Those rates are symptoms not causes. Because the amount of land that can be developed into high density housing is extremely limited it is also extremely expensive. That means the units are going to have to be luxe. Luxe units give people with a lot of capital someplace to park that capital. If you could develop lower priced SFR parcels into medium density units it would undercut that phenomenon but you can’t because of zoning.
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You do realize that for the last hundred years of single family zoning, that has been code for, “keep the neighborhood white,” right?
No one has a right to the stasis of other people’s property.
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It’s not zoning that’s keeping urban high density units from being affordable, it’s the greed of the developers who build the kind of housing that will make them the most money, rather than the kind of housing that the city needs. Cities that put a tight leash on their developers, regulating what kinds of housing can be built and either subsidizing affordable housing or flat out building affordable housing themselves, have high density high rises that are also affordable by most of the city’s residents.
CF Hong Kong, where the biggest high rises are (subsidized) low rent apartments.
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Some property owners prefer to have a loss to declare on their taxes, & do without the bother of tenants or building management.
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Composting/biodigester toilet. Additiinal fuel/energy source for the boat and you can sell the fertilizer. Just make sure your biodigester processes your waste faster than you produce it…
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Which is why the tax laws need to be rewritten to brick this loophole shut…
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For a long time the world of fine art has been a great way to launder money and cover up expensive illegal deals. Fine art has a few properties that make it great for this purpose: 1. No one can really say how much it is worth because it’s one-of-a-kind so the buyer and seller exclusively set the price; 2. It’s easy to transport a whole lot of money in a very compact way. $10M in cash weighs a lot and money and is a very tempting target for theft, a $10M painting weighs little and has a much smaller value to thieves than to the person doing the transaction. Plus, once the art is established at having a high value, you can insure it at a very high value, which opens up another possibility for lucrative fraud.
Take out “fine art” and put in “real estate” and you barely have to alter that paragraph. It’s even more theft proof and easy to transport, it’s even easier to inflate the values.
The weakness with real estate is that you usually have to register as the owner. So I think I’ve got a solution: progressive tax on real estate sales. The more the property sells for, the more tax you charge. Residential properties over $1M? 45% tax on the sale. Over 10M? 150% tax on their sale. Normally progressive sales tax is just not viable. Real estate is one place we would actually implement it.
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Ish. In the pushback on gentrification/luxary development and approaches that push out full time residents and local businesses.
But the NIMBY take is often built around prevent neighborhoods from changing. Which isn’t practically possible, so it’s essentially abdicating control over how neighborhoods change.
Which is an important way this sort of investment class development skates through. And it tends to further lock in the incentives to redevelop everything as luxary space. If everything is already maxed out for size and density under current rules, one of the only ways to increase property values, rent extraction or justify losses and increase sales prices. Is to redevelop for a higher cost market.
And especially once you get outside of cities the NIMBY take almost always dovetails directly to the thrust for increased property values, and high end development. Where I live is still fairly rural. And the big shibboleths of nimbyism are things like public transport, sustainable energy projects, aquaculture, small lot sizes, multi-untit housing. Among other things. And it’s closely tied to wealthier, older and part time residents who relocated here in the last 25 years. The very same people who are driving the change they claim to be preventing.
The whole YIMBY thing seems to have grown out of urban NIMBY aspects that aren’t closely tied to wealth an gentrification. And it closely tracks with the sort of push back from locals, the young and working class residents we’ve always been seeing here. Where the NIMBY stereotype is a lot more accurate, and the divide a lot cleaner.
You also gave the fact that rising property values are a mark of a strong ecconomy. And good for local residents. But there’s a rising awareness of the shortcomings of that. Broadly you have the problem that rising property values only benefit those who’ve already bought in, or those already have means. For those who haven’t or don’t, it prevents them from buying in at all. And specific to these cities. When so much of the available property is own by, and only accessible to, non residents. The benefits of increasing property value is not to then local ecconomy. Instead it becomes wealth extraction. Money, and tax revenue is removed from these cities, and benefits somewhere distant.
But for the most part they are adding fewer units of housing than they’re gaining residents on a year to year basis. Fewer units than they need.
Which helps drive rising costs, which helps driving rising property values, which helps drives rising rents, which all helps drive their value as tax write-offs and investments. It’s a feed back loop.
It’s all different aspects of a shortage of available, practically affordable housing.
Characterizing it as oil money is sort of a mistake. A good lot of it originates in oil. But there’s also drug money of course. And quite a bit of this seems to flow from places or people that aren’t neccisarily sanctioned.
The nut of it is that it’s state money. Either money flowing from sanctioned states, to end round sanctions. Or state funds that have been misappropriated. State own oil, where those funds are going to individuals rather than the state, or state own oil company. Funds from illicit sale of state property like weapons. Just straight up looted tax revenue. And from the sanctioned states a lot more ecconomic activity design to funnel money back into the state either to prop it up or to illicitly fund things. The Iranian Republican Guard essentially operates as a non-Iranian investment and real estate corporation at this point. Laundering all sorts of things, but also running sketchy businesses to send money back to the Iranian state. Both generating income to fund terrorist groups and pro Iran rebels and hiding payments from the Iranian state to such groups. All while funneling money into Iran to cover ecconomic short comings. And of course to bring wealth in around sanctions.
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I’m sure you won’t mind when I buy the single family house next to yours and put up a 75 story condo building. Or a gas station. Or a refinery. Or a Trump tower. Zoning rules exist for a reason.
Here in Denver, redevlopment is pushing out the Older, Full Time residents who have lived here for 25 years. Entire blocks of single family homes were “rezoned” into 3 story duplexes. The poors that lived there were often renters but not always. They were bought out, often on the cheap, by developers - many times before the rezoning went into place. Then the blocks were scraped in total. The profit all went to the already rich, rarely local developers. Locals with hourly wage jobs can’t outbid the developers, so almost everything that goes on sale gets bought and scraped.
One problem with rising property values is reflected on my block. My neighbor has lived in her home for 50 years. In the last 10, her property taxes have tripled, bc they are based on ‘sales of equally valuable homes.’ She sees NO benefit from this rise, and will eventually be priced out of her lifetime home because she has a fixed income.
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On the other hand…
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The point is, they’re not ridiculous delusions but real concerns. For example, new high-density housing (at least when occupied) does place strains on existing infrastructure and services if a city doesn’t impose limits and levies on developers or buyers.
The NIMBYs usually just take them too far or exaggerate and allow zero room for compromise. And all too often their complaints are tinged with racism and classism. Shamefully, that also is true for wealthy liberal communities like the People’s Republic of Santa Monica.
What’s going to be interesting over the next decade is watching how older NIMBYs change their tunes the moment they sell the house and downsize and/or relocate. The point in time between looking for a new place and selling the old one must be one of extreme cognitive dissonance.
I didn’t argue otherwise. I was pointing out that there’s a spiral effect. To what degree and for whom its virtuous or vicious is another matter.
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Change the perspective as you look at the housing transactions, and the empty units. Don’t think of them as “housing”, but simply as a “financial instrument” more like buying a stock. Since that’s what they are, simply a place to park some value and then resell later when you need the value back. Exactly like buying a stock, just traded in a different marketplace.
Replace “luxury units” with “investment” or “stock” and all of these things make more sense.
You don’t rent out a stock you hold (well, maybe to a short seller, but not typically). A stock may pay out dividends, similar to collecting rent, or it might not.
With $100M to invest, that’s 332 shares of Berkshire Hathaway Class A or 749K shares of IBM, or 1.6M shares of Vanguard S&P 500 Index Fund, or just 2 $50M luxury condos.
Turning housing into financial instruments reduces the number of actual housing units available, thereby raising rents. As new units are built, you need to know which supply they’re adding to, just more financial instruments or actual units for housing.
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My solution to all of this would be for these cities to elect Democrat mayors and for them to form Urban Planning Departments. It may take a few years, but soon enough we’ll have cities with clean and safe housing at only the fairest rental rates.
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And with a growing population newer housing has to be built. Building out, without increasing density is called spawl. Not only does it create evironmental problems. But it tends to create a lot of quality of life issues, and have severe negative impact on lower income brackets. It precludes or complicates public transport, necessitating car ownership. Pushes lower income residents from the city center. Prompts strip malls and highway commercial spaces over downtown type business districts.
Fact of the matter is that cities change, towns shrink and grow. Building out, low density and single occupancy homes has been a disaster look at Phoenix and LA and their unique problems. If you don’t add housing, prices rise with population. And long term non moneyed residents will be pushed out.
Attempts to create stasis, to “preserve” neighborhoods. Don’t avoid that, they lead to sprawl where sprawl is possible. You need to increase density to avoid that problem. But the insistence to keep things as they are despite growth, basically just empowers the luxary models of development. Larger and more expensive homes, or where density happens it comes in the luxary condo.
Shits gonna change. Stamping your feat and attempting to prevent it just means you don’t have a voice in how. And you can push back on this sort of luxary market, one sided development without opposing any sort of development. A growing number of people are.
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FYI Crystal City (Arlington, Va.) values up 2.9%
Guessing that this time next year it will be even higher as people look to make profitable buys near the new HQ.
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Or improve infrastructure and services.
Yup.
Basically it comes down to an abandonment of urban planning as an approach, municipalities or communities carefully planning all of this in concert to accomplish a goal. In favor of a much more limited approach where private developers plan single buildings or blocks of them, with infrastructure used by government to “buy” such investment. Or vice versa. Lixary developers promising to pay in for infrastructure that will exclusively benefit themselves. To get cash strapped municipalities to give them a pass on things like affordable housing and zoning.
The problem I have with the NIMBY approach is it doesn’t offer an alternative. Even when their hearts are in the right place. Opposing all development and regulatory change , even attempts at positive ones.
And in all sincerity. They’re hearts of often not in the right place. When you move to a farming and fishing town. And then fight actively against agriculture land use, and commercial water use. Because it smells, or spoils your view, or “changes the character of the community”. And advocate for “preserving open space” via private beaches and lifting the residential zoning limit to 5 acres. You’re very much on the wrong side of it.
And that’s very much what our town meetings look like here. We have part time residents suing the state in an attempt prevent shellfish farming. Under the justification that locking up portions of the publickly owned sea bottom “changes the character of the area” by preventing people from using those areas for recreation (which it doesn’t).
And while that’s a sort of extreme that doesn’t much happen in cities. A fair bit of the NIMBY end of it are middle to upper middle class whites stumping for the neighborhoods they gentrified to stay within their means. I spent some time working with an activist religious college with deep connectiona to Harlem community organizing. And amid the push back on gentrification there you don’t hear much about capping building hieght or " preserving the character" of anything. Or any of the other typical NIMBY junk. You hear about pushing for development that people can afford, low an no interest loans to help long term residents buy in, increases in public housing, policies that’ll foster local business ownership.
They don’t necessarily want to stall out change, they want the opportunity to buy into it, and drive it. Very much the sort of thing that’s inspiring and turning into YIMBY.
Outside the city many of the drivers are the people have already downsized, or relocated.
Personally I think the come up short moment is going to come when the property value stalls out. Things really can’t go up forever. So at a certain point, even without a crash. You’ll have people who bought in at to high a price to even get that money out should they need/decide to.
In a lot of ways that’s what we’re already seeing in major cities. Increasingly actual residents can not afford any of the neighborhoods, regardless of wealth level. And the remarkable thing is we’re starting to see even the upper middle class pushed out. Replaced by this investment and laundering a activity, and part time residency for wealthy outsiders which multiple homes.
We mostly agree. I just have very little simpathy for the NIMBY. As it’s a key reason I can’t afford to even rent in my hometown, where I currently live. And will likely never be able to afford to own. A key reason why the only jobs are seasonal service jobs. And driver in the erosion of more stable and varied business activity.
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The need to heavily subsidize high density affordable housing is a symptom of the restrictive zoning. Everyone automatically goes to high density and that isn’t even necessary. We don’t need 70 story residential towers to double or triple density in a city. We can do it with a mix of high-rise, mid-rise, and low-rise but first we have to eliminate SFR zoning which in Los Angeles accounts for about half of the developable land.
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If you could get a 75 story tower to pencil out in the hills of Los Angeles, I would love to see it. But I doubt you could even if you were allowed. Same thing with a refinery or gas station. Residential parcels are too valuable for those old strawmen. Besides I’m not arguing that the entire zoning framework be scrapped, just SFR. If someone built an apartment building next to my house, I would jump for joy because it would mean that I could build an apartment building and probably retire early off the rental income. Single family zoning just limits how valuable my land could become. I bought a grandfathered in duplex in a single family neighborhood just so I could have rental income in retirement. And I would definitely love to be able to walk down the block to a little bistro like you can in the hillside towns of Southern Italy but is precluded by zoning.
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