It's called "supply and demand" - the supply of workable LAND is restricted and even diminishing, while the DEMAND increases. The rules may be to alleviate "sprawl" or just to protect certain insects, rodents, etc. In this case the S&D curve is artificially contrived and the developers have nothing to do with it.
Matt
Since your posts don't indent properly, I'll just summarize by saying:
Your country has a housing situation that would do North Korea proud and you find noting amiss? Worse yet, you equate this to the entire US?
Just what perspective do your bring when you "testify"? A lot of Hollyweird celebrities testify in front of government boards - ever wonder WHY?
Let me guess - you're one of these?
Oh no! I hope you don't think I'm ranting... (9_9)
My points are an empircal observation. I'm involved in urban planning and local governing affairs
I occassionally testify at government hearings as well....
Locally builders have been able to opt out of building affordable housing units ( until recently) by paying into Affordable housing Fund. Developers could make much more money by just opting out of building affording housing units. However, the fund generated by this opt out fee has never been enough for the local government to build any new affordable housing projects/complexes ( especially with rising land prices and higher construction cost). Since new affordable housing units are now even more costlier to make than in the past -- builders when they do make them also can only make a few of them. Thus there hasn't been much in additional affordable housing construction in my county for about 20 years. Only recently the law was revised such that builder/developers are now required to build Moderatedly Priced Dwelling Units (MPDUs) and may NOT opt out -- but since new construction permits has gone bust - this might be a case of closing the barn door after the cows have left.
At the local level, I've also witnessed residents from local communities resist the inclusion of MPDUs near their communities because they fear it would decrease the value of their homes.
The lack of new affordable housing construction would not be such a severe problem if it weren't for the lost of current affordable housing. The currently the bulk of affordable housing consist of local apartment complexes but the current housing/real estate trend has been of the conversion of these apartments ( which have affordable rents) to luxury condos (which require a large amount of capital but have high monthy fees) . So you not only have the failure to create an adequate supply of new affordable housing units but you have the lost of existing affordable housing units. Luxury condos provide a higher profit margin than affordable co-ops - So Co-ops are not very popular here. One of the initiatives being advocated recently here is to stop the loss of older affordable housing units by using the affordable housing fund to buying apartments that provide affordable housing units that would otherwise be converted into condoniums.
While housing cost have dropped - they are still very high especially when considering the interest being charge on the mortgage. It seems to me that the people who have (re)financed their homes in my region in the last 3 years who are mainly at risk with respect to this currently troubling financial climate. I've heard that atleast some of the current troubles have to do with loans generated by mortgage brokers and the lack of verification( of financial data by) financial institutions. The main reason for this financial subterfuge is to make a mortgage/home affordable (or appear to be more affordable ).
I've notice in my community that most of the housing assistance has gone to single parent families, e.g. a mom with atleast one child. I've also notice that many households in my locale ( the Washington DC Metro Areas ) often solve the demand for higher housing cost by having multiple earners.
*** Zoning restriction can actually reduce the overall cost of *** making new housing available by limiting the cost of *** infrastructure and required services (roads, mass transit, *** utilities, sidewalks, schools, libraries, fire/rescue services, *** polices ) necessary to support the additional housing and businesses.
On what planet?
*** One of *** the major reasons for the support of "Smart Growth" policies *** is to reduce the need for additional roads and schools - *** major infrastructure cost to the local/state government. This *** makes a more far more efficient use of current infrastructure *** and should help control local taxes (e.g. property tax, income *** tax, and other associated fees charged by local governments.Roads and appurtenant items are built by the developer about 98% of the time.
Try again.
Developers support smart growth because they can put more housing on less land and charge more too.
Like New York City has low housing costs because of its zoning procedures. Large cities have large taxes.
You mean smart growth applies to sex too? Gosh, that is new one. Fewer schools due to smart growth? Ok.
These claims make no sense. Please attempt to advise us how "rules that limit sprawl" would drive up the price of housing. Housing is the house and it is the only part that has "replacement cost". The land does not have "replacement" costs. The claim seems bogus. And BTW, the limiting of sprawl decreases the fuel costs. If you were "forced" to buy a home closer to your place of work due to the "sprawl laws" then you should probably be smiling right now.
We need MUCH BETTER condos and apartments where you cannot hear your next door neighbor no matter how hard you try.
Developers don't set the price, the market does. Econ 101 - learn it.
Less land available means fewer houses capable of being built = less supply during a static or increasing demand.
Odd that shold need to be pointed out to someone outside elemantary school (Oh, I forgot, they don;t have time for that in public schools as they're so busy teaching environmental hysteria and leftist economics/public policy).
If I was forced to do any such thing, I'd smash the thugs face in with a baseball bat.
Well, get busy building them...or is it easier to just shoot your stupid mouth off?
Developers manipulate the price of land, as does government. They always ask government to change the zoning so they can make money by doing nothing but by playing politics.
Just read the book "The Last Harvest" to see how the cost of housing is drive sky-high by smart growth limits and governmental foot-dragging.
Eco 101 teaches you theoretical models.....you need more advanced courses to approach reality.
In reality theoretical supply-demand markets never occur.
BWAHAHAHAHAHAHAHAHAHAHAHA!!!!!! The natural supply of land is not any deterrent to the construction of housing. But land rent _IS_.
The "cost" of land is referred to as "land rent" and it normally must be pointed out to those who are unable to spell "elementary". Most of the land rent in the USA today is a function of proximity to jobs and desired goods. This would imply to most rational human beings that the spacial aspects of lots (the lot is too small for the house) are the least of the problem. The price of gasoline will have reduced the market value (cost in rent) of residential land and in the countryside while elevating the value of residential land (the cost of land use) in or closer to the centers of population.
A poor choice of words on my part. Let us say "encouraged" by your own desire to maximize utility.
At present the construction of more housing is not warranted but in very unique situations. The title of this thread is just plain erroneous. The trade price of homes is not going down because of a supply problem. Most rational persons are able to understand that axiomatic principle.
Eco 101 assumes free markets too. Smart Growth prides itself on manipulated markets for social goals, and this raises the price of land and housing.
Population concentration is a result of social policy, not any "natural" law.
No thanks. My reading list is already quite full. I am very much aware of why housing costs WERE ridiculously high, and why the are now going way down. Perhaps you think that environmental policies have been eased (and they haven't that I am aware of)causing the decrease in the price of homes. YOU may well believe that frogs cause warts.
Unless you insist on connecting the limitations on drilling the ANWR to a control on sprawl (what a leap) you are simply full of crap.
The American population has been concentrating in fewer and fewer places since 1900. What we have today are the side effects of population concentration, with half of our counties actually losing population. Half. And it would be more like 65% if you include failure to grow at the average rate, thus failing to keep up. But do read "The Last Harvest" to see how a smart growth-oriented architect shows how governmental foot dragging kills the quality of life.
You've got it completely inverted.
Excuse me?
No, it does not. Free market theory derives from S&D (the best way to meet objective under the reality of limited resources.
"Smart Growth", as used, is an oxymoron.
You apparently have zero comprehension of what "land rent" refers to.
Nope.
He's badly misusing the term "land rent", almost as if he doesn't have a clue as to what it means. Typical statist.
Theoretical Eco 101 supply-demand curves require perfect knowledge by buyers and sellers.
That NEVER happens in the real world. Never.
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