New US homeownership measure puts people first
minneapolisfed.org
minneapolisfed.org
But you are absolutely correct you cannot both want housing to be a good investment (increase in value faster than inflation) and an affordable (drop in price lower than inflation).
Don’t subsidize demand. Allow more supply. Private homeowners, big developers, all of the above. Build.
But you shouldn’t have to make a leveraged loan-backed investment in a single asset class in order to afford shelter.
The problem isn’t ’housing is an investment’, it’s that people are long not on ‘housing’ but on their own single specific house. That’s a horrendously undiversified portfolio.
It should not be a good investment - it should, over time, boil down to below inflation once you take maintenance and taxes into consideration.
Meanwhile economic stratification continues and the other side finds it increasingly difficult to make the down payment.
If you could avoid a $700 car payment and still get to school/job/grocery store on time, a lot of Americans would.
But if you can't, and you are paying $700 anyways, why not at least use the fact that you're paying $700/month to travel anywhere and get a bigger parcel of land all to yourself? There's a big incentive to have single-family homes for rent as long as that math is true.
And if you can live in a dense area and get around OK, but paying $700/month saves you from $800/month in private school payments, then the math might still make renting SFH better even if the transit is there.
[1]: https://qz.com/average-car-payment-by-state#average-car-paym... [2]: https://www.lendingtree.com/auto/debt-statistics/
By applying a tax to a _thing_ that someone owns, you are saying 'actually, this thing you have is mine, and if you don't pay me for the privilege of having it, I will take it away from you'.
The cost to develop the land needs to justify the development. If I spent $500k to build a house on the land, I would like to be able to use that house for as long as the house exists (or I sell it to re-coop the investment).
Many people are really bad at saving properly, but they will pay their mortgage. Landownership enables at least some old people to have a cushion in retirement.
It is possible to protect those two uses you mentioned, and other reasonable uses of land, without at the same time spending state resources in enforcing perpetual, absolute, hereditary, exclusive titles on plots of land.
Bailey: The state owns all land!
I acknowledge that I'm indulging in equivocation by saying 'assessing taxes from property is essentially paying rent to the state'. I assert that the equivocation is valid because the outcomes of not paying rent and not paying property taxes is the same: you get evicted.
This ignores the Constitution and the acknowledgement of 'inalienable rights'.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, [...]
> If you could naively own your property then you could just tell the tax collectors to fuck off, what are they going to do with your property if it had been truly yours?
Yes. This is where the second and fourth amendments to the constitution are important. True sovereignty (not in the sense of that 'sovereign citizen' nonsense) comes with martial ability; that is, the right to take another life. Sovereignty is necessarily paired with 'power', as without it, there isn't any true ability to protect one's rights.
---
All that said, I'm appealing to an ideal when I say 'property tax is theft'.
Also, how theft would be even possible if property rights had been unalienable? If someone stole from you and you retained your property rights you could just keep enjoying your property and exclude the thief from your property as the right entitles you.
> I imagine you wanted to say "ignores the Declaration of Independence", which you quoted?
Correct.
> Sure, if you believe that this declaration endowed you with the unalienable property rights then just go ahead and don't pay the property tax, what is going to happen if your property rights are truly unalienable, right?
I'm not advocating for breaking laws, regulations, or rules of the nation I live in.
> Also, how theft would be even possible if property rights had been unalienable? If someone stole from you and you retained your property rights you could just keep enjoying your property and exclude the thief from your property as the right entitles you.
This is less about the pragmatics of 'possession' and its intricacies (the old adage 'possession is 9/10s of the law' is relevant here), and more about the policies of the governments that rule, and ultimately that answer to the people they rule.
If I am advocating for anything, it is change in laws and the appropriate limits on government to limit the levying of taxes on possessed things. In this case, land.
What if we change the laws to remove or limit those property rights?
> This is less about the pragmatics of 'possession' and its intricacies (the old adage 'possession is 9/10s of the law' is relevant here), and more about the policies of the governments that rule, and ultimately that answer to the people they rule.
What if most of those people want to reduce the property rights of a small wealthy minority?
I've had annual property taxes as low as $1/acre.
That's a good point, and it's why I qualified my statement by saying under a certain income. You say high density as if it's a bad thing.
As a high density resident, I would like to capture all of the pros of having a smaller foot print, since there is nothing insulating me from the negatives.
My neighbor in Seattle only needed 5 homes to convince the gas company to dig up our road and install a gas line down our street. There is no way the gas company had the money for that purely on the revenue they may collect from those 5 homes...
It should be super expensive to own more than one house. This by the way is what China did where Xi Jinping famous said "houses are for living, not for speculation" [1] as he quietly popped the real estate bubble a decade ago.
Increasing house prices are just enriching the already rich and stealing from the next generation. Nothing more. Houses should depreciate in value. They should not be an asset class.
[1]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...
We have a lot of building going on where I am. It's all for $500k homes. Nobody builds cheap one or two bedroom homes on tiny plots of land because the target consumer is more constrained and therefore far less profitable.
So much of the problems in the US right now is that capitalism optimizes for maximum profit, not any profit. It isn't sufficient in the US business culture to run a business that merely employs a bunch of people and produces things, because in the US, the "business" exists to be an asset class for the extremely wealthy.
So if the free market has no interest in serving people with less money than god, what do we do then?
I don't know why people believe there is a regulatory impediment to building a home outside of a city core. My dad is a contractor and he serves pretty much exclusively rich (gay) tech bros who fled california to increase our cost of living here in maine because nobody else can pay what they pay. His clients that don't fit that mold all inherited a good mid sized business or are well connected families. He does this instead of the plan he had a decade ago to refurbish or build about 10 new homes on a specific plot because it's literally twice as profitable at 1/100th the effort. Instead of working himself into an early grave, he can work 25 hours a week and live as upper middle class with his $100k pickup truck that is owned by his business.
The statistic that doesn't compute for me is how is it possible that we're having a housing crisis while at the same time we have historically low average number of people per house.
I'd like to see the actual statistics method used to calculate that. Saying it's marriages alone just doesn't past the smell test for me. Just because people aren't married doesn't mean they don't live together and the number of unmarried people living together is higher than ever. What makes far more sense is the number of children people have has fallen off a cliff which drastically drops the number of live at home adult children.
It's basically this graph. In 60's almost nobody was living alone (less than 400k people). In 2024 about 3,3 million people live alone. When you look at the infographic, ages 30-60 add up to like 1,2 million people.
https://www.volkshuisvestingnederland.nl/onderwerpen/aanpak-...
Here we have an estimation that the country is missing like 400k houses. So if two-thirds of those 1,2 million married each other and started living together, they would nicely plug the housing crisis by freeing 400k houses.
Either way, we have a huge societal change that lots of people live alone, which did not use to be the case.
In the US, back in the 1960s you could own a home, a car, and support a family all on a single income. If we got back to that home ownership would skyrocket.
I disagree with the Ultra-YIMBYs who believe in removing all zoning and regulation. If you do that, you get Houston. Because that's what Houston is. What we need is to prioritize living over investment returns in housing. Part of this (IMHO) is to have expansive social housing like Vienna to compete private land use "honest". Also, we should really not allow rich enclaves. There should be social housing in every ZIP code.
[1]: https://worksinprogress.co/issue/the-housing-theory-of-every...
exactly. it has been shown elsewhere that one problem that makes it difficult for people to escape poverty is that everyone around them is poor too. as long as you live there there is an invisible ceiling in how much you can improve your life as an individual/family. people who were able to move to a better neighborhood found it much easier to improve. mixed housing avoids that poor neighborhood trap.
the same btw, is true for the integration of immigrants.
- Majority of people own their homes. So it’s in their best interest for the housing prices at the very least not go down.
- Less, but still, some amount of people are buying houses with sky high prices. After a huge purchase, they will also do their best to ensure prices don’t go down.
- Another good chunk of people are waiting out to inherit homes from their parents.
All these people, in one way or another, will protect asset prices (e.g. voting for certain people to ensure nothing gets built). The only ways I can see it being resolved is:
- China-style benevolent dictatoresque commitment to surgical detachment of housing prices from the general economy (they’re trying, a lot of people are unhappy, but some progress is visible)
- Population collapse, to reduce the demand. But looking at Japan, metro areas will keep skyrocketing, because people will flock to the main cities even more
Any of the options will make a lot of people unhappy. A huge political no-go zone.
All the talks about allowing construction and streamlining the process have been circulated for a decade+ at this point. But incentives for people aren’t there. “I got mine, don’t care about you” is the general attitude of majority of people.
People are generally selfish and will want the best for themselves and their loved ones.
I sympathize with this take because it's the one I had, until I saw the data. On top of genuinely appealing to the fact it wasn't perfect UBI - which doesn't make it an invalid take just because you pre-emptively pointed it out - our inflation during COVID-era relief was overwhelmingly from abuse of PPP loan applications and payouts, disaster relief funds - and a healthy chunk to the federal subsidizing of state/local governments [1]:
"Congress has obligated approximately $5 trillion in response to the COVID pandemic although significant portions of this money remain unspent. For reference, in fiscal 2020, the total state spending for all 50 states was $2.28 trillion, or less than half of the pandemic relief spending. Of the obligated relief funds, approximately $1.8 trillion went to individuals and families through $844 billion in stimulus check payments and $666 billion in enhanced unemployment compensation.
Additionally, businesses received approximately $1.7 trillion, much of which came from the $835 billion Paycheck Protection Program (PPP) and $349 billion Economic Injury Disaster Loan (EIDL) Program. State and local governments received $745 billion, the health care industry received approximately $482 billion, and other remaining industries received approximately $288 billion."
To add, there's also the case that one of the industries most hurt from COVID, which was automobile sales, was impacted by the stimulus checks - but by less than 20% [2]:
"Despite this substantial demand response, fiscal transfers account for less than 20% of the surge in auto prices"
1 - https://www.taf.org/covid-19-relief-funds-two-years-later-wh...
I agree most owners are incentivized to have their leveraged ROIC be high. So they put pretty strong pressure against supply increases.
Defectors (other neighborhoods, cities, regions, states) and other living options might tank actual long term ROIC of supply constrained places. The economics eventually stop working in the supply constrained place as the real cost of housing production is significantly lower elsewhere.
If you claim that people "don't want to work" for those wages, then isn't immigration keeping our wages down?
Wouldn't business owners pay more for labor if there wasn't a stead supply of under the table illegal immigrants doing it for less?
> Wouldn't business owners pay more for labor if there wasn't a stead supply of under the table illegal immigrants doing it for less?
Maybe, or maybe they just employ less people and less things get built.
> Maybe, or maybe they just employ less people and less things get built.
The foreign born population residing in the US fell from ~15% to ~5% from 1920-1970. It was one of the most prosperous and productive periods in human history.
We can only employ natives if we want, we just have to accept that prices of things that are currently run on immigrant labor will go up, and a lot less of it will be produced. Personally I am unwilling to make that tradeoff but obviously you dont have to agree. US labor market suffers seriously from baumol's cost disease, only solution to that is immigration with the understanding that immigrants will take unwanted jobs in exchange for a better life for their kids.
Immigration is what made America great.
> Two economists are walking in a forest when they Come across a pile of shit.
> The first economist says to the other "Ill pay you $100 to eat that pile of shit." The second economist takes the $100 and eats the pile of shit.
> They continue walking until they come across a second pile of shit. The second economist turns to the first and says "l pay you $100 to eat that pile of shit." The first economist takes the $100 and eats a pile of shit.
> Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. can't help but feel like we both just ate shit for nothing." "That's not true", responded the second economist. "We increased the GDP by $200!"
Lawyer: “Can a foreign citizen donate to a U.S. campaign?”
Judge: “No.”
Lawyer: “What if we put millions of them into a multinational corporation first?”
Judge: “Now you’re speaking constitutional law.”
I would much prefer Americans pay a premium for skilled American labor and choose to live in more modestly-sized homes.
The main issue is mismanaged regulation, as always. Real estate is probably one of the best examples of that. For example, in my city of Portland, OR, it's easier to keep an existing structure and not build new housing than to build new housing (because then you can do things by right). To build new housing, you have to hire a company called 'faster permits' (seriously, that's what it is called, look it up) which promises to 'expedite' the process of having things approved. If you, like me, are skeptical of engaging in investments in which you have to bribe your government to approve housing, then you won't put your money into building housing. Portland is probably not alone in these sketchy arrangements, which is why real estate developers often seem sleezy -- due to how the government manages itself, only the sleeziest people are willing to engage at all.
That’s not specific to a land value tax, the same thing can happen with traditional property taxes when the property is re-assessed.
California tried to “solve” exactly that scenario with Prop 13 limiting how much the assessed value of property can increase without a change in ownership and it’s been a disaster (and a contributing factor to the housing crisis, albeit far from the only one).
It got me thinking that maybe the home ownership, or having a place you can call yours, disproportionately affects people's sense of content and wellbeing. Also, doesn't help that laws and government policy heavily favor home owners (perhaps because home owners vote at a lot higher rate than renters)
There is a choice. We would just prefer nobody had to make that choice. We consider it a failure of the modern society that this choice is on the table. But housing consumption can be scaled, and that it can has important economic implications (such as, social housing can be made cheaper by making units smaller. It literally wouldn't be possible to pull it off if housing consumption was perfectly inelastic.)
I would loose a job, easy access to friends, access family nearby in the process. All those matter, I value all three.
Meanwhile, if I dont buy latest toy, whether phone or sports equipment or netflix subscription, I adapt and dont care in 3 days.
It is rarely the case that someone who can't afford housing in their current location can afford to move away from their support networks to a place with no jobs. Places with significantly cheaper rent almost invariably give you significantly less income, if you can even get a job without connections (which are important in general, but especially important in rural areas where everyone knows each other). That can work out for you if you have substantial savings or a comfy remote tech job, but if you have those you probably don't need to move in the first place.
Your other points are valid ways to technically scale housing down but, I think, bring with them a significant decrease in quality of life that far outweighs what is gained by being able to afford 500 big macs and 10 pairs of shoes.
And yes, it will drive your QoL to the ground, I'm fully aware of that. I'm just saying it's neither impossible nor infeasible nor unheard of. It's "merely" undesirable. Extremely undesirable. But possible.
So you're probably wrong on all points here.
[1] https://data.worldhappiness.report/country/SGP
[2] https://data.worldhappiness.report/country/USA
I'm curious what people are quibbling with here? Romania has the world's highest rate of home ownership at 96% and only ranks as 34th in happiness. Or maybe Kazakhstan but I can't verify the data on that, and it's right beside Romania in happiness. Switzerland has the world's 4th lowest rate of home ownership and ranks 10th happiest. It seems like from a data perspective there is no empirical support for the idea that home ownership directly correlates to societal happiness.
which means they are happier than 35th, the France, which has double GDP per capita
So you're probably wrong on all points here by your own data
> probably wrong on all points here by your own data
again, it's not my data its the data OP referenced initially, I just linked to it.
This is not a claim I ever made. The claim I made was that homeownership was of significantly higher importance than affordability of cheap consumer goods. Obviously there are other factors.
Living in the same place now for years makes it too easy to just hold on to junk, it makes it too easy to just fall into the same routine.
There's some pros and cons each way. It really depends on what you're wanting in life at the moment.
Income has only raised ~15% (on average), while inflation has been at 30%... meanwhile in the past century, money has lost 96% of its value...
Not sure how that translates at all into "stuff" being more affordable...
A lot of the durable goods that became very cheap were a huge quality of life improvement that we simply take for granted. In 1970, which was when boomers were about the same age as Gen Z is today, only a third of americans had air conditioning. Today it’s almost 90%—basically only the people in very temperate climates don’t have it.
Like the previous poster mentioned, I'm not sure that's really such a quality of life improvement.
First of all, food. I don't know where you shop, but the cost has definitely doubled, even tripled.
Second of all, the idea that it's some "good" that these things are "cheap" relative to wages - before they may have been expensive, but they were also investments. It doesn't really matter that much, because you can save to obtain them, and don't need to worry about re-obtaining them. Being in a situation where durable goods are cheap, but cost of living is high, means that you are disproportionately struggling - you can't save anything, any good that these products provide is outweighed by it being too expensive to live...
Durable goods became much less durable, too. Furniture is the biggest one I'd say - they're just not built to last anymore. Whether it's planned obsolescence or just extreme cost cutting, we aren't comparing apples to apples here.
A company named Simplicity prospered by selling patterns: the woman would tell the company what style and size she wanted, then the company would send her a package consisting of instructions and pieces of paper in the precise shapes needed to make the garment. The woman would attach one of the pieces of paper to fabric with pins, then use lines and symbols printed on the paper to know where to cut, then attach the next piece of paper, etc.
I'm pretty sure "stuff" in this context is mostly manufactured goods, and those have fallen in absolute price. Examples abound in the tech sector: even adjusted for inflation, a MacBook Neo is the cheapest Mac ever released, and so on...
What's average income less average house price? Has that gone up or down?
Yes, but not enough to change whether you want AC or not: https://www.extremeweatherwatch.com/cities/washington-dc/yea.... In DC in 1970 you had 98 days above 85 degrees. The year before was 80 and the year after was 71. Last year was 72 and the year before was 93. There are more warm days, but you wanted an AC in the DC area back in the 1970s too.
> and we didn't put as many of the jobs in places where you absolutely needed an AC
I don’t think that’s true. The south and mid atlantic was always a huge share of the population. And the midwest was a bigger share than today, while the temperate west coast was a smaller share. You need AC in Chicago too: https://www.extremeweatherwatch.com/cities/chicago/yearly-da.... Even in the 1970s in Chicago you had 30-60 days over 85 every year.
The population share of the South and West regions of the US have grown while the population share of the Northeast and Midwest have shrunk.
https://www.census.gov/popclock/data_tables.php?component=gr...
What are the fastest growing metro areas in the US these days? DFW, Austin, Houston, Phoenix, Orlando, Atlanta, Raleigh, Tampa, Nashville. Which ones are in the cooler parts of the country?
I agree overall its not like half the population moved to the Sun Belt, but a pretty large amount of the population growth in the US has been focused on the hotter parts of the country.
You're pointing to days over 85 as days you need AC. To me that's pretty warm, but not unbearable. Days where it never goes below 80F for a week or more at a time, or places with extreme humidity mixed with such high temperatures, now that's a place where you need AC.
In the United States at least, days with high WBGT have increased and more places experience them. I hear the same is true also in Europe.
On the flip side, the cost of cooling is steadily falling due to government incentives to replace oil-fired boilers with heat pumps, and the rapid growth of solar driving down daytime market prices for electricity.
There are very few “cooler parts of the country.” Europe’s “no AC” culture was because, until the 2000s, almost everywhere had less than 15 days a year over 30C (85F). There’s only a handful of cities like that in the U.S., such as San Francisco and Seattle. Even in the northern latitudes the U.S. gets really hot. Cedar Rapids, Iowa, averaged about 50 85F+ days a year in the 1970s. Boston and Minneapolis were in the 30-60 range during that decade.
To put that into context, Germany over the last decade is seeing 15-20 30C+ days a year. It hit 30-31 only in two years recently, 2018 and 2019. Those years had 7,000-8,000 deaths each year. Germany’s epic heatwaves killing thousands of people was a mild summer in Cedar Rapids or Boston or Minneapolis even in 1970.
The U.S. is just a very hot country, even in the northeast and upper midwest. AC is a huge, lifesaving standard of living improvement almost everywhere in the country. And we shouldn’t take for granted the developments that enabled 88% of the country to have access to that technology.
You are mostly right and the structural incentives are more related at root to unsustainable national debt than any legislative choice (unless that's what you were referring to)
It's clear that there's plenty of money to go around. It's just that none of it is being spent on things that improve people's lives, mostly due to corruption.
Trump increased the national debt by $7.8 trillion in his first term (rising from ~$19.9 trillion at inauguration to ~$27.75 trillion when he left office), 39% increase (more than WW2, the Manhattan project and the Moon landing combined)
Each and every US citizen will be required to pay $22,400 for the (ahem) accomplishments of Trump's first term.
So far in his second term, Trump has added $3.2 trillion so far, if you calculate by the end of his second term it will be about $8.8 trillion.
Each and every US citizen will be required to pay $25,000 for his accomplishments now.
For comparison: you owe $9,200 for Barack Obama's last term, and $20,300 for Joe Biden's term. Oh and Clinton was by far the cheapest president since WW2, increasing the debt by a measly $600 during his 2nd term.
BLS says housing, transportation, and food are the top 3. Insurance/pensions is #4, but that also includes car and homeowners insurance and retirement contributions.
Over the past 50 years, both transportation and food got cheaper. Moreover, clothing actually used to be one of the top categories, but that’s fallen off completely.
(BLS gets this data from surveys: https://www.bls.gov/opub/hom/cex/home.htm )
When reality seems to be in conflict with logic, the next step is to question assumptions.
https://www.aei.org/carpe-diem/chart-of-the-day-or-century-8...
It's fucking ridiculous and obviously so. The problem does involve methodology and so on but mostly it's just that "the map is not the territory" to be honest. The CPI is a synthetic measurement.
There are other examples too. It's not just health insurance. For example, interest rates are generally excluded from the CPI. So they don't affect the tracked price of owning a car even if they cause car payments to go up by double-digit percentages. Which has actually happened.
If you want a link though: https://www.bls.gov/news.release/cpi.htm
Scroll to health insurance and note that it's showing over a 7% decrease year over year.
- Disappearance of cheap new cars: You can get entry level Chevys, Kias, and Hyundais for < $25k, which is about $14k in 2001 dollars and many more of those cars will last until 200,000 miles and have safety features only available on luxury cars in 2001.
- Massive supply reduction of used cars: I actually don't have good data on this, but it seems like there's pipeline is still borked from COVID era irregularities. That said, cars these days have much better quality and last longer. A car with more than 100,000 miles in the 90s was near the end of its life. That's a typical listing Facebook marketplace these days.
- Repair costs of old cars: Repairs can be expensive, but again, cars today are much more reliable than they were in the 90s or earlier. Even simple things like recommended oil change frequency changing from 3k miles to 10k miles for most models makes a huge difference in total cost of ownership.
- Gas prices: Gas prices have certainly spiked recently (gee, I wonder why), but the cost of gas in real dollars has been higher several times in the past 25 years (see the second chart here: https://www.macrotrends.net/4453/us-gasoline-prices) It peaked in 2008 over $6 per gallon in 2026 dollars.
For comparison, an entry level car in 2001 was <$9k. That's <$18k in today's dollars.
The extra safety features is part of why transportation has become less affordable, yes.
> I actually don't have good data on this, but it seems like there's pipeline is still borked from COVID era irregularities.
That, plus Obama-era Cash for Cars, plus engines becoming so complicated and expensive to fix that 10+ year old broken cars are scrapped rather than repaired at much higher rates.
You used to be able to buy a car for literally less than $1000 that would last you a few good years with minimal maintenance.
> Repair costs of old cars: Repairs can be expensive, but again, cars today are much more reliable than they were in the 90s or earlier.
Not 5x more reliable, as in requiring 5x fewer engine renovations over 15 years now that it costs 5x more to do so.
If battery degradation isn't too great, maybe in 10 years people can buy 15 year old EVs that are cheap to maintain and run (for those who can accept the tradeoffs of EVs - and that would reduce demand on ICEVs). We'll see.
So clearly something is going wrong with the way we deal with our mass transit as well if Paris can do things for a fraction of NYC.
[1] https://nypost.com/2017/06/25/it-took-50-years-for-the-mta-t... [2] https://www.city-journal.org/article/why-cant-new-york-contr...
Well said. Being told that 'you should be happy without owning' to a party that can't afford to own by another party who is actively scooping up the same resource can feel extremely invalidating.
My personal take is that a lot of support for contemporary political extremism in many countries comes from the fact that a significant portion of population is pissed off and see no realistic chance of the 'settle down and thrive' life, not because they are racist/prejudiced or whatever (although labeling them as such only makes things more extreme)
It's not really coming from those though? At the same time that housing costs have ballooned, we've also had a significant migration back to cities. When a larger % of the population are living in high density locations you are going to naturally have a larger % not owning homes. Owning your own home does not align with the density required for a city to function.
At the least, narrowing down the topic to 'Why do people rent instead of own a condo?' is a much more meaningful topic over 'Why do people rent instead of own a SFH?' since a condo is a more viable option in locations where most of the renters are.
That's for a three unit building. Now scale that to a twenty or one hundred unit building. At some point, it makes sense for a single entity to handle the common maintenance through outright ownership and rent. Individual families have the flexibility to leave if things suck without being financially tied to the building long-term and subject to changes in housing prices. Yes, moving as a renter is expensive. It's still lower cost and friction than moving as an owner.
Source: rented for years in cities. Now happily a homeowner in the hinterlands of Vermont.
Rural homeowners and people with single family homes in streetcar suburbs or cities don't, but most new developments already have an organization with dues for shared maintenance.
It should really be city that is building the new housing (even if in the end it gets subcontracted, at least the top level have vested interest in keeping the quality and cost in check). Maybe even offer some rent-to-own programs where part of rent gets put into savings that can be used to either buy it after few years of use or be withdrawn when moving so renter have nice lil bit of money to put forward for buying new apartment/home.
Then the city can actually plan for it, rather than hope housing developer that bought the land does something good for city and not just their own pocket.
I live in one of those used-to-be-commie countries, and we somehow manage to keep cornfields in prime locations, and in many areas, the most the local government allows you to build is a two-apartment two-story house, but none of the non-built land is actually buildable, so you need to demolish something else first. Here and there someone is able to build something with maybe 6-8 apartments (probably with an envelope switching hands), but that's it.
It's as if some rich people connected to the government managed to get a lot of realestate in the 1990s when communism fell, and now they don't want prices to drop. But hey, we're building office buildings without any issues and making airbnb even easier instead... so yeah... the situation is pretty bad.
I disagree. I have yet to see a nice-place-to-live low-income project. In USA Russia Brazil or Southeast Asia.
You need to imagine them as they were new though.
Easter European commie blocks usually have strategically placed parks, shopping, kindergartens, schools, medical facilities within walking distance. For this reason, apartments in these areas are actually appreciating at a faster rate than housing built from the 90s onwards. It's hardly a Pruitt-Igoe.
And yet, the housing was a much bigger problem in the USSR than what amounts to "housing crisis" in the USA. One of the big points of the CPSU platform was to provide non-shared living accommodations to each family by the year 2000 (the USSR collapsed before that but the Party admitted they are not meeting the demand already in 1989). In rich cities most of these pre-made buildings had been already scraped.
If we modeled Spain, we could have more condos. That would require good, safe transit, condos with green space and multiple rooms at a SFH price point, and a cultural change among the older generation to view cities as having less crime.
Much of Europe would like a word. I grew up in a block of flats where everybody owned. 16 apartments, around 60 people, lived on the footprint of a typical American house. All our parents were homeowners, together they owned the building. Two buildings actually and the land they stood on.
So a total of 32 apartments, 120 people, a small parking lot, and a bit of green lawn owned by the people who lived there and self-governed through a sort of HOA. Little communities like this were extremely common in the city.
Nowadays with my generation homeownership is becoming a little more rare. Still people own apartments in these self-governed buildings, but many have become priced out. Too much demand not enough build.
Perhaps wealthy actors (or those representing them) are attempting to distract the aggrieved—focus their anger toward some non-wealthy group.
Either there is explicit collusion where they meet and discuss how to do these things, or there is implicit collusion where they all act in their own best interests and the results is the same. Neither of these mechanism seems particularly likely to me.
I would be happy to hear some thoughtful explanation of how other people approach this issue
There is historic precedent for blaming immigrants (as an example, or just others, if you like) for one's woes. So on one hand you have well-known "playbooks" that don't require some secret meeting of a cabal.
That aside though, even if actors don't collude, if they're each throwing a lot of things at the wall, they may well all arrive at the same things that seem to "have stuck". It's as though there are universal fears and even prejudices among populations of people.
The most famous examples in America were the divisions created between poor white and poor black Americans during Reconstruction and the Jim Crow era to prevent them from forming class solidarity, and then later, the Southern strategy that enabled Nixon and the Republican Party to regain power during and after the Civil Rights era.
If you are unfamiliar with this topic, you can look at wiki articles and blogs like these, and then go deeper by reading academic papers and books on the subject.
https://en.wikipedia.org/wiki/Split_labor_market_theory https://en.wikipedia.org/wiki/Black_Reconstruction_in_Americ... https://en.wikipedia.org/wiki/Southern_strategy https://belonging.berkeley.edu/new-southern-strategy
My small eu country has in the recent years started importing workers from asian countries, and people are against that... of course it's branded as 'racism' in the media.
The reality is, that some businesses have been having troubles with finding workers to do hard work for minimum wage (which is easily solvable by paying people more and creating better working conditions, but hey, think of the profits), and importing foreign workers means that wages can stay down. We're talking about AI and how we'll all lose jobs,and at the same time, importing new people, and that doesn't compute for many, especially those underpaid who can't negotiate for better options because the government approved new foreign workers in their field.
Then you have the more on-topic problem of importing thousands of "outsiders" into a relatively small city (~300k pop), without building any housing, neither for them, nor for locals, who want to move out their 30+yo "kids" out of their childhood bedrooms, nor for others living a bit further away who'd like to live closer to work. Sure, you can fit 8 "poor foreigners" into a 2-bedroom apartment with 4 bunk beds for 200/month each, and it'll be cheap for them, but for a young couple wating a child, 1600eur for such an apartment is around 1/2 of their combined income, so nope, no apartment and no kids for them, since they have nowehre to put them, and "we need foreigners, because our people are not having enough kids".
Then the third problem is integration... and the government does nothing about it, no language courses, no nothing... the laws say that businesses must use our native language, but in some areas, you can interact even with waiters or shop clercs (so, first line of interaction with customers) who can't speak a word of it.
But hey, it's easier to say "racist people hate foreigners", than to solve the issues.
Your small EU country probably has a replacement rate of something like 1.5 which means you're heading towards extinction. This puts a crimp on labor and increases wages, and it leaves openings in higher paying jobs which people want. You end up with no one to do naturally lower paying non-specalized labor.
Modern standards of not having 100 people die in a house fire have changed the dynamics of where immigrants live when they moved to a country. New York City, for example, just shoved people nut to butt in the smallest most unsafe places they could make. We don't do that in first world countries now, so something has to give.
It could be 1.9 if we had better paid jobs for those without college.
We could have even more if kindergarden didn't cost as much, and if people could afford everything else.
"Back in the time", you'd start work at 18 (or even earlier, most people didn't go to college), settle down with a partner at 20, 21, and what else is there to do than to make a kid? And since it was communism, having a kid meant you'd get a larger apartment. You're 23, 24... another kid, why not, you're still young. Third kid? An even larger apartment!
Now, you need college to get any kind of proper job, so nothing before 25yo, then you need to build up your career, and the age of first kid is going towards 30yo (for mom) or more. That's before accounting for the place to put your kids in. We used to build apartment buildings in communist times, now we don't. And it's not unique to communist areas, even in places like london and paris, low income housing blocks were being built in the 1960s, 1970s and even 80s,... now? Almost nothing.
So, change the law, import as much workers as you've built housing for, give priority to locals with zero houses already, give tax breaks and create assimilation programs (language first) for foreigners. You can't just bring people in, without having (livable) places to put them in and then leave them be. Hey, you big company needing workers... until you pressure your mayor to approve more housing, you won't get them, and mayors listen to "big money". But nope.
Not all policy is easy to understand, but I feel (anecdote) that lots of folks don’t want to understand what isn’t an obvious benefit to them, especially if benefits accrue over a longer period.
That's been a long standing element of capitalist propaganda: attempt to distract and invalidate people's real, legitimate complaints about their situations by noting that not even the Kings of old had color TVs and refrigerators.
Who cares if your housing situation is insecure, getting healthcare is challenging, and politically you're dis-empowered? Look at the boob tube and rejoice at your good fortune!
Not everyone wants a giant house, and plenty of people like a small one. It's not the size that matters, it's how you use it.
So when we talk about small and affordable we're talking more like 100 sq ft. Large compared to that is what most would call a modest home.
Housing prices are too high for most people to afford. That wasn't what the sentence I responded to was asking about.
My current place would sell for say $1.4M or so.
The lot itself is worth around $600-700k if it was empty.
A similarly sized home would cost well over $1m to construct to similar quality levels - normalizing a bit for modern construction techniques and all that.
So about $2.4m to build new, or $1.4m to buy a fairly similar 25 year old home next door. New construction here costs more than the older structures on the land in most cases. This ignores permitting and financing costs which throws a light wrench into those calculations, likely making it a bit more expensive on the build side.
That is using numbers I would pay a custom builder for, but even if you add in 20-30% profit for the builder the math isn't super great for the new build end of things.
For scale, in much of the country it is possible to build a new home for well under $200/sf. New detached homes retail for <$175/sf, which includes the builder's profit.
Someone needs to tell the big developers. They keep turning out McMansions (and somehow selling them?).
There's no profit in building smaller.
In Europe its only housing, and still proportionally cheaper than what US has, often in higher quality for older homes (bricks / concrete vs cheap creaky wooden houses).
The idea of saving massive amounts for my kids potential university studies is ridiculous to me. Same for any health issue. I mean any health issue as long as I can work, and then social state takes over (that is not ideal but at point nothing is).
This is also how happiness can be defined - lack of (much shorter list of) constant worries and pressures to deliver, sustain etc.
In the wooden house I have, I just can't get the room that cool if the temperature is in the 90's, because the internal walls provide very little insulation. It was trivial when I lived in concrete buildings. It's a ridiculous waste to have to use central air conditioning to cool a whole house when I really just need to cool 1-2 rooms.
Edit: re-reading… I guess it depends on the house but I definitely have had a substantial temp difference between rooms in a wooden house
Let's say it's 35C outside. Just using a window AC alone, I want to cool the room to where I'm uncomfortably cold (not quite shivering but close) - within about an hour of turning it on (2 hours max). I can't do that with my wooden house in the US when the outside is that hot. I can make it comfortably cool, but no cooler.
(I had better experience in a wooden apartment building, but that's likely because the walls between apartments have insulation).
Actual numbers: If I leave the AC on at max cool all night, I can get the temperature down to 20C. Keep in mind that it's cool outside at night (and actually will dip below 20C at some point at night).
I've never gotten it below 20C.
When I lived in a concrete place, we would never set the thermostat on the window AC to the coolest setting - it would get too cold!
(Yes, I clean the filter and have even replaced the AC - the unit wasn't the problem).
My home is rated to survive earthquakes stronger than any in recorded European history without structural damage.
“You have lies, damned lies, and then you have statistics”
In every developed country two of those are basic human rights, and you get them free even if you’ve never worked simply because you don’t want to.
Every developed country except one, that is.
Rights are norms that protect people's inherent rights unto themselves as baseline rules we use to negotiate society in the first place. They can't pertain to things that can only be obtained within society.
Definitely true for my household. The mortgage, college for the kids, and health insurance for a family takes up a huge amount. Not to mention the housing expenses like HVAC fixes, trash collection, sewer, utilities, etc.
We're currently living in a time where some of the issues are being hidden by the nature of a global market - it's friggin impossible to make any good analysis with a global market, it has just too many influences and ways to hide criteria...
The problem is that after a few centuries of relatively good times, structures have been built up so that the owners of assets can claw back all that income again. They are using housing as the sink for all that wealth, because land can't be industrialized.
They want us to be peasants again.
As a driver and measure of well-being, it’s probably at least 10,000 years old, since agriculture made migratory hunter-gatherer societies obsolete.
This isn't really how the transition to agriculture worked. Historically agricultural elites captured lands with conscripted armies and forced people to farm. There are plenty of examples where central authority collapsed and the archeological evidence shows us that people largely stopped farming.
With no army to protect the farm, there can be no farm. A return to hunting and gathering would occur as an effect of warfare, regardless of whether or not the farmers have any choice. But hunting and gathering is still obsolete, whereupon agriculture is possible.
Obsolescence does not by definition imply permanence.
Farming came first, and with it came larger communities and higher population density. That led to surplus, which enabled elites and other forms of existence beyond basic subsistence. And that lifestyle mostly spread organically. Not because the agricultural elites didn't try to conquer hunter-gatherer societies, but because there were so few hunter-gatherers to conquer. Conquered lands were mostly farmed by descendants of farmers from neighboring regions, because they formed the majority of the population.
No, there are signs of habitation. If you look at the evidence from the alluvial plain around ancient Babylon and similar cities from the early history of cities in the region you see people returning to fishing, hunting, and sort of opportunistic planting on river banks. These cities had a tenuous grasp, and people would often just leave, or the city would collapse and people would stop doing intensive agriculture. People would abandon irrigation channels which they had been forced to dig and simply just go fishing. James C. Scott's Against the Grain covers the archeology nicely.
Such states were by definition exceptional. Most of them were in regions, where rainfall alone was insufficient, and agriculture dependend on irrigation. Such a dependence on centralized infrastructure favored state formation, but it also made the communities fragile. Local population collapses were common everywhere, but the fragility made them worse. When the irrigation infrastructure failed, harvests failed, the town failed, and the survivors dispersed.
But agriculture spread long before states. Where the local conditions were favorable, agricultural communities naturally had a surplus of labor. If there was unclaimed land available, landless men and women would occasionally split from the community and start a new one. That was the primary mechanism of the spread of agriculture.
If you look at the Americas you also only see intensive agriculture in coercive top down city states or small empires. Outside of that you see opportunistic plantings and forest agronomy mixed with foraging and hunting. Or in coastal regions you see marginal planting supplementing diets focused on fishing.
Settled agriculture was not spreading very frequently by choice. Why would anyone choose subsistence grain agriculture when literally anything else was available. On an individual level it’s strictly worse than foraging and hunting across almost all measures you’d care about.
There was nothing else available. If you were born in an agricultural settlement, that was probably the only lifestyle you knew. Even if you knew other ways to sustain yourself, all land was already taken. Settled regions were too densely populated, and the lands beyond them were claimed by indigenous peoples. If you wanted to migrate there, the best option was to go in sufficient numbers and start a new defensible settlement.
Middle-Eastern farmers started migrating into Europe ~9k years ago, and they reached the British Isles and Scandinavia ~6k years ago. The population that reached the British Isles was ~80% Middle-Eastern and 20% Indigenous European by ancestry.
All of these societies would have had headers and hunting/foraging people on their periphery who they traded with. People regularly fucked off to go join those groups. This is well attested to in written records.
Community is IMO easier in apartments, the higher density means there’s a bigger pool of folks you might click with.
Community gathering spots are more prevalent as well: pools, playgrounds, green spaces, etc are common amenities. Especially if you get a dog, you will meet lots of people.
Of course it depends on which complex you live in. If I move I will miss my apartment and its community. I won’t miss my window aircon though, central air would be awesome.
Yes this is feasible, but respecting it as a design problem, renting is more transient than ownership and tilts the floor away from deep communal relationships.
Comparing the neighborhood I grew up in with the one I now live in is night and day. My mom has had the same next door neighbors for 44 years. Up and down the street there are many similarly familiar persons.
By comparison, from my own front door, I can only physically see two houses that are owner occupied. There are good neighbors (and friends!) in the rental houses as well, but investing in those relationships pays off with lower certainty because circumstance is very likely to uproot them at any given moment.
Land where people want to live is scarce. Obviously a variety of factors but one of them is that land is bifurcating the way income is. Small amounts are growing in value rapidly and the rest is declining (or growing more slowly). Urban property is skyrocketing, rural property in coal country is struggling.
Do a search for "the housing theory of everything".
It has been an idea growing in popularity over the last few years, especially in the Anglo-sphere where housing/shelter costs seem to be worse than other places. (One hypothesis I've seen for this is because of Common law, which can give NIMBYs more power to challenge (new) things.)
Recently the trend in food and consumer products getting cheaper has also reversed.
That being said housing has gotten worse for both buying as well as renting. I think there is a case to be made that having a place you feel comfortable/home in (whether rented or owned) affects people's wellbeing disproportionately.
N=1 but for me it didn't. I'm probably repeating myself on this site but 70 years ago a home was a box that kept you out of the weather. Now it's an investment that you have to treat as a going concern. Many industries - contractors, window salesman, landscapers, HGTV, realtors, mortgage brokers, driveway pavers, deck builders, HOAs, etc. - have substantial swaths pushing this neo-feudalist "your home is your castle bro they aren't making more land" narrative so that people are socially pressured into dumping their life savings into a non-fungible asset then spending even more on ridiculous things like building pergolas and updating a 10-year-old bathroom to purportedly improve its value. Everybody's become a property speculator and wants to "get on the ladder".
The upshot is that I spent a lot of time and money on a bunch of stuff I didn't care about for my house because I was concerned with getting my money out of it when I sold. Conversely I chose not to pursue several interesting projects that I liked because they might have been dealbreakers to potential buyers. The whole thing is depressing. It's centered around building/projecting wealth and getting one over on the next guy more than it is on having a place to live. Corporate homeowners have nothing to do with this.
In the end, home ownership is more based around the kind of life you want to live than costs/benefits of the house as an asset. As a Canadian I see that many of my friends would choose to pay a lot more each month on the principle of a mortgage than they would ever save in a registered account.
Is that your intent in posting it?
Many of us, my siblings and our families inclusive, owe our lives to socialised medicine.
No, Levit said that in 1948, when Americans were vastly better-connected (socially) than today, "Godless Communism" was their #1 fear, and everybody was aware of communism's easy appeal to those who felt dispossessed.
I'd read the quote as a clever way to say "let me sell millions of cheap houses to Americans, and you'll never have to worry about the commies".
> Many of us, my siblings and our families inclusive, owe our lives to socialised medicine.
commonly mistaken with communism, yes.
Country having strong social services and caring about their citizens is not the same as communism.
Additionally, buying a house is probably the easiest way to build some kind of generational wealth. It's easy to see this as yet another way the older generation is pulling up the ladder behind them.
It's probably not just homeownership, but the cost of real estate as a whole. And not even just residential. Isn't the often-lamented "loss of third places" at least in part due to those places not being able to pay rent unless they heavily monetize?
I've also heard the theory that the arts often take off in an area when real estate prices drop and it suddenly becomes possible to build cheap art studios and such. No proof or anything, just something I've heard random people talk about online, but it makes some sense.
;-)
But once you start digging and thinking, you start realizing that it's not true.
I understand that most hackers reading the above sentence are already raging, but were you actually there to know that things were worse in the past, or has it been hammered so strongly into you that you're now greatly offended at suggestions that it isn't true?
In general I think that nobody would be willing to go far back in time. You don't need YouTube, but would you want to live without it? How about electric lights? Safe drinking water? Flush toilets?
In a world without clocks, no electric lights are needed. The safest and highest quality drinking water comes from springs and streams, still today. Flush toilets aren't needed if you live rurally. And so on.
Not to forget, that the less you are used to comforts, the more physically and mentally fit you will be as a person.
But we have abundant evidence in art, architecture, inventions, and every fruit of human creativity, showing that people weren't in a constant struggle.
Especially, we have evidence in literature from the past, giving a more nuanced picture than that of constant struggle for everyone everywhere.
Many would say life is a constant struggle. However few have any clue what others experience is like. Even the filthy rich consider life a struggle.
How far are you going back now? I'm not for groping in the mists of pre-history, when we can read literary descriptions from the last 500 years. That is a more relatable past than the little we can know from ancient days.
> If you were the elite in any time your life is much better than typical.
Yes, and that is just as true today.
Policy doesn't "favor" favor homeowners. It screws everything else because it can.
You wanna add a deck to your home. You pay the people the government says you need to pay a grand or two and you're GTG (by which I mean, good to spend further money actually doing the project). Landlord wants to add decks to his triple decker so that he can make the place nicer (more $) while also hitting the egress requirements bird with the same stone and it's an instant 4-5 figure bunch of bullshit where half a dozen worthless interests who add nearly no value in the base case exercise their enshrined in law right to sink their teeth into what should be a petty project.
And it's not just some slum lords triple decker, it's a 10-unit condo, it's those new luxury apartments and on and on and on and on. Everything about owning property, improving property, etc, etc, is ungodly expensive and exclusionary because there's a mile long list of jerks with their hand undeservingly in the pot.
Don't get me started on the financialization that underpins all this, it's just as tileted too.
Policy "favors" homeowners by somewhat exempting them from the worst of this because the buck stops with them. When they get screwed there's nobody else to pass it on to, so they push back.
No one ever thinks they're living through a Golden Age.
Certainly many would prefer to own if that’s a possibility, but easily the worst part of renting for most I think is the need to move periodically, whether that be to keep housing costs within budget, because their landlord decided they’d like to give the condo to their niece, or because the their apartment complex changed hands and the new corporate giant owner is doing a terrible job at managing it.
At least, that’s why I hated renting. If I could stay the same place for 10+ years without getting priced out, without being kicked out for the landlord’s personal use, and without corporate enshittification (which often takes place alongside rent hikes), I doubt I would’ve purchased.
Owning isn’t a perfect bed of roses but at least my costs stay somewhat pinned and I don’t need to move unless I personally decide to. It’s such a weight off my shoulders that I won’t need to go through the stressful ordeal of apartment hunting every year around renewal time just to have options in hand in case things don’t work out.
A year ago, my partner and I bought a small house a short distance (40 minutes by car) from the city, and I moved into a much smaller, cheaper, and less central apartment in the city. I still spend a large part of my time in the city, but I’m also at the house regularly, especially on weekends. I’ve been much more relaxed ever since, because I know that I can give the city’s rental market the middle finger at any time and retreat to our house.
And that leads us to "only housing has gotten more expensive relative to income" - precarity does matter. If I am one sickness or two paychecks from not being able to pay rent, it causes a lot more actual real material insecurity then "having slower phone while everybody else has equally slow phone".
Likewise, if you have trouble to find a job, fear of loosing it makes you work 12 hours a day in a job you hate, it affects you a lot more then whether you can stream movies.
On top of that having that high mortgage or even rent hanging over your head, making sure you can't really downgrade work to something more fun but maybe less paid can be stressful too. Especially in the firing season where you might be let go and take months to find new job.
And housing taking higher and higher part of the income is also effectively getting us poorer or at least stagnate.
The two measures are both great measures of house ownership that measure different things. The article frames the second one as better, and if you are looking to see the ownership proportion of people (for example as they note to look at the numbers of young people who live with parents) thats great. If however you care about the housing development decisions that will incentivise owner occupancy you might care more about the standard owner occupancy per household.
I often see this with respect to GDP/GDP per capita vs mean income and other economic measures, but its great to see a non economic measure like this compared in this way.
Genuine question: who, precisely, cares about "incentivising owner occupancy" as a policy goal? What interest does that serve and why should the government prioritize maximizing that metric?
Basically right now we measure "what fraction of homes are occupied by an owner" and not "what fraction of people live in their own home?". It seems bleedingly obvious that the latter is the number we should be maximizing, if either. And in particular it seems to me that a lot of argument about the former is actually using it as a proxy for the latter anyway.
No one cares about the poor homes who don't have local owners!
Incentivizing ownership is more closely aligned with objective (1) while owner-occupancy is more closely aligned with objective (2).
These don't work in the presence of capital's outsized returns though, which allows people who (for whatever reason) have access to more capital to recursively seize more of the growth in land values from objective (1) and therefore price out objective (2).
Right, so you want to know how many people own homes, not how many homes are "occupied" by an owner[1], which is at best a proxy, right? Sounds like you're agreeing with me but just getting the sides of the argument mixed up?
[1] As the article points out, a single person can in fact "occupy" more than one home!
If you rent make sure you vote. Make sure you have an informed vote, all too often cities will put rules on rental units that make renting worse for you. (bad tenants and bad landlords exist - good tenants and good landlords need protection from the former). Likewise while rent obeys supply and demand, when property taxes go up that factors into supply and will make rent go up indirectly - is it worth it? (I cannot answer the later question - the more important consideration is make sure the taxes are similar for rental and owned units otherwise you are a renter are harmed)
I don't see why you think owning should only be slightly better after 10 years; if you don't want to deal with maintenance directly, you could always hire a management company as if you were the landlord and renter, but there's a benefit to you and everyone around you when you are invested in your home and community.
Management companies have a terrible reputation. While you can use them, it is likely they will be much more costly than doing things yourself. Real estate investors tend to hire their own people for management even though this seems like the perfect thing for them to outsource because they have been burned so often. If they work for you great, but beware.
Even if you find a good management company, if the roof it 23 years old (expected lifespan 25 years) you should expect the big bill to replace the roof - over 10 years this works out since there will likely be one such big bill but not many. However if you live there less than 10 years these big bills will hit you.
To maximize fraction of homes with their owner living inside, you focus on the ownership _and_ the lifestyle choice. A family living together is the best use of land in this case. A family renting a side room to a college kid is still the best use of land. If every home were lived in by its owner, you could still have 90% of your population renting and not building generational wealth.
Or they could... both own the home? Independent of the rest of your argument, this is a pretty weird hypothetical case to illustrate your point. Joint property ownership is way more common than any of the "alternatives" you're suggesting, so it's hard to take what you're saying seriously when you've dismissed the obvious way that this would work for the overwhelming majority of married homeowners.
"% people owning homes" is maximized by joint ownership, as well, but the corner cases are interesting: It is lower with big families living together or when anyone rents.
On the other hand, the "% homes lived in by owner" metric falls down in a much more realistic way: When there are fewer homes and they are lived in by owners, you can still have 90% of your people renting apartments while this metric hits 100%
What's the goal - defend A vs B?
No, if you look at the first example explaining how the two metrics are calculated, it is clear that both spouses are considered homeowners for HPOP.
Non-occupants contribute very little to the actual value of a place - they don't work here, they don't buy here. But they capture much of the value of other people trying to make the place a pleasant place to live, though rising real estate values.
Stipulate that owning a home is good.
As the number of homes goes up, owner-occupancy necessarily goes down (you can only occupy one home at a time). Homeownership might rise or fall while this is going on. But that doesn't matter; the number of homes going up is good, so the fact that the metric falls when it rises tells you that either (1) the metric is "evil", rising when bad things happen and falling when good things happen; or (2) the metric is incoherent and doesn't carry information about whether things are going well.
Not necessarily at all. Plenty of people rent who would like to own homes too
So why would anyone buy a second home in that scenario? Maybe as a studio or whatever, perhaps. But as homes become less useful as a rental investment, the number of non owner-occupied homes seems like it will decrease too?
You're just using it as a proxy for people owning homes. It's not a given that the two numbers are always opposed.
I don't think you can get any of these situations non-organically. But schools and worker dormitories have a lot in common. More than most seem to admit to.
Culturally, in many countries it helps with household formation (coupling, starting families), which, in an age of low birth rates, can be useful.
Or maybe we measure what is easiest to measure, not what is best.
I see this everywhere, though. Jobs data is really job openings not actual hires. Unemployment data is really paperwork filing not people out of work or retiring early. And now home ownership is really "count everyone in the home if the owner resides there".
It’s even worse than that, it’s not counting people at all. It’s number of houses with at least one owner living there divided by total number of houses.
> Housing unit 1. A couple owns their home. The woman’s parents live with them.
> Housing unit 2. A couple owns their home. Their son, a recent college graduate, lives with them.
> Housing unit 3. A man owns his home. A friend lives with him.
> Housing unit 4. A couple owns their home. Their two young children live with them.
> Housing unit 5. Three roommates rent their home. The owner lives elsewhere.
> As illustrated in Figure 1, these five housing units are home to 14 adults. Because four of these five housing units have their respective owners as residents, the owner-occupancy rate—the measure traditionally viewed as the homeownership rate—on the cul-de-sac is 80 percent. However, because only seven of the 14 adults are actually owners of the homes they live in, the HPOP is much lower, at 50 percent.
I think 1, 2, and 4 should all count as “owning their home.” The new measure is also a recipe for confounding attempts to compare the metrics over time, as demographic change brings in cultures that embrace multi-generational living. So what seems to be a drop in homeownership rate could instead reflect a growing and aging sub-population where the cultural preference is for parents to live with adult children instead of separately.
Once those stop getting paid, none of those people are housed. This is tracking things that don't matter.
How does the multi generational preference living theory work given the correlation to rent to income ratio? Is multi generational living preference a cause or a symptom?
I own my home. If I let a friend stay with me for unstated terms(friendship, charity, money, sex, whatever) then I no longer should be counted as owning my home?
Here's an example from the page - a couple and the wife's parents - a couple and their college grad son
In this example the two couples (4 people) are counted as home owners and the 3 others (wife's parents, the son) as non owners - so the ownership rate is 4/7 = 57%.
On the traditional metric that scenario would be 100% because roughly each family owns its home which is good.
Now look at what would have to happen for the new rate to move to 100 - the wife's parents and the son would need to move out and buy separate homes. In other words the metric "punishes" living with family even if that's what you want to do.
I find the traditional metric is more useful. If I am a renter that indicates the desire to have a separate place - so it makes more sense to "ding" the ownership metric.
It makes sense for some families to cohabitate. Family with infants cohabitating with grandparents providing some care. Elderly parents being cared for my their middle-aged "kids". Etc.
(Yes, I saw the reference to dorms, nursing homes, & prisons.)
Maybe a way to handle this better would be to look at the size of the home because if a home can easily fit multiple generations it feels like a very different situation. Also it's somewhat arbitrary who happens to be the owner on the deed not to mention key questions like whether or not the home is truly owned outright versus largely in debt to a mortgage
As you mentioned, multi-generation homes are not the norm in the US. If there is a change in that norm, it's worth investigating why that's happening, before we conclude that we need to adjust metrics around it.
Purely anecdotal, but every multi-generation home in my (American) family is the result of disability or student loan debt - multiple generations live together, but that doesn't mean they want to.
Also remember that this new metric is meant to be more informative on wealth, generally. Those other generations living in the home don't typically share in the wealth the home confers, not until someone dies at least.
The article links ownership to costs. Attributing diminishing ownership as "norm float" needs some justification. I suspect multi-generational norms seen elsewhere are rooted in poverty and a lack of opportunity.
Suppose I told you I am losing weight because I cannot afford food, I don't think you should speculate I chose to go on a diet.
This is an international community here on HN, would love to hear takes from other countries.
https://worldpopulationreview.com/country-rankings/home-owne...
the europe average is around 70% and globally i expect it is similar. unfortunately numbers for africa are mostly missing. the few examples there suggest that homeownership is either high, or extremely low, which means you could be correct, but i'd like to see actual numbers. and then it is still a question why it is low. it could be because land is owned by government, tribes or private and not for sale.
https://globalhousingdatabase.com/ shows more african countries, with most of them being medium to high. but it also hows high for nigeria, whereas the other statistic shows nigeria with 25%, and south africa and kenya are shown as much lower here compared to above.
I am of course excluding property tax from the ownership- if you fail to pay property tax, you'll find out you really owns your property?.
Depends on how old the kids are, because at least in most cases, daycare costs are for a very short period of time compared to the the overall life of the child. And the average in most states is wildly all over the place.
We absolutely should be focused on free childcare, or ideally ways that parents don't need childcare to begin with, but I don't think that has a lot to do with household income. Hell, at that point, why as well talk about transportation costs, as it's different in a single household vs a two parent two kid household, and different still depending on where you live.
I hope this number drops below 50%. Well below 50%. Maybe then we can finally vote down the NIMBY regulations and NIMBY politicians. And start rapidly expanding our housing supply. Given our current political system, it seems high homeownership rates are the root cause of the housing affordability crisis
Homes are not #1 best investment asset and they shouldn't be but the world works better if people own homes they live in. It's a matter of not having the most significant part of your life being exposed to the market volatility. Plus it nicely aligns incentives of the neighbourhood.
Go and check areas that are mostly rental and see how maintenance (of both homes and infrastructure) is forgotten on the altair of rentmaxxing.
Of course if you're at $400k at FAANG, your best investment isn't realestate but for majority of middle class and working class buying your own home, taking a good care of it and passing it to your grandchildren is a very good investment. Also the society benefits.
The easiest way to solve the unafordability without putting everyone into negative equity is WFH. Land is only expensive near where traditionally the good jobs are. Just allow people to move to a low cost area, build there and WFH
Not what was good for young people who, for the most part, can’t afford to live in houses and these days are getting ripped off with overly expensive apartments too, so they never have a chance to buy a house and build equity.
Feels like an apples and oranges situation. The two numbers each have their own value but they’re measuring different things.
One is calculated based on the number of houses, the other is a measured based on the population of adults or households. Both measures have always existed. Trying to replace one with the other doesn’t seem right because they both have value for different reasons.
I don't feel my rental situation in either insecure or unstable. I recently moved (my choice) but previously I lived in the same rental complex for almost a decade. I took advantage of COVID to move to a larger apartment there for cheaper rent, which was a massive advantage I had over friends who owned homes at the time.
However if you rent for less than the mortgage you can invest the difference into something that will grow in value more than the house (which SHOULD track inflation) and in turn end up about the same in the end.
Of course, we did need to pay a down payment. But if you amortize that over a 30 year mortgage period, we’re still better off buying than renting.
Your mortgage is the lowest amount you'll pay. On top of that you have to manage the upkeep of the house, which costs both time and money. Lots of people go through phases in their lives where they move around and owning just doesn't make sense for a few 1 to 2 year stretches.
On the other hand, rent is the highest amount you'll pay. You generally don't have to worry about upkeep, and you're free to move. The commitment is lower and that has real value for certain people at certain stages of their lives.
I rented for 6 years in different areas until I figured out what I liked, and then I bought a house. Those 6 years weren't just wasted years. Those were very valuable years where renting really made the most sense.
Well guess who has to pay for that in a house that is rented? It's the renter!
Just the same as when you rent a car, the cost for maintenance is included in your rental fee.
You're just as free to move if you own a house: Just sell it, or rent it out. Any inconvenience from doing that is easily worth the money you save by not giving it away in paying rent.
On average, over time, in a free market, yes. But not necessarily in any specific case. The rent is a cap during the lease period, no matter what the landlord has to pay for maintenance.
I don't like these 2 statements because they are only true at a starting point. If someone gets a mortgage today for $2k/month, 10 years from now it'll still be $2k/month, or even less if rates drop and they refinance. Rents OTOH will continue to rise with inflation. I had a $2k/month mortgage at my last house and the house next door rented for $4500/month.