[HN Gopher] How much do construction costs matter to the price o...
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How much do construction costs matter to the price of housing?
Author : ddubski
Score : 75 points
Date : 2022-02-16 18:55 UTC (4 hours ago)
(HTM) web link (constructionphysics.substack.com)
(TXT) w3m dump (constructionphysics.substack.com)
| orev wrote:
| The price (of anything) is determined by one thing alone: how
| much someone is willing to pay for it. That's it. The cost of
| building is not relevant in any way to that. Nicer materials,
| better design, etc. can make people willing to pay more, but if
| it's too much they won't pay.
|
| The only one who the cost of materials matters to is the builder.
| If it costs them more to build than they can sell it for (within
| whatever % profit margin they want), then they simply won't build
| it.
| joebob42 wrote:
| Well, except that the cost affects how much people are willing
| to pay, because if people are not willing to pay more then the
| cost then there won't be enough supply -> it will cost more ->
| people will either pay more or go without.
| sbelskie wrote:
| Except how much someone is willing to pay for something depends
| on, among other things, prevailing market prices, which are
| influenced by marginal costs.
|
| I may be happy to buy a house for anything less than 200k but
| if all houses are selling for 100k, then that (or something
| like it) will be the amount I am actually willing to pay.
|
| If construction costs rise and now builders are only selling
| houses for 150k, I will now be willing to pay that price.
| coldtea wrote:
| > _The price (of anything) is determined by one thing alone:
| how much someone is willing to pay for it._
|
| Which, as a catch-all condition, is next to useless to examing
| why the price of something is what it is.
|
| The question then moves to the next turtle: why are people
| willing to pay X for a house in area Y.
|
| > _The cost of building is not relevant in any way to that._
|
| Well, that's not true. In a place were land is plentiful and
| cheap, the price to get a house is dominated by the cost of
| building. Doesn't matter if there's an existing house that
| someone is willing to pay 100 for it. If people can trivially
| buy land and build for 20, that would be the cost to own a
| house in the area (note: a house, not THAT particular house).
| 71a54xd wrote:
| The price of construction matters considerably whether you're
| planning on building mass market apartments or condominiums. Most
| cities have explicitly different building codes based on the
| intended use of the dwellings, interestingly most of the time to
| avoid civil litigation with the city. Condos generally have much
| higher quality duct-work / fresh air exchange not to mention
| thicker walls, more sound dampening etc. All of this is more
| expensive, but the cost is passed onto the buyer and ensures the
| contractor isn't on the hook for tenants levying lawsuits against
| the architect / contractor / city that conducted inspections.
| hattmall wrote:
| This sort glosses over the real percentage of construction costs
| by giving only a 20 or so percent of profit. A large portion of
| construction though is the individual sub-contractors profits. I
| would guess that the large difference in costs vs 100 years ago
| is proportional to the increased number of subcontractors. A
| hundred years ago a lot of lumber was even at least partially
| milled on site too.
|
| The actual costs of real labor and real materials is pretty
| cheap. Even with the elevated building costs today you could
| still build an average home for sub $40,000 dollars if you
| control all aspects of the process.
| gedy wrote:
| Yes, we built an extension to our home ourselves, material and
| tools was about $40k. We heard later that to contract this to a
| California builder would have cost us $150-200k
| s1artibartfast wrote:
| Some interesting historical context on construction costs:
|
| 100 years ago the cost of construction was about $45/sqft when
| adjusted for inflation and today it is closer to $220/sqft,
| approximately 5x the cost. Blue collar wedges are pretty similar
| across time, but the cost of house construction (ignoring land)
| is dramatically higher.
|
| The 1914 sears Model 147 house was 900sqft and cost $872 for
| materials, estimated at $1,530 with labor.[1] Adjusting for
| inflation from 1914 to 2020, that is about $22,000 for materials
| and 40K with labor.
|
| Looking at 1913 US national labor statistics, the average baker
| in 1913 San Francisco worked 54 hrs/wk and made $0.46 per hour
| for an annual wage of $1,291[2] (or 33K in 2020 dollars)
|
| The median baker in 2020 California makes 36.5K/yr [3]. The cost
| of new housing construction is $220/sqft[4], or 200K for the same
| size house.
|
| http://www.searsarchives.com/homes/images/1908-1914/1913_014...
|
| https://fraser.stlouisfed.org/title/union-scale-wages-hours-...
|
| https://www.careeronestop.org/Toolkit/Careers/Occupations/oc...
|
| https://ternercenter.berkeley.edu/wp-content/uploads/pdfs/Ha...
| rr808 wrote:
| Yes its interesting example, but 1914 Sears house didn't have
| electricity, or hot water (was an extra), no shower, I'm
| guessing its single glazed and lightly insulated.
|
| Certainly I think most modern houses are too luxurious with
| marble and complicated accessories that aren't really needed.
| chrisseaton wrote:
| Baker is a strange salary to look at. Back then bakers were
| everywhere churning out a staple food by hand. Today a baker is
| likely to be an artisan of some kind, with a specialist
| product.
| s1artibartfast wrote:
| It is just a point of comparison. You can ignore it and focus
| on inflation and dollar purchasing power for consumer goods,
| also included. Point being that house construction costs have
| grown on a different trajectory than dollar value and salary.
| whoisburbansky wrote:
| It's odd, don't you think, that an "artisan" of some kind,
| with a "specialist" product, would only make about 10% more
| per annum, adjusted for inflation, than a generalist churning
| out a staple food by hand?
| ghaff wrote:
| I expect that most "bakers" in the US today work for
| grocery chains (or maybe for manufacturers of packaged
| bread and pastry products--not sure how precisely the
| category is defined). They're probably mostly not working
| for artisan specialty bakeries although I wouldn't be
| shocked if people at those places weren't exactly raking it
| in either.
| chrisseaton wrote:
| I don't think those large industrial bakeries really have
| 'bakers'? They have automation engineers, food
| scientists, mechanics.
| ghaff wrote:
| As I say. I don't know who is counted. In any case, I
| certainly imagine grocery chains that bake on-premise
| have "bakers" and there are more of them in that type of
| job than working in high-end artisan bakeries.
| datadawg wrote:
| Just wanted to say I've enjoyed this HN rabbithole gold,
| where we've gone from talking about increasing house
| costs to discussing the role of bakers in modern day
| industrial bakeries :)
| jzwinck wrote:
| Modern bakers are competing in a market dominated by
| extremely cheap mass production. The economy of scale has
| moved out of the local bakery and into the regional bread
| factory.
|
| People are willing to pay double or triple for artisanal
| bread compared with mass produced bread. But are they
| willing to pay 10-20x? If not, and the extreme cost
| efficiency of modern food factories inexorably lowers
| prices, the market clearing price of artisanal bread is
| limited and declining.
| missedthecue wrote:
| yes that occupation has changed considerably in the last 100
| years. A "baker" today is usually the person who opens Krispy
| Kreme in the morning. 1914 was a decade and half before
| sliced bread was even invented!
|
| These days, bread is made very efficiently in massive plants
| (which is why it costs only $0.93 a loaf at my grocer)
| kube-system wrote:
| The standard of construction has also changed since 1914. Not
| only do few people want to build a 900sqft freestanding home,
| if they did it today with that Sears kit, it would break nearly
| every building code in the book.
|
| A more equal comparison would be to a prefab or mobile home,
| which you _can_ get for that inflation adjusted price.
| s1artibartfast wrote:
| I totally agree that the take away is construction costs are
| going up over time! This holds true even if you look at
| price/foot opposed to total cost.
|
| Like you said, part of this is differences changes in what
| you get, building codes, and amenities.
|
| That said, Craftsmen homes are wonderful and in some respects
| have better build quality than modern homes.
| dzhiurgis wrote:
| Did standard improve 5x tho? Probably by like 2-3x I'd guess.
| Or standard maybe even decreased in some ways, but we're
| actually paying for complexity.
|
| Also - building larger typically reduces price/sqm.
| sokoloff wrote:
| In 1925, only half of homes in the US had electric
| lighting. None had air conditioning. Many would have had
| only steam boilers (which can function without electric
| pumps) fired by hand-shoveled coal. Most would have had no
| insulation. In 1940, half of homes had no indoor flush
| toilets and no hot running water.
|
| If you built a house today without electricity, with only
| cold water service, and an outhouse, I think you'd save a
| fair bit on skilled trades (and be pretty damn unhappy when
| you visited a neighbor and saw their utilities).
| kube-system wrote:
| There's a lot of ways that the standards have changed, it's
| not just one dimension.
|
| Complexity and feature set are probably the biggest. New
| construction single-family homes today are more likely to
| be customized, not kits, have way more features and way
| better mechanicals. That 1914 house had no kitchen
| appliances, no laundry appliances, no driveway, no garage,
| no insulation, no central HVAC, etc.
| TheChaplain wrote:
| Prices on housing will not go down as long as people have access
| to money IMHO, and plenty are willing to pay up if it means 30-45
| min less commute to work.
| Scoundreller wrote:
| If non-gov investors had to provide the mortgages instead of
| the fed, that access to money would dry up.
| 88840-8855 wrote:
| I agree with the tone in the comments here - and the article. It
| is the land prices that drive prices.
|
| My income here in Germany is alright, according to statistics I
| am in the top 20% with my monthly income. Unfortunately, I will
| not be able to buy a decent apartment in the city to start a
| family if my gf/wife is not also in the top 20%, we get some
| support from parents and agree to pay off the debt for the next
| 35 years.
|
| This is the only reason why I am not starting a family.
|
| Times were different, housing was more affordable, but today
| everyone wants to live in the urban areas, the human population
| is growing, building standards increased, people can own land
| forever. In the city where I am living apartments were relatively
| affordable 20 years ago, today they cost twice as much.
|
| If you ask me then I have to rather populist solutions for the
| housing crisis: 1) nobody can own land; land is property of the
| people and can only be leased for 75 year or so; 2) one apartment
| per head. Not more. 3) all profits from selling real estate are
| taxed 100%. Those 3 measures would quickly lead to a huge price
| drop and speculation would not make much sense anymore.
| arcticbull wrote:
| It's a question of supply and demand.
|
| In areas with high supply or low demand, the price of housing
| approaches the cost of construction.
|
| In places with punitive zoning rules that forbid new
| construction, limiting supply, and have high demand (I'm looking
| at you, San Francisco) the price of housing dramatically exceeds
| the cost of construction.
| timerol wrote:
| In places with very high supply or very low demand, the price
| of housing can be far below the cost of construction, which
| comes with its own issues
| dionidium wrote:
| The price can even go lower than the cost to remediate the
| property for residency. This is a bit of a tail risk. This
| has never happened to _most_ U.S. neighborhoods, but the risk
| is not zero.
|
| Getting loans to build on these lots is nearly impossible,
| which contributes to their continued decline.
| mint2 wrote:
| Can we be more precise in language on what "new housing" means.
| More urban sprawl versus densification both are "new housing"
| but very different. I'm pro densification but highly against
| sprawl.
| arcticbull wrote:
| Yeah me too, I should have been more precise. I was referring
| to densification.
| dionidium wrote:
| The two are pretty clearly related. If cities aren't
| allowed to densify, then people who would have lived in the
| city center have to live somewhere else.
| bumby wrote:
| > _I'm pro densification but highly against sprawl._
|
| My natural inclination is to agree with this statement, but
| I'd like to hear your rationale. Can you elaborate on your
| preference? Is it location dependent?
| csee wrote:
| Sprawl is environmentally unfriendly (transport distance
| and construction material usage), financially expensive
| (sparse service provision, roads), and it excludes poor
| people from the city center (since everyone has to compete
| to be within 15 minutes)
| actuator wrote:
| London doesn't have this problem if I am not mistaken. But
| housing is very very expensive still. So much that a 3 bedroom
| 120sqm apartment can be more than 6 million dollars even
| outside Central London depending on the area.
| buscoquadnary wrote:
| From everything I've heard London has some of most
| restrictive, bureaucracy laden, red tape filled city building
| processes out there. I've heard that all of England has
| "councils" at the local level that basically operate as HOAs
| with the full force of the law. I don't know that I'd pick
| anywhere in the UK as a shining example of ease of building.
| actuator wrote:
| But then councils can compete with each other, the ones
| outside even do so. There are tons of high rises coming far
| from Central London but still reasonable commute to center,
| but that doesn't necessarily reduce the price of properties
| inside.
|
| Area has a lot to do with prices and unless these outer
| areas become self sufficient so much that Central London or
| rich boroughs lose lustre, the inner areas will command a
| high price.
| iso1631 wrote:
| While demand outstrips supply as now, prices increase.
| These have a ceiling of the maximum people can afford. If
| everyone is given a PS10k payrise, then rents will
| increase by PS10k, and buying will increase by whatever
| an extra PS10k a year will get you on the mortgage.
|
| Until supply increases enough so that demand is no longer
| artificially constrained that will be the case. Now there
| are places where supply is higher than demand, like inner
| cities in places like Stoke, and prices there are low
| enough that even a single earner on minimum wage with 6
| months salary as a deposit can afford a 2 bed house [0]
|
| [0] https://www.rightmove.co.uk/house-
| prices/detailMatching.html...
| jefftk wrote:
| In London, if someone purchased all the properties on a block
| could they level the block and build something 15 stories
| tall? No: it has lots of regulations that restrict
| construction.
|
| (Not saying that allowing this is necessarily good or bad,
| but it's definitely something London has)
| nicoburns wrote:
| No, and for good reason: if everything is high-rises then
| housing becomes too dense. The problem isn't lack of
| housing density. The problem is too many people wanting to
| live in a small area. We need to reduce demand (by
| spreading over a wider area - more cities and rural areas
| too) rather than increase supply.
| arcticbull wrote:
| I dont think there's any justification for this position,
| really. Density in Macau is 20,000 people per square
| kilometer. Parts of the NY/NJ metro area like Guttenberg
| are 22,000. San Francisco is 6,600. Hong Kong is 6,300.
| London is 5,700. There is a ton of room to increase
| density before we start reducing demand.
| actuator wrote:
| Yes, this definitely wouldn't be allowed there in some
| areas but isn't this true for most cities. I am all for
| more housing. But all areas in a city don't need to be
| redeveloped with high rises.
| davidw wrote:
| Tokyo is actually a place where you see this in practice,
| from what I read. Prices are fairly stable due to lots of new
| construction.
| rabuse wrote:
| Almost nothing, especially with the cheap materials used in
| current modern construction (unless requiring some hurricane
| code; ex. South Florida). It's all due to zoning limitations, and
| homeowners voting in their own interests to keep the supply down,
| and values to rise.
| loeg wrote:
| The rebuild cost, as estimated by my insurance company, is more
| than half the total value of my house. And I live in Seattle,
| where land is relatively expensive. Construction cost is not
| "almost nothing" by any means.
| sudosysgen wrote:
| Doesn't that include the cost of demolition? Demolition done
| right is very expensive.
| loeg wrote:
| In a city, most construction is going to involve
| demolishing the previous structure. So you could argue
| there isn't much value in pricing construction sans the
| cost of demolition.
| sudosysgen wrote:
| Well no, because the cost of demolition is the same no
| matter what you build, right?
| cool_dude85 wrote:
| >Almost nothing, especially with the cheap materials used in
| current modern construction (unless requiring some hurricane
| code; ex. South Florida). It's all due to zoning limitations,
| and homeowners voting in their own interests to keep the supply
| down, and values to rise.
|
| Did you read the article or just the title?
| com2kid wrote:
| > Almost nothing, especially with the cheap materials used in
| current modern construction
|
| New construction requires higher quality electrical panels with
| fancier breakers, more GFCI outlets, and much, much, better
| insulation.
|
| Builders have always used the cheapest materials they could get
| away with, and the cheapest labor they can hire. That has
| always been the case.
|
| The old houses still around are the exception to the rule, not
| the norm.
| throwaway0a5e wrote:
| >The old houses still around are the exception to the rule,
| not the norm.
|
| You need to get outside the beltway or at least go to some of
| the "bad" neighborhoods within it.
|
| The only place your statement is close to true is very
| wealthy areas that are constantly being redeveloped. Other
| than the occasional prime lot or desirable commercial site
| new construction fills in around the old or adds on to it.
| Big lots get subdivided and a new structure goes on the empty
| chunk and buildings get additions. Basically nobody is
| demolishing any building that is sound because buildings are
| expensive and why would you waste a perfectly good one.
|
| Generally speaking you only see good buildings get demolished
| when the land becomes worth so much relative to the structure
| that it makes economic sense to knock it all down and do a
| clean sheet because the little extra optimization you get
| from doing that is worth more than what you would have saved
| by keeping the sub-optimal structure.
| scsilver wrote:
| Alot of new development is that architecture from the 80's
| and 90's is not tailord to modern life, was adapted to the
| car revolutions of the late mid century, and is agressive
| towards pedestrians. All the new construction in my area is
| tearing down old warehouse, office buildings and parking
| lots, to be replaced with wide sidewalks, brick paved
| streets with clear crossings, and high rise young adult
| "luxury" apartments with amenities. It's making the
| neighborhood nice and connecting all the bike routes and
| walk routes.
|
| Being right outside the city core helps justify the price
| of redevelopment. However, I think the larger buildings are
| getting facelifts rather than rebuilds.
| jewayne wrote:
| > The old houses still around are the exception to the rule,
| not the norm.
|
| So true. In fact, you could teach the concept of survivorship
| bias by looking at old homes, and the statement "they don't
| build them like they used to".
| Mountain_Skies wrote:
| Thought for conversation: if you are able to work remote but
| still live in or near a major employment center, are you at least
| somewhat morally responsible for pricing out those who cannot
| work remote?
| giantg2 wrote:
| Not sure why you are being down voted. This seems like a
| legitimate question that I would like to see the opposite side
| of.
|
| For example, if I was permanently remote, I would like to move
| to a cheaper area. I can't because my wife doesn't want to
| leave the current county (because "It's the best county in the
| world"). Although I'm also not in a heavily populated area,
| more so on the edge of being rural.
| Mountain_Skies wrote:
| Perhaps if I used the word 'ethically' rather than 'morally'
| there would have been less of an emotional reaction to the
| question.
| giantg2 wrote:
| I do agree it could be worded better. I kind of doubt a
| single word would change the tone that significantly (given
| that many people don't know the difference).
| lastofthemojito wrote:
| > I can't because my wife doesn't want to leave the current
| county (because "It's the best county in the world")
|
| For some reason that comment really piqued my curiosity.
| Obviously lots of us might choose different areas for various
| reasons (schools, weather, scenery, politics, recreational
| opportunities, cultural sites, etc). But to make a
| declaration of world's best must mean a lot of confidence in
| the greatness of one's county! It also reminds me how little
| I identify with the county I live in, perhaps because I've
| lived in a few, and perhaps because I currently live almost
| directly on a county border and can see the neighboring
| county from my back windows.
|
| Still, I'm curious what about your home county makes your
| wife so enthusiastic about it compared to well, everywhere
| else?
| giantg2 wrote:
| "Still, I'm curious what about your home county makes your
| wife so enthusiastic about it compared to well, everywhere
| else?"
|
| I asked her that during the discussion. She wasn't able to
| give any explanation. My guess is that it's because she's
| never lived anywhere else. I've lived multiple places. They
| each have their good and bad characteristics.
| chmod600 wrote:
| Morality is too blunt of a tool for this kind of question.
| Right now we are way over-moralizing many issues and it's not
| helpful to a discussion.
|
| Morality is useful to avoid rationalizing things that we know
| are wrong. For example, killing is wrong -- we don't want
| individuals making complex rationalizations about how the end
| justifies the means.
|
| But something as complex as the place a person chooses to live?
| No, that's a morally-neutral choice. It may not be optimal for
| the benefit of society, but that's not what morality is about.
| Dracophoenix wrote:
| >For example, killing is wrong -- we don't want individuals
| making complex rationalizations about how the end justifies
| the means.
|
| Humanity justifies it in self-defense and war. A long time
| ago, civilizations justified human sacrifices. It doesn't
| take a complex rationalization. Only a convincing one.
|
| While the platitude of "killing is wrong" is repeated by
| everyone, if you dig deep enough, people will still provide
| carveouts for themselves and their country or religion.
| Whether killing is good or bad is assessed by people
| objectively in terms of motives and consequences, and, on a
| subjective level, manner and "proportion". There wouldn't be
| a distinction between homicide and murder if humanity as a
| whole practiced what it preached.
|
| >But something as complex as the place a person chooses to
| live? No, that's a morally-neutral choice. It may not be
| optimal for the benefit of society, but that's not what
| morality is about.
|
| I agree entirely. However this seems like a massive departure
| from what I've had to argue against in this forum. Plenty
| have claimed the opposite, that morality is all about society
| and any correlated externality IS obliged to be solved by
| government or the people through a half-baked redistribution
| scheme.
| scsilver wrote:
| Those employment centers are where resources are. The
| alternative is setting up resort towns with shipped in and
| strained labor serving the leisure and remote work class. See
| the mountain towns. Living remotely outside of towns starts to
| get isolating and inefficient unless you are getting all your
| resources from around your house and living off the land.
| Forget modern amenities.
| tristor wrote:
| No.
|
| I'd argue that choosing to live in any area for any reason does
| not in any way make you morally responsible for the
| externalities of that choice. What you do while living there
| you are morally responsible for, but merely the choice to move
| does not bear any responsibility.
|
| So, yes, NIMBYs bear some moral responsibility for the housing
| situation, but simply relocating does not create responsibility
| or moral hazard.
| twblalock wrote:
| No, because you as an individual are not morally obligated to
| provide housing to society.
|
| If such an obligation exists, it's the government's obligation,
| not an individual one.
|
| The best thing an individual can do to provide housing to other
| people (aside from build it) is to support the loosening of
| regulations which make it difficult to build new housing. Those
| regulations tend to be worst in the major employment centers.
| Erik816 wrote:
| Nope. If you can afford to live on the waterfront and enjoy the
| view, but never use your boat, are you morally obligated to
| sell your house to someone who will be out there fishing or
| skiing every day?
|
| Land is bought and sold on an open market. Everyone can decide
| for themselves what is most important to them and what they can
| afford. One factor behind living in a major city is certainly
| easy access to in-person employment. But there are a ton of
| other factors (restaurants, culture, sporting events,
| community, etc.). If you are willing to pay a lot of money to
| be close to those things even if you don't use all of them,
| that's your choice and it's perfectly ethical.
| munk-a wrote:
| I dislike this particular example because waterfront views
| aren't necessarily tied to boat accessibility. I have
| relatives in Long Island that live five houses from a marina
| and have absolutely no water view what-so-ever, however they
| have exceedingly good access to their boat which they sail
| regularly. I like the gist of your argument but the specifics
| are pretty questionable to me and I'm struggling to think of
| a similar fair argument that doesn't also have the "under-
| utilizer" reaping some direct benefit from the same quality
| that the "proper-utilizer" would fully exercise. The easiest
| example for me to think of is public transit, a lot of people
| make no use of public transit for their work commute but
| still use it when going out for the evening or get a benefit
| from it through their children's usage. City nodes tend to
| specialize pretty efficiently, the fact that people who want
| to live near a movie theater often compete with people
| wanting to live near transit is due to the fact that those
| attributes aren't nearly as independent as you'd think.
| Theaters and entertainment venues in general tend to clump
| around good public transit accessibility. The waterfront view
| and the ability to easily fish are two different services,
| but they're supplied by the same object so it isn't
| particularly easy to separate the two[1].
|
| 1. I mean, unless you're talking about Boston in the 90's
| where the Charles was a pristine beautiful river that only an
| absolute madman would ever dare to fish on or some other
| similar pollution driven limitation of services... but that
| also shifts the original point since fisherman have no desire
| to live close to the Charles (and might actually be harmed by
| having to boat up and down the Charles every day when
| compared to living in Chelsea or Southie.
| eweise wrote:
| You mean am I morally obligated to take my kids from their
| school and friends, as well as all the relationships I've made
| with the community, so that someone else can have an easier
| commute? nope.
| francisofascii wrote:
| If you are judging morality based on, taking more than what you
| need or deserve, or squandering a gift, then maybe. But that
| would be a high bar. How much space you take up and how you
| interact in your neighborhood would factor in much more than
| your presence. For example, if you lived in the slums of the
| city, but was a net positive for the community and caused some
| gentrification, that certainly should not count against you.
| How about people who can walk to mass transit but don't use it?
| That would be similar.
| VikingCoder wrote:
| Going off on a tangent here:
|
| There's a sci-fi novel I want to write some time...
|
| You know how some countries have mandatory military service?
|
| Well, what if all of the "Essential" jobs, all had mandatory
| service?
|
| I want to do my own cherry-picking, selecting the "Essential"
| jobs, and especially those that are toilsome but that you can do
| with not a lot of training, and then do the math to see how many
| hours each able-bodied person in a country would need to do each
| job, in order to satisfy all of the needs of everyone in that
| society (able-bodied, or not.)
|
| And then build up a story around some people who are finishing
| their Essential Jobs, and are deciding whether to Retire into
| living off the dole, or whether to transition into some Skilled
| labor to live in more luxury.
|
| And then there's the fact that automation is making it so that
| less and less actual manual effort is required for the Essential
| jobs. So, does the society start categorizing new jobs as
| Essential, or do people end up with more discretionary time?
|
| I feel like this would have made a pretty okay Star Trek culture
| to encounter...
| vl wrote:
| Have you read Heinlein's Starship Troopers?
|
| While not exactly your setup, it explores what happens in a
| society like this.
| Hemospectrum wrote:
| You could approach this idea from the opposite direction: Put
| all essential jobs under military jurisdiction. There's real-
| world precedent illustrating some of the ways this would (and
| wouldn't) work.
| someguydave wrote:
| >Put all essential jobs under military jurisdiction.
|
| Under that scenario the relative fairness of paying for jobs
| to be done would be replaced with the relative unfairness of
| being friends with the right people in the "plumber corps" to
| fix your toliet.
| xboxnolifes wrote:
| If there is some sort of national mandatory essential
| service, that will happen regardless of what organization
| it falls under if it is ran poorly.
| someguydave wrote:
| yes, it will happen in all cases where government
| bureaucrats decide who gets what resource
| OnionBlender wrote:
| The Expanse briefly mentions this in one of the books. Earth
| has universal "basic" income but if people want to go to
| university they have to do 2 years of working less desirable
| jobs to show they can handle working.
|
| I heard that Starship Troopers book had something like what you
| described but I haven't read it.
| ghaff wrote:
| In Starship Troopers, as I recall, you had to serve for some
| period in order to be a citizen/vote. I don't remember if
| this was necessarily military service (although that is
| certainly what the book highlighted).
| cool_dude85 wrote:
| >There's a sci-fi novel I want to write some time...
|
| >You know how some countries have mandatory military service?
|
| >Well, what if all of the "Essential" jobs, all had mandatory
| service?
|
| Corvee labor, aka a sci-fi novel about a concept in existence
| since Ancient Egypt.
| kiliantics wrote:
| Check out "The Dispossessed" by Ursula Le Guin
| giantg2 wrote:
| It's all about consumer preference. It seems this article largely
| misses this.
|
| People want to live in specific locations, or have to in order to
| find work. This drives land values up as demand increases.
| Policies can make this worse, but the problem will still manifest
| itself to some degree. (Potentially as affluent people,
| especially in suburban areas, buying up more land to create
| setbacks, or simply buying because they can afford it now, or
| HOAs setting limits, none of which help density, demand, and
| cost).
|
| "reduce the costs of construction, particularly residential
| construction (ie: housing)"
|
| Changing preferences are the best way to address this, yet is
| likely the most difficult to sucessfully influence. Houses being
| built today are mostly larger homes, and definitely much larger
| than the majority homes built generations ago. This means more
| materials, more labor, more regulation, etc. Now we might be
| using cheaper materials, or less per sqft, or using tools that
| increase speed of laborers. But I think this is mostly canceled
| out by just increasing the size of the house (ie we're growing
| into our fish bowl).
|
| For a personal example, my wife complains that an 1800 sqft house
| is too small.
| pydry wrote:
| >People want to live in specific locations, or have to in order
| to find work. This drives land values up as demand increases.
|
| This ignores the world's giant pool of floating capital
| ravenous for returns that jumps on trends and amplifies demand
| by buying up what it thinks will have good resale or rental
| value.
|
| I saw this happen in the area I grew up in recently. Some
| people I know who were struggling to gather a deposit saw their
| dreams of homeownership go up in smoke as they got consistently
| outbid on a series of properties by investors.
|
| This would be a pretty harmless outlet of an for a glut of
| capital if A) land werent finite or B) land had not been slowly
| untaxed for decades.
|
| Of the two, B is a more prudent way of making property prices
| sane again.
| giantg2 wrote:
| I was including that under "or simply buying because they can
| afford it now".
|
| "Of the two, B is a more prudent way of making property
| prices sane again."
|
| Maybe if you taxed unused land. Otherwise that tax will end
| up increasing a resident's rent/mortgage substantially (as
| it's a perpetual annual expense). So really, you'd have to
| tax way above what a normal person can afford (average US
| household about $75k, so $7500 is 10% gross), and that still
| wouldn't be much of a disincentive to the wealthy (ignoring
| the fact the the market would collapse because normal people
| can't afford to buy it from them nor pay the rent).
|
| Now if we did tax unused land, then we are reducing
| conservation and incentivize development. This is a major
| concern for some areas, especially around loss of agriculture
| land, riparian buffers for water quality, etc.
|
| If we had work that was more distributed, like remote is for
| IT, then it's possible the effects of all the capital
| flooding a handful of markets would be diluted by spreading
| it across numerous others. A generation or two ago we had
| many small cities with industrial or manufacturing jobs. Now
| it seems many of those cities have shrunk while the national
| population has grown, mostly concentrating in specific metro
| areas.
| ehnto wrote:
| > ignoring the fact the the market would collapse
|
| I think that is the point. The market doesn't make sense
| already for people who actually use the homes because of
| the investors. If there were property policies that
| targeted investors and forced their money elsewhere, prices
| would drop dramatically, making housing affordable again.
| giantg2 wrote:
| "The market doesn't make sense already for people who
| actually use the homes because of the investors."
|
| I think that depends on the area.
|
| A true crash, if it were to happen, would affect all
| though. You'd have people underwater on their mortgages,
| unable to move by selling or renting out the home and
| instead being foreclosed. People in some sectors my lose
| their job because people have less discretionary money
| (if they'd be smart and save more for retirement to
| offset the loss on their property). If anything, I would
| think more people would be looking for cheaper apartments
| to rent because they were foreclosed, leading them to
| rent from the rich who have a large share of that type of
| housing.
| pydry wrote:
| >Otherwise that tax will end up increasing a resident's
| rent/mortgage
|
| It would do nothing to rents or mortgages intrinsically but
| it would cause property prices to fall and it could add to
| the tax burden of regular property owners depending on how
| it were implemented (i.e. if the tax free threshold were
| set too low).
|
| >that still wouldn't be much of a disincentive to the
| wealthy
|
| It would be a _massive_ disincentive to the wealthy, since
| they own the most property and are used to it being an
| asset not a liability.
|
| They would dispose of properties that were nonperforming
| because taxes > capital appreciation + rent and this would
| spiral as falling prices leads to more hoarded properties
| being given up.
|
| They would also scramble to rent out previously unrented
| properties where capital appreciation wasnt covering taxes.
| More rentals on the market means even lower rents which
| makes their properties worth even less to them.
| giantg2 wrote:
| "It would do nothing to rents or mortgages intrinsically"
|
| Most people have their property taxes escrowed with their
| mortgage payments. Taxes can easily account for 25% of
| one's monthly payments. As for rent, the property owners
| just pass the cost on to the tenants by increasing rent.
| So property taxes are related to rent and mortgage
| payments. Even if not included directly in the mortgage
| payment, it affects how much of a mortgage one can
| afford.
|
| "It would be a massive disincentive to the wealthy, since
| they own the most property and are used to it being an
| asset not a liability."
|
| I'm not sure about this. Just because they own more
| property doesn't mean they would be the most affected.
| The tax would likely be a larger percentage of a "normal"
| person's income for their own home and thus more
| impactful to them. Plus, if the wealthy are renting out
| the majority of the properties, then they can make up for
| tax increases by raising rents (because property tax
| increase priced more people out of homes (because the
| price drop was a drop in demand), increasing demand for
| rentals). I do agree that it should incentivize full
| utilization of rental properties. But I don't think there
| are enough vacant rentals to affect supply/pricing, but I
| don't have the numbers. I would think that most owners
| are already utilizing residential rentals pretty much at
| full capacity in the markets that are the tightest.
| pydry wrote:
| >As for rent, the property owners just pass the cost on
| to the tenants by increasing rent
|
| Rents would either remain unchanged or go down.
|
| I dont magic myself a raise because income tax goes up.
| It works the same for landlords. If supply and demand
| remains unchanged, prices remain unchanged.
|
| The only change I could forsee to affect either is
| previously empty properties being put up for rent in
| order to cover tax payments to turn property liabilities
| back into property assets. This would _increase_ supply.
|
| >Plus, if the wealthy are renting out the majority of the
| properties, then they can make up for tax increases by
| raising rents
|
| They'd really love for that to be how it works and
| sometimes they pretend it is.
| pjc50 wrote:
| Indeed. Someone recently discovered that fifteen landlords
| own about 10% of Edinburgh:
| https://www.thenational.scot/news/19926004.edinburghs-
| housin...
| bumby wrote:
| How do you implement B) without causing a disproportionately
| negative impact on existing homeowners?
|
| For example, would you just tax "new" purchases more heavily?
| Or scale it into existing homes? Give caveats for fixed-
| income (elderly and disabled)?
|
| Politically, this seems like a tough road, even if it's the
| best choice. You have to essentially convince people to vote
| against their own economic self-interest. I think current tax
| policy around homes is curious because it's one of the few
| areas that there is a rather clear consensus around
| economists that it's bad policy that incentivizes the wrong
| actions, yet we can't seem to change them.
| anonAndOn wrote:
| Homestead exemption. If it's your primary residence you get
| a tax exemption on the first
| $[geographically_appropriate_median_goes_here].
| giantg2 wrote:
| They did that with the casino money in PA. It's a joke,
| like a couple hundred bucks, if that.
| pydry wrote:
| Land value tax.
|
| It could be made palatable to regular people by making a
| high tax free threshold. Most homeowners could be left
| unaffected.
|
| That leaves 50% of land owned by the 1%. A fair chunk.
|
| Additionally the money could be funneled initially into
| pensions for the impoverished elderly.
|
| Capital/billionaires would fight back by arguing that it
| would hit the elderly the hardest just as the howard jarvis
| taxpayers foundation did with prop 13 but if it was very
| obvious how many elderly people were helped, crying about
| grandmothers having to sell multimillion dollar mansions
| would probably backfire.
|
| They would throw _immense_ resources at trying to discredit
| and kill this, though. They would use every character
| assassination trick in the book to stop those pushing it.
| Some would probably also resort to violence if that failed.
| It would be an uphill battle the whole way.
| giantg2 wrote:
| "That leaves 50% of land owned by the 1%."
|
| Is a lot of that farm land, like with Gates?
|
| I thought a lot of the investors are involved with
| apartments, which don't take up much land?
| paulryanrogers wrote:
| Homestead exemptions for older folks already exist. Perhaps
| a higher tax rate for those not living in a property?
| giantg2 wrote:
| I would love to see no tax on primary home property at
| all. Just for commercial/investment properties.
| Unfortunately, a lot of that would be passed on to
| renters unless income taxes were assessed differently.
| But that would also mean drastically changing school
| funding, which could be a good opportunity but would
| likely turn this into every more of an impossible
| shitshow.
| brailsafe wrote:
| I don't necessarily disagree, but I have been thinking about
| what it would take to hypothetically limit the ability for
| people to buy multiple properties within some geographical
| boundary, or even put some pressure on low density owners in
| that geographical boundary while the cost of housing/vacancy
| rates are within some extremely scarce range. It's a naive
| thought atm, but I would be curious if everyone basically had
| only one slot for residential ownership in the metro area of
| the city, how much could regional demand actually push prices?
|
| For example, is it even remotely reasonable as a society to
| allow extremely wealthy people to own two or more condos in
| Toronto, when the minimum cost to get any condo is 3/4 of a
| million and salaries not remotely keeping pace? Is it
| unreasonable to settle on a definition of excess being that of
| the multiple residential property owner? Likewise for
| consideration towards residential property development
| companies. Maybe it's possible to own a lot of land
| specifically designated for development, but not for just
| holding more than one or a few properties.
| svachalek wrote:
| I don't think it's possible with all the shell corporations
| and other gimmicks the rich use. It's just too easy to
| conceal who owns what. I think simply removing all the market
| restrictions that make homes such a valuable investment would
| do it, when demand meets supply suddenly housing markets
| start to look like any other market. But this seems to be
| politically unthinkable just about everywhere.
| com2kid wrote:
| > For a personal example, my wife complains that an 1800 sqft
| house is too small.
|
| A modern blueprint 1800sqft house, yeah, for sure.
|
| But somehow a 1960s split level at 1800sqft is spacious.
|
| We are throwing square footage away on multiple large
| bathrooms, 2 living rooms, 2 dining rooms, and then wonder why
| the rooms we actually occupy are so small.
|
| The recent trend towards 4 story narrow houses doesn't help. A
| literal 1/3rd of the house is taken up by stairs!
|
| I'm in a 2300sqft house that has 4 bedrooms and 3 bathrooms and
| an office. There is still a bit of wasted space, but not much!
|
| Meanwhile, I've seen new houses, 3000sqft, 3 bedrooms, 4
| bathrooms, 1.5 million.
|
| "Oh you want 4 bedrooms? Those start at 1.7 million" <-- Said
| by an actual house developer
| dragonwriter wrote:
| > We are throwing square footage away on multiple large
| bathrooms, 2 living rooms, 2 dining rooms
|
| Two living rooms (well, "living" and "family") and two
| ("formal" and, well, not) dining rooms are pretty common in
| 1960s homes at the size being discussed.
|
| Bedrooms, bedroom closets, and kitchens are probably smaller
| than newer homes, though.
|
| > The recent trend towards 4 story narrow houses doesn't
| help.
|
| Tall, narrow houses have been a feature of urban single-
| family homes for a while, I don't think they are a new trend.
| asielen wrote:
| Modern homes have less room to live and more room to store
| crap.
| giantg2 wrote:
| I haven't really noticed that. Some older home don't have
| closets, or only small ones. But then it was common to
| have a shifero etc, taking up space too.
|
| Areas commonly used for storage, like unfinished attics,
| basements, and garages aren't generally counted in the
| assessed sqft.
| bumby wrote:
| > _But somehow a 1960s split level at 1800sqft is spacious._
|
| I've actually found the opposite. Modern builds seems to
| prefer open floor plans and higher ceilings that older homes
| do not. To me at least, this can make the equivalent square
| footage seem less cramped. To your point though, it's much
| more common for newer homes to have more bathrooms than older
| builds of similar size which obviously erodes living space.
| chaxor wrote:
| Yeah those higher ceilings are very popular, and
| _extremely_ inefficient. We recently saw this in the new
| constructed homes in Texas, which made their problem with
| the power grid last year even worse. The few minutes they
| gave power to those fancy new home regions (during the time
| they were cycling power steering) basically went to waste,
| because the ceilings were so insanely high, and everyone
| has the open and spacious aesthetic. Many of them had 2
| story entrance like ceilings, and few doors to close off
| where the heat should be directed. Older homes in the north
| tend towards lower ceilings and smaller rooms with doors -
| so heating one room can be efficient and fast
| bumby wrote:
| Sure, I was going to mention the tradeoff with the
| inefficiency but left it out for brevity.
|
| I will say, though, that the same inefficiency in those
| geographic areas exist when building multistoried
| buildings. A ranch is much easier to cool in west
| texas/new mexico/arizona than a multistory building where
| the bedrooms and living areas need to be cooled.
|
| I've notice the construction style also mitigates this
| somewhat. In the west where slab-on-grade is the norm,
| ducts run through the attic, meaning diffusers are in the
| ceiling. This makes natural convection of cold air more
| efficient, especially when coupled with something cheap
| like a ceiling fan. But at the end of the day, you're
| right that there's still substantially more air to
| condition.
|
| I don't know if I'd say that was even a proximate cause
| of the texas power grid situation though which was
| largely due to weatherization issues. Can you elaborate?
| giantg2 wrote:
| There are a lot of articles that go through the issues in
| detail. The main points they list are that in that
| climate heating is less of a concern and so inefficient
| resistant heating is common. Then the grid itself didn't
| winterize, which lead to some plants not staying up and
| the others not being able to cover the spike in demand
| with a reduction in generation capacity.
| giantg2 wrote:
| Plus two story or more ceilings a pain to clean and
| paint.
| brimble wrote:
| Having more rooms and more division between them is part of
| _why_ older houses feel bigger to me.
|
| Modern ones also do some really stupid stuff with square
| footage. One house we owned had a massive master suite the
| size of the entire 2-car garage (it was over it) _plus some
| more_ carved out for the bathroom, but without any dividing
| walls or doors (even the [large] bathroom was just an open,
| wide doorway entry, no closing doors). It was huge, but
| also not quite big enough to divide into multiple spaces
| with furniture and rugs or whatever without it looking and
| feeling weird. A kind of awkward fake-luxury size. And it
| was a front-back split with a living room in the lower part
| alongside the entryway, with a fireplace and big window...
| the layout of which made it almost impossible to set up
| actual living room furniture in a decent way, so we
| basically _didn 't use that entire room_ and used the
| basement instead.
|
| The house could have been a solid 500 sqft smaller and felt
| just as large, with some tweaks to the design. Nearly every
| other house we've owned, aside from one _very_ old one (by
| American standards-1910s construction), had similar issues
| with large areas being wasted for one reason or another,
| due to how they were designed.
|
| I think the "open floor plan" trend is mostly to look
| impressive in photos and to get that "wow" factor when you
| first walk in. In practice, as commonly realized at least,
| it's terribly wasteful of space and makes houses feel
| smaller, because it's harder to get a wall between you and
| someone else, than it is in older houses. Harder to
| furnish, and arrange furnishing properly, too (not enough
| wall space, more backs of things visible)
|
| [EDIT] I'd actually liken the open-floorpan trend to the
| haphazard McMansion appearance of the outside of houses.
| One thing I've noticed looking at lots of houses over the
| years is that nice, big, older houses, or newer ones built
| with balanced and regular exterior layouts, tend to look
| smaller on the outside than they actually are--or, put
| differently, McMansion-style houses look _much bigger_ than
| they actually are. They 're _loud_ , and deceptive. Open
| floor plans are like that for interior space.
| ghaff wrote:
| >I think the "open floor plan" trend is mostly to look
| impressive in photos and to get that "wow" factor when
| you first walk in. In practice, as commonly realized at
| least, it's terribly wasteful of space and makes houses
| feel smaller, because it's harder to get a wall between
| you and someone else, than it is in older houses.
|
| I don't know. I live in an old house that I've
| incrementally opened up the first floor of. And I find
| the largely opened up space much airier and lighter and a
| generally better use of space than the more closed spaces
| were. That said, I do mostly live by myself so I don't
| really run into the issue of not being able to get away
| from other people unless I retreat to my office or small
| bedroom.
| dragonwriter wrote:
| > it's much more common for newer homes to have more
| bathrooms than older builds of similar size which obviously
| erodes living space.
|
| Newer homes also seem to be kitchen heavy, and have larger
| closets (and also bedrooms), all of which reduces shared
| (and, but for the bedroom part, total) living space with
| the same square footage.
| nemo44x wrote:
| Big kitchens with islands and casual dining space add so
| much value to a home today. People absolutely love making
| the kitchen a centerpiece room. It can be used for so
| many things.
|
| I think in older homes the thought at the time was that
| the kitchen was a utility room meant for cooking, food
| storage and dishes. And that the living room was the
| center of it all.
| ghaff wrote:
| >I think in older homes the thought at the time was that
| the kitchen was a utility room meant for cooking, food
| storage and dishes.
|
| And in some cases, it was where the servants dealt with
| such things out of site of any guests.
|
| The house I grew up in had such an arrangement. And
| although we didn't have a cook, etc., in the sixties, my
| parents did a lot of large dinner party entertainment.
| While my mother did the cooking, it would still have been
| pretty much unthinkable for guests to be hanging out in
| the kitchen much less helping to clean up etc.
| ghaff wrote:
| Yes, although the dining area is often part of a largely
| open common area that includes the kitchen and living
| room.
|
| My brother recently rebuilt a house in Maine and largely
| went with an open floor plan with relatively modestly-
| sized bedrooms and bathrooms. It makes pretty efficient
| use of space. The downside is that if someone want to
| have their own space, they pretty much have to go outside
| or retreat to their bedroom.
|
| My house is fairly standard 200 year old New England Cape
| (though some of it isn't original). I've largely opened
| up the downstairs to be a common space that I use
| heavily. Upstairs are four fairly small bedrooms and one
| small bathroom. It's fine for myself and guests. But even
| with just two people, there's really only one spare room
| which I tend to use for staging trips and various hobby
| stuff I don't want to clutter my office.
|
| I'd add that for a lot of people, one small bathroom
| would be a deal-breaker although shared bathrooms were
| considered the norm a few decades ago.
| giantg2 wrote:
| "A modern blueprint 1800sqft house, yeah, for sure."
|
| This seems to mostly be a difference in preference. The house
| is 1.5 baths and not large ones. Some layout parts are less
| efficient, like a master bedroom bigger than it has to be (so
| opposite of the numerous small rooms issue you brought up).
| But overall there is plenty of room, even a room dedicated as
| a play room. But overall this is a great example of shifting
| preferences over time since an average size house was 1970
| was about 200 sqft less that this, and I grew up in an
| 1100sqft house.
|
| Prices vary by location. You can have a 4 bed house build for
| a quarter of that in many areas of the country.
| aurizon wrote:
| Low rates have created a mechanism where large amounts of housing
| are built by corporations and entrepreneurs for rent. Most of
| them borrowed market funds at 1% or even less, often on 100%
| credit, or ~~2-3% or less mortgages and built condos, houses and
| apartments. There was such a shortage that this drove up prices -
| yet since people needed a roof overhead, they were forced to pay
| 40-50% of household income for rent. Managed in bulk by
| management companies these costs were low and yields of 5-15%
| were achieved. In addition, many were rented as AirBNB's in low
| vacancy areas earning 50%, but seasonable. This is the cause -
| what is the cure? Home inflation and the Covid stimulus has
| ramped up inflation. The usual remedy for this is rates hike, but
| they are afraid that this will create a huge underwater home
| effect. Once this starts it can become a race to the bottom.
| Corporations will write off their equity losses, owners will get
| friend like bacon - they inch them up. The call it Scylla and
| Charybdis - between two evils, as they sit, the bacon piles up...
| https://en.wikipedia.org/wiki/Between_Scylla_and_Charybdis
| zdragnar wrote:
| National company built subdivisions like you mention (often
| 80-200 homes each, all cookie cutter mini mcmansions) are
| popping up where I live, but there isn't a shortage of other
| options. People arent moving there "just to put a roof over
| their heads" as if it were a choice of last resort.
|
| People are moving into them because they _want_ to. Lower crime
| than the city, less lawn to maintain than the country, plenty
| of room indoors for the whole family during bad weather, looks
| posh (even if any craftsman would scoff at the crap
| construction).
|
| I wouldn't ever buy one myself, but some people wouldn't have
| it any other way.
| aurizon wrote:
| Yes, house construction methods need to get modern. Most
| construction automation is labor savers, drill, nailers,
| gluers, foam extruded baseboards - but, people HAVE to have a
| place to live. The move to online work has helped many.
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