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Comment by citilife | Hacker News Reader

Many dislike the idea, but this is why people turn to "nationalism".

If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).

Similarly, you can loosen building codes to increase production of homes, limit visa duration, require citizenship for home ownership, etc. Those are some obvious fixes, why is the government not doing it?

Beyond the obvious potential fixes, all EU countries are facing the same issue:

- supporting immigrants (high level of immigration)

- no controls over ones border(s) (anyone can move between EU countries)

- over regulation and too many social programs (reducing peoples willingness to work & increasing burden on the current tax base)

- over regulation of industry and farming has left the only option to survive being to work in a city (as an example, see nitrogen reduction regulations in the Netherlands)

It's all "give-and-take" you have to decide how you want to live... To me it sounds like the EU is hitting a critical state, but is there a will to make the tough calls yet?

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Basically all of what you said is empty populist propaganda that doesn't pass a basic sniff test. You're painting the EU as the bad guy with a broad brush and it's just total nonsense.

* depends on how you define "high" levels of migration, but few EU countries fit that. Portugal does, because they explicitly encourage it. Why? Nothing to do with the EU, they're trying to fight negative population growth.

* social programs aren't an EU thing, they're purely local. And the "too much social spending makes people not want to work" ia such bullshit.

* there are more local regulations than EU regulations. Which ones specifically are you referring to as too much?

* farming is explicitly subsidised to make it profitable. What are you talking about?

* not everyone can move between EU countries, you need to be a citizen. Like the Portuguese that have moved all around (e.g. there are probably millions of people of Portuguese descent in France)

It's annoying how popular empty nationalistic populists have gotten. Can't nobody bother to fact check their bullshit?

Nationalist populists really have never bothered with facts. People fact-check, but that's too late - the message is out, and it makes people feel better about themselves. That's all that matters. Truth doesn't enter.

(We could now add the Satre quote, or Hannah Arendt, or any number of people who've written about this. The popularity of the feel-good lie is well-inspected.)

Yeah, facts. Demographics explains most of what's going on.

Portugal's working age population is declining[1] while its 60-plus population is increasing.[2]

Old people own most of the real estate and don't care much about workers. They also tend not to like change, which immigrants bring. So they dislike immigrants despite depending on them.

(//TODO: find papers supporting these assertions: they're factoids of the "everyone knows" type.)

1. https://population.un.org/wpp/Graphs/Probabilistic/POP/15-64...

2. https://population.un.org/wpp/Graphs/Probabilistic/POP/60plu...

I'm struggling to follow your arguments.

"Boomers don't like immigrants/workers, therefore life is getting really expensive" doesn't really sound like good reasoning.

If the population is shrinking, demographics doesn't explain it by itself. Housing should be getting cheaper if there are less people competing for it. There must be another factor here.

You’re forgetting household size.

As with all wealthy countries, household size has fallen in Portugal over the past few decades, so the same amount of people needs more house. This is especially true in the context of empty nest retirees.

So that could be one of the extra factors that we're looking for. People want/expect more, which has caused people to have to pay more. But I'm doubtful that it is going to account for a lot of the cost of living issue in Portugal.

I'd still like the GP to connect the dots for me on his "it's all demographics" argument. It sounds like are argument you hear on Reddit.

I think you're missing the point.

For example, when my siblings were kids we all lived in 1 house. I have 3 siblings so there were 6 of us including my parents. In 1 house.

As we graduated from college we moved out. Now there were 6 of us in 5 houses.

Beyond the raw house count, you're going to need more space. Multi-bedroom homes have shared common space. The house we grew up in had 1 dining room, 1 kitchen, 1 living room, 4 bedrooms, and 2 bathrooms.

If we each moved out on our own, we now needed a minimum of 5 dining rooms, 5 kitchens, 5 living rooms, 5 bedrooms, and 5 bathrooms.

The number of people is the same. Still just 6. But we needed more housing and more space since we didn't share common space anymore. We didn't expect more than we had before (well, beyond the practicalities - it's difficult to share a bathroom with someone you don't live with), we expected the same as we had before we moved out.

You don't need a dinning room. That's a luxury feature. It is possible to share bathrooms if you build housing more like school dooms or single room occupancy.

Having a place to eat at home is not a luxury feature, unless the city has a population density that is high enough to support having a broad array of dining options that are open for most of the day. Tokyo is one example of such a city, but having restaurants that are open 24x7 is not common at all in Europe.

Having a place to eat != having a dining room.

Growing up (middle-class; both parents were teachers), we used our dining room to eat maybe 3 times a year. We ate around 1000 meals/year at the kitchen table and maybe 3 at the dining room table.

Most younger people share accommodations (e.g. have a roommate). Most older people share accommodations (e.g. have a family). There is also some, for the lack of a more sensitive word, attrition as time goes on. Yes, your family has grown and the amount of space your family needs in order to maintain their quality of life has increased. Yet it has only increased by a relatively small amount.

I am also going to echo what was said earlier: dining rooms are not a necessity. They are mainly intended for people who entertain guests. Many apartments and smaller family homes don't even include a dining room, since the expectation is that people will eat in the kitchen.

Housing supply doesn’t grow by all that much though, so a “relatively small amount” is enough to tighten a market.

In any case, censuses define a household as people living together in a unit, which would account for roommates. Portugal has gone from 3.7 in 1960 to 2.6 in 2011. Housing 10.3M people at 3.7 requires 2.8m units; 2.6 requires 4m units. And that may be just what Portuguese people have to put up with, but not their desired end state; if they were at the EU average of 2.2, then it would require 4.6m units.

Yes, I think I was missing your point.

I think that your thrust was that smaller average household sizes means more dwellings are required. This is a good point.

Shrinking average household sizes could be explained by the shrinking size of the average family, or it could be explained by shifting expectations, by people wanting more.

If you take a population where all single people are willing to live in share houses, your average size of your household goes up. If all the single people expect to live in their own apartment because they want their own space, own bathroom/kitchen, then this would drive down the average household size.

I would expect both of these dynamics to be at play here. Average family sizes are decreasing in most developed countries. People's expectations have also risen with regards to housing.

I wonder what effect each has on the demand for housing in Portugal?

BTW: Your personal example is possibly a good example of shifting expectations in society, whether you recognise it or not. Every sibling moved into a place by themselves? Did no one move into a sharehouse? I probably do not live in the same country as you, but it used to be in my country that when you first move out of home it is not the norm to live by yourself. What's the norm these days?

People definitely want to live by themselves even if they cannot afford to, and other things also factor into it.

(Disclaimer, I'm American, so can't speak directly about the Portuguese experience.) But as an example, at this point I don't remember the last time I saw a bunk bed in a non-dorm room setting. This used to be extremely common in low-income housing in particular [1] but as an example I have never, ever seen anyone share a bunk bed with a stranger.

One other effect is location, location, location. In Lisbon in particular, like most European cities there is generally a height limit imposed on most of the city (higher than most places in the US, but not so high that tall buildings are allowed). There is only ten buildings above 80 meters in all of Portugal. If your building is so short, there is only going to be so many ways to subdivide it before you can't split it more to accommodate people.

---

[1] - a historical photo of an NYC tenement: https://media.gettyimages.com/id/640482741/photo/bunkrooms-i...

Besides what bcrosby says, old people hold on to real estate "as an investment". In many cases they actively prefer that it be unoccupied, because occupants complain and want repairs done, and so on.

Or, in the case of "world cities" like London, wealthy (nearly all old) people from shaky and shady regimes around the world buy them as places to escape to if need be.

As well as falling household size in occupied dwellings, the proportion of unoccupied dwellings in these cities increases far above the percentage normal for the delays inherent in ordinary buying and selling.

IIRC Paris is attempting to combat this with a surtax on dwellings unoccupied for long periods.

"Boomers don't like immigrants/workers, therefore life is getting really expensive" mischaracterises my argument. In hindsight I should have left out superfluous phrases.

The fully elaborated argument is long and somewhat nuanced. If you want a soundbite, how's this: "Boomers own all the stuff (to a first approximation). Two other things: first, due to their wealth they can outbid Zoomers for real estate as it comes onto the market. (Having someone live in the proprty is entirely optional.) Second, boomers are adept at protecting their wealth by keeping real estate scarce and taxes on real estate negligible, as they have always been."

Or: people are not competing for houses, piles of money are. The bigger piles are winning.

Edit to add: Demographics comes into it because the Boomers are the first generation in history to be so economically significant in their old age.

Before the boomers, life expectancy was about the same as retirement age, or younger. Houses passed on to the next generation much sooner in their life cycle, often as they were just starting to have children of their own. Now, children can themselves be retired before parents die and leave them the house. Often, perhaps usually, are, these days.

The market weakness of new-household-forming adults (the 18-49 age group) is one consequence.

We are in uncharted territory, demographically, this century.

Isn't it weird that we allow home/land ownership to a family/individual in perpetuity and then complain about high prices and scarcity for newcomers?

Just think about it for a second, we in the west allow people to buy a piece of the Planet Earth, and hold on to it forever, virtually tax free(in Western Europe at least).

How is this nothing else but blatant feudalism? And how is it still allowed? Royal families and landlords were beheaded in the past by angry mobs over abusing this system for their personal gain.

Why don't we have taxes or a system in place to prevent this accumulation of land by those who got in the game early? Why can't we just lease land instead of allowing land ownership in perpetuity? Like, "this land is leased to you/your family for the next 100 years, after that it goes on to the market again where your offspring will have the chance to lease it again if they wish at the future market rate". Something like that, as our current system is basically a zero sum game which just encourages land hoarding through inheritance.

Those who's families go cheap land for peanuts ~100 years ago, are now leveraged to acquire even more of it while those born now without family wealth have no leverage to buy anything. Insane!

Imagine you have to start paying Monopoly from square one, while others get to continue where their parents left off. How is this fair? Why don't we have a system that resets this real-estate monopoly board every generation or so?

With our current ways, instead of creating a system that rewards individuals through hard work and innovation that contribute to society and human-kind, we're creating a system that encourages asset hoarding and rent-seeking that contribute nothing to humanity, rapidly going back to feudalism, where a few landlords, both corporate and private, will own all of the available land, and most of the people will be serfs for life, without the chance of ever owning anything, no matter how hard they work.

So, again, why do we allow people to own pieces of Planet Earth in perpetuity, virtually tax free?

>How is this nothing else but blatant feudalism? And how is it still allowed

Because the moment anyone mentions this, they get bombarded with "think of the poor old people who sit on a big house! They worked hard for it!"

We as a society have a tendency to prefer leaving lucky people as is while the remainder fights for the scraps. Why this is, no clue. Beyond voting being in favor of those already owning homes (too fractured to oppose grandfathering politically), I come across this attitude among the young way too often. It doesn't take a genius to realize sharing less with more will cause people to go hungry eventually.

Those same young people are all pro-grandfathering until they realize the bottleneck bites their life goals at age 30 and beyond. By then its too late, many of them stop caring as they become part of homeowners, and the cycle continues.

> we in the west allow people to buy a piece of the Planet Earth, and hold on to it forever, virtually tax free(in Western Europe at least)

What do you mean tax free? There are inheritance taxes for that, which often go up to 50-60% of the value for higher values. That's why the majority of castles in the UK are in trusts and open to the public, paying 50% of the value of the castle and land every generation was too much.

50% inheritance taxes are very rare in Europe, for normal homeowners it's mostly negligible, and there are workarounds like donating your property to your kids before you die to avoid the inheritance process and taxes.

And the property taxes are mostly grandfathered to the price the property was last purchased at, rather than at the current market prices.

I don't know for which parts of Europe you base your knowledge on, but in France both are wrong

> like donating your property to your kids before you die to avoid the inheritance process and taxes.

Donation to family members (above a certain sum, but any property would qualify) is taxed just like any other income.

> And the property taxes are mostly grandfathered to the price the property was last purchased at, rather than at the current market prices.

Property taxes are set at the current market prices (and if the gov thinks the value is set too low, they will come back and ask for more, retroactively).

> Old people own most of the real estate and don't care much about workers.

Lisbon's local government is renowned for being the largest property owner in the country, with over 60% of Lisbon's real estate owned by the city.

> over 60% of Lisbon's real estate owned by the city

I'm from Lisboa and this can't be true unless you're using some very strange definition of real estate. What's your source for this?

Maybe counting unimproved land?

Maybe counting by square footage of roads?

> Basically all of what you said is empty populist propaganda that doesn't pass a basic sniff test. You're painting the EU as the bad guy with a broad brush and it's just total nonsense.

It's fascinating how subjective dimensions of reality have the appearance of being objective, and how this seems to be increasing over time.

The problem is not immigrants, of people freely crossing borders -- the problem is rich people and the power we give them. Which is pretty clear from the OP, they know what's up. Most immigrants in the world, of course, are not rich. Blaming other people who are struggling as much or more than you, instead of the people profiting of it all, is helpful for the people profiting off it all.

none of those things gets rid of the root causes: too much financialization and speculation

alot of these things used to be regulated, discouraged or prohibited, but with deregulation of much of finance more and more wealth is generated from speculation, rents and leverage... if people can make money passively from doing nothing but owning something (real or virtual) there is less motivation for "real productive work" and squeezes out the rest of the economy.

this compounds over time and get the results you see today: high land costs, rents, inflation etc.

blocking immigration or adding tariffs etc will do nothing to stop any that....

The only real way to fight this is oversupply imho. Can't financialize something that doesn't generate outsized returns. If expected returns are lower (and risk higher) than the next financial class, money will move to that other financial class instead. Right now, real estate is low risk/high reward compared to the next best option (stocks?). So...money pours into real estate. Increase that supply to the point where finding a renter is at least marginally challenging, and you'll find that cash goes elsewhere.

Oh but yes you can financialize. Financializatuon of real estate isn't really about outsized returns, it's the return to risk ratio that has potential for massive leverage.

So if you increase supply and then people get bigger homes, etc..., until prices reach an equilibrium, then as long as rents exceed maintenance costs and land doesn't depreciate, you have a leverage (read: financialization) opportunity.

Then prices rise again until you do something else, and eventually you approach infrastructure scaling limits.

This is very simplistic reasoning. For instance:

> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).

Unless your domestic business requires imported goods to run its business. Then you've just increased costs for your domestic industry.

Check this out, this is fresh out of the oven

Portugal eases visa rules to tackle labour shortage

https://www.swissinfo.ch/eng/portugal-eases-visa-rules-to-ta...

> "Portugal's unemployment rate is at 5.7%, near a record low.

Employers' confederations have been asking for the immigration rules to be streamlined, pointing to an economic situation close to full employment"

The narrative of unemployment in Portugal driving dissatisfaction across the population is very tenuous in light of these latest developments and policies

>Employers' confederations have been asking for the immigration rules to be streamlined, pointing to an economic situation close to full employment"

They just to lower the wages. Hence why they are so in favor of opening the borders and human traffic situations like we had in Odemira with people from Nepal and neighboring countries living like literal slaves.

Even with visa deals for Portuguese speaking countries like Brasil, Angola and Mozambique just have that goal in mind, because it's not like we are getting scientists, doctors and engineers from those places...

>>> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).

This is very simplistic. You first start building local expertise/domestic businesses and then increase tariffs to wean off imports. Don't put the cart before the horse.

Europe largely isn't reproducing. It has to allow immigration for its survival.

It can also put in place policies to increase native population growth.

No one has found or discovered such policies that work across-the-board.

I think the housing crises has caused a lot of it. I am trying to have kids in my mid 30s, in large part because it took that long until I was financially stable. I can't even imagine what it must be like for a non software engineer.

Maybe a lower population -> lower housing prices -> easier to start a family will cause some sort of equilibrium.

>Maybe a lower population -> lower housing prices

That's not how real estate pricing works in the real world capitalism. Germany's population has been on decline for ~30 years due to demographics, yet housing has been getting more and more expensive, far outpacing wage growth in the last few decades, especially after the QE bull run from ~2013, so much so that owning your home is impossible for the average German.

Why is that you wonder? That's not how free market economy should work right? If now there is less demand for a good due to population shrinkage, then prices should come down right?

Well, that's because housing is not a good, it's a speculative investment asset, so as soon as people die and are not replaced, their free houses don't magically end up in the hands of those who would need them the most to buy at a discount, but end up on the "free market" being bough by existing rich home owners, investors, speculators and publicly listed real-estate conglomerates, using their existing assets and capital as leverage to buy even more houses for their investment portfolio. And governments and banks have ensure the policies to make sure this asset keeps going up, up, up.

When housing is an investment vehicle, then it can never be affordable, regardless of the population decline.

Like a commenter above said, which explains why home prices are not coming down despite population shrinkage: "people are not competing for houses, piles of money are. The bigger piles are winning."

> Germany's population has been on decline for ~30 years due to demographics

The thing is – within that time frame it hasn't, actually. There have been some years with slight decreases, but those have been balanced by other years with increases, and compared to 1990 population is actually definitively slightly up (83.2 millions last year vs. 79.8 millions). Combined with a decreasing average household size (2.27 in 1991 vs 1.99 in 2019) and internal migration those things by themselves will probably generate enough pressure on the housing markets in and around the prospering parts of the country, even without any added financial shenanigans on top.

As you rightly say real estate is treated more as an investment, so those who have bought in will never sell for a price lesser than what they bought in for. Hence real estate prices will never crash, unless something disastrous or apocalyptic happens to that country/area.

Then implement a bunch if them. Pornography is know to decrease drive. There are tax benefits that can make things happen as well. The desire to get it done just needs to emerge.

Europeans aren't having kids because they aren't having sex drive. They are having sex, just with protection, as they don't want kids, because the job and housing markets are too fucked to support a family without massive stress and anxiety for the parents.

Fix those first so we can have a stable income and affordable housing from a young age, and then we'll take off the condoms.

‘Fix the housing market and we will take off the condoms’ is a great t-shirt

Feel free to market that and become a millionaire. Just remember to quote ChuckNorris89 :)

Because no western country has tried lowering housing costs yet. And I mean actually lowering housing costs, not just talking about it on TV, posturing, political promises or making stupid mistakes like rent-freezes and such.

But blaming the poor young people priced out of their own country for not breeding, and just bringing third world immigrants with no living standards, is much easier than improving the living standards of your own population.

As long as you treat housing like a speculative investment that is squeezing the young to get a much larger return for the older owners, instead of treating it like shelter and a basic necessity for any family, why are you surprised young people don't breed anymore? The precarious job market isn't doing them any favors either.

Mass migration that puts more pressure on affordable housing and on the low-end jobs market is not the solution here. That breeds long term instability, segregation, distrust, and leads to political extremism. The solution is fixing housing, which nobody actually wants to do, because "housing prices must go UP", and the ruling asset owning class is making a killing from it.

My observation is, that it is about child care.

Guarantee all parents affordable child care close to their work or home and many people settling for one kid will have two.

Guarantee all parents affordable child care close to their work or home

Sweden has that (and generous parental leave policies) and still has both low and declining birth rates.

Sweden also has very expensive CoL/housing.

Its not just lowering housing costs. Raising a child does not just include housing cost, it also includes a ton of other costs, and since families have become nuclear and both parents work, it is hard to birth more children since cost/time that you need to spend on child rearing will be more. What is the solution to this? No idea

You mean childcare costs?

Yeah, take it further. Allow single-income households to prosper and be able to afford homes & children. Watch one-parent from each household start flocking to stay at home, maintaining a well-functioning household that's not dependent on external "services", and then having a bunch more than 1.5 kids is a possibility and probably a very appealing thought versus what it is now.

The Nordic countries have the best social safety nets in the world and their native birthrate is still dismal. What short of significant financial incentives would you do? The correlation is women's right to control their reproductive timing and access to the highest levels of the workforce. In almost every country where women aren't second class citizens, birth rate plummets.

>Europe largely isn't reproducing.

Yeah and why is that? Is it because the young are now competing in a zero-sum capitalism squid-game economy, where good jobs are scarce and super stressful to get, requiring you to grind away the most fertile years of your life, and that lawmakers, banks, speculators, foreign buyers and NIMBY boomers have made owning a family home completely unaffordable for the young in most cities with jobs, giving young people too much anxiety about starting a family?

No, it must be porn, hookup dating apps, and all that damn avocado toast to blame. /s

>It has to allow immigration for its survival.

Here's a wild idea: Instead of imposing mass migration from the third world on everyone, you first try, <inhales_deeply>, MAKING HOUSING SUPER AFFORDABLE, and watch young people breed like rabbits?

I'm from a ex-communist country and during those days population was monstrously booming, because, even though young people could not afford modern luxuries like iPhones, cars, TVs, consoles, oranges, bananas, washing machines, Adidas shoes and tracksuits, fancy cafes, they didn't have to worry about the main things that give young people anxiety about starting a family today: jobs, housing and childcare. The state would provide families with all of those necessities. I'm not saying communism is the solution, it's not, but it turns out that most humans have very simple needs in life (we're still animals at the end of the day), and as long as the need for food(jobs), safe shelter(housing) and childcare are covered, they'll solve the need for sex on their own and breed like crazy without having any modern luxuries.

So why are we surprised Europeans aren't breeding anymore when those basic needs have been intentionally made very difficult for them to get in the name of profit, and instead we push third world immigration as a the solution to replace them?

> Is it because the young are now competing in a zero-sum capitalism > No, it must be porn

Both are unlikely explanations given inverse GDP per capita and birth rate correlation: https://en.wikipedia.org/wiki/Income_and_fertility

More plausible explanation - many people don't like children and want to live for themselves but in poor/developing countries they have to 'invest' into children so they will take care of parents later. In countries with more or less stable economy people can rely on own investments or state pensions to not face extreme poverty after retirement.

Maybe people want to live for themselves because having children in the current economy is too exhausting? I'm pretty sure that if people could more easily afford everything what's required for having children they would be more willing to have them. Sure, some people still don't want to have a responsibility but I think plenty of people want children but just can't afford them.

You're right that any negative trends foster radical views such as nationalism and communism. However, the arguments you mention wouldn't work in Portugal.

Portugal used to even have a negative net migration rate and suffers a labor shortage. Right now, the net migration rate is positive and low at around 0.5. That's a good trend, but there is still too much emigration of skilled Portuguese people due to weak economy and structural problems.

The problem is not immigration, the problem is that wealth is distributed very unevenly. Average salaries are low in Portugal, many people have to do with very low salaries and few people in Lisbon and Porto make a lot of money. Although it luckily went down from nearly 0.4, the Gini index in Portugal is still relatively high for a Western European country at 0.33. This wealth disparity in combination with laws and politics that favor landlords, property speculation, and building hotels instead of apartment buildings lead to the housing crisis.

Tarrifs don't create jobs, they just destroy the specialized industries that used to export but now can't because you're in a trade war.

Nitrogen reduction was the very least dutch government could do and most people in netherlands support the law.

We should vastly reduce cattle numbers globally actually.

> Many dislike the idea, but this is why people turn to "nationalism".

I have to call Grade-A bullshit on your comment.

At best, nationalist political movements take advantage of sticking points with their highly opportunistic, ideologically incoherent and empty promises hoping to buy arguments while pinning the blame of everything on whoever is the incumbent at the time.

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