5 ms·

> afford a home Can you afford rent, though? Isn't a bit extreme to expect to be able to own property -- like some sort of medieval lord -- in a major city?

alexbecker 10y ago
It didn't used to be. We should be asking why things seem to have regressed, shouldn't we?
- umanwizard 10y ago
  Didn't it? Were individuals ever commonly buying houses (EDIT: any property) in Manhattan, for example? I don't have any hard numbers, but I suspect LA simply having become more urban and desirable is a big part of it. It's certainly still possible to buy houses in suburban flyover country very cheaply.
  - colordrops 10y ago
    Not a fair comparison. Manhattan is a very dense small area. More comparable to L.A. would be the greater NY metropolitan region.
  - panzer_wyrm 10y ago
    Please do not change the goalposts. You were talking about property not houses. Condos are property and are easier to obtain.
    - deleted 10y ago
      [deleted]
beering 10y ago
Wouldn't rent and a monthly mortgage end up being about the same? The value provided by one unit of housing to its tenants should be about the same as the value to an owner living there, so an investor buying a unit shouldn't expect to reap huge returns relative to someone buying a unit with a X0-year mortgage, right? I think owning property would be much more expensive than renting in the case where the value is based on future appreciation, vs actual value that it provides as a living area. I admit I'm not an expert on real estate, so please explain to me whether this makes sense or not.
- sbov 10y ago
  In the last housing bubble rents and mortgages disconnected pretty severely. My friends and I were renting a million dollar house in Los Gatos for just $2400/month. Not sure how things are nowadays though.
  - linkregister 10y ago
    In the overall Bay Area, rents are moving up with house prices. Median rent in Los Gatos is $5.5k per month.
mythrwy 10y ago
Well given the number of houses in a major city obviously SOMEONE is affording them. Unless they are all owned by a handful of people (not really what we are shooting for here I'd think). Point being, its not unreasonable at all to expect to be able to afford a home.
colordrops 10y ago
Why would affording to purchase a property in a large diverse city like L.A. with a high salary be unreasonable? I really don't understand your stance.
- sjg007 10y ago
  It should be.. basic subdivision would work but it's nimbys that prevent it.
panzer_wyrm 10y ago
Not at all. Renting with no road to purchase turns you into serf. Owning your dwelling is the most basic form a security a human needs. I own a condo that I rent and live renting in other part of my city. The rents cancel each other. It works very nice for me. I definitely wish more people own their homes. I also love highrises.
- abalashov 10y ago
  I'm not sure this rather dated precept is compatible with the exigencies of 21st century economics, and the flexibility, mobility and long hours demanded. For one thing, houses are cash sinks. It doesn't make sense for highly paid professionals to spend enormous amounts of time or money reshingling roofs, painting, mowing lawns, treating weeds, trimming hedges, repairing plumbing, etc. The deep specialisation and constant attention that the professional economy asks are orthogonal to all those things. It's prudent to upload those demands to the cloud (aka your landlord, at scale) so to speak. I know far more urban professionals that were hindered by the ballast of owning real estate than those empowered by this "most basic form of security". Here in the sprawling metro Atlanta area, taking another job will very likely take you to a wholly different part of this vast agglomeration and doom you to a punishing commute unless you sell your house and relocate. The uncertainty, transaction costs and other friction kept a number of people I know in dead-end jobs until they were finally laid off. As a personal anecdote, I bought a condo in May 2007. I was drinking the very same Kool-Aid about basic form of security and whatnot. I finally let my home go to foreclosure in summer 2015. I financed at $160K, and in summer 2015 it appraised at $85K. I still owed $140K. One of the lenders sued me for a $29K deficiency and got a judgment, and I'll be paying them $250/mo for the next six years. Some security. I grant that my effort at partaking of the most basic form of security a human needs was exceptionally disastrous, but I think the housing crash educated a lot of people about just how much security it really offers. A senseless push to ownership for ownership's sake threatens to discard those valuable lessons. The real argument for owning vs. renting is the mortgage interest deduction, and that's an artifice of government tax policy that hugely distorts the market and the incentives.
  - panzer_wyrm 10y ago

alexbecker 10y ago

It didn't used to be. We should be asking why things seem to have regressed, shouldn't we?

umanwizard 10y ago
Didn't it? Were individuals ever commonly buying houses (EDIT: any property) in Manhattan, for example? I don't have any hard numbers, but I suspect LA simply having become more urban and desirable is a big part of it. It's certainly still possible to buy houses in suburban flyover country very cheaply.
- colordrops 10y ago
  Not a fair comparison. Manhattan is a very dense small area. More comparable to L.A. would be the greater NY metropolitan region.
- panzer_wyrm 10y ago
  Please do not change the goalposts. You were talking about property not houses. Condos are property and are easier to obtain.
  - deleted 10y ago
    [deleted]

beering 10y ago

Wouldn't rent and a monthly mortgage end up being about the same? The value provided by one unit of housing to its tenants should be about the same as the value to an owner living there, so an investor buying a unit shouldn't expect to reap huge returns relative to someone buying a unit with a X0-year mortgage, right? I think owning property would be much more expensive than renting in the case where the value is based on future appreciation, vs actual value that it provides as a living area. I admit I'm not an expert on real estate, so please explain to me whether this makes sense or not.

sbov 10y ago
In the last housing bubble rents and mortgages disconnected pretty severely. My friends and I were renting a million dollar house in Los Gatos for just $2400/month. Not sure how things are nowadays though.
- linkregister 10y ago
  In the overall Bay Area, rents are moving up with house prices. Median rent in Los Gatos is $5.5k per month.

mythrwy 10y ago

Well given the number of houses in a major city obviously SOMEONE is affording them. Unless they are all owned by a handful of people (not really what we are shooting for here I'd think). Point being, its not unreasonable at all to expect to be able to afford a home.

colordrops 10y ago

Why would affording to purchase a property in a large diverse city like L.A. with a high salary be unreasonable? I really don't understand your stance.

sjg007 10y ago
It should be.. basic subdivision would work but it's nimbys that prevent it.

panzer_wyrm 10y ago

Not at all. Renting with no road to purchase turns you into serf. Owning your dwelling is the most basic form a security a human needs. I own a condo that I rent and live renting in other part of my city. The rents cancel each other. It works very nice for me. I definitely wish more people own their homes. I also love highrises.

abalashov 10y ago
I'm not sure this rather dated precept is compatible with the exigencies of 21st century economics, and the flexibility, mobility and long hours demanded. For one thing, houses are cash sinks. It doesn't make sense for highly paid professionals to spend enormous amounts of time or money reshingling roofs, painting, mowing lawns, treating weeds, trimming hedges, repairing plumbing, etc. The deep specialisation and constant attention that the professional economy asks are orthogonal to all those things. It's prudent to upload those demands to the cloud (aka your landlord, at scale) so to speak. I know far more urban professionals that were hindered by the ballast of owning real estate than those empowered by this "most basic form of security". Here in the sprawling metro Atlanta area, taking another job will very likely take you to a wholly different part of this vast agglomeration and doom you to a punishing commute unless you sell your house and relocate. The uncertainty, transaction costs and other friction kept a number of people I know in dead-end jobs until they were finally laid off. As a personal anecdote, I bought a condo in May 2007. I was drinking the very same Kool-Aid about basic form of security and whatnot. I finally let my home go to foreclosure in summer 2015. I financed at $160K, and in summer 2015 it appraised at $85K. I still owed $140K. One of the lenders sued me for a $29K deficiency and got a judgment, and I'll be paying them $250/mo for the next six years. Some security. I grant that my effort at partaking of the most basic form of security a human needs was exceptionally disastrous, but I think the housing crash educated a lot of people about just how much security it really offers. A senseless push to ownership for ownership's sake threatens to discard those valuable lessons. The real argument for owning vs. renting is the mortgage interest deduction, and that's an artifice of government tax policy that hugely distorts the market and the incentives.
- panzer_wyrm 10y ago