People Who Live In Suburbs: Classy, Icky, or Dudes?

strictly speaking, that is reregulation and not deregulation isn't it? deregulation implies "remove all restrictions and let ppl use the land as they see fit" which may or may not align with building housing

http://www.baycitizen.org/columns/scott-james/how-rent-control-subsidizes-super-rich/

it is removing regulation that prevents building above a certain height, certain density, etc.

I don't even know if there's hard evidence that NYC or SF zoning is the primary reason (or even a major reason) for the high prices of housing. I do know that MY's thesis sounds basically like a libertarian-lite "unleash the power of the market" watered down manhattan/cato institute screed.

also "gentrification the result of people moving somewhere cheap" is a weird thing to say. people moved somewhere cheap to begin with, and it stayed cheap! then other people moved "somewhere cheap" and it didn't. so there's obviously a bit more going on.

oh yeah, found this which I thought was a sort of interesting read: http://rortybomb.wordpress.com/2012/03/07/some-critical-thoughts-on-the-rent-is-too-damn-high/

I don't even know if there's hard evidence that NYC or SF zoning is the primary reason (or even a major reason) for the high prices of housing.

I have to go. but yes. there is.

http://en.citizendium.org/images/thumb/d/de/Supply_Demand.jpg/300px-Supply_Demand.jpg

haha thank you for that. a line is the most bestest kind of hard evidence!

and there are a few lines in that picture even!

where do u think prices come from

god?

that was facile even for you, iatee

sterl: http://www.economics.harvard.edu/faculty/glaeser/files/Manhattan.pdf haven't read this entire thing yet but this seems to be the theory being advanced

is it really that facile? shouldnt the burden be on sterling to prove why the basic rules of supply and demand dont apply in this instance?

the same 5 seconds it took to find a generic supply/demand graph led to a Harvard paper about this exact specific conversation

my bad. clearly INVISIBL HAND is hard evidence.

(but seriously I meant to ask: on what basis can you conclude that zoning restrictions seriously restrict supply?)

I coulda found a supply/demand graph w/ the harvard logo on it if it would convince you more dan

zoning restrictions by definition restrict supply!

you don't need a long harvard paper to understand this stuff

dan: that's a manhattan institute paper -- i think i googled up another already. i don't trust those guys very much, although to be fair they wear their agenda on their sleeves. also that particular paper is just about manhattan, while I think we're really discussing brooklyn & the bronx & such.

iatee: how many zoning restrictions? how much do they restrict supply? is there a model that i stand a chance of believing that can estimate what would happen to new housing construction w/o such restrictions? also what restrictions are we talking about here? how many are just nimby stuff and how many are arguably for some more real purpose?

the same 5 seconds it took to find a generic supply/demand graph led to a Harvard paper about this exact specific conversation

― thuggish ruggish Brahms (DJP), Monday, March 12, 2012 5:18 PM Bookmark Flag Post Permalink

This paper says the same thing as iatee, it just explains the why behind the restricted supply.

it only talks about the restricted supply of land *in manhattan* where one can develop *really-tall skyscraper condos*. which, to be fair, i don't care about, and i don't think matter, and i don't think would make one bit of difference w/r/t rents for most people in most of the city.

This paper says the same thing as iatee, it just explains the why behind the restricted supply.

... this was my exact point (specifically, that the paper makes the same point but actually attempts to answer sterl's question, which was "can you explain the why?")

if you read the other manhattan institute stuff you'll see the broader obviously libertarian right-wingery that's really behind these sorts of studies. labor costs are too high, taxes are too high, rent control is too restrictive, etc. once you start frotting w/ supply-demand curves too seriously that's just sort of how it goes.

I have to go home now sterling but I endorse anything max or chinavision tells you in the meanwhile.

the manhattan institute is not the only think tank in the world that's pro-density and the fact that it's libertarian doesn't mean that they can't accidentally be right on a certain issue.

if you can think of a way to solve the supply demand problem without decreasing demand or increasing supply, I'd like to hear it.

xp: eh, if the argument makes sense, it makes sense; the political label you put on it is beside the point

or to put it another way, someone can be wrong about 999,999 things and still get one thing right

One question that might be worth looking at is why does so much of the new higher density construction in Brooklyn, not just the "four neighborhoods" but Bed Stuy, Prospect Heights, etc. amount to luxury amenities condos that sell at a higher price point -- you know, roof decks, fitness centers, concierges etc. instead of a more affordable kind of building. Maaybe something about development costs still makes it make more sense to offer that kind of housing at that kind of price point. Maybe pent-up demand even in the upper-middle-class income bracket is still huge.

Although one thing I do want to clarify based on sterl's earlier post -- nothing about "condo" necessarily means unaffordable, it's just a kind of ownership structure. You can have cheap condos or expensive condos. An apartment that only requires $5000 down and a $600/mo mortgage payment could still be a "condo" hypothetically, even though you don't find that sort of thing in NYC right now.

One question that might be worth looking at is why does so much of the new higher density construction in Brooklyn, not just the "four neighborhoods" but Bed Stuy, Prospect Heights, etc. amount to luxury amenities condos that sell at a higher price point -- you know, roof decks, fitness centers, concierges etc. instead of a more affordable kind of building. Maaybe something about development costs still makes it make more sense to offer that kind of housing at that kind of price point. Maybe pent-up demand even in the upper-middle-class income bracket is still huge.

this is all anecdotal but i dont think this is true -- tons of new buildings in crown heights, bed-stuy, PH that are pretty basic. unless "small balcony" counts as an amenity -- but certainly no fitness centers, concierges, etc.

I didn't say I'm against increased supply. I said I thought MY's approach was bonkers. There are ways to increase supply that don't involve handouts incentives to big developers. My problem is with looking at the very real issue of affordable housing through the very narrow lens of "market efficiency" and doing so in a way that show cursory (at best) concern for ppl. that have been living in these cities for a long time and are getting priced out as opposed to ppl. that are just moving into these cities because they're young and want to be with other awesome young ppl in advertising and fashion and bigtime blog-writing and w/e. and also i have a problem with the idea that nyc, etc. are experiencing a hiring shortage which hurts them. minority unemployment in major urban areas (ny included) is crazy high. maybe some of those people can get jobs instead of johnny from idaho with his shiny new degree in communications?

icky

I didn't say I'm against increased supply. I said I thought MY's approach was bonkers. There are ways to increase supply that don't involve handouts incentives to big developers.

Removing building height restrictions is not really an "incentive to big developers" let alone a handout.

And to be fair to libertarians, it would be very non-libertarian to advocate developer incentives. Stuff like the 421-a tax break can't be supported by any self-respecting libertarian, because it's a "market distortion."

i really should stop but i also want to point out that at the moment new housing construction in nyc is down just like elsewhere not because of zoning this-or-that but because the broader economy is a bit crap, you know?

The current system favors the developers with the deepest pockets and political connections, because they're the only ones who can navigate the treacherous shoals of city council zoning boards. A more efficient market would lead to more competition which would lead to smaller profit margins.

I didn't say I'm against increased supply. I said I thought MY's approach was bonkers. There are ways to increase supply that don't involve handouts incentives to big developers. My problem is with looking at the very real issue of affordable housing through the very narrow lens of "market efficiency" and doing so in a way that show cursory (at best) concern for ppl. that have been living in these cities for a long time and are getting priced out as opposed to ppl. that are just moving into these cities because they're young and want to be with other awesome young ppl in advertising and fashion and bigtime blog-writing and w/e. and also i have a problem with the idea that nyc, etc. are experiencing a hiring shortage which hurts them. minority unemployment in major urban areas (ny included) is crazy high. maybe some of those people can get jobs instead of johnny from idaho with his shiny new degree in communications?

― s.clover, Monday, March 12, 2012 4:42 PM (9 minutes ago) Bookmark Flag Post Permalink

alright congrats, you have become the euler of this thread. the economic success of nyc has always been due to immigration. there are far, far more foreign immigrants in the outer boroughs than white kids w/ communication degrees. there would be even more if they didn't have to live 6 to a room in corona. do you have something against the majority of the borough of queens who weren't born in america? cause they're increasing housing prices as much as the white kids who live in a few neighborhoods in brooklyn.

I am pretty sure that max's blogger job would not have gone to an inner city kid w/o a college degree if max did not move to brooklyn. in fact, I would say that the labor markets probably don't have a lot of overlap. you've constructed a narrative on a handful of stereotypes. people moving to new york does not take jobs away from people, it creates jobs, just as people moving to america does not take jobs away from americans, it creates jobs.

"alright congrats, you have become the euler of this thread."

I will take this as a compliment?

iatee: I never said ppl moving to new york take jobs away. I did say, and this is true, that housing prices are clearly not a deterrent to lots of kids with communications degrees moving into closet-sized apartments increasingly deep into brooklyn and queens. and I would dispute that all immigration pushes up housing prices in the same way, because, duh.

and this is pretty embarrassing: "I am pretty sure that max's blogger job would not have gone to an inner city kid w/o a college degree if max did not move to brooklyn." lol inner city kids w/o degrees.

ok i'm done. (was shooting for the whiney of this thread btw, but them's the breaks).

alright this is the first time I have time to compose a real post and not write something on the fly:

a. euler, his '20-somethings who live in brooklyn are the key to this economic narrative' w/r/t gentrification was pretty comparable to your '20-somethings who live in brooklyn are the key to this economic narrative' w/r/t youth unemployment. there's a bias towards a certain story here, and that story is fairly marginal in the big picture.

b. there was no 'lol inner city kids w/o degrees', you suggested that college-educated kids moving to brooklyn were taking away jobs from city-natives. the only reason 'inner city kids w/o degrees' came up is because you suggested that johnny from idaho is bumping them out of the labor market. there's no evidence for that being true. if anything, they are competiting with the queens-esque immigrants for low-skill jobs, yet you didn't bring up those immigrants - 36% of the nyc population in 2000 - because it's a lot harder to make the case that foreigners shouldn't move to nyc than it is that 'johnny from idaho' shouldn't move to nyc, because lol white american kids amirite.

c. guilt by association w/ the manhattan institution is fairly ridiculous because the overwhelming majority of the support for cities, densification, mass transit etc. etc. comes from the far-left and the opposition from the right. it's like if I found a cato report on legalizing drugs and claimed it was a right-wing issue.

d. 'housing prices are clearly not a deterrent to lots of kids' doesn't say much. ipads are very expensive, but their prices are clearly not a deterrent to millions of people. however, if they were $50, millions more ipads would be sold. thus the price of ipad is both 'not a deterrent for millions of people' and 'quite clearly a deterrent for millions of people'. that there is such healthy demand even in the face of ridiculous supply restrictions reveals that there is quite a lot of pent up demand.

e. look at all those midwestern hipsters flooding the city, surely that is key to this narrative:
http://www.nytimes.com/interactive/2009/06/14/nyregion/0614-migration.html

nyc's population growth is due to new kids and immigrants, domestic migration has been deeply negative. a lot of that is retirees, but housing prices certainly haven't helped.

20somethings in brooklyn are a key part of the ny gentrification story as far as I know, and not dominicans or chinese in queens of whatever (who have been in queens or whose families have been in queens I should note far longer than ppl were hipstering-up the l line, and who are also gentrifyees and not gentrifiers). I never said that in-migrants were taking jobs from city natives. I said that the notion that NY has a huge hole in employment that in-migrants could fill (if only they could afford to!) is pretty dumb, given how much unemployment and joblessness there is, especially among minorities (including immigrant minorities!). there are of course jobs that arguably in-migrants are more qualified for, but that points to a bigger f'd-upness in society and sort of raises the question about why there's a concern to attract magic "young skilled professionals" instead of y'know thinking about jobs for all the ppl here already and getting priced out. But I guess if there are more bloggers and would-be fashion designers and artisinal ketchup crafters then arguably they need more people to make them coffee, so, you know, awesome! I mean, that's what the story distills down to as far as I can tell.

the reason I keep bringing up the MI is because I tried googling around a fair amount to find arguments about ny zoning that made sense, since nobody else (except dan) felt like digging them up, and pretty much everything I found was along those lines, and this is unsurprising, because the argument is almost entirely "set the invisible hand free" and to cop a line from reagan, it's typically pretty terrifying to hear "I'm from the free market and I'm here to help." It *is* a libertarian argument. Doesn't mean it's wrong. But it should give a little pause.

And I really want to know what skills and jobs these "millions of well-educated people" who would move to NY would bring. It wouldn't be industry, clearly, because all these proposals involve zoning away industrial areas. I mean the people that move here now more than glut the market already, clawing over one another for a handful of culture-industry (or finance) jobs at typically shitty wages and conditions hoping to strike it big and most don't. I fail to see how more of the same moving here wouldn't do more than just increase the competition for the same sorts of relatively scarce positions. Not that I'm saying they shouldn't move becuz think of hardworking NY gossip-columnists and boutique-suppliers, but just... good luck with that.

I also think there's sort of a willful blindness to the fact that in practice, to the extent that this stuff actually would have any impact (which, like I said, I'm dubious about to begin with), then that impact would be to increase gentrification.

Basically I have a hard time seeing how this is anything other than "upper middle class ppl who dislike upper middle class expenses would like to reduce those expenses by renovating over poor ppl's neighborhoods."

xpost don't those figures confirm that young ppl inmigrating from college towns really *are* key to this narrative?

also ffs nobody is disputing that ny housing is tragically expensive.

no, they confirm that they're a fairly small blip in the city's demographics

the jobs that well-educated people bring to nyc are the same jobs that they'd have elsewhere. the increase in population and wealth brings with it an increase in the demand for public transit workers, construction workers, cops, restaurant workers, teachers, etc. etc.

my roommate is a graphic designer. he is from cincinatti and asked to be transferred here because his company had a branch in hoboken. he does the same job that he did in cincinatti, but now he uses the income he made there to buy goods and services in new york city, to buy subway cards and to pay nyc taxes.

if you do believe that the economy is a zero sum game then you should be against all immigration to america, not just domestic immigration to nyc.

net migration inflows are northern metro areas and college towns, full stop, almost, according to nyt. (+puerto rico). net outflows are suburbs and sunbelt. plus this is as of 2007, so doesn't actually tell us about what's been happening rapidly these past few years, especially w/r/t the impact of the recession.

anyway i'm tired of defending myself from strawman accusations about "if you do believe that the economy is a zero sum game" because that's a lazy and dumb thing for you to say after all this discussion. i mean if you do believe that the economy is made of magical immigration into wealth transubstantiating fairy-dust then you should be for everybody in the whole world moving everywhere else in the whole world all at once because wow think of the jobs that would create!

I mean you really can't wave the krugman "network effects" wand here either because nyc is nothing but network effect to begin with anyway.

I can't mention network effects because nyc is a hugely successful example of network effects? because there is an upper limit to the amount of people who can benefit from network effects for some reason?

i weep for the citizens of the fine municipalities of the greater cincinatti area now bereft of yr roomie's disposable income, bus fare, & taxes.

w/ yr '20-something white domestic migration is the key to understanding nyc', you have def passed a few classes in the whiney school of cultural studies. you have blinders on that reveal your personal beefs w/ 'bloggers' or whatever but really your story just has so little to do with how the nyc metro area operates. rent is not expensive in the bronx because of 20-something white domestic migration, it is expensive because non-white, non-bloggers also want to move to the bronx, and there is still a limited supply of housing.

when did I say bloggers drove up bronx rents? oh right, I didn't.

p.s. you know what did? housing bubble: http://www.unhp.org/pdf/bubble.pdf

how we fix fallout from housing bubble? clearly remove the disincentives to building more houses!

wait your evidence for a housing bubble in the bronx is a pseudo-academic article that suggests that there might be a housing bubble building from 1985-2001? that was *before* the actual, nation-wide, nothing-particularly-ny-specific-bubble, and housing prices in the bronx are higher today than they were when that article was written. there was, quite certainly, no bubble from 1985-2001.

yup these guys clearly have no cred: http://www.unhp.org/mission.html

you obviously know more about the bronx than them. congratulations.