5 ms·

Sounds like a very common story of people living in SF, NY, LA, Seattle, Portland etc. unless they're very successful, even by the standards of that city. I hea

Sounds like a very common story of people living in SF, NY, LA, Seattle, Portland etc. unless they're very successful, even by the standards of that city. I hear the same can be said of Paris, London, Berlin, Moscow, Tokyo, Hong Kong etc. Shoot, having a place all to yourself is one heck of a luxury in those cities. Plenty of people there are having to skip nice things if they want to live in a place like that. All while paying off student loans, while their careers are still in the early stages.

jacobolus 8y ago
One reason that property values have gone up in these places is that property in world cities is now often used as an investment vehicle for foreigners who made fortunes in politically unstable places, and want to park their money somewhere safe, or at least diversified. This kind of investment is problematic even when the money’s source is legitimate. Having housing owned by absentee landlords who live halfway around the world is mostly negative for a city’s residents (though might benefit some local property owners whose property values are thereby inflated). Remote owners for the most part don’t care about maintaining their property, improving the local neighborhood or city, forming relationships with tenants, etc., and sometimes even leave units unoccupied for extended periods of time, taking housing stock off the market. I hope governments figure out some way to impose substantial additional taxes on non-owner-occupied housing, especially when it gets to large scale, or when units are kept unoccupied. The purpose of housing is to provide a place for people to live, not to build a fortune for a few capitalists, especially ones who are not local and are therefore largely unaccountable for bad behavior.
- ggm 8y ago
  One reason that property values have gone up in these places is that property in world cities is now often used as an investment vehicle for foreigners who made fortunes in politically unstable places, and want to park their money somewhere safe, or at least diversified. Often those fortunes were embezzled from public coffers or built on criminal enterprises, and real estate is a magnet for money laundering. But this kind of investment is problematic even when the money’s source is legitimate. Sure, if you want to talk about Colombian narco-dollars, or Russian keptocracy. China has a huge middle class, who worked all their life and had mandated government savings, with a pension for women at age 55. Please, do not write down all foreign investment in property to stolen money: Chinese purchasors in the west of small to medium size flats, and houses are buying for three reasons 1) the cost of property in Beijing is too high 2) their children are doing masters or phd programmes in the economy and its sensible to invest and save the kid rental 3) they want an exit strategy for their life savings if things go bad in the home country They are not kleptocrats. This is not stolen money. This is 30 or 40 years of savings, coupled to insane property bubbles. [Edit] I know some of them. I talk to them about this. I am not reporting from things I read, this is what I know from my neighbours in my apartment complex.
  - jacobolus 8y ago
    By no means is all (or even most) foreign investment stolen money (though there is a lot of corrupt money sloshing around, including a lot from China). However, even just “middle class” millionaire foreign investors parking money in international real estate is highly problematic for the places where the houses are. As an example, my parents live in a quiet suburb of Los Angeles, and recently a few of the neighboring houses were bought by foreign investors. Maintenance has all but stopped. One house was rented long-term to a group of college students who used it as a party house. Tenants move in and out of those houses within a year or two instead of staying long term. Any communication goes through a scummy property management company. If a critical mass of houses get like that, the neighborhood becomes a much different place. Everything becomes transactional and low-trust. The only way to get stuff fixed is by filing formal complaints or threatening legal action. Minor problems just pile up because it’s not worth the trouble. People stop caring about making things pleasant, or even making them work. Remote owners and management companies are just there to make a buck, and tenants are just temporarily stopping through for a place to sleep while they work out something more permanent elsewhere.
    - BadassFractal 8y ago
      I've, anecdotally, personally seen a very similar pattern with San Francisco office real estate as well.
  - icantdrive55 8y ago
    I don't think Chinese money is stolen. Russian money it's a toss up? I just don't like the fact that wealthy foreigners can buy our homes with a phone call, or email. I just don't get it. These are people whom are not citizens, and we let them buy our homes. And of course, we can't buy buy in their countries, which such ease, or at all.
- ryandrake 8y ago
  Something is very wrong when both home vacancy rates and housing prices are high. Vacant investment homes and vacation homes shouldn’t be a thing while a first home is financially out of reach for most people.
  - tryptophan 8y ago
    It's because in most of the world, housing and RE is an investment first, and housing second. The negative effects of this are masked when you have abundant supply, like in random suburbs in the midwest, but shows its ugly side when supply is constrained and the investment aspect far outweighs the utility people gain from using it as a house.
- tryptophan 8y ago
  Ah yes, the classic (incorrect) xenophobia response; "It's those foreigners ruining our country". Lets all blame the symptoms for causing the disease! The real (and only) reason is a mismatch of supply and demand. Mostly supply though. Localities pass very strict real estate policy which prevents construction, which lowers supply, and so naturally prices go up. Tokyo japan somehow is able to house 11 million people, at reasonable costs. What do they do differently? Allow construction and have intelligent zoning. If cities like SF/NY/etc were allowed to build, prices would come down, and those foreign investors would be revealed for the nice people that they are - ones paying property taxes to a country they don't live in.
  - jacobolus 8y ago
    My wife is Chinese. My parents split their time between the USA and Mexico (where my father is a university professor). I have friends from all over the world and American friends who have moved all over the world, and I love traveling and interacting with foreign tourists. I’m as big a fan of international migration as you will find anywhere. The problem is not that foreigners are bad people (I’m sure most real-estate investors are “nice”), the problem is housing used as an investment vehicle. With the increasing ability for people to move money around the world, more housing than ever in world cities is becoming a magnet for remote investment. Foreign investors exacerbate problems which already existed. In particular, large-scale and absentee landlords (including those living in the same country) cause more problems than small-scale local landowners, because they don’t have the time or resources to form local relationships, tend to care less about the property or the local environment, and are not as accountable when they act badly. This is just as much true when it’s Americans buying large amounts of property in whatever other country, or buying property in other cities within the same country. I agree that a significant (but ideally gradual) drop in housing prices based on changing zoning laws and increasing housing supply (and ideally changing the tax structure, starting with e.g. repealing CA Prop. 13) would solve some of these problems. (Among other things, they would make housing an unattractive remote investment.)
    - briandear 8y ago
      Absentee landlords don’t mean that properties are neglected. If they use a property manager, they can be just as well-run as anything else. Conversely there are plenty of “local” landlords that don’t do a good job. The location of the landlord is irrelevant, it’s the property management that matters.
- deleted 8y ago
  [deleted]

jacobolus 8y ago

One reason that property values have gone up in these places is that property in world cities is now often used as an investment vehicle for foreigners who made fortunes in politically unstable places, and want to park their money somewhere safe, or at least diversified. This kind of investment is problematic even when the money’s source is legitimate. Having housing owned by absentee landlords who live halfway around the world is mostly negative for a city’s residents (though might benefit some local property owners whose property values are thereby inflated). Remote owners for the most part don’t care about maintaining their property, improving the local neighborhood or city, forming relationships with tenants, etc., and sometimes even leave units unoccupied for extended periods of time, taking housing stock off the market. I hope governments figure out some way to impose substantial additional taxes on non-owner-occupied housing, especially when it gets to large scale, or when units are kept unoccupied. The purpose of housing is to provide a place for people to live, not to build a fortune for a few capitalists, especially ones who are not local and are therefore largely unaccountable for bad behavior.

ggm 8y ago
One reason that property values have gone up in these places is that property in world cities is now often used as an investment vehicle for foreigners who made fortunes in politically unstable places, and want to park their money somewhere safe, or at least diversified. Often those fortunes were embezzled from public coffers or built on criminal enterprises, and real estate is a magnet for money laundering. But this kind of investment is problematic even when the money’s source is legitimate. Sure, if you want to talk about Colombian narco-dollars, or Russian keptocracy. China has a huge middle class, who worked all their life and had mandated government savings, with a pension for women at age 55. Please, do not write down all foreign investment in property to stolen money: Chinese purchasors in the west of small to medium size flats, and houses are buying for three reasons 1) the cost of property in Beijing is too high 2) their children are doing masters or phd programmes in the economy and its sensible to invest and save the kid rental 3) they want an exit strategy for their life savings if things go bad in the home country They are not kleptocrats. This is not stolen money. This is 30 or 40 years of savings, coupled to insane property bubbles. [Edit] I know some of them. I talk to them about this. I am not reporting from things I read, this is what I know from my neighbours in my apartment complex.
- jacobolus 8y ago
  By no means is all (or even most) foreign investment stolen money (though there is a lot of corrupt money sloshing around, including a lot from China). However, even just “middle class” millionaire foreign investors parking money in international real estate is highly problematic for the places where the houses are. As an example, my parents live in a quiet suburb of Los Angeles, and recently a few of the neighboring houses were bought by foreign investors. Maintenance has all but stopped. One house was rented long-term to a group of college students who used it as a party house. Tenants move in and out of those houses within a year or two instead of staying long term. Any communication goes through a scummy property management company. If a critical mass of houses get like that, the neighborhood becomes a much different place. Everything becomes transactional and low-trust. The only way to get stuff fixed is by filing formal complaints or threatening legal action. Minor problems just pile up because it’s not worth the trouble. People stop caring about making things pleasant, or even making them work. Remote owners and management companies are just there to make a buck, and tenants are just temporarily stopping through for a place to sleep while they work out something more permanent elsewhere.
  - BadassFractal 8y ago
    I've, anecdotally, personally seen a very similar pattern with San Francisco office real estate as well.
- icantdrive55 8y ago
  I don't think Chinese money is stolen. Russian money it's a toss up? I just don't like the fact that wealthy foreigners can buy our homes with a phone call, or email. I just don't get it. These are people whom are not citizens, and we let them buy our homes. And of course, we can't buy buy in their countries, which such ease, or at all.
ryandrake 8y ago
Something is very wrong when both home vacancy rates and housing prices are high. Vacant investment homes and vacation homes shouldn’t be a thing while a first home is financially out of reach for most people.
- tryptophan 8y ago
  It's because in most of the world, housing and RE is an investment first, and housing second. The negative effects of this are masked when you have abundant supply, like in random suburbs in the midwest, but shows its ugly side when supply is constrained and the investment aspect far outweighs the utility people gain from using it as a house.
tryptophan 8y ago
Ah yes, the classic (incorrect) xenophobia response; "It's those foreigners ruining our country". Lets all blame the symptoms for causing the disease! The real (and only) reason is a mismatch of supply and demand. Mostly supply though. Localities pass very strict real estate policy which prevents construction, which lowers supply, and so naturally prices go up. Tokyo japan somehow is able to house 11 million people, at reasonable costs. What do they do differently? Allow construction and have intelligent zoning. If cities like SF/NY/etc were allowed to build, prices would come down, and those foreign investors would be revealed for the nice people that they are - ones paying property taxes to a country they don't live in.
- jacobolus 8y ago
  My wife is Chinese. My parents split their time between the USA and Mexico (where my father is a university professor). I have friends from all over the world and American friends who have moved all over the world, and I love traveling and interacting with foreign tourists. I’m as big a fan of international migration as you will find anywhere. The problem is not that foreigners are bad people (I’m sure most real-estate investors are “nice”), the problem is housing used as an investment vehicle. With the increasing ability for people to move money around the world, more housing than ever in world cities is becoming a magnet for remote investment. Foreign investors exacerbate problems which already existed. In particular, large-scale and absentee landlords (including those living in the same country) cause more problems than small-scale local landowners, because they don’t have the time or resources to form local relationships, tend to care less about the property or the local environment, and are not as accountable when they act badly. This is just as much true when it’s Americans buying large amounts of property in whatever other country, or buying property in other cities within the same country. I agree that a significant (but ideally gradual) drop in housing prices based on changing zoning laws and increasing housing supply (and ideally changing the tax structure, starting with e.g. repealing CA Prop. 13) would solve some of these problems. (Among other things, they would make housing an unattractive remote investment.)
  - briandear 8y ago
    Absentee landlords don’t mean that properties are neglected. If they use a property manager, they can be just as well-run as anything else. Conversely there are plenty of “local” landlords that don’t do a good job. The location of the landlord is irrelevant, it’s the property management that matters.
deleted 8y ago
[deleted]