The 'Silent Culprit' for The Housing Trap

This video is based on this article: www.fastcompan...

[@electrostatic1]

I can assure you, it is not the financing, it is the zoning. I can not build houses like you describe in my area, it is illegal. You are not allowed to sub divide property, use any per-manufacutured housing, or develop on lots less than 2500 sq ft, and "growth lines" are set up to make sure people on the edge of cities can not get water or sewer access.

[@JJ-ds5fs]

Zoning, financing, nimbys, etc. Also the fact they made the most affordable types of manufactured homes illegal, building a house in a factory is efficient but its more regulated and restricted than construction

[@samharris82]

I thought it had to do with land value and NIMBYs. If the ratio of land value to total value gets too high (because it's in a desirable place), developers need to add a lot of value with the improvements/structure in order to make a return. They COULD build 10x $200k 1,200sqft townhomes, but the local NIMBYs shoot down any high density zoning, so the developer is forced to build a $2M mansion.

[@tann_man]

It isn't necessarily financing that is the issue. Often times it's straight up illegal to build.

[@electrostatic1]

Exactly, You could get 10's of million of dollars in finance "literally" overnight where I live if it was legal to do.

[@PatrickKniesler]

Where a house larger than 1200 sq ft gets you isn't price per sq ft to build, it is price per sq ft to own and operate. The extra air in the envelope, surfaces to clean, and land to sit on...

[@GhostOnTheHalfShell]

I have a question for Chuck, how much are cities driven to look the other way because of property taxes? Do they understand the ROI on land from luxury homes vs entry level or is that a process in motion?

[@chuckstrongtowns]

There is a lack of knowledge broadly about municipal ROI, and that includes within city hall. It's not a matter of looking the other way; it's more a lack of curiosity.

[@GhostOnTheHalfShell]

@@chuckstrongtowns I wonder what effect a half dozen residents asking pointed questions would have? (Evil grin)

[@vincewhite5087]

It’s not costs, it the profit.

[@sspoonless]

Yeah "Fast Company" is a lot of click bait for impressionable young adults, with some info sprinkled in sparsely.

[@TheLyricalCleric]

If the regulations weren’t there, there’d be a LOT of this kind of development. There’d also be a lot of unsafe tenement buildings, like there were at the turn of the 20th century. We can build better, we just need to have common-sense zoning like Tokyo where housing is ubiquitous, rather than concentrated in one location.

[@موسى_7]

I agree. The only thing worse than bad regulation is a lack of regulation.

[@nunyabidness3075]

I’m not sure what the problem is with financing exactly. I suspect a development full of 600-800 foot tract SFH’s would not attract investors as that many homes clustered and sold to entry level buyers will likely have a dangerous amount of defaults. Make it condos, and you might make it work. Still, there’s a lot of fees to home transactions that start looking ugly when the price gets low. I would tell any young people to buy an older home instead of a small new one. Rent longer, save more, buy that older 1200 footer, and put in sweat equity. If you can get a really desirable condo, that might work as well, but it needs to be really desirable and in a good area. Also, every home has a kitchen and a bath. I’m guessing that adding 200 sq ft to a 1,000 sq foot home adds maybe 5% to the cost if you keep the same wet space, but adds over 10% to the sales price. You might get a builder to give info on that.

[@rob_nsn]

This advice isn’t practical on any scale beyond one individual person. The longer we go without there being options for financing new starter homes, the more the supply of these small homes dwindles and the fewer of them exist. There’s no sustainability in buying older small homes when the supply of available starter homes is only getting smaller.

[@kino_cinante]

There is a place in New Hampshire that made 44, 380 sqft homes instead of 9 mcmansions and they are selling like hotcakes. kzbin.info/www/bejne/fnqTqoGXfqaners I don't see why a cluster of low priced homes would default more, there is some bias from you there.

[@walawala-fo7ds]

​​@@rob_nsnI agree. Also the stater home is an outdated concept as who buys a home today with the intention of buying another even more expensive one when it is so incredibly hard to even buy something small... starter homes are just homes. I bought a starter home or so they call it which is more expensive than a 3000 square foot home in most of the country. Trust me when I say there is no way in hell this isn't my coffin... yeah sure, in the past I would just cash out and upgrade, but there is no supply of that either and whatever it exists will simply sky rocket my mortgage...so nah bro. There was nothing starter about what I bought 😂

[@nunyabidness3075]

@@rob_nsn I think you are trying to fight the market, physics, and the government. And, if you are concerned about sustainability, why push people without kids or even a spouse to buy a single family home? Also, my first home was 78 years old and 1150 sq ft when I bought it. Is it more sustainable that I should have bought a new home much farther out? If you really want people in smaller homes, build duplexes at least, right?

[@chuckstrongtowns]

Don't build a development of small homes. Allow them to be built here and there in existing neighborhoods.

[@walawala-fo7ds]

You can certainly get financing if the land is cheap, and labor is cheap as the total cost will be cheaper. The problem with urbanist thinking is that they want to densify the most expensive land in the world with the highest labor costs in the world. California changed zoning laws and nothing got cheaper. Then we said build transit and it will be cheaper, so they build miles of light rail and metro in LA and nothing got cheaper. Then it was height and parking limits and those got axed and nothing got cheaper. Now it is financing....I mean at some point we have ti accepting Occam's razor: you can't build affordable housing in unaffordable land and labor places 👍

[@nunyabidness3075]

New is very rarely affordable. People understand this with cars, but not homes, and it’s much worse with homes. Plus, in many areas the only people making money building small homes are building charity homes. They are not cheap, they are subsidized.

[@agilemind6241]

You have to recognize there are a huge number of people who don't want it to get cheaper. Everyone who owns a home does not want the value of that home to decrease - this is especially true for baby boomers who intend to retire on their home equity. So it is incredibly difficult to get house prices to drop. At this point the goal is simply to keep housing prices from increasing beyond the rate of inflation so that property ownership in and of itself is not profit generating. Only once that is true, will land owners be incentivized to make the most use out of that land as possible by densifying / renting out the portions they aren't using. But remember this is a 60 year trend that has become a plank in the foundation of the economy, it's not going to change in a few months.

[@dmike3507]

Changing zoning laws doesn't necessarily make anything cheaper (certainly not in the short run), it just ALLOWS developers to put different types of structures on the land, it doesn't force them to build it. It's a necessary but insufficient condition, and will take a long time before it takes effect. Building transit doesn't make housing cheaper, it gives people the option to live without a car. Trouble is you need to build transit close to residences & businesses, not in the middle of busy medians & freeways, otherwise people are still forced to own a car in order to DRIVE to the transit center, which is incredibly stupid and defeats the whole purpose! The auto industry wants to force people to have to buy cars, which is why they aren't lobbying the federal government to build functional mass transit systems in every major city (which can and should be done). Lifting height and parking limits do help, but in and of themselves they are not enough to offset the effects of supply & demand or the high cost of labor & materials. Look at where our politicians are getting their campaign finances from: real estate, finance, auto industry, etc. They can't bite the hands that feed them. All of our major industries collude to keep the cost of housing & transportation as high as possible so they can maximize profits, market shares, and stock values. Were you unaware of the S&L crisis, and the 2008 crisis? They committed the most elaborate financial fraud scheme perhaps in all of human industry to jack up the price of houses, and our politicians not only let them get away with it but then used OUR tax dollars to bail them out! And they are still getting away with it, by simply reclassifying subprime loans as non-QM loans. Those same industries also fund all of the mass media, which aren't going to enlighten you on any of this. We need to get corporations out of our political system.

[@nunyabidness3075]

@@agilemind6241 Everyone sensible will always be concerned with their property values, yet I actually think most Nimbyism actually comes from other concerns which then get labeled as nimbyism because those labeling find the other concerns inconvenient. At any rate, if you want a plan to fix values, you’ll need want to abandon hopes that people stop worrying about money or community.

[@Praisethesunson]

You've never lived in Vienna and it shows