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Comment by jakobegger | Hacker News Reader

Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing?

In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing.

And it's amazing how well that works! Rents are typically 50% lower than average, and the buildings are always well maintained. In general, they also have better amenities (playgrounds for children etc) compared to privately owned apartment buildings. The only problem is that there are very long waiting lists (more than 5 years in some cases).

It's amazing how cheap good housing can be when it's not necessary to make a profit for the owner.

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We used to have something like this in the UK, but then under "right to buy", the vast majority of the council funded housing was sold off to private landlords (council tenants usually did not have the funds to buy themselves, so were offered deals by large private landlords like "we'll give you £10k, you can keep living there for 10 years, we'll give you the money to buy it, you then sell it straight on to us"), and they're now doing a second round of the same to sell off what remains.

So - we now have large corporations like the Curo group who own what was once local authority housing and run it for profit - meaning that at any given time about 30% of their 13,000 properties are unoccupied, that their tenants never have any maintenance issues addressed, and the rents are high - and the waiting lists are worse than when it was publicly operated. Never mind the impact on the rest of the property market, with insanely inflated prices, as nobody wants to build anything new as it'll decrease the value of their portfolio.

So - housing cooperatives/local authority housing are great, but beware the state selling them to private profit-making entities. It hasn't ended well here, and it absolutely is the case that poverty is profitable.

The poorer and more trapped they are the more secure your investment is.

Yes, there was also a big scandal when a state owned cooperative was sold by our corrupt minister of finance several years ago, but that doesn't mean cooperatives are a bad idea; it probably just means that government-owned cooperatives should be avoided. Ideally the cooperative should be fully owned by the tenants, so nobody can go and sell it off (however, I am not sure how exactly that would work from a financial / legal perspective)

We have those in Italy, as a counter point: it's amazing how fast those got occupied abusively and how local criminals use it to either hide their illegal workers or use it as bargaining chips to gain support and omerta from the population.

Sounds like a problem with law enforcement rather than anything else.

true, and goes to show how even the best ideas needs to be declined in the context of the other society issues a region has.

Oh, you said what I meant with my comment above, but with other words. Thanks, missed that.

Counter counter point - is there much of anything official done in Italy which is not perverted by criminals/mafia? Seriously, not trying to be a dick.

eh, thought about it a lot, and the fact is, it's not the mafia. the whole society is like that. it's a cultural thing, where people expect other people to owe favors back as a natural way of doing business. it works at every level here, from groceries stores keeping freshest bread for friends and giving mellow salami to foreigners upward.

it's easy to identify the issue with the big names, but it starts way, way below that.

Portuguese here. Same crap, everyday, everywhere. :)

You must live in a different Portugal than the one I know. While I admit perceptions of corruption are quite high among Portuguese, actual corruption is not that high, at least according to the international metrics I've seen. We're certainly not a mafia state or anything close to that.

> You must live in a different Portugal than the one I know.

Everybody does, right? It's my perception, as you have yours.

From where I stand, laws are ignored as if they didn't exist, people care only about themselves and the quid pro quo is the currency to achieve anything in a timely manner. The rot is everywhere, from the guy which slows down traffic because he parked in the middle of the road to get broad, to municipal services and e.g. construction licenses.

"The only problem is that there are very long waiting lists (more than 5 years in some cases)."

So some proportion of poorer people are getting cheap housing, and others are priced out. This sounds like the same outcome that results from rent controls in San Francisco and New York.

"It's amazing how cheap good housing can be when it's not necessary to make a profit for the owner."

What would need to change in order for these housing cooperatives to expand enough to reduce waiting lists to <1 year?

> What would need to change in order for these housing cooperatives to expand enough to reduce waiting lists to <1 year?

Waiting times are less than a year if you have an urgent need (eg growing family) and are willing to accept unpopular locations (eg next to a highway exit). But in general the waiting times are too long.

The biggest problem is that the regional government is conservative/nationalist and strongly influenced by a large bank that does a lot of property development. So there are a lot of political obstacles to new developments by cooperatives. I feel that the cooperatives are a remnant of the times when the social-democrats had more influence.

Both are necessary. But it turns out people are (statistically) better at spending money for themselves, than having a nanny state spend it for them. And the cost of the 'planned economy' of the welfare state is in addition to that. E.g. US Welfare spends 60% of their budget on administration. How much better to spend 100% on benefits, and have the people figure out for themselves what they need?

Your numbers are way off: http://mediamatters.org/research/2005/09/21/limbaugh-dramati...

•Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): 9.0 percent

•Housing Choice Voucher (Section 8): 5.2 percent

•The Department of Housing and Urban Development's public housing program: 22.5 percent

•Low-Income Home Energy Assistance Program (LIHEAP): 9.1 percent

Finally, the report estimated that the federal administrative costs amounted to $12,452,000,000 for the 11 programs studied -- 6.4 percent of total federal expenditures on these programs.

PS: For comparison Social Security spends even less on administration but is vastly more expensive, which is arguably a net loss.

This just becomes another subsidy. IMO, we need to build a large supply of tiny but high quality apartments (good sound insulation etc.) in good locations so the market will lower their value yet there still expensive enough to attract young workers instead of the poor. (~350sf)

The other reasonable approach is simply to build lot's of housing in good locations. If the supply is large enough prices end up falling. Unfortunately, larger apartments mean taller buildings which pushes up prices.

Instead of the current approach where all apartments are basically the same thing and the only thing that drives down prices is poor location, maintenance, and older buildings.

They built thousands of tiny self contained units in my city and they're all on AirBnB for $125+/night. The problem is foreign buyers speculating on all new housing and either keeping them vacant to park money or renting for short term only.

I know we don't like to apply laws to company's, but that's generally illegal in most areas even if it's generally ignored. Still, if you can profitably produce such buildings then just keep building the demand for housing is finite.

Artificially decreasing housing prices always creates shortages - that's already well understood. The more people who can take advantage of artificially lowered prices, the more pressure there is in other parts of the housing market to absorb excess demand.

The cost of decreasing those housing prices are paid for somewhere else in the system.

Hm, how is a cooperative / mutual-aid-like financial/organizational structure imposing artificially lower prices? The profit is absorbed by the members in-kind in the form of lower shelter costs in exchange for the responsibilities of shared ownership, and as the shareholding owners it is their right to take out profits in the form they mutually agree upon. Just because the profit is not capital and not in the norm of conventional land owners, I don't see these Wohngenossenschaften are artificially decreasing prices. The Wohngenossenschaften are smarter capitalism, squeezing out more inefficiencies.

To add to my comment since I can no longer edit, I see nothing incompatible between cooperatives and capitalism, even if the end result is cooperatives "destroy" the profit margin of profit-seeking equivalent enterprises offering the same goods and services. Cooperatives doing this are commoditizing the cooperative owners' complements, to borrow a concept from Joel Spolsky.

Seconded. I live in a housing cooperative in Germany (the biggest one in the state actually), and as far as I'm informed, the main reason for their low rents is that they fully own their buildings, whereas most private property owners need to pay off their property credits, and corporate property owners additionally need to generate profit for their shareholders.

This is not to say that the housing cooperative does not generate a modest profit, which is then used to build new affordable housing, or to modernize existing properties for modern energy efficiency laws.

Meanwhile using housing as much as an investment vehicle as housing (see London, SF, and numerous other cities) promotes the creation of shortages to drive up rents and capital gain.

You can't seriously be saying that the housing market is working as intended in places where pushing 70-80% of the wages cannot rent a basic apartment there.

The cost of those artificially inflated housing prices are paid for someewhere else in the system. As increased stress and illness, as migrant workers in illegal occupation, as companies unable to fill lower pay roles, as a lack of nurses, teachers and firefighters, as lack of opportunity for their children.

You don't have to adopt a socialist perspective to see it's broken right now.

Well a sane person should cap housing expenses at 25% of income at most. If you can't afford a place, time to move. If you can't afford anyplace, minimum wage has a problem.

Yes, housing by income strata is the best and ultimate city planning there is. Keep the proles where we can't see them. I agree with you 100 %.

that for most people means you have to move far into the suburbs.

That's like if I said "You shouldn't buy a tesla X if you make under a million bucks a year" and you replied "that for most people means they have to drive a gas powered Jeep".

Maybe? But maybe living within your means is more important than a sense of being entitled to live in or drive a specific thing.

That's the problem. The places that are affordable don't have jobs, and the places that have jobs don't have affordable housing. As soon as a place has jobs, the affordable housing disappears.

This sounds like supply and demand, but is exacerbated by investment concerns changing the dynamics of the market.

> This sounds like supply and demand, but is exacerbated by investment concerns changing the dynamics of the market.

This rather sounds like the lack of jobs that allow remote work is the fundamental problem.

This is not helping it. I bet 50% of office jobs could be remote. What is the current %, I would guess under 1%.

Jobs like retail, laundry, hotel service... The jobs at the lower end of the spectrum, in general (ignoring call-center type work), can't be done remotely.

I hardly think it is this extreme. Switching back to specifically talking about developers (while the above was a more general statement):

Look at the pay and housing cost in downtown SF. Now compare pay and housing costs to other places, say Austin, Chicago, Indianapolis, etc.

Yes you may make 400k in SF, but I don't think that buys you a lower standard of living. People look at raw $$ too much, and not cost of living when making job decisions.

Kind of a natural imbalance in the market.

We have housing projects in the us, but concentrating poor people in one place has its own problems. The projects are synonymous with gun violence in the US.

To my knowledge, the housing projects in the US don't involve the tenants in shared ownership / membership, which is different than what I understand of the parent post.

The Netflix culture deck references Autonomy, Mastery, and Purpose. I submit that there is a similar level of empowerment at play regarding housing. That's one reason why many who can afford to buy a house do so even in situations where it's cheaper to rent (when factoring in maintenance). So as a recipient of government housing, feeling like you're in a giant bureaucratic housing solution where you have no control is demoralizing. Of course, there's always the argument "that's better than nothing; these people should not complain".

But I think we can do better. What if every tenant was in some way responsible for some part of the maintenance of the building? Some can garden, others can plumb or be apprentices under an electrical engineer, etc… Then there can be some pride associated with maintaining a dwelling that may be modest by worldy standards but that makes others smile and generates thankfulness.

In a larger sense, we must include the human dimension in what is fundamentally a human problem, instead of only being focused on the technicalities.

We have the same in Poland (they have long tradition since communism times) - they quickly turn into bureaucratic nightmares ruled by hegemons for whom rubber stamp and paperwork is more important, than the cooperative members and their well-being.

> Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing?

You could probably make the same argument for prescription drugs and patent fees, no?

Are poor people spending an exorbitant percentage of their income on patent fees?

I guess the parent meant 'patient fees'

i meant drug patents and licensing

yes sick people spend a lot of money on patented drugs, or their medicare does.

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