Beta Project - 12 minute of Dystopian NYC

[brycejones]

So then there's 480,000 empty apartments somewhere but I have a feeling.. they're only accessible to those with $3500+ cash a month.

Uh…..that isn’t what he said like at all.

 

[Brainonska511]

All that, but then we allow housing stock to be turned into hotels.

In some places, hotels are also in short supply.

Personally, I'd rather stay in a hotel than an AirBnB with lots of arbitrary rules and fees. But that can only be done if there are actually hotels (or enough to be price competitive) in a given area.

What would be nice is if we could have more European style hotels in the US, where they could be located in more diverse places and have varying sizes. That would really cut into the AirBNB problem.

 

[K1052]

All that, but then we allow housing stock to be turned into hotels.

I have not seen any convincing data that STR bans actually translate into meaningfully lower housing costs.

 

[K1052]

In some places, hotels are also in short supply.

Personally, I'd rather stay in a hotel than an AirBnB with lots of arbitrary rules and fees. But that can only be done if there are actually hotels (or enough to be price competitive) in a given area.

What would be nice is if we could have more European style hotels in the US, where they could be located in more diverse places and have varying sizes. That would really cut into the AirBNB problem.

Yes, another NYC led example is where they basically banned all new hotel construction in the city and (surprise) hotel rates have gone up a lot.

 

[Zorba]

Consolidation is an issue, but there is always local competition in housing - I doubt there are many markets that have only a few players.

As for vacancies: those units can't stay empty forever. Landlords can't write off lack of rent for empty units.

One note for new construction though: there is usually a period of time that they aim to fill it over - they generally don't want 100% in the first month. It's usually target to be filled in stages, hitting some steady-state vacancy rates of 5% by the end of the 2nd year, or something like that if I recall a thread that described the process.

Consolidation and cartelling allow landlords to take higher vacancy rates if they can push up pricing more. Airlines have been doing it for 20 years now.

Something I've noticed here too, with SFH neighborhoods. Traditionally a developer would develop the hood and keep a chunk of the lots to build on themselves, but anyone could buy the other lots and build on them. Now the vast majority of neighborhoods around me are developed and completely built out by one developer. This prevents competition among the builders and makes it harder for smaller builders to stay in business.

 

[Zorba]

I have not seen any convincing data that STR bans actually translate into meaningfully lower housing costs.

Who has done a real ban? Regardless you can't say all problems will be solved with more supply while allowing the supply that is there to be turned into hotel space.

 

[Zorba]

In some places, hotels are also in short supply.

Personally, I'd rather stay in a hotel than an AirBnB with lots of arbitrary rules and fees. But that can only be done if there are actually hotels (or enough to be price competitive) in a given area.

What would be nice is if we could have more European style hotels in the US, where they could be located in more diverse places and have varying sizes. That would really cut into the AirBNB problem.

I think it's more important for people to be able to find affordable housing than affordable hotels. I agree we should have better hotel options, though.

 

[brycejones]

Yeah, if deportation happens SFH construction is going to basically end.

I would look to see a real in-depth analysis of what's driving housing prices in different parts of the country. Obviously in NYC, LA, and Seattle there builders that want to build and need to build. But so many other places, I think there are other things besides zoning driving up the cost, like landlord consolidation and cartelling.

Although making it impossible to build middle houses also shuts the door on many new landlords entering the space.

Materials costs have gone up significantly so that is going to drive construction costs up. But generally in a lot of places construction has been below what’s needed for years now and any slack is gone. Slack only exists in places where people are leaving because the economic opportunities are so poor.

I live in a small city in a pretty rural county and even here people are complaining about a lack of housing and we can be a bedroom community to 5 other larger cities within an hour.

But we also have local people losing their shit over a new subdivision that just started up and how bad growth is.

Also construction and especially home construction is an industry where productivity has effectively declined over the last 60 years.

 

[K1052]

Who has done a real ban? Regardless you can't say all problems will be solved with more supply while allowing the supply that is there to be turned into hotel space.

NYC, for one, has implemented significant restrictions which has essentially made the practice impossible.

I'll buy that STR bans have a tiny effect that is probably entirely imperceptible to people in the rental market. Certainly not how they are being sold to the public as a solution for their high rents. It's like putting a band aid on a severed limb.

 

[Brainonska511]

I think it's more important for people to be able to find affordable housing than affordable hotels. I agree we should have better hotel options, though.

Why not both? Cities should be able to walk and chew gum.

 

[Brainonska511]

Consolidation and cartelling allow landlords to take higher vacancy rates if they can push up pricing more. Airlines have been doing it for 20 years now.

Something I've noticed here too, with SFH neighborhoods. Traditionally a developer would develop the hood and keep a chunk of the lots to build on themselves, but anyone could buy the other lots and build on them. Now the vast majority of neighborhoods around me are developed and completely built out by one developer. This prevents competition among the builders and makes it harder for smaller builders to stay in business.

Municipal governments have done it to themselves. They have created all sorts of process related things that slow construction, make it more expensive, and less standardized between municipalities, so now only the people with the biggest pockets (or best connections) can jump through the hoops and build stuff that pencils out for the bottom line.

 

[Zorba]

Materials costs have gone up significantly so that is going to drive construction costs up. But generally in a lot of places construction has been below what’s needed for years now and any slack is gone. Slack only exists in places where people are leaving because the economic opportunities are so poor.

I live in a small city in a pretty rural county and even here people are complaining about a lack of housing and we can be a bedroom community to 5 other larger cities within an hour.

But we also have local people losing their shit over a new subdivision that just started up and how bad growth is.

Also construction and especially home construction is an industry where productivity has effectively declined over the last 60 years.

Material hasn't increased nearly as much as the per square foot cost. And in many places the lack of supply is solely due to the lack of builders building, not a lack of approvals.

I approve house construction in my neighborhood and talk with the builders, they've learned if you slow roll construction you'll eventually get your very high asking price. Why build 3 houses when you can profit more off building 1, as long as the other builders around follow suit. Which is easy with consolidation, digital tracking tools, and the illegal realtor cartel.

 

[Zorba]

Why not both? Cities should be able to walk and chew gum.

Sure, shut down Airbnb, and fix zoning and other restrictions. I agree. And then somehow incentize builders to build enough that it lowers pricing, which either means a lot more builders or direct incentives.

 

[K1052]

Sure, shut down Airbnb, and fix zoning and other restrictions. I agree. And then somehow incentize builders to build enough that it lowers pricing, which either means a lot more builders or direct incentives.

The multifamily guys in Austin built themselves into a sizable glut. Even amongst the big companies there is still some competition.

 

[Zorba]

Municipal governments have done it to themselves. They have created all sorts of process related things that slow construction, make it more expensive, and less standardized between municipalities, so now only the people with the biggest pockets (or best connections) can jump through the hoops and build stuff that pencils out for the bottom line.

This at least isn't true here. I could go get a permit to build a SFH today if I wanted to and have before.

Multifamily is a shit show, of course, but I was talking about SFH neighborhoods. The issue I brought up is the developer not releasing lots. When you have 3 developers building 80% of new neighborhoods in an area and don't release lots it significantly hurts competition and it has nothing to do with city permitting or zoning.

 

[Zorba]

The multifamily guys in Austin built themselves into a sizable glut. Even amongst the big companies there is still some competition.

Has it resulted in a significant reduction in rents?

I saw an article a couple months ago that we have a big wave of new multifamily coming online, but developers have decided it's overbuilt and new starts are way down. I meant to post it here, but didn't want to start a new thread.

 

[K1052]

Has it resulted in a significant reduction in rents?

Yes by like 7%.

I saw an article a couple months ago that we have a big wave of new multifamily coming online, but developers have decided it's overbuilt and new starts are way down. I meant to post it here, but didn't want to start a new thread.

There is always a pullback after they've decided they overbuilt.

 

[Zorba]

Yes by like 7%.

That's good.

There is always a pullback after they've decided they overbuilt.

That was kind of my point, how do you get them to keep "overbuilding?" When their definition of overbuilt is "we are getting completely full at these insanely high prices?"

 

[Indus]

https://pix11.com/news/crime/man-shoved-off-f-subway-train-after-being-robbed-in-brooklyn-nypd/

Amazing what cameras installed in each car show about the safety on subways.

 

[K1052]

That was kind of my point, how do you get them to keep "overbuilding?" When their definition of overbuilt is "we are getting completely full at these insanely high prices?"

Make it easier for competition to enter the market by reducing the administrative barriers (permits, zoning, etc). Give everything legally fixed timelines for approvals. Financing will be easier to come by.

Reform building code as already suggested in previous posts.

Pre-approve a variety of standard designs so that basically any person off the street who can wrangle the financing and a contractor can put up a 3-4 unit building just like they were doing a SFH. This is already being done for ADUs in some places.

 

[Zorba]

Make it easier for competition to enter the market by reducing the administrative barriers (permits, zoning, etc). Give everything legally fixed timelines for approvals. Financing will be easier to come by.

Reform building code as already suggested in previous posts.

Pre-approve a variety of standard designs so that basically any person off the street who can wrangle the financing and a contractor can put up a 3-4 unit building just like they were doing a SFH. This is already being done for ADUs in some places.

I'm all for fixing a lot of the regulation issues, but I don't believe removing regulation is all of a sudden going to get enough developers developing enough to continuously push down rents. The dream of deregulation bring riches to consumers is almost always just a dream.

Making it much easier to build smaller multifamily houses will bring in more builders on the small end, I agree and think that is a good idea.

 

[K1052]

I'm all for fixing a lot of the regulation issues, but I don't believe removing regulation is all of a sudden going to get enough developers developing enough to continuously push down rents. The dream of deregulation bring riches to consumers is almost always just a dream.

Making it much easier to build smaller multifamily houses will bring in more builders on the small end, I agree and think that is a good idea.

You don't even have to take my word for it. Big landlord is telling their investors on earnings calls that they will retain pricing power in most markets due to barriers to entry and administrative burden.

 

[Zorba]

You don't even have to take my word for it. Big landlord is telling their investors on earnings calls that they will retain pricing power in most markets due to barriers to entry and administrative burden.

Obviously there are huge barriers to entry to building large multifamily home complexes. Also when we've allowed massive consolidation of landlords, they can block out and control vast markets. Also, it's not like all the regulation just popped up in the last 5 years. But now that there is more monopoly power than ever in the home building and landlord industries, we start get the calls of "deregulation will fix everything, we promise!"

The video just randomly popped up on my Youtube feed tonight. She discusses exactly what I've personally seen and what I was talking about. All the lots are controlled by a very small group of companies, making it very hard for small builders to exist anymore. Big builders have bought out a lot of the local and regional builders as well. The chunk that is left is never going to lose building discipline and overbuild to the point of decreasing their profits, unless something is done to break up their power.

But OKC is not NYC or LA, I could literally (and I have) take plans I have sitting in my house to the city tomorrow and walk out with a building permit in less than an hour for minimal fees. There are amble empty lots. Yet, new home pricing here has more than doubled in 5 years. What has really changed is nearly all of the new lots are owned by a handful of companies that retain the exclusive building rights to them and most of the mid size builders have been bought or forced out of the city limits due to inability to buy empty lots.

I am not saying over regulation isn't a problem, but it sure as hell isn't the only problem, and the solution isn't no regulation. We need to fix the regulations that are actually making building harder and especially the ones that price good development that people want to live in. But we need more regulation to break up these monopolies, tax empty land for at least its actual value (at least around here most empty land, even developed empty lots are barely taxed), and actually go after the numerous illegal cartels in the real estate industry.

 

[K1052]

Obviously there are huge barriers to entry to building large multifamily home complexes. Also when we've allowed massive consolidation of landlords, they can block out and control vast markets. Also, it's not like all the regulation just popped up in the last 5 years. But now that there is more monopoly power than ever in the home building and landlord industries, we start get the calls of "deregulation will fix everything, we promise!"

The video just randomly popped up on my Youtube feed tonight. She discusses exactly what I've personally seen and what I was talking about. All the lots are controlled by a very small group of companies, making it very hard for small builders to exist anymore. Big builders have bought out a lot of the local and regional builders as well. The chunk that is left is never going to lose building discipline and overbuild to the point of decreasing their profits, unless something is done to break up their power.

But OKC is not NYC or LA, I could literally (and I have) take plans I have sitting in my house to the city tomorrow and walk out with a building permit in less than an hour for minimal fees. There are amble empty lots. Yet, new home pricing here has more than doubled in 5 years. What has really changed is nearly all of the new lots are owned by a handful of companies that retain the exclusive building rights to them and most of the mid size builders have been bought or forced out of the city limits due to inability to buy empty lots.

I am not saying over regulation isn't a problem, but it sure as hell isn't the only problem, and the solution isn't no regulation. We need to fix the regulations that are actually making building harder and especially the ones that price good development that people want to live in. But we need more regulation to break up these monopolies, tax empty land for at least its actual value (at least around here most empty land, even developed empty lots are barely taxed), and actually go after the numerous illegal cartels in the real estate industry.

We should probably make a distinction between SFH builders and the multifamily guys. I would buy the argument that the former is overly consolidated and it is impacting prices for consumers negatively.

 

[K1052]

In other NYC news congestion pricing has had a remarkable impact on vehicle collisions in the zone.




https://bsky.app/profile/nyc.streetsblog.org/post/3lggorgicbc2y