London has become the capital of frugal living - "Despite comfortably out-earning the rest of the country in terms of salaries, their lifestyles are comparatively more frugal than the rest of the country’s because we have less money left in our bank accounts after housing costs. According to the Institute for Fiscal Studies and the Economic Statistics Centre of Excellence, those living in the capital earn 40pc more than the UK average, yet they are left with less to spend on goods and services than the average British person... So, if the vibe is dying and living in London means a more frugal existence despite slaving away for more money, then why does anyone bother living here at all? It’s a question most of us who’ve called this place home for a while all ask ourselves on a regular basis."
89,000 council properties sit empty amid second homes tax raid - "The assault on second home owners is being pushed through by “dishonest” councils with thousands of empty properties on their books, Telegraph analysis has revealed. Councils in England were given the power to charge a 100pc council tax premium from April 1 under laws passed by the previous Conservative government to ease housing pressures. But government figures show there are 34,000 council-owned homes lying empty around England, plus a further 55,000 run by social housing associations. In Labour-led Gateshead, the number of second homes (469) is significantly dwarfed by the number of idle social housing properties (821). The council, which has a bulging waiting list of more than 12,000, introduced the second home surcharge in a bid to “further discourage the holding of empty properties”. However, it owns 636 vacant homes, and a further unoccupied 185 are managed by housing associations. It means the level of vacant social housing in the North East borough exceeds the number of second homes by 42pc."
Why Is Japanese Zoning More Liberal Than US Zoning? - "Japanese zoning is relatively liberal, with few bulk and density controls, limited use segregation, and no regulatory distinction between apartments and single-family homes. Most development in Japan happens “as-of-right,” meaning that securing permits doesn’t require a lengthy review process. Taken as a whole, Japan’s zoning system makes it easy to build walkable, mixed-use neighborhoods, which is why cities like Tokyo are among the most affordable in the developed world. But praise for Japanese zoning skirts an important meta question: Why did U.S. zoning end up so much more restrictive than Japanese zoning? To frame the puzzle a different way, why did U.S. and Japanese land-use regulation—which both started off quite liberal—diverge so dramatically in terms of restrictiveness? I will suggest three factors; the first two set out the “why” for restrictive zoning and the third sets out the “how.” Any YIMBY efforts to liberalize cities in the long term must address these three factors. First, the U.S. privileges real estate as an investment where Japan does not, incentivizing voters to prohibit new supply with restrictive zoning. Second, most public services in the U.S. are administered at the local level, driving local residents to use exclusionary zoning to “preserve” public service quality. Third, the U.S. practice of near-total deference to local land-use planning and widespread use of discretionary permitting creates a system in which local special interests can capture zoning regulation and remake it around their interests. At the outset, why might Americans voters demand stricter zoning than their Japanese counterparts? One possibility is that they are trying to preserve the value of their only meaningful asset: their home. In the U.S., we use housing as a kind of de facto social safety net. Through a mixture of interest deductions, capital gains and property tax exemptions, and subsidized mortgages, current housing policy in the U.S. does everything it can to nudge every American into plowing their life’s savings into a home. Over time, the thinking goes, homes will accrue in value and homeowners will build “wealth.” In reality, even with all these subsidies, a home is a poor investment: it’s highly illiquid, and if a region isn’t growing or if a lot of new housing being built, any meager housing appreciation will be wiped out by maintenance costs and taxes. To overcome this issue, U.S. municipalities systematically restrict the construction of new housing, creating artificial housing scarcity which drives up the values of existing homes. For more on this hypothesis, check out The Homevoter Hypothesis by William Fischel. The situation in Japan is almost the exact opposite. Homes have little resale value in Japan. By one estimate, the average Japanese home fully depreciates after 22 years... Here in the U.S., the quality of essential services like parks, education, and public safety can vary dramatically municipality to municipality. A larger population of low-income households means higher public outlays, higher taxes on middle- and upper-income earners, and lower quality public services. Residents respond by self-selecting into the most affluent communities they can afford and pulling up the ladder once they’re in. To put it another way, to ensure access to quality schools and open space, American households are encouraged to move out to a suburb and employ land-use regulations to keep out anyone poorer than themselves... Japan avoids these pressures both by standardizing local public service provision and by enforcing strict economic and racial homogeneity through a mixture of high marginal tax rates and xenophobic immigration policy... In the U.S., our 89,000 municipal governments are entitled to develop their own unique system of land-use regulation, with little to no oversight from the courts, state governments, or federal regulators... In cities, the mechanism of enforcing these restrictive preferences is slightly different. More so than in suburbs, many U.S. cities force every development proposal to go through a long and costly discretionary review process. This is often done by making land-use regulations so restrictive that any development must pursue a discretionary action like a rezoning or a special permit. In practice, this submits all proposed development to months of negotiating and public review, in which locals can shout a project down to their preferred size (which is often a vacant lot) or extract large concessions from the developer. Japan bypasses these problems completely through a large national role in land-use planning and an as-of-right system of development."
Clearly, in Japan landlords and developers are less greedy
Matthew Yglesias on X - "Guy who’s worried that if we ban new luxury housing there will be skyrocketing levels of homelessness among the rich, since the only dwellings left will be cheap affordable housing."
A short intro - by Russil Wvong - "The root problem here is that certain cities don't want growth and they don't want new housing, so they make it really hard to build. In places which make it easy to build new housing, like the southern US, or Edmonton and Montreal in Canada, housing is much cheaper - it's less scarce, so it's less expensive. I'm in Vancouver, but the situation in places like Toronto, California, and NYC is similar. We have institutions that were set up back in the 1970s and 1980s to make it hard to build housing. At the same time, we have lots of well-paying jobs here. So people are always moving here - and then prices and rents have to rise to unbearable levels to push other people out. When there's a housing shortage, it's worst for people near the bottom of the housing ladder. They're forced to move away, to crowd into substandard housing, or worst of all, end up homeless. And when Covid hit five years ago, it aggravated the overall housing shortage, because there were suddenly a lot more people working from home, needing more space, and willing to move. It's like the housing shortage spilled over from high-cost cities to low-cost cities. That's the diagnosis of what's going on. The prescription is pretty simple: build more housing. People want to live and work in Vancouver, and other people want to build housing for them. But because we regulate new housing like it's a nuclear power plant, and tax it like it's a gold mine, we're severely restricting the supply of housing. We should stop doing that. In particular, high taxes on new housing really ratchet up the floor on prices and rents. And then because new housing is so scarce and expensive, older housing is also scarce and expensive... When you're not building housing, what happens is that higher-income newcomers end up bidding up prices and rents, pushing people out. It’s like when there’s a shortage of new cars. Used cars also become scarce and expensive. We tend to focus on how expensive new housing is, while not paying much attention to what’s happening with existing housing... Housing policy isn’t that complicated. “If you want more affordable homes, make it legal to build more. If you don’t, then don’t.”"
To Understand a City’s Pace of Gentrification, Look at Its Housing Supply - "high housing costs—resulting from a lack of available housing—cause affluent buyers to look for homes in low- and moderate-income (LMI) neighborhoods. That means cities’ housing supply can determine how fast gentrification may occur. Boosting the supply of housing can slow the pace of new buyers moving into lower-income neighborhoods."
Michael Kaess on X - "Bronx Community Board 10 held an in-person meeting so people who bought their homes decades ago could come and scream, “We don’t need affordable housing.”"
Damn greedy landlords and developers keeping housing expensive!
Housing cost dissatisfaction hits record high in rich nations - "Dissatisfaction with housing costs has hit a record high across rich countries, soaring above other worries such as healthcare and education. Half of respondents in Organisation for Economic Co-operation and Development nations are dissatisfied with the availability of affordable housing, according to Gallup Analytics figures, a sharp rise since central banks hiked interest rates to deal with the worst bout of inflation in a generation... Researchers partly blame a lack of construction of new homes for the affordability crisis. “Basically we haven’t built enough,” said Willem Adema, a senior economist in the social policy division of the OECD, adding that developers were often targeting wealthier households, exacerbating the strain on those on lower incomes. Andrew Wishart, an analyst at Capital Economics, said: “Population trends can move much faster than you can change housing supply.”... many existing homeowners have locked in 30-year mortgages at ultra-low rates, and as a whole are paying less on servicing debt as a percentage of income than at any time since 1980, according to Harvard. The Gallup data, based on responses from more than 37,000 people in the 37 countries that make up the OECD’s club of wealthy states, show that discontent over housing affordability is highest among under-30s and those aged 30 to 49, many of whom may be trying to get on the property ladder."
The Wonderful World - "Home Buyer: I want a house built after 1980.
Me: Actually, you don't. Let me explain.
Newer isn't always better, and this picture sums it up pretty well. The quality of modern lumber is simply far inferior to the quality of lumber they were using to build homes in the early and mid-20th century. Wood quality began dropping on a serious scale in the 1980s due to old-growth timber being almost completely depleted. Most wood used today is grown very fast - not only can you visibly see the difference in quality, but the newer lumber is more prone to rotting due to a lack of heartwood. Slow growth wood yields much more heartwood, which is the longest lasting part of the tree, whereas sap wood (new growth wood) will rot very quickly. Modern lumber is also a lot more prone to termite damage as it is softer and easier to consume whereas old lumber is extremely resinous and naturally termite resistant. A good rule - as long as the plumbing and electric has been updated, a well-built home from the mid-20th century is a better investment and will likely outlast a newer build."
Florida residents in luxury condos forced to flee over sinking floors - "Residents of a condo complex in Jacksonville, Florida have suddenly been forced out of their homes over sinking floors. Within weeks of the Presidium Regal apartments opening last year, some tenants started reporting issues with their units, saying their floors were uneven or sinking under the weight of their furniture."
Left wingers will still object to "luxury" condos
A global housing crisis is suffocating the middle class - "Between 2015 and 2024, prices rose by 54% in the United States, 32% in China and by nearly 15% in the European Union (including by 26% in Spain)... Economic growth has been concentrated in a handful of metropolitan hubs, leading to fierce competition for housing, which in turn creates gentrification. “The super-city model promoted around the world starting in the 2000s has created the belief that cities should attract talent and capital, with no consideration as to the consequences that it creates for the people already living in them. You can’t aspire to being the Silicon Valley of the Mediterranean and expect rents to stay low”... housing is no longer seen as a basic right and is now viewed as a financial investment. “Speculation favors the construction of apartments that allow for the greatest amount of earnings, while low-cost houses, which are the most needed, have been ignored,” says Christoph Schmid, economic law professor at Germany’s University of Bremen."
Yet, the urbanists promote densification in the form of apartments, so
It is interesting that the article blames declining public investment in housing for the problem but at the same time says the efficacy of current public investment in housing is uncertain
Northern variant on X - "I've been looking on behalf of someone else at the rentals market today. There was a time when online listings websites offered a world of possibilities, but rental properties at the lower end are now barely habitable. There are carved up bedsits and most search results are now house-shares. Housing benefit for a single disabled person simply won't stretch to an actual home. Worse still, the areas where there are affordable properties are the "diverse" - where single women simply are not safe. Until relatively recently there were still towns largely unaffected by diversity but just about everywhere now is run down and populated by foreigners. There's nowhere left that feels like home and nowhere that feels truly safe. The gentle, safe country we knew is gone - and our political class simply doesn't care. Not only do they not care, they don't even see a problem. Labour has declared an effective amnesty for an army of third world men - to the extent that sexual offensived have rocketed in a short time. We have no say in it. The establishment has invited the world to set up shop in our country, even though there's nowhere to put them and no jobs for them. 1.1 million people were given long-term visas in the twelve months to June 2024 - while our own people rot in unsuitable accommodation. We now have to compete with foreigners just to find basic shelter. Those at the bottom can forget about about a secure, warm home, and no longer have any expectation of safety outside their front door. The support systems are overwhelmed, they don't work, and people with complex needs just aren't getting help. Our country has been given away and sold from under us."
Chris in the High Peak. on X - "Labour is about to declare war on the private landlord. No fault evictions abolished and rent caps introduced. Is the buy to let market even viable any longer? Even less housing stock will be available when landlords exit the market. Labour can't see that."
Why vacant homes won’t solve our housing shortage - "One frequently-heard retort to any call to allow more housing construction is a single statistic: There are 17 million vacant houses, more than 30 for every American experiencing homelessness during the 2018 Point-In-Time survey. While those vacant houses do exist, they exist for complicated reasons—and any serious plan to address the housing shortage requires not just redistributing existing vacant houses, but also building new ones... Roughly one-third of all vacant houses in America are empty for one of three broad reasons:
1. Temporary churn: Houses that are momentarily vacant between occupants. Some people are moving in, some people are moving out, and when their timing does not perfectly line up, the result is a temporarily vacant unit...
2. Abandonment... These houses might have low upfront costs, but the cost of making them habitable and then keeping them in good condition can be prohibitive... As someone who lives in an apartment that had been abandoned for years, and who spent months wrangling the three parties that had claim to it, I know the frustrations involved in gaining clear title. But death is an unfortunate fact of life that not everyone adequately plans for.
3. Second houses...
Housing and wealth are indeed not fairly distributed among Americans, but our nation’s, and our region’s, housing woes cannot simply be cured by redistribution. Although it’s true that there are millions of empty houses in America, and millions of Americans with inadequate housing, simply rearranging houses and people isn’t a panacea. Many of those vacant houses are already in the process of being redistributed to new renters or owners through the housing market. Others, like second houses in resorts or abandoned houses in the Rust Belt, could in theory be occupied full-time, but their residents might struggle to find year-round jobs that could sustain their costly upkeep. Still other houses should be redistributed from the dead to the living; probate delays are annoying, but not following due process also has consequences. Most importantly, it’s the geographic distribution of houses is more of a problem in America, since houses’ fixed location and longevity mean they’re intrinsically locally traded... Despite the dire need, antiquated and discredited zoning laws mean it’s often illegal or difficult to fill those vacant bedrooms, due to restrictions on accessory dwelling units and widespread apartment bans. (Ironically, zoning laws were invented by Gilded Age plutocrats the last time wealth inequality in America was this bad. Zoning was meant to prevent elite urban areas from becoming exactly the sort of mixed-use, mixed-income neighborhoods we now celebrate.)"
How 40 Million Immigrants Create Housing Wealth and Stabilize Communities - "Collectively immigrants add $3.7 trillion to U.S. housing wealth. Each of the 40 million immigrants in the U.S. adds, on average, 11.5 cents to the value of the average home in their local county. Given that the typical immigrant lives in a county with 800,000 housing units, this adds $3.7 trillion to U.S. housing wealth."
Someone was claiming immigrants don't raise housing prices because they can't pay $5 million for a property
86% of renters say they can't afford to buy a home, with majority saying they will never afford one: Survey : r/Economics - "Tell me why are we not worried about giant corporations buying up all the supplies of cars. Is it because the car market has no limitations on supply and car manufacturers can build as many as they want. Therefore, the average car loses value over time and is a bad investment and therefore corporations don't invest in them. Shouldn't we follow that model towards housing? If you remove most restrictions towards building and therefore with more demand there will be more supply to meet it, then corporations buying up all properties becomes a non-issue. Besides corporations buying up properties, actually helps the renting market because they typically rent them out. With a higher supply of rental units rents go down. Corporations are not the problem. It's homeowners who pass laws to restrict supply because they want their homes to go up in value non-stop. I wish progressives would understand the economics around housing and dropped the populism that leads them to draw wrong conclusions."
"Please explain to me why I'm wrong."
"He won't because progressives aren't here to actually discuss economics, they are here to discuss how they feel about economics."
There is now a NIMBY index - "One embedded lesson is that the number of veto points over new construction is increasing. And “By our metric, about one half of all communities in the Regulation Change index increased regulation, one-third decreased, while only 18 percent showed no net change.”"
The Local Residential Land Use Regulatory Environment Across U.S. Housing Markets: Evidence from a New Wharton Index - "We report results from a new survey of local residential land use regulatory regimes for over 2,450 primarily suburban communities across the U.S. The most highly regulated markets are on the two coasts, with the San Francisco and New York City metropolitan areas being the most highly regulated according to our metric. Comparing our new data to that from a previous survey finds that the housing bust associated with the Great Recession did not lead any major market that previously was highly regulated to reverse course and deregulate to any significant extent. Moreover, regulation in most large coastal markets increased over time."
The NIMBY index!
Richard Hanania on X - "A woman lived with three “emotional support parrots” in her co-opt who drive her neighbors crazy. They try to evict her, the federal government comes after them for a civil rights violation and forces the co-opt to buy her apartment and give her $165K in damages. Clown nation."
The Emotional Support Parrots vs. the Co-op Board - The New York Times - "For almost 20 years, a group of parrots and their owner lived at the Rutherford, a co-op apartment building in the ritzy Gramercy Park neighborhood of Manhattan. For almost as many years, the neighbors complained. The parrots shrieked and squawked, they said. The parrots shouted human words, but not clearly enough for the neighbors to follow their conversations. The parrots seemed to generally drive everyone mad. After years of complaints, the chorus of caws and cries became unbearable. So the building’s co-op board moved to evict the woman who cared for the animals, Meril Lesser. In response, Ms. Lesser said her parrots — three birds named Ginger, Layla and Curtis — were emotional support animals who also cared for her."
Shrug Life on X - "I love how the article fails to distinguish between an emotional support animal and a service animal. You can't just declare an animal to be a service animal. Also, it sucks any quack doctor can write a note saying you need your animals...."
ライオン Lion on X - "And then the liberals are mystified at why everyone wants to live in a detached house in the suburbs instead of a "walkable" urban neighborhood."
Everyone is "discriminated" against nowadays
A Look Inside London's Most Outrageous 'Iceberg' Homes - "London is one of the most affluent cities in the world with a vibrant property market to match, but a lack of general space combined with some overwhelmingly tight council restrictions, have started to force the elites of London underground into ‘iceberg’ homes. Known as ‘iceberg’ homes because of their inverted ratios above and below ground, these extravagant properties have become all the rage amongst the city’s wealthiest residents with a desire for urban space. A study by Newcastle University’s global urban research unit found that 4,650 basements have been granted planning approval in some of the most affluent suburbs in the British capital. Further details revealed that plans for around 1,000 gyms, 456 cinemas, 381 wine cellars, 376 pools, 340 games rooms, 242 saunas or steam rooms and 63 underground garages were approved between 2008 and 2017."
How many bathrooms do you really need? The rise of single-bathroom shame - "McCloud laid out his dislike of “houses with more toilets than physical occupants”, and posed the question: “Why do people judge the status of a house by how many toilets you can offer your guests? It’s absurd.” It’s not the first time that he has railed against this phenomenon. Back in 2019, he told The Sunday Times that he could not get his head around it. “You can’t use more than one [bathroom] at a time and, frankly, you only need to use it four or five times a day,” he said. “Estate agents have always sold houses by the number of bedrooms; soon they’ll do it by the number of WCs.” His prediction doesn’t actually seem that outlandish. In 2017, Direct Line surveyed UK estate agents to try to get a handle on how much value an extra bathroom could add to a home: they found that on average, an additional loo could boost a three-bedroom house’s price by as much as £12,000. For a four-bed, it could add almost £17,000... An excess of bathrooms – for example, if “four people live in the house and put in six toilets”, as McCloud said to illustrate this madness in his Sunday Times interview – feels like people-pleasing gone mad. It’s an extreme case of preparing for all eventualities and eliminating any minor inconvenience for hypothetical house guests... There’s also a sense that, in decking out our homes with a lav for every eventuality, we’re trying to keep up with interiors norms on the other side of the Atlantic. You only have to watch an episode of Netflix’s fever dream property show Selling Sunset to see that, in high-end American homes at least, the bathroom-to-bedroom ratio is more like two to one"
‘Stop doing dumb stuff,’ economist warns as housing affordability in Australia slips - "Economist Saul Eslake said Australia was now feeling the effects of “60 years of bad policies” which “needlessly” encouraged Australians to spend more on housing – through tax breaks for investors, shared equity schemes, stamp duty concessions, and lower interest rates while constraining the supply – making it harder to build homes. “If you were really wanting to do something about that, the first thing you would do is stop doing dumb things,” he said. “Stop needlessly inflating demand by scrapping all the programs that needlessly inflate demand, and stop constraining supply by stop doing the things that constrain supply.” Eslake said the lack of political action boiled down to numbers: there are at least 11 million homeowners, 2 million investors and only 100,000 first-time buyers each year. “Even the dumbest of our politicians can do that math,” he said"
Condominium Modifications& Alterations - "In most cases, the restrictions set forth for condominium owners (known as “co-owners”) are much stricter than those imposed by a home owner subject to the restrictions in a subdivision governed by a Home Owners Association. That is because in many instances co-owners share walls or other common spaces or amenities that home owners in subdivisions do not. In most cases, a co-owner may not alter or modify the exterior of the unit or anything attached to it without permission. Uniformity of appearance is very important in the world of condominiums. If you like being able to express your personal style, a condominium might not be the place for you. Also, it might not just be the exterior of the unit that you cannot modify without permission, but the interior as well, especially if you share common walls, plumbing, or other utilities. In order to make sure these restrictions are adhered to, the Condo Association’s Board of Directors will require you to notify them and get approval before any modifications or alterations. This could be for something as simple as replacing a front door... It might even be written into the Bylaws that if you made a modification with without approval that you will incur a fine. Last month’s blog touched on the topic of how fines are collected (link here). This can lead to slippery slope of late fees and potential legal fees."
Urbanists like Not Just Bikes love to mock the restrictions of HOAs and promote dense living, but the restrictions when you live in a condo can be much stricter than in a HOA. Ironic.
Homebuyers used to avoid construction. Now, there’s a worse neighbor: influencers - "Williamsburg, Dumbo, and the West Village are three New York City neighborhoods that are flooded with influencers snapping pics and filming videos. To “privacy-seeking” renters, this has become a major con during their apartment search. The outlet spoke with Corcoran broker Sydney Blumstein, who recalled her client turning down an apartment next to the Manhattan Bridge in Dumbo due to the sheer number of influencers and tourists crowing outside the area. “She loved the apartment but was like, ‘I can’t walk out into this every day, this is insane,’” Blumstein said... Not only are influencers themselves living in these areas, but their job of sharing hidden gems throughout the city has resulted in followers storming the same locations. Coffee shops, thrift stores, and parks that were once lesser-known sanctuaries have become hubs for social media users. And while it may benefit small businesses, the crowds can quickly turn a charming atmosphere into an unpleasant and obnoxious one."
