Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

realtor.com

Post reply on HN
Print view View original

131–140 of 550 posts

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#131

Post by lp4v4n »

At this point I honestly think this is a bit by design.

There is a crazy amount of land in the world, but either it's too expensive or you're not allowed to build over it, or a combination of both. Houses have been built for millennia but somehow in the most advanced period of humanity you're supposed to pay hundreds of thousands of dollars for a roof over your head.

I think that low key the ruling class + landlords are not interested that housing be an affordable thing, so the whole system works to create artificial scarcity. How's the population going to be forced to work unpleasant and low paid jobs if not by controlling their access to housing? You have to be too naive if you think that a few minds in your country's parliament haven't thought of this.

If someday economic activity gets automated enough, and the majority of people are not needed anymore for regular jobs, and this populace gets violent with their ruling class, then I think a lot of housing will be built outside of cities, and the supply of houses will no longer be a problem.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#132

Post by littlexsparkee »

api wrote: post #41
ajmurmann wrote: post #18

Earlier quoted context omitted.

Look at real, median household income. It's been going up and up. The things that have gone up in relative cost are housing (because we heavily regulate building it) and premium services like healthcare and education because of Baumol.

Link for the curious: https://en.wikipedia.org/wiki/Baumol_effect Baumol plus zoning and NIMBY driven real estate hyperinflation basically explain the modern economic malaise among especially the young. I’ve also heard this called “in-deflation.” Inflation in everything you need, deflation in everything you make.

so many projects got nerfed by NIMBYs during good economic times and now are infeasible. there's more political will for change now but i'm still skeptical things will change much given the cost of construction in major metros.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#133

Post by win311fwg »

TrackerFF wrote: post #111

Don't live in the US, but we're facing similar problems here in Norway. One main driver is that there's not being built enough new housing. It's a combination of building being too expensive, higher interest rates, etc. So the second-hand/used market is red hot. Renting has become so expensive, that many landlords have exited - so we're likely heading into a really bad crunch in the near future for the renters. I've…

> One main driver is that there's not being built enough new housing.

I recently entertained the idea of building a new house. Not terribly surprising, but worth mentioning that the time and materials to put up the structure was going cost even more than buying a used house. If nobody can afford to buy a less expensive used house then naturally nobody is going to build the much more expensive new house either.

Therein lies the bottleneck.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#134

Post by stego-tech »

I’ve been on the 50/30/20 budgeting rule for a while now, and I agree it’s a healthier perspective for an individual than a “30% gross on rent/housing” arbitrary metric. Housing is one part of a larger bill of necessities you have to pay every month because society dictates these necessities are not rights, alongside food, energy, transportation, insurance, healthcare, and communications. Laying all this out on paper then multiplying by two and accounting for taxes, helped me remain calmer in salary negotiations because I knew not what I thought I was worth, but what I actually needed to survive.

The grim reality is that over-financialization of markets combined with a lack of regulations against predatory practices (like surveillance pricing and algorithmic rent setting) added gasoline to the bonfire that was a fundamental housing shortage brought about chiefly from treating housing itself as an appreciating asset rather than the land housing sits on and taxing accordingly (don’t even get me started on residential property tax schemes popularized by the Baby Boomers and the associated gap between sale price and tax assessed values dictated by law). Growing wages won’t fix this, nor will cutting interest rates. Building more housing is the only way out, but existing homeowners don’t want their assets to decline in value, so that’s generally not happening. Rent control is becoming increasingly popular, and I think it’s a good idea to protect existing renters and force landlords to side with wanna-be homebuyers instead of homeowners by forcing revenue growth through volume creation (new housing) instead of rent hikes.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#136

Post by botanrice »

mlhpdx wrote: post #123
WarmWash wrote: post #67

The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out. Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...

Supply and demand, supply and demand. It’s not that complicated. I’m not sure how or why this article got published by an organization that should, given its very nature, understand economics. The article doesn’t paint them or their members as people I’d trust in either side of a major financial transaction.

have you met a realtor?

They can be some great people but as a profession they are known more for their extroversion and soft skills than their high IQ understanding of economics lol

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#137

Post by cpburns2009 »

rootusrootus wrote: post #74
estearum wrote: post #44

Earlier quoted context omitted.

It's worth being precise about this because it's a really important point. Most people who we call "landlords" are simultaneously a landlord and a property manager. Property management is an important and productive job. But the vast majority of such people's financial outcome is actually from being a landlord , that is doing literally nothing except holding a piece of paper granting them monopoly on a plot of land.…

> If you remove landlords (but keep property managers, developers, etc In this scenario, who owns the property? And if you are advocating that everyone should own their home, what is the point of a property manager? What about the people who do not actually want to own their home?

This is exactly my problem with these arguments that demonize landlords. I've lived in multiple cities where I knew I'd only live there for a couple years, and I'm only interested in renting. How do you live somewhere short term without someone owning the rented property?

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#138

Post by groundzeros2015 »

adityamwagh wrote: post #108
phantom784 wrote: post #89

Earlier quoted context omitted.

Realtors earn commissions as a % of the price a house sells for.

It’s also a diabolical amount. My friend bought a house in San Jose, and both, the buyers and sellers agent got $50,000 each on a $2M house. They didn’t even help with the house search much.

Who agreed to those terms?

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#139

Post by frankus »

alextingle wrote: post #114
estearum wrote: post #44

Earlier quoted context omitted.

It's worth being precise about this because it's a really important point. Most people who we call "landlords" are simultaneously a landlord and a property manager. Property management is an important and productive job. But the vast majority of such people's financial outcome is actually from being a landlord , that is doing literally nothing except holding a piece of paper granting them monopoly on a plot of land.…

A landlord is doing exactly the same thing as an investor. They are tying up their capital in exchange for an income, and the possibility of a capital gain.

The difference is that investment in a company can create “more company”, whereas investment in land can’t create more land.
Post reply on HN