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While food, clothing, tech, even a lot of services have gone way down as a portion of median income, housing has gone disproportionally up. The only thing to co

While food, clothing, tech, even a lot of services have gone way down as a portion of median income, housing has gone disproportionally up. The only thing to compare it to is healthcare costs. Various government intervention that collude together to make this happen - mortgage interest tax deduction, building ordinances for areas, housing bubble bailouts. That is, it's mostly artificial. Innovation in this area seems prime, therefore. This could mean forcing the rules to bend, or by allowing ways to opt out of housing all together as the man described in this article does.

PythonicAlpha 11y ago
The reason (or at least one of them) is, that our money in the western countries has lost it's value much more, than we should believe. Costs for food and the like is kept low -- so we get the impression, that we get the same for the dollar as before. But in reality, the devaluation of the money is much higher, because of the masses of money that is pumped into the system since 2008 in the US and also in Europe. The cost for food is kept low, because of different reasons, for example rationalization and also because worker-costs for low-cost work is not rising but falling. But, the discrepancy of our system, where a very small number of people have much much more money has to become manifest somewhere.
eli_gottlieb 11y ago
The basic issue is that food, clothing, and technology are treated as consumer goods, if sometimes durable consumer goods. Housing is treated as an investment asset, and the economy currently runs on asset bubbles. Housing won't become affordable until we shift the growth-engine of the economy back to sustainable, wage-driven consumption.
- yummyfajitas 11y ago
  Housing is only an investment asset in certain disfunctional housing markets (e.g., NYC, SF). The problem in these markets is that it's illegal to sell only housing - you can usually only sell housing + weird quasi-property rights (rent control/stabilization, landlord isn't allowed to easily get rid of tenants, etc). In a market of renters who have leases that don't need to be renewed except via mutual consent of both parties, housing is very strictly a consumer good - you are buying X months of housing at a specific location for $Y. Houston has a very functional housing market. Their secrets? No exclusionary zoning, no NIMBYs (Houston issued 64k housing permits in 2014, California issued 83k), no rent control, just build what people want and then sell it under mutually agreeable terms.
  - lhopki01 11y ago
    Yet ask people where they would prefer to live and more want to live in New York than Houston. A city is more than just a sprawl of houses. Much of the attraction of cities comes from other things.
    - maratd 11y ago
      Even more relevant, should Houston become more preferable to New York, you'll see the same silly regulations and rules crop up to keep the riff-raff out.
    - logfromblammo 11y ago
      I'd rather live in Houston than New York. Of course, I'd also rather live in a paper bag at the bottom of a wet ditch than to be subjected to the local culture, politics, and economy of some cities. (Looking at you, DC sprawl.) You just can't effectively reduce the personal appeal of cities to a single input variable. But in this case, the ratio of living expenses (incl. housing) to median salaries in the usual suspects roundup of job titles provides a clear advantage to Houston. Public transportation tips toward New York. Compatibility with local culture tips toward New York. Local politics tips toward New York. Pleasantness of the weather barely tips toward Houston. Non-homogeneity of the populace is a wash. Lower crime rate goes to New York. Availability of tasty food is a wash. Public politeness goes to Houston. Lighter tax burden goes to Houston, big time. On public education, I don't even know. You can attach an a la carte dollar value to each of the attributes of a city, and sum them up to get a rough desirability value. That's essentially the answer to the question "How much extra would I be willing to pay to live in this new place instead of where I live now?" You can establish a base value by adding differences in salary and expenses. Then you assign a value to all the subjective things, like being able to buy corn on the cob from a street vendor, or being able to escape the urban sprawl for weekends and vacations. How much is it worth to you to have the option to not drive a car, or to easily find a parking space when you do? How much would someone have to pay you to have neighbors that freak out when they see a dandelion on your lawn? How much would you have to be paid to put up with heavy pollution, or a torturous commute? Add it all up, and the highest-valued city is where you would probably be happiest. Depending on your preferences, the presence or lack of zoning might be a single factor that could cause you to prefer one city over another, but probably only to the extent that it affects your monthly housing expenses.
- avn2109 11y ago
  >> "...and the economy currently runs on asset bubbles." @eli_gottleib: Where can we read more about this? It feels true but I'd like to see more details.
martingordon 11y ago
I believe the biggest disconnect is that working requires government authorization but owning real estate does not. Ordinary citizens not only compete with locals for real estate, they compete with the world's millionaires who are looking for (relatively) safe investments.
laotzu 11y ago
Buckminster Fuller was a pioneer of affordable and efficient housing engineering who began his career shortly after the Great Depression. In his 1980 book Grunch of Giants, he makes the prescient observations of the cyclical failure and subsequent bailouts of the US real estate and automotive industries and the high barriers to entry for innovators in this area: >The first Beech-produced Fuller House was widely publicized. Soon 36,000 unsolicited orders, many with checks attached, were received for the Fuller House. At this point it was discovered that no distributing industry existed. The general building contractors had none of the complex tools for several-in-one-day deliveries of the dwelling machines. None of the building codes would permit their erection. The severest blow of all was that both the national electricians and plumber's organizations said they would have to be paid to take apart all the prefabricated and pre-installed wiring and plumbing, and put it together again, else they would not connect the otherwise "ready to live in" house to the town's or city's electrical lines and water mains. They held exclusively the official license to do this by long-time politically enacted laws. No banks were willing to provide mortgages to cover the sale of the Fuller Houses. >Fortune made the mistake of assuming that "the industry industry missed" had at last come of age. But evolution's inauguration of the "livingry" industry had to wait until capitalism had graduated, from its forcenturies-held assumption that physical land property constituted capitalism itself, to the startling realization that the strictly metaphysical, technological "know-how" had become the most profitable property as the key to exploitation of the invisible industries of chemistry, metallurgy, electromagnetics, and atomics. >Reorganizing all its strategies, capitalism has now unloaded its real estate property onto the people by refusing to rent and forcing people to buy their condo or coop homes. Evolution had to wait upon the government guaranteed, forty-year mortgage-financing of housing's costs to exceed humans' financial capability to acquire. Evolution had to wait until the U.S. mass-production of automobiles exclusively as a money-making business had been made obsolete by the technological felicity of manufacturing by other countries' producers, thus leaving U.S. productivity to reorient itself to the necessity of rehousing all humanity in mass-produced, aerospace-level-of-technology livingry. >Evolution was clearly intent on postponing the inception of the livingry service industry until humanity had graduated from its pre-twentieth century condition as a planet of remote nations to an integrated global society, all of which waited upon completion of a world-around network of highways, airlines, and telephones, and automobiles and jumbo jet airplanes. All these evolutionary events (requisite to the livingry industry) have now taken place or are about to take place in the very near future. If the political systems do not eliminate humanity with their weapons, the half-century-gestating, world-around livingry service-industry will soon be born.

PythonicAlpha 11y ago

The reason (or at least one of them) is, that our money in the western countries has lost it's value much more, than we should believe. Costs for food and the like is kept low -- so we get the impression, that we get the same for the dollar as before. But in reality, the devaluation of the money is much higher, because of the masses of money that is pumped into the system since 2008 in the US and also in Europe. The cost for food is kept low, because of different reasons, for example rationalization and also because worker-costs for low-cost work is not rising but falling. But, the discrepancy of our system, where a very small number of people have much much more money has to become manifest somewhere.

eli_gottlieb 11y ago

The basic issue is that food, clothing, and technology are treated as consumer goods, if sometimes durable consumer goods. Housing is treated as an investment asset, and the economy currently runs on asset bubbles. Housing won't become affordable until we shift the growth-engine of the economy back to sustainable, wage-driven consumption.

yummyfajitas 11y ago
Housing is only an investment asset in certain disfunctional housing markets (e.g., NYC, SF). The problem in these markets is that it's illegal to sell only housing - you can usually only sell housing + weird quasi-property rights (rent control/stabilization, landlord isn't allowed to easily get rid of tenants, etc). In a market of renters who have leases that don't need to be renewed except via mutual consent of both parties, housing is very strictly a consumer good - you are buying X months of housing at a specific location for $Y. Houston has a very functional housing market. Their secrets? No exclusionary zoning, no NIMBYs (Houston issued 64k housing permits in 2014, California issued 83k), no rent control, just build what people want and then sell it under mutually agreeable terms.
- lhopki01 11y ago
  Yet ask people where they would prefer to live and more want to live in New York than Houston. A city is more than just a sprawl of houses. Much of the attraction of cities comes from other things.
  - maratd 11y ago
    Even more relevant, should Houston become more preferable to New York, you'll see the same silly regulations and rules crop up to keep the riff-raff out.
  - logfromblammo 11y ago
    I'd rather live in Houston than New York. Of course, I'd also rather live in a paper bag at the bottom of a wet ditch than to be subjected to the local culture, politics, and economy of some cities. (Looking at you, DC sprawl.) You just can't effectively reduce the personal appeal of cities to a single input variable. But in this case, the ratio of living expenses (incl. housing) to median salaries in the usual suspects roundup of job titles provides a clear advantage to Houston. Public transportation tips toward New York. Compatibility with local culture tips toward New York. Local politics tips toward New York. Pleasantness of the weather barely tips toward Houston. Non-homogeneity of the populace is a wash. Lower crime rate goes to New York. Availability of tasty food is a wash. Public politeness goes to Houston. Lighter tax burden goes to Houston, big time. On public education, I don't even know. You can attach an a la carte dollar value to each of the attributes of a city, and sum them up to get a rough desirability value. That's essentially the answer to the question "How much extra would I be willing to pay to live in this new place instead of where I live now?" You can establish a base value by adding differences in salary and expenses. Then you assign a value to all the subjective things, like being able to buy corn on the cob from a street vendor, or being able to escape the urban sprawl for weekends and vacations. How much is it worth to you to have the option to not drive a car, or to easily find a parking space when you do? How much would someone have to pay you to have neighbors that freak out when they see a dandelion on your lawn? How much would you have to be paid to put up with heavy pollution, or a torturous commute? Add it all up, and the highest-valued city is where you would probably be happiest. Depending on your preferences, the presence or lack of zoning might be a single factor that could cause you to prefer one city over another, but probably only to the extent that it affects your monthly housing expenses.
avn2109 11y ago
>> "...and the economy currently runs on asset bubbles." @eli_gottleib: Where can we read more about this? It feels true but I'd like to see more details.

martingordon 11y ago

I believe the biggest disconnect is that working requires government authorization but owning real estate does not. Ordinary citizens not only compete with locals for real estate, they compete with the world's millionaires who are looking for (relatively) safe investments.

laotzu 11y ago

Buckminster Fuller was a pioneer of affordable and efficient housing engineering who began his career shortly after the Great Depression. In his 1980 book Grunch of Giants, he makes the prescient observations of the cyclical failure and subsequent bailouts of the US real estate and automotive industries and the high barriers to entry for innovators in this area: >The first Beech-produced Fuller House was widely publicized. Soon 36,000 unsolicited orders, many with checks attached, were received for the Fuller House. At this point it was discovered that no distributing industry existed. The general building contractors had none of the complex tools for several-in-one-day deliveries of the dwelling machines. None of the building codes would permit their erection. The severest blow of all was that both the national electricians and plumber's organizations said they would have to be paid to take apart all the prefabricated and pre-installed wiring and plumbing, and put it together again, else they would not connect the otherwise "ready to live in" house to the town's or city's electrical lines and water mains. They held exclusively the official license to do this by long-time politically enacted laws. No banks were willing to provide mortgages to cover the sale of the Fuller Houses. >Fortune made the mistake of assuming that "the industry industry missed" had at last come of age. But evolution's inauguration of the "livingry" industry had to wait until capitalism had graduated, from its forcenturies-held assumption that physical land property constituted capitalism itself, to the startling realization that the strictly metaphysical, technological "know-how" had become the most profitable property as the key to exploitation of the invisible industries of chemistry, metallurgy, electromagnetics, and atomics. >Reorganizing all its strategies, capitalism has now unloaded its real estate property onto the people by refusing to rent and forcing people to buy their condo or coop homes. Evolution had to wait upon the government guaranteed, forty-year mortgage-financing of housing's costs to exceed humans' financial capability to acquire. Evolution had to wait until the U.S. mass-production of automobiles exclusively as a money-making business had been made obsolete by the technological felicity of manufacturing by other countries' producers, thus leaving U.S. productivity to reorient itself to the necessity of rehousing all humanity in mass-produced, aerospace-level-of-technology livingry. >Evolution was clearly intent on postponing the inception of the livingry service industry until humanity had graduated from its pre-twentieth century condition as a planet of remote nations to an integrated global society, all of which waited upon completion of a world-around network of highways, airlines, and telephones, and automobiles and jumbo jet airplanes. All these evolutionary events (requisite to the livingry industry) have now taken place or are about to take place in the very near future. If the political systems do not eliminate humanity with their weapons, the half-century-gestating, world-around livingry service-industry will soon be born.