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PaperclipPerfector  2yr ago (text post)   30329 thread views

Culture War Roundup for the week of July 31, 2023

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It’s clear that Americans do want this kind of housing. The handful of ex-NYC neighborhoods that offer even the vaguest semblance of this kind of lifestyle are often extremely expensive. See Venice and Santa Monica in LA, Georgetown in Washington, D.C., Back Bay in Boston and so on.

The problem is that the only way this kind of thing emerges organically is because it was already there or because of the gentrification of dense urban neighborhoods that survived the 20th century (eg. what has happened in Brooklyn since the 1980s). You can’t build it because large downtown parcels of contiguous land rarely come up for sale and when they do developers would prefer to build a few big condo buildings, a large parking lot (often mandated by zoning laws) and stuff a small mall on the lower levels instead of creating more of a mid-rise community. And in many US cities where downtowns were hollowed out for parking lots and office buildings between 1950 and 1980, there just isn’t the residential capacity to make the network of small local businesses that bring that kind of community to life viable. So there’s a chicken-and-egg problem to it.

Amen, thank you for beating this drum with me. The market has shown that people will pay a ton for this kind of housing, and any sort of mixed-use residential/commercial developments that do get built are typically very high-class and quite desirable. Prices reflect that reality.

The true cause of these issues, specifically the large parcels of land being sat on, goes down to how we value/price land in the US. Land values at local assessors' offices are literally calculated by taking an arbitrary % of the total value, and saying "That's the land value!". You will see values of improvements (buildings) jump up 20-30% in one year, and assessors just shrug their shoulders and say 'that's how our system calculated it.' It is utterly absurd.

What's worse is that many large department stores, like Walmart etc, who buy these massive parcels of land often have specific tax cuts for them that they carve out with local government. On top of that, the plattage effect means that land value does not rise linearly with square footage, it drops off as you get an increasingly large parcel. There are good reasons for that, but it turns into a situation where large retail stores can acquire massive amounts of land for cheap, and they do.

This isn't even getting into land speculators who sit on vacant land for years as an investment, because they know it's one of the safest investments out there. After the massive housing price raise during Covid we're seeing far more activity in the land speculation space as well. For some reason we've decided to tax buildings, the things that actually generate economic activity and benefit, far more than land. This is ridiculous because useful land parcels in desirable locations are scarce and if you let people sit on them, you miss out on a ton of opportunity to beautify a space, create new businesses, or just leave the land to nature.

IMO dense cities should have practically 0 vacant lots sitting there, ever. Land needs to be taxed far higher than it is currently.

There are plenty of areas in NYC that are dense* and safe middle class neighborhoods. Jackson Heights, Forest Hills, etc.

*Relative to most of the rest of the US.

According to this, "Median household income in 2021 was $69,880[.]" The 2021 median income for the US as a whole was $70,784.

Per www.streeteasy.com there are currently 48 2-bed+ apts for sale in Jackson Heights. Fifteen are listed at under $400K. There are only two for more than $800K,

I suggest you look at Streeteasy, which is the go-to site for NY real estate. I see a 1050 sq ft unit for 425K, five separate 1000 sq ft units in the $340 range; several others with no sq ft listed but with floor plans.

still seems insane for what you get,

Well, we all know that NYC apts tend to be small. But that is the nature of the city. There are plenty of much more expensive places in more upscale areas that are no larger. It really says nothing about whether a particular area is middle class. As i noted, the median household income there is right at the US median.

also has an $850 per month HOA fee.

Remember, most of the places you see are coops, and that means that the HOA fee includes property tax, insurance and, usually, heat and water. In some places it includes the electric bill, but I think that is rare. Plus, the HOA fee covers garbage and other standard city services fees.

I honestly don't understand how a household making 70k a year can afford a 340k apartment.

Since only about 65% of households own their homes, the median income of homeowners is presumably higher than the median income overall.

And it looks like median income in Pittsburgh (to choose an average city) is 54K, while the median home price is 275,000, or about 5x higher. About the same as 70k versus 340k.

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