4 ms·

I don't have a link handy. I have seen these stats a lot and discussion of the problem hits HN so often that it never fails to shock me that the statement gets

by Mz 9y ago

I don't have a link handy. I have seen these stats a lot and discussion of the problem hits HN so often that it never fails to shock me that the statement gets questioned. Someday, I will learn to keep a link handy. For now, I will just note that: 1) I have portable income and can potentially move anywhere in the US. 2) I was willing to move to almost anywhere in the continental US to get back into housing that I could afford that also would not be a threat to my health. 3) I have spent 2+ years searching for a town with either rents around $400 a month and/or houses for sale that were under ~$70k that also were actually fit for human habitation without first putting tens of thousands of dollars worth of work into them. 4) I have spent hours upon hours combing through real estate listings, auction sites that list distressed property etc. 5) I have looked at the details of super cheap properties in Detroit and other cities. There were a bunch of houses in Detroit listed at $1 on one auction site. When you read the fine print, there is at least $500 worth of closing costs and the houses are horrifying uninhabitable shitholes. I found a place I could go, but it was like the proverbial needle in a haystack. Most of those super cheap houses listed on the internet are absolutely not the sort of thing where someone could just move in and start paying a couple hundred a month for the mortgage. Many of them are being sold as tear downs. They have been through a fire or flood and are not currently fit for human habitation. I also looked at houses in the middle of nowhere. I have looked at houses that explicitly say things like "No foundation. Will not qualify for financing. Cash only." I signed up for a rent to own website. The first property I inquired about got a reply that said, no, they don't actually do rent to own arrangements. I have six years of college. I bought a house for no money down in my twenties. I was willing and able to go just about anywhere. I found it to be a very hard problem to solve. So, I would really like to see your sources for these mythical affordable houses. Because I haven't purchased one yet, so I could potentially still go someplace else for some real steal of a deal. My research suggests that, no, you aren't actually going to get a decent house anywhere in the US for $16k with conventional financing (not "cash buyers only" and/or "oh, yeah, it has this long list of serious problems"). That isn't real.

prostoalex 9y ago
So I think you're right that a lot of properties listed on the low-end of the "sort by price" option will tend to be teardowns. But we also need to address expectations - typical housing affordability figures assume a household, not an individual. According to https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... the median household income in the US is at $59k, with most mortgage lenders preference for max of 30% to go towards mortgage payments the Zillow estimator https://www.zillow.com/mortgage-calculator/house-affordability/ https://www.zillow.com/mortgage-calculator/house-affordabili... tells me that a household earning $59k can afford a $360k house after a $70k down payment - reasonable assumptions considering the 20% down payment requirements. Potential total affordability goes significantly down if the 20% is not met, as I'm guessing you get screwed on interest rates. Is a significant portion of housing stock in the US priced above $360k?
- Mz 9y ago
  There is an awesome book called "How to lie with statistics." I highly recommend it. Your quotes of median incomes, etc, are very much in that vein, especially given that it is in a discussion of how to house the thousands of homeless people in LA. The history here in the US is this: We had The Great Depression in the 1930s. People were incredibly poor. This was followed by WW2. The men went off to war. The women got factory jobs. They stopped building cars when they converted the car factories to jeep factories. Luxury items like sugar were rationed. People were encouraged to grow Victory Gardens so farm food could feed the troops. The result: Two income couples with no opportunity to create babies and no means to spend all their money. Savings rate were as high as 50% during some parts of the war. The war ends. Soldiers come home. Women quit their jobs en masse to go be wives and moms. Soldiers get help purchasing houses. They get help going to college. There is both huge pent up demand for middle class housing and also the means to buy it. The entire nation rises to the occasion to roll out houses. They invent financing mechanisms, etc. Houses get built at breathtaking speed. The modern suburb is born. Their children, the Baby Boomers, reach adulthood in the 60s and 70s. SROs and boarding houses had been the standard answer for single young adults with entry level jobs. This generation had unprecedented upper class style wealth. They turned their noses up at SROs and the like. The US tore down about 80% of them. US housing stock skews strongly towards housing designed for a nuclear family. It is strongly shaped to this day by the 1950s nuclear family expectations, only on steroids for various reasons. The size of new houses has more than doubled since the 1950s and we expect a lot of amenities that were not the norm at that time. Meanwhile, demographics have diversified and moved away from the nuclear family. People are having children later. We have fewer children on average per family. We have more single adults, single parents and childless couples. Yet, our housing expectations default to 3 bedroom, 2 bath house in the burbs type housing. It doesn't even fit the demographics. We now by default expect single adults to rent a two or three bedroom place designed for a family and share it with room mates. There is damn little actually designed for single people or childless couples. Our housing is designed for a population, culture and lifestyle that mostly no longer exists. This is the crux of the problem. As I find things that actually work, I blog about it. I am actively encouraging homeless people in So Cal to leave and go to either cheaper parts of the state or go to another state entirely. Going to the Central Valley did not get me off the street, but it did improve my quality of life. Leaving the state did get me off the street. There is currently a deadly hepatitis epidemic killing homeless people in So Cal. If these people had a solution, most of them would be out of there like a bat of hell. This problem is quite dire. More actual affordable housing would not magically solve it overnight, but it would be a step in the right direction.

by Mz 9y ago

prostoalex 9y ago

So I think you're right that a lot of properties listed on the low-end of the "sort by price" option will tend to be teardowns. But we also need to address expectations - typical housing affordability figures assume a household, not an individual. According to https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... the median household income in the US is at $59k, with most mortgage lenders preference for max of 30% to go towards mortgage payments the Zillow estimator https://www.zillow.com/mortgage-calculator/house-affordability/ https://www.zillow.com/mortgage-calculator/house-affordabili... tells me that a household earning $59k can afford a $360k house after a $70k down payment - reasonable assumptions considering the 20% down payment requirements. Potential total affordability goes significantly down if the 20% is not met, as I'm guessing you get screwed on interest rates. Is a significant portion of housing stock in the US priced above $360k?

Mz 9y ago
There is an awesome book called "How to lie with statistics." I highly recommend it. Your quotes of median incomes, etc, are very much in that vein, especially given that it is in a discussion of how to house the thousands of homeless people in LA. The history here in the US is this: We had The Great Depression in the 1930s. People were incredibly poor. This was followed by WW2. The men went off to war. The women got factory jobs. They stopped building cars when they converted the car factories to jeep factories. Luxury items like sugar were rationed. People were encouraged to grow Victory Gardens so farm food could feed the troops. The result: Two income couples with no opportunity to create babies and no means to spend all their money. Savings rate were as high as 50% during some parts of the war. The war ends. Soldiers come home. Women quit their jobs en masse to go be wives and moms. Soldiers get help purchasing houses. They get help going to college. There is both huge pent up demand for middle class housing and also the means to buy it. The entire nation rises to the occasion to roll out houses. They invent financing mechanisms, etc. Houses get built at breathtaking speed. The modern suburb is born. Their children, the Baby Boomers, reach adulthood in the 60s and 70s. SROs and boarding houses had been the standard answer for single young adults with entry level jobs. This generation had unprecedented upper class style wealth. They turned their noses up at SROs and the like. The US tore down about 80% of them. US housing stock skews strongly towards housing designed for a nuclear family. It is strongly shaped to this day by the 1950s nuclear family expectations, only on steroids for various reasons. The size of new houses has more than doubled since the 1950s and we expect a lot of amenities that were not the norm at that time. Meanwhile, demographics have diversified and moved away from the nuclear family. People are having children later. We have fewer children on average per family. We have more single adults, single parents and childless couples. Yet, our housing expectations default to 3 bedroom, 2 bath house in the burbs type housing. It doesn't even fit the demographics. We now by default expect single adults to rent a two or three bedroom place designed for a family and share it with room mates. There is damn little actually designed for single people or childless couples. Our housing is designed for a population, culture and lifestyle that mostly no longer exists. This is the crux of the problem. As I find things that actually work, I blog about it. I am actively encouraging homeless people in So Cal to leave and go to either cheaper parts of the state or go to another state entirely. Going to the Central Valley did not get me off the street, but it did improve my quality of life. Leaving the state did get me off the street. There is currently a deadly hepatitis epidemic killing homeless people in So Cal. If these people had a solution, most of them would be out of there like a bat of hell. This problem is quite dire. More actual affordable housing would not magically solve it overnight, but it would be a step in the right direction.