Housing is at the root of many of the rich world’s problems (2020) • Hacker News Board

Re: Housing is at the root of many of the rich world’s problems (2020)

#121

Post by sleepydog » Wed, Aug 17, 2022, 2:56 PM UTC

29athrowaway wrote: post #99

pochekailov wrote: post #14

Nothing will change while the homeowners have more political power than the renters. Even in the cities where the renter population is bigger than the homeowners, such as in Seattle, half of the votes come from people of > 65 years old (all of whom are homeowners, likely more than one home). Young people simply won't vote at all. There is very little incentives for the young people to vote. Even if you cancel all the…

Then each renter will become a homeowner, they will feel very comfortable, have 4 kids, and now you will need 4x more units. Then their kids will have 4 kids, and you'll need 16x more units with respect to where you started. Few generations after you have a much deeper problem that the one you started with. Now you live in a country with a population of over 1 billion, where protests cannot be controlled anymore and…

I don't understand. The population in wealthy countries is growing very slowly.

https://datacommons.org/tools/timeline#&place=country/USA&st...

What makes you say that housing costs are the cause? I've not heard of that argument before.

Re: Housing is at the root of many of the rich world’s problems (2020)

#122

Post by idkyall » Wed, Aug 17, 2022, 2:56 PM UTC

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords.

Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income.

~30 years later, you've deprecated it down to an effective value of $0, so you hypothetically would have to start paying taxes on your rental income(of course, you can still deduct property taxes against that). What do you do? Well, there's something called a 1031 exchange - this lets you sell an investment property, and as long as the funds go directly into another investment property, you pay no capital gains taxes. So guess what? You can buy a brand new investment property with a new(albeit adjusted) cost basis, and you can start the entire cycle of depreciation and deduction all over again on your new, more expensive, property.

So, you've now held this property your entire life, and you die and pass it to your kids - well, great news, unless your estate is over 12 million dollars(and double that for a married couple), you pay no estate taxes. And even more fun - when you inherit property, the cost basis is "reset" to the present day value of the property at time of inheritance - So your children can now rent the property out, deprecate it, and pay no income tax on the rental income either, and continue the cycle.

The net result is that rental properties generate a ton of income for the owners, who pay almost nothing in taxes. Even if they do pay property tax, property tax rates are generally much lower than income tax rates.

Re: Housing is at the root of many of the rich world’s problems (2020)

#123

Post by lesuorac » Wed, Aug 17, 2022, 2:56 PM UTC

doliveira wrote: post #95

alistairSH wrote: post #77

Earlier quoted context omitted.

Not sure why you're being downvoted. Whether it's intentional or not, voting in the US is not always easy for several reasons... 1 - No national election day holiday, so wage-earners often have to forgo income to vote. 2 - Long lines, too few voting stations, exacerbate point 1 3 - Inconsistent voting laws as you cross municipal boundaries (mostly state to state). 3b - particularly WRT mail-in/absentee ballots. 4 - c…

Election day not being a holiday in the USA is weird

I dunno, having election day be a holiday seems like a poor solution as plenty of people do work holidays and probably the same people who have trouble finding time to vote.

Mostly, I don't think we should be encouraging a ton of people to all show up at the same place at the same time. That's just asking for long lines and other issues.

I think it'd be much better to just drag voting out of the course of a month and actually encourage people to not show up on election day. Or to just vote by mail more, I haven't been a poll since I was a child (and back then we had levers!) but from what I hear now half the time you're just filling out a mail ballet in person now.

Re: Housing is at the root of many of the rich world’s problems (2020)

#124

Post by TremendousJudge » Wed, Aug 17, 2022, 2:58 PM UTC

Aunche wrote: post #109

infl8ed wrote: post #21

Earlier quoted context omitted.

Although I don't disagree with you, I will just mention that housing affordability is also a problem in Australia where voting is mandatory

I don't think mandating voting really helps that much. At best, you'll get people to vote for the candidate with the (D) or (R) next to their name. What we need is for people to be more informed. Fewer than 20% of people can name their state legislatures, let alone their stances. https://hub.jhu.edu/2018/12/14/americans-dont-understand-sta...

Mandatory voting doesn't fix all the problems, but it's better than the alternative. Instead of campaigns focusing on "go vote" you get campaigns focusing on the actual voting.

Re: Housing is at the root of many of the rich world’s problems (2020)

#125

Post by trgn » Wed, Aug 17, 2022, 2:58 PM UTC

pochekailov wrote: post #10

mantas wrote: post #2

Not housing per-se, but concentrating too many jobs in few locations. Which causes issues with housing.

It is very good for productivity when many jobs are concentrated in one location. This unlocks the possibility for serendipitous connections. It is awesome when you can meet a founder, a leading engineer, an investor, a designer and a PR person in a coffee line, forming a new company before finishing your morning coffee. Talents concentrated in one place gives significant boost to their productivity. This is called a…

> I think we should return to the 1950s ideas of a futuristic cities and invest in building giant arcologies

Ugh, I hope not. The 50s was the most infantile era, completely preoccupied with convenience and efficiency and big things that go wrooar. The vision of the future in the 50s was so cringey.

Re: Housing is at the root of many of the rich world’s problems (2020)

#126

Post by PuppyTailWags » Wed, Aug 17, 2022, 2:58 PM UTC

jimbob45 wrote: post #79

alistairSH wrote: post #77

Earlier quoted context omitted.

Not sure why you're being downvoted. Whether it's intentional or not, voting in the US is not always easy for several reasons... 1 - No national election day holiday, so wage-earners often have to forgo income to vote. 2 - Long lines, too few voting stations, exacerbate point 1 3 - Inconsistent voting laws as you cross municipal boundaries (mostly state to state). 3b - particularly WRT mail-in/absentee ballots. 4 - c…

1 - No national election day holiday, so wage-earners often have to forgo income to vote. PSA: You can register as a poll worker and work election day to guarantee you have time to vote. There's a high chance that your work will give you the time off to go work as a poll worker without it eating into your PTO (and you get paid to boot!).

> There's a high chance that your work will give you the time off to go work as a poll worker without it eating into your PTO (and you get paid to boot!).

As an ex-linecook, LOL, there are too many assumptions baked in here to be in the realm of reality for working class jobs

Re: Housing is at the root of many of the rich world’s problems (2020)

#127

Post by mrep » Wed, Aug 17, 2022, 2:58 PM UTC

anovikov wrote: post #83

pochekailov wrote: post #14

Nothing will change while the homeowners have more political power than the renters. Even in the cities where the renter population is bigger than the homeowners, such as in Seattle, half of the votes come from people of > 65 years old (all of whom are homeowners, likely more than one home). Young people simply won't vote at all. There is very little incentives for the young people to vote. Even if you cancel all the…

I think you are more than exaggerating. Thinking of someone who's 65 now and owns several homes, these people are utter fools. How much would money put into houses 40 years ago when they bought, and put into stocks at the same time, would make? You don't even need to google up to know the answer. SP500 would make 96x with dividends reinvested and 37x without. Median home price is not even 10x, and the median home has…

Actually, you do need to google up if you want to look at an actual data analysis. I mean, you aren't even counting the rental income in your comparison. If you look at the rate of return on everything from 1870-2015, equity markets and housing actually provide somewhat similar returns [0]. Equity markets are far more liquid though so I choose them personally.

[0]: https://news.ycombinator.com/item?id=19817584

Re: Housing is at the root of many of the rich world’s problems (2020)

#128

Post by lesuorac » Wed, Aug 17, 2022, 2:59 PM UTC

coryrc wrote: post #106

alistairSH wrote: post #77

Earlier quoted context omitted.

Not sure why you're being downvoted. Whether it's intentional or not, voting in the US is not always easy for several reasons... 1 - No national election day holiday, so wage-earners often have to forgo income to vote. 2 - Long lines, too few voting stations, exacerbate point 1 3 - Inconsistent voting laws as you cross municipal boundaries (mostly state to state). 3b - particularly WRT mail-in/absentee ballots. 4 - c…

Then why does Washington state also have low voter participation? Nine of that applies to a Democratic-run state with mail-in-only voting.

[Citation needed]

From what I see WA had a turnout of 75% compared to USA's 66%.

https://docs.google.com/spreadsheets/d/1h_2pR1pq8s_I5buZ5agX...

Re: Housing is at the root of many of the rich world’s problems (2020)

#129

Post by the_gastropod » Wed, Aug 17, 2022, 3:00 PM UTC

refurb wrote: post #56

strikelaserclaw wrote: post #33

Earlier quoted context omitted.

the fatal flaw in capitalism imo, a lot of wealth gets created which is good for everyone but eventually, a lot of that wealth also gets held by a smaller and smaller minority while the rest try to desperately compete over whatever is left over. After a certain point a certain portion of any new wealth created somehow trickles up to the capital owning class (think your VC's, fund owners, other rich investors), this c…

But this isn’t true. Median income and median wealth has been on a general upward trend for over a century. I mean, how do you think the Western world become so wealthy? How did China raise tens of millions out of poverty. Capitalism!

This all-or-nothing thinking is, itself, a problem. Capitalism is a tool. And it's good at many things. Creating competition and innovation in consumer goods is one area it's obviously very good at. It is not good at equity. Externalities are a massive problem raw capitalism has no affordance for addressing. Regulations (another tool) are necessary to smooth out capitalism's rough edges.

You'll find very few people that actually want to whole-hog entirely get rid of capitalism. When you find people critiquing it, it's generally from the vantage point of "this is a rough edge that needs addressing via some government intervention". Housing (in addition to healthcare, education, transportation, and countless other areas) seems like one case where this is very obviously true.

Re: Housing is at the root of many of the rich world’s problems (2020)

#130

Post by dougmwne » Wed, Aug 17, 2022, 3:01 PM UTC

strikelaserclaw wrote: post #33

throwaway22032 wrote: post #27

Our economic system is set up such that you either hit a bar at which you accumulate capital forever unless you make a mistake, or you're loss-making forever. Once you hit that bar, your job becomes buying up housing like it's a Monopoly board. As an individual you can either choose to win or lose this game. We're not going to change it, at least not within our lifetimes.

the fatal flaw in capitalism imo, a lot of wealth gets created which is good for everyone but eventually, a lot of that wealth also gets held by a smaller and smaller minority while the rest try to desperately compete over whatever is left over. After a certain point a certain portion of any new wealth created somehow trickles up to the capital owning class (think your VC's, fund owners, other rich investors), this c…

Not sure I agree with this worldview. The real currency of the world is labor, at least until we invent AGI. People need to be a certain amount of hungry before they will labor. Our current system supports a good number of older people being supported by the labor of younger people. That capital cannot magically increase the labor force and when you dump more capital into the system outside of a recession you get inflation, not more labor.

We might be able to support more idle people, but not at everyone’s current quality of life. That “excess capital” goes off to chase prestige goods like paintings and handbags that soak up a small fraction of the labor pool.

If a huge percentage of the labor economy were devoted to the quality of life for billionaires, then I would very much agree with “eat the rich.”