Earlier quoted context omitted.
Hint: property prices are set by wage levels
really? you think it's not significantly effected by anything else? like amount of housing available?
Pretty much no.
Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
391–400 of 550 posts
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#392Earlier quoted context omitted.
In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset. But the current housing market doesn't feel sustainable. I don't understand how a proper m…
Middle class families can, but young families just don't now. Median homebuyer age is now 56, up from 31 decades ago: https://x.com/heimbergecon/status/1943925791055917417 As for how it all happened, I don't have a comprehensive exploration of this to share, but look at interest rates and house sale prices: https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MSPUS Sale prices begin risi…
HN, we seem to care about this. We post a lot about it. Maybe we should put together a site to consolidate this sort of information, work on articulating something insightful about what is going on, and then a system/group/accountability(this is important) for pushing this to our politicians. My grandfather used to do that and the US was improving. My dad did nothing other than vote. I've done nothing other than vote. The US stopped improving. It's easy to setup a ghost website and do nothing though, so we would need a way to hold each other accountable, broken out simple to follow actions to take. Basically a 10 step program but with the steps being political action we hold each other accountable to take.
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#393Earlier quoted context omitted.
Community land trusts, cooperatives, nonprofits, universities, local government, etc. The problem is always financing. If you're going to own a place you need a lot of upfront capital. If you own a place and plan to maximize rent increases it's easy to leverage your new asset to buy more properties. But if you just want to keep it near cost then you need a new infusion of capital for each new property. So, by their n…
The problem is not capital here. Universities and governments have quite a bit of capital. They could do this in a larger scale. It's more about risk management. Do you want your university to be disbanded or your local government bankrupt if there is a war or natural disaster, or even a standard city block fire. I assure you wars and natural disasters are not that uncommon in the grand scheme of things. That's why w…
What cities in the US have the capital to do this at a large scale? Risk management is certainly a part of it but every discussion here in SF and broadly in the CLT movement is about how to get capital access.
A university endowment or a city's tax revenue is legally and structurally earmarked. They can't just liquidate those assets to buy for local real estate. For the non-profits and community land trusts actually doing this work, securing patient, low-cost capital is absolutely the primary bottleneck.
The high leverage of private landlords actually makes them more vulnerable to systemic shocks. Meanwhile, non-market housing models (like land trusts) don't over-leverage their properties, which is exactly why they historically have much lower default rates during crises.
Given the option of landlords making bank for their risk and then getting a government bailout when there's an economic shock or having more housing decommoddified I'd take the latter. There's very little housing in the US that is under these alternative structures so at the very least I'd encourage more experimentation with them.
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#394[dead]
Americans are very confused when it comes to societal/collective issues. We saw this during the pandemic.
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#395Earlier quoted context omitted.
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.
There is no "trillions that go into SpaceX". You and others seem to have a massive misunderstanding about how the stock market works... they could have sold 10 shares at $50 and still have a valuation in the trillions... Market cap does not mean they have that money in hand or even that it is being taken from someone else...
They literally sold less than 5% of the total shares in the ipo by the way...
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#396Earlier quoted context omitted.
You can improve the land, build more units, replace an small old house with a 4 story apartment building, etc.
Correct, which you should be rewarded for as a developer. I recommend 0% tax on improvements and 100% tax on land value.
Without land ownership, how is it decided who gets to develop what where?
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#397Earlier quoted context omitted.
The problem is not capital here. Universities and governments have quite a bit of capital. They could do this in a larger scale. It's more about risk management. Do you want your university to be disbanded or your local government bankrupt if there is a war or natural disaster, or even a standard city block fire. I assure you wars and natural disasters are not that uncommon in the grand scheme of things. That's why w…
What cities in the US have the capital to do this at a large scale? Risk management is certainly a part of it but every discussion here in SF and broadly in the CLT movement is about how to get capital access. A university endowment or a city's tax revenue is legally and structurally earmarked. They can't just liquidate those assets to buy for local real estate. For the non-profits and community land trusts actually…
More experimentation sounds great.
Most of the knowledge we have about what works and what doesn't is from decades ago.
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#398Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#399Earlier quoted context omitted.
I'm going to assume ignorance and try to explain why landlords exist. Of course you could already understand this and have this as an ideological stance, in which case my effort is likely wasted. Landlords assume a similar role in economy that banks do, they assume risk on your belalf. We have quantified this to an extent that you can reliably put a dollar amount on how much risk there is. When you are renting and th…
Landlords do not assume risk in their role as landlords . The land is there regardless of whether anyone "takes on the risk." Landlords often take on risk in their role as property managers or developers. They should be rewarded more for that, and not at all for their simple ownership of land, which again: would be there regardless of whether someone else or no one at all owned it.
We need to draw a box around the property owner, the previous owner, the owner before that, etc, because the current property owner does take price risk, but only by virtue of the payment they made to the previous property owner and so on. The intra-chain P&L distribution is not a legitimizing factor if you believe the entire ownership structure is an exercise in rent seeking (in the economic sense -- as you point out, development and management are not economic rent and I'd add abatement to that list).
Equivalently, we can just pretend that there has only ever been one owner.
Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore
#400Earlier quoted context omitted.
Supply of housing has not kept pace with population since then. So you have more people chasing relatively fewer houses. Also compare a 1960s or 1970s house to one built today. Today's houses are bigger and much more luxuriously appointed, with gourmet appliances, stone countertops, multi-head showers, walk-in closets, huge bathrooms, etc. Once the boomer generation dies off or goes into assisted living you'll see a…
> Once the boomer generation dies off or goes into assisted living you'll see a lot of those 1970s houses coming back on the market But will they be affordable? Or will they be bought up by real estate conglomerates to be rented to the younger generations?
More supply should make them more affordable. Buying a house was never "easy." Some people seem to think that minimum wage workers were buying houses back in the 1970s and that wasn't the case. At all.