US needs to build 2M houses to revive the American dream of homeownership | Hacker News Reader

US needs to build 2M houses to revive the American dream of homeownership

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43 pointsbelter45 comments

Nope, sorry! The other American dream - that everyone who already owns a house in a decent-ish area automagically gets rich via skyrocketing home prices - takes precedence.

While I don't disagree with your premise of monotonically increasing home value, now it has me thinking:

There's plenty of cheap land where we could make cheap houses. It's just in the middle of nowhere. Why isn't America making more new big cities? It seems like most new cities are suburbs of large metro areas, which makes sense for jobs, but not for cheap housing.

Of course the problem is in a new city you'll have people before you have jobs, but really you need jobs to have people be able to live there. Remote jobs could be the kickstarter here though, as long as you have reasonable internet. Or having a "company town," kind of like the car makers of old.

This could increase housing supply, keeping prices cheap, while still keeping an ever increasing property value investment for those who live there.

Really I think it comes down to the fact that we don't have new cities, and the small cities that could grow are very rural and are usually losing population.

Am I missing something here? Maybe I just don't know about these hot new cities because they are still small?

You need people who have strong guarantees their jobs will remain remote, or can be swapped when they need a new remote job. Private industry is never going to be a component in this regard (until remote/flexible work gets codified as a right, when possible, in labor law), but you could do it with federal government jobs (many of which already support this flexibility).

Until then, workers will be forced to live where there is a lack of housing because jobs require it.

Right, although nobody really has a guarantee about their job, not even government jobs. I think what it comes down to is the number of jobs you could take if your job is eliminated (and this is where your point about remote work being safe enough to swap for another job). But as soon as you get a nucleus of remote workers, now you'll need to build more businesses in the city to support them, like gas station, restaurants, etc. Those jobs aren't remote jobs and will be filled by locals. You really need both to get it going. Agree government jobs would really help keep the stability.

Wouldn’t hurt to attract a sufficient population of retirees that had pension and social security income, thereby providing some measure of income base for the local economic system that couldn’t be revoked (unless they all moved out of course). Same way investment and retirement visas work.

Totally. Having retirees would also quickly require a reasonable medical system - another thing that small towns struggle with providing.

At least in California, the rate at which cities are formed is nearly zero, but it didn't used to be the case[1]. California formed two(2) new cities between 2010 and 2020. The short of it is that in 2011 SB89[2] diverted money away from the creation of new cities. Or in other words, we spent the money on something else.

1. https://www.sfchronicle.com/projects/2023/california-new-cit...

2. http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0051-0100/sb...

California made a huge mistake routing high speed rail through the central valley. It should have gone through to 101 corridor south of SF. Plenty of room for new cities along the rail and nicer weather.

The rail goes through Fresno and Bakersfield. Which are on the side of the central valley where people live.

State Senator Scott Wiener I think had the right idea about building new housing. Have the state enforce a common zoning and permitting system near mass transit corridors. Nothing within 3/4 of a mile of a BART station for instance should be zoned R1. -gives Berkeley the stink eye-

Or even easier, instead of building new cities, revive existing cities throughout the rust belt with new housing.

Bonus, you get a lot of infrastructure, social networks, etc prebuilt for free.

> There's plenty of cheap land where we could make cheap houses. It's just in the middle of nowhere. Why isn't America making more new big cities?

There’s a few reason, I’ll tackle the geographic one.

Big cities already occupy most/all the spots that work for big cities.

Big cities almost invariably share a few attributes:

-Interstate freeway access

-On a navigable waterway or ocean

-Railroad infrastructure

I personally believe that navigable waterway/ocean proximity is the main thing that allows large cities to develop.

Take a look at the navigable waterway map of the US: https://en.m.wikipedia.org/wiki/Inland_waterways_of_the_Unit...

There are only a handful of major cities that aren’t on a navigable river or on the coast: Denver, Phoenix, Dallas/Ft Worth, Las Vegas, Atlanta, Indianapolis (probably more I am missing)

Minnesota is an interesting case, MPLS/St Paul is reachable from the Gulf of Mexico via the Mississippi, and Duluth is reachable from the Atlantic Ocean via the St Lawrence Seaway (and Great Lakes). As the crow flies, the ocean is 800-1000 miles away from MN but it’s still accessible by water.

> (probably more I am missing)

Pretty sure you're missing a lot of them

Just from skimming the biggest 100 U.S. cities, these jump out to me * Austin

* San Antonio

* Colombus

* Charlotte

* Oklahoma City

* El Paso

* Albuquerque

* Tucson

* Fresno

* Mesa

* Colorado Springs

* Raleigh

* Bakersfield

* Arlington

* Wichita

* Aurora

* Anaheim

* Henderson

* Orlando

* Lexington

* Stockton

* Riverside

* Greensboro

* Lincoln

* Plano

* North Las Vegas

* Madison

* Chandler

* Gilbert

* Reno

* Fort Wayne

* Lubbock

* Laredo

* Irving

* Glendale

* Winston-Salem

* Scottsdale

* Garland

* Boise

* Spokane

* Richmond?

So of the 98 cities which are in the contiguous u.s. and in the top 100 most populous cities, 47-48 of them are not connected to waterways on that map, though I realize many of these are parts of the same metro (like 4-5 of them in the dallas/ft worth area)

historically cities developed along navigable waterways. Not as necessary in modern times. But lots of big cities are a continuation of existing cities

Want to get rich? And have an enjoyable career? Without Microsoft or Adobe? Become a housing developer and build homes.

Housing developers have low margins overall, huge up front costs (and high interest rates these days), massive regulatory burden, and decent amount of risk.

Becoming a housing developer is a lot easier said than done. Do you have the startup capital to build one house? Five houses? How about startup capital to purchase a new development, go through regulatory approval, a year of utility moves, heavy equipment for a year of subgrade preparation and site sloping for drainage and elevation as well as installation of basic utilities like sewer/water/electricity/networking, and then actually building and finishing houses? Not 5 but dozens?

That's a game for people who are already super rich not a game for people who want to get rich. If you want to get rich stick to flipping and renovating.

This is what banks are for. Real estate is essentially their bread and butter. It’s a physical, valuable asset that they can seize and auction off.

We’re also talking about houses (stand-alone units) rather than housing. These developers aren’t fronting the cost to build individual homes. That’s all covered by home owners (via a construction loan)

Not true when we are talking about tract houses in brand new neighborhoods. They have to have the land, build model homes, hire staff to show the homes and process paperwork.

A couple years ago I went and looked at houses in a new development that no one was living in yet. They had at least 5-10 + houses that were already framed but were looking for a buyer.

Construction loans are for custom builds where the homeowner is contracting directly with a builder, with no developer middleman, I thought?

Someone I knew recently “built” a home through a developer and they didn’t need to get a loan until a couple months before closing on the finished, move-in ready home.

It goes both ways. In that case, the developer had the cash to front the loan.

when there are high interest rates, the large loans that are required to front the money to develop the land and build homes costs the developer more, and thus raises t he cost of housing, and also the risk to developers.

I see no evidence of a supply shortage in my large representative market.

If you want an older house or a new one, its available.

They seem to be implying that building 2 million new houses is the means to reduce housing prices.

That isn't logical. Nor would such a supply be built without presold demand. New construction is already on offer, and the demand is what it is.

Overall, this article seems to be PR support for a Federal House Building program as a means of economic stimulation. They'd do better with it if they were more honest.

What they need to do is change regulation, change land use policy and change transportation planning, and city planning. Just building individual houses isn't a solution.

How many empty houses are currently in the US, either as 4th/5th homes, bad investments, being held hostage to raise local prices, etc?

Can we force those’s usage through vacancy taxes first / at the same time?

There's about ~15M vacancies in the US currently.

https://www.census.gov/housing/hvs/data/detailed_tables.html

They don't build houses. They build "luxury" apartments so that they can rent them out at $3k/month a piece.

With an amazing offering of mandatory services, like Fetch.

Thats just what housing looks like lol. Luxury is just a name dude.

> Luxury is just a name dude.

"Luxury" vinyl flooring, for example.

Building more homes to ease the housing crisis is similar to building larger freeways to try and ease traffic congestion. It’s just not going to work.

This seems to assume that induced demand is a significant factor in housing ownership. Which could be true! Maybe we also need to look at housing speculation. If we build more homes and they’re all bought by housing speculators, the median persons home ownership won’t change.

Induced demand and housing isn’t talked about enough when discussing housing prices. I’m not going to crunch the numbers, but I could see it working out for speculators with nearly infinite funds to buy up whatever new housing supply as a means to artificially keep supply low to keep their stock of real estate overvalued.

People talk about induced demand for housing often enough. It's not as big obstacle as induced demand for car traffic in large metropolitan areas. It simply means that you can't solve housing issues locally. You have to deal with them at a large enough scale.

Speculators hoarding the housing supply sounds like a market failure. If you believe in capitalism, the market will deal with the issue. Non-speculators will show up and build new housing, if you let them. If you don't believe in capitalism, there is always government intervention. The government could, for example, build public housing for 100 million or 200 million people, prioritizing areas with least affordable housing.

For more information on government options I always go back to this link: https://www.shareable.net/public-housing-works-lessons-from-...

Why not? Because they're just going to be purchased by out-of-country buyers and left empty?

or by corporate landlords and rented out. or by already wealthy howeowners leveraging their existing properties to borrow money to buy new properties, or or or or. Or by overwhelming immigration beyond the capacity of the host country, or or or.

There are a lot of social problems that cause building houses in and of itself to not be too effective.

Rented out increases supply. People have been born anyway, with or without the housing.

Look, in terms of supply and demand, we've never had a higher supply of people, and from a propagate-the-species point of view there's no additional demand for people either. I sort of agree that more people overall diminishes the aggregate quality of life, there is more art, music, sports, literature, and everything else created by people than anyone can meaningfully experience anyway, while all of the natural world is destroyed a bit more by each additional person. But adding 2Mm houses will give a bunch of place for people to go to and take pressure off the others.

rented out doesn't revive the american dream, its a way to convert money from people who don't have enough to buy a house into money belonging to people who have more. It also keeps costs high because it turns properties into investments without consideration of people's welfare.

So yes, it may increase supply, but it does less good for society than individual home ownership.

It will if immigration is controlled and purchasing of properties by commercial interest is regulated to make sure people can live affordable before companies become landlords.

It's not a problem with building it's a problem with everything but building.

I suspect the purchasing of properties by commercial interests is probably by far the dominant factor here, with immigration having a minuscule effect in comparison.

It depends where you live. In canada net migration is many many many more times the building of houses, and impacts the demand for houses incredibly. It also spurs commercial buying of houses - if immigration isn't high you might lose money on a house, but if immigration is high and supply is much lower than demand, you're going to make money on rent and then make money on the property too. People who bought houses previously made much more than is possible to make by selling your labour.

> In canada net migration is many many many more times the building of houses

Okay but that doesn’t say anything about immigration versus commercial land ownership, which was my point. You’re saying immigration influences house purchases and I don’t disagree, I’m just questioning the magnitude of that effect compared to commercial land ownership.

commercial home ownership is made less risky and more profitable if supply is far lower than demand, which is the case with overwhelming immigration and a housing construction sector not able to keep pace with immigration.

This just isn't true. Rents decreased in Texas after an increase in supply. Increasing supply will decrease prices. Freeways typically don't cost money so that doesn't apply.

Houses largely don't get built without being presold. Presales are not going to happen without a significant interest rate drop. Interest rates aren't going to drop. This isn't the multifamily market under discussion. Rent prices have significantly more wiggle room under market forces than does new single family construction, the latter which needs to be profitable upon sale instead of over 30 years.

Folks are downvoting cus their feathers are rustled but you’re 100% right on this.

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