GalaxyFlyer wrote:

There’s plenty of inexpensive housing in Asia, much in China going bust. Look at Zillow there’s plenty of housing under $200,000 in Florida. Heck, there’s plenty in Massachusetts.

We are talking about exceptional circumstances, like the downsides of bubbles. They don't tend to last more than 2-3 years. I guess people should financially arm themselves to buy these massive dips, but if everyone did that, then it would escalate prices erasing the possibility before it even began.

In a way I would like to see what would happen to a major metropolitan area if all supermarket, restaurant, cleaning workers and drivers just vanished. How would both companies and the professional / skilled trade / managerial classes left behind cope with running things after the lower wage workers all live beyond 250 miles of the outermost suburbs and no longer can commute to work there.

CometII wrote:

luckyone wrote:

CometII wrote:

Yet if it was up to Biden or whatever the opposition is to Biden IS, or even the media, you would think nothing is happening.

I don't disagree with you that this is a problem. But I don't know where you're coming from when you assert that nobody is talking about this. It's been headlines for several years now. I'm also not sure what you think a President can do about this.

As for your list of remedies, good luck with anything but limitations on foreign buyers, which IMHO should be limited and also taxed differently. No state or municipal government will allow the federal government to implement any of the policies you've described, much less the voters in those districts. The overwhelming cause of most of our housing problem is zoning restrictions, and most of that comes from voters at the municipal level. The US went on a massive public housing splurge in the post-WW2 era, and it ended in most of the projects deteriorating into crime infested neighborhoods that were glaring examples of how government shouldn't get involved in housing.

Pruitt-Igoe in St. Louis -- https://www.youtube.com/watch?v=NRnKMwJxKI4
The "State Street Corridor" in Chicago -- the worst of which were the Robert Taylor Homes https://en.wikipedia.org/wiki/Robert_Taylor_Homes

Fair enough, we can agree to disagree on the right policy mix. I can tell you what won't work at all: letting the market manage itself. Builders do NOT want to build for anyone making less than 200K a year anymore. Therefore, they don't want to build for 98% of Americans. Zoning restriction reform will do almost nothing to change these practices.

casinterest wrote:

The "Housing Crisis" usually has a solution. It is called market correction

Markets will correct for overpriced homes. We saw in 2007-2010, and we will see it again soon. Homes spiraled in prices, and with higher rates, buyers will vanish. Those that look to flip homes, invest in them may take a bath or have to charge lower rents to slow the bleed. Mortgages that are too high will be abandoned. Prices will fall, this will force rents down. Markets are already showing signs of a correction,


https://fortune.com/2022/09/11/housing- ... g-markets/

Among the 148 major regional housing markets tracked by John Burns Real Estate Consulting, 98 markets have seen home values fall from their 2022 peaks. In 11 markets, the Burns Home Value Index* has already dropped by more than 5%. Simply put: The U.S. home price correction is sharper—and more widespread—than previously thought.

“Our view is that you will see—and we’re seeing it right now—home prices will fall even though supply levels are not ripping higher. And I think that’s an interesting thing that is now starting to surprise a lot of people,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells Fortune.

Completely disagree here. Otherwise, we would not have the problem we have now. 2008 would have fixed it.

You will need to go a little deeper here. 2008 fixed the issue with the Banks giving loans willy dilly.
2022 was an issue caused by low interest rates from the federal government.

People bought houses realizing that at 3.0% and less loans they could have 500,000 dollar homes for 2000 a month. That was far better than renting.

The pandemic slowed home building . Demand couldn't keep up, and Investors/Flippers bought homes all over the place. I know people with 2-4 houses now. They have them at low rates and can afford the payments.

Now the Fed is battling inflation, and those loans have gotten expensive. a 500 thousand dollar home climbed in some areas to 800,000 dollars. now a person buying that home has a 5+% loan that demands around 4500+ a month to pay it off So the economy is now working as it should. People are not buying homes at that price anymore, and the prices are being pushed down.

It is going to take some time to bring the prices back down, but it will happen. In concert, people are getting raises as wages have increased, and in the middle things will meet.


2007-2010 was driven by an overabundance of bad lending. We don't have that this time.

casinterest wrote:

CometII wrote:

luckyone wrote:

I don't disagree with you that this is a problem. But I don't know where you're coming from when you assert that nobody is talking about this. It's been headlines for several years now. I'm also not sure what you think a President can do about this.

As for your list of remedies, good luck with anything but limitations on foreign buyers, which IMHO should be limited and also taxed differently. No state or municipal government will allow the federal government to implement any of the policies you've described, much less the voters in those districts. The overwhelming cause of most of our housing problem is zoning restrictions, and most of that comes from voters at the municipal level. The US went on a massive public housing splurge in the post-WW2 era, and it ended in most of the projects deteriorating into crime infested neighborhoods that were glaring examples of how government shouldn't get involved in housing.

Pruitt-Igoe in St. Louis -- https://www.youtube.com/watch?v=NRnKMwJxKI4
The "State Street Corridor" in Chicago -- the worst of which were the Robert Taylor Homes https://en.wikipedia.org/wiki/Robert_Taylor_Homes

Fair enough, we can agree to disagree on the right policy mix. I can tell you what won't work at all: letting the market manage itself. Builders do NOT want to build for anyone making less than 200K a year anymore. Therefore, they don't want to build for 98% of Americans. Zoning restriction reform will do almost nothing to change these practices.

casinterest wrote:

The "Housing Crisis" usually has a solution. It is called market correction

Markets will correct for overpriced homes. We saw in 2007-2010, and we will see it again soon. Homes spiraled in prices, and with higher rates, buyers will vanish. Those that look to flip homes, invest in them may take a bath or have to charge lower rents to slow the bleed. Mortgages that are too high will be abandoned. Prices will fall, this will force rents down. Markets are already showing signs of a correction,


https://fortune.com/2022/09/11/housing- ... g-markets/

Completely disagree here. Otherwise, we would not have the problem we have now. 2008 would have fixed it.

You will need to go a little deeper here. 2008 fixed the issue with the Banks giving loans willy dilly.
2022 was an issue caused by low interest rates from the federal government.

People bought houses realizing that at 3.0% and less loans they could have 500,000 dollar homes for 2000 a month. That was far better than renting.

The pandemic slowed home building . Demand couldn't keep up, and Investors/Flippers bought homes all over the place. I know people with 2-4 houses now. They have them at low rates and can afford the payments.

Now the Fed is battling inflation, and those loans have gotten expensive. a 500 thousand dollar home climbed in some areas to 800,000 dollars. now a person buying that home has a 5+% loan that demands around 4500+ a month to pay it off So the economy is now working as it should. People are not buying homes at that price anymore, and the prices are being pushed down.

It is going to take some time to bring the prices back down, but it will happen. In concert, people are getting raises as wages have increased, and in the middle things will meet.


2007-2010 was driven by an overabundance of bad lending. We don't have that this time.

You are dreaming if you think wages are increasing. Look at the core CPI. Wages are going down and even at their June levels (when a study on affordability was done which I will quote on tid-bit now), wages would need to increase by 40% to get back to a historical housing-wage balance. That will never happen, we know that.

If home prices do drop 40% in key markets, we go right back to a financial crisis which will destroy jobs and drive down wages more, meanwhile, no one will want to build houses in that environment.

Time is no longer an option either. And at best home prices would drop 20% even if by a miracle of soft-landing is engineered, that means people will still be paying 20% more for housing and rent than just some years ago.

CometII wrote:

casinterest wrote:

CometII wrote:

Fair enough, we can agree to disagree on the right policy mix. I can tell you what won't work at all: letting the market manage itself. Builders do NOT want to build for anyone making less than 200K a year anymore. Therefore, they don't want to build for 98% of Americans. Zoning restriction reform will do almost nothing to change these practices.



Completely disagree here. Otherwise, we would not have the problem we have now. 2008 would have fixed it.

You will need to go a little deeper here. 2008 fixed the issue with the Banks giving loans willy dilly.
2022 was an issue caused by low interest rates from the federal government.

People bought houses realizing that at 3.0% and less loans they could have 500,000 dollar homes for 2000 a month. That was far better than renting.

The pandemic slowed home building . Demand couldn't keep up, and Investors/Flippers bought homes all over the place. I know people with 2-4 houses now. They have them at low rates and can afford the payments.

Now the Fed is battling inflation, and those loans have gotten expensive. a 500 thousand dollar home climbed in some areas to 800,000 dollars. now a person buying that home has a 5+% loan that demands around 4500+ a month to pay it off So the economy is now working as it should. People are not buying homes at that price anymore, and the prices are being pushed down.

It is going to take some time to bring the prices back down, but it will happen. In concert, people are getting raises as wages have increased, and in the middle things will meet.


2007-2010 was driven by an overabundance of bad lending. We don't have that this time.

You are dreaming if you think wages are increasing. Look at the core CPI. Wages are going down and even at their June levels (when a study on affordability was done which I will quote on tid-bit now), wages would need to increase by 40% to get back to a historical housing-wage balance. That will never happen, we know that.

If home prices do drop 40% in key markets, we go right back to a financial crisis which will destroy jobs and drive down wages more, meanwhile, no one will want to build houses in that environment.

Time is no longer an option either. And at best home prices would drop 20% even if by a miracle of soft-landing is engineered, that means people will still be paying 20% more for housing and rent than just some years ago.

Wages are rising, especially at the lower wage levels. "Real wages" are just trailing the inflation rate. But not at the rates you are proposing. Home prices will drop and wages will rise. This is the purpose of the Fed Rate increases. It may create a period of stagflation or recession, but that is the cost for taming the inflation going on now.

c933103 wrote:

pune wrote:

seb146 wrote:

You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.

As an outsider, it seems to me, that's again a Govt. thing. If the Govt. doesn't care for its veterans, housing is too tough a hill to climb upon.

Governments aren't all mighty god. You can't say theee is a problem and the government didn't use their magic ward to fix it so that is government's fault.

Actually....

Republicans are government officials. Every election cycle, they go on and on about how much they care for veterans and the military but, after the election, they go right back to giving welfare to the very rich and ignore homeless veterans. So, yes, the government COULD do something but choose not to.

casinterest wrote:

Wages are rising, especially at the lower wage levels.

Federal minimum wage has been $7.25 for the past 13 years, and it's uncertain if any increase can be expected. Meanwhile, rents in large cities have been rising well over inflation, more than twice as fast as incomes could keep up.
We'll need further significant wage increases - especially at the lower end including minimum wage - or a considerable drop in housing costs to make living affordable again. That means either company owners and stockholders give up some of their profit (to pay employees) or current investors in the housing market take a hit to their expected value increase (from dropping property prices). Someone's going to be unhappy either way.

The findings reveal that nearly all of the 50 largest metropolitan statistical areas (MSAs) since 2001 have become less affordable for renters and prospective first-time homebuyers, with annual median rent growth rising at 2.0% above inflation, compared to an 0.8% real increase in annual median income. This disparity has led to a typical household in 2020 - compared to 2001 - needing to devote an additional 7.6% of its income to rent a median-priced housing unit.

"There is a significant lack of affordable housing supply in the United States, and the problem is worsening. In 2001, a low- and moderate-income household could spend less than 30% of its income to rent the median rental unit in 38 of the largest 50 metro areas. By 2020, this was the case in only 17 metro areas," said Michael Eriksen, author of the report and West Shell Associate Professor of Real Estate at the University of Cincinnati and Academic Director of the Real Estate program. "The highest and fastest-growing rents have been in cities with strong employment and population growth that have a scarcity of developable land, primarily because of geography and land-use restrictions."

https://www.mba.org/news-and-research/n ... as-x277676

"In no state, metropolitan area, or county in the U.S. can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour work week"

https://www.npr.org/2021/07/14/10162307 ... study-says

seb146 wrote:

c933103 wrote:

pune wrote:

As an outsider, it seems to me, that's again a Govt. thing. If the Govt. doesn't care for its veterans, housing is too tough a hill to climb upon.

Governments aren't all mighty god. You can't say there is a problem and the government didn't use their magic ward to fix it so that is government's fault.

Actually....

Republicans are government officials. Every election cycle, they go on and on about how much they care for veterans and the military but, after the election, they go right back to giving welfare to the very rich and ignore homeless veterans. So, yes, the government COULD do something but choose not to.

My comment was responding to the part of housing price trend in many countries across the world.

mxaxai wrote:

casinterest wrote:

Wages are rising, especially at the lower wage levels.

Federal minimum wage has been $7.25 for the past 13 years, and it's uncertain if any increase can be expected. Meanwhile, rents in large cities have been rising well over inflation, more than twice as fast as incomes could keep up.
We'll need further significant wage increases - especially at the lower end including minimum wage - or a considerable drop in housing costs to make living affordable again. That means either company owners and stockholders give up some of their profit (to pay employees) or current investors in the housing market take a hit to their expected value increase (from dropping property prices). Someone's going to be unhappy either way.

The findings reveal that nearly all of the 50 largest metropolitan statistical areas (MSAs) since 2001 have become less affordable for renters and prospective first-time homebuyers, with annual median rent growth rising at 2.0% above inflation, compared to an 0.8% real increase in annual median income. This disparity has led to a typical household in 2020 - compared to 2001 - needing to devote an additional 7.6% of its income to rent a median-priced housing unit.

"There is a significant lack of affordable housing supply in the United States, and the problem is worsening. In 2001, a low- and moderate-income household could spend less than 30% of its income to rent the median rental unit in 38 of the largest 50 metro areas. By 2020, this was the case in only 17 metro areas," said Michael Eriksen, author of the report and West Shell Associate Professor of Real Estate at the University of Cincinnati and Academic Director of the Real Estate program. "The highest and fastest-growing rents have been in cities with strong employment and population growth that have a scarcity of developable land, primarily because of geography and land-use restrictions."

https://www.mba.org/news-and-research/n ... as-x277676

"In no state, metropolitan area, or county in the U.S. can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour work week"

https://www.npr.org/2021/07/14/10162307 ... study-says

Fed Min wage is still 7.x but recently i have seen signs for 12-13 just to work at gas stations or fast food where i live.
The market demand has gone sky high.

Rents are going up to meet the demand. The cities are paying more ,and people are leaving the stix where rents are low, pay is low, and life involves not becoming your siblings caretaker.

High rent is due to fallout from 2008, but people are buying more and more , because it turns out framily in cities may be better than family.

GalaxyFlyer wrote:

Minimum wage 50 years ago wouldn’t have paid for an apartment rent then,

In 1970, federal minimum wage was $1.45 and median rent was $108. You needed to work 74h to pay rent.
In 2020, federal minimum wage is $7.25 and median rent is $1104. You need to work 152h to pay rent.
Each month with a 40h-week gives you around 175h of work. In 1970, 42% of your gross salary at minimum wage needed to be spent on rent. You won't be able to put aside much money, but you can afford that apartment. Choose a smaller, cheaper one and you might even get under the recommended 30% limit.
In 2020, 87% of your gross salary would be required. That's clearly unaffordable. There are no apartments available for a third of the median rent.

Wages - especially at the lower end - have not kept up with rents. This doesn't affect just the big cities but it's more pronounced there. Even rural states like Alabama or Idaho have seen inflation-adjusted rent increase by more than 50% over the past 50 years.
https://ipropertymanagement.com/researc ... nt-by-year

GalaxyFlyer wrote:

More to the point, compare actual median wages o median rents, not legal minimum wage. We know the Federal minimum wage is well below market wages and state minimum wage laws. Looking to your link rent and wage inflation track pretty closely over the last 20 years. It’s an acute problem in some urban areas, true.

Right. Companies are paying employees the bare minimum to keep them on. Either that or they simply give them fewer and fewer hours to keep them on. Corporations are not there to help workers live. Corporations are there to make profits for the few at the top. They don't give a care about those at the bottom. In fact, those at the top blame those at the bottom for working in those jobs.

Even looking at median wages, rents are growing faster, albeit perhaps not each year equally. In urban areas - the vast majority of the population - rents increased by 85% between 2000 and 2020. In the same time period, the median wage only grew by 66%. (non-adjusted, both)

In addition, the ratio of median wage to average wage shrunk, i. e. the 50% of people earning above the median are increasingly better off than those earning below it. Looking at long term family income development: back in 1970, the ratio was around 89%, nowadays we're closer to 72%.
This inequality gives them more potential to outcompete lower income households on the housing market (as well as competition between high-earners moving towards higher rents faster, fueling overall price growth) and indicates below-average salary growth at the lower end. Hence why minimum wage remains relevant.

It's interesting. Some are demanding stop of gobbling up of real estate by investors, to lower the rents. But if investors stop gobbling up real estate, builders will not build as much. There'll be less real estate, right?

Others complain of greed of builders. But if builders suppress their greed, and lay down their tools of trade, that will be the outcome? Will there be more housing, if they don't build?

What am I missing?

Why Tokyo is the land of rising home construction but not prices

https://www.ft.com/content/023562e2-54a ... c0c26b3c60

As others have pointed out the housing crunch is a multi-layered issue with varying degrees of impact depending on what part of the country you’re in. Some aspects are more transitory (low rates, Covid/WFH-driven migration from larger urban areas, supply chain issues) while some are more long-standing, deeply-rooted and decades in the making (local ordinances and zoning regulations).

At its core we cannot build housing like we used to, with many cities and towns over the years more or less prohibiting the proliferation of the types of “missing middle” housing that used to be more common place (think mixed use development, duplexes, quadplexes, boarding houses, large-scale apartment buildings, etc). New homeless shelters are notoriously difficult to site and approve, localities unnecessarily handcuff their ability to construct affordable housing (think onerous environmental requirements, regs on union-only prevailing wages for construction…end result of which is driving up their unit costs and driving down the number of housing units they can ultimately build with public dollars, etc).

All of that is a big ship that is going to take while to turn and will require multi-pronged solutions in most cases.

flyguy89 wrote:

As others have pointed out the housing crunch is a multi-layered issue with varying degrees of impact depending on what part of the country you’re in. Some aspects are more transitory (low rates, Covid/WFH-driven migration from larger urban areas, supply chain issues) while some are more long-standing, deeply-rooted and decades in the making (local ordinances and zoning regulations).

At its core we cannot build housing like we used to, with many cities and towns over the years more or less prohibiting the proliferation of the types of “missing middle” housing that used to be more common place (think mixed use development, duplexes, quadplexes, boarding houses, large-scale apartment buildings, etc). New homeless shelters are notoriously difficult to site and approve, localities unnecessarily handcuff their ability to construct affordable housing (think onerous environmental requirements, regs on union-only prevailing wages for construction…end result of which is driving up their unit costs and driving down the number of housing units they can ultimately build with public dollars, etc).

All of that is a big ship that is going to take while to turn and will require multi-pronged solutions in most cases.

And the difficulty of turning that ship at political sea in changing conditions is exactly why there is very little progress in the last 30-40 years. No party, local government, or state policy is long-lived enough to see multigenerational change through on issues of this size.

Aaron747 wrote:

flyguy89 wrote:

As others have pointed out the housing crunch is a multi-layered issue with varying degrees of impact depending on what part of the country you’re in. Some aspects are more transitory (low rates, Covid/WFH-driven migration from larger urban areas, supply chain issues) while some are more long-standing, deeply-rooted and decades in the making (local ordinances and zoning regulations).

At its core we cannot build housing like we used to, with many cities and towns over the years more or less prohibiting the proliferation of the types of “missing middle” housing that used to be more common place (think mixed use development, duplexes, quadplexes, boarding houses, large-scale apartment buildings, etc). New homeless shelters are notoriously difficult to site and approve, localities unnecessarily handcuff their ability to construct affordable housing (think onerous environmental requirements, regs on union-only prevailing wages for construction…end result of which is driving up their unit costs and driving down the number of housing units they can ultimately build with public dollars, etc).

All of that is a big ship that is going to take while to turn and will require multi-pronged solutions in most cases.

And the difficulty of turning that ship at political sea in changing conditions is exactly why there is very little progress in the last 30-40 years. No party, local government, or state policy is long-lived enough to see multigenerational change through on issues of this size.

I will say however that I have been surprisingly impressed by some of the moves California has taken to override municipal obstacles and promote additional housing liberalization (still lots of work to do). The past couple years have certainly revealed that while California has been the poster child of the housing crunch, similar issues have surfaced in red states seeing population influxes…in other words, it’s truly a nationwide issue.

I could write a really long paragraph here but I am too lazy, so I just bring the essentials:

Heavy investment into public transport would solve a lot of the housing problems in the medium term. In general only city centers really can affort to have high density residential areas because a car is not necessary to get everywhere you want/need to be. Building high density housing in the sub-urbs increases congestion on roads because you concentrate homes and work on two ends instead of only one end easing this problems at least a bit.

If you have good commuter service (HSR/local) all the way out 150-200km away from the city center you can build high density residential areas close to the stations reducing the amount of vehicles on the road. These areas also tend to attract higher wage residents (they provide a better work/life balance due to shorter commutes) increasing property value in these high density areas while depriving the outer areas of value creating oppurunities for less well off people.

In general, high density areas are only funtioning when public traffic is above average.

So instead of changing laws and regulations, investement into a functioning public transportation service (which can be done by govt easier) will in the medium term ease problems. Long term government will need to intervene one way or another but thats a rabbit hole (and always was).

FluidFlow wrote:

If you have good commuter service (HSR/local) all the way out 150-200km away from the city center you can build high density residential areas close to the stations reducing the amount of vehicles on the road. These areas also tend to attract higher wage residents (they provide a better work/life balance due to shorter commutes) increasing property value in these high density areas while depriving the outer areas of value creating oppurunities for less well off people.

Yep, you are basically describing the model found in Germany, Japan, Korea, Taiwan, etc.

There are stations with sold-out new highrise developments more than 70 km from central Tokyo, in multiple directions.

Aaron747 wrote:

FluidFlow wrote:

If you have good commuter service (HSR/local) all the way out 150-200km away from the city center you can build high density residential areas close to the stations reducing the amount of vehicles on the road. These areas also tend to attract higher wage residents (they provide a better work/life balance due to shorter commutes) increasing property value in these high density areas while depriving the outer areas of value creating oppurunities for less well off people.

Yep, you are basically describing the model found in Germany, Japan, Korea, Taiwan, etc.

There are stations with sold-out new highrise developments more than 70 km from central Tokyo, in multiple directions.

Indeed. If you work downtown, and that downtown is unaffordable to you to live in, in place like Germany you look at both subway/tram/bus map, and also at train line map, to figure out where you can comfortably live with your budget. In e.g. Cologne-Dusseldorf corridor, people live/work in all kinds of strange combinations (on paper strange), as long as public transport works. There are options for driving, of course (it's Germany, they love their cars), but for so many, boarding the train and reading a paper, or typing away on the laptop, is just much more convenient.

FluidFlow wrote:

I could write a really long paragraph here but I am too lazy, so I just bring the essentials:

Heavy investment into public transport would solve a lot of the housing problems in the medium term. In general only city centers really can affort to have high density residential areas because a car is not necessary to get everywhere you want/need to be. Building high density housing in the sub-urbs increases congestion on roads because you concentrate homes and work on two ends instead of only one end easing this problems at least a bit.

If you have good commuter service (HSR/local) all the way out 150-200km away from the city center you can build high density residential areas close to the stations reducing the amount of vehicles on the road. These areas also tend to attract higher wage residents (they provide a better work/life balance due to shorter commutes) increasing property value in these high density areas while depriving the outer areas of value creating oppurunities for less well off people.

In general, high density areas are only funtioning when public traffic is above average.

So instead of changing laws and regulations, investement into a functioning public transportation service (which can be done by govt easier) will in the medium term ease problems. Long term government will need to intervene one way or another but thats a rabbit hole (and always was).

Mass transportation just doesn’t work out in the suburbs right now and won’t anytime soon. At least not in the US, because the population density and resultant distances one needs to drive to get to a station are too great. Unless you live in a place like NYC, or commute into NYC, it just doesn’t work. In Atlanta, where I live, the one exception to using the subway that makes sense (and only sometimes) is if you have to go from the far north side of town all the way across to the airport, on the south side. That and special events with thousands and thousands of people.

With Japanese style zoning and reduced regulations, I think you’d see Atlanta’s downtown residential neighborhoods revitalized and with significantly greater density. This in turn would allow for expanded subway lines within the city, which is a must-do first step if you want the suburb folks not to drive into town.

If you go on Zillow.com and search zip code 30311 you’ll see an example of a residential area in Atlanta that’s very old, with homes built in the 1940s through the 1960s for the most part. Large plots of land. Mostly single family housing and a lot of them not in great shape. Looks like even this area has gentrified a bit, but just imagine if a builder could buy up some of those houses, clear them out, and put townhomes and multi-family homes in their places. You’d massively increase density, increase supply and therefore decrease prices, while also setting up this area to be a good for a subway station and line.

If current zoning and regulations remain in place, that area will remain ripe for the picking for rich folks who want to come in and replace an old house with a newer high-dollar home. If you reform the regulations, gentrification will have to compete with developers who want to build multi-family housing, townhomes, and condos.

PPVRA wrote:

If you go on Zillow.com and search zip code 30311 you’ll see an example of a residential area in Atlanta that’s very old, with homes built in the 1940s through the 1960s for the most part. Large plots of land. Mostly single family housing and a lot of them not in great shape. Looks like even this area have gentrified a bit, but just imagine if a builder could buy up some of those houses, clear them out, and put townhomes and multi-family homes in their places. You’d massively increase density, increase supply and therefore decrease prices, while also setting up this area to be a good for a subway station and line.

If current zoning and regulations remain in place, that area will remain ripe for the picking for rich folks who want to come in and replace an old house with a newer high-dollar home. If you reform the regulations, gentrification will have to compete with developers who want to build multi-family housing, townhomes, and condos.

But that won't reduce prices. It will increase them in 30311, and raise rents. We currently see this in Raleigh, as more and more people start building back in the city core.

https://abc11.com/gentrification-raleig ... /11451727/

But it's not just the cost of land - have you priced materials lately?

casinterest wrote:

PPVRA wrote:

If you go on Zillow.com and search zip code 30311 you’ll see an example of a residential area in Atlanta that’s very old, with homes built in the 1940s through the 1960s for the most part. Large plots of land. Mostly single family housing and a lot of them not in great shape. Looks like even this area have gentrified a bit, but just imagine if a builder could buy up some of those houses, clear them out, and put townhomes and multi-family homes in their places. You’d massively increase density, increase supply and therefore decrease prices, while also setting up this area to be a good for a subway station and line.

If current zoning and regulations remain in place, that area will remain ripe for the picking for rich folks who want to come in and replace an old house with a newer high-dollar home. If you reform the regulations, gentrification will have to compete with developers who want to build multi-family housing, townhomes, and condos.

But that won't reduce prices. It will increase them in 30311, and raise rents. We currently see this in Raleigh, as more and more people start building back in the city core.

https://abc11.com/gentrification-raleig ... /11451727/

I’m guessing Raleigh has seen an influx of people and has not relaxed it’s zoning and building laws. An increase in supply with a commensurate increase in demand won’t drop prices. You gotta have supply increasing faster than demand to see a drop.

PPVRA wrote:

casinterest wrote:

PPVRA wrote:

If you go on Zillow.com and search zip code 30311 you’ll see an example of a residential area in Atlanta that’s very old, with homes built in the 1940s through the 1960s for the most part. Large plots of land. Mostly single family housing and a lot of them not in great shape. Looks like even this area have gentrified a bit, but just imagine if a builder could buy up some of those houses, clear them out, and put townhomes and multi-family homes in their places. You’d massively increase density, increase supply and therefore decrease prices, while also setting up this area to be a good for a subway station and line.

If current zoning and regulations remain in place, that area will remain ripe for the picking for rich folks who want to come in and replace an old house with a newer high-dollar home. If you reform the regulations, gentrification will have to compete with developers who want to build multi-family housing, townhomes, and condos.

But that won't reduce prices. It will increase them in 30311, and raise rents. We currently see this in Raleigh, as more and more people start building back in the city core.

https://abc11.com/gentrification-raleig ... /11451727/

I’m guessing Raleigh has seen an influx of people and has not relaxed it’s zoning and building laws. An increase in supply with a commensurate increase in demand won’t drop prices. You gotta have supply increasing faster than demand to see a drop.

And how are you going to increase the supply of houses faster than demand? Buy up all the supplies and labor to build them faster? Pull resources from other parts of the community?

casinterest wrote:

PPVRA wrote:

casinterest wrote:

But that won't reduce prices. It will increase them in 30311, and raise rents. We currently see this in Raleigh, as more and more people start building back in the city core.

https://abc11.com/gentrification-raleig ... /11451727/

I’m guessing Raleigh has seen an influx of people and has not relaxed it’s zoning and building laws. An increase in supply with a commensurate increase in demand won’t drop prices. You gotta have supply increasing faster than demand to see a drop.

And how are you going to increase the supply of houses faster than demand? Buy up all the supplies and labor to build them faster? Pull resources from other parts of the community?

That last sentence/question is the way to do it. And you do that by changing the incentives in the marketplace. And you do that by simply 1. Reducing minimum plot sizes 2. Allowing zoning for high density housing (including high rises).

If you did that for 30311, builders would buy a property, demolish it, split the land and build a small house on each smaller plot. Then sell each one for a profit. You can probably build at least 3 or 4 smaller homes in a lot of those plots of land. This multiplies the supply of homes. If you build a high rise condo instead, you’d be really boosting supply many times over.

Another dynamic we see today is builders choosing to build a McMansion over a small house because the mansion is much more profitable. But a condo project with 10 units would also be much more attractive than than the small house, and could give the McMansion project a run for its money. This is an example of how legalizing high density projects would pull resources away from McMansions and redirect them to high density housing (which is doing what you said in your post).

To keep the pace going above the influx of people, though, you’re gonna have to do this at the majority of zip codes. One lonely zip code isn’t enough to significantly change housing prices for itself or for the whole region.

By the way, 30311 is in an excellent location. Easy access to the airport and every business district in Atlanta. I have no doubt builders would attracted. It even has a big park with a lot of greenery nearby.

Happy that I managed to sell my house this summer before the prices started falling

PPVRA wrote:

casinterest wrote:

PPVRA wrote:

I’m guessing Raleigh has seen an influx of people and has not relaxed it’s zoning and building laws. An increase in supply with a commensurate increase in demand won’t drop prices. You gotta have supply increasing faster than demand to see a drop.

And how are you going to increase the supply of houses faster than demand? Buy up all the supplies and labor to build them faster? Pull resources from other parts of the community?

That last sentence/question is the way to do it. And you do that by changing the incentives in the marketplace. And you do that by simply 1. Reducing minimum plot sizes 2. Allowing zoning for high density housing (including high rises).

If you did that for 30311, builders would buy a property, demolish it, split the land and build a small house on each smaller plot. Then sell each one for a profit. You can probably build at least 3 or 4 smaller homes in a lot of those plots of land. This multiplies the supply of homes. If you build a high rise condo instead, you’d be really boosting supply many times over.

Another dynamic we see today is builders choosing to build a McMansion over a small house because the mansion is much more profitable. But a condo project with 10 units would also be much more attractive than than the small house, and could give the McMansion project a run for its money. This is an example of how legalizing high density projects would pull resources away from McMansions and redirect them to high density housing (which is doing what you said in your post).

To keep the pace going above the influx of people, though, you’re gonna have to do this at the majority of zip codes. One lonely zip code isn’t enough to significantly change housing prices for itself or for the whole region.

By the way, 30311 is in an excellent location. Easy access to the airport and every business district in Atlanta. I have no doubt builders would attracted. It even has a big park with a lot of greenery nearby.

In all the areas I have ever seen where developers split a property or build a condo, it is because demand is already high enough there to make it profitable. For this the builders would need subsidies from the town to make it happen, which will raise taxes on everyone ,for a project which eventually will not be cheap for those wanting to move there.

casinterest wrote:

PPVRA wrote:

casinterest wrote:

And how are you going to increase the supply of houses faster than demand? Buy up all the supplies and labor to build them faster? Pull resources from other parts of the community?

That last sentence/question is the way to do it. And you do that by changing the incentives in the marketplace. And you do that by simply 1. Reducing minimum plot sizes 2. Allowing zoning for high density housing (including high rises).

If you did that for 30311, builders would buy a property, demolish it, split the land and build a small house on each smaller plot. Then sell each one for a profit. You can probably build at least 3 or 4 smaller homes in a lot of those plots of land. This multiplies the supply of homes. If you build a high rise condo instead, you’d be really boosting supply many times over.

Another dynamic we see today is builders choosing to build a McMansion over a small house because the mansion is much more profitable. But a condo project with 10 units would also be much more attractive than than the small house, and could give the McMansion project a run for its money. This is an example of how legalizing high density projects would pull resources away from McMansions and redirect them to high density housing (which is doing what you said in your post).

To keep the pace going above the influx of people, though, you’re gonna have to do this at the majority of zip codes. One lonely zip code isn’t enough to significantly change housing prices for itself or for the whole region.

By the way, 30311 is in an excellent location. Easy access to the airport and every business district in Atlanta. I have no doubt builders would attracted. It even has a big park with a lot of greenery nearby.

In all the areas I have ever seen where developers split a property or build a condo, it is because demand is already high enough there to make it profitable. For this the builders would need subsidies from the town to make it happen, which will raise taxes on everyone ,for a project which eventually will not be cheap for those wanting to move there.

Passing laws that do what I mentioned above would not change prices overnight. It’s the increase in supply of new finished homes that will slowly erode prices over a few years timeframe. Until prices drop down enough, it will remain profitable to do this on its own. No special incentives needed. There’s pent up demand for smaller homes, if we were only to legalize them.

Well considering the fact that Florida and the US East Coast will suck up all the available building materials after Hurricane Ian, things aren't looking to good on the cost of that 2 x 4.

MohawkWeekend wrote:

Well considering the fact that Florida and the US East Coast will suck up all the available building materials after Hurricane Ian, things aren't looking to good on the cost of that 2 x 4.

Out here in the West, it has more to do with trade wars with Canadian logging than a hurricane. Our prices for 2x4 varies wildly because of just that: trade wars. It does not matter if we are in an epic blizzard or bumper crop.

PPVRA wrote:

casinterest wrote:

PPVRA wrote:

That last sentence/question is the way to do it. And you do that by changing the incentives in the marketplace. And you do that by simply 1. Reducing minimum plot sizes 2. Allowing zoning for high density housing (including high rises).

If you did that for 30311, builders would buy a property, demolish it, split the land and build a small house on each smaller plot. Then sell each one for a profit. You can probably build at least 3 or 4 smaller homes in a lot of those plots of land. This multiplies the supply of homes. If you build a high rise condo instead, you’d be really boosting supply many times over.

Another dynamic we see today is builders choosing to build a McMansion over a small house because the mansion is much more profitable. But a condo project with 10 units would also be much more attractive than than the small house, and could give the McMansion project a run for its money. This is an example of how legalizing high density projects would pull resources away from McMansions and redirect them to high density housing (which is doing what you said in your post).

To keep the pace going above the influx of people, though, you’re gonna have to do this at the majority of zip codes. One lonely zip code isn’t enough to significantly change housing prices for itself or for the whole region.

By the way, 30311 is in an excellent location. Easy access to the airport and every business district in Atlanta. I have no doubt builders would attracted. It even has a big park with a lot of greenery nearby.

In all the areas I have ever seen where developers split a property or build a condo, it is because demand is already high enough there to make it profitable. For this the builders would need subsidies from the town to make it happen, which will raise taxes on everyone ,for a project which eventually will not be cheap for those wanting to move there.

Passing laws that do what I mentioned above would not change prices overnight. It’s the increase in supply of new finished homes that will slowly erode prices over a few years timeframe. Until prices drop down enough, it will remain profitable to do this on its own. No special incentives needed. There’s pent up demand for smaller homes, if we were only to legalize them.

In a static environment where people are driven away, perhaps you will lower prices.( Detroit). However in communities where prices are skyrocketing . Providing the infrastructure and accomodations to put "More" people, will inevitably lead to services being offered, and opportunities, that will drive the prices up.

The Federal Government could start moving more jobs out of the DC area to area's like Youngstown, Oh and other parts of the midwest.

Sen Byrd did that alot when he was in office. It pissed off a lot of folks but where would WVA be today without those jobs in their state.

MohawkWeekend wrote:

The Federal Government could start moving more jobs out of the DC area to area's like Youngstown, Oh and other parts of the midwest.

Sen Byrd did that alot when he was in office. It pissed off a lot of folks but where would WVA be today without those jobs in their state.

One major piece of legislation passed

https://www.whitehouse.gov/briefing-roo ... ter-china/

The CHIPS act will create high tech jobs here in the United States. I know it says "bipartisan" but those Republicans have been primaried and have nothing to lose or have gotten zero support from MAGAs. Still, Democrats creating jobs right here at home to compete with China. Fewer imports in the years to come. Less supply chain issues.

But, this will all be undone if MAGAs take control...

GalaxyFlyer wrote:

Absolute silliness—Trump ran on an economic nationalist plan indistinguishable from Bernie’s—China is stealing our jobs, bring them home, globalization is hurting American workers.

Minus one major difference you left out - Bernie wanted to heavily tax the 1/10 of the 1% to fund infrastructure and healthcare improvements, whereas Trump wrote them all a blank check hoping to buy their favor.

GalaxyFlyer wrote:

When was a minimum wage earner ever expected to buy or rent a home. I worked minimum wage, lived at my parents as do many such employees. Minimum wage jobs are breadwinners—they’re the young or marginally skilled workers. Minimum wage 50 years ago wouldn’t have paid for an apartment rent then,

Exactly, this is such a tired old game. People say “how can I raise a family and retire” on a minimum wage job. It is not supposed to be a middle class family wage. A middle class wage is about 3-8x minimum wage. An upper middle class wage about 8-25x minimum wage.

A person on minimum wage should be able to feed themselves and share a home, like a bunk bed or maybe their own room in a rooming house. But it is not the right time to expect your own home with a yard and raise kids. By the time you have kids, you should be making 3x minimum wage, and partnered with another adult who is also earning that. Otherwise you should expect difficulty, because you have chosen that.

LCDFlight wrote:

GalaxyFlyer wrote:

When was a minimum wage earner ever expected to buy or rent a home. I worked minimum wage, lived at my parents as do many such employees. Minimum wage jobs are breadwinners—they’re the young or marginally skilled workers. Minimum wage 50 years ago wouldn’t have paid for an apartment rent then,

Exactly, this is such a tired old game. People say “how can I raise a family and retire” on a minimum wage job. It is not supposed to be a middle class family wage. A middle class wage is about 3-8x minimum wage. An upper middle class wage about 8-25x minimum wage.

A person on minimum wage should be able to feed themselves and share a home, like a bunk bed or maybe their own room in a rooming house. But it is not the right time to expect your own home with a yard and raise kids. By the time you have kids, you should be making 3x minimum wage, and partnered with another adult who is also earning that. Otherwise you should expect difficulty, because you have chosen that.

I'd like to know what dimension is your United States located in. If the Middle Class is around 5-6x mininum wage on average. Currently minimum wage in most states is 10-12 an hour, so I'd like to know how many people here earn 50-60 an hour, which comes to 115k a year, which is top 12%.

If your statement implies earn 6 figures or face difficulty because of your choice (since 90% of even qualified jobs DO NOT pay this amount), then this is one of the most tone-deaf, distant statements ever. Basically you are implying that 90% of workers are lazy because they should all have been neurosurgeons or engineers at Google.

CometII wrote:

LCDFlight wrote:

GalaxyFlyer wrote:

When was a minimum wage earner ever expected to buy or rent a home. I worked minimum wage, lived at my parents as do many such employees. Minimum wage jobs are breadwinners—they’re the young or marginally skilled workers. Minimum wage 50 years ago wouldn’t have paid for an apartment rent then,

Exactly, this is such a tired old game. People say “how can I raise a family and retire” on a minimum wage job. It is not supposed to be a middle class family wage. A middle class wage is about 3-8x minimum wage. An upper middle class wage about 8-25x minimum wage.

A person on minimum wage should be able to feed themselves and share a home, like a bunk bed or maybe their own room in a rooming house. But it is not the right time to expect your own home with a yard and raise kids. By the time you have kids, you should be making 3x minimum wage, and partnered with another adult who is also earning that. Otherwise you should expect difficulty, because you have chosen that.

I'd like to know what dimension is your United States located in. If the Middle Class is around 5-6x mininum wage on average. Currently minimum wage in most states is 10-12 an hour, so I'd like to know how many people here earn 50-60 an hour, which comes to 115k a year, which is top 12%.

If your statement implies earn 6 figures or face difficulty because of your choice (since 90% of even qualified jobs DO NOT pay this amount), then this is one of the most tone-deaf, distant statements ever. Basically you are implying that 90% of workers are lazy because they should all have been neurosurgeons or engineers at Google.

, and only people with such jobs deserve to own a home worry-free.

CometII wrote:

LCDFlight wrote:

GalaxyFlyer wrote:

When was a minimum wage earner ever expected to buy or rent a home. I worked minimum wage, lived at my parents as do many such employees. Minimum wage jobs are breadwinners—they’re the young or marginally skilled workers. Minimum wage 50 years ago wouldn’t have paid for an apartment rent then,

Exactly, this is such a tired old game. People say “how can I raise a family and retire” on a minimum wage job. It is not supposed to be a middle class family wage. A middle class wage is about 3-8x minimum wage. An upper middle class wage about 8-25x minimum wage.

A person on minimum wage should be able to feed themselves and share a home, like a bunk bed or maybe their own room in a rooming house. But it is not the right time to expect your own home with a yard and raise kids. By the time you have kids, you should be making 3x minimum wage, and partnered with another adult who is also earning that. Otherwise you should expect difficulty, because you have chosen that.

I'd like to know what dimension is your United States located in. If the Middle Class is around 5-6x mininum wage on average. Currently minimum wage in most states is 10-12 an hour, so I'd like to know how many people here earn 50-60 an hour, which comes to 115k a year, which is top 12%.

If your statement implies earn 6 figures or face difficulty because of your choice (since 90% of even qualified jobs DO NOT pay this amount), then this is one of the most tone-deaf, distant statements ever. Basically you are implying that 90% of workers are lazy because they should all have been neurosurgeons or engineers at Google.

I’m looking at it the other way. Federal minimum is $8 or so. 3x that is $24. You try raising a kid on $24. It’s middle class, but only by the skin of your teeth. In many states, the median household is 65-80k now. I think middle class is household income 45-120k or so. Above that, it’s upper middle class to 300-500k or so. Above 500 (1% income level), I say you’re rich.

I’m not saying anything controversial. If you are making $16,000 per year (or $24,000) you are not in a position to raise a kid and you should definitely talk with a doctor about making sure that doesn’t happen. $16k is a good income for somebody under age 20 who is learning a skill and provides very little value. It is not meant to be an adult living wage. And that’s ok.

casinterest wrote:

PPVRA wrote:

casinterest wrote:

In all the areas I have ever seen where developers split a property or build a condo, it is because demand is already high enough there to make it profitable. For this the builders would need subsidies from the town to make it happen, which will raise taxes on everyone ,for a project which eventually will not be cheap for those wanting to move there.

Passing laws that do what I mentioned above would not change prices overnight. It’s the increase in supply of new finished homes that will slowly erode prices over a few years timeframe. Until prices drop down enough, it will remain profitable to do this on its own. No special incentives needed. There’s pent up demand for smaller homes, if we were only to legalize them.

In a static environment where people are driven away, perhaps you will lower prices.( Detroit). However in communities where prices are skyrocketing . Providing the infrastructure and accomodations to put "More" people, will inevitably lead to services being offered, and opportunities, that will drive the prices up.

Detroit saw home prices collapse without zoning reform because people moved out of that place in droves. That’s not static, it’s a negative dynamic.

It’s possible that in some places, economic growth will outpace even the growth of housing supply. But prices will reflect how much it’s outpaced by, with reforms, they won’t rise as much.

PPVRA wrote:

casinterest wrote:

PPVRA wrote:

Passing laws that do what I mentioned above would not change prices overnight. It’s the increase in supply of new finished homes that will slowly erode prices over a few years timeframe. Until prices drop down enough, it will remain profitable to do this on its own. No special incentives needed. There’s pent up demand for smaller homes, if we were only to legalize them.

In a static environment where people are driven away, perhaps you will lower prices.( Detroit). However in communities where prices are skyrocketing . Providing the infrastructure and accomodations to put "More" people, will inevitably lead to services being offered, and opportunities, that will drive the prices up.

Detroit saw home prices collapse without zoning reform because people moved out of that place in droves. That’s not static, it’s a negative dynamic.

It’s possible that in some places, economic growth will outpace even the growth of housing supply. But prices will reflect how much it’s outpaced by, with reforms, they won’t rise as much.

But most of ther places clammoring for lower cost living are doing so because the market is going up in value so much.

Either way cities need to make choices between sprawl and urban density. There is room for both, but the infrastucture and costs will have to be spread about.

GalaxyFlyer wrote:

mxaxai wrote:

GalaxyFlyer wrote:

But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.

If there’s plenty of profit, explain why there isn’t an influx of building? It seems much of the rest of the country has no housing shortages shown by rising prices. Texas and Florida are building like crazy.

The one crappy thing about Texas is when there is an influx of building new housing, property taxes can wind up pushing out the long time home owners in that area.

bourbon wrote:

GalaxyFlyer wrote:

mxaxai wrote:

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.

If there’s plenty of profit, explain why there isn’t an influx of building? It seems much of the rest of the country has no housing shortages shown by rising prices. Texas and Florida are building like crazy.

The one crappy thing about Texas is when there is an influx of building new housing, property taxes can wind up pushing out the long time home owners in that area.

Wouldn't this allow more properties be redeveloped according to demand and is thus good?

ACDC8 wrote:

In regards to foreign investment, we have a major problem with that here in Vancouver, there are neighbourhoods that are literally bought up by the Chinese, houses torn up, massive mansions are built and they sit empty. Our Government's "solution" is that they created a speculator tax, which has zero effect since they buy the property for $1.5 million, put another million or two in in renovations, pay a hundred thousand dollars in "speculator tax" and turn around and sell it for $10 million plus.

When I first moved here, I looked at an apartment, the landlord was a young Chinese girl about 19 years old who is here on a student visa. I asked her how she can afford to buy this place, she laughed and said it wasn't hers, its her grandfathers who bought half the apartments in that building and other buildings in the neighbourhood. So I asked her why her grandfather isn't the landlord and she said that her grandfather lives in China and might move here some day. Then I asked her what she's studying here, and even though she's here on a student visa, she doesn't go to school and just lives off the money she makes through her grandfather. There was another example here just the other year, where a "student" was renting out an $8 million mansion, fortunately, he lost his visa and got sent home, but its rare when that actually happens.

.

Same story in Toronto. The last building I lived in in Toronto, was 50% pre sold in China, before the rest of the units went on pre-sale to Canadian buyers. Chinese buyers destroyed the market. My friends in Vancouver who own, bought in to the market to 15-20 years ago. All of them are high earners, but none of them could afford a house in the suburbs today, if it wasn't for the fact that they'd bought way back when.

Places like Toronto and Vancouver don't correct as well, the price may slightly dip or just stop growing, but there will not be a correction.

c933103 wrote:

Wouldn't this allow more properties be redeveloped according to demand and is thus good?

In principle, yes, though there may be other effects:
- Demand in this particular area may be strong for more expensive homes (e. g. with a large garden or luxurius outfitting), if there is an influx of relatively wealthy households who can afford to "waste" money on their home. This often means suboptimal utilization in terms of the number of apartments for a given property size.
- If owners can't afford the property taxes anymore due to rising valuations, they probably can't find a comparable and still affordable home. So either they downgrade into a smaller or less well-equipped home nearby, or they buy a comparable house somewhere more distant (where prices are still lower). This results in a net loss of quality of life despite a constant income.
- Zoning rules or the local homeowners' association may prohibit the building of vastly different buildings even if the demand is there.
- It may be financially more attractive to simply re-sell the building as-is (with a profit) rather than redevelop the property. Not necessarily in the sense of a higher, but rather a faster return on investment.

The social side-effects of such displacement are known as gentrification, with both good and bad aspects.

mxaxai wrote:

c933103 wrote:

Wouldn't this allow more properties be redeveloped according to demand and is thus good?

In principle, yes, though there may be other effects:
- Demand in this particular area may be strong for more expensive homes (e. g. with a large garden or luxurius outfitting), if there is an influx of relatively wealthy households who can afford to "waste" money on their home. This often means suboptimal utilization in terms of the number of apartments for a given property size.
- If owners can't afford the property taxes anymore due to rising valuations, they probably can't find a comparable and still affordable home. So either they downgrade into a smaller or less well-equipped home nearby, or they buy a comparable house somewhere more distant (where prices are still lower). This results in a net loss of quality of life despite a constant income.
- Zoning rules or the local homeowners' association may prohibit the building of vastly different buildings even if the demand is there.
- It may be financially more attractive to simply re-sell the building as-is (with a profit) rather than redevelop the property. Not necessarily in the sense of a higher, but rather a faster return on investment.

The social side-effects of such displacement are known as gentrification, with both good and bad aspects.

- The "relative wealthy people who cam afford to waste money of their home causing suboptimal use of land" can be mitigated by turning parking minimum, height limit, floor area ratio restriction and zoning restriction into minimum unit available restriction
- If one is earning constant income but failed to keep up with rising value, then the person is essentially losing out to inflation, thus reduced living standard is expected, same can apply to cars, foods, etc
- Yes reselling a building as-is would provide a more immediate profit, but when housing price is on the rise in one area, provided the law or regulation or zoning didn't work against it then it increase incentives to build more
- If there are zoning or various other regulatory roadblocks that prevent more houses from being developed then those can be resolved at government level?