91–100 of 363 posts
Earlier quoted context omitted.
Right. People expect to skip straight from 22 or even 18 to a late-20s or early-30s level of "stuff" and general lifestyle, without paying their dues in the middle. It's called a "property ladder" for a reason.
Those 'entry-level' houses are being bought up by idle capital and rented on AirBnB.
I agree with the article. However, people should be able and willing to make the appropriate sacrifices commensurate with their future expectations. If someone is 22 and is making 35k a year, and can keep all of their expenses at 15k per year (it's easy to find places in Dorchester 850 rent all inclusive for a room plus 150 food and 3k year entertainment), save 5k per year for retirement and emergencies and finally s…
The middle class can afford to live in cities, just not in a 3500 sqft house with a 2 car garage and a boat, and with the best school district and certainly not in NYC, SF, Boston, DC, etc. There are plenty of places to live in America. You have to adjust your standard of living and your expectations according to your income and desires.
This is a view that will lead to a highly dysfunctional society. First off, you are dismissive of the issue with that bit of exaggeration. It is not as if this group wants all the good things in life that only a tech salary afford. Perhaps a dignified life would be sufficient. You also place NYC, SF, Boston, DC, etc. into a category of city that is naturally not available to the middle class. Is NYC a luxury like a 3…
Earlier quoted context omitted.
Right. People expect to skip straight from 22 or even 18 to a late-20s or early-30s level of "stuff" and general lifestyle, without paying their dues in the middle. It's called a "property ladder" for a reason.
It's less of a ladder than a Ponzi scheme. In SF housing prices have grown at a compound growth rate of 6% for over 50 years. Older generation squats on property paid for by debt, low taxes, and then retires at 60 -- all paid for by a younger generation that doesn't have jobs and can't afford housing.
When a good chunk of those years had interest rates in the 10%+ range, and when the years that were lower than 10% ended with "The Housing Bubble Pop" and "Great Recession", that 6% compounded growth is actually kinda awful.
In any case, compound growth is the center of most economies. Being the owner of things entitles you to profits, be it in stocks, bonds, or real estate.
The "buying on debt" depends on the rate that you got in at. If you're complaining that people in the 1970s were able to get 15% mortgages to earn lol 6% on Real Estate, then I don't think you fully appreciate the history of Stagflation and the 80s bond market.
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All in all, housing prices have rose because interest rates have fallen. More people can afford a house when mortgages are at 4% instead of at 15%, and the price of homes go up to compensate.
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I downvoted you for the ludicrous statement that middle-class is $200k in household income, especially in a mid-to-small-size city. Wages have not been keeping up with costs or you might have a point.
I think people are misinterpreting my opinion of what middle class should be and the realities of what the middle class has become.
Earlier quoted context omitted.
This is a view that will lead to a highly dysfunctional society. First off, you are dismissive of the issue with that bit of exaggeration. It is not as if this group wants all the good things in life that only a tech salary afford. Perhaps a dignified life would be sufficient. You also place NYC, SF, Boston, DC, etc. into a category of city that is naturally not available to the middle class. Is NYC a luxury like a 3…
I live in NYC. I live a reasonably fancy pants lifestyle—have an apartment in a nice neighborhood with a doorman, eat out a few times a week, go to bars a few times a month, etc. I spent under $34,000 in 2016. $24,000 of that was for my rent, which is admittedly ridiculous. But I think with a little financial awareness, NYC can be affordable to the middle class.
I'm a founder bootstrapping a startup, so at the moment both my income and my assets are very well short of middle class. Nonetheless, I can afford to live in London Zone 2 -- a ten-minute walk away from Tower Bridge -- because I'm happy to live communally with a handful of excellent flatmates. There's nothing wrong with this arrangement, and I think it's an arrangement that will only grow in the future. I'm seeing t…
The poor and unemployed are also being priced out of London with the rise in rent and gentrification. It's a bit sad when people are priced out of the area that they grew up in. I do appreciate that this problem is not confined to London, but in some ways London is a more extreme city than anywhere else in the UK (extreme wealth and poverty side by side). This rise in rents has also made it difficult for generation/s…
This has long been a dynamic in many large cities though and only in part because of housing costs. Of the significant number of classmates in my MBA program who moved to Manhattan for jobs after graduation, only a handful remained in the city once they got married and had children. Many of those could have remained in Manhattan if they made the inevitable compromises--and there will always be trade-offs city vs. suburbs--but didn't choose to do so.
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Middle class in a small to mid size city is $200k in annual household income. A family of three should have no problem in 1200sqft. Two kids is excessive, but if you do have two kids you'd be fine in 1500sqft.
$200k is the 94th percentile of income.
Perhaps another way of thinking about the situation, is not that the middle class can't afford traditional middle class amenities, but that the proportion of people who can afford those amenities is shrinking.
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It's not even true of NYC; it's true of Manhattan and Brooklyn. Is it true of LA? That also sounds wrong to me.
Our rent went up 7% this year in LA, but our income didn't. The writing is on the wall I think.
The problem could be lessened if NIMBY's would stop trying to dictate how property they don't own should be used (that is, we allow construction) and if we'd stop subsidizing people who can't even marginally afford to live there. I figure if we'd eliminate the latter, we'd take care of a lot of the former. In NYC, we have recently seen rents reduce due to new housing supply coming on the market.