Strained housing affordability is a ‘manufactured crisis’ created by bad zoning | Hacker News Reader

Strained housing affordability is a ‘manufactured crisis’ created by bad zoning

fortune.com

48 pointsmennaali20 comments

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https://archive.is/oq9Jg

Article is essentially about Los Angeles, not really about housing across the US.

It's the same story in many US metro areas; SF and Denver among many others.

Nearly every growing metro in the US can be described the same way.

It’s created by unregulated investment in family housing.

It's created by federal mortgage subsidies. If everybody's mortgage payment went up with interest rates more people would sell and drive down prices.

That, and property tax assessment shenanigans, and corporations buying sfhs and townhomes, and foreign investors, and tax deduction on mortgage interest, and nimby blockades on construction.

A future generation will look back at this society as stupid. All the wealth of the world but cannot even give people the basics.

Most everyone has fixed rates in California. 10% in 2022: https://themortgagereports.com/93472/adjustable-rate-mortgag...

Fixed rate loans have existed forever.

Private contracts are constantly filled with them. It's private enterprise cashing in as usual for those with the best credit.

Not government intervention.

Without Fannie Mae and Freddie Max interest rates on 30 year mortgages would be higher or everyone would have to use an ARM. On most mortgages the bank just follows these government associated agencies’ underwriting rules and immediately sells the mortgages to them.

And then all of the cash buyers who are unaffected by mortgage rates would own all of the properties.

Unregulated investment? Is that why it costs so much to build anything? Or what exactly does it mean?

if a house is such a good investment why arent these investors building more to mint millions ezpz?

Diluting their own market

To follow your line of thought would require massive collusion between every investor to agree on how much each person builds to avoid dilution.

That is so complex as to be functionally impossible.

The far easier explanation is the one in the article.

There isn't really collusion, all the developers know which side their bread is buttered on. All the major developers in the UK are the biggest Conservative party donors and they run on restricted development, nimbyism, and keeping house prices high no matter what.

It’s not just zoning. Even with free land and no permit fees I don’t think it would possible to build a 1000sf house in Seattle for under 200k due to materials and labor costs. Cheap housing is often only possible due to illegal practices such as hiring migrants below minimum wages and not building to code.

The labor cost might come down if there were cheaper housing.

> don’t think it would possible to build a 1000sf house in Seattle for under 200k due to materials and labor costs

Single family? Maybe. (There is a lot of red tape in materials, too.) Building for a proper city? Much, much cheaper. Those are the economics of densification.

Single family homes are a ponzi scheme. You can't gather enough revenue to maintain the roads and such. It's actually how we got in trouble to begin with. We need to build 4-6 family homes everywhere.

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