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Maybe treating housing as an investment was a mistake

goodreason.substack.com

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Re: Maybe treating housing as an investment was a mistake

#591

Post by djmips »

ericmay wrote: post #501
lukeschlather wrote: post #470

Earlier quoted context omitted.

In a well-functioning city, a head chef should be able to comfortably afford to rent a 2-3 bedroom apartment within walking distance of their restaurant. They should not be spending 1/3rd of their income and only getting a studio out of it.

You can, just move out of Capitol Hill in Seattle which is one of the most desirable areas in one of the most desirable cities located in one of the most desirable geographies in the wealthiest country on earth. This place looks nice! https://www.zillow.com/homedetails/2742-Lincoln-St-NE-Minnea...

But then you'd have to live in Minneapolis?

Re: Maybe treating housing as an investment was a mistake

#592

Post by zjp »

eddsh1994 wrote: post #575
angarg12 wrote: post #551

Earlier quoted context omitted.

I'm a new immigrant to the US, and housing is my single biggest worry together with my work visa. Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder. Even old, basic…

Are you in the Bay Area? If so I saw an ad in SF for condos/1 bed flats starting at high $300k on the weekend. With recent zoning changes it might get easier for you soon.

Those condos are likely to be reserved as Below Market Rate housing stock for households making somewhere around the area median income (who, honestly, still can't afford them). You get the same incentive structure that the medicaid gap created.

It's very frustrating to be /in/ the gap. Bay Area homeowners act like the apocalypse is coming if increased supply means poors who /only/ make 100k are allowed to buy next to them. The horror. The humanity.

Re: Maybe treating housing as an investment was a mistake

#593

Post by davidw »

majani wrote: post #547
davidw wrote: post #341

Earlier quoted context omitted.

Before you go smashing things, you could do some of the basics like electing pro-housing people, show up at public hearings to say 'yes!' to housing, write letters to the editor and all that kind of thing. It's pretty effective.

This is one of those areas where the "proper channels" are heavily compromised though

I've been having success with these things locally. We don't always win, but we have made a lot of progress.

Re: Maybe treating housing as an investment was a mistake

#594

Post by RHSeeger »

DanTheManPR wrote: post #310
jedberg wrote: post #195

Earlier quoted context omitted.

That sort of makes sense. When you own a property, you have to maintain it and pay property taxes. When you add all that up, you either need a lot more than rent, or you need the mortgage to be lower than rent so you can afford those other expenses.

But it's not as though property taxes and ongoing maintenance costs don't exist for apartments. The income the owner receives from the rents has to cover all of that.

Well, yes and no. If you own and the roof needs replacing, you need to have that money on hand (or be able to take out another loan to cover it, which isn't always possible). If you rent, you don't.

Re: Maybe treating housing as an investment was a mistake

#596

Post by ericmay »

amyamyamy2 wrote: post #556
ericmay wrote: post #501

Earlier quoted context omitted.

You can, just move out of Capitol Hill in Seattle which is one of the most desirable areas in one of the most desirable cities located in one of the most desirable geographies in the wealthiest country on earth. This place looks nice! https://www.zillow.com/homedetails/2742-Lincoln-St-NE-Minnea...

Most people are not willing to move away from all of their family, friends, and career. Software engineers are uniquely privileged in that we can work remotely, many, many other careers cannot do that

Remote isn't available for all tech employees (software or otherwise) and historically we have advocated that people move to places like the Bay Area to obtain corresponding higher wages (I have to move to California and uproot all of my friends, family, and career ??). YCombinator itself famously required(s) entrepreneurs to uproot their friends, family, and career to move to the Bay Area.

At the end of the day people can make the right mix of economic and sociological choices that they want. But what's not going to happen is everyone in Seattle gets a 2-3 bedroom house and you can make peace with that fact of life or continue to be frustrated.

Re: Maybe treating housing as an investment was a mistake

#597

Post by bmitc »

sbarre wrote: post #449
bmitc wrote: post #236

Earlier quoted context omitted.

I agree with that. Investment homes, second or maybe just third homes, etc. should be taxed rather extremely aggressively.

The problem with this approach is the impact it has on areas that have availability problems, and where there is more demand than supply for housing (think big cities that are experiencing condo booms). In those high-demand areas, owners will simply pass those tax costs down to their tenants, and the rents prices will go up, leading to even less affordability.

In my mind, I was separating out homes for rent from investment and second/third/so-on homes. Although, it seems tough to separate those out since investment homes and non-primary homes are often rented out, although sometimes not permanently or continuously as homes specifically treated as rental properties. It needs some more thought, but I don't like the no holds barred approach that takes place right now. I in general don't like homes being treated as a business and investments, and I think it should be discouraged. Apartment complexes are a little different. Even there though, renters need better protection. One of my friend's rent just increased by 25%. It's ridiculous.

Re: Maybe treating housing as an investment was a mistake

#598

Post by sokoloff »

ghaff wrote: post #532
mxkdodi wrote: post #273

Earlier quoted context omitted.

It makes absolute sense, because maintenance costs are non-negligible. I just paid a fifteen thousand dollar plumbing bill. Since rent would include the ability to call the landlord to make him fix that, I sure would expect rent to be higher for the same place than my mortgage is. Last year I spent twenty grand on a new roof. What's next? Idk, but that's why my mortgage isn't half of my salary. If it was rent, these…

Depending on what you include I figure property taxes, insurance, ongoing maintenance of my house and property are a good $1K/month (obviously with a fair bit of lumpiness for large projects). Some things you can postpone and some things you can trade money for your time & effort but it's still a non-trivial amount.

I'd love if all that was $1K/mo total. My property taxes alone are $1001/mo (for 2021; they went up a little bit last year, but I could quickly look up 2021 online).

Re: Maybe treating housing as an investment was a mistake

#599

Post by NineStarPoint »

treis wrote: post #447
NineStarPoint wrote: post #363

Earlier quoted context omitted.

It’s worth noting that these stats don’t show a difference in moving between cities, but between residences. And if you do look at stats showing moves between counties, those have been fairly flat going back to at least 2005 (I couldn’t find data going back farther). Which is to say that it seems people find less reason to move from one house to another where they already live than they used to. I expect this is beca…

I haven't been able to find great statistics, but you can look at state populations to get an idea. California, as an example, went from ~5 million to ~30 million in a few decades post WWII.

California is a pretty substantial outlier there, not exactly representative of the country as a whole, and even then doesn’t actually need a super high inter-state immigration rate to get those numbers. It’s worth noting that the entire country grew 2X larger during those 5 decades. So we’re looking at a 3X increase compared to the average. Which is a lot! But even ignoring the effect of people moving there in the early decades themselves having children that speed up the process…to get a 3X growth over 50 years requires an annual immigration rate of 2.2%. Which would be in 1980, .29% of the US’s population moving to California.

(And as a side note, the above numbers are ignoring immigration. In 1980 California was 15% foreign born people, about 2.5X times the national average. And people who immigrated in 1940s-1960s would themselves have children that lowered the needed inter-state moves even more)

Point is, 5 decades is a long time, only takes a small percent a year to compound. California, by far the most popular state to move to in the country historically, still doesn’t need that high a percent change to get from 5 to 30 million.

Re: Maybe treating housing as an investment was a mistake

#600

Post by riku_iki »

rcme wrote: post #157
mjr00 wrote: post #10

> While the rich are more likely to own homes, tons of middle class and poor people also bought homes and planned their lives under the assumption that housing prices would go up. Tanking housing prices would destroy their trust in the system that they bet everything on. This is pretty much the crux of it. High housing prices could be "fixed" almost overnight, but for almost every citizen of the first world, their ho…

> This is pretty much the crux of it. High housing prices could be "fixed" almost overnight This is a crazy thing to state with almost no justification. How could housing prices be fixed overnight? Please don't say "zoning changes." Plenty of places without zoning issues have really expensive real estate.

high enough property tax.
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