# Housing Roundup #11

The book of March 2025 was [Abundance](https://www.amazon.com/Abundance-Progress-Takes-Ezra-Klein/dp/1668023482/ref=sr_1_1?crid=27MGEXGEE8ZDJ&dib=eyJ2IjoiMSJ9.rvhjZVT3yaFDfy9SkTvdO8vPJOTO9MWfdKlrVonh6TL1zopcppz1R4GCQNIpinSo8K-5SLYxyM5SXEj6TNoYuOtYHrXanryV8jIRuuPZJV52HAKt1WwZqAaOQUUhZ0x0j_NfHE1r3kBNh7QEbvOo5ZVyWPFPjr99rf3d3bBI2XBJSKuKzkj95rPcFsgId6eceX-B59Q2C8oVxTl109891HPUq1j1ZVTq0qeNV5A-YU8.wDTC2-AtL7sj1vFz4UhRctbzqKOCYuNkY67tne8BLSc&dib_tag=se&keywords=abundance+ezra+klein&qid=1743340703&sprefix=abundance%2Caps%2C739&sr=8-1). Ezra Klein and Derek Thompson are making a noble attempt to highlight the importance of solving America’s housing crisis the only way it can be solved: Building houses in places people want to live, via repealing the rules that make this impossible. They also talk about green energy abundance, and other places besides. There may be a review coming.

Until then, it seems high time for the latest housing roundup, which as a reminder all take place in the possible timeline where AI fails to be transformative any time soon.

#### Federal YIMBY

[The incoming administration](https://x.com/jessi_cata/status/1881508632598343767) [issued an executive order](https://t.co/kE5qClfys6) [calling for](https://x.com/ChanaMessinger/status/1881588943705227364) ‘emergency price relief’‘ including pursuing appropriate actions to: Lower the cost of housing and expand housing supply’ and then a grab bag of everything else.

It’s great to see mention of expanding housing supply, but I don’t see real intent. This is mostly just Trump saying lower all the costs, increase all the supplies, during a barrage of dozens of such orders. If you have 47 priorities you have no priorities.

If you want to do real work on housing at the Federal level, you need an actual plan.

[My 501c3 Balsa Research](https://www.balsaresearch.com/) ultimately plans to make federal housing policy a future point of focus, once it is done with the Jones Act, and lately with (alas) defending against the Trump Administration’s attempts to impose new shipping restrictions that could outright cripple America’s exports by applying similar rules to international trade as well.

I do think there are some promising things to explore, even if the Trump administration is not willing to strongarm states. In particular and as an example without going into too much detail, the Federal Government has a lot of control over mortgage availability. Currently, they are using this in ways that handicap manufactured housing, whereas they could instead use it to reward innovation and new construction, such as by refusing to count house value that is the result of NIMBY building restrictions and the resulting shortages. Another example is that they could universalize a reasonable building code to do away with things like dual staircase requirements.

Alas, this Administration’s true priorities very clearly lie elsewhere. But at least they want to build more housing rather than less housing. Being directionally correct is far better than their position in other places of actively being against growth and trade.

#### Rent Control

[Rent control proposition 33 fails in California, 61%-38%](https://x.com/mattyglesias/status/1854292289935589588). No news is good news.

#### Rent Passthrough

[So this is really weird](https://t.co/7i8yjas3cC), [Berkeley landlords passed through the majority of their property tax burdens?](https://x.com/cremieuxrecueil/status/1856868231761244286) As Sarah Baker notes, standard economic theory says this should not happen. What you owe in taxes has nothing to do with the market value of the property. Yet she finds strong evidence that it happens. The speculation is a model of ‘landlord sophistication’ which I presume is a polite way of saying mispricing?

Which in turn is saying that rents are massively inefficient, because landlords are not anything like efficient profit maximizers, potentially more like low information satisficers in many cases. Weird, and I suppose evidence that tools to learn the ‘proper market rent’ could indeed have a large impact.

#### Yes, Construction Lowers Rents on Existing Buildings

One cannot stress this enough. If you want lower rents, build more housing.

We’ve been over this, and you can make complicated arguments, but: Supply, meet demand, how is this even a question, sigh. Also, Studies Show.

> [Angry Psulib](https://x.com/mnolangray/status/1872699579428421697): Pittsburgh’s Deputy Mayor Jake Pawlak: new housing makes the rent of older apartments go up. Also, filtering is fake and only benefits transplants.
> 
> Nolan Gray: There is simply no evidence that new housing construction increases local rents, and a growing body of decent evidence that it actually lowers them. People in positions of power should prioritize evidence over vibes.

\[shares paper, [Local Effects of Large New Apartment Buildings in Low-Income Areas](https://direct.mit.edu/rest/article-abstract/105/2/359/100977/Local-Effects-of-Large-New-Apartment-Buildings-in?redirectedFrom=fulltext).\]

From Paper Abstract: We study the local effects of new market-rate housing in low-income areas using microdata on large apartment buildings, rents, and migration. New buildings decrease rents in nearby units by about 6% relative to units slightly farther away or near sites developed later, and they increase in-migration from low-income areas.

We show that new buildings absorb many high-income households and increase the local housing stock substantially. If buildings improve nearby amenities, the effect is not large enough to increase rents.

Nolan Gray: Pittsburgh is yet another case of how poor local Democratic governance is undermining national Democratic prospects: it’s a blue island in a newly-red state, where the most recent election was decided by just a little over 100,000 votes…

A supermajority of households that would move into new apartments in Pittsburgh (or State College, or Philadelphia) would probably vote Democratic. If these places built commensurate to demand, Pennsylvania would probably be back to solid blue. And yet!

Angry Psulib: Amazingly enough, he was shown this exact study and admitted he hasn’t read it earlier this month. I guess he still hasn’t bothered to read it?

Here’s another study: [The Impact of New Housing Supply on the Distribution of Rents](https://www.journals.uchicago.edu/doi/10.1086/733977), from Andreas Mense in October 2024.

> Abstract: I estimate the impact of new housing supply on the local rent distribution, exploiting delays in housing completions caused by weather shocks. A 1% increase in new supply (i) lowers average rents by 0.19%, (ii) effectively reduces rents of lower-quality units, and (iii) disproportionately increases the number of second- hand units available for rent.
> 
> Moreover, the impact on rents is equally strong in high-demand markets. Employing a quantitative model, I explain these results by second-hand supply: New supply triggers moving chains that free up units in all market segments.
> 
> The estimate translates into a short-run demand price elasticity of -0.025.

[Or there’s the very practical real world experimental results, such as:](https://x.com/housebostonorg/status/1875659120864571750)

> Cyrus Tehrani: An Austin renter’s renewal offer is $200/month lower than what she’s currently paying.
> 
> We’ve always said building more housing makes \*existing\* housing more affordable, and that’s what’s happening in Austin.

#### If We Wanted To, We Would

The reason we don’t build those new buildings is we have decided not to build them.

> [Armand Domalewski](https://x.com/phl43/status/1865871879413862747): France rebuilt fucking NOTRE DAME faster and cheaper than it takes San Francisco to add a rapid bus lane.
> 
> Philippe Lemoine: It’s worth noting that, in order to make it possible to rebuild the cathedral so quickly, the French parliament had to vote a special law that effectively exempted the project from most of the regulations that would have normally applied and slowed it down considerably.
> 
> Ste.Respect: Can they vote for this law for every other development?
> 
> Philippe Lemoine: Some people in France are arguing for that, and I think there is a lot to the idea, although it’s unrealistic to think exactly the same thing should or could be replicated everywhere.
> 
> It’s not just about safety but also stuff like impact on the neighborhood, the obligation to perform certain archeological searches, etc. To be clear, I think a lot of those regulations should be eliminated or reduced, but this couldn’t be fully generalized realistically.

We certainly have the necessary space:

> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Feb2d5b44-4eaa-4353-aa1a-395e6927bba9_944x1114.png)

#### Aesthetics Are a Public Good

> [Roon:](https://x.com/tszzl/status/1864453541517250836) But you know you should ask yourself why people around the world consider Paris exceptionally beautiful and Houston an ugly eyesore, and what you think about allowing denser construction?
> 
> This was not an endorsement of density.
> 
> I’m pointing out that most Americans lack taste and will continue to make their cities worse with shoddy construction, and the YIMBY movement would be ten times easier if developers and planners acquired some taste.
> 
> Vitalik: Someone should figure out explicit, credible, neutral market incentives for aesthetics. For example, have a “hot or not” game where people are shown random buildings and upvote or downvote them; your property tax is proportional to the percentage of downvotes your building receives.
> 
> Let’s make this fun.
> 
> Roon: Yes, I very much agree. There’s gotta be something in the mechanism design space that doesn’t rely on unaccountable planners with full veto power.

Aesthetics are an obvious externality issue. If you create a beautiful thing, you capture only a small portion of the gains. So we want a way to financially reward beautiful and punish ugly, as measured by what is around them, in order to motivate better choices in the future. What people actually think seems like an excellent way to do that.

You don’t want to a NIMBY-style veto system. You want financial incentives that generate a race to the top. Indeed, if we want beautiful, this is only half the battle. The other half is we have to make such places actually legal to build.

I am confident that cities that implement this will benefit greatly. But you need a way to judge aesthetics that actually rewards good over bad.

Which is not our custom, because…

#### Urban Planners Are Wrong About Everything

It’s a bold claim and of course it’s not actually correct. There are plenty of things that planners are uncontroversially correct about. You don’t notice those things. But also there’s a lot of things they do that are purely shooting the city in the foot for no gain.

> Aaron Lubeck: Modern architecture gives “f*** it, life has no meaning” vibes.
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fefc8bfcf-4360-4638-862e-e53f921fc82d_1200x675.jpeg)
> 
> [Atlanticesque](https://x.com/atlanticesque/status/1894175373492949297): This is actually just straightforwardly the result of “anti-massing” regulations.
> 
> Zoning codes in cities across America mandate that buildings not be too great of a single mass, it must be “de-massed” and “broken up” into different shapes and materials.
> 
> Always looks like s***.
> 
> [Maxwell Tabarrok](https://x.com/MTabarrok/status/1894385503098576963): I think it’s underrated the extent to which urban planners are just wrong about everything.
> 
> Wide avenues, setbacks, light-cones, de-massing, Floor Area Ratios, urban growth boundaries, etc
> 
> They’re just wrong about what makes a city nice.
> 
> Patrick McKenzie: A piece of evidence in favor: look how much of the built environment that is believed would be illegal. (Or if one really wanted to grind gears: compare number of dollars planners spend on travel to noncompliant cities versus fully compliant cities.)
> 
> Nate Hood: I have a degree in planning, work in field & serve on Planning Committee AND fully agree with this. Planning is its own worst enemy In its defense: it’s very politicized at local level & usually it’s electeds leaders who make the decisions, while planners merely enact them.
> 
> Ddjiii: I think you’re 30 years late. Planning as a profession mostly got over this a long time ago. But zoning documents and public officials have not necessarily adjusted.

It’s nice to hear the claim that planning the profession has figured out it got all these things wrong, but what good is that if the wrong things keep getting implemented? What is planning planning to try and fix our planning planning?

#### Blackstone

Blackstone is investing in buying up houses and renting them out.

There are insane claims going around that Blackstone is somehow intentionally having a massive effect on housing prices by doing this.

Instead, as any economist would tell you, the effects here are very small.

This is mentioned here partly to clear up that confusion in case anyone was misled, but mainly as a clear case of a journalist pushing a certain kind of narrative, and how they react when it is pointed out.

> [Paul Graham:](https://x.com/paulg/status/1876403216935686176) I don’t think I’ve ever seen a journalist with less respect for the truth than this Jacobin writer. And that’s saying something, because I’ve seen some journalists with \*very\* little respect for the truth.
> 
> In the movies I watched as a kid, the bad guys were always businessmen, and the journalists were always good guys. I was very surprised when I realized it wasn’t actually like this in the real world. But you can see it happening right here.
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F278686f2-4ca9-467b-92bb-a9b410ed09be_601x806.png)

It is rather insane that a claim that Blackstone owns a third of American housing made it to publication. That claim makes absolutely zero sense on any level.

> [Logan Mohtashami:](https://x.com/LoganMohtashami/status/1879895565183705450) At my last conference, I ran into a Black\[stone\] is buying all the homes, dude. Oh, it was a fun rebuttal
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F080c9583-b17b-49dc-bf9a-323532ee6d66_1200x1077.jpeg)

The actual figure is Blackstone owns 0.07% of American housing stock, so it is off by about four orders of magnitude. They have essentially zero market power.

#### Rent Pricing Software

I got [this interesting pushback](https://thezvi.substack.com/p/housing-roundup-10/comment/75242997) last time:

> Sysipheus: I want to push back about the limited effect of collaborating software. I’m a landlord in FL and watched it show up a few years ago to dramatic effect. Personal anecdote aside, I think it’s a mistake to ignore the impact of in-group cooperation on price discovery, especially in a market with inelastic demand. OPEC only lowered supply by 15% in the 70’s.
> 
> Additionally, I’m not even certain that improving the efficiency of the market is a net good. I am tentatively convinced that having some slack in the housing market is a positive. Slack facilitates price discrimination from unsophisticated actors and lets the truly price conscience find bargains. The additional cost of transactions is offset by the long duration of the agreements. (I could be convinced otherwise)

No question the software leads to less variation in pricing, cutting down on underpricing and also on overpricing. This means less time on average spent with each unit on the market, and less time spent by prospective tenants searching since returns to search are lower. Also note that, by lowering search costs, you lower the ability of the landlord to hold up the tenant by threatening to force them to move, and give both sides in that negotiation much better information on market conditions – worst case the tenant can simply look at a few similar places on the market.

I don’t see the OPEC parallel, given supply if anything should be entering the market rather than leaving it, as this makes it easier to be a low-information landlord.

The question raised here is, could it be good to have the old inefficient rent pricing, despite all that, because it allows valuable price discrimination?

I can see the argument if I squint. Those who have high willingness to pay end up with higher rent, and this subsidizes people who need a bargain allowing the bargain hunters to live where they wouldn’t otherwise be able to afford to rent?

That depends on what determines elasticity of supply. If landlords can collectively respond to the ability to price discriminate by building more housing, since there’s now more overall demand and some pay higher prices, then plausibly that can be worth a lot. But if all this does is change the distribution of tenants and prices, then it seems very hard for that to justify the additional transaction costs.

We shouldn’t underestimate those transaction costs. When I rented an apartment in New York City, which I did several times, I effectively lost multiple weeks each time.

#### Immigration Versus NIMBY

Immigration does raise housing costs in the places you artificially constrain the supply of housing, since you add to demand and hold supply fixed.

Which tempts you to compound your mistake, rather than realize you should stop restricting supply. Where supply isn’t restricted, immigration if anything is net helpful, as they disproportionately help build the new houses and they do it while on average buying less house.

> [Chris Frieman](https://x.com/cafreiman/status/1879899952329163102): Notice that no one thinks that immigration makes it more difficult for people to buy cars, phones, food, etc.—the discussion always focuses on housing. So the takeaway should be that there is a problem with the housing supply, not immigration.

We do have to face the reality here. Supply in many places is restricted. So this is currently a small downside to immigration, with gains captured by landlords.

We could turn this back into a win-win by imposing a property tax, or better yet a tax on the unimproved value of land, in addition the obvious ‘let people build houses where people want to live’ solution.

#### Preferences

[Black households prefer to live in lower-SES (socioeconomic status) neighborhoods](https://www.sciencedirect.com/science/article/abs/pii/S0094119022000845) with black residents, rather than living in higher-SES neighborhoods without black residents, even when they are relatively high SES themselves. There are any number of plausible explanations for this preference.

Living in higher-SES neighborhoods costs more money in various ways, so this is not without its advantages. The period when I lived in Warwick allowed a dramatic cut in my living expenses – if I preferred that lifestyle, it would be very good for capital accumulation. It was not without its charms.

Why do people so often assume that everyone will spend whatever they can afford on housing and other consumption? You don’t want to be [moving on up](https://www.youtube.com/watch?v=_-OnRQ4P0VY&ab_channel=MattLaufenberg) purely because you can, says the man very happy to live in the middle of Manhattan.

#### The True Costs

Thinking of moving to a more productive area? [Beware, the real estate premium likely eats you alive](https://www.nber.org/papers/w31587). Here’s the abstract of a new paper, note the last line:

> We use data from the Longitudinal Employer-Household Dynamics program to study the causal effects of location on earnings. Starting from a model with employer and employee fixed effects, we estimate the average earnings premiums associated with jobs in different commuting zones (CZs) and different CZ-industry pairs.
> 
> About half of the variation in mean wages across CZs is attributable to differences in worker ability (as measured by their fixed effects); the other half is attributable to place effects.
> 
> We show that the place effects from a richly specified cross sectional wage model overstate the causal effects of place (due to unobserved worker ability), while those from a model that simply adds person fixed effects understate the causal effects (due to unobserved heterogeneity in the premiums paid by different firms in the same CZ).
> 
> Local industry agglomerations are associated with higher wages, but overall differences in industry composition and in CZ-specific returns to industries explain only a small fraction of average place effects. Estimating separate place effects for college and non-college workers, we find that the college wage gap is bigger in larger and higher-wage places, but that two-thirds of this variation is attributable to differences in the relative skills of the two groups in different places. Most of the remaining variation reflects the enhanced sorting of more educated workers to higher-paying industries in larger and higher-wage CZs.
> 
> Finally, we find that local housing costs at least fully offset local pay premiums, implying that workers who move to larger CZs have no higher net-of-housing consumption.

This ignores the skill and talent enhancement aspect of moving CZs. It presumes worker ability is fixed, whereas worker ability improves over time when among higher ability workers in a high opportunity area. So even if your consumption did not increase short term, you would still want to capture those gains, and also the additional housing costs come with access to a superior area.

Also if you see comparatively larger gains from moving, especially as a ratio of housing requirements, you come out ahead that way as well. Society of course overall gains greatly when you move up the ranks, even if you don’t come out ahead directly.

Mostly this says that our most productive areas are greatly undersupplying housing, in case that wasn’t already obvious.

It also says that people are responding roughly correctly to the incentives involved.

#### Minimum Viable Product

> [Sophia](https://x.com/0ldoini/status/1878954032531984647): Anyone looking for a single bedroom with no heating where you can’t make noise and can only be home from 8:30pm to 8am (weekdays only)? Here’s one for a bargain (£1350)!!!
> 
> [Completely real btw](https://t.co/KQolgd3y93).
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F811c7992-fbbe-4374-8ccc-173f8c73ce55_1259x2048.jpeg)
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F4c8b395a-0463-418f-965f-0f1931e273d6_1290x1067.jpeg)
> 
> Oh my god the landlord has twitter, please get this to her.
> 
> She’s seen this! She’s now claiming she doesn’t have a living room at all!
> 
> She bought the flat for £686k in 2021 by the way, she just wants a tenant to pay off a large chunk of her mortgage while not really living there at all.
> 
> Some poor soul is going to move in not having seen the original ad and be made to feel like an intruder for being in their home on a Saturday.
> 
> Alice! We know you’re reading this! Drop the rent!!!!
> 
> What else can we shame Alice into including in the rent?
> 
> Ok we had our fun but the Daily Mail turning up at her flat? That’s not ok guys wtf
> 
> [Aella](https://x.com/Aella_Girl/status/1879312347766133176): I hate this genre of public shaming. If she put the price too high above the market, nobody will rent it, and she’ll have to lower the price until someone does. This seems fine. People should be allowed to price things too high and have nobody buy their thing
> 
> [Divia Eden](https://x.com/diviacaroline/status/1879392974645363165): IMO it’s a lot like free speech!
> 
> Some people (like that xkcd comic) say that prices should be legal but that it’s fine and good to shame people etc for their pricing practices
> 
> Others (I’m one) want more than just legal prices—we want a culture of being chill about prices

Various people said ‘oh that’s not shaming that’s complaining about housing costs in London’ and I would have agreed if it was only Sophia’s OP but then she kept going, including making claims that simply aren’t true – Alice is very nicely warning in advance about the noise, not saying the person wouldn’t be able to be at home at any given time.

#### Like a Good Neighbor

[Study in Amsterdam finds](https://www.amsterdamredlightdistricttour.com/news/amsterdam-red-light-district-prices/) that most of the impact of prostitution on housing prices is extremely local and based on visibility. Being 300 yards away wiped out most effects. Making the brothels close their windows also wiped out most effects. A quarter of the effect was due to crime, the rest to the open windows. Effect seemed modestly larger than I expected.

This totally fits with my model of major cities as a game of ‘[good block bad block](https://www.youtube.com/watch?v=inLRcdZbO1g&ab_channel=MarkM.OldRidge).’ If it’s out of sight, mostly you don’t have to care. Also, having access to the bad block has its advantages. I imagine that for many, the ideal distance from the red light district is ‘far enough you don’t worry about crime or the lights in your face, and no farther.’

One’s own access to the related services could be net good or net bad, but it sounds like the net impact here is minimal. I suspect that is people making a mistake. It is well known that exact distance makes a big difference for things like parks and restaurants, and I would expect that to apply here as well. Except it is entirely non-obvious which direction this should go.

#### Flight to Quality

There are a lot of trends of this type these days: People place tons of value on top quality, and we have the wealth to bid it up quite high, while what used to be the Perfectly Good version lies unused.

> [John Arnold](https://x.com/JohnArnoldFndtn/status/1869779019321012334): There’s both a shortage of office space (Class A+/A) and a surplus of office space (everything else) at the same time. I see it in Houston where many new buildings are under construction at the same time the city has a 26% office vacancy rate
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffa1cfe4a-d013-49fa-992d-28045c4bbbf9_1200x309.png)

Claude thinks this is mostly about location and other practical stuff, like temperature controls and elevators that work well, and keeping the building clean and safe. There’s a lot of marginal value in all that.

The explanation for B-level buildings going unused is various bank loan covenants and obligations, tax advantages to keeping the place empty and general downward price stickiness in real estate. We can and should of course reverse the unintended tax incentives for places being empty – we should if anything punish, not reward, leaving the place idle.

#### Housing for Families

By default, high-rises include mostly one and two bedroom apartments, and don’t offer the amenities that make them good places to raise children.

But is that necessarily the case? [What would it take to make a high-rise that was good for families with kids?](https://www.slowboring.com/p/can-we-have-a-family-friendly-high) Matt Yglesias calls for a modern high-rise for families.

I think if you designed a high-rise with this in mind, you could offer tremendous value. You can build the entire place, from the beginning, with this goal in mind.

The obvious place to start is to make the whole building larger apartments designed for families. That means floor plans more bedrooms, with the secondary bedrooms relatively small, plus a large common area, with multiple bathrooms.

Simply having most of your neighbors have children will change norms dramatically. It would be far easier to make friends, to strike up conversations and so on.

The next step is to add various communal areas for the families. This starts with an enclosed courtyard or other safe outdoor space, and a designed-to-be-safe roof. You can go from there, with various gym and sports areas, play areas, gaming areas and so on. Throw in some family friendly restaurants so you can go there without leaving the building. Giving up a small percentage of overall floor space is a big deal.

The killer app, of course, is childcare. If it’s a big enough courtyard, you can have an adult there, same with the roof, and you can offer places where families can park their kids and pay by the hour. Maybe even have various styles, including a homework help room, tutoring, activities like chess and so on. You can even have a pool of building-based babysitters and even tutors that can be reserved or often requested on demand, including for short periods. You can use dynamic pricing for busy versus quiet times.

The lifestyle impact there would be huge – if you have on-demand options for 1-2 hours of childcare, or even 15 minutes, at reasonable prices, it is a huge freaking deal. If you have activities readily available that also create natural friendships through repeat interactions? Wow.

This seriously seems like an amazing business opportunity. If you made the first such building in Manhattan or another major city, there are those who would jump at it, and pay quite a lot more for the same amount of apartment than they would otherwise.

#### Group House

[Group houses are insanely great if you can pull them off](https://x.com/DanielleBFranz/status/1845922495703990663). It’s great to live with your friends. It’s great to pool costs and common areas, the economics are terrific. The trick is it requires coordination. Coordination is hard. If you can pull it off, totally go for it. Why not? Yes, privacy, and eventually you’ll want space for a family, but housing is a huge portion of expenses, and friends are golden.

> GOOPert Gottfried: I just saw a Zillow commercial that suggested millennials go in on buying a house with 2 friends. Since when did the American dream include a white picket fence and 2 roommates?
> 
> Danielle Franz: When I was in my early 20s, my group chat bullied (half kidding) one of our friends into buying a house with the promise that we would move in and cover the mortgage during the time that we lived there.
> 
> It worked out great — friend had their mortgage covered 100% for a few years and we got rent that was way more affordable than anywhere else.
> 
> We made amazing memories together during an oftentimes lonely and confusing period of life and our $$ directly benefited someone we loved rather than a faceless landlord.
> 
> It’s definitely not for everyone, but I wouldn’t write it off so quickly.

This is also a great reason to encourage greater supply of larger houses and apartments, thus enabling more such arrangements.

#### No One Will Have the Endurance To Collect on His Insurance

California has effectively made it illegal to profitably offer insurance via charging enough money to cover expected payouts. [Slowly insurance companies are figuring this out and packing their bags.](https://twitter.com/houmanhemmati/status/1781138979313816024)

> [KLTA](https://ktla.com/news/california/2-more-insurance-companies-announce-plans-to-leave-california/?fbclid=IwZXh0bgNhZW0CMTEAAR0jXlYSqBh_8tPnpVySlyV2K9wGBQQeLbqZJX8AChAO4Z4BhW9xwoGPdNA_aem_AfFhst-Vu2CUstrn0EHOAu7iHQEV4uYgFaBBwSHyhSb13_6RGSlfpEh1jYZrssW6gwhluqscaAEs_yycfVweS0cj): 2 more insurance companies announce plans to leave California
> 
> Houman Hemmati: I don’t think most people quite yet grasp the monumental significance of the sudden collapse of nearly the entire state insurance industry in California. There is one entity responsible: state government. Without insurance you can’t purchase or own anything unless you’re very rich or a big corporation. This will have tremendous ramifications for everyone here. Stay tuned.
> 
> Don’t Fall For It: I am selling my current home which is a much higher fire risk than the home I am moving into. All of the large insurance companies will not insure me. It’s a nightmare, I’ve never had a claim. I ended up getting a policy – double the premium.
> 
> Lord Pope Misha XIV: eh you can still totally own a house it’s just like in the past where if it burns down you are ruined.
> 
> Joel Grus: well, I don’t think you can get a mortgage without homeowners insurance.

Telling insurance companies they cannot set or raise prices works until it doesn’t. What people are complaining about is that they want to purchase assets and be insured against potential losses, and they want someone else to pay for the real cost of covering those losses in exchange for a smaller amount of money.

That someone is going to have to be the State of California (or another state like Florida, as appropriate). The people still have to foot that bill, somehow.

This is an extraction of rents by existing owners of risky properties, and those who construct new risky properties, at the expense of everyone else. If the full real cost of insurance had to be paid or the risk accepted, then the value of the property would decline accordingly, so those buying anew would break even.

#### Cambridge

[Our fair city is poised to allow 6-story buildings citywide by an 8-1 vote](https://x.com/berkie1/status/1889130323474002215). In context that is a huge change. Under the old rules only 350 units (!) total were expected over 15 years and 85%+ of the existing housing wouldn’t have been legal to build. [Here’s a primer on the changes](https://docs.google.com/document/d/1frmIjXVm-DXKKXu7D3xMA71kicVjXeDOGrzQeXydsWQ/edit?tab=t.0). They had to compromise a bit on setbacks and lot size to get it over the finish line, but it still seems great.

[![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F37f5cf0b-efd3-4a7f-9930-8809b1285d5f_1200x670.jpeg)](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F37f5cf0b-efd3-4a7f-9930-8809b1285d5f_1200x670.jpeg)

Six stories is below what you’d want in some places, but it’s a huge step up here, and you can get remarkably dense with that alone.

#### Denver

[Denver legalizes ADU](https://x.com/jaredpolis/status/1858758063781466625)s in neighborhoods citiwide as Governor Polis cheers them on.

#### Minneapolis

[The Ameriprise tower in Minneapolis sold for $6.25 million](https://x.com/zyudhishthu/status/1885111107016122374?s=46&t=MjnX_DXTQJUzZBI6imUASg) (from what I can tell there was no assumption of liabilities either), versus when it sold for $200 million in 2016.

[![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff41da939-33bd-40d9-9127-ee4b4347a417_1006x2048.jpeg)](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff41da939-33bd-40d9-9127-ee4b4347a417_1006x2048.jpeg)

As usual, I interpret this as the maintenance costs being high while occupancy is low, and an inability to legally use it as residential space or useful commercial space, so the marginal value here is mostly option value and the price is essentially zero.

#### New York City

[We used to be a country. A proper country. And yes, this is a selective shot from NJ.](https://x.com/TheOmniZaddy/status/1849640557863174280)

> Autistic Transit Enthusiast: fucking wild how new York used to look like someone’s first cities skylines city.
> 
> ![Image](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d72b123-592b-4356-81f5-9e85e6b3afa3_530x780.jpeg "Image")
> 
> The Omni Zaddy: Can’t believe it didn’t respect the character of the neighborhood ![😢](https://s0.wp.com/wp-content/mu-plugins/wpcom-smileys/twemoji/2/72x72/1f622.png) I am sure that this building has remained an annoying eyesore that is broadly hated by New Yorkers to this day!

[Taylor Swift explains a large part of the appeal of New York City](https://x.com/BrentToderian/status/1862342818007789659), that you don’t have to plan things within physical space, you can much more allow things to simply happen. She talks about the night, it’s also true of the day and life in general. It doesn’t seem like it should matter so much, but it actually does. Also for cultural reasons that may be related in a non-obvious way, New York plans, when they do get made, are more reliable than plans elsewhere, not less.

Mayor Eric Adams has some issues, to say the least, but he does support the City of Yes, and general efforts to build more housing where people want to live, if not in the exact ways or to the degree I would prefer.

[Chris Elmendorf looks at the City Council’s amendments to City of Yes](https://x.com/CSElmendorf/status/1865792758503371216), saying it’s [wild how thoroughly they sheltered low-slung residential neighborhoods from change](https://t.co/6wPtOQUiSU). It’s still progress, but far less than we would have hoped.

[And it did pass](https://x.com/tahrajirari/status/1864796914048204839). Notice anything about this map?

[![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbf1a0aaf-4c00-4182-aa8d-34911f8294f9_988x1245.jpeg)](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbf1a0aaf-4c00-4182-aa8d-34911f8294f9_988x1245.jpeg)

The richest places where people most want to live mostly voted yes. The poorer places, despite how the amendments ‘shielded them from change’ mostly voted no.

[How about we fix (as in repeal) the Special Clinton District](https://x.com/mnolangray/status/1881752196892815575), which was created in 1974 and means a remarkably high value area of Manhattan is severely underbuilt and instead has the name Hell’s Kitchen and is [host to the Daredevil?](https://en.wikipedia.org/wiki/Daredevil_(TV_series))

[![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3fcce8ec-5161-4f97-b989-9327a394077d_1079x1412.jpeg)](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3fcce8ec-5161-4f97-b989-9327a394077d_1079x1412.jpeg)

The latest [Adams proposal is called “City of Yes for Families](https://www.cityandstateny.com/policy/2025/01/adams-announce-family-friendly-housing-initiatives-state-city/402048/?oref=csny-category-lander-top-story).’ This involves zoning changes and additional housing initiatives, alas including foolish ones like down payment assistance. I am down for emphasizing family housing (as in 2+ bedroom apartments rather than 1-bedrooms and studios) but mostly I wish we would just focus on building more housing. The rest will take care of itself.

A cool motivating factor, [Congressional representatives in shrinking areas like New York City need to support building more housing](https://x.com/Brendan_Duke/status/1888934486915645839) if they don’t want to fight each other after redistricting in 2030. We have no idea if that is why Rep. Dan Goldman is endorsing Zellnor Myrie for mayor, but we’ll take what we can get.

#### San Francisco

A fun fact about the world is that people remarkably rarely say ‘well, that would be a super bad look, maybe we should try and not appear maximally unreasonable so we don’t give them a great talking point.’

I mean, I respect the hell out of not doing that. It’s just, wow, all right then.

[Thus](https://x.com/sp6runderrated/status/1879257360344199255):

> sp6r=underrated: I really want to hammer this.
> 
> [SF permitted](https://t.co/P8wcnSY7kK) 0 homes in the last month. None.
> 
> If Sacramento was serious, which it isn’t, this would spark immediate action.

[![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2de10ae4-a48c-43ea-838a-296cacdd4396_1466x431.jpeg)](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2de10ae4-a48c-43ea-838a-296cacdd4396_1466x431.jpeg)

[I don’t understand how this happened but it’s great](https://archive.is/Pe0cm): San Francisco approves $700/month ‘pod’ housing at a former bank building in 12 Mint Plaza. You get a pod bed to sleep in, plus there is communal space, and they’re looking to expand to another larger location.

> [Armand Domalewski](https://x.com/ArmandDoma/status/1851756157758828900): it is really frustrating that so many people have tried to shut these sleeping pods down by arguing they’re inhumane while every single person I’ve met who lives in them is desperate for the city not to shut them down.
> 
> Like I’ve talked to at least three people who live in these pods and they’re all baffled by why people think evicting them somehow advances the cause of social justice.
> 
> Kelsey Piper: There’s something about small housing that brings out the absolute worst in people – instead of being rightfully angry at scarcity they get deeply and personally angry at the existence of small options and everyone who isn’t trying to shut them down.

[Judge strikes down San Francisco’s vacant home tax](https://www.sfchronicle.com/politics/article/judge-strikes-san-francisco-s-vacant-home-tax-19881408.php). Very California. They have not as far as I know struck down [the vacant storefront tax](https://thefrisc.com/sfs-empty-storefront-tax-after-a-year-s-delay-has-little-effect-f2d10593af58/), but neither do we have reason to think they are enforcing it. I find it hard to tax empty storefronts given both how hard it is to actually open a store in San Francisco, and also SF’s general failure to enforce laws? As usual, the arguments of ‘this tax won’t be effective’ raise the question of ‘if the tax wouldn’t change behavior, doesn’t that mean it’s a great tax?’

#### Silicon Valley

It remains a bunch of suburbs at best, despite the immense amount of lost value.

> [Nate Silver](https://x.com/the_transit_guy/status/1879396969564852651): People can comment on whatever they want but Silicon Valley is a bunch of suburbs. Like go live in a real city if you have a Take on NYC.
> 
> Hayden: Silicon Valley could’ve been one of the most unbelievable and prosperous places on the planet, but elected officials decided to listen to NIMBYs for decades, and this is what the commercial corridor where the world’s most valuable company is headquartered looks like:
> 
> ![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe32acade-57e9-47c8-a493-7555d3be7af3_1199x476.jpeg)
> 
> Imagine if nearly all the most innovative and wealthy companies on the planet descended came with jobs and investment enough to make the Vanderbilts blush and you keep it a glorified strip mall. [I touch on it here](https://t.co/cpS4a8HHQX):

#### Texas

> William Eden: Texas Property Code:
> 
> “In addition, a property owners’ association can neither prohibit nor regulate the following:
> 
> – possession of firearms or ammunition (Section 202.021)
> 
> – lemonade stands (Section 202.020)
> 
> \[end of list\]”
> 
> I have a startup idea and the HOA can’t stop us ![😏](https://s0.wp.com/wp-content/mu-plugins/wpcom-smileys/twemoji/2/72x72/1f60f.png)
> 
> It’s the \[end of list\] that gets me. These are the entirety of your enumerated protections from HOA tyranny in Texas. Thanks to @jamespayor for his diligent research of the Texas Property Code ![🫡](https://s0.wp.com/wp-content/mu-plugins/wpcom-smileys/twemoji/2/72x72/1fae1.png)
> 
> First half of the business is set up
> 
> ![Image](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1142e7be-19d2-44fc-a65e-c619e87e5868_942x1200.jpeg "Image")

#### Other Considerations

[Our cities need more shade](https://thenewurbanorder.substack.com/p/its-time-for-a-shademaking-movement), especially as temperatures rise. An underrated concern.

It’s remarkable how much people will sacrifice in the name of sunlight, then never consider that we might want to walk in the shade.