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Another Cornishman here (Par). The financial destitution and how much harder they have to work for the same things I do in the South East is unsustainable. Corn

Another Cornishman here (Par). The financial destitution and how much harder they have to work for the same things I do in the South East is unsustainable. Cornwall has Luther to the right politically and that’s because there’s been some useful scapegoats. Now those scapegoats have been slain and things are getting worse not better I hope we’ll see policies that are focused on root cause issues instead of ideology (left or right). Property is an obvious example. Dormant second home now means the Cornish rent or live in low quality new build accommodation (hello Wainhomes) but when communities are hollowed out and empty through winter local businesses fail and the destitution affects even the pretty locations. Those people wonder what happened to the quaint fishing village their second home is in. Why is cafe closed, the nearest shop a supermarket that is a 30 min drive away. Why is their a drug problem? Why are the pins all boarded up etc etc. I hope Cornwall and it’s political representatives can act before the bust comes and find a balance between tourism and building sustainable local businesses in different sectors. The obvious place to start is accommodation. If people cannot put a roof over their head how can a community function least of all an economy.

makomk 5y ago
Unfortunately, the British press and all the wealthy people with second homes still have Brexit as a scapegoat for why cafes and shops in tourist destinations can't find staff. Never mind the fact that AirBNB and second homes have pushed up house prices and rents to the point that it's impossible to live there on the kind of pay those jobs have, according to the media it's all the fault of Brexit driving away the foreign workers who had to do the jobs because all the Brexit-voting morons who were brainwashed into blaming the EU are too lazy to do them.
- ForHackernews 5y ago
  That's a self-correcting problem, isn't it? Either those cafes and shops will raise prices and pay their staff more, or they'll close down. I've never understood why we're supposed to feel bad for "small business owners" who won't find staff when paying peanuts for their crappy jobs.
  - spockz 5y ago
    The point is that before there existed an ecosystem. That “peanuts” is what the business owner was able to afford to pay which was enough for the employees to make a somewhat decent living. Now that isn’t possible anymore. The objection is to the change/disruption of a local ecosystem by outsiders.
    - chrisseaton 5y ago
      Blaming outsiders - classic strategy, can’t go wrong!
      - imtringued 5y ago
        We are blaming outsiders for giving us too much money. Where is all that money going if not into the hands of locals who are selling their property?
        im3w1l 5y ago
        Consider a community of 10000 households. 5000 rent their housing, 4500 own their own place, and 500 own more than one place. Now outsiders enter the picture and buy property driving up the prices. The 5000 renting households are now in trouble. If rents go up they are squeezed that way. With rent control there are still issues: Their kids are unable to move out, and separations become tricky. For the 4500 it's a mixed bag. They have the same issues with splitting the household, but they also have advantages. They can do a reverse mortgage and live well. Or they call sell and live well elsewhere. For the 500 elite households it's a pure win, they can buy more yachts than before.
        chrisseaton 5y ago
        > Now outsiders enter the picture and buy property Buy it from who? Locals. So who gets the money? Locals. But anyway the point was don’t divide people into insiders and ‘outsiders’.
- cutler 5y ago
  And driving wages down is the answer to what, exactly?
- nkrisc 5y ago
  >it's all the fault of Brexit driving away the foreign workers who had to do the jobs Forgive me since I’m American, but wasn’t getting rid of foreigners taking jobs one of the selling points of Brexit?
  - yardie 5y ago
    The primary driving force was nativism. Even right up to the end the UK wanted to remain in the common market, but part of being in the common market is freedom to migrate. It also exposed the loss of influence the UK had in the EU. Many provisions were carved out for them in the 80s. But when it came to the EC the EU was not making any exceptions for them this time.
  - laurent92 5y ago
    No, it was recovering the freedom that was getting eaten by Europe, and listening to the vote of the UK people again. Whether it ends up in “getting rid of foreigners” or anything else would only be a second-order result of listening to the Englishman’s vote, if that is what they still vote for in 10 years. The goal of Brexit was democracy, not particular measures left or right.
    - sideshowb 5y ago
      Amusing you equate democracy with the English vote. Sincerely, Scotland, Wales and NI
      - rfrey 5y ago
        I understand there are other factors at play (to say the least) in NI, but can you explain the incentive Scotland and Wales have to stay in the UK? I'd have thought they'd be gearing up for full scale separation referendums by now.
        Filligree 5y ago
        It’s the same incentives the UK had to stay in Europe. Ninety plus percent of their trade is with each other.
- afuchs 5y ago
  There's a dead comment later in this thread which using directed abusive language towards another commenter while linking to a Louis Rossmann video. The video [1] was interesting, although the dead comment seemed to completely ignore the video's [1] main point, where Louis talks about a hypothesis [2] where in New York City there may be an incentive structure between real estate investors and banks which is creating a market failure. The hypothesis [2] is that a building's assessed value is based on the rental prices that the landlord asks for even if nobody will reasonably pay those rents. The hypothesis speculates that, if a building's assessed value is lowered, it could trigger conditions in loan contracts that penalize the landlord or investor. Because of this, there may be an incentive for the landlord to keep buildings vacant instead of lowering their prices to market rate. [1] https://www.youtube.com/watch?v=xfHQZj3_TX4&t=580s https://www.youtube.com/watch?v=xfHQZj3_TX4&t=580s [2] https://www.reddit.com/r/nyc/comments/innhah/nearly_twothirds_of_new_york_restaurants_may_have/g49g4c5/ https://www.reddit.com/r/nyc/comments/innhah/nearly_twothird...
  - mancerayder 5y ago
    Well, when you apply for loans the bank will want to know (and will send an appraiser) to estimate sales and rental values. If the developer's expectations on rental or sales income on a multifamily property are higher than the reality, and they lower sales prices (condos) or rental amounts, there's potential for them to get called to provide more capital. Because they may reappraise. What I've just explained probably has its own vocabulary I'm not using in the commercial real estate world, but my experience here is that my building has this problem and the brokers explained why they preferred to leave things vacant. As it turns out, after 18 months, as the city comes back after the pandemic, the vacancies are now suddenly much lower. The building for 1/3 full for years.
  - silexia 5y ago
    I am not a housing investor, but I see many misguided articles claiming housing investors are driving prices up. The factors that primarily control pricing in the housing market are supply and demand. In Seattle, London, Los Angeles and elsewhere demand has risen steadily but supply has not. This causes prices to increase sharply. The solution is to increase the housing supply. If the government removes regulations preventing developers from building new houses and apartments, many more will be built and prices will drop. Many young people prefer to live in inexpensive high density housing. I remember looking at renting an apartment without a kitchen (there was a big shared kitchen for the whole floor) and without its own bathroom in my early twenties. Monthly rental price on this is around $300 per month as compared to $1,600 for a single bedroom apartment. Why aren’t there more of these? Government regulation prevents them from being built. Government permitting processes take years to go through and cost millions of dollars for big new apartment buildings or for residential developments. If we lighten / remove these regulations, housing supply will decrease dramatically. If you don’t want housing investors bidding up housing prices, then allow the supply to continuously increase. This will continuously drive down prices and no investors will want to buy.
- onlyrealcuzzo 5y ago
  AirBNB, second homes, and rentals aren't pushing up rents and house prices even a fraction as much as central banks artificially lowering interest rates, zoning laws, and NIMBYism. Population growth and lower family formation rates - which is hard to blame on anyone but women actually having a choice for their own lives - are much bigger reasons for price increases than AirBNB and second homes pretty much everywhere outside of the most touristy vacation destinations.

makomk 5y ago

Unfortunately, the British press and all the wealthy people with second homes still have Brexit as a scapegoat for why cafes and shops in tourist destinations can't find staff. Never mind the fact that AirBNB and second homes have pushed up house prices and rents to the point that it's impossible to live there on the kind of pay those jobs have, according to the media it's all the fault of Brexit driving away the foreign workers who had to do the jobs because all the Brexit-voting morons who were brainwashed into blaming the EU are too lazy to do them.

ForHackernews 5y ago
That's a self-correcting problem, isn't it? Either those cafes and shops will raise prices and pay their staff more, or they'll close down. I've never understood why we're supposed to feel bad for "small business owners" who won't find staff when paying peanuts for their crappy jobs.
- spockz 5y ago
  The point is that before there existed an ecosystem. That “peanuts” is what the business owner was able to afford to pay which was enough for the employees to make a somewhat decent living. Now that isn’t possible anymore. The objection is to the change/disruption of a local ecosystem by outsiders.
  - chrisseaton 5y ago
    Blaming outsiders - classic strategy, can’t go wrong!
    - imtringued 5y ago
      We are blaming outsiders for giving us too much money. Where is all that money going if not into the hands of locals who are selling their property?
      - im3w1l 5y ago
        Consider a community of 10000 households. 5000 rent their housing, 4500 own their own place, and 500 own more than one place. Now outsiders enter the picture and buy property driving up the prices. The 5000 renting households are now in trouble. If rents go up they are squeezed that way. With rent control there are still issues: Their kids are unable to move out, and separations become tricky. For the 4500 it's a mixed bag. They have the same issues with splitting the household, but they also have advantages. They can do a reverse mortgage and live well. Or they call sell and live well elsewhere. For the 500 elite households it's a pure win, they can buy more yachts than before.
        chrisseaton 5y ago
        > Now outsiders enter the picture and buy property Buy it from who? Locals. So who gets the money? Locals. But anyway the point was don’t divide people into insiders and ‘outsiders’.
cutler 5y ago
And driving wages down is the answer to what, exactly?
nkrisc 5y ago
>it's all the fault of Brexit driving away the foreign workers who had to do the jobs Forgive me since I’m American, but wasn’t getting rid of foreigners taking jobs one of the selling points of Brexit?
- yardie 5y ago
  The primary driving force was nativism. Even right up to the end the UK wanted to remain in the common market, but part of being in the common market is freedom to migrate. It also exposed the loss of influence the UK had in the EU. Many provisions were carved out for them in the 80s. But when it came to the EC the EU was not making any exceptions for them this time.
- laurent92 5y ago
  No, it was recovering the freedom that was getting eaten by Europe, and listening to the vote of the UK people again. Whether it ends up in “getting rid of foreigners” or anything else would only be a second-order result of listening to the Englishman’s vote, if that is what they still vote for in 10 years. The goal of Brexit was democracy, not particular measures left or right.
  - sideshowb 5y ago
    Amusing you equate democracy with the English vote. Sincerely, Scotland, Wales and NI
    - rfrey 5y ago
      I understand there are other factors at play (to say the least) in NI, but can you explain the incentive Scotland and Wales have to stay in the UK? I'd have thought they'd be gearing up for full scale separation referendums by now.
      - Filligree 5y ago
        It’s the same incentives the UK had to stay in Europe. Ninety plus percent of their trade is with each other.
afuchs 5y ago
There's a dead comment later in this thread which using directed abusive language towards another commenter while linking to a Louis Rossmann video. The video [1] was interesting, although the dead comment seemed to completely ignore the video's [1] main point, where Louis talks about a hypothesis [2] where in New York City there may be an incentive structure between real estate investors and banks which is creating a market failure. The hypothesis [2] is that a building's assessed value is based on the rental prices that the landlord asks for even if nobody will reasonably pay those rents. The hypothesis speculates that, if a building's assessed value is lowered, it could trigger conditions in loan contracts that penalize the landlord or investor. Because of this, there may be an incentive for the landlord to keep buildings vacant instead of lowering their prices to market rate. [1] https://www.youtube.com/watch?v=xfHQZj3_TX4&t=580s https://www.youtube.com/watch?v=xfHQZj3_TX4&t=580s [2] https://www.reddit.com/r/nyc/comments/innhah/nearly_twothirds_of_new_york_restaurants_may_have/g49g4c5/ https://www.reddit.com/r/nyc/comments/innhah/nearly_twothird...
- mancerayder 5y ago
  Well, when you apply for loans the bank will want to know (and will send an appraiser) to estimate sales and rental values. If the developer's expectations on rental or sales income on a multifamily property are higher than the reality, and they lower sales prices (condos) or rental amounts, there's potential for them to get called to provide more capital. Because they may reappraise. What I've just explained probably has its own vocabulary I'm not using in the commercial real estate world, but my experience here is that my building has this problem and the brokers explained why they preferred to leave things vacant. As it turns out, after 18 months, as the city comes back after the pandemic, the vacancies are now suddenly much lower. The building for 1/3 full for years.
- silexia 5y ago
  I am not a housing investor, but I see many misguided articles claiming housing investors are driving prices up. The factors that primarily control pricing in the housing market are supply and demand. In Seattle, London, Los Angeles and elsewhere demand has risen steadily but supply has not. This causes prices to increase sharply. The solution is to increase the housing supply. If the government removes regulations preventing developers from building new houses and apartments, many more will be built and prices will drop. Many young people prefer to live in inexpensive high density housing. I remember looking at renting an apartment without a kitchen (there was a big shared kitchen for the whole floor) and without its own bathroom in my early twenties. Monthly rental price on this is around $300 per month as compared to $1,600 for a single bedroom apartment. Why aren’t there more of these? Government regulation prevents them from being built. Government permitting processes take years to go through and cost millions of dollars for big new apartment buildings or for residential developments. If we lighten / remove these regulations, housing supply will decrease dramatically. If you don’t want housing investors bidding up housing prices, then allow the supply to continuously increase. This will continuously drive down prices and no investors will want to buy.
onlyrealcuzzo 5y ago
AirBNB, second homes, and rentals aren't pushing up rents and house prices even a fraction as much as central banks artificially lowering interest rates, zoning laws, and NIMBYism. Population growth and lower family formation rates - which is hard to blame on anyone but women actually having a choice for their own lives - are much bigger reasons for price increases than AirBNB and second homes pretty much everywhere outside of the most touristy vacation destinations.