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

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

economist.com

Post reply on HN
Print view View original

381–390 of 817 posts

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

#381

Post by dntrkv »

Jiro wrote: post #323
dionidium wrote: post #275

Earlier quoted context omitted.

> It's a simple problem, we turned housing into an investment. People are not natural economists and will basically dig in to support the status quo until that status quo changes, at which point they'll support the new one. Americans, for example, buy new cars at an average new price of $40k and for most of my life accepted uncritically that the value of those cars would plummet the second they were driven off the lo…

https://en.wikipedia.org/wiki/The_Market_for_Lemons There's a legitimate reason why a car immediately loses its value. People are more likely to sell cars that have something wrong with them. The market price for a car that you just drove off the lot is not the market price for an average car of that age, it's the market price for the subset of cars of that age that people want to sell. Because a car in that subset i…

That is one reason, but there are many.

* You get to option the car with exactly the features/colors you want.

* People will pay a premium for something brand new.

* Financing for used cars usually carries a slightly higher interest rate.

* The actual cost at the dealership can vary significantly depending on the make/model/dealership

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

#383

Post by llbeansandrice »

Jiro wrote: post #337
dionidium wrote: post #328

Earlier quoted context omitted.

That sounds reasonable to me, but it didn't stop the cost of used cars from skyrocketing during the pandemic, due to the supply-chain-induced shortage of new cars. When the car market started looking a lot more like the housing market, so did its prices.

In that situation, the value of all cars went up, both new and used. The value of a used car was still much less than the value of a new car, you just didn't notice this because new cars didn't have their prices raised to correspond to the increased value.

Yes they did? There were upwards of $10k dealer mark-ups on new cars.

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

#384

Post by notch656a »

dntrkv wrote: post #381
Jiro wrote: post #323

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/The_Market_for_Lemons There's a legitimate reason why a car immediately loses its value. People are more likely to sell cars that have something wrong with them. The market price for a car that you just drove off the lot is not the market price for an average car of that age, it's the market price for the subset of cars of that age that people want to sell. Because a car in that subset i…

That is one reason, but there are many. * You get to option the car with exactly the features/colors you want. * People will pay a premium for something brand new. * Financing for used cars usually carries a slightly higher interest rate. * The actual cost at the dealership can vary significantly depending on the make/model/dealership

During beginning of COVID I drove a Tacoma off the lot for ~29k out the door and at the end of COVID I had several offers to buy it from me used with over 10k miles on it for anywhere from $30-31.5k. At that time you could still buy it new for ~29-30k.

In fact the only reason why I bought new in the first place was because even a 10 year old tacoma is worth the better part of a new one. Guess it depends on your market but the premium for new looks pretty tiny or negative to me.

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

#385

Post by djohnston »

lbrito wrote: post #380
infogulch wrote: post #357

A couple ideas for how to fix some real estate problems: 1. A zoning rule that requires home owners to live in the owned home. This would prevent remote/foreign money from meddling with local housing in particular areas, and prevents big corps from buying up all the homes and forcing people to lease them out. Some people want to lease though, so that's why I think it's more appropriate as a zoning tool for particular…

>A zoning rule that requires home owners to live in the owned home. This would reduce the housing stock. The way capitalism works is that some people have excess capital, and they invest it. Housing is one such investment. People don't need multiple houses to live in, so multi-property owners rent out their investments, which is great because there are many people that can only afford renting, not buying.

It's great to an extent but it seems obvious we passed that threshold during the pandemic. Now the combination of NIMBYISM and corporate landlords is creating insane distortions in particular locales. They are turning potential home owners into renters.

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

#386

Post by randomdata »

ouEight12 wrote: post #299
huevosabio wrote: post #281

Earlier quoted context omitted.

You fix it by deprecating only the improved value. The land beneath a building does not deprecate, whereas the value of the building should. Since for most properties the majority of the value is in the land itself, your basis to deprecate would be much lower, and more realistic.

> Since for most properties the majority of the value is in the land itself I'm not sure that's the case for the majority of the country. At-least it's not here in my greater metro area (suburbs or rural... yuppie downtown areas... perhaps, but again, downtown is not majority for most places)

It may be not true right now amid difficulty in finding labour and materials. Much like cars, the value of a used home is proportional to the cost of building a new home. When new homes are difficult to acquire, cost of used homes go up. Used cars have also increased in value lately for the same reason. This is not typical, however. These are normally depreciating assets.

Under usual market conditions, houses are headed to being on the older side and reaching the end of their effective lifetime, leaving little value left in the structure. You can renovate a home to bring it back to new-like condition, which restores value to the structure, but that cost must be maintained in the equation.

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

#387

Post by kkfx »

BoxOfRain wrote: post #286
kkfx wrote: post #60

There are many issues around housing, some derive from capitalism, like building apartments because doing so milk more money from a handkerchief on land, but some simply due to different evolution speed from human needs vs buildings lifecycle. I see at least two kind of schools on housing, one who talk about cheapness, typically from USA, Japan and few others. Another who talk about forever and ever duration, typical…

>We still do not have the '30s dream of flying homes or semi-autonomous starships that can be moved easily everywhere... So far we do not even have flying cars (while they might be there technically)... There is a kind of home that can float anywhere though, I'm quite far long in my plans to move onto a sailing yacht. While my main motivation is a lifelong love of sailing and a desire for a nomadic lifestyle, I'd be…

That's was done by some, experimented on scale by very few and... well... it prove to be not really feasible: boats are expensive, far more than homes. All the efforts to made cheap and large-enough house-boat led to crappy stuff who do not last much. You need anyway much more raw materials and maintenance, most water is salty and salt corrode anything, lakes are too few and might make unpleasant drought issues and unpleasant waves... Insulation is an important issue, so energy consumption is. You can't even have good p.v. just because of limited AND constantly moving surface (your inverters suffer much a constantly crazy p.v. input).

You need fresh water and the cheap way to get is is from land, so you need land infra anyway, you also need food and you can't produce it locally, yes you can fish, but you do not live well ONLY on fish and some algae... Beside that logistics is a nightmare.

Long story short: FEW can live, perhaps even very well for some of them, on boats, but only if most others do not. That's an important issue too many forget even when they speak about Green New Deal: yes, we live in homes. We might WFH. BUT we also need factories, hospitals, schools, they are mandatory to live well and they need to be counted in the game: we need to sustain them as well. We need workers and they need a life as well. That's not much "housing problem" but is tied because we need a home to live BUT we also need to be physically nearby something else to do so as well. The dream of an autonomous home is not much different than the dream of an autonomous house-boat or starship or house-truck, house-airplane etc we can made "relatively autonomous" homes, tucks, ships, airplanes, ... where relatively means "you are free to live in in comfort FOR A LIMITED PERIOD OF TIME until something breaks, for instance, and such "things" can exists for you just because there is a complex industrial and social system behind. We still miss the 3D printer able to print itself...

That's the real issue... We are able to reproduce ourselves only with our body (well, if we can keep alive in nature) but we can't do the same for anything we build...

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

#388

Post by llbeansandrice »

dont__panic wrote: post #257
pdonis wrote: post #223

Earlier quoted context omitted.

> You only need one house to live in. Many people do not want to own a home, they would rather rent. Someone has to be the landlord for all those people, and to all those someones, the home is an investment. You can only get rid of homes as investments if you get rid of renting.

> Many people do not want to own a home I hate to go all "citation needed" on you, but I'm not sure this is true. Do I want to pay for upkeep of a property? Probably not. But since renting is basically equivalent to burning money in our economy, any responsible renter will eventually feel a pull towards ownership if only to stop the bleeding. I think we need a society where renting isn't so expensive AND owning a pro…

How many college students want to bother with owning a home for The number of people that end up never owning or wanting to own a home is likely small. But there is a very real case for non-ownership depending on what stage of life people are in and how they want to live their lives.

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

#389

Post by japanuspus »

foobarian wrote: post #254
NoSorryCannot wrote: post #240

Earlier quoted context omitted.

Oooor they can sell it, as originally stated. Goodness. The point is reduce land entitlement a little bit. Yes, there's going to be some light incentive to cut loose and that's OK.

Now the US is way ahead of the game here compared to Europe. There are no property taxes in most of Europe and families hang on to their homes for generations.

This appears to differ across Europe.

I know for a fact (through living here) that Denmark and probably the rest of Scandinavia has property tax and inheritance tax -- holding on to family property is almost as expensive as buying new property.

Which part of Europe are you referring to? I once had Greek colleague who complained about having to maintain three generations worth of houses, so that might be one place where things are as you describe?

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

#390

Post by dougmwne »

wyre wrote: post #303
dougmwne wrote: post #130

Earlier quoted context omitted.

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 inf…

I’d say productivity is more of a currency than labor. Sisyphus isn’t producing anything, but sure is laboring a lot. The industrial revolution was huge, not because it had a lot of laborers but because the laborers were able to be more productive with their labor.

Fair enough, but no productivity improvement can make up for too few workers producing goods and services for those who might want them…yet!
Post reply on HN