The number of new apartments is at a 50-year high, but states expect a slowdown

NIMBY is by far the main problem CA has. The permitting process includes incredible amounts of public feedback, which makes it difficult to build a chemical plant and a middle school next to one another, but also makes it impossible to rezone or densify neighbourhoods.

>The permitting, environmental processes in CA are often onerous making new construction much more expensive

Can you give an example of this?

  > well meant 

The individuals behind these regulations (anti-housing activists like Marc Andreessen and the local NIMBY politicians) are well educated and wealthy. They know what they're doing.

Do you have evidence of this?

States generally set the regulations that cities must follow. So they can constrain cities or choose not to.

For instance Washington State forces cities to make zoning plans that align with state housing needs. Similarly they set rules near public transit in some cases.

Coastal California is one of the most desirable places to live in the world.

It will always be higher priced than most other places, unless maybe it looked like Hong Kong, but that might so reduce how desirable it is.

Investors only invest in things with a good return. It's why they don't buy up, say, nails, because the nail makers would just produce a lot more nails to sell to them and they'd be left sitting with a bunch of nails.

They invest in housing because it's scarce because we don't build enough of it.

And if you look at the actual numbers, large-scale institutional investors just aren't that big a factor. It's another bogeyman for people desperate to avoid the solution to not having enough housing: building more housing.

Austin is an example of the market balancing out when allowed to do so.

In case anyone reading thinks otherwise: you can absolutely be a socialist and a YIMBY. Maybe your goal is Vienna style housing. The only thing you need to acknowledge is that cities need 'enough' housing.

Landlords would be happy if rents never fell though. They're not dropping them because "gosh, maybe we charged too much during the pandemic". New housing was built and landlords had to compete for tenants. Dropping prices during a time when inflation is still a thing is a pretty big deal, and very beneficial to thousands of people.

The housing market is, indeed, anything but free. That's a core idea behind the YIMBY movement: make it legal to build more kinds of housing, rather than just meet demand by outward sprawl.

> But supply and demand do apply and it has been a political goal for decades to ensure that supply will be constrained.

That's what YIMBY is about: fighting back against those constraints. They have hugely detrimental consequences for people, the economy and the environment.

In terms of "capitalism", I think most YIMBYs are pragmatic - capitalism is the system we have in the US, so we need to leverage it as much as possible to get the housing we need. If we could get Vienna style social housing, I think a lot of YIMBYs would be happy to sign up. You still need Vienna style zoning and building codes to get that, though.

Yeah, the specific contribution here is tracking a stable cohort of existing housing, not the entire market, to show the effect of new construction on the price of older housing.

U.K. has a viscous cycle where if your parents are in commuting distance of London you can live with them for a few years and the money you save from not renting will fund a deposit. By the time you’re 30 you can then by and your career will have progressed

If you can’t benefit from that then you spend that deposit on renting, which means you can’t buy in your 30s and are trapped in the rent cycle.

Odd, renting while I lived in the UK was the only way I was able to save.

If I had attempted to buy, I would literally have financially died (not to mention wouldn't have been able to pursue better jobs elsewhere at the drop of a hat - month's notice).

Not only UK, Europe in general is stuck in this nonsense. People buy properties, tenants pay their mortgage. In 15 years the property is yours mostly at the expense of someone else plus it gained in value. After owning it for so long and selling the property you probably pay lower capital gains from that too. Unless you put all that money in the right stocks in 2010, renting just doesn’t make all that much sense in this economy.

This is the thing that is so depressing. I know someone who owns 6 apartments, 5 of which he has rented out and his family is living in the 6th. Every couple of years, he will save enough money for the down payment, buy an apartment and his tenants end up paying the mortgage.

His tenants will never be able to save enough money for a down payment, so they are stuck in a endless cycle of paying someone else's mortgage, just for the privilege of having a roof over their heads. If wages were fair, if mega corps like Blackrock weren't allowed to buy entire neighborhoods, maybe his tenants will have a fighting chance of owning a place for themselves, even if it is just a small two bedroom apartment.

A dude I used to work with - he used to buy a couple of apartments in buildings right when they get started (he has contacts all over a major city). By the time the buildings are finished 3 years later, the "value" of those apartments have already gone up anywhere from 10 to 20 percent or more, depending on the area. He'd sell for a profit, rinse and repeat. His only goal is to flip - sometimes he buys apartments without even looking at them. Of course it is legal, but is it ethical?

This whole thing is just depressing.

By that kind of reasoning what purchased goods or services I get from any entity wealthier than me aren't a regressive tax? For instance I bought a sandwich from Subway yesterday rather than making one at home, because it was more convenient. Was that a regressive tax on my food?

when fixed costs are high you want to invest more to raise the final price. The lower the fixed costs the less sense it makes to build the most expensive thing you can.

there are only so many people looking for those units. As more units are built the competition to sell those units will heat up. Either prices drop on those units, or theyre replaced by units that are cheaper to build. Right now they can sell all the luxury units they build so no reason to build anything else. So removing the barriers doesnt itself make luxury less appealing for developers, but it increases the number of units built and that makes luxury less appealing for developers. It will still make sense to build luxury, but it wont make sense to build only luxury.

There are other reasons too. Personally I would not mind living in communist style blocks and I know some others agree. If it was legal to build those they might be created because you can fit so many more units on a plot compared to luxury housing.

Sure you can. It requires a responsible government to align incentives. There is no axiomatic problem for building enough housing. The problem is the housing-as-investment paradigm, which only works if there is a perpetual housing shortage to drive prices well above values. Housing-as-investment creates a vicious cycle of shortage and incentivized harms to society in the interest of driving prices of housing up via a lack of desirable options.

To have a decent society for our children in a growing country, housing cannot be an investment. The value of a house must generally track downward with the depreciation of its structure. You need to separate the cost of housing from the cost of land, and in cities at least, tax land in accordance with its utility, encouraging vertical development in high population density areas.