[HN Gopher] Housing is at the root of many of the rich world's p...
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Housing is at the root of many of the rich world's problems (2020)
Author : ethor
Score : 306 points
Date : 2022-08-17 07:55 UTC (15 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| c7DJTLrn wrote:
| As a 21-year-old guy, it's my absolute dream to have my own home.
| Fortunately because I work in tech, I can realistically achieve
| this within a few years, though I will be paying an arm and a leg
| for one. But I can't help but think of everybody else who isn't
| in STEM or didn't grow up in fortunate circumstances like I did.
| If young people don't have a stake in society by owning a home,
| why should they give a shit?
|
| There needs to be serious reform but it won't happen because it's
| against the interests of the people with the power to do it.
| thehappypm wrote:
| It's frustrating to because housing really is one of those areas
| that you could just throw money at to solve. The government could
| build huge towers of apartments, maybe even on federal land, and
| sell them at cost. But this straight up does not happen.
| sytelus wrote:
| I didn't bought house for 10 years but when I finally did, I
| realized the ownership of house essentially meant living in it
| without actually paying for it. The house appreciated so much
| that if we sell then it will be like we actually got paid to live
| in the house! So, the moral of the story is that renting
| _sometimes_ used to make sense in the past but it no longer does
| because of massive appreciation that we now expect. This
| appreciation is also well protected because if government allows
| fall then people will push that government out. The governments
| must keep doing QEs to just stay in power. So it 's essentially
| government secured investment to live rent free. This fact then
| drives obsession to own the house. This creates need to create
| more money and do series of multi-year QEs.
| rthomas6 wrote:
| A high unimproved land value tax, like 80%+, solves the problem
| because it prevents land cost increases due to speculation.
|
| The profit from owning land becomes whatever use you put the land
| to, instead of profiting just from owning it.
|
| I could talk about Georgism for paragraphs, but this does a
| better job: https://astralcodexten.substack.com/p/your-book-
| review-progr...
| edmcnulty101 wrote:
| Housing is not the problem.
|
| Population is the problem.
|
| This is because the 'rich' people countries are having a
| population explosion despite the native 'rich' people havong a
| negative birth rate.
|
| You can do the math as to why.
|
| Housing has never been this much of a problem up until the past
| decade or two.
| tbihl wrote:
| >Housing has never been this much of a problem up until the
| past decade or two.
|
| This is certainly untrue. Possibly housing has never been _this
| particular problem_ in _this particular place_. Housing
| affordability plagued Germany of the early 20th century. Low
| quality housing of the type not possible to obtain in the US
| was widespread in US cities before the last 50-70 years.
|
| >Population is the problem.
|
| Misanthropic nonsense. Show us your 'math', if you're so sure
| of yourself. And better yet, state your underlying assumptions
| for all to see.
|
| >This is because the 'rich' people countries are having a
| population explosion despite the native 'rich' people havong a
| negative birth rate.
|
| Can you list these rich countries with 'population
| explosion[s]'? Population growth rate in the US is at its
| lowest since 1960 (start of the readily available data.)
| Considering the shift of the population toward the elderly in
| the rich welfare states like the US, we actually have a
| reckoning coming from too few working age people.
| edmcnulty101 wrote:
| > Housing affordability plagued Germany of the early 20th
| century
|
| You gotta reach back to over a hundred years ago to find an
| example?
|
| > Can you list these rich countries with 'population
| explosion[s]'?
|
| What the hell are you talking about?
|
| The population in the US is the highest it's been in history.
|
| You're using a bullshit metric like growth rate which is a
| percentage of constantly increasing number? 1% of 100 is the
| same as 50% of 2. Of course the growth rate goes down as the
| population goes up.
|
| The natives to the country have a declining birthrate. This
| is the responsible thing to do.
|
| This decreases the population and returns the US to a stable
| population density.
|
| If the US wasn't flooding the country with over a million
| non-natives every year both population AND housing would
| stabilize and NOT be a problem.
|
| Population is the issue or more specifically non-native
| population.
| Apocryphon wrote:
| Before you indulge in bargain bin Malthusianism and
| nativism, first consider the vacancy rates of housing in
| expensive metros.
|
| https://www.sfgate.com/bayarea/article/how-many-vacant-
| homes...
|
| https://sfist.com/2022/02/01/report-10-of-san-franciscos-
| hou...
|
| Next, the housing shortages in other previously-afforded
| cities are being bought up by... other Americans, some
| moving from such expensive metros. That boom that happened
| during the pandemic might finally be reversing:
|
| https://fortune.com/2022/08/16/bubbly-housing-markets-are-
| sh...
| edmcnulty101 wrote:
| This isn't Malthusian. The world can support current
| population.
|
| Just the worlds entire populations wants to be in a small
| part of the world America or Europe for some reason.
|
| Which isn't sustainable and is destabilizing those
| places.
|
| The ultimate solution is to make other places desirable
| to live, which is confusing because the US and Europe are
| only a small portion of the worlds landmass.
| namlem wrote:
| Then why did Japan face a massive housing bubble in the
| 1980s, despite low immigration? And why did their housing
| problem only go away when they reformed their zoning laws
| to allow people to build? Population is a negligible
| factor. Laws restricting land use are artificially
| constraining the supply of housing, and these laws have
| grown more common and more popular.
| edmcnulty101 wrote:
| Why not both supply and demand?
|
| The reason the laws are needed is because the land is
| being overrun by people.
|
| Lifting the laws ruins someones neighborhood, keeping the
| laws makes it unaffordable to live there.
|
| The solution is just to have less people who want the
| land.
| jason0597 wrote:
| When AMD or NVIDIA sell GPUs to scalpers, and those scalpers
| resell the GPUs and keep the profit, there's outrage about it.
| Nobody ever says to "build more GPUs" to fix the problem.
|
| When houses and new developments get snatched up by investors and
| landlords as buy-to-lets (or even by Blackrock and pension
| funds), there is little outrage and calls for restricting who can
| buy them. The same argument is rehashed over and over and over
| again. Just build more houses!
|
| I feel that there is a disconnect between these two schools of
| thought. I personally believe that, while indeed more houses
| should be built, we should also have a serious discussion about
| whether houses should be sold en-masse to very wealthy investors
| Atheros wrote:
| Building more GPUs requires billions of dollars of investment
| and many years to build a new fab. Building more houses
| requires only several hundred thousand dollars to form a new
| construction company and train some workers. So it's not a good
| analogy. It _is_ physically possible to just build more housing
| in high-demand markets.
|
| Separately, GPU scalping is (was) only happening because of
| cryptocurrency booms which everyone knew were temporary. Not
| many people are naive enough to scream for AMD or NVIDIA to
| spend billions of dollars on new fabs because of a temporary
| trend. The housing supply issues, on the other hand, have been
| brewing for decades and are not temporary.
| seper8 wrote:
| > Building more houses requires only several hundred thousand
| dollars to form a new construction company and train some
| workers.
|
| Hahahah look at this guy!
|
| Bet you never tried to get a permit for home construction?
| Shit can take YEARS in most states/countries. Even worse if
| you dare suggest to make apartment complexes. N I M B Y
| namlem wrote:
| One, chipmakers are indeed building new factories to increase
| production of chips, so your entire premise is incorrect. Two,
| the people criticizing the scalpers are wrong. NVIDIA and AMD
| were simply generous enough to not raise the price of their
| products even though they could have, demand was high enough to
| justify it. Scalping GPUs is fair game. Three, the number of
| houses being bought by investment firms is negligible. It's not
| having a significant effect on prices. It's the land use
| restrictions that make building housing difficult or impossible
| that are the problem. Particularly those that restrict
| multifamily housing.
| denimnerd42 wrote:
| huh.. everyone knows scalpers business model will die when they
| can build more GPUs
| pochekailov wrote:
| Nothing will change while the homeowners have more political
| power than the renters.
|
| Even in the cities where the renter population is bigger than the
| homeowners, such as in Seattle, half of the votes come from
| people of > 65 years old (all of whom are homeowners, likely more
| than one home). Young people simply won't vote at all.
|
| There is very little incentives for the young people to vote.
| Even if you cancel all the regulations right now and allow for
| unlimited constructions in the cities like Seattle, SF of NY, one
| will need about 10 years or longer to build enough apartments for
| the price to go back to affordable (which is 2-3 years salary of
| an average worker in the area). So the after-next generation will
| profit from the effort of the current renter generation.
|
| Nevertheless, I think young generation needs to engage in the
| politics with the uncompromised goal to crush the housing price,
| to prevent the economic collapse of the "rich" world and prevent
| entire Earth from sliding into the dictatorship. Such is life.
| marto1 wrote:
| All this is true, but you missed a crucial piece, addressing
| your "need to engage" - political energy capacity coming from
| the young. I'll be more than glad to be proven wrong, but I
| don't think young people have driven any sort of political
| change in the west for at least the last 20 years. There are
| many cases where they get used as a lever, but actual movements
| like "occupy wallstreet" got squashed fairly fast.
| Loughla wrote:
| 100% accurate. While popular society takes small steps
| forward in regard to social and political changes, the actual
| politics has not changed from when I was a kid.
|
| There are more politicians willing to admit they support gay
| people, I guess. But that's about it. Deep down where it
| counts - fiscal policy - nothing changes.
| namlem wrote:
| Tens of millions of Americans gained access to healthcare
| due to policy changes. The IRA just further expanded access
| to healthcare.
| rhacker wrote:
| Let's multiply Seattle housing count by 3. I'm sure you'll
| still be able to get from point a to point b in a day (if you
| survive the drive).
| kmeisthax wrote:
| [laughs in Phoenix]
|
| In all seriousness, no. The way you multiply housing count is
| by making buildings taller and closer together, not by
| spreading them further out. This is how we _used_ to build
| cities before cars and roads ruined them.
| nemo44x wrote:
| It's because most people don't want to live in small boxes
| stacked on top of each other. The market responded to what
| people wanted and it was larger single family homes with
| yards and living space. An automobile to get you to other
| places for shopping and entertainment. This is what most
| people people want.
|
| I agree though that a lot of suburbs are just wastelands
| and I would consider them to be depressing places to live.
| But people seem to love them for some reason. A lot of
| these places don't even have sidewalks but I guess it makes
| sense as there isn't really anywhere to walk to.
| kenned3 wrote:
| This!
|
| I love how people seem to feel they can enforce their
| views of how a city should be build on others.
|
| The fact of the matter is very clear.. we have so many
| detach houses because that is what people WANT.
|
| For some odd reason there is a subset of the population
| who feel entitled to dictate how OTHERS should live.
| These people go on and on about "increasing density"
| while ignoring that some don't want to live like this.
| JasserInicide wrote:
| Break out what "homeowners" actually is. It's increasingly
| becoming these shell companies and entities like Blackrock. We
| need to ban that shit immediately. The deed of a house should
| have a fucking person's name on it, not a company's.
| namlem wrote:
| Investment firms buying homes is a symptom, not a cause. The
| only reason they do that is because local government
| artificially inflate the value of homes through supply
| restrictions.
| throwaway6734 wrote:
| Add to this the upcoming social security and Medicare crises,
| the constant rise in healthcare prices driven by elder care,
| and a shrinking population that needs to support more retirees.
|
| We're in a weird place in the US where young people are
| unwilling to flex any political power to stop elder people from
| financially taking advantage of them.
| pochekailov wrote:
| Only one question: why are they unwilling? Is it that hard?
| They won't be killed or tortured, like in Belarus or Russia,
| then why not?
| choko wrote:
| Perhaps they don't believe political participation will
| help, or maybe OP is simply incorrect in their assertions.
| nradov wrote:
| Young people often vote against their own economic self
| interest because the major political parties successfully
| leverage splitter social issues. Young voters are no
| different from old voters in that regard.
| throwaway6734 wrote:
| I think a lot of young people just are ignorant about the
| situation coupled with the rise of populists on the left
| and the right, there's always some abstract other to blame
| without a focus on concrete problems and possible
| solutions.
|
| Whenever I talk to my young friends about Social Security's
| trust running dry in a decade they just handwave it away
| with stuff like: the government will just print more money
| or blame jeff bezos
| wyre wrote:
| As a young person (28), I think it's because we feel
| powerless in the face of what is to come.
|
| Young people have no power because we largely are in the
| renter and working classes; while the home and business
| owners fight against every mention of renter protections,
| increased housing, worker protections, etc.
|
| Not to mention we see the world we are growing up into is
| quickly becoming more and more inhabitable while living
| with the truth that the fossil fuel industry has been
| lying about climate change for 50 years.
|
| Who are the populists you're talking about? I can only
| think of Bernie and Yang. Trump isn't a populist.
|
| We aren't ignorant either. We are a product of the social
| media machine and a decreasing faith in educational
| institutions. I think a lot of people are too scared of
| the future so they don't think about it. Blaming an
| abstract for political problems has been a thing for long
| as politics as been around.
| megaman821 wrote:
| The millennials are the largest voting block in the US.
| What is everyone else supposed to do when the group with
| the most voting power "feels" powerless? I sure hope
| millennials are just late bloomers. Where are the great
| political leaders, engineers, scientists, artists and
| writers from the millennial generation? All these future
| problems are hard but solvable when there are people
| working to solve them.
| randomdata wrote:
| _> the group with the most voting power "feels"
| powerless?_
|
| It seems like a strange thing to have powerless concerns
| about as voting only selects a representative. In my
| experience, the most likely candidates are all reasonably
| suited to the job, leaving it to matter little who
| ultimately wins. Even if you are powerless it is not that
| big of a deal, being the most inconsequential part of the
| process.
|
| The real work happens _after_ the vote has taken place
| when you have to start engaging with the selected
| representative on the regular to make your perspective
| known. It is guaranteed that you didn 't elect a mind
| reader. It is not clear if the younger generations are
| aware of that. This may be why they feel powerless.
|
| It my youth the message was always "contact your local
| representative", but in recent times that message has
| changed to "how could <insert political figurehead> do
| this to us?" There is some apparent degree of learned
| helplessness at play; perhaps because greater media
| exposure gives us insights into places with strong
| dictatorships and we project their conditions upon ours.
|
| Invariably, those with enough land ownership ties will
| ultimately run into municipal issues that will require
| approaching council, at very least forcing a deeper
| understanding of government upon them. This may also help
| explain why those who own things are apparently more
| engaged politically.
| rco8786 wrote:
| Definitely not that simple. To use your same argument though,
| it's not just homeowners - it's homeowners _and aspiring
| homeowners_. Which is nearly everyone.
| pochekailov wrote:
| The longer I live the more I am finding the universe is
| working on extremely simple few principles; their relations
| create complexity.
|
| Aspiring homeowners will never become homeowners if the price
| is exclusionary.
|
| Take SF: with average salary of 75-79K, the apartment cost
| starts from 1.1M. Only 8% has salary > than 100K, that makes
| the remaining 92% the "aspiring" homeowners.
|
| They will stay "aspiring" for the rest of their life. The
| only think they (or rather, "we") can do - make sure that
| post-zoomer generation don't have to be "aspiring" for their
| entire lives.
| api wrote:
| The only rational move is for aspiring owners to leave SF,
| and not for another crazy expansive city.
|
| There is a gigantic country and world out there.
| ryukafalz wrote:
| I would say a non-exclusionary city would work just as
| well. Tokyo is the most expansive city I can think of and
| they've managed to keep prices down.
|
| Still, fighting to make US cities more livable is a
| laudable goal.
| randomdata wrote:
| _> and they 've managed to keep prices down._
|
| Perhaps it would be more accurate to say that they
| managed to crumble their economy which brought the value
| of housing down with it? They had a _massive_ housing
| boom before the "Lost Decades". Japan is no stranger to
| asset prices rising out of control.
|
| That said, when I have looked at Tokyo pricing it has
| always been in line with high priced North American
| cities, only configured differently. The difference in
| configuration means that the sticker price is often
| lower, but you are getting less for that lower price.
| Apples to apples the prices have always shown to be in
| the same ballpark.
| api wrote:
| It's a laudable goal but I have serious doubts about its
| achievability in cities that are already overpriced.
| Every single incentive leans in the direction of keeping
| prices high since not only would lower prices cost
| homeowners money but would also possibly cut into tax
| revenues and could financial ruin people who purchased
| under these high price regimes.
|
| It's a bit of a ratchet. Once the prices go high, it's
| _very_ hard to turn back. The only way out is probably to
| inflate the currency until a loaf of bread is $15 but
| housing is reasonable again, or for the state or federal
| government to offer some kind of huge tax write-off for
| depreciating home values. The latter is unlikely given
| the financial crunch faced by governments.
| rhacker wrote:
| Or raise rates. That's actually affecting housing prices.
| No one can sell at the price they wanted because no one
| wants a loan this crazy. Unfortunately this will have
| other consequences.
| ryukafalz wrote:
| >Every single incentive leans in the direction of keeping
| prices high since not only would lower prices cost
| homeowners money but would also possibly cut into tax
| revenues and could financial ruin people who purchased
| under these high price regimes.
|
| Not really. The way out is higher density. What we care
| about isn't _land_ price, it 's _housing_ price - in
| other words, how much does it cost for people to get as
| much housing as they need. Lowering housing costs and
| rising land costs are perfectly compatible if you don 't
| artificially restrict lots to 1 unit as most of the
| country has done.
| randomdata wrote:
| Houses are ultimately purchased with wealth, so labour
| value input isn't all that significant.
| newsclues wrote:
| I'm not sure.
|
| At a certain point, if landlords strangle renters it can make
| hiring hard (workers can't afford Cost of living if rents are
| too high), thus making the business environment uncompetitive.
|
| Will the business community have more power than landlords?
|
| I think so, eventually.
| nradov wrote:
| Peter Thiel agrees and has shifted his investments out of the
| Bay Area because high housing prices make it too expensive to
| hire workers there.
|
| https://sf.curbed.com/2018/3/19/17138290/peter-thiel-
| slumlor...
| bbarn wrote:
| So far the business community's response has been "no one
| wants to work." because they can't afford to pay salaries.
|
| Ultimately, people vote with their feet, or government
| intervenes on behalf of those who would lose money.
| newsclues wrote:
| In Canada business and government says this stuff, to
| justify importing immigrants to work for low wages and
| often lower standards of living.
| randomdata wrote:
| Importing immigrants in Canada requires that the employer
| provide suitable housing for the imported workers, so
| that brings us back to the earlier comment.
| newsclues wrote:
| In a lot of documented cases a tim Hortons franchise
| owner owns rental housing and rents it at outrageous
| rates to temporary foreign workers.
| danielrpa wrote:
| If you are free and able to vote but won't do it, it's hard for
| me to feel too much pity for your situation.
|
| I started voting when I was 16 (my birth country allows that)
| and voted on every single election until I immigrated to the US
| - and then voted on every US election since becoming a citizen.
| francisofascii wrote:
| Well, you can't vote where you don't live. The large problem
| is the lack of appropriate land taxes in high cost
| municipalities. And you can't vote to change that until you
| live there, and once you live there, you are much less
| incentivized to vote against your self interests.
| nradov wrote:
| Most of the laws regarding property taxes are set at the
| state level, not the municipal level. In California, a
| voter in Modesto can influence tax rates in San Francisco.
| Local votes only control minor things like special
| additional school district assessments.
| namlem wrote:
| That's not true in most states, that's a California
| thing. Property taxes usually are set at the local level.
| lotsofpulp wrote:
| That is a California specific phenomenon due to various
| caps they put at state level on the rate at which
| property taxes can be increased
| nradov wrote:
| Even in other states which lack property tax caps, the
| basic framework within which tax rates are set is
| controlled at the state level. For example, some
| economists have proposed replacing property taxes with
| land value taxes but it would be impossible for a single
| city to do so without enabling state legislation.
| lotsofpulp wrote:
| Interesting. I assumed counties/cities are relatively
| free to set property tax rates according to their budget,
| and the city needing to compete with other cities is what
| keeps them relatively in line.
| TuringNYC wrote:
| That may be how things work in California, but it
| definitely does not work like that everywhere in the US.
| For example, here in NJ, property taxes are partly set by
| the state, but the schools portion is set my the county
| and township.
| Kon-Peki wrote:
| Yeah, here in IL property tax is 100% local (state law
| sets limits and requirements only). And everything is an
| independent government body with taxing authority.
|
| The city collects its taxes, the school district collects
| its taxes, the library collects its taxes, fire district,
| road department, forest preserve, etc. None of them can
| tell the other to do anything - they are all independent
| with independent funding. The county has its own taxes,
| but also has the function of actually providing the
| payment, billing and distribution services. So you only
| have to make a single payment.
|
| By the way, property taxes in Florida work nearly the
| same as California and they don't have any problem
| building lots of housing.
| lkbm wrote:
| > If you are free and able to vote but won't do it, it's hard
| for me to feel too much pity for your situation.
|
| What if I vote, but people with interests aligned with mine
| tend not to? What if those people not voting are acting as
| rationally as the people who vote frequently?
|
| Consider these two groups, who get the same number of votes,
| live under the government for the same amount of time, but
| rationally have different incentives to vote:
|
| Home-owner:
|
| * Bob moves in, lives there ten years.
|
| Renters:
|
| * John moves in, lives there two years, moves out.
|
| * Phil moves in, lives there two years, moves out.
|
| * Mike moves in, lives there two years, moves out.
|
| * Jess moves in, lives there two years, moves out.
|
| * Fred moves in, lives there two years, moves out.
|
| If we assume these people are self-interested, Bob will, on
| average, vote more than the renters, because Bob values
| future-Bob's well-being more than John values Fred's. It's
| only through the altruism of John, Phil, Mike, and Jess that
| Fred will get to benefit from a government that accounts for
| his interests.
|
| It's also true that each renter has an incentive to vote for
| things of short-term value and to discount long-term
| benefits, so maybe it's okay that Bob ends up more
| represented. But "John isn't voting as much as Bob" isn't a
| case of John being less responsible than Bob. It's that they
| legitimately have different incentives.
| pochekailov wrote:
| Haha I am still not a citizen, so can't vote myself. I was
| trying to encourage my friends, but they were often too busy.
| They would vote for Hillary (or even for Trump), but never
| for a local mayor.
|
| Sometimes I am considering running myself for a local
| government after getting my citizenship, with the only goal:
| drop housing price at my city for at least 70%. Once achieved
| - retire from politics :).
| dfxm12 wrote:
| I've got the political party for you:
| https://en.wikipedia.org/wiki/Rent_Is_Too_Damn_High_Party
|
| https://www.youtube.com/watch?v=79KzZ0YqLvo
| lambertsimnel wrote:
| Some people find it difficult to vote, for reasons I suspect
| disproportionately affect renters. Where people must be
| registered with their home address in order to vote, renters
| are at more risk of being unregistered at election time,
| because they move home more frequently. People experiencing
| economic hardship (who are more likely to be renters) are
| less likely to make time for voting (especially if polling
| stations are congested or at inconvenient locations) or for
| prompt electoral registration.
| woofyman wrote:
| There's early voting.
| mikkergp wrote:
| I was curious on the data on this. I mean difficulty voting
| certainly is a major narrative and passes the smell test
| but the survey in this article suggests 3/4's of non voters
| say it is easy to vote:
|
| https://thehill.com/opinion/campaign/561886-whos-not-
| voting-...
|
| This is however contrasted by the confusing bit that not
| being registered was the biggest reason people didn't vote,
| above apathy and political disengagement.
| ghaff wrote:
| > not being registered was the biggest reason people
| didn't vote, above apathy and political disengagement.
|
| And it seems likely they didn't make the (often minimal)
| effort to get registered because of apathy or political
| disengagement.
| Loughla wrote:
| Let's have this thought experiment played out.
|
| What did it look like for you to get registered to vote?
| ghaff wrote:
| Well, I get a form every year from my town to confirm my
| particulars. I sign it and send it back. I guess if I
| weren't registered I'd go down to the town hall and do
| so. If I couldn't for some reason, I assume I could call
| the town clerk, and they'd send me a form in the mail.
| When I go into Cambridge around election time, I
| frequently see various tables set up to register people.
|
| Obviously registering (and voting) is harder for some
| people than others but registering to vote is not, in
| general, an arduous process.
| Loughla wrote:
| >I guess if weren't registered I'd go down to the town
| hall and do so.
|
| What if your job wouldn't let you off during the town
| hall's regular hours? What if you don't have
| transportation? What if you don't have the necessary
| forms of identification?
|
| > I assume I could call the town clerk, and they'd send
| me a form in the mail
|
| What if you're not already registered and cannot just
| fill out a form to send in? What if you have to provide
| proof of residency in the form of a bill in your name and
| current address that matches your ID? What if you don't
| have an ID because you can't get to the DMV because you
| can't get time off work to go get it, or you don't have
| transportation, or you don't have internet access to set
| an online appointment with the DMV, or your credit is bad
| enough that the bills are only in your roommate's name to
| avoid headache with those companies?
|
| I guess my point is, it's very flippant to just say,
| "well it's easy for me, so it's probably pretty easy for
| everyone else, so it must be apathy as the only
| solution."
| ghaff wrote:
| As I wrote, it's doubtless harder for some than others.
| But, yes, I do think in general most people who don't get
| registered would probably (for perhaps understandable
| reasons) decide that it's too much of a burden to vote as
| well. If it's literally impossible for someone to get
| registered, it's probably equally impossible to vote
| anyway.
| mikkergp wrote:
| > I guess my point is, it's very flippant to just say,
| "well it's easy for me, so it's probably pretty easy for
| everyone else, so it must be apathy as the only
| solution."
|
| Right but the data suggests that apathy is the primary
| reason. I think we should make it easier to vote, but
| it's not empathy if the people you're trying to empathize
| with don't actually feel that way.
| pochekailov wrote:
| We probably need some service (an app or a site) that gives
| clear instructions on how, where and when to register.
|
| Yes, it is harder for renters, but it is designed to be
| harder. This is to prevent renters from having political
| power and making homeowner's houses more expensive. One
| more reason to fight, from my point of view.
| choko wrote:
| We have all that and more. There are even groups that
| seek people out to teach them to vote. When you file a
| change of address with the post office, they send you a
| packet with all kinds of moving resources including how
| to re-register. In addition, a really quick Google search
| gives you all you need to know to register and vote. I
| don't understand why some people pretend the process is
| difficult. If people still aren't voting it's due to lack
| of interest, not because it's confusing or difficult.
| dwater wrote:
| 55% of Americans have hourly jobs, most of which do not
| control their hours. There are many polling places,
| particularly in underserved communities, where it can
| take multiple hours to get to vote. Elections are nearly
| always held on workdays. So if you are a single parent
| working an hourly wage job from 8am to 6pm and the polls
| close at 7pm, would you vote? The voting process is
| difficult in America for some people and easy for others.
| choko wrote:
| The vast majority of states have no excuse absentee
| voting and/or early in-person voting options. In
| addition, employees are legally required to allow time
| off to vote, though in the overwhelming majority of
| states, the early voting options make this unnecessary.
|
| https://www.vote.org/early-voting-calendar/
|
| If people want to participate, they have many options.
|
| I've found that if you need to argue edge cases (single
| parent, hourly schedule that almost completely overlaps
| poll hours, no absentee, no early voting or mail-in, and
| an employer that violates law) as you have in your post,
| you do not have a compelling argument.
| powerhour wrote:
| Unfortunately even states with all-mail voting don't see
| a large increase in turnout. For example, WA state has
| had all-mail voting since 2011 and here's the numbers:
| https://www.sos.wa.gov/elections/voter-participation.aspx
| lesuorac wrote:
| While I'm a big fan of vote by mail, it's not the only
| thing. Having early voting options would also help that
| hypothetical person as they can vote in person on a day
| they don't work.
| AlexandrB wrote:
| I don't get why there's a "process" at all. In Canada,
| when I change my address with the CRA (our version of the
| IRS), my voter registration gets updated automatically.
| Why is there a separate step in the US? I've also voted
| when my CRA address was out-of-date at the time, and this
| was fine too as long as I brought government-issued ID or
| a recent bill sent to my new address.
| choko wrote:
| Like most things in the USA, voting is a local matter,
| not federal. It would be prohibitive for the post office
| to manage this across 50 states with differing rules.
|
| States in the US have more atonomy than states in most of
| the rest of the world. So much so that it often doesn't
| make sense to compare national US figures to national
| figures in other nations - education being a good example
| - https://learn.uvm.edu/blog/blog-education/vermont-
| eighth-gra...
|
| But the same applies to voting. The federalist system
| under which the US operates allows communities and
| localities the flexibility to operate in a manner
| consistent with local needs and values.
| lambertsimnel wrote:
| You're probably correct in many (or even most) cases, but
| I still believe that it's too difficult for some people,
| for two reasons:
|
| 1) Some people are under more stress than others, and are
| less able to summon the effort to vote. Admittedly, this
| does also include people in rather different
| circumstances, such as elderly homeowners who become
| unwell at election time (especially after the postal vote
| deadline).
|
| 2) Voting arrangements aren't uniform between countries
| (or even within one country), and travelling some
| distance to a polling station and then queuing to vote is
| a burden some voters might experience much more than
| others.
| Retric wrote:
| It is unreasonably difficult. There is no reason you
| should need to jump through any extra hoops beyond a
| change of address.
| choko wrote:
| Why stop there? Perhaps government employees should go
| door to door and record my vote for me. Sending something
| in the mail is unreasonably difficult.
| Retric wrote:
| Because this would actually save the government and thus
| taxpayers 100+ million dollars a year?
|
| A change of address is informing the government you moved
| and happens millions of times a year. Automating it
| doesn't just save citizens _10's of millions of hours per
| year_ it also saves all the effort by all these different
| agencies when people communicate the same information to
| multiple agencies.
| alistairSH wrote:
| Not sure why you're being downvoted. Whether it's
| intentional or not, voting in the US is not always easy for
| several reasons...
|
| 1 - No national election day holiday, so wage-earners often
| have to forgo income to vote.
|
| 2 - Long lines, too few voting stations, exacerbate point 1
|
| 3 - Inconsistent voting laws as you cross municipal
| boundaries (mostly state to state).
|
| 3b - particularly WRT mail-in/absentee ballots.
|
| 4 - constant undermining of the voting system as a whole by
| the GOP. This has really ramped up in the last ~8 years,
| but it's been there much longer.
|
| The first 3 are more likely to impact poorer citizens, who
| are also more likely to rent their homes.
|
| We'd do well as a country to allow nationwide mail-in
| voting.
| jimbob45 wrote:
| _1 - No national election day holiday, so wage-earners
| often have to forgo income to vote._
|
| PSA: You can register as a poll worker and work election
| day to guarantee you have time to vote. There's a high
| chance that your work will give you the time off to go
| work as a poll worker without it eating into your PTO
| (and you get paid to boot!).
| PuppyTailWags wrote:
| > There's a high chance that your work will give you the
| time off to go work as a poll worker without it eating
| into your PTO (and you get paid to boot!).
|
| As an ex-linecook, LOL, there are too many assumptions
| baked in here to be in the realm of reality for working
| class jobs
| Loughla wrote:
| Holy cow, not even a little bit. This is so, so middle-
| to upper-middle income centered it's not even funny.
|
| 1st you are assuming people have one employer to worry
| about, not multiple.
|
| 2nd you are assuming people have a set schedule daily or
| weekly.
|
| 3rd you are assuming people have PTO.
|
| 4th you are assuming the employer will give any amount of
| shit about volunteerism.
|
| 5th you are assuming they won't be given a point or
| docked for missing a shift.
| valarauko wrote:
| I'm curious as to what the solution in this case is then.
| If election days were holidays, wouldn't the same people
| still have the same issues with employers? Do shift
| workers not work on holidays?
| alistairSH wrote:
| This is why I suggested nationwide mail-in voting as a
| solution.
|
| A national holiday might help some workers, but not all.
| Gas stations still need staffed, etc.
| valarauko wrote:
| Realistically, how would that work for these same group
| of people? They'd have to know well in advance that they
| would need postal ballots and complete and return them in
| advance of election day. Would shift workers working
| multiple jobs be best served by mail-in voting? tbf I'm
| not sure if there is a better way, but it seems relying
| on mail-in ballots helps some people and alienates a
| different group of people.
| alistairSH wrote:
| I was imagining the ballots would be auto-shipped based
| on voter rolls (which get updated with DMV records in
| many states - this should also be mandatory).
|
| So, check mail box as normal. Receive ballot. Research
| candidates (or not) and fill out. Drop in the mailbox.
| Not much different than paying paper bills.
|
| Who were you imagining would be alienated by mail-in
| voting?
|
| We could do mandatory extended timeframe/hours in-person
| voting but that costs a lot more (paying to staff the
| sites, rent locations because you can't just borrow a
| school cafeteria for a day like we do now, etc).
| valarauko wrote:
| Are you suggesting mail-in ballots as a universal option
| that covers everybody? That seems unfeasible
| logistically. Does any large country offer universal
| mail-in ballots?
|
| I think mail-in ballots best serve voters in an
| environment where they are the norm, rather than the
| exception. For example, the campaign cycles, like
| debates, that target the large segment of undecided
| voters right before election day. The mail-in voter has
| to be more informed about candidates and policy than an
| average voter to come to an equivalent informed decision
| about their vote weeks before the average voter. Yes, if
| the goal is to simply increase voter turnout, universal
| mail-in ballots are probably great. I wonder if that best
| _serves_ the voter, though - hence my question.
|
| My familiarity is with the Indian electoral system, which
| is highly regarded (at least within the country). Mail-in
| ballots are an option for a subset of people, but they
| make up for it by making polling booths readily
| accessible - your booth is just a short walk away.
| Election days are holidays, but I'm sure it still impacts
| workers in similar ways. Still, voter turnout is usually
| not too bad. Expanding mail-in voting has been discussed
| as an option for the very large floating population of
| migrant workers, but we don't have a solution yet. The
| logistics of offering universal mail-in ballots for a
| country approaching 1.4 billion is daunting. Already, the
| General Elections need to be spaced out over several
| weeks to allow electoral officials and poll workers to
| cover the entire country.
| alistairSH wrote:
| _Are you suggesting mail-in ballots as a universal option
| that covers everybody? That seems unfeasible
| logistically. Does any large country offer universal
| mail-in ballots?_
|
| Yes, universal. Oregon (USA) has used universal vote-by-
| mail for many years now. It's widely considered one of
| the best systems in the US. Voter rolls are updated by
| the DMV (or via state websites), everybody receives a
| ballot by mail prior to the election. Voters can return
| the ballot by mail, at a drop-box, or they can choose to
| vote in-person. Voters don't have to vote any earlier -
| as long as the ballot is post-marked by election day, it
| will be counted.
|
| https://en.wikipedia.org/wiki/Elections_in_Oregon
| https://states.aarp.org/oregon/election-voting-guide
| namlem wrote:
| Early voting. Let people cast their vote for the two
| weeks preceding the election.
| valarauko wrote:
| How does that work? The polling booths are staffed and
| open two weeks for walk ins?
| namlem wrote:
| Yeah. Though you'd need much less staff since you'd be
| getting lower volume.
| doliveira wrote:
| Election day not being a holiday in the USA is weird
| rjbwork wrote:
| No it's not. From the start the US was intended to be
| oligarchical - hence the franchise originally only being
| extended to white landowning males. There has always been
| a strain of politics dedicated to keeping barriers up to
| enfranchisement.
| Spivak wrote:
| Not being able to vote electronically is also really
| weird since ballots are only paper at the edge. Yes there
| are downsides, just like when you mail-in you give up
| non-repudiation, but the fact that it's not even an
| option is crazy. I personally would be more than happy to
| give up my personal ability to vote anonymously if I
| meant I could just sign up for a vote.gov account at the
| BMV, login, vote and be done with it.
| Loughla wrote:
| I absolutely do not want electronic voting. I
| legitimately believe that system would be kept behind a
| black box, and would be far too likely and liable to be
| cheated and gamed. At least with a huge stack of paper
| that is stored for an approved number of years there is
| an option for independent verification.
| Spivak wrote:
| How about vote by email? Go to a vote.gov, fill out your
| ballot, it gives your a PDF you can review, you email
| that to your board of elections, they reply with a "got
| it!", and they're counted like all other mail-in ballots
| on election night.
|
| Same process, just s/USPS/SMTP/. But if that's fine, why
| make the user jump through the email hoop? Hell, digital
| ballots would give you stronger guarantees for verifying
| your vote. Publish all the ballots publicly and base the
| final tally for digital votes on that public ledger.
| Every voter will have a code they can use to pull up
| their specific ballot and see that it's correct. And
| since the codes are public that's not actually enough to
| prove it was yours (yay non-repudiation).
|
| No cryptography, no hashes, no zero trust proofs. The
| internet is only used to move a document from A->B and
| security model could be explained to the least technical
| person since it's a direct analogue of how you would do
| it IRL.
| valarauko wrote:
| The Indian system is a hybrid model - you vote through an
| electronic machine which also prints out a confirmatory
| paper vote that you can confirm through a porthole and
| which drops into a strongbox. In case of conflict or
| concerns, the paper votes can be tallied.
| lesuorac wrote:
| I dunno, having election day be a holiday seems like a
| poor solution as plenty of people do work holidays and
| probably the same people who have trouble finding time to
| vote.
|
| Mostly, I don't think we should be encouraging a ton of
| people to all show up at the same place at the same time.
| That's just asking for long lines and other issues.
|
| I think it'd be much better to just drag voting out of
| the course of a month and actually encourage people to
| not show up on election day. Or to just vote by mail
| more, I haven't been a poll since I was a child (and back
| then we had levers!) but from what I hear now half the
| time you're just filling out a mail ballet in person now.
| doliveira wrote:
| > plenty of people do work holidays and probably the same
| people who have trouble finding time to vote
|
| It's a country with 300 million people, there's plenty of
| people for anything. I'd wager that in percentual terms,
| the absolute majority would benefit from an election day
| holiday.
| dghughes wrote:
| It isn't in Canada either mostly I'd say because there's
| no set date. The government can lose a confidence vote
| and an election can be called at anytime (a date set in
| the future not immediate). But we do get a paid hour or
| two off work to go vote that's law.
| alistairSH wrote:
| The US has a mix of dates. All elections are effectively
| at the state or local level. Primaries are all over the
| calendar. General elections for President are all on the
| same Tuesday in November.
|
| So, a national holiday really only makes sense for those
| presidential election years. Or, we could declare "first
| Tuesday after first Monday in Nov" as an annual holiday,
| and many states would likely line up their fall elections
| on that date. Primaries would still be a mess, but they
| always will, as they're not always open elections anyways
| (some states require party membership or declared party
| affiliation to vote in primaries).
| coryrc wrote:
| Then why does Washington state also have low voter
| participation?
|
| Nine of that applies to a Democratic-run state with mail-
| in-only voting.
| lesuorac wrote:
| [Citation needed]
|
| From what I see WA had a turnout of 75% compared to USA's
| 66%.
|
| https://docs.google.com/spreadsheets/d/1h_2pR1pq8s_I5buZ5
| agX...
| coryrc wrote:
| You're cherry-picking the most interesting election of
| the last five years. The recent primary was ~38% turnout.
|
| https://www.seattletimes.com/seattle-news/politics/which-
| wa-...
| buildsjets wrote:
| I have anecdotally heard from some Republicans in
| Washington that they do not bother to vote, especially in
| non-presidential election years, as they feel that a
| Democrat will win the election anyway.
|
| This is visible in county-level voting rates. The
| counties east of the Cascade mountains tend to be more
| conservative than the counties west of the Cascades, or
| areas surrounding metros like Spokane, and they also tend
| to have lower voter participation rates.
|
| https://www.washingtonpost.com/business/2018/10/15/where-
| peo...
| banannaise wrote:
| I voted, but somehow people keep saying my opinion doesn't
| matter because I, as a demographic, didn't vote.
| wldcordeiro wrote:
| One thing that's missed in the renter vs homeowner thing is
| that the rules of election systems favors the homeowner too.
| Renters move more and will need to register to vote over again
| and the added inconvenience will stop plenty from even
| bothering.
| kixiQu wrote:
| I will note that Washington state makes this very
| straightforward; universal mail-in voting with real easy
| registration has definitely led to _me_ , a disorganized
| young person, voting when I wouldn't have otherwise.
| dionidium wrote:
| A commonsense way to describe what you just said is that
| homeowners are more stable and stationary and therefore more
| invested in the long-term future of their communities than
| renters are, which is an argument that urbanists laugh at,
| but one that seems very clearly to be true.
|
| I think people basically know this, if they're allowed to be
| honest with themselves. Nobody who ever lived in a college
| dorm and then spent a "magical year" in NYC and then bought a
| house in a suburb thinks they were just as invested in those
| first two places as they are in the third.
| cheriot wrote:
| As long as people can't afford to buy they're "less
| invested" so no reason to address housing affordability...
| In the modern housing market that's a self fulfilling
| prophecy.
|
| How about that principle of one person, one vote.
| 29athrowaway wrote:
| Then each renter will become a homeowner, they will feel very
| comfortable, have 4 kids, and now you will need 4x more units.
|
| Then their kids will have 4 kids, and you'll need 16x more
| units with respect to where you started.
|
| Few generations after you have a much deeper problem that the
| one you started with. Now you live in a country with a
| population of over 1 billion, where protests cannot be
| controlled anymore and now you need a totalitarian regime with
| a massive surveillance and censorship apparatus to keep things
| under control.
|
| The alternative is that everyone is stressed out and feels the
| pressure of a system that is over capacity.
|
| Have you heard of Earth day? In 2022, it was April 22. It means
| that by April 22 we already consumed our environmental budget
| for the full year.
|
| If we continue like this it's not going to be long until
| there's mandatory population control.
|
| NOTE: this was edited
| bushbaba wrote:
| Well the birth rate is less than replacement rate. Without
| illegal immigration the US would not be seeing a population
| growth.
| TuringNYC wrote:
| >> Then each renter will become a homeowner, they will feel
| very comfortable
|
| Not sure about the entire comment, but the above line is the
| clutch item. Once a renter turns into a homeowners, things
| change drastically. In the US you are typically highly
| leveraged once you buy a home. That means a 20% drop in home
| value wipes out all your equity. So once you buy into the
| system (esp with leverage) you have a _huge_ incentive now to
| perpetuate the system that once enslaved you. Now you become
| the prison guard. Sadly, even the prison guard is in the
| prison of debt for many years, thus has to maintain the jail.
| sleepydog wrote:
| I don't understand. The population in wealthy countries is
| growing very slowly.
|
| https://datacommons.org/tools/timeline#&place=country/USA&st.
| ..
|
| What makes you say that housing costs are the cause? I've not
| heard of that argument before.
| wyre wrote:
| Reminds me of this [1] post yesterday that because sedans
| can only fit 2 car seats parents don't have a third child
| because they can't afford a bigger car.
|
| Maybe, parents are having less kids because they can't
| afford to move to a place with an extra bedroom.
|
| [1] https://news.ycombinator.com/item?id=32491901
| 29athrowaway wrote:
| Because cost of life is high. Make cost of life lower and
| see what happens.
| rowanG077 wrote:
| So your point is we need to keep people in such shitty
| situations they won't want to bring kids into this world?
| 29athrowaway wrote:
| My point is that the system is overcapacity, that's the
| reality you like it or not.
|
| If you want to watch Netflix and forget about what's
| happening outside, that's your choice. But we are
| completely destroying this planet in every way.
|
| There are lots of mouths to feed every day depending on
| systems that are not sustainable and may collapse.
| https://www.youtube.com/watch?v=RjsThobgq7Q
|
| If you go camping and have limited amount of food rations,
| water, etc, you will make sensible decisions about how to
| consume the supplies you have. This is very similar.
| reedjosh wrote:
| I find it funny that I agree with you in some ways that
| others might not.
|
| For example, I agree people should ditch the dumb super
| hero movies and do something better. Maybe garden or
| learn to weld or something.
|
| But I completely disagree with you that humans are
| destroying the planet in an unsustainable way.
|
| Sure, there are huge challenge and excesses, but the
| human spirit should also bring solutions.
|
| Particularly in the face of both energy and water
| shortages, we should be building coastal nuclear plants.
|
| Not only do they provide clean energy, but they basically
| function as desalination plants.
|
| That and it's pretty glib to make people "uncomfortable"
| so they don't procreate. Especially when here in the US
| we barely even have population growth.
| 29athrowaway wrote:
| If we are not destroying the planet as you claim, then
| animal species would be flourishing. In reality, insects,
| fish, and many species of animals, especially animals
| above certain weight, they're all dying off and going
| extinct.
|
| As we humans advance, we destroy the habitat of other
| species. As industrial agriculture expands, we consume
| all the topsoil (soil with microorganisms, worms, etc. in
| it.), we extract dietary micronutrients from it, we pump
| all of the groundwater, kill all the pollinators and
| insects, then cause collateral damage to all migratory
| species that cross those territories.
|
| We dump trash everywhere, we pollute the atmosphere, we
| pollute the oceans, we make the oceans more acidic, we
| are raising the temperature of the planet, our industrial
| plants dump toxic chemicals everywhere... and the list
| goes on and on and on.
|
| You, on the other hand, are heavily influenced by an
| alternate reality which is a combination of television
| and Internet content, documentaries, and uplifting
| stories about how some experimental technology 50 years
| away from mass production that is prohibitively expensive
| and makes things 1% better for the environment, while
| things get 10% worse each year. You are completely out of
| touch with reality and the hunter gatherers from the
| future hunting contaminated vermin will hate you.
| rowanG077 wrote:
| Keeping people in misery is not the solution. Population
| control is much less ethically challenging IMO.
| reedjosh wrote:
| Again assuming a solution is even needed when birth rates
| in first world nations is already low.
| 29athrowaway wrote:
| Keep telling yourself that. The environmental impact of
| the human population at large, which is growing
| consistently, has nothing to do with you by any means!
|
| The millions of marine animals drowning in single use
| plastic bottles will concur with you.
| ziddoap wrote:
| > _It 's fine for people to struggle and be stressed out, the
| opposite would be overpopulation._
|
| People should struggle now to the point that they can't have
| kids so that 3 generations down the line we don't need more
| housing?
|
| Please correct me if I'm misunderstanding. Because this seems
| like a pretty hot take if I'm understanding you correctly.
| mamonster wrote:
| Biggest problem IMO is that "young generation" is already split
| among ideological lines(myself included), and kind of hard to
| imagine a concentrated "young vs old" movement that wouldn't at
| some point devolve into infighting.
| 6510 wrote:
| 10-20 years seems fine. It doesn't have to happen overnight. To
| fast would create chaos and make it into new lame situations
| for people.
|
| Gradual rent control with a point system works just fine.
|
| Personally I would like to see renting [gradually] changed into
| lease/buy. That I've paid the value of the house 3 times now
| (and the construction cost 7 times) could mean I own at least
| some of the house? Doesn't seem unreasonable.
| anovikov wrote:
| I think you are more than exaggerating. Thinking of someone
| who's 65 now and owns several homes, these people are utter
| fools. How much would money put into houses 40 years ago when
| they bought, and put into stocks at the same time, would make?
| You don't even need to google up to know the answer. SP500
| would make 96x with dividends reinvested and 37x without.
| Median home price is not even 10x, and the median home has
| increased in size 1.5x in the meantime, plus required upkeep.
| Fix to housing problem is nothing but financial education for
| people.
| [deleted]
| bushbaba wrote:
| You forget that 1) you only have 20% down for a home. 2)
| homes can be sold without tax implications.
|
| If housing had the same tax treatment as stocks it'd be a
| horrible investment.
| mrep wrote:
| Actually, you do need to google up if you want to look at an
| actual data analysis. I mean, you aren't even counting the
| rental income in your comparison. If you look at the rate of
| return on everything from 1870-2015, equity markets and
| housing actually provide somewhat similar returns [0]. Equity
| markets are far more liquid though so I choose them
| personally.
|
| [0]: https://news.ycombinator.com/item?id=19817584
| nostrademons wrote:
| The equivalent to rental income is "with dividends
| reinvested". Dividends are the cash flows from owning a
| stock, just like rent is the cash flow from housing. So the
| 10x capital appreciation from housing is equivalent to the
| 37x capital appreciation from the S&P 500.
|
| You and anovikov reach different conclusions because you're
| looking at different time scales. You're citing returns
| from 1870-2015; he's citing returns for the last 40 years,
| 1980-2020. The comment and paper you linked itself explains
| why: housing and equity returns were very comparable from
| the period 1870-1945, but equities significantly
| outperformed from 1945-present. I would bet on
| suburbanization as the cause: the U.S. embarked on a
| massive homebuilding project from 1945-2000, which kept
| supply high and prices relatively low during that period.
| Returns to housing since 2009 (when the bottom fell out of
| the homebuilding market) have much more closely matched
| equities.
| anovikov wrote:
| OK, so returns from 1870 to 2015 are same for housing and
| stocks. Which again proves that there's nothing morally
| wrong about housing prices, if these investments are
| replaceable, one can always invest in stocks to save up
| to buy housing (at least on average, that is).
| namlem wrote:
| On the contrary, housing shouldn't appreciate. It's bad
| for the economy as a whole, and especially for young
| people, for homes to be an appreciating asset. Housing
| should be a commodity, not an investment.
| mrep wrote:
| Housing doesn't have to appreciate to be an investment
| though because you still have rental income.
| Applejinx wrote:
| Why should stocks be an asset class guaranteed to always
| expand at such a hyperbolic rate?
| pharmakom wrote:
| No guarantees, but stocks capture the value of
| technological innovation that housing (expect a few markets
| like SF) does not.
| infl8ed wrote:
| Although I don't disagree with you, I will just mention that
| housing affordability is also a problem in Australia where
| voting is mandatory
| seydor wrote:
| I often watch architecture videos with houses from australia.
| Lots of properties built more or less to look like
| contemporary style stock photography. No wonder your houses
| are expensive, they are built for luxury investment
| strikelaserclaw wrote:
| how do you think politicians make money? They usually own
| assets.
| nradov wrote:
| In the US some politicians make money by using their
| knowledge of upcoming legislation to trade stocks.
|
| https://nypost.com/2022/07/23/nancy-and-paul-pelosi-are-
| trad...
| VonGuard wrote:
| While I completely agree that Pelosi does this with
| insider knowledge, she and her husband also seem to be
| investing based on the hype they hear from people around
| them. Why else would the Pelosi's have taken such a bath
| on Roblox?! They had to have known shit is going bad over
| there, but they lost a LOT of money on that one...
|
| So yeah, they do insider trading, but they are sometimes
| also the dupes in these deals. Look at their history.
| They make money, yes, but they lose a lot to stupid
| investments too, ones they obviously made because some
| Steve-Jobs-wannabe got a meeting with them and fired
| their reality distortion ray.
| missedthecue wrote:
| What kind of insider knowledge did Pelosi have that would
| incline her to throw money into Roblox?
| [deleted]
| Aunche wrote:
| I don't think mandating voting really helps that much. At
| best, you'll get people to vote for the candidate with the
| (D) or (R) next to their name. What we need is for people to
| be more informed. Fewer than 20% of people can name their
| state legislatures, let alone their stances.
|
| https://hub.jhu.edu/2018/12/14/americans-dont-understand-
| sta...
| TremendousJudge wrote:
| Mandatory voting doesn't fix all the problems, but it's
| better than the alternative. Instead of campaigns focusing
| on "go vote" you get campaigns focusing on the actual
| voting.
| kubb wrote:
| Do you think there exists a political option that will give
| more rights to the renters?
|
| Do you think there's a correlation between having more leisure
| time (living from rent) and having more ability to do politics?
|
| Do you think blaming the renters for not voting is the most
| constructive way of going forward, or does it reinforce the
| status quo?
| pochekailov wrote:
| Q1: Yes, there is. Once a professional politician sees more
| activity from renters, they will include the renter's
| interests into their agenda
|
| Q2: Yes, obviously there is a positive correlation. This is
| exactly why renters need to fight: stakes are against them.
| Current status quo is in favor of homeowners; it will not be
| possible to change it while being passive. Renters and
| homeowners have conflict of interests, there is inevitable
| fight.
|
| Q3: I think blaming is the call for fight. If renters want
| better deal, they need to fight. Is it most constructive? I
| don't know, this is the best I can come up with. Does it
| reinforces the status quo? No, I think inactivity reinforces
| it.
| nopenopenopeno wrote:
| You have an incredibly naive impression of representative
| democracy and capitalist political economy. US politicians
| serve the rich, not only because they are the rich but also
| because they need the donations to even be able to run.
| This isn't a mere hiccup but rather the entire point of the
| design.
| [deleted]
| pochekailov wrote:
| Yes, in my experience, the naive interpretation is right
| 80% of time and it is always best to start from a naive
| explanation of a process.
|
| US politicians serve the rich only because they think
| that donations will help them win. Make the donations
| irrelevant - "rich" will loose the political power. How
| to make the donations irrelevant - go to vote, especially
| if you are poor and powerless. Convince your friends to
| vote. And not for a president, but for a local mayor,
| city council, judge etc.
| gitrog wrote:
| I'm sorry but your answer to Q1 is extremely naive. There
| is no way that activity from renters will even remotely
| approach the power of those who own property in politics.
| The latter group can lobby and make campaign donations, the
| former can't exactly...
|
| The best thing you'll get is a campaign promise to do
| something about it, but not much action. The only way
| something will actually be done about it is if the effects
| of it become economically catastrophic or people start
| rioting en masse.
| bthater wrote:
| The latter group can unionize like the tenants union of
| Washington[1]. Unions can lobby on the behalf of their
| members and make campaign donations based on their dues.
| While their power may not be as great as the amount of
| individual homeowners who can independently donate a
| union is a good mechanism here for renters to advocate
| for affordable housing. Here in Seattle there are
| multiple unions that have lobbied to local city council
| members for increased tenants rights such as 6 month
| notice for increase in rent[2]. _Things_ are being done
| about the problem at the local level across the country
| through unionization of renters and workers.
|
| [1]: https://tenantsunion.org/ [2]:
| https://council.seattle.gov/2021/09/27/sawant-
| congratulates-...
| JumpCrisscross wrote:
| > _no way that activity from renters will even remotely
| approach the power of those who own property in politics_
|
| Can speak to New York politics. Tenants' associations
| have massive sway. I've canvassed elections where a
| single building's tenants' association could predictably
| swing the outcome.
|
| They also ally with developers when advantageous, _e.g._
| to continue building housing stock. (Their divergent
| interests explain much of our affordable housing policies
| ' idiosyncrasies.) This combination of activism and
| pragmatism beats the well-funded candidate every time in
| local politics because their elections are decided by
| margins of hundreds or even tens of votes.
|
| > _latter group can lobby and make campaign donations,
| the former can 't exactly_
|
| Donations, at the local level, are a threat to incumbents
| through enabling primary challengers. And tenants'
| associations absolutely lobby. The problem is renters in
| most cities are some combination of disorganized,
| disengaged and/or ideological to a dogmatic degree.
| banannaise wrote:
| Local politicians will often discount or ignore the
| opinions of people they see as renters rather than
| homeowners, in part because when a renter moves, they often
| leave the district.
|
| I saw this recently in a fight over parking regulations -
| all the homeowners wanted strictly regulated street parking
| in neighborhoods, but none of the renters did. Both parties
| showed up to the council meeting discussing the regulation.
| Guess who won? Adding insult to injury, existing laws give
| owners a process for obtaining extra parking passes for
| guests, while renters get no such option and need to take a
| bunch of documents to city hall to get a pass when they
| move in. For _street parking_.
| refurb wrote:
| _I think young generation needs to engage in the politics with
| the uncompromised goal to crush the housing price_
|
| At least where I live, the "bank of mom and dad" either use
| their home equity to help their kids buy OR the kids are
| banking on getting the family home when they die.
|
| We're in too deep now. We basically painted ourselves into a
| corner where the economic engine is so intertwined with rising
| home prices that nobody wants the gravy train to end.
|
| My best guess is tenancy laws change to be more and more in
| favor of tenants (SF, NYC) securing near permanent housing for
| current renters and massively disincentivizing an increase in
| supply of new rental units., completely screwing over those
| that come later.
|
| Basically kicking the can down the road another few decades.
| _aavaa_ wrote:
| > We're in too deep now.
|
| We're never going to be less "too deep". Kicking the can down
| the road condemns future generations to dealing with a worse
| problem.
| onlyrealcuzzo wrote:
| If you think we're in too deep, you should check out China.
| draw_down wrote:
| pochekailov wrote:
| I'm an immigrant :).
|
| Banking on your family dying - this is like saying "I am a
| worthless loser". I want old generation to live eternally,
| and still afford housing.
| lotsofpulp wrote:
| If the old generation cannot work for eternity, what would
| be your solution to a declining labor participation rate?
| pochekailov wrote:
| Rejuvenation and life-extending technologies to keep
| labor energetic forever.
|
| Industrial and maintenance automation for needing less
| labor.
|
| Relying on next generation to fund your retirement is ok
| if you live modestly; but not ok if you live luxuriously.
|
| Working person should not be doing worse than a non-
| working person; otherwise you have an extractive economy
| and social instability.
| [deleted]
| anonymousDan wrote:
| "In Britain the government now openly says that the housing
| market is "broken"". The day this government does anything to fix
| the underlying problems with housing in the UK instead of being
| in the pocket of developers will be a cold day in hell.
| [deleted]
| kkfx wrote:
| There are many issues around housing, some derive from
| capitalism, like building apartments because doing so milk more
| money from a handkerchief on land, but some simply due to
| different evolution speed from human needs vs buildings
| lifecycle.
|
| I see at least two kind of schools on housing, one who talk about
| cheapness, typically from USA, Japan and few others. Another who
| talk about forever and ever duration, typically from south EU.
| Both have reasons and both to the extreme prove to be a disaster:
|
| - in the JP/USA model a simple strong wind or a flood (from EU
| perspective) suffice to demolish houses, making big damages etc
|
| - in the southern EU model houses are VERY old, they do not
| respond then to current needs and evolve them being not design to
| do so is a nightmare
|
| Some countries choose the "division" model, like almost in the
| entire north-America with their residential-only suburbs, some
| mix at unbearable high density. Both models prove to be
| disastrous: the suburb model impose too much travel and being
| tied to some "district" nearby became a graveyard when the
| district change; too dense southern EU and Asian cities suffer
| the opposite issue: little travel is needed but things are so
| concentrated that there is no room to evolve.
|
| Old Romans have a proverb: in medio stat virtus, "in the mean
| live the virtue", and I think that's well valid for housing...
| Too much dense => fail. Too little dense? Fail as well. Too
| diversified => fails, too much scaling issues. Too subdivided? =>
| fails can't survive for long. Unfortunately evolving from a model
| to another, no matter if the change is good or bad, take MUCH,
| MUCH, MUCH time. Around homes we need infrastructures, like
| roads, aqueducts, power lines, TLCs, ... building a single home
| might be quick and easy BUT change the infra around normally is
| not. We still do not have the '30s dream of flying homes or semi-
| autonomous starships that can be moved easily everywhere... So
| far we do not even have flying cars (while they might be there
| technically)...
|
| That's not much tied to richness: poorest countries have their
| housing issues as well, just in different terms. It's tied to the
| lack of Star Trek alike replicators and tech. Something that's
| not on the horizon nor for the rich nor for the poor. Is
| something we can and should tend to, but knowing it's far away.
| BoxOfRain wrote:
| >We still do not have the '30s dream of flying homes or semi-
| autonomous starships that can be moved easily everywhere... So
| far we do not even have flying cars (while they might be there
| technically)...
|
| There is a kind of home that can float anywhere though, I'm
| quite far long in my plans to move onto a sailing yacht. While
| my main motivation is a lifelong love of sailing and a desire
| for a nomadic lifestyle, I'd be lying if I said a small part of
| my motivation wasn't that shovelling money hand-over-fist into
| keeping a boat I own seaworthy is much more satisfying than
| shovelling money hand-over-fist into some random baby boomer's
| BTL portfolio every month!
| kkfx wrote:
| That's was done by some, experimented on scale by very few
| and... well... it prove to be not really feasible: boats are
| expensive, far more than homes. All the efforts to made cheap
| and large-enough house-boat led to crappy stuff who do not
| last much. You need anyway much more raw materials and
| maintenance, most water is salty and salt corrode anything,
| lakes are too few and might make unpleasant drought issues
| and unpleasant waves... Insulation is an important issue, so
| energy consumption is. You can't even have good p.v. just
| because of limited AND constantly moving surface (your
| inverters suffer much a constantly crazy p.v. input).
|
| You need fresh water and the cheap way to get is is from
| land, so you need land infra anyway, you also need food and
| you can't produce it locally, yes you can fish, but you do
| not live well ONLY on fish and some algae... Beside that
| logistics is a nightmare.
|
| Long story short: FEW can live, perhaps even very well for
| some of them, on boats, but only if most others do not.
| That's an important issue too many forget even when they
| speak about Green New Deal: yes, we live in homes. We might
| WFH. BUT we also need factories, hospitals, schools, they are
| mandatory to live well and they need to be counted in the
| game: we need to sustain them as well. We need workers and
| they need a life as well. That's not much "housing problem"
| but is tied because we need a home to live BUT we also need
| to be physically nearby something else to do so as well. The
| dream of an autonomous home is not much different than the
| dream of an autonomous house-boat or starship or house-truck,
| house-airplane etc we can made "relatively autonomous" homes,
| tucks, ships, airplanes, ... where relatively means "you are
| free to live in in comfort FOR A LIMITED PERIOD OF TIME until
| something breaks, for instance, and such "things" can exists
| for you just because there is a complex industrial and social
| system behind. We still miss the 3D printer able to print
| itself...
|
| That's the real issue... We are able to reproduce ourselves
| only with our body (well, if we can keep alive in nature) but
| we can't do the same for anything we build...
| golemiprague wrote:
| mantas wrote:
| Not housing per-se, but concentrating too many jobs in few
| locations. Which causes issues with housing.
| switch007 wrote:
| Even that probably has a root cause. Capitalism, efficiencies
| gained from concentrating resources in a single location,
| network effects etc?
|
| In the UK, jobs used to be at local factories and offices. It
| was rare for people to move for university then move to another
| city for work.
|
| My Grandad worked at a local electronics factory. My Dad worked
| at a local auto parts refurbishment factory. My mother in her
| early 20s worked as a secretary for the emergency services.
| Moving away for university and then again to another city for
| work was almost unheard of. You worked and lived close to your
| family. Of course the 80s came along and everything changed.
| PaywallBuster wrote:
| + specialization
|
| most of those jobs in the 80s require only basic education
|
| but when you have thousands of graduates coming out of
| universities, they'll be looking at very specific job
| positions, not any office job near home
| mantas wrote:
| + job hopping. Moving to factory town is fine if you can
| see yourself working here for decades. But nowadays when
| people are expected to switch jobs frequently... Both sides
| could win a lot by agreeing to loyalty.
| mschuster91 wrote:
| > Not housing per-se, but concentrating too many jobs in few
| locations.
|
| Jobs weren't "concentrated" per se by any form of planning or
| centralized action, employers simply shifted to urban centers
| because the amount of skilled workers and other necessities
| (such as high speed Internet, universities, road and rail
| infrastructure) was vastly higher there than in dilapidated
| flyover-state villages. Additionally, rural areas got
| devastated by mechanization of agriculture following WW2 and
| later-on the closure of manufacturing plants and the mining
| industries [1], which led to a massive rural flight movement as
| everyone who could fled to the only place where employment was
| available - urban areas.
|
| The fix to the housing crisis would be to invest in rural areas
| again - there is no limitation in the nature of the work at all
| that stuff like a callcenter or a bunch of programmers can't
| work from some rural town, but as long as there is no actual
| high speed Internet or no amenities (healthcare, education
| institutions for children, entertainment) worth their name
| employers won't establish shop there and employees won't move
| there. Would you, even for free rent, move to some small town
| where your children have no perspective?
|
| [1]
| https://www.theatlantic.com/business/archive/2012/01/where-d...
| noahtallen wrote:
| > The fix to the housing crisis would be to invest in rural
| areas again
|
| There's actually a really big, fundamental problem with this
| approach. Cities hugely subsidize rural infrastructure
| already. Tax income generated by rural (and even suburban)
| developments can't repay the construction and maintenance
| cost required for upkeep. Partly because it's not dense, and
| partly because typical rural/suburban economic development
| looks like a stroad with chain restaurants and huge parking
| lots. (Where most of the land isn't being economically
| productive, and the land that is isn't really boosting the
| local economy that much.)
|
| https://youtu.be/7Nw6qyyrTeI
| seper8 wrote:
| I read this kind of thinking a lot lately, people trying very
| hard to come up with solutions that don't address the main
| issue. Just guessing, you already own a house?
|
| The fix is to enable builders to build enough housing, and
| not just single family detached housing, by removing
| regulations which allow NIMBY-ism. At the same time, prevent
| investors from hoarding houses and jacking up the prices. I
| find it similar to scalping GPU's and reselling them for more
| money, which was a common practice in the past few years
| during the chip shortage and crypto mining boom. This kind of
| investment provides very little value to consumers, and in my
| view only serves to extract money from the poor to the rich.
| zhdc1 wrote:
| > The fix is to enable builders to build enough housing,
| and not just single family detached housing, by removing
| regulations which allow NIMBY-ism.
|
| This is the short term fix, and I completely agree with
| you.
|
| The long term fix is, aside from letting local governments
| make minor regulatory changes to facilitate denser urban
| construction, to simply do nothing.
|
| Cities are expensive. People will (and are) moving away
| from HCOL areas because of this. Businesses are adapting
| (e.g., with remote work) to hire people living in MCOL and
| LCOL areas. At the same time, new economic agglomerations
| are springing up in these areas to support growing
| populations.
|
| Given enough time, two things will happen. Many of these
| MCOL and LCOL areas will become more expensive. Some will
| urbanize. Some wont. Second, eventually, people living in
| the areas that don't urbanize will realize that they
| actually would enjoy living in a HCOL area. And the cycle
| will continue.
| mschuster91 wrote:
| > Just guessing, you already own a house?
|
| LOL, I wish. Renting in Munich for enough money that I'll
| never be able to save enough for a downpayment. If I ever
| want to own my home, I'll have to move to the German
| equivalent of Alabama, with all the issues that come with
| that.
|
| > The fix is to enable builders to build enough housing,
| and not just single family detached housing, by removing
| regulations which allow NIMBY-ism.
|
| Where? Seriously, _where_?! Urban areas literally don 't
| have enough space left any more to build any kind of
| building at affordable prices (plot values have sometimes
| _doubled_ over four years here [1]), not to mention the
| associated followup costs of high-density populations (you
| need expensive subways as public transport at some point,
| denser / more anonymous populations leading to lower
| societal cohesion and rising crime as a result) or the fact
| that most urban areas simply are unsustainable regarding
| climate change in the long term (no trees to provide shade
| = _lots_ of heat).
|
| [1] https://www.sueddeutsche.de/muenchen/muenchen-
| grundstueckspr...
| prawn wrote:
| If zoning/regulations were relaxed, the density would
| almost instantly start to increase. Land value is high
| where I live, but there would be new, denser building
| projects in the suburbs and CBDs alike. I'm not arguing
| that it would be ideal in all cases, but it answers the
| "where" question.
| seper8 wrote:
| Plot values have doubled BECAUSE OF regulations!
|
| Agricultural land here in the Netherlands sells at 6 euro
| per m2. With a single stroke of a pen that ground can
| become 300 euro per m2, when the municipality decides you
| can build a house there.
|
| Same process in Germany. There is more than enough space.
| Problem is the price of plots is kept artificially high
| by municipalities, because they rely on the easy money it
| provides to finance their projects.
| mschuster91 wrote:
| > Plot values have doubled BECAUSE OF regulations!
|
| Hard disagree here. Munich, Berlin and Hamburg simply
| don't have much land in their borders any more. In
| Munich, we only have two major unpopulated areas left -
| the SEM Nord (900 ha, 50.000 people) and SEM Nordost (600
| ha, 30.000 people) [1], and the currently under
| construction projects Freiham (25.000 people) and
| Bayernkaserne (15.000 people).
|
| The opposition to these projects does have valid points,
| too: a city as large as Munich absolutely needs
| recreational areas for the populace as well as green
| areas for micro-climate and recreation, and the amount of
| both is really really low - the traffic to the existing
| lakes or the nearby Bavarian Alps is already immense and
| the areas are all struggling with the regional-tourist
| population issues like overcrowded trains, trash being
| left everywhere including in natural reserves or on farm
| land [2], overcrowded parking lots and vandalism [3],
| leading to sometimes outright violence against tourists
| from Munich [4].
|
| "Just build more dense housing" may sound like an easy
| way out, but (too) dense housing has immense followup
| costs as well as all these people have to have other
| options in their lives than slave away as corporate
| drones and sleep. Otherwise, you end up with Japan-style
| psychological issues.
|
| [1] https://de.wikipedia.org/wiki/St%C3%A4dtebauliche_Ent
| wicklun...
|
| [2] https://www.abendzeitung-
| muenchen.de/muenchen/umland/ausflue...
|
| [3] https://www.merkur.de/lokales/region-
| tegernsee/dasgelbeblatt...
|
| [4] https://www.abendzeitung-
| muenchen.de/bayern/tourismus-in-bay...
| seper8 wrote:
| https://www.google.com/maps/dir/48.1369799,11.5756907/Bog
| enh...
|
| Take this area, plenty of plots now housing cows.
| Distance to city centre (by car!) is 20 minutes.
|
| Same thing to the North West, in between Munich,
| Grobenzell, Puchheim...
|
| Buddy you are buying into the horsecrap being told by
| current homeowners. "It's full!"... Nope, not really.
| Just like in the Netherlands, about 50% of land in
| Germany is farmland. And even outside of big cities like
| Amsterdam and Munich there's plenty of space left. But
| you're not allowed to build there, let alone build high
| apartment complexes...
| Ekaros wrote:
| On other hand if municipality is struggling to attract
| people in Finland, they will give those plots of lands
| for essentially free. Or that is nominal cost of 1EUR .
| Actually transaction happens when construction begins.
|
| Then again those prices are in dying areas with little
| going on.
| TuringNYC wrote:
| >> The fix is to enable builders to build enough housing,
| and not just single family detached housing, by removing
| regulations which allow NIMBY-ism.
|
| I remember when Mayor DeBlasio
| (https://en.wikipedia.org/wiki/Bill_de_Blasio) was running
| for Mayor in NYC. He was hugely against high-rise high-
| density condos in Brooklyn adjacent (4th Ave) to expensive
| $2M+ brownstones (incidentally where he lived, in Park
| Slope!)
|
| He was the "left" candidate and didnt seem to understand
| the concept of supply and demand. Nor the concept that no
| every city dweller can afford a $2M brownstone.
|
| The problem is that Left and Right alike wants to
| perpetuate the system because they are all so fully bought
| into the system. I'm sure Mayor DeBlasio fully understood
| the economics here, but supported NIMBYism because he and
| his money base wants to keep their wealth.
|
| That also means this isnt a left or right issue, its more
| of a hopeless issue. The only way out is to buy into the
| system and join them.
| helge9210 wrote:
| This looks like a positive feedback loop. People move to
| locations where there are many jobs available, so end of
| employment would not require moving to another location. More
| jobs are created, where there is higher availability of
| candidates.
| pochekailov wrote:
| It is very good for productivity when many jobs are
| concentrated in one location.
|
| This unlocks the possibility for serendipitous connections. It
| is awesome when you can meet a founder, a leading engineer, an
| investor, a designer and a PR person in a coffee line, forming
| a new company before finishing your morning coffee.
|
| Talents concentrated in one place gives significant boost to
| their productivity. This is called a "proximity bonus" in video
| games; building dependent factories in the nearby slots gives
| them the productivity boost. This is what US is missing by
| being nimbyistic.
|
| I think we should return to the 1950s ideas of a futuristic
| cities and invest in building giant arcologies, where entire
| Earth population can move if they want to, and where the least
| paid McFastFood worker would afford to buy a minimum apartment.
| Workaccount2 wrote:
| China has this in spades, where you can build a (hardware)
| product and source everything needed from the same city. And
| not just distributors of those parts, the actual
| manufacturers are all right there building what you need.
|
| Run out of anything and it's just a 20 minute drive to go
| grab more from the factory.
| mantas wrote:
| Can you really meet them if they're scattered over a multi-
| million city? I find the opposite. A digestible size (<
| 500k?) city where everyone-knows-everyone opens more
| opportunities. While in megapolis multiple bubbles may be
| doing same thing, but not aware about each other at all.
|
| But even here in just-over-500k city people are already
| resorting to Zoom calls from one's office/home (or lake-side
| getaways) over meeting in coffeeshop.
| pochekailov wrote:
| I find it easier in the bigger city; but I might be biased
| as I lived in a big city most of my life.
|
| What I meant is an ability to be within the reach of any
| other person within an hour.
|
| Using zoom for 3 years now (for obvious reasons) - I find
| it inferior to the private in-person communication. Problem
| that you need to schedule a meeting, which adds some
| formality and is usually harder, while you can have a
| pleasant chat with even a rich and powerful person while
| accidentally meeting them in a hall. For scheduling a zoom
| call, you need to find an excuse. To chat in a hall with
| someone - you don't need and excuse.
| randomdata wrote:
| _> What I meant is an ability to be within the reach of
| any other person within an hour._
|
| Is that all that significant? I live rurally and can be
| within reach of any other person in _two_ different large
| cities (along with some smaller ones) within an hour.
| Under some circumstances, I can be at a shared meeting
| place in one of those cities before a person who lives in
| said city can get there. The highway is _incredibly_
| efficient.
|
| Moreover, such proximity to the city - but also off the
| beaten path - seems to make it an attractive place for
| the rich and famous to have homes. I run into household
| names at the small town coffeeshop quite regularly.
|
| What is significant, however, is the the city is much
| more amenable to wealth concentration. That small town
| coffeeshop might see 100 customers in a day, while a
| coffeeshop in a dense city can draw on thousands of
| customers, allowing a coffeeshop empire to be
| established. The small town coffeeshop will never be able
| to grow the same way.
| strikelaserclaw wrote:
| I'm not so sure about this, i believe the optimal curve for
| city population looks like the optimal stress response, after
| a certain level having more is just detrimental. There should
| be enough people where opportunities arise but no so much
| that your mind is too influenced by noise where you can't
| accurately make good decisions.
| pochekailov wrote:
| I totally agree with you. I only think that you should be
| the one to decide how many is too many opportunities for
| you, not a bunch of NIMBYists.
| scatters wrote:
| If there is such a level, we haven't reached it yet. There
| are 40 million people in Tokyo; would that city be improved
| if people left?
| namlem wrote:
| High modernist city planning from the 1950s and 60s was a
| disaster. No, we should go back to the organic cities of the
| 1910s and 20s, with their mixed-use, medium density streetcar
| suburbs.
| trgn wrote:
| > I think we should return to the 1950s ideas of a futuristic
| cities and invest in building giant arcologies
|
| Ugh, I hope not. The 50s was the most infantile era,
| completely preoccupied with convenience and efficiency and
| big things that go wrooar. The vision of the future in the
| 50s was so cringey.
| pochekailov wrote:
| I am proud to be an infantile person, I want a lot of
| convenience and efficiency, and I want a lot of big, shiny
| toys.
|
| I think the modern doom and gloom era is very depressing. I
| am a technocrat and a futuristic optimist.
|
| For me, the modern popular vision of future is not worth
| living for.
| throwaway290 wrote:
| You are conflating densely populated cities and areas with
| high concentration of jobs. They are not the same. And as an
| aside, SF/SV are not even dense by global standards. You can
| live in an actually dense city and enjoy your serendipity
| while working remotely.
| plankers wrote:
| Seems humanity is headed towards Asimov's Caves of Steel
| anyway due to climate collapse, so you'll get your wish.
| pochekailov wrote:
| Have more futuristic optimism. We are doing quite well on
| the climate. We will prevent it once we get fully to solar
| and then build CO2 scrubbers using solar energy. Energy
| percentage that come from renewables is more than 10x
| higher than anticipated 10 years ago.
|
| And don't call it a "collapse": a change is not necessary
| to the worse, sometimes it is to the better.
| Workaccount2 wrote:
| I'm a bit less optimistic than that. I think we will be
| forced to start atmospheric spraying, and hopefully use
| that bandaid to fix the underlying wound.
|
| In theory it will stop warming, which may cause many
| people to take that as "Well, looks like we can go back
| to burning fossil fuels!".
| plankers wrote:
| i don't know what to call uncontrollable positive
| feedback loops in the global temperature if not a
| "collapse"
| chadash wrote:
| Is this really true though? Sure a tech worker can move to
| rural Arkansas and live very easily, but in general, housing
| prices often correlate with local wages and most people can't
| work remotely.
| idkyall wrote:
| Housing in the US has gotten to where it is due to horrible laws
| effectively allowing total tax avoidance for landlords.
|
| Take some investment property. You buy it at some basis price,
| let's say 500k. You rent it out for 15k a year. Each year you can
| offset your rental income against deprecation of the property and
| property taxes - meaning, you pay no income tax on your rental
| income.
|
| ~30 years later, you've deprecated it down to an effective value
| of $0, so you hypothetically would have to start paying taxes on
| your rental income(of course, you can still deduct property taxes
| against that). What do you do? Well, there's something called a
| 1031 exchange - this lets you sell an investment property, and as
| long as the funds go directly into another investment property,
| you pay no capital gains taxes. So guess what? You can buy a
| brand new investment property with a new(albeit adjusted) cost
| basis, and you can start the entire cycle of depreciation and
| deduction all over again on your new, more expensive, property.
|
| So, you've now held this property your entire life, and you die
| and pass it to your kids - well, great news, unless your estate
| is over 12 million dollars(and double that for a married couple),
| you pay no estate taxes. And even more fun - when you inherit
| property, the cost basis is "reset" to the present day value of
| the property at time of inheritance - So your children can now
| rent the property out, deprecate it, and pay no income tax on the
| rental income either, and continue the cycle.
|
| The net result is that rental properties generate a ton of income
| for the owners, who pay almost nothing in taxes. Even if they do
| pay property tax, property tax rates are generally much lower
| than income tax rates.
| jraby3 wrote:
| It's even worse. Take a look at the cost segregation rules.
| refurb wrote:
| You're ignoring depreciation recapture which can have
| significant tax implications even with a 1031 exchange. It
| basically claws back the depreciation you used to offset rental
| income.
| carom wrote:
| Taxes have nothing to do with insane rental prices. It is
| zoning that favors single family homes.
| namlem wrote:
| Single family zoning, plus parking minimums, minimum floor-
| area-ratios, and minimum lot sizes.
| throwaway908724 wrote:
| Wow, I wish.
|
| I'm speaking as someone who put all his retirement savings into
| index funds year after year, but then married someone whose job
| is related to real estate. Real estate feels more concrete and
| understandable to her than finance, so that's where our money
| goes now.
|
| It's not easy free money, and I don't know why you would think
| that any high-profile, low-barrier-to-entry investment would be
| easy free money. Half of my friends have either bought property
| or are constantly talking about it. My friends are part of a
| horde of first-timers who believe, like you, that it's easy
| free money, and their belief inflates prices.
|
| And that's not just my amateur opinion: my wife and I sit in on
| a developer happy hour where experienced developers constantly
| bemoan that they haven't been able to work with certain types
| of property in years, because they get outbid by naive first-
| time buyers who don't have a plan for making money other than
| betting on the market going endlessly up. People who are
| looking for income rather than appreciation are not seeing
| opportunities at the current prices.
|
| Thanks to my wife managing our properties herself and having a
| lot of applicable skills from her profession, we manage to make
| some money, but every hour she spends managing property is an
| hour less (or two, really) that she can bill her clients. I
| doubt that if we adjusted for that it would work out to be a
| wise use of time. It's work she enjoys and finds satisfying, so
| we don't look that closely at whether her time (or our money)
| would be more profitably invested elsewhere, but I'm certainly
| not quitting my software development job to double our
| commitment to real estate.
|
| I'm in Austin, one of the hottest markets in the country, so in
| the end, it's possible that everyone regardless of how naive
| they are will be rewarded by continued appreciation. Income
| from real estate hasn't been a game-changing multiplier for us,
| but appreciation might be. Or not. That aspect of it is just a
| gamble.
| lozenge wrote:
| "It's not free money because it's more time consuming than
| the stock market!"
|
| It's free money in the sense that you are getting paid for
| having had the money to buy the property. Your wife might be
| putting in the time, but she is not more expert than 90% of
| people who could live there and maintain the property just as
| well (assuming they didn't have to pay you rent and the
| police didn't come to enforce your "property rights").
|
| And yes, that means the stock market is also free money.
| rhacker wrote:
| It sounds like you're landlords, but you didn't explicitly
| state it. But isn't your tenant basically paying off each
| property, over the next 30 years. So right now your debt load
| may be high, but you're not experiencing that. You're just
| paying off the loans from rental income and handling the
| overage (prop tax and fixes) with the dev job. So in 30 years
| the two of you will have like 40M dollars paid over the backs
| of renters by selling all those properties..
|
| I mean that's fine, it's legal. But if that's the goal of
| real-estate, then of course it will never be affordable to
| the next generations. Everyone wants to do what you are
| doing.
| JamesBarney wrote:
| I know 6 people who all got into real estate including
| myself. Almost all of us exited because it's way too much
| work for very little gains. I just invest in an index fund,
| much closer to free money, and no calls at 2 am in the
| morning about a busted pipe.
| throwaway908724 wrote:
| Yes, we're landlords. We own two small properties that were
| originally built as residences but now have commercial
| tenants because the zoning permits it and therefore the tax
| valuations assume we'll use it that way.
|
| > Everyone wants to do what you are doing.
|
| As with any other asset that makes money, there are reasons
| why property prices are what they are, and if it's a magic
| ticket to free wealth, you have to ask yourself why
| professionals with deep pockets aren't grabbing every
| property and driving prices up even further. In the case of
| properties that are within the reach of upper-middle-class
| earners, professionals are not willing to pay the prices
| that overexcited individual amateurs are.
|
| > isn't your tenant basically paying off each property
|
| ...and it's special logic like this that convinces people
| that there's free wealth to be had. But there's no magic.
| There is a price. There is income. There are costs. There
| are assets that depreciate. The land is an asset that
| appreciates. That all adds up to a return on the
| investment. Professionals calculate the return and compare
| that to other things they could do with their money.
|
| Amateurs (like us) just buy and hope and feel good because
| we're doing something that feels like rich person stuff.
| We're doing fine with our properties, but we'd be doing
| fine putting our money into index funds, too. In case it's
| not clear, I don't think our properties will turn out to be
| great investments for us unless the speculative aspect pays
| off big. But my wife actually enjoys the work of finding
| tenants, handling building maintenance, designing and
| overseeing improvements, etc., so we implicitly price her
| time at zero.
|
| Let me repeat that to let it sink it: I think we'd be just
| as well off putting our money in the stock market. The main
| reason we've put a significant amount of our money in real
| estate because my wife enjoys it and doesn't mind putting a
| lot of personal work into our properties for free.
| diydsp wrote:
| > you have to ask yourself why professionals with deep
| pockets aren't grabbing every property and driving prices
| up even further.
|
| But... they are.
|
| _My Experience_
|
| Ever heard of Grant Cardone? He and his ilk are filling
| my youtube algorithm with seminars on how to do this. I
| meet strangers on planes telling me about gathering
| together in clusters of partners and buying up real
| estate. Ads on the radio hawk house-flipping courses.
| Robert Kioysaki sells book teaching how to do this. With
| just a little bit of inherited wealth - and American
| wealth is 60% inherited - people are building multi-
| generational legacies.
|
| _Research_
|
| In Massachusetts:
|
| > In 2021, business entities purchased nearly 6,600
| single-family homes across the state, more than 9 percent
| of all single-family homes sold. That's nearly double the
| rate of such purchases a decade ago, according to a GBH
| News analysis of data provided by the Warren Group, a
| real estate data analysis firm. [0]
|
| In 2021: >corporate investors snapped up 15 percent of
| U.S. homes for sale in the first quarter of this year [1]
|
| In 2020: > a company called Treehouse Group was folded
| into Blackstone, then renamed in 2012, Invitation Homes
| was on a $10 billion spree, purchasing $150 million worth
| of houses per week.
|
| In 2022: > About 2.5 million households shopping for a
| first home will be shut out of the market this year,
| estimates Nadia Evangelou, senior economist with the
| National Association of Realtors. That amounts to 15
| percent of all first-time home buyers. In an already
| daunting market, investor purchasing is adding to the
| obstacles. [3]
|
| > "The more that investors buy up entire communities and
| turn them into rental communities -- people don't have a
| choice anymore,"
|
| _References_
|
| [0] https://www.wgbh.org/news/local-
| news/2022/05/16/across-massa...
|
| [1] https://slate.com/business/2021/06/blackrock-
| invitation-hous...
|
| [2] https://nypost.com/2020/07/18/corporations-are-
| buying-houses...
|
| [3] https://www.nytimes.com/2022/04/23/us/corporate-real-
| estate-...
| throwaway908724 wrote:
| xenadu02 wrote:
| Yeah but part of what throwaway908724 says is absolutely
| true:
|
| There are a lot of naive newbies _and_ investors buying
| up property right now without a viable plan to ever make
| money on that property. This in turn drives up prices for
| both potential owners and "reasonable" landlords, then by
| extension for renters both because potential owners
| continue renting reducing supply and landlords need
| higher rent to break even let alone profit.
|
| The worst is when investors stop maintenance on the
| property, it begins to deteriorate, then they write it
| off and bail. That turns what could have been a
| rehabilitation by a competent investor into a tear-down.
| More than a few apartment buildings are being ruined by
| this sort of thing, evicting all the tenants in the
| process.
| turtlebits wrote:
| Are you spending an unreasonable amount of time managing
| property vs the rent you take in?
|
| I spend a max of an hour a month on average on property
| management. Find good tenants (reduce the rent if you have
| to). On average my tenants have had 3+ year leases with
| minimal management.
| throwaway908724 wrote:
| adamsmith143 wrote:
| Little wrinkle in your calculation is that 15000 in rental
| income doesn't even cover half of your Mortgage + Property Tax
| bill.
| rhacker wrote:
| That's not really a wrinkle considering most renters are
| going to be paying 30k/year avg. in no time.
| Supermancho wrote:
| > 15000 in rental income doesn't even cover half of your
| Mortgage
|
| That depends on how much you put as a down payment. Work
| backwards from the payment to make it sensible.
| adamsmith143 wrote:
| Give me a break. You'd need a down payment of ~400K to have
| a mortgage low enough to barely break even at $15,000 in
| rent per year. None of his math makes sense.
|
| Of course you would really rent a 500k property at
| something more like 2500 a month but even then you'd need a
| down payment near 200k to start making a profit.
| Supermancho wrote:
| Here's a mortgage calculator:
| https://www.google.com/search?q=mortgage+calculator
|
| 500k property at 2.75% is $200k down gets you under 15k
| (this is very similar to my current mortgage)
|
| Now you're going to object that the interest rate isn't
| that anymore, which is irrelevant. There are numbers that
| will work which are simply an example to illustrate how
| depreciation works, and you just don't like the arbitrary
| scenario.
|
| The math makes sense.
| llbeansandrice wrote:
| Where on earth can you find a 2.75% rate?
| Supermancho wrote:
| Between banks and with very large real-estate purchases,
| it's still a thing. Before the rate hike at the end of
| last year, you could get it from many places. My wife and
| I happened to buy a home in ND last year.
|
| Here's a mortgage statement from US Bank showing the
| rate: https://imgur.com/a/Nq597zF
| adamsmith143 wrote:
| Mate who cares about rates from years ago. You aren't
| getting anything under 5 these days. Not to mention those
| rates are for primary residences, you get even worse
| rates for investment properties.
|
| The point is if you have 200k to put into a rental
| property you are already wealthy way beyond an average
| American.
| Supermancho wrote:
| > Mate who cares about rates from years ago. You aren't
| getting anything under 5 these days
|
| That is irrelevant. The point was the role of other
| vehicles in investment properties, wherein the GP
| diverted into arguing about the specific numbers being
| used.
|
| > The point is if you have 200k to put into a rental
| property you are already wealthy way beyond an average
| American.
|
| That's your point, which is not in dispute.
| [deleted]
| foobarian wrote:
| You don't need to make a profit, there are ways to get
| loans against the property and continue acquiring more
| inventory.
| adamsmith143 wrote:
| Well this ain't a startup with VC funding. How long can
| you reasonably have negative cashflow like this before
| you personally go bankrupt?
| Supermancho wrote:
| Land is often leveraged by creation of negative (or net
| neutral) commercial enterprises to gamify population
| growth (and inflation).
|
| eg https://www.silverstarcarwashes.com/latest-
| news/silverstar-c... (this is of 6 planned)
|
| Because of the city tax conditions and depreciation
| schemes available, enough capital will turn a net
| negative run cost into a positive capital sale in less
| than 10 years. It's the same thing as flat asphalt
| parking lot developments that covered southern california
| commercial land until the 90s.
|
| It seems to be a gamification of city growth incentives.
| cko wrote:
| As a former landlord for nine years, this is pretty correct. I
| did the tax deferred exchange thing once.
|
| Then I sold for cash (a pretty big no-no in terms of real
| estate investing) because I didn't enjoy such a concentrated
| risk.
|
| When I sold, there's something called depreciation recapture.
| If the 27.5 year depreciation thing was used to offset your
| income taxes, part of your gains gets taxed as ordinary income.
| The cost basis of property is also lowered so that the capital
| gains is higher.
|
| There's also tax trick called cost segregation that lets you
| depreciate certain parts of your property at an accelerated
| rate.
|
| Basically, as the OP says, keep doing the 1031 exchange until
| you're dead and your heirs don't have to worry about
| depreciation recapture.
| sfe22 wrote:
| It is easy to pick an example like this to show the "bad"
| sides. But what is the alternative? If people had to pay
| inheritance tax on their family home, how many could not afford
| such a tax bill and would have to get rid of their family home
| to please the tax man.
|
| Regarding the cost basis rest that is so people can upgrade
| their house without having to pay a tax bill. This is just
| deferring the tax not avoiding it. Without this it would be
| much harder to get a bigger house once you have kids. Most
| people would have a harder time moving and removing this would
| lower our quality of life.
| malfist wrote:
| >If people had to pay inheritance tax on their family home,
| how many could not afford such a tax bill and would have to
| get rid of their family home to please the tax man
|
| If your family is leaving you a house worth more than $12
| million, you can afford to pay the tax man.
| Ekaros wrote:
| How high would that tax bill be? 50-60%? Still would be lot
| under fair value of property and thus should be able to get
| loan against that tax amount. So I really see no reason not
| to have it taxed.
| lotsofpulp wrote:
| > Without this it would be much harder to get a bigger house
| once you have kids. Most people would have a harder time
| moving and removing this would lower our quality of life.
|
| If the goal is to help people consume more of <x>, then give
| them cash.
|
| Giving assistance via tax rules is a way to discriminate who
| gets to benefit from government subsidized while maintaining
| plausible deniability. It also helps obfuscate the costs.
| avereveard wrote:
| > But what is the alternative?
|
| a tax per square feet on residential properties where the
| owner doesn't live in for more than half a year, irregardless
| of wheter it's rented out or not, and independent from the
| tax from rent income. since "promoting good behaviour" trough
| taxation didn't work the last idk 50 years, it's time to be
| back to "punish bad behaviour"
| jefftk wrote:
| _> what is the alternative?_
|
| Inherit the cost basis.
| skybrian wrote:
| There's an argument that for inherited property, the cost
| basis should be zero since you didn't pay anything for it;
| you got it for free.
|
| Although, that's effectively a tax on inheritance that's
| due at sale, which would probably be a fairly big incentive
| against ever selling, and instead structuring it as a long-
| term lease.
| nly wrote:
| Selling the family home when you inherit in the UK is the
| norm.
| pessimizer wrote:
| > It is easy to pick an example like this to show the "bad"
| sides.
|
| You're saying this as if the example is a cherrypicked
| outlier rather than ubiquitous.
|
| > If people had to pay inheritance tax on their family home,
| how many could not afford such a tax bill and would have to
| get rid of their family home to please the tax man.
|
| At some point in the value of a home, we're not really
| worried about that. We do not sympathize when someone can't
| keep their parent's $50 million dollar home tax-free. We've
| set that cap at around $12 million. It's a very high cap.
|
| edit: we're happy to grab the estates of working people who
| end their lives in intensive care, nursing homes and
| hospices, before the Medicare kicks in.
| ska wrote:
| Don't lots of places differentiate between a primary
| residence and any other real estate, basically for this
| reason?
| dexterdog wrote:
| Not when it comes to property taxes they don't.
| distances wrote:
| > But what is the alternative? If people had to pay
| inheritance tax on their family home, how many could not
| afford such a tax bill and would have to get rid of their
| family home to please the tax man.
|
| This is absolutely normal in the rest of the world, and
| there's nothing wrong with it. People don't go bankrupt over
| inherited property. The tax-free inheritance part is also
| ridiculous, in my humble opinion inheritance should be fully
| taxed.
| namdnay wrote:
| > If people had to pay inheritance tax on their family home,
| how many could not afford such a tax bill and would have to
| get rid of their family home to please the tax man.
|
| so if they can't afford to pay tax on the windfall, they'd
| have to sell the house and buy a smaller one. is that the end
| of the world?
|
| > Regarding the cost basis rest that is so people can upgrade
| their house without having to pay a tax bill
|
| what they have in many european countries is that you can do
| this only on your primary residence. so you let people
| upgrade their homes, but not their rental properties
| namelessoracle wrote:
| So a family on hard times should be forced to leave their
| grandmothers home when she dies and hope they can find a
| new one? Gentrification can easily push a property in the
| place they've lived their whole lives out of their price
| range. And the family home might not have been super well
| kept up so the "windfall" isn't as big as the property
| values in the area may reflect. This happens now with
| gentrification in big cities, it would get worse with what
| you are saying.
|
| Being able to leave something to your descendants is a
| critical part of society. If people know they cant leave
| anything behind they start acting differently (and not in a
| good way). I understand a key part of communism is you and
| your family own nothing, but trust me you don't want people
| to have a use it or lose it attitude towards everything.
| malfist wrote:
| Yes, won't somebody think of that poor family on hard
| times inheriting an estate worth more than 12 million.
| How could we ask them to pay taxes?
| lozenge wrote:
| It's any estate worth _less_ than 12 million.
| malfist wrote:
| No. The estate tax doesn't start until the inheritance is
| over $12 million.
|
| So they have to inherit a $12m estate before they're
| taxed, if it's less, no estate tax.
|
| And they don't pay taxes on that $12m if they're over the
| $12m, only the amount that it's over that $12m. If it's
| worth $12,000,001, they pay taxes on only $1.
|
| Sources: https://www.forbes.com/sites/ashleaebeling/2021/
| 11/11/new-hi...
| namdnay wrote:
| In what universe does paying tax on what you inherit
| equate to communism?
| dexterdog wrote:
| In the universe where the tax was already paid on what
| was inherited, AKA this one.
| PaulDavisThe1st wrote:
| The tax is paid on the transfer, not the property. And,
| as has been repeatedly noted, for an estate of less than
| $12M, there is no tax at all.
| ROTMetro wrote:
| When you effectively take someone's home for government
| benefit. People think that when they buy property they
| own it. You're model is more the China version. You don't
| own property, you only lease it from the government.
| Hence, your model looks more like the communist model
| than the traditional Western one.
| namlem wrote:
| The government isn't taking the house, a private buyer is
| purchasing it for its market value. Paying taxes on
| income is not communism lol.
| 8note wrote:
| It's basically the American model - if somebody isn't
| improving their land, you take it from them by force and
| sell it at cheap prices to people who will.
|
| That's why it's a bunch of white people with title now,
| rather than all being native americans
| scythe wrote:
| >When you effectively take someone's home for government
| benefit.
|
| You mean like how all the Interstate Highways got built?
| Except that wasn't "effectively", it was literally.
| seiferteric wrote:
| Inheritance = Income, and income is generally taxed. The
| fact that that inheritance might be real estate is
| irrelevant.
| namdnay wrote:
| Inheritance tax is paid by the inheritor, not the
| deceased. It's not a property tax, it's an income tax.
|
| If you're lucky enough to receive a house as an
| inheritance, you pay tax on that, like every other
| income.
| colinmhayes wrote:
| Yes, if you can't afford your house you need to find a
| new one. The family will come out well ahead here because
| the tax would only be on a percentage of the houses
| value, they can use the proceeds to buy a new, cheaper
| house. No one has the right to live anywhere just because
| their grandma did.
| [deleted]
| scythe wrote:
| >I understand a key part of communism is you and your
| family own nothing
|
| No it isn't.
|
| https://www.workers.org/private-property/
|
| > _Private property, to a communist, is not your shoes or
| toothbrush, or even your house._
|
| > _Those things are called personal property and under
| socialism and under communism they continue to belong to
| workers in much the same manner as they do now._
|
| Criticize people for what they actually believe, not what
| you imagine they believe.
| namelessoracle wrote:
| So why does China refuse to sell land to its citizens and
| only leases?
| [deleted]
| seiferteric wrote:
| If you had to pay the tax you could probably just finance
| it anyway instead of paying it all at once so it would be
| just like having a new (small) mortgage.
| l33t2328 wrote:
| That's what every parent hopes to leave their kids with:
| an obligation
| NoSorryCannot wrote:
| Oooor they can sell it, as originally stated. Goodness.
|
| The point is reduce land entitlement a little bit. Yes,
| there's going to be some light incentive to cut loose and
| that's OK.
| squeaky-clean wrote:
| Wouldn't this just reduce land entitlement for those who
| aren't wealthy enough to afford the new taxes? I think
| something like taxes that apply for people who own more
| than 1 property would be better.
| foobarian wrote:
| Now the US is way ahead of the game here compared to
| Europe. There are no property taxes in most of Europe and
| families hang on to their homes for generations.
| japanuspus wrote:
| This appears to differ across Europe.
|
| I know for a fact (through living here) that Denmark and
| probably the rest of Scandinavia has property tax and
| inheritance tax -- holding on to family property is
| almost as expensive as buying new property.
|
| Which part of Europe are you referring to? I once had
| Greek colleague who complained about having to maintain
| three generations worth of houses, so that might be one
| place where things are as you describe?
| timidiceball wrote:
| Norway has no inheritance tax at all; property taxes are
| microscopic (relative to other places that levy property
| taxes with intended market effects).
| foobarian wrote:
| Right, Europe is bound to be diverse on this point. I
| have exposure to Balkan countries and the UK (which,
| while they do have non-zero rates, still have them far
| lower what I'm used to in New England).
| stainforth wrote:
| I think you can argue migration (forced) through history
| is tied to this. The US was a recent star in growth due
| to free land. But there is no more free land. And Mars
| does not fill that role. We need to disempower rentiers.
| vkou wrote:
| I'll happily take a million dollars from you, if that
| 'obligation' comes a 250K tax bill.
| phil21 wrote:
| I'm pretty sure my kid would be quite happy if I left him
| a million dollar asset that he just had to figure out how
| to pay capital gains taxes on.
|
| If he wasn't I probably did an extremely poor job of
| financial education while I was alive.
| groby_b wrote:
| I mean, we can solve _that_ problem by a 100% inheritance
| tax so they don 't leave an obligation. No? Then maybe
| let's skip arguing in sound bites.
|
| Personally, I think the answer here is a continued and
| ongoing land tax. Occupying land _should_ come with an
| expectation you contribute to the common good, because
| you don 't "own" land. It's a shared good, just like air
| and water, and you should pay for use.
|
| Primary residences should indeed not be subject to an
| inheritance tax - _if_ they are continued to be used as a
| primary residence. Providing an ongoing home for a family
| unit[1] is a societal good, we shouldn 't punish it.
|
| [1] Definition of family is a hairy problem for another,
| longer post.
| l33t2328 wrote:
| You make an extremely compelling point. I was arguing in
| sound bites and your final paragraph is entirely
| reasonable.
| 8note wrote:
| Aka, a house?
|
| It's gonna be an obligation no matter what
| SamoyedFurFluff wrote:
| I think inheriting property should absolutely force children
| out of their home unless they plan to actually live in it as
| their primary home immediately, and even if they do, they
| should be paying the same taxes as the rest of the
| neighborhood.
| toomuchtodo wrote:
| 60 days to occupy would be reasonable, same guidelines for
| when a primary residence mortgage is originated.
| idkyall wrote:
| > Regarding the cost basis rest that is so people can upgrade
| their house without having to pay a tax bill. This is just
| deferring the tax not avoiding it.
|
| I think it's fine to allow this treatment for a home used as
| a primary residence for the exact reasons you mention, but I
| don't understand the logic of allowing it for an investment
| property
| skybrian wrote:
| If you can defer taxes long enough, deferring taxes is
| avoiding them.
| bsedlm wrote:
| I think taxes stopped making sense since 1971 when the USD
| became a fully fiat currency.
|
| if the government can print money, what's the point of
| collecting money through taxes?
| ralston3 wrote:
| Taxes creates demand for USD (an artificial way of giving
| fiat USD "value")
| JamesBarney wrote:
| Countries that try to print money instead of collecting taxes
| usually end up with pretty bad inflation.
| bsedlm wrote:
| interesting... https://www.quora.com/Why-has-the-IRS-been-
| repeatedly-defund...
| raindear wrote:
| Progressive taxation.
| thehappypm wrote:
| This is actually a really interesting question.
|
| There's a really good argument to be made that taxes are
| actually a huge part of why dollars have a stable value.
|
| Let's say you buy a house for $1 million. 1% interest rate
| means you have to pay $10,000 every year to your local tax
| board. That means that you need to acquire US$10,000 or you
| lose your home. That means you need to earn USD. If the USD
| hyperinflated, 1% of your house is now $100,000. Now you need
| to go earn $100,000 and pay that in taxes -- which is
| actually making dollars more in demand, countering inflation.
| bsedlm wrote:
| very interesting...
|
| now add in asset forfeiture driven by legally mandated
| black markets and the picture is ever so slightly more
| complete.
| ChrisLomont wrote:
| >you pay no income tax on your rental income
|
| And are losing value on the property, which is the point of
| depreciation.
|
| >~30 years later, you've deprecated it down to an effective
| value of $0
|
| An no one will now rent, since your building has an effective
| value of $0 since it has become crap.
|
| All throughout your list you ignore all the costs involved in
| being a landlord. Have any friends that have tried it? (I do).
| Did they become silly rich? Or did they quit because it is a
| major problem to actually make it very profitable versus other
| uses of capital and time? I'm a decently saavy investor (in
| many things), and have watched multiple friends start up rental
| properties, only to stop once it became clear that tenants
| destroy things, costs to maintain properties are volatile and
| astronomical, the work required is significant, and so on.
|
| I have done the math on real estate investing many times, and
| each time have decided the returns are not worth it.
|
| >The net result is that rental properties generate a ton of
| income for the owners
|
| If it were so profitable, then tons of capital currently being
| spent on other uses (tech, medical, finance) would instead go
| into buying up more housing. But the fact is that being a
| landlord is not very profitable, so capital doesn't flood into
| that market - it is still mostly elsewhere.
|
| Historically, housing has performed quite similar to the stock
| market for returns - as it should be. If housing were a better
| investment, money would flow in until they balanced. If housing
| is too poor an investment by screwing with taxes, then money
| will flow out into other more productive places. And if money
| flows out, people wanting housing will then have to pay even
| higher prices for less stock.
| bps4484 wrote:
| "An no one will now rent, since your building has an
| effective value of $0 since it has become crap."
|
| This isn't true. You will have put money into the property to
| keep its value up, _also writing off all of those expenses_ ,
| so that you can still rent it out.
| Emma_Goldman wrote:
| >"Did they become silly rich? Or did they quit because it is
| a major problem to actually make it very profitable versus
| other uses of capital and time? I'm a decently saavy investor
| (in many things), and have watched multiple friends start up
| rental properties, only to stop once it became clear that
| tenants destroy things, costs to maintain properties are
| volatile and astronomical, the work required is significant,
| and so on."
|
| I'm sorry but this flies in the face of my experience. Most
| landlords I have met buy properties and then outsource their
| administration to property management companies. I have never
| seen or spoken to my last three landlords, none of whom lived
| anywhere near the same city as the property.
|
| Landlordism is parasitic in the literal sense of the word.
| Landlords get rent and capital appreciation for doing nothing
| but possessing an ownership title. The propertyless pay the
| propertied a premium to live.
|
| In light of both those observations, I would say any
| enrichment in this case is "silly", and that landlords don't
| tend to do much - or any - work.
|
| >"If it were so profitable, then tons of capital currently
| being spent on other uses (tech, medical, finance) would
| instead go into buying up more housing."
|
| This is a non sequitur. If X is profitable and the market
| knows X is profitable then it should, in theory, be
| attracting exactly the amount of capital it merits already.
| In the UK, where I live, the rental sector has exploded,
| jumping from 2.8 million households in 2007 to 4.5 million in
| 2017. [1]
|
| [1] https://www.ons.gov.uk/economy/inflationandpriceindices/a
| rti...
| ChrisLomont wrote:
| And there was a housing crash in there and decent growth in
| population over that time.
|
| Next, instead of picking a window wrapping the biggest
| housing bust in a century, pick various decades and see how
| normal volatility behaves - and you might find this
| variability not uncommon.
|
| In fact, from your own source, Figure 1 - the percent of
| rented properties is, well, nearly constant over the entire
| window (31% rented in 2007, 37% rented in 2017). And
| somewhere in there mortgage laws got significantly tighter
| - no need for pesky investors to be the cause of less
| mortgages.
|
| So go figure, right? Lots of reasons and complexity in
| there.
| Emma_Goldman wrote:
| >"And there was a housing crash in there and decent
| growth in population over that time."
|
| There was a slight slump in rentals after the financial
| crisis, not before. So if anything it would depress the
| subsequent growth. In England the population grew over
| that period from about 51 million to 55 million. That's a
| 7% increase. Privately rented households, as per the link
| I posted above, rose by 63%. Hardly compelling.
|
| >"In fact, from your own source, Figure 1 - the percent
| of rented properties is, well, nearly constant over the
| entire window (31% rented in 2007, 37% rented in 2017).
| And somewhere in there mortgage laws got significantly
| tighter - no need for pesky investors to be the cause of
| less mortgages."
|
| Figure 1 shows private rentals increase from 13% in 2007
| to 20% in 2017. Social rentals, which you are bizarrely
| conflating with private rentals, refers to social
| housing, and is exactly what I think should take the
| place of landlords. So its decline reinforces my point.
| ChrisLomont wrote:
| >There was a slight slump in rentals after the financial
| crisis, not before
|
| And a significant decline in mortgages over that time,
| likely due to mortgage law changes as a result of the
| crash. Making it slightly harder to get a mortgage would,
| over time, move people from mortgages to rentals, which
| is exactly what the data shows, right?
|
| UK added Basel capital rules, the affordability test, and
| changed capital ceilings in banks, among other changes.
| Academic papers list these as being major drives in
| declines in UK mortgage rates. Those people rent instead.
|
| All with no need for speculators to drive the market up -
| the laws changed.
|
| >Social rentals, which you are bizarrely conflating with
| private rentals
|
| Ah, so now we're only taking a subset of renters. Good
| idea.
| commandlinefan wrote:
| > any enrichment in this case is "silly", and that
| landlords don't tend to do much - or any - work
|
| Hm - the same could be said about your 401(k), but you
| probably expect to live off of it at some point in your
| life, right? At worst, buying and renting properties is a
| (risky) investment.
| MarcelOlsz wrote:
| Nobody pays me for the privilege of living inside of my
| 401k though.
| djbebs wrote:
| If your 401kholds stocks or bonds, they probably do.
| PaulDavisThe1st wrote:
| > Most landlords I have met buy properties and then
| outsource their administration to property management
| companies.
|
| Who do not actually _pay_ for any repairs or upgrades to
| the property (that is the landlord 's responsibility, and
| who in addition take an extra 5-20% of the rental upfront.
| Yes, it "outsources" actually dealing with the rental
| property and renters, but has no impact on the costs other
| than making them higher.
| commandlinefan wrote:
| > once it became clear that tenants destroy things
|
| Or/and just refuse to pay rent for _years_ while you try to
| evict them.
| fwip wrote:
| Then you're not trying very hard.
|
| https://rentprep.com/evictions/when-can-i-evict-a-tenant-
| for...
| wonnor wrote:
| >>~30 years later, you've deprecated it down to an effective
| value of $0
|
| >An no one will now rent, since your building has an
| effective value of $0 since it has become crap.
|
| Are you really in good faith trying to argue that nobody will
| rent a house that is 30+ years old?
| jefftk wrote:
| Maybe they're saying that if you don't maintain a house for
| 30y it will be unlivable?
| andrewmutz wrote:
| He's saying that you factored in the depreciation
| deduction, but never factored in the expenses of related to
| keeping the property in good shape.
|
| So you either left them out of your math, or you planned to
| do zero upkeep (hence, "nobody would rent it")
| ChrisLomont wrote:
| Bingo - I'm surprised so many didn't understand the
| thread flow and jumped on this....
| wonnor wrote:
| To claim that you need to spend money equal to the tax-
| assessed value of the building over the course of 30
| years to maintain equal value is slightly less
| ridiculous, but still not exactly reasonable. The
| (conservative) rule of thumb is 1% of the property value
| per year in repairs, which would be 30% of the property
| value over 30 years. And even then, it seems there's no
| shortage of fairly decrepit buildings that have no
| problem finding tenants.
| DubiousPusher wrote:
| Here is a starter list of things a house will need over
| the course of 30 years.
|
| - a new roof (maybe two if they are 15 year rooves)
|
| -new siding (unless fiber cement siding was installed
| originally)
|
| -new exterior paint
|
| -new windows
|
| -major repairs to the driveway
|
| -2 new furnaces
|
| -2 to 3 new water heaters
|
| -2 to 3 full new sets of appliances
|
| -1 cosmetic kitchen remodel
|
| -1 cosmetic remodel of each bathroom
|
| -1 to 2 cosmetic relandscapings
|
| -1 to 2 new floors (depending on the flooring material
| chosen)
|
| -new exterior doors
|
| -new garage doors and openers
|
| None of this includes any repairs the home may have
| needed at the time of purchase. Nor does it include any
| upgrades. Nor does it include any unexpected repairs that
| may not be covered by insurance (there are many). Nor
| does it include any of the dozen or so minor repairs you
| either have to do yourself or get a handy man for.
|
| I'm not going to symp for the landlords but maintaining
| property is brutally expensive. I know because I bought a
| 40 year old house. Since I bought a home I've become very
| convinced that there are a ton of landlords losing their
| ass out there. Some have been saved by the ridiculous
| property valuations we've seen lately. But that is not
| the norm. Houses typically increase in value at a pace
| with inflation.
|
| Personally, I would only ever rent housing I had specced
| myself because the design choices and material choices
| have a huge impact on the cost of maintenance.
| jjav wrote:
| > Here is a starter list of things a house will need over
| the course of 30 years.
|
| My house is 25 years old (bought it new) and from your
| list, the only things I've done is exterior paint and
| water heater.
|
| I've also done cosmetic landscaping but that was strictly
| optional, as I like to work on the yard.
| ChrisLomont wrote:
| >To claim that you need to spend money equal to the tax-
| assessed value of the building over the course of 30
| years to maintain equal value is slightly less
| ridiculous, but still not exactly reasonable.
|
| No one wrote that either. You're reading what you want to
| argue into what is written yet again.
|
| > which would be 30% of the property value over 30 years
|
| Ignoring increasing property value, compound interest,
| opportunity cost, that plenty of places put this between
| 1 and 4%, and that pretty much all places indicate the
| rate increases as the property ages, and that this rate
| is for owners whereas tenants are statistically worse on
| property, then sure.
|
| For example, State Farm [1] recommends between 1% and 4%,
| which would vastly increase your estimate. And tenants
| are statistically worse on property than owners
|
| In reality it's a far larger cost over 30 years than 30%
| of the original price.
|
| [1] https://www.statefarm.com/simple-
| insights/residence/how-to-b...
| djbebs wrote:
| Are you aware of the concept of risk? The amortization
| schedules are what they are for a reason, even if not all
| houses only last 30 years, the average is what matters
| here.
|
| Any number of things can result in houses being destroyed
| and become worthless prior to that time, including damage
| from earthquakes, fires. Additionally poor initial building
| standards, or changing building standards, or new
| regulatory barriers can make certain properties become not
| just worthless, but have an active cost to their owners and
| therefore have negative value.
| Ajedi32 wrote:
| If it's worth $0 then by definition you couldn't sell the
| property for more than $0, let alone charge a monthly rent
| higher than that.
|
| Obviously that wouldn't actually happen in real life, which
| I think is the GP's point.
| ChrisLomont wrote:
| >Are you really in good faith trying to argue that nobody
| will rent a house that is 30+ years old?
|
| Nope, pointing out that in order to keep the house
| rentable, the landlord has in put money into over all those
| years, which the OP left out.
|
| A house that has had no money spent on for 30 years would
| not be rentable, right?
|
| So depreciation is not a free ride.
| lovich wrote:
| Why would it not be rentable? That's an assumption that
| doesn't stand on its face when you look at the
| unmaintained crackhouses landlords will rent easily
| because demand is so high for housing.
| bitexploder wrote:
| Narrator: They were not arguing in good faith.
|
| I know we like to give the benefit of doubt here on HN, but
| that crosses a line. Landlords are known to perhaps not
| take the best care of their property, but in general, even
| if a tenant totally trashes the place it isn't too hard to
| strip down whatever got abused and rebuild it. Same thing
| happened to us when we rented a property. Tenant did as
| much damage as you can imagine with pets and abuse short of
| ripping wires and pipes out of the walls. It was really
| annoying to fix, but not hard. In the [late] 2020 real
| estate market it was easy to sell it and the house
| appreciated like 30-40K since we sold it easily.
| robertlagrant wrote:
| It doesn't cross any lines. This is HN, not some chest-
| thumping political rag.
| saiya-jin wrote:
| I'd say the truth is somewhere in between. It is really,
| really not that great unless you have some superbly well
| located shiny great apartment in Manhattan or some other
| center center which gets 100% short term rental ie airbnb.
| But then this is multi-million $$ property.
|
| Long term rentals - the gains are minimal given how much
| capital is completely locked in that property and not doing
| anything else. If you are lucky, you have long term nice
| tenants and stuff generally doesn't break (ie heating/wash
| machine bursting and flooding everything, including 5
| apartments below). If unlucky, 1 bad accident that needs to
| be fixed asap will wipe out any income you have for given
| month, if not more.
|
| Utterly random example - I got locked out (if thats the
| proper term) last sunday evening, went for a walk and big
| weird key wasn't turning in our old very massive (15cm
| thick & heavy) doors that look like they could handle a
| nuclear blast. Called some emergency services for this and
| they opened it, but showed me the lock basically
| disintegrated and I was lucky they didn't have to drill
| huge hole in those doors to get in and pay tripple the
| cost. The cost for new lock in those doors with all work?
| 2400 Swiss francs (cca 2500$), and that was work week rate
| of one of the cheaper agencies doing this, albeit in
| Geneva, one of the most expensive places to live. For a
| freaking lock that is just old design, fitting some 50
| years old doors. Guess who pays that? Well me but I will
| get 100% reimbursement from agency who will get it from
| owner.
|
| Properties are great if you inherit them and suddenly have
| a nice passive income (and management worries). Or if you
| are lucky with timing and in 10 years they jump 3x with
| value. Thats over now. I wouldn't invest in properties now
| unless its for primary residence and then a lot of emotions
| and other concerns come into equation, but financially its
| not great.
| fwip wrote:
| $2500 isn't that far off of the monthly rent for a single
| apartment in a lot of American cities. Sure, your old
| door might need a new lock after 30+ years (although
| given it was 15cm thick I'll bet it was much older than
| that).
| cheriot wrote:
| > And are losing value on the property, which is the point of
| depreciation.
|
| The house depreciates while the land appreciates. In the US
| for the last 50 years has been net appreciation for most
| homes.
|
| > If it were so profitable, then tons of capital currently
| being spent on other uses (tech, medical, finance) would
| instead go into buying up more housing.
|
| Hedge funds have been buying houses at scale since the great
| recession.
|
| > Historically, housing has performed quite similar to the
| stock market for returns
|
| Which increases faster than incomes. Hence the way each
| generation has a declining rate of home ownership.
| djbebs wrote:
| Why do you believe land appreciates?
| cheriot wrote:
| A house without a major renovation will slowly depreciate
| yet housing prices in mid to major cities continue
| rising.
| mminer237 wrote:
| You don't write off your rental income. You depreciate the
| rental property over 271/2 years and write that off against
| your rental income. Few rental properties will have under a
| 3.7% ROI where depreciation would cover all the income. At best
| you might be paying half tax. In your example, you'd pay no
| tax, but you'd lose out on the potential income you could have
| had with better investments (and lose about 6 years' worth of
| depreciation by the depreciation then being too fast).
|
| And flipping to more and more expensive properties through
| 1031s requires more and more capital and only makes it cover
| less taxes. There's no tax benefits versus just keeping the
| first property and paying all the taxes and buying a separate
| property to depreciate.
|
| If you sell a $500k property earning $40k/year where the
| depreciation covered 45% of your income, and you buy a $1
| million property earning $80k/year, you get a new $500k to
| depreciate $18k/year. Then the depreciation only covers 22% of
| your income.
|
| Depreciation is very fundamental to business tax law. I'm not
| sure how you'd "fix" that without penalizing non-rental
| companies for expanding.
| bps4484 wrote:
| "Few rental properties will have under a 3.7% ROI"
|
| This is a leveraged investment (meaning you have a mortage).
| What that means is for your 20% down payment (the actual
| money you invest), that 3.7% writeoff on income can be an
| 18.5% cash on cash yield (ROI) in which you pay no taxes,
| ever. Few properties on the market can get you a better yield
| than that _. If your ultimate yield is less than that you can
| roll those losses over year over year, so that then later if
| /when you get more yield you _still* don't have to pay any
| taxes. It's a really big tax loophole and is the reason
| Donald Trump pays almost nothing in taxes (and he admitted as
| much in the presidential debate).
|
| *I own 3 properties in buffalo, one of the best rent to value
| markets in the US, and it's hard to find better yield than
| that even in that market.
| https://simplepassivecashflow.com/rv/
| happiness_idx wrote:
| As a home-owner not landlord (I am against the idea of owning
| more property than my family will use) I WISH I could write
| off half of my property tax.
| tpmoney wrote:
| Unless your property taxes are over $20K per year, you can?
| It's just most people don't because their standard
| deduction is greater than what they have records for
| itemizing. https://www.thebalance.com/property-tax-
| deduction-3192847
| dexterdog wrote:
| When you are the owner/user and not the landlord you should
| be paying the taxes because most of the taxes are for use
| in the local community and most of that is schooling. The
| landlord gets no benefit from the majority of that stuff.
| The tenant does.
| PaulDavisThe1st wrote:
| That assumes that the landlord lives in a different tax
| jurisdiction. Possible, certainly, but not inevitable.
| dexterdog wrote:
| If he lives in that jurisdiction then he is paying the
| taxes for the place where he is living.
| PaulDavisThe1st wrote:
| But also benefits from the taxes paid on the rental
| property that help pay for things they and their family
| use.
| rpmw wrote:
| If you take the standard deduction isn't that exactly what
| you are doing?
| JamesBarney wrote:
| I wish I could write off all my personal expenses as
| business expenses. But I understand why the laws are
| written such that I can't
| mindslight wrote:
| I actually don't understand why the laws are written that
| way, apart from the political goal of causing W2 workers
| ("suckers") to bear a disproportionate tax burden. A W2
| worker incurs expenses that are necessary to earn their
| income, including food, transportation, clothing, and
| healthcare. If they were able to account for these
| necessary expenses as a business does, the expenses would
| be directly deducted from income.
|
| And that's not even getting into the S-corp self-
| employment-tax dodge.
| [deleted]
| rory wrote:
| You're skipping over the (extremely important) part where you
| take out a mortgage on property.
|
| So you buy the $500k property with $125k in cash and a $375k
| mortgage (25-30% down is typical for investment mortgages).
| Depreciation *plus mortgage interest expense* leads you to
| (for tax purposes) more or less break even on this investment
| after 10 years and so you pay no tax.
|
| After those 10 years are up, you've now paid off around $68k
| of the principal, plus the asset has gained $250k in value.
| So from your initial $125k of capital invested, you now have
| ~$400k in capital that you can leverage into a $1.6M property
| in a 1031 exchange. That bigger loan comes with a much larger
| mortgage interest expense, so you continue to earn no taxable
| income while growing a larger and larger asset and taking a
| (relatively modest) cash-on-cash return.
| fhrow4484 wrote:
| The mortgage interest deduction has a cap though, right?
|
| https://turbotax.intuit.com/tax-tips/home-
| ownership/deductin... seems to indicate there's a cap on
| the amount, as well as number of homes (only primary and
| secondary, not third, fourth etc)
|
| Or are people going around those caps somehow?
| aorloff wrote:
| The mortgage interest deduction is for your primary home.
| Investment property mortgage interest is a business
| expense
| nly wrote:
| It's wild to me that Americans can deduct mortgage
| interest from their tax bill ...
| muti wrote:
| New Zealand only recently passed a law that will phase
| out rental interest deductions over 4 years
|
| https://www.ird.govt.nz/pages/campaigns/interest-
| limitation-...
| abeppu wrote:
| This is certainly not my area so I could be missing something
| basic. But after you sell a property, why shouldn't that
| force a reevaluation on past depreciation writeoffs? In
| idkyall's post, they mention the scenario of depreciating
| your property down to an effective value of $0 and then
| selling to buy another property to start again. You've argued
| that this only covers a fraction of your income. But at a
| basic level, if you get enough from the sale to buy a new
| property, then the old one must have been worth much more
| than $0 so one was wrong for decades about claimed
| depreciation ... right? In which case, it seems like it
| should be natural and fair to have to pay up on taxes from
| those previous years.
|
| If I can invest in real estate, rent it out for decades, and
| then sell it at a significant profit (which seems to be the
| case in many in-demand cities), then why should _any_ amount
| of that rental income get a to be balanced against imaginary
| depreciation?
| foota wrote:
| What you describe does happen, unless they use that
| transfer process described, but by doing so they reduce the
| effective cost basis of the new property by the difference
| between the cost basis of the old one and the sale price.
| rory wrote:
| Yeah the 1031 exchange simply defers the tax to a later
| time. But if you defer it until you die, your heir (in
| many cases) gets off tax-free.
| foota wrote:
| Yeah, I guess the unintended? consequence here is that
| the lack of a time window allows indefinitely propagating
| it, maybe the exchange should come with a time window
| phase out.
| sbf501 wrote:
| We need a third party to validate both of your claims,
| because I don't know where to start to understand who is
| right. This is an example of someone (me) who wants to
| understand the issue, but would need to google for days to
| understand both arguments.
| [deleted]
| toss1 wrote:
| The rebuttal by mminer237 is much closer to right [0].
|
| Also it isn't even as good as mminer237 mentions, as many
| states also have a much lower exemption, and there is work
| in congress to get rid of the step-up in basis (a bad
| thing, imo) and to reduce the $12MM lifetime gift & estate
| exemption (a very good thing).
|
| So yes, there are some advantages, but OP is vastly
| exaggerating as if it is some freebie to landlords when it
| is not. There were some freebies introduced in the bills in
| the Trump term for the type of LLCs that Trump runs, but
| IDK if they were fixed in legislation in this term.
|
| If you want a general complaint, perhaps the angle is that
| capital is taxed much less than labor, under some notion
| that lower taxation is necessary to get people with capitol
| to actually deploy it in investments. I think that is
| provably false, and certainly does not require the level of
| tax code favoritism it currently enjoys.
|
| [0] source: tax & estate attny at biglaw firm in the
| household, although this is just from info absorbed by
| osmosis over years and is NOT a detailed legal analysis.
| sbf501 wrote:
| Thank you.
|
| > If you want a general complaint, perhaps the angle is
| that capital is taxed much less than labor, under some
| notion that lower taxation is necessary to get people
| with capitol to actually deploy it in investments.
|
| Yes, I recall when cap gains taxes dropped significantly
| during GWB and was, sadly, happy. Of course, I was just a
| dumb 20-something and didn't realize how much of boon to
| the wealthy it was.
| robertlagrant wrote:
| It's a boon to anyone whose job was created by it as
| well, and whose life was made cheaper by capital
| investments in automation and/or scale.
| toss1 wrote:
| Yes, the question is how much of a boon it needs to be.
|
| The fact of the matter is that people with capital want
| to invest and grow that capital. It is absolutely false
| that if that activity is taxed, it will disappear. Just
| as obviously, if all capital gains are taxed at 100%, it
| will disappear. The question is the balance - how much to
| tax it so that the wealthy don't merely get wealthier at
| everyone elses' expense.
|
| It may also be a good idea to tax underutilized capital,
| as land is taxed.
| naasking wrote:
| Perhaps you'd like to address rory's reply here which
| explains how the original post would actually work:
|
| https://news.ycombinator.com/item?id=32500536
| toss1 wrote:
| ummm, the mortgage interest deduction does NOT apply to
| rental properties, only your primary residence or a 2nd
| home that you spend at least 14 days or >10% of the time
| you rent it out. So, if you are talking about a fully
| rental property, it is incorrect.
|
| I'm not saying that there are no advantages or
| deductions, only that this character is trying to portray
| it as the govt basically giving landlords all the funding
| to become landlords. If that were the case, he should
| simply do it -- there's plenty of no/low money down ways
| to get into it --, but I notice that he is not doing it.
| It just smacks of a lot more attitude than fact.
| [deleted]
| cannaceo wrote:
| Aside from a 1031 you can do what I do and take loans against
| the property to buy the next property. Keeps your tax basis
| lower. At least in LA county the appreciation is limited to
| 2% a year while the increase in property value has been 20%+
| the last few years.
| sizzle wrote:
| How many times can you do this until the banks will not
| entertain the Idea? Does this only work in a market where
| home prices only go up?
| huevosabio wrote:
| You fix it by deprecating only the improved value.
|
| The land beneath a building does not deprecate, whereas the
| value of the building should.
|
| Since for most properties the majority of the value is in the
| land itself, your basis to deprecate would be much lower, and
| more realistic.
| ouEight12 wrote:
| > Since for most properties the majority of the value is in
| the land itself
|
| I'm not sure that's the case for the majority of the
| country. At-least it's not here in my greater metro area
| (suburbs or rural... yuppie downtown areas... perhaps, but
| again, downtown is not majority for most places)
| wizofaus wrote:
| I'd think anywhere where apartments are viable to build
| it would be true, and of course large rural properties.
| Whether they make up "most properties" I'm not sure - it
| would surprise me if much less than half of properties in
| Australia were sitting on land worth more than the house
| itself (despite the enormous amount of undeveloped/low-
| value land we have!).
| randomdata wrote:
| It may be not true right now amid difficulty in finding
| labour and materials. Much like cars, the value of a used
| home is proportional to the cost of building a new home.
| When new homes are difficult to acquire, cost of used
| homes go up. Used cars have also increased in value
| lately for the same reason. This is not typical, however.
| These are normally depreciating assets.
|
| Under usual market conditions, houses are headed to being
| on the older side and reaching the end of their effective
| lifetime, leaving little value left in the structure. You
| can renovate a home to bring it back to new-like
| condition, which restores value to the structure, but
| that cost must be maintained in the equation.
| djbebs wrote:
| This georgist view is just plain wrong and inconsistent.
| dbjacobs wrote:
| This is already the case. You can only depreciate the
| building value not the land portion. So single family homes
| have much lower depreciation since most of the value is
| typically in the land vs an apartment which is the
| opposite.
| huevosabio wrote:
| In paper, but we constantly underestimate the value of
| land.
| JamesBarney wrote:
| You can't just make up the value of the land. It's pretty
| easy to figure out unlike say a business.
| jefftk wrote:
| At least around here (Boston area) there are really three
| things of value with a lot:
|
| 1. The land value.
|
| 2. The structure value.
|
| 3. The right to have this structure on the lot.
|
| That is, if you tore down the structure you wouldn't
| generally be able to build anything anywhere near as
| large, because the building predates zoning.
|
| Assessment ignores (3), and groups it in with (2), which
| then depreciates. Which isn't right, because (3) doesn't
| depreciate
| UncleOxidant wrote:
| A 1031 exchange also has to be completed within 45 days.
| That's pretty tight.
| oogali wrote:
| Identify 3 candidate properties within 45 days.
|
| Close on one property within 180 days.
| kaibee wrote:
| > I'm not sure how you'd "fix" that without penalizing non-
| rental companies for expanding.
|
| A land value tax would be a pretty straight forward solution
| to most of the issues around this.
| djbebs wrote:
| Define land value.
| pooper wrote:
| I think the only long term solution is a federal land and
| building tax. This is too important to leave to states (and
| definitely local) governments. A high tax with no credits,
| deductions, exemptions.
|
| Then, from this tax, we can pay "forward" every adult tax
| payer (not children, only adults) a fixed amount that pays
| the cost of an imaginary nationwide median cost of a two
| bedroom unit. Only adults, all adults, regardless of
| whether you have no child or eight children. Must file a
| federal income tax return to qualify. Median nationwide
| cost somehow calculated and weighted by population,
| hopefully updated more than once a decade.
|
| Everybody from Amazon.com to Walmart pays this land +
| building tax regardless of whether they are in Manhattan,
| New York or Deport, Texas. No exceptions.
| [deleted]
| kelnos wrote:
| > _Each year you can offset your rental income against [...]
| property taxes_
|
| The ridiculous thing is that, since the SALT deduction cap went
| into effect (and so narrowly avoided the axe this past week,
| ugh), people who live in states with high property taxes end up
| being able to deduct only a small amount of their property
| taxes on their primary home, but if they own investment
| property, they can typically still deduct all of it -- and I
| believe they can deduct on their _state_ taxes as well, whereas
| the SALT deduction is only available at the federal level.
| 0000011111 wrote:
| Ya I think you are leaving out the concept of Deprecation
| Recapture.
|
| In short, if I buy the rental property for $10. Deprecate it to
| $0 over 27.5 years. Then Sell it for $20. I then haft to pay
| taxes on the sale of the profitable asset.
|
| ###### Depreciation recapture is a tax provision that allows
| the IRS to collect taxes on any profitable sale of an asset
| that the taxpayer had used to previously offset taxable income
| ######
|
| https://www.investopedia.com/terms/d/depreciationrecapture.a...
| .
| mdavis6890 wrote:
| Really the only problem here is the step-up cost-basis at death
| that you mention. This is indeed a big problem, and the fix is
| simple: Your heirs inherit your cost-basis as well (likely $0),
| so that when/if they sell it they have to pay taxes on the
| whole capital gain. We could also force the payments over some
| years, by increasing the cost basis and taxing on that amount.
| e.g. I inherit a property worth $1M and zero cost basis. After
| one year, I have to pay capital gains taxes on $100k, but my
| cost basis also goes up by $100k. Repeat each year up to $1M.
|
| The other stuff (depreciation, 1031 exchange) are very sensible
| accounting. Depreciation applies only to the improvements
| (buildings) on the land, not the value of the land itself. This
| reflects genuine loss of value over time (buildings wear out).
| And in the event that you sell the property at a profit down
| the road, you have to pay back all that tax savings at higher
| regular income rates (not lower capital gains rates). This is
| called "depreciation recapture." So depreciation can defer
| taxes, but not eliminate them.
|
| Likewise, when you do a 1031 exchange, your new property ends
| up with a lower cost basis based on the previous property, so
| that when you later sell it you still have to pay all that
| capital gains tax and depreciation recapture. It defers but
| does not reduce or eliminate taxes.
|
| Of course - if you die while holding these properties, then
| your heirs get the cost basis reset ("stepped up"), which does
| indeed eliminate all these taxes. This is what we need to fix.
| [deleted]
| Enginerrrd wrote:
| >Really the only problem here is the step-up cost-basis at
| death that you mention. This is indeed a big problem
|
| Why is that a problem?
| mdavis6890 wrote:
| It provides a large artificial financial incentive to hold
| onto a property that you otherwise would sell.
|
| I also think it's not right to create this kind of
| arbitrary, large tax break that only applies in specific
| circumstances. I think if we're going to have a capital-
| gains tax (and maybe we shouldn't), then we should keep it
| simple and not have carve-outs.
|
| If I sell my house while I'm on my death bed, I pay all the
| taxes. If I wait a week to die first, and then my heirs
| sell, no tax. This is wrong and unnecessary.
| dgs_sgd wrote:
| But this only works as long as the property's price is
| depreciating. Don't property prices generally trend up over
| time?
| ChrisLomont wrote:
| As long as the owner puts significant money into the property
| over time to fight depreciation. Entropy applies to houses
| after all.
| ErikVandeWater wrote:
| The effects of lowering taxes on rental income is complicated.
|
| If you lower the taxes on rental income, more people will buy
| houses (and build new ones!) to take advantage of the reduction
| in taxes. However, they will still have to rent the
| apartments/houses out at market prices. The rental price will
| go down because now there is a greater supply of houses, and
| renting out an apartment at a lower rent is equally profitable
| as before (since you don't have to pay as much in taxes).
|
| The cost of purchasing a house, however will increase, because
| there are more landlords competing to purchase the house with
| you.
|
| Overall, the real problem is zoning single family homes
| everywhere, and rent control that disincentivizes building new
| housing.
| Kalium wrote:
| If you're in California, your children also get to inherit your
| price-controlled tax assessment.
| tomrod wrote:
| I really don't understand what you're describing. Can you
| recommend a place where I could learn more about "deprecation
| of the property and property taxes"?
| effingwewt wrote:
| And it gets better!
|
| They now have the added buffer of rental/leasing agencies! Many
| of these are fly-by-night and skirt or outright ignore
| inconvenient laws like renter's rights.
|
| Repairs? Cost sink, just don't renew complaintant's lease.
| Bonus you get to raise the rent again!
|
| Want to get in touch with the owner? Most times you'll have to
| look up tax records and hope it's actually in the owner's name.
|
| Makes rental properties probably 90/10 profit/cost.
|
| I know people on both sides of the equation and it's more than
| a little insane the entitlement some landlords feel.
| supertrope wrote:
| The heart of the problem is low vacancy giving landlords
| market power. The inherent scarcity of land in desirable
| locations is amplified by zoning laws keeping housing supply
| growing much slower than demand. When 90% of urban land is
| zoned for single family housing and it is literally illegal
| to build a duplex let alone an apartment building you will
| have a shortage. Eliminate parking minimums, setbacks,
| feature area ratio, height limitations, endless environment
| impact lawsuits, and build!
| rootos wrote:
| Rental/leasing agencies can ignore laws...but the courts
| don't. And the machinery of law enforcement, from bailiffs to
| cops to IRS revenue agents, keep both sides somewhat in line.
| dkarl wrote:
| This is a really counterproductive take, not because of the
| ways it's wrong about how rental income works, but because it
| paints a completely wrong-headed picture of whose interests are
| opposed to progress. People who own property they don't live on
| stand to make a lot of money under policies that allow them to
| build more and build denser. It's homeowners who are opposed.
|
| EDIT: Lots of propaganda in these comments painting individual
| homeownership as the cure for our housing crisis. It's not.
| It's the cause.
| 2OEH8eoCRo0 wrote:
| > unless your estate is over 12 million dollars(and double that
| for a married couple), you pay no estate taxes.
|
| Why aren't estates just taxed as income to the entity who it
| goes to? If my father croaks and leaves me $1m it should count
| as an additional $1m of income to me that year.
| TrueSlacker0 wrote:
| "If my father croaks and leaves me $1m it should count as an
| additional $1m of income to me that year. "
|
| If it is $1m in property value, do you count that as still
| $1m of income? If so unless the child is in great financial
| situation with a lot of already liquid cash, they would be
| forced to sell part/all of the property to pay the taxes.
|
| If a parent croaks and has a small business, mom and pop
| style. How would that be handled? If they had a small corner
| store making 100k/profit but has no assets vs a shop that
| sells very expensive equipment making 100k/yr in profit. But
| has hundreds of thousand in assets that would pass down.
| rhacker wrote:
| how do you tax a house that isn't a dollar amount?
| adamsmith143 wrote:
| Because that 1M has already been taxed either as income or
| investment. Why should it be taxed twice?
|
| Amounts over 12M are indeed taxed twice.
| 0x138d5 wrote:
| That would be awesome for gentrification. Jack up the
| property prices and when the owners pass, their heirs will be
| forced to sell.
| ROTMetro wrote:
| Fine, as long as you tax based on what was paid for the
| property. The father is giving his invested money, no one
| chose to 'realize' at the current valuation, it is happening
| because of a traumatic family event.
| fwsgonzo wrote:
| That sounds fair to me. I wonder if there any countries
| already doing it this way?
| TrackerFF wrote:
| When purchasing real-estate in a hot area, the real money comes
| from increasing prices. Some cities have had something like 10%
| - 15% annual growth, for 10 years straight.
|
| Banks are also much more forgiving when it comes to down-
| payment, when they know it's going to be a rental, and you
| already have other rentals as collateral.
|
| In essence, purchasing a rental unit with only 1%-5% down
| payment up-front, is kind of like purchasing stocks with 20x -
| 100x leverage. As long as you meet your mortgage payments, get
| steady rent, and don't get any crazy expenses - you're sitting
| on a goldmine.
|
| Some of the guys I went to school with did just that. Bought a
| rental unit, while working. All their salary went toward down-
| payment of the next unit, and the banks were very forgiving
| when it came to new loans. After 10 years they had a nice
| portfolio of rentals, which they then sold to typical real-
| estate investment funds.
| oogali wrote:
| If the bank knows it's a rental, it's considered a commercial
| mortgage with a minimum of 25% down.
|
| And if you're lying to the bank by saying it's a residence
| when it's meant for rental -- you've just committed fraud
| (it's one of the clauses in your mortgage).
| mateo411 wrote:
| > Banks are also much more forgiving when it comes to down-
| payment, when they know it's going to be a rental, and you
| already have other rentals as collateral.
|
| I don't think that's true. The interest rate on your loan
| will be more expensive if it's an investment property and the
| LTV requirements are more strict.
| jklinger410 wrote:
| This system is clearly designed to subsidize and create new
| landlords. Which is one of many desperate micro-economies that
| American capitalism has spun up in order to manufacture
| economic activity.
|
| We should be doing the opposite.
| sudosysgen wrote:
| That's horrific. From a quick back of the envelope calculation
| that's hundreds of billions of unrealized taxes.
| sinecure wrote:
| I disagree that the 1031 exchange laws are detrimental to
| society. In fact, I would argue that their existence boosts the
| rate of development and increases housing supply in the US.
|
| Firstly, why does the government deserve to tax these
| transactions at all? These landlords are already taxed on their
| income from their jobs, pay property taxes, pay taxes on all
| the products they buy. The government is extracting plenty of
| wealth from its citizens, why on earth would we demand more of
| people just for being successful in real estate? Will the
| government put their money to better use than these people
| spending it themselves on products and services? I think anyone
| who engages with public sector projects and services knows that
| the government does not efficiently spend money.
|
| Let's imagine a world where 1031 exchanges are banned. What
| happens? Wealthy investors no longer sell properties at the
| same rate. What's the point? If my apartment building is cash
| flowing every year, and I'm stuck paying a huge capital gain
| tax on the sale, I'll just hold it for life and enjoy the cash
| flow. The rate of real estate transactions would collapse
| overnight, killing all of the jobs connected to it from
| appraisers, to brokers, to investment firms and wealth
| advisors. Now, not only does the government get less tax
| revenue because overall real estate transactions and taxable
| events are diminishing, but there is less incentive to build
| new projects.
|
| The appetite of 1031 exchange buyers is one of the driving
| factors in development of new commercial real estate projects
| in the market! The profit motive spurs growth. Look at the
| Opportunity Zone legislation of 2017, a once in a lifetime
| chance to defer and eliminate capital gains as long as you are
| investing those gain dollars into real estate development in
| blighted areas. This tax incentive alone has generated hundreds
| of thousands of new residential units on the market that would
| never have been built without the tax incentive. Taxing real
| estate more would only slow growth, if we want people to take
| the time, effort and risk to build more housing units in the
| US, we need to incentivize them with less taxes.. not more.
| kindatrue wrote:
| I just think about this letter to the Atherton (median sold home
| price: $7.6M) Mayor and City Council:
|
| ===
|
| Subject line: IMMENSELY AGAINST multifamily development!
| I am writing this letter to communicate our IMMENSE objection to
| the creation of multifamily overlay zones in Atherton ... Please
| IMMEDIATELY REMOVE all multifamily overlay zoning projects from
| the Housing Element which will be submitted to the state in July.
| They will MASSIVELY decrease our home values, the quality of life
| of ourselves and our neighbors and IMMENSELY increase the noise
| pollution and traffic.
|
| Laura Arrillaga-Andreessen and Marc Andreessen
|
| <address>
|
| 4 Properties on <street>
|
| ===
|
| Everyone economic freedom and deregulation, until it means more
| people living near them.
|
| (From https://www.theatlantic.com/ideas/archive/2022/08/marc-
| andre...)
| AlexandrB wrote:
| What gets me is the dramatic language. I don't think home
| values would "massively" decrease with a few multi-family
| residences in the area. What's funny too is that even if they
| did, the Andreessen family is one that could easily afford to
| eat the loss.
|
| Meanwhile no one blinks twice when home prices increase 20%
| over just a few years and put housing out or reach of even more
| families.
| ben7799 wrote:
| If they have 4 properties on the street they are likely
| renting them and just trying to create barriers in the market
| for someone else to be able to rent units. Multi-family units
| in that area would probably reduce their ability to raise the
| rents on their 4 properties.
| dclusin wrote:
| My personal belief is that the housing supply scarcity is
| having the opposite effect and is actually holding property
| values down. Let's say there's two 1 acre lots that have a
| market value of $1m each. A developer can buy them and turn
| them into 8 condos and sell them each $600k yielding $4.8m.
| Is it possible the developer would pay more than $1m apiece
| for these properties? Obviously, these numbers are made up
| someone who has no real estate experience. with current
| prices the way they are largely due to zoning and external
| factors, the base economic case for these things holding down
| property values seems at the least a defensible argument.
| carom wrote:
| This is 100% true up until demand is met, then it will
| stabilize. Currently though, the more you can utilize land
| the more it is worth.
|
| Single families can compete against 2 families for the
| land, it is a lot harder when you can fit 10 units on the
| same property.
| lotsofpulp wrote:
| At the property values referenced in above post, the
| opposition to apartment buildings is not exactly about
| properties' sale prices. Presumably, the residents are
| happy where they live, so their priority is not in
| maximizing the sale price, but keeping the riff raff out
| that cannot afford $1M+ homes, and hence have to live in
| apartments.
|
| The concern about decrease in home prices is just cover
| from accusations of discrimination, although keeping home
| prices high is a necessary component. But maximizing them
| is not.
| dclusin wrote:
| Yeah that's a good point. That the value argument is
| actually just a veiled way of saying people and buildings
| that don't look like the way we want them to look.
| dgs_sgd wrote:
| Really astounding that a supposed philanthropist can write a
| letter like this and at the same time allegedly dedicate her
| life to improving people's welfare (the definition of
| philanthropy). I get that objecting to the housing development
| doesn't necessarily imply she's not an effective
| philanthropist, but the strong wording and outright dismissal
| really makes me think that her motives for doing philanthropy
| are more about power and a feeling of importance than an actual
| concern for others.
| davidf18 wrote:
| fallingfrog wrote:
| Increasing real estate values are directly related to increasing
| poverty and homelessness. The reason is pretty simple- when
| housing prices go up, rents go up. When rents go up, people have
| trouble affording them. They deplete their savings and are at
| risk of becoming homeless. That's why you get million dollar
| homes with people sleeping on the sidewalk outside.
|
| Normally, there would be a negative feedback mechanism to push
| back against this- when people can't pay rent or mortgage, then
| the prices would go back down. But if inequality increases
| enough, and there's a lot of extra cash sloshing around in the
| economy to be pushed into real estate as an investment rather
| than as a place to live, the feedback path breaks down as you
| have investors buying homes to flip them or just have a place to
| park their money, and the people who actually need homes to live
| in suffer for it.
| [deleted]
| [deleted]
| 11101010001100 wrote:
| Housing is another one of these systems (I don't have a name
| for), but once you have a house, you really don't care about many
| of the ills. The same for immigration. The same for college
| admission. The same for many jobs. Once you have what you want,
| the default is to not do anything to improve the system.
| wildrhythms wrote:
| The term you're looking for is 'class system'.
| symlinkk wrote:
| Not only do you not care, it actively benefits you to "pull up
| the ladder" and prevent others from getting on board.
| obblekk wrote:
| 1. Subsidized federal loans:
|
| It's crazy that anyone with stable income can walk into a bank
| and get a __30__ Year loan to buy a house, at below the cost of
| inflation. The only reason it's possible is because the federal
| government (Fannie Mae/Freddie Mac) extend an unconditional
| guarantee to purchase back loans at a certain interest rate as
| long as they "conform" with some requirements.
|
| You can see this is true by looking up the cost of investment
| loans that are not subsidized - interest rates for commercial
| loans like this are 8-10% today and access is limited to those
| who have demonstrated competency in the "landlord business" over
| a long time... i.e., they look more like business loans than home
| loans.
|
| The government subsidizes up to 10 loans per person. Idk why this
| was the limit (worth researching), but probably should reduce 2
| active loans (allow people to move their primary residence). This
| would eliminate most of the subsidy and would significantly
| reduce the "just hold it for 10 years and get free leverage"
| angle of investing. At that point, people would have to pour
| money into interest, operate at cash-flow negative to speculate
| on future value, and suddenly, most would not be interested.
|
| Get rid of 10 subsidized loans per person and the system will
| quickly start normalizing.
|
| 2. (Some) Tax Advantages:
|
| Effective tax rates are lower - but not much. It looks better
| than it is because while much of the cash flow can be deducted,
| whatever cannot be deducted is taxed at marginal income levels,
| rather than capital gains. That literally more than doubles the
| tax rate for most people, washing out almost all of the interest
| rate/cost deduction advantage. Doing a 1031 exchange reduce
| deductibility of depreciation on the next property meaning the
| cash flow shows up there as taxable.
|
| However, the cost-basis step up at death is crazy and should go.
| ladyattis wrote:
| In my opinion, I think the housing crisis in the US is mostly
| down to the limitations of our legal constructs of property.
| Right now, you basically own your house, including the land and
| its other rights, as a whole rather than as a condition of
| occupancy. In this way, it means that any house, especially in
| popular areas, are always a good bet and will rarely lose value.
| As the owners of housing continue to reap benefits beyond the
| scope of occupancy, everyone else is effectively paying interest
| to live. In my view, there needs to be a complete re-work of
| property norms surrounding housing but the chances of that
| happening is probably zero at this point in history.
| technocratius wrote:
| https://archive.ph/zdXH2
| heresie-dabord wrote:
| Here's the point of the article:
|
| > since the second world war, governments across the rich world
| have made three big mistakes. They have made it too difficult to
| build the accommodation that their populations require; they have
| created unwise economic incentives for households to funnel more
| money into the housing market; and they have failed to design a
| regulatory infrastructure to constrain housing bubbles.
|
| The monotonic rise in the cost of housing is because of
| speculation. But this speculation is "legitimate" capitalism. The
| corpocracy certainly discourages the leftist notion of limiting
| capitalism.
|
| > Housing is also a big reason why many people across the rich
| world feel that the economy does not work for them.
|
| Housing is one of the reasons. Food, healthcare, and the
| environment are other reasons.
| namlem wrote:
| Speculation is not the cause, rent-seeking regulations are the
| cause. And these regulations are driven by the demands of
| ordinary homeowners seeking to protect their investment by
| artificially constraining new supply.
| wikitopian wrote:
| Let's surround single family urban homes with high density
| apartment complexes and low income housing, and then act big mad
| when those people paying all the taxes and propping up the local
| public schools up and leave.
|
| All of these trendy YIMBY schemes are great. All they need is a
| proviso requiring all the targets of the schemes to stick around
| while their neighborhoods and schools go downhill.
| namlem wrote:
| Dense urban neighborhoods are the ones propping up the single
| family neighborhoods, not the other way around. The
| infrastructure costs per taxpayer are way higher in low density
| neighborhoods. All those extra roads, sewage lines, water
| lines, power lines, street lights, etc. add up. The single
| family homes are the leeches not paying their fair share.
| wikitopian wrote:
| You'll get to test your hypothesis that middle class families
| are the real problem with urban life when they quietly ghost
| on urban zones subjected to these cool ideas of yours.
|
| Let's just sit back and see how it plays out.
| namlem wrote:
| Lots of middle class families (to say nothing of the
| extremely wealthy, who also often live in dense city
| centers) live in apartments and condominiums lol. It's the
| single family homes that are the problem. They are wildly
| inefficient in terms of land use.
| namlem wrote:
| Btw here's a video with data to back up what I said:
| https://www.youtube.com/watch?v=7Nw6qyyrTeI
| nerfhammer wrote:
| the alternative is the system we're evolving to where the
| landless class will owe the landowning class most of their
| productivity, forever
| reillyse wrote:
| People in the comments here seem stuck in the weeds around
| various laws and tax incentives.
|
| The overarching issue is that housing (something everyone needs)
| is being treated as an asset class.
|
| As an asset class people who own it want it to increase in price
| which gives the government an incentive to maintain and increase
| this value.
|
| Unfortunately this makes it more and more expensive for people
| who need housing.
|
| Decoupling housing from investment is the solution but it is
| politically unpalatable now given the state we are in.
|
| That is the real problem. Everything else is just a symptom of
| it.
| cuteboy19 wrote:
| Land is finite, but housing is basically infinite. If I can get
| 2 houses to fit on the same piece of land, I would be willing
| to tolerate a 30% discount per house and still be up on my
| investment. It's a win win. Cheaper houses for the buyers and
| more profit for me
|
| So clearly, the problem cannot simply be that housing is an
| asset.
| ChrisLomont wrote:
| >is being treated as an asset class
|
| It always has been and likely always will be an assert class -
| it can be sold later so it's an asset.
|
| For well over 100 years the inflation adjusted price of new
| housing has been a quite similar rate per sq foot, despite the
| quality and safety having increased many fold over that time.
| reillyse wrote:
| I think you are misunderstanding me.
|
| I didn't say it was an asset. The majority of physical things
| you purchase are assets.
|
| I said it was an "asset class" in the financial use of the
| term.
|
| " An asset class is a grouping of investments that exhibit
| similar characteristics and are subject to the same laws and
| regulations."
|
| It is being treated as an asset class as opposed to say a
| service or a utility.
|
| We need housing and clothing, but we don't treat or normal
| clothing as an asset class. We buy it and use it, we don't
| expect it to appreciate in value.
| ChrisLomont wrote:
| >" An asset class is a grouping of investments that exhibit
| similar characteristics and are subject to the same laws
| and regulations."
|
| Yes, I got that. Housing has been such for well over 100
| years, right?
|
| It is not treated as a service or utility because, well it
| is neither of those things at all.
|
| Even if you somehow forced it into such a market, the value
| would still likely be the same cost to a homeowner, since
| there is not going to be some free lunch here. People
| willing to pay $X to live at Y will continue to be willing
| to do that. Services and utilities do not mean free or low
| cost.
|
| >treat or normal clothing as an asset class
|
| Because it is cheap, it wears out, and goes to zero value.
| You really don't want the value of your house to be zero,
| meaning it has no utility to anyone, including you.
| reillyse wrote:
| Right. But let us pretend that the we all decided to
| treat shoes as an asset class. Everyone (with shoes) is
| counting on their shoes increasing in value. So the
| government becomes focused on raising the prices of
| everyone's shoes.
|
| It institutes restrictions on the amount of shoes that
| can be made (so as not to crash the market). Supports the
| market by subsidizing mortgages so people can purchase
| shoes at high prices (note that people will always be
| able to buy shoes, they just might not have the money
| that the market is asking and so the market would need to
| adjust their price - hence why mortgages are important.
| They give everyone tax breaks on the income they make
| from renting out shoes to people without shoes and places
| restrictions on everyone so that everyone must have a
| complete set of shoes (no sandals allowed) and forces
| everyone to always wear shoes.
|
| So now, the people who own shoes are happy. They decide
| the government is a great government because they are
| protecting their shoe interest and we have a situation
| where shoes are very expensive and always must be
| increasing in value for everyone (with shoes) to be
| happy.
|
| Lots of people start investing money in shoes (driving up
| the value of shoes) because everyone knows the government
| are actively protecting the price of shoes. Which in turn
| drives up the "value" of shoes and the cost of shoes for
| people without shoes.
|
| So, are shoes and houses that much different. Houses also
| require upkeep. You can resole your shoe, you can reroof
| your house. Some would say houses require much more
| upkeep. Sure, houses are a little more permanent and hard
| to steal. But a shoe very rarely burns down.
| NotYourLawyer wrote:
| Anything capable of being owned is an asset class. How would
| housing become not an asset class? Government owns all the land
| and we just rent? Seems worse.
| reillyse wrote:
| Read my shoe example in the other thread, it's the difference
| between something being an asset and an investment.
| winReInstall wrote:
| Investment bubbles are at the root of houses.
|
| Undertaxation is at the root of investment bubbles.
|
| Accumulating economic energy devouring the containment of the
| system that created it, as at the root of the root of the
| rootproblem.
|
| We need a dependency manager for discussion topics.
| mamonster wrote:
| Undertaxation is rarely at the root of investment bubbles.
| Housing is the only one off the top of my head where I can
| envision a convincing argument for it being the chief reason.
| For like 80% of recorded asset bubbles in history undertaxation
| of operations with the underlying asset/security would never be
| mentioned by finance people.
| [deleted]
| plankers wrote:
| you didn't even hit the core dependency: a capitalist operating
| system which inherently directs capital to a small pool of
| people
| probably_wrong wrote:
| As much as I'd like to throw capitalism under the bus,
| communist Russia was well known for its housing problems too.
| plankers wrote:
| excuse me, what? they got their housing under control just
| as soon as they were able to modernize their agriculture-
| based economy into a modern industrial workforce in less
| than 50 years
|
| https://www.statista.com/statistics/1249206/us-ussr-
| comparis...
| strikelaserclaw wrote:
| The solution is always to invent new system, we as a human
| race must be continually experimenting with our systems.
| For example, look at Singapore's model for housing.
| winReInstall wrote:
| The solution showed itself in the cold war.
|
| Having the have it alls at gunpoint, forced to
| demonstrate the systems fitness & benefits to the
| citizens or perish. Which is why there needs to be a
| elphant graveyard clause in tax-law, that destroys all
| monopolies via taxation.
| DubiousPusher wrote:
| During the early years yes. Though this was likely as much
| to do with the fact that Russia was undergoing
| industrialization and urbanization in these years, which is
| a stage of development that has produced housing shortages
| in almost every country that has undergone it.
|
| Also there is the fact that much of the urban West had been
| destroyed in the incredibly brutal fighting of WWI, the
| Russian Civil War and WWII which left as many as 7 million
| unhoused orphans alone. With these considerations it's not
| as easy to ascribe the lack of housing to the Soviet
| political economy. Remember, the Soviet Union didn't get a
| Marshall plan like Europe.
|
| The housing projects under the post Stalin premiers
| eventually mitigated much of the problem but there appear
| to have been chronically homeless still that were largely
| jailed (an outcome ironically similar to what we see in the
| U.S.).
| rhacker wrote:
| You want housing prices to cave? Jump property taxes for
| landlords (short-term rentals included) and you'll see a shit ton
| of houses on the market tomorrow.
| nemo44x wrote:
| All you have to do is continue to raise interest rates. That
| will lower the value of property.
|
| However, it won't change how much you pay/month for the
| property as people will pay whatever they can afford to per
| month to live where they want to. It's just more of that
| payment will go to interest. So yes, the list price will crater
| but the actual cost to buy the place will be the same.
|
| The only person it really benefits is cash buyers which most
| people aren't. This could actually make homes less accessible
| to most people as their mortgage bid will never beat a cash
| bid.
| Invictus0 wrote:
| How would that help the rental market? Wouldn't landlords just
| pass on the price increase to renters?
| immmmmm wrote:
| and the rich (lifestyle) is at the root of everyone else problem.
| Geee wrote:
| Housing is not the root of the problem. The root of the problem
| is our current inflationary debt-based monetary system. Banks
| create currency by giving out mortgages, and mortgages are backed
| by real estate. Currency used to be backed by gold, and now it's
| backed by real estate. In other words, real estate has become
| money.
| DubiousPusher wrote:
| Do you have any idea how many people were under housed when the
| gold standard was the international order?
|
| The mid century boom in housing is almost certainly a direct
| product of the inflationary and easy credit economy that was
| created by loosening the gold standard.
| ch4s3 wrote:
| > Currency used to be backed by gold, and now it's backed by
| real estate
|
| No it isn't. Mortgages are not the only kind of fractional
| reserve banking. The currency is also fiat, its backed by the
| market's belief in the strength of the US government and
| economy. Gold back currencies also had pricing shocks,
| inflation/deflation and a myriad of other weird issues.
|
| You're parroting the least informed version of Austrian
| Economics.
| Geee wrote:
| Yes, of course. I just left other types of debt out to make
| the argument simpler. Mortgage debt is a huge part of broad
| money supply.
| ch4s3 wrote:
| But it doesn't mean fiat is in fact backed by mortgages.
| obblekk wrote:
| Have we considered just building new cities? It would be cool if
| the state could run a contest, have a rural county sign up to
| reform their zoning laws, and in exchange receive 100 year tax
| relief guarantees from the state to build a new city.
|
| America used to build new cities from scratch all the time up
| until WW2. This creates competition between cities (new entrants)
| resulting in better policies all around.
|
| And the best part is it results in more empty land becoming
| valuable, enabling either dense or suburban housing as desired
| (hopefully making it non partisan).
|
| Seems to me primary barrier today is there's no unincorporated
| land left in the US, so let's create a system for allowing new
| incorporations to emerge somehow!
| carabiner wrote:
| Of course, and they failed. See the huge empty tracts in places
| like California City and Merced.
| namlem wrote:
| Not all of them failed. Las Vegas succeeded for example.
| francisofascii wrote:
| You don't even need to build a new city, you just need to take
| an existing rust belt city and make it a cool place to live
| again. Gentrification, but instead of just a neighborhood, it
| would be with an entire metro area. Pittsburgh might be a
| recent example of this.
| namlem wrote:
| How would people get to work? If you have a new city, there are
| going to very few employers due to a lack of workers, and
| therefore few residents, due to a lack of employers. People who
| WFH can live anywhere, why would they move to an empty city?
|
| If we want new cities to be built, what is needed is high
| capacity rapid transit. For example, build a high speed rail
| line from Chicago to St. Louis, and watch as the small towns in
| between become cities.
| bobthepanda wrote:
| Most cities are where they are because all the good spots have
| been taken.
|
| Any new significant city will need billions if not tens of
| billions of dollars on transport links, water, sewer, etc, if
| there is even a way to bring a city sized amount of potable
| water.
|
| And then you have to convince people to actually move their
| residences and jobs there. Most people don't like betting
| uprooting their whole family and social lives on a total
| unknown. History is littered of examples of new failed cities
| that in the best case scenario became really far bedroom
| communities, or in the worst case didn't get off the ground.
| soared wrote:
| Cities are where good spots were x years ago, where x is
| somewhere between 300 and 100. The world is different with
| transportation/etc and the good spots don't look the same.
| See the flood of people to small mountain towns during covid.
| They weren't the best places before because they were hard to
| get to and from, but with highways, small airports, fiber
| internet, etc they are in many ways better than cities.
|
| With enough investment in new roads and infrastructure we
| could easily build a huge city in Summit County, Colorado.
| bobthepanda wrote:
| By definition, the carrying capacity of a small mountain
| town, is small.
|
| Summit County is currently in drought. Where is more
| potable water for more residents going to come from?
| (That's a pretty big problem in most of the West as drought
| conditions show no sign of improvement.)
|
| The cities are located where they are, because barring
| major changes transport costs going from cheapest to most
| expensive are navigable waterways > rail > road > air.
| Flying out of small airports is pretty expensive and not
| something that most Americans can afford to do regularly.
| colinmhayes wrote:
| I wouldn't be surprised if Musk tries this. Seems like there's
| some land in Idaho or around that part that he could move all
| his companies to and his cult of personality might follow.
| JasserInicide wrote:
| That sounds nice, but I have 0 faith in any of the big
| entrepreneurs out there to successfully run this. It will end
| up like that one Disney-run town in the 90s: corners cut
| everywhere, residents with 0 representation, just a mess all
| around. The fact remains is any company making a town/city
| will want a tangible return on it, and that fundamentally
| conflicts with how a municipal government is ran.
| colinmhayes wrote:
| I don't think the company would try to create the town,
| they'd just start building office space and hiring people
| to move there. Then the town would grow around them.
| lbrito wrote:
| Allow mixed zoning and higher density. That's it.
|
| The whole non-anglosphere world works like that, more or less.
| Why are people so afraid of it?
| namlem wrote:
| NIMBYism seems to be a disease of Anglophone countries
| especially, it's true. It exists elsewhere, but it's
| particularly bad in the Anglosphere.
| psi75 wrote:
| Housing is (along with healthcare in the US) a big part of why
| most people in the so-called "rich world" are in fact dismally
| poor, only one missed paycheck or turn of bad luck away from life
| becoming unlivable.
|
| For most of us poors, money is a tool we need to survive. For the
| people who have the bulk of it, it's a weapon. And we're the
| targets. They love blowing us up; it's what they do. They care
| more about making others suffer than the material comforts (to
| which hedonic adaptation accrues quick) money affords. Putting
| the few "good jobs", the few jobs that offer us even a sliver of
| a chance (like 1%, but we're expected to work as if it were 95%)
| of being something more than an exploited worker, in congested
| and dysfunctional expensive cities is something they do because
| it's hilarious to them.
|
| Barring a complete and final overthrow of corporate capitalism,
| you can't escape this crapsack world. The important land is
| already owned by reptilian shitasses. Billions of people are
| going without drinking water while a bunch of psychopaths fly
| around in private jets, destroying the planet because they find
| it comical.
| zhdc1 wrote:
| > Housing is (along with healthcare in the US) a big part of
| why most people in the so-called "rich world" are in fact
| dismally poor, only one missed paycheck or turn of bad luck
| away from life becoming unlivable.
|
| Not really.
|
| Let's set up a quick boundary condition. Since you mentioned
| most people, you're talking about the lower-middle and middle
| classes. Let's keep the discussion on them. The working poor
| have it bad almost everywhere, and I think we both agree that
| there's more that can be done in most countries to support
| them.
|
| For someone with a median household income, it's still very
| much possible to finding housing that is less than 25-30% of
| their household income. This is true even in high cost of
| living (HCOL) areas. Now, there are some cities or sections of
| cities that are unaffordable for someone with a median income,
| but these are very much the exceptions.
|
| To put it simply, if you have a median household income for
| your country, in almost all locations in almost all OECD
| countries, you earn enough to follow a household budget that
| allows you to save 15-20% of your take home pay. If you can't
| save a portion of your income and you're not living off of a
| below-average wage, it's very likely that you either made
| decisions that aren't conducive to saving (e.g., you're house
| poor, car poor, or your discretionary spending is too high).
|
| > along with healthcare in the US
|
| Quality health care is expensive in most countries. The US has
| its own set of issues that make health care more expensive than
| in most other countries (e.g., population density), but it's
| not orders of magnitude higher. It's also offset by the higher
| salaries that people in the US earn over, say, the average EU
| state.
| bombcar wrote:
| People will naturally spend _beyond_ their capabilities, and
| the entire market is built around this (loans for
| _everything_ is standard now).
|
| The ONLY way to prevent this is to either stop offering loans
| or force savings in some way (taxes, etc). But apparently
| both those options are off the books.
| AlexandrB wrote:
| Anti-usury laws of some kind might help too. Anything over
| an effective 25% APR (including one-time fees) seems like a
| trap.
|
| But you're right, there's no political will to do anything
| like this since consumer debt helps to fuel the economy.
| defterGoose wrote:
| | but it's not orders of magnitude higher.
|
| It _is_ about 2-3x higher, which is not an order of
| magnitude, but is less than an order of magnitude away from
| being an order of magnitude.
|
| Not, in any way, comforting unless our outcomes are 2-3x
| better, which they are not.
| datacruncher01 wrote:
| It's a simple problem, we turned housing into an investment. Now
| everyone who owns a home is incentivized to ensure their
| investment is maximized and that results in a lot of NIMBYism.
| The simple solution is we need more housing in cities and
| suburbs. How we get there is an exercise that's taken on by local
| housing authorities and they are not incentivized to solve the
| problem. That's because they work for voters who are currently
| living in the area opposed to future people who aren't
| contributing to the vote.
|
| States are going to have to step in and override cities that
| aren't being effective, this cannot be solved from the federal
| level. They are going to have to say, these permitting processes
| are too restrictive, homeowners can add backyard units or convert
| their homes to duplexes/etc, and make it easy for apartment
| builders to buy a few homes to make small apartment complexes
| even if the neighborhood hates it or the city has been stalling
| on that kind of development.
| ROTMetro wrote:
| The government made me an explicate promise with zoning laws
| that my neighborhood was a safe investment, just as they make
| people comfortable that bank accounts are safe via banking
| laws, or that stocks are somewhat safe. Taking that away is
| breaking a MAJOR social contract made to the 65% of American's
| that own their home.
| namlem wrote:
| Yes, it's a social contract that must be destroyed. Otherwise
| we will experience economic ruin. Look at what happened in
| Japan in the 1980s, or is happening in New Zealand in Canada.
| The fact of the matter is that this social contract is pure
| rent-seeking, and never should have been allowed in the first
| place. It is theft from future generations by present day
| homeowners.
|
| Also it certainly is not true for all homeowners btw, lots of
| municipalities have fairly minimal zoning laws.
| sudosysgen wrote:
| This can probably be solved at the federal level using smart
| taxation and incentives for mixed zoning.
| throwaway0a5e wrote:
| The hubris is astounding.
|
| You know how we got into this problem? Decades ago we used
| taxation and law to try and incentivize the development we
| wanted and disincentivize or prohibit what we didn't. And
| today the efficacy of that endeavor is obvious to even the
| most casual observer.
|
| There is no compelling reason doing the exact same thing will
| work better for different values of "development we want" and
| "development we don't". Have you seen what gets developed
| when you incentivize mixed development? It's lifeless crap
| compared to the places that were built up prior to the advent
| of widespread usage restrictions on land where development
| happened organically without the input or prior approval of
| local government (i.e. people were basically free to do
| whatever within the permissive limits of the time).
|
| How about we just get the government out of the business of
| telling people what and where they can and can't build. Let
| people develop what they think there is demand for. A few
| inappropriate industrial sites is a small price to pay for
| allowing pent up demand for residential and commercial
| construction to be satiated.
| sudosysgen wrote:
| I think I wasn't clear. When I say incentivize mixed
| zoning, I meant that the federal government would
| incentivize local governments choosing to zone land as
| mixed use. Then people can build whatever they want.
|
| It's not possible to remove zoning completely. That's
| severe hubris, thinking that we introduced zoning to begin
| with for no legitimate reason. That's not true - it's
| necessary to plan city infrastructure and that requires
| zoning. Removing zoning altogether would be an unmitigated
| disaster.
|
| There is no easy clean solution like "remove all the
| rules". You can't get government out of the business of
| city planning and basic infrastructure, and that's in more
| words what you mean.
|
| There is a difference between good policy and bad policy.
| We need good policy. The only solution is that local
| governments somehow make better choices.
| axg11 wrote:
| When was housing not an investment? Throughout history, people
| have always wanted to drive up the value of their land and
| properties. There are still plenty of places in the
| US/Canada/UK where housing is cheap. The problem is that nobody
| wants to live in those areas.
| pessimizer wrote:
| > When was housing not an investment?
|
| Housing was never an investment before recent decades, with
| an emphasis on the housing bubble. Housing tracked inflation
| for _400 years_.
|
| https://thegoldobserver.substack.com/p/amsterdam-real-
| housin...
|
| edit: the history of US house prices is that they strictly
| tracked inflation, then with government subsidy right after
| WWII, housing prices jumped up, then stayed flat at that new
| level for the next 50 years, then the turn of the millennium
| happens and housing becomes an investment (after a stock
| market crash.)
| kgwgk wrote:
| "In terms of total returns, residential real estate and
| equities have shown very similar and high real total gains,
| on average about 7% per year. Housing outperformed equity
| before WW2. Since WW2, equities have outperformed housing
| on average, but only at the cost of much higher volatility
| and higher synchronicity with the business cycle. The
| observation that housing returns are similar to equity
| returns, yet considerably less volatile, is puzzling."
|
| https://www.frbsf.org/wp-
| content/uploads/sites/4/wp2017-25.p...
| carom wrote:
| The US was a brand new country that was mostly empty. Look
| at England for some historical data.
| smcl wrote:
| Ok but they also provided a link showing how this also
| applied in Amsterdam, in The Netherlands - a much older
| and less-empty country.
| kgwgk wrote:
| That link doesn't show that housing was not an investment
| for centuries, does it?
|
| Why wouldn't you consider an investment something that
| has a relatively stable value in real terms - at least
| over a long enough period - and also provides a yield?
| horsawlarway wrote:
| I genuinely don't understand why you're getting down-voted.
|
| Not only has it been true historically - there's a real
| reason to allow it: it incentivizes owners to maintain and
| improve their properties. Further... maintenance of that
| property requires _investment_ , both in time and labor. If
| you make it so that owners have no reward or incentive for
| improving their properties, they WON'T DO IT.
|
| Why invest money into fixing your place if the price of the
| house is capped anyways? Trying to prevent this style of
| investment has almost _always_ failed, and generally makes
| neighborhoods that are nice /attractive places to live much
| less nice and attractive - because people stop maintaining
| and improving them.
|
| I think the real question right now that needs to be answered
| is: Why are we not able to create new urban areas in low cost
| areas? What has changed so that we no longer create towns?
|
| Because frankly - right now the issue isn't housing, it's
| housing in areas where economic opportunities exist. Why are
| economic opportunities so exclusive to high population
| centers? What can we do to change that?
| [deleted]
| Cederfjard wrote:
| So do you have a solution in mind?
| davidf18 wrote:
| [deleted]
| Tiktaalik wrote:
| It's always been an investment, but the difference is the
| shift from being a stable asset that appreciated at or above
| inflation, to the sort of incredible hyper inflation that we
| now see.
| datacruncher01 wrote:
| It's true but the reason people are moving to cities are
| jobs. Rural locations do not have the job market to support
| the costs to live there. It's a lower cost, but a much, much
| lower income outlook as well.
|
| If you have the money to outright buy a rural property and
| build a house there, it's not a bad place to live. But you
| don't want to have to depend on the limited job market with
| an expensive mortgage and limited buyer pool.
| axg11 wrote:
| Remote work is commonplace now. Perhaps in the next few
| years we'll test the theory that jobs and house prices are
| linked. It's now possible (for tech workers at least) to
| work from almost anywhere for decent wages.
|
| My hunch is that the housing crisis is simple supply and
| demand. People want to live in cities because of the better
| access to entertainment, amenities, and services. There
| aren't enough houses to fill that demand. There's no great
| city on earth that has a glut of housing. If there were,
| people would flock to that city to fill the housing. I
| think that's the very nature of a city. In some sense, the
| more people that want to live in a city, the higher the
| quality of the city. That's also directly correlated with
| housing cost, sadly.
| ralston3 wrote:
| Remote work is commonplace to a very few privileged
| folks. HN seems to forget that.
| ch4s3 wrote:
| > If you have the money to outright buy a rural property
| and build a house there
|
| That's if there are available builders. It took my mother
| the better part of a year to get her roof replaced, because
| there was no one available to do the job. I'd also argue
| that the place she lives in rural VA is pretty awful in
| most respects other than having space and she's not all
| that far from a town.
| goodpoint wrote:
| Almost never. Housing has always been a basic necessity for
| survival.
|
| Only when feudal societies developed you had landlords and
| serfs and that's hardly something to be proud about.
| horsawlarway wrote:
| > feudal societies developed
|
| Sooo... the last thousand some years, given that feudalism
| was widespread by the 11th century (and housing was
| absolutely an investment before that). Basically - half of
| recorded history (~400bc for Europe), and longer than the
| United States has existed.
|
| I don't understand what you think this comment means...
| finiteseries wrote:
| - The last thousand some years (in Europe)
|
| - Widespread (in Europe)
|
| - Half of recorded (European) history
|
| An exclusively European phenomenon, the bulk of which
| came and went while it was a backwater region with
| limited effect on the rest of the world.
| tristor wrote:
| > An exclusively European phenomenon, the bulk of which
| came and went while it was a backwater region with
| limited effect on the rest of the world.
|
| Weird that it had limited effect on the rest of the
| world, since basically history from now back to about the
| 15th century represents a European hegemony, now a US
| hegemony that extends European Western philosophy to the
| world.
|
| Seems that "limited effect" is pretty big. So much so
| that we're /literally discussing it now in 2022/.
| finiteseries wrote:
| The bulk of feudalism took place between the 5th and 12th
| centuries, ~400 years before 1491.
| tristor wrote:
| Sure, and the legacy of feudalism is a core part of what
| informs Western philosophy and political structure since
| then.
| finiteseries wrote:
| Yes. Its post 1492* relevance through its legacy now
| established, we revolve back to the point:
|
| - The last thousand some years (in Europe)
|
| - Widespread (in Europe)
|
| - Half of recorded (European) history
|
| You may have misread my original comment, the "limited
| effect" was to describe Europe's influence at that
| particular point in time, not feudalism/Europe's
| influence since then.
| goodpoint wrote:
| Please refresh your memory around the topic
| https://en.wikipedia.org/wiki/Human#History
|
| > and housing was absolutely an investment before that
|
| ..and don't make absurd generalizations. Humanity is way
| older that the middle ages, and hundreds of different
| cultures existed around the world even during the middle
| ages.
|
| Very few had the concept of investment and the idea a
| house has a monetary value that grows significantly over
| time was simply unheard.
|
| > longer than the United States has existed.
|
| Imperial units are bad but measuring history in united-
| states is even worse. The US is not even 250 years old.
|
| > I don't understand what you think this comment means...
|
| I can see that.
| horsawlarway wrote:
| Ok - well have a good one. You aren't helping yourself
| here, and I don't think we'll have a productive
| conversation.
| goodpoint wrote:
| Same here.
| mistrial9 wrote:
| > States are going to have to step in and override cities that
| aren't being effective
|
| surprise - this has already been signed in California; and
| amended, and further amended..
|
| https://www.capradio.org/articles/2017/09/29/brown-brings-ho...
| colinmhayes wrote:
| And SF has already tried bending over backwards to defang it.
| Luckily mayor Breed rejected the attempt, but it's far from
| over.
| dionidium wrote:
| > _It 's a simple problem, we turned housing into an
| investment._
|
| People are not natural economists and will basically dig in to
| support the status quo until that status quo changes, at which
| point they'll support the new one. Americans, for example, buy
| new cars at an average new price of $40k and for most of my
| life _accepted uncritically_ that the value of those cars would
| plummet the second they were driven off the lot. They did not
| lobby for supply restrictions that would prevent it. They didn
| 't ask their politicians to prop up "car values." They didn't
| try to avoid it, at all. They just _accepted it_.
|
| They would do the same with housing, if they weren't already
| conditioned not to.
| Jiro wrote:
| https://en.wikipedia.org/wiki/The_Market_for_Lemons
|
| There's a legitimate reason why a car immediately loses its
| value. People are more likely to sell cars that have
| something wrong with them. The market price for a car that
| you just drove off the lot is not the market price for an
| average car of that age, it's the market price for the subset
| of cars of that age that people want to sell. Because a car
| in that subset is more likely to have something wrong with
| it, its value is lower. Even if you personally are not
| selling the car because there's something wrong with it, it's
| hard for the buyer to know this.
|
| If people had magic X-ray eyes that could tell that the car
| you just drove off the lot doesn't have more problems than an
| average new car, then its sale price would be similar to a
| new car. But they don't.
| dionidium wrote:
| That sounds reasonable to me, but it didn't stop the cost
| of used cars from skyrocketing during the pandemic, due to
| the supply-chain-induced shortage of new cars. When the car
| market started looking a lot more like the housing market,
| so did its prices.
| Jiro wrote:
| In that situation, the value of all cars went up, both
| new and used. The value of a used car was still much less
| than the value of a new car, you just didn't notice this
| because new cars didn't have their prices raised to
| correspond to the increased value.
| SoftTalker wrote:
| New cars did sort of have prices raised, because most of
| the incentive programs stopped. The 5-year zero interest
| financing, the thousands of dollars of rebates, the
| negotiating the dealer was willing to do, all ended. New
| cars sold at sticker price and there was no shortage of
| buyers.
| notch656a wrote:
| That's not true, I could show you offers of my used truck
| being worth more than a brand new truck of the exact same
| generation of model in the exact same configuration. Used
| vehicle prices went insane during covid as the irrational
| market and places like Carvana paid more for your used
| car once it's off the lot.
|
| I almost wonder if people overbought into the "new car
| must be more expensive" paradigm so they forgot new cars
| were competing against used cars, and the prices of used
| cars became irrationally high.
| jbay808 wrote:
| I thought it was that new cars had long lead times
| attached to them. Was that not the case?
| notch656a wrote:
| I'm sure that's a big factor.
| llbeansandrice wrote:
| Yes they did? There were upwards of $10k dealer mark-ups
| on new cars.
| dntrkv wrote:
| That is one reason, but there are many.
|
| * You get to option the car with exactly the
| features/colors you want.
|
| * People will pay a premium for something brand new.
|
| * Financing for used cars usually carries a slightly higher
| interest rate.
|
| * The actual cost at the dealership can vary significantly
| depending on the make/model/dealership
| notch656a wrote:
| During beginning of COVID I drove a Tacoma off the lot
| for ~29k out the door and at the end of COVID I had
| several offers to buy it from me used with over 10k miles
| on it for anywhere from $30-31.5k. At that time you could
| still buy it new for ~29-30k.
|
| In fact the only reason why I bought new in the first
| place was because even a 10 year old tacoma is worth the
| better part of a new one. Guess it depends on your market
| but the premium for new looks pretty tiny or negative to
| me.
| dizzant wrote:
| I don't understand the downvotes. Your conclusion is
| wrong but you make a good contribution. Thanks for the
| anecdata.
|
| I too have seen this phenomenon, and I think it's pretty
| common recently because the used car market is really out
| of whack. In my case, last year I bought a lightly used
| Sonata for about $30k with 12k miles, and today I could
| still trade it for about the same price with 31k miles on
| it.
|
| Where you're wrong is that this phenomenon doesn't apply
| in general to the used car market but only in the last
| few years because of the chip shortage shrinking the
| supply of new cars. Short supply in turn increased demand
| for used cars, raising the prices.
| Tiktaalik wrote:
| > home is incentivized to ensure their investment is maximized
| and that results in a lot of NIMBYism
|
| I'm not sure a lot of NIMBYism comes from the notion of
| protecting home values.
|
| If a home were to be upzoned for apartments the underlying land
| value would rise significantly, and this would be a significant
| financial windfall for the home owner. They _should_ want to
| see their land be upzoned for apts but that 's not what we see.
|
| I think NIMBYism derives from the desire for exclusivity. When
| ones home and surrounding homes are ultra low density you are
| guaranteed to have few neighbours. This is what is eliminated
| when homes are rezoned for apartments.
| andrewmutz wrote:
| Everyone benefits from their own property being upzoned, but
| loses when their neighbors build upzoned properties. Hence
| the NIMBYs block other people's development
| Tiktaalik wrote:
| This would only be in the case where their neighbour
| receives beneficial upzoning and they don't. This would be
| an unlikely edge case.
|
| Generally when we see upzoning advocacy it's neighbourhood
| wide if not city wide.
| aluminussoma wrote:
| I wonder if persistently low interest rates is the real culprit
| that led to housing as investment. I have been recently
| intrigued by FinTwit arguments that an excess of demand spurred
| by too low interest rates is the real reason for many
| shortages. As a saver, that argument naturally appeals to me.
| DubiousPusher wrote:
| > I have been recently intrigued by FinTwit arguments that an
| excess of demand spurred by too low interest rates is the
| real reason for many shortages
|
| I don't believe this is the case as since 2008 the U.S.
| construction industry has not even built enough units to keep
| up with population growth. I believe this is a supply problem
| which is two-fold.
|
| 1) Restrictive zoning and permitting which really took off
| around the 70s
|
| 2) A boom and bust construction cycle which has convinced
| many to not risk it any longer and find other work (this
| which has been going on for decades but truly inflected after
| 2008).
| aluminussoma wrote:
| > I don't believe this is the case as since 2008 the U.S.
| construction industry has not even built enough units to
| keep up with population growth. I believe this is a supply
| problem which is two-fold.
|
| A counterargument to this is that population growth has not
| been very high in the past few decades:
| https://fred.stlouisfed.org/graph/?g=SUL3
|
| You certainly have valid points, especially in San
| Francisco. Nevertheless, looking at the broader market,
| outside of California, the market appears to be working:
| builders find a way to build what will sell and maximize
| their profits. Last week, I drove around a planned
| community in a middle-America state. Developers started
| building houses around ~2010 and are still building out the
| area. These developers had no problem building thousands of
| homes that were selling well until very recently.
| DubiousPusher wrote:
| Population growth has been lower but construction levels
| have been lower still. This is not speculation. It is
| fact.
|
| https://www.cnbc.com/2021/09/14/america-is-short-more-
| than-5...
|
| The only parts which are speculative are why. There is
| consistently lower workforce participation in
| construction though, that is also a fact.
|
| https://finance.yahoo.com/news/construction-industry-
| after-r...
|
| I'm glad the builders in your area have been able to work
| consistently. I would guess that they are likely riding a
| trend of a decreasing number of builders who are
| increasingly professionalized and technologized their
| operations. Regardless, that is an anecdote and the
| statistics paint a pretty clear picture.
| not_real_acct wrote:
| > I wonder if persistently low interest rates is the real
| culprit that led to housing as investment.
|
| Of course.
|
| The profit from selling a leveraged investment is based on
| the delta between what you pay to borrow the money and how
| quickly the asset goes up. Doesn't matter it that's a house,
| a stock, bonds, whatever.
|
| Housing is particularly attractive for these bets, because
| it's so easy to qualify for a big loan and because the rates
| have been so low.
|
| Once mortgage rates exceed about six percent, the incentive
| to invest in real estate will be much lower.
| dcolkitt wrote:
| > this cannot be solved from the federal level.
|
| I disagree. The federal government invests enormous resources
| into subsidizing home ownership. Everything from Fannie Mae
| guaranteeing mortgages to not taxing home owners on the imputed
| value of rent.
|
| And I think that's all well and good, home ownership has many
| positive externalities. But there's zero point subsidizing
| demand for something when supply in inelastic. In those cases
| subsidies don't result in expanded supply, only increased
| prices. For example even if diamonds are good, it wouldn't make
| sense for the government to match first time diamond buyers
| payment, because the supply of diamonds is inherently limited.
| All it would do is drive up prices.
|
| Modest proposal: the federal government should revoke all of
| its housing subsidies in any municipality that restricts the
| supply of housing. San Francisco would be more than free to
| continue to block development. _But_ if it chooses to do so,
| then San Francisco home owners should no longer be eligible for
| Fannie /Freddie mortgages, no longer be able to tax deduct
| mortgage interest, and should have to pay income tax on the
| imputed rental value of their home.
| ChrisLomont wrote:
| >Fannie Mae guaranteeing mortgages
|
| FM does not guarantee most mortgages, only certain govt types
| like FHA and VA loans, which the govt decided to back in
| order to help low income people get loans (otherwise the
| rates would be even higher for them).
|
| FM buys up a lot of mortgages and sells them to investors,
| then turns around and puts the money back into productive
| use.
|
| >taxing home owners on the imputed value of rent
|
| What does this mean? You want to tax homeowners as if they
| paid themselves rent? (Which even then is net zero, so no
| tax...)
|
| If you want people to pay income tax on the imputed rental
| value (which is likely not even legal - they are not getting
| an income from ownership - and courts have held income tax
| must be on sources of income), then you will increase the
| cost of home ownership, putting even further out of reach for
| most people.
|
| >In those cases subsidies don't result in expanded supply,
| only increased prices.
|
| Yet many places subsidies do result in new housing.....
| ambernightcrush wrote:
| Both Fannie and Freddie buy mortgages, but your description
| is much more stringent than in truth. Fannie buys from big
| banks, Freddie buys from thrift banks; both buy conforming
| loans(conforming to their standards) which is a large part
| of the home buying audience. In addition to that, the non-
| conforming loans that you listed e.g. FHA and VA. Those
| government-backed loans are for special populations. These
| mortgages are assembled into MBS and then sold to
| investors; the banks that originated the loans get their
| liquidity back.
| ChrisLomont wrote:
| >Both Fannie and Freddie buy mortgages
|
| Yes, I said as much. The OP claimed they guaranteed
| mortgages, which they do not.
|
| I'm decently aware of the MBS market - I developed MBS
| pricing algorithms in the late 90s/early 00s for putting
| houses in tranches after a friend at a mortgage company
| asked for help with algorithms. Turns out the problem was
| NP-hard (a lattice based linear programming problem if I
| recall), but good heuristics from the literature and some
| special sauce outperformed their current (at that time)
| pricing.
|
| Around the time the whole market blew up I was
| considering going to hedge funds, and was working out
| details of how all the math, science, and computer algos
| work to prepare for interviewing. After the market crash,
| I moved on more into scientific and R&D computing. But I
| still read papers in the area out of curiosity.
|
| But the fact is the market is not "guaranteed" in any
| sense - which is likely good as 2008 showed.
| kareemsabri wrote:
| I don't think this is true.
|
| > At Fannie Mae, we provide liquidity to the single-
| family market by purchasing and guaranteeing mortgage
| loans made by lenders and issuing debt securities and
| mortgage-backed securities that attract global investors
| to finance U.S. housing.
|
| https://www.fanniemae.com/about-us/what-we-
| do#:~:text=At%20F....
| dcolkitt wrote:
| > FM does not guarantee most mortgages,
|
| What? Of course Fannie and Freddie guarantee the MBS they
| issue. Which is an implicitly a guarantee from the US
| government. Otherwise they'd trade at much wider credit
| spreads, which would in turn lead to higher rates for home
| buyers. You don't have to take my word for it, here's the
| New York Fed's own words:
|
| _For agency MBS, the GSEs and Ginnie Mae promise full and
| timely payment of principal and interest, a guarantee that
| is either explicitly or implicitly backed by the federal
| government_ [1]
|
| > You want to tax homeowners as if they paid themselves
| rent?
|
| Alice, who has a 20% income tax rate, owns a house and
| rents it to Bob for $25k/year. Bob also has a 20% income
| tax rate, owns an identical house and rents it to Alice for
| $25k/year.
|
| In total the government collects $10k/year in tax revenue
| from Alice and Bob from their rental income. Now let's say
| Alice and Bob swap houses and move back into their owner-
| occupied properties. This is an economically identical
| situation (remember the houses are identical). Both still
| own one home. Both are still consuming housing that's worth
| $25k/yr to them. Yet the government collects no tax
| revenue. Exempting the implicit value of rent is a subsidy
| favoring owner occupied housing.
|
| > imputed rental value (which is likely not even legal)
|
| The IRS already taxes tons of benefits based on the imputed
| income, even if no cash changes hand. For example, if your
| employer provides you life insurance, you have to pay
| income tax on the actuarial value of the policy even if you
| don't die during the coverage period.[2]
|
| > then you will increase the cost of home ownership,
|
| Not if the supply of housing is completely inelastic. Any
| increase in housing taxes will result in a commensurate
| fall in the sticker price that matches the tax increase.
| Economists have known this since Henry George.
|
| [1]https://www.newyorkfed.org/medialibrary/media/research/s
| taff...
|
| [2]https://www.duq.edu/assets/Documents/benefits/_pdf/Imput
| ed%2...
| snarf21 wrote:
| This is interesting. I wonder if it would work to make all
| FHA loans be required to be _NEW_ properties /units. So the
| only way to get access to the money is to expand the housing.
| I'm sure there are consequences but I need to think them
| through a bit more.
| flakeoil wrote:
| OP doesn't talk about subcidies, but instead about the fact
| that the federal level needs to force the city level to build
| for example smaller apartments/houses, or build denser or
| whatever. However, cities and the ones already living there
| don't like it because it will bring in poorer people, which
| drives down the tax income and increases the costs, makes the
| neighborhood less attractive etc.
| cheriot wrote:
| > there's zero point subsidizing demand for something when
| supply in inelastic.
|
| Agree, but that also means cutting those subsidies will not
| affect supply either. Minimal impact and politically
| difficult...
| fezfight wrote:
| So I think folks overlook just how wealthy certain investors
| are when they propose the fix is to just build new properties.
| Those will also get snapped up by investors. To fix the
| problem, investing in housing needs to be either banned or made
| very unattractive. You only need one house to live in.
| ChrisLomont wrote:
| >Those will also get snapped up by investors.
|
| Investors buy around 10-20% (depending on quarter) of all new
| properties (and likely because they paid to build most of
| that share).
|
| That's a far cry from 100%.
| colinmhayes wrote:
| If there's enough housing it doesn't matter who owns it.
| Unless units are being held vacant by landlords (they're not
| atm) housing prices will reach an equilibrium that represents
| the value they provide. Landlords can't just unilaterally
| raise prices without lowering supply levels.
| pdonis wrote:
| _> You only need one house to live in._
|
| Many people do not want to own a home, they would rather
| rent. Someone has to be the landlord for all those people,
| and to all those someones, the home is an investment. You can
| only get rid of homes as investments if you get rid of
| renting.
| TaylorAlexander wrote:
| This line of reasoning is flawed. The government can build
| housing so that people have places to rent, in a way that
| isn't "an investment" in the profit-seeking sense. That's
| what they do in Vienna and it seems to work great.
|
| https://www.huduser.gov/portal/pdredge/pdr_edge_featd_artic
| l...
|
| And then in Singapore they have very high home ownership
| rates, so we could also be dramatically reducing the number
| of people who actually need to rent, reducing the need for
| private investment:
|
| https://charterforcompassion.org/shareable-community-
| ideas/p...
| carom wrote:
| Private parties can build housing too, if you let them.
| dionidium wrote:
| I rented (by choice) for many years. I never once
| thought, "I wish the government were my landlord." The
| arrangement actually works pretty great just how it is. I
| was very happy to write that rent check every month and
| always felt like I got a good deal for my money, even
| when I lived in a very expensive market (NYC). In every
| case, I desired something that was very important to me
| and for which there's a lot of demand. I was happy,
| therefore, to pay for it.
| TaylorAlexander wrote:
| That the fact has not occurred to you personally does not
| mean such an arrangement in aggregate would not help
| solve the problem of housing as a profitable investment.
| Maybe you didn't think of this on your own accord, but I
| bet you WOULD have appreciated if the same unit was
| cheaper, and this would be the case if 50% of the housing
| in your market was public housing as is the case in
| Vienna, even if your unit was privately owned.
|
| Plus your single example of being satisfied with your
| landlord is not evidence that we should accept landlords
| across the board. My own landlord sucks at repairing
| things that need repair, and I find it very frustrating.
| cgdub wrote:
| There is public housing in NYC, and I can assure you that
| your landlord is better than NYCHA.
| TaylorAlexander wrote:
| The article I shared in my first comment in this chain
| addresses problems in NYC and compares that to Vienna and
| Singapore, which are much better. So please take a look
| if you would like to learn about alternatives.
|
| https://charterforcompassion.org/shareable-community-
| ideas/p...
| dont__panic wrote:
| > Many people do not want to own a home
|
| I hate to go all "citation needed" on you, but I'm not sure
| this is true.
|
| Do I want to pay for upkeep of a property? Probably not.
| But since renting is basically equivalent to _burning
| money_ in our economy, any responsible renter will
| eventually feel a pull towards ownership if only to stop
| the bleeding.
|
| I think we need a society where renting isn't so expensive
| AND owning a property isn't so heavily subsidized by tax
| breaks. The entire housing market is a massive bubble
| because of investors and speculation. At some point, that
| bubble prices people out, leading to homelessness and
| missed opportunities because people aren't willing or able
| to move.
|
| Much like freedom of car-free movement, housing ought to be
| a fundamental human right. Not a business or a place to
| hide your money.
| llbeansandrice wrote:
| How many college students want to bother with owning a
| home for <4 years before potentially moving somewhere
| else entirely once done with their studies?
|
| The number of people that end up never owning or wanting
| to own a home is likely small. But there is a very real
| case for non-ownership depending on what stage of life
| people are in and how they want to live their lives.
| carom wrote:
| The even easier argument is how many college students and
| new grads can afford to buy a house? Subdividing property
| that people can't afford is a valuable service.
| SoftTalker wrote:
| Not uncommon for parents to buy a house for their kid to
| live in, rent it to a few roommates to cover the
| mortgage, then keep it as an investment or sell for a
| profit when the kid graduates.
| pharmakom wrote:
| But notice how that only works for a fraction (the larger
| part "paying" the mortgage)
| pdonis wrote:
| _> I hate to go all "citation needed" on you, but I'm
| not sure this is true._
|
| Given the number of people that rent in large cities all
| over the world for their entire lives, I don't know why
| you would find my claim doubtful. Many people seem to
| want to live in large, densely populated areas, and for
| most people that is always going to mean renting.
|
| _> Much like freedom of car-free movement, housing ought
| to be a fundamental human right_
|
| I disagree with this as a blanket statement; neither car-
| free movement nor housing as a basic right will ever work
| in areas that are _not_ densely populated. And many
| people (including me) want to live in areas that are not
| densely populated. We are quite willing to pay the costs
| of doing that and don 't need handouts.
|
| However, in densely populated areas, I think many people
| would agree with your statement--but I think they would
| also say that "housing as a human right", for them, means
| availability of affordable rentals, not home ownership.
| TaylorAlexander wrote:
| > Many people seem to want to live in large, densely
| populated areas, and for most people that is always going
| to mean renting.
|
| The "for most people that is always going to mean
| renting" is that part that we could change through large
| scale collective policy. That's what Singapore has done
| for example. No one doubts whether people want to live in
| cities. We are asking whether the model of private
| landlords is the best way to manage large quantities of
| housing in cites. Look at Singapore:
|
| "Eighty-two percent of Singapore's residents live in HDB-
| built (Housing Development Board) apartments, of which
| there are more than 900,000. In contrast to both New York
| and Vienna, HDB encourages public housing residents to
| purchase their apartments. Nine out of ten HDB residents
| own their homes. The 50,000 rental units are, according
| to the HDB website, 'for the truly needy who have no
| other viable housing options.'" [1]
|
| So yes, people want to live in dense cities. It does NOT
| automatically follow that they will have to rent. This is
| a policy choice.
|
| [1] https://charterforcompassion.org/shareable-community-
| ideas/p...
| carom wrote:
| We do not need to hand over ownership to the government
| to build more houses. Just simplify zoning laws. Private
| landlords want to build. People want to maximize the
| value of their properties. They can't because of zoning
| laws that favor single family home hellscapes.
| naasking wrote:
| > They can't because of zoning laws that favor single
| family home hellscapes.
|
| This can easily go too far in the other direction though,
| carving up a single family sized living space into 5 tiny
| 400 sqft apartments. There have to be incentives for
| mixed sized living spaces.
| SoftTalker wrote:
| Condo model ownership is very common in dense urban
| areas. You "own" your apartment, and pay an association
| to manage the repairs and upkeep of the common building
| and amenities.
|
| That said, renting in the short term is still something
| people will want to do. Some people will even want to do
| it longer term, if they want no responsibilities at all
| for repair and upkeep or freedom to leave with no strings
| attached at the end of the lease.
| bern4444 wrote:
| Most of the people renting in a large city are doing so
| because buying is so expensive and unattainable. Not
| because they prefer renting.
| distances wrote:
| And if it's attainable, does it make financial sense? I
| rent an apartment now, and to buy a similar would be
| roughly 1000 times the monthly rent. I would have to bet
| very heavily on appreciation before that made financial
| sense, even with the leverage of a mortgage.
| epicureanideal wrote:
| > Given the number of people that rent in large cities
| all over the world for their entire lives, I don't know
| why you would find my claim doubtful.
|
| How many could afford to buy though?
| muffinman26 wrote:
| If by "many" GP meant "a small but noticeable percentage
| of the population", I think the claim is reasonable.
| Buying a home is a _process_. In additional to the
| standard search and short personal inspection you 'd do
| for a rental, there's an official inspection, securing a
| loan, etc. It consumes a significant amount of time for a
| month.
|
| For someone moving every 6-12 months, spending a month or
| even two per year on buying properties and ensuring the
| previous owners aren't hiding issues isn't worth it. If a
| landlord hides something this type of tenant will only
| have to deal with it for a year at most, but if a seller
| hid something they would lose a lot of money on the move.
|
| Moving every 6-12 months isn't the default, but it's
| relatively common for college students and recent
| graduates who haven't established roots yet. Next year
| it's a new city for a different job or a different
| school. For example, for many fields in the US going to
| the same university for grad and undergrad is highly
| discouraged.
|
| (Not disagreeing with any of your other points.)
| datacruncher01 wrote:
| I agree with you, that's a whole other problem. But housing
| like many goods is still subject to supply and demand. The
| investors buy the properties because they are actually good
| investments in situations where housing is in demand, and
| that's true in all the major cities where we're not building
| enough housing and appropriately sized housing. If we
| increase the supply, if we make smaller housing units so
| there are also affordable units for poorer renters. The
| investors will move on to more lucrative investments. They
| can only extract so much wealth from housing before people
| move for alternatives.
| pessimizer wrote:
| Everybody has a place to live. Housing isn't scarce. When
| housing is scarce, people are homeless or living in
| extremely tiny spaces. They are not. The problem is that
| people wouldn't be able to afford to own the places where
| they live.
|
| Housing is only "scarce" in desirable places, and that's
| simply tautological. The sum of unfulfilled desires is the
| contrapositive of scarcity.
|
| Housing is a market in which a very tiny percentage of
| goods are up for sale at any particular time, and the
| projected prices of those goods are heavily shared among a
| huge network of people who profit when the prices are high.
| The owners of those goods are often heavily leveraged, and
| can't afford to lower the price significantly, and the
| transaction and mortgage costs push them to raise the price
| to cover those costs at the next place they buy.
|
| > They can only extract so much wealth from housing before
| people move for alternatives.
|
| No such alternative, which is why the market is as
| lucrative to exploit as health care. Finding an
| "alternative" to health care is just to find another type
| of health care, and if you find an alternative to being
| housed, you've just found a new kind of house.
| supertrope wrote:
| By this logic oil & gas will never run out because rising
| prices will incentivize new extraction technology and
| formerly too expensive reserves will come online. Or
| supply will dwindle and the price rationing system will
| ensure it goes to the most productive use and energy
| consumers will switch to cheaper substitutes.
| pharmakom wrote:
| I actually think this is what will happen to oil and gas.
| It will become less and less of a feature of our lives
| over the long run. We will have to find alternatives
| (hopeful!) or cut back (painful!)
| bobkazamakis wrote:
| Ah yes, everyone without a home is simply a lazy poor who
| should just move to Mississipi where the land is cheap
| and the jobs are abundant.
| ROTMetro wrote:
| I left California because I couldn't afford to own a home
| there.
| namlem wrote:
| Which is why California needs to fix the policies that
| led to its housing shortage. There is no inherent reason
| for California to be so expensive, it is a deliberate
| policy choice driven by local governments.
| supertrope wrote:
| Maintaining the character of a neighborhood as single
| family houses. Even as prices exceed $1,000,000.
| pessimizer wrote:
| > everyone without a home
|
| I guarantee you're not talking about homeless people
| here, but people who live in a home that they are
| renting, reasonably near the place they work.
|
| edit: also, somehow these so-called poors are always
| wealthy programmers trying to buy million-dollar houses.
| pas wrote:
| Vacancy rates are low, investors don't just sit on the units.
| lifeplusplus wrote:
| Yes zero to low tax for primary residence. 10x tax for all
| secondary houses
| pessimizer wrote:
| > Now everyone who owns a home is incentivized to ensure their
| investment is maximized and that results in a lot of NIMBYism.
|
| This motivation is backwards. Getting zoning restrictions
| around your house removed multiplies the value of that house.
| NIMBYism comes from places where people _live._ YIMBYism
| maximizes property values, although there 's an element of
| blockbusting because overbuilding and a change in neighborhood
| character can make a neighborhood so unpleasant to live in that
| holdouts will end up selling cheap.
| quatrevingts wrote:
| YIMBYism simultaneously raises prices (presumably for the
| greedy developers and sellouts) and lowers them (for the
| noble neighborhood defenders who are forced to sell). Got it.
| pessimizer wrote:
| I'm going to ignore your presumptions (your "greedy
| developers and sellouts) and things I did not say (like
| "YIMBYism lowers prices for noble neighborhood defenders
| who are forced to sell"), so basically every word and try
| to find the spirit of your comment.
|
| It's pretty difficult to fit a massive apartment building
| on a house sized plot between two massive apartment
| buildings. The prices you will be offered are not what your
| neighbors were offered. There will also be pressure on you
| to sell because your neighborhood is now shit. Your house
| prices may still, all that being considered, have
| _massively_ risen since you bought the house. The property
| taxes also rose proportionally, sucking away your equity.
|
| Any reply to this other than vague sarcasm?
| quatrevingts wrote:
| I think the contradictions are pretty clear: it raises
| prices, but holdouts sell cheap; it's a shit neighborhood
| that no one wants to live in because it's too crowded...
|
| And the hypothetical boxed-in holdout scenario is simply
| not representative of what's happening in high demand
| areas in the US. We're preserving laundromats and parking
| lots in San Francisco and Manhattan. No one is trying to
| build towers in the middle of suburbia.
| namlem wrote:
| It's probably very rare the holdouts sell truly cheap. More
| like slightly cheaper than they could, but still at a very
| large profit.
| nonameiguess wrote:
| > It's a simple problem, we turned housing into an investment.
| Now everyone who owns a home is incentivized to ensure their
| investment is maximized and that results in a lot of NIMBYism.
|
| I don't know how this came to be such an obviously true common
| wisdom answer here at Hacker news. It's an extremely incomplete
| account of what causes NIMBYism. I'm sure at least _some_ of it
| is purely a desire to maintain land value appreciation, but as
| others have already pointed out, in plenty of cases, conversion
| from single-family to multi-family zoning increases land value
| and the land owners still don 't want that.
|
| The basic cause of NIMBYism is these are people's homes you're
| talking about. They live there. They may have lived there for
| decades, possibly even for generations. They chose the place
| for the character and culture it had at the time of choosing,
| and they don't want that to change. If they enjoy a relatively
| quiet life with space, they don't want to see their home
| changed into a traffic jam with nowhere to park. They don't
| want to be perpetually surrounded by nonstop construction.
|
| I'm not trying to say anyone who feels this way is inherently
| _right_. At some point, change is inevitable. I 'm sure the
| original inhabitants didn't like it when European colonists
| spread strange diseases across the land and then wiped out the
| stragglers with superior firepower. I'm sure the ranchers of
| the west didn't like seeing their ranches turned into suburbs.
| And the suburbanites don't want to see multi-family housing in
| their once-quiet and relatively secluded homesteads.
|
| Without making value judgments either way, though, I think you
| have to acknowledge there are far more basic instincts at play
| here than simple financial incentives. It's fair to say we at
| some point have no choice, and if the result is we can solve
| housing unavailability and especially homelessness, and the
| cost is a few or even a large number of people are left with
| the neighborhoods they grew up in changed drastically into
| places they no longer want to live, that may be worth it. But
| you should understand the full range of motivations for people
| who want stability in their homes and communities and not act
| like it's purely about financial gain and greed. Remember also
| that a fair number of communities in which concerns about
| gentrification are the greatest and people _really_ oppose
| redevelopment are neighborhoods that these people were
| historically forced to live in because they were ostracized if
| not killed when they tried to live anywhere else. _That
| community_ in its specific current form is what they see
| themselves as being a part of, far more than the larger city,
| state, or country that never wanted them in the first place.
| This is far more complex than you 're making it sound.
| nemo44x wrote:
| I'm not sure people understand how expensive it is to build what
| we consider a house in the West. Materials are unbelievably
| expensive and if you go cheap you're going to be replacing a lot
| of them soon. Labor is through the roof expensive.
|
| People forget that the average home was ~700 square feet 100
| years ago. It's 2400 today. How many people would be willing to
| put a family of 4 or 5 in a 700 square foot home today? Go to old
| towns and look at some of the houses that are 100+ years old and
| 2400 square feet. You know who lived in those homes 100 years
| ago? Really rich people like lawyers and business execs and they
| had servants cooking and cleaning. Today that's just expected to
| be a home for a normal family.
|
| We could change what we think a home is for most people but I
| don't think most people are willing to accept that the home they
| can afford is closer to a prefabricated trailer than it is a
| traditional single family home.
|
| Even apartments are super expensive to build and the reason you
| don't see many dwellings that aren't "luxury" is because the cost
| to construct and maintain them is so high that you'd never get
| your money back otherwise.
| lotsofpulp wrote:
| >Even apartments are super expensive to build and the reason
| you don't see many dwellings that aren't "luxury" is because
| the cost to construct and maintain them is so high that you'd
| never get your money back otherwise.
|
| Luxury is just a marketing term. Luxury apartments are the
| cheapest apartment that are legal to build. Stainless steel
| appliances and quartz countertops are a rounding error in
| construction costs.
|
| An actual luxurious apartment does not have to call itself a
| luxury apartment, the price being multiple standard deviations
| above the mean speaks for itself.
| kenned3 wrote:
| Well put.
|
| Adding to this.
|
| The government is always there, with its hands out looking to
| get a slice of the real-estate market.
|
| - Property taxes
|
| - Land transfer taxes
|
| - Development fees
|
| And once you buy your house, any attempt to improve it could
| trigger more government involvement. Building permits,
| inspection fees.
|
| Your point is spot-on. I think a big part of it is "keeping up
| with the Joneses". Everyone wants that 3,000 square foot house,
| and naturally it has to be within walking distance from work.
|
| Lastly - Location is a a major problem.
|
| Here (Ontario) the common complaint is "i cant afford to live
| in Toronto" - Living in Toronto is NOT A RIGHT. No one owes you
| "affordable housing" in Toronto to avoid a commute. A Lot of
| people commute on the GO train daily..
| rory wrote:
| > _People forget that the average home was ~700 square feet 100
| years ago._
|
| Interesting related graph:
| https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5
|
| Although we're currently in a frothy situation, scaled out a
| bit, it's not clear that housing prices are growing more than
| general inflation when adjusting for square footage. What _has_
| happened is A) houses have gotten bigger and B) people per
| household has gotten smaller.
| svnpenn wrote:
| just need to tap the lid, and the froth goes away. problem
| solved
| yrgulation wrote:
| Where in the west? In europe we use concrete and bricks, while
| the us something else. I believe anyone in the construction
| business will be able to explain that the most expensive part
| is the land actually. At least in europe.
|
| In the uk for instance, the exact same new house, exact same
| materials, can be 100k GBP less in a cheaper area. Or even half
| in extreme cases.
| nemo44x wrote:
| European homes tend to be much smaller than American homes
| and are very rarely stand alone single family homes. I get to
| the UK often and almost everything is connected and have
| small little "gardens". This is fine and it makes for cheaper
| construction since there are far less materials and labor is
| shared across many homes. The hones are tiny by American
| standards too.
|
| We don't have this as much in the USA. People generally want
| single family homes that are 2000 square feet+ and 1/5 acre
| of land. This is a lot of roof, a lot of siding, a lot of
| timber, a lot of flooring, a foundation, etc. Easily
| 6-figures in materials and even more for labor, etc.
| Especially if you go with premium materials. Windows
| installed are $2k/window. My would cost $70k to install all
| new, premium windows for example.
|
| Premium hardwood quarter-sawn flooring in a 3000 sq foot gone
| is another $30k, etc. You can start to see how this adds up
| from $100k+ in materials for trash to many hundred thousand
| for premium, quality materials.
| lotsofpulp wrote:
| It is the same in the US. While labor and materials do cost
| more, the greatest increase in costs is for the land. But
| since the US is big, there are huge disparities in land cost.
| While a laborer or materials might cost 2x or 3x more in a
| popular area than in an unpopular area, land will be 10x
| more.
|
| Actually, the labor and land costs invert if you go to really
| unpopular areas, where the land is much cheaper, but no one
| lives there so labor is much more expensive.
| nemo44x wrote:
| It really depends on the quality you want. I could easily
| Alec out a 2500 square foot home that has $300k in
| materials alone. High end windows, flooring, bathroom
| materials, and kitchens aren't cheap. A fridge and range
| can cost $30k+ at the higher ends. Windows $2k/each.
| $10/sqft premium flooring. This doesn't include labor yet
| which is another $100k-$200k. All this can go on a plot of
| land that costs $350k. Thus isn't uncommon in higher end
| developments.
|
| Of course, vinyl windows, cheap flooring, builder grade
| kitchen and bathrooms bring the cost down significantly.
| But it still adds up. Foundations aren't cheap.
| yrgulation wrote:
| "the US is big"
|
| Thats what puzzles me.
|
| What changed in the dynamics of the american society in
| such way that new cities are no longer built? I get it in
| europe there barely and land left to develop, but the us
| and canada have plenty.
| kenned3 wrote:
| This is a great conversation as there is so much input
| from around the world.
|
| I can sort of paint the picture of what takes place here
| (Canada - also a large land mass country).
|
| we have a rather large public rail system run by the
| government (GO Transit: https://www.gotransit.com/en/)
|
| it is fairly cost effective, modern, and the trains are
| all new and comfortable.
|
| we also have a major problem with a population which
| seems to refuse to accept they cant afford to live where
| they want.
|
| Everything is about "affordable housing in Toronto", but
| this is unrealistic.
|
| Once i had a conversation at work on this. A younger
| employee was complaining that he wasnt able to afford a
| nice house in Toronto and how "unfair" this was.
|
| The problem is he was making these comments to 5 others,
| not one of us lived in Toronto either, as we cant afford
| it.
|
| He refused to commute, and felt he was somehow "entitled"
| to live where he (and millions of others) want to live.
|
| So in short, while the US and Canada have plenty of
| space, the population doesn't want to live there because
| the commutes are around an hour each way to work.
|
| we also have serious NIMBY issues, where any attempt to
| increase population density is met with fierce resistance
| by the local residents who are concerned about their own
| property values.
| lotsofpulp wrote:
| I sympathize with your younger colleague. Spending 1+
| hours of your day, 5 out of 7 days per week, just to
| afford your own house would mean I would opt out of
| raising a family. Even 30+ min per day commute sounds
| terrible.
| kenned3 wrote:
| This is where things get even more strange.
|
| Most people who do manage to afford to live in Toronto
| still have to commute. you can get condo's right in the
| downtown core, but they are insanely expensive.
|
| So the debate he had was a ~30 min commute and a
| "toronto" address vs a 45-60 min commute and an address
| in a small city outside Toronto.
|
| I worked in toronto a very long time, dont know many
| people who actually lived there. Most commuted from
| cities in the GTA (Greater Toronto Area).
|
| Sometimes the commute is sort of unavoidable.
|
| What are the options to avoid a 30 min commute if you
| work in a specific industry which prefers "on site" work,
| and that company owns property in a city you cant afford
| to live in?
|
| You can change industries, etc.. but those are personal
| choices.
| yrgulation wrote:
| Interesting.
|
| It seems like the main issue is proximity to work and the
| reasonable demand for a short commute.
|
| If that need would be satisfied then i think the
| resulting effect of wanting to build more in already
| crowded cities wouldnt be there, thus nimby'ism wouldnt
| be an issue because either since locals wouldnt feel
| threatened.
|
| When i moved to london uk i had the same opinion as your
| colleague. I wanted a place to live as close as possible
| to work so that i would spend as little time wasted on
| commute as possible.
|
| But remote work gave me the option to live anywhere and
| as such i chose an area outside london. Having the option
| to leave crowded centres i took it because it satisfies
| my need for work and a short commute.
|
| So i am wondering isnt the root of all evil the fact that
| high paying jobs are clustered around large urban
| centres? Shouldnt tech have solved this issue by now?
| Even if people prefer office work, cant this work be done
| in smaller urban areas? Or at the edge of large cities
| such that people can easily commute from surrounding
| areas? I get it that in the last blue collar work had to
| be done in city centres so everyone can access services.
| But why do software engineers need to be seated in
| expensive city centres? Or indeed accountants, or even
| lawyers.
| kenned3 wrote:
| > So i am wondering isnt the root of all evil the fact
| that high paying jobs are clustered around large urban
| centres? Shouldnt tech have solved this issue by now?
| Even if people prefer office work, cant this work be done
| in smaller urban areas?
|
| This gets into an interesting "can of worms" problem.
|
| My background is finance which tends to be clustered
| around "financial hubs" (London, New York, Toronto...).
|
| Again, I will keep my "Toronto" perspective as I am most
| familiar with it.
|
| Why are all the banks located on "Bay street"? Because if
| you dont have a "bay street" address you are a "nobody".
| This odd mentality can be found globally, "wall street" ,
| specific "pockets" of London.
|
| The "big 5" banks here COULD build places in smaller
| urban areas, but those lack the "power" of that Bay
| street address.
|
| Now that we established that for odd reasons you have to
| be located in "bay street" there is also the view that
| you must be "seen". Remote work is a career killer in
| Finance.
|
| One large Canadian bank has started the "we want you back
| in the office" discussions :
|
| https://financialpost.com/fp-work/rbc-staff-back-office-
| more...
|
| RBC CEO asks staff to come into the office more often
| 'Technology can't replicate the energy, spontaneity, big
| ideas, true sense of belonging and fun' of being in the
| office, CEO says
|
| Now RBC has issued a press statement on this, the other
| Canadian banks will quickly follow suit (they move in
| lock-step with one another).
|
| So.. work in finance, you need to be on "bay street"
| monday to friday. You don't want to commute, increase
| demand to live in Toronto.
|
| Basic economics show that increased demand leads to
| increases in pricing..
|
| See this :
|
| https://www.blogto.com/real-estate-
| toronto/2022/08/toronto-r...
| yrgulation wrote:
| In a way i can see why finance is linked with the status
| expensive offices give but surely the bulk of the work
| which happens behind the scenes doesn't need to be
| located in city centres.
|
| Moving everything that isn't client facing outside would
| do both a favour. Indeed demand drives prices up but it
| seems like the reasons behind that demand are a bit
| archaic.
|
| As a side note I cant help but giggle about this: "true
| sense of belonging and fun".
| lotsofpulp wrote:
| The adjacent comment by kenned3 addresses this.
|
| > Everyone wants that 3,000 square foot house, and
| naturally it has to be within walking distance from work.
|
| The density that was built 100+ years ago was built pre
| cars. The cities that are dense are dense because they
| happened to develop at the right time.
|
| Now, everyone in the political process of building a new
| city is going to question where they are going to have
| space for large cars, which leads to parking lots, 35ft+
| or 10m+ wide streets, and of course quarter acre lots for
| detached single family homes with garages and driveways.
|
| Creating a new Manhattan type region is simply out of the
| question due to costs. If the nation cannot even do
| proper upkeep on existing Manhattan, then there is not
| much chance of digging all the rail tunnels and etc etc
| for a new Manhattan.
| yrgulation wrote:
| See my reply to kenned3.
|
| I think the root of this issue is that we are forced to
| cluster in large cities for access to jobs. I think the
| way we approach blue collar work is wrong and tech should
| have solved it by now. There is no reason why we cant
| move most high end jobs to either small towns or in the
| proximity of large cities but in areas easily accessible
| from suburbs.
|
| No need for a new manhattan. We need a totally new
| approach and it must be linked to how we work. I would be
| very happy to live in a small town, with narrow streets
| but well organised fast, cheap and reliable public
| transport, and work either remote or onsite but without
| the need to commute 2 hours a day total (24 hours of my
| life each 7 days).
| yrgulation wrote:
| Depends. High income economies of eastern eu have a high
| percentage of ownership:
|
| https://ercouncil.org/2018/chart-of-the-week-week-46/
|
| For those a bit challenged, here's a list of high income east eu
| countries:
|
| https://en.wikipedia.org/wiki/World_Bank_high-income_economy
| seydor wrote:
| > Happily, they are at last starting to recognise the damage
| caused by these policies.
|
| No, nothing changed, if anything it got worst post covid. The
| only countries that can do something are singapore and china, who
| are rationally treating housing as a basic need similar to food.
| In the western world things will probably never change on that
| front. The boomers built houses because they knew they d be
| appreciating forever - and they did, beyond their wildest dreams,
| while the economists were cheering. Millenials and GenZ will not
| touch housing because it's not an opportunity, and the barrier to
| entry is too high. Instead of housing bubbles, GenZ creates meme
| stock and crypto bubbles, and whatever comes next with the
| metaverse. Housing is very broken in europe, germans are building
| houses in the south where it's still cheap for their retirement.
| The housing stock will keep consolidating to fewer and fewer
| people, while the middle class will be using remote work for
| location arbitrage.
| mildmotive wrote:
| > The only countries that can do something are singapore and
| china, who are rationally treating housing as a basic need
| similar to food.
|
| So why are people in China paying hefty loans for apartments
| that haven't even been constructed yet? And now due to the
| housing bubble popping, construction has halted in so many
| parts of China that there is an epidemic of Chinese people who
| are refusing to pay their mortgages, and banks are refusing to
| let go of people's money because fractional-reserve banking.
| China sure do have a serious housing crisis that's arguably
| worse than that of the west.
| seydor wrote:
| All i can hear is "housing prices fall for 11 straight month"
| . That's like music for westerners.
| namlem wrote:
| China is a terrible example lol. They have a massive problem
| with real estate bubbles. Singapore does indeed do a good job,
| the government builds large amounts of high quality affordable
| housing. However, Japan has had success with a more privatized
| approach, by simply making it easy to build new housing.
| amar-laksh wrote:
| I would recommend this crazy but kinda accurate video:
| https://www.youtube.com/watch?v=4ZxzBcxB7Zc
| throwaway22032 wrote:
| Our economic system is set up such that you either hit a bar at
| which you accumulate capital forever unless you make a mistake,
| or you're loss-making forever.
|
| Once you hit that bar, your job becomes buying up housing like
| it's a Monopoly board.
|
| As an individual you can either choose to win or lose this game.
| We're not going to change it, at least not within our lifetimes.
| strikelaserclaw wrote:
| the fatal flaw in capitalism imo, a lot of wealth gets created
| which is good for everyone but eventually, a lot of that wealth
| also gets held by a smaller and smaller minority while the rest
| try to desperately compete over whatever is left over. After a
| certain point a certain portion of any new wealth created
| somehow trickles up to the capital owning class (think your
| VC's, fund owners, other rich investors), this capitalist
| system only works if "progress" happens in perpetuity, which if
| history is any indication society can always backslide
| m12k wrote:
| One the the core issues with capitalism IMO is that it
| struggles to function as a meritocracy, because the reward
| for having merit - money - is itself an effective substitute
| for merit.
| siwatanejo wrote:
| > because the reward for having merit - money - is itself
| an effective substitute for merit.
|
| True! It's exactly what happens with, for example, the
| richest man in the world right now. Everyone loves him
| because they think he has so much merit, but he's just a
| glorified recruiter and/or magnate, he doesn't have any
| technical knowledge at all.
| Workaccount2 wrote:
| If you're talking about Elon, he does in fact have pretty
| deep technical knowledge. Both from reports of his
| employees and just watching technical interviews with
| him.
|
| I get the hate about him, but it's reached the point
| where people just make stuff up and it gets swept up into
| "truth" just because it feels good.
| nemo44x wrote:
| I'm just not sure that's true. The largest growing class of
| people over the last 50 years is the upper middle class going
| from a vert small percentage of the population 50 years ago
| (doctors, lawyers, and high level execs) to being a much
| larger percentage of the country, around 30% today. There are
| more "rich" people today than ever as the upper middle class
| is open to more professions like engineers, upper-middle
| managers, etc.
|
| The issue is relative to a lot of people. There was a much
| large "middle class" 50 years ago and most people were much
| closer to each other. That middle class has shrunk because a
| lot of it graduated into a new upper middle class. The upper
| middle class has no problems buying up property in the most
| sought after areas as they are close to the places these
| people work. 50 years ago, it was a larger group of similar
| middle-income people competing for these places. Today, they
| can't compete and are pushed out to less desirable places or
| they rent and complain they'll never be able to buy a home.
| When really it's that they won't be able to buy a home in the
| place they dream to live because there's more people that can
| outbid them than there are properties.
| tbihl wrote:
| >a lot of that wealth also gets held by a smaller and smaller
| minority while the rest try to desperately compete over
| whatever is left over.
|
| This is the tendency of every economic system that has ever
| been seen or theorized. The wealth creation is what makes
| capitalism distinct.
|
| I don't mean to say that 'capitalism' is the answer to the
| world's problems, but I point out that it's not the source of
| that particular intractable problem.
| dougmwne wrote:
| Not sure I agree with this worldview. The real currency of
| the world is labor, at least until we invent AGI. People need
| to be a certain amount of hungry before they will labor. Our
| current system supports a good number of older people being
| supported by the labor of younger people. That capital cannot
| magically increase the labor force and when you dump more
| capital into the system outside of a recession you get
| inflation, not more labor.
|
| We might be able to support more idle people, but not at
| everyone's current quality of life. That "excess capital"
| goes off to chase prestige goods like paintings and handbags
| that soak up a small fraction of the labor pool.
|
| If a huge percentage of the labor economy were devoted to the
| quality of life for billionaires, then I would very much
| agree with "eat the rich."
| wyre wrote:
| I'd say productivity is more of a currency than labor.
| Sisyphus isn't producing anything, but sure is laboring a
| lot. The industrial revolution was huge, not because it had
| a lot of laborers but because the laborers were able to be
| more productive with their labor.
| dougmwne wrote:
| Fair enough, but no productivity improvement can make up
| for too few workers producing goods and services for
| those who might want them...yet!
| refurb wrote:
| But this isn't true. Median income and median wealth has been
| on a general upward trend for over a century.
|
| I mean, how do you think the Western world become so wealthy?
| How did China raise tens of millions out of poverty.
|
| Capitalism!
| r_hoods_ghost wrote:
| Capitalism is like democracy, it is the worst system
| possible... except for all the others.
| the_gastropod wrote:
| This all-or-nothing thinking is, itself, a problem.
| Capitalism is a tool. And it's good at many things.
| Creating competition and innovation in consumer goods is
| one area it's obviously very good at. It is _not_ good at
| equity. Externalities are a massive problem raw capitalism
| has no affordance for addressing. Regulations (another
| tool) are necessary to smooth out capitalism 's rough
| edges.
|
| You'll find very few people that actually want to whole-hog
| entirely get rid of capitalism. When you find people
| critiquing it, it's generally from the vantage point of
| "this is a rough edge that needs addressing via some
| government intervention". Housing (in addition to
| healthcare, education, transportation, and countless other
| areas) seems like one case where this is very obviously
| true.
| goodpoint wrote:
| > Creating competition and innovation in consumer goods
| is one area it's obviously very good at.
|
| Not really.
| the_gastropod wrote:
| Good point ;-)
| stefan_ wrote:
| I've had this thought. Like we inevitably need a World War
| scale event every 100 or 200 years or the system will devolve
| into the most rent-seeking, unproductive, regulatory capture
| garbage.
|
| Real estate speculation is just such an utterly unproductive
| endeavor just on the face of it, it's incredible it got this
| bad.
| namlem wrote:
| Japan changed it. They passed sweeping zoning reform that made
| it easy to build and prices went down. New Zealand just passed
| sweeping reform to address their housing crisis as well.
| Reforms are being passed in the US too. Oregon, California,
| Minneapolis, Ann Arbor, and others have started to pass
| reforms.
| nemo44x wrote:
| > Japan changed it. They passed sweeping zoning reform that
| made it easy to build and prices went down
|
| Japanese homes are generally prefabricated and have a
| lifespan of 20-30 years before they are disposed of and a new
| prefabricated home is put in its place. This is why housing
| is "cheap" in Japan.
| stefan_ wrote:
| Fucking fantastic, sign me up for it. In the west we
| instead pay luxury hotel rent for creaking shit homes built
| 100 years ago, post-war-haste cheap.
| resoluteteeth wrote:
| > This is why housing is "cheap" in Japan.
|
| This doesn't explain why rent for apartments is cheaper in
| Tokyo than in the greater metropolitan area of similar
| cities in other countries like the US.
| siwatanejo wrote:
| Exactly, and the ironic thing is that the most insightful
| comment in this page is coming from a throaway account
| (possibly because of the fear of reputation-burn or
| something...).
| [deleted]
| throwaway22032 wrote:
| Oh, I have no reputation to burn. My friends and family know
| me well enough :-)
| ip26 wrote:
| Agreed; I figure the necessary missing piece is government
| dampening this effect. Some way or another, to balance it out
| you need to "leak" capital faster & faster as you accumulate
| it. The size of the leak would be tuned to allow you to
| continue to grow your wealth if you are still rapidly creating
| new wealth, but if you just sit on a kings ransom in safe
| investments, it would leak away & attenuate.
|
| Trouble being, this most likely takes the form of steeply
| rising taxes, which are ever-unpopular, and needs careful
| design. I also suspect just about everybody aspires to "make
| it" and then stop striving; this is somewhat antithetical to
| that (although the leak would be tiny at regular-people levels
| of wealth)
| Applejinx wrote:
| From what experimentation I've done it doesn't take much of a
| leak. I'm agreed too except that in the absence of us or
| somebody fixing it, the whole thing is going to blow up.
|
| Dark ages are a thing. It's not at all guaranteed that you
| can preside over an injustice engine of this nature and have
| it persist at all: externalities will bite you.
|
| I guess the follow-up is, 'given that this is going to blow
| up, how hard of a landing do you want? Do you want an
| apocalyptically ruined planet, or heads on pikes, or massive
| asset seizure, or all of the above in various combinations?'
| rpastuszak wrote:
| > Once you hit that bar, your job becomes buying up housing
| like it's a Monopoly board.
|
| I agree with your comment, but I enjoy the irony of it even
| more:
| https://en.wikipedia.org/wiki/Lizzie_Magie#The_Landlord's_Ga...
|
| TL;DR Monopoly was based on The Lanlord's Game--a board game
| demonstrating the issues with land monopolism.
|
| > In 1906, she moved to Chicago. That year, she and fellow
| Georgists formed the Economic Game Co. to self-publish her
| original edition of The Landlord's Game.
| t_mann wrote:
| > But households then need to rein in spending to repay their
| loans
|
| Right now it looks like we may be about to witness something
| else: inflation is picking up, and if wages even just remotely
| track the increase in consumer prices (not assured ofc, but
| conceivable in a time of low unemployment), then those loans and
| their monthly instalments will actually make up a smaller
| proportion of household income (especially for those borrowers
| with fixed-rate loans).
| mrep wrote:
| > especially for those borrowers with fixed-rate loans
|
| Which is like 90% of US mortgages [0].
|
| [0]: https://www.financialsamurai.com/adjustable-rate-
| mortgages-a....
| robocat wrote:
| People bid on houses the maximum they can afford (assuming
| supply of houses is constrained). So house prices are driven by
| people's income and the interest rates.
|
| If wages go up enough, then you keep the house you have with a
| low fixed 30 year mortgage (because the mortgage can't be
| replaced), and buy another when you want to move.
| black_13 wrote:
| The economist can always find time say something negative about
| Pickety
| stevenwoo wrote:
| It's odd that they picked a single statement to critique but
| neglected the larger message (in my reading of Capital and
| Ideology which he changed his mind a bit from his earlier work
| as I understand it) about capital accumulation, which has
| little to do with income for the very wealthy or even location.
| It is a pattern which continued in every country even after
| changes from feudalism to capitalism or communism to capitalism
| or feudalism to state communism no matter how much democracy
| was involved - the constitution or founding documents put too
| much power in those with lots of capital and this cannot be
| changed without changing the constitutions and financial
| transparency of cross national dealings.
| seydor wrote:
| Which is odd because piketty's data are entirely in line with
| the message of the article: overconcentration of wealth and
| prices going up. And Piketty has the 'solution' as well: the
| only times when inequality violently decreased was during world
| wars. I'm not sure how we can go about having one
| infogulch wrote:
| A couple ideas for how to fix some real estate problems:
|
| 1. A zoning rule that requires home owners to live in the owned
| home. This would prevent remote/foreign money from meddling with
| local housing in particular areas, and prevents big corps from
| buying up all the homes and forcing people to lease them out.
| Some people want to lease though, so that's why I think it's more
| appropriate as a zoning tool for particular areas than as a city
| or state-wide law. Maybe this could manifest as a leasing tax.
| (As an aside, in the US this wouldn't work for typical apartment
| buildings, however maybe we should consider apartment _owning_
| model like they have in Japan...)
|
| 2. Ban NDAs for real estate leases, period. They just allow for
| shenanigans like lying about how much a property was leased for
| in the past. NDAs are usually a cancer but I admit they can be
| useful in certain contexts; real estate is not a valid context
| for NDAs.
|
| 3. You can only deprecate the improved value, not the value of
| the land. "The land beneath a building does not deprecate,
| whereas the value of the building should." -- a good idea by
| huevosabio that I saw in this thread.
|
| 4. Owners pay taxes on the _claimed_ lease value, regardless of
| current occupancy. This would disincentivize owners from just
| sitting on dozens of properties refusing to lease because nobody
| wants to pay their unrealistic exorbitant rates. This is a plague
| in New York at the moment, where all the owners are playing a
| game of chicken with the economy to try to artificially prop up
| their building valuations by pretending that the supply /demand
| curve doesn't exist even in the face of record breaking
| unoccupancy (is that a word?).
| namlem wrote:
| None of this would have much impact. What is really needed is
| to abolish most forms of land use restrictions. Abolish parking
| minimums, abolish floor-area-ratio minimums, abolish single
| family zoning, abolish or severely limit community review of
| new housing developments. Neighborhoods built prior to WWII are
| nicer places to live precisely because these rules didn't exist
| when they were built. It was the insanity of post-war high
| modernist urban planning that destroyed American cities and
| suburbs.
| nemo44x wrote:
| > Neighborhoods built prior to WWII are nicer places to live
|
| The East Coast is a great place to appreciate this dynamic.
| There are a lot of old suburbs and towns and they tend to be
| great places to live. The homes are beautiful and well
| maintained, the trees are mature, and they are generally
| expensive places to live.
|
| Contrast them with adjacent towns that were built up post WW2
| and the homes are ugly and isolated from restaurants and
| shops and they probably don't have a train station. And the
| property values are generally much lower.
|
| Every non-rural home should be walkable to a real park,
| public transit into the anchoring city, and a town area with
| shops. So many post-WW2 suburbs are just wastelands where
| every home is an isolated island. But they aren't rural. It's
| weird.
| colinmhayes wrote:
| 1. The foreign owner thing is really overblown. They mostly
| invest in extreme luxury apartment, not lots of cheaper ones.
| The mega reit buying residential properties is also overblown.
| 70% of rental properties are owned by individual investors.
|
| 4. Empty units isn't really a big problem. 4.5% of NYC
| apartments are vacant, the majority of those due to structural
| reasons such as tenants moving or repairs. The historical rate
| is around 3%, it's quite hard to get below that.
|
| The solution is simple. Build more units. Relax zoning
| requirements, incentivize density where it makes sense.
| onlyrealcuzzo wrote:
| > You can only deprecate the improved value, not the value of
| the land. "The land beneath a building does not deprecate,
| whereas the value of the building should." -- a good idea by
| huevosabio that I saw in this thread.
|
| At least for residential R/E in the US - you cannot depreciate
| land from taxable income.
|
| > Owners pay taxes on the claimed lease value, regardless of
| current occupancy. This would disincentivize owners from just
| sitting on dozens of properties refusing to lease because
| nobody wants to pay their unrealistic exorbitant rates.
|
| You're misunderstanding the point.
|
| From an accounting perspective, you can pretend unleased units
| have revenue - and that vacancy is an expense.
|
| You can get loans on your revenues (imaginary money in the case
| of R/E).
|
| R/E speculators want as much debt as possible - because they
| know that debt (especially leveraged) at interest rates typical
| of the last 12 years was the free money cheat code.
|
| This incentives them to have empty units at 100% above market
| rates - because they can qualify for twice as much debt to buy
| more properties to do the same thing - to speculate further on
| leveraged appreciation.
|
| It's also the reason you regularly see building with outrageous
| rents yet they're giving you 3+ months free. Why not just lower
| the rent by 25%? Because then you qualify for 25% less new debt
| (which in many cases they need new debt just to cover their
| deeply negative cash-flow).
| theandrewbailey wrote:
| > unoccupancy (is that a word?)
|
| Not really. Try using "vacancy" instead.
| ChadNauseam wrote:
| 5. Make it legal to build more houses
|
| We got into this hole by making it illegal to build. For
| example, it is illegal to build a building with 5 or more homes
| in 90% of San Francisco. (Buildings with 3 or more homes are
| illegal in 70%.)
|
| I appreciate galaxy-brained legislation as much as the next
| policy wonk, but the solution in this case is simple. Making it
| legal to build homes - greater supply of homes. Greater supply
| - lower prices.
|
| Ever notice that cars are not that expensive, even though many
| people absolutely need them and they're very complex machines
| with high safety standards? It helps that it's legal to build
| them.
|
| Our current situation is like if we made it illegal to produce
| new cars. Cars would get really expensive, and you'd had a
| bunch of people saying maybe you shouldn't be able to write off
| your rental car depreciation, or own a car you aren't driving,
| and that producing more cars can't possibly be the solution
| because most new cars are "luxury cars" and how exactly does
| more luxury cars help the car affordability problem again?
|
| Sorry, that got off the rails a bit. It's possible that some of
| your suggestions would be necessary too. But when you find
| yourself in a hole, your first step to getting out is to stop
| digging.
| lbrito wrote:
| >A zoning rule that requires home owners to live in the owned
| home.
|
| This would reduce the housing stock.
|
| The way capitalism works is that some people have excess
| capital, and they invest it. Housing is one such investment.
| People don't need multiple houses to live in, so multi-property
| owners rent out their investments, which is great because there
| are many people that can only afford renting, not buying.
| djohnston wrote:
| It's great to an extent but it seems obvious we passed that
| threshold during the pandemic. Now the combination of
| NIMBYISM and corporate landlords is creating insane
| distortions in particular locales. They are turning potential
| home owners into renters.
| ThrustVectoring wrote:
| Housing crises are a _symptom_ , not a cause. The root issue is
| demographics, specifically the worker-to-retiree ratio growing at
| a rate that outpaces productivity growth. Since saving is
| essentially impossible at societal scales and generational
| timeframes (how exactly is a car built in 1980 supposed to cause
| more nurses to provide healthcare in 2020?), tomorrow's workers
| _have_ to be coerced into transferring real goods and services to
| tomorrow 's retirees. There's essentially two broad categories
| for this: "saving" by exchanging unconsumed current production
| for financial assets from retirees, and paying taxes.
|
| If you managed to fix a housing crisis, the _only_ way of doing
| so is torpedoing retiree financial assets (mix of personal home
| equity and pension fund), which would shortly cause an increase
| in entitlement transfers to sustain retiree standards of living.
| The _only_ way to ease the combined tax and rent-seeking load on
| younger workers is to reduce the total transfer to non-workers,
| and the political balance of power forbids this, so things will
| remain fucked.
| coxmichael wrote:
| I feel like this kind of zero-sum argument does the rounds
| quite frequently.
|
| The reality is that housing is the main mechanism used by the
| older wealthy folk for their pensions, and subsequently
| transfers wealth up through the generations.
|
| What we need is a way for all that unproductive capital used to
| directly fund the businesses of the young, growing the real
| economy (rather than the financial).
|
| Alongside that, additional legislative arrangements to provide
| security for renters.
|
| Pension pots should be a return on investment, not speculation.
| ThrustVectoring wrote:
| > What we need is a way for all that unproductive capital
| used to directly fund the businesses of the young, growing
| the real economy (rather than the financial).
|
| You're conflating financial "capital" with real productive
| capital here. In real terms, non-productive financial assets
| simply do not matter; whether landlords extract a billion or
| a trillion dollars makes not a whit of difference in the real
| goods and services the economy produces.
|
| If you redirect financial assets from bidding up the value of
| housing to bidding up the value of small businesses, you've
| simply moved the siphon from cost of rent to the cost of
| owning your own business and/or suppressing wages.
| coxmichael wrote:
| Again, there's the idea that wages and businesses produce
| nothing. They don't.
| romel wrote:
| I think this a problem in everywhere. Take for instance, Dhaka,
| the capital city of Bangladesh. Housing is a disaster. The home
| ownership percentage is so negligible it is a shame. Land and
| housing price is so high, it is almost impossible for most people
| to own a house in one life time. I hear the same kind of scenario
| in many other developing countries.
| t_mann wrote:
| If the ownership percentage is negligible, does that mean that
| most real estate is owned by a few super-wealthy, or who owns
| it then?
| TheRealDunkirk wrote:
| Who else would own it? The government?
| t_mann wrote:
| In principle there are a few possibilities - foreigners,
| pension funds, banks, insurances or other corporations,
| endowment funds, publicly owned,... although most of these
| would seem more likely in a place like the US.
|
| It's also conceivable that nobody really knows, that there
| is no common land registry that really matches the reality
| 'on the ground', ie the people considering themselves
| owners and receiving rents. In such a situation it would be
| very hard to make transactions, hence why it might appear
| impossible to buy real estate in some areas.
| Loughla wrote:
| That's sort of the question - who owns it? I legitimately
| do not know.
| TheRealDunkirk wrote:
| American companies are working on doing that in the US: buying
| up the liquid housing, and driving up prices, only to turn
| around and rent it back to people who could have afforded it if
| they hadn't driven up prices by trying to monopolize markets.
|
| "You will own nothing, and be happy."
| tzs wrote:
| > American companies are working on doing that in the US
|
| Is that why I have gotten several phone calls over the last
| few months from people asking if I'm interested in selling my
| house, many saying they will pay above current market rates
| and in cash?
|
| I'm not in a big city. I'm in a county with a population
| density of around 600/mi^2, where the biggest city population
| is 40k and second biggest is about half that. My house is a
| little bit outside a town that is only about 10k.
|
| It's about an hour on a good day to commute from here to the
| nearest big city.
|
| It's not a place I'd expect there to be a lot of interest in
| speculative house buying...but I'm getting the calls and
| can't think of what else they might be.
| 11235813213455 wrote:
| I see 2 main problems with housing, possibly related to each
| other:
|
| - too many unoccupied apartments or offices, and secondary
| residences
|
| - cars is at the root of the decision, and this leads to people
| living 30+km away from where they have to go daily, which is a
| big environmental issue
|
| We should transition away from individual cars to light vehicles
| to solve the climate crisis, and we (the government) should also
| manage the housing crisis to help with that
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