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While I have friends who have had to leave the Bay Area because of high rents, I also have (non tech, multi-generational local) friends who have the vast majori

While I have friends who have had to leave the Bay Area because of high rents, I also have (non tech, multi-generational local) friends who have the vast majority of their wealth tied up in their (or their parents) house here. I don’t love how some members of the YC community (often independently wealthy tech types) seem to suggest that this latter group need to sacrifice themselves by supporting policies that would effectively undermine the only thing that is allowing them to stay in the Bay Area. I realize that the YIMBY crowd fervently believe that eventually, at some point, their policies will benefit both groups, but in the meanwhile the house prices here are stagnating and predicted to fall next 12 months which is already causing anxiety. Simply dismissing this group as NIMBYs who don’t want to look at high rises so badly misses the point that I’m not surprised they are failing in their mission

richk449 7y ago
>I also have (non tech, multi-generational local) friends who have the vast majority of their wealth tied up in their (or their parents) house here. ... I don’t love how some members of the YC community (often independently wealthy tech types) seem to suggest that this latter group need to sacrifice themselves by supporting policies that would effectively undermine the only thing that is allowing them to stay in the Bay Area. If they already own a house in the bay area, why would falling housing prices affect their ability to stay here?
- einarvollset 7y ago
  Because few people own their house outright, and the equity in their house is their only form of financial cushion or retirement savings. In many cases, the kind of house price drop agitated for would bankrupt and evict them, with no way of buying into the market again despite the average lower prices.
  - richk449 7y ago
    Those scenarios seem few and far between. If it is a family home that has been owned for at least a decade in the bay area, then it has increased in value dramatically since it was bought, and no matter what kind of mortgage they have, they will have plenty of equity. If it was bought recently, then they probably don't have HELOCs or other instruments that would put them at risk, so the market value should be irrelevant to their financial situation. I can't see how a market price decrease of a house that one owns, or has a mortgage on, could bankrupt someone or cause them to be evicted. The worst thing that could happen is for they homeowner to go "underwater", but even then, as long as they continue to pay their monthly mortgage payments, they get to keep their house.
    - einarvollset 7y ago
      Keeping in mind that these are not tech types with the associated salaries, you can’t see how a market price decrease could bankrupt or evict someone? Mkay
      - richk449 7y ago
        No, I don’t see it. But I’m open to the idea that I am missing something. Maybe they have an ARM mortgage, and are planning to refinance just before the adjustable period begins, and are worried they won’t be able to get new financing if the home value is significantly lower than the remaining principle? That would be easily solved by refinancing now into a fixed mortgage, but maybe they can’t afford the increased monthly payment that would cause? That’s the only scenario I can think of, and it seems unlikely to affect many Bay Area homeowners, given the incredible rise in prices recently. If you understand how a market price decrease would cause a homeowner to be evicted, please explain it.
        einarvollset 7y ago
        I am actually in favor of building more housing. But I think that doing so will (on top of prices already being projected to fall) put further downward pressure on house prices. To think that this is a rosy story for everyone with no losers is a fairy tale. I believe that the already squeezed, non-tech, middle class of the Bay Area will suffer at the expense of new, younger tech workforce (and incidentally play into the hand of the actually wealthy tech leaders who are some of the biggest proponents). If you choose not believe that, then please provide a historical example of where deflationary pressure on house prices have been a boon for the existing working/middle class that own houses anywhere. I realize that this is not a popular opinion among the HN crowd, which obviously skews young and tech, but it certainly is the opinion/anxiety that I hear expressed on the ground in the Bay Area among non-tech families. Are they delusional and should simply welcome lower house prices? Are their wealth and security something that must be sacrificed for the greater good? Maybe. But I am very suspicious of some of the tech leader pushing this. It’s obviously great for them if they can pay their employees less because rent is lower.
ak217 7y ago
I don't think anybody is missing the point. California property owners have voted in a system of laws to hijack the development regulations and tax code to enrich themselves at the expense of everybody else. The question is what will happen as more and more people realize just how inequitable the system is.
- einarvollset 7y ago
  That’s one way to look at it sure. Would you be in favor of bailing out those that lost their house when prices were falling in ‘08-‘10?

richk449 7y ago

>I also have (non tech, multi-generational local) friends who have the vast majority of their wealth tied up in their (or their parents) house here. ... I don’t love how some members of the YC community (often independently wealthy tech types) seem to suggest that this latter group need to sacrifice themselves by supporting policies that would effectively undermine the only thing that is allowing them to stay in the Bay Area. If they already own a house in the bay area, why would falling housing prices affect their ability to stay here?

einarvollset 7y ago
Because few people own their house outright, and the equity in their house is their only form of financial cushion or retirement savings. In many cases, the kind of house price drop agitated for would bankrupt and evict them, with no way of buying into the market again despite the average lower prices.
- richk449 7y ago
  Those scenarios seem few and far between. If it is a family home that has been owned for at least a decade in the bay area, then it has increased in value dramatically since it was bought, and no matter what kind of mortgage they have, they will have plenty of equity. If it was bought recently, then they probably don't have HELOCs or other instruments that would put them at risk, so the market value should be irrelevant to their financial situation. I can't see how a market price decrease of a house that one owns, or has a mortgage on, could bankrupt someone or cause them to be evicted. The worst thing that could happen is for they homeowner to go "underwater", but even then, as long as they continue to pay their monthly mortgage payments, they get to keep their house.
  - einarvollset 7y ago
    Keeping in mind that these are not tech types with the associated salaries, you can’t see how a market price decrease could bankrupt or evict someone? Mkay
    - richk449 7y ago
      No, I don’t see it. But I’m open to the idea that I am missing something. Maybe they have an ARM mortgage, and are planning to refinance just before the adjustable period begins, and are worried they won’t be able to get new financing if the home value is significantly lower than the remaining principle? That would be easily solved by refinancing now into a fixed mortgage, but maybe they can’t afford the increased monthly payment that would cause? That’s the only scenario I can think of, and it seems unlikely to affect many Bay Area homeowners, given the incredible rise in prices recently. If you understand how a market price decrease would cause a homeowner to be evicted, please explain it.
      - einarvollset 7y ago
        I am actually in favor of building more housing. But I think that doing so will (on top of prices already being projected to fall) put further downward pressure on house prices. To think that this is a rosy story for everyone with no losers is a fairy tale. I believe that the already squeezed, non-tech, middle class of the Bay Area will suffer at the expense of new, younger tech workforce (and incidentally play into the hand of the actually wealthy tech leaders who are some of the biggest proponents). If you choose not believe that, then please provide a historical example of where deflationary pressure on house prices have been a boon for the existing working/middle class that own houses anywhere. I realize that this is not a popular opinion among the HN crowd, which obviously skews young and tech, but it certainly is the opinion/anxiety that I hear expressed on the ground in the Bay Area among non-tech families. Are they delusional and should simply welcome lower house prices? Are their wealth and security something that must be sacrificed for the greater good? Maybe. But I am very suspicious of some of the tech leader pushing this. It’s obviously great for them if they can pay their employees less because rent is lower.

ak217 7y ago

I don't think anybody is missing the point. California property owners have voted in a system of laws to hijack the development regulations and tax code to enrich themselves at the expense of everybody else. The question is what will happen as more and more people realize just how inequitable the system is.

einarvollset 7y ago
That’s one way to look at it sure. Would you be in favor of bailing out those that lost their house when prices were falling in ‘08-‘10?