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Japan solves this problem by having home values that drop to just about nothing over time, such that everything outside of commercial property investment is una

Japan solves this problem by having home values that drop to just about nothing over time, such that everything outside of commercial property investment is unattractive to Global Capital. Zoning is a problem, but without additional stopgaps to prevent this kind of financialized speculation in the housing market, you can’t resolve the affordability crisis.

chrischen 8y ago
Part of home values dropping is also their culture of preferring new constructions over old buildings. But then again I think objectively, all things being equal, everyone prefers a new house, but Americans are more tolerant of old buildings.
- knuththetruth 8y ago
  New is culturally preferential, but the government also doesn’t enforce any kind of building standards for typical home construction (including earthquake resistance). You essentially have to buy or build new because there are zero guarantees any used housing is safe.
  - A2017U1 8y ago
    Japan has some of the strictest building standards for earthquake resistance in the world. Seismic design code: https://www.fujipress.jp/jdr/dr/dsstr000100030341/ https://www.fujipress.jp/jdr/dr/dsstr000100030341/
- A2017U1 8y ago
  All the real estate ads in Japan include the year it was built, have never seen that anywhere else, quite sure my landlord in Australia wouldn't know if I asked.
  - spacehome 8y ago
    Huh. In the US, year of construction is one of a very short list of numbers that characterizes a home for sale. It makes a big difference, too, as you can see various styles, floorplans, and uses of space fall into and out of fashion decade-to-decade. It would be quite unusual for a homeowner here not to be in tune with the year their home was built.
  - spiralx 8y ago
    You could look it up in the Land Registry in the UK if you wanted to, although it's often fairly easy to guess roughly when a house was built here from the style.
    - A2017U1 8y ago
      Fair call, I just rarely see it in my country and it's not used as a marketing tool. There's some very well built old houses, places are judged on merit.
- danieltillett 8y ago
  I don’t, but the reason why is Australian builders can no longer build high quality houses. The current new house here is so poorly built out of such low-quality and flimsy material that it will be lucky to last 40 years.
- gambiting 8y ago
  >> But then again I think objectively, all things being equal, everyone prefers a new house I live in the UK and absolutely disagree - I'd much much rather buy an early 20th century house than a brand new build, with its cardboard-thin walls and elevation falling off after few years. I can bet a 1930s house will keep standing for another 100 years, while I know several people who bought new houses 5-10 years and they all need major repairs(in addition to being stupidly small - brand new 4 bed house is usually so small that none of the "rooms" fit more than a double bed).
  - chrischen 8y ago
    You're probably comparing different things, but a properly built new house has 1) Radon mitigation built in 2) High quality insulation 3) Solar panels (if in California) 4) No lead pipes or lead paint 5) Ethernet wiring Of course any of the above could be achieved by a remodel, but then it wouldn't be an old house anymore.
tim333 8y ago
Wasn't always like that. Check out "Japan's Palace Grounds Once More Valuable than California" https://www.cbsnews.com/news/japans-palace-grounds-once-more-valuable-than-california/ https://www.cbsnews.com/news/japans-palace-grounds-once-more...
- knuththetruth 8y ago
  Yeah, bubble days were wild, but that’s also not your run of the mill real estate. If anything the bubble period should be an object lesson in what happens when you allow this kind of unchecked investment (ie it destroys your entire economy).
  - TangoTrotFox 8y ago
    More generally, I really wonder how our entire economic system, which is based on ever increasing levels of debt, is going to cope when the premise of infinite exponential growth comes to be shown to be impossible? What happens when there are trillions of dollars of interest bearing debt yet the gross economic expansion is no longer even keeping up with the interest? On the other hand I think there's a very good argument that space could open up sufficient development and opportunity that we could return to infinite exponential growth. If the 'new world' spurred the world economy for centuries, one can only imagine the potential of everything from asteroid utilization to colonization of entirely new planets and all of the discoveries and advances this will all bring.
    - adventured 8y ago
      > I really wonder how our entire economic system, which is based on ever increasing levels of debt Actually our entire economic system is built on increasing assets and income. A fractional share of which is stacked against debt and interest expense. Asset growth has outpaced debt growth, income growth has outpaced interest cost increases. If that weren't the case, the world would have imploded a long time ago given the debt increase over the last 20 years. China is a particularly potent example of this in action. Their debt accumulation has been very dramatic the last ten years. Despite that, there's no indication their vast income and asset expansion is unable to offset it. Their income expansion continues to exceed the additional interest cost by about a 2x to 3x margin. Or take the US. US Government interest expense was $458 billion in 2017. It was ~$350b commonly in the mid to late 1990s. The US economy is 2.5 times larger than it was in 1996, and the public debt is about three to four times larger; meanwhile interest costs have increased by about a quarter. US household wealth was $30 trillion in 1995/96. It's $100 trillion today. Wealth has increased by $70 trillion. Debt has gone from $6 trillion to $14 trillion. Net wealth has gone from $24 trillion, to $86 trillion. Wealth expansion has far outpaced debt expansion. In 1996, household debt was equal to about 20% of household assets; today it's 14%. US household debt service payments as a percentage of disposable income are the lowest they've been in four decades. The premise that either the US or global economy is built on unsustainable debt, is false.
twblalock 8y ago
The home values depreciate very quickly, but the land values are very high.

chrischen 8y ago

Part of home values dropping is also their culture of preferring new constructions over old buildings. But then again I think objectively, all things being equal, everyone prefers a new house, but Americans are more tolerant of old buildings.

knuththetruth 8y ago
New is culturally preferential, but the government also doesn’t enforce any kind of building standards for typical home construction (including earthquake resistance). You essentially have to buy or build new because there are zero guarantees any used housing is safe.
- A2017U1 8y ago
  Japan has some of the strictest building standards for earthquake resistance in the world. Seismic design code: https://www.fujipress.jp/jdr/dr/dsstr000100030341/ https://www.fujipress.jp/jdr/dr/dsstr000100030341/
A2017U1 8y ago
All the real estate ads in Japan include the year it was built, have never seen that anywhere else, quite sure my landlord in Australia wouldn't know if I asked.
- spacehome 8y ago
  Huh. In the US, year of construction is one of a very short list of numbers that characterizes a home for sale. It makes a big difference, too, as you can see various styles, floorplans, and uses of space fall into and out of fashion decade-to-decade. It would be quite unusual for a homeowner here not to be in tune with the year their home was built.
- spiralx 8y ago
  You could look it up in the Land Registry in the UK if you wanted to, although it's often fairly easy to guess roughly when a house was built here from the style.
  - A2017U1 8y ago
    Fair call, I just rarely see it in my country and it's not used as a marketing tool. There's some very well built old houses, places are judged on merit.
danieltillett 8y ago
I don’t, but the reason why is Australian builders can no longer build high quality houses. The current new house here is so poorly built out of such low-quality and flimsy material that it will be lucky to last 40 years.
gambiting 8y ago
>> But then again I think objectively, all things being equal, everyone prefers a new house I live in the UK and absolutely disagree - I'd much much rather buy an early 20th century house than a brand new build, with its cardboard-thin walls and elevation falling off after few years. I can bet a 1930s house will keep standing for another 100 years, while I know several people who bought new houses 5-10 years and they all need major repairs(in addition to being stupidly small - brand new 4 bed house is usually so small that none of the "rooms" fit more than a double bed).
- chrischen 8y ago
  You're probably comparing different things, but a properly built new house has 1) Radon mitigation built in 2) High quality insulation 3) Solar panels (if in California) 4) No lead pipes or lead paint 5) Ethernet wiring Of course any of the above could be achieved by a remodel, but then it wouldn't be an old house anymore.

tim333 8y ago

Wasn't always like that. Check out "Japan's Palace Grounds Once More Valuable than California" https://www.cbsnews.com/news/japans-palace-grounds-once-more-valuable-than-california/ https://www.cbsnews.com/news/japans-palace-grounds-once-more...

knuththetruth 8y ago
Yeah, bubble days were wild, but that’s also not your run of the mill real estate. If anything the bubble period should be an object lesson in what happens when you allow this kind of unchecked investment (ie it destroys your entire economy).
- TangoTrotFox 8y ago
  More generally, I really wonder how our entire economic system, which is based on ever increasing levels of debt, is going to cope when the premise of infinite exponential growth comes to be shown to be impossible? What happens when there are trillions of dollars of interest bearing debt yet the gross economic expansion is no longer even keeping up with the interest? On the other hand I think there's a very good argument that space could open up sufficient development and opportunity that we could return to infinite exponential growth. If the 'new world' spurred the world economy for centuries, one can only imagine the potential of everything from asteroid utilization to colonization of entirely new planets and all of the discoveries and advances this will all bring.
  - adventured 8y ago
    > I really wonder how our entire economic system, which is based on ever increasing levels of debt Actually our entire economic system is built on increasing assets and income. A fractional share of which is stacked against debt and interest expense. Asset growth has outpaced debt growth, income growth has outpaced interest cost increases. If that weren't the case, the world would have imploded a long time ago given the debt increase over the last 20 years. China is a particularly potent example of this in action. Their debt accumulation has been very dramatic the last ten years. Despite that, there's no indication their vast income and asset expansion is unable to offset it. Their income expansion continues to exceed the additional interest cost by about a 2x to 3x margin. Or take the US. US Government interest expense was $458 billion in 2017. It was ~$350b commonly in the mid to late 1990s. The US economy is 2.5 times larger than it was in 1996, and the public debt is about three to four times larger; meanwhile interest costs have increased by about a quarter. US household wealth was $30 trillion in 1995/96. It's $100 trillion today. Wealth has increased by $70 trillion. Debt has gone from $6 trillion to $14 trillion. Net wealth has gone from $24 trillion, to $86 trillion. Wealth expansion has far outpaced debt expansion. In 1996, household debt was equal to about 20% of household assets; today it's 14%. US household debt service payments as a percentage of disposable income are the lowest they've been in four decades. The premise that either the US or global economy is built on unsustainable debt, is false.

twblalock 8y ago

The home values depreciate very quickly, but the land values are very high.