
The Rise of Renting in the U.S - jseliger
http://www.citylab.com/housing/2016/02/the-rise-of-renting-in-the-us/462948/?platform=hootsuite
======
lowglow
I've sorta turned my back on the standard american dream. Racing to new areas
of growth, working to build someone else's dream, getting paid well
immediately for performance, paying high rent, etc to afford the image of
success, and making friends that participate in this same high ambition
culture. Instead of making markets, markets start making you. All the rules,
and "norms" we've collected around ourselves to participate are just foolish.

I ended up just buying and crashing in a van, exiting that mode of being, and
am much happier because of it. Now I get to save money, research and build
what I want when I want, and generally am very much less stressed. I'm no
longer beholden to a landlord, or feel like I must participate in activities
that just serve to entertain but not enlighten. I can spend the day at the
beach just reading if I wish.

You start to look at time as something that you can control again, and you
start seeing how much life truly is a gift, and that life itself should be
nurtured and cherished. There is also a sense of independence and DIY that
comes along with the lifestyle that feels like I'm leveling up in good ways.

Will this mode change for me? Sure. Change is inevitable. But for now I've
found more peace and focus than I have in a long time. I'm now able to
concentrate on longer stretches of time that hold bigger ideas, and then
asking myself how I might use that time to start refocusing my energy making
new markets.

~~~
seivan
How does it work with having a companion. It might be easier to find someone
with the same outlook. But if you're already in a relationship it's going to
be an uphill battle.

~~~
toomuchtodo
I might be able to answer that.

My wife and I are early 30s. I spent my 20s in the rat race, working 60-80
hour weeks for material possesions (nice vehicle, luxury townhouse, etc). At
some point, I got tired of it and said, "Can we try something different?"

I switched to a fully remote job. We disposed of the townhouse (no equity in
it). We downsized our lives (1 car! I ride a bicycle everywhere! You would not
imaging how much better shape I'm in) and began to live more frugally with a
short-term plan of moving onto a sailboat and living on the ocean for a few
years. We save 50%+ of my income (we live in a low cost of living area), we
should be able to retire comfortably around age 45. We'll be moving onto our
sailboat in the next few months, learning to sail together, and then starting
a long circumnavigation around the world (~5 years).

My wife didn't require any convincing. More quality time together for getting
rid of things we shouldn't have cared about in the first place? It was an easy
sell. If anything, she sold me.

Rule 1: Pick the right partner.

~~~
cylinder
Well you got a remote job, so you did a little locational arbitrage. Most
people leave the small towns because of lack of opportunity. The cost of
living is low because incomes are low.

Can someone come up with a model that's sustainable and applicable to the
majority of people?

~~~
toomuchtodo
My remote job pays the same I'd make locally in my tech niche. The benefit
comes from no longer having to own a car for myself to commute, gas, insurance
on that car, etc. It freed up the $20K in equity I had in the vehicle, and
saves me $5-8K/year in commute costs.

If I lived in SF, I would pay at least $2-3K/month for rent alone (that's
$24K-$36K/year _after tax_ money you're just burning up). Yet, you can spend
under $1K in almost any non-major metro in the US.

> Can someone come up with a model that's sustainable and applicable to the
> majority of people?

Make more than you spend and save combined, live frugally, spend judiciously.
This is not rocket science.

~~~
hueving
Right, you have a high paying job so it's easy for you to sit on a perch well
above the median and tell people how simple it is.

~~~
toomuchtodo
It's simple the same way exercise is simple: knowing what to do is easy,
having willpower to do it is hard.

Being financially independent can be done on a median wage, full stop.

[https://www.reddit.com/r/financialindependence](https://www.reddit.com/r/financialindependence)

[http://www.mrmoneymustache.com/](http://www.mrmoneymustache.com/)

"Is that all too fluffy and philosophical? OK, fine. Here’s how to cut your
life costs in half. Start by getting rid of your Debt Emergency if you have
one. Live close to work. Move to another city if you enjoy adventure. Don’t
borrow money for cars, and don’t buy stupid ones. Ride a bike wherever you
can. Cancel your TV service. Stop wasting money on groceries. Give your kids
the opportunity to achieve greatness without being pampered. Lose the
overpriced cell phones. Learn to appreciate the life-boosting joy of using
your own body to get things done. Learn to mock convenience. Practice
optimism."

[http://www.mrmoneymustache.com/2011/08/01/a-millionaire-
is-m...](http://www.mrmoneymustache.com/2011/08/01/a-millionaire-is-made-ten-
bucks-at-a-time/)

"A family of four in the US can live comfortably on about 24k per year plus
having a paid-off house. With an nice conservative 4% annual withdrawal/return
rate on your investments, you need $600k invested to generate this cashflow,
inflation-adjusted, forever, plus your $200k house. $800k total. Or, if you
want to get off your butt and work very occasionally to earn $12k per year,
you can slice the $600k number down to $300k! Or you can save the $600k AND
work, and keep saving more and more over the years – ending up a
multimillionaire all while doing very little paid work."

You will never get ahead if you live in SF, period ( _maybe_ if you strike a
startup lottery ticket; with those odds, might as well buy a traditional
lottery ticket and save the nights and weekends). I'm sorry to be the bearer
of bad news. You can view it as an adventure, but you'll eventually need to
dig out financially (overcompensate retirement savings) when you decide to
move somewhere else.

~~~
ahh
This works once you have a (supportive) partner. It requires living in nice
rural communities where you will never, ever meet a new person, though, so if
you start it single you'll stay that way forever.

So I'm in a major metropolitan center, burning cash at a way higher rate, so I
can hopefully find a wife. If I'm very, very lucky, that wife will want to
move with me to rural Colorado.

Sadly, this insane plan is about the best I can imagine.

~~~
jimbokun
"It requires living in nice rural communities where you will never, ever meet
a new person, though..."

Or Pittsburgh. Note where it ranks in the list of highest home ownership and
cheapest rents.

(I live here, and there aren't as many tech jobs as SF or NYC, but maybe more
than you would expect.)

~~~
ahh
You missed the point: the city is necessary for finding a partner, not a job.
Remote working, at a bare minimum, lets you be employed anywhere. You need a
critical mass to have any chance of dating (unless you're extraordinarily
desirable, or already have one when making the choice of where to live, like
the comment I responded to.)

------
Animats
Cheerleading for higher house prices used to be widespread, and was a big part
of the problem. It's inflation, people. It's still the same house, for more
money.

The median house historically costs about 2.2x the median income. That number
hit 4x nationally in 2007, and 10x in California. It's not that high this
time, but it's still very high by historical standards.[1] San Francisco hit
10.5x in 2007, and now it's around 9x.

In the 1950s, rent in NYC was typically 10% of income.

It may be time to look at applying antitrust laws to rental real estate. Where
there are a small number of large landlords, that's likely to push rents up.
This is more of a small-city problem than a big-city one; the biggest
commercial landlord in NYC has 5% of the rentable commercial space.[2] There
are medium-sized cities with one or two big landlords.

[1]
[http://www.economist.com/blogs/graphicdetail/2015/11/daily-c...](http://www.economist.com/blogs/graphicdetail/2015/11/daily-
chart-0) [2] [https://commercialobserver.com/2015/04/nycs-
top-10-biggest-l...](https://commercialobserver.com/2015/04/nycs-
top-10-biggest-landlords/)

~~~
rhapsodic
> It may be time to look at applying antitrust laws to rental real estate.

Or better yet, look at repealing or modifying the laws that keep the supply of
housing from rising along with the demand.

~~~
Tsagadai
Have you been to China lately? Many Chinese cities are what happens when you
allow supply to meet demand. Prices don't necessarily come down with increased
supply because it also increases speculation (and contrary to economists
believes we are not rational actors). Demand also follows supply, if you
increase supply there is often an increase in demand because now people can
move to $desirable_location.

~~~
seizethecheese
> Many Chinese cities are what happens when you allow supply to meet demand.

Um, no. Chinese cities are a direct result of government policies to boost GDP
through construction and are the supply of housing has little to do with
market forces.

~~~
ThrustVectoring
IMO it's more because of Chinese capital controls: buying an apartment that
sits empty for fifteen years is literally the best option they have for
turning money today into something valuable when they're old and cannot work.

------
drawkbox
The American Dream is looking more like a middle level marketing organization
with false advertising for most.

The problem is we just keep stripping away the middle class and lower class
consumer power[1][2] and the solution is getting wages up to fix these issues.

People wonder what happens in a consumer driven economy after stagnant wages
since 2001, well this. It leads to Great Recessions, a sideways investment
market and a few generations worse off with the US heading in the wrong
direction. The country has been Enron'd and drained of cash.

[1]
[http://www.nytimes.com/interactive/2015/01/25/upshot/shrinki...](http://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-
middle-class.html) [2] [http://money.cnn.com/2015/12/09/news/economy/middle-
class/](http://money.cnn.com/2015/12/09/news/economy/middle-class/)

EDIT: Multi-level marketing, was caught up on middle class, thanks for
correction.

~~~
ecnal
Those articles (and the data behind them) suggest the opposite of your point:
the middle class is shrinking, yes, but it's shrinking because incomes are
increasing and people who were previously in the middle class are moving into
the upper class.

~~~
drawkbox
Yes and that is welcome, but take another look. They go further to say that
since 2000 that trend is no longer a big reason. Even stated in the first
paragraph that incomes are falling as the new big reason.

 _The middle class, if defined as households making between $35,000 and
$100,000 a year, shrank in the final decades of the 20th century. For a
welcome reason, though: More Americans moved up into what might be considered
the upper middle class or the affluent. Since 2000, the middle class has been
shrinking for a decidedly more alarming reason: Incomes have fallen._

'67-'99 there weren't stagnant wages as much as post 2000, where we have seen
a sideways market, massive recession, 15+ years in horrible economic
conditions worsen for lower and middle. Costs rising way faster than wage
increases eventually crushes the lower/middle.

The CNN article also mentions money locked up in the upper class and so does
an associated video [1]. The lower/middle spend in downturns, the rich do not.
Eventually demand is depressed and noone can buy anything. It is bad for
lower/middle and upper when noone is gaining in income and has no consumer
power gains to grow on. People buy less, people sell less when consumer power
is locked up.

 _For decades, the middle class had been the core of the country. A healthy
middle class kept America strong, experts and politicians said. But more
recently, these residents have struggled under stagnating wages and soaring
costs._

[1]
[https://www.youtube.com/watch?v=oeCfq-9l_b8](https://www.youtube.com/watch?v=oeCfq-9l_b8)
(around :30)

------
kazinator
This article is full of "no kidding" like, oh:

> _In fact, metros with greater shares of renters have higher wages, higher
> productivity (measured as economic output per capita), and greater
> concentrations of high-tech firms, according to Mellander’s basic
> correlation analysis._

People are attracted to where the jobs are, and so everything gets bought up
and inflated, and the late comers have to rent.

In related news, you never see rental apartment buildings among rural grain
elevators. Gee, why is that?

Correlation analysis? Yeah, we wouldn't want to jump to any premature
conclusions like that the jobs and presence of industry leads to renting;
there is a glimmer of hope that we might be able to prove that renting
actually _causes_ higher wages, higher productivity and the presence of high-
tech. It could be that people come to the city just for the privilege of
participating in expensive rent. Then when their bank accounts drain
dangerously low, they realize they need high wages, and so they create
companies and give themselves salaries.

Fact is that renting is not some way of the future or a shift. Even if 99% of
the people rent, it will be because they have to, and all will continue to
foster the dream of owning a home, and continue to envy the squirrels in the
park that _de facto_ own their own space in the hollow tree, or the birds that
have their own nest, and don't pay a fucking thing to anyone.

~~~
awakeasleep
Property taxes should basically kill the dream of "and don't pay a fucking
thing to anyone" for anyone that lives in the US.

Especially city dwellers. I was surprised to see tax for properties I could
technically afford cost more per year than I had been paying in rent.

~~~
ap3
Yes. Because renters don't pay property taxes /s

~~~
paulddraper
Though they do usually pay _less_ since they usually live in less property.

~~~
ant6n
This. I rent a small apartment near downtown. If I bought property, it would
most likely be in the same area, but not a small apartment.

------
jpmattia
I'm a little surprised that there hasn't been a populist rebellion over
interest rates. Low rates have inflated pretty much every asset class. This is
especially so in housing: The Fed needed to reinflate housing prices in order
to make many systemically important players (banks, AIG) solvent again.

I have to wonder though: In re-inflating house prices, have we just off-loaded
the bad investment to non-systemic institutions? ie, avg people?

~~~
nugget
Bernie Sanders, a proud socialist and outspoken advocate of wealth
redistribution, just pulled even with Hillary Clinton for the Democratic
nomination for President. In the Iowa and New Hampshire primaries, voters
under the age of 30 broke for Sanders by 70% (compared to 57% for Obama in
2008). Meanwhile Donald Trump, who has the most liberal social record of all
the GOP candidates, and who continually insults the GOP establishment, is 20
points ahead of the rest of the field. For us fans of politics, this is like
witnessing two black swans simultaneously emerge within one pond and begin
loudly mating. Your populist rebellion may be here.

~~~
meddlepal
Wait and see on Bernie. NH democrats might as well be from Vermont and I don't
think there is any doubt Bernie will eat VT's primary when it comes up.

~~~
kmonsen
He will probably not win, but he is doing much better than anyone expected.
Same with Trump (except he has an outside chance at winning this year).

~~~
yardie
They said the same of a certain junior senator from Illinois. Why do people
think Sanders can't win when all evidence points to the contrary.

Sanders is sticking to the core liberals. That solid 25-35% that will actually
vote. Hillary is trying to pursue centre, swing voters and losing the liberal
core. Trump is doing the same on the right.

Hillary and Jeb assumed they had the left and right core voters, respectively,
locked up and both have been proven completely wrong.

~~~
jandrese
Sanders can't seem to connect with Black and Latino voters, and if you can't
do that you aren't going to win a Democratic primary. Minorities love Hillary,
for reasons that are not entirely clear to me.

Also, Bernie supporters skew very young, and young people are relatively bad
at making to their polling places, especially in primary races.

He has basically no chance of taking Nevada for example, and will probably be
down by tens of points. If the election is close at all there it will be a
major win for him.

Also, the establishment Democrats see him as George McGovern 2.0 and are
terrified of giving Donald Trump a 49 state sweep.

------
agentgt
My wife and I bought a 2-family (we live in the other unit) a couple of years
ago and so many people told us how it was a bad idea. People said we would
have horrible tenets and that finding renters would be hard and that selling
rental property is a nightmare.

Eight years later and I can tell you it was one of the smarter investments I
have made. Had wonderful tenets. And after some refi magic the house is not
far from being paid off.

------
rayiner
I don't think I'd have any interest in every buying a house if it weren't for
the insane tax deductions for mortgage interest. Why be stuck in one house
when your living situation changes over time (new kids, kids get bigger, kids
move away, job changes).

~~~
derekp7
That tax deduction does get smaller every year (as the interest/principal
balance changes).

The biggest issue I found with owning is that the equity doesn't build up fast
enough at the beginning (with a 30-year mortgage), so if you sell after 10
years the costs pile up to the point that you have almost no net proceeds (5%
commission, survey/title/transfer tax/inspections, plus prorated property
taxes). A 200K property could easily cost you 20K or more to sell.

The best thing you could do is to put as much down as you can, on as cheap of
a property as you can (condo, townhouse), then send in additional principal
payments so that you could pay it off in 6 - 10 years. Then you can either put
away extra savings after that, or move into a slightly more expensive place
(about 60K more than your current house), and start the 6 year cycle over
again.

~~~
turar
I would argue in the current situation of 3.5% mortgage rate, the best
scenario is to invest the cash in the stock market. If your returns are
anything above 3.5% over the 30 year load amount, you're good.

~~~
irishcoffee
I read this counter-point a lot. Its never clear to me how you invest the
mortgage payment and also pay rent to live somewhere. Am I missing something?
Sincere question.

~~~
floppydisk
The basic premise behind that idea is rents are (historically were) cheaper
than a mortgage so you could take the mortgage-rent delta, invest that, and
generate a return greater than the interest rate on the mortgage and end up
ahead. A lot of the mortgage calculators have a 3-5yr inflection point where
renting, traditionally, was always cheaper if you planned on staying somewhere
for 3-5yrs and moving.

The problem is, the equation has flipped. Mortgage payments are now, in many
cases, cheaper than rent and there's such a high demand for rental units in
some metro areas that landlords have no problems keeping tenants increasing
rent 3-10% year over year. Ideally, you could do the same arbitrage buying a
house (ideally an asset that nets 0 when you sell it worst case and you get
your money back) and invest the rent-mortgage delta into other assets. The
problem is "unlocking" the house option. If you don't have exemplary credit,
and a certain pile of cash available, banks are leery to touch you and make
financing available. Ergo, you get forced into the rental market and there's a
huge incentive to turn properties into rentals.

Tack on the millennial generation's hesitancy to settle down in one location
and you get a set of economic conditions that encourage renting and regular
rent increases.

~~~
Phlarp
>Tack on the millennial generation's hesitancy to settle down in one location
and you get a set of economic conditions that encourage renting and regular
rent increases.

Are we hesitant to "settle down" or are we trapped in a death spiral of
student debt, rising rents and underemployment?

~~~
floppydisk
As always, it depends. Speaking anecdotally, most of the millennials I know
speak rather forcefully about their desire to not settle down, marry, or begin
a family prior to 30. I can count the number (amongst my friends) on one hand
who discuss factors like underemployment and debt as being significant in
their decision to delay settling down. Most seem to enjoy the party/city
lifestyle and spend their time focusing on their career/traveling instead.

Yes, it's possible all of those things are factors but I'm going to argue for
most it's subconscious rather than explicit factors in a settle/not settle
equation. I think a lot of millennials are buying into the "extended
adolescence"/party phase/single life/no responsibility/free spirit/high
mobility (pick your moniker) lifestyle choices and acting accordingly - based
on my anecdotal experience.

------
at-fates-hands
The article doesn't really touch on two very key facts.

1 - When I grew up in the 90's all I heard from my rich business owners were
to buy real estate. The value _always_ goes up and its a good investment.

This isn't true anymore with the crash and younger people don't see real
estate as a worthwhile, long term investment. As such, they're not looking at
paying for something for so long and not getting anything out of it.

Same thing for the "equity" part of this argument. Those same business owners
pounded into my head the idea that my money when I was paying rent wasn't
going towards anything and I would never have any value in a rental like I
would a house or town home that I owned.

2 - The transient nature of the younger generations. When I was growing up,
your life arc was pretty well established. Go to college, get a nice job in
your career field, get married, buy a house, have some kids.

This just isn't the same plan most younger kids have. My nephew is 21 and has
been "couch surfing" for years. He has no aspiration to get married, or buy a
house. He pretty much lives day-to-day and gets by with help from his friends.
His friends are the same way. They change apartments about every 6 months.
Different parts of the city, in order to get closer to where the "action" is
they say.

With a far more transient, younger population, it makes sense their not going
to buy houses and settle down. We've spent decades talking about how we want
to have everything available wherever we are, we WANT to be a mobile society
and culture. This younger generation has simply taken it to its logical
conclusion. No need for a house when I can just crash with my homies. No need
for a tv, house, car since we've developed an entire culture to handle that
and give it you on your phone, tablet, laptop wherever you are. Car? We have
Uber and Lyft. No house? We have AirBNB,

This makes sense on a bunch of different levels tbh.

~~~
2muchcoffeeman
Are leases so short there that they can just move every few months?

~~~
at-fates-hands
Closer to 6 months, but yes. They put an ad on craigslist or some of the other
smaller publications like the kind you see at bars. They pool their money, get
a small ad that talks about taking over a lease near some hip part of town.

My nephew said within a week or so they're flooded with responses, They work
out the paperwork with the landlord and they're on to the next place.

------
chishaku
Why are mortgage debtors referred to as home owners?

Edit: I was being a bit facetious.

With liar loans, no down payment mortgages, deferred interest, "prices only go
up," etc, it's been too easy to sell home "ownership" to people without their
requisite understanding of the risks involved and the constantly changing
market realities.

I'm all for personal responsibility but the use of language is powerful.

~~~
themagician
Because in the US we like to sell people on the idea of "ownership", when the
reality is that the bank retains all the real value.

Only a fraction of so-called "homeowners" actually own more than 50% of their
home. Most homeowners just rent from the bank. Many will rent from the bank
for life.

The way homeownership is sold in the US is nothing more than a way to get
people to give up hundreds of thousands of dollars to the banks under the
illusion that they are building wealth or equity. And when they finally sell
their home 20 years after they bought it for twice the price, they don't even
consider that after inflation and mortgage interest they basically broke even.

~~~
cryoshon
Hm, I've never thought of it this way, but you're entirely right.

This explains why many struggling families can "get" "reverse mortgages" in
which they sell their earned equity back to the bank that has always owned the
majority share. Until they have sold all their shares, and are evicted, that
is.

~~~
toomuchtodo
Indeed. Being a mortgagee is simply a renter by another name, with tax breaks.

------
Gratsby
A decade ago, I lived in an area where people lost houses left and right. One
neighborhood had a 50% foreclosure rate. Those people all lost whatever equity
they had and home prices have gone up significantly since.

Of course more people are renting. If they have managed to save the down
payment required, they have to question whether they could really afford that
property again. Most haven't because rents are higher than their mortgages
used to be. Who can save $100K+ in that situation? And if they could, where is
that $500K house that you can buy with 20% down? Probably not in the same area
where you have a job that allows you to save $100k.

The government is propping up the banks which are propping up the housing
market. We'll see a little pop in the next 24 months, but it will be a quick
one because it will release some of the hold backs that are in place today.

------
api
As a side effect of historically cheap money, house prices have risen so high
that entire younger generations are locked out of home ownership in quite a
few areas.

There are a few outliers but in general it's good jobs, affordable housing,
pick one.

~~~
dragonwriter
> As a side effect of historically cheap money, house prices have risen so
> high that entire younger generations are locked out of home ownership in
> quite a few areas.

If it is a side effect of cheap money, how is it pricing people out of the
market? The rising sticker price of the property should be offset by the lower
price of money which is driving it, so that the actual total real cost of the
purchase (including the financing cost) is the same.

Only if something _other_ than the general price of money (an increasing
_spread_ between the price of money for favored debtors and disfavored ones,
presumably including the young people priced out of the market) is driving
real estate prices should someone be priced out of the market.

~~~
randomgyatwork
I live in Toronto, 10 years ago a house in the suburbs may have been
affordable for someone like me, now they are hugely over priced. I could make
a 5% downpayment and have a mortgage till the day I die, but that doesn't seem
reasonable to me.

Maybe rational buyers have been priced out of the market?

~~~
dragonwriter
I'm not saying that people aren't priced out of the market, I'm saying that
decreases to the general price of money _cannot_ explain people being priced
out of the market.

> I could make a 5% downpayment and have a mortgage till the day I die, but
> that doesn't seem reasonable to me.

Right, but if the only price increase was attributable to the lower price of
money, you'd have a mortgage just as long and with just as much burden now as
before the decrease in the price of money -- you'd just pay a higher nominal
purchase price on the house, and lower interest and fees associated with the
loan.

If, instead, you've been priced out of the market, that means something other
than a general decrease in the price of money is involved, because the
increase in the prices is out of line with the decrease in the price _you_
would pay for financing. If it is cheaper money driving the price, its money
that has gotten cheaper _for some other class of potential buyers_ than it has
for you.

~~~
randomgyatwork
I agree that there is something more beyond the cheap money, however it is
possible that the cheap money, combined with a few bad actors has driven up
the prices.

Say one or two houses sell way over market value, that drives up the price of
all the houses in the neighbourhood. If that happens a few times you have
massive price increases fueled by easy access to money.

------
toast_coder
I think this articular is giving off some bad interpretations. First and
foremost this guy's data all starts at 2006. Well, do a quick GIS for a chart
on home ownership in America. 2006 was basically the peak for at least the
past 40 years, and probably longer than that. Drawing conclusions about how
America is changing based on changing home ownership since a huge bubble which
peaked when he started calculating his data is downright poor science.

------
jensen123
I find it interesting that many people look at governments differently than
they look at say grocery stores or auto mechanics. If a grocery store or auto
mechanic is charging too much or providing poor service, I would go to another
one. Why don't people do that with governments? Obviously, because they're
kinda "stuck". Moving can be a serious pain in the rear.

So how to make moving easier? If you're renting a home, then it's certainly
easier to move than if you're owning. However, it's still a major pain if you
own a lot of physical stuff. But as far as I can tell, owning lots of physical
stuff is becoming less and less necessary. You no longer need a huge amount of
music records, paper books, VHS movies, billiard table, pinball machine etc.,
since you can fit all those things into a tiny computer. Also, online shopping
makes finding/buying any item easy, so keeping things just in case you might
need them someday makes less sense now than it used to.

I currently own a home, but I'm tempted to become a renter.

------
tomg
[http://www.nytimes.com/interactive/2014/upshot/buy-rent-
calc...](http://www.nytimes.com/interactive/2014/upshot/buy-rent-
calculator.html)

~~~
sosuke
I love it, but it doesn't include the rent being raised every year like
clockwork. Right now it's $1500, next year $1575 etc

~~~
dsp1234
The option to change the rental growth rate is located under the section
titled "What Does the Future Hold?" with a title of "rent growth rate" and a
default value of 2.5% (with a range of -5% to 15%)

------
bluedino
I'd have to save up almost a years pre-tax salary to buy a home. Well, one
that I would _want_.

I could save up half a years pre-tax salary and buy my not-ideal house.
Nice/modern home, good location/schools, or large size. It seems like you can
only pick 2 without spending a ton of $.

Until then, I rent.

~~~
cpursley
Wow, in my area you can almost buy a (albeit - modest) home outright on a
years mid+ level tech salary.

~~~
leetNightshade
Where do you live and what kind of salary are you talking about?

~~~
cpursley
Atlanta area. Average Ruby web dev salary for region and experience level. You
can buy a McMansion (if that's your thing) for less than the price of a closet
in the worst parts of the Bay Area. Poke around on zillow.com.

~~~
leetNightshade
I don't live in the Bay Area, but I live in L.A.. Cost of living wise it feels
like I do. I can't believe how much money goes to rent, and paying for lots of
gas for commuting. The urban sprawl with lack of a good efficient means of
public transportation, is pretty disgusting.

------
kilbuz
The statistic that went most against my intuition is that San Francisco has
the one of the lowest 'rent burdens' in the US. That is, rent as a percentage
of income is on the low end and equivalent with many Midwestern cities. I'm
guessing that the typical SF renter paying 25% of income on rent may be
dealing with a _lot_ less space (and more roommates) compared to someone in
Pittsburgh or Minneapolis.

~~~
alexchantavy
The lower burden might also be because SF incomes are a lot higher than in the
Midwest.

~~~
eldavido
This is true, but I wonder why. Are SF employees simply that much more
productive than elsewhere? (Serious question, it might be that for certain
types of work, you really do need the talent base here, but a company is
certainly paying a premium for it these days.)

~~~
onlyrealcuzzo
Yes, they're some of the most educated people in the world.

------
ErikAugust
Has anyone released a halfway-decent 'Rate My Landlord' site? Asking for a
friend.

~~~
steve-howard
They'd need to address the powerful incentive to create fake reviews.

~~~
AndrewUnmuted
While true, I think the bigger issue is that no landlord would, in their right
mind, agree to be represented on a website that is almost certainly going to
contain nothing but negative reviews.

If one stops to ponder what would make an individual want to rate their
landlord on a "RateMyLandlord" kind of site, then the answer is pretty simple:
hatred. The biggest reason for people to write such a review is to complain.
Usually, the complaints people write stem from issues related to their
inability / lack of desire to pay their rent on time.

Landlords hate not getting paid. Especially in major cities, where regulations
basically annihilate their ability to operate in an honest and competitive way
without significant impact on their financials. Getting their monthly rent on
time is really the only way they can turn any kind of profit on their
business.

My income is higher than it has to be for the place I rent here in Brooklyn.
But I get charged far below market rents. Why? Because I pay my rent every
month on time without hassle. Because I don't wreck my apartment, don't need
many repairs, and don't bother my neighbors. So even though I could afford to
pay the market rate, I am a 'good' tenant, so I pay the so-called
"preferential" rent, which is almost $400 per month cheaper than the rent cap
instituted by NYC's horrid rent control laws.

That's right. My landlord could actually charge me more, but he doesn't,
because I'm not a shithead. What am I supposed to write in my RateMyLandlord
review? That I am a good tenant and get charged lower rent than everyone else?
There goes all of my reward for being a decent person.

I don't see any way for such a site to work without damaging reputations or
ruining nice arrangements tenants already have with their landlords.

~~~
warfangle
I was a good tenant. I paid on time. I didn't wreck my apartment. I did need
repairs once: the hood (required by code) over my stove was never installed. I
did ask for an exterminator repeatedly, because mice were coming in through
the walls (there was a 2" gap between the floorboards and the sheetrock behind
the baseboard radiator cowling; I caught 18 mice in one weekend). I did ask
for an exterminator repeatedly, because about 15 months in bedbugs started
coming in through my walls. About 16 months in, my landlord informed me they
were going to begin eviction proceedings against me for failure to pay rent. I
had paid every month, on time. The building had changed owners, and the new
owner bungled their rent payment history. Had to hire a lawyer to send them a
letter (along with a thick packet of supporting documents) declaring that no,
in fact, I did not owe them four months rent.

So yeah, between illegally trying to evict me, never once exterminating that
place, etc etc .... I'm glad I don't live in a building owned by a shitty
landlord anymore. I'd give my previous landlord a solid F-; I'd give my
current landlord an A. I'm also paying 150% what my previous place was for the
privilege of having a landlord that doesn't violate the law monthly.

------
lkrubner
The ratio of median wage to median rent peaked in 1958 at 22% (or rather,
4.54). That was also the peak of the Baby Boom. Which makes sense, really,
because the ratio of wage to rent is one of the fundamental determinants of
male sexuality, especially back then, when it was less common for women to
work. It was much easier for an 18 year old to afford their own apartment and
start their own family.

People often point out that the median male wage in the USA has been declining
since 1973, but what is rarely pointed out is that for men under the age of
25, its been falling since 1958. The loss of high paying low skill jobs means
the only high paying jobs are high skill jobs. That has forced two adjustments
on us: one, people start their adult lives later than they used to, and two,
some people never get there, as they never acquire the skills to get there.

------
cryoshon
Just one more symptom of runaway economic inequality...

The consumer has less and less real ownership/power. In good areas, the
landlords have realized that year over year rent increases won't prevent units
from being rented... and so, people are drained further unless they want to
move away from where the jobs are.

------
prostoalex
Financing for real estate projects dried up after 2008, and single-family
construction is not an industry that can deliver overnight when demand has
risen.

For more analytical view of the real estate market, check out UBS' report
(which is bullish)
[http://files.ctctcdn.com/f0054e99301/0f155366-4016-4c0f-ade0...](http://files.ctctcdn.com/f0054e99301/0f155366-4016-4c0f-ade0-8fbc6a479acf.pdf)

Looking at current buy-vs-rent ratios is not very useful, as we don't have
much insight into the reasons for renting. Some prefer personal mobility that
comes with renting, but some are just waiting on more
affordable/accessible/convenient ownership options to pop up, and will be
buying in a few years.

------
rm_-rf_slash
To anyone who noticed one of the cities with high rates of homeownership, that
can work remote, withstand rough winters, and accept that their football team
will never win the Super Bowl, MOVE TO BUFFALO!

Buffalo used to be a very wealthy city. It was the first American city with
widespread electricity (thanks, Niagara Falls!), and because it's had some
hard times, you can literally buy a mansion at (relatively) bargain prices and
rent it out to half a dozen people, and you still get to keep the master bed
and bath for yourself.

And there's the added bonus of living in a proud, blue collar city, where
people care about who you are, and not what you're paid.

~~~
horv
I grew up in Buffalo and I would not recommend this for a lot of reasons.
There are plenty of other cities with affordable housing (including lower
property taxes) and much more pleasant weather.

~~~
xenihn
Where? Curious to hear your thoughts.

------
Mikeb85
Not a big surprise. Whether or not people want to admit it, economists like
Piketty, and many others (even Marx) have predicted this. And the trend isn't
going to stop.

The future is looking more and more like Elysium than Star Trek...

------
ontheinternets
What is the correct ownership rate? and why do we care about the change from
2006?

The data from 1956 to the present makes this whole article kid of boring.
[https://www.census.gov/housing/hvs/data/histtabs.html](https://www.census.gov/housing/hvs/data/histtabs.html)

------
shmerl
With prices soaring into crazy heights, buying simply becomes harder and
harder. The problem is - renting is becoming harder as well!

------
jkyle
Rent is a tax on the poor by the rich.

------
ck2
Think of renting as "housing as a service". Ha.

Except for one problem, landlords. Most are not good people.

Would rather be my own landlord.

~~~
kylec
I don't own, but if I did I'd love a "landlord as a service" where I could
just call or email someone about a problem and have them fix it.

~~~
Avshalom
This I think is important because I sure as hell have never rented anywhere
where a landlord was some one to call if you needed to fix a problem.

~~~
jdmichal
Where I live, if the landlord doesn't fix the problem within a reasonable
amount of time, you can fix it yourself and deduct the repairs from your rent
payment. You should educate yourself on your local laws surrounding rentals if
you haven't already; there are likely similar terms where you live.

~~~
Avshalom
and then what lose more money taking time off work to go to court when the
landlord tries to evict you for not paying rent in full?

~~~
Vraxx
They won't try to evict you assuming you're abiding by your local renting
laws, because I'd bet they've read them as well considering it's part of their
job. A lot of landlords will take advantage of the fact that tenants often are
not aware of these rules to get away with not abiding by them, but if you
demonstrate that you know the laws they aren't going to mess around when you
can sue them in small claims court and win handily. Not to mention, oftentimes
if you do suffer some opportunity cost as a result of their actions, that cost
can be included in the damages.

