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This is cool, but honestly I think there's a bigger problem that people don't seem to want to address: Housing affordability. Why do we allow home prices to be

This is cool, but honestly I think there's a bigger problem that people don't seem to want to address: Housing affordability. Why do we allow home prices to be so expensive? Simply no one from my (millenial) generation can afford to buy a house. Home prices are so beyond insane, and it's crippling my generation. I make $200k a year and I'm unable to buy a house where I live. That's how fucked it is.

yardie 9y ago
Remember all that money the various government treasuries loaned to banks to keep them afloat? Take a guess where it's being spent. There is so much currency in circulation due to quantitative easing that investors are running low on things to buy. So they are parking it in the few places they know to be safe; government bonds and real estate.
screaminghawk 9y ago
A lot of people are going to jump on this comment and say something along the lines of "change your lifestyle and you can afford one". That's not the problem here. House prices (in my location) have risen from 4x the average annual salary to 10x. Like the above commentor, I'm better off than most and I can just barely manage to scrimp and save enough to enter the housing market, by buying the parents home at a slight discount. There's not much more I could sacrifice. I have a huge advantage on the average Joe for a number of reasons and am still struggling. Sure, it's possible for me, but it's not possible for them. And that's the problem.
superJoy 9y ago
Maybe this is not brought up because this is not a universal problem. In the two metro areas I am most familiar with, Houston and Detroit, plenty of my millenial peers can afford and do in fact own homes. Admittedly, these are often starter homes well outside the urban core. But owning a single-family home close to the city center is a fairly delusional goal regardless of income, in my opinion.
pascalxus 9y ago
Your absolutely right. and no one realizes the enormity of the tragedy. With people traveling 10x longer commute distances the cost to the environment is also 10x as much as well!! Traffic on the highway gets clogged, causing people to spend even more time on their commute. So, CA laws that obstruct building like CEQA (an environmental protection law) are doing more to harm the environment than help it. Meanwhile, the next generation is being driven out of the bay area and eventually out of CA. And that's just the tip of the ice berg. All the solutions proposed by politicians (affordable housing, regulation) only serve to make the problem worse. The answer is, we need: massive increase in housing supply or a decrease in the # of employers/jobs in this area. I'm sure there's countless VCs and founders that want to solve this Housing/Transportation problems ~ potentially a multi-trillion dollar opportunity. But, it's absolutely unassailable: the barriers to entry are so extreme, and the amount of government legislation and politics in the way is so insurmountable, I don't even know of a single company or startup that's legitimately working on this problem. It's a man made problem, that will require a man-made solution. It'll take an army of politicians to make this happen, perhaps a startup filled with politicians, not engineers.
geebee 9y ago
Where do you live? Is it SF?
ThrustVectoring 9y ago
Housing prices follow pretty straightforwardly from incentives. Savers have counter-parties who owe debt. After the federal government ($19T), the next biggest is mortgages, with $14T, of which $10T is one-to-four family residences. Whether it's direct ownership of debt or intermediated through pensions, insurance companies, or banks, saving for retirement is largely done through putting others in debt. More people savings more aggressively means money gets cheaper until the market clears. Cheaper money means you can finance higher bids on assets prices such as homes and university educations. I have no idea how to fix it. I don't even know if it's possible. Making housing cheaper on a national scale means nuking pensions as people walk away from underwater mortgages. Probably the best bet is to inflate away these nominal obligations, but that has its own host of issues with screwing over retirees. Between lowering birth rates and improving health care, we as a society have been steadily ratcheting up the percentage of our economic output going towards supporting retirement. That's not sustainable when combined with how we've been also ratcheting up our standards of living. These trade off against each other, and it feels to me like the Boomers chose "both, but our kids pay for it".

yardie 9y ago

Remember all that money the various government treasuries loaned to banks to keep them afloat? Take a guess where it's being spent. There is so much currency in circulation due to quantitative easing that investors are running low on things to buy. So they are parking it in the few places they know to be safe; government bonds and real estate.

screaminghawk 9y ago

A lot of people are going to jump on this comment and say something along the lines of "change your lifestyle and you can afford one". That's not the problem here. House prices (in my location) have risen from 4x the average annual salary to 10x. Like the above commentor, I'm better off than most and I can just barely manage to scrimp and save enough to enter the housing market, by buying the parents home at a slight discount. There's not much more I could sacrifice. I have a huge advantage on the average Joe for a number of reasons and am still struggling. Sure, it's possible for me, but it's not possible for them. And that's the problem.

superJoy 9y ago

Maybe this is not brought up because this is not a universal problem. In the two metro areas I am most familiar with, Houston and Detroit, plenty of my millenial peers can afford and do in fact own homes. Admittedly, these are often starter homes well outside the urban core. But owning a single-family home close to the city center is a fairly delusional goal regardless of income, in my opinion.

pascalxus 9y ago

Your absolutely right. and no one realizes the enormity of the tragedy. With people traveling 10x longer commute distances the cost to the environment is also 10x as much as well!! Traffic on the highway gets clogged, causing people to spend even more time on their commute. So, CA laws that obstruct building like CEQA (an environmental protection law) are doing more to harm the environment than help it. Meanwhile, the next generation is being driven out of the bay area and eventually out of CA. And that's just the tip of the ice berg. All the solutions proposed by politicians (affordable housing, regulation) only serve to make the problem worse. The answer is, we need: massive increase in housing supply or a decrease in the # of employers/jobs in this area. I'm sure there's countless VCs and founders that want to solve this Housing/Transportation problems ~ potentially a multi-trillion dollar opportunity. But, it's absolutely unassailable: the barriers to entry are so extreme, and the amount of government legislation and politics in the way is so insurmountable, I don't even know of a single company or startup that's legitimately working on this problem. It's a man made problem, that will require a man-made solution. It'll take an army of politicians to make this happen, perhaps a startup filled with politicians, not engineers.

geebee 9y ago

Where do you live? Is it SF?

ThrustVectoring 9y ago

Housing prices follow pretty straightforwardly from incentives. Savers have counter-parties who owe debt. After the federal government ($19T), the next biggest is mortgages, with $14T, of which $10T is one-to-four family residences. Whether it's direct ownership of debt or intermediated through pensions, insurance companies, or banks, saving for retirement is largely done through putting others in debt. More people savings more aggressively means money gets cheaper until the market clears. Cheaper money means you can finance higher bids on assets prices such as homes and university educations. I have no idea how to fix it. I don't even know if it's possible. Making housing cheaper on a national scale means nuking pensions as people walk away from underwater mortgages. Probably the best bet is to inflate away these nominal obligations, but that has its own host of issues with screwing over retirees. Between lowering birth rates and improving health care, we as a society have been steadily ratcheting up the percentage of our economic output going towards supporting retirement. That's not sustainable when combined with how we've been also ratcheting up our standards of living. These trade off against each other, and it feels to me like the Boomers chose "both, but our kids pay for it".