OK, there's some data but were's the insight? If millennial move out, does that mean that as the current population ages out, post-millennials all stick around / move in or does it mean they'll become dead zones of old people? A vibrant environment needs a mix of ages (and other demographics).
> The affluent and the talented are flooding into superstar cities and tech hubs, creating a vicious competition for space that is pushing out the young, the less advantaged, and those who do not own homes, reinforcing the deepening class divides in our cities.
The author managed to jump to this conclusion without actually offering any evidence for the claim, or even entertaining other explanations of the trends seen in the data.
Likewise I can claim that millennials are leaving because baby boomers have rigged the housing market in their favour, saddled them with debt by hollowing-out funding for education, placed an undue tax burden on them via property tax controls, and locked-out up to 80% of the rental market in some cities via rent control, which allows older generations to avoid participating in a fair market and massively inflates prices in the remaining 20%.
But no, it's talented people's fault, apparently.
When the previous generation has kicked away the ladder, why are we surprised that those following them can't climb upwards?
People often fail to get this. Just because you can see a trend in data does not mean a hypothesis is proven. You'd have to have said hypothesis based on some other reasoning/empirics and then go searching for data to test the hypothesis.
That's not how science works. The data is given and you test your idea against that. You are not allowed to 'search for data' to prove the hypothesis because that leads to bias errors.
You should phone up CERN and tell them to call off the search for the higgs boson.
Karl Popper may have prescriptively described science as working in one particular fashion, but in the real world it doesn't work that way at all, when you look at what scientists actually do.
For tangible objects I agree. This thread is originally talking about social issues however. Social issues can be hypothesized in any way because there is such a wide variety of human behavior.
The Higgs is what Popper called a "risky prediction" in his writing. Not seeing a spike (the expected outcome without the theory) would have falsified it, so it qualifies as science. You could say that 125 GeV was one of a few different predictions, but it was still risky to predict a spike somewhere around there.
Also the hardcore Popperians will reply that many people who the mainstream considers scientists don't actually do science ;)
He may have worded it slightly awkwardly, but the point is that you're looking to predict results, not pluck them from datasets.
If you start with data, and then look for patterns you can almost always find them. Whether they are predictive is what you're trying to understand.
I would also note that he didn't say 'discard data that disagrees with the hypothesis', which I think is what you're commenting on. This is as you correctly point out dangerous, and not how you science.
The generation before the boomers ("greatest") had a tough time going through the depression and WWII. But after that their quality of life rose substantially into the 1970s. Since then it's mostly plateaued.
It was the greatest generation who turned their back on progressive taxation and properly funding state affairs in the late 1970s - but it has been the boomers who mostly reaped the benefits.
That depends... food is generally abundant, and though less cheap than a few years ago, still far less than before WWI in terms of percentage of income. Technology and the opportunity to learn almost anything has never been better.
Beyond that, it comes down to upbringing and lifestyle, of which I kind of feel the millenials have been coddled much more as a general statement that prior generations. This may well mean higher rates of depression, which can greatly affect the perception of quality of life.
Both of my grandmothers grew up on farms, and have a very different view of the world than the generations that came after mine (I'm GenX). It's a matter of perspective as much as anything.
My only advice to those in their late teens, is if you go to college, make it for something practical and ideally that you enjoy... minimize you debt, and prefer the cheaper route as opposed to what you think might be a better option, with few exceptions after 5 years of graduating, it probably won't matter, but you'll be much happier without a debt you can't declare bankruptcy on that's a multiple of your expected annual salary for your chosen career path.
Few people can get by and be successful without college... making it into the top 5-8% of wage earners is the top 1% for people who don't have an education beyond high school.
In generations past, many people moved for other chances, and opportunities... I don't see this as all that different really.
I'd say neither. I don't understand these generation labels?
I guess I'm a baby boomer. I was born in the 70's. I was a kid during Vietnam war, and Korean War. Growing up, I was scared of Russia, and the bomb. As a college student, I was glad I didn't have to deal with a draft, only signing up for selective service.
The thought of owning a home always seemed like a pipe dream.
I thought the only way I could own a home is maybe in Lake County. In other words, a vacation home in the middle of nowhere. I could no way afford my dad's home. I can still buy a hot box in Lake county for what it cost 20 years ago.
Unless you were a networking, butt sniffer you didn't just automatically land that great job out of college. Oh yea, guys like me thought little of networking. "Why would I like a person, just because they could do something for me?" On the other hand, my wealthy sister went after those who could further her career like Sheen to drugs. She is a bit of an odd ball though. She was so greedy, she took all my mother's money. I'm so tempted to out her, but can't.
Growing up, we did have access to more jobs--mainly lousy jobs. Even the college corporate jobs were not great. I had two, and traveled a lot. It was not fun. I hate hotel rooms, and airlines. The real stepping stone in life was a wealthy father. I don't think that's changed much. Those kids got the right advice. Those kids got the right loans. They got to take on risk? They are in houses, and have stock portfolios now.
The way I see it, the labels are not productive. At least don't include my generation with my father's. My father was a real baby boomer, but he was born in 1938. If you didn't want to go to college, you just went into a union trade. You bought a house, and had kids. You drank, and smoked a lot--and didn't have to worry about dying from sex. Life wasen't bad.
My generation and my father's were completely different. I looked at my father as a spoiled kid. I thought he had all the opportunities, and he didn't explore them.
Again, as to generation labels, I wish we would stop using them, or at least get the dates in order. My best friend is a gen X'er--I guess. I recall the first time we even talked about our "different" generations. There were no differences. I will admit there's a difference between my generation and Millenials. Millenials know much more than I did growing up. We were Naive. Housing was always terrible for all of us. Wasen't it my generation that coined "living in the parent's basement?". Believe me--housing has always been bad. Now--in the Bay Area it is beyond bad. I will give Millenials that, I have never seen housing prices like this, but as Stanley Druckenmiller pointed out today, he sees a big kaboom comming up. You rich kids will get your house.
(I won't be back to argue. I don't think I said anything worth arguing over. I'm getting over Shingles. I can pass this along. If you ever get a weird pain in your back, and notice a weird rash; go right to a doctor--if you have one. Mine is 20 miles away. I'd even go to the emergency room, and ask for the antiviral. It cuts the infection down to 50 percent, and side effects, like neuropathy. You have around three days. I've been down for 3.5 weeks now. In a lot of pain. I used to think I could handle physical pain, but this malady is really irritating.)
If you don't see yourself or your dad in their labels, that's OK. But there's no need for guessing. Per Wikipedia: Baby boomers are people born during the demographic post–World War II baby boom approximately between the years 1946 and 1964. So neither you nor your dad are in that cohort.
Lord knows if the marketing industry has ever found these conjectures from their gurus to have ever been useful. Mostly they're hoping to find some generalized commonality based on presumed shared experiences that come from being born into then living through a certain span of history, however recent. And from that they further hope to be more effective at selling things, from soaps to political candidates.
It's hardly science, they're simply reaching for a good "80/20" rule.
To clarify generational labels, if you were born in the 70s, you were likely the child of a baby boomer, not one yourself. You were most likely part of Generation X.
> I guess I'm a baby boomer. I was born in the 70's.
You're Gen-X, not a Baby Boomer. Lots of generational discussions these days focus on Millenials vs. Boomers and ignore Gen-X entirely, but insofar as the contrasts drawn have validity, Gen-X is in many ways a lot more like the Millenials than the Boomers.
> I was a kid during Vietnam war, and Korean War.
Unless this a technical reference to the fact that the Korean War never formally ended, this contradicts the preceding: the armistice which ended the active phase of the Korean War was signed in 1953. If you were born in the 1970s, you weren't a kid during the Korean War, as that term is usually used.
> At least don't include my generation with my father's. My father was a real baby boomer, but he was born in 1938.
Baby Boomer refers to the post WWII baby boom, those born 1946-1964.
It seems worth mentioning that for all of the advances we have made in medical science, and all of the reduction we have seen in violent crime, for perhaps the first time in history we are actually seeing lifespans in the United States actually <i>decrease</i> for certain demographics. The life expectancy for uneducated white Americans today is lower than it was in 1990.
The comment from dang is pretty far back. Seems he kept turning comments into speeches about ex girlfriends. But I didn't spot anything terrible but then again I didn't read many and don't know how those comments read in context.
Our lives are a lot more comfortable - relatively painless and full of entertainment.
Our lives are a lot more disappointing - expectations of continued economic progress and social advancement fostered by parents and observations of the last 100 years of stupendous growth have fallen flat.
The economic progress and social advancement of the mid 20th century can largely be attributed to the explosive growth of consumption and exploitation of fossil fuels.
To give you some perspective, between 1955 and 1977, oil production has quadrupled, with consumption mostly going towards developed countries, out of which US was in a majorly advantageous position after WWII.
The time period coincides perfectly with Boomers coming to maturity, starting their first adult jobs, buying houses and starting families.
The problem here is that we have experienced an anomalous amount of general wealth growth, and have internalized it as the norm, whereas nothing could be further from the truth and it still remains just an anomaly.
But wealth growth didn't slow down after that period. Wage growth (in the US, at least) stopped, but wealth (and productivity) growth kept right on. It just that the returns of that growth aren't going to labor.
So, maybe look at the policy and other changes that redirected the wealth growth (which has continued) rather than asserting that it was an anomalous period of wealth growth.
> It just that the returns of that growth aren't going to labor.
You're absolutely right. I was merely pointing out that we are viewing that short period of wage growth as the norm, whereas the entire system is not sustainable because it depends on finite and destructive fossil fuels.
It doesn't matter if our generation got a bigger cut of the wealth on the historic scale - in this case it would have been the next generation (Z? Z 2.0 ?) that would be forced with a rude awakening and stagnating wages.
> rather than asserting that it was an anomalous period of wealth growth.
But that's the part that's not really under dispute. Wealth grew as a result of fossil fuel exploitation. Wages grew for a time until the marginal product of labor started going down in relation to capital (that doesn't mean productivity or output stayed constant) and it became more advantageous to accrue wealth.
Speaking as a middle aged dude that works in tech in a big City and didn't buy a house before the never-ending bubble in Canada started.....I would have been far better off living in a smaller town and working an unsexy lower paying "whatever" job and buying a house. The wage differential (after taxes especially) falls far short of compensating for the differential in real estate prices in most major hubs now, moreso for kids starting out as they are starting out in a bubble.
I tell my peers now that an offer in San Francisco should be north of 400k to make it worth it. They laugh and sign for the 2x their paycheck in Kansas City then end up back there in a year.
I once heard the advice "You're better off making X in a second or third tier city than moving to a first tier city to make 1.1X because housing costs twice as much."
The statement is basically still true today, but I guess the coefficients are a lot higher.
Salary Multiplier: 1.1 is now 2.0
Housing Cost Multiplier: 2.0 is now 3.0 (or maybe 4.0?)
The things that make a solid foundation for a fulfilling life are harder to obtain; education in a profession or trade, job security, accommodation, and - most important and noticeable amongst my cohort - the time and money necessary to raise a family.
Who cares if you can buy a television 10x the size and 10x cheaper than your parents generation if you can't secure the things you need to lead a satisfying life?
No, 50% of them will be (at or) below median. The word "average" has multiple meanings, but it's most commonly used to mean "mean", i.e. "arithmetic average". It's perfectly possible for most people to be below the mean (e.g. in a room full of schoolkids and Bill Gates, only one person is above-average wealthy).
But this is not a room of schoolkids with one billionaire. It's a large sample of the general population, with the variable being measured known to be roughly normally distributed.
Income is a great example of something that is not normally distributed. First, the normal distribution is over the entire real interval (-∞, ∞), while income is over a partially-bounded interval [0, ∞). Secondly, there's a very long tail on the upper end, but a hard-stop (at zero) at the low end. I would expect it to look more like a Pareto distribution [0], with a bit of a hump at the low-end.
I was probably too terse. My point was that the GP was talking about talent, not income, and however you define talent, it's probably roughly normally distributed like IQ.
I find it obnoxious when someone interprets a post uncharitably just to say it's wrong. It erodes the quality of discourse by forcing writers to expend time and words preempting pointless gotchas.
To be fair, I think my initial reading of the post in question might have been too charitable. A few bits don't make sense with any interpretation I can think of.
Actually, it's only within their own group that 50% will be below average. For what we know, anywhere between 0..100% may be below average of the entire workforce, which is what they're competing against.
Nothing in their argument requires such a dichotomy - just that the "talented" people who can afford to live in these areas are drawn from all across the US, meaning that most of the young people living there are priced out. Think about Silicon Valley, for example, and what happens to all the people who grow up there without the qualifications and skills to work in the tech industry.
>The affluent and the talented are flooding into superstar cities and tech hubs, creating a vicious competition for space that is pushing out the young
The above quote certainly is asserting a talented/young dichotomy, as well as an affluent/young dichotomy.
It's either deeply-engrained bias or sloppy writing. Pick one, depending on your level of cynicism.
I have always found it to be extremely annoying when I hear people talk of senior citizens being "On fixed incomes", like I'm only making this much money because I choose not to be rich.
There are enough Baby Boomers to dominate politics, compared to so called Gen-X and the Millennials will one day soon be the dominant demographic so for people like me, when we were young, the older people stomped on us and when we're old, the younger people will stomp on us.
When I hear senior citizens on fixed incomes, I assume we're talking about people who have left the workforce, permanently. Unlike almost everyone else currently in the workforce, there is absolutely no expectation of any future change in income. In this regard, it does not seem silly at all.
If bond yields adjust to rising inflation, that means their prices go down and their coupons stay fixed. For stocks, prices follow the prices of bonds, and earnings take a hit, so you also a get hit on the dividends side. So it's not a good story for retirees.
No, but if you take out housing that's a big part of the variation. And, historically, it was assumed that many on a "fixed income" would own their houses and/or move to a lower COLA area (e.g. the stereotypical retire to Florida or, more recently, the Southwest).
Property taxes are a potential wildcard which is one reason why increases are often capped--which isn't popular with the "they should just move out" crowd.
How do you just ignore housing, though? Housing is probably the single most important expense and the most likely not to track national inflation. That's most of what people "on a fixed income" are at risk from.
Whether or not its a "problem", that is an explanation of why it is an accurate description of the scenario faced by the group in question, and a useful label.
> Inflation adjusted income has barely increased at all for anyone but the top 20% of earners since the mid-1960s
Its barely increased for the averages of segments of the income distribution. That doesn't mean individuals don't see income growth over time (and even move between, e.g., income quintiles), it just means that (except in the top ranges) the overall distribution isn't moving up.
That's an important issue, to be sure, but its a different issue that individuals on fixed incomes and the impacts specific policies, etc., may have on the, distinct from the rest of the population which makes it useful to identify and discuss them as a group with a label.
Not always. The 25 year old may have to be stuck in a high priced city to get a job that pays off their massive student loans. A 90 year can live away from the jobs.
Some elderly people are so mobile that they migrate with the seasons. I don't know many working-age people who can afford to spend summer in Ontario and winter in Arizona.
Hugely popular with retirees. My parents own a condo in Sarasota Florida which has tons of retirees. I believe the last estimate I heard was that the population can grow up to 10x during the winter months.
A 90 year old has lived through and benefited from a period of amazing upwards mobility. Their financial position now is most likely unrecognisable from that of their youth - even if they don't seem that well-off. But a 25 year old has virtually no mobility to look forwards to, household incomes have been stagnant since the 1970s and social mobility (which is, let's face it, closely tied) has similarly flatlined.
Abundant cheap housing and the GI bill were a pretty sweet deal - despite the hardships that it took to get there.
It's even worse: seniors are on RISK FREE (or nearly so) incomes, often grealty tax shielded. The rest of us are on much more precarious footing. Though we way earn more, we also often have rising financial obligations during childbearing years.
>Are the rest of us on variable incomes which we can scale up and down at will?
Are you on an income which is, by law, tied to changes in the Consumer Price Index? That's how Social Security works. From the 2016 benefit letters:
"The law does not permit an increase in benefits when there is no increase in the cost of living. So your benefit will stay the same in 2016. There was no increase in the cost of living during the past year based on the Consumer Price Index (CPI) published by the Department of Labor."
So maybe "pegged", as in "pegged to an index", would have been a better idiom, but we're probably stuck with "fixed".
Probably not a safe assumption. Most people without a pension that are retired are living off some sort of retirement fund (IRA, 401k) that still technically gets returns. They just are taking out instead of paying in. Their returns are likely to be a little less than inflation, but they are withdrawing $XX,000 a year for the rest of their life ("Fixed income")
When discussing income, there are two measures, "nominal" (the number of dollars) and "real" (the amount of buying power, which is the number of dollars adjusted for inflation).
Social security is fixed real income. Annuities are fixed nominal income.
Also older folks are much more likely to have wealth to live off of than young people. But we don't like to talk about wealth in America really, only income.
>There are enough Baby Boomers to dominate politics
The boomers don't dominate politics; money does.
The 0.1% is trying to drive a wedge between young and old (largely successfully) by pushing this boomer/millennial bullshit (for one example of blatant astroturfing, google "the can kicks back").
They've been doing this to get complicity from the old to ramp up student debt, keep wages for the young down, etc.
Equally, they've been doing this to get complicity from the young to privatize social security and slash medicare (thus far unsuccessful but boy have they been trying).
The worst part is that it's an utterly shallow and obvious self serving strategy that's very clearly working (look at all the 'boomer hate' on HN. Getting people to hate on their grandmas is depressingly easy).
The last thing the 0.1% want to see is young and old united against them.
I don't think its a planned strategy as much as something that is emergent from the way the current system works. Of course the wealthy will try any way in which to keep their wealth. Bill Gates, Warren Buffet etc. are the exception rather than the rule when it comes to philanthropic billionaires.
I'm not trying to justify that kind of behavior, only pointing out that if the system is a certain way, there is a reason why many people behave the way they do.
There are historical reasons for that description. And generally it remains accurate. Particularly as those on defined contribution rather than (COLA indexed) defined benefit pensions become more predominant among retirees.
Pensions are another simmering shitstorm on the horizon.
The Millenials just recently surpassed the Boomers in US population (75.4M to 74.5M, approx).
I'm anxious to see when the IOTA Party starts gaining momentum - the one that stands for "It's Our Turn, Arses" and aims to pass legislation catering to the Millenial generation more than the Boomers.
No one wants online voting to happen, but that's the big secret: No one is actually afraid it will be rigged. Its rigged NOW and that's the way Democrat and Republican leaders LIKE it. They're terrified of massive demographic change.
When you talk to leadership in both parties the line is not, "Online voting isn't ready", its, "America isn't ready for online voting."
Not that I don't think there is way to get the best of both worlds. I'm sure there's a way for us to vote without having our votes be made public, so things like vote buying and voter intimidation can't happen, especially with blockchain technology. Or perhaps those factors won't matter as much any more, and are actually acceptable factors when compared to voter suppression through poorly placed and managed polling locations. Either way, it's not as simple as it may seem.
By encryption, authenticity tests and anonymous one-way hashing. One can know that a vote is by a legitimate voter, and simultaneously not know which voter it was.
Opt out (with opt outs and straw polls used to determine if an audit is necessary).
I hear this again and again and again and its utter bullshit.
You don't need to solve auditing to solve online voting. They are two separate issues and I guarantee once you HAVE online voting there will be no shortage of solutions to audit it.
The trust issue comes down to the voter understanding their vote intent contributes to the tally.
When the voter expresses this on a physical ballot, that chain of trust is intact. They know the record of their vote is accurate.
Audits of this, taking the vote to court, etc... is all possible. Machine assists work well from there, and do not generally present a problem.
Oregon and other states do this with vote by mail. It works, and electronic means help with registration, and the state does auto registration too. Changes, ballot tracking, validation, party registration are all super easy and robust.
When we move that vote to a machine captured intent, the voter lacks that chain of trust. They cannot know their vote contributed to the tally, unless votes are personally identifiable somehow.
Bringing records into court, etc... are all problematic as well.
That chain of trust is foundational to the overall validity of the process.
We don't really need e voting. What we do need is improved focus on transparent, efficient, trustworthy processes.
You can mail your registration. That's why 2.5 million newly registered voters via voteforchange.org suddenly appeared swinging North Carolina single handedly in 2008. An electronic registration/ballot can be accessed 24/7 doesn't get lost or destroyed, and makes young voters more comfortable. It can be designed/redesigned more easily, A/B tested, and made as simple and accessible as possible for the most number of people. It matters.
Heh... Oregon has all its voters registered. Easy peasy.
It is untrustworthy sorry.
Oregon is really simple, turnout great, registration automatic, etc... Things like A/B testing aren't needed, and most importantly, the voter knows the actual record of their vote contributes to the tally. Every voter gets all they need, and ample time to vote as well.
Unless we want personally identifiable votes, the system you describe cannot do that in a trustworthy way.
And having that trust in the record be true matters a whole lot more. This matter isn't bullshit. Having that basic trust in place is at the core of democracy. Participation does not require surrendering that trust either.
That is solved by actually educating people and not putting things in their way. The Oregon system does both those things. Outreach and education comes from parents and concerned others, until they come of age, at which point the State does this.
We don't need e voting. It's a solution in search of a problem.
Most of our systems are very corrupt and voter hostile. It is very tempting to apply technology to circumvent that. But, the truth is that same corruption will take advantage of the lack of trust and forced ambiguity inherent in electronic voting records that are not personally identifiable.
We have already seen this happen here in the US and other parts of the world. Voter trust in the actual record of their vote used for the tally is fundemental to trustworthy elections.
We can and need and should do the basic work needed to operate our democracy in an inclusive, trustworthy way.
Cost is not a factor in this. It never is, unless hostile interests are successful in making it an issue. They have done so, and untrustworthy election processes dominate US elections too.
E voting does nothing to resolve what is a human corruption problem.
Yeah, that's genuinely an issue - attention span and commitment - but, within that issue though, is the root that I think a lot of Millenials feel 'disenfranchised' (not the biggest fan of the term but it works) from the system. As in, they (rightly?) feel the system doesn't represent them. So there's no point in participating. So the wheel of indifference keeps spinning.
Now, contrast that with a platform that directly says something like this:
"We aim to create legislation and change laws to benefit you, and odds are your parents or anybody over the age of 50 aren't going to like what we propose because it's good for you, even if it's not good for older people. They had 40 years of voting and they voted everything for themselves - well, we've paid attention and we're going to use that manual to reset the lay of the land a little."
From there, policy and platform papers can be constructed with moderate (capping interest on student loans as % of income) or extreme (Federal Income Tax penalties for anyone working over the age of 55) or batshit crazy (de-fund the DEA).
It's somewhere to start, because the apathy is kind of what the political system counts on from the youth.
Boomers.
They inherited from their parents; and stole from their children. If any sector is due for a collapse or correction it's our social security. Let it die on those who bleed it out.
I'll Longbet you [1] $1000 this will never happen. Taxes will go up to meet the shortfall (and its able to pay out at 100% until something like 2034, dropping to ~75% after that). For social security to fail, the US government would need to fail (its the social program/entitlement equivalent of US treasuries).
"...backed by the full faith and credit of United states Government."
Being on a fixed income is a valid complaint when inflation is high. Your salary will rise with inflation, but the bond/pension income does not which decreases buying power for those on fixed incomes.
> I have always found it to be extremely annoying when I hear people talk of senior citizens being "On fixed incomes", like I'm only making this much money because I choose not to be rich.
"Fixed incomes" does not refer to the fact that they are at the cuurent limit and could not currently do better(which is how you seem to be interpreting it), but rather that it is fixed over time, with no prospect of increase. For many seniors, this is the case at least in real terms (i.e., considering inflation). Many seniors income is dominated by things that are either fixed in nominal terms (and thus shrink when, as is usually the case, inflation is positive), or which are adjusted only for inflation (which are fixed in real terms, even though they grow in nominal terms.) That is, over time, their income is either fixed or declining in real terms.
I'm buying a house right now, and while I don't feel it's rigged- it sure is a pain the butt.
You realize rent control isn't just about baby boomers, right? Pretty much all the minority advocacy groups fight for more rent control, or at the very least section 8 housing- and I'd like to see a single study showing a city > 100,000 people with 80% of the market locked up in rental control. I have a hard time believing any market would even get to 30%, after all the people with REAL money (the developers/land owners) want nothing to do with it.
Also agree with you on getting let down by our parents/grandparents on the education issue. I was born in '82 and had it rough, I can only imagine what a kid born in '92 had to deal with.
Edit: I'm moving from Seattle to Portland, so does that mean I'm one of these people they're talking about that has to move out, or one of the assholes moving in? Both?
I actually grew up in Portland, in SW- and having been outbid by 10 and 20% on multiple other houses I got to experience the heat from that housing market.
For us, we're moving back home. So maybe when I moved to Seattle I was the asshole and now I'm just a movie trope small town dude moving back from the big city to raise the kids.
EDIT: I'll add that having grown up there really helped me know what were completely BS/bubble prices on properties. Houses with bids going to $560k where the neighborhood was in the high 200s, low 300s a decade before. Where you know the traffic sucks, the neighborhood isn't anything special, and generally know what the neighborhood is like crime/people wise made it so much easier to just look at a house price and say no without getting caught up in the frenzy.
You're forgetting that the price of any new owner-occupied property must also price-in the opportunity cost of not renting out that property. Nobody buys a house when they could get rich by renting out the same house to someone else. Indeed a foreign investor is likely to buy it, because it's a great source of income, and they already have somewhere to live.
If I can rent a property out for thousands of dollars a month, that property is worth a lot of money. So it's really the rental market that is pushing up prices in the owner-occupied market.
In the last housing bubble rents detached from housing prices pretty severely. Back in the 80s, it was generally cheaper to buy than rent - the 20% down saw to that. But things completely flipped with the more recent financial ingenuity.
In a way, I see rising rents in SF as a return to normalcy.
Lots of people buy real estate in can Vancouver and leave it empty instead of renting it out. It is a safe place to park money and the hassle and wear of tenants isn't worth the money they pay when the market has been going up so much.
I've heard there is a city in Australia that also has loads of empty condos bought by investors... Surfers maybe?
Buying a house and not living in it or renting it is definitely a thing
Indeed, rent control is usually about preventing people from being priced out of neighborhoods. It seems that a lot of people are happy if people get priced out of areas, as long as it's other people who get priced out of them. And even though it's more socially problematic - it's more of a problem when a family is forced to relocate against their wishes (and dealing with issues like switching schools) than when someone who is already relocating can't find an affordable apartment in the area they prefer.
That's a strawman. People moving in can have children too, or be looking to start families. Likewise people in rent-controlled properties don't all have school-aged children, and they certainly don't all send them to local schools.
I'd argue it's a bigger social problem for talented young people to not be able to move into centres of employment because of people who's children have grown up and left home still living in rent controlled properties. Such people are locked out of living in a perfectly reasonable place against their wishes - because of a rigged system that entitles those who came first to play by an entirely different set of rules.
Why should they get an easy ride, while everyone else, who's working just as hard - or often much harder, to pay their inflated rent - suffers as a consequence?
> People moving in can have children too, or be looking to start families.
Yes, but rent control doesn't force them to relocate or switch schools - the people who are negatively affected by this are people who have already decided to move. In contrast, the people who are negatively affected by removing rent control will be people who don't want to move but are forced to move by rising rent.
At least to me, it seems that people having to leave their neighborhoods because of rising rent is a larger negative impact (both to them personally and to society as a whole) than people who are already moving having to pick a neighborhood that is not their preferred neighborhood.
> the people who are negatively affected by this are people who have already decided to move.
"Decided to move" is not a reasonable description of the reasons for people to move into cities - they want jobs, they want to live among their peers, they want to take their place in the world. They didn't "decide to move", as if somehow they could live in their hometown all their life achieving their dreams.
> the people who are negatively affected by removing rent control will be people who don't want to move but are forced to move by rising rent.
I want a pony. And a boat. But I don't get those things, and I'm certainly not going to demand that I get to buy those things at a price far-below market rate. It might be nice to allow a group of people to not have to move "because they don't want to" rather than because they can't afford to stay - but it's unjustifiable when it comes at the expense of locking an entire generation out of the rental market and locking out younger people from living perfectly reasonable lives.
You can't defend a privilege that seeks to entitle one group to live according to their whims, isolated from the economic realities in which everyone else is forced to live. Rent control is a zero-sum game, it only provides benefits to one group by screwing over another.
> it seems that people having to leave their neighborhoods because of rising rent is a larger negative impact (both to them personally and to society as a whole) than people who are already moving having to pick a neighborhood that is not their preferred neighborhood.
You're trivialiaing the problem. This isn't about satisfying people's whims or preferences. An entire generation is being locked-out of living where they work, with many being shut out of jobs because of that. The person who can't afford to move to SF doesn't live in a less desirable neighbourhood of SF, because they can't afford to live there either, and they don't move to Oakland anymore, because that's expensive too now (guess what, they have rent control too). So is Richmond, and Almeda. So they move where? Concord? The commute alone is going to eliminate them from many potential jobs in SF. Meanwhile you defend single-earner part-time worker older couples living on Nob Hill (and who likely have ample savings) working irrelevant jobs which could be anywhere because they "don't want to move". One person's whim does not outweigh another's necessity.
Never mind the issue that rent control is probably harming the very people it aims to protect by putting so much pressure on the rental market that they can never afford to move, and so much knock-on pressure on the housing market that they can never afford to buy. So even if you're convinced of its social value, it's still non-sensical.
A fair market and a livable minimum wage would seem like an infinitely better solution.
>"Decided to move" is not a reasonable description of the reasons for people to move into cities - they want jobs, they want to live among their peers, they want to take their place in the world. They didn't "decide to move", as if somehow they could live in their hometown all their life achieving their dreams.
That's still a very privileged view. The predominant reason people move is for work: they'll be (or continue to be) unemployed if they don't.
What you're missing in your arguments against rent control is that rent control protects socioeconomic diversity. Without rent control, fair market value may force people who are not high earners out, displaced by a more homogeneous population of highly-educated and high-earning people. This is not an unalloyed good.
One of the primary goals of rent control is to ensure a mixed-income population in highly-desirable urban centers, and in many cases it is precisely rich socio-economic diversity that many (not all, but many) people find attractive.
" People moving in can have children too, or be looking to start families."
Maybe. But they haven't already set down those roots. What makes them more deserving that the people who already have?
"Such people are locked out of living in a perfectly reasonable place against their wishes - because of a rigged system that entitles those who came first to play by an entirely different set of rules."
And those who are pushed out? Are they not locked out of living in a perfectly reasonable place against their wishes, because of a rigged system that entitles newer people to come in and change the rules?
"Why should they get an easy ride, while everyone else, who's working just as hard - or often much harder, to pay their inflated rent - suffers as a consequence?"
I have to ask the same thing of those moving in. Why do they get to push other people out?
It's also not really true. NYC likes to use other terms such as "rent stabilization" to describe the rent-control-like protections they have in place. Some 45% of NYC rental properties fall under such protections. The combined figure for rent control, rent stabilization and other controls bring just over 60% of the NYC rental market under pricing controls.
Nope, nope, you have it right but in the context of this discussion you have it wrong. :-) There is rent control and rent stabilization, two separate items under the rubric of "rent regulated housing". See, those terms have political and legal connotations that don't necessarily perfectly match with the colloquial or intuitive phrase "rent control".
Rent control is specific to a tiny percentage of buildings and units, relevant to the situation where a) the tenant is in a rent-controlled building [ build before 1941 ] and b) the tenant or their descendants have been continuously occupying the unit since 1971. That's your rent control. Rent doesn't ever go up. The stereotypical picture here is of an older woman in her 70's or 80's living in a three bedroom walk-up apartment in Greenwich Village paying $500 a month while other units rent for $6500 or some such.
Rent stabilization is a different matter. About one million units in NYC (out of 2 million, perhaps?) are rent stabilized. That means a lot of things, but in summary it means the rent can't go up by a percentage set yearly by a board of individuals called the Rent Guidelines Board.
Now it gets interesting because in NYC, a rent stabilized unit can be cheap, well below market, depending on how long the tenant's been there, or it can be high. A unit can actually fall out of rent stabilization if the tenant makes above 200,000 a year and the unit hits 2700. It gets more complex: the landlord can make improvements to the building and use that to increase the rent to a degree; rent stabilized units are typically pre-war units/buildings but not exclusively, as a now-expired (this year) program called 421a gave developers tax breaks in exchange for rent stabilizing their units (even if their starting rent was market rate).
As an aside, and back to the original point -- here in NYC we're in the throes of some major class conflict and it centers enormously around 'affordable housing' in this city of 8.5m (up from 8m in 2000). Our mayor was elected on the platform of providing cheaper housing. Gentrification is a huge topic here, subject to daily barrages in rags like the Gothamist (whose comments section has commenters with about 50% the average IQ of the people here, I might add).
So approximately 50% of our housing stock falls under some form of housing regulation.
I know the difference between rent control and rent stabilization. I wasn't saying there weren't units under regulation, I was just speaking specifically rent control. Rent stabilized units are mostly a short-term deal as the unit distribution changes within a building and their prices approach market-rate.
Source, I'm a NYC resident and rent controlled tenant.
A few nuances need to be pointed out, though. While they increase, they increase to levels set by the city based on a calculation that incorporates costs of things like taxes, utilities and whatnot.[1] In addition the owner has to apply for the increase, which is laborious and more than half the time never even is done. But the point is that they started at very low levels, and even if things eventually catch up, rent controlled units are typically quite below even rent stabilized units in rent asks.
If a genie appeared and magically offered you a choice between a stabilized unit and a rent-controlled one, equivalent in every other way, without knowing any other facts you'd most likely pick the rent-controlled one, even if there's been a 7-fold increase since the 70's as you point out, because you'd be more likely to pick the cheaper of the two.
1 - "New York City Local Law 30 of 1970 stipulates that
Maximum Base Rents be established for rent controlled
apartments according to a formula calculated to reflect real
estate taxes, water and sewer charges, operating and maintenance
expenses, return on capital value and vacancy and
collection loss allowance. The Maximum Base Rent (MBR)
is updated every two years by a factor that incorporates
changes in these operating costs." (http://www.nyshcr.org/Rent/FactSheets/orafac22.pdf)
Except you can't pick a rent-controlled unit, because you can't get into one unless you were in before 1971. You can be transferred one as immediate-family but it requires 2 years of financial interdependence between you and the tenant -- not easy.
> I'd like to see a single study showing a city > 100,000 with 80% of the market locked up in rent control.
It's not hard to find. San Francisco is pretty close, with around 72% of the rental market under rent control. (I saw a figure somewhere claiming it was effectively as much as 85%, but I can't find the reference from my iPhone).
Boston, one of the cities mentioned here, has no rent control (thanks to a statewide ballot since city ballots to end it lost; shrewd political play there) so I think we can be pretty confident that is not the cause of our problems in this city.
When I pay around $3K in rent and when I shop at Target or Wallmart I always ask myself where do that cashier live. There is no way she could afford a $3K rent.
If I get to choose the age cohort that defines the word "millennial", I can probably get the data to say "millenials" have whatever migration pattern I desire.
So... people are leaving places they can't afford to live? I'm not sure I see the problem - this isn't a new thing. I loved the town where I went to college, and stayed there a few years after graduation. But the combination of high housing costs and low wages meant I'd never buy a house if I stayed.
So I left and went somewhere that had a better CoL/wage ratio. That's life.
The problem is that in the medium term the costs for policing, fire services, schools, etc all rise because you have to pay more to attract people to live and work in the expensive city. The only way to do that is through taxation[1]. In the long term that higher taxation drives away the companies, so you're left with an expensive city that can't afford to raise enough revenue to run. Then the city goes bankrupt.
The preferred solution is to not let things get out of hand in the first place.
[1] There are other options like stopping having these things provided publicly but few people would advocate that.
The people who are moving away are doing so because they can't participate in the housing market in the first place. I don't see how people who can't buy houses and are leaving the area will drive down housing costs.
Not necessarily. If landlords would rather keep their property on the market in the hopes of getting a higher rent price than lower the price then the price will remain static. There'll just be more un-let, empty properties. In the UK this happens a lot because property tax (council tax as it's known here) is discounted on an empty property, so there isn't much incentive to fill the property at a lower price.
Be quiet and accept capitalism in other words. Brilliant, out of touch response.
Some people have lived their entire lives in cities, paid into the taxes and helped build businesses, infrastructure, and the like, only to be kicked out due to lack of regulations in the housing market and the flood gates opening and driving prices through the roof.
I suspect you haven't experienced it given your flippant response.
You sound as if people who lived somewhere a long time acquire some sort of exclusive rights to the place, regardless of how much other people want to live there and how much are they willing to pay for it.
"You sound as if people who lived somewhere a long time acquire some sort of exclusive rights to the place"
Swing and a miss. You must be wealthy or not live in an area where the cost of living is out of control and people have to leave their home towns and other things behind to survive.
Nobody said anything about exclusive rights or anything remotely like that.
Actually, if my landlord decides to update rent to market level next year, I'll have to move to another neighborhood or city. Don't see anything tragic about that and don't think that I deserve this apartment more than next tenant that will be ready to pay the price.
What exactly is this an answer to?
Anywhere high-wage workers live, there are high-price businesses. What services will those executives and software developers be missing?
Blaming capitalism for this missed a lot of facts. Housing supply is artificially restricted through zoning and other regulations. And housing demand is artificially stimulated through various tax breaks and subsidies. Neither are market forces and they certainly combine to drive up prices.
Maybe other factors are at work here. I hear foreign nationals like buying real estate to hedge against their home countries' political and economic stability. But that wouldn't be capitalism either. It would be foreign policy affecting Britain and the US for a change, instead of the other way around.
The market sets rent within the parameters it is given. Maybe an entrepreneur could build taller buildings with cheaper per-unit prices, but zoning regulations cap building height. In that way, the market isn't really setting the absolute price. On top of that, many localities literally overrule market prices with various forms of price fixing, affordable housing mandates, etc.
Would it be an open market if we only removed one regulation, height restrictions? Nope. But to blame capitalism when other major forces are at play is not a full assessment of the situation.
>Be quiet and accept capitalism in other words. Brilliant, out of touch response.
The problem in reality is that politicians are out of touch with capitalism. The solution is not rent control or land value tax. That only treats the symptoms.
You cannot fix a structural problem this way.
The real solution is to make other cities more attractive instead of forcing everyone to move into a handful of cities only to get kicked out 20 years later.
I don't entirely disagree, but I think that this whole discussion might be missing the underlying issue. I don't think the problem is so much people being priced out of a particular area (not everyone's going to be able to have a large place in Manhattan), but rather that there are certain things people want that cities are the best at providing. People want things like walkable neighborhoods, a close proximity to their workplace, cultural events, public transportation, greater density, etc.
I think that if there more areas like this outside of the major cities, this wouldn't be so much of an issue. Fortunately, it seems like (at least in the U.S.) there is a movement to create more city-like suburbs, but this takes time.
>there are certain things people want that cities are the best at providing
The real issue though is that it's not "cities" in the generic that provide all these great things that many people want (while also being relatively safe and having a good choice of employers). It's a relative handful of cities--mostly coastal in the US. There's plenty of affordable housing in Detroit and New Orleans.
The numbers tend to bear this out. From what I've seen, there isn't a particular urbanization trend among young people. What there is is somewhat of a migration of college educated young people to a handful of particularly dense cities.
Well, it's a couple hours from the coast (about like Houston). I lived there. I said that the relative handful of desirable cities are mostly coastal. There are many cities that are less in demand. Many are (unsurprisingly) inland. However, there are also a variety of coastal cities that are not fast growing. [ADD: Mostly in the Southeast although there are also some smaller cities on or near the Pacific Coast in the Northwest like Eugene.]
Well, this is true, and it's also true that it's only certain areas of certain cities we're talking about as well. I'm living in/near one of the desirable cities that's struggling with issues of affordable housing because of the large influx of new and wealthy residents. And yet, there are still many places in the city where housing is cheap. It's just not desirable because of poor schools, high crime, poor infrastructure, and a lack of interesting places within walking distance.
So I agree with you, this talk of cities is misleading. The real issue is that the supply of the kind of places that people want to live in doesn't meet demand, and that these things are extremely inelastic in the short-run (it usually takes years to build up these kinds of neighborhoods).
You're absolutely right. In the case of Boston for example, while prices are fairly high overall, I'm sure you can buy something in Roxbury or Dorchester for relatively affordable prices. Similarly in New York, I imagine there's affordable housing in Brooklyn--just not in Williamsburg. Even Manhattan probably--above 150th Street or so.
Gentrification does happen incrementally. Look at Shoreditch in London. But it does take time and has at least some negative effects in spite of being mostly desirable.
When I look at London, I'm amazed this trend isn't happening faster.
London is full of young people who are basically just breaking even, spending 50% or more of their monthly income on rent. I think people tell themselves this is ok as long as they're gaining experience and moving up the ladder.
The fact that people aren't moving away in greater number says more about the stagnant UK economy outside of London, than anything else.
I think we're on the cusp of a massive re-think of how we live and work in cities. This will either come through regulation (rent controls, bans on 2nd homes, tax on unoccupied buildings, etc), or innovation (maybe we'll all have homes outside cities and come and stay in Tokyo-style capsule hotels during the working week).
Right now, millions of people are working hard every day to make a relatively small number of landlords richer and richer. It's unsustainable, and I think some major societal change is coming.
You're completely right about the economy outside London. I'm from London and love it but i can frankly say the UK's biggest problem is having only one genuinely world-stage level successful city.
Look at our productive friends in Germany, they have Berlin, Frankfurt, Munich, Hamburg.
It's not surprising rent is so high when all the good jobs are in one place.
On a smaller scale, you have these problems in germany too. Gentrification has been an (not so small) issue in Berlin since the early 90ies. And no one I know who lives in Berlin (or Hamburg for that matter) is satisfied with their rent-cost to living-quality ratio. A notable counter-example is Leipzig (cheap rent, lots of parks, good quality of living [my opinion]), but things are changing here as well...
I thought Berlin was known for being very affordable when it comes to housing -- low rents for nice apartments. "Berlin is poor but sexy", which I would think feeds the hipster and start-up cultures.
Finance seems to be a big employer here - obviously not on the scale of the City but proportionally (Edinburgh isn't that big) it's a fairly high percentage of jobs.
Don't think I've ever seen "sexy" and "actuarial" used together :-)
What do all the actuaries do in Edinburgh then - I've seen to have known loads of them over the years! Or is pensions/life stuff not on the "sexy" side of things?
Of the places I know employ actuaries in Edinburgh: Standard Life, Scottish Widows, Royal London... and there are quite a few consulting actuary companies around as well.
London is a handful of very pleasant millionaire villages - Primrose Hill, Hampstead & Highgate, Ken + Chel etc - surrounded by terraced Edwardian worker slums.
There's also been a new build boom in the East. Some areas were almost affordable for a while.
The big advantage compared to the rest of the UK is networking potential. Even the biggest competing cities - Manchester, Birmingham - are an order of magnitude less happening. And places like Leeds and Swindon have almost nothing at all.
The UK has really screwed the proverbial pooch here. Compared to traditional industry, Internet and creative businesses have huge potential for almost no infrastructure spend, and can create jobs almost everywhere.
Aggressively promoting startups across the country should have been a no-brainer. But... that's not what we got.
The other smaller startup city is Cambridge, which in some ways is even worse - less dense housing and a complete lack of decent transport links in of any kind, because all our transportation centers on London.
2. narrow, middle-age style streets which means commuting by car is close to impossible
3. public transports already used way over their capacity (it's a small miracle every morning that on over-crowded tube platforms which do not have doors that people do not get pushed / fall on the tracks while the trains are accelerating 10cm away from their face - a miracle only thanks to british commuters being overly calm and courteous).
4. Very restrictive planning permissions which makes it very difficult to build anywhere outside of a few spots, which become covered with sky scapers, and a gvt / local councils determined to keep the real estate bubble going at any cost, including sponsoring 100% LTV loans with tax payer money, instead of allowing new developments.
My wife and I have chosen not to have children as neither of our careers allow us to afford it and still live in a place where the career could be continued.
Academia doesn't pay, and being a developer doesn't pay enough to choose both home + children in London.
I'm sure some people will come along and say how they've had children and have a mortgage, etc... but I guess the key difference is that I was homeless, and neither myself or my wife have any family who could support or help at all. We live without a safety net, and there are no luxuries. To continue with the work we both find very satisfying, we must live within commute of our work, in or near London... and there is no reasonably priced housing that allows us to do that whilst also stretching to children, pensions, etc. Hah, pensions. Might go cry already.
It is crazy isn't it, we've just left London, though I still work there (massive commute from Norfolk to London 3 to 4 days a week - staying with friends when I'm there).
It's is obscene that 2 bed flats are over half a million in many parts of town. I loved living there but to have a family and fun it was important to get a house we could be happy living in.
I'm someone that has "benefitted" from the increasing prices, but at the same time I haven't. While I've made some money on my house what does that mean if all the other houses have also vastly increased in price and if I need a crazy amount to buy a new house with an extra room or two? 20 years ago being able to scrimp and save for a couple of years to be able to afford the next house up was common, but now you are talking 100k minimum in London to add a room, and that doesn't really get you a bigger place or more room to actually live...
Are you joking? In the UK they can offset rental income against their mortgage payments (EDIT: mortgage interest payments), meaning they only pay income tax on their "profit" while also benefitting from the capital appreciation. (Admittedly this is changing from 2017 [0])
This, coupled with low interest rates means that landlords will take out additional mortgages to buy new properties even if they could afford to pay cash.
Landlords have been able to act like mini hedge funds, making huge bets on the housing market using cheap borrowed money. Some will get badly burned when/if interest rates rise and property values fall, but that doesn't look like happening any time soon.
You pay income tax on the profit you made, but you can deduct property taxes, mortgage interest, maintenance expenses, and most importantly - you can deduct the entire value of your house (building, not land) over 27.5 years (at least in NJ). The idea behind that is that you will essentially need to rebuild your entire house after 27 years. However, since you can deduct maintenance costs along the way, you really don’t have to rebuild your entire house all at once, so it works out in the landlord’s favor.
The only down side to the last part is that if you ever decide to sell the property, you need to pay full income tax on the portion of the value of which you have deducted in previous years.
Either way, rental income is taxed fairly with respect to some other forms of business.
People are moving into London at a huge rate. That to me suggests that the city is doing something right, and should keep doing what it's doing rather than try to radically shake things up.
I don't think rent controls or second home rules can possibly work. That leads to people working jobs that aren't actually economically sustainable - and the benefit often ends up going to the rich (e.g. cleaners living in subsidized housing can be paid lower wages). A land value tax would be a good idea to encourage productive use of land, but the only way to avoid introducing loopholes is to apply it consistently to all land.
My view is that agglomeration really is valuable, that the high cost of housing and office space in London reflects their high value. Industries that really benefit from being in London will locate themselves there and be more productive as a result. Industries that don't benefit will move out and make space for those who can make better use of it.
You're totally right, regulation trying to not kick people out of their homes for massive rent hikes and things like that will only _hurt_ them in the end. It's the rich people and the free markets that will ensure they're taken care of, which has been the case for the last few decades.
Hah. I'm as tax-and-spend liberal as they come, and explicitly in favour of wealth redistribution. But regulating rents that way creates awful distortions: it means people in their 40s pay less than people in their 20s, it means if person A works where person B lives and vice versa they can't exchange houses without a huge financial penalty.
>>People are moving into London at a huge rate. That to me suggests that the city is doing something right, and should keep doing what it's doing rather than try to radically shake things up.
It's actually a failure of UK and not necessarily just success of London. Here the failure of UK lies in the fact that it, as a modern society, has failed miserably to create other cities like London even after so many years of existence.
The uneven progress of few (or worst, just single) such cities is a very bad sign for the society as a whole. Such nations will be heading for larger societal troubles ahead.
Rent controls and limiting house ownership to strictly one house is one step forward. What is even more important is to set up infrastructure facilities in other cities too, so that industries don't find it necessary to flock only to single/few cities while living the rest of the nation poor/wanting.
the failure of UK lies in the fact that it, as a modern society, has failed miserably to create other cities like London even after so many years of existence
Make no mistake, this is a long-standing policy decision, from the "managed decline" of Liverpool onwards. Although New Labour had the opportunity to improve it and didn't.
Council tax is a weird, awkward compromise between the poll tax that Thatcher wanted and some kind of progressive tax on wealth. I agree that it's dysfunctional, but I fear it's politically impossible to change.
Yet it's almost entirely regressive. Even to middle class households, it's a major expense, but to those in multi-million pound properties it's a rounding error.
That's before you even get into the fact most properties are still banded according to 1991 valuations.
Yeah, I know. So what can we do about it? Redo valuations? That's disproportionately expensive compared to the amount of tax revenue we're talking about. Add new bands or move the existing ones? Again just seems like a lot of effort for an exercise that would have to be repeated every few years.
You can impose a pretty large increase in capital gains tax on transfers of physical property ownership (with exemptions for investments made in actually developing the property and rebates for property windfalls subsequently reinvested in other UK property). Personally I'd like to see CGT at confiscatory levels for individuals and entities that aren't tax resident in the UK, which is rather a lot of London freeholders at the moment...
Regardless, I can't see revaluation with higher bands not being net profitable even in the short term, or any reasons why revaluation shouldn't take place after quarter of a century.
Taxing capital gains on properties is fraught with difficulty, particularly when properties are owned by offshore entities, and even the Land Registry do not know the identity of beneficial owners.
Taxes on property transfers (capital gains, stamp duty, etc.) also create hysteresis in the market, which should be discouraged.
It's much easier to implement a council tax style system, with non-payment a criminal offence, and the ultimate (if extreme) threat of property confiscation quite practical to go through with.
Agree with your points, but if capital gains taxes were phased in and ratcheted upwards, and the tax is deductible if people are using their gains to purchase a similar value UK property, I don't see hysterisis being a major problem. I'd actually be more worried about avoiding inducing a selling frenzy and crashing prices in the short term.
Offshore registered properties without named beneficial owners are only a problem if you allow UK freeholds to be held by shady foreign entities and don't have an especially punitive tax regime just for them.
Council tax style systems suffer from property owners (particularly private householders) often not having disposable cashflow remotely comparable to the value of a house they might have acquired many years ago, especially pensioners and especially in London.
(whilst I'm sure in practice, private sector equity share schemes wouldn't be too unhappy to lend the house-rich the cash, I can't see council taxes as aggressive as hypothtetical capital gains taxes being politically possible)
Agreed on the cash flow point, although I don't have much sympathy for people who have come into ownership of expensive properties through inheritance, or obscene capital appreciation over the course of several decades.
As you mention, many people will be able to borrow against the value of the property to pay the taxes.
Unfortunately it is indeed a political problem. What the UK really needs is an enormous, publicly-funded house building programme, but that would of course harm existing homeowners.
Scrap council tax, business rates AND SDLT, and move to a single percentage-based property tax. Probably about 1.5% would be right; apparently that's the average rate paid in New York.
Valuation strikes me as not so hard when Zoopla and Rightmove can do it. "Last sale value + average annual percentage increase in the area" is a reasonable approximation.
It would be a bit of a nightmare building in the right exemptions to not destroy the elderly and small businesses, but I don't think it's inherently impossible. It would however attract screaming from the genuinely rich. Remember the mansion tax going nowhere when people argued that £1m houses (ie 37 times median income) were ordinary?
1.5% with a 50% reduction and 2%/year growth cap for a single primary residence, transferable if you want to move housing, but not inheritable. This stuff is not difficult from a policy perspective.
Tying tax rates to specific individuals is always going to be massively distorting. If you want to... I'm not even sure what your "transferable but not inheritable" was supposed to accomplish, but whatever it is it's probably more efficient and less distorting to do it somewhere other than the property tax code.
More regulation doesn't really fix the basic problem of too many people wanting to live there and not enough accommodation. In China/Vietnam they deal with it by just putting up a bunch of 30/40 story apartment blocks which only seem to take about a year to build. I guess the slightly non democratic nature of the place lets them ignore the NIMBYs and just build stuff. Don't know if we could move that way in London - not commie dictatorship but weighing the benefits to those who want homes against the NIMBYs?
My sister in law in Shanghai lives in such a highrise apartment block (of which there seem to be countless) and still commutes an hour each way to work because nothing closer was affordable.
If London ever reaches that kind of housing demand, I suspect NIMBYs will have no say in the matter.
London is quite crazy. I'm planning to live here for the next few years (working on a PhD), but I have no idea where to go afterwards. I don't think it's sustainable to live here in the long term unless I choose to pursue wealth over everything else -- and I don't think I'll be doing that.
"Right now, millions of people are working hard every day to make a relatively small number of landlords richer and richer. It's unsustainable, and I think some major societal change is coming."
Perfectly sustainable, because they're literally serfs (so am I). A new feudal age is approaching.
> Right now, millions of people are working hard every day to make a relatively small number of landlords richer and richer. It's unsustainable, and I think some major societal change is coming.
It may be even worse than this scenario, which sort of assumes no/minimum mortgage debt on the property. Imagine a world where the masses toil simply to meet minimum debt service on price-inflated, highly mortgaged housing. You're treading water just to stay alive.
Yeah, squeezed by two major trends - landlords optimize for profit maximization, while employers optimize for wages minimization, gives no other choice.
It is exactly the case of losing ground/territory to better competitors in ecology - manual laborers would be pushed out of overpriced neighborhoods by JavaScript-coding hipsters and their managers.
Don't waste your time blowing all your money on overly expensive cities, move away, live a higher quality of life, build your families, and let all the millionaires left in the cities that over charge for everything alone.
That's all good and fine, but even cities that were once considered affordable are beginning to see large price increases. Seattle, Austin, Denver, etc. Yes, they remains affordable relative to SF, NY, London, but there was a time I could sell my house in suburban DC and pay cash for a house in any of the first three. That's not true any more.
Baltimore's older harbor neighborhoods definitely have some appeal.
One of these days, I need to make a pass through some of the old steel belt cities. Don't know enough about them to know if I'd want to live in them. Big down side is most of them are significantly colder than DC or the other places I listed.
It's almost like a long-slow-great-depression. We can see these trends (average house price in Toronto / Vancouver exceed $1m) but nothing happens to reverse them.
Plodding and lumbering forwards, the depression continues.
Recently I've read a few articles about how "the Exodus of millenials threatens these cities' economies"
Some of the massively expensive cities don't have the infrastructure to support a London-like commuter lifestyle. LA traffic & all the young people leave? They'll go somewhere else entirely.
I left Vancouver and currently live in Toronto. The real estate bubble monster is a truly frightening beast in those cities. Outside of tech (I am a programmer) and banking, so much of Canada's economy is in real estate.
I just read yesterday that the suburbs were coming to an end because in the future everyone was going to live in areas like Manhattan. Shocked to learn that's not the case.
Since these trends seem to be at the beginning stages, how would one best capitalize on this?
I feel that actually owning a property is going to become less and less common for people as time goes on, so maybe now is the time to push hard to invest in rental properties? The wealth classes seem to be getting more and more quantized, so I’d like to try my hardest to get myself above the rounding point before it’s too late.
I have a lot of friends who will simply never be able to afford to actually purchase a house. They’re renting and living paycheck to paycheck, which basically means they’re “stuck”, as it’s very hard to save for a down payment for a house at that point.
However, if they were only able to get over the initial hump of getting the down payment, they would be fine, since mortgage payments in many places are less than rent, but I digress…
If you want to extract rents on rising housing costs you should become a landlord. Being a landlord is the most obvious and literal example of being a rentier, isn't it?
I'm just wondering if there are any other side effects that could be exploited as well.
For example, there could be a decrease in sales of decorative home items or high quaity furnature since people may be less inclined to invest money into a property they don't actually own. I have no idea if this would happen, but you get the idea.
I've been saying this for a couple of years, but if I were into real estate investing I'd pour money into rental properties in secondary and tertiary cities. I lived in Baltimore 10 years ago and was visiting last weekend. Neighborhoods that were effectively no-go zones back then (think of areas with shootouts in The Wire) are full of cafes and hipster shops now. 10 years ago you could get a house that sells for 400k today for under 150k. I predict that pretty much every city of a few 100 thousand people within a couple hours of a bigger metropolitan area is going to grow like this.
I'm also very interested in the trend towards "micro" apartments in expensive cities. They will require code changes, but the idea is solid: make tiny but affordable housing for young single people. http://www.nydailynews.com/new-york/nyc-micro-apartments-art...
Live and work in Baltimore now (been here around 10 years) and it's definitely a thing. Our main issue is that this "reinvestment" in the city is happening at a glacial pace--much slower than needed to address the seriously neglected and decayed infrastructure that's been piling up since the white-flight of the 50's and 60's.
Still, the city's population is much lower than it was during the boom years of the 30's-50's so gentrification, while certainly spurring some conflict and debate, is nothing compared to a Manhattan or a San Francisco.
Since much of the recent shifts have spread out from the redeveloped waterfront and Rt. 83 corridor, you still see huge differences in home prices over the space of, say, 10 blocks. Looking at mostly typical Baltimore townhomes renovated in the past 10 years, our house which cost $240k would've cost $350k if it had been maybe 10 blocks south in the more gentrified Canton neighborhood.
And now, a few years on, new renovations on our block are being listed for those $300-400k prices. From a long term investment perspective, it would seem that values will be holding steady or rising in my immediate area but in bigger terms, I think it relates quite a bit to the overall topic of this thread. Younger people (and probably some not so young) are still interested in home ownership but can't (or won't) afford to pay DC prices or even the prices of surrounding suburbs.
I truly hope (selfishly, as a Baltimore resident) that this signals a wider shift to reinvestment or just investment in smaller cities that may have seen major declines during the 60's-80's as those with means moved out to the new burbs. Living within a few miles of work is great and being able to walk or bike places is awesome. I don't know how much you'd need to pay me to get me on that hour-long highway commute from the suburbs every day.
But as people leave those expensive cities, won't they become more affordable?
I mean, they are expensive because there are more people than available housing, and because there are lots of people making lots of money so they can spend more on stuff. But if those people want to leave, that reduces demand so prices should reduce.
Eventually, we should reach an equilibrium (or at least something more stable).
So you think they're going to become more affordable as poor and middle-class people move out and are replaced by well-heeled professionals and the international elite? I think that is unlikely.
I live in Canada, did a degree in CS and work as a programmer. I do ok money wise. I consider myself lucky that I enjoy programming. I live in Toronto and have zero chance of ever owning real-estate (unless there is a massive real estate correction which would blow up the Canadian economy). Even if you consider a hypothetical marriage and doubled my income, it would be out of reach.
Its even worse in Vancouver.
I don't think its the end of the world. With a bit of luck and discipline, my retirement will be funded by investments.
(edit: i am using the rule of not spending more than 30% of after tax income on housing)
The conditions are ripe. A generation of hipsters (I don't say that in a disparaging way) that have a fetish for authenticity, craft skills, and clean living; are also financially stretched to their limits even when sharing houses; have a strong desire to be part of a community in a society that is focused on the individual, and can't afford to create a community the traditional way (i.e. by starting a family). Communes (not necessarily rural) are coming back.
Despite the huge market demand for property, a lot of it is under utilised. There are some very big houses out there. Like up_and_up, I also spent some time living in a large shared house that was more of a community. Central city, a garden with chooks, nine bedrooms, usually twelve or more occupants, shared responsibilities, budget, cooking, etc. We were each spending about the same for rent, food, electricity, gas, phone, and internet combined as others in shared house situations were spending on rent alone.
Our home was a true community hub. We hosted a lot of events. It was a great way to live as a young person. In my opinion it was the cooking roster (you cooked once every two weeks for everyone else in the house) and the fact that we all sat down to a shared meal that made it work. Without that it would probably have devolved from a large family-like situation into something more like a large hostel situation.
In the bay area there are already plenty of housing co-ops. I started one in North Oakland, 23 people living in one house, sharing meals, garden in back yard etc. I think my rent was $200 or something.
It's not just America, and apparently, a 9-5 job is working class as well, because major cities in Europe are unfordable for someone with a job like that.
In a sense you could say this is the market working. America is huge and there are lots of good places to live. We also have this amazing global telecommunications network thingy. Who knew?
For good reason. Smaller towns are more livable then ever. With uber you can do without a car even in small towns and distant suburbs. With high speed internet and delivery, you rarely have to go shopping into a city center. With wikipedia, github, and youtube, education from advanced topics to daily diy projects is available to villagers. With tinder, there is a singles scene where there wasn't one before...
Well, something like that is happening in germany. Everyone want to live in the cities. Literally paying any price for rent. And then complain about the price. Soon or later they will there own undoing not be able to pay the rent anymore and moving out.
I live outside the city so I don't pay insane rents. While I watch to blow that over.
I say no problem with that. It is there fault. They don't need to live there and, especially pay any rent which is way too high.
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[ 1.9 ms ] story [ 40.2 ms ] threadThe author managed to jump to this conclusion without actually offering any evidence for the claim, or even entertaining other explanations of the trends seen in the data.
Likewise I can claim that millennials are leaving because baby boomers have rigged the housing market in their favour, saddled them with debt by hollowing-out funding for education, placed an undue tax burden on them via property tax controls, and locked-out up to 80% of the rental market in some cities via rent control, which allows older generations to avoid participating in a fair market and massively inflates prices in the remaining 20%.
But no, it's talented people's fault, apparently.
When the previous generation has kicked away the ladder, why are we surprised that those following them can't climb upwards?
That's not how science works. The data is given and you test your idea against that. You are not allowed to 'search for data' to prove the hypothesis because that leads to bias errors.
Karl Popper may have prescriptively described science as working in one particular fashion, but in the real world it doesn't work that way at all, when you look at what scientists actually do.
Also the hardcore Popperians will reply that many people who the mainstream considers scientists don't actually do science ;)
If you start with data, and then look for patterns you can almost always find them. Whether they are predictive is what you're trying to understand.
I would also note that he didn't say 'discard data that disagrees with the hypothesis', which I think is what you're commenting on. This is as you correctly point out dangerous, and not how you science.
It was the greatest generation who turned their back on progressive taxation and properly funding state affairs in the late 1970s - but it has been the boomers who mostly reaped the benefits.
Beyond that, it comes down to upbringing and lifestyle, of which I kind of feel the millenials have been coddled much more as a general statement that prior generations. This may well mean higher rates of depression, which can greatly affect the perception of quality of life.
Both of my grandmothers grew up on farms, and have a very different view of the world than the generations that came after mine (I'm GenX). It's a matter of perspective as much as anything.
My only advice to those in their late teens, is if you go to college, make it for something practical and ideally that you enjoy... minimize you debt, and prefer the cheaper route as opposed to what you think might be a better option, with few exceptions after 5 years of graduating, it probably won't matter, but you'll be much happier without a debt you can't declare bankruptcy on that's a multiple of your expected annual salary for your chosen career path.
Few people can get by and be successful without college... making it into the top 5-8% of wage earners is the top 1% for people who don't have an education beyond high school.
In generations past, many people moved for other chances, and opportunities... I don't see this as all that different really.
On the one hand:
- Better hospitals/vaccines/doctors/dentists/optometrists
- Fewer wars / more freedom* / better sense of equality*
- Cheaper/More effective modes to access knowledge or communicate over distance
- Cleaner/Cheaper water, heat, electricity
- Robots do increasingly more "mundane" work. Vacuum, drive*, wash dishes, wash clothes
- Cheaper, higher quality, entertainment. TV, Movies, Video-Games, Twitch, Youtube
On the other hand:
- I live in a tiny apartment / Less privacy overall (surveillance included)
- I work a lot / had to move cities in order to get an appropriate job (three times now)
- Other people can't even get jobs / don't get paid enough to live in small apartments
- The environment is in a crappier state
- The media is more negative, fear-mongering even. Forcing comedians to tell the news such that the tone balances to neutral
Which is objectively better?
I guess I'm a baby boomer. I was born in the 70's. I was a kid during Vietnam war, and Korean War. Growing up, I was scared of Russia, and the bomb. As a college student, I was glad I didn't have to deal with a draft, only signing up for selective service.
The thought of owning a home always seemed like a pipe dream. I thought the only way I could own a home is maybe in Lake County. In other words, a vacation home in the middle of nowhere. I could no way afford my dad's home. I can still buy a hot box in Lake county for what it cost 20 years ago.
Unless you were a networking, butt sniffer you didn't just automatically land that great job out of college. Oh yea, guys like me thought little of networking. "Why would I like a person, just because they could do something for me?" On the other hand, my wealthy sister went after those who could further her career like Sheen to drugs. She is a bit of an odd ball though. She was so greedy, she took all my mother's money. I'm so tempted to out her, but can't.
Growing up, we did have access to more jobs--mainly lousy jobs. Even the college corporate jobs were not great. I had two, and traveled a lot. It was not fun. I hate hotel rooms, and airlines. The real stepping stone in life was a wealthy father. I don't think that's changed much. Those kids got the right advice. Those kids got the right loans. They got to take on risk? They are in houses, and have stock portfolios now.
The way I see it, the labels are not productive. At least don't include my generation with my father's. My father was a real baby boomer, but he was born in 1938. If you didn't want to go to college, you just went into a union trade. You bought a house, and had kids. You drank, and smoked a lot--and didn't have to worry about dying from sex. Life wasen't bad.
My generation and my father's were completely different. I looked at my father as a spoiled kid. I thought he had all the opportunities, and he didn't explore them.
Again, as to generation labels, I wish we would stop using them, or at least get the dates in order. My best friend is a gen X'er--I guess. I recall the first time we even talked about our "different" generations. There were no differences. I will admit there's a difference between my generation and Millenials. Millenials know much more than I did growing up. We were Naive. Housing was always terrible for all of us. Wasen't it my generation that coined "living in the parent's basement?". Believe me--housing has always been bad. Now--in the Bay Area it is beyond bad. I will give Millenials that, I have never seen housing prices like this, but as Stanley Druckenmiller pointed out today, he sees a big kaboom comming up. You rich kids will get your house.
(I won't be back to argue. I don't think I said anything worth arguing over. I'm getting over Shingles. I can pass this along. If you ever get a weird pain in your back, and notice a weird rash; go right to a doctor--if you have one. Mine is 20 miles away. I'd even go to the emergency room, and ask for the antiviral. It cuts the infection down to 50 percent, and side effects, like neuropathy. You have around three days. I've been down for 3.5 weeks now. In a lot of pain. I used to think I could handle physical pain, but this malady is really irritating.)
Lord knows if the marketing industry has ever found these conjectures from their gurus to have ever been useful. Mostly they're hoping to find some generalized commonality based on presumed shared experiences that come from being born into then living through a certain span of history, however recent. And from that they further hope to be more effective at selling things, from soaps to political candidates.
It's hardly science, they're simply reaching for a good "80/20" rule.
You're Gen-X, not a Baby Boomer. Lots of generational discussions these days focus on Millenials vs. Boomers and ignore Gen-X entirely, but insofar as the contrasts drawn have validity, Gen-X is in many ways a lot more like the Millenials than the Boomers.
> I was a kid during Vietnam war, and Korean War.
Unless this a technical reference to the fact that the Korean War never formally ended, this contradicts the preceding: the armistice which ended the active phase of the Korean War was signed in 1953. If you were born in the 1970s, you weren't a kid during the Korean War, as that term is usually used.
> At least don't include my generation with my father's. My father was a real baby boomer, but he was born in 1938.
Baby Boomer refers to the post WWII baby boom, those born 1946-1964.
http://www.nytimes.com/2012/09/21/us/life-expectancy-for-les...
Our lives are a lot more comfortable - relatively painless and full of entertainment.
Our lives are a lot more disappointing - expectations of continued economic progress and social advancement fostered by parents and observations of the last 100 years of stupendous growth have fallen flat.
To give you some perspective, between 1955 and 1977, oil production has quadrupled, with consumption mostly going towards developed countries, out of which US was in a majorly advantageous position after WWII.
The time period coincides perfectly with Boomers coming to maturity, starting their first adult jobs, buying houses and starting families.
The problem here is that we have experienced an anomalous amount of general wealth growth, and have internalized it as the norm, whereas nothing could be further from the truth and it still remains just an anomaly.
So, maybe look at the policy and other changes that redirected the wealth growth (which has continued) rather than asserting that it was an anomalous period of wealth growth.
You're absolutely right. I was merely pointing out that we are viewing that short period of wage growth as the norm, whereas the entire system is not sustainable because it depends on finite and destructive fossil fuels.
It doesn't matter if our generation got a bigger cut of the wealth on the historic scale - in this case it would have been the next generation (Z? Z 2.0 ?) that would be forced with a rude awakening and stagnating wages.
> rather than asserting that it was an anomalous period of wealth growth.
But that's the part that's not really under dispute. Wealth grew as a result of fossil fuel exploitation. Wages grew for a time until the marginal product of labor started going down in relation to capital (that doesn't mean productivity or output stayed constant) and it became more advantageous to accrue wealth.
The statement is basically still true today, but I guess the coefficients are a lot higher.
Salary Multiplier: 1.1 is now 2.0
Housing Cost Multiplier: 2.0 is now 3.0 (or maybe 4.0?)
Average SF Home Sale: 1,200,000 (Condo)
So factoring it the fact that the SF condo likely has one less bedroom the HCM is 6.0!
Who cares if you can buy a television 10x the size and 10x cheaper than your parents generation if you can't secure the things you need to lead a satisfying life?
Fixed it for you.
/s
[0] https://en.wikipedia.org/wiki/Pareto_distribution
Measures of central tendency all have strengths and weaknesses but the fact that outliers strongly skew the mean is one of its textbook weaknesses.
Claim: "The majority of drivers are better than average."
Stupid person: "That impossible, 50% are worse than average."
Me: "You obviously can't math."
The above quote certainly is asserting a talented/young dichotomy, as well as an affluent/young dichotomy.
It's either deeply-engrained bias or sloppy writing. Pick one, depending on your level of cynicism.
There are enough Baby Boomers to dominate politics, compared to so called Gen-X and the Millennials will one day soon be the dominant demographic so for people like me, when we were young, the older people stomped on us and when we're old, the younger people will stomp on us.
It's such a ludicrous statement.
Are the rest of us on variable incomes which we can scale up and down at will?
Social Security is adjusted for inflation: https://www.ssa.gov/news/cola/
Likewise bond yields and stock prices will change with inflation/deflation.
Any retirement scheme not adjusted for inflation is a rip-off at best and a scam at worst.
Property taxes are a potential wildcard which is one reason why increases are often capped--which isn't popular with the "they should just move out" crowd.
Which makes it fixed in real terms.
> Any retirement scheme not adjusted for inflation is a rip-off at best and a scam at worst.
Fixed (in nominal terms) annuities are not-infrequently used as retirement vehicles (and many pensions are either fixed or have less-than-full COLAs.)
So where is the problem? Inflation adjusted income has barely increased at all for anyone but the top 20% of earners since the mid-1960s: http://www.advisorperspectives.com/dshort/updates/Household-...
> Fixed (in nominal terms) annuities are not-infrequently used as retirement vehicles
Which is why annuities are almost always a rip-off.
Whether or not its a "problem", that is an explanation of why it is an accurate description of the scenario faced by the group in question, and a useful label.
> Inflation adjusted income has barely increased at all for anyone but the top 20% of earners since the mid-1960s
Its barely increased for the averages of segments of the income distribution. That doesn't mean individuals don't see income growth over time (and even move between, e.g., income quintiles), it just means that (except in the top ranges) the overall distribution isn't moving up.
That's an important issue, to be sure, but its a different issue that individuals on fixed incomes and the impacts specific policies, etc., may have on the, distinct from the rest of the population which makes it useful to identify and discuss them as a group with a label.
https://en.wikipedia.org/wiki/Snowbird_(person)
Abundant cheap housing and the GI bill were a pretty sweet deal - despite the hardships that it took to get there.
Are you on an income which is, by law, tied to changes in the Consumer Price Index? That's how Social Security works. From the 2016 benefit letters:
"The law does not permit an increase in benefits when there is no increase in the cost of living. So your benefit will stay the same in 2016. There was no increase in the cost of living during the past year based on the Consumer Price Index (CPI) published by the Department of Labor."
So maybe "pegged", as in "pegged to an index", would have been a better idiom, but we're probably stuck with "fixed".
Social security is fixed real income. Annuities are fixed nominal income.
If you're retired and possibly chronically ill you have little opportunity to do such things.
The boomers don't dominate politics; money does.
The 0.1% is trying to drive a wedge between young and old (largely successfully) by pushing this boomer/millennial bullshit (for one example of blatant astroturfing, google "the can kicks back").
They've been doing this to get complicity from the old to ramp up student debt, keep wages for the young down, etc.
Equally, they've been doing this to get complicity from the young to privatize social security and slash medicare (thus far unsuccessful but boy have they been trying).
The worst part is that it's an utterly shallow and obvious self serving strategy that's very clearly working (look at all the 'boomer hate' on HN. Getting people to hate on their grandmas is depressingly easy).
The last thing the 0.1% want to see is young and old united against them.
I'm not trying to justify that kind of behavior, only pointing out that if the system is a certain way, there is a reason why many people behave the way they do.
Pensions are another simmering shitstorm on the horizon.
I'm anxious to see when the IOTA Party starts gaining momentum - the one that stands for "It's Our Turn, Arses" and aims to pass legislation catering to the Millenial generation more than the Boomers.
When you talk to leadership in both parties the line is not, "Online voting isn't ready", its, "America isn't ready for online voting."
1. https://en.wikipedia.org/wiki/Electoral_fraud 2. https://www.youtube.com/watch?v=1gEz__sMVaY
Not that I don't think there is way to get the best of both worlds. I'm sure there's a way for us to vote without having our votes be made public, so things like vote buying and voter intimidation can't happen, especially with blockchain technology. Or perhaps those factors won't matter as much any more, and are actually acceptable factors when compared to voter suppression through poorly placed and managed polling locations. Either way, it's not as simple as it may seem.
Any reading links to share?
If we make votes personally identifiable, we can resolve this problem.
FWIW
I hear this again and again and again and its utter bullshit.
You don't need to solve auditing to solve online voting. They are two separate issues and I guarantee once you HAVE online voting there will be no shortage of solutions to audit it.
More in a bit...
When the voter expresses this on a physical ballot, that chain of trust is intact. They know the record of their vote is accurate.
Audits of this, taking the vote to court, etc... is all possible. Machine assists work well from there, and do not generally present a problem.
Oregon and other states do this with vote by mail. It works, and electronic means help with registration, and the state does auto registration too. Changes, ballot tracking, validation, party registration are all super easy and robust.
When we move that vote to a machine captured intent, the voter lacks that chain of trust. They cannot know their vote contributed to the tally, unless votes are personally identifiable somehow.
Bringing records into court, etc... are all problematic as well.
That chain of trust is foundational to the overall validity of the process.
We don't really need e voting. What we do need is improved focus on transparent, efficient, trustworthy processes.
It is untrustworthy sorry.
Oregon is really simple, turnout great, registration automatic, etc... Things like A/B testing aren't needed, and most importantly, the voter knows the actual record of their vote contributes to the tally. Every voter gets all they need, and ample time to vote as well.
Unless we want personally identifiable votes, the system you describe cannot do that in a trustworthy way.
And having that trust in the record be true matters a whole lot more. This matter isn't bullshit. Having that basic trust in place is at the core of democracy. Participation does not require surrendering that trust either.
That is solved by actually educating people and not putting things in their way. The Oregon system does both those things. Outreach and education comes from parents and concerned others, until they come of age, at which point the State does this.
We don't need e voting. It's a solution in search of a problem.
Most of our systems are very corrupt and voter hostile. It is very tempting to apply technology to circumvent that. But, the truth is that same corruption will take advantage of the lack of trust and forced ambiguity inherent in electronic voting records that are not personally identifiable.
We have already seen this happen here in the US and other parts of the world. Voter trust in the actual record of their vote used for the tally is fundemental to trustworthy elections.
Cost is not a factor in this. It never is, unless hostile interests are successful in making it an issue. They have done so, and untrustworthy election processes dominate US elections too.
E voting does nothing to resolve what is a human corruption problem.
Now, contrast that with a platform that directly says something like this:
"We aim to create legislation and change laws to benefit you, and odds are your parents or anybody over the age of 50 aren't going to like what we propose because it's good for you, even if it's not good for older people. They had 40 years of voting and they voted everything for themselves - well, we've paid attention and we're going to use that manual to reset the lay of the land a little."
From there, policy and platform papers can be constructed with moderate (capping interest on student loans as % of income) or extreme (Federal Income Tax penalties for anyone working over the age of 55) or batshit crazy (de-fund the DEA).
It's somewhere to start, because the apathy is kind of what the political system counts on from the youth.
"...backed by the full faith and credit of United states Government."
[1] http://longbets.org/
Hourly wages in the US have, on average, grown slower than inflation since the 1970s.
"Fixed incomes" does not refer to the fact that they are at the cuurent limit and could not currently do better(which is how you seem to be interpreting it), but rather that it is fixed over time, with no prospect of increase. For many seniors, this is the case at least in real terms (i.e., considering inflation). Many seniors income is dominated by things that are either fixed in nominal terms (and thus shrink when, as is usually the case, inflation is positive), or which are adjusted only for inflation (which are fixed in real terms, even though they grow in nominal terms.) That is, over time, their income is either fixed or declining in real terms.
You realize rent control isn't just about baby boomers, right? Pretty much all the minority advocacy groups fight for more rent control, or at the very least section 8 housing- and I'd like to see a single study showing a city > 100,000 people with 80% of the market locked up in rental control. I have a hard time believing any market would even get to 30%, after all the people with REAL money (the developers/land owners) want nothing to do with it.
Also agree with you on getting let down by our parents/grandparents on the education issue. I was born in '82 and had it rough, I can only imagine what a kid born in '92 had to deal with.
Edit: I'm moving from Seattle to Portland, so does that mean I'm one of these people they're talking about that has to move out, or one of the assholes moving in? Both?
For us, we're moving back home. So maybe when I moved to Seattle I was the asshole and now I'm just a movie trope small town dude moving back from the big city to raise the kids.
EDIT: I'll add that having grown up there really helped me know what were completely BS/bubble prices on properties. Houses with bids going to $560k where the neighborhood was in the high 200s, low 300s a decade before. Where you know the traffic sucks, the neighborhood isn't anything special, and generally know what the neighborhood is like crime/people wise made it so much easier to just look at a house price and say no without getting caught up in the frenzy.
https://www.quora.com/What-percentage-of-San-Francisco-apart...
It might not be a huge factor but it's something to keep in mind.
If I can rent a property out for thousands of dollars a month, that property is worth a lot of money. So it's really the rental market that is pushing up prices in the owner-occupied market.
In a way, I see rising rents in SF as a return to normalcy.
I've heard there is a city in Australia that also has loads of empty condos bought by investors... Surfers maybe?
Buying a house and not living in it or renting it is definitely a thing
I'd argue it's a bigger social problem for talented young people to not be able to move into centres of employment because of people who's children have grown up and left home still living in rent controlled properties. Such people are locked out of living in a perfectly reasonable place against their wishes - because of a rigged system that entitles those who came first to play by an entirely different set of rules.
Why should they get an easy ride, while everyone else, who's working just as hard - or often much harder, to pay their inflated rent - suffers as a consequence?
Yes, but rent control doesn't force them to relocate or switch schools - the people who are negatively affected by this are people who have already decided to move. In contrast, the people who are negatively affected by removing rent control will be people who don't want to move but are forced to move by rising rent.
At least to me, it seems that people having to leave their neighborhoods because of rising rent is a larger negative impact (both to them personally and to society as a whole) than people who are already moving having to pick a neighborhood that is not their preferred neighborhood.
"Decided to move" is not a reasonable description of the reasons for people to move into cities - they want jobs, they want to live among their peers, they want to take their place in the world. They didn't "decide to move", as if somehow they could live in their hometown all their life achieving their dreams.
> the people who are negatively affected by removing rent control will be people who don't want to move but are forced to move by rising rent.
I want a pony. And a boat. But I don't get those things, and I'm certainly not going to demand that I get to buy those things at a price far-below market rate. It might be nice to allow a group of people to not have to move "because they don't want to" rather than because they can't afford to stay - but it's unjustifiable when it comes at the expense of locking an entire generation out of the rental market and locking out younger people from living perfectly reasonable lives.
You can't defend a privilege that seeks to entitle one group to live according to their whims, isolated from the economic realities in which everyone else is forced to live. Rent control is a zero-sum game, it only provides benefits to one group by screwing over another.
> it seems that people having to leave their neighborhoods because of rising rent is a larger negative impact (both to them personally and to society as a whole) than people who are already moving having to pick a neighborhood that is not their preferred neighborhood.
You're trivialiaing the problem. This isn't about satisfying people's whims or preferences. An entire generation is being locked-out of living where they work, with many being shut out of jobs because of that. The person who can't afford to move to SF doesn't live in a less desirable neighbourhood of SF, because they can't afford to live there either, and they don't move to Oakland anymore, because that's expensive too now (guess what, they have rent control too). So is Richmond, and Almeda. So they move where? Concord? The commute alone is going to eliminate them from many potential jobs in SF. Meanwhile you defend single-earner part-time worker older couples living on Nob Hill (and who likely have ample savings) working irrelevant jobs which could be anywhere because they "don't want to move". One person's whim does not outweigh another's necessity.
Never mind the issue that rent control is probably harming the very people it aims to protect by putting so much pressure on the rental market that they can never afford to move, and so much knock-on pressure on the housing market that they can never afford to buy. So even if you're convinced of its social value, it's still non-sensical.
A fair market and a livable minimum wage would seem like an infinitely better solution.
Couldn't we turn that argument on those who want to live in the cities?
"You're trivialiaing the problem."
And you're trivializing the problem of forcing people out.
"This isn't about satisfying people's whims or preferences."
Bullshit. You're making this about satisfying the whims or preferences of those moving in.
"A fair market and a livable minimum wage would seem like an infinitely better solution."
A fair market is one in which one does not get priced out of their home.
That's still a very privileged view. The predominant reason people move is for work: they'll be (or continue to be) unemployed if they don't.
One of the primary goals of rent control is to ensure a mixed-income population in highly-desirable urban centers, and in many cases it is precisely rich socio-economic diversity that many (not all, but many) people find attractive.
EDIT: readability
No, it's not.
" People moving in can have children too, or be looking to start families."
Maybe. But they haven't already set down those roots. What makes them more deserving that the people who already have?
"Such people are locked out of living in a perfectly reasonable place against their wishes - because of a rigged system that entitles those who came first to play by an entirely different set of rules."
And those who are pushed out? Are they not locked out of living in a perfectly reasonable place against their wishes, because of a rigged system that entitles newer people to come in and change the rules?
"Why should they get an easy ride, while everyone else, who's working just as hard - or often much harder, to pay their inflated rent - suffers as a consequence?"
I have to ask the same thing of those moving in. Why do they get to push other people out?
Yes, it's that low. It's less than 2% of the available housing.
https://en.m.wikipedia.org/wiki/Rent_control_in_New_York
Rent control is specific to a tiny percentage of buildings and units, relevant to the situation where a) the tenant is in a rent-controlled building [ build before 1941 ] and b) the tenant or their descendants have been continuously occupying the unit since 1971. That's your rent control. Rent doesn't ever go up. The stereotypical picture here is of an older woman in her 70's or 80's living in a three bedroom walk-up apartment in Greenwich Village paying $500 a month while other units rent for $6500 or some such.
Rent stabilization is a different matter. About one million units in NYC (out of 2 million, perhaps?) are rent stabilized. That means a lot of things, but in summary it means the rent can't go up by a percentage set yearly by a board of individuals called the Rent Guidelines Board.
Now it gets interesting because in NYC, a rent stabilized unit can be cheap, well below market, depending on how long the tenant's been there, or it can be high. A unit can actually fall out of rent stabilization if the tenant makes above 200,000 a year and the unit hits 2700. It gets more complex: the landlord can make improvements to the building and use that to increase the rent to a degree; rent stabilized units are typically pre-war units/buildings but not exclusively, as a now-expired (this year) program called 421a gave developers tax breaks in exchange for rent stabilizing their units (even if their starting rent was market rate).
As an aside, and back to the original point -- here in NYC we're in the throes of some major class conflict and it centers enormously around 'affordable housing' in this city of 8.5m (up from 8m in 2000). Our mayor was elected on the platform of providing cheaper housing. Gentrification is a huge topic here, subject to daily barrages in rags like the Gothamist (whose comments section has commenters with about 50% the average IQ of the people here, I might add).
So approximately 50% of our housing stock falls under some form of housing regulation.
Source, I'm a NYC resident and landlord; also, this: http://www.nycrgb.org/html/resources/faq/rentcontrol.html#di...
Source, I'm a NYC resident and rent controlled tenant.
Huh? Controlled rents go up whenever the New York State Division of Housing and Community Renewal says they do; right now they're in the process of increasing by as much as 9.6% by 2018 http://www.nytimes.com/2016/01/01/nyregion/facing-increase-r... and since 1975 they've gone up 707% http://www.nyshcr.org/Rent/PublicHearingInformation/SAFR-Pre...
A few nuances need to be pointed out, though. While they increase, they increase to levels set by the city based on a calculation that incorporates costs of things like taxes, utilities and whatnot.[1] In addition the owner has to apply for the increase, which is laborious and more than half the time never even is done. But the point is that they started at very low levels, and even if things eventually catch up, rent controlled units are typically quite below even rent stabilized units in rent asks.
If a genie appeared and magically offered you a choice between a stabilized unit and a rent-controlled one, equivalent in every other way, without knowing any other facts you'd most likely pick the rent-controlled one, even if there's been a 7-fold increase since the 70's as you point out, because you'd be more likely to pick the cheaper of the two.
1 - "New York City Local Law 30 of 1970 stipulates that Maximum Base Rents be established for rent controlled apartments according to a formula calculated to reflect real estate taxes, water and sewer charges, operating and maintenance expenses, return on capital value and vacancy and collection loss allowance. The Maximum Base Rent (MBR) is updated every two years by a factor that incorporates changes in these operating costs." (http://www.nyshcr.org/Rent/FactSheets/orafac22.pdf)
It's not hard to find. San Francisco is pretty close, with around 72% of the rental market under rent control. (I saw a figure somewhere claiming it was effectively as much as 85%, but I can't find the reference from my iPhone).
https://www.quora.com/What-percentage-of-San-Francisco-apart...
Rent control and section 8 are totally different things.
Also, in much of New York 80%+ of apartments are rent-controlled: http://www.nakedapartments.com/guides/nyc/renting-in-new-yor....
...there are around 118,000 [rent controlled units] in play in LA right now, making up "about 85 percent of the city's rental housing stock"
So I left and went somewhere that had a better CoL/wage ratio. That's life.
The preferred solution is to not let things get out of hand in the first place.
[1] There are other options like stopping having these things provided publicly but few people would advocate that.
The economics of the property market are weird.
Some people have lived their entire lives in cities, paid into the taxes and helped build businesses, infrastructure, and the like, only to be kicked out due to lack of regulations in the housing market and the flood gates opening and driving prices through the roof.
I suspect you haven't experienced it given your flippant response.
Swing and a miss. You must be wealthy or not live in an area where the cost of living is out of control and people have to leave their home towns and other things behind to survive.
Nobody said anything about exclusive rights or anything remotely like that.
People who contribute that much, but have nothing to show for it? Those businesses they built can't have been very successful..
Maybe other factors are at work here. I hear foreign nationals like buying real estate to hedge against their home countries' political and economic stability. But that wouldn't be capitalism either. It would be foreign policy affecting Britain and the US for a change, instead of the other way around.
Would it be an open market if we only removed one regulation, height restrictions? Nope. But to blame capitalism when other major forces are at play is not a full assessment of the situation.
The problem in reality is that politicians are out of touch with capitalism. The solution is not rent control or land value tax. That only treats the symptoms. You cannot fix a structural problem this way.
The real solution is to make other cities more attractive instead of forcing everyone to move into a handful of cities only to get kicked out 20 years later.
I suppose, though I would have worded it "Grow up".
I think that if there more areas like this outside of the major cities, this wouldn't be so much of an issue. Fortunately, it seems like (at least in the U.S.) there is a movement to create more city-like suburbs, but this takes time.
The real issue though is that it's not "cities" in the generic that provide all these great things that many people want (while also being relatively safe and having a good choice of employers). It's a relative handful of cities--mostly coastal in the US. There's plenty of affordable housing in Detroit and New Orleans.
The numbers tend to bear this out. From what I've seen, there isn't a particular urbanization trend among young people. What there is is somewhat of a migration of college educated young people to a handful of particularly dense cities.
NOLA is on a coast.
So I agree with you, this talk of cities is misleading. The real issue is that the supply of the kind of places that people want to live in doesn't meet demand, and that these things are extremely inelastic in the short-run (it usually takes years to build up these kinds of neighborhoods).
Gentrification does happen incrementally. Look at Shoreditch in London. But it does take time and has at least some negative effects in spite of being mostly desirable.
Yes, chief among them jobs with living wages.
London is full of young people who are basically just breaking even, spending 50% or more of their monthly income on rent. I think people tell themselves this is ok as long as they're gaining experience and moving up the ladder.
The fact that people aren't moving away in greater number says more about the stagnant UK economy outside of London, than anything else.
I think we're on the cusp of a massive re-think of how we live and work in cities. This will either come through regulation (rent controls, bans on 2nd homes, tax on unoccupied buildings, etc), or innovation (maybe we'll all have homes outside cities and come and stay in Tokyo-style capsule hotels during the working week).
Right now, millions of people are working hard every day to make a relatively small number of landlords richer and richer. It's unsustainable, and I think some major societal change is coming.
Look at our productive friends in Germany, they have Berlin, Frankfurt, Munich, Hamburg.
It's not surprising rent is so high when all the good jobs are in one place.
Yeah, I heard Berlin really changed a lot in the 90s...
[NB Of course there are perfectly good reasons for wanting to live in London - just never appealed to me!]
Would love to Live in Edinburgh - but the world's laundered money doesn't flow through Edinburgh :(
What do all the actuaries do in Edinburgh then - I've seen to have known loads of them over the years! Or is pensions/life stuff not on the "sexy" side of things?
Of the places I know employ actuaries in Edinburgh: Standard Life, Scottish Widows, Royal London... and there are quite a few consulting actuary companies around as well.
There's also been a new build boom in the East. Some areas were almost affordable for a while.
The big advantage compared to the rest of the UK is networking potential. Even the biggest competing cities - Manchester, Birmingham - are an order of magnitude less happening. And places like Leeds and Swindon have almost nothing at all.
The UK has really screwed the proverbial pooch here. Compared to traditional industry, Internet and creative businesses have huge potential for almost no infrastructure spend, and can create jobs almost everywhere.
Aggressively promoting startups across the country should have been a no-brainer. But... that's not what we got.
1. 2-3 floors houses, so low population density
2. narrow, middle-age style streets which means commuting by car is close to impossible
3. public transports already used way over their capacity (it's a small miracle every morning that on over-crowded tube platforms which do not have doors that people do not get pushed / fall on the tracks while the trains are accelerating 10cm away from their face - a miracle only thanks to british commuters being overly calm and courteous).
4. Very restrictive planning permissions which makes it very difficult to build anywhere outside of a few spots, which become covered with sky scapers, and a gvt / local councils determined to keep the real estate bubble going at any cost, including sponsoring 100% LTV loans with tax payer money, instead of allowing new developments.
My wife and I have chosen not to have children as neither of our careers allow us to afford it and still live in a place where the career could be continued.
Academia doesn't pay, and being a developer doesn't pay enough to choose both home + children in London.
I'm sure some people will come along and say how they've had children and have a mortgage, etc... but I guess the key difference is that I was homeless, and neither myself or my wife have any family who could support or help at all. We live without a safety net, and there are no luxuries. To continue with the work we both find very satisfying, we must live within commute of our work, in or near London... and there is no reasonably priced housing that allows us to do that whilst also stretching to children, pensions, etc. Hah, pensions. Might go cry already.
It's is obscene that 2 bed flats are over half a million in many parts of town. I loved living there but to have a family and fun it was important to get a house we could be happy living in.
I'm someone that has "benefitted" from the increasing prices, but at the same time I haven't. While I've made some money on my house what does that mean if all the other houses have also vastly increased in price and if I need a crazy amount to buy a new house with an extra room or two? 20 years ago being able to scrimp and save for a couple of years to be able to afford the next house up was common, but now you are talking 100k minimum in London to add a room, and that doesn't really get you a bigger place or more room to actually live...
This, coupled with low interest rates means that landlords will take out additional mortgages to buy new properties even if they could afford to pay cash.
Landlords have been able to act like mini hedge funds, making huge bets on the housing market using cheap borrowed money. Some will get badly burned when/if interest rates rise and property values fall, but that doesn't look like happening any time soon.
[0] http://www.wrigleys.co.uk/news/property/budget-2015---tax-ch...
You pay income tax on the profit you made, but you can deduct property taxes, mortgage interest, maintenance expenses, and most importantly - you can deduct the entire value of your house (building, not land) over 27.5 years (at least in NJ). The idea behind that is that you will essentially need to rebuild your entire house after 27 years. However, since you can deduct maintenance costs along the way, you really don’t have to rebuild your entire house all at once, so it works out in the landlord’s favor.
The only down side to the last part is that if you ever decide to sell the property, you need to pay full income tax on the portion of the value of which you have deducted in previous years.
Either way, rental income is taxed fairly with respect to some other forms of business.
I don't think rent controls or second home rules can possibly work. That leads to people working jobs that aren't actually economically sustainable - and the benefit often ends up going to the rich (e.g. cleaners living in subsidized housing can be paid lower wages). A land value tax would be a good idea to encourage productive use of land, but the only way to avoid introducing loopholes is to apply it consistently to all land.
My view is that agglomeration really is valuable, that the high cost of housing and office space in London reflects their high value. Industries that really benefit from being in London will locate themselves there and be more productive as a result. Industries that don't benefit will move out and make space for those who can make better use of it.
All hail Ayn Rand, and her glorious new regime.
It's actually a failure of UK and not necessarily just success of London. Here the failure of UK lies in the fact that it, as a modern society, has failed miserably to create other cities like London even after so many years of existence.
The uneven progress of few (or worst, just single) such cities is a very bad sign for the society as a whole. Such nations will be heading for larger societal troubles ahead.
Rent controls and limiting house ownership to strictly one house is one step forward. What is even more important is to set up infrastructure facilities in other cities too, so that industries don't find it necessary to flock only to single/few cities while living the rest of the nation poor/wanting.
Exactly. It's a case of too many people needing to live in and around London, not necessarily wanting to.
Make no mistake, this is a long-standing policy decision, from the "managed decline" of Liverpool onwards. Although New Labour had the opportunity to improve it and didn't.
To an extent, but the current London property bubble is fuelled by the treatment of London property as a store of wealth for the world's super-rich.
A land value tax would help, as would a more progressive council tax regime.
It's madness that council tax in the Royal Borough of Kensington and Chelsea tops out at £2k pa.
That's before you even get into the fact most properties are still banded according to 1991 valuations.
Reduce payments for everyone in the existing bands, and hike the payments dramatically for the new, higher value bands.
As with income tax, have the most wealthy paying the majority of the tax.
This is a slightly less crude version of the 'Mansion Tax' Labour and Lib Dems have previously proposed.
If you own a £5m property which is appreciating even at an extremely conservative 2% pa (£100k), you should be paying a lot more than £2k pa in tax.
Regardless, I can't see revaluation with higher bands not being net profitable even in the short term, or any reasons why revaluation shouldn't take place after quarter of a century.
Taxes on property transfers (capital gains, stamp duty, etc.) also create hysteresis in the market, which should be discouraged.
It's much easier to implement a council tax style system, with non-payment a criminal offence, and the ultimate (if extreme) threat of property confiscation quite practical to go through with.
Offshore registered properties without named beneficial owners are only a problem if you allow UK freeholds to be held by shady foreign entities and don't have an especially punitive tax regime just for them.
Council tax style systems suffer from property owners (particularly private householders) often not having disposable cashflow remotely comparable to the value of a house they might have acquired many years ago, especially pensioners and especially in London. (whilst I'm sure in practice, private sector equity share schemes wouldn't be too unhappy to lend the house-rich the cash, I can't see council taxes as aggressive as hypothtetical capital gains taxes being politically possible)
As you mention, many people will be able to borrow against the value of the property to pay the taxes.
Unfortunately it is indeed a political problem. What the UK really needs is an enormous, publicly-funded house building programme, but that would of course harm existing homeowners.
Valuation strikes me as not so hard when Zoopla and Rightmove can do it. "Last sale value + average annual percentage increase in the area" is a reasonable approximation.
It would be a bit of a nightmare building in the right exemptions to not destroy the elderly and small businesses, but I don't think it's inherently impossible. It would however attract screaming from the genuinely rich. Remember the mansion tax going nowhere when people argued that £1m houses (ie 37 times median income) were ordinary?
If London ever reaches that kind of housing demand, I suspect NIMBYs will have no say in the matter.
Perfectly sustainable, because they're literally serfs (so am I). A new feudal age is approaching.
It may be even worse than this scenario, which sort of assumes no/minimum mortgage debt on the property. Imagine a world where the masses toil simply to meet minimum debt service on price-inflated, highly mortgaged housing. You're treading water just to stay alive.
It looks really strange in the modern globalized world that everybody worth something in tech have to physically move to Bay Area.
The world needs new tech (and other talent) hubs, and market pressure helps in this diversification. No need to resist it.
And, for that matter, resolving the issue in Slack is often much faster.
On the other hand, I do agree oftentimes it is faster to resolve issues in chat, over the phone, or whatever digital reduction du jour.
It is exactly the case of losing ground/territory to better competitors in ecology - manual laborers would be pushed out of overpriced neighborhoods by JavaScript-coding hipsters and their managers.
We don't need them at all.
One of these days, I need to make a pass through some of the old steel belt cities. Don't know enough about them to know if I'd want to live in them. Big down side is most of them are significantly colder than DC or the other places I listed.
Plodding and lumbering forwards, the depression continues.
Recently I've read a few articles about how "the Exodus of millenials threatens these cities' economies"
http://www.vancouversun.com/touch/news/exodus+millennials+th... (specifically, Vancouver but consider this as a cannary in a coalmine)
Some of the massively expensive cities don't have the infrastructure to support a London-like commuter lifestyle. LA traffic & all the young people leave? They'll go somewhere else entirely.
http://www.bloomberg.com/news/articles/2016-01-29/canada-s-o...
Since these trends seem to be at the beginning stages, how would one best capitalize on this?
I feel that actually owning a property is going to become less and less common for people as time goes on, so maybe now is the time to push hard to invest in rental properties? The wealth classes seem to be getting more and more quantized, so I’d like to try my hardest to get myself above the rounding point before it’s too late.
I have a lot of friends who will simply never be able to afford to actually purchase a house. They’re renting and living paycheck to paycheck, which basically means they’re “stuck”, as it’s very hard to save for a down payment for a house at that point.
However, if they were only able to get over the initial hump of getting the down payment, they would be fine, since mortgage payments in many places are less than rent, but I digress…
I'm just wondering if there are any other side effects that could be exploited as well.
For example, there could be a decrease in sales of decorative home items or high quaity furnature since people may be less inclined to invest money into a property they don't actually own. I have no idea if this would happen, but you get the idea.
I'm also very interested in the trend towards "micro" apartments in expensive cities. They will require code changes, but the idea is solid: make tiny but affordable housing for young single people. http://www.nydailynews.com/new-york/nyc-micro-apartments-art...
Still, the city's population is much lower than it was during the boom years of the 30's-50's so gentrification, while certainly spurring some conflict and debate, is nothing compared to a Manhattan or a San Francisco.
Since much of the recent shifts have spread out from the redeveloped waterfront and Rt. 83 corridor, you still see huge differences in home prices over the space of, say, 10 blocks. Looking at mostly typical Baltimore townhomes renovated in the past 10 years, our house which cost $240k would've cost $350k if it had been maybe 10 blocks south in the more gentrified Canton neighborhood.
And now, a few years on, new renovations on our block are being listed for those $300-400k prices. From a long term investment perspective, it would seem that values will be holding steady or rising in my immediate area but in bigger terms, I think it relates quite a bit to the overall topic of this thread. Younger people (and probably some not so young) are still interested in home ownership but can't (or won't) afford to pay DC prices or even the prices of surrounding suburbs.
I truly hope (selfishly, as a Baltimore resident) that this signals a wider shift to reinvestment or just investment in smaller cities that may have seen major declines during the 60's-80's as those with means moved out to the new burbs. Living within a few miles of work is great and being able to walk or bike places is awesome. I don't know how much you'd need to pay me to get me on that hour-long highway commute from the suburbs every day.
I mean, they are expensive because there are more people than available housing, and because there are lots of people making lots of money so they can spend more on stuff. But if those people want to leave, that reduces demand so prices should reduce.
Eventually, we should reach an equilibrium (or at least something more stable).
Its even worse in Vancouver.
I don't think its the end of the world. With a bit of luck and discipline, my retirement will be funded by investments.
(edit: i am using the rule of not spending more than 30% of after tax income on housing)
The conditions are ripe. A generation of hipsters (I don't say that in a disparaging way) that have a fetish for authenticity, craft skills, and clean living; are also financially stretched to their limits even when sharing houses; have a strong desire to be part of a community in a society that is focused on the individual, and can't afford to create a community the traditional way (i.e. by starting a family). Communes (not necessarily rural) are coming back.
Rural are possible but cities aren't cool with people setting up shop in uninspected old factories or lofts.
Our home was a true community hub. We hosted a lot of events. It was a great way to live as a young person. In my opinion it was the cooking roster (you cooked once every two weeks for everyone else in the house) and the fact that we all sat down to a shared meal that made it work. Without that it would probably have devolved from a large family-like situation into something more like a large hostel situation.
I live outside the city so I don't pay insane rents. While I watch to blow that over.
I say no problem with that. It is there fault. They don't need to live there and, especially pay any rent which is way too high.