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Baby boomers are making it harder for millennials to buy homes

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Re: Baby boomers are making it harder for millennials to buy homes

#121

Post by randomdata »

Gibbon1 wrote: post #72
randomdata wrote: post #37

Earlier quoted context omitted.

> if they want to make any real $ need to move to those cities This is the crux of the matter. The market always seeks equilibrium. If there is an income advantage in one location, people will move there, driving up costs in the process, until the point that there is no longer an advantage. Certain cities have held an advantage in earning ability for quite some time and the market is attempting to correct that dispar…

The income advantage is due to concentrated wealth and income inequality. What you see is a few industries and the people that run them receive the bulk of the excess capital. That results in a firehose of money pointed at a couple of cities where the golden industries leaders all live.

But the fact remains that the income advantage only remains an advantage so long as the costs remain low. The expense side of the equation can only rise so high before income becomes zero, or even a negative value. NYC and SV are able to thrive because housing is still cheap, but the market is quickly correcting that fact. At some point, if the trend continues indefinitely, one's income in these cities will leave them with a lower income than someone working at a minimum wage job in a low-cost area. If the income advantage shifts to these other locations, people will follow.

Re: Baby boomers are making it harder for millennials to buy homes

#122

Post by kevinburke »

timthelion wrote: post #64
coolspot wrote: post #61

Earlier quoted context omitted.

Not all cities must be made into overpopulated ant colonies. People love SF as it is, and if you increase density it would be not SF, it would be something else. If you like dense cities - there are plenty of them - LA, SD, NY...

Exactly my thought. If you like sky scrapers, WHY NOT move the startup capital to LA? Is there any real reason it has to be SF?

I don't think it's that people love sky scrapers so much as they are willing to tolerate them in order to avoid paying half their salary in rent every month. In any event, we don't need skyscrapers to solve the housing problem, we need more 5-story buildings, which are currently a pain to push through the Planning Commission and BoS in SF, even along transit corridors.

Re: Baby boomers are making it harder for millennials to buy homes

#123

Post by ghaff »

aaron695 wrote: post #118
ghaff wrote: post #115

Earlier quoted context omitted.

There are some references in the Wikipedia article on Induced Demand. Most of the cited cases deal with heavily trafficked roads being removed and demand decreasing as a result. https://en.wikipedia.org/wiki/Induced_demand

That's it. I find the examples on wiki a little sketchy and some are flat out anecdotal. I do agree it will increase the total traffic as you improve the system but the concept it can ever make it worse or the same in the entire system doesn't make sense. Peoples need to travel by car is not totally fluid. Jobs stay the same and many people catch public transport for reasons other than convenience.

I'm not sure I've heard the claim that adding capacity actually makes traffic worse other things being equal. It's more that, as you say, people will time-shift, take alternate transportation, take a different route, move, change jobs, etc. to keep a commute under a particular time.

It's sort of another version of the "work expands to fill the time allotted to it" maxim.

And if it's not commuting we're talking about, some people will just choose not to drive into a city for dinner, etc. because it's too much of a hassle.

Re: Baby boomers are making it harder for millennials to buy homes

#124

Post by maxsilver »

omegaham wrote: post #50
mythrwy wrote: post #32

Earlier quoted context omitted.

I hear you and apologies for the rant. Down votes are entirely understandable as I don't care for radical sounding rants either. I'm not saying in in the US, nor concretely, but philosophically I think when a person is born they inherit the right to inhabit a piece of earth. You shouldn't arrive in the earth and not be able to sleep on piece of it without paying someone. I guess I feel that land in general belongs to…

> Leave wealth building for bitcoin and Apple stock and companies that make mascara. The flip side of this - people then complain that we have 25 different high-tech varieties of boner pills while the developing world is dealing with antibiotic-resistant infections and malaria. Despite the SV Founder Changing The World rhetoric, most people are in business to get paid. People go where the money is. If you declare tha…

> If you declare that no one should get rich off of bread because it's A Basic Necessity, you're going to find that the bread biz is going to stagnate while endless innovation happens in the Twinkie and tortilla chip biz

This is simply false.

We've declared water A Basic Necessity, such that clean water is piped into everyone's home, by the government, at effectively zero profit.

And yet, there's still over 100 bottled water types and brands, carried at almost every retailer nationwide. There's 6 dozen flavoured water types, there's an entire industry of water pitchers, water purifiers, carbonated water drinks, and much more. Clean Water is now a crazy innovative industry in large part because we made it a covered fundamental human need.

You absolutely can declare housing A Basic Necessity, and it wouldn't hurt any meaningful industries, it wouldn't prevent any innovation, and it would largely improve the finances of most citizens, strengthening the economy at large.

Re: Baby boomers are making it harder for millennials to buy homes

#125

Post by saosebastiao »

jrapdx3 wrote: post #59
saosebastiao wrote: post #47

Earlier quoted context omitted.

If you consider the fact that developers have been building at near peak-Dubai paces in Seattle for salable prices that are much lower than the bay area , I'd say you're worried about nothing of consequence. If you merely let them, they'll build until they can't cover their costs.

I don't have the data at my fingertips, but IIRC Seattle housing prices were historically lower than SF, but higher than Portland OR. I think that could make it hard to assess the effects of bringing more housing on line in Seattle, at least comparing to SF would be misleading. However the history of housing costs in Seattle might be informative. > If you merely let them, they'll build until they can't cover their co…

> I don't have the data at my fingertips, but IIRC Seattle housing prices were historically lower than SF, but higher than Portland OR. I think that could make it hard to assess the effects of bringing more housing on line in Seattle, at least comparing to SF would be misleading. However the history of housing costs in Seattle might be informative.

Not sure why you think historical prices matter one bit. Seattle is proof that you don't need San Francisco prices to continue building. Developers from LA and SF can and regularly do build in Seattle where prices are lower but regulation is less obtuse, and many times they end up using Californian general contractors who prefer higher utilization over higher rates with more downtime.

> The problem in the building industry is that financial commitments are made years in advance, meaning even if things are in a slump, units may be built anyway because the project was on track to happen well before the slump came about. It's also occurred that units are constructed just before a slump hits and as a result the completed units sit empty, the developer goes bankrupt, etc. Overbuilding can and does happen and it can take many years, even decades for a property to finally break even.

Overbuilding may occur, but units don't sit empty. They always end up renting out, until the rent is so low that they can't cover variable costs like maintenance. If the rents aren't high enough to cover debt servicing, they'll still rent out...the owner will go bankrupt, they'll lose the property and the lender will take a loss, but the property will be sold by the courts at a price where someone can make money off the current rents.

Despite what you may think, developers will continue developing if prices move downward. Downward price movements primarily impact landowners and lenders, not developers. If developers see downward price movements, they start bidding less on land.

Re: Baby boomers are making it harder for millennials to buy homes

#126

Post by corvallis »

falsedan wrote: post #93
chii wrote: post #91

Earlier quoted context omitted.

> forcing existing, lower-income residents out to the periphery of the Bay Area. but this should drive those who receive low income out of state, and thus lower the amount of worker available for low-income jobs, which in turn should drive up the wage?

California is big, and moving costs can trap people in places they can barely afford. Fronting up the $600 to rent a U-Haul & take it to Nebraska can be a mammoth challenge. Plus, they need a job at the other end. It's more likely that they would move to unregulated housing or live on the streets.

Please check your comment about BART schedules. BART guarantees a ride to your destination from any point in the system if you get into a station by midnight. The last train from Embarcadero station to Pittsburg leaves Embarcadero at 12:26 AM.

Re: Baby boomers are making it harder for millennials to buy homes

#127

Post by mcv »

mattmanser wrote: post #89
mcv wrote: post #83

Earlier quoted context omitted.

Does that count as near-Dubai speed? Amsterdam is building 50,000 appartments over the next 10 years, and that's considered not enough. But there's simply no space to grow here. These are the last few empty corners of the city being filled in.

But 50,000 / 10 = 5,000 per year, half the rate?

Yeah, but still same order of magnitude. I would have expected near-Dubai speed to be more than that.

Though admittedly Seattle is smaller than Amsterdam. I expected it to be bigger (because Amsterdam isn't all that big).

Re: Baby boomers are making it harder for millennials to buy homes

#128

Post by falsedan »

corvallis wrote: post #126
falsedan wrote: post #93

Earlier quoted context omitted.

California is big, and moving costs can trap people in places they can barely afford. Fronting up the $600 to rent a U-Haul & take it to Nebraska can be a mammoth challenge. Plus, they need a job at the other end. It's more likely that they would move to unregulated housing or live on the streets.

Please check your comment about BART schedules. BART guarantees a ride to your destination from any point in the system if you get into a station by midnight. The last train from Embarcadero station to Pittsburg leaves Embarcadero at 12:26 AM.

I don't fancy getting home at 2am.

Re: Baby boomers are making it harder for millennials to buy homes

#129

Post by pascalxus »

kevinburke wrote: post #23

I'm going to sound like a broken record here but there are policy and other decisions being made in the Bay Area that are restricting the housing supply and driving up the price of existing housing. You don't have to be a bystander in this process, you can help lobby for more supply. A list of propositions and legislation to support (SF, Brisbane, Mountain View, the CA state legislature) can be found here: https://ne…

Thank you for bringing this up. Don't be afraid to sound like a broken record, there are so many uninformed voters out there. We need the repetition.

But, one thing we have to be careful of: If you place constraints on builders: such as requiring affordable housing, it reduces the amount of supply thus making the problem worse for everyone.

What we really need, is more supply. Lots of deregulation to encourage as much building as we can possibly get

Re: Baby boomers are making it harder for millennials to buy homes

#130

Post by pascalxus »

jrapdx3 wrote: post #36
kevinburke wrote: post #23

I'm going to sound like a broken record here but there are policy and other decisions being made in the Bay Area that are restricting the housing supply and driving up the price of existing housing. You don't have to be a bystander in this process, you can help lobby for more supply. A list of propositions and legislation to support (SF, Brisbane, Mountain View, the CA state legislature) can be found here: https://ne…

The question I have has several parts, but fundamentally I wonder if the housing supply could even be increased enough to materially affect housing prices. Not saying that the housing supply isn't excessively restricted, but how much can restrictions be decreased and how much difference would it make? An analogy is building freeways to relieve traffic congestion. What regularly happens is that additional roads or add…

CA has been constricting the supply for the last 30 years, so it's not going to be fixed overnight! I guess it would take 10+ years of non-stop building to get housing anywhere close to the nationwide level, just a wild guess.
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