Destruction of the working class

[Ghost of LL 15492]

2 hours ago, BradInATX said:

Do you own your home?

I do.  

But just as you reject my anecdotal observation, I'll reject this one.  Just because I own my home doesn't mean everyone should own his/hers.

And, I'll observe, for a large portion of my life, I didn't own a home.  While I was single, I rented.  That made a lot of sense for two reasons: (1) it was cheaper, and (2) it allowed me more flexibility to relocate (which is what I wanted to do after practicing for just a couple years in San Antonio).  

So I don't think we should build owning a $200,000 home into our suppositions for a single RN in Austin.

And really, the single RN making $70-80K/year isn't really what we're talking about when we're fretting about the "working class," is it?  Because by no stretch of the imagination is that "working class."  That's comfortably above the median income in Texas and in the United States as a whole.

What we're fretting about is the couple that make that and have a couple kids.  Where do they live where they have access to jobs and good educational options for the children?  And how do they pull all that off with both parents working?

These are legitimate questions that need to be addressed through things like pre-k, after-school programs, and affordable housing options (much of which can only be addressed at the local level through addressing zoning restrictions that limit density and push affordable-housing options further afield (which also has a negative environmental effect, as it forces people to drive further to get to their jobs)).

[Mrs Whiggins 13049]

Two more things about housing. Ghost addressed this in the zoning comment. One is that depending upon the community, for renters (saving up to buy the home) if they already have children it can be difficult to find a rental near a good school. Again it depends upon the community, but thanks to NIMBYS and school boards with certain agendas, many subdivisions and areas howl if apartments are proposed, or the HOA rules changed to allow SFRs.

Secondly, the average home size has increased dramatically since the 1970s. Once the average was 1500 square feet, as of 2014 it was 2600 square feet. While I have discussed with various people the costs for home-builder sand developers (1500 vs 2600) plus lot sizes and costs it is interesting to discover just how many people will take on the larger homes despite it probably not being a great idea for them.

 

 

[HRSchenker 2259]

2 hours ago, Sbbruin said:

No, it isn't.  Owning a house is not an inalienable right.  I get that there is an affordability crisis, but no, not everyone should own a home.

I was just fine renting an apartment before I got married. Seeing these comments about feeling sorry for people who live in apartments is bizarre. If I never got married I'd probably live in an apartment for the rest of my life and be happy with it. Not sure why people want to force their hopes and dreams onto everyone else. Kind of sounds like Varsity Blues

[hornhorn 100]

56 minutes ago, HRSchenker said:

I was just fine renting an apartment before I got married. Seeing these comments about feeling sorry for people who live in apartments is bizarre. If I never got married I'd probably live in an apartment for the rest of my life and be happy with it. Not sure why people want to force their hopes and dreams onto everyone else. Kind of sounds like Varsity Blues

You just wait, you're about to be called a Boomer by Brad. 

[fattyflattie 4636]

2 hours ago, hornhorn said:

You just wait, you're about to be called a Boomer by Brad. 

Maybe.  He kind of disappeared after he showed everyone he can’t do simple math, or assign reasonable costs to his argument.   

[Al Bundy's Napoleon Hand 13546]

3 hours ago, hornhorn said:

You just wait, you're about to be called a Boomer by Brad. 

Conserva-SNAPZ! ®

Edited January 14, 2020 by Al Bundy's Napoleon Hand
had to add the Z

[BradInATX 9208]

Maybe.  He kind of disappeared after he showed everyone he can’t do simple math, or assign reasonable costs to his argument.   

Right. In my first post I literally said "my 2k mortgage number might be off".

So go back to my numbers post, add $450 a month, and explain how that math is sustainable.

It's not, of course, so keep focusing on your stupid little semantics games. Maybe post some memes.

Stay in your depth.

[BradInATX 9208]

I was just fine renting an apartment before I got married. Seeing these comments about feeling sorry for people who live in apartments is bizarre. If I never got married I'd probably live in an apartment for the rest of my life and be happy with it. Not sure why people want to force their hopes and dreams onto everyone else.

Man, the walk to school in the snow crowd is getting really worked up aren't you. This is a middling straw man attempt. Nowhere did anyone say they feel sorry for people who live in apartments.

Hell, I'd go back to that life in a heartbeat if I were single.

Not everyone wants that. But everyone wants that choice. The point is that only a certain swath of our country has a realistic path to home ownership if they want it. And that swath is shrinking.

But you already knew that, and chose to make a disingenuous post anyway.

 

[BradInATX 9208]

I do.   But just as you reject my anecdotal observation, I'll reject this one.  Just because I own my home doesn't mean everyone should own his/hers. And, I'll observe, for a large portion of my life, I didn't own a home.  While I was single, I rented.  That made a lot of sense for two reasons: (1) it was cheaper, and (2) it allowed me more flexibility to relocate (which is what I wanted to do after practicing for just a couple years in San Antonio).  

So I don't think we should build owning a $200,000 home into our suppositions for a single RN in Austin.

And really, the single RN making $70-80K/year isn't really what we're talking about when we're fretting about the "working class," is it?  Because by no stretch of the imagination is that "working class."  That's comfortably above the median income in Texas and in the United States as a whole.

What we're fretting about is the couple that make that and have a couple kids.  Where do they live where they have access to jobs and good educational options for the children?  And how do they pull all that off with both parents working?

These are legitimate questions that need to be addressed through things like pre-k, after-school programs, and affordable housing options (much of which can only be addressed at the local level through addressing zoning restrictions that limit density and push affordable-housing options further afield (which also has a negative environmental effect, as it forces people to drive further to get to their jobs)).

 

 

Nope the RN isn't really what we're talking about. But it's a commonly cited option when rich white people try to pretend America is the bastion of class mobility, so in the interest of a good faith discussion I wanted to start on your side of the court. The real working class is a family of four pulling in 100k combined or 60k with a stay at home parent or the lab tech or CNA making 45k. Of course the math gets much much worse there. Totally agree with what you say here. But it's not enough. Most policy based approaches are band aids on a hatchet wound. We aren't going to fix anything until we address wealth inequality and corporate control over our government.

The zoning thing is a big deal though. New Orleans has been trying out some things where low income folks that work in the city have affordable options in town. I'm interested to see where that goes.

 

 

 

 

 

[BradInATX 9208]

Also, just a side observation. It's amazing how many people there are that get legitimately angry and butt hurt at the notion that people lower than themselves on the class hierarchy should be afforded the ability to own their own home or retire with some comfort and dignity.

I can't even imagine taking pride and building a very large chunk of my self worth on the fact that I'm well-off and those beneath me have very little opportunity to reach the same spot. I guess some people get their sense of self from being above others. That can't be an enjoyable existence, though, what with constantly worrying about maintaining your place and making sure those below you know and stay in their place too.

Edited January 14, 2020 by BradInATX

[Nice Guy Eddie 13414]

There are no consensus definitions but a couple earning 65-100k are not what I meant when I titled this thread working class. The term doesn’t imply people that work but rather below middle class with income that are at least indirectly tied to minimum wages.

I think Working class are people working much further down the economic ladder, and many of them are unskilled. Think of people earning less than 35k per year, if not lower. 35 requires either heavier manual labor, leaving many women out of the mix, or they require some relatively decent experience/training.

 

[TwiceHorn 31280]

13 hours ago, BradInATX said:

This is something that only people who own houses say. It's yet another "the world needs ditch diggers too" ok boomerism.

 

What is so special about owning your own home?  Not owning your own home in a prime zip code where it appreciates 4% annually, but just owning your own home?

I get the usual justifications of pride of ownership, sense of community, and all that kind of nebulous crap that doesn't really bear out, particularly in a less than prime neighborhood.  GoLL listed quite a few reasons home ownership is overrated.

There are any number of studies suggesting that it's not all it's cracked up to be, especially for the economically fragile, if they can save.

Edited January 14, 2020 by TwiceHorn

[Rougarou 594]

44 minutes ago, TwiceHorn said:

 

What is so special about owning your own home?  Not owning your own home in a prime zip code where it appreciates 4% annually, but just owning your own home?

I get the usual justifications of pride of ownership, sense of community, and all that kind of nebulous crap that doesn't really bear out, particularly in a less than prime neighborhood.  GoLL listed quite a few reasons home ownership is overrated.

There are any number of studies suggesting that it's not all it's cracked up to be, especially for the economically fragile, if they can save.

It’s a benefit because it can be a short circuit to lump liquid cash, if you are lucky enough to have bought a starter home in Austin or Dallas from 2008 to around 2016. The swath of people I know who did that have come out like bandits and been able to make $100k+ every third or fourth year in real estate appreciation. Even now with housing shortages, etc. it’s obviously a good economic benefit to own a home and have equity in real estate rather than save $1000/year by not having to call a plumber or buy stuff at Home Depot to fix something versus a landlord.

At some point that yield curve will invert and it will not be a wise economic tool but for now home ownership in Texas (or California or Nashville or Northern VA or other either historically rich real estate areas or trending/hot cities) is a good idea.

[Rougarou 594]

1 hour ago, BradInATX said:

Also, just a side observation. It's amazing how many people there are that get legitimately angry and butt hurt at the notion that people lower than themselves on the class hierarchy should be afforded the ability to own their own home or retire with some comfort and dignity.

I can't even imagine taking pride and building a very large chunk of my self worth on the fact that I'm well-off and those beneath me have very little opportunity to reach the same spot. I guess some people get their sense of self from being above others. That can't be an enjoyable existence, though, what with constantly worrying about maintaining your place and making sure those below you know and stay in their place too.

It’s a way of keeping score. How can we know we are successful and happy if we can’t benchmark it against all the other data inputs, I mean people. You have to earn— really earn like shaggy 1%— and own the toys and take the trips and you’ll find riches mean nothing if the eye is never satisfied. And most of us are never satisfied. I struggle with it (consumerism, etc. decried upthread, so it’s not just the poor or working class), I won’t lie.

Edited January 14, 2020 by Rougarou

[Ghost of LL 15492]

14 minutes ago, Rougarou said:

Even now with housing shortages, etc. it’s obviously a good economic benefit to own a home and have equity in real estate rather than save $1000/year by not having to call a plumber or buy stuff at Home Depot to fix something versus a landlord.

At some point that yield curve will invert and it will not be a wise economic tool but for now home ownership in Texas (or California or Nashville or Northern VA or other either historically rich real estate areas or trending/hot cities) is a good idea.

I'm not sold on that.  At all.

My house is appreciating pretty nicely, thank you very much.  But if I took that portion of my mortgage that goes to equity and the bit of my income that goes to maintenance of the house and instead have put that money in my stock portfolio rather than into the house, I would have come out significantly better in the stock market.  And it's not even particularly close.

And I know that because we may be looking to sell our home in the not-distant future, so I know what it's worth.  And I can look at my 401k, which I started when I joined my present firm at about the same time I bought that house.  So I know how much it has appreciated over the same time.  

That's one data point.  But it's been the same for every house I've ever owned.  I'd like to see some broader comparison of the two, because I suspect that it'd be pretty rare for a home value to out-perform the market over any realistic timeframe.

There are tax benefits to owning a house, that's true.  But that raises the question--should there be?

One of the major drivers of all of the problems we're discussing is the toxic cult of home-ownerism.  Most people shouldn't own their own homes.  And yet, many do because of the perverse incentives created by the Internal Revenue Code.  That incentive creates demand that shouldn't exist, which in turn reduces demand for rental properties, which should, in a rational market, be much more readily available.  And were such properties more readily available, desirable housing would be (1) cheaper and (2) more plentiful.

Edited January 14, 2020 by Ghost of LL

[BradInATX 9208]

1 hour ago, TwiceHorn said:

 

What is so special about owning your own home?  Not owning your own home in a prime zip code where it appreciates 4% annually, but just owning your own home?

I get the usual justifications of pride of ownership, sense of community, and all that kind of nebulous crap that doesn't really bear out, particularly in a less than prime neighborhood.  GoLL listed quite a few reasons home ownership is overrated.

There are any number of studies suggesting that it's not all it's cracked up to be, especially for the economically fragile, if they can save.

The reasons why it doesn't make sense to own a home for most is because it's hard to own a home when you're poor. Which is the entire point. The point is that in the past just about every factory worker and above could own at least a little modest home in which they could raise their kids, retire (without a monthly rent payment), and leave to their children to help them get a start in life. And that has completely gone away. Now owning a home is a "privilege" enjoyed almost primarily by the middle class and above.

What you're saying, that it makes more sense for people below a certain socio-economic status to rent, isn't a solution. It's the entire crux of the problem that I'm putting forward. 

[BradInATX 9208]

11 minutes ago, Rougarou said:

And most of us are never satisfied. I struggle with it (consumerism, etc. decried upthread, so it’s not just the poor or working class), I won’t lie.

I think we all do. And I think looking at those who have more than you and wanting is probably pretty normal and not inherently "bad". It's good to have some drive, etc. It's the reverse of that where it gets creepy to me, where you look at those beneath you and want to make sure they stay down there. When one gets offended and defensive when someone dares to suggest that perhaps we could afford the people beneath us better opportunities to reach the levels that we've reached, or at least improve their position somewhat. That's pitiful.

Edited January 14, 2020 by BradInATX

[Ghost of LL 15492]

1 minute ago, BradInATX said:

The reasons why it doesn't make sense to own a home for most is because it's hard to own a home when you're poor. Which is the entire point. The point is that in the past just about every factory worker and above could own at least a little modest home in which they could raise their kids, retire (without a monthly rent payment), and leave to their children to help them get a start in life. And that has completely gone away. Now owning a home is a "privilege" enjoyed almost primarily by the middle class and above.

What you're saying, that it makes more sense for people below a certain socio-economic status to rent, isn't a solution. It's the entire crux of the problem that I'm putting forward. 

Man--you're just buying into this irrational cult of home-ownerism.  It doesn't make sense.

Why is it an unquestionable benefit for the factory owner to own, rather than rent, his little modest home in which he raises his kids?

[Incredulity 11555]

As noted above there are no "modest little home"s being built anymore.

[BradInATX 9208]

1 minute ago, Ghost of LL said:

Man--you're just buying into this irrational cult of home-ownerism.  It doesn't make sense.

Why is it an unquestionable benefit for the factory owner to own, rather than rent, his little modest home in which he raises his kids?

It's laid out specifically in the post you quoted.

Edited January 14, 2020 by BradInATX

[BradInATX 9208]

4 minutes ago, Incredulity said:

As noted above there are no "modest little home"s being built anymore.

Almost literally the only housing going up in Austin is modest tract homes of 1200ish square feet. This is happening all over the country.You should try to be more of a critical thinker and less of a reactionary, low-effort response guy.

Edited January 14, 2020 by BradInATX

[Ghost of LL 15492]

Just now, BradInATX said:

It's laid out specifically in the post you quoted.

So that they can retire without a rent payment?  So that they can bequeath the old homestead to their kids?

Ok, great--but if you're trying to build wealth, then home-equity is a lousy investment vehicle.  They'd be much much better off putting the equity portion of their mortgage payment into a 401k.

So let's get rid of that line, because it's complete bullshit.

What is the virtue of home-ownership vis-a-vis renting?

I mean, I'm sorry, but there really is none.  It's this fallacy created by generations of bankers and title companies that get rich off it.  And it's complete bullshit that has skewed the entire housing market and, by reducing mobility, fucked up the entire labor market.  It's a sham.  We need to get rid of it.

And yeah--that means getting rid of the mortgage-interest deduction.  And at the state level, that means getting rid of the homestead exemption.  And with that money, we can do things like fund improved education and healthcare.

[BradInATX 9208]

1 minute ago, Ghost of LL said:

 

What is the virtue of home-ownership vis-a-vis renting?

 

Why do you own your home?

[HRSchenker 2259]

Perverse incentives by the IRS? Huh? There's almost no tax incentive to purchase a home unless the amount of interest you're paying on the mortgage every year is higher than $12k for a single person or $24k for a married couple.

[Ghost of LL 15492]

3 minutes ago, BradInATX said:

Why do you own your home?

Because (1) there's hardly any rental inventory in the neighborhood that I wife insisted we buy into when we moved to Austin, and (2) because of the tax benefits (including the mortgage-interest deduction, the exclusion for equity from my previous house when rolled into a new house, and the homestead exemption). 

But without those market-skewing tax incentives, there would probably be a lot more inventory in that neighborhood.  And in that event, I'd almost certainly prefer to rent.

[Incredulity 11555]

12 minutes ago, BradInATX said:

Almost literally the only housing going up in Austin is modest tract homes of 1200ish square feet. This is happening all over the country.You should try to be more of a critical thinker and less of a reactionary, low-effort response guy.

LOL.

 

Show your work.  You couldn't be more wrong.

[BradInATX 9208]

3 minutes ago, Ghost of LL said:

Because (1) there's hardly any rental inventory in the neighborhood that I wife insisted we buy into when we moved to Austin, and (2) because of the tax benefits (including the mortgage-interest deduction, the exclusion for equity from my previous house when rolled into a new house, and the homestead exemption). 

But without those market-skewing tax incentives, there would probably be a lot more inventory in that neighborhood.  And in that event, I'd almost certainly prefer to rent.

Those tax incentives don't apply to poor people?

[BradInATX 9208]

4 minutes ago, Incredulity said:

LOL.

 

Show your work.  You couldn't be more wrong.

https://www.redfin.com/city/30818/TX/Austin/new-homes

 

Half of the new builds are <2,000 sqft. 

Edited January 14, 2020 by BradInATX

[G650 14106]

15 hours ago, BradInATX said:

Particularly in the face of massive amounts of data showing that the middle class is disintegrating before our very eyes.

So are you talking about the middle class or the working class? We can't even agree on terminology in this country, which is a prerequisite to even beginning to solve the problem.

 

FWIW if I were lord I'd abolish the middle class anyway.

[Ghost of LL 15492]

6 minutes ago, HRSchenker said:

Perverse incentives by the IRS? Huh? There's almost no tax incentive to purchase a home unless the amount of interest you're paying on the mortgage every year is higher than $12k for a single person or $24k for a married couple.

How do you figure this?  There are multiple incentives in both state and federal law.

On the federal level, there is (1) the mortgage-interest deduction, which allows a homeowner to deduct the interest paid by the homeowner on his/her mortgage, (2) the state-tax deduction, which allows a homeowner to deduct the state property tax s/he pays on the home, and (3) the exclusion from gross income for appreciation on the value of the home when the home is sold, if that money is rolled into a new home purchase.

On the state level, there is the homestead exemption, which discourages property owners from leasing single-family residential property rather than selling it, and increases the cost of renting vis-a-vis buying.

[BradInATX 9208]

Just now, G650 said:

So are you talking about the middle class or the working class? We can't even agree on terminology in this country, which is a prerequisite to even beginning to solve the problem.

 

FWIW if I were lord I'd abolish the middle class anyway.

Both.

The erosion of the middle class goes hand in hand with the lack of buying power for the working class.

[Judge Roybeanbag 11810]

12 minutes ago, Ghost of LL said:

So that they can retire without a rent payment?  So that they can bequeath the old homestead to their kids?

Ok, great--but if you're trying to build wealth, then home-equity is a lousy investment vehicle.  They'd be much much better off putting the equity portion of their mortgage payment into a 401k.

 

Except volatility makes that 401K a pretty hefty risk, not to mention it's not very liquid.  As someone who's been through 3 crashes as an adult, putting all your eggs in the stock market basket is scary the closer you get to retirement.  My real estate investments are relatively stable.  If at all possible I'd recommend people do both (401K and property ownership).  But I guess the point of the thread is most people can't.

[Incredulity 11555]

2 minutes ago, BradInATX said:

https://www.redfin.com/city/30818/TX/Austin/new-homes

are you talking about condo's and townhouses in close-in neighborhoods of Austin?   

[workswithseed 2036]

16 hours ago, Ghost of LL said:

I would agree with all of this.  Our education system is abysmal, and we're reaping the bitter harvest of its awfulness.

Would you say govt hasn't helped education then? I personally don't think it has.

[Ghost of LL 15492]

3 minutes ago, BradInATX said:

Those tax incentives don't apply to poor people?

They do.  That's entirely my point.  It skews the market by creating artificial incentives to make bad financial decisions.

We should get rid of those artificial incentives.  That would make housing more affordable to everyone, and in particularly the working classes.

[BradInATX 9208]

1 minute ago, Incredulity said:

are you talking about condo's and townhouses in close-in neighborhoods of Austin?   

We're talking about homes that people can own. That's what "home ownership" means.

Edited January 14, 2020 by BradInATX

[Rougarou 594]

25 minutes ago, Ghost of LL said:

I'm not sold on that.  At all.

My house is appreciating pretty nicely, thank you very much.  But if I took that portion of my mortgage that goes to equity and the bit of my income that goes to maintenance of the house and instead have put that money in my stock portfolio rather than into the house, I would have come out significantly better in the stock market.  And it's not even particularly close.

And I know that because we may be looking to sell our home in the not-distant future, so I know what it's worth.  And I can look at my 401k, which I started when I joined my present firm at about the same time I bought that house.  So I know how much it has appreciated over the same time.  

That's one data point.  But it's been the same for every house I've ever owned.  I'd like to see some broader comparison of the two, because I suspect that it'd be pretty rare for a home value to out-perform the market over any realistic timeframe.

There are tax benefits to owning a house, that's true.  But that raises the question--should there be?

One of the major drivers of all of the problems we're discussing is the toxic cult of home-ownerism.  Most people shouldn't own their own homes.  And yet, many do because of the perverse incentives created by the Internal Revenue Code.  That incentive creates demand that shouldn't exist, which in turn reduces demand for rental properties, which should, in a rational market, be much more readily available.  And were such properties more readily available, desirable housing would be (1) cheaper and (2) more plentiful.

Two points:

You aren't the working class. Sure, it's ideal to do as you say you have done but for the working class who might not have much disposable income to proactively invest in the stock market, over any period of time (or don't know how, are culturally afraid of it, or any other number of barriers to entry that poor people have that we don't) owning a home is a safer path to building wealth. If you have $2k and pay $1500 in rent for your 3bd/2ba or you pay $1500 in mortgage for the same house, if you only have a few hundred bucks left to live off of, it's obvious that owning the home is better over time.

That's not even addressing that my previous point upthread was that for the lucky group of homeowners who got in before a blistering hot real estate market (I called out the specific cities and conditions. Your mileage obviously varies especially if you bought a house in the middle or close to the top of the bubble in valuations in Austin or California or wherever you are), they will outperform the market. Anecdotal I know, but almost everyone I know who bought real estate in Austin pre-2010 is doing handsomely off the profits. Some just took the $100k lump sum liquid profit from selling their house in the domain area they bought for $150k and some rolled it into a bigger home and sold the house for more. Same thing for those in McKinney or Frisco or Prosper or other exurbs that have grown triple digits due to white flight.

I mean, are these points even debatable? Do I need to call @Catdaddyhorn and have him pencil whip everyone about how the lack of a path of reasonable real estate ownership for the marginalized works? He's researched and can cite scholarship which is a sight better than us throwing personal anecdotes into the ceiling fan.

 

[BradInATX 9208]

 

2 minutes ago, Ghost of LL said:

They do.  That's entirely my point.  It skews the market by creating artificial incentives to make bad financial decisions.

We should get rid of those artificial incentives.  That would make housing more affordable to everyone, and in particularly the working classes.

I don't disagree with this. I would leave the incentives on your primary residence but remove incentives on second and investment homes, including depreciation writeoffs and being able to write off a loss in a year. But that's an entirely different thread.

[G650 14106]

Just now, BradInATX said:

Both.

The erosion of the middle class goes hand in hand with the lack of buying power for the working class.

They are two separate issues. The "middle class" is so widely abused in American vernacular, I'm not sure it's even retrievable anymore. You are basically splitting the working class into two entities, and labeling the upper portion the middle class.

Now, there is a massive consumerism issue with the true middle class, but that is a wholly separate discussion that was touched on upthread then dropped.

 

These are all very difficult issues to address. It seems to me that the vast majority of posters here are speaking in good faith, whether one agrees with them or not.

[Ghost of LL 15492]

2 minutes ago, Judge Roybeanbag said:

Except volatility makes that 401K a pretty hefty risk, not to mention it's not very liquid.  As someone who's been through 3 crashes as an adult, putting all your eggs in the stock market basket is scary the closer you get to retirement.  My real estate investments are relatively stable.  If at all possible I'd recommend people do both (401K and property ownership).  But I guess the point of the thread is most people can't.

You just need to switch from a growth portfolio to more of an income portfolio.  And as you get really close to retirement, you can get into fixed income.  There are ways to manage risk in the market that property ownership doesn't offer.  I mean, just ask people in Las Vegas or Miami how volatile that market can be.

But yeah--there is volatility in the market.  But if you're old enough to have been through three crashes as an adult, you've also been through three pretty robust recoveries.  And if you've been investing all that time, you've seen your portfolio triple or quadruple.  And that's a hell of a lot better than what you'd have done with a house in Garland.

[Incredulity 11555]

2 minutes ago, BradInATX said:

We're talking about homes that people can own. That's what "home ownership" means.

Not really.  Specifically, if you want to discuss total cost of ownership, affordability, mobility, job proximity...

[BradInATX 9208]

1 minute ago, Incredulity said:

Not really.  

It's literally the entire point of our discussion. You claimed that there is no modest housing being built. There is. The problem is that nobody below the middle class can afford any of it. You keep trying to change the parameters, which isn't going to work.

Edited January 14, 2020 by BradInATX

[Ghost of LL 15492]

4 minutes ago, BradInATX said:

 

I don't disagree with this. I would leave the incentives on your primary residence but remove incentives on second and investment homes, including depreciation writeoffs and being able to write off a loss in a year. But that's an entirely different thread.

No it's not.  It's the same issue.

Our government artificially created this cult of home-ownership through Fannie and Freddie.  And it worked.  And a lot of people after the War bought homes.

And then Congress did the politically popular (but economically stupid) thing and created a bunch of kickbacks to homeowners.  Because those homeowners vote.  And elected officials like votes.

But it's skewed the market.  It has unnecessarily and unreasonably given money to one class of people (i.e., homeowners) who are relatively well off at the expense of another class of people (i.e., renters) who are relatively not.  And since the former vote and the latter do not, that's not going to change.

But a lot of your calculation that you set out above to illustrate the squeeze being put on the working classes derives from the cost of housing.  And so the fact that the housing market has been skewed so as to make it more expensive due to the improvident tax policies of our government seems rather germane to the discussion.

[Mrs Whiggins 13049]

I can't speak for the Austin market, but one thing I've observed in my community is that many of the more affordable homes are bought by retiring boomers (investment income) , white collar professionals, and comfortable upper middle class types who are ready to move to their custom (second) home. The affordable homes are then either rented by these groups as single family (for income) or used as a AirBnB/VRBO. It takes a lot of homes off the market in that respect. It is also where I go to war with myself as my conservative side says it's their property, but I also know it is bad for sprawl and the community (especially for the empty homes).

 

None of this matters much though. More and more of the real estate in America is owned by China and other foreign entities and citizens.

 

[BradInATX 9208]

 
None of this matters much though. More and more of the real estate in America is owned by China and other foreign entities and citizens.
 

This. It's funny that our populist president hasn't addressed this major problem. Couldn't be because he's busy enriching himself by selling real estate to foreigners, could it? Nah

[Judge Roybeanbag 11810]

20 minutes ago, Ghost of LL said:

You just need to switch from a growth portfolio to more of an income portfolio.  And as you get really close to retirement, you can get into fixed income.  There are ways to manage risk in the market that property ownership doesn't offer.  I mean, just ask people in Las Vegas or Miami how volatile that market can be.

But yeah--there is volatility in the market.  But if you're old enough to have been through three crashes as an adult, you've also been through three pretty robust recoveries.  And if you've been investing all that time, you've seen your portfolio triple or quadruple.  And that's a hell of a lot better than what you'd have done with a house in Garland.

True but we aren't talking about "me".  Joe Schmoe doesn't know how to manage a portfolio.  He relies on hucksters to advise him.

[Incredulity 11555]

17 minutes ago, BradInATX said:

It's literally the entire point of our discussion. You claimed that there is no modest housing being built. There is. The problem is that nobody below the middle class can afford any of it. You keep trying to change the parameters, which isn't going to work.

Laughable.

"Modest" applied solely to square footage isn't the discussion.   

 

1000 sq ft condos go for millions in NYC.  Should the middle class be able to afford those too?

[BradInATX 9208]

Laughable.

"Modest" applied solely to square footage isn't the discussion.   

 

1000 sq ft condos go for millions in NYC.  Should the middle class be able to afford those too?

Manhattan is 20 square miles. That's the equivalent of a square something like 35 to Mopac and Oltorf to MLK.

Once more a simple, low effort disingenuous post. Try harder. Or perhaps this conversation is just beyond you.

 

[52-80 19096]

Why can't they just put all the poor people into employment constructing human-sized hamster wheels?

 

Afterwards, they can run the wheels to power the server farms that improve AI results when I use Siri on my iPhone 12.

 

I'd pay, like, 3 bagels a day for that sort of labor.

 

 

[Rougarou 594]

10 minutes ago, Mrs Whiggins said:

I can't speak for the Austin market, but one thing I've observed in my community is that many of the more affordable homes are bought by retiring boomers (investment income) , white collar professionals, and comfortable upper middle class types who are ready to move to their custom (second) home. The affordable homes are then either rented by these groups as single family (for income) or used as a AirBnB/VRBO. It takes a lot of homes off the market in that respect. It is also where I go to war with myself as my conservative side says it's their property, but I also know it is bad for sprawl and the community (especially for the empty homes).

 

None of this matters much though. More and more of the real estate in America is owned by China and other foreign entities and citizens.

 

You touch on tangential points about community and affordable housing and renters and it's a paradox. It is generally understood that renters are not good for community, home/neighborhood values, and accountability versus home owners. But working class folks need to rent and there are some cities where the rental market is 70%+ of all available homes and so of course people don't want to put roots in those areas and either use their homes as rental properties or sell and leave.

The ugly truth of this is that working class/renters also have to own some of their behaviors and tendencies (which isn't always their fault, we've talked a lot about not having good parenting, quality education and wherewithal). If people trash neighborhoods or homes or live in such ways that home values are affected (e.g. put up with crime or fail to raise your kids well, which affects their behavior and learning which affects the public schools, etc. as two examples) you cannot reasonably expect people with the means to leave, to make decisions to own and live in such areas and raise a family in those environments.  It's paradoxical and I know I sound like a decorum republican here but I'm not, but as a homeowner I've had to consider these things as well.