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Comment by huherto | Hacker News Reader

> Wages must rise

I would say that housing should be less expensive. These prices are impossible even with a good salary. You need two good salaries to buy one house and still have money for your other expenses.

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Agreed, but your local governments will not let that happen because they want your money. They fight every single day to maintain a false market value of your house, basing its value simply upon the few percent who are willing or able to pay an ever upwards higher prices. A value based upon construction labor rates that skyrocket because of their daily increasing mandated certifications, insurances and fees and taxes and laws, and a value based on construction materials subject to more of their certifications and upwards marching specifications (a 5 inch well for four people? while water usage per person is halved during the same period?). And finally, by them "adding taxable value" to your property (at your cost), for example, by forcing new massively expensive sewer and water systems, often, because historically they permitted very small lots. When those lots have sanitary problems and the land value falls low, they won't let go of the tax money from those properties, instead, charging everyone to upgrade the entire infrastructure at massive costs (for which they then get an admin fee forever, as well as keeping the taxes). Finally, outsourcing the infra. services to a third party, at what, cost plus? No, housing will never get cheaper.

Except the government has basically made it their priority to prop up the existing housing prices as much as possible, and keep it that way. For every young person desperate for an affordable house, there is an older person that is counting on their house's current value to be able to retire.

It's a mess.

I really don't understand how that works. You can't (reasonably) sell the siding and plumbing in your house for groceries and medical bills... So how do people use their house for retirement (you know besides not paying rent or mortgage)?

It is a mirage. You think you are making money but you cannot use it. Unless you retire in an inexpensive place. Or die. You will have a lot of money when you die and can sell your house.

You go to the bank and say "my neighbor's house just sold for $X. My house is better. Can I have a loan for $X * .8?" Also see reverse mortgages [1]

[1] https://en.m.wikipedia.org/wiki/Reverse_mortgage

But that's only a few hundred thousand dollars, probably for one time though?

So you can extend your credit. But you still have to pay that. You don't get to spend that money.

Via a HELOC or a reverse mortgage, which becomes a thing for people 70 and older.

Alternatively, selling to cash out and move to some spot favored by American retirees, such as Costa Rica or Palma de Mallorca, where the dollar (as well as Social Security check) goes much further.

What I don't understand is why the government isn't building housing to sell. You'd put workers back to work, and prevent some of these crazy expensive prices. It seems like all developers want to build are mcmansions and luxury apartments they can sell for tremendous profits. Where are the cheap starter homes and condos?

The price tag on the final construction is defined by three things - cost of land, cost of labor, and cost or building materials (which includes things such as equipment rentals). Where would a government construction company experience massive price advantage that cannot be replicated by a private entity? Their cost of equipment is same as everybody else's, their labor costs are probably higher due to extra layers of bureaucracy and stronger union contracts.

There's a lot of city owned land in the Bay Area, that would effectively cost the government nothing. Not to mention abandoned lots that should face stiff liens, and eventual seizure if nothing is done about it. Then they contract with the same builders that the private sector uses. But instead of building apartments with granite countertops and bathtubs with water jets, they use simple finishings (or just don't finish things at all, like in my apartment, the floor is polished concrete and the ceilings reveal the structural elements).

The primary reason for housing shortage is not real estate developer laziness and apathy. If Vegas, Florida or empty Chinese towns taught us anything, developers will build given a chance to appropriate a large budget or a cheap loan.

How much of that city owned land is zoned residential, has no building restrictions and is set up for electricity, gas, water and roads? Most developers also present a choice of finishings, if you're committing to a brand-new construction, where one can go from custom Italian marble to basically nothing. KB Homes and Lennar are particularly known for no-frills simpler-designs cheaper units, check out South or East San Jose and anywhere in Morgan Hill / Gilroy vicinity.

I said this somewhere else in this thread but just move to the Midwest. There is plenty of space and depending on where you want to live houses can be super cheap.

There are many problems with moving to the Midwest. It's like someone suggesting moving to Puerto Rico to save on money since a place with a vastly different culture is not simply interchangeable (and I'm saying this as someone who has lived all over the U.S.).

Edit: for the downvotes lets remember that Puerto Rico is part of the U.S. and that Puerto Ricans are American (i.e. estadounidense).

You can have most of the amenities of coastal urban life in places like Chicago; which even has its own coast and doesn't have the outrageous COL that places like San Francisco, LA, or NYC have. Sure you're not going to make the same crazy salaries, but you're also not spending 5k for a 1br apartment in the Mission

What would you spend for a nice apartment by good transit?

My peer group just out of college in consulting paid $1000 - $1600 for nice places. Low end of the range would be shared with 2-3 others and maybe 40 min outside the loop. High-end would be for a 1BR 15-20 min out. You could also live in West Loop (think lofts) in brand new places for even less

I imagine that heating and electric adds a couple hundred though? (in CA I pay about $20/month for gas/electric, but remember paying hundreds when I lived back east).

> in CA I pay about $20/month for gas/electric

How the hell do you pay so little? I pay $25/month just to have a gas connection.

I'm rarely home and have a small studio apartment. I don't have AC (most homes I know don't have it in Oakland), and there's almost no point in running fans when I'm gone.

That's my point. I could leave my house for a month, shut off everything that uses electricity and gas, and still have to pay more than twice what you pay just in connection charges. Do utilities in California just not charge flat rates for connections?

I've also lived all over the US, and the culture difference between NY or SF and nowhere, ID is, many times, less than the difference can be between many places in the US and Canada.

I suppose a lot of that depends on your ethnic background. I've been to places and been like, "woah I just stepped in to the 1950s." Certainly not everywhere (Chicago comes to mind) are like this, but again Chicago is also a pretty expensive city.

Far too many race and culture issues in the Midwest IMO. Not to mention lack of software jobs & economy propped up by ag cycles & federal farm bills. Lots of articles about the issues in rural America, won't repeat them here.

Much rather live in Seattle, NYC, Boston, etc. Much better living, profoundly more jobs (both in number and variety), far better culture, better politics, much more environmentally friendly.

I live and work in the suburbs of Dallas. I'm also an openly LGBT Jew, and nobody gives me any problem. And the large Asian populations (Chinese, Indian, and Korean especially) in the suburbs here shows that lots of people of other races choose to live here over other places in the country.

It's debatable over whether or not North Texas counts as "the midwest" (really, Texas can be divided into five sections, which go into separate regions), but I like to think of it as such. We're in Tornado Alley, and most of Dallas feels like a typical middle-American suburb.

I am pretty sure everyone agrees Texas is a different country. ;-)

TBH I've heard Texas has a pleasingly libertarian vibe about many personal choices, but you are required to love HS football.

Even if house prices were not so inflated wages would still be stagnant. That's a much bigger problem for the economy than house prices because it is harder to solve for. Reasonable house prices are just a solution to the most immediate problem facing us today, that is all.

Judging by the downvotes, many people are totally in denial about this. It is pathetic.

I'm a red blood tooth and nail capitalist. If I say wage stagnation is real you had better believe it.

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