Info Have we learned nothing from the 2007 meltdown?

[fskimospy]

Okay, they are not dropping in absolute value, but in relative value.

There is a well known pattern to gentrification, you are describing second (or perhaps third) wave gentrification. You can basically draw concentric circles around a city center and the gentrification will pulse outward in waves radiating along those circles. It is never exact because some areas hold their value better than other either because of a natural attraction, some economic reason ( for example a large business that is unusually successful), or a social one (successful ghettoism), but it is generally circular, and generally moves together.

And some areas hold their value better because they are places lots of people want to live but government bans new development in them.

 

[SMOGZINN]

And some areas hold their value better because they are places lots of people want to live but government bans new development in them.

It does happen, but not enough to be a major trend. Money overcomes money, and there is money in development. Those forces are pretty well matched.

 

[Paratus]

This. I know I've said it before, but when my wife and I were starting to shop around for mortgages, it's was 2007-08 time frame, and the first Bank we looked into (which we banked with) offered us about 50k more than we could afford on paper, and with a variable rate interest. 50k was about 33% more than we wanted.

My wife and I went home and basically said wtf are they smoking, and didn't even call them back. How many people just say "wowsers, let's do this thing", plenty....which is how we got the collapse.

My folks were thinking about moving around that time and they stopped in at a bank local to the area they were considering to see what interest rates they were offering.

The loan officer pushed them to sign a contract that day. When they said they weren’t buying just looking he said it didn’t matter. When my dad said don’t you want to know whether we have jobs or other debt he said no it was easier not to know.

Anecdotes are not data but that was shady AF and as we later found out he wasn’t the only loan officer pulling shady shit during the crash.

 

[s0me0nesmind1]

My folks were thinking about moving around that time and they stopped in at a bank local to the area they were considering to see what interest rates they were offering.

The loan officer pushed them to sign a contract that day. When they said they weren’t buying just looking he said it didn’t matter. When my dad said don’t you want to know whether we have jobs or other debt he said no it was easier not to know.

Anecdotes are not data but that was shady AF and as we later found out he wasn’t the only loan officer pulling shady shit during the crash.

For what it's worth when making offers on homes you do need pre approval before you can even really make an offer. Not sure if that's what you're referring to.

Even if you're "just looking" ya gotta be prepared. Might run into your dream house that just hit the market and you need to put up an offer asap.

 

[fskimospy]

It does happen, but not enough to be a major trend. Money overcomes money, and there is money in development. Those forces are pretty well matched.

I’m not aware of any research that indicates this. What is it based on? From all research I’m aware of zoning increases home prices, which just reinforces my point. The reason why those poorer areas are becoming more affordable in a relative sense is because the government banned building in other places.

Regardless, if what you’re saying is true then eliminating restrictive zoning won’t matter as the market will achieve the same result. Let’s do it and find out!

 

[SMOGZINN]

I’m not aware of any research that indicates this. What is it based on? From all research I’m aware of zoning increases home prices, which just reinforces my point. The reason why those poorer areas are becoming more affordable in a relative sense is because the government banned building in other places.

Regardless, if what you’re saying is true then eliminating restrictive zoning won’t matter as the market will achieve the same result. Let’s do it and find out!

There are a number of cities that do not have zoning. Houston for example has no zoning. It still has gentrification.

 

[fskimospy]

There are a number of cities that do not have zoning. Houston for example has no zoning. It still has gentrification.

Zoning is not the only thing that affects home prices and gentrification, it's just something that makes it happen more, and in targeted areas as a result of policy changes.

Seriously though, if what you're saying is true and this is just market forces at work then you should have no problem with abolishing zoning as nothing will change, right?

 

[SMOGZINN]

Seriously though, if what you're saying is true and this is just market forces at work then you should have no problem with abolishing zoning as nothing will change, right?

Things would of course change, it will create a lot more mixed residential areas, as zoning mostly limits smaller businesses. What I am saying is that it won't dramatically change the effects of gentrification. Zoning is not a major factor in gentrification, as can be seen in the cities that don't have zoning and still have major gentrification going on as well as older established wealthy areas that resist it.

 

[fskimospy]

Things would of course change, it will create a lot more mixed residential areas, as zoning mostly limits smaller businesses. What I am saying is that it won't dramatically change the effects of gentrification. Zoning is not a major factor in gentrification, as can be seen in the cities that don't have zoning and still have major gentrification going on as well as older established wealthy areas that resist it.

Zoning does not mostly limit smaller businesses and it is a significant factor in rising housing costs that then drive gentrification, as per the academic literature. The only literature that goes against this idea is that which looks at selective upzoning in parts of a city where the rest is still heavily restricted.

Regardless it sounds like we're on the same page that getting rid of zoning is fine.

 

[glenn1]

Zoning is not the only thing that affects home prices and gentrification, it's just something that makes it happen more, and in targeted areas as a result of policy changes.

Seriously though, if what you're saying is true and this is just market forces at work then you should have no problem with abolishing zoning as nothing will change, right?

Just like with most things for you "abolishing zoning" would just be of the zoning rules you dislike and not the ones you favor. Like prohibiting gun stores or vape shops within X meters of a school. Or stopping a pipeline from being built because you think it will somehow mean we'll not use fossil fuels anymore. Or as a weaponized tool in your battle against your perceived mortal enemy "sprawl".

 

[s0me0nesmind1]

Just like with most things for you "abolishing zoning" would just be of the zoning rules you dislike and not the ones you favor. Like prohibiting gun stores or vape shops within X meters of a school. Or stopping a pipeline from being built because you think it will somehow mean we'll not use fossil fuels anymore. Or as a weaponized tool in your battle against your perceived mortal enemy "sprawl".

lol good point and well said.

The anti-Pipeline stuff going around really is for the dumb of the dumb.

 

[fskimospy]

Just like with most things for you "abolishing zoning" would just be of the zoning rules you dislike and not the ones you favor. Like prohibiting gun stores or vape shops within X meters of a school. Or stopping a pipeline from being built because you think it will somehow mean we'll not use fossil fuels anymore. Or as a weaponized tool in your battle against your perceived mortal enemy "sprawl".

It's very strange that you so consistently make up positions for me that I don't remotely hold.

I don't give a shit where gun stores or vape shops are.
I don't give a shit about sprawl.
I was indifferent to the Keystone pipeline.

In fact, you tried this exact same thing about pipelines before and were corrected. Why did you do it again?

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forums.anandtech.com

In fact, @s0me0nesmind1, you even commented about how my position was rational! How things change, haha.

 

[SMOGZINN]

lol good point and well said.

The anti-Pipeline stuff going around really is for the dumb of the dumb.

I don't think many of us are actually anti-pipeline. It is just that they choose a particularly bad place to put the pipeline, that ignored treaties with tribes and protected natural areas because it was cheaper. You have to pretty much assume that pipelines are going to leak some and cause environmental damage, so you need to be conscientious of where you put them

 

[s0me0nesmind1]

It's very strange that you so consistently make up positions for me that I don't remotely hold.

I don't give a shit where gun stores or vape shops are.
I don't give a shit about sprawl.
I was indifferent to the Keystonepipeline.

In fact, you tried this exact same thing about pipelines before and were corrected. Why did you do it again?

Page 9 - California bullet train cost surges by $2.8 billion: 'Worst-case scenario has happened'

Page 9 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.

forums.anandtech.com

In fact, @s0me0nesmind1, you even commented about how my position was rational! How things change, haha.

Your stance is rational. I'm just agreeing with glenn that liberals (Not you) LOVE those zoning regulations when it suits their agenda.

 

[fskimospy]

Your stance is rational. I'm just agreeing with glenn that liberals (Not you) LOVE those zoning regulations when it suits their agenda.

In my experience zoning stupidity cuts across party lines. That being said, I do find it hypocritical that liberals who claim to care about the plight of the poor place that care squarely behind their desire not to change what their neighborhood looks like.

 

[SMOGZINN]

In my experience zoning stupidity cuts across party lines. That being said, I do find it hypocritical that liberals who claim to care about the plight of the poor place that care squarely behind their desire not to change what their neighborhood looks like.

Everyone is for recycling until you ask them to separate their trash.

 

[ralfy]

No, they do not.

Top Derivatives Expert Estimates Size of the Global Derivatives Market at $1,200 Trillion Dollars … 20 Times Larger than the Global Economy | Washington's Blog

washingtonsblog.com

 

[fskimospy]

Top Derivatives Expert Estimates Size of the Global Derivatives Market at $1,200 Trillion Dollars … 20 Times Larger than the Global Economy | Washington's Blog

washingtonsblog.com

Haha, I figured. You might as well have said ‘I don’t know how derivatives work’ because the notional value of them is entirely meaningless.

The derivatives market is filled with things like swaps where I might agree to pay you $1,000,000 every year in exchange for you paying me 1,000,001. The notional value of that? $2,000,001. The actual money changing hands? $1.

 

[dawp]

For what it's worth when making offers on homes you do need pre approval before you can even really make an offer. Not sure if that's what you're referring to.

Even if you're "just looking" ya gotta be prepared. Might run into your dream house that just hit the market and you need to put up an offer asap.

this wasn't pre-approval, from what he wrote it seemed they wanted them to sign away without even knowing if they had the income to cover the loan.

 

[ralfy]

Haha, I figured. You might as well have said ‘I don’t know how derivatives work’ because the notional value of them is entirely meaningless.

The derivatives market is filled with things like swaps where I might agree to pay you $1,000,000 every year in exchange for you paying me 1,000,001. The notional value of that? $2,000,001. The actual money changing hands? $1.

It's meaningless only if one imagines that only "actual money" applies, and that losses are also virtual. In short, those involved are just playing games and make-believe.

Which is what one believes when one doesn't know how derivatives work.

 

[fskimospy]

It's meaningless only if one imagines that only "actual money" applies, and that losses are also virtual. In short, those involved are just playing games and make-believe.

Which is what one believes when one doesn't know how derivatives work.

Oh okay then.

This is why you don’t get a finance education from YouTube videos btw.

 

[Greenman]

Zoning does not mostly limit smaller businesses and it is a significant factor in rising housing costs that then drive gentrification, as per the academic literature. The only literature that goes against this idea is that which looks at selective upzoning in parts of a city where the rest is still heavily restricted.

Regardless it sounds like we're on the same page that getting rid of zoning is fine.

That would be a developers wet dream.
Back in the dark ages I worked for a real estate developer for a short time. High density was where the money was, and the company I worked for wanted to build condos as far as the eye could see. They wanted streets as narrow as the law allowed, and as little parking as possible. Internally those buildings were referred to as "dog boxes".
The fellows that owned the operation did well by it, lear jets, yachats, huge summer homes, all the trappings of wealth and conspicuous consumption on a grand scale.

It would certainly help out my business, no more concerns about ruining the view, no more lot coverage rules, no height restrictions or parking requirements, no design review. It would be a dream come true until it started happening in my neighborhood, then I'd have to move somewhere that had zoning rules...

 

[fskimospy]

That would be a developers wet dream.
Back in the dark ages I worked for a real estate developer for a short time. High density was where the money was, and the company I worked for wanted to build condos as far as the eye could see. They wanted streets as narrow as the law allowed, and as little parking as possible. Internally those buildings were referred to as "dog boxes".
The fellows that owned the operation did well by it, lear jets, yachats, huge summer homes, all the trappings of wealth and conspicuous consumption on a grand scale.

It would certainly help out my business, no more concerns about ruining the view, no more lot coverage rules, no height restrictions or parking requirements, no design review. It would be a dream come true until it started happening in my neighborhood, then I'd have to move somewhere that had zoning rules...

Why on earth do you think the only thing preventing high rise buildings as far as the eye can see is the heavy hand of government regulation prohibiting it? The beauty of my idea is that people who want to live in dense areas will live in dense areas and ones who do not will not. The market will decide and everyone is free to live where things work best for them. Might you have to move if it turns out people in your area want to live differently than you? Sure, but that’s life. Nobody has the right to freeze their neighborhood in amber so that things never change.

Also thanks for bringing up ‘as little parking as possible’. The correct amount of parking the law should require is zero. The amount of valuable land that we waste on what amounts to free car storage is mind boggling. I’ve never understood why people feel entitled to store their possessions on public land for free.

 

[Jhhnn]

That would be a developers wet dream.
Back in the dark ages I worked for a real estate developer for a short time. High density was where the money was, and the company I worked for wanted to build condos as far as the eye could see. They wanted streets as narrow as the law allowed, and as little parking as possible. Internally those buildings were referred to as "dog boxes".
The fellows that owned the operation did well by it, lear jets, yachats, huge summer homes, all the trappings of wealth and conspicuous consumption on a grand scale.

It would certainly help out my business, no more concerns about ruining the view, no more lot coverage rules, no height restrictions or parking requirements, no design review. It would be a dream come true until it started happening in my neighborhood, then I'd have to move somewhere that had zoning rules...

That wouldn't be Houston.

 

[Greenman]

Why on earth do you think the only thing preventing high rise buildings as far as the eye can see is the heavy hand of government regulation prohibiting it? The beauty of my idea is that people who want to live in dense areas will live in dense areas and ones who do not will not. The market will decide and everyone is free to live where things work best for them. Might you have to move if it turns out people in your area want to live differently than you? Sure, but that’s life. Nobody has the right to freeze their neighborhood in amber so that things never change.

Also thanks for bringing up ‘as little parking as possible’. The correct amount of parking the law should require is zero. The amount of valuable land that we waste on what amounts to free car storage is mind boggling. I’ve never understood why people feel entitled to store their possessions on public land for free.

The parking I spoke of was for each dwelling, private parking, not public.

In your free for all scenario, who pays for infrastructure? Roads, sewers, power and water? And what happens when a place like California is developed to the point that there isn't enough water for everyone? Do we again use free market ideas and run the price up to the point that only the very well off can flush their toilets?
Who decides if there is enough energy available for all those condos? Again, is it purely market driven? Folks with cash have lights and AC while those of less means do without? What about bringing basic necessities in to those areas, who decides if the infrastructure can handle the load?
Planning is a requirement of development, deciding how much to build and where to build it is something that requires oversight. We're seeing some of the problems with the lack of this right now. Cities in heavily forested areas with inadequate facilities to deal with major fires, and zoning that doesn't require defenceable areas around those homes. The Oakland hills fire was a near perfect example of this, they had to much fuel, no water to pour on it and houses with wood roofs and wood siding. We all know how that worked out.