CDs vs. NIMBY

bcftbca

an article about housing that totally ignores the fact that most homes are bought with mortgages. the whole part about a $1M dollar house falling in value being totally fine because other houses fall in value too ignores that when house prices go down mortgage holders can't sell for a price high enough to even buy the now-cheaper price this is a shitty article with no understanding of reality

happytoexplain

A tortured analogy. The concept of `NIMBY === house as investment` is a very common strawman. Believe it or not, most people care about their homes and communities for their intrinsic value, which is where most NIMBYism comes from.

bwhiting2356

Increasing housing supply does not decrease home values, because high density housing benefits from network effects/economies of agglomeration. NIMBYs don't object because they think their house will be worth less, they object because they believe their quality of life will go down (based on what is important to them). Higher density brings both good and bad: upside: - high paying, specialized jobs - specialized, high quality services - stores open late - better dating (more fish in the sea) downside: - more traffic - more noise - more pollution - more anonymity, crime (people in small towns leave their doors unlocked and say hi on the sidewalk) The people who benefit most from higher density tend to be young professionals, which tend to not currently live in the neighborhood and will move in if density goes up.

abeppu

> If all this sounds like wishful thinking, consider the polar case where housing deregulation drives the price of housing to zero. Yes, this wipes out the value of whatever housing you already own. But it also means that you can move to a palace anywhere on Earth for free. Indeed, it means that you could own a palace in every location you desire for free. Lose the value of your home, gain access to every home of your dreams. It’s not just a fair trade. It’s the deal of a lifetime. Umm, what? If you start with "If this all sounds like wishful thinking", maybe departing into even more unhinged fantasy isn't the next step that helps you? The supposition that _deregulation_ could cause the price to go to zero is crazy; houses are built with labor using materials, on land. In the absence of regulation they shouldn't cost significantly _more_ than their labor+materials+land value, but they shouldn't cost _zero_. If you wanted the world where you don't pay for housing, I think you need a _lot_ of regulation -- after all building millions of Stalin blocks took a lot of intervention. Throughout the piece, Caplan seems to assume that the only impact of regulation worth discussing is on prices, which seems suspect. But assuming that the only source of prices is regulation is worse. If you think that NIMBY policies are ultimately harmful, maybe the only thing rougher than talking to NIMBYs is seeing a supposed expert try to argue against them but do it really really badly.

cyberax

I'm a rabid NIMBY, and I know that my house price will go UP when density increases. I don't care. I want to live in my house, not sell it.

bpt3

It looks like this is a poor attempt to argue for deregulation in the housing sector? I agree that this is needed, but regulation would be required to compel neighborhoods to allow increased density as well...

nyc_pizzadev

Not sure this home math is right. Usually home builders are profit seekers, so if they build in a neighborhood of 1MM homes, they will price aggressively against those comps and quality. Let’s say a home goes for half price, then those homes will get snapped up and eventually everything resells closer to the true valve. Given real estate rarely drops a lot in value, that price might be a bit below 1MM.

triceratops

I think NIMBY is an overly generous term. I take no issue with someone who doesn't want higher density in their own, literal backyard i.e. land they own. NIMBYs want to control other people's land .

ndiddy

One thing a lot of YIMBYs get wrong is that you can't deregulate your way out of a housing crisis because of how new housing is financed. Builders depend on outside investors to finance new housing projects. These investors base their investment not only on the land value and potential rent they'd be able to collect when the housing is built, but also how much they'd be able to raise the rent after it's built. This means that when the rent in a given area isn't rising enough to make new housing an attractive investment, new housing will stop being built in that area. A big factor in why housing was affordable for most of the 20th century was the Savings and Loan associations, a product of New Deal era banking regulation. S&Ls were the only financial institutions allowed to take deposits in most communities due to limits on bank branching. They had access to very cheap financing because of regulations prohibiting interest on checking accounts, and limiting interest rates on other types of deposits. They were also only allowed to lend money for local real estate projects. This meant that you had a captive market where local savings could fund local housing development. The system fell apart after Reagan era deregulation forced the S&Ls to compete with national institutions offering higher returns. The S&Ls were pressured into offering higher returns themselves by shifting from residential financing to more speculative commercial real estate projects. The result was the failure of many S&Ls, and the rest of them being absorbed into the larger banking system. The S&L system meant that it was possible to finance housing ahead of demand, which caused a relative decline in housing costs. Between 1950 and 1980, rents in urban areas rose by about 30% less than the CPI as a whole. Meanwhile, in the last 10 years, rents in urban areas rose by about 30% more than the CPI. (see https://fred.stlouisfed.org/series/CUUR0000SEHA , https://fred.stlouisfed.org/series/CPIAUCSL ). Housing prices will always increase more than inflation as long as new housing development has to compete with all other types of investment. The YIMBYs are right that blocking any given building from being built will push housing prices up higher in that area, so new development is overall good for housing prices. What they miss is that deregulation will never reduce housing prices back to what they previously were or lower because developers will never come in and build new housing in a market where rents are stagnant or decreasing.

vkaku

If this were I I'd rip every CD and upload FLACs to the Internet Archive, vibe code a free music playing app and release it for free. None of these restrictive arguments would stop me from doing the next 2-3 steps even, after buying those many discs.