Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Even the Rich Are Being Priced Out of Central London

citylab.com

Post reply on HN
Print view View original

81–90 of 216 posts

Re: Even the Rich Are Being Priced Out of Central London

#81

Post by mabbo »

antisthenes wrote: post #10
conception wrote: post #8

Earlier quoted context omitted.

Vancouver recently enacted an anti foreign buyer tax that seems to have almost completely stopped the practice. Curious if we will start to see more and more of this local protionism.

Unless every desirable city introduces this tax uniformly, doesn't this just shift the burden from Vancouver onto other cities?

My condo is Toronto is going up in value pretty quickly. I'm still 100% opposed to the Vancouver tax, but in theory it's making my assets increase in value.

Re: Even the Rich Are Being Priced Out of Central London

#82

Post by monknomo »

titanomachy wrote: post #76
p1mrx wrote: post #30

Earlier quoted context omitted.

Can't we solve this problem with virtualization? Build houses in the middle of nowhere, but assign a central London address.

Haha this is great. On a more serious note, maybe banks could offer some sort of investment vehicle made up of homes in a certain area. The homes would then be rented out for revenue, and foreign buyers could have an equivalent financial position without driving away actual residents.

I think they are also buying the prestige of a cool place to loan to friends and the safety of a cool place to stay if wherever they are from has trouble

Re: Even the Rich Are Being Priced Out of Central London

#83

Post by mabbo »

PhasmaFelis wrote: post #33
antisthenes wrote: post #10

Earlier quoted context omitted.

Unless every desirable city introduces this tax uniformly, doesn't this just shift the burden from Vancouver onto other cities?

It does. Should Vancouver not act to protect its own citizens to the best of its ability, then?

The same logic works for all Protectionist legislation. Yet free trade has lowered the costs of nearly every good in our lives.

Re: Even the Rich Are Being Priced Out of Central London

#84

Post by keithpeter »

gwbas1c wrote: post #72
keithpeter wrote: post #50

Earlier quoted context omitted.

What happens until the bubble pops I think is the question. To quote the OA... "In the evenings an eerie stillness settles on [the area]. That’s because these new owners are so rich in both money and global property that their London addresses frequently sit empty, functioning more as dust-sheeted deposit boxes rather than actual homes." This is not why we have cities. We have cities to allow interaction. Look where…

The bubble will be forcefully burst when homeless people start squatting; or pranksters vandalize them.

Sure, the bubble bursting I have no problem with: rich people take a haircut and premises are repurposed. I walk through Digbeth in Birmingham most days: Early Victorian housing that is now car scrap yards and workshops. It all gets recycled.

Re: Even the Rich Are Being Priced Out of Central London

#85

Post by mywittyname »

Symbiote wrote: post #36
mywittyname wrote: post #27

Earlier quoted context omitted.

I believe this is to not draw attention to the property. There was a Planet Money podcast a while ago about how high-end real estate is being used by foreigners to launder money. If the FBI catches wind, they have tools to seize the property and remunerate the proceeds. I'm guessing that renting the property means involving the IRS and potentially their foreign counterparts in the person's home country, both of which…

This has nothing to do with the FBI or IRS; it's in London. The UK's territories include several actual tax havens (the Channel Islands, Isle of Man, Virgin Islands, Bermuda, Cayman etc). Many tens of thousands of houses are owned by corporations registered in an offshore tax haven. There's a map of British property registered in a tax haven: http://www.private-eye.co.uk/registry

I was speaking in general, as this problem is not just specific to London. It's a common issue in the US as well.

Re: Even the Rich Are Being Priced Out of Central London

#86

Post by tacostakohashi »

jrockway wrote: post #20
scotty79 wrote: post #4

What bothers me is that price rises but those are the same crappy apartments. When a flat costs millions I'd expect it to be absolute marvel of modern technology.

There is no financial incentive. People have their heart set on living in a super-popular city, but they won't pay extra for nicer finishing. They find all available money, then take out a loan that's 100% of their income (their income will go up over time, after all), and buy whatever is available. You can get a nice apartment, but you're talking double or triple the price of common "the walls were last painted in 1…

Absolutely, I have been battling this lately with a 50 year old coop in Manhattan that needs renovation. The magnitude of pain involved is unbelievable. You want to strip and paint those 1872 walls? Guess what, lead-based paint, inspections, permits, abatement, management company, board approval, etc, the list goes on.

It's basically not economical to re novate anything if you value your time, so if you value living anywhere nice you have to pay the 2000/sqft give or take for something modern.

Re: Even the Rich Are Being Priced Out of Central London

#87

Post by Grishnakh »

melling wrote: post #7

If only there was a way to make living within a city less important. There must be some way to move large numbers of people over "great distances" (50-100 miles) in a more commutable time.

There absolutely is, but no one seems to believe it's possible.

It's called SkyTran personal rapid transit. Wikipedia has a page all about it here: https://en.wikipedia.org/wiki/SkyTran With small maglev pods traveling 100-150 mph, a 100-mile commute is actually quite doable in one of these, especially since you can sleep in it as it's automated and takes you door-to-door. If governments would actually invest in this and build it instead of wasting money on boondoggles like high-speed rail, we'd make a gigantic dent in our carbon emissions and roadway deaths, plus save ourselves a lot of time that we waste driving.

Re: Even the Rich Are Being Priced Out of Central London

#88

Post by rconti »

mtkd wrote: post #68

I walked from Kings Cross to Marylebone at dusk recently - half way, I took the road up from the main Euston Road - walking through mostly residential - barely an apartment window with a light on - it's just money parked in property - the parks don't have kids playing in them any more The recent Vancouver tax changes have worked, I suspect/hope we'll start seeing that repeated in every city thats had it's life sucked…

So... how long before property values collapse because it's no longer a desirable place to live, and the foreign money tries to get out as quickly as possible before values drop further?

Re: Even the Rich Are Being Priced Out of Central London

#89

Post by jandrese »

tome wrote: post #37
jandrese wrote: post #25

Earlier quoted context omitted.

People dumping hundreds of millions into the market just to hide it from external forces aren't interested in being landlords.

They don't want to make a few percent on their capital?

Being a landlord is a huge hassle, and it makes the property harder to sell when you need the cash back.

Re: Even the Rich Are Being Priced Out of Central London

#90

Post by sandworm101 »

I'm shocked that london, vancouver, SF and a few other cities are still functional. When working lawyers and doctors can no longer afford to live in a city, what actually happens? Are these now theme parks? Retirement villages for the uber-wealthy?

Some (SF, seattle) have developed this strange mix of the very very rich and the homeless on the street. Others (Vancouver) see inverted traffic patterns as more professionals (carps etc) drive into residential neighborhoods to work on houses than residents drive out. Suburbs are now industrial zones, places where people go to work. Anyone who can afford to live in the suburb, in a detached house, can live on investments alone.

I ran into a teacher from my old school last year. In my day, the school built doctors and lawyers. Everyone went to university. Now, the kids are so rich that they have no drive. None want to be doctors anymore. Doctors have to touch sick people. How do you motivate a kid who knows he has a guaranteed job at his parent's investment firm, that has trust portfolios that will support him forever?

Post reply on HN