btw, you've earned a light week here. I very much appreciate that you have been consistently writing these newsletters. (I've subscribed, and subsequently cancelled subscriptions, to some writers who were hot out of the gate and then disappeared.) Best wishes on the book! Let us know when pre-orders are open!
I would like to see an comparable article that says "Time for developers and apartment owners to rethink their public spirit".
In Austin (where I have lived for 50+ years), we are engaged in converting small low income neighborhoods with single family homes into large luxury apartments and dense townhomes for the tech gentry (of which I am one).
They don't build higher than 3 stories due to increased costs so the Council is going to sacrifice many more homes in the name of affordability than your starting picture implies.
It appears that the developer crowd have found a clever way to socialize the risk and privatize the profits by using "affordability" and "NIMBY" framing to destroy the power of the neighborhoods. The wealthier west side of Austin is minimally impacted due to land prices and political muscle.
To make matters worse, the buildings are constructed on imported labor (not that I have anything against that except that it tends be a way to pay workers less) and out-of-state capital so little of the money flows back in community.
The shift to apartments is also problematic because renters don't have the same politic rights.
Unfortunately, I don't see any solutions. I'm helping a local non-profit that is developing a workforce program for people who are unhoused. That's my public contribution. Then I'm probably going to move out of Austin for the first time in my life.
"We still need to make more housing, everywhere, at all price points. We need to build, a lot. Even if you use regulation to bring down the price of a scarce asset, it is still scarce. We need housing to not be so scarce."
Can we really call an asset "scarce" when there are 16 million of them sitting vacant? Can we really "fix" the scarcity issue when there are already 10 million SECOND homes? The supply issue is not a real supply issue, it is a hoarding issue. Build all you want, they will just end up in the hands of people who already have one or more homes. We can't build our way out of a legislative issue.
This is not to say we should not build! This is to say that building alone will not make housing affordable.
Re: people thinking they’ll save the environment by limiting housing, let’s talk about how much green space we could have if we… didn’t pave everything over to let people drive around their low-density-ass neighborhoods! Also: part of this might be supply x demand, but it strikes me that when 20% of houses are now being sold to investors, there’s a weird other wrench being the thrown into the market.
Sure but there are some areas that we might want to keep the housing out of like riparian areas, wetlands, fragile coastal areas, etc. For one thing it’s just asking for trouble with flooding and fire-zones. For another, it’s still possible to build more densely in a lot of cities rather than destroy a creek for an apartment building in a ‘nicer’ (and more profitable) semi-rural location.
(I'd like to preface my question saying it's genuine, just in case it seems like a "gotcha" type question, I'm just generally shallowly informed on the matter and think this venue might be a place to find/receive a well-informed answer)
I've heard numerous times in various places that the number of empty homes in the u.s., maybe due to second homeownership, but I've mostly heard it mentioned specifically about foreclosed homes, is plenty enough to house all the unhoused people. Is this true? Is it out of date to the current crisis? Is it true but only in a facile way and, if so, what makes it variously infeasible?
More or less unrelated bit of info from around my own neck of the woods, a contributing factor to the housing crisis in some of these parts is specifically the lack of affordable housing and even more specifically the lack of affordable family housing. In one city a few years ago a law/ordinance/whatever was passed requiring all new developments be built with a minimum number of affordable units. Developers proceeded to make all the affordable units SROs or single bedrooms, so we ended up with families with multiple children/generations all living in single crowded rooms. It seems to me (maybe selective attention bias) that developers tend to have a lot of political sway and a lot of hands holding money in the political processes in most big cities in the u.s., at least on the east coast. But definitely the zoning and nimbyism is a big problem as well.
Similar things happening in my neck of the woods. Developers here are also able to buy their way out of the affordable housing requirement, which they regularly do. IMO "zoning and nimbyism" are straw men -- big development, private equity companies, corporations, politics, and money, money, money are driving the bigger machine.
Trolleys and subways changed housing construction in the past suggesting transportation could change things again . Would you examine commuting in Japan and Europe , please ?
Look at that tall building! Definitely a good thing.
Just imagine the views from the top. With a beach and park just next door, I'd definitely move there. I'd bring all my rich friends too and we'd each buy apartments. I'd probably live there full time, but my friends would likely use them for holidays only.
So this tower would definitely attract new migrants to the area and make for an attractive holiday home investment.
I wonder if there's any way it would make housing cheaper for the locals?
Well it'd certainly be cheaper to live on the sites now shaded by the tower. So there's one way. Maybe construction noise would be unbearable and some people would leave, pushing down rents? There's another way.
Could the locals afford to live in the tower? I doubt it. Right now they don't even have enough money to pay a developer to buy out some of those low-rises, demolish them, and redevelop up to the six-stories already allowed in the zoning regulations.
So I guess the main way this tower would make rents cheaper is by making it a worse place to live and driving people away.
Which makes me wonder.... if the poor people can't afford to bid away good locations and building resources from rich people, isn't the solution simply to take money from the rich people and give it to the poor people?
Whatever. If they want to stuff up their amenity by allowing development that has massive externalities, that's up to them. I have cash, so I'll be fine. I can move anywhere.
> The right to use private property is not absolute. It must be leavened by consideration of the public good.
see "The Usufruct Concept" (May 08, 2021) by Martin Goldberg
https://martingoldberg.net/2021/05/08/the-usufruct-concept/
> In the course of compiling a section of the new socialism book focused on “conservative realism,” I came across a term which was uncharacteristically unique: usufruct. My initial reaction upon seeing it could be summed up as skeptical; I actually figured it was nothing more than a typo, albeit without the friendly red lines of MS Word’s liberal dictatorship. Closer investigation revealed that it refers to a very special idea: the relative status of private property.
> Americans in particular are adamant about their rights to do with property what they wish, even as the wretched scourge of HOA’s and property taxes fester well and strong. To us, the notion of being told what to do with our property is outrageous.
> But a lack of appreciation for different models does not mean they magically cease to exist. Put simply, it refers to the contrast between Eigentum (private property) and Besitz (possession). In the former, one is free to do whatever he pleases with the terrain, including sales or destruction. Besitz on the other hand means the individual can use the land for his creative or business purposes, but not at its expense or defilement.
> This supervision and ownership is conceived of typically to be the State, or perhaps a community and people. It theoretically allows folks to develop and advance personal wealth (as opposed to socialist stagnancy), yet prevents them from selling out to foreigners or poisoning the soil with their habits or business practices. Failure (or disinterest) in using the land means it will revert back to the community and be parceled out to another aspiring cultivator, one who must of course be native to the region.
> Conservatives have long lamented the decline of identity and culture, yet they also insist on a property system where any foreigner with money can waltz in and purchase land, upsetting the traditional balance of that location. Leftists complain about environmental decline, while also advancing open borders and refusing to seriously explore the possibility of degrowth. Both are victims of their own beliefs, and doomed to failure because of those precepts.
So counter-productive to blame homeowners for current housing problems. Also ageist, on the whole. Why foment a new kind of class conflict? You call for a generation to be generous and civic-minded but I see no generosity or tolerance in your argument. Resenting the past and jumping to the conclusion that homeowners are "selfish" and "immoral" is puritanical and over-simplifying. It shifts the issues from economical/social/political to personal and moral. You also elide in your argument the environmental costs of untrammeled growth; how will your grandchildren lead full lives in denatured and probably overcrowded developments? You're right that housing issues are very complex which is one reason why we must refer them to wider social issues: the systems we live under favor the wealthy at every turn. And yes, landowners do benefit from this -- it doesn't help to punish them for acquiring the property their society encouraged them to acquire decades ago. Zoning changes rarely address affordability and can lead to even more expensive housing. Density too brings with it problems -- rarely mentioned: congestion, destruction of greenspace, lack of access to amenities, inadequate infrastructure to support growth. Developers are making a fortune from the 'housing crisis' and have every reason to promote and prolong it. And yes, the system encourages them to do so. Let's work, hopefully without bitterness and harsh judgment, towards systemic change instead of punishing individuals or classes. Consider also that the housing crisis is being fueled in part by private equity companies buying up and speculating in housing stock. You make some good points in your piece, but you're grinding an ax and it shows.
“It is perfectly understandable that past generations, whose politics were formed when this affordable housing crisis was far less apparent, did not rank “maintaining housing supply” high in their mental list of public causes. Daniel Duane’s recent New York Times Magazine story about growing up in Berkeley beautifully details how his mother’s generation, who came of age fighting battles against racist real estate developers who were part and parcel of a local power structure that was trying to squelch radical protest, found themselves as staunch opponents of development decades later. The problem is that between 1963 and 2023, the state of the world changed.”
this strikes you as lacking any generosity or civil-mindedness? you put “selfish” and “immoral” in quotation marks but ctrl+F returns nothing for either word anywhere on the page besides your comment, so can i ask where these are supposed to be coming from? do you not think falsely attributing quotations evinces a lack of intellectual generosity? the piece is manifestly clear that anti-development political commitments came about in a time and context in which it was completely understandable and justifiable, only that the time and context has changed and their policy positions ought to change for the sake of fidelity to the very principles that led to the anti-development stance in the first place. you could only read “old people are selfish and immoral, fuck ‘em” into the piece from a position of severe defensiveness
Thank you for attentively reading my post and replying to it.
Allow me to remind you that quotation marks are not only used to offset quotations; they also serve as emphasis within a sentence and as a mark of irony. I used them in the last two ways. Nolan's piece is moralistic -- indeed his main effort seems to be to lay a moral duty on homeowners. I question this. Nolan has no right to personally decide what constitutes public duty now nor to urge his definitions on any "class" of society. I think this approach is inappropriate even in an opinion piece.
I find the analogies he makes between "protecting the environment" and "historical preservation"on the one hand and the current housing situation on the other to be unconvincing: these are all different issues. Certainly there are social problems associated with housing but this crisis is also being driven by massive vested economic interests. Surely these, and the kind of capitalism which supports them, are a worthier target than the homeowners whom Nolan acknowledges didn't have housing shortages on their minds when they bought their homes fifty years ago. It would be more effective to lecture Blackstone, Peter Thiel, and Jeff Bezos (whom Nolan already hates) rather than making homeowners easy targets for such old and new grievances. For these reasons I placed "immoral" and "selfish" in ironic quotation marks: I don't see the homeowning "class" as either of these things, and Nolan implicitly imputes to it both moral failure and self-seeking.
No, I don't see "generosity or civil-mindedness" in your quote from Nolan's piece. In its context the passage is part of a quasi-philosophical argument which claims, astonishingly, that public good "demands" that homeowners support all decisions which lead to increased new housing. To say that this is arrogant is an understatement. It's echoed in the conclusion to the piece: "But you must think about all of the people in your city . . . . You must think about the community. You must think about the public." What an ex-cathedra pronouncement! You're hearing not defensiveness but incredulity. Send this encyclical to Bezos, Thiel, Blackstone, developers, their shareholders, and other members of the 1%. Many of the homeowners being subjected to this kind of critique are middle-class and have worked hard to acquire and build up both their homes and their towns. It helps little to command them -- in the name of a shakily defined virtue and an arbitrarily imposed obligation -- to take the fall for the current mess.
This is really my question--if ALL homeowners in America vow to keep away from ANY possible building projects in their area--would Americans be able to find housing? Would housing become affordable? It’s not really clear to me that it would! Already most homeowners are not involved in city planning or paying ANY attention whatsoever to zoning or permits. How many homeowners have any investment in such things let alone even know if they’re happening? Only in a few communities does this happen, for whatever reason. And yes, it’s annoying. But suppose we got rid of those NIMBYs etc. Do we then suddenly SOLVE the crisis? I find this wildly implausible.
There has to be more to it than this.
I also wonder what people mean by ‘build housing’ because the yimby movement is laser focused on the most expensive markets in a weird way. But they have special issues that are way more complicated sometimes than just ‘the NIMBYs are causing a housing crisis.’ I suppose there are some places, like Hawaii, where the ‘locals’ are in fact, colonized, and whose community would be genuinely destroyed by every single developer descending to built high-rises on every scrap of land. Do they have to pay for the national (actually global) crisis by having Honolulu (in fact all the islands) turned into Hong Kong?
(I have no dog in this fight. I have never been to Hawaii. I just know some indigenous Hawaiians.)
It just seems like this is going to be a case-by-case thing if we’re not just going to be arguing that people that with money have a right to live everywhere. Because I keep hearing about how it’s fine that the luxury apartments aren’t solving any housing problems in the nice parts of California and all the poor people can just move to Stockton. But if we want housing for the whole country why is it never about the whole country?
Ro -- these are really interesting questions. I don't think getting rid of the NIMBYs would result in affordable housing: developers and their investors would continue to build market-price units and reap the profits. The NIMBY thorns in their sides would just be gone. As far as I know the YIMBYs believe that building tons of expensive housing all the time will eventually bring down housing prices. They apply the supply/demand paradigm unproblematically to housing and believe (again according to what I've learned) in 'trickle-down housing': as the rich buy up the new units the older ones are vacated for less wealthy occupants. Lots of problems with this theory, largely because trickling down doesn't happen. Communities ARE being destroyed -- everywhere, not just Hawaii. This is creating anger and grief, and IMO the profound social and psychological effects of such destruction are being overlooked. People who acquired their homes in good faith do feel that they're having to 'pay' so cities like Hong Kong can be built. If they try to defend and preserve at least some of their communities they're labeled as anti-change, politically conservative, selfish, immoral etc. The question becomes who do such cities serve? This is where larger arguments about capitalism come into play. Given that our society overwhelmingly favors the 1%, the 'new' cities are effectively being built for them. Some YIMBYs, I suspect, aspire to 1% status and see unlimited development as an opportunity to advance. The affordable housing cry can be a straw man. It's never about the whole country because it literally isn't. It's about profit and preserving the unequal economic status quo. The speculative interests of private equity firms and the ambitions of developers/realtors/the construction industry and their investors are driving the crisis. There simply is no money in affordable housing thus no incentive to build it. Everybody knows this but no-one will admit it. Also underpinning the crisis is climate change, anxiety about burgeoning population (especially as opportunities for the beleaguered middle class shrink), and an awareness that space and land are effectively finite. Something else that no-one wants to admit. We're also seeing, IMO, the understandable disappointment of a generation that's being betrayed by decades of unequal economic practice and the shredding of the social safety net that other wealthy countries often provide for their citizens. The mythic promise of home ownership as a sign of success seems withheld from those of them who are middle and working class. They may not end up wealthier than their parents. Unfortunately this sad possibility has opened the way to resentment and the search for scapegoats, especially among older home-owners. It's a very complex situation; housing is like health care -- both a need and a commodity to be traded, and the two impulses clash, especially now within an overall frame of forms of capitalism breaking down.
I don’t have a way of fact checking every claim you make here but I think we are in agreement on a couple things--that the crisis is much more complex but people’s feelings are attaching to one small idea, a kind of principle that it’s worth questioning should be absolute.
The principle ‘it’s always good to build more housing. There is a moral imperative to build more housing, and bad to block housing’ is a utilitarian principle. It’s not even clear whether it DOES lead to more happiness overall. That’s the assumption.
The one thing about utilitarianism is that you can just totally run roughshod over people’s rights. So it’s tailor made for something like European colonialism....’group membership isn’t important....people trying to preserve their way of life isn’t important...because eventually no one will remember and everyone will be assimilated and happy.’
It’s like the Borg. What? You’re HAPPY in the Borg cube! Why are you complaining? Nobody ever considers bigger picture things like ‘what if we had no private property at all’ or whatnot.
Who cares what used to stand here. Yes, the poor people occupied the cities and we want them now. But they’ll just be scattered to the four winds, and the rich people living in their excellent condos shall be just as happy. We have maximized utility.
The socially powerful are going to use this principle to divide the less powerful is my worry. I worry about the whole framing. of NIMBYISM and YIMBYISM. It substitutes generations for class. It makes poor black communities the REAL REASON condos cost so much. Or whatever.
On the other hand the left wing thing where NIMBYs are protesting building things seems so dumb that I sincerely wonder if there aren’t agent provocateurs getting them to be poster children for the YIMBY campaigns.
Something is off about the whole way it is shaped. But insofar as it sometimes sounds like it requires blanket libertarian assumptions that trump any kind of right or value, e.g., of the environment...I would say one shouldn’t adopt it.
Generally, I am skeptical it is a real thing. Too many of the claims are flimsy and implausible. I don’t know why leftists are falling for it. Is it is an attempt by larger financial entities to change the urban power structure in their favor because they want to have more control in the future? I don’t know. But whatever it is, I would like to see how it is going to lower housing costs, cure homelessness or do anything for anyone. So far this is all explained in the vaguest of terms, and whatever is supposed to happen is so far off in the future you could never hold anyone accountable if it doesn’t come to pass.
If a builder is allowed to build a 10 story apartment building in the middle of a street zoned residential, single-family, then that builder has enriched himself by stealing value from the surrounding property owners. Those property owners bought with the assurance from local government that the character of the surrounding area will not drastically change. There has to be some sort of compensation for this, doesn't there? There has always been eminent domain power, but that is usually only used for public commons projects.
There is plenty of room in the United States to build housing, that is easy to see by driving around in it. The problem is that the so many want to live in places that are already occupied, and the newcomers want to move in at less than the going rate.
"There is plenty of room in the United States to build housing, that is easy to see by driving around in it."
how exactly is this allowed on your account, though? did rural homeowners not also buy their property "with the assurance from local government that the character of the surrounding area will not drastically change?" if they bought their house because they liked that it abutted acres of undeveloped forest, or their closest neighbor was three miles away, are developers building in rural areas not also "enriching [themselves] by stealing the value from the surrounding property owners" when they clear the forest to put in a subdivision, or when they build a house between those two houses three miles apart? if we're taking your account in full seriousness, development doesn't seem like it should be allowed anywhere.
american cities are not especially dense by global standards, so the idea that they are presently too full to pursue a level of housing supply commensurate with housing demand does not seem possible to justify on the basis of any principle besides "fuck you, got mine"
"They like their neighborhood how it is." doesn't really explain it, though.
What they like is their neighbourhood's PRICES the way they are -- in other words, if you paid $400,000 for a three-bedroom house, you won't support any policies that drop housing prices to $100,000, even though many more people could afford housing. I don't know how we ever get around this.
Yes, there have been times, like 2008, when US housing prices did plummet --thousands of people got very badly hurt and may never have recovered financially. I don't think "affordable" housing policies will be possible if they require existing homeowners to go broke.
Protecting home values is certainly a large factor. But "we must be allowed to create a desperate housing crisis in order to enrich ourselves by throttling the market" is not a real strong argument morally speaking.
In my neck of the woods, "maintaining property values" is *the* #1 priority of local governing bodies, ie township trustees and small town city councils. Explicitly stated. People run on that platform and win every election. Citizens demand this for a reason, and it's not just mean spirited greed.
We have no social safety net and a pathetically underfunded and unreliable public pension scheme. Home equity is very often the only path to financial security and a comfortable retirement. Anything that threatens home values is an existential threat to household standard of living and material well being. In this context, protecting home values does become a moral imperative. Simply rephrase to emphasize the counterfactual to understand the position:
"We must be allowed to create a housing surplus in order to impoverish you and your children by flooding the market with new supply".
We can recognize that opposition to more housing, which effectively dilutes the housing stock and makes *my* property worth less, is a rationale response at the household level, while at the same time also recognize the deleterious effects at the macro societal level. Both of things can be simultaneously true. Bridging the gap is a very difficult problem. Nonpublic planner will ever succeed in implement policy that deliberately decrease home prices. Those people will never get elected or will be immediately thrown out.
It is a very difficult problem.
Yes, that's for sure.
The Canadian government has had various problems over the last 50 years - supporting mortgage loans, supporting builders, financing more rental builds, preventing foreign buyers, etc. - but in Canada, the highest housing prices are Toronto and Vancouver and politically its difficult to justify programs only aimed to help people in those markets. And anyone who spend a million dollars on a duplex in Toronto is deathly afraid of any government initiative that might jeopardize their equity.
I wonder if pandemic WFH (Work From Home) initiatives may end up being helpful by making it possible for some of us to work in cities without having to live there too.
There just aren’t going to be any building projects that are going to drop housing prices like that in any of the places where the housing market is out of control. It would be absolutely impossible to build so much housing that prices go down substantially. This just hasn’t happened anywhere.
I mean the good/bad news is that prices literally cannot increase forever and we're heading for another crash sooner or later. The higher the prices and the less dynamic the market (fewer overall sales, more folks parked and speculating) the more vulnerabilities appear.