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Comment by monknomo | Hacker News Reader

I think the root of many problems is housing costs

I'm somewhere around your age, and I also wonder what the future of software development work looks like. I don't know that I'd direct my kids towards the field; maybe this is just a temporary bumpy patch and it'll improve, but it is hard to say.

One thing I think is that being 40-50 or so means that there is plenty of runway for a second career. Could retrain for something, nursing, cpa, lawyer, trades? Just have to have the savings for making that transition

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My thoughts are similar, but I think the cost of commercial space is also driving costs up for everyone, so I classify it as "rent." I'd love to see data, but small businesses (at least in certain sectors) seem bare able to survive--opening and closing constantly.

But, to get to a root cause, I think we have to keep asking why. Why are rents high? One reason is that cities seem unwilling to rezone. Okay, why is city council/the mayor unwilling to rezone (sometimes vast swaths of single family homes?) Voters? Corruption? Something else?

There are several root causes we can potentially drill further down to, but making headway will likely require hard work and involvement in our communities. You could always try running for something and becoming a politician.

Yes, I think we need to reform zoning and build like crazy. With everything costing a million dollars on the west coast, I don't see why there isn't a crane every block putting up a new building

Other than NIMBYs, zoning and code

I really think we could have a boom

> Okay, why is city council/the mayor unwilling to rezone (sometimes vast swaths of single family homes?) Voters? Corruption? Something else?

The council and the mayor of Exampletown are elected by the residents of Exampletown.

The people who've been forced out of Exampletown by the high rents? And those who'd like to live there, but can't afford to? They don't get a vote.

My point is: when looking for the "root cause" of these problems, people shouldn't stop asking when they get to the rent being high, that's a symptom.

Additionally, if people care about helping younger generations, it's within reach to jump in and help shape the communities they'll be living in. E.g. If an issue is zoning, go to zoning meetings.

Housing costs are both created by NIMBY and The Rich gobbling assets both Residential _AND_ Commercials.

Here's the thing: if housing cost goes up but wage goes up as well (wage is controlled by the Rich), then things will be fine.

But things aren't fine because Wage gets depressed, everywhere.

The problem isn't as much that wages are depressed as "The Rich" is the average person in the older generation that bought housing when an appropriate amount was being built, then lessened the amount of housing so that there's not enough for future generations.

Class analysis must account for the strongest political class being real-estate asset holders that don't set wages but do benefit from a shortage of that real-estate asset.

The rich that I refer here is Funds, REITs, or small group of Investors. All of them are financed by the Rich.

> then lessened the amount of housing so that there's not enough for future generations.

NIMBY definitely another issue but that house is still there and got bought by someone (person/entity) richer than the average.

Large capital is not controlling the housing supply, though. That's entirely done at the local level by the petit bourgeois, which are the NIMBYs. You can read their investment filings which openly state this, even. Or go to any local government meeting.

> "The Rich" is the average person in the older generation that bought housing when an appropriate amount was being built

That's one of the fallacies here, thinking that upper middle class is "The Rich". If you think of it as a whole, you will see that the current trajectory means that the overall amount of property that the middle class owns collectively can only go down. Any house that was bought for dime by the older generation but cannot be retained by the following will drop out of the middle class. And it's not going to be spread among the poor but goes up to those who can still afford it: the actual rich.

Thus the middle class slowly but surely bleeds out and all landownership will remain with the super rich. The older middle class is just a temporary place for assets. Once they have gone the situation I layed out will become more and more obvious.

> And it's not going to be spread among the poor but goes up to those who can still afford it: the actual rich

Which will be the children of the older generation of the middle class.

Lack of housing supply is fueling huge economic inequality that wasn't there before.

The situation you layout is not very clear to me, specifically what is meant by "super rich." How do the older middle class lose out and not become "the rich," specifically?

I think the best description of what I'm talking about is the book The Asset Economy by Adkins et al.

The older middle class have assets that they acquired when those assets cost a fraction of the new price. The older middle class die and try to leave it to their heirs. If asset prices are higher than what a middle class income can afford, the middle class can only own property if they have inherited it. No new property is going to be owned by the middle class as a whole.

There are plenty of ways, however, that property leaves the middle class. If your inheritance tax or property tax (both a percentage of the inflated asset "value"), e.g., exceeds what a middle class income can manage, the property will be sold. If you have used it for a loan to, e.g., start a business and you become ill or your plan fails, you might have to sell it.

Who is going to buy these properties? If a middle class income can't afford property prices anymore, who is left? The middle class can only afford those houses by swapping their property for it.

Therefore, the overall amount of properties owned by the middle class can only shrink. It baffles me that this isn't obvious to everyone.

Now, who is "The Rich" in this scenario?

Those of the middle class who own property will do so because they inherited it, not because they were able to afford it through their income. They might be able to swap it for another property and hope not to make a loss. Their income is still middle class, however. They can't use those inflated property values unless they sell which leaves them without said property.

The rich are those who have enough income to increase their portfolio of assets despite of inflated prices, solely to park their money somewhere. Those aren't your middle class mom and pop who bought a house in the 80s and then a flat in the 90s. And the rich are also not the ones who inherit that house or flat but still earn a middle class income.

There will be a sharp divide between the middle class that was lucky enough to inherit land and the middle class that wasn't so lucky. Reading comments like yours makes me believe that there will be a lot of finger pointing towards the lucky ones. Because those are the ones you can see. The ones who are inflating housing prices by their demand to park their vast amounts of money stay invisible. The ones that will be attacked are the upper middle class, just to pull them down. Like crabs in a bucket.

I think we agree, though I find your use of the term "class" very confusing. The ones who bought cheap are already rich in these high-demand low-supply parts of the country.

The fingers must pointed exactly at the ones who are keeping prices high by suppressing housing supply, namely the rich homeowners who still consider themselves "middle class" or even "working class" despite owning assets that none in the working class or middle class could ever afford. These are the rich people who are controlling the local policy that changes their social class. It is not REITs or bankers, it is the very folks with large assets who work to keep their prices sky high by keeping housing optkons limited.

This is absolutely not anything like crabs in a bucket, with people with less pulling down those who succeed. It is in fact the exact opposite, those with housing assets who work to prevent any more housing from being built have put people into the pot by making the game a finite sum with limited housing.

Unaffordable housing comes from inadequate supply, which comes from older generations not permitting enough housing to be built in the high-demand areas.

Where I come from, you do not become a millionaire by working an average job. If you don't happen to be at a C level position, you will never become millionaire level rich by working for other people. If you have a middle class income, it means you have no more than middle class maneuverability. It isn't enough to become a multi millionaire under your own power. You have to start your own company or repeatedly make very good investments to really move up.

Owning something that suddenly has an inflated value does not necessarily make you rich.

Let's say you own a car. You need that car (maybe to take care of a relative). You can afford your car with your middle class income. Over night it gets replaced by a golden car worth 1 million dollars. If it's the only golden car, you are rich. You can sell the golden car and replace it with a reasonably priced one and still have about a million dollars.

But it's different if in the same night all cars become golden cars, including every car leaving the factory. Even 20 year old cars in dire need of repair have become golden one million dollar affairs. Now you're not rich. You can only exchange your golden car for another golden car.

If you sell your car and use the money for anything else, you will never in your entire life own a car again, because your income just can't provide for it.

That's how people stay middle class with a middle class income even though the house they live in suddenly is worth a million. It's about maneuverability.

> Unaffordable housing comes from inadequate supply, which comes from older generations not permitting enough housing to be built in the high-demand areas.

Unaffordable housing has to do with demand and supply, yes. What many people overlook is that not all demand stems from people wanting to live somewhere.

Land ownership has become an attractive way to park money the last 15 years. And there is a lot of money that needs parking. The last burst of a housing bubble caused one of the biggest ways to park money - lending to other people - to shrink dramatically (mixing subprime loans as a marketable bundle turned out to be a bad idea). Interest rates went down, making it even less attractive. The money now gets put into an equally inflated stock market, some of it into Silicon Valley style venture capital bets, and another huge chunk into real estate. So there are a lot of very rich and influential people who would lose a lot of money if those house prices would start to fall.

And even if you would meet the demand of those people who just want a place to live, you will not satisfy the demand for investments.

The children of older generation will have even bigger mortgage, limiting their economy movement.

This is what an eroding middle class looks like.

https://news.ycombinator.com/item?id=42795925

Building more housing won't solve the problem if the demand continue to outpace the supply plus price is sticky.

Nobody wants to build more house if they knew the next project yield less income.

Totally agree about housing costs. After 10 years of paying high rent in the UK I've returned to Dublin.

Currently paying €1,300 per month for a tiny studio. (I'm told I'm lucky) So hard to build up savings.

The average price for a home in Dublin is now €600,000 according to our central statistics office. Unbelievable.

(The average annual salary in Ireland is €50,000)

On the software side - I'm not sure I'd recommend CS as such, but I know plenty of software engineers that have some alternative kind of technical background and enough CS classes or self-taught knowledge that they were able to be successful. Like physics, electrical engineering. Disciplines like Aerospace eng or Biomedical eng have great systems engineering backgrounds and often CS coverage too.

I'd make a recommendation to hedge one's bets even if they wanted to go into software to see if they wanted thought an adjacent field with transferable skills would be a good fit and offer multiple opportunity paths.

> I think the root of many problems is housing costs

for us, family of 4, it's 1) housing, 2) healthcare (unless you're lucky enough to have a really good employer-sponsored plan that covers dependents or allows them to buy in at employee-negotiated rates, which I don't), 3) education (college for the kids, and the high cost of anything besides public school, I don't mean private schools but even just summer camps etc.)

I look to the future and have a lot of anxiety about how my kids are going to make it

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