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On March 22 2018 19:56 Velr wrote:Show nested quote +On March 22 2018 11:55 Plansix wrote:On March 22 2018 11:51 Nyxisto wrote:
What exactly is the difference between a condo an an apartment complex? And I don't really see how urban planning solves much given that in plenty of cities urban planning achieves nothing but restrictions on new buildings. Really? A condo is owned. An apartment is rented. More condos being sold to people reduces mobility and eats up flex able housing. Boston and Worcester had a huge problem and still do. People took all the three family houses and turned them into tiny unit condos, sold each unit for a pretty good price and moved on. It is more profitable in the short term to build condos, since you sell them and get the RIO right away. So companies just built more condos, rather than apartments. So there are fewer rentals available and no one is building new rentals. Hence the housing shortage and skyrocketing rent. Zoning solves this problem by saying "Enough with the condos, builds apartments." I have never heard of this distinction between appartments and condos. If a Company buys/builds condos, it will then let people rent them or people buy them and then life or rent them to others themsleves? Wtf is the diffrence diffrence?
A condo is a unit within a larger building that is separately owned. In the US, the owner owns the space within the condo, but not the walls, roof or other exterior. Those are owned jointly by all the unit owners and they work as a community to upkeep the structure.
Condo units can be rented just like houses can be rented. So a condo can be an apartment. But in general condos are more full featured than apartments, because they are designed for long term ownership. Rental housing is a long term investment where the property owner is trying to make a profit off of renting the units over a decade or more. Condos are built to be sold once construction is completed, so a short term investment with a quick pay off due to the sale of the units.
From working 10 years around and in real estate sales, there is not a lot of incentive to build apartment buildings in the US any more. It is a problem cities are facing because they need to house the people who make the city run. Garbage pickup needs a place to live and raise their families.
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On March 22 2018 22:42 Plansix wrote:Show nested quote +On March 22 2018 19:56 Velr wrote:On March 22 2018 11:55 Plansix wrote:On March 22 2018 11:51 Nyxisto wrote:
What exactly is the difference between a condo an an apartment complex? And I don't really see how urban planning solves much given that in plenty of cities urban planning achieves nothing but restrictions on new buildings. Really? A condo is owned. An apartment is rented. More condos being sold to people reduces mobility and eats up flex able housing. Boston and Worcester had a huge problem and still do. People took all the three family houses and turned them into tiny unit condos, sold each unit for a pretty good price and moved on. It is more profitable in the short term to build condos, since you sell them and get the RIO right away. So companies just built more condos, rather than apartments. So there are fewer rentals available and no one is building new rentals. Hence the housing shortage and skyrocketing rent. Zoning solves this problem by saying "Enough with the condos, builds apartments." I have never heard of this distinction between appartments and condos. If a Company buys/builds condos, it will then let people rent them or people buy them and then life or rent them to others themsleves? Wtf is the diffrence diffrence? A condo is a unit within a larger building that is separately owned. In the US, the owner owns the space within the condo, but not the walls, roof or other exterior. Those are owned jointly by all the unit owners and they work as a community to upkeep the structure. Condo units can be rented just like houses can be rented. So a condo can be an apartment. But in general condos are more full featured than apartments, because they are designed for long term ownership. Rental housing is a long term investment where the property owner is trying to make a profit off of renting the units over a decade or more. Condos are built to be sold once construction is completed, so a short term investment with a quick pay off due to the sale of the units. From working 10 years around and in real estate sales, there is not a lot of incentive to build apartment buildings in the US any more. It is a problem cities are facing because they need to house the people who make the city run. Garbage pickup needs a place to live and raise their families.
There is not a lot of incentive to build low income housing in general. When your education system draws property taxes you create a divide. High income housing is more profitable because the area is more likely to increase in value drawing more profits. When you build low income housing, that area isn't going to have the best school in the county and the property values aren't going to go up as fast as a nicer neighborhood. It has nothing to do with apartments versus condos. Condos are naturally associated with higher income housing.
Not sure how well this translates to the EU though. I don't think they do local education funding, but I imagine higher income housing being better profit wise is probably true.
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Seems to me that apartment and condo are the exact same thing in terms of building terms. It's just that they are different legal structures in how ownership works?
And due to that, what you guys call "apartments" are generally lower quality/smaller and what you guys call "condos" are larger and higher quality.
Is that about right?
Because then the EU market is completely different, and it's basically all the same thing. There are just upper class apartment/condos and lower class apartment/condos. And finally there is public housing which is government-subsidized apartment/condos (yes, in some countries here you can buy your government-subsidized apartment).
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The concept of a condominium is very much a legal fiction created to allow separate ownership of different units. They can be the same thing. Plenty of condos are rented. But few are built with the express purpose to be affordable housing.
The entire discussion seems to have gotten into the weeds a bit. The main point that Semo and I were making was that the intent of the construction matters. Affordable housing is rarely created by the free market real estate sales, especially in the global market. Currently in Boston a huge condo complex sits half empty because foreign investors bought up a lot of the units and are just camping them as investments. Rhode Island cities have been forced to create a “vacant property” tax to combat this problem because new construction is sitting vacant. I am sure that many of the EU countries are having similar problems on some level.
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On March 23 2018 00:16 Plansix wrote:
The concept of a condominium is very much a legal fiction created to allow separate ownership of different units. They can be the same thing. Plenty of condos are rented. But few are built with the express purpose to be affordable housing.
The entire discussion seems to have gotten into the weeds a bit. The main point that Semo and I were making was that the intent of the construction matters. Affordable housing is rarely created by the free market real estate sales, especially in the global market. Currently in Boston a huge condo complex sits half empty because foreign investors bought up a lot of the units and are just camping them as investments. Rhode Island cities have been forced to create a “vacant property” tax to combat this problem because new construction is sitting vacant. I am sure that many of the EU countries are having similar problems on some level.
The intent of the construction is always to make money though. Why is it that creating housing that isn't even used is more profitable than low income housing?
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That's just not true. In the generation of my parents many people were building houses before they were 30, at free market conditions.
It's the capital price to work price ratio that has increased massively since then, that's it. I whole-heartetly agree that this is also due to a lack of planning in development, which changed the supply-side of land.
But in the end it doesn't matter if your state plans areas better, yet privateers don't have enough income to buy the land, companies can't get enoug ROI from income dependent people to justify the capital investment and the state can't afford building itself because all its taxes are income dependent as well. (That is of course unless the state bypasses the capital prices)
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On March 23 2018 02:07 Blitzkrieg0 wrote:Show nested quote +On March 23 2018 00:16 Plansix wrote:
The concept of a condominium is very much a legal fiction created to allow separate ownership of different units. They can be the same thing. Plenty of condos are rented. But few are built with the express purpose to be affordable housing.
The entire discussion seems to have gotten into the weeds a bit. The main point that Semo and I were making was that the intent of the construction matters. Affordable housing is rarely created by the free market real estate sales, especially in the global market. Currently in Boston a huge condo complex sits half empty because foreign investors bought up a lot of the units and are just camping them as investments. Rhode Island cities have been forced to create a “vacant property” tax to combat this problem because new construction is sitting vacant. I am sure that many of the EU countries are having similar problems on some level. The intent of the construction is always to make money though. Why is it that creating housing that isn't even used is more profitable than low income housing?
Well the intent of low income housing is to solve a problem that must be addressed and hopefully make money long term. It is long term profits vs short term profits. And it can be solved through a number of means. This isn’t an impossible problem to solve at all. We have all done it before in recent history. Just not in the last 30 years or so on any large scale. But as Big J says above, there isn't a lot of reasons for big investors to build low income housing and hold on to it for 30 years or so.
And it can be a huge boon to cities and the economy as a whole. Cutting down on the cost of living can open up funds to be spent on new parts of the economy.
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On March 23 2018 00:16 Plansix wrote:
The concept of a condominium is very much a legal fiction created to allow separate ownership of different units. They can be the same thing. Plenty of condos are rented. But few are built with the express purpose to be affordable housing.
The entire discussion seems to have gotten into the weeds a bit. The main point that Semo and I were making was that the intent of the construction matters. Affordable housing is rarely created by the free market real estate sales, especially in the global market. Currently in Boston a huge condo complex sits half empty because foreign investors bought up a lot of the units and are just camping them as investments. Rhode Island cities have been forced to create a “vacant property” tax to combat this problem because new construction is sitting vacant. I am sure that many of the EU countries are having similar problems on some level.
Vacant property isn't really a thing in much of Europe, and it's a little bit of a meme in general. A few thousand empty houses in a city of millions of people isn't going to drastically change the price. The condo thing is still entirely opaque to me. What's the difference between keeping condo units empty and keeping an entire apartment complex empty?
It still doesn't change anything about the fact that housing will get cheaper if you increase the supply of housing. It doesn't matter whether you rent out condo units or whether you rent out apartments. Density is what matters.
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Who increases the supply/density of housing at what cost for whom to buy/rent, Nyxisto?
I think everyone here understands the basic dynamics of supply and demand. But someone has to pay the prices, so it must be in some way economically benefitial for those who have to pay.
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On March 23 2018 04:42 Nyxisto wrote:Show nested quote +On March 23 2018 00:16 Plansix wrote:
The concept of a condominium is very much a legal fiction created to allow separate ownership of different units. They can be the same thing. Plenty of condos are rented. But few are built with the express purpose to be affordable housing.
The entire discussion seems to have gotten into the weeds a bit. The main point that Semo and I were making was that the intent of the construction matters. Affordable housing is rarely created by the free market real estate sales, especially in the global market. Currently in Boston a huge condo complex sits half empty because foreign investors bought up a lot of the units and are just camping them as investments. Rhode Island cities have been forced to create a “vacant property” tax to combat this problem because new construction is sitting vacant. I am sure that many of the EU countries are having similar problems on some level. Vacant property isn't really a thing in much of Europe, and it's a little bit of a meme in general. A few thousand empty houses in a city of millions of people isn't going to drastically change the price. The condo thing is still entirely opaque to me. What's the difference between keeping condo units empty and keeping an entire apartment complex empty? It still doesn't change anything about the fact that housing will get cheaper if you increase the supply of housing. It doesn't matter whether you rent out condo units or whether you rent out apartments. Density is what matters.
Thats as I'm trying to say is simply not true in practice. Condos are more expensive then apartments and increase their personal and local property value more then apartments do.
The density thing is an issue but is not as much of an issue as condos inflating the price of housing.
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you're rearranging deck chairs on the titanic. Condos aren't expensive because they are condos, which isn't an explanation in the first place, they can only increase their property value because they exist in an environment of insufficient supply. It doesn't matter whether you have condos or apartments as long as the overall supply of housing expands. They simply cannot keep rising in value if they're subject to competition on the housing market. People could just as well build luxury apartments instead of luxury condos.
This is basically analog to the claim that organic food rises food prices. Which is obviously not true, organic food is more expensive because you buy organic food in the sort of neighbourhoods that are well off anyway, you're confusing correlation and causation.
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Renting a condo cost more than the mortgage on the condo, because the person renting the condo needs to pay that mortgage. And there are condo fees as well. That is not true for a multifamily house, which does not have its own mortgage, insurance or condominium fees. Apartment buildings are cheaper than condos for renters.
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If that is the case then allowing easy development will result in more apartments being build and your problem is solved. That is the takeaway from that Tokyo article. Because developers are free to build whatever they want, they're going to build the thing that meets the demand. It doesn't make sense to build a ton of expensive condos in places where nobody can afford those condos. Only by strict zoning and restricting the supply of more housing can luxury development survive.
Given that Tokyo has almost no restrictions to build every developer could theoretically build a luxurious castle on their property. Obviously nobody does because it would make no economical sense.
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How do you get that? allowing easy development will result in more condos because the monetary demand is greater for them.
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the more expensive the housing the lower the demand is. That how the demand curve looks for pretty much any commodity. Developers are not going to supply condos ad infinitum if nobody is willing to buy those condos at market rate.
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On March 23 2018 06:34 Nyxisto wrote:
the more expensive the housing the lower the demand is. That how the demand curve looks for pretty much any commodity. Developers are not going to supply condos ad infinitum if nobody is willing to buy those condos at market rate.
You're thinking real estate in terms of a commodity market which it isn't. People are willing to buy those condos ad infinitum because its a good investment because its a good investment.
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And the article actually states
There are a few reasons for that shift, according to Andrew Jakabovics, vice president for policy development at Enterprise Community Partners and one of the authors of the paper. Another author is Raphael Bostic, who was just named president of the Federal Reserve Bank of Atlanta.
Zoning rules have developed to favor single-family construction, making it harder to win approval for larger projects. There are regulatory costs to building multifamily housing, and developers that go through all the trouble to win approvals want to build more than just a few apartments.
which is what I'm saying. Get rid of the zoning restrictions that favour single family housing and let people build. Also the US has the unique problem of pumping hundreds of billions into Fannie Mae and Freddie Mac which could go towards urban development. Ending those programs should be a priority as well.
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On March 23 2018 06:44 Plansix wrote:But there zero affordable housing market because there are no investors who want to build affordable housing. They are just going to take their money and go to a city that wants condos or single family houses. From last year: https://www.bloomberg.com/news/articles/2017-03-30/america-needs-small-apartment-buildings-nobody-builds-themWe are straight up running out of affordable housing in the US. I don’t know what the realities are in the UK or EU, but this is the growing problem in the US that is driving up housing prices.
Same issue in the Netherlands, not enough cheap housing for starting families
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On March 23 2018 06:44 Plansix wrote:But there zero affordable housing market because there are no investors who want to build affordable housing. They are just going to take their money and go to a city that wants condos or single family houses. From last year: https://www.bloomberg.com/news/articles/2017-03-30/america-needs-small-apartment-buildings-nobody-builds-themWe are straight up running out of affordable housing in the US. I don’t know what the realities are in the UK or EU, but this is the growing problem in the US that is driving up housing prices.
I think the housing crisis in the UK is the biggest problem we currently face, bar none - if you understand the extent to which there is a lack of affordable housing in the UK the rest of the politics here makes a lot more sense (though it's still insane).
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EPT
