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Comment by s1artibartfast | Hacker News Reader

Homes are and should always be an investment because they are. They dont have to beat the stock market, but a well maintained home should track inflation at least. They have real and huge replacement costs in materials and labor. If my house burnt down, it would cost $1M to rebuild.

Im all for cheap simple houses for those with less money. However, unless they are so cheap as to be disposable, they too will be investments.

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This is incorrect. If they are an investment then they should go up and down in relation to the value of being able to live wherever the property is. The big issue now is all places (but some more than others) are artificially constraining supply with excessive regulation and restriction on what one can do with their property. We need to largely get rid of that excessive regulation (i.e. much less strict zoning allowing much higher density, with drastically restricted ability of neighbours to interfere with what is built and much quicker turn around time on permits to get building rolling as fast as possible). Doing that will destroy a lot of "value" of houses that are only constrained because of these rules. Other places will go up in value as much higher density is allowed more easily on land in higher demand areas.

What your house would cost to replace is only very tangentially relevant to what its resale value is.

I agree with the first part of what you said, but disagree with your closing comment. I think a lot of people underestimate how significant construction costs are. I planned was infinite and there were no zoning regulations, my home would only give up like a third of its value.

Materials and labor are a huge component of housing prices

if your house is currently a million dollars then dropping in value by a third is roughly the difference between needing 220k a year of income to buy it or 156k a year of income to buy it. it's a 96th percentile income house vs a 92nd percentile income house, which makes it an affordable house to many millions more people.

That being said. I agree that labor and materials are a huge part. However, a large part of the labor and materials cost is itself driven by regulation and should decrease in a less regulated environment (everything from elimination of wasted trades time caused by regulators to it being much easier for startups in 3d printing, factory line production, etc. should drive costs down), Further, elimination of mundane but expensive required details like minimum parking requirements, multiple fire escapes in low rise smaller developments limiting floor plan design (while being unnecessary due to improvements in fire suppression), minimum suite sizes,etc, etc. should drive more right sized development to areas that are currently overheated, pushing prices down.

>if your house is currently a million dollars then dropping in value by a third is roughly the difference between needing 220k a year of income to buy it or 156k a year of income to buy it. it's a 96th percentile income house vs a 92nd percentile income house, which makes it an affordable house to many millions more people.

Another way to put this is it would set house prices back by 3-4 years, which is where I was coming at it from.

I do think there is a lot that should be done on the regulatory front, so that more people can own, and more people in general can have roofs over their head.

I think it is despicable that we as a society have enacted things like minimum unit size while there are homeless people struggling to find housing. I think there should be basically no regulations for owner occupied homes, and the bare minimum safety standards for rentals. IF someone wants to rent a 10x10ft cinderblock cell to live in, they must really be struggling, so why the hell would we want to make things harder for them.

Isn’t “so cheap they are disposable” Japan’s approach to homes?

Only in an exaggerated meme sense. reality is much more complicated.

The average Tokyo apartment size is 390 sqft, while the US average is above 2,000 and climbing.

Americans could have homes 10% the price, but they would mostly refuse to live in them even if they were sold at cost.

Why did you compare home size in a city to home size in a country? Average Japan home size is about 1000 square feet, smaller but not that much smaller.

https://www.statista.com/statistics/1289345/japan-average-si...

Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo.

It is largely a result of tax policy and construction methods between 1960-1990 where it made sense to gut apartments after they depreciated for tax purposes.

In Japan, property tax decreases to zero over time, but resets if you upgrade it. There for people gut and remodel before selling their units so they get the benefit of a higher price, but the buyer pays the taxes.

> Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo.

But then you should compare home size to something comparable, like Tokyo to New York city, not Tokyo to USA.

I Think I provided the appropriate comparisons given the premise:

"Why doesn't American real-estate behave like an exaggerated example of Japanese real-estate?"

The answer is of course that there are significant differences between the two groups being compared.

I think it would be the best if everyone was forced to live in a flat, which size is determined by the number of people living in that Appartement. It is cool for you that your house is valued at 1 million; that proves my point even more. A house shouldn‘t be an Investment, but your education.

good luck with that. I don't think there is a country on the planet with such radical communism. Maybe some locations at the height of the cold war.

I dont think it is cool that my house costs so much to produce, It would be great if it could be produced more cheaply.

>A house shouldn‘t be an Investment, but your education.

What does this mean? did you leave out several words?

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