NIMBYs in the twenty-first century • Hacker News Board

Re: NIMBYs in the twenty-first century

#11

Post by psaintla » Wed, Mar 25, 2015, 3:09 PM UTC

pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

Yes, which is always why I always cringe when I see how many people in their 20s and 30s believe that home ownership is a bad idea. The willingness to rent for life in order to live a high density, urban lifestyle is going to come back to haunt them when they get older. It's good for me as a landlord but I hope people my age start rethinking their position on home ownership.

Re: NIMBYs in the twenty-first century

#12

Post by jseliger » Wed, Mar 25, 2015, 3:10 PM UTC

pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

The right answer is probably to rebalance a bit towards property.

I appreciate your use of "a bit" to qualify your statement, but I'll also note that rebalancing towards property in the form of REITs or REIT-like structures makes sense. But on a personal level it may not, since it depends on a) picking the places that'll be important in the future (picking, say, SF or Seattle from 1980 – 2001 was not an obvious bet) and b) depending on a contemporary NIMBY framework to keep more property from being built. Point b is particularly interesting, because Yglesias and others have proposed that height limits, parking minimums, and similar choices should be removed from small governing bodies like cities (where many stakeholders want to limit supply for their own benefit).

Will that happen? From here, the answer looks like "No." But seeing the NIMBY madness and price rises in many coastal cities makes me wonder.

Re: NIMBYs in the twenty-first century

#13

Post by sun_machine » Wed, Mar 25, 2015, 3:10 PM UTC

I am confused by the way the Economist phrased Mr. Rognlie's argument. The crux of Piketty's argument is that when global returns on wealth (r) is more than global economy growth (g), capital will start snowballing into the hands of the few very quickly.

The mechanism of r getting bigger than g is not an increase in r, but a decrease in g. The increase of the global economy is dominated not by increasing technological efficiency, but by population growth. There is an upper limit of the number of people we can fit on this rock (whether 9 billion or 100 billion, we will hit a limit at some point). Once we bump into that ceiling, growth will slow dramatically, and those who have already managed to create a sizable stash, or who have the talent to regularly beat the market, can accumulate wealth to no end.

In short, as I understood Piketty's book, the fact that r might not increase if we put the right limits on housing development, doesn't change the overall hypothesis made by Piketty.

Re: NIMBYs in the twenty-first century

#14

Post by venomsnake » Wed, Mar 25, 2015, 3:11 PM UTC

> Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most.

Those rotting bits ... outside of consumer software, the life of software is easily measured in decades.

Re: NIMBYs in the twenty-first century

#15

Post by venomsnake » Wed, Mar 25, 2015, 3:13 PM UTC

jseliger wrote: post #12

pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

The right answer is probably to rebalance a bit towards property. I appreciate your use of "a bit" to qualify your statement, but I'll also note that rebalancing towards property in the form of REITs or REIT-like structures makes sense. But on a personal level it may not, since it depends on a) picking the places that'll be important in the future (picking, say, SF or Seattle from 1980 – 2001 was not an obvious bet)…

> But seeing the NIMBY madness and price rises in many coastal cities makes me wonder.

Suddenly Lex Lutor's evil plan from Superman : The movie, makes sense.

Re: NIMBYs in the twenty-first century

#16

Post by a_c_s » Wed, Mar 25, 2015, 3:13 PM UTC

ForHackernews wrote: post #4

> Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most. Is software even capital? Isn't this part of why we've been arguing against software patents for years now? Obviously software and other forms of intellectual property…

Broadly speaking, economics talks about three categories of things: Land (natural resources), Labor & Capital.

Looking at things from this perspective, capital includes everything from carpet, books and desk chairs to massive heavy industry factory machinery.

A source: http://www.henrygeorge.org/def2.htm

Re: NIMBYs in the twenty-first century

#17

Post by dangravell » Wed, Mar 25, 2015, 3:15 PM UTC

pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

Whose conventional wisdom says that? In the UK, "convention" says the opposite and is sorely misguided.

In reality they are just different asset classes and should be judged on their merits.

Re: NIMBYs in the twenty-first century

#18

Post by nwah1 » Wed, Mar 25, 2015, 3:23 PM UTC

Housing is a euphemism for land. The value of locations is determined by the quality of the surrounding community and the environment.

This value winds up in land because it is claimed for exclusive use by individuals, enforced by government. Yet, claiming ownership over any part of the surface of this ball of space rock is arbitrary, and no principle of justice can truly legitimize it.

Instead of Piketty's blunt "wealth tax" we should be taxing land value, which as the cited MIT/Brookings report shows, is responsible for nearly all the new growth in inequality.

Re: NIMBYs in the twenty-first century

#19

Post by matwood » Wed, Mar 25, 2015, 3:26 PM UTC

nwah1 wrote: post #18

Housing is a euphemism for land. The value of locations is determined by the quality of the surrounding community and the environment. This value winds up in land because it is claimed for exclusive use by individuals, enforced by government. Yet, claiming ownership over any part of the surface of this ball of space rock is arbitrary, and no principle of justice can truly legitimize it. Instead of Piketty's blunt "we…

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

Re: NIMBYs in the twenty-first century

#20

Post by pcarolan » Wed, Mar 25, 2015, 3:27 PM UTC

jseliger wrote: post #12

pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

The right answer is probably to rebalance a bit towards property. I appreciate your use of "a bit" to qualify your statement, but I'll also note that rebalancing towards property in the form of REITs or REIT-like structures makes sense. But on a personal level it may not, since it depends on a) picking the places that'll be important in the future (picking, say, SF or Seattle from 1980 – 2001 was not an obvious bet)…

Point taken, but I'd value my (and everyone else's) personal judgment when it comes to property investment higher than investing in a REIT simply because I have more insight into what I'm buying and have the ability to personally improve my asset by taking good care of it, making improvements and getting involved in my community. Owning a home isn't all that different than running a small business in that way.