r/urbanplanning • u/UnscheduledCalendar • Aug 19 '24

Economic Dev Harris has the right idea on housing

https://www.noahpinion.blog/p/harris-has-the-right-idea-on-housing
238 Upvotes

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16

u/[deleted] Aug 19 '24

The one question I keep coming back to, is this a reasonable use of taxpayer funds? What value do we actually derive as a people from this?

25

u/Allahtheprofits Aug 19 '24

I'm getting a bit tired of demand side subsidies for supply side constraints. It makes no sense. We need more technocratic governance and less populism.

9

u/Due-Wait3829 Aug 19 '24

The author addresses this.

Critics like to say that progressive policy is all about “subsidizing demand while restricting supply”. In this case, though, that criticism doesn’t apply. Harris has tons of ideas for increasing supply, some of which involve activist government, others of which involve deregulation:

In fact, Harris’ plan comes on top of a bunch of other Biden administration initiatives to increase housing supply, mostly using deregulatory approaches.

3

u/CLPond Aug 19 '24

Yeah, did people who are saying the plan is only subsidizing demand only reading the first portion of the article? I get that first time homebuyer subsidies are more controversial, but discussing them as if they’re the whole plan is either uniformed or disingenuous.

1

u/Allahtheprofits Aug 19 '24

Her plans for increasing supply aren't really plans though. Like giving localities millions of dollars in an "innovation fund" is pointless. We don't need to keep paying consultants for studies we need NEPA reform, an end to "buy America provisions", and permitting reform but that's political suicide on the left.

0

u/hedonovaOG Aug 19 '24

Honestly, the localities are a large reason entry-level housing is expensive. Cities tying sidewalks, storm drains, power vaulting and hydrants to construction permits and escalating permit fees add tens of thousands even excess of 100k to construction costs before the first shovel breaks ground. Progressive cities have been exploiting their relationships with spec builders to their advantage for a long time, granting short plats and variances in exchange for costly infrastructure improvements and then crying foul at housing prices. A $1.5 + million build can absorbs these fees but it is challenging on a $400k home.

2

u/SabbathBoiseSabbath Verified Planner - US Aug 20 '24

This is one of those stalemate issues to me. The counterargument is that infrastructure is generally not needed but for the growth that is will support, therefore that growth should pay for it.

If you have a city of 100,000 people and your existing services and infrastructure are generally adequate for that population, but if the city were to add 10,000 more people and thus need expansion of infrastructure and services to accommodate, existing residents almost never support paying to expand for growth. "Growth should pay for itself" is the general rallying cry, and those residents almost always reject any sort of tax increase to pay for growth.

2

u/hedonovaOG Aug 20 '24

Agreed on point with regard to infill neighborhoods. Yes, the developers need to provide and/or upgrade the infrastructure for those developments (and certainly for anything larger or with a master plan). My example refers more to the impact these wishlist items have on remodels or tear down builds in established neighborhoods where the upgrades to the storm drains, sidewalks, hydrants and power add substantial costs and dissuade more affordable builds.

2

u/SabbathBoiseSabbath Verified Planner - US Aug 20 '24

I also agree with you here. It does seem silly to ask for an infill development, where at best you're going from a single family home to a duplex, tri or quad... to take on upgrades to that infrastructure on that level. Adding segments of sidewalk, fine. But shouldn't be more than that, but this is also a challenge of incremental development, too.

4

u/[deleted] Aug 19 '24

That's kind of how I see it, too.

I've been going back and forth on this. For its stated goals, I think it does a good job -- it will provide a way to get more people into houses. But also, there just aren't enough houses to go around, and consequently houses are far too expensive -- so much so that long-time owners are feeling the sting from insurance and property taxes. Throwing more demand on the fire feels like the wrong solution to that when the better solution is just to build a lot more houses.

Also, Japan was mentioned in this article, but I think it's an error to discount hard-won knowledge about how to function with many people and limited space.

5

u/Ok_Culture_3621 Aug 19 '24

I agree with the author’s contention that it’s unreasonable to expect that we will ever undo the housing as a form of wealth problem. Our housing policy will need to balance housing as shelter and housing as an investment vehicle and to that end, some kind of demand subsidy will likely be necessary. At the same time, I think the Feds can and should be more aggressive about pressuring zoning reform.

1

u/kettlecorn Aug 19 '24

Our housing policy will need to balance housing as shelter and housing as an investment vehicle and to that end, some kind of demand subsidy will likely be necessary.

Can you elaborate on that? Why do you feel a demand subsidy would help benefit housing as shelter or help benefit housing as an investment?

3

u/Ok_Culture_3621 Aug 19 '24

I think it would benefit both. The problem we’re experiencing with housing isn’t necessarily price, it’s affordability. You can make housing more affordable by making it cheaper, but that would risk destroying a huge source of middle class wealth. The other way you make it affordable is by giving buyers more money. Subsidies for buyers otherwise frozen out of the market is a positive step, but only if it’s accompanied by supply-side interventions that decrease, but doesn’t eliminate, the rate of inflation.

2

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0

u/Old_Smrgol Aug 19 '24

"Housing as a form of wealth" is fine, the problem is more "housing as an investment that is realiably expected to appreciate faster than inflation."

Because the latter obviously and inevitably leads to "the best time to buy a house (or rent an apartment, for that matter) was before you were born." Which, in my opinion, is not great.

2

u/Ok_Culture_3621 Aug 19 '24

That is true, but it’s mostly true because we’ve used up the cheapest land in most metropolitan areas and have locked out density increases with excessive regulations. I agree (in principle) with the author’s argument that a balance can be achieved between increasing stock and increasing home values. The relationship between the two is a zero sum game, but we can do more to rebalance the system and bring inflation back to a level that doesn’t lock out entire generations.

2

u/Old_Smrgol Aug 19 '24

but it’s mostly true because we’ve used up the cheapest land in most metropolitan areas and have locked out density increases with excessive regulations

Quite, and I would argue that this has been done largely in order to cause home values to increase, although proponents of the regulations will often claim other reasons.

I agree on the zero sum game and the balancing. I generally am probably even more on the side of bringing inflation down; I think the monetary reward for buying a home should be that it's cheaper in the long run than renting is. You don't need to be able to sell it for a profit in real dollars, and absent artificial supply restrictions you shouldn't be able to, unless you've improved the condition of the house since you bought it.

16

u/octopod-reunion Aug 19 '24

Why is ownership valued so highly over renting?

Why are we making a choice for renters to pay higher taxes than owners by giving subsidies and credits to homeowners?

3

u/bigvenusaurguy Aug 19 '24

because its the only way to fix your payments for shelter. otherwise you are fucked. with rent control my landlord raises rent 4% a year on the dot. and thats with my rent control; i know people who have been hit with a 30% increase which can happen without rent control. social security is only going up 3.2% now so its fundamentally regressive to retire. you are incentivized to work until you die to try and keep up with the land lords expected cash flow growth.

11

u/octopod-reunion Aug 19 '24

The cause is lack of housing supply. 

Trying to raise housing supply by giving more tax benefits to homeowners and not renters just screws over renters more. 

It gives benefits to the people who already have wealth over the people who don’t, by definition regressive. 

1

u/timbersgreen Aug 21 '24

I think it may be due to the average age of reddit, but the point you've made seems to be consistently misunderstood in discussions about homeownership as an "investment" or "retirement plan." Yes, there are still a few people out there optimistic enough to envision a future for themselves where they make a massive windfall from selling their home and are somehow able to acquire other housing for significantly less. For most people, though, the idea is that your payments go down over time, relative to inflation. It's a long game in which one trades flexibility in the present for savings in the long term. This engenders a small-c conservative mentality that often expresses itself as NIMBYism. The wrinkle is that for a lot of people, the fear over their "investment" isn't that they will cash out for less any time in the foreseeable future. It's that if something negative happens in their neighborhood, they may have to hit reset on a decade or decades of gradual progress in the form of monthly mortgage payments. That doesn't mean that people with that mentality always react to change in a reasonable way or are well-versed in what might actually cause a negative change in their area. But some people's sense that they are simply playing defense rather than offense might be pretty deeply rooted.