Learned that in SF bay area in the 1980 as a student renter. My landlady complained her three grown children can't find housing near anywhere her. I told her about building restrictions that she, by default, supported all her life. It was a shock to her that a young guy could teach her something about real estate.
This really feels like his old weekly show, which was excellent. His podcasts are great too (I probably like his SciFi podcast more than his politics one), but his old weekly show had segments mixing up sketch comedy, stand-up, and commentary. Was really great.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with a fiduciary financial counsellor, my advantages were certain. I got into the market early 2019 and the constant downtrends and losses discouraged me so I sold off, got back in Dec 2021 this time with guidance Long story short, its been 2years now and I’ve gained over $860k following guidance from my investment adviser.
@@MarkFreeman-xi3rk Interesting Mark. I've been thinking of going that route been holding on to a bunch of stocks that keeps tanking and I don't know if to keep holding or just dump them, do think your Inv-coach could guide me with portfolio-restructuring as i wouldn’t mind a recommendation.
Actually, I've shuffled through a few advisors in the past, and “ Margaret Johnson Arndt” remains the most resourceful thus far. Her strategy proves profitable, and sustainable both in a bull & bear market. Most likely, her deets can be found on the net, so you can confirm yourself.
Insightful... I curiously looked up her name on the internet and I found her site and i must say she seems proficient, wrote her an email outlining my objectives. Thanks for sharing.
It's a tiger's ride. People buy only affordable houses, then want the value to go up so they can sell and move away when they retire. But the more expensive they are, the fewer people can buy them, the harder it is to sell for enough to move away. The biggest practical problem with abandoning zoning is all the underwater mortgages. If my home value went from mortgage + 50% to mortgage / 2, I'd sure consider walking away. Imagine renters all moving out because the new apartment building was half the cost; landlords would default. Having started this tiger ride, I don't see any way to get off without a lot of hurt.
And the real estate lobby has TEETH. People with houses VOTE. People who don't... don't. And if you're the guy they can directly point to who lowered housing prices? You'll be a one-termer. A glorious, motherfucking HERO of a one-termer.
This is the problem we face with a great many government interventions. Imagine saving for a decade to finally get a house, you take out a mortgage, and then the zoning laws are repealed and they place a massive apartment in your backyard. Suddenly you're underwater on your mortgage because your home value plummeted. It's like this whenever the government meddles in a market. People restructure their finances around the new intervention, and now repealing it will mean everyone who built their finances upon it are screwed. Now I still think reducing zoning restrictions is a good thing and we need to do it for long term sustainability, but there is no denying that we are essentially asking the middle class to harm their assets for altruism. Most people aren't willing to do that. We can hate the NIMBYs, but I don't think we'll make any progress on the issue if we don't at least recognize that it's more than just some evil rich people trying to keep themselves rich. It's more often than that middle class homeowners who see the real prospect of something they worked most of their life to achieve being rendered worthless. If the government hadn't meddled in the first place, we wouldn't be facing this problem, but here we are.
@@LDSkinny i mean, yeah, but "government meddling" is the name of the game, and by "game" I mean human history. Usually on behalf of evil rich people and very often against the middle and lower classes. Housing becoming "an investment" as opposed to "a place to live" is starkly to blame here, and say this point as soon as older housing stock re-enters the market due to its occupants dying or moving, the only people with the wherewithal to afford it are those evil rich guys, who subsequently hoard it into their portfolio and put it up for rent, because that, too, is in their financial interest - the health and future of the ephemeral middle class be damned.
The emerging alliance between libertarian free-market supporters and leftist urbanists on housing density is an exciting development for improving American cities. In Washington state, for example, the recently passed law banning single-family zoning in the state's cities had broad bipartisan support.
id limit zoning to five different kinds of zoning rural (mostly so buildings dont tower over someones farm preventing them from having crops only refers to useful farmland) suburban land that cannot support physically and will cave in with housing under a certain size urban land that can support more stuff, technically mountains and desert can be labeled urban if thats what is structurally sound to build there) hazardous food; namely slaughterhouses hazardous nonfood: chemical factories, landfills this is pretty much the closest thing to abolishing zoning restrictions i think this policy would fix nearly everything
I don't agree with Reason on 95% of political issues under the sun. But on this crucial imperative issue: the cost of housing, I and many others are more than happy to make a pragmatic alliance that focuses strictly on what we agree on while agreeing to disagree on what we don't. This is how issues-based advocacy works and used to work (looking at you ACLU, NRA, Planned Parenthood!) and represents politics at its best
Sounds like the de institutionalization era, that worked out great, right? Right? We nearly eliminated psych facilities and instead increased prison populations and homeless shelters… brilliant. Zoning has been weaponized and is problematic, but there are “natural” locations for high density housing, based on holistic planning, for instance, grid streets (not meandering suburban ones) with public fixed rail transit, plenty of parks, etc. As a counterfactual it makes virtually no sense to randomly drop a high density multifamily home in a low resource low service semi rural suburb (like say northern Westchester NY, and not near the river), but in a housing crisis caused by nimbyism in NYC or downtown white plains, a developer will build in the least useful place with nearly no organic demand. Additionally, it’s a bit silly to call protecting neighborhood character JUST about sterile housing values, or racism, people move to places for what it often is and like it to stay that way (especially if there is no where else to move that would recapture that essence because of similar upzoning), and it is tone deaf to ignore urban crime and pretend as if suburbanites have no valid reasons or concerns for bringing that to their neighborhoods (density doesn’t ordinarily equal crime, but it can)
I think a housing crash will happen because all those people who bought homes over asking price, although it was at a low interest rate, they are over their heads. They have no equity if the housing prices continue to go down, and if for whatever reason they cannot afford the house anymore and it goes into foreclosure because even if they try to sell, they will not make any money. I think this will happen to a lot of people especially with the massive layoff predicted for the future and the cost of living rising at a high speed.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
You are right! I’ve diversified my $150K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $330k in net profit across high dividend yield stocks, ETF and bonds.
@lowcostfresh2266 In fact, I'm not sure whether I'm permitted to say this, but I'd suggest searching for Laurel Dell Sroufe as she gained a lot of attention in 2020. She is both my coach and the manager of my portfolio.
@@TomD226 Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
As a Real Estate agent and investor, I have been saying this for years! Nonsafety-related regulations and zoning restrictions create unaffordable housing, which leads to increased homelessness in the long-term
If you’re also concerned about exhaust gases from transportation, guess what? Zoning restrictions make distances bigger between your potential destinations in the city because you’re not allowed to build up. So more individual houses next to each other make cities expand horizontally instead of vertically.
Ottawa's green ring did exactly that. They stole family farms and left a useless area, not wild, just abandoned, between the city and the new dense suburbs further out.
I actually did something about zoning a few years ago. An adjacent 0.75-acre empty lot was zoned for some townhomes, but was opposed by neighboring townhomes on the other side. (I own single family home.) I went to the zoning hearing and gave an unsolicited case for property rights, using standard libertarian arguments. This impressed the board and also the neighbors who initially opposed. I also said that my preferred land use would have been a donut shop, but for that I would have needed to purchase the lot when it was on the market. This is how an individual can affect a little part of the world.
Today, each town home unit has 7 to 10 illegal immigrants living in it with vehicles parked on the street and green space along with a weekly shooting. You're a bastard for allowing this. Why do you hate America? Why do you hate local control? You're a disgraceful fascist.
The constant change of increasingly restrictive building codes are driving up the cost of new construction. Each year new codes are added. They increase the complexity and cost of building a new home or apartment. Certainly some level of standard is needed but it is getting ridiculous.
seems like the fire codes are the most arcane and difficult to understand but they're not the only bad apples. not only are codes changing and restrictive, they are not clear and require the interpretation of local building officials, which can add a lot of cost, especially if the official changes his mind after construction is complete. a few years ago an official issued us a statement saying wood trusses bearing on exterior wood walls of a 5 story building was okay. we completed the structure and then he said it was not okay anymore and made us add another layer of exterior walls around the whole perimeter.
Building codes are there for a reason and I think they are for the better in the end. I base that opinion on the code-free 1940's wiring in my house. There's no GFI and while everything appears to be going to a breaker I wouldn't be one bit surprised to find that's not the case
@@2x2is22 I heartily agree that a certain level of building code is necessary. However there is a point where it goes beyond safety to a degree of absurdity. As in all bureaucracies, they never get smaller or even remain the same for any length of time. There is a constant growth (creep) and each new code adds cost to the construction. The combination of building codes, ill informed legislation, and lawyers who will sue over anything you can imagine has driven the cost of new residential construction to over $300 per square foot in some areas of the country.
I think that's only part of the problem. The federal reserve held interest rates far below the neutral market rate for a decade, allowing individual buyers to leverage higher into prices while maintaining lower monthly costs. Eventually firms noticed that they could earn better returns on housing units than bonds, and profligate REITs started purchasing whole neighborhoods. With higher interest rates (but still not touching some versions of the Taylor rule) we're seeing housing cool down. Unfortunately bubbles don't pop slowly, so we may see a wave of unemployment and forced selling soon (look at the 10 y to 3m spread).
I assumed we'd see a housing crash. However the supply is very low due to people not wanting to give up their sub 3% mortgages when they sell then have a 7% when they buy their new home. Therefore people are staying put and not listing their homes keeping the supply low.
@@mattcolver1 In general, I think the way this plays out is that we see zombie companies unable to roll over bad debt, which should lead to an increase in unemployment. As workers are unemployed and unable to make mortgage payments, we should see a wave of forced selling that lowers housing prices. In some strange way, I think the fed is banking on this happening. As long as employment stays high, the velocity of money should remain elevated (who saves rapidly devaluing money?), leading to stubborn inflation levels in spite of decreasing m2 money supply.
@@GRNBaseball10 trouble with that is that the ones best positioned to take advantage of that are big property management companies, they'll just buy all the newly available housing.
Boomers LOVE HOAs, since it ensures property value over their own freedom to use their land. Unfortunately, with open borders we now have, folks are likely to double down on HOAs in order to prevent literal riffraff from living next door.
HOAs are messed up. Because the original homeowner 40+ years ago signed into a contract, now YOU are in that contract, too? It violates basic consent and common sense. And nothing can ever remove that HOA agreement. That house will always be under the HOA tyranny until it falls apart. That's insane. HOAs shouldn't have any legal standing, it's just asinine.
Zoning is just legal classism. Overt classism. As someone trying to build an affordable house in a US county that represents the epitome of every stupid policy you’ve talked about in this video, watching this makes me want to cry 😭 Classist policies that prevent a professional couple who makes 170k a year from building a home (my husband and I) is a bit of a red flag that this shit has gotten out of hand!
You might believe you’ve earned your way into polite society, but the people who already own real estate don’t see it that way. What else is class and status for but keeping you in the favela?
When people started thinking of their properties as an investment more so than just a place to live we set ourselves down this path. People don't want to hurt their "investments" so they'll do everything they can to stop them from going down. Like you said artificial scarcity and NIMBYs have stagnated new developments and it's crazy how far property values have snowballed because of it.
@avi8terrfwg317 No single-family homeowner is going to be "packed in like sardines". The next door apartments may be, but single-family homes will still be spread out.
The consequences of de-zoning (which I do support) is that places like the outskirt of cities like Houston where houses sitting on multi-acres of land will skyrocket because those becomes more sought after. I like having a yard for my kids to run around and not having to hear my neighbors arguing. Had enough of that when I was still renting apartments. Many counties In tx if you got 10acres of land or more, you can shoot any kind of firearms on it as long as you got some way of catching those rounds and it doesn't go into your neighbors yard.
So some people don't want more neighbors. And you know what, fair enough. The issue these people fail to realize is that they're going to get more neighbors whether they like it or not, the real question we have to ask ourselves is "would I like my new neighbor to live in a large apartment building, or would I rather they live in a cardboard box in front of my house and poop on my sidewalk?" If you really want to get away from people, go live in a rural area.
Either way breeds more crime, people dont have to coddle the mentally insane or the lazy who fail to grow in life. Theres plenty of land in the US, most cities arent constrained like Pinellas country (St. PETE) FL where theyre constrained by water on 3 sides. Just because there is restrictions inside city limits, doesnt mean there arent areas outside of city limits that would allow for all the mini-homes and apartment complexes the developers could desire. The problem with this video is Heaton started calling for the state to build the homes, thats not very libertarian.
@@Todd_Swank The issue is you can't just live anywhere. While sure many businesses are cutting back on office space, often times people might still have to come into the office 1 day a week meaning you still need to live in cities with jobs, not just wherever is cheapest. Cities with the worst cost of living crises often have many more new jobs added to the area than new homes. And the farther out we build, the more infrastructure we need. More infrastructure means higher government spending, which isn't very libertarian. Also, telling other people what they can and can't do with their property isn't very libertarian. The "public housing" mention was for the centrists and non libertarians watching the video. He didn't support or oppose it. Regardless, those people should also oppose zoning even if they are not libertarians since it hurts their causes.
Enter urbanization. Rural folk are already getting upset that they are turning into suburbs. It does not seem fair for someone to pick a place to live that intrudes on the current habitants’ values. Making the people who were there first move out or give up their lifestyle…“If you really don’t want to live near the British colonists, give up your homeland and live in the desert.” “If you can’t afford the rent hike then you should live somewhere cheaper.” Many zoning decisions are stupid bogus, but giving precedence to invaders is pretty well established to be a dick move.
@@Nitsirtriscuit Do you know what speeds urbran sprawl? Preventing density inside cities. If I can't build a 100 story residential structure in the city, I'll just buy a plot of land from Farmer Jones outside of the city and turn it into a 100 house single family home subdevelopment. By trying to prevent density with things like zoning and height limits, you've made the city spread out much further than it really needs to.
False equivalency. The people pooping in the sidewalk are not doing so because they can't afford apartments/housing. Those are the drug / mental patients of the world. You have poor homeless but they aren't doing that
I’m in Michingan and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal portfolio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $350k since then.
I've been in touch with a financial advisor ever since I started my business. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $900k in a little over a year, my adviser chooses entry and exit orders.
@@maryHenokNftKudos on the effective execution of innovative ideas and tactics that lead to significant advancement. As I seek guidance from a trustworthy advisor, would you be willing to share details about the individual assisting you?
I'm actually rather surprised you called out Minneapolis. Because, in 2018, it became the first major city in the US to ban single-family zoning. And in 2021 it eliminated parking minimums for multi-family housing. As a result there was an explosion of apartment buildings across the city. And the building trend still continues.
first thing that needs to be done is to get rid of immediately the legal distinction between commercial and residential property, that and you should be able to build whatever residential or commercial building wherever as long as the long supports it and you arent randomly building it near a bunch of farms.
In Denton, TX, they’ve been improving the housing situation a lot. A bunch of new multiplexes, as well more compact houses have been popping up, with a lot more planned or under construction. I think this will really help Denton rise from the ashes and become a greater city.
I live in a city without all these senseless zoning laws. I got a 2 bedroom apartment for only about $400 per month. I literally made ends meet while working in a hardware store and living alone.
Love it. To be fair, you should've added one thing though: city services. Sewer and electrical infrastructure need to be able to handle the increased load. Sometimes that can be the bottleneck.
That's a fantastic argument for allowing density. The cost per home for roads, sewer and electrical is almost 2 times as high for single-family homes as it is for duplexes. Just duplexes! That drives up how much per home needs to be charged in taxes/HOA to sustain it, which is another cost of housing.
@@newlin83 Yes, these are complex issues and we need to figure out what we want to optimize for; but in this case it's not clear how to optimize for that even if we want to. In the US, birth rates are declining rapidly, and people are taking longer to start dating, have sex, get married, and have kids. Economics play a huge role here, but I believe so does that fact that it's impossible for anyone to independently socialize when they're old enough to be somewhere alone but not old enough to drive themselves there. If the family is wealthy enough to have mom not work _(while_ paying to live in a single-house lot), then the kid will have pretty good opportunities for soccer-mom to drive them around; but if mom has to work, then the kid will be stuck alone at home (terminally online) in their teens. I won't make a strong claim here, but it's not _obvious_ to me that this is a better environment for population growth than adding in some density.
There would be massive deflation in houses if we would fix the tax code and get rid of that depreciative tax loophole that allows you to write off lost income from unren rented or unoccupied homes.
Doesn't address why those buildings are unoccupied (they can't all be evil landlords). I mean you can buy a house in Detroit for the cost of a DVD player. Owner can't afford to install a new $10k HVAC system just yet and you want to take away depreciation on top of? Just Land Value Tax (which heavily influences code), and be done with it.
Here's our office building. It's vacant now because all the office employees are working from home. What if we converted the offices into rooms and rent those rooms out to our employees? Yes! They'd still be working from home, but we can make money off them too. Seriously, long before covid, I had a corporate type job that I use to joke about how I would work more for the company and be "on-call" if I could live in the office. Like section off a little area for my room. The office had a full bathroom and showers and a kitchen with a stove and fridge. The office had internet and cable and a tv and computers, plus maid services. And the company was always bringing in snacks and drinks for employees and sometimes stuff like pizzas. So I was like "seriously, let me live here for free, provide me with food and sodas and I'll do what you need me to do and you won't even need to increase my salary."
Historical zoning can actually be quite helpful for frustrating eminent domain. It's kind of beautiful setting one part of government against another to get them to leave your property alone.
Counter example: An ocean front house near Carmel CA was storm damaged. To rebuild, the owner had to do the impossible, meet current building codes and maintain the historical character. The case went on for years with the owner unable to live there.
When my grandparents started their custom home business the cost per square foot was, adjusted for inflation, about $75 to $125. That cost in the same area is now around $400. In my grandparents day, people had single pane windows, drafty homes with practically no insulation, only a handful of electrical outlets, etc. and the average size of a home was overall much smaller. The average home has since doubled in size, dual pane windows, good insulation, housewrap, requirements for electrical outlets, etc. have vastly improved the energy efficiency and living quality of homes along with the expense of building them. Zoning absolutely plays a role, and a huge role at that. Zoning often requires a minimum house size too. You couldn’t build a tiny or even small house where I live.
$125 per foot for your grandparents? That's outrageously expensive. Or, maybe you are just 5 and your grandparents were born in like 1975. When my grandparents (both sides) bought their first homes (that had room for 5 kids), they were freshly built and cost less than their cars - which cost about $5k. Both homes are still up and wonderful shape - no renovations. The floors don't even creak.
Building higher density is not all in all the solution. Come to Portland Oregon; we are building high density like crazy. I see single occupancy homes torn down and an apartment complex or townhouse are built on the land. In fact, Metro has changed zoning to where one cannot even build a single occupancy home, have a large yard and a car garage. One should expect land prices and rents to be lower but the opposite: housing prices and rents skyrocket. The reason is the urban growth boundary and regulation has made land artificially scarce and expensive.
Interesting. If I understand you, that sounds like a similar issue in a different flavor. Trying to research it took me into the weeds a bit, where I'm reading about what an R5 vs R2.5 zone is and lot shapes. Nevertheless, according to Statistica's data on new residential construction per capita, Oregon is only in about the middle. Well ahead of stubborn east-coast States, but only half of Utah, Florida, and Colorado.
I thought that the NIMBY acronym became obsolete when enough former NIMBYs admitted to what they really wanted, and the acronym was changed to BANANA: Build Absolutely Nothing Anywhere Near Anything
Had neighbors of the NIMBY variety when I lived in Los Angeles. One of them was trying to get signatures in support of anti high rise zoning. I told him I was pro free markets and against telling other property owners what they can and can't do with their own land. He answered that promoting zoning was free market. Glad I no longer live there. So many feign caring for the poor and marginalized while being control freaks and actively making those people's lives impossible.
Is there are no any land in Los Angeles who didnt use? Why i ask this? Because zoning cant chnge it because of the nimby. So the other solution is gov must built another housing problem for people far from nimbys plus build a train so its easy to commute from there house to city to work.
@@carloconopio6513 Los Angeles is extensively developed. The nearest empty, unzoned land is over a mountain range and dozens of miles away. Government housing is notoriously bad. New train routes are hindered by heaps of regulations and can take a decade to build, all while going wildly over budget. One of the subways has been undergoing an extension underneath Wilshire Blvd since 2019, wreaking havoc on traffic with the construction, and is still not complete. Aside from that, with the rise in mental illness and crime that I've seen while riding metro, I'm done with public transportation in this city. Outside of LA, there are plenty of private developers working on new housing. It's so far away, though, that we're talking one or two hours to get into the city, and that's outside of rush hour.
Also consider that it is to the best interest of local and state authorities to have property values continuously increase, that way they can continue to collect more property tax revenues from the same small pool of properties without having to raise tax rates or even lower them a little to appear magnanimous!
The irony of that is according to Urban3, higher density and mixed land use have a higher value per acre than detached single-family homes, strip malls, and big box stores.
@@TheFarix2723 Yes, but the smaller population is also a factor, if the population remains small and does not grow then you won't need new utilities and services. You won't need to build new power plants, sewage plants, water treatment plants and won't need to hire more police, road repair workers, teachers and emergency workers. You can make do with the hospitals and staff already built and not have to build new schools. The only thing that grows is the income from property taxes. This then allows the "authorities" to increase their own income for having done such a spectacular job!
@@DanielGonzalez-cs8pr Dead on. Many people seem to forget that adding another 1000 people to a city block is adding all the extra waste water to the same 6 inch sewer pipe that was buried 100 years ago.
@@TheFarix2723 -- IIRC, they generate more tax revenue per acre, which isn't quite the same thing as having a higher value per acre. I take your point, though. It's not clear to me how the government would be able to extract a rapidly increasing amount of income from residents of single-family homes, since those families' wages would need to increase by the same rate in the long-run.
Zoning may be part of the problem but I don’t think that it’s entirely the issue. Big corporations building more Apartment buildings or converting Commercial High-Rise buildings in to residential units which both are likely to be rental only, is the problem. What I think would work is to prevent corporations from purchasing massive amounts of homes and Air B&B them to make them generate money to maintain upkeep costs while waiting for the market to drive up costs. I’m fine with people purchasing a new home and waiting for the right price on the old home. But when companies as massive as Blackstone that can buy thousands of homes in a week can do it, yeah that’s a problem. Otherwise they will continue to build new mid-rise apartments in major cities while buying up houses on the market to make sure they get your money one way or the other. With a higher rent or more exorbitant price tag on that home that hasn’t had any upgrades in the last 10 years. There are more empty houses than there are fully employed homeless people by a ridiculously large margin. It isn’t a supply issue.
_"There are more empty houses than there are fully employed homeless people by a ridiculously large margin."_ Do you have a source for that? Also, are most these houses within a reasonable commuting distance of jobs? If not, then it's at least partly a zoning problem. That said, I agree that Blackrock and others engage in rent-seeking like the kind that you describe, and that it does artificially inflate housing prices.
This is entertaining and in most respects accurate. Regulation and zoning do create issues. What he does not explain is that the approval of greater density or multistory buildings makes the land more valuable; so, land prices go up accordingly. The end result is that the asking price for the completed "residential property" will be as high as if the zoning density was not increased. Economists have long understood and written about the solution: exempt the value of housing units from property taxation; and, instead, impose an annual tax on the value of land equal to what the land would lease for under competitive market forces. This will bring down the selling price of land and allow housing units to be constructed that are both affordable and profitable for the developer. So, yes, deal with the zoning issues but also get to the systemic problem caused by the conventional property tax.
Interesting response. But would that potentially increase the tax for a low-value house on a high-value property? If you have a mansion next door to a shack, and you calculate only off the land value, they both pay the same tax. I'm not sure I like that.
@@notme222 Every community experiences changes in what is described as "highest, best use" of the land in the community. Land around most cities was once agricultural. Commuter rail lines, then highways changed highest, best use to housing, retail, offices, hotels, etc. etc. Along the way many households living in small residential properties find their taxes going up as assessments rise. Some (sometimes many) are forced to sell out and try to find a lower cost residential neighborhood to move to. There are other economic issues involved as well. The exemption of property improvements from the tax base in favor of land value will attract development where development is most appropriate, which is where infrastructure already exists. Sprawl will be reduced. More jobs will be created, etc. etc. etc.
The one that sticks out for me is not being able to convert high-rises or businesses into living spaces. With Covid and WFH, that ruling has to change.
It's economically impossible to convert business spaces into housing because it requires installing plumbing and utilities. The result is a space that costs 300% more than market. It's far cheaper to demolish and start fresh. Unfortunate but true.
@@philfortner1805oh no! It takes water and electricity where can we get that from? Maybe. The fucking building that has it. The plumbing can be changed and outlets moved and now you don’t have to destroy the entire building so you can hire your friends business to rebuild it.
Update: I found one that does this custom on Esty. I changed a few phrases, It came in the mail yesterday and is now in my front yard. I giggled for at least an hour after I put it up
They keep telling me that we need government to "level the playing field," but in most cases, government regulations are used to UN-level the playing field. The power structure of a government naturally attracts those want to use the power of government for their own personal interests. Making government bigger and more powerful just ups the political stakes. Also, we need to make "NIMBYs In My Barbecue Yard a thing. That is all.
You are correct that zoning and permitting artificially increases values but the main culprit is Fannie Mae and Freddie Mac. The ability of massive numbers of uncreditworthy people able to buy homes only happens due to government backstopping all the risk. Backstopping the risk exponentially increases all the demand because nobody selling mortgages can lose. Prior to this policy homes cost about 2.5X less. Add in the modern technology building homes today and homes actual value is about 5X less than the mean value in 1920. Why 1920 you ask? Well that was the time in America before printed money from the government to buy cool stuff entered the system. As each dollar was created it devalued all the other dollars. And now here we are where a 2 bedroom starter home costs $380,000 when it used to go for $120,000. The only realistic solution is to await to dollar to collapse and a Bitcoin standard to take over the entire world. But it's digital and as such will happen quickly once it picks up.
Dangerous nearby factories n stuff wouldn’t need zoning laws either. If someone can prove that the land is causing danger to other people in other plots of land, that could be considered ruining those other lands. So factories that make noise or release harmful gasses would need to either have permission from the surrounding land owners or own that land themselves. If a park is near a dangerous forest, less people would go there and therefor lower incentive to have one there in the first place.
Zoning regs and "historical" designations are often abusive, but you're wrong on a few major points: Lots of zoning regs aren't about houses-as-investment, they're houses-as-I-want-to-keep-living-here. Someone who buys a home in a neighborhood of single family homes probably doesn't want to live next to an apartment building because of noise, smell, traffic, crime, etc. That restriction can be enforced via local government zoning or through private Home Owner Associations, but the intent is that folks living in those houses want to keep living in those houses - it's not always about keeping prices high so they can sell and move. Also, there is plenty of cheap housing in Flyover states, and even in coastal states outside commuting distance to the Big City, moreso because the demand is much lower rather than dense supply -- on the reverse, we could double the housing supply in NYC (lot more toilets flushing every day) and it still wouldn't meet the demand of people who want to live there. Some places are just going to be expensive and Build Baby Build isn't a viable solution for that.
Why isn’t a viable solution if people want there little castle in the major metropolis then they should consider moving to states like Mississippi or other flyover states where they have plenty of land and people like them
They only thing they’ve done in Columbus for several years now…Is build apartments/condos on any patch of ground they could find. Even better put in some retail on the first floor…living space above. EVERYWHERE….I’d really like to know the occupancy rate in these new builds
My hometown in Texas is reasonably big and has no zoning laws. There's a quite nice apartment building in the middle of most neighborhoods, and houses are much more affordable.
Waiting to see Strong Town values make it to Reason. It would make a great sequel to this excellent video. Zoning laws make cites less walkable, more car dependant, and less livable for lower income folks!
I remember growing up and having the little corner stores you could just walk to and get milk, lollies, meat ect. You could walk and get your lunch. Now it's all segregated from residential and most people need to get in a car and drive to some place to do all that. I don't want it change though, I brought a house in an area that had nothing, it was cheaper. Now they have reclassified the area down the road and in comes all the shops.. now my house has tripled in value, even though it hasn't changed.
And the tens of millions of home owners would never allow this to happen because they don't want their home values to drop. The system is as designed. How many regulators own property? Who would be willing to make these changes knowing their home value and those of their constituents would plummet?
Land use regs are a huge problem, but even in as of right market’s like NYC, the bigger issues is a combination of approval, permitting, inspections, etc. it can take 3 years just to get plans approved…
Over regulation is a problem but so is allowing investors, particularly foreigners, to buy up real estate in major cities and then sit on it doing nothing.
Colorado has rules that you can't build on property of less than 35 acres without county approval. Where as in Michigan, you can have a one acre lot with a well and septic field, so very low cost infrastructure for a house, in Colorado, to build housing you will have a municipal water and sewage systems, very large residential road, a lot of space allocated to parks and open spaces that the HOA will be obligated to water. Much of the land in the metro area was diverted to "Open Spaces" back in the 1980's and 1990's, to avoid the distinct communities from blending into a seamless expanse of suburban sprawl. The result is lots of nice views, and few trails that are barely used but commutes are longer and houses are more expensive for everybody.
In the county where I live they proposed a bil/law/ordinance to keep spaces open. Essentially make so people can't build on hundreds of acers. I saw right through it and voted against it. I live in northern Utah where housing is insane expensive. 200K more then in Texas on median home prices. Anyway the law passed and now people who complain that housing is expensive don't realize it is their own dang fault.
The city I live in is definitely pro growth. Multi family apartments and condos, huge new neighborhoods of single family homes, yet prices are still skyrocketing.
a lot of it has to do with interest rates, but it also has to do with all the NIMBY idiots that move into small towns, build uber rich "inner-communities" and basically shut out ALL future development once they get established because they feel like they can just shut the door now that they've come in and will cry to city council every time a new developer comes in
id limit zoning to five different kinds of zoning rural (mostly so buildings dont tower over someones farm preventing them from having crops only refers to useful farmland) suburban land that cannot support physically and will cave in with housing under a certain size urban land that can support more stuff, technically mountains and desert can be labeled urban if thats what is structurally sound to build there) hazardous food; namely slaughterhouses hazardous nonfood: chemical factories, landfills
The biggest problem with real estate is all land isn't equally desirable...and yes a lot of vacant office buildings happen to be on very desirable land.
I have the solution. The government should simple pass a law stating that you can only charge a certain amount of money for a house, say, $100 dollars per square foot, then force all land-owners to price their homes accordingly. Also rent should be limited to whatever the government determines is fair. This will surely solve all of our problems and have no unintended side effects. Gosh I am so intelligent.
You seem to have missed the angle of what structures builders are inclined/incentivized to build, based on say price per square foot vs. cost per square foot.
Wait until you find out what's going on in Canada. Here in Vancouver it takes three years to get an approval to build a detached house without any rezoning.
Well zoning is one of the bigger inflationary cost. I believe the other huge one is zoning code creep. The energy and safety building codes have added an incredible amount to the cost of a home.
Supply and demand is obviously the cause of increased housing costs, but it is not down to zoning, or restricting new building permits. Think about the way we use the housing we have. I live in a 3 bedroom house with my dog. My street has at least 10 other houses of similar size with the same single occupant. Very few houses are fully occupied. Now, think about how we used housing in the past. I grew up in a 3 bedroom house with 2 parents, 5 siblings and 2 dogs. Both of my parents grew up in smaller houses with even larger families. The idea of a spare bedroom was completely foreign. Not only do most people take up more space than before, but we need more and more space for our stuff. We fill our under-occupied houses, then have to rent storage space to house our ever expanding stuff. Yes, we need to change zoning laws, especially reducing set-backs and allowing multi-use developments, but the amount of space that each human occupies has grown exponentially, regardless of zoning laws.
6:46 - I'm pretty sure that's wrong re: Minneapolis. I was under the impression that in 2022 they upzoned every SFH lot and and thus eliminated single-family zoning.
Private DEVELOPERS can plan their sim cities on land they own all they want as long as they respect the inalienable rights of others. And private BUILDING CODES and INSPECTIONS can be provided by the market in a much more efficient way than gov't does it.
For codes and inspections- let's say McDonald's, Olive garden, and Michelin each develop their own building code and certification programs. Houses built to the standards set by McDonald's will be cheaper and easy to acquire for the majority of the population. Olive garden homes would be more expensive and built to a higher standard. And Michelin homes would have a reputation for the highest standards (and the prices to match.) And when the house is certified by each organization, they guarantee the standards of their code- if the house doesn't perform up to that level, then the company holds some responsibility, and will be more likely to fix the situation to maintain their reputation. The way it is now a county building inspector expects the same standard for an affordable housing project as they do for a $20 million dollar estate being built. One size fits all, centralized power silliness.
It's absolutely ridiculous. I'm a market gardener in Florida and I have to constantly patrol at night to keep the displaced deer out of my crops. The developers eat two or three square miles of scrubland a year between me and the nearest city. And it's mostly so rich Yankees can have two acres of yard that they never use. They want 200 feet between their tickytacky and the next identical tickytacky. Meanwhile I'm paying ridamndiculous taxes on agricultural land to maintain the shoddy infrastructure tying all that together.
No, you do not need regulations forbidding playgrounds next to a wolf park, because people don't do stupid things like that, any more than WalMart wants to plop a big box store in a residential neighborhood where the infrastructure won't support enough customers.
You CLEARLY haven’t been to California, where high-density housing is routinely built in wildfire areas and homes are built almost up to the Surfline at the beach.
A key thing that he noted and needs to be remembered, there ARE some reasonable levels of regulations. Two examples come to mind. The idea of getting rid of bans on multi-family homes sounds good, but at the same time we don't want people to buy up houses and split them into apartments. People purchasing homes to rent out can and will pay higher purchase prices for dwellings because they will get a return on the purchase, while those purchasing to live in the homes only have expenses until they ultimately sell years later. The other item that comes to mind is a reality playing out in my local city. There is a commercial building that they will be turning into apartments. They got a deferral from the city on dwelling size and will be constructing apartment efficiencies as small as 224sqft. While certainly there could be an argument for small 15x15 apartments for low cost housing, and that is in the lower range of 'tiny house' sizes, it also requires very special setups to maximize the space.
They are doing this in some areas, it might be cheaper than starting from scratch but it is still a lot of work and money to convert offices to apartments. So still not a magic pill.
This is one of the very few areas where I DISAGREE with the "official libertarian" mantra of "no rules", for lack of a better word. Seems like most people here, and Heaton, are against zoning regulations and support more of a "build whatever you want" type strategy. I strongly disagree. I bought my house because of the neighborhood, the neighbors, the noise levels, the traffic levels, and so on. If they built an apartment next door, then boom, all my peace and quiet is instantly gone. My privacy is gone, my street will have cars everywhere, no parking for me, more littering everywhere, more crime, and on and on. How is that right? Most people say or imply it's because of "greedy people who want their property values to go up" but that's a dull and vapid way of looking at things. I just want to maintain what I have. Not wanting someone to ruin MY property is not an unreasonable thing. One of the fundamentals of the "right" and libertarians is more freedom centric, but your freedom to do what you want stops where it starts to affect others. I did my homework, I bought my house, I did everything I was supposed to do so that I could have this. Am I not entitled to have it? Why should anyone else be entitled to take away my peace and quiet, my privacy, my parking, and on and on? Do I not have rights too? And the whole "people need cheaper housing" argument doesn't hold water at all. You can build whatever you want, just farther out. It doesn't have to be right next to a nice neighborhood. In fact, it will be even cheaper if it is farther out. This country is 2.43 BILLION acres and proportionally speaking, almost none of it is built on. All the "urban areas" (cities, etc) combined are only 2% of our land. Forests and "shrubland" are over 50%. Agriculture and pastures are another 34%. We got PLENTY of land and space. You have ZERO need to plop your noise making eye sore next door to my large suburban single family home. You WANT that, because it's a good location, but you don't need it. Housing regulations protect assets. That's a good thing. Do you want YOUR asset to be ruined? No? Exactly. Don't be a hypocrite. If we lived in a perfect world and you could guarantee that the apartment dwellers would quietly park their vehicles in an underground garage and then go into their apartment and make no more noise than the average other single family, wouldn't cause any increase in crime, litter, etc. then I would agree with you. They should be allowed to build anything they want. But we don't live in a perfect utopia. We KNOW that they will reduce the property value. It's not about the money. It's about what the money value represents. It represents less peace and quiet, less safety, less privacy, more police presence, more problems, and on and on and on. It's not about the money for me. I'm not looking to sell. It's about reality. The money is just "keeping score".
Well, it's not just lot-by-lot though. Sure, a 10-story building right next to your house will change your life dramatically. (I think the property value might actually not go down because you could sell it to someone who builds another 10-story building. But rather than quibble about market value, I'll stipulate it would radically disrupt the home you bought.) The problem is people opposing high density construction anywhere in their city or even their county - far away from noise issues. Then the complaint becomes that it will overcrowd the schools or cause traffic, and people just don't want to deal with that. So new construction takes 60 acres and turns it into 20 homes of 4000 sq ft each. When what they could have done instead is have a central parking lot surrounded by 200 homes, surrounded by a nice green buffer. Instead of ruining your neighborhood, it becomes its own. But we're not doing that either. There are indeed people who seemingly want to declare war on all single-family home owners. They hate cars, and therefore they hate roads and the idea of traveling any distance. But we also need room for higher-density housing. And if we keep filling all spots with single-family units, eventually your nightmare of the projects-next-door will become the only option.
@@notme222 Yeah, that's not really true though. "Urban areas" (meaning cities and suburbs etc) only take up 2% of the country's land mass. We have PLENTY of room. There's zero shortage of land, that whole resource scarcity argument is a bunch of BS. People just want to be closer because of convenience but it's not necessary at all. And if you want to go find some untapped land and build high rises and shared parking lot groups and all that, who's stopping you? Go do it. Leave me out of it, though.
@@user-nh3gu1ge3d And there's a lot of that happening. Texas, Utah, Idaho, and the Carolinas have been adding a lot of people because they're not so built up. But people will always want to join certain areas because of social or business connections. It's not practical to say "The Bay Area is full. Move to North Dakota."
@@notme222 They want to join certain areas because of how nice they are, then they immediately want to make them worse. If they want to join an area, then they need to respect the rules of that area. It's like all the Californians leaving California because Democrats fucked it up, then immediately voting blue in the red area you just moved to. It's illogical.
How much higher is the crime, littering, noise going to be if a few 3-story apartment buildings were built near your house? Your argument rests on a lot of speculation and little on facts.
Learned that in SF bay area in the 1980 as a student renter. My landlady complained her three grown children can't find housing near anywhere her. I told her about building restrictions that she, by default, supported all her life. It was a shock to her that a young guy could teach her something about real estate.
What do you mean by supported?
@@lukazupie7220 elected the people that wrote the laws, obviously.
@@gmanplaysgames256 we have no idea who she voted for🤔
@@lukazupie7220she probably supported nimby policies.
We def need more Heaton on here. He is awesome
Where are the political orphans at?
Heatonarians all present!!!
other than comfort food, what will that do for you?
This really feels like his old weekly show, which was excellent.
His podcasts are great too (I probably like his SciFi podcast more than his politics one), but his old weekly show had segments mixing up sketch comedy, stand-up, and commentary. Was really great.
Thought it was Rogue Whig
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with a fiduciary financial counsellor, my advantages were certain. I got into the market early 2019 and the constant downtrends and losses discouraged me so I sold off, got back in Dec 2021 this time with guidance Long story short, its been 2years now and I’ve gained over $860k following guidance from my investment adviser.
@@MarkFreeman-xi3rk Interesting Mark. I've been thinking of going that route been holding on to a bunch of stocks that keeps tanking and I don't know if to keep holding or just dump them, do think your Inv-coach could guide me with portfolio-restructuring as i wouldn’t mind a recommendation.
Actually, I've shuffled through a few advisors in the past, and “ Margaret Johnson Arndt” remains the most resourceful thus far. Her strategy proves profitable, and sustainable both in a bull & bear market. Most likely, her deets can be found on the net, so you can confirm yourself.
Insightful... I curiously looked up her name on the internet and I found her site and i must say she seems proficient, wrote her an email outlining my objectives. Thanks for sharing.
This is 100% true.
The ugly truth is the people don’t want to change zoning. Because if zoning laws change the value of their house goes down.
It's a tiger's ride. People buy only affordable houses, then want the value to go up so they can sell and move away when they retire. But the more expensive they are, the fewer people can buy them, the harder it is to sell for enough to move away.
The biggest practical problem with abandoning zoning is all the underwater mortgages. If my home value went from mortgage + 50% to mortgage / 2, I'd sure consider walking away. Imagine renters all moving out because the new apartment building was half the cost; landlords would default.
Having started this tiger ride, I don't see any way to get off without a lot of hurt.
And the real estate lobby has TEETH. People with houses VOTE. People who don't... don't. And if you're the guy they can directly point to who lowered housing prices? You'll be a one-termer.
A glorious, motherfucking HERO of a one-termer.
This is the problem we face with a great many government interventions. Imagine saving for a decade to finally get a house, you take out a mortgage, and then the zoning laws are repealed and they place a massive apartment in your backyard. Suddenly you're underwater on your mortgage because your home value plummeted. It's like this whenever the government meddles in a market. People restructure their finances around the new intervention, and now repealing it will mean everyone who built their finances upon it are screwed.
Now I still think reducing zoning restrictions is a good thing and we need to do it for long term sustainability, but there is no denying that we are essentially asking the middle class to harm their assets for altruism. Most people aren't willing to do that. We can hate the NIMBYs, but I don't think we'll make any progress on the issue if we don't at least recognize that it's more than just some evil rich people trying to keep themselves rich. It's more often than that middle class homeowners who see the real prospect of something they worked most of their life to achieve being rendered worthless.
If the government hadn't meddled in the first place, we wouldn't be facing this problem, but here we are.
@@LDSkinny i mean, yeah, but "government meddling" is the name of the game, and by "game" I mean human history. Usually on behalf of evil rich people and very often against the middle and lower classes. Housing becoming "an investment" as opposed to "a place to live" is starkly to blame here, and say this point as soon as older housing stock re-enters the market due to its occupants dying or moving, the only people with the wherewithal to afford it are those evil rich guys, who subsequently hoard it into their portfolio and put it up for rent, because that, too, is in their financial interest - the health and future of the ephemeral middle class be damned.
I'm confused as to how you can expand housing, yet not massively increase traffic in an area that can't handle any more cars.
The emerging alliance between libertarian free-market supporters and leftist urbanists on housing density is an exciting development for improving American cities. In Washington state, for example, the recently passed law banning single-family zoning in the state's cities had broad bipartisan support.
I wish more cities did that but in this damn country it take years or decade for any change to occur
id limit zoning to five different kinds of zoning
rural (mostly so buildings dont tower over someones farm preventing them from having crops only refers to useful farmland)
suburban land that cannot support physically and will cave in with housing under a certain size
urban land that can support more stuff, technically mountains and desert can be labeled urban if thats what is structurally sound to build there)
hazardous food; namely slaughterhouses
hazardous nonfood: chemical factories, landfills
this is pretty much the closest thing to abolishing zoning restrictions i think this policy would fix nearly everything
I don't agree with Reason on 95% of political issues under the sun. But on this crucial imperative issue: the cost of housing, I and many others are more than happy to make a pragmatic alliance that focuses strictly on what we agree on while agreeing to disagree on what we don't. This is how issues-based advocacy works and used to work (looking at you ACLU, NRA, Planned Parenthood!) and represents politics at its best
Sounds like the de institutionalization era, that worked out great, right? Right? We nearly eliminated psych facilities and instead increased prison populations and homeless shelters… brilliant. Zoning has been weaponized and is problematic, but there are “natural” locations for high density housing, based on holistic planning, for instance, grid streets (not meandering suburban ones) with public fixed rail transit, plenty of parks, etc. As a counterfactual it makes virtually no sense to randomly drop a high density multifamily home in a low resource low service semi rural suburb (like say northern Westchester NY, and not near the river), but in a housing crisis caused by nimbyism in NYC or downtown white plains, a developer will build in the least useful place with nearly no organic demand. Additionally, it’s a bit silly to call protecting neighborhood character JUST about sterile housing values, or racism, people move to places for what it often is and like it to stay that way (especially if there is no where else to move that would recapture that essence because of similar upzoning), and it is tone deaf to ignore urban crime and pretend as if suburbanites have no valid reasons or concerns for bringing that to their neighborhoods (density doesn’t ordinarily equal crime, but it can)
I think a housing crash will happen because all those people who bought homes over asking price, although it was at a low interest rate, they are over their heads. They have no equity if the housing prices continue to go down, and if for whatever reason they cannot afford the house anymore and it goes into foreclosure because even if they try to sell, they will not make any money. I think this will happen to a lot of people especially with the massive layoff predicted for the future and the cost of living rising at a high speed.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
You are right! I’ve diversified my $150K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $330k in net profit across high dividend yield stocks, ETF and bonds.
@@TomD226 This is exactly how i wish to get my finances coordinated ahead of retirement. Can I get access to your advisor?
@lowcostfresh2266 In fact, I'm not sure whether I'm permitted to say this, but I'd suggest searching for Laurel Dell Sroufe as she gained a lot of attention in 2020. She is both my coach and the manager of my portfolio.
@@TomD226 Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
As a Real Estate agent and investor, I have been saying this for years! Nonsafety-related regulations and zoning restrictions create unaffordable housing, which leads to increased homelessness in the long-term
nearly all real estate people want the reverse
I don't know if you've noticed but 3/4 of all bullshit laws are "safety-related".
Most homelessness is not because of housing costs. For most, it's due to drugs or mental issues, or both.
"safety" related regulations do too.
@@kevinh5983 true
If you’re also concerned about exhaust gases from transportation, guess what? Zoning restrictions make distances bigger between your potential destinations in the city because you’re not allowed to build up. So more individual houses next to each other make cities expand horizontally instead of vertically.
Ottawa's green ring did exactly that. They stole family farms and left a useless area, not wild, just abandoned, between the city and the new dense suburbs further out.
I actually did something about zoning a few years ago. An adjacent 0.75-acre empty lot was zoned for some townhomes, but was opposed by neighboring townhomes on the other side. (I own single family home.) I went to the zoning hearing and gave an unsolicited case for property rights, using standard libertarian arguments. This impressed the board and also the neighbors who initially opposed. I also said that my preferred land use would have been a donut shop, but for that I would have needed to purchase the lot when it was on the market. This is how an individual can affect a little part of the world.
So... You got the donut shop?
Today, each town home unit has 7 to 10 illegal immigrants living in it with vehicles parked on the street and green space along with a weekly shooting. You're a bastard for allowing this. Why do you hate America? Why do you hate local control? You're a disgraceful fascist.
It's the attitude of: "We got ours! Screw you if you can't afford to get yours!"
Prove me wrong
The constant change of increasingly restrictive building codes are driving up the cost of new construction. Each year new codes are added. They increase the complexity and cost of building a new home or apartment. Certainly some level of standard is needed but it is getting ridiculous.
The legal complexity bloat is a massive problem in general, yeah. If you have to be a lawyer to understand the laws, you don't really have laws.
seems like the fire codes are the most arcane and difficult to understand but they're not the only bad apples. not only are codes changing and restrictive, they are not clear and require the interpretation of local building officials, which can add a lot of cost, especially if the official changes his mind after construction is complete. a few years ago an official issued us a statement saying wood trusses bearing on exterior wood walls of a 5 story building was okay. we completed the structure and then he said it was not okay anymore and made us add another layer of exterior walls around the whole perimeter.
Building codes are there for a reason and I think they are for the better in the end. I base that opinion on the code-free 1940's wiring in my house. There's no GFI and while everything appears to be going to a breaker I wouldn't be one bit surprised to find that's not the case
@@2x2is22 I heartily agree that a certain level of building code is necessary. However there is a point where it goes beyond safety to a degree of absurdity. As in all bureaucracies, they never get smaller or even remain the same for any length of time. There is a constant growth (creep) and each new code adds cost to the construction. The combination of building codes, ill informed legislation, and lawyers who will sue over anything you can imagine has driven the cost of new residential construction to over $300 per square foot in some areas of the country.
I think that's only part of the problem. The federal reserve held interest rates far below the neutral market rate for a decade, allowing individual buyers to leverage higher into prices while maintaining lower monthly costs. Eventually firms noticed that they could earn better returns on housing units than bonds, and profligate REITs started purchasing whole neighborhoods. With higher interest rates (but still not touching some versions of the Taylor rule) we're seeing housing cool down. Unfortunately bubbles don't pop slowly, so we may see a wave of unemployment and forced selling soon (look at the 10 y to 3m spread).
I assumed we'd see a housing crash.
However the supply is very low due to people not wanting to give up their sub 3% mortgages when they sell then have a 7% when they buy their new home. Therefore people are staying put and not listing their homes keeping the supply low.
@@mattcolver1 In general, I think the way this plays out is that we see zombie companies unable to roll over bad debt, which should lead to an increase in unemployment. As workers are unemployed and unable to make mortgage payments, we should see a wave of forced selling that lowers housing prices. In some strange way, I think the fed is banking on this happening. As long as employment stays high, the velocity of money should remain elevated (who saves rapidly devaluing money?), leading to stubborn inflation levels in spite of decreasing m2 money supply.
any solution that involves messing with the Federal Reserve ends with your figure head getting Kennedy'd, so I mean, watch out on that one.
@@GRNBaseball10 trouble with that is that the ones best positioned to take advantage of that are big property management companies, they'll just buy all the newly available housing.
Taking the fangs away from HOAs would help, too.
Boomers LOVE HOAs, since it ensures property value over their own freedom to use their land. Unfortunately, with open borders we now have, folks are likely to double down on HOAs in order to prevent literal riffraff from living next door.
HOAs are messed up. Because the original homeowner 40+ years ago signed into a contract, now YOU are in that contract, too? It violates basic consent and common sense. And nothing can ever remove that HOA agreement. That house will always be under the HOA tyranny until it falls apart. That's insane. HOAs shouldn't have any legal standing, it's just asinine.
I was looking at old Heaton content, and are glad for new old Heaton.
How about some laws restricting the restrictors?
Andrew Heaton is the Jimmy Stewart of Economics.
And he's also the Sandy Springs of puppetry.
Zoning is just legal classism. Overt classism. As someone trying to build an affordable house in a US county that represents the epitome of every stupid policy you’ve talked about in this video, watching this makes me want to cry 😭
Classist policies that prevent a professional couple who makes 170k a year from building a home (my husband and I) is a bit of a red flag that this shit has gotten out of hand!
its weird because its the democrats, who claim to be the most for the poor classes, are the ones pushing for higher regulations in society like this
You might believe you’ve earned your way into polite society, but the people who already own real estate don’t see it that way. What else is class and status for but keeping you in the favela?
When people started thinking of their properties as an investment more so than just a place to live we set ourselves down this path. People don't want to hurt their "investments" so they'll do everything they can to stop them from going down. Like you said artificial scarcity and NIMBYs have stagnated new developments and it's crazy how far property values have snowballed because of it.
It's not just the investment. People bought single family properties for the quality of life. They don't want to be packed in like sardines.
Is there any other solution?
@avi8terrfwg317 No single-family homeowner is going to be "packed in like sardines". The next door apartments may be, but single-family homes will still be spread out.
The consequences of de-zoning (which I do support) is that places like the outskirt of cities like Houston where houses sitting on multi-acres of land will skyrocket because those becomes more sought after. I like having a yard for my kids to run around and not having to hear my neighbors arguing. Had enough of that when I was still renting apartments. Many counties In tx if you got 10acres of land or more, you can shoot any kind of firearms on it as long as you got some way of catching those rounds and it doesn't go into your neighbors yard.
This was both funny and extremely informative. Thanks!
So some people don't want more neighbors. And you know what, fair enough. The issue these people fail to realize is that they're going to get more neighbors whether they like it or not, the real question we have to ask ourselves is "would I like my new neighbor to live in a large apartment building, or would I rather they live in a cardboard box in front of my house and poop on my sidewalk?"
If you really want to get away from people, go live in a rural area.
Either way breeds more crime, people dont have to coddle the mentally insane or the lazy who fail to grow in life. Theres plenty of land in the US, most cities arent constrained like Pinellas country (St. PETE) FL where theyre constrained by water on 3 sides. Just because there is restrictions inside city limits, doesnt mean there arent areas outside of city limits that would allow for all the mini-homes and apartment complexes the developers could desire. The problem with this video is Heaton started calling for the state to build the homes, thats not very libertarian.
@@Todd_Swank The issue is you can't just live anywhere. While sure many businesses are cutting back on office space, often times people might still have to come into the office 1 day a week meaning you still need to live in cities with jobs, not just wherever is cheapest. Cities with the worst cost of living crises often have many more new jobs added to the area than new homes. And the farther out we build, the more infrastructure we need. More infrastructure means higher government spending, which isn't very libertarian. Also, telling other people what they can and can't do with their property isn't very libertarian.
The "public housing" mention was for the centrists and non libertarians watching the video. He didn't support or oppose it. Regardless, those people should also oppose zoning even if they are not libertarians since it hurts their causes.
Enter urbanization. Rural folk are already getting upset that they are turning into suburbs. It does not seem fair for someone to pick a place to live that intrudes on the current habitants’ values. Making the people who were there first move out or give up their lifestyle…“If you really don’t want to live near the British colonists, give up your homeland and live in the desert.” “If you can’t afford the rent hike then you should live somewhere cheaper.” Many zoning decisions are stupid bogus, but giving precedence to invaders is pretty well established to be a dick move.
@@Nitsirtriscuit Do you know what speeds urbran sprawl? Preventing density inside cities. If I can't build a 100 story residential structure in the city, I'll just buy a plot of land from Farmer Jones outside of the city and turn it into a 100 house single family home subdevelopment. By trying to prevent density with things like zoning and height limits, you've made the city spread out much further than it really needs to.
False equivalency. The people pooping in the sidewalk are not doing so because they can't afford apartments/housing. Those are the drug / mental patients of the world. You have poor homeless but they aren't doing that
I’m in Michingan and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal portfolio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my portfolio this red season. I’ve made over $350k since then.
I've been in touch with a financial advisor ever since I started my business. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $900k in a little over a year, my adviser chooses entry and exit orders.
@@maryHenokNftKudos on the effective execution of innovative ideas and tactics that lead to significant advancement. As I seek guidance from a trustworthy advisor, would you be willing to share details about the individual assisting you?
*Gertrude Margaret Quinto* maintains an online presence. just make a simple search for her name online.
I'm actually rather surprised you called out Minneapolis. Because, in 2018, it became the first major city in the US to ban single-family zoning. And in 2021 it eliminated parking minimums for multi-family housing. As a result there was an explosion of apartment buildings across the city. And the building trend still continues.
first thing that needs to be done is to get rid of immediately the legal distinction between commercial and residential property, that and you should be able to build whatever residential or commercial building wherever as long as the long supports it and you arent randomly building it near a bunch of farms.
In Denton, TX, they’ve been improving the housing situation a lot. A bunch of new multiplexes, as well more compact houses have been popping up, with a lot more planned or under construction. I think this will really help Denton rise from the ashes and become a greater city.
I live in a city without all these senseless zoning laws. I got a 2 bedroom apartment for only about $400 per month. I literally made ends meet while working in a hardware store and living alone.
Ironically, zoning laws lower property value in the long term by paralyzing city growth.
Love it. To be fair, you should've added one thing though: city services. Sewer and electrical infrastructure need to be able to handle the increased load. Sometimes that can be the bottleneck.
That's a fantastic argument for allowing density. The cost per home for roads, sewer and electrical is almost 2 times as high for single-family homes as it is for duplexes. Just duplexes! That drives up how much per home needs to be charged in taxes/HOA to sustain it, which is another cost of housing.
@@newlin83 Yes, these are complex issues and we need to figure out what we want to optimize for; but in this case it's not clear how to optimize for that even if we want to. In the US, birth rates are declining rapidly, and people are taking longer to start dating, have sex, get married, and have kids. Economics play a huge role here, but I believe so does that fact that it's impossible for anyone to independently socialize when they're old enough to be somewhere alone but not old enough to drive themselves there. If the family is wealthy enough to have mom not work _(while_ paying to live in a single-house lot), then the kid will have pretty good opportunities for soccer-mom to drive them around; but if mom has to work, then the kid will be stuck alone at home (terminally online) in their teens. I won't make a strong claim here, but it's not _obvious_ to me that this is a better environment for population growth than adding in some density.
There would be massive deflation in houses if we would fix the tax code and get rid of that depreciative tax loophole that allows you to write off lost income from unren rented or unoccupied homes.
Best way to fix the tax code? Get rid of it completely.
This is true. Businesses can keep their rent high and take the loss of the vacant building instead of having to lower rent.
Wait, I can do that!? Sweet I'm totally writing off my lack of renters next year. Probably I still wont have enough deductions to itemize though 😢
or just be a decent human being and don't steal from people?
Doesn't address why those buildings are unoccupied (they can't all be evil landlords). I mean you can buy a house in Detroit for the cost of a DVD player. Owner can't afford to install a new $10k HVAC system just yet and you want to take away depreciation on top of?
Just Land Value Tax (which heavily influences code), and be done with it.
Here's our office building. It's vacant now because all the office employees are working from home.
What if we converted the offices into rooms and rent those rooms out to our employees?
Yes! They'd still be working from home, but we can make money off them too.
Seriously, long before covid, I had a corporate type job that I use to joke about how I would work more for the company and be "on-call" if I could live in the office. Like section off a little area for my room. The office had a full bathroom and showers and a kitchen with a stove and fridge. The office had internet and cable and a tv and computers, plus maid services. And the company was always bringing in snacks and drinks for employees and sometimes stuff like pizzas. So I was like "seriously, let me live here for free, provide me with food and sodas and I'll do what you need me to do and you won't even need to increase my salary."
Your videos are genius as usual! Thank you!
I look forward to your future videos.
Historical zoning can actually be quite helpful for frustrating eminent domain. It's kind of beautiful setting one part of government against another to get them to leave your property alone.
eminent domain is evil but so is our current zoning policy, id limit zoning restrictions to five
Counter example: An ocean front house near Carmel CA was storm damaged. To rebuild, the owner had to do the impossible, meet current building codes and maintain the historical character. The case went on for years with the owner unable to live there.
Minneapolis ended single-family housing restrictions in 2020.
When my grandparents started their custom home business the cost per square foot was, adjusted for inflation, about $75 to $125. That cost in the same area is now around $400.
In my grandparents day, people had single pane windows, drafty homes with practically no insulation, only a handful of electrical outlets, etc. and the average size of a home was overall much smaller.
The average home has since doubled in size, dual pane windows, good insulation, housewrap, requirements for electrical outlets, etc. have vastly improved the energy efficiency and living quality of homes along with the expense of building them.
Zoning absolutely plays a role, and a huge role at that. Zoning often requires a minimum house size too. You couldn’t build a tiny or even small house where I live.
$125 per foot for your grandparents? That's outrageously expensive. Or, maybe you are just 5 and your grandparents were born in like 1975. When my grandparents (both sides) bought their first homes (that had room for 5 kids), they were freshly built and cost less than their cars - which cost about $5k. Both homes are still up and wonderful shape - no renovations. The floors don't even creak.
Building higher density is not all in all the solution. Come to Portland Oregon; we are building high density like crazy. I see single occupancy homes torn down and an apartment complex or townhouse are built on the land. In fact, Metro has changed zoning to where one cannot even build a single occupancy home, have a large yard and a car garage. One should expect land prices and rents to be lower but the opposite: housing prices and rents skyrocket. The reason is the urban growth boundary and regulation has made land artificially scarce and expensive.
Interesting. If I understand you, that sounds like a similar issue in a different flavor. Trying to research it took me into the weeds a bit, where I'm reading about what an R5 vs R2.5 zone is and lot shapes. Nevertheless, according to Statistica's data on new residential construction per capita, Oregon is only in about the middle. Well ahead of stubborn east-coast States, but only half of Utah, Florida, and Colorado.
I thought that the NIMBY acronym became obsolete when enough former NIMBYs admitted to what they really wanted, and the acronym was changed to BANANA:
Build
Absolutely
Nothing
Anywhere
Near
Anything
Had neighbors of the NIMBY variety when I lived in Los Angeles. One of them was trying to get signatures in support of anti high rise zoning. I told him I was pro free markets and against telling other property owners what they can and can't do with their own land. He answered that promoting zoning was free market.
Glad I no longer live there. So many feign caring for the poor and marginalized while being control freaks and actively making those people's lives impossible.
Is there are no any land in Los Angeles who didnt use? Why i ask this? Because zoning cant chnge it because of the nimby. So the other solution is gov must built another housing problem for people far from nimbys plus build a train so its easy to commute from there house to city to work.
@@carloconopio6513 Los Angeles is extensively developed. The nearest empty, unzoned land is over a mountain range and dozens of miles away. Government housing is notoriously bad. New train routes are hindered by heaps of regulations and can take a decade to build, all while going wildly over budget. One of the subways has been undergoing an extension underneath Wilshire Blvd since 2019, wreaking havoc on traffic with the construction, and is still not complete. Aside from that, with the rise in mental illness and crime that I've seen while riding metro, I'm done with public transportation in this city.
Outside of LA, there are plenty of private developers working on new housing. It's so far away, though, that we're talking one or two hours to get into the city, and that's outside of rush hour.
@@carloconopio6513 Look on Google maps satellite mode to find where the nearest empty land is around Los Angeles.
@@carloconopio6513 Take a look at satellite maps of Los Angeles and try to find where the nearest empty land is.
Great, as always!
Also consider that it is to the best interest of local and state authorities to have property values continuously increase, that way they can continue to collect more property tax revenues from the same small pool of properties without having to raise tax rates or even lower them a little to appear magnanimous!
The irony of that is according to Urban3, higher density and mixed land use have a higher value per acre than detached single-family homes, strip malls, and big box stores.
@@TheFarix2723 Yes, but the smaller population is also a factor, if the population remains small and does not grow then you won't need new utilities and services. You won't need to build new power plants, sewage plants, water treatment plants and won't need to hire more police, road repair workers, teachers and emergency workers. You can make do with the hospitals and staff already built and not have to build new schools. The only thing that grows is the income from property taxes. This then allows the "authorities" to increase their own income for having done such a spectacular job!
@@DanielGonzalez-cs8pr
Dead on. Many people seem to forget that adding another 1000 people to a city block is adding all the extra waste water to the same 6 inch sewer pipe that was buried 100 years ago.
@@TheFarix2723 -- IIRC, they generate more tax revenue per acre, which isn't quite the same thing as having a higher value per acre.
I take your point, though. It's not clear to me how the government would be able to extract a rapidly increasing amount of income from residents of single-family homes, since those families' wages would need to increase by the same rate in the long-run.
6:10 - Including "you shall not pass" on that parody sign... it's particularly fitting.
By the second time you made me think of NYC and then didn't show it to me, I chuckled.
That's what you wanted, right? I don't want to disappoint.
Zoning may be part of the problem but I don’t think that it’s entirely the issue. Big corporations building more Apartment buildings or converting Commercial High-Rise buildings in to residential units which both are likely to be rental only, is the problem. What I think would work is to prevent corporations from purchasing massive amounts of homes and Air B&B them to make them generate money to maintain upkeep costs while waiting for the market to drive up costs. I’m fine with people purchasing a new home and waiting for the right price on the old home. But when companies as massive as Blackstone that can buy thousands of homes in a week can do it, yeah that’s a problem.
Otherwise they will continue to build new mid-rise apartments in major cities while buying up houses on the market to make sure they get your money one way or the other. With a higher rent or more exorbitant price tag on that home that hasn’t had any upgrades in the last 10 years.
There are more empty houses than there are fully employed homeless people by a ridiculously large margin. It isn’t a supply issue.
_"There are more empty houses than there are fully employed homeless people by a ridiculously large margin."_
Do you have a source for that? Also, are most these houses within a reasonable commuting distance of jobs? If not, then it's at least partly a zoning problem.
That said, I agree that Blackrock and others engage in rent-seeking like the kind that you describe, and that it does artificially inflate housing prices.
Wow, you should come to Orange County, CA. You’d love it. 5 story block long apartments everywhere. Wonderful.
This is entertaining and in most respects accurate. Regulation and zoning do create issues. What he does not explain is that the approval of greater density or multistory buildings makes the land more valuable; so, land prices go up accordingly. The end result is that the asking price for the completed "residential property" will be as high as if the zoning density was not increased. Economists have long understood and written about the solution: exempt the value of housing units from property taxation; and, instead, impose an annual tax on the value of land equal to what the land would lease for under competitive market forces. This will bring down the selling price of land and allow housing units to be constructed that are both affordable and profitable for the developer. So, yes, deal with the zoning issues but also get to the systemic problem caused by the conventional property tax.
Interesting response. But would that potentially increase the tax for a low-value house on a high-value property? If you have a mansion next door to a shack, and you calculate only off the land value, they both pay the same tax. I'm not sure I like that.
@@notme222 Every community experiences changes in what is described as "highest, best use" of the land in the community. Land around most cities was once agricultural. Commuter rail lines, then highways changed highest, best use to housing, retail, offices, hotels, etc. etc. Along the way many households living in small residential properties find their taxes going up as assessments rise. Some (sometimes many) are forced to sell out and try to find a lower cost residential neighborhood to move to.
There are other economic issues involved as well. The exemption of property improvements from the tax base in favor of land value will attract development where development is most appropriate, which is where infrastructure already exists. Sprawl will be reduced. More jobs will be created, etc. etc. etc.
I feel like the quality of content on this channel has improved over the last few years
The one that sticks out for me is not being able to convert high-rises or businesses into living spaces. With Covid and WFH, that ruling has to change.
It's economically impossible to convert business spaces into housing because it requires installing plumbing and utilities. The result is a space that costs 300% more than market. It's far cheaper to demolish and start fresh. Unfortunate but true.
@@philfortner1805oh no! It takes water and electricity where can we get that from? Maybe. The fucking building that has it. The plumbing can be changed and outlets moved and now you don’t have to destroy the entire building so you can hire your friends business to rebuild it.
@6:09 can you make that available on a merch store? I would LOVE to put that in my front yard!!
Update: I found one that does this custom on Esty. I changed a few phrases, It came in the mail yesterday and is now in my front yard. I giggled for at least an hour after I put it up
They keep telling me that we need government to "level the playing field," but in most cases, government regulations are used to UN-level the playing field. The power structure of a government naturally attracts those want to use the power of government for their own personal interests. Making government bigger and more powerful just ups the political stakes.
Also, we need to make "NIMBYs In My Barbecue Yard a thing. That is all.
You are correct that zoning and permitting artificially increases values but the main culprit is Fannie Mae and Freddie Mac. The ability of massive numbers of uncreditworthy people able to buy homes only happens due to government backstopping all the risk. Backstopping the risk exponentially increases all the demand because nobody selling mortgages can lose. Prior to this policy homes cost about 2.5X less. Add in the modern technology building homes today and homes actual value is about 5X less than the mean value in 1920. Why 1920 you ask? Well that was the time in America before printed money from the government to buy cool stuff entered the system. As each dollar was created it devalued all the other dollars. And now here we are where a 2 bedroom starter home costs $380,000 when it used to go for $120,000. The only realistic solution is to await to dollar to collapse and a Bitcoin standard to take over the entire world. But it's digital and as such will happen quickly once it picks up.
Dangerous nearby factories n stuff wouldn’t need zoning laws either. If someone can prove that the land is causing danger to other people in other plots of land, that could be considered ruining those other lands.
So factories that make noise or release harmful gasses would need to either have permission from the surrounding land owners or own that land themselves.
If a park is near a dangerous forest, less people would go there and therefor lower incentive to have one there in the first place.
Zoning regs and "historical" designations are often abusive, but you're wrong on a few major points:
Lots of zoning regs aren't about houses-as-investment, they're houses-as-I-want-to-keep-living-here. Someone who buys a home in a neighborhood of single family homes probably doesn't want to live next to an apartment building because of noise, smell, traffic, crime, etc. That restriction can be enforced via local government zoning or through private Home Owner Associations, but the intent is that folks living in those houses want to keep living in those houses - it's not always about keeping prices high so they can sell and move.
Also, there is plenty of cheap housing in Flyover states, and even in coastal states outside commuting distance to the Big City, moreso because the demand is much lower rather than dense supply -- on the reverse, we could double the housing supply in NYC (lot more toilets flushing every day) and it still wouldn't meet the demand of people who want to live there. Some places are just going to be expensive and Build Baby Build isn't a viable solution for that.
Why isn’t a viable solution if people want there little castle in the major metropolis then they should consider moving to states like Mississippi or other flyover states where they have plenty of land and people like them
They're actually not NIMBYs anymore--Now they're BANANAs: Build Absolutely Nothing Anywhere Near Anything.
They only thing they’ve done in Columbus for several years now…Is build apartments/condos on any patch of ground they could find.
Even better put in some retail on the first floor…living space above.
EVERYWHERE….I’d really like to know the occupancy rate in these new builds
My hometown in Texas is reasonably big and has no zoning laws. There's a quite nice apartment building in the middle of most neighborhoods, and houses are much more affordable.
The issue with apartments: Renting rather than owning is method to squeeze more money out of people.
Waiting to see Strong Town values make it to Reason. It would make a great sequel to this excellent video. Zoning laws make cites less walkable, more car dependant, and less livable for lower income folks!
This is a national treasure. I can interpret zoning laws for anyone who doesn't completely understand - "Not in MY backyard".
Just the right amount of humor and a good delivery
I remember growing up and having the little corner stores you could just walk to and get milk, lollies, meat ect. You could walk and get your lunch. Now it's all segregated from residential and most people need to get in a car and drive to some place to do all that. I don't want it change though, I brought a house in an area that had nothing, it was cheaper. Now they have reclassified the area down the road and in comes all the shops.. now my house has tripled in value, even though it hasn't changed.
I don't remember the last time I laughed throughout a whole educational video. Well done!
heaton is the shit man
And the tens of millions of home owners would never allow this to happen because they don't want their home values to drop. The system is as designed. How many regulators own property? Who would be willing to make these changes knowing their home value and those of their constituents would plummet?
Land use regs are a huge problem, but even in as of right market’s like NYC, the bigger issues is a combination of approval, permitting, inspections, etc. it can take 3 years just to get plans approved…
Over regulation is a problem but so is allowing investors, particularly foreigners, to buy up real estate in major cities and then sit on it doing nothing.
Great explanation honestly
This is the only reason I'm subscribed
A new Heaton video?
Must be my bithday🎉
Zoning laws absolutely need to change! There shouldn’t even be commercial or residential distinction
Colorado has rules that you can't build on property of less than 35 acres without county approval. Where as in Michigan, you can have a one acre lot with a well and septic field, so very low cost infrastructure for a house, in Colorado, to build housing you will have a municipal water and sewage systems, very large residential road, a lot of space allocated to parks and open spaces that the HOA will be obligated to water. Much of the land in the metro area was diverted to "Open Spaces" back in the 1980's and 1990's, to avoid the distinct communities from blending into a seamless expanse of suburban sprawl. The result is lots of nice views, and few trails that are barely used but commutes are longer and houses are more expensive for everybody.
Good thing they abolished single-family zoning in Minnesota and Washington State! Did the same recently in my home in Calgary :)
That Arlington, Texas joke 🤣
It's so true.
Great video, thank you!
Love this guy.
Heaton is the thinking man's john Oliver
In the county where I live they proposed a bil/law/ordinance to keep spaces open. Essentially make so people can't build on hundreds of acers. I saw right through it and voted against it. I live in northern Utah where housing is insane expensive. 200K more then in Texas on median home prices. Anyway the law passed and now people who complain that housing is expensive don't realize it is their own dang fault.
This feels like an episode of Mostly Weekly. Love it.
The city I live in is definitely pro growth. Multi family apartments and condos, huge new neighborhoods of single family homes, yet prices are still skyrocketing.
I'm looking forward to Heaton's "Abe Lincoln Cosplay Cameo" phase of his career.
This is the first video I've seen about the housing crisis that mixes good humor in it. Awesome video!
a lot of it has to do with interest rates, but it also has to do with all the NIMBY idiots that move into small towns, build uber rich "inner-communities" and basically shut out ALL future development once they get established because they feel like they can just shut the door now that they've come in and will cry to city council every time a new developer comes in
This was so good. Thank you!
You da man! Keep speaking the truth!
Very interesting presentation.
id limit zoning to five different kinds of zoning
rural (mostly so buildings dont tower over someones farm preventing them from having crops only refers to useful farmland)
suburban land that cannot support physically and will cave in with housing under a certain size
urban land that can support more stuff, technically mountains and desert can be labeled urban if thats what is structurally sound to build there)
hazardous food; namely slaughterhouses
hazardous nonfood: chemical factories, landfills
The biggest problem with real estate is all land isn't equally desirable...and yes a lot of vacant office buildings happen to be on very desirable land.
I have the solution. The government should simple pass a law stating that you can only charge a certain amount of money for a house, say, $100 dollars per square foot, then force all land-owners to price their homes accordingly. Also rent should be limited to whatever the government determines is fair. This will surely solve all of our problems and have no unintended side effects. Gosh I am so intelligent.
I had no idea this channel was so entertaining
I love that you added comedy to this
OMG I NEEEEEEED that yard sign at 6:07
I love that the puppets were in the background.
You seem to have missed the angle of what structures builders are inclined/incentivized to build, based on say price per square foot vs. cost per square foot.
Wait until you find out what's going on in Canada. Here in Vancouver it takes three years to get an approval to build a detached house without any rezoning.
Well zoning is one of the bigger inflationary cost. I believe the other huge one is zoning code creep. The energy and safety building codes have added an incredible amount to the cost of a home.
Supply and demand is obviously the cause of increased housing costs, but it is not down to zoning, or restricting new building permits.
Think about the way we use the housing we have. I live in a 3 bedroom house with my dog. My street has at least 10 other houses of similar size with the same single occupant. Very few houses are fully occupied.
Now, think about how we used housing in the past. I grew up in a 3 bedroom house with 2 parents, 5 siblings and 2 dogs. Both of my parents grew up in smaller houses with even larger families. The idea of a spare bedroom was completely foreign.
Not only do most people take up more space than before, but we need more and more space for our stuff. We fill our under-occupied houses, then have to rent storage space to house our ever expanding stuff.
Yes, we need to change zoning laws, especially reducing set-backs and allowing multi-use developments, but the amount of space that each human occupies has grown exponentially, regardless of zoning laws.
6:46 - I'm pretty sure that's wrong re: Minneapolis. I was under the impression that in 2022 they upzoned every SFH lot and and thus eliminated single-family zoning.
Private DEVELOPERS can plan their sim cities on land they own all they want as long as they respect the inalienable rights of others. And private BUILDING CODES and INSPECTIONS can be provided by the market in a much more efficient way than gov't does it.
For codes and inspections- let's say McDonald's, Olive garden, and Michelin each develop their own building code and certification programs.
Houses built to the standards set by McDonald's will be cheaper and easy to acquire for the majority of the population.
Olive garden homes would be more expensive and built to a higher standard.
And Michelin homes would have a reputation for the highest standards (and the prices to match.)
And when the house is certified by each organization, they guarantee the standards of their code- if the house doesn't perform up to that level, then the company holds some responsibility, and will be more likely to fix the situation to maintain their reputation.
The way it is now a county building inspector expects the same standard for an affordable housing project as they do for a $20 million dollar estate being built.
One size fits all, centralized power silliness.
It's absolutely ridiculous. I'm a market gardener in Florida and I have to constantly patrol at night to keep the displaced deer out of my crops. The developers eat two or three square miles of scrubland a year between me and the nearest city. And it's mostly so rich Yankees can have two acres of yard that they never use. They want 200 feet between their tickytacky and the next identical tickytacky. Meanwhile I'm paying ridamndiculous taxes on agricultural land to maintain the shoddy infrastructure tying all that together.
No, you do not need regulations forbidding playgrounds next to a wolf park, because people don't do stupid things like that, any more than WalMart wants to plop a big box store in a residential neighborhood where the infrastructure won't support enough customers.
You CLEARLY haven’t been to California, where high-density housing is routinely built in wildfire areas and homes are built almost up to the Surfline at the beach.
A key thing that he noted and needs to be remembered, there ARE some reasonable levels of regulations.
Two examples come to mind. The idea of getting rid of bans on multi-family homes sounds good, but at the same time we don't want people to buy up houses and split them into apartments. People purchasing homes to rent out can and will pay higher purchase prices for dwellings because they will get a return on the purchase, while those purchasing to live in the homes only have expenses until they ultimately sell years later.
The other item that comes to mind is a reality playing out in my local city. There is a commercial building that they will be turning into apartments. They got a deferral from the city on dwelling size and will be constructing apartment efficiencies as small as 224sqft. While certainly there could be an argument for small 15x15 apartments for low cost housing, and that is in the lower range of 'tiny house' sizes, it also requires very special setups to maximize the space.
“No playgrounds next to a wolf park” 😂
That’s solid zoning
They are doing this in some areas, it might be cheaper than starting from scratch but it is still a lot of work and money to convert offices to apartments. So still not a magic pill.
No but it works
This is one of the very few areas where I DISAGREE with the "official libertarian" mantra of "no rules", for lack of a better word. Seems like most people here, and Heaton, are against zoning regulations and support more of a "build whatever you want" type strategy. I strongly disagree. I bought my house because of the neighborhood, the neighbors, the noise levels, the traffic levels, and so on. If they built an apartment next door, then boom, all my peace and quiet is instantly gone. My privacy is gone, my street will have cars everywhere, no parking for me, more littering everywhere, more crime, and on and on. How is that right?
Most people say or imply it's because of "greedy people who want their property values to go up" but that's a dull and vapid way of looking at things. I just want to maintain what I have. Not wanting someone to ruin MY property is not an unreasonable thing. One of the fundamentals of the "right" and libertarians is more freedom centric, but your freedom to do what you want stops where it starts to affect others. I did my homework, I bought my house, I did everything I was supposed to do so that I could have this. Am I not entitled to have it? Why should anyone else be entitled to take away my peace and quiet, my privacy, my parking, and on and on? Do I not have rights too?
And the whole "people need cheaper housing" argument doesn't hold water at all. You can build whatever you want, just farther out. It doesn't have to be right next to a nice neighborhood. In fact, it will be even cheaper if it is farther out. This country is 2.43 BILLION acres and proportionally speaking, almost none of it is built on. All the "urban areas" (cities, etc) combined are only 2% of our land. Forests and "shrubland" are over 50%. Agriculture and pastures are another 34%. We got PLENTY of land and space. You have ZERO need to plop your noise making eye sore next door to my large suburban single family home. You WANT that, because it's a good location, but you don't need it. Housing regulations protect assets. That's a good thing. Do you want YOUR asset to be ruined? No? Exactly. Don't be a hypocrite. If we lived in a perfect world and you could guarantee that the apartment dwellers would quietly park their vehicles in an underground garage and then go into their apartment and make no more noise than the average other single family, wouldn't cause any increase in crime, litter, etc. then I would agree with you. They should be allowed to build anything they want. But we don't live in a perfect utopia. We KNOW that they will reduce the property value. It's not about the money. It's about what the money value represents. It represents less peace and quiet, less safety, less privacy, more police presence, more problems, and on and on and on. It's not about the money for me. I'm not looking to sell. It's about reality. The money is just "keeping score".
Well, it's not just lot-by-lot though. Sure, a 10-story building right next to your house will change your life dramatically. (I think the property value might actually not go down because you could sell it to someone who builds another 10-story building. But rather than quibble about market value, I'll stipulate it would radically disrupt the home you bought.)
The problem is people opposing high density construction anywhere in their city or even their county - far away from noise issues. Then the complaint becomes that it will overcrowd the schools or cause traffic, and people just don't want to deal with that. So new construction takes 60 acres and turns it into 20 homes of 4000 sq ft each. When what they could have done instead is have a central parking lot surrounded by 200 homes, surrounded by a nice green buffer. Instead of ruining your neighborhood, it becomes its own. But we're not doing that either.
There are indeed people who seemingly want to declare war on all single-family home owners. They hate cars, and therefore they hate roads and the idea of traveling any distance. But we also need room for higher-density housing. And if we keep filling all spots with single-family units, eventually your nightmare of the projects-next-door will become the only option.
@@notme222 Yeah, that's not really true though. "Urban areas" (meaning cities and suburbs etc) only take up 2% of the country's land mass. We have PLENTY of room. There's zero shortage of land, that whole resource scarcity argument is a bunch of BS. People just want to be closer because of convenience but it's not necessary at all. And if you want to go find some untapped land and build high rises and shared parking lot groups and all that, who's stopping you? Go do it. Leave me out of it, though.
@@user-nh3gu1ge3d And there's a lot of that happening. Texas, Utah, Idaho, and the Carolinas have been adding a lot of people because they're not so built up. But people will always want to join certain areas because of social or business connections. It's not practical to say "The Bay Area is full. Move to North Dakota."
@@notme222 They want to join certain areas because of how nice they are, then they immediately want to make them worse. If they want to join an area, then they need to respect the rules of that area. It's like all the Californians leaving California because Democrats fucked it up, then immediately voting blue in the red area you just moved to. It's illogical.
How much higher is the crime, littering, noise going to be if a few 3-story apartment buildings were built near your house?
Your argument rests on a lot of speculation and little on facts.