> A developer could likely fit 3-4 nice cottage homes on that lot, sell them for $500-700k, and make a profit
Denver takes 264 days to approve "multi-family or industrial projects with a valuation in excess of $1.5 million, such as a new apartment or office building, large additions" [1]. Construction loans in Colorado cost "8% to 13%" [2]. For a project with $1.5mm up-front costs, from land purchases to permit fees and legal costs, that comes to $87 to 141 thousand per project.
This isn't as bad as San Francisco, where permiting delays alone add hundreds of thousands of dollars to housing costs. But in addition to upzoning, it's something to be considered, particularly since Denver seems to categorise practically all impactful residential development as "major commercial."
>particularly since Denver seems to categorise practically all impactful residential development as "major commercial."
This isn't an accident. They know what they're doing.
Every municipality tries to do this to the extent they think they can get away with it because it's an end run around your property right. There's all sorts of residential exemptions and precedents and case law and courts and politicians tend not to be in a hurry to screw homeowners because there's tons of them.
By classifying you as commercial it gives them a) all sorts of capricious authority to micromanage the pettiest of details and/or force you to expend money with no recourse except "haha, sue us peasant".
It's absolutely vital to homeowners that no new housing be built, to keep Undesirables from moving in, but they need to do it in a way which leaves no blood on their hands, so they can continue to have their In This House signs with no cognitive dissonance.
And this is how they get it: don't literally refuse housing, but make it economically impossible in practice. Then they can go "welp, nothing's getting built, I guess there's nothing we could've done", and as an added bonus they also get to say "looks like the free market can never fix our housing shortage!"
This is happening in large parts of the EU as well. It's pretty mind blowing. Since the mid 2010s, the new build construction rate has slowed down to alarmingly low levels. A few years before that, there was an oversupply, yet they kept building. It's totally intentional.
Unsurprisingly, affordability is so bad. In lots of major cities, a one-bed rental takes around 50% of a mid-career post-tax salary. You have become an indentured servant for whatever real estate fund owns your property. Lots of regulatory capture behind the scenes.
Ironically, some parts of the UK, including Home Counties, are now much better than most EU, including Scandinavia, with lots of shared ownership and affordable housing schemes. It's really easy. Increasing the supply of homes, in particular first homes, and preventing predatory tactics to hoard supply.
No, we can't. Once could lower the rate of increase of housing prices (and, more realistically, land values), but "gentrification" isn't really just about pricing, but a change in preferences: Areas close to urban centers had low prices because people wanted to live in deep suburbs, far away from city crime and bad schools. Now they are desirable, and thus people far more affluent are going to bit outbidding the communities that live there anyway. So the gentrification is inevitable, and IMO any attempts to stop it are bad: Nobody has right to a character of the neighborhood, whether we are talking a Mexican American community or people that want racial covenants in their subdivision. The entire idea is just straight out illiberal in the broadest of senses.
It's true that the gentrification process speeds up when there is no building, as those differences in preferences mean existing tenants are competing with even richer people, and would have to move even further out, but the change in preferences still exists, and thus the gentrification is straight out unavoidable.
Besides, in almost every place where we have serious housing problems, the small changes proposed here are insufficient. When the land is expensive, the normal behavior everywhere is to redevelop plots to the maximum economically viable density. Turning 1 house into 4, which would sell for 500k each, doesn't make sense when the possibility of an apartment building is there. Single stairway apartments turn those 4 cottage homes into 16 3-4 bedroom units. If one is simplifying permitting anyway, why not simplify it for that density, and get far more out of the same land. Those 4 new cottages, now new, would not get redeveloped again for another 30, 40 years, so they would become difficult to afford really quickly. That's why you don't see many places actually attempting this low key densification, as it's way too much work for what you get.
> Today, the neighborhood is mixed-income with a range of families from different backgrounds
This is a good thing!
Overall I think this is simply an outcome of NIMBYism, regulators over regulating to justify their existence, and a K shaped economy.
There's nothing wrong with the market building what there is actual money in. No one should be forced to lose money to serve those who cannot afford the product. (That's the space of charities)
Denver seems to have done an amazing job, relative to other places I've been, at actually adding a lot more housing. The market likely would be _worse_ had there not been so much built (and building)
"ideally, a property owner should be able to walk into city hall and leave with a permit the same day if they’re building the kind of housing that the city explicitly wants to see built."
Hear, hear! Finally someone gets it. Same day permits for all high density housing projects.
BTW, the NIMBYs are definitely going to fight the cottage homes tooth and nail otherwise. "Where will all the new cars go???"
>Remove Red Tape (Environmental impact assessments
I absolutely understand what prompts this desperation, but much like the desperation that prompted the election of Trump, it's very, very much more bad than it is good.
What's the problem with removing zoning? Which I interpreted, charitably, as "remove low-density zoning" and not as "let anyone build a lead smelter in their yard". (Also, a suburban area is probably not a lead smelting operation's preferred location anyway).
Environmental impact assessments are great if they actually do what they say. But they can also be weaponized to block any new development in existing cities. Forcing suburban sprawl into less populated areas is a worse outcome if you want to protect the environment.
Nope. I will f-ing yeet that baby along with the bathwater.
Every idiot (they're not even useful anymore FFS, look at the results) says this based on abstract assessments of individual rules and laws. But in practice the overall effect of the system is that all those environmental assessments and stormwater permits and all the other things aren't even speed bumps for big business interests with lawyers and engineers on staff. Those interests can construe any evil as compliant and do so at cost. The rules are unscalable cliffs to "normal" people and businesses who can't justify paying mid four to low five figures up front for projects that might not even generate that much value.
I live in the Denver metro and have worked on zoning code in other municipalities. This is actually the first I've heard about the "Unlocking Home Choices" plan. This proposal seems like an improvement overall. Some of my thoughts:
> The second concept is to incentivize retention of existing buildings by allowing substantial new construction behind them. Basically, let people cash in on their backyard. This is a significant expansion of the accessory unit rules we have today, and the city’s concept art suggests that it would allow backyard cottages larger than the existing homes (a big change).
This is interesting and I wonder how it would change neighborhood dynamics. I'm not opposed at all because it enables more potential housing options. We have a few of these in the neighborhoods I frequent, but from what I've heard, it's somewhat cost prohibitive in the current form to be worth building one. If this helps make ADUs (maybe the ADU would become the original structure in this case), then that seems like progress.
> The third concept is to allow more units if one unit is deed-restricted to be permanently “affordable.” This is basically the same logic as the first proposal — let developers sell more square footage if they do something residents want: in this case, deed-restrict part of the square footage to be priced below market rate.
This would be helpful for allowing current residents with lower incomes than the newcomers to stay in the neighborhood without taking away an existing dwelling unit from the market. Deed-restrictions kind of concern me, but this seems like a decent compromise to prevent displacement.
> What I don’t see in any of the proposals so far is streamlining and expediting permitting for developers who pursue the path the city wants: more, less expensive homes, rather than fewer, more expensive homes.
Indirectly, the removal of parking minimums from the zoning code should help with this. I think there was also a change to allow single stairways in the zoning which creates a bit more incentive for developers and potentially eases the permit process.
Huge fan of zoning reform, however I'd love to see equal effort in lending reform. The availability of multi-million dollar mortgages on 30 year terms means that we all get poorer. Getting people into owned homes is a dream left over from the Clinton era that has warped into an ever expanding pool of debt and over sized buildings. Developers will build to the limit of what people can afford (and slightly beyond), and that is defined by mortgage policy. The harsh reality is that as long as you're supporting a system where a 1k sqft house can cost 300, 400, 500k you're not helping anyone who isn't in the business of lending. The only way to reverse the trend is to limit the pool of available capital and bring the sale value of property down.
There are millions of homes that are super cheap and no one wants to live there. I think we missed a real opportunity for WFH to allow people to move where things are more affordable, rather than having everyone live in mega cities and complain of high prices.
For the most part, remote work ended up with people moving to already desirable remote communities, and exporting the housing crisis there without solving anything for the expensive metro areas.
Very curious about what tools or platforms are used to make the visual housing figures with highlighting like you see in strategy 2 figure. any tips much appreciated
I am only aware of this because we actually ran into the problem. We started allowing more subdivisions and densification in our city and the waste water infrastructure got quickly pushed to its limits now we have to halt construction while the new water infrastructure is upgraded to accommodate for the massively increased zoning density.
A rare anti-Betteridge's law of headlines article.
Yes, there are laws that, if passed, would stop or slow or even reverse the increasing price of real estate. Would they pass? Hard to say and probably not quickly.
As has been repeated many times: it's in the financial interest of people who own property to increase their property's value by constraining supply via zoning/building codes, and they usually have a good amount of influence in the local politics that determine these rules.
The solve is fairly straightforward: allow absolute maximum density so long as it is built safely.
You'll get tall apartment buildings pretty quick. Then everyone can go to the schools and enjoy the low crime and fast fire response.
But that isn't allowed because incumbents don't want it.
There's not much new about this... it's the same story all over the US.
That's because WE DO NOT HAVE a housing crisis. And yes, I'm not crazy.
We have 1.1 housing units per family right _now_. We likely will have the record number of housing units per capita within about 2 years just due to the current pipeline of new housing. These numbers are easy to verify.
Why are we talking about housing then? That's because we have a JOBS crisis. The only available good jobs are concentrated in a dwindling number of dense areas. And making it easier to build makes the jobs crisis even worse.
Don't believe me? Look at Vancouver, BC. They did everything: automated transit, soul-crushingly depressive high rises near transit stations, (de-fact) prohibited foreign ownership of housing, streamlined permitting.
Guess what happened? If your guess is "plentiful cheap housing" then make another guess.
My neighborhood in California added plenty of these and it didn’t change the vibe of the neighborhood at all. It’s a great YIMBY solution because it satisfies both the pro and anti development crowds.
The premise is that the author is a libertarian, except that housing in the neighborhood they live in should be fixed at the price that they can afford, and that the character of the neighborhood from the point that they moved into it should be preserved.
It's only real gentrification when upper-middle class YIMBYs get forced out.
What I said is this is what I struggle with. In general I think too much regulation is what caused this problem. And the question on my mind is, from where we are today, is there a liberalization of the rules that would also help maintain a mixed income neighborhood, rather than the current trajectory (quickly becoming an uber-wealthy country club).
The author acknowledges that a lot of the gentrification is the result of zoning rules, and has only proposed what are primarily less restrictive zoning rules as a potential solution.
Eh, let's take their word for it:
>But I’d like to see new homes sold at prices I could conceivably afford.
Doesn't gentrification happen not from spontaneous combos of zoning rules but when someone with money wants to live somewhere, so they do? It's part of the golden rule: he with the gold makes all the rules, unless you can go asymmetric economic warfare and fire back with zoning & NIMBY laws.
> A developer could likely fit 3-4 nice cottage homes on that lot, sell them for $500-700k, and make a profit
Denver takes 264 days to approve "multi-family or industrial projects with a valuation in excess of $1.5 million, such as a new apartment or office building, large additions" [1]. Construction loans in Colorado cost "8% to 13%" [2]. For a project with $1.5mm up-front costs, from land purchases to permit fees and legal costs, that comes to $87 to 141 thousand per project.
This isn't as bad as San Francisco, where permiting delays alone add hundreds of thousands of dollars to housing costs. But in addition to upzoning, it's something to be considered, particularly since Denver seems to categorise practically all impactful residential development as "major commercial."
[1] https://www.denvergov.org/Government/Agencies-Departments-Of...
[2] https://www.clearhouselending.com/commercial-loans/colorado/...
>particularly since Denver seems to categorise practically all impactful residential development as "major commercial."
This isn't an accident. They know what they're doing.
Every municipality tries to do this to the extent they think they can get away with it because it's an end run around your property right. There's all sorts of residential exemptions and precedents and case law and courts and politicians tend not to be in a hurry to screw homeowners because there's tons of them.
By classifying you as commercial it gives them a) all sorts of capricious authority to micromanage the pettiest of details and/or force you to expend money with no recourse except "haha, sue us peasant".
It's absolutely vital to homeowners that no new housing be built, to keep Undesirables from moving in, but they need to do it in a way which leaves no blood on their hands, so they can continue to have their In This House signs with no cognitive dissonance.
And this is how they get it: don't literally refuse housing, but make it economically impossible in practice. Then they can go "welp, nothing's getting built, I guess there's nothing we could've done", and as an added bonus they also get to say "looks like the free market can never fix our housing shortage!"
This is happening in large parts of the EU as well. It's pretty mind blowing. Since the mid 2010s, the new build construction rate has slowed down to alarmingly low levels. A few years before that, there was an oversupply, yet they kept building. It's totally intentional.
Unsurprisingly, affordability is so bad. In lots of major cities, a one-bed rental takes around 50% of a mid-career post-tax salary. You have become an indentured servant for whatever real estate fund owns your property. Lots of regulatory capture behind the scenes.
Ironically, some parts of the UK, including Home Counties, are now much better than most EU, including Scandinavia, with lots of shared ownership and affordable housing schemes. It's really easy. Increasing the supply of homes, in particular first homes, and preventing predatory tactics to hoard supply.
No, we can't. Once could lower the rate of increase of housing prices (and, more realistically, land values), but "gentrification" isn't really just about pricing, but a change in preferences: Areas close to urban centers had low prices because people wanted to live in deep suburbs, far away from city crime and bad schools. Now they are desirable, and thus people far more affluent are going to bit outbidding the communities that live there anyway. So the gentrification is inevitable, and IMO any attempts to stop it are bad: Nobody has right to a character of the neighborhood, whether we are talking a Mexican American community or people that want racial covenants in their subdivision. The entire idea is just straight out illiberal in the broadest of senses.
It's true that the gentrification process speeds up when there is no building, as those differences in preferences mean existing tenants are competing with even richer people, and would have to move even further out, but the change in preferences still exists, and thus the gentrification is straight out unavoidable.
Besides, in almost every place where we have serious housing problems, the small changes proposed here are insufficient. When the land is expensive, the normal behavior everywhere is to redevelop plots to the maximum economically viable density. Turning 1 house into 4, which would sell for 500k each, doesn't make sense when the possibility of an apartment building is there. Single stairway apartments turn those 4 cottage homes into 16 3-4 bedroom units. If one is simplifying permitting anyway, why not simplify it for that density, and get far more out of the same land. Those 4 new cottages, now new, would not get redeveloped again for another 30, 40 years, so they would become difficult to afford really quickly. That's why you don't see many places actually attempting this low key densification, as it's way too much work for what you get.
Rights != Desires.
Desires are much more relevant in day-to-day politics. Rights are less frequently up for question.
> Today, the neighborhood is mixed-income with a range of families from different backgrounds
This is a good thing!
Overall I think this is simply an outcome of NIMBYism, regulators over regulating to justify their existence, and a K shaped economy.
There's nothing wrong with the market building what there is actual money in. No one should be forced to lose money to serve those who cannot afford the product. (That's the space of charities)
Denver seems to have done an amazing job, relative to other places I've been, at actually adding a lot more housing. The market likely would be _worse_ had there not been so much built (and building)
"ideally, a property owner should be able to walk into city hall and leave with a permit the same day if they’re building the kind of housing that the city explicitly wants to see built."
Hear, hear! Finally someone gets it. Same day permits for all high density housing projects.
BTW, the NIMBYs are definitely going to fight the cottage homes tooth and nail otherwise. "Where will all the new cars go???"
Fixing housing is incredibly easy:
1. Remove Zoning / Deed Restrictions / Parking Minimums
2. Remove Red Tape (Environmental impact assessments, time cap approvals to a couple weeks, at cost fees)
3. Land Value Taxes
Watch as Gentrification suddenly goes away and infill development occurs. These complicated schemes are unnecessary.
>Remove Zoning
>Remove Red Tape (Environmental impact assessments
I absolutely understand what prompts this desperation, but much like the desperation that prompted the election of Trump, it's very, very much more bad than it is good.
What's the problem with removing zoning? Which I interpreted, charitably, as "remove low-density zoning" and not as "let anyone build a lead smelter in their yard". (Also, a suburban area is probably not a lead smelting operation's preferred location anyway).
Environmental impact assessments are great if they actually do what they say. But they can also be weaponized to block any new development in existing cities. Forcing suburban sprawl into less populated areas is a worse outcome if you want to protect the environment.
> it's very, very much more bad than it is good
Is it? I don’t have a clear picture in either direction. What does an environmental impact assessment for a housing project typically result in?
Nope. I will f-ing yeet that baby along with the bathwater.
Every idiot (they're not even useful anymore FFS, look at the results) says this based on abstract assessments of individual rules and laws. But in practice the overall effect of the system is that all those environmental assessments and stormwater permits and all the other things aren't even speed bumps for big business interests with lawyers and engineers on staff. Those interests can construe any evil as compliant and do so at cost. The rules are unscalable cliffs to "normal" people and businesses who can't justify paying mid four to low five figures up front for projects that might not even generate that much value.
You're saying regulation is a moat for monopolists?
I live in the Denver metro and have worked on zoning code in other municipalities. This is actually the first I've heard about the "Unlocking Home Choices" plan. This proposal seems like an improvement overall. Some of my thoughts:
> The second concept is to incentivize retention of existing buildings by allowing substantial new construction behind them. Basically, let people cash in on their backyard. This is a significant expansion of the accessory unit rules we have today, and the city’s concept art suggests that it would allow backyard cottages larger than the existing homes (a big change).
This is interesting and I wonder how it would change neighborhood dynamics. I'm not opposed at all because it enables more potential housing options. We have a few of these in the neighborhoods I frequent, but from what I've heard, it's somewhat cost prohibitive in the current form to be worth building one. If this helps make ADUs (maybe the ADU would become the original structure in this case), then that seems like progress.
> The third concept is to allow more units if one unit is deed-restricted to be permanently “affordable.” This is basically the same logic as the first proposal — let developers sell more square footage if they do something residents want: in this case, deed-restrict part of the square footage to be priced below market rate.
This would be helpful for allowing current residents with lower incomes than the newcomers to stay in the neighborhood without taking away an existing dwelling unit from the market. Deed-restrictions kind of concern me, but this seems like a decent compromise to prevent displacement.
> What I don’t see in any of the proposals so far is streamlining and expediting permitting for developers who pursue the path the city wants: more, less expensive homes, rather than fewer, more expensive homes.
Indirectly, the removal of parking minimums from the zoning code should help with this. I think there was also a change to allow single stairways in the zoning which creates a bit more incentive for developers and potentially eases the permit process.
Is gentrification a bad thing?
Neighbourhoods change, some get richer and some get poorer. That is the way of things. Both poor and rich alike need somewhere to live.
I'm down with killing restrictive zoning laws. But removing regulation has not historically been a great curb for the uber-wealthy.
Agreed, the biggest boom towns have been in the South where restrictions are low and profits high, leaving some really ugly suburbs.
But they have cheap housing. I'll take ugly suburbs over people sleeping on the street.
How are suburbs ugly and cookie-cutter soulless shoebox-sized units are not?
Huge fan of zoning reform, however I'd love to see equal effort in lending reform. The availability of multi-million dollar mortgages on 30 year terms means that we all get poorer. Getting people into owned homes is a dream left over from the Clinton era that has warped into an ever expanding pool of debt and over sized buildings. Developers will build to the limit of what people can afford (and slightly beyond), and that is defined by mortgage policy. The harsh reality is that as long as you're supporting a system where a 1k sqft house can cost 300, 400, 500k you're not helping anyone who isn't in the business of lending. The only way to reverse the trend is to limit the pool of available capital and bring the sale value of property down.
There are millions of homes that are super cheap and no one wants to live there. I think we missed a real opportunity for WFH to allow people to move where things are more affordable, rather than having everyone live in mega cities and complain of high prices.
If you're curious, why this scenario hasn't panned out. I'd highly recommend you read: The Triumph of the City
https://www.amazon.com/Triumph-City-Greatest-Invention-Healt...
For the most part, remote work ended up with people moving to already desirable remote communities, and exporting the housing crisis there without solving anything for the expensive metro areas.
Thankfully this article is about the zoning codes, not code as in computer programs.
Very curious about what tools or platforms are used to make the visual housing figures with highlighting like you see in strategy 2 figure. any tips much appreciated
I’m pretty sure those were drawn in SketchUp
You cant just 4x every plot because that would destroy the ultilties that have been allocated.
I have never considered this nor have I heard it brought up before. Good point!
I am only aware of this because we actually ran into the problem. We started allowing more subdivisions and densification in our city and the waste water infrastructure got quickly pushed to its limits now we have to halt construction while the new water infrastructure is upgraded to accommodate for the massively increased zoning density.
Thought it was something like using computer programming to save the market lol
A rare anti-Betteridge's law of headlines article.
Yes, there are laws that, if passed, would stop or slow or even reverse the increasing price of real estate. Would they pass? Hard to say and probably not quickly.
As has been repeated many times: it's in the financial interest of people who own property to increase their property's value by constraining supply via zoning/building codes, and they usually have a good amount of influence in the local politics that determine these rules.
The solve is fairly straightforward: allow absolute maximum density so long as it is built safely.
You'll get tall apartment buildings pretty quick. Then everyone can go to the schools and enjoy the low crime and fast fire response.
But that isn't allowed because incumbents don't want it.
There's not much new about this... it's the same story all over the US.
> it's the same story all over the US.
At least some places are different:
https://news.ycombinator.com/item?id=47433058
No, it's not. Austin's population growth has been at _best_ stagnant. And I made a prediction that it had actually decreased.
We'll see once 2025 ACS data is released.
No because gentrification is a side effect of private property, not insufficient technology.
He’s talking about legal codes, read the article before commenting ffs
Plans like this would be interesting to me if I believed it were possible to get all the necessary parties to agree.
The answer is "no".
That's because WE DO NOT HAVE a housing crisis. And yes, I'm not crazy.
We have 1.1 housing units per family right _now_. We likely will have the record number of housing units per capita within about 2 years just due to the current pipeline of new housing. These numbers are easy to verify.
Why are we talking about housing then? That's because we have a JOBS crisis. The only available good jobs are concentrated in a dwindling number of dense areas. And making it easier to build makes the jobs crisis even worse.
Don't believe me? Look at Vancouver, BC. They did everything: automated transit, soul-crushingly depressive high rises near transit stations, (de-fact) prohibited foreign ownership of housing, streamlined permitting.
Guess what happened? If your guess is "plentiful cheap housing" then make another guess.
This is the first time I've heard of this locational jobs crisis. Where did you learn about this? I would like to read more about it
My neighborhood in California added plenty of these and it didn’t change the vibe of the neighborhood at all. It’s a great YIMBY solution because it satisfies both the pro and anti development crowds.
Right - the vibe of the neighborhood matters. More than the word "vibes" implies.
The premise is that the author is a libertarian, except that housing in the neighborhood they live in should be fixed at the price that they can afford, and that the character of the neighborhood from the point that they moved into it should be preserved.
It's only real gentrification when upper-middle class YIMBYs get forced out.
What I said is this is what I struggle with. In general I think too much regulation is what caused this problem. And the question on my mind is, from where we are today, is there a liberalization of the rules that would also help maintain a mixed income neighborhood, rather than the current trajectory (quickly becoming an uber-wealthy country club).
Except that's not what the author argued, at all.
The author acknowledges that a lot of the gentrification is the result of zoning rules, and has only proposed what are primarily less restrictive zoning rules as a potential solution.
Eh, let's take their word for it: >But I’d like to see new homes sold at prices I could conceivably afford.
Doesn't gentrification happen not from spontaneous combos of zoning rules but when someone with money wants to live somewhere, so they do? It's part of the golden rule: he with the gold makes all the rules, unless you can go asymmetric economic warfare and fire back with zoning & NIMBY laws.