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Comment by Zach_the_Lizard | Hacker News Reader

I think the Chinese billionaire effect might be real, but really the chief reason housing prices are so high is because we make it difficult to build housing. This is especially true in the most economically productive metro areas, such as New York and the Bay Area.

Even smaller cities such as DC are facing housing affordability crises. DC gained ~90K residents from 2005 to the present, but only gained ~12.5k new housing units in that time. If DC continues to grow, in the next 30 years DC will actually reach full buildout as allowed under current zoning and height restrictions. No additional units will be allowed.

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In fact you could argue that if foreign investors have bought all your available housing then by building more housing you solve the problem of affordable housing and devalue the housing sold to others (but you got the income at the previous level).

Here in the UK we need a massive concerted national effort to replace both the sold housing stock and the demand from an increased population - not going to happen though as neither major party is looking to be responsible for a house price fall (however beneficial in a net sense that would be) as the newspapers/media will beat them over the head with it.

So we continue the wealth transfer from the poor/young to the rich/old.

Consider Toronto as a counter example. That city tore down parks to build condos. That didn't rein in prices. Now, the affluent foreigners have 3-4 condos to go along with that Maserati.

DC has torn down a lot of things to build housing, and has converted former industrial properties into new neighborhoods (NoMA is an example). DC itself can't get rid of many of its parks because the National Park Service controls many of them, but neighboring jurisdictions certainly have gotten rid of parks in exchange for high rises (Arlington, for instance).

What matters isn't what was replaced, but how many net new units are built vs. demand for new units. DC is falling behind. I'd imagine that Toronto has similarly fallen behind.

The obvious counter-argument is that home prices would have risen even faster without the construction boom.

>in the next 30 years DC will actually reach full buildout as allowed under current zoning and height restrictions

Where there is a will: https://youtu.be/gjHo5BZM7V0

It would help if most of DC wasn't limited by zoning to 3 stories. Even allowing the legal maximum of 10ish stories would help a lot.

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