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The Rate of Return on Everything, 1870–2015 (2019)

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Re: The Rate of Return on Everything, 1870–2015 (2019)

#131

Post by rybosworld »

betaby wrote: post #128
rybosworld wrote: post #127

Earlier quoted context omitted.

> Why should we use peak as a benchmark? I'm not sure what you mean by the peak being a benchmark. There's a very clear trend of population growth declining every year since the 60's. > Even 0.8% is insanely high, at such rate population will double in ~150 years I think you are missing the part where the rate has been declining every year.

I think you are missing 'in our lifetime', even though you are quoting 'will double in ~150 years'. Also 'declining every year' doesn't mean it won't start growing again.

> I think you are missing 'in our lifetime'

I guess it depends when you are born. Peak population is predicted around 2075, and that's within a lot of people's lifetime.

> Also 'declining every year' doesn't mean it won't start growing again

That's a bit obvious and is equivalent to saying "anything could happen".

But unless you have a good reason for a reversal in trend, then there's no reason to think it will.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#132

Post by cyberax »

rufus_foreman wrote: post #119
cyberax wrote: post #100

Earlier quoted context omitted.

It's actually the inverse. The raw construction cost of a housing unit in a dense building is cheap. Living there is not. People in dense cities spend a larger percentage of their paycheck on housing than people in sparse cities ( https://smartasset.com/mortgage/housing-spending-2021 ).

>> The raw construction cost of a housing unit in a dense building is cheap Not true. The cost per foot of construction of a single family home is lower than that of a small apartment building. A small apartment building has a lower cost per square foot than a mid-rise apartment. And a mid-rise apartment building has a lower cost per square foot than a high-rise apartment building. Taking only construction costs into…

> The cost per foot of construction

That's why I specifically said that a per-unit cost is lower in cities. But units tend to become smaller and smaller over time.

> Taking only construction costs into account, when land is cheap, single family homes make the most financial sense, and dense housing doesn't make sense.

Absolutely.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#133

Post by airbreather »

defrost wrote: post #95
abduhl wrote: post #92

Earlier quoted context omitted.

Subtract out Russia from this calculation and “Europe” is 75% the size of the US. When people talk about “Europe” and Europeans not understanding how big the US is they are not talking about Eastern Europe/Russia, they’re talking about Portugal to Poland, maybe to Ukraine. Sometimes they’re not even thinking of the Nordic countries which also have a lot of land. This of course invites the counter argument that the US…

For another comparison, the state of Australia I live in has 3x the land area of Texas, a current population of 2.9 million that largely live in the one concentrated urban area, farms and cattle stations large than those in the US, and had people walk out of the desert than had never met or heard of non indigenous people until that point in time in the mid 1980s. I grew up in one of the more remote corners when the s…

Western Australia, a unique place that is part Texas, part Alaska, part Silicon Valley and part something of Europe.

It should be a country of its own, and might as well could be with the most isolated capital city in the world, but the Austealian Federal govt keep fucking it up, despite it being the real cash cow of the country.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#134

Post by Retric »

qazxcvbnm wrote: post #129
Retric wrote: post #126

Earlier quoted context omitted.

I know several people who decided to get smaller yards or were happy to move into apartment complexes without them. We both are dealing with biased samples. A childhood friend who is very into the outdoors moved to a rural area and got 14 acres, everyone else moved to an apartment or a house with under an acre. This stuff shows up on migration patterns, and well there’s a reason the Rural Midwest USA is a small perce…

Revealed preferences are only as revealing as the market is competitive. In monopolies, is it not revealed that the populace prefers to be price-gouged? In a market as regulated as housing and with deep ties to policy (and industrial structures that I have heard about which I do not understand), it's difficult to not be sceptical of revealed preferences as a sole convincing explanation.

What you’re describing may impact housing developments etc, but I don’t think many markets are more competitive than used homes.

Despite its rarity a 3 acre lot is rarely worth 3x what a 1 acre lot would be, unless it can be subdivided.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#135

Post by JackYoustra »

greenie_beans wrote: post #124
JackYoustra wrote: post #94

Earlier quoted context omitted.

It's actually one of the big problems with Capital in the 21st century: if you strip out housing, r < g! Turns out it's all zoning and rent control all the way down! Fix zoning and you end up incidentally fixing inequality too because it's such a large part of economic rents.

if it's all because of zoning, then how come we built more housing in the period leading up to the great recession (with the strict zoning laws that already existed)?

We did build housing, yes, just not in the places that needed it. The academic evidence is pretty strong, see https://www.nber.org/system/files/working_papers/w8835/w8835... for the divergence of price from costs of construction only localized in some areas. You can zoom out to see a literature review here too: https://www.nber.org/system/files/working_papers/w20536/w205...

For a specific critique as it pertains to Capital, you can see the analysis here: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...

summarized here: https://www.economist.com/finance-and-economics/2015/03/28/t...

Re: The Rate of Return on Everything, 1870–2015 (2019)

#136

Post by ManuelKiessling »

throw0101d wrote: post #29
georgeecollins wrote: post #25

Earlier quoted context omitted.

To help you conceptualize how that is possible: 100 years ago the world population was 2 billion, and now it is 8 billion. While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast. That's why -- for example-- the US gov't in the 1850s could just hand out 40 acre plots of land to people. They can still do that, but it has to be way out in Alaska…

> While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast. "Buy land, they're not making it anymore." — Mark Twain

The Netherlands would like to have a word, but yeah, point taken.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#137

Post by chii »

Etheryte wrote: post #51
superb_dev wrote: post #9

How can an entire economy have a growth rate? Is it not measuring how much "new money" was put into the system?

Money doesn't affect the size of your economy, in general money is not even relevant to the discussion, save for the fact that it gives us a unit of measurement. Money is a relative resource, in a simplified manner, money dictates who gets what fraction of the pie. By printing more money you're not making more pie, just dividing the existing pie into thinner slices. Economies grow because of improvements in technolog…

> just dividing the existing pie into thinner slices.

and also not evenly distributing those slices according to previous ownership %.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#138

Post by chii »

mensetmanusman wrote: post #35
superb_dev wrote: post #9

How can an entire economy have a growth rate? Is it not measuring how much "new money" was put into the system?

An economy is simply the number of people times the average productivity per person. If lots of people are doing a lot of work powered by a lot of energy and productive technology equipment, the (material) economy is good.

There has to be a level of personal/private intent for this to be true.

I would argue that under a centrally planned economy, you could have the same number of people working, using the same tech/equipments and energy, but not be a good economy because the output isn't what those individual participants in the economy wants to consume.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#139

Post by chii »

mensetmanusman wrote: post #67
throw_pm23 wrote: post #42

Earlier quoted context omitted.

I'm not sure, population already plummeted in many places while prices went up, as people prefer to live less densely then they used to.

As the housing maintenance labor force shrinks and it gets more expensive for elderly to maintain their non dense homes though, the value should decrease and become more affordable for the young who can do those labor things. Maybe?

no it wont for a long time.

If the elderly has any children (presumably they have), those children will inherit the house, rather than sell it at a loss. It would only decrease in price, if the children has a high need for cash, and a low/zero need for housing. This situation is still typically rare (for example, moving away permanently is one such situation). And even in those cases, you will rent out the house, rather than sell for a loss.

Therefore, the most average, and typical scenario is going to have the housing price be stable, rather than drop.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#140

Post by chii »

cmrdporcupine wrote: post #86
mensetmanusman wrote: post #37

Earlier quoted context omitted.

Yeah, it would be interesting to have more transparent costs, especially with inflation. New siding every 20 years is $40k, a new roof might be $30k every 25 years, a new driveway, etc.

I just shudder to think about all my trips to Home Depot over the last 20 years of owning a home. I never did those when I was renting. Yes, I didn't get to renovate or pick my paint colours. And yes my money paid down someone else's mortgage. But I suspect if you add it all up...

> yes my money paid down someone else's mortgage.

which is a bit of a non-sequitur - who cares what your rent is paying towards? The landlord could be smoking weed with your rent money and you'd not be affected (financially).

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