Housing Roundup #13: More Dakka

2023-08-29 · Source: Don't Worry About the Vase · Field: Finance & Economics — Economic Analysis & Policy, Public Policy & Governance, Real Estate Finance & Investment · Depth: Intermediate, long

Summary

The article argues that increasing housing supply is the primary solution to housing affordability, directly refuting claims that it would not reduce prices or that monopolies restrict construction. It highlights former President Trump's explicit opposition to building more housing, citing his desire to increase existing home values. The author debunks the "supply skeptics'" argument that modest housing increases won't sufficiently lower prices, noting that even a 1.5% annual increase in San Francisco's housing stock, while challenging, would eventually impact affordability. The piece also challenges the notion of homebuilder oligopolies, presenting expert testimony that market concentration in cities like Dallas is too low to support such claims. Furthermore, it corrects the misconception that the median homebuyer age is 59, showing data from the American Community Survey and Zillow indicating it is closer to 40-42, and advocates for property taxes to improve housing allocation efficiency.

Key takeaway

For urban planners and policymakers addressing housing crises, prioritize policies that directly increase housing supply. Focus on removing regulatory barriers like restrictive zoning and minimum lot sizes, as these are the most significant impediments to affordability. Do not be swayed by arguments that modest supply increases are ineffective or that homebuilder monopolies are the primary issue, as evidence suggests these claims are often unfounded. Your efforts should concentrate on enabling abundant construction to meet demand and drive down prices.

Key insights

Increased housing supply directly improves affordability across all housing types, despite political and theoretical objections.

Principles

• Supply increases affordability.
• Land value rises with density.
• Property taxes improve allocation.

Method

To increase housing affordability, prioritize policies that enable substantial new construction, such as zoning reform and reduced government-imposed costs, rather than focusing on market concentration or minor interventions.

In practice

• Support zoning reform to allow more housing.
• Examine local market concentration data.
• Advocate for efficient property tax structures.

Topics

• Housing Affordability
• Housing Supply
• Zoning Reform
• Property Taxes
• Homebuilder Market Concentration

Best for: Policy Maker, Consultant, Domain Expert

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Editorial summary, takeaway, and curation by AIssential. Original article published by Don't Worry About the Vase.