The carpetbagger’s guide to home ownership(granolashotgun.com)
granolashotgun.com
The carpetbagger’s guide to home ownership
https://www.granolashotgun.com/granolashotguncom/investors-and-affordable-housing
227 comments
Main thing I see people attacking this guy over is the “I did it and so can you” mentality more than anything. It’s survivorship bias at its strongest. No different than the FIRE post trending here as well. Dude literally saw his NW double in a year and income go up 50% cause of stock appreciation. Along with incredible starting salary and overall close to top tier comp the entire way - and no kids or what not.
I think people just really hate these “stories” because it’s not realistically repeatable. Someone will make it happen but it’ll be based off luck and nothing else. Even the dude in the fire thing wishes he did startups for 6 years. Mindlessly ignoring he’d get paid way less but oh wait - of course his story would only be posted if he joined a company that IPO’d and he got 8 figures out of it.
It’s just so annoying to see this shit on HN all the time. It’s some weird capitalism fetishism porn.
I think people just really hate these “stories” because it’s not realistically repeatable. Someone will make it happen but it’ll be based off luck and nothing else. Even the dude in the fire thing wishes he did startups for 6 years. Mindlessly ignoring he’d get paid way less but oh wait - of course his story would only be posted if he joined a company that IPO’d and he got 8 figures out of it.
It’s just so annoying to see this shit on HN all the time. It’s some weird capitalism fetishism porn.
>"I did it and so can you"
What is the antithesis here? "You won't succeed, so don't bother trying. Become an employee, rail against capitalism and wage slavery."
Dismissing it as luck can only work if the author succeeded on the first try. Did everyone succeed on the first try? Before it can be called "survivor's bias", you need to survive. If you croak at the first unforeseen and perhaps unfair hardship...
What is missing from many of these stories are the concepts and ideas which were eliminated by failure or analysis. It would be unusual for the first idea that pops into someone's head to come to successful fruition.
Maybe it would be illustrative if the author listed all of his failed endeavors and how he reasoned his way through them. Undoubtedly, it would make for much longer-form content and perhaps ramble off-track from his chosen subject.
Persistence is an unspoken companion to what you flippantly dismiss as luck. Trial and error, iterative improvements and self-sacrifice are also key ingredients.
Of course, you don't need to listen to that. It is much easier to lay blame than manifest the change you wish to see.
What is the antithesis here? "You won't succeed, so don't bother trying. Become an employee, rail against capitalism and wage slavery."
Dismissing it as luck can only work if the author succeeded on the first try. Did everyone succeed on the first try? Before it can be called "survivor's bias", you need to survive. If you croak at the first unforeseen and perhaps unfair hardship...
What is missing from many of these stories are the concepts and ideas which were eliminated by failure or analysis. It would be unusual for the first idea that pops into someone's head to come to successful fruition.
Maybe it would be illustrative if the author listed all of his failed endeavors and how he reasoned his way through them. Undoubtedly, it would make for much longer-form content and perhaps ramble off-track from his chosen subject.
Persistence is an unspoken companion to what you flippantly dismiss as luck. Trial and error, iterative improvements and self-sacrifice are also key ingredients.
Of course, you don't need to listen to that. It is much easier to lay blame than manifest the change you wish to see.
Not everyone can or wants to be persistent enough to do this kind of thing. In isolation these stories are interesting. As policy, these stories argue against changes to housing and zoning in the US, which are obviously needed. Like, "live in and remodel a shed and wait to capitalize on a historically bad housing market wipeout" isn't useful advice, much less a housing policy.
That was your takeaway? Mine was entirely different. Here are some things I took away:
ADUs and in-law units are great.
It’s too hard for a group of friends to buy an apartment building. They had to masquerade as a slumlord to do it. That’s probably a failing in laws and policies.
Buying property is a viable strategy to rise in this society.
Buying land and building a house is possible, but harder than it should be.
It’s possible to buy damaged property, make it livable and rent it to people who want it without selling your soul.
I’ve got some money in the stock market that would probably serve humanity better if I bought some unlivable property and spent the time and money to make it livable. Not sure if I want to be a landlord, but the first part appeals to me. We need more housing and I’d love to put my resources behind that effort. Yes, we need sweeping policy changes too. Link me your proposal and I’ll give it a read.
I’ve got some money in the stock market that would probably serve humanity better if I bought some unlivable property and spent the time and money to make it livable. Not sure if I want to be a landlord, but the first part appeals to me. We need more housing and I’d love to put my resources behind that effort. Yes, we need sweeping policy changes too. Link me your proposal and I’ll give it a read.
I'm not saying those things aren't in there, but they're pretty niche. Like, how often is a group of friends trying to buy a multi-unit building?
The big bad here is lack of housing supply brought on by NIMBY-ism and a shortage of tradespeople (maybe this also speaks to our inability to evolve housing construction as well), and the danger is more or less that policymakers and voters will read this story and think "see, all you have to do is <list of ridiculous and lucky things> and you too can own a home in one of the most expensive places on Earth."
For policy and such, the problem is complicated. Going to housing site:vox.com in DDG isn't a bad idea. But secondarily, I'm interested in prefab and modular housing. A lot of it is better suited to modern housing needs (more efficient--not just 2x4s, fiberglass and Tyvek, cheaper, less construction waste, way less build time on site, smaller and thus higher density, etc).
The big bad here is lack of housing supply brought on by NIMBY-ism and a shortage of tradespeople (maybe this also speaks to our inability to evolve housing construction as well), and the danger is more or less that policymakers and voters will read this story and think "see, all you have to do is <list of ridiculous and lucky things> and you too can own a home in one of the most expensive places on Earth."
For policy and such, the problem is complicated. Going to housing site:vox.com in DDG isn't a bad idea. But secondarily, I'm interested in prefab and modular housing. A lot of it is better suited to modern housing needs (more efficient--not just 2x4s, fiberglass and Tyvek, cheaper, less construction waste, way less build time on site, smaller and thus higher density, etc).
Agreed. I'm not advocating for a housing policy in this observation.
Waiting for housing policy to fit with your ideal of a just world isn't reasonable advice for everyone. There are things which for practical intents and purposes, are beyond our control. If you are looking for change, it is better to focus on the things within immediate control.
Waiting for housing policy to fit with your ideal of a just world isn't reasonable advice for everyone. There are things which for practical intents and purposes, are beyond our control. If you are looking for change, it is better to focus on the things within immediate control.
Super agree, but I will say I have a hard time ignoring the feeling that more and more things that used to be in my control are now beyond it.
Isn't that one of the problems with the pessimistic lament at the top of this thread?
Conditions are rarely if ever static for extended periods of time. The entrepreneur must adapt to the opportunities presented. The popular idiom is, "Where one door closes, another opens".
The observation about 2008 housing prices was telling. A market can stay depressed for extended periods of time. Pessimists could have experienced that same market and missed the opportunity. When evaluating in hindsight the uncertainty of imperfect information inside the moment can be overlooked.
Not only are opportunities constantly changing, but each individual brings unique knowledge to any given situation. Therefore the opportunities in a given situation are differ from one individual to the next. From this point it is easy to see to the value of adaptation and innovation. The man in the article didn't just accept the world as it is, he thought out of the box and created solutions where others saw problems.
I agree that things have changed and that doors have been closed. Some of them may never open again in our lifetimes. Yet at the same time I feel optimistic. There are incredible opportunities all across the Internet. Many here have the technical skills to realize them, but they lack the entrepreneurial vision.
Conditions are rarely if ever static for extended periods of time. The entrepreneur must adapt to the opportunities presented. The popular idiom is, "Where one door closes, another opens".
The observation about 2008 housing prices was telling. A market can stay depressed for extended periods of time. Pessimists could have experienced that same market and missed the opportunity. When evaluating in hindsight the uncertainty of imperfect information inside the moment can be overlooked.
Not only are opportunities constantly changing, but each individual brings unique knowledge to any given situation. Therefore the opportunities in a given situation are differ from one individual to the next. From this point it is easy to see to the value of adaptation and innovation. The man in the article didn't just accept the world as it is, he thought out of the box and created solutions where others saw problems.
I agree that things have changed and that doors have been closed. Some of them may never open again in our lifetimes. Yet at the same time I feel optimistic. There are incredible opportunities all across the Internet. Many here have the technical skills to realize them, but they lack the entrepreneurial vision.
I mean, we can keep restating our positions here:
aww_dang: there's always an opportunity somewhere
camgunz: that may be true, but it can also be true there are fewer opportunities, which I find worrying
aww_dang: but what does that matter if there's always one
camgunz: I think the total number of opportunities matters
aww_dang: I don't
aww_dang: there's always an opportunity somewhere
camgunz: that may be true, but it can also be true there are fewer opportunities, which I find worrying
aww_dang: but what does that matter if there's always one
camgunz: I think the total number of opportunities matters
aww_dang: I don't
> Dismissing it as luck can only work if the author succeeded on the first try.
This is wrong, or your definition of "luck" is different to mine and most other people, I assume.
This is wrong, or your definition of "luck" is different to mine and most other people, I assume.
Winning 50 coin flips in a row is lucky. Winning 50 coin flips out of 100 is persistence.
Quitting after 3 coin flips because the flipper sneered at you is called being a quitter. Maybe it was unfair and unlucky that he sneered, but the reason you didn't get 50 wins isn't because the world is unfair or that you are unlucky. It is because you didn't flip a coin 100 times.
Certain ideologies empower you for success. Others turn you into a victim.
Quitting after 3 coin flips because the flipper sneered at you is called being a quitter. Maybe it was unfair and unlucky that he sneered, but the reason you didn't get 50 wins isn't because the world is unfair or that you are unlucky. It is because you didn't flip a coin 100 times.
Certain ideologies empower you for success. Others turn you into a victim.
HN is part of a Silicon Valley venture capital incubator. It exists to be capitalism fetish porn.
Living below your means is repeatable (and desirable). Riding a bike instead of driving a car is repeatable (and beneficial).
Buying land and building a house, buying distressed property and carefully investing time and money to rehab it… all repeatable. All things that benefit society.
This isn’t capitalist fetish porn.
This isn’t capitalist fetish porn.
I think some people find it frustrating to see that the system does in fact work; that the narrative they’ve chosen to believe is just cynical and wrong. That a person on a house cleaners income can find a way to own property in SF as well as around the country. And be good about it by finding properties that need some love and investing in them.
I thought it was a great story about a person that saw the vast opportunities in front of them and used a bit of grit and smarts to make happen the future they wanted.
I thought it was a great story about a person that saw the vast opportunities in front of them and used a bit of grit and smarts to make happen the future they wanted.
lol - did you not look at the prices they were dealing with? They bought an apartment building with friends and their share of the mortgage was only $900/month - half of which was shared with their partner. $900/month is a joke - even for back then. They bought land with cash that was even remotely near SF as well - unfathomable now.
This person bought before prices in SF were so above and beyond what anyone near that level of income could ever afford.
This is just survivorship bias mixed with a bit of “I did it during a time when prices were nowhere near what they are now”.
Story sucks because it’s not a story of grit and smarts. It’s a story of unrepeatability.
This person bought before prices in SF were so above and beyond what anyone near that level of income could ever afford.
This is just survivorship bias mixed with a bit of “I did it during a time when prices were nowhere near what they are now”.
Story sucks because it’s not a story of grit and smarts. It’s a story of unrepeatability.
You're not wrong that they did it during a better time. But the move to get a bunch of friends to essentially move in and take over an apartment building and then buy it (in a non-forced manner) was pretty clever.
I think my issue with that is that it’s not going to be easy to do in the current market. Back then - it was more doable. They were able to buy under market value (when that likely wasn’t very much to begin with) and manage the loan with each other. Now where each person needs to make $250k+ to afford buying the apartment - you’re getting into territory where you’re unlikely to find people who want to buy that apartment and move into one whole place with you. Maybe it’s doable but the virtue of it being so expensive and the incomes required being so high means that it’s very unlikely to be reproducible unless you only associate with very high income people and those people also like apartments.
I find high income folks generally want to move away from apartments as they age and they want to do so at a much faster rate than someone in a much lower income bracket would.
I find high income folks generally want to move away from apartments as they age and they want to do so at a much faster rate than someone in a much lower income bracket would.
This person was able to buy cheap in 2008 because they had cash instead of debt. Imagine if they had all their cash in stocks in 2008...
Remember when there was a drastic exodus of renters from SF about a year ago? Multi unit apartment buildings were selling for remarkably affordable prices. A friend of mine was looking at a property that fit in the mentioned cost profile. There was a brick wall that either concealed a good foundation or a colossal problem so he passed. If he’d persisted and drilled a hole it could have been a winner.
That part of the story was repeatable in the last year.
It’s not unreasonable to find a buildable lot for $40k within two hours drive of SF (I’ve looked) that part is repeatable. I found a house in Sonoma county for $450k. Needed work, that part is repeatable.
I imagine you could find property to rehab and rent in Wisconsin if you tried.
Maybe what you mean is “this sounds like more effort than I’d be willing to put in”
Increasing housing increases demand on alot of other resources (medical, kindergarten, streets, public transport, schools,...). how do you orchestrate such a rise in demand in a densely populated city like san francisco quickly (dense in the sense of non-used land, not by population)?
I live in SF. The resources you mention are not currently a limiting factor.
Medical: is provided by private companies like Kaiser, who have proven their ability to grow as their customer base grows.
Kindergarten: the school district has excess capacity, as # students has shrunk from 70k+ to fewer than 50k. They will probably need to close some schools to increase utilization.
Streets: the streets in San Francisco are way less crowded than anywhere else I've lived.
Public transport: the last few times I've taken the bus, it's been easy to find a seat. The last time I took the BART it was nearly empty.
Schools: see comment above.
Medical: is provided by private companies like Kaiser, who have proven their ability to grow as their customer base grows.
Kindergarten: the school district has excess capacity, as # students has shrunk from 70k+ to fewer than 50k. They will probably need to close some schools to increase utilization.
Streets: the streets in San Francisco are way less crowded than anywhere else I've lived.
Public transport: the last few times I've taken the bus, it's been easy to find a seat. The last time I took the BART it was nearly empty.
Schools: see comment above.
I can't comment on Kaiser or SF, not familiar with either. But great if Kaiser can just create GPs and consultants localised in newly built areas like that. well done them. To be honest, I forgot the private aspect of health care in the US. I wonder how city planners are planning around that.
> Public transport: the last few times I've taken the bus, it's been easy to find a seat. The last time I took the BART it was nearly empty.
if that is the case, SF has either the most amazing public transportation already or the most under-used public transportation. or you are simply cheery-picking.
school, kindergarten and medical need to be in close vicinity though. the overall capacity is meaningless for the first two if you build housing for an additional 15k within a few blocks and then have no GPs (and to a lesser extend consultants) within a few minutes of walking or no hospital within a quick driving distance. and if that 70k to 50k (i assume it is not covid related) is uniformly across all kindergartens, it is pretty meaningless for housing
> Public transport: the last few times I've taken the bus, it's been easy to find a seat. The last time I took the BART it was nearly empty.
if that is the case, SF has either the most amazing public transportation already or the most under-used public transportation. or you are simply cheery-picking.
school, kindergarten and medical need to be in close vicinity though. the overall capacity is meaningless for the first two if you build housing for an additional 15k within a few blocks and then have no GPs (and to a lesser extend consultants) within a few minutes of walking or no hospital within a quick driving distance. and if that 70k to 50k (i assume it is not covid related) is uniformly across all kindergartens, it is pretty meaningless for housing
"I can't comment on Kaiser or SF"
The comment to which you replied was specifically talking about SF so I assumed (reasonably I think) that you were commenting about SF, too.
"if that is the case, SF has either the most amazing public transportation already or the most under-used public transportation. or you are simply cheery-picking."
Those are not the only explanations. And, given I said live in SF, maybe it's reasonable to assume I'm reporting actual observations, unless I've previously demonstrated some pattern of exaggeration.
The comment to which you replied was specifically talking about SF so I assumed (reasonably I think) that you were commenting about SF, too.
"if that is the case, SF has either the most amazing public transportation already or the most under-used public transportation. or you are simply cheery-picking."
Those are not the only explanations. And, given I said live in SF, maybe it's reasonable to assume I'm reporting actual observations, unless I've previously demonstrated some pattern of exaggeration.
Mind sharing some other explanations?
Some potential explanations off ghr top of my head...
- I happened to get lucky on my last 5 journeys
- Many people how have more flexibility about when they start/end work, even if they're not working remotely
- People are avoiding public transport due to worries about COVID and increasing crime
- Outside of peak hours, buses still need to run with some minimum frequency to be a viable option, so they often run empty or with only 1-5 passengers
You could come up with others...
- I happened to get lucky on my last 5 journeys
- Many people how have more flexibility about when they start/end work, even if they're not working remotely
- People are avoiding public transport due to worries about COVID and increasing crime
- Outside of peak hours, buses still need to run with some minimum frequency to be a viable option, so they often run empty or with only 1-5 passengers
You could come up with others...
How much of those stats are pandemic related? (i.e. were true in 2019).
I'm ex-bay area since 2016, but I recall standing room only BART and shoulder-to-shoulder CALTRAIN can't add another body when heading to south bay. Although I didn't take SF bus, or send kids to Kindergarten.
I'm ex-bay area since 2016, but I recall standing room only BART and shoulder-to-shoulder CALTRAIN can't add another body when heading to south bay. Although I didn't take SF bus, or send kids to Kindergarten.
The stats I quoted (drop from 70k to 50k) are not pandemic related. The drop has been gradual, as SF has become less hospitable to people with kids (costs, safety, school quality).
The enrollment dropped from 2019 to now, but by something like 5k (on my phone and don't have the exact stats handy).
My anecdotes about the last few journeys I took are recent, not from 2019. But, even in 2019, my experience of public transport in San Francisco was that it was far less crowded than that in London, New York or Beijing.
SF's roads are not congested. If buses were to become crowded due to increased population, we could just buy more buses and increase the frequency. This would keep crowding at current levels, whilst reducing wait times, thus making buses far more convenient than they are today.
Regarding Caltrain: if SF had more housing, fewer people who work in SF would need to live outside and take Caltrain in.
The enrollment dropped from 2019 to now, but by something like 5k (on my phone and don't have the exact stats handy).
My anecdotes about the last few journeys I took are recent, not from 2019. But, even in 2019, my experience of public transport in San Francisco was that it was far less crowded than that in London, New York or Beijing.
SF's roads are not congested. If buses were to become crowded due to increased population, we could just buy more buses and increase the frequency. This would keep crowding at current levels, whilst reducing wait times, thus making buses far more convenient than they are today.
Regarding Caltrain: if SF had more housing, fewer people who work in SF would need to live outside and take Caltrain in.
City planners have a wide variety of opinions about this, and all of them are pretty useful. Most of them will mean a decline in effective property values, which is almost ALWAYS strongly opposed by the public.
A lot of these things can scale vertically rather than horizontally. If you allow denser housing by building higher, schools and hospitals can also build higher.
> kindergartens, schools and medical offices.
Where exactly do you think schooling and medical practices happen or children are taken care of?
>Public transport
How hard is to coordinate to double the number of trains or buses?
> Streets
I don't know what you mean by the demand of streets increases.
Most times solving the housing problem is a lack of will or coordination, and the solution is muddled/deleted/delayed indefinitely by arguments like this.
Where exactly do you think schooling and medical practices happen or children are taken care of?
>Public transport
How hard is to coordinate to double the number of trains or buses?
> Streets
I don't know what you mean by the demand of streets increases.
Most times solving the housing problem is a lack of will or coordination, and the solution is muddled/deleted/delayed indefinitely by arguments like this.
And alot of times, especially with mass transit, there are economies if scale.
So it's even more efficient with higher population.
So it's even more efficient with higher population.
> Where exactly do you think schooling and medical practices happen or children are taken care of?
in close vicinity of the housing. not sure i understand the question.
> How hard is to coordinate to double the number of trains or buses?
running a bus during peak hours at twice your current rate (unless the rate is completely ridicilous) does not sound easy. why do you assume it is? at that rate, for SF at least, you are talking subway.
by streets i meant the higher volume during peak hours that need to be sustained (walking, cycling, driving, busses, trams, parking etc).
in close vicinity of the housing. not sure i understand the question.
> How hard is to coordinate to double the number of trains or buses?
running a bus during peak hours at twice your current rate (unless the rate is completely ridicilous) does not sound easy. why do you assume it is? at that rate, for SF at least, you are talking subway.
by streets i meant the higher volume during peak hours that need to be sustained (walking, cycling, driving, busses, trams, parking etc).
"running a bus during peak hours at twice your current rate (unless the rate is completely ridicilous) does not sound easy"
The 14R (the fastest bus from my home to downtown SF) is scheduled to run every 10 mins (on average) during the morning peak.
Running that bus every 5 mins (which presents no special difficulty) would double the capacity, and reduce average wait time by 5 mins.
The 14R (the fastest bus from my home to downtown SF) is scheduled to run every 10 mins (on average) during the morning peak.
Running that bus every 5 mins (which presents no special difficulty) would double the capacity, and reduce average wait time by 5 mins.
Can you please back up the claim that doubling every bus and tram does not present special difficulty? I would genuinely love to read an actual analysis of 'just doubling the frequency', does not even have to be San Francisco per se.
I didn't say every bus.
I didn't mention trams.
I wasn't making a general case that's applicable to every city.
I was talking about specifically about SF, which has relatively uncongested roads, bus lanes that are mostly empty, and where the busiest bus stops receive buses no more than ~10 times per hour.
I didn't mention trams.
I wasn't making a general case that's applicable to every city.
I was talking about specifically about SF, which has relatively uncongested roads, bus lanes that are mostly empty, and where the busiest bus stops receive buses no more than ~10 times per hour.
You said this:
> Running that bus every 5 mins (which presents no special difficulty) would double the capacity, and reduce average wait time by 5 mins.
the problem with public transportation among other things are connections. running specific buses with a higher frequency does not give you a lower wait time (on the journey) but only on that stop.
> I didn't say every bus. > I didn't mention trams.
ok i don't get it. why did you bring this up at all then?
> Running that bus every 5 mins (which presents no special difficulty) would double the capacity, and reduce average wait time by 5 mins.
the problem with public transportation among other things are connections. running specific buses with a higher frequency does not give you a lower wait time (on the journey) but only on that stop.
> I didn't say every bus. > I didn't mention trams.
ok i don't get it. why did you bring this up at all then?
I've looked into moving to Japan. My family has a house in Setagaya, which had severely distorted what I thought Tokyo living to be. It turns out, a typical one bedroom apartment is like 20 sq meters.
Separate from that, I don't believe zoning has anything to do with housing shortages. Housing has "induced demand" similar to traffic. You can look at heavy traffic over a bridge and think, "if only we had another bridge, that would alleviate the traffic." But it turns out, when you do that, more people end up using both bridges and traffic becomes as bad as it was before. Housing is similar. If you build more houses, even more people want them. Look at places like NYC, which has extremely dense housing. It's still expensive.
Separate from that, I don't believe zoning has anything to do with housing shortages. Housing has "induced demand" similar to traffic. You can look at heavy traffic over a bridge and think, "if only we had another bridge, that would alleviate the traffic." But it turns out, when you do that, more people end up using both bridges and traffic becomes as bad as it was before. Housing is similar. If you build more houses, even more people want them. Look at places like NYC, which has extremely dense housing. It's still expensive.
This is absolutely wrong. Pretty much every single piece of evidence we have shows that zoning has a massively impactful effect on the supply of housing. Similarly, the vast majority of studies looking at the issue show that induced demand doesn't occur for housing (that is, adding housing supply does lower prices, rather than simply causing people to consume more).
With regard to NYC, even though it has added around 250-300K housing units over the past fifteen years or so, it has added around three times that in jobs. If housing supply isn't increasing in line with people, you will see increases in prices.
Some links:
- https://www.planetizen.com/news/2019/06/104783-doubt-cast-in...
- https://www.youtube.com/watch?v=c7FB_xI-U6w
- https://furmancenter.org/thestoop/entry/supply-skepticism-ho...
- https://furmancenter.org/files/sotc/SOC_2017_FOCUS_Changes_i... (the key quote here being: "In 2016, NYC had 8.2 percent more housing units, 11 percent more adults, and 16.5 percent more jobs than it did in 2000.")
With regard to NYC, even though it has added around 250-300K housing units over the past fifteen years or so, it has added around three times that in jobs. If housing supply isn't increasing in line with people, you will see increases in prices.
Some links:
- https://www.planetizen.com/news/2019/06/104783-doubt-cast-in...
- https://www.youtube.com/watch?v=c7FB_xI-U6w
- https://furmancenter.org/thestoop/entry/supply-skepticism-ho...
- https://furmancenter.org/files/sotc/SOC_2017_FOCUS_Changes_i... (the key quote here being: "In 2016, NYC had 8.2 percent more housing units, 11 percent more adults, and 16.5 percent more jobs than it did in 2000.")
Your sources contradict themselves. For instance, the Furman Center article states that adding luxury housing does not make housing more affordable. The paper from Northwestern states the opposite (luxury housing decreases surrounding rents). Just from looking at the paper from Northwestern, their area of study has significantly lower rents than their control group. It’s not as clear cut as you make it seem. Also, jobs growing with housing supply could possibly be an example of induced demand.
Houston's housing isn't expensive though. It has few zoning laws and is not land constrained though (unlike NYC or SF).
There's also an awfully short list of places in the US that sprawl more than Houston.
I'm not arguing that sprawl is inherently bad, but it definitely does add the need to own a car (for most people) and spend a lot of time in it (ditto).
I'm not arguing that sprawl is inherently bad, but it definitely does add the need to own a car (for most people) and spend a lot of time in it (ditto).
You're right that housing supply is an issue, but second homes and investment homes are a major issue as well. Too much housing stock sits empty and the ultimate end result is that a very small portion of individuals get richer, meanwhile millions of people are desperate to buy their first home.
Both problems need to be solved, one with more housing, one with tax incentives.
Both problems need to be solved, one with more housing, one with tax incentives.
Out of curiosity, how big is a 3 bedroom apartment in Japan?
It's tiny by US standards, but they use different types of furniture, so it's comfortable. They tend to use a lot of wall hooks, tons of tiny drawers, smaller convertible beds, etc.
I was living there with my wife and her two family members and had no trouble at all. That place was about 700 square feet, but it felt like an 1100 square foot place would in the US with giant furniture and large open floor spaces. I had a ~150 square foot room set aside for my office and VR space, the in-laws had a bedroom with tatami mats, there was a large-ish living room/kitchen with a big TV and couch, and then a bedroom for me and the wife
I was living there with my wife and her two family members and had no trouble at all. That place was about 700 square feet, but it felt like an 1100 square foot place would in the US with giant furniture and large open floor spaces. I had a ~150 square foot room set aside for my office and VR space, the in-laws had a bedroom with tatami mats, there was a large-ish living room/kitchen with a big TV and couch, and then a bedroom for me and the wife
Bigger than a homeless guy shopping cart.
Tokyo is somewhat good example, but brushes off things that houses are much smaller and IIRC you don’t own land below it.
Capitalism inherently exploits economically unequal systems, and thus incentivizes them in both the private and public sectors (especially in the US where politicians are basically owned outright[1]). So, yes, it is "companies"... or more specifically, large wealth-owned profit-takers, that are the root cause of the supply-demand curves AND the zoning AND all of the other contributing factors. The fact that there are different sets of capitalists (rent and investment exploiters versus labor exploiters) who have varying influence on politicians is secondary to the fact that the politicians are primarily if not solely doing the bidding of capitalists. Attempts at corporate externalizing of risk happen in multiple contradictory directions, thus causing inconsistent public policy. Regardless, privatized-profit motivated externalization of public risk is the core problem. GDP-centric increases in productivity mean precisely fuckall for working class quality of life until we solve for the fact that the entirety of increased productivity gains have gone to the wealthy in the past 5 decades[2]. I do think as a society we should build more affordable housing in densely populated areas, but allowing capitalists to hold the reins for that would accelerate all of the problems of late stage capitalism.
Lastly, Japan has succeeded where others have failed because of a cultural difference which highly values new builds over old homes. They dispose of their homes and rebuild, as often as the US disposes of old cars and builds replacements... So political leverage by real estate investors is less of a concern there, a 30 year old home might be considered close to worthless. At the same time it creates other risk externalization problems like a colossal amount of inefficiency and waste. The only way to get a similar result of reasonable pricing in urban areas where real estate is profit-driven as opposed to use-driven, would be though affordable public housing as a counterbalance. We've seen time and again that capitalist housing development will naturally result in more capitalist-driven inequality. Investors will continue to buy making the bubble worse, then when the bubble pops the rich buy even more stock as disproportionately middle class and poor investors are forced to liquidate, as happened in the 2008 bust.
[1]: https://www.youtube.com/watch?v=5tu32CCA_Ig
[2]:https://www.vox.com/policy-and-politics/2017/8/8/16112368/pi... (or the same chart any of dozens of places)
Lastly, Japan has succeeded where others have failed because of a cultural difference which highly values new builds over old homes. They dispose of their homes and rebuild, as often as the US disposes of old cars and builds replacements... So political leverage by real estate investors is less of a concern there, a 30 year old home might be considered close to worthless. At the same time it creates other risk externalization problems like a colossal amount of inefficiency and waste. The only way to get a similar result of reasonable pricing in urban areas where real estate is profit-driven as opposed to use-driven, would be though affordable public housing as a counterbalance. We've seen time and again that capitalist housing development will naturally result in more capitalist-driven inequality. Investors will continue to buy making the bubble worse, then when the bubble pops the rich buy even more stock as disproportionately middle class and poor investors are forced to liquidate, as happened in the 2008 bust.
[1]: https://www.youtube.com/watch?v=5tu32CCA_Ig
[2]:https://www.vox.com/policy-and-politics/2017/8/8/16112368/pi... (or the same chart any of dozens of places)
I mean, don’t the people who live in a place have the right to decide they don’t want to invite in population until their homes are turned into a megacity? And if people don’t like the prevailing political opinions of a place that doesn’t want to change its nature to suit them, aren’t there plenty of other places to go?
The market its screwed up in the Bay Area because they in way more jobs than they wanted to let in housing, that’s a problem, but I don’t begrudge people that want to put limits on density because they want to live in a certain kind of place.
The market its screwed up in the Bay Area because they in way more jobs than they wanted to let in housing, that’s a problem, but I don’t begrudge people that want to put limits on density because they want to live in a certain kind of place.
No, they don't.
Ifbyou want control over who can move in somewhere, or what can be built somewhere, you have a simple solution, buy the land in question.
Ifbyou want control over who can move in somewhere, or what can be built somewhere, you have a simple solution, buy the land in question.
> buy the land in question.
NIMBYs will argue that, in a certain sense, they did: they bought the land their houses stand on decades or centuries ago, when the area was farm land, and then promoted a city charter for a certain type of community, together with every other citizen in the area. They paid taxes for local infrastructure, schools, time and effort to organize and solve community issues, inconvenience when a new water mains or bypass was built etc. etc.
This whole communal development is what made the area desirable, it's not like they are hoarding limited farmland. It's the combination of private property + working community rules that create property value.
Some owners in the area would now opt out of those rules outside the democratic process pre-agreed to their change, by simply building a large condo building on their plot, depreciating the value of nearby single family homes and pocketing the cash. You can imagine existing owners will fight tooth and nail to maintain the agreed rules.
While i don't 100% subscribe to this point of view and there is much to be said about the exclusionary and down right racist behavior it can enable, the issue of urban development is not quite as clear cut as you make it out to be.
NIMBYs will argue that, in a certain sense, they did: they bought the land their houses stand on decades or centuries ago, when the area was farm land, and then promoted a city charter for a certain type of community, together with every other citizen in the area. They paid taxes for local infrastructure, schools, time and effort to organize and solve community issues, inconvenience when a new water mains or bypass was built etc. etc.
This whole communal development is what made the area desirable, it's not like they are hoarding limited farmland. It's the combination of private property + working community rules that create property value.
Some owners in the area would now opt out of those rules outside the democratic process pre-agreed to their change, by simply building a large condo building on their plot, depreciating the value of nearby single family homes and pocketing the cash. You can imagine existing owners will fight tooth and nail to maintain the agreed rules.
While i don't 100% subscribe to this point of view and there is much to be said about the exclusionary and down right racist behavior it can enable, the issue of urban development is not quite as clear cut as you make it out to be.
I have been pondering this recently, and I feel the most fair solution is to simply reduce the of landowners to have input on what other people do with their land.
I believe the comparison to limited farmland is actually much more appropriate. Land in SF or Seattle is a very valuable and scarce resource. It can help a lot of people when used efficiently.
If you take Seattle for example, the land isn’t valuable because NIMBYs did such a great job running the city. They’ve done an awful job. Every possible mistake has been made. The land is valuable because it’s close to Amazon or Microsoft.
I don’t think that a decline in my property’s value should be a basis for legal restrictions on another person’s right to use their property. That seems like a hijacking of the legal system for my own personal wealth at the very real cost of others.
If a wealthy landowner in Seattle wants a yard and hates the look of skyscrapers, they can sell their land for millions of dollars and buy in a community more suited to their tastes. Nobody likes to move, but making it illegal to use land efficiently for one’s own convenience is frankly pretty disgusting to me.
I believe the comparison to limited farmland is actually much more appropriate. Land in SF or Seattle is a very valuable and scarce resource. It can help a lot of people when used efficiently.
If you take Seattle for example, the land isn’t valuable because NIMBYs did such a great job running the city. They’ve done an awful job. Every possible mistake has been made. The land is valuable because it’s close to Amazon or Microsoft.
I don’t think that a decline in my property’s value should be a basis for legal restrictions on another person’s right to use their property. That seems like a hijacking of the legal system for my own personal wealth at the very real cost of others.
If a wealthy landowner in Seattle wants a yard and hates the look of skyscrapers, they can sell their land for millions of dollars and buy in a community more suited to their tastes. Nobody likes to move, but making it illegal to use land efficiently for one’s own convenience is frankly pretty disgusting to me.
How does new apartment construction impact nearby home values? Usually positively. There can be other issues, of course (more people!) but it’s not right to present increasing density as ripping off the neighbors.
https://www.sandyjournal.com/2021/10/04/370780/how-does-new-...
https://www.sandyjournal.com/2021/10/04/370780/how-does-new-...
The value of land increases with density, but the utility of existing properties decreases.
What's an example of decreased utility? Less parking?
My biggest issue with increased density is shit design. Like, when they spent all the money on lawyers to get approval and stiffed the architects. When it is a nice 5 story building I love it.
My biggest issue with increased density is shit design. Like, when they spent all the money on lawyers to get approval and stiffed the architects. When it is a nice 5 story building I love it.
Lots of people on the outside seem to only like self determination for a population when their decisions agree.
When you realize that in a democracy the poorest don't vote at all and that we are represented by millionaires, it all seems so pointless to vote.
Self determination my ass.
Democratic process isn’t coming to conclusions I agree with -> democracy is a scam -> an authoritarian solution is required because I’m more correct than everyone else
It seems like too many people only have ideals about politics when those ideals result in everyone agreeing with them. Otherwise the whole thing is a rigged scam and not worth the time.
It seems like too many people only have ideals about politics when those ideals result in everyone agreeing with them. Otherwise the whole thing is a rigged scam and not worth the time.
democratic process isn't actually happening -> it's a scam to call it democracy -> a technocratic solution that meets the needs of the burgeoning disenfranchised population is required because the degree of inequality that we're dealing with is creating severe social conflicts
>a technocratic solution that meets the needs of the burgeoning disenfranchised population is required because the degree of inequality that we're dealing with is creating severe social conflicts
I'm sure that the non-elected technocrats wouldn't be susceptible to the "represented by millionaires" problem that you bemoaned about earlier.
I'm sure that the non-elected technocrats wouldn't be susceptible to the "represented by millionaires" problem that you bemoaned about earlier.
Exactly. Technocrats are just oligarchs branding themselves as smarter than everybody else.
i'd be much happier to have healthcare policy be shaped by family practice doctors than by parliamentarians and bill gates
> No, they don't.
> Ifbyou want control over who can move in somewhere, or what can be built somewhere, you have a simple solution, buy the land in question.
That seems contradictory. The existing owners did by definition buy that land they own. So you're saying thus they get to decide, but also that no they don't.
> Ifbyou want control over who can move in somewhere, or what can be built somewhere, you have a simple solution, buy the land in question.
That seems contradictory. The existing owners did by definition buy that land they own. So you're saying thus they get to decide, but also that no they don't.
People who rent also have voting rights for electing local governments in many places in the world.
True, but they still don’t have as much influence on local government as much as more affluent residents. The prime example would be Palo Alto. It’s the NIMBY capital of the world. Even Stanford University has trouble with development on land that they own.
That is mostly their fault for not voting (renters are less likely go vote and thus don't matter). Also their fault for not realizing property tax that the landlord pays comes from rent or lack of maintenance (complex because supply and demand sets rent prices, so tax is a second order effect)
yeah, I wonder if there's anything we can do about this situation
All I can think of is to spread the word about zoning laws, since currently we're still in a situation where renters mostly just get angry at foreigners, rich people, corporations, etc.
Tokyo probably takes things to an extreme that Americans wouldn't like (all the zoning laws are restricted by the national government, as I understand it). I just think it'd be nice if everyone stuck renting overpriced crapholes in the SF Bay Area would start showing up and voting for denser housing
All I can think of is to spread the word about zoning laws, since currently we're still in a situation where renters mostly just get angry at foreigners, rich people, corporations, etc.
Tokyo probably takes things to an extreme that Americans wouldn't like (all the zoning laws are restricted by the national government, as I understand it). I just think it'd be nice if everyone stuck renting overpriced crapholes in the SF Bay Area would start showing up and voting for denser housing
The last time that was possible at least in Palo Alto was before they split from what is now known as East Palo Alto. Even if all the renters voted, they only represent 33% of Palo Alto's population; so no it is NOT their fault.
suction(2)
> A property that has four or fewer apartments is treated the same as a single family home for lending purposes. But five or more units requires a commercial loan. So we created a pro forma and told the bank we were investors looking to be slumlords and this building would cash flow.
This is not a difference of perspective - home loans involve significantly more consumer protections than commercial ones; had things gone another way, the author'd be paying substantially more in rent to whatever landlord purchased the foreclosed five-plex.
Most of the article sweeps risk under the rug as do most stories where the winner is also a lucky survivor.
This is not a difference of perspective - home loans involve significantly more consumer protections than commercial ones; had things gone another way, the author'd be paying substantially more in rent to whatever landlord purchased the foreclosed five-plex.
Most of the article sweeps risk under the rug as do most stories where the winner is also a lucky survivor.
What issues would they have had other than not paying $900/m that would have caused the bank to foreclose? Even a decade ago $900/m wasn’t a lot of money for rent in a major urban metro.
Split between two people as well. Only $450/month. It was really not very much money at all.
Their partner apparently isn’t a house cleaner and supposedly makes a decent living.
Their partner apparently isn’t a house cleaner and supposedly makes a decent living.
One risk might be some kind of legal dispute with the other partners, if they don't get along as expected? Or maybe some devastating expense.
> 5) You don’t need as much house as you’ve been lead to believe. Instead of trading up for a larger fancier house with more debt as you age, consider living simply and buying additional homes for diversified income.
IMO (in the process of doing this myself), this is the most important point
IMO (in the process of doing this myself), this is the most important point
> 5) You don’t need as much house as you’ve been lead to believe.
For living arrangements, you are mostly correct. I can exist very comfortably in about 1,000ft². Heck, even 800ft² would be comfy and cosy.
My problem involves my hobbies and domestic activities: I need a 200ft² cool room for the enormous amounts of fruits and vegetables I harvest every year, canning all that shit needs a 150ft² summer kitchen so I don’t seize up my regular kitchen with all that processing (I use that summer kitchen consistently at least six months out of the year), I need a library the size of a master bedroom (at least another 200ft²) for my books (including the movable stacks on rails), I do enough woodworking to need a garage-sized shop (500ft²) , and my IT work requires no small office (180ft² and an attached server room (80ft²) with its own cooling. Plus, I regularly use a wet sauna, which needs the same amount of room as a laundry.
So that balloons my requirements by _at least_ another 1,500ft², to say nothing of the needs of my wife.
For living arrangements, you are mostly correct. I can exist very comfortably in about 1,000ft². Heck, even 800ft² would be comfy and cosy.
My problem involves my hobbies and domestic activities: I need a 200ft² cool room for the enormous amounts of fruits and vegetables I harvest every year, canning all that shit needs a 150ft² summer kitchen so I don’t seize up my regular kitchen with all that processing (I use that summer kitchen consistently at least six months out of the year), I need a library the size of a master bedroom (at least another 200ft²) for my books (including the movable stacks on rails), I do enough woodworking to need a garage-sized shop (500ft²) , and my IT work requires no small office (180ft² and an attached server room (80ft²) with its own cooling. Plus, I regularly use a wet sauna, which needs the same amount of room as a laundry.
So that balloons my requirements by _at least_ another 1,500ft², to say nothing of the needs of my wife.
Many of the needs seem like wants and then it just depends on how much you these things are worth to you.
> Many of the needs seem like wants
This is true of initial 800 sq ft as well.
This is true of initial 800 sq ft as well.
True of anything beyond simplistic shelter that barely keeps you alive.
Everything is a want when you want it to be. Is even living really a need? After all - you can just die and then you don’t definitely don’t need/want anything then for sure!
Everything is a want when you want it to be. Is even living really a need? After all - you can just die and then you don’t definitely don’t need/want anything then for sure!
240m2 is a compromise... Consider the possibility that you're out of touch.
You don’t “need” any of that.
You also don’t “need” a second home for diversified income.
Prioritising your finances over a satisfying and interesting life sounds dull, and like a great way to make yourself mentally unwell if you do it for too long.
Not everyone’s preferred life “needs” much space but when yours does, not having it can be very stifling and stressful.
Prioritising your finances over a satisfying and interesting life sounds dull, and like a great way to make yourself mentally unwell if you do it for too long.
Not everyone’s preferred life “needs” much space but when yours does, not having it can be very stifling and stressful.
You don't "need" very much of anything. People get by with a 100-200sqft room shared with other people, but that doesn't mean it's what I would want to live in.
I feel like it's kinda missing the point of the article to say that you "need" 500sqft for canning. That is a want, plain and simple. Wants can be expensive. Indulging wants like this is something that rich people can afford to do, and if you are rich that is good for you! But indulging this want is far from economically efficient, especially in a high cost of living real estate market. It's basically the exact opposite of the point of the article.
You don't strictly speaking need indoor plumbing, a private bedroom, windows, or paint that doesn't have lead in it. If you're rich enough to afford windows, a bedroom you don't share with another family, and to not have your kids die from heavy metal poisoning, then good for you! But indulging many of these wants is hardly economically efficient.
Are you seriously suggesting that the need for a "summer kitchen for canning fruit" and a "private bedroom" represent the same human needs? Because if you are that might be the funniest, most entitled thing I've ever read on HN.
Nope, I'm suggesting that wants and needs are a sliding scale with no clear dividing line except subsistence, and that it's therefore a bad idea to argue for lowering your standard of living to only what you strictly need.
This is pretty obvious if you don't take a deliberately uncharitable perspective on what I wrote.
This is pretty obvious if you don't take a deliberately uncharitable perspective on what I wrote.
Anyone who thinks the privacy to sleep in your own bedroom and the luxury to have a second kitchen to use for canning fruit because it'd make using your first kitchen a little harder are two points on the same scale is just plain wrong. They aren't. One is a point on the scale of "things you need for basic human dignity", and the other is a point on the scale of "amusing shit deluded rich people think is normal." Those are definitely different scales.
Arguing they're just two points on the same scale makes me wonder if you have some sort of agenda to argue that people don't really need bedrooms because they don't really need summer kitchens.
Arguing they're just two points on the same scale makes me wonder if you have some sort of agenda to argue that people don't really need bedrooms because they don't really need summer kitchens.
It seems like you're creating a scale of things you believe everyone ought to have and calling it "needs". If you're defining need in such a subjective way, then telling someone else to divide their life up by what they need vs what they want is telling them to live their life with only the luxuries they're unwilling to compromise on.
That's a great way to live and I approve of it, but I remain steadfastly convinced that it's good for humans to have some unnecessary luxuries.
That's a great way to live and I approve of it, but I remain steadfastly convinced that it's good for humans to have some unnecessary luxuries.
I remain steadfastly convinced that it's good for humans to have some unnecessary luxuries.
It'd be amazing if everyone had things they don't need. I'd love to live in a world where everyone had what they need and more. That's a no brainer.
The problem is that you're saying "the luxuries they're unwilling to compromise on" should be considered needs because some entitled rich idiot isn't able to accept that they could actually live with just one kitchen. That's stupid. They're still luxuries, and absolutely not equivalent to actual needs.
Needs and wants are not the same things. Arguing that they are, and that they're just two things on a scale of wants, or that they're two things on a scale of needs, ignores that there are things people actually need and things that people can live without.
I'm not arguing that rekabis shouldn't have their second kitchen. I'm only saying that they could live without it, and that they would probably give it up before giving up the privacy of their bedroom. Maybe that's wrong. Perhaps they could put a bed in it and sleep there. I don't know.
It'd be amazing if everyone had things they don't need. I'd love to live in a world where everyone had what they need and more. That's a no brainer.
The problem is that you're saying "the luxuries they're unwilling to compromise on" should be considered needs because some entitled rich idiot isn't able to accept that they could actually live with just one kitchen. That's stupid. They're still luxuries, and absolutely not equivalent to actual needs.
Needs and wants are not the same things. Arguing that they are, and that they're just two things on a scale of wants, or that they're two things on a scale of needs, ignores that there are things people actually need and things that people can live without.
I'm not arguing that rekabis shouldn't have their second kitchen. I'm only saying that they could live without it, and that they would probably give it up before giving up the privacy of their bedroom. Maybe that's wrong. Perhaps they could put a bed in it and sleep there. I don't know.
All of those things I listed are things I've either done, or that someone I know has done. Arguing that you need windows or a private room is ridiculous. You do not need them, though they're a reasonable want that nearly everyone has. Not having a private room to sleep in didn't kill me, it doesn't kill the billions of people who do it, and it wouldn't kill you.
The broader point here is that whittling away everything nice about your life to be "economically efficient" (as per the original comment I replied to) is a terrible idea unless you've got no alternative. People should have nice things, like windows and kitchens, and they should have better reasons than economic efficiency for giving them up. I don't think you or I disagree on this.
The broader point here is that whittling away everything nice about your life to be "economically efficient" (as per the original comment I replied to) is a terrible idea unless you've got no alternative. People should have nice things, like windows and kitchens, and they should have better reasons than economic efficiency for giving them up. I don't think you or I disagree on this.
A lot of people with good life outlooks and plenty of dignity have their entire family sleeping in the same bedroom. Your "basic human needs" are actually on a scale that isn't "basic" or "need" at all. I've spent 2y in such a setting, my wife grew up like that. Probably more than half of the planet lives like that.
I am certainly posting in the capacity of having a Western outlook. I didn't make that clear and you rightly point out that the particular need we're talking about isn't a universal one.
Technically we can adapt to a lot and contemporaries with our same biology still routinely make do without much in the way of permanent shelter. However, a summer kitchen is on a different tier of requirement from food safety. If it doesn't seem so to you then we just have a different notion of what is a reasonable baseline to expect from life in this country.
My apartment is 325 square feet. I wish I had a bit more but I have a washer and dryer in my unit too and it’s awesome and cheap for the area. Ideally I’d have 450 or so.
Easy solutions: $10 sauna bag and a Kindle, get your veggies canned from an efficient factory.
And here I was thinking 950sqft was going to be cavernous for my family and my hobbies. We're currently in 750sqft and that's fine, in the Oakland/Berkeley area.
Some might call it trolling…
I am so tempted to get rid of my books.
I will keep the 1st editions, and most reference books.
I feel can toss everyone of my computer books. (Not one did I find well written, or worth keeping. If anyone decided to write a computer/programming book take out every unneeded word. Maybe take a technical writing course if you live near a good university?)
It's just hard to get rid of reference books.
I will keep the 1st editions, and most reference books.
I feel can toss everyone of my computer books. (Not one did I find well written, or worth keeping. If anyone decided to write a computer/programming book take out every unneeded word. Maybe take a technical writing course if you live near a good university?)
It's just hard to get rid of reference books.
My father got old, and had to downsize from a large house to a small flat, which didn't have room for all his books, so most of them went to charity shops. A year later, he advised me "Try not to get rid of your books; you'll regret it."
He's died now, I took over the flat, and moved from a family home into the same flat. I also had to shed a lot of books in the process. I ripped my large CD collection to a media server. I miss some of those books I got rid of; but I like this small flat, and I don't want to dedicate a small room to a library.
The first books I got rid of were computer books. They were all manuals for some obsolescent technology; like, I thought the "Rhino" Javascript book would be useful forever (um, no). I got rid of a few feet of books on Buddhism, and several more feet were books on Western philosophy from my undergraduate days. These were books that had been formative for me, but I was honestly never going to open them again.
So I don't really agree with my father's advice. If you regret ditching a book, you can just replace it.
He's died now, I took over the flat, and moved from a family home into the same flat. I also had to shed a lot of books in the process. I ripped my large CD collection to a media server. I miss some of those books I got rid of; but I like this small flat, and I don't want to dedicate a small room to a library.
The first books I got rid of were computer books. They were all manuals for some obsolescent technology; like, I thought the "Rhino" Javascript book would be useful forever (um, no). I got rid of a few feet of books on Buddhism, and several more feet were books on Western philosophy from my undergraduate days. These were books that had been formative for me, but I was honestly never going to open them again.
So I don't really agree with my father's advice. If you regret ditching a book, you can just replace it.
Yeah, get rid of those computer books.
That's what the internet + ebooks are for.
Unless a book has a special meaning to me personally or is considered life changing, I rarely keep any physical books.
That's what the internet + ebooks are for.
Unless a book has a special meaning to me personally or is considered life changing, I rarely keep any physical books.
Interesting—I find I have a hard time reading technical books on my ebook reader. When I read fiction, it’s usually a linear process, making the reader ideal: read, swipe, repeat until done.
With technical books, I often need to jump to another section, which is so much slower and more painful than with dead trees. Code formatting also tends to be abysmal on my reader—although books are not the best for this either. Maybe I’m not using my device to the fullest?
With technical books, I often need to jump to another section, which is so much slower and more painful than with dead trees. Code formatting also tends to be abysmal on my reader—although books are not the best for this either. Maybe I’m not using my device to the fullest?
I have never found a solution for this. At my desk, with multiple extra screens and a keyboard and mouse for searching and rapid navigation, a PDF is sometimes a decent enough alternative but for non-computer based hobbies as well as reading reference books more casually / when not actually needing to be at my computer I have been unable to find anything close to paper books.
The same is true for music with me as well. It's either Vinyl or free car radio/streaming.
>I lived in an illegal rental to save up for a home, then decided to buy out-of-state properties and drive up the rent. I'm aware of how this will be perceived, but I want to feel good about myself despite knowing how what I'm doing hurts others.
lol
lol
Here's a person who worked a working class job, lived frugally, saved up, took a few risks, and was able to buy a couple out of state properties.
How this will be perceived? Very positively, at least by me. Good for them. We're not talking about a slumlord here.
How this will be perceived? Very positively, at least by me. Good for them. We're not talking about a slumlord here.
The part you're missing is that they bought into one of the highest appreciation real estate markets ever. Yes they made smart moves, but this is mostly a story of falling ass backwards into wealth. Put them in almost any other city and the story doesn't end the same.
And the cherry on top is that they use their new found wealth to deny others the opportunity they had.
And the cherry on top is that they use their new found wealth to deny others the opportunity they had.
I'm missing what they did that denies others opportunity. Buying a couple houses in another state?
And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that.
And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that.
>I'm missing what they did that denies others opportunity. Buying a couple houses in another state?
Yes. The number of affordable fixer uppers in a place like Madison is effectively fixed. The two houses they bought means two fewer young people can climb onto the property ladder.
>And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that.
The wrong part is not having the self awareness to realize that they were lucky.
Yes. The number of affordable fixer uppers in a place like Madison is effectively fixed. The two houses they bought means two fewer young people can climb onto the property ladder.
>And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that.
The wrong part is not having the self awareness to realize that they were lucky.
Drive up the rent?
“We are renting to willing tenants at the fair market price.”
Landlord’s cant “drive up the rent” any more than employees can be unfairly paid too much.
“We are renting to willing tenants at the fair market price.”
Landlord’s cant “drive up the rent” any more than employees can be unfairly paid too much.
Land rent works very differently than most other markets because land is of limited supply. "Fair market price" is determined by what people who live in an area can afford to pay, rather than primarily supply and demand. Add to that restrictive zoning laws and you end up with a situation where most landlords are extracting significant economic rents from their tenants without needing to provide any extra service or quality of good to earn that rent.
It sounds to me like you are describing a situation where supply is constrained, rather than one where the price is not set primarily by supply and demand.
I feel this distinction is important because it could guide whether the solution is based on encouraging more capital investment to do things like increase density, or whether the solution is essentially to ban outside investment.
I feel this distinction is important because it could guide whether the solution is based on encouraging more capital investment to do things like increase density, or whether the solution is essentially to ban outside investment.
I don’t disagree that zoning impacts prices, but it’s still “fair market price”, no?
I choose to move to SF knowing that rents were absurd compared to other cities I could have moved to. But I choose to roll the dice on SF being the better choice.
I get it that people who grew up in SF face a different choice - leave or not. But it’s still a choice for them.
I choose to move to SF knowing that rents were absurd compared to other cities I could have moved to. But I choose to roll the dice on SF being the better choice.
I get it that people who grew up in SF face a different choice - leave or not. But it’s still a choice for them.
If someone owned all the water in the world, then "fair market price" is whatever they choose to set the price at. That doesn't mean that as a society we should be comfortable with allowing one person to own all the water in the world.
Established landlords have friends on the local council, and can determine who gets a building permit. Prices are set by the two or three biggest players, who all know each other. That stuff happens all the time.
Sure, but someone still makes a decision “yes this rent is worth it” or “no I’ll go somewhere else”.
With a greater supply the clearing price will be lower. That's a trivial statement.
The real problem is elsewhere - by constraining supply landowners are inhibiting economic development. Newcomers have a choice, if accommodation is too high they'll go elsewhere, so economic growth in productive industries will take place elsewhere.
Man, not too long ago I shitcanned a new job 4 days in over the insane housing prices. A good number of my colleagues had a sideline in Airbnb, that asset inflation machine.
There's far too much capital sunk in real estate, where it could not be more unproductive.
The real problem is elsewhere - by constraining supply landowners are inhibiting economic development. Newcomers have a choice, if accommodation is too high they'll go elsewhere, so economic growth in productive industries will take place elsewhere.
Man, not too long ago I shitcanned a new job 4 days in over the insane housing prices. A good number of my colleagues had a sideline in Airbnb, that asset inflation machine.
There's far too much capital sunk in real estate, where it could not be more unproductive.
Renting below 'fair market price' would be one way?
In the UK we have a lot of private landlords - some have borrowed heavilly and are merely expoloiting their ability to obtain a mortgage where their tenants can not and are making marginal amounts of money in the process (often much less than if they simply invested what cash they have in a tracker fund). Some have inherited a property or are renting out buildings they bought twenty years ago where the amount of rent they charge is multiple times out of sync with their actual costs.
So long as all of these people can say they are only charging 'fair market' prices then the problem persists.
In the UK we have a lot of private landlords - some have borrowed heavilly and are merely expoloiting their ability to obtain a mortgage where their tenants can not and are making marginal amounts of money in the process (often much less than if they simply invested what cash they have in a tracker fund). Some have inherited a property or are renting out buildings they bought twenty years ago where the amount of rent they charge is multiple times out of sync with their actual costs.
So long as all of these people can say they are only charging 'fair market' prices then the problem persists.
The problem in the States is that while there's always more land, there's not always the supporting infrastructure, public transport or even affordable accessible private transport. The author is shrewd, but sweeping a lot of inherent risks under the carpet here too.
I believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms.
Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deductible, the rent itself allows you do pay down your principle faster, and most importantly you were going to live there anyway so your opportunity cost is 0.
Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deductible, the rent itself allows you do pay down your principle faster, and most importantly you were going to live there anyway so your opportunity cost is 0.
There can be massive opportunity cost lost to dealing with the various interpersonal interaction (ie work) thats required to rent a room in a house you are personally living in. If you're making a good salary, thats probably not worth it.
I don't see it any differently than having a roommate, which is something a lot of people who have good salaries have anyway.
What do you mean exactly by "a lot"? I don't think having roommates is very common for people who can afford not to.
In NYC, Bay Area, Boston, LA and Hong Kong I know people making top 15% income and have roommates. They don't necessarily need to, though.
Having a roommate has two purposes, I suppose.
One is freeing up $1-2k of disposable income that you can afford to spend on living in the most desirable place, but maybe would rather not.
Another is to feel less alone. Also, having somebody in the apartment when you're away, who could take care of a delivery or a pet may be important.
One is freeing up $1-2k of disposable income that you can afford to spend on living in the most desirable place, but maybe would rather not.
Another is to feel less alone. Also, having somebody in the apartment when you're away, who could take care of a delivery or a pet may be important.
The people I know who have roommates do it because they’re cheap and they don’t like being alone. This includes people making $400k+/yr. Even people in 7-figure territory.
They’re pennywise pound foolish types usually tho.
They’re pennywise pound foolish types usually tho.
Roommates are extremely common among young people, even when they aren't strictly financially necessary. Pretty much everyone I know has lived with a roommate at one time.
They are uncommon after around age 30 unless financially necessary.
If you're older than 30 or married you probably won't be interested in a roommate simply to save money unless you already know the person well or you have a mother in-law apartment set-up.
They are uncommon after around age 30 unless financially necessary.
If you're older than 30 or married you probably won't be interested in a roommate simply to save money unless you already know the person well or you have a mother in-law apartment set-up.
This is a lie told by landlords.
Just get a handyman, or a tenant agent.
That's what landlords do and they always come out on top.
Just get a handyman, or a tenant agent.
That's what landlords do and they always come out on top.
It's not as simple as become landlord -> laugh all the way to the bank.
My parents were landlords for nearly two decades. Their property was not a good investment even though they kept cost down by doing all the work themselves.
My parents were landlords for nearly two decades. Their property was not a good investment even though they kept cost down by doing all the work themselves.
>your opportunity cost is 0.
not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.
not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.
> not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.
I disagree - if you're talking about bubbles collapsing that's true no matter how you store your money, e.g. inflation ruining savings, stock market correction, etc.
You need a place to live anyway and government incentives will reduce your cost of living far below renting anyway.
What is true is that you drastically reduce your liquidity but I already presumed that in the scenario anyway by saying staying a few years (any housing correction historically will be resolved in a few years), if applicable
I disagree - if you're talking about bubbles collapsing that's true no matter how you store your money, e.g. inflation ruining savings, stock market correction, etc.
You need a place to live anyway and government incentives will reduce your cost of living far below renting anyway.
What is true is that you drastically reduce your liquidity but I already presumed that in the scenario anyway by saying staying a few years (any housing correction historically will be resolved in a few years), if applicable
Why not buy securities with inflation protection? The treasury offers them.
I think you're training about i bonds, and they are capped at 10k / person / year
No, but good to buy those too. You can buy these uncapped: https://www.treasurydirect.gov/indiv/products/prod_tips_glan...
And the fact that you have some other asshole living in your house now.
More realistically this would look like “get married, buy a house, split the mortgage”.
> your opportunity cost is 0.
This is not true, and paints an unfair and unrealistic viewpoint.
This is not true, and paints an unfair and unrealistic viewpoint.
> It was also sub rosa and illegal like most truly affordable housing in San Francisco
> There would be no drama with rent controlled tenants
> The landlord did the math and agreed to sell to us at below the full market value. He would be saving so much money by avoiding the associated legal challenges from disgruntled tenants that he would net the same profit even at a slightly lower price.
It's clear from these statements that the good intentions of the politicos in SF are artificially inflating the cost of housing. The only way forward for this person was to work around those issues.
Yes, it was lucky that all of those tenants were going to move out at the same time the landlord was thinking of selling, but this person was ready to take advantage of the opportunity when it presented itself. Taking advantage meant a lot of work and coordination.
This pattern repeats with buying in Sonoma. They had prepared themselves to be ready for an opportunity, and when the opportunity arose, they could take advantage.
> There would be no drama with rent controlled tenants
> The landlord did the math and agreed to sell to us at below the full market value. He would be saving so much money by avoiding the associated legal challenges from disgruntled tenants that he would net the same profit even at a slightly lower price.
It's clear from these statements that the good intentions of the politicos in SF are artificially inflating the cost of housing. The only way forward for this person was to work around those issues.
Yes, it was lucky that all of those tenants were going to move out at the same time the landlord was thinking of selling, but this person was ready to take advantage of the opportunity when it presented itself. Taking advantage meant a lot of work and coordination.
This pattern repeats with buying in Sonoma. They had prepared themselves to be ready for an opportunity, and when the opportunity arose, they could take advantage.
Lmao, a dude from San Francisco trying to justify his own landlordship back in the midwest. Amazing.
This is not a wealthy SF landlord story, this is an house cleaner. It’s an impressive story of someone slowly building up a real estate portfolio in the Bay Area. Most of it through creative means and living lean.
It’s actually an impressive story.
It’s actually an impressive story.
It's impressive in the way a trainwreck is impressive. There's no reason why housing appreciates year after year. It should be a depreciating asset, like a car or at most value-neutral. But misguided government policies have caused housing to be out of reach for the greater part of the population.
Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q
Pittsfield. In Western MA. Not a desirable area. But it's going up, up, up. Asset inflation at its finest. This needs to stop, but it's unclear how. Can people invest in tulips instead, you can do without pretty flowers, but a roof over your head is a necessity for life!
Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q
Pittsfield. In Western MA. Not a desirable area. But it's going up, up, up. Asset inflation at its finest. This needs to stop, but it's unclear how. Can people invest in tulips instead, you can do without pretty flowers, but a roof over your head is a necessity for life!
I'm not sure why people have this silly take. Land in desirable areas is scarce. Why shouldn't it appreciate it? Housing is nothing like a car.
The frontier has been settled since 1890, but housing prices have been stable from 1950 to 1980, then they started creeping up, with a big burst around 2000 and another beginning 2018. Desirable can't be the answer.
A burst happening has nothing to do with desirability not being the answer. Less desirable areas had bigger bursts. Relatively, desirable areas will always appreciate, by definition. Housing isn't a mass produced fungible commodity like a car.
People comparing cars to houses make no sense.
People comparing cars to houses make no sense.
It's a complex issue, though both aren't necessarily wrong. Land is limited and its raw volume rarely changes. Housing could be increased through scaling up, developing greenfield, or redeveloping underutilized land.
If housing were thought of more as a consumable than ones primary investment that would accelerate better use of land for housing.
If housing were thought of more as a consumable than ones primary investment that would accelerate better use of land for housing.
Even if zoning didn't exist and land was perfectly used certain property would just be worth more than others.
Imagine all of humanity living in a single skyscraper that can be built up indefinitely. Perhaps a condo closer to the ground floor would be more expensive, or maybe at the top, or maybe west, east, etc.
Certain land being worth more than others is more a function of the inherent differences in things than anything else.
Imagine all of humanity living in a single skyscraper that can be built up indefinitely. Perhaps a condo closer to the ground floor would be more expensive, or maybe at the top, or maybe west, east, etc.
Certain land being worth more than others is more a function of the inherent differences in things than anything else.
Now you're just making an argument equivalent to "it's not weird that some cars appreciate, look some of the classic Mustangs" instead of distinguishing it from housing in any way.
The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others.
The problem with your argument is that it's predicated on it being physically impossible to build more housing of the same type that people want. If people prefer to live close enough to the ground that they don't have to ride an elevator for an hour to get there then you build a thousand ten story buildings instead of one ten thousand story building. If people like higher floors because they have a better view then you build two hundred 50 story buildings instead of a thousand ten story buildings. You can build more of whatever the market demands, so the price falls to the construction cost (absent zoning), and remains there because increased demand causes more construction rather than higher prices.
To get to the point of true scarcity due to land you would have to need thousand story buildings because covering the city in twenty story buildings wouldn't be enough housing for its population. But even if that's possible in theory, it's not the case anywhere in practice.
The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others.
The problem with your argument is that it's predicated on it being physically impossible to build more housing of the same type that people want. If people prefer to live close enough to the ground that they don't have to ride an elevator for an hour to get there then you build a thousand ten story buildings instead of one ten thousand story building. If people like higher floors because they have a better view then you build two hundred 50 story buildings instead of a thousand ten story buildings. You can build more of whatever the market demands, so the price falls to the construction cost (absent zoning), and remains there because increased demand causes more construction rather than higher prices.
To get to the point of true scarcity due to land you would have to need thousand story buildings because covering the city in twenty story buildings wouldn't be enough housing for its population. But even if that's possible in theory, it's not the case anywhere in practice.
> The reason housing increases in value to the extent that it does is that areas where it's in high demand prohibit creating more of it. It would be like prohibiting the construction of new cars. Obviously that would make existing cars cost more in general, independent of the fact that some cars are worth more than others.
Yes, and the areas that are desirable and the ones that are restricting the construction. Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things.
Your example ignores reality. It is sometimes just not possible to build more housing that shares the exact same properties of existing houses.
If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with.
Yes, and the areas that are desirable and the ones that are restricting the construction. Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things.
Your example ignores reality. It is sometimes just not possible to build more housing that shares the exact same properties of existing houses.
If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with.
You're the one ignoring reality. In your defense, basically every clueless voter living in the US and a lot of Europe does it too, though.
In Tokyo, you can work part time as a non-union, non-salaried janitor or a nail stylist and make enough to live within 20 minutes of the bustling heart of downtown. That's due to light zoning restrictions making housing into a depreciating asset for everybody instead of a stupid fucking pyramid scheme
https://www.worksinprogress.co/issue/the-housing-theory-of-e...
In Tokyo, you can work part time as a non-union, non-salaried janitor or a nail stylist and make enough to live within 20 minutes of the bustling heart of downtown. That's due to light zoning restrictions making housing into a depreciating asset for everybody instead of a stupid fucking pyramid scheme
https://www.worksinprogress.co/issue/the-housing-theory-of-e...
I can't believe that anyone who actually lives or has lived in Japan and who has also lived outside of Japan could defend the property market in Japan, so I am willing to presume that you are not in that group.
It's a corrupt, poorly regulated market that suits the construction industry and produces - on the whole - ugly, poorly insulated and tiny living spaces, surrounded by concrete (again, the amount of concrete used seems to be driven by corruption) that leads to overpriced land and buildings that depreciate so much that they are destroyed within one or two generations.
A quick search of this site alone will bring you reams of complaints about Japanese housing and plenty of good reasons why it should not be held up as an exemplar.
It's a corrupt, poorly regulated market that suits the construction industry and produces - on the whole - ugly, poorly insulated and tiny living spaces, surrounded by concrete (again, the amount of concrete used seems to be driven by corruption) that leads to overpriced land and buildings that depreciate so much that they are destroyed within one or two generations.
A quick search of this site alone will bring you reams of complaints about Japanese housing and plenty of good reasons why it should not be held up as an exemplar.
> Even if we suppose that you allow infinite construction, there will always be certain houses or parcels of land that will cost more, perhaps because of being closer to certain things.
In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost.
> If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with.
"Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws?
In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost.
> If an area is desirable because of nature, then naturally those who first live there will prevent the destruction of said nature that brought them there to begin with.
"Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws?
> In which case those parcels of land would end up with high density housing on them so more people can live near those things, until such time as the cost per square foot falls below the construction cost.
Why would this happen? You're talking about the construction of more housing like it's free.
Perfect example of this is something like Chicago - let's say you live right near the loop and are fortunate enough to have a SFH that's huge. The land is worth a lot, and you like your lifestyle. Sure in some perfect world that house would be purchased and turn into a high rise, but you want to live near the loop and have a SFH. Therefore that house will be expensive.
Others in similar situations will do the same. Later more people will come to Chicago and see that they want that lifestyle as well - these types of houses will then command a premium.
Not everyone will sell to a developer to turn it into a high-rise.
> "Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws?
Are those areas desirable? I've never been.
Why would this happen? You're talking about the construction of more housing like it's free.
Perfect example of this is something like Chicago - let's say you live right near the loop and are fortunate enough to have a SFH that's huge. The land is worth a lot, and you like your lifestyle. Sure in some perfect world that house would be purchased and turn into a high rise, but you want to live near the loop and have a SFH. Therefore that house will be expensive.
Others in similar situations will do the same. Later more people will come to Chicago and see that they want that lifestyle as well - these types of houses will then command a premium.
Not everyone will sell to a developer to turn it into a high-rise.
> "Nature" e.g. Montana or Alaska or the Ozarks. Do you believe these to be the places with high land costs and restrictive zoning laws?
Are those areas desirable? I've never been.
> If housing were thought of more as a consumable than ones primary investmen
Housing would be "thought of" differently, if property depreciated. Has nothing to do with how people think, but optimal financial strategy. Is there a way to solve it without taxation? Deflating the currency moves the window, but it leaves the status quo trend.
Housing would be "thought of" differently, if property depreciated. Has nothing to do with how people think, but optimal financial strategy. Is there a way to solve it without taxation? Deflating the currency moves the window, but it leaves the status quo trend.
House prices also appreciate when the surrounding area becomes more attractive. People call it "gentrification" and hate on it, but the reality is that the surrounding area is being improved (meaning nicer shops, better facilities, access to jobs and hospitals and so on), which is a good thing.
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Housing prices in the US in 1980 were almost 7x what they were in 1950. Where are you getting the idea that they were stagnant for those decades?
Piketty has the goods (on page 19), and adjusted for inflation they were stable: http://piketty.pse.ens.fr/files/Schularicketal2014.pdf
You can argue about his conclusions, but you cannot argue with data. People today have no idea about the percentage of income that went into housing back then. It was really small!
In my corner of the nation (rural), fixer-uppers that no bank will give you a mortgage on are going for 150 kUSD and more! That's > 125 USD/ft^2! It's madness!
You can argue about his conclusions, but you cannot argue with data. People today have no idea about the percentage of income that went into housing back then. It was really small!
In my corner of the nation (rural), fixer-uppers that no bank will give you a mortgage on are going for 150 kUSD and more! That's > 125 USD/ft^2! It's madness!
> It should be a depreciating asset, like a car or at most value-neutral.
The building unit depreciates, but the total value usually goes up due to the land value, not the construction value. Cars would also appreciate hypothetically if metals suddenly became more expensive.
The building unit depreciates, but the total value usually goes up due to the land value, not the construction value. Cars would also appreciate hypothetically if metals suddenly became more expensive.
Wasn't there actually an "inflation" of used car prices in recent months because of supply issues?
Yes. But ignore that - doesn’t make sense with their argument!
Land is what should appreciate, not the building built on top of it, which should deprecate. What make land valuable is the collective work and contribution of a community.
However, since lands are scarce and a collective effort to maintain, maybe it should be taxed for the benefit of the community and rewards given to the people who put it to the most valuable use, by not taxing buildings and other improvements built upon it.
However, since lands are scarce and a collective effort to maintain, maybe it should be taxed for the benefit of the community and rewards given to the people who put it to the most valuable use, by not taxing buildings and other improvements built upon it.
> Land is what should appreciate, not the building built on top of it, which should deprecate.
That’s not entirely true. A home structure is worth what the materials + labor - depreciation are worth. A home can depreciate far more slowly that the cost of labor and materials rising. Not to mention that renovations will occur over time essentially removing some depreciation and adding to labor + materials to build a similar structure.
A well maintained home should hold its value well over time.
That’s not entirely true. A home structure is worth what the materials + labor - depreciation are worth. A home can depreciate far more slowly that the cost of labor and materials rising. Not to mention that renovations will occur over time essentially removing some depreciation and adding to labor + materials to build a similar structure.
A well maintained home should hold its value well over time.
> There's no reason why housing appreciates year after year. It should be a depreciating asset
Totally. That's why that $50,000,000 house in NYC should eventually cost only $1.
Totally. That's why that $50,000,000 house in NYC should eventually cost only $1.
I mean, ok?
That doesn't change the point this house cleaner was able to get creative and a bunch of property.
That doesn't change the point this house cleaner was able to get creative and a bunch of property.
He did that on the backs of those trying to get into the housing market now.
On their backs? He bought property on the market, and put it to economic use. He made rental property available in an area where many people can't afford to buy. He hasn't done anyone down.
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What’s the alternative? Nobody renting, ever?
People should be able to rent houses, at least for a little while.
It's just that landlords are inherently evil and should be done away with.
So the solution is to keep house renting but to get rid of landlords! It's really quite simple.
/sarcasm
So the solution is to keep house renting but to get rid of landlords! It's really quite simple.
/sarcasm
Not arguing your greater point at all, but the Pittsfield MSA includes all of the Berkshires which are absolutely desirable even if Pittsfield itself isn't.
If you don't like some area and you think prices are too high, don't buy there. The solution is so simple.
Population growth alone would bring an expectation of rising housing costs.
Population growth alone would bring an expectation of rising housing costs.
> There's no reason why housing appreciates year after year.
Of course there is a reason, multiple ones.
Land, of course, but that's the easy one so let's ignore it for the sake of argument for a moment. Let's say land price remains constant.
Housing will still appreciate simply because everything related to it goes up. Contractor labor and supplies.
So to build a new identical house on an empty lot next to an older house will cost more than it cost to build that old house. But they houses are identical so they compete for the same buyer. So inevitably the old house value will go up to match the new house that cost more to build.
Of course there is a reason, multiple ones.
Land, of course, but that's the easy one so let's ignore it for the sake of argument for a moment. Let's say land price remains constant.
Housing will still appreciate simply because everything related to it goes up. Contractor labor and supplies.
So to build a new identical house on an empty lot next to an older house will cost more than it cost to build that old house. But they houses are identical so they compete for the same buyer. So inevitably the old house value will go up to match the new house that cost more to build.
Another way to look at it is that there is absurd amounts of empty land throughout the country. Places were undesirable and cheap, and people of moderate means bought them, improved the area, and over decades it became a desirable area.
Young people need to go to shitty places that are cheap and then make the place better. Many young people want to live in SF or NYC. Go to Detroit instead.
Young people need to go to shitty places that are cheap and then make the place better. Many young people want to live in SF or NYC. Go to Detroit instead.
The process of making unwanted real estate wanted is called real estate development. It's not done by "young people just moving there." That just makes crappy real estate more crowded.
Real estate development is very much a "build it and they will come" sort of deal. It takes capital, a lot of it, to make an area desirable. You can't just dump it anywhere, there has to be a good reason to dump it in this particular area otherwise the hip young people will go somewhere that did have a good reason. And the poor investors who poured money into a development in that area won't see any appreciation or significant profit, because no one else is developing the area, just them. Lots and lots and lots of money going into lots and lots and lots of developments, that's what turns the sticks into the burbs.
You just can't put the family cart before the development horse, every young person starting a family has different reasons for moving out to the sticks. Left alone without already-developed real estate, they'll just spread out evenly across rural America.
Real estate development is very much a "build it and they will come" sort of deal. It takes capital, a lot of it, to make an area desirable. You can't just dump it anywhere, there has to be a good reason to dump it in this particular area otherwise the hip young people will go somewhere that did have a good reason. And the poor investors who poured money into a development in that area won't see any appreciation or significant profit, because no one else is developing the area, just them. Lots and lots and lots of money going into lots and lots and lots of developments, that's what turns the sticks into the burbs.
You just can't put the family cart before the development horse, every young person starting a family has different reasons for moving out to the sticks. Left alone without already-developed real estate, they'll just spread out evenly across rural America.
Perhaps the problem with the availability of housing is the "real estate development" model you describe, which is capital intensive and therefore will be undertaken by large corporations instead of by the people who will actually live in the area and who therefore have a personal stake in how livable it is. Perhaps if more development was done by "young people just moving there", we would have more livable areas and less competition for housing.
Ordinary people don't have the money to, say, build sewers and roads.
They do if they pool their resources through, say, property taxes paid to their locality. Localities can build out basic infrastructure without having to have large corporations do all the development. That has the added advantage that you get actual communities that grow and evolve over time instead of sterile cookie cutter suburbs.
Without the advantages of upfront planning and design, they'll pay more for crappier services. If the area grows significantly, then they'll have to pay even more on top for upgrades.
But hey, at least it'll be idyllic. Good luck keeping your kids around after they graduate high school.
But hey, at least it'll be idyllic. Good luck keeping your kids around after they graduate high school.
> Without the advantages of upfront planning and design, they'll pay more for crappier services.
I've had that experience in neighborhoods that did have the "advantages" of upfront planning and design. I don't think upfront planning and design is the panacea you are making it out to be.
I've had that experience in neighborhoods that did have the "advantages" of upfront planning and design. I don't think upfront planning and design is the panacea you are making it out to be.
Most rural roads are majority funded by federal grants.
What are the good reasons to develop an area? Proximity to a better one? Fresh water sources? Desirable weather? Good schools? Unpolluted environment? Nice parks?
All of these things. The more the better, and places with better potential get developed first. Commercial opportunities tend to be developed first, followed by better weather. As all these places got developed, tertiary concerns become more important. Rural America will mostly stay rural and suburbs will slowly develop economies and become part of the metro areas they surround.
Suburbs are a Ponzi scheme. They do not cover their existing infrastructure maintenance costs...
https://youtu.be/7IsMeKl-Sv0
https://youtu.be/7IsMeKl-Sv0
Or just move to a shitty area that is cheaper, plenty of those around.
It won't make the areas better in any meaningful sense.
You alone won’t but how else do crappy areas get nicer?
You’d be surprised at how some of the most desirable neighborhoods in SF were once “crappy” only 20 years ago.
You’d be surprised at how some of the most desirable neighborhoods in SF were once “crappy” only 20 years ago.
When I moved to my neighborhood it was dangerous to walk in at night and there were no children. 10 years later and plenty of families are here. The movement of all of these people are what made it safer - people who want a safe and healthy community. I don’t know why you are so defeatist, it must be a depressing mindset.
That’s at the root of all these stories about, ”I can’t afford to live where I grew up”. Buddy, I can’t either, but when my parents bought it was a fruit orchard. Today it’s the hottest real estate market in the world. It’s apples and oranges.
A colleague told me about her daughter - she finished college and has a regular job but cannot afford to move out. That's in rustbelt central. Yes, you can live with roommates, but if you are late 20's it becomes awkward, and when at some point the children arrive it becomes a habitability issue.
Living with roommates or even your parents is pretty common globally. Not the end of the world.
Dr Zhivago is a role model now? Also, they didn't have code enforcement then and minimum numbers of bedrooms.
I mostly agree with your point but how does living with roommates become awkward?
> Places were undesirable and cheap, and people of moderate means bought them, improved the area, and over decades it became a desirable area.
Generally by doing things that are now illegal (sometimes that were already illegal but not enforced at the time).
Generally by doing things that are now illegal (sometimes that were already illegal but not enforced at the time).
What things described in this article are now illegal?
The article explicitly points out that the shed they originally lived in would certainly be illegal now (and quite possibly also at the time, but it was easier to get away with then); building their own cabin would also be a lot more difficult (maybe it's not flat out illegal, but there are a lot more requirements about what kind of qualifications you have to have to sign off on a design, do wiring/plumbing/...).
Well, the author described an illegal one-room micro-apartment in downtown SF.
Impressive, but it lost me at "start in the market slump of 2008"
Like that was the time in my life where I was literally the most broke. I had a neighbor try to practically give me his home if I could just take over the mortgage. But I was fresh in school and staring down combined debts well into 5 digits, no assets save for my car and a bunch of tech junk, and no income.
Like that was the time in my life where I was literally the most broke. I had a neighbor try to practically give me his home if I could just take over the mortgage. But I was fresh in school and staring down combined debts well into 5 digits, no assets save for my car and a bunch of tech junk, and no income.
I was literally homeless.
It’s kinda difficult to hear about how someone owning multiple houses and renting them out is not a wealthy landlord. That’s the definition of a wealthy landlord. Sure, there are wealthier landlords out there. I’m sure the Wisconsin tenant paying their California landlord’a mortgage takes a lot of comfort in the fact that their landlord isn’t the richest one out there.
I think there are some good things landlords bring to the table, like increased capital investments and stability of ownership for short duration stays. But I feel one would have to live under a rock to not recognize the fundamentally extractive nature of landlordism under our current conditions. Perhaps with something like a land value tax, some degree of market functioning could be restored. However, in the mean time with asset prices increasingly out of reach to everyday Americans, expect lots of hate for landlords as the American dream continues to evaporate.
I think there are some good things landlords bring to the table, like increased capital investments and stability of ownership for short duration stays. But I feel one would have to live under a rock to not recognize the fundamentally extractive nature of landlordism under our current conditions. Perhaps with something like a land value tax, some degree of market functioning could be restored. However, in the mean time with asset prices increasingly out of reach to everyday Americans, expect lots of hate for landlords as the American dream continues to evaporate.
Today's good guy / builder-of-society is tomorrow's slumlord.
It happened to lots of people who are successful today. I don't see why it won't happen tomorrow.
(To be clear: The business person doesn't change positions. It's jealousy on the part of the non-doers.)
It happened to lots of people who are successful today. I don't see why it won't happen tomorrow.
(To be clear: The business person doesn't change positions. It's jealousy on the part of the non-doers.)
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the riskier moves could've gone wrong horribly but didn't, so well done to the author! took many gamble and got nicely paid out.
Just read Taleb's Fooled by Randomness chapter on The Millionaire Next Door to understand why this article is, at best, useless.
Why is it useless?
The author got incredibly lucky multiple times in ways that are flat out impossible today. This is a shining example of survivorship bias touted as “I did it and so can you!”. Good for the author - he’s clearly industrious and made smart decisions, but treating this as a guide for anything other than “increase your luck surface and take calculated risks” is not going to help many people.
It’s like reading How to Be Rich by John Paul Getty and concluding you should go exploring for oil.
Funny the lengths they go to to try and ingratiate themselves with the liberal crowd. This person has derived great success from humble beginnings because of capitalism nothing to be ashamed of, to the contrary a shining example. This sort of thing should be more explicitly taught in schools.
Why does this read like a penance?
A lot of people place misdirected blame for unaffordable housing on themselves or others who buy, fix up, and rent out houses.
It's pretty obvious that the cause of unaffordable housing is elsewhere. But being the one to actually collect rent is a kind of guilt-by-association.
It's pretty obvious that the cause of unaffordable housing is elsewhere. But being the one to actually collect rent is a kind of guilt-by-association.
I mean, sure. At the end of the day all land owners, and I speak as one, exist at the end of a chain that began with theft and likely violence. The surface of the earth is by nature no less a resource that should be common to all man as the atmosphere and the oceans. Neither the landlord with more than he can live on nor the renter with not enough to live on can exist without someone at some point having taken more than their fair share by guile or force of arms.
Owning as the only housing model doesn’t make sense. There’s plenty of reasons someone might prefer to rent instead, most of them having to do with not being in a position to put down roots. Which necessitates some kind of landlord.
Owning shares that could be transferred from house to house would make a lot more sense than renting.
Money. The shares you are talking about already exist, and they're called "money". Of course, the relative value of shares wrt. the house will fluctuate over time and you'd have to account for this when transferring between houses, except this is calculated for you by the market when you just use money.
That sounds like it would be hideously complicated in practice.
Renting works fine if you have some basic regulations (which admittedly is the opposite of the case in the US).
Renting works fine if you have some basic regulations (which admittedly is the opposite of the case in the US).
I don’t believe sin is inheritable and I didn’t steal land from anyone, I was just born into a system that I’m doing my best to take part in.
The sin isn't heritable but land, like artifacts in the British Museum, doesn't stop being stolen because we've had it a long time or traded it amongst ourselves. I'm not advocating anything radical; I'm just saying it's reasonable to be a little uncomfortable about it sometimes.
That’s entirely a judgement call. I wouldn’t assume everyone feels that way.
The people my ancestors stole the land from, stole it from another indigenous tribe. Go back far enough and everyone is living on stolen land.
The people my ancestors stole the land from, stole it from another indigenous tribe. Go back far enough and everyone is living on stolen land.
is one of the incentives for those who rent housing not to keep the available housing supply low (at least to a certain point)?
If you grow carrots, you would prefer to keep the overall supply of carrots low so that your carrots will fetch the highest price. But what you are actually doing is increasing the supply of carrots. So incentives and results are two different things and we shouldn't conflate the two.
I assume by "incentives", you mean that they'd manipulate the law to limit other suppliers. I'm sure that happens, but as a landlord you don't have to do that. And being a landlord (who isn't manipulating the law) doesn't make the problem any worse.
Criticism should be directed at the real problems. Those are a mix of law and culture and just inertia.
I assume by "incentives", you mean that they'd manipulate the law to limit other suppliers. I'm sure that happens, but as a landlord you don't have to do that. And being a landlord (who isn't manipulating the law) doesn't make the problem any worse.
Criticism should be directed at the real problems. Those are a mix of law and culture and just inertia.
> what you are actually doing is increasing the supply of carrots.
There's an error in your analogy.
Nobody is growing carrots, they're buying carrots
Incentives push the carrotlords to pass local ordinances. 'Show me the incentive and I'll show you the outcome'
There's an error in your analogy.
Nobody is growing carrots, they're buying carrots
Incentives push the carrotlords to pass local ordinances. 'Show me the incentive and I'll show you the outcome'
landlords rarely build housing, they usually buy up existing housing and rent it out
and the don't have to do anything illegal to restrict the housing supply - they can lobby, regulate, and vote
and the don't have to do anything illegal to restrict the housing supply - they can lobby, regulate, and vote
I don't know what you mean "rarely", because clearly a lot of housing is built and intended as rental property.
Regardless, the small landlord who buys a single family house and rents it out still puts a new house into the rental market, making it more affordable than it previously was on the purchase market. Along the way a landlord typically makes improvements and pays for maintenance, which improves the supply.
If you don't like laws then complain about the laws. The act of renting a house to someone else is not the problem.
Regardless, the small landlord who buys a single family house and rents it out still puts a new house into the rental market, making it more affordable than it previously was on the purchase market. Along the way a landlord typically makes improvements and pays for maintenance, which improves the supply.
If you don't like laws then complain about the laws. The act of renting a house to someone else is not the problem.
It isn't SF Bay Bros'/foreigners'/companies' fault that houses are too expensive. It's because of strict zoning laws and a lack of building enough housing to match supply with demand[1]. Demand keeps going up way faster than supply, nationwide, and we're all feeling the squeeze
[1]: A great example of this is the super low housing costs in Tokyo. My mother in-law and sister in-law are renting a 3 bedroom apartment right now, 20 minutes outside Shinjuku (one of the "Giant Bustling Megacity" parts of Tokyo) for $1300/month, which they can comfortably afford while working part time doing low end janitorial work. More info here: https://www.worksinprogress.co/issue/the-housing-theory-of-e...