Where he says "that 5-acre plot had been zoned for ONE house"

People used to live next to cemeteries and drink well water.

Yes, they also got very sick from doing this.

How were any houses originally built?

Well, sometimes they were just built.

It's a good thing we've learned a few things since then. Not that city planning is perfect. Far from it. But it certainly does serve a purpose.

Used to be that an acre of land generally had enough space for a proper septic tank and drain field. But I think in some places it is a little higher now. Depends a lot on local geography of course.

It depends on the area. In Michigan, for example, the area here is mostly swampland, houses with no infrastructure have to build their own. Usually that means running new power lines, and figuring out well water and septic. Septic is trickier than it seems, you need to have enough space for a leech field large enough to drain properly, it needs to flow properly (away from your home, away from your own well) and soil absorption has to be high enough (and the water line low enough) to handle it all. Having a lot of land isn't enough on it's own, it has to have enough natural drainage to be able to handle itself and anything you need to seep into it.

For example, you might have an acre of land, but if too much of the soil underneath is clay, or if the water table is too high, the wastewater might not drain fast enough, so it sits and stagnates or mixes with freshwater, despite having "lots of land". You generally need a surveyor to produce and sign off on a Topographical Survey to assess that.

So yeah, "there were no sewers once upon a time", sure. But if you try to build suburban-like densities out here without a solid plan signed off, you are likely to end up piping your own sewage right into your own water taps.

https://www.miottawa.org/Health/OCHD/pdf/AboutSewage.pdf

Strange, and frustrating sounding - 1a each is plenty to leave the resulting plots as conformant single family housing.

> I feel like one partial solution for NIMBY brain is travelling to cities in other countries and seeing things are different and realizing that it's actually totally fine.

I'd be surprised. Plenty of people would be horrified at the idea of living in a detached home next to a skyscraper.

> But then there is a corresponding increase in property tax revenues to pay for it, so this should require no approval and just be something that happens. The city pays for the new infrastructure from the taxes paid by the new people using it.

This is a conjecture that as far as I know does not match what actually happens, which is that the new infrastructure is paid by debt, and the 4 new taxpayers will not have paid off the debt before the infrastructure needs replacement, paid for by more debt.

If it was 600 new units rather than 4, maybe it works out that the corresponding taxes pay for the infrastructure, but property taxes just aren't high enough, and the people who live in these boondoggle houses aren't wealthy enough to pay the taxes for the infrastructure their houses need

So the city has to build a new $50 million dollar sewage treatment plant in the hopes of getting that paid back over 50 years of property taxes, and gets no say in the matter or the cities budget? Sewage treatment plants have finite capacity, can't be built on a 'serves 20 units' incremental scale, and oftentimes new plants have much stricter requirements than grandfathered in one. Not everywhere is the bay area where they can scale up by just piping it out a few miles into the ocean and call it good.

> by taxing / fining people for having a second home.

I don't see the issue with this? The profits in Canadian real estate are not on the back of some new found resource. It's entirely an effective wealth redistribution from have-nots to haves.

If you have property, the vast amount of value in it is strictly from the fact that it is artificially scarce. To get into the "haves" you have to pay an artificial tax in the form of a grossly inflated price.

What is your opinion on the recent SCOTUS decisions declaring that forcing developers to pay for community improvements qualifies as a taking? Do you see this having a material effect on housing development?

But how are you proposing to distinguish them? It's all too easy to rent out a property on paper.

> Take a look at the first figure (HM1.1.1) in the following document - particularly those for the US, Canada, Australia, and NZ (all countries with prominent housing issues).

These are country-wide numbers. The obvious problem is that there is existing housing in Detroit but demand for housing in San Francisco.

It's also somewhat self-defining. If millennials are forced to live with their parents because they can't afford their own home then this is counted as one "household" when there is demand for two.

> On the other hand, I think there is a strong argument to be made for increasing underutilisation of housing (more second homes, short term rentals, etc).

There isn't anything inherently wrong with short-term rentals or second homes, they're just another type of housing demand that requires supply to increase to compensate. Until it isn't allowed to.

Tbh, I think you nailed it. Policy largely drives the system in a law avoiding society.

This is the ruling, thanks.

You do realize that if someone can avoid the tax by renting it out then they'll just rent it out to a friend for a nominal amount to avoid the tax?

If people (corporations) can't own infinity homes, the price of owning a home goes down.

I thought the tax on "second homes" was a tax on landlording and speculation, not a tax on vacation homes. I think we might just be talking past each other here.

Your assumption here is that the number of homes is fixed and that there are otherwise enough for everybody.

Only ~5% of homes are second homes, not 33% as in your example.

Now suppose there are 25 homes and 30 families, better reflecting current reality. If you can't make more you're screwed. But you can create new housing. Zoning makes this expensive, because zoning requires it to be done in an expensive way. You have to destroy a large building to build an even larger one because multi-unit buildings aren't allowed where there are currently single-family homes. But you can do it. It just costs $600,000/unit as a result.

Since there are more families than existing homes, everybody bids up the price of housing units because they don't want to be homeless. When the prices hit $600,000/unit, construction companies build more units because now it's finally profitable. Then all the units stay that expensive because there are only just enough -- or not enough, but the remaining people don't have $600,000. But they don't go higher than that because that's the price at which more can be created under existing zoning rules.

If Richie Rich comes along and buys two second homes, that doesn't raise the long-term price, because the price is right at the threshold of profitability for new construction. So two new units get built at that price and the market price stays where it is -- at the cost of creating more units. If you want units to cost less, that cost has to go down, because units can't be added for less than that and eliminating 100% of second homes is not enough of a reduction in demand to shift from that being the price-setting factor.

Whereas if you could build new units for $200,000 then Richie Rich could buy a hundred of them and they'd still cost $200,000 because construction companies would just build a hundred more.

> If landlords become unwilling to pay for new construction, that reduces the demand for new housing supply hitting the market. Which reduces its price and makes it more affordable to owner-occupants.

Construction occurs until the point that it stops being profitable, which is a price point more than a number of units. Zoning rules make it so you have to buy a 5-story building, then knock it down and pay the cost to build a 10-story building in order to add 5-stories worth of units. That's much more expensive than putting a 5-story building where there is currently a single-family home or an empty lot, which is prohibited. So if landlords stop being willing to pay for that, it doesn't cost less, it just happens less, because at any lower price the construction doesn't happen.

Which is how rents increase. Suppose 100 new units would have been built and landlords would have bought half. They stop buying, so construction companies only build 50 new units because there are only 50 buyers at a profitable price. Then demand for rental properties increases over time but supply of rental units doesn't, so rents go up. Then the landlords start commissioning new units again, because rents have increased enough to make it profitable again, but only for as long as they stay that high. The price of the building stays the same -- it's set by the construction cost -- but the rents go up because the landlord has to recover the cost of the building and the tax, or they're not commissioning a new building.

> Tax what you want less of, right?

The trouble is you don't really want fewer rental units, unless you like high rents. What you want is maybe more owner-occupied units, but this is only a trade off when supply is artificially constrained -- otherwise you can build more of both, which is obviously better.

Whereas building fewer rental units without building any more owner-occupied units is quite useless.