> Workers living paycheck to paycheck (61% of the population
According to US BLS and Federal Reserve studies, only about 15% of the population necessarily lives paycheck-to-paycheck. The median US household has a ~$12,000 surplus per year after all ordinary expenses. Note that "ordinary expenses" includes car payments on a BMW, the latest iPhone, and other by-no-means-necessary expenditures, and also includes all healthcare costs.
If 61% of the US population is living paycheck-to-paycheck, it isn't because they need to. Americans have very high income surpluses compared to the rest of the developed world. 15% of the population necessarily living paycheck-to-paycheck is still a lot of people, but it implies 85% are not.
> If 61% of the US population is living paycheck-to-paycheck, it isn't because they need to.
Consumers can share blame for not living below their means, needless wealth signaling, and financial illiteracy.
But predatory entities are part of the problem, too - car dealers obscuring true costs of borrowing ("how much do you want to pay per month?"), credit card issuers jacking up rates to 37%, and real estate "investors" jacking up rents after buying mom & pop mobile homes and senior rental units knowing that tenants have nowhere else to go. Here's one example from Montana:
“I can’t tell you how many calls I got from folks that were older, like older than 55 or 60, that had lived in their same house for decades, had the same owner for decades who never raised the rent,” Huey said. “Then all of a sudden they lost their housing.”
Huey and other providers across the state have heard countless stories of homeowners turning their rental property into Air-BnBs or evicting their long-term tenants in order to house their own children in increasingly affluent communities.
Re: predatory landlords: if they are not breaking the law, are they really blameworthy? Seems like the previous landlord was naïve, or at least operating on an outdated worldview where local reputation mattered. (Hard to show up at the local Chamber or Elks or church when you are getting old folks kicked out of their homes).
How to solve… I’d like to find a model to apply in my HOA to slow or reverse the corporate takeover of my community…
> if they are not breaking the law, are they really blameworthy?
This mindset needs to die.
Yes. If you do something ostensibly immoral, it's still bad even if it's legal. It's still bad even if other people were going to do it if you didn't, anyway. It's still bad even if there's negative incentives that ultimately led to it. It's just still bad in general. If you have a reasonable decision and you choose to do a bad thing, you still chose to do it. It doesn't matter either, if a single person made this decision, or if a corporate board made this decision, or if a bunch of people in an angry mob collectively decided something.
What you can do is explain why it happened, but that doesn't mean that there is absolutely zero social responsibility to have. All that something being legal means is that it's legal. Something being legal doesn't necessarily mean it's good. Something being illegal doesn't necessarily mean it's bad.
We've conflated what we've come to expect from corporations to the standards we must hold them to. The standard that a corporation should live up to is indeed much higher and significantly more nuanced than "technically not breaking the law."
I'm not suggesting that I believe in no regulation. Regulation is clearly valuable in many cases, but I believe that it is clearly not inherently good (duh, bad regulation is everywhere) nor is it inherently the only solution to any class of problems. Believing that companies should not simply maximally exploit what is technically legal while still regulating them when they do abuse the system is possible and I'm pretty sure if we don't start thinking that way, we're even more screwed than we think we are.
Even if some corporations amass unthinkable amounts of influence and power and fundamentally escape the pressures of social responsibility through this, I still think that it's necessary to fight the learned-helplessness mindset. If absolutely nothing else, I think everyone is at least responsible for ensuring the bar doesn't drop so low as to allow this kind of thought process to remain "normal". It should always be thought of as abnormal, and as the threat to liberty and democracy that it clearly can be.
Completely concur with the notion that if something is "perfectly legal" then there is no basis for judging the bad actor poorly. There absolutely is of course as judgement in this context is a moral choice, not a legal one.
The other one I wish would die is: "It is not illegal if you don't get caught."
> We've conflated what we've come to expect from corporations to the standards we must hold them to. The standard that a corporation should live up to is indeed much higher and significantly more nuanced than "technically not breaking the law."
We shouldn't try to hold a standard that we can't or won't enforce. If we want better behaviour from corporations we need to actually make them behave better, not wring our hands when they don't do it by themselves.
> Even if some corporations amass unthinkable amounts of influence and power and fundamentally escape the pressures of social responsibility through this, I still think that it's necessary to fight the learned-helplessness mindset. If absolutely nothing else, I think everyone is at least responsible for ensuring the bar doesn't drop so low as to allow this kind of thought process to remain "normal". It should always be thought of as abnormal, and as the threat to liberty and democracy that it clearly can be.
If you think it shouldn't be normal, figure out how to make it illegal. But raging against greedy landlords/corporations/what-have-you is just its own form of learned helplessness.
Survival bias get in the way. The morality you refer to exists, it just doesn’t survive long enough to notice. So yes, you do something ostensibly immoral but legal for some advantage, that advantage allows you to economically out compete your more moral neighbor, who winds up insolvent eventually. If morality isn’t encoded in law and their is an economic advantage to being immoral but legal, then that’s what you will ultimately wind up with, because the moral actors will simply die off.
Honestly, there's nothing immoral about charging market rates.
What's immoral is preventing construction of housing to allow supply and demand to meet. What's immoral is zoning rules that allow prices to rise well above the level of what would historically have been considered affordable.
Obviously, from looking around, we cannot rely on people to just not raise prices to market levels in exchange for feeling good about themselves. We need to take action to lower the price of housing.
Housing cannot be both affordable and a good investment.
We desperately need to stop thinking of housing in terms of investment at all.
Housing is for people to live in. That's it. Any other purpose is a long-distant second to that. The fact that it has become primarily an investment product is what's causing all the pain.
Japan got burned by real estate investments in the 80s and now real estate isn't considered an investment, so housing in even Tokyo is affordable. It also helps that housing structures are considered as a deprecating asset, to be rebuilt every 30-40 years.
We must live in a different world. I’ve been reading articles for years about Tokyo house prices being a huge problem, and that young people are depressed and checking out because they see no way to climb the ladder in Tokyo. A quick Google search confirms I’m remembering correctly. Tokyo has the same real estate issues as any major western city.
Ah, the problem with that is that you can’t earn enough money, the housing prices are sane but the salaries for workers is not. But there aren’t really the same codes as the west, so you can rent something for $2-300/month. Kids can get by on low salaries they way, but buying is out of reach even. If the prices are affordable by our standards.
You can pull up either narrative in Google by searching specifically for it. Tokyo is cheap, Tokyo is expensive, etc… eg
Japan federalized zoning rules meaning cities can't arbitrarily deny housing. This allows supply and demand to meet, leaving housing approximately at the cost of construction.
I agree but speculation is usually on the basis of prices going up. If prices don't go up there's nothing to speculate on. The shrinking population only affects demand - but price is at the nexus of supply and demand. So you can achieve that by dropping demand or raising supply. The argument that demand affects price is an implicit argument that supply does too.
Housing HAS to be a good investment, not in the sense of something that beats inflation, but something which appreciates at the same rate as inflation. The whole point of a 30-year fixed mortgage is that you pay off the mortgage in your working years and then enter your retirement only having to pay the property taxes. This allows you to retire on a smaller nest egg AND pass generational wealth on to your heirs.
Uh, none of that means housing has to be an investment. The point of a mortgage is that it helps you buy a house and pay it off over time, nothing more. We don't talk about cars being an investment just because people take out 7-year auto loans.
Moreover, passing on generational wealth shouldn't be a feature we want to make easier. You don't want a to push society in the direction where generational wealth is required to live a good life.
Your first paragraph is because cars depreciate. Cars are thus the opposite of an investment, barring a few collector models which never got driven much.
Paragraph 2 reeks of "I know what to do with other people's personal property better than them." If you pay that house off and die, it's in your will and it's yours to pass on to whoever you want. We should absolutely be incentivizing that kind of responsible behavior and respect for long-term financial planning and thinking over real estate getting gobbled up by megacorps to rent out.
> Your first paragraph is because cars depreciate. Cars are thus the opposite of an investment, barring a few collector models which never got driven much.
Right, and in countries with sane planning laws the same is true of houses.
> If you pay that house off and die, it's in your will and it's yours to pass on to whoever you want. We should absolutely be incentivizing that kind of responsible behavior
Locking up as much prime real estate as possible for your family forever isn't being "responsible", it's a "fuck you, got mine" move. In places where housing is limited it should go to those who need it most, not to those who were lucky enough to have parents who were rich, or happened to buy in the right place at the right time.
Housing would depreciate too if we didn't have artificial scarcity policies designed to make it an investment. Saying that housing should be an investment because we've designed it to be an investment is circular reasoning.
Re #2: it's obvious that most people aren't the most objective when it comes to their offspring. That's why we should have policies that discourage overallocating resources to an unqualified child of a rich parent.
Finally, "personal property" is a construct of law. Something is yours because society has decided it's yours. If the laws change, and if you can't physically defend your property, then it's not really yours any more, is it?
Human rights are inherent in our existence as human beings. Or created by God if you believe in Him. They aren't "constructed by society," and this last paragraph is borderline advocating violence because you think some people have too many things.
News flash: this noble group of disinterested autocrats you think can allocate people's property better than themselves doesn't exist. They're the same biased schmucks as the rest of us are.
Housing also depreciates. We just have a lot more land appreciation, and apply high maintenance costs to our housing to counteract as much depreciation as possible (we pay down depreciation more immediately).
> Honestly, there's nothing immoral about charging market rates.
I think the debate is far more nuanced than that. Dislodging families, eliminating the ability to save for retirement, sucking up capital that could otherwise be put to economic use, etc. are all worthy of discussion without flushing it away via the term "market rates".
It's not like landlords are doing remodels and making their property more valuable. Every landlord I've ever had does just about the bare minimum. There's simply no competition. I don't know how we can have a "market rate" without anything that really looks like a market. They've lucked (or manipulated) themselves into a situation where their property value goes up while their costs stay fixed and they're using their good fortune to squeeze others.
There's a reason we use the term "rent-seeking" for businesses that want to get guaranteed income without having to improve their product. I'd certainly consider it immoral.
> What's immoral is preventing construction of housing to allow supply and demand to meet. What's immoral is zoning rules that allow prices to rise well above the level of what would historically have been considered affordable.
I don't see these as separate issues. Rising rents influence property values and vice versa. Many of these landlords are the exact people opposing new construction or rezoning.
>We need to take action to lower the price of housing.
Who's "we"? The problems you cite, zoning rules etc., are all local issues caused by the people in those places voting for leaders who maintain these anti-housing policies, because it's good for their home values. And it's not just the homeowners; the renters have a vote too, but I don't see them voting for anyone who wants to change zoning laws and increase density.
>Housing cannot be both affordable and a good investment.
True, but obviously most Americans prefer the latter. Just look at many of the comments right here: people advocating for "generational wealth" and how housing must be an investment.
The problem is Political. Municipal governments only have an obligation to the people who currently live there. They owe nothing to people who want to live there if it was more affordable. They owe a lot to the people living in the community who want to raise their property values.
"We" can fix it at a State or Federal level. The President represents everyone in the country. Including the people who live in a place and the people who want to move there from another State
That's the only way, because, as you said, municipal governments only answer to the people who live there. Here in Japan, they passed a national zoning law decades ago that prevents localities from enacting their own zoning legislation, and makes uniform (and extremely permissive) zoning across the whole country. Basically, if you own land, you can build housing there if you want, unless it's one of the uncommon heavy industrial zones. So there's no real shortage of housing; if it's profitable to build, they'll build it.
Lots of people complain that the result is chaotic-looking neighborhoods where there's no way to get the buildings to look similar to each other, but I really like not having to deal with all the crime and homelessness that results from the western model.
Japanese zoning is better in another way.
http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
Japanese do not impose one or two exclusive uses for every zone. They tend to view things more as the maximum nuisance level to tolerate in each zone, but every use that is considered to be less of a nuisance is still allowed. So low-nuisance uses are allowed essentially everywhere. That means that almost all Japanese zones allow mixed use developments
A quick look at history shows this to be false (Jim Crow laws, Nuremberg Laws, a million other examples). People should never derive their morality from bureaucrats.
The politicians (not bureaucrats: bureaucrats don't make policy) aren't making these laws up all by themselves: they're responding to the whims of the voters.
Jim Crow laws were "fair and just" at the time, according to most people of the time; that's why the laws existed. The people wanted them (well, the majority who had political power anyway, obviously not the Black people). "Fair and just" is simply an opinion, and according to the people at that time, those shitty laws were fine. They weren't getting their morality from lawmakers; the people at the time simply had bad morals.
Exactly. Just like how the British people just recently decided that privacy and encryption aren't "fair and just." After all, would a policymaker ever go against the desires of the voters?
> well, the majority who had political power anyway
You're making a massive assumption that this somehow equates to voters/the people.
You're making a really strange and unfounded assumption I frequently see, where you seem to want to absolve the common people of all guilt.
The idea that common white people 100+ years weren't massively racist is, honestly, ridiculous and downright insulting. Racist policies didn't come from a few leaders that somehow got themselves elected; regular people believed that way too. There's no shortage of historical evidence for this fact, and you trying to deny it really sounds a lot like flat-eartherism.
OP insinuated that these laws were a result of some small minority of racist people. That's complete BS. The laws were the result of much of society being racist.
Go talk to your grandparents about how racist people were in those days.
I'd rather not outsource my personal morality to the whims of the legislators and jurists that happen to have formed the laws in my particular jurisdiction.
My own morality will never align perfectly with the voters in my jurisdiction, no matter where I live. That's how it works, no individual is ever perfectly aligned with the desires of the society as a whole. In my opinion, the best thing to do is for a somewhat low common denominator of things to be illegal, with a much larger set of things being "enforced" by messy social pressure pushing people on what legal things are nonetheless moral and ethical.
People stating "nothing that is legal is immoral or unethical" is one parry in that "message social pressure", and those of us disagreeing is a counter-parry. And that's the way I think it should work! People who care what I think (my family, my friends, my kids, people at work and in my community who respect me for whatever reason) will feel pressure from me, pushing them toward what I think is right (and vice versa!), and people who don't know me, but who think what I'm saying rings true will also be affected, almost certainly to a lesser extent, by what I'm saying. And people (presumably like you) who don't find it compelling, will debate what I'm saying, and other people may find their perspective more compelling than mine, and that's fine too!
And in my view, this is just how society works, we messily influence one another toward a loose consensus on what is good and right, above and beyond what we've enshrined into legislation and legal precedent.
> I’d like to find a model to apply in my HOA to slow or reverse the corporate takeover of my community…
I'm on the board of my condo building's HOA. 5 or 6 years ago, we passed a rule that requires 50% of units building-wide to be owner-occupied. Once the limit is reached, there's a waiting list for anyone who wants to rent their unit. (Meaning you must wait until an owner moves back in or sells their unit.) There's also a hardship waiver at the board's discretion.
The PE/RE investment firms won't touch units with this rule in place; a unit they can't rent makes no revenue and is a waste of capital for them.
Note that this (or any kind of arrangement meant to discourage these kinds of buyers) gets contentious when someone is selling, especially if they're struggling to find a buyer. We recently had someone who needed to sell quickly, had interest from some kind of firm, but no offers from normal buyers (ie human people) due to the soft market. The firm made an offer contingent on the HOA rescinding the rental rule. We were very much not inclined to do so, so there was a lot of tension until the sellers finally got an offer from humans.
(This is not meant to insinuate that PE firms are run by non-humans. Evidence remains inconclusive.)
Of course, this rule can also spook human buyers, but IME once the details and reasoning for the rule is explained, it isn't usually a blocker.
>Seems like the previous landlord was naïve, or at least operating on an outdated worldview where local reputation mattered
Or maybe was an individual with a conscience who didn't want the old couple that had been in their property for 30 years living on the street. I guess you could call that naivety though.
“Conscience”, there’s a word I haven’t heard in a while. If an act is “unconscionable” well then it’s legally indefensible. But the broader idea of “having a conscience” seems to have receded, to the point I don’t really know what it means.
This doesn't strike me as true at all. Honestly, it sounds like an excuse for a personal unwillingness to develop your own moral center. Even if you were right - which I don't think you are! - that other people "having a conscience" has receded, who cares what they're doing?, you're not them, make your own, better choices.
It was completely legal to have slaves. It was completely legal to fire women when they were pregnant and/or married. It was completely legal to send your kid off to work. We've been jailing folks for weekend pot smoking for decades. Back in the 90s, you could get discharged from the US military for having consensual sex with the same sex. Or giving a blowjob - sodomy laws were still in effect.
Obviously, you can get blame even though you are doing something legal. Legality doesn't make you good.
Re: predatory landlords: if they are not breaking the law, are they really blameworthy?
Yes. Many things that fall short of "illegal" are blameworthy (that you don't even push back on calling them predatory is telling). Our legal system is not meant to be a moral system (and almost always favors people with more money). Also keep in mind, these folks have money to contribute to local politicians who then bend laws/regs in their favor anyway.
> if they are not breaking the law, are they really blameworthy?
Do you think the law and regulations fell out of sky?
Or maybe we saw some shitty and bad-faith actions from powerful entities and then the people demanded to enact some laws to prevent that behavior in the futuer?
Colorado legislators and legislators from other states were drafting legislation to give communities right of first refusal to buy the property from the owner (i.e. a loan secured against the land, financed by residents), not sure where that went. It was focused on mobile home communities, I believe
If the government is willing to back a long term fixed rate mortgage, it’s hard for me to understand why those with that mortgage shouldn’t be highly restricted in the rent they can charge.
Why not just cut to the chase and ban loans for investment properties? Who would own the properties that renters need to live in if it's made un-investable? Some level of renting is probably healthy (more mobility, requires less capital upfront, etc).
I wouldn't argue we are in a healthily balanced environment in the US currently. But rent is a spot price that also has downside potential and if you want the market for rentable properties to exist, it has to be attractive to investors.
I think this regulation would eventually end up with a lot of assets concentrated with a few owners, the ones rich enough to pay cash and side-step the loan regulation you propose. At that point, it's going to be worse than our current system.
I don't understand your reasoning here. Are you saying that if we don't give money to property owners through subsidization of their mortgages, then there won't be rentals? Why wouldn't there be? They could still get loans they just wouldn't be government-backed.
Why is it worth interfering with the market here? If we want renters to be able to rent and support such interference why not just give renters money directly?
Yes, I do - I do not think landlords should have a no-fault eviction. I don't think they should be able to refuse to renew your lease in a lot of situations. Once you are living there, you should have rights to stay so long as you pay and so on.
This keeps people stable.
If the unit is free, I don't think there should be bidding. The price listed is the price it goes for. It is on the landlord to make sure they are asking a fair price that is enough.
If competition is fierce, obviously there isn't enough housing.
> If competition is fierce, obviously there isn't enough housing.
Well we agree on that. The problem with taking away people's property rights is that it fucks incentives to actually fix the problem by creating new things. The solution here is building new housing, that won't happen if you take away landlords rights.
Your policy means that it's impossible to move to in demand areas unless you're willing to buy.
And after first 5 or 10 years, why don't the renters have substantial savings? Surely they have allocated same relative cut to living costs, meaning that with raises they should have saved good amount of money.
I saved money buying a house. We needed a bigger house for a baby and the smaller duplex wasn’t enough. Rent was about $2500-3500 and the house was $2500 and now $2100 after the refi.
Sure I put in about $25k in repairs but I’ve also gained over $200k. If I was still in the duplex I’d be broker than I am now.
> car dealers obscuring true costs of borrowing ("how much do you want to pay per month?")
That I would blame the consumer. Think about it.
I'd bet consumers looking for a car start at "What car do I like?" or "What do I need in my next car?" I'd bet pretty much no one starts by asking themselves "How much can I afford?" And if they ask that question is always on a month-to-month basis, because that matters. The now and today.
Once they know what they want, they try to get it no matter the cost. If it's more than their budget, they go for paying more in the long run but less month-to-month.
Hell I'd even say that if a salesman tells them that their so-wanted car is out of their limtis, the consumer will get mad and go all-karen on them.
> Consumers can share blame for not living below their means, needless wealth signaling, and financial illiteracy
That's a claim that marketing does not work and we know that's not true. It regularly defeats "personal responsibility" or no one would pay the marketers.
>"includes car payments on a BMW, the latest iPhone, and other by-no-means-necessary expenditures
"The latest iPhone" is the new "Avocado toast and starbucks". Inflation wise, the iPhone 3GS is only marginally more expensive than the iPhone 15, while delivering far more value. I struggle to understand how ~$75/mo for someone making 100k/year is a deliberating expense for the purpose of wealth signaling especially when that purchase likely delivers far more than $75/mo of actual economic value.
Conversely, those 100k/year earners are likely concentrated in some of the highest CoL areas in the country and simply wouldn't be 100k/yr earners in lower CoL areas. Rent and housing has continue to explode but the idea that these 100k/yr earners are hedonists is starting to feel like a thought terminating cliche to me.
The price of an iPhone has been pretty much constant for 15 years when adjusted for inflation, but 1bdr Rent (adjusted for inflation) in San Francisco is up 60% in that same time period.
Lets say a 100k earner in 2009 did the responsible 30% of income on rent, and spent 2,500/mo. A 100k/yr earner in 2023 would be spending 4,000/mo on a comparable apartment. They might need a roommate, or almost HALF of their income would go to rent. If Earner 1 was saving 10% of their income every month, that would be completely eaten by rent in earner (2) scenario, making them paycheck-to-paycheck. No "iPhones or BMWs" required; and I haven't yet touched the other non-luxury cost of living increases.
His point wasn't that iphones are the breaking point for american's personal finance situation. It's that the BLS and Fed study estimates weren't thrifty subsistance level living standards. They included luxuries like new iphones and premium vehicles.
Anecdotally, this has been my experience as well. The few people who have money troubles put themselves there through frequent outings, buying expensive items. If they got a 20% raise tomorrow, they would just increase their spending and squander most of it away. I don't doubt there are people out there struggling because of medical conditions or just plain bad luck, but that's not the most common case I've seen.
According to US BLS and Federal Reserve studies, only about 15% of the population necessarily lives paycheck-to-paycheck. The median US household has a ~$12,000 surplus per year after all ordinary expenses. Note that "ordinary expenses" includes car payments on a BMW, the latest iPhone, and other by-no-means-necessary expenditures, and also includes all healthcare costs.
If 61% of the US population is living paycheck-to-paycheck, it isn't because they need to. Americans have very high income surpluses compared to the rest of the developed world. 15% of the population necessarily living paycheck-to-paycheck is still a lot of people, but it implies 85% are not.