What's the point? What is the point of trying to be a high performer if wealth can't be acquired by income? Why would I want to work for anyone in this country? Only way out is equity and that game is even harder to play in Sweden than in the US.
Being able to live in the most desirable areas is based on relative wealth. If there is a lot of old money, it's harder to make it to the top in a single generation.
The usual tools for leveling the playing field are wealth tax and inheritance tax. I'm under the impression that Sweden abolished both a couple of decades ago.
Georgism made sense in the 1800s and it makes even more sense now.
There was a reform of the German property tax system, since the federal constitutional court ruled that the old system was unfair. The current model allows the 16 states to set up their own system, if they wish so, and interestingly enough, Baden-Württemberg turned the property tax into an actual land value tax, taxing only the land value itself, not the real estate on it. Of course there was a documentary the other day about a land owner crying that he is forced to build more houses to rent out and cover the cost of the LVT. That was the point all along!
Unfortunately it’s not easy to understand why it is so effective, thus why people hear it and assume insanity.
The more common "rebuttal" I hear is "well the land lords will just slap it onto the rent, so no use", to which I ask "then why don't they ask for more rent already if the rentors would be willing to pay?"
Then again, people I talk with are against a wealth tax as well, claiming that property would be impossible to account for and value, meanwhile France and Switzerland, two neighbours, have no issues in that regard. At the same time, both Germany and Austria had a wealth tax until very recently.
But hey, at least the cops won't arrest me for openly smoking crack on the sidewalk, so that'll help me deal with the stress of trying to be a high performer.
I was looking at relocating at the time and wish I had followed through.
The suburbs around Vancouver gradually decrease in price a bit, but for obvious reasons and not enough to make much of a difference. It's like going from $750k for a 1 bedroom to $550k for a 1 bedroom and that's sort of the spread within reason; an absurd gap to be sure I don't mind them, but I'm just thinking about it terms of being able to stay in my community for once.
Our 1000 sqft house in the West End was almost 300k in the mid-80s and our family was struggling financially but we were in the best school district so my parents made the sacrifice. It was almost double the price of a much larger house in suburbs of Toronto.
East Van was cheaper but still expensive relative to other cities. Vancouver house prices has always been a mystery because there is no inherent industry to pay for it. Locals blamed Asians but Germans were larger demographic in terms of immigrants but you couldn’t identify them as easily.
Geographically constrained in 3 directions.
Only decent-weather locale for Canadians (US has hundreds of release valves for people that get sick of prices in SF / NYC / etc.)
Large rich Chinese immigration.
I would argue the latter 2 arguments have some bearing, but imo it's more about cheap capital coming in from many directions including locally for so long in combination with artificially choked and inflated development processes for decades. For example, there's a parking lot with an old grocery store sitting there at the busiest transit hub in the U.S and Canada. The proposal to redevelop the site has been repeatedly stalled every year for what is now 6-7 years, meanwhile only the most meager development projects have gone forward in the same neighborhood. That said, because of the other reasons, as soon as it hypothetically went up, all of the units would be purchased by speculators because they'd be wildly out of reach for any regular person anyway, due to decades of the other crap.
I went to an open house yesterday for a modest one bedroom with no interesting view or extravagant features, listed at $750k. When I remarked that the cost of the mortgage alone would be a multiple of 2.5 - 3x our current all-in expenses, he simply suggested that in 5 years I can just move out and hang on to it, renting it out to someone and keeping another unit off the market.
The geography is a constraint, the problem is failure to embrace the constraint in any sensible way. Prairie cities would be more economically productive and less horrible in my opinion if they halted outward expansion decades ago and just figured out how to adapt correctly.
Regarding east van where I live now, I went to an open house yesterday on commercial drive that was 1 bedroom for $750k facing west and looking at buildings that have been there at 1 story since maybe the 50s.
The gap is just so enormous, considering we rent a studio basement down the street for $1500 total.
But costs aside, the answer is that the people and things I do in the city are what bring my life substance, and being from the suburbs, it's a deeply isolating sort of existence that relies pretty heavily on having a car. I've personally never aligned with the idea of working remotely and isolating myself further; it would seem to me a recipe for depression.
I love being in nature, isolated and away from the city, at times, but not most of the time. I like leaving my place to walk to the grocery store, the cafe, and along the way being able to bump into people I know by name and ask them how things are going. I like walking to the gym, especially when it's raining (a lot), and having my small community of people there. Incredible food is nearby as well, concert venues, easy access to the airport, none if which I'm indulging in all the time but enough that it really brings flavour into my life.
I also like biking around, and for that there's actually quite a lot better infrastructure for in the city vs out, and it's easier to just get on a bus and go into the wilderness.
The crackhead comment was a bit flippant. I don't have a problem with anyone experiencing addiction, it's just a deep irony I find a little sad, akin to "instead of making it easier to build a life here, we'll just make it easier to fall out the bottom", though I know things are wildly more complex than that.
Lastly, aside from all those reasons, there are theoretically more job opportunities in the city, and that's good for my partner who doesn't work remotely and for me during the periods where there is no programming work.
To me, a good city is the culmination of social systems including capitalism that benefit from having more people around. A greater social circle of people available, more market, more jobs, more culture, better transit systems, art, etc..
Edit: I'd add the the only aspect of living in a city that's busy or particularly loud are automobiles, and to an extent the train. Very little of any generalized chaos is the result of many people ambiently being around, depending I guess on your individual tolerance for that and where specifically you might be. It's never once occurred to me that there are too many people around.
I'd also not necessarily describe it as pain, as much as like some hypothetical existential crisis. I'm not looking to buy a place at this moment, but when I consider the prospect of what happens if our landlords sell (giant house in east van), there aren't too mamy viable options.
Why would you expect to be able to buy a family house/apartment in the best neighberhoods just because you are in the top income percentile? Wealth percentile matters.
I'm also in the top income percentile in Sweden, and I can basically buy 99.9% of all houses/apartments in Sweden, which I think should be enough for most people..
Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen
and of course wealth percentile matters. In fact, I understand that way too well. How do you raise your wealth percentile then? The whole point people are raising is that it's hard to become wealthy in Sweden from income. Actually much harder than in other countries. It might have worked for you in the last 20 or 30 years. Not sure that means it will work for others the same way in the next 30 years.
Come on.. It's the third most expensive district in Sweden.
Also, if you're two 99%ile incomers, Kungsholmen seems perfectly attainable..
How is that possible? I am an immigrant who moved to Sweden at age 22, and I bought an apartment in Malmo after 2 years of savings in the center of Malmo. I wasn't in the top percentile, didn't get help from anyone else. It was entirely my own savings within that 2 years.
Maybe you shouldn't aim for center of Stockholm for your first home purchase...
If you work remotely, as software developers can, you don't have to give up salary either.
I moved to a lower tax country and my income almost doubled (no more 50% Swedish tax). Sweden is a bad deal high earners.
> I'm in the highest percentiles of income in Sweden
Which one is it then? 80th? 90th? 99th? 99.5th?
> It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods.
Which are the "best neighborhoods" in your mind? How many houses/apartments are there in those "best" neighborhoods?
Do you see why these numbers matter if you're trying to learn from this situation rather than just complain and pretend nothing is finite?
So the problem is not "income". It's other sorts of privilegies I don't have.
For example "time in the real estate market pre 2010".
Income != Wealth
Not even Covid and 100% Remote seems to have stopped the trend.
Status symbol? Who cares. For the investment? It doesn't seem like you can afford it, nor need it. Just buy someplace you can afford and make a nice home for your family.
If there is a genuine reason why that neighborhood is the best for you and yours, then ofcourse that is a different matter.
Outside the city center neighborhoods are essentially dorms.
My observation of Stockholm as a tourist is that it is really easy to get around there on a bike, so I don't see the need to live smack in downtown where the price is going to be the highest (especially when you can't afford it).
Equality of outcomes: everyone is equally poor.
Why are you not moving to another country is the question.
And not everyone is equally poor. Sweden has one of the highest number of Billionaires per capita in Europe. In fact wealth inequality (not income inequality) is almost as high as russia.
Source: https://medium.com/@samo.burja/the-family-that-finances-swed...