17 ms·

Housing is at the root of many of the rich world’s problems (2020)

• edmcnulty101 4y ago
  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.
  • QuarterReptile 4y ago
    >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 4y ago
      > 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 4y ago
        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-are-there-in-San-Francisco-16822916.php https://www.sfgate.com/bayarea/article/how-many-vacant-homes... https://sfist.com/2022/02/01/report-10-of-san-franciscos-housing-stock-is-just-sitting-vacant-and-empty/ 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-shifting-historically-fast-austin-boise-las-vegas/ https://fortune.com/2022/08/16/bubbly-housing-markets-are-sh...
        • edmcnulty101 4y ago
          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 4y ago
        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 4y ago
          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.
• rhacker 4y ago
  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.
  • Invictus0 4y ago
    How would that help the rental market? Wouldn't landlords just pass on the price increase to renters?
  • nemo44x 4y ago
    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.
• lbrito 4y ago
  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 4y ago
    NIMBYism seems to be a disease of Anglophone countries especially, it's true. It exists elsewhere, but it's particularly bad in the Anglosphere.
• technocratius 4y ago
  https://archive.ph/zdXH2 https://archive.ph/zdXH2
• mantas 4y ago
  Not housing per-se, but concentrating too many jobs in few locations. Which causes issues with housing.
  • chadash 4y ago
    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.
  • switch007 4y ago
    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 4y ago
      + 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 4y ago
        + 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 4y ago
    > 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-did-all-the-workers-go-60-years-of-economic-change-in-1-graph/252018/ https://www.theatlantic.com/business/archive/2012/01/where-d...
• winReInstall 4y ago
  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.
  • deleted 4y ago
    [deleted]
  • plankers 4y ago
    you didn't even hit the core dependency: a capitalist operating system which inherently directs capital to a small pool of people
    • probably_wrong 4y ago
      As much as I'd like to throw capitalism under the bus, communist Russia was well known for its housing problems too.
      • strikelaserclaw 4y ago
        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 4y ago
          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 4y ago
        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.).
• psi75 4y ago
  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 4y ago
    > 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.
• pochekailov 4y ago
  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.
  • danielrpa 4y ago
    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 4y ago
      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 4y ago
        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.
• throwaway22032 4y ago
  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.
  • siwatanejo 4y ago
    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 4y ago
      [deleted]
    • throwaway22032 4y ago
      Oh, I have no reputation to burn. My friends and family know me well enough :-)
  • namlem 4y ago
    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 4y ago
      > 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.
      • 4y ago
• t_mann 4y ago
  > 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 4y ago
    > especially for those borrowers with fixed-rate loans Which is like 90% of US mortgages [0]. [0]: https://www.financialsamurai.com/adjustable-rate-mortgages-as-a-percentage-of-total-loans/#:~:text=Within%20a%20short%20period%20of,mortgage%20rates%20up%20in%202022 https://www.financialsamurai.com/adjustable-rate-mortgages-a....
  • robocat 4y ago
    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 4y ago
  The economist can always find time say something negative about Pickety
  • stevenwoo 4y ago
    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 4y ago
    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
• romel 4y ago
  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 4y ago
    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 4y ago
      Who else would own it? The government?
      • Loughla 4y ago
        That's sort of the question - who owns it? I legitimately do not know.
      • t_mann 4y ago
        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.
  • TheRealDunkirk 4y ago
    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."
• heresie-dabord 4y ago
  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 4y ago
    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.
• kkfx 4y ago
  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 4y ago
    >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!
• Geee 4y ago
  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.
  • ch4s3 4y ago
    > 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 4y ago
      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 4y ago
        But it doesn’t mean fiat is in fact backed by mortgages.
  • DubiousPusher 4y ago
    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.
• fallingfrog 4y ago
  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 4y ago
    [deleted]
• idkyall 4y ago
  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.
  • sudosysgen 4y ago
    That's horrific. From a quick back of the envelope calculation that's hundreds of billions of unrealized taxes.
  • jraby3 4y ago
    It’s even worse. Take a look at the cost segregation rules.
  • refurb 4y ago
    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.
• datacruncher01 4y ago
  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.
  • mistrial9 4y ago
    > 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-housing-bills-home/ https://www.capradio.org/articles/2017/09/29/brown-brings-ho...
    • colinmhayes 4y ago
      And SF has already tried bending over backwards to defang it. Luckily mayor Breed rejected the attempt, but it's far from over.
  • fezfight 4y ago
    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.
    • colinmhayes 4y ago
• kindatrue 4y ago
  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-andreessens-opposition-housing-project-nimby/671061/ https://www.theatlantic.com/ideas/archive/2022/08/marc-andre...)
  • davidf18 4y ago
  • AlexandrB 4y ago
    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 4y ago
      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 4y ago
      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.
• seydor 4y ago
  > 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 4y ago
    > 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 4y ago
      All i can hear is "housing prices fall for 11 straight month" . That's like music for westerners.
  • namlem 4y ago
    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.
• anonymousDan 4y ago
  "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.
• obblekk 4y ago
  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!
  • francisofascii 4y ago
    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.
  • bobthepanda 4y ago
    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 4y ago
      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.
• ThrustVectoring 4y ago
  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 4y ago
    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 4y ago
      > 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.
• deleted 4y ago
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• jason0597 4y ago
  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
  • denimnerd42 4y ago
    huh.. everyone knows scalpers business model will die when they can build more GPUs
  • Atheros 4y ago
    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 4y ago
      > 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 4y ago
    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.
• infogulch 4y ago
  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?).
  • colinmhayes 4y ago
    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 4y ago
    > 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).
• 11235813213455 4y ago
  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
• deleted 4y ago
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• 11101010001100 4y ago
  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.
  • symlinkk 4y ago
    Not only do you not care, it actively benefits you to “pull up the ladder” and prevent others from getting on board.
  • wildrhythms 4y ago
    The term you're looking for is 'class system'.
• ladyattis 4y ago
  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.
• wikitopian 4y ago
  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.
  • nerfhammer 4y ago
    the alternative is the system we're evolving to where the landless class will owe the landowning class most of their productivity, forever
    • wikitopian 4y ago
      Then we incentivize and encourage homestead ownership. YIMBY does the opposite of that, and is favored by landlords and tenants.
  • namlem 4y ago
    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 4y ago
      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 4y ago
        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.
• reillyse 4y ago
  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 4y ago
    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 4y ago
    >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 4y ago
      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.
      • 4y ago
• immmmmm 4y ago
  and the rich (lifestyle) is at the root of everyone else problem.
• amar-laksh 4y ago
  I would recommend this crazy but kinda accurate video: https://www.youtube.com/watch?v=4ZxzBcxB7Zc https://www.youtube.com/watch?v=4ZxzBcxB7Zc
• thehappypm 4y ago
  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.
• nemo44x 4y ago
  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.
  • yrgulation 4y ago
    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.
    • lotsofpulp 4y ago
      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.
      • yrgulation 4y ago
• yrgulation 4y ago
  Depends. High income economies of eastern eu have a high percentage of ownership: https://ercouncil.org/2018/chart-of-the-week-week-46/ 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 https://en.wikipedia.org/wiki/World_Bank_high-income_economy
• golemiprague 4y ago
  Everybody here comment about the US and their tax or zoning issues but those problems exist everywhere, it is not like houses in London or Berlin are cheap, even with entirely different laws regarding, renting, taxes and zoning. There are also other issues like population growth, city planning and transportation. Many cities in Asia get it right and the prices there are more reasonable, Tokyo is a good example, but you need a combination of all the parameters above, changing just one of them is not going to work.
• c7DJTLrn 4y ago
  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.
• rthomas6 4y ago
  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-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr...
• obblekk 4y ago
  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.
• sytelus 4y ago
  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.
• black_13 4y ago
  The root of rich countries problems is the rich.
• cesarvarela 4y ago
  Not just the rich world, here in the third world it is the same. Housing insecurity drains people's life energy. People can't take risks, learn new things, etc. The smallest mistake has them living on the streets. Hundreds of millions of potential scientists, artists, etc. that we loose because they can't afford giving up their minimum wage job and face homelessnes. The article seems to be focused on politics, but I think it is not a political problem, it's a philosophical one, or even moral. Speculating with housing should be seen as badly as speculating with water, too basic of a thing to play with, I'm not sure people that haven't experienced housing insecurity understand this.
• fithisux 4y ago
  Housing is also a mirror of the human souls.
• FactKnower69 4y ago
  there are thirty empty housing units for every single homeless person in the US, but sure, housing supply is the issue. let's deregulate the construction industry and have our own Grenfell!!! :)
• robotburrito 4y ago
  I read once that as a peasant serving under a lord you were usually guarantied land via agreements that went back generations. It’s funny how some things feel like they slide backwards.