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Comment by nomilk | Hacker News Reader

Given how abundant land is, does it imply that supply shortages are purely man-made? (e.g. policies not allowing large swaths of land to be built on).

Otherwise it doesn't make sense that prices are high for a good (housing) whose primary input (land) is in great supply.

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That's not really how it works as far as I understand. Their are economic epicentres, and building near them means greater productivity and economic growth. The further out you get, the lower the ROI. The problem is, many cities in the west, controlled by an aging population of "haves" who bought when houses were the price of a sack of beans, feel that they are entitled to live in the same neighbourhood they purchased in. Incumbent homeowners are blocking new development, which stifles economic growth and creates a supply shortage, driving prices up.

You got one part of it right: building more solves the housing crisis. But if you built outside cities, you're asking new homeowners (read: young people who contribute the most to economic growth) to live increasingly far away from where the economic growth happens.

> feel that they are entitled to live in the same neighbourhood they purchased in.

It's not a feeling, it's how purchasing things works.

>> feel that they are entitled to live in the same neighbourhood they purchased in.

> It's not a feeling, it's how purchasing things works.

He means that people feel they get to control the neighbourhood. Exercising control over property they don't actually own.

We are also legally entitled to that as well, this is how voting works. Community boards and local governments are intended to give people democratic control over the areas in which they live.

The problem is that people overwhelming vote for neighborhood stasis, which makes it completely unable to handle long-term changes in growth patterns. People always want to preserve their nice neighborhood, but they never see that a neighborhood that can't change is a neighborhood in permanent decline.

And they are entitled to do so. Who's to tell them otherwise?

They are entitled to do so, but a neighborhood in perpetual decline is a neighborhood that will eventually die. It's kind of the opposite of people planting trees who's shade they'll never sit in. It's people preserving trees who's shade ONLY THEY will get to sit in. I don't think people are so heartless as to want their community to die after they're gone, they just don't see the long-term impacts of their desire for stability in the moment.

Why do you think the neighborhoods will die without more housing? I've watched wealthy neighborhoods in my city continue relatively unchanged for multiple generations. Once you have a thriving neighborhood, you don't need to continue changing things just to squeeze more people into it. What ends up happening (and I see this in some other neighborhoods, like my own) is that the things that made the neighborhood desirable (restaurants, retail, parks, affordable single family homes) get squeezed out in order to make room for more housing. The rents for the commercial spaces increase beyond what they could possibly earn. Once this is completed, now you have a bunch of housing in an area nobody wants to live in. People leave, then the area becomes blighted and the density gets torn down to build single family homes with yards...

This happened in my neighborhood in the mid-20th century - a huge, thriving, dense neighborhood was abandoned and destroyed as the industry in the area slowly failed. Buildings were turned into suburban-style lots, and over the past 50 years gradually gentrified and those empty spaces turned into more, denser housing. We're currently somewhere between the "local amenities can't keep up with the population" stage and the "housing is replacing commerce" stage.

If you've ever observed the sea of grey hair in a community input meeting you'd know it is not a representative democracy. People across many cities have voted in favour of change to the status quo, only to be met with non-democratic resistance from back channels and other apparatuses established by incumbent homeowners who have infinite time and seemingly infinite resources to fight the will of the people to preserve their fiefdom.

I've gone to those meetings. It was a mix of younger and older people, a diverse crowd. Felt representative of the neighborhood. Maybe it's just my neighborhood.

The primary input isn’t land, it’s tolerable neighbors. That is of course what “good school district,” “location, location, location,” and similar euphemisms actually mean.

If you have a high tolerance for crime and other antisocial behavior there is plenty of extremely affordable housing in major US cities with plenty of amenities like walkability and public transportation.

Good school district doesn't just mean tolerable neighbors, it also means wealthy neighbors (for more collected school taxes).

Or if you venture outside of major cities there is also plenty of affordable housing in unfashionable suburban. Many of those areas also have low crime and decent public schools. Not much public transportation, but plenty of free parking.

Define affordable. My nearest town has a population of 500 or so and my home’s price has at least doubled in the last 10 years.

Absolute prices are irrelevant. Affordability is reflected in home ownership rates. In some states such as Alabama, Maine, Minnesota, Vermont, South Carolina, etc. the rates are above 70%. Regular people seem to be finding it affordable.

https://www.propertyshark.com/info/us-homeownership-rates-by...

How does a person becoming homeless effect the homeownership rate? They no longer get counted.

How does someone owning (and living in) multiple properties effect the homeownership rate? They count multiple times!

How does someone renting out a bedroom effect the homeownership rate? Their tenant doesn't count! This includes adult children.

You can not use this metric in the way that you just assumed you could.

Wrong. Instead of lying you should take a few minutes to understand how the rate is actually calculated.

https://fred.stlouisfed.org/series/HOWNRATEACS006085

Surely one of us is confused, but I am not lying. Here it is on the Census website. No where does the Homeownership rate depend on people. It depends on housing units.

> Housing Unit. A housing unit is a house, an apartment, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters.

> Homeownership Rates. The proportion of households that are owners is termed the homeownership rate. It is computed by dividing the number of households that are owners by the total number of occupied households.

> https://www.census.gov/housing/hvs/definitions.pdf

When we get to the bottom of this we should edit the Wikipedia article if I am wrong.

> The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate. Many households that are owner-occupied contain adult relatives (often young adults, descendants of the owner) who do not own their own home. Single building multi-bedroom rental units can contain more than one adult, all of whom do not own a home.

> https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...

You are lying to claim that homeless people aren't included. They are in the denominator as part of the total estimated population.

You are confused. The denominator is the number of households. The homeless obviously don’t have households.

You could at least read the comment you’re replying to before calling its poster a liar.

You are confused. The denominator includes the total estimated population. You could at least read the official definition before wasting everyone's time.

Here is the definition, from the first paragraph of the source that you yourself posted[1]:

  The United States homeownership rate represents the percentage of occupied housing units where the resident is also the owner. A constantly evolving figure, the United States homeownership rate currently rests at 65.2%, while renter-occupied housing units make up 34.8% of the national stock.

From this definition it trivially follows that a rented property becoming vacant increases the homeownership rate, because the vacant property (and the person who was renting) will both no longer be counted, at all and thus the total percentage of owner occupied units will increase.

At this point I'm not sure if you failed to read your own link, don't understand what "percentage of" means, or are just obstinately wrong, but regardless it doesn't much seem worth continuing does it?

[1] https://www.propertyshark.com/info/us-homeownership-rates-by...

The Census breaks the homeless population into two groups - those whom live in shelters and those who do not. They completely ignore the later. For the former, shelters are not considered housing units.

> "Census Bureau surveys do not collect data on the population experiencing homelessness and living on the streets"

> https://www2.census.gov/library/working-papers/2024/demo/seh...

Delinquent debt is at the same levels will into the GFC starting in 2008. More like they are maxing out their debt and then ignoring the calls to repay them and the financial institutions are just delaying collection hoping this all blows over.

Mortgage delinquency rates are near record lows so what's your point?

https://fred.stlouisfed.org/series/DRSFRMACBS

Delinquency Rate on Consumer Loans, All Commercial Banks (DRCLACBS) https://fred.stlouisfed.org/series/DRCLACBS Taking off like a rocket, people are strapped for cash and have been burning all their credit to survive. Mortgages are low for now, but once people run out of easy credit, which they have, mortgage delinquencies will rise. People are poor.

Hm, I think we may find chickens coming home to roost in the next recession perhaps. Obviously not because of variable rate mortgages, but we’ll find out if people stretched themselves too thin. I’m sure there are metrics about that as well but I think that’d be the best test.

First, not all land is the same. The US coasts, for example, have much better income and job availability than sparsely populated cities in the middle of the country. In Europe, the size of the city is somewhat "fixed," depending on geography, transportation, etc. The same is true of some US cities, meaning that land is just more valuable that other land. That's why you see houses that are almost free in some cities, but those towns and cities are not the place where most people want to live.

Second is construction cost. A round number for the US is about 150 USD per square foot. So a 2,000 sq. foot house should be in the neighborhood of $300,000. (That does not include land, just the structure). However, in desirable cities this number is higher because labor costs are higher. In sparsely populated cities, that number is (of course) lower. This varies country to country, and in some space constrained cities, vertical is the only direction that you can build. (As one poster noted below, the $150/sq foot is only for single family. Multi-story buildings are significantly more expensive.)

But probably the biggest problem are artificial barriers to construction. The zoning system in the US, for example, prevents the construction of higher density in some areas. For example, a neighborhood can be zoned at 1 per acre. It's illegal to build a duplex, apartment, or to divide the acre into four and build four houses, etc. The zoning is set by a local board elected by homeowners in that locality. Being near high-density housing often lowers the value of existing homes, including making traffic worse and stressing the school system. (Also, to be fair, a sudden, large influx of new people, before the tax base and services catch up, can stress EMS, hospitals, fire, police, public transportation, sewage, water, electrical grid, etc. as well as just schools and roads).

Finally, there are builders, who would rather sell one large unit instead of lots of cheaper units. Building and selling a 1,000,000 USD home is cheaper and easier to manage than 5 200,000 USD homes. If you can only build one house per acre, or the space is constrained by geography, it doesn't make economic sense to build a 200,000 USD house. Even if space isn't constrained, the incentive is to build luxury, high end units as long as you can sell all your inventory.

Yes. Someone or something that man wants, made or desires is destroying the idea of housing for us. Not sure what it is, but there's a reason the largest, most empty countries are suffering the worst real estate problems.

It's absolutely weird to see land go for $1m for a small lot, then 10 minutes drive there are cows grazing on huge acreage. Then if you do a 10 minute flight in any direction you can see thousands of hectares of empty, good, liveable land.

(This is in Australia)

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