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I wonder how much of this is due to supply/demand and the simple fact that more people want to live in about the same number of dwellings. Even if population gr
by TechBro8615 6y ago
I wonder how much of this is due to supply/demand and the simple fact that more people want to live in about the same number of dwellings. Even if population growth doesn't explain it, urban population growth might. e.g. San Francisco has seen huge growth but constructed basically no new units. So it's not exactly surprising the prices go up.
The funny thing is, all the rich people living in these cities would never be able to survive without all the poor people commuting into the city to support them. The more expensive the city gets, the longer those commutes get. It's a horribly regressive system because now the poor people are spending multiple hours a day commuting, which is a huge opportunity cost of time that they could have spent advancing their social mobility.
At some point something has to give. You can't just keep filling cities with rich people if nobody is there to keep them running.
- Ccecil 6y agoI see this problem currently coming to a head in my area (Coeur d'Alene, ID) We have long been a destination area for people looking to escape the cities but in the last year we have had 33-50% increase in housing prices (limited inventory seems to be the driving factor coupled with the urban flight). Rental prices are to the point where even apartments are out of range for the average person who lives here. If you rent they want your income to be 3x your rent price. So currently if you are a single individual looking to rent that means you need to earn ~$36k/year to be eligible (also, a clean criminal and financial record as well). Issue is the minimum wage is $7.25/hr still...and if you work foodservice they can pay you ~$3.50/hr because your tips offset it. We have a steady influx of people buying houses at over the already inflated asking cost because it "seems cheap" to them compared to where they live. What they do not realize is that if they lose their remote job (or if their pay is scaled to the region) they will have little/no chance of finding employment locally which will pay the amount they need to simply "live". About 4 years ago University of Idaho released a study saying that 22% of the people living in this town cannot afford to do so...I wonder what that rate is now. I am starting so see more and more people sleeping in cars parked near the recreational areas and parking lots. Tons of multi family houses. Things are going to get bad really soon. I can't speak for every area of the country...but in our case I suspect a large part of this is the waves of real estate investors who came through in the last couple years to buy up homes and are leaving them vacant (or vacation rentals). It seems like inventory is being artificially limited. To the people investing it is a win-win...either the house is vacant and you make a ton of money...or it gets rented as an airbnb for $3k/mo and they make even more. I suspect if they were to impose a 2x property tax on any property vacant for more than 6mos or vacation rentals it would very quickly effect the issues we are facing...but being as this town was structured by the tourism/real estate industry I do not see much hope. https://cdapress.com/news/2021/feb/22/housing-market-heats-north-idaho/ https://cdapress.com/news/2021/feb/22/housing-market-heats-n...
- AmVess 6y agoIt is bad in a lot of places. A starter home less than 10 years ago was $75k. Now it is $300k without an increase in wages for people starting out or working less technical jobs. The housing pinch has already hit Twin Falls if you can believe that. One would have to move all the way to Idaho falls to know what it was like in the Boise area 10 years ago.
- Ccecil 6y agoIdaho in general is getting hit hard. Montana will be next once things like Starlink take off. The primary limitation to living out in the middle of nowhere has been commute to high paying jobs. I wonder how many people would move to Coeur d'Alene if they would have made the lake a superfund site...like they did the Silver Valley which drains into it. The whole bottom of the lake is heavy metal contaminated...but they don't show you that in the real estate ads. :)
- nbardy 6y agoWithout an increase in wages. And economic instability causing lost jobs, as well as increasing rip stripping away earning power. I make a lot of money as a software engineer and I don't think I'll get a home until I'm 45.
- closeparen 6y agoWhat is going on with your local economy such that you can equate "average person" and "minimum wage" like this?
- RIMR 6y agoOut of the 155.75 Million working Americans, 80.4 million make minimum wage. That's 51.6% (a majority) of workers making minimum wage. So yeah.
- SpicyLemonZest 6y agoThat isn't true. In 2017, 80.4 million Americans were paid hourly, and out of those only 1.8 million made minimum wage or below. (https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm# https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm#) More generally, I'd encourage you to question the mental model that made this sound like a potentially true claim in the first case. An economy where most people are paid minimum wage would be incredibly different than the one we actually have.
- echelon 6y ago> San Francisco has seen huge growth but constructed basically no new units. This is why San Francisco doesn't work anymore and isn't equitable until the electorate decides to build new housing. We shouldn't downplay a move to cities like Austin, Charlotte, and Atlanta that have no qualms with building lots of housing and affordable housing. Why have a non-trivial percent of funding go to rent seekers, anyway?
- ergocoder 6y agoI understand the "build more" concept, but a city (any city) shouldn't grow too fast. There's a huge risk in growing too quickly. SF's infrastructure doesn't seem that it can handle more people. traffic is bad. Restaurants are full (have you been to a brunch?). Buses are full. More homeless than ever. Letting the price rise, so people/companies will go elsewhere seems like an okay strategy.
- arcticbull 6y ago> I understand the "build more" concept, but a city (any city) shouldn't grow too fast. There's a huge risk in growing too quickly. Well, it's pretty clear from the explosion in housing prices that it's not growing nearly fast enough. I'd love to see some citation as to what "too fast" is and why you think SF is at risk of hitting that number. > SF's infrastructure doesn't seem that it can handle more people. traffic is bad. Restaurants are full (have you been to a brunch?). Buses are full. More homeless than ever. More housing = more people = more revenue. That revenue turns into more infrastructure, more restaurants, etc. In fact more density makes infrastructure more economical to operate on a per capita basis. Think Hong Kong. Part of the reason there's more homeless people is they can't afford houses, which building units would help alleviate. > Letting the price rise, so people/companies will go elsewhere seems like an okay strategy. That's not a very free-market attitude!
- chongli 6y agoMore housing = more people = more revenue. That revenue turns into more infrastructure, more restaurants, etc. In fact more density makes infrastructure more economical to operate on a per capita basis. Think Hong Kong. The cost of upgrading infrastructure in a busy city is enormously expensive. San Francisco is on a peninsula with no room at all to expand outward. The only solution is to build up and that’s a real problem in an area prone to earthquakes. Plus there are a lot of people that like the character of their neighbourhood and don’t want to live in an apartment building. It isn’t their fault that SF became the global tech capital.
- tenebrisalietum 6y ago> You can't just keep filling cities with rich people if nobody is there to keep them running. Rich people will just have people they need to keep things running live on their own now-very-large properties; and arrangements where your workplace also provides your housing might start to gain traction.
- tehjoker 6y agoThis idea is like a plantation or hacienda system or more recently a company town.
- gruez 6y agoWhat's the advantage in having your company provide housing for you compared to buying it yourself? You see it happening for health insurance, but the only reason it makes sense is because it doesn't count as income so you save the taxes. This doesn't exist for housing so it really doesn't make any sense.
- tehjoker 6y agoThe advantage is that you have some control over your destiny independent of your job. If you piss off your boss, you don't lose your house. All of these ideas to make workers more dependent on their benevolent overlords is basically creating a subservient population.
- tenebrisalietum 6y agoNone unless you are faced with homelessness or this. If company X is offering you a job, and you really need a job, and it's not enough to pay market rent, but X has company dorms available and it will be paid via a line item off of your paycheck, you might take it. Anyone who needs this type of arrangement is likely going to get a refund at the end of the year anyway and doesn't care about the tax implications. Amazon could start doing something like this to have labor for its warehouses if the housing market keeps pricing everyone out, for example. Maybe also office maintenance, food prep/delivery, etc. Didn't Foxconn house its workers at one point? These could be the housing projects of the future if done at a big enough corporate scale. Would they decay into crime-ridden slums or would corporate housing police keep things in order, but in a dystopian manner?
- ihumanable 6y ago> San Francisco has seen huge growth but constructed basically no new units San Francisco publishes its Housing Development Pipeline here https://sfplanning.org/project/pipeline-report#current-dashboard https://sfplanning.org/project/pipeline-report#current-dashb... They may not be adding capacity at a sufficient rate, but they have tens of thousands of units in the pipeline in every quarter.
- arcticbull 6y agoThere's a huge spread between the number of new jobs and new houses. If you zoom out to the last 50 years it's pretty staggering. [1, 2] [1] https://economics21.org/bay-area-the-land-of-many-jobs-and-too-few-homes https://economics21.org/bay-area-the-land-of-many-jobs-and-t... [2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
- nickff 6y agoThe fact that there are units in pipeline doesn't tell you anything about how many are being completed. As an extreme example, they could actually improve the pipeline numbers by refusing to grant occupancy on any buildings (which would be very bad for prospective residents).
- shuckles 6y agoMost of San Francisco’s housing pipeline is homes on former superfund sites and a landfill island in the middle of the bay.
- ic0n0cl4st 6y agoSan Francisco is a small city, only 49 square miles, 1/2 of which is parkland and a significant portion is landfill which liquifies in a serious earthquake. It’s also surrounded by water on 3 sides I don’t understand why so many HN commenters seem to think it could magically become a dense metropolis like Manhattan or Chicago. Even in the Gold Rush in the 1800s SF was unscalable the rent was unaffordable. It was always a high crime city. Just read about the history of the barbary coast. Everybody who comes here purely for money wants this city to be something it just isn’t.
- A4ET8a8uTh0 6y agoWell, robot servants are coming. Sure, there will be some truly rich individuals, who will employ human servants, but that will be a minority. I agree with your point, but you will often find the plight of the poor is.. low on the priority list. It should be higher based on the average presence of guillotines on various message boards I frequent, but I assume the well-off have some sort of survival plan.
- DamnYuppie 6y agoI am curious about this sentiment, the one about cutting off peoples heads and all. The times in history that this happened all you did was replace one ruling elite with another ruling elite. It didn't improve the lives of the lowest, in fact it usually really works out poorly for the poorest. See the rain of terror or the over throw of the Czar's in Russia. In the U.S.A if you took EVERYTHING from all of the billionaires, there are ~700 of them you would net under $5T in total [1]. The existing debt of the USA today stands at a hair under $28T [2]. The estimated budget deficit for the next 10 years is $1.2T a year [1]! You do realize you can lop off all the heads you want, take all the money you want, and you will not have solved anything! You would still be a debt slave :( Raising taxes by itself will not solve anything you ALSO need to decrease spending, but no one wants to hear about fiscal responsibility. The heads that need to go are those of corrupt politicians. [1] https://inequality.org/great-divide/updates-billionaire-pandemic/ https://inequality.org/great-divide/updates-billionaire-pand... [2] https://www.pgpf.org/national-debt-clock https://www.pgpf.org/national-debt-clock
- A4ET8a8uTh0 6y agoI did not say it is rational, but you simply cannot ignore its existence in hopes it goes away. edit: Come to think of it. You cannot ignore it precisely, because it is not rational. Rational people you can bargain with.
- DamnYuppie 6y agoAgreed, I didn't think you stated it was rational. I was just mostly curious about the demographic of those people who think like that. I am not ignoring it, I am just really curious why so many others are ignoring so much human history on this subject. I am not saying their aren't grievances or lots of areas to improve upon, but it seems like a lot people who are upset because somebody else has something they want and all they care about is they want it. Like kids in a grocery store screaming that they want ice cream.
- ajmurmann 6y agoEveryone agrees that more housing needs to be built. The problem is that everyone wants it to be built elsewhere. This is especially strong in wealthier neighborhood that have the resources to influence politics. That's one reason why we gentrify poor neighborhood and build nothing in wealthier neighborhoods while often times protecting them as historic. The solution is to remove control from local groups. That also would address a huge part of the many committees you need approval from to build something which is another massive driver of costs and deterrent to build especially cheaper units.
- notJim 6y agoI agree removing local control is a good idea. One way to think about it is that there's kind of a game-theory problem where we have a bunch of groups that have realized they can push a cost to someone else. This results in bad and often unfair outcomes, like less powerful (poorer) neighborhoods seeing a ton of gentrification. By moving the decision-making up a level, we can mediate between the groups to get a fairer outcome. There are not magic bullets, and people have to be engaged with politics to make this happen, but it is possible. I think the other thing that's not talked about enough is that building more housing has benefits for incumbents. If more housing is built in my neighborhood, my neighborhood will support more local businesses and other amenities which I can enjoy. It also means there are more social connections available. Additionally, population growth drives economic growth, which ensures that their locality remains vibrant. The ideology where we view more humans as strictly a cost, and never a benefit drives a lot of problems in our society IMO.
- nitrogen 6y ago"I agree removing local control is a good idea." - Great Britain, to the colonies You'd better have a really, really darn good reason for throwing out democracy. Otherwise this is basically calling for taking away what someone else has just because we want it.
- notJim 6y agoThe state and national governments are also elected in my country, so fortunately democracy prevails! As I said in my comment, in my view there are issues that require coordination at a higher level, because otherwise it's just a game of shoving externalities onto others.
- chubot 6y agoSan Francisco has seen huge growth but constructed basically no new units I've lived in SF for over 15 years -- this is obviously false. You could argue "not enough" units, but if you haven't seen new construction of multiple large buildings in multiple neighborhoods (Hayes Valley, Mission, SOMA, Market st., Potrero Hill, Mission Bay), then you haven't been in SF. Literally walking around on the street, you can see thousands of new units. There was a pretty big uptick sometime around 2014 or 2016 as well. That said, prices are still the about highest in in the nation from what I can see.
- nonameiguess 6y agoThere seem to be a lot of replies to this claiming that San Francisco is in fact building a lot of new units, which is debatable at best, but San Francisco is definitely not experiencing fast population growth. The numbers are right here: https://www.macrotrends.net/cities/23130/san-francisco/population https://www.macrotrends.net/cities/23130/san-francisco/popul... The past 20 years is the lowest population growth the metro area has ever experienced. What it has experienced is growth in the wealth of the wealthiest part of that population, along with increased demand for office space, which competes for housing as a possible use of land. The actual fast growing metro areas of the past several decades, i.e. San Antonio, DFW, Phoenix, Las Vegas, have also seen tremendous booms in housing construction. The homelessness problem in San Francisco is not new, either. You can read about the history here: https://www.kqed.org/news/11765010/timeline-the-frustrating-political-history-of-homelessness-in-san-francisco https://www.kqed.org/news/11765010/timeline-the-frustrating-... It stands out to me in particular that the number of homeless people is about the same as it was in the 80s, but the public complaints being received have skyrocketed. What seems to have actually increased is the number of people either living or working in the city who aren't used to seeing homeless everywhere, presumably people from elsewhere displacing native San Franciscans. But both the absolute number of people in the city and the absolute number of homeless people in the city are not growing at any abnormal rate.