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The High Cost of a Home Is Turning American Millennials into the New Serfs

154 points by shawndumas 10y ago

HNLogInShit 10y ago
Time to stop using this stupid term. Actually, it was never time to use it in the first place.
bitwize 10y ago
Millennials want to live in cities. Specifically, millennials want to live near city centers, where they can commute to work by foot, bike, train, bus, or Segway. Basic laws of supply and demand dictate that the value of property, and the rents, must go up, since as society urbanizes there are an increasing number of people vying for a fixed amount of real estate. Part of the American dream of owning a home was predicated on the fact that land would be developed outside the major cities, and homeowners would use newly affordable automobiles to get to their workplace and anywhere else they might want to go. Which led to drab, soulless, lifesucking suburbs and an obsession with gas-guzzling, air-polluting, global-temperature-raising motor vehicles. Ewwwwwwwwwww. How bourgeois, how planet-unconscious, how typically American. So while millennials may not particularly dislike owning homes, they have made lifestyle choices that tend to make home ownership more difficult. Unfortunately, those are the constraints of modern capitalism. Personally, I think we need to rethink our whole economic system. It'd be great if someone came up with an alternative economic system in which one can have one's cake and eat it too, but until that happens we're stuck with the situation we're in. Meanwhile, houses in the boonies are cheap. If you can remote-work your way into a boonie lifestyle, you can own a home on a rather modest income indeed.
- deleted 10y ago
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- nugget 10y ago
  One solution is to revitalize second- and third-tier urban centers. Places like Nashville (already hot), Tampa, Detroit, and Indianapolis. Perhaps even Lincoln, Nebraska, and Birmingham, Alabama. Not everyone can live in Manhattan itself but the density, services, and lifestyle millennials want can be recreated elsewhere where land costs are practically zero. An art scene, a food scene, some condo loft conversions and trendy commercial space; it's a sort of county-level cultural CRISPR process. Smart entrepreneurs are already hard at work on this but it's an effort in which I think Government could provide massively effective incentives to accelerate the outcome.
  - riprowan 10y ago
    You've hit the nail on the head. The trick is to discover and curate small city life so that one can live in a small city without feeling like one went back in time. Then you get to have your cake and eat it too.
  - pc86 10y ago
    We live in a very small city (metro pop 500-600k so maybe 1/4 the size of Nashville and 1/2 the size of Birmingham), and when my wife and I were dating we lived in an apartment downtown. It was great! Only two things made us move. 1. We wanted a big dog, and that's a non-starter for 90% of apartments. 2. Property taxes were 3-4x what they were just a mile or two outside of the city center.
- woah 10y ago
  The scarcity of housing in cities is artificial. Most cities have a class of elderly landowners who enjoy their unobstructed views and high property values and have the time to sit in planning meetings all day and will fight tooth and nail against any new construction, using both liberal (gentrification) and conservative (crime and crowding) arguments.
  - matt_wulfeck 10y ago
    The development obstruction is real. If you don't believe me then join Nextdoor for a neighborhood that's in the bay. You will find a group of highly dedicated and organized individuals who's sole purpose in life is to prevent any new high capacity zoning or construction.
  - nmerouze 10y ago
    I've lived in Paris where it is the same, or even worse because there are historic buildings everywhere. Now I live in Japan where it is the polar opposite. I live in a very dense area of Osaka in a building built in 2013 for the same price than my way smaller and very old place in Paris. If only Europe and North America could be like that...
    - yourapostasy 10y ago
      Interesting, any insight to why the Japanese body politic expresses a stronger preference for new and denser construction? I've heard anecdotally that Japanese culture specifically (and Asian culture more loosely) tends to shun "used" housing far more than the US market, but haven't been able to find any reference to support that hearsay.
      - donw 10y ago
        That is broadly true -- used houses have negative value here in Japan, as you need to first tear the thing down so that you can build whatever it is that you want. In Japan, things shake. A lot. Earthquake damage adds up pretty quickly, and is stupidly expensive to engineer against, so most houses are built with an expected lifespan of probably somewhere around 50 years. They're certainly safe, but there is a strong expectation that a family will live there until the kids move out and the parents retire. Highrises are economically preferable for a number of reasons. Japan has both an excellent rail transit network and sane zoning laws. So you end up with a cluster of highrises around a train station, where the bottom 1-3 levels are devoted to shopping, recreation, and everything else that you would see in a typical shopping mall. Life revolves around the rail network, at least in Tokyo. You don't as much go from the Ikebukuro Ward to the Shinjuku Ward as you go from Home to Ikebukuro Station to Shinjuku Station to Where It Is You Want To Go. I don't see this ever happening in the US, but that's not necessarily a bad thing. Personally, I would much prefer a larger number of slightly smaller cities, with companies either going fully-remote, or establishing a federated group of (drastically cheaper) offices in multiple cities. You end up with a lot more local flavor, but without the SF or NYC rents.
- yourapostasy 10y ago
  As long as we're using capitalism to explain what is happening, then by all means let's use more capitalism in the US housing market. 1. Remove all government sponsorship of mortgages, gradually spool off all existing GSE mortgages into private markets. Possible exception: owner-occupied homes, limit one per 2. Remove all implicit government backing of insurers and re-insurers of anything having to do with mortgages. 3. Remove mortgage interest deduction. 4. Valuations reported to IRS, property insurers, permitting offices and bank loans link back to publicly-available property tax records. 5. Property developers, not taxpayers, pay for initial costs to extend infrastructure, foot the bill for floating the bonds to maintain the extensions, and residents moving in must pay into the bond fund over time, gradually paying off the initial buyers of the bond; bonds are reissued as old bonds mature. 6. Bill back costs of developing (up to inner core density, with adjustments to purchase fast public transport into inner core) further out from urban core back to inner core residents as increased property taxes spread over 7 years, if inner core residents vote down densification, and rebate some of the collected funds to developers of outer core. 7. Standardize all government building codes to a single set, specifying function/intent/goal and not form, thereby allowing offshore for example factory-built modules to access a contiguous national market, or alternative construction techniques without lengthy permitting. These and other measures that open up competition for real estate development would be wildly politically unpopular in most areas and constituencies of the US. The US real estate market is superficially capitalist for a number of very interconnected reasons, and I've observed similar dynamics in other nations I've enquired about property within. Property is an extremely special-case asset, with privileged market protections/distortions few other asset categories enjoy.
  - fennecfoxen 10y ago
    While the rest are generally sound, Number 6 abandons the market and capitalism in favor of government intervention again, which is unfortunate and invites the system to be abused and gamed by the usual set of cronies. I'm against it. Number 1 should avoid use of the proposed exception for the same reason that mortgage interest shouldn't be deductible: it's a subsidy that distorts the market and is unfair to the good people who are still renting (who are, broadly speaking, probably not as well off in general, so it's a regressive subsidy where we pay the rich). You should add a #8 to remove all government subsidies of flood insurance and similar vehicles, especially along rivers and coasts, as they're basically paying people money to build homes (often luxury or vacation homes) in dangerous places.
- goseeastarwar 10y ago
  "Millennials want to live in cities." Says who? The article doesn't: "Overall, more than 80 percent of millennials already live in suburbs and exurbs, and they are, if anything, moving away from the dense, expensive cities" Some of it is due to cost, as it has always been, but there are hundreds of other lifestyle factors at work. Backyards are neat too, as it turns out. So are excellent public schools. So is your child riding their bike to the park. Nearly all of my friends and I lived in the city after college, got married, had kids, and moved to the burbs...just like our parents did.
  - yardie 10y ago
    I think you protest too much. I've lived in both the cities and suburbs. I prefer the cities. As a family with an solo child the suburbs was mentally draining for our boy. What's the use of the backyard if you're playing by yourself. The park was too far away for him to walk and he had a good chance of being the only kid there, because of backyards. And finally, everyone was so damn insular. In the year we lived there we only knew a few neighbors. I'm in a low tax state which means the schools are chronically underfunded. Our school in the suburbs relied on parent fundraising to cover a lot of extracurricular stuff. Our city school relies on the density of the student body and the density of property taxes to fund extracurricular programs. It seems like everyday he's sent home with something he wants to sign up for. We sold he car, bought bikes, and ride everywhere including the park. We gave the suburbs a shot, it didn't work, so we left. My brother, on the other hand loves it. Big house for him and his spouse, the kids, and their dirt bikes.
    - pc86 10y ago
      Schools are funded largely by property taxes, so the tax climate of your state has little to no bearing on how much money your school has, and certainly no bearing on how well they spend what they have.
      - bretthoerner 10y ago
        If only that were always true: https://en.wikipedia.org/wiki/Robin_Hood_plan https://en.wikipedia.org/wiki/Robin_Hood_plan In Austin we paid $406 million in state recapture in 2016. That's one third of AISD's budget for the year. That money doesn't come back to us, to be clear. I wouldn't be surprised if something similar were in place in other states. In addition, I believe the state has plenty of laws that control what each county can do tax-wise, I'm too lazy to find them all right now. My point is that the state matters a lot. (Note: I'm not saying that I'm against any of this, necessarily.)
- deleted 10y ago
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- wattt 10y ago
  > by Segway What planet are you living on where this is true? Do you work for Segway's marketing department or something?
  - simonh 10y ago
    I think the post makes more sense if you replace 'Millennial' with 'Exaggerated caricature of a Hipster'.
    - bitwize 10y ago
      Come now. Everybody knows the fixie is the hipster ride of choice.
      - beaconstudios 10y ago
        are unicycles out now?
  - amelius 10y ago
    Perhaps he meant those hoverboards that don't actually hover.
- sqldba 10y ago
  People live in suburbs and use automobiles though - and the price of houses in suburbs is still too expensive to buy (unless you're talking > 1-2 hour of travel time per day). Boonies aside (that's not the suburbs, that's literally in the middle of nowhere, and in a work environment where more and more managers don't allow remote-work), I don't think your argument holds water.
  - vonmoltke 10y ago
    What suburbs are you talking about? I know people who have chosen to live way the hell out and give themselves a nasty commute, but price was rarely the driver. As for travel time, unless you are really lucky I don't think it is possible to consistently have less than 1 hour of travel time per day unless you move house every time you change jobs. Even in NYC moving just a few blocks can add or subtract 15 minutes to your commute.
  - pc86 10y ago
    I live in a suburb where you can see the downtown buildings from our front porch. I could walk if I wanted to. Our mortgage is roughly 25% more expensive than our rent was when living downtown, including the property taxes. I think a lot of people on HN would do well to remember that any time you're discussing real estate, places like NYC and San Francisco are very much the exception, not the rule.
- facepalm 10y ago
  How is that a constraint of modern capitalism? Because capitalism wouldn't build ugly, cheap skyscrapers in the town center? Even if you build government housing in town centers and give it to people for cheap, you haven't really changed the dynamics. You only subsidize a lucky set of people (the ones who get to live near the town center). How will they be chosen? Adherence to the party line?
- ouid 10y ago
  Imagine, for a second, that there is no tax benefit to home ownership. In such a world, there is basically no reason to own a home. The cost of renting a home is about the same as the interest on a mortgage. The money that would go towards "principle" instead goes into your bank account. The interest that you pay on a mortgage is tax deductible, which is essentially a subsidy exclusively available to people who make more than the amount of money required to own a home where they live. This subsidy for decentralized living is equivalent to a tax on the vastly more efficient centralized plan. It's not intrinsic to our economic system.
  - cosmie 10y ago
    The cost of renting a home is about the same as the interest on a mortgage _when you purchase_. If you purchased around my house two years ago, your mortgage would be less than $800. But current rates have it at about $1,300. As a rental, you can start renting that at $1,300/month even though you bought in when market rate was $800. Plus, there's a huge number of tax benefits to investment property ownership, far more than for owner-occupied [1]. If you're going to remove the tax advantages of owner-occupied, you should also reduce the benefits of investment properties. But then you'll likely see rent rates hike as a result and the bar will tip in favor of ownership again. [1] http://www.nolo.com/legal-encyclopedia/top-ten-tax-deductions-landlords-29497.html http://www.nolo.com/legal-encyclopedia/top-ten-tax-deduction...
    - refurb 10y ago
      The cost of renting a home is about the same as the interest on a mortgage _when you purchase_. It depends on the market. Price to rent ratios can vary a ton.[1] The link is from 2016, but the extremes are: San Francisco 48x (housing price is 48x monthly rent) Detroit 6.5x The neutral rent to price ratio is ~15. If it's higher than that, it's better to rent. If it's lower, it's better to buy. [1]https://smartasset.com/mortgage/price-to-rent-ratio-in-us-cities https://smartasset.com/mortgage/price-to-rent-ratio-in-us-ci...
    - ouid 10y ago
      Yes, I would also remove investment property tax benefits, were I emperor, but it would not cause rental rates to rise. That's not how the rental rate is decided. The rental rate is based on vacancy and income, ie supply and demand. If rental is harder to make money on, the only effect will be to drive down the cost of the property as the actual number of houses is fixed.
- Consultant32452 10y ago
  Rental prices are being held artificially high by large private equity firms. They're going bankrupt because no one can afford them. Obama bailed them out on his way out the door which will keep rent artificially high for years to come. http://www.nakedcapitalism.com/2017/01/the-obama-administration-bails-out-private-equity-landlords-at-the-expense-of-the-middle-class-government-guarantees-for-rental-securitization.html http://www.nakedcapitalism.com/2017/01/the-obama-administrat...
- wcummings 10y ago
  >If you can remote-work Lots of people can't. Most people don't work in tech, and probably can't. Telling service workers to live in the boonies and commute an hour and a half by car to their minimum wage job is stupid and tone deaf, obviously there are better solutions. >use newly affordable automobiles to get to their workplace Many metro areas are so congested automobiles are no longer the convenient affordable choice they used to be. For some mass transit is less about being planet-conscious and more about not wanting to sit in traffic for half the day and spend $300/mo on parking. Property is hardly an optimal free market and there's lots of things we can do to improve the situation other than making fun of "Millennials". Most people I know would happily pay less to live outside of the city so long as they were still well-connected to the city center by the transit network. Expanding and improving commuter rail access and building denser more appealing suburbs will be big wins imo.
  - JoeAltmaier 10y ago
    They can work in Kansas City instead of Manhattan or SF. I'd say the majority of folks never consider moving out of the big population centers (by definition, actually). And its a really good idea, not just because of housing and density issues, but other quality of life measures.
    - wcummings 10y ago
      Cities are expensive for everyone. Not everyone has the luxury of being able to frictionlessly relocate. There's a reason lots of people live where they do. Telling people to "just move" is not a real solution.
      - JoeAltmaier 10y ago
        Telling people its hopeless is actually not a solution at all. And those people 'just moved' to NYC after all.
        wcummings 10y ago
        City projects take decades to take shape. It's not hopeless, it just takes time and political will. There are people advocating for greater zoning capacity, streamlined permitting processes and investment in mass transit, among other things. >And those people 'just moved' to NYC after all. When the rich get priced out of downtown, they don't move to KC. They move to cheaper areas outside of downtown and drive up prices for lower-income people living there. When four young professionals pile into an old single family home because there aren't enough apartments, that drives up prices for families who have one or two sources of income, not four. This affects everyone who lives in a city, not just wealthy transplants. Yuppies are not the ones being displaced. The solution is a steady increased supply of market-rate housing.
- wobbleblob 10y ago
  You all have so much space, but how you choose to use it is a bit disappointing. There is no shared space. No bike lanes, ok, I understand that, but in most places in town, there aren't even side walks. No town squares, no city parks, just endless rows of little castles, accessible only by car. Crossing the street on foot is illegal. Even to go running or cycling, I'd have to drive somewhere first. There are enough things to like, but this aspect is something I'll never get used to.
  - cmiles74 10y ago
    A lot of these problems are part of this long standing idea that everyone would be traveling by car, which leads to the creation of the cheapest and least thoughtful roads possible. These ideas seem to be gradually fading, even in the small town where I live there's a big project up to add bicycle lanes and improve sidewalks.[0] [0]: http://www.masslive.com/news/index.ssf/2017/02/easthampton_to_compete_for_fed.html http://www.masslive.com/news/index.ssf/2017/02/easthampton_t...
    - wobbleblob 10y ago
      A friend mentioned they successfully petitioned against a sidewalk on their side of the road, they don't want people walking by their property. These are cultural differences that Hollywood doesn't prepare you for.
- amyjess 10y ago
  Millennial here. This doesn't describe me or most of my friends. Sure, I know a couple of people who have moved to the city, but most of us have chosen to stay in the suburbs. Most of the people I went to college with and still keep in contact with either a) rent or own a house in the suburbs or b) live in a suburban apartment complex (i.e. sprawling fields of 2-story buildings). I personally split the difference and rent a townhouse in the suburbs. I have one friend who lives in one of those suburban mixed-use developments that's becoming popular now, but that's only because he's legally blind and can't drive. He's told me multiple times that if his retinas worked right, he'd own a car and drive everywhere. I love the suburbs, I love sprawl, and the same goes for most of my friends. I also hate noise and hate crowds. We don't want to live somewhere that has a "soul": we just want a place that's safe to live and have lots of space. My friends who have kids also want a place that has good schools. We're pretty bourgeois and proud of it. We're not hipsters, and in fact we're more likely to make fun of hipsters than anything.
  - bretthoerner 10y ago
    The opposite describes me and most of my friends. ;) I suppose it makes sense that suburban people meet suburban friends and urban people meet urban friends. That said, I don't think people in urban areas would say they love crowds or noise (and I really don't think I encounter much of either in central Austin). I'm curious what you do with all of the space. The idea of loving sprawl is odd to me. I grew up in the burbs and hate the idea of raising my kid in a place where so much of your time is spent in a car. The idea of getting a car to go anywhere or do anything crushes my soul. I think if I moved out of the city I'd mostly miss being able to walk/bike (or bus) to so many things.
    - amyjess 10y ago
      > I suppose it makes sense that suburban people meet suburban friends and urban people meet urban friends. That's true. And it also helps that I work in the suburbs (at both my current job and my last job): all my coworkers live in the burbs too, even the ones who are the same age as me (32) or younger. Of course, I live in the Dallas area, where 90% of the tech industry is in the northern suburbs, and so are all the ethnic enclaves. You want to work in the tech industry? If you live in the city, you'll have to commute to the suburbs, so living in the burbs means you have a shorter commute. You want authentic {insert Asian ethnicity here} food? You have to go to the suburbs for it. > I'm curious what you do with all of the space. The idea of loving sprawl is odd to me. I have a lot of stuff. Also, I just like to have room to breathe; I'm slightly claustrophobic. And I just really like the look and feel of the way the northern suburbs of Dallas are laid out. I don't know if I can put it into words; it's just aesthetically pleasing to me. I've recently been toying around with the idea of moving out of state (because a. political reasons, and b. after my cat died last week, I kinda want to disappear and start over where I don't know anyone), and for aesthetic reasons the only other parts of the country that appeals to me are parts of SoCal, specifically Torrance and Orange County. They're the only places that have the same kind of aesthetics I like about the Dallas burbs. > I grew up in the burbs and hate the idea of raising my kid in a place where so much of your time is spent in a car. The idea of getting a car to go anywhere or do anything crushes my soul. I think if I moved out of the city I'd mostly miss being able to walk/bike (or bus) to so many things. I'm actually childfree, so I have no intention of raising a kid, but if I did, I'd like to raise my kid in an environment like the one I grew up in. I had a front yard and a back yard to play in, trees to climb, a large neighborhood to walk and ride my bike around. I still have fond memories walking or riding my bike down the winding alleyways and residential streets of Far North Dallas. I feel sorry for my friends' kids who are growing up in apartments (suburban apartments, yes, but still apartments). Apartment complexes just aren't conducive to that kind of atmosphere. There was no crime, no homeless people shouting things at me on the street. I went to highly-rated public schools... my family didn't have to worry about burning $$$$ on a private school just to get me a good education. Oh, and speaking of homeless people shouting things at me on the street... that regularly happened to me when I worked downtown from 2012 to 2014. I constantly had homeless people demanding I give them money or cigarettes, and they'd call me a liar when I told them I don't carry cash or that I quit smoking. I wouldn't want to subject a kid to that. During that time, I fervently wished I had a car so I could just roll up the windows and not have to deal with them. I'll always equate "not taking a car to go somewhere or do something" with "being subject to street harassment". Oh yeah, and when I worked downtown, I was too early in my transition for me to really get catcalls; if I worked there now, I'd probably be catcalled to hell and back. No thank you. I'd rather have the safety and the security of a car when I go places. Also, your name sounds really, really familiar. I think we may have gone to high school together. Did you go to HS in Richardson, TX in the early 00s? (no, you won't recognize my name... I changed my whole name -- first, middle, and last -- a few years ago)
- pouetpouet 10y ago
  damned if you do, damned if you don't. Want/have to move into ig cities for work->you want to live bourgeois style city center. want to stay in the boonies for cheap housing/nature/lifestyle-> you think you are entitled to a job here, jos aren't coming to you, you have to move to big job centers...
- VLM 10y ago
  Gaslighting. You're poor, but that's OK because you never wanted money anyway and its far more important to do other things than to have money and the accompanying lifestyle. Now pay no attention to who has siphoned the money you would have had out of the system so you can't have it, isn't it more important that you hug trees? Cities have soul, I mean, spirits, I mean lots of places to buy spirits, I mean bars, and alcohol consumption is the only important cultural activity in life, why being drunk is the definition of being cultured.. Other than that, there's nothing to do in the city other than cultural activities that tend to be too expensive (if you had money you'd be living in the burbs and commuting to the activity like all the participants) and nobody on a percentage basis attends those cultural activities. Probably 100000 people say how great it is that we have a theater for off broadway musicals for every person who buys an actual over priced ticket. There are no bars in the burbs (LOL). In fact there is nothing to do in the burbs. Yup people should definitely be encouraged to stay away and stop crowding my burb.
- Arizhel 10y ago
  >Meanwhile, houses in the boonies are cheap. If you can remote-work your way into a boonie lifestyle, you can own a home on a rather modest income indeed. You can, but then you're stuck with all the downsides of living in the boonies: you're far away from any cultural activities, shopping, good grocery stores (i.e. not Walmart), and all the people around you are probably culturally very different and even downright distasteful, unless you happen to like extremely religious and conservative people asking you about your personal relationship with Jesus or what kind of guns you like. And this isn't all "boonies" either; some of them are pretty pricey. I live about 75 minutes from DC in a pretty rural area currently, and houses here are not that cheap. However, if I moved near some family members (about an hour SW of Richmond VA) houses there are much cheaper. And the benefits are somewhat similar: either way it's roughly an hour to get to some decent shopping, though DC's stuff is much better than RVA's, but RVA does have some cultural attractions plus some higher-end shops, just not as much as DC. But being surrounded by people you have no interest in meeting kinda sucks; at least when you're right in a city it's easier to find groups or people you get along well with who aren't too far away. Anyway, this all assumes remote work. For the Millenials, this might not be that helpful. Most jobs still require you to be on-site, and that's not going to be doable if you live in the boonies and don't want a long commute. And that's just computer work; very little non-computer work can be done remotely. What we really need is real estate development laws which push for the construction of more affordable housing, though that would probably mean more high-rise condos, rather than single-family houses. Instead, developers always target the high end of the market, building "luxury condos" and the like. There's a limited amount of real estate anywhere, so the obvious solution is to build up, not out. Finally, another thing about those "cheap" houses in the boonies. I live in one of those currently, and the heating bills are atrocious. New, nice houses out here are expensive; the cheap ones are older and horribly inefficient. They're not building a lot of new houses in the boonies, so it's mainly older stuff. The new houses in the boonies are giant mansions built by rich people as getaways. Any "new" houses in the boonies are crappy little manufactured homes.
  - nunez 10y ago
    What's wrong with the grocery at Walmart??????
- marssaxman 10y ago
  This shift was already happening with "gen X" - you are describing my attitude. But owning a home was never a "dream" for me - honestly it's kind of a hassle. I've recently been thinking about selling mine, turning all that imaginary equity into real money, and going back to renting. I'd be able to move back in closer to where the action is, and I'd waste less of my time and money dealing with unpredictable maintenance problems. Homeownership can be an OK investment, but it's not really that great, and you can have a lot more flexibility and security if you just stick all that money into an index fund.
- fulafel 10y ago
  Geometry says you can fit exponentially more people near city centers as the radius of the dense center grows linearly. IOW, marginal increase in dense city housing should be cheap per apartment.
- nunez 10y ago
  Uh, not all of us do? I hated living in NYC.
obstinate 10y ago
Is it really, though? How much more efficient is owning than renting in most markets? My sense was that, given the rate at which people typically move, it's normally a wash.
- rahimnathwani 10y ago
  "My sense was that, given the rate at which people typically move, it's normally a wash." The difference between renting and buying isn't just the monthly payment. It's also the range of outcomes. If you buy a place with 20% down, and the property price goes up by 20% whilst you're living there, you've doubled your net worth. In some US states (e.g. California) mortgages are nonrecourse[0], so it's a bit with unlimited upside, but capped downside. If the property price crashes to 50% of the purchase price, you can walk away, losing only your initial deposit. [0] http://www.financialsamurai.com/non-recourse-states-walk-away-from-mortgage/ http://www.financialsamurai.com/non-recourse-states-walk-awa...
  - Swizec 10y ago
    The caveat is that for that $200k+ deposit on a 1-bedroom in SF, you could go travel the world for 4 or 5 years. Or have 4.7 years of rent for the same place. After which you're likely to get tired of SF anyway and move somewhere else. Oh and in the 4.7 years you've been paying rent out of savings, you've saved up enough for the next 4.7 years of rent in NYC ... or many many years of rent anywhere else. So yeah, I for one am def not ever buying unless I can cash it out in one go. Then again, there are many things you could do for a million dollars in cash. Like retire for 10 years and do cool shit.
    - adrianN 10y ago
      For a million bucks your can retire for good.
    - jcon321 10y ago
      wonder how your family will enjoy the shakeup every time you feel like moving
nickthemagicman 10y ago
I'm never home. Between work and social life, I'm literally only home to sleep. I have minimal amounts of stuff too. How come there's no just, beds for rent, for like 200 bucks a month?
- unimpressive 10y ago
  You want https://en.wikipedia.org/wiki/Capsule_hotel https://en.wikipedia.org/wiki/Capsule_hotel Not very popular in the states yet, but we'll see.
  - dfischer 10y ago
    Those are pretty expensive though aren't they? Comparatively $50 a night.
    - miguelrochefort 10y ago
      Hotel rooms are $100 a night, yet appartements their size aren't nearly as expensive on a monthly basis. I could see capsule rooms going for $100 a month.
    - amyjess 10y ago
      Yeah, I have a friend who just moved to Japan (and he's lived there before) who told me the same thing. Some friends and I ate lunch with him the day before he left, and he mentioned that living in Japan isn't too expensive if you know where to live, and he knows how to only pay $300/month in rent. So I asked him if he meant capsule hotels. He told me what you said, and then he said that he meant hostels. Hostels are dirt cheap, even if you pay extra for a private room. You can probably live in Japan for less than $300/month rent if you're willing to sleep in the hostel's common area.
  - eb0la 10y ago
    I saw this in Munich airport some weeks ago: http://www.napcabs.com http://www.napcabs.com They're also expensive (10-15€ hour), but I guess for a long lease (weeks) the price could be better (around the 20-30€ day in Osaka/Tokyo) because the ROI will happen quickly.
matt_wulfeck 10y ago
Trumps proposed economic plan is going to blast so many of the benefits to owning a home since the standard deduction will be doubled[1]. It will be cheaper to rent and it will really help maximize space. Say what we will about the president but this will be a massive boon to renting nomads. Coupled with the fact that soon state tax might not be deductible, and there may be an entire class of people who find it better to sell their home and live elsewhere. 1. https://www.donaldjtrump.com/policies/tax-plan https://www.donaldjtrump.com/policies/tax-plan
- WillPostForFood 10y ago
  So that's good, right? Prices will go down and the wealth transfer from poor renters to wealthy buyers via the mortgage interest deduction will go away.
  - matt_wulfeck 10y ago
    It's my opinion that the Trump tax plan is good. There will be less financial incentive to owning a home or taking out a huge loan.
- greesil 10y ago
  1) Any hopeful homebuying millennials would also have not have the benefit of the deductions. 2) Wouldn't this just pass the cost onto renters? This seems more like a way to shift the tax burden to the middle class.
  - matt_wulfeck 10y ago
    The beauty of the standard deduction is that it goes unqualified to everyone. The rich itemize their taxes almost without exception. IANAA, but interest on a rental is a business expense, therefore will be be unaffected by this change.
    - greesil 10y ago
      You didn't actually address my first point, and you're factually incorrect on the second. Are you confused, or are you paid shill?
solidsnack9000 10y ago
People are always being turned into serfs somehow. It never quite succeeds.
- Broken_Hippo 10y ago
  "It never quite succeeds." Until, you know, it does - and it does occasionally. That's why we talk about them in history classes. NO one wants to be labeled a serf, though, so modern folks are rarely actually given that formal title. It'd be bad for other people's business.
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Dowwie 10y ago
s/home/college tuition and student loan debt/g
dmolony 10y ago
American greatness was long premised on the common assumption was that each generation would do better than previous one. Why is editing so poor these days?
- eli_gottlieb 10y ago
  Because nobody wants to pay for it.
thedevil 10y ago
The argument that people today live worse than people in the 80s is insane. Yes, it seems so in the real GDP numbers, but it defies the rising standards of living that surround us, showing up everywhere but the numbers. Would anyone here want to live like the average Joe of the eighties, using only goods and services available then? Traditional GDP and inflation figures seem to be losing usefulness They clearly don't capture most of the tech gains (which have been huge). And I suspect they don't adequately capture quality improvements.
- coldtea 10y ago
  >The argument that kids today live worse than their parents is insane. Yes, it seems so in the real GDP numbers, but it defies the rising standards of living that surround us, showing up everywhere but the numbers. Would anyone here want to live like the average Joe of the eighties, using only goods and services available then? Because it's not about whether you can have Netflix and modern gadgets and Uber, but whether you can afford shelter, whether you can provide for a family, whether you have to work like a dog and miss your whole life, whether you'll be able to pay your debt (student loans etc), whether you'll be able to afford healthcare, being able to retire etc. Living with only "80s goods and services" is much better than not being able to afford basic today's services, but having a smartphone and broadband internet. And of course wealth is relative to societal norm, not absolute. If you live in the USA like a 18th century peasant with the "goods and services" available to 18th century TODAY, you're not lucky just because you don't live in cavemen-era "goods and services".
- norea-armozel 10y ago
  The tech gains are mostly in areas which don't benefit consumers beyond fancier phones and bigger TV screens. Where it counts such as lower cost of living, better healthcare, and the like it's hasn't materialized for those in the lower economic segments. They're still coasting by on the Great Society programs despite their repeated gutting. If the current POTUS can't replace it with livable wages and jobs I suspect we'll see something akin to a Jacobin uprising (blood, heads, and all).
  - 10y ago
dsfyu404ed 10y ago
>By the 2030s, large swaths of the state—particularly along the coast—could become geriatric belts, with an affluent older boomer population served by a largely minority servant class. How feudal! The irony of California having anything in common with Florida would drive some people insane. Those are exactly the kind of people I want to see driven insane.
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amyjess 10y ago
Millennial here. I actively don't want to own. I don't want to have to worry about paying for my own maintenance or landscaping. I rent a townhouse in the suburbs, and I'm perfectly happy with it. I guess I kinda split the difference between the "stereotypical Millennial" and the reality the article points out: I prefer living in the burbs, but I don't want to own. Here's something that happened to me last month: something in my downstairs toilet broke, and it caused the toilet to repeatedly fill up its tank and dump it on the floor. Imagine my shock when I came downstairs to find that the carpet on a third of my first floor was soaked through, with the bathroom having a few inches of standing water. What did I do? I pulled out my phone and called the leasing office, telling them I had a plumbing emergency. Within an hour, the maintenance guy was here, and he fixed my toilet at ho cost to me. He also told me he was sending for a guy with a wetvac. An hour later, the carpet cleaner showed up to wetvac the carpet and replace the padding, again at no cost to me. Also, in the past I've had several problems with my air conditioner. I've had the fan die, I've had the AC unit die, I've had the internal AC unit start dripping water on the carpet. All of those times, I just called the leasing office, and they sent someone out to fix it at no cost to me. Meanwhile, one of my friends who owns his own house has ranted on Facebook several times about how his AC problems are bankrupting him, and he's already sunk five figures into replacing stuff. Why would I ever want to own when I get free maintenance and don't have to worry about a down payment?
- andrewmcwatters 10y ago
  Because in the long term you spend dramatically more money. You will constantly have to move when rent increases. You will raise a family with children never having a single frame of reference for what "home" is or was. You are at the mercy of the market. You own no land. A sub-commoner among commoners.
  - amyjess 10y ago
    > Because in the long term you spend dramatically more money. Doesn't matter if I don't have the cash on hand to afford to replace a dead AC unit in addition to having to make a mortgage payment that month. A fixed monthly rent payment is easier to budget for than having to worry about every unplanned maintenance emergency, even if the rent payment is larger over the course of decades. I looked up my friend's post about his AC problems... he was looking at $3-6k when his compressor died ($6k for a new unit; if he can just replace the compressor, $2k for parts, another $1k for installation), and that was after his AC broke three times the previous year. We live in Texas. Air conditioners break all the time because the massive heat we get in the summers (100°F for several weeks isn't uncommon) places a huge strain on the AC. > You will constantly have to move when rent increases. I've lived in the same place for a decade. My salary has risen with rent. If I ever move, it'll be because I want a change, not because I'll be priced out of my current place. > You will raise a family with children never having a single frame of reference for what "home" is or was. See above. Also, I'm childfree (I've even chemically sterilized myself), so I'll have no children to raise in any kind of home. On top of that, I've seen homeowners who sell their home and move every few years because they keep taking jobs out of state. > You are at the mercy of the market. So are homeowners. Remember the subprime crisis a decade ago? Remember all the people who ended up with underwater mortgages because their property values fell? Can you imagine being stuck with owning a home that's worth significantly less than what you owe after you've lost your job and can't find a new job that pays enough to afford your mortgage payment? > You own no land. That's an awfully medieval way of thinking, and it doesn't apply to the modern world. You could say the same thing about people who own luxury condos in New York and San Francisco. "You own no land" is just as relevant to me as "you own no cattle". > A sub-commoner among commoners. And that's just unsubstantive rhetoric.
lazyant 10y ago
USA basically has the cheapest housing in the world https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count...
- droidist2 10y ago
  Interesting. But what if you factor commute time? It may be cheap to live 50 highway exits away from your job but it comes with its own costs.
davidf18 10y ago
Scarcity leads to higher prices and in the case of the high cost of housing in NYC, DC, Boston, London, SF, LA (and perhaps much of CA) is political use of zoning density restrictions to create artificial scarcity which benefits land owners at the expense of renters or those who wish to buy a house. This is a form of "rent seeking" which creates a market failure or market inefficiency. Because of these regulations Donald Trump is far wealthier than he would be in an efficient market and is a major, major source of inequality. I recently read that in London which has a green belt used to create land scarcity, the cost of land as a proportion of housing has risen from about 2 percent to 75 percent of housing costs. In NYC, taxi medallions were valued at $1.2 million because government created artificial scarcity limiting medallions to 13,000 for a population of 8.5 million. Taxi drivers who leased cabs paid high costs because of the medallion scarcity and passengers would pay much higher fares. Then Uber/Lyft/Gett/Via came along and relieved the politically induced scarcity. Now, not only are bailable cabs much, much more available, but prices have come down, sometimes substantially. The price of the taxi medallions decreased from $1.2 million to $500,000 to $700,000. Happily, the fix to high housing costs does not cost any money. It simply needs laws reversed that created artificial scarcity of land. This would require millennials (and others) to get an education that teaches them at least the most basic of economics and then to vote out of office politicians who are for the zoning density restrictions and the high cost of housing. David Ricardo in reference to combatting the "Corn Laws" of Britain first discussed "rent seeking" -- the use of politics to create market inefficiencies and scarcity benefiting special interests. In that context, there was an import tax on any grain including wheat to make bread. This lead to a higher cost of food. British farmers would receive more money for their grain which enabled the landowners of the farms to charge a higher lease for their land. So, workers were forced to subsidize landholders because of the politically induced scarcity "rent seeking" of grain. David Ricardo, a wealthy broker, joined Parliament to reverse the Corn Laws.

154 points by shawndumas 10y ago

Time to stop using this stupid term. Actually, it was never time to use it in the first place.

Millennials want to live in cities. Specifically, millennials want to live near city centers, where they can commute to work by foot, bike, train, bus, or Segway. Basic laws of supply and demand dictate that the value of property, and the rents, must go up, since as society urbanizes there are an increasing number of people vying for a fixed amount of real estate. Part of the American dream of owning a home was predicated on the fact that land would be developed outside the major cities, and homeowners would use newly affordable automobiles to get to their workplace and anywhere else they might want to go. Which led to drab, soulless, lifesucking suburbs and an obsession with gas-guzzling, air-polluting, global-temperature-raising motor vehicles. Ewwwwwwwwwww. How bourgeois, how planet-unconscious, how typically American. So while millennials may not particularly dislike owning homes, they have made lifestyle choices that tend to make home ownership more difficult. Unfortunately, those are the constraints of modern capitalism. Personally, I think we need to rethink our whole economic system. It'd be great if someone came up with an alternative economic system in which one can have one's cake and eat it too, but until that happens we're stuck with the situation we're in. Meanwhile, houses in the boonies are cheap. If you can remote-work your way into a boonie lifestyle, you can own a home on a rather modest income indeed.

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nugget 10y ago
One solution is to revitalize second- and third-tier urban centers. Places like Nashville (already hot), Tampa, Detroit, and Indianapolis. Perhaps even Lincoln, Nebraska, and Birmingham, Alabama. Not everyone can live in Manhattan itself but the density, services, and lifestyle millennials want can be recreated elsewhere where land costs are practically zero. An art scene, a food scene, some condo loft conversions and trendy commercial space; it's a sort of county-level cultural CRISPR process. Smart entrepreneurs are already hard at work on this but it's an effort in which I think Government could provide massively effective incentives to accelerate the outcome.
- riprowan 10y ago
  You've hit the nail on the head. The trick is to discover and curate small city life so that one can live in a small city without feeling like one went back in time. Then you get to have your cake and eat it too.
- pc86 10y ago
  We live in a very small city (metro pop 500-600k so maybe 1/4 the size of Nashville and 1/2 the size of Birmingham), and when my wife and I were dating we lived in an apartment downtown. It was great! Only two things made us move. 1. We wanted a big dog, and that's a non-starter for 90% of apartments. 2. Property taxes were 3-4x what they were just a mile or two outside of the city center.
woah 10y ago
The scarcity of housing in cities is artificial. Most cities have a class of elderly landowners who enjoy their unobstructed views and high property values and have the time to sit in planning meetings all day and will fight tooth and nail against any new construction, using both liberal (gentrification) and conservative (crime and crowding) arguments.
- matt_wulfeck 10y ago
  The development obstruction is real. If you don't believe me then join Nextdoor for a neighborhood that's in the bay. You will find a group of highly dedicated and organized individuals who's sole purpose in life is to prevent any new high capacity zoning or construction.
- nmerouze 10y ago
  I've lived in Paris where it is the same, or even worse because there are historic buildings everywhere. Now I live in Japan where it is the polar opposite. I live in a very dense area of Osaka in a building built in 2013 for the same price than my way smaller and very old place in Paris. If only Europe and North America could be like that...
  - yourapostasy 10y ago
    Interesting, any insight to why the Japanese body politic expresses a stronger preference for new and denser construction? I've heard anecdotally that Japanese culture specifically (and Asian culture more loosely) tends to shun "used" housing far more than the US market, but haven't been able to find any reference to support that hearsay.
    - donw 10y ago
      That is broadly true -- used houses have negative value here in Japan, as you need to first tear the thing down so that you can build whatever it is that you want. In Japan, things shake. A lot. Earthquake damage adds up pretty quickly, and is stupidly expensive to engineer against, so most houses are built with an expected lifespan of probably somewhere around 50 years. They're certainly safe, but there is a strong expectation that a family will live there until the kids move out and the parents retire. Highrises are economically preferable for a number of reasons. Japan has both an excellent rail transit network and sane zoning laws. So you end up with a cluster of highrises around a train station, where the bottom 1-3 levels are devoted to shopping, recreation, and everything else that you would see in a typical shopping mall. Life revolves around the rail network, at least in Tokyo. You don't as much go from the Ikebukuro Ward to the Shinjuku Ward as you go from Home to Ikebukuro Station to Shinjuku Station to Where It Is You Want To Go. I don't see this ever happening in the US, but that's not necessarily a bad thing. Personally, I would much prefer a larger number of slightly smaller cities, with companies either going fully-remote, or establishing a federated group of (drastically cheaper) offices in multiple cities. You end up with a lot more local flavor, but without the SF or NYC rents.
yourapostasy 10y ago
As long as we're using capitalism to explain what is happening, then by all means let's use more capitalism in the US housing market. 1. Remove all government sponsorship of mortgages, gradually spool off all existing GSE mortgages into private markets. Possible exception: owner-occupied homes, limit one per 2. Remove all implicit government backing of insurers and re-insurers of anything having to do with mortgages. 3. Remove mortgage interest deduction. 4. Valuations reported to IRS, property insurers, permitting offices and bank loans link back to publicly-available property tax records. 5. Property developers, not taxpayers, pay for initial costs to extend infrastructure, foot the bill for floating the bonds to maintain the extensions, and residents moving in must pay into the bond fund over time, gradually paying off the initial buyers of the bond; bonds are reissued as old bonds mature. 6. Bill back costs of developing (up to inner core density, with adjustments to purchase fast public transport into inner core) further out from urban core back to inner core residents as increased property taxes spread over 7 years, if inner core residents vote down densification, and rebate some of the collected funds to developers of outer core. 7. Standardize all government building codes to a single set, specifying function/intent/goal and not form, thereby allowing offshore for example factory-built modules to access a contiguous national market, or alternative construction techniques without lengthy permitting. These and other measures that open up competition for real estate development would be wildly politically unpopular in most areas and constituencies of the US. The US real estate market is superficially capitalist for a number of very interconnected reasons, and I've observed similar dynamics in other nations I've enquired about property within. Property is an extremely special-case asset, with privileged market protections/distortions few other asset categories enjoy.
- fennecfoxen 10y ago
  While the rest are generally sound, Number 6 abandons the market and capitalism in favor of government intervention again, which is unfortunate and invites the system to be abused and gamed by the usual set of cronies. I'm against it. Number 1 should avoid use of the proposed exception for the same reason that mortgage interest shouldn't be deductible: it's a subsidy that distorts the market and is unfair to the good people who are still renting (who are, broadly speaking, probably not as well off in general, so it's a regressive subsidy where we pay the rich). You should add a #8 to remove all government subsidies of flood insurance and similar vehicles, especially along rivers and coasts, as they're basically paying people money to build homes (often luxury or vacation homes) in dangerous places.
goseeastarwar 10y ago
"Millennials want to live in cities." Says who? The article doesn't: "Overall, more than 80 percent of millennials already live in suburbs and exurbs, and they are, if anything, moving away from the dense, expensive cities" Some of it is due to cost, as it has always been, but there are hundreds of other lifestyle factors at work. Backyards are neat too, as it turns out. So are excellent public schools. So is your child riding their bike to the park. Nearly all of my friends and I lived in the city after college, got married, had kids, and moved to the burbs...just like our parents did.
- yardie 10y ago
  I think you protest too much. I've lived in both the cities and suburbs. I prefer the cities. As a family with an solo child the suburbs was mentally draining for our boy. What's the use of the backyard if you're playing by yourself. The park was too far away for him to walk and he had a good chance of being the only kid there, because of backyards. And finally, everyone was so damn insular. In the year we lived there we only knew a few neighbors. I'm in a low tax state which means the schools are chronically underfunded. Our school in the suburbs relied on parent fundraising to cover a lot of extracurricular stuff. Our city school relies on the density of the student body and the density of property taxes to fund extracurricular programs. It seems like everyday he's sent home with something he wants to sign up for. We sold he car, bought bikes, and ride everywhere including the park. We gave the suburbs a shot, it didn't work, so we left. My brother, on the other hand loves it. Big house for him and his spouse, the kids, and their dirt bikes.
  - pc86 10y ago
    Schools are funded largely by property taxes, so the tax climate of your state has little to no bearing on how much money your school has, and certainly no bearing on how well they spend what they have.
    - bretthoerner 10y ago
      If only that were always true: https://en.wikipedia.org/wiki/Robin_Hood_plan https://en.wikipedia.org/wiki/Robin_Hood_plan In Austin we paid $406 million in state recapture in 2016. That's one third of AISD's budget for the year. That money doesn't come back to us, to be clear. I wouldn't be surprised if something similar were in place in other states. In addition, I believe the state has plenty of laws that control what each county can do tax-wise, I'm too lazy to find them all right now. My point is that the state matters a lot. (Note: I'm not saying that I'm against any of this, necessarily.)
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wattt 10y ago
> by Segway What planet are you living on where this is true? Do you work for Segway's marketing department or something?
- simonh 10y ago
  I think the post makes more sense if you replace 'Millennial' with 'Exaggerated caricature of a Hipster'.
  - bitwize 10y ago
    Come now. Everybody knows the fixie is the hipster ride of choice.
    - beaconstudios 10y ago
      are unicycles out now?
- amelius 10y ago
  Perhaps he meant those hoverboards that don't actually hover.
sqldba 10y ago
People live in suburbs and use automobiles though - and the price of houses in suburbs is still too expensive to buy (unless you're talking > 1-2 hour of travel time per day). Boonies aside (that's not the suburbs, that's literally in the middle of nowhere, and in a work environment where more and more managers don't allow remote-work), I don't think your argument holds water.
- vonmoltke 10y ago
  What suburbs are you talking about? I know people who have chosen to live way the hell out and give themselves a nasty commute, but price was rarely the driver. As for travel time, unless you are really lucky I don't think it is possible to consistently have less than 1 hour of travel time per day unless you move house every time you change jobs. Even in NYC moving just a few blocks can add or subtract 15 minutes to your commute.
- pc86 10y ago
  I live in a suburb where you can see the downtown buildings from our front porch. I could walk if I wanted to. Our mortgage is roughly 25% more expensive than our rent was when living downtown, including the property taxes. I think a lot of people on HN would do well to remember that any time you're discussing real estate, places like NYC and San Francisco are very much the exception, not the rule.
facepalm 10y ago
How is that a constraint of modern capitalism? Because capitalism wouldn't build ugly, cheap skyscrapers in the town center? Even if you build government housing in town centers and give it to people for cheap, you haven't really changed the dynamics. You only subsidize a lucky set of people (the ones who get to live near the town center). How will they be chosen? Adherence to the party line?
ouid 10y ago
Imagine, for a second, that there is no tax benefit to home ownership. In such a world, there is basically no reason to own a home. The cost of renting a home is about the same as the interest on a mortgage. The money that would go towards "principle" instead goes into your bank account. The interest that you pay on a mortgage is tax deductible, which is essentially a subsidy exclusively available to people who make more than the amount of money required to own a home where they live. This subsidy for decentralized living is equivalent to a tax on the vastly more efficient centralized plan. It's not intrinsic to our economic system.
- cosmie 10y ago
  The cost of renting a home is about the same as the interest on a mortgage _when you purchase_. If you purchased around my house two years ago, your mortgage would be less than $800. But current rates have it at about $1,300. As a rental, you can start renting that at $1,300/month even though you bought in when market rate was $800. Plus, there's a huge number of tax benefits to investment property ownership, far more than for owner-occupied [1]. If you're going to remove the tax advantages of owner-occupied, you should also reduce the benefits of investment properties. But then you'll likely see rent rates hike as a result and the bar will tip in favor of ownership again. [1] http://www.nolo.com/legal-encyclopedia/top-ten-tax-deductions-landlords-29497.html http://www.nolo.com/legal-encyclopedia/top-ten-tax-deduction...
  - refurb 10y ago
    The cost of renting a home is about the same as the interest on a mortgage _when you purchase_. It depends on the market. Price to rent ratios can vary a ton.[1] The link is from 2016, but the extremes are: San Francisco 48x (housing price is 48x monthly rent) Detroit 6.5x The neutral rent to price ratio is ~15. If it's higher than that, it's better to rent. If it's lower, it's better to buy. [1]https://smartasset.com/mortgage/price-to-rent-ratio-in-us-cities https://smartasset.com/mortgage/price-to-rent-ratio-in-us-ci...
  - ouid 10y ago
    Yes, I would also remove investment property tax benefits, were I emperor, but it would not cause rental rates to rise. That's not how the rental rate is decided. The rental rate is based on vacancy and income, ie supply and demand. If rental is harder to make money on, the only effect will be to drive down the cost of the property as the actual number of houses is fixed.
Consultant32452 10y ago
Rental prices are being held artificially high by large private equity firms. They're going bankrupt because no one can afford them. Obama bailed them out on his way out the door which will keep rent artificially high for years to come. http://www.nakedcapitalism.com/2017/01/the-obama-administration-bails-out-private-equity-landlords-at-the-expense-of-the-middle-class-government-guarantees-for-rental-securitization.html http://www.nakedcapitalism.com/2017/01/the-obama-administrat...
wcummings 10y ago
>If you can remote-work Lots of people can't. Most people don't work in tech, and probably can't. Telling service workers to live in the boonies and commute an hour and a half by car to their minimum wage job is stupid and tone deaf, obviously there are better solutions. >use newly affordable automobiles to get to their workplace Many metro areas are so congested automobiles are no longer the convenient affordable choice they used to be. For some mass transit is less about being planet-conscious and more about not wanting to sit in traffic for half the day and spend $300/mo on parking. Property is hardly an optimal free market and there's lots of things we can do to improve the situation other than making fun of "Millennials". Most people I know would happily pay less to live outside of the city so long as they were still well-connected to the city center by the transit network. Expanding and improving commuter rail access and building denser more appealing suburbs will be big wins imo.
- JoeAltmaier 10y ago
  They can work in Kansas City instead of Manhattan or SF. I'd say the majority of folks never consider moving out of the big population centers (by definition, actually). And its a really good idea, not just because of housing and density issues, but other quality of life measures.
  - wcummings 10y ago
    Cities are expensive for everyone. Not everyone has the luxury of being able to frictionlessly relocate. There's a reason lots of people live where they do. Telling people to "just move" is not a real solution.
    - JoeAltmaier 10y ago
      Telling people its hopeless is actually not a solution at all. And those people 'just moved' to NYC after all.
      - wcummings 10y ago
        City projects take decades to take shape. It's not hopeless, it just takes time and political will. There are people advocating for greater zoning capacity, streamlined permitting processes and investment in mass transit, among other things. >And those people 'just moved' to NYC after all. When the rich get priced out of downtown, they don't move to KC. They move to cheaper areas outside of downtown and drive up prices for lower-income people living there. When four young professionals pile into an old single family home because there aren't enough apartments, that drives up prices for families who have one or two sources of income, not four. This affects everyone who lives in a city, not just wealthy transplants. Yuppies are not the ones being displaced. The solution is a steady increased supply of market-rate housing.
wobbleblob 10y ago
You all have so much space, but how you choose to use it is a bit disappointing. There is no shared space. No bike lanes, ok, I understand that, but in most places in town, there aren't even side walks. No town squares, no city parks, just endless rows of little castles, accessible only by car. Crossing the street on foot is illegal. Even to go running or cycling, I'd have to drive somewhere first. There are enough things to like, but this aspect is something I'll never get used to.
- cmiles74 10y ago
  A lot of these problems are part of this long standing idea that everyone would be traveling by car, which leads to the creation of the cheapest and least thoughtful roads possible. These ideas seem to be gradually fading, even in the small town where I live there's a big project up to add bicycle lanes and improve sidewalks.[0] [0]: http://www.masslive.com/news/index.ssf/2017/02/easthampton_to_compete_for_fed.html http://www.masslive.com/news/index.ssf/2017/02/easthampton_t...
  - wobbleblob 10y ago
    A friend mentioned they successfully petitioned against a sidewalk on their side of the road, they don't want people walking by their property. These are cultural differences that Hollywood doesn't prepare you for.
amyjess 10y ago
Millennial here. This doesn't describe me or most of my friends. Sure, I know a couple of people who have moved to the city, but most of us have chosen to stay in the suburbs. Most of the people I went to college with and still keep in contact with either a) rent or own a house in the suburbs or b) live in a suburban apartment complex (i.e. sprawling fields of 2-story buildings). I personally split the difference and rent a townhouse in the suburbs. I have one friend who lives in one of those suburban mixed-use developments that's becoming popular now, but that's only because he's legally blind and can't drive. He's told me multiple times that if his retinas worked right, he'd own a car and drive everywhere. I love the suburbs, I love sprawl, and the same goes for most of my friends. I also hate noise and hate crowds. We don't want to live somewhere that has a "soul": we just want a place that's safe to live and have lots of space. My friends who have kids also want a place that has good schools. We're pretty bourgeois and proud of it. We're not hipsters, and in fact we're more likely to make fun of hipsters than anything.
- bretthoerner 10y ago
  The opposite describes me and most of my friends. ;) I suppose it makes sense that suburban people meet suburban friends and urban people meet urban friends. That said, I don't think people in urban areas would say they love crowds or noise (and I really don't think I encounter much of either in central Austin). I'm curious what you do with all of the space. The idea of loving sprawl is odd to me. I grew up in the burbs and hate the idea of raising my kid in a place where so much of your time is spent in a car. The idea of getting a car to go anywhere or do anything crushes my soul. I think if I moved out of the city I'd mostly miss being able to walk/bike (or bus) to so many things.
  - amyjess 10y ago
    > I suppose it makes sense that suburban people meet suburban friends and urban people meet urban friends. That's true. And it also helps that I work in the suburbs (at both my current job and my last job): all my coworkers live in the burbs too, even the ones who are the same age as me (32) or younger. Of course, I live in the Dallas area, where 90% of the tech industry is in the northern suburbs, and so are all the ethnic enclaves. You want to work in the tech industry? If you live in the city, you'll have to commute to the suburbs, so living in the burbs means you have a shorter commute. You want authentic {insert Asian ethnicity here} food? You have to go to the suburbs for it. > I'm curious what you do with all of the space. The idea of loving sprawl is odd to me. I have a lot of stuff. Also, I just like to have room to breathe; I'm slightly claustrophobic. And I just really like the look and feel of the way the northern suburbs of Dallas are laid out. I don't know if I can put it into words; it's just aesthetically pleasing to me. I've recently been toying around with the idea of moving out of state (because a. political reasons, and b. after my cat died last week, I kinda want to disappear and start over where I don't know anyone), and for aesthetic reasons the only other parts of the country that appeals to me are parts of SoCal, specifically Torrance and Orange County. They're the only places that have the same kind of aesthetics I like about the Dallas burbs. > I grew up in the burbs and hate the idea of raising my kid in a place where so much of your time is spent in a car. The idea of getting a car to go anywhere or do anything crushes my soul. I think if I moved out of the city I'd mostly miss being able to walk/bike (or bus) to so many things. I'm actually childfree, so I have no intention of raising a kid, but if I did, I'd like to raise my kid in an environment like the one I grew up in. I had a front yard and a back yard to play in, trees to climb, a large neighborhood to walk and ride my bike around. I still have fond memories walking or riding my bike down the winding alleyways and residential streets of Far North Dallas. I feel sorry for my friends' kids who are growing up in apartments (suburban apartments, yes, but still apartments). Apartment complexes just aren't conducive to that kind of atmosphere. There was no crime, no homeless people shouting things at me on the street. I went to highly-rated public schools... my family didn't have to worry about burning $$$$ on a private school just to get me a good education. Oh, and speaking of homeless people shouting things at me on the street... that regularly happened to me when I worked downtown from 2012 to 2014. I constantly had homeless people demanding I give them money or cigarettes, and they'd call me a liar when I told them I don't carry cash or that I quit smoking. I wouldn't want to subject a kid to that. During that time, I fervently wished I had a car so I could just roll up the windows and not have to deal with them. I'll always equate "not taking a car to go somewhere or do something" with "being subject to street harassment". Oh yeah, and when I worked downtown, I was too early in my transition for me to really get catcalls; if I worked there now, I'd probably be catcalled to hell and back. No thank you. I'd rather have the safety and the security of a car when I go places. Also, your name sounds really, really familiar. I think we may have gone to high school together. Did you go to HS in Richardson, TX in the early 00s? (no, you won't recognize my name... I changed my whole name -- first, middle, and last -- a few years ago)
pouetpouet 10y ago
damned if you do, damned if you don't. Want/have to move into ig cities for work->you want to live bourgeois style city center. want to stay in the boonies for cheap housing/nature/lifestyle-> you think you are entitled to a job here, jos aren't coming to you, you have to move to big job centers...
VLM 10y ago
Gaslighting. You're poor, but that's OK because you never wanted money anyway and its far more important to do other things than to have money and the accompanying lifestyle. Now pay no attention to who has siphoned the money you would have had out of the system so you can't have it, isn't it more important that you hug trees? Cities have soul, I mean, spirits, I mean lots of places to buy spirits, I mean bars, and alcohol consumption is the only important cultural activity in life, why being drunk is the definition of being cultured.. Other than that, there's nothing to do in the city other than cultural activities that tend to be too expensive (if you had money you'd be living in the burbs and commuting to the activity like all the participants) and nobody on a percentage basis attends those cultural activities. Probably 100000 people say how great it is that we have a theater for off broadway musicals for every person who buys an actual over priced ticket. There are no bars in the burbs (LOL). In fact there is nothing to do in the burbs. Yup people should definitely be encouraged to stay away and stop crowding my burb.
Arizhel 10y ago
>Meanwhile, houses in the boonies are cheap. If you can remote-work your way into a boonie lifestyle, you can own a home on a rather modest income indeed. You can, but then you're stuck with all the downsides of living in the boonies: you're far away from any cultural activities, shopping, good grocery stores (i.e. not Walmart), and all the people around you are probably culturally very different and even downright distasteful, unless you happen to like extremely religious and conservative people asking you about your personal relationship with Jesus or what kind of guns you like. And this isn't all "boonies" either; some of them are pretty pricey. I live about 75 minutes from DC in a pretty rural area currently, and houses here are not that cheap. However, if I moved near some family members (about an hour SW of Richmond VA) houses there are much cheaper. And the benefits are somewhat similar: either way it's roughly an hour to get to some decent shopping, though DC's stuff is much better than RVA's, but RVA does have some cultural attractions plus some higher-end shops, just not as much as DC. But being surrounded by people you have no interest in meeting kinda sucks; at least when you're right in a city it's easier to find groups or people you get along well with who aren't too far away. Anyway, this all assumes remote work. For the Millenials, this might not be that helpful. Most jobs still require you to be on-site, and that's not going to be doable if you live in the boonies and don't want a long commute. And that's just computer work; very little non-computer work can be done remotely. What we really need is real estate development laws which push for the construction of more affordable housing, though that would probably mean more high-rise condos, rather than single-family houses. Instead, developers always target the high end of the market, building "luxury condos" and the like. There's a limited amount of real estate anywhere, so the obvious solution is to build up, not out. Finally, another thing about those "cheap" houses in the boonies. I live in one of those currently, and the heating bills are atrocious. New, nice houses out here are expensive; the cheap ones are older and horribly inefficient. They're not building a lot of new houses in the boonies, so it's mainly older stuff. The new houses in the boonies are giant mansions built by rich people as getaways. Any "new" houses in the boonies are crappy little manufactured homes.
- nunez 10y ago
  What's wrong with the grocery at Walmart??????
marssaxman 10y ago
This shift was already happening with "gen X" - you are describing my attitude. But owning a home was never a "dream" for me - honestly it's kind of a hassle. I've recently been thinking about selling mine, turning all that imaginary equity into real money, and going back to renting. I'd be able to move back in closer to where the action is, and I'd waste less of my time and money dealing with unpredictable maintenance problems. Homeownership can be an OK investment, but it's not really that great, and you can have a lot more flexibility and security if you just stick all that money into an index fund.
fulafel 10y ago
Geometry says you can fit exponentially more people near city centers as the radius of the dense center grows linearly. IOW, marginal increase in dense city housing should be cheap per apartment.
nunez 10y ago
Uh, not all of us do? I hated living in NYC.

obstinate 10y ago

Is it really, though? How much more efficient is owning than renting in most markets? My sense was that, given the rate at which people typically move, it's normally a wash.

rahimnathwani 10y ago
"My sense was that, given the rate at which people typically move, it's normally a wash." The difference between renting and buying isn't just the monthly payment. It's also the range of outcomes. If you buy a place with 20% down, and the property price goes up by 20% whilst you're living there, you've doubled your net worth. In some US states (e.g. California) mortgages are nonrecourse[0], so it's a bit with unlimited upside, but capped downside. If the property price crashes to 50% of the purchase price, you can walk away, losing only your initial deposit. [0] http://www.financialsamurai.com/non-recourse-states-walk-away-from-mortgage/ http://www.financialsamurai.com/non-recourse-states-walk-awa...
- Swizec 10y ago
  The caveat is that for that $200k+ deposit on a 1-bedroom in SF, you could go travel the world for 4 or 5 years. Or have 4.7 years of rent for the same place. After which you're likely to get tired of SF anyway and move somewhere else. Oh and in the 4.7 years you've been paying rent out of savings, you've saved up enough for the next 4.7 years of rent in NYC ... or many many years of rent anywhere else. So yeah, I for one am def not ever buying unless I can cash it out in one go. Then again, there are many things you could do for a million dollars in cash. Like retire for 10 years and do cool shit.
  - adrianN 10y ago
    For a million bucks your can retire for good.
  - jcon321 10y ago
    wonder how your family will enjoy the shakeup every time you feel like moving

nickthemagicman 10y ago

I'm never home. Between work and social life, I'm literally only home to sleep. I have minimal amounts of stuff too. How come there's no just, beds for rent, for like 200 bucks a month?

unimpressive 10y ago
You want https://en.wikipedia.org/wiki/Capsule_hotel https://en.wikipedia.org/wiki/Capsule_hotel Not very popular in the states yet, but we'll see.
- dfischer 10y ago
  Those are pretty expensive though aren't they? Comparatively $50 a night.
  - miguelrochefort 10y ago
    Hotel rooms are $100 a night, yet appartements their size aren't nearly as expensive on a monthly basis. I could see capsule rooms going for $100 a month.
  - amyjess 10y ago
    Yeah, I have a friend who just moved to Japan (and he's lived there before) who told me the same thing. Some friends and I ate lunch with him the day before he left, and he mentioned that living in Japan isn't too expensive if you know where to live, and he knows how to only pay $300/month in rent. So I asked him if he meant capsule hotels. He told me what you said, and then he said that he meant hostels. Hostels are dirt cheap, even if you pay extra for a private room. You can probably live in Japan for less than $300/month rent if you're willing to sleep in the hostel's common area.
- eb0la 10y ago
  I saw this in Munich airport some weeks ago: http://www.napcabs.com http://www.napcabs.com They're also expensive (10-15€ hour), but I guess for a long lease (weeks) the price could be better (around the 20-30€ day in Osaka/Tokyo) because the ROI will happen quickly.

matt_wulfeck 10y ago

Trumps proposed economic plan is going to blast so many of the benefits to owning a home since the standard deduction will be doubled[1]. It will be cheaper to rent and it will really help maximize space. Say what we will about the president but this will be a massive boon to renting nomads. Coupled with the fact that soon state tax might not be deductible, and there may be an entire class of people who find it better to sell their home and live elsewhere. 1. https://www.donaldjtrump.com/policies/tax-plan https://www.donaldjtrump.com/policies/tax-plan

WillPostForFood 10y ago
So that's good, right? Prices will go down and the wealth transfer from poor renters to wealthy buyers via the mortgage interest deduction will go away.
- matt_wulfeck 10y ago
  It's my opinion that the Trump tax plan is good. There will be less financial incentive to owning a home or taking out a huge loan.
greesil 10y ago
1) Any hopeful homebuying millennials would also have not have the benefit of the deductions. 2) Wouldn't this just pass the cost onto renters? This seems more like a way to shift the tax burden to the middle class.
- matt_wulfeck 10y ago
  The beauty of the standard deduction is that it goes unqualified to everyone. The rich itemize their taxes almost without exception. IANAA, but interest on a rental is a business expense, therefore will be be unaffected by this change.
  - greesil 10y ago
    You didn't actually address my first point, and you're factually incorrect on the second. Are you confused, or are you paid shill?

solidsnack9000 10y ago

People are always being turned into serfs somehow. It never quite succeeds.

Broken_Hippo 10y ago
"It never quite succeeds." Until, you know, it does - and it does occasionally. That's why we talk about them in history classes. NO one wants to be labeled a serf, though, so modern folks are rarely actually given that formal title. It'd be bad for other people's business.

deleted 10y ago

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Dowwie 10y ago

s/home/college tuition and student loan debt/g

dmolony 10y ago

American greatness was long premised on the common assumption was that each generation would do better than previous one. Why is editing so poor these days?

eli_gottlieb 10y ago
Because nobody wants to pay for it.

thedevil 10y ago

The argument that people today live worse than people in the 80s is insane. Yes, it seems so in the real GDP numbers, but it defies the rising standards of living that surround us, showing up everywhere but the numbers. Would anyone here want to live like the average Joe of the eighties, using only goods and services available then? Traditional GDP and inflation figures seem to be losing usefulness They clearly don't capture most of the tech gains (which have been huge). And I suspect they don't adequately capture quality improvements.

coldtea 10y ago
>The argument that kids today live worse than their parents is insane. Yes, it seems so in the real GDP numbers, but it defies the rising standards of living that surround us, showing up everywhere but the numbers. Would anyone here want to live like the average Joe of the eighties, using only goods and services available then? Because it's not about whether you can have Netflix and modern gadgets and Uber, but whether you can afford shelter, whether you can provide for a family, whether you have to work like a dog and miss your whole life, whether you'll be able to pay your debt (student loans etc), whether you'll be able to afford healthcare, being able to retire etc. Living with only "80s goods and services" is much better than not being able to afford basic today's services, but having a smartphone and broadband internet. And of course wealth is relative to societal norm, not absolute. If you live in the USA like a 18th century peasant with the "goods and services" available to 18th century TODAY, you're not lucky just because you don't live in cavemen-era "goods and services".
norea-armozel 10y ago
The tech gains are mostly in areas which don't benefit consumers beyond fancier phones and bigger TV screens. Where it counts such as lower cost of living, better healthcare, and the like it's hasn't materialized for those in the lower economic segments. They're still coasting by on the Great Society programs despite their repeated gutting. If the current POTUS can't replace it with livable wages and jobs I suspect we'll see something akin to a Jacobin uprising (blood, heads, and all).
- 10y ago

dsfyu404ed 10y ago

>By the 2030s, large swaths of the state—particularly along the coast—could become geriatric belts, with an affluent older boomer population served by a largely minority servant class. How feudal! The irony of California having anything in common with Florida would drive some people insane. Those are exactly the kind of people I want to see driven insane.

deleted 10y ago

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amyjess 10y ago

Millennial here. I actively don't want to own. I don't want to have to worry about paying for my own maintenance or landscaping. I rent a townhouse in the suburbs, and I'm perfectly happy with it. I guess I kinda split the difference between the "stereotypical Millennial" and the reality the article points out: I prefer living in the burbs, but I don't want to own. Here's something that happened to me last month: something in my downstairs toilet broke, and it caused the toilet to repeatedly fill up its tank and dump it on the floor. Imagine my shock when I came downstairs to find that the carpet on a third of my first floor was soaked through, with the bathroom having a few inches of standing water. What did I do? I pulled out my phone and called the leasing office, telling them I had a plumbing emergency. Within an hour, the maintenance guy was here, and he fixed my toilet at ho cost to me. He also told me he was sending for a guy with a wetvac. An hour later, the carpet cleaner showed up to wetvac the carpet and replace the padding, again at no cost to me. Also, in the past I've had several problems with my air conditioner. I've had the fan die, I've had the AC unit die, I've had the internal AC unit start dripping water on the carpet. All of those times, I just called the leasing office, and they sent someone out to fix it at no cost to me. Meanwhile, one of my friends who owns his own house has ranted on Facebook several times about how his AC problems are bankrupting him, and he's already sunk five figures into replacing stuff. Why would I ever want to own when I get free maintenance and don't have to worry about a down payment?

andrewmcwatters 10y ago
Because in the long term you spend dramatically more money. You will constantly have to move when rent increases. You will raise a family with children never having a single frame of reference for what "home" is or was. You are at the mercy of the market. You own no land. A sub-commoner among commoners.
- amyjess 10y ago
  > Because in the long term you spend dramatically more money. Doesn't matter if I don't have the cash on hand to afford to replace a dead AC unit in addition to having to make a mortgage payment that month. A fixed monthly rent payment is easier to budget for than having to worry about every unplanned maintenance emergency, even if the rent payment is larger over the course of decades. I looked up my friend's post about his AC problems... he was looking at $3-6k when his compressor died ($6k for a new unit; if he can just replace the compressor, $2k for parts, another $1k for installation), and that was after his AC broke three times the previous year. We live in Texas. Air conditioners break all the time because the massive heat we get in the summers (100°F for several weeks isn't uncommon) places a huge strain on the AC. > You will constantly have to move when rent increases. I've lived in the same place for a decade. My salary has risen with rent. If I ever move, it'll be because I want a change, not because I'll be priced out of my current place. > You will raise a family with children never having a single frame of reference for what "home" is or was. See above. Also, I'm childfree (I've even chemically sterilized myself), so I'll have no children to raise in any kind of home. On top of that, I've seen homeowners who sell their home and move every few years because they keep taking jobs out of state. > You are at the mercy of the market. So are homeowners. Remember the subprime crisis a decade ago? Remember all the people who ended up with underwater mortgages because their property values fell? Can you imagine being stuck with owning a home that's worth significantly less than what you owe after you've lost your job and can't find a new job that pays enough to afford your mortgage payment? > You own no land. That's an awfully medieval way of thinking, and it doesn't apply to the modern world. You could say the same thing about people who own luxury condos in New York and San Francisco. "You own no land" is just as relevant to me as "you own no cattle". > A sub-commoner among commoners. And that's just unsubstantive rhetoric.

lazyant 10y ago

USA basically has the cheapest housing in the world https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count...

droidist2 10y ago
Interesting. But what if you factor commute time? It may be cheap to live 50 highway exits away from your job but it comes with its own costs.

davidf18 10y ago

Scarcity leads to higher prices and in the case of the high cost of housing in NYC, DC, Boston, London, SF, LA (and perhaps much of CA) is political use of zoning density restrictions to create artificial scarcity which benefits land owners at the expense of renters or those who wish to buy a house. This is a form of "rent seeking" which creates a market failure or market inefficiency. Because of these regulations Donald Trump is far wealthier than he would be in an efficient market and is a major, major source of inequality. I recently read that in London which has a green belt used to create land scarcity, the cost of land as a proportion of housing has risen from about 2 percent to 75 percent of housing costs. In NYC, taxi medallions were valued at $1.2 million because government created artificial scarcity limiting medallions to 13,000 for a population of 8.5 million. Taxi drivers who leased cabs paid high costs because of the medallion scarcity and passengers would pay much higher fares. Then Uber/Lyft/Gett/Via came along and relieved the politically induced scarcity. Now, not only are bailable cabs much, much more available, but prices have come down, sometimes substantially. The price of the taxi medallions decreased from $1.2 million to $500,000 to $700,000. Happily, the fix to high housing costs does not cost any money. It simply needs laws reversed that created artificial scarcity of land. This would require millennials (and others) to get an education that teaches them at least the most basic of economics and then to vote out of office politicians who are for the zoning density restrictions and the high cost of housing. David Ricardo in reference to combatting the "Corn Laws" of Britain first discussed "rent seeking" -- the use of politics to create market inefficiencies and scarcity benefiting special interests. In that context, there was an import tax on any grain including wheat to make bread. This lead to a higher cost of food. British farmers would receive more money for their grain which enabled the landowners of the farms to charge a higher lease for their land. So, workers were forced to subsidize landholders because of the politically induced scarcity "rent seeking" of grain. David Ricardo, a wealthy broker, joined Parliament to reverse the Corn Laws.