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The Rate of Return on Everything, 1870–2015 (2019)

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Re: The Rate of Return on Everything, 1870–2015 (2019)

#61

Post by travisb »

PostOnce wrote: post #56
Retric wrote: post #48

Earlier quoted context omitted.

People get much larger houses today because they can afford much larger houses. This comes from both increased prosperity and having fewer kids. 1950s: The average new home sold for $82,098. It had 983 square feet of floor space and a household size of 3.37 people, or 292 square feet per person. 2010s: The average new home ($292,700) offers 924 square feet per person (2.59 people per household, 2,392 total square fee…

Around here, they're building bigger houses, but also on much smaller plots without gardens or dogs or tree-houses or places for kids to play outdoors. I suspect it's the same in a lot of places. Maybe these square-foot-per-person calculations should also include square feet of land.

If you are going to do that, other play grounds should also be counted: the forests and fields which used to be nearby, the per-child space in nearby parks, etc.

All these are places children used to go unsupervised, but now mostly don't.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#62

Post by gamepsys »

georgeecollins wrote: post #25
_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

To help you conceptualize how that is possible: 100 years ago the world population was 2 billion, and now it is 8 billion. While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast. That's why -- for example-- the US gov't in the 1850s could just hand out 40 acre plots of land to people. They can still do that, but it has to be way out in Alaska…

> So the wealth of everyone is going up faster than the supply of desirable land

We are also slowing down the rate we are making land desirable. During the 50s-70s we had massive success by creating suburbs that were connected to city centers. Due to how geography works, new suburbs are further from city centers and inherently less desirable. We have developed most of the geographically appealing regions of the US. The regions that can support more sprawl are seeing growth at a high enough rate that local infrastructure such as schools, roads, water, and construction labor is being stressed.

In the not too distant future we will have climate change that will displace people and a declining population that will reduce housing demand. Combine that with new building techniques/materials and in 100 years the housing situation will be totally different than today.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#63

Post by TacticalCoder »

JumpCrisscross wrote: post #54

“the only exceptions to that rule happen in the years in or around wartime. In peacetime, r has always been much greater than g” This explains the enduring link between populism and war mongering.

> In peacetime, r has always been much greater than g

This is an ultra simplistic formula, made by someone who's been born, raised and fed in a highly socialist country where the only word politicians know is "tax".

Re: The Rate of Return on Everything, 1870–2015 (2019)

#64

Post by llm_trw »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

>It seems to defy logic

There are more people than ever and the surface area of the planet hasn't increased.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#65

Post by lotsofpulp »

thbb123 wrote: post #53
georgeecollins wrote: post #25

Earlier quoted context omitted.

To help you conceptualize how that is possible: 100 years ago the world population was 2 billion, and now it is 8 billion. While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast. That's why -- for example-- the US gov't in the 1850s could just hand out 40 acre plots of land to people. They can still do that, but it has to be way out in Alaska…

To add to that, a house a hundred years ago was nothing like a house today: building codes, square footage per person, heating, plumbing, connectivity... Building and maintaining a decent housing unit is far more expensive in material and energy than it was 60 years ago.

To add to that, household size also decreased.

https://www.pewresearch.org/short-reads/2019/10/01/the-numbe...

Re: The Rate of Return on Everything, 1870–2015 (2019)

#66

Post by thfuran »

llm_trw wrote: post #64
_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

>It seems to defy logic There are more people than ever and the surface area of the planet hasn't increased.

The surface area of the planet is pretty much entirely unrelated to the cost of housing.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#67

Post by mensetmanusman »

throw_pm23 wrote: post #42
mensetmanusman wrote: post #34

Earlier quoted context omitted.

Housing prices may collapse over the next 50 years as the population pyramid inverts and buyers demand decreases due to fewer individuals. What is the definition of long-term though?

I'm not sure, population already plummeted in many places while prices went up, as people prefer to live less densely then they used to.

As the housing maintenance labor force shrinks and it gets more expensive for elderly to maintain their non dense homes though, the value should decrease and become more affordable for the young who can do those labor things. Maybe?

Re: The Rate of Return on Everything, 1870–2015 (2019)

#68

Post by cyberax »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

> I don't understand how housing can increase in cost in a stable steady manner

It's the density death spiral. Dense housing gets more expensive (yes, dense housing IS more expensive!), that in turn drives even more density.

The only way to fix it? Promote suburbs and smaller cities. There is literally _no_ other fix.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#69

Post by JumpCrisscross »

TacticalCoder wrote: post #63
JumpCrisscross wrote: post #54

“the only exceptions to that rule happen in the years in or around wartime. In peacetime, r has always been much greater than g” This explains the enduring link between populism and war mongering.

> In peacetime, r has always been much greater than g This is an ultra simplistic formula, made by someone who's been born, raised and fed in a highly socialist country where the only word politicians know is "tax".

> is an ultra simplistic formula

No shit. What gave it away, the two terms or the inequality? :)

Joking aside, it's simplistic because it's elementary. If real returns exceed real growth, ceteris paribus, you have a net flow of principal (so to speak) from labour to capital. That doesn't mean one can conclude the argument with those two variables alone. But it's a valid starting point, and concludes with many solutions other than increasing taxes to reduce r.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#70

Post by JumpCrisscross »

cyberax wrote: post #68
_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

> I don't understand how housing can increase in cost in a stable steady manner It's the density death spiral. Dense housing gets more expensive (yes, dense housing IS more expensive!), that in turn drives even more density. The only way to fix it? Promote suburbs and smaller cities. There is literally _no_ other fix.

> yes, dense housing IS more expensive

Dense housing is more expensive. Dense living massively less so.

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