23 ms·

I've posted in another thread about this but what interests me primarily is how housing has changed over time. In 'ancient history', it's fairly well known tha

• whybroke 12y ago
  The retirement systems is utterly inadequate and pensions are non-existent. Thus the middle class is entirely dependent on effectively a housing ponzi scheme to avoid squalor (or even homelessness) in old age. So they will always fanatically, desperately vote to raise property values whatever the long term consequences. Even more importantly, mortgage holders and other large institutions have a vested interested in raising property values and will guarantee that polices drive that. Obviously housing prices can't outpace wages forever so one generation, probably the current one, is going to be screwed with houses that can't raise enough in value and yet have no real retirement security.
  • kimdouglasmason 12y ago
    Even better, once house prices stop outpacing wages and the average Joe realizes, we'll be in the situation where it is much cheaper to rent than buy, and stuff the difference into an index fund, which will yield much better than housing capital gains. At that point, you're looking at long term house price declines which only stop when buying becomes cheaper than renting. The next 30 years are not going to look like the previous 30 in the west. However, consumer goods will keep getting cheaper.
• saalweachter 12y ago
  Well, there's also a question of what you're getting for your money. A ten-by-ten one-roomed shack with a stove in the middle, no running water, no bathroom and no foundation can be had for about a few thousand dollars, and if you put it on an undesirable quarter acre in the middle of nowhere the land will cost you another thousand. A well-built small home, a few hundred square feet with a well, a septic tank, electricity and the appropriate four or five rooms will cost you thirty to fifty thousand dollars. The problem isn't just economics or regulations or technology; it's also one of standards and social status. I'm willing to wager that far more people buy a big expensive house because either they want the extra features -- air conditioning, plumbing, and enough bedrooms and bathrooms to qualify as a small mansion -- or because they want to impress their friends, family and neighbors, than do because the market doesn't make small, cheap houses available.
• stegosaurus 12y ago
  Adding to this; I could totally conceive of a situation in which I could end up homeless but still rocking a modern smartphone - because it just simply is an irrelevant expense in the grand scheme of things. It'd buy me 2 weeks worth of food and shelter, in exchange for losing my 'window on the world'.
  • richardbrevig 12y ago
    I've seen homeless youth charging their phones at outside outlets.
  • brazzy 12y ago
    And if that amazes you it marks you as old - because you remember a time when a mobile internet device was a frivolous luxury rather than a not-cheap-but-not-truly-expensive necessity. Ancient people can be recognized for having the same attitude about cell phones in general :)
• 0942v8653 12y ago
  I doubt it. You can't exactly mass-produce houses or land, so it seems that the gap will only grow as factory efficiency rises.
  • dalke 12y ago
    Average size of a home in the US is 2,600 sq. ft (2013), says http://money.cnn.com/2014/06/04/real_estate/american-home-size/ http://money.cnn.com/2014/06/04/real_estate/american-home-si... . 40 years previous it was 1,725 sq. ft. The number of people per household has dropped, though only by a little. (2.63 now and 2.7 in the early 1980s. FWIW, in 1950 it was 3.37. See http://www.infoplease.com/ipa/A0884238.html http://www.infoplease.com/ipa/A0884238.html and http://quickfacts.census.gov/qfd/states/00000.html http://quickfacts.census.gov/qfd/states/00000.html .) So something has changed to encourage people to buy larger homes for the same number of people.
    • stegosaurus 12y ago
      I've never really found looking at the 'average' (be it median or mean) experience to be very useful here, though. In the UK something like 30% of homes are owner occupied with no mortgage. But at the bottom, millions are completely stuck struggling to even pay the rent, never mind even think about saving any money or getting the income multiplier / job security / deposit required to start along that path. Far more relevant is how accessible the bottom rung is, and whether that top portion (and so the average) are simply propped up by legions of modern day serfs. In the UK in particular I'd be happy to build a wooden shack on a bit of agricultural land near to some utilities, maintain it well and stay out of others' way. Capital costs would be incredibly low. But then there are the costs of jumping through regulatory hoops. Or simply being shut down by a judgement that your society says you have to live in a city at ten times the cost, or else. Our version of poverty is 'death by bureaucracy'. The welfare state has created a situation in which many are simply incapable of fending for themselves - and the results when the state turns its back (google for 'UK benefit sanctions' for more information) are truly despicable.
      • dalke 12y ago
• sosborn 12y ago
  >An utterly imaginably spectacular device. Maybe, but it is also entirely unessential. Nobody has to sell you on the need for a roof over your head.
  • rithmoflife 12y ago
    Nobody has to sell you on the need for being connected to society, which is why millions of people living in wretched conditions spend what little they have on cell phones. And while shelter is necessary for survival, most of the walls, rooms, windows, wires, etc. of a modern home are entirely unessential.
• spcoll 12y ago
  As the trend towards urbanisation (rural flight) continues worldwide, and as population continues to grow, the rent isn't going to get any cheaper in the decades to come, anywhere. Even imagining that 3D printing techniques can significantly cut down the cost of new construction (as is starting to happen in China), land scarcity will be the overriding factor. Save building cities on the ocean, we can't escape it.
  • nugget 12y ago
    There's plenty of land, the problem is that everybody wants to be in the same dense urban cores. Drive 3-4 hours north or south of San Francisco and you have lots of cheap, beautiful coastal land available.
    • bagels 12y ago
      Where, specifically, 3-4 hours south is the coastal land cheap?
    • jekdoce 12y ago
      Inspired by this comment I actually spent 30min looking on Redfin. Most of the coastal land I found is listed for around $1-2M (for ~1 acre), from SF area down to LA. Check it out! I was actually pretty surprised by this.
      • pimlottc 12y ago
        I really can't tell whether you find that to be surprisingly cheap or surprisingly expensive.
  • stegosaurus 12y ago
    Are we really short on land, though? It strikes me that by combining building high-rise blocks with expanding out into the countryside we could manage it. The planning situation in the UK (which is a particularly dense country) seems utterly despicable to me at present. The game being played is essentially 'haves' bemoaning the loss of small amounts of countryside while 'have nots' are stuck paying dramatic portions of their income to the former group. Add to that the long arm of the law (buy a field and stick a trailer on it? expect a visit) and it's almost dystopian. (please read my comments if you're interested more on the UK situation - others have shown me that in the US rural land is actually affordable, if you have savings)
• BerislavLopac 12y ago
  We already are there; this is pretty much the situation in most of the world.
• nsxwolf 12y ago
  Out here in the Midwest, my quarter acre plot didn't cost a whole lot - but the house itself cost a fortune in materials and labor. Maybe I wouldn't have needed a 30 year mortgage if the place could have been 3D printed with novel materials. I'd still need a job to pay my property taxes, but wouldn't have to bust my ass as much.
• deleted 12y ago
  [deleted]
• qopp 12y ago
  As others have said, you can machine print cars, laptops, and phones, but you can't machine print desirable land. The price you pay for rent is the price to keep everyone else off of that land for some period of time (or 1000x that to gain the right to 'own'). The idea is that if you can't afford the cost, you should give up that space to someone who can (presumably is making more money). Resource scarcity is a "hard" problem, and the hard truth is that because something aren't unlimited, not everyone can get what they want. There may come a day where we can't feed everyone.
• jseliger 12y ago
  Will we ever get there? At the moment, political and regulatory barriers dwarf technological ones, per Yglesias in The Rent is too Damn High: http://www.amazon.com/dp/B0078XGJXO http://www.amazon.com/dp/B0078XGJXO. In many areas, building with century-old technologies like steel frames and elevators is effectively illegal. Where it isn't illegal, the approval process is often so cumbrous that it substantially raise the price of building: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-of-two-town-houses/306334 http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o.... We as a society have chosen to make a lot of housing very expensive.
  • iopq 12y ago
    No, the people who own houses have chosen to make them expensive. Because it is expensive, those people are quite rich. This gives them political power to make it more expensive. See: San Francisco regulations on construction.
    • hueving 12y ago
      It's a terrible feedback loop. Nobody who owns a house in SF in their right mind would vote for anything that could substantially decrease the value of their home.
      • JulianMorrison 12y ago
        The fix: (1) government re-regulates building to be easier and land to be more available, causing a housing boom. (2) government guarantees every house's value as it was before the reforms. If the value falls, government pays the difference. (3) Government raises a tax to pay this all off.
        • iopq 12y ago
          This is why we can't have nice things. Raise a tax to guarantee that the richest people keep being rich? Do not want.
      • 12y ago
• jseliger 12y ago
  Will we ever get there? At the moment, political and regulatory barriers dwarf technological ones, per Yglesias in The Rent is too Damn High: http://www.amazon.com/dp/B0078XGJXO http://www.amazon.com/dp/B0078XGJXO. In many areas, building with century-old technologies like steel frames and elevators is effectively illegal. Where it isn't illegal, the approval process is often so cumbrous that it substantially raise the price of building: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-of-two-town-houses/306334 http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o.... We as a society have chosen to make a lot of housing very expensive.
• vacri 12y ago
  People will spend their money somewhere. As everything else gets cheaper, they dump more of their money into accommodation.
• dagw 12y ago
  housing has rocketed out of proportion around the Western world whilst other goods have become basically irrelevant. Only if you want to live where everybody else wants to live. I mean if I really wanted to I could sell my small flat in town and buy a nice enough house for less than 20% of what I got for my flat. The only problem is that the house would be in the middle of nowhere and I don't want to live in the middle of nowhere.
  • hueving 12y ago
    >Only if you want to live where everybody else wants to live. There is no such place where everyone wants to live. SF is desirable to only a very small percentage of the population. Yet it has some of the highest housing costs in the world. All it takes is an imbalance of supply for the demand. If there are only two houses available in a location that 200 people are interested in, they are going to go for very high prices regardless of what the rest of the world thinks of them.
    • PeterisP 12y ago
      There are places where you can't afford to live even if housing costs zero - if "noone wants to live there" then after a single generation, the place has no jobs, no nearby infrastructure (schools, social services, etc), and all the goods and services cost more (if available at all) than in the affluent regions simply due to lack of economies of scale. This is a big problem in some areas, where urban regions have a lack of housing despite a construction boom, while rural regions have empty houses available for 20-30% of what it would cost to build a similar house. If I moved to a place like that, the extra cost in time and fuel in driving myself and (especially) the kids between there and a reasonable city would be much greater than what I currently spend on housing.
• notahacker 12y ago
  You can afford to put a roof over your head without hustling 8 hours a day. Even in the UK you can get two bedroomed terraced houses for the equivalent of around 20 decent-spec MacBooks, or less than a basic-spec Vauxhall Insignia. Or 25 years worth of drinking Starbucks on a daily basis The compromise is that your house is in Burnley or Accrington with an oversupply of housing, rather than the South East, with an oversupply of purchasing power seeking to get on the property ladder.
  • stegosaurus 12y ago
    Thank you for the tip on Burnley/Accrington, I genuinely appreciate it and will be looking into it more. Quite a bit cheaper than the North East, I was looking at about 60-70K GBP for ex council. Would leave a lot more leeway for a lower paid job. It doesn't really help that much though, unless you're willing to live hundreds of miles from family, friends, potentially split with your partner, etcetera. The decent spec MacBook chat is interesting if you're a well paid worker, but not really otherwise. I can't see myself ever buying a full price MacBook or a new car unless my situation changes dramatically. It's not really even the pricing that bugs me as much as the complete lack of understanding demonstrated by the Government. Every single policy is aimed at inflating house prices to the sky seemingly indefinitely.
• elsporko 12y ago
  The business model for a laptop and technology in general has become one of planned obsolescence. Products need to be cheap so that a new one can be purchased in a short time. I do not necessarily subscribe to that notion myself. My phone is a Samsung Fascinate that was purchased in 2010 and runs Froyo. I have no tendency toward latest and greatest however I do not dictate the market either. You make an interesting point on housing.
  • sliverstorm 12y ago
    The planned obsolescence came from the huge strides the market was making. I don't care that old Pentium 3 chips don't last for fifty years, because they are already relics twenty years later. Making consumer goods bombproof when they will be comically obsolete in a decade or two seems like a waste of time, money, and resources.
• segmondy 12y ago
  Yes you can, but you don't want to. You can afford $1 houses, come to Detroit. But no, you probably rather live in silicon valley or New York.
  • ctdonath 12y ago
    An amusing exercise is to visit http://zillow.com http://zillow.com and search for properties <= $10000, $1000, $100, $10 & $1. You have to dig thru a lot of distractions, but in some large areas you can find some reasonable options (given circumstances).
  • Kiro 12y ago
    I don't understand how a house can cost $1. What prevents me from buying 100 of $1 houses just for fun? Seems like a pretty decent investment if nothing else.
    • zaroth 12y ago
      > What prevents me? Property taxes.
    • nawitus 12y ago
      I believe you would have to pay property taxes on these houses.
    • brc 12y ago
      Some of them have local ordnances on them that requires money to be spent on fixing/securing.
    • pimlottc 12y ago
      Other people have answered that question for you, but I'd also like to point out that a number of cities have had problems from far-off speculators buying up dirt cheap properties and then failing to maintain them or pay taxes. In one case, it may have contributed to a gas explosion in an abandoned house in Cleveland: http://www.ideastream.org/news/feature/long_distance_ownership_contributes_to_home_explosion http://www.ideastream.org/news/feature/long_distance_ownersh...
• crimsonalucard 12y ago
  You describe a paradox. The cheap laptops and Android devices exist only because the population is manufacturing the devices by hustling 8 hours a day to keep a roof over their heads.
  • learnstats2 12y ago
    The parent suggested he would prefer a world where housing was cheaper but was willing to concede that electronics could be more expensive. Not a paradox.
• crimsonalucard 12y ago
  Also I want to mention that it is unlikely we will ever get "there" as property is not a good that can be mass produced. If I spend 1 million dollars designing a phone, I only need 20 dollars to instantiate a physical model. Property cannot be instantiated. It is only bought, sold, taken or discovered and there's no more left to discover.
  • ANTSANTS 12y ago
    Land cannot be mass produced, but dwellings certainly can be. There is plenty of unused or underutilized land in the US waiting for a high-rise to be plopped on it.
• davidf18 12y ago
  The high cost of housing is caused by "rent seeking" -- a microeconomics term in which politics rather than wealth creation is used to increase someone's wealth. Harvard economist Edward Glaeser and many others have written about this. Zoning is used to regulate housing density and overuse of historic landmark preservation both artificially increase the price of land. Thus, landowners with billions of dollars in property are made all the more wealthy.
  • a8da6b0c91d 12y ago
    Middle and upper class people are always desperately trying to figure out ways to keep people with anti-social tendencies out of their neighborhoods and away from their kids. As it stands in America there's no legal mechanism to banish annoying people, as was the historical way to handle this. Lower income is a very flawed but still useful proxy for criminal or otherwise annoying tendencies. So you get folks everywhere consistently trying to erect cost barriers to housing, because affordability excludes lower income residents. This is in reality one of the main reasons for the original suburban flight. The cost of car ownership necessary for suburban residency excluded social elements the new suburbanites were trying to evade. If somehow there were a legal mechanism where people on a block could collectively say "No, these people aren't allowed to move in. Go away." Then housing would be way, way cheaper. Nobody would have nearly so strong an interest in driving up prices with artificial scarcity.
    • jjoonathan 12y ago
      > Nobody would have nearly so strong an interest in driving up prices with artificial scarcity. Except for the people who own the houses and want to see them appreciate.
  • Terr_ 12y ago
    > The high cost of housing is caused by "rent seeking" -- a microeconomics term in which politics rather than wealth creation is used to increase someone's wealth. I disagree with the term "politics" here, because rent-seeking behavior is much broader and can involve other tactics.
• zaroth 12y ago
  The "cost" of a house is not the sticker price! Due to mortgages and resale market and inflation and such the actual cost of a house is two things; 1) taxes, 2) upkeep. Better materials will continously reduce upkeep over time so it's really just taxes and utilities. You really don't need to hustle 8 hours a day to own a house. You need to pick one and live in it for 60 years or whatever and then give it to your kids and then they give it to theirs, etc. It doesn't jive with modern western culture, but if the first things you did after high school wasn't to pile on x-million of consumption for college, housing, wedding/honeymoon, a whole new set of 'stuff', etc. then there would be little need to work at all.
  • sliverstorm 12y ago
    It also helps a lot if you're cool with picking a house that isn't in the middle of the United State's most popular cities. As best I can tell, demand for property in San Francisco, Manhattan, etc has never been higher. The affordable homes of yore were not located in Times Square.
    • brandonbloom 12y ago
      You're clearly not from New York because I don't know anybody who would willing choose to live in the theater district. Your point is taken, but you might want to choose a different example neighborhood.
      • sliverstorm 12y ago
        Yup, not from New York. Thanks for the note.
      • ericd 12y ago
        I have a friend who has a huge apartment on W 47th street, complete with a good sized backyard, but because of the location, the rent is surprisingly reasonable. That's obviously an exceptional case, but there are also pretty good restaurants on 9th ave, and great access to all the subway lines.
• bane 12y ago
  I think another interesting bit is how little other stuff we're buying now. I'm finding it's becoming harder and harder to find birthday and christmas presents for friends and relatives...once you have a decent computer and smartphone, so much other stuff simply becomes irrelevant. Thinking back 20 or 30 years ago, there simply used to be many more kinds of things that people would buy. As a child I had a toy closet full of games and toys of infinite variety. My friend's kids all seem pretty happy with a tablet and maybe some legos and that's about it.
  • Domenic_S 12y ago
    Lego are still a thing! My friend and I discovered this. He bought me the Imperial Star Destroyer set for my birthday. We drank whiskey and built it all night -- it was one of the best nights I've had recently!
    • sjtrny 12y ago
      I'm jealous of that giant rock you're living under. How did you avoid the marketing campaign for the lego movie?
  • joelhooks 12y ago
    This is interesting in that I look at all the crap my kids have and was thinking the exact opposite. I had a handful of things. A few games. A few outfits. These kids have piles of stuff (alongside their laptops, smartphones, and consoles). We are always throwing out/donating stuff too. Maybe they are just spoiled...
  • minthd 12y ago
    True. This article gives further support to this: Teenagers Favor Tech Over Clothes http://www.nytimes.com/2014/08/28/business/less-prep-more-plugs-teenagers-favor-tech-over-clothes.html http://www.nytimes.com/2014/08/28/business/less-prep-more-pl... Tl;dr teens buy less clothes, prefer tech, and restaurants. Why restaurants ? because of the wifi.
• graeme 12y ago
  A bit part of it is that people like to live either in the center of things, or out at the edge with a nice green property. That makes much of the in between land non valuable. New York City has property worth almost a trillion dollars. That would be the economic return if someone could clone the city. But we can't clone the city. We can only build out along the edges of existing cities. Or try to build dense in the middle and complain about regulations. Why not grow smaller cities into New Yorks? Because the core of New York was built at a time when we built differently. Cities grow differently now thanks to cars, and it's very hard to build a new old city. So places in the middle or on the edges of old cities are expensive. There are many places you could live for very little, but who wants to live there?
  • ericd 12y ago
    What's preventing people from making dense, mixed-zoning walkable cities with good public transit like NYC elsewhere? Why it a requirement that cities have their commercial areas mostly separate from the residential areas?
    • jekdoce 12y ago
      I remember a few years ago I saw a 7000 acre piece of land in eastern CA for sale. The price tag was $7M. How hard do you guys think it would be to convince a good group of people with diverse skills to go out there and start a small city? All initial people get a piece of land for very cheap or free. Later movers get smaller pieces, etc. Like a startup with equity.
      • ericd 12y ago
        I'm not really sure, I'm guessing you could get at least a small group of people to come. I'd consider it if it had a high proportion of geeks, seemed well managed, had good infrastructure (things like water rights, proximity to an airport, Amazon service, fiber to the home, good schools, etc), and wasn't too expensive. I don't think you'd have to make it free - you could probably make a tidy profit off of getting services hooked up and then subdividing the land, and still providing people a better place to go.
• snowwrestler 12y ago
  You can buy a house for literally $1 in several neighborhoods in Detroit right now. Perfectly livable houses are available for the cost of a few MacBook Pros in other depressed cities and towns. I think the issue is really that the places you want to live are also the places lots of other people want to live--not that the absolute floor on housing costs has risen so far. In ancient history the people who lived 10 to a house also rarely owned the house or land where they lived. Either they lived in a society with little organized sense of individual property rights (really ancient history), or they were sharecropper tenants on some lord's land. Not so different from young people in a popular metro area today, except that back then there was almost no possibility of ever changing their lot in life.
  • zrail 12y ago
    As with most things, the one dollar Detroit houses are far more complex than that. For example, typically you will pay taxes on the appraised value rather than the one dollar. You're also buying into a neighborhood with little in the way of city services, although the city is working on that.
• visural 12y ago
  As with the shirt example in the original article, the cost of labour (i.e. paying people for their time) represents the majority of the cost in building a house. The other items you list are using cheaper overseas labour in their construction, whereas if you're building a house by definition you need to pay local craftspeople for their time. Also due to their physical size, houses require lots of people to put together (i.e. the time is in some sense proportional to size of the item being constructed).
• ommunist 12y ago
  Land in the city is a scarce resource. You can have a very cheap house in Siberia. Will you move there? I doubt.
• fleitz 12y ago
  We are already there. See Detroit.
• Shivetya 12y ago
  people buy too much house. Its as simple as that
• ap22213 12y ago
  Two thoughts. First, I'm currently in the process of remodeling my basement. And, it's quite expensive. What I'm spending on remodeling 1500 square feet is approximately the cost of 5 inexpensive cars. Although some of these costs have come from the building supplies, most of the costs have come from labor. Labor in expensive areas is more expensive. But, then the cost of land is expensive. There are network effects. Upper-middle income people want to live around people like them. Educated people want to live around other educated people. Educated people want to live in nice climates, in places where they can go out into nature, where they can have ready access to nice shops, art galleries, clean cafes, etc. There are not enough of these types of areas to meet the demand. Alternatively, one can buy an old house in a rust belt city for $25,000. People don't want to move there. It's cold, the people are less educated, there aren't fancy shops around, no good coffee, no hiking, no pleasant strolls around the neighborhood. There are fewer high-paying jobs. In a rust belt city, you can build a brand new house for less than $90 a sq-ft. Sure, it won't have the nicest fixtures, but you can. In rural areas, outside of the rust belt, you can buy an acre of land for $1000. You can build a nice place for under $100,000. But, do educated, upper-middle income people want to live there? Some possible solutions: 1) reduce the costs of building. Services should pop up that import labor from less expensive areas. The rise of more modular housing, 3D printing of houses, etc. should lessen the costs. 2) create more areas where upper-middle income, educated people want to live. This is harder, because there needs to be jobs, first. It's a chicken/egg problem. How do you get employers to set up shop where there aren't any educated workers?
• throwaway90999 12y ago
  " A brand new Android flagship for the price of a months' rent. An utterly imaginably spectacular device." But this isn't an utterly imaginably spectacular device. It's merely a run of the mill consumer-grade portable computer according to modern standards. Your rent would be insignificant compared to, for example, the cost of a truly spectacular computer by modern standards, such as a modern search engine cluster with a price tag of perhaps a half billion dollars not counting ongoing opex.
• tormeh 12y ago
  Think of it this way: Whenever residents in a sought-after area get cheaper computers, that means they have more money. Since everyone (also outside the area) gets more money that means they have more money to pay for housing. And voila! The prices of housing in the desired area rises and all savings are gone. Since desirable land is a limited resource, it's' price will simply rise with people's ability to pay for it.
  • sanderjd 12y ago
    I agree that the price of land is a tough nut to crack, but the cost of actually building stuff on that land could be reasonably expected to fall at a rate similar to the rate of other manufacturing. That it hasn't is, I think, largely because we build buildings right where they end up, so we can't take advantage of the efficiencies afforded by assembly lines and outsourced labor. This mostly seems like a good thing to me. The notable exception is trailer homes, for which the price of the land really does dominate the cost.
• scottlocklin 12y ago
  "Will we ever get there?" Sure; move to Wyoming. San Francisco Bay Area and NYC do not reflect reality in the rest of the country, let alone the world.
• blueskin_ 12y ago
  >I'd much, much rather live in a world in which a laptop was a huge expense that I could only literally afford once every few years, but to be able to afford to put a roof over my head without hustling 8 hours a day. I'd rather have the opposite, to be honest. Houses are affordable because there are mortgages; most people need lots of hardware in their life and only one house.
• kbart 12y ago
  Who would be slaves then if not decades of mortgage or expensive rent? Nobody (with power) wants people to be too free and happy, because that won't make them work; only pressure will (physical in less advanced countries or economical in more so).