It seems like it's the same story everywhere I look. Housing is the main driver of inequality and there is little change happening. We have the same problem here in Germany.
I am currently living in Munich to finish my CS Master's at TUM and build a startup, and it is absolutely impossible to find anything remotely affordable. I am supported by two startup scholarships and make enough to get by, but no landlord even gives me the chance in the first place after they see my income and plans. Right now I am paying 940€ for ~20sqm, and only because my mom co-signed my contract - which is incredibly humiliating as a 24 year old guy.
And even with high-paying jobs it's impossible to get anything remotely affordable. My girlfriend just finished her degree and makes 75k straight out of college and still gets rejected either for her financial situation or because the rental contract is already set to increase 8% each year - which we simply cannot afford. And it's not just Munich. Every city in Germany has this problem.
How the hell are we ever supposed to build up some savings, settle down and have a comfortable life? It really feels like being born 15 years too late for this.
Germany paid a lot for our education but offers us little reason to stay. We are already looking to move to other places and created a university-wide google sheet where we compare different countries and cities around the world for those kinds of categories.
I believe we are in a time where everyone is milking the 90s-20s real estate bubble and no one wants to be first to fold. Internationally, not just on a per country basis. As soon as say, French real estate collapses (or UK or USA or Germany etc), the whole rotten castle of cards will fold as well. If it doesn't you can enjoy the expensive property, but you won't be eating farmed foods, won't be in a clean environment and wont have nurses to look after you since no one can afford to be in any relative area and I mean just for shelter from the elements.
Why would it collapse? There’s insatiable demand for extreme limited property. Interest rate hikes may lower the price of property but the interest will rise proportionately.
Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.
If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming.
And housing is expensive by design and not by constraint. I'm staying in KL, a comparatively cheap place by Western standards. The housing market is crap here from a seller perspective as you have an over-supply of condos. That, despite the large amount of foreigners living here.
You can fix Western supply issue by allowing high-density condos nearby cities. Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses.
> If it doesn't collapse, then society may collapse?
But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society.
I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's never the most fun solution, but it is a solution.
When I was in my 20s I wanted to live in Manhattan more than anything in the world. But I was never able to make it happen, it was too crazy expensive even back then. Eventually I gave up on that dream and moved to a place that was cheap and was able to buy a house no problem. It's no Manhattan, but it is home and has been a good place to live for decades now. In hindsight it was a great decision to move away and buy a home in a cheap area instead of banging my head against the impossible real estate market of NYC.
It's always an option to move to a cheaper location!
But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society.
I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's never the most fun solution, but it is a solution.
Jobs. Most people don't have the luxury of working fully remotely. Areas with cheap housing are overwhelmingly geographically isolated and economically depressed, which is why the housing is cheap - local residents simply can't afford to bid up the price of housing.
A lot of people would rather struggle to make rent than raise their kids in a community with high crime, bad schools, poor healthcare, limited prospects and a general atmosphere of despair.
What good is a job, if it doesn’t cover your expenses, doesn’t allow you to save any money, is located in an area where there is no affordable housing, and restricts you from doing normal, societal things like having children.
I don't know the US situation, but in my city in Europe, there is a factor 2 to 3 for flats in fashionable location compared to my location. I have the same traveling distance to the city center, but my location has less public transport options. Schools are ok, it's even better than in the fashionable district, and I have less criminality.
I've spoken to a few colleagues who just arrived in the city from another region, and they all went into the fashionable district without considering any other locations, because someone from that district told them any other district is bad.
The fact is that if you bought your flat in this fashionable district, it doubled in value over 7 years, whereas in my district, prices went up 50% at most.
For me it is the same as the stock market, people follow the trend and smart folk get out before it goes downhill.
> Jobs. Most people don't have the luxury of working fully remotely.
Then you commute. Yes, sacrifices are required but it's not the end of the world (or collapse of society, as GP put it). When I moved to a cheaper place over 20 years ago working remotely wasn't much of a thing so I had to drive 60-90 minutes (occasionally 2 hours). It wasn't great but it was a pragmatic solution that allowed me to have a nice place to live and leftover money to save.
> A lot of people would rather struggle to make rent than raise their kids in a community with high crime, bad schools, poor healthcare, limited prospects and a general atmosphere of despair.
There is a very wide gray area of reasonable places with reasonable prices between the extremes of San Franciso/Manhattan vs. economically depressed areas with "a general atmosphere of despair".
> It's always an option to move to a cheaper location!
If you’ve got no savings and are trapped in debt, how do you suggest people do this? How are these people managed to scrape together the deposit and moving costs? The people who would need to do this the most are locked out of it. If you don’t have family members to stay with, what you end up with is skyrocketing homeless numbers which seems to be what is happening in California.
Sell all your furniture and all but irreplaceable and critical belongings, possibly including selling any cars you may have. Use a few thousand dollars of that money for airfare or gas money and move yourself and minimal belongings to a new location. Stay in a long-term-stay hotel (<$100/day) for a week or two until you can get the cheapest apartment you can find. Slowly repurchase essentials as needed. Done.
> Sell all your furniture and all but irreplaceable and critical belongings, possibly including selling any cars you may have. Use a few thousand dollars of that money for airfare or gas money and move yourself and minimal belongings to a new location.
We’re talking about the poorest people in society here so let’s assume they don’t have a car. And they’re probably not taking a flight anywhere, they’re most likely taking a greyhound bus if we’re running this thought experiment in America. How many thousands of dollars do you think they have in furniture? Do you really think it is going to get that person out of any existing debts they have, and then leave them with multiple thousands of dollars to spare? Because if you’ve got $1500 dollars and the hotel room costs $75 a night, you’ve got 20 days to find this cheap apartment and find a job in this city where you know no one before you’re homeless. In reality, you have less time because you’ve got food and transport costs on top of that. Oh and now you’re probably not getting any benefits because you’re in a different town and probably have to go through the system again.
Do you really think this is a good way for someone to turn their life around or do you think that the desperation of their situation means it is far more likely they are going to get exploited by both landlords, employers and possibly criminals in this new town, made all the worse by the fact that they don’t have any contacts and zero support network?
I started looking for houses in 2005-2006. The outlook sounded similar, constant prices going up and missing out. House flipping was booming and I was priced out of all the desirable areas. What I did was start near where I work and move down the line farther out getting to less desirable towns. 2008 hit and at that point mortgages dried up. I finally got a house in 2009, in an area where schools were not as good and was not as desirable and prices fell for the next few years where I felt like I over paid. With all the money I put in , being a fixer upper too, I just assumed if I sold I’d simple take a loss and move on with my life. Now, a decade plus later the area has moved from less desirable to decent. In the end it worked out. Once again today though the same areas I couldn’t afford are still the desirable area. People want the cute down time I was priced out of 15 years ago. There are still towns that are more affordable.
> And you stroll into whatever town/city/village with your income that barely meets the cost of living in NYC/SF/LA and destroy that housing market.
There's a lot of truth in that.
The ubiquity of remote work has made this much worse. It used to be that one could move to a cheaper area (as I did) but it still had to be within orbiting distance of a source of income.
Remote work broke that constraint which is causing a lot of disruption in very remote areas.
Also the other obvious answer that people have been doing for centuries is multi-generational households.
It's not the end of the world to live with your parents (or your partner's).
I think we could see a lot of pressure towards that as Western total fertility rate continues to decrease and larger population groups (Millennials) age with fewer or no children to help out.
Even a shift towards non-relatives households wouldn't be the end of society, it would just be change (and require some zoning/code changes).
> Also nothing signals undateable more than "I l[i]ve with my parents".
This is cultural though. In the US that certainly seems very true. In other places (such as where I'm from), living at home with parents until marriage is the normal default.
Cultural...and economic. I guess in places where there are arranged marriages, or living together is shunned upon, this is true. However as far as I can tell generation z is complaining about the economic situation that disables them from moving out. So it's definitely not cultural there.
Manhattan is one of the most expensive places in the world. I would guess most ppl are not really aspiring for that. I would guess that the problem for a lot of people is to continue being able to live in their medium sized city where they have all their friends, family and life.
Around here in the North East of UK you can easily buy a house for around £100k. It won't be amazing or anything, but with banks offering 5% deposit mortgages pretty much anyone can save up for it and get on the property ladder. Of course the situation down south is completely different and the closer you get to London the more impossible it gets to ever buy your house.
For comparison that’s about 5 times minimum wage at 35 hours a week. You’d struggle to get a mortgage on your own without a £20k deposit but as a couple certainly no problem, and many entry jobs in supermarkets etc pay more than minimum wage.
You can buy flats in beautiful, historic city centre in Bytom, Poland for $500 per square meter. There are even well-paying coding jobs in the area (within 30 minutes by car or public transport).
> Could you point me to these plenty cheap areas? I work remotely and may consider moving there.
They are all over. Head over to zillow/redfin (or the corresponding real estate site for your region) to see them. They won't be in the hip city center everyone wants, but choices are plentiful if one is willing to sacrifice a few wishlist items.
"Cheap" is of course relative the the region/country so actual numbers will vary. I'm in California so I can give a California-centric answer.
Browsing zillow I see over 30 condo (and a few house) units for less than 200K in the Sacramento areas (not exactly the boonies, it's the state capital).
In the Fresno area I see around 60 units (many houses) under 200K. Some friends moved to Fresno and they have a very nice place, for pennies on the dollar compared to San Francisco.
For those who don't want a big city, head north of Sacramento towards Oregon and tons of choices to work remote and buy a place cheap.
Mind you, I set the search limit to <200K, but that's extremely cheap by California standards. Even 25 years ago 200K was a cheap house in California. If you increase the search criteria to a more reasonable 300-400K there are way more choices and areas.
Plenty of cheap areas, in many countries. Just have to give up things like jobs and services(both public and private). But they do exist. And aren't desirable for exactly those reasons.
In Sweden if you move from Stockholm to Eskilstuna (1h30m drive away) you can find a 5 room 100 sqm apartment in the dead center of the town for the price of a 2 room 45-50 sqm apartment in any of the immediate suburbs of Stockholm.
Or, to put it simply, move out of the big city, and the prices drop by a factor of two or more.
That's true in Germany as well, but to get cheap property, you have to go very far from the city, and Germany not being that huge, you'll be close to the next metro area by then.
Like, sure, a 120sqm house might be 400k in Hamburg and only 230k 60 minutes out to the north west (both needing an additional 25-50% of price in renovation costs), but the average net income is 30k/year and you're expected to have at least 20% in cash.
You can get very cheap houses in Saxony or Mecklenburg-Vorpommern, but there will be little to no infrastructure (like, the next gynaecologist might be a 60 minute car trip away), your neighbors will be down on their luck, unemployed and voting far right, and you'll essentially need to rebuild the house - and you'll need to do much of it yourself because the tradesmen work on construction sites in the big cities and rarely take local jobs.
We've been living in Berlin for the last 10 year and the prices are making me consider looking outside the city (no other big cities that near Berlin, so there isn't that challenge you speak of).
My main issue would be being more socially isolated as all of our local friends are in Berlin, kids having to adapt to new school/kindergarten (& find new friends), new work for my wife who doesn't work remote (but can find work relatively easily)...It's not impossible but it really sucks that we'd have to leave the city if we want a slightly bigger home (we've 2 kids who share a room & our apartment is in general feeling a bit small for a family of 4).
Without a large windfall I don't think we'll ever be able to afford buying a 3+ bedroom (4+ rooms as Germans count it) home in Berlin & rent would be high enough that no landlord will want us with our current income.
Yeah, doing it with kids is extra hard. I have friends in Berlin who moved to Prenzlauer Berg in like 2005 and got a great deal. At some point, with kids that apartment just didn't cut it any more, but they can't move too far for the reasons you mention, so they looked long and hard and accepted paying quite a bit more and moving to the other side of the Ring in Pankow. Not as nice, but close enough to keep the kids in the same schools.
I had hoped that remote work would relieve some of that pressure, but maybe it'll take a generation because many couples can't move anywhere because only one of them can work remotely, or because they don't want to uproot their kids. Not to mention that you'll still need a solid internet connection to work remotely, and that's still hit and miss if you go more rural. And if nobody wants to move to Saxony, the empty villages there don't really do anything on the supply side.
I have many friends in Brandenburg (the state, not the city) and internet speeds tend to actually be great out there from what Ive heard (still in the towns/cities not literally in the middle of nowhere, but there are loads of small to mid sized towns). In fact I believe it may be better than in Berlin!
I wonder if it was because it was easier to upgrade/replace the East German infrastructure & as such it's relatively new/good? Sorta like how nice a lot of the highway network in Poland is, because it was mostly only built in the last couple decades.
BTW Pankow is considered a very nice and desirable (and expensive) part of Berlin to raise a family in :)
I guess Pankow is also pretty large. The parts I stayed at had mostly wide streets with lots of traffic, but it includes Prenzlauer Berg and goes all the way to the north, so it'll have plenty of different places. And gentrification likely changes it as well.
You're right about small towns, they're probably a good compromise before looking at villages, but it is a very different life style, so probably not for everyone that currently lives in Berlin or Hamburg by choice. I'm curious how it will develop, and I feel fortunate that my personal preferences align with what's cheaper. I feel for those who desire the hustle and bustle of the inner city.
I like to browse the real estate market just for fun sometimes and actually yes there are cheap areas in every country. Some are cheap due to remoteness, due to inventory or mismanagement/decline. Like in mentioned in another comment, (south) Spain has incredibly cheap properties because there are many available and mortgages are available to even non-residents (not necessarily _in_ cities, but within a 30 min radius from population centers). Generally speaking 15 minutes inland from the sea is cheap everywhere (apart from luxury pockets like Marbella), you can easily buy a nice mediterranean villa for less than 200k. If you want views that's around 250-300k.
More generally, cheap areas often means economic underdevelopment or decline, which leads to social problems and annoying neighbors (on account of drinking, unemployment and other issues). On the plus side, there's less traffic, because people aren't as busy going to places to make and spend money as they are in economically vibrant areas.
It also means that there’s less money available for infrastructure maintenance. While a city is expanding, the majority of the housing is occupied, and the infrastructure to support new housing doesn’t yet require replacement. As a city contracts, there are more unoccupied houses and vacant lots. There’s still the same length of water, sewage, and power lines along the length of a street, but fewer residents to pay for it as it becomes old enough to need repairs/replacement.
That's not really a factor here as most of the housing stock is made up of holiday homes so you only have neighbors for like 2 weeks in a year.
But with remote work many more are making it their homes so it might be a problem in the future.
If you're in the USA, the Rio Grande Valley is pretty cheap. Because it's next to Mexico, there's huge amounts of Latino culture & influence.
If you want to be somewhere that feels on the up & up and has cool stuff, Brownsville has a decent amount of engineers for SpaceX and you can go watch launches from a public beach if you get there early enough.
That you have more shops than one. More restaurants than one. Theaters. Clubs. Sports. Connectivity. Places and activities for kids. Places for hobbies. Concerts. Other various activities and events.
There are significantly more of each in a big citu.
> That you have more shops than one. More restaurants than one. Theaters. Clubs. Sports. Connectivity. Places and activities for kids. Places for hobbies. Concerts. Other various activities and events.
Then open a shop, start a restaurant, start a theatre group, gather some kids for sports, organize some concerts, and become an active member of your community, instead of expecting it to be handed to you on a platter.
Maybe you missed the whole discussion which was stemmed from complaints about big cities and the frustration many people are finding with being able to save any money, purchase or rent a suitable home, live in a safe neighborhood, avoid long commutes, or raise a family.
Life is more than just buying lots of stuff and experiences from other people in big cities. Giving back to your community and allowing them to enjoy your talents should enter the equation too. Don’t always be a taker.
Bigger cities are the same. Politically they are very homogeneous. If you want want you kids to be near variety of perspectives, you should move to a smaller city or near one.
My conclusion comes from statistics and logic. In smaller cities the population is a mix a between daily rural migrants, factory workers and office/service workers. In big cities the population is mostly office/service workers.
>>Maybe I'm just tired of being around people who feel the existence of cities is a personal affront.
It's a bit ironic mentioning that here, because there is a pro urbanization (anti rural, anti suburbs) article on the front page of HN almost every week. And every dominant media in the country promotes the same narrative.
> If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming.
First off, what are they going to do? It’s the same in most big cities(1 million+). Second, those working remotely can always move from Munich to Leipzig (where OP can rent 3bd for the price of his Munich studio). I don’t see society collapse happening. Just need a bit of population redistribution.
A lot of service industry people can't afford a long commute. So even if the property is cheap X hours out, they still can't afford to live there.
And that's how you get what you're seeing in many cities - uninhabited property deserts where the houses/apts are nominally inflating in value, but most people can't afford to live there. And those can afford it don't want to because there's no one around to keep the lights on for them.
Portugal is threatening to repossess empty properties through compulsory purchase. That's drastic and not very popular - especially with property speculators - but govs are going to be faced with a choice between that kind of drastic action and cities which gradually empty of people.
It’s compulsory renting, not selling/purchase. Either way it’s yet another ridiculous move from the left ( in this case ) that doesn’t solve anything and it’s feasible only in the minds who never had a real job outside politics.
> Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses.
The people most vocally opposed to these buildings (which I support) in the United States are liberals/progressives who say those types of living situations are unacceptable, and hold out for the magic beans of large apartments/houses at well-below market prices. Unsurprisingly, this only makes prices go up.
An answer could be land trusts. A land trust that is sufficiently capitalized would be a capital partner to help buyers buy at current market rates. When these new buyers sell, the land trust stipulates the price they can sell at. We have these to a limited extent in New England, and they may exist elsewhere. The problem is, at this point, only a currency producing entity like the Fed would seem to have the wherewithal to capitalize such an endeavor at a scale needed to substantially change things.
You can twist the supply demand imbalance only so much. Go farther than required for longer than required, and some cracks will eventually show up. Like they did for Silicon Valley bank.
So it is hard to say when those cracks appear since the global market is quite a big market and can sustain imbalances for a long time, but then the bigger the bubble the bigger the crash.
Foreigner limits, tax on no. Residents, start of uncontrolled construction - these are only some ways I can think it may break and my ideas are based only on reading the internet, you never know what dynamics come and break the housing. Or they break the world or its money supply.
Not trying to fear monger just saying the dance will end.
I think the difference here is fundamentally there is insufficient supply for the demand of housing globally, or at least US, UK and EU. The previous generation made new builds extremely difficult or impossible in many jurisdictions.
Well, EU isn't just one place. In Poland for instance building is very deregulated with very few cities having any kind of zones - basically if you can buy some land(and land is cheap) then you can build your own house. My own grandma built a house for herself to live in just before the pandemic - 120sqm of space, 2 beds 2 baths, with really large garden and construction+land+permits cost her a total of about $80k USD.
A friend of mine just got married, they bought a piece of land from the local council for about $20k USD and are looking at buying some house plans to start building this year.
From an outside perspective that seems to be a problem in many other countries - either the lack of land to build on(I can believe that in the UK but maybe not so much in US), or insane zoning laws that just straight up prohibit you from building something.
> But there's abandoned medieval villages (no plumbing or electricity so far...) in hilly rural Italy.
there's small towns with fine electricity and plumbing in rural Italy but they are de-populating anyway, cause most people want to live in/nearby cities as that is where money and opportunity generally is.
The same everywhere I think (bar few cases like the Netherlands which are basically a single sprawl).
Hungary just published their most recent census, and all of the country has depopulated in the last ten years except for Budapest.
The big hope is that the trend will reverse with more remote-ization, but it's, well, a hope.
zoning would not matter to my commute length unless I moved every time I changed jobs and had no dogs or human partners. I have made 30 years of compromises because of partners and pets. I've stayed at shitty jobs because good ones were too far away and I could not move.
building near jobs is either building company towns or embedding classism and environmental injustice into property. would you live next door to a small nuke power plant because it was colocated with your office job? how about a refinery? a bsl3 lab? sewer treatment? or would you force those workers to live near their work and put them and all the dirty parts of civilization far away from the upper class clean places?
I live next to a coal power plant. It's a tradeoff between my ability to pay the rent for a single family home with a garden and living close to a large city in Germany that gives our family the chance of job and education variety.
If it was that, then some jurisdictions would be doing much better than others.
Unless the parent generations all decided to make new housing construction hard, all over the world. In which case it seems likely that whatever changes they made were for a good reason, if they could all agree on it.
Eventually death, disease, or divorce will force properties to sell. That will move market values down. Meanwhile, my buddy’s mobile home manufacturer is back to being able to output a home in weeks. Construction has already fallen off a cliff-which makes sense given that’s the easiest to spin up/down of the market.
The RE market is responding to the rates. Though, whether it’ll be enough is beyond my knowledge or possibly anyone else’s.
If not, it’s precisely this sort of situation where change seems impossible that people can find the will to insist upon change.
For renters, I suspect regulation and oversight would go a long way. It’s not going to create a NYC level inefficiency if gobbling up SFHs for rental properties is curtailed. (And I’ve heard of at least one story suggesting AirBnB rentals may be unable to rent at current prices/supply.) Nor would outlawing problematic practices create problems.
In the west, people largely have a say in their governments. People just need to show up to elections and primaries with the demand that government work for them.
When I went to Newark 20 years ago the road I was on looked like an abandoned waste land. Today the area has multi level family houses and looks more like a walkable area. Ascetically it looks much better - if it’s really a better place to live I don’t know. It’s likely it needed massive investor cash to rebuild so I’m honestly not surprised.
I went to college in Newark from 2006-2012. Essentially the beginning to the end of the Booker era. Yeah they make a big stink about the new developments and how Newark was "Revitalizing" itself.
Nonsense: It was a dump when I started and was still a dump when I left. The thing is you don't realize it until you have gone to a place that has not had Newark's issues. Only then do you realize how much further they have to go.
I have been wondering about that. I’m not entirely certain of the effects either. Being held by corporate investors should mean they would be divested in certain circumstances, though.
Residences owned by corporations funnel wealth away from the community into the hands of the corporation. Renters also tend not to establish as deep community roots as there's no investment in the house or the neighborhood and they may move.
While on the surface that isn't "bad", when this happens in lower income neighborhoods it siphons what little wealth that is there away.
Additionally, as there's no investment in the house (call up the landlord and have them fix it up... in a while), it also means that the properties in the area tend to decrease in quality and make the homes that are owned occupied less valuable over time... and the community there less cohesive.
All these things together make it harder for people (frequently minorities) living in those areas to improve their lives and that of their children (can't leave a house you rent to your children or grandchildren to help them get a firmer financial footing as they reach adulthood).
As people die, etc their high paying jobs will be granted to new people. Some of which I suspect are real estate Marxists that will quickly become real estate centrists or conservatives. If you look at the math it sort of looks like this:
There are certain places people want to live and this is mainly a 2D geometry, with certain cases of 3D to a limited extent. 3D will always have detractors since it doesn't fit, it kills light, there aren't services to support the density, etc. There's a never ending conveyor of excuses, some which are actually legit. You aren'r building Manhattan again in the West. So as we grow we are forced to grow outward more than upward, and as anyone who has done a 4th grade pizza problem knows how that goes. Geometry! Applying math skillz to "real life"! Who knew?!
Now secondly, lets look at economic and class structures. We like to say "the middle class is vanishing" and that's partially true. But the implied place all these former middle classes are going, the lower class, isn't quite right. Today, the upper middle class is the largest it has ever been. Around 30% of the population (assume the top 1-2% are the upper class). That's huge and these are the people that can actually afford the "nice places in nice places". They throw a bone to a black person or a teacher every now and then via "equitable affordable housing" - just enough to keep the polls working, but never more.
So what we have here is a lot of people who think because they went to college and have an unimportant role in a middling corporation that they deserve a DREAM HOME in a PREMIUM LOCATION. There ain't that many of those. Especially when you consider that 30% of people are really pretty well off due to income in certain cases and inheritance/genes in others. A good friend of mine makes a shit wage and owns a 2M home because RICH PARENTS bought the house. They're still rich even after that! You just ain't one of them. You need to do it the hard way and earn it, like I did.
There are winners and loser and most people feel like they're a winner, or at least did all the things that winners do. But it's a crowded trade today. Good luck.
In Japan, there are empty houses going cheap as old people die off. In a few decades, possibly there will be some effect as the de-population bomb from lowered birthrates globally begin to affect real estate prices. Let's hope.
1) Very insulated culture with nearly no immigration coupled with low birth rates.
2) They build houses very differently. They aren't generally made to last centuries if taken care of and renovated. The strategy is to build small units cheaply and tare down after 2- years. It's like Ikea for homes.
3) I agree, depopulation is a problem. We really need to incentivize middle and upper middle class people to have large families.
> 3) I agree, depopulation is a problem. We really need to incentivize middle and upper middle class people to have large families.
No, what we need to do is figure out how to run our economies without pyramid-scheme population growth. Human societies have managed to do this sort of thing for centuries, before the industrial revolution, and then the green revolution ballooned our population.
Surely, we can turn some of those productivity gains that technology has given us over the decades to solve the problem of a slightly smaller than-what-we're-used-to wage-worker-to-non-wage-worker ratio.
It's completely possible, but it may require the capital owners to take a haircut.
The first thing we need to do, in my opinion, is tackle inflation by getting government out of the picture. I think inflation is the root cause of a large chunk of what we don't like and complain about with capitalism.
I have yet to get a valid reason as to why inflation is an inherent and necessary property without circular reasoning. The market will always reach some equilibrium, even with a fixed money supply.
External incentives to have larger families don't work.
Hungary tried giving approx. 30k EUR (a very large sum, locally) to every family who have 3 kids plus other significant tax incentives like 0% income tax rate for life for mums of 3, and afaik these programmes are still on but looking at birth rates it resulted in a 0.8% blip and is still in a sharp downtrend.
item 3 is solving the wrong problem. people will have babies when they have space and feel like they can give their kids a better future. trying to move people into dense urban living it the opposite of space needed for kids. right now, we cannot give kids a better future in the current billionaire run world.
we need to depopulate the billionaires and with the freed up wealth, fix the environmental problems so we have a chance at a future.
as a rule, billionaires don't create wealth. They play games with power, accumulating wealth locked up in financial engineering systems that produce more wealth by taking money out of the hand of real wealth producers. The people that create wealth are inventors, scientists, engineers and laborers that create, figure out how to make and move the product out the door. capitol is needed to produce goods but is not the only recipient of the results of work.
"Having space and feeling like they can give them a better future" is about 1 thing.
Money
If you eliminated any of income taxes, or a combination of SS + reducing deficit spending (inflation), or the % of income going to heakthcare by eliminating its employee and employee subsidies (Medicares), there would be a populatiom boom.
All you need to do is free people from having to make money, to meet basic needs. And people Will have children again.
Instead, we have a social policy that everyone just needs to work in order to pay for the sins (and pleasure) of their previous generation.
Yes. Those Caribbean cruises , FL homes & racetrack bets, are paid by the empty silence of hospital newborn wards across the country.
> All you need to do is free people from having to make money, to meet basic needs. And people Will have children again.
This meme needs to die. People in poorer countries have more children than people in rich countries. Within countries poorer communities have more children than richer ones. There might be some exceptions but this broadly holds true across the world.
the opportunity cost of a parent in the 3rd world is negligible. income is very low as it is. theres not.much to do to make $$.
therefore, the benefit of parenting is MUCH higher, and the cost of raising a kid itself is low to zero , and in some cases positive (kids work on fielda or take care of siblings, therefore ROI is positive).
contrasts this with USA, where the opportunity cost of a developer to raise a kid is in the 200k level. ok so now what about alternatives for parenting?
well everything is regulated (daycare, schooling , extracurriculars), or hyperinflates (real estate), and every activity carriea an institutionalized bloat of an effective ponzi...to the benefit of the prior generation seniors in every activity.
So now what do you do? If raising kids is negative ROI and doing it yourself has a huge opportunity cost?
Is it a coincidence that wealthy families in wealthy contries like in Singapore, have more kids on average?
I think we need to change the income tax code to massively incentivize people to get married and have kids. I’d support increasing the tax rate pretty massively and then introducing a tax deduction of like $20k per kid.
For instance a couple with 3 kids and a home would have around $70k-$100k in deductions (60k kids, 10k-40k in state/local taxes etc). If they had an income of $120k it would be adjusted to like $30k and they’d pay essentially no taxes.
It’s a deduction and not a credit specifically so people that the state isn’t incentivizing clients of the state to have kids.
Hungary tried exactly that (basically 55-60k EUR/USD free to each couple that said they want 3 kids plus 0% income tax for life for mums) but it didn't work. It was a 0.8% blip but that's it.
Maybe it would be different in the US because in europe healthcare and education is already "free".
Since you believe that human reproduction is a de-facto property of the state, simply calculate how many women should have babies, for optimal society, and force them to?
No need to muck around with some tax incentives. Redistribute the true source "commodity".
As a bonus, if you're high up enough, you might even get to choose who mates with whom.
There might be a pretty huge gap between incentivizing responsible people to create families and own property (these are very good things for a country and society) and forcing women to reproduce and with whomever the government assigns to them.
What I mean by that is using a deduction, not a credit. You aren’t paying people to have kids but rather incentivizing people that are financially independent by lowering their current tax burden while they have kids <18. Their surplus of kids will more than make up the tax revenue down the road.
For poor people you continue to focus on helping with basics (food and shelter), family planning measures, and up-skilling towards becoming independent. Since a deduction probably isn’t helpful in these cases, a tax credit would continue to exist.
It's not implausible that changes in technology and life/work habits will ultimately make currently highly-attractive areas less so. And once population starts to fall in combination with minimal wage growth it's hard to see what would sustain current high prices.
Ultimately it seems the primary driver behind property prices is the willingness of buyers to take on debt and for banks to issue it. If house prices did start to plateau/drop off over a sustained period with no obvious indicators of future growth then that willingness (particularly on behalf of banks) may well drop off pretty quickly too.
Why would it collapse?
Nobody is able to afford to buy/live in your property anymore.
If you don‘t find buyers/renters how will you manage to pay off your investment credit you took out at 95%credit rate while only covering contract signing fees at ~1% interest with 10year stable interest.
Once interest is adjusted after 10years to 4-5% you (property owner that can’t find any high paying renters) are fucked
In the USA your interest rate is fixed for the term of the mortgage. There are exceptions but they are comparably extremely rare.
I think you have a good point though regarding places that reset interest every n-years. People will struggle to make payments. It will be interesting to see what happens in places like Canada. I’m guessing millions more people on the governments teet. I assume the current admin wound love that.
I don’t know about your country. But in mine prices of property has not followed population growth, increased income or really anything that would make this growth sustainable. It has been a product of central banks setting way too low interest rates (and to a part lacking regulations).
Interest rates don’t really matter as much as you might think. Yes as rates go down the price a house sells for goes up. But the monthly payment stats the same as that’s how people buy houses. They figure out what they can spend easy month in principal, interest, and taxes and then shop and bid in the places they want to live, which almost always aligns with how much they can spend.
Rising interest rates are good for cash buyers and banks.
Are actually rising rates good for banks? Didn't SVB fail due to rising rates? And the other banks might also have issues. They got deposits. They lend out money, but they locked the loans to certain rate. Now the depositors can get better offers from elsewhere, but they can't always renegotiate the old rates. Thus they end up with possibly losing the deposits.
> Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.
Well, the economic landscape can change drastically. Compared to other assets real estate has quite some costs. With all the environmental regulations, for example, the EU is planning, real estate might be much less lucrative. For individual landlords, it might be even impossible as they don’t have any money for investment.
I’m not dismissing your point. Just adding some balance.
> everyone is milking the 90s-20s real estate bubble
Look at the market statistics. It's not a bubble at all. Demand is legitimately very high and supply is very low (just look at the very low vacancy statistics).
We have banned the construction of most new housing and this is the natural result.
Real estate prices are not being artificially elevated, they are a simple function of supply and demand. Just build more houses and prices will do down, and they'll go down slowly, without collapsing.
The typical model works like this: The suburbs around a city grow, the city runs out of space. This causes land in the suburbs to become expensive, so they subdivide lots and build more houses. The suburbs now become the city.
And people move to the edge of the city and create new suburbs, and the city grows.
Of course if you read the propaganda suburbs are evil, but in the real world, they are simply a place where the city will eventually grow to.
Maybe that's the problem? People are actually buying in to the propaganda and not building suburbs, and this breaks the entire model?
No, the problem is that suburbs are the only thing we build anymore. Fresno has doubled it’s population since 1940 while 10x increasing it’s land usage.
Blame instagram and US television programmes for that. Even in Europe now everyone wants a house with a lawn, which is unfeasible and leads to a lot of frustration. Even if you're stuck in an apartment, it has to be "instagrammable", 10 year old kitchens are unacceptable. Oh and you just _got_ to have iPhones, otherwise you're an undateable nobody.
> Real estate prices are not being artificially elevated
Alas, they are. Supply and demand for housing is measured in units of currency, not people. Ask yourself, how many multiples of income can you borrow, with what kind of deposit? The ratio has shrunk over time, allowing roughly the same people to borrow steadily increasing amounts of money.
What's worse is that (in some countries at least) common measures of inflation don't measure house prices. The UK is an example of this. I'm unqualified to tell for sure, but I suspect some central banks have seen house prices as a way of keeping down measured inflation.
The solution (IMO) is a policy of relative decline - look to make house prices rise more slowly than wages for a generation.
The US does not include house purchase prices (the one-time capital cost), but does include actual rent or owner equivalent-rent (the ongoing/operating cost) in its measures of inflation.
This is entirely sensible consistent treatment, but often inadvertently or intentionally misunderstood.
Not everywhere has the space the the US has. Many places in Europe, especially Germany, the UK and the low countries simply have no space to grow into, the urban areas are basically touching as is.
It is politically unfeasible to turn swathes of these countries into an endless urban/suburban sprawl. Many have a strong agricultural lobby (The Netherlands in particular) and/or have an eye on food security.
Housing prices are mostly a function of supply and demand, but heavily influenced by demand from investors, and the limitation that not all supply is created equal: it’s all about location, location and location.
> It seems like it's the same story everywhere I look. Housing is the main driver of inequality and there is little change happening.
It's a way of transferring money from younger adults to older adults, and older adults vote.
It's basically an intergenerational pyramid scheme where each generation pays to the previous one, and each time they pay more. Of course, like any pyramid scheme, you can only keep it up so long.
> It's a way of transferring money from younger adults to older adults, and older adults vote.
Always makes me wonder where these younger adults come from? Don't they have parents who invested their saving in a few apartments for rent? Can't they get some financial help from their parents?
This is how a lot of the younger adults are keeping their head above water. Not everyone has this luxury though, it's not like everyone's parents made bank
It's definitely not every city in Germany that has this problem.
You're trying to live in one of the objectively best parts of Germany by a lot of stats and thus you're competing with a lot of folks.
I'm honestly sick of this whining about rent in top-tier areas.
Living there is a luxury, given the major move to cities and scarcity, driven by insane regulations and basic logic.
There are plenty of cities in Germany with very cheap rent, where apartment buildings get torn down because they're vacant.
But of course the entitlement seems stronger than the willingness to compromise.
> I'm honestly sick of this whining about rent in top-tier areas.
I don't know if this applies to GP, but we certainly get this in Zurich, Switzerland. We have a fantastic public transport system, and you can get fairly affordable apartments that are <30mins away from the city center of Zurich by train. But people somehow feel they have a right to live dead center in one of the most expensive cities in the world right after graduation.
If you look at Zürich, one thing that stands out is that everything related to school and daycare / day school works a LOT better in Zürich than in surrounding nearby cities and villages, which is probably a boon of having a socialist city government. So for parents it IS attractive to stay in Zürich instead of moving 30 train minutes outside.
Of course not everything is greener in Zürich, but if you need some public services like well organized schools or services for the elderly, Zürich city is really a bit nicer.
Are the opportunities in those other cities comparable? I don't know Germany, but usually when I see people saying this about places I do know the answer is a resounding 'no'. So it would seem to be a little more complicated than entitled kids these days who simply will not compromise.
somewhat. You still have Hamburg, Frankfurt, Berlin etc.
Maybe Munich has slightly better opportunities, really depends on you specific niche, but then probably Zurich has even better opportunities but is even costlier. Or Copenhagen.
I really somewhat agree. You really have to see that living in munich is a luxury that a lot of people can not enjoy because it's too expensive. Since you major in CS your social bubble is very well of (75k salary for the first job?) so you see it as somewhat given that you also belong there. And at the TUM they constantly tell you how much of an elite you are. It's a bit entitled I would say. Many Germans can't really live in munich and therefore have access to the opportunities there, it's just the most expensive place in germany you can rent in.
You can always try to find a flat to share with roommates, this is still possible in munich.
> There are plenty of cities in Germany with very cheap rent, where apartment buildings get torn down because they're vacant.
There are plenty of cities in Finland like this too.
But the problem is that the jobs aren't there. I could buy a huge house with a big yard from one of those cities, but then my commute would be over 300km every day. Not really worth it.
Or I would have to quit my job and start working in the local paper factory or sawmill.
Germany is not that centralized, you have way more options than just Munich if you’re willing to move, unless you’re specifically looking to work for Google. Köln, Düsseldorf, Berlin, Frankfurt, Hamburg, and more all have dynamic job markets if you’re into software. Even for English speakers.
I'm not attacking your experience, but in 2023, with the explosion of remote jobs in software and generally post-covid, this sort of argument looks a bit weak on HN.
"I'm honestly sick of this whining about rent in top-tier areas. Living there is a luxury"
Hm, I am quite sure, that even luxury areas need garbage people. If the top income people are having problems living there, how is that socially sustainable at all?
Or is the solution, that the peasants all have to commute 2h plus every day?
Because of demand and supply. But there are many more "shitty" sectors, that are absolutely vital and underpaid. That showed quite nice at the pandemic, where vital workers got excemptions from the lockdown. Those vital workers were mostly all the low paying jobs. I think that got some people thinking, at least for some minutes about the absurdity of the status quo.
So I am all for paying them all more and for example the executive of the german train (who had his company have a shitty year in the reds, but still effectivly doubling his salary) less.
Suggestions on how to actually change it?
Most approaches I know where people go to the top to change things kind of fail, - once they are at the top, they rather enjoy the benefits there. Whether they are socialists or free market radicals.
In US cities with highest costs of living, the laws of supply and demand are already fixing the issue. The lowest paid professions in there pay $20 per hour or more, so basically twice than in areas with low CoL.
You should pay enough to live in the area you work in. If that means that the jobs pay more than someone that needs the degree to work in their field, the person with the degree is being underpaid as well.
FWIW: Some of the garbage men, janitors, retail employees, and others working in "unskilled" jobs likely have degrees too. This is even more likely if they are immigrants.
You are sick of people wanting to live in good places? Are you really sure "dem poors should just stay in crappy places" is the point you wanted to make?
> still gets rejected either for her financial situation or because the rental contract is already set to increase 8% each year - which we simply cannot afford. And it's not just Munich. Every city in Germany has this problem.
The logical step, when individuals cannot afford their own rent, companies that need workers will be providing housing to their workers. And they will be able to evict them whenever they feel like it.
Then we will finally return to feudalism in all but name- you will have a lord, live on his land , and he will be able to control your life far beyond what a job normally does.
This case is different though, 75k is a very, very good salary in Germany so if they can't find rent with that then they are looking at the wrong properties. 75k is great but it won't buy luxury penthouses (same as everywhere else in the world.) If OP is telling me they can't find a normal 2 bed apartment in Munich on a 100k (assuming) income something is wrong in their search or their expectations.
Most likely pre tax. In software development range will be probably 70-95k euro, for mid to senior dev in a big city. After all taxes, contributions you are getting around 60% of this.
So mentioned 75k, will be 40k net.
I live right outside a big city. Here 50 sqm in quite a new building costs 1200 monthly.
Corporate feudalism was a big theme in cyberpunk literature, and lo...
If you consider that renting is basically "housing as a service", though, you can see where we're all subscribing to it (eh) a little bit more every day.
I would be curious to see what kind of studies in Svalbard have been done on this. Virtually all workers are in company housing. Has it devolved into feudalism in all but name?
If you are able to work remotely, Spain is fantastic at the moment. Relatively low real estate rent/purchase prices. You can still get a nice 3 bedroom house with a pool under 200k by the Mediterranean sea (of course well, not in Marbella). There are some surprisingly high-tech jobs locally as well, the space industry is booming right now. Lots of programming jobs in Madrid, Barcelona and Valencia even if you don't speak Spanish. Just had two acquaintances move over and they both found tech jobs within a month (in English). There is startup culture and events as well. Surprisingly, Spanish companies are really hiring at the moment unlike most of Europe. It's not been hit as hard with inflation either.
Plus, government and population are for the most part pretty grown-up and progressive. Universal base income, focus on equality etc...
Anecdata, but the vast majority of European new hires I'm seeing in my team are from Spain (though they are Spanish) and work remotely from mid-sized cities or islands (like Mallorca). It feels like Central Europe is slowly losing steam while Spain is, unexpectedly, gaining some steam.
Central European salaries are getting high enough to not make remote work for abroad companies as atractive. $80k+ per year is becoming more and more common for Seniors in Poland.
Because his rule and values look more similar (at least from what I can see from outside the country) to the ones in Nazi/Fascist regimes than in Soviet ones. Stalin wasn't Russian, his rhetoric was about transnational collectivism; whereas Putin is firmly in the traditional nationalistic mould, "my nation first".
Also, Stalin organized his underlings and allies in a monolithic fashion, inside the party; punishments were mostly distributed with demotions or convictions, as internal to the system. Putin keeps his oligarchs at arm's length, in charge of companies and institutions that are nominally independent, occasionally even abroad; punishments are inflicted by "fall from balcony" and indirect ostracism, again closer to the Nazi model than the Soviet one.
I know this is not what you meant, but it's a really sad answer.
Not because of Spain, which is a great place where I hope to live again one day, but because the answer to a question "how can I live a comfortable life and save money" is "move 1000km away from your family to a place where you don't know anyone, and don't even speak the language".
It shows that something's really, really wrong with the system if people making significantly above average salary struggle to have a sustainable (in financial sense) and comfortable life in their own country.
The flip-side of this is that all the "expats" (not immigrants :)) and "digital nomads" are outbidding the locals and pushing up prices for them.
If you think it's bad renting a house in Munich on a German salary, imagine renting a house in Lisbon (similar or higher prices) on a Portuguese salary.
The solution to this is of course land value tax, distributed to citizens in a dividend. The gains from the land value go to the citizens of the country, not the private speculators who add nothing.
I'd argue Spain doesn't have a property crisis exactly because speculators and developers. There is lots of housing stock available. I don't know any single EU country which has ready to live in apartments listed at 20k EUR.
The problem is everywhere from the US to Europe, is that there is simply not enough housing available. Blaming speculators is blaming a symptom.
> government and population are for the most part pretty grown-up and progressive. Universal base income, focus on equality etc...
This may well have an expiration date on May 28. Voting intention polls currently predict a shift to a right-wing majority (and this has been so for long), and the right in Spain is not moderate as in e.g. Germany. Although Pedro Sánchez has proven to be a tough nut to crack with a tendency to resurrect when everyone thinks him dead, so let's see what happens.
Sorry, I've just noticed that May 28 is the date for the municipal and regional elections. The general election (which is what I was referring to) will be later in the year, no later than December 10.
I’ll put my own add in. Come to Asturias, you got mountain and sea right at your doorstep. Affordable, safe and welcoming. Also very temperate summers.
Difficult to make a direct comparison, but taxes are very similar to Germany, salaries are pretty much the same for white-collar IT work. But IT is not terribly well-paid in Germany to begin with. I've seen people earning 3k per month in a senior IT position for a bank. But the same money goes a lot longer in Spain, especially outside big cities. The sweet spot is to freelance for foreign companies and spend the money in Spain.
What skews the comparison is Spain is surprisingly empty. 70% of the country the same population density as northern Sweden. But a lot of people live in these small remote places where there are basically no permanent jobs apart from odd jobs, fruit picking and working in the post office. Think of a remote US mining town, without the mining :)
> And it's not just Munich. Every city in Germany has this problem.
That's nonsense. Larger Munich is the most expensive place to live in Germany (except for the island of Sylt), and has been for many years, but is still nowhere near London, NYC, or SF. In contrast, you can purchase entire houses in abandoned (but well connected) places in east Germany for as little as 10k EUR.
There were reports last year that per square meter Munich is more expensive for property than London (but less than Paris) https://www.tellerreport.com/business/2022-08-26-real-estate... - that probably covers a range of prices of course, and other costs are lower.
The openly racist, climate change denying, far right Alternative for Deutschland party won almost all districts in the last federal elections. It was the launching pad of the anti- Islam PEGIDA movement, and had the lowest covid vaccination levels and consequently the districts with the highest number of cases.
The economy isn't great either. Geographically it's kind of a dead end, and transport links are fairly poor, so few companies want to locate there.
I bet the other places he looked at was London, Paris, Amsterdam and Copenhagen. Of course in a cool part of the city. The reality is just that many would like to live in munich but it's just very expensive because of this. Many can't pay this. His girlfriend makes a lot with 75k, so they should be able to find something but you have to be realistic in this city but you have to adjust your expectations.
American here, in silicon valley. I'm actually a bay area native, and the only reason I'm able to stay close to my parents is that I make a "tech salary". I bought a moderately sized condo, and it was a huge stretch at the time when I bought it - now that I've advanced my career, it's not such a huge load.
But, the fact that, at $110k a year, a two bedroom (yet small) place was a huge stress. And that was not even in not one of top 3 most expensive cities in the bay area, which should say something.
I'm extremely grateful that I can live close to my parents, and will be able to help take care of them as they age.
Something is broken when it's a financial pressure for someone in the top 10% of income to live within an hour drive of where they want to be. And, that's kind of a luxury, tbh. I have extreme sympathy for the working class. There's something fundamentally broken with our housing policy.
Sure, but there's so much open, empty, and underutilized space. With some more aggressive building and well implemented transit policy, we could really fit a lot more people into the area without creating a decrease in quality of life. Not even like a huge amount of people, like 10% more.
> We are already looking to move to other places and created a university-wide google sheet where we compare different countries and cities around the world for those kinds of categories.
Could you share a few places at the top of your list? As you yourself pointed out, it looks like the same story is playing out everywhere one looks, especially in the West.
Given the current situation, the more I think about it, the more I conclude that going fully remote from a low-COL location may be the better answer. Unfortunately I think this complicates things for founders to raise.
Also, this makes me think how utterly unprepared Germany is to receive all those immigrants needed to keep the economy working.
As a newcomer you can't live (properly) in a top tier city in any major Western country that I can think of unless you manage to accumulate significant wealth.
I doubt that "every" city in Germany has this problem, but I believe you that all of the ones that I could name as a non-German do.
The 50th percentile Brit can't afford to live in London. Nottingham, well that's easy.
In the US it's still possible to work as a Software Engineer in major cities and buy property. Great Atlanta/Houston aren't exactly dirt cheap, but you can buy a decent house by paying less 2500/month mortgage (not hard on a Software Engineer salary). In the Midwest there are even more affordable cities.
Your GF gets rejected on a financial basis while making 75k euros? How expensive are the places she's trying to rent?
> We are already looking to move to other places and created a university-wide google sheet where we compare different countries and cities around the world for those kinds of categories
It seems like if you want to live anywhere that's desirable you have to pay an arm and a leg for rent, no matter what country you're in.
Same thing in Spain, compounded by the fact that not only the generation of people over 60 own the housing and receive the rents, but they actually make more from pensions than new workers make as a salary (the latter is, I think, not true in Germany).
This is a really toxic situation because it seems that for many young people, objectively speaking, career matters quite little. You can be unambitious, get a mediocre job, need your parents' help to survive and expect most of your wealth to eventually come from inheritance... or you can be ambitious and hard-working, get a better job, but still need your parents' help to survive (only somewhat less) and still expect most of your wealth to eventually come from inheritance.
It's a sad situation, and I say this as someone who is not that young anymore and owns an apartment, so it's not personal whining but genuine worry about where society is heading.
> And it's not just Munich. Every city in Germany has this problem.
No, Munich is an outlier. You generally can find apartments under 10€/m² without too much trouble, at least in mid-sized cities. However, it’s true that rents have been rising significantly over the past decade or so.
Capital accumulation and the tendency of the rate of profit to fall are the objective fundamental causes of inequality in every capitalist society, which is why every capitalist society depends on a plethora of ostensible efforts to counter these fundamental characteristics of capitalism.
If the tendency of the rate of profit to fall was the underlying problem, basic needs and housing would be dirt cheap. That's not a problem - it's a good thing for consumers (and therefore the lower classes). It's the plethora of efforts to counter this which capitalists employ (mainly monopolization) to inflate prices anyway despite underlying increased efficiency (and less labor) that's the problem. The main problem though is that labor is perpetually kept desperate enough to accept bargains which favor investors, and consumers have no other means of gaining capital, even as they get automated out of the job market.
It's a fundamentally unfair system which inevitably maximizes inequality. It's untenable without a government-enforced wealth-redistributing tax to offset that.
Capital accumulation is necessary because of the tendency of the rate of profit to fall. In other words, you can't merely "create value" as a capitalist. Capitalists must accumulate capital merely to avoid losing everything. Capital accumulation is protected because capitalists literally created a government for that express purpose.
> It's untenable without a government-enforced wealth-redistributing tax to offset that.
I find it interesting that you point the problem (this is not capitalism but rather the lack of it) and then suggest that the government (which made this whole system possible) somehow fixes this. The government is the problem and a top down approach doesn't work (it didn't work for the soviets and it's not going to work now).
The solution is capitalism, and liberalization of the markets. In other words, letting people and capital build houses and live in them.
You post is not coherent with the one you are replying to. Without government setting the rules, capitalism leads to monopolies, like it did with standard oil.
The bigger company can kill all competition despite having inferior product with unfair practices such as - Dumping, market manipulation, self-dealing, wash trading, antitrust, insider trading, collusion, cartels, negative externalities, anticompetitive practices, misinformation, corporate espionage, etc.
If you take off the last remaining government safeguards, you will not have more competition. You will have monopolies for good we need to survive.
I (a Czech) moved from highly desirable Prague to Ostrava, a postindustrial city I was born in.
Remote work was a huge boon, because our family income is independent on our location and housing costs in Ostrava are literally half the costs in Prague. We have a nice newly built house not far from public transport (6 tram lines stop on a major intersection in a 15-minute walking distance), with a garden, pretty calm and several minutes of walking from two huge supermarkets that are open till 9 and 10 pm, respectively. Even a small apartment at the outskirts Prague (two rooms) would be about as expensive.
But it came at a cost, yes. The restaurant scene is a shadow of Prague's, and a lot of personal connections had to be weakened, if not severed.
People seem to be forgetting that everything is a tradeoff. If a city like Munich or Prague is highly attractive for students, workers and connosieurs of urban life, there will be a huge demand for housing there, and few regions in the developed world have escaped the enormous NIMBYfication of construction regulations, so the supply will be lacking.
Or you can have a really nice place for living, but not in a major and growing urban area.
What about Dresden or Meissen? Nowhere near as expensive as Munich, but still urban enough to have some doctors and other opportunities.
Yes, you will have a lot more AfD voters around, but everything is a trade-off. Living in a mostly B90/Grüne-voting neighbourhood may be the most costly privilege in entire Germany, and is it really worth the added cost? I surely wouldn't like to be held hostage to my neighbour's political preferences.
Moving doesn’t necessarily help much. That is because usually house prices are directly driven by how much people can loan on a mortgage, which is directly driven by earnings. Cheaper housing often means lower earnings potential. Conversely, saving in a high earning country can mean you have a deposit for a house in a cheaper country.
Edit: Counterintuitively, high interest rates can help middle class people that don’t have homes. House prices drop, so you need less deposit. And usually you can work harder for a few years to nail principal (I know people that bought in the 80s - one friend had an interest rate of 28%).
Some remote workers can earn in a wealthy country and live in a cheaper country.
Meanwhile, watch out for the most unaffordable cities: https://www.visualcapitalist.com/least-affordable-cities-to-...https://www.theguardian.com/cities/gallery/2017/jan/23/10-mo... Canada, New Zealand, and Australia have some batshit insane unaffordable real estate (stop whinging about SF - 9th place on Guardian list!). As a New Zealander I would struggle to recommend moving here without already having a nest egg - although if you are willing to move to rural areas you might find something cheap (but usually not find a job too - house prices are driven by median incomes in most places, sometimes driven by investors, wealthy immigration, or movement of people such as retirees) https://www.trademe.co.nz/a/property/residential/sale
Wow… Singapore is not even on the list. As a Kiwi expat I can tell you Singapore is at Hong Kong levels of unaffordableness for non locals. The Singapore government housing scheme skews theses statistics significantly. If you are a local here, great. Everyone else is paying top dollar (2 bedroom condo units renting for 50% of the median household monthly salary)
I live in rural HongKong where rental is reasonable(by hk standards). Cost of living not too high if you ‘live local’ and don’t bleed money on nonsense like vehicle, clubbing, and ego fueled high life. That said my monthly electricity gone from $1700 to $2400 in 3 years in same place running only one aircon and one dehumidifier to dry washing for family. It’s easy to see the inflation fueled price gouging by business is a global problem. Driving people to choose what and when to eat - sad state of affairs.
The solution is obvious. Just look at Vienna, not far away from Munich. A lot of flats belong directly to the city of Vienna and a lot of subsidized and owner restricted flats exist. The prices on the free market were also rising the last years but much lower than in other cities. Red Vienna got it right.
https://en.wikipedia.org/wiki/Red_Viennahttps://en.wikipedia.org/wiki/Gemeindebau
By "driving", you mean "helps create inequality", right? But inequality is already there. Someone now pays that high rent already; otherwise, landlords would lower prices to avoid empty units.
You are competing with many people from all parts of the EU and, to an extent, the world for the same limited resource. Someone who built their startup and banked on it already came to Germany to work and live there because it is a very comfortable place to live. Refugees without any money at all are willing to go to Germany instead of Greece or Italy, not to mention Bulgaria or Hungary.
I am trying to be a devil's advocate now, but landlords are interested in getting paid as much as possible; it is Economy 101, rational agent behavior. Otherwise, it would be a charity, not a business.
I think moving away, or at least moving your business away, is rational behavior on your side. Take a look at said Bulgaria: Sofia is a dull place compared even to smaller German cities. Still, they have 10% flat taxes for companies and individuals, and for 1000 EUR, you will have a 150 sq.m. two-level apart in the historical city center with 3 bedrooms, a separate dining room, and a large study with a real fireplace. They have a subway to the airport and several budget airlines flying from there to any part of the EU. Source: several people from the company I work for are living there.
Sofia is a dirty, badly maintained city. Quality of life is low, air is horrible and there's dirt/mud almost everywhere. It's pretty bad overall. But it's not dull, at all. Not bad for young folks because almost nobody cares about the things in their 20s.
Plovdiv is 1000x better than Sofia in any conceivable way. Older, cleaner, cultured. Built on top of an ancient Roman city. It's by far the best big place in Bulgaria
This is mostly the question of tastes. I lived in Sofia for two months, mostly in the city center. For me an international mobility is important and I don't drive, so the well connected airport and good means of transportation towards it were paramount. Thus Plovdiv and also Varna and Burgas are not an option for me. But from the business perspective it is a real tax haven. Also, there is an IT community there, and offices of large companies including Microsoft and Uber.
"How the hell are we ever supposed to build up some savings, settle down and have a comfortable life?"
The idea is, you pay so much rent, you never will have enough money to buy something. So you have to spend all your money the whole life just for rent and still own enything when you are old.
> Housing is the main driver of inequality and there is little change happening.
Have hope. Things are changing as I see it.
Fundamentally, I believe that we have seen a multi-decade boom because property prices are closely linked with interest rates. People borrow according to their capacity to service the loan. For most home buyers affordability is measured by monthly repayments, not the ticket price.
As prices rose, capital gains became a more significant consideration. This meant that some people who would not have purchased investment properties did so. They would not have done this if they were only looking at the income earning potential of the asset. Rental yields have been getting much worse over time. People stopped investing for yield and started to speculate - doing well with favourable tax regulations and the leverage opportunities that mortgages provide.
In the past, if you owned a second home (holiday home, convenient apartment in the city, etc) it would cost you money if its value didn't appreciate at a quick enough rate. For decades now that hasn't been the case - property prices have been appreciating so quickly that owning a property has been a good financial bet even if it hasn't been earning any income. It was no longer the preserve of those wealthy enough to maintain more than one property just for the lifestyle it allows. Naturally this means that the number of people that have been doing this has increased considerably.
There is no doubt in my mind that the proportion of underutilised properties has increased in correlation with the rise in property values and the steady decline in interest rates. For many, this is hard to accept as it doesn't fit with the naive assumption that prices have been rising because there is somehow more demand for homes. What they forget to factor in is that there is a difference between demand for homes and demand for investment opportunities. To put it another way, a speculative boom creates artificial demand.
A few points to back this up:
- In the UK, the proportion of underutilised properties is highest in areas with a higher average property value.
- In Melbourne, Australia, it has been shown (through examining water usage) that the proportion of empty properties is highest in areas that have experienced the highest capital gains.
- In NZ, the ratio of households to dwellings has decreased since the mid-90s (the start of NZ's boom).
All of this suggests that the rise in prices is not due to a shortage of dwellings for people to live in. It is a shortage of available dwellings.
The wheels came flying off NZ's property market at the start of 2022. This was caused by rising interest rates. Where I live, this resulted in a flood of properties getting listed for sale and an increase in available rentals at lower rents. Where did those extra rentals come from?
Another factor in all of this is the rise in short term rentals (AirBnB, etc). AirBnB effectively allows property investors to take properties out of the housing stock and still collect rent. Many cities around the world (especially major European tourist destinations) suffer from this. Ideally it would be regulated much more tightly in future, but I think there is a small chance that that may not be necessary. Prices are now so high in many places, and servicing loans so costly, that even the higher rents that can be achieved in this market may not be enough to make yields worthwhile. A lot of these properties may make their way back to the regular housing stock as investors are forced to sell up.
So, the big question in all of this is, we know what happens when interest rates drop and property prices appreciate - what happens when interest rates rise and capital gains are off the table (or negative gains become the norm)?
Question must be - in a country where population doesn't grow at all and haven't been for a generation+, and housing is not being torn down on a massive scale so supply of it probably still increases a bit, why is there a need for any new housing at all? Basically, why can't people on average just live in their grandparents' apartments once they die? Housing construction standards have been decent for at least 60 years so these apartments are good and are probably better located than their parents' just because of city growth since.
This is all about regulation, although each layer of regulation tends to be popular.
Many things typically seen as good add to the cost of housing.
Building is difficult because of zoning restrictions.
Building is expensive because of labor and zoning and construction and accessibility and many other regulations.
Renting also is risky for a landlord because of eviction protection laws.
And so forth. Housing doesn’t need to be so expensive and scarce. We made it so. We have far better technology than in the past, we can build better, safer, faster, cheaper. Except we can’t.
You have to carefully analyze if you absolutely need to live in Munich - the most expensive city in Germany - in order to run and build your startup once you graduate. Is the extra cost and low quality of life worth it over the long term? There are dozens of smaller cities in Northern or Eastern Germany which offer very affordable living and office space while still being very attractive to young families.
this is crazy. in 2015 i paid 480 eur in berlin for a 20qm room, then 1050 for 101 qm (on 48k eur in a 3 person WG) and then 1355 for 50 qm in hamburg (neubau).
never had an 8% increase tho, that’s rough. it was a different world in 2005 for sure
IMHO Germany is killing its social stability and its future by having this situation right now. And I‘m afraid this will bring more votes to AFD and similar rightwing parties. Kinda similar to a century ago.
The overall population of Germany is not declining yet, in fact last year the German population has never been as high. In general, if Germany wants to keep its economy the population has to continue increasing until the boomers are dead. So yes, counter intuitively, for now there is going to be a major pressure on the housing market at least until the peak. Germany is a major immigration target inside the EU so it's not met with the same fate as poorer european economies like Russia, Ukraine, or Italy.
The high rents in places like Munich are due to the urban areas seeing a major boom: that's where the jobs are, that's where the immigrants are going, that's where the young people from the countryside are going.
> And it's not just Munich. Every city in Germany has this problem.
Well, rising cost of living is a reality everywhere (it’s called inflation). But Munich is really extreme. You might want to consider moving to Eastern Germany. If you pursue an academic career, you might want to watch for positions in Magdeburg, Greifswald or Leipzig.
> How the hell are we ever supposed to build up some savings
ETFs (exchange traded funds i.e. index funds) give you better yield than just paying into a savings account. You also might want to invest some percent in more risky positions like BTC and ETH (10%) bc now is a good time to do that.
Also give it a couple of more months. Housing price increases are already decelerating and start to decline in some areas. The last 10 years were exceptional in low interest rates and money printing in the EUR zone.
If you can avoid it, don’t own a car — it’s always a money drain. :)
>If eastern Germany is still affordable like that then it might be for a reason.
I'm not German, but you can't complain there's no affordable housing when there actually is, but you just don't want it. Just because you only want to move only to a specific city you like, that has the "right vibe", where others also want to live, it's not society's fault you're too picky and you think you're too good for other more affordable cities. Beggars can't be choosers. That's like complaining about starving with a plate of Big Macs next to you because it's not what you like to eat.
>Don't move there unless you pass as a German and speak the language.
That's total nonsense. Plenty of foreigners who don't "pass as German" live in East German cities just fine. And why is it so bad that you have to learn the local language when you move somewhere? Do you not need to speak English when you move to the UK/US? The official language in Germany is German, not English. Best learn it if you move there out of respect for the host country and to integrate and become part of society.
If you're lazy about integration and learning German, and only want to move somewhere just to make money and party in expat bubbles secluded from the German society, in cities where English is the majority spoken language, then you can't complain they're unaffordable when everyone other white collar yippie expat wants to do the same. Again, beggars can't be choosers. That's like complaining there's rush hour traffic jams, when you're part of the traffic jam.
And I got news for you (not you specifically, but others who have this mentality): whenever you move to a new country as a foreigner, you'll always be at a disadvantage for housing, especially if you don't speak the language, and just because you got a visa for a white collar job at some startup making the fifth best food delivery app, doesn't make you a special snowflake worthy of the German society to turn itself upside down for you and roll the red carpet and make life super easy for you. It's still your job to integrate in the country you choose to move including dealing with the unpleasant things.
You(We)'re not special. 99% chance you were given a visa and got hired there not because you've got some super rare skills nobody there had, but because of wage dumping. You moving there puts downward pressure on wages and upward pressure on rents, meaning the government, landlords, and business owners can profit from your presence there. We're basically cattle in the economic machine. You should be aware of these facts and factor them into your decision when it comes to immigrating somewhere, as it's never a free ticket to El Dorado as many delusional white collar expats (tech workers especially) think.
"Plenty of foreigners who don't "pass as German" live in East German cities just fine. "
Are you one among those non germans living in a eastern german city, or know some of them personally?
If no, how can you judge then?
I am german and I happen to live in eastern germany and I can attest there is a very high level of anti immigration sentiment and action.
There are some bubbles in the bigger cites, where you can get by without much trouble while only speaking english, but move out of that bubble and you actually have to fear for your live in some areas as a non white person. Ask my girlfried who is not really of color, but the little color her skin has because of latin american roots, is enough for hatred and threats towards her. Even in "hip" places like Dresden.
I'm definitely not white "BIO-Deutsch" looking if that's what you're asking.
But you still haven't told me exactly how the hate has manifested towards your half latino girlfriend in East Germany.
From my findings I find a lot of people are just snowflakes that exagerate the perceived hate towards them, for example if the waiter, service worker, bus driver, etc. was rude or mean to them, they immediately assume people are being racist and are hate targeting them for their race/skin color. No, bro, that's just the traditional East German "friendliness" or they're just dicks to everyone, nothing to do with hate or racism.
Or in another instance blocking it, from going out: "You cannot go out here"
Children in rural village: "you don't belong here"
And then we have spitting. Bad looks. Cashiers being friendly to me, but very unfriendly to her (when they don't notice we are connected, but she speaks a very good german). Etc.
That is just racism and not "east german friendliness"
East german friendliness would be the sentence on a shirt I saw in Görlitz (very eastern city):
"I don't have prejudice, I hate everyone"
That's the "normal" friendliness in some areas, but in most areas (especially also Görlitz), they canalize that hate and frustration towards anything different.
So not everything is bad here, otherwise we would not still live here, but we explicitely live in a no nazi village, so kind of in a bubble. But we do regulary think of moving away, so no, in general foreigners do not live here just fine.
And most, especially those with a really dark skin, have it way harder than we. For example we didn't got any death letter yet.
This is just the just world fallacy in a post. If you lived in Germany you would understand that statements like this that you wrote:
> doesn't make you a special snowflake worthy of the German society to turn itself upside down for you and roll the red carpet and make life super easy for you
are utterly, utterly ridiculous. There is absolutely no risk whatsoever of Germany "rolling the red carpet" for immigrants. It's a fairly hostile place to be if you're not German even if you're white. It can also be hostile even if you're German but not white. Among "expat" destinations (so plausible expat destinations, so excluding, e.g. DRC), it regularly tops the rankings as the worst place to live (harder to live in than Japan or China, and no disrespect to those two countries, but they are traditionally considered benchmark definitions of exclusive countries).
> Best learn it if you move there out of respect for the host country and to integrate and become part of society
Let me tell you as someone who lives in Germany right now: the vast majority of 1M Syrian refugees will never, ever, ever integrate into German society. I had no opinion on this before I moved here, now it's obvious. Your idea that integration is purely a one way street is nonsense and only leads to broken societies. Even if you change your name to Winfried and got C2 German, you'll still never be accepted here. Maybe your children will be, but maybe not if they're not white. But the fact is that if countries want immigrants to pay for their boomers' pensions, they need to actually be a generally more welcoming and friendly society. "Fuck you, learn German, and go and live in Chemnitz" don't really pass muster these days. I mean for example this is nonsense:
> make you a special snowflake worthy of the German society to turn itself upside down for you and roll the red carpet
As if Germany is doing everyone a favour by letting people move there. If there was no demographic crisis then immigration would be practically impossible. I am doing Germany a favour by moving here at least as much as they are doing me a favour by letting me.
> there not because you've got some super rare skills nobody there had
I'm an academic in a fairly obscure branch of physics so in this case I can categorically say that I do have those rare skills. Everything you said about the country is wrong. Their advice: "don't move here unless you speak German" is absolutely on point, and what I myself tell people. Living in Germany mostly makes no sense if you're not German or not a refugee.
> the vast majority of 1M Syrian refugees will never, ever, ever integrate into German society. I had no opinion on this before I moved here, now it's obvious.
The parents maybe won’t. But their kids. Watch out in the real world or on TV for the children of Syrian refugees that came here in 2016. In the mean time many of those graduated from German schools now and speak German very well (schools invested quite a bit in making sure of that) and learn a profession or even enroll in a University program.
While Germany is certainly not a classic immigration country like the US is, as a German I really got the impression that we became much more open minded. Personally, at my work place we started out as a prototypical mid-range company financed by Bavarian entrepreneurs and were pretty much speaking German only. Nowadays (10 years later) we‘ve got many Indian, Turkish and Eastern European colleagues and speak almost only English in meetings. Even our CEO is non-German now. I don’t think that would have worked 10 years ago nut younger co-workers nowadays tend to be much more proficient in speaking English.
Of course, living in Munich and Berlin won’t give you quite the same experience like living in Rostock-Lichtenhagen… but parent mentioned she or he plans on founding a start-up. Office space is less expensive in smaller cities like Rostock (or Wismar or you name your favorite less world famous German city), too, and with remote work it is much easier these days to setup an international team in a German company located even in more obscure places. And it gives neighborhoods a chance to develop and rise from their obscurity.
Anybody reading this from the city of Neubrandenburg? ;) (I just learned about its existence a couple of years ago as a German native.)
> It's a fairly hostile place to be if you're not German even if you're white. It can also be hostile even if you're German but not white.
BS. If Germany were that hostile it wouldn't attract the biggest migration waves from non-white African and Middle Eastern countries in all of Europe. And now home to over one million Ukrainians.
>Let me tell you as someone who lives in Germany right now: the vast majority of 1M Syrian refugees will never, ever, ever integrate into German society.
Again, BS. Most Syrians I met spoke much better German than techie expats who were entitled enough to think that learning German is something beneath them, only mandatory for the lower classes of immigrants doing blue collar work, while they should be somehow exempt because they're special snowflakes who push code to git in English at work so the whole society should switch to English for their ~2% demographic of SW devs to accommodate their laziness of not bothering to integrate and learn the local language of their host country they choose to move into.
>Even if you change your name to Winfried and got C2 German, you'll still never be accepted here.
Again, more biased BS. I did my best to learn German and mostly hanged out, dated and socialized in German circles instead of English speaking expat circles so I could integrate better, and was always accepted and never discriminated by the Germans because I was a foreigner. I even became friends with people working at the German Government in Berlin or with kids of upper class Bavarians who owned vacation homes in Sylt or Austria. Of course you will find bigoted racists everywhere, but I found the Germans to be very friendly and inclusive if you show willingness to integrate.
How far do you think you'd go without English fluency as an immigrant in US or UK?
>As if Germany is doing everyone a favour by letting people move there. If there was no demographic crisis then immigration would be practically impossible. I am doing Germany a favour by moving here at least as much as they are doing me a favour by letting me.
Germany is a democratic country responsible to provide to the German citizens with voting rights. It's not a country founded by immigrants, like the US, who focuses on pandering to non-German immigrants. If Germany has decided it wants to commit demographic suicide then so be it, it's well within their rights to do so, what gives us foreigners the right to complain about it when we voluntarily chose to come here? Their country, their rules. No like? Vote with your feet and choose another country. Expats make the mistake of expecting Germany to be like Europe's USA.
Let's be real here, you didn't benevolently move to Germany to save their demographics like some superhero, but you did it because you found a good economic opportunity in doing so for yourself. Germany didn't kidnap you and bring you here against your will to save their economy, you voluntarily decide to come because it benefited you. Then it's our responsibility as guest to integrate in their society, and not vice versa.
Again, how far do you think you'd go without English fluency as an immigrant in US or UK?
>I'm an academic in a fairly obscure branch of physics so in this case I can categorically say that I do have those rare skills. Living in Germany mostly makes no sense if you're not German or not a refugee.
Then why are you staying in a country you feel doesn't like you? If you're such a special immigrant, why aren't you voting with your feet and moving to a country that is more accommodating to your kind?
Question: if you'd leave, would the German GDP or company you work for collapse in your absence? If not, maybe you're not as special as you think and the country is doing fine without you as well.
The problem is your argument boils down to: you are a guest in Germany and you are completely disposable so shut the fuck up or fuck off. It's a take one hears loudest from the AfD and old German Boomers, the same sort shouting at you in the street for some perceived infraction. I found this sort of attitude objectionable and xenophobic when I was living in my home country (the UK, where your argument is again mostly held by old racist boomers or EDF types), and I find it as bad now I myself am an immigrant. If you want to live in a society where immigrants opinions are widely accepted as worthless "because they should just leave", then great, maybe that's why Germany worked out well for you. But I just don't agree with your idea of how a country should integrate and welcome newcomers, because it's bordering on fascist and plainly inhumane. In any case I can speak German, but I don't use my own German proficiency as a tool to beat other immigrants with (as you're doing now, which is quite sad). Just one further comment:
>Again, how far do you think you'd go without English fluency as an immigrant in US or UK?
Which is precisely why I said: don't bother moving to Germany if you don't speak German already or are not a refugee, which cover both your points "why do refugees come here then" and "learn the language", but it seems you cannot read.
I think you're drawing the wrong conclusions from my comment based on your need to vent because you have a chip on your shoulder because you feel like Germany didn't roll the red carped enough for you.
Whether you like it or not it's always the immigrants who should integrate into their new country, not the country to change centuries of culture and identity around for the immigrants. Germany is already welcoming enough to immigrants as it is. The best in EU I'd say, as other countries are much worse.
And each country has their own mentality and national identity developed over centuries, and as flawed as they may be in your viewpoint, these don't change overnight just because you decided to move in and don't like it there.
Blaming my viewpoint and calling it racist, for your personal (maybe flawed) life choices in immigration and your lack of success in integration, won't really help you, because yes, it's just like a relationship. If you don't like it somewhere, then pack up and leave. Simple.
If you want to change things in your favor then get citizenship and vote, or walk somewhere else that fits your personal view. It's not a racist viewpoint, it's just the cold hard truth of how all societies work in real life, and refusing to integrate somewhere is just rude and counter productive to everyone.
Venting on the internet that the country you voluntarily moved to doesn't give you the special treatment you were expecting, is just laughable and pointless.
People keep bashing Germany that it's the worst welcoming for expats, yet they won't stop coming to Germany:)) So because people won't stop coming, anbbecause nobody walks away, Germany will never see the need to change anything. Simple.
I don't regret my choice, I met a nice woman here and I have a good job. But I don't adopt the unambiguous slave mentality that you advocate and I have my eyes more open about the country's problems than you.
>Venting on the internet that the country you voluntarily moved to doesn't give you the special treatment you were expecting, is just laughable and pointless.
Yes, and unrolling the red white and black in defence of the Reich online is also quite laughable, especially as you claim to not even be German. In the end we are both wasting our time, but I'd rather be on the internet trying to seriously discuss something than aping this strange ultranationalist performance piece of yours. Better still would be to not engage at all.
>But I don't adopt the unambiguous slave mentality that you advocate
Sorry, but equating integrating and being assimilated into a developed country to having a "slave mentality" is complete horeshit and makes you look completely out of touch with reality if this is how you see things.
>unrolling the red white and black in defence of the Reich
Where the hell did you come up with this? I never said anything like this. You must be tripping.
So strange to meet a German ultranationalist who claims to not even be German. Truly a unique experience, you may even be the only such person who exists on the planet. Thank you for sharing yourself with us.
The Sweden story sounds so much like the SF story.
Area doesn’t building housing, leading to a massive increase in house prices and a destruction of class mobility as the rich get richer (as their houses get more valuable) and the poor get poorer (as they pay more to rent the same living space).
The growing wealth inequality leads to all sorts of other dysfunction including increased crime, worsening services, etc. as the govt cannot raise enough taxes.
And finally, instead of solving the fundamental expensive housing problem, opportunists will blame the other. More often than not the other are the victims of the problems. Immigrants in Sweden’s case, and since one can’t blame immigrants for obvious reasons in SF, homeless people in SF.
> The Sweden story sounds so much like the SF story.
It sounds like the same story being repeated all over the world. There was someone on comments here on another thread talking about how this is a problem in Ireland now as well. It's not just SF in the US, it's all over the place. A friend recently told me about his search for a place to rent in rural western Washington and they said it was just impossible to find even a one bedroom place under $1800/mo even in this rural area where incomes are much lower than in the urban centers like Seattle and Tacoma.
I don't know about Ireland, but in the US the home ownership rate is higher than it was at any point in the 20th century. So however bad the situation is it doesn't seem to actually prevent people from buying a house.
There are parts of the US where houses are similarly cheap even today, problem is, no one wants to live there. People want to simultaneously live in very popular cities but also not want to pay a high rent. Both can't be true at once.
...Or can it? The solution then is to build more housing; YIMBYism, go to local government meetings and vote for YIMBYist candidates. After all, all of the NIMBY people who bought their house decades ago are there, day after day. There really is no way around this.
Anecdote is always dangerous, but 100% same here; I had housemates in the 1990s and this was entirely normal in the city I was in (DC). Come to think of it the only time before I got married I lived alone was when I rented a friend's basement for a couple of years basically as a favor to him.
So, you're saying that when interest rates first dropped mega-low, people could afford a house?
But... that's what caused the current problem, some say. Rates too low, for a decade, causing a housing bubble. It sounds to me like what you recall, was an aberration.
EDIT: Don't get me wrong. I think the bar to home ownership should be lower. But at the same time, I think it hasn't been low, for 50+ years.
In 1995, the average income in the Netherlands was €33000, and an average house (not any house, anecdotally my parents bought it for less) could be bought for €93750 at an interest rate of 7.71%.
Yeah, late 90s/00s I was an exception that I had my own apartment. All my friends had roommates. A couple really industrious ones bought a house and then had 2-3 roommates so they could afford it.
right but I'm guessing a huge percentage is baby boomers or Gen X'ers who bought a house 10 or more years ago. I'm curious to see a graph of home ownership rate history for people between 25 and 39 years old, I'm guessing it is lower now than 30 years ago.
The only numbers I could find about this disagree with you:
> Just 47.9% of U.S. millennials owned homes in 2020, according to Apartment List analysis of census data. At age 30, millennial home ownership hit 42%, compared with 48% for Gen Xers and 51% for baby boomers.
Well, if they keep buying once there are twice as many housing units as people that want to buy them, they’ll go bankrupt and no one will buy their assets at a reasonable price. So that problem solves itself.
I used to think that, but they influence (read: buy) any politicians and regulators who adjust the policies (the pols benefit by knowing what they're doing also) - either they shift the approach, or exempt themselves.
And do what with it? If they do nothing, they're paying property taxes. If they rent the units, that's housing on the market. If construction continues faster than people move into the city, rents will go down.
> corporate and foreign wealth
These terms are dog whistles. Unless you want to argue for something Marxist, but then "private wealth" would suffice.
1) the immigration rate is so high it isn't enough to keep up
2) the house values in areas that dont build in enough housing have skyrocketed, and smart homeowners in those areas have decided to sell and move to places with lower house prices and purchase more than one, which of course rockets the price even in the places that do build a lot. So even in provinces where lots of housing is built, immigration from other countries and other provinces blows up the housing prices anyways.
3) The government doesn't want to do anything about it because immigration is how they're keeping down wages, and since housing has become so much of the GDP they're terrified of what it would mean for the economy if there was a price crash anyways, so they don't look at policies that would fight the housing price explosion in fear of what the economy will look like if they do.
> 1) the immigration rate is so high it isn't enough to keep up
That could be addressed by making home building a priority and by relaxing regulations like zoning. Allow more infill.
> 3) The government doesn't want to do anything about it because immigration is how they're keeping down wages
That's not the only reason to support immigration. Canada, as is the case with most western nations, is facing a demographic cliff due to lowering birthrates among it's citizens. Countries that allow more immigration can mitigate these demographic problems. Countries that are facing birthrates that are falling to or under the replacement rate should be trying to attract immigrant labor. Countries in that position that don't are going to be facing some serious issues in the not too distant future as their populations age.
There’s another reason that local governments don’t embrace intensification, which is that they will be responsible for building the infrastructure to support it. Take a look at Jakarta where zoning laws focus heavily on intensification. Housing is cheap, but power cuts are normal, most of the city smells like sewage because you have sewage flowing into storm water infrastructure, the city regularly floods, and parts of it are sinking into to ocean because unregulated ground water extraction has caused meters worth of subsistence in some areas (the roads are also terrible, but surprisingly the city has been making very good progress in that area at least). Now you can manage all of those things, but it requires competence and proper management of resources. Something local governments tend to not be good at, and why would any of them want to take the risk? Expensive housing and bad traffic is the status quo, flooding you could probably blame on climate change, but power cuts, lack of running water and a city that smells like shit would cost too many people their jobs.
This is easily solved with impact fees. Builders pay a fee in my town of about $30,000 as part of the permit process for a single family home. That money goes towards the necessary infrastructure improvements.
It’s not easily solved at all, because the hard part is planning and building and maintaining the infrastructure. Something local governments frequently reveal themselves incapable of doing, even when they’re sufficiently financed. That’s before you have to contend with the incentives of governance bodies often being not exactly aligned with that outcome. Responsible management of basic services isn’t usually a platform that drives voter engagement. Local governments are incentivised to minimise how much they spend on basic infrastructure, not intentionally create new demand for it.
Ironically you're complaining about the Canadian government not doing anything on the exact day that the FHSA comes into effect, which is a plan to make it easier to buy a home.
The FHSA allows people who have excess money beyond what they can save in a TFSA to save tax money on income put aside for the specific purpose of saving to buy a first house, but on much worse terms than a TFSA. If you've maxed out your TFSA and have room to save in the HFSA, great, but its got a time limit and most people will have room in their TFSA already.
Sure, if the parent had said that the government was ineffective in its attempts to fix the problem I would have agreed.
But they said they were doing nothing, and it was just so ironic the comment came on the day one of several attempts the government has made to address the problem.
ah I see, completely ineffectual tax breaks for already wealthy is different from nothing, so you're going to nitpick instead of trying to communicate a position.
I think I've seen where you're coming from, and I'm uninterested in any more of your opinion.
I'm an immigrant and got really burned during the Harper admin (Kenny's handling of immigration destroyed my life). That basically meant my options are Liberal or NDP. NDP policies seem to think if I make more than 200K, I am a rich fat cat (ignore that I have a freakin PhD at the cost of a delay in buying a house - effectively making me far poorer in wealth terms than someone with a mediocre undergrad who bought a place anytime before 2015). Last election, I recall thinking, how can I vote NDP if them winning means I'll leave the country. That means, my only choice is Liberal. I am so fed up with their mismanagement, that I think I need to vote conservative just to make my voice heard, and then if (when?) the xenophobes of that party come out, go liberal again. I dunno .. feels like Canada isn't for people like me.
> That basically meant my options are Liberal or NDP. NDP policies seem to think if I make more than 200K, I am a rich fat cat
If you make $200k a year, you've got almost 3x the average household income in canada ($75k). You're way up there in terms of wealth, and don't need any help from the NDP or anyone else.
sure but the house isn't income, while $200k is income and enough to buy a house in some parts of this country every 3-5 years, if spent judiciously.
It's so far out the norm of normal income that anyone earning $200k in canada and complaining about the housing situation isn't in touch with what normal people in canada are experiencing and their complaints are ridiculous.
It's like a CEO yelling that you don't know how much they're paying in capital gains tax. It really isn't relevant.
While that income sounds like a lot it doesn't stretch to buying a home every 3-5 years. Are you taking about getting a mortgage? I make more than that but it's unrealistic I'll be owning a fully paid off house in 3-5 years. I could get a mortgage and purchase a house in that timeframe.
After taxes, high COL, sky-high rent, and retirement savings there's maybe a deposit in there.
the average household income in canada is ~$75k. $200k is a lot more "then maybe there's a deposit there". That's paying off a mortgage in record time if thats the priority money. Everyone in canada who is struggling is paying taxes, col, rent, and retirement savings, or they don't even get retirement savings.
Ah yes, the economic trick of buying the "average" house thousands of kilometers away from where I live. The average house where I live starts at four hundred thousand. Much more if you want detached.
Thanks the advice. I'll start purchasing property impractically far from my work. Good idea
I like that you entirely ignored their parenthesized statement immediately following what you just quoted. If you're going to respond to a point, at least respond to the entire point the other person makes.
It's not really relevant - he can save for downpayment on a house in most places in the country in a single year while also paying down his loans for a phd. He's so far out of the norm at his income that houses that are unattainable to most people are within reach. Sorry he chose to take out loans to get a phd and has to pay it back - I didn't make that decision. But he can definitely afford a home.
I only see one solution to right the wrongs of the past (with respect to the housing bubble). Tax wealth annually. Tax home sales the way the US does it.
As a society, we need to acknowledge how zero interest rates were directly responsible for the housing bubble. The people that caused that should be shamed publicly.
Interest rates and tax policy have massive impacts on behavior and the overall economy. It's kind of nuts that we do live in a system where these rules change all the time based on the whims of a bunch of politicians, half of whom are apparently members of an apocalyptic death cult. Or in this case, kinda racist?
"The bridge from Rinkeby makes it easier for criminals to recruit your children into crime," the party told local voters during last year’s campaign.
Speaking of taxing home sales, before 1997 any profit was considered capital gains. After the "taxpayer relief act" in 1997, the first $250k was exempted ($500k if married). So that was like a big flag saying "go forth and make money flipping houses". Side effect in our timeline is the creation of infinite home flipper content for YouTube. Similar signals with zero interest rates. "Buy a house now, no matter what it costs, for tomorrow it will cost more. Oh, maybe buy some guns too while you're at it, the end times are near".
With that kind of income, I suggest you talk to a wealth manager. There options for low effective interest rate loans. The effective rate on our mortgage is about 1% fixed.
All 3 of the major parties are pro huge immigration. Any discussion to the contrary is labelled racist regardless of a housing and healthcare crisis.
Businesses underpay and when they can't find people willing to impoverish themselves to work for them, they apply to the government to bring in "temporary foreign workers" - for things like fast food restaurant workers not essential business, keeping the wages down.
Temporary foreign workers and international students in canada are allowed to buy housing, so aside from renting the rich ones who make it here actually buy up properties for their family offshore.
Even if Canadians vote out Trudeau, Poilievre of the conservatives has no interest in slowing down immigration or affecting policies to improve access to housing. The leader of the NDP, Singh, is useless and his party is also very pro immigration and has no housing policies that would affect the market.
What we're seeing is a death spiral of some kind but I'm not sure where the ultimate end goes - no doctors, no housing, low wages compared to housing and food costs, etc. This is textbook conditions for serious blowback and social instability.
When asked why there wasn't anything in this years announced budget to deal with the housing crisis Christina Freedland says that they're still spending money from last year's budget on it. Well how about you see the fruits of your labours and realize it isn't working out well for Canadians, and do something else/more?
If we don't manage to vote trudeau out this time around I'm going to look into immigrating to texas. People joke about that but texas recognizes my professional licensing and all I'd need is a job offer.
> Businesses underpay and when they can't find people willing to impoverish themselves to work for them, they apply to the government to bring in "temporary foreign workers" - for things like fast food restaurant workers not essential business, keeping the wages down.
> Temporary foreign workers and international students in canada are allowed to buy housing, so aside from renting the rich ones who make it here actually buy up properties for their family offshore.
If they're being paid so little, I don't see how they could possibly afford to buy any properties. I've only known a few, but they all send the majority of the money back home instead.
This feels very fear mongering on TFWs and not grounded in facts.
Some TFWs and international students some come from wealthy families in their home country and use whatever program they can to get into canada to get a foot in the door, and be allowed to buy a house here. I live in an east indian heavy neighborhood and I know a dozen people who were extremely rich before every coming to canada, far far more than the average canadian.
Make sense, rich people would have an easier time to immigrate.
But how many of this dozen are here on TFW like you're suggesting?
I'm doubtful that it's TFW that are buying the properties you're concerned with, especially since they're still at the mercy of PR/work authorization laws that could make them leave the country at any time.
It _could_ happen, but that would be pretty exceptional.
You want to complain about foreigners making house prices too high for you, you do you. Just be accurate in your complaints.
international students do purchase houses for their families out of country - it happens more in some areas than others.
And if someone couldn't get in as a student, they might try to get in as a TFW and spend their family money on a home - I don't know how often it happens but its allowed because TFWs DO buy houses.
I wonder how much of this issue is due to our (enormous) amount of immigration, given that fertility rate has been below the replacement rate since 1970 or so
I would have gladly had more kids if I could have afforded a place to put them. Do you know what a 3 bed condo costs in Toronto? It is financial suicide.
In my parents generation in communist Poland, people had 2-3 children families in flats no bigger than 500-750 sqft. When there's a will, there's a way, and people just truy wanted to have children back then. While nowadays, it seems that there's always some excuse in the way.
Countries that have fertility rates below replacement should be encouraging immigration. Otherwise they're going to be facing some serious economic problems as their populations age.
some immigration is different than what canada is doing, which is mass immigration at a rate far outpacing most other countries. nearly 1/4 of canadians are immigrants, and we're allowing so many in per year that our housing and healthcare. Its too expensive to have kids for many young people - I have friends who would like to have them but can't afford it.
Are there any economists that support your theory? Namely that (if I understand your point correctly) immigration is hurting the economy more than it’s helping? Everything I’ve seen claims the opposite - but I’m open to new information.
Also, what support do you have for the claim that the existence of temporary foreign workers suppress wages for working Canadians? My understanding is that they are performing jobs that Canadians just won’t do and thus, their presence shouldn’t affect Canadian working wages (or so the theory goes).
They aren't doing jobs canadians wont do, they're doing jobs canadians wont do for the wages being offered. If they raised the wages, people would want to do them. Instead companies hire at very low wages, and very few people want to work for them, they apply to bring in TFW who are desperate.
Their presence suppresses the wages because there's a basically unlimited pool of people willing to work for suppressed wages. All businesses have to do is not raise wages and the prevailing wage is whatever they offer. Almost every tim hortons, mcdonalds, burger king, etc in canada is staffed with TFW. I'd rather they raise the wages or go out of business. Instead they import workers and keep wages suppressed.
We partially agree here. However the vast majority of TFW’s are farm labourers. This is gruelling, backbreaking work that am not convinced Canadians would do at any (realistic) wage. It’s also highly seasonal so not really a big help if people just go on EI afterwards. Furthermore, with grocery inflation what it is, what do you think would happen if the wages of the pickers doubled or tripled because they were done by Canadians?
I’ll tell you what would happen - People would lose their minds.
So… it’s complicated (at least in that industry). I’m not as convinced about the need for them in tech and restaurants because, as you say, they should probably just pay more and Canadians would do those jobs. But the numbers I saw don’t seem that significant so I’m not so sure.
Unemployment is also at the lowest it’s been in ~50 years so.. where would those new Canadian workers come from anyways?
There are no simple answers. That’s why I’d like to see what economists are saying. I know that with regular immigration, there’s a consensus among many economists that we need them so our economy doesn’t actually shrink due to low birth rates.
Here is an Australian site expressing a similar view about the Australian economy. One prominent poster is ex Australian treasury and has been featured on news programs on TV.
> Temporary foreign workers and international students in canada are allowed to buy housing
What?
Drug lords and warlords are allowed to buy real estate in the west through shell companies registered in tax heavens. It's the same companies that do 'tax optimisation' for our billionaires.
The head of Wagner Prigozhin has passed money laundering check in London while he was under sanctions and wanted by the FBI, he submitted his mother's gas bill.
> the rich get richer (...) and the poor get poorer
It's always the same story. Can't we just make the economy more fair by saying that the wealth gap must at least be smaller than some value or else the rich will pay (taxes) to make it so?
When people say they want fairness, they are being disingenuous. They want a lot of the fair that benefits them and a little bit of the fair that makes their life worse.
That's not what fair means. Would you want fair if it made your life a lot worse? The only honest answer is no :)
One interesting point regarding this is, ask anyone in the first world whether they want the same fairness as those not in the first world, ie if we added up all of the wages of everyone on the planet and redistributed them equally, the first worlder would be much much poorer than where they started off.
Of course, I do support bringing up the average wages in each country overall, which is precisely what capitalism has been doing for the past century of industrialized progress.
> if we added up all of the wages of everyone on the planet and redistributed them equally, the first worlder would be much much poorer than where they started off
This point of 'most people only want what benefits them' is very shallow.
You've set up the question for failure. You limited comparison to income, and to income just among labour class. If you actually setup the question correctly, you might find the results to be different.
Are we going to re-destribute capital gains? Most people in developed world earn zero from capital gains.
Are we going to re-distribute ownership of assets, shares, and land? Most people in developed world own zero land. Many have net worth of roughly zero.
Are we going to re-distribute taxation? Taxes in the first world are paid almost entirely by the middle class.
What about right to pollute, currently wealthy individuals have unlimited right to pollute, some take helicopter rides and jets to cut travel time by <1 hour or to avoid traffic.
> what capitalism has been doing for the past century
Capitalism has been dumping toxic waste from the west in developing nations, like used electronic and plastics. It has brought Opium addiction to China, British American Tabacco is selling to children in South America right now, Nestle has admitted to slavery in Thailand.
Western companies have bribed local officials, and hired death squads to kill local union leaders and environmental activists.
The leading countries to rise in the last 30 years, China and Singapore, have active, competent and interventionist governments.
Interesting, I've only started hearing about it recently, when I started following Peter Zeihan. Previously, all I heard from everyone was that China was a paragon of rational management.
I've been hearing this about US, EU, China and a few other places from different people depending which part I was visiting in the world since I know about myself.
> Capitalism has been dumping toxic waste from the west in developing nations, like used electronic and plastics
Well, I did talk about wages rising, specifically, and not environmental waste. But it really is true that developed countries now want many developing countries to stop their environmental damage right as they are industrializing, meanwhile discounting their own environmental damage in the centuries prior. The truth is that industrialization requires some sort of short term environmental damage (as long as we use fossil fuels still) but thankfully, many nations are using renewables, including the China you talk about. China's (and indeed most others') rise has only been through after adopting capitalist principles, look at their growth until the 80s, and then from the 80s to today. I don't agree that we should have non-interventionist capitalism, but I won't deny that capitalism has been the single greatest driver of prosperity in human history, even with all of its faults.
Lots of people say this but very few have a concrete idea of what is needed to accomplish this. What taxes are the rich going to pay? Who among the rich? How does one define "rich?" Et cetera.
Taxes on real estate are the obvious answer here. Every residential property you own after your first should increase your tax burden substantially, such that you are incentived to sell them rather than hoard them and rent them out.
And own stock instead, or petroleum or any kind of virtual asset offshore, on which there way more little tax, meanwhile renting a mansion at home that belongs to your own subsidiary? Perfectly doable for the rich, it will raise no tax gains at all.
Don’t get me started on “taxing virtual assets beyond the 30th you own”.
It really isn't that simple, because again, no one really can say how it is so simple, merely that it is, somehow. Economists also talk about this point often, and they also can't agree, generally speaking, on how to, or even if to, reduce the inequality gap.
The best solutions I've seen are land value taxes, inheritance and estate taxes, and taxes on loans backed by stock; and among the worst are unrealized capital gains taxes.
And pretty-much any of those taxes would help the situation, so long as ultimately they boil down to the rich paying more per year than their profit margins and therefore shrinking inequality (redistributed to the people).
This problem isn't complicated because it's intellectually challenging. This problem is complicated because the balance of power is overwhelmingly favorable to the rich, and they have many means to both disrupt the conversation in intellectual circles and to block any political means of making these necessary changes.
See economist Richard D. Wolff for extremely simple answers to the above problem. Ultimately it is simply the math of value flows. Current system? Inherently concentrates at the top. Adjust taxes (any of them!!) to reverse that.
> This problem isn't complicated because it's intellectually challenging. This problem is complicated because the balance of power is overwhelmingly favorable to the rich, and they have many means to both disrupt the conversation in intellectual circles and to block any political means of making these necessary changes.
It can be both, one does not preclude the other. As I mentioned in my other comments, one can't simply adjust taxes without thinking about higher order effects, and it takes intellectual capacity to even think about what to tax in the first place and how, in order to reduce these effects.
> See economist Richard D. Wolff for extremely simple answers to the above problem.
The simplest solution is a wealth tax. Once you reach a certain amount of wealth, you are taxed for it. So for instance you might be taxed 50% of your wealth above $1 billion, annually. You might be taxed 25% of your wealth above $100 million (up to the next cutoff, so a billion in this hypothetical). You might be taxed 10% of your wealth above $10 million but below the next cutoff, and so on.
We could even take this further and make it illegal to have too much money. But like all laws, what ultimately matters is enforcement. Currently the IRS doesn't even make much attempt to go after the rich for tax evasion, so writing stricter laws is irrelevant if we don't enforce the laws we already have.
I'm not saying this is perfect but it is a simple solution that directly addresses the issue of wealth inequality.
What is wealth? How do you define it? How can you tax it? If it's in stocks, what does it mean to tax it? If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company? If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid?
It's not as simple as "make it illegal to have above X amount of money" because it's not really even money at that point, no one has X billion in cash lying around, it's tied to some physical asset. This is just one problem to your statement, there are many others.
Anything you own with a quantifiable monetary value. Yes, even if that value is not fixed.
> If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company?
Yes.
> If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid?
No. How does that even make sense?
The answers to these questions are easy, people you just don't like them, because they mean that those who have a lot and feel like they "got it fair and square" suddenly have to (gasp) contribute to society rather than hoarding all of that money to themselves. Even though you start to hit massive diminishing returns in terms of effect on your actual lifestyle once you're getting up into the million range, and see barely any effect at all of additional wealth or income once you're past, say, 100 million. It becomes just a dollar-denominated high score, so that you can feel smug about How Great A Businessman You Are, while millions of people starve on the streets unnecessarily.
So if your company tanks the day after the tax year cut off you're suddenly stuck with billions in debt and no assets? Seems like a pretty good reason to put your money elsewhere.
This is what the IRS is for. It's one of the only government organizations that actually makes more money than is put into it. So we'd just give them more money and resources to do their job, which would include wealth evaluation. And to answer your "gotcha" question you do get taxed on stocks in this scenario.
If you want to nitpick that every solution isn't as simple as fizzbuzz then there's no real point having a discussion. There are plenty of other tax alternatives that are also quite simple, you just seem to be unhappy with anything that isn't perfect.
> If you want to nitpick that every solution isn't as simple as fizzbuzz then there's no real point having a discussion.
No, that's the entire point of having the discussion. If the solution can't answer even these types of questions, then there's no point having the discussion, because it breaks down even upon initial examination.
> This is what the IRS is for. It's one of the only government organizations that actually makes more money than is put into it. So we'd just give them more money and resources to do their job, which would include wealth evaluation.
Sure, I agree in giving more money to the IRS, indeed that's happened recently, but even they are not going to tax unrealized capital gains.
> but even they are not going to tax unrealized capital gains
You are completely missing the point of the conversation you started. Everything we're discussing is a hypothetical. In this scenario, they would tax that and everything else.
Anyway, I don't think that you're arguing in good faith and I'm moving on with my day. Cheers.
Ironically I feel like you are the one not arguing in good faith.
> Everything we're discussing is a hypothetical. In this scenario, they would tax that and everything else
Your hypothetical is "the government taxes everything". Then someone asked, "how would that work?" and your response was "everything we're discussing is a hypothetical!".
There are many obvious ideas around taxing wealth. The problem is that when you think about how they would work in reality things get very messy and difficult. Proposing the idea is not the hard part.
> Your hypothetical is "the government taxes everything". Then someone asked, "how would that work?" and your response was "everything we're discussing is a hypothetical!"
Because he was mixing reality with the hypothetical. He was saying the IRS doesn't work that way in reality, which has no bearing to the discussions we were having which is a hypothetical. I explicitly stated in a previous comment that the IRS would also evaluate wealth and tax based on that wealth, and then he responds talking about how they don't tax unrealized capital gains. In this scenario they do, so why does that matter?
You're the one who brought the IRS, a concrete institution, into this hypothetical discussion, talking about "just [giving] them more money and resources to do their job, which would include wealth evaluation." Okay? So when I asked something like, how would this work, because this is such a hand-wavey answer as to be a non-answer entirely (how would they determine wealth evaluation? Sounds to me like you're saying, they just would), you couldn't answer.
The reality is, like the sibling comment says, just proposing a simple solution doesn't work, that's not the hard part. The hard part is actually exploring and understanding the problem of what actually happens were an institution such as the IRS be assessing wealth for taxation.
You have proposed an idea which does not actually provide any solution to the difficult part of your idea, which is this bit: "this wealth is determined by the IRS".
"determined by the IRS" is passing the buck big time.
> In this scenario they do, so why does that matter?
Because you're skipping the most difficult and pertinent part of the solution. There's not much substance to proposing a wealth tax based on wealth brackets. All the difficulty and nuance of a wealth tax is in determining how to reasonably tax someone's wealth (E.g. assets and unrealized gains).
I wasn't even claiming my original idea had much substance because it is so obvious. I hardly think I've solved a real-world problem because the real problem is people and politics while we're discussing theory. But if you want a simple proposal to address wealth inequality that's one way to do it. And wealth evaluation isn't an impossible problem because wealth is regularly evaluated in every market - real estate, art, stocks, cash.
No solution is ideal. But it's not an intractable problem because it's regularly solved every day around the world for all sorts of reasons. If we created a branch of government whose purpose was to do this I think they could figure it out. So in that sense I'm offloading the problem to people whose job it would be to figure out the problem.
Anyway, I've spent way too much time arguing about something I don't even care about. Cheers.
I think you two peeps discussion illustrates the root problem with the whole issue to taxation and wealth. We start out with ideas for solving it, but quickly the scale of the mess that is the ‘wealth system’ quickly busts pretty much any solution. Trying to appreciate the true scale of the problem and any solutions becoming quickly impossible. And I think this is by design. It protects the system for the wealthiest…
Okay, no worries. It seems you wanted to reply to me but then are unable to show anything regarding your viewpoint when I ask questions about it, even, yes, in the hypothetical, so it's not worth my time to ask any questions either.
"What is wealth? How do you define it?" I think I've done myself an injury from rolling my eyes too hard. Tax departments have this incredibly hard question covered, for some time now
No, they do not have this question covered. Look at the few countries that actually have a net wealth tax and how inadequate their calculations are. This is not a solved problem by any means.
Economists are part of the problem. When the rich are getting richer and the poor work their asses off and still get poorer, then just about any solution is better and the more decent thing to do than keeping disagreeing about what is the best solution.
This is the exact same thinking that brought us the Four Pests campaign, or the cobra effect. They also thought that any solution was better and didn't think about the higher order consequences.
The goal is to make the system more fair, not eliminate one of the parties involved. Taking such an extreme position in an argument also doesn't help the situation.
The goal is to make the system more fair, not eliminate one of the parties involved. Taking such an extreme position in an argument also doesn't help the situation.
Yet it seems to me at least, that you are taking the extreme position. People are arguing for nuanced improvement, and discussing what issues may arise.
You're essentially saying "Enough talk, do random things". In fact, you're saying "do almost anything", which is quite extreme.
The point I made in the other sub-thread, is that many many other countries did that very thing. Whether by revolution, or elected and then massive change, these countries ended up with utter devastation, and in some cases 100% poverty.
I get you're frustrated. Fair enough. But waving away how difficult these issues are, just isn't workable.
To that end, I see people criticize:
* low interest rates
* high interest rates
* 0 interest rates
* quantitative easing
* methods to prevent bank collapses
* methods to reduce the depth of a recession
* methods to slow economic growth (reign in inflation)
Quite literally, no matter what anyone does, people are yelling "Idiots!" at the result. Meanwhile, the results compared to other nations aren't horrible.
I 100% agree that we need to look at ways to reverse the trend of wealth equity. But to say it's just simple and easy, just snap your fingers and try stuff?
> The point I made in the other sub-thread, is that many many other countries did that very thing.
If we examine the set of 'many other countries', does it consist 90% of dictatorships, that were already in poverty, and the methods chosen 70% violence?
What if, the aim of these actions was never to improve the economy, but instead was to consolidate power for the dictatorship in question and to remove elites that could pose competition?
What if the set of 'many other countries' is a very unfair example? The author is not suggesting violence, and we do not live in dictatorship?
Fuck the World Bank numbers. I’ve been to Sri Lanka and poverty is real over there.
Oh, and “According to the U.S. Census Bureau, the official 2017 poverty rate in the U.S. was 12.3%. However, other sources placed it as high as 17.8%. [snip] The 2021 poverty threshold in the United States is $26,246 for a family of four”.
So the poverty figures are relative to the wealth of the country? That makes the numbers meaningless to compare (since there is no standard cutoff - just pick a number that gives you a poverty rate of x%).
35 million people in the US live in poverty? That's total nonsense coming from the fictional "poverty line". If we stick to absolutes and define poverty as something as for example "not being able to house, feed, warm, clean or clothe oneself" (so basically - not being able to fill one of the basic human needs, due to insufficent funds) then there's almost no poverty.
Most things aren't so simple and still, it can be done. We got a man on the moon, we split the atom, we built software that can (almost) perform as well as a human being, surely we can tax the rich and corporations more to bring inequality down.
If people think taxes are too complicated (which I don't think is the case) so be it - You can simply transfer money to the poorer people, like what happened in Covid but focus on the poor. Every citizen will have a net worth number, everyone will get a sum of money, the less you have the more you get. Now that will be inflationary of course but the burden will go to the rich instead of the poor.
Yes! But it requires a wealth tax (or equivalent) higher than the rich's profit margins, and requires enforcement in all major jurisdictions. This is effectively impossible due to the sheer amount of power these folks have to prevent it. Simple.
I thought that until the uptick in homicides of the past few years, since there wasn't an increase in lead at the start of the 21st century. I imagine it has more to do with incarcerating nearly 2% of the population, unfortunately.
The same story could have been written about Oslo - my home - and the other major cities in Norway (Bergen, Stavanger, even Kristiansand).
It's not so bad in the country side, but there are very few jobs there. I have some friends (a couple with 1 kid) who moved to distant suburbs of Oslo for more affordable housing. But the long commutes destroyed their quality of life and put a strain on their marriage. They are now moving back to a tiny, very expensive rental in Oslo. Its a definitive step down from when they left.
We have outgrown our apartment -- the kids are getting bigger. So, we really need a 4 bedroom place (ideally 5 so we could have an office, but we'd settle for 4 and a desk in the living room). There are no apartments - which would be a lot more affordable than a house - that large here. The max bedroom count in apartments here that I have ever seen is 3, which we already have.
So we are planning to buy a 2-unit house ("tomannsbolig") with another couple with kids. It's the only way we can afford something with enough bedrooms, without a large inheritance or something like that. None of us have anything like that coming. We have 4 "good," stable jobs (programmers, researchers etc). Even with other couple in the mix, it feels impossible to find something in the same school district. We've been looking for over a year.
So, we are thinking about looking for a third friend or couple, since there are a few houses that have 3 units. It's just tricky to find someone you feel comfortable enough with to ask that. But we hope that 5-6 incomes will be enough in this market.
*Before anyone tells me my kids can keep sharing bedrooms, try telling that to them! The increasing need for privacy and lack of space is becoming a real problem here.
> The growing wealth inequality leads to all sorts of other dysfunction including increased crime, worsening services, etc. as the govt cannot raise enough taxes.
Hold up. I don’t think the people of San Francisco grew weary of increasing rents and decided to turn to a life of crime.
Most of the “trouble makers” in the Bay Area are recent arrivals to the area and come because of poor policing and the government is generally more tolerant of them.
This is debunked every time it's brought up. The "trouble makers" you're referring to are local. It is not in fact the case that San Francisco mass-imports its downtrodden.
Gross. This isn't about whether the majority of underclass people in San Francisco are native Californians, but rather a case that crime in the US is the fault of Hondurans and El Salvadorans. More Hondurans end up in Texas than in California, but nobody is posting memes about how order has broken down in Houston.
I'm in the highest percentiles of income in Sweden (public data is available) and it doesn't matter. It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods.
What's the point? What is the point of trying to be a high performer if wealth can't be acquired by income? Why would I want to work for anyone in this country? Only way out is equity and that game is even harder to play in Sweden than in the US.
Sweden is full of old money, or at least it looks like that from a Finnish perspective. The problem with old money is that if you simply invest the money passively and don't do anything stupid, the next generation is going to be even richer. Both in relative and absolute terms.
Being able to live in the most desirable areas is based on relative wealth. If there is a lot of old money, it's harder to make it to the top in a single generation.
The usual tools for leveling the playing field are wealth tax and inheritance tax. I'm under the impression that Sweden abolished both a couple of decades ago.
A better solution is land value taxation because it hits those with old wealth the hardest whilst not distorting markets. Wealth tax and inheritance taxes can be gamed and avoided. Land cannot be moved or hidden. Now that a minority of people own land in many locales, this will soon be a politically acceptable policy.
Georgism made sense in the 1800s and it makes even more sense now.
Whenever I bring up the topic of Georgism or land value tax, people look at me like I am mentally ill. The idea of taxing the right to exclusive use over a piece of land - something that no human has ever put effort into existing - is so utterly foreign to most people. Unfortunate.
There was a reform of the German property tax system, since the federal constitutional court ruled that the old system was unfair. The current model allows the 16 states to set up their own system, if they wish so, and interestingly enough, Baden-Württemberg turned the property tax into an actual land value tax, taxing only the land value itself, not the real estate on it. Of course there was a documentary the other day about a land owner crying that he is forced to build more houses to rent out and cover the cost of the LVT. That was the point all along!
I disagree with it not being easy to understand, on the contrary it makes perfect sense to me. We have the vast earth we live on as humanity and all the land was here long before us and will be here long after we are gone. Now we divide some of this land up and give people exclusive rights to it. How is it not absolutely intuitive to pay everyone else, who is not allowed to use this land, a fee, rent or tax or however you might want to call it, as compensation? In turn, if you use less land to reach the same goal, i.e. you make better, more efficient use, you pay less, just like with any other resource.
The more common "rebuttal" I hear is "well the land lords will just slap it onto the rent, so no use", to which I ask "then why don't they ask for more rent already if the rentors would be willing to pay?"
Then again, people I talk with are against a wealth tax as well, claiming that property would be impossible to account for and value, meanwhile France and Switzerland, two neighbours, have no issues in that regard. At the same time, both Germany and Austria had a wealth tax until very recently.
I like your rebuttal, that is a very simple way to explain it. I’m not very good at explaining concepts so maybe my difficulties are with my method of explanation and not the subject.
I'm in Vancouver working remotely for an EU/US company because I couldn't get anything here. At $100k CAD, my partner and I wouldn't be able to afford a modest upgrade to a 1 bedroom condo... anywhere in the city (from a tiny basement studio) without significantly increasing our take home. The place I just visited would require $4000/m after a 20% down payment (which I don't have). If I double my savings in the next year, assuming I don't get laid off next week and go broke again, I'd have enough for a 5-10% down payment and hypothetically require mortgage insurance, plus still not be able to afford the mortgage.
But hey, at least the cops won't arrest me for openly smoking crack on the sidewalk, so that'll help me deal with the stress of trying to be a high performer.
Let me ask you, you live in one of the most beautiful regions on the planet, you work remote, why don't you get a place 2 hours away from the city or something like that? Nice quiet life, the beauty of the pacific northwest not even a bike ride away, cheaper to live, and you don't have to deal with the crackheads. What keeps you in the city?
It's an incredibly beautiful region, and that's definitely one of the options I'd consider if I was genuinely forced out, which I didn't mean to suggest I am, it's just that renting is the only viable option. 2 hours away though doesn't really solve that problem if I was trying to unfortunately; things don't get as more affordable as you'd hope.
But costs aside, the answer is that the people and things I do in the city are what bring my life substance, and being from the suburbs, it's a deeply isolating sort of existence that relies pretty heavily on having a car. I've personally never aligned with the idea of working remotely and isolating myself further; it would seem to me a recipe for depression.
I love being in nature, isolated and away from the city, at times, but not most of the time. I like leaving my place to walk to the grocery store, the cafe, and along the way being able to bump into people I know by name and ask them how things are going. I like walking to the gym, especially when it's raining (a lot), and having my small community of people there. Incredible food is nearby as well, concert venues, easy access to the airport, none if which I'm indulging in all the time but enough that it really brings flavour into my life.
I also like biking around, and for that there's actually quite a lot better infrastructure for in the city vs out, and it's easier to just get on a bus and go into the wilderness.
The crackhead comment was a bit flippant. I don't have a problem with anyone experiencing addiction, it's just a deep irony I find a little sad, akin to "instead of making it easier to build a life here, we'll just make it easier to fall out the bottom", though I know things are wildly more complex than that.
Lastly, aside from all those reasons, there are theoretically more job opportunities in the city, and that's good for my partner who doesn't work remotely and for me during the periods where there is no programming work.
To me, a good city is the culmination of social systems including capitalism that benefit from having more people around. A greater social circle of people available, more market, more jobs, more culture, better transit systems, art, etc..
Edit: I'd add the the only aspect of living in a city that's busy or particularly loud are automobiles, and to an extent the train. Very little of any generalized chaos is the result of many people ambiently being around, depending I guess on your individual tolerance for that and where specifically you might be. It's never once occurred to me that there are too many people around.
Back in the mid/late 90s Vancouver was affordable and a lot of flats being built. It was still more expensive that the suburbs, etc. but still cheaper than metros across the border. Sometime in the 2000s money started flowing in and those flats I was seeing in place like Kits for $150-$200k were suddenly going up a lot. Rents were also escalating. A lot seemed to be fueled by foreign money.
I was looking at relocating at the time and wish I had followed through.
This is wrong. Vancouver was never “affordable”. My family
moved to Vancouver in the mid-80s and it was by far the most expensive place in Canada. Prices had already climbed rapidly by the time we got there and prices never crashed for 40 years. At worst, it was flat for a few years.
Our 1000 sqft house in the West End was almost 300k in the mid-80s and our family was struggling financially but we were in the best school district so my parents made the sacrifice. It was almost double the price of a much larger house in suburbs of Toronto.
East Van was cheaper but still expensive relative to other cities. Vancouver house prices has always been a mystery because there is no inherent industry to pay for it. Locals blamed Asians but Germans were larger demographic in terms of immigrants but you couldn’t identify them as easily.
That's more or less true, it just wasn't so severe I think at a point. It was out of reach for my poor prairie single parent family, but that was for a giant single family house. If the circumstances prevailed in 2015 when I moved here, I definitely could have afforded even a pretty nice 1 bedroom condo outside of downtown.
Regarding east van where I live now, I went to an open house yesterday on commercial drive that was 1 bedroom for $750k facing west and looking at buildings that have been there at 1 story since maybe the 50s.
The gap is just so enormous, considering we rent a studio basement down the street for $1500 total.
For Vancouver's geography to be a legitimate concern, we would have needed to maximize what we could do with the existing land, and it's very, very far from that.
I would argue the latter 2 arguments have some bearing, but imo it's more about cheap capital coming in from many directions including locally for so long in combination with artificially choked and inflated development processes for decades. For example, there's a parking lot with an old grocery store sitting there at the busiest transit hub in the U.S and Canada. The proposal to redevelop the site has been repeatedly stalled every year for what is now 6-7 years, meanwhile only the most meager development projects have gone forward in the same neighborhood. That said, because of the other reasons, as soon as it hypothetically went up, all of the units would be purchased by speculators because they'd be wildly out of reach for any regular person anyway, due to decades of the other crap.
I went to an open house yesterday for a modest one bedroom with no interesting view or extravagant features, listed at $750k. When I remarked that the cost of the mortgage alone would be a multiple of 2.5 - 3x our current all-in expenses, he simply suggested that in 5 years I can just move out and hang on to it, renting it out to someone and keeping another unit off the market.
The geography wouldn't be a problem if maximizing use of the land was done. You point out the choked development processes, but other open geography locales would still have those bureaucratic problems in cases and yet just sprawl out elsewhere, reducing prices. Take a look at Houston, Dallas Fort-Worth, Calgary, Edmonton metros. There is a reason those metros have retained low housing prices while they have grown so much. They are able to grow out. Vancouver and SF are much more limited in their ability to grow out Single Family Homes when high-rise development is choked. That's why the geography issue does have bearing.
Meh, the greater Vancouver area including the adjacent cities have sprawled as far as they can and continue to do so; there's actually quite a lot of development happening in some of those suburbs, and they can be just lovely. The other cities you mention—if they've kept prices low—they're embracing an obviously horrible development pattern that only works because they have oil money and it hasn't collapsed yet. Smaller, less-resource-rich cities like Winnipeg have tried the same thing and literally couldn't afford to maintain their own infrastructure if all they had to pay for was road maintenance. Yes, you can buy a $400k condo there, but as they come to terms with the rate they're reaching insolvency, they'll need to find a way to very quickly turn what are already near the highest property taxes in the country, into 2-3x that number.
The geography is a constraint, the problem is failure to embrace the constraint in any sensible way. Prairie cities would be more economically productive and less horrible in my opinion if they halted outward expansion decades ago and just figured out how to adapt correctly.
Affordable from a west coast US salary. Vancouver has always made me shake my head re: tech salaries. It has capable engineers but pays a fraction from across the border. Back in the 90s/early 2000s, there was a lot of tech but it seemed more like a media center.
Ya that seems to be part of consensus, and consistent with what I'm seeing in terms of when some places were built.
The suburbs around Vancouver gradually decrease in price a bit, but for obvious reasons and not enough to make much of a difference. It's like going from $750k for a 1 bedroom to $550k for a 1 bedroom and that's sort of the spread within reason; an absurd gap to be sure I don't mind them, but I'm just thinking about it terms of being able to stay in my community for once.
I felt your pain. I live in Victoria and also make $100k but can't afford much more than a 1 bed without destroying our savings goals. Unfortunately my current job is hybrid and they won't let me go full remote. We plan to leave as soon as I find a new opportunity - despite loving living here by every other metric.
Victoria has an even more scarce rental market from what I understand too. It's one of those things that I hope will make it harder to keep people around if salaries don't go higher at an average company. $100k is great for a huge portion of everyday niceties and even some larger things—I didn't need to worry to much that a decent coffee grinder would damage me too much, or a trip—but not that one thing.
I'd also not necessarily describe it as pain, as much as like some hypothetical existential crisis. I'm not looking to buy a place at this moment, but when I consider the prospect of what happens if our landlords sell (giant house in east van), there aren't too mamy viable options.
> It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods.
Why would you expect to be able to buy a family house/apartment in the best neighberhoods just because you are in the top income percentile? Wealth percentile matters.
I'm also in the top income percentile in Sweden, and I can basically buy 99.9% of all houses/apartments in Sweden, which I think should be enough for most people..
Can you explain me how the math works on this? Because I certainly can't afford 99.9% of the houses/apartments in Sweden.
Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen
and of course wealth percentile matters. In fact, I understand that way too well. How do you raise your wealth percentile then? The whole point people are raising is that it's hard to become wealthy in Sweden from income. Actually much harder than in other countries. It might have worked for you in the last 20 or 30 years. Not sure that means it will work for others the same way in the next 30 years.
>> I'm in the highest percentiles of income in Sweden (public data is available) and it doesn't matter. It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods.
How is that possible? I am an immigrant who moved to Sweden at age 22, and I bought an apartment in Malmo after 2 years of savings in the center of Malmo. I wasn't in the top percentile, didn't get help from anyone else. It was entirely my own savings within that 2 years.
Maybe you shouldn't aim for center of Stockholm for your first home purchase...
Can't recommend this more. I moved out of Sweden and worked in UK tech for 7 years, earned a filthy amount of money, and are now moving back to Sweden to settle down.
So instead of contributing back to the Swedish welfare state that raised and educated you, you decide to move to a petrodollar country so you spend less on taxes. I get it. Sounds sustainable and not the least egocentric.
Unless he was an orphan and raised in a state orphanage, his parents already paid a lot of taxes, which presumably covered the education of their children?
This is the thing I'm always fascinated by in these stories - the complete lack of understanding for why not everyone can have everything in a particular place with finite resources.
> I'm in the highest percentiles of income in Sweden
Which one is it then? 80th? 90th? 99th? 99.5th?
> It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods.
Which are the "best neighborhoods" in your mind? How many houses/apartments are there in those "best" neighborhoods?
Do you see why these numbers matter if you're trying to learn from this situation rather than just complain and pretend nothing is finite?
This looks like a common pattern at other places too: you won't get "best-neighborhood" wealth from being first- (or sometimes even second-)generation high achiever. The root cause seems to be that there are usually more high achievers than properties in good neighborhoods, and old wealth erodes slowly (may take a generation or two), so there is very little pressure for old occupiers to sell their properties.
Why would anyone sell a property that continues to rise in value? Rent it out and vote against all construction, so it gets more valuable all the time.
Not even Covid and 100% Remote seems to have stopped the trend.
Same is true for me in germany. I know a really wealthy guy inherited his money. I will never reach his level. I know people who have successful start-ups. They earn well, but they will not reach “old money” levels of wealth.
Why waste the money and effort to buy something in the "best" neighborhood?
Status symbol? Who cares. For the investment? It doesn't seem like you can afford it, nor need it. Just buy someplace you can afford and make a nice home for your family.
If there is a genuine reason why that neighborhood is the best for you and yours, then ofcourse that is a different matter.
In cities like Stockholm the inner city is usually very expensive. I personally love European inner city life. I was raised like that. I like the commerce, the shops, the noise, the casual cycling, subway transportation. Essentially everything.
It's a very specific lifestyle that only exists in an area of 10 to 15 sqkm.
Outside the city center neighborhoods are essentially dorms.
Being European I have traveled to plenty of it's cities. I don't think I would want to live in the city centers of any of them. And there is really no need for it. Walkability and public transport is usually exceptionally good.
My observation of Stockholm as a tourist is that it is really easy to get around there on a bike, so I don't see the need to live smack in downtown where the price is going to be the highest (especially when you can't afford it).
I could. I have zero attachment to places. But it would be though on my wife and daughter (who both are Swedes, I'm the only immigrant)
And not everyone is equally poor. Sweden has one of the highest number of Billionaires per capita in Europe.
In fact wealth inequality (not income inequality) is almost as high as russia.
> You can't claim "wait times" as a positive of letting a bunch of people die or go bankrupt
i already covered that under 'access' . If you have access then USA has much lower wait times. Its postive to the people who have access. Your implication that wait times are just natural consequence of more access is also not right.
"Commonwealth Fund ranked Canada last among 11 countries surveyed on wait times for specialist care. the Commonwealth Fund’s survey results show that other universal health care systems (eg, the Netherlands, Switzerland, Germany, Australia, and France) have much shorter wait times than Canada does."
"Canada has 35% fewer acute care beds and per capita than the United States ... "
> Quality is just not true
If you want the most cutting edge medical care then USA is the no 1 destination for people all over the world.
"The United States ranks 4th in the World Index of Healthcare Innovation, with an overall score of 54.96, behind only Switzerland, Germany, and the Netherlands. Americans are usually the first to gain access to major new medical advances, advances often discovered at American universities and developed by American companies. As a result, the U.S. ranked first for both Choice (57.65) and Science & Technology (75.14)."
> If you want the most cutting edge medical care then USA is the no 1 destination for people all over the world.
That's a bit like saying "you can find the cleanest air in the world in California". In remote locations in the desert or wilderness that's plausibly possible, but the vast majority of people live in cities with substantial air pollution. Likewise, most Americans do not have access to cutting edge medical treatments and endure what I would generously call apathetic care from their medical providers. What is available to a celebrity or Saudi prince will never be available to you or any other American you ever meet.
> Most Americans ... endure what I would generously call apathetic care from their medical providers.
I call BS with "most Americans" or "apathetic care". Feel free if you want to share your anecdote. My personal experience and those I know though, is that the care is top notch. Cutting edge treatment? well I don't know, I was lucky not needing any of that. It's also probably more expensive compared to other countries. However our of pocket pay is very reasonable, and the level of care is excellent.
> What is available to a celebrity or Saudi prince will never be available to you or any other American you ever meet.
Generic Comments like these are really tiresome. One of my extended family member on medicare got BAT therapy [1] after all other options were exhausted. This is cutting edge therapy thats not available in other parts of the world where you are out of luck when all SOC options are exhausted.
If you get advanced prostate cancer in USA you get something called 'triplet therapy' [2] which most parts of world like NHS, canada don't get this despite improved outcomes.
Killing people is bad is not a feeling. I'm sure you can find some rational logic to justify it, but that doesn't make it ok, it just makes you feel less bad about it.
All your philosophy and shallow responses like "not true" will go out the window in a second . You will understand what quality means when your family cannot have that life saving drug that's been available in USA for years or has to die early from cancer because they couldn't get radiation in time.
Ofcourse any troll can pretend on the internet that they will sacrifice their child to cancer wait times because their healthcare system is objectively better .
Stop strawmanning. I already acknowledged Canada's system needs to be better.
Waitlists can be solved. A system that is fundamentally discriminatory can't.
I'm glad you got the care you needed, but in order for you to get that care several others were discriminated against and denied care. That's a failure of the system. No matter how good the care you got was, the system failed.
i mentioned characteristics of each system that are superior to other. A perfect system would be the best of both. I have family in UK that travels to india to get lutetium 177 ( a prostate cancer drug) privately because it has not been approved in NHS. A FDA approved drug that's been SOC for PC in USA for past 3+ years( even to medicare, not just saudi princes like someone else suggested). USA subsidies rest of the world by paying for drug research and getting first dibs in return.
You are responding with childish troll responses like "not true" "can be solved" and feel no need to justify with any logic or stats. I regret engaging with you in good faith (shouldve checked your post history).
I don't even know what you're trying to say. The US system is to let poor people die and medium class people go bankrupt. There is no argument you can make that will redeem that. Yes, Canada's healthcare system has problems, but it's not fundamentally flawed.
A key problem in Sweden -- besides the weird interaction of privatization and legacy over-regulation -- is that the current inflation and rising interest rates break the social contract: a relatively even salary distribution allowed many people to have a solid middle-class life style, recently albeit with never-ending mortgages. Now, the interest rates are too high for these mortgages to be even superficially sustainable, people have less money at hand to pay for them, and there is no political will to relief the working and middle class, which means many will slide down the social ladder. As an immigrant living in Sweden I fear that the country will soon be pretty unattractive to live in for most 'internationals' who have a choice.
Modestly high interest rates are the only way to break the growth of income inequality fueled by low interest rates.
There are other factors boosting real estate prices -- more people desiring to live alone, ease of renting an unused property via Airbnb, people living longer, massive wealth generation via stock markets -- but a low-rate environment offers existing wealth much more leverage to grow.
With mortgages paying down only the interest doesn't this mean people can become chained to the property? Unable to sell due to the value drop and having to own money to the bank after selling?
Negative equity is going to become a real problem for a lot of people who purchased in booming markets over the last few years.
As far as I'm aware, most places are 'non-recourse'. Some people might say "if you can carry on making the payments you'll be fine". This isn't true though. Not being able to move city for a job, being unable to upgrade to a larger place to start a family, or feeling financial pressure to stay in an unhealthy relationship are all very real potential problems.
This is a conspiracy theory about a global suit-and-tie version of TED Talks whose members consistently underperform the S&P 500. The World Economic Forum sounds important, like the IMF is, but it's nothing at all like that. It's a convention, in the ComicCon sense, that happens to be frequented by high-status people, because high-status people go where other high-status people go.
Ironically, talking about them as if they're engineering the future of Europe is probably the only thing anybody can possibly do to give them any kind of impact.
The solution to housing affordability is to build more housing. It's not complicated. But people who own housing today have a vested interest in preventing new housing development.
Comparing WEF specifically to ComicCon, like it's a harmless goofy diversion, is deceptively dismissive, and surely not an accident on your part.
At the very least you could compare it to an industry trade show, like an annual convention of trial attorneys or of insurance adjusters, which is a key vector for introducing and spreading new concepts and ideas in those industries.
That’s a good analogy. But it misses an important component; Every one of those convention attendees is fiercely competitive with each other. Some are even in a state of war with others. They all have different races, religions, belief systems and they all face drastically different domestic challenges.
So yeah, while they may all work in the same industry (so to speak) they are hardly likely to be working together towards some secret nefarious common goal.
Not to say that you were implying that, but many do.
Anyways, I really like the trade show metaphor.
This is a common way people use to rationalise it. But how do you think decisions are made when there is group of people where each one has a part to play to execute a policy? The word you are looking for is a meeting. People meet, discuss, share concerns and agree plan. At this level, this is not something you can do over a Zoom call as you don't know who may be in the room and there are other security risks to consider.
So they organise ComicCon, in a semi-open fashion. After all, what pleb like me and you can do about it?
Even if you write online, like I do, you can see I am getting dismissed, often ridiculed and often ad hominem follow as well.
They can totally do it and there is nothing people can do about it, so they don't even have to hide that much.
One way you can tell it's a conspiracy theory is that people talk about the WEF, which has no power other than arranging the name tags on the lunch tables at the gatherings, rather than the actual policy makers making decisions.
Try a thought experiment: contravene the will of the World Economic Forum. What happens next? You don't get to go next year? Statistically, that means your company performance will significantly improve!
> no power other than arranging the name tags on the lunch tables
The WEF itself would starkly disagree.
For more than 50 years, the Forum has engaged global Partners to drive significant impact – creating historic initiatives, industry breakthroughs, economic solutions and tens of thousands of projects and collaborations – improving the state of the world
That’s not what “power” means. They don’t have the power to force anything to happen outside their little get together.
The only “power” they have is limited to what participants can or can’t do while attending. Such as: they have the power to require attendees wear their name tags as a condition for attending.
(Not sure if that’s actually a thing; it’s merely illustrative)
If you only think power = force, you don't understand how real power is wielded. You're absolutely correct, WEF will not jail you if you do something its members don't like. If you assume that means it doesn't have any power other than enforcing name tag rules, you're naive.
Can you give an example where they have wielded this power? That is, can you give a single, solitary example where the WEF has implemented something that goes against the wishes of the electorate somewhere? Anything?
I don't think you'll find a single person, including hardcore climate deniers, (let alone an entire "electorate") that would endorse 1000+ private jets all heading to the same event. Why not hold the conference over Zoom?
That argument doesn't make sense. It is like saying that the policies Bharatiya Janata Party are a conspiracy theory because the party is basically just a big social club, and upsetting a few key members of the BJP executive doesn't imply anything. It doesn't, but then later in unrelated news a billion Indians might start making life difficult for our hypothetical upsetter at the direction of the Indian parliament.
The social club is convened for the purpose of high status people deciding how to influence the direction of the World Economy. It isn't a literature club. Their consensus opinions and the voices in the room matter a lot.
> .. people talk about the WEF ... rather than the actual policy makers
The names aren't a mystery. Klaus Schwab organises the thing. Lists of the politicians and businessmen are published. It is easier to say WEF than to say "9 of the 10 wealthiest people except Adani". Especially since Adani still attends some of the meetups.
The WEF is if anything less than a social club. It's a series of social events. It's nothing. The only potential energy it has at all is people imputing it power on threads about how it's the secret architect of the global economy. That is not something you can say about the BJP, which has real power.
So say someone walks in and argues that the BJP has no power other than adding a tag to names in an election, and we should rather talk about the actual policy makers making decisions? Seem like a fair argument to you for why the BJP is not a real political entity?
Because that misses the points just as much as it does in describing the WEF. There is coordination going on beyond the official powers of the organisation. The organisation exists to coordinate political action!
> They can totally do it and there is nothing people can do about it, so they don't even have to hide that much.
All the "theories" I've seen conveniently forget about China & India - the world's largest population by a long shot. How does these conspiracy of WEF impact them?
Until I see something that doesn't have a "me" complex as the main reasoning I'm going to dismiss it.
It's quite simple. There are multiple conspiracies and they ally with each other but those bonds are fluid and shifting.
To give two examples relating to China and India here was a thread very recently that mentioned how the Mexican cartels are making inroads in the US, succesfully corrupting some police union and that cartel was also in cahoots with the chinese as thats where they were sourcing their fentanyl from.
There is also the Indian Brahmin conspiracy where they favor each other over other castes even abroad.
Both of these are real and established. But it's also clear that neither of them are all-powerful.
In those 2 examples, they have nothing to do with WEF's goal as far as I can tell.
In fact, Indian Brahmin would seem to contradict with WEF's supposed goals.
wrt Mexican cartels, I'm not sure how that fits into the original narrative of WEF - do Mexican cartels work for the WEF? I've never heard this theory before.
I don't see why any of the groups mentioned would submit themselves to endgoals WEF is supposedly aiming for. I'm skeptical why they would.
> its not even trying to hide any of this, you can still find it on the web
> this was the goal of Lenin and Trotsky - complete destruction of the idea of the individual person
You're right UN Agenda 21 _is_ available on the web. Have you actually read it - or have you only read opinions on it?
I have read it and I think you're taking a VERY big leap of faith to connect the dots this way.
If they're trying to destroy the idea of the individual person, what is the end goal? ie. 2023 you say they're going to destroy the idea of the individual person. 2030 they succeed. 2035 ?????
Not sure about the main story about the article. However, construction on that Ursvik/Rinkby construction site has been very slow since long before the current crisis. I was biking through the neighboring bridge of the one mentioned here (that is about 100m down the road, so much about that new bridge alone enabling crime) for about 8 month and while my way through changed a few times, progress was very slow. (Not that any of the many many construction projects in Stockholm has been fast). What the article misses is that the Swedish Krona has lost more than 10% compared to the Euro over the last year and that, while theoretically making exports more valuable, increase inflation for all import products. Which for me as an immigrant is the main economic flaw in this country: it should have adopted the Euro like Finnland or at least locked the exchange rate like Denmark. But no, false national pride has now made the entire economic down-turn even harder.
(One should also note that mortage rate here in Sweden are still surprisingly low. My 3 month fixed rate right now is 3.65% of which I get back 30% via taxes. Hence I am effectivly borrowing at 2.5%)
> But no, false national pride has now made the entire economic down-turn even harder.
Or it's more nuanced than that and there are actual benefits (as well as downsides) to having your own currency. It's like Covid. When it went well everybody was cheering and saying how we Swedes were geniuses. When it flipped, we were suckers. Maybe, it's more complex and actually quite a lot about luck and other factors.
Another example. Few have historically thought ill of Sweden's long (now gone) tradition of being neutral. One thing that makes it very difficult to be neutral is having a currency that you only control a few percent of.
The main problem is the terrible rent control system - with a lucky few getting rent-controlled first-hand contracts, and everyone else facing a cut-throat almost completely unregulated market of sub-letting.
Very true. I wanted to buy an investment property in Sweden, and rent it out while waiting for prices to go back up in a few years... but learned that this is not a thing here! If you want to rent out, you need permission of your building association, which normally won't give it... or you can buy a "detached house" (no association) which is usually much more expensive, but then you must deal with renters and find them yourself, as the real estate agents , apparently, are not allowed to handle that. WTF?! Makes me wonder how the heck prices got so bloody high in the big cities when investing in property is virtually impossible.
This is probably why there is a lack of construction then. In my city (small European capital) most new properties are marketed as investments - with the idea you buy and after a few years sell for more than you paid or rent it covering the mortgage. The real estate market here is still not amazing for the lowest earners, but for anyone even remotely middle class they are doing ok. On the supply side the number of properties is growing at a consistent rate.
The biggest issue here is the total mortgage interest you pay is already 5% and EURIBOR is set to continue growing (mortgage interest is not fixed, it's recalculated every 6 months). For a lot of apartments in the city centre, the rental price is less than the equivalent mortgage payments if you were to buy today. A crash is likely coming, and the first thing that will be cut is new construction.
However most people want apartments in the city... Last year I moved 20 minutes drive / 40 mins by bus into the suburbs and bought a 140sqm house. The price I paid was less than a new 50sqm apartment would cost anywhere close to the main parts of the city.
I don't mind the control on BRFs stopping absentee landlords - as it helps to keep the prices for residents reasonable.
But the rent-controlled first hand contracts system is ridiculous - that needs to be abolished to have a true market on direct rentals - so all residents could rent directly from the housing companies without landlord middlemen.
The Netherlands has a variation of this for newly built properties. The prices for new properties are controlled, but the prices for second hand properties are not. If you win the lottery, you get to buy a newly built house for like €250k, which will them immediately jump in price to €450k, because that’s the price you can now sell it for.
If it's really a fair lottery, seems a better way to distribute a public resource (land) than rich people buying all the land and getting even richer from it.
It’s certainly better than nothing, but it kind of disincentivices people from building a ton of houses when they know they can get only half price from them.
I'm not sure, I live in a rent controller apartment and it certainly is great for the many people in my apartment who work in the city but could never pay the rents.
Thankfully me and my girlfriend can afford and we're therefore planning to buy and lose our contract, but to be honest it probably going to go to someone who needs it. Because owning your own place, being able to modify it to your liking and having people that live there take care for it just makes it much better to own instead (in my opinion).
> I'm not sure, I live in a rent controller apartment and it certainly is great for the many people in my apartment who work in the city but could never pay the rents.
That's kind of like saying "What's so bad about zoning restrictions? I own a house and it's not affecting me at all!". Of course it's great for you and other people who have a rent controlled unit. The OP explicitly acknowledges this. The issue is for everyone else who doesn't have a rent controlled unit.
By the same token, op claimed rent control “never” works. But some places implement a sort of rent control that applies to all rental housing not just some. For instance, in B.C. rents are only allowed to be raised each year by a fixed percentage (calculated annually based on inflation I believe).
It’s not perfect by any stretch but all renters across the province do benefit equally.
That's the problem, the renters benefit against everyone else who wants to become a renter, or anyone else that wants to increase supply.
If everyone was a renter and there were no barriers to getting a new lease in a new city - rent control would be absolutely fine - because it wouldnt do anything at all.
If somethings only beneficial if is benign, it sounds more like cancer than welfare.
Why is that? You've got to ask yourself this question, why would this happen? Because if you don't address the cause, you've got a "law of conservation of problems" and you just shift your problems from one place to another. Rent control doesn't solve problems, it moves problems to another part of the system, in this case, a housing system.
So what is the core problem? The core problem is that there aren't enough dwellings in the city for everybody that needs to be there. If there were they wouldn't be so expensive. So figure out what you need to do to build more dwellings.
Of course it doesn't. The only way to bring down prices is to build more supply than the demand, but for some reason this elephant in the room is always ignored because always a million reasons come up against it, mostly being just NIMBYsm in disguise.
Keeping a limited supply artificially price capped through regulations, sounds good at first, and will most likely be popular with clueless voters, but it will lead to shortages down the road and only the lucky few with money or connections will be able to afford.
We had that in communism, except ironically, not with housing but with food and goods. Now the west has the opposite problem, everyone has plenty of food and iPhones, but no housing. Have Swedes never learned about this and the functioning of supply/demand in their excellent school system?
> but for some reason that route is never explored.
The reason you are looking for is called corruption.
There is a very strong lobby of landlords and the rich treating residential housing as a store of value. It offers better returns than keeping money in the bank and it is safer, especially if you are from a country where your assets could be in danger - it's much harder for foreign states to take control of the property, sell it and recover the monies.
Here in the UK we have the same problem. Good percentage of the ruling party (and opposition) are landlords, there is a ton of foreign money coming in buying up properties left and right and they don't even care if they are rented out, because empty property gives good enough return. We even have banks start to move in this business as well.
It has gone completely mad.
But since big money is all over it and our security services are not interested in looking into it, nothing is going to change it will only get worse.
> The reason you are looking for is called corruption.
It could just be democracy. Homeowners are an important vote bank and they generally want house prices to rise. A government that substantially increased housing supply would cause house prices to drop, which would make homeowners unhappy.
I try to remind people in the US that there’s exactly one constituency that wants affordable houses.
People who don’t have houses yet.
Everybody else wants housing to continue to be a growth investment, and thus increasingly unaffordable. Developers want to make & sell more expensive things. Lenders want to make more & bigger loans. Existing owners want the value of their most valuable asset to go “up & to the right”.
That’s a very big hurdle to overcome politically. Even worse in the US where real estate investments are a central pillar of the broader economy, and if the “growth investment” patina of it starts to fade, then a cascading catastrophe will likely follow. The situation might be untenable as prices keep going up, but there are so many incentives working against any kind of intervention, that I never expect one to occur.
I agree with the generalisation, but as a homeowner in another Western country, I'm unsettled by the "up & to the right": creates a less affordable environment for my children, and leads to a less stable place to live. I'd guess you generally get a safer community with more people invested in it and fewer people in desperate situations.
Further, affordable housing (as in, literally affordable, and not under some means-tested scheme) means more opportunities for me to buy further properties.
If they want to maximize the sale price of their condo? Yes. They’ll just have to relocate to a different housing market to buy that mansion.
You just described every Californian who upsized by moving out of state. They definitely wanted their condo, bungalow, or shack to get top dollar in their market.
There is no democracy if most parties have the same policies regarding this and the weaker parties can be easily influenced to drop anything against the status quo.
I wonder why the rich and those in charge of regulating and steering policy think it will not end bad for them too when masses could not afford the housing on the highly inflated prices fuelled by passive money drawn out of economy into "investment" (more like sleeping) properties, hence crashing housing prices all around making them loose a lot. And that all that living cost hikes will not exacerbate things further accelerating this crash as people need to spend sooo much on housing less remains there for the functional parts of the economy? They hope they die before this comes or what?! They will not be in charge and could sip gin and tonic silently in a big warm garden somewhere before this happens? But what about their children and their other young family members? What will they do with properties woth nothing in a dissolving society where it will not be good or perhaps not even safe living due to unrest of the poor? A frequently repeting worry in articles and analysis here and there is the gigantic wealth accumulated for few stucked away suffocating the rest of the society and raising desperation yet what I can see people seem to mumble "it's ok so far, it's ok so far" to themselves while falling alongside a high rise building. Do they hope for a soft landing with this behaviour? They hope that printing cash in increased speed pumped into even more passive wealth here and there through the sliding middle and lower classes will last forever?
The solution for this will be CBDC - electronic programmable money and social credit score. The class of the ultra rich that has developed and controls the governments will use the poor as means of production - since they already own most of the economy, there is no longer any need for markets in the traditional sense, that we know.
At one point if you have 100 billion, it doesn't matter if you have 101 or 200. The capitalism has reached its end and the rich are preparing us for the so called fourth industrial revolution.
It did not work in the history of isolated submissive societies, it will not work in the period of highly interacting and highly conscious global societies.
The situation in the UK and in Sweden appears to be very different, though. Sweden's rent control was certainly welcomed as pro-tenant policy, except (as noted by GP) has led to a black/secondary market of sub-letting and selling existing rent-controlled contracts at enormous prices, while keeping economical incentives for new construction low. That's really basic economic literacy and even suggested by OECD to the Swedish government. Of course, that doesn't stop eg Berlin leftist parties to suggest rent controls (read: to buy votes).
You got the communist part wrong. If you are born in 1989 as your name suggests, I see why you got it wrong, like that entire generation and the generations after that, but it does not makes it right. Food shortage in Romania had a very different cause.
Misguided handout-seeking poor are not stopping construction. Rent control doesn't solve the problem, but it doesn't cause the problem either.
> NIMBYsm in disguise
Yes, this is the real problem: the same capitalist incentive structure that pulls forward the future returns of a new housing investment also pulls forward the consequences of future supply normalization onto current owners. Capitalism also guarantees that these owners are the ones with power. It gives them the means and the motive to torpedo new development. So they do.
Capitalism causes NIMBYism. Which is the real problem.
We agree that suppressed supply is the problem. You think the suppression is caused by clueless and misguided poor people. I think the suppression is caused by clued-in rich people pursuing enormous financial malincentives.
Do you disagree that the malincentives exist? Or do you think that clueless poor people are a more effective political bloc than clued-in rich people pursuing enormous financial malincentives?
You are still missing the point, rent controls restrict supply and even worse mobility they make the market far less efficient and more expensive for the majority of players under pretty much any rent control system.
>rent controls restrict supply and even worse mobility
Exactly this. People love having rent control until they want to change apartment to upsize, downsize or move, and then realize they can't because the market is FUBAR.
>Rent control doesn't solve the problem, but it doesn't cause the problem either.
It causes the problem by diminishing the returns for new construction. That in turn disincentivizes people willing to fight through the bureaucracy to get new construction approved.
>Capitalism also guarantees that these owners are the ones with power. It gives them the means and the motive to torpedo new development. So they do.
I'd be sympathetic to this if all the home owning NIMBYs are funding super-PACs or lobbyists to "torpedo new development", but they're not. They're just people showing up to local government meetings in their spare time.
Presidents don't make zoning decisions. Next time you attend a zoning meeting, take a good look at the people who are most passionately creating friction (or their power base, if they are outsiders). You will find a bunch of property owners looking after their property values.
>Next time you attend a zoning meeting, take a good look at the people who are most passionately creating friction (or their power base, if they are outsiders). You will find a bunch of property owners looking after their property values.
That's... exactly what I was arguing for? In the subsequent sentence:
>They're just people showing up to local government meetings in their spare time.
My point is that these people are directly motivated by capitalist incentives.
> spare time
No, not spare. Stopping new construction makes them money, sometimes a lot of money. They are expecting a large, dollar-denominated (or Krona-denominated) return on their investment of time, paid for by future renters and buyers who will not have the additional options they are so diligently trying to torpedo.
> My point is that these people are directly motivated by capitalist incentives.
NIMBYism is driven by status incentives. Purely capitalist would be to rip down your house and put apartments on it. Even if your neighbours do that, then suddenly your own property value goes up. The price of a square foot of land in NY is high for a reason - density drives up land values (that’s a large part of why developers develop!)
I don’t want apartments next door to me because I don’t want apartments next to me. Nothing to do with some sort of valuation calculation.
Yes it’s true it didn’t work, and as someone who grew up in Stockholm I used to be very sour about the situation, still am to some extent. However, it’s worth pointing out that the transformation of rentals into condos (and a couple of other deregulation efforts) did lubricate the market, but only to a limited degree, and now we instead have these massive “investments” where the rest of the economy is held hostage due to everyone having huge loans. In short, there are massive red flag issues in all market forms, in a place like Stockholm.
Which leads me to this crazy idea that what if the problem is instead a… lack of total amount of housing? Sweden is incredibly slow, expensive and bureaucratic to build new housing in, yet we’re urbanizing just as much as anyone else. To me, the government should have a clear policy goal of having housing supply keep up with population growth, at the very least. Now, I care less about HOW (everyone can argue about that until eternity) and more about just ensuring it happens, and not lagging behind decades. If politicians drag their feet, it should automatically switch over to dropping all non-essential regulations (that would put a blowtorch to their asses).
In either case, I’m not in Sweden atm and I don’t feel particularly hyped about the coerced gambling I’d have to participate in if I were to settle there again permanently. It’s a shame, because it really destroys our ability to attract international talent in the startup world and so on.
It should not be a major surprise that the gap between the haves and the have-nots will widen if you have a large compareable influx of have-nots, or to speak more precisely, an influx of new citizens with low social-economic status compared to those who already were ctiziens. In a very dispassionate perspective, it is just plain math.
It is going to take time to return back to the same levels as before.
Your source doesn't seem accurate. Swedish immigration has been decreasing for the last 7 years, it is now back at the same level as 2012 but it was increasing every year since the mid 90s before that at was at its peak in 2016.
I usually find that “obvious” reasoning is very often wrong, especially when politically contentious.
You could look at countries with higher rates of immigration (say my own country New Zealand at 30% immigrants, compared against Sweden with 20%, although NZ immigrants are often middle-class from culturally compatible English countries). Switzerland has 30% immigrants. https://wikipedia.org/wiki/List_of_sovereign_states_and_depe...
You can sometimes find good articles with facts that help define the point you are trying to make.
It not about the rate of immigration. If you immigrate a lot of high social economic status people then the amount of low social economic status citizen does not increase.
At the start of wars (or rather, the start of instability in a region) this actually occurs. The people who leave first is those with economical means to leave early, and those with higher education is generally those that tend to have an easier time to relocate successfully.
A other way to see this in economic terms is to look at the cities which took in a lot of immigrants. The first "wave" of immigrants did not increase the social costs that society had. It was only in the later waves that local budgets started to become strained from immigration and where the average tax revenue increase from immigration became significant less than the average increased costs per additional immigrant. An economic paper around 2017 tried and sadly failed to explain this in Swedish news, as it basically got labeled as being both anti and pro immigration.
For a very long time the majority of immigration to Sweden was from nearby Scandinavian countries. There is a lot of people moving between the borders simply because they got family on both sides, or get a job opportunity that happens to be on one side of a line on a map and well within driving distance.
People in Sweden however don't generally think of those people as immigrants, and their social economic status is average or maybe even a bit higher than average. Sweden also has about equal amount of swedes doing the same so the end result on the haves and the have-nots is basically static for that form of immigration.
Naturally, when people discuss immigration and immigration politics, immigration and emigration between Scandinavian countries are not part of the discussion and are generally exempted through specific treaties between the countries.
In New Zealand a lot of immigrants get residency via the skilled migrant category. They are generally well educated, well informed, and often reasonable well off. The skilled migrant category chooses those attributes, including a category if you are just wealthy enough! Current scoring system I think: https://rnz-ressh.cloudinary.com/image/upload/s--mt6iKVzS--/...
Also due to the number of applicants, I believe there is definitely a filter for the more capable immigrants. They might be poor, but they work hard and usually show us locals up (at least that is what I have seen). Many immigrants might not integrate well, but their kids are usually totally kiwi New Zealanders.
The same thing occurs for tradies going from NZ to the UK: it tends to be the focused hard working and highly skilled that emigrate from New Zealand.
>if you have a large compareable influx of have-nots
I'm not in Sweden but why are we always pointing the finger at the poor immigrants? Do you think there are no native Swedes being fucked by this real estate market?
Granted, having an open borders migration policy is not a good idea when you have a housing shortage. If you're struggling to provide for the locals, then the newcomers will have it even worse and won't like it, leading to more inequality, social divide, unrest and increased crime.
But blaming immigrants is always a cheap shot politicians take to blame the demographic without voting rights for the problems they themselves are responsible for. "It's not us who screwed you over with inflation and housing while taking your taxes, it's the immigrants who took your job and house".
> I'm not in Sweden but why are we always pointing the finger at the poor immigrants?
It's not about pointing fingers but rather that people with one foreign born parent have increased from roughly 16% to over 40% in the working age population during the last 30 years. When you become half of the population, you'll have a major impact on all statistics. People outside of Sweden most likely aren't aware and might draw rushed conclusion if they don't know why different stats are currently changing rapidly in all areas.
Immigration is an entirely separate issue. Conflating it with the fact that hard working Swedes can’t secure good housing only serves to make those Swedes, who are already pissed off, more pissed off. It’s bringing the masses closer to taking to the streets with calls for Madame La Guillotine.
Housing needs to be fixed asap in Sweden. (And in most of the western world if we’re being honest.)
> Immigration is an entirely separate issue. Conflating it with the fact that hard working Swedes can’t secure good housing
How do you figure the two are unrelated? The native poor are competing with an influx of poor immigrants for the same pool of housing. I find it hard to understand how those same poor natives would be worse off in terms of housing prospects if the immigrants never showed up, all things being equal. Immigration is never 100% of the reason behind housing issues, but it’s more significant than most people want to admit.
> Immigration is never 100% of the reason behind housing issues, but it’s more significant than most people want to admit.
Considering how the Swedish government tried to hide the crime wave that correlated with it's open doors immigration policy [0] [1] [2], I wouldn't be surprised if they were fully aware of the impact but were trying to withhold that information as well.
Surprised no one on here mentioned estate taxes - Sweden repealed estate taxes in 2005 [0], and as such Sweden has one of the highest wealth (not income) Ginis in the world [1]. Other notable developed countries in the top of the wealth list are Netherlands (€1.3mil exemption from inheritance tax if planned correctly [2]) and the US (no inheritance tax below $12mil [3]). In essence, you are allowing the top 10% to gobble up all the value from the rest of society, and allowing old money to continue perpetuating itself.
Sweden abolished inheritance taxes because the cost of enforcing the tax was greater than the taxes raised, and was passed by a left-wing coalition. At the time, it was considered a success of social democracy to not need inheritance taxes (and in fact, everyone, including the law, referred to dödsskatten - the death tax).
20 years isn’t ready enough time for wealth to consolidate like that via inheritance alone, and similar countries (like Norway and Germany) are seeing similarly rapid raises in their Gini Indexes for wealth, without chances to their inheritance tax systems. Something is broken in Western economies, but unfortunately, inheritance taxes in Sweden aren’t the problem.
"The question we set out to answer in this study is how the Swedish personal wealth distribution has evolved since 2007. This year, a right-wing party alliance was elected after a long period of Social Democratic rule and among its first reforms was to repeal the wealth tax ... Our main result concerning wealth inequality in Sweden is that it appears to have increased since 2007. The recorded rise in the Gini coefficient and top wealth shares is about ten percent"
Note that the study above only analyzed wealth in Sweden over the time period of 2007 (when the wealth tax was repealed, not 2005 as I erroneously wrote in my earlier comment) and 2012.
Germany and Norway don't share a comparable Wealth Gini (like I said above, it's WEALTH Gini, not Income Gini).
While absolute wealth inequality did grow in both NO and DE since 2008, SE's Wealth Concentration also at a much higher starting position than either NO and SE in 2008
And finally, roughly the same old money families/nobility that existed in Sweden c. 1700 continue to have a roughly similar impact in Sweden c. 2012 from a social mobility standpoint.
Good point. Based on this paper from HHS back in 2000, the Wealth Gini in Sweden in 2000 was around 0.790 [0]. Btw this wealth Gini disparity between the 2000 and 2008 numbers is because the NBER's 2008 model used PPP I believe while HHS and Credit Suisse used nominal.
That said, even in 2000 there was a recognition that there is an intergenerational wealth transfer competent via foundations and families.
And clearly, the big picture takeaway that has been open knowledge in the economics world is that Sweden has consistently had extremely uneven asset ownership - at a level comparable to the United States and Netherlands, two other first world countries dealing with extreme amounts of instability due to asset ownership inequality. And at the end of the day, assets matter more than income.
I don't think this is a housing/real estate story as much as it is a story of immigration impacts. Rinkeby has about 20k residents--and ~90% of them are immigrants (1st or second generation). Nearly all of those arrived in utter poverty, and arrived in a relatively short period of time.
Understandably, large amounts of immigration is coupled with extreme poverty and escalation of crime, rioting, etc. But there are additional implications of terrorist cell links, and more.
At 35, the RE Bubble is the single thing that makes me have deep regrets about trying to be successful in startups for the past 15 years.
I've made a small exit, but by that point interest rates were already rising and the amount for a down payment got so large that buying a house in a way that makes financial sense still is out of reach.
Contrasting that with my friends who simply got a corporate job and bought something with next to no down payment and <2% interest rate, they are nearly done paying down their houses or are still in a low fixed rate payment scheme until they are done for another 7 years.
They had their holidays, I had my 60-80hr "responsible for everything" weeks. I'm pretty sure
I am not alone in this, judging by the amount of people I know in tech who adopted to become "digital nomads", living with their family in what I consider glorified trailerparks and home-schooling their kids.
Real estate can either be a lucrative investment or it can be affordable.
Why are people continuously acting shocked when they realize it can't be both?
And why are elected politicians everywhere continuously shrugging their shoulders as if the housing market is somethin completely outside of their control.
> And why are elected politicians everywhere continuously shrugging their shoulders as if the housing market is somethin completely outside of their control.
This isn't what's happening. Any politician that promised to lower house prices would be demolished by middle class people who
a) think that additional wealth from rising house prices is their just reward for being wealthy enough to own a house, and
b) will be in deep shit on their mortgage if house prices go down, because mortgages are just highly leveraged investments.
edit: whenever house prices seem like they might go down, governments inject huge amounts of tax money into the housing market. The people that tell us in the US that cancelling student debt is a subsidy to the rich will never fail to send direct subsidy to homeowners and prospective homeowners. In that way, government interventions into the housing market only happen as a bubble is popping, and their intention is to maintain bubble pricing.
We somehow have this belief that the "market" is some immutable law of nature like say, gravity. The "market" is based on behaviour, albeit behaviour that is heavily manipulated and controlled (somewhat invisibly - complicity or otherwise - to, seemingly, most people). We acquiesce and, when life is good for us, ignore the fact that we have to the power to change our behaviour and our beliefs and values and, thus, the market. But that will take hard work over time and much sacrifice. And so it goes ...
Market theory is like lambda calculus or turning machines - it's a framework for describing/framing arbitrary emergent behavior whose power comes from its expressiveness.
Even without (foreign) investment, it s a trap. Sweden has 63% homeownership rate and these people tend to like regulations that make their homes go up perpetually, and they vote accordingly. Happens everywhere in europe.
Best solution is deregulation. Housing is a primary need of humans, and we have been building our houses for cheap for most of history except the past 2-3 decades
Suppose a large, publicly listed real estate investment trust (REIT) owned a diversified portfolio of housing across the country and operated it all as rental housing. Tenants could buy shares in the REIT and thereby invest not only in their own house, but all the others as well. Less risk and more flexible than home ownership.
The downside for tenants is not being able to renovate. The upside is not being responsible for maintenance.
Imagine the state did this instead using taxes and eminent domain. Congrats, you’ve invented Vienna, one of the most beautiful cities in the entire world.
I'm not familiar with this program. Could you give me a few keywords to search for, so I can learn about it?
> using taxes
Is it a tax credit? The key is allowing tenants to invest and get dividends from the portfolio, which they can then use to pay for rent (or whatever they like).
It's funny that it was sold as "affordability". Is it really more affordable to have a mortgage that lasts twice as long? Can we really consider interest only to be home ownership? You don't own that home, the banks do, Maverick!
If you invest your money on anything that gives , say, 5% yearly returns on your money, instead of paying off your mortgage, which used to be at less than 2% (but is not getting beyone 4%), you're just better off.
Say you start with a 10,000 mortgage, and your payment per year is 500, not including interest. By the end of the year, you'll have a 9,500 mortgage left.
If you just invested the 500 and only paid interest on the mortgage (which was common in Sweden until a few years ago), you'll still have a 10,000 mortgage, but you have 525 in your pocket. You could now go and pay off some mortgage, resulting in you having now only 9,475 left (i.e. you're better off)... but why would you do that? Just keep investing that money!
Risk, I think. For most people this is a higher risk strategy long term than just "paying the mortgage". Depending on your life stage and overall position it can make sense but it's not for everyone.
A lot of the talk about how great mortgages were has the benefit of hindsight. Yes, if you have steady income, it would have been better to get a larger mortgage a couple years ago when money was cheaper (assuming you bought in an area that appreciates, assuming maintenance isn't crazy, assuming you aren't overly leveraged). You have to make several qualifying statements.
It's literally lower risk to invest if your average investment return rate is lower than your mortgage rate. It's likely more of a psychological opposition, where people want to feel more secure with a fully paid off mortgage, even if it does lose them potentially millions in the course of their lifetime.
It's impossible to average 5% return risk-free (if mortgage interest is 2% or whatever). Saying "as long as your average return is higher than your mortgage interest then it's lower risk" is a ridiculous statement, the entire reason you're getting a better return is because you're taking on more risk.
The general form seems to be, if you were born after 1990, then you are entirely locked out of the asset class that drives wealth, which also happens to be a requirement for existence.
Nothing changes because the governments are largely composed of people for whom this does not apply.
It’s not complicated, housing is being used as an investment vehicle for narcissistic speculators to make bank, while clueless homeowner assholes are desperately clinging to their mortgages.
This is a constant across the western world, and it’s not gonna change until middle class families end up living on the street.
The sooner this psychotic, braindead and hateful housing market collapses, the better.
I feel people act naively on these discussions because they are afraid of offending others, but it is common sense that a ~0.3%/year influx of immigrants with low resources over 50 years has contributed in some way to economic disparity in Sweden. Nobody is saying that immigrants are having a negative effect here, it just means that newcomers have an uphill battle versus established families that have been building wealth for decades.
Just to clarify your point, it means that the opportunity for people who were the offspring of "historic" Swedish citizens and didn't not already own or inherit substantial wealth (most people) was subtracted due to the large movements of populations.
As a result, I don't see why someone would support such a policy.
Also not to forget globalization moving populations inside countries. Which might be key effect. Globalization caused many industries to die off and basically those communities now have housing stock that is worth very little or is worthless. As the jobs stopped being there and new jobs have been created in other places which do not have the supply of new housing.
Not Swedish but I assume the ones who run the real estate interest groups are also hand in hand with those who own mainstream media so they have no interest to dig up dirt on them and will turn a blind eye.
I assume Germans initially also asked themselves why isn't the Wirecard fraud in the local media and only reports on it come from the US.
Influential people in a country tend to scratch each other's backs.
Young people are upset they can't live centrally in the capital for cheap. Same story as everywhere else. Now go forth with the ritual flogging, er, downvoting.
(I live and work in the countryside of Sweden. I recommend it.)
Sure, but try dating and building social circles while living in rural areas as a single 20-30 something year old.
Of course young people want to live in dense walkable areas where it's easy to find other like minded people.
Isn't Swedish population also statistically one of the biggest sufferers of loneliness in the world and also one of the largest consumers of antidepressants? Or was that Finland? I'm not sure.
I grew up in a village in the mountains where the closest neighbors were 500m away. At age 14, just before moving, I counted half a dozen attractive females of the same age (plus minus 1 year) in the village, that means 2-3 km away but still very much in reach on foot or by bicycle.
I have most of my extended family there and there was no problem dating, marrying and having long term relations. There is a small town 15 km away with cinema, a few restaurants, hospital, the school is in the every village and a high school is 6 km away (one in the town as well), so "country side" does not mean secluded. These days I am working from home partly from there in the summer, Gigabit Internet over Fiber is dirt cheap and reliable and even Amazon Germany delivers there, it takes a week but it works.
>I grew up in a village in the mountains where the closest neighbors were 500m away. At age 14, just before moving, I counted half a dozen attractive females of the same age
You are completely moving the goalposts. Read my comment again please. I was talking about the dating market of twenty and thirty year olds, not that of school teenagers. How's the dating scene of single twenty to thirty year olds in your village?
All that demographic has moved to big cities to go to universities and become skilled professionals. What's left in villages is older people and children.
My cousin moved to Cluj (200 km away) for college, then came back and opened a small business; he has more work than qualified workers, but he is getting better with that. In the past 5 years he had 2 girlfriends and now a wife, all with college degrees and all willing to relocate. It is very true some young people are still emigrating, mostly the ones with no useful skills, doing cheap jobs in the Netherlands or Germany, but for the ones that want to stay there are opportunities even in many small cities or even villages.
If the costs of living in large cities keep rising, maybe the young will learn that the "educated, big city living" will just be a trap and wasted years for a lot of them, and will decide to for a life in their local areas instead? There's plenty of Univerisities in small, local cities as well, so it doesn't mean being condemned to becoming a chimney sweep as well.
1. Most young aren't so lucky to be born in a small developed city with good universities, jobs and high quality of life, so they can stick around their families, which is why they leave. Look at most of Southern and Eastern Europe.
2. For your idea to work we need to have companies also creating jobs in smaller cities, but the reverse is happening: most companies now exclusively move to the biggest cities where the larges worker pools already are (Berlin, London, Amsterdam, etc) creating a snowball effect. Small cities also have jobs, but they tend to be terrible, body-shop style that suck to work for.
> 1. Most young aren't so lucky to be born in a small developed city with good universities, jobs and high quality of life, so they can stick around their families, which is why they leave. Look at most of Southern and Eastern Europe.
I'm from Poland. In here, no matter where you're born, there's a city with an University within 100 km from you (and usually, it's much closer). A lot of those cities are smaller, affordable cities, with rents half that of Warsaw.
> 2. For your idea to work we need to have companies also creating jobs in smaller cities, but the reverse is happening: most companies now exclusively move to the biggest cities where the larges worker pools already are (Berlin, London, Amsterdam, etc) creating a snowball effect. Small cities also have jobs, but they tend to be terrible, body-shop style that suck to work for.
It's true if you're in tech or other highly advanced field, which tends to cluster workers in a few cities. However, most people don't work in such fields, so it's not a problem for them. I mean, if you want to work in tourism, or real estate or food production/processing, or medicine or law or architecture or countless other fields, the non-tier 1 cities have plenty of opportunities.
Maybe Poland is just one of the exceptions of doing things right. This is definitely not the case in most of Romania, and even Greece and Portugal from what I've heard. Sure you can work in tourism, but tourism wages pay complete dogshit unless you own the business.
Sure, not everyone does tech jobs, but here in Romania, the young here mostly want white collar jobs which automatically means moving to the 5 rich developed big cities of the country as those have corporate jobs with good benefits, good universities and also good schools and good healthcare facilities and good-ish infrastructure.
Living in smaller cities is pretty bad as your salaries would be much lower than the big cities but your rent not that much lower. And also now the schools suck and so do the hospitals due to the best teachers and doctors mostly wanting to live in the richer developed big cities, so having a family there is mostly out of the question.
So moving to a big city is a no brainer for the young. Almost nobody being born in a small cities will stay there as an adult. The entire country is being depopulated and either moving to western Europe or crowding in the same 5 big cities with jobs, universities, good-ish schools and good-ish infrastructure.
There are plenty of more affordable, densely walkable city areas in Sweden. Every single city in the country is built this way, from the smallest to the largest. That's not the factor.
The factor at play here is that these all these people want to have a cheap apartment in the same 10 km^2 that's designated as the cool place. When that can't happen because of physics, they claim society is breaking down.
> Isn't Swedish population also statistically one of the biggest sufferers of loneliness in the world and also one of the largest consumers of antidepressants?
No idea, but it sounds a bit like reverberations from Dwight D. Eisenhower's 1960 speech where he said that "sin, nudity, drunkenness and suicide" in Sweden were due to welfare policy excess, which then quite incorrectly caused americans to correlate Sweden with suicide and depression for many decades.
At the moment the suicide rate is higher in the US than in Sweden but we're relatively similar in this statistic.
> all these people want to have a cheap apartment in the same 10 km^2 that's designated as the cool place.
Which, incidentally, is cool because not everyone's living there ;) Don't know about Stockholm, but I guess those places are the same 19th/early 20th century quarters like in every other European city build for renting out to an upward moving middle class and popular exactly because they're meeting the representative needs of their tenants then and now.
Interesting undercurrent that the article presents: a Sweden with high immigration has a lot of the same problems as the United States. Maybe living in a utopia is only possible if you first ship away those pesky poor folks. /s
It's more todo with the interplay between a broken (regulated) rental system and a subsequent need for owning instead of renting.
One idealogical group thinks that if we have artificially low prices on rental properties, then we can have access to cheap living when we need it. But what ends up happening is that people keep these contracts (often renting them out, second hand.) So the regulation actively hinders access to cheap for-rent apartments instead.
This means that all of us have to buy instead of rent, causing a much higher demand in this market.
And the second hand for rent market is also a lot more expensive than the regulated prices to boot.
So no one can afford anything as a result. Without support from huge loans and/ or rich parents and/ or having bought and sold apartments, riding the wave up in prices.
I personally entered late so had to save tons of money and in-debt myself to afford a place. All because one idealogical side has this misguided sense that this regulation somehow exists to help _me_. Me being someone that moved to an urban area for work. Now these same people somehow feel resentment in that I own something expensive that they don't, and that this provides me access to all this printed money. As if I'm not indebted up over my head just to have a decent place to live. It's really stupid.
Only difference between Sweden and Finland is that Finland stopped all rent regulation in 1985.
I was a landlord during that era, and after few years of turmoil, most rents started go down.
Nowadays the rents are mostly costs + 40% -(32% capital gains tax) ie worse than most other investment. You only invest on housing because you expect home ownership raise on that area.
Isn't rental income treated as income tax? It is in the U.S. Since tax is on the profit only, the tax would be on that 40%, so 32% of 40% so ~10%. You are still walking away with 68% of 40%, so 30% of your rental income is profit.
It is not. It is pure capital gains tax. Actually it is worse than that, because it can be difficult to prove what your true gains are. Loan costs for example are not easily tax-deductible, you must establish a firm for that.
I gave up landlording altogether, because for many years it was not worth the hassle. Most areas in Helsinki it is more profitable to keep the apartment empty and wait for the rich Russian, who buys it at +50%. In this building third of the apartments are empty or short-time rentals of some sort.
There is no way to have affordable housing in a rich democracy, period. There are no exceptions to that. To have housing affordable, you need to either "fix" "rich" - then people will not have enough income left for housing after expenses for food, and there won't be a bidding war for properties, people's problem will be hunger - or you need to "fix" democracy, then people's desire to uphold their property values by limiting construction won't matter, and demand will be quickly and easily filled by developers by building millions of Soviet-style apartment blocks, collapsing prices.
Nothing in this world is for free. Unaffordable housing is just one of the unavoidable costs of living in a democratic country.
The land is owned by the lords. The problem is the latest generation of wealthy lords has figured out how to stay wealthy. As their wealth grows, the plight of the common person grows as well. The wealthy haven't allowed themselves to become poorer, or even relatively poorer. They've only grown their riches.
Because there is a lack of taxation on the rich, they tend to accumulate assets. They can then depreciate these assets while using their income for leverage. Ultimately every dollar the rich landlords collect is a tax on the poor.
The very concept of ownership may seem a little bit unnatural. How can one person own the dirt someone stands on. How deep down do they own it? Is it a radial ownership of the earth?
I wonder how much of it is secular. With populations weighted towards older workers demand for investment goods is high vs consumption goods where demand is low. As older workers are saving for retirement. As investment goods are not included in inflation measures like CPI. Low demand for consumption goods is causing low measures of inflation, causing central banks to keep rates low. While low interest rates and high demand for investment property is driving the value of dwellings up rapidly. I'd favour including property in CPI and increasing the deposit requirements...
I have to say I really appreciate the Japan model, where the real estate investment is looked at in two parts; the land and the building itself.
Since while I'm no socialist / communist, I think they got a point with housing is a right in that the current system is way too volatile/destructive once the cards fall.
The Japanese sought to make it less speculative, or at least make it have a deadline.
After paying $40k for a black market lease, “What was I supposed to do,” said the woman, who asked not to be identified, “live under a bridge or queue 15 years for an apartment?”
Moving to another country is always an option. If the property market is truly this awful (10 year waiting lists for affordable housing), why is the population increasing? It doesn’t add up.
What? Is this really a problem in Sweden, or is it a problem in Stockholm? (Sure, I know some places like Lund has great inflow of high income earners, very little housing, driving prices, but that’s not the norm).
Stockholm has even traditionally been relatively cheaper(relative to salaries) compared to other capitals of Europe.
> more construction - and to do so, we need deregulation, density, training and innovation.
Doesn't even need to be that complex: land value tax would do it(and solve many other issues as economists have been saying for decades). Land scarcity shifts late-stage market incentives away from building to rent seeking and speculation. LVT would fix these incentives. It is badly needed in most first world countries at this point.
One major difference between the USA and Sweden is that if you have a bank loan and can't pay it back they will take all your assets, not only those you used for security! So you will be in dept for life!
Another major difference is that education is free! And healthcare is almost free.
In the last 15 years the Swedish population has increased nearly 20% mostly by immigration. Most of the immigrants are Muslims, and are not allowed to pay interest by their religion! Thus the weird housing market.
In the last 10-15 years interest rates has dropped below zero. And property prices has gone up 5x.
Those who didn't want to spend their money in the last 15 years (the baby boomers) now want to spend their money!
As an indigenous Swede with sleeping problems I find it amusing that these posts and discussions about Sweden are happening when the time is 03:20 here, we're all asleep and can't even defend ourselves. :D
