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The walkability comes at the cost of tiny housing though. Like here in Stockholm even 60m2 is getting very pricy (~350-450k USD). The main issue is that there
by nivenkos 5y ago
The walkability comes at the cost of tiny housing though.
Like here in Stockholm even 60m2 is getting very pricy (~350-450k USD).
The main issue is that there is just nowhere near enough housing to keep up with population increases, seemingly anywhere in the Western world. And housing has become a "store of value" against inflation for investors, driving up prices and becoming a retirement fund for landlords and homeowners so governments can never let the prices drop (e.g. by embracing the abundance of development proposed in this article).
- fsloth 5y ago'And housing has become a "store of value"' 'Not become' but 'has been' for decades. You only now start to notice it as inflation and wages have not kept up. This is by design in most post-WW 2 western economies as an economic policy to "increase national wealth". That's why housing loans are subsidized and whatnot.
- nivenkos 5y agoWell post-WW2 there was a huge boom in construction in Europe at least. Especially since many cities were almost completely destroyed. Even where my grandparents lived in England, the Blitz destroyed a lot of homes and meant mass construction was inevitable. It's really been since the 80s, that all infrastructure and construction projects have been slowed down and hampered by NIMBYism - and it's all about just pumping up the existing prices through artificial scarcity.
- dr_dshiv 5y agoIf you use price per square meter to compare European housing to American housing, Europe seems super expensive. But, if you compare by the functional space (# bedrooms), Europe is cheap. I moved from San Diego to Amsterdam and was very happy to find 3-4 bedroom apartments to buy (the bank accepted my self employment income and gave a 1.6% interest rate). Apartments are well designed so you don’t need as much space. I live half a block from a grocery store and still get a lot of groceries delivered. We have 3 kids and no cars. Cheap and easy to rent if we want one for the day. I love this life style where the kids can walk and bike everywhere themself. Son: “Dad, I have to go to guitar, but it is raining” Dad: “Here are your rain pants. Hurry, but be careful biking in the rain”
- nivenkos 5y agoI guess you're on a US salary as a contractor? There's no way I could afford more than 2 bedrooms in the city as a senior engineer, and even that's a push.
- CapitainEvident 5y agoI’m not in Amsterdam, but my mate works in Amsterdam and lives on a single engineer Dutch salary in a beautiful 2 bed with a separate dinning/kitchen/lounge near Sarphatipark, 10 minutes walk from Museumplein, walking distance from the Rembrandt Museum and to work.
- llampx 5y agoDid he buy or rent the apartment recently and from his own savings+income? Many such stories involve an old rental contract, a family-owned apartment or sizeable inheritance.
- jseban 5y agoYep, and commonly also a loan from parents for downpayment to buy.
- CapitainEvident 5y agoNot a lack of 75-100 m2 (3 bedrooms) under €600,000 in walking distance from the most famous tourist attractions, I know as I looked. Smaller 2 bedrooms can be bought in the center of Amsterdam for €350,000 with a €35,000 deposit (10%). How is that not viable for a tech worker?
- jseban 5y agoIt's sort of viable, but you'd have to spend 2-3 years living in overpriced temporary sublets while trying to save up to that deposit, and still it just supports the original comment which was that you could only afford 2 bedrooms and even that is a push. To get one of those 600k apartments you'd have to flip your first apartment for the bigger downpayment, and that's gonna take another 2 years.
- ascar 5y ago> Like here in Stockholm even 60m2 is getting very pricy (~350-450k USD). Isn't that still really cheap compared to NY or Silicon Valley? Rising housing prices has more to do with pressure to move to a select few cities rather than walkability or rising population. E.g. in Germany housing in Munich, Hamburg or Frankfurt costs multiples of housing in smaller eastern German cities.
- nivenkos 5y agoYeah, but the salaries are much, much lower. SF: ~$167k USD p.a. - https://www.builtinsf.com/salaries/dev-engineer/software-engineer/san-francisco https://www.builtinsf.com/salaries/dev-engineer/software-eng... Stockholm: 45k SEK per month = ~$63k USD p.a. - https://www.glassdoor.com/Salaries/stockholm-software-engineer-salary-SRCH_IL.0,9_IM1136_KO10,27.htm https://www.glassdoor.com/Salaries/stockholm-software-engine... Taxes are also much higher (especially if your employer has good health insurance coverage in the US, so the added benefits are less). Like I pay an average 40% rate on income plus 25% sales tax, the marginal rate on income (and RSUs, etc.) is 56%! It's really painful for stuff like housing which is a similar price (and increasing!), or inelastic international goods like electronics, cars, fuel (which is also heavily taxed), etc. Americans are incredibly lucky - far higher wages, and the freedom to manage your own finances (not forced to pay for irresponsible parents' lifestyle choices through extremely high taxes).
- cudgy 5y ago“Americans are incredibly lucky - far higher wages, and the freedom to manage your own finances (not forced to pay for irresponsible parents' lifestyle choices through extremely high taxes).” USA is a huge nation with extreme variations in housing costs and salaries depending on location. Most workers get few benefits, no vacation time, and meager government benefits. Homeless people wander most areas especially urban due to these issues. Still think Americans are lucky?
- Gwypaas 5y agoDon't forget the 31.42% payroll tax that's hidden from your salary but a tax right on it. A salary of 50k SEK costs the employer 65.7k SEK on their books, which is what actually matters. The actual marginal taxrate flowing from your employers books at that level is somewhere up at 75%-80%, not even counting sales tax when you use the money.
- torben-friis 5y ago>The main issue is that there is just nowhere near enough housing to keep up with population increases, seemingly anywhere in the Western world. Not sure about Sweden but at least here (Spain) housing being bought for investment is much more of a problem than physical unavailability. And I don't mean it as a store of value: People (and companies) buy houses to rent them and have the rent payments pay for the mortgage payments, since it's basically free money - For those that can get a mortgage, since it's pretty much mandatory to pay 20% of the cost upfront (plus taxes). Basic needs really shouldn't be investment material.
- kubb 5y agoThis guy gets it, others seem to be making incredible effort not to see it.
- _vbnz 5y agoI agree completely, at least here in Sweden it's harder to rent flats out, so this is less common (it might change next year though when the conservatives/nationalists win). IMO I'd make renting restricted to government monopoly (like alcohol sales in Sweden, and the old first-hand contracts system), and property ownership restricted to your residence only, and then build much, much more whilst stopping mass immigration (it's crazy to invite 2+ million refugees when there isn't enough housing already!).
- jseban 5y agoRenting is basically already restricted to government policy in Stockholm, and the result is 15 years waiting time to get a flat.
- nivenkos 5y agoYeah, the first-hand contracts system is a disaster atm. But note that waiting time only applies to first-hand contracts. You can still rent second-hand. The idea would be to build much more, and buy up the former second-hand places.
- 5y ago
- matkoniecz 5y ago> The walkability comes at the cost of tiny housing though. Is it really obligatory? I know that it is often correlated, but it is possible to build apartment tower with decently sized apartments, in a walkable neighbourhood. Maybe it tends to be more profitable to split apartments into smaller one? While splitting house plots into smaller being less profitable and resulting in this effect?
- pornel 5y agoWalkability is highly correlated with population density. Dense walkable neighborhoods are more attractive. These two together make housing small and expensive. Walkable neighborhoods need destinations you can walk to. Businesses need a minimum number of customers to be viable, so the denser the neighborhood the more variety of destinations it will have. To avoid cars taking up the space, it's necessary to have high-frequency public transport, and that also requires high population density to be viable.
- throw0101a 5y ago> These two together make housing small and expensive. Nothing small about these houses in the walkable neighbourhood of Roncesvalles: * https://www.google.com/maps/place/150+Geoffrey+St,+Toronto,+ON https://www.google.com/maps/place/150+Geoffrey+St,+Toronto,+... * https://www.google.com/maps/place/150+Westminster+Ave,+Toronto,+ON https://www.google.com/maps/place/150+Westminster+Ave,+Toron... * https://en.wikipedia.org/wiki/Roncesvalles,_Toronto https://en.wikipedia.org/wiki/Roncesvalles,_Toronto * https://en.wikipedia.org/wiki/Streetcar_suburb https://en.wikipedia.org/wiki/Streetcar_suburb You still have a (back)yard and can have a garage attached to a laneway. Just up the street there are more modestly sized houses (3 bedrooms usually): * https://www.google.com/maps/place/50+Geoffrey+St,+Toronto,+ON https://www.google.com/maps/place/50+Geoffrey+St,+Toronto,+O... Video on the concept by the Not Just Bikes channel, "Suburbs that don't Suck - Streetcar Suburbs (Riverdale, Toronto)": * https://www.youtube.com/watch?v=MWsGBRdK2N0 https://www.youtube.com/watch?v=MWsGBRdK2N0
- pornel 5y ago
- Ma8ee 5y agoNo, it's not walkability that makes apartments in central Stockholm expensive. There's just not much more space there for more houses. For decades car traffic was what was prioritised. Just look at old Slussen which was just a couple of big traffic circles, with narrow tunnels for pedestrians. Or Sergel's torg, arguably the most central square in Sweden, which is dominated by a big traffic circle and with shops and pedestrian areas underground. Then it is true that too little housing is built, and with the current very low interest rates people can afford to pay a lot for their dwellings. But I don't think it is intentional to not build more.
- jseban 5y agoCar traffic is still prioritised, the new slussen is still an 8 lane highway right through the middle of the city, and the biggest reason it's downsized is that the ring road is now finished. And the biggest reason why Stockholm is managing to be so "car free" is because the highways are in tunnels underground.
- Ma8ee 5y agoI do think it is an improvement that they nowadays put cars in tunnels and people above ground. But it would of course be much better if they had spent all that money they used for car tunnels on public transport and more bicycle lanes and highways.
- alexanderchr 5y agoStockholm is not car free by any standards. On the opposite it’s very car friendly.
- CapitainEvident 5y agoToo car friendly for my taste and I don’t get why people drive so much. Stockholm is small enough that it’s walkable with fast public transport connecting everything. I don’t think it ever took me over 30 minutes to get anywhere, none of my friends drive in town but over half of them own a car so we are often traveling north for skiing, south for the summer, weekends in someone’s parent’s farm, but I have no recent memory of driving around town, there’s just no need, plus, no drinking, so it’s a nonstarter.
- RivieraKid 5y agoSimilar prices here in Prague... I think that the reason is similar to why stocks have appreciated so much - long-term interest rates have dropped as a result of QE. What central banks usually do is that they buy short-term bonds to affect short-term rates. QE means that they buy long-term bonds to affect long-term rates.
- quantumofalpha 5y ago> The main issue is that there is just nowhere near enough housing to keep up with population increases, seemingly anywhere in the Western world. With falling fertility rates, natural population growth in the west is about zero today. If not even (going to be) negative.
- nivenkos 5y agoYeah, but the neoliberal governments have opted for mass immigration to suppress wages and maintain property prices. Here in Sweden the population has increased by almost 30% in the last 15 years. Similar story in the UK (but a smaller proportion by %, as the base population is higher).
- rini17 5y agoHow comes in eastern Europe where fertility is low, immigration is practically non-existent and wages much lower than Sweden, the property prices keep rising too?
- ChuckNorris89 5y agoBecause of internal immigration. Due to povery, lack of investments and lack of opportunities, the countryside there is becoming empty fast as everyone moves from the villages/small cities to the 3-5 big metro areas in the country with top universities and cushy skilled desk-jobs instead of bumming around in rural areas begging for low paying manual labor type jobs. In western europe, rural areas and small towns, although boring AF, usually have some trade schools or small collages and local industries of their own that still keep locals there and sometimes attract foreigners so not everyone has to scram to the big cities, although big cities there have major housing issues too.
- jseban 5y agoFrom what I hear, salaries in some eastern european countries, like Romania, are higher than western europe, in local purchasing power.
- nuerow 5y ago> The walkability comes at the cost of tiny housing though. You might have your correlation/causation things mixed up. Walkability means higher quality of life, which means higher demand thus higher prices. In turn, as real estate prices go up, real estate developers are pressured to provide more houses from a limited construction area, thus this means shrinking apartment sizes. Offering smaller apartments also has the advantage of increasing price per unit of area, while keeping selling prices within reach of the market segment you're targeting, i.e., you might not afford 1M for a house with 200m² but you might afford 500m for a house with 100m².
- Pxtl 5y agoWalkability demands density, and density intrinsically is encouraged by smaller units. Now, obviously the economic factor you describe can exacerbate this, but fundamentally dense walkable neighborhoods can't have the kind of sprawly mcmansions some people have grown comfortable with in suburbia.
- throw0101a 5y ago> Walkability demands density, and density intrinsically is encouraged by smaller units. You can have sizeable homes even in walkable neighbourhoods. Look at any suburb constructed pre-WW2: * https://www.google.com/maps/place/150+Geoffrey+St,+Toronto,+ON https://www.google.com/maps/place/150+Geoffrey+St,+Toronto,+... * https://www.google.com/maps/place/150+Westminster+Ave,+Toronto,+ON https://www.google.com/maps/place/150+Westminster+Ave,+Toron... * https://en.wikipedia.org/wiki/Streetcar_suburb https://en.wikipedia.org/wiki/Streetcar_suburb You still have a (back)yard and can have a garage attached to a laneway. Just up the street there are more modestly sized houses (3 bedrooms usually): * https://www.google.com/maps/place/50+Geoffrey+St,+Toronto,+ON https://www.google.com/maps/place/50+Geoffrey+St,+Toronto,+O...
- Pxtl 5y agoI live in exactly that kind of pre-war streetcar suburb and yes, I've heard suburbanites complain that the houses in these neighborhoods are too small and narrow and lack attached garages. So yes, even the moderate walkability created by streetcar suburbs is still requires a shift to noticeably smaller homes for many North Americans acclimatized to sprawl.