We def need more Heaton on here. He is awesome

Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

Learned that in SF bay area in the 1980 as a student renter. My landlady complained her three grown children can't find housing near anywhere her. I told her about building restrictions that she, by default, supported all her life. It was a shock to her that a young guy could teach her something about real estate.

This is 100% true. The ugly truth is the people don’t want to change zoning. Because if zoning laws change the value of their house goes down.

The emerging alliance between libertarian free-market supporters and leftist urbanists on housing density is an exciting development for improving American cities. In Washington state, for example, the recently passed law banning single-family zoning in the state's cities had broad bipartisan support.

I think a housing crash will happen because all those people who bought homes over asking price, although it was at a low interest rate, they are over their heads. They have no equity if the housing prices continue to go down, and if for whatever reason they cannot afford the house anymore and it goes into foreclosure because even if they try to sell, they will not make any money. I think this will happen to a lot of people especially with the massive layoff predicted for the future and the cost of living rising at a high speed.

If you’re also concerned about exhaust gases from transportation, guess what? Zoning restrictions make distances bigger between your potential destinations in the city because you’re not allowed to build up. So more individual houses next to each other make cities expand horizontally instead of vertically.

It's the attitude of: "We got ours! Screw you if you can't afford to get yours!" Prove me wrong

I actually did something about zoning a few years ago. An adjacent 0.75-acre empty lot was zoned for some townhomes, but was opposed by neighboring townhomes on the other side. (I own single family home.) I went to the zoning hearing and gave an unsolicited case for property rights, using standard libertarian arguments. This impressed the board and also the neighbors who initially opposed. I also said that my preferred land use would have been a donut shop, but for that I would have needed to purchase the lot when it was on the market. This is how an individual can affect a little part of the world.

As a Real Estate agent and investor, I have been saying this for years! Nonsafety-related regulations and zoning restrictions create unaffordable housing, which leads to increased homelessness in the long-term

The constant change of increasingly restrictive building codes are driving up the cost of new construction. Each year new codes are added. They increase the complexity and cost of building a new home or apartment. Certainly some level of standard is needed but it is getting ridiculous.

I was looking at old Heaton content, and are glad for new old Heaton.

I’m in Michingan and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.

Taking the fangs away from HOAs would help, too.

I think that's only part of the problem. The federal reserve held interest rates far below the neutral market rate for a decade, allowing individual buyers to leverage higher into prices while maintaining lower monthly costs. Eventually firms noticed that they could earn better returns on housing units than bonds, and profligate REITs started purchasing whole neighborhoods. With higher interest rates (but still not touching some versions of the Taylor rule) we're seeing housing cool down. Unfortunately bubbles don't pop slowly, so we may see a wave of unemployment and forced selling soon (look at the 10 y to 3m spread).

Andrew Heaton is the Jimmy Stewart of Economics.

When people started thinking of their properties as an investment more so than just a place to live we set ourselves down this path. People don't want to hurt their "investments" so they'll do everything they can to stop them from going down. Like you said artificial scarcity and NIMBYs have stagnated new developments and it's crazy how far property values have snowballed because of it.

How about some laws restricting the restrictors?

Zoning is just legal classism. Overt classism. As someone trying to build an affordable house in a US county that represents the epitome of every stupid policy you’ve talked about in this video, watching this makes me want to cry 😭 Classist policies that prevent a professional couple who makes 170k a year from building a home (my husband and I) is a bit of a red flag that this shit has gotten out of hand!

In Denton, TX, they’ve been improving the housing situation a lot. A bunch of new multiplexes, as well more compact houses have been popping up, with a lot more planned or under construction. I think this will really help Denton rise from the ashes and become a greater city.

So some people don't want more neighbors. And you know what, fair enough. The issue these people fail to realize is that they're going to get more neighbors whether they like it or not, the real question we have to ask ourselves is "would I like my new neighbor to live in a large apartment building, or would I rather they live in a cardboard box in front of my house and poop on my sidewalk?" If you really want to get away from people, go live in a rural area.

This was both funny and extremely informative. Thanks!

The consequences of de-zoning (which I do support) is that places like the outskirt of cities like Houston where houses sitting on multi-acres of land will skyrocket because those becomes more sought after. I like having a yard for my kids to run around and not having to hear my neighbors arguing. Had enough of that when I was still renting apartments. Many counties In tx if you got 10acres of land or more, you can shoot any kind of firearms on it as long as you got some way of catching those rounds and it doesn't go into your neighbors yard.

I'm actually rather surprised you called out Minneapolis. Because, in 2018, it became the first major city in the US to ban single-family zoning. And in 2021 it eliminated parking minimums for multi-family housing. As a result there was an explosion of apartment buildings across the city. And the building trend still continues.

I live in a city without all these senseless zoning laws. I got a 2 bedroom apartment for only about $400 per month. I literally made ends meet while working in a hardware store and living alone.

Minneapolis ended single-family housing restrictions in 2020.

This is a national treasure. I can interpret zoning laws for anyone who doesn't completely understand - "Not in MY backyard".

I thought that the NIMBY acronym became obsolete when enough former NIMBYs admitted to what they really wanted, and the acronym was changed to BANANA: Build Absolutely Nothing Anywhere Near Anything

Love it. To be fair, you should've added one thing though: city services. Sewer and electrical infrastructure need to be able to handle the increased load. Sometimes that can be the bottleneck.

They keep telling me that we need government to "level the playing field," but in most cases, government regulations are used to UN-level the playing field. The power structure of a government naturally attracts those want to use the power of government for their own personal interests. Making government bigger and more powerful just ups the political stakes. Also, we need to make "NIMBYs In My Barbecue Yard a thing. That is all.

There would be massive deflation in houses if we would fix the tax code and get rid of that depreciative tax loophole that allows you to write off lost income from unren rented or unoccupied homes.

Your videos are genius as usual! Thank you! I look forward to your future videos.

Ironically, zoning laws lower property value in the long term by paralyzing city growth.

Had neighbors of the NIMBY variety when I lived in Los Angeles. One of them was trying to get signatures in support of anti high rise zoning. I told him I was pro free markets and against telling other property owners what they can and can't do with their own land. He answered that promoting zoning was free market. Glad I no longer live there. So many feign caring for the poor and marginalized while being control freaks and actively making those people's lives impossible.

Historical zoning can actually be quite helpful for frustrating eminent domain. It's kind of beautiful setting one part of government against another to get them to leave your property alone.

Also consider that it is to the best interest of local and state authorities to have property values continuously increase, that way they can continue to collect more property tax revenues from the same small pool of properties without having to raise tax rates or even lower them a little to appear magnanimous!

6:10 - Including "you shall not pass" on that parody sign... it's particularly fitting.

In the county where I live they proposed a bil/law/ordinance to keep spaces open. Essentially make so people can't build on hundreds of acers. I saw right through it and voted against it. I live in northern Utah where housing is insane expensive. 200K more then in Texas on median home prices. Anyway the law passed and now people who complain that housing is expensive don't realize it is their own dang fault.

Building higher density is not all in all the solution. Come to Portland Oregon; we are building high density like crazy. I see single occupancy homes torn down and an apartment complex or townhouse are built on the land. In fact, Metro has changed zoning to where one cannot even build a single occupancy home, have a large yard and a car garage. One should expect land prices and rents to be lower but the opposite: housing prices and rents skyrocket. The reason is the urban growth boundary and regulation has made land artificially scarce and expensive.

I feel like the quality of content on this channel has improved over the last few years

You da man! Keep speaking the truth!

When my grandparents started their custom home business the cost per square foot was, adjusted for inflation, about $75 to $125. That cost in the same area is now around $400. In my grandparents day, people had single pane windows, drafty homes with practically no insulation, only a handful of electrical outlets, etc. and the average size of a home was overall much smaller. The average home has since doubled in size, dual pane windows, good insulation, housewrap, requirements for electrical outlets, etc. have vastly improved the energy efficiency and living quality of homes along with the expense of building them. Zoning absolutely plays a role, and a huge role at that. Zoning often requires a minimum house size too. You couldn’t build a tiny or even small house where I live.

By the second time you made me think of NYC and then didn't show it to me, I chuckled. That's what you wanted, right? I don't want to disappoint.

a lot of it has to do with interest rates, but it also has to do with all the NIMBY idiots that move into small towns, build uber rich "inner-communities" and basically shut out ALL future development once they get established because they feel like they can just shut the door now that they've come in and will cry to city council every time a new developer comes in

That Arlington, Texas joke 🤣 It's so true.

They're actually not NIMBYs anymore--Now they're BANANAs: Build Absolutely Nothing Anywhere Near Anything.

The issue with apartments: Renting rather than owning is method to squeeze more money out of people.

I don't remember the last time I laughed throughout a whole educational video. Well done!

Good thing they abolished single-family zoning in Minnesota and Washington State! Did the same recently in my home in Calgary :)

Heaton is the thinking man's john Oliver

Waiting to see Strong Town values make it to Reason. It would make a great sequel to this excellent video. Zoning laws make cites less walkable, more car dependant, and less livable for lower income folks!

This is one of the very few areas where I DISAGREE with the "official libertarian" mantra of "no rules", for lack of a better word. Seems like most people here, and Heaton, are against zoning regulations and support more of a "build whatever you want" type strategy. I strongly disagree. I bought my house because of the neighborhood, the neighbors, the noise levels, the traffic levels, and so on. If they built an apartment next door, then boom, all my peace and quiet is instantly gone. My privacy is gone, my street will have cars everywhere, no parking for me, more littering everywhere, more crime, and on and on. How is that right? Most people say or imply it's because of "greedy people who want their property values to go up" but that's a dull and vapid way of looking at things. I just want to maintain what I have. Not wanting someone to ruin MY property is not an unreasonable thing. One of the fundamentals of the "right" and libertarians is more freedom centric, but your freedom to do what you want stops where it starts to affect others. I did my homework, I bought my house, I did everything I was supposed to do so that I could have this. Am I not entitled to have it? Why should anyone else be entitled to take away my peace and quiet, my privacy, my parking, and on and on? Do I not have rights too? And the whole "people need cheaper housing" argument doesn't hold water at all. You can build whatever you want, just farther out. It doesn't have to be right next to a nice neighborhood. In fact, it will be even cheaper if it is farther out. This country is 2.43 BILLION acres and proportionally speaking, almost none of it is built on. All the "urban areas" (cities, etc) combined are only 2% of our land. Forests and "shrubland" are over 50%. Agriculture and pastures are another 34%. We got PLENTY of land and space. You have ZERO need to plop your noise making eye sore next door to my large suburban single family home. You WANT that, because it's a good location, but you don't need it. Housing regulations protect assets. That's a good thing. Do you want YOUR asset to be ruined? No? Exactly. Don't be a hypocrite. If we lived in a perfect world and you could guarantee that the apartment dwellers would quietly park their vehicles in an underground garage and then go into their apartment and make no more noise than the average other single family, wouldn't cause any increase in crime, litter, etc. then I would agree with you. They should be allowed to build anything they want. But we don't live in a perfect utopia. We KNOW that they will reduce the property value. It's not about the money. It's about what the money value represents. It represents less peace and quiet, less safety, less privacy, more police presence, more problems, and on and on and on. It's not about the money for me. I'm not looking to sell. It's about reality. The money is just "keeping score".

you got that right about Texas...stop paying the property tax and you'll find out who "owns" your house....keep the logic coming!!!

Zoning laws absolutely need to change! There shouldn’t even be commercial or residential distinction

No, you do not need regulations forbidding playgrounds next to a wolf park, because people don't do stupid things like that, any more than WalMart wants to plop a big box store in a residential neighborhood where the infrastructure won't support enough customers.

8:30 - Then you should support legislation to redirect investors into building rather than buying existing homes.

Nobody wants a city full of condos. No thanks. I support keeping density low. We do not need more people.

I get building more apartments would bring down apartment costs "housing costs". But it would also increase single family home costs. They are two different markets. What we need is to bring down home costs. Thus we should incentivize more houses. People need to own a home, not rent a box theor entire life. Landlords will obviously prefer to build apartments over homes. It makes more money. Thats exactly the problem now.

@6:09 can you make that available on a merch store? I would LOVE to put that in my front yard!!

OMG I NEEEEEEED that yard sign at 6:07

I love that the puppets were in the background.

And the tens of millions of home owners would never allow this to happen because they don't want their home values to drop. The system is as designed. How many regulators own property? Who would be willing to make these changes knowing their home value and those of their constituents would plummet?

I totally agree that zoning sucks but the reason cities are shitty, is because of density. People are irritated living on top of each other and crime is more efficient when all your victims are concentrated.

Colorado has rules that you can't build on property of less than 35 acres without county approval. Where as in Michigan, you can have a one acre lot with a well and septic field, so very low cost infrastructure for a house, in Colorado, to build housing you will have a municipal water and sewage systems, very large residential road, a lot of space allocated to parks and open spaces that the HOA will be obligated to water. Much of the land in the metro area was diverted to "Open Spaces" back in the 1980's and 1990's, to avoid the distinct communities from blending into a seamless expanse of suburban sprawl. The result is lots of nice views, and few trails that are barely used but commutes are longer and houses are more expensive for everybody.

I DO NOT USUALLY AGREE WITH IS CHANEL BUT I AGREE NOW. TRUTH IS TRUTH

I seriously don't understand why people want higher property value. Higher property value means higher property tax. And I thought us Americans hate the tax man.

Love this guy.

Great explanation honestly

So glad i decided to move to the woods of Middle Tennessee. 14.5 acres in the middle of a century farm. No neighbors and codes are thing you enter in my keypad to get in the gate.

Why don't we build on national forests and federal land.......constitutionally it shouldn't belong to the Feds except for very limited purposes.

Zoning may be part of the problem but I don’t think that it’s entirely the issue. Big corporations building more Apartment buildings or converting Commercial High-Rise buildings in to residential units which both are likely to be rental only, is the problem. What I think would work is to prevent corporations from purchasing massive amounts of homes and Air B&B them to make them generate money to maintain upkeep costs while waiting for the market to drive up costs. I’m fine with people purchasing a new home and waiting for the right price on the old home. But when companies as massive as Blackstone that can buy thousands of homes in a week can do it, yeah that’s a problem. Otherwise they will continue to build new mid-rise apartments in major cities while buying up houses on the market to make sure they get your money one way or the other. With a higher rent or more exorbitant price tag on that home that hasn’t had any upgrades in the last 10 years. There are more empty houses than there are fully employed homeless people by a ridiculously large margin. It isn’t a supply issue.

They only thing they’ve done in Columbus for several years now…Is build apartments/condos on any patch of ground they could find. Even better put in some retail on the first floor…living space above. EVERYWHERE….I’d really like to know the occupancy rate in these new builds

I have the solution. The government should simple pass a law stating that you can only charge a certain amount of money for a house, say, $100 dollars per square foot, then force all land-owners to price their homes accordingly. Also rent should be limited to whatever the government determines is fair. This will surely solve all of our problems and have no unintended side effects. Gosh I am so intelligent.

Zoning regs and "historical" designations are often abusive, but you're wrong on a few major points: Lots of zoning regs aren't about houses-as-investment, they're houses-as-I-want-to-keep-living-here. Someone who buys a home in a neighborhood of single family homes probably doesn't want to live next to an apartment building because of noise, smell, traffic, crime, etc. That restriction can be enforced via local government zoning or through private Home Owner Associations, but the intent is that folks living in those houses want to keep living in those houses - it's not always about keeping prices high so they can sell and move. Also, there is plenty of cheap housing in Flyover states, and even in coastal states outside commuting distance to the Big City, moreso because the demand is much lower rather than dense supply -- on the reverse, we could double the housing supply in NYC (lot more toilets flushing every day) and it still wouldn't meet the demand of people who want to live there. Some places are just going to be expensive and Build Baby Build isn't a viable solution for that.

Same here in NZ. Free the land!

I remember growing up and having the little corner stores you could just walk to and get milk, lollies, meat ect. You could walk and get your lunch. Now it's all segregated from residential and most people need to get in a car and drive to some place to do all that. I don't want it change though, I brought a house in an area that had nothing, it was cheaper. Now they have reclassified the area down the road and in comes all the shops.. now my house has tripled in value, even though it hasn't changed.

Love Andrew Heaton and in case anybody doesn't now he has a really good podcast called the political orphanage. He's my go-to radical Centrist the favors Common Sense over emotion and tells you to Envision New York and puts up a picture of Paris

When entry level homes have imported marble, 2 car garages, 3 bedrooms, 2 bathrooms, luxury appointments throughout, comparisons with past generations' housing becomes irrelevant. My parents 1st home in the late 30s was 3 br, 1 bath, no garage, had a dirt floor in the kitchen, and was bought for cash for my parents by my grandparents. That's how houses were bought. The mortgage industry was not what it is now.

Wow. This is actually really good! I don’t tend to agree with libertarians but I agree completely with this video. Much better than their one where they mentioned Houston’s lack of zoning laws and forgot to mention the laws that replicate them.

It's absolutely ridiculous. I'm a market gardener in Florida and I have to constantly patrol at night to keep the displaced deer out of my crops. The developers eat two or three square miles of scrubland a year between me and the nearest city. And it's mostly so rich Yankees can have two acres of yard that they never use. They want 200 feet between their tickytacky and the next identical tickytacky. Meanwhile I'm paying ridamndiculous taxes on agricultural land to maintain the shoddy infrastructure tying all that together.

The biggest problem with real estate is all land isn't equally desirable...and yes a lot of vacant office buildings happen to be on very desirable land.

Over regulation is a problem but so is allowing investors, particularly foreigners, to buy up real estate in major cities and then sit on it doing nothing.

Replace all taxes with land value tax

Dangerous nearby factories n stuff wouldn’t need zoning laws either. If someone can prove that the land is causing danger to other people in other plots of land, that could be considered ruining those other lands. So factories that make noise or release harmful gasses would need to either have permission from the surrounding land owners or own that land themselves. If a park is near a dangerous forest, less people would go there and therefor lower incentive to have one there in the first place.

The one that sticks out for me is not being able to convert high-rises or businesses into living spaces. With Covid and WFH, that ruling has to change.

I welcomed the rezoning of the big corner lot nextdoor. My area is full of NIMBYs and I for one know we need more housing and welcomed it. Unfortunately, the developer went wild and tore out all the mature trees and perennials to make way for 8 very skinny tall townhomes. They were built to be luxury-style with very expensive rent and there was no additional parking created so now I have people parking in front of my house and it is much louder now. I'm not really sure who this is helping other than the investor who made them all rentals though.

Theirs nothing to stop the elimination of zoning laws on any new developments. But to eliminate zoning laws on existing developments just to destroy property values will destroy quality of life in existing developments.

The interesting thing is that Americans, as a rule, prefer suburbia. Single-family dwellings. Not just for property values. But because we like LIVING that way. I, for one, would not choose to buy an apartment if I could afford a house. (In fact, I lived in an apartment for three years just out of college, and bought a house as soon as I could find one I liked and could afford.) I'm all for relaxing zoning laws. I just suspect that we'd wind up with a ton of suburbia, still. The trouble tends to be that we have _other_ regulations that even restrict the building of single-family homes, driving up construction prices, etc. etc. Zoning is only one part of the problem, is what I'm getting at, here.

Wait until you find out what's going on in Canada. Here in Vancouver it takes three years to get an approval to build a detached house without any rezoning.

id limit zoning to five different kinds of zoning rural (mostly so buildings dont tower over someones farm preventing them from having crops only refers to useful farmland) suburban land that cannot support physically and will cave in with housing under a certain size urban land that can support more stuff, technically mountains and desert can be labeled urban if thats what is structurally sound to build there) hazardous food; namely slaughterhouses hazardous nonfood: chemical factories, landfills

Supply and demand is obviously the cause of increased housing costs, but it is not down to zoning, or restricting new building permits. Think about the way we use the housing we have. I live in a 3 bedroom house with my dog. My street has at least 10 other houses of similar size with the same single occupant. Very few houses are fully occupied. Now, think about how we used housing in the past. I grew up in a 3 bedroom house with 2 parents, 5 siblings and 2 dogs. Both of my parents grew up in smaller houses with even larger families. The idea of a spare bedroom was completely foreign. Not only do most people take up more space than before, but we need more and more space for our stuff. We fill our under-occupied houses, then have to rent storage space to house our ever expanding stuff. Yes, we need to change zoning laws, especially reducing set-backs and allowing multi-use developments, but the amount of space that each human occupies has grown exponentially, regardless of zoning laws.

Welcome back Heaton !!!!

Wow, you should come to Orange County, CA. You’d love it. 5 story block long apartments everywhere. Wonderful.

Very interesting presentation.

I'm looking forward to Heaton's "Abe Lincoln Cosplay Cameo" phase of his career.

The tiny house example is perfect for showing why your property next to it will be worth less if you let people do it: Every tiny house will be accessed by normal sized cars which will create traffic jams in you neighborhood thus lowering the value of properties next to it before they were built. Same with the office buildings: having people live in them creates nuisances(again mainly traffic) that will mechanically lower the value of residences next to them. The equation here is simple: more plebs = less value. Libertarians can be all about property, but not so much when it comes to protecting its value. Again, just like people, all land is not equal.

Just the right amount of humor and a good delivery

They are doing this in some areas, it might be cheaper than starting from scratch but it is still a lot of work and money to convert offices to apartments. So still not a magic pill.

Historical designations should be regarded as a Fifth Amendment "Taking" because they limit the owner's ability to do as he wants with his property and it impacts the resale value. We have several houses we rent. One of them got caught up the Historical Designation net when people in that neighborhood tried to stop a developer from razing an old house and building a few new ones. So several blocks of houses, including ours, are now in a protected Historical District. 🙄 And somehow the developer wasn't stymied at all... the old house is gone and the new ones are there. Thx, neighbors.

Im sure there is more nuance, but this is what i tell people irl. The response i get is always "bUt ThE cOoRpOrAtIoNs ArE bUyInG aLl ThE hOuSeS." While I am skeptical that that is as big of a problem than other people are making it put to be, wouldn't increasing the supply of housing still make affordable housing more accessible?! Why is everything an either/or? Why cant you get on board with me about NIMBYS and then we can part ways on restricting businesses from purchasing housing? Im a bit salty on this one because i have never really had the chance to get affordable housing given my circumstances. This was partly my choice, but the timing still stinks. I should be able to afford a decent studio or one bedroom apartment, but instead i have to continue rooming with my sloppy brother.