Urban Housing Prices

[Arkady]

In the NYT, Krugman discusses De Blasio's attempt to address the high cost of housing in New York City (in Manhattan, the average apartment costs $2 million these days):

http://www.nytimes.com/2016/04/04/o...est&contentPlacement=1&pgtype=collection&_r=0

One idea to fix it is similar to something I've discussed that we're doing in Massachusetts: providing a way around zoning rules for those who set aside affordable housing. So, for example, if zoning and permitting are ordinarily hostile to building new multi-family dwellings (as in Massachusetts), or building very high (New York), you provide a way for developers to get around that if they set aside a certain percentage of the units they're constructing for affordable rentals. What do people here think of that?

One issue I have with De Blasio's idea is that he has them set aside not only affordable property, but also senior property. I see no reason to have a special accommodation for seniors. If they qualify for affordable housing, fine, let them do so on the same basis as everyone else, but mere age shouldn't be a factor. Making age a factor has two problems. One, it could essentially act as a subsidy for wealthy older people who could afford housing anyway -- taking up units that are in demand by those who can't otherwise afford it. Second, it might mean more prime urban housing taken up by retirees, for whom there is the least utility in having them live so close to the economic action. Cities are the dynamo of the economy, and using up that in-demand land for people who won't be working doesn't make as much sense. If anything, it would make more sense to set some aside for young people, with the idea that they're the future movers and shakers in the workforce, so the city has long-term advantage in bringing them in, today, to be the interns and entry-level workers, to move up in the future.

 

[Drumcollie]

Here is a good idea...Don't Try to let a democrat solve an adult problem...it never works.

What your suggesting ultimately is what the State of new York has done to increase Businesses to come to New York....tax benefits...the anti Bernie Sanders plan...but with every plan like this then democrat will turn around whilst it looks like a good deal ...wait the knife is coming while you back is turned.

Lets talk about what it's really about:

Sustainability: How do we keep our constituents in our districts when it so much more affordable where Republicans live.

Solution: racism, bigotry and any other lie to make people of color think they cannot live with Republicans...just like democrats used to do before equal housing.

Subsidies manifestation: If our constituents live in cheaper neighborhoods they might could stand on their own two feet and not need us or our govt subsidies. Thus not vote democratic.

Solution: racism, bigotry and any other lie to make people of color think they cannot live with Republicans...just like democrats used to do before equal housing.

Racial imbalance...The need for affordable housing would cause problems for Planned Parenthood. The more people of color move to Republican neighborhoods the less likely that Planned parenthood can reduce the population of people of color.

Solution: racism, bigotry and any other lie to make people of color think they cannot live with Republicans...just like democrats used to do before equal housing.

 

[as seen on tv]

so, to sum up:

"the rich and powerful" prevail on government to create zoning laws for the purposes of exclusivity and property protection. the result is high real estate prices, which only the rich and powerful can afford.

local government THEN gets tired of reaping high real estate taxes on those exclusive millionaire properties, and proposes to scrap the zoning laws in order to build previously forbidden, less desireable structures cheek by jowl with the swanky buildings which people paid top dollar for. On the presumption that their expensive property values would not be tanked by the sudden appearance of low income housing next door.

this seems like the kissing cousin of rent control - using laws to interfere with market based pricing of real estate. and possibly those formerly $2 million average manhattan apartments will have a steep price drop. amenities and doormen will be discontinued, and maintenance will be deferred, just like rent control properties.

does that about cover it?

 

[Arkady]

Here is a good idea...Don't Try to let a democrat solve an adult problem...it never works.

What your suggesting ultimately is what the State of new York has done to increase Businesses to come to New York....tax benefits...the anti Bernie Sanders plan...but with every plan like this then democrat will turn around whilst it looks like a good deal ...wait the knife is coming while you back is turned.

Lets talk about what it's really about:

Sustainability: How do we keep our constituents in our districts when it so much more affordable where Republicans live.

Solution: racism, bigotry and any other lie to make people of color think they cannot live with Republicans...just like democrats used to do before equal housing.

Subsidies manifestation: If our constituents live in cheaper neighborhoods they might could stand on their own two feet and not need us or our govt subsidies. Thus not vote democratic.

Solution: racism, bigotry and any other lie to make people of color think they cannot live with Republicans...just like democrats used to do before equal housing.

Racial imbalance...The need for affordable housing would cause problems for Planned Parenthood. The more people of color move to Republican neighborhoods the less likely that Planned parenthood can reduce the population of people of color.

Solution: racism, bigotry and any other lie to make people of color think they cannot live with Republicans...just like democrats used to do before equal housing.

The problem is pretty simple from a supply and demand perspective. People want to live in liberal areas, like San Francisco, Manhattan, Boston, etc. They don't won't to live in shitholes like Houston, Jackson, or rural Alabama. And so they bid up the prices of property in the desirable locations to very high levels. One possible way to bring down those prices would simply be to implement Republican-style policies. If you can crash wages, decimate culture, blight neighborhoods, destroy public schools, and otherwise make a place a nasty enough area to live in, people will stop being willing to pay much for the privilege, and housing prices will come down. But assuming you don't want to race the dysfunctional parts of America to the bottom, is there some other solution -- some way to tackle the high housing prices not through knee-capping the demand side of the equation, but rather through increasing supply? That's the problem that the grown-ups are working on.

 

[Arkady]

so, to sum up:

"the rich and powerful" prevail on government to create zoning laws for the purposes of exclusivity and property protection. the result is high real estate prices, which only the rich and powerful can afford.

local government THEN gets tired of reaping high real estate taxes on those exclusive millionaire properties, and proposes to scrap the zoning laws in order to build previously forbidden, less desireable structures cheek by jowl with the swanky buildings which people paid top dollar for. On the presumption that their expensive property values would not be tanked by the sudden appearance of low income housing next door.

this seems like the kissing cousin of rent control - using laws to interfere with market based pricing of real estate. and possibly those formerly $2 million average manhattan apartments will have a steep price drop. amenities and doormen will be discontinued, and maintenance will be deferred, just like rent control properties.

does that about cover it?

The general concept is what you've said -- that supply has been restricted by laws that mostly benefit the rich, and now politicians are working on building ways around those laws in order to increase supply, to bring prices back down. But, that needn't mean run-away decline. I know the Boston area has had affordable housing programs built on this kind of zoning-exception strategy for many years, and home values have remained excellent. And the benefit is that it tends to create mixed-income settlement patterns, which are what you need if you want to prevent slum formation and the social problems that come with it. You speak often about dropout rates and drug abuse, so I'd think you'd be interested in strategies that tend to disrupt the formation of cultures that have problems in those areas. Some such problems may be inherent in urbanization, but there are clearly vast gulfs between the most livable cities and the most dysfunctional ones, and one of the big differences is the extent to which slums have been formed.

 

[PhilFish]

The general concept is what you've said -- that supply has been restricted by laws that mostly benefit the rich, and now politicians are working on building ways around those laws in order to increase supply, to bring prices back down. But, that needn't mean run-away decline. I know the Boston area has had affordable housing programs built on this kind of zoning-exception strategy for many years, and home values have remained excellent. And the benefit is that it tends to create mixed-income settlement patterns, which are what you need if you want to prevent slum formation and the social problems that come with it. You speak often about dropout rates and drug abuse, so I'd think you'd be interested in strategies that tend to disrupt the formation of cultures that have problems in those areas. Some such problems may be inherent in urbanization, but there are clearly vast gulfs between the most livable cities and the most dysfunctional ones, and one of the big differences is the extent to which slums have been formed.

what is it that invites the label 'slum'? in the general sense, lower income persons move in to areas, and eventually the term slum is applied. what is the cause?

i think even low income earners can maintain a home, it's exterior, etc.. so what drives their formation?

 

[Arkady]

what is it that invites the label 'slum'? in the general sense, lower income persons move in to areas, and eventually the term slum is applied. what is the cause?

i think even low income earners can maintain a home, it's exterior, etc.. so what drives their formation?

As a practical matter, when you get a concentrated area of poverty within a wider high-income region, you tend to have a whole bunch of socio-economic problems -- high violent crime, drug abuse, teen pregnancy, failing schools, unemployment, etc. I think that's where a lot of urban policy went wrong in the 40s, 50s and 60s, in that policy was built around economically efficient housing projects, which made sense on paper but created that critical mass of economic depression that breeds dysfunctional culture -- Cabrini Green in Chicago, Marcy Projects in NY, Jordan Downs in LA, etc. When you have too high a concentration of poverty in an area, you get flight of the remaining people who can move, and then you have a poor monoculture, where there are too few role models of people getting ahead by working hard and following the rules, and too few people with the extra resources needed for grass-roots neighborhood maintenance and enrichment, and too few academically minded parents and students in the local school system, etc. If you can instead keep poverty from becoming a critical mass in any particular locality, you can prevent that kind of flight from the area, and you can prevent that subculture from taking hold.

 

[connieb]

In the NYT, Krugman discusses De Blasio's attempt to address the high cost of housing in New York City (in Manhattan, the average apartment costs $2 million these days):

http://www.nytimes.com/2016/04/04/opinion/cities-for-everyone.html?rref=collection/column/paul-krugman&action=click&contentCollection=opinion&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection&_r=0

One idea to fix it is similar to something I've discussed that we're doing in Massachusetts: providing a way around zoning rules for those who set aside affordable housing. So, for example, if zoning and permitting are ordinarily hostile to building new multi-family dwellings (as in Massachusetts), or building very high (New York), you provide a way for developers to get around that if they set aside a certain percentage of the units they're constructing for affordable rentals. What do people here think of that?

One issue I have with De Blasio's idea is that he has them set aside not only affordable property, but also senior property. I see no reason to have a special accommodation for seniors. If they qualify for affordable housing, fine, let them do so on the same basis as everyone else, but mere age shouldn't be a factor. Making age a factor has two problems. One, it could essentially act as a subsidy for wealthy older people who could afford housing anyway -- taking up units that are in demand by those who can't otherwise afford it. Second, it might mean more prime urban housing taken up by retirees, for whom there is the least utility in having them live so close to the economic action. Cities are the dynamo of the economy, and using up that in-demand land for people who won't be working doesn't make as much sense. If anything, it would make more sense to set some aside for young people, with the idea that they're the future movers and shakers in the workforce, so the city has long-term advantage in bringing them in, today, to be the interns and entry-level workers, to move up in the future.

Generally "senior" housing is designed differently than just low income housing. So, that is part of the designation. It is for the utility of providing services to seniors that is simply easier when you have seniors living in clustered groups. Also, most low income single adults, don't qualify for low income housing. While its one thing for a 20 year old to couch surf and bum a spot to crash for a month or two at a time, its an entire other thing for great aunt ethel to do so. It also is generally income dependent so these concerns that rich old people can participate are likely unfounded unless they are sheltering assets or something. But, the income limits of what qualifies a person for senior housing may be higher than what a person who is otherwise single but young to qualify for housing. But, that is important because old people cost than young people to live, because they are generally on medications or spend more money on necessary services - so it makes sense they could make a little more and still qualify.

 

[Drumcollie]

The problem is pretty simple from a supply and demand perspective. People want to live in liberal areas, like San Francisco, Manhattan, Boston, etc. They don't won't to live in shitholes like Houston, Jackson, or rural Alabama. And so they bid up the prices of property in the desirable locations to very high levels. One possible way to bring down those prices would simply be to implement Republican-style policies. If you can crash wages, decimate culture, blight neighborhoods, destroy public schools, and otherwise make a place a nasty enough area to live in, people will stop being willing to pay much for the privilege, and housing prices will come down. But assuming you don't want to race the dysfunctional parts of America to the bottom, is there some other solution -- some way to tackle the high housing prices not through knee-capping the demand side of the equation, but rather through increasing supply? That's the problem that the grown-ups are working on.

Boston Population: 801,444.... 1950 http://www.iboston.org/mcp.php?pid=popFig

655, 884...2010

Manhattan......2,332,000.... 1930

1,644,000...2010

San Francisco......775,000 ......1930

805,000....2010

People are leaving liberal areas.

Houston....384,000 ......1940
2,100,00.......2010

Growth in Areas in states run by Republicans will show even more growth

Massachusetts ranks 26th in population growth, New York 30th and California 17th

Texas # 2

https://en.wikipedia.org/wiki/List_of_U.S._states_by_population_growth_rate

 

[Arkady]

Generally "senior" housing is designed differently than just low income housing. So, that is part of the designation. It is for the utility of providing services to seniors that is simply easier when you have seniors living in clustered groups. Also, most low income single adults, don't qualify for low income housing. While its one thing for a 20 year old to couch surf and bum a spot to crash for a month or two at a time, its an entire other thing for great aunt ethel to do so. It also is generally income dependent so these concerns that rich old people can participate are likely unfounded unless they are sheltering assets or something. But, the income limits of what qualifies a person for senior housing may be higher than what a person who is otherwise single but young to qualify for housing. But, that is important because old people cost than young people to live, because they are generally on medications or spend more money on necessary services - so it makes sense they could make a little more and still qualify.

I can see value in clustering senior living to make it more efficient to deal with their health problems. However, I don't see a lot of utility in putting such housing in the city centers. Assuming most of them are retirees, society doesn't get much benefit from subsidizing their ability to live somewhere like Manhattan, where the highest-paying jobs are, thereby crowding out those who are still working.

As for Great Aunt Ethel couch surfing, I wonder whether we, as a society, might actually benefit more from having the older generation living in an integrated way with their kids and grandkids, rather than paying the high price of housing them independently. When you have 20-somethings stuck in their parents' basement you can be delaying household formation, marriages, child-rearing, etc., and maybe even delaying career progression. But with older folks, you may cut down on medical costs and gain side benefits from that kind of multi-generational living (e.g., availability for caring for the grandkids, etc.)

As for whether it makes sense to treat older people as if they earned less simply because of their age, it was my understanding that the poverty thresholds actually went the other way for good reason, because it's cheaper to live as an older person, given the availability of Medicare and of an income that does not require the expense of holding down a job (Social Security), as well as the availability of various senior discounts, and generally an absence of child-rearing expenses, student loans, etc.

 

[Arkady]

Boston Population: 801,444.... 1950 http://www.iboston.org/mcp.php?pid=popFig

655, 884...2010

Manhattan......2,332,000.... 1930

1,644,000...2010

San Francisco......775,000 ......1930

805,000....2010

People are leaving liberal areas.

Houston....384,000 ......1940
2,100,00.......2010

Growth in Areas in states run by Republicans will show even more growth

Massachusetts ranks 26th in population growth, New York 30th and California 17th

Texas # 2

https://en.wikipedia.org/wiki/List_of_U.S._states_by_population_growth_rate

Yes, obviously the growth has been concentrated in the least desirable areas. You don't just see that in the US, either -- it's an international phenomenon. The highest rate of population growth is typically in shit-holes like Zimbabwe, South Sudan, Jordan, Burundi, etc. (growth rates of 3-4% per year) while relatively nice places like the US, Switzerland, and Canada can't even muster rates of 1%. It's interesting the way you have such out-of-control population growth in places with rampant poverty, violence, and ignorance, while places that have their acts together tend to have much more stable population levels.

 

[PhilFish]

As a practical matter, when you get a concentrated area of poverty within a wider high-income region, you tend to have a whole bunch of socio-economic problems -- high violent crime, drug abuse, teen pregnancy, failing schools, unemployment, etc. I think that's where a lot of urban policy went wrong in the 40s, 50s and 60s, in that policy was built around economically efficient housing projects, which made sense on paper but created that critical mass of economic depression that breeds dysfunctional culture -- Cabrini Green in Chicago, Marcy Projects in NY, Jordan Downs in LA, etc. When you have too high a concentration of poverty in an area, you get flight of the remaining people who can move, and then you have a poor monoculture, where there are too few role models of people getting ahead by working hard and following the rules, and too few people with the extra resources needed for grass-roots neighborhood maintenance and enrichment, and too few academically minded parents and students in the local school system, etc. If you can instead keep poverty from becoming a critical mass in any particular locality, you can prevent that kind of flight from the area, and you can prevent that subculture from taking hold.

so, an accumulation of poor is the culprit?
or a subculture of poor role modeling..i.e not working hard, not following the rules, not maintaining, and fostering academic minded learning?

 

[connieb]

I can see value in clustering senior living to make it more efficient to deal with their health problems. However, I don't see a lot of utility in putting such housing in the city centers. Assuming most of them are retirees, society doesn't get much benefit from subsidizing their ability to live somewhere like Manhattan, where the highest-paying jobs are, thereby crowding out those who are still working.

As for Great Aunt Ethel couch surfing, I wonder whether we, as a society, might actually benefit more from having the older generation living in an integrated way with their kids and grandkids, rather than paying the high price of housing them independently. When you have 20-somethings stuck in their parents' basement you can be delaying household formation, marriages, child-rearing, etc., and maybe even delaying career progression. But with older folks, you may cut down on medical costs and gain side benefits from that kind of multi-generational living (e.g., availability for caring for the grandkids, etc.)

As for whether it makes sense to treat older people as if they earned less simply because of their age, it was my understanding that the poverty thresholds actually went the other way for good reason, because it's cheaper to live as an older person, given the availability of Medicare and of an income that does not require the expense of holding down a job (Social Security), as well as the availability of various senior discounts, and generally an absence of child-rearing expenses, student loans, etc.

Hey I am all for people having to take in and support thier own elderly and indigent relatives. In fact the only people that should qualify - are people who have no children or parents or first level relatives to take them in. Make families bear the cost of their relatives, rather than forcing the rest of us too. Awesome plan.

 

[Drumcollie]

Yes, obviously the growth has been concentrated in the least desirable areas. You don't just see that in the US, either -- it's an international phenomenon. The highest rate of population growth is typically in shit-holes like Zimbabwe, South Sudan, Jordan, Burundi, etc. (growth rates of 3-4% per year) while relatively nice places like the US, Switzerland, and Canada can't even muster rates of 1%. It's interesting the way you have such out-of-control population growth in places with rampant poverty, violence, and ignorance, while places that have their acts together tend to have much more stable population levels.

yes valid point Everybody runs to states where they can't get jobs...I vote this dumbass post of the week....and it's just Monday.

 

[marvin martian]

As for Great Aunt Ethel couch surfing, I wonder whether we, as a society, might actually benefit more from having the older generation living in an integrated way with their kids and grandkids, rather than paying the high price of housing them independently. When you have 20-somethings stuck in their parents' basement you can be delaying household formation, marriages, child-rearing, etc., and maybe even delaying career progression. But with older folks, you may cut down on medical costs and gain side benefits from that kind of multi-generational living (e.g., availability for caring for the grandkids, etc.)

If you do that, how will you make sure everyone has an abuela to take care of the kids in your Utopia? It's not fair if one family has one and another doesn't.

 

[Arkady]

so, an accumulation of poor is the culprit?
or a subculture of poor role modeling..i.e not working hard, not following the rules, not maintaining, and fostering academic minded learning?

I think those two things interact -- the critical mass of poor people tends to drive away too many of those that would be good role models. If you have the misfortune of being born into a very poor family, which do you think would be better for you:

(1) Living in a mixed-income neighborhood, where you have lots of available positive role models, and where the schools are supported by wealthier parents (able to support them both through higher taxes and volunteer activities, bake sales, etc.).

(2) Living in a neighborhood where nearly everyone you meet is someone who is only there because he lacks the means to escape.

I think it's pretty clear that your chance of breaking out of the rut of multi-generational poverty is going to be much better in the neighborhood where you get more enrichment possibilities, more valuable social networks, better schools, etc.

 

[Arkady]

yes valid point Everybody runs to states where they can't get jobs...I vote this dumbass post of the week....and it's just Monday.

If you're proud of finding yourself in the mode of a Zimbabwe, with run-away population growth, then that's your business. I, personally, like living somewhere that people are willing to pay a premium to live. Obviously, there are never going to be as many people buying a 7-series BMW as buying Ford Fiestas, unless BMW trashes their quality to the point they can compete with the Fiesta on a price point. In the same way, Manhattan's not going to see population growth like Malawi or Houston unless it trashes its quality to compete for those low-end people.

 

[Arkady]

If you do that, how will you make sure everyone has an abuela to take care of the kids in your Utopia? It's not fair if one family has one and another doesn't.

Life isn't fair, little one. Get used to it.

 

[PhilFish]

I think those two things interact -- the critical mass of poor people tends to drive away too many of those that would be good role models. If you have the misfortune of being born into a very poor family, which do you think would be better for you:

(1) Living in a mixed-income neighborhood, where you have lots of available positive role models, and where the schools are supported by wealthier parents (able to support them both through higher taxes and volunteer activities, bake sales, etc.).

(2) Living in a neighborhood where nearly everyone you meet is someone who is only there because he lacks the means to escape.

I think it's pretty clear that your chance of breaking out of the rut of multi-generational poverty is going to be much better in the neighborhood where you get more enrichment possibilities, more valuable social networks, better schools, etc.

I was, and I did. That's the value of perspective.. and experience.. My family lived in a part of philadelphia known at the time as the slav or polish ghetto..(North Philadelphia). At that time a mixed race, though poor neighborhood, and no lack of investment in means to escape. (read: education, education, education..)
My grandparents were additionally hampered by not speaking an iotas worth of english..

it was a life not too glamorous at times. but what there was, was the effort.. to upkeep, to maintain, to strive.. pride.

fast forward to today, that area, my very own childhood street..is a shithole, pardon the expression, where today, I would not even consider slowing the car, let alone talking a walk to show my family..

how are chances then different then chances today?



I'm seeking the difference.. because the resources then were few, the investment in $ non existent, the hurdles the same..

 

[Arkady]

how are chances then different then chances today?

Based on the evidence as you're stating it, the chances must be significantly different, judging by outcome. I mean, it's simply irrational to imagine this is some random coincidence of lots of individuals just happening not to try as hard. There must be something systematic going on. What that is, exactly, I don't know. Some of it might be that the hurdles were different based on race. Slavs and poles could much more easily blend in with the nation's upper class -- or at least their kids could once mastering the language. If a person is viewed as lower class based in part on the color of his skin, it's going to be a lot harder to escape that rut.