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

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

#361

Post by Arodex »

ecshafer wrote: post #315
Arodex wrote: post #258

Earlier quoted context omitted.

But even if/when the law finally allows more building, you will have to compete with a richer, and richer, and richer upper-upper-upper class - both people and firms - who will price you out.

The rich only buy so many homes. Its close to a pigeon hole problem. If there are 10 houses and 11 people, the homes are going to go up in price until the 11th is homeless (or moving away to somewhere cheaper). If there are 100 people, its the same issue except magnified, this is what happened in the bay area. Significantly more people than homes. But if there are 100 homes and 10 people, it doesn't matter how rich t…

>The rich only buy so many homes

Oh, don't worry, they also buy land to build luxury condos for the upper-upper class - that can't buy but can still pay rent.

>But if there are 100 homes and 10 people, it doesn't matter how rich they are, the prices will drop because there is less demand

No, the price won't drop. The market is extremely inelastic. These homes are collateral for other investments of the super-super-super rich (people or organisations). It is better to keep them vacant rather than drop their value by lowering the rent, which would cascade to their leveraged investment.

This is why: - rents only go down when there is a big generalized financial crisis, otherwise they never go down. The best that used to happen was that rent stayed stagnant while wages rise, but that isn't happening... - you see so many empty appartements and retail spaces everywhere.

I mean, there a a HN front-page story about vacant spaces a day ago. You should read it.

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

#362

Post by epistasis »

lifestyleguru wrote: post #202
amazingamazing wrote: post #174

Earlier quoted context omitted.

It is very simple. Housing is not built.

Every amount of new housing will be purchased by competitive investors. You are heavily underestimating the amount of money unsophisticated investors have, and the psychological effect of owning more and more of territory. Most people will never say no to owning more money and territory.

So what, they will rent it out? If there's a lot of new housing being rented out, it drives down the rental prices, drives down the purchase prices, etc. Any investor that sits on vacant housing is losing money. When there's extreme shortage landlords can do this because the rise in value happens from the shortage and maybe the rents aren't worth it.

The only cure to investors buying housing is to build enough housing to keep it from being a good investment.

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

#363

Post by WarmWash »

john_strinlai wrote: post #237
WarmWash wrote: post #211

Earlier quoted context omitted.

Where are you located?

NC

I'm not in NC, but Walmart starts associates at $14/hr and will (almost) hire anyone. A quick check shows they have tons of open positions throughout the state, full time with benefits.

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

#364

Post by altairprime »

pc86 wrote: post #324
throwaway041207 wrote: post #268

Earlier quoted context omitted.

This reductionism doesn't seem useful. The population of people who want to buy homes has not grown in any way that is proportional to the cost of a home.

I've yet to hear anyone say why "build more" isn't a valid answer to lowering the cost of housing. Even if new builds stay at exactly the same price they're at today, the price of older homes will decrease as supply increases. And I don't just mean in this thread, I mean ever. It's always hand-wavey "it doesn't work like that" when the evidence suggests that it does.

The underlying issue is that converting single-family suburbia to medium-density multifamily ‘ruins the neighborhood’, and cities don’t have the courage to eminent domain homes and replace them with apartment buildings themselves, so they outsource the housing function to the Free* Market, which is most definitely not interested in terminating the SFH market. Between the profitless-ness of apartments for the real estate industry and the use of suburbia zoning to discriminate since the early 20th century (nowadays in the guise of HOAs), the problem to solve isn’t in housing or urban planning, it’s in dethroning capitalism and classism. That’s why no explanation presents itself for why more housing isn’t a good idea: it’s a fine idea, but the U.S. ethos of ‘fuck you, got mine’ takes precedence, and it’s uncouth to say that out loud here.

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

#365

Post by Arodex »

groundzeros2015 wrote: post #60
Arodex wrote: post #45

Again seeing some blaming poor immigrants for this in the very first answers. Meanwhile, where do the money for OpenAI and the SpaceX IPO comes from? Who got hold of so much money? How did they got hold of it? And here's the killer question: would they, and the rules and system supporting them, change in any way if there were less immigrants?

What do you mean? Trillions move through the stock market every day from pensions, mutual funds, foreign governments, 401ks. And professional trading. I’m sure many immigrants had money on the IPO as well?

These trillions that go to SpaceX and whatnot are trillions that aren't going to building more homes, nor increasing wages. Not even as a second-order effect.

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

#366

Post by epistasis »

greenie_beans wrote: post #276
vovavili wrote: post #250

Earlier quoted context omitted.

>I have yet to read a comprehensive overview of how this happened and how we get out of it Allow me to introduce you to Bryan Caplan - https://www.amazon.com/dp/1952223415

i would love to hear a YIMBY consider the market forces/how capitalism works and not just reduce it to regulation. aka when it costs over $500k to build a single apartment unit and most of those costs are construction with very little of the regulation burden driving up that cost.

Sorry, you think that YIMBYs don't consider this? Perhaps you should follow some YIMBYs!

What does it take to get a more efficient building market? Lots of building, lots of competition in building. Low barriers to new contractors becoming builders, etc.

It's truly only the YIMBYs who ever talk about any of this stuff in my experience.

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

#367

Post by triceratops »

daveguy wrote: post #220
jader201 wrote: post #180

Earlier quoted context omitted.

Of all the jobs to get replaced by AI, I would be happy to see realtors to be first in line (but I also think this is wishful thinking). I feel like I get very little value out of what seems to be a mostly fixed/required price. I know flat fee realtors exist, and if/when we sell our home, I’ll be looking into this heavily. But I feel like they rank up there with car salespeople/dealers.

Realtors are experts in the market. A good realtor pays for themselves by getting you the best selling price or finding the best home for your price range. If you don't understand opportunity cost, then obviously it appears to be a ripoff. But once you understand, it's clear that realtors have value. And realtors are probably going to be the last to be replaced with AI. It's all about value judgement and AI is garbag…

But there is an adverse selection problem. Some realtors are experts in the market. Buyers or sellers have few ways to identify them accurately. Most of those ways amount to they themselves having good knowledge of the market.

It's the same problem as picking active fund managers.

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

#368

Post by supertrope »

hombre_fatal wrote: post #121
antonvs wrote: post #6

Earlier quoted context omitted.

Why not both? Wages are too low and rents are too high. The common factor: the capital class screwing over the working class.

People who are able to restrict housing development (e.g. existing home owners) have too much political power on a topic that shouldn’t be up for a vote.

Imagine if current hospitals could object to opening new hospitals. Or grocery stores could object to competitors getting permits.

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

#369

Post by Arodex »

reducesuffering wrote: post #322
mamonster wrote: post #286

Earlier quoted context omitted.

>You cannot live in Musk's banking account. You have to have the actual physical structure, and current laws in hotspots like San Francisco and New York do their utmost to prevent new development. >Places like Austin, which are less restrictive, don't have this problem. Not really fair to compare 2 cities on the waterfront with no obvious space to build over to a city in the middle of Texas. San Francisco is even wor…

We've had the technology to build skyscrapers for over 100 years. They're illegal in 90% of the city

Few people want to live in sterile skyscrapers.

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

#370

Post by triceratops »

smallmancontrov wrote: post #332
fooker wrote: post #318

Earlier quoted context omitted.

I did not say anything about how you should feel. That's up to you. I'm telling you why the system works like it does now. You can, of course, choose to deliberately not understand it.

If you didn't mean to imply that I should feel an obligation to compensate the risk of a capital loss, what was your argument? No, the system works the way it does because it was built by the rich, for the rich, to ensure they had a way to get paid for being rich. You can, of course, choose to deliberately not understand that.

> I should feel an obligation to compensate the risk of a capital loss

Where did they say that?

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