We wanted ever-increasing returns for shareholders, and that meant moving factories (where these young men's grandfathers were working 60 years ago) overseas while doing nothing on the whole to retrain the workforce.
We got the shareholder returns. Too bad that can't buy a functional society for people born after 1980.
But some can, and can even take up 100 houses... so long as the other villagers are fighting amongst themselves, over whether their house should be larger than that of their neighbor.
Turns out most of their problems are arguably traceable back to those people with 100+ houses each.
Which would be glaringly suspicious to an outside observer. But the villagers are too busy being enraged by the idea that some lazy person might not have to live in a tent.
[1] Not ironic if you don’t think you’re one of the villagers.
Culture is constantly running in the background, teaching us not only what to think, but also how to think. And changing culture is hard.
I know how the real world works and am not fooled by the bread and circus—of course I am! :) And how often do I reveal that in real life? Very rarely because I don’t have any sympaticos in my life right now. But how many people do I know who are like me? And to how many people do I look like an unconscious NPC on this issue?
It’s a limiting perspective because you stay stuck in the mode of bickering among yourselves about who has seen the light and who hasn’t. Instead of the more useful perspective: that a non-insignificant people already know or that if they don’t then it won’t take much to convince them (X years of brainwashing does not take X years to undo).
And what evidence could you provide (say, a description of your methodology, hours of search, resources searched, notes you've taken along the way, etc) can you offer to support your "is no good (how convenient) evidence"?
> It’s a limiting perspective because you stay stuck in the mode of bickering among yourselves about who has seen the light and who hasn’t.
That may seem to be the case, but maybe ~no one has seen the light (perhaps due to a culturally infused unwillingness to try)?
> Instead of the more useful perspective...
You have no way of knowing the utility of either approach. Realizing this (including how to realize it) is highly useful.
> then it won’t take much to convince them (X years of brainwashing does not take X years to undo).
I agree with this, except for the "won’t take much to convince them", as it could be mistaken to mean that finding the method also won't take much. But I will always upvote optimism!
What evidence do I have prepared for random strangers on the Internet who are as disagreeable as me? None!
I will protest bare (uncited, shooting from the hips) “common wisdom” and counter with my own uncited perspective; mine is on the face of it no less wrong!
Why the hell would I just let such misanthropic, holier-than-thou garbage philosophies remain unexamined?!
EDIT: Three sentences in a row with exclamation marks might have been overkill. :smile:
I'm wondering how often it happens organically, and how often it has some conscious help.
>But some can, and can even take up 100 houses...
How much % of the housing supply is actually taken up by people with 100 houses?
Or you can rent that house after the PE firm buys it and rents it out...
https://www.propublica.org/article/when-private-equity-becom...
https://www.thesling.org/are-hedge-funds-and-private-equity-...
That's fine? It's still contributing to the housing supply, it's not like they're hoarding the houses. Moreover unless you want to ban rentals entirely, you're going by definition need people owning more than one house. Finally, the fact that rents are sky-high as well, suggests that housing is expensive in general, not only home ownership.
It's not fine if you're trying to keep a middle class.
https://www.propublica.org/article/yieldstar-rent-increase-r...
I believe the correct response here is "That's wonderful! It lets everyone get in on the benefit of being a slumlord without the hassle of shaking down your tenants. Now you can just buy shares in this instead!"
When homeownership becomes restricted due to PE firms and Investment firms buying up entire communities to turn into rentals, the wealth transfer is hampered. Well-off adults are still having to rent and are now directly competing with younger Americans who are still growing in their careers and pay scale.
This puts older Americans in a tough spot of not being able to generate wealth or equity that can be transferred to their children. And this puts their children and younger Americans in a spot where they cannot afford to live where they work, and cannot afford to save enough to begin the journey to homeownership. And the promise of a wealth windfall when their parents pass is becoming less and less common.
Buying an existing home, so long as it's rented out is yes technically providing housing supply, but it is unhelpful rent seeking.
That big investors would rather buy up existing homes rather than invest in building new ones is a pretty clear sign that the housing system is dysfunctional and requires work on the taxation/regulation side that would encourage more productive use of investor dollars.
Dunno, in my experience all the NIMBYs in my area look like some rich person with way too much time on their hands attending city planning meetings, not some slick lobbyist. If anything the discourse goes both ways, with some alleging that "greedy developers" are the ones doing the lobbying.
To solve housing for those who need housing, enact state level YIMBY policies to override local planning (who will always kowtow to local folks who show up to say no, and local folks who say no because it costs them nothing to do so as they already own), provide cheap money to builders [4], and build as fast as you can.
[1] https://en.wikipedia.org/wiki/History_and_impact_of_institut...
[2] https://zillow.mediaroom.com/2024-06-18-The-U-S-is-now-short...
[3] https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
[4] https://www.startribune.com/janet-yellen-minneapolis-treasur...
(Edit: I would still support restriction of investment ownership of housing, depending on implementation details; you have to defend the young from the old and Capital, as they are treating the young as cattle to be squeezed for all they've got simply by virtue of their existence timeline [5] [6], and it's causing folks to simply give up)
[5] https://www.ted.com/talks/scott_galloway_how_the_us_is_destr...
[6] https://www.youtube.com/watch?v=K64GTDwWJo4
(as always, think in systems)
If every person who came to the US in the past ten years went home, there would be a colossal increase in housing availability and rent prices would crater.
https://www.cnbc.com/2024/06/17/immigrants-help-economy-job-...
All of these major central corporations are completely dependent on illegal labor, and if they hadn't been able to pay lower wages, their takeovers couldn't have occurred at the speed or scale they did. My relation talked about this issue in the DoA and many senior officials pushed back and said that since addressing this issue of illegal labor in the beef industry would cause a rise in beef prices, threatening the availability of the migrant labor base is a no-go. (Biden admin, not that it matters--I'm sure the answer would have been the same under any admin through at least GWB).
That's where we are now, in US agriculture, residential construction, etc.. Prices must be kept low, and therefore the stream of low-skill desperate labor must not be turned off. Massive companies enjoy enduring near-monopolies because no one is willing to threaten the comfort of the American consumer.
I don't have a solution, but I hope smarter people than me with leverage figure it out, because it isn't sustainable.
There's far too much of this happening across all sectors, including government
Maybe more like "business owners are 'addicted' to paying cheaper wages that only immigrants from poor countries are willing to do at the offered rate."
Since we live in a democracy, such a plan would be swiftly reversed because of the pain it would cause.
You cannot convince me that low prices require low wages when companies are raking in record profits. We could have better wages, the same prices and lower profits. That is a sacrifice I would be happy to have businesses make
If all of the job growth is happening in select metro areas around the country, the existing domestic population is going to move into those areas, regardless of the level of immigration
Are you suggesting that 10 years of immigrants going home would be a net positive for the US?
I use the dramatic case of "all immigrants going home" to illustrate that immigration affects the housing crunch and it's ridiculous to talk about it without mentioning the population increase. Personally I think the government should intensely crack down on illegal immigration, destroy business that use illegal labor (even if that's to the detriment of the consumer), and then make legal immigration tuned to attract high-skill immigrants easier.
What do you think about the content of my point?
that's called exploitation
Yes, we often exploit illegal immigrants, but legal immigration is not exploitation.
It's more than that; it's a standard free-rider problem.
If all the other districts in your city support development in their area, then your own property value will go up, but you won't be burdened by any local development costs. And if you develop in your district but nobody else develops in their district, then your property value won't go up (or will go up only slightly) but you're burdened by the local development costs.
It's classic prisoner's dilemma stuff.
The simple solution is to remove the local district's ability to veto local development. At least, as long as city-level/state-level planners don't have an agenda that favors certain districts over others.
That is what state level YIMBY policy is intended to do, to override the free rider problem of existing property owners in the local domain. If the human can say no to any new housing, and it costs be nothing to do so, what is a human going to do when all of their incentives are to say no?
As a YIMBY activist who also owns property, I have seen this first hand at local planning meetings. Rebutting complaints point by point (crime, decreased property value, traffic, etc) with data, we finally arrive at "because I don't like it" typically when having this discussions (happens all the time with utility scale solar permitting as well). I am only one person saying "yes, build, build, build." We need more of this, everywhere, and I argue the solution is not simple; if it was, this would be solved instead of being a herculean effort. Please consider attending local planning meetings to voice your support for building more housing in your communities.
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
This is probably something that democratic states need to address by reducing such empowerment. Much like your neighbor cannot tell you what to cook for dinner - even if he is a vegetarian and hates the smell of meat - he shouldn't be able to tell you not to build a house in his proximity.
Presumptuous indeed. There wouldn't be a housing shortage if vast parts of the U.S. weren't restricted to single family homes. The choice isn't a single family home or a housing complex that can hold a 1,000 people, but more efficient usage of space and infrastructure, one that isn't totally centered around everyone having a vehicle. That can also mean low rise multi-family homes seen in cities worldwide, and yes, also big complexes where viable.
>If it does, then you’re not going to find that many people who own property agree with you.
Well if things don't change, lots of people won't be able to own property, and the rules will change anyway. We're seeing this in California.
That is why no country in the world actually employs limitless democracy. There are usually guaranteed and protected civil rights that you can enjoy regardless of current majoritarian (and fickle) opinion in your town.
There are more systems in the world than absolute monarchy X absolute democracy that votes on everything all the time.
Democracy is not required/irrelevant for that...
My county deregulated housing. Literally no code checks. A permit was me drawing a square on a map, paying a few hundred bucks and it was rubber stamped in a few days.
It was an absolute godsend. I built the house myself for 1/3 the price of even a clapped out trailer.
Sure I could have built a firetrap but I have to live in the fucking house, so I did the best with what I can afford. We all have to live somehow, asking people to do their best they can with what little they have to protect themselves and neighbors should really be the most we can ask. I could never afford a 'real' developer built house anywhere near jobs.
May I ask where in the USA?
I disagree with you but applaud the principle :shrug:
I believe this nationally, but when you see things investors buying 1/3 of Atlanta homes in a given quarter [1] or investors buying 26% of the affordable homes, it becomes hard to believe there is not some level of effect occurring in target population centers. Most of the arguments I see about the small effect of investor purchases seems to focus on national averages (happy to be pointed elsewhere), but I think focusing on national trends will dilute the observed effect where it is occurring.
[1] https://atlantaagentmagazine.com/2022/03/24/investors-purcha...
[2] https://www.redfin.com/news/investor-home-purchases-q4-2023/
“This share rises to 3.8 percent of single-family homes for institutional investors owning over 100 homes, and up to 10 percent in certain metro areas such as Atlanta.”
Then if you also consider foreign ownership of home, it would rise even more. Lots of wealthy folks have dollars due to it being primary international currency and they buy up our assets
Unfortunately this is a big side effect of internet we haven’t solved yet. It’s made buying a home anywhere easier, which inflates prices (demand is much higher now for same number of houses), squeezing out middle class locals
Getting rid of institutional ownership would increase rental prices substantially, and that's bad for the poor and for the mobile.
Extremes are unhelpful, we must find balance. Institutional ownership restrictions reduces monopoly pricing power, and rent controls de-risk against rents rising faster than wages. Outright outlawing of institutional ownership is not a solution, but allowing it to operate in a highly regulated fashion (where there are still some, but more reasonable, returns and mobility is enabled for mobile consumers of this service). If the argument is continue increasing supply vs rent price controls, well, it is clear that isn't happening in the short term.
TLDR Housing needs to be pushed more towards being a regulated utility, vs a free for all. If we regulate electricity like a utility, why not housing?
Regulations are not inherently good nor bad so please say what regulations are bad and what regulations should be changed because “less regulation” doesn’t mean things get better and can mean things get very very much worse (hey let’s allow toxic wast dumps under homes because that was too regulated before!)
The OP wants to reduce the amount of institutional ownership of housing. This will reduce supply of rental units, increasing the cost of rental units.
This statement and citation fail to account for the impact of AirBnB and other STR market-makers on the housing market.
I strongly suspect a big part of housing price increases is the "small business" equivalent of institutional investors - someone buys 1-2 units that they do not plan to occupy and rent them as STRs. Similarly, vacation homes (aka homes that will go unused for the vast majority of the time) are now much, much more affordable if you can book a couple rentals a month to supplement a mortgage.
I'm *sure* AirBnb has some fascinating data on this, but I don't expect to ever see it in the public eye without government intervention (much as we'll likely never see Meta's studies on teen users' mental health).
tl;dr - but what about her airbnbs
This does not pass the smell test to me. Small businesses somehow are more inventivized to do this than institutional investors? Because the margins are not sufficient to attract the large businesses?? That needs evidence.
In general, small landlords don't make sense to me as something to ban.
Someone buys a two flat, lives in one and rents the other to help pay for the mortgage. That has classically been ok. You're only objecting to the short term ones?
Yes. When Joe is buying a couple homes, he doesn't have to pay for HR, business dev, legal, compliance, etc etc. And -
> That needs evidence.
Fair enough! I care about this topic, but not enough about this thread to make a carefully cited case here (no offense to you, friend). I'm sharing from anecdotes and personal (albeit unscientific) research.
> Someone buys a two flat, lives in one and rents the other to help pay for the mortgage. That has classically been ok. You're only objecting to the short term ones?
Yep, and I've come around on this. I used to think landlord = bad (in college, we're all young and naive at some point), but I've come around to the real economic need for an LTR market. I'm thinking of cases where an individual buys up a handful of properties to use as STRs, removing them from the LTR market (which reduces supply which increases rates of the remaining units). I have seen this happen in my area in real time but I recognize that it is scientifically unsound to extrapolate that to other areas.
This means immigration policies must be explicitly tied to housing policy if you don’t want to screw over your poor.
You also need to align housing policy to demographic changes such as family size, length of time that children remain living with parents, relatives or carers, as well as prevalence of work from home, availability of “local” work within affordable commute range, availability of public transport.
In other words, “planning for the future”.
The neo-liberal project destroyed more than western industries, it bankrupted our perception that there are more than just market incentives that can build healthier, happier, more resilient and, yes, wealthier societies.
You need SHIMBY policies, social housing in my back yard.
Source this is happening?
>Why lock in a loss or low profit (and, in doing so, hurt the value of your other holdings)?
Because you have to pay upkeep on those units so they don't fall apart, and repay the bonds you raised to build those luxury condos in the first place?
Here is a conservative think-tank using its existence as the premise for arguing against rent control: https://www.aei.org/op-eds/want-to-end-apartment-warehousing...
>Because you have to pay upkeep on those units so they don't fall apart, and repay the bonds you raised to build those luxury condos in the first place?
If you raise rates on the buyers that do exist, you can cover these expenses.
Your claim:
"Not if the investors are willing to warehouse units to keep prices high, rather than lower prices in order to sell."
Their claim:
"If it costs more to maintain a unit — and keep it in compliance with housing codes — than rental income justifies, it only makes sense to padlock it.
In other words, an anti-warehousing law would force owners to lose money every month — or rent a substandard unit at the risk of being in violation of housing laws."
Those aren't exactly the same thing. You're talking about developers/owners refusing to sell a luxury condo, whereas the "conservative think-tank" is talking about landlord refusing to rent a unit below his costs. Besides the difference between selling a unit vs renting it out, there's a huge gap in the middle between "minimum cost to the landlord of having a tenant" and "whatever the market rate for rent is". Even if we assume whatever the "conservative think-tank" said is true, it doesn't apply above that lower bound.
>If you raise rates on the buyers that do exist, you can cover these expenses.
Are you talking about renters or buyers? Your usage of "rates" imply that you're talking about renting, but "buyers" implies you're talking about buying.
As for the difference between renting and selling, luxury and non-luxury, apparently "supply is supply", so it doesn't matter in the aggregate. The details kind of don't matter, because at market scale, some factor should make "move it or lose it" on empty units the norm. Homes are to live in; if you're not filling them with people who are living in them, something has failed, socioeconomically. It used to be a matter of taking a lower profit in the interests of community stability and vibrancy (which a local landlord or seller would want; many aren't local), but now that everything is hyper-efficient, perhaps the cost of holding unproductive property isn't high enough.
The actual solution to housing price inflation is a full correction that wipes out the inflated value of housing in this country, cutting each property's worth back down to its intrinsic value. Affordability and use would reset to what the real market actually can sustain, as when the income tax forced wealthy property owners to divest of and demolish or convert their grand mansions into apartments for people to actually live in.
There is no housing shortage (Zillow has an obvious conflict-of-interest). There is no need to load even more money into the system by providing cheap money to builders (a naked corporate giveaway that will surely represent yet another wealth transfer from taxpayers to business-owners). Pop the bubble. Planning considerations can follow, once land and property values actually reflect their intrinsic worth. If you do it before that, you throw billions of dollars worth of resources and labor into misbegotten initiatives that do no good for the communities that they're supposed to serve (e.g., highway expansion).
[1] https://www.fanniemae.com/research-and-insights/perspectives...
[2] https://www.federalreserve.gov/econres/feds/files/2020044pap...
> The actual solution to housing price inflation is a full correction that wipes out the inflated value of housing in this country, cutting each property's worth back down to its intrinsic value. Affordability and use would reset to what the real market actually can sustain, as when the income tax forced wealthy property owners to divest of and demolish or convert their grand mansions into apartments for people to actually live in.
Your thesis is not grounded in reality, and will never occur due to how durable the economy is (preventing mortgage defaults) due to structural demographics as well as how much equity exists in housing in the aggregate (~$17T as of this comment), preventing a correction from MBS investment failures. As long as demand outstrips supply, no correction will occur, as owners and sellers can outlast buyers. There is no bubble, housing is what housing is worth based on limited supply. The market can sustain this as long as people are willing to buy at the prices on offer, and if demand diminishes (unlikely due to population growth, household formation, and immigration), prices will slowly deflate over years as sellers organize themselves in time series by motivation. Gotta live somewhere.
"We are selling to willing buyers at the current fair market price."
Note, an affordable housing shortage, not a housing shortage. In other words, there are not enough suitable houses on the market at affordable price points, not an absolute shortage of housing. This does not need new builds to remedy, in full; transfer or rehabilitation of underutilized housing would be a major component of a solution. A major and full correction incentivizes owners and investors to sell-at-loss or walk away from unsustainable ownership of housing that then becomes available as affordable units. Affordable unit count must increase with the basic affordability of units.
>as owners and sellers can outlast buyers.
That's a big assumption to make. Unfortunately for owners, their housing values are tied to other parts of the economy that are not as resilient, and vulnerable to developments that are already well underway. For example, the commercial real estate market is going to correct, if not collapse. This is a certainty. Admittedly, the timeline has been shifted back, but through tactics that, ironically, reveal the fundamental weakness of the market. These are foundational holdings that support - as collateral, as capital - the positions of the entities who themselves support residential property values with their activities.
You should also look for the rental market cartel to be broken soon. The RealPage lawsuits will dismantle the unlawful pricing power property managers have wielded. That will increase competition and affordability. Hopefully attacks on unfair pricing schemes ("specials" that amount to lowered rents that only apply for the first year) follow, further increasing affordability.
>There is no bubble
I'm just highlighting this so that others can see how disconnected your argument is from reality.
>"We are selling to willing buyers at the current fair market price."
Now you're just taking the piss. I'll bite the bait. We're both aware of the context of that quote and how it refers to grossly unethical, quasi-legal actions taken by a desperate entity on the precipice of biting the curb for their financial hubris and malfeasance. I don't know that you want to be taking that affect? It would mean that your stance is one that's in grave jeopardy if people figure out what you're doing before you can lie and cheat your way to safety.
The sociopathic villager who went to the village's communal trees, and took way more apples than they can ever eat, while others don't have enough apples to eat, should be tossed into the lake.
But the sociopathic villager tells stories in the village square, of how those villagers who are starving are lazy, and trying to eat apples without working to gather them.
A village elder starts to say they saw the sociopath going and taking the apples under the cover of darkness, and that's why some people are starving.
But the sociopath quietly welcomes the elder into the fold of those who have cellars full of more apples than they can eat. Then apple hoarding is suddenly the noble way of the ancestors, according to the elder. And, hey, look over there, at those lazy people over there trying to eat apples while working only a half day! Hate those greedy freeloaders, over there!
The housing crisis is one example, but I'm not talking about which parties have literally 100 houses in real society (nor want to get diverted with "just let developers make more money, by building more, and stop looking at any other factors of the problem"). I'm talking about essentials, greed, and corruption more generally.
There was another man in the village who never planted a tree or picked an apple. Instead he sat in his house filled with envy and resentment at the apple farmer, and made up a bunch of ridiculous stories about how the apple farmer was stealing from everyone else. And so he found all of the other villagers he could sway, and inspired envy in their hearts. And the envy and resentment and hatred grew and grew until one night, they went to the orchard and burned down all the apple trees and the man’s house while he and his family slept inside. And then they all celebrated their crime.
Of course, when no one else in the village ever planted an apple orchard ever again, there were murmurs of complaint. The town baker couldn’t bake his famous apple pies the next fall, but he knew better to complain because he didn’t want the envious mob showing up at his bakery in the middle of the night. So he kept quiet.
The housing crisis is one example, but I’m not talking about which parties have obstructed the creation of wealth in real society. I’m talking about essentials, envy and corruption more generally.
So is the gist of your analogy that, in reality, the problem of what might appear to be greed, is actually strictly envy, by the people who don't merit the wealth?
And when you made the envious people outright psychotically homicidal, was that for a bit of levity? Or do you feel that strongly that irrational envy underlies real world complaints that people might have about inequity?
More like realism. Read a history book sometime.
The main difference between your parable and mine is that yours assumes a zero-sum world in which there is a fixed number of apples that are grown and the only question is how to divide them. In reality, that’s not how it works. In reality, wealth can be created. A greedy person is a problem if he takes things away from other people, but if he does productive work that creates more wealth for the world, even we allow him to keep much of that wealth for himself, the rest of us are still better off with him around than without. Conversely, if we destroy him or his ability to create wealth out of a shortsighted envy because we falsely believe in a zero-sum world, we also ultimately impoverish ourselves out of spite.
Even your own parable ends up proving my point. Your parable is essentially the “tragedy of the commons”, and the point of the tragedy of the commons is that when productive assets (like apple trees) are commonly owned, the individual incentives go against the common good and also the stewardship of the asset. Conversely, if the orchard is private property, the owner’s incentives instead favor both of these things. This is why virtually all productive agricultural land is privately owned and worked for profit, and if you look back at those same history books I mentioned earlier, most attempts to abolish private ownership of farmlands—most of which were ideologically motivated by various rationalizations for envy—have resulted in lower food production and often outright famine.
The only problem is housing. Any discussion not focused 100% on housing is not grounded in reality.
source: https://www.economist.com/img/b/608/739/90/media-assets/imag...
Anyone looking at this chart can see the asterisk in it - adjusted by household size
This is not a per capita income chart. It even says it is not in the chart.
More of Generation Z lives at home in their 20s than baby boomers, so the income of their household is higher.
They can't afford a house or even rent, and live with their parents, meaning a richer household, and are said to be richer.
This was discussed (elsewhere) three months ago when this Economist article came out.
>Subsequent references in this paper to couple incomes always refer to the income of the individual alone if single, and the equal-split income of the individual and their spouse if married.
https://www.federalreserve.gov/econres/feds/files/2024007pap...
I think wealth should be measured by how many hours at the median wage do you need to achieve a socially acceptable standard of living. Unfortunately, our standards have gone up and there are things that are now necessities that weren't before.
>I think wealth should be measured by how many hours at the median wage do you need to achieve a socially acceptable standard of living.
That's a weird definition of "wealth". Wealth is generally understood to mean how much assets you have accumulated, not your free cash flow. What you're describing is properly referred to as discretionary income.
https://en.wikipedia.org/wiki/Disposable_income#Discretionar...
I think most people would naturally define wealth by the kind of life and lifestyle the wealth can afford.
Who cares how much actual money it is if it can't actually afford a decent life.
...by accountants.
"Wealth" as used by most people is related to quality of life. It even shows up in the phrase "house poor" where maybe someone has great net assets but cannot live comfortable life due to the drain of the house. Wealth is not money.
Therefore, wealth is money.
---
No, life is the combination of carbon and other things, so wealth is the combination of money and other things. It's the combination and interaction with other things that is important and focussing just on money is missing the forest for the trees.
A borrowed dollar spends just as well as a saved or earned one, which is why many confuse spending with wealth.
There's a lot more to it than how many beans you have in the bank.
If you're trying to imply that wealth = number in your bank account and 10x inflation makes you 10x wealthier, that's a massive misunderstanding of what "how much assets you have accumulated". Even though it wasn't explicitly stated, it's generally understood that the assets are valued in some meaningful way (eg. CPI or GDP deflator), rather than just looking at the raw numbers in your bank account.
Just use the definitions of words that are in the dictionary and widely agreed upon, so that conversations with other people can be meaningful. If you want to talk about how cost of living is high, or how it's not high but people think it's high because (insert your reason), just use the words we all use and let's talk about that.
1. Education
2. Housing
Both have been increasing at a rate faster than inflation for some time now. While Gen Z may have a greater income, their major expenses are even greater. When all is said and done, they're poorer as a result. Turns out that simply having money is insufficient to solving all financial problems.
It doesn't matter how cheap iPads and gasoline are - as long as the five persist, life is an anxiety-inducing gauntlet of financial trials-by-fire for most people.
Gen-Z is also owning homes at a greater rate than Millennials were at the same age: https://www.economist.com/finance-and-economics/2024/04/16/g...
> Bolstered by high incomes, American Zoomers’ home-ownership rates are higher than millennials’ at the same age
Per capita? Not at all. What source says that?
More of Generation Z lives with their parents than previous generations, often because they can't afford housing, or even rent, high college debt etc. They live with their parents, and thus in households with higher income, so only in that sense are they "rich" - the household income is higher than if they could afford their own house.
Per capita real income higher? No. What source claims that?
Every time someone says this, if there is a source, this always come back to them living with parents and household income being higher. Not per capita.
I guess this is the progress of new-speak? We've had a decade of people saying "oh, people are so rich today that they don't want to have children". Now it's "oh, people are so rich today that they don't want to have homes". In a few years it will be "oh, people are so rich today that they don't want to eat food or have medical care".
They don’t care about a functional society or other people. Their kids are off in Bali this week, Nice the next.
According to https://ourworldindata.org/grapher/number-of-births-per-year the highest number of births was 146.05 million in 2012.
(But the total number of births per year fell throughout the 1990s ... mainly because of the birth rate falling in China? ... before rising to that global maximum in 2012.)
It's a historical milestone and I'm surprised there's so little awareness of it.
There will most likely never be this many people born in a year ever and we crossed this point without much fanfare.
Personally I think the predictions are overblown - as they assume that the generation "peak" will have 90% the children their parents had. Fertility rates in countries like Niger and Nigeria are already dropping at a faster rate than that and it's these places where the most people are currently born.
The thing is, if more of the value produced by labor was directed back towards labor instead of equities, you're going to see far fewer people asking "how is this sustainable?", because they're on the gravy train too, but the equities holders have now gotten so used to being the special kid in the class that they can't fathom not trying to keep labor costs as low as possible.
https://en.m.wikipedia.org/wiki/Illusory_truth_effect
In our culture, someone bringing logic to the table is likely to get crushed by someone bringing a good story.
And to make the situation even funnier: most anyone could tell you story after story about this phenomenon! It reminds me of:
https://slatestarcodex.com/2014/07/30/meditations-on-moloch/
https://slatestarcodex.com/2015/04/21/universal-love-said-th...
(Ironically, this too is a story, lol...perhaps no other way existing is part of the problem?)
The real problem I see is when people use wealth generated from intangibles to put the squeeze on physical resources, such as buying up land as an investment to drive up the price when people need a place to live.
No this isn’t accurate. No one values IP for its own sake; it is still responsible for generating revenue and being translated into profit. The process by which this happens is still resource extraction (raw materials into chips, energy into processors, etc etc etc).
And you are really only talking about tech. Every other industry has the same demand for infinite growth and can’t hide behind an IP abstraction layer.
Is it, though?
The biggest IP bubble now is AI, and the main bottleneck of AI is energy to power those datacenters. Doesn't google use as much energy as a few small countries now?
Biggest pharma IP now is Ozempic, which let's be honest here, is because westerners are addicted to processed corn and fried stuff. And hectares of monoculture corn sprayed with Roundup and sprinkled with just the right amount of laboratory-calibrated satiating salt is far easier to produce than a balanced diet. And what is needed to grow all that corn, soy, and alfafa feed? The tapped-out Colorado or the dwindling Ogallala...
I'm sure there are a couple of pure IP-value plays out there, but look deep enough and most everything is tied back to food, fuel, or the finite ability of the ecosystem to maintain infinitely-exponential growth.
Calories per hectare is one way of measuring food systems, and a great way when we assume fuel inputs are infinite, inexhaustible, and cheap. Calories per unit of inputs is another way.
Hybridization of crop plants increased the calories per hectare per year produced. Again, I don't know if the plants were actually producing more edible nutrients per pound of fertilizer.
Doesn't Ozempic make people eat less? If anything it's disproving your point. It's providing value, but at the same reducing the amount of "food and fuel" consumed.
This has been done for a while and mostly doesn't work.
Also, it's very hard to make something work which huge monied interests design products in a manner to ensure you fail. Are you just going to ask your grocery store to stop putting salt-fat-sugar in bright packages right by the checkout, packages and foods that are being developed by well paid groups to get you to consume as much as possible.
It's also very hard when your body is designed to do one thing. Consume as many calories as possible so you don't starve to death, because your genes are screaming at you "Starvation is coming, it always does".
So the only 'cool' statement is yours by completely not understanding the situation at all.
America was on-average wealthier than most of the world and an early adopter of highly palatable convenience foods, so its obesity problem came on earlier. Global obesity rates are rising as more people globally can afford microwave ovens, frozen pizzas, drive-through restaurants serving french fries, and other such aids for high speed ingestion of delicious, calorie-dense foods.
Most people who need to lose weight cannot willfully maintain diet alterations in the long term. They go back to old habits. For 99.9% of human existence starvation was a much more common health threat than obesity and we're just not "wired" to experience excess food intake as a threat. The GLP-1 drugs like semaglutide reduce the desire to overeat, regardless of how palatable the food is, so people who could not lose weight before are able to eat less without having to consciously suppress desire every day.
Man, i wish Americans were just eating the corn with salt. Would be a lot healthier than corn starch+syrup whatever.
~75% of US corn goes to fuel and animal feed.
It is no different from traders hunting buffalo to extinction. They got their money, consequences be damned.
Increased productivity is maybe the goal - but how it's measured is up for discussion. If you do it in dollars, then do you adjust for inflation? If you do, what inflation? (inflation on the price of bread or super-yachts etc).
Or do you do it in value? What can you get for your work? In the 1990s a "machine in your pocket that can play any music ever recorded" would have been near-impossible/priceless. 25 years later it costs maybe a dollar a day and we can all have it. If we can always get the same stuff for an ever-decreasing amount of effort, then that could be seen as exponential growth. You could argue that you could measure growth by technological advancement.
Conversely if your rent is going up 10% a year, then who cares that you're 5% more productive and making 5% more money every year. That doesn't feel like growth.
Unless you're not renting and you're the landlord and then you're experiencing sweet sweet growth.
Because entropy. When a living organism stops its exponential cell division, we call that death. In an economy, when things cease to grow, we call it recession. When that growth is in balance with the decay, we call it a healthy economy. When it outstrips it, we call that inflation, which the monetary system is designed to fight against.
Sure they do. Your cells are dying and being replaced constantly. Cancer is just when the instructions for said division get messed up, i.e. runaway inflation in this analogy.
Human attention is absolutely not a finite resource. Or at least companies haven’t come close to monetizing all of it.
The recent problems is the disconnect between money and actual food/materials/energy production.
If your grandfather lived in a 100kw village with a 100 dollars circulating, and made 1 dollar, it is reasonable to think he could buy 1kW for his family.
If we live in a 100kw village (because no, we should reduce energy production) with 100,000 dollars circulating and you make 500, you can buy 500w.
Now do it for turkeys, or steel, or etc... Degrowth is impoverishment in most cases. Things haven't gotten much more productive, and we are more people
1) Ephemeralization [https://en.m.wikipedia.org/wiki/Ephemeralization] is when we arrange a given set of atoms in increasingly useful ways, letting us get the same thing done with less.
A trivial example is information distribution. Another one is how we turned sand into thinking machines. Myriad more examples exist.
2) We have vastly more resources than people think. Our deepest mines are ~5km. There’s a hell of a lot of planet below that, with increasing % valuable metals. There’s enough room on the planet - you can give everyone on earth a big house with a yard and we’ll all fit into a single Canadian province, or into Texas. We can generate 100% of our power needs with solar, nuclear, and batteries. And as we get richer, there are more and more people with the time and ability to make greener choices.
Our systems are proving to be flexible - look at the price of solar + battery over time; look at the deluge of funding for nuclear research. People are working on bio jet fuel. Other people are working on carbon capture tech and geo-engineering ideas for the worst case scenario.
3). We’re not stuck down here. There’s a whole universe out there. A tiny but growing % of our economy happens off-planet. A private company recently landed on the moon. SpaceX is dramatically lowering launch costs. In a few decades, we’ll be mining materials up there and manufacturing goods in space.
And ever-decreasing prices for consumers. Don’t forget that!
Free trade results in more goods for everyone, by enabling different places to focus on what they do best.
> while doing nothing on the whole to retrain the workforce.
I completely agree that some more attention needs to be paid to retraining. The answer to disappearing jobs is to prepare folks for new ones, not to artificially preserve the old ones. One has to be careful, though, not to distort the market for retraining itself.
Except that's not happening for major purchases. Housing is more expensive than ever. Education is more expensive than ever. Healthcare is more expensive than ever. Cars and Trucks are more expensive than ever.
Besides taxes, the above are the biggest slice of the consumer's wallet, and those prices have almost never decreased. Shareholder returns keep going up, up, and up though.
But I lived through the 1980s and let me tell you, in many ways consumer goods are better and cheaper than ever before. It was just normal and expected that cars would have holes rust in them, and sunroofs that would leak. A home computer was an exotic rarity, and a monitor with a 15" viewable area was considered big. There was an entire industry dedicated to renting TVs, not just because of the high upfront cost but also because they often broke down, and the rental company would provide the repair or replacement.
Housing, education and healthcare are to a very great extent to amenable to globalisation, since houses have to be built on a local plot of land, education is for most folks done in-country and healthcare too is delivered locally. Not that all three, too, are subject to massive amounts of subsidies.
> Cars and Trucks are more expensive than ever.
A Henry J in 1950 was $1,299 (according to https://www.gobankingrates.com/saving-money/car/heres-much-c...), or $16,934 in 2024 dollars; a Nissan Versa is $17,820 today. While more expensive, that doesn’t seem crazy, just 5.23% more — and of course that Versa is a much better car.
This is more of a hope than a reality. The trickle down economics logic. “We promise it’ll be good.”
https://www.census.gov/library/stories/2023/07/younger-house... has some nice statistics.
On one income, I owned my first house in 1994 for $425/mo and next in 2001 for about 2x that. Hurricanes hit elsewhere in 05 & 07 (last here 1921) & I lost the 2nd when my (mandated) insurance doubled my monthly house payment.
By 2021 we could minimally survive on 1.5 incomes (did 1). Today it's 3.5 incomes (have 4).
35-44: 62% 45-54: 70% 55-64: 75% 65+: 79%
> The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate.
https://en.m.wikipedia.org/wiki/Homeownership_in_the_United_...
If you have one person living on their own in a house they own, and four people renting bedrooms in a shared house, the home ownership rate is 50% despite only 20% (1 of the 5) of the people being home owners.
If the home owner then rents out one of their bedrooms to someone expanding the population between the two houses from 5 to 6, then home ownership rate is still 50% but now it's 16.6% (1 in 6) of people who own a home.
And declining.
Homeowner vs. renter statistics reflect a decline in homeownership
Correction, most people have been able to afford a home in the past in the US.
Homes used to be affordable, now they aren’t.
https://www.forbes.com/sites/katherinehamilton/2023/04/21/ge...
> Roughly 30% of 25-year-olds in 2022—the oldest of the Gen Z (born between 1997 to 2013)—owned their home in 2022, a slightly higher percentage than the 28% of Millennials (born between 1981 to 1996) who owned homes at that age and the 27% of Gen Xers (born between 1965 and 1980)—but lower than the rate for Baby Boomers (born between 1946 and 1964), 32% of whom owned homes at age 25.
If anything, such numbers indicate to me that homeownership rates haven't meaningfully changed and the only thing that did change is the advent of noisey narratives.
Isn't it in fact the opposite? The bigger population, the easier to find a significant signal? Those are variances of millions of people. We wouldn't treat a 5% swing in unemployment as a rounding error, would we?
If unemployment keeps hovering around 29% +/-3% over basically a century, that variance is a rounding error.
“rounding error” isn’t typically used to describe double-digit percentage changes. You might say within normal variation but it’s a significant change and, ignoring the fact that those numbers are much greater than the actual unemployment rate, it’s well over the measurement precision and real shifts of millions of people are going to be scrutinized.
What? We're talking about a 5 percentage points variance, that is a single digit percentage point change. This is regarding a 29 percentage points average over a span of like 80 years concerning millions if not billions of people.
That is a rounding error, whether it's home ownership or unemployment or whatever you want those numbers to be.
At the moment, that’s a change of 16 million people. A century ago, it was 5 million people. Both of those numbers are large enough that they absolutely would get attention and public discussion.
If something trends give or take 30% for 80 years or more, a +/-3% variance is a fucking rounding error. I don't care if it's home ownership or unemployment or whatever the number is, it is a rounding error not worthy of concern.
It's like the lowering and rising of the tides. It goes up and down, but the sea level remains basically the same overall; thus, nobody cares about the exact tide at an exact time for figuring out sea level because it's a rounding error.
Put more bluntly: The trend has not changed, what is there worthy of my concern?
The other thing is remembering that cost of living varies significantly. Even 25yo FAANG engineers struggle in San Francisco but there are other parts of the country where someone with middle class income can buy if they live modestly and are thinking along the lines of a basic condo in a non-luxury neighborhood.
More people are in more significant debt bondage than in the past, that’s not an improvement.
The proportion of owned outright homes has been declining in the western world for 30 years.
So long as you make your payments on time, the lienholder cannot confiscate your property to make the pie whole. The money might be theirs, but the property is yours.
I'd rather take all the extra money I save by renting and invest it in other assets. I also value my time and I don't want to have to do all the chores and upkeep a house needs. Sure I could pay someone to do all those things I suppose, but then it makes renting even that much cheaper.
Owning a house used to be a goal of almost everyone? But I wonder if like me younger generations don't even have an interest in buying a house and maybe that also affects the homeowner rate.
But I mean stuff like mowing the lawn, shoveling the snow, cleaning out the gutters, and various other repairs and such that happen over time. That is what I mean by I value my time, and those things can take a considerable amount of time.
Also my rent is only ~$1000 per month for a 2-bedroom. It would cost me like 3x that for a basic house in mortgage plus property tax plus utilities plus maintenance etc. Sure a house is much larger space, but I don't really need all that space... And I don't find any smaller homes really. Property taxes alone would be like 1/3 to 1/2 my rent...
Your $1000 per month rent can only be compared with the interest part of a mortgage you'd get for the exact same housing you are paying rent for. If the rent is less than the interest would be, then yes, you are better off renting. You also have to be able to invest any money that would have gone to a mortgage to make more than the price of your rent in profit every month, because that is your loss each month on rent. It is achievable if you're shrewd and can stay cold headed. Compounding effects help you, but you're also vulnerable to rent hikes. If you stay for more than a few years with the same landlord, they will catch on to that you have a stable situation and are saving/investing, and they won't be able to sleep at night thinking about all that juicy income that you're saving and investing, that could belong to them.
I've shoveled snow and cleaned gutters, even put on a new coat of paint a few times. It is not worth paying somebody $1000 per month for that. That's a salary for somebody working 50% of full time just taking care of maintenance on the unit you're renting. You're also comparing renting a smaller place vs buying a bigger house. That's also part of the problem. Landlords have hogged all of the apartments and smaller housing in order to extract the lifeblood of young workers, when such units would also be available for sale and not rent in a healthy environment.
"Your $1000 per month rent can only be compared with the interest part of a mortgage you'd get for the exact same housing you are paying rent for. If the rent is less than the interest would be, then yes, you are better off renting."
Why just the mortgage interest? Why not the property taxes, the utilities, the repair costs, the time to perform the upkeep and maintenance (which for me has a monetary value).
I have been renting where I am at for 14 years now and there have been no crazy rent hikes.
It was ~800/mo 14 years ago and has climbed slowly to ~1000/mo currently.
I have looked many times at buying a home in my area, but there is nothing in a similar area, and a nice house that I would actually want to own for less than about 2000/mo for a mortgage (probably more like 2500/mo now). That doesn't even count property taxes which would be like another 500/mo.
Then, if I value my time, I would need to pay someone to do the mowing and shoveling and other maintenance beyond that...
It's way more expensive than renting.
With renting I'm paying about $12,000 a year and that's it. That includes water and heat too and me not having to spend any time or money on upkeep or maintenance.
With all the money I save, I do multi-family real-estate investing and development. That generates me a passive income plus huge deductions from asset and property depreciation. And when the property is improved and sold after several years nets a large gain which I move into a new property thus not having to pay taxes on that transaction either. The return on this is far greater than the average rate of a home appreciation minus mortgage interest.
What rationalization are we supposed to have for self-worth when robots and AGI do all of "our" labor?
This entire society is melting down so that a handful of billionaires can have and do whatever they dream of, the rest of us are supposed to do what exactly?
We're supposed to find meaning and worth in the scraps that are left?
edit downvotes without rebuttals are equal to "shut up and keep working"
At this point the main economic improvement in my life will probably come when I inherit my paren't house. Career, work, that is all uncertain to build a life upon, so I will just rent and downshift.
https://www.forbes.com/sites/katherinehamilton/2023/04/21/ge...
Right now today, and for the past decade, the reality is that two employees doing the same work for the same company for the same pay can have totally different living standards. For one of the employees, maybe half or more of his salary goes to rent, what's left after living expenses he tries to save for a down payment. For the other of the employees, his full time job is not even his main source of income. His main source of income is his home increasing in value every year by more than what he makes from working. He keeps all of his salary after tax, because he doesn't pay rent. Maybe a small fraction of his income goes to pay for the last scraps of an ancient mortgage on his home.
For the business employing these two people, it is the same. They pay the same salary, get the same output from their employees. They can't do anything about outside factors if they want to treat their workers fairly. This is also why they think "young people don't want to work" and such.
The industrial (or post-industrial if you want to call it that) economy is built around labour. That is completely gone by now. Young people growing up knows that working is for complete suckers and that a person has made some major fuck up in their life if their income depends on working.
or, rather, the risk financial institutions are willing to take in order to, again, transfer value to shareholders in an ever-increasing manner.
There are plenty of Americans that own homes and are struggling to make ends meet elsewhere.
Home ownership is set up to consume a person. Miss a payment and there are serious repercussions to one's financial well being, so it becomes a priority.
Up to a point, miss a credit card payment and it's extra fees. Miss a utility bill a month, and it's the same. Buy less food and you'll survive, albeit less comfortably.
They need to downgrade then. Not everyone needs to live in 5 bed mcmansion. I know ppl who bought 100k cars are 'struggling to make ends meet'.
Seven of us were living in a 3/3 - when I could no longer afford the monthly payments that doubled via insurance increases. What would you have us downgrade to?
> Not everyone needs to live in 5 bed mcmansion.
This seems like a unproductive assumption and one unlikely to be the rule. Why introduce it into the conversation?
But what I see sounds mostly as FOMO and emotional decisions. Having home ain't some basic human right but a luxury, where I come from (central Europe) it was like that for hundreds of years. All generations living in 1 tiny basic house was the default, inheritance with many kids was very tricky and thus often cousins were forced to marry. Maybe there was some period in US where things were significantly cheaper, but what were the reasons? Maybe US wasn't so full of people. Maybe poor blue collar construction workers were squeezed much more harshly so that things were done cheaper. Also, construction got (at least in Europe) massively more complex and thus expensive due to regulations, materials etc. There can be 10,000 other reasons. But it seems otherwise smart folks here are mostly looking for first target to blame.
Cheap housing is a pipe dream in strongly capitalistic society like US. I know everybody not having it wishes for it dearly, at least until the moment they cross the fence to home ownership and then suddenly want to see their biggest investment appreciate sky high. Seems like human nature, me first and then the rest (I am not an exception, but then again stuff above doesn't make me lose sleep, life has way more important qualities than hoarding wealth at other's expense).