These are the macro effects of housing. I buy all of them. I'm a housing activist involved in local politics in Oak Park, IL (one of Chicago's two equivalents of Berkeley or Brooklyn, the suburb of Evanston being the other). Some micro/local impacts of housing restriction:
* Retail business stagnation; retail is dependent on foot traffic, and SFZ residents do not understand what it takes to support the kinds of businesses (yoga studies, coffee shops, art galleries, bookshops) that they actually want to see sited near them. The result is that city plans for commercial corridors create near-blighted streets with gas stations, vacant lots, and the occasional nail salon or Domino's Pizza.
* Public safety issues; those same underutilized commercial drags are dead once the sun goes down; without people walking on the streets, nobody's watching, and you can see on a map clearly where crime gravitates.
* Escalating property taxes; lots of people want to retire in the same community they spent their adult lives in, but in an overwhelmingly SFZ muni with good schools, the top bidder on any residential lot is a family with school-aged children. Schools make up over half (in our case, 2/3) of the property tax burden, and it gets worse as the demographics shift more and more to school-aged families who move out when their kids graduate high school; housing diversity could give retirees an economically rational place to move (and remain in the tax base), but we outlaw it.
The problem with all this stuff is you start to sound like a crank, because almost every problem a typical urban muni faces will probably stem from many generations of outlawing housing.
I live in a very similar neighborhood with exactly the same problems (DC railroad suburb) and completely agree with your assessment.
Your observation that you start to sound like a crank really rings true, and it’s exacerbated by the stark generational gap where every interaction is painted as an attack on long-time residents, especially ones who don’t want to recognize that, say, taxes need to go up because infrastructure costs more to maintain or that traffic is worse because they, a retiree sitting on a $2M house, haven’t been able to downsize into an apartment and so the people who actually need to commute to work have to drive from a further out suburb and transit isn’t an option because guess who reliably votes against it? We had a positively surreal debate when the “preservationists” demanded that an apartment building literally next to a metro station have a huge parking garage even though the developer thought it was overkill. That made fewer, more expensive units and then they ended up renting out unused parking spaces as storage units because the people who choose to live next to transit are often trying not to pay for a car. Actuarially, most of the people who showed up at those meetings are probably dead by now but their decisions will still be visible in 2050.
It is a very typical problem in the US, but it's not really the only issue. Go look at Spain, a country that has, historically, had little issue building housing: Very dense housing too by most standards.
After you liberalize housing, you still run into the trouble of economic forces trying to turn housing into a sensible investment: Buy an apartment, pay your mortgage for 20 years, and then you have a pile of leveraged money on top of the basic savings! But then you run into current housing in Spain: Said primary housing has huge tax savings over anything else. Taxes at sale time overwhelm property taxes (which are very good, yet seen as unfair by owners, so they stay low), so it's also better to keep the housing underused. So ultimately you end up with a situation where the building that before had an average of 5 or 6 occupants per flat in the 1980s, is now sitting at one and a half. So you end up having to massively overbuild, as to make sure nobody that bought in a good location does anything but make money on their "investment"
The US could build more, thanks to so many inner suburbs that should really be filled to the brim and 8 stories tall, but ultimately it's just kicking the can down the road until residential investment is not so important, and the price of housing lines up with its utility, not the ever-growing value of the land it sits on top of.
The Georgists that want to just LVT as the one tax in the world are going too far, but I don't see long term solutions to all the problems downstream from housing if, along of making it easy to build, we don't make sure that speculating on the value of the land is actually risky.
It sounds like both Spain and the US have tax systems that cause it to be expensive to sell a house and buy a less expensive house.
In the US, this takes the form of a nonsensical capital gains tax system: personal residences are not eligible for 1031 exchanges, so taxes on gains are due immediately, those taxes are not indexed to inflation, the exemption is too small to make much difference in any high-property-value area, and the basis step-up at death strongly incentivizes children to encourage their parents to keep their house until they die. California puts icing on the cake with Prop 13, so you can trade for a cheaper house and your property taxes increase. At least some recent changes in CA take baby steps toward improving this.
Note: I’m summarizing a very complex topic as best I can. There is a lot of nuance and thought that goes into a properly implemented land value tax (LVT) that I’m not covering here.
The reason for the LVT is because land doesn’t otherwise follow market dynamics.
In a functioning market you have pressures to sell things. If you can sell something at a reasonably high enough profit margin there is every incentive to do so. There is no benefit to waiting or holding if the price is right. This also encourages competitors who may try to sell a superior version of a widget at the same price or lower, and thus we have basic functioning market dynamics that help achieve relative price stability. It also achieves maximal utility for said market
Real estate however doesn’t work this way. Once someone owns a plot of land there is no incentive to sell. We can’t simply make more, and the things that make said land more or less valuable aren’t inherent to the land but rather where it is located and/or what’s on top of said land.
An LVT is a way to introduce a functioning market dynamic on land. It puts pressure either selling the land or utilizing it maximally. It becomes more expensive over time to hold land that is under utilized. This forces land owners into a set of choices: hold as is but pay an inevitably increasing tax on the holdings, sell part of the land to reduce the holdings, or further develop the land to offset the cost.
Without this function, there is no functioning marketplace for land. Once you own it you can largely hold it forever, without any regard to the actualized value of the land. So for example, a 4 acre lot sitting on “prime” (lack of a better term) real estate with only 1 suburban style house has zero incentive to become maximally utilized even though its value has increased exponentially relative to its utilization.
A LVT is one (and full disclosure I’m a big fan of the land value tax) such proposal to that problem
> property taxes (which are very good, yet seen as unfair by owners, so they stay low)
Property taxes aren't actually good. Consider the economics of new construction: If the net present cost of building new housing is less than its net present value, it gets built.
Net present value is the value of future rents (or rents avoided if you live in it yourself) minus future costs, each discounted by the time value of money. Property tax is a future cost, so it reduces net present value, so you get less construction until rents increase to cover the cost of the property tax.
If you don't like high rents, you don't like property tax.
> Taxes at sale time
This too is a problem if you want people to downsize once they no longer need a piece of property, but e.g. raising the exemption amount so that approximately nobody is paying this tax would then not cost a lot in terms of revenue because as it is the problem is that people are already avoiding the tax by not selling.
If you tax something you get less of it. It's not different when you tax housing.
We stayed with friends outside Madrid who owned a home. They had bought it officially for 400,000 Euros.
They also paid a similar amount "on the black", meaning that they had to pay the sellers in cash so the sellers would only pay tax on the official amount.
This was 15 years ago. It seems hard to imagine something like this happening in the US with the Know Your Customer and Anti-Money Laundering laws but maybe it does. And it might not happen in Spain anymore.
Spain (since it's in Europe, though you could say the same about ME countries) is an example that housing does not drive growth. Growth can drive housing and housing shortages can hamper growth but housing on its own does not drive growth.
Like all these things even in a market like Spain thn solution for one area can create issues in others. Barcelona suffers very different problems to Santander.
I think it would actually make it easier if I could just pay 100K tax to have permission to erect any new 2 bed house anywhere in the country. There can even be a price list linked to local salleries or something.
I don't think slapping a Georgist LVT will magically solve everything, but it will point market forces towards a desirable path, which is already a huge huge help compared to the state of things now.
If taxes at sales time (capital gains on real estate) are keeping people from selling houses, why not eliminate those taxes to free up the frozen housing market?
> After you liberalize housing, you still run into the trouble of economic forces trying to turn housing into a sensible investment.
Karl Marx made this crystal clear 150 years ago. You have to socialize housing, not "liberalize" it, whatever that means. And the Georgist solution will face a similar problem - the political one. The rich will always undermine mere tax law. You have to get rid of the rich, plain and simple.
Even worse, our housing policy is corrosive to the fundamental social contract. When I was young, I was taught that if you worked hard and kept your head down, you could have a comfortable life. You may not be Bill Gates, but you could have a successful middle class existence.
Our housing policies have broken this social contract. Many younger people cannot afford to live in high opportunity but high priced cities. Those that can, often only do so because of help from family. [1]
NIMBYs dominate both sides of the political spectrum, especially among older people. It will take younger people getting involved in the YIMBY movement to effect change.
I think YIMBYs really like to cast NIMBYs as their evil adversaries, but the problem is systemic. Any policy change, be it "what can be built on this lot", or "what social services do we fund", or, in particular for my muni, "how do we deal with leaf collection in Autumn" will generate three cohorts of people:
(i) People who don't like the change
(ii) People who don't care about the change (most people)
(iii) People who do like the change
People who don't like the change (i), regardless of the amplitude of their dislike, will turn out and give public comment and put up yard signs.
People who like the change (iii) will turn out and give public comment only if they are weirdos like me, with off-the-charts amplitude for their feelings.
The net result is that the only public opinion that is legible to staff and electeds is opposite. Again: regardless of what the change is.
Speak for yourself. I am 38, live in one of the top fastest growing cities in America for like 5 years running now (with a booming housing market), and own my own house outright as a result of my hard work.
Just because someone taught you something doesn't make it so. And even then, it might be true but your own choices (and failures) may be the reason you have not met your goals - rather than "housing policy".
Try on some personal accountability for size - it'll probably help you achieve those unachievable milestones you are yearning for, also.
>> I was taught that if you worked hard and kept your head down, you could have a comfortable life
I didn't even work that hard and I have a comfortable life. I learned to code, and that was it.
Your mileage may vary.
If you move to one of the most expensive cities in the world, one of the things you can do is complain that it is really expensive to live in one of the most expensive cities in the world.
You can do that. I don't recommend it, but it is one of the things that you can do.
The number of YIMBYs who own property is approximately zero. "Yes, I would prefer that you make my life worse", said no property owner ever.
I am a bad person. I want my life to be better, not worse.
This is maybe a bit tangential, but I live in a very walkable neighborhood (by US standards, anyway). But as commercial rents are rising (even faster than rent for housing) it's driven several small businesses out of our walkable core - a bookstore faced a 30% rent increase and couldn't make it work, a donut shop shut down for similar reasons, several other small businesses facing this. It kind of seems like commercial landlords saw that it was becoming more walkable because many high-density housing projects have come in over the last 7 years and they decided to gouge their tenants. Their tenants (small businesses) can no longer make the numbers pencil out with the high rent and shut down leaving empty storefronts - or large chains move in destroying the local character. And then there's less to walk to.
Business stagnation and crime are particularly bad for Oak Park and Evanston. For the walkable areas increased density seems worse for local businesses. It prices out the mom and pop shops. I suspect there's a happy median.
I too am in a western Chicago burb. All this tearing down of $400k houses and replacing them with hideous cookie cutter $1.8M new builds drives me crazy. They're 5-6 bed 5-6 bath. One in particular is a $500k to $2.5M flip. That's criminal.
There's another housing problem which maybe sounds ironic but I would argue that due to land costs, and tastes.. new housing in general is "too nice" compared to old housing. That is - the size, materials, appliances and finishes of housing have all got dramatically better in my 40~ year lifetime. No one builds utility housing anymore, its all aspirational.
So for example, my parents & in-laws live in SFHs worth like 300k built in 1970-1990 era. The problem is that anything of comparable size built in the same town or neighborhood since is now going for 800k (literally across the street even). There is no cash-out downgrade for them to move to a townhouse and put there underused homes on the market. They weren't building said townhouses 30-50 years ago, so all available ones are newer and thus .. too nice. Why would you move to a smaller place for same/more money which also has some monthly HOA/condo fees?
My first NYC apartment didn't even have a dishwasher or full sized fridge. I didn't have an in-unit washer/dryer until I was 35, and it was small/bad. Meanwhile it's interesting seeing the expectations of GenZ moving into apartments with their first job that are finished like the nicest apartment I ever lived in. Then they complain about cost? I can still find my old crappy apartment on street easy, and its rent is only up 50% in 20 years which given wages seems fine. Kids are moving to shiny finishes new rentals in Bed-Stuy for more money rather than enduring the indignity of living north of 96th street in a 2nd floor walk up.
Everything but size is an extremely marginal cost compared to construction labor, and size is determined by what local zoning will allow. That is, more often than not, nothing but single detached homes on large lots, which makes it pointless for a builder to not maximize size while they've already got labor on site.
This is an interesting point that I’ve seen play out as you described. It was the parents of an acquaintance of mine, and they did choose the downsize option because they were getting too old for the upkeep of a whole house and niceties it brings such as having the hotel like amenities of a doorman. Then there’s the point of choosing new vs. old stock, agreed there is a higher demand, thus it demands higher cost.
I mean, if there's restricted supply/excess demand then the ones at the margin moving the point where supply and demand cross will the ones willing to pay high prices.
It shouldn't surprise anyone who took econ 101 that new builds are appealing to the ones at the margin of buying or not buying, and that those people are way above the median income right now.
Everyone believes in the myth of "dark, dangerous alleways", but when you look at the crime distribution of almost any city, it's usually actually concentrated in the city centre. Which makes sense. Imagine you want to mug someone - would you stand in a place where you're alone and wait entire night for someone to pass by, or would you go in front of a bar, and wait ten minutes for someone who's too drunk to resist. I absolutely love walking around at night and I strongly prefer dark places without any people around me, and I feel much safer than when surrounded by people. Can't get robbed if there are no robbers around. Simple as that.
So far, I have had only one dangerous situation when being out in the city alone at night. There's a place I pass by where groups of people hang out - drinking, talking, listening to the music. Seemed like a lovely spot that lightened up the neighborhood, until one evening they decided to start shooting each other right when I was passing by.
BTW I really wish my city ran out of money for street lamps, because the fact that we need to keep everything lit 24/7 like a carnival is driving me crazy, and I can't wait to move to the countryside for this reason alone.
Henry George wrote about this a hundred years ago in Progress and Poverty! His solution: a tax on land (not buildings) to encourage building up. Economists say it's one of the most efficient taxes possible.
Thought experiment: if all habitable land on the planet is surveyed and transferred to private ownership, all subsequent generations that are born from that point on, will be doomed to rent-based servitude. Forgetting all political theory, it seems that planet-bound species with a positive population growth rate must not rely on socioeconomic systems that exclusively (or heavily) favour private ownership of land.
> Give me the private ownership of all the land, and will I move the earth? No; but I will do more. I will undertake to make slaves of all the human beings on the face of it.
If the land is taxed then you must find a renter willing to pay more than your tax, otherwise you would sell. Meanwhile renters will search for the lowest rent, which is naturally found in high density areas. So cities would still form, and the vast tracts of unoccupied land would be money-losing assets that must be abandoned, at least until population growth makes some of those plots profitable. The market would fluctuate with supply and demand, just as it does today.
Abolish land "ownership", and limit leases to 99 years. Existing ownership relations can be grandfathered in, but they will of course eventually disappear, in much the same way as how scientific revolutions eventually succeed: via the biological demise of the preceding hegemony.
I don't think we're projected to have positive population growth for much longer. Also what does rent based servitude even mean? I own a house but still have to pay taxes and upkeep. It's really not much different from rent. The tax supposedly goes to pay for services that the govt provides back to the people. If I were to pay rent instead, at least the service I receive in return is provided back to me specifically, and the cost of switching if I don't like the deal being offered is much lower.
Rent, healthcare, and the price of eggs are very popular things to complain about for some reason...
I thought of a slightly milder version of the tax, which I call a land wealth tax. Fix a certain maximum value of land owned by a single person which would not be taxed. In theory this might be some quantile, like the 80th percentile of land value owned per person. (I'm pretty sure you would still be taxing the majority of land using this threshold! At least at first.) Then everything owned above that is taxed by value. This avoids a rebellion of the most vulnerable and sympathetic homeowners. Of course land owned through opaque ownership structures must be assumed to be above the limit. Corporations with transparent ownership structures might see their land divided up (a likely intractable math problem if you included publicly traded companies) or some approximation applied, or the land simply taxed.
One advantage of taxing land wealth versus wealth in general (a la Piketty) is that land — "real" property — is much harder to hide in offshore corporate holdings than general wealth. It is all documented by necessity.
I have no expectation, unlike George, that taxes on land could fully satisfy the general fund. But they could certainly play a significant part. A significant difficulty with land value taxes in general is the assessment of land value, which is a difficult problem and has caused controversy in the past due to fluctuations and apparent inconsistencies. My preferred approach in the United States would be a Constitutional Amendment, which would allow centralizing the necessary expertise with the resources of the federal government.
I like your creativity here but there have been actual calculations done around this and carving out provisions for tax exemptions is not necessary.
Pragmatically speaking, a land value tax would be rolled out first by replacing property taxes with land value taxes, and the majority of people come out far ahead at this stage because people live on lots that have been developed. It is underdeveloped lots that are losers in this phase.
A true georgist would not stop here though, and they would slowly continue to ramp up land value taxes, but rather than replacing property taxes, they would start lowering other taxes on productive activities such as sales taxes or income taxes. But this would be a slow transition.
Additionally, you would include provisions during this phase where tax payments could be deferred until the sale of the property in order to protect individuals who happened to purchase a home that has dramatically increased in value. This prevents situations where an older person might be forced out of their home due to higher taxes. The goal here would be to transition over the long term and protect people who invested significant amounts into their property. The rates would stay relatively low for quite some time. Having lower rates also solves issues that you mention around accuracy of assessments. If you only tax up to 33% of the rental potential of a property, then you can be off by literally a factor of 3 in an assessment and the land will still be profitable to utilize.
Correct. Zoning code prevents building density and building codes force building crappy multi-family housing with tons of parking everywhere. Sprawl and car-dependency are bankrupting America.
Developers want to build because building will increase the value of property.
If the value of property is constantly increasing through development, how are you solving the affordability problem? The development is attracting and facilitating activity that drives more demand.
What dense city with a thriving commercial and business/industrial base is cheaper to live in than a less-developed rural small town?
The law is sometimes a large barrier, but there are plenty of places in the world with high housing costs which have minimal regulations.
The problem is the cost of land.
Developers are severely capital constrained. They take massive loans from Banks. Most of those loans go to paying for the land.
Additionally, a large portion of their profits come from the increase in land value that they create from building. Land prices per unit area are higher in a new subdivision than they are in an undeveloped lot(Obviously the majority of the property price increase comes from the building, but the land also increases is my point). It doesn't cost anything to squat on the empty lots while building, so developers purchase multiple undeveloped lots near each other to capture this increase and minimize their purchase cost. Unfortunately, a side effect to this is that the developer basically becomes a monopoly on that area and no other developers or builders can compete with them. This lack of competition is one of the reasons that quality of new build construction has been on decline.
In a world with a land value tax, the acquisition cost of land is significantly lower, but holding it is significantly more expensive. This means that a builder is incentivized to purchase smaller tranches, and hold each lot for less time before starting construction. They will be able to invest more into larger teams because they did not need to loan as much to pay for the land. This will speed up development and also improve efficiency by allowing for more competition.
It’s called land use taxes. It’s probably one of the best ways to change the most negative behaviors that brought about this situation (if combined with less regulated zoning)
I don't have a great sense as to how this works across the world, but where I'm at (Seattle) your property tax is a factor of both the improved and unimproved aspects of your parcel. The improved ones being the value of the buildings and the unimproved being the value of the land itself.
If you had a massive plot in an urban area, undeveloped, presumably the unimproved portion of your property tax would be quite high! But, the issue is that restrictive zoning means that typically the unimproved value of your tax assessment are pretty low.
For example, if you live on 2 acres, but zoning says that you can only put 1 dwelling unit per 5 acres, then you can't really do much with the remaining acres. As a result, the remaining land has little value, and the tax on it is low. This is especially true in areas of little industry, where the same zoning regulations might also prohibit industrial or agriculture uses on that same plot of land!
This is all to say that the structure you're looking for may already exist, but the issue is still in zoning.
I don't think you disagree here... Zoning changes and land value tax are both beneficial. In some cases like the example you gave where you can only build one dwelling per 5 acres, zoning would be a more significant problem. That's an extreme hypothetical though. In other cases, taxation incentives are more significant.
We absolutely need to push for BOTH zoning reform and taxation reform. They will work really well together :)
Agricultural land is far from large population centers, so the value is relatively constrained. The real losers on an LVT is not those owning rural land, but the operators of a surface lot near a stadium, or people living in mansions in the innermost suburb ring.
They get taxed less, because instead of taxing their produce and income, their land is taxed, and agro land is very cheap. On a quick google, I can find a 140 acre alfalfa farm in Idaho for $1.4MM ($100k/acre), and a 0.07 acre empty residential dirt lot in NY for $4MM ($54MM/acre).
Land that is far away from developed land will tend to have lower land values, so farmland would not be so highly taxed under LVT. It's mostly land that benefits from being close to development that would be taxed higher.
Australia values every single lot of land for rates (aka council tax). So it is possible with some good stats nerds to figure it out.
But these values take into consideration zoning. So if you are ona residential block it is valued as such. But it would not be hard to figure out what it would be worth as high density. So the valuation problem is easily doable.
Also in Australia each state does it independently.
Those holding the homes have an interest in making the problem worse. Those buying homes make the assumption of the problem getting worse. Those who complain about the cost will reverse their position when they buy.
The issue is that everyone involved wants the problem to get worse.
Too cynical. There exist homeowners who don't want the problem to get worse, because, like, we live in a society. Rampant homelessness and nosediving birth rates are not to my benefit. My friends and kids will need to be able to afford housing.
It doesn't really matter if a few of the homeowners want things to be better. It's a tiny percentage of the homeowners who want prices to continue going up who push all of the policy effectively.
It seems paradoxical to me that the only "solution" to housing shortages, which exist because the area is too attractive in large part because of the availability of jobs, is to build more houses and thus make the area more attractive to businesses because of the increased availability of workers. It looks like a battle against windmills that is bound to get out of hand. Efforts to alleviate the problem only exacerbate it.
It would be interesting to see if the shortage could be reduced by taking a different approach and making the area less attractive. For example, you could tax businesses much more if they are located in very dense areas, or even just limit the total revenue of all businesses in a certain area. Such things would have their own problems and challenges, of course, but there are few economic problems as bad as the housing crisis, and there is more than enough land to go around.
Your assumption seems to be that the only reason for dense housing is to help businesses, but businesses are bad, so you want to artificially limit them, which doesn't make sense.
People want to be in close proximity both to their jobs and to the businesses they want to patronize. Your suggestion would reduce or push away those businesses but retain the dense housing stock, but whose value would dramatically drop because those businesses are restricted or moved. You've created slums.
No, that's not what I'm saying. At the moment, cities are too attractive, and this is largely due to the availability of jobs. What I am suggesting is incentives, in whatever form, to encourage companies to move to less populated areas.
It is not necessary to obliterate the local business environment, only to limit it to the extent that the available jobs roughly match the available workers. Yes, it is true that house prices would fall to be more in line with construction costs, but that is the point, if you want cheaper housing, the housing must actually be cheap.
"Nobody drives in New York because there's too much traffic."
Building more housing does alleviate the problem. It both alleviates (for the newly housed) and exacerbates (makes more people want to move in). Even if the queue length stayed the same, the fact that the number of housed people goes up means that proportionally, more people are happy.
But, let's be realistic here: Tokyo has more affordable rent than LA, despite having ~4x the population. And Japan invented the concept of the intergenerational mortgage!
You could also do things like have a government murder squad regularly kill people in the area. Or give away drugs. Maybe cut down all the trees and put in a pile of garbage.
More seriously, if you are concerned the problem is the network effects of population density, the goal should probably be to replicate elsewhere rather than to disrupt.
That first scenario you portray is economic growth. Any city in the country would be thrilled to have to deal with the "problem" of being too attractive to both businesses and people.
Yes. The city is thrilled. Jobs! Tax dollars! Wooo!
The people who live there? Maybe not so much.
Is infinite growth desirable? Should we make policy decisions to distribute things more instead?
Compare Dallas with LA. The denser one is much more expensive. Maybe get denser, like Manhattan? Oops, still expensive. Manhattan just needed to build that much more and get even denser? Where exactly is it believed it would stop? That the growth machine would say 'ok, that's enough, now we will just start lowering prices!'?
Yet Dallas-the-city wants to get those businesses - and will crow for days about being more "business friendly" or brag about this or that company moving to Dallas - but Dallas-the-incumbent-residents don't like the influx of people who can out-spend them for housing.
There are a few places that understand the less-direct effect of feeding the infinite-economic-growth-business-machine, that zone for overall stability, to prevent big industrial/corporate development, not just to prevent housing. But for that to work they generally need to have something well-established to rest their hat on instead, to avoid drying up and drying out.
The businesses wouldn't go away. They would just move to less densely populated areas.
Businesses would perhaps take a small efficiency hit because of the reduced availability of labour in the region, but even this would probably be compensated for by better worker mobility, because businesses would be less crowded in the cities and there would be more labour available in the low-density areas.
Businesses would probably also be able to pay a little less as less income is tied up in housing costs. A restructuring of business and population distribution would probably not have that much impact on overall productivity, but it could shift the available money between income levels significantly. If less money goes to rich property owners, then more money stays with the average person.
In fact, remote work is very likely a better solution than increased building... Mass transit is also a solution, and there are certainly others.
Except that we are not really applying ourselves into either, are we? One would naively think we need to work on all viable ones, but of course, society does the exact opposite.
I think remote work will continue to grow because it is so attractive to employees. It will just take time to be fully normalised and it is not available for every job.
As for mass transit, well, some countries just like 26-lane highways right through their cities. It is an ideological issue. Here in Europe I've seen a shift towards better public transport and cycling infrastructure, but that whole change will take time and won't be cheap.
At least in my country I've seen so many young people move to cities to get a better education, only to end up unemployed or working a dead-end job, as they're competing with all other young grads who did the same in a stagnating economic environment.
The winning play, at least over here, is to move to a city just for the education, and then moving back to the countryside / smaller city with cheaper housing and less competing job applicants. The salary difference isn't that bad, for some professions (doctors, psychologists etc) working in rural areas actually pays more, as employers are raising salaries to find applicants.
This works if you can work the jobs available in the countryside. Im moving away because ive found a good job in a city after so many boring azure / php jobs in my village. Its depressing
I'd posit that it's the inverse belief: anything that benefits other people indirectly hurts you. This zero-sum worldview is becoming popular in national politics as well.
The thing I hate the most about not being able to afford a home is that rent is sky high and it makes it basically impossible to have another kid. Not without significant problems and risks at least.
There is no shortage of land, there is a shortage of efficient transportation. All this talk of building up and creative ideas around housing is great but the ultimate problem is transportation. To solve the problem of housing in LA, a person should be able to live in Reno,Nevada and work somewhere in Santa Monica, CA. I'm not saying I have a solution, I'm just pointing out the problem domain.
The US does not have modern transportation infrastructure like similarly sized countries like China. Generally speaking, housing is built near bodies of water or alongside transportation towards bodies of water. Even issues like NIMBYism can be resolved by constructing underground bullet trains that won't affect appearances. This is a hard problem, but not an unsolvable problem. It isn't just economies of scale, government investment, clever economic strategies,etc.. that are needed but actual revolutions in construction technology and transportation. Timelines for construction that are only few years not decades. But alas, I fear the politics of these days would not allow for this.
It would be much more efficient to legalize apartments in LA than to run high speed trains to bedroom communities. Digging tunnels would blow out the cost by itself.
Dropping infinite resources into stretching commutes across vast distances is not realistic. Taken to its logical extreme everyone should commute by private jet. The larger the transportion network, the more it costs, or at the same cost the less convenient it becomes because intervals between vehicles increases.
The most efficient form of transportation is avoiding the trip in the first place through telecommuting. Then walking or biking. Then mass transit which works best with areas with lots of riders (dense cities). https://humantransit.org/basics/the-transit-ridership-recipe.
Think of train service like a pancake. For a given amount of batter you can make a normal pancake, or you can spread it thinly over a large area, or you could make a small and thick pancake. If you want great service over a huge area you must massively increase resource expenditure.
Buses aren’t that sexy but they are probably a good compromise for cities like LA. They don’t require a ton of infrastructure and can still remove lots of cars from the road. Make them convenient (better bus stop UX, wait time no more than 10 minutes, GPS track them, modernize them) and people will consider buses.
Send surveys to all the biggest companies in the city to figure out specifically the routes that need to be created.
But who wants to live in apartments? It's better than being homeless but it's hardly a solution. People want single-family housing, and it is possible to build tens of millions of houses within practical commute distances of big cities. Also, we can build new cities!
> There is no shortage of land, there is a shortage of efficient transportation. All this talk of building up and creative ideas around housing is great but the ultimate problem is transportation. To solve the problem of housing in LA, a person should be able to live in Reno,Nevada and work somewhere in Santa Monica, CA.
Trying to present this in such absolute terms makes it wrong. There’s no feasible way that a 600 mile one-way commute is going to be desirable short of magic teleportation booths. Even if you have a personal jet and priority air traffic control that commute sucks and people want to be enjoy the areas where they live, not spend all of their time traveling somewhere else.
Transportation really is a big problem, but it works the other way around: we need transit and enough density so people don’t need to use cars on a daily basis, freeing up close to half of the land usage in American cities and making housing cheaper. What would help would be if there was a way to live in Burbank or Chatsworth and not need to spend an hour driving to go to Santa Monica, or paying many thousands of dollars per year for the privilege of doing so.
People don't like to live in dense environments. Apartments and condos suck, people want their back yard.
I presented it in absolute terms because we're talking high-level here. The possibility to commute from reno to santa monica and having lots of people actually doing that are different things. My point was, if that was a 1-2 hour commute, then housing along side that commute would make economic sense, as will many other economic activities. If it is a train, I personally won't mind a 2-3 hour total daily commute, since I can catch up with books,entertainment,etc.. but if it is a drive, that would be too much, and that in essence is one of the critical issues on how this is being thought about. Cars (EV or not) are one of the root causes of the housing problem.
I agree, so let's make it cheaper. Other countries build subways cheaper over longer distances. It isn't a practical limitation but one of politics and policy.
Absolutely. Or put another way, if you can imagine a map of a metro area distorted in terms of commute times between places rather than physical distance, the goal is to maximize the density of the city, putting as many people as possible within reasonable commute times.
This is possible via either dense housing or efficient transportation or both.
Unfortunately, the High-Speed Rail has become exorbitantly expensive, all publicly funded a.f.a.i.k. On the other hand, housing in general and the existing 19th-century railroad network were built with private money. As an aside, this is why the internet backbones from coast-to-coast are privately owned; these are on railroad land.
Even a rail line such as RER A only has a capacity of at most 40k people/h/direction. It cannot solve all, or even most, transportation problems of a large city. For that, you'd need tens of lines, as in China or Madrid.
A solution is to build transportation first and build housing afterwards. In Japan, rail companies are also real estate developers who buy the land around the stations and capture the increased land value. US rail companies used to do the same.
Good coverage, but it’s absolutely abysmal in terms of reliability, convenience, speed and cleanliness. I tried to survive a week without Uber/driving in LA, and gave up after 3rd day.
If your public transport is mostly used by low income residents, you’ve already failed. It just shows that it’s not good enough for anyone else and alternative methods are superior if you have money.
Readit News
* Retail business stagnation; retail is dependent on foot traffic, and SFZ residents do not understand what it takes to support the kinds of businesses (yoga studies, coffee shops, art galleries, bookshops) that they actually want to see sited near them. The result is that city plans for commercial corridors create near-blighted streets with gas stations, vacant lots, and the occasional nail salon or Domino's Pizza.
* Public safety issues; those same underutilized commercial drags are dead once the sun goes down; without people walking on the streets, nobody's watching, and you can see on a map clearly where crime gravitates.
* Escalating property taxes; lots of people want to retire in the same community they spent their adult lives in, but in an overwhelmingly SFZ muni with good schools, the top bidder on any residential lot is a family with school-aged children. Schools make up over half (in our case, 2/3) of the property tax burden, and it gets worse as the demographics shift more and more to school-aged families who move out when their kids graduate high school; housing diversity could give retirees an economically rational place to move (and remain in the tax base), but we outlaw it.
The problem with all this stuff is you start to sound like a crank, because almost every problem a typical urban muni faces will probably stem from many generations of outlawing housing.
Your observation that you start to sound like a crank really rings true, and it’s exacerbated by the stark generational gap where every interaction is painted as an attack on long-time residents, especially ones who don’t want to recognize that, say, taxes need to go up because infrastructure costs more to maintain or that traffic is worse because they, a retiree sitting on a $2M house, haven’t been able to downsize into an apartment and so the people who actually need to commute to work have to drive from a further out suburb and transit isn’t an option because guess who reliably votes against it? We had a positively surreal debate when the “preservationists” demanded that an apartment building literally next to a metro station have a huge parking garage even though the developer thought it was overkill. That made fewer, more expensive units and then they ended up renting out unused parking spaces as storage units because the people who choose to live next to transit are often trying not to pay for a car. Actuarially, most of the people who showed up at those meetings are probably dead by now but their decisions will still be visible in 2050.
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After you liberalize housing, you still run into the trouble of economic forces trying to turn housing into a sensible investment: Buy an apartment, pay your mortgage for 20 years, and then you have a pile of leveraged money on top of the basic savings! But then you run into current housing in Spain: Said primary housing has huge tax savings over anything else. Taxes at sale time overwhelm property taxes (which are very good, yet seen as unfair by owners, so they stay low), so it's also better to keep the housing underused. So ultimately you end up with a situation where the building that before had an average of 5 or 6 occupants per flat in the 1980s, is now sitting at one and a half. So you end up having to massively overbuild, as to make sure nobody that bought in a good location does anything but make money on their "investment"
The US could build more, thanks to so many inner suburbs that should really be filled to the brim and 8 stories tall, but ultimately it's just kicking the can down the road until residential investment is not so important, and the price of housing lines up with its utility, not the ever-growing value of the land it sits on top of.
The Georgists that want to just LVT as the one tax in the world are going too far, but I don't see long term solutions to all the problems downstream from housing if, along of making it easy to build, we don't make sure that speculating on the value of the land is actually risky.
In the US, this takes the form of a nonsensical capital gains tax system: personal residences are not eligible for 1031 exchanges, so taxes on gains are due immediately, those taxes are not indexed to inflation, the exemption is too small to make much difference in any high-property-value area, and the basis step-up at death strongly incentivizes children to encourage their parents to keep their house until they die. California puts icing on the cake with Prop 13, so you can trade for a cheaper house and your property taxes increase. At least some recent changes in CA take baby steps toward improving this.
Home owners are heavily incentivized to "not understand" this, so the cycle of abuse continues.
The reason for the LVT is because land doesn’t otherwise follow market dynamics.
In a functioning market you have pressures to sell things. If you can sell something at a reasonably high enough profit margin there is every incentive to do so. There is no benefit to waiting or holding if the price is right. This also encourages competitors who may try to sell a superior version of a widget at the same price or lower, and thus we have basic functioning market dynamics that help achieve relative price stability. It also achieves maximal utility for said market
Real estate however doesn’t work this way. Once someone owns a plot of land there is no incentive to sell. We can’t simply make more, and the things that make said land more or less valuable aren’t inherent to the land but rather where it is located and/or what’s on top of said land.
An LVT is a way to introduce a functioning market dynamic on land. It puts pressure either selling the land or utilizing it maximally. It becomes more expensive over time to hold land that is under utilized. This forces land owners into a set of choices: hold as is but pay an inevitably increasing tax on the holdings, sell part of the land to reduce the holdings, or further develop the land to offset the cost.
Without this function, there is no functioning marketplace for land. Once you own it you can largely hold it forever, without any regard to the actualized value of the land. So for example, a 4 acre lot sitting on “prime” (lack of a better term) real estate with only 1 suburban style house has zero incentive to become maximally utilized even though its value has increased exponentially relative to its utilization.
A LVT is one (and full disclosure I’m a big fan of the land value tax) such proposal to that problem
Property taxes aren't actually good. Consider the economics of new construction: If the net present cost of building new housing is less than its net present value, it gets built.
Net present value is the value of future rents (or rents avoided if you live in it yourself) minus future costs, each discounted by the time value of money. Property tax is a future cost, so it reduces net present value, so you get less construction until rents increase to cover the cost of the property tax.
If you don't like high rents, you don't like property tax.
> Taxes at sale time
This too is a problem if you want people to downsize once they no longer need a piece of property, but e.g. raising the exemption amount so that approximately nobody is paying this tax would then not cost a lot in terms of revenue because as it is the problem is that people are already avoiding the tax by not selling.
If you tax something you get less of it. It's not different when you tax housing.
They also paid a similar amount "on the black", meaning that they had to pay the sellers in cash so the sellers would only pay tax on the official amount.
This was 15 years ago. It seems hard to imagine something like this happening in the US with the Know Your Customer and Anti-Money Laundering laws but maybe it does. And it might not happen in Spain anymore.
I think it would actually make it easier if I could just pay 100K tax to have permission to erect any new 2 bed house anywhere in the country. There can even be a price list linked to local salleries or something.
Karl Marx made this crystal clear 150 years ago. You have to socialize housing, not "liberalize" it, whatever that means. And the Georgist solution will face a similar problem - the political one. The rich will always undermine mere tax law. You have to get rid of the rich, plain and simple.
Our housing policies have broken this social contract. Many younger people cannot afford to live in high opportunity but high priced cities. Those that can, often only do so because of help from family. [1]
NIMBYs dominate both sides of the political spectrum, especially among older people. It will take younger people getting involved in the YIMBY movement to effect change.
[1] https://news.ycombinator.com/item?id=43213546
(i) People who don't like the change
(ii) People who don't care about the change (most people)
(iii) People who do like the change
People who don't like the change (i), regardless of the amplitude of their dislike, will turn out and give public comment and put up yard signs.
People who like the change (iii) will turn out and give public comment only if they are weirdos like me, with off-the-charts amplitude for their feelings.
The net result is that the only public opinion that is legible to staff and electeds is opposite. Again: regardless of what the change is.
Just because someone taught you something doesn't make it so. And even then, it might be true but your own choices (and failures) may be the reason you have not met your goals - rather than "housing policy".
Try on some personal accountability for size - it'll probably help you achieve those unachievable milestones you are yearning for, also.
I didn't even work that hard and I have a comfortable life. I learned to code, and that was it.
Your mileage may vary.
If you move to one of the most expensive cities in the world, one of the things you can do is complain that it is really expensive to live in one of the most expensive cities in the world.
You can do that. I don't recommend it, but it is one of the things that you can do.
The number of YIMBYs who own property is approximately zero. "Yes, I would prefer that you make my life worse", said no property owner ever.
I am a bad person. I want my life to be better, not worse.
This is maybe a bit tangential, but I live in a very walkable neighborhood (by US standards, anyway). But as commercial rents are rising (even faster than rent for housing) it's driven several small businesses out of our walkable core - a bookstore faced a 30% rent increase and couldn't make it work, a donut shop shut down for similar reasons, several other small businesses facing this. It kind of seems like commercial landlords saw that it was becoming more walkable because many high-density housing projects have come in over the last 7 years and they decided to gouge their tenants. Their tenants (small businesses) can no longer make the numbers pencil out with the high rent and shut down leaving empty storefronts - or large chains move in destroying the local character. And then there's less to walk to.
Having seen you here ... well, forever basically, that's kind of awesome to see you describe yourself that way. High fives!
Myself, I'm off to Salem, Oregon on Monday to testify in favor of Governor Kotek's big housing bill this year, HB 2138.
I too am in a western Chicago burb. All this tearing down of $400k houses and replacing them with hideous cookie cutter $1.8M new builds drives me crazy. They're 5-6 bed 5-6 bath. One in particular is a $500k to $2.5M flip. That's criminal.
So for example, my parents & in-laws live in SFHs worth like 300k built in 1970-1990 era. The problem is that anything of comparable size built in the same town or neighborhood since is now going for 800k (literally across the street even). There is no cash-out downgrade for them to move to a townhouse and put there underused homes on the market. They weren't building said townhouses 30-50 years ago, so all available ones are newer and thus .. too nice. Why would you move to a smaller place for same/more money which also has some monthly HOA/condo fees?
My first NYC apartment didn't even have a dishwasher or full sized fridge. I didn't have an in-unit washer/dryer until I was 35, and it was small/bad. Meanwhile it's interesting seeing the expectations of GenZ moving into apartments with their first job that are finished like the nicest apartment I ever lived in. Then they complain about cost? I can still find my old crappy apartment on street easy, and its rent is only up 50% in 20 years which given wages seems fine. Kids are moving to shiny finishes new rentals in Bed-Stuy for more money rather than enduring the indignity of living north of 96th street in a 2nd floor walk up.
It shouldn't surprise anyone who took econ 101 that new builds are appealing to the ones at the margin of buying or not buying, and that those people are way above the median income right now.
Everyone believes in the myth of "dark, dangerous alleways", but when you look at the crime distribution of almost any city, it's usually actually concentrated in the city centre. Which makes sense. Imagine you want to mug someone - would you stand in a place where you're alone and wait entire night for someone to pass by, or would you go in front of a bar, and wait ten minutes for someone who's too drunk to resist. I absolutely love walking around at night and I strongly prefer dark places without any people around me, and I feel much safer than when surrounded by people. Can't get robbed if there are no robbers around. Simple as that.
So far, I have had only one dangerous situation when being out in the city alone at night. There's a place I pass by where groups of people hang out - drinking, talking, listening to the music. Seemed like a lovely spot that lightened up the neighborhood, until one evening they decided to start shooting each other right when I was passing by.
BTW I really wish my city ran out of money for street lamps, because the fact that we need to keep everything lit 24/7 like a carnival is driving me crazy, and I can't wait to move to the countryside for this reason alone.
You could say that the people really own the land and call it "land rent" instead of "land tax" but mathematically its the same thing.
From "Archimedes", by Mark Twain, 1889
Rent, healthcare, and the price of eggs are very popular things to complain about for some reason...
One advantage of taxing land wealth versus wealth in general (a la Piketty) is that land — "real" property — is much harder to hide in offshore corporate holdings than general wealth. It is all documented by necessity.
I have no expectation, unlike George, that taxes on land could fully satisfy the general fund. But they could certainly play a significant part. A significant difficulty with land value taxes in general is the assessment of land value, which is a difficult problem and has caused controversy in the past due to fluctuations and apparent inconsistencies. My preferred approach in the United States would be a Constitutional Amendment, which would allow centralizing the necessary expertise with the resources of the federal government.
Pragmatically speaking, a land value tax would be rolled out first by replacing property taxes with land value taxes, and the majority of people come out far ahead at this stage because people live on lots that have been developed. It is underdeveloped lots that are losers in this phase.
A true georgist would not stop here though, and they would slowly continue to ramp up land value taxes, but rather than replacing property taxes, they would start lowering other taxes on productive activities such as sales taxes or income taxes. But this would be a slow transition.
Additionally, you would include provisions during this phase where tax payments could be deferred until the sale of the property in order to protect individuals who happened to purchase a home that has dramatically increased in value. This prevents situations where an older person might be forced out of their home due to higher taxes. The goal here would be to transition over the long term and protect people who invested significant amounts into their property. The rates would stay relatively low for quite some time. Having lower rates also solves issues that you mention around accuracy of assessments. If you only tax up to 33% of the rental potential of a property, then you can be off by literally a factor of 3 in an assessment and the land will still be profitable to utilize.
If the value of property is constantly increasing through development, how are you solving the affordability problem? The development is attracting and facilitating activity that drives more demand.
What dense city with a thriving commercial and business/industrial base is cheaper to live in than a less-developed rural small town?
The law is sometimes a large barrier, but there are plenty of places in the world with high housing costs which have minimal regulations.
The problem is the cost of land.
Developers are severely capital constrained. They take massive loans from Banks. Most of those loans go to paying for the land.
Additionally, a large portion of their profits come from the increase in land value that they create from building. Land prices per unit area are higher in a new subdivision than they are in an undeveloped lot(Obviously the majority of the property price increase comes from the building, but the land also increases is my point). It doesn't cost anything to squat on the empty lots while building, so developers purchase multiple undeveloped lots near each other to capture this increase and minimize their purchase cost. Unfortunately, a side effect to this is that the developer basically becomes a monopoly on that area and no other developers or builders can compete with them. This lack of competition is one of the reasons that quality of new build construction has been on decline.
In a world with a land value tax, the acquisition cost of land is significantly lower, but holding it is significantly more expensive. This means that a builder is incentivized to purchase smaller tranches, and hold each lot for less time before starting construction. They will be able to invest more into larger teams because they did not need to loan as much to pay for the land. This will speed up development and also improve efficiency by allowing for more competition.
If you had a massive plot in an urban area, undeveloped, presumably the unimproved portion of your property tax would be quite high! But, the issue is that restrictive zoning means that typically the unimproved value of your tax assessment are pretty low.
For example, if you live on 2 acres, but zoning says that you can only put 1 dwelling unit per 5 acres, then you can't really do much with the remaining acres. As a result, the remaining land has little value, and the tax on it is low. This is especially true in areas of little industry, where the same zoning regulations might also prohibit industrial or agriculture uses on that same plot of land!
This is all to say that the structure you're looking for may already exist, but the issue is still in zoning.
We absolutely need to push for BOTH zoning reform and taxation reform. They will work really well together :)
But these values take into consideration zoning. So if you are ona residential block it is valued as such. But it would not be hard to figure out what it would be worth as high density. So the valuation problem is easily doable.
Also in Australia each state does it independently.
The issue is that everyone involved wants the problem to get worse.
There's hundreds of millions of homeowners.
Obviously some exist that support basically every opinion imaginable.
The vast majority of home owners want the "problem" to get worse, because it isn't really a "problem" for them - at least immediately and obviously.
But if they own a $500,000 house and want to sell it to buy a $750,000 house, then a 10% increase in house prices costs them $25,000 net.
Limited supply limits their options. They’re less likely to find a perfect fit and more likely to have to compromise.
It would be interesting to see if the shortage could be reduced by taking a different approach and making the area less attractive. For example, you could tax businesses much more if they are located in very dense areas, or even just limit the total revenue of all businesses in a certain area. Such things would have their own problems and challenges, of course, but there are few economic problems as bad as the housing crisis, and there is more than enough land to go around.
People want to be in close proximity both to their jobs and to the businesses they want to patronize. Your suggestion would reduce or push away those businesses but retain the dense housing stock, but whose value would dramatically drop because those businesses are restricted or moved. You've created slums.
It is not necessary to obliterate the local business environment, only to limit it to the extent that the available jobs roughly match the available workers. Yes, it is true that house prices would fall to be more in line with construction costs, but that is the point, if you want cheaper housing, the housing must actually be cheap.
Building more housing does alleviate the problem. It both alleviates (for the newly housed) and exacerbates (makes more people want to move in). Even if the queue length stayed the same, the fact that the number of housed people goes up means that proportionally, more people are happy.
But, let's be realistic here: Tokyo has more affordable rent than LA, despite having ~4x the population. And Japan invented the concept of the intergenerational mortgage!
More seriously, if you are concerned the problem is the network effects of population density, the goal should probably be to replicate elsewhere rather than to disrupt.
The people who live there? Maybe not so much.
Is infinite growth desirable? Should we make policy decisions to distribute things more instead?
Compare Dallas with LA. The denser one is much more expensive. Maybe get denser, like Manhattan? Oops, still expensive. Manhattan just needed to build that much more and get even denser? Where exactly is it believed it would stop? That the growth machine would say 'ok, that's enough, now we will just start lowering prices!'?
Yet Dallas-the-city wants to get those businesses - and will crow for days about being more "business friendly" or brag about this or that company moving to Dallas - but Dallas-the-incumbent-residents don't like the influx of people who can out-spend them for housing.
There are a few places that understand the less-direct effect of feeding the infinite-economic-growth-business-machine, that zone for overall stability, to prevent big industrial/corporate development, not just to prevent housing. But for that to work they generally need to have something well-established to rest their hat on instead, to avoid drying up and drying out.
Businesses would perhaps take a small efficiency hit because of the reduced availability of labour in the region, but even this would probably be compensated for by better worker mobility, because businesses would be less crowded in the cities and there would be more labour available in the low-density areas.
Businesses would probably also be able to pay a little less as less income is tied up in housing costs. A restructuring of business and population distribution would probably not have that much impact on overall productivity, but it could shift the available money between income levels significantly. If less money goes to rich property owners, then more money stays with the average person.
Except that we are not really applying ourselves into either, are we? One would naively think we need to work on all viable ones, but of course, society does the exact opposite.
As for mass transit, well, some countries just like 26-lane highways right through their cities. It is an ideological issue. Here in Europe I've seen a shift towards better public transport and cycling infrastructure, but that whole change will take time and won't be cheap.
The winning play, at least over here, is to move to a city just for the education, and then moving back to the countryside / smaller city with cheaper housing and less competing job applicants. The salary difference isn't that bad, for some professions (doctors, psychologists etc) working in rural areas actually pays more, as employers are raising salaries to find applicants.
People who bought houses enabled by zoning changes refuse to allow zoning changes that will increase the price of their own home because why?
Racism and a fundamental failure to understand economics.
House owners assume everyone else is also a house owner, so increasing values will benefit everyone.
The US does not have modern transportation infrastructure like similarly sized countries like China. Generally speaking, housing is built near bodies of water or alongside transportation towards bodies of water. Even issues like NIMBYism can be resolved by constructing underground bullet trains that won't affect appearances. This is a hard problem, but not an unsolvable problem. It isn't just economies of scale, government investment, clever economic strategies,etc.. that are needed but actual revolutions in construction technology and transportation. Timelines for construction that are only few years not decades. But alas, I fear the politics of these days would not allow for this.
Dropping infinite resources into stretching commutes across vast distances is not realistic. Taken to its logical extreme everyone should commute by private jet. The larger the transportion network, the more it costs, or at the same cost the less convenient it becomes because intervals between vehicles increases.
The most efficient form of transportation is avoiding the trip in the first place through telecommuting. Then walking or biking. Then mass transit which works best with areas with lots of riders (dense cities). https://humantransit.org/basics/the-transit-ridership-recipe.
Think of train service like a pancake. For a given amount of batter you can make a normal pancake, or you can spread it thinly over a large area, or you could make a small and thick pancake. If you want great service over a huge area you must massively increase resource expenditure.
Send surveys to all the biggest companies in the city to figure out specifically the routes that need to be created.
Trying to present this in such absolute terms makes it wrong. There’s no feasible way that a 600 mile one-way commute is going to be desirable short of magic teleportation booths. Even if you have a personal jet and priority air traffic control that commute sucks and people want to be enjoy the areas where they live, not spend all of their time traveling somewhere else.
Transportation really is a big problem, but it works the other way around: we need transit and enough density so people don’t need to use cars on a daily basis, freeing up close to half of the land usage in American cities and making housing cheaper. What would help would be if there was a way to live in Burbank or Chatsworth and not need to spend an hour driving to go to Santa Monica, or paying many thousands of dollars per year for the privilege of doing so.
I presented it in absolute terms because we're talking high-level here. The possibility to commute from reno to santa monica and having lots of people actually doing that are different things. My point was, if that was a 1-2 hour commute, then housing along side that commute would make economic sense, as will many other economic activities. If it is a train, I personally won't mind a 2-3 hour total daily commute, since I can catch up with books,entertainment,etc.. but if it is a drive, that would be too much, and that in essence is one of the critical issues on how this is being thought about. Cars (EV or not) are one of the root causes of the housing problem.
This is possible via either dense housing or efficient transportation or both.
Unfortunately, the High-Speed Rail has become exorbitantly expensive, all publicly funded a.f.a.i.k. On the other hand, housing in general and the existing 19th-century railroad network were built with private money. As an aside, this is why the internet backbones from coast-to-coast are privately owned; these are on railroad land.
If your public transport is mostly used by low income residents, you’ve already failed. It just shows that it’s not good enough for anyone else and alternative methods are superior if you have money.