[HN Gopher] U.S. rent has increased 175% faster than household i...
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U.S. rent has increased 175% faster than household income over past
20 years
Author : finphil
Score : 353 points
Date : 2021-03-26 17:43 UTC (5 hours ago)
(HTM) web link (phys.org)
(TXT) w3m dump (phys.org)
| subsubzero wrote:
| A few things:
|
| Companies(up till the pandemic) seemed to cluster in all the same
| spots due to network effect, SF bay area, NY, Chi, Boston, Austin
| etc, with little to no jobs (that pay well) in midsize or small
| cities.
|
| People now are extremely knowledgeable about great towns and what
| areas are good, thank instagram/facebook, zillow/redfin, and a
| multitude of blogs and sites that report on this, there is really
| no longer the idea of a "secret town" that is perfect, if one is
| found, people flock to it and drive up housing prices.
|
| States/Cities stifling development in favor of incumbent owners.
| This is a real problem in California, and even when I lived near
| Boulder it was shocking to see how much they tried to have people
| stop building in that town.
| Apocryphon wrote:
| What if this goes international? Montreal always seemed like a
| secret hidden in plain sight, second biggest city in Canada but
| with a much cheaper housing market than both Toronto and
| Vancouver.
| swiley wrote:
| >there is really no longer the idea of a "secret town" that is
| perfect, if one is found, people flock to it and drive up
| housing prices.
|
| The place I live _aggressively_ builds dense highrise
| apartments. People are flocking here and it 's still awesome.
| My rent didn't go up this year and if I were willing to move
| across the street I could have saved money.
| sthnblllII wrote:
| Before outsourcing picked up steam under Ronald Regan, Bush 41
| and Clinton, more jobs were high paying industrial and had to
| be done in remote places where the natural resources are. Now
| that Finance, Real Estate and Investment (FIRE) are 1/5 of GDP
| more jobs are servant jobs catering to wealthy people in big
| cities.
|
| The pandemic, remote work the and return of urban unrest have
| slowed or possibly reversed this trend as you've pointed out.
| joshuaheard wrote:
| One reason housing is expensive is that housing is expensive to
| build. Every house is handcrafted on location the same way it has
| been done for hundreds of years. Imagine if you purchased an
| automobile that was hand assembled in your driveway. It would
| easily triple the cost.
|
| A solution is to manufacture a home that could be built by
| bolting together mass-produced interchangeable parts. I have seen
| prefabricated housing, and that is a start. But, something more
| granular would be more efficient and less expensive.
| [deleted]
| system16 wrote:
| While houses are definitely not cheap to build, the massive
| increases in housing prices occurring in major cities - and
| increasingly rural areas - across the world is not fuelled by
| an increase in development costs.
| phendrenad2 wrote:
| I think that's outdated information. Most houses are built in
| big lots, with each house being mostly a copy-paste of the
| others with some cosmetic tweaks. Hell, they probably have
| software to mix and match cosmetics too. Then the housing lot
| is likely a clone of a lot the company has built in dozens if
| not hundreds of other locations.
|
| That said, prefabs would help greatly. It's too bad that
| prefabs would have to travel over the open roads, which limits
| the size. If houses could be lifted via helicopter to the
| destination, we would likely see costs fall greatly, through
| the power of the assembly line that Henry Ford invented oh
| thousands of years ago now.
| tempfs wrote:
| Foreign investment(Chinese) and interest rates are the biggest
| cause that I see. Shit local building policies are also to
| blame(California).
| mjparrott wrote:
| Is there any analysis of the scale of foreign investment and
| its impact on pricing and valuations? The every-so-often
| headline is 'international billionaire has high rise apartment
| over central park for his/her cat' ... but I don't know the
| actual data on it
| seanalltogether wrote:
| Is there any existing tax system that encourages new
| developments? I wonder if that would help with this situation. I
| understand that communities resist new apartments/high rises that
| will increase density and traffic etc, but if there was a tax
| incentive to existing homeowners, that might help people change
| their minds.
| psychometry wrote:
| https://en.wikipedia.org/wiki/Land_value_tax
| seanalltogether wrote:
| My understanding is that land value tax would actually
| increase the taxes paid by existing residents as more people
| move in.
|
| For example, if a town has 1000 families split among 1000
| equal parcels of land, each landowner would contribute enough
| taxes to the city budget to provide services for 1 family. If
| I then take 100 parcels of land away and put 600 apartments
| on them, now I have 1500 families among 1000 parcels of land.
| The city will now require each landowner to cover the budget
| costs of 1.5 families
| psychometry wrote:
| Your math is wrong. Assuming that desired tax revenue
| should scale linearly with the number of families, the
| owners of the non-apartment parcels would be paying 1.35
| times what they paid before the apartment building was
| built, not 1.5.
|
| However, even ignoring all of the questionable assumptions
| that go into such an unrealistic scenario, the tax
| justifies itself since that neighborhood was clearly
| massively underdeveloped compared to its land value (i.e.
| housing demand).
| tryptophan wrote:
| https://en.wikipedia.org/wiki/Georgism
|
| >Any natural resource which is inherently limited in supply can
| generate economic rent, but the classical and most significant
| example of land monopoly involves the extraction of common
| ground rent from valuable urban locations. Georgists argue that
| taxing economic rent is efficient, fair and equitable. The main
| Georgist policy recommendation is a tax assessed on land value
| klyrs wrote:
| I live in the Vancouver area, where city councils are almost
| entirely populated by developers or candidates supported by
| developers. So by all appearances, it's friendly to developers.
|
| What's wrong with this picture? Developers love building luxury
| condos. 3-bedroom apartments? Not sexy. Low income housing? Not
| sexy. Unoccupied luxury condos? No problem, refusing to sell
| keeps those valuations up, which you write off as a loss --
| easy $0 tax bill!
|
| And then the really juicy shit. We're expanding mass transit!
| Great, right? Stations are great place to put the high density,
| walkable neighborhoods! But who chose the locations of the
| stops? Developer-controlled city councils. It reeks of self-
| dealing, especially when it appears that the developers bought
| up the land before the station locations were announced...
|
| So. Be careful what you wish for. It's not just "new
| developments" that we need, it's high density, affordable
| housing.
| ping_pong wrote:
| I'm curious what difference would be if they compared it to the
| first and second standard deviation above median income, ie. the
| 68th and 95th percentiles. That would paint a more accurate
| picture of income inequality, etc.
| maxharris wrote:
| Solution: eliminate state and local regulations that restrict the
| building of housing, especially in places where demand is high.
| As supply rises, prices fall. California's CEQA should be the
| first to go:
| https://www.theatlantic.com/ideas/archive/2021/03/signature-...
| patagonia wrote:
| Solution: Require persons owning 2nd or 3rd homes in high
| density areas to convert those homes to rentals.
|
| Solution: Require neighborhoods of single family homes to be
| replaced with high density high rises when a certain density is
| reached.
|
| Solution: Force owners of undeveloped lots to sell to
| developers.
|
| I actually don't agree with any of those. Just like you
| shouldn't have the right to take my property to create
| additional housing, you also don't have the right to tell a
| community to change its character or compensation. That's
| really what the government is. It's the community. And if the
| community doesn't want new development, that should absolutely
| be allowed.
| dcolkitt wrote:
| > Just like you shouldn't have the right to take my property
| to create additional housing
|
| That's fair enough. But the federal government provides a ton
| of incentives to promote home ownership. If a local community
| doesn't want to meet its endogenous demand for housing, it's
| essentially offloading the problem to other parts of the
| country.
|
| A local government that artificially restricts housing should
| automatically lose all of these federal incentives. Because
| when supply is inelastic, it doesn't actually increase home
| ownership, just makes the existing landowning class
| wealthier. If a community refuses to build housing that's
| fine. But homes in that community will never be eligible for
| Fannie or Freddie mortgages. Homeowners will not get a
| mortgage interest tax deduction. In fact they should have to
| pay income tax on the value of imputed rent. No more capital
| gains exemption on their primary residence.
|
| I expect some communities will still choose to keep their
| policies in place. But I think the vast majority of states
| and municipalities would change their tune pretty quick.
| km3r wrote:
| On of the biggest state incentives in CA that allows
| communities to be exclusionary without any draw back is
| prop 13. See how quickly opinions will change when they
| suddenly have to pay their fair share on local road
| improvements, parks, and schools. People who are late into
| their careers, likely making well into the mid to upper 6
| figures, are borrowing from kids 20-30 who are struggling
| to afford rent because a duplex will 'kill their
| communities character.' The sudden increase in property
| taxes will enable cities to build the infrastructure to
| handle the increase in residents easily.
| notatoad wrote:
| the solution is a land value tax. instead of taxing
| properties based on how much the building on it is worth, tax
| properties based on how much a theoretical building _could_
| be worth on that same piece of land. if you want to have a
| bungalo but the market wants a skyscraper, that 's fine, but
| you have to pay the same tax as a skyscraper would.
|
| it encourages your solutions without "forcing" anything.
| gameman144 wrote:
| This makes total sense for incentivizing development, as
| you can essentially price out the locals to get access to
| their land.
|
| It's definitely a double-edged sword with no right answer,
| though. You can encourage the efficient use of land with
| high land taxes to bring in development of badly needed
| housing, but you will be altering the ability of previous
| residents to stay in their homes.
|
| Likewise, it's not unreasonable to see local governments
| reflect the will of their constituents saying "We recognize
| that these actions mean that new people and businesses will
| not be able to move in here, and we're all fine with that."
|
| It seems like this is directly a tradeoff between the
| rights of current residents vs. considerations for
| prospective residents. Neither one of those groups is
| intrinsically more valuable than the other. While land tax
| is really great at making places more livable for new
| residents at the expense of current occupants, restrictive
| zoning and current-valuation taxes are great at preserving
| the neighborhoods that people already live in, at the
| expense of new people being able to join those
| neighborhoods.
| caeril wrote:
| Solid take. I don't personally like NIMBYism, and I don't
| personally like the parasitical nature of landlords or the
| scheming they engage in to drive their own property values
| up.
|
| But my personal distaste should have absolutely no bearing on
| the norms a foreign (to me) community chooses for itself.
| [deleted]
| [deleted]
| maxharris wrote:
| Individuals have rights, and communities are nothing more
| (and nothing less) than collections of individuals. If the
| entire community wants to violate the rights of a single
| individual, a just government should stop them. Socrates
| should not be forced to drink that hemlock.
| pessimizer wrote:
| Should Socrates be forced to wire his electric according to
| fire codes?
| maxharris wrote:
| Those fire codes were created a century ago for the
| laudable purpose of preventing death from avoidable house
| fires. These days, now-outdated fire codes are just
| another of the many impediments slowing the creation and
| adoption of prefabricated homes built in a factory by
| robots.
|
| We need a way of sunsetting rules that no longer make
| sense when technology makes radical change possible. We
| also need to remember that competitive companies don't
| succeed long-term (i.e., in timespans of decades) by
| producing things that intentionally kill their customers.
| (Ford hasn't done too well in the decades after the
| Pinto!)
| anotherman554 wrote:
| A "company" might only exist for a few months during a
| construction project. When the project is over and the
| house sold, the "company" disbands.
|
| The idea that we don't need fire codes because company
| owners or employees care what happens decades down the
| line is misguided.
| [deleted]
| galimaufry wrote:
| > you also don't have the right to tell a community to change
| its character or compensation.
|
| Sometimes you do though. There are real cases where the acid
| rain produced by City A falls entirely on City B. Surely in
| that case City B should be able to tell City A to change its
| character? Local government alone will never solve a problem
| like this.
|
| The people who pay the price for SF's character are _not_
| people who live in SF, but people who commute a long way from
| outside the city limits, or who don 't live in the Bay Area
| at all but would if they could. The SF government should care
| less about them than about current SF citizens, but their
| interests aren't zero. Which is why you need a higher level
| polity like the CA government to overrule the local
| government .
| snicker7 wrote:
| Japan has national zoning laws. This makes it much cheaper to
| build since builders have to compete at a national level. And
| there is less greasing of local politician's pockets.
| clairity wrote:
| that's going a bit too far. instead, ceqa should be restricted
| to issues of substantive air and water pollution, ridding it of
| nuisance-oriented elements like noise and traffic (which can be
| addressed out-of-band or after-the-fact if need be). studies
| could be sped up and most nimby challenges severely curtailed.
| koolba wrote:
| And capped tax increases in CA mean that with each year property
| owners are increasingly disincentivized to never sell.
| JumpCrisscross wrote:
| > _capped tax increases in CA mean that with each year property
| owners are increasingly disincentivized to never sell_
|
| I'm surprised it hasn't become commonplace to buy California
| properties through an LLC. That way one could sell the SPV
| while maintaining the tax benefits.
| koolba wrote:
| A change in control of the LLC is considered a reassessment
| event so a single LLC would not be enough. I'm not a CA tax
| lawyer so not sure if there's a way to avoid that through two
| layers of LLC. Having the LLC be out of State or country
| would probably help too.
| JumpCrisscross wrote:
| > _change in control of the LLC is considered a
| reassessment event so a single LLC would not be enough_
|
| Then don't change control. For sake of argument, consider
| putting an entire town's real estate into an LLC. Ownership
| is allotted with membership units which correspond to
| plots. You could have all the same local laws apply to the
| units instead of to the properties. The managing member
| could be a town-owned LLC or something; control would never
| change.
| paxys wrote:
| No one is going to spend hundreds of thousands of
| dollars, maybe a million+, on a house they don't actually
| get to own. You have a contract with the LLC, sure, but
| what happens when it goes bust?
| koolba wrote:
| That's pretty much how a co-op works. Now I don't think
| the CA government or market will allow that to happen,
| but a variant of that concept has existed for years.
| lotsofpulp wrote:
| When the government runs out of money, the semantics
| aren't going to matter. Either the rules will get
| changed, or the town goes bust.
|
| The current situation in CA is tenable because the
| newcomers who are shouldering the disproportionate burden
| of taxes are high income, and can and are willing to
| afford it while the older homeowners continue to wield
| political power.
| arduinomancer wrote:
| I don't understand the economics here in terms of a rational
| market.
|
| If housing is so inflated in value right now, wouldn't investors
| be pouring tons of capital into construction?
|
| If the cost to build is fixed but the sell price is continually
| increasing, then isn't that the greatest profit making
| opportunity you could ask for?
|
| So then why isn't the supply side of the market catching up with
| the increases?
| asdff wrote:
| Restrictive zoning. Look at an old 1920s brick NYC-looking
| apartment building in a California city standing amongst single
| family homes. It might be 5-6 stories tall and lack parking.
| That sort of building is illegal today in that neighborhood,
| but it wasn't in the 1920s.
|
| A lot of good can be done if we reset California zoning
| ordinances to what used to be allowed, just as a start.
| Der_Einzige wrote:
| Construction costs are rising in lock-step with demand for
| housing. You can't escape this by just "building it yourself".
| Even home renovations or home adjascent industries (water
| heaters) are up 2 or 3x their pre-pandemic prices.
|
| Construction materials companies (e.g. lumber producers) would
| rather just raise prices than scale up production dramatically
| since there's a real risk of demand drying up when interest
| rates go up sometime after 2024. Same reason why crazy COVID
| demand for masks has not lead to huge increases in domestic
| mask manufacturing from small players.
| jjk166 wrote:
| In any given area the amount of land is fixed, you might be
| able to slightly increase the supply with some land
| improvements like draining a marsh, but there's nothing that
| scales.
|
| To house more people, you need to build denser housing on the
| fixed supply of land. Most places have zoning laws that limit
| density. But beyond that, it's actually less expensive to build
| higher cost homes - a lot of small apartments require a lot of
| walls (more material) redundant plumbing and electrical (more
| labor) and you need to handle the sale or rental to more
| parties (more overhead). If they do build apartments, it's
| going to be samll 1 and 2 bedroom apartments because those are
| lower risk - you'll always find some young people who need a
| place and can get a parent to cosign a lease and who will let
| their landlords treat them like crap. 3 or 4 bedroom apartments
| appropriate for families are harder to move, so even though
| those tenants might be able to pay proportionally higher, the
| opportunity cost of vacancies makes them a non-starter.
| closeparen wrote:
| It is broadly illegal to alter the character of a neighborhood.
| hinkley wrote:
| I don't know about where you live but where I am I know of a
| project that can't get built because construction companies are
| charging at a premium and their intention to provide median
| housing will instead jack up the averages in the neighborhood
| so much that several different interests have allied to fight
| it.
| AshWolfy wrote:
| For one there isnt a single housing market, there are a lot of
| segmented housing markets that only partially overlap. In high
| demand areas, land is already limited.
|
| For another zoning restrictions are severe in the US, with most
| residential land zoned for single family housing with large lot
| sizes.
|
| With high upfront costs, limited land, and political issues,
| developers would rather build high end housing, which has led
| to over supply in the high end market, and under supply in the
| low end market
| Ccecil wrote:
| Material costs are up right now from my understanding. I assume
| that is part of the issue.
|
| In my area the issue was land to build on. The main undeveloped
| areas are either national forest or farmland the majority of
| which is owned by just a couple families who are not in a hurry
| to sell it off.
| splithalf wrote:
| People talk about the lump of labor fallacy but never the lump of
| real estate fallacy. It is as though land were a finite resource.
| I know that's a deeply unpopular opinion.
| swiley wrote:
| It would be a valid opinion if we actually used the land but in
| most places you barely have medium density housing. We have a
| room shortage not a land shortage.
| Wohlf wrote:
| Land is a finite resource but we still have plenty of that,
| location of the land is a very finite resource. Housing is very
| affordable in much of the country, just not in the most
| desirable cities.
| neogodless wrote:
| > Across the largest 50 cities
|
| Kind of important to note.
|
| So what are the desirability ratings of those cities vs.
| alternate places to live over the same 20 years?
|
| Is it that people want night life, a Whole Foods, 20 Starbucks,
| etc. all really close to wherever they live? Or is there some
| other driving factor, like living outside the city and buying a
| home and having a reliable car is something many wealthy citizens
| enjoy, but if you need to be close to services, even if your
| income hasn't gone up, you have to rent in a city?
|
| And how much is rent outside of those cities?
| jdavis703 wrote:
| There's not a single county in the US where a full time minimum
| wage worker can "afford" an apartment (e.g. paying less than a
| pre-determined amount of income for rent). Affordability is
| worse in big cities, but it's a problem that also plagues
| suburban and rural counties.
| TechBro8615 wrote:
| I wonder how much of this is due to supply/demand and the simple
| fact that more people want to live in about the same number of
| dwellings. Even if population growth doesn't explain it, _urban_
| population growth might. e.g. San Francisco has seen huge growth
| but constructed basically no new units. So it 's not exactly
| surprising the prices go up.
|
| The funny thing is, all the rich people living in these cities
| would never be able to survive without all the poor people
| commuting into the city to support them. The more expensive the
| city gets, the longer those commutes get. It's a horribly
| regressive system because now the poor people are spending
| multiple hours a day commuting, which is a huge opportunity cost
| of time that they could have spent advancing their social
| mobility.
|
| At some point something has to give. You can't just keep filling
| cities with rich people if nobody is there to keep them running.
| A4ET8a8uTh0 wrote:
| Well, robot servants are coming. Sure, there will be some truly
| rich individuals, who will employ human servants, but that will
| be a minority.
|
| I agree with your point, but you will often find the plight of
| the poor is.. low on the priority list. It should be higher
| based on the average presence of guillotines on various message
| boards I frequent, but I assume the well-off have some sort of
| survival plan.
| DamnYuppie wrote:
| I am curious about this sentiment, the one about cutting off
| peoples heads and all. The times in history that this
| happened all you did was replace one ruling elite with
| another ruling elite. It didn't improve the lives of the
| lowest, in fact it usually really works out poorly for the
| poorest. See the rain of terror or the over throw of the
| Czar's in Russia.
|
| In the U.S.A if you took EVERYTHING from all of the
| billionaires, there are ~700 of them you would net under $5T
| in total [1]. The existing debt of the USA today stands at a
| hair under $28T [2]. The estimated budget deficit for the
| next 10 years is $1.2T a year [1]! You do realize you can lop
| off all the heads you want, take all the money you want, and
| you will not have solved anything! You would still be a debt
| slave :( Raising taxes by itself will not solve anything you
| ALSO need to decrease spending, but no one wants to hear
| about fiscal responsibility.
|
| The heads that need to go are those of corrupt politicians.
|
| [1] https://inequality.org/great-divide/updates-billionaire-
| pand... [2] https://www.pgpf.org/national-debt-clock
| A4ET8a8uTh0 wrote:
| I did not say it is rational, but you simply cannot ignore
| its existence in hopes it goes away.
|
| edit: Come to think of it. You cannot ignore it precisely,
| because it is not rational. Rational people you can bargain
| with.
| DamnYuppie wrote:
| Agreed, I didn't think you stated it was rational. I was
| just mostly curious about the demographic of those people
| who think like that. I am not ignoring it, I am just
| really curious why so many others are ignoring so much
| human history on this subject. I am not saying their
| aren't grievances or lots of areas to improve upon, but
| it seems like a lot people who are upset because somebody
| else has something they want and all they care about is
| they want it. Like kids in a grocery store screaming that
| they want ice cream.
| A4ET8a8uTh0 wrote:
| I wish I knew. I don't share the sentiment, but I
| understand its roots. And if things get bad enough, the
| demand will change from ice cream to yet unknown
| something else. If we take the analogy further, it would
| appear that we have no real parent figures now. No one
| wants to talk about the stuff that has to be done that
| you already alluded to ( lower spending AND higher tax
| burden ). All we have is a TV show.
|
| Demographics-wise, I assume people younger than me, but I
| may be oversimplifying it. In practical sense, the more
| you earn, the less likely you are to support tax increase
| on yourself so maybe it is more tied to socio-economic
| status. Sadly, I have no data to back this up.
| heartbeats wrote:
| The ones who actually did it (Russia) ended up worse off,
| but workers everywhere else in the world gained, because
| the elite became more willing to let go of certain
| privileges to pacify the working class.
|
| The goal of threatening to kill someone isn't to murder
| them for the sake of murder, it's to negotiate with them
| from the fairly sensible starting point of "give me what
| you want or I'll kill you". If what they want is "fair
| wages and a decent life," that seems reasonable enough.
| DamnYuppie wrote:
| I am not sure that is true. Most of the Western world was
| reeling from WW1 at that point in time. Lots of young men
| were removed from the labor force. Quickly there after
| the rest of the world went into the Great Depression.
| After that they were on to WW2. I am not sure there are
| any direct lines that can be drawn from Russian's
| overthrow of the Czars. There were just too many
| confounding things that were going on to make a claim
| that the rest of the world improved because of it. One
| thing we can say, and it was still my central thesis, is
| that the majority of those who most supported the over
| throw didn't benefit from it at all.
| echelon wrote:
| > San Francisco has seen huge growth but constructed basically
| no new units.
|
| This is why San Francisco doesn't work anymore and isn't
| equitable until the electorate decides to build new housing. We
| shouldn't downplay a move to cities like Austin, Charlotte, and
| Atlanta that have no qualms with building lots of housing and
| affordable housing.
|
| Why have a non-trivial percent of funding go to rent seekers,
| anyway?
| ic0n0cl4st wrote:
| It should be noted that San Francisco is surrounded by bay
| and ocean on 3 sides and also contains a significant amount
| of land which is not really seismically sound, and 50% of
| which is protected parkland.
|
| Those other 3 cities have significantly more capacity both to
| build up and out. Blame the electorate all you want but
| geography is geography.
| ergocoder wrote:
| I understand the "build more" concept, but a city (any city)
| shouldn't grow too fast. There's a huge risk in growing too
| quickly.
|
| SF's infrastructure doesn't seem that it can handle more
| people. traffic is bad. Restaurants are full (have you been
| to a brunch?). Buses are full. More homeless than ever.
|
| Letting the price rise, so people/companies will go elsewhere
| seems like an okay strategy.
| TheTrotters wrote:
| Those aren't complicated problems. Buy more buses. Build
| more real estate for restaurants. And so on.
| arcticbull wrote:
| > I understand the "build more" concept, but a city (any
| city) shouldn't grow too fast. There's a huge risk in
| growing too quickly.
|
| Well, it's pretty clear from the explosion in housing
| prices that it's not growing nearly fast enough. I'd love
| to see some citation as to what "too fast" is and why you
| think SF is at risk of hitting that number.
|
| > SF's infrastructure doesn't seem that it can handle more
| people. traffic is bad. Restaurants are full (have you been
| to a brunch?). Buses are full. More homeless than ever.
|
| More housing = more people = more revenue. That revenue
| turns into more infrastructure, more restaurants, etc. In
| fact more density makes infrastructure more economical to
| operate on a per capita basis. Think Hong Kong.
|
| Part of the reason there's more homeless people is they
| can't afford houses, which building units would help
| alleviate.
|
| > Letting the price rise, so people/companies will go
| elsewhere seems like an okay strategy.
|
| That's not a very free-market attitude!
| chongli wrote:
| _More housing = more people = more revenue. That revenue
| turns into more infrastructure, more restaurants, etc. In
| fact more density makes infrastructure more economical to
| operate on a per capita basis. Think Hong Kong._
|
| The cost of upgrading infrastructure in a busy city is
| enormously expensive. San Francisco is on a peninsula
| with no room at all to expand outward. The only solution
| is to build up and that's a real problem in an area prone
| to earthquakes.
|
| Plus there are a lot of people that like the character of
| their neighbourhood and don't want to live in an
| apartment building. It isn't their fault that SF became
| the global tech capital.
| arcticbull wrote:
| > The cost of upgrading infrastructure in a busy city is
| enormously expensive.
|
| So having more people to split that cost with would help!
| To be clear Hong Kong island is far harder to build on.
|
| > Plus there are a lot of people that like the character
| of their neighbourhood and don't want to live in an
| apartment building. It isn't their fault that SF became
| the global tech capital.
|
| They're also not entitled to that. In a democracy the
| many decide.
| chongli wrote:
| The many struggle to organize themselves as effectively
| as the few. This is how it's always been in politics. I'm
| not aware of any recent development that would change
| that dynamic.
| nitrogen wrote:
| _In a democracy the many decide._
|
| In a democracy the people who inhabit a place decide. Not
| the people who _want_ to inhabit it. That 's not
| democracy, it's colonialism.
| arcticbull wrote:
| lol, that's not colonialism. Colonialism:
| the policy or practice of acquiring full or partial
| political control over another country, occupying it with
| settlers, and exploiting it economically.
|
| However, with that in mind, I'm alluding to the kinds of
| people in a city like San Francisco. The older, rich,
| land-owning class tends to be very activist and tends to
| vote. The younger, less-wealthy, renter class tends not
| to vote. Therefore, the needs of the few are outcompeted
| by the needs of the many.
| ntvSF313throw wrote:
| > They're also not entitled to that. In a democracy the
| many decide.
|
| Actually, yes they are. San Francisco is a participatory
| democracy. Between a large # of ballots voted for each
| November, we elect our board of supervisors and attend
| supervisor meetings to tell them how to vote.
|
| If people don't vote, well, that's their fault.
| skrtskrt wrote:
| Basically all of Japan is earthquake prone, they do just
| fine. The building technology is there.
| ic0n0cl4st wrote:
| > The cost of upgrading infrastructure in a busy city is
| enormously expensive. San Francisco is on a peninsula
| with no room at all to expand outward. The only solution
| is to build up and that's a real problem in an area prone
| to earthquakes.
|
| People always ignore this fact. Infrastructure isn't
| free. When all is said and done the Central Subway
| extension will likely have cost over $2bn for 1.7 miles
| of subway. [1] The new transit center cost $2.2bn [2].
| Rebuilding 1/2 of the bay bridge cost $6.5bn. [3]
|
| Consider that money for all of this is artificially
| restricted by Prop 13, and by California being a net-
| giver state, paying about $40bn per year more to the fed
| than we receive back, effectively being a piggy bank for
| poorer states.
|
| > Plus there are a lot of people that like the character
| of their neighbourhood and don't want to live in an
| apartment building.
|
| Many commenters with a lot of hatred for San Francisco's
| unique brand of dirext democracy are sadly OK with
| overruling the expressed will of the people not to turn
| our home into New York just so some tech billionaires can
| sell more banner ads.
|
| 1. https://en.wikipedia.org/wiki/Central_Subway
|
| 2. https://en.wikipedia.org/wiki/Transbay_Transit_Center
|
| 3. https://en.wikipedia.org/wiki/Eastern_span_replacement
| _of_th...
| arcticbull wrote:
| Well that's just inefficiency or graft. The rest of the
| world is able to achieve far more for far less cost.
|
| > Many commenters with a lot of hatred for San
| Francisco's unique brand of dirext democracy are sadly OK
| with overruling the expressed will of the people not to
| turn our home into New York just so some tech
| billionaires can sell more banner ads.
|
| Who's our? Generally voters tend to be older, wealthier
| and landowners. The large pile of younger, less wealthy,
| more transient renters isn't represented well. I don't
| think the outcome means the system works.
| km3r wrote:
| Buses/light rail can increase the frequency during peak
| hours, a bus full of riders will pay for itself pretty
| easily. Restaurants are about to have access to their
| outdoor dining parklets they have built + their existing
| indoor capacity, which will likely make it much easier to
| find a spot for brunch. Cheaper prices will allow people to
| live closer to work and reduce traffic.
|
| Homeless is a tough one. I'd say that reduced housing
| prices would help, but I think that will just reduce the
| rate of new homeless. I personally thing that we need to
| aggressively force them to seek help or get out of the most
| expensive city in the world. Saving up enough to find a
| place in SF in near impossible, and hacks like homeless
| shelters are often full of crime and reduce the housing
| supply for low income families.
|
| We already fucked up the housing market with prop 13
| throwing off the supply, we need to build a huge supply to
| counter that (unfortunately repealing prop 13 remains the
| 3rd rail in CA politics).
| galimaufry wrote:
| It's a bit of a chicken-or-the-egg problem. If more people
| move to SF then more brunch places will open and the city
| will be able to afford to run more busses.
|
| Maybe SF could credibly commit to adding more density in
| the near future, but not immediately? That way speculators
| open brunch places _before_ the customers arise, and there
| isn 't a brunch shortage?
| kitsunesoba wrote:
| Some of that is solved by dramatically increasing density,
| though. Nobody enjoys long commutes and a lot of people who
| currently drive probably wouldn't drive if they didn't have
| to, so presumably with enough added high density housing
| and public transport capacity traffic could be curbed
| considerably. Rideshare services are a big factor too, but
| that could be resolved by enforcing a cap on the number of
| rideshare vehicles in the city.
| pessimizer wrote:
| Austin has always been expensive, now it's getting
| unbelievably expensive.
| ajmurmann wrote:
| Everyone agrees that more housing needs to be built. The
| problem is that everyone wants it to be built elsewhere. This
| is especially strong in wealthier neighborhood that have the
| resources to influence politics. That's one reason why we
| gentrify poor neighborhood and build nothing in wealthier
| neighborhoods while often times protecting them as historic.
|
| The solution is to remove control from local groups. That also
| would address a huge part of the many committees you need
| approval from to build something which is another massive
| driver of costs and deterrent to build especially cheaper
| units.
| notJim wrote:
| I agree removing local control is a good idea. One way to
| think about it is that there's kind of a game-theory problem
| where we have a bunch of groups that have realized they can
| push a cost to someone else. This results in bad and often
| unfair outcomes, like less powerful (poorer) neighborhoods
| seeing a ton of gentrification. By moving the decision-making
| up a level, we can mediate between the groups to get a fairer
| outcome. There are not magic bullets, and people have to be
| engaged with politics to make this happen, but it _is
| possible_.
|
| I think the other thing that's not talked about enough is
| that building more housing has benefits _for incumbents._ If
| more housing is built in my neighborhood, my neighborhood
| will support more local businesses and other amenities which
| I can enjoy. It also means there are more social connections
| available. Additionally, population growth drives economic
| growth, which ensures that their locality remains vibrant.
| The ideology where we view more humans as strictly a cost,
| and never a benefit drives a lot of problems in our society
| IMO.
| nitrogen wrote:
| _" I agree removing local control is a good idea."_
|
| - Great Britain, to the colonies
|
| You'd better have a really, really darn good reason for
| throwing out democracy. Otherwise this is basically calling
| for taking away what someone else has just because we want
| it.
| notJim wrote:
| The state and national governments are also elected in my
| country, so fortunately democracy prevails! As I said in
| my comment, in my view there are issues that require
| coordination at a higher level, because otherwise it's
| just a game of shoving externalities onto others.
| tenebrisalietum wrote:
| > You can't just keep filling cities with rich people if nobody
| is there to keep them running.
|
| Rich people will just have people they need to keep things
| running live on their own now-very-large properties; and
| arrangements where your workplace also provides your housing
| might start to gain traction.
| nescioquid wrote:
| > Rich people will just have people they need to keep things
| running live on their own now-very-large properties
|
| Comparing that scenario to serfdom is amusing. If the
| property is sold, you could say that the people "come with",
| though they needn't get permission from their Lord to travel
| or move (barring any legal contracts like leases).
| tehjoker wrote:
| This idea is like a plantation or hacienda system or more
| recently a company town.
| gruez wrote:
| What's the advantage in having your company provide housing
| for you compared to buying it yourself? You see it
| happening for health insurance, but the only reason it
| makes sense is because it doesn't count as income so you
| save the taxes. This doesn't exist for housing so it really
| doesn't make any sense.
| tehjoker wrote:
| The advantage is that you have some control over your
| destiny independent of your job. If you piss off your
| boss, you don't lose your house.
|
| All of these ideas to make workers more dependent on
| their benevolent overlords is basically creating a
| subservient population.
| tenebrisalietum wrote:
| None unless you are faced with homelessness or this.
|
| If company X is offering you a job, and you really need a
| job, and it's not enough to pay market rent, but X has
| company dorms available and it will be paid via a line
| item off of your paycheck, you might take it.
|
| Anyone who needs this type of arrangement is likely going
| to get a refund at the end of the year anyway and doesn't
| care about the tax implications.
|
| Amazon could start doing something like this to have
| labor for its warehouses if the housing market keeps
| pricing everyone out, for example. Maybe also office
| maintenance, food prep/delivery, etc. Didn't Foxconn
| house its workers at one point?
|
| These could be the housing projects of the future if done
| at a big enough corporate scale. Would they decay into
| crime-ridden slums or would corporate housing police keep
| things in order, but in a dystopian manner?
| tehjoker wrote:
| There's a few other reasons to own your own place.
|
| 1) I kind of despise the housing market, but you do at
| least earn equity instead of throwing money away to a
| landlord.
|
| 2) If the company owns the place, your rent goes right
| back to your employer, making them an even stronger
| entity.
|
| 3) If you are at risk of losing your house by pissing off
| your boss, it means you'll usually adapt your behavior in
| a variety of ways dramatic and subtle to fit in.
|
| 4) Switching employers means you definitely need to move
| instead of just probably.
|
| 5) It's just a weird vibe when you live in a hive that
| isn't yours and is owned by the same entity that controls
| everything else in your life even if they were
| benevolent. They're daddy and you're baby, except they
| have little interest in you beyond pure self-interest.
| clairity wrote:
| we could escalate tax rates based on the number of housing
| units/square footage owned, which will curtail (but not
| completely prevent) hoarding of real estate. this would
| require spending political capital, and that would require
| some concerted effort by the public as the existing political
| capital holders have a strong disincentive to do so on their
| own.
| ihumanable wrote:
| > San Francisco has seen huge growth but constructed basically
| no new units
|
| San Francisco publishes its Housing Development Pipeline here
| https://sfplanning.org/project/pipeline-report#current-dashb...
|
| They may not be adding capacity at a sufficient rate, but they
| have tens of thousands of units in the pipeline in every
| quarter.
| shuckles wrote:
| San Francisco is producing a fraction of the housing it used
| to in the mid 20th century. Job growth is far greater than
| housing growth. (If the city can make space for office square
| footage, then why not for residential?)
| arcticbull wrote:
| There's a huge spread between the number of new jobs and new
| houses. If you zoom out to the last 50 years it's pretty
| staggering. [1, 2]
|
| [1] https://economics21.org/bay-area-the-land-of-many-jobs-
| and-t...
|
| [2]
| https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
| nickff wrote:
| The fact that there are units in pipeline doesn't tell you
| anything about how many are being completed. As an extreme
| example, they could actually improve the pipeline numbers by
| refusing to grant occupancy on any buildings (which would be
| very bad for prospective residents).
| shuckles wrote:
| Most of San Francisco's housing pipeline is homes on former
| superfund sites and a landfill island in the middle of the
| bay.
| ic0n0cl4st wrote:
| San Francisco is a small city, only 49 square miles, 1/2 of
| which is parkland and a significant portion is landfill which
| liquifies in a serious earthquake. It's also surrounded by
| water on 3 sides
|
| I don't understand why so many HN commenters seem to think it
| could magically become a dense metropolis like Manhattan or
| Chicago.
|
| Even in the Gold Rush in the 1800s SF was unscalable the rent
| was unaffordable. It was _always_ a high crime city. Just
| read about the history of the barbary coast.
|
| Everybody who comes here purely for money wants this city to
| be something it just isn't.
| shuckles wrote:
| It could be three times as populous by developing its
| existing residential land to Paris or Barcelona
| proportions, neither of which have Manhattan's physical
| form. The vast majority of residential land (nearly 80%) is
| unremarkable single family housing.
| ic0n0cl4st wrote:
| Sure, but we don't want that. There is an incredible
| amount of space in the bay area which could be turned
| into droid housing and office buildings. ALL of those
| places have cheaper real estate, fewer homeless people
| (the #2 complaint of everybody here) and warmer weather.
|
| It's 2021 and Covid-19 has shown that remote work is
| viable.
|
| Back in the day large tech companies like Sun, Peoplesoft
| and Cisco built offices all over the bay so that people
| had the option to work at facilities close to their home.
|
| SF wasn't even a significant tech destination before
| 2007.
|
| My wife and I are actually moving to Barcelona when Covid
| is over, under the Non-Lucrative residency permit. If you
| think San Franciscans have a Nimby attitude and hate
| outsiders then you should go visit Barcelona.
|
| "Unremarkabe single family housing". So what, you want to
| take peoples' housing via eminent domain and build more
| of the hideously dugly condo boxes they've stuffed all
| over SOMA and the Missiom?
|
| I happen to _love_ my unremarkable home in the Sunset in
| which my family has lived for 55 years.
| shuckles wrote:
| Great that you love your home. That doesn't mean other
| people shouldn't be able to redevelop their own homes,
| but that's currently illegal. It also doesn't make your
| house or its architecture remarkable or worth preserving
| if you wanted to do something else with the land.
|
| It's quite rude to refer to housing for people as "droid
| housing." What makes you any better than them?
| ic0n0cl4st wrote:
| 3x as dense??????? We are already 17,000 per square mile.
| New York is 28,000 per m^2.
|
| You seriously think San Francisco would be livable at
| 51,000 pe m^2? It would literally cost $500bn in
| infrastructure investment to make that possible just
| inside the city.
|
| 101 and 280 would need to be 15 lames wide each,
| bulldozing 1/8 of the peninsula. We would need a half a
| dozen new transbay bridges and tunnels.
|
| SFO would probably need another couple of runways and
| terminals.
|
| You're talking _trillions_ of dollars in investment
| because tech companies prefer open office spaces to Zoom.
| shuckles wrote:
| Tripling the density of residentially zoned land is not
| the same as tripling the density per square mile. There's
| lots of non-residential land between roads, parks,
| commercial areas, etc.
|
| Why would we need more freeways if amenities are local?
| In fact, we could probably demolish freeways if more
| people who worked in San Francisco could afford to live
| here.
|
| People don't disappear if you don't have housing for
| them. Why is building infrastructure in Phoenix
| preferable to growing it here? There are returns to scale
| with all of this. OAK is underutilized as an airport as
| well.
|
| Have you considered that San Francisco is a pleasant
| place to live, and people want to live here independently
| of their employment situation? Prices were high before
| technology employment.
| asdff wrote:
| Koreatown in los angeles is a bit more than 1/3 the size
| of SF and achieves 42,000 per mile and is basically a mix
| of single family homes and 3-5 story apartments over
| parking. There is a subway that comes every 10 minutes.
| The 101 through here is not 15 lanes wide each, it's 4.
| The city still functions at this density, and could
| probably stand a lot more and function just as well.
| tick_tock_tick wrote:
| I think this pipeline easily qualifies as "basically no new
| units".
| chubot wrote:
| _San Francisco has seen huge growth but constructed basically
| no new units_
|
| I've lived in SF for over 15 years -- this is obviously false.
| You could argue "not enough" units, but if you haven't seen new
| construction of multiple large buildings in multiple
| neighborhoods (Hayes Valley, Mission, SOMA, Market st., Potrero
| Hill, Mission Bay), then you haven't been in SF.
|
| Literally walking around on the street, you can see thousands
| of new units. There was a pretty big uptick sometime around
| 2014 or 2016 as well. That said, prices are still the about
| highest in in the nation from what I can see.
| Ccecil wrote:
| I see this problem currently coming to a head in my area (Coeur
| d'Alene, ID) We have long been a destination area for people
| looking to escape the cities but in the last year we have had
| 33-50% increase in housing prices (limited inventory seems to
| be the driving factor coupled with the urban flight).
|
| Rental prices are to the point where even apartments are out of
| range for the average person who lives here. If you rent they
| want your income to be 3x your rent price. So currently if you
| are a single individual looking to rent that means you need to
| earn ~$36k/year to be eligible (also, a clean criminal and
| financial record as well). Issue is the minimum wage is
| $7.25/hr still...and if you work foodservice they can pay you
| ~$3.50/hr because your tips offset it.
|
| We have a steady influx of people buying houses at over the
| already inflated asking cost because it "seems cheap" to them
| compared to where they live. What they do not realize is that
| if they lose their remote job (or if their pay is scaled to the
| region) they will have little/no chance of finding employment
| locally which will pay the amount they need to simply "live".
|
| About 4 years ago University of Idaho released a study saying
| that 22% of the people living in this town cannot afford to do
| so...I wonder what that rate is now. I am starting so see more
| and more people sleeping in cars parked near the recreational
| areas and parking lots. Tons of multi family houses. Things are
| going to get bad really soon.
|
| I can't speak for every area of the country...but in our case I
| suspect a large part of this is the waves of real estate
| investors who came through in the last couple years to buy up
| homes and are leaving them vacant (or vacation rentals). It
| seems like inventory is being artificially limited. To the
| people investing it is a win-win...either the house is vacant
| and you make a ton of money...or it gets rented as an airbnb
| for $3k/mo and they make even more. I suspect if they were to
| impose a 2x property tax on any property vacant for more than
| 6mos or vacation rentals it would very quickly effect the
| issues we are facing...but being as this town was structured by
| the tourism/real estate industry I do not see much hope.
|
| https://cdapress.com/news/2021/feb/22/housing-market-heats-n...
| closeparen wrote:
| What is going on with your local economy such that you can
| equate "average person" and "minimum wage" like this?
| Ccecil wrote:
| Most people I know in town make $10-20/hr. There is a
| startup scene here but most of those companies either use
| interns or pay less than $20/hr.
|
| There is a large portion of the population in jobs like
| nursing, banking, tourism or real estate but they are not
| the ones who are doing the jobs we are talking about.
|
| Who is going to serve/cook the food? Where will they live?
|
| Teachers make $29-49k in my area. Nurses $39-68k. (based on
| glassdoor).
|
| Average hourly rate is $17.39 (payscale.com)
|
| If you work 2000hrs/year your pre tax income is ~$35k.
| Right now there are 1bd apartments going for $1100/mo
| (albeit brand new with amenities such as pool/weight room).
|
| So if you are lucky enough to make the "average" pay in the
| area that means you can get a 1bd apt...assuming you
| qualify. A very low end house you need to make $75k/year to
| purchase...again assuming you qualify.
| samsonradu wrote:
| > So if you are lucky enough to make the "average" pay in
| the area that means you can get a 1bd apt...assuming you
| qualify. A very low end house you need to make $75k/year
| to purchase...again assuming you qualify.
|
| I think in many parts of western Europe average earners
| can't even afford a 1bd apt.
| akiselev wrote:
| I believe he means that if you were to randomly pick people
| from the working population (excluding children, disabled,
| unemployed, etc.), there is a 50% (or higher) chance that
| person makes minimum wage.
|
| Extreme inequality combined with familial support. It's not
| uncommon now to have one or more kids living with the
| parents into their 20s while they go to college and build
| up their career, right as the homemaker enters the
| workforce with limited professional experience so you get
| 2+ minimum wage earners and one established professional
| bringing in support. Throw in the gig economy, which hoists
| capital and operational risk onto the employees (sorry,
| "contractors"), and you've got a majority of the working
| population making minimum wage.
|
| It's even worse in university towns, where the college kids
| are almost guaranteed to be working for minimum wage while
| receiving external funding from loans or parents which can
| skew the numbers even more.
| closeparen wrote:
| That's what I mean! On average this number is less than
| 3%. If it's managing to be 50% here, what is going on
| here to make the local economy so staggeringly poor? What
| does a place this devastated have to offer if the housing
| is not even cheap?
| Ccecil wrote:
| It is semi remote...but still has the "city stuff". Very
| beautiful area, year round recreation assuming you enjoy
| winter sports.
|
| But it is a right to work state. I suspect that is part
| of the issue. There is very much a "Good ol' boys club"
| in town which has a tendency to employ people due to
| favors or connections (regardless of qualifications).
|
| Even in the 90s when we had Agilent, Itron, and several
| other large companies in Spokane the area directly across
| state line was significantly cheaper to operate in. So we
| ended up with a few electronics contract manufacturers
| who got their start being basically sweatshops
| (yes...solderers get started out at minimum wage or
| barely above it).
|
| I know a person who in the 90s was making $50/hr as an
| EE...last I heard he was making $25/hr to do the same job
| now. (When Agilent shut down it flooded the local market
| with engineers and techs).
|
| edit: Adding this link for more data. Look at the
| percentage of renters below poverty level
| http://www.city-data.com/poverty/poverty-Coeur-d-Alene-
| Idaho...
| RIMR wrote:
| Out of the 155.75 Million working Americans, 80.4 million
| make minimum wage. That's 51.6% (a majority) of workers
| making minimum wage.
|
| So yeah.
| rsj_hn wrote:
| _You are off by a factor of fifty_. That 's like
| confidently announcing that US median household income is
| 3.4 million, or declaring that the US has a population of
| 16 Billion people. How do you react when people hold such
| crazy views?
|
| Here is a recent BLS study called "Characteristics of
| minimum wage workers"
| https://www.bls.gov/opub/reports/minimum-
| wage/2019/home.htm
|
| "In 2019, 82.3 million workers age 16 and older in the
| United States were paid at hourly rates, representing
| 58.1 percent of all wage and salary workers. Among those
| paid by the hour, 392,000 workers earned exactly the
| prevailing federal minimum wage of $7.25 per hour. About
| 1.2 million had wages below the federal minimum.
| Together, these 1.6 million workers with wages at or
| below the federal minimum made up 1.9 percent of all
| hourly paid workers."
| ultrasaurus wrote:
| Just eyeballing it looks like only 25% of the US
| population lives in states where the federal minimum wage
| is also the prevailing minimum wage:
| https://www.dol.gov/agencies/whd/minimum-wage/state
|
| So I'd guess closer to 10% of people make the minimum
| wage in their jurisdiction (1.9% x 4 + I assume more
| people make min wage when it's higher)
|
| Very interesting though that 3x as many people make below
| the min wage as actually earn the "minimum" wage.
| rsj_hn wrote:
| Those below the minimum wage are exempt workers such as
| waiters because they earn tips, and I guarantee you that
| their real income (on average) is much higher than
| minimum wage, but data is hard to come by as much of that
| income is unreported. Thus the 2% figure is a generous
| over-estimate.
| SpicyLemonZest wrote:
| That isn't true. In 2017, 80.4 million Americans were
| paid hourly, and out of those only 1.8 million made
| minimum wage or below.
| (https://www.bls.gov/opub/reports/minimum-
| wage/2017/home.htm#)
|
| More generally, I'd encourage you to question the mental
| model that made this sound like a potentially true claim
| in the first case. An economy where most people are paid
| minimum wage would be incredibly different than the one
| we actually have.
| closeparen wrote:
| Per BLS, 80.4 million workers make _an_ hourly wage, with
| 1.8 million at or below at the federal minimum. [0]
|
| It is kind of fascinating that people have such wildly
| different ideas about what the objective facts are, and
| how that must flow downstream into their worldviews and
| politics. Between 51.6% and 2.3% is not a small
| difference! Those are very different worlds we could be
| living in!
|
| [0] https://www.bls.gov/opub/reports/minimum-
| wage/2017/home.htm#....
| A4ET8a8uTh0 wrote:
| It is fascinating and horrifying at the same time. On the
| one hand, I am hoping the person was simply quoting
| something they heard in a rant online. On the other hand,
| I am hoping it is just a case of misreading available BLS
| data. Neither is exactly ideal and both paint rather sad
| picture of how we interpret reality.
| AmVess wrote:
| It is bad in a lot of places. A starter home less than 10
| years ago was $75k. Now it is $300k without an increase in
| wages for people starting out or working less technical jobs.
|
| The housing pinch has already hit Twin Falls if you can
| believe that. One would have to move all the way to Idaho
| falls to know what it was like in the Boise area 10 years
| ago.
| Ccecil wrote:
| Idaho in general is getting hit hard. Montana will be next
| once things like Starlink take off. The primary limitation
| to living out in the middle of nowhere has been commute to
| high paying jobs.
|
| I wonder how many people would move to Coeur d'Alene if
| they would have made the lake a superfund site...like they
| did the Silver Valley which drains into it. The whole
| bottom of the lake is heavy metal contaminated...but they
| don't show you that in the real estate ads. :)
| nbardy wrote:
| Without an increase in wages. And economic instability
| causing lost jobs, as well as increasing rip stripping away
| earning power.
|
| I make a lot of money as a software engineer and I don't
| think I'll get a home until I'm 45.
| ctdonath wrote:
| How much of that is attributable to increased/tightened zoning
| regulations? Cheap & reasonable options are simply illegal in
| many cases.
|
| How much of that is attributable to reaching/straining/exceeding
| regional carrying capacity? More people competing to live in the
| same area raises prices.
| cletus wrote:
| I think there are several problems here:
|
| 1. While it's important to have private investment in property
| because this literally creates the housing units people rent,
| there's simply too much speculation here. I like the Swiss model
| that is way more restrictive of who can invest (as in, someone
| can't come in and buy up all the land in Switzerland) and
| punishing to short term speculation;
|
| 2. Foreign "investment". Investment here is a euphemism. "Money
| laundering" is probably closer to the truth. Example: every US
| tax resident is required to declare all foreign assets (including
| being a signatory in a foreign company or trust) but... real
| estate is specifically excluded. Why? It's well known that in
| places like London, property is used to hide and park money by,
| for example, Russian oligarchs;
|
| 3. Property owners who are non-residents where they own property
| should be taxed at a much higher rate. Places are simply way
| better off if the people who live there own the property there;
|
| 4. Incumbents vote themselves massive tax breaks. This applies to
| both property owners and renters. Case in point: Prop 13 in
| California (eg Disney still pays 1970s tax rates on Disney Land,
| for example). Oh and rent control;
|
| 5. NIMBYism. People on HN like to paint this as the boogeyman. I
| think this is somewhat overblown;
|
| 6. Subsidies for car ownership. Building out requires more
| infrastructure (eg roads, schools, utilities). Suburbs are
| subsidized by the taxpayer;
|
| 7. Attacks on public transportation. For example, Santa Monica
| trying to fight the LA rail extension into Santa Monica (because,
| you know, that'll bring undesirables into the area). Sometimes
| this is done for pseudo-political but self-serving reasons
| ("it'll raise taxes!"). This exacerbates other problems;
|
| 8. General opposition to allow and opposition to living in higher
| density housing.
|
| That all being said, I see the pandemic as helping to reverse the
| trend towards the move to a few urban centers. This is a boon for
| medium-sized regional centers and ultimately a good thing for a
| couple of reasons: it increases choices and cities beyond a
| certain size just... stop working. More cities under 2M people
| would be better than more cities of 20M people.
| whimsicalism wrote:
| The reality on number 2 is that people in the US actually _do_
| benefit from elites in other countries viewing the US as a
| place to exfiltrate the wealth they 've acquired in their
| origin country.
|
| We are basically a fence for the plunder of the developing
| world.
| nbardy wrote:
| Only the asset holding class benefits, but it slams the
| working class.
|
| As foreigners drive up asset prices it becomes more expensive
| to acquire equity in your society as the rich get richer.
| onlyrealcuzzo wrote:
| What is the Swiss model? I was under the impression that the
| average house in all of Switzerland costs over $700/sqft. Los
| Angeles, for example, is around $500/sqft.
|
| Additionally, my understanding is that median income in
| Switzerland is like ~70% of what it is in Los Angeles.
|
| Is this not correct? This seems far from ideal.
| technofiend wrote:
| I did attempt to read the paper but it's $400. It would be
| interesting to see where Houston falls in all this. The city has
| nearly zero zoning laws and has continually grown at the edges
| for the last several decades and has also traded single family
| lots for higher density housing in the inner and near city. In
| other words for people who say "well just let you develop more"
| it's happened here.
| ska wrote:
| Houston is an interesting data point in all this because
| (partially due to geographical luck) it does seem to a) be a
| form of solution to this problem that (b) many people will
| consider terrible and (c) other people will love. Mostly
| because even though it is not zoned much, most of the areas are
| basically interchangeable; you either like it or don't.
| bob1029 wrote:
| Houston is somewhat of a unicorn in this mix. To say the city
| has no zoning laws really only implicates a very small portion
| of the logical geographic area in the urban center.
|
| The world-record sprawl (and commute times) of Houston are how
| the housing prices have historically been kept in check.
|
| As someone who is actively working to find a home in this
| market, I can say for certain that these measures are no longer
| sufficient. Houston has a few unique hedges to the scalability
| problem, but it won't hold up to larger forces such as mass
| migration from other states.
|
| Prices in the Houston market are still not within a range that
| would concern a Google employee, but for everyone who lives in
| the state and is receiving Texas-style wages, these prices
| might as well be as unattainable as housing in Manhattan or
| Silicon Valley.
| analyte123 wrote:
| Reporting of low house prices in the city limits of Houston
| is a bit of an illusion, true, because the city limits expand
| to many low density suburban areas that can have an hour
| commute to downtown in traffic. And there definitely several
| neighborhoods where one can participate in California-style
| bidding wars with other rich folks -- if you want a safe,
| walkable neighborhood close to the city center next to a good
| elementary school, expensive salons, and several fine sushi
| places, you will pay a lot. However, in Houston you always at
| least have the _option_ of buying a cheaper house farther
| away. That 's not even to mention the _rents_ , which as far
| as I can tell have barely budged in the past 6+ years.
| bob1029 wrote:
| Agreed on rent. It is holding really stable, but that will
| change once investors run out of $200~300k houses to slurp
| up. We are getting to the end of the song as far as I can
| tell. Last house I looked at under $300k had over 50
| offers.
| technofiend wrote:
| > if you want a safe, walkable neighborhood close to the
| city center next to a good elementary school, expensive
| salons, and several fine sushi places, you will pay a lot.
| However, in Houston you always at least have the option of
| buying a cheaper house farther away.
|
| Yes if you wait for others to gentrify a neighborhood
| you'll pay the price. The third option is to take a risk
| and be an early adopter in an inner city neighborhood.
| Midtown used to be shotgun shacks that dated back to late
| 1800s. Now it's a sea of condominiums. East of Downtown
| (aka EaDo) was post-wwii starter homes and industrial, it
| too is now townhomes and condos. Third Ward (my
| neighborhood) was a mix of rental property and retirees and
| now has high and medium density housing mixed with condos
| and townhomes which are slowly pressing East towards TSU
| and U of H. The same happened to Moody Park area and Acres
| Homes is next.
| technofiend wrote:
| >Houston is somewhat of a unicorn in this mix. To say the
| city has no zoning laws really only implicates a very small
| portion of the logical geographic area in the urban center.
|
| I'm not quite sure what you mean: Houston's city limits span
| 667 square miles! That's not a very small portion in the
| urban center. It's true that there are a few pocket cities
| embedded in the city that may have different zoning laws:
| Piney Point, Bellaire and West University, but Houston
| relentlessly grew through annexation until it was slowed by
| lawsuits. It still continues to grow though annexations...
| see [1]
|
| https://www.houstontx.gov/planning/Annexation/docs_pdfs/Hous.
| ..
|
| I also disagree about home prices being unattainable; I think
| implicit in your statement are assumptions about schools,
| neighborhood walkability and the like. There are plenty of
| places that aren't yet ideal but are far cheaper. In my zip
| code there are plenty of listings for houses and lots in the
| $100k range but at the top of the market there's a mansion
| for $2.1 million. Best of luck in your search for something
| with your criteria.
| itronitron wrote:
| Is there a formal definition for what '175% faster' means?
|
| Does '100% faster' mean its the same speed or twice the speed? Is
| '175% faster' 1.75X, 2.75X, 175X, or something else entirely?
| rsj_hn wrote:
| This is a poorly executed study that is factually incorrect.
|
| Here are the facts:
|
| * Median (household) gross rent in 2000 was $602 (1) or $7224 per
| annum
|
| * Median (household) gross rent in 2019 was $1097 (2) or $13164
| per annum
|
| That is an increase of 182% for rents over the period.
|
| * Median household income in 2000 was $42,148 (3)
|
| * Median household income in 2019 was $68,703 (4)
|
| That is an increase of 163% for incomes over the period.
|
| So while its true that rents have increased faster than incomes,
| saying that rents increased 175% faster than incomes is false.
| Rents increased roughly 20% faster than incomes over the same
| period.
|
| More importantly, affordability (e.g. median income/median rent)
| decreased from 5.8 to 5.2, which is a decrease of 10%.
|
| (1) https://www2.census.gov/programs-
| surveys/decennial/tables/ti...
|
| (2)
| https://www.deptofnumbers.com/rent/us/#:~:text=Average%20gro...
|
| (3)
| https://www.census.gov/library/publications/2001/demo/p60-21...
|
| (4) https://www.census.gov/library/stories/2020/09/was-
| household....
|
| I've noticed a lot of these poverty-porn pieces that wildly
| exaggerate how terrible things are, and at this point I'm not at
| all surprised to see this type of misinformation in Academia,
| which has long ago crossed into crusading territory. If you want
| to know what the various tricks are that advocates use to inflate
| these figures, here is a brief listing:
|
| * confusing _asking rents_ with _rents paid_. Particularly in
| cities with rent control, there is a huge gap, which is why you
| need to use census data on rents actually paid. I suspect this is
| the trick used in the current study. In addition to rent control
| factors, note that there is always a difference between price
| paid and asking price when you look at boards like Zillow or
| craigslist because cheap goods are taken off the board quickly
| while more expensive goods linger.
|
| * Household versus personal income. E.g. look at personal wages
| and compare that to household rents.
|
| * Playing games with boundaries. E.g. is a city the legal limit
| or is it the MSA? You should always use MSA (that is why they are
| statistical areas) to get closer to an apple to apple comparison.
| The 50 largest MSAs would be 180 million people and would not
| have median affordability ratios much different than the nation
| as a whole. But looking at craigslist adds for downtown areas
| would yield a different story.
|
| * Making inappropriate comparisons. E.g. comparing a large MSA to
| a small town.
|
| * Games with real and nominal incomes. E.g. I've seen people
| compare real to nominal incomes, or talk about "real" rates
| without adjusting for inflation.
|
| * mixing _average_ with _median_. Median should be used in
| distributions with fat tails or if you are interested in middle
| class questions. I 've seen this abused a lot.
|
| * Doing things like taking percentages of percentages when the
| base is small. E.g. the number of blind people electrocuted in
| their swimming pools is up by %1000!
|
| * Strategically chosen start and end-dates. It's important to use
| peak-to-peak business cycle comparisons rather than trough to
| peak. Especially as we know that things like rents and home
| prices are more volatile than incomes (which are famous for being
| more downward sticky). Always ask yourself what the economy was
| doing at the start and end points.
|
| * Ambiguously wording statements to get a big number. E.g. the
| rate of increase of X is %175 faster than Y! What does that mean?
| That the compounded growth rate of X is 1.75 that of the growth
| rate of Y? Or that the total increase of X is 1.75 times the
| total increase of Y? This type of strategic ambiguity is used to
| make false claims that are hard to pin down.
| telaelit wrote:
| Lots of talk here in the comments about supply and demand, cool,
| I get it. But how about we worry about that after everyone has
| access to a stable shelter that they can live in. Housing should
| be a human right, nobody deserves to live on the streets or have
| to fork over all their money in order to be housed and have to
| worry about putting food on the table. The obsession with
| investments, wealth, and power is leading to people suffering. So
| how about we stop obsessing about investments, wealth, and power
| until everyone can live their life with dignity and not have to
| worry if they'll have to sleep in the gutter or not.
| cammikebrown wrote:
| Remember when San Francisco (and the Bay Area in general) had a
| bunch of bands and artists? There's a couple, but not anything
| like it was 20 years ago. It makes me sad. There's more market
| rate housing, and a little bit of very low income housing, but
| for those not in tech, it's tough. If you make six figures, you
| can find a place to live in the Bay. It may be small or run down,
| but if you make the median personal income, $52k, you're pretty
| screwed without spending at least half your take home pay on
| rent.
| ahelwer wrote:
| For housing, a lot of people in tech seem to come down firmly in
| the "build, baby, build!" camp to increase supply. I think demand
| should also be suppressed. Specifically, I think there should be
| a policy barring people from owning more than, say, two housing
| units. Our society should not support parasitic landlords buying
| up huge swaths of housing then renting it out to people for the
| right to half their monthly paycheck. Berlin is headed this
| direction and I'm very interested to see how it shakes out:
| https://www.independent.co.uk/news/world/europe/berlin-landl...
| mtalantikite wrote:
| Yeah, I've been curious to see how Berlin ends up myself. It
| does seem weird that as a society we don't question the premise
| that it's ok for people to buy up as much real estate as they
| want. People will argue that the landlord is taking risk and
| supplies services, which is true to some extent, but also seems
| out of whack from literally every apartment I've ever lived in.
|
| One landlord in Chicago never kept the heat on, or rather
| claimed that our unit was at the end of the heating line and it
| just didn't get very hot, they couldn't do anything about it.
| That was a cold winter. Another in Brooklyn would never fix
| anything, at all, and if they did it was because the ceiling in
| the bathroom had a pipe flooding us or some other emergency
| they couldn't ignore.
|
| There's probably a middle path between owning dozens of units
| and only owning the building you live in.
| leetcrew wrote:
| on the flip side, I would question the premise that owning
| the building you live in is a good thing to begin with. why
| is it good for people to have so much of their wealth tied up
| in a single property? why is it good for people to experience
| so much friction in moving around and trying different
| neighborhoods/cities?
|
| imo the american obsession with homeownership is the root of
| many of our problems. I also notice a common theme in these
| comments. most of the complaints about landlords seem to come
| from people who rent older units in highly desirable cities.
| my renting experience in a cheaper city with lots of new
| buildings has been quite different.
| lm28469 wrote:
| > There's probably a middle path between owning dozens of
| units and only owning the building you live in.
|
| The problem isn't individuals owning a few units. It's big
| players owning thousands if not hundred thousands flats.
| Publicly traded companies, with investors waiting for
| returns/profits, very often foreign investors even...
|
| I really don't like where this is going and frankly I have a
| hard time understanding how we came this low.
|
| https://translate.google.com/translate?sl=auto&tl=en&u=https.
| ..
| jtr1 wrote:
| It'd certainly be a radical shift in a place like the US, but
| it's not hard for me to imagine public opinion taking a hard
| turn against the practice. There's no a consistent, visible,
| widely understood value added by landlords. In theory, it's
| that rental units incentivize new development. But when you're
| paying half your paycheck for a 100 year old home (true in a
| lot of the NE), it's hard not to feel like you just arrived
| late at a game of monopoly. Personally, I wonder what would
| happen if you passed a law that traded all these affordable
| housing requirements on new development for a ban on owning
| more than 2-3 homes older than threshold of years.
| heartbeats wrote:
| They bear the risk of prices going down. If I rent a $100k
| condo, and the housing market goes down 10%, I don't owe my
| landlord an additional $10k. (Schematically, my rent even
| goes down 10%).
| benchaney wrote:
| Landlords don't create demand, they convert one type of demand
| to another. One of the reasons that increasing supply is such a
| popular idea is that there is no practical way to truly
| decrease demand. Everyone who is alive needs somewhere to live,
| and many populous areas simply have more people who want to
| live there than places for them to live.
| clairity wrote:
| while mega-landords are a real problem, nationalizing their
| housing stock is a relatively poor solution. it has a lot of
| sociopolitical and economic repercussions that are unlikely to
| be net-positive in the long run.
|
| i'll repeat a simpler solution i posted about elsewhere [0],
| which is to escalate property tax rates based on number of
| units and/or square footage, which would be a type of pigovian
| tax similar to a land value tax (which could in fact augment
| the escalating tax idea). a happy medium in my mind would be to
| allow a landlord to own a few (occupied) units without much
| escalation, but once ownership gets much beyond ~100 units, it
| escalates fairly quickly, so that only the most lucrative
| buildings (likely tall, perhaps mixed-use, buildings in highly
| desirable areas) are worth owning outright.
|
| [0]: https://news.ycombinator.com/item?id=26595513
| psychiatrist24 wrote:
| "Parasitic landlords" - again and again, I have to point out
| that this kind of formulation is hate speech. It is also just a
| leftist conspiracy theory. And by the way, since I will be
| downvoted or banned anyway: this was the same angle the Nazis
| used against the Jews, who often happend to be rich because
| employment laws had pushed them into the banking business.
|
| If you are unhappy with the rent a landlord is asking for,
| don't rent their house. It is really that simple. You could
| even buy your own house. And spare me the "many people can't
| afford it" line. You can move to a cheaper area, and pool money
| with your socialist friends. Germany also gives special help
| for poor people for buying houses.
| 8note wrote:
| Nobody is forced into being a landlord?
| psychiatrist24 wrote:
| How would you propose building a nest egg for retirement?
| Real estate has traditionally been one of the ways. You can
| look for other ways, but more and more are being shut down
| by the government. Providing housing is a service like any
| other.
| leetcrew wrote:
| you would really enjoy r/LoveForLandlords
| psychiatrist24 wrote:
| It's not about landlords, it is about the encroaching evil
| of socialism.
| lm28469 wrote:
| > hate speech
|
| > leftist conspiracy theory
|
| > this was the same angle the Nazis
|
| > socialist friends
|
| I think you spend too much time on the internet...
|
| Your arguments make me think of mine when I was 15 and didn't
| know shit about the real world. No you shouldn't have to
| restart your social/professional life and move to somewhere
| cheap to afford an house. Min wage people in Germany will
| never own a house no matter how much help they get from the
| state (and most of the help is to help pay rent afaik)
|
| A lot of people can barely afford living in their home town
| and your answer basically is "just move to a small town in
| the middle of nowhere"
| psychiatrist24 wrote:
| It's you who doesn't know shit about the world. I live in
| Germany. The "Jews are parasites" angle is literally what
| the nazis used.
|
| There are still many cheap places in Germany. Most people
| move to where their jobs are, which implies their jobs pay
| enough to pay the rent. The socialists who want to get the
| buildings for next to nothing here are mostly unemployed,
| so they could as well collect their unemployment cheques in
| the countryside.
| lm28469 wrote:
| I live in Berlin.
|
| So you're saying people are moving to places for jobs,
| but they also are unemployed and the "socialists" are
| mean because they want to afford a basic human need
| without spending 80% of their min wage allowance ?
|
| I can't even tell if you're memeing or not so I'll leave
| it at that. If you're not trolling you should spend less
| times on the internet, it would do you good, you sound
| like an alt right twitter account stuck on loop
| heartbeats wrote:
| > A lot of people can barely afford living in their home
| town and your answer basically is "just move to a small
| town in the middle of nowhere"
|
| Isn't that the inalienable consequence of society? People
| that can add a lot of value will get to live in the
| desirable areas, whereas people who can't will have to move
| elsewhere. Do people have a right to live in their home
| town? What if their home town is a global financial center?
| psychiatrist24 wrote:
| To have a right to live in your home town, you should buy
| land. That is the traditional meaning of right to live
| somewhere, to own the land.
| lm28469 wrote:
| The famous "I'm gonna ask stupid questions to make it
| sounds like I'm right and there is no other way"
|
| Your "society" is made of people and rules, people make
| choices, people vote for rules, if enough people tells
| you their situation sucks it might swing the pendulum in
| the other direction. "life is life" has never been a very
| strong line to defend.
|
| At some point we'll have to go back to being human and
| stop considering money as the main driving force of every
| single things we do in life.
| psychiatrist24 wrote:
| Yeah in nazi Germany many people were fed up with the
| Jews, so they started the Holocaust. By your logic, that
| was OK, because it was the will of the people.
|
| First time I learned that turning nazi was just "becoming
| human". OK.
| km3r wrote:
| Parasitic landlords is just as fair as parasitic mask
| hoarders. Land is a limited resource and you are abusing your
| capital to extract rent. Then you use your votes to make it
| harder to build (zoning laws) or more expensive for the next
| person (prop 13). Many landlord hire a property manager and
| literally have to do nothing but collect a check. Housing is
| an essential item, like healthcare, water, and food. It
| should not be hoarded sorry.
| psychiatrist24 wrote:
| So essentially, if you own anything, and don't give it away
| for free, you are a parasite?
|
| There is plenty of cheap land available everywhere. Berlin
| from the OPs story was very, very cheap 20 years ago, but
| then the socialist didn't want to buy. They preferred to
| enjoy the cheap rents. The government even sold most of the
| social housing. Now that it has gone up in value, they want
| to have their shares, risk free.
| DC1350 wrote:
| People of Land are not a protected class
| enlyth wrote:
| Yeah you don't have to rent their house, just live on the
| street. It's that simple.
|
| Or just move somewhere where you won't find work. Or buy a
| house like you say, with money you inherited from your rich
| parents.
|
| Can I subscribe to your newsletter? It's the best comedy I've
| heard in years
| psychiatrist24 wrote:
| If you can't afford the rent, your work is shit anyway, and
| you might as well move. The other question is how you
| managed to move where you live now to begin with.
|
| There are places where you can get land for free. If you
| band together with your socialist friends, you could turn
| that into the next glamorous megacity.
| Apocryphon wrote:
| > The other question is how you managed to move where you
| live now to begin with.
|
| https://www.investopedia.com/terms/p/priced-out.asp
| ookblah wrote:
| anecdotal, korea tried this and it's been a disaster lol.
| JamesBarney wrote:
| This would have the exact opposite effect. House + Landlord =
| Rentable unit. If we reduce the number of landlords we reduce
| the number of rentable units. Driving rent prices up quite a
| bit, and driving housing units down a little.
|
| Imagine instead we restricted the number of rental units you
| could own to 0 instead of 2. It would mean that you couldn't
| rent at unit at any price, driving the price to essentially
| infinite.
| paxys wrote:
| Even before that, an obvious loophole that can be fixed (that
| too with popular support) is blocking foreign investors who
| never intend to live in a property, and don't even have the
| legal right to work in this country, from buying it.
|
| There are very few countries in the world that allow just about
| anyone from anywhere to buy a piece of land within its borders
| and own it forever.
| swiley wrote:
| So what do people like me who _don 't_ want to own a house do
| then?
| thehappypm wrote:
| I think you have this backwards. Landlords increase housing
| supply, not increase demand. Also they charge what the market
| bears; they're exactly as parasitic as people are willing for
| them to be.
| WarOnPrivacy wrote:
| > Landlords increase housing supply
|
| Housing supplies increase when developers build new housing.
| Landlords would seem to be a fairly small component in that
| equation.
| thehappypm wrote:
| I own a condo in Boston. Someone new comes to Boston and
| sees there are 100 rental units on the market. I decide to
| move and become a landlord. Someone new comes to Boston and
| now sees 101 rental units on the market. By moving away and
| becoming a landlord I've put another rental into the supply
| side.
| jogjayr wrote:
| > By moving away and becoming a landlord I've put another
| rental into the supply side.
|
| The supply didn't increase. Demand reduced, because you
| moved away.
|
| By your logic, if I stop eating hamburgers I've increased
| the supply of hamburgers.
| [deleted]
| WarOnPrivacy wrote:
| That's a pretty good example of near negligible impact.
| fabianhjr wrote:
| > Also they charge what the market bears; they're exactly as
| parasitic as people are willing for them to be.
|
| That is very similar to this quote of Smith:
|
| > The rent of land, therefore, considered as the price paid
| for the use of the land, is naturally a monopoly price. It is
| not at all proportioned to what the landlord may have laid
| out upon the improvement of the land, or to what he can
| afford to take; but to what the farmer can afford to give.
| (Adam Smith, op. cit., p. 131)
|
| > Rent, considered as the price paid for the use of land, is
| naturally the highest which the tenant can afford to pay in
| the actual circumstances of the land. (Adam Smith, op. cit.,
| Vol. I, p. 130)
| notJim wrote:
| Anecdotally, I see a lot of "small time landlords" opposing
| upzoning around the PNW, so in that sense they are very much
| not increasing housing supply.
| nbardy wrote:
| That's true in a fair market. But when you are born into a
| system where all the housing is owned and the asset pricing
| is kept inflated at the expensive of your purchasing power.
| That's a different situation.
| davidw wrote:
| If you want to help improve the situation, there are a lot of
| groups working on it. https://yimbyaction.org/ is a pretty good
| place to start.
| victor106 wrote:
| At least in urban areas covid is a big hit.
|
| One of my friends was paying 3600USD per month in a brand new
| luxury building for a one Ben in the heart of Manhattan. After
| covid he's paying $2600 per month in the same building same
| apartment. The apartment also paid the moving costs for new
| tenants to move in.
| ethanbond wrote:
| Same landlord? Same building?
|
| Wow, it's almost as if people aren't paying for landlords and
| their buildings. Almost as if people are paying for access to
| communal amenities like jobs, public transit, education,
| restaurants, other cultural centers.
|
| Almost as if landlords don't deserve a massive cut of something
| they had no hand in producing...
| WarOnPrivacy wrote:
| Much of this can be laid at the feet of local policies that
| exclusively nurture wealthy development.
|
| ref - my comment: https://news.ycombinator.com/item?id=26594672
| asdff wrote:
| It blows my mind that people can read this headline and not be in
| favor of rent control, which is a cap of rent increase of say 4%
| in year in effort to keep rents from running away from inflation.
| What is anyone to do if the default is that you will be priced
| out otherwise? Move farther and farther and farther from your job
| cleaning a downtown office? When is enough? When it's a 4 hour
| bus ride and you only have time to go immediately to sleep when
| you get home?
|
| It's not sustainable when landlords are only incentivized to take
| as much as humanely possible from their tenants. The median
| worker already coughs up 45% of their wages to their landlord in
| Los Angeles. Eventually there won't be any more to squeeze; the
| working poor are already living on top of eachother in crampt
| apartments. Skilled laborers go begging for work in home depot
| parking lots while infrastructure falls apart and needed homes
| fail to get built, what a country.
| IkmoIkmo wrote:
| If there's a shortage of bread, prices of bread will go up. The
| price is a symptom, the problem is not the price, it's the
| scarcity. Prices are simply an expression of scarcity.
|
| The worst thing to do if there's a shortage of bread and
| thereby a shortage of bread bakers, is to put a cap on bread
| prices and reduce the bakers' incentives.
|
| If there's issues of inequity (e.g. the poor being unable to
| afford bread) then you can tax the general economy
| progressively (taxing the rich the most), and then redistribute
| money to the poor, subsidising their purchase of bread. This
| equalises consumption, but it does not artificially lower
| prices with a cap, thereby keeping incentives to bake bread
| high, which is the primary way to addressing the scarcity.
|
| Rent subsidies and income redistribution, sure, but rent caps
| aren't necessarily great instrument.
| aurizon wrote:
| Of course it has. There is no business tax if you buy a house and
| rent it, you are taxed on profits, but there is only the normal
| residential tax = zero business tax. This has caused huge numbers
| of rent seekers to pile into retail rentals as interest market
| rates are far lower than rental returns. Tax all rentals with
| both normal realty taxes PLUS tax each unit with a business tax -
| same as a shop. The rent seekers will flee, and people who want
| to live there will buy them. Very sound economic logic.
| ChrisLomont wrote:
| >There is no business tax if you buy a house and rent it
|
| Rental properties pay property tax whether or not the business
| is profitable, and if the business is profitable, then the
| profits are also taxed.
| souprock wrote:
| Suppose a square city has 100000 rental houses, and they all rent
| for $1000. The city triples in each direction, causing area to
| increase by a factor of 9. The original houses now rent for
| $4000, but there are 800000 new houses that rent for $1000.
|
| Is that an increase of 0%, 33%, 300%, or something else?
|
| Suppose the original homes then increase to $5000, while the
| newer homes drop down to $500. Is that an increase or decrease?
| letsgoyeti wrote:
| In your first scenario, the average rent has gone from $1000 ->
| $1333, so I'd say a 33% increase.
|
| In your second scenario, the average rent has not changed.
|
| If this supply change happened over a century, a 33% increase
| would probably be very reasonable, and means the price went
| down in real terms.
| simonh wrote:
| Why don't you just calculate the medians and find out?
| souprock wrote:
| The median of what? Do we count the new construction, or do
| we just look at the rising rent in the original city?
|
| We can have a situation in which rent for every home doubles
| in price, yet the median rent goes down.
|
| Do we care about the rent being demanded, including for
| vacant homes, or just the rent being paid?
|
| There are lots of ways to make a "correct" conclusion that is
| highly misleading.
|
| Apparently the study looks only at the 50 largest cities.
| That would ignore any rent decrease in small cities. One
| would expect exactly that if people are moving toward the
| largest cities.
| ripply wrote:
| Housing cannot both be a good investment and affordable by
| definition unless new supply outpaces demand. The problem is that
| for so many Americans, their house constitutes the majority of
| their net worth which naturally causes them to advocate for
| policies that increase their property values which among other
| things, includes zoning limitations that depress new supply.
| varispeed wrote:
| People feel great about their property value, until they sell
| and they learn that to buy similar place they often have to pay
| more that they got from the sale. It only makes sense if you
| want to leave everything behind and buy property in another
| state or country. Now that people have Bitcoin, hopefully
| they'll stop using properties as a store of value. Maybe we
| need a regulation that will cap rent profits to be no higher
| than inflation or something similar. We also need to loosen the
| regulation so that a family can easily buy land and build a
| house (only one per family).
| jvalencia wrote:
| I would argue that housing is not a good investment, but owning
| land is. The house is transient... the land remains.
| hourislate wrote:
| I would assume you don't have a house in Toronto or any of
| the major Canadian cities like Vancouver, Montreal or Ottawa.
| Houses there rise in price by 2-3,4,5 k a week easily. You
| can purchase a house for 1.5 million (borrow 1 million at 1.9
| %) and sell it in 10 weeks for for at least 30-50 k more. You
| ask how long can this last? It has lasted for a couple of
| years at least. I have seen the prices of Condos in a Co-op I
| was watching almost double in 3-4 months from 320k to 600k.
| tylerhou wrote:
| On average, this is not true. Citing this example is like
| looking at a specific stock (TLSA) and saying that the
| entire stock market quadruples every year. Looking at the
| broader picture, most REITs give returns similar the S&P
| 500.
| hourislate wrote:
| >On average, this is not true.
|
| While you might be correct looking at other markets, you
| would be surprised how average it is for Canadian Housing
| prices across Canada. It is impossible to not to earn a
| minimum of 20 % on any Real Estate transaction withing a
| year. It is very possible with a little luck to almost
| double your money on certain purchases in a very short
| time. I understand how difficult this is for people
| outside of Canada to understand but I'm not making shit
| up, it is reality and there is no limit to what the Gov
| will do to make sure it continues.
| SketchySeaBeast wrote:
| I think you're making a "Toronto and Vancouver is Canada"
| fallacy, which is ironically a very Toronto stereotype.
| Here in Alberta it's not so hot.
| alex_c wrote:
| Golden Horseshoe population is 9 million, Vancouver area
| is another 2.5 million. It's not Canada, but it's a big
| chunk of Canada.
| stormbrew wrote:
| I mean the "Edmonton-Calgary corridor," which is
| certainly more spread out than the vancouver metro but is
| still a recognized connected urban region, at over 3
| million people, is also not an insignificant chunk of
| Canada.
|
| I'm pretty sure you can find well over 11.5 million
| peoples'-worth of regions to pile up into a
| counterexample for what the post was saying. I think the
| point is that "across canada" is a broad brush to use for
| this.
| randomdata wrote:
| _> While you might be correct looking at other markets_
|
| There is no reason to think he isn't talking about
| Toronto. Two years ago the average price in Toronto was
| around $800,000. The assertion was that they are
| increasing in price by $30-50,000 every 10 weeks for the
| last two years. That would be an increase of $330,000
| over those two years. The actual increase, as of the
| latest figures[1], is only $245,000. And the latest
| figure shows up as an extreme outlier. One month earlier
| the two year growth would have only been around $160,000.
|
| [1] https://creastats.crea.ca/board/treb
| j4yav wrote:
| It doesn't have to be. I live in a house in the Netherlands
| that was built in 1675, and this isn't terribly unusual. It's
| not a special old house or anything, just an old one in an
| old city center.
|
| I know it's not super common in the US for various reasons,
| but it's certainly possible to build a house that will
| outlast you, your children, and their children.
| chrisco255 wrote:
| Wild, how was it constructed out of curiosity and what
| materials?
| j4yav wrote:
| Timber and brick, I'm unfortunately not an expert on home
| construction and can't give a more interesting answer but
| maybe someone else around knows.
|
| A lot of homes and construction in the New England area
| is brick and I bet it will last quite a long time.
| mikeg8 wrote:
| To piggy back: "timber framing" uses 6x6 or larger posts
| and beams for the structural members of the house and
| then is cladded over with brick, mud, or other materials
| to keep out water and air. Although we use still use wood
| (timber) studs in the form of 2x4s/2x6s, this is usually
| referred to as "stick framing" because the boards are
| much smaller. These smaller framing members require more
| fasteners to hold on claddings ie siding, vapor barriers,
| etc which means each nail/screw penetrations allows water
| and air to potentially ruin the house. Stucco and other
| masonry cladding like brick are naturally porous and
| water permeable.
|
| Another interesting tid-bit is that while older houses
| are much draftier and usually less energy efficient, this
| "airiness" of the house allows them to dry out and avoid
| rotting. There have been countless class action lawsuits
| in the US because builders in the 80s and 90s created
| situations where exterior wall assemblies trapped water
| against the studs and didn't allow them to dry out in an
| effort to make the "air tight" and energy efficient.
|
| The brick cladding on old New England style homes either
| have an air barrier between the brick and wood framing or
| weeps holes in the mortar to allow water out from behind
| the brick. This allows them to last much longer.
| psalminen wrote:
| Can confirm. I know many people who live in New England
| houses ~150 years old.
| jefftk wrote:
| This is mostly not a matter of construction materials.
| The oldest houses in New England are all wood frame (much
| cheaper for the colonists, still is today). As long as
| you keep the wood dry (maintain the roof and siding), it
| will last indefinitely.
| RHSeeger wrote:
| My in-laws' house is from around 1750, and it's not
| unusual in New England.
| mikepurvis wrote:
| This is true at a most fundamental level, but the things
| which make land valuable can absolutely change over time, in
| terms of its presence-in or proximity-to various other things
| (cities, amenities, natural resources), or ways that it is
| maintained or let go over time (soil erosion, pollution).
|
| And of course, there are a lots of factors which are totally
| outside of the individual's control-- a falling aquifer could
| make digging a usable well prohibitive, for example, or maybe
| your land is on the coast of Florida and will be underwater
| at high tide in another few decades.
| asperous wrote:
| 1. Most valuable land have buildings or housing on it already
| so it's kind of inseparable.
|
| 2. There's plenty of reasons land can lose value: people
| moving away, economic, environmental (climate change),
| cultural changes. Population growth is projected to peak in
| 2070.
|
| 3. (Land appreciation - inflation) has to be higher then
| property taxes at least. There's also opportunity cost of not
| using that money to buy another investment instead.
|
| Related: https://www.frbsf.org/economic-
| research/files/wp2017-25.pdf
| wvenable wrote:
| Most land where I live is significantly more expensive that
| the houses built on them. Almost without fail when the
| property changes hands, if the house isn't brand new it's
| torn down and replaced. Doesn't matter if it's a perfectly
| fine house because the relative cost is so different.
| CameronNemo wrote:
| What is land? Governments sell land rights piece meal. You
| might own the development rights to the land, but you still
| have to worry about zoning. And I would be surprised if there
| is anywhere in the US where you can buy land with exclusive
| water rights (underground or creeks/rivers). Water rights are
| almost always shared in some way. Mining (oil or ore) rights
| are not usually lumped in with development rights either. So
| if you buy land without a house, what are you buying? Future
| development rights? All the while you have to worry about
| squatters...
| johnebgd wrote:
| It seems we are also living in the last throes of global
| population growth. Various factors seem to be influencing
| dramatic fall off in birth rate.
|
| Housing is by definition in these circumstances a poor long
| term infrastructure investment.
| rorykoehler wrote:
| Not yet. Many people will move from the country to the city
| still. Many people in the city will also want more space as
| they gain wealth. Population won't top out until the end of
| the century according to estimates I've seen.
| throwaway0a5e wrote:
| People always repeat this trope without defining "good"
|
| To be a "good investment" owning housing doesn't have to have a
| better ROI than the S&P 500, bonds or the interest in a savings
| account. It just has to burn money more slowly than renting
| which is the alternative you'd be forced to spend that money
| on. That's a really low bar. One's primary residence can both
| be a good investment and affordable.
| zeku wrote:
| The issue that is often overlooked is the value of the down
| payment.
|
| Say your home is $100,000(i know, i know lol). Your 20% down
| payment is $20,000.
|
| You have to factor in the interest that $20,000 would
| generate in say index funds or whatever you would do with it,
| when comparing buying to renting--along with all of the other
| stuff people usually factor like taxes & upkeep.
|
| In some areas this can make renting actually the cheaper
| option.
| csours wrote:
| The down payment and cost of transaction, including
| inspections, taxes, and real estate agent fees, loan
| origination fees, other fees, cost of moving etc. In an
| average housing market it can take 5 years for those to pay
| off when compared to paying rent (do your own calculations,
| mileage varies dramatically).
|
| Unless you have enough cash to pay for a house, you are
| either renting money or renting a place to live.
| eindiran wrote:
| It needs to take both into consideration to be a good
| investment in some sense: it might make financial sense to
| not spend a large sum of cash on a down payment, but invest
| the money and continue renting (even if the cost of renting
| is significantly greater than the (property taxes + mortgage
| - tax savings) would be for the same property), as long as
| the returns of the invested money are greater than what you
| are losing on renting. A friend of mine did the math on this
| for a few property types in Northern California and it worked
| out to be fairly close in most cases.
|
| With that said, there seem to be pretty significant stability
| and psychological gains to owning a house that may outweigh
| financial considerations of this kind. That is doubly true if
| the investment + renting option is within the same ballpark
| as the ownership option.
| david-gpu wrote:
| > It just has to burn money more slowly than renting which is
| the alternative you'd be forced to spend that money on
|
| You also need to take into account the opportunity cost of
| owning land. You can rent and invest the difference in other
| assets like stocks.
|
| If an asset class has much lower risk-adjusted returns than
| easily available alternative asset classes, I think it is
| fair to call it a poor investment.
| majormajor wrote:
| _Land_ absolutely would stay a good investment. Land that can
| house more people, in a city where more people need housing
| than used to, isn 't less valuable than land that can house
| fewer people. Development's goal is to increase property value,
| that's the whole point of it. Nobody would spend money to
| develop if they were going to lose money on it. That's going to
| continue as long as population rises. When talking about land-
| owners (which zoning discussions, especially around single-
| family zoning, often means), the land value isn't what's
| protected by zoning. Development may reduce the desire of a new
| owner to live in a single family home next to an apartment
| building, but now you have another developer willing to buy
| your land to build their own multi-unit building, and that's
| gonna be some good money.
|
| The cities that have had less crushing affordability problems
| are the ones that have been able to continue expanding outward
| - the outskirts land that used to be empty now has housing (and
| got more valuable as a result of this development) and the
| inner areas (slowly) has been getting denser, especially as old
| industrial property gets redeveloped and such. But many of
| those cities have just as much zoning and restrictions around
| density as NY or SF (usually more!). The difference is that
| they were able to go outward to better keep up with demand
| increases. I don't think any US city has been able to address
| rapidly rising demand through upzoning and density alone -
| redevelopment of existing residential will always be much
| harder and slower than of empty perimeter land. Density, on the
| other hand, has seemed to ultimately cause demand increases in
| NYC and SF greater than the supply increases it has provided.
|
| If population growth stops, though... all this changes. Or even
| if just the net migration to various cities shifts around!
| vmception wrote:
| People who say that have never owned land and have a
| simplistic fantasy in their mind.
|
| Listening to people that have owned land you hear things
| like:
|
| - A creek was at one edge of our property right outside of
| it, and the state required us to build a bridge, getting the
| license for the bridge was costly and time consuming
|
| - The creek changed course and cut across our property, the
| federal government had new requirements that had costs and
| approvals necessary
|
| - We lost money on the property, despite land being a finite
| resource and all the dreamers being perma-bulls on land
| ownership, there was no way we could turn this into an income
| generating property that would be profitable.
| 0xB31B1B wrote:
| owning land in a high demand city is a wildly different
| experience than owning land in a rural area with creeks.
| The issue is not just that "land is a finite resource so
| any piece of land will increase in value" the issue is that
| "vacant urban land has very few alternatives for people who
| need it so the price consistently rises in areas with
| growing economies".
| varispeed wrote:
| Land often has a lot of strings attached. For example you
| need to maintain it, make sure there is no wild foliage,
| people don't start camping, it is safe (someone gets in
| and breaks leg? Nightmare), then maybe you need to build
| a specific thing or cannot build anything at all and so
| on.
| asdff wrote:
| > For example you need to maintain it, make sure there is
| no wild foliage, people don't start camping
|
| You really don't. Dirt lots coated in rusty chainlink,
| gang tags, weeds, and tents are traded hands all the
| time, even in Downtown Los Angeles, for top dollar. Maybe
| you hire a crew to weed wack once a month if that. Even
| land zoned for a single bedroom bungalow goes for a lot
| of bread, because one day in the future that zoning can
| change and there is always demand in a big city with a
| lot of jobs near a major harbor and airport for more
| units, and parcels in big cities are finite.
| majormajor wrote:
| Sure, we have anecdotes about how not every property is a
| profit bonanza, and that there are often a bunch of
| surprise costs.
|
| That's why there are big development companies. The
| advantages of scale apply here as much as anywhere. Lose
| money on one, make money on others to offset the risk. What
| you call a "simplistic fantasy" is a century-long
| phenomenon in the US at this point of increased population
| in major urban areas leading to rising land values and the
| conversion of empty fields into developed areas.
|
| There's no guarantee that population growth will continue
| to increase demand, or even that demand in developed areas
| will stay high - there have been a lot of cycles in that
| time as well, with extreme examples like Detroit to balance
| out the SFs of the world - but that's a very different
| argument than "we need to increase development so that we
| make housing less of a good investment," which I'm claiming
| is a blatant contradiction when it comes to the value of
| the land that is being developed. A shitty house in NYC is
| worth more than a nice house in Austin not for the
| building, but for the value of the slice of land it sits
| on, because the area has been developed more which has
| resulted in more demand.
| mlyle wrote:
| > Development may reduce the desire of a new owner to live in
| a single family home next to an apartment building, but now
| you have another developer willing to buy your land to build
| their own multi-unit building, and that's gonna be some good
| money.
|
| A portion of a constructed apartment building on your lot may
| be more valuable than your current house is there, but...
|
| A) There's no guarantee that the value of your land to the
| apartment developer exceeds the value of your current use...
| after all, they have to pay to demolish and then improve it,
| and...
|
| B) You and your neighbors may have put down roots, that have
| a substantial value, if difficult to directly economically
| measure.
|
| C) Moving, itself, has substantial economic costs.
|
| D) If an apartment building built next-door decreases the
| value of your single family home by 20%... there's no
| guarantee that there's demand or the possibility to build
| another one on your lot... and even if there is, the
| apartment-builder's estimate of your land value will be 20%
| less. You'll meet in the middle between (0.8 x your previous
| home value) and (the apartment-builder's estimate of the
| value of your land to him before improvement).
| majormajor wrote:
| I think the intangible aspects here aren't relevant because
| the original poster was talking about the financial
| investment aspect itself being a reason to oppose
| development. I completely agree that qualitative reasons
| will cause people to want to control development, and
| personally am fine with this, versus just letting the
| people with the most money dominate the market.
|
| For (D), though, I think this is generally overblown. There
| are no guarantees, and situations vary, of course, but
| trend-wise, I don't believe "partial" in-transition up-
| zoning has been a value-killer overall. In parts of the US
| that are densifying, these sorts of things are generally
| radiate outward from high-demand areas. But the single
| family homes in the high-demand city core areas still have
| more value than the ones further away, and if you look at
| the appraisal reports, it's because of the land value, not
| the structure. In the long run, that development cycle
| creates the demand that pushes up your own land value even
| if yesterday vs today, it was more attractive in isolation
| as a single family home next to another single family home.
| "Location, location, location" is a cliche but a valid one.
|
| As long as your location stays in demand - and in our
| current city planning paradigm that's not been something
| that's been threatened before potential post-COVID
| reorganization - you're more likely to hit a virtuous cycle
| for property value here than a vicious one. The types of
| developments/apartments that are gonna be put up are gonna
| be determined in part by how much it cost to get the land,
| so if it was already valuable land, building a slum next
| door won't make any sense to the developer.
| [deleted]
| jariel wrote:
| It's not zoning.
|
| The same issue persists irrespective of supposed NIMBYISM.
|
| The primary, most obvious driver is historically low interest
| rates. How much we can attribute to that is hard to say but
| it's #1 for sure.
|
| During the 2008 crises, the Fed took toxic housing loans off
| their books, which 'saved the banks' but it also 'saved
| millions' from foreclosure i.e. creating a moral dilemma there
| as well and signalling the Fed won't let home prices crash.
| whimsicalism wrote:
| In urban areas, I think it is hard to claim that the high
| rents have little to do with zoning.
|
| I don't think the problem is low interest writ large, but
| specifically attempts to prop up the homeownership market
| with debt.
|
| There's a reason that post-2008 private lenders have
| basically backed out of the mortgage market and let Fannie
| Mae & Mac hold the bag, even in the context of so much more
| money chasing yields.
| stjohnswarts wrote:
| This is incorrect zoning and "historic" zones prevent new
| building. A new 70 floor tower replacing an old 5 or 6
| floor "historical residence" -drastically- increases
| density. Now go try and get that to happen in San Francisco
| in less than a decade.
| mamon wrote:
| 70 floor tower is a bit extreme. What would really
| benefit places like San Francisco is replacing single
| family homes with 3-4 stories apartment buildings. Such a
| low buildings still make neighborhood look nice and cozy,
| while increasing density 10 times.
| whimsicalism wrote:
| I don't see how you think what you're saying contradicts
| what I'm saying. Prices in urban areas are very much
| caused by zoning (primarily), but changes in macro-scale
| pricing of houses in the US are definitely related to
| supply of financing.
| bluGill wrote:
| Only partially. Anyplace where you want to live has
| zoning that limits how many people can live there. Zoning
| won't stop you from building out on some ranch in the
| middle of nowhere (ranches are getting bigger so you can
| find some no longer used homestead to rebuild). However
| zoning will stop you from building in a city.
| mchusma wrote:
| I think interest rates almost can't possibly explain it.
|
| The cost to take 4 single family lots and build a 12 story
| building to fit maybe 100 units.
|
| The actual per unit construction cost is like $100k ($10M for
| the building), but that is because they are all custom.
|
| Mass producing housing would easily drop prices 50%.
|
| Let's say these 4 lots with houses on them are worth $1M
| each.
|
| In the mass produced housing model, the price per unit
| including land is $140k.
|
| This is ballpark a 10x difference. Why is the spread so high?
| It's not interest rates.
| jariel wrote:
| Ironically you've demonstrated why low interest rates might
| be a primary culprit.
|
| (FYI the cost of the building it not hugely relevant, it's
| the land.)
|
| Imagine that you can afford some kind of monthly payment
| for your mortgage - as interest rates go down, the larger
| the loan you can afford i.e. 'leverage'.
|
| The longer people believe that interest rates will 'stay
| low', the more confidence they have in taking large loans.
| The longer the process goes on for, the longer people
| believe we are in a 'new normal' and feel confident in
| their purchases.
|
| Ironically, the big swings in prices in real estate are a
| function of leverage (i.e. low interest rates): if an
| economic crash hits, fear causes a crash and then upswing
| commensurate with the leverage in the system.
|
| NIMBYISM does not cause an increase in demand. Only 'more
| potential buyers' with 'more income' and 'more leverage'
| can do that. Since cities are not rapidly expanding in size
| with NIMBYISM, and wages are not radically increasing, it's
| likely a function of continuing high leverage.
| WarOnPrivacy wrote:
| > The primary, most obvious driver is historically low
| interest rates.
|
| This doesn't align with the last 20 years of housing prices,
| which have dramatically risen/fallen/risen while the interest
| rate has barely budged.
| jariel wrote:
| Well it does actually.
|
| As interest rates stay low - the amount of leverage in
| housing increases, which creates more volatility.
|
| The economic crises is obviously the primary forcing
| function during the crises and subsequent recovery. This
| will cause pressure one way, and then the other.
|
| The amplitude of the swing is a function of the fact
| interest rates are so low, and leverage is so high.
|
| They have been really low for a long time relative to the
| return on other assets, ergo, the leverage maintains and
| increases.
|
| Obviously this is amplified by other aspects of easy
| monetary policy.
|
| Put inversely: if rates were up 3 or 4 points, I don't
| think we'd see this kind of bubble in housing, not
| remotely.
|
| We are living in weird credit bubble, and thanks to COVID
| it may never let up - i.e. this could be 'the new normal'.
| It's like Earth's gravity has shifted for good and we're
| all having to adjust to a new reality. Part of that new
| reality is crazy home prices.
| whimsicalism wrote:
| ? https://fred.stlouisfed.org/series/MORTGAGE30US
|
| 2000 interest rate - ~8.5%
|
| 2020 interest rate - ~2.8%
| WarOnPrivacy wrote:
| You're right. Me going back to 2000 isn't helpful because
| it doesn't reflect our current reality. Going back to
| 2011 is better.
|
| By December rates were under 4%, setting the stage for
| all the years that followed.
|
| ref: http://mortgage-x.com/general/national_monthly_avera
| ge.asp?y...
| whimsicalism wrote:
| > Going back to 2011 is better. By December rates were
| under 4%, setting the stage for all the years that
| followed.
|
| Is that not when housing prices started continuously
| increasing?
|
| https://fred.stlouisfed.org/series/CSUSHPINSA
| WarOnPrivacy wrote:
| I think you're right enough.
|
| There are some nuances that supersede this point but I've
| run out of steam and lost the thread I was following.
| smaddox wrote:
| Interest rates are the driver, but the proportionality is
| between the rate of change in mortgage debt/credit and the
| rate of change of house prices: https://www.google.com/imgr
| es?imgurl=http%3A%2F%2Fneweconomi...
| pas wrote:
| You're mixing up cause and effect. Due to NIMBYism and
| insufficient supply was housing able to become an "asset
| class" at all. Again the interest rate has been historically
| low in order to facilitate low rate mortgages to help people
| finance the increasingly costly housing market.
|
| Of course since demand outpaced supply the added funding just
| caused even more inflation. (Sure, it caused some new
| entrants to the housing market, but since the place where
| people want to live is still constrained due to zoning and
| NIMBYism, the prices literally skyrocketed in those areas.)
| jariel wrote:
| No, in your own answer you pointed out the cause: "low
| interest rates in order to help keep housing priced up".
|
| That is literally the cause.
|
| NIMBYISM cannot be a 'cause' of anything - there is always
| more demand than supply in SF and in many places (also -
| people have a right to manage their own communities as they
| see fit.)
|
| If a million people try move to a village, the price of the
| houses goes up - the cause is 'zoning'? Or is the 'cause'
| the the people trying to move into the village? (Propped up
| with huge leverage due to ever decreasing interest rates?)
| [deleted]
| andrepd wrote:
| I'm partial to the Georgist approach. I just makes sense, even
| though it is pretty backwards from what we're used to ("I'll
| have to pay more if my land is more desirable??")
| m0llusk wrote:
| This is not accurate analysis.
|
| Perhaps most important is to understand that zoning and open
| ended environmental review has added huge costs and risks to
| building and has effectively slowed construction. This is the
| primary reason that there are not enough units and most other
| problems we see emerge from this. There are important other
| factors such as the financialization of housing creating a
| situation where demand is essentially infinite and relates only
| to investors and not to families or income from labor.
|
| As far as affordable housing goes, the majority of affordable
| housing is in older buildings. As buildings mature they tend to
| get paid off and reach a point where operating costs remain low
| until the structure needs to be rebuilt or replaced. This may
| be awkward to model, but realistic observation of markets shows
| that affordability is something that more or less inevitably
| happens to a property unless it gets removed or rebuilt
| relatively early in its lifetime because of a hot market.
|
| Property values are traditionally supported by incomes. The
| current environment where property values grow well beyond
| incomes has little precedent and there is little reason to
| think this situation is stable. When people in the past talked
| about their property not losing value what they meant that
| there would be both income opportunities and reason to live in
| the area. When opportunities dried up or communities became
| undesirable then the housing values would crash. That is
| entirely different from expecting housing values should
| increase beyond incomes or inflation.
| alpineidyll3 wrote:
| Eh. I think it's more about decades of declining low interest
| rates. Low rates are only available to american's who can
| obtain credit, and leads to predation on those who cannot. It's
| about mortgage availability not housing availability.
| qeternity wrote:
| You must not have been following the past 20 years. We have
| massive GSEs that backstop mortgages with the power of the
| Fed. Perhaps second to 2006, it has never been easier for low
| income borrowers to buy property. This is part of the
| problem.
| xvedejas wrote:
| If new supply outpaces demand, wouldn't housing also in that
| case cease to be a good investment? (I think your first
| sentence has this wrong)
| TheTrotters wrote:
| Yes, that's the point!
| missedthecue wrote:
| Housing is consumption, by definition. A house doesn't
| produce anything. It _shouldn 't_ be a good investment. It's
| probably optimal for it to rise at the same rate of inflation
| over time, to ensure that people aren't immediately under
| water on their mortgages, and so that they become cheaper
| relative to median incomes over the long term.
| stjohnswarts wrote:
| This is false. A house allows shelter which drastically
| increases human output and sense of well being, which is
| also good for production and consumption if you want to
| look at it from a strictly economic angle. I'm not sure
| where you're going with that. You can't make sure a
| mortgage will put you underwater, that's an impossibility
| in an economy that isn't completely state controlled.
| chewbacha wrote:
| While it makes sense that it should basically grow with
| inflation, I think that housing does arguably produce
| humans. Humans which work and drive the economy. This would
| imply that it should rise with inflation of course.
| beebmam wrote:
| Housing in the US can be seen as a luxury good as well. I
| really don't like that
| WarOnPrivacy wrote:
| Given our enormous homeless population, that would seem
| to apply here.
| AndrewUnmuted wrote:
| How about the land that the house sits upon? That's a
| scarce resource for which demand will continue to rise over
| time. I envision no way for this to change until we figure
| out a new way to house people in previously-uninhabitable
| spaces.
| whyenot wrote:
| It seems like you are assuming that population will
| continue to increase. Obviously it is not something that
| can happen forever.
| chongli wrote:
| A house is consumption and it's not a good investment. The
| value is in the land. Land in popular areas is extremely
| valuable and increasing in value all the time.
|
| Yes, homeowners collude to restrict housing supply via
| regional politics. But the real problem is the
| centralization of jobs within big cities. This is bound up
| in the history of manufacturing in the west and the forces
| of globalization.
|
| Remote work has the chance to reverse or at least slow this
| trend. In the short term it may lead to an explosion in
| real estate prices in areas within commuting distance of
| the big cities. In the long term I hope it leads to people
| spreading out a lot more and making housing affordable
| again.
| rhodozelia wrote:
| What if you rent the house out? Can it be an investment
| then? It would produce a return, positive or negative
| depending on your costs and the rent you can charge.
| joshlemer wrote:
| I don't think the centralization of jobs is really the
| whole story or even close to it. If you look at BC in
| Canada, housing is ridiculously expensive, even at
| distances away from Vancouver and Victoria that would
| prohibit commuting for work, and even despite BC being
| mostly empty wilderness with plenty of room for every
| Canadian to move there.
| lotsofpulp wrote:
| Land in BC has higher demand due to favorable weather and
| topography, relative to land in other areas.
| jes wrote:
| My wife and I owned a home in a nice community for 35
| years. We lived our lives and raised our family in that
| home. It produced great value for us, year after year, for
| much of our lives.
|
| The claim that a house doesn't produce anything seems
| incorrect to me.
| splistud wrote:
| I don't think the term 'naturally' is apt here. It implies that
| people are actually making a logical choice.
|
| In the same way that a house is often the majority of the
| network of Americans, a job is often the majority of the
| income. This fact does not cause most of them to advocate for
| enforcing immigration laws, even though this choice reduces
| payrates for all Americans.
| rory wrote:
| Immigration thing aside (I don't think personal-income-
| maximizing necessarily equals logical), I feel like this
| point is often missed. Most people who lobby for strict
| zoning don't do it with the intention of restricting supply
| to increase the value of their home. They usually do it for
| much simpler, more human, and often kind of stupid reasons
| (traffic, construction noise, fear of new and different
| people in their neighborhood, etc).
| stjohnswarts wrote:
| As an owner of two homes, I've never lobbied anyone for better
| zoning laws for me, and actually I've done the opposite. Not
| everyone is cookie cutter.
| jopsen wrote:
| I imagine most home owners don't do any lobbying.
|
| But it is true that politicians don't like increasing
| property taxes and other policies that could draw down the
| housing market.
| vmception wrote:
| yeah grandpa, its the participation awards which are the problem,
| not the hopelessly rising prices with stagnant incomes /s
| PragmaticPulp wrote:
| The average 30-year mortgage rate in 2000 was 8.05%. Given a
| $2500/month target payment and 20% down, someone could buy a
| $423,870 house.
|
| The average 30-year mortgage rate in 2020 was 3.11%. The same
| $2500/month payment with 20% down buys a $730,892 house.
|
| Ignoring down payments (which differ greatly between the two
| examples) and other expenses like property taxes, the 2020
| mortgage rate allows someone to buy 172% as much house as they
| could in 2000. This doesn't translate perfectly to rental prices,
| but property affordability via low mortgage rates is heavily
| correlated with increasing rent prices.
|
| Not a perfect comparison, but it shows how much mortgage rates
| are driving the housing price boom. Scary to think what's going
| to happen when (if?) rates start going back up.
|
| Source for historic numbers:
| http://www.freddiemac.com/pmms/pmms30.html
| thehappypm wrote:
| Framing it differently: I have $100,000 as a down payment for a
| $500k house. At 8.05% the monthly payment is $3,686. At 3.11%,
| it's $2,138. That's a savings of $1,548 monthly. 12 payments a
| year for 30 years that's a net change of $557,280.
| stouset wrote:
| You're not considering that the market responds to these
| changes in affordability. If you can afford $3,186/mo today
| and the interest rate plummets, sticker prices will (over
| time, generally) track higher such that your monthly payment
| remains roughly the same.
|
| It's not a perfect relationship between the two--
| affordability does fluctuate, and the movements have a lot of
| latency between them--but on a societal scale the
| relationship holds.
| WarOnPrivacy wrote:
| > the 2020 mortgage rate allows someone to buy 172% as much
| house as they could in 2000.
|
| You'd think so until you factored in vastly higher insurance
| costs - between 2000 and now.
|
| source: five years of insurance increases more than doubled our
| 2000's monthly home payment
| stjohnswarts wrote:
| Dang, do you live in a flood zone in tornado alley? My
| property tax recently surpassed by mortgage payment but my
| insurance payment isn't close to either. I think it's around
| $1500 a year or so.
| Guzba wrote:
| This is not a big deal as you make it sound. Insurance is
| like 1k per year these days on a $300k house. If it was $500
| five years ago, this $500 increase is nowhere near as
| substantial as the interest rate change relationship
| described above.
| lotsofpulp wrote:
| My home insurance is ~$900/year for up to $750k dwelling
| replacement cost with $500k in personal liability, and my
| premiums barely went up over 5+ years. It might have been
| $850 per year initially. This is with Amica.
| loudandskittish wrote:
| "The average 30-year mortgage rate in 2020 was 3.11%. The same
| $2500/month payment with 20% down buys a $730,892 house."
|
| Except what's happening I live is that now the $423,870 house
| costs $730,829. As well, for someone who doesn't already have a
| house, the down payment isn't something you can just handwave
| away.
| JamesBarney wrote:
| Why would lower interest rates drive increasing rent prices?
| jayd16 wrote:
| Lower rates increase house prices. High house prices push
| buyers out of the house market and into the rent market. More
| renters increase rent prices.
| ProfessorLayton wrote:
| A $423,870 house in the year 2000 is equivalent to a $654,070
| in 2020 after inflation.
| danShumway wrote:
| It's not a $423,870 house in 2000. It's an 8% mortgage, and
| we're comparing what that 8% mortgage would get you in 2020.
| PragmaticPulp wrote:
| The point was to compare interest rates for a given monthly
| payment, which isn't influenced by inflation.
| shrimpx wrote:
| In the town where I live, a 400k house in 2000 would sell for
| around 2 million today.
| stouset wrote:
| This is a really important point that more people need to think
| about. Sticker price and interest rate have an inverse
| relationship. But the price you paid is set in stone when you
| buy, though the interest rate can change over time.
|
| For those who bought when rates were high and sticker prices
| were low, declining rates brought higher valuations.
| Additionally, the ability to refinance at lower rates meant
| that monthly payments were able to decrease along with total
| interest paid out on the loan.
|
| For those who bought now (me!) at high sticker prices and low
| interest rates, the mechanics don't work in our favor. Interest
| rates are only likely to go up, which doesn't allow refinancing
| at a cheaper rate. At the same time, (inflation-adjusted)
| sticker prices will go down.
|
| So while renting gotten ridiculously more expensive, home
| ownership also looks like an increasingly worse deal.
| daniel-thompson wrote:
| Half-facetiously, what about people who bought at
| (comparatively) low sticker prices _and_ low interest rates?
| If you had bought a house in (say) Austin 10 years ago, you
| would have gotten about a 3-4% rate, and the value of your
| house on the market today would be almost double what it was
| then.
| stouset wrote:
| It's easy to find individual markets (or time periods)
| where people have been lucky with overperforming house
| prices. I'm more concerned right now with what the future
| looks like for the median case.
|
| Home ownership is still probably a decent deal overall (I
| bought two years ago). But home ownership was an
| _incredible_ deal for boomers who have been able to
| refinance at progressively lower rates while seeing a
| disproportionate rise in home value.
|
| Millennials now are stuck buying those homes with highly-
| inflated prices with not nearly as rosy a probable future.
| While it's certainly possible that housing prices continue
| to rise drastically, my own read of the available
| information shows that this was chiefly a side-effect of
| declining interest rates, which frankly can't get that much
| lower.
| geenew wrote:
| Interest rates can be negative.
| reader_mode wrote:
| >At the same time, (inflation-adjusted) sticker prices will
| go down.
|
| Who cares about inflation adjusted price when you have a
| mortgage ? Your rate will be X for Y years, as long as your
| income keeps up with inflation you'll get a net discount.
| Buying a property with loans is a good way of betting on
| inflation - I don't know if it will happen but if it does
| you'll win.
|
| Worst case scenario is recession, you have reduced income and
| housing prices plummet - I don't see this playing out,
| running low interest rates to high inflation seems likely to
| me.
| stouset wrote:
| > Worst case scenario is recession, you have reduced income
| and housing prices plummet - I don't see this playing out,
| running low interest rates to high inflation seems likely
| to me.
|
| And the _standard_ case scenario is rising interest rates,
| where your highly-leveraged asset drastically underperforms
| the market (and may even produce negative real returns, if
| it doesn 't keep up with inflation).
| reader_mode wrote:
| Disagree, rising interest rates in this economy would
| lead to a recession - the worst case scenario.
|
| I don't see realestate underperforming inflation without
| some massive changes either.
|
| And in case of rising interest rates, the first thing I
| expect to pop is overvalued stocks and money parking
| commodities.
| wskinner wrote:
| The long term historical trend is falling interest rates.
| So at least for the last 100+ years, the standard case
| scenario has been that your highly leveraged and
| refinanceable asset outperforms the market.
| bluGill wrote:
| Which only matters if you want to sell. So never buy a
| house you don't plan to live in for a long time.
| lifty wrote:
| The FED and mainstream economists know that if interest
| rates will go up it will create huge deflationary forces
| (on top of existing ones) so they will do everything in
| their power to keep them low. I doubt we will see high
| interests for the next few years until debt ratios go a
| bit lower. The FED even mentioned that they're willing to
| allow inflation to run higher for a while. That being
| said, it's not a given that we will see inflation.
| gregwebs wrote:
| Does this calculation include property tax (or home owner's
| insurance as another commenter mentioned)?
| gshubert17 wrote:
| According to the US Bureau of Labor Statistics CPI
| calculator, $2500 in 2000 has the same purchasing power as
| $3800 in 2020. I believe that difference would be able to
| cover increases in property taxes and insurance.
| ipnon wrote:
| >Average home tenure is 8 - 10 years, most of the time when
| people sell a home they are turning around immediately and buying
| one. Suppose I buy a $100,000 house and it grows 5% per annum in
| value for 10 years. I sell for $162,889. I turn around and want
| to buy the house I could not afford initially that started at
| $200,000; well that costs $325,779. Suppose I collude with other
| voters and get a 10% annual increase in value through zoning.
| Okay, my house is now worth $259,374, but the house I want to buy
| is $518,748. To whit, it costs me $96,485 more to upgrade my
| house.
|
| >Even with the leverage that comes from getting all the value
| increases for only a fraction of the initial cost, it is a pretty
| rare market where the average homeowner will be better off by
| raising home values.
|
| >Frankly the only time this sort of argument makes any sense is
| if people are planning on moving to far less expensive areas
| (e.g. retiring to the country) or if they plan to never purchase
| a home again.
|
| https://marginalrevolution.com/marginalrevolution/2021/03/ho...
| shawabawa3 wrote:
| You are missing the impact of debt here (mortgages)
|
| In your same example:
|
| I have $10k, and buy that $100k house with a $90k mortgage. For
| simplicity let's forget mortgage repayments
|
| After 10 years I sell for $163000, leaving me $73k for my next
| down payment
|
| I can now "afford" a $700000 house assuming banks are willing
| to lend 90% LTV
| gher-shyu3i wrote:
| Debt is a huge facilitator of price increases. Easy debt due
| to usury has been known to destroy societies. It's not for no
| reason that it's prohibited in Islam, Christianity, and
| Judaism.
| Nbox9 wrote:
| I think it's more accurate to say that many historic Islam,
| Christian, and Judaic societies prohibited charging
| interest.
| gher-shyu3i wrote:
| How so? It's literally prohibited in the texts.
| flatline wrote:
| I wish I could own a home, that I put equity into, and have a
| reasonable assurance of getting that equity back out, without
| having it be a highly speculative, leveraged investment.
| Alternatively, I wish renting was affordable in any place worth
| living. Instead I'm all in on another home purchase right now,
| which if the market doesn't totally tank I should be able to
| turn into a 300% ROI in the next few years. That's great if it
| all works out, but I'm comfortably upper-middle class in a
| desirable area, what the hell is everyone else supposed to do?
| leetcrew wrote:
| probably lower their standards regarding what constitutes "a
| place worth living". I'm renting a very nice studio for $1450
| right now. 3BR rowhouses on my block are $1800-2000.
| WarOnPrivacy wrote:
| > Suppose I buy a $100,000 house and it grows 5% per annum in
| value for 10 years.
|
| Suppose it doesn't. It's been years since we able to count on
| decades of unbroken, steady home value inflation.
| FireBeyond wrote:
| South Puget Sound. Prices have gone up since 2008. The last
| five years, at least, have been double digit percentages.
| 2020? 19.1%. I have friends who bought in 2014 at $250,000
| now selling their homes for $600,000+.
| alistairSH wrote:
| Retiring to the country, or massively downsizing their homes,
| is exactly what most of my peers are planning. That, or stay
| put, in which case home value is largely irrelevant.
| whimsicalism wrote:
| Assuming that the collective sum of human actions will approach
| a rational, profit-maximizing one, rather than be biased in
| some systemic, human way (thinking about how legislation will
| impact your current net worth vs. how it will impact the prices
| of houses you want to buy in 10 years)
|
| Moreover, that assumes that the restrictions you put in place
| will impact everywhere that people want to move. It seems to me
| like it's more of a commons problem - people want to add
| restrictive zoning where they currently live because it
| benefits their net worth but they are harmed when others do it
| in places they might want to move.
| WarOnPrivacy wrote:
| There has been a lot of recent reporting about falling rental
| prices, in some historically overpriced areas.
|
| These stories ignore the sky-rocketing rents facing most of the
| nation - foster an unrealistic picture of the rental market.
| dcolkitt wrote:
| This data is not congruous with the national household
| expenditure survey. In 2019, the average American household
| earned $71 thousand after taxes. Of that 17% in aggregate was
| spent on shelter, and 6.2% on rent (this is a little complex
| because it commingles renters with owners). 36% of households
| were renters.
|
| In 2000, the average American household earned $42 thousand after
| taxes. Of that 17% was spent on shelter and 5% on rent. 34% of
| households were renters.
|
| Therefore relative to average incomes, the cost paid by the
| average American renter has only increased by about 17% on a
| national level since 2000. Since the Consumer Expenditure survey
| includes the entire country, it seems highly likely that the
| study in the link is cherry-picking specific metros to get
| headline results.
|
| https://www.bls.gov/cex/tables.htm
| neogodless wrote:
| The article actually specifies
|
| > Across the largest 50 cities
| dcolkitt wrote:
| Even this methodology doesn't add up. About one third of
| American households are in the 50 largest metro areas.
|
| If income-pegged rents increased in that group by 175%, but
| only 17% nationally, then that would imply that rents outside
| the largest metros decreased by 60%. That seems highly
| implausible.
|
| Either this study has to be wrong (or highly misrepresented)
| or the BLS Consumer Expenditure survey is wrong. Consider
| that the BLS survey is a huge sample size, with carefully
| controlled data, developed over decades, I'm trusting it.
| comeonseriously wrote:
| Well, interest rates are low. People have to put their money
| where it will make money.
| IncRnd wrote:
| I looked at the actual pdf report that this page indirectly
| linked. [0] The quoted 175% figure appears to be a case where
| statistics are selectively reported.
|
| The report, in the paragraph preceding the 175% quote contains
| this, "Annual median rents were on average $324 higher for every
| $1,000 increase in household median incomes across the 50 cities
| in 2020."
|
| [0]
| https://www.mba.org/Documents/Research/RIHA/22300_Research_R...
| Wohlf wrote:
| >Annual median rents were on average $324 higher for every
| $1,000 increase in household median incomes
|
| This is in line with the general rule of 30% of income should
| go to housing, and this is after they limited the selection to
| just the top 50 cities.
| SubiculumCode wrote:
| Is it the lack of housing supply, or that wage/salary growth has
| stagnated, or both?
| prepend wrote:
| My mortgage has decreased from 5.25% to 2.25% in the past 20
| years.
|
| It's weird how so many things seem to be geared to help people
| who don't need the most help (although I appreciate it). Locking
| in a mortgage and not having to move is one of the best things to
| square up a financial situation.
|
| Especially hard on friends who rented for 20 years who have been
| saving to buy but hurt by increasing rents over and over.
| vp8989 wrote:
| Rent to buy is a good strategy because you can justify to
| yourself living in a crappier place than you would want to own
| outright. Over time that allows you to purchase a house at a
| lower total outlay, including the rent you paid. During that
| saving period you also had the additional hard to quantify
| benefit of being able to move quickly and cheaply.
|
| If you are doing rent to buy but living in frothy areas where
| rents are always rising and apartments rent for 4k then
| obviously it's not going to be a winning strategy for you.
| freeone3000 wrote:
| Every area is frothy. You live where you have to live to work
| where you can find work. The assumption of this saving period
| is also fairly strong. It only makes sense if you're earning
| $60k a year or more, and actually can afford to spend less
| than a third of your income on rent.
| WarOnPrivacy wrote:
| > Every area is frothy.
|
| IKR? What is it with leaving reality out of these
| equations?
| deelowe wrote:
| I know quite a few construction workers who are much better off
| due to the housing boom...
| judge2020 wrote:
| Construction work isn't exactly a low-income job.
| deelowe wrote:
| Residential? Yes it is.
| jessaustin wrote:
| It's as if a plutocracy is managed for the benefit of
| plutocrats...
| IkmoIkmo wrote:
| No link to the study...
|
| Also no notes on whether it's been corrected for anything, e.g.
| better housing, bigger housing, changes in subsidies, smaller
| households sizes, different demographic makeup, increased
| disposable income etc, no information on zoning restrictions etc.
|
| Not very interesting to be honest as a way to explain the
| magnitude of the change, the confounders, and the drivers of the
| changes. We don't need another little-substance 'rent is too damn
| high' article if we want to have a serious discussion around
| problems and solutions.
| chmod600 wrote:
| I'd be interested to see how household size has changed over this
| period.
|
| Household income by itself is weird, because an _increase_ in
| personal income can lead to a _decrease_ in household income as
| better employment allows members to move out on their own.
| arcticbull wrote:
| Over the last 20 years, it's a little bit smaller (2.53 vs
| 2.62). It's a lot smaller than it was in the 1960s for instance
| (3.33) [1]
|
| The study focuses on the "50 largest cities" in the US which
| generally have regressive housing policies. Often, those cities
| are where the economy is doing well and high-paying jobs are
| available - but the city councils refuse to permit new
| construction. This limits supply in the face of increasing
| demand. Rent in particular too as folks living in big cities
| skew transient.
|
| I tried to find a source for their "median income" figure,
| because it would make sense that if you compare the increase in
| rent in big cities to median income _nationwide_ it would be
| more sensational, as these cities are where the income would
| have grown the most.
|
| This is where I pull out my usual recommendation of Japanese-
| style nationwide zoning rules. [2]
|
| [1] https://www.statista.com/statistics/183648/average-size-
| of-h...
|
| [2] http://urbankchoze.blogspot.com/2014/04/japanese-
| zoning.html
| kube-system wrote:
| Japan's zoning is interesting but:
|
| 1. There are definitely reasons for many of the types of
| zoning rules in the US beyond what the author recognizes in
| that article. Zoning isn't _just_ about measuring nuisance
| level.
|
| 2. The US definitely does have mixed use zoning.
|
| 3. The foundation of property law in the US is fundamentally
| incompatible with a standardized system. The US government
| already did the extent of what they could practically do when
| they suggested a standardized system in 1920s.
| sthnblllII wrote:
| Fascinating. I would love to know the income distribution of
| household size. Middle class people have the fewest kids now
| a days. Wealthy people and low-income people have more
| children.
| [deleted]
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