Lessons from ten nations about building affordable, low-carbon neighborhoods
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Think about this: "every investment property requires a renter". It's the perfect embodiment of social/financial divide.
Radical idea, extremely unpalatable to many people: governments should ensure that anyone who wants to buy a house can buy a house by lending them the money. Consider Denmark doing exactly this: https://www.smh.com.au/business/banking-and-finance/denmark-...
I think it is a Russian saying "the fed do not understand the starving". i.e. anyone who owns a house has no empathy for those who don't.
But why the fuck should everyone not own a house who wants to? The disabled should be able to. Teachers should be able to. Firemen and policemen should be able to. Childcare workers should be able to. Instead, many people simply will never be able to own a house.
And the people who make the decisions - the politicians - are "the fed" - they all own at least one house often many.
Here in Australia the governments are all on a mission to make housing ever more expensive - fuck them.
I also can't see a single reason why overseas buyers should be allowed to buy real estate unless they are citizens or permanent residents.
I'm hoping one day governments will be voted out because people can't buy a house.
Housing...... should be for people and should be the basis of an equitable society in which everyone gets to own where they live.
Instead, all that counts here in Australia anyway, is .... money money money money.
There just shouldn't be people owning more than 2.
But, let's say that were the case, somehow. Why is your solution to stop people from owning more homes, rather than letting more homes be built? Why choose austerity over abundance?
There's a clear reason to choose austerity: it always, literally always, privileges existing power over those with less. However, most people who want to entrench existing power and oppress those with less don't admit it openly, instead they couch this undesirable anti-egalitarianism in obscure arguments to hide their true motives.
This is the stage we are at in California. People who have gained enormous real estate wealth through luck, which has let them exploit an entire class of extremely productive workers, know they can not create abundance on their own, but must instead farm workers like cattle. So they embrace this austerity couched in other terms.
Limiting people from owning more than one home will not actually produce enough for everyone that wants to live in highly desirable areas. But forwarding unworkable proposals will continue to create luxury goods (housing near food jobs) as luxury, rather than opening them up to more people.
Indeed, abundance is the way to go, then why bother investing? An anecdote - There was an oversupply of apartments in my city a few years ago, prices were dropping - oh no! So the response? Developers stopped building, there are foundations sitting around in a number of places that were planned to be built, but apartment development has basically stopped in the city. In a few years there'll be a shortage and no doubt the developers will start up again. The incentives are all screwed up, if they kept building then prices would drop, but the profit isn't there at the moment so they sit idle.
I 100% agree that incentives are all screwed up. But I think we should fix those incentives, rather than double down on a bad system by embracing austerity.
Another problem is that construction productivity has been going down in our economy over the past few decades, while manufacturing productivity increases. A lot of that is the bad political process that cities use to block new housing with discretionary approvals, and the other half is the huge cycles of building and not building that gut the workforce, make it difficult to find steady employments, and cause huge swings in supply and demand.
Personally, and I know this may not be a popular idea here, support a well-funded publicly owned housing developer to build social housing, that builds countercyclically to use the labor pool when there is lower demand, and build less when market forces suddenly pick up. Smoothing out this process will increase economic efficiency greatly, in addition to moving towards an abundance model rather than our austerity model, which is oddly embraced by both the right and the anti-development left.
I've had similar thoughts, there was an overbuilding of these sorts of apartments in the 60's and 70's which resulted in inner city ghetto's though.
The problems were poor construction, lack of maintenance, poor citing away from any sort of economic opportunity, and perhaps most of all racial segregation.
Any sort of modern effort would have to mirror Singapore or Vienna, where the housing is for people of all incomes, and wealthy people's rent cross subsidized lower incomes, and everybody lives together.
Another thing about "only luxury," that means there's a regulation failure that only allows luxury homes to be built. We have a market system that means that the rich get served first. So if it's cheap to build, but only super expensive units come on the market, those who approve or deny building are letting too few units be built.
In expensive markets like California, profits are typically around 10%-25%, no more than a few year's worth of housing costs rise.
Therefore it's far easier to make money by buying and holding in California than through construction; higher profits and less risk.
Largely true, except that by renting it directly you're also paying the additional profit margin for the middleman who took out the mortgage (rented the money) for you to be able to rent it directly.
However we also still need __way__ more housing to get out of the 2 generation debt in many places and 3-5 in E.G. major Californian cities.
This would incentivize ownership since renting out would be prohibitive. But for anyone who'd like to rent, those extreme taxes will just be passed on to them.
I think a possible solution to a lot of that problem is one that, by a tragic irony, we have COVID-19 to thank for making mainstream: remote work. If people's housing locations weren't tightly coupled to their job locations, there would be a lot more freedom for people to choose a place to live and places to live would be forced to compete on a more level playing field.
Dense development with public transportation does for society what increasing the component density and shortening wire length does for integrate circuits. There is no substitute.
"We" have all kinds of different needs and desires. Not everyone wants to live in a densely populated area.
In any case, uncoupling the location of your home from the location of your job should improve your ability to live closer to the people and places you want to be close to in your personal life. That would go for everyone, those who want to live in densely populated areas and those who don't.
You don't get to decide what counts as "decadence". Nor are cities subsidizing suburban and rural areas; in most cases it's the other way around, it's the cities that continually get themselves into financial trouble and have to be bailed out, and the suburban and rural areas that are fiscally responsible.
> It's not a personal choice that doesn't effect others
Neither is your personal choice to live in densely populated cities.
> Development is a collective choice
And when there are significant sub-populations with widely different preferences, the right collective choice is to separate the sub-populations so each can have their own areas where they can implement their preferences, not for one sub-population to force its preferences on everyone else.
I don't, but the accounting does.
> Nor are cities subsidizing suburban and rural areas; in most cases it's the other way around, it's the cities that continually get themselves into financial trouble and have to be bailed out, and the suburban and rural areas that are fiscally responsible.
This is completely false.
It seems that way because of cities offering extra services get hit with austerity first, but the base line is is not no net subsidization. You are just observing cities being unable to fund those services and subsidize the suburbs at the same time.
Google "cities subsidize suburbs" and find things all across the political spectrum. For example, on the more right:
https://www.strongtowns.org/journal/2020/4/16/when-apartment...
https://www.theamericanconservative.com/urbs/we-have-always-...
in addition to the original article on the left.
> And when there are significant sub-populations with widely different preferences, the right collective choice is to separate the sub-populations so each can have their own areas where they can implement their preferences, not for one sub-population to force its preferences on everyone else.
If suburbs can function without my money and without leaking their pollution in my air water, sure. But that is not possible.
Assuming your facts are correct--I have seen factual claims all over the map on this, and government subsidies and favoritism are all over the place, not just in favor of suburban homeowners--this is still not an argument for forcing everyone to live in densely populated cities. It's an argument for removing government subsidies and favoritism. Which I am completely in favor of doing; I'm quite willing to pay whatever the actual costs are of living where I want to live, and factoring those costs into my choice of where to live. What I'm not willing to do is force my choices to conform to someone else's idea of how people should live.
> without leaking their pollution in my air water
Where is that coming from? Certainly not from the references you gave. And if you think cities don't pollute, I don't know where you're getting that from either.
Would love to see a counter argument if there is one
> government subsidies and favoritism are all over the place, not just in favor of suburban homeowners.
There are many subsidies, but the magnitudes differ. Note it's not only home ownership subsidies, but zoning and other regulations, preference for building highways and not trains, low gas tax and lack of carbon tax, and many other such things.
The strong towns people also talk about longer and improperly financed pumbling and electrical lines, etc., but I don't know as much about that.
> Which I am completely in favor of doing; I'm quite willing to pay whatever the actual costs are of living where I want to live, and factoring those costs into my choice of where to live.
Great! But watch for big changes if this happens.
> This is still not an argument for forcing everyone to live in densely populated cities.
It doesn't need to be coerced, and properly accounting the externalities alone would make me quite happy too.
But some things like public transit the market just cannot do. The portion value captured is too small a portion --- while the operational costs can break even the capital costs might take > 50 years to recoup --- so that conventional finance says no. And that's not to say it's not worth, but it's a level of "risk" that even for truly great efficiency the private sector won't stomach. Also it is a natural monopoly so it would have to be regulated to death anyways if was privately run, basically defeating the purpose of trying to involve a market.
Also, note I said density not size. If people want to live in a https://media.timeout.com/images/103639693/1024/576/image.jp... in the middle of nowhere and there is a train running to it, that's fine with me.
> Where is that coming from? Certainly not from the references you gave. And if you think cities don't pollute, I don't know where you're getting that from either.
No not those sources but suburbs have far higher energy usage because the inefficiency of the sprawl and large homes, and even if we electrify everything with good power sources, there is tire pollution of electric cars, environment issues from the shear amount of land being taken (e.g. drainage like we saw in Houston during Hurricane Harvey).
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Bottom line is suburbs can work, but at great efficiency costs, so you have coordinate globally and fixing all our externalizes, and sacrifice the wealth that would come from greater efficiency in a rather heavy de-growth way, and probably rely on a shrunken population. In other words, if we were to do everything else right, this would be a "luxery" we can maybe get away with the next century.
But if so, what's the point? What's the point of individualist- nuclear-family-ist- vineer of that suburbanization if behind the scenes there is massive collecitivism to enforce everything to need it work? I do hope there is a time after this big mess of unsustainability to have more "ethical luxeries", but I can't imagine suburbanization would be one anyone would want at that point.
Sure it can. Many major cities in the US had multiple competing private companies providing public transit, and doing it quite efficiently and cheaply, up until around World War II. Then governments took over, drove the private companies out of business, and proceeded to make public transit in the US the mess that it is today.
But even with all that, private companies can still provide efficient public transit in the US today--if they're allowed to use buses traveling on roads to do it, instead of rail. For example, in the area where I live, a privately owned bus company was providing affordable bus service, faster than a driving commute, until the government stepped in and forced it out of business, in favor of a huge white elephant project to extend the rail system, giving people a longer commute (1 hour or more from train station to work, vs. a half hour to 40 minutes from bus stop, at the same location, to work) at a higher price (even though the rail system is government subsidized while the bus company was not).
> What's the point of individualist- nuclear-family-ist- vineer of that suburbanization if behind the scenes there is massive collecitivism to enforce everything to need it work?
You don't need massive collectivism to make suburbanization work. You need massive collectivism to make urbanization work. And the only reason we use the term "suburban" at all in the US is that we've urbanized so much. Before the massive urbanization of the US in the mid to late 20th century, the places we now call "suburbs" were just towns--towns that had developed naturally through freedom of choice and cooperation among people who wanted to form communities. Urbanization is what killed so many of those towns and destroyed what used to be a well functioning system of communities in favor of massive collectivism.
> this big mess of unsustainability
The claim that any lifestyle but an urbanized lifestyle is "unsustainable" is nonsense. What is unsustainable is massive collectivism. Massive collectivism killed more than a hundred million people in the twentieth century. It doesn't work.
I believe in private property as a right, fundamentally so, but it's just ridiculous at the moment - especially if you consider that voting systems are usually biased towards those of us who are older, richer, and often suburban or rural - this massively skews the incentives for politicians.
Taking a step back, flows are good, stocks are bad, unless there is a "real" capital investment at stake. Ownership, a single payment (ignoring morages) for indefinite rights, is a very weird financial instrument (note the contrast between "forever" and "single" transfer). It's funny fiction that just complicates the math.
Rents, a flow, are actually good. The problem is not rents but rentierism, i.e. when rents flow to owners (to stock) regardless of productive investment. The solution is to move away from equity to debt base financing: The constructors of the home are paid a fixed profit (fixed interest) and nothing more (bounded stock), buildings are coops (no ownership distinct from residency) and rents continuously replenish the maintainence pool after the construction debt is paid (flows all the way down!).
Again, speculation on finite land post construction investment recoupment is a cancer that has no place in the public sphere.
People who like "actually existing capitalism" are being severely uncreative with the math.
We already have that in the US. And it helped to crash the economy back in 2008.
(Yes, technically the government just prints the money and on paper it's private financial institutions doing the lending. Same difference.)
I dunno, negative central bank rates sounds a lot like the financial insanity that caused the crash to me. I guess we'll just have to see how it plays out.
I hope some smaller countries start experimenting with true socialist policies. We need a Venezuela every few years to remind us why it’s such a terrible idea.
This is explicitly cited in the private equity SEC filings that buy single family homes and rent them out: the PE forms know that rents will continue to rise because existing homeowners control the political process that would prevent that rise: allowing more housing.
This is classic economic rentierism that harms everyone that is not profiting from the artificial scarcity.
I feel guilty having profited so much off of something I now perceive as somewhat immoral, but I also feel completely powerless. How can someone like me influence politics enough to steer this ship back towards affordable housing?
It’s basically scalping but you’re scalping homes people could live in.
I had a chance to take on their business and was eager with dollar signs in my eyes but my wife couldn’t stomach the ethical implications so we didn’t. Maybe we will receive some inheritance; maybe we won’t but I’m proud of her resolve.
Well, no is forcing you to do it and it's your choice whether to continue or not.
> How can someone like me influence politics enough to steer this ship back towards affordable housing?
There are national nonprofits that acquire, manage and develop property for affordable housing[1]:
> Mercy Housing is one of the nation’s largest affordable housing organizations. We participate in the development, preservation, management and/or financing of affordable, program-enriched housing across the country. We acquire and renovate existing housing, as well as develop new affordable rental properties.
Here's who they help[2]. Perhaps you can donate or sell property to them.
You already have and stand to inherit resources a good chunk of the country dreams of...and you feel powerless? You own those things. You control them. If you want something to be different, do something different.
> How can someone like me influence politics enough to steer this ship back towards affordable housing?
Small steps. Do what you can with your resources. Your existence and how you live your life is the biggest political move an individual can make. The article is about expanding the scope of problems to solve them, but that logic is for institutions. As an individual, think individually. You defeat yourself by growing the problem scope into something requiring state action.
Specifically since you own and will own real estate: convert your properties into section 8 housing. It has a bad stigma and everyone worries about terrible renters, but I've had worse luck with non-section 8 tenants than friends have had with them.
Interestingly, this is common ground with NIMBYs. They just interpret the conditions surrounding their home as part of the living situation they need to secure.
Strong coastal city bias in your post. Most places outside major cities have very affordable housing, especially given today’s interest rates.
What you mean is that people should live wherever they want and others should foot the bill for them living in desirable areas.
- https://www.youtube.com/watch?v=Ave4FiC2k8I&ab_channel=LifeW...
- https://www.youtube.com/watch?v=eK--oCVP18A&ab_channel=LifeW...
- https://www.youtube.com/watch?v=kBPyN3LE65g&t=1s&ab_channel=...
- https://www.youtube.com/watch?v=OUNo06G3BeQ&ab_channel=LifeW...
- https://www.youtube.com/watch?v=iM49O5CxlAk&ab_channel=LifeW...
- https://www.youtube.com/watch?v=OUNo06G3BeQ&ab_channel=LifeW...
there are several other extremely informative videos about housing in Japan on this channel. all are worth watching no matter your interest in Japan.
Imagine that to get a pothole repaired you had two choices: 1. petition town hall 5 miles from the pothole; 2. petition the state house 400 miles from the pothole. Which seems more practical?
Ask people in eastern Oregon how confident they are in western Oregon's understanding of their needs. Ask people in southern Utah if they think politicians in northern Utah understand their issues. Ask anybody in Arizona outside of Phoenix whether Phoenix exists on the same planet as they do.
In Sanbonmatsu, Nara prefecture it makes sense to require all trees to be cleared away from all buildings. In Yokohama, Kanagawa a rooftop park would be awesome.
But there are parts of Sanbonmatsu where firebreaks aren't necessary. Why on earth should local officials have to ask somebody 500 km away for permission on that zoning? Are locals too stupid? Are people in Tokyo just that much brighter?
In the U.S. this is very often used for political coersion. Collect taxes from all the far-flung peasants, then give them back money to hire school teachers only if certain conditions are met. Attach strings to all the federal money that came from local pockets to begin with. Need a new fire station? Don't look locally; get your senator to put in a little earmark for you to fund that from Washington, D.C. Just as long as your state agrees not to ban oil fracking.
I want my graft and corruption to be local. Local corruption is always less expensive. It's not practical to demand national-scale bribes.
In the US, things like first past the post (FPTP) and the electoral college hamstring governance at all scales, but especially larger ones. And this culture of mediocrity kneecaps our imagination. Have a good proportional representation, and you'll quickly realize that there is more diversity of politics within than between today's constituencies.
In simple terms, rather than bribe the Joe Manchins, we should make it cheap for everyone to move to the prosperous cities, and turn the depopulated hinterland into parks / tourism and agriculture.
I have lived in some very big cities and enjoyed it. But I prefer the depopulated hinterland. I don't want "city slickers" with your contempt of rural areas making the rules for "agricultural" areas. Locals should make the rules.
Surely you wouldn't want us hicks defining your city's ordinances. Tractors might always have the right-of-way and people should be mindful of neighbors when slaughtering pigs.
You seem to make some utilitarian argument that massive cities are the best for everyone's greater good. A lot of people outside those cities point to the last twelve months as contra evidence. I think it could be a fun conversation to have when well researched. But I really lean towards letting locals govern local. (Note: leaning. I see arguments on both sides.)
If you want to be rural give up:
- good postal service to every nook and cranny
- more federal dollars per person than the average for roads, firefighting in the west, etc.
- cheap gas
By all means, go ahead and be masters of your own existence. Otherwise, accept that we will figure this out together and stop relying on crutches like the electoral college and senate.
https://money.cnn.com/magazines/fortune/fortune_archive/1990...
It’s sort of a halfway house between renting and owning. As long as property values go up, both buyers and banks seem reasonably happy with the arrangement. Apparently the Swedish rental market is quite broken which led to this model, but I don’t know the details.
Why should Tokyo set zoning for Kagoshima?
If the feds said only 1 mortgage per household. And no federal mortgages for rentals, period. Then remove 1031b exchanges. The housing market would tank.
I've been reading a lot about public transportation lately, and these fit in very nicely.