[OC] Housing regulation strictness versus house price in U.S. cities
September 4, 2024
[OC] Housing regulation strictness versus house price in U.S. cities
Posted by nytopinion
32 comments
What the hell are all these other dots? This tells us nothing.
[deleted]
* Sources: Wharton Residential Land Use Regulation Index, Federal Reserve | Note: All data is for metropolitan areas, which include major cities and the suburbs that surround them. For the Wharton index, which is based on a voluntary survey, suburbs are better represented in the data than city centers. * Created using Svelte and D3.
“There is good evidence that heavy-handed housing regulation is boosting home prices by restricting supply,” writes the economics professor Bryan Caplan. “Strictly regulated urban areas like New York City and the Bay Area have high prices and low construction, while more lightly regulated areas like Houston and Dallas have much lower prices and much more construction.”
Fuuu why didn’t we think of just doing nothing ?!!
Does it makes sense to log the y -axis? I’d like to see more definition in the lower end of the scale
Correlation is not causation
People are making big assumptions about the direction of the causal pathway here.
Perhaps, although I believe the chart title as written may imply a causative relationship between regulation and price, where this may not exist.
It seems likely to me, at least on face value, that city size or population density would be a likely driver of (and highly correlated with) both of these factors.
Why would you need regulation if housing prices are cheap? The only time you’d ever need some form of regulation is due to scarcity of supply and lots of demand. So, like, expensive cities already.
Higher population, lower supply with higher demand, more regulation.
Regulation has an adverse affect. The more tax regulation the more it hurts the poor that can’t afford to get out of it.
It very well could be the other way around where higher housing costs leads to more regulation, or it could not be connected at all
Wait this dumb graph was posted by the NTimes???
If rents were allowed to increase with “the market” (aka collusion and racketeering) nobody except for the ultra rich could live in SF or New York. That’s why there are regulations.
Could also be that governments tend to regulate more expensive housing markets to try to make housing in said markets more affordable.
It is so much cheaper to build houses that will insta-collapse in an earthquake.
oh, of course this is the literal new york times account. when did journalism get so fucking bad
I think it’s funny how people believe in supply and demand for all products except houses.
I wonder if the factored in available land. Places like San Francisco and a majority of the New England area literally have nowhere to build. It makes sense there would be more regulations since they have to be strict with the little land they do have. Parts of Metro New York are litigating the use of the area above buildings. Ie some of smaller buildings selling the rights to the area above them to neighboring taller buildings so they can expand.
I wonder how many other variables generate a nearly identical trend line.
A third axis would be construction costs, a fourth might be construction costs, and a fifth might be insurability, all to try to quantify the long term quality difference caused by the additional regulations.
Anecdotally, I’ve lived in older (less regulated) houses and newer (more regulated) houses and I can confidently say that newer houses tend to be far more energy efficient thanks to the additional weather sealing, more efficient ac systems, and updated wiring standards.
Not beautiful, and a NYT ad… Why not make the x something more tangible, average time to break ground after submitting a housing project? Average lot size requirement? Percent of land dedicated to SF zoning?
Basically anything other than a vague index that hides the weighting of elements in that index… It’s lazy!
You’re arguing correlation is causation while dismissing counterarguments offhand in the writing. Simplistic arguments need simplistic measures and an index is complex and requires thorough explanation.
And ffs. “It’s not demand, the population is not growing at a historically high rate.” Maybe not overall but you have millennials finally getting to a place where they want to buy at the same time that boomers and gen x are fully entering retirement! Millions of households competing for small starter homes to… Start… Or to downsize. And east coast states are the oldest by a lot where this is happening most intensely.
I can think of 1000 reasons why Houston has cheaper housing than SF and only one of those reasons is regulation lol. (Have you been to these places?!?)
They keep adding taxes and regulations in Los Angeles in the name of affordable housing, yet prices keep increasing faster than the national rate. Shocking. Maybe politicians should be required to take at least high school level Econ classes.
Remember: correlation is not causation.
Anyone else feel like a polynomial might have captured the trend better?
This is a poorly made chart with a misleading title. How do you decide which places have “more regulation”? Sheer volume of laws? Which laws pertain to housing regulation?
Doesn’t seem to show any real correlation or causation. Not to mention why are the ones labeled but not the rest? There’s no way to even fact check this.
This isn’t cause and effect as the chart conclusion would falsely implicate as causation
I think your conclusion is a bit of stretch. It’s not that simple. These rental markets above the line (average) are among the most demanded places in the US – if not in the world. All kind of societal classes go to these places to work for a better life or just make a living. That causes a shortage of housing and one that is often not easy to address in an urban environment. In order to still have a healthy mix of society and workers that do low income jobs (street cleaners, janitors, etc.) so society won’t collapse, these cities need to control rent, regulate for social housing, regulate for low energy housing, reduce smog, protect tenants from construction noise, etc. All things that make building more expensive.
In other words – first was the shortage and high price, then came the stricter regulations.
LOL. Los Angeles is hardly over-regulated. Built out? Yes but not over-regulated.
This looks like random data with a trendline to give the (unlabeled) dots a narrative. Boston is just as regulated as the three cheapest cities in the graph, and is also less regulated but much more expensive than Phoenix, which is as regulated as LA but much cheaper.
This is a weak correlation with too many heavy outliers. I’d start by normalizing housing prices to avg income. I’d check population density instead of “regulations” to see if there’s a stronger link. This is the kind of chart I make on SPSS while playing around with a dataset and immediately scrap because there’s no story to tell.
Who would thunk that! It’s almost like SF is a poster boy for that
This is kind of a chicken and the egg situation though.
Did the more expensive places end up beefing more regulation? Or did more regulation cause prices to go up?
32 comments
What the hell are all these other dots? This tells us nothing.
[deleted]
* Sources: Wharton Residential Land Use Regulation Index, Federal Reserve | Note: All data is for metropolitan areas, which include major cities and the suburbs that surround them. For the Wharton index, which is based on a voluntary survey, suburbs are better represented in the data than city centers.
* Created using Svelte and D3.
“There is good evidence that heavy-handed housing regulation is boosting home prices by restricting supply,” writes the economics professor Bryan Caplan. “Strictly regulated urban areas like New York City and the Bay Area have high prices and low construction, while more lightly regulated areas like Houston and Dallas have much lower prices and much more construction.”
Read the rest of the story [here, for free](https://www.nytimes.com/interactive/2024/07/11/opinion/housing-deregulation-panacea-policy.html?unlocked_article_code=1.IE4.yJ55.j0XzhEFC0YQj&smid=re-nytopinion), without a subscription to The New York Times.
Fuuu why didn’t we think of just doing nothing ?!!
Does it makes sense to log the y -axis? I’d like to see more definition in the lower end of the scale
Correlation is not causation
People are making big assumptions about the direction of the causal pathway here.
Perhaps, although I believe the chart title as written may imply a causative relationship between regulation and price, where this may not exist.
It seems likely to me, at least on face value, that city size or population density would be a likely driver of (and highly correlated with) both of these factors.
Why would you need regulation if housing prices are cheap? The only time you’d ever need some form of regulation is due to scarcity of supply and lots of demand. So, like, expensive cities already.
Higher population, lower supply with higher demand, more regulation.
Regulation has an adverse affect. The more tax regulation the more it hurts the poor that can’t afford to get out of it.
It very well could be the other way around where higher housing costs leads to more regulation, or it could not be connected at all
Wait this dumb graph was posted by the NTimes???
If rents were allowed to increase with “the market” (aka collusion and racketeering) nobody except for the ultra rich could live in SF or New York. That’s why there are regulations.
Could also be that governments tend to regulate more expensive housing markets to try to make housing in said markets more affordable.
It is so much cheaper to build houses that will insta-collapse in an earthquake.
oh, of course this is the literal new york times account. when did journalism get so fucking bad
I think it’s funny how people believe in supply and demand for all products except houses.
I wonder if the factored in available land. Places like San Francisco and a majority of the New England area literally have nowhere to build. It makes sense there would be more regulations since they have to be strict with the little land they do have. Parts of Metro New York are litigating the use of the area above buildings. Ie some of smaller buildings selling the rights to the area above them to neighboring taller buildings so they can expand.
I wonder how many other variables generate a nearly identical trend line.
A third axis would be construction costs, a fourth might be construction costs, and a fifth might be insurability, all to try to quantify the long term quality difference caused by the additional regulations.
Anecdotally, I’ve lived in older (less regulated) houses and newer (more regulated) houses and I can confidently say that newer houses tend to be far more energy efficient thanks to the additional weather sealing, more efficient ac systems, and updated wiring standards.
Not beautiful, and a NYT ad… Why not make the x something more tangible, average time to break ground after submitting a housing project? Average lot size requirement? Percent of land dedicated to SF zoning?
Basically anything other than a vague index that hides the weighting of elements in that index… It’s lazy!
You’re arguing correlation is causation while dismissing counterarguments offhand in the writing. Simplistic arguments need simplistic measures and an index is complex and requires thorough explanation.
And ffs. “It’s not demand, the population is not growing at a historically high rate.” Maybe not overall but you have millennials finally getting to a place where they want to buy at the same time that boomers and gen x are fully entering retirement! Millions of households competing for small starter homes to… Start… Or to downsize. And east coast states are the oldest by a lot where this is happening most intensely.
I can think of 1000 reasons why Houston has cheaper housing than SF and only one of those reasons is regulation lol. (Have you been to these places?!?)
They keep adding taxes and regulations in Los Angeles in the name of affordable housing, yet prices keep increasing faster than the national rate. Shocking. Maybe politicians should be required to take at least high school level Econ classes.
Remember: correlation is not causation.
Anyone else feel like a polynomial might have captured the trend better?
This is a poorly made chart with a misleading title. How do you decide which places have “more regulation”? Sheer volume of laws? Which laws pertain to housing regulation?
Doesn’t seem to show any real correlation or causation. Not to mention why are the ones labeled but not the rest? There’s no way to even fact check this.
This isn’t cause and effect as the chart conclusion would falsely implicate as causation
I think your conclusion is a bit of stretch. It’s not that simple.
These rental markets above the line (average) are among the most demanded places in the US – if not in the world. All kind of societal classes go to these places to work for a better life or just make a living. That causes a shortage of housing and one that is often not easy to address in an urban environment. In order to still have a healthy mix of society and workers that do low income jobs (street cleaners, janitors, etc.) so society won’t collapse, these cities need to control rent, regulate for social housing, regulate for low energy housing, reduce smog, protect tenants from construction noise, etc. All things that make building more expensive.
In other words – first was the shortage and high price, then came the stricter regulations.
LOL. Los Angeles is hardly over-regulated. Built out? Yes but not over-regulated.
This looks like random data with a trendline to give the (unlabeled) dots a narrative. Boston is just as regulated as the three cheapest cities in the graph, and is also less regulated but much more expensive than Phoenix, which is as regulated as LA but much cheaper.
This is a weak correlation with too many heavy outliers. I’d start by normalizing housing prices to avg income. I’d check population density instead of “regulations” to see if there’s a stronger link. This is the kind of chart I make on SPSS while playing around with a dataset and immediately scrap because there’s no story to tell.
Who would thunk that! It’s almost like SF is a poster boy for that
This is kind of a chicken and the egg situation though.
Did the more expensive places end up beefing more regulation? Or did more regulation cause prices to go up?