This is only part of the problem - and a small part of the problem at that. The real problem as always is zoning. Houses cost roughly the same on a $/sqft basis, adjusted for inflation, as they did in the 1970s. They're more expensive now because outside of town they're twice as big on average [1] - in part due to zoning rules. In town, zoning rules preclude densification necessary for supply to meet demand [2]. And,…
Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) They can make way more money catering to the people who can “afford” to build a $500k home, and people who want a very custom design and lots of space. On the renting end, “luxury” apartments will make more money than really basic cheap unit…
We're seeing a massive demographic shift to single person households all across the first world countries from Canada to Korea. But for some reason the housing market is still geared towards families.
> If the real problem was always zoning, wouldn't dense cities like NYC and Shanghai be cheaper than average, not way over average? It's not about supply by itself, it's supply vs demand. Big cities have big populations and economies, which means a lot of demand. But as far as zoning goes, note that like other metros, NYC has actually effectively downzoned areas over time; in fact, a huge proportion of buildings ther…
NYC housing has pushed outwards into Queens and the Bronx, manhattan is less populated these days because it lacks full time residents (the apartments are still sold, but their owners list upstate/Connecticut/long island properties as their permanent addresses, and they have many less occupants in them even when full, not like the turn of the century when more than a few people were crammed into small apartments). >…
Libertarians have effectively zero say in US politics generally. They have blogs. Trump and Bush Jnr couldn't care less about Libertarians.
However, the place with the lack of Zoning rules that appeals most to Libertarians, Houston, is doing pretty well.
Houston has seen an increase in population from 3.8M in 2000 to 6.4 M in 2020 and has a median house price of $285K.
Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) They can make way more money catering to the people who can “afford” to build a $500k home, and people who want a very custom design and lots of space. On the renting end, “luxury” apartments will make more money than really basic cheap unit…
We're seeing a massive demographic shift to single person households all across the first world countries from Canada to Korea. But for some reason the housing market is still geared towards families.
Households with two or more incomes are more likely to be able to afford real estate than single-income households - both in absolute income levels as well as in economic crisis where it is less likely all family is losing their all of their income simultaneously than a single person..
" land, trees, and nice quality living." are mutually exclusive, High-Density housing is terrible and I NEVER want to live in a highly dense urban settings. My home in the suburbs with 1/2 acre lots is FAR FAR FAR too dense for me... I want less density than that, but newer subdivisions are dropping to 1/4 or 1/5 acre lots, it is terrible
One comment on this is that less dense areas make it very hard to build infrastructure. For example, if there are 10 families living on a mile stretch of road, think of how much it costs to build a mile of road, along with (possibly) water and sewer there. And then the annual maintenance cost. And then the other road networks require to connect that one road, etc. Those 10 families don’t pay nearly enough in taxes to…
>>Those 10 families don’t pay nearly enough in taxes to cover the cost of infrastructure maintenance.
I dont think you can objectively say that is true given that road maintenance is one of the least costly things a government does, and the less densely p;populated the less maintenance is done to that road sometimes none at all
That further assumes that the road in those areas is maintained by the government this is also not universally true, there are plenty of housing additions that have HOA's where the HOA is responsible for the road maintenance
Also in almost 100% of cases the developer creating the subdivision is responsible for the infrastructure costs to build said subdivision and also often has to pay to improve infrastructure leading into the new subdivision
This is a poor analogy. People rely on cars way differently then they rely on housing. If the only car you could buy was a Lexus, you might stretch you budged, take out a big loan and buy one, or you might simply not buy a car, get a bicycle instead, take the train, a cab, or pay a coworker to carpool. Housing doesn’t give you this option. If you don’t want to be homeless you may be able to rent, but that is pretty e…
It seems to me like your list has analogs in housing without squinting too hard: spend more of your budget on housing, get a mortgage (big loan and buy one), get a smaller place (bicycle), rent a place (train), or move in with roommates (carpool).
So many landlords have taken old homes and converted them into single apartments, raising the cost without creating any value. I would say destroying something of intangible value as well. That trend has definitely driven the cost of housing up.
Part of the problem with the first item you mentioned is that developers don’t really want to build cheap housing (I guess this is an assumption, but it makes sense financially.) They can make way more money catering to the people who can “afford” to build a $500k home, and people who want a very custom design and lots of space. On the renting end, “luxury” apartments will make more money than really basic cheap unit…
It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Any new stock you add increases supply, which leads to lower prices across the board. [edit] and btw, I think builders aren't tripping over their shoelaces to service the low end of the market because they know the city is so aggressively capping how much th…
I hear this repeated a lot. In practice, at least in the cities I've lived in, I've only seen housing go downmarket when there's an explicit exodus. The reason is that housing is built for a specific living space size. Los Angeles has so many single family houses that it's impossible to cater to people downmarket...unless houses are torn down and multi-unit housing is built. You could rip those down and build upscale, large apartments, but I feel like I see them sitting vacant instead of moving downmarket. The bust sucks for everyone and the boom (gentrification) sucks for the less well off.
Maybe we're saying the same thing, but instead of gradually reaching a equilibrium like you're describing I see a dramatic boom bust cycle--both are held back by lack of building.
So, I’m 36, and I promise you don’t want a deep recession. Cheap housing doesn’t matter if you don’t have a job. We dodged a freaking bullet economically with COVID. We recovered quickly. Heck, even in 2008 we did better than the countries that tried fiscal or monetary austerity. And yeah, the real enemy is zoning. It’s fun to blame Blackrock, and they deserve it, but it’s regular homeowners trying to restrict more h…
Hello fellow 36 year old! I think graduating into the 2008 mess gives us peculiar point of view. Two years older, we might have already had burgeoning careers. Two years younger, we might have avoided it altogether. I remember so much impending doom from those years. Pretty different than the current sentiment.
2002 here got into the market right after the 2000 bubble and the second Irak war… my lessons learned since has been to travel and go where the market is better.
Why don't you move to a cheaper place/smaller city? I don't understand why there are some many homeless people in big cities (i.e NYC). If people would just move to cheaper areas/cities the whole issue of housing would be fixed.
Because there are no jobs there. Yes remote might fix that, eventually. But I strongly doubt that, especially as humans are social animals.[1] However The UK is a more extreme version of this. People move to london because it has the most concentration of high paying jobs, and as a side effect culture (what that is I leave up to you. I don't just mean music, cinema and posh people shit.) Now, I could move back to bum…
There is another factor when it comes to moving: people don't necessarily want to move away from their families and friends. It's becoming increasingly common for families to be spread apart which is really a shame because it makes having children way more difficult (your parents will often gladly give you free "childcare" and it will make them happier too). I also suspect mental health problems are more prevalent in people who don't really have a "home". I've met so many people highly educated people in tech and academia who are essentially vagrants and they are often deeply unhappy at not being able to maintain relationships.
The centralisation of computer related jobs in the UK is sad. I had to move to Cambridge as it seems to be the only option that wasn't too far away and wasn't London. House prices are ridiculously inflated here and you don't even really get anything for your money. All the "culture" here is posh people shit (ie. only for Cambridge University people) or just regular stuff for the plebs that you can find anywhere. I'd have much rather moved somewhere like Bristol, but there just doesn't seem to be enough work there any more.
The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…
There is another option: The government could buy/build/offer public housing as an alternative to the free market. It was done in the past and in other countries and I see no reason not to do it now. The way I see it (and the way you put it) the free market has failed to provide housing to people, to an extend that there is no free market solution going forward. If the government (federal/state/county/municipal/etc.)…
Oh well, let's see it from a different perspective, then everything would be much simpler and clearer. The government can actually make housing a lot cheaper but why would it do so?
Just take a look at the budget sheets, you will find out that the government is one of biggest if it's not the biggest one of the beneficiaries from the property boom. By making housing more expensive, it can collect more land/property taxes. If it cannot hike the tax rates easily, the evaluation hikes anyway. By printing more money, it dilutes its liabilities. Almost all the governments have been printing money for decades now, but they claimed there were not enough inflations, really? There seemed to be no severe inflation simply because of the methods used to calculate the inflation rates were biased. Indeed groceries' prices did not raise much, but how about the assets and/or properties? The economy is a dynamic system and can compensate by reducing non-essential expenditures to maintain essentials. But doesn't matter how flexible a system is, it still has a limit which no one really knows what it would be. We are pretty close to a tipping point if we are not already at it. The reason is pretty simple, any system with only positive feedback, doesn't matter how small the positive feedback is, is eventually going to crash as it requires more and more resource as input so that it can maintain the output. When it hits the hard limit, boom...
The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…
I agree your generation is pretty f-ed (even here in "socialist" Netherlands) and I hope they will raise taxes on my generation until something good can happen for yours. At least here they are really cracking down on my generation owning multiple homes and renting them to yours for a super high price, among other things. That said, your generation is digital native, you don't need to live in an expensive city, you c…
>your generation is digital native, you don't need to live in an expensive city
Which is what gets said almost routinely, yet companies are still calling employees back to the office and we're not centralized enough to fight this without some heavy repercussions. Or worse, the majority just doesn't care enough to fight it and continues to invest into this ratrace.
This is even worse considering half these companies love to market their environmental campaigns, social responsibility and whatever, and then they conveniently forget or sidestep the obvious solution.