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Housing Costs Reduce the Return to Education
- mabynogy 8y agoThe problem isn't housing. The problem is the realestate market. There is no competition because the merchandises don't move. Prices goes up to infinite. https://en.wikipedia.org/wiki/Maurice_Allais https://en.wikipedia.org/wiki/Maurice_Allais
- zip1234 8y agoPerhaps the headline is a bit sensationalist? Housing does appear to be a problem in the bay area though.
- dbspin 8y agoThis 'article' adds little to the debate, merely restating the reductive idea that constraints on supply (rather than a host of factors from massive foreign investment, to wage stagnancy) is the sole explanation for the US housing crisis. It's unworthy of hacker news frankly.
- vinceguidry 8y agoOwning property is an extremely democratic pathway to financial independence. And it's only gotten more and more democratic as the financial world evolves. Yes it sucks to spend the first 5 or so years of your years in an unaffordable city getting established in an industry. But it's not the worst lot in the world. You can meet your spouse there and then start a family out where it's cheap. Won't be long before everyone's working from home. Not a bad life.
- k__ 8y agoWhy? To me it seems like the exact opposite of democracy. Wouldn't it be more democratic to let the state own it so every citizen can have a vote over this rather limited resource?
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- AzzieElbab 8y agoThis seems opposite to my understanding of democracy. Also, in my experience, state distributed housing lifted misery and corruption to some astounding levels
- k__ 8y agoAnd now we have cities that get too expensive for the people that were born there...
- dingo_bat 8y agoSo? What is the argument exactly?
- k__ 8y agoCountries have very limited space and growing populations. Does it really make sense to give the biggest chunks to people with the most money?
- ekianjo 8y agoits called gentrification. Nothing new.
- anonuser123456 8y agoWhen the value proposition no longer makes sense; move?
- k__ 8y agoThe question is, should "the value proposition", in terms of finances, be the criteria? Should the people who are rich be the only ones who can decide where to live?
- deathhand 8y agoRent seeking behavior creates greater economic inequality and all the host of problems that come with it. The government should curtail these behaviors in laws and taxes unless we want another occupy movement or worse.
- majos 8y ago> unless we want another occupy movement or worse It seems like the current administration would be just fine with another Occupy movement. I mean, were they even a real problem for Obama, who had to at least make gestures of support in their direction? Unless Occupy II is spearheaded by Trump supporters, which looks...unlikely.
- jadedhacker 8y agoYes, the crises of capitalism are mounting. Attn capitalist masters, slow your roll or my kind will multiply and depose you. We stand for the many, not the few. The fall of capitalism will eliminate poverty and restore civilization to a non-terminal trajectory by averting nuclear war and environmental catastrophe by removing our imperial masters from power in our fake democracy. :) Fwiw, Occupy fizzled so no one in power cares if another springs up. The next movement won't be toothless.
- ixacto 8y agoYes housing is not in accorandce with the construction costs. Essentially you have inflated bureaucracy and artificial supply constraints & zoning (NIMBY) trying to keep the housing prices up. Houses are just fine in Boise, ID or Albany, NY but so much cheaper than the coasts. This is really frustrating, and I don't see a politicly workable solution. So spend 50% on rent or move to Idaho... None of this is even considering that we may be able to substantially lower construction costs with prefabricated/3d printed homes/economies of scale.
- amorphid 8y agoIt'll go up in Idaho, too, when supply dries up. Won't it? "Move to Boise. There aren't too many people yet!"
- AmVess 8y agoBoise is the fastest growing city in the US, with attendant increase in housing cost. Prices aren't completely crazy yet, but my house is worth 65% more than what I paid for it, and is increasing by the year at too large of a rate. This was a good place to move to, now not so much.
- thrav 8y agoI had a feeling it was just a matter of time before Boise set a course to become the next Austin. One visit 5-6 years ago for a few days to interview at a tech company, and I thought, “Huh, Boise is pretty damn cool.”
- SamReidHughes 8y agoIn winter, you'll think, "Boise is pretty damn cold."
- AmVess 8y agoWith the exception of last year, my heater only runs 3 months a year, and not very often at that.
- AzzieElbab 8y agoI wouldn't know how to begin building an argument against this. Constantly rising housing costs is a pure wealth transfer which also doubles as fake saving mechanism in case of buying
- JaceLightning 8y agoTime to ban immigration. " Together immigrants and their U.S. born children account for roughly 75 percent of annual population increase in the U.S. In absolute terms, that’s an additional 2.25 million people each year. " https://www.fairus.org/issue/population-environment/population-growth https://www.fairus.org/issue/population-environment/populati...
- dingo_bat 8y agoImmigration needs to be based on merit of the immigrant and need of the country, not as a form of charity. It's hard to believe that USA needs 2.25 million people extra every year. I wonder why the law in this regard cannot be simplified. You are allowed to immigrate to the US if: - you will earn more than $100k. - you have a STEM MS/PhD from an institute of repute. - you clear a set of security checks. That should take care of most of the problems related to immigration.
- jadedhacker 8y agoFreedom of movement is a human right full stop.
- ekianjo 8y agoOh yeah? Are you ready to welcome 100 millions people to come in then? Good luck keeping democracy and whatever institutions you have when you become a minority yourself. Ask american native indians how that worked well for them.
- jadedhacker 8y ago1) Practically speaking, that wouldn't happen. 2) Ask yourself how ethnocentrism and nationalism led to that genocidal outcome. Could we have instead invited the native americans to work together in a democratic system? Imagine the possibilities. 3) If you're the minority in the world, what justifies you keeping others down? 4) Why are Central and South Americans leaving their homes? Investigate the brutal CIA coups, military invasions, arms dealing, and drug smuggling the united states has inflicted on this hemisphere since before the Monroe Doctrine. If we stopped destroying whole societies, we might not have to clean up our own messes. EDIT: Also, our institutions have been shown by recent history to be a complete farce. Maybe new people would rebuild them better without the taint of authoritarianism, hierarchy, and corruption.
- jpmattia 8y agoThe article neglects to mention: We are coming off of the lowest interest rate environment in around 400 years. As interest rates normalize, many interest-rate dependent markets are in for normalization as well.
- 3pt14159 8y agoI've been saying this for years. Keynesian economics is largely correct, but underestimated asset bubbles from irrational consumers. We either need high land taxes with a redistributive basic income or we need to do away with infinite ownership at time of sale.
- conanbatt 8y agoFirst, I would strongly advice against putting a policy due to an effect that there is no consensus on its causes. Is housing expensive because of low interest rates, because of QE, because of the advance of NIMBYSM? etc Second, taxes are much easier to add than to remove: a tax thought and applied with mechanism will outlive its purpose, so if there is a downturn in house prices the tax will become a burden. Places like california also dont even charge the proper property taxes. Its most likely that increasing tax pressure in a state like CA will be increasing income taxes, which end up maybe hurting landlords by harming their prey.
- EZ-E 8y agoMost people need to live in a handful of big cities to find a decent paying job. Companies also stay there because they want to have access to a large talent pool. Meanwhile there is a ton of space un rural areas where in majority, only older people are left. What would be a good solution? Massive construction? Incentives to move companies in more rural areas? I for one would love to have a high paying tech job in rural areas in my country, I dislike crowds but there are no companies there, all young people growing up here just migrate in drove to cities.
- nerfhammer 8y ago> What would be a good solution? Stop strangling cities by artificially limiting the housing supply there. Cities have always been the fundamental driver of human civilization.
- acomjean 8y agoWell a great transit system would really increase living options for those who need to work in cities. In Boston we're choking in part because its very difficult to get around, thus driving prices up significantly anywhere the commute is half way decent.
- imtringued 8y agoThere are three solutions: Build more housing to increase supply. Build less commercial real estate to curb demand. Build transit infrastructure so people can commute from somewhere else.
- perilunar 8y agoTo be clear, it's not house prices that are the problem—it's land prices. The problem and its solution were identified by Henry George in his book Progress and Poverty (1879). Seriously, look him up. It's a shame that his work is not better known. https://en.wikipedia.org/wiki/Progress_and_Poverty https://en.wikipedia.org/wiki/Progress_and_Poverty
- baud147258 8y agoBut the land price will dictates the price of the house built on the land, no?
- IshKebab 8y agoYou can't usually buy just a house - you buy the land too (or at least a lease for the land).
- nerdponx 8y agoIs it land price, or land scarcity in desirable locations? There's only so much land in the New York metro area. There's plenty of land in the Adirondacks.
- nwah1 8y agoTrue. And the constantly varying price of land in response to the desirability of the location means that land has this inexorable tendency to push down real wages regardless of almost any kind of technological, social, or political artifices meant to raise wages. Having a car, when it was uncommon, made it possible to engage in a bit of "geo-arbitrage" but as soon as that became common, the ability to commute was fully factored into a location. When having a dual income household was uncommon, that could get you ahead. When that became common, it was factored into land prices, and having a dual income became necessary just to not fall behind. All technological and social improvements follow this same pattern, and it is why the naive futurist conception of a world without work is never going to happen as long as our land system remains unchanged. That is precisely the paradox of Progress and Poverty that Henry George was explaining.