Housing Costs

[Ernie]

This is a thread specifically for Josh and Ken to discuss housing.

Anybody else is welcome to post here also.

[barnhart]

I think you have to put out bait to get at least one of them here. Then it's game on.

[Ken]

What it seems to come down to is that I believe that housing follows the standard economic rules of supply and demand like everything else in our economy from the price of eggs and wheat to the price of gas and automobiles.

Josh apparently does not.

And that if we want to make this country more accommodating for the next generation of young people and young families we are going to need more supply.

There are all sorts of other ancillary issues but that is the big one. It is a housing MARKET and it behaves according to the law of supply and demand like any other good or service.

[barnhart]

I agree with your main point. NYC actively opposes rising housing costs using market strategies and anti-market strategies like rent control or requiring a percentage of the total units produced to be "affordable housing" (rent controlled by the city). They are constantly rezoning for density, basically the opposite of the strategy of the cities you mentioned earlier. It causes a lot of opposition but once they decide, I have never seen it reversed.

I live 1/2 a block outside an area rezoned recently from residential to 14 floors. This causes a lot of stress, dislocation and change but that's just life. There are some big fat caveats, this applies almost entirely to areas with mostly poor people or immigrant populations. The areas where the long-term rich live are determined to be landmark communities of historical and cultural value and not subject to rezoning.

[Josh]

What it seems to come down to is that I believe that housing follows the standard economic rules of supply and demand like everything else in our economy from the price of eggs and wheat to the price of gas and automobiles.

Josh apparently does not.

I believe that government regulation (that people vote for) is part of a well functioning market, and in most places, people have voted for and want zoning. So before someone buys a single family home, they want to make sure that a liquor store or a high rise apartment complex doesn’t up next door.

Not all places are like this. Some people want to live in a place like NYC and are happy living there. Other people live in rural areas with no zoning at all.

I do not think the ideal state for man to be living in, or young families, is in ultra dense apartment buildings. Some people do want that and they are happy going to basically any city, NYC, or other places. Most people seem to want a yard and a bit of space and to actually own a piece of land.

I think individual families owning land is important and foundational to a well functioning democracy.

[Ken]

What it seems to come down to is that I believe that housing follows the standard economic rules of supply and demand like everything else in our economy from the price of eggs and wheat to the price of gas and automobiles.

Josh apparently does not.

I believe that government regulation (that people vote for) is part of a well functioning market, and in most places, people have voted for and want zoning. So before someone buys a single family home, they want to make sure that a liquor store or a high rise apartment complex doesn’t up next door.

Not all places are like this. Some people want to live in a place like NYC and are happy living there. Other people live in rural areas with no zoning at all.

I do not think the ideal state for man to be living in, or young families, is in ultra dense apartment buildings. Some people do want that and they are happy going to basically any city, NYC, or other places. Most people seem to want a yard and a bit of space and to actually own a piece of land.

I think individual families owning land is important and foundational to a well functioning democracy.

If you only want zoning that people voted for then 99% of the zoning around the country would vanish. People rarely ever voted to implement existing zoning rules.

I don't object to zoning. I don't want to live next to a gravel pit crushing rocks 24/7 or see a hog farm go up on my block. Zoning has its purposes. What I object to is how zoning actually operates in big west coast cities today where largely white, wealthy, and older people (usually liberals) use it to prevent any increase in housing in growing cities.

Just to give an example of a different city that I'm familiar with. Here is Seattle. I've outlined the actual city limits in red.



Metro Seattle has grown from about 1 million in 1960 to about 3.6 million in 2024. So that's 2.6 additional people.

During that same time frame the actual population of Seattle proper has grown from 557,087 in 1960 to 737,015 in 2020 or only about 180,000. The rest of the population growth has been pushed out to the surrounding suburbs and exurbs all the way up into the mountains. Why is that? Single family zoning was put into place by the city council in 1923 (with no vote of the people) when the urban population of Seattle was just 300,000 and the population of the greater Puget Sound region was only about 600,000. At that time cities around the country were rushing to implement single family zoning largely to prevent Blacks from moving into white neighborhoods and schools. This is well documented. You can look it up if you want.

Fast forward to the year 2024. I have a daughter who is attending university in Seattle and at some point wants to do biomedical research in the area. There are lots of biomedical research firms in the area but they are all in the central area and not way out in the distant suburbs. So where is she to live, especially if she wants to get married and start a family? Forty miles away and commute by car every day?

The greater Puget Sound area is projected to grow by 1.8 million people and 1.2 million jobs by 2050 which isn't that far away. My daughter will be in her 40s. Where are all those people going to live?

Return to that map above. How do you accommodate more people in Seattle while prohibiting any new housing in 2/3 of the city?

The reality is that 100 years and 5 million people later we can't keep pretending that it is 1923. At least not if we care in the slightest about the next generation. Although I suppose you are already a Seattle homeowner and have seen your property values go from $250,000 to $1.5 million in the past several decades because the city has rigidly constrained housing supply then I then I suppose it is all good.

What is YOUR plan for accommodating an additional 250,000 or 500,000 people in Seattle without addressing single family zoning?

Do you think Seattle is out of room? Just for the sake of comparison, here is 84 square mile Seattle versus Manhattan and Barcelona at the same scale



Here is the entire 2.1 million population city of Paris overlaid on top of north Seattle at the same scale. At 41 square miles, the city of Paris is less than half the size of Seattle.

[Josh]

Is Seattle a democracy or not? If the people don’t want zoning they can vote it out. (California did exactly that when it eliminated SFH zoning 4 years ago.)

I think you vastly underestimate how popular SFH neighbourhoods are. Don’t you live in one?

[ohio jones]

The greater Puget Sound area is projected to grow by 1.8 million people and 1.2 million jobs by 2050 which isn't that far away. My daughter will be in her 40s. Where are all those people going to live?

If there's no place for people to live, employers won't be able to fill those jobs and will move to a place where they can find employees. The job market and the housing market will reach equilibrium.

I'd rather stay at the Crowne Plaza than the Bob Hotel, I think. Although if one has to go to Paris, the Holiday Inn at Gare de l'Est is nice enough. They provide a bathrobe, the french doors actually open onto a small balcony, and it's convenient to several train and metro stations.

[Ken]

The greater Puget Sound area is projected to grow by 1.8 million people and 1.2 million jobs by 2050 which isn't that far away. My daughter will be in her 40s. Where are all those people going to live?

If there's no place for people to live, employers won't be able to fill those jobs and will move to a place where they can find employees. The job market and the housing market will reach equilibrium.

But the real world doesn't work like that because we don't actually have a free housing market. We have one that is artificially constrained by regulation. The housing market can't reach equilibrium because supply is artificially restricted by regulation while demand increases.

What actually happens is that young people become increasingly burdened by housing costs or face longer and longer commutes and are forced to make compromises that they wouldn't otherwise have to make if there were actually a functioning housing market that operated freely. And it is an inter-generational inequity since it is the young who suffer the most and the older generations who got in when things were cheaper who benefit.

Telling young people they should just move to Omaha or Wichita is no answer when they want to actually want to make the community they live and work in a better place to live.

This is all just theoretical for me and my wife. We bought our first house long ago in 1998 for $135,000 and have traded up and across as we have moved around the country since. I'm afraid that our children and grandchildren will not have the same chance or will have to make extraordinary sacrifices of life and family to do the same. What kind of family life is it if you leave the home every day at 6 am and don't get home until after 7 pm due to long long commutes? That describes a lot of people's lives. From a strictly selfish point of view my wife and I should be happy with restrictions that constrain supply in our region and drive the price of homes ever upward. According to Zillow our current home has appreciated 74% since we bought it 7 years ago in 2016. Good for us but not anyone young who wants to follow our footsteps.

The other thing I see around here is a lot of elderly empty nester types who are hunkered down in their big single family homes that are far too large for their needs and frankly a burden and expense to keep up. But they stay put because there aren't good alternatives for them to move to. All the other homes in the area are exactly the same by law. There is no ability to step down to some sort of modest townhouse or condo and stay in their same community with their same friends and neighbors because those forms of housing are illegal due to zoning, minimum lot sizes, minimum square foot standards and so forth. Which means they just stay put and there are even LESS homes available for families. My own parents finally moved into an independent living retirement home but it was 30 miles away from their previous home, church, neighborhood, and community because there was really nothing closer that they found suitable.

[Josh]

Ken, you make Portland sound like some kind of dystopia. There is vast amounts of housing choices here. If my parents wanted to, they could buy a condo, moved into a duplex, move into a 55+ condo, duplex, or apartment, or even get a special kind of “assisted living” where basically it includes things like a housekeeper.