[sandworm101]

I don't think liberal zoning is the problem. I've seen my city go through massive changes in the last 30 years, top of the list being a radical increase, a liberalization, of zoning. They are allowing more and bigger developments. Multi-story and multi-unit developments are everywhere, but that isn't making housing any more affordable.

A piece of land with a liberal zoning is worth more. It is a target for redevelopment in order to max out the zoning. The net result in my local is the steady replacement of anything old (ie 10+ years) by newer ridiculously large replacements. Apartments and other attached units are now so expensive, and prices rising so steadily, that the logical thing to do is let them sit empty. The pittance one might claw back in rent pales in comparison to rising prices, and who needs pesky tenants anyway.

So... liberal zoning --> rising land values/prices --> redevelopment is better than renting --> fewer rental units = higher rent. It's true up and down the west coast. Now if a government told owners that no, they are not going to rip down that apartment block to replace it with luxury living, all-one-level, condos (ie for old/rich retirees) then perhaps prices might stabilize, sending more units into the rental market and so also stabilizing rents.

[TulliusCicero]

> Multi-story and multi-unit developments are everywhere, but that isn't making housing any more affordable.

More development doesn't make housing more affordable. It makes it less unaffordable compared to the alternative of restricting supply. For how that turns out, just take a look at SF.

Like, desirable cities are always going to be expensive, but you can choose between whether they're moderately expensive vs insanely expensive.

> So... liberal zoning --> rising land values/prices --> redevelopment is better than renting --> fewer rental units = higher rent. It's true up and down the west coast.

??? The west coast, by and large, does not have liberal zoning. This is particularly true in coastal California, which has the worst affordability problems.

One of the issues is that cities tend to only have small pockets of liberal zoning in downtown cores, so we get all our density from large towers that are inherently very expensive to build. If we got more middling density in existing SFH areas, it'd be much easier to get cheaper housing: http://missingmiddlehousing.com/

[rspeer]

> Apartments and other attached units are now so expensive, and prices rising so steadily, that the logical thing to do is let them sit empty.

I highly doubt this is going on over any long period of time. If there's a bubble like this, it'll pop.

Why do you think these new apartments are luxury apartments? It's because living in your city is a luxury that people with enough money are paying for. If they didn't exist, people would be paying even more for living spaces that do exist. So, build new apartments and prices go up. But don't build new apartments, and prices go up more.

The most reliable way to get affordable housing (besides a lottery or waiting list, which doesn't solve the problem) is to have built new housing 30 years ago.

[sandworm101]

Luxury has some scientific definitions. Top of the list is size for a single-family dwelling. My city has liberalized zoning for size, but kept limits on number of occupants and such for fear of impacting infrastructure. The result is ever-larger units. New houses seem less like houses and more like diagrams of local building codes. Property line minus ten feet, there's your wall.

Luxury apartments can also be defined during zoning as units that the city assumes will rarely be occupied. It is often easier to get a permit if you can claim that the people in your development aren't going to contribute to traffic problems. I've even seen the pre-selling to overseas investors trotted out as justification for not upgrading traffic connections to a development. So-called "elder living" units also fit this scheme.

As for rents, the standard has always been that yearly rent should be around 1/20th of the unit's value, the "20-year" rule. But with property prices rising so quickly, some units are renting out at 1/50th their value. Once you get into those areas, rent becomes irrelevant and you run into the paradox that many units (houses and condos) are worth significantly more without tenants. You don;t want to bother asking tenants to clear out so you can show the unit. So investors planning to flip something in the next couple years don't bother with rent. Only when they think that they may have to hold on for a while do they consider.

[rspeer]

If the problem is that overseas investors are buying the houses, sure, that's a problem that decreases the amount of living space. But how would restrictive zoning fix that problem?

And I still don't think the flipping is relevant in the long run. It's pent-up demand sorting itself out. They can't keep flipping forever.

[TulliusCicero]

> But how would restrictive zoning fix that problem?

Not only does restrictive zoning not fix the problem, it only makes it worse. Part of why you have investors buying properties in places like SF is that housing is such a hot commodity due to the restricted supply. If it was easy to make lots more apartments and condos there, it would be less attractive as an investment, which would mean less speculation.

[sandworm101]

It's not so much the level of zoning, but its recent liberalization. Properties that are not living up to their zoning potential (ie you are now allowed to build something much bigger) are being pulled off the market for redevelopment. Then the new units are so geared towards ownership and investment, many being pre-sold individually, that they never return to the rental pool.

A more restrictive approach could discourage such redevelopment and sequestration, keeping rental units as rental units.

[Symmetry]

The important question is, has the quantity of housing gone up as quickly as the city's population? As with most things if there's a something preventing enough stuff from being built it will be the rich who get it. Also, I'd really like to see the numbers on vacancy percentage in your city. I'd be willing to be that they aren't actually very far out of line with normal rates.