Inflated rents, high interest and lack of supply create European housing crisis
france24.com
france24.com
Repeat that for three years and it's the basically this part from TFA:
> Nearly 900,000 people sleep rough or stay in homeless accommodation every night in the EU
Maybe, just maybe, that the EU should stop trying to absorb ever more people year after year because, obviously, there's an ongoing housing crisis and that there's simply no room at the moment to house all these people?
P.S: if I can add something to my already depressing comment... A huge number of the houses and apartments in the EU are way too big and way too old and people don't even have enough money to fix these so that they'd consume less energy. When the prices of natural gaz and electricity skyrocketed I had people around me with yearly bills raise of 4 000 EUR, 5 000 EUR and even one 7 000 EUR year-on-year. These are insane amounts for middle-class europeans. So the issue is not just "not enough housing" in the EU. It's also "way too old and way too energy-hungry housing which cannot be fixed anytime soon".
This is so obviously contrary to experience and common sense I'd characterize it as delusional.
But we all know that building more highways creates more congestion because of induced demand. I suspect housing also experiences induced demand. At the same time, you could be right that if you build housing for 10 times the need, then you would reduce the demand for housing. Just like if you built highways 10 times bigger, we would not have congestion.
Can’t beat demand and supply dynamics with fairy dust.
Note that Ursula Von der Leyen (president of the European Commission) recently said the EU would "tone down immigration" or something like that: but she only said it because the far-right political parties are the big winners of this SNAFU.
Also when you build more housing, you have to be careful about the solution you're offering too: in France for example absolutely horrible buildings, communist style (big concrete blocks making the individual feel like not an individual and no nature), have been built on the outskirts of Paris (the "HLM") and these depressing places became no-go zones where even cops don't dare to go anymore.
So it's not sufficient to "build gigantic buildings and put all the poor people in there": you have to find a balance with nature, a mix between social classes, etc. or you'll only reproduce the worst of the worst failure France managed to create.
Housing was shit show even before the war. Blaming things on immigrants is poor taste and bad logic.
A country ought to first serve its citizens before citizens of another country. Analogous to you’d first take care of your own kids before aiding others.
Yes Ukraine is in a war and one should help, but you should help yourself first so you can help others.
We tackle difficult problems simultaneously, not in sequence.
Screaming at refugees is a diversion, especially since they rarely compete in the normal housing market in most countries.
The obvious thing to do with the Ukrainian refugees was to put them to work retrofitting insulation. But it's better to keep everyone impoverished and cold, in the minds of politicians.
When I lived in smaller urban apartments, I tended to the monastic. I gave up hobbies and stop making things. the larger the living space, there is more room my life for hobbies, makerism, romantic partners and pets. I suspect I'm not the only one. My experience leads me to believe that in your living space, is gotta be enough room for each person to have their own space that contains their clutter and can have some space from their partner without leaving the house.
I literally do not understand why after all these years humanity has not yet worked out a system where every person would own a small house each, and instead we have this system that makes it super difficult for so many people to ever become homeowners.
Downplaying the killing fields or the Holodomor as invented by the media or landlords is incredibly offensive.
Are you downplaying every genocide that took place in a capitalist country? You denied a historic genocide that killed my ancestors. You think you're offended?
Well, I'm not. How can I be offended? You're a basic product of your environment. Youre told that genocides that happen under communist systems are de facto communist genocides. Obvioualy. And genocides that happen under capitalist systems happen for, well, entirely different reasons. Obviously.
Realistically though, when pol pot, Stalin and Hitler went on extermination binges to kill enemies (real or imagined) their reasons were much the same... the maintenance of their power.
Sorry I mean giving people houses and not charging rent - the two most evil things you could ever do.
No. You explicitly advocated for Communism, not "free houses". A social structure that actively grinds human rights into dust. You don't get the play the "communists just want to give people free houses" card without admitting to being hopelessly naive or actively malicious.
Stop carrying water for history's greatest monsters.
a) any of those countries were actually meaningfully "communist", and not merely authoritarian countries calling themselves so, and
b) if they were "communist", that this was actually in any significant way causal in the failures?
Learning by experience <> programming.
Ford Model T cost $260 in 1925 ($4561 in current USD). But today's cars are closer to $40k.
Things don't need to be so expensive, it's not all inflation - it's scope creep and bloat.
I don't think people necessarily want to go back to the 1900s and share a ten square meter apartment with a 3-generation family, and then die in a fire because that's too many people to evacuate out of one door.
What is overkill is parking. When I was looking at buying apartments, each car park cost $80,000 AUD.
> Most people would probably prefer to live in a cheap shack,
Correlates with:
> if it was available and not in a crime-ridden area
In a system where economic advantages agglomerate in a few areas, it would be difficult to create a place that is neither losing to the agglomerating areas, nor is declining itself.
If it is an area where the economy is booming, then it will not be cheap. And if it is not an area that is moving upward, then it is moving downward, and with that comes a host of issues that can cause crime to proliferate.
> Ford Model T cost $260 in 1925 ($4561 in current USD). But today's cars are closer to $40k.
Far more capable and safer vehicles than a ford model T are available for far less than $40k. $20k cars are available, and while not quantifiably true, I think it is easy to say the $20k car of today is easily more than 4x capable and able to provide utility than a $4.5k model T.
Consumers never have full knowledge of the quality level of whatever they're purchasing, much less in something like a house that is not standard and has to be adapted to the place it's built in.
At least with a law setting minimums, if you're lucky, you can sue if it doesn't meet them.
You could easily describe a moderate house you desire to an architect, hire a GC and have a house built to code for $75k-$150k if it weren't for permits, zoning and regulations.
This. Europeans voted for this situation, hard, like really, really hard, for years on end. They did everything they could to ensure sky-high property prices. Now they have it. I'm not entirely sure that I see the problem.
How so? What specific voting behaviour did directly lead to increasing housing prices?
Many places have extremely specific rules about building housing. You need 'X' ft around the outside of your house which means lots must be massive to have a house on them. So you require that people need to purchase a large amount of dead space to add character to the home.
We also don't retroactively apply building codes to houses. So you have a house that would cost $500k to replace due to building code, but it doesn't meet code. But you can still sell it for nearly that price because the alternative is the $500k new house. If people were forced to follow building codes in as-built buildings they would be much less likely to press all costs on to other people.
it is dead space if it's just a lawn.
Turns out most people don't like the system and prefer living in the city where all those things are available but what is not available is houses for everyone.
Like it would require countries like the US redirecting a substantial portion of their industrial output towards building homes in sub-saharan Africa.
If you really want to just own a small house it can be very affordable. It's just that it won't be a desirable place to live and there won't be many good jobs close to it.
The problem is "everyone" wants to live in big cities, preferably in the nice neighbourhoods and within a reasonable commuting distance of their job.
Part of what makes a neighbourhood "nice" is that it's not affordable for the lower classes.
You'll get public debt to pay, poverty and the climate crisis to deal with.
The social contract is broken. No wonder violence is on the rise.
Guess this generations didn't really do the math, it seems they think they'll be dead soon.
I’m a renter, and don’t have any plans to get into real estate market. That being said, I feel bad for people just getting out of college and looking for an apartment. If you’re not in a rent controlled unit, it’s a clown show everywhere.
(Contrast this with autocracies, often associated with minorities like the Iraqi Shiites oppressing majorities like Iraqi Sunnis under Saddam's regime.)
Certain aspects of the us government were put together to help counteract this, but yeah I agree to some extent. Maybe at some point the majority will be renters.
It’s interesting to compare housing to automobile prices, because recently both seem to be in a bit of a bubble (and I say this as someone working in the auto industry). Easier to import cars from overseas though if the US dollar stays strong.
Yes, that's why I am able to say it with such confidence. :-) Although they were put in place to protect a specific minority (landowners with a high social standing in the colonies) and work by promoting the interests of those with well-established networks. Until now progressive reform has largely undone that over time, leading to more democracy.
For me, taxes. As housing prices rise the taxes I pay increase making it more and more expensive to keep my home.
I wouldn't mind if my house never appreciated in value or even lost a little, so long as it kept its place in the rest of the market. So long as I'm not underwater on my mortgage and it's still about the same value comparatively when I eventually need to move, I don't necessarily want it to go up.
Is that true? Aside from certain areas that have a luxury tax, property taxes do not in general rise with average property values, because the coty budget is the independent variable, not the percentage. This means that cities with high property values actually become a lower-tax place to park a $10 million property investment.
For the most part, property taxes are not a fixed percentage the way that, say, sales taxes are. The rate floats, and that is important.
Property taxes generally go to the municipality, which sets its budget based on its planned expenses (sewers, road maintenance, etc). The city decides it needs, say, $100 million for the next year, and let's say all of it will be paid for by property taxes.
Then they calculate the total appraised value of all of the property in the city. Let's say that's $100 billion.
From that budget and that sum, they derive a property-tax percentage for this year: 0.1%. Now if your property is worth $1 million, you have to pay $1000.
Because your property tax rate is 0.1% and your property is worth $1 million, you might expect that if your property doubles in value to $2 million, your property tax will double. This is true if your property appreciates while the total value of the city property remains $100 billion.
But most likely, if your property value has doubled, it's due to macroeconomic or region-wide trends that have caused everybody else's property value to double. Thus the total property value is now $200 billion, so your property tax rate drops to 0.05% to meet the city budget, and you still pay $1000.
This makes sense, because your tax should not increase unless the city budget also increases.
If your tax has increased, the culprit is your city budget; property values are irrelevant, because they only determine how the tax burden is divided up, not how much there is.
If property values were much lower, the tax rate as a percentage would be much higher, and that's generally the case. Municipalities offering similar services, but where properties are more affordable, will have higher property tax rates. Therefore, if you need to invest $10 million in property for whatever reason, you'll pay a lower tax rate on that $10 million in an area where property values are high relative to the municipal budget, than in an area where property values are low relative to the municipal budget, even though the latter will probably buy you more total property.
Maybe this is common in Canada, but it's definitely not common around where I live. Tax rates stay somewhat fixed, property values go up and down. Every now and then a county or city government will lower the rate when they're flush wish cash, but it's not a given. For the most part every time my property value increases I'll be paying more.
And as mentioned, some governments have already passed tax relief in the form of cutting some rates. But not after getting a few years of these windfall tax rates. I don't completely mind; I think the city I live in has some pretty good city services overall. I get a lot of enjoyment from the public parks, library, bike trails, and more. I just lament the fact this is probably just an additional cost that'll keep marching along going higher and higher outpacing inflation overall.
https://www.texastribune.org/2023/07/27/texas-property-tax-c...
Sure my house increased in value more than the tax increases I'm currently paying, but its largely value I don't actually see and won't end up touching for a long, long time. I can't actually realize those gains until I effectively downsize the house. which is at least 20 years or so out. And who knows what my neighborhood's desirability will look like in 20 years, maybe it won't even keep up with housing inflation.
To me, day to day its just some number that keeps shooting higher and higher costing me more and more every year.
We changed how we computed valuation to charge for land more and what is built on the land less, so my property taxes have actually been going down for the last few years (since I have a town house built on a small plot of land...so my share of the budget is shrinking).
Oh well, let’s see what happens in the next few years.
If governments could make living in areas where lots of living space is available attractive, we would not need new houses.
Perhaps it's easier to make it legal to build more housing in desirable areas instead of convincing millions of people to live in small, deserted villages with no jobs
And with so much remote work available today, why do you need there to be a job there waiting for you? Just bring your job with you.
> If governments could make living in areas where lots of living space is available attractive, we would not need new houses.
Yes, it requires jobs, services thus infrastructures thus $$$ or €€€ in that case. It also require changes in corporate culture, as corporations are trying to crack down on work from home as we speak. When it comes to education, as well, instead of making students move to Paris or Rome to study, encourage remote education when possible.
There are technological solutions to these problems, certainly.
I see suggestions to build more housing through taller buildings, but without any incentive to do that from people who care, what policies will realistically get passed to change anything?
expanding this:
Not complaining but it is unfair to increase your population not organically, forbidding new constructions and expecting this "just works".
What happens is both sides are squeezed in inflation and have lower quality of life and the govt. reaps higher taxes.
Then same govt says you are evil for pointing out this?
Edit:
People are pointing out the asylum or refugee. That is not what I am talking about. Talking about cities having an influx. Like Austin or others cities where a large flux of people migrates.
Please don't remove population movement from the equation only because it may affect some narrative
Demand side has multiple parts:
- National population growth (migration, as fertility rate below replacement)
- Money supply inflation (government spending, mortgage borrowing, years of artificially low interest rates) allowing people to bid up prices
- Urbanization (office jobs and universities); people within the country move to the big cities
- Social atomization (more housing needed per person)
(EDIT: Ageing population too: children tend not to have their own place)
I.e., we'd probably still have a housing crisis in Europe even if not a single foreigner came in.
What happens is both sides are squeezed in inflation and have lower quality of life and the govt. reaps higher taxes.
Then same govt says you are evil for pointing out this?
I keep seeing this argument pop up all the time online and in person, but it's never really made sense to me. Population growth in most European countries is lower now than at many periods in the past, yet we were able to house rising populations somehow.
Do people think cities like Berlin and Paris just got plopped down fully formed at some distant point in the past, together with instructions reading "Population: 3 million max., never exceed or add anything"? They and their infrastructure have grown over time as the population has grown. There's no magic maximum population limit that every city in the western world has just happened to hit right in the last 20 years.
For those curious about what "overcrowding rate" means here, I assume it's this definition from Eurostat: https://ec.europa.eu/eurostat/statistics-explained/index.php...
It's not entirely clear to me if this is intended to be the sum of the criteria, but even if it is, I suspect people taking a survey are not going to be able to parse that correctly.
Also not defined: Whether bathrooms are considered "rooms" for this purpose.
Assuming bathrooms are not considered separate rooms, it seems the only way to be overcrowded is if you have people sleeping in common areas, or more than 1 to a bedroom if not a couple (2 to a bedroom is fine for couples, 12-17 year olds of the same gender, or children under 12).
I live in a city where the housing situation is quite dire and I still don't anyone between ages 18-29 living in such conditions. Lots of people do live in very tight spaces though (less than 75 square feet to a bedroom, with very little common area space) which to me seems like it should be considered overcrowded, but the definition given would consider this fine, whereas two unpartnered adults sharing a 600 square foot studio with a divider would be considered overcrowded
Force every fucking politician to share their house with victims. Maybe then they'll wake up and do something.
In western europe.
Having said that, raising interest rates means prices will go down but still be expensive for the average joe.
Large "investors" on the other hand are making a killing. If you have cash buy now. As soon as the interest rate madness ends prices will skyrocket and you'll make a killing.
I would say housing crisis real in Poland too. It's very expensive relatively to income there.
[0]: "Healthy" being a shorthand for "compatible with our[1] current economic system".
[1]: Basically the entire world.
The good news is that if every policy is currently at "increase prices", any change will result in a decrease. Surely we must be approaching the peak now, what other things could they possibly do to restrict supply / increase demand?
(I guess the climate goals leave a lot of freedom to continue tweaking)
Plus, every time we're forced to move we end up making a lot of trash and burn a lot of fuel moving things.
Unless they are moving in the millions it'll barely make a dent. There have been reports coming in from countries such as portugal stating that "nomads" are driving housing costs up, but those are the exception - if anything it helps the economy of that country.