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Comment by rayiner | Hacker News Reader

I wonder how much of contemporary Democratic politics is driven by insane rents in NYC and SF. The party has seen an influx of core Reagan voters—everyone from Wall Street bankers to Silicon Valley engineers (Reagan won Santa Clara County by 17 points in 1984). These affluent, highly educated folks have adopted the narratives and politics of the working class, juxtaposed against a ever-more-narrowly-defined “elite.” And it’s not the Kennedy-esque “noblesse oblige” that’s been a historical pattern. These folks don’t just express concern for the working class, but identify with them and are angry about the economic system. And I have no idea how to explain that, except they’re paying $5,000 a month for a cramped little apartment in NYC or SF, and feel like victims of the economic system rather than the winners.

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This comment nicely attempts to paint high earning (not necessarily wealthy) upper middle class professionals as the scapegoat for an issue they did not create. The reality is, the people who are actually wealthy (think deca millionaires on up through billionaires) and investment firms and corporations are the ones suppressing supply for individual home owners.

https://www.nytimes.com/2022/04/23/us/corporate-real-estate-...

This isn't true at all.

The vast vast majority of homes in the US are owned by single family homeowners. And even if that wasn't true it wouldn't make much of a difference. Investment firms don't purchase homes to let them sit there, they purchase homes to rent them out. To whatever degree they're competing against single family homeowners they're just causing a small percentage of housing to shift from owner occupied to rental housing which should actually lower the cost of rentals.

Especially in NYC and SF the cause is very simple: local government has made it illegal to build enough housing to keep pace with demand.

Who's more instrumental in driving housing policy?

Homeowners?

Mortagage generators & holders (that is, creditors)?

Developers?

What of markets with significant concentration of property ownership?

Or of commercial property owners, who can also skew zoning and construction / land-use patterns?

What of interest groups which can create red-tape nightmares even through good intentions by various mandates: setbacks, offsets, minimum clearances, ramp requirements, etc.

Podcats / video channels / blogs such as StrongTowns or Shane Philips (UCLA Lewsi Centre) are all great starting points for how a tangle of minimum requirements and/or prohibitions starts blocking any possible change from traditional urban-sprawl patterns. Most have observed that the highly-desireable dense development of older cities and towns (1870s -- 1950s, typically) simply isn't possible under current laws and regulations.

I'm generally a fan of regulation, but it's got to be good and effective, rather than simply piled on. As with software, code requires occasional refactoring.

That's easy: it's homeowners, who capture zoning boards, planning commissions, and city councils to oppose density.

My comment isn’t blaming anyone. I didn’t say these folks are the cause of housing prices going up. I’m just trying to understand the psychology of how they’re reacting to that phenomenon.

My suspicion, though, is that ballooning upper middle class salaries, combined with tax rates on the upper middle class lower than the Reagan era, really are a key driver of housing price inflation.

Investment firms, certainly, are a red herring: https://www.vox.com/22524829/wall-street-housing-market-blac... (“However, the idea that institutional investors are somehow largely to blame for the current housing market catastrophe is wrong and obscures the real problem. Housing prices have been skyrocketing due to historically low supply, low mortgage rates, and the largest generation in American history entering the market looking for starter homes.”).

The difference between a million dollars and a billion dollars ... is about a billion dollars.

The upper extremes of wealth are truly mind-boggling.

And for a family with a few million in nonliquid assets --- housing which they require to live, and investments earmarked for retirement --- a million-dollar cushion at the end of working life is not much.

(The fact that many people reach retirement with far less is not only a tragedy but a looming national catastrophe for the US.)

Steve Waldman has a great blog post on this topic that goes beyond big city rents (though I agree that's a huge issue):

https://www.interfluidity.com/v2/7263.html

That’s an excellent post. One thing I hadn’t thought about is that communities are so stratified that if you fall even a little bit income wise, you lose your work community, might have to move, might need to change your kid’s school, etc.

Yup. Which goes back to the housing problem. Under building of housing country wide (and even more so in major cities) is IMHO one of the root causes of many many many of the problems we see in America today.

It's a really really weird space that didn't really exist in 1984. I would say that today's "engineers" below the 80% salary threshold for this space are today's "construction workers" and heavily democratic voters (There are also of course "construction workers" too, of course).

Maybe about 5 years ago I would have said that people making 200k are wealthy. Today I would say that they are a lot of people that have been duped into a lifestyle where they "think" they are wealthy but are not. They spend MOST of their salary on non-essential and non-asset building things. So in a sense they are people that should be rich, but are not. Instead they don't own property (renters) buy lattes, restaurant food (for every meal) and the rest of that income is just going to payments - the tesla, rv/campers/boats, storage facilities for the stuff that doesn't fit in the apartment.

Those people certainly could become winners of the economic system if they stopped paying everyone else - but they identify with wealthy people making 400k but have absolutely no appreciating assets (ok except for their self driving module that Elon duped them into - which it turns out isn't actually "sellable" to the next owner anyway!).

I don't think these people identify with working class - instead they are pushing a narrative for themselves as poor to feel less guilty about that large salary and how poorly it's being pissed away.

That's the closest I can "explain" that from my personal perspective at least.

$200k isn’t enough to buy anything in SF though. Also - I know a lot of people making $200k/yr and they spend relatively little.

Honestly - you sound really out of touch and like you know no one who makes $200k/yr in SF. Where would you put your boat if you even could afford one? Where would you put a camper? Do you think people at 200k in sf are renting houses often? Houses with space for boats and campers?!

Sounds a lot like someone who likes to bitch about avocado toast. I wish people like this didn’t even post on HN - because it’s clear they don’t live in SF and don’t have a clue.

Living in a high cost of living area is voluntary consumption as much as buying a new BMW every year or taking European vacations all the time. If you want to spend your wealth (and yes, 200k/yr is ridiculously high) on living in SF that’s your choice, but that doesn’t make you non wealthy.

Do you live in SF? It sounds like you don’t live in SF.

You don’t have to live in SF to observe that living in SF is a choice. Many of my law school cohort has household incomes of $300k to $1 million. Many choose to live in MYC or SF or DC and pay nearly $2 million for a house. My wife and I instead chose to buy a sub-$500k house in an exurb. We eat at Maggianos instead of Per Se, but we can afford “rich people” luxuries like a house on the water, sending our kids to private school, etc. But those are choices. An ordinary American would consider us all “rich,” and rightfully so. They don’t care whether we spend our riches on boats versus exclusive neighborhoods versus the cultural amenities of a big city.

The choice is tightly bundled with economic opportunity, income, specific jobs, school quality, and other factors.

I'm interpreting "living in SF" to mean broadly within the SF Bay Area metro region, which would include much of the counties of San Francisco, San Mateo, Santa Clara, Alameda, and Contra Costa. Arguably parts of Marin and Santa Cruz. For some of the longer commutes, Sonoma, Solano, Yolo, Sacramento, and San Joaquin.

Housing is scarce and expensive throughout the region. It's one of few economic hubs in the US let alone the state. And people have increasingly been priced out, or simply unable to find housing (including replacement after natural disasters).

"Choice" isn't a binary, or absent profound implications, opportunities, and/or consequences.

Using lattes as an example of burning money in your pocket is just laughable and really shows how much you understand how the local economics of the bay area. I don't think there are many owners of RV/campers/Boat owners who live in SF but spot on reference. Throw on hatred of Tesla et voila:

Ok Mr. Old Republican Avocado Toast hating throwaway troll account - wish you the best of luck in your distorted world. Your worldview is a sad deeply inaccurate take and I hope you realize that before its too late.

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