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What broke Sweden? Real estate bust exposes big divide

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Re: What broke Sweden? Real estate bust exposes big divide

#611

Post by Aeolun »

b112 wrote: post #238
Aeolun wrote: post #198

Earlier quoted context omitted.

In the 90s I didn’t have a house, I was in diapers. In my experience growing up, everyone I knew could afford to buy a house on a single salary when 28-30, so that’s what I expect for myself. Anything other than that is a regression.

So, you're saying that when interest rates first dropped mega-low, people could afford a house? But... that's what caused the current problem, some say. Rates too low, for a decade, causing a housing bubble. It sounds to me like what you recall, was an aberration. EDIT: Don't get me wrong. I think the bar to home ownership should be lower. But at the same time, I think it hasn't been low, for 50+ years.

In 1995, the average income in the Netherlands was €33000, and an average house (not any house, anecdotally my parents bought it for less) could be bought for €93750 at an interest rate of 7.71%.

3 times annual salary seems reasonsble to me.

Re: What broke Sweden? Real estate bust exposes big divide

#612

Post by bobolino123 »

salzig wrote: post #481
watrami wrote: post #103

It seems like it's the same story everywhere I look. Housing is the main driver of inequality and there is little change happening. We have the same problem here in Germany. I am currently living in Munich to finish my CS Master's at TUM and build a startup, and it is absolutely impossible to find anything remotely affordable. I am supported by two startup scholarships and make enough to get by, but no landlord even…

IMHO Germany is killing its social stability and its future by having this situation right now. And I‘m afraid this will bring more votes to AFD and similar rightwing parties. Kinda similar to a century ago.

Already killed its future tbh but yeah it can be worse

Re: What broke Sweden? Real estate bust exposes big divide

#613

Post by Aeolun »

EVa5I7bHFq9mnYK wrote: post #386
Aeolun wrote: post #184

Earlier quoted context omitted.

The Netherlands has a variation of this for newly built properties. The prices for new properties are controlled, but the prices for second hand properties are not. If you win the lottery, you get to buy a newly built house for like €250k, which will them immediately jump in price to €450k, because that’s the price you can now sell it for. It’s completely bonkers…

If it's really a fair lottery, seems a better way to distribute a public resource (land) than rich people buying all the land and getting even richer from it.

It’s certainly better than nothing, but it kind of disincentivices people from building a ton of houses when they know they can get only half price from them.

Much better to build a huge flat and rent it out.

Re: What broke Sweden? Real estate bust exposes big divide

#614

Post by bugglebeetle »

xapata wrote: post #412
bugglebeetle wrote: post #25

Earlier quoted context omitted.

Imagine the state did this instead using taxes and eminent domain. Congrats, you’ve invented Vienna, one of the most beautiful cities in the entire world.

I'm not familiar with this program. Could you give me a few keywords to search for, so I can learn about it? > using taxes Is it a tax credit? The key is allowing tenants to invest and get dividends from the portfolio, which they can then use to pay for rent (or whatever they like).

They key is to make housing incredibly affordable, such that it has no real overall impact on people’s wages or upward mobility:

https://www.politico.eu/article/vienna-social-housing-archit...

Re: What broke Sweden? Real estate bust exposes big divide

#615

Post by danaris »

satvikpendem wrote: post #195
OnlineGladiator wrote: post #192

Earlier quoted context omitted.

The simplest solution is a wealth tax. Once you reach a certain amount of wealth, you are taxed for it. So for instance you might be taxed 50% of your wealth above $1 billion, annually. You might be taxed 25% of your wealth above $100 million (up to the next cutoff, so a billion in this hypothetical). You might be taxed 10% of your wealth above $10 million but below the next cutoff, and so on. We could even take this…

What is wealth? How do you define it? How can you tax it? If it's in stocks, what does it mean to tax it? If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company? If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid? It's not as simple as "make it illegal to h…

> What is wealth? How do you define it?

Anything you own with a quantifiable monetary value. Yes, even if that value is not fixed.

> If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company?

Yes.

> If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid?

No. How does that even make sense?

The answers to these questions are easy, people you just don't like them, because they mean that those who have a lot and feel like they "got it fair and square" suddenly have to (gasp) contribute to society rather than hoarding all of that money to themselves. Even though you start to hit massive diminishing returns in terms of effect on your actual lifestyle once you're getting up into the million range, and see barely any effect at all of additional wealth or income once you're past, say, 100 million. It becomes just a dollar-denominated high score, so that you can feel smug about How Great A Businessman You Are, while millions of people starve on the streets unnecessarily.

Re: What broke Sweden? Real estate bust exposes big divide

#616

Post by nickersonm »

rcarr wrote: post #543
jjav wrote: post #340

Earlier quoted context omitted.

> If it doesn't collapse, then society may collapse? But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society. I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's…

> It's always an option to move to a cheaper location! If you’ve got no savings and are trapped in debt, how do you suggest people do this? How are these people managed to scrape together the deposit and moving costs? The people who would need to do this the most are locked out of it. If you don’t have family members to stay with, what you end up with is skyrocketing homeless numbers which seems to be what is happeni…

Sell all your furniture and all but irreplaceable and critical belongings, possibly including selling any cars you may have. Use a few thousand dollars of that money for airfare or gas money and move yourself and minimal belongings to a new location. Stay in a long-term-stay hotel (<$100/day) for a week or two until you can get the cheapest apartment you can find. Slowly repurchase essentials as needed. Done.

Re: What broke Sweden? Real estate bust exposes big divide

#617

Post by jjav »

jdietrich wrote: post #584
jjav wrote: post #340

Earlier quoted context omitted.

> If it doesn't collapse, then society may collapse? But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society. I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's…

But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society. I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's never the most fun solution, but it is a solution. Jo…

> Jobs. Most people don't have the luxury of working fully remotely.

Then you commute. Yes, sacrifices are required but it's not the end of the world (or collapse of society, as GP put it). When I moved to a cheaper place over 20 years ago working remotely wasn't much of a thing so I had to drive 60-90 minutes (occasionally 2 hours). It wasn't great but it was a pragmatic solution that allowed me to have a nice place to live and leftover money to save.

> A lot of people would rather struggle to make rent than raise their kids in a community with high crime, bad schools, poor healthcare, limited prospects and a general atmosphere of despair.

There is a very wide gray area of reasonable places with reasonable prices between the extremes of San Franciso/Manhattan vs. economically depressed areas with "a general atmosphere of despair".

Re: What broke Sweden? Real estate bust exposes big divide

#618

Post by rcarr »

illiarian wrote: post #605
rcarr wrote: post #547

Earlier quoted context omitted.

This is all well and good but are there jobs there that match the persons skillset or would they have to spend most likely 3-6 years retraining?

The question above was "I work remotely and may consider moving there." When you work remotely you may want to move anywhere you want. However, there are other things to consider: https://news.ycombinator.com/item?id=35408256 :)

I missed that, sometimes the threads get long on here!

Re: What broke Sweden? Real estate bust exposes big divide

#619

Post by jjav »

gladiatr72 wrote: post #499
jjav wrote: post #340

Earlier quoted context omitted.

> If it doesn't collapse, then society may collapse? But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society. I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's…

And you stroll into whatever town/city/village with your income that barely meets the cost of living in NYC/SF/LA and destroy that housing market. Your solution is someone else's nightmare.

> And you stroll into whatever town/city/village with your income that barely meets the cost of living in NYC/SF/LA and destroy that housing market.

There's a lot of truth in that.

The ubiquity of remote work has made this much worse. It used to be that one could move to a cheaper area (as I did) but it still had to be within orbiting distance of a source of income.

Remote work broke that constraint which is causing a lot of disruption in very remote areas.

Re: What broke Sweden? Real estate bust exposes big divide

#620

Post by jjav »

hungryforcodes wrote: post #473
Brybry wrote: post #449

Earlier quoted context omitted.

Also the other obvious answer that people have been doing for centuries is multi-generational households. It's not the end of the world to live with your parents (or your partner's). I think we could see a lot of pressure towards that as Western total fertility rate continues to decrease and larger population groups (Millennials) age with fewer or no children to help out. Even a shift towards non-relatives households…

The main reason I got my first hob was to be able to move out. My parents drove me nuts. I've been independent ever since. I'd rather live in a tiny studio with just a mattress than live with them. Also nothing signals undateable more than "I love with my parents".

> Also nothing signals undateable more than "I l[i]ve with my parents".

This is cultural though. In the US that certainly seems very true. In other places (such as where I'm from), living at home with parents until marriage is the normal default.

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