161–170 of 257 posts
Because by definition rich means “can buy house”, and poor means “no choice but to rent”. What sort of rich person rents a house, except whilst between selling old and new? It’s a strange question to ask .... who doesn’t see this as self evident?
The kind that reads Robert Schiller and says “why would I want to concentrate my assets in a non productive asset class with high transactional costs?”
While the article is interesting, there is one dynamic it missed: tech debt. Starting around 1975, housing supply stopped keeping up with the growth of housing demand. It picked back up fifteen years later, around 1990: https://www.brookings.edu/research/the-goldilocks-problem-of... (But that is on a national level: in the West, in comparison, housing growth hasn't been sufficient to house the new households formed a…
> Since many cities currently lack the recently-aging housing that would normally be filtering down market right now Huh.... in the UK house prices go up for older houses. You'd pay a premium to get an interwar house, or a 19th century house. Do people not like old houses in the US? They're usually better built, with more character, built on more land, in my experience.
Prices for older homes in more historic cities are high, even in the USA. But that's because commuting in Boston or DC is a fucking nightmare and most new development is occurring pretty far from the city centers. (though, not nearly to the degree of London)
When you get to places like Nashville, it's still possible to build a new home 15 minutes from downtown. Plus, fly-over cities tend to have satellite "office districts"* in the suburbs. So there's really no benefit to dealing with an older house, so, unless they are particularly charming, old homes come at relative discounts to new ones.
* Basically a town, usually off of a major highway, that is made up entirely of large office complexes designed for commuting by car from nearby suburbia.
Earlier quoted context omitted.
Ones good at math and likely to move in a few years? Buying a house has really high transaction costs. ~6% commission, plus more in fees and taxes. And then once you have the house, you've taken on all the maintenance and price risk. That can make sense if you're staying a long time and want the benefits of ownership. But plenty of people with high-flying jobs know that they may move soon enough that the math doesn't…
> Buying a house has really high transaction costs. ~6% commission, plus more in fees and taxes. And then once you have the house, you've taken on all the maintenance and price risk. That can make sense if you're staying a long time and want the benefits of ownership. But plenty of people with high-flying jobs know that they may move soon enough that the math doesn't work out. Interestingly, most of the transaction c…
When you buy, the seller is paying the transaction fees. Where do you think that money comes from? They get it from _you_ the buyer.
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A book that goes deeper into this conversation is The Color of Money: Black Banks and the Racial Wealth Gap Well worth the read, the story had a lot of nuances https://www.goodreads.com/book/show/34758210
That raises a question. How do other impoverished groups escape the poverty trap more quickly? Historically Chinese and other immigrants's needs were served by their own official and unofficial institutions. What can be done to keep dollars within a community to grow wealth within?
These kinds of problems get inherited from generation to generation, even if (a damn big if) the current generation were not directly subjected to any of the original racist cases thereof.
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I know the exact article you mentioned. The real story is actually more nuanced. The guy off course got laid off and could no longer afford the rent. But he racked up rent also because even if he moved earlier, his contract would have made him pay a ton of fines to even get out of it. So he decided to stay.
Yeah it’s not like it was really that much of his fault or anything (though I found it a bit fishy why he couldn’t get another job). Everyone’s mentality up until ~September was “oh just another month or two then everything will be back to normal”. But my point is how could you expect landlords to rent to anyone without a very stable income? They could be out tens of thousands of dollars.
It is a huge risk right now to take on someone that is poor as a renter because of the moratorium. It is completely unsurprising to me that landlords have priced this risk factor in.
The reason why they have pricing power is likely due to the moratorium.
People aren't being evicted so those units aren't going on the market, so supply of rentable units is being artificially suppressed.
When the moratorium expires then renters will be evicted and those units will go back on the market which should drive costs down for everyone else.
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That's horrible to hear, I was only able to get my first apartment in California since I could offer a double deposit. Chicago on the other hand has fantastic housing supply and so many rules on security deposits, most buildings just don't do it. Access to housing permeates every aspect of a culture, people are significantly nicer when they can afford a place to live. Has your friend been able to get out of Californi…
What rules are you referring to regarding security deposits? Are they new? I have had only abusive experiences in Chicago (and, to be fair, Michigan and California) with security deposits.
Anecdotally, landlords are moving/moved to having move-in fees over deposits due to the legal technicalities of handling them properly.
[0] https://www.domu.com/landlord-resources/apartment-lease-form...
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Interestingly, if landlords were allowed to use larger security deposits, some would choose to do this instead of raising the monthly rent. My friend is looking to rent out an ADU, and the first idea was to have a sizable security deposit in order to filter applicants who fully intended on paying rent from those who would be more likely to use the eviction moratorium. But apparently California tightened the rules aro…
How is prepaying rent different from a larger security deposit?
While the article is interesting, there is one dynamic it missed: tech debt. Starting around 1975, housing supply stopped keeping up with the growth of housing demand. It picked back up fifteen years later, around 1990: https://www.brookings.edu/research/the-goldilocks-problem-of... (But that is on a national level: in the West, in comparison, housing growth hasn't been sufficient to house the new households formed a…
> Since many cities currently lack the recently-aging housing that would normally be filtering down market right now Huh.... in the UK house prices go up for older houses. You'd pay a premium to get an interwar house, or a 19th century house. Do people not like old houses in the US? They're usually better built, with more character, built on more land, in my experience.
- Modern homes tend to have large kitchens, bathrooms, and bedrooms, and open common areas. People may prefer this over the misc-rooms approach that's more common in older places.
- Old homes in the US may not have 3-pronged outlets
- Old homes may have faucets that don't stick out far enough to get your hands under. Ones in the UK may have separate faucets for hot and cold. (Is the intent to fill the basin? Rapidly move your hands between the two?) You're more likely to have touchy shower temp controls