4 ms·

In the case of housing the resource supply is constrained artifically by the cartel formed by local homeowners.

onion2k 6y ago
It's definitely true that there aren't enough houses being built to keep up with the way people want to live, and that the houses that are built are the wrong sort of houses. I'm in the process of buying my first at the moment and it's immensely difficult to find something suitable and affordable (UK dev wages outside of London don't compare well with the US...). I'm not sure if that's entirely down to homeowners though, or construction companies only building massively profitable mansions instead of small first-time buyer size homes. There definitely isn't much to choose from where I live unless you have 2 good incomes to spend on it.
- Bang2Bay 6y ago
  simply put, most of these are first world problems.
  - onion2k 6y ago
    People who can't afford to settle down, who are spending significant amounts of their income on rent, and who don't see much reward for their effort tend not to have children. In the long term that leads to an aging population, which can cripple the productivity and growth of entire regions. That can be combatted to an extent through immigration policies, but only if people actually want to move to a region that needs more people. These are not just first world problems. These are problems that could, potentially, destroy entire economies.
    - tafox 6y ago
      I mean, immigration is never a long-term solution. Immigrants will soon be facing the same issues (high housing, high education costs, lower wages). I reckon in about 20-30 years the arbitrage opportunity to immigrate to Western countries will be eliminated, it already is much reduced compared to 30 or 40 years ago. QoL in Western countries will be lower, and higher in the rest of the world. I often think of a documentary I saw about Somali refugees who came to America in the early 2000s (sadly I can't find it anymore.) They ended up moving back to Africa because they hated life in America. Working two terrible minimum wage jobs just to pay rent and food. They made no friends and had no free time or money. They were happier living in a UN funded refugee camp spending time with friends and family. I think the only way Western countries have any chance of reducing the falling QoL is space exploration, but I don't think their is enough energy and motivation.
  - CalRobert 6y ago
    Indeed -without a strong enforcement mechanism such limitations are ignored by anbody with a pile of studs and a nailgun. If I buy farmland and build a house in Ireland, I know I'll be forced to demolish it after my neighbours complain (and a long review process). In many places there would be no such enforcement.
- maccard 6y ago
  I'm also in the UK (Edinburgh - it's not quite SE prices but not far off it), and buying solo would be difficult, but buying with two incomes made things much much simpler. Its likely that sole income buyers are going to be priced out by couples, particular in the "nice" houses where the demand is. From a lenders perspective, a couple on 25k each vs a single earner on 60k, the couple is much less risky, their post-tax income is higher, less of a chance of a full default, living costs are split. They can be slightly more "generous" lending to couples, so it's likely that most of the nice properties fall just above the 2x 25k earner threshold (adjusted for whatever that is locally)
- CalRobert 6y ago
  But _why_ are those the houses getting built? Why can't we demolish every residential structure under 5 stories tall in central London and build flats? Why can't you build in the green belt? There are some good reasons - the negative externalities of one-off housing in the middle of nowhere are huge (I say, writing from a one-off house in the middle of Ireland), but there are some bad reasons too, like homeowners using "social and affordable" to concern-troll their way in to ensuring nothing actually gets built. And yeah, dev salaries in the UK are shockingly low compared to the US (and Ireland for that matter, so far as I can tell) but when the supply of housing is constrained higher incomes don't help for long. Making $250k might enable you to buy a $2 million 4 bed 2 bath near decent schools in San Jose, but give it a while and you'll need $350k, then $450k, etc. (or remote work will break the back of the NIMBYs with any luck).

It's definitely true that there aren't enough houses being built to keep up with the way people want to live, and that the houses that are built are the wrong sort of houses. I'm in the process of buying my first at the moment and it's immensely difficult to find something suitable and affordable (UK dev wages outside of London don't compare well with the US...). I'm not sure if that's entirely down to homeowners though, or construction companies only building massively profitable mansions instead of small first-time buyer size homes. There definitely isn't much to choose from where I live unless you have 2 good incomes to spend on it.

Bang2Bay 6y ago
simply put, most of these are first world problems.
- onion2k 6y ago
  People who can't afford to settle down, who are spending significant amounts of their income on rent, and who don't see much reward for their effort tend not to have children. In the long term that leads to an aging population, which can cripple the productivity and growth of entire regions. That can be combatted to an extent through immigration policies, but only if people actually want to move to a region that needs more people. These are not just first world problems. These are problems that could, potentially, destroy entire economies.
  - tafox 6y ago
    I mean, immigration is never a long-term solution. Immigrants will soon be facing the same issues (high housing, high education costs, lower wages). I reckon in about 20-30 years the arbitrage opportunity to immigrate to Western countries will be eliminated, it already is much reduced compared to 30 or 40 years ago. QoL in Western countries will be lower, and higher in the rest of the world. I often think of a documentary I saw about Somali refugees who came to America in the early 2000s (sadly I can't find it anymore.) They ended up moving back to Africa because they hated life in America. Working two terrible minimum wage jobs just to pay rent and food. They made no friends and had no free time or money. They were happier living in a UN funded refugee camp spending time with friends and family. I think the only way Western countries have any chance of reducing the falling QoL is space exploration, but I don't think their is enough energy and motivation.
- CalRobert 6y ago
  Indeed -without a strong enforcement mechanism such limitations are ignored by anbody with a pile of studs and a nailgun. If I buy farmland and build a house in Ireland, I know I'll be forced to demolish it after my neighbours complain (and a long review process). In many places there would be no such enforcement.
maccard 6y ago
I'm also in the UK (Edinburgh - it's not quite SE prices but not far off it), and buying solo would be difficult, but buying with two incomes made things much much simpler. Its likely that sole income buyers are going to be priced out by couples, particular in the "nice" houses where the demand is. From a lenders perspective, a couple on 25k each vs a single earner on 60k, the couple is much less risky, their post-tax income is higher, less of a chance of a full default, living costs are split. They can be slightly more "generous" lending to couples, so it's likely that most of the nice properties fall just above the 2x 25k earner threshold (adjusted for whatever that is locally)
CalRobert 6y ago
But _why_ are those the houses getting built? Why can't we demolish every residential structure under 5 stories tall in central London and build flats? Why can't you build in the green belt? There are some good reasons - the negative externalities of one-off housing in the middle of nowhere are huge (I say, writing from a one-off house in the middle of Ireland), but there are some bad reasons too, like homeowners using "social and affordable" to concern-troll their way in to ensuring nothing actually gets built. And yeah, dev salaries in the UK are shockingly low compared to the US (and Ireland for that matter, so far as I can tell) but when the supply of housing is constrained higher incomes don't help for long. Making $250k might enable you to buy a $2 million 4 bed 2 bath near decent schools in San Jose, but give it a while and you'll need $350k, then $450k, etc. (or remote work will break the back of the NIMBYs with any luck).