7 ms·

I'm curious to hear why you think it doesn't work. I'm not necessarily disagreeing, just would like to know more.

zozbot234 5y ago
The point is that no matter how much housing you reserve to be "affordable housing", it will still be scarce and thus unaffordable to most. And this kind of well-intentioned red tape often ends up shrinking the supply of housing as a whole, which only makes it even less affordable.
- lprubin 5y ago
  If you compensate the developers' losses in revenue with tax breaks, how does it shrink the supply?
  - kiba 5y ago
    If it doesn't encourage developers to build more houses, then it does nothing. We care more about the number of people housed, not merely just people who are housed who can afford their bills.
    - lprubin 5y ago
      The original question was "How do you get teachers, garbage collectors, plumbers, nurses, all sorts of manual workers ?" Those people all have some amount of money they can afford to pay their bills. Since a city needs some percentage of those workers, having housing they can afford is a big step towards attracting them.
      - kiba 5y ago
        If you want affordable housing, then build houses.
- throwawaysea 5y ago
  But where is the line? Rampant development can completely alter the feel and culture of a neighborhood and city. It can take away from those things the existing residents enjoy. Sure more supply can accommodate more humans but they won’t necessarily be the same humans if current residents leave, and it won’t necessarily be the same place afterwards. Desirability (demand) creates scarcity but scarcity can also be desirable in itself for some things. At some threshold, the answer isn’t build more but locate people elsewhere and build a more distributed economy rather than a few concentrated powerful cities or states.
  - CodeShmode 5y ago
    The local government version of “f*** off, we’re full”
anamax 5y ago
If "affordable housing" means "under market price", in practice AH means that it goes to the connected at that price. If they can, they resell at market later, if they can't, well, they just got subsidized housing. Remember, housing prices in high-priced areas are driven by location, location, location, location, location (yes, two more locations than ordinary housing), so "it's small" doesn't translate to "the market price is low." (It's just less expensive than big.) When the "market price" exceeds the cash price, the folks who get to buy are the ones who have some way to pay outside the system.
- otabdeveloper4 5y ago
  Some countries have what's called "buyer-funded development". Property buyers invest into shares of the development company which then uses the funds to buy land and build housing. Investors get much cheaper prices, developers get easy liquidity. The downside is that you have to wait a year or two before moving in, and some theoretical risk. (Which can be managed with proper legislation.) But the scheme works if you want affordable housing.
  - anamax 5y ago
    No, that scheme doesn't do what you think it does (and that scheme is occasionally done in the US, especially for luxury residences). Suppose that the residences will be worth $1000 when built and it costs $500 to build them. The pay-in-advance price will be around $1000 - interest. The pay-in-advance price won't be significantly less than $1000-interest because the builder can borrow the $500, and sell for $1000 when built, repaying the bank and pocketing the rest. The pay-in-advance price won't be significantly more than $1000-interest because if it is, folks who want to buy will wait and pay $1000 when the units are built (forcing the builder to borrow $500). In other words, pay in advance doesn't result in below market prices. If you add in some units which would sell for $500 but you're forcing the builder to sell them for $250, the question is "who gets them?" The answer to that question does not depend on when the payment is made. In the US, the vast majority of the "below market" units will be split between friends of the local govt and the developer. Yes, it would be nice if that wasn't true, but it is absurd to behave as if it isn't true (in the US).

The point is that no matter how much housing you reserve to be "affordable housing", it will still be scarce and thus unaffordable to most. And this kind of well-intentioned red tape often ends up shrinking the supply of housing as a whole, which only makes it even less affordable.

lprubin 5y ago
If you compensate the developers' losses in revenue with tax breaks, how does it shrink the supply?
- kiba 5y ago
  If it doesn't encourage developers to build more houses, then it does nothing. We care more about the number of people housed, not merely just people who are housed who can afford their bills.
  - lprubin 5y ago
    The original question was "How do you get teachers, garbage collectors, plumbers, nurses, all sorts of manual workers ?" Those people all have some amount of money they can afford to pay their bills. Since a city needs some percentage of those workers, having housing they can afford is a big step towards attracting them.
    - kiba 5y ago
      If you want affordable housing, then build houses.
throwawaysea 5y ago
But where is the line? Rampant development can completely alter the feel and culture of a neighborhood and city. It can take away from those things the existing residents enjoy. Sure more supply can accommodate more humans but they won’t necessarily be the same humans if current residents leave, and it won’t necessarily be the same place afterwards. Desirability (demand) creates scarcity but scarcity can also be desirable in itself for some things. At some threshold, the answer isn’t build more but locate people elsewhere and build a more distributed economy rather than a few concentrated powerful cities or states.
- CodeShmode 5y ago
  The local government version of “f*** off, we’re full”

anamax 5y ago

If "affordable housing" means "under market price", in practice AH means that it goes to the connected at that price. If they can, they resell at market later, if they can't, well, they just got subsidized housing. Remember, housing prices in high-priced areas are driven by location, location, location, location, location (yes, two more locations than ordinary housing), so "it's small" doesn't translate to "the market price is low." (It's just less expensive than big.) When the "market price" exceeds the cash price, the folks who get to buy are the ones who have some way to pay outside the system.

otabdeveloper4 5y ago
Some countries have what's called "buyer-funded development". Property buyers invest into shares of the development company which then uses the funds to buy land and build housing. Investors get much cheaper prices, developers get easy liquidity. The downside is that you have to wait a year or two before moving in, and some theoretical risk. (Which can be managed with proper legislation.) But the scheme works if you want affordable housing.
- anamax 5y ago
  No, that scheme doesn't do what you think it does (and that scheme is occasionally done in the US, especially for luxury residences). Suppose that the residences will be worth $1000 when built and it costs $500 to build them. The pay-in-advance price will be around $1000 - interest. The pay-in-advance price won't be significantly less than $1000-interest because the builder can borrow the $500, and sell for $1000 when built, repaying the bank and pocketing the rest. The pay-in-advance price won't be significantly more than $1000-interest because if it is, folks who want to buy will wait and pay $1000 when the units are built (forcing the builder to borrow $500). In other words, pay in advance doesn't result in below market prices. If you add in some units which would sell for $500 but you're forcing the builder to sell them for $250, the question is "who gets them?" The answer to that question does not depend on when the payment is made. In the US, the vast majority of the "below market" units will be split between friends of the local govt and the developer. Yes, it would be nice if that wasn't true, but it is absurd to behave as if it isn't true (in the US).