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Comment by scoofy | Hacker News Reader

I mean the problem with this argument is this: nobody in the affected areas who owns property is actually middle or lower class.

Homeowners in areas where housing is totally unaffordable area either extremely wealthy, by definition, because of their property ownership, or they're wealthy enough to pay a mortgage on an absurdly expensive property.

Where housing-as-good-investment is successful is really only in areas where shortages exist. You're not going to harm the middle class folks in Tracy by fixing the housing crisis in San Francisco.

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OK, assume some old lady currently owns a house if SF that would cost $1M to buy. She bought it, say, 50 years ago, say, for $50k. It's an impressive 20x ROI, no doubt.

But does it make this old lady wealthy, if she is not selling her house and moving to Arkansas, where $1M would go much farther than in SF? May it be that she's struggling with her day-to-day expenses in SF?

Wouldn’t the argument then be that it shouldn’t matter to her if her house goes down a bit in value since it wasn’t liquid wealth anyways?

So it’s a win-win in a way - either you’re rich enough to pay the mortgage on an expensive property in which case lowering property values in expensive locations is a bit redistributive or it won’t affect you really in which case who cares?

Net worth calculators[^1] would put this woman at the 88th percentile of wealth in the US. Yes, I think that counts as wealthy.

I obviously think it's mostly absurd if you think a woman who bought 50 years ago in SF has a house worth only 50K. The vast majority of houses in SF that would have cost 50K, 50 years ago. The average home in 1976 was $65K,[^2] and the median home price last year in SF was $1.4M, at effectively the 90th percentile of American net worth. If you don't think top 10% of wealth in America counts as wealthy, then I don't know what to tell you.

[^1]: https://dqydj.com/net-worth-percentile-calculator/

[^2]: https://imgur.com/1976-article-on-housing-prices-sf-bay-area...

>extremely wealthy, by definition, because of their property ownership

That's not true today and probably has never been true

Homes today in SF are worth about $1.5M. That's a non-trivial net worth when you actually look at American net worth by percentile.

I agree it's non-trivial wealth. But it is not a passive asset. Unlike most forms of wealth a) you pay taxes on it and b) it requires constant upkeep as nature is trying to destroy your wealth.

$1.5 m would classify you as extremely wealthy 100 years ago but today it would require an order of magnitude more to be in that class.

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