5 ms·

> If houses ever return to good affordability I'm screwed. Which creates a huge pool of people who are opposed to making houses more affordable.

petesergeant 2y ago
100%, and it’s not clear there’s any solution to that, because voters will punish anyone who tries to fix it.
- tarkin2 2y ago
  Well, the renters will reward any government that pushes down house prices i.e. builds more houses. And I assume there are more renters than home owners.
  - floydnoel 2y ago
    but which group is more active in voting and politics?
    - tarkin2 2y ago
      I would assume home owners are more likely to vote. But even with a lower voter turn out, there could still be more voting renters. A sibling post has stats from 15 years ago but a lot has changed since then. My gut feeling is that more people are struggling to buy than to pay back mortgages but I have no stats to back that up.
      - Jensson 2y ago
        > But even with a lower voter turn out, there could still be more voting renters. Almost every country has more home owners than renters, so no. In USA its 65%.
    - switch007 2y ago
      Which group lives in cities where their vote counts far less than a vote in the countryside
  - qalmakka 2y ago
    It depends on the country or area unfortunately
  - carlosjobim 2y ago
    Renters do not want justice or fairness. They want to one day become landlords and themselves suck the blood of the young and healthy. "A slave dreams not of freedom, but of his own slaves."
    - morellt 2y ago
      ^^^ this I don't think people consider the fact that a very good portion of these landowners were once renters that worked their way up and don't want to make it easier for the ones who have to do the same after themselves. It's easy to point fingers from the bottom until suddenly you're looking down from the top and the view ain't that bad
      - robocat 2y ago
        > It's easy to point fingers from the bottom until suddenly you're looking down from the top and the view ain't that bad I wish we had specific words for this type of hypocrisy. Seeing people in wealthy USA complain about people relatively wealthier than them, rather than looking at their own wealth versus the poor in other countries. Obviously the poor in the USA aren't living the life of Reilly, but they're far beyond the wealth of the poor in India. How wealthy were the 99% Occupy Wall Street protesters? You can't make people see what they don't want to.
  - petesergeant 2y ago
    > The 2011 Census tells us … around 64% of UK households owned their home That’s not the same as the number of voters, obviously, but I’m not sure it’s a safe assumption, even before it gets into the actual voting dynamics from FPTP… there’s also presumably a lot of renters with their eyes on Mom and Dad’s home as an inheritance.
    - tarkin2 2y ago
      If they inherit the house they would be out of the mortgage casino and lower housing prices won't affect them so much. Of course it won't be as valuable as an asset, but assuming they are primarily using it as a house rather then an asset then lower housing prices may not significantly affect their voting behaviour.
      - petesergeant 2y ago
        > but assuming they are primarily using it as a house Unlikely unless they’re an only child
- graemep 2y ago
  The government might also be pushed into actions that reduce house prices for other reasons. The biggest reason for nigh house prices (particularly relative to incomes) is the affordability of mortgage payments as a result of low interest rates. Interest rates may have to be raised to control inflation. It is a mistake to think of supply vs demand as "how many people want a house" vs "how many houses are there". Both supply and demand are curves against price. Interest rates shift the demand curve. As the supply curve is inelastic it has an even greater impact in the short term
  - spwa4 2y ago
    ... and that's exactly what people want to keep (the shortage) because that's their pension. That is why they won't end up on the street in 20 years. Any attempt to fix the housing situation will need to provide owners, not just with housing, but with a passable income for 40+ years. So, the actual discussion is this one: https://www.youtube.com/watch?v=747X0M7Keyw https://www.youtube.com/watch?v=747X0M7Keyw And this discussion is hard because to just maintain current pension levels young people will need to be a LOT more productive (ie. work more, and keep less of the fruits of their labour) ... and if we're going to assign blame, the reason is that the pensioners refused to have enough kids. It's not really the kids' fault. We all know what's going to happen too, in general. Some economic upheaval, some drastic event will create enormous disruption and then, finally, it will be politically acceptable to make the hard choice.
    - robocat 2y ago
      > the reason is that the pensioners refused to have enough kids I thought they did have enough kids but that the next generation(s) need to breed faster. In New Zealand and Australia ~30% of population were born in another country. I suspect our government will try and fix the working-age population hole by more immigration? New Zealand is building houses (necessary when increasing population by 50% through immigration). You can see both higher density and new suburban growth (replacing farmland) in my city of Christchurch. It is silly to plan your retirement by looking at the situation right now. The economics of demographics will require grim changes. I'm sceptical of retirement funding, superannuation, and house sales. Even preppers seem like they have some sense. There's little information on potential solutions - everything is based on the presumption that decades away will be just like it is today. New Zealand property market is weird: https://www.imf.org/external/research/housing/ https://www.imf.org/external/research/housing/
- tmnvix 2y ago
  Politicians are not going to provide a solution, nor are private developers. The solution is a crash that can't be avoided. As hinted at, this could be caused by a sustained increase in interest rates. It has happened before and it will happen again. I would even go so far as to say it is already happening in some property markets (>30% down in real terms in my city already, with no end in sight).
thrance 2y ago
This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.
- hnthrow90348765 2y ago
  Making prices stagnant over 10-20 years would allow wages to catch up. This hurts speculators and finance way more than individual families and allows for a more gradual transition. It's probably only something you can fix across generations.
- willis936 2y ago
  Yes, but that doesn't mean the people who had houses that lost value are screwed. It just means that they didn't pocket as much profit as they could have. They bought a value and a rate they could afford. They're no more or less screwed if the value of the house goes down. They're screwed if they can't pay the mortgage. Lots of people are screwed by high housing costs. The only rational conclusion is to lower housing costs. I say this as someone paying a mortgage.
  - lazide 2y ago
    they certainly will consider themselves screwed.
- DrQian 2y ago
  A sharp fall in house prices might hurt some people, although the number who would be in negative equity is probably smaller than you'd think. A quick Google says only 28% of homes are owner occupied with a mortgage, and the vast majority of those will have paid off substantial capital. I think the premise is worth questioning though: It's true that many people have most of their wealth tied up in their house. But unless they want to substantially downsize, they can't access these savings. In general it seems bad that it's common for people to have most of their wealth in an illiquid, undiversified investment that they also live in.
scoofy 2y ago
The key here is incremental development. So, I'm really into municipal finance and fixing the housing crisis, which got me into Strong Towns. There is a solution, but it's not one that is going to make everyone happy (obviously), it is the state facilitating or even gently subsidizing incremental development. If everyone is, by right, allowed to build the next larger "unit" of housing (for simplicity's sake, suppose 2x sqft[m2], height, and housing units of the median residential building within a half-mile radius), but not allow to massively build piles of housing on one site, then we effectively solve both problems. Firstly, this allows for a massive amount of housing construction, with market incentives driving it. Out of the gate, you have the potential to easily double the housing supply. Secondly, the profits from the housing must be more-or-less distributed to the existing homeowners, and the potential to lower property values by building non-like for like housing doesn't exist. Neighborhoods slowly evolve, they don't rapidly change. Third, it incentivizes homeowners to build-to-last with the next stage of growth built in, because it's much cheaper in the long run to build a structure with the capacity to stack another unit on top than it is to tear down a building and rebuild the unit at double the capacity. Finally... and this is the thing that most people miss. It's fast. Smaller-scale developments need a much smaller planning phase, and there are many, many more of them to be constructed. This supports economies of scale, instead of the existing system, with all it's red tape that only allows a few actors to wade through the legal system for large developments. This should create a wide construction industry instead of a narrow one. I really think the housing crisis is solvable with the top level government insisting that incremental development be allow by right, and that larger scale developments be put up for local review. This allows a city to grow organically, instead of all at once, but only at specific sites.
- graemep 2y ago
  This is what the planning system in the UK prevents. It is complex to get permission to build, so it is done by property developers of landowners and for one large site at a time.
const_cast 2y ago
This is the problem with housing in general. Everywhere housing becomes an investment we see rampant NIMBY-ism and self-destructive local legislation.

petesergeant 2y ago

100%, and it’s not clear there’s any solution to that, because voters will punish anyone who tries to fix it.

tarkin2 2y ago
Well, the renters will reward any government that pushes down house prices i.e. builds more houses. And I assume there are more renters than home owners.
- floydnoel 2y ago
  but which group is more active in voting and politics?
  - tarkin2 2y ago
    I would assume home owners are more likely to vote. But even with a lower voter turn out, there could still be more voting renters. A sibling post has stats from 15 years ago but a lot has changed since then. My gut feeling is that more people are struggling to buy than to pay back mortgages but I have no stats to back that up.
    - Jensson 2y ago
      > But even with a lower voter turn out, there could still be more voting renters. Almost every country has more home owners than renters, so no. In USA its 65%.
  - switch007 2y ago
    Which group lives in cities where their vote counts far less than a vote in the countryside
- qalmakka 2y ago
  It depends on the country or area unfortunately
- carlosjobim 2y ago
  Renters do not want justice or fairness. They want to one day become landlords and themselves suck the blood of the young and healthy. "A slave dreams not of freedom, but of his own slaves."
  - morellt 2y ago
    ^^^ this I don't think people consider the fact that a very good portion of these landowners were once renters that worked their way up and don't want to make it easier for the ones who have to do the same after themselves. It's easy to point fingers from the bottom until suddenly you're looking down from the top and the view ain't that bad
    - robocat 2y ago
      > It's easy to point fingers from the bottom until suddenly you're looking down from the top and the view ain't that bad I wish we had specific words for this type of hypocrisy. Seeing people in wealthy USA complain about people relatively wealthier than them, rather than looking at their own wealth versus the poor in other countries. Obviously the poor in the USA aren't living the life of Reilly, but they're far beyond the wealth of the poor in India. How wealthy were the 99% Occupy Wall Street protesters? You can't make people see what they don't want to.
- petesergeant 2y ago
  > The 2011 Census tells us … around 64% of UK households owned their home That’s not the same as the number of voters, obviously, but I’m not sure it’s a safe assumption, even before it gets into the actual voting dynamics from FPTP… there’s also presumably a lot of renters with their eyes on Mom and Dad’s home as an inheritance.
  - tarkin2 2y ago
    If they inherit the house they would be out of the mortgage casino and lower housing prices won't affect them so much. Of course it won't be as valuable as an asset, but assuming they are primarily using it as a house rather then an asset then lower housing prices may not significantly affect their voting behaviour.
    - petesergeant 2y ago
      > but assuming they are primarily using it as a house Unlikely unless they’re an only child
graemep 2y ago
The government might also be pushed into actions that reduce house prices for other reasons. The biggest reason for nigh house prices (particularly relative to incomes) is the affordability of mortgage payments as a result of low interest rates. Interest rates may have to be raised to control inflation. It is a mistake to think of supply vs demand as "how many people want a house" vs "how many houses are there". Both supply and demand are curves against price. Interest rates shift the demand curve. As the supply curve is inelastic it has an even greater impact in the short term
- spwa4 2y ago
  ... and that's exactly what people want to keep (the shortage) because that's their pension. That is why they won't end up on the street in 20 years. Any attempt to fix the housing situation will need to provide owners, not just with housing, but with a passable income for 40+ years. So, the actual discussion is this one: https://www.youtube.com/watch?v=747X0M7Keyw https://www.youtube.com/watch?v=747X0M7Keyw And this discussion is hard because to just maintain current pension levels young people will need to be a LOT more productive (ie. work more, and keep less of the fruits of their labour) ... and if we're going to assign blame, the reason is that the pensioners refused to have enough kids. It's not really the kids' fault. We all know what's going to happen too, in general. Some economic upheaval, some drastic event will create enormous disruption and then, finally, it will be politically acceptable to make the hard choice.
  - robocat 2y ago
    > the reason is that the pensioners refused to have enough kids I thought they did have enough kids but that the next generation(s) need to breed faster. In New Zealand and Australia ~30% of population were born in another country. I suspect our government will try and fix the working-age population hole by more immigration? New Zealand is building houses (necessary when increasing population by 50% through immigration). You can see both higher density and new suburban growth (replacing farmland) in my city of Christchurch. It is silly to plan your retirement by looking at the situation right now. The economics of demographics will require grim changes. I'm sceptical of retirement funding, superannuation, and house sales. Even preppers seem like they have some sense. There's little information on potential solutions - everything is based on the presumption that decades away will be just like it is today. New Zealand property market is weird: https://www.imf.org/external/research/housing/ https://www.imf.org/external/research/housing/
tmnvix 2y ago
Politicians are not going to provide a solution, nor are private developers. The solution is a crash that can't be avoided. As hinted at, this could be caused by a sustained increase in interest rates. It has happened before and it will happen again. I would even go so far as to say it is already happening in some property markets (>30% down in real terms in my city already, with no end in sight).

thrance 2y ago

This is the thing I never see addressed. Wouldn't fixing the housing crisis necessarily involve slashing down property values? Which are for a lot of people their only form of savings? Genuine question by the way, I would like an answer.

hnthrow90348765 2y ago
Making prices stagnant over 10-20 years would allow wages to catch up. This hurts speculators and finance way more than individual families and allows for a more gradual transition. It's probably only something you can fix across generations.
willis936 2y ago
Yes, but that doesn't mean the people who had houses that lost value are screwed. It just means that they didn't pocket as much profit as they could have. They bought a value and a rate they could afford. They're no more or less screwed if the value of the house goes down. They're screwed if they can't pay the mortgage. Lots of people are screwed by high housing costs. The only rational conclusion is to lower housing costs. I say this as someone paying a mortgage.
- lazide 2y ago
  they certainly will consider themselves screwed.
DrQian 2y ago
A sharp fall in house prices might hurt some people, although the number who would be in negative equity is probably smaller than you'd think. A quick Google says only 28% of homes are owner occupied with a mortgage, and the vast majority of those will have paid off substantial capital. I think the premise is worth questioning though: It's true that many people have most of their wealth tied up in their house. But unless they want to substantially downsize, they can't access these savings. In general it seems bad that it's common for people to have most of their wealth in an illiquid, undiversified investment that they also live in.

scoofy 2y ago

The key here is incremental development. So, I'm really into municipal finance and fixing the housing crisis, which got me into Strong Towns. There is a solution, but it's not one that is going to make everyone happy (obviously), it is the state facilitating or even gently subsidizing incremental development. If everyone is, by right, allowed to build the next larger "unit" of housing (for simplicity's sake, suppose 2x sqft[m2], height, and housing units of the median residential building within a half-mile radius), but not allow to massively build piles of housing on one site, then we effectively solve both problems. Firstly, this allows for a massive amount of housing construction, with market incentives driving it. Out of the gate, you have the potential to easily double the housing supply. Secondly, the profits from the housing must be more-or-less distributed to the existing homeowners, and the potential to lower property values by building non-like for like housing doesn't exist. Neighborhoods slowly evolve, they don't rapidly change. Third, it incentivizes homeowners to build-to-last with the next stage of growth built in, because it's much cheaper in the long run to build a structure with the capacity to stack another unit on top than it is to tear down a building and rebuild the unit at double the capacity. Finally... and this is the thing that most people miss. It's fast. Smaller-scale developments need a much smaller planning phase, and there are many, many more of them to be constructed. This supports economies of scale, instead of the existing system, with all it's red tape that only allows a few actors to wade through the legal system for large developments. This should create a wide construction industry instead of a narrow one. I really think the housing crisis is solvable with the top level government insisting that incremental development be allow by right, and that larger scale developments be put up for local review. This allows a city to grow organically, instead of all at once, but only at specific sites.

graemep 2y ago
This is what the planning system in the UK prevents. It is complex to get permission to build, so it is done by property developers of landowners and for one large site at a time.

const_cast 2y ago

This is the problem with housing in general. Everywhere housing becomes an investment we see rampant NIMBY-ism and self-destructive local legislation.