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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

#481

Post by beej71 »

HDThoreaun wrote: post #459
beej71 wrote: post #425

Earlier quoted context omitted.

The claim is that if you increase supply the price will drop. The counter-example is a case where supply was increased and the price doubled. The question is why did that happen? It very much looks like the "just build" model is insufficient to explain what's happened in that case.

Demand for housing increased faster than supply. As people gain wealth they demand more housing, so just looking at population changes doesn’t tell you much about housing demand.

Where is the demand coming from, is what I'm getting at. Because it's not from the population on this case, it would seem.

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

#482

Post by epistasis »

win311fwg wrote: post #470
epistasis wrote: post #431

Earlier quoted context omitted.

Here's an academic paper on how many people don't understand housing economics, even though they understand the same concepts in other areas: https://www.aeaweb.org/articles?id=10.1257/jep.20241428 I can't tell you how many times I've been told that "supply and demand doesn't apply to housing," both by super wealthy NIMBY homeowners and by those struggling to get by.

I've heard the same thing about supply and demand many times myself which seemed strange at first, but when I dug deeper I learned they aren't using the traditional definition for supply and demand, so what they were communicating was technically true, if meaningless. They weren't speaking the same language. When I dug even deeper, I discovered that, pretty consistently, they don't understand the concepts anywhere, b…

> but when I dug deeper I learned they aren't using the traditional definition for supply and demand, so what they were communicating was technically true, if meaningless

Can you provide some of those definitions that do work? Because I've spent a lot of time talking about this and never been able to come to a shared understanding that also matches the material world.

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

#483

Post by epistasis »

stefanfisk wrote: post #185
win311fwg wrote: post #133

Earlier quoted context omitted.

> One main driver is that there's not being built enough new housing. I recently entertained the idea of building a new house. Not terribly surprising, but worth mentioning that the time and materials to put up the structure was going cost even more than buying a used house. If nobody can afford to buy a less expensive used house then naturally nobody is going to build the much more expensive new house either. Therei…

I’ve been thinking about this quite a bit lately. I live in an apartment in Stockholm but I also own an old forest cabin. It’s perfectly legal for me to live in said cabin permanently, but it would be strictly illegal for me to build a new house to the same simple standard. The building codes are basically making it illegal to be poor. Similar patterns exist for student housing. The old style of student corridors wit…

> The law, in its majestic equality, forbids the rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.

A bunch of houses in the mountains around me burned down a few years ago. It's one of the most populated "wildland-urban interface" areas of the world, because building more housing inside of the urban areas has been banned for half a century, so the wilderness was sacrifice to housing, as there was less regulation in the mountains.

However, regulations have caught up a bit, and people that lived in houses valued >$1M before burning down, now have to do things like install proper septic systems that cost $50k or $70k, instead of their sewage leaking into the abundant waterways that used to be habitats of salmon and the like.

These people are very aggrieved at their position of being previously house-rich, cash-poor, and apparently underinsured. I'm not sure what the right solution is other than legalizing housing in the urban core again. Which results in even bigger fights.

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

#484

Post by epistasis »

ecshafer wrote: post #302

I bang on this drum a lot. We need Land Value Taxes to incentivize productive use of land, and we need to eliminate (or greatly reduce the burden of) Zoning (Japan has zoning but a great model that really allows building housing efficiently). When it costs $50k in permits and takes 2 years just to put a shovel in the ground, to build a single family home, and millions to build an apartment building, of course homes a…

Land Value Taxes are the perfect economic solution, however they have the disadvantage of being nigh-on politically impossible to implement and keep, if they are implemented at the local level.

The political power base of a city is usually the land-owning class. Everyone from homeowners to commercial landlords that also live in the city. Roughly, every single person gets one vote when it comes to elections, but in the reality of local politics, the homeowners dominate due to their long-established social networks and the low-information environment of most local elections. Large landlords have barely any more influence than the random homeowner, and renters as usual are completely disorganized and are nearly impossible to organize.

We need both a much stronger organized tenant movement, and enough class-traitors in the homeowning class in order to get an LVT to stick. Ideally it would legally imposed at the state or federal level, and administered somewhat locally, with a mixture of funds going to the municipality, county, and state levels of government, IMHO.

Without a broader base of strong political support, LVTs eventually get voted out by the land owners, like in Vancouver in the 1970s.

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

#485

Post by llbbdd »

bcjdjsndon wrote: post #191
TaupeRanger wrote: post #169

Earlier quoted context omitted.

"Basketball players are extremely tall." "Go tell that to the middle school travel team in my neighborhood." Why are you even making this comment? The comment you responded to was obviously talking about median wages of the entire US population. Real Wages are near all-time highs - it's just a fact, you can look up the data yourself.

[flagged]

You sound like you don't live in the US. Maybe read less reactionary news.

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

#486

Post by littlexsparkee »

tzs wrote: post #480
amazingamazing wrote: post #174

Earlier quoted context omitted.

It is very simple. Housing is not built.

I'm not sure it is that simple. The housing units per capita numbers on first impression would suggest the number of housing units is keeping up with population growth, raising the question of why that isn't sufficient. Some quick Googling for number of housing units in the US in 2006 and 2026 says 128 million then and 149 million. Population then was 299 million and is 334 million now. That's 16.4% more housing unit…

It's not just about sheer numbers but distribution - the areas where they're most needed are the ones that are building the fewest units, exceptions (Seattle, Austin) aside

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

#487

Post by estearum »

smallmancontrov wrote: post #244
cpburns2009 wrote: post #137

Earlier quoted context omitted.

This is exactly my problem with these arguments that demonize landlords. I've lived in multiple cities where I knew I'd only live there for a couple years, and I'm only interested in renting. How do you live somewhere short term without someone owning the rented property?

Swapping the base layer of the capital stack has zero visible change to the person renting. In fact, I'm pretty sure it's common in asia. Instead of: Investor owns the land Investor pays for construction, finance, maintenance Investor receivers rent They do: Government owns the land Investor pays to lease the land for 30 years or whatever Investor pays for construction, finance, maintenance Investor receives rent The…

This is the correct answer

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

#488

Post by Henchman21 »

llbbdd wrote: post #485
bcjdjsndon wrote: post #191

Earlier quoted context omitted.

[flagged]

You sound like you don't live in the US. Maybe read less reactionary news.

I live in the US and this seems pretty spot-on to me. Hard to hear perhaps, but best to hear it, eh?

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

#489

Post by cindyllm »

bcjdjsndon wrote: post #191
TaupeRanger wrote: post #169

Earlier quoted context omitted.

"Basketball players are extremely tall." "Go tell that to the middle school travel team in my neighborhood." Why are you even making this comment? The comment you responded to was obviously talking about median wages of the entire US population. Real Wages are near all-time highs - it's just a fact, you can look up the data yourself.

[flagged]

[dead]

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

#490

Post by mancerayder »

throwaway041207 wrote: post #158
WarmWash wrote: post #67

The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out. Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...

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…

Here are two.

Suburbs, good ones with low crime, access to jobs and good schools are desirable. Desirability leads to prices going up. Prices going up leads to property tax revenue going up. That budget going up leads to a higher $/pupil for schools, better infra, etc... Increasing desirability.

So, not a supply problem.

Here's another. Jobs are in cities. People don't like commutes, and value not owning a car if possible. Young people like cities. People go there, causing demand to skyrocket, while companies hire there. Places like NYC and Paris and London are not Houston - unlimited development would ruin the cities. There's no amount of supply that would ever make these cities cheaper. Moreover the land itself is expensive, and the building costs (labor and other costs), so there's a floor to what things should cost.

In every one of these conversations on building, you get these Reddit-style upvoted comments akin to 'it's due to zoning and NIMBYism'.

Newsflash, the world isn't California. The problem of housing costs has a lot of dimensions.

I propose - abolish the property tax paying for schools like in most of the country, and distribute school funds equally at the state level. This would reduce wealth inequality.

Second - let's revisit this return to office idiocy. If I have a million dollar apartment in a city, it's because of my commute, not because I necessarily enjoy or want to be there. More than happy to sell it to someone else who'd enjoy it more (a young person - what cities are for).

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