Comment by rcme | Hacker News Reader

Comment by rcme | Hacker News Reader

This has the real possibility to destroy wealth and land value. I understand the desire for more housing, but you absolutely need people in the community to be making these decisions. State-level officials don't have the ability to make informed decisions on important local issues like this.

Unfortunately, I have first-hand experience with this. The state decided to build a (very) small bridge over a creek in my neighborhood. The purpose of the bridge was to make it easier to get to the highway. None of the residents wanted this bridge, but it was built any way. After the bridge was built, Google Maps started routing people off the highway during rush hour, creating gridlock and heavy traffic. As a result, you can't leave your house between 7-10 and 4-6. Walking on the streets is dangerous as drivers stuck in gridlock become increasingly aggressive towards pedestrians. And don't even think about trying to drive somewhere. It takes 30-45 minutes just to drive a few blocks.

The irony is that this "shortcut" doesn't save any time. Google Maps routes people from the highway into town up until traffic is so bad in town that it... takes just as much time as the highway. So the beauty of this small town was destroyed for literally no reason. Property values have begun to decline as it is no longer a desirable place to live.

Of course, prior to building the bridge, the state ran "traffic studies" that indicated there would be no impact to traffic in town. They had no incentive to really study the problem, however, as there are no consequences for them if they do a bad job.

Another way to say "this will destroy land value" is "this will lower housing prices". That's the point.

But reality is more nuanced than that; the cost/value of apartments will go down, but the cost/value of single-family houses will go up, as there will be interest in buying the latter and turning it into the former. Land values will go up; rent and condo prices will go down.

No, that's not what I'm saying at all. "Destroy land value" doesn't mean lower housing prices, or at least lower in a productive way. Imagine you have some land and then the city builds a dump next to the land. That destroys the value of the land because no one wants to live there anymore. Housing prices are a second-order effect based off of the land value and the availability of housing units. The new policy in California's purpose is to increase housing units, but has the potential to destroy the value of the land.

Multifamily housing is not analogous to a garbage dump.

"The study finds that the upzoning increased property values by 15-23%"

http://theadvocatecornell.com/2022/02/03/does-upzoning-work/

Again, I'm not saying that multi-family housing is akin to a garbage dump. I fully support more housing. But, the state officials making these decisions have no incentive to ensure that they're preserving the land's value. Any system that doesn't provide incentives for the decision makers to make good decisions ends terribly.

> This has the real possibility to destroy wealth and land value.

Good.

Treating increasing unaffordability as a good thing is an insane part of American culture. We didn't celebrate car prices going through the roof during the pandemic, and neither does it make sense to celebrate skyrocketing housing prices.

The ideal price of housing would be zero, same as other products.

No, not good. It doesn't make sense to destroy wealth. If you want to transfer wealth from one party (land owners) to another (renters) that's fine. The land itself has intrinsic value. It's fine to transfer that value from one party to another. But it's absolutely not fine to destroy it. Everyone is worse off.

Your argument is basically that we should start salting farm land to decrease its value.

Nah, that's ridiculous and you know it.

Destroying wealth because you've lowered the price of goods and make them more accessible, is not the same thing as destroying wealth by actually destroying the utility of something.

If I made a super food replicator that halved the price of food permanently, that would destroy much wealth in the agricultural sector, and it would still be a good thing for humanity as a whole.

Truth be told, the value of the land itself in these cities, I don't think will change very much. The value of the property on top of that land though, that'll probably change, as the total housing supply increases.

> If I made a super food replicator that halved the price of food permanently, that would destroy much wealth in the agricultural sector, and it would still be a good thing for humanity as a whole.

No, no wealth would be destroyed. Some of the old agricultural sector's wealth would be transferred to you. The rest would stay with the purchasers of food. Again, no wealth is destroyed when you make something more productive. In fact, your food replicator creates wealth because people get the same amount of food and have more money.

Again, I think you're getting confused by the concepts of destroying wealth and transferring wealth. In your scenario, you're transferring and creating wealth through innovation. In my anecdote, wealth was destroyed. It didn't go anywhere. It just ceased to exist.

I mean hey, sucks for the people that live there already, but it ain't happening to me so its not my problem!

This was exactly the attitude causing the problem in the first place.

The long term solution of housing being cheap is obviously superior to the long term solution of housing prices doubling every generation until nobody but the very wealthy can afford to buy a home.

My parents own a home in the bay area, so it does actually indirectly affect me. But so did leaving the bay area because it was insanely expensive (and similarly, almost everyone from my graduating class left too).

> This has the real possibility to destroy wealth and land value

Good. Housing is way too expensive, and people who have the luxury of owning housing, especially in California, could stand to lose some small percentage of their wealth if it means we can better provide a necessary part of life to someone less wealthy.

Bummer, but people aren't cars and builder's remedy shouldn't apply to bridges on public roads? You just named a good reason to ban cars nearby though.

The point is that the state made a decision for the state’s benefit without considering the impact on the town itself. And this is natural: those in the state government have little incentive to care about the impact on the town.

Also, ironically, the town has excellent train and bus coverage. Most don’t own cars. And if they do, they use them seldomly. We all moved here because we don’t like cars and wanted a place with good mass transit. Now all those benefits are gone.

When people want housing change, I think they really want to transfer some of the wealth from landowners to other people. But in my case, no wealth was transferred. It was literally destroyed. Everyone is worse off.

I think we agree, actually. In your case the state is imposing a negative externality (more cars). I am investigating moving to bloommerwede.nl/ and I will be FURIOUS if the Dutch government forces them to start letting cars through.

Just out of curiosity, may I ask roughly where you are?

I hope we can agree that the common enemy here is cars. The cities have spent most of a century fighting homes for, among other reasons, the belief that more homes means more cars (which isn't true if your city isn't horrible, but almost all American cities are car-choked hellscapes).

So far as I'm aware Builder's Remedy should not mean more roads being built. Hopefully, it eventually leads to car infrastructure like parking garages being removed in favour of housing.

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