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Think about this for a second-- is holding onto desirable real estate as a wealth asset really a sustainable method of building wealth for the middle class? In

Think about this for a second-- is holding onto desirable real estate as a wealth asset really a sustainable method of building wealth for the middle class? In the Bay Area, you see what happens when the supply runs out: the middle class becomes renters for life. ...Real estate has been a boon for some in the middle class, but it's important to consider the wider implications of speculation in land values as a source of wealth-- it's ultimately unsustainable and highly regressive.

douche 10y ago
It's been the most consistently effective method for at least 2500 years, probably longer than that. The oldest formula in the book is land=wealth.
- bufordsharkley 10y ago
  But for whom? For instance, consider John Arrillaga[0]. Land in the Silicon Valley made him billions. But does that make this a sensible system? Silicon Valley would exist whether or not people speculated in land, and yet we consider fishing for gains to be a noble pursuit. I think it actively holds back actual improvements in communities. [0] https://en.wikipedia.org/wiki/John_Arrillaga https://en.wikipedia.org/wiki/John_Arrillaga
Spooky23 10y ago
Frankly, the bizarre phenomena that is Silicon Valley is the problem, not real estate. It's a bubble that will burst.
- bufordsharkley 10y ago
  Compare SF to other cities in the country, and you'll see that it's not some outlier: http://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20?fsrc=scn/tw/te/bl/ed/americanhousepricesrealtycheck http://www.economist.com/blogs/graphicdetail/2016/08/daily-c...
  - Spooky23 10y ago
    Those charts make my point. Look at the prices in real terms. SFO is more than 2x NYC and 4x the national average! A $400k home in NYC is within reasonable reach of a dual income professional couple. Prices are high generally because capital is cheap and monetary policy has made other traditional "safe" investments useless. The income ratio based numbers reflect how the "middle class" is getting the proverbial shaft. When wages are stagnant for 30 years and property appreciates, you need to accept the fact that you're not capable of supporting a circa 1986 middle class standard of living. My grandfather owned a home in NYC, kept new cars, and had a summer camp in the mountains on a blue-collar city government income and second job as a boilerman in the 1960s. That's no longer achievable. I personally barely have that level of buying power as a IT executive.
    - bufordsharkley 10y ago
      But how can you support the statement that the phenomenon of Silicon Valley created the unaffordability of houses when we see the same increases across the country? If it really was the tech scene, we'd expect the increases to be much higher in the Bay Area.
      - Spooky23 10y ago
        Click on the "prices in real terms" chart, which factors out inflation. The average US price in real terms is up like 10% since 1980. The average SFO price is 400% above that. The average NYC price is 200% more. That's a real estate bubble. Lots of factors influence what's happening. Between Tech workers who make too much, Chinese capital flight liking for a home and stupid bank underwriting practices, demand is wacky in a few cities.
        bufordsharkley 10y ago
        Compare to Los Angeles, a city with similarly broken land-use policies to SF, but without the tech scene. It only lags by a small amount. I simply don't think you can attribute the tech scene as a unique cause of this.
fred_is_fred 10y ago
This is going to sound insane on a site like this but you don't have to live in SF. You can certainly choose too, but if you look at the pros/cons of job offers, housing just makes SF untenable. There are plenty of other cities with plenty of other jobs.

douche 10y ago

It's been the most consistently effective method for at least 2500 years, probably longer than that. The oldest formula in the book is land=wealth.

bufordsharkley 10y ago
But for whom? For instance, consider John Arrillaga[0]. Land in the Silicon Valley made him billions. But does that make this a sensible system? Silicon Valley would exist whether or not people speculated in land, and yet we consider fishing for gains to be a noble pursuit. I think it actively holds back actual improvements in communities. [0] https://en.wikipedia.org/wiki/John_Arrillaga https://en.wikipedia.org/wiki/John_Arrillaga

Spooky23 10y ago

Frankly, the bizarre phenomena that is Silicon Valley is the problem, not real estate. It's a bubble that will burst.

bufordsharkley 10y ago
Compare SF to other cities in the country, and you'll see that it's not some outlier: http://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20?fsrc=scn/tw/te/bl/ed/americanhousepricesrealtycheck http://www.economist.com/blogs/graphicdetail/2016/08/daily-c...
- Spooky23 10y ago
  Those charts make my point. Look at the prices in real terms. SFO is more than 2x NYC and 4x the national average! A $400k home in NYC is within reasonable reach of a dual income professional couple. Prices are high generally because capital is cheap and monetary policy has made other traditional "safe" investments useless. The income ratio based numbers reflect how the "middle class" is getting the proverbial shaft. When wages are stagnant for 30 years and property appreciates, you need to accept the fact that you're not capable of supporting a circa 1986 middle class standard of living. My grandfather owned a home in NYC, kept new cars, and had a summer camp in the mountains on a blue-collar city government income and second job as a boilerman in the 1960s. That's no longer achievable. I personally barely have that level of buying power as a IT executive.
  - bufordsharkley 10y ago
    But how can you support the statement that the phenomenon of Silicon Valley created the unaffordability of houses when we see the same increases across the country? If it really was the tech scene, we'd expect the increases to be much higher in the Bay Area.
    - Spooky23 10y ago
      Click on the "prices in real terms" chart, which factors out inflation. The average US price in real terms is up like 10% since 1980. The average SFO price is 400% above that. The average NYC price is 200% more. That's a real estate bubble. Lots of factors influence what's happening. Between Tech workers who make too much, Chinese capital flight liking for a home and stupid bank underwriting practices, demand is wacky in a few cities.
      - bufordsharkley 10y ago
        Compare to Los Angeles, a city with similarly broken land-use policies to SF, but without the tech scene. It only lags by a small amount. I simply don't think you can attribute the tech scene as a unique cause of this.

fred_is_fred 10y ago

This is going to sound insane on a site like this but you don't have to live in SF. You can certainly choose too, but if you look at the pros/cons of job offers, housing just makes SF untenable. There are plenty of other cities with plenty of other jobs.