16 ms·

In large cities across the US (and probably most of the world), there is some very large scale foreign speculation in the housing market going on. This is lead

In large cities across the US (and probably most of the world), there is some very large scale foreign speculation in the housing market going on. This is leading to rising rents and rising home prices. In Seattle, for example, many (newly) wealthy Chinese people are buying houses purely for investment purposes. I know some of them. One of them has purchased 10 houses, and lives in only one of them (when they are in the states). They've made millions on just this speculation. In the short term, this means housing prices are absurd. In the long term, when these houses are no longer appreciating in value at such large scales, we can expect a crash in the housing market. Which will likely mean something similar to the housing crisis of 2008. The Seattle city council has wanted to pass a law that would make it visible to the public which houses were being bought by foreign investors, but it was deemed illegal. https://www.seattletimes.com/seattle-news/politics/proposed-seattle-taxes-targeting-foreign-buyers-investment-properties-take-fire/ https://www.seattletimes.com/seattle-news/politics/proposed-... To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount). This is also a national security issue; this speculation cannot happen forever, and when it ends, I forsee an awful crash.

notyourwork 9y ago
> To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount). This is also a national security issue; this speculation cannot happen forever. Our economy will very likely crash when this speculation is no longer profitable. This is my biggest concern with wanting to dip my families toes into their first home purchase. We lived in Seattle last few years and the market is stupid, we recently moved to Bay area and this market is even more silly. (I know we pick some great places for first time home buyer but careers and education take you where they take you, that's another discussion.)
- beebmam 9y ago
  Yep, your career really does take you where it takes you. I'm in the same boat. I've lived here for 5 years and have been saving, was getting pretty close to being able to afford a house, and the last year or so has seen such a huge increase in home prices and a decrease in availability that I've given up hope.
  - mistermann 9y ago
    The funny thing is, if you grit your teeth and bought recently or even now, it's possible you could retire on the capital gains in <<< 10 years. Or you could be bankrupt. Either one seems equally possible to me.
    - sushisource 9y ago
      Well, only if you were willing to move to a much, much cheaper area to realize those gains.
      - mistermann 9y ago
        Not necessarily, if your house is going up $10k per month you could live on HELOCs. Easily possible in the last decade or so in Vancouver.
bspn 9y ago
Here's NZ's proposed (extreme) response to the foreign buyer problem: http://www.bbc.com/news/business-41745129 http://www.bbc.com/news/business-41745129
- bpicolo 9y ago
  Seems more sane than extreme. I think it's a pretty reasonable policy given real estate speculation trends in the last few years. It seems reasonable for countries should have strong policies for protecting domestic housing stock, whether those are outright bans or massive taxes.
xenihn 9y ago
>In Seattle, for example, many (newly) wealthy Chinese people are buying houses purely for investment purposes. Same thing in Los Angeles (the entire county) and Irvine.
- khedoros1 9y ago
  I own in OC. I remember when I bought, it felt like I was dodging between all-cash offers for a lot of places. It was difficult to find somewhere move in ready that was within my budget and didn't have an over-listing all-cash offer on it already (and this was years ago).
et-al 9y ago
The core issue is real estate as investment regardless of where it's coming from. Right now the most visible are overseas Chinese people with money buying property, but REITs have been picking up rental property for ages, and there are also PEREs (private equity real estate firms). If governments are to serve their people, then they should curtail this speculation. Of course in America, corporations are people.
- kevin_thibedeau 9y ago
  In English common law corporations are people, hence the name. They are a synthetic "body" for business purposes. This isn't a new concept created by Citizens United.
  - jacques_chester 9y ago
    It's usually better to say that they have "legal personality". They're not people, but like people, or charities, incorporated associations etc, they have an attribute that gives them legal existence a court will recognise. What Citizens United established was that free speech applied to legal personality generally, not humans in particular. Folk forget that this includes organisations they like, as well as the many they don't. It's easy to dislike the situation (as I do), but trickier to explain how to define a way out of it.
seanmcdirmid 9y ago
We saw this before with Japan, it didn't end well. If you think the states property markets are crazy, well, the Chinese ones are crazier by an order of magnitude. It's no wonder that many wealthy Chinese see the states (or other countries) as a safer bet. The upside is that rents in china are still reasonable (so that 7 million yuan apartment is only renting for 10k RMB/month). However, the same was true with Japan, and when their asset bubble crashed, it took many foreign markets with it (taking about a decade to recover, heck, even California, especially California, suffered).
- kqr2 9y ago
  I think a similar thing would have happened in the US during the Great Recession of 2007, however, the US government was willing to back all of the banks who were holding underwater mortgages. Had the government not done this, the banks would have been forced to unload property at fire-sale prices. 10 years later in major metropolitan areas, property prices are even higher than they were in 2007. Most likely the Federal government would pursue another bailout during a housing "collapse".
nerfhammer 9y ago
Build sufficient housing and they won't see it as a sure-thing investment anymore. They're betting that local politics will never allow this to happen.
- saosebastiao 9y ago
  You're right, and they're right. It would take a monumental shift in politics for local governments to give up their ability to buy favor with local residents through land use code.
seltzered_ 9y ago
Are you sure that it's foreign buyers? While it has been true in the Vancouver market, I read an article recently mentioning otherwise for Seattle: http://www.sightline.org/2017/07/05/stop-blaming-foreign-home-buyers/ http://www.sightline.org/2017/07/05/stop-blaming-foreign-hom...
- deleted 9y ago
  [deleted]
- linkregister 9y ago
  This is an excellent article. It does an excellent job of analyzing the problem.
neilparikh 9y ago
I'm not sure why it matters if the buyer is foreign or American. You would get the same issue if an investor from Texas decided to buy 10 houses and live in 1. The key issue here is that there's housing that's unoccupied, even under lots of demand. The fix for that is to tax or ban unoccupied housing, not ban foreign housing.
- deleted 9y ago
  [deleted]
- gozur88 9y ago
  The fix is to stop printing so much money it's basically free to borrow. These people aren't buying houses with their own money - it's all OPM.
- closeparen 9y ago
  >if an investor from Texas decided to buy 10 houses and live in 1 An investor from Texas can simply open a Vanguard account. The theoretical mechanism for Chinese speculation is that real estate is the path of least regulatory resistance compared to stock markets, etc. under Chinese law.
  - uiri 9y ago
    Nothing to do with regulatory resistance. Chinese culture generally views the stock market as gambling in a way that US culture does not. Real estate is a safe investment. It is also protected against seizure by the Chinese government.
akanet 9y ago
I sincerely doubt foreign purchases are the main driver of rent increase, and no study has ever demonstrated as much. The anti-foreigner mindset is extremely dangerous. Rising rents are almost entirely because of local restrictions on creating more housing. The beneficiaries of restricted supply are existing owners and landlords.
- wan23 9y ago
  It's not anti-foreigner, it's anti-speculation. It's easy to see that home purchase prices are well beyond what any reasonable family would want to pay, and yet the prices keep rising. The problem isn't that it's foreign money coming in, it's that there's so much of it.
  - nerfhammer 9y ago
    Well it's either greedy, scheming tech workers or greedy, scheming Chinese speculators. Isn't there a pattern here? The problem simply must be caused by powerful, scheming outsiders. Despite lack of evidence, as this comment is a great example, defying the claim of lack of such by GP as if it simply hadn't been heard.
    - jacobolus 9y ago
      A lot of it is greedy, scheming local slumlords, to be honest. If we abolished Prop 13 statewide, did some minor up-zoning throughout the Bay Area (and had more mixed use zones), made new housing easier to construct (less drawn out process for people to block development, etc.), reduced parking requirements, worked on improving public transit, and taxed unlived-in buildings [or better, switched toward land-value taxes], did more planning at a regional rather than municipal level, we could take a lot of incremental bites out of the housing quagmire. Unfortunately most of those are politically infeasible.
    - projectramo 9y ago
      Yes, I think the largest property owner in the US is Blackstone, a private equity firm that bought the property at the downturn. From a strictly economic perspective they are helping increase demand when it was low and increase supply later on. They got rewarded for that.
rsync 9y ago
"To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount)." Homelessness is a mental health issue. Nobody is homeless because of foreign speculators. Yes, people are indeed incentivized to relocate to housing markets that Chinese people have never heard of like, for instance, Tacoma. If those people spent half their time working and saving (like their parents did) as they spent bitching about their basic human right to live in a walkable neighborhood with artisanal foodstuffs they would then have a nice down payment when the inevitable crash comes to the hot housing market in question.
- jdavis703 9y ago
  What about people who have lived in neighborhoods for decades, but were since evicted (i.e. their SRO was converted to luxury whatever)? Sure they may be near the economic fringe, but the poor will always be with us. How can we enable the poor to participate in the rich economy that cities create? Or should cities become only playgrounds for the upper middle class and wealthy?
- SandersAK 9y ago
  Mental health is one reason why people are homeless but it's not the only one. The reasons you're bringing up are strawmen at best. The people who are homeless or on the brink of homelessness are not complaining about artisanal food stuffs. In Oakland, a family of 4 has been living in a single family home for 15 years. This year, after new owners purchased the property, the rent went up 100% in one year. Needless to say, they are facing a housing crisis where they will be homeless. If you want to understand the severity of the situation, I suggest just literally googling "homelessness housing crisis bay area" and read all the both qualitative and quantitive reporting done on the issue. Here's a brief stat overview to refute your claim that it's a "mental issue" primarily: http://www.socialsolutions.com/blog/2016-homelessness-statistics/ http://www.socialsolutions.com/blog/2016-homelessness-statis...
  - rsync 9y ago
    "If you want to understand the severity of the situation, I suggest just literally googling "homelessness housing crisis bay area" and read all the both qualitative and quantitive reporting done on the issue." As a resident of the bay area I assure you that I read about this topic every single day - and consume a wide range of reporting and editorial.[1] "... the rent went up 100% in one year. Needless to say, they are facing a housing crisis where they will be homeless." That's not obvious at all. Certainly that's a very difficult situation and I suppose it is technically true that they will indeed be homeless as they physically move their bodies to their new home ... but there is nothing at all new or noteworthy about people making rational economic decisions about what they can and cannot afford - and voting with their feet for new locales. The only thing that's new (and this is something I encounter more and more frequently, especially in the bay area) is the idea that not only is housing a basic human right but housing in an arbitrary location without any consideration of ones actual economic status is a basic human right. This is, I am afraid, absurd. I am open-minded about the notion of housing as a human right. I completely reject the notion of housing wherever one most prefers[2] as a basic human right (or any kind of right whatsoever). [1] 48 Hills, for example. [2] Where you grew up, where you raised your kids, where the cool restaurants are, where the artists are at ... etc.
lend000 9y ago
Foreign investment is not the root cause of a growing population being drawn to city centers with limited land.
- bitxbitxbitcoin 9y ago
  Exactly - it is a symptom of the different regulations in the different city centers.
  - lend000 9y ago
    Eh.. I saw it more as a symptom of humans breeding. Human population has always been bound by some constraint, and now it seems that shelter is more of a limiting factor than food supply, in western countries at least. That, and a cultural shift toward wanting to live in cities, even though many of these financially struggling millennials would do just fine financially in more distant suburbs.
    - ryuker16 9y ago
      It's restrictive zoning laws. Home and property owners have a zeal for politics unmatched when it comes to keeping values up. The movement away from cities had a lot of reasons that have been solved(jobs came back, riots, red lining, less pollution, less crime) so I'd say the cultural shift was justified to return. Commuting sucks too.
      - lend000 9y ago
        High density zoning is only a short term solution, and it seems with current policy enactment speed, technology (and especially building regulations), demand will always outpace supply for the foreseeable future.
        ryuker16 9y ago
        Naw, take a look at nashville which was expanding insanely fast in population. Rent rose 25% in a low CoL city. They had a housing shortage for the past few years and removed a lot of restrictions. Recently they actually overbuilt despite a shortage of skilled construction workers. You can build hella fast when the demand is there and the government wants buildings fast. We're talking skyscrapers in 12-14 months.
ryandrake 9y ago
10% (of assessed value) yearly tax on homes not occupied by someone for more than 50% of the year.
tytytytytytytyt 9y ago
It's easy to jump on the bandwagon and blame foreign investors. But aren't locals voting as fast and as hard as they possibly can to prevent development of the new housing we need? And aren't locals making tons on real estate speculation, too, or are you saying there's some great secret that only the Chinese know here?
ryuker16 9y ago
This is bad but much more significant is restrictive zoning laws. I live in downtown chicago where rents are reasonable and skyscrapers for living at everywhere. Meanwhile, you gotta move heaven and earth to build high density housing in some cities like SF. Even suburbs will fight 4 story apartment buildings. It's not rocket science. Let the foreigners invest in building more of them. When the crash happens, the locals get to buy them back on the cheap. What shouldn't happen is foreigners investing in sitting stock as a bank to store funds....zoning laws are like NIMBY on steroids with a long history of racism and classicism. That's what really is what we should be angry about.
- zbobet2012 9y ago
  Chicago is also shrinking in population. Supply and demand and all that.
  - ryuker16 9y ago
    Most of that is the poorer side. Due to violence in poorer neighborhoods, less blue collar work, and ironically higher rents in some poorer "hip" neighborhoods. Many high rises under construction here....they aren't building them for tax breaks.
- brailsafe 9y ago
  Do you have a reference for "reasonable" rents in Chicago or can you break that down at all? I'm genuinely curious. Coming from Vancouver where rents compared to salaries are considered beyond insane, what I found on Chicago's craigslist seem to be comparable. That is, accounting for exchange rate but not salaries.
  - ryuker16 9y ago
    I meant compared to San Francisco and New York. Then again, canadian salaries are lower and exchange rates are a factor.
    - 9y ago
deleted 9y ago
[deleted]
raincom 9y ago
Very true. A friend in Seattle tells me that Seattle locals are buying second and third homes as investments, a new way of becoming rich through leverage.
jandrewrogers 9y ago
The population growth in Seattle each year exceeds the growth in housing supply required to house them, despite the level of new construction in Seattle. This has been the case for some time and will continue for the foreseeable future. There are not many cities that could absorb ~2% population growth year after year. Even absent any non-resident speculators, the demand is still going to significantly exceed supply such that the prices increase given that housing is not growing at the rate of population. Foreign speculators may or may not make it worse but they aren't the primary cause of price increases; simple supply and demand is sufficient to explain it.
maruhan2 9y ago
Korean housing prices are also heavily influenced by Chinese investors.
jraby3 9y ago
Disagree. It costs much more to build a house or apartment than it did 50 years ago. This is primarily because of changes in city requirement to make the houses safer. I recently had a house burn down in a neighborhood with numerous $150k houses. Cost to rebuild a similar structure was over $200k. I got three bids and every contractor told me the cost was much higher than nearby existing properties because legally, the house would need to be built with different materials and different building requirements.
- polskibus 9y ago
  Or maybe because local wages have also risen due to local housing price increase. The workers also need to pay their mortgages.
- deleted 9y ago
  [deleted]
- dv_dt 9y ago
  > I recently had a house burn down in a neighborhood with numerous $150k houses. Cost to rebuild a similar structure was over $200k My home insurance company made this very clear when I started a policy with them - they discussed the price of the house (e.g. in tax roll estimates of "land improvement") vs their estimated replacement cost. Even with new requirements though, no one talks about the productivity improvements in construction - from faster to put up materials, to the abundance of various tools .. is it really regulations or a form of cost disease...
coldtea 9y ago
>To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount). The US has traditionally put free markets above human rights. (In lip service, that is -- the US had plenty of protective taxes and tariffs early on).

notyourwork 9y ago

> To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount). This is also a national security issue; this speculation cannot happen forever. Our economy will very likely crash when this speculation is no longer profitable. This is my biggest concern with wanting to dip my families toes into their first home purchase. We lived in Seattle last few years and the market is stupid, we recently moved to Bay area and this market is even more silly. (I know we pick some great places for first time home buyer but careers and education take you where they take you, that's another discussion.)

beebmam 9y ago
Yep, your career really does take you where it takes you. I'm in the same boat. I've lived here for 5 years and have been saving, was getting pretty close to being able to afford a house, and the last year or so has seen such a huge increase in home prices and a decrease in availability that I've given up hope.
- mistermann 9y ago
  The funny thing is, if you grit your teeth and bought recently or even now, it's possible you could retire on the capital gains in <<< 10 years. Or you could be bankrupt. Either one seems equally possible to me.
  - sushisource 9y ago
    Well, only if you were willing to move to a much, much cheaper area to realize those gains.
    - mistermann 9y ago
      Not necessarily, if your house is going up $10k per month you could live on HELOCs. Easily possible in the last decade or so in Vancouver.

bspn 9y ago

Here's NZ's proposed (extreme) response to the foreign buyer problem: http://www.bbc.com/news/business-41745129 http://www.bbc.com/news/business-41745129

bpicolo 9y ago
Seems more sane than extreme. I think it's a pretty reasonable policy given real estate speculation trends in the last few years. It seems reasonable for countries should have strong policies for protecting domestic housing stock, whether those are outright bans or massive taxes.

xenihn 9y ago

>In Seattle, for example, many (newly) wealthy Chinese people are buying houses purely for investment purposes. Same thing in Los Angeles (the entire county) and Irvine.

khedoros1 9y ago
I own in OC. I remember when I bought, it felt like I was dodging between all-cash offers for a lot of places. It was difficult to find somewhere move in ready that was within my budget and didn't have an over-listing all-cash offer on it already (and this was years ago).

et-al 9y ago

The core issue is real estate as investment regardless of where it's coming from. Right now the most visible are overseas Chinese people with money buying property, but REITs have been picking up rental property for ages, and there are also PEREs (private equity real estate firms). If governments are to serve their people, then they should curtail this speculation. Of course in America, corporations are people.

kevin_thibedeau 9y ago
In English common law corporations are people, hence the name. They are a synthetic "body" for business purposes. This isn't a new concept created by Citizens United.
- jacques_chester 9y ago
  It's usually better to say that they have "legal personality". They're not people, but like people, or charities, incorporated associations etc, they have an attribute that gives them legal existence a court will recognise. What Citizens United established was that free speech applied to legal personality generally, not humans in particular. Folk forget that this includes organisations they like, as well as the many they don't. It's easy to dislike the situation (as I do), but trickier to explain how to define a way out of it.

seanmcdirmid 9y ago

We saw this before with Japan, it didn't end well. If you think the states property markets are crazy, well, the Chinese ones are crazier by an order of magnitude. It's no wonder that many wealthy Chinese see the states (or other countries) as a safer bet. The upside is that rents in china are still reasonable (so that 7 million yuan apartment is only renting for 10k RMB/month). However, the same was true with Japan, and when their asset bubble crashed, it took many foreign markets with it (taking about a decade to recover, heck, even California, especially California, suffered).

kqr2 9y ago
I think a similar thing would have happened in the US during the Great Recession of 2007, however, the US government was willing to back all of the banks who were holding underwater mortgages. Had the government not done this, the banks would have been forced to unload property at fire-sale prices. 10 years later in major metropolitan areas, property prices are even higher than they were in 2007. Most likely the Federal government would pursue another bailout during a housing "collapse".

nerfhammer 9y ago

Build sufficient housing and they won't see it as a sure-thing investment anymore. They're betting that local politics will never allow this to happen.

saosebastiao 9y ago
You're right, and they're right. It would take a monumental shift in politics for local governments to give up their ability to buy favor with local residents through land use code.

seltzered_ 9y ago

Are you sure that it's foreign buyers? While it has been true in the Vancouver market, I read an article recently mentioning otherwise for Seattle: http://www.sightline.org/2017/07/05/stop-blaming-foreign-home-buyers/ http://www.sightline.org/2017/07/05/stop-blaming-foreign-hom...

deleted 9y ago
[deleted]
linkregister 9y ago
This is an excellent article. It does an excellent job of analyzing the problem.

neilparikh 9y ago

I'm not sure why it matters if the buyer is foreign or American. You would get the same issue if an investor from Texas decided to buy 10 houses and live in 1. The key issue here is that there's housing that's unoccupied, even under lots of demand. The fix for that is to tax or ban unoccupied housing, not ban foreign housing.

deleted 9y ago
[deleted]
gozur88 9y ago
The fix is to stop printing so much money it's basically free to borrow. These people aren't buying houses with their own money - it's all OPM.
closeparen 9y ago
>if an investor from Texas decided to buy 10 houses and live in 1 An investor from Texas can simply open a Vanguard account. The theoretical mechanism for Chinese speculation is that real estate is the path of least regulatory resistance compared to stock markets, etc. under Chinese law.
- uiri 9y ago
  Nothing to do with regulatory resistance. Chinese culture generally views the stock market as gambling in a way that US culture does not. Real estate is a safe investment. It is also protected against seizure by the Chinese government.

akanet 9y ago

I sincerely doubt foreign purchases are the main driver of rent increase, and no study has ever demonstrated as much. The anti-foreigner mindset is extremely dangerous. Rising rents are almost entirely because of local restrictions on creating more housing. The beneficiaries of restricted supply are existing owners and landlords.

wan23 9y ago
It's not anti-foreigner, it's anti-speculation. It's easy to see that home purchase prices are well beyond what any reasonable family would want to pay, and yet the prices keep rising. The problem isn't that it's foreign money coming in, it's that there's so much of it.
- nerfhammer 9y ago
  Well it's either greedy, scheming tech workers or greedy, scheming Chinese speculators. Isn't there a pattern here? The problem simply must be caused by powerful, scheming outsiders. Despite lack of evidence, as this comment is a great example, defying the claim of lack of such by GP as if it simply hadn't been heard.
  - jacobolus 9y ago
    A lot of it is greedy, scheming local slumlords, to be honest. If we abolished Prop 13 statewide, did some minor up-zoning throughout the Bay Area (and had more mixed use zones), made new housing easier to construct (less drawn out process for people to block development, etc.), reduced parking requirements, worked on improving public transit, and taxed unlived-in buildings [or better, switched toward land-value taxes], did more planning at a regional rather than municipal level, we could take a lot of incremental bites out of the housing quagmire. Unfortunately most of those are politically infeasible.
  - projectramo 9y ago
    Yes, I think the largest property owner in the US is Blackstone, a private equity firm that bought the property at the downturn. From a strictly economic perspective they are helping increase demand when it was low and increase supply later on. They got rewarded for that.

rsync 9y ago

"To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount)." Homelessness is a mental health issue. Nobody is homeless because of foreign speculators. Yes, people are indeed incentivized to relocate to housing markets that Chinese people have never heard of like, for instance, Tacoma. If those people spent half their time working and saving (like their parents did) as they spent bitching about their basic human right to live in a walkable neighborhood with artisanal foodstuffs they would then have a nice down payment when the inevitable crash comes to the hot housing market in question.

jdavis703 9y ago
What about people who have lived in neighborhoods for decades, but were since evicted (i.e. their SRO was converted to luxury whatever)? Sure they may be near the economic fringe, but the poor will always be with us. How can we enable the poor to participate in the rich economy that cities create? Or should cities become only playgrounds for the upper middle class and wealthy?
SandersAK 9y ago
Mental health is one reason why people are homeless but it's not the only one. The reasons you're bringing up are strawmen at best. The people who are homeless or on the brink of homelessness are not complaining about artisanal food stuffs. In Oakland, a family of 4 has been living in a single family home for 15 years. This year, after new owners purchased the property, the rent went up 100% in one year. Needless to say, they are facing a housing crisis where they will be homeless. If you want to understand the severity of the situation, I suggest just literally googling "homelessness housing crisis bay area" and read all the both qualitative and quantitive reporting done on the issue. Here's a brief stat overview to refute your claim that it's a "mental issue" primarily: http://www.socialsolutions.com/blog/2016-homelessness-statistics/ http://www.socialsolutions.com/blog/2016-homelessness-statis...
- rsync 9y ago
  "If you want to understand the severity of the situation, I suggest just literally googling "homelessness housing crisis bay area" and read all the both qualitative and quantitive reporting done on the issue." As a resident of the bay area I assure you that I read about this topic every single day - and consume a wide range of reporting and editorial.[1] "... the rent went up 100% in one year. Needless to say, they are facing a housing crisis where they will be homeless." That's not obvious at all. Certainly that's a very difficult situation and I suppose it is technically true that they will indeed be homeless as they physically move their bodies to their new home ... but there is nothing at all new or noteworthy about people making rational economic decisions about what they can and cannot afford - and voting with their feet for new locales. The only thing that's new (and this is something I encounter more and more frequently, especially in the bay area) is the idea that not only is housing a basic human right but housing in an arbitrary location without any consideration of ones actual economic status is a basic human right. This is, I am afraid, absurd. I am open-minded about the notion of housing as a human right. I completely reject the notion of housing wherever one most prefers[2] as a basic human right (or any kind of right whatsoever). [1] 48 Hills, for example. [2] Where you grew up, where you raised your kids, where the cool restaurants are, where the artists are at ... etc.

lend000 9y ago

Foreign investment is not the root cause of a growing population being drawn to city centers with limited land.

bitxbitxbitcoin 9y ago
Exactly - it is a symptom of the different regulations in the different city centers.
- lend000 9y ago
  Eh.. I saw it more as a symptom of humans breeding. Human population has always been bound by some constraint, and now it seems that shelter is more of a limiting factor than food supply, in western countries at least. That, and a cultural shift toward wanting to live in cities, even though many of these financially struggling millennials would do just fine financially in more distant suburbs.
  - ryuker16 9y ago
    It's restrictive zoning laws. Home and property owners have a zeal for politics unmatched when it comes to keeping values up. The movement away from cities had a lot of reasons that have been solved(jobs came back, riots, red lining, less pollution, less crime) so I'd say the cultural shift was justified to return. Commuting sucks too.
    - lend000 9y ago
      High density zoning is only a short term solution, and it seems with current policy enactment speed, technology (and especially building regulations), demand will always outpace supply for the foreseeable future.
      - ryuker16 9y ago
        Naw, take a look at nashville which was expanding insanely fast in population. Rent rose 25% in a low CoL city. They had a housing shortage for the past few years and removed a lot of restrictions. Recently they actually overbuilt despite a shortage of skilled construction workers. You can build hella fast when the demand is there and the government wants buildings fast. We're talking skyscrapers in 12-14 months.

ryandrake 9y ago

10% (of assessed value) yearly tax on homes not occupied by someone for more than 50% of the year.

tytytytytytytyt 9y ago

It's easy to jump on the bandwagon and blame foreign investors. But aren't locals voting as fast and as hard as they possibly can to prevent development of the new housing we need? And aren't locals making tons on real estate speculation, too, or are you saying there's some great secret that only the Chinese know here?

ryuker16 9y ago

This is bad but much more significant is restrictive zoning laws. I live in downtown chicago where rents are reasonable and skyscrapers for living at everywhere. Meanwhile, you gotta move heaven and earth to build high density housing in some cities like SF. Even suburbs will fight 4 story apartment buildings. It's not rocket science. Let the foreigners invest in building more of them. When the crash happens, the locals get to buy them back on the cheap. What shouldn't happen is foreigners investing in sitting stock as a bank to store funds....zoning laws are like NIMBY on steroids with a long history of racism and classicism. That's what really is what we should be angry about.

zbobet2012 9y ago
Chicago is also shrinking in population. Supply and demand and all that.
- ryuker16 9y ago
  Most of that is the poorer side. Due to violence in poorer neighborhoods, less blue collar work, and ironically higher rents in some poorer "hip" neighborhoods. Many high rises under construction here....they aren't building them for tax breaks.
brailsafe 9y ago
Do you have a reference for "reasonable" rents in Chicago or can you break that down at all? I'm genuinely curious. Coming from Vancouver where rents compared to salaries are considered beyond insane, what I found on Chicago's craigslist seem to be comparable. That is, accounting for exchange rate but not salaries.
- ryuker16 9y ago
  I meant compared to San Francisco and New York. Then again, canadian salaries are lower and exchange rates are a factor.
  - 9y ago

deleted 9y ago

[deleted]

raincom 9y ago

Very true. A friend in Seattle tells me that Seattle locals are buying second and third homes as investments, a new way of becoming rich through leverage.

jandrewrogers 9y ago

The population growth in Seattle each year exceeds the growth in housing supply required to house them, despite the level of new construction in Seattle. This has been the case for some time and will continue for the foreseeable future. There are not many cities that could absorb ~2% population growth year after year. Even absent any non-resident speculators, the demand is still going to significantly exceed supply such that the prices increase given that housing is not growing at the rate of population. Foreign speculators may or may not make it worse but they aren't the primary cause of price increases; simple supply and demand is sufficient to explain it.

maruhan2 9y ago

Korean housing prices are also heavily influenced by Chinese investors.

jraby3 9y ago

Disagree. It costs much more to build a house or apartment than it did 50 years ago. This is primarily because of changes in city requirement to make the houses safer. I recently had a house burn down in a neighborhood with numerous $150k houses. Cost to rebuild a similar structure was over $200k. I got three bids and every contractor told me the cost was much higher than nearby existing properties because legally, the house would need to be built with different materials and different building requirements.

polskibus 9y ago
Or maybe because local wages have also risen due to local housing price increase. The workers also need to pay their mortgages.
deleted 9y ago
[deleted]
dv_dt 9y ago
> I recently had a house burn down in a neighborhood with numerous $150k houses. Cost to rebuild a similar structure was over $200k My home insurance company made this very clear when I started a policy with them - they discussed the price of the house (e.g. in tax roll estimates of "land improvement") vs their estimated replacement cost. Even with new requirements though, no one talks about the productivity improvements in construction - from faster to put up materials, to the abundance of various tools .. is it really regulations or a form of cost disease...

coldtea 9y ago

>To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount). The US has traditionally put free markets above human rights. (In lip service, that is -- the US had plenty of protective taxes and tariffs early on).