[cycomanic]

But if you look at many cities you'll see that population has not grown significantly. What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market. Just look at the inner cities of many places (e.g. Nice) in the off season, they are completely empty. The other thing is that rents going up dramatically is a global phenomenon, e.g. Australia's building industry is relatively unregulated and it experienced a housing boom (as did many places in Europe btw), and still rents shot through he roof.

The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence. I mean, in most Europe there was such a building boom (due to low interest rates) that sand for concrete was getting scarce.

[AnthonyMouse]

> What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market.

Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that.

> The other thing is that rents going up dramatically is a global phenomenon

There have been two major recent drivers of housing demand. One, the interest rates that until COVID were near-zero (which is a global phenomenon because capital markets are global). Two, since COVID, work from home causing people to move around and shift where the demand is. Also a global phenomenon.

Both of these can drive short-term increases in rents on the order of a few years, but they should also drive new construction, and then once the construction has caught up to the demand the rents would go back down.

Unless the construction isn't allowed to happen.

> The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence.

It very much is. You can take any two cities and account for things like median income and population density and when you're done you'll consistently find that the one with more restrictive zoning has higher rent.

[prmoustache]

The real question is do we want historical city centers to become attraction parks only for tourists or do we still want people to live there.

AirBnB and the boom of private tourism rental is transforming city centers in the former. New housing is constructed, just on the outskirts of these cities and push people off the city. This is bad for the dymamic of the city, this is bad for the environment when people pushed outside of city centers usually have to resort to drive to go to work...where they used to live, this is bad for kids and becomes a health issue when kids can't walk to school anynore and this is even ultimately bad for tourism itself as these places lose their soul and every single restaurant becomes a shitty tourist trap where no effort is needed or made in term of quality and service.

[snailmailstare]

You can build real high density urban places outside an old city center and they can function quite a bit better in terms of neighborhood restaurants, schools, markets, etc..

There are plenty of places where the old city is not all that vibrant or interesting (and where a family is so rare the question is how to get the few kids to a lively district every morning) and I don't have a fiddle small enough for the owner's opportunity loss.

[Gormo]

> The real question is do we want historical city centers to become attraction parks only for tourists or do we still want people to live there.

Why not both?

[fodkodrasz]

> Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that.

The problem is, as it can be observed in Budapest for example, that the new constructions focus on flats suitable for single people, or the short term renters, or the luxury segment, and the middle segment of the market is pretty much non-existent. Flats suitable for families are not being built, in the sizes and number of rooms where it would be useful you only have condos with rooftop terraces and such thins that unnecessarily inflate the prices.

[SR2Z]

The middle segment of the market 10 years from now is the same as the high end segment today.

Obviously when people construct buildings, they put in the nicest viable finishes and decor. No profit-seeking entity goes through all the effort of raising a structure only to finish it off with linoleum and shitty cabinets.

The lack of housing for families is a consequence of 4 roommates preferring cheaper rent in a 4bd than to rent 4 singles.

[worik]

> No profit-seeking entity goes through all the effort of raising a structure only to finish it off with linoleum and shitty cabinets.

Interesting, I observe the exact opposite

New builds use low quality materials uniformly because that maximises their profit

There are exceptions, but they are exceptions to the rule

I am in New Zealand. Our building industry is in a dreadful state

[pineaux]

Thats not true. Social housing does exactly that.

[SR2Z]

The difference between "social housing" and "luxury housing" is literally whether or not anyone is making a profit on it. A new apartment tends to be nice regardless of how its construction was funded.

In places where social housing works, the government builds enough new, shiny apartment buildings to keep the market rent low. Obviously, the construction of apartment buildings MUST FIRST BE EASY AND LEGAL for the government to do this.

[wongarsu]

It appears to me like we did manage to build from-scratch cheap housing at a profit in the 50s-80s in Europe. The key were cheap, dense, ~5 story prefabricated buildings, with some greenery around them. What is now known as commie blocks in the anglosphere.

Turns out that when you build something that's not particularly nice when it's new it becomes unattractive as it ages, which creates unattractive high-crime neighborhoods. Great to solve housing, but very unattractive for anyone else in the area. We basically stopped building them

[fodkodrasz]

Your children will surely be happy that all need to sleep/live in a single large room when it has premium surface finishes...

(also often the quality is not really premium/luxury, and the design is soul crushing everything black)

[SR2Z]

God willing, by the time I have kids cities will have gotten their shit together and built more housing.

[Tiktaalik]

I recognize this is enormously frustrating for people with families, but the reason this is happening is because there's a shortage of housing for single people, and so while there is demand from families, it makes more sense for builders to meet the unsatisfied demand for single people first.

We have more demand for single apartments than ever before because of changing household size dynamics. People are staying single longer and also living longer and thus more likely to become widowed.

The only way out of this problem is to enable more building of housing to more balance the demand of single unit apts with larger unit apartments.

[epistasis]

It's also worth pointing out in crowded cities like San Francisco that large numbers of single people band together as roommates and rent family sized units in order to afford rent, and due to a general shortage overall.

When those single individuals are able to move out into a smaller apartment, it starts freeing up the shared family size units.

Banning single units is extremely counterproductive and overall raises prices for families in situations like these.

[epistasis]

So what happens if you don't build those flats suitable for single people. Where are they supposed to go? Are not worthy of housing? I really don't understand what the problem is.

[fodkodrasz]

Let's flip the question? What happens when you don't build housing suitable for families?

Yes, demographic crisis.

A flat suitable for a family is suitable for single people living together (see american sitcoms), but the opposite is not.

[epistasis]

The proposal seems to be to not build anything, because it's a problem if apartments for single people are built.

I think we all also agree that it's a problem if housing for families is not built. But the route to more housing is rarely through problematizing other types of housing.

[fodkodrasz]

The proposal is definitely not that. The route to more housing for locals is definitely by "problematizing" empty flats build for store of wealth by foreign investors, that I see locally.

[JumpCrisscross]

> the luxury segment, and the middle segment of the market is pretty much non-existent

Why is so little getting built [1]?

[1] https://www.property-forum.eu/news/housing-construction-clos...

[AnthonyMouse]

The construction will focus on whatever is in demand. Moreover, expensive luxury units often make more family units available, because then the new occupants of those luxury units vacate the existing family units they'd have otherwise occupied.

[thfuran]

No, it'll focus on whatever's expected to be most profitable, which is not necessarily the same thing.

[AnthonyMouse]

The price they can sell the unit for is determined by demand. Profit is then the difference between that and their costs. But selling units with lower demand would then only be more profitable if those units also had lower construction costs. Which isn't really consistent with the practice of making luxury units.

[fodkodrasz]

No, at least not in the sense as what is in demand by the population, they focus on what is in demand by the investors. All new construction projects advertise themselves either as luxury or as investments. The fact that hosing is usable as investment is what has ruined the market, and the demographics of the west.

[BrenBarn]

Unless they keep those vacated units to rent them out on AirBnB.

[epistasis]

If you didn't build those units, they would be taking existing units for that rather than the new units, right?

[AnthonyMouse]

And if they use those units for that then the demand for new units from people who want to live in them will still exist and it will continue to be profitable to build even more units.

[thatfrenchguy]

> Flats suitable for families are not being built

FWIW this is also very true in the United States, layouts of new units are generally completely unsuitable for families and that's why upper middle class but not rich enough folks in San Francisco tend to rent/buy condos in older buildings.

Different problem than in France I guess, where the square meterage is just too low, here in the US it's just wasted.

[bobthepanda]

US flats generally have a lot more due to different social standards; the in-unit washer/dryer is not common globally, for example. Or apartments with double vanity bathrooms.

The families thing is also because all other things being equal, more bedrooms will lower the price per sq ft of a unit due to weaker demand; and right now studio and one-bedroom demand is so high that you could reasonably build a building full of them and generate profits.

[seanmcdirmid]

> It very much is. You can take any two cities and account for things like median income and population density and when you're done you'll consistently find that the one with more restrictive zoning has higher rent.

If it were that simple can you give some good examples? Hong Kong has little regulation and crazy high prices, Tokyo is expensive for people on local salaries even if it looks cheap to us (and having structures depreciate to zero value over 20 years makes the market weird).

[kiba]

If it were that simple can you give some good examples? Hong Kong has little regulation and crazy high prices, Tokyo is expensive for people on local salaries even if it looks cheap to us (and having structures depreciate to zero value over 20 years makes the market weird).

Tokyo is considered to have relatively affordable housing.

Hong Kong's lack of regulation is not particularly relevant to the situation. It is mainly a political issue. Much of the land in Hong Kong remains unused.

[seanmcdirmid]

Much of the land in Hong Kong remains unused because they are mountains. You already have pockets of urbanity, then a few mountains, then more urbanity, all connected via tunnels. Yes, you could always explode the mountains with a few nukes, but that sent very realistic.

[kiba]

It is a political issue due to how the government in Hong Kong chooses how to fund itself. It is not a land shortage issue.

[seanmcdirmid]

I don’t know. I’ve been to the SAR many times and have never seen this available land for building. It might be hidden behind one of those mountains though?

[anigbrowl]

Why don't the short-term rental enthusiasts just construct their own properties, instead of upending the regular rental market in pursuit of a quick buck?

[AnthonyMouse]

To construct their own properties they would have to buy some existing land and build more units on it than there currently are. Which is the thing prohibited by zoning.

[jajko]

You clearly haven't spent much time in Europe. Almost everybody wants to live in city centers where work is, especially the loudest complainers. Nobody ain't got no time for 1h commute to work each way, thats a bad situation by European standards and measurably lowers quality of life.

Then there is the fact that city centers are choke full, no further place to build, what is there is often so old its protected from major changes by various rules and laws, and very expensive without exception. So where new stuff can be built is relatively remote. But then young folks complain how far that is from city center and their jobs, that they don't want to spend their lives commuting. Construction is certainly allowed, I haven't heard about single country banning it in any way, but folks want those central places for peanuts. Almost everybody wants them, still for peanuts. The fact is that even in proper communism stuff that was important, scarce and everybody wanted it was a prized treasure with hard competition and few winners.

Thats one of the things I see is changing with new generations - wanting it all right now, never happy, not much humility or hard work to get to some desired place. Then hard disappointment when reality ain't some fabulated tiktok feed. Ie I am working on setting up my = my family modest wealth and even after moving to Switzerland with pretty good job it will take me till 60 at least, even with my wife being a doctor. Young consider this a failure, maybe my kids will do so too but I don't care. Then folks vote for trump since he keeps saying how everything is shit, thats so easy to identify with. But for every unhappy western kid there are 10 or 100 ones coming from rest of the world working hard, not complaining, with laser focus on their goals. A bit of discipline and focus can get one pretty far, especially with such competition.

[AnthonyMouse]

Here's the contradiction:

> Construction is certainly allowed

> what is there is often so old its protected from major changes by various rules and laws

Construction being allowed on a field three hours outside of the city is irrelevant. The problem is that there are laws that de facto or de jure prohibit the replacement of most existing buildings with taller buildings that provide more housing.

[CydeWeys]

> But if you look at many cities you'll see that population has not grown significantly.

You've got cause and effect backwards here. The population hasn't grown because the housing hasn't been built for them. The city population would have grown if more housing were available, but instead what happened is that the limited supply drive rents up and kept some people out.

Separately, there's also too few hotels in the city to accommodate tourists, so some housing was converted to that more profitable use. It all can be traced back to not building enough to satisfy increasing demand.

[SR2Z]

I don't know if you can say that Airbnb is the result of market forces - dodging STR regulations and taxes seem to be lucrative enough on their own.

[bluecalm]

Short term rentals fulfil important function. There is real demand for it. The problem is that it's expensive or just impossible to build anything and that it's very cheap to own.

The solution is known: significant land value tax and looser regulations to actually use the land. This will not happen though because of lobbying of property and land owners who enjoy their rent seeking. They will always manage to find another scape goat. One day it's flippers, next day it's Airbnb. Anything but land owners being forced to pay taxes to fund the area they own land on.

[bobthepanda]

Looking at raw population numbers is misleading.

Average household size has declined due to changing social dynamics (longer times before marriage, fewer kids, etc.) so even if population is static you need more units. Spain went from 3 in 1990 to 2.5, which is a pretty drastic change.

[frontfor]

I think the idea that Airbnb is to be blamed is not valid, or at least it doesn’t explain much. Keep in mind that property prices have been rising massively in many parts of the world including the oft-forgotten East/Southeast Asia in these discussions. Airbnb are not at all prevalent or even illegal there.

[h2zizzle]

Correct. A phenomenon that IS global is the financialization or property (of which AirBNB is an aspect). Could it be as simple as, "Housing is now an investment, rent goes up because investors want returns, the solution is to limit or prohibit using housing as an investment"?

[epistasis]

When was housing not an investment? This isn't new. Land has always been an investment ever since it was enclosed.

Reasoning as if financialization is a new phenomenon seems destined to come to the wrong conclusion.

[h2zizzle]

1) Housing is not land. Conflation of the two is incorrect, as any Georgist will tell you.

2) The commodification and securitization of housing as we know it today is absolutely new. This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently. We did not have esoteric derivatives of insurance on mortgage tranches 100 years ago.

But thank you for the Orwellian insistence that we have always lived in this hell. Speaks to the scruples of those who would deny people dignified places to live because of how they're able to manipulate numbers on a screen.

[epistasis]

Agreed that housing is not land, but when has housing not been traded, either for money or by favors? This is absolutely not new.

> This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently.

Sure derivatives are new, and they caused a bubble in 2008 due to giving lots of people mortgages and hiding the risk of the mortgage default, raising prices. Are suggesting that's what's going on now? Because it sure doesn't look like that at all, it looks like lack of supply to meet people's needs, which is IMHO the fundamental immorality of the system as it stands right now.

The help we live in is because capitalists (ie homeowners and landlords) have control of the planning process which allocated how much housing there can be, and they have constrained the amount of housing. Yes, it is Orwellian and cruel. But it's also very important to realize that getting rid of derivatives will do nothing at all to bring down prices, unless there's a pricing bubble. Getting rid of the 30 year mortgage would bring down prices, but at the same time also reduce affordability of homes, so everybody would be in the same situation of a shortage.

The scrupleless housing deniers live in the homes next to us in cities, denying new housing because they are conservative and don't like seeing new things, and backforming reasoning like "it's only housing for people I don't like or can demonize." Sometimes these folks care about their asset price appreciation too (numbers on a screen) but a lot of it is simple fear of change.

[h2zizzle]

>Are suggesting that's what's going on now?

Yes.

>Because it sure doesn't look like that at all, it looks like lack of supply to meet people's needs

That is certainly the propaganda line that is being pushed in order to eventually justify public subsidies for builders. The shortage of affordable housing is commonly conflated with a mythical shortage of physical housing. There is a shortage of affordable housing because residential valuations have risen out-of-step with everything (including wage growth and inflation) except the desired ROI of the securities that they underlie. This is what we get when homes are more valuable as assets than domiciles, which, again, is emphatically not what they were in the modern past (even at the top end; robber baron palaces were not built as wealth stores so much as prestige amplifiers; they were not the investment (i.e., meant to be aold or borrowed against), but multipliers for the actual investment (one's social standing and influence). They often only left the family at a loss.).

We don't need a massive amount of new housing. But I agree that the solution will involve, for once, throwing homeowners rather than homeseekers under the bus.

[EVa5I7bHFq9mnYK]

The housing stock (HS) was taken off the regular market not for free. Travelers paid through the nose for this HS and for other services catering to travelers. That money should have been used to replenish the HS.