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Comment by aphextron | Hacker News Reader

>Bad housing policy is one of the biggest impediments to overall economic growth[1] and to individual economic opportunity[2][3] in the US.

I would say it is the defining problem of our generation. The 20-30 year olds now who grew up in the bay area and aren't involved in tech have three options: Live with your parents until they die, work 40 hours a week just to feed yourself and pay the rent (split with random roommates), or move away from your entire family and support network. They live in a world where literally just being able to afford your own place is considered "bougie". It's insane. They can't even comprehend that there is a world where grown adults can live on there own and afford a respectable place to live while (gasp!) also saving for the future.

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Idk about _the_ problem. Healthcare might be a bigger problem than housing - especially since astronomical medical bills and lack of insurance can cause people who had homes to lose them

Just looking at GDP (in the US), medical expenses do account for more of GDP than housing; however, a lot of those medical expenses come from Medicaid & Medicare, and are not directly out of pocket. I'd love to try to find the % GDP of out of pocket / Premium expenses in the USA as a comparison.

I think you could make a clean argument it's a 1a / 1b sort of problem. Housing & healthcare are two of the most basic needs in a modern society, and both have systemic issues across much of the country.

Medicare and Medicare costs may not be out of the recipients pocket, but they are paid out of someone’s pocket.

However, housing costs affect young people more than Medicaid/Medicare, and younger people contribute more to GDP than Medicaid/Medicare recipients. So, when talking about GDP growth, housing is likely much more significant.

Not everybody needs health care. Everybody needs a home.

Housing is also a root cause of a lot of other issues. Equity. Environment. Health. Upward/downward mobility. Ethnic integration. And so on.

> Not everybody needs health care

Everybody needs health care. Perhaps there's someone who wins the lottery and makes it through life without a doctor - though most don't get through their very first moments without one - that doesn't seem like something to plan on.

Obama did push those healthcare legistlations...

It’s not a lottery, there are a lot of preventative measures. There are however a number of random serious illnesses that could occur, so everyone does need healthcare.

And those preventative measures often utilize health care, from doctor's checkups to cancer screenings to immunizations.

Also, there are non-illnesses, such as giving birth, where a doctor is needed.

And there are accidents ...

No, everybody does not need health care. 90% (made-up as my wife, two daughters and me haven't been to the doctor in 2 years) if not more of health related issues while you are under 40 (maybe higher) can be taken care of through over the counter medications. However, we still require shelter, particularly since we live in an area that is under 32 degrees for 2 - 3 months out of the year.

Globally, it seems to be the most defining problem, at least that I hear about. Australia, New Zealand, UK, Canada, US are all grappling with "housing affordability".

One can "just" get a job with good health insurance, whereas homeownership in productive cities has surpassed wage territory (even for professionals) and now requires intergenerational wealth. Helathcare is highly unequal; housing (in job-rich regions) is uniformly impossible for those of us born too late.

> homeownership in productive cities has surpassed wage territory (even for professionals) and now requires intergenerational wealth.

In NYC, saving up for the down payment on an apartment with a 30-year lease basically requires being able to hold a reasonably high-paying job for 3 years. Real estate is definitely way overpriced, but it's not exactly insane either.

NYC has a much better functioning real estate market than SF/Bay Area from what I can tell. With the exception of the remaining rent controlled apartments, there is not an unwillingness to build high density housing. There is a much better match between housing prices and the supply/demand curve.

Is it the defining problem of our generation, or the defining problem for West Coasters of our generation?

I don't mean to take any stance on whether it's the singular outlier in magnitude, but https://www.citylab.com/equity/2018/04/the-global-housing-cr... makes a strong case for it being broader than a West Coast issue.

It's an interesting article but it doesn't really support the lede (that housing is problematic in Detroit) with evidence. It'd be interesting to cross the median multiple metric for American cities with economic growth, to see the extent to which housing is locking people out of access to opportunity.

It would to me be weird to see an argument that there is a housing shortage problem in Chicago, which has a pretty reasonable median home price, and where the median home is within a much more reasonable commute to the city center than most SFBA homes.

I assume (without evidence!) that this is true throughout the midwest and throughout the 2nd tier of US cities.

It's a problem in many cities around the world that are experiencing housing price shocks. A list of some of these cities: Vancouver, London, Toronto, SF, LA, NYC, Seattle, Berlin, Austin, Boulder, Sydney, Auckland.

And the housing contagion spreads. For example most of the province of BC that Vancouver has similar housing affordability issues. Same with Toronto and many hours away from it. About %70 of the Canadian population lives somewhere heavily unaffordable.

Then you add the problem that most jobs are in these cities and it makes it even worse.

EDIT:

Look at this list of unaffordable metros for example: http://time.com/money/4193804/hong-kong-least-affordable-cit...

The US stands out as having a good collection of affordable metros, the but rest of the world is worse and california is horrible.

Ok, but those US cities are only something like 16% of the US urban population in cities over 100,000 residents.

I was pointing out that it's an international problem not just the USA. Thus making it more of a generational issue.

But the point is that it's not a problem in most of the US, which makes it an issue only for people that demand to live in a few select cities.

I don't know about the US, but my experience from Europe is that many smaller cities have become, at least relatively, unaffordable as well. It seems like almost anywhere with decent density and transportation has now become part of the global credit, property and holiday rental market.

I don't know about those other cities but both Vancouver and now recently Toronto, have rent control.

Yes, real estate prices are heavily inflated but you can rent for a decent price in both of those metropolitan areas. I would find it very difficult to believe 70% of the population around the GTA can not afford to live where they are.

Rent control isn't the solution to everything. If housing is consistently available at a discount to market price, it will fill up and stay full. New entrants to the housing market, such as the younger generation, are still screwed.

It could work if the city is constantly building enough new housing -- but if the city has the will to allow that, they wouldn't have needed rent control.

Rent control isn't a solution at all. It's just a lottery to pay for some people lucky enough to get it.

Not if there isn't significantly more demand that supply. Rent control has worked well to mitigate housing issues in Paris during the last few years. It didn't solve everyone's problems: more and more students are moving to the close suburbs, and getting an apartment can be highly dependant on whether your landlord deems your income stable enough. But it has also prevented rent escalation - which we're currently seeing now that a court has repealed rent control [1].

[1] https://www.lemonde.fr/logement/article/2017/11/28/apres-lil...

The problem is it works in the short term, but makes the problem much worse in the long term. It reduces the returns of future apartments, so fewer apartments are built.

> Vancouver, London, Toronto, SF, LA, NYC, Seattle, Berlin, Austin, Boulder, Sydney, Auckland.

Fortunately there are tens of millions of other metros to live in

I don't think there are quite that many. 7billion/20million (smallest plural 10 of million) get's us 350 people per "metro" this is assuming no one on the planet lives rurally (about half do). There is perhaps thousands of metros on the planet.

On a more serious note, realistically this number is much smaller for each person. After you take into account the ones you could legally live in, ones you can speak the language for, ones with good job prospects. A person in the USA is lucky to have tens of options. For people in smaller countries the options are likely to be under a dozen.

There are studies like this one [0] that argue just about the entire increase in inequality in the past few decards (in Piketty's "r > g" sense) can be explained by increases in the housing market.

It's interesting to hear Chicago doesn't have a housing shortage though, having pretty much all my roots and social ties in coastal cities it does feel to me like this problem is everywhere.

[0] https://www.brookings.edu/bpea-articles/deciphering-the-fall...

I bought a 3-bed, 1-bath, 900-sqft bungalow in a solidly working-class St. Louis neighborhood in 2016 for $72k. I rented a nice 1100-sqft 1-bedroom in a nearby neighborhood for $625/mo a couple years before that. (Rents have not meaningfully changed in those neighborhoods).

I now rent a run-down, 350-sqft apartment in NYC for $2k/mo.

People on the coasts seem wildly out of touch with the housing situation in the Midwest. Cheap housing is the norm. It's simply not a problem in most of the country.

Well, it does actually come up pretty quickly and consistently when discussing this generation across the board.

Right, but that wouldn't surprise us if the sampling of that generation we're getting comes principally from Internet message boards, where SFBA-class residents and SFBA-class aspirants are heavily represented.

(I'm not sniping at what Stripe is doing; I think SFBA housing is a worthy problem in its own right.)

The west coast, well, many urban areas, often are leaders in showing trends then end up spreading more widely.

Yes, the weak and the old are usually the first to fall when an epidemic strikes

Not really. There are plenty of other quickly growing cities that aren't filled with NIMBYs destroying the housing stock (e.g. Phoenix, Indianapolis, Dallas, San Antonio, Las Vegas, etc).

Those cities are at different margins away from fundamental constraints. Because of geography, SF and SV were sort of locked into smaller footprints vs commute distances. Seattle/LA is just behind that with a bigger sprawl/commute margin but they're close to some limit at which property values spike up. Those other cities you name are wider flatter areas, with similarly wider margins, but they might hit other constraints soon... water for some of them. After they hit the constraint, their property values will spike too.

California’s housing issues are caused by uniquely California legal issues, some of which were good ideas at the time. Infill development can use advocates everywhere, but nowhere has such demand and yet so much opposition.

The West Coast has the worst case of this disease but it's a widespread problem especially in cities. Look at house prices vs. median income across the country. Normal is considered 3-4X. 5X is considered high. Today above 5X is the norm, which is considered "loony."

Above 5x is not in fact the norm for the overwhelming majority of urban Americans.

West coast investors seem to think it's a coastal thing. https://news.ycombinator.com/item?id=15742917

Considering that rent in major metropolises such as... Madison, Wisconsin is at the same level as Tokyo (and teachers are definitely being paid less), it's definitely a huge problem.

Almost all major American cities are having the bottom fall out in slow motion, and it ends up having repercussions everywhere. The absurdity of someone having to have 2 jobs to survive being a _real thing people say to people struggling in cities_ is the most American response to a problem.

It's obviously not just "rezone all the things", but the fact that people care so much about real estate, and that there are so many people who have vested interests in making it hard for poor people to be able to live at least somewhat close to their jobs is awful.

I want to believe it's a hard problem (because we haven't fixed it yet). But at this point I have seen soooooo many places outside the US that have almost no problem with this issue that I now have a hard time thinking it's anything other than rich white people wanting what they want.

“rich white people"? Why not just "rich people"?

Because decades of discriminatory lending practices and policy mean that there's a strong racial component to where people live. There's a trite statement about how desegregation never happened in the North, because black people end up basically stuck in poorer areas of town anyways.

The thing about systemic racism is that even if every participant is legitimately trying to give everyone a fair chance, the existing systems (artifacts of redlining, for example) are still biased in a certain direction, and will end up giving discriminatory results.

"Black people with upper-middle-class incomes do not generally live in upper-middle-class neighborhoods. Sharkey’s research shows that black families making $100,000 typically live in the kinds of neighborhoods inhabited by white families making $30,000."[0]

[0]: https://www.theatlantic.com/business/archive/2014/05/the-rac...

This looks like a legitimate complaint, but the way you worded it leads one to believe it is some innate quality of being white that makes people do selfish things, rather than circumstance; in this case, preventing poor people from finding favorable housing.

That's a good point. While there are a lot of cases of people in city council meetings saying overtly racist things as justification for these policies (mostly making equivalent poor, POC, and criminals). But I imagine a lot of people are basically just looking out for their own well being.At most being selfish, not discriminatory

There is still the issue that many POC don't even get this opportunity to be selfish, but that discussion doesn't lead to much

I do not believe that an apples-apples comparison between the Tokyo and Madison real estate markets would justify the equivalence you've drawn.

Yeah this might be exagerated. I'm also being very "armchair social scientist" about all of this, but I have heard this narrative multiple times.

It's very likely I'm falling into the trap of the compelling narrative that matches a worldview, but I used to not have this worldview...

There are so many stories that ultimately end up with some narrative like "people with $2 million homes don't want to let other people have $200,000 apartments", and reading that over and over makes me pretty jaded about prospects.

Greetings from Sydney, where it's definitely a problem here too.

i'm not a west coaster, or even an american. just a 30-year-old who works a full time software engineering job and can't afford a house.

In this instance, the problem really is bigger than just silicon valley's bubble.

Climate change is probably the problem of the generation, but amazingly, allowing more housing near transit solves that one, too!

> work 40 hours a week just to feed yourself and pay the rent

The problem isn't actually doing that, the problem is when you can't actually pay the rent on the money you earn. Both you and your potential employer lose out when you're hired because you're perhaps not quite good enough to warrant the $150k+[1] salary required, or because there's always going to be someone a bit better at that rate. It's not about not wanting to take the job at $80k[1], or the company not wanting you at that rate, it's that you can't afford a sustainable lifestyle at that salary. Never making it onto the first ladder, you're never going to climb it (or, you're going to climb it much, much slower). This also feeds into education credentialism as a "shortcut" to access this ladder - etc, etc.

The people who actually make it onto the ladder are for the most part going to be fine.

1: Adjust for the numbers that are true, these are just rough ballpark figures. The point it, that threshold exists.

> I would say it is the defining problem of our generation.

Respectfully disagree. I would say it is a defining symptom. The problem is centralisation and the insistence that people need to show up to an office to do their work. There is plenty of cheap housing even in the US, the issue is to let people work from where the housing is rather than insisting they move to "where the jobs are".

IMO Stripes money would be better spent on telecommuting policy and technology.

There will always be area's more popular for whatever reason. Those that want to spend their money on an address can do so but every-one else needs some assistance to work from an address that suits them and their budget.

My parents’ generation paved over the apricot orchards of “the Valley of Heart's Delight”, rechristening it as “Silicon Valley”. Now that we have suburbs and commutes sprawling all the way to Tracey in the Central Valley and to Gilroy to the south, I believe it is not unreasonable to once again transform this fertile valley. This time into housing that is a little denser than single family homes. This would match the current trend of building office buildings that are a little bigger than the tilt-ups that defined the original Silicon Valley.

I guess to more specifically address your proposal of having jobs elsewhere via remote working, I would say, why not more density here. We did it once before, turning prime farmland into suburbs. Is the current configuration really the end of history for this valley? I would argue not, if only by counter-example of cities allowing ever larger office buildings to be built along 237.

I am a huge fan of remote work, but this is just wrong. The current state of remote work is not sufficient to replace the office environment for most tech cases, especially not small startups where low communication latency and overhead, high degree of alignment among team members, and spontaneity are important. Not to mention the numerous non-tech jobs where being physically present is literally a job requirement.

This also ignores the non-work reasons people might want to live in an area, as well as the positive network effects from higher urban density.

Not everyone has the aync communication skills to remote work nearly as effectively as they do in-person.

Telecommuting as a long-term solution to the housing problem is similar to the vision of autonomous cars solving transportation issues. Those approaches could work in some cases, but overly relies on technology and ignores working examples in big cities, like commuter rail and cheaper/smaller housing in Tokyo.

I have worked remotely for a number of years, and it's not for everyone. I didn't like it until after I got used to the loneliness and would look forward to going to the office. To repeat an observation from another reply, not all jobs can be performed from a remote location.

I used to be a pro-telecommuting as a long term solution. But having experienced telecommuting and also car-optional cities, I've since changed my stance. There is a big difference between online buzz and the buzz of being in the middle of a busy, safe mixed-use neighborhood.

On the flip side they will inherit millions from their parents.

> work 40 hours a week just to feed yourself and pay the rent (split with random roommates)

Actually I don't understand why it's bad option especially if you replace random roommates with friend/gf/bf.

Because it's not fair. The effort to feed and house yourself in reality only takes a few hours a week. The rest is rent (in the economic sense--no value provided; just paying someone who got there first and put up a gate).

https://en.wikipedia.org/wiki/Economic_rent

Life is not fair. Feel free to be the first one somewhere else.

Nobody said life was fair. But law and legislation is supposed to be fair.

True, nothing in nature guarantees fairness.

But I believe that one purpose of civilization is to make life fair.

Not to give everyone an equal slice, but to give them an adequate slice so that they have a fair shot at having a healthy, productive, satisfying life. As someone who has more than I need (not by a ton, but all my bills are paid, and I have some surplus), I want to share it effectively at least with those who are struggling through no fault of their own.

> I would say it is the defining problem of our generation

Only because the economic urge to live in one place has become compelling.

Moving away for a new life has been a recurring theme throughout the history of the US. The only thing that seems to be new is an entitlement to live where you were born.

4th option: get in Tech.

The wealthiest people I know in the Bay Area are natives not in tech. Most operate or work with family businesses. Their families tend to own A LOT of property (homes and land) as well.

They do make quite a bit of income off tech workers though.

Yep, as a native in the bay area born and raised, I'm fortunate to have landed into tech. Although it's sad to see friends leave due to the tech in which they blame me and others for rising prices.

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