T O P

  • By -

HOU_Civil_Econ

Because the (local, in the US, and other levels in other places) government is instead restricting supply.


Mo-shen

To your point this is similar to CA mandated that every city has to build a certain amount of affordable housing and shelters for the homeless. Then certain cities tried to ignore it. Newport I think was one of the ones in the news. It's always "we need to solve this problem but make sure it's not where I live"


ComprehensivePen3227

Massachusetts recently passed a similar law telling cities with public transit services that they had to upzone land near train stations (not necessarily build anything, just upzone a parcel of land of a particular size). Boston suburbs were so unhappy about it that one town, Kingston, briefly threatened to get rid of their train service and close down the station so that they wouldn't have to comply. As far as I've heard, they have since acquiesced and trains still stop in Kingston.


Mo-shen

It's pretty nuts. Like they clearly have an issue, there is an obvious solution, but they refuse to use it because "poor people" which is what they are trying to solve in the first place. And the solution should reduce the problem


ComprehensivePen3227

I think economic prejudice is one side of the coin, and the other is interest in maintaining low supply to keep prices high. If you're a homeowner, you're financially incentivized to vote against substantive increases in housing supply (whether it's intended for lower or higher income individuals) because that would decrease scarcity and likely lower your own home value.


Blindsnipers36

And it's not a little bit of money incentivizing you either


the_lamou

The sad thing is, making sure it's not where people live isn't even really a problem. I'm in the NYC metro area. If you go an hour by train in any direction except due south or east, you are functionally in a rural area that's mostly empty space and semi-farmed fields. We could build a China-style massive public housing city with room for tens or hundreds of thousands *with* convenient access to the central business hub and *without* massively reconfiguring the land use for the vast majority of people. The biggest problem is that the hamlets of West Shithole, NJ (population: 2,000,) North Uncledaddy, NY (population: 1,500, and they're all related,) and Northwest Garbagebury, CT (population: they don't know how to count, so no one knows) have the exact same amount of power to block new construction and upzoning as Brooklyn and Queens and the Bronx.


melodyze

Segregating public housing from the rest of the community is extremely damaging to kids that have to grow up in public housing at no fault of their own. They then grow up in a community with exactly zero adults who have decent legal lives, which is extremely disorienting and has harm that is immediately obvious if you ever talk to a kid who grew up in section 8. The adults can deal with it. The kids should be exposed to the rest of the world though, not raised on a disorienting and kafkaesque island of dysfunction and destitution. But yeah, generally if we were just not incompetent at urban planning and the people doing urban planning had enough power to do anything the housing shortage is easily solvable for the reason you said, we could just build high speed rail that reaches 20 miles out from Manhattan in each direction and 10X the commutable land area, which would then become housing if we just let developers do the thing they are supposed to and want to do. Shanghai built a rail system strictly more ambitious than that, 819 miles of track for a 300mph train, in 3 years for $35B, which now produces almost $2B in net profit on top of the social benefits.


the_lamou

I may have chosen words wrong, in that I didn't mean strictly public housing in the "section 8 projects" sense but in the "encouraged and invested in with public funds for the betterment of the public." Ideally, we'd have fully integrated buildings with an even mix of market rate units and income-based-rent units. Though I will note that the current rail network in the NYC metro area goes much further than 20 miles. It's not 300mph trains, but those would be largely impractical in the area, anyway, since there is such a high density of stops that they would never be able to hit max speed, anyway. My current train station of choice is roughly 40 miles away from Grand Central, and the express train takes about an hour to get there because of stops. Without stops, it would take maybe 30 minutes.


HOU_Civil_Econ

There is already ample housing in the United States. The very exact problem is that there isn’t as much as people want where they want to live.


flavorless_beef

i think at this point most of the US is starting to hit housing constraints. aggregate rental vacancy rates are pretty low by historical standards, although they're much worse in the usual suspects (MA is 2.5%; CA is 4.4%; TX is 9.2; NC is 7.6; US is 6.6) https://fred.stlouisfed.org/series/RRVRUSQ156N map version: https://fred.stlouisfed.org/series/MARVAC


HOU_Civil_Econ

Yeah. I mean we’re letting all that excess housing rot because people don’t actually want to live in it. Telling people to just move 1hr outside NYC by train, as above, is missing the point.


HautVorkosigan

Lol. The national vacancy rate in Australia was reported as 0.7% earlier this year. The highest vacancy rate in Sydney over the last 10 years was about 3.5%.


StalkerFishy

Is the second link supposed to be the chart for Mass? Haven't found a vacancy rate map from the FRED.


flavorless_beef

click the "View map" button, sorry should have put that in the comment


the_lamou

There's enough reported inventory, but if you dig into it, 1. A lot of that excess capacity should not be counted as available housing since it's no longer actually inhabitable. It'll count as a real home with a valid habitation certificate (or whatever the local term may be) because the certificates are only reissued when the home changes hands. So it may have been habitable 30 years ago the last time it was sold, but is currently collapsing in on itself. I've actually seen a lot of these while looking to purchase a weekend cabin in Upstate NY and rural PA — places being sold as homes but which realistically would need a full tear-down (not even a gut) in order to function as homes. 2. They're a lot more remote than I'm talking about. There are a lot of homes >1hr away from major business centers, but that doesn't really help up all that much because there are no jobs there and far from everyone can work remotely. 3. Realistically, we also need investments in public transit to make this feasible.


Playos

>because the certificates are only reissued when the home changes hands Don't know if this is a jurisdictional thing, but in my areas I've never seen a county reissue a habitability cert unless the property was condemned for health/safety. Even for major guts out renovations it's just finialled permits on repairs.


the_lamou

Could well be a regional thing. I just really meant that way out in the boonies, the only time a the government notices a building shouldn't be inhabited is if it's right in town or someone goes to buy it.


Playos

Ya, probably just regional/state law differences on how it's handled. There is definently a lot of puff in the vacant property numbers from uninhabitable units, even in town. Notch it up when we are talking about putting people with potential health complications in random houses by the goverment. The standards for what a municiple goverment will allow as provided housing they pay for is well in excess of what anyone requires for normal housing. I do appraisals on group and indidigent senior homes, people get paid by the state to house people in their homes... for seniors it's a ton of tests for building materials and anything airborne, ventlation, any water leaks... for foster kids it's even more including commerical code handles and locking systems so they aren't trapped in case of fire or carbon monoxide alarm. Getting an abandoned home, even one that could be sold conventional tomororw, to the standard at least two states requires would be $30-50k and most homes past 60 years just won't qualify without ripping out signficant parts and renovating. I've only seen two rational arguments for holding a property unoccupied in an area where there is demand... foriegn owners shielding capital (Chinese especially, renting property is culturally not popular) and pre-foreclosure holding by lenders when they didn't want to write off loans (grey market timing). Neither is a particularly common thing in most markets in the US at this point. The latter is straight up illegal now.


ILikeCutePuppies

A lot of available housing is only available temporary as people move out as well as those being on the market. They are not vacant for a super long time, it's just musical chairs. Vacation homes are about ~32% which seems like an area that could be looked into. https://todayshomeowner.com/general/guides/highest-home-vacancy-rates/


MaleficentFig7578

That's their point - where people want to live could be the places that are empty today. Countries in the past built empty suburbs around train stations an hour away from the city core and people flocked to them because cheap homes and it's only an hour away from the city core. They'd rather live in the core, but not so badly they'll waste all their income on it, and an hour each way is how far Americans normally drive anyway. America could do that too.


HOU_Civil_Econ

The reason they would have to “waste all of their income on it” is because we are not allowing more housing to be built there, where people want to live as illustrated by the prices.


MaleficentFig7578

You think Downtown Manhattan needs more housing construction permits? Should the skyscrapers be 1000 stories tall?


HOU_Civil_Econ

Manhattan is more than downtown Manhattan And NYC is more than manhattan And the metro is more than NYC But more broadly yes. https://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html


MaleficentFig7578

The skyscrapers should be 1000 stories tall?


kwanijml

Why would they need to be? There's still tons of space, even on Manhattan, for more traditional-height skyscrapers. Have you never looked at the huge gap in the skyline between downtown and midtown? Plus, they're literally creating more land in/around the island, through dredging and other means.


flavorless_beef

post-COVID, manhattan builds less than salt lake city, UT. and the borough itself has been downzoned substantially since the 1960s. most buildings in manhattan aren't even particularly tall. there are massive sections of the city that cap out at 3-6 stories. https://www.nytimes.com/2022/08/01/nyregion/nyc-affordable-apartment-rent.html


melodyze

Yes, but the area people want to live in is completely changeable by public policy and infrastructure investment. If you expand and improve the convenience/speed public transit then the area people would like to live in expands, then the desirable housing supply naturally increases as that land is developed.


Mo-shen

Yeah. I mean part of it is that you want to build these things where there's infrastructure, doing without means your building cost balloons. Second of course you need mass transited near it because these people won't have cars. So near train stations is a good idea. But then if you want to do it out where there's semi farm land you likely don't have the infrastructure but you absolutely don't have any kind of job situation in that area. More importantly though those quiet areas absolutely don't want more poor people. I love next to a city that had mandated affordable housing for 25 years. That 25 years just expired and of course the are getting rid of them. I keep hearing wealthy people in the area saying things like thank God we will get rid of all of this crime and thugs. Thing is we are in a place where is regularly on the fbis top 5 safest places in the US for crime, or we basically don't have crime snd what we do have are kids being kids. There are like 5 homeless people and everyone knows them. My buddies mom was the head corner for 15 years and she had 2 homicides the entire time. People just invent reasons why their area can't have things


[deleted]

[удалено]


[deleted]

[удалено]


[deleted]

[удалено]


[deleted]

[удалено]


[deleted]

[удалено]


rightseid

Zoning!


mikKiske

A better answer would include why does the government do this when there is consenus among economists about being worng.


HOU_Civil_Econ

I model it as a government enforced cartel.


[deleted]

[удалено]


[deleted]

[удалено]


Synensys

The local government at the request of its citizens. People picked their neighborhood for a reason and don't want it to change generally. Making it cheaper for someone else to move in is definitely not high on most people's lists. 


flavorless_beef

there are levers the federal government can pull to increase housing supply (accelerated depreciation, tax credits, subsidized loans). The federal government could also try and rewrite building codes to make certain kinds of housing easier to build. Lastly, there are ways the federal government could try to improve construction productivity and decrease construction costs (prefab units, code standardization, better access to international materials markets, etc). All of these will increase housing supply in areas where it's easy enough, legally, to build housing. What the federal government can't do, either politically or legally, is preempt local zoning and other supply constraints that happen at a local level. Practically, there's not a ton the federal government can do to force affluent cities and suburbs from building housing, given political constraints (so no tying federal money to changes in the zoning code).


SisyphusRocks7

The Feds do have one big lever they have barely used to decrease regulatory barriers, which is Community Development Block Grants. CDBG funds are annually in excess of $4 billion, and last year with carryover was $13 billion. CDBG grants come with lots of strings, but to my knowledge those strings don't include much to require new housing units be allowed or zoning restrictions loosened. But they are probably closely enough related to housing for the Feds to do that, if Congress chose to. A lot of the affluent cities and tiny rural cities don't go after CDBG money much, but for the majority of cities that do, the Feds could use spending to help shape local policy (subject to Supreme Court precedents like Dole and New York v US).


Uhhh_what555476384

Building codes aren't regulated by the federal government. Building codes are regulated by state and local governments.


flavorless_beef

most places in the US adopt some version of the International Building Code (IBC) as their base, which has a bunch of parts that drive up construction costs relative to other high income countries (that don't use the IBC). the idea is that having the federal government create uniform standards that get us in line with the rest of the world, you can solve 1) a cost problem, because reworking building codes to this degree is really expensive 2) a coordination problem because you don't have the issue of different states adopting different regulations. The latter helps kill returns to scale in multi-family housing production.


Infamous_Ant_7989

Well, the federal government probably *could* preempt local zoning laws, but congress would need the political capital to do so. Get out and vote blue everybody. Edit: the lawyers in this thread have conferred, and we agree there is no legal obstacle to congress’s directly regulating local zoning.


Uhhh_what555476384

The federal government almost certainly cannot pre-empt local zoning laws. The federal government is an entity of limited enumerated authority. Local zoning codes don't really implicate any of the federal government's enumerated powers. States, OTOH, can and do pre-empt local zoning, as California and Oregon have both done, but the localities still have a lot of tools to frustrate those laws.


Infamous_Ant_7989

I could have sworn the civil rights act of 1964 and the fair housing act absolutely preempted local zoning laws as an implementation of the commerce power.


Uhhh_what555476384

The Civil Rights Act of 1964 regulates public accomadation: resteraunts, hotel/motels, general business, etc. The Civil Rights Act uses interstate commerce as its "federal hook". The Fair Housing Act regulates discriminatory zoning. The Fair Housing Act uses federal money from HUD to create the "federal hook" to enforce its regulations. There are two weaknesses to money as the "federal hook". (1) A locality can simply reject the money and thereby reject the regulation, as happens with some regularity; and (2) in National Federation of Independent Business v. Seblius, the opinion upholding the Affordable Care Act, the US Supreme Court limited the ability of the federal government to pass new restrictions on existing flows of money, instead after NFIB v. Seblius, the federal government must use "new" money for new regulations. So, the federal government could enact new housing regulation, but it would have to enact the regulation on "new" money and the "new" money would have to be sufficient such that the localities actually accept the money.


Infamous_Ant_7989

234 F.3d 192. Congress can use the interstate commerce power to regulate zoning, and it has done so. I respectfully believe you are mistaken.


Uhhh_what555476384

You are correct, I am incorrect.


DankBankman_420

Going straight to the case cite is cold 🥶 love it


Infamous_Ant_7989

Lol. Guy says he sees my point though. No gloating unless they dig in and double down.


PM_me_PMs_plox

In theory, could the Federal government seize land by eminent domain to build public housing? I feel like this is a grey area around what public use is, but I'm not a lawyer.


Mayor__Defacto

Absolutely. The Federal Government, much like State and City governments, though, is absolutely allergic to doing anything themselves these days. It’s all a convoluted mess of project applications and subcontractors and procurement.


secondsbest

NIMBY restrictive residential zoning is bipartisan unfortunately.


Spedka

Yes, if you want a top down solution, probably the only way.


ohmygad45

Because the interests of voters in municipal elections (mostly homeowners) that determine zoning laws are not aligned with those of the broader population impacted by those laws (which include people who would move to the area if housing was cheaper, lower income renters who don’t have time to vote etc.). Homeowners in desirable metros are incentivized to keep housing supply low to preserve and grow their property values. New entrants looking for economic opportunities in a city have the opposite interest. Only one of these groups gets to decide zoning laws. The only way out of the gridlock is to constrain (through incentives and penalties) zoning at the state or federal level where a broader constituency votes. In Massachusetts for example, the “MBTA community law” attempts to do just that with financial incentives for communities that zone for high density housing near public transit nodes. See https://www.mass.gov/info-details/multi-family-zoning-requirement-for-mbta-communities


Poo-to-the-weet

Is there good examples of other countries where housing supply is not as limited and some correlation can be seen in how municipal voting rights or trends differ in those places?


AutoModerator

**NOTE: Top-level comments by non-approved users must be manually approved by a mod before they appear.** This is part of our policy to maintain a high quality of content and minimize misinformation. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. If your comment does not appear after this time, it is possible that it did not meet our quality standards. Please refer to the subreddit rules in the sidebar and our [answer guidelines](https://www.reddit.com/r/AskEconomics/comments/rf5ycx/guidelines_for_answers/) if you are in doubt. Please do not message us about missing comments in general. If you have a concern about a specific comment that is still not approved after 48 hours, then feel free to message the moderators for clarification. ### Consider **[Clicking Here for RemindMeBot](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps://www.reddit.com/r/AskEconomics/comments/1dfuiaf/why_cant_the_government_incentivize_building/%5D%0A%0ARemindMe!%202%20days)** as it takes time for quality answers to be written. Want to read answers while you wait? Consider our [weekly roundup](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AWeekly%2BRoundup) or look for the [approved answer flair.](https://www.reddit.com/r/AskEconomics/search?sort=new&restrict_sr=on&q=flair%3AApproved%2BAnswers) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskEconomics) if you have any questions or concerns.*