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So the three largest problems for millenials:

- large and increasing cost of housing due to artificial restrictions of housing through zoning and housing permitting

- large and increasing cost of education due to subsidized education with no cost control of the product, leading to bloat in administration and unnecessary spending at universities [cost increase is both monetary and in time due to grade inflation]

- opportunities are increasingly centered in jobs and cities where the two previous problems are aggravated the most

Neither of these are productive uses of the amount of debt millenials accrue for this purpose.

University education is mostly signaling that you are conscientious, smart enough and execute an imposed set of tasks over an extended period of time [1]. The book in the link argue although an individual benefit from graduating at a good college the society as a whole does not get extra value from more people needing a college education to get a job. Maybe we could get a cheaper signal for this?

When buying a home housing has the main purpose of sheltering a family. Short-term increases in house prices lead to a decline in births among non-owners and a net increase among owners [2]. With decreasing birth rates that is already below replacement in the west making it impossible for most to buy and making rent crazy high seem like an incredibly short sighted idea.

[1] https://www.amazon.com/Case-against-Education-System-Waste/d...

[2] https://www.nber.org/papers/w17485

Edit: added extra info on education having a time cost. This is Peter Thiels long-standing point.

Exclusionary zoning and high university administrative costs are basically a transfer of wealth from millennials to baby boomers.

The student loan bonds probably benefit the ones owning them the most, which is not baby boomers in general. Maybe retirement funds buy them so they indirectly benefit?

Exclusionary zoning benefit those that own housing the most, so it does benefit a bunch of baby boomers. However, those with leverage of existing rental units seem to benefit the most because they gain leverage through rental income in the same market as they buy new units in so they can slowly gain new low-risk wealth over time without changing their cost/revenue balance.

In general low-risk investments such as student loan bonds and rental properties should be low-margin. However, due to regulations that stop the market from doing its thing that is not the case.

I believe the "baby boomer" cohort in the US owns the majority of the wealth, probably just because of the age and size of it. They have the voting and economic power to control society. They should be careful not to create a large angry cohort of young people as they head off to retirement, leave the power centers, but still draw on the resources of others. So far they have done a poor job of that. Maybe universal surveillance, AI, and robot soldiers can prevent the younger generations from clawing back some of the wealth extracted from them, who knows.

> large and increasing cost of education due to subsidized education with no cost control of the product, leading to bloat in administration and unnecessary spending at universities [cost increase is both monetary and in time due to grade inflation]

One could replace "education" with "health care" and make another valid important point.

Millenials are largely healthy on average due to their youth which is why I didn't include that. However, for the ones that are sick that is definitely a huge problem.

A key thing I look at in graduates is what they did at university. I'm less concerned if they flunked their course just before finals, the things I'm looking for are

1) Independent living -- did they go to university a long way from where they lived? If they treated it as 3 more years of school, they've missed a major point. I'm not going to be parenting them as they are dropped into the real world at the deep end. 2) Extra curricular activities at uni -- did they do student radio? Or theatre? Or music? This indicates they aren't just doing what they think is required of them, but have the ability to think for themselves.

Kids straight out of school are a massive risk, not only can they do the job, but can adapt to an adult world? Graduates that just did 3 more years of school are the same risk.

Kids that dropped out at 16 and worked in a garage for a few years and solved some problems the business had? Brilliant.

Is this for a startup?

A large corporation might tilt more towards someone that does an assigned task on time regardless of how mind-numbing it is, and even when they have to invent the instructions as they go along.

Depends on the person hiring and how much flexibility they have (and how skilled the hiring department is at getting past any corporate pre-filtering from HR)

I don't disagree on your 2nd and 3rd points, but the first point could use a [citation needed]. I live in SV, so I certainly understand there are areas with "artificial restrictions", but I'm not sure it's a major factor, let alone the primary factor. (I mean, yes, if we stacked the entire Peninsula with wall-to-wall tiny houses, the problem would be "solved", but that doesn't prove that this would happen on its own even without restrictive zoning).

Income inequality and the falling prices, in real terms, of virtually everything the upper-middle-class-and-above need to live their lives, means there is more spare money to allocate towards housing, bidding housing costs up.

In a world where food and clothing is cheaper than ever to "most of us", why not pay those rising costs, thus bidding prices ever higher?

There's so much room between the present built environment and "stacking the entire Peninsula with wall-to-wall tiny houses" - that's a false dichotomy that prevents taking any action. Supply and demand are both part of the solution - you're correct that in a desirable area like the Bay Area with wealthy industries, people will have more money to spend on housing. But increasing housing construction by 4x would make a huge difference but still mean fewer new units per year than San Antonio.

I'm not presenting it as a false dichotomy between "do nothing" and "stack the entire Peninsula with wall-to-wall tiny houses". I'm presenting the latter option as an example that the most extreme, non-realistic course of action would not occur even absent the regulatory environment.

Obviously every additional unit places a very slight downward pressure on housing prices, I just disagree that regulation is a primary factor at play here.

I think you're also missing the fact real estate as an asset class has more value as an investment vehicle v(holder of value) than it does as providing the utility/value it was designed for.

Furthermore, low interest rates has increased the cost of homes as well and increased the amount of money swimming around looking for a home.

Investment in housing and low interest rates would actually spur new construction and thus reduce rents if the housing supply were more elastic. It is the fact that supply is inelastic in a few cities that makes investment harmful for homebuyers.

And technically the market has responded by the plethora of low cost housing all over the city.


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