32 ms·

Housing should be affordable except for when I sell my house for $1M

332 points by baron816 4y ago

steve76 4y ago
[dead]
wildrhythms 4y ago
Housing should have never been allowed to be an 'investment' in the first place. We've known that, but I think these chickens are finally coming home to roost.
- mupuff1234 4y ago
  I think for a good functioning economy we do want housing prices to generally go up, but in a much more modest and controlled way - so in that way it should be viewed as an appreciating asset. What it shouldn't be is a speculative investment for companies, non residents or wealthy individuals.
  - Denvercoder9 4y ago
    Up with respect to what? They can't go up relative to wages forever without making housing unaffordable.
    - mupuff1234 4y ago
      Probably tied to local economical growth/wages. Which means it could still be relatively affordable for people who live in the area (minus income inequality issues) while also being a good investment compared to national average.
  - Ekaros 4y ago
    Also maybe we need to ask if houses get better. Or bigger. And by how much. In good functioning economy, building a same house with same features and such should get cheaper as efficiency gets better. Materials should be at least cheaper. Ofc, we want bigger and more efficient housing with more features so that counteracts it, but how much should it counteract?
    - Falkon1313 4y ago
      Labor costs are a bigger percentage than materials. Those have been going down relative to efficiency for many years now, but there are limits to how much you can cut people's pay. Both relative to inflation and in absolute terms.
  - qeternity 4y ago
    > I think for a good functioning economy we do want housing prices to generally go up In nominal terms it's inevitable. In real terms, this should not be the case. Housing is a commodity. It's the only commodity which has increased in price in real terms over time. This is because we've turned it into a retirement account.
    - quonn 4y ago
      How about this alternative explanation: Unlike a real commodity such as fruit, people compete for houses and look carefully. This is because houses are in different locations, generally unique, limited and perhaps most importantly because they are the largest expense most buyers will every have. Because there is competition a certain premium is paid. And if we assume further economical growth, the premium that an individual is capable of paying likewise should increase. Therefore, all things being equal, the prices should increase.
      - qeternity 4y ago
        A primary input to the pricing function of a commodity is location. This applies to fruit, and it changes nothing about housing. Source: career hedge fund commodities trader.
  - qntmfred 4y ago
    it can go up as long as it goes up roughly in line with incomes, GDP, etc. basically, as long as the housing affordability index stays in the healthy zone. also, in Japan housing is a depreciating asset and while their economy has well known challenges over the last few decades, they're still an advanced economy that the majority of nations on Earth would probably be happy to trade places with. an outlier for sure, but worth mentioning
    - nemo44x 4y ago
      Japanese houses are built to last 20 years and be thrown away. Japanese houses are better compared to trailer homes in the USA in terms of lifespan and depreciation. Also they have a declining population.
  - JasserInicide 4y ago
    Corporations of any type should just be banned from buying most domiciles. Should be a legal name on the deed. Will never happen though.
    - tekknik 4y ago
      A corporation is a legal entity capable of owning things
- atyppo 4y ago
  I'm 22. This has been talked about my entire life. Progress on this has been glacial, if there's been any at all. At some point, enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before. The question of when it will happen hinges on when enough people can find enough interest and social cohesion to organize. For young people, this is not a political issue. It is an issue of inadequate and out of reach housing.
  - deleted 4y ago
    [deleted]
  - qntmfred 4y ago
    > enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before says nearly every generation of ideal-minded and dissatisfied young people fwiw
    - xwdv 4y ago
      Aye, one of the thing I came to realize as I grew old enough to know people younger than me who were not teens or children, is that every generation overestimates how much they’re going to change the world and underestimates how many of their peers will change their views and become some version of the things they once opposed, just on different issues or contexts. Boomers were once a very liberal generation.
      - blacksmith_tb 4y ago
        Sure, "Don't trust anyone over 30!" (or 25, or...) is just a claim that the preceding generations are too invested (in both senses) in the status quo to consider sweeping changes. Of course, sometimes sweeping changes are for the worse, so that doesn't seem to me like best battle cry, really.
      - bcrosby95 4y ago
        Boomers were liberal for their time. But society gets more liberal over time so, in comparison, they are no longer liberal.
- nemo44x 4y ago
  Land is an investment. And land that is in places people want to be is an exceptionally good investment.
  - jjoonathan 4y ago
    Competition for land could be structured as 30 year leases (give or take), rather than perpetual ownership. Then A. prices don't reflect an asset premium and B. the surplus accrues to the public, rather than to rich people.
    - nemo44x 4y ago
      30 year lease to who? Property rights and land ownership are the foundation this country is built on. You control this through property tax.
      - jjoonathan 4y ago
        Leases from the public to the person who wants the public to stay off a chunk of land. The perpetual ownership model is actually pretty weird: the public in 2023 agrees to stay off Bill Barnes' land in transferrable perpetuity in exchange for... a railroad built in 1850 that went defunct 100 years ago. And a dribble of property tax. Lol. Yes, the USA was founded by english nobility for english nobility. Is it really so surprising they upheld one of the most important institutions for ensuring that rich people can get paid for being rich? They also upheld slavery for similar reasons, though thankfully we sorted that one out 150 years ago.
        nemo44x 4y ago
        Again, this is in effect what property tax does. You effectively lease the land from the government because the second you can’t or won’t pay your property tax they will take your land and sell it. Private ownership of land is actually in the governments best interest. Private individuals will improve land creating further tax. And buildings and people are the 2 things of value a government has. With private ownership the people are truly invested in the government and the government with the people.
- ineedasername 4y ago
  I’m not sure what you mean by allow. Rules and regulations preventing profits? Or outlawing financial instruments backed by mortgages? Owners have to prove all the money they’ve ever spent maintaining and improving the house w/ receipts and estimates in those costs after accounting for inflation, and only then selling it at a break even price? All apartment complexes operating at mandatory break even rates? I can tell you this: if I added up all home improvements, maintenance, and property taxes I’ve paid over 20 years then I’d take a significant loss when selling at current inflated values. Maybe when you look at the total cost of ownership for typical family owned homes then in many cases it’s not actually investment, maybe more like a savings account. That’s the best I’d get out of my home and I bought cheap w/ prices, inflated as they are, roughly 150% higher than my sticker price 20 years ago. The financial model for developers is of course different but if you’re going to look at home ownership as an investment for the owner then you can’t do that going from the buying price to selling price, you have add in all the costs of ownership. (Disclaimer: my TCO loss on my home despite rising prices would be do in large part because of truly massive property taxes.) I don’t see an easy way to outlaw the abilities for housing to be an investment. Even the it wouldn’t do anything at all to actually get people into housing, it would just make it more affordable for the lucky few who got to buy in at the reduced price. We just need to build more housing and have laws/regulations/rules in place that stop the NIMBY nonsense. No reasonable development can be denied if the increase in housing supply is lagging behind local increased population growth. Incentives to developers to build more than that minimum. Tax incentives for developers to keep prices within confines bands of local median incomes, tax penalties— a luxury tax— against selling a certain amount above these limits. And I don’t know, these may be really bad ideas too. But all I see disallowing investment accomplishing is to have housing inventory stagnate and make housing access partly a game of who you know to get an inside track— similar to how some affordable housing programs work right now. Around me, apartment complexes that are part of affordable housing programs have 2+ year waiting lists, some should be condemned and closed, but I’ve seen people pretty much walk into a recently opened space when they know someone who administers the program for that complex.
  - rcarr 4y ago
    Here are some laws that partially curtail housing as investment: - ban anyone non-resident in the country from owning property - create an exponential property tax. 0% for first home, 2% for second home, 4% for third home, 8% for fourth home etc to discourage mass renting. - to make the point above easier to enforce, make it illegal for companies to own residential property other than a few exceptions such as developer companies holding newly built property that they’re selling, banks holding repossessions etc. All property must be owned by an individual citizen. - Mandate that developers build >50% affordable housing. Earmark this housing for first time buyers only. Non compliance means the developer is shut down and loses their license. - Mandate that developers build on their land or else have it seized by the government to avoid developers land banking and waiting it out for a change of administration which would reverse all the above rules so developers can go back to raking in absurd profits.
garyfirestorm 4y ago
When you treat basic needs as an investment… same with masks during early pandemic periods, we frown upon those scalpers. But somehow we aspire to become housing scalper one day ‘when the day comes, I’ll sell mine at highest possible return’ Maybe we need blind lottery and if a buyer turns out to be new buyer, the price is automatically adjusted to a reasonable value (no extra 50k to pick my offer…)
datadata 4y ago
I've never understood how real returns on house prices could be believed to be sustainable. If the value of a house appreciates in terms of purchasing power for some other good at a constant rate, at some point in the far future just a single house would become valuable enough to purchase the entire global supply of the other good. The illusion of house price appreciation is due to historical population growth creating scarcity, and cheaper money allowing for higher and higher leverage. At some point the music has to stop.
- draw_down 4y ago
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- cantaloupe 4y ago
  Especially considering the house structure itself is usually depreciating in real/material value (whether or not the price is still going up) due to aging. At a certain point, just the land needs to cover those real returns.
  - JKCalhoun 4y ago
    The land is the part that appreciates. Proximity to good schools (and well paying jobs at one time) were the driver.
    - pydry 4y ago
      It's amazing how we've managed to set up an economic system where schoolteachers drive up their own rent and declared it fair.
      - dumbfounder 4y ago
        That's true for anyone that provides a positive impact on the community. You make something better, it increases in value. Could be a store, could be a trash person, could be a police officer, could be street performer, could just be the person that maintains a nice lawn.
cantaloupe 4y ago
There are plans to up-zone large portions of the city I live in. Appended to every related article on the local newspaper’s website are dozens of comments about how such a move is a scheme/payout for developers. But of course, who else is going to build sufficient housing? The real concern is not actually how much money someone else would make, but how much the current homeowners would have shaved off their selling prices.
- tptacek 4y ago
  Yes. There is a whole playbook of these arguments. Watch carefully and you'll pick up other ones. For instance: developers will announce new apartment buildings with some number of floors in them, and residents will organize around demands that 1-2 floors be removed from the proposal, knowing that most of these projects won't be viable (won't recoup within the required fixed time period for investors) with a whole floor of units removed.
  - toomuchtodo 4y ago
    Can developers not account for this and design as big as possible for their first plan, knowing they’ll have to scale it back? This reminds me of stories around adding hair to arms in graphic design so when you must make a change, you can remove the purposely sacrificial element incorporated into the original design. Not a fan of the adversarial nature of these zoning mechanics, but when in Rome. https://www.npr.org/2014/11/17/364760847/whats-with-all-of-the-hairy-arms-in-graphic-design https://www.npr.org/2014/11/17/364760847/whats-with-all-of-t...
    - tptacek 4y ago
      I assume it depends on the locale, but where I live at least there are challenges with this negotiating tactic Like many (most?) municipalities, our zoning codes were largely set in the mid-20th century, and were deliberately designed to prevent Black families from moving in by restricting multi-family development --- this was a direct response to the 1917 Buchanan decision that outlawed explicit racial zoning (prior to that decision, and to the Great Migration, SFZ was almost unheard of). What that means today is that any new apartment building will be built under a variance negotiated with the municipality; effectively, every new apartment building is done at the individualized discretion of the board. So you have a couple problems here: * There's a process by which these projects are introduced and endorsed to the board which doesn't include opportunities to put give-to-get proposals on the table. * It's probably not a good idea to play games with the board in the first place, since they have other things to do and there aren't really many stakeholders that will hold them to account if they accede to local NIMBYs and just kill a development. * It puts them in a weird position if their negotiating-position-bid is accepted.
spacemadness 4y ago
I guess the question is, how can an upcoming generation fight against the locked-in self-enriching greed of asset owning generations in a non-destructive way? Visible suffering of homeless in the streets has done nothing to change the minds of homeowners in the Bay Area. What if anything will? I personally have little hope in my own generation (Gen X) doing anything different from boomers since the incentives are the same.
- junofan 4y ago
  Yes, the gerontocracy is too entrenched to do anything but continue.
- Gimpei 4y ago
  Get involved with your local YIMBY group and, most importantly, vote for pro-housing politicians. One of the problems with housing policy is that it is decided at the local level, and the only people who turn out are the highly motivated zealots. In SF we could make a huge amount of progress if only we could vote out everyone on the board of supervisors apart from Joel Engardo.
- sircastor 4y ago
  I think the only thing that made it possible for my wife and I was very good timing. We bought a house that was bank-owned just after the housing market collapsed 15 years or so ago. If that major reset hadn't happened, I can't imagine we'd have been able to buy anything bigger than a backyard shack.
- sfpotter 4y ago
  Why does it need to be non-destructive?
  - spacemadness 4y ago
    Well, I guess people can start burning peoples houses down, but I am going to go out on a limb and say that’s probably not an ideal solution.
tptacek 4y ago
My neighbors are currently organizing in opposition to a proposed 36-unit apartment building on a commercial lot. The developer held a community meeting, and the opponents impressed themselves by getting 150 attendees to show up. "We're tired of these NIMBY tropes!", they say. I point out: "150 attendees is just 0.03% of the municipality, and in fact really only a small multiple of the number of people who will end up living in this new development". They respond, "Why would you expect anybody who doesn't live directly adjacent to this planned development to attend? It's not going to be built in their back yard, so they won't care."
- draw_down 4y ago
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- dostick 4y ago
  And then what was your reply?
- happytoexplain 4y ago
  I'm not sure I understand - it's natural to care more about what is built closer to you than farther from you. It sounds like you're generalizing "NIMBY tropes" to mean "caring about what gets built near you". But that's natural and immutable. It's the base definition - not the trope subset. "NIMBY tropes" normally means "opposing what gets built near you to the point of hypocrisy, irrationality, selfishness, etc", which is obviously more specific and more reasonable to criticize. If you think it's hypocritical simply to care more about what gets built near you than what gets built far from you with no other qualifiers, that's not realistic (or even reasonable, really).
  - tptacek 4y ago
    These people believe that they aren't NIMBYs, despite literally premising their opposition on the fact that it's being built in their back yards.
    - happytoexplain 4y ago
lnxg33k1 4y ago
I am not sure what this kind of articles are supposed to prove, the issue anyway is not my house, it's the housing system, did they just discovered that the human being is greedy and tries to maximise his wealth? That's why we regulate, but do I have the power to cheat the housing market? Can I leave dozens of houses empty to shrink the supply and increase the value? Can I buy politicians to implement rules that improve my power? Houses are not expensive because of NIMBYs, I've seen government throw protesters in a trash bin with no issues when it was convenient for the wealthy, my first protest was the G8 in Genova, Italy, and they had to issue to kill and beat kids, but then when it comes to housing the protesters all of a sudden become a blocker
- greenie_beans 4y ago
  this article is satire
  - lnxg33k1 4y ago
    Yeah but it's bad satire, it's the same kind of material of "calculate your carbon footprint and see how you can help fight back climate change", it's the kind of satire that deep down blames the general populace that apparently when it comes to housing has all the power but in other context is just powerless, I understand this is satire, but I sadly also see that it is a common citizen blaming satire, I think
    - ascotan 4y ago
      What makes this satire interesting is there is a conflict here. People sitting on $4 million homes in Palo Alto want to see more affordable housing. Just not here and not now.
- fallingknife 4y ago
  The housing protestors are not a mob that has descended on the city from elsewhere, but only represents a tiny fraction of the population, like the G8 protests. They are local property owners and they all vote in local elections. And then there are the other local property owners who aren't actively involved in the protests but would join them the second they saw their property values drop. Local officials are terrified of this because they can legitimately lose elections over it.
cnelsenmilt 4y ago
The irony is well-taken but it goes a little deeper. Even for someone who bought a house 20-30 years ago and could sell far below the current market without losing money...that person then can't afford to buy anything else. (Doubly so in places where property tax increases have been limited over the span of their ownership -- the taxes on a comparable house in the same region may be a large delta.) It's a vicious spiral with, I think, no pain-free offramp.
- deleted 4y ago
  [deleted]
welder 4y ago
Here in Austria there's two markets: 1. New buildings that aren't rent controlled, can rent for $1-3k monthly. 2. Alt buildings that are rent controlled and compete with public housing, renting for $400-$700 monthly. Old/alt buildings sell for at least half the price of new buildings. Around 60% of Vienna's residents live in public housing. I don't think things that work here would ever work in other parts of the world.
- ChuckNorris89 4y ago
  Vienna housing is unique even in Austria. Other cities, like Graz for example, don't have as much public or rent controlled housing so you're mostly dependent on the free market unless you're highly economically vulnerable and get help from the sate. But even in Vienna, if you move there now you'll have to rent off the private market.
- j7ake 4y ago
  Yes but simply stating rent prices gives no context for whether it is expensive or not. Average net income in Austria is probably less than 2000 usd.
chrsw 4y ago
You're not supposed to question the scam, you're supposed to get in on it.
- DesiLurker 4y ago
  this is the biggest problem in unravelling the scam IMO. as people age they get more vested in the system. this makes them harder to want a fundamental change. The other think is basically lack of leverage for the little guy. so basically any fundamental change is likely going to push more power to the exploiter/powerful so I am quite vary of them despite the promise on face value. btw I still support student loan reform at the age of 40+ but not in the hackey one-shot way current politicians are trying to get it done. same with many other things.
avidiax 4y ago
This article reminds me of the "Prayer of a Selfish Child"[1] The attitude of homeowners is somehow slightly worse than "fuck you, I've got mine". It's more like "no matter what, I must stay ahead of those lacking the foresight to be born in the 1950's or 60's". [1] https://shelsilverstein.yolasite.com/prayer-of-the-selfish-child.php https://shelsilverstein.yolasite.com/prayer-of-the-selfish-c...
jtaft 4y ago
> The fact of the matter is this: it’s so important that new housing is affordable, because there’s no way in hell I’m accepting anything less than a 20 percent return on my own home. That’s the issue. I don’t think homes should appreciate in value (less inflation). It causes massive inequity. Houses are depreciating assets too. Just decaying/breaking over time.
outside1234 4y ago
So true - this is why we should include the price of housing in inflation statistics and basically manage them to be level by increasing interest rates. A house is not an investment and it should not increase in value when discounted by inflation.
- hgsgm 4y ago
  Land appreciation is not inflation. It is wealth transfer to landowners.
nemo44x 4y ago
Young people (late 20’s/early 30’s) own homes at the same rate as people did 40 years ago. There’s a lot of misconception about home ownership. It’s similarly accessible as it has been for decades. At the same age millennials own homes at a rate higher than Genx If you look at home prices and can’t believe the prices it’s because you’re looking for homes you can’t afford. https://www.redfin.com/news/gen-z-millennial-homeownership-rate-home-purchases/ https://www.redfin.com/news/gen-z-millennial-homeownership-r...
- JasserInicide 4y ago
  Young people (late 20’s/early 30’s) own homes at the same rate as people did 40 years ago. Source for this?
  - nemo44x 4y ago
    https://www.redfin.com/news/gen-z-millennial-homeownership-rate-home-purchases/ https://www.redfin.com/news/gen-z-millennial-homeownership-r...
    - JasserInicide 4y ago
      Interesting. Milliennials are a bit behind but it's essentially rounding errors. Did not expect that. It's another example of narratives the media pushes being different from reality. However I wonder if there's any good data on a milliennial's PPP vs. their parents. That definitely has to be the real difference especially since there's plenty of data on how the average income hasn't scaled with productivity for ~50 years.
    - soared 4y ago
      According to the article ~20% of people under 20 years old own a home? And that percentage decrease for a few years and then increases again? > A 25-year-old’s median monthly mortgage payment was $1,013 in 2021 The median price for a home owned by 25 year olds is 235k, and 30% of 25 year olds own a home. Doesn’t really seem like that passes the sniff test, unless like 100% of rural 25 year olds purchased homes.
benguild 4y ago
The interesting thing that a lot of people forget about is that many people are “stuck” in their homes because of this. For example, an older couple whose kids have left could downsize, but often can’t afford it due to that generation trying to maximize ROI. So, the system is broken even for folks who want a different home, and the incentive to fix it may be that flexibility for existing homeowners to get a better fit for themselves.
- JumpCrisscross 4y ago
  > an older couple whose kids have left could downsize, but often can’t afford it due to that generation trying to maximize ROI Help me out with this. Their downsized home will cost less than their large home sells for.
  - lcc 4y ago
    For one thing, in California, prop 13 means that property taxes on a newly purchased smaller home would be a lot more than a bigger/nicer home purchased decades ago. In a lot of other places, property taxes are similarly under-assessed on homes that were bought a long time ago, just not as egregiously.
    - JumpCrisscross 4y ago
      > in California, prop 13 This is orthogonal to housing delivering real returns. (Common cause, granted.)
  - kagakuninja 4y ago
    The gains from selling a house are taxable. In addition, last I checked, 6% of the sale price is split between the buying and selling realtor. But the biggest factor here in California is the controversial Proposition 13. The assessed value of the property for tax purposes can only increase by 2% per year. Since real estate has appreciated in value much faster than 2%, an elderly couple like my parents are only paying about 1/10 of the normal tax rate. The house my parents bought in 1975 is worth $4 million (according to Zillow) because it is in a prime Palo Alto location. In their case, assuming the house is actually worth $4M, they will make a tidy profit. They could buy a downsized house, but only if they move out of Palo Alto. And their tax bill would sky-rocket. A better example might my house, which I have owned for 22 years, valued at a "mere" $1.4M. Taxes at market rate would be $12,320. Assuming I bought it in 1975, my yearly tax bill would be a mere $1,232. The first problem, small houses in the Bay Area are still expensive. But suppose I found something for $700K, my tax bill would go from $1,232 to $6,160. OK, maybe I move somewhere cheap, and get a house for $350K, I'm still probably paying more than 2x my current tax rate. Add to that the enormous stress involved with buying a house, I'm not planning on selling, ever.
alpineidyll3 4y ago
Far and away the main cause of house price inflation has been zero-interest rate fed policy. Demand for 1m houses was high because people could afford it. It will take a while for people's expectations to normalize, but if rates remain above 5 for years the market will return to earth.
- hgsgm 4y ago
  ZIRP caused regular inflation, which, when not matched by wage increases, caused unaffordability. Land appreciation (not home appreciation: the expensive part of a home is the land or share it sits on) is due to scarcity and underutilization.
JustSomeNobody 4y ago
When the Boomers die off, won't there be a glut of homes and thus a crash in prices? Or maybe not. Maybe Big Corp will buy them all and make the younger gens renters.
- DesiLurker 4y ago
  or Chinese will with the enormous USD reserve they have accumulated over last 20 years maintaining yuan peg to dollar.
- jakeinspace 4y ago
  Most of these houses will be inherited by their children. Certainly many homes will enter the market, as the inheritors might be living elsewhere or already have housing they prefer, but I don’t think that will be the cause of a housing market collapse.
- mixmastamyk 4y ago
  Population has increased a lot and there is a significant shortage. So alleviating that a bit won’t lead to a crash.
jmartrican 4y ago
I wonder if housing prices is a significant cause of the inflation we are seeing. Potentially, one important item that permeates throughout the economy can drive inflation up for all things. The one typical example is oil or energy costs. But it could also be housing. The owners and managers of businesses ultimately are directly effected by the cost of housing. The increase in the cost of housing, may lead to them asking for more of the revenue be converted to profit/compensation for them, hence leading to increases of the prices of the goods/services these companies sell.
- ascotan 4y ago
  No ,when money is cheap people buy assets. Doesn't really matter what it is as long as it goes up in value. Bitcoin, Homes, NFT, who cares. This isn't quite the same thing as inflation. Inflation is the cost of milk and eggs. That also has gone up, in part because the Fed is dumping money into the economy during the pandemic as part of quantitative easing. But the home prices are an effect of cheap money. Now cheap money is gone, people have to rethink were to put money. Homes that are expensive to leverage and don't go up in value aren't a great place to put money anymore.
realjohng 4y ago
Nice way to capture the current homeowners point of view— and their opposition to affordable housing programs.
Simulacra 4y ago
I don't think there is any scarcity to housing, there is only a scarcity of housing where people want to live; safe, clean, hip walkable areas. There is an abundance of housing, just not wear people want to live. The irony of that is that if people did buy these homes, they would create over time the kinds of communities they can't afford to buy into.
jmyeet 4y ago
The disturbing part of this is how desensitized people are to certain kinds of violence, specifically state violence. Charging someone $3000/month for insulin without which they will die? Preventing the import of the same thing from Canada at a fraction of the cost? That's quite literally state violence. Housing (shelter) is one of humanity's basic needs. Denying this to people is again, quite literally, state violence. It's not market conditions that made this happen. It's not population growth. It's deliberate policy at every level of government. Yet one person steals from CVS or breaks into a car and people lose their minds. As a society we will deploy the police state at a moment's notice in the case of property crime. Think about that. In the US in particular, housing policy is a key tool in economic segregation, which is the replacement to literal segregation that was slowly made technically illegal post-WW2. What do I mean by this? Redlining is an obvious example. A big one is the GI Bill, that provided cheap mortgages and free education to returning white servicemen. Coinciding with the flight to the suburbs, this created generational wealth. This allows future generations to live in those "nicer" areas and have access to better amenities. This is what I mean by "economic segregation". The "riffraff" are simply priced out. And since so many amenities like education are funded in large part from property taxes, the wealthier areas get more and more of an advantage. Some people like to say "I'm fiscally conservative but socially liberal". This betrays a deep misunderstanding of what systemic racism actually is. Many think racism is just using a bad word. It's not. It's the continued disenfranchisement of entires groups of people through economics, government policy and the police state.
fennecfoxy 3y ago
It's the FYIGM mindset; the advantages that previous generations had over later generations are now an aside, the next class divide is those who are inheriting something, and those who are not. Without inheritance, for the average Millennial and Gen-Z, they will currently not be able to afford buying a house. Also, don't bother trying to argue that buying a house isn't required; the system all previous generations has set up for retirement requires that you own a house. It's just now they cost $1M.
- zdbrandon 3y ago
  Looks like Gen Z is outpacing the previous two generations in home ownership. So this is likely a false prediction.
  - fennecfoxy 3y ago
    I doubt that Gen Z are already purchasing homes without leaning on any inheritance at all.

332 points by baron816 4y ago

[dead]

Housing should have never been allowed to be an 'investment' in the first place. We've known that, but I think these chickens are finally coming home to roost.

mupuff1234 4y ago
I think for a good functioning economy we do want housing prices to generally go up, but in a much more modest and controlled way - so in that way it should be viewed as an appreciating asset. What it shouldn't be is a speculative investment for companies, non residents or wealthy individuals.
- Denvercoder9 4y ago
  Up with respect to what? They can't go up relative to wages forever without making housing unaffordable.
  - mupuff1234 4y ago
    Probably tied to local economical growth/wages. Which means it could still be relatively affordable for people who live in the area (minus income inequality issues) while also being a good investment compared to national average.
- Ekaros 4y ago
  Also maybe we need to ask if houses get better. Or bigger. And by how much. In good functioning economy, building a same house with same features and such should get cheaper as efficiency gets better. Materials should be at least cheaper. Ofc, we want bigger and more efficient housing with more features so that counteracts it, but how much should it counteract?
  - Falkon1313 4y ago
    Labor costs are a bigger percentage than materials. Those have been going down relative to efficiency for many years now, but there are limits to how much you can cut people's pay. Both relative to inflation and in absolute terms.
- qeternity 4y ago
  > I think for a good functioning economy we do want housing prices to generally go up In nominal terms it's inevitable. In real terms, this should not be the case. Housing is a commodity. It's the only commodity which has increased in price in real terms over time. This is because we've turned it into a retirement account.
  - quonn 4y ago
    How about this alternative explanation: Unlike a real commodity such as fruit, people compete for houses and look carefully. This is because houses are in different locations, generally unique, limited and perhaps most importantly because they are the largest expense most buyers will every have. Because there is competition a certain premium is paid. And if we assume further economical growth, the premium that an individual is capable of paying likewise should increase. Therefore, all things being equal, the prices should increase.
    - qeternity 4y ago
      A primary input to the pricing function of a commodity is location. This applies to fruit, and it changes nothing about housing. Source: career hedge fund commodities trader.
- qntmfred 4y ago
  it can go up as long as it goes up roughly in line with incomes, GDP, etc. basically, as long as the housing affordability index stays in the healthy zone. also, in Japan housing is a depreciating asset and while their economy has well known challenges over the last few decades, they're still an advanced economy that the majority of nations on Earth would probably be happy to trade places with. an outlier for sure, but worth mentioning
  - nemo44x 4y ago
    Japanese houses are built to last 20 years and be thrown away. Japanese houses are better compared to trailer homes in the USA in terms of lifespan and depreciation. Also they have a declining population.
- JasserInicide 4y ago
  Corporations of any type should just be banned from buying most domiciles. Should be a legal name on the deed. Will never happen though.
  - tekknik 4y ago
    A corporation is a legal entity capable of owning things
atyppo 4y ago
I'm 22. This has been talked about my entire life. Progress on this has been glacial, if there's been any at all. At some point, enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before. The question of when it will happen hinges on when enough people can find enough interest and social cohesion to organize. For young people, this is not a political issue. It is an issue of inadequate and out of reach housing.
- deleted 4y ago
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- qntmfred 4y ago
  > enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before says nearly every generation of ideal-minded and dissatisfied young people fwiw
  - xwdv 4y ago
    Aye, one of the thing I came to realize as I grew old enough to know people younger than me who were not teens or children, is that every generation overestimates how much they’re going to change the world and underestimates how many of their peers will change their views and become some version of the things they once opposed, just on different issues or contexts. Boomers were once a very liberal generation.
    - blacksmith_tb 4y ago
      Sure, "Don't trust anyone over 30!" (or 25, or...) is just a claim that the preceding generations are too invested (in both senses) in the status quo to consider sweeping changes. Of course, sometimes sweeping changes are for the worse, so that doesn't seem to me like best battle cry, really.
    - bcrosby95 4y ago
      Boomers were liberal for their time. But society gets more liberal over time so, in comparison, they are no longer liberal.
nemo44x 4y ago
Land is an investment. And land that is in places people want to be is an exceptionally good investment.
- jjoonathan 4y ago
  Competition for land could be structured as 30 year leases (give or take), rather than perpetual ownership. Then A. prices don't reflect an asset premium and B. the surplus accrues to the public, rather than to rich people.
  - nemo44x 4y ago
    30 year lease to who? Property rights and land ownership are the foundation this country is built on. You control this through property tax.
    - jjoonathan 4y ago
      Leases from the public to the person who wants the public to stay off a chunk of land. The perpetual ownership model is actually pretty weird: the public in 2023 agrees to stay off Bill Barnes' land in transferrable perpetuity in exchange for... a railroad built in 1850 that went defunct 100 years ago. And a dribble of property tax. Lol. Yes, the USA was founded by english nobility for english nobility. Is it really so surprising they upheld one of the most important institutions for ensuring that rich people can get paid for being rich? They also upheld slavery for similar reasons, though thankfully we sorted that one out 150 years ago.
      - nemo44x 4y ago
        Again, this is in effect what property tax does. You effectively lease the land from the government because the second you can’t or won’t pay your property tax they will take your land and sell it. Private ownership of land is actually in the governments best interest. Private individuals will improve land creating further tax. And buildings and people are the 2 things of value a government has. With private ownership the people are truly invested in the government and the government with the people.
ineedasername 4y ago
I’m not sure what you mean by allow. Rules and regulations preventing profits? Or outlawing financial instruments backed by mortgages? Owners have to prove all the money they’ve ever spent maintaining and improving the house w/ receipts and estimates in those costs after accounting for inflation, and only then selling it at a break even price? All apartment complexes operating at mandatory break even rates? I can tell you this: if I added up all home improvements, maintenance, and property taxes I’ve paid over 20 years then I’d take a significant loss when selling at current inflated values. Maybe when you look at the total cost of ownership for typical family owned homes then in many cases it’s not actually investment, maybe more like a savings account. That’s the best I’d get out of my home and I bought cheap w/ prices, inflated as they are, roughly 150% higher than my sticker price 20 years ago. The financial model for developers is of course different but if you’re going to look at home ownership as an investment for the owner then you can’t do that going from the buying price to selling price, you have add in all the costs of ownership. (Disclaimer: my TCO loss on my home despite rising prices would be do in large part because of truly massive property taxes.) I don’t see an easy way to outlaw the abilities for housing to be an investment. Even the it wouldn’t do anything at all to actually get people into housing, it would just make it more affordable for the lucky few who got to buy in at the reduced price. We just need to build more housing and have laws/regulations/rules in place that stop the NIMBY nonsense. No reasonable development can be denied if the increase in housing supply is lagging behind local increased population growth. Incentives to developers to build more than that minimum. Tax incentives for developers to keep prices within confines bands of local median incomes, tax penalties— a luxury tax— against selling a certain amount above these limits. And I don’t know, these may be really bad ideas too. But all I see disallowing investment accomplishing is to have housing inventory stagnate and make housing access partly a game of who you know to get an inside track— similar to how some affordable housing programs work right now. Around me, apartment complexes that are part of affordable housing programs have 2+ year waiting lists, some should be condemned and closed, but I’ve seen people pretty much walk into a recently opened space when they know someone who administers the program for that complex.
- rcarr 4y ago
  Here are some laws that partially curtail housing as investment: - ban anyone non-resident in the country from owning property - create an exponential property tax. 0% for first home, 2% for second home, 4% for third home, 8% for fourth home etc to discourage mass renting. - to make the point above easier to enforce, make it illegal for companies to own residential property other than a few exceptions such as developer companies holding newly built property that they’re selling, banks holding repossessions etc. All property must be owned by an individual citizen. - Mandate that developers build >50% affordable housing. Earmark this housing for first time buyers only. Non compliance means the developer is shut down and loses their license. - Mandate that developers build on their land or else have it seized by the government to avoid developers land banking and waiting it out for a change of administration which would reverse all the above rules so developers can go back to raking in absurd profits.

garyfirestorm 4y ago

When you treat basic needs as an investment… same with masks during early pandemic periods, we frown upon those scalpers. But somehow we aspire to become housing scalper one day ‘when the day comes, I’ll sell mine at highest possible return’ Maybe we need blind lottery and if a buyer turns out to be new buyer, the price is automatically adjusted to a reasonable value (no extra 50k to pick my offer…)

datadata 4y ago

I've never understood how real returns on house prices could be believed to be sustainable. If the value of a house appreciates in terms of purchasing power for some other good at a constant rate, at some point in the far future just a single house would become valuable enough to purchase the entire global supply of the other good. The illusion of house price appreciation is due to historical population growth creating scarcity, and cheaper money allowing for higher and higher leverage. At some point the music has to stop.

draw_down 4y ago
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cantaloupe 4y ago
Especially considering the house structure itself is usually depreciating in real/material value (whether or not the price is still going up) due to aging. At a certain point, just the land needs to cover those real returns.
- JKCalhoun 4y ago
  The land is the part that appreciates. Proximity to good schools (and well paying jobs at one time) were the driver.
  - pydry 4y ago
    It's amazing how we've managed to set up an economic system where schoolteachers drive up their own rent and declared it fair.
    - dumbfounder 4y ago
      That's true for anyone that provides a positive impact on the community. You make something better, it increases in value. Could be a store, could be a trash person, could be a police officer, could be street performer, could just be the person that maintains a nice lawn.

cantaloupe 4y ago

There are plans to up-zone large portions of the city I live in. Appended to every related article on the local newspaper’s website are dozens of comments about how such a move is a scheme/payout for developers. But of course, who else is going to build sufficient housing? The real concern is not actually how much money someone else would make, but how much the current homeowners would have shaved off their selling prices.

tptacek 4y ago
Yes. There is a whole playbook of these arguments. Watch carefully and you'll pick up other ones. For instance: developers will announce new apartment buildings with some number of floors in them, and residents will organize around demands that 1-2 floors be removed from the proposal, knowing that most of these projects won't be viable (won't recoup within the required fixed time period for investors) with a whole floor of units removed.
- toomuchtodo 4y ago
  Can developers not account for this and design as big as possible for their first plan, knowing they’ll have to scale it back? This reminds me of stories around adding hair to arms in graphic design so when you must make a change, you can remove the purposely sacrificial element incorporated into the original design. Not a fan of the adversarial nature of these zoning mechanics, but when in Rome. https://www.npr.org/2014/11/17/364760847/whats-with-all-of-the-hairy-arms-in-graphic-design https://www.npr.org/2014/11/17/364760847/whats-with-all-of-t...
  - tptacek 4y ago
    I assume it depends on the locale, but where I live at least there are challenges with this negotiating tactic Like many (most?) municipalities, our zoning codes were largely set in the mid-20th century, and were deliberately designed to prevent Black families from moving in by restricting multi-family development --- this was a direct response to the 1917 Buchanan decision that outlawed explicit racial zoning (prior to that decision, and to the Great Migration, SFZ was almost unheard of). What that means today is that any new apartment building will be built under a variance negotiated with the municipality; effectively, every new apartment building is done at the individualized discretion of the board. So you have a couple problems here: * There's a process by which these projects are introduced and endorsed to the board which doesn't include opportunities to put give-to-get proposals on the table. * It's probably not a good idea to play games with the board in the first place, since they have other things to do and there aren't really many stakeholders that will hold them to account if they accede to local NIMBYs and just kill a development. * It puts them in a weird position if their negotiating-position-bid is accepted.

spacemadness 4y ago

I guess the question is, how can an upcoming generation fight against the locked-in self-enriching greed of asset owning generations in a non-destructive way? Visible suffering of homeless in the streets has done nothing to change the minds of homeowners in the Bay Area. What if anything will? I personally have little hope in my own generation (Gen X) doing anything different from boomers since the incentives are the same.

junofan 4y ago
Yes, the gerontocracy is too entrenched to do anything but continue.
Gimpei 4y ago
Get involved with your local YIMBY group and, most importantly, vote for pro-housing politicians. One of the problems with housing policy is that it is decided at the local level, and the only people who turn out are the highly motivated zealots. In SF we could make a huge amount of progress if only we could vote out everyone on the board of supervisors apart from Joel Engardo.
sircastor 4y ago
I think the only thing that made it possible for my wife and I was very good timing. We bought a house that was bank-owned just after the housing market collapsed 15 years or so ago. If that major reset hadn't happened, I can't imagine we'd have been able to buy anything bigger than a backyard shack.
sfpotter 4y ago
Why does it need to be non-destructive?
- spacemadness 4y ago
  Well, I guess people can start burning peoples houses down, but I am going to go out on a limb and say that’s probably not an ideal solution.

tptacek 4y ago

My neighbors are currently organizing in opposition to a proposed 36-unit apartment building on a commercial lot. The developer held a community meeting, and the opponents impressed themselves by getting 150 attendees to show up. "We're tired of these NIMBY tropes!", they say. I point out: "150 attendees is just 0.03% of the municipality, and in fact really only a small multiple of the number of people who will end up living in this new development". They respond, "Why would you expect anybody who doesn't live directly adjacent to this planned development to attend? It's not going to be built in their back yard, so they won't care."

draw_down 4y ago
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dostick 4y ago
And then what was your reply?
happytoexplain 4y ago
I'm not sure I understand - it's natural to care more about what is built closer to you than farther from you. It sounds like you're generalizing "NIMBY tropes" to mean "caring about what gets built near you". But that's natural and immutable. It's the base definition - not the trope subset. "NIMBY tropes" normally means "opposing what gets built near you to the point of hypocrisy, irrationality, selfishness, etc", which is obviously more specific and more reasonable to criticize. If you think it's hypocritical simply to care more about what gets built near you than what gets built far from you with no other qualifiers, that's not realistic (or even reasonable, really).
- tptacek 4y ago
  These people believe that they aren't NIMBYs, despite literally premising their opposition on the fact that it's being built in their back yards.
  - happytoexplain 4y ago

lnxg33k1 4y ago

I am not sure what this kind of articles are supposed to prove, the issue anyway is not my house, it's the housing system, did they just discovered that the human being is greedy and tries to maximise his wealth? That's why we regulate, but do I have the power to cheat the housing market? Can I leave dozens of houses empty to shrink the supply and increase the value? Can I buy politicians to implement rules that improve my power? Houses are not expensive because of NIMBYs, I've seen government throw protesters in a trash bin with no issues when it was convenient for the wealthy, my first protest was the G8 in Genova, Italy, and they had to issue to kill and beat kids, but then when it comes to housing the protesters all of a sudden become a blocker

greenie_beans 4y ago
this article is satire
- lnxg33k1 4y ago
  Yeah but it's bad satire, it's the same kind of material of "calculate your carbon footprint and see how you can help fight back climate change", it's the kind of satire that deep down blames the general populace that apparently when it comes to housing has all the power but in other context is just powerless, I understand this is satire, but I sadly also see that it is a common citizen blaming satire, I think
  - ascotan 4y ago
    What makes this satire interesting is there is a conflict here. People sitting on $4 million homes in Palo Alto want to see more affordable housing. Just not here and not now.
fallingknife 4y ago
The housing protestors are not a mob that has descended on the city from elsewhere, but only represents a tiny fraction of the population, like the G8 protests. They are local property owners and they all vote in local elections. And then there are the other local property owners who aren't actively involved in the protests but would join them the second they saw their property values drop. Local officials are terrified of this because they can legitimately lose elections over it.

cnelsenmilt 4y ago

The irony is well-taken but it goes a little deeper. Even for someone who bought a house 20-30 years ago and could sell far below the current market without losing money...that person then can't afford to buy anything else. (Doubly so in places where property tax increases have been limited over the span of their ownership -- the taxes on a comparable house in the same region may be a large delta.) It's a vicious spiral with, I think, no pain-free offramp.

deleted 4y ago
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welder 4y ago

Here in Austria there's two markets: 1. New buildings that aren't rent controlled, can rent for $1-3k monthly. 2. Alt buildings that are rent controlled and compete with public housing, renting for $400-$700 monthly. Old/alt buildings sell for at least half the price of new buildings. Around 60% of Vienna's residents live in public housing. I don't think things that work here would ever work in other parts of the world.

ChuckNorris89 4y ago
Vienna housing is unique even in Austria. Other cities, like Graz for example, don't have as much public or rent controlled housing so you're mostly dependent on the free market unless you're highly economically vulnerable and get help from the sate. But even in Vienna, if you move there now you'll have to rent off the private market.
j7ake 4y ago
Yes but simply stating rent prices gives no context for whether it is expensive or not. Average net income in Austria is probably less than 2000 usd.

chrsw 4y ago

You're not supposed to question the scam, you're supposed to get in on it.

DesiLurker 4y ago
this is the biggest problem in unravelling the scam IMO. as people age they get more vested in the system. this makes them harder to want a fundamental change. The other think is basically lack of leverage for the little guy. so basically any fundamental change is likely going to push more power to the exploiter/powerful so I am quite vary of them despite the promise on face value. btw I still support student loan reform at the age of 40+ but not in the hackey one-shot way current politicians are trying to get it done. same with many other things.

avidiax 4y ago

This article reminds me of the "Prayer of a Selfish Child"[1] The attitude of homeowners is somehow slightly worse than "fuck you, I've got mine". It's more like "no matter what, I must stay ahead of those lacking the foresight to be born in the 1950's or 60's". [1] https://shelsilverstein.yolasite.com/prayer-of-the-selfish-child.php https://shelsilverstein.yolasite.com/prayer-of-the-selfish-c...

jtaft 4y ago

> The fact of the matter is this: it’s so important that new housing is affordable, because there’s no way in hell I’m accepting anything less than a 20 percent return on my own home. That’s the issue. I don’t think homes should appreciate in value (less inflation). It causes massive inequity. Houses are depreciating assets too. Just decaying/breaking over time.

outside1234 4y ago

So true - this is why we should include the price of housing in inflation statistics and basically manage them to be level by increasing interest rates. A house is not an investment and it should not increase in value when discounted by inflation.

hgsgm 4y ago
Land appreciation is not inflation. It is wealth transfer to landowners.

nemo44x 4y ago

Young people (late 20’s/early 30’s) own homes at the same rate as people did 40 years ago. There’s a lot of misconception about home ownership. It’s similarly accessible as it has been for decades. At the same age millennials own homes at a rate higher than Genx If you look at home prices and can’t believe the prices it’s because you’re looking for homes you can’t afford. https://www.redfin.com/news/gen-z-millennial-homeownership-rate-home-purchases/ https://www.redfin.com/news/gen-z-millennial-homeownership-r...

JasserInicide 4y ago
Young people (late 20’s/early 30’s) own homes at the same rate as people did 40 years ago. Source for this?
- nemo44x 4y ago
  https://www.redfin.com/news/gen-z-millennial-homeownership-rate-home-purchases/ https://www.redfin.com/news/gen-z-millennial-homeownership-r...
  - JasserInicide 4y ago
    Interesting. Milliennials are a bit behind but it's essentially rounding errors. Did not expect that. It's another example of narratives the media pushes being different from reality. However I wonder if there's any good data on a milliennial's PPP vs. their parents. That definitely has to be the real difference especially since there's plenty of data on how the average income hasn't scaled with productivity for ~50 years.
  - soared 4y ago
    According to the article ~20% of people under 20 years old own a home? And that percentage decrease for a few years and then increases again? > A 25-year-old’s median monthly mortgage payment was $1,013 in 2021 The median price for a home owned by 25 year olds is 235k, and 30% of 25 year olds own a home. Doesn’t really seem like that passes the sniff test, unless like 100% of rural 25 year olds purchased homes.

benguild 4y ago

The interesting thing that a lot of people forget about is that many people are “stuck” in their homes because of this. For example, an older couple whose kids have left could downsize, but often can’t afford it due to that generation trying to maximize ROI. So, the system is broken even for folks who want a different home, and the incentive to fix it may be that flexibility for existing homeowners to get a better fit for themselves.

JumpCrisscross 4y ago
> an older couple whose kids have left could downsize, but often can’t afford it due to that generation trying to maximize ROI Help me out with this. Their downsized home will cost less than their large home sells for.
- lcc 4y ago
  For one thing, in California, prop 13 means that property taxes on a newly purchased smaller home would be a lot more than a bigger/nicer home purchased decades ago. In a lot of other places, property taxes are similarly under-assessed on homes that were bought a long time ago, just not as egregiously.
  - JumpCrisscross 4y ago
    > in California, prop 13 This is orthogonal to housing delivering real returns. (Common cause, granted.)
- kagakuninja 4y ago
  The gains from selling a house are taxable. In addition, last I checked, 6% of the sale price is split between the buying and selling realtor. But the biggest factor here in California is the controversial Proposition 13. The assessed value of the property for tax purposes can only increase by 2% per year. Since real estate has appreciated in value much faster than 2%, an elderly couple like my parents are only paying about 1/10 of the normal tax rate. The house my parents bought in 1975 is worth $4 million (according to Zillow) because it is in a prime Palo Alto location. In their case, assuming the house is actually worth $4M, they will make a tidy profit. They could buy a downsized house, but only if they move out of Palo Alto. And their tax bill would sky-rocket. A better example might my house, which I have owned for 22 years, valued at a "mere" $1.4M. Taxes at market rate would be $12,320. Assuming I bought it in 1975, my yearly tax bill would be a mere $1,232. The first problem, small houses in the Bay Area are still expensive. But suppose I found something for $700K, my tax bill would go from $1,232 to $6,160. OK, maybe I move somewhere cheap, and get a house for $350K, I'm still probably paying more than 2x my current tax rate. Add to that the enormous stress involved with buying a house, I'm not planning on selling, ever.

alpineidyll3 4y ago

Far and away the main cause of house price inflation has been zero-interest rate fed policy. Demand for 1m houses was high because people could afford it. It will take a while for people's expectations to normalize, but if rates remain above 5 for years the market will return to earth.

hgsgm 4y ago
ZIRP caused regular inflation, which, when not matched by wage increases, caused unaffordability. Land appreciation (not home appreciation: the expensive part of a home is the land or share it sits on) is due to scarcity and underutilization.

JustSomeNobody 4y ago

When the Boomers die off, won't there be a glut of homes and thus a crash in prices? Or maybe not. Maybe Big Corp will buy them all and make the younger gens renters.

DesiLurker 4y ago
or Chinese will with the enormous USD reserve they have accumulated over last 20 years maintaining yuan peg to dollar.
jakeinspace 4y ago
Most of these houses will be inherited by their children. Certainly many homes will enter the market, as the inheritors might be living elsewhere or already have housing they prefer, but I don’t think that will be the cause of a housing market collapse.
mixmastamyk 4y ago
Population has increased a lot and there is a significant shortage. So alleviating that a bit won’t lead to a crash.

jmartrican 4y ago

I wonder if housing prices is a significant cause of the inflation we are seeing. Potentially, one important item that permeates throughout the economy can drive inflation up for all things. The one typical example is oil or energy costs. But it could also be housing. The owners and managers of businesses ultimately are directly effected by the cost of housing. The increase in the cost of housing, may lead to them asking for more of the revenue be converted to profit/compensation for them, hence leading to increases of the prices of the goods/services these companies sell.

ascotan 4y ago
No ,when money is cheap people buy assets. Doesn't really matter what it is as long as it goes up in value. Bitcoin, Homes, NFT, who cares. This isn't quite the same thing as inflation. Inflation is the cost of milk and eggs. That also has gone up, in part because the Fed is dumping money into the economy during the pandemic as part of quantitative easing. But the home prices are an effect of cheap money. Now cheap money is gone, people have to rethink were to put money. Homes that are expensive to leverage and don't go up in value aren't a great place to put money anymore.

realjohng 4y ago

Nice way to capture the current homeowners point of view— and their opposition to affordable housing programs.

Simulacra 4y ago

I don't think there is any scarcity to housing, there is only a scarcity of housing where people want to live; safe, clean, hip walkable areas. There is an abundance of housing, just not wear people want to live. The irony of that is that if people did buy these homes, they would create over time the kinds of communities they can't afford to buy into.

jmyeet 4y ago

The disturbing part of this is how desensitized people are to certain kinds of violence, specifically state violence. Charging someone $3000/month for insulin without which they will die? Preventing the import of the same thing from Canada at a fraction of the cost? That's quite literally state violence. Housing (shelter) is one of humanity's basic needs. Denying this to people is again, quite literally, state violence. It's not market conditions that made this happen. It's not population growth. It's deliberate policy at every level of government. Yet one person steals from CVS or breaks into a car and people lose their minds. As a society we will deploy the police state at a moment's notice in the case of property crime. Think about that. In the US in particular, housing policy is a key tool in economic segregation, which is the replacement to literal segregation that was slowly made technically illegal post-WW2. What do I mean by this? Redlining is an obvious example. A big one is the GI Bill, that provided cheap mortgages and free education to returning white servicemen. Coinciding with the flight to the suburbs, this created generational wealth. This allows future generations to live in those "nicer" areas and have access to better amenities. This is what I mean by "economic segregation". The "riffraff" are simply priced out. And since so many amenities like education are funded in large part from property taxes, the wealthier areas get more and more of an advantage. Some people like to say "I'm fiscally conservative but socially liberal". This betrays a deep misunderstanding of what systemic racism actually is. Many think racism is just using a bad word. It's not. It's the continued disenfranchisement of entires groups of people through economics, government policy and the police state.

fennecfoxy 3y ago

It's the FYIGM mindset; the advantages that previous generations had over later generations are now an aside, the next class divide is those who are inheriting something, and those who are not. Without inheritance, for the average Millennial and Gen-Z, they will currently not be able to afford buying a house. Also, don't bother trying to argue that buying a house isn't required; the system all previous generations has set up for retirement requires that you own a house. It's just now they cost $1M.

zdbrandon 3y ago
Looks like Gen Z is outpacing the previous two generations in home ownership. So this is likely a false prediction.
- fennecfoxy 3y ago
  I doubt that Gen Z are already purchasing homes without leaning on any inheritance at all.