9 ms·

Landed (YC W16) on why teacher home-ownership is central to improving schools

49 points by lebanon_tn 10y ago

bradleyjg 10y ago
This post is a bait and switch. The title and first few paragraphs talk about America, but all the analysis is focused solely on the Bay Area. No justification is given for why the results for the Bay Area should be generalizable for America writ large. There's nothing wrong with focusing on the Bay Area, that's certainly a big enough problem to tackle. But the title, graphics and first few paragraphs should be changed to reflect that.
- jra6 10y ago
  I don't disagree with your comment -- none of us are necessarily great blog writers :). I would say the way we think about this is that there is both a cyclical and structural housing problem in American cities. The structural piece is that: 1. there is a limited supply of land in near proximity to economic opportunity -- most of this land is concentrated in cities. 2. cities need a wide variety of people to live in them to function properly. 3. even if we paid all of those people a median wage, the median person will struggle to accumulate significant wealth while paying rent. 4. the banking system cannot be expected to take low down payment risk without making the entire system vulnerable to another housing crash. 5. therefore if no 3rd party equity exists, then the only people that will be able to acquire any land holdings will be the sons/daughters of those with existing land holdings (intergenerational wealth transfers)
  - wbl 10y ago
    And this isn't a problem if cities permitted adequate housing growth and goverments didn't encourage detached single family homes in urban areas with massive subsidies.
- xrange 10y ago
  > No justification is given for why the results for the Bay Area should be generalizable for America writ large. Hockey. Stick.
HarryHirsch 10y ago
But what do they actually do, and why do you need a startup to do it? Hanover, NH has a housing price problem, but Dartmouth College offers subsidized housing to its faculty. Why can't school districts do the same?
- lnanek2 10y ago
  The blog post doesn't say, but if you dig through their site you eventually find an explanation. Go here then click on "how it works": https://landed.com https://landed.com No idea why the direct link to that is broken. Anyway, it looks like, they pay your down payment, then take 25% of any profit when you sell.
  - FireBeyond 10y ago
    Half of your down payment.
  - xrd 10y ago
    Fascinating. I'm curious if this will work, strong(er) incentive to not sell and unlikely that a teacher will receive a sudden windfall permitting them to move. But, maybe if they are a part of the success story of a neighborhood, they can share the increase in their equity with Landed.com. I love the long term bet that is happening here with this startup and their customers.
- FireBeyond 10y ago
  Because Dartmouth is sitting on a $4.5B endowment that earns $90MM/year, while the NH Education Department is barely breaking even (and according to proposals, actually likely needs $800MM injected into it to catch up to where it should be)?
- m0llusk 10y ago
  Housing affordability is a pervasive problem. All modestly compensated professions are at risk including all manner of repair and maintenance job. Subsidizing all low end housing is not possible, so there must be some way to make housing available to those in need. It should be understood that current circumstances have no precedent in history and show signs of market dysfunction. Just as most famines are complicated if not caused by market failures so the current lack of housing appears to be related to systemic failures. It is no coincidence that we are seeing rapid increases not only in people without homes but also homes without people at the same time as high end luxury estates intended as financial gambling chips go for decades without any residents moving in.
jedberg 10y ago
I live in the Bay Area and my wife is a teacher. I know a lot of Bay Area teachers. And the ones that live anywhere close to the school they work at are all married to engineers, without exception. That's the only way they can afford to live near school.
- jra6 10y ago
  You certainly have to be a dual income household to have a chance of making it as a teacher in the Bay Area. That said, educators in Mountain View are paid reasonably well ($80,000 - $130,000). Two educators can still afford to buy a home reasonably close to Mountain View, they just can't save money fast enough for a $200,000+ down payment while concurrently paying rent. One of the first homes we did was a principal in Oakland. He was just able to make it work on a single income.
  - monk_e_boy 10y ago
    If you could wave a magic wand to fix housing for teachers, what would the solution look like?
    - jra6 10y ago
      In California, I would eliminate Prop 13 for landlords (which would increase teacher salaries 20%-30%). To me, that's a no-brainer. The other no-brainer is decreasing political barriers to additional density. Everything else requires trade-offs. - If you allow educator salaries to track property values instead of CPI, you create massive inequities between school districts. Maybe a regional inflation index that includes housing costs? - If you raise salaries, you have to raise taxes. - If you build teacher-specific housing, you're just passing the buck to the next profession. Regardless of all the above, I think you'll need mechanisms for people to share the investment risks of expensive land ownership. I'm not sure mortgage insurance is the best mechanism -- hence Landed.
      - milesrout 10y ago
        Even if salaries for teachers teaching at schools in rich and poor areas are the same, the best teachers will gravitate as much as possible towards richer schools, and who can really blame them? This is already a problem, everywhere in the world. Allowing teachers to make more money doing easier work in an easier environment because housing prices are higher is a terrible idea. At the same time, teachers have to be able to afford to live in areas they're teaching in. Combining the above two, teacher salaries really need to rise across the board.
hanoz 10y ago
Homeowner property wealth is a ponzi scheme, enriching early adopters and money lenders at the expense of wealth generators - like teachers. Helping people get on at bottom, while it may help them outbid their compatriots, ultimately benefits the higher ups to the detriment of everybody else.
- jra6 10y ago
  Land is like any commodity of fixed supply. It is increasingly valuable as incomes and inequality grows. Until such a time that the supply/demand dynamic in cities is significantly altered, it will be valuable (whether it is properly priced is another matter altogether). I guess I'd rather live in a place that has more distributed ownership of land, rather than less :)
  - hanoz 10y ago
    So would I, but propping up the pyramid is decidedly not the way to achieve that. Land may be in fixed supply, but the supply of borrowed-into-existence money is not.
  - deleted 10y ago
    [deleted]
  - DesiLurker 10y ago
    No land is plenty, even in markets like bay area, its the schools that are limited commodities. add to that various building restrictions and you have perfect recipe for the mess SV is in. I recall around 2006 Elizabeth warren did a study for most markets in US and found for every single point deviation in school performance there was 2 point deviation in housing cost. translation people are mortgaging themselves to the hilt to get the best opportunities for their kids. commute is the second factor. essentially people extend their commute till they can afford the house/school.
maerF0x0 10y ago
Homeownership is a luxury, not a right. Its still within reach in many locales. If the locals value education as a product they will bid it up. I dont see how this isnt just the market telling educators they should go elsewhere?
- jra6 10y ago
  I'll be the first to advocate for higher salaries for educators, nurses, firefighters, police officers and essential public employees. I think they provide an absolutely fundamental service to our communities. That said, Stanford has a similar housing support program for its professors because when you're moving from Iowa to Palo Alto, it doesn't matter how much your pay has increased. You're going to need equity support to buy a home.
  - sjg007 10y ago
    Stanford owns the land the houses are on. They have deed restrictions that mean you have to sell the house to another eligible Stanford employee when you leave and you can only price it within a specific range... in addition to offering down payment assistance.
- dcosson 10y ago
  > Homeownership is a luxury, not a right. Why do we spend $100+ billion per year of tax payer dollars subsidizing luxury purchases? (via the federal mortgage interest deduction)
  - toomuchtodo 10y ago
    That's chump change compared to the subsidies through FHA, Fannie Mae, and Freddie Mac. The US government plays a direct role in subsidizing homeownership because it creates community cohesion.
    - maerF0x0 10y ago
      someone cannot have community cohesion as a long term renter? Anecdata to illustrate the point. A friend of mine and his family rented their home for something like 20 yrs. It often makes sense to have people not buy. The capitalization for a house can be long in the past, meaning that the cost vs rent is very favorable to the landlord. Similarly, the only reason to sell an asset is when you think you can make more money on the equity elsewhere. If its true that the landlord can take their equity elsewhere for a better return, maybe the renter (soon to be owner) should be investing elsewhere? Also, afaik young people are increasingly mobile, meaning they're going to be giving a large portion of their equity (either downpayment or profits) to real estate agents' commissions, banks closing costs, legal fees, etc etc. if housing is not affordable, its probably because of artificially (or temporarily) restricted supply.
clairity 10y ago
from a purely capitalistic perspective, i can understand that providing financing of this sort could be of some economic value, but i worry that it simply continues to exacerbate wealth disparity by funneling more money to already wealthy financial institutions under the guise of helping teachers and children. rather than this type of roundabout financing, the economics can be straightforward: school districts in wealthy areas should just pay their teachers more. and it sounds like they are, at least in some districts, according to co-founder jra6 elsewhere on this page: "...educators in Mountain View are paid reasonably well ($80,000 - $130,000)...". even so, the idea that teacher homeownership is the central problem for schools is quite a stretch. poverty and a dozen similar issues are much more likely the central problems for schools, not teacher homeownership.
- jra6 10y ago
  I don't disagree -- I definitely struggle with this. The problem we are solving shouldn't exist. We should live in an society where people with equal incomes should have equal access to credit. The reality is though that intergenerational wealth transfer are the primary way people acquire the necessary equity to buy homes (they get help from Mom and Dad). So I think you need both... both higher incomes, and mechanisms that create intermediary stages being renting and owning. And on being a stretch, don't disagree. I feel the incentive is to be provocative beyond reasonableness, so apologize for that! Public schools in America are suffering death from a thousand cuts. I will tell you though that when urban school turnover (largely as a result of rising housing costs) is now up to 25%/year... it becomes your primary issue pretty fast.
  - bkohlmann 10y ago
    Are intergenerational wealth transfers the primary means to down payments across the Bay Area or the US? The latter doesn't comport with my friends experience, but I'm always easily persuaded by hard data. Any references?
    - jra6 10y ago
      The hard data is piss poor. It's largely self-reported data collected by media agencies. Just google "Bank of Mom and Dad", there are lots of poorly done studies. This one is okay: http://paa2005.princeton.edu/papers/51443 http://paa2005.princeton.edu/papers/51443 The reason it's poor is because everyone has an incentive (bank, broker, parents, you) to under-report the parental funds. Parents send the gift money in advance (3 months to be exact), banks look the other way to meet equity requirements and the transaction takes place.
jra6 10y ago
[One of the co-founders of Landed]. This post doesn't really talk much about what we do. What we do is run down payment assistance programs for private schools and public school districts to help their teachers become financially secure near the communities they serve. That's a mouthful! The economic problem here is that if you're a median wage household in a city like SF, NY, DC, etc. you will struggle to save enough money to make a conforming down payment while paying rent. Most of our teachers get trapped in a cycle of their wages increasing at the exact rate of their household expenses. Homeownership in cities is not for everybody. But for those community members who are making a very long-term commitment to a place with very predictable salary schedules, locking in your housing payments is an important part of your security. In the absence of rent controls (which we can talk about at length on why they are often misguided), homeownership is the only form of insurance on rising housing costs. As an owner (especially in California thanks to Prop13), you can be protected from the failure of all levels of government to build sufficient housing for rising economic activity in cities.
- deleted 10y ago
  [deleted]
- sjg007 10y ago
  Well good luck. Schools have a lot of land but won't build housing on them. You can get mortgages with 3% down that aren't FHA to buy but you can't qualify for more than the appraised value. And you still have all cash buyers.
- greyhoundmatt 10y ago
  The fact that you are praising Prop 13, which is a large factor in the unequal funding of schools and has exacerbated the exact problems that you refer to in your blog post, is supremely troubling. I'd welcome a more in depth explanation on your thoughts on Prop 13.
  - jra6 10y ago
    I think when I came to California, I shared your position on Prop13... namely that it was a unnecessary market distortion that distributed wealth from the new to the old that ultimately worked against the apparent intent of the legislation (to make California more affordable). I've sinced developed a more nuanced view. I believe Prop13 for owner-occupied, primary residences is perhaps flawed, but something I believe two reasonable people can disagree on (happy to explain more fully). I believe Prop13 for anything else has absolutely no rational justification and needs to be overturned at the earliest opportunity.
chrisseaton 10y ago
Did you know I can't find a single link from this blog article to your website? Even the link at the bottom which says 'landed.com' actually links to 'blog.landed.com'! And then there's actually text that says 'www.landed.com', which isn't a link! Why do you do this?! It's brought up lots of HN and I can't believe people still do it. You've got me reading your blog, but you aren't going to link to your website? Presumably the whole point of the blog is to get people interested in what you're doing, but you aren't going to link to it? It's madness! Edit: actually there is just one - in the author's profile at the bottom. There isn't one in any of the layout of the blog page, or the blog front page.
- jra6 10y ago
  Shamefully poor tech competencies! Come help us! :)
  - bjterry 10y ago
    You should put your e-mail in your Hacker News profile so people can contact you!
- ChicagoBoy11 10y ago
  At one point I saw a www.landed.com which wasn't a link, but then i just copypasta'd it... so yeah, you have a vaild point!
- dang 10y ago
  We detached this subthread from https://news.ycombinator.com/item?id=14083529 https://news.ycombinator.com/item?id=14083529 and marked it off-topic. (It's still a fair point of course.)
gregatragenet3 10y ago
If they focused on home ownership for educators teaching medicine they could achieve the trifecta! Markets in which government has decided 'everyone must have this' and subsequently interfered/distorted until they've created bubbles/crashes.. I'm pessimistic that encouraging anyone to take on more debt then they could ordinarily obtain is a helpful thing in the long term. The post talks about how educators find their rents unaffordable - how does getting them out of an unaffordable rental into an unaffordable mortgage make their situation any better? If anything it makes their situation worse. They'll be locked into a mortgage for a house bought in a bubble. If they have an opportunity to move for a better position or more salary they'll be unable to do so.
- jra6 10y ago
  I similarly struggle with that pessimism. I mentioned below that our primary goal is to even access to homeownership across people who make similar incomes. A big component of housing-related credit is equity (ie. collateral). Many parts of that dynamic are very rational -- having equity is a proxy for financial responsibility (you know how to save money, or have access to other people who don't mind occasionally gifting you equity). Having equity also buffers the lender from loss when housing prices cycle, which is a very important part of building resiliant financial infrastructure. I think our high-level argument is that for a very specific group of people (tenured employees) in very specific places (urban diversified economies that are resistant to land bubbles), there is opportunity to push the edges of the box.
  - monk_e_boy 10y ago
    What do you think of teachers who re-train and get a different job? Around 30% of newly qualified teachers do this.
    - jra6 10y ago
      Our investment follows our educators regardless of what they do afterwards. I do think that less educators would re-train if they had more financial security in their chosen profession.
sna1l 10y ago
When you click on how-it-works on the navbar from the homepage, it navigates to the page as expected. But if you refresh then you get a 404. Looks like there isn't a SSL certificate on the first load, but when you refresh or navigate to the link directly there is (https://www.landed.com/how-it-works https://www.landed.com/how-it-works).
fiatjaf 10y ago
This argument is so wrong in so many ways it will end being absolute truth because no one can explain its full wrongness in less than 50 hours.
vogelke 10y ago
Articles like this are embarrassing. Here's how to fix the schools: 1. When a parent withdraws their kid from a school that's not doing the job, the parent's money GOES WITH THEM to whatever other school they ultimately choose. 2. If any kid in any class disrupts the class and prevents anyone else from learning, the teacher informs the principal. The principal says "Yes, sir/ma'am, I'll take care of it", removes the kid from the room, places them in a different room, and informs the kid's parents. 3. If any kid in any classroom verbally threatens or physically assaults a teacher for any reason at all, the kid is immediately expelled. Any lawsuit over this by any parent is dismissed via lack of standing to sue, and the parent pays the school's court costs. Problem solved. If you work at a school that can't seem to fire incompetent teachers, you'll be out of business and good riddance. If you teach at a school, your word is SCRIPTURE when it comes to a disruptive or dangerous student. That means you have the last word about when or whether a student is returned to your class, not the pricipal or the board or some parent who can't discipline a kid. If you're a parent and your little snowflake can't handle the concept of "don't hit the teacher and don't start screaming in class", you are free to educate him yourself.
- djtriptych 10y ago
  This is wrong on many levels. Here are some problems. 1a. This policy favors parents who can pick up and leave a school (and ship their kid somewhere else) if they're not happy with it. For low income parents, school often doubles as day care and this may not be feasible. 1b. We are ignoring the reason why this school might be failing your kid. Maybe it's a bad school. Maybe your kid has an undiagnosed learning disability. If it's the latter, and we flood the hardest-to-teach students to the best schools, what happens? In real life, schools have to worry about composing teachable classrooms, and this policy is a great way to destoy that balance. 2. This policy, in practice, will likely prove to be both sexist and racist. Boys are WAY more likely to disrupt classrooms especially at a young age. This policy is a good way to segregate the sexes. Not that that's necessarily bad, but certainly its an undeclared side effect. On the race front, black kids are way more likely to be punished harshly for similar offenses as white kids. Who determines what is disruptive and what's kids being kids? Why on earth you think any (every??) teacher is qualified to make these distinctions is beyond me. When you're talking about public dollars, this matters. 3a. Please show me a successful school where this policy is 100% implemented. It's absurd. For teenagers, you are dealing with people at the most emotionally volatile time of their life. Any school system should seek to first serve the student, and this policy flatly fails that test. Also, why just physical assault against teachers? What about physical assault against other students? How about sexual assault? Hate crimes ok? How about libel or slander? Kids, it turns out, will be kids. There's a reason we don't let them vote or drive or buy guns. Zero-tolerance policies are unlikely to be enforceable without devastating effects on outcomes. 3b. A 1-strike policy of expulsion for outbursts will guarantee a higher dropout rate, which costs taxpayers (that's you) hundreds of thousands of dollars in lost tax revenue over the dropout's lifetime. Still a great long-term idea? I could go on.
ada1981 10y ago
I appreciate the effort here, but in general I don't think more fine grained mechanisms of offering selling debt to the lower classes is going to help long term. Perhaps if you put upper limits on the assets of the people who can invest, but that seems unlikely. Also, home ownership tends to be one of the "liabilities disguised as assets" that middle / upper middle class people love to buy. Since our economy appears to be heading towards a post labor society with a massive divide between rich and poor, what exactly is the utility of educating kids to work in an economy that won't exist? Seems to me the core skills we ought to help facilitate are creativity, maintaining an authentic self, emotional and Relational mastery, cooperation / democratic citizenry, permaculture, eco-regenerative architecture.. Instead of the industrialist model we have now, perhaps we ought to be teaching them how to develop, integrate and share technology into eco-regenerative housing and permaculture farms. Use the education resources to purchase land, kids can help learn to build and work cooperatively along side adults, in a democratically run community. You provide cool tiny-homes to anyone who needs them. And build them together, learning all sorts of great skills as you go along. I am adivising & working on 2 such pilot projects in Costa Rica right now with a group of accomplished intellectuals (some of whom you may know). Costa Rica was chosen for a number of reasons including climate, mental health of population and a lack of a standing military. We aim to develop a globally connected network of such projects in a neo-tribal model that fits with the emergent archaic values as post-modernism gives way to a more holistic and connected world. Happy to invite any of you down to check out the property if you like, anthony+cr at 175g . com Ps, I hope Landed helps some people, at least in the short term, and also that there passion to serve underserved populations with integrity continues no matter the success / failure of this particular manifestation.
- gm-conspiracy 10y ago
  Seems similar in concept to a kibbutz: https://en.wikipedia.org/wiki/Kibbutz https://en.wikipedia.org/wiki/Kibbutz
- sudosteph 10y ago
  Cool tiny homes with electricity and running water, I would hope? Because if not, it sounds like you're just advocating for families to live in poverty and have their children work on farms instead of attending school. Which sounds a bit... backwards. I mean, the idea of a commune is hardly a new one. Socialists and religious folk have been at that game for a while, so I wonder how you think plan to differentiate meaningfully. Also, > a neo-tribal model that fits with the emergent archaic values as post-modernism gives way to a more holistic and connected world. Holy cringey buzzword mashup Batman! Sounds like the market appeal here is for the vaccine-denier crowd. I don't think many people here would agree with "archaic values" being an innately good thing. I read that sentence and I can only think of the short, brutal lives human beings experienced during the era of tribalism. Not of something holistic and connecting. I'm also a bit amused that you say you chose Costa Rica for it's "lack of a standing military". I worry that might be interpreted in a less-than-positive way by the government there.
zazpowered 10y ago
This is kinda like point.com right?
futun 10y ago
Be very careful of the word "home ownership". It means different things to different people. Much like the weasel-word "affordability" (which means better access to credit, and not cheaper prices) "home ownership" means "mortgaged, bank-owned properties". Both terms mean debt slavery and a preservation of the status quo (ie: property owners stay rich. buyers, mortgagers and prospective buyers remain poor). What is needed is cheaper housing. Not "affordability" or easier-to-access debt. The way to get cheaper housing is to destroy housing as an investment class. And the way you do that is by taxing 2nd and 3rd properties at increasingly higher rates.
- ScottBurson 10y ago
  I don't know if you're ever going to "destroy housing as an investment class", but I certainly agree that Prop. 13 should never have applied to anything but the taxpayer's primary residence.
- esoterica 10y ago
  > And the way you do that is by taxing 2nd and 3rd properties at increasingly higher rates. And then those taxes end up getting passed on to renters, who are on average poorer than their home-owning counterparts.
  - dimva 10y ago
    This would be the case in an efficient market, where the risk-adjusted economic profit of renting out homes is close to 0. This is not the case because San Francisco artificially restricts supply of housing. This causes rents to be determined solely by (small) supply and (large) demand. Increasing taxes would not decrease supply of housing or increase demand for it, so it would just serve to decrease the excess economic profits landlords are making.
    - cmdrfred 10y ago
      You can't really say that without knowledge of how high those additional taxes would be. If the costs rise to the point that a reasonable profit for the level of risk involved can't be made then prices would certainly have to rise irrespective of demand. I suspect given the nature of ever rising taxation in most municipalities that introducing this tax even in a modest form would increase perceived risk[0] of property ownership enough to increase average rents. [0]If the cost of an unoccupied property or a nonpaying tenant goes up, rents will likely go up in response.

49 points by lebanon_tn 10y ago

This post is a bait and switch. The title and first few paragraphs talk about America, but all the analysis is focused solely on the Bay Area. No justification is given for why the results for the Bay Area should be generalizable for America writ large. There's nothing wrong with focusing on the Bay Area, that's certainly a big enough problem to tackle. But the title, graphics and first few paragraphs should be changed to reflect that.

jra6 10y ago
I don't disagree with your comment -- none of us are necessarily great blog writers :). I would say the way we think about this is that there is both a cyclical and structural housing problem in American cities. The structural piece is that: 1. there is a limited supply of land in near proximity to economic opportunity -- most of this land is concentrated in cities. 2. cities need a wide variety of people to live in them to function properly. 3. even if we paid all of those people a median wage, the median person will struggle to accumulate significant wealth while paying rent. 4. the banking system cannot be expected to take low down payment risk without making the entire system vulnerable to another housing crash. 5. therefore if no 3rd party equity exists, then the only people that will be able to acquire any land holdings will be the sons/daughters of those with existing land holdings (intergenerational wealth transfers)
- wbl 10y ago
  And this isn't a problem if cities permitted adequate housing growth and goverments didn't encourage detached single family homes in urban areas with massive subsidies.
xrange 10y ago
> No justification is given for why the results for the Bay Area should be generalizable for America writ large. Hockey. Stick.

HarryHirsch 10y ago

But what do they actually do, and why do you need a startup to do it? Hanover, NH has a housing price problem, but Dartmouth College offers subsidized housing to its faculty. Why can't school districts do the same?

lnanek2 10y ago
The blog post doesn't say, but if you dig through their site you eventually find an explanation. Go here then click on "how it works": https://landed.com https://landed.com No idea why the direct link to that is broken. Anyway, it looks like, they pay your down payment, then take 25% of any profit when you sell.
- FireBeyond 10y ago
  Half of your down payment.
- xrd 10y ago
  Fascinating. I'm curious if this will work, strong(er) incentive to not sell and unlikely that a teacher will receive a sudden windfall permitting them to move. But, maybe if they are a part of the success story of a neighborhood, they can share the increase in their equity with Landed.com. I love the long term bet that is happening here with this startup and their customers.
FireBeyond 10y ago
Because Dartmouth is sitting on a $4.5B endowment that earns $90MM/year, while the NH Education Department is barely breaking even (and according to proposals, actually likely needs $800MM injected into it to catch up to where it should be)?
m0llusk 10y ago
Housing affordability is a pervasive problem. All modestly compensated professions are at risk including all manner of repair and maintenance job. Subsidizing all low end housing is not possible, so there must be some way to make housing available to those in need. It should be understood that current circumstances have no precedent in history and show signs of market dysfunction. Just as most famines are complicated if not caused by market failures so the current lack of housing appears to be related to systemic failures. It is no coincidence that we are seeing rapid increases not only in people without homes but also homes without people at the same time as high end luxury estates intended as financial gambling chips go for decades without any residents moving in.

jedberg 10y ago

I live in the Bay Area and my wife is a teacher. I know a lot of Bay Area teachers. And the ones that live anywhere close to the school they work at are all married to engineers, without exception. That's the only way they can afford to live near school.

jra6 10y ago
You certainly have to be a dual income household to have a chance of making it as a teacher in the Bay Area. That said, educators in Mountain View are paid reasonably well ($80,000 - $130,000). Two educators can still afford to buy a home reasonably close to Mountain View, they just can't save money fast enough for a $200,000+ down payment while concurrently paying rent. One of the first homes we did was a principal in Oakland. He was just able to make it work on a single income.
- monk_e_boy 10y ago
  If you could wave a magic wand to fix housing for teachers, what would the solution look like?
  - jra6 10y ago
    In California, I would eliminate Prop 13 for landlords (which would increase teacher salaries 20%-30%). To me, that's a no-brainer. The other no-brainer is decreasing political barriers to additional density. Everything else requires trade-offs. - If you allow educator salaries to track property values instead of CPI, you create massive inequities between school districts. Maybe a regional inflation index that includes housing costs? - If you raise salaries, you have to raise taxes. - If you build teacher-specific housing, you're just passing the buck to the next profession. Regardless of all the above, I think you'll need mechanisms for people to share the investment risks of expensive land ownership. I'm not sure mortgage insurance is the best mechanism -- hence Landed.
    - milesrout 10y ago
      Even if salaries for teachers teaching at schools in rich and poor areas are the same, the best teachers will gravitate as much as possible towards richer schools, and who can really blame them? This is already a problem, everywhere in the world. Allowing teachers to make more money doing easier work in an easier environment because housing prices are higher is a terrible idea. At the same time, teachers have to be able to afford to live in areas they're teaching in. Combining the above two, teacher salaries really need to rise across the board.

hanoz 10y ago

Homeowner property wealth is a ponzi scheme, enriching early adopters and money lenders at the expense of wealth generators - like teachers. Helping people get on at bottom, while it may help them outbid their compatriots, ultimately benefits the higher ups to the detriment of everybody else.

jra6 10y ago
Land is like any commodity of fixed supply. It is increasingly valuable as incomes and inequality grows. Until such a time that the supply/demand dynamic in cities is significantly altered, it will be valuable (whether it is properly priced is another matter altogether). I guess I'd rather live in a place that has more distributed ownership of land, rather than less :)
- hanoz 10y ago
  So would I, but propping up the pyramid is decidedly not the way to achieve that. Land may be in fixed supply, but the supply of borrowed-into-existence money is not.
- deleted 10y ago
  [deleted]
- DesiLurker 10y ago
  No land is plenty, even in markets like bay area, its the schools that are limited commodities. add to that various building restrictions and you have perfect recipe for the mess SV is in. I recall around 2006 Elizabeth warren did a study for most markets in US and found for every single point deviation in school performance there was 2 point deviation in housing cost. translation people are mortgaging themselves to the hilt to get the best opportunities for their kids. commute is the second factor. essentially people extend their commute till they can afford the house/school.

maerF0x0 10y ago

Homeownership is a luxury, not a right. Its still within reach in many locales. If the locals value education as a product they will bid it up. I dont see how this isnt just the market telling educators they should go elsewhere?

jra6 10y ago
I'll be the first to advocate for higher salaries for educators, nurses, firefighters, police officers and essential public employees. I think they provide an absolutely fundamental service to our communities. That said, Stanford has a similar housing support program for its professors because when you're moving from Iowa to Palo Alto, it doesn't matter how much your pay has increased. You're going to need equity support to buy a home.
- sjg007 10y ago
  Stanford owns the land the houses are on. They have deed restrictions that mean you have to sell the house to another eligible Stanford employee when you leave and you can only price it within a specific range... in addition to offering down payment assistance.
dcosson 10y ago
> Homeownership is a luxury, not a right. Why do we spend $100+ billion per year of tax payer dollars subsidizing luxury purchases? (via the federal mortgage interest deduction)
- toomuchtodo 10y ago
  That's chump change compared to the subsidies through FHA, Fannie Mae, and Freddie Mac. The US government plays a direct role in subsidizing homeownership because it creates community cohesion.
  - maerF0x0 10y ago
    someone cannot have community cohesion as a long term renter? Anecdata to illustrate the point. A friend of mine and his family rented their home for something like 20 yrs. It often makes sense to have people not buy. The capitalization for a house can be long in the past, meaning that the cost vs rent is very favorable to the landlord. Similarly, the only reason to sell an asset is when you think you can make more money on the equity elsewhere. If its true that the landlord can take their equity elsewhere for a better return, maybe the renter (soon to be owner) should be investing elsewhere? Also, afaik young people are increasingly mobile, meaning they're going to be giving a large portion of their equity (either downpayment or profits) to real estate agents' commissions, banks closing costs, legal fees, etc etc. if housing is not affordable, its probably because of artificially (or temporarily) restricted supply.

clairity 10y ago

from a purely capitalistic perspective, i can understand that providing financing of this sort could be of some economic value, but i worry that it simply continues to exacerbate wealth disparity by funneling more money to already wealthy financial institutions under the guise of helping teachers and children. rather than this type of roundabout financing, the economics can be straightforward: school districts in wealthy areas should just pay their teachers more. and it sounds like they are, at least in some districts, according to co-founder jra6 elsewhere on this page: "...educators in Mountain View are paid reasonably well ($80,000 - $130,000)...". even so, the idea that teacher homeownership is the central problem for schools is quite a stretch. poverty and a dozen similar issues are much more likely the central problems for schools, not teacher homeownership.

jra6 10y ago
I don't disagree -- I definitely struggle with this. The problem we are solving shouldn't exist. We should live in an society where people with equal incomes should have equal access to credit. The reality is though that intergenerational wealth transfer are the primary way people acquire the necessary equity to buy homes (they get help from Mom and Dad). So I think you need both... both higher incomes, and mechanisms that create intermediary stages being renting and owning. And on being a stretch, don't disagree. I feel the incentive is to be provocative beyond reasonableness, so apologize for that! Public schools in America are suffering death from a thousand cuts. I will tell you though that when urban school turnover (largely as a result of rising housing costs) is now up to 25%/year... it becomes your primary issue pretty fast.
- bkohlmann 10y ago
  Are intergenerational wealth transfers the primary means to down payments across the Bay Area or the US? The latter doesn't comport with my friends experience, but I'm always easily persuaded by hard data. Any references?
  - jra6 10y ago
    The hard data is piss poor. It's largely self-reported data collected by media agencies. Just google "Bank of Mom and Dad", there are lots of poorly done studies. This one is okay: http://paa2005.princeton.edu/papers/51443 http://paa2005.princeton.edu/papers/51443 The reason it's poor is because everyone has an incentive (bank, broker, parents, you) to under-report the parental funds. Parents send the gift money in advance (3 months to be exact), banks look the other way to meet equity requirements and the transaction takes place.

jra6 10y ago

[One of the co-founders of Landed]. This post doesn't really talk much about what we do. What we do is run down payment assistance programs for private schools and public school districts to help their teachers become financially secure near the communities they serve. That's a mouthful! The economic problem here is that if you're a median wage household in a city like SF, NY, DC, etc. you will struggle to save enough money to make a conforming down payment while paying rent. Most of our teachers get trapped in a cycle of their wages increasing at the exact rate of their household expenses. Homeownership in cities is not for everybody. But for those community members who are making a very long-term commitment to a place with very predictable salary schedules, locking in your housing payments is an important part of your security. In the absence of rent controls (which we can talk about at length on why they are often misguided), homeownership is the only form of insurance on rising housing costs. As an owner (especially in California thanks to Prop13), you can be protected from the failure of all levels of government to build sufficient housing for rising economic activity in cities.

deleted 10y ago
[deleted]
sjg007 10y ago
Well good luck. Schools have a lot of land but won't build housing on them. You can get mortgages with 3% down that aren't FHA to buy but you can't qualify for more than the appraised value. And you still have all cash buyers.
greyhoundmatt 10y ago
The fact that you are praising Prop 13, which is a large factor in the unequal funding of schools and has exacerbated the exact problems that you refer to in your blog post, is supremely troubling. I'd welcome a more in depth explanation on your thoughts on Prop 13.
- jra6 10y ago
  I think when I came to California, I shared your position on Prop13... namely that it was a unnecessary market distortion that distributed wealth from the new to the old that ultimately worked against the apparent intent of the legislation (to make California more affordable). I've sinced developed a more nuanced view. I believe Prop13 for owner-occupied, primary residences is perhaps flawed, but something I believe two reasonable people can disagree on (happy to explain more fully). I believe Prop13 for anything else has absolutely no rational justification and needs to be overturned at the earliest opportunity.

chrisseaton 10y ago

Did you know I can't find a single link from this blog article to your website? Even the link at the bottom which says 'landed.com' actually links to 'blog.landed.com'! And then there's actually text that says 'www.landed.com', which isn't a link! Why do you do this?! It's brought up lots of HN and I can't believe people still do it. You've got me reading your blog, but you aren't going to link to your website? Presumably the whole point of the blog is to get people interested in what you're doing, but you aren't going to link to it? It's madness! Edit: actually there is just one - in the author's profile at the bottom. There isn't one in any of the layout of the blog page, or the blog front page.

jra6 10y ago
Shamefully poor tech competencies! Come help us! :)
- bjterry 10y ago
  You should put your e-mail in your Hacker News profile so people can contact you!
ChicagoBoy11 10y ago
At one point I saw a www.landed.com which wasn't a link, but then i just copypasta'd it... so yeah, you have a vaild point!
dang 10y ago
We detached this subthread from https://news.ycombinator.com/item?id=14083529 https://news.ycombinator.com/item?id=14083529 and marked it off-topic. (It's still a fair point of course.)

gregatragenet3 10y ago

If they focused on home ownership for educators teaching medicine they could achieve the trifecta! Markets in which government has decided 'everyone must have this' and subsequently interfered/distorted until they've created bubbles/crashes.. I'm pessimistic that encouraging anyone to take on more debt then they could ordinarily obtain is a helpful thing in the long term. The post talks about how educators find their rents unaffordable - how does getting them out of an unaffordable rental into an unaffordable mortgage make their situation any better? If anything it makes their situation worse. They'll be locked into a mortgage for a house bought in a bubble. If they have an opportunity to move for a better position or more salary they'll be unable to do so.

jra6 10y ago
I similarly struggle with that pessimism. I mentioned below that our primary goal is to even access to homeownership across people who make similar incomes. A big component of housing-related credit is equity (ie. collateral). Many parts of that dynamic are very rational -- having equity is a proxy for financial responsibility (you know how to save money, or have access to other people who don't mind occasionally gifting you equity). Having equity also buffers the lender from loss when housing prices cycle, which is a very important part of building resiliant financial infrastructure. I think our high-level argument is that for a very specific group of people (tenured employees) in very specific places (urban diversified economies that are resistant to land bubbles), there is opportunity to push the edges of the box.
- monk_e_boy 10y ago
  What do you think of teachers who re-train and get a different job? Around 30% of newly qualified teachers do this.
  - jra6 10y ago
    Our investment follows our educators regardless of what they do afterwards. I do think that less educators would re-train if they had more financial security in their chosen profession.

sna1l 10y ago

When you click on how-it-works on the navbar from the homepage, it navigates to the page as expected. But if you refresh then you get a 404. Looks like there isn't a SSL certificate on the first load, but when you refresh or navigate to the link directly there is (https://www.landed.com/how-it-works https://www.landed.com/how-it-works).

fiatjaf 10y ago

This argument is so wrong in so many ways it will end being absolute truth because no one can explain its full wrongness in less than 50 hours.

vogelke 10y ago

Articles like this are embarrassing. Here's how to fix the schools: 1. When a parent withdraws their kid from a school that's not doing the job, the parent's money GOES WITH THEM to whatever other school they ultimately choose. 2. If any kid in any class disrupts the class and prevents anyone else from learning, the teacher informs the principal. The principal says "Yes, sir/ma'am, I'll take care of it", removes the kid from the room, places them in a different room, and informs the kid's parents. 3. If any kid in any classroom verbally threatens or physically assaults a teacher for any reason at all, the kid is immediately expelled. Any lawsuit over this by any parent is dismissed via lack of standing to sue, and the parent pays the school's court costs. Problem solved. If you work at a school that can't seem to fire incompetent teachers, you'll be out of business and good riddance. If you teach at a school, your word is SCRIPTURE when it comes to a disruptive or dangerous student. That means you have the last word about when or whether a student is returned to your class, not the pricipal or the board or some parent who can't discipline a kid. If you're a parent and your little snowflake can't handle the concept of "don't hit the teacher and don't start screaming in class", you are free to educate him yourself.

djtriptych 10y ago
This is wrong on many levels. Here are some problems. 1a. This policy favors parents who can pick up and leave a school (and ship their kid somewhere else) if they're not happy with it. For low income parents, school often doubles as day care and this may not be feasible. 1b. We are ignoring the reason why this school might be failing your kid. Maybe it's a bad school. Maybe your kid has an undiagnosed learning disability. If it's the latter, and we flood the hardest-to-teach students to the best schools, what happens? In real life, schools have to worry about composing teachable classrooms, and this policy is a great way to destoy that balance. 2. This policy, in practice, will likely prove to be both sexist and racist. Boys are WAY more likely to disrupt classrooms especially at a young age. This policy is a good way to segregate the sexes. Not that that's necessarily bad, but certainly its an undeclared side effect. On the race front, black kids are way more likely to be punished harshly for similar offenses as white kids. Who determines what is disruptive and what's kids being kids? Why on earth you think any (every??) teacher is qualified to make these distinctions is beyond me. When you're talking about public dollars, this matters. 3a. Please show me a successful school where this policy is 100% implemented. It's absurd. For teenagers, you are dealing with people at the most emotionally volatile time of their life. Any school system should seek to first serve the student, and this policy flatly fails that test. Also, why just physical assault against teachers? What about physical assault against other students? How about sexual assault? Hate crimes ok? How about libel or slander? Kids, it turns out, will be kids. There's a reason we don't let them vote or drive or buy guns. Zero-tolerance policies are unlikely to be enforceable without devastating effects on outcomes. 3b. A 1-strike policy of expulsion for outbursts will guarantee a higher dropout rate, which costs taxpayers (that's you) hundreds of thousands of dollars in lost tax revenue over the dropout's lifetime. Still a great long-term idea? I could go on.

ada1981 10y ago

I appreciate the effort here, but in general I don't think more fine grained mechanisms of offering selling debt to the lower classes is going to help long term. Perhaps if you put upper limits on the assets of the people who can invest, but that seems unlikely. Also, home ownership tends to be one of the "liabilities disguised as assets" that middle / upper middle class people love to buy. Since our economy appears to be heading towards a post labor society with a massive divide between rich and poor, what exactly is the utility of educating kids to work in an economy that won't exist? Seems to me the core skills we ought to help facilitate are creativity, maintaining an authentic self, emotional and Relational mastery, cooperation / democratic citizenry, permaculture, eco-regenerative architecture.. Instead of the industrialist model we have now, perhaps we ought to be teaching them how to develop, integrate and share technology into eco-regenerative housing and permaculture farms. Use the education resources to purchase land, kids can help learn to build and work cooperatively along side adults, in a democratically run community. You provide cool tiny-homes to anyone who needs them. And build them together, learning all sorts of great skills as you go along. I am adivising & working on 2 such pilot projects in Costa Rica right now with a group of accomplished intellectuals (some of whom you may know). Costa Rica was chosen for a number of reasons including climate, mental health of population and a lack of a standing military. We aim to develop a globally connected network of such projects in a neo-tribal model that fits with the emergent archaic values as post-modernism gives way to a more holistic and connected world. Happy to invite any of you down to check out the property if you like, anthony+cr at 175g . com Ps, I hope Landed helps some people, at least in the short term, and also that there passion to serve underserved populations with integrity continues no matter the success / failure of this particular manifestation.

gm-conspiracy 10y ago
Seems similar in concept to a kibbutz: https://en.wikipedia.org/wiki/Kibbutz https://en.wikipedia.org/wiki/Kibbutz
sudosteph 10y ago
Cool tiny homes with electricity and running water, I would hope? Because if not, it sounds like you're just advocating for families to live in poverty and have their children work on farms instead of attending school. Which sounds a bit... backwards. I mean, the idea of a commune is hardly a new one. Socialists and religious folk have been at that game for a while, so I wonder how you think plan to differentiate meaningfully. Also, > a neo-tribal model that fits with the emergent archaic values as post-modernism gives way to a more holistic and connected world. Holy cringey buzzword mashup Batman! Sounds like the market appeal here is for the vaccine-denier crowd. I don't think many people here would agree with "archaic values" being an innately good thing. I read that sentence and I can only think of the short, brutal lives human beings experienced during the era of tribalism. Not of something holistic and connecting. I'm also a bit amused that you say you chose Costa Rica for it's "lack of a standing military". I worry that might be interpreted in a less-than-positive way by the government there.

zazpowered 10y ago

This is kinda like point.com right?

futun 10y ago

Be very careful of the word "home ownership". It means different things to different people. Much like the weasel-word "affordability" (which means better access to credit, and not cheaper prices) "home ownership" means "mortgaged, bank-owned properties". Both terms mean debt slavery and a preservation of the status quo (ie: property owners stay rich. buyers, mortgagers and prospective buyers remain poor). What is needed is cheaper housing. Not "affordability" or easier-to-access debt. The way to get cheaper housing is to destroy housing as an investment class. And the way you do that is by taxing 2nd and 3rd properties at increasingly higher rates.

ScottBurson 10y ago
I don't know if you're ever going to "destroy housing as an investment class", but I certainly agree that Prop. 13 should never have applied to anything but the taxpayer's primary residence.
esoterica 10y ago
> And the way you do that is by taxing 2nd and 3rd properties at increasingly higher rates. And then those taxes end up getting passed on to renters, who are on average poorer than their home-owning counterparts.
- dimva 10y ago
  This would be the case in an efficient market, where the risk-adjusted economic profit of renting out homes is close to 0. This is not the case because San Francisco artificially restricts supply of housing. This causes rents to be determined solely by (small) supply and (large) demand. Increasing taxes would not decrease supply of housing or increase demand for it, so it would just serve to decrease the excess economic profits landlords are making.
  - cmdrfred 10y ago
    You can't really say that without knowledge of how high those additional taxes would be. If the costs rise to the point that a reasonable profit for the level of risk involved can't be made then prices would certainly have to rise irrespective of demand. I suspect given the nature of ever rising taxation in most municipalities that introducing this tax even in a modest form would increase perceived risk[0] of property ownership enough to increase average rents. [0]If the cost of an unoccupied property or a nonpaying tenant goes up, rents will likely go up in response.