Maybe treating housing as an investment was a mistake • Hacker News Board

Re: Maybe treating housing as an investment was a mistake

#481

Post by Analemma_ » Mon, Mar 06, 2023, 6:42 PM UTC

gknapp wrote: post #435

photon12 wrote: post #6

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…

I know this is anecdotal, but whenever I hear these stories, I'm curious about the details. A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. Finding apartments off Broadway in Cap Hill, I can see that studios, though relatively expensive, range around $1.5-2k a month. An income tax calculator estimates about a 22% total tax bracket and a monthly adjusted…

> A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year.

This doesn't sound right to me. Maybe it's true for the very fancy quasi-Michelin places like Canlis or Shiro's, but for a nice-but-average gastropub in Cap Hill it's probably much less.

Re: Maybe treating housing as an investment was a mistake

#482

Post by RHSeeger » Mon, Mar 06, 2023, 6:42 PM UTC

judge2020 wrote: post #461

gknapp wrote: post #435

Earlier quoted context omitted.

I know this is anecdotal, but whenever I hear these stories, I'm curious about the details. A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. Finding apartments off Broadway in Cap Hill, I can see that studios, though relatively expensive, range around $1.5-2k a month. An income tax calculator estimates about a 22% total tax bracket and a monthly adjusted…

It also matters where and how far you are from things. Walkability is a big draw, so if you're within a mile of a major district with tons of food, entertainment, and culture, chances are any well-kept apartment building will raise their prices to account for that (and account for you not having a monthly car payment or auto insurance payment), and if this chef is within a few blocks of their work, it's not hard to b…

> if you're within a mile of a major district with tons of food, entertainment, and culture

If you're within a mile of _that_, it seems reasonable to define the housing in that area as "prime" and expect it to cost a lot more than further away. The fact that rents for that housing has a cost that is prohibitive for the vast majority of people doesn't seem odd to me.

Re: Maybe treating housing as an investment was a mistake

#483

Post by JohnFen » Mon, Mar 06, 2023, 6:42 PM UTC

gknapp wrote: post #435

photon12 wrote: post #6

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…

I know this is anecdotal, but whenever I hear these stories, I'm curious about the details. A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. Finding apartments off Broadway in Cap Hill, I can see that studios, though relatively expensive, range around $1.5-2k a month. An income tax calculator estimates about a 22% total tax bracket and a monthly adjusted…

> I can see that studios, though relatively expensive, range around $1.5-2k a month.

Is that all? That's crazy cheap by the standards of my area. Where I live (a smallish city in western US), the cheapest housing you can find, in the least desirable part of town, starts at $1200/mo.

Re: Maybe treating housing as an investment was a mistake

#484

Post by nwah1 » Mon, Mar 06, 2023, 6:42 PM UTC

This is why a Land Value Tax is so essential.

Re: Maybe treating housing as an investment was a mistake

#485

Post by t-writescode » Mon, Mar 06, 2023, 6:43 PM UTC

judge2020 wrote: post #475

Robotbeat wrote: post #442

Earlier quoted context omitted.

“House poor” was typically having to pay at least 25% of your take-home income on housing.

"was"? When? Federal DTI maximum for mortgages is 45% with a good credit score and/or cash reserves. For apartment complexes, they typically won't lease, or will require a bigger deposit, if your gross monthly income isn't 3x the rent (which typically means it's 40%+ of your net income). If 25% 'was' house poor, then at least 90% of today's mortgage-holding and rent-paying Americans are house poor.

Yes. Correct.

Re: Maybe treating housing as an investment was a mistake

#486

Post by triceratops » Mon, Mar 06, 2023, 6:43 PM UTC

jb12 wrote: post #158

lalos wrote: post #116

Easily fixed with a tax system: 1) first home tax-free - the address you submit your yearly taxes on. Incentivize people to own at least one home. 2) second property you pay taxes for both homes now - no more tax free benefit since you are able to afford more than one place. 3) more than 2 properties you pay taxes for all of them times some factor 0.05*N houses. Fudge around with the factor to allow more supply for a…

I buy one house, my wife buys one house, we set up one trust each for two of our kids to own one house, we get four houses tax free

Good thing legislators will never think of that if they ever make a law, in good faith, to tax multiple property ownership. /s

Re: Maybe treating housing as an investment was a mistake

#487

Post by anigbrowl » Mon, Mar 06, 2023, 6:43 PM UTC

nineplay wrote: post #268

photon12 wrote: post #6

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…

People aren't paid by how hard they work, they're paid by how much money they generate and how hard they are to replace. A head chef might be hard to replace but popular bars and restaurants are not, as we saw during Covid. They have often been replaced by people deciding to save money and eat at home. Your cognitive dissonance isn't unusual but I think it does a disservice to our ability to have productive discussio…

You ignored the information about the restaurant's popularity, which indicates that the gp took demand for teh chef's services into account.

it starts and ends with raw numbers

No it doesn't. If that were true markets would be reliably self-correcting and market failures would never occur, rent seeking wouldn't be profitable and so on. In reality there are variations in elasticity of demand and supply, regulatory issues, and economic network phenomena like preferential attachment, all of which substantially complicate the picture.

Re: Maybe treating housing as an investment was a mistake

#488

Post by mywittyname » Mon, Mar 06, 2023, 6:43 PM UTC

davidw wrote: post #368

lotsofpulp wrote: post #325

Earlier quoted context omitted.

There is lots of boring housing in the US. It is not going to be in the Willamette Valley in Oregon. Just like houses in the Alps in Italy versus less desirable places in Italy.

"Just go somewhere else" is causing even the 'boring' places to have problems: https://www.nytimes.com/2022/02/20/business/economy/spokane-... We need some more fundamental reforms.

Such as what?

The merging of Seattle and Tacoma was inevitable. The same thing has happened to a lot of cities that are separate by <1hr commutes via highways.

Re: Maybe treating housing as an investment was a mistake

#489

Post by palotasb » Mon, Mar 06, 2023, 6:43 PM UTC

One thing I haven't understood yet: After I've bought a house to live in, why does it matter for me whether housing prices go up? Does it matter even if my $X house is worth $3X ten years from now? I assume that I must live somewhere, and any any money I'd earn selling the house, I'd lose buying a new one.

Re: Maybe treating housing as an investment was a mistake

#490

Post by carlosjobim » Mon, Mar 06, 2023, 6:43 PM UTC

dheera wrote: post #54

photon12 wrote: post #6

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…

[flagged]

You are of course completely right, even if people are downvoting you.

Remember that one of the strongest instincts that have been instilled into the modern population is the concept of ownership of land and of real estate, where the people who actually built the real estate are long dead. That's why you will find the fucking insane belief among your fellow man that a person who labours has a duty to pay taxes on his wages. His life is not sacred, while the ownership of property is sacred.