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> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular

> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate mortgage and my prices are set for the next 30 years. I probably work half as hard as he does, if not even less than half. I have a lot of cognitive dissonance associated with that.

mdgrech23 4y ago
I majored in economics and it still boggles my mind what we make as software engineers versus the guy who unclogged my sewer drain allowing me to use the toilet.
- codegeek 4y ago
  You will be surprised how much good plumbers make in the USA. You probably used a bad example. Source: I know my trusted plumber makes well over six figures a year and he cannot take all calls. I asked him once if he has problems generating leads and he smiled saying "I have too much business that I turn people away". He is a "master plumber" which these days is not easy to get certified for in many states. He told me he cannot find enough skilled master plumbers to help him (state of NJ).
  - dangwhy 4y ago
    Yes I have family who make ~100k in chicago.
  - ominous_prime 4y ago
    You will be surprised how much good software engineers make in the USA -- still many multiples of most successful plumbers, and without the long-term physical consequences of that type of labor. Yes, there's still going to be better examples to highlight the disparity.
    - WaitWaitWha 4y ago
      There are no comparable "long-term physical consequences of that type of labor" software engineers do?
      - ominous_prime 4y ago
        Maybe? Anecdotal I guess, but I've met more plumbers with chronic knee and back problems than software engineers. But being a plumber in the US isn't too physically demanding, and makes OK money, so it's probably the example of disparity the GP was trying to highlight.
        WaitWaitWha 4y ago
        A software programmer will be front of a computer screen, 8 hours, 5 days a week in a sedentary position - they are at risk for problems of eyes, back & neck problems, carpal tunnel, weight gain, anxiety, heart disease, insomnia, deep vein thrombosis just top of my head.
        anonymouskimmer 4y ago
        They technically have the option of a chording keyboard/mouse and a wearable computer. Or at the very least a standing desk (or even a treadmill desk). Along with special glasses or monitor filters. How does a plumber avoid kneeling?
        WaitWaitWha 4y ago
        > How does a plumber avoid kneeling? They technically have the option of reducing weight, exercise, proper shoes, knee braces and knee pads, kneeling pads, and such. What I am suggesting is that both (all?) jobs have their own health related demons.
        pc86 4y ago
        Yes in the way that someone with a multi-million dollar trust fund who wants to buy a nicer car or bigger house and someone working for minimum wage both have money problems. Especially when working from home any health-related dangers around software development can be all but completely eliminated. This isn't even remotely comparable to any of the health or occupational risks in the trades.
  - vkou 4y ago
    [flagged]
    - jedberg 4y ago
      Master plumbers are still plumbers, they still get down and get their hands dirty. My guy is also a master plumber, and often works alone. When he does have help, he's often doing the hardest work, the other guy is just handing him pipes and tools.
  - mawadev 4y ago
    This is always the same logic, where a plumber makes a ton of money. The reality is that your trusted plumber is actually a business owner. If you start out as a plumber, you need a ton of work to get to this spot by working for someone else for a bad wage. Meanwhile as a dev, I can comfortably work for someone else and don't have all the risk.
    - bumby 4y ago
      You might need to define a “bad” wage. According to BLS, the median wage for a plumber is slightly above the median wage in the US as a whole. I do think some of the inflated values of some jobs is they are somewhat opaque, while the stuff of jobs like plumbing is easier to at least conceptualize, even if the work itself still requires skill and care. It’s easier for a BS job to inflate its importance if people don’t know exactly how it works.
  - spacedcowboy 4y ago
    The thing is that top-end software engineers in a FAANG company (the equivalent of a master-plumber / master-electriction / etc.) are either pushing towards 7 figures or have already got there - in total comp, not in wages, but still. I'm an ICT5 at Apple (not the best-paying, but hey, less layoffs) and I reported ~$750k last year. There are ICT levels going up to 9...
    - smalley 4y ago
      Wow, I feel like you must have a pretty unique specialization because you are doing incredibly well for ICT5 (Congrats!) There are ICT levels above 6 but I feel like in practice those are very rare and you could easily spend decades working and not make it above ICT6 in many divisions.
- voisin 4y ago
  The fruits of your labour can be sold continuously at low marginal cost. His cannot.
  - anonymouskimmer 4y ago
    I don't know. An unclogged pipe is used multiple times per day.
    - lotsofpulp 4y ago
      If plumbers can figure out how to sell flushing as a service, this whole disparity can be resolved. They might need to hire a software engineer though.
      - anonymouskimmer 4y ago
        :D Your comment got a chuckle out loud. And then I saw your user name and can't stop.
    - layer8 4y ago
      Plumbers should get into the PaaS business (pipes as a service).
    - vjk800 4y ago
      A point that used to be made a lot in copyright wars discussions a decade ago was that most "old fashioned" professions (like plumber, carpenter, architect, etc.) only get paid once, not every time someone uses their product, whereas creators of digital goods somehow are entitled to get money every time someone uses their creation. Super star musicians and software engineers making obscene amounts of money is a direct result of this.
      - AstralStorm 4y ago
        The ignored corollary is that the market for these products will get saturated much more quickly, and thus the product needs to change to stay relevant. Plus there's a low(ish) bar to entry. How long has a quality carpentry been sold now? Cost of entry is also relatively stable. Music styles change every decade now and it is speeding up as marginal costs of entry fall. Likely similar with other entertainment, which is why every entertainment corporation is now looking for lock-in.
- anonymouskimmer 4y ago
  Your job is incredibly tedious and boring dealing as it does with human-constructed Kafka-esque instructional systems. You're effectively psychiatrists for machines. Having taken a couple of introductory programming courses, and thrown together some VBScript and some R markdown, I'm fine with you making the big bucks.
- czbond 4y ago
  Will GPT-6 replace a plumber? I think not. Will GPT-6 replace some subset 10..80% of engineering, law, medical hours? absolutely
  - __derek__ 4y ago
    Wait, why 6?
    - czbond 4y ago
      Picked a higher number to not be scary. "supposedly" GPT-4 can pass the bar exam
      - __derek__ 4y ago
        Gotcha. I thought maybe they were planning to skip GPT-5 or something. That's actually a pretty low bar, FWIW. (rimshot) Law students spend a few months in bar prep to memorize a bunch of crap that doesn't even apply to their real jobs. Maybe the AI will encourage bar associations to finally ditch it, a development that gained some steam during the pandemic.[1] [1]: https://www.reuters.com/legal/legalindustry/bar-exam-who-needs-it-2022-08-04/ https://www.reuters.com/legal/legalindustry/bar-exam-who-nee...
        Ekaros 4y ago
        Bar exam has quite little to do with actual legal work. Or being effective in it. I'm not actually surprised that a AI-model could pass it. The corpus is well known and well defined and test directly draws from that.
  - gwright 4y ago
    I'm not so sure. There is a Planet Money episode that talks about the effect the digital spreadsheet had on accounting employment: > Thanks to spreadsheets, there are 400,000 fewer accounting clerks than in 1980, but 600,000 more regular accountants. Might something like GPT-6 cause employment to shift to higher value job responsibilities? https://www.npr.org/sections/money/2015/02/25/389027988/episode-606-spreadsheets https://www.npr.org/sections/money/2015/02/25/389027988/epis...
lotsofpulp 4y ago
Cognitive dissonance means harboring contradicting thoughts. The difference in you and your friend’s situation is caused by the fact that they are selling labor which has a much lower price than the labor you are selling. This is not contradictory, just a consequence of supply and demand.
- photon12 4y ago
  Yes, there is an inconsistency in the amount of effort expended to survive versus the outcomes of that effort. I can't reconcile them in my head. I'm watching my friend trying not to physically deteriorate and have some modicum of comfort while I sit here on my couch living off savings from the job I recently quit. Nothing I do can be so much more valuable than what he does.
  - czbond 4y ago
    I mean... that's life. What schools should teach is not just "here is a career that matches you're skills" - but more so, "if you choose this career, these are the most probable outcomes and life paths you'll end up in" If AI takes engineering, medical, and law work away from those professionals - they too could have spent many hours to learn, to then earn little. Every human has worth, but we all value the type of work differently.
    - giraffe_lady 4y ago
      "that's life" like this is an inevitable fact of the universe we must live with? No, this is the world we have made. To some extent you have to come to terms with it and find a place to live within it, yes. But those terms can be "this sucks, this is wrong, it should change" which it seems that's where the other commenter is headed.
      - czbond 4y ago
        I don't disagree with your sentiment and the need for that effort, but the probability path is that since the medieval times or longer this has been attempted with no long term success. Make bets on the most probable until real change has occurred.
ep103 4y ago
My rent for my cockroach invested, 150 sq ft apartment is larger than my parent's mortgage for their suburban McMansion about 45m-1h away, and my rent is absolutely on the cheap side for a 1bd room in the area.
- hinkley 4y ago
  In Seattle, 45 minutes away is still within the city limits, unless you're right on the edge of the city limits to start with. And if it's toward Everett even that doesn't save you. In traffic I often thought about how when I was a kid we got uprooted to a new school at a bad time to save my dad 45 minutes of commute each way, and how 2 hours a day doesn't sound that awful.
  - ep103 4y ago
    Yeah, its 45 without traffic, 1h-1:10 on a normal day, 1.5h during the morning and evening commutes. So they're solidly outside the city radius. The thing is, before I moved in, I did research on 1bdroom apartments within a large radius of the city. And basically, unless I was willing to move to a very unsafe area or very unsafe or clearly problematic apartment, rents simply do not go beneath my current rent price. There seems to be an agreed upon price floor from all landlords, and the only thing that changes as you get further from the city center is the size and quality of the apartment. But that means literally every apartment in about an hour circle of my location is more than my parent's mortgage. At least the roaches and I don't have major commuting costs as well.
    - WalterBright 4y ago
      > There seems to be an agreed upon price floor from all landlords I doubt there's collusion. Being a landlord is expensive, and they're not going to set rents at loss levels.
      - vabavhasb 4y ago
        https://news.ycombinator.com/item?id=34926683 https://news.ycombinator.com/item?id=34926683 > Specifically, every morning, RealPage provides participating Lessors with recommended price levels. ... If Lessors wish to diverge from the “approved pricing” they must submit reasoning for doing so and await approval. ... But RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating Lessors must adopt RealPage’s pricing at least 80% of the time.
dheera 4y ago
[flagged]
- sclarisse 4y ago
  Who exactly is being “shafted” by occupying $100,000 worth of house/land, that has not otherwise been paid for, for $216 a month? That’s a great rate.
  - dheera 4y ago
    No, that's not a great rate. It's only "$100K worth" because some other rich bums have collectively occupied and bought multiple houses that they don't live in and increased the price of land, AND lobbied for no more housing to be built to artifically keep the market price high. They treat housing as an investment, rather than a dwelling, which is exactly what's being discussed here. It's ridiculous that 99%+ of people are not able to buy a reasonable place to live in by 30. We should be subsidizing it for those who cannot afford housing, not charging them $216 more just to line the pockets of the already rich.
    - squokko 4y ago
      If you look at places in America where land is effectively free, a quality house will still cost you $100K minimum. It's not just land rent-seeking, housing structures cost money.
    - sclarisse 4y ago
      It sounds like your main objection is to the price of the house. That might indeed be pretty terrible. The answer is to build more houses in places that we need them, or extend the alternatives. (And we would, as a society, save for the barriers that are put up.) But opportunity costs are real. The time value of money is a thing. If you distort the price of capital, then capital is misallocated, and society ends up with overbuilt nonsense like McMansions in Stockton that it didn’t ever need, as in 2007, and other damaging bubbles. 2.6% is dirt cheap for money. If anything it’s way too cheap, and encourages excess demand, raising prices all around.
dfxm12 4y ago
What sucks is a lot of young renters with steady jobs can afford to pay off a mortgage month to month, but they just can't afford that down payment (especially the 20% needed so as to not need to get mortgage insurance)! I was in that position for a while. Every time it seemed like I could afford to put that money down, the housing prices went up! It took a handful of years of renting cheap places (with roommates), living with my parents when I could and getting a few raises at work that I could finally save up enough for a down payment.
- SoftTalker 4y ago
  That’s normal. I bought my first house in the early 1990s. Saving the down payment was tough. I lived in a real shithole apartment, anything nice and the rent ate up too much of my cash flow. And I I had to pay PMI, but the monthly payment was still cheaper than rent.
  - uoaei 4y ago
    Normative statements don't hold much weight for justifying why things are the way they are.
    - nostromo 4y ago
      Downpayments need to be substantial because the owner needs to have skin in the game. Otherwise the borrower could walk away from the house and the mortgage with very little downside.
      - Retric 4y ago
        Someone walking away from a house doesn’t destroy the house. The lender’s risk is therefore limited to the difference between purchase price and actual value of the property. Which is something they can hedge or simply not make a loan if they think the property is wildly overvalued.
        sokoloff 4y ago
dangwhy 4y ago
> I am sitting on a 2.6% interest rate mortgage and my prices are set for the next 30 years. I probably work half as hard as he does, if not even less than half. If i follow this correctly. you will work half as hard because your housing costs are set while his will keep increasing ?
- lbotos 4y ago
  I don't think it's "they will work half as hard" but "working a tech desk job is easier". The two thoughts are separate as I read it.
joshocar 4y ago
In general, chefs, and anyone who works in the kitchen, are severally underpaid for the skill and amount of work the job takes. It's long hours in a hot, cramped, very high stress environment for peanuts. Not to mention the terrible hours. I have a very brief stint in the food industry when I was a kid and it was enough for me to say I would never do it as a career.
- lbotos 4y ago
  Is them being underpaid not a function of buyers not willing to pay more for the goods? I'm not under the impression that most restaurateurs are "raking it in" staff be damned. Sure, at the ultra high end, yes, but for most restaurants a chef pay is function of the market, right?
  - lotsofpulp 4y ago
    It is a combination of people willing to work for low pay, and buyers not willing to pay more.
  - jjoonathan 4y ago
    The easy money is sucked out through real estate, not management.
  - carlosjobim 4y ago
    The restaurateurs might be raking it if they own the real estate. If you pay rent for your location you are probably scraping by, and whipping your staff to bring in the money for your landlord. A chef's pay is a function of the market, and that's why everybody is exiting the industry right now. Head chefs and restaurant owners are used to decades of low wages and think it's quite insulting that anybody would dare ask for a better wage. Then they wonder why "nobody wants to work anymore". At the same time, chances of advancing your career are very limited. If you manage to stick around for a few years as a chef, you will already be able to manage your own restaurant, but the salary for that will be just marginally higher. Unless you want to strike it out on your own, and take on massive debt for a business with low margins. Working in a kitchen is the worst career choice a young person can make. If you have that skill, ambition, passion and drive, you will be much better rewarded in any other sector.
treeman79 4y ago
Yep. My rent is 1200 a month more than 4 years ago. 1500 to 2700. Which is on par with entire region. With inflation my budget is drastically tighter than just a few years ago.
steveBK123 4y ago
To be fair, being a chef has never been a well paying role. Read Bourdain's writing on the NYC restaurant scene in the 90s. Hard work, hard drugs and hard life.
- bacchusracine 4y ago
  >Hard work, hard drugs and hard life. Not having read the book I must admit my kneejerk response is to wonder if the latter part could have been avoided by not indulging in the middle part? Not to say that hard work always pays off or anything but drugs are expensive are they not?
  - mypalmike 4y ago
    A lot of restaurant workers I've known in Seattle make like $30K. And no they aren't drug users.
tempsy 4y ago
This is an absurd statement. Median rent in Seattle for a 1 bedroom is $2k. Using the 40x rule someone who makes $80k could easily afford this, which is a low bar for someone with a moderately decent job. Locking in a low rate alone has nothing to do with whether owning is more affordable than renting. The rate could be 0% but with a sales price high ala 2021-2022 buying mania and then adding property taxes, insurance, maintenance, and HOA the vast majority of "high" cost metros have and will continue to be much more expensive to buy in than rent in whether rates go up or down.
- photon12 4y ago
  > $80k could easily afford this, which is a low bar for someone with a moderately decent job. $80k is not a low bar, and this is insulting to really talented people I know stuck in below $40k jobs.
  - troll555 4y ago
    [dead]
  - tempsy 4y ago
    so rent is now considered a massive burden on everyone because someone making the minimum wage cannot easily afford the median rent in the city they live in? that’s not how it works at all
    - AstralStorm 4y ago
      Median means at least half of the people cannot afford it. That means the rent is a massive burden on half of the locals at least, likely many more since the burden does not scale linearly. Second, check median wage and check the distribution of wages compared to house prices. We're talking how many millions of people here?
- distrill 4y ago
  80K is a lot for restaurant work. While $40 an hour is not unheard of in the seattle restaurant area, I would not consider this a low bar to reach in that industry (or many others outside of tech tbh).
jejeyyy77 4y ago
I know people who made good investments in the stock market/crypto that sold at the right time. They are set for life. I also know people who are founders of startups and they grind day in day out but haven't gotten traction (yet?). Luck. Choices. Right time, right place. Such is life.
distrill 4y ago
I feel similar cognitive dissonance every time I compare myself to people I know outside of tech. Pretty much without exception, they work harder jobs than me or my colleagues with worse hours and for a fraction of the income. I don't think my observation is tied to the housing market, other than it being a vehicle to expedite the wealth gap.
- waynesonfire 4y ago
  what are you doing to deal with this?
- nh23423fefe 4y ago
  Do you believe your income is unearned? Or are you just virtue signaling about what the labor market values?
  - yt-sdb 4y ago
    That's quite the either/or.
  - patcon 4y ago
    Bah, "virtue signaling" accusations are such a toxic thought-terminating cliche :/
    - CobrastanJorji 4y ago
      Sometimes people worry that they are a little broken for not feeling compassion or empathy for others, and one way to feel better is to decide that anyone who does feel empathy is a liar engaged in virtue signaling. "It's not that I am wrong for not caring for the downtrodden, it's that neither of us cares, but I am honest about it and you are a liar."
    - lifeformed 4y ago
      Yeah, I find claiming "virtue signaling" to be a kind of virtue signaling in itself.
  - 4y ago
FredPret 4y ago
First let me say that rent and real estate should go way down and Seattle should make it easier for people like your friend to live there. Second, there is no direct connection between work done, value added + money earned. The connection is a loose correlation at best. As an example, you can do back-breaking labour painstakingly paving roads with one cobblestone at a time, 16 hours a day, for decades. Or you can write a dozen lines of code that speeds up a critical business process. One is super hard and makes little difference in the world, and thus pays almost nothing. The other is easy if you know how and adds enough value that there's scope for lots of money to be involved.
- theGnuMe 4y ago
  I dunno, if that paver got a royalty for ever car that used his road then he would be very rich!
highwaylights 4y ago
This astonishes me about the US real estate market and is something I was only educated to on HN in the last week or so. I had absolutely no idea that 30 year fixed mortgages were not only widely available but the common standard there.
- hnuser847 4y ago
  It’s because our federal government purchases the majority of residential mortgages, and therefore indirectly sets the standard for the entire market. It’s a major reason why real estate is such an attractive investment.
  - Nemo_bis 4y ago
    Yes. The problem with the article is that it focuses on the value of the asset but forgets the costs. The entire system is stacked in favor of home-ownership by means of tax and bank subsidies.
- ska 4y ago
  I can't think of another country that has anything like it, and it's largely because of the government market interference (via Fannie/Freddy especially) It's going to continue to have some weird knock on effects.
  - thatfrenchguy 4y ago
    France has fixed rate mortgages
    - kazen44 4y ago
      So has the netherlands. (although getting a 30 year long one might be hard, 20 years is far more common).
    - highwaylights 4y ago
      That are fixed to 30 years out? This is legitimately fascinating to me that someone would offer that deal.
Firmwarrior 4y ago
Yeah, man. My friend lived in Capital Hill back in the early 2000s and was able to keep ahead of the rent on his comically small apartment just working part time Nowadays, though, Seattle residents not making obscene tech money have to either live in a submarine-esque cramped environment or spend 2-4 hours commuting every day
treis 4y ago
The solution in the past was for people to move to a different city. Migration is way down compared to generations past and continues to fall: https://www.pewresearch.org/fact-tank/2021/12/16/in-2020-fewer-americans-moved-exodus-from-cities-slowed/ https://www.pewresearch.org/fact-tank/2021/12/16/in-2020-few... The change in city living is also a big difference. Cities used to have parts of the city with the lowest cost of living in the metro area. Things like boarding houses and single room apartments w/ shared bathrooms & kitchens. That's no longer the case in a lot of cities. Places like Seattle and SF are comprised of pretty much all expensive places to live. That squeezes poor people more since they often have to rely on public transportation and can't take advantage of cheaper suburban living.
- aeternum 4y ago
  It is strange that it is easier than ever to move and stay connected yet most people don't.
  - anigbrowl 4y ago
    It is not strange: moving is more expensive than it used to be, and the odds of being able to move somewhere that's cheaper to live without taking a proportional or greater hit to your income are low. Staying connected with other people is hardly the only determining factor. Lots of people traditionally moved because they didn't want to stay connected with a place, and figured thre would be better opportunities elsewhere.
- NineStarPoint 4y ago
  It’s worth noting that these stats don’t show a difference in moving between cities, but between residences. And if you do look at stats showing moves between counties, those have been fairly flat going back to at least 2005 (I couldn’t find data going back farther). Which is to say that it seems people find less reason to move from one house to another where they already live than they used to. I expect this is because the difference between your current house and a better house has become substantially more expensive than it used to be, making it harder for people to improve their standard of living over time.
Kon-Peki 4y ago
> Capitol Hill, Seattle My cousin owns a mansion in Capitol Hill. Because she was a broke-ass student at UW and couldn't afford rent. Back in the 1980s, buying a house there was seen as a crazy, insanely risky thing to do and likely to end up in death. The modern equivalent is the area around 105th and Euclid in Cleveland, near Case Western and the Cleveland Clinic. 150 years ago, that was the wealthiest neighborhood in the entire United States, now you are though to be insane to want to buy a house there. But if you did, would you end up with Capitol-Hill like appreciation in 40 years???
- harambae 4y ago
  > But if you did, would you end up with Capitol-Hill like appreciation in 40 years??? My friend recently applied this same concept in a very rough area of South Bend, Indiana buying a house with bullet holes in the side using the same general logic ("it'll get gentrified someday"). The issue he's running into is that it turns out a city doesn't have to charge you property taxes on the actual sale price (which was only $3k) but can charge you property taxes on a higher amount of their choosing ($40k I think he said) in order to encourage revitalization and not just hoarding of slum houses, probably. He's trying to fight that property tax assessment, but I'm not a lawyer and neither is he and he'll probably lose. In which case the holding costs defeat his whole plan.
  - chii 4y ago
    > can charge you property taxes on a higher amount of their choosing i think it should be that if they choose the price, then they must also be obliged buy at that price, in lieu of having the tax paid.
lvl102 4y ago
Meanwhile some mainland Chinese 18yo drops in with a bag full of cash to buy a place outright. Something is very wrong with that picture for Americans.
nineplay 4y ago
People aren't paid by how hard they work, they're paid by how much money they generate and how hard they are to replace. A head chef might be hard to replace but popular bars and restaurants are not, as we saw during Covid. They have often been replaced by people deciding to save money and eat at home. Your cognitive dissonance isn't unusual but I think it does a disservice to our ability to have productive discussions on any number of issues. Whenever issues come up of who deserves to make more or less, they get bogged down with who works harder and who's work is more meaningful. It's economics and it starts and ends with raw numbers. Acknowledge that first, then move on to how to make it better.
- z3c0 4y ago
  > It's economics and it starts and ends with raw numbers. No, it starts and ends with peoples' lives and how much of it they must expend to keep it going. There are no such thing as "raw numbers".
  - kazen44 4y ago
    also, economics isn't a hard science. We as a society can define how our economy looks like, it is not some hard defined concept like the speed of light or the very basic principles of mathematics. Economics is a soft science, and we should treat it is suchs. The raw numbers don't say much, expect the result of how we have shaped our economy. There is very little preventing us from changing the way the housing market is structured in a real, hard fact kind of sense.
- dcre 4y ago
  There's no reason to want to make it better (or understand it at all) unless you're also thinking about something besides the raw numbers.
  - nineplay 4y ago
    There's no way to make it better if you don't start with the root cause.
e40 4y ago
Yeah, my mortgage is $800 for a 2,000 sq ft house and my son's rent for 1/2 of a 1 bdrm apt is $1700. The situation is completely out of control. (We're both in CA.)
- gwright 4y ago
  I'm not saying there isn't a disparity but a comparison like this would need to include taxes, maintenance, and utilities on top of the mortgage to be comparable to a rent (well utilities may or may not be included).
  - goosinmouse 4y ago
    And at the end of 3 years the homeowner will have 3 years of equity and the renter will have nothing.
    - pc86 4y ago
      And the homeowner has to stay there unless they can get someone to buy it, while the renter can just leave. They're completely different situations.
- fxtentacle 4y ago
  For comparison, in northern Germany one can rent a 1000 sq ft house + 1000 sq ft garden in walking distance from offices, supermarkets, restaurants, etc. for about $1000 cold per month. Sounds like CA is 5x more expensive for young people. But salaries are "only" 2x to 3x those of Germany.
  - deleted 4y ago
    [deleted]
Eumenes 4y ago
This means nothing to me without having data on your life choices
cornholio 4y ago
But the problem of your friend is not that you treat your house as an investment. By definition, if people "invest" in goods that can be produced at a certain price, then production should kick in and restore balance. In a functional housing market you shouldn't be able to get a better appreciation of housing than the inflation rate, except for perhaps some very limited and irreplaceble houses in the Hamptons or designed by famous architects. Housing should behave much like the painting market: a few are worth millions, but everybody can get a cheap painting for their living room because more painters are born every day. So the actual problem that enables this housing pyramid scheme is the lack of production and the entrenched policies of class and race discrimination in real estate development. Existing homeowners rationally want to exclude builders away from their neighborhoods to keep supply limited, so they are politically fighting for restrictive legislation. This problem can only be solved politically, with the state taking a major role in the supply of housing.
- cozzyd 4y ago
  Aren't condos basically illegal in many places? That's at least part of the problem, since obviously single family homes can't sprawl forever
- pdonis 4y ago
  > This problem can only be solved politically, with the state taking a major role in the supply of housing The state already takes a major role in the supply of housing, as you yourself acknowledge. That's the problem, not the solution.
  - cornholio 4y ago
    The upper levels of government can and should correct the failures of the lower levels which are captive to local homeowner interests. The ideea that you can eject the state from regulating the use of a resource with so many externalities is a pipe dream, you either get some sort of favela or the residents re-invent a much more exclusionary and bigoted version of the state, for example the HOA.
    - 4y ago
greenie_beans 4y ago
this is a good example of the myth of bootstraps. i bet you can find a response to this comment that says, "well your friend should find another job or move to a city with a lower cost of living."
hintymad 4y ago
Supply and demand is a big issue too. Take Bay Area as an example. The number of newly minted millionaire families every year on average exceeds the number of newly added houses around those job centers. In the meantime, we've been having an asset inflation in the past 10+ years. As a result, the housing cost in the bay area just keeps climbing up. This has serious consequences too, as such ridiculous housing cost drives away excellent teachers, cops, and etc.
gknapp 4y ago
I know this is anecdotal, but whenever I hear these stories, I'm curious about the details. A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. Finding apartments off Broadway in Cap Hill, I can see that studios, though relatively expensive, range around $1.5-2k a month. An income tax calculator estimates about a 22% total tax bracket and a monthly adjusted income of just over 6k. To me, that means that this person is falling right around 33% of their income devoted towards housing, which seems typical. What am I missing?
- Robotbeat 4y ago
  “House poor” was typically having to pay at least 25% of your take-home income on housing.
  - gambiting 4y ago
    Sure but obviously that number needs some common sense, right. To make a clearly ridiculous example - if you were making 100k a month and paying 25k for rent you wouldn't be poor in any possible meaning of that word. If you bring home 6k a month after taxes, and after rent you're left with 4.5k, I'd also argue that's not "barely making ends meet". That leaves a very comfortable breathing room that is unimaginable luxury for most of the world.
    - llbeansandrice 4y ago
      Now add on: - All forms of insurance - saving for retirement - Rising food costs - Any Healthcare expenses - Car costs - Child care - Subscriptions (phone, internet) - Utilities All in Seattle
      - deleted 4y ago
        [deleted]
      - gambiting 4y ago
        If you can't fit all of that in four and a half thousand dollars then I don't know what to tell you. I'll repeat myself - someone who has 4.5k left after paying rent is not struggling to make ends meet by any definition of the word, in Seattle or elsewhere.
sircastor 4y ago
I had a coworker whose previous career had been as a pastry chef. She worked at a hotel and told me that she'd topped out for income and it was somewhere around $50k/year. After learning to program (and I think she did a boot camp in the earlier days) she started programming. She now programs (not, I think in the finance part of the company though) for an investment firm you've heard of. She is easily past 6 figures.
hnburnsy 4y ago
Your property taxes and homeowner's insurance costs are not 'set'.
yieldcrv 4y ago
> I have a lot of cognitive dissonance associated with that. Play the cards you're dealt. Rate of capital is intended to exceed rate of labor. If you're from a working class background, its common to think more labor = more rate of labor .... and that's it. Not how the higher rate transitions into more capital earning more than the labor.
angarg12 4y ago
I'm a new immigrant to the US, and housing is my single biggest worry together with my work visa. Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder. Even old, basic houses in our suburbs outside town go for ~$1M. I spend an inordinate amount of mental energy calculating how we can jump into the property ladder as quickly and safely as possible. My current plan involves saving for a few years and dump a good chunk of cash into a down payment; it doesn't seem we could ever afford a property otherwise. I wonder how property prices affect "the american dream". It's baffling to me that I'm so worried about housing while making a top ~5% income.
- turtlebits 4y ago
  I'm not sure if I believe this. The places you "want" to live may cost 1M+, but I refuse to believe that if you just go another 15 minutes out (or add 15 mins to your commute), you can't get something for 2/3 of the price.
  - swearwolf 4y ago
    In the greater Seattle area you need to travel quite far out to cut the price by any significant amount. There are some very basic suburban houses in Bellevue, Kirkland and Issaquah selling for upwards of $2 million, and those are a good 15-20 miles away from the city itself. If you don’t believe it, pull up Zillow or Redfin and set a price threshold under $1M and see how many listings instantly disappear. If you want a good laugh, take a look at what’s left.
- int_19h 4y ago
  You can get cheaper housing further east from Seattle, past Issaquah (Preston, Snoqualmie, North Bend, Fall City, Carnation etc) if 40-50 minute commute is acceptable. Snoqualmie in particular is seeing a lot of new development in the past few years because of this.
- eddsh1994 4y ago
pb7 4y ago
Pay is not exclusively a function of how hard you work.
adamrezich 4y ago
it's interesting that so many here are quick to jump to the generalization that there's some sort of national problem here, when it's really just the big urban centers (and some other outliers) that have the problem. I just bought a three-bedroom house for $300k here in the Black Hills of South Dakota, where housing prices are (relatively) skyrocketing due to the local Air Force base expanding, yet this was entirely achievable with my modest <$70k salary working as a programmer for the local public school district. the United States is a huge country with tons of options for places to live, and I've never understood the apparent need to live in big population centers, even after trying it out myself for some years. if the big cities are making it miserable to live there if your income isn't ridiculously massive, then why stay? why not give one of the other bazillion places to live in the US a try? sure, you may have to deal with less-than-optimally-temperate weather. sure, you may not have access to a rich variety of ethnic dining options. sure, you may not have access to all sorts of trendy places to shop/dine/be entertained. but why is trading all of that away to have a decent place to live so unthinkable for so many? I've rented for the past 13 years, and now I finally have a home to call my own, and I wouldn't trade that for anything.
donkey-hotei 4y ago
Totally relate with this feeling.
silverlake 4y ago
People don't seem to understand supply vs. demand. More people are moving to cities. Cities have onerous zoning laws. The construction industry is still skittish after 2008's meltdown. Enormous demand && limited supply in cities == high prices. My hometown in the midwest is selling homes for $100/sqft. Dallas suburbs are $150/sqft. Manhattan is over $2000/sqft.
glonq 4y ago
My daughter recently moved from Vancouver BC (which sucks for housing) to Seattle, which sucks for housing. Despite having a good university degree and a decent-paying white-collar job, she gets by in Seattle thanks to couch surfing and pet-sitting. It beats the alternative -- sharing with numerous flaky/crazy roommates.
deleted 4y ago
[deleted]
JenrHywy 4y ago
Locking in 2.6% for 30 years, from an outsider (Aus) perspective, seems insane. That must inflate prices like no one's business. Here, the longest easily available fixed term is 5 years, and you usually pay a decent rate premium (maybe ~2% above the current variable rate).
xen2xen1 4y ago
My dad worked 33 years as a bridge builder. I would meet random people who would tell me they were in awe of his skill. It took me 3 years or so out of a community college with an IT degree to match his pay.
emars 4y ago
It sounds like you are experiencing some guilt about the differences in your financial stability compared to your friend who is working hard as a head chef. It's important to recognize that the way our society values certain jobs and industries is not always fair or reflective of the hard work and dedication that individuals put into their work. One way to alleviate some of that guilt might be to give back to your community in ways that help support those who are not as fortunate.

mdgrech23 4y ago

I majored in economics and it still boggles my mind what we make as software engineers versus the guy who unclogged my sewer drain allowing me to use the toilet.

codegeek 4y ago
You will be surprised how much good plumbers make in the USA. You probably used a bad example. Source: I know my trusted plumber makes well over six figures a year and he cannot take all calls. I asked him once if he has problems generating leads and he smiled saying "I have too much business that I turn people away". He is a "master plumber" which these days is not easy to get certified for in many states. He told me he cannot find enough skilled master plumbers to help him (state of NJ).
- dangwhy 4y ago
  Yes I have family who make ~100k in chicago.
- ominous_prime 4y ago
  You will be surprised how much good software engineers make in the USA -- still many multiples of most successful plumbers, and without the long-term physical consequences of that type of labor. Yes, there's still going to be better examples to highlight the disparity.
  - WaitWaitWha 4y ago
    There are no comparable "long-term physical consequences of that type of labor" software engineers do?
    - ominous_prime 4y ago
      Maybe? Anecdotal I guess, but I've met more plumbers with chronic knee and back problems than software engineers. But being a plumber in the US isn't too physically demanding, and makes OK money, so it's probably the example of disparity the GP was trying to highlight.
      - WaitWaitWha 4y ago
        A software programmer will be front of a computer screen, 8 hours, 5 days a week in a sedentary position - they are at risk for problems of eyes, back & neck problems, carpal tunnel, weight gain, anxiety, heart disease, insomnia, deep vein thrombosis just top of my head.
        anonymouskimmer 4y ago
        They technically have the option of a chording keyboard/mouse and a wearable computer. Or at the very least a standing desk (or even a treadmill desk). Along with special glasses or monitor filters. How does a plumber avoid kneeling?
        WaitWaitWha 4y ago
        > How does a plumber avoid kneeling? They technically have the option of reducing weight, exercise, proper shoes, knee braces and knee pads, kneeling pads, and such. What I am suggesting is that both (all?) jobs have their own health related demons.
        pc86 4y ago
        Yes in the way that someone with a multi-million dollar trust fund who wants to buy a nicer car or bigger house and someone working for minimum wage both have money problems. Especially when working from home any health-related dangers around software development can be all but completely eliminated. This isn't even remotely comparable to any of the health or occupational risks in the trades.
- vkou 4y ago
  [flagged]
  - jedberg 4y ago
    Master plumbers are still plumbers, they still get down and get their hands dirty. My guy is also a master plumber, and often works alone. When he does have help, he's often doing the hardest work, the other guy is just handing him pipes and tools.
- mawadev 4y ago
  This is always the same logic, where a plumber makes a ton of money. The reality is that your trusted plumber is actually a business owner. If you start out as a plumber, you need a ton of work to get to this spot by working for someone else for a bad wage. Meanwhile as a dev, I can comfortably work for someone else and don't have all the risk.
  - bumby 4y ago
    You might need to define a “bad” wage. According to BLS, the median wage for a plumber is slightly above the median wage in the US as a whole. I do think some of the inflated values of some jobs is they are somewhat opaque, while the stuff of jobs like plumbing is easier to at least conceptualize, even if the work itself still requires skill and care. It’s easier for a BS job to inflate its importance if people don’t know exactly how it works.
- spacedcowboy 4y ago
  The thing is that top-end software engineers in a FAANG company (the equivalent of a master-plumber / master-electriction / etc.) are either pushing towards 7 figures or have already got there - in total comp, not in wages, but still. I'm an ICT5 at Apple (not the best-paying, but hey, less layoffs) and I reported ~$750k last year. There are ICT levels going up to 9...
  - smalley 4y ago
    Wow, I feel like you must have a pretty unique specialization because you are doing incredibly well for ICT5 (Congrats!) There are ICT levels above 6 but I feel like in practice those are very rare and you could easily spend decades working and not make it above ICT6 in many divisions.
voisin 4y ago
The fruits of your labour can be sold continuously at low marginal cost. His cannot.
- anonymouskimmer 4y ago
  I don't know. An unclogged pipe is used multiple times per day.
  - lotsofpulp 4y ago
    If plumbers can figure out how to sell flushing as a service, this whole disparity can be resolved. They might need to hire a software engineer though.
    - anonymouskimmer 4y ago
      :D Your comment got a chuckle out loud. And then I saw your user name and can't stop.
  - layer8 4y ago
    Plumbers should get into the PaaS business (pipes as a service).
  - vjk800 4y ago
    A point that used to be made a lot in copyright wars discussions a decade ago was that most "old fashioned" professions (like plumber, carpenter, architect, etc.) only get paid once, not every time someone uses their product, whereas creators of digital goods somehow are entitled to get money every time someone uses their creation. Super star musicians and software engineers making obscene amounts of money is a direct result of this.
    - AstralStorm 4y ago
      The ignored corollary is that the market for these products will get saturated much more quickly, and thus the product needs to change to stay relevant. Plus there's a low(ish) bar to entry. How long has a quality carpentry been sold now? Cost of entry is also relatively stable. Music styles change every decade now and it is speeding up as marginal costs of entry fall. Likely similar with other entertainment, which is why every entertainment corporation is now looking for lock-in.
anonymouskimmer 4y ago
Your job is incredibly tedious and boring dealing as it does with human-constructed Kafka-esque instructional systems. You're effectively psychiatrists for machines. Having taken a couple of introductory programming courses, and thrown together some VBScript and some R markdown, I'm fine with you making the big bucks.
czbond 4y ago
Will GPT-6 replace a plumber? I think not. Will GPT-6 replace some subset 10..80% of engineering, law, medical hours? absolutely
- __derek__ 4y ago
  Wait, why 6?
  - czbond 4y ago
    Picked a higher number to not be scary. "supposedly" GPT-4 can pass the bar exam
    - __derek__ 4y ago
      Gotcha. I thought maybe they were planning to skip GPT-5 or something. That's actually a pretty low bar, FWIW. (rimshot) Law students spend a few months in bar prep to memorize a bunch of crap that doesn't even apply to their real jobs. Maybe the AI will encourage bar associations to finally ditch it, a development that gained some steam during the pandemic.[1] [1]: https://www.reuters.com/legal/legalindustry/bar-exam-who-needs-it-2022-08-04/ https://www.reuters.com/legal/legalindustry/bar-exam-who-nee...
      - Ekaros 4y ago
        Bar exam has quite little to do with actual legal work. Or being effective in it. I'm not actually surprised that a AI-model could pass it. The corpus is well known and well defined and test directly draws from that.
- gwright 4y ago
  I'm not so sure. There is a Planet Money episode that talks about the effect the digital spreadsheet had on accounting employment: > Thanks to spreadsheets, there are 400,000 fewer accounting clerks than in 1980, but 600,000 more regular accountants. Might something like GPT-6 cause employment to shift to higher value job responsibilities? https://www.npr.org/sections/money/2015/02/25/389027988/episode-606-spreadsheets https://www.npr.org/sections/money/2015/02/25/389027988/epis...

lotsofpulp 4y ago

Cognitive dissonance means harboring contradicting thoughts. The difference in you and your friend’s situation is caused by the fact that they are selling labor which has a much lower price than the labor you are selling. This is not contradictory, just a consequence of supply and demand.

photon12 4y ago
Yes, there is an inconsistency in the amount of effort expended to survive versus the outcomes of that effort. I can't reconcile them in my head. I'm watching my friend trying not to physically deteriorate and have some modicum of comfort while I sit here on my couch living off savings from the job I recently quit. Nothing I do can be so much more valuable than what he does.
- czbond 4y ago
  I mean... that's life. What schools should teach is not just "here is a career that matches you're skills" - but more so, "if you choose this career, these are the most probable outcomes and life paths you'll end up in" If AI takes engineering, medical, and law work away from those professionals - they too could have spent many hours to learn, to then earn little. Every human has worth, but we all value the type of work differently.
  - giraffe_lady 4y ago
    "that's life" like this is an inevitable fact of the universe we must live with? No, this is the world we have made. To some extent you have to come to terms with it and find a place to live within it, yes. But those terms can be "this sucks, this is wrong, it should change" which it seems that's where the other commenter is headed.
    - czbond 4y ago
      I don't disagree with your sentiment and the need for that effort, but the probability path is that since the medieval times or longer this has been attempted with no long term success. Make bets on the most probable until real change has occurred.

ep103 4y ago

My rent for my cockroach invested, 150 sq ft apartment is larger than my parent's mortgage for their suburban McMansion about 45m-1h away, and my rent is absolutely on the cheap side for a 1bd room in the area.

hinkley 4y ago
In Seattle, 45 minutes away is still within the city limits, unless you're right on the edge of the city limits to start with. And if it's toward Everett even that doesn't save you. In traffic I often thought about how when I was a kid we got uprooted to a new school at a bad time to save my dad 45 minutes of commute each way, and how 2 hours a day doesn't sound that awful.
- ep103 4y ago
  Yeah, its 45 without traffic, 1h-1:10 on a normal day, 1.5h during the morning and evening commutes. So they're solidly outside the city radius. The thing is, before I moved in, I did research on 1bdroom apartments within a large radius of the city. And basically, unless I was willing to move to a very unsafe area or very unsafe or clearly problematic apartment, rents simply do not go beneath my current rent price. There seems to be an agreed upon price floor from all landlords, and the only thing that changes as you get further from the city center is the size and quality of the apartment. But that means literally every apartment in about an hour circle of my location is more than my parent's mortgage. At least the roaches and I don't have major commuting costs as well.
  - WalterBright 4y ago
    > There seems to be an agreed upon price floor from all landlords I doubt there's collusion. Being a landlord is expensive, and they're not going to set rents at loss levels.
    - vabavhasb 4y ago
      https://news.ycombinator.com/item?id=34926683 https://news.ycombinator.com/item?id=34926683 > Specifically, every morning, RealPage provides participating Lessors with recommended price levels. ... If Lessors wish to diverge from the “approved pricing” they must submit reasoning for doing so and await approval. ... But RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating Lessors must adopt RealPage’s pricing at least 80% of the time.

dheera 4y ago

[flagged]

sclarisse 4y ago
Who exactly is being “shafted” by occupying $100,000 worth of house/land, that has not otherwise been paid for, for $216 a month? That’s a great rate.
- dheera 4y ago
  No, that's not a great rate. It's only "$100K worth" because some other rich bums have collectively occupied and bought multiple houses that they don't live in and increased the price of land, AND lobbied for no more housing to be built to artifically keep the market price high. They treat housing as an investment, rather than a dwelling, which is exactly what's being discussed here. It's ridiculous that 99%+ of people are not able to buy a reasonable place to live in by 30. We should be subsidizing it for those who cannot afford housing, not charging them $216 more just to line the pockets of the already rich.
  - squokko 4y ago
    If you look at places in America where land is effectively free, a quality house will still cost you $100K minimum. It's not just land rent-seeking, housing structures cost money.
  - sclarisse 4y ago
    It sounds like your main objection is to the price of the house. That might indeed be pretty terrible. The answer is to build more houses in places that we need them, or extend the alternatives. (And we would, as a society, save for the barriers that are put up.) But opportunity costs are real. The time value of money is a thing. If you distort the price of capital, then capital is misallocated, and society ends up with overbuilt nonsense like McMansions in Stockton that it didn’t ever need, as in 2007, and other damaging bubbles. 2.6% is dirt cheap for money. If anything it’s way too cheap, and encourages excess demand, raising prices all around.

dfxm12 4y ago

What sucks is a lot of young renters with steady jobs can afford to pay off a mortgage month to month, but they just can't afford that down payment (especially the 20% needed so as to not need to get mortgage insurance)! I was in that position for a while. Every time it seemed like I could afford to put that money down, the housing prices went up! It took a handful of years of renting cheap places (with roommates), living with my parents when I could and getting a few raises at work that I could finally save up enough for a down payment.

SoftTalker 4y ago
That’s normal. I bought my first house in the early 1990s. Saving the down payment was tough. I lived in a real shithole apartment, anything nice and the rent ate up too much of my cash flow. And I I had to pay PMI, but the monthly payment was still cheaper than rent.
- uoaei 4y ago
  Normative statements don't hold much weight for justifying why things are the way they are.
  - nostromo 4y ago
    Downpayments need to be substantial because the owner needs to have skin in the game. Otherwise the borrower could walk away from the house and the mortgage with very little downside.
    - Retric 4y ago
      Someone walking away from a house doesn’t destroy the house. The lender’s risk is therefore limited to the difference between purchase price and actual value of the property. Which is something they can hedge or simply not make a loan if they think the property is wildly overvalued.
      - sokoloff 4y ago

dangwhy 4y ago

> I am sitting on a 2.6% interest rate mortgage and my prices are set for the next 30 years. I probably work half as hard as he does, if not even less than half. If i follow this correctly. you will work half as hard because your housing costs are set while his will keep increasing ?

lbotos 4y ago
I don't think it's "they will work half as hard" but "working a tech desk job is easier". The two thoughts are separate as I read it.

joshocar 4y ago

In general, chefs, and anyone who works in the kitchen, are severally underpaid for the skill and amount of work the job takes. It's long hours in a hot, cramped, very high stress environment for peanuts. Not to mention the terrible hours. I have a very brief stint in the food industry when I was a kid and it was enough for me to say I would never do it as a career.

lbotos 4y ago
Is them being underpaid not a function of buyers not willing to pay more for the goods? I'm not under the impression that most restaurateurs are "raking it in" staff be damned. Sure, at the ultra high end, yes, but for most restaurants a chef pay is function of the market, right?
- lotsofpulp 4y ago
  It is a combination of people willing to work for low pay, and buyers not willing to pay more.
- jjoonathan 4y ago
  The easy money is sucked out through real estate, not management.
- carlosjobim 4y ago
  The restaurateurs might be raking it if they own the real estate. If you pay rent for your location you are probably scraping by, and whipping your staff to bring in the money for your landlord. A chef's pay is a function of the market, and that's why everybody is exiting the industry right now. Head chefs and restaurant owners are used to decades of low wages and think it's quite insulting that anybody would dare ask for a better wage. Then they wonder why "nobody wants to work anymore". At the same time, chances of advancing your career are very limited. If you manage to stick around for a few years as a chef, you will already be able to manage your own restaurant, but the salary for that will be just marginally higher. Unless you want to strike it out on your own, and take on massive debt for a business with low margins. Working in a kitchen is the worst career choice a young person can make. If you have that skill, ambition, passion and drive, you will be much better rewarded in any other sector.

treeman79 4y ago

Yep. My rent is 1200 a month more than 4 years ago. 1500 to 2700. Which is on par with entire region. With inflation my budget is drastically tighter than just a few years ago.

steveBK123 4y ago

To be fair, being a chef has never been a well paying role. Read Bourdain's writing on the NYC restaurant scene in the 90s. Hard work, hard drugs and hard life.

bacchusracine 4y ago
>Hard work, hard drugs and hard life. Not having read the book I must admit my kneejerk response is to wonder if the latter part could have been avoided by not indulging in the middle part? Not to say that hard work always pays off or anything but drugs are expensive are they not?
- mypalmike 4y ago
  A lot of restaurant workers I've known in Seattle make like $30K. And no they aren't drug users.

tempsy 4y ago

This is an absurd statement. Median rent in Seattle for a 1 bedroom is $2k. Using the 40x rule someone who makes $80k could easily afford this, which is a low bar for someone with a moderately decent job. Locking in a low rate alone has nothing to do with whether owning is more affordable than renting. The rate could be 0% but with a sales price high ala 2021-2022 buying mania and then adding property taxes, insurance, maintenance, and HOA the vast majority of "high" cost metros have and will continue to be much more expensive to buy in than rent in whether rates go up or down.

photon12 4y ago
> $80k could easily afford this, which is a low bar for someone with a moderately decent job. $80k is not a low bar, and this is insulting to really talented people I know stuck in below $40k jobs.
- troll555 4y ago
  [dead]
- tempsy 4y ago
  so rent is now considered a massive burden on everyone because someone making the minimum wage cannot easily afford the median rent in the city they live in? that’s not how it works at all
  - AstralStorm 4y ago
    Median means at least half of the people cannot afford it. That means the rent is a massive burden on half of the locals at least, likely many more since the burden does not scale linearly. Second, check median wage and check the distribution of wages compared to house prices. We're talking how many millions of people here?
distrill 4y ago
80K is a lot for restaurant work. While $40 an hour is not unheard of in the seattle restaurant area, I would not consider this a low bar to reach in that industry (or many others outside of tech tbh).

jejeyyy77 4y ago

I know people who made good investments in the stock market/crypto that sold at the right time. They are set for life. I also know people who are founders of startups and they grind day in day out but haven't gotten traction (yet?). Luck. Choices. Right time, right place. Such is life.

distrill 4y ago

I feel similar cognitive dissonance every time I compare myself to people I know outside of tech. Pretty much without exception, they work harder jobs than me or my colleagues with worse hours and for a fraction of the income. I don't think my observation is tied to the housing market, other than it being a vehicle to expedite the wealth gap.

waynesonfire 4y ago
what are you doing to deal with this?
nh23423fefe 4y ago
Do you believe your income is unearned? Or are you just virtue signaling about what the labor market values?
- yt-sdb 4y ago
  That's quite the either/or.
- patcon 4y ago
  Bah, "virtue signaling" accusations are such a toxic thought-terminating cliche :/
  - CobrastanJorji 4y ago
    Sometimes people worry that they are a little broken for not feeling compassion or empathy for others, and one way to feel better is to decide that anyone who does feel empathy is a liar engaged in virtue signaling. "It's not that I am wrong for not caring for the downtrodden, it's that neither of us cares, but I am honest about it and you are a liar."
  - lifeformed 4y ago
    Yeah, I find claiming "virtue signaling" to be a kind of virtue signaling in itself.
- 4y ago

FredPret 4y ago

First let me say that rent and real estate should go way down and Seattle should make it easier for people like your friend to live there. Second, there is no direct connection between work done, value added + money earned. The connection is a loose correlation at best. As an example, you can do back-breaking labour painstakingly paving roads with one cobblestone at a time, 16 hours a day, for decades. Or you can write a dozen lines of code that speeds up a critical business process. One is super hard and makes little difference in the world, and thus pays almost nothing. The other is easy if you know how and adds enough value that there's scope for lots of money to be involved.

theGnuMe 4y ago
I dunno, if that paver got a royalty for ever car that used his road then he would be very rich!

highwaylights 4y ago

This astonishes me about the US real estate market and is something I was only educated to on HN in the last week or so. I had absolutely no idea that 30 year fixed mortgages were not only widely available but the common standard there.

hnuser847 4y ago
It’s because our federal government purchases the majority of residential mortgages, and therefore indirectly sets the standard for the entire market. It’s a major reason why real estate is such an attractive investment.
- Nemo_bis 4y ago
  Yes. The problem with the article is that it focuses on the value of the asset but forgets the costs. The entire system is stacked in favor of home-ownership by means of tax and bank subsidies.
ska 4y ago
I can't think of another country that has anything like it, and it's largely because of the government market interference (via Fannie/Freddy especially) It's going to continue to have some weird knock on effects.
- thatfrenchguy 4y ago
  France has fixed rate mortgages
  - kazen44 4y ago
    So has the netherlands. (although getting a 30 year long one might be hard, 20 years is far more common).
  - highwaylights 4y ago
    That are fixed to 30 years out? This is legitimately fascinating to me that someone would offer that deal.

Firmwarrior 4y ago

Yeah, man. My friend lived in Capital Hill back in the early 2000s and was able to keep ahead of the rent on his comically small apartment just working part time Nowadays, though, Seattle residents not making obscene tech money have to either live in a submarine-esque cramped environment or spend 2-4 hours commuting every day

treis 4y ago

The solution in the past was for people to move to a different city. Migration is way down compared to generations past and continues to fall: https://www.pewresearch.org/fact-tank/2021/12/16/in-2020-fewer-americans-moved-exodus-from-cities-slowed/ https://www.pewresearch.org/fact-tank/2021/12/16/in-2020-few... The change in city living is also a big difference. Cities used to have parts of the city with the lowest cost of living in the metro area. Things like boarding houses and single room apartments w/ shared bathrooms & kitchens. That's no longer the case in a lot of cities. Places like Seattle and SF are comprised of pretty much all expensive places to live. That squeezes poor people more since they often have to rely on public transportation and can't take advantage of cheaper suburban living.

aeternum 4y ago
It is strange that it is easier than ever to move and stay connected yet most people don't.
- anigbrowl 4y ago
  It is not strange: moving is more expensive than it used to be, and the odds of being able to move somewhere that's cheaper to live without taking a proportional or greater hit to your income are low. Staying connected with other people is hardly the only determining factor. Lots of people traditionally moved because they didn't want to stay connected with a place, and figured thre would be better opportunities elsewhere.
NineStarPoint 4y ago
It’s worth noting that these stats don’t show a difference in moving between cities, but between residences. And if you do look at stats showing moves between counties, those have been fairly flat going back to at least 2005 (I couldn’t find data going back farther). Which is to say that it seems people find less reason to move from one house to another where they already live than they used to. I expect this is because the difference between your current house and a better house has become substantially more expensive than it used to be, making it harder for people to improve their standard of living over time.

Kon-Peki 4y ago

> Capitol Hill, Seattle My cousin owns a mansion in Capitol Hill. Because she was a broke-ass student at UW and couldn't afford rent. Back in the 1980s, buying a house there was seen as a crazy, insanely risky thing to do and likely to end up in death. The modern equivalent is the area around 105th and Euclid in Cleveland, near Case Western and the Cleveland Clinic. 150 years ago, that was the wealthiest neighborhood in the entire United States, now you are though to be insane to want to buy a house there. But if you did, would you end up with Capitol-Hill like appreciation in 40 years???

harambae 4y ago
> But if you did, would you end up with Capitol-Hill like appreciation in 40 years??? My friend recently applied this same concept in a very rough area of South Bend, Indiana buying a house with bullet holes in the side using the same general logic ("it'll get gentrified someday"). The issue he's running into is that it turns out a city doesn't have to charge you property taxes on the actual sale price (which was only $3k) but can charge you property taxes on a higher amount of their choosing ($40k I think he said) in order to encourage revitalization and not just hoarding of slum houses, probably. He's trying to fight that property tax assessment, but I'm not a lawyer and neither is he and he'll probably lose. In which case the holding costs defeat his whole plan.
- chii 4y ago
  > can charge you property taxes on a higher amount of their choosing i think it should be that if they choose the price, then they must also be obliged buy at that price, in lieu of having the tax paid.

lvl102 4y ago

Meanwhile some mainland Chinese 18yo drops in with a bag full of cash to buy a place outright. Something is very wrong with that picture for Americans.

nineplay 4y ago

People aren't paid by how hard they work, they're paid by how much money they generate and how hard they are to replace. A head chef might be hard to replace but popular bars and restaurants are not, as we saw during Covid. They have often been replaced by people deciding to save money and eat at home. Your cognitive dissonance isn't unusual but I think it does a disservice to our ability to have productive discussions on any number of issues. Whenever issues come up of who deserves to make more or less, they get bogged down with who works harder and who's work is more meaningful. It's economics and it starts and ends with raw numbers. Acknowledge that first, then move on to how to make it better.

z3c0 4y ago
> It's economics and it starts and ends with raw numbers. No, it starts and ends with peoples' lives and how much of it they must expend to keep it going. There are no such thing as "raw numbers".
- kazen44 4y ago
  also, economics isn't a hard science. We as a society can define how our economy looks like, it is not some hard defined concept like the speed of light or the very basic principles of mathematics. Economics is a soft science, and we should treat it is suchs. The raw numbers don't say much, expect the result of how we have shaped our economy. There is very little preventing us from changing the way the housing market is structured in a real, hard fact kind of sense.
dcre 4y ago
There's no reason to want to make it better (or understand it at all) unless you're also thinking about something besides the raw numbers.
- nineplay 4y ago
  There's no way to make it better if you don't start with the root cause.

e40 4y ago

Yeah, my mortgage is $800 for a 2,000 sq ft house and my son's rent for 1/2 of a 1 bdrm apt is $1700. The situation is completely out of control. (We're both in CA.)

gwright 4y ago
I'm not saying there isn't a disparity but a comparison like this would need to include taxes, maintenance, and utilities on top of the mortgage to be comparable to a rent (well utilities may or may not be included).
- goosinmouse 4y ago
  And at the end of 3 years the homeowner will have 3 years of equity and the renter will have nothing.
  - pc86 4y ago
    And the homeowner has to stay there unless they can get someone to buy it, while the renter can just leave. They're completely different situations.
fxtentacle 4y ago
For comparison, in northern Germany one can rent a 1000 sq ft house + 1000 sq ft garden in walking distance from offices, supermarkets, restaurants, etc. for about $1000 cold per month. Sounds like CA is 5x more expensive for young people. But salaries are "only" 2x to 3x those of Germany.
- deleted 4y ago
  [deleted]

Eumenes 4y ago

This means nothing to me without having data on your life choices

cornholio 4y ago

But the problem of your friend is not that you treat your house as an investment. By definition, if people "invest" in goods that can be produced at a certain price, then production should kick in and restore balance. In a functional housing market you shouldn't be able to get a better appreciation of housing than the inflation rate, except for perhaps some very limited and irreplaceble houses in the Hamptons or designed by famous architects. Housing should behave much like the painting market: a few are worth millions, but everybody can get a cheap painting for their living room because more painters are born every day. So the actual problem that enables this housing pyramid scheme is the lack of production and the entrenched policies of class and race discrimination in real estate development. Existing homeowners rationally want to exclude builders away from their neighborhoods to keep supply limited, so they are politically fighting for restrictive legislation. This problem can only be solved politically, with the state taking a major role in the supply of housing.

cozzyd 4y ago
Aren't condos basically illegal in many places? That's at least part of the problem, since obviously single family homes can't sprawl forever
pdonis 4y ago
> This problem can only be solved politically, with the state taking a major role in the supply of housing The state already takes a major role in the supply of housing, as you yourself acknowledge. That's the problem, not the solution.
- cornholio 4y ago
  The upper levels of government can and should correct the failures of the lower levels which are captive to local homeowner interests. The ideea that you can eject the state from regulating the use of a resource with so many externalities is a pipe dream, you either get some sort of favela or the residents re-invent a much more exclusionary and bigoted version of the state, for example the HOA.
  - 4y ago

greenie_beans 4y ago

this is a good example of the myth of bootstraps. i bet you can find a response to this comment that says, "well your friend should find another job or move to a city with a lower cost of living."

hintymad 4y ago

Supply and demand is a big issue too. Take Bay Area as an example. The number of newly minted millionaire families every year on average exceeds the number of newly added houses around those job centers. In the meantime, we've been having an asset inflation in the past 10+ years. As a result, the housing cost in the bay area just keeps climbing up. This has serious consequences too, as such ridiculous housing cost drives away excellent teachers, cops, and etc.

gknapp 4y ago

I know this is anecdotal, but whenever I hear these stories, I'm curious about the details. A quick search leads me to believe that head chef pay in Seattle typically ranges from about 90k-110k per year. Finding apartments off Broadway in Cap Hill, I can see that studios, though relatively expensive, range around $1.5-2k a month. An income tax calculator estimates about a 22% total tax bracket and a monthly adjusted income of just over 6k. To me, that means that this person is falling right around 33% of their income devoted towards housing, which seems typical. What am I missing?

Robotbeat 4y ago
“House poor” was typically having to pay at least 25% of your take-home income on housing.
- gambiting 4y ago
  Sure but obviously that number needs some common sense, right. To make a clearly ridiculous example - if you were making 100k a month and paying 25k for rent you wouldn't be poor in any possible meaning of that word. If you bring home 6k a month after taxes, and after rent you're left with 4.5k, I'd also argue that's not "barely making ends meet". That leaves a very comfortable breathing room that is unimaginable luxury for most of the world.
  - llbeansandrice 4y ago
    Now add on: - All forms of insurance - saving for retirement - Rising food costs - Any Healthcare expenses - Car costs - Child care - Subscriptions (phone, internet) - Utilities All in Seattle
    - deleted 4y ago
      [deleted]
    - gambiting 4y ago
      If you can't fit all of that in four and a half thousand dollars then I don't know what to tell you. I'll repeat myself - someone who has 4.5k left after paying rent is not struggling to make ends meet by any definition of the word, in Seattle or elsewhere.

sircastor 4y ago

I had a coworker whose previous career had been as a pastry chef. She worked at a hotel and told me that she'd topped out for income and it was somewhere around $50k/year. After learning to program (and I think she did a boot camp in the earlier days) she started programming. She now programs (not, I think in the finance part of the company though) for an investment firm you've heard of. She is easily past 6 figures.

hnburnsy 4y ago

Your property taxes and homeowner's insurance costs are not 'set'.

yieldcrv 4y ago

> I have a lot of cognitive dissonance associated with that. Play the cards you're dealt. Rate of capital is intended to exceed rate of labor. If you're from a working class background, its common to think more labor = more rate of labor .... and that's it. Not how the higher rate transitions into more capital earning more than the labor.

angarg12 4y ago

I'm a new immigrant to the US, and housing is my single biggest worry together with my work visa. Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder. Even old, basic houses in our suburbs outside town go for ~$1M. I spend an inordinate amount of mental energy calculating how we can jump into the property ladder as quickly and safely as possible. My current plan involves saving for a few years and dump a good chunk of cash into a down payment; it doesn't seem we could ever afford a property otherwise. I wonder how property prices affect "the american dream". It's baffling to me that I'm so worried about housing while making a top ~5% income.

turtlebits 4y ago
I'm not sure if I believe this. The places you "want" to live may cost 1M+, but I refuse to believe that if you just go another 15 minutes out (or add 15 mins to your commute), you can't get something for 2/3 of the price.
- swearwolf 4y ago
  In the greater Seattle area you need to travel quite far out to cut the price by any significant amount. There are some very basic suburban houses in Bellevue, Kirkland and Issaquah selling for upwards of $2 million, and those are a good 15-20 miles away from the city itself. If you don’t believe it, pull up Zillow or Redfin and set a price threshold under $1M and see how many listings instantly disappear. If you want a good laugh, take a look at what’s left.
int_19h 4y ago
You can get cheaper housing further east from Seattle, past Issaquah (Preston, Snoqualmie, North Bend, Fall City, Carnation etc) if 40-50 minute commute is acceptable. Snoqualmie in particular is seeing a lot of new development in the past few years because of this.
eddsh1994 4y ago

pb7 4y ago

Pay is not exclusively a function of how hard you work.

adamrezich 4y ago

it's interesting that so many here are quick to jump to the generalization that there's some sort of national problem here, when it's really just the big urban centers (and some other outliers) that have the problem. I just bought a three-bedroom house for $300k here in the Black Hills of South Dakota, where housing prices are (relatively) skyrocketing due to the local Air Force base expanding, yet this was entirely achievable with my modest <$70k salary working as a programmer for the local public school district. the United States is a huge country with tons of options for places to live, and I've never understood the apparent need to live in big population centers, even after trying it out myself for some years. if the big cities are making it miserable to live there if your income isn't ridiculously massive, then why stay? why not give one of the other bazillion places to live in the US a try? sure, you may have to deal with less-than-optimally-temperate weather. sure, you may not have access to a rich variety of ethnic dining options. sure, you may not have access to all sorts of trendy places to shop/dine/be entertained. but why is trading all of that away to have a decent place to live so unthinkable for so many? I've rented for the past 13 years, and now I finally have a home to call my own, and I wouldn't trade that for anything.

donkey-hotei 4y ago

Totally relate with this feeling.

silverlake 4y ago

People don't seem to understand supply vs. demand. More people are moving to cities. Cities have onerous zoning laws. The construction industry is still skittish after 2008's meltdown. Enormous demand && limited supply in cities == high prices. My hometown in the midwest is selling homes for $100/sqft. Dallas suburbs are $150/sqft. Manhattan is over $2000/sqft.

glonq 4y ago

My daughter recently moved from Vancouver BC (which sucks for housing) to Seattle, which sucks for housing. Despite having a good university degree and a decent-paying white-collar job, she gets by in Seattle thanks to couch surfing and pet-sitting. It beats the alternative -- sharing with numerous flaky/crazy roommates.

deleted 4y ago

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JenrHywy 4y ago

Locking in 2.6% for 30 years, from an outsider (Aus) perspective, seems insane. That must inflate prices like no one's business. Here, the longest easily available fixed term is 5 years, and you usually pay a decent rate premium (maybe ~2% above the current variable rate).

xen2xen1 4y ago

My dad worked 33 years as a bridge builder. I would meet random people who would tell me they were in awe of his skill. It took me 3 years or so out of a community college with an IT degree to match his pay.

emars 4y ago

It sounds like you are experiencing some guilt about the differences in your financial stability compared to your friend who is working hard as a head chef. It's important to recognize that the way our society values certain jobs and industries is not always fair or reflective of the hard work and dedication that individuals put into their work. One way to alleviate some of that guilt might be to give back to your community in ways that help support those who are not as fortunate.