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I agree with you. Which is why we need more affordable houses, and less unaffordable houses. Because many in this world have more than they need, you can get

I agree with you. Which is why we need more affordable houses, and less unaffordable houses. Because many in this world have more than they need, you can get the important, shelter by renting, lucky us! We can affordably live in things that took thousands of man hours of labor, and more capital, for a low monthly fee. One day, when robots build houses, owning can replace renting. Or when everyone stops the cargo cult of HOUSES MUST GO UP IN PRICE OR LIFE SUXORZ!!! It's funny how owning something distorts ones perception. What else in the world MUST GO UP IN PRICE! Notice I say price and not value, for it is truly only the price going up. Their utility remains static, or decreases as the view is blocked by high rises. Paperclips must go up in price! I own some!

lostlogin 10y ago
> What else in the world MUST GO UP IN PRICE! Pretty much everything. The stagnation and zero inflation of many economies is a problem.
- tunap 10y ago
  Therein lies the rub: infinite growth cannot be sustained in any finite system. This fosters an environment where real value & perceived value diverge and balloons occur...and pop. Beany Baby Marketing 101.
  - jventura 10y ago
    Infinite growth is possible and it is what our societies aim for. But, in its deepest, it is a pseudo-growth, because prices rise, but eventually salaries must eventually rise again to match the prices.. So, in the end, everything gets back to the same relative levels!
    - dredmorbius 10y ago
      That isn't growth -- real increase in wealth, as Adam Smith defines it ("the annual labour and produce of the Nation"), or as mismeasured to a lesser degree by GNP / GDP -- but monetary inflation.
    - roschdal 10y ago
      Some research finds that growth has limits: https://en.m.wikipedia.org/wiki/The_Limits_to_Growth https://en.m.wikipedia.org/wiki/The_Limits_to_Growth
    - tunap 10y ago
      I concur, it is what developing economies strive for and what developed(sic) economies strive to maintain. Anything is possible, it is the methodology that provides the results(good & bad). This philosophy has been the acme of societal success since blood-letting was believed to be a cure all & the earth was thought to be the center of the universe. The tangible reality is, higher & higher margins are required to achieve that growth. Whether this is achieved by tech, innovation, exploitation or inflation is moot, what is certain is always more has it's costs & limits.
tsukikage 10y ago
The problem is this is far removed from the world that we live in. Here in the UK, at least in the south/east where the jobs are, monthly rents tend to be the same order of magnitude as monthly mortgage payments on a 25-year loan for a home of the same size in the same location. The choice therefore is not between low rent or high purchase cost; it's between making about the same payment for 25 years then never again, or making it for your whole life (while your landlord keeps it for their nest egg). Since you have to live somewhere, if you are able to get a loan at all, and barring expectation of massive disaster, buying seems to be a no-brainer. Two things could change that equation. We could add vast numbers of rental properties to the market, enough that the competition forces down rent prices by a very significant amount. The private sector is certainly not going to shoot itself in the foot in this way, and conservative UK governments have been pushing hard in the other direction, so this seems unlikely. The other alternative would be to reduce the need for homes in expensive places by having more people live together, in cheaper areas. We're seeing this happen by default now as young people are priced out of the market, but widespread telecommuting has the potential to make this a plausible deliberate choice rather than a forced decision. No idea how the US situation compares, natch
- rahimnathwani 10y ago
  In the UK, very few mortgage deals have fixed rates further out than 5 years. So as a buyer you're also taking interest rate risk. Sure, this hasn't bitten anyone for the last 20 years, but it happened in the 80s.
- ZenoArrow 10y ago
  IMO, the best solution is neither of the two you mentioned. I'd say the best possible solution would be found in the increased availability of microhomes (to buy, not to rent). It tackles two problems in one go. First of all, many more people would be in a position to buy a home without taking on a mortgage. They would then be in a better place to save their money in order to move to a bigger place (if they so wished). Secondly, because mortgages would no longer be as great a requirement to purchase a house, mortgage lenders would be incentivised to offer people attractive mortgage rates in order to encourage people to borrow money. In addition, microhomes need not result in large compromises. There are some great microhome designs on the market that offer attractive features whilst still coming in at a lower price than most existing UK houses. I quite like the Dwelle designs, but there are plenty of other options available. http://www.dwelle.co.uk/ http://www.dwelle.co.uk/ As a side note, I have a book on economics called 'The Grip of Death'. The title of the book comes from the meaning of the word mortgage, which I found interesting... Mort = Death, Gage = Pledge ('Grip' is accurate if the pledge becomes an obligation). I personally believe long term mortgage arrangements to have a tendency to damage personal enjoyment of life, so the name seems apt.
WA 10y ago
> Notice I say price and not value, for it is truly only the price going up. Their utility remains static, or decreases as the view is blocked by high rises. Interesting observation, does make sense. I suspect a strong relationship to the land the house is built on. The value of the house itself should go down indeed, because the house deteriorates from the moment it is built. However, the house makes that land usable and the land underneath it might become more valuable, because more people want it in dense areas. Accordingly, house prices fall in less desired areas.
rahimnathwani 10y ago
Robots building houses wouldn't solve the problem. The cost of construction makes up a small part of the price of a house or apartment in attractive cities like SF, NYC, London etc. Separately, I'm not sure I understand your point about price vs. value. In SF or London, apartments have high value (evidenced by people willing to pay high rent to live in them). Maybe in some places (Beijing?) apartment prices are hard to justify based on rental yield. But what makes you think home prices in general are divorced from home 'values'? What would make prices go down that would not also not decrease whatever measure of 'value' you're using?

lostlogin 10y ago

> What else in the world MUST GO UP IN PRICE! Pretty much everything. The stagnation and zero inflation of many economies is a problem.

tunap 10y ago
Therein lies the rub: infinite growth cannot be sustained in any finite system. This fosters an environment where real value & perceived value diverge and balloons occur...and pop. Beany Baby Marketing 101.
- jventura 10y ago
  Infinite growth is possible and it is what our societies aim for. But, in its deepest, it is a pseudo-growth, because prices rise, but eventually salaries must eventually rise again to match the prices.. So, in the end, everything gets back to the same relative levels!
  - dredmorbius 10y ago
    That isn't growth -- real increase in wealth, as Adam Smith defines it ("the annual labour and produce of the Nation"), or as mismeasured to a lesser degree by GNP / GDP -- but monetary inflation.
  - roschdal 10y ago
    Some research finds that growth has limits: https://en.m.wikipedia.org/wiki/The_Limits_to_Growth https://en.m.wikipedia.org/wiki/The_Limits_to_Growth
  - tunap 10y ago
    I concur, it is what developing economies strive for and what developed(sic) economies strive to maintain. Anything is possible, it is the methodology that provides the results(good & bad). This philosophy has been the acme of societal success since blood-letting was believed to be a cure all & the earth was thought to be the center of the universe. The tangible reality is, higher & higher margins are required to achieve that growth. Whether this is achieved by tech, innovation, exploitation or inflation is moot, what is certain is always more has it's costs & limits.

tsukikage 10y ago

The problem is this is far removed from the world that we live in. Here in the UK, at least in the south/east where the jobs are, monthly rents tend to be the same order of magnitude as monthly mortgage payments on a 25-year loan for a home of the same size in the same location. The choice therefore is not between low rent or high purchase cost; it's between making about the same payment for 25 years then never again, or making it for your whole life (while your landlord keeps it for their nest egg). Since you have to live somewhere, if you are able to get a loan at all, and barring expectation of massive disaster, buying seems to be a no-brainer. Two things could change that equation. We could add vast numbers of rental properties to the market, enough that the competition forces down rent prices by a very significant amount. The private sector is certainly not going to shoot itself in the foot in this way, and conservative UK governments have been pushing hard in the other direction, so this seems unlikely. The other alternative would be to reduce the need for homes in expensive places by having more people live together, in cheaper areas. We're seeing this happen by default now as young people are priced out of the market, but widespread telecommuting has the potential to make this a plausible deliberate choice rather than a forced decision. No idea how the US situation compares, natch

rahimnathwani 10y ago
In the UK, very few mortgage deals have fixed rates further out than 5 years. So as a buyer you're also taking interest rate risk. Sure, this hasn't bitten anyone for the last 20 years, but it happened in the 80s.
ZenoArrow 10y ago
IMO, the best solution is neither of the two you mentioned. I'd say the best possible solution would be found in the increased availability of microhomes (to buy, not to rent). It tackles two problems in one go. First of all, many more people would be in a position to buy a home without taking on a mortgage. They would then be in a better place to save their money in order to move to a bigger place (if they so wished). Secondly, because mortgages would no longer be as great a requirement to purchase a house, mortgage lenders would be incentivised to offer people attractive mortgage rates in order to encourage people to borrow money. In addition, microhomes need not result in large compromises. There are some great microhome designs on the market that offer attractive features whilst still coming in at a lower price than most existing UK houses. I quite like the Dwelle designs, but there are plenty of other options available. http://www.dwelle.co.uk/ http://www.dwelle.co.uk/ As a side note, I have a book on economics called 'The Grip of Death'. The title of the book comes from the meaning of the word mortgage, which I found interesting... Mort = Death, Gage = Pledge ('Grip' is accurate if the pledge becomes an obligation). I personally believe long term mortgage arrangements to have a tendency to damage personal enjoyment of life, so the name seems apt.

WA 10y ago

> Notice I say price and not value, for it is truly only the price going up. Their utility remains static, or decreases as the view is blocked by high rises. Interesting observation, does make sense. I suspect a strong relationship to the land the house is built on. The value of the house itself should go down indeed, because the house deteriorates from the moment it is built. However, the house makes that land usable and the land underneath it might become more valuable, because more people want it in dense areas. Accordingly, house prices fall in less desired areas.

rahimnathwani 10y ago

Robots building houses wouldn't solve the problem. The cost of construction makes up a small part of the price of a house or apartment in attractive cities like SF, NYC, London etc. Separately, I'm not sure I understand your point about price vs. value. In SF or London, apartments have high value (evidenced by people willing to pay high rent to live in them). Maybe in some places (Beijing?) apartment prices are hard to justify based on rental yield. But what makes you think home prices in general are divorced from home 'values'? What would make prices go down that would not also not decrease whatever measure of 'value' you're using?