Houston

Article

Houston is a recurring place in the Astral Codex Ten archive, appearing 19 times across 19 issues between April 14, 2021 and April 01, 2026. The archive places it in contexts such as “laws of Houston, Texas”; “HOUSTON, TX ( RSVP )”; “superimposed over, say, Houston or Philadelphia or New York City”. It most often appears alongside Berkeley, Chicago, Denmark.

Metadata

Category: Places
Mention count: 19
Issue count: 19
First seen: April 14, 2021
Last seen: April 01, 2026

Appears In

- Berkeley (10 shared issues)
- Chicago (10 shared issues)
- Denmark (10 shared issues)
- Netherlands (10 shared issues)
- New York City (10 shared issues)
- San Francisco (10 shared issues)
- Scott (10 shared issues)
- Texas (10 shared issues)
- Atlanta (9 shared issues)
- Austin (9 shared issues)
- Australia (9 shared issues)
- Boston (9 shared issues)

External Links

Source Context

Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.

Prospectus On Próspera

April 14, 2021 · Original source

It actually goes further than this - you can choose to be in a particular location within a Best Practice Peer Country. Trey uses the example of a developer choosing to build a skyscraper using the laws of Houston, Texas. Since Houston is in America, a Best Practice Peer Country, the developer will be legally protected as long as they conform to Houston’s building regulations.

I don’t envy the PAC if they have adjudicate disputes involving, say, a doctor who has chosen to be regulated by the medical code of Norway suing her office building regulated by the laws of Houston, Texas. But they’re trying to rise to the occasion: their arbiters include a former Arizona Supreme Court judge, the head of the Cato Institute’s Center for Constitutional Studies, and “the first Chilean lawyer to obtain permission from the Berlin Bar Association to act as a legal advisor in Chilean law in Germany”, which I guess sounds like the level of convolutedness you would need to be experienced in to make this work.

Inline links: their arbiters

Meetups Everywhere 2021: Times And Places

August 23, 2021 · Original source

HOUSTON, TX (RSVP) Contact: Tripp, trippsapientae[at]gmail[dot]com Time: 5:00 PM, Friday, September 17 Location: Hermann Park Conservancy Coordinates: https://w3w.co/stray.planet.gold

Inline links: RSVP, https://w3w.co/stray.planet.gold

Does Georgism Work? Part 2: Can Landlords Pass Land Value Tax on to Tenants?

December 10, 2021 · Original source

Here's a simple visualization of how an LVT paired with a Citizen's Dividend compares to conventional property taxes. It's just an illustration meant to make a rhetorical point, but now I'm curious to see a real-world version of this superimposed over, say, Houston or Philadelphia or New York City, and based on actual data.

Does Georgism Work, Part 3: Can Unimproved Land Value be Accurately Assessed Separately From Buildings?

December 11, 2021 · Original source

Gwartney says that when he was the assessment commissioner and chief executive officer in British Columbia, he had a staff of 690, and that this number has not changed significantly since then. British Columbia has a population of about 5 million, so that's 1 assessment officer for every 7,250 British Columbians. For context, the IRS has a staff size of 74,454, or about one IRS agent for every 4,425 Americans. I don't have data on how many property tax assessors the USA has in total, but the above slide suggests British Columbia's figure is on the high end. As for how you actually do assessments, sure, you can send out an army of assessors to value each and every property in your jurisdiction by hand. However, not only is that labor-intensive, it's also a recipe for inconsistency. Whatever method you're using to value properties needs to be consistent and standardized across all properties, so you don't have sharp discontinuities on the assessment map that are due solely to differences between Assessor Fred and Assessor Sally's personal methodologies. Thankfully, we're living in the modern age, and we have some fancy new tools at our disposal. 4. Modern Technology Georgists were doing split-rate assessments to allegedly good success long before the rise of the computer, such as J. J. Pastoriza's effort in setting up a Georgist tax regime in Houston, Texas in 1911. Today, we have spreadsheets, property value databases, GIS mapping visualizations, regression analysis, machine learning...the works. According to Gwartney, the Canadian province of British Columbia has revalued all its land and all its property on an annual basis simply by using computers and market analysis, ever since he first helped them set up their system back in 1975. Not every jurisdiction revalues their land this thoroughly and this often, but Gwartney says there is no significant technical or staffing barrier standing in the way. Gwartney has been retired for some time, so his seminar didn't cover all the latest cutting-edge techniques that have come out in the last few years. Let's look at some recent papers and see what new tools assessors have to play with. The first on my list is Land Value Appraisal Using Statistical Methods by Kolbe, Schulz, Wersing, and Werwatz (2019). This is a study on mass appraisal techniques using real estate transaction data from Berlin, Germany. It claims that not only are the results cheaper and faster to generate than those done by conventional property assessment methods, but they are also no less accurate than those done "by hand" by experts. Kolbe et al. assert that, provided you have access to high quality market transaction data, you can perform accurate and efficient mass appraisals of land values. They chose Berlin because it "has a very effective system of property transaction data collection and storage," in contrast to other parts of Germany. They cite some prior work by Almy (2014) studying Canada, the Netherlands, and the United States, suggesting that the assessment cost per property can be brought down to 20 Euros–25 times cheaper than what some other people (Fuest, et al. (2018)) assert. Given an average tax receipt of 2,000 Euros per property, this means that the assessment cost should represent only about 1% of the funds raised. Is that good? Let's take this assertion at face value for the moment and compare it to the cost of the IRS. Federal tax receipts in 2020 were $3.42 trillion, and operation costs for the IRS were $12.3 billion, or 0.36%. However, the IRS outsources most of the labor of tax preparation to the taxpayers themselves, with compliance costs estimated between $200 billion and $400 billion a year, to the delight of Intuit. Add that up and the total cost of federal tax collection to the economy is anywhere between 6-12% of the amount it raises. And what about sales tax? According to a 2006 report by PriceWaterHouseCoopers: The study finds that the national average annual state and local retail sales tax compliance cost in 2003 was 3.09 percent of sales tax collected for all retailers, 13.47 percent for small retailers, 5.20 percent for medium retailers, and 2.17 percent for large retailers So a compliance cost of 1% would be way more efficient in terms of cost collection than the other two most common forms of taxation, and taxpayers don't even have to do anything themselves, other than pay the bill. Alrighty, how about the accuracy? The authors cite two international examples, Australia and Lithuania, as among the few countries in the world that have both a Land Value Tax and statistical methods for mass appraisals. Hefferan and Boyd (2010) assert that objections to assessments from property owners in Australia are less than 1%. I'm willing to buy the improved efficiency claims just by taking a look at some methodologies. It seems reasonable that computerized records and algorithms can cut costs significantly; the real question is if you're trading off accuracy. The other papers I found on the subject are Bencure, et al (2019) in BayBay City, Philippines, Kilić, et al (2019) in Croatia, Yalpir & Unel (2017) in Konya, Turkey, and Raslanas et al. (2014) in Vilnius, Lithuania. Let's dive in and examine some methods. 5. Mass Appraisal Methods Here are some of the latest mass appraisal methods cribbed from the research papers listed above. All of these are based on taking market transaction data, plotting them out on a map, and running computations over them to estimate valuations for the properties you don't have known values for. Furthermore, all of these methods are able to value land and building values separately. Multiple Regression Analysis This paper by Yalpir and Unel out of Turkey gives a straightforward example of using Multiple Regression Analysis for land valuation. For those of you who didn't study math, let me explain regression analysis. This is a family of mathematical models where you basically take a data set, ask the question "what mathematical formula would best fit this data," choose a basic equation model, and then have a computer search for a set of coefficients that "best fit" that curve to the data with the least amount of error. The simplest example is using linear regression on a scatterplot of observed data points to fit a trend line. This is a common exercise in freshman physics and statistics classes. You can use more complicated versions of this numerical method to take a big bag of observations (real estate sales) and use "multiple regression" to tease out dependent variables (land value and improvements value) based on the independent variables (size, location, age, number of bedrooms) of your observations. In this case the team identified about a hundred different factors that can affect the price of a property: Then you create an entry for each property, fill in the values for each of those characteristics, and run it through the regressor. Take note of how many of these factors start with the words "proximity to." Each of these can be calculated automatically just by knowing where the property is on a map, and each of them is an independent contributor to the value of the property's location. The next step is to generate individual "index maps" that combine various related features into combined heat maps. Then you run everything through and see if it works. You can get the land share of the final value by combining the contributions of all the individual factors that you associate with "land," such as proximity to important things. In the verification section the authors say: As a result of the analysis, since the significance level (0.000) p <.05, corresponding to the F values in the ANOVA test, indicates that the regression analysis is appropriate and the models are significant. The criteria that make up the model account for about 85% of the market value and 15% cannot be explained for reasons such as economic, non-existent data and unearned income. Unfortunately, they don't say anything about how accurate their model is for assessing land values specifically. Otherwise, this is a pretty good example of using the Multiple Regression method for estimating the individual contributions of various factors to overall property values. Gwartney says Multiple Regression Analysis was a standard method he typically used, of which this specific paper is just one example. Nonparametric kernel regression This will be a method familiar to the programmers in the audience who have any experience with image processing algorithms. Here's an example from this old Gamasutra article: The basic idea here is to take a matrix of numbers, called a "kernel", and run that over every pixel in a source image. The kernel tells you how strongly to weight all of the source pixel's neighbors to compute a final result for that position. A simple "box blur" is a kernel where every value is 1 (meaning it averages the values of all neighboring pixels within a range). The more subtle gaussian blur illustrated above uses a two-dimensional normal distribution of values so that each pixel is most affected by those nearest to it. So let's apply the same principle to land valuations. If you have a map with lots of transaction data of pure land sales–defined as sales of either vacant land or teardown properties (where the building value is essentially zero)–then you can use a special kernel filter to smoothly interpolate land values across the region. So you basically have a smooth curve that mostly favors close-by points, tapers off a bit, and then disregards anything outside a certain distance entirely. The big assumption here is that land values change smoothly and do not change suddenly across very short distances. There are, in fact, locations with sharp jumps in value (any town with an "other side of the tracks," for instance). But for cases where we know a priori that land values change smoothly, this method is appropriate. No other prior restriction is placed on the form of the land value map, however, and this is why it's called "nonparametric." Here's an illustration. The outer box is the entire search distance that the kernel considers, and the circles represent the falloff of the curve itself. The size of the box is called the "bandwidth" and is set by the user. Everything outside of it will have zero influence on the kernel's output at any given location. This method operates on the same basic logic that I used when I hand-estimated the land value of that San Francisco house in Part I based on the value of the empty lot next door. However, it makes the whole procedure systematic. It can easily and accurately estimate the land value of a property with a big fat building on it simply by smoothly interpolating the known values of the nearby parking lots. Of course, it has limitations. First and foremost, it's a highly local operation, so if you have properties you're trying to value that don't have nearby pure land sales data, you can't really do much with this. Also, most people assume that city centers have less market transactions for undeveloped land than the countryside, as did I until I read that paper by Albouy in Part I. But in any case, this is just one method in your toolbox and might not be sufficient by itself. Its key advantage is that it works directly from true market data for land and doesn't need or want any other subjective data. In the end, basic kernel estimation just fills in the land value of unmeasured locations with a local weighted average of known locations. Nonparametric adaptive regression Kolbe, et al. build on the kernel regression method with a technique called Adaptive Weights Smoothing (AWS), which runs in several iterations and adds additional weight to any observed data points that are sufficiently close to the point being estimated. I'm not 100% sure about what all the math means, but it seems like it's basically a "smarter" version of the basic kernel method. Left: Nonparametric kernel regression, Right: Adaptive Weights Smoothing. I think the authors goofed and printed the same figure twice with different headings because they're identical if you overlay them in Photoshop. Semiparametric regression Now, the above two methods assume you have plenty of "pure" land sale records to work with. But if you're trying to work out prices in the city center, you've probably mostly got land and buildings mixed together. To do this effectively, we need more data, and this is where the "parameter" in "semiparametric" comes in. The model described in Kolbe et al. seems like a flavor of multiple regression analysis that takes the price, the location, and various characteristics of the building and feeds it into a regressor. But we've got "semi" parametric here. What does that mean? Well, if you already know how certain relationships between the data work a priori, it's better to enforce those relationships yourself rather than leave it to the computer. Here, we enforce the assumption that if two properties are right next to each other, then the value due to location is going to be essentially identical. This algorithm starts by ordering things geographically and then working out the differences in observed price by regressing on the difference between remaining property characteristics. In this method, the power of "location, location, location" is not something we're leaving to the regressor to discover by itself. Results of the Semiparametric regression method, we can see some significant differences from the simple kernel-based model. As you can see above, this gives you more detailed and likely more accurate results, and you're better able to assess the values of properties with buildings on them, even in the absence of pure land sales. This technique is more complicated and bakes in assumptions about the power of location, but otherwise doesn't assign subjective human weights to the various property characteristics. The chief human bias comes in the form of deciding which property characteristics are measured and made legible to the model in the first place. Okay great, but how accurate are the above three methods? Their main point of comparison is this thing called the "Bodenrichtwerte," or BRW. I think that means "ground-level-values" in English, and it's an expert-assessed map of land values for Berlin done the traditional way. The nonparametric kernel regression method has a correlation of 0.704 with the traditional method and has the added disadvantage that it's not able to produce estimates for the city center, only the outlying areas. Furthermore, the BRW map does show sharp discontinuities, which is another knock against the kernel method, at least for the city center. What about the iterative method? Kolbe et al. find that "the agreement between [Adaptive Weights Smoothing] land value estimates and, both, land prices and BRW land values is fairly good for all values of λ." Doing some quick checks, their values seem to be within about 85% of the BRW values. A different Kolbe et al. paper called Identifying Berlin's land value map using adaptive weights smoothing goes into more detail and claims to give "similar" values to that of the BRW. For the semiparametric method, they "found a strong positive correlation of 0.845" between their numbers and a previously expert-assessed set done using the traditional method. That sounds pretty good. It seems their margin for error is about plus or minus 15% compared to the traditional expert method. I'd like to see more direct comparisons against market transactions themselves, though, because if the prior expert assessments are wrong, then the main achievement here is improved efficiency, not accuracy. However, this method doesn't seem to be dramatically less accurate than the old way of doing things. The last three models came from the Berlin case study, where you have excellent market transaction data in an extremely wealthy and high-trust society. But what if you're trying to assess land in a developing nation with poor market transaction records, weak institutions, and widespread poverty? Innovative Land Valuation Model (iLVM) This is the particular name of the method described in Development of an Innovative Land Valuation Model (iLVM) for Mass Appraisal Application in Sub-Urban Areas Using AHP: An Integration of Theoretical and Practical Approaches by Bencure, Tripathi, Miyazaki, Ninsawat, and Kim. They used BayBay City, Philippines as their case study. Whereas the previous models are very "hands-off" and let the computer work out the relationships between prices and property characteristics, here you get expert human opinion directly involved in building the model, baking in weights that directly embody judgments like "properties next to major roads are more valuable." These judgments are based on expert opinions that presumably come from observed experience but are a priori judgments nonetheless. Here, look at this big complicated flowchart. The "Analytic Hierarchy Process" in the box on the left is a particular kind of method for getting experts to set weights. The authors give this reason for using it: Despite criticism pinpointed by other scholars, the AHP remains the commonly used in many research fields and practical applications. This is because the AHP: (1) overcomes human difficulty in making simultaneous judgment among factors to be considered in the model; (2) is relatively simple as compared to other MCDA [multi-criteria decision analysis] methods; (3) is flexible to be integrated in various techniques such as programming, fuzzy logic, etc.; and (4) has the ability to check consistency in judgment After identifying a list of "factors" that can affect land value, they group them into taxonomical buckets: Note that certain factors like "Coastline" appear in multiple buckets; this captures the various influences a characteristic can have. For instance, land on the coast tends to be more economically valuable because of tourism, shipping, fishing, etc., so that goes under "economic." But land that's next to the coast is also more likely to flood, so it also goes under "environmental." And then there are various land use restrictions that apply specifically to coastal areas, so it goes under "legal" as well. In this way, a single factor like "the property is on the coastline" can have both positive and negative effects on land value (e.g., it's more economically valuable but it also might flood, and there are certain things you aren't allowed to do there). The next step is to set down some rules for how sensitive each factor is to location and distance. So here we can see that the economic benefit of being on the coast is most strongly felt if you're within half a kilometer of the ocean, but the environmental effect (e.g., risk of flooding) is most strongly felt when you're within 0.03 kilometers. And so on and so forth. Your experts help you work out all these rules. Note that for a few of these factors (such as land use and slope), you use metrics other than distance (e.g. land use classification and grade). Then you take all that stuff and assign everything a value between 0 and 5. Your team of experts then uses this table to come up with a set of weights for everything. What essentially comes out of this is a big linear equation with a bunch of coefficients for every one of your factors, which is then broadly fit to the observed market prices. When you're done, you can take any property on your list, multiply each of its characteristics by its respective weight, run that through your equation, and calculate the predicted price of the land. So how accurate is it? The authors compare it to standard Multiple Regression Analysis and claim it fares better. The Root Mean Square Error is quite a bit less than MRA. In addition, I think it's also saying that the MRA algorithm decided that only four of the factors were significant and basically ignored all the rest. By contrast, iLVM was able to maintain contributions from all the factors, because it doesn't leave that decision to the computer. I'm not 100% sure; it's not clear from the paper. The authors claim that about 67% of the variability is explained by their model, but they note that there are some areas where the model can be off by more than a factor of 1.0 in either the positive or negative direction. One thing that's kind of fun about this model is that you can make neat graphs like this that show the individual contribution of each factor: The main downside to this model is that it relies on a whole lot of subjective expert opinion and can be questioned on that basis. That said, it can be cheaply deployed in a transparent and consistent way across a large area. You can see why that's attractive for a developing nation with weak institutions and poor market transaction records; the argument is that this is a significant improvement over the former status quo. I wonder how well this model performs when you feed it better market transaction data, and how that would compare against all the others methods under identical conditions. More research is needed. Rather than drag you through a bunch more research papers, I'll just leave these others I found cited in the above studies: Killić et al. (2019) - Fuzzy expert system for land valuation in land consolidation processes

Spring Meetups In Seventy Cities

April 10, 2022 · Original source

HOUSTON, TX Contact: Naman / nmehndir (nmehndir@gmail.com) Date, Time, Location: Undecided, we'll figure this out in the Houston SSC-LW Discord server

Inline links: Houston SSC-LW Discord server

Book Review: San Fransicko

June 23, 2022 · Original source

That regression line looks suspicious, but I hear computers are never wrong. So one possible conclusion is that SF has around the amount of homelessness you would predict from its very high housing prices, and around the percent unsheltered you would predict from its balmy winter weather, and there’s nothing further to be explained. Shellenberger does not like this conclusion. San Francisco’s mild climate alone cannot explain why it has more homeless people than other cities. Miami, Phoenix, and Houston have year-round warm weather and far fewer homeless than San Francisco per capita. Per capita homelessness in San Francisco, Greater Miami, Greater Phoenix, and Greater Houston in 2020 was 9.3, 1.3, 1.6, and 0.8 per 1,000 residents, respectively. And Greater Miami, Greater Phoenix, and Greater Houston saw their per capita homeless population decline from 2005 to 2020 by 39, 17, and 74 percent while San Francisco saw its rise 30 percent. Nor can housing prices explain the discrepancy. Palo Alto and Beverly Hills have mild climates and expensive housing but don’t have San Francisco’s homeless problem. As for the Zillow study that was reported to find a correlation between rising rents and homelessness, a deeper look at the research reveals a more nuanced finding. Homelessness and affordability are correlated only in the context of certain “local policy efforts [and] social attitudes,” concluded researchers. This feels like kind of a shell game. San Francisco’s mild climate alone can’t explain why it has more homeless people per capita than Miami or Houston. But as the graph above shows, housing prices do explain about 75% of the difference between SF and those two cities. But because the book talks about the Miami-SF discrepancy in the paragraph about climate instead of the paragraph about prices, it makes it sound like a mystery that neither prices nor climate can explain. The Zillow article mentioned is Homelessness Rises Faster Where Rents Exceed A Third Of Incomes, which is based on this study. Shellenberger’s summary is not really the researchers’ conclusion. The article does mention “local attitudes” and “social policy” once, but only to explain that the paper includes a term representing “latent factors” that they’re not going to bother distinguishing from each other in their model, and some of those terms could be local policy or social attitudes. Later they mention there are some outliers in their model (eg Houston), and it would be reasonable to assume that the latent factors help explain the outliers, but they don’t give us any reason to think that this is more interesting than the fact that every model ever will have outliers. But also, this is one study by Zillow. Alyssa and I both tried the same analysis, and found the same thing, with a correlation that’s unusually high for this kind of work. Sure, there are outliers, but San Francisco isn’t one of them. San Francisco is only a couple of percent off where the regression line would predict. That leaves the point about Palo Alto and Beverly Hills. They “have mild climates and expensive housing but don’t have San Francisco’s homeless problem”. At first I felt like this was cheating - yeah, rich suburbs don’t have lots of homelessness, come on. But “rich” and “high property values” are pretty close to synonyms. If you’re going to say that high property values cause homelessness, isn’t it in fact pretty surprising that rich suburbs don’t have it? In fact, if you’re a homeless person, why wouldn’t you want to live in a suburb? Quieter (so probably easier to sleep at night) more places out of sight to pitch tents, less crime (important if you’re living on the street!), and potentially lower cost of living in terms of food and goods. I tried looking into this issue and found explanations like: Usually it’s poor people who become homeless. Cities have more poor people than suburbs, because they have more rental units, small apartments, public transportation, and blue-collar jobs. Suburbs, by natural consequence of their layout, enforce a certain wealth minimum before people can live there, and people above that wealth minimum rarely lose everything and become homeless. It’s strange that poor people tend to live in cities (ie places with very high land values), and you have to wonder whether there are ways that could be different, but it does seem true.

Inline links: Homelessness Rises Faster Where Rents Exceed A Third Of Incomes, this study

Highlights From The Comments On San Fransicko

June 29, 2022 · Original source

Houston Texas has reduced its homeless population from ~7,000 to ~4,000 in the last 10 years even as the metro area's population increased from 5.8 million to 7.0 million, and they did it by doing a housing-first solution that was viable and scaleable because housing costs were low. They housed 17,000 formerly homeless people during that decade (notice that 17,000 >> 3,000, so a lot of homeless people are transiently homeless). Houston's funding to homeless programs was $38 million in 2019, compared to LA's $619 million, and LA's homeless population went from ~25,000 in 2009 to ~55,000 in 2019 while the LA metro area* went from a population of 12.9 million in 2009 to 13.3 million in 2019.

James M on Houston’s success story:

Inline links: James M on Houston’s success story

Houston provides $12,700 in funding per 2019 homeless person

Bay Area Meetups This Weekend

September 16, 2022 · Original source

Also coming up this weekend are meetups in Washington DC, Atlanta, Columbus, Providence, Cape Town, Cambridge (UK), Kuala Lumpur, Chicago, Houston, Toronto, New Haven, Bangalore, and many more. See the list for more details.

Inline links: See the list for more details

Spring Meetups Everywhere 2023

April 10, 2023 · Original source

HOUSTON, TEXAS, USA Contact: Joe Brenton Contact Info: joe[dot]brenton at yahoo Time: Sunday, May 21st, 01:00 PM Location: 711 Milby St, Houston, TX 77023. Segundo Coffee Lab, inside the IRONWORKS through the big orange door, look for the ACX MEETUP sign at the entrance Coordinates: https://plus.codes/76X6PMV6+V6 Event Link: https://discord.gg/DzmEPAscpS Notes: We have a growing ACX, LW, EA scene in Houston with weekly Social meetups, monthly EA-specific meetups, monthly gaming meetup and monthly Thought-Gym (short form presentations & discussion).. Join our Discord server (https://discord.gg/DzmEPAscpS) where we will post additional coordination details. You can also tag me in a message or DM me on the server (Joe Brenton#4719).

Inline links: https://plus.codes/76X6PMV6+V6, https://discord.gg/DzmEPAscpS

Book Review: From Oversight To Overkill

April 12, 2023 · Original source

In 1999, I moved to Houston and joined the faculty at Baylor College of Medicine, where my new colleagues were scientists. I began going to medical conferences, where people in the hallways told stories about IRBs they considered arrogant that were abusing scientists who were powerless. As I listened, I knew the defenses the IRBs themselves would offer: Scientists cannot judge their own research objectively, and there is no better second opinion than a thoughtful committee of their peers. But these rationales began to feel flimsy as I gradually discovered how often IRB review hobbles low-risk research. I saw how IRBs inflate the hazards of research in bizarre ways, and how they insist on consent processes that appear designed to help the institution dodge liability or litigation. The committees’ admirable goals, in short, have become disconnected from their actual operations. A system that began as a noble defense of the vulnerable is now an ignoble defense of the powerful.

Highlights From The Comments On Housing Density And Prices

May 10, 2023 · Original source

Kangbashi, China’s most famous ghost city. What are housing prices like in the ghost city? Again from Bloomberg: Sitting on the southern outskirts of Inner Mongolia’s Ordos City (population 2.2 million), Kangbashi was the archetypal ghost city 10 years ago, with barren boulevards and empty buildings standing forlornly in the desert. Local officials are adamant that things have changed. They say 91% of homes in the district are occupied. In fact, after a yearslong construction freeze, the government approved six housing projects in 2020 and expects 3,000 homes to be built by the end of this year. Apartments in a new development are selling for 9,500 yuan per square meter, and downtown they go for 15,000 to 16,000 yuan, according to Liu Yueyue, 28, a salesman at a new residential development in the district’s northeast. “Would houses in a ghost town sell at such high prices?” asks Liu. Half of his customers come from outside Kangbashi, and most are parents who want to send their children to the well-regarded local schools, he says. Looking at this list of real estate prices across Chinese cities, Kangbashi seems squarely in the middle - for example, Wuhan and Xian are also in the 15,000 - 16,000 range. I claim this supports my argument: surely twenty years ago, houses in this particular deserted corner of Inner Mongolia would have been dirt cheap (if any even existed). But if you build a city there, it becomes just as expensive as any other city! Here it’s very obvious that the density caused the high prices instead of the other way around. Still, the Chinese housing market is weird, with significant vacancies even in expensive, well-developed cities. Paul Botts: No official vacancy rates are published in China and no specific definition of it exists there. Various think tanks and researchers both within that country and elsewhere have published estimates ranging from as low as 11 percent to as high as 24 percent. Those estimates have been for varying samples of Chinese cities, have used various definitions of housing vacancy rate, etc. The best (as in most systematic) estimate yet produced has come from researchers at a university in Liaoning. They used night-time urban lightsheds captured by a new (2018 launch) Chinese satellite having a new level of light sensing technology which allows separating out light from parks and plazas. They covered a large sample (49 cities), and made their sample representative of city type, city size, regions within China, etc. They also crossed-referenced with local housing data to ensure accurate balancing of their sample and to confirm that the satellite was successfully identifying light coming from housing blocks. They found vacancy rates of just under 20 percent in China's Tier 1 cities, and found rates above 20 percent in 40 of the 49 cities. They found the highest vacancy rates in western and northeastern cities, which are also the newest ones; that finding is consistent with the hypothesis of significant numbers of recently-built ghost cities. https://www.researchgate.net/publication/345092218_Housing_Vacancy_Rate_in_Major_Cities_in_China_Perspectives_from_Nighttime_Light_Data And Phil H (author of the blog Tang Poetry) writes: The price of housing in China has skyrocketed over the past few decades, as all those extra apartments have been built. I live in a pleasant but unremarkable southern city, and I paid London prices (about 4.5m yuan/$650k for a 1,300 sq ft flat). That seems to match Scott's hypothesis that high density leads to high prices. House prices here have risen much faster than incomes. They've risen in rural areas, too, but the increases in price in cities have been stratospheric. 4. Comments Accusing Me Of Not Considering Tokyo, Even Though I Included A Section In The Post On Why I Didn’t Think Tokyo Was Relevant I won’t name and shame people, but for example: You excluded Tokyo from your dataset. Tokyo has much higher density than SF and much lower price per sqft. Tokyo just kills this. Tokyo is bigger than New York and has significantly lower rent because they build more housing! This is in a wealthy country with even lower interest rates than the US. I don't think you have justified excluding non-US metros, like Tokyo, or Auckland. Doesn't this lead to the natural conclusion that there is a sufficient level of housing to build, and that the problem is that the USA's many metros are structured to prevent housing? It seems like you're just arguing that US metros are bad at building housing, which is also what Matt Yglesias is arguing. "Change my mind about housing, but don't mention Tokyo" is like saying "Change my mind about gun possession, but don't mention Switzerland." You can't test the effect of allowing new housing unless you're willing to look at cities that do, in fact, allow it. Tokyo and NYC both attract tons of new residents But Tokyo's housing rents have been stable, while NYC rents keep rising. Why? Tokyo has permissive housing construction laws. NYC makes building new housing almost illegal. Yes, dense cities are attractive, and that makes them get more dense over time. But it only makes them more expensive if you forbid new housing to keep up with the new residents. Tokyo! But I’m like the 10th person to bring it up… As I wrote on the original post (not even edited in! it’s been there the whole time!): I worry someone will bring up Tokyo as a counterexample. But I think Tokyo managed to build its way to low housing prices in the context of the rest of Japan also having good housing policy. Even if that isn’t true, Tokyo on its own is a quarter of the Japanese market, so it might be able to exhaust the entire pool of Japanese house-seekers by itself! That is, yes, you’re all correct that cities are only expensive in the context of more demand for city housing than the (NIMBY-constrained) city housing market can currently supply. You are all correct that if this problem were solved at the national level, then city housing would be cheap, and every additional city house would make it cheaper. My claim is that marginal changes - like Oakland building an extra 10,000 units, but everyone else staying the same - will most likely increase Oakland prices. Yes, if Oakland unilaterally built 50 million units, that would soak up the entire excess demand and probably lower prices everywhere (including Oakland). Yes, if the entire US switched to good housing policy at the same time, that would probably lower prices everywhere (including Oakland). But if we don’t do any of that stuff, and just build another 10,000 houses in Oakland, I think it would probably increase prices in Oakland. Some other people brought up that Japan has a declining population, and it’s much easier to have low house prices when your population is declining (compared to some previous time when number of houses presumably matched number of people), but ddd pointed out that people continue to migrate from the Japanese countryside to Tokyo, so its population continues to increase. Also, Mike (I’m stitching together two comments here): In a country with a declining population, you would expect that fewer homes are being built per capita because there's little to no competition for existing homes. But it's exactly the opposite! Japan builds far more homes per capita than the US does, despite their declining population […] As a result, the average Japanese home is very new and the average house is torn down and replaced after a relatively short 30 years. They're living in nice new homes for cheaper. 5. Comments Accusing Me Of Not Understanding Economics Maximum Limelihood Estimator writes: I think you're making a very common mistake here of confusing supply/demand with *quantity* supplied or quantity demanded. (This is very common! we teach students about this in micro 101 because it's so easy to make!) What you're seeing is that the quantity supplied is correlated with housing prices (true!). But this is very different from establishing that the supply curve--i.e. the amount of housing that would be produced at any given price, and what moves up/down when we regulate/deregulate supply--is positively correlated with price. Figuring out what supply curves look like is a lot less intuitive and requires some high-grade econometrics, which is why economists had to set up a whole commission just to study this particular problem (the Cowles Commission). In terms of resources for understanding how these concepts are different, a micro 101 textbook will cover this distinction. For the econometrics side of this, I've heard good things about Scott Cunningham's *Causal Inference Mixtape*, although I haven't personally used it. My claim is that increasing density within a city shifts the demand curve for housing within that city, because of increasing desirability. MLE later gets more on point: The effect you're discussing here is kind of real in a sense. When the marginal utility of housing increases for *other* people, density arguably becomes more desirable for me, which is kind of like the demand curve shifting up. These are called bandwagon goods and discussed here: http://econfac.bsu.edu/research/workingpapers/bsuecwp200804gisser.pdf In theory, the bandwagon effect could be so strong that parts of the demand curve are upward-sloping. Solutions like this are not, technically, prohibited by the laws of mathematics, just the laws of economics. (And arguably of physics--see paper for conditions where these kinds of bandwagon effects imply the amount of housing in the city would have to be negative). In practice, this effect exists but just can't overcome the normal, non-weird economics that says "making more of a good makes the prices fall." Again, I claim the existence of Manhattan vs. Conanicut shows that sometimes it does. I cannot find the words “housing”, “real estate”, or “land value” anywhere in that paper. Alex Poterack writes: There's two things going on here: confusing shifts in demand with movement along the demand curve, and getting causation backwards. You're assuming density causes prosperity, rather than prosperity causing density. There are ways the former can happen, but the bigger thing is that, for a wide range of historical reasons, you can make a lot of money in NYC and SF, so lots of people want to live there, so they get very dense. This is the prosperity shifting demand right, so at any given price, more people want to live there; this drives prices up, and they go higher the more fixed supply is. If you built a bunch of housing in Oakland, lots of people would move there because it's cheaper, which is movement along the demand curve; it's still the same number of people who want to live there at any price. Now, it's possible that the increased number of people living there makes the city more prosperous (this is the phenomenon of induced demand), which would shift demand right, but there are way more differences between NYC/SF and Oakland than just the density, so I don't think it would shift demand enough to offset this. In particular, if it's just a small increase in small, it's also a small increase in density, so there's almost no shift in demand (but there is movement along the curve). I still think this is missing my point, but I present it here in case anyone else is enlightened by it and wants to try further to convince me I’m making this mistake. 6. Comments By Famous People Who Potentially Have Good Opinions Scott Sumner is an economist and blogger; he writes: It is certainly the case that building more housing can make a city more desirable, and that this effect could be so strong that it overwhelms the price depressing impact of a greater quantity supplied. But studies suggest that this is not generally the case. Texas provides a nice case study. Among Texas’s big metro areas, Austin has the tightest restrictions on building and Houston is the most willing to allow dense infill development. Even though Houston is the larger city, house prices are far higher in Austin: Houston pretty much describes the “Oakland with more housing” outcome that Alexander views as somewhat far-fetched. Only in this case, it’s Austin with more housing. Alexander seems too quick to accept the, “If you build it they will come” idea—that you can build more housing and thereby boost demand so much that prices actually rise. I started the post with a graph of about 50 cities, showing a positive correlation between density and price. I’m having trouble seeing how Sumner’s point isn’t just “if you remove 48 of those cities and cherry-pick two, the relationship is negative”. My attempt to place Austin and Houston on the original graph, using Sumner’s data plus a few other things available online. Why weren’t they on there already? Maybe because the graph is metro areas and Sumner was talking about Austin and Houston as cities, but I’m not sure and agree this is confusing. Everyone knows Austin is more expensive than Houston because Austin is a trendy tech and culture hub and Houston isn’t (and relatedly, because Austin’s median family income is 50% higher than Houston’s). Unless someone wants to claim that its failure to build housing helped turn it into a trendy tech and culture hub, I don’t think there’s much point to this comparison. It’s true that Houston’s bigger size didn’t let it leapfrog over Austin to become a trendy tech and culture hub, which goes against some of what I claimed in the first part of this post. But I never claimed there would be a perfect 1-1 correlation between city size and trendiness, or that you could never find a pair of cities where one was bigger but the other was more trendy. Just that there would be a correlation. Moving on: Here’s the problem with this argument. It mixes up population change due to economic effects such as the benefits of agglomeration, with population changes due to regulatory changes such as less strict zoning. If you look at things this way, then the stylized facts work against Alexander’s argument. Over the past 50 years, increasingly strict zoning has reduced housing construction on big cities like New York and San Francisco. As a result, their populations have increased by less than in cities with less strict zoning, such as Houston. If Alexander were correct, then the price gap between the tightly controlled cities on the coast and the more laissez-faire cities of Middle America should have shrunk over time. Instead, the price gap has widened. New York and San Francisco were always more expensive than other cites, but with tighter zoning and less new construction the gap has become far wider. During the last fifty years, there was also deindustrialization and demographic sorting. This is just the Austin vs. Houston story all over again. Alexander is implicitly viewing this outcome as a “problem” for the city that builds more housing. They must sacrifice so that the rest of the country can gain. But in his scenario, Oakland is better off. Indeed if it were not better off, then why would more people choose to live in Oakland? In order for it to be true that building more housing boosts housing prices, it must also be true that the quality of existing houses (including neighborhood effects) rises by more than enough to offset the increase in supply. That means the new housing construction must make Oakland such a desirable place to live that the amenity effect overwhelms the quantity effect [...] Of course, economic change always has winners and losers. Here’s how I would describe the impact of allowing more housing construction in Oakland, in the unlikely event that this did raise housing prices: 1. America would benefit. 2. Oakland would benefit. 3. Poor people in America would benefit, in aggregate. 4. Affluent people in America would benefit, in aggregate. 5. Homeowners in Oakland would benefit. 6. Some renters in Oakland would benefit (from a more economically dynamic city.) 7. Some renters in Oakland would suffer from higher rents. In the much more likely case where new housing construction would lower prices, the impact described in #5 and #7 might reverse. Either way, there is no defensible argument for not building more housing in Oakland, regardless of the impact on price. If building more housing reduces its price, then there is a strong argument for allowing more housing construction. If building more housing raises its price, then the argument for more construction is even stronger. I agree with all this. Jeremiah Johnson is a co-founder of the Center for New Liberalism, host of the Neoliberal Podcast, and a YIMBY activist (not to be confused with Jeremiah “Liver-Eating” Johnson, who killed 300 Native Americans and ate their livers). He writes: Here's why you're wrong in a single sentence: Demand causes high prices, not new units. Prices are high in SF and NYC because those are desirable places to live for a huge number of people. People all over the country and the world would live there if they could, and prices reflect that. The fact that the densest cities are the most expensive is true. But the high prices are not caused by density - rather, the density and the high prices are both a consequence of crushingly high demand […] There's a feedback loop, but what matters here is the elasticity, which is less than one. We can measure this empirically. New housing lowers prices via the mechanism of adding supply, which is basic economics and how we expect markets to work. New housing could raise prices if it also made the city a more desirable place to live and shifted people's preferences, such that there was more demand to live there after the new housing is built. If you think it's unclear which of these effects would dominate, luckily we have empirical data that over and over and over shows adding housing supply does indeed lower prices on a local level. This is a fairly well established result that replicates well. edit: I'm actually thinking about drawing out the weighted DAG graphs here to make the conceptual stuff easier, but it would be pretty long. I'd love to do this as a guest post. I’m skeptical of the empirical results because they don’t match the much stronger “Manhattan vs. Conanicut island” empirical results, and if I try to think about why, the best explanation I can think of is that the Manhattan experiment has been going on longer (ie long enough for Manhattan’s extra residents to found businesses and institutions that attract new people). I’ve told him he can try pitching this guest post to me; in either case, I would be interested in seeing the graphs. Several other people also posted this graph that Johnson helped make famous: Hopefully by now you can predict my objection: the places in the southeast corner are mostly unfashionable red state Sun Belt cities; the places in the northwest corner are mostly trendy liberal coastal cities. My conclusion is that trendy liberal coastal cities are both more NIMBY and more desirable, and if you use this to draw any conclusions about housing policy you’ll just end up confused. But maybe I should take this same lesson to heart myself. Dense cities are mostly trendy liberal coastal cities; uninhabited tundra in North Dakota isn’t. Maybe the demand is just for trendy liberal coastal cities, and once you attain that status, extra density doesn’t matter that much. Maybe Oakland has already maxed out its “trendy liberal coastal city” status, and even if it became Manhattan-sized, it wouldn’t get any trendier, or would get trendier only with a long time lag. There are a few very trendy small coastal villages in California (think eg Sea Ranch); maybe these (rather than North Dakota) are the natural control group for San Francisco. I think they are still cheaper than SF, but maybe not by very much. Cameron Murray is a housing economist whose work some other commenters recommended; he also writes the blog Fresh Economic Thinking. He very kindly showed up and wrote: I think you are in general right that agglomeration effects are real, which is why bigger cities have higher value to residents. I agree that people move locations. But I think you can go a step further. If one city is growing faster and densifying, surely those people are not demanding homes in other cities and those cities build slower. This is part of the spatial equilibrium story that further makes claims about “build density and get cheap homes” less plausible. 7. My Final Thoughts + Poll Thanks to everyone who commented on this post and helped me refine my thoughts. I’m willing to concede the following points: It might be that only attracting the sort of educated people who found companies, universities, etc will make housing prices go up. Less educated people will take more jobs than they create and not ratchet up the city’s desirability level. (I’d previously told commenters talking about “gentrification” that it was irrelevant to the mechanism I was talking about here, but maybe it isn’t - maybe “gentrifiers” are the people creating more jobs and institutions than they consume, and so homes that attract them in particular will increase demand more than they increase supply? Maybe this discussion does reduce to the gentrification discussion?)

Inline links: this list of real estate prices across Chinese cities, Paul Botts, https://www.researchgate.net/publication/345092218_Housing_Vacancy_Rate_in_Major_Cities_in_China_Perspectives_from_Nighttime_Light_Data, Tang Poetry, writes, ddd pointed out, Mike, Maximum Limelihood Estimator, gets more on point, http://econfac.bsu.edu/research/workingpapers/bsuecwp200804gisser.pdf, writes, writes:, far higher in Austin, https://substackcdn.com/image/fetch/$s_!tAF8!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F03f2b338-da84-4d85-b71c-0ce2e02e10e1_685x559.png, https://substackcdn.com/image/fetch/$s_!mLwn!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9cf942da-5716-49e8-a177-20140681e7fc_573x421.png, Center for New Liberalism, the Neoliberal Podcast, Jeremiah “Liver-Eating” Johnson, Johnson helped make famous, https://substackcdn.com/image/fetch/$s_!tg5t!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc490a60a-3e97-4b73-9806-79bb967b5172_608x550.png, Sea Ranch, some other commenters, Fresh Economic Thinking, wrote

Houston pretty much describes the “Oakland with more housing” outcome that Alexander views as somewhat far-fetched. Only in this case, it’s Austin with more housing. Alexander seems too quick to accept the, “If you build it they will come” idea—that you can build more housing and thereby boost demand so much that prices actually rise. I started the post with a graph of about 50 cities, showing a positive correlation between density and price. I’m having trouble seeing how Sumner’s point isn’t just “if you remove 48 of those cities and cherry-pick two, the relationship is negative”. My attempt to place Austin and Houston on the original graph, using Sumner’s data plus a few other things available online. Why weren’t they on there already? Maybe because the graph is metro areas and Sumner was talking about Austin and Houston as cities, but I’m not sure and agree this is confusing. Everyone knows Austin is more expensive than Houston because Austin is a trendy tech and culture hub and Houston isn’t (and relatedly, because Austin’s median family income is 50% higher than Houston’s). Unless someone wants to claim that its failure to build housing helped turn it into a trendy tech and culture hub, I don’t think there’s much point to this comparison. It’s true that Houston’s bigger size didn’t let it leapfrog over Austin to become a trendy tech and culture hub, which goes against some of what I claimed in the first part of this post. But I never claimed there would be a perfect 1-1 correlation between city size and trendiness, or that you could never find a pair of cities where one was bigger but the other was more trendy. Just that there would be a correlation. Moving on: Here’s the problem with this argument. It mixes up population change due to economic effects such as the benefits of agglomeration, with population changes due to regulatory changes such as less strict zoning. If you look at things this way, then the stylized facts work against Alexander’s argument. Over the past 50 years, increasingly strict zoning has reduced housing construction on big cities like New York and San Francisco. As a result, their populations have increased by less than in cities with less strict zoning, such as Houston. If Alexander were correct, then the price gap between the tightly controlled cities on the coast and the more laissez-faire cities of Middle America should have shrunk over time. Instead, the price gap has widened. New York and San Francisco were always more expensive than other cites, but with tighter zoning and less new construction the gap has become far wider. During the last fifty years, there was also deindustrialization and demographic sorting. This is just the Austin vs. Houston story all over again. Alexander is implicitly viewing this outcome as a “problem” for the city that builds more housing. They must sacrifice so that the rest of the country can gain. But in his scenario, Oakland is better off. Indeed if it were not better off, then why would more people choose to live in Oakland? In order for it to be true that building more housing boosts housing prices, it must also be true that the quality of existing houses (including neighborhood effects) rises by more than enough to offset the increase in supply. That means the new housing construction must make Oakland such a desirable place to live that the amenity effect overwhelms the quantity effect [...] Of course, economic change always has winners and losers. Here’s how I would describe the impact of allowing more housing construction in Oakland, in the unlikely event that this did raise housing prices: 1. America would benefit. 2. Oakland would benefit. 3. Poor people in America would benefit, in aggregate. 4. Affluent people in America would benefit, in aggregate. 5. Homeowners in Oakland would benefit. 6. Some renters in Oakland would benefit (from a more economically dynamic city.) 7. Some renters in Oakland would suffer from higher rents. In the much more likely case where new housing construction would lower prices, the impact described in #5 and #7 might reverse. Either way, there is no defensible argument for not building more housing in Oakland, regardless of the impact on price. If building more housing reduces its price, then there is a strong argument for allowing more housing construction. If building more housing raises its price, then the argument for more construction is even stronger. I agree with all this. Jeremiah Johnson is a co-founder of the Center for New Liberalism, host of the Neoliberal Podcast, and a YIMBY activist (not to be confused with Jeremiah “Liver-Eating” Johnson, who killed 300 Native Americans and ate their livers). He writes: Here's why you're wrong in a single sentence: Demand causes high prices, not new units. Prices are high in SF and NYC because those are desirable places to live for a huge number of people. People all over the country and the world would live there if they could, and prices reflect that. The fact that the densest cities are the most expensive is true. But the high prices are not caused by density - rather, the density and the high prices are both a consequence of crushingly high demand […] There's a feedback loop, but what matters here is the elasticity, which is less than one. We can measure this empirically. New housing lowers prices via the mechanism of adding supply, which is basic economics and how we expect markets to work. New housing could raise prices if it also made the city a more desirable place to live and shifted people's preferences, such that there was more demand to live there after the new housing is built. If you think it's unclear which of these effects would dominate, luckily we have empirical data that over and over and over shows adding housing supply does indeed lower prices on a local level. This is a fairly well established result that replicates well. edit: I'm actually thinking about drawing out the weighted DAG graphs here to make the conceptual stuff easier, but it would be pretty long. I'd love to do this as a guest post. I’m skeptical of the empirical results because they don’t match the much stronger “Manhattan vs. Conanicut island” empirical results, and if I try to think about why, the best explanation I can think of is that the Manhattan experiment has been going on longer (ie long enough for Manhattan’s extra residents to found businesses and institutions that attract new people). I’ve told him he can try pitching this guest post to me; in either case, I would be interested in seeing the graphs. Several other people also posted this graph that Johnson helped make famous: Hopefully by now you can predict my objection: the places in the southeast corner are mostly unfashionable red state Sun Belt cities; the places in the northwest corner are mostly trendy liberal coastal cities. My conclusion is that trendy liberal coastal cities are both more NIMBY and more desirable, and if you use this to draw any conclusions about housing policy you’ll just end up confused. But maybe I should take this same lesson to heart myself. Dense cities are mostly trendy liberal coastal cities; uninhabited tundra in North Dakota isn’t. Maybe the demand is just for trendy liberal coastal cities, and once you attain that status, extra density doesn’t matter that much. Maybe Oakland has already maxed out its “trendy liberal coastal city” status, and even if it became Manhattan-sized, it wouldn’t get any trendier, or would get trendier only with a long time lag. There are a few very trendy small coastal villages in California (think eg Sea Ranch); maybe these (rather than North Dakota) are the natural control group for San Francisco. I think they are still cheaper than SF, but maybe not by very much. Cameron Murray is a housing economist whose work some other commenters recommended; he also writes the blog Fresh Economic Thinking. He very kindly showed up and wrote: I think you are in general right that agglomeration effects are real, which is why bigger cities have higher value to residents. I agree that people move locations. But I think you can go a step further. If one city is growing faster and densifying, surely those people are not demanding homes in other cities and those cities build slower. This is part of the spatial equilibrium story that further makes claims about “build density and get cheap homes” less plausible. 7. My Final Thoughts + Poll Thanks to everyone who commented on this post and helped me refine my thoughts. I’m willing to concede the following points: It might be that only attracting the sort of educated people who found companies, universities, etc will make housing prices go up. Less educated people will take more jobs than they create and not ratchet up the city’s desirability level. (I’d previously told commenters talking about “gentrification” that it was irrelevant to the mechanism I was talking about here, but maybe it isn’t - maybe “gentrifiers” are the people creating more jobs and institutions than they consume, and so homes that attract them in particular will increase demand more than they increase supply? Maybe this discussion does reduce to the gentrification discussion?)

Inline links: https://substackcdn.com/image/fetch/$s_!mLwn!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9cf942da-5716-49e8-a177-20140681e7fc_573x421.png, Center for New Liberalism, the Neoliberal Podcast, Jeremiah “Liver-Eating” Johnson, Johnson helped make famous, https://substackcdn.com/image/fetch/$s_!tg5t!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc490a60a-3e97-4b73-9806-79bb967b5172_608x550.png, Sea Ranch, some other commenters, Fresh Economic Thinking, wrote

My attempt to place Austin and Houston on the original graph, using Sumner’s data plus a few other things available online. Why weren’t they on there already? Maybe because the graph is metro areas and Sumner was talking about Austin and Houston as cities, but I’m not sure and agree this is confusing. Everyone knows Austin is more expensive than Houston because Austin is a trendy tech and culture hub and Houston isn’t (and relatedly, because Austin’s median family income is 50% higher than Houston’s). Unless someone wants to claim that its failure to build housing helped turn it into a trendy tech and culture hub, I don’t think there’s much point to this comparison. It’s true that Houston’s bigger size didn’t let it leapfrog over Austin to become a trendy tech and culture hub, which goes against some of what I claimed in the first part of this post. But I never claimed there would be a perfect 1-1 correlation between city size and trendiness, or that you could never find a pair of cities where one was bigger but the other was more trendy. Just that there would be a correlation. Moving on: Here’s the problem with this argument. It mixes up population change due to economic effects such as the benefits of agglomeration, with population changes due to regulatory changes such as less strict zoning. If you look at things this way, then the stylized facts work against Alexander’s argument. Over the past 50 years, increasingly strict zoning has reduced housing construction on big cities like New York and San Francisco. As a result, their populations have increased by less than in cities with less strict zoning, such as Houston. If Alexander were correct, then the price gap between the tightly controlled cities on the coast and the more laissez-faire cities of Middle America should have shrunk over time. Instead, the price gap has widened. New York and San Francisco were always more expensive than other cites, but with tighter zoning and less new construction the gap has become far wider. During the last fifty years, there was also deindustrialization and demographic sorting. This is just the Austin vs. Houston story all over again. Alexander is implicitly viewing this outcome as a “problem” for the city that builds more housing. They must sacrifice so that the rest of the country can gain. But in his scenario, Oakland is better off. Indeed if it were not better off, then why would more people choose to live in Oakland? In order for it to be true that building more housing boosts housing prices, it must also be true that the quality of existing houses (including neighborhood effects) rises by more than enough to offset the increase in supply. That means the new housing construction must make Oakland such a desirable place to live that the amenity effect overwhelms the quantity effect [...] Of course, economic change always has winners and losers. Here’s how I would describe the impact of allowing more housing construction in Oakland, in the unlikely event that this did raise housing prices: 1. America would benefit. 2. Oakland would benefit. 3. Poor people in America would benefit, in aggregate. 4. Affluent people in America would benefit, in aggregate. 5. Homeowners in Oakland would benefit. 6. Some renters in Oakland would benefit (from a more economically dynamic city.) 7. Some renters in Oakland would suffer from higher rents. In the much more likely case where new housing construction would lower prices, the impact described in #5 and #7 might reverse. Either way, there is no defensible argument for not building more housing in Oakland, regardless of the impact on price. If building more housing reduces its price, then there is a strong argument for allowing more housing construction. If building more housing raises its price, then the argument for more construction is even stronger. I agree with all this. Jeremiah Johnson is a co-founder of the Center for New Liberalism, host of the Neoliberal Podcast, and a YIMBY activist (not to be confused with Jeremiah “Liver-Eating” Johnson, who killed 300 Native Americans and ate their livers). He writes: Here's why you're wrong in a single sentence: Demand causes high prices, not new units. Prices are high in SF and NYC because those are desirable places to live for a huge number of people. People all over the country and the world would live there if they could, and prices reflect that. The fact that the densest cities are the most expensive is true. But the high prices are not caused by density - rather, the density and the high prices are both a consequence of crushingly high demand […] There's a feedback loop, but what matters here is the elasticity, which is less than one. We can measure this empirically. New housing lowers prices via the mechanism of adding supply, which is basic economics and how we expect markets to work. New housing could raise prices if it also made the city a more desirable place to live and shifted people's preferences, such that there was more demand to live there after the new housing is built. If you think it's unclear which of these effects would dominate, luckily we have empirical data that over and over and over shows adding housing supply does indeed lower prices on a local level. This is a fairly well established result that replicates well. edit: I'm actually thinking about drawing out the weighted DAG graphs here to make the conceptual stuff easier, but it would be pretty long. I'd love to do this as a guest post. I’m skeptical of the empirical results because they don’t match the much stronger “Manhattan vs. Conanicut island” empirical results, and if I try to think about why, the best explanation I can think of is that the Manhattan experiment has been going on longer (ie long enough for Manhattan’s extra residents to found businesses and institutions that attract new people). I’ve told him he can try pitching this guest post to me; in either case, I would be interested in seeing the graphs. Several other people also posted this graph that Johnson helped make famous: Hopefully by now you can predict my objection: the places in the southeast corner are mostly unfashionable red state Sun Belt cities; the places in the northwest corner are mostly trendy liberal coastal cities. My conclusion is that trendy liberal coastal cities are both more NIMBY and more desirable, and if you use this to draw any conclusions about housing policy you’ll just end up confused. But maybe I should take this same lesson to heart myself. Dense cities are mostly trendy liberal coastal cities; uninhabited tundra in North Dakota isn’t. Maybe the demand is just for trendy liberal coastal cities, and once you attain that status, extra density doesn’t matter that much. Maybe Oakland has already maxed out its “trendy liberal coastal city” status, and even if it became Manhattan-sized, it wouldn’t get any trendier, or would get trendier only with a long time lag. There are a few very trendy small coastal villages in California (think eg Sea Ranch); maybe these (rather than North Dakota) are the natural control group for San Francisco. I think they are still cheaper than SF, but maybe not by very much. Cameron Murray is a housing economist whose work some other commenters recommended; he also writes the blog Fresh Economic Thinking. He very kindly showed up and wrote: I think you are in general right that agglomeration effects are real, which is why bigger cities have higher value to residents. I agree that people move locations. But I think you can go a step further. If one city is growing faster and densifying, surely those people are not demanding homes in other cities and those cities build slower. This is part of the spatial equilibrium story that further makes claims about “build density and get cheap homes” less plausible. 7. My Final Thoughts + Poll Thanks to everyone who commented on this post and helped me refine my thoughts. I’m willing to concede the following points: It might be that only attracting the sort of educated people who found companies, universities, etc will make housing prices go up. Less educated people will take more jobs than they create and not ratchet up the city’s desirability level. (I’d previously told commenters talking about “gentrification” that it was irrelevant to the mechanism I was talking about here, but maybe it isn’t - maybe “gentrifiers” are the people creating more jobs and institutions than they consume, and so homes that attract them in particular will increase demand more than they increase supply? Maybe this discussion does reduce to the gentrification discussion?)

Inline links: Center for New Liberalism, the Neoliberal Podcast, Jeremiah “Liver-Eating” Johnson, Johnson helped make famous, https://substackcdn.com/image/fetch/$s_!tg5t!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc490a60a-3e97-4b73-9806-79bb967b5172_608x550.png, Sea Ranch, some other commenters, Fresh Economic Thinking, wrote

Spring Meetups Everywhere 2024

March 30, 2024 · Original source

HOUSTON, TEXAS, USA Contact: Joe Brenton Contact Info: joe[dot]brenton[at]yahoo[dot]com Time: Sunday, May 19th, 1:00 PM Location: 711 Milby St, Houston, TX 77023 inside the IRONWORKS through the big orange door, look for the ACX MEETUP sign at the entrance Coordinates: https://plus.codes/76X6PMV6+V6 Group Link: https://discord.gg/DzmEPAscpS Notes: Please RSVP on LessWrong. Food and drinks will be provided from Second Slice Sandwich Sandwich Shop.

Inline links: https://plus.codes/76X6PMV6+V6, https://discord.gg/DzmEPAscpS

Open Thread 329

May 13, 2024 · Original source

1: More meetups this week, including Athens, Chicago, Brooklyn, Grass Valley, and Houston. See the meetups post for more info.

Inline links: the meetups post

Meetups Everywhere 2024: Times & Places

August 29, 2024 · Original source

Contact: Ethan Contact Info: ethan[dot]morse97[at]gmail[do t]com Time: Sunday, October 13th, 02:00 PM Location: 11700 Preston Rd Suite 714, Dallas, TX 75230. We'll be in the Whole Foods' upstairs seating area closest to the windows. Coordinates: https://plus.codes/8645W55W+2J HOUSTON, TEXAS, USA Contact: H. B. Contact Info: Valerolactone[at]gmail[dot]com Time: Sunday, October 13th, 03:00 PM Location: Hermann Park Coordinates: https://plus.codes/76X6PJC6+37 Group Link: https://discord.gg/DzmEPAscpS

Inline links: https://plus.codes/8645W55W+2J, https://plus.codes/76X6PJC6+37, https://discord.gg/DzmEPAscpS

Meetups Everywhere Spring 2025: Times & Places

March 25, 2025 · Original source

Contact: Joe Brenton Contact Info: joe[period]brenton[a t]yahoo[period]com Time: Sunday, May 04th, 01:00 PM Location: Retrospect Coffee Bar 3709 La Branch St, Houston, TX 77004. We'll be in the back covered patio area with picnic tables. Coordinates: https://plus.codes/76X6PJPF+4R Group Link: https://discord.gg/Dzm [remove this bit] EPAscpS

Inline links: https://plus.codes/76X6PJPF+4R

Contact: Ethan Contact Info: ethan[period]morse97[a t]gmail[period]com Time: Sunday, April 27th, 02:00 PM Location: Whole Foods, 11700 Preston Rd Suite 714, Dallas, TX 75230. We'll be in the upstairs seating area closest to the windows. I will be wearing a name tag that says "Ethan" on it. Coordinates: https://plus.codes/8645W55W+2P Group Link: https://www.lesswrong.com/groups/SdwuhENYWpA4BTrZT HOUSTON Contact: Joe Brenton Contact Info: joe[period]brenton[a t]yahoo[period]com Time: Sunday, May 04th, 01:00 PM Location: Retrospect Coffee Bar 3709 La Branch St, Houston, TX 77004. We'll be in the back covered patio area with picnic tables. Coordinates: https://plus.codes/76X6PJPF+4R Group Link: https://discord.gg/Dzm [remove this bit] EPAscpS

Inline links: https://plus.codes/8645W55W+2P, https://plus.codes/76X6PJPF+4R

Your Review: Ollantay

August 22, 2025 · Original source

And in 1992, Ronald Ray Howard was pulled over outside of Houston while listening to “Soulja’s Story”, a song with these lyrics:

Inline links: Ronald Ray Howard

Meetups Everywhere 2025: Times and Places

August 29, 2025 · Original source

Contact: Joe Brenton Contact Info: joe[period]brenton[a t]yahoo[period]com Time: Sunday, October 19th, 1:00 PM Location: Retrospect Coffee Bar 3709 La Branch St, Houston, TX 77004. We'll be in the back covered patio area with picnic tables. Coordinates: https://plus.codes/76X6PJPF+4R Group Link: https://discord.gg/Dzm [remove this bit] EPAscpS

Inline links: https://plus.codes/76X6PJPF+4R

Contact: Ethan Contact Info: ethan[period]morse97[a t]gmail[period]com Time: Saturday, October 4th, 2:00 PM Location: Whole Foods Market, 11700 Preston Rd Suite 714, Dallas, TX 75230. We'll be in the upstairs seating area closest to the windows. Coordinates: https://plus.codes/8645W55W+2M HOUSTON Contact: Joe Brenton Contact Info: joe[period]brenton[a t]yahoo[period]com Time: Sunday, October 19th, 1:00 PM Location: Retrospect Coffee Bar 3709 La Branch St, Houston, TX 77004. We'll be in the back covered patio area with picnic tables. Coordinates: https://plus.codes/76X6PJPF+4R Group Link: https://discord.gg/Dzm [remove this bit] EPAscpS

Inline links: https://plus.codes/8645W55W+2M, https://plus.codes/76X6PJPF+4R

Open Thread 403

October 13, 2025 · Original source

1: Meetups this week include Auckland, Hamburg, Houston, Lviv, Oxford, and Warsaw - see the meetup post for more information.

Inline links: the meetup post

Meetups Everywhere Spring 2026: Times & Places

April 01, 2026 · Original source

Contact: Ethan Morse Contact Info: ethan[.]morse97[@]gmail[.]com Time: Saturday, April 25th, 2:00 PM Location: Whole Foods at 11700 Preston Rd Suite 714, Dallas, TX 75230. We’ll be upstairs closest to the windows and outdoor seating area. Coordinates: https://plus.codes/8645W55W+2JV HOUSTON Contact: Nathaniel Contact Info: nathanielrouth[@]gmail[.]com Time: Sunday, April 26th, 12:00 PM Location: Miller Meadow of Hermann Park. We’ll have a picnic blanket and an “ACX Meetups Everywhere” sign. Coordinates: https://plus.codes/76X6PJC6+42 Group Link: https://discord.gg/cb7 [remove this bit] K3Q6hKP Notes: If driving, you can park for free in Hermann Park Lot C, or pay to park in the garage at the Museum of Natural Science or Museum of Fine Arts. Check Discord or LessWrong in the event of inclement weather.

Inline links: https://plus.codes/8645W55W+2JV, https://plus.codes/76X6PJC6+42

Astral Codex Ten

Table of Contents

Atlas

Houston

Houston

Article

Metadata

Appears In

External Links

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Astral Codex Ten

Table of Contents

Atlas

Houston

Houston

Article

Metadata

Appears In

Related Pages

External Links

Source Context

Backlinks