The problem for me, as a long time NYC resident, is that there's no other place in America I want to live even with work from home as a possibility.
I like mass transit. I like not owning a car. I like that the city is generally safer than the rest of America. I like that it's the center for tech on the east coast, the arts for the entire country, and finance for most of the world. I like that we generally get along in the city, across many cultures and backgrounds. I like it has some of the best food in the world.
I think a lot of people are like me. No, we don't want to live in Boston, Chicago, or Washington DC (similar cities with mass transit). Unfortunately demand will continue to outpace supply greatly.
The only alternative I have is moving further out in Brooklyn or Queens. Unfortunately the subway has decent coverage, but moves at a snail's pace, and I'm looking at 50+ minutes for 6 miles into the city.
> I like that the city is generally safer than the rest of America.
Coming from New Hampshire: this is just fantastically untrue. NYC is about one hundred times more violent than where I live. It is so thoroughly not the same that I can usually tell when people come from cities simply based on how nervous they are. I think most people don't realize how badly it affects them, or how violent cities are versus "the rest of America".
edit: NYC has 5.8 violent crimes per 1,000 people, which is 45% more violent than the USA median (4.0). I have no idea how 45% more violent got a reputation as "safer than the rest of America" but it's not true.
The NYC crime rate varies wildly by neighborhood so I don't think its very useful to compare city-wide crime stats. For example, the felony assault rate is literally 10x higher in parts of the Bronx than on the UES. If you live and work in safer neighborhoods the city will appear to be very safe to you.
In NYC the most dangerous areas are pretty far out from (edit: downtown) Manhattan and you'd really have to go out of your way to get there. Anecdotally I lived in Chelsea and worked in Union Square for a few years and never witnessed any real crime, violent or otherwise. By comparison I also lived in SF where the bad parts are unavoidably located in the center of the city and I've witnessed multiple violent crimes over a similar time period. The neighborhoods in a city you pass through on a day to day basis really matter in terms of defining your experience.
100x is shocking, so I explored a bit. Over 2010-2020 Amherst PD reported ~5 violent crimes per year[1], in a town of ~10000, or about 50 per 100000. NYPD reported ~49k per year over the same period[ibid], on about 8.3m residents, or about about 590 per 100000. So about 11x difference in per-capita reported-to-local-PD crime.
I'll admit I'm surprised it's still an order of magnitude, I share GP's sensibility that the cities are generally much safer than perceived
Indeed. I come from a rural village where I could leave my bicycle unlocked over night at the center of the village and it wouldn't get stolen. When I moved to a city, one realization I made was that cycling is just a lot less convenient if you have to worry about your bicycle getting stolen. Also I can't leave my home door unlocked when I go somewhere (and thus have to remember to take the keys with me).
I think small stuff like this just adds to your total anxiety without you even realizing it. It's really sad how difficult it is to live in extremely safe, small villages like my childhood home nowadays.
NYC is generally safer than the rest of America. NH is typically the safest region in the entire country. But the truth is that there are high numbers of relatively rural areas that are substantially more dangerous than NYC. Also, I think that crimes/mile is fairly un-instructive because of how much the legal boundaries of a city shift/as well as the amount that a person will travel in a given location (I live in NYC, and probably live/work/eat within a 1.5-2 mile range).
Also in NH, and I would say my perception is the opposite of your facts.I've spent lots of time all over the city at different times of day/year across decades.
I would still say Manchester, Rochester, Nashua ETC are 10x trashier and more neglected than even the most run down alley in Manhattan, Brooklyn, Queens.
Presumably OP was just talking about Manhattan or something, maybe even Manhattan below 110th st, and not the less nice parts of the Bronx or Queens or Brooklyn that they never go to.
I had similar thoughts. I live on the west coast and feel so safe that I don't even lock the front door to my house, ever. I wonder if OP feels safe enough to always have their front door unlocked.
I can't find similar numbers to yours for any definition of 'violent crime' I found numbers for, but assuming they're true, it's still missing the point. Amherst is a wealthy community in a wealthy, low crime state. It'd be like pointing to a border town to make the opposite argument.
Actually, how trustworthy are those stats as a measure of actual crime or safety? I think this effect might actually push the difference to be a bit more extreme; at least several years ago I know the NYPD had a scandal about systemically under-reporting or downgrading crimes. Has this _actually_ improved since then, or did they just "discipline" a handful of people? Do other law enforcement agencies have similar problems?
However, I do also think an important question is "safe for whom?"
Depending on your race, sexual orientation, gender presentation, etc, rural American communities can foster their own distinct unease. Those are the places where you keep your head down, self-censor, try not to draw attention. When is the absence of reported crimes in a state which is 92.8% white "safety" and when is it something else?
Where did these numbers come from? You linked to a screenshot of a spreadsheet, but not its source.
From a random search, I got 2.8 violent crimes per 1,000 people citywide, which means all 5 boroughs. For just New York county (Manhattan), the most official statistic I could find is 4.57 in 2019[2].
> It is so thoroughly not the same that I can usually tell when people come from cities simply based on how nervous they are.
I think, at least in today's culturally polarized environment, there are a lot of people who would be understandably nervous and on guard traveling to rural America, and it has nothing to do with what crime looks like in their home city.
It's also worth noting that Manchester, NH, which is where an Amherst resident is likely to spend a non negligible amount of time (nearest shopping mall, hospital, etc), has a comparable (slightly higher violent, much higher property) crime rate than NYC.
I don’t think the relative percent is a good way to compare 5.8 per 1000 vs 4.0 per 1000. It can easily be flipped to show that NYC is only 0.18% less safe than the national median.
One thing this thread has reminded me of is that for all the lip service conservatives pay to toughness and manly traditional gender roles, they certainly seem to live in abject terror of being the victim of a crime.
Someone's feeling of safety/nervousness has more to do with a variety of different variables that are unique to them, the place in question, and the situation they're in.
Personally, I'd rather be alone on foot in NYC than alone on foot in some small town where I'd stand out. Maybe because I grew up in a city and have traveled to many places, maybe because of my characteristics that make me feel vulnerable when I'm the outsider in a less diverse area, or maybe because I've lived in a city far more violent than NYC- so for me the things I visit for are worth the possible risk of crime.
NYC isn't even on the top 50 most violent cities in the world, which is quite a feat when you consider how things used to be there in the 80s/90s.
Maybe your very specific neck of the woods is very rich and safe but I don’t know why you felt the need to butt in and make the conversation about you, OP never claimed that NYC was the absolute number 1 safest place in the country.
Just to provide a 3rd party reaction here: it sounds like you've circularly reasoned yourself into a trap of your own making. You don't want to live anywhere else because you like NYC. Because no other city is exactly like NYC, you aren't interested in living anywhere else. The reason it's "circular" is because there are cities with good transit, good arts, great food, have a tech scene, and even have financial districts and you'd be surprised to find out how well diverse cultures get along in a log of smaller towns across the US (far fewer racial/cultural over/under-tones) and how safe they are (safer than NYC). Yeah, no other place is the center for any of these things save SF being the tech nexus and maybe having better renditions of some types of cuisine. So if you have to be in the center of the world, then yeah, you're not going to find other centers of the world.
For me, personally, I'm disappointed by how few world cities the US has. NYC and Chicago are really it. My silly benchmark for what makes a city a world city is that it operates 24hrs a day (at least parts of it). Chicago barely does but I think it counts. Everywhere else in the US just dies past 10pm and especially past 2am.
It's a weird metric to say that late night nightlife is critical for being a global city, instead of say, huge percentages of the population coming from foreign countries. Airport access for direct flights, ect.
Miami also meets every single one of these metrics and has later night life than NYC. New Orleans has 24 hr night life. Vegas too.
Los Angeles has a higher foreign born population than NYC.
That seems like a silly criteria. How many people really care about doing things at 3:00 AM? We're talking about a small niche of shift workers and childless young people.
Las Vegas operates 24 hours a day if that's what you want.
I think your last point is an interesting arbitrary distinction, if you're going to make one. While Vancouver is pretty well regarded as a NA city with pretty decent transit infrastructure and other nice qualities, it does basically close after 2am which isn't as nice as a night owl. Transit stops almost completely around that time too.
Edit: None of this comment was meant to detract, just a comparison in agreement to the city I'm nore familiar with. Maybe Toronto's different
I live in Brooklyn and feel the same way. Even if you discount all the empty luxury apartments held by foreigners who never show up, there are still tons of people who want to move here.
Why?, because when you have all these people crammed together - weird stuff happens and that's what makes NYC magical. We're constantly mixing together, in the subways, bars, restaurant, parks ,etc. You get to see firsthand all the humanity of this city. No other city in America has replicated that.
I won't argue/disagree with you as far as NYC's comparably higher degree of what you describe, but having lived in Philadelphia's core, there's plenty of the mixing magic happening in other cities, but it's definitely not "the same".
I see Boston as the tech hub of the East more than NYC. New York obviously has a large number of tech jobs, but Boston and DC both have a higher concentration of tech; in NYC the big fish is obviously finance.
I discount DC a little because a lot of that is government and defense related (not a bad thing, just not my cup of tea).
Boston has a lot of diversity in tech, lots of health/pharma like Moderna, web companies like TripAdvisor and Wayfair, robotics like Boston Dynamics, tons of startups doing ai/ml, and it seems like every big company has a substantial presence here (Google, Meta, Amazon, Microsoft, Salesforce…)
NYC has the second most number of people with software development jobs in the US outside of the bay area although the number is about the same as Seattle which is a much smaller region than NYC, and within NYC the majority of developers work at banks in back office roles.
Boston is definitely bigger for every other type of engineering though than NYC. Most non programming engineering jobs in NYC would either be for a niche startup or would have something to do with real estate.
I don't know how anyone who has spent considerable time around SV/SF, NYC and Boston could see Boston anywhere close to the others.
The Boston tech scene and culture (outside of physically being on the MIT campus) is awful. TripAdvisor and Wayfair, your examples, are two companies I would aggressively advise any friends from even talking to. While all the major players are there now it took them a long time to get there. Comp in Boston still lags NY and SF considerably, and in general Boston has always had a resistance to anything "new", it's politically liberal but otherwise a very conservative city. The biotech companies there have always been way more heavy on the bio than the tech. I've worked for Boston area tech companies multiple times , before and after the tech boom, and would never work for a Boston area tech company again.
NYC is on a whole other level. Not only do you have all the major players with much larger campuses there are far more startups and early IPO companies. There is the also entire world of HFT companies (Boston's finance scene is largely very old school investment management companies) which alone would be worthy of making NYC a techhub. I also disagree with your claims about the concentrate of tech companies. Tech related meetups and events in NYC are much larger, more active and have more exciting participants than in the Boston area.
As somebody with no dog in this fight (I live in the south east), I'd tend to agree with the Boston take.
Simply being in the orbit of MIT can have that effect, along with everything else you listed.
The issue with NYC from a perception as a hub of any one thing is that it's just so big with so many different things going on that tech just seems like one of many things going on there simply because of all the people.
Boston's interesting in that it feels more low-key than NYC or Silicon Valley. Most of the biotech companies feel a lot more secretive and I don't see as many public events.
The valley has a vibe in that everyone you meet is involved in tech work in some way and will talk about it to you or in public. It doesn't feel that way here, or you have to be a part of certain circles maybe. There are some small biotech meetup groups, but maybe they all do communication at the universities?
Indeed, the amount of VC dollars invested in Boston companies per years is 3x the per capita of New York's. So while NY may have slightly more total dollars invested, a much higher percentage of Boston metro area workers (something like 30%) work in tech. New York will never really be a tech hub in the same way as SF or Boston because tech plays second fiddle to other industries.
I feel you here. I'm a relatively new NYC resident and worried that I'll be "ruined" forever. I've otherwise lived in Toronto and Seattle.
It really comes down to fear of change I think. Humans are very adaptable, and the same one can thrive in car-centric suburbs as they would in shoulder-to-shoulder metropolises. Given no constraints, you prefer city. But throw in kids (requirement for more space/better schools), or a dream job (passion), or a dying parent (obligation), or a lover.. and suddenly you're building a life in a completely different place. And it works.
At least I think/hope.. because outside of a busy city I am irritable and sad. But it sure would be nice to slow down on the treadmill/rat race a bit..
I have lived in San Diego. I have spent time in Los Angeles. I have spent time in San Francisco. I am not a stranger to large cities.
I can say with certainty I will never live in one of these places. I won't even live in Pittsburgh, which is an order of magnitude smaller than any of these places. There's no escaping people. There's no escaping politics or bureaucracy. There's no way to escape petty crime, crazy people, and noise. You can't see the sky at night, there's never any "dark".
Everything is orders of magnitude more expensive in a city. $5000/month rent? And people think this is "reasonable"? I don't even pay a third of that on a mortgage on a 2400sq/ft house. With a nice yard, decent neighbors, a good school, low crime, low taxes, the works. Our night-time intruders are turkey, deer, the occasional black bear, raccoons, skunks, and screech owls.
Do I have to drive to get anywhere? Yes.
Do I get the highest-paying jobs? Do I have immediate access to cute little bodegas and trendy little shops and night life? No.
But I can let my kids go outside and play at night. I can leave my doors unlocked. Nobody breaks into my car and steals my stereo. I can leave my house with my garage door up and all my stuff inside, and my neighbors will call/text me to remind me.
Is this an adequate trade-off? For me, absolutely yes.
I get why people like living in big cities. I will never again live in one myself, though.
That’s definitely not a given. I know a bunch of people that given no constraints they would live at the edge of a lake with the nearest city being 100+ miles away. But they get forced into a city by the need for a job, or the same constraints you laid out.
> I feel you here. I'm a relatively new NYC resident and worried that I'll be "ruined" forever. I've otherwise lived in Toronto and Seattle.
Just out of curiosity, what do you think NYC has that Toronto or Seattle don't have? And what are you thoughts on Toronto vs. Seattle? Personally, I've lived in Toronto (which I loved), and visited Seattle for a few days (which I liked, but hard to say from a short visit), so curious to hear what others who have lived in all 3 think (especially since I'm planning to move to Seattle soon).
Having grown up in DC and New York, I would say more strongly that there's no other city in the USA that has comparable mass transit.
The way I would put it is -- in New York, it is more of a hassle to have a car than to go without. In all those other cities, while there is some mass transit, you will find yourself wanting a car.
What's pretty much unique about NYC, especially Manhattan, in the US is that there's no cultural expectation that a well-paid professional will own a car. By comparison, people can get by without owning a car in Boston/Cambridge--I did as an undergrad--but get out of school and a lot of your friends probably live in the suburbs/exurbs, you need a car to head off to the mountains, etc. Sure, you can rent and Uber up to a point but most people find it 1.) gets old and 2.) As a practical matter means they mostly just stay in the city because doing otherwise is too much of a hassle.
DC is still easier to navigate by car than by metro and bus, at least when I last lived there in 2016. Red line from MD would regularly shut down or have delays, and you were looking at a 2+ hour commute into the district. If you could get a parking spot you could reliably beat metro by about 10 minutes with much less variance. And you cannot navigate a circumferential route in a reasonable time, the purple line is the first to really attempt this and is like a drop in the bucket. If you live and work in the city it’s doable, but cross a river or the beltway and it’s really not. I had friends in Baltimore that could not get by without a car either, and they made a really dedicated effort. Mass transit in the US - outside of NYC - is just not viable at scale.
I grew up in NYC and I think it has a lot of problems that have prevented me from moving back there since college, this said...
NYC has the largest train system in the entire world, especially when you combine the various nearby train systems that aren't a part of the main subway like LIRR, NJ transit, path and Metro north (in China which technically is longer they count long distance commuter rail). The subway alone has more stops than any train system in the world.
eh, having lived in both chicago and nyc, chicago's transit system is pretty much on par with nyc to me. MTA is all built around going to and from manhattan and it can be a struggle if you have to do something else, like going from parts of queens to brooklyn. Chicago's hyperrational grid and busses make up pretty well for the gaps in the L. now the cabs in new york, nothing beats them (although these days more and more cabbies don't seem to actually know the city very well)
If you really like mass transit and want to live without a car, America is probably not for you. USA got rid of most streetcar systems a long time ago and rebuilding them from scratch in current NIMBY climate is basically impossible. And subways, which are much more expensive than ground transit, only make economic sense in several metropolises.
Try some European city with reasonable rents like Warsaw. Even the skyscrapers will remind you of Manhattan.
I love Warsaw and think I would personally really enjoy living there, but if the GP isn't willing to move to Boston, they're not going to like living in Warsaw.
Much smaller then NY, much more homogeneous, not a major world center of arts or finance.
There are very few cities in the world that check all the boxes he listed for NY, and they're all extremely expensive as well.
There’s no fundamental reason “America is probably not for” people who want high-quality, dense urbanism. The rent in NYC is a clear sign that there’s demand for it.
As someone who grew up in NYC, the only lasting appeal to me is family and specific ethnic culture that is much less in every city in the US that isn't NYC.
The apartment I grew up in, in lower manhattan, today would cost more than 20-30 times what my parents paid for it in the 90s, and it wasn't a nice apartment. There was no laundry in the unit, it faced a dark courtyard, the tempurature of the apartment was never that comfortable, had yearly huge bug infestations, but it was in a great location and was about 5 rooms more or less.
I think people just romanticize a life different than the one they grew up with. I certainly miss some aspects of the city culturally, but life on the west coast, I've had considerably better living arrangements ever since I've graduated college than the one I grew up in, and my parents were both professionals with graduate degrees, it's even worse for a lot of other people.
I grew up in NYC, in an even worse apartment. Despite no longer having family there, I would return in a heartbeat. I loved it and wish I could raise my kid there (in a better apartment, mind you)
I have a fantasy where a Robert Moses-type figure builds out super fast trains that connect Long Island, NJ, upstate New York, and effectively urbanize the entire tri-state area. New York becomes this super city where you can go from White Plains to the tip of Long Island in an hour. Housing becomes cheaper as neighborhoods that were previously impractical become feasible for New Yorkers. Car ownership drops in the outer suburbs as people embrace public transportation. Gentrification stays an issue but because of more housing, it's less brutal.
Unfortunately this is pretty unlikely unless there happens to be another political genius like Moses who also happens to love public transportation. Maybe an Andy Byford-Robert Moses combo?
I’d love to see someone brave enough to marge north east jersey and lower Connecticut into NYC and connect them with proper transit, pretty much merge LIRR, Path and MTA under one NYC administered transit system, then add some high speed rail along the old train lines.
Then make all public transit free and turn half of the roads into bus, pedestrian and bike only paths.
>"I like that the city is generally safer than the rest of America."
Is there any data to back this up? The latest NYPD crime statistics, show a city with increasing crime.
"Overall index crime in New York City increased by 27.8% in May 2022 compared with May 2021 (10,414 v. 8,149). Each of the seven major index crime categories saw increases, driven by a 42.1% increase in grand larceny (4,116 v. 2,897); a 28.3% rise in burglary (1,239 v. 966); and a 26.2% increase in robbery (1,506 v. 1,193)." See:
You are clearly not alone. Skyrocketing rents are a symptom of more people wanting a place to live than there are available spaces. It's not like NYC is bereft of skyscrapers either.
NPR was talking about the lack of housing across the US today. Their solution was to get involved with zoning meetings and work to change the zoning laws.
My partner and I have been agonizing over this exact dilemma. We have an income number and an expenses number and when those cross a certain point, we've gotta go somewhere else. So there's a very good chance that we'll immigrate somewhere in a few years. But yeah, try as we might, we couldn't come up with another US city that either of us would want to live in.
To me, only other places that compare to NYC are Singapore and Sydney. Great food in Singapore, great weather (usually) in Sydney. The people can be a bit busy in Singapore though.
Certainly no NYC, but they ticked all my recreation, arts, food, people and transport boxes.
Unfortunately, they’re all so goddamn expensive to live in.
As a New Yorker who had to move to Seattle for a job five years ago and misses the city every single day, I totally agree with you.
I will say, depending on how close you are to a train station, Brooklyn isn’t bad. Yeah, it’s 45 minutes door to door, but you get to walk and listen to podcasts or whatever on the train. As commutes go, it’s definitely doable. But I totally agree with you that many people don’t want to live anywhere else and people who don’t love New York might not understand that, but New York is different from every other major city in the US.
I’m still carless in Seattle (I don’t drive and have no desire to drive) but it’s so much harder (my husband does have a car but I can’t rely on that for my own needs). And although Seattle is somewhat cheaper than Brooklyn (it’s really not but my luxury building in Capitol Hill definitely costs less than a luxury building in Williamsburg foot for foot — I pay about 70% more in Seattle than I did in Brooklyn, however), the things I’ve lost compared to New York are massive. I’ve definitely considered moving back now that I’m at a fully-remote company (that does have office space in NYC), but there are some practical realities about being in Seattle for my job that makes that hard. Maybe when my lease is up next year, I’ll reassess.
Part of the problem is that most people would rather move to an existing desirable city than try to improve their own to make it more desirable, myself included. In most major cities, less than 20% of people vote for mayor, let alone city council. Most of those who do vote in local elections are much old.
The goal posts keep moving tho. Even if your city becomes closer to NYC circa 2010, NYC is moving towards becoming a totally different beast of NYC circa 2030. There will always be a massive gap
I don't blame them. It can take decades for the kind of change that urbanists want to fully play out, and I bet they would rather experience good city life while they can enjoy it.
Have you been affected by the rent increase yet? Curious how much power the landlords have there. Can they raise your rent without warning, are they trying to force you out, etc.
Not personally. I know some of my friends have been who moved back well after the "Covid Discounts" were a thing, got a little bit of an inflated deal, and now are facing like at least 3k for 1 bedrooms in places like around Williamsburg & Lower Manhattan(west village, soho, etc.). That's one of the better case scenarios I've heard as well. Truly a shame :(
As someone who has also lived in both places (and lives in neither of them currently), I'd have to vehemently disagree. SF is not only comparably expensive, it's also incredibly far behind in transit, far more homogeneous in all sorts of ways, much less culturally interesting and significant, and- despite my agreeing that the headlines are blowing it out of proportion- pretty clearly headed in the wrong direction overall. It has some potential advantages (weather, proximity to nature, stronger tech job market), but I relate to the OP comment a lot, and for me SF just cannot even slightly compare to NY.
Obviously this is all just my opinion! I know tons of people love it there.
Sounds we should really build walkable city with convenient mass transit in the US and Europe. It's a shame that building anything infrastructure in the US is prohibitively expensive.
I went to NYC many many times when I lived in New England, my cousin went to school there and took the train down multiple times a week for years, her mother worked and lived there for decades, my father went there every week for work for many years. Anecdotally our experiences have been that the city is generally safe, none of us have any crime stories to tell.
My parents also used to go there a lot in the 90s and the city has come a long long way since then- for the better.
I'm confused what the "problem" is, is it that things you really like are expensive? I really like driving a Porsche, but it would seem a bit odd to lament a wild increase in new Porsche prices or my salary not keeping up with owning one as a "problem". I also really like that in Paris you can affordably get a glass of real champagne with every meal, but I hardly consider it a "problem" that in the US this isn't really reasonable.
Things are getting more expensive, for some people that means they can't eat steak as much as they like, for others it means they need to move in with their parents, for you it means you might not live in the heart of one of the most expensive and desirable cities in the world.
I've always found it a bit odd that in the tech community there is this assumption that people have the right to live wherever they want, and that somehow living in NYC or SF during it's prime isn't its own variety of luxury good. I enjoy champaign when I'm in Paris, and am glad that at least for today I can drive a Porsche. I've spent plenty of years in a beat-up old Ford and drinking yuengling, won't be terribly surprised if I spent plenty more doing the same in the future.
What % of available living space is not lived in, and further what % is owned by foreign nationals.
I know that in MANY countries, one is precluded from owning any property if not a citizen. Obviously this leads to a bunch of corruption issues with bribing and marrying nationals for access to property, but the USA has literally zero control on property ownership.
You know how much foreign money laundering is done through US property ownership?
MOST of it.
A vertical zoning law might be an option:
There are places like Singapore where you cant build a high-rise unless the subterranian aspects of the project dont include a connection to other sub services, like the walkway malls and such.
I say do a % split on a vertical level which must include subterranian levels as a course:
The building MUST include underground parking, a commerical section and a range of income level sections.
You cant just build a high-rise of $millions apartments.
Look at Millennial Tower in SF. What a disaster. I HUGE legal BS and not a single person with a net worth of south of 10 million was accommodated in that disaster - but it still cost the city (i.e. tax payers who are NOT worth >10 million -- millions of dollars.
My quick google says 4% of apartments are vacant in nyc. Got to believe the vast majority of that is structural vacancy while landlords clean units and look for new tenants. feels like a none issue to me.
How much of the rising rents are risk premia for future cases of "government says you dont have to pay rent and cant be evicted" that we experienced in 2020-present? I'm curious if there has been a Natural Experiment comparing rent increases in places which did vs didn't have eviction moratoriums during COVID.
> I like mass transit. I like not owning a car. I like that the city is generally safer than the rest of America. I like that it's the center for tech on the east coast, the arts for the entire country, and finance for most of the world. I like that we generally get along in the city, across many cultures and backgrounds. I like it has some of the best food in the world.
Isn't most of that true for most large cities anywhere in the world?
Consider Amsterdam.
- Mass transit? Yes.
- Not owning a car? Sure.
- Safer than America.
- Tech hub, yes.
- Finance hub? uhh, does it really matter?
- Everybody gets along, across many cultures.
- Food? Depends on your taste, but all kinds of cuisine are available.
Or consider Singapore/London/Gothenburg/Paris/Toronto/so-many-others. Similar deal. Sometimes even a better deal, depending on your priorities.
Of course, I fully agree that NYC is a cool place :)
NYC is pretty much the only quasi-European larger city in the US, and in North America maybe only Mexico City and Montreal are comparable. Boston and DC are more influenced by cars but still have a large fraction of the city that's walkable. The effect of cars on urban fabric is very depressing elsewhere in the US.
You and everyone else buddy, that's why you're going to be priced out just like the people before you.
It's nice you enjoyed your ride from $2,000/month to $5,000/month. That range was absurd to the people that went through an earlier range, and so on and so forth.
Agree with everything except the last part. Brooklyn is a fantastic place to live, and takes 20 mins or so door to door to get to most parts of Manhattan.
I'm sorry, but... you might be able to get to FiDi from downtown BK in 20 minutes, door to door. If you live anywhere else in BK, from Greenpoint to Sheepshead Bay, you're looking at 30 minutes minimum to get into manhattan -- probably closer to an hour door-to-door.
Not trying to be rude here, but your statement does not seem to match my lived experience. Maybe you can get 20 minutes door-to-door on a citibike?
The rent in areas adjacent (downtown Brooklyn included) to Brooklyn Heights is nothing to sneeze at. You're looking at equal or higher prices to Manhattan.
Even areas further away, like Prospect Heights or Crown Heights, with decent access to transportation have seen quite the uptick in price and availability.
Eh. I spent a summer there once. Admittedly in the 80s and admittedly as a relatively poor student intern. I like visiting NYC for a few days every now and then but I couldn't wait to get out at the time.
This reads like a silly NY maximalist without really any context of the rest of the country. New York is cool and all but I’m not paying 60k in rent to live somewhere marginally better then a handful of major cities in the country. I moved to the PNW and the idea of living in a city now seems insane
Honestly don't get what is so special about NY... It's not bad, but on the flipside is pretensious, expensive, and difficult to travel to/from.... also all of the things you mention that are positive points are by no means unique to new york.
There are many, many places to live with crime rates far lower than NYC so I'm not sure I really understand this. Maybe you mean compared with most places you could see yourself living?
For example, I live in a nice town in CT and the crime rate is 3.99 per 1000 vs NYC which is currently about 13.3 per 1000, making NYC (as a whole — I understand your point about neighborhoods within the city) 3x higher in crime.
I understand the other things you appreciate about the city. It's great to able to walk outside and have amazing restaurants and other amenities a few feet away; there's a reason many people like the city.
As someone who currently lives in Philly… yeah, I feel this. I love being able to get around on foot and by transit, but Philly is still a pretty car-centric place compared to what I’ve seen of NYC, and I wish it weren’t.
That plus making it easier/safer to get around by bike/scooter/etc. That’s something even NYC doesn’t seem to do well; have to look at international peers to see good examples of that.
Before I start with my comment, I'll remind everyone that averages skew very high when there are outliers. NYC has a high quantity of extremely high rent tenants. I wish more news articles used medians and median per capita when discussing rents.
The main point I want to make: even with those high rents, we tend to forget how much our cars cost us, directly and indirectly.
Directly: AAA's average new car TCO is close to $10,000 a year. Multiply by two for a typical couple and that's $1600 a month you could dump into your NYC apartment's high rent. Unlimited MTA rides only cost $1500/year/person.
Indirectly: There's the obvious car crash issue, the top killer of children (well, guns just passed that, but luckily NYC is safer than the average American city in that regard), but the other main example is health. We're not supposed to sit all day. My doctor moved from a car suburb to the city and admitted they lost weight and walk a lot more. When walking is the easier option compared to attempting to drive to your daily errands, it's much better for you and extends your life, especially when considering your high-quality years of life.
Number one premature killer is heart disease, by far.
Even if you're just walking to the subway, that's a lot more activity than your commute to your garage.
NYC's obesity rate is half of the national rate. HALF! That's downright incredible.
In NYC I see very old people walking everywhere, stereotypically playing chess in the park, meanwhile I have suburban relatives struggling to walk across the Walmart parking lot and they haven't even hit 70 years old. They may live into their 80's but it will not be pleasant for them. The difference in alertness is noticeable. As a bonus, old people in NYC never had to drive so they never have a retired life feeling isolated to their home.
I think the best way to try and stabilize rent is to buy a condo. It's not a silver bullet due to property taxes and HOA fees that rise with inflation, but it's still a slower rise than renting, I think. You can definitely find 2 bedroom condos with monthly payments under $5000 in Manhattan.
If you're interested in what NYC apartments are really like and how far your money gets you (along with some general YouTube vlogging entertainment), a channel I recommend is Cash Jordan. I won't link it but I'm sure you can find it. Like any other real estate market, it's all about compromises. If you want to live in NYC and pay $1000/month/person, you can definitely do it. You can also pay $10,000/month if you want.
The big caveat to everything I'm saying is that the poor are unlikely to live in the most walkable areas, and a lot of them will perhaps have to own a car. This is definitely the case in Chicago, where the most walkable areas are also the most desirable and affluent (I wonder why that is? Maybe our whole country would be more desirable and affluent if it wasn't designed to be a cash funnel where we dump our income into constructing vehicles, maintaining the infrastructure and utilities utilities of nearly unused land, and burning oil?)
> AAA's average new car TCO is close to $10,000 a year. Multiply by two for a typical couple and that's $1600 a month you could dump into your NYC apartment's high rent.
First, you can get by just fine without a new car. My car was $26k new - 18 years ago. I’ve put another $10k over the years in maintenance (tires, oil, repairs). Insurance is $500/year. Gas is maybe $2k/year at $4/gal. Not even close to $10k/year.
That caveat you apply to averages for rent also applies to cars. Some people are obsessed with having a new car. That’s not the price of having a reliable car.
Second, if you’re a couple, you don’t need two cars. That’s another luxury that many people get by without.
Finally, the car takes me out of town monthly into the mountains. So you would need to factor in car rentals for leaving NYC in your equation if you wanted a fair comparison of what people actually get out of their cars.
> NYC's obesity rate is half of the national rate. HALF! That's downright incredible.
Cause or effect? A lot of people with mobility issues end up obese and having mobility issues is a fucking nightmare in NYC. You just forced the unhealthy people out of the city by design.
> As a bonus, old people in NYC never had to drive so they never have a retired life feeling isolated to their home.
+1. It’s a great place to live… if you don’t have health issues that make mobility a problem.
“Living on the top of Mt. Everest is so healthy! Look at all of the healthy people up here!”
I grew up in NYC and just completely disagree with your analysis here. There are a lot of hidden costs to live in NYC such as some of the highest income and sales taxes in the country, apartments where even if you own if a problem is found the forced maintenace costs can go up thousands a month and you get evicted for not being able to pay. Health driven by sin taxes on soda and tobacco, and much more along those lines than just people walking places.
It is true that older people in NYC are seemingly healthy, but they're definitely a very specific type of person.
People that want to be conspicuous have to display their success where it's going to be seen. Living in a place that is "central" in so many ways is a competition to see who can hang in there. The only way to stay is to keep winning bigger.
What? Most people I know in Manhattan are just people with jobs who enjoy living in the city. There is no "displaying their success" or "keep winning bigger" mentality to be found in my sprawling NYC-based friend group. Sounds like something from TV or the movies.
Housing and land is a non-transable good, and therefore there should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income, and renting to a representative distribution of tenants so to prevent guettos.
Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity.
The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility, which could be improved by the setup described above. Many attempts at public housing failed because they just tried to provide housing for low-income people in separated and/or undesirable areas, with a predictable outcome.
Housing =/= Land. But our policies which heavily kneecap our ability to build more [0] make it such that Housing starts behaving like Land.
The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build.
I personally think that achieving affordable housing prices via mainly government intervention is not a sustainable approach. You end up consuming both economic and political capital.
A more sustainable approach sets clear, transparent rules that specify under what conditions do you get to build by right. Then 90% gets satisfied by the market, the remaining 10% can be addressed by government investments, if needed.
The only sustainable way to get affordable housing is when the market price is affordable.
Land, on the other hand, is another story. There is strong economic evidence that many of the observations of Henry George [1] are spot on: Land rents tend to take a massive toll in the economy, cause inequality and misery, all without requiring their owners to provide any added value. The proposed solution, again with solid economic fundamentals, is to tax the unimproved value of land at 100%. Henry George further argues that the proceeds should be equally divided among citizens, a citizen dividend if you will.
[0] e.g. it takes 4 years on average to get a new building permit in SF, 90% of the city is zoned for single family housing, any neighbor etc.
The solution of course is to build more, but it just happens that the private initiative always build under demand because it is inelastic and it's in their interest to keep the market as so.
Of course the Vienna success came from public intervention because otherwhise you'd have exactly the same situation of hundreds of other cities where rent is always a hefty amount of modal income and no matter how easy and cheap is to build it just happens those with access to capital never meet demand.
You need to build more, in many cite MUCH more, and you need vacant housing so floating population can come and go easily.
> The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build.
The other two secrets are tiny apartments (200-400 sqft), and an incredibly reliable public transportation system. Tokyo has a massive sprawl -- people can and do live far from their work. The average one-way commute time in the Tokyo metro area is almost an hour.
I think, fundamentally, the problem is that there is a highly speculative market (real-estate) attached to a basic needs market (housing).
I think of myself as right-of-center, but think George was more or less spot on w.r.t. land.
I wonder if there is a solution in banning rent itself? i.e. force owners to transfer a % of ownership equal to rental fees received from tenants and allow them to discount improvements against that.
> The only sustainable way to get affordable housing is when the market price is affordable.
And the only way to reduce the market price to affordable rates is to crack down on the demand - there is no reasonable way to expand the offer side in many cities any more since they don't have the space. And most demand is driven by the fact that rural areas have been left in a decrepit state for decades: highways, bridges and other infrastructure is crumbling, there is no public transport worth the name, forget about fast internet (or fast internet offered by a crap monopolist), employers have closed down or moved to urban areas, schools and medical services are constantly closing or underfunded...
To fix the urban rent explosion problem, we need to fix rural areas and make them livable again.
Too bad there are "investment luxury hi-rises" popping up all over the skyline that are largely unpopulated. If that's what people want to build to park their billions, we have other problems to tend to first.
My two cents : I believe that if you increase supply and allow more affordable housing in a city, it will only marginally decrease prices but will mainly attract more people to this city.
I think the solution to housing cost is to make smaller cities, towns and the countryside more attractive by having higher local tax rates in cities. This source of income could be used to build better infrastructure in the rest of the country.
> All policies that attempt to address housing costs that don't increase supply are treating a symptom and not the underlying cause.
So are the ones that do increase supply, so long as they are not doing it in a way which deliberately undercuts the fact that there are positive feedback loops at work (and cutting those positive feedback loops means reducing quality of life and economic opportunity in ways no one wants.)
Among the thing that drives demand for housing is available work (demand for labor). Increasing housing supply so more of that demand is met increases demand for local services, and thereby available work, increasing demand for housing. That's not the only positive feedback loop involved, but it's one of them.
Increasing the supply alone does not counter the gentrification / ghetto effects the parent comment talked about, in fact it might amplify them.
A gross oversimplification, but if you somehow make ten thousand new apartments available in Manhattan at $1k/month, they will eventually fill up with low-income tenants, which will make them undesirable. Pressure on all the existing $5K properties will remain the same.
High rent reduces demand and reflects an equilibrium between supply and demand. That, and people in Manhattan simply can afford to pay more, so are able to bid up the prices higher than tenants in other places.
Sure that’s the capitalist narrative explanation. The actual, human, explanation is that landlords see that they can get away with charging absurd rates because consumers are willing to make dumb decisions to get what they want, so they do it.
I’m sick of these economic abstractions that constantly try to explain away our problems, and take away the responsibility from the human actors that cause these effects. It’s not some abstract “supply and demand” that we should focus on—it is the landlords and renters and their decisions that are to blame. We need to introduce some agency and accountability back into our discussions of economics otherwise capitalism will continue to be an abstract machine in which horribly unethical actions are justified by removing human actors and human culpability from the equation. Belief in “the market” is not dissimilar to religious belief. Furthermore, analyses in capitalist terms often lead us to more problems. If the problem is “supply”, people will say “ok build more homes”, but that first of all never seems to actually work and secondly has a large number of additional negative effects such as increasing overcrowding and climate problems.This ridiculous tendency to not actually blame the people responsible for these negative conditions is ridiculous. It’s a large part of the reason we’re in this mess.
> (...) there should be heavy state intervention (...)
This has been tried so many times throughout different cultures and time periods, and by different means. It will not benefit whoever is actually living on the properties, but will detract from their situation.
Economics in One Lesson by Henry Hazlitt has several concrete examples of attempted interventions, and is written to give a basic intuition on why this happens (Spoiler: Opportunity costs).
The only permanent solution is just to build more buildings, or at a political level simply making it easier to build new buildings, which directly increases supply and thus causes the lowering of prices. This makes perfect sense when you think about it: There are not enough buildings, so we need to have more buildings.
It continues to be disappointing to see so many people turn to state power as a solution to the problem of scarcity. Scarcity is solved through production not political power.
It's not without its flaws, but Singapore has an extremely effective public housing program run by the government's Housing & Development Board (HDB) where 89.9% of Singaporeans are homeowners.
The "just build more" supply argument doesn't hold water when you have an unlimited source of demand from institutional investors and speculators that use housing as a place to park their money.
Vienna was only able to pull that off after a devasting war left nearly everyone poor. It's not clear that the US could seize 40% of rentals in Manhattan without starting a revolution.
To your other points yes. Land Value Tax now! There's simply no good reason for why we're all taxed so heavily on our labor while land speculators get away for pennies.
have 2.25 million population before WW1 and then decline in population for almost 100 years? They still haven't recovered (1.89m). It may be an enormous mistake to read into their allocation policy because they've simply had a very easy time allocating so far.
St Louis population has declined for 70 years. It is very affordable. It's just not hard to accomplish affordability like that.
Vienna suffered and suffers housing price inflation like any other european city. In world wars not only people dies, but housing units are destroyed too.
Also, the point of the social housing in vienna is not only the dimension of it, but how they do it. The design, the demographics, etc.
There's a clear distinction between their program and the myriad of commieblocks in other countries that become low-income guettos to sink public money.
Public housing done right is more than just building dense, putting poor people in it and be done with it. That's a recipe for disaster.
> should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income
This is great policy if you want to make housing unaffordable. When supply is less than demand, prices go up. Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing.
> Rent is the main detractor of disposable income which hurts the rest of the economy
I’m happy (perhaps not quite the right word…) to pay rent. I don’t want to own property. It’s a large, illiquid investment with high transaction fees, carry costs, and concentration risk. My landlord takes all the risk of owning the property (prices don’t always go up after all).
>Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices).
This is not reality though. Here in the UK our housing is in major crisis because people simply cannot afford the insane price increases. Pretty much everyone I know shares their living situation, on their own they would not be able to afford basic amenities.
The guardian today published an article showing:
>Average monthly rental payments were now 40% higher than they were 10 years ago, while typical mortgage payments for the same properties were up 13%.
Landlords and property owners are hiking the prices way beyond reasonable value, in some parts of the country rent is up by over 20% in the last year alone. By your logic there should be an incentive for builders to increase the housing stock, but private enterprise aren't building anymore homes now than they were 10, 20, 30, 40, 50 years ago.
We do however have a situation where the average mortgage is about £900 per month, whereas the average rent has skyrocketed to £1600 per month (£1100 outside of London, £2200 in London). Available rental stock is down 25%, with demand up 5%. It's great for property speculators, buy-to-let landlords and property developers, people are offering above asking prices simply to secure a home.
>My landlord takes all the risk of owning the property (prices don’t always go up after all).
Sure there is risk, but when you charge 30% more than you repay for the mortgage, while at the same time property prices rise 75% in 10 years, it's safe to say that the cash cow is being thoroughly milked for every last drop and as a result many people are suffering.
Ultimately there shouldn't be 'risk', this mindset is a big problem. Homes are a fundamental, basic human need. Using them as an investment method, business model or means to hedge against inflation, is causing rampant speculation and quite honestly extorting people that have no other choice, exploiting vulnerable families that need a home. It should be an extremely tightly controlled market, with sufficient funding to ensure that quality & affordable housing is available for everyone.
Yet it isn't working in most european cities. Price increases and capital holders always build behind the offer/demand curve so they get a better yield from it. Also, rent is always high enough to milk as much as possible from modal income, as demand is pretty inelastic.
Also, read carefully, I don't want price control directly onto the private sector but the adminsitration controlling a big chunk of the offer.
Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more.
The only reason the prices go up is because of greed basically- because people say "hey I can just charge more and people will pay more!". And there in lies the bullshit of the free market once again. It always benefits the people with money, who can afford to pay that amount more "just to get what they want".
The last few years in particular have made me so tired of hearing about people talk about supply & demand like it is some unarguable hard scientific fact. It's not even close to that. It just represents how much people like to price gouge because "they can"
>Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing.
And the following part of this is also just more bullshit. I'm not saying you are "wrong", but you say it as if that is how things have to work and there is no other alternative.
Every word of what you said is based on greed and squeezing the most you possibly can from people. Please realize that.
> Those price increases incentivize builders to increase the housing stock
Ahh yes, walking around in NY seeing building projects to increase the supply of housing in the 4th dimension where land is plentiful and the rivers are clean /s
Been this way in Vienna for many many decades and still it’s a very affordable city. So I dunno, I do believe this can go wrong if implemented incorrectly and has done in some cities, but it hasn’t here yet and looks fairly stable for the foreseeable too.
Why would housing become unaffordable if the state intervenes? The purpose is precisely to control affordability. Prices are controlled for social housing, and flexing supply allows you to influence the free market prices.
Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified. Like what we are seeing in this news piece.
I don't know exactly how it works here in the Netherlands, but as far as I understand the government leases land to the constructors at its own pace, with strict quotas on social housing, to let vs to buy ratio, and free-market properties. It isn't perfect (massive bubble on the free market right now) but seems to work well enough.
We're all very aware of how the economics should play out, but look around you, it's not working that way in a bunch of places. That's because houses are being used as investment vehicles, with rentals being thoroughly flogged because they know people have no choice but to pay. No amount of building will help if the value of the property is not intrinsically linked to the supply and demand of places to live for people who want to live there, but is instead linked or at least heavily influenced by what investors with increased buying capacity are willing to pay.
Unless of course your builders wise up and work together to produce the bare minimum of housing stock required in order to keep prices rising, as they don’t want to flood with stock and reduce demand.
Is housing unaffordable in Vienna? If so, your mechanism might explain it. If housing is not unaffordable in Vienna, your explanation seems likely to be missing something.
Rents are already through the roof. If that hasn't incentivized builders to build enough housing to lower rents in places people want to live, why not go for the centralized solution?
CMV
The "let the free market take care of it; government intervention can only make it unaffordable" view is standing on extremely shaky legs today.
Yet somehow this doesn't seem to materialize in any meaningful way, the price of housing has only been going up exponentially and I'm sure builders are doing their best to build more but it's not getting any cheaper.
> Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing.
The issue, empirically, is that (a) we don't see the right housing being built, and (b) we don't see quality housing being built. We see a lot of high-end luxury units being built, but what we need are more 1- and 2-bedroom units within 20 minutes (preferably, by affordable public transit) of where people work. We also see a lot of large (and therefore expensive) but cheaply built McMansions that'll be falling down in 20-40 years, so the long-term picture of the housing stock is not improved.
What we need is for the government to step in and build affordable housing as a floor at a controlled price ("commie blocks"). No one will be forced to live in one, of course, but they'll be an option; the rich can still buy property on the market if they're so inclined.
> My landlord takes all the risk of owning the property (prices don’t always go up after all).
If you own your house and control your geography (i.e., you'll never be forced to move due to economic inopportunity) then you have the truly risk-free position. Renters are at much higher risk (log transform, Kelly Criterion) than landlords, because real estate costs are such a high percentage of their
budgets.
The problem, of course, is that owning a house, while it gives you a zero beta to the housing market in theory, still does have the risks you described. For one thing, other people can do things that damage your house's value--both its subjective value as a place to live, and its objective market price--such as building highways and obstructing sun/view. The other issue is that, in today's hypercompetitive world where in decent employment every job search is national (and possibly international) it's impossible to control your geography... you could be laid off and forced to relocate to get your next position.
So, you're not wrong in general. I think it's a wise financial decision for a young person to keep renting one's place--as opposed to renting money to buy a place--but I also think it's inaccurate to imply that landlords are taking more risks than they really are. It really gets on my nerves when rich people and employers talk about how they're "taking all the risk" and therefore deserve more, when the truth is that the poor (involuntarily) take all the risk, because each $100 means so much more to them.
> and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity.
Property of course requires maintenance and management, so the sleight of hand here is to define away all those aspects of ownership so that by definition all that's meant by "landlord" is "old guy who cashes checks."
But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass, somebody has to pay the taxes, somebody has to -- yes -- collect and cash the checks. Somebody has to respond to tenant requests and emergencies. Somebody has to advertise the property when it's vacant. Someone conducts showings and screens tenants. And, maybe most important, somebody assumes the risk of a bad tenant or a down market or a declining neighborhood. And so on and so on.
Whether all this is done by the owner personally or hired out is irrelevant. There's no reason to believe government can perform these functions better than private owners in a market.
A simple proof that landlording is not free/easy money is to realize that millions of middle- and upper-middle class Americans who -- if not today, certainly 5 years ago before this most recent run-up in prices -- could, if they wanted to, afford to buy property and become landlords, but they mostly do not do it. And since nobody turns down free/easy money, landlording simply cannot be free/easy money. QED.
I've repeatedly been told by people who've done it (including my parents) never to become a landlord, because it's absolute hell and you'll end up making under minimum wage and tenants will fuck you over until you're even in the red and it's impossible & expensive to evict anyone even when they're not paying and causing more and more damage to the house with each passing day.
Then again, I've had others tell me it's awesome, you just have to pick your location carefully (one exclusively bought very close to nursing schools, which seemed to select for tenants who'd stick around at least a couple years and who'd pay their rent and not run a meth lab or smear shit on the walls or anything like that).
FWIW, I'm with you, I think rental income ("landlording") and airbnb-ing are both legitimate demand, and the system would work fairly if we didn't have artificial constraints on supply.
Insofar as landlords actively work to constraint supply to artificial inflate rents, it is immoral behavior (but 'muh' neighborhood) and we should not allow it.
Maybe I don't do it because I find it morally questionable, not because I don't think it's free and easy money. I'll absolutely turn down free and easy money for something I think is wrong.
Maybe they realize that being a landlord is an economically and societally destructive measure that saps productive capital from working and middle class. It’s vampiric. And awful.
>Many attempts at public housing failed because they just tried to provide housing for low-income people in separated and/or undesirable areas, with a predictable outcome.
So the taxpayers should pay so the people with low income or no income can live iny Manhattan? Why not also provide them with expensive cars and exotic vacations?
> So the taxpayers should pay so the people with low income or no income can live iny Manhattan?
Yes. It's a city not a luxury resort. If people are to work all kinds of jobs at all levels of income there, then people at all income levels should be able to live there as well. This mechanism accounts for that.
> Why not also provide them with expensive cars and exotic vacations?
Maybe they should idk. Seems completely unrelated though and no one is arguing for that here so I don't know why you want to or why I should.
Welcome to Galt’s Gulch, where only millionaires can afford to live! Every minimum-wage is being filled by someone who’s constantly exhausted from their four-hour commute from Poortown.
- How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building?
- With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference?
- Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?
> How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building?
I don't know if I understand your question. We're talking about public housing, the owner is a public entity. For every building there are slots by income and they're filled by a FIFO system if you will.
I know in the US this is more difficult but in most euro countries the administration can check what you earn yearly. It's semi-automated already.
> With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference?
The owner is the public housing company. No guarantee for anyone. There are different proposals, for me 20% for annualized income is simple & good enough, I wouldn't want to make it very complicated, but I'm sure it can be.
> Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?
Overall supply did, but due to political factors the public housing system didn't expand at enough rate to keep up with demand.
I agree 100% - on top of all that, the current housing strategy reduces the mobility of the workforce, so it becomes more difficult to move skilled workers from one region to another. On top of that, being generally considered as a persons most valuable asset, almost no-one wants "affordable housing" in there area, as it would bring down the value of their most valuable asset. We need to start considering people as the valuable asset, and not the house they live in.
>The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility,
Maybe some groups of people don't want to live together with other groups of people? Different people living in different parts of the city is just natural evolution.
Why should the state force them to live together?
And why should the state tell you where to live? Why should the state be involved in your private life at all?
> Different people living in different parts of the city is just natural evolution.
A claim like that needs supporting evidence. I see no reason why segregation among different members of a single community is natural.
> Why should the state force them to live together?
Because segregation breaks down the social bonds in a community, which is bad for the social fabric, which is bad for the community's ability to live and work together, which results in the breakdown of that community.
> And why should the state tell you where to live? Why should the state be involved in your private life at all?
The state does not exist in Libertarian theory. The state already has numerous rules about your private life. You could make the same arguments against zoning and building codes.
Housing/rent is a part of your disposable income. Some people live in expensive places because they want too, but no one is required to live in an expensive place because they have too. I agree in the idea of affordable housing but I don’t think it’s fair to promote sweeping changes because people decide to live in expensive cities like NYC.
A lot of people are born in nyc you realize? And in other expensive places?
Also if you evict all the poor people from the expensive cities, who do you think is going to work the jobs that make it possible and desirable for the rich people to live there?
By what mechanism could this possibly work other than exploitation and coercion. I realize that's the current status quo, but do you? Do you understand that's what you're endorsing here with this argument of "poors gtfo?"
I think you have no idea how much things break and need fixing. I have a friend that owns a few houses that he rents out, and it's a part time job just keeping up with fixing things. Between them, there's a few thousand items that can and do break and need maintenance. He would not be profitable if he hired out to fix things. Outside Labour can easily be $100/hour and if you need something even a little bit more serious its easily $1000/day.
This is the hidden cost of manufacturers making things as cheaply as possible, and often out of plastic. Property taxes and utility bills and problem with tenants. Navigating disputes, noise complaints, missed rent, move outs and move ins, signing new lease agreements, landscaping, leaky plumbing, damaged flooring, overgrown trees, it's endless. It's a part time job.
IMO the heavy state intervention should be massive capital investment into FAST public transportation infrastructure. Make areas further away from city centers viable for commuting and the problem gets largely addressed.
Ironically, this was what NYC (technically, pre-NYC) did over 100 years ago -- there was a thriving network of streetcars in Brooklyn[1], which overlap almost exactly with neighborhood density. We then tore them up, leaving just the subway lines and a bus system that traces the vestiges of the old streetcar lines.
Streetcar suburbs[2] not only work, but are imminently sustainable compared to other forms of urban/suburban extension.
Government intervention reflects popular will, and The People will themselves a housing crisis. They don't like change, they don't like neighbors, and they certainly don't like neighbors from different income levels than their own. The New York and San Francisco housing markets might be better governed by the Viennese electorate, but that's not on the table. They are governed by their own electorates, badly, and these are the results. Increasing the intensity of that governance will only amplify their already-revealed and already-governing preference that their cities be exclusionary museum pieces.
Put another way, if you accept that housing scarcity is bad, going to the public and saying "How do you want housing in your city to be?" is only going to make it worse.
> Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost no value,
Have you considered that housing might actually be valuable? If it didn’t provide value, why do you think that Vienna seized so much of it to give out to its citizens? Maybe try to find a different way to phrase whatever you’re trying to say.
Assuming you’re referring to property owners getting by doing nothing. That’s false unless they are a slumlord.
Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna?
> The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas
This is not how it works in the US for the last 50 years or so. Most places force every new building to include low income units.
> Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna?
Rent from another landlord mostly. Vienna has close to two million people (give or take some), however only around 500.000 of those live in buildings owned by the city [0]. Those are 1800 buildings by the way, definitely a lot but not unbelievably massive.
Compared to some private companies, such as Vonovia the city of Vienna is just another big player, but by no means massive enough to actually be a monopoly or anything.
It is true that they of course hold a lot of the supply in Vienna itself, housing a quarter of the population, but that still leaves three quarters not living in any of those buildings. It's easy enough to not live in apartments owned by the city if you don't want to.
[0]: www.wienerwohnen.at/wiener-gemeindebau/wiener-gemeindebau-heute.html (Source in German)
>and renting to a representative distribution of tenants so to prevent guettos
Sounds like a creative way of saying "make sure the poors have enough rich people near them that they feel compelled to stay in line and keep a low profile."
There are few things that make apartment living worse than having neighbors who think your standards of behavior are too low and who you have to avoid pissing off.
Property owners providing almost no value is just factually wrong. Their function is similar to insurance. You pay rent to live somewhere because you don't want to take the risk or can't get the loans to buy a property yourself. And it costs real money and time (i.e. real resources) to build those homes and maintain them.
In return property owners (or insurance runners) can get rich off your monthly payments as well as the inherent value of the property (/insurance company), but because of risk of ruin, opportunity cost for other investments and other related phenomena, it can mathematically be a total win-win for both sides.
What everyone complaining about property prices also always seems to forgoe are two things: First, people are clearly able to afford them or the prices wouldn't go higher. The myth that property investors buy homes on mass and don't rent them out which supposedly creates this pricing hike is idiotic. All of these big cities with insane rents have very low vacancy rates compared to the national average.
In almost all of these places where people complain about rent, we are talking about big popular places where everyone wants to go even though there are tons of realistic alternatives all around the country. The situations where it's economically totally necessary for you to move to an expensive place but at the same time you can't afford the rent is so rare as to be virtually non-existent.
Even the idea that people are displaced from their homes is an issue on a smaller scale than people make it out to be. That's because income in those expensive places is much higher than in cheaper places. There are people displaced from their homes, but that's because of poverty and other aspects of gentrification that are not necessarily tied to rent.
> it costs real money and time to build those homes and maintain them.
As a renter of a dangerously unmaintained property, whose owner has never worked because he inherited a bunch of apartments, I can only laugh hysterically at your ridiculously-over-the-top sarcasm.
It's easy to agree that property owners provide value, some more than others. Anyone who thinks otherwise is not seeing the big picture. On the other hand, you seem to be ignoring the realities of supply and demand, which can quite simply allow rental costs to increase well above the value that owners provide.
Obviously I don't know, but I suspect you might be seeing a king of survivorship bias. Many people I know were in fact displaced from the place they want to live, including careers and communities they were a part of, due to cost of living. Housing is a big part of that. Are you surrounded by people who can afford it, and perhaps unaware of the people who can't?
One of the principal reasons Manhattan rent is so ridiculous is because of state intervention. More intervention, the worse it is going to get.
> Rent is the main detractor of disposable income which hurts the rest of the economy,
This is a silly statement. Rent is part of the economy. Paying rent doesn't damage the economy anymore then paying for food or paying your electrical bill.
> and property owners provide almost no value,
They provide and maintain their property.
> but to provide access to housing for people who has no capital for it,
And for a wide variety of other reasons. Not everybody wants or is a place in their life were massive permanent investment makes sense.
> which is service that could be perfectly provided by a state entity.
I think a lot of office workers would love that idea, except they were told in the past ~3 months its back to the NYC office or they're fired.
The limited supply (3 years worth of eviction backlog) + office mandates hitting this spring are exactly why prices went crazy seemingly overnight after a pretty calm 2021
Totally agree. It is one of the perfect resources to extort people with. Unlike food the price of houses rarely drop to zero, and often go up. Like food, it is very essential to people.
What you propose is a very socialist solution. I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal (as they calculated that's what housing would cost using cost-based-pricing).
IDK if it's a very socialist solution, provided that it aims to increase disposable income and savings, that will pour into consumption, people starting their own businesses, etc.
Think also that the program can avoid deficit by not having only low-income tenants, providing more opportunities for social mobility and allowing more consumption which means more VAT taxes, specially if you're smart enough to provide your tenants with supermarkets, bars, etc, which isn't difficult if you pack enough people and provide space for bussiness in the ground floors.
Perhaps only as part of a way to ease those with low income. But this is no good in general. You are charging one person more than another for the same good simply because of higher income. This is price discrimination and is unjust. Usury can work in an analogous way, such as when someone raises prices to exploit increased need even though the cost of production of the good sold is the same.
> property owners provide almost no value
They provide shelter and must maintain that property. Problems occur when they begin to charge unjustly for services rendered. This calls for regulation, not state ownership. No need to go to extremes.
> The current setup creates guettos [sic] by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility
Social mobility isn't the only consideration and not the summum bonum and it exists precisely to allow people to sort themselves into social classes (otherwise, why have social mobility in the first place). People of a given social class tend to live closer to each other because they share class cultural similarities, concerns, and affinities. That doesn't mean there is no contact between people of different classes, but the solution isn't to mix everyone up into a uniform mass. There's a middle way between the hermetically sealed ghetto and uniform distribution, and it doesn't involve violating the principle of subsidiary.
Ultimately, it is poverty that is a problem, not having a lower or higher income as such.
As a New Yorker myself I do wonder where this ends up. Me and my relatively well paid friends can afford to live here but we depend on a lot of lower paid folks for the city to function. Grocery store clerks, delivery drivers, coffee baristas, all that sort of thing. Maybe right now they have a half hour subway ride to work and that’s acceptable. But as they get pushed further and further out it’s going to break down somewhere, no one is going to commute 90 minutes for a minimum wage job when there are plenty of jobs available elsewhere.
Wages will need to go up, which means the costs of goods and services will need to go up, and the city will get even less affordable.
Moreover artist communities flourish in urban spaces with cheap rent, like New York in the 1970s, Paris in the 1920s, Berlin in the 1990s and so on. Without that you just end up with Dubai or Monaco with shittier weather.
Exactly. Wealthy residents should at some point realize that culture and entertainment venues/options are (often) created by lower income residents. If that disappears you get soulless places which are dramatically less fun to live in. Not to mention the service industry workers, who also need to come from somewhere.
Half hour? That's been debatable for some time now. As an example, it takes 20-30 minutes to commute from the Upper East Side to Midtown West, barring any subway issues.
There are very few grocery store clerk, delivery drivers, and coffee baristas who live in UES. They've already been pushed out to the edges of Manhattan and other boroughs.
The 20-30 minute commutes have been snapped up by younger people who have been priced out of the 10-15 minute commutes. You currently see a lot more ads for rentals that seem to stretch the boundaries of neighborhoods (e.g. West 110th Street == "Upper West Side").
The wait lists for rent stabilized apartments are incredibly long, so the chances of a grocery store clerk, delivery driver, or coffee barista getting into more affordable housing closer to their place of work is pretty slim.
And good luck if you're an hourly employee with a long commute when the MTA lets you down in the form of a delayed train, or express-turned-local, etc. You're either penalized by your employer (or angry customers) for arriving late, or you penalize yourself by leaving the house 30-45 minutes earlier and sitting around unpaid until it's time for your shift to start (ignoring any cost of leaving the house earlier, e.g. cost of extra child care, or risk of being unreachable on the subway by a dependent).
> You currently see a lot more ads for rentals that seem to stretch the boundaries of neighborhoods (e.g. West 110th Street == "Upper West Side").
To be fair, they've been doing that particular editorialization for over 20 years. Bloomingdale was subsumed into the expanding morass of the UWS in the early 2000s; Morningside is next.
The waitlist for NYCHA apartments in incredibly long, or units set aside for low-income tenants in new developments. But regular rent stabilized apartments don't have wait lists, those just go on the market to get scooped up like any other place.
I'm a well paid software eng in nyc and I have a 30-45 minute commute to work, I think the people you're talking about are already commuting 60-90 minutes if they work in desirable Manhattan neighborhoods. But I agree with your message.
Hate to break it to you and your relatively high paid friends but that bodega cashier is spending an hour on the subway both ways from their current working class neighborhood. Furthermore, half of that persons salary is going to groceries due to inflation. There has to be a breaking point at where NYC will hit stagflation and hopefully all useless instagram coffee shops will be hit by "market conditions".
Also as a New Yorker, worth noting that many of the lowest paid workers are undocumented, and their flexibility to pursue higher paying work is limited. Sadly, this means that 60-90 minute commutes are not out of the ordinary.
Commuting 60+ mins on the subway is not terrible compared to some 3rd world countries. NYC is a full incentive driven place. It may seem inhumane to some, but that's just the way the world works. It's normal to have a super small apartment in HK or Tokyo, even if you're upper middle class. Just economic incentives at work.
> no one is going to commute 90 minutes for a minimum wage job
Perhaps not minimum wage, but if the Bay Area is any evidence, people will commute that much time for a low wage job.
They are often losing out longer term (i.e. not considering the accelerated depreciation of their car), but in the thick of day to day survival they might not see that slowly happening.
Or do the places paying low wages now just need to accept a smaller profit margin or lower executive pay?
It's unquestionably true that there are some places that pay low wages that cannot afford to pay better wages without increasing prices; however, we seem to have collectively decided that that's the only way wages can increase. But that ignores the fact that corporations in all (or at least many) sectors have been enjoying record profits recently, and executive-to-worker pay ratios are absurdly high.
Remember that next time you see someone claiming that raising wages necessarily means that prices will need to rise.
I don't disagree for a second that, say, Starbucks could take a hit, reduce profits and still be able to operate successfully in New York. But I'd argue a lot of what makes New York the city it is is things like small independent restaurants that already operate on very thin margins. They also have no fat cat executives pocketing the spoils.
So, perhaps, yes, the city could survive without increasing wages but I worry it would result in a very faceless city filled with nothing other than big corporate entities that are able to swallow the cost.
>no one is going to commute 90 minutes for a minimum wage job when there are plenty of jobs available elsewhere
A few things:
1. The premise there (when there are plenty of jobs elsewhere) is kinda flimsy -- its already easier to find jobs in larger cities (that's why people move there), and nothing guarantees this won't get worse
2. Yes, there is a breaking point where people can't afford (in terms of time and/or money) a long and/or expensive commute. Humans have a workaround for that. Its called slums.
As a Bay Area resident, I have been surprised by how far people will commute for minimum wage jobs. Just Monday, I think, our public radio station had their morning local topics show where the subject was the city of Stockton. There was a lengthy discussion about low-income commuters coming daily from Stockton to Palo Alto, to work in and around the tech campuses of SV. Personally, I have known people to come from Modesto and Merced, even one from the far side of Sacramento. Daily!
Given that, I'm just not sure where the breaking point is.
> But as they get pushed further and further out it’s going to break down somewhere
It seems that higher rent is more likely to reduce standard of living first. Low wage earners who really want to be in the city will find a way, which generally means having a roommate and then I guess having even more roommates. I do wish NYC would build more dense buildings though so that a barista doesn't need to have 6 roommates.
"Wages will need to go up, which means the costs of goods and services will need to go up, and the city will get even less affordable."
That is already what happened. It just never stopped happening. The end game is... it keeps happening. It's just more noticeable right now because of high inflation and the stark contrast from the pandemic years.
> no one is going to commute 90 minutes for a minimum wage job when there are plenty of jobs available elsewhere.
They absolutely will, this concern has never really made sense to me. Poverty is like a badge of honor for many folks, and the harder one works for the lower the pay ends up being a little game some folks like to engage in, almost as a self flagellation; "I suffer therefore I'm noble."
Just look at some of the most oppressive places in the world, and how people continue to opt into that abject horror because it's a path to marginally help themselves or others they care about. NYC is nowhere near approaching the levels of, say, Qatar, in how it treats its workers, and a 90 minute commute each way wouldn't do much to push NYC closer to Qatar on that particular front.
You think we're at the bottom? No, we can go so much lower. So very much lower...
Another is these people are stuck. It takes money to pack up and leave. If the everything is costing more and more and more, their ability to save and leave goes down and down and down. Eventually they'll be forced to leave (somehow); the haves will see to it.
I wonder how much of contemporary Democratic politics is driven by insane rents in NYC and SF. The party has seen an influx of core Reagan voters—everyone from Wall Street bankers to Silicon Valley engineers (Reagan won Santa Clara County by 17 points in 1984). These affluent, highly educated folks have adopted the narratives and politics of the working class, juxtaposed against a ever-more-narrowly-defined “elite.” And it’s not the Kennedy-esque “noblesse oblige” that’s been a historical pattern. These folks don’t just express concern for the working class, but identify with them and are angry about the economic system. And I have no idea how to explain that, except they’re paying $5,000 a month for a cramped little apartment in NYC or SF, and feel like victims of the economic system rather than the winners.
This comment nicely attempts to paint high earning (not necessarily wealthy) upper middle class professionals as the scapegoat for an issue they did not create. The reality is, the people who are actually wealthy (think deca millionaires on up through billionaires) and investment firms and corporations are the ones suppressing supply for individual home owners.
The vast vast majority of homes in the US are owned by single family homeowners. And even if that wasn't true it wouldn't make much of a difference. Investment firms don't purchase homes to let them sit there, they purchase homes to rent them out. To whatever degree they're competing against single family homeowners they're just causing a small percentage of housing to shift from owner occupied to rental housing which should actually lower the cost of rentals.
Especially in NYC and SF the cause is very simple: local government has made it illegal to build enough housing to keep pace with demand.
My comment isn’t blaming anyone. I didn’t say these folks are the cause of housing prices going up. I’m just trying to understand the psychology of how they’re reacting to that phenomenon.
My suspicion, though, is that ballooning upper middle class salaries, combined with tax rates on the upper middle class lower than the Reagan era, really are a key driver of housing price inflation.
Investment firms, certainly, are a red herring: https://www.vox.com/22524829/wall-street-housing-market-blac... (“However, the idea that institutional investors are somehow largely to blame for the current housing market catastrophe is wrong and obscures the real problem. Housing prices have been skyrocketing due to historically low supply, low mortgage rates, and the largest generation in American history entering the market looking for starter homes.”).
The difference between a million dollars and a billion dollars ... is about a billion dollars.
The upper extremes of wealth are truly mind-boggling.
And for a family with a few million in nonliquid assets --- housing which they require to live, and investments earmarked for retirement --- a million-dollar cushion at the end of working life is not much.
(The fact that many people reach retirement with far less is not only a tragedy but a looming national catastrophe for the US.)
That’s an excellent post. One thing I hadn’t thought about is that communities are so stratified that if you fall even a little bit income wise, you lose your work community, might have to move, might need to change your kid’s school, etc.
It's a really really weird space that didn't really exist in 1984. I would say that today's "engineers" below the 80% salary threshold for this space are today's "construction workers" and heavily democratic voters (There are also of course "construction workers" too, of course).
Maybe about 5 years ago I would have said that people making 200k are wealthy. Today I would say that they are a lot of people that have been duped into a lifestyle where they "think" they are wealthy but are not. They spend MOST of their salary on non-essential and non-asset building things. So in a sense they are people that should be rich, but are not. Instead they don't own property (renters) buy lattes, restaurant food (for every meal) and the rest of that income is just going to payments - the tesla, rv/campers/boats, storage facilities for the stuff that doesn't fit in the apartment.
Those people certainly could become winners of the economic system if they stopped paying everyone else - but they identify with wealthy people making 400k but have absolutely no appreciating assets (ok except for their self driving module that Elon duped them into - which it turns out isn't actually "sellable" to the next owner anyway!).
I don't think these people identify with working class - instead they are pushing a narrative for themselves as poor to feel less guilty about that large salary and how poorly it's being pissed away.
That's the closest I can "explain" that from my personal perspective at least.
$200k isn’t enough to buy anything in SF though. Also - I know a lot of people making $200k/yr and they spend relatively little.
Honestly - you sound really out of touch and like you know no one who makes $200k/yr in SF. Where would you put your boat if you even could afford one? Where would you put a camper? Do you think people at 200k in sf are renting houses often? Houses with space for boats and campers?!
Sounds a lot like someone who likes to bitch about avocado toast. I wish people like this didn’t even post on HN - because it’s clear they don’t live in SF and don’t have a clue.
Using lattes as an example of burning money in your pocket is just laughable and really shows how much you understand how the local economics of the bay area. I don't think there are many owners of RV/campers/Boat owners who live in SF but spot on reference. Throw on hatred of Tesla et voila:
Ok Mr. Old Republican Avocado Toast hating throwaway troll account - wish you the best of luck in your distorted world. Your worldview is a sad deeply inaccurate take and I hope you realize that before its too late.
> The big picture: This points to a conundrum. The Fed is raising rates to cool inflation. But rate hikes are driving higher rents, which are fueling inflation.
Why everyone and their dog says Fed is raising rates, when Fed just barely raised rates.
Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.
Do you really think that rents in New York are because of cheap debt and not because a tiny island has been captured by billions and billions of corporate luxury development, while at the same time the supply of appartamenti is choked by there being more Airbnb places than places being rented.
Covid has been the greatest transfer of wealth upward in our lifetime, but sure it’s cheap personal debt.
>Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.
This ignores the realities of the market. A much lower rate than 11.3% (e.g. a 4%) would lead to a deep recession due to a shrinking money supply, which in turn would "counteract" inflation.
Demand for a place to live is much more inelastic.
And rate hikes make it harder to purchase a home, by raising the cost of them. That forces out of the home-buying market those who would have bought a home at the pre-hike rate … and forces them back into the rental market. Seems to me like demand goes up.
(Certainly, it makes it harder for landlords to acquire new properties, but I think corporations are going to weather it better than people — i.e., people will be forced out of that market before corporations.)
The increased rates make home mortgages unaffordable. This pushes housing demand to rents because people need to live somewhere. Rental prices increase while home prices decrease - bad, bad stagflation.
> But rate hikes are driving higher rents, which are fueling inflation.
how is higher rents fueling inflation? People paying higher rents (but on the same income) will have to forego some spending, thus reducing demand for some goods/services. So you'd actually expect that higher rents would drive _down_ inflation!
>will have to forego some spending, thus reducing demand for some goods/services
Or they will increase costs; which is (1) people (labor) demanding higher wages or (2) business increasing the costs of good to cover rent costs. Given that rent is already the biggest cost and has been growing steadily, it may be the case the other spending areas have been dialed to a minimum already.
If the median is higher than the mean that probably means the distribution is heavier on the positive side.
Cheap apartments are illegal and the legal ones don't get financed/constructed. There's a cutoff much higher than zero for housing costs everywhere in the US and I'd imagine it's pretty high in NYC.
I was wondering this too, I know plenty of people who live alone in Manhattan and don't pay anywhere near $5k. Some renewed recently even but I don't know who had stabilization and who didn't.
Where did you see the $4k number? This looks like condo and co-op numbers mostly?
It is highlighted in the reference I gave (which I found in a NY Times article). Look for “view report” after “The median rent in Manhattan reached the $4,000 threshold for the first time as lease signings continue to rise.”
I went to view an apartment in Prospect Park SW recently and the line wrapped around the block. When I went to apply I was told most people had offered over the asking for rent and how much I'd like to offer over the amount. We're blind bidding on rent in NY now. I wish this was an isolated incident but most apartments I'm looking for the amount of people applying is in the 50s low 100s I decided to just stay put and not look for bigger space. I'll either try again next year or leave the city.
No rent is really worth 5k/mo at that money you can buy a palace an hour or two out of the city.
Whenever I hear about the rental market in NYC I always ask myself: why do people want to live there?
In a way it's a rhetorical question but in another way it's not. Sure some will move there for a job but I'm sure not everyone is there just for work. Why do people put up with all that? Is it just the dream of living in NYC.
As someone who spent 21 to 29 there, it simply is the best place to live in the US for a particular part of life. Arts, food, nightlife - it makes it all worth it.
For me, I started to age out of it which made it less worth it. But it's more than a dream or "fomo" - it truly is the most enjoyable place to be in the US. I visit nowadays and it's just as magical as it used to be.
It used to be the case that NYC was expensive, but most of the rest of the country was cheap. If you didn't want to pay the ridiculous rent in New York, you could always move to a "second tier" US city like Seattle, Austin, or Denver, and enjoy a cool urban environment at a comparatively very reasonable price.
That no longer seems to be the case. Yeah, it is expensive here, but when I talk to my friends living in those other cities, they aren't paying that much less! Their rent is cheaper or they get more for the money, but it isn't a whole different ball game like it used to be.
I’m paying $1600 for a 3 bed in one of chicagos hottest neighborhoods. The trick is density, Chicago is made up of 3/4 flats and apartment blocks with solid public transport, so supply meets demand at a reasonable price. Of course the shitty weather and corruption helps lower demand too, but I’d say $600 a month housing cost is worth it.
And you have a yard? A parking spot? A walkable food thing? A friend networks whereby you loan tools? Rent Tools? A network of people who will help you when down/sick/hurt/displaced?
You're paying for an accentuated CELL in urban hell.
Just because you have a "dope spot to show how urban your display is"
You dont have shit.
Cut off all your power, access to food stuffs, equipment, necessities (pwr, wtr, fd, transport)
I was paying $2k for a very nice apartment in a very nice DC suburb within walking distance to my office. I moved to an even cheaper house (in a very walkable neighborhood) just outside Richmond. No people are not paying anywhere near NYC rent for urban living elsewhere.
Readit News
I like mass transit. I like not owning a car. I like that the city is generally safer than the rest of America. I like that it's the center for tech on the east coast, the arts for the entire country, and finance for most of the world. I like that we generally get along in the city, across many cultures and backgrounds. I like it has some of the best food in the world.
I think a lot of people are like me. No, we don't want to live in Boston, Chicago, or Washington DC (similar cities with mass transit). Unfortunately demand will continue to outpace supply greatly.
The only alternative I have is moving further out in Brooklyn or Queens. Unfortunately the subway has decent coverage, but moves at a snail's pace, and I'm looking at 50+ minutes for 6 miles into the city.
Coming from New Hampshire: this is just fantastically untrue. NYC is about one hundred times more violent than where I live. It is so thoroughly not the same that I can usually tell when people come from cities simply based on how nervous they are. I think most people don't realize how badly it affects them, or how violent cities are versus "the rest of America".
Some crime stats: https://imgur.com/a/qDKqC59
edit: NYC has 5.8 violent crimes per 1,000 people, which is 45% more violent than the USA median (4.0). I have no idea how 45% more violent got a reputation as "safer than the rest of America" but it's not true.
In NYC the most dangerous areas are pretty far out from (edit: downtown) Manhattan and you'd really have to go out of your way to get there. Anecdotally I lived in Chelsea and worked in Union Square for a few years and never witnessed any real crime, violent or otherwise. By comparison I also lived in SF where the bad parts are unavoidably located in the center of the city and I've witnessed multiple violent crimes over a similar time period. The neighborhoods in a city you pass through on a day to day basis really matter in terms of defining your experience.
Check out this map for stats: https://maps.nyc.gov/crime/
I'll admit I'm surprised it's still an order of magnitude, I share GP's sensibility that the cities are generally much safer than perceived
[1] https://crime-data-explorer.fr.cloud.gov/pages/explorer/crim...
I think small stuff like this just adds to your total anxiety without you even realizing it. It's really sad how difficult it is to live in extremely safe, small villages like my childhood home nowadays.
p.s. I really like your content!
I don't have stats for Amherst specifically, but here is a comparison between NYC and NH as a whole:
NYC: 5.5 murders per 100k + 1.6 auto fatalities per 100k = 6.1 deaths per 100k
NH: 1.0 murders per 100k + 8.9 auto fatalities per 100k = 9.9 deaths per 100k
I would still say Manchester, Rochester, Nashua ETC are 10x trashier and more neglected than even the most run down alley in Manhattan, Brooklyn, Queens.
If you want to demonstrate that NYC is less safe (and it may well be), focus on the high risk factors, not the salient ones.
[0] https://www.statista.com/statistics/191720/traffic-related-i...
However, I do also think an important question is "safe for whom?" Depending on your race, sexual orientation, gender presentation, etc, rural American communities can foster their own distinct unease. Those are the places where you keep your head down, self-censor, try not to draw attention. When is the absence of reported crimes in a state which is 92.8% white "safety" and when is it something else?
https://www.reuters.com/article/us-crime-newyork-statistics/...
From a random search, I got 2.8 violent crimes per 1,000 people citywide, which means all 5 boroughs. For just New York county (Manhattan), the most official statistic I could find is 4.57 in 2019[2].
[1]: https://www.lx.com/community/nyc-crime-rates-how-dangerous-i...
[2]: https://criminaljustice.cityofnewyork.us/individual_charts/v...
I think, at least in today's culturally polarized environment, there are a lot of people who would be understandably nervous and on guard traveling to rural America, and it has nothing to do with what crime looks like in their home city.
There’s hospital quality, time spent in private automobiles (one of the most dangerous things Americans do), risk of natural disaster, etc etc.
I think it’s very reflective of an anti-urban bias
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Personally, I'd rather be alone on foot in NYC than alone on foot in some small town where I'd stand out. Maybe because I grew up in a city and have traveled to many places, maybe because of my characteristics that make me feel vulnerable when I'm the outsider in a less diverse area, or maybe because I've lived in a city far more violent than NYC- so for me the things I visit for are worth the possible risk of crime.
NYC isn't even on the top 50 most violent cities in the world, which is quite a feat when you consider how things used to be there in the 80s/90s.
Parent commenter is completely correct that NYC is safer not just than the average location in America, but also the average rural area.
https://www.bloomberg.com/opinion/articles/2022-06-07/is-new...
Maybe your very specific neck of the woods is very rich and safe but I don’t know why you felt the need to butt in and make the conversation about you, OP never claimed that NYC was the absolute number 1 safest place in the country.
For me, personally, I'm disappointed by how few world cities the US has. NYC and Chicago are really it. My silly benchmark for what makes a city a world city is that it operates 24hrs a day (at least parts of it). Chicago barely does but I think it counts. Everywhere else in the US just dies past 10pm and especially past 2am.
Miami also meets every single one of these metrics and has later night life than NYC. New Orleans has 24 hr night life. Vegas too.
Los Angeles has a higher foreign born population than NYC.
Las Vegas operates 24 hours a day if that's what you want.
Edit: None of this comment was meant to detract, just a comparison in agreement to the city I'm nore familiar with. Maybe Toronto's different
Why?, because when you have all these people crammed together - weird stuff happens and that's what makes NYC magical. We're constantly mixing together, in the subways, bars, restaurant, parks ,etc. You get to see firsthand all the humanity of this city. No other city in America has replicated that.
I discount DC a little because a lot of that is government and defense related (not a bad thing, just not my cup of tea).
Boston has a lot of diversity in tech, lots of health/pharma like Moderna, web companies like TripAdvisor and Wayfair, robotics like Boston Dynamics, tons of startups doing ai/ml, and it seems like every big company has a substantial presence here (Google, Meta, Amazon, Microsoft, Salesforce…)
Boston is definitely bigger for every other type of engineering though than NYC. Most non programming engineering jobs in NYC would either be for a niche startup or would have something to do with real estate.
The Boston tech scene and culture (outside of physically being on the MIT campus) is awful. TripAdvisor and Wayfair, your examples, are two companies I would aggressively advise any friends from even talking to. While all the major players are there now it took them a long time to get there. Comp in Boston still lags NY and SF considerably, and in general Boston has always had a resistance to anything "new", it's politically liberal but otherwise a very conservative city. The biotech companies there have always been way more heavy on the bio than the tech. I've worked for Boston area tech companies multiple times , before and after the tech boom, and would never work for a Boston area tech company again.
NYC is on a whole other level. Not only do you have all the major players with much larger campuses there are far more startups and early IPO companies. There is the also entire world of HFT companies (Boston's finance scene is largely very old school investment management companies) which alone would be worthy of making NYC a techhub. I also disagree with your claims about the concentrate of tech companies. Tech related meetups and events in NYC are much larger, more active and have more exciting participants than in the Boston area.
Simply being in the orbit of MIT can have that effect, along with everything else you listed.
The issue with NYC from a perception as a hub of any one thing is that it's just so big with so many different things going on that tech just seems like one of many things going on there simply because of all the people.
The valley has a vibe in that everyone you meet is involved in tech work in some way and will talk about it to you or in public. It doesn't feel that way here, or you have to be a part of certain circles maybe. There are some small biotech meetup groups, but maybe they all do communication at the universities?
Still true today: http://www.paulgraham.com/cities.html
It really comes down to fear of change I think. Humans are very adaptable, and the same one can thrive in car-centric suburbs as they would in shoulder-to-shoulder metropolises. Given no constraints, you prefer city. But throw in kids (requirement for more space/better schools), or a dream job (passion), or a dying parent (obligation), or a lover.. and suddenly you're building a life in a completely different place. And it works.
At least I think/hope.. because outside of a busy city I am irritable and sad. But it sure would be nice to slow down on the treadmill/rat race a bit..
I can say with certainty I will never live in one of these places. I won't even live in Pittsburgh, which is an order of magnitude smaller than any of these places. There's no escaping people. There's no escaping politics or bureaucracy. There's no way to escape petty crime, crazy people, and noise. You can't see the sky at night, there's never any "dark".
Everything is orders of magnitude more expensive in a city. $5000/month rent? And people think this is "reasonable"? I don't even pay a third of that on a mortgage on a 2400sq/ft house. With a nice yard, decent neighbors, a good school, low crime, low taxes, the works. Our night-time intruders are turkey, deer, the occasional black bear, raccoons, skunks, and screech owls.
Do I have to drive to get anywhere? Yes.
Do I get the highest-paying jobs? Do I have immediate access to cute little bodegas and trendy little shops and night life? No.
But I can let my kids go outside and play at night. I can leave my doors unlocked. Nobody breaks into my car and steals my stereo. I can leave my house with my garage door up and all my stuff inside, and my neighbors will call/text me to remind me.
Is this an adequate trade-off? For me, absolutely yes.
I get why people like living in big cities. I will never again live in one myself, though.
That’s definitely not a given. I know a bunch of people that given no constraints they would live at the edge of a lake with the nearest city being 100+ miles away. But they get forced into a city by the need for a job, or the same constraints you laid out.
Just out of curiosity, what do you think NYC has that Toronto or Seattle don't have? And what are you thoughts on Toronto vs. Seattle? Personally, I've lived in Toronto (which I loved), and visited Seattle for a few days (which I liked, but hard to say from a short visit), so curious to hear what others who have lived in all 3 think (especially since I'm planning to move to Seattle soon).
You will be. And that's OK. It's a good thing: nothing else can compete with New York, so you're relieved of the pressure of equalling/one-upping it.
What do you do when you've summited the highest mountain? You take up scuba diving.
The way I would put it is -- in New York, it is more of a hassle to have a car than to go without. In all those other cities, while there is some mass transit, you will find yourself wanting a car.
NYC has the largest train system in the entire world, especially when you combine the various nearby train systems that aren't a part of the main subway like LIRR, NJ transit, path and Metro north (in China which technically is longer they count long distance commuter rail). The subway alone has more stops than any train system in the world.
Try some European city with reasonable rents like Warsaw. Even the skyscrapers will remind you of Manhattan.
But yeah, learning Polish is not easy.
Much smaller then NY, much more homogeneous, not a major world center of arts or finance.
There are very few cities in the world that check all the boxes he listed for NY, and they're all extremely expensive as well.
The apartment I grew up in, in lower manhattan, today would cost more than 20-30 times what my parents paid for it in the 90s, and it wasn't a nice apartment. There was no laundry in the unit, it faced a dark courtyard, the tempurature of the apartment was never that comfortable, had yearly huge bug infestations, but it was in a great location and was about 5 rooms more or less.
I think people just romanticize a life different than the one they grew up with. I certainly miss some aspects of the city culturally, but life on the west coast, I've had considerably better living arrangements ever since I've graduated college than the one I grew up in, and my parents were both professionals with graduate degrees, it's even worse for a lot of other people.
Unfortunately this is pretty unlikely unless there happens to be another political genius like Moses who also happens to love public transportation. Maybe an Andy Byford-Robert Moses combo?
Then make all public transit free and turn half of the roads into bus, pedestrian and bike only paths.
Is there any data to back this up? The latest NYPD crime statistics, show a city with increasing crime.
"Overall index crime in New York City increased by 27.8% in May 2022 compared with May 2021 (10,414 v. 8,149). Each of the seven major index crime categories saw increases, driven by a 42.1% increase in grand larceny (4,116 v. 2,897); a 28.3% rise in burglary (1,239 v. 966); and a 26.2% increase in robbery (1,506 v. 1,193)." See:
[1] https://www1.nyc.gov/site/nypd/news/p00050/nypd-citywide-cri...
Certainly no NYC, but they ticked all my recreation, arts, food, people and transport boxes.
Unfortunately, they’re all so goddamn expensive to live in.
I will say, depending on how close you are to a train station, Brooklyn isn’t bad. Yeah, it’s 45 minutes door to door, but you get to walk and listen to podcasts or whatever on the train. As commutes go, it’s definitely doable. But I totally agree with you that many people don’t want to live anywhere else and people who don’t love New York might not understand that, but New York is different from every other major city in the US.
I’m still carless in Seattle (I don’t drive and have no desire to drive) but it’s so much harder (my husband does have a car but I can’t rely on that for my own needs). And although Seattle is somewhat cheaper than Brooklyn (it’s really not but my luxury building in Capitol Hill definitely costs less than a luxury building in Williamsburg foot for foot — I pay about 70% more in Seattle than I did in Brooklyn, however), the things I’ve lost compared to New York are massive. I’ve definitely considered moving back now that I’m at a fully-remote company (that does have office space in NYC), but there are some practical realities about being in Seattle for my job that makes that hard. Maybe when my lease is up next year, I’ll reassess.
http://whovotesformayor.org/
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There are exceptions for rent controlled and rent stabilized apartments, where the landlords have even less power on price setting.
Obviously this is all just my opinion! I know tons of people love it there.
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My parents also used to go there a lot in the 90s and the city has come a long long way since then- for the better.
Things are getting more expensive, for some people that means they can't eat steak as much as they like, for others it means they need to move in with their parents, for you it means you might not live in the heart of one of the most expensive and desirable cities in the world.
I've always found it a bit odd that in the tech community there is this assumption that people have the right to live wherever they want, and that somehow living in NYC or SF during it's prime isn't its own variety of luxury good. I enjoy champaign when I'm in Paris, and am glad that at least for today I can drive a Porsche. I've spent plenty of years in a beat-up old Ford and drinking yuengling, won't be terribly surprised if I spent plenty more doing the same in the future.
I know that in MANY countries, one is precluded from owning any property if not a citizen. Obviously this leads to a bunch of corruption issues with bribing and marrying nationals for access to property, but the USA has literally zero control on property ownership.
You know how much foreign money laundering is done through US property ownership?
MOST of it.
A vertical zoning law might be an option:
There are places like Singapore where you cant build a high-rise unless the subterranian aspects of the project dont include a connection to other sub services, like the walkway malls and such.
I say do a % split on a vertical level which must include subterranian levels as a course:
The building MUST include underground parking, a commerical section and a range of income level sections.
You cant just build a high-rise of $millions apartments.
Look at Millennial Tower in SF. What a disaster. I HUGE legal BS and not a single person with a net worth of south of 10 million was accommodated in that disaster - but it still cost the city (i.e. tax payers who are NOT worth >10 million -- millions of dollars.
Isn't most of that true for most large cities anywhere in the world?
Consider Amsterdam.
- Mass transit? Yes.
- Not owning a car? Sure.
- Safer than America.
- Tech hub, yes.
- Finance hub? uhh, does it really matter?
- Everybody gets along, across many cultures.
- Food? Depends on your taste, but all kinds of cuisine are available.
Or consider Singapore/London/Gothenburg/Paris/Toronto/so-many-others. Similar deal. Sometimes even a better deal, depending on your priorities.
Of course, I fully agree that NYC is a cool place :)
It's nice you enjoyed your ride from $2,000/month to $5,000/month. That range was absurd to the people that went through an earlier range, and so on and so forth.
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I'm sorry, but... you might be able to get to FiDi from downtown BK in 20 minutes, door to door. If you live anywhere else in BK, from Greenpoint to Sheepshead Bay, you're looking at 30 minutes minimum to get into manhattan -- probably closer to an hour door-to-door.
Not trying to be rude here, but your statement does not seem to match my lived experience. Maybe you can get 20 minutes door-to-door on a citibike?
Even areas further away, like Prospect Heights or Crown Heights, with decent access to transportation have seen quite the uptick in price and availability.
For example, I live in a nice town in CT and the crime rate is 3.99 per 1000 vs NYC which is currently about 13.3 per 1000, making NYC (as a whole — I understand your point about neighborhoods within the city) 3x higher in crime.
I understand the other things you appreciate about the city. It's great to able to walk outside and have amazing restaurants and other amenities a few feet away; there's a reason many people like the city.
Overall NYC is much safer than the national average, especially compared to small towns which people often assume are the safest. https://www.washingtonpost.com/business/new-york-city-is-a-l...
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That plus making it easier/safer to get around by bike/scooter/etc. That’s something even NYC doesn’t seem to do well; have to look at international peers to see good examples of that.
The main point I want to make: even with those high rents, we tend to forget how much our cars cost us, directly and indirectly.
Directly: AAA's average new car TCO is close to $10,000 a year. Multiply by two for a typical couple and that's $1600 a month you could dump into your NYC apartment's high rent. Unlimited MTA rides only cost $1500/year/person.
Indirectly: There's the obvious car crash issue, the top killer of children (well, guns just passed that, but luckily NYC is safer than the average American city in that regard), but the other main example is health. We're not supposed to sit all day. My doctor moved from a car suburb to the city and admitted they lost weight and walk a lot more. When walking is the easier option compared to attempting to drive to your daily errands, it's much better for you and extends your life, especially when considering your high-quality years of life.
Number one premature killer is heart disease, by far.
Even if you're just walking to the subway, that's a lot more activity than your commute to your garage.
NYC's obesity rate is half of the national rate. HALF! That's downright incredible.
In NYC I see very old people walking everywhere, stereotypically playing chess in the park, meanwhile I have suburban relatives struggling to walk across the Walmart parking lot and they haven't even hit 70 years old. They may live into their 80's but it will not be pleasant for them. The difference in alertness is noticeable. As a bonus, old people in NYC never had to drive so they never have a retired life feeling isolated to their home.
I think the best way to try and stabilize rent is to buy a condo. It's not a silver bullet due to property taxes and HOA fees that rise with inflation, but it's still a slower rise than renting, I think. You can definitely find 2 bedroom condos with monthly payments under $5000 in Manhattan.
If you're interested in what NYC apartments are really like and how far your money gets you (along with some general YouTube vlogging entertainment), a channel I recommend is Cash Jordan. I won't link it but I'm sure you can find it. Like any other real estate market, it's all about compromises. If you want to live in NYC and pay $1000/month/person, you can definitely do it. You can also pay $10,000/month if you want.
The big caveat to everything I'm saying is that the poor are unlikely to live in the most walkable areas, and a lot of them will perhaps have to own a car. This is definitely the case in Chicago, where the most walkable areas are also the most desirable and affluent (I wonder why that is? Maybe our whole country would be more desirable and affluent if it wasn't designed to be a cash funnel where we dump our income into constructing vehicles, maintaining the infrastructure and utilities utilities of nearly unused land, and burning oil?)
First, you can get by just fine without a new car. My car was $26k new - 18 years ago. I’ve put another $10k over the years in maintenance (tires, oil, repairs). Insurance is $500/year. Gas is maybe $2k/year at $4/gal. Not even close to $10k/year.
That caveat you apply to averages for rent also applies to cars. Some people are obsessed with having a new car. That’s not the price of having a reliable car.
Second, if you’re a couple, you don’t need two cars. That’s another luxury that many people get by without.
Finally, the car takes me out of town monthly into the mountains. So you would need to factor in car rentals for leaving NYC in your equation if you wanted a fair comparison of what people actually get out of their cars.
> NYC's obesity rate is half of the national rate. HALF! That's downright incredible.
Cause or effect? A lot of people with mobility issues end up obese and having mobility issues is a fucking nightmare in NYC. You just forced the unhealthy people out of the city by design.
> As a bonus, old people in NYC never had to drive so they never have a retired life feeling isolated to their home.
+1. It’s a great place to live… if you don’t have health issues that make mobility a problem.
“Living on the top of Mt. Everest is so healthy! Look at all of the healthy people up here!”
It is true that older people in NYC are seemingly healthy, but they're definitely a very specific type of person.
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Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity.
The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility, which could be improved by the setup described above. Many attempts at public housing failed because they just tried to provide housing for low-income people in separated and/or undesirable areas, with a predictable outcome.
CMV
The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build.
I personally think that achieving affordable housing prices via mainly government intervention is not a sustainable approach. You end up consuming both economic and political capital.
A more sustainable approach sets clear, transparent rules that specify under what conditions do you get to build by right. Then 90% gets satisfied by the market, the remaining 10% can be addressed by government investments, if needed.
The only sustainable way to get affordable housing is when the market price is affordable.
Land, on the other hand, is another story. There is strong economic evidence that many of the observations of Henry George [1] are spot on: Land rents tend to take a massive toll in the economy, cause inequality and misery, all without requiring their owners to provide any added value. The proposed solution, again with solid economic fundamentals, is to tax the unimproved value of land at 100%. Henry George further argues that the proceeds should be equally divided among citizens, a citizen dividend if you will.
[0] e.g. it takes 4 years on average to get a new building permit in SF, 90% of the city is zoned for single family housing, any neighbor etc.
[1] https://www.gameofrent.com/
Of course the Vienna success came from public intervention because otherwhise you'd have exactly the same situation of hundreds of other cities where rent is always a hefty amount of modal income and no matter how easy and cheap is to build it just happens those with access to capital never meet demand.
You need to build more, in many cite MUCH more, and you need vacant housing so floating population can come and go easily.
The other two secrets are tiny apartments (200-400 sqft), and an incredibly reliable public transportation system. Tokyo has a massive sprawl -- people can and do live far from their work. The average one-way commute time in the Tokyo metro area is almost an hour.
I think of myself as right-of-center, but think George was more or less spot on w.r.t. land.
I wonder if there is a solution in banning rent itself? i.e. force owners to transfer a % of ownership equal to rental fees received from tenants and allow them to discount improvements against that.
I wonder, because it is always stated that if only density was increased by building more, housing would become cheap.
But this article is about NYC, the densest city in the US, not being cheap at all.
And the only way to reduce the market price to affordable rates is to crack down on the demand - there is no reasonable way to expand the offer side in many cities any more since they don't have the space. And most demand is driven by the fact that rural areas have been left in a decrepit state for decades: highways, bridges and other infrastructure is crumbling, there is no public transport worth the name, forget about fast internet (or fast internet offered by a crap monopolist), employers have closed down or moved to urban areas, schools and medical services are constantly closing or underfunded...
To fix the urban rent explosion problem, we need to fix rural areas and make them livable again.
Population densities (per sq k):
Manhattan: 38000
Tokyo: 6158
Vienna: ~5000
I don't see how supply is Manhattan's problem here.
Rent is high because the demand in large cities majorly out strips supply.
All policies that attempt to address housing costs that don't increase supply are treating a symptom and not the underlying cause.
I think the solution to housing cost is to make smaller cities, towns and the countryside more attractive by having higher local tax rates in cities. This source of income could be used to build better infrastructure in the rest of the country.
So are the ones that do increase supply, so long as they are not doing it in a way which deliberately undercuts the fact that there are positive feedback loops at work (and cutting those positive feedback loops means reducing quality of life and economic opportunity in ways no one wants.)
Among the thing that drives demand for housing is available work (demand for labor). Increasing housing supply so more of that demand is met increases demand for local services, and thereby available work, increasing demand for housing. That's not the only positive feedback loop involved, but it's one of them.
A gross oversimplification, but if you somehow make ten thousand new apartments available in Manhattan at $1k/month, they will eventually fill up with low-income tenants, which will make them undesirable. Pressure on all the existing $5K properties will remain the same.
I’m sick of these economic abstractions that constantly try to explain away our problems, and take away the responsibility from the human actors that cause these effects. It’s not some abstract “supply and demand” that we should focus on—it is the landlords and renters and their decisions that are to blame. We need to introduce some agency and accountability back into our discussions of economics otherwise capitalism will continue to be an abstract machine in which horribly unethical actions are justified by removing human actors and human culpability from the equation. Belief in “the market” is not dissimilar to religious belief. Furthermore, analyses in capitalist terms often lead us to more problems. If the problem is “supply”, people will say “ok build more homes”, but that first of all never seems to actually work and secondly has a large number of additional negative effects such as increasing overcrowding and climate problems.This ridiculous tendency to not actually blame the people responsible for these negative conditions is ridiculous. It’s a large part of the reason we’re in this mess.
This has been tried so many times throughout different cultures and time periods, and by different means. It will not benefit whoever is actually living on the properties, but will detract from their situation.
Economics in One Lesson by Henry Hazlitt has several concrete examples of attempted interventions, and is written to give a basic intuition on why this happens (Spoiler: Opportunity costs).
The only permanent solution is just to build more buildings, or at a political level simply making it easier to build new buildings, which directly increases supply and thus causes the lowering of prices. This makes perfect sense when you think about it: There are not enough buildings, so we need to have more buildings.
It's not without its flaws, but Singapore has an extremely effective public housing program run by the government's Housing & Development Board (HDB) where 89.9% of Singaporeans are homeowners.
https://www.statista.com/statistics/664518/home-ownership-ra...
The "just build more" supply argument doesn't hold water when you have an unlimited source of demand from institutional investors and speculators that use housing as a place to park their money.
To your other points yes. Land Value Tax now! There's simply no good reason for why we're all taxed so heavily on our labor while land speculators get away for pennies.
have 2.25 million population before WW1 and then decline in population for almost 100 years? They still haven't recovered (1.89m). It may be an enormous mistake to read into their allocation policy because they've simply had a very easy time allocating so far.
St Louis population has declined for 70 years. It is very affordable. It's just not hard to accomplish affordability like that.
Also, the point of the social housing in vienna is not only the dimension of it, but how they do it. The design, the demographics, etc.
There's a clear distinction between their program and the myriad of commieblocks in other countries that become low-income guettos to sink public money.
Public housing done right is more than just building dense, putting poor people in it and be done with it. That's a recipe for disaster.
This is great policy if you want to make housing unaffordable. When supply is less than demand, prices go up. Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing.
> Rent is the main detractor of disposable income which hurts the rest of the economy
I’m happy (perhaps not quite the right word…) to pay rent. I don’t want to own property. It’s a large, illiquid investment with high transaction fees, carry costs, and concentration risk. My landlord takes all the risk of owning the property (prices don’t always go up after all).
This is not reality though. Here in the UK our housing is in major crisis because people simply cannot afford the insane price increases. Pretty much everyone I know shares their living situation, on their own they would not be able to afford basic amenities.
The guardian today published an article showing:
>Average monthly rental payments were now 40% higher than they were 10 years ago, while typical mortgage payments for the same properties were up 13%.
Landlords and property owners are hiking the prices way beyond reasonable value, in some parts of the country rent is up by over 20% in the last year alone. By your logic there should be an incentive for builders to increase the housing stock, but private enterprise aren't building anymore homes now than they were 10, 20, 30, 40, 50 years ago.
We do however have a situation where the average mortgage is about £900 per month, whereas the average rent has skyrocketed to £1600 per month (£1100 outside of London, £2200 in London). Available rental stock is down 25%, with demand up 5%. It's great for property speculators, buy-to-let landlords and property developers, people are offering above asking prices simply to secure a home.
>My landlord takes all the risk of owning the property (prices don’t always go up after all).
Sure there is risk, but when you charge 30% more than you repay for the mortgage, while at the same time property prices rise 75% in 10 years, it's safe to say that the cash cow is being thoroughly milked for every last drop and as a result many people are suffering.
Ultimately there shouldn't be 'risk', this mindset is a big problem. Homes are a fundamental, basic human need. Using them as an investment method, business model or means to hedge against inflation, is causing rampant speculation and quite honestly extorting people that have no other choice, exploiting vulnerable families that need a home. It should be an extremely tightly controlled market, with sufficient funding to ensure that quality & affordable housing is available for everyone.
Also, read carefully, I don't want price control directly onto the private sector but the adminsitration controlling a big chunk of the offer.
Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more.
The only reason the prices go up is because of greed basically- because people say "hey I can just charge more and people will pay more!". And there in lies the bullshit of the free market once again. It always benefits the people with money, who can afford to pay that amount more "just to get what they want".
The last few years in particular have made me so tired of hearing about people talk about supply & demand like it is some unarguable hard scientific fact. It's not even close to that. It just represents how much people like to price gouge because "they can"
>Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing.
And the following part of this is also just more bullshit. I'm not saying you are "wrong", but you say it as if that is how things have to work and there is no other alternative.
Every word of what you said is based on greed and squeezing the most you possibly can from people. Please realize that.
Ahh yes, walking around in NY seeing building projects to increase the supply of housing in the 4th dimension where land is plentiful and the rivers are clean /s
Of course this does not work if building new housing is illegal, in which case you might as well have the rent control.
Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified. Like what we are seeing in this news piece.
I don't know exactly how it works here in the Netherlands, but as far as I understand the government leases land to the constructors at its own pace, with strict quotas on social housing, to let vs to buy ratio, and free-market properties. It isn't perfect (massive bubble on the free market right now) but seems to work well enough.
CMV
The "let the free market take care of it; government intervention can only make it unaffordable" view is standing on extremely shaky legs today.
The issue, empirically, is that (a) we don't see the right housing being built, and (b) we don't see quality housing being built. We see a lot of high-end luxury units being built, but what we need are more 1- and 2-bedroom units within 20 minutes (preferably, by affordable public transit) of where people work. We also see a lot of large (and therefore expensive) but cheaply built McMansions that'll be falling down in 20-40 years, so the long-term picture of the housing stock is not improved.
What we need is for the government to step in and build affordable housing as a floor at a controlled price ("commie blocks"). No one will be forced to live in one, of course, but they'll be an option; the rich can still buy property on the market if they're so inclined.
> My landlord takes all the risk of owning the property (prices don’t always go up after all).
If you own your house and control your geography (i.e., you'll never be forced to move due to economic inopportunity) then you have the truly risk-free position. Renters are at much higher risk (log transform, Kelly Criterion) than landlords, because real estate costs are such a high percentage of their budgets.
The problem, of course, is that owning a house, while it gives you a zero beta to the housing market in theory, still does have the risks you described. For one thing, other people can do things that damage your house's value--both its subjective value as a place to live, and its objective market price--such as building highways and obstructing sun/view. The other issue is that, in today's hypercompetitive world where in decent employment every job search is national (and possibly international) it's impossible to control your geography... you could be laid off and forced to relocate to get your next position.
So, you're not wrong in general. I think it's a wise financial decision for a young person to keep renting one's place--as opposed to renting money to buy a place--but I also think it's inaccurate to imply that landlords are taking more risks than they really are. It really gets on my nerves when rich people and employers talk about how they're "taking all the risk" and therefore deserve more, when the truth is that the poor (involuntarily) take all the risk, because each $100 means so much more to them.
Property of course requires maintenance and management, so the sleight of hand here is to define away all those aspects of ownership so that by definition all that's meant by "landlord" is "old guy who cashes checks."
But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass, somebody has to pay the taxes, somebody has to -- yes -- collect and cash the checks. Somebody has to respond to tenant requests and emergencies. Somebody has to advertise the property when it's vacant. Someone conducts showings and screens tenants. And, maybe most important, somebody assumes the risk of a bad tenant or a down market or a declining neighborhood. And so on and so on.
Whether all this is done by the owner personally or hired out is irrelevant. There's no reason to believe government can perform these functions better than private owners in a market.
A simple proof that landlording is not free/easy money is to realize that millions of middle- and upper-middle class Americans who -- if not today, certainly 5 years ago before this most recent run-up in prices -- could, if they wanted to, afford to buy property and become landlords, but they mostly do not do it. And since nobody turns down free/easy money, landlording simply cannot be free/easy money. QED.
Then again, I've had others tell me it's awesome, you just have to pick your location carefully (one exclusively bought very close to nursing schools, which seemed to select for tenants who'd stick around at least a couple years and who'd pay their rent and not run a meth lab or smear shit on the walls or anything like that).
FWIW, I'm with you, I think rental income ("landlording") and airbnb-ing are both legitimate demand, and the system would work fairly if we didn't have artificial constraints on supply.
Insofar as landlords actively work to constraint supply to artificial inflate rents, it is immoral behavior (but 'muh' neighborhood) and we should not allow it.
In many buildings these things are simply not done.
So the taxpayers should pay so the people with low income or no income can live iny Manhattan? Why not also provide them with expensive cars and exotic vacations?
Yes. It's a city not a luxury resort. If people are to work all kinds of jobs at all levels of income there, then people at all income levels should be able to live there as well. This mechanism accounts for that.
> Why not also provide them with expensive cars and exotic vacations?
Maybe they should idk. Seems completely unrelated though and no one is arguing for that here so I don't know why you want to or why I should.
That's a bold claim. What led you to believe that's the case? And what is a "non-transable good"?
Basically you cant move supply around.
Questions more than anything else:
- How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building?
- With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference?
- Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?
I don't know if I understand your question. We're talking about public housing, the owner is a public entity. For every building there are slots by income and they're filled by a FIFO system if you will.
I know in the US this is more difficult but in most euro countries the administration can check what you earn yearly. It's semi-automated already.
> With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference?
The owner is the public housing company. No guarantee for anyone. There are different proposals, for me 20% for annualized income is simple & good enough, I wouldn't want to make it very complicated, but I'm sure it can be.
> Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?
Overall supply did, but due to political factors the public housing system didn't expand at enough rate to keep up with demand.
Maybe some groups of people don't want to live together with other groups of people? Different people living in different parts of the city is just natural evolution.
Why should the state force them to live together?
And why should the state tell you where to live? Why should the state be involved in your private life at all?
A claim like that needs supporting evidence. I see no reason why segregation among different members of a single community is natural.
> Why should the state force them to live together?
Because segregation breaks down the social bonds in a community, which is bad for the social fabric, which is bad for the community's ability to live and work together, which results in the breakdown of that community.
https://www.bloomberg.com/news/articles/2013-05-03/why-segre...
> And why should the state tell you where to live? Why should the state be involved in your private life at all?
The state does not exist in Libertarian theory. The state already has numerous rules about your private life. You could make the same arguments against zoning and building codes.
Also if you evict all the poor people from the expensive cities, who do you think is going to work the jobs that make it possible and desirable for the rich people to live there?
By what mechanism could this possibly work other than exploitation and coercion. I realize that's the current status quo, but do you? Do you understand that's what you're endorsing here with this argument of "poors gtfo?"
I think you have no idea how much things break and need fixing. I have a friend that owns a few houses that he rents out, and it's a part time job just keeping up with fixing things. Between them, there's a few thousand items that can and do break and need maintenance. He would not be profitable if he hired out to fix things. Outside Labour can easily be $100/hour and if you need something even a little bit more serious its easily $1000/day.
This is the hidden cost of manufacturers making things as cheaply as possible, and often out of plastic. Property taxes and utility bills and problem with tenants. Navigating disputes, noise complaints, missed rent, move outs and move ins, signing new lease agreements, landscaping, leaky plumbing, damaged flooring, overgrown trees, it's endless. It's a part time job.
Maintaining and improving structures is work. Nobody disagrees with that. Simply owning the thing is not work. Churchill said it best:
https://www.landvaluetax.org/history/winston-churchill-said-...
Streetcar suburbs[2] not only work, but are imminently sustainable compared to other forms of urban/suburban extension.
[1]: https://en.wikipedia.org/wiki/List_of_streetcar_lines_in_Bro...
[2]: https://en.wikipedia.org/wiki/Streetcar_suburb
Put another way, if you accept that housing scarcity is bad, going to the public and saying "How do you want housing in your city to be?" is only going to make it worse.
Have you considered that housing might actually be valuable? If it didn’t provide value, why do you think that Vienna seized so much of it to give out to its citizens? Maybe try to find a different way to phrase whatever you’re trying to say.
Assuming you’re referring to property owners getting by doing nothing. That’s false unless they are a slumlord.
Let me ask you another question. What do people do who are not happy with the housing provided by the govt in Vienna?
> The current setup creates guettos by default, by siloing people with different monetary and social capital into different building and areas
This is not how it works in the US for the last 50 years or so. Most places force every new building to include low income units.
Rent from another landlord mostly. Vienna has close to two million people (give or take some), however only around 500.000 of those live in buildings owned by the city [0]. Those are 1800 buildings by the way, definitely a lot but not unbelievably massive.
Compared to some private companies, such as Vonovia the city of Vienna is just another big player, but by no means massive enough to actually be a monopoly or anything.
It is true that they of course hold a lot of the supply in Vienna itself, housing a quarter of the population, but that still leaves three quarters not living in any of those buildings. It's easy enough to not live in apartments owned by the city if you don't want to.
[0]: www.wienerwohnen.at/wiener-gemeindebau/wiener-gemeindebau-heute.html (Source in German)
It’s not ideal.
Sounds like a creative way of saying "make sure the poors have enough rich people near them that they feel compelled to stay in line and keep a low profile."
There are few things that make apartment living worse than having neighbors who think your standards of behavior are too low and who you have to avoid pissing off.
In return property owners (or insurance runners) can get rich off your monthly payments as well as the inherent value of the property (/insurance company), but because of risk of ruin, opportunity cost for other investments and other related phenomena, it can mathematically be a total win-win for both sides.
What everyone complaining about property prices also always seems to forgoe are two things: First, people are clearly able to afford them or the prices wouldn't go higher. The myth that property investors buy homes on mass and don't rent them out which supposedly creates this pricing hike is idiotic. All of these big cities with insane rents have very low vacancy rates compared to the national average.
In almost all of these places where people complain about rent, we are talking about big popular places where everyone wants to go even though there are tons of realistic alternatives all around the country. The situations where it's economically totally necessary for you to move to an expensive place but at the same time you can't afford the rent is so rare as to be virtually non-existent.
Even the idea that people are displaced from their homes is an issue on a smaller scale than people make it out to be. That's because income in those expensive places is much higher than in cheaper places. There are people displaced from their homes, but that's because of poverty and other aspects of gentrification that are not necessarily tied to rent.
As a renter of a dangerously unmaintained property, whose owner has never worked because he inherited a bunch of apartments, I can only laugh hysterically at your ridiculously-over-the-top sarcasm.
Obviously I don't know, but I suspect you might be seeing a king of survivorship bias. Many people I know were in fact displaced from the place they want to live, including careers and communities they were a part of, due to cost of living. Housing is a big part of that. Are you surrounded by people who can afford it, and perhaps unaware of the people who can't?
One of the principal reasons Manhattan rent is so ridiculous is because of state intervention. More intervention, the worse it is going to get.
> Rent is the main detractor of disposable income which hurts the rest of the economy,
This is a silly statement. Rent is part of the economy. Paying rent doesn't damage the economy anymore then paying for food or paying your electrical bill.
> and property owners provide almost no value,
They provide and maintain their property.
> but to provide access to housing for people who has no capital for it,
And for a wide variety of other reasons. Not everybody wants or is a place in their life were massive permanent investment makes sense.
> which is service that could be perfectly provided by a state entity.
Absolutely not.
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We have tons of land In the US. Lots of people leave New York for cheaper places.
The limited supply (3 years worth of eviction backlog) + office mandates hitting this spring are exactly why prices went crazy seemingly overnight after a pretty calm 2021
What you propose is a very socialist solution. I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal (as they calculated that's what housing would cost using cost-based-pricing).
Think also that the program can avoid deficit by not having only low-income tenants, providing more opportunities for social mobility and allowing more consumption which means more VAT taxes, specially if you're smart enough to provide your tenants with supermarkets, bars, etc, which isn't difficult if you pack enough people and provide space for bussiness in the ground floors.
Fortunately that was the only criminal activity in the shining beacon of freedom and prosperity that was the USSR.
Perhaps only as part of a way to ease those with low income. But this is no good in general. You are charging one person more than another for the same good simply because of higher income. This is price discrimination and is unjust. Usury can work in an analogous way, such as when someone raises prices to exploit increased need even though the cost of production of the good sold is the same.
> property owners provide almost no value
They provide shelter and must maintain that property. Problems occur when they begin to charge unjustly for services rendered. This calls for regulation, not state ownership. No need to go to extremes.
> The current setup creates guettos [sic] by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility
Social mobility isn't the only consideration and not the summum bonum and it exists precisely to allow people to sort themselves into social classes (otherwise, why have social mobility in the first place). People of a given social class tend to live closer to each other because they share class cultural similarities, concerns, and affinities. That doesn't mean there is no contact between people of different classes, but the solution isn't to mix everyone up into a uniform mass. There's a middle way between the hermetically sealed ghetto and uniform distribution, and it doesn't involve violating the principle of subsidiary.
Ultimately, it is poverty that is a problem, not having a lower or higher income as such.
Dead Comment
Also recommend checking out this video about Vienna https://www.youtube.com/watch?v=41VJudBdYXY
Wages will need to go up, which means the costs of goods and services will need to go up, and the city will get even less affordable.
Well put, had to laugh.
It’s a place full of amazingly creative people but let the rents climb and you’ll end up like London.
There are very few grocery store clerk, delivery drivers, and coffee baristas who live in UES. They've already been pushed out to the edges of Manhattan and other boroughs.
The 20-30 minute commutes have been snapped up by younger people who have been priced out of the 10-15 minute commutes. You currently see a lot more ads for rentals that seem to stretch the boundaries of neighborhoods (e.g. West 110th Street == "Upper West Side").
The wait lists for rent stabilized apartments are incredibly long, so the chances of a grocery store clerk, delivery driver, or coffee barista getting into more affordable housing closer to their place of work is pretty slim.
And good luck if you're an hourly employee with a long commute when the MTA lets you down in the form of a delayed train, or express-turned-local, etc. You're either penalized by your employer (or angry customers) for arriving late, or you penalize yourself by leaving the house 30-45 minutes earlier and sitting around unpaid until it's time for your shift to start (ignoring any cost of leaving the house earlier, e.g. cost of extra child care, or risk of being unreachable on the subway by a dependent).
To be fair, they've been doing that particular editorialization for over 20 years. Bloomingdale was subsumed into the expanding morass of the UWS in the early 2000s; Morningside is next.
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Perhaps not minimum wage, but if the Bay Area is any evidence, people will commute that much time for a low wage job.
They are often losing out longer term (i.e. not considering the accelerated depreciation of their car), but in the thick of day to day survival they might not see that slowly happening.
Or do the places paying low wages now just need to accept a smaller profit margin or lower executive pay?
It's unquestionably true that there are some places that pay low wages that cannot afford to pay better wages without increasing prices; however, we seem to have collectively decided that that's the only way wages can increase. But that ignores the fact that corporations in all (or at least many) sectors have been enjoying record profits recently, and executive-to-worker pay ratios are absurdly high.
Remember that next time you see someone claiming that raising wages necessarily means that prices will need to rise.
I don't disagree for a second that, say, Starbucks could take a hit, reduce profits and still be able to operate successfully in New York. But I'd argue a lot of what makes New York the city it is is things like small independent restaurants that already operate on very thin margins. They also have no fat cat executives pocketing the spoils.
So, perhaps, yes, the city could survive without increasing wages but I worry it would result in a very faceless city filled with nothing other than big corporate entities that are able to swallow the cost.
A few things:
1. The premise there (when there are plenty of jobs elsewhere) is kinda flimsy -- its already easier to find jobs in larger cities (that's why people move there), and nothing guarantees this won't get worse
2. Yes, there is a breaking point where people can't afford (in terms of time and/or money) a long and/or expensive commute. Humans have a workaround for that. Its called slums.
Given that, I'm just not sure where the breaking point is.
It seems that higher rent is more likely to reduce standard of living first. Low wage earners who really want to be in the city will find a way, which generally means having a roommate and then I guess having even more roommates. I do wish NYC would build more dense buildings though so that a barista doesn't need to have 6 roommates.
That is already what happened. It just never stopped happening. The end game is... it keeps happening. It's just more noticeable right now because of high inflation and the stark contrast from the pandemic years.
Or course it'd be great if we weren't heading that direction but try convincing voting demographics that property values should be lower.
Which shouod decrease the number of people living there, putting a limit on cost growth.
They absolutely will, this concern has never really made sense to me. Poverty is like a badge of honor for many folks, and the harder one works for the lower the pay ends up being a little game some folks like to engage in, almost as a self flagellation; "I suffer therefore I'm noble."
Just look at some of the most oppressive places in the world, and how people continue to opt into that abject horror because it's a path to marginally help themselves or others they care about. NYC is nowhere near approaching the levels of, say, Qatar, in how it treats its workers, and a 90 minute commute each way wouldn't do much to push NYC closer to Qatar on that particular front.
You think we're at the bottom? No, we can go so much lower. So very much lower...
Another is these people are stuck. It takes money to pack up and leave. If the everything is costing more and more and more, their ability to save and leave goes down and down and down. Eventually they'll be forced to leave (somehow); the haves will see to it.
> "I suffer therefore I'm noble."
That's cruel.
https://www.nytimes.com/2022/04/23/us/corporate-real-estate-...
The vast vast majority of homes in the US are owned by single family homeowners. And even if that wasn't true it wouldn't make much of a difference. Investment firms don't purchase homes to let them sit there, they purchase homes to rent them out. To whatever degree they're competing against single family homeowners they're just causing a small percentage of housing to shift from owner occupied to rental housing which should actually lower the cost of rentals.
Especially in NYC and SF the cause is very simple: local government has made it illegal to build enough housing to keep pace with demand.
My suspicion, though, is that ballooning upper middle class salaries, combined with tax rates on the upper middle class lower than the Reagan era, really are a key driver of housing price inflation.
Investment firms, certainly, are a red herring: https://www.vox.com/22524829/wall-street-housing-market-blac... (“However, the idea that institutional investors are somehow largely to blame for the current housing market catastrophe is wrong and obscures the real problem. Housing prices have been skyrocketing due to historically low supply, low mortgage rates, and the largest generation in American history entering the market looking for starter homes.”).
The upper extremes of wealth are truly mind-boggling.
And for a family with a few million in nonliquid assets --- housing which they require to live, and investments earmarked for retirement --- a million-dollar cushion at the end of working life is not much.
(The fact that many people reach retirement with far less is not only a tragedy but a looming national catastrophe for the US.)
https://www.interfluidity.com/v2/7263.html
Maybe about 5 years ago I would have said that people making 200k are wealthy. Today I would say that they are a lot of people that have been duped into a lifestyle where they "think" they are wealthy but are not. They spend MOST of their salary on non-essential and non-asset building things. So in a sense they are people that should be rich, but are not. Instead they don't own property (renters) buy lattes, restaurant food (for every meal) and the rest of that income is just going to payments - the tesla, rv/campers/boats, storage facilities for the stuff that doesn't fit in the apartment.
Those people certainly could become winners of the economic system if they stopped paying everyone else - but they identify with wealthy people making 400k but have absolutely no appreciating assets (ok except for their self driving module that Elon duped them into - which it turns out isn't actually "sellable" to the next owner anyway!).
I don't think these people identify with working class - instead they are pushing a narrative for themselves as poor to feel less guilty about that large salary and how poorly it's being pissed away.
That's the closest I can "explain" that from my personal perspective at least.
Honestly - you sound really out of touch and like you know no one who makes $200k/yr in SF. Where would you put your boat if you even could afford one? Where would you put a camper? Do you think people at 200k in sf are renting houses often? Houses with space for boats and campers?!
Sounds a lot like someone who likes to bitch about avocado toast. I wish people like this didn’t even post on HN - because it’s clear they don’t live in SF and don’t have a clue.
Ok Mr. Old Republican Avocado Toast hating throwaway troll account - wish you the best of luck in your distorted world. Your worldview is a sad deeply inaccurate take and I hope you realize that before its too late.
Why everyone and their dog says Fed is raising rates, when Fed just barely raised rates. Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.
Do you really think we solved central banking in 1992 [1], and if only you were one of the central bank chiefs we would be fine?
[1] https://en.m.wikipedia.org/wiki/Taylor_rule
Covid has been the greatest transfer of wealth upward in our lifetime, but sure it’s cheap personal debt.
This ignores the realities of the market. A much lower rate than 11.3% (e.g. a 4%) would lead to a deep recession due to a shrinking money supply, which in turn would "counteract" inflation.
This doesn't make sense to me. Rate hikes decrease spending overall, so why would rent be any different?
And rate hikes make it harder to purchase a home, by raising the cost of them. That forces out of the home-buying market those who would have bought a home at the pre-hike rate … and forces them back into the rental market. Seems to me like demand goes up.
(Certainly, it makes it harder for landlords to acquire new properties, but I think corporations are going to weather it better than people — i.e., people will be forced out of that market before corporations.)
Dead Comment
Rate hikes appear to be doing the opposite to rents here in NZ
how is higher rents fueling inflation? People paying higher rents (but on the same income) will have to forego some spending, thus reducing demand for some goods/services. So you'd actually expect that higher rents would drive _down_ inflation!
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
Or they will increase costs; which is (1) people (labor) demanding higher wages or (2) business increasing the costs of good to cover rent costs. Given that rent is already the biggest cost and has been growing steadily, it may be the case the other spending areas have been dialed to a minimum already.
Cheap apartments are illegal and the legal ones don't get financed/constructed. There's a cutoff much higher than zero for housing costs everywhere in the US and I'd imagine it's pretty high in NYC.
Where did you see the $4k number? This looks like condo and co-op numbers mostly?
No rent is really worth 5k/mo at that money you can buy a palace an hour or two out of the city.
In a way it's a rhetorical question but in another way it's not. Sure some will move there for a job but I'm sure not everyone is there just for work. Why do people put up with all that? Is it just the dream of living in NYC.
For me, I started to age out of it which made it less worth it. But it's more than a dream or "fomo" - it truly is the most enjoyable place to be in the US. I visit nowadays and it's just as magical as it used to be.
That no longer seems to be the case. Yeah, it is expensive here, but when I talk to my friends living in those other cities, they aren't paying that much less! Their rent is cheaper or they get more for the money, but it isn't a whole different ball game like it used to be.
You're paying for an accentuated CELL in urban hell.
Just because you have a "dope spot to show how urban your display is"
You dont have shit.
Cut off all your power, access to food stuffs, equipment, necessities (pwr, wtr, fd, transport)
Yeah, you have a death-trap.
You have no idea of what "price" means.
`I killed your mother in front of you because she was attempting to stop your father from doing X... but at what PRICE?`
Put a price on your [everything]