{"items": [{"author": "Dave", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939531419382", "anchor": "fb-939531419382", "service": "fb", "text": "Or get rid of parking minimums altogether, and just start charging market rates ($1000+ per year) for parking permits. I do not take neighbors at their word when they say their objections to more housing near them are entirely because of street parking.
We already have the process you propose in DC (though I don't really think it's legal). As part of the Planned Unit Development process, some new apartment buildings have forced all tenants to sign agreements that they will not apply for residential parking permits. Those apartments have then gotten exemptions from DC's ridiculously high parking minimums. But those agreements did nothing to quell some neighbors' opposition to the projects.", "timestamp": "1525096661"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939531419382&reply_comment_id=939534947312", "anchor": "fb-939531419382_939534947312", "service": "fb", "text": "→ Just removing parking minimums wouldn't do much to increase the possible density here, and without increasing density you can't decouple the cost of land (unavoidably high) from the cost of housing (limited mostly just by the cost of construction)", "timestamp": "1525096830"}, {"author": "Dave", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939531419382&reply_comment_id=939536648902", "anchor": "fb-939531419382_939536648902", "service": "fb", "text": "→ I was only addressing your proposal to allow exemptions for parking minimums if buildings opt out of residential parking permits. I think my proposal is simpler, fairer, and better at getting excess cars off the streets.", "timestamp": "1525097277"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939531419382&reply_comment_id=939540211762", "anchor": "fb-939531419382_939540211762", "service": "fb", "text": "→ Market rates for street parking is fine with me. One way to deal with the way this is regressive is just to distribute the money it raises among all residents: https://www.jefftk.com/p/pricing-benefiting-everyone", "timestamp": "1525098402"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939585381242", "anchor": "fb-939585381242", "service": "fb", "text": "If it's profitable to replace basically all existing building under your rules, then I think your justification for the new price falls apart.
I agree that prices would drop a lot, but it seems like part of the reason for your result is this assumption that the upgrade is only marginally profitable. It's also possible the upgrade is just a big gain on all properties, in which case I don't think your (clever!) approach can tell us anything.", "timestamp": "1525122438"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939585381242&reply_comment_id=939586893212", "anchor": "fb-939585381242_939586893212", "service": "fb", "text": "→ Yes, I think there's not enough demand to replace the whole city at that density. If there was I'd advocate a higher density.", "timestamp": "1525123138"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939585381242&reply_comment_id=939590560862", "anchor": "fb-939585381242_939590560862", "service": "fb", "text": "→ I would expect that anyone who doesn't already agree with you about rents dropping a lot also disagrees just as much with that assumption.", "timestamp": "1525125185"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939585381242&reply_comment_id=939593365242", "anchor": "fb-939585381242_939593365242", "service": "fb", "text": "→ Somerville population is 80k; so that implies thinking you'd get a significant fraction of 340k people. I guess that's possible.", "timestamp": "1525126134"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939585381242&reply_comment_id=939593709552", "anchor": "fb-939585381242_939593709552", "service": "fb", "text": "→ I don't have much intuition about what would happen in such different circumstances.", "timestamp": "1525126433"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939593445082", "anchor": "fb-939593445082", "service": "fb", "text": "Just to check how much I should take away from your model:
This price is a lower bound on prices for anywhere that the construction density you're talking about is at least marginally profitable, right?
Plenty of (much less dense) places have lower prices. At first it was unintuitive to me that our prices would be higher even with demand not saturated... but I guess the reason that makes sense is that construction is more expensive at the density you're talking about than it is in much less dense places?
So in your model, demand is relevant in that it's pushed construction costs up a bit. But not more relevant than that?", "timestamp": "1525126211"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939593445082&reply_comment_id=939593749472", "anchor": "fb-939593445082_939593749472", "service": "fb", "text": "→ Construction cost definitely varies, but there's also that existing structures often sell for less than it would cost to build the same sqft (or buy the same sqft in new construction). Like, an old farmhouse in a rural area where demand has fallen would be extremely cheap.", "timestamp": "1525126459"}, {"author": "Brian", "source_link": "https://plus.google.com/114156500057804356924", "anchor": "gp-1525127834318", "service": "gp", "text": "Land that's zoned for four-story housing will be worth more, because you can build more on it. I wonder if that changes the numbers significantly?", "timestamp": 1525127834}, {"author": "Lucas", "source_link": "https://plus.google.com/117844313637558297240", "anchor": "gp-1525140510511", "service": "gp", "text": "I recently attended a forum on homelessness in Porter Square, where the Cambridge mayor was a panelist. He seemed confident that Cambridge is poised to re-zone the Mass Ave corridor for denser, five-story development before the end of this year. The increased density would be permitted by right for structures with ground-floor retail and above-ground housing, provided that a majority of the housing is officially designated as affordable housing. I hope that actually happens -- I'd be very interested to see the results.", "timestamp": 1525140510}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939667581512", "anchor": "fb-939667581512", "service": "fb", "text": "Today MR linked to an econ article relating marginal increases in housing stock to rent changes. Haven't looked in detail but might be relevant.
https://marginalrevolution.com/.../will-take-reduce-bay...", "timestamp": "1525176833"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939667581512&reply_comment_id=939670575512", "anchor": "fb-939667581512_939670575512", "service": "fb", "text": "→ The paper they're summarizing observes a 3% decrease in rents for every 2% increase in housing stock, and then MR extrapolates this to see what it would take to bring rents down to 27.5% of the AMI. I'm not optimistic about extrapolating this far out of the observed range, but I guess that implies you'd only get ~30% more housing under my massive upzoning proposal before rents fell to where building more wasn't profitable.", "timestamp": "1525178901"}, {"author": "David Chudzicki", "source_link": "https://www.facebook.com/jefftk/posts/939523215822?comment_id=939667581512&reply_comment_id=939671862932", "anchor": "fb-939667581512_939671862932", "service": "fb", "text": "→ \"you'd only get ~30% more housing\"
such a pessimistic phrasing! How about \"you'd only need 30% more housing before...\"
:)
I guess this supports your view that your proposed upzoning is plenty. But I agree with your skepticism of the extrapolation. (Although if we thought about it we might be able to convince ourselves that the extrapolation is likely to err in a particular direction, e.g. rents decreasing even more than it says.)", "timestamp": "1525179865"}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1525177401348", "service": "gp", "text": "Neat! Some questions about this analysis, which may be unanswerable:\n
\n
\n1. If most Somerville lots are already nonconforming, are they nonconforming by enough to make 0.75 the wrong factor to use in your price prediction?\n
\n
\n2. Aren't you assuming that your new zoning rules are permissive enough to clear the market? Personally, I bet that would happen in some but not all parts of Somerville.\n
\n
\n3. Will a significantly denser Somerville need more land-consuming infrastructure of other kinds - grocery stores, laundromats, schools, restaurants, bars, whatever? If so, that complicates the zoning change and cuts into the land use ratios.\n
\n
\n4. To what extent are there network effects, i.e. does densifying Somerville increase intrinsic demand for Somerville?", "timestamp": 1525177401}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1525186950951", "service": "gp", "text": "@David German\n 1: Surprisingly enough, 0.75 is the mean FAR for RA/RB in Somerville. \nhttps://www.jefftk.com/ra-rb-report-final-web.pdf\n has \"the RA and RB districts have a mean FAR\n
\nof .72 and .78 respectively\" and taking a weighted average by the number of lots in each you get 0.752 FAR. That the existing lots have a range of FARs makes things better, though, because ones with low FAR would be more likely to be replaced (21% of lots are under 0.5 FAR).", "timestamp": 1525186950}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1525187037509", "service": "gp", "text": "2: Yes, \nhttps://marginalrevolution.com/marginalrevolution/2018/05/will-take-reduce-bay-area-housing-costs.html\n predicts that you'd need much less than 4x density to get things down to that level (thanks \n@David Chudzicki\n), though it involves extrapolating pretty far out of the measured range.", "timestamp": 1525187037}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1525187095437", "service": "gp", "text": "3: I would expect that you could build those up similarly? The main thing you can't build up is open space.", "timestamp": 1525187095}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1525187145336", "service": "gp", "text": "4: There's probably an increase, but I think increasing demand for Somerville combined with falling rent prices would be a very good outcome!", "timestamp": 1525187145}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1525228923695", "service": "gp", "text": "2: That MR post is talking about an entire metro area, right? Somerville right now is less than 2% of the greater Boston population.\n
", "timestamp": 1525228923}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1525263099012", "service": "gp", "text": "Actually, hang on - what value does your model imply for unimproved land in Somerville after the policy change? ", "timestamp": 1525263099}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1525263567857", "service": "gp", "text": "@David German\n I would expect an empty lot to be worth about the same as a lot with a house that would be torn down, since the cost of demolition is very low.", "timestamp": 1525263567}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1525267530429", "service": "gp", "text": "But you're also saying that construction will stop short of the entire city. Doesn't that mean land values will be near zero, or at least small relative to construction cost?\n
\n
\nHere's my counter prediction: the entire city will be rebuilt to the new limit over a couple decades. Relative to the counterfactual, rents will be reduced in rough proportion to the housing supply increase for the whole metro area, i.e. a few percent. \n
\n
\nThis would still be a great outcome, of course! Rent prices are not a good measure of utility. ", "timestamp": 1525267530}]}