Corbin, you wrote all that good stuff about housing supply and you didn't write a word about the land market.
Here's the thing. Lumber, cement, bricks - all commodities. Land isn't a commodity. Land is the value of your development minus the cost of building it. Oh and you pay for land up front.
Why does that matter?
Because it means you can't cut prices to find more sales. If you did, you wouldn't be able to afford the land.
Prices are so high that only a few can afford them but the land market prevents them from cutting prices to what buyers can afford.
Busting the land market would look different in the US than it does here in the UK but that's the key
Put it another way, home building is a manufacturing business strapped to the side of a speculative one. Knock the speculation out and the manufacturing side can do what consumer goods do - cut prices and drive up quality
Not with tiny houses. You can get a lot more tiny houses on the same land as a monstrous McMansion… and they cost less to heat and cool, are affordable, and often have off-grid features like incinerating or composting toilets and solar panels.
In essence, we need a third category beyond for-profit and non-profit: for public profit. Public investment should pay back profits to the public, not be handed over to the Epstein class on gold-plated platters. While I think there is value in a great many areas of endeavor (e.g. NASA), priority must be given to building the things the public needs *right fucking now*: housing, healthcare, safe drinking water, and... dare I say it...? the "defense" industry. Make defense contractors all non-profit (or public profit), and see if we don't have fewer armed conflicts around the entire globe. And some things should NEVER make a profit of any kind, like prisons. They go on the negative side of the government budget balance sheet, and for good reason. If you want to cut those costs, maybe stop incarcerating the largest percentage of your own people of any country in the world? Great piece Corbin!
You have covered many fine points here and how it is effecting the housing market. One element that is never mentioned, likely due to the financial power exerted by the group, and that might be the strongest impact for the housing market is the effect of the purchases from investor groups. One study here in Vermont has calculated that 36% of the middle to lower priced homes here have been purchased by investor groups with roughly the same percentage nation wide! I have to question, with the housing shortage, should investors be allowed to dominate the housing sector that allows first time home owners and families from purchasing homes????
No. Our town has been ruined for local residents for this very reason. You can rent (exorbitant) but you can't buy because all the homes belong to companies that rent them. And the barrier has to be lifted so not only first-time home owners are covered. Mature families and seniors often have to sell and move.
You seem to be assuming that houses will continue to be built "retail", but what if housing were shifted to a "wholesale" model, and houses were built in factories and shipped by the truckload to be assembled on-site? I suspect such a change might solve much of the labor problem, would lower the cost, and make use of materials more efficiently.
I live near the very red county seat in a ruby red state. Within the city limits a small community of tiny homes are being built for veterans!
I think this idea of tiny (2-300 sq ft) to small (4-600 sq ft) home communities could be a stop gap solution to the housing shortage. Especially for first time home buyers and retirees looking to downsize. Many of these homes are being built from repurposed shipping containers and are relatively inexpensive.
All of your ideas are great and should be implement, but at least something like this could be started immediately.
We have the opportunity to revamp our public education here as well. Apprenticeship programs were common once. We need the full range of education from hands-on to think tank. We need engineers to help us learn to use the city lands we already have to build better rather than going back to stick built which is monstrously expensive and resource sucking. We don't need to have another round of "Projects" housing the poor to the benefit of all the wrong people, and we must rethink parking and public transportation right along with housing. Nothing is separate, nothing is free. Great essay!
Thinking inside the box includes using the boxes we already built. So many markets have ample retail, office, and manufacturing space empty. How will we honor the intent of residential building codes in new ways, such as to creatively use these spaces for housing and avoid emitting all the carbon required to knock these down to build new structures?!
It gets super tricky given how residential power / water / sewage stacks are distributed. It’s just really different and hard to retrofit.
But I am encouraged by the example of pod hotels or hostels, with sleeping space separate from communal spaces (bathrooms, kitchens, etc). I don’t think we want to go toward actual pods but micro apartments would be great.
This mall in Providence was turned into micro apartments, at $550 monthly rent, meant to help solve the housing crisis… though now they sell like full houses, a quarter to third million dollars. Sad, they couldn’t let the rest of us just have it.
Public enterprise is desperately needed for all the reasons Corbin repeatedly describes. But we have to be clearer that we're not talking about making everything government run -- we've seen how poorly totally centralized economies run and how easily that concentration of power can be abused. We need ways to combine the foundation of public investment and ownership with the creativity and democracy-supporting energy of decentralization. One example: Social housing rather than traditional "public housing" -- removed from total market pressure by public ownership (or Land Trust ownership) of the land but controlled by the tenants and allowing limited but limited capital appreciation to them over time by permenantly removing the cost of the land from the resale calculation and setting an inflation-adjusted cap on resale prices. Another example: Mondragon style cooperatives that "own" factories and other businesses, combined with a version of "B corporation" status.
We also need to be clear about what parts of the economy need this kind of public sector intervention. Years ago, Ralph Nader said we need a non-profit alternative to provide a check on industries in which three or fewer private firms dominate the market. We definitely need to create better options in the financial sector (and probably forbid or destructively tax certain types of speculative activity). The British Labor Party once (long ago) said that public ownership should be focused on critical infrastructure and the "commanding heights" of the economy. And Bernie Sanders isn't the only one saying that all commercial activity built on publicly-funded research and grants owes the public either a cut of profits or ownership or both.
But the key point is that we're not trying to create another Stalinist monstrosity.
We’re victims of enclosure - today’s commons effectively privatized to the benefit of the billionaire class (and the newly endowed trillionaire). The solidarity economy must rebuild (and reclaim) the commons to de-commodify our survival. Housing cooperatives, community land trusts, worker cooperatives and the supporting ecosystem that makes accessible (collectively so) the resources essential for subsistence.
To understand how the New Deal made things happen, read David Lilienthal's little book 'Democracy on the March'. Lilienthal was head of TVA. He tells, in numerical detail and in often poetic prose, how TVA built new industry, new skills and new farms in an area that wasn't accustomed to building anything.
How much of the price increases is due to private equity buying up the housing market and pricing individual home buyers out of the market? You didn't mention that which seems to be significant. Seems like laws against private equity owning single family homes would help as well.
David, 3-D printed housing has been done on a very small scale and it is cost effective and hurricane and fire resistant. It could be the answer with enough support behind it.
Yes, I believe it was in Ohio. I remember reading about it. If I remember correctly there was a lot of grifting and graft involved that sunk the project. The technology is sound. It just needs non corrupt people behind it.
This is the first time I have read one of your commentaries and I am hugely impressed! I've never seen this perspective elsewhere and I learned a lot. I look forward to reading you more closely now because this is the kind of information I need to shape my next novel about working people taking the steps toward participatory democracy and utopia.
Many useful points here. But how do we square this with the climate crisis and the loss of biodiversity. I watch housing developments being built on land that previously supported birds (dropping populations, insects, etc.—all populations dropping). I see our city bunching up buildings and exacerbating the urban heat island. And so forth.
Corbin, you wrote all that good stuff about housing supply and you didn't write a word about the land market.
Here's the thing. Lumber, cement, bricks - all commodities. Land isn't a commodity. Land is the value of your development minus the cost of building it. Oh and you pay for land up front.
Why does that matter?
Because it means you can't cut prices to find more sales. If you did, you wouldn't be able to afford the land.
Prices are so high that only a few can afford them but the land market prevents them from cutting prices to what buyers can afford.
Busting the land market would look different in the US than it does here in the UK but that's the key
Put it another way, home building is a manufacturing business strapped to the side of a speculative one. Knock the speculation out and the manufacturing side can do what consumer goods do - cut prices and drive up quality
Not with tiny houses. You can get a lot more tiny houses on the same land as a monstrous McMansion… and they cost less to heat and cool, are affordable, and often have off-grid features like incinerating or composting toilets and solar panels.
But that's exactly my point. The landowner knows what you can build on the land - because the zoning/planning consent tells him.
He then charges a price that reflects that permission.
Aluminium suppliers and chip manufacturers do not typically adjust the price of their wares based on what you plan to build out of them
In essence, we need a third category beyond for-profit and non-profit: for public profit. Public investment should pay back profits to the public, not be handed over to the Epstein class on gold-plated platters. While I think there is value in a great many areas of endeavor (e.g. NASA), priority must be given to building the things the public needs *right fucking now*: housing, healthcare, safe drinking water, and... dare I say it...? the "defense" industry. Make defense contractors all non-profit (or public profit), and see if we don't have fewer armed conflicts around the entire globe. And some things should NEVER make a profit of any kind, like prisons. They go on the negative side of the government budget balance sheet, and for good reason. If you want to cut those costs, maybe stop incarcerating the largest percentage of your own people of any country in the world? Great piece Corbin!
Iris, you have some great points there!
I wish I could restack this comment! You’re so right.
You have covered many fine points here and how it is effecting the housing market. One element that is never mentioned, likely due to the financial power exerted by the group, and that might be the strongest impact for the housing market is the effect of the purchases from investor groups. One study here in Vermont has calculated that 36% of the middle to lower priced homes here have been purchased by investor groups with roughly the same percentage nation wide! I have to question, with the housing shortage, should investors be allowed to dominate the housing sector that allows first time home owners and families from purchasing homes????
No. Our town has been ruined for local residents for this very reason. You can rent (exorbitant) but you can't buy because all the homes belong to companies that rent them. And the barrier has to be lifted so not only first-time home owners are covered. Mature families and seniors often have to sell and move.
You seem to be assuming that houses will continue to be built "retail", but what if housing were shifted to a "wholesale" model, and houses were built in factories and shipped by the truckload to be assembled on-site? I suspect such a change might solve much of the labor problem, would lower the cost, and make use of materials more efficiently.
I live near the very red county seat in a ruby red state. Within the city limits a small community of tiny homes are being built for veterans!
I think this idea of tiny (2-300 sq ft) to small (4-600 sq ft) home communities could be a stop gap solution to the housing shortage. Especially for first time home buyers and retirees looking to downsize. Many of these homes are being built from repurposed shipping containers and are relatively inexpensive.
All of your ideas are great and should be implement, but at least something like this could be started immediately.
Yes!!! You get it!
We have the opportunity to revamp our public education here as well. Apprenticeship programs were common once. We need the full range of education from hands-on to think tank. We need engineers to help us learn to use the city lands we already have to build better rather than going back to stick built which is monstrously expensive and resource sucking. We don't need to have another round of "Projects" housing the poor to the benefit of all the wrong people, and we must rethink parking and public transportation right along with housing. Nothing is separate, nothing is free. Great essay!
Thinking inside the box includes using the boxes we already built. So many markets have ample retail, office, and manufacturing space empty. How will we honor the intent of residential building codes in new ways, such as to creatively use these spaces for housing and avoid emitting all the carbon required to knock these down to build new structures?!
It gets super tricky given how residential power / water / sewage stacks are distributed. It’s just really different and hard to retrofit.
But I am encouraged by the example of pod hotels or hostels, with sleeping space separate from communal spaces (bathrooms, kitchens, etc). I don’t think we want to go toward actual pods but micro apartments would be great.
This mall in Providence was turned into micro apartments, at $550 monthly rent, meant to help solve the housing crisis… though now they sell like full houses, a quarter to third million dollars. Sad, they couldn’t let the rest of us just have it.
https://www.goodgoodgood.co/articles/rhode-island-mall-turned-affordable-housing
I know you've been writing about this for a while, but today's article seems to put it all in a nutshell.
Your perspective is quite acute and focuses like a laser. Thanks for this and I hope it will get more public notice.
Public enterprise is desperately needed for all the reasons Corbin repeatedly describes. But we have to be clearer that we're not talking about making everything government run -- we've seen how poorly totally centralized economies run and how easily that concentration of power can be abused. We need ways to combine the foundation of public investment and ownership with the creativity and democracy-supporting energy of decentralization. One example: Social housing rather than traditional "public housing" -- removed from total market pressure by public ownership (or Land Trust ownership) of the land but controlled by the tenants and allowing limited but limited capital appreciation to them over time by permenantly removing the cost of the land from the resale calculation and setting an inflation-adjusted cap on resale prices. Another example: Mondragon style cooperatives that "own" factories and other businesses, combined with a version of "B corporation" status.
We also need to be clear about what parts of the economy need this kind of public sector intervention. Years ago, Ralph Nader said we need a non-profit alternative to provide a check on industries in which three or fewer private firms dominate the market. We definitely need to create better options in the financial sector (and probably forbid or destructively tax certain types of speculative activity). The British Labor Party once (long ago) said that public ownership should be focused on critical infrastructure and the "commanding heights" of the economy. And Bernie Sanders isn't the only one saying that all commercial activity built on publicly-funded research and grants owes the public either a cut of profits or ownership or both.
But the key point is that we're not trying to create another Stalinist monstrosity.
The steel mill I worked for, Inland Steel, was "closed and scrapped" 30 years ago.
We’re victims of enclosure - today’s commons effectively privatized to the benefit of the billionaire class (and the newly endowed trillionaire). The solidarity economy must rebuild (and reclaim) the commons to de-commodify our survival. Housing cooperatives, community land trusts, worker cooperatives and the supporting ecosystem that makes accessible (collectively so) the resources essential for subsistence.
To understand how the New Deal made things happen, read David Lilienthal's little book 'Democracy on the March'. Lilienthal was head of TVA. He tells, in numerical detail and in often poetic prose, how TVA built new industry, new skills and new farms in an area that wasn't accustomed to building anything.
How much of the price increases is due to private equity buying up the housing market and pricing individual home buyers out of the market? You didn't mention that which seems to be significant. Seems like laws against private equity owning single family homes would help as well.
David, 3-D printed housing has been done on a very small scale and it is cost effective and hurricane and fire resistant. It could be the answer with enough support behind it.
Wasn’t there a disastrous effort to print houses in Ohio?
Yes, I believe it was in Ohio. I remember reading about it. If I remember correctly there was a lot of grifting and graft involved that sunk the project. The technology is sound. It just needs non corrupt people behind it.
This is the first time I have read one of your commentaries and I am hugely impressed! I've never seen this perspective elsewhere and I learned a lot. I look forward to reading you more closely now because this is the kind of information I need to shape my next novel about working people taking the steps toward participatory democracy and utopia.
David R. Yale
www.DavidRYale.Com
Many useful points here. But how do we square this with the climate crisis and the loss of biodiversity. I watch housing developments being built on land that previously supported birds (dropping populations, insects, etc.—all populations dropping). I see our city bunching up buildings and exacerbating the urban heat island. And so forth.