tag:blogger.com,1999:blog-17232051.post2857029392829296608..comments2024-03-18T07:04:18.975-04:00Comments on Noahpinion: The NIMBY challengeNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger49125tag:blogger.com,1999:blog-17232051.post-63501023633120314662017-08-29T14:31:20.760-04:002017-08-29T14:31:20.760-04:00Spatial distribution is that there's a new apa...Spatial distribution is that there's a new apartment in the next neighborhood over that is built in order to keep my apartment here affordable.Mikenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-86660099418048135412017-08-28T13:56:13.646-04:002017-08-28T13:56:13.646-04:00Hilarious. How do you think the current owners go...Hilarious. How do you think the current owners got the land?<br />We are (mostly) talking about Americans here. . .Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-29027032721561698932017-08-28T13:52:54.122-04:002017-08-28T13:52:54.122-04:00Something similar is happening in the Seattle Metr...Something similar is happening in the Seattle Metro area right now. There are maybe 100,000 people who have been pre-approved for a $200,000 mortgage, and if anything in that price range (withing commuting range) comes on the market, there is a scrum of people bidding on the house.<br /><br />Meanwhile, there is a pretty good inventory at the $600,000 and above price point.<br /><br />Interestingly, the niceness of the house dramatically increases once you get above the "first time buyer" price level. Some people call this "the cliff".<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-3720079543798813612017-08-28T13:45:08.762-04:002017-08-28T13:45:08.762-04:00I grew up in the Hamptons and lived (briefly) in S...I grew up in the Hamptons and lived (briefly) in San Francisco. No way SF is going to turn into East Hampton. Not even Westhampton. Not gonna happen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64781458858985976052017-08-03T09:28:34.733-04:002017-08-03T09:28:34.733-04:00Thanks. This makes a lot of sense. Additionally,...Thanks. This makes a lot of sense. Additionally, housing prices have two very different components -- privately-created building value and publicly-created land value. Property taxes contribute to high housing prices because we over-tax privately-created building values and under-tax publicly-created land values.<br /><br />Most property taxes are between 1% and 2% of value. This doesn't seem like much. But (unlike a sales tax that is paid once), property taxes are paid each and every year that an improvement adds value to a property. Over time, the economic impact of a 1% to 2% property tax on a long-lived asset (like a house) can be equivalent to a one-time sales tax of 10% to 20% on construction labor and material. That's a huge barrier to affordability.<br /><br />On the other hand, when better schools or better transportation increase land value, 80% to 90% of this publicly-created land value ends up as windfall gain to private landowners. This encourages land speculation -- a parasitic activity that produces nothing of value but which inflates land prices. Furthermore, land speculation creates real estate price bubbles which, upon bursting, can send the entire economy into a recession or depression.<br /><br />Reducing the tax on buildings would make buildings cheaper to construct, improve and maintain. Surprisingly, a higher tax on publicly-created land values (by discouraging land speculation) helps keep land prices lower as well. Thus, by shifting the property tax off of building values and onto land values, a community can make housing less expensive without any new expenditure or any loss of revenue.Rick Rybeckhttps://www.blogger.com/profile/18272099706057922149noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64027886547278668962017-07-04T02:23:12.083-04:002017-07-04T02:23:12.083-04:00Why not just use force against the NIMBYs and redi...Why not just use force against the NIMBYs and redistribute their land? You're never going to overcome the privilege they gained by being born around the middle of the 20th century by working within the rigged governmental and judicial systems of the US or the California. America is in desperate need of economic growth. Enough talk. Expropriate by any means necessary. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20431282941933337942017-05-29T23:40:31.086-04:002017-05-29T23:40:31.086-04:00This NIMBY post reminded me of a time back in the ...This NIMBY post reminded me of a time back in the 70's at NASA when a guy came to talk to use about a proposal to build a STOL port in NYC. His group set up meetings in areas that could be affected by the proposal. HaHaHaHa. You haven't seen nothing yet till you come up against New Yorkers. They told the group that nothing they could say would make them accept the proposal. They had been lied to so often that No was their ans to any city proposal.dilbert dogberthttps://www.blogger.com/profile/09637308390558302302noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-76911459193257684022017-05-29T10:11:10.451-04:002017-05-29T10:11:10.451-04:00Instead of picking on SF NIMBY's go down penin...Instead of picking on SF NIMBY's go down peninsula and pick on Atherton/Menlo Park/Palo Alto. dilbert dogberthttps://www.blogger.com/profile/09637308390558302302noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-43620073737360805182017-05-25T17:44:51.605-04:002017-05-25T17:44:51.605-04:00Indeed. I saw a poor elderly black tenant in my bu...Indeed. I saw a poor elderly black tenant in my building given the boot last year. Of course a trans woman moved in so it's not necessarily a loss for the forces of enlightenment.Dainhttp://dryhyphenolympics.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-24277807866190242392017-05-25T16:39:05.846-04:002017-05-25T16:39:05.846-04:00People have begun to appreciate Oakland on its own...People have begun to appreciate Oakland on its own terms, as opposed to a second-best option. Weather is one reason why. (Mass BART thefts is not.)Dainhttp://dryhyphenolympics.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-10173929726074663912017-05-25T10:50:53.299-04:002017-05-25T10:50:53.299-04:00Please, guys, stop characterizing my argument as i...Please, guys, stop characterizing my argument as if I think building more housing doesn't afforestation the price of existing housing. I said in my initial post and in many subsequent comments that building more housing causes average housing prices to go down, even if the new housing is hig-end. What we are talking about is the spatial distribution of housing prices.Philnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-33939680741277882792017-05-24T20:42:05.328-04:002017-05-24T20:42:05.328-04:00A comment of mine (in moderation or perhaps lost i...A comment of mine (in moderation or perhaps lost in space) has an error. While the 23 ward area of Tokyo's population was stable from 1970 to 2005, I missed the point that it has been growing at just under 1% per year since 2005, bringing the population as of April 1, 2017 to 9.4 million, as opposed to 8.3 or so million in 2005.<br /><br />This is why the percentage of elderly (over 65, of whom I will be one shortly) in Tokyo is falling, and why there's a horrific lack of pre-school/day care facilities, even though the total number of children being born is falling.<br /><br />The fastest growing wards are Chuo, Chiyoda, and Minato, the three central wards, two of which are two of the three lowest density wards. (Although the total population of those 3 wards is only about 470,000.)<br /><br /><br />David J. Littleboynoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-19226934289983489432017-05-24T17:44:02.638-04:002017-05-24T17:44:02.638-04:00"NIMBYs do seem to recognize this on some lev..."NIMBYs do seem to recognize this on some level. So they intuitively turn to a phenomenon called "induced demand" (though they may not realize it's called that). "<br /><br />I know you've turned s**tting all over Econ 101 into a hobby-horse, but here the basic partial equilibrium framework is really illuminating. In understanding induced demand, we can simply differentiate between a (relatively speaking) inelastic short-run demand curve and a (relatively speaking) elastic long-run demand curve. People moving into a neighborhood that has increased housing supply can shift the short run demand curve, but it is simply a movement along the long-run demand curve. In both cases, if we realistically assume that the demand curve for housing is downward sloping, increasing the supply of housing by easing restrictions on housing supply will certainly reduce the price of housing. <br /><br />Equivalently, NIMBYs would have to bravely assume that the long run demand curve for housing is perfectly elastic. Anonymoushttps://www.blogger.com/profile/03603797185134267934noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-10739009342101270442017-05-24T16:34:22.912-04:002017-05-24T16:34:22.912-04:00Good analysis. One counter-intuitive point I'd...Good analysis. One counter-intuitive point I'd like to emphasize is seems like it's not that adding new apartments will lower rents "even if" they're market rate or above, it might be the case that they'll lower rents "only if" they're market rate or above. Building "affordable housing" - where rents are below market rates, and tenants and/or landlords are subsidized - may actually be counter-productive.Steve S.https://www.blogger.com/profile/15276218411346368617noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-58834190338920408642017-05-24T09:44:29.473-04:002017-05-24T09:44:29.473-04:00I'll bet that this (PD at 3:08) is the right a...I'll bet that this (PD at 3:08) is the right answer. Were I way richer and were interested in leaving Tokyo, I'd like to move back to Boston or go to SF. There's a zillion Boston area college grads who'd move there in an instant, were there work and cheap housing, and if the housing were cheap enough, the work wouldn't matter. Boston's wonderful.<br /><br />Toss the 120,000 new jobs in SF mentioned above into the mix, and there's now a near infinite supply of new SF residents. The only thing keeping them out is the average wage of those jobs limiting the rents they can afford. So the price can't go up, but at a fixed price, you can sell/rent as many units as you make.<br /><br />Dunno how to describe this phenomenon in Econ 101 terms, but I saw something similar in Tokyo back when I was renting (30 years ago): If you had 1500 bucks (150,000 yen) a month to spend on rent, there were gobs of small but decent apartments. You couldn't find something noticeably nicer for, say, 2100 bucks. Anything cheaper was yucky. And anything nicer was either waaaaaaaaaaaay out of town or 5000 bucks a month.<br /><br />The Tokyo 23 wards area population peaked around 1970 and is now a tad lower than that. Sure, there's lots of new condo construction, but that's relative to a 9 million population, and thus not statistically significant.<br /><br />Here's the Japanese wiki article on the 23 wards. Scroll down about 1/3 of the way to the colorful chart that crashes from 1940 to 1945 (US bombing'll do that to you) to see the 23 ward population from 1920 to present.<br /><br />https://ja.wikipedia.org/wiki/%E6%9D%B1%E4%BA%AC%E9%83%BD%E5%8C%BA%E9%83%A8<br /><br />HanTheBarbarianhttps://www.blogger.com/profile/17095842188083651224noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-34338682025231376022017-05-23T13:23:10.833-04:002017-05-23T13:23:10.833-04:00Pure anecdote...but I live next to a neighborhood ...Pure anecdote...but I live next to a neighborhood that is gentrifying rapidly. It's a heavily Hispanic, working class area and many locals are suffering from fast rent increases, aggressive tactics by landlords to push out rent controlled tenants, etc.<br /><br />I can tell you that many of the "nimbys" that show up to fight approvals on developments in that area are minorities and renters trying to stop the forces of gentrification from displacing them.<br /><br />I think this dynamic is common in a lot of cities that are seeing rapid growth right now. Residents are seeing a burst of development and are seeing rapid rent/price increases tied in with gentrification. While these two trends are not completely separate, people often assume the former drives the later.MaxUtilnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-12899026491008093802017-05-23T01:48:55.733-04:002017-05-23T01:48:55.733-04:00I think there's a bigger problem with Phil'...I think there's a bigger problem with Phil's argument than anything that's been mentioned here.<br /><br />Let's suppose we grant Phil's premise that building new housing won't affect the price of existing housing; that these prices are fixed for all time when it's built.<br /><br />If we assume that, then, as he argues, building new market-rate housing will increase the median rent.<br /><br />The problem is that <i>this is irrelevant</i>. "Increased median rent" does not mean that things have gotten less affordable! One has to make sure that the statistics one uses are actually relevant to what we care about here!<br /><br />When you're trying to rent an apartment, what's relevant is not the median rent, but the rent of the particular apartment you can find. Even if we grant Phil's premises, building new housing will not cause anyone's rent to go up, even if it does cause the median rent to go up.<br /><br />As a simple way of seeing this, just imagine that the newly-available apartments previously had rents of infinity, and when we build them, it goes down to some finite value. Clearly, this is an improvement. It increases the median rent only because these infinities were not included in the median calculation before.Sniffnoynoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-21661466750347494422017-05-22T22:21:24.623-04:002017-05-22T22:21:24.623-04:00A local supply/demand analysis is difficult in the...A local supply/demand analysis is difficult in the globalized economy. It's quite possible that increasing supply will attract more foreign buyers and lead to price increases. Look at Toronto, Canada for example.Peter18https://www.blogger.com/profile/04963723960286885635noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20447622386876393842017-05-22T12:44:27.745-04:002017-05-22T12:44:27.745-04:00It's truly bizarre to argue that new housing w...It's truly bizarre to argue that new housing will attract too many affluent people, who in turn will use their affluence to create too many low-skill jobs, benefiting low-skill workers so much that they'll be able to bid up low-end rents. Even if that made any sense (it doesn't) is that inherently bad?Adamhttps://www.blogger.com/profile/00848821084269314215noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-14379807866059297102017-05-22T08:27:03.305-04:002017-05-22T08:27:03.305-04:00>The second issue is that when people can no lo...>The second issue is that when people can no longer provide shelter for themselves, they will become desparate, and some of those people will engage in criminal activities...<br /><br />I agree with Noah and others about increasing the supply solving most of the problem, but I don't think the result of not doing so will result in the scenario you outline. I think the result will be more companies relocating to labor markets that aren't so expensive. The workers will follow. The blue collar folks in SF will continue commuting from Stockton, i.e. or they will leave as well.Doc at the Radar Stationnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-88227586555154506052017-05-22T03:26:59.702-04:002017-05-22T03:26:59.702-04:00Brandon seems to have the Hong Kong vs. Tokyo numb...Brandon seems to have the Hong Kong vs. Tokyo numbers off. The 23 wards have 9 million people in 239 sq. mi. while Hong Kong has 7.3 million people in 427 sq. mi.<br /><br />There may be denser _parts_ of Hong Kong than any of the parts of the 23 wards, but by the official land area numbers, the 23 wards are roughly twice as dense as Hong Kong (or SF, for that matter).<br /><br />David J. Littleboynoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82306050786966875812017-05-22T03:08:41.473-04:002017-05-22T03:08:41.473-04:00I live in Vancouver, BC. On a back-of-the-envelope...I live in Vancouver, BC. On a back-of-the-envelope calculation, in the past fifteen or twenty years Vancouver has built about six times as many housing units, per capita, as San Francisco. But we still have some of the world's highest housing prices, and an acute rental shortage.<br />We are an "open door" global city, and many international investors buy units as a store of value and leave them empty. The city is now trying to introduce a tax on vacant units. But just building is not enough to make housing affordable for local people on modest incomes.<br />Like the Bay Area, Vancouver is a magnet city and there are plenty of other cities in Canada where prices are modest and the housing market is in balance.PDnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-11460120328757533492017-05-22T02:01:59.186-04:002017-05-22T02:01:59.186-04:00I think NIMBYs may be best understood as an emotio...I think NIMBYs may be best understood as an emotional movement rather than a fully thought through intellectual school of thought. People intuitively understand what they don't like (undesirable neighbours) and generalise a bigger idea from that view. It's like satisficing or bounded rationality for your politics - I think as far as I need to, in order to defend my pre existing viewpoint. Thought experiments, fancy examples, economic theories are all just abstractions from the intuitive position I've already reached, and which I'm already heavily incentivised to keep unchanged. Will Derwenthttps://www.blogger.com/profile/02980210623587102182noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-17806336357389769082017-05-22T01:17:10.341-04:002017-05-22T01:17:10.341-04:00Jobs create demand to live here. San Francisco add...Jobs create demand to live here. San Francisco added 120,000 jobs from 2010 to 2014 and only 4,800 homes.<br /><br />It's about to get worse with Planning pushing through the Central SoMa Plan, which adds space for another 50,000 jobs through 2040 but only 7,500 homes. You did a good job debunking the NIMBY logic in this piece — next, how about calling out Planning's rationalizations for why those numbers are okay?<br /><br />As a rule of thumb, 1 gross square foot of office requires 6 gsf of residential space to house the workers. That means 6 times the building mass and 6 times the pissed-off NIMBYs. So our business community and our singularly jobs-focused Planning Department take the path of least resistance and don't plan seriously for the housing component. We need to hold them accountable as well. They shouldn't be making planning "compromises" that include abundant office space but skimp on the associated housing need.scott fhttps://twitter.com/grauenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-69577975552713547032017-05-21T22:16:05.770-04:002017-05-21T22:16:05.770-04:00Yes, please let more Americans live in the Bay are...Yes, please let more Americans live in the Bay area or California generally. The weather is amazing. There are mountains, oceans, and deserts all within driving distance. But mostly the weather. The winters on the east coast (above the sun belt) are awful. Stuartnoreply@blogger.com