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The rise of the forever renters

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Re: The rise of the forever renters

#61

Post by ponector »

ljm wrote: post #52
linguae wrote: post #38

Earlier quoted context omitted.

To make matters worse, renting often means dealing with annual rental increases. Since the pandemic started my apartment rent has gone up roughly 8% per year, compared to the annual 2-3% raises I get for good performance at work. Some people have to contend with much more dramatic rent increases. Many people end up getting priced out of renting due to rent increases, forcing them to either move further away (which me…

Ever since the dawn of 'trickle down economics', wealth has only continued to be distributed upwards and is becoming increasingly concentrated at the top. This is because the cost of everything except labour has increased, forcing many to try and do more with less. It is completely and utterly unsustainable and I doubt anybody young will ever experience the kind of prosperity that came after WW2. You can't even rely…

That is not true. Cost of everything except housing in high demand cities decreased dramatically during latest few decades.

Calculate how many hours should average Joe work to buy 100 gallons of gasoline, to buy a fridge, to buy 100 kg of chicken breast now vs then.

Re: The rise of the forever renters

#62

Post by antisthenes »

dublinben wrote: post #22
bnchrch wrote: post #10

Earlier quoted context omitted.

I agree with Ramit that it shouldn’t be characterized as throwing your money away. But. What it leaves out is by purchasing you’ve essentially fixed your cost of housing. Which is important when you consider. 1. Inflation 2. The ever increasing wealth divide allowing landlords to charge more for rent knowing their tenants can never qualify for the alternative of buying their own home instead. This is something I wish…

You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. I don't know any homeowners who would describe their housing costs as "fixed" and stress-free.

> You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes.

As a renter, these costs are essentially passed on to you anyway, so there's functionally no difference.

Re: The rise of the forever renters

#63

Post by ponector »

RecycledEle wrote: post #28

If you want to increase home ownership, you either need to change renters priorities, or pay them more, or make buying a house more affordable.

If you will pay renters more - prices will simply go up. The only solution is to increase available for rent housing.

Good solution could be city owned condos with apartments for rent.

Re: The rise of the forever renters

#64

Post by ponector »

EA-3167 wrote: post #40
blindriver wrote: post #26

Earlier quoted context omitted.

It’s generational ownership. My house will be paid off by the time I die. My kids will inherit it and probably in 25 years house prices will be so high that no one will be able to afford a house. I truly envision the situation so dire that they may need to both live in our house with 2 families but that will be better than suckling off the rest of the hedge funds buying up all the houses and developers forcing prices…

Houses don't last forever, you pay taxes, have to make fixes (sometimes really big ones), you need insurance and most people have a mortgage. Even if you're able to buy a house outright, and the future maintenance is no bother, who's to say that anyone in your family will want to hang on to your idea of good property? Maybe they'll sell it for cash, or turn around and rent it. The odds of a single average dwelling st…

With proper care houses lasts hundreds of years. You could easily rent Airbnb in a house from 16-th century or even older somewhere in Europe.

Re: The rise of the forever renters

#65

Post by kazinator »

epistasis wrote: post #59
kazinator wrote: post #50

Earlier quoted context omitted.

Due to immigration, the demand is practically inexhaustible. You cannot build fast enough to fix the problem.

What will all those new people do, maybe some fraction will build homes... For places like the US, which this article is about, we are nowhere near a high rate of immigration, and population growth is nowhere near historical rates. What is at historical rates is restriction on the ability to build homes. We have never had greater artificial restrictions on growth than now. Our history do the past century is coming up…

> densification that humanity has used throughout its history.

Yeah! Didn't the Romans, like, invent "concretum" for building 40 story condo towers?

We densified throughout history; what gives now?

Re: The rise of the forever renters

#66

Post by deterministic »

I can afford to buy a house but it makes more sense economically to buy assets instead. A house is not an asset in my view unless you buy it to rent out.

And buying a house to rent out might not be the best way to invest long term.

I highly recommend actually sitting down and doing a detailed value/cost comparison of what makes most sense over the long term. The result might surprise you. It certainly surprised me when I did it.

Re: The rise of the forever renters

#67

Post by epistasis »

kazinator wrote: post #65
epistasis wrote: post #59

Earlier quoted context omitted.

What will all those new people do, maybe some fraction will build homes... For places like the US, which this article is about, we are nowhere near a high rate of immigration, and population growth is nowhere near historical rates. What is at historical rates is restriction on the ability to build homes. We have never had greater artificial restrictions on growth than now. Our history do the past century is coming up…

> densification that humanity has used throughout its history. Yeah! Didn't the Romans, like, invent "concretum" for building 40 story condo towers? We densified throughout history; what gives now?

US code pretty much universally bans anything as dense as Roman cities.

Part of it is cars, part of it is exclusionary zoning.

Re: The rise of the forever renters

#69

Post by indecisive_user »

antisthenes wrote: post #62
dublinben wrote: post #22

Earlier quoted context omitted.

You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. I don't know any homeowners who would describe their housing costs as "fixed" and stress-free.

> You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. As a renter, these costs are essentially passed on to you anyway, so there's functionally no difference.

The difference is in predictability.

When you sign a 12 month lease, you know more or less how much you'll spend towards housing for the next year and it's easy to accurately predict a cost ceiling.

When you own a home, you know the minimum you'll spend is the mortgage+taxes but in an unlucky year your AC goes out and you get a hole in the roof that insurance doesn't cover and suddenly you've spent 20k that you didn't plan on.

Re: The rise of the forever renters

#70

Post by antisthenes »

indecisive_user wrote: post #69
antisthenes wrote: post #62

Earlier quoted context omitted.

> You're certainly setting a floor for your monthly housing costs, but there's all sorts of maintenance costs that crop up, unexpected repairs, and ever-increasing property taxes. As a renter, these costs are essentially passed on to you anyway, so there's functionally no difference.

The difference is in predictability. When you sign a 12 month lease, you know more or less how much you'll spend towards housing for the next year and it's easy to accurately predict a cost ceiling. When you own a home, you know the minimum you'll spend is the mortgage+taxes but in an unlucky year your AC goes out and you get a hole in the roof that insurance doesn't cover and suddenly you've spent 20k that you didn'…

Only if you have the planning capabilities of a 5-year old.

A house doesn't have that many things that can go wrong with it that would be unforseen expenses.

AC, water pipe leak, appliance breakdown, roof replacement. None of these cost above $8k, and for bigger things there is home insurance (e.g. tree fell on a house). Many of these things can be mitigated with a cheap fix that will last you those 12 months until you have the funds to do it properly.

Also, I see this sentiment a lot from people who have no problem dropping a $15-20k down payment on an car, but somehow spending that money for home maintenance is "scary" and "unpredictable".

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