Housing is at the root of many of the rich world’s problems (2020) • Hacker News Board

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

#691

Post by pksebben » Thu, Aug 18, 2022, 12:23 AM UTC

dougmwne wrote: post #390

wyre wrote: post #303

Earlier quoted context omitted.

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!

a very large portion of those goods and services are unnecessary, though. think about how frequently you have to buy a phone or replace a mechanical device - I've seen dishwashers from the 50s that still work, because they were built before artificial scarcity and planned obsolescence caught on. it's perfectly feasible to build a light bulb with an MTTF of hundreds of years. We're on a treadmill, because the economic incentives are contorted to favor unchecked consumerism.

We've gotten to a point where capitalism in it's current incarnation motivates a decrease in efficiency, which we call rent-seeking. it's maximise the dollars per productivity rather than maximise productivity.

It's not like people would do nothing without work, either. We've had periods of history where there was more time and more resources than there was work to be done, and it caused explosions of fields like art and science, both of which are stagnating under the current paradigm (relative to the capabilities we have as a species * population)

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

#692

Post by fleddr » Thu, Aug 18, 2022, 12:24 AM UTC

nemo44x wrote: post #542

I'm not sure people understand how expensive it is to build what we consider a house in the West. Materials are unbelievably expensive and if you go cheap you're going to be replacing a lot of them soon. Labor is through the roof expensive. People forget that the average home was ~700 square feet 100 years ago. It's 2400 today. How many people would be willing to put a family of 4 or 5 in a 700 square foot home today…

Good point.

Here in the Netherlands, an ordinary home, which is not an apartment and not even necessarily a fully stand-alone home cost 400K EUR minimum. That's land, material, labor combined. And you'd have a hard time actually building it due to all the shortages in both labor and material.

A big part of that 400K is land cost. Land that is typically given out for development by the municipality. It's one of their main revenue streams. So that means you can't make land cheaper without it directly coming at the expense of local taxes. And they're already running deficits even with these high land costs.

We have a plan to build an additional 1 million homes in 10 years, but it can't be done due to shortages.

The other thing nobody seems to talk about is what happens during an economic downturn. In the aftermath of 2008, almost nothing new got build. After all, why would a commercial developer build something without a buyer? Meanwhile, the demand for housing is still there and growing (population growth), it's just that people are unwilling/unable to step in, temporarily.

This piled up backlog is the reason for the current drastic shortage. As is the case for construction workers. All laid off during the downturn, and didn't come back.

Guess what will happen during the next economic downturn? Yep.

My point: there will be no point of supply meeting demand or even over-supply.

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

#693

Post by jjav » Thu, Aug 18, 2022, 12:25 AM UTC

distances wrote: post #567

bern4444 wrote: post #476

Earlier quoted context omitted.

Most of the people renting in a large city are doing so because buying is so expensive and unattainable. Not because they prefer renting.

And if it's attainable, does it make financial sense? I rent an apartment now, and to buy a similar would be roughly 1000 times the monthly rent. I would have to bet very heavily on appreciation before that made financial sense, even with the leverage of a mortgage.

> to buy a similar would be roughly 1000 times the monthly rent.

Have you somehow inherited into a rent-controlled apartment still paying the same $5 rent from 1800?

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

#694

Post by jjav » Thu, Aug 18, 2022, 12:35 AM UTC

ChrisLomont wrote: post #675

jjav wrote: post #614

Earlier quoted context omitted.

> Here is a starter list of things a house will need over the course of 30 years. My house is 25 years old (bought it new) and from your list, the only things I've done is exterior paint and water heater. I've also done cosmetic landscaping but that was strictly optional, as I like to work on the yard.

Factors also depend on the age of the house and your location - harsher climates are much worse on various house factors. A new house will have much less costs to maintain over 25 years than a 50 years old house. Having owned a few houses (both relatively new), and having gfs with houses and seeing the stuff they've done, and with helping my mom and sister with their house decisions and fixing, the list above is not…

> State Farm says to budget 1-4% of the value of a house for annual upkeep costs. You're significantly below that it sounds.

Certainly far below, maybe like 0.1%

Although basing it on the market value doesn't make much sense since housing prices cycle wildly up and down, whereas maintenance just increases with inflation.

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

#695

Post by mdavis6890 » Thu, Aug 18, 2022, 12:43 AM UTC

kelnos wrote: post #666

mdavis6890 wrote: post #580

Earlier quoted context omitted.

It provides a large artificial financial incentive to hold onto a property that you otherwise would sell. I also think it's not right to create this kind of arbitrary, large tax break that only applies in specific circumstances. I think if we're going to have a capital-gains tax (and maybe we shouldn't), then we should keep it simple and not have carve-outs. If I sell my house while I'm on my death bed, I pay all the…

> It provides a large artificial financial incentive to hold onto a property that you otherwise would sell. Maybe I'm cold-hearted, but "make it someone else's problem after I die" seems like a pretty decent incentive not to sell.

I don’t know, I think there are a lot of people that might not want to be owners anymore, but they just can’t bring GM themselves to sell and pay the taxes. Especially if they are, say, 60 and in dubious health anyway. So they hold, and hold, and hold some more for decades. I could see my own parents on this situation possibly.

Or I have a neighbor house that’s a rental, but it’s still owned by the same (now) 90+ year old woman who used to live there, but who moved out 20 years ago. Her 70+ year old son is managing it now… Does she really still want to own this house, or is inertia and fear of taxes holding her back from selling? I don’t know.

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

#696

Post by jjav » Thu, Aug 18, 2022, 12:54 AM UTC

namlem wrote: post #433

ROTMetro wrote: post #292

Earlier quoted context omitted.

I left California because I couldn't afford to own a home there.

Which is why California needs to fix the policies that led to its housing shortage. There is no inherent reason for California to be so expensive, it is a deliberate policy choice driven by local governments.

> Which is why California needs to fix the policies that led to its housing shortage. There is no inherent reason for California to be so expensive, it is a deliberate policy choice driven by local governments.

There's a lot of truth in that, but it's also an oversimplification.

There is plenty of cheap land in California, here, have a quarter acre lot for $15K:

https://www.redfin.com/CA/California-City/Princeton-Ave-9350...

Of course it's cheap since nobody wants to live there. If everyone wants to live in San Francisco, it's going to be much more expensive. Building more helps but in the end there's only so much that can realistically be built in 50 square miles. Some people will always be left out so there will always be some unmet demand, so it'll never be dirt-cheap.

So yes policy obstruction is a thing, but there are also inherent reasons why popular places will never be cheap.

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

#697

Post by bps4484 » Thu, Aug 18, 2022, 1:04 AM UTC

ChrisLomont wrote: post #684

bps4484 wrote: post #632

Earlier quoted context omitted.

"An no one will now rent, since your building has an effective value of $0 since it has become crap." This isn't true. You will have put money into the property to keep its value up, also writing off all of those expenses , so that you can still rent it out.

>You will have put money into the property to keep its value up You're ignoring what was written: if the building has value 0, then it is not maintained to keep the value up. Of you kept the value up, then it would not have an effective price of 0. Of course most people put money into properties exactly to keep value up. >also writing off all of those expenses Writing off expenses does not make them free - you are st…

oh it's certainly not free money (queue the seinfeld episode of kramer telling jerry to "write it off") but the discussion is about taxes or lacktherof. In no other investment that I know of are you allowed this double write-off: you can write off both the investment as it depreciates and the costs to make sure it doesn't depreciate.

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

#698

Post by jjav » Thu, Aug 18, 2022, 1:09 AM UTC

nonameiguess wrote: post #481

datacruncher01 wrote: post #132

It's a simple problem, we turned housing into an investment. Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism. The simple solution is we need more housing in cities and suburbs. How we get there is an exercise that's taken on by local housing authorities and they are not incentivized to solve the problem. That's because they work for voters who…

> It's a simple problem, we turned housing into an investment. Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism. I don't know how this came to be such an obviously true common wisdom answer here at Hacker news. It's an extremely incomplete account of what causes NIMBYism. I'm sure at least some of it is purely a desire to maintain land value ap…

> The basic cause of NIMBYism is these are people's homes you're talking about. They live there.

You hit the nail on the head!

I'm often confused by how the vibe here is that thinking of housing as an investment is bad, and yet simultaneously consider that all housing-related decisions are strictly financially driven!

Reality from everyone I know is that housing is primarily about being a home. A nice place to live. A stable place for the kids to grow up. That's the primary motivation.

Investment? Sure, it's nice if it goes up over a lifetime, but that's not a driver in any decisions.

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

#699

Post by refurb » Thu, Aug 18, 2022, 1:11 AM UTC

goodpoint wrote: post #209

the_gastropod wrote: post #129

Earlier quoted context omitted.

This all-or-nothing thinking is, itself, a problem. Capitalism is a tool. And it's good at many things. Creating competition and innovation in consumer goods is one area it's obviously very good at. It is not good at equity. Externalities are a massive problem raw capitalism has no affordance for addressing. Regulations (another tool) are necessary to smooth out capitalism's rough edges. You'll find very few people t…

> Creating competition and innovation in consumer goods is one area it's obviously very good at. Not really.

Ah yes, the non-capitalist nations are known for their broad selection of consumer goods, competition and cutting edge innovation, right?

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

#700

Post by jjav » Thu, Aug 18, 2022, 1:18 AM UTC

pochekailov wrote: post #14

Nothing will change while the homeowners have more political power than the renters. Even in the cities where the renter population is bigger than the homeowners, such as in Seattle, half of the votes come from people of > 65 years old (all of whom are homeowners, likely more than one home). Young people simply won't vote at all. There is very little incentives for the young people to vote. Even if you cancel all the…

> Nothing will change while the homeowners have more political power than the renters.

Homeowners and renters of course have the exact same politica power, one vote each.

If renters are for whatever reason choosing to not exercise that power, what can one do? They are free to vote, please do.

That said, I always vote and not once has there been anything on the ballot on whether to build more in my town, so it's not like it matters on that front.