mindstalk: (Default)
A longish article on cities (or a country) that have built their way to affordable housing, contrary to the claims of many market-allergic leftists.

http://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-affordable-housing/

Money-quote paragraph:

"Houston, for example, can be Cascadia’s model for how easy it ought to be to get permits to build homes—if we believed, as Houston does, that building homes is in itself a good thing, our permitting processes would encourage rather than discourage it through endless months of hoop-jumping and politicized reviews. Tokyo, meanwhile, reminds us that placing control over development at senior levels of government, and making development of urban property a right of its owner, helps to elevate the broad public interest in abundant housing choices over parochial opposition to change. (Leaders in California have recently succeeded in passing a raft of new laws to act upon this lesson.) Chicago teaches that a pro-housing political orientation can provide abundant housing even under conventional zoning in a deep blue city, while Montreal offers Cascadia a model of a cityscape no longer of single-family homes but of three-story rowhouses, walk-up apartments, and condominiums on quiet, tree-lined streets close to transit and neighborhood centers. Singapore’s lesson is the promise of erecting high-density, park-like “new towns” on underused city land. And Germany shows us that a future is possible where housing is no longer an investment vehicle but “a very durable consumption good that provides a stream of housing services, not a ticket to financial gain.”"


Relatedly, Vienna and Singapore as two examples of massive public housing: https://www.shareable.net/blog/public-housing-works-lessons-from-vienna-and-singapore
Also useful if anyone tries to tout Singapore as a free-market miracle...

links

2017-Jul-23, Sunday 10:43
mindstalk: (Default)
why planes need bathroom ashtrays. if someone lights up anyway, they still need to stub it out.
http://www.telegraph.co.uk/travel/travel-truths/why-do-planes-still-have-ashtrays-/

Hadith revision https://www.theatlantic.com/international/archive/2017/06/islam-manuscript-discovery-istanbul/531699/

military equipment makes cops more violent https://boingboing.net/2017/07/01/cops-are-civilians.html

Captain Kirk avoiding fights https://forum.rpg.net/showthread.php?806084-Star-Trek-What-do-Command-officers-actually-do&p=21209328#post21209328

Japan's housing creativity. Houses depreciate rapidly even though they're better made than before, and have little resale value; the flip side is freedom to build your house as you please, without worrying about property values. http://www.archdaily.com/450212/why-japan-is-crazy-about-housing

A full employment plan: http://democracyjournal.org/magazine/44/youre-hired/

Oslo working on banning cars in the center: https://www.weforum.org/agenda/2017/06/this-city-found-a-clever-way-to-get-rid-of-cars-and-it-isn-t-a-ban-09e6e018-84d0-4814-9f0e-37085eaa9218/

Andrew Jackson, Trump, and the Borderers. https://www.theatlantic.com/politics/archive/2016/04/trump-and-the-borderers/477084/

If the media covered alcohol like other drugs: https://www.vox.com/2015/6/15/8774233/alcohol-dangerous
mindstalk: (Default)
In which I argue that the lack of affordable housing indicates something horribly wrong, and not with capitalism as such.

Have you heard of Walmart? Of course you have. What are they known for? Providing lots and lots of cheap shit. Also for bullying local governments and squeezing suppliers, but that's not the point here, which is: cheap shit. They have nicer competitors: Target, Kmart, Dollar Stores.

Plane seats are jammed and humiliating but also cheaper than they ever have been, modulo gas prices.

You can spend thousands of dollars on a fancy bicycle, or less than $100 on a cheap one.

Stores are full of cheap, if sometimes unhealthy, food.

You can spend under $13,000, or maybe $12,000 on a new car, or over $100,000 on a luxury sports car.

Many of us wear cheap clothes, "from Third World sweatshops"; others spend $thousands on elite designer clothing.

You can get a watch for $15, or $1500. They'll tell time about the same.

Our economy is full of selling cheap stuff to the masses and expensive stuff to the rich, and various things in between, (sometimes including selling cheap stuff for higher prices, if you can pull off price discrimination.) Because that's how you make the most profit, not by only making luxury stuff.

But in housing, particularly in some markets, it's said that developers are only building luxury housing. If true, why would that be? Why would housing be unlike every other part of the economy?

"Everyone needs housing, so they can extort you." Nope, that won't fly. Everyone needs food and clothing, and in the US lots of people need cars.

"They're just chasing profit." But the point of my examples is that there's tons of profit in non-luxury goods and services. Walmart is *huge*, with its founder's children inheriting $20 billion each of accumulated profit.

And in fact, if you look around the world, you do see cheap(er) housing options. Mobile and manufactured homes for the individual, pre-fab housing for soulless but cheap developer tracts, microapartments that cut living space to 100 square feet, SRO hotels that go further by making you share bathroom and kitchen (if any), granny apartments. In cheap land markets (prefab housing in surbuban developments) and expensive ones (microapartments in Tokyo and Hong Kong.)

But not in Boston, or San Francisco. Why not? Is there something about those places that makes developers spontaneously ignore non-luxury demand? Or is something, like zoning laws and permitting processes, preventing them from doing so?

If you know me, you probably know my answer: the latter. But if you don't like that answer, what's your alternative? Why don't we see Walmarts, Spirit Airlines, $15 watches, and $13,000 cars of modern urban housing?
mindstalk: (atheist)
Last week I went to a reading group for the mis-titled book Communism For Kids, as the book had sounded interesting. I hadn't gotten around to getting or reading it, so naturally I kept quiet most of the time. Plus, even as I heard things I privately objected to, I was the self-described token liberal in a dozen+ socialist/communist/anarchist sympathizers, and the night wasn't about me or my thoughts.

This blog is about me and my thoughts, though! So I'll vent some responses I didn't make then.

First, a meta-note: arguing with socialists has increasingly seemed like arguing with libertarians, in that the perceptions of history and the current world, and the definitions of key terms, differ so widely as to make useful discussion difficult at best.

Also, I've seen a lot of these points in past online discussion too, so I'm kind of responding to a melange of my experiences.


"social democracy has failed": this got stated like an absolute, and accepted by everyone. Like, really? What's the criterion for failure? The richest, freest, and largely most equal countries are all social democracies, broadly speaking. People risk their lives to flee to those countries. They're not perfect: unemployment is often high, immigrant integration often lacking. But they're pretty good, and social democratic policies generally work; a lot of the flaws could be described as not trying hard enough.

Those policies are under attack, and inequality has been increasing again in many countries. One could say it's "failed" in failing to totally resist such attacks. But here, let me list the social systems which have proven their ability to last a long time on a large scale while resisting inequality:
begin list
end list
And if social democracy creeps toward economic inequality again, every attempt so far at large scale socialism has positively raced toward authoritarianism, censorship, and purges.


"capitalism can't solve global warming": Question, is the EPA 'capitalist'? Hear me out: these people were also saying capitalism is a total system, that states created or were taken over by capitalism, that it's pervasively disruptive and corrupting. So, the EPA isn't a corporation or something, but it is an arm of the government of the USA, paragon of capitalism. It has *also* addressed many environmental problems, like cleaning up air and water and protecting endangered species. Under Obama it tried to regulate carbon emissions, and but for some tens of thousands of votes, it would be doing so under Hillary. Capitalist countries agreed to limit CFCs to protect the ozone layer, and are mostly inching toward addressing global warming -- the Paris accord was agreed to by almost every country, almost all of which are capitalist. A strong global state of any variety would be able to tackle global warming far more directly, without the handicap of a disorganized anarchy of countries going "but if we cut back, what if India or the US just pollute more?"

I agree that laissez faire capitalism can't solve global warming. But does 'capitalism' mean that, or does it mean real existing capitalism, with regulators and welfare states and democracy? The usage seemed... fluid.

(Which is something I've seen among libertarians, too: capitalism is either the natural way for things to be such that almost everything is capitalist, or a pure ideal snowflake that evaporates at the first hint of tax, depending on whether they're assigning credit or blame.)


"Markets don't arise, they're created by governments to fund war.": Nnnng. Yes, governments can create markets, or make them work better. Yes, governments had a role in creating or expediting the modern capitalist world, including things like enclosures. But... so what? I infer implications that governments created capitalism out of whole cloth, or that the origin taints capitalism for good.

Whereas I'd say markets often *do* arise spontaneously, in the absence or even opposition of governments; we call the latter "black markets". Often, a medieval government creating a market was about banning/trade market activity elsewhere, concentrating it in one place to it could be taxed. Markets and trade tend to make most things more efficient; centuries ago, the main government expense was waging war, so yes, prudent governments would advance markets and what became capitalism, to wage war, so they could pay for mercenaries or full time soldiers rather than depending on short-term levies.

But you know what? If a government had been using labor levies for education or health care, "you must spend one month a year teaching children", it would have found raising monetary taxes, and paying for full time professionals, to be just as much an improvement for those things as it was for warfare.


"capitalism arose through trade, like with Asia": Begging the question of why this trade didn't cause capitalism in China, the other half of the trade equation... There's a whole murky area of how one even defines capitalism, which would depend on exact quotations to argue about rigorously. I'd just say that markets, contracts, money, and wage labor go back thousands of years, and that early medieval Europe was rather a low point in financialization. Modern capitalism is an intensification of things that have been around for a long time, fueled as much by changes in agriculture (fewer people on the farm) as anything else. You can argue that the change in degree amounts to a change of kind, but it didn't spring into the world out of nothing in 1700.


"Native American societies were communal": North American societies, with small populations, could be described as that. Aztec society had money, merchants, markets, and long distance trade, like any urbanized Eurasian society.


"co-ops can't work in capitalism": I can't believe no one objected with the various co-ops that do exist, including the giant Mondragon group in Spain. The book apparently gave some theoretical example of a co-op in a market society having to lay off workers anyway, and "laying off the thinkers"; in my limited understanding, real co-ops are more likely to cut back on wages and try to keep everyone employed. (In the Great Recession, the capitalist and social democratic government of Germany took similar measures, subsidizing employment to minimize layoffs.) Transparency and democracy make such things more amenable than wage cuts from an employer would be.


Another thing didn't explicitly come up that night, but I've seen elsewhere, is an idea that capitalism is the root of most modern evil, including racism and sexism, that the struggle is between Capital and the Proletariat. But for some major policies I care about, that's not true.

* A useful tool to address global warming is a carbon tax. Capital might object to that, but capital has had to knuckle under to other environmental laws, such as sulfate cap and trade, so capital can clearly lose this kind of fight. And in theory, businesses shouldn't actually care much as long as they're not disadvantaged relative to competitors (so a world state with no foreign trade would have a policy advantage.) But... most US voters are drivers, with no enthusiasm for seeing their gas (or utility) prices go up, and I see that as a far deeper obstacle to good environmental policy. And even some leftists object with "it's regressive", or, I feel, a general suspicion of anything that sounds market-like.

* Top economic issues for the average person are "can I get a job?" and "can I afford housing near my job?" Capital's allergy to Keynesianism is a problem for the first, but on the second, capital is on my side. Unregulated capital, aka "developers", would *love* to provide housing! Possibly substandard firetrap housing that'll kill you in ten years, but it'd put a roof over your head today. And in great quantity: subdividing houses and apartments, building tall buildings, packing 8 people into a house, turning gardens into housing. Why don't they? Because local government makes it illegal to do so, through building codes and zoning laws, backed up by existing homeowners, most of whom are simply better paid members of the proletariat. (Also backed up sometimes by anti-gentrification activists.)

I'm all for genuine safety codes, and such inspections are an example of a way in which governments can 'make' markets: if I can trust that rental housing is safe, I'm more likely to choose it rather than be forced into it. But I'm told that in Somerville, a legal bedroom has to have a closet. Why? That's neither a safety feature, nor one which can be hidden from a prospective tenant. Why can't I choose to pay less for a room that happens to lack a closet? And lots of zoning laws outright restrict housing: single-family zoning, height limitations, minimum space requirements, parking requirements, caps on the number of unrelated people living together... none of that is capitalism's fault, but it's the basic cause of the housing crisis in many cities.

Of course, when I've tried to make that argument, I've been dismissed with "supply and demand doesn't apply to housing". Speaking of giant gaps in understanding that impede communication...
mindstalk: (Default)
2011 link: http://www.nakedcapitalism.com/2011/06/how-germany-achieved-stable-and-affordable-housing.html

Germany has a rental dominated housing market, with stable prices. Features:

* constitution protects right-to-build: if there's not an explicit rule against, you can build, no need for permission.
* local gov't gets grants based on # of inhabitants, so they have an incentive to encourage development.
* strong tenant protections, including what sounds like rent control, constrained rent increases. Between that and the majority doing it, renting is seen as a first-class choice.
* tight mortgage financing.

Article contrasts with the UK, with lots of fiddling restriction on building, deregulate and landlord-favoring market so renting is second-class choice, easy mortgage credit. Tight supply, easy credit, propensity to panic buying. So basically a factory for making market bubbles.
mindstalk: (thoughtful)
So there are various ways government policy could try to make housing cheaper, but one that I see a lot of people pushing now is a form of inclusionary zoning. Specifically, especially from what I've been told by Cambridge/Somerville politicos, requiring that a percentage (10-30%) of new units (of large developments) be rentable at low price. Not because they're smaller or more cheaply built, but just at a lower price. As Wikipedia says, "Many jurisdictions require that inclusionary housing units be indistinguishable from market-rate units"

(I don't know how that applies to a building that was planned to have diverse housing anyway. I suppose a percentage of each housing class?)

Developers[1] push back on this, and I've seen it described as a tax on them. Is that a fair description? Time for a simple thought experiment: imagine a building of 100 units, planned price of $1000/month, total revenue of $100,000/month. Then the city passes a new law during construction, requiring 30% be offered at $800. That's 30 units getting a $200 discount, $6000/month, which yes, you can think of as taxing the developer 6% and giving that back to the lucky tenants.

6%, not of profit, but of gross revenue. That's a lot! If the developer was anticipating profit of 5%, it is no longer worth building. Even if they anticipated 8%, that's now 2%; you might as well quit and invest in 30 year federal bonds. Or build hotels or condos that won't be hit by IZ, or just go build somewhere else.

And it can be worse. 30% requirement is high, but 20% subsidy might be low; 15% at $500/month would mean $7500, or a tax of 7.5%.

What's the alternative? Say the city instead decided to attach an explicit public subsidy to some of the new units. The $6000/month, $72,000/year cost would be spread among the whole population and tax base, not one developer. For a 77,000 person city like Somerville, that's under $1/person.

That's not quite fair though: that's just one development, and IZ applies to all of them, so we should look at that. Then again, there aren't many big developments in Somerville, which has "ambitious" plans to barely keep up with population growth at about 1% a year, and historically has done far less than that (3% total over some 20-30 year period I now forget, when Boston and MA did 12% and the country grew 24%). If we're adding units at 1% a year, and 30% of those are subsidized, then the subsidy of a new unit is spread over 300 existing ones. At a simplifying assumption of one person per unit, $2400/year ($200*12) is spread over 300 people, so $8/year.

(Most of what I've heard about recently is about a proposed 500 unit development in Union Square; assuming Somerville's 77,000 people live in 30,000 units, that's over 1% right there. But it'll take a few years.)

Of course, this is supposed to apply to all new housing, so after 30 years the subsidy support will have climbed to $240/year. This is pretty significant, especially compared to municipal taxes and revenue; probably talking about raising those up to 10% of existing levels. Also, affordable (or subsidized) units will be almost 10% of the housing stock.

But then someone might reasonably say "why should we dick around with only subsidizing new units? Why not just go ahead and subsidize 10% of all units, right now? The math's the same." And all the economists nod in agreement, and all the politicians blanch in terror...

Personal conclusion: yes, it is a tax on developers, and as with unfunded mandates[2] in general, it's an unfair tax, pushing a requirement onto a small subset of society, instead of funding it honestly out of general taxes and expenditure.

Of course, I feel that we shouldn't be trying to subsidize our way to cheap housing, which won't even address the real problem of more people wanting to live in cities now; we should enable building *more housing*, by removing the massive artificial restrictions on urban supply imposed by local governments. But that's another topic.

[1] 'Developer' has gotten a bad rep somehow; what if we called them builders, instead? It's not even a euphemism, more like an anti-euphemism: they are literally building new buildings and housing. Especially for the projects that get hit by IZ; you could argue that converting a house into apartments isn't real building (though it is real construction work, and more 'real' than hedge fund finance, say), but IZ applies to big projects, which are mostly new buildings.

But then it sounds worse: what kind of asshole opposes building new housing? (People who already have housing and don't want more neighbors, that's who.) Much easier to intone against "developers" and "profit" (as if homeowners don't hope to profit from growth in their home values, not to mention from their jobs.)

[2] Also see EMTALA, requiring ERs to stabilize anyone regardless of ability to pay; it's great that they do that, not so great that government didn't both reliably compensating them for it, so the costs were driven into other medical prices. Or landowners sometimes winning the anti-lottery of discovering there's an endangered species on their land and now they can't use it; protecting the environment is cool, but it would be fairer to compensate people for unexpected loss. And yes, strictly speaking minimum wage is an unfunded mandate on employers, and a price floor on labor, both nominally bad ideas, though that issue gets complicated by data and macroeconomics.

Abstract housing

2016-Oct-13, Thursday 15:16
mindstalk: (Default)
I was thinking about supply/demand curves and housing again. A standard picture: imagine a demand curve sloping down (-45 degree line, maybe), and a vertical line on the left, reflect legally capped housing. Equilibrium is low quantity, high price. Now, imagine that there's a small loosening -- Somerville allows another 5000 units on top of the existing 70,000 people, say; the vertical line moves right a bit, the equilibrium quantity increases, and price decreases -- but is still pretty high compared to a hypothetical 45 degree supply line.

I've seen a lot of people claim that housing somehow isn't affected by supply and demand, that developers only build luxury housing, but if you can follow my mental picture, you see that's what we'd expect from only small increases. Worse, if demand is itself increasing -- the demand curve moving to the right -- then price can increase anyway. It'd increase even more if the supply line hadn't shifted right.

But there's a complication. Such graphs are ideally about some identical commodity, which housing is not: it varies in size, price, location, amenities. But, I think we can think about not the price of units, but the price per square foot (or meter). A specific unit can be expensive because it costs a lot, or because it costs less but gives little space; both are expensive compared to renting a Rust Belt mansion for less than a Boston 1BR. Even more abstractly, there are other amenities: a tight (expensive) market will likely have year-to-year leases, deep deposits, and hostility to pets; a cheap one will be more month-month and loose about things.

That said, okay, increasing the supply slightly only decreases the price per area slightly. We could still expect big expensive and smaller cheaper units to be built; the claim is that that's not true. I don't know how true that is... but I do know that one end of the tradeoff curve, cheap apartments that are very small ("microapartments", "SRO") and have no parking space, is outright illegal to build in almost all the US. And a friend argued that simply building a 600 square foot box in Boston already puts you into "luxury" price ranges, that's just how expensive it is here. (I know that a couple of Back Bay parking spaces, probably consuming an area of about 660 square feet, sold for $600,000 -- that's not even an actual box, let alone a habitable one with plumbing and wiring.)

Meanwhile we do have current evidence that supply and demand works: some luxury markets have gotten saturated, with units not renting out, or being discounted, and Japanese housing prices haven't soared the way US ones have; it's much easier to build there.
mindstalk: (Earth)
Recent thought about equilibrium effects on housing:

If many people actually *prefer* denser areas, or the amenities that result from them, then shifting the supply curve right (by loosening zoning codes) leads to more housing and lower rates, but may be followed by the demand curve shifting right because the area is more desirable due to higher density, leading to more housing and higher rates. And then shifting again, until the demand curve stops shifting or you run into a steeper part of the supply curve (whether due to looser but still extant legal limits, or sheer physical capacity) so that price increases outweigh increased amenities in desirability. (Or you simply run out of ability to add people.)

So it's true that free market housing won't necessarily lower prices for good; OTOH, it does allow more people to live in a place they'd prefer, which is still good.
mindstalk: (thoughtful)
(simply copying a comment I made elsewhere:)

So, according to Google's convenient graph, Somerville's population was 76,295 in 1990, and 78,804 in 2013. That's 3% growth stretched over 23 years. Boston has grown 13% in the same period. Cambridge, 12%. Massachusetts, 12%. The US as a whole, 28%. If population increase had been distributed evenly, there should be over 97,000 people in Somerville now. Or 85,000, at only the state's level of growth.

In reality there's been migration to warmer (or cheaper) states; OTOH, there's also been migration back into dense cities, as many people who grew up in suburbs don't want to live there. Except hardly anyone's building dense cities anymore -- it's usually illegal[1] -- so the price of the old stuff gets bid up way high. 97,000 people wanting to live in the space of 78,000 people will explain a lot of the housing price increase even without bringing in tech or "have no kids"[2] money.

(And I think it's fair to use the higher number -- after all, Boston and Cambridge rents have been going up a lot too, indicating people want to move here faster than housing can be built for them.)

[1] A friend claimed that 99% of Somerville is non-conforming to the current zoning code. If the city burned down, it wouldn't allow itself to be rebuilt as it is.

[2] Or "have no car" money, what with relying on bikes and the Red Line.
mindstalk: (Default)
Do you want more people to able to afford to live here? Then we need more housing.
Who builds housing? Developers.
Therefore, developers are our friends and we should make their lives easier.

If you don't like the conclusion, then your avenues of attack are "someone besides developers builds housing" or "we don't actually want more housing."

Often people say developers just build high-rent housing. But if businesses are limited in how much they can do, naturally they'll go for the highest *profit* activity first, which apparently means high-rent housing. But it's not like developers are averse to building cheaper housing: the US is littered with cookie-cutter subdivisions whose properties may include many soul-sucking aesthetic flaws but also cheapness. Unfettered businesses will in general explore all the avenues of profit to them, not just the high ones.

But building in desirable cities is usually massively fettered, and not to the benefit of anyone at the low end. Parking requirements, minimum apartment size, height limits, setback requirements...

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