This paper primarily considers house prices and quantities in terms of single-family homes. They use data sources like the single-family repeat-sales index and the median home value from the American Community Survey, which mostly tracks single-family homes.
This focus limits their analysis by not fully accounting for multi-family housing units or rental markets, which are far more significantly impacted by supply constraints.
This emphasis on single-family homes in their data sources affects the generalizability of their conclusions about the impact of supply constraints across different types of housing markets, especially in dense urban areas where multi-family units and rentals are more prevalent.
They also only go as far back as 1980. The difference between supply constraints between 1980 and 2025 is very small compared to the difference between 1965 and 1980. Take Los Angeles as an example [1]. The zoned capacity of many metro areas was dramatically reduced by the mid 1970s.
I also don't see a detailed run down in the paper of zoning laws and other local regulations and how that contributes to cost. They looked at a lot of top level numbers (from what I could tell) without diving into the specifics.
Zoning laws while not completely uniform, do seem to follow patterns across the country. The long and short of it is, the more desirable some place is to live, the more restrictive zoning laws and harder it is to get approval for builds and it depresses housing inventory over time.
It predicts movement in policies. As neighborhoods get wealthier, they trend toward regulatory capture. Zoning laws get more onerous, building codes get more restrictive (ever wonder why you don't see 25 story condominium complexes for example?) and the cost of entering the neighborhood is artificially inflated as a result.
They correlate, but it itself is not the cause in the sense that income levels directly cause housing prices to go up. What they do enable though, is as folks become wealthier they tend to also spend more time lobbying for these types of city regulations to preserve their home values. They spend more time on this as the income bracket goes up. Couple this with the fact that wealthier home owners tend to be older, they often have more time relative to others in many respects to lobby consistently for the status quo.
The issue I have with the report is it takes none of that into account, and instead takes the correlation (that income rising === higher home prices) without looking more closely at what happens as the income trend goes up.
>It predicts movement in policies. As neighborhoods get wealthier, they trend toward regulatory capture. Zoning laws get more onerous, building codes get more restrictive (ever wonder why you don't see 25 story condominium complexes for example?)
This. Once people are rich enough to have no real problems the setback of someone else's shed on someone else's land and the spacing of outlets in the walls of other people's houses suddenly start looking like things worth caring about, all of which drives down the efficiency by which dollars can be converted into use of land.
>and the cost of entering the neighborhood is artificially inflated as a result.
Worse, it's a feedback loop. High cost of entry means only more of the same will enter
>This. Once people are rich enough to have no real problems the setback of someone else's shed on someone else's land and the spacing of outlets in the walls of other people's houses suddenly start looking like things worth caring about.
Worse yet, the seeming backbone of the US real estate market is that homes are your biggest investment. They're seen as both a place to live and an asset that is a portion of your net worth.
For it to be both, means owners will always incentivize the asset increasing in value and as we see, the result is most home owners will fight zoning de-regulation tooth and nail. Its worth noting that this is true regardless of which political party is in power locally, assuming we're talking about the US.
As a result land use reforms are some of the hardest to get through legislatures in the US. For example, it took years for California to pass a law that simply allows people to rent secondary dwellings on their property, and this was heralded as a big deal because it usurped local regulations banning such practices. Keep in mind, this does relatively little to move the needle on real estate pressures (there's only so many places that have excess capacity of this nature to begin with and there aren't a ton of incentives to create more, as the law is still limited in a variety of ways). This took many years to get through, and its a very very very small reform!
I am both a land owner (I have a niche farming operation, but don't live on that land) and a home owner, and I find this obsessive behavior among other land/home owners to be misguided at best and appalling at worst.
The simple truth is it can be either an asset or a commons good, but it really can't be both. Thats a major part of the issue to begin with, and why I'm an advocate for the Land Value Tax
Productivity goes up → income goes up → real estate prices go up -> existing home owners and realtor organizations (at minimum) lobby for regulations to keep those prices up -> stricter zoning laws and build approval processes get passed -> demand isn't met as housing supply is artificially constrained to protect existing owners over new entrants, including new housing styles that maximize land usage (e.g., multi story condominiums or dense town house projects)
What should happen is:
Productivity goes up → income goes up → real estate prices go up temporarily -> new builds to meet current and future demand go up (as you would see in any other type of marketplace) -> housing prices come down as there is always going to be incentives to maximize land value in desirable places in a myriad of ways, and doesn't always mean building cookie cutter single family homes as we often see now (due to the aforementioned regulatory constraints that zoning regulations impose)
There is an artificial cap on how it works, and its done through zoning laws and other build regulations that make it anywhere from onerous to illegal to build housing in a maximally efficient way, all in service to protect existing owners home values as much as possible, at the expense of anything else.
This is why I will always advocate for a land value tax. Because it acts as a forcing function: you either pay the tax (which gets higher as time goes on) or you maximize the value of the land (which usually means selling off parcels to meet the tax obligation / lower future obligations, and/or building something to utilize the land, of which the most straightforward is often more housing, and denser the better as it increases utilization)
No, seriously. I am a landlord. How do I set rent? I ask myself: "How much do people around here earn?" And I set my price at ~30% of that.
I am currently selling a house. How do I set my price? I ask myself: "What salary would someone moving to this area likely be making?" And I set my price accordingly.
Literally none of the zoning laws are necessary. This method is how price is set in 100% of real estate transactions in 100% of localities, regardless of any other regulations.
FWIW I'm also an LVT zealot. Have you read Progress & Poverty yet?
Setting rental rates at 30% of median or average income for the area is the wrong way to think about it.
Setting rental rates at 30% of "What the average renter makes" is more reasonable.
This is the issue. There is no "what the market can bear". It is all "that's the way it is".
Every year there is a new excuse why prices go up (covid, fires, elections) but the numbers don't seem to align.
Also, I am not talking about SF or Bay area...the bad math has spread across the country.
Edit: And yes...my area has many vacant homes and even more commercial buildings. They are building high rise towers which people purchase and leave vacant. They buy houses that used to be rentals and tear down the entire neighborhood and leave it that way for years...further pushing out the rentals.
It is sad to watch the town I love destroy itself from the inside.
I would have been part of a development project that had it been approved[0], would have been involved in selling a high rise of condos, and the question that kept coming up for me is: "how hasn't someone undercut this market yet?" which is why I pursued it.
Because for instance, you'll rent at 30%, but if there was honest market pressure (and lets face it, there isn't) why wouldn't someone else rent at 28%? Or 25%? etc.
Zoning has real hidden costs, as do all the review stages etc.
Whats funny is how stable all this has been for landlords, builders (to some degree) and realtors. If an area is desirable to live in, you would see economies of scale trickle in - like I mentioned in other comments, why do you think we don't see 25 story condos in desirable areas? Thats zoning in action. You literally can't build it even if you had all the money in the world, because the local laws won't allow it[1]
>Progress & Poverty
The Georgism book? I have read it, been some time since I have and should really revisit it.
[0]: fellow local citizenry ultimately rejected my proposal - I knew it was likely but I had to try. Thats why I have a niche business on that plot now.
[1]: and I have some first hand experience here, its what I originally wanted to do with an aforementioned plot of land that is now a niche little farm growing speciality apple varieties
> Because for instance, you'll rent at 30%, but if there was honest market pressure (and lets face it, there isn't) why wouldn't someone else rent at 28%? Or 25%? etc.
They do! And then like all other markets, equilibrium is found, and that equilibrium point is what moves up as incomes move up.
They don’t though not really. We didn’t allow housing to have the same elastic market fluctuations all other markets do.
Yes, there can be minor variations in prices (especially with renting) but the fact of the matter is unlike any other market there is artificial scarcity up and down the chain with real estate
> there is artificial scarcity up and down the chain with real estate
Which, according to this analysis, does not actually significantly affect prices relative to other factors.
I understand your theory and I intuitively don't find it "wrong" per se, but you're staring at an analysis that shows you otherwise. Your critique of it not factoring in things like policy is explicitly wrong: all of those factors are fully accounted for in the ultimate supply elasticity.
So if policy is accounted for (it is), and your theory doesn't hold, it's time to either come up with a different critique of the study or acknowledge it as clear evidence against your theory.
No, those policies only matter, definitionally, in so far as they actually affect the elasticity of supply. The elasticity of supply is what they measured and found it does not matter, ergo those policies (and all related hypothetical supply-elasticity-affecting forces) effectively do not matter relative to other factors (well, one factor in particular: income).
This is discussed elsewhere but "market prices" are a distribution of bids and asks. A buyer or seller can be on the high or low end of that distribution, which does not change the fact that the distribution itself moves up as local incomes go up.
No. It’s a given that people without the incomes to afford housing won’t enter that locality, but many could remain from before it was a popular place to live.
Gentrification actually only affects a very small percentage of people who end up refusing to sell and holding out until they cannot afford anymore.
But the point remains that a 90 year old living on Social Security could potentially own a million dollar home.
> Gentrification actually only affects a very small percentage of people who end up refusing to sell and holding out until they cannot afford anymore.
In California, gentrification almost never affects long time homeowners. Once you pay off your mortgage, your only housing costs are maintenance and property taxes which are highly subsidized thanks to Proposition 13.
However, renters who make up 44% of all California households very often do experience increasing housing price pressures which drives them to move to lower cost (and lower opportunity) areas. Some municipalities have tight rent controls, but most do not. There's a state law which prevents rent increases in older units above 5% plus inflation but that is still an allowable rate which quickly outpaces income growth.
I happen to like some rent controls but I'm not saying that universal rent controls are a solution here. There just has to be some explanation for why housing construction costs seem to grow just as fast as housing prices in general. If housing prices are growing faster than wages and the producer price index for materials then it cant just be construction labor and materials!
What I am alluding to is that there is simply a lack of locations which are able to be developed into new housing. Sometimes that's onerous land use constraints, very long project entitlement and permitting timelines which increases financing costs, local taxes/fees or exactions on development, or some combination of all of these!
A new construction unit is always going to be priced higher than a similar sized and located unit that is older. This should not be surprising.
The claim that housing supply advocates make about affordability is not that new units will be most affordable than but that older comparable units will become more affordable due to the increased competition. The people who’ve been bidding up the prices on older rental and resale homes will choose the newer housing instead because they are able and more willing to. The older stock becomes more affordable. Time goes on and even newer buildings cause what was once new to become a more affordable option. It should eventually get to a point where nobody would ever choose the older (again, similarly sized and located) units with poor amenities because it’s not worth it compared to newer options that are a better value. And those get replaced with new construction. That’s how a housing market should function.
But instead we have housing that is over 100 years old going for ever increasing prices even without modern renovations. Thats a broken market.
That's not broken. That's location, location, location.
Also, your average 100 year-old house is a much higher quality structure than your average new house. And 100 years old is about the pinnacle of craftsmanship.
Higher location values are supposed to lead to more intensive land use (more dwelling units per acre) but we don’t tax land enough for this to work properly. I’d still consider a housing market without land value tax to be fundamentally broken. Adding on arbitrary constraints on building (eg, beyond health and safety regulations) makes it si much worse.
As for 100 year old houses being considered high quality… there’s definitely going to be a survivorship bias for such buildings that didn’t get replaced while they could (prior to mass downzoning on the 1970s) but they literally didn’t have building codes back then. Lots of money needs to be spent to retrofit old buildings for modern seismic and energy standards.
Also — not saying you’re guilty of this — there is a lot of racial prejudice when folks criticize the “poor craftsman” of modern construction workers compared to those of past generations, as they more often tend to be Latino workers these days.
> "there is a lot of racial prejudice when folks criticize the “poor craftsman” of modern construction workers compared to those of past generations, as they more often tend to be Latino workers these days."
This is nonsense. The reason people say nearly all modern construction and manufacturing sucks is because the primary focus is on reducing costs and increasing production efficiency/speed. Something that needs to be replaced sooner is also seen as a benefit rather than a problem - planned obsolescence.
“Modern craftsmanship is shit” mainly comes from using things like OSB and laminated beams. Anyone who actually studies modern building techniques realizes that modern houses are significantly better than old ones in many many ways - perhaps the only one they’re not being that they’re not using old growth lumber.
Where I live there is a separate tax on land and structure. But my understanding is we're unusual that way.
Land tax reform is debated amongst economist. It is a form of wealth taxation, and in America we generally don't tax wealth. And even if we did, unlike having $1 million in the bank - which is a known amount of wealth - the value of land is rather hard to quantify. You could arbitrarily say that all land in the city is taxed at $10 a square foot per year. Clearly that would be inequitable by some land is worth considerably more.
Land, unless it's farmland, generates no income and our tax policy is generally based upon income income tax.
Your average surviving 100 year old house, maybe. I’ve seen enough of them to realize that though they may be build out of wood that is old and hard and thick, they’ve tons of issues that just pile up over time.
Perhaps it is different in temperate climates, but old houses can be an absolute hassle.
Wood isn’t used because it will last forever - brick and stone are better for those purposes. Wood is excellent, just not the best. It’s much more efficient though.
That’s probably a big part of it, but of course making anything stand the test of time is extremely difficult.
Maybe you live in a tropical climate but wood can last 100s of years as long as the roof is maintained. Unless it is a timber house the outer walls will need replacement every 100 years though.
>But that would require builders to build affordable homes, which is the same effort and lower profit than building luxury.
This is only true because they can't build homes in significant volume in most localities due to land use and zoning regulations. It took 3 years in my former neighborhood to build 20 houses, because of the review and public comment period. This is the same story I've read about across the country: any locality that is desirable to live in has had increasingly strict regulations and processes that artificially constrain the building of housing inventory of any type.
Given this, if you can only build 20 units instead of 2000, you'll end up building in the luxury category, as its the only way to maximize any value of the build without other incentives.
If instead they could 2000 or 20000 homes that meet building code, builders could not only compete in earnest but you could do things like selling units at lower prices per unit but its made up in volume, or each housing unit could be denser (like town houses, condos etc).
You can't overlook these aspects. Real estate is not a functional marketplace and should be seen as the definition of government regulation overreach in many respects, but home owners tend to vote in blocs, so politicians won't touch it
Even in places where there’s infinite land literally you can buy 50 acres and develop it tomorrow and people are building it. They’re only building high-end luxury homes. Even the cheapest smallest townhomes are definitely into the low luxury area.
If they wanted to, they could build them much more affordable and save 30% off the total price, but nobody does it. Why not? It takes the same amount of time and you might as well build the more expensive one because someone will buy it and you get a percentage of the sale price.
Builders are building and the houses are selling; in suburbs all over the country. I presume the people buying them desire them, they're spending close to half a million for them.
The builders get approval from the county if outside a city, or the city if inside one, or build a new city.
This doesn’t answer my question. Where is it both highly desirable to live and lots of land to build on? And what are there zoning and building regulations?
“All over the country” isn’t a specific answer to the question at hand
Good catch - I definitely should’ve pointed out that I was referring to owners only. In that sense, it’s somewhat of a transfer of wealth from the rich to the poor.
For renters though, you’re absolutely right that they suffer much more directly.
> Gentrification actually only affects a very small percentage of people who end up refusing to sell and holding out until they cannot afford anymore.
Not quite just those who refuse to sell — because housing costs impact the cost of every other local service, maintenance in a gentrified area often becomes unaffordable for those who hold out, and then they can’t afford it. Roof replacement is the classic example. Another example (though not as relevant to the 90 year old on social security) is childcare costs.
Correlation != causation. The lack of factoring these locality inputs means they lose the broader context of their conclusion and that’s what makes it incomplete to me
No no, you're misunderstanding. The study did factor locality-specific inputs like the ones you're describing. In fact they included all of them by measuring the actual realized supply production for each locale.
They do matter a lot. I disagree with their conclusion that they don’t matter.
There is plenty of available evidence that when zoning laws are less restrictive and buildings get faster approval the overall cost of housing comes down over time in significant ways.
The way income factors into this tends to be driven by the fact that the weather the neighborhood the more time that is spent at city hall by residents lobbying for regulations to preserve their market values in their neighborhoods in order to achieve artificial local scarcity which drives the home values up.
One is in regards to the lasting effects of Houston's 1998 zoning reforms[0]
Another looks more broadly at patterns of regulations and how they affect the market[1]
Bloomberg also did some nice reporting in this space[2] as well which goes over many cases of attempted land use / zoning reform and various outcomes, most notably that trying to only single out 1-2 regulations is at best token reforms and more meaningful comprehensive reforms are needed to zoning and land use laws.
This is simply what I have easy access to at the moment, but there is more out there that studies housing as an ecosystem and they all seem to be converging on similar conclusions: the real estate market (housing in particular) is functionally broken around the country
In my experience, a huge number of people spend the most they can on housing. So the local price level is set by the local income distribution. Their observation lines up perfectly with my experiences.
This also suggests two solutions that are bound to be unpopular:
* To make housing prices more reasonable, give everyone a pay cut.
* Trying to set a "living wage" is futile since boosting income will feed right through to the price of housing.
Why doesn't it feed through to the price of food? Of vehicles? Of energy?
It only feeds through to the price of certain classes of goods: housing, healthcare, education.
Those are also "markets" that are artificially supply-constrained, through zoning, the AMA, and accreditation.
To be clear, I'm not saying that we should get rid of zoning, the AMA, and accreditation—but we should be much more careful to avoid use of those tools to curb supply.
Kidding aside, most people looking for housing aren’t buying land, they’re buying housing — which absolutely does not have elastic supply by policy, not by natural law.
Well, they are buying land because housing exists on land. As discussed elsewhere in the thread, if you make the housing upon that land more elastic (e.g. by loosening zoning restrictions), that elasticity pretty much immediately gets baked into the price of land itself.
This is so significant an effect that there is a highly lucrative business in simply buying low-density zoned land and going through the entitlements to turn it into a high-density zone. This does not just generate a free lunch for a developer to build more units on the same plot of land at the same price, it makes the land instantly more expensive.
> there is a highly lucrative business in simply buying low-density zoned land and going through the entitlements to turn it into a high-density zone
Sure, but this is only a lucrative business because despite the land getting more expensive, the housing units are less expensive—otherwise who in their right mind would pay as much for one unit in a duplex/triplex/etc. as they'd have paid for a single-family home in the same location?
The $/sqft of housing tends to go up as density increases... for the same reason as the article is suggesting: incomes are higher, so people can eat higher prices.
> The $/sqft of housing tends to go up as density increases
This is only true generally, not within a specific neighborhood, and it's because of correlations between demand and density.
If you look at a neighborhood with mixed SFH and condos, the condo $/sqft is lower than the SFH $/sqft. (To be clear: that's $/sqft of housing space not of land).
Having a diversity of density enables home pricing at different points. Looking only at SFH (as this article does) is missing the forest for the trees, IMO.
The most common reason the simple income level of a region changes is that increasing housing costs push lower income people out, meaning the simple income level is only measuring those who remain.
> This emphasis on single-family homes in their data sources affects the generalizability of their conclusions about the impact of supply constraints across different types of housing markets, especially in dense urban areas where multi-family units and rentals are more prevalent.
People generally seem to struggle with the fact that it's the land, not the house that's on top of it, that's valuable in desirable metro areas, but this reality suggests something really quite lucky, which is that eliminating land-use restrictions probably won't tank single-family housing prices, even as it lowers rents.
Incumbents get richer, because looser zoning rules mean the land is more valuable. Renters and those who otherwise couldn't afford to be incumbents get cheaper rent. It's a fortuitous win-win.
yeah but one of the reasons why land value for single family homes is even higher is due to the zoning constraints which cause what I like to call "land value spillover" effects. Land value in suburbs an hour from a city center is higher than it naturally would be because zoning constraints closer to the city center cause housing demand to spread out across a larger geographic area. To give an example in the bay area, the cities of Livermore and Concord primarily exist in the form and population they do today because more homes could not be built closer to the core of the bay area, not to mention places like Antioch, Brentwood, and Tracy.
There are some really interesting supply issues here at the level of multifamily tenant.
Now imagine you're a landlord with 500 units and they've all got the same appliances and fixtures. To keep everything in repair for 40 years or so, you'll need a consistent supply chain of all the parts that are ever going to break and be replaced: toilet flush mechanisms, handles, switches, motors in fans, grilles and plates, the shelves in the fridge or range. You name it.
And rental tenants can be especially hard on fixtures we don't own. Every time I clean something I manage to also break something, I guess. It's embarrassing.
When I moved in, I felt like I had thoroughly inspected, and the landlord graciously replaced+upgraded nearly every AC outlet and everything was like-new. But long, long afterwards I noticed that pieces and racks were missing from both the range and fridge, and prevented me from maximizing their usage. But landlord is unable to replace stuff like that for everyone.
When a few things broke around here, I decided to DIY and rocked up to some hardware-supply websites and my local store. Come to find out, these items are special MFH brands, and ordinary mortals cannot obtain them at any price, or they're simply "always sold out" on the open market. And just think about all that's been discontinued or deprecated in 40+ years and landlords trying to conserve the costs of ripping out and replacing HUNDREDS of instances of those because they've become unmaintainable. Now think about landlords who install Amazon Ring or some cloud-based crap with planned obsolescence.
SFH owners can replace appliances and fixtures at a whim, at least more readily than a landlord could, and the costs are all pushed directly to the consumer in SFH cases, so a homeowner should be as savvy in order to map out their long-term maintainability.
And I realized that it would be a disservice to landlords if tenants could indeed DIY, because we'd stop reporting damage or breakage to the office, and self-repair can be horribly detrimental, and landlords have a right to know what's going on with their fixtures and appliances. So I was rather relieved to find out that I simply couldn't replace parts at my own expense.
> This emphasis on single-family homes in their data sources affects the generalizability of their conclusions about the impact of supply constraints across different types of housing markets, especially in dense urban areas where multi-family units and rentals are more prevalent.
But that's what people are typically complaining the most about, so fair enough that they focus on it.
> They also only go as far back as 1980. The difference between supply constraints between 1980 and 2025 is very small compared to the difference between 1965 and 1980. Take Los Angeles as an example [1]. The zoned capacity of many metro areas was dramatically reduced by the mid 1970s.
That' supports their point though, if the supply constraints differences have been small between 1980 and 2025, but the house price increase has been large, then supply constrains can't really explain house price increase? Or am I misunderstanding your point?
> These results challenge the prevailing view of local housing and labor markets and suggest that easing housing supply constraints may not yield the anticipated improvements in housing affordability.
If their finding is that increases in incomes leads to increases in demand which then increases prices, that’s not surprising. But their claim is that reducing artificial constraints (onerous land use regulation, discretionary entitlement and permitting, etc) would not have any impact on the supply curve. That’s highly suspect.
To make a plainly true statement which sounds similar to the paper title, "Increasing Incomes Coupled With Supply Constraints Explain House Price and Quantity Growth Across U.S. Cities." Spot the difference.
No it is why malicious research designed to mislead is useless. This research was done with the goal of reaching a particular conclusion, clearly. You can do that with any subject.
this is actually just several different comments I made on Bluesky yesterday about this paper, but I combined them into one comment here so that's maybe why it's a little weird. https://bsky.app/profile/josh.hawn.xyz/post/3lkopsdsxis2j
Specifically because the paper is about house price, not rental price. For most people, the issue of achievable secure home ownership is different to rental affordability.
> multi-family housing units
Not really the kind of place that most people want to buy to live in for the remainder of their lives (unless starved of options).
home ownership is directly tied to rental affordability, as the rental market is always going to be the alternative. Even if people aren't perfectly rational agents, everyone has their own subjective present value function or heuristic to compare the cost of owning vs renting. They may be separate forms of tenure, but they do in fact compete with one another on price/value. If the price of alternatives to ownership were to fall, the price homebuyers are willing to pay would also fall.
> [multifamily housing units are] not really the kind of place that most people want to buy to live in
this is a descriptive norm - observed or perceived behaviors, preferences, and trends among a group of people who, typically, don't really have a choice to buy anything other than a detached house. Family-sized condos are actually highly sought after in dense urban areas where a detached house is an overt luxury, while in suburbs and rural areas they're a rare choice simply because it's illegal to build them.
People respond to incentives. I would rather live in a SFH for the same price, but I live in San Francisco, where that's absurdly expensive. When people talk about the proposed Sunset Tower, claiming "who would ever want to live there" my response is always, "me." If my needs are met by the units, and units are at a discount to the surrounding SFH's, I'd live there in a tower in a heartbeat.
I used to think this. Then I lived in an apartment for many years, and then I left. There's a big contingent of owner-occupiers in apartment buildings who don't stick around. It's just not a healthy way to live long term. I'm sure there are anecdotes from people who have stayed 5+ years full-time in an average apartment, and enjoyed it, and didn't yearn to be able to walk outside without being greeted by a (sometimes broken) elevator, or get a decent cross breeze of fresh air, or have access to sun all day long, but I'd wager they are the exception to the rule.
Yeah, like I was. Apartments are liminal spaces. Most people with an option leave after they realize this after some years. Even if you're one of the exceptions, you couldn't be sure of that until you've lived that lifestyle long enough.
I feel like you are trying to draw a false equivalence in both directions to create a loaded question. Obviously the parent is comparing housing of approximately similar value, with different densities and local amenities. My answer is neither: I don't want to live in and maintain a massive mansion nor have to drive 20+ minutes to do literally anything in Bal Air. I'm also not interested in living in apartments which are often not representative of the advantages of urban living because they are frequently built away from transit and business districts.
would you rather live in poverty or be wealthy enough to afford one of the most exclusive neighborhoods in Los Angeles? lol
A better comparison might be: would you rather live in a 4,000 sqft mcmansion in Santa Clarita or a modest 1200 sqft 3 bed 2 bath condo in Santa Monica?
> would you rather live in poverty or be wealthy enough to afford one of the most exclusive neighborhoods in Los Angeles?
What's that rhetorical question even relate to? Will increasing housing supply somehow make everyone more wealthy? The OP article claims not, and that's because that stock is going to rent-seeking investors, not buyers.
> A better comparison might be: would you rather live in a 4,000 sqft mcmansion in Santa Clarita or a modest 1200 sqft 3 bed 2 bath condo in Santa Monica?
Long Island vs condo in Manhattan wasn't really on even footing either.
Doesn't everyone want to touch grass or have decent access to fresh air and sunlight? I guess if we could hypothetically build really cheap apartments deep underground, it would be sad if people didn't want to live there?
I've lived in an apartment for a few years, and those were issues for me. The stumbling block of having to wait for an elevator and walk across roads to get to a park was enough to stop me from going. It's not the same as simply walking outside the door. Other apartment buildings blocked out natural light, even onto the park, and I had just a view to one side of the building. All this in a city that had terrible weather to begin with.
First of all, not having the energy to wait for an elevator (!!!) and walk across roads to get to a park sounds like depression. I hope that it was checked out. Or hey, maybe it was just the living circumstances but usually it's a complex thing, having to do with loneliness and general life issues.
Secondly, urban environments are very varied outside the US. In Europe the most frequent apartment buildings are mid rises, 4-6 stories high, which can make for incredible environments.
Shops everywhere, life everywhere. People going about their business, easy access to everything.
Thirdly, that "touch grass" argument is ridiculous, even in the US. 90% of front and backyards I've seen are... just grass. I don't know if it's due to people or HOA being cheap or regulations, but there's a dearth of shrubs, hedges, trees, general greenery. You know, the type of green stuff that makes life worth living, not just sterile, manicured lawns. And those are exactly the things that aren't missing in most urban parks. Yes, you have to share the space, and that's fine. In most places not overrun by homeless people and drug addicts (much bigger problems in the US than in most other developed countries), parks are just lovely.
And in many places multiple apartment buildings share the same common backyard, which is a lot larger than what a single family home in a suburb will have, and that will be a semi-private mini park, just for residents.
Behaving like it's crazy for people to want to live in apartments, globally, is truly sad.
Apartments don't require as much maintenance. They can offer nicer views, especially higher up. They are generally in walkable and bikeable areas with easy access to everything... The benefits are innumerable, especially for kids or the elderly.
Edit: Oh, North America is particularly dastardly, for a developed region, in creating urban hell landscapes. I tried walking from the Las Vegas Strip to Downtown Las Vegas. I took the monorail to the end and then figured I'd walk the remaining distance, which is not huge (something like 4km). I turned around after about 20 minutes, even though the weather was awesome. It's incredibly how such wealth can create environment were an average person outside of a car is constantly under assault from noise, pollution, bad sidewalks full of debris, glass, etc. and the environment is so barren and devoid of beauty.
> First of all, not having the energy to wait for an elevator (!!!) and walk across roads to get to a park sounds like depression. I hope that it was checked out.
HackerNews, the bastion of decorum. To use your unqualified depression diagnosis as a rhetorical device (let's be honest, this was not a sincere display of concern), is gobsmacking. And I'm sure you said this after pushing the downvote button with great moral conviction, surely because of concern for your fellow human being.
Anyway, it's incredibly presumptuous that you'd think I didn't visit the outside world regularly. But certainly, living in a shoebox can be a recipe for depression, which can cause people to withdraw from the world. You're no doubt aware of hikikomori, a mental illness, strangely enough, most prevalent in one of the most dense population centers in the world.
> In Europe the most frequent apartment buildings are mid rises, 4-6 stories high, which can make for incredible environments.
Are you writing the brochure? I know what low-rises are. And I'll agree they're better than skyscrapers. The european ones in particular have central staircases instead of fire escapes, which is great, because the lifts are usually ancient, broken, and cramped. You'll get decent light, because zoning restrictions keep building heights within limits. You still won't get decent air flow, but they are sometimes passively ventilated owing to the age of the building. This is of course nothing like the sad cheap crap that's built today in modern city. But dream on about the rustic Parisian apartment.
Have you at least lived an apartment lifestyle full-time for a few years, or is this just coming from your speculation of what it's like? If it's just speculation, please spare me.
> Have you at least lived an apartment lifestyle full-time for a few years, or is this just coming from your speculation of what it's like? If it's just speculation, please spare me.
I've lived my entire lifetime in apartments, ranging from Eastern European panel blocks to ultra modern high energy efficiency ones. Heck, if we go the "spare me" arrogant route, based on my experience with apartments I can probably show you a thing or two (or two hundred...).
I haven't even downvoted you, because I can't. It's some sort of HN mechanism. I'm fairly sure you're the one that downvoted my original comment, though.
As usual for any type of housing, you need to choose where you live.
Claiming that everyone wants to live in a single family house is, again, just sad.
Single family houses in walkable and bikeable areas with easy access to daycares, kindergartens, schools, corner stores, super markets, pharmacies, coffee shops, cinemas, theatres, ... are insanely expensive and most people can't afford them, so the only relevant comparison is between:
Single family houses in suburbs versus medium sized apartments in urban areas.
In most of the rest of the world you can pay comparable rent (or comparable purchase price) for a decent apartment in a mid-to-high density area versus a decent house in a suburban area.
> is gobsmacking
So was your comment. You attacked my initial generic comment with a purely personal and emotional personal perspective. I think in real life terms it would be akin to what's called "emotional blackmail" ("look how hard it was for me in an apartment with bad weather" - WTF, did the apartment cause the bad weather?!!?? :-)))))) ).
Anyway, this is useless.
* * *
Again, some people prefer to live in houses, some prefer to live in apartments. Both should be built to decent standards and no one should enforce most others to live in one single type (Europe is better than the US in this regard, in the US basically everyone is forced to live in single family houses in suburbs - something crazy like 80% of buildable land is legally zoned to be only used for single family houses).
> I'm fairly sure you're the one that downvoted my original comment, though.
Turns out we're both mistaken. I don't care much for HN's monopoly money, my broader point is the righteous indignation around the point (which I thought uncontroversial) that the vast majority of people don't want to purchase apartments to live in for the rest of their lives.
> You attacked my initial generic comment with a purely personal and emotional personal perspective
Erm, no, you basically implied I was an idiot - the sarcastic "bastion of logic" comment - and then straight away moved onto a feigned interest in my welfare. When someone contradicts themselves this much, they aren't being sincere.
> I've lived my entire lifetime in apartments
And given only one chance to purchase a property, and given only the choice to live in the one house with a garden or live in the one apartment of equal quality/amenity/etc for the rest of your life, which would you choose? Honestly? And what do you think the vast majority of people would choose?
The only reason people around here are all mad about urban density is that their FAANG bosses compel them to come to the office. Take that out of the equation and then the housing affordability solves itself by dispersing the high income people into better housing, and leaving better options for everyone else. The overpriced hipster cafes will have to shut down, but I shed no tears for them.
> This is such a true, yet sad, reflection of American society.
This was your original reply:
> Doesn't everyone want to touch grass or have decent access to fresh air and sunlight? I guess if we could hypothetically build really cheap apartments deep underground, it would be sad if people didn't want to live there?
You went from 0 to hyperbole in 20 words. So I called you out.
> And given only one chance to purchase a property, and given only the choice to live in the one house with a garden or live in the one apartment of equal quality/amenity/etc for the rest of your life, which would you choose? Honestly? And what do you think the vast majority of people would choose?
You're acting like a 12 year old.
Most people chose based on location. They want to be close to stuff they need for themselves (work, necessary amenities, entertainment) and for their kids (school, necessary amenities, entertainment).
Once they've figured out the rough location(s), then they triangulate based on that.
In an ideal world, sure, everyone would have a huge mansion with a huge front and back yard, with either servants helping them with their every wish, or stores and all necessary things within 1-2 minutes of walking.
But again, we're talking about reality and compromises.
Personally I chose an apartment and many others do the same. It's not just about offices and "mad about urban density" for offices. You can't have tons of pharmacies nearby in Nowhereland. Notaries, theaters, shops, cafés, supermarkets, cinemas, clinics, hospitals, etc, etc.
As the average person, if you want the best facilities in any given area to be easily accessible, you have to live in a city. The financial math for that only works with mid to high density. It doesn't even have to be the stupid US residential skyscrapers. Mid density only requires rowhouses to begin, duplexes, stuff like that. 4 story apartment buildings are more than enough to hit densities that can sustain a very complex service economy for the locals.
In sane countries, that means living in an apartment (at least 50% of the time). Or you go the US debt-fueled route and see how that pans out in a few decades. Go check US big city budgets and their debt service evolution over the years.
> But again, we're talking about reality and compromises.
Okay, now this I'll agree on. Apartments are compromises.
> 0 to hyperbole
You might have confused a thought experiment with hyperbole. I'm not saying the hypothetical is reality. Compromises (your word) are by definition not the ideal. It would be strange to prefer the compromise, or to not be just a tiny bit 'sad' about having to make it.
> You're acting like a 12 year old.
Of course. You know when the ad hominems start you're definitely conversing with an grown-up.
Again, what you're reacting to is another thought experiment meant to tease out what your beliefs are.
> if you want the best facilities in any given area to be easily accessible
I also agree that density can make certain important amenities closer, like food stores, and medical facilities—also 20 flavors of cafes and microbreweries in walking distance. They also increase congestion making those amenities not as close as they seem, and gardens are harder to get to.
(And yes, lifts factor into this. They take time to reach you, to take you ground floor. They are also sometimes out-of-order, and this is tragic in a mid-rise where this happens often enough to be a problem and there's little redundancy. Limited passage is also a huge problem in an emergency situation, particularly for people with mobility issues. etc. etc.)
> The financial math for that only works with mid to high density.
But... to bring it back to the OP - we're talking housing cost. That is, regular people, buying somewhere to live, in a way that eventually unshackles them from paying for shelter.
Cities are overburdened. I've noticed a lot of SV and NY FAANG types get triggered by this, and blame the NIMBYs, but not without considering their own culpability. It's the 21st century, most of the overpaid service workers don't really need to meet face-to-face to get their business done, and they could disperse, and divest themselves from their spare properties.
The central thesis of the OP article is that housing cost is driven by income, and if you look at NY, which is basically SV + density in terms of high-paid service workers and skyscrapers, and TFA seems to be right.
There has just never been much reason to believe that supply constraints were the primary driver of housing price increases. If they were people would have moved, or somewhere would have ended up being a lot better.
It used to be that housing costs tracked incomes. If you had a medium to high salary you had decent housing. Since the 90s with urbanisation and increased wealth not only do more people want to live in the same places but some have a lot more to invest. So you now need high wealth to have decent housing.
What many really want is housing below market rate so they either don't have to work thier entire lives or can also become wealthy, and preferably both. Which is understandable but not realistic.
Anyone who doesn't believe this should note that this has already been discussed on HN for at least 10 years and still hasn't been solved anywhere I know of globally. But instead still roughly tracks local wealth (and income). And will likely continue to do so.
Because that is what the housing market does. Allocates valuable assets to those who pay the most. Nowhere on the tin does it also say that it promotes social mobility or equality. Maybe it should, but it certainly won't as long as there is the idea that it already does.
That said, is there some effect of supply constraints? Sure. But ultimately it would increase urbanisation, making the situation worse. Affordable housing is already available on the market. Just in places with lesser jobs and living conditions. Which again it is understandable that many don't want to live in. But it isn't a market issue.
> If they were people would have moved, or somewhere would have ended up being a lot better.
sorry, I am not going to bother reading the rest of your comment before writing this reply because reading this part stopped me immediately.
Gentrification and displacement has been a growing issue for decades. Especially in California, people who grow up here can't afford to stay here and end up moving from high cost coastal areas to exurbs in the central valley or inland empire or just leave the state entirely for places like arizona, nevada, texas, or beyond. These are the places that have been growing most over the past couple of decades. Population in the high-cost areas may be increasing too (or at least staying the same) but that's because higher-income people who can afford it are willing and able to move there.
Probably better to say "expected to" rather than "supposed to". The problem is that income growth is not evenly distributed across the income curve, but instead increases up the curve. So the net effect is that fewer and fewer high income entities own a greater and greater proportion of the housing, and lower income levels are increasingly forced to rent, or---at the extreme lower levels--go without housing. As a matter of public policy, this is not what we want to happen, though I'd agree it is what we should expect given current policies.
What gets me is that, ABC reported on this report at the time, however whenever they do one of their "Housing Market" expose pieces its never brought up, focusing instead on some foreign expert who says the supply is fine.
So you get this completely bizarre reporting that jumps from one side to the other depending on the latest person speaking to them.
Depends on the nature of the piece, the amount of free time to expand, and contextual relevance.
ABC Australia, over a long period of time, tends to be balanced and to prefer presenting stories with more domain contect than just a single 'nugget' of isolated current event.
That said, they've taken quite a hit on funding in the past decade (and more) and have suffered bouts of unaligned management (seeking to rip down and diminish public broadcasting as a goal).
That aside, the nature of current nugget reoporting is it's a fact (at some point in time) that a report with a particular take on housing was just released, at another time it's a fact that senior political figures and government policy advisors are touting some 'expert' who has a contrary position.
That puts the onus on the viewer to thread together their own big picture and open Media Watch to frame what's going on.
In an ideal Australia the ABC would be better funded and there would be several hours more a week of good investigative journalism across a fange of subjects.
I dont feel like its intentional bias, but theres an implicit bias when your organisation is largely responsible for training all the new journalists in the country.
Like I dont expect some young journo writing a longer docupiece on the housing market to have researched it to the depth I would like.
But, I expect ABC as an institution to have an institutional memory longer than 12 months.
>Because that is what the housing market does. Allocates valuable assets to those who pay the most. Nowhere on the tin does it also say that it promotes social mobility or equality. Maybe it should, but it certainly won't as long as there is the idea that it already does.
You've hit on the hard reality that neither political side in the US has been willing to squarely face. The housing crisis is not the result of housing policies (though as you say there is probably some marginal effect there). It is the entirely predictable result of unregulated capitalism. In an unregulated capitalist system (defined as a system without any regulation on the accumulation of wealth), income growth accelerates with increasing wealth, and all assets are increasingly owned by a smaller and smaller fraction of the population.
This focus limits their analysis by not fully accounting for multi-family housing units or rental markets, which are far more significantly impacted by supply constraints.
This emphasis on single-family homes in their data sources affects the generalizability of their conclusions about the impact of supply constraints across different types of housing markets, especially in dense urban areas where multi-family units and rentals are more prevalent.
They also only go as far back as 1980. The difference between supply constraints between 1980 and 2025 is very small compared to the difference between 1965 and 1980. Take Los Angeles as an example [1]. The zoned capacity of many metro areas was dramatically reduced by the mid 1970s.
[1] https://www.lewis.ucla.edu/wp-content/uploads/sites/17/2020/...