Comment by sliverstorm | Hacker News Reader

Comment by sliverstorm | Hacker News Reader

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Many people now are spending almost 50% of their pre-tax income on housing, and most of that is the price of land and goes to landlords.

1) That's really not a countrywide thing

2) It's not specifically the landlords, it's whoever was already there. A landlord who bought in just recently is not rolling in dough. The people who capture the gains are the people who got in fifty years ago and sold & moved, or the landlords who got in fifty years ago and are still renting the property.

3) But, yes, from the worker's perspective his salary increases will tend to go towards housing/land. This is a natural state in a competitive housing market. He must compete in the market for the space to live so that he can live near his job. The power of the market will continually optimize for those who make the most money (i.e. hypothetically produce the most economic value) to live in the most desirable housing (e.g. the closest to work)

The people who capture the gains are the people who got in fifty years ago and sold & moved, or the landlords who got in fifty years ago and are still renting the property.

Yes. Silicon Valley's land baron is John Arrillaga, who bought Silicon Valley farmland in the 1960s. He owns about a square kilometer of office space.

It's actually a lot more than just 1 sq km, mate. Waaaay more.

Not everywhere, but in SF, LA, San Diego, New York, Vancouver, Toronto, Oslo, Stockholm, London....

Would love to see a breakdown of the number of jobs in a given country vs the number of jobs in urban areas with expensive housing markets.

1) It seems to be a worldwide thing. I see the same in most major cities Europe.

It's due to economic centralisation. The level of wealth in Paris and London is disproportionate to the rest of UK or France.

This doesn't happen in Germany for instance. Rent in Berlin and Hamburg (1st and 2nd largest cities) is quite reasonable. Reason is economic activity in Germany is quite decentralized.

It’s not just the natural state in a competitive housing market. The locations with the greatest rise in housing costs tend to have a higher degree of regulatory capture, NIMBYism, and less competition and investment in housing. One reason for the migration to the southeast over the last decade is that housing costs have risen more in line with inflation than other areas. It’s just much easier and less expensive to invest and build.

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