The Middle Class Can't Afford to Live in Cities Anymore • Hacker News Board

Re: The Middle Class Can't Afford to Live in Cities Anymore

#171

Post by closeparen » Sat, Dec 31, 2016, 8:03 PM UTC

ctulek wrote: post #155

I have 2 questions: (1) Do not such articles sound like "not everyone can afford a holiday in Hawai"? Or "all my friends have a Mercedes AMG but I don't"? What is the difference? * (2) In Bay Area, the daily commute itself is an obvious sign of overpopulation. How does more housing not make it even worse? * I exclude the gentrification problem which is really affecting the lives of poor and old people as their mobili…

>(1) Do not such articles sound like "not everyone can afford a holiday in Hawai"? Or "all my friends have a Mercedes AMG but I don't"? What is the difference? *

It would be useful, for many reasons, to have a greater proportion of people living in cities. So, it's useful to challenge your implicit assumption that doing so ought to be a luxury.

(2) In Bay Area, the daily commute itself is an obvious sign of overpopulation. How does more housing not make it even worse?

a) The commute is awful because the Bay Area is overpopulated relative to its transit infrastructure, not some natural limit. Or, conversely, the Bay Area's transit infrastructure is under-provisioned relative to its population. Faster, more extensive transit infrastructure can drastically improve the commute at both current and higher population levels.

b) We also underutilize the land close to commute destinations, so everyone (but the residents of single-family homes near downtown) has to travel further than they should. Pedestrians don't need much in the way of infrastructure (just sidewalks, which most of SF already has). Building more residential skyscrapers in the midst of business districts lets more people walk to work in a short time. Building more mid-rises (~6 stories) where there are currently single-family homes gets more people into commute distances that are reasonably quick on a bicycle, motor scooter, or public transit. Density of residents also promotes density of stores, so that i.e. everyone can be a short walk from their grocery store, rather than needing a car to shop, and the reclaimed land previously dedicated to parking can house more people.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#172

Post by rdlecler1 » Sat, Dec 31, 2016, 8:04 PM UTC

dragontamer wrote: post #94

rdlecler1 wrote: post #69

Earlier quoted context omitted.

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.

> In SF housing prices have grown at a compound growth rate of 6% for over 50 years. 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 profit…

Housing is only a good financial investment if supply outstrips demand. The high cost of housing is less a function of low interest rates than zoning laws that restrict new development.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#173

Post by ohwello » Sat, Dec 31, 2016, 8:04 PM UTC

cies wrote: post #162

1024core wrote: post #151

I live in SF, and am flabbergasted at the number of 1- or 2- floor single-family homes. A city the size of SF (46 sq mi) and population (850K+ and growing) simply can't afford so many SFHs. I was in Barcelona recently (yay NIPS!) and Barcelona is smaller than SF (36 sq mi) and has nearly twice the population! Everywhere you see are 6-floor buildings, with the bottom reserved for shops and people living above them. It…

> why can't SF be more like BCN? 1. Earthquakes. 2. City planning policies over the years (or lack thereof).

We know how to safe six-story buildings in SF are a solved prblem, and developers have no problem following building codes when zoning allows them to build 6 stories.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#174

Post by laughfactory » Sat, Dec 31, 2016, 8:05 PM UTC

navbaker wrote: post #66

ryanSrich wrote: post #40

Earlier quoted context omitted.

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.

I'd be interested to hear more about why you think two kids is "excessive".

Me too. Sounds like the typically short-sighted drivel heard from those who think a smaller, or declining, population is a good thing. Usually it comes from a "look at how bad the humans are for our beloved Earth" point of view. But such individuals usually aren't particularly studied in demography or human geography. They don't realize the catastrophic effects of a sub 2.1 (US) population growth rate. I.e., the so called "replacement rate." Currently it stands at 1.9. As this trend accelerates it could theoretically result in massive social fall out. One of the obvious possible by-products is not enough workers to support an aging population: either in providing necessary services, or tax revenue to support things like Medicare and Social Security. Usually, from what I've read, what matters is how stable and gradual the trend is. If it's a slow increase or decline then it's potentially okay. If there are rapid changes, or shocks, it is likely to be much worse because it doesn't allow time for society to adjust to the new reality of things.

Glibly saying that having fewer kids on average is better is awfully bold, verging on ignorant (as would the opposite argument).

It is true that in order to make ends meet in a big city, many families have many fewer kids (one or two, from what I saw in San Diego).

Re: The Middle Class Can't Afford to Live in Cities Anymore

#175

Post by unclebucknasty » Sat, Dec 31, 2016, 8:07 PM UTC

forrestthewoods wrote: post #157

mhneu wrote: post #140

Earlier quoted context omitted.

It's not just housing policy that's gone wrong, it's transit policy. We haven't built good public transit in our cities, and now that cars are filling all available roads, even houses far away from cities are too expensive for how long commutes are. We wish we had a train system in many cities that allowed the middle class to live 40-60 minutes away from their jobs. Ultimately however the main problem is wealth inequ…

Inequality is not the problem. The problem is there are more people who want to live somewhere than there are houses. With perfect equality there would still be more people than houses. The one and only fix is more houses. That's it. Any other solution is just picking winners and losers different ways. But no matter which way you pick the same number of people win and the same number lose.

>The one and only fix is more houses

Unfortunately, it's not that simple. The heart of the problem in many parts of the country is that we fund our schools with property taxes.

Hence, a cycle of better schools and increased demand in concentrated areas, which causes the supply-demand imbalance and price increases. Compounding this is the fact that people in such areas actively block "higher density" housing, which naturally means fewer houses per acre.

Building more houses would help to a limited extent, but the shortage would still exist and resistance is stout.

Hence, the shortage of housing is just a symptom of how we fund education, which is the real problem.

>Inequality is not the problem

Inequality absolutely enters here because if wealth/income were more evenly distributed, then funding for schools would be more evenly distributed, thus alleviating concentrated housing demand in small areas with better schools and driving up prices.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#176

Post by muninn_ » Sat, Dec 31, 2016, 8:07 PM UTC

shostack wrote: post #145

muninn_ wrote: post #31

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.

I'd tweak your statement to be "Those of the middle class who were not lucky enough to have purchased an affordable home yet." There are many who lucked out on timing and now have a nice house at a more previously affordable price. As usual, it is the younger generation that gets left holding the bag.

You can buy affordable houses right now. I have one here where I live. There are plenty on the market.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#177

Post by philipkglass » Sat, Dec 31, 2016, 8:08 PM UTC

alistairSH wrote: post #106

martingoodson wrote: post #49

Earlier quoted context omitted.

For someone living in the UK that sounds like a far off utopia. Government recommendations are about 1000sqft for a family of five . https://www.gov.uk/government/publications/technical-housing...

We have a lot more space in the US. A typical 4-bedroom suburban home is somewhere around 1800sq/ft and, anecdotally, that number has been creeping up. Of course, all the space also has massive drawbacks... car-centric culture, sprawl, long commutes, harder to implement public transit, etc.

Other drawbacks to house size inflation: more space that needs cleaning/maintaining/heating/cooling, higher costs for buyers who want to own a house in a neighborhood but don't need or want to pay for extra space.

In the area I live in -- not even a big city -- you're basically forced to choose house size and house age at the same time. If you want only 1400 SF you're buying an old house with old quirks (asbestos, a history of lead paint, old wiring...) If you want a new house you're buying more square feet and the additional burdens thereof (more space to heat and cool, more space to clean). There's practically no such thing as a new well built small house, or at least none that I could find when I was buying. I ended up in a 1940s house because all the newly built houses were too large for my tastes. And those huge new houses often had huge lawns that needed a riding lawnmower and ridiculous amounts of water (why is everyone landscaping a desert climate like we live in rainy England, argh...)

Is there some weird feedback loop going on? "Our sales indicators show that buyers preferred even-larger new houses this year than last! (Because we didn't give buyers any options to buy smaller new ones.)"

Re: The Middle Class Can't Afford to Live in Cities Anymore

#178

Post by zebraflask » Sat, Dec 31, 2016, 8:11 PM UTC

mixmastamyk wrote: post #55

60654 wrote: post #39

Earlier quoted context omitted.

Exactly. There's also plenty of affordable housing stock in Chicago and LA, as long as you don't expect to live on the lake/ocean, don't expect a big suburban house, etc. That's the thing about big cities, there's usually a huge variety of housing at all price points - with a variety of pros and cons for sure, but the lack of housing at a variety of prices is typically not an issue.

> There's also plenty of affordable housing stock in LA... Hahaha, I suppose if you're willing to live in near skid-row conditions.

Amusing comment. Not quite that dire, but the most affordable SFRs do tend to be in neighborhoods that either have few amenities, or are right on the edge of (or in) neighborhoods where you don't want to lounge outside at night.

Otherwise, there is a glut of condos almost anywhere you look, if you're okay with living in a condo and paying HOA dues every month - which is the problem with condos, the HOA dues can easily take something affordable and push it to the edge of affordability or beyond.

I've been looking recently, speaking from current experience.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#179

Post by mtbcoder » Sat, Dec 31, 2016, 8:13 PM UTC

forrestthewoods wrote: post #157

mhneu wrote: post #140

Earlier quoted context omitted.

It's not just housing policy that's gone wrong, it's transit policy. We haven't built good public transit in our cities, and now that cars are filling all available roads, even houses far away from cities are too expensive for how long commutes are. We wish we had a train system in many cities that allowed the middle class to live 40-60 minutes away from their jobs. Ultimately however the main problem is wealth inequ…

Inequality is not the problem. The problem is there are more people who want to live somewhere than there are houses. With perfect equality there would still be more people than houses. The one and only fix is more houses. That's it. Any other solution is just picking winners and losers different ways. But no matter which way you pick the same number of people win and the same number lose.

The fix is to make more areas desirable to live in by reducing income inequality and stimulating local economies (which in turn creates more desirable locations). Simply saying build "more houses" in clustered cities along the coasts doesn't solve anything in the long run. Cities are in it for the long run.

Re: The Middle Class Can't Afford to Live in Cities Anymore

#180

Post by laughfactory » Sat, Dec 31, 2016, 8:14 PM UTC

alistairSH wrote: post #110

saryant wrote: post #83

Earlier quoted context omitted.

A rule of thumb (admittedly arbitrary) for housing is to keep costs below 30% of gross income. That is why I compared median housing prices against median gross income. If someone making the median income in a city can afford a median house with 21% of their gross income, yes, I deem that "affordable." To go back to my example, the family making $41k net annually is paying $10,800 (ish) annually in mortgage costs. Th…

Honest question... where does the 30% income/housing ratio come from? I always assumed it was pushed by the housing industry to "con" us into more housing than we need.

I tend to agree. The bottom line (and very obvious) is that the more spent in any one budget category, the less available for all other categories--housing included. My wife and I shoot for no more than 20% in order to ensure we can meet our other financial goals. We have paid as high as 46% (in San Diego), which simply wasn't workable.