the author seems extremely fixated on being in the bay area, not even for job or family reasons. And here is where my real estate focused mind cant understand the author. How can he place more...
Fairweather said, prospective house buyers will often become fixated on one home, neighborhood, or even city, at a price tag that makes little sense for their financial situation.
the author seems extremely fixated on being in the bay area, not even for job or family reasons.
Because I’m not sure if exchanging all the benefits of my Bay Area life is worth owning a home in a place like Wisconsin. I’ve come to love the rolling hills, the soft Pacific breezes, the feeling of living full time in a tourist destination.
And here is where my real estate focused mind cant understand the author. How can he place more importance on trivial first world life style "niceties" over cheaper monthly payments, building equity, and housing stability for his children?
“I lived in a racially diverse neighborhood, maybe 60 [percent white]/40 [percent Black], and my personal experience was an example of all the literature,” she said. “I kept dropping the price and dropping the price, and I couldn’t get anyone to buy it. Eventually, I just took an offer to get it over with.” She estimates she lost about $20,000 in the sale.
I'm sorry what. House prices dropping $20000 is but a light sneeze. It's stainless steel vs white fridge. It's a Costco patio set on the porch. That's practically nothing. Racial discrimination for neighbourhoods is absolutely a real thing: consider also how "school catchment" can mean several hundred thousand across a street .....$20k is nothing.
She also recommended buying much less house than whatever mortgage we’d be approved for.
This is extremely important advice but I will also amend it with "live smaller, but buy bigger if your city has renters". Buy that extra basement suite. Buy that extra kitchen and extra washroom. In desirable cities it's awful but you can find people like the author paying your mortgage for you.
Down payment
I'm so glad these programs exist. Assuming the author pays at most 30% of his income towards housing of $4000 a month, that's a $160,000 salary. For these $2m houses, a 20% downpayment is a whopping $400,000......but that's a mere 8 years rent.....Not many of us have that kind of cash ever, or ever will. Not if we keep are forced to keep renting and paying down someone else's mortgages.
I can't tell if this is in jest or not, but if it's not, I am of similar mind to the author, even if our specific wants are not the same. I would always prioritize location over things like how...
And here is where my real estate focused mind cant understand the author. How can he place more importance on trivial first world life style "niceties" over cheaper monthly payments, building equity, and housing stability for his children?
I can't tell if this is in jest or not, but if it's not, I am of similar mind to the author, even if our specific wants are not the same. I would always prioritize location over things like how large or nice the house is, how expensive the house is. I'd really rather rent forever in NYC than own a McMansion in Wisconsin.
Well, that’s exactly why places like NYC and the Bay Area are so insanely expensive. There are a huge group of people that think that the United States consists of New York, LA, San Francisco, and...
Well, that’s exactly why places like NYC and the Bay Area are so insanely expensive.
There are a huge group of people that think that the United States consists of New York, LA, San Francisco, and giant empty corn fields.
There are dozens of nice, affordable mid sized cities in this country that are fantastic places to live.
If you have a country of 300 million people, of which whom a significant portion think that three tiny areas are the absolute best places in the country to live, of course those places are going to be insanely expensive and out of reach for most people.
I don’t really see that as much of a problem, except for the fact that there are people who are from those places, have their whole families and roots there, and are being priced out.
As for the author, if he wants to live in the most expensive real estate market in the country in a place he’s not even from? Yeah, I don’t see much of an issue with him having to pay for that privilege.
I don’t think there’d be much sympathy for someone who wrote a think piece about how they should be able to own a Lamborghini, after all.
Well, sure. I'm not the one complaining about housing prices. Both the bay and NYC could be much cheaper places to live in, although it would sacrifice the article author's dream of an idyllic,...
Well, sure. I'm not the one complaining about housing prices. Both the bay and NYC could be much cheaper places to live in, although it would sacrifice the article author's dream of an idyllic, "moderately dense" lifestyle. I'm more addressing OP, who may be confused why anyone would choose to forgo cheaper housing in a different area.
There are a huge group of people that think that the United States consists of New York, LA, San Francisco, and giant empty corn fields.
I've been a lot of cities, and lived in many of them too, and to be honest none of them have really fit my wants.
As someone near SF, I'd be perfectly happy with the density significantly increasing if it also significantly lowered housing prices. Expand the high-rise towers in SF. Expand the city density...
As someone near SF, I'd be perfectly happy with the density significantly increasing if it also significantly lowered housing prices. Expand the high-rise towers in SF. Expand the city density down to Palo Alto. Make Palo Alto a major metro center. They won't let it happen, but it would still be a great place to live. Much better in many aspects. We could even keep the hills as is.
My friend, significantly increasing density doesn't equal lower housing prices. They will always build to "market rates". See Tokyo, Hong Kong, Singapore etc
My friend, significantly increasing density doesn't equal lower housing prices. They will always build to "market rates".
Yes it does. Tokyo is the perfect example. It has possibly the most affordable housing in the developed world, and it does so by issuing more development permits than the entirety of the United...
Yes it does. Tokyo is the perfect example. It has possibly the most affordable housing in the developed world, and it does so by issuing more development permits than the entirety of the United States despite a fraction of the land and a quarter of the population.
Yeah, a condo right in the middle of Tokyo (e.g. Shinagawa) is still going to cost you “city” prices but get outside of that even a little and prices start falling quickly. A friend of mine rents...
Yeah, a condo right in the middle of Tokyo (e.g. Shinagawa) is still going to cost you “city” prices but get outside of that even a little and prices start falling quickly.
A friend of mine rents a decent two bedroom top floor apartment with kitchen and living room in a quiet neighborhood not too far from Shibuya and Meguro stations for ~$700/mo, with all the amenities that come with living in Tokyo (such as essentials like groceries being within walking distance). That’s unheard of in major US metros.
In the cities that are still densely populated but are smaller in size like Fukuoka prices are substantially cheaper yet.
Of course Japan has other problems but I wouldn’t say housing prices rank highly among them.
...are you arguing in favor of property bubbles or simply stating a fact? Objectively, empowering existing property owners to block all new developments is terrific for property prices and...
...are you arguing in favor of property bubbles or simply stating a fact? Objectively, empowering existing property owners to block all new developments is terrific for property prices and absolutely terrible for anyone that wants to move to the city.
I'm firmly in favor of the bubble bursting, hopefully forever. Homes are for living in, not for speculating. But I'm stating the fact that the homeownership segment is a huge huge voting block and...
I'm firmly in favor of the bubble bursting, hopefully forever. Homes are for living in, not for speculating.
But I'm stating the fact that the homeownership segment is a huge huge voting block and the government will nearly always make policies in favor of keeping prices going up forever, since the poor and the young don't vote, and they themselves probably have a whole bunch of investment property (spit). Nimby-ism needs to die.
Hong Kong is the only example where the prices remain insane. And that's largely because there's still way too many people for the available housing stock. Tokyo has fairly affordable,...
Hong Kong is the only example where the prices remain insane. And that's largely because there's still way too many people for the available housing stock.
Tokyo has fairly affordable, family-oriented housing available. And Singapore is probably the most affordable urban environment anywhere. The government has a ton of clever policies to ensure ample availability of middle class housing.
Haha.....yeah HK prices arents going up further....I think as a city we've peaked. And in that regards we saw what happened to Tokyo before the turn, yes you are right.
Haha.....yeah HK prices arents going up further....I think as a city we've peaked. And in that regards we saw what happened to Tokyo before the turn, yes you are right.
So prices are immutably fixed? How can they go up and down then? If the state started de-zoning, issuing permits, and subsidizing building materials we’d see prices drop.
So prices are immutably fixed? How can they go up and down then? If the state started de-zoning, issuing permits, and subsidizing building materials we’d see prices drop.
Those are good questions and I spent the last 30 years wondering how it is possible that in Hong Kong, Vancouver and Toronto, they have built like crazy and yet prices have not come down. I was so...
Those are good questions and I spent the last 30 years wondering how it is possible that in Hong Kong, Vancouver and Toronto, they have built like crazy and yet prices have not come down. I was so convinced it was an unsustainable bubble, back in early 2000s, that I was begging my parents to sell and we'd just rent. They held on despite every good logical sense, and they ended up being right.
Well this year the HK administration failed to sell any land, which is a shocker and a first time for everything. It's definitely not because there's way too much affordable housing for young people that's for sure.
Real estate isn't isolated basic economics of supply and demand: there's always multinational investors and faith in the local or global economy mixed in with jobs and overall human emotions.
All I was saying is that it's s possible for unlimited building permits and unlimited pricing IF there is also unlimited money flowing into those same few acres.
Correction, three tiny areas managed to avoid the faddish sprawl based development pattern such that they retain any sort of potential for a vital, walkable urban lifestyle. This isn't a property...
If you have a country of 300 million people, of which whom a significant portion think that three tiny areas are the absolute best places in the country to live, of course those places are going to be insanely expensive and out of reach for most people.
Correction, three tiny areas managed to avoid the faddish sprawl based development pattern such that they retain any sort of potential for a vital, walkable urban lifestyle. This isn't a property of the soil, these are facets of the built environment. If we were willing to build transit and dense, mixed-use development elsewhere people would settle there as well.
And they do, the city centers and downtown cores of revitalized cities have lots of people moving in. The problem is it's illegal to build like this in most places and where they try they never go big enough to get the necessary level of scale before it begins to reap rewards.
The prices in SF, NYC, etc. would be lower if there were just more places that modeled their urban plan on those cities.
LA and the Bay Area definitely have not avoided sprawl. Manhattan has only has based solely on the fact that it’s an island, but the rest of the NYC metro area hasn’t. The tri state area is one of...
LA and the Bay Area definitely have not avoided sprawl. Manhattan has only has based solely on the fact that it’s an island, but the rest of the NYC metro area hasn’t. The tri state area is one of the most classic and iconic examples of urban sprawl there is.
Philadelphia, Boston, Chicago, Denver, Pittsburgh to name a few all have good public transit systems by American standards. LA also famously has some of the absolute worst in the world for a city of its size.
It’s not public transit pulling people to those places. It’s mostly jobs, but also the allure of living in a place you hear romanticized so often. I just wish people would consider that the US is a huge country with dozens of great cities, and there’s nothing so magical about those three places. They’re unique and offer things nowhere else has, but other cities also offer unique things that nowhere else has too.
As someone who moved out of the SF Bay Area coming up on 3 years ago and has a large degree of freedom in choice of location due to remote work, the problem is finding these cities. When getting...
I just wish people would consider that the US is a huge country with dozens of great cities, and there’s nothing so magical about those three places. They’re unique and offer things nowhere else has, but other cities also offer unique things that nowhere else has too.
As someone who moved out of the SF Bay Area coming up on 3 years ago and has a large degree of freedom in choice of location due to remote work, the problem is finding these cities.
When getting started there’s no big list of cities you can filter based on arbitrary criteria to narrow down a shortlist, which leaves you to looking into places mentioned in e.g. Reddit discussions, but of course only a fraction of these locations will ever come up there.
Even once you’ve got a list of cities to look through, research is even more difficult. There’s little in the way of standardized data which makes it a challenge to figure out things like neighborhood history/vibes, industrial hazards, crime rates, climate, etc. Sometimes all you’re left with are again things like Reddit discussions.
This is one of the reasons I ultimately landed in a suburban city not too far from a major city; it was substantially cheaper than the SF Bay Area (though not as much as I would’ve liked), but it was one of the areas which had decent data availability thanks to being part of a bigger metro, which let me feel like I wasn’t flying blind and could make a reasonably informed purchase decision.
That I 100% agree with. If you haven't seen citynerd on youtube, he crunches all kinds of data and attempts to normalize it to compare apples to apples on a whole ton of different statistics about...
That I 100% agree with. If you haven't seen citynerd on youtube, he crunches all kinds of data and attempts to normalize it to compare apples to apples on a whole ton of different statistics about cities. He's helped me decide places I'd like to visit and check out a ton. It would be nice if the federal government provided an open service to do something similar.
Queens, Bronx, Brooklyn, also don't sprawl. The sprawl is the stuff that got built up after the 60s but the city centers remained livable because they were already too built up to undo by then....
Manhattan has only has based solely on the fact that it’s an island, but the rest of the NYC metro area hasn’t.
Queens, Bronx, Brooklyn, also don't sprawl. The sprawl is the stuff that got built up after the 60s but the city centers remained livable because they were already too built up to undo by then. They tried, with some of the Robert Moses BS. But the cities are, thankfully, beginning to undo some of those mistakes now.
It’s mostly jobs, but also the allure of living in a place you hear romanticized so often.
The romanticization also didn't just happen. It happened because people have lived there for a long time and you can go there today and still see things as they were romanticized because they haven't been torn down and replaced with strip malls and parking lots. My hometown was also heavily romanticized as a bucolic idyl. But they replaced the ranches with gated subdivision and golf courses and decided what ailed downtown was the lack of parking so turned it into a town square that looks like an island in the middle of a sea of asphalt. Nobody romanticizes a theme park experience like that.
Moreover, the transit brings the jobs. The lack of mobility and the density is what creates the agglomeration effects that generate more economic vitality.
I don't think you can really compare wanting to like in New York, LA or San Fransisco to owning a Lamborghini – one is a luxury good and the other is not. For a lot of people it's a massive career...
I don't think you can really compare wanting to like in New York, LA or San Fransisco to owning a Lamborghini – one is a luxury good and the other is not. For a lot of people it's a massive career advantage to live in a big city, especially if you work in services. I can also very much understand not wanting to live in the middle of the US because of how conservative it is (which is even more salient if you are an ethnic minority).
They're also very much not tiny places – the NYC metropolitan area has a population of ~23 million people, the LA metro population is about ~18 million, and SF about 7 million. Together that's something like 15% of the population of the US.
Places can be tiny while also being highly populated. Compared to the rest of the area of the US, even only compared to the urban areas in the US, yes, those three cities are tiny. The supply of...
Places can be tiny while also being highly populated. Compared to the rest of the area of the US, even only compared to the urban areas in the US, yes, those three cities are tiny. The supply of housing in those places are limited by geographical bounds. LA and SF could gain a little bit more supply by increasing density, but NY probably can’t, so compared to the amount of people who want to live there, they’re very small.
The whole purpose of an economic system is distribution of limited resources, and the fact is that more people want to live in these very popular areas then those areas can support.
I don’t see an issue with those places being priced to reflect that. Like yes, you will not be able to afford move to SF and buy a house downtown unless you are very wealthy. Why is that a problem that needs to be solved?
The problem that does need to be solved is people being priced out of their own homes where they’ve lived their entire lives and where their families have lived.
If moving to NY or SF or LA is such a great career move, then people shouldn’t have issues with making the investment to pay to live in those places.
Regarding conservatism; again, that’s the fallacy of assuming that 3 or 4 cities are bastions of progressivism and everywhere else is a backwards redneck wasteland. We don’t have a democratic president because people from 4 cities voted for him.
most midsized cities are left leaning. The entire middle of the country is not conservative. Minneapolis, Kansas City, St. Paul, Chicago, Denver, etc. These are all very liberal places by the standard of the entire country; more progressive than most places in the states of California or NY.
I don’t have much sympathy for a transplant to the Bay Area that’s able to afford housing, with no real reason to live there except that he likes it, complaining that he can’t purchase a home there. There are plenty of homes that I would like to live in that I can’t afford. The world is full of scarce resources that need to be allocated in some way, and few are as scarce and limited as geography.
As someone who grew up in LA, lived in SF and moved to Austin for more affordable housing, personally the lifestyle change did not work for me. This is anecdotal, but a liberal city in a red state...
As someone who grew up in LA, lived in SF and moved to Austin for more affordable housing, personally the lifestyle change did not work for me. This is anecdotal, but a liberal city in a red state is not the same. The city itself was not the same culture. Diversity was different. Segregation was different. While it has definitely worked for many others, the savings was not worth it for my family personally. And I know others like myself.
There are blue states that aren’t California and New York. Texas isn’t exactly known for its forward thinking ideas. But I mean, yeah, the culture will be different from LA everywhere that’s not...
There are blue states that aren’t California and New York. Texas isn’t exactly known for its forward thinking ideas. But I mean, yeah, the culture will be different from LA everywhere that’s not LA. That doesn’t mean the culture in those other places or better or worse necessarily.
I also don’t think that just because someone particularly really really likes a specific, very expensive, very popular area, they’re entitled to own a house in that place.
I’m with you on some of this, but we definitely have a different interpretation of “can’t afford” - if they’re comfortably able to rent it, which it sounds like they are, it’s reasonable to expect...
I’m with you on some of this, but we definitely have a different interpretation of “can’t afford” - if they’re comfortably able to rent it, which it sounds like they are, it’s reasonable to expect they should be able to buy it, with all the security, stability, and long-term cost advantages that brings.
Is it? Renting is a much different arithmetic than buying. When someone buys a property, they typically lose money on rent for the first few years they own it. Renters are paying less than the...
Is it? Renting is a much different arithmetic than buying.
When someone buys a property, they typically lose money on rent for the first few years they own it. Renters are paying less than the mortgage payment in most cases, and definitely less than the mortgage payment + insurance + property tax + maintenance. Most people buy property with the expectation that they’re building equity in an appreciating asset, so they’re willing to lose money on a monthly payment it until it appreciates enough that they’re able to charge a higher market rate for rent.
This person that is renting the house may have been able to afford it had he been making what he’s making now 10 years ago, but rents steadily increase while mortgage payments don’t.
If the gulf between his rent and what the house is worth is absolutely massive, that doesn’t mean that the house is overpriced, it means that he’s getting undercharged for rent.
It’s not exactly an uncommon situation that someone is able to afford to rent a property that they’re unable to qualify for a loan for. That’s not unique to the authors market at all.
I appreciate the reply, because that is indeed a very different way than I’d think about affordability. I’m looking at it less as a question of exact month to month cash flow, more as a holistic...
I appreciate the reply, because that is indeed a very different way than I’d think about affordability.
I’m looking at it less as a question of exact month to month cash flow, more as a holistic calculation over at least 5 years (probably not worth buying if you plan to move faster than that) and potentially much longer. Add all that up, accounting for equity and opportunity cost as well as liquid cash, and owning is highly likely to be the better financial proposition - because if it weren’t, landlords couldn’t make a profit.
I’m working on the assumption that if they’re renting in the vicinity of $4k/month and not hurting from it, there’s flex in the budget to pay an extra thousand or even two per month with some short term belt tightening as long as there’s a compelling reason to do so - like the knowledge that much of that money is converting to equity, and that it’ll become less painful year on year as the inflation adjusted cost of the mortgage payment goes down and the rent they’d otherwise be paying goes up.
So the way I see it, the problem is exactly as you say: they can’t qualify for a loan on that house. I just don’t think that means they can’t afford it. I think it means they can’t save a six-figure down payment in a reasonable amount of time, and that’s a very different thing.
You're probably right that someone paying $4k a month could conceivably afford a $6k a month mortgage, but much less comfortably. A landlord may be willing to take a risk in renting to that person...
You're probably right that someone paying $4k a month could conceivably afford a $6k a month mortgage, but much less comfortably. A landlord may be willing to take a risk in renting to that person for $6k a month, but a bank is much less likely to be willing to extend a loan. The reason behind that is that the risk profiles a very different. If a renter stops being able to make payments, you typically can evict them within 6 months or so and then rent a the property again. If someone defaults on their mortgage however, you need to foreclose their house, evict them, list it, price it to sell reasonably quickly, and then go through the whole real estate process and potentially underwrite another loan. One is significantly more time consuming and expensive than the other one. Additionally, a landlord only expected to make money off of a renter for a one year lease. A bank expected to make interest for 30 years.
Landlords are in the business of owning property, so having empty properties sucks, but it's part of the business. Banks don't like owning property. It's not part of their profit strategy, so foreclosure is something they really, really try to avoid.
Those are some of the reasons why landlords are typically more willing to eat some risk that banks aren't. That's also the "benefit" of landlords, if you buy into that argument; they're able to provide housing to people that banks would never even consider because they're too risk averse.
I prefer the politics where I live (and I honestly am glad I moved out of the state I grew up in though it surprisingly went blue at least for president last election even though it's usually a...
I prefer the politics where I live (and I honestly am glad I moved out of the state I grew up in though it surprisingly went blue at least for president last election even though it's usually a solid red state, but it still has politicians like Margeret Taylor Greene coming from it). I prefer the climate where I live (especially as temps are getting hotter). I certainly don't want to be in a red state at all period and even many purple states have some shitty politics. I would miss this area. I love the mountains. I love Puget Sound. I would be very sad to leave this state (and I would be extremely depressed if that meant moving back to the east coast or even the midwest... ugh).
Being here was my dream since my parents first brought me here.
So no, I'm not moving just to get a bigger house or more things.
What are the "niceties" that you personally enjoy about NYC? I ask because I'm in college and will likely have the opportunity to look for a job pretty much anywhere in the country afterwards, but...
What are the "niceties" that you personally enjoy about NYC? I ask because I'm in college and will likely have the opportunity to look for a job pretty much anywhere in the country afterwards, but I'm really not sure what I'm looking for in terms of the place.
I can imagine access to tons of activities and culture on your doorstep being a fun nicety in New York but the Wisconsin lifestyle might come with a lot more peace and quiet if you value that more instead. "The city is my living room" and having a big private living room both appeal to me in different ways :)
The feeling of liveliness, especially Manhattan. Having lived as a child in Beijing and Taipei, nothing quite replicates the sheer density of East Asian cities in North America. Closest is...
The feeling of liveliness, especially Manhattan. Having lived as a child in Beijing and Taipei, nothing quite replicates the sheer density of East Asian cities in North America. Closest is probably Mexico City.
Being able to step out and walk around, see people, go to stores, go to restaurants. As an amateur photographer, NYC is one of the street photography hubs for a reason, and it’s not just the same taking pictures of your lawn for the 50th time.
Having friends nearby. A lot of people I knew from college and high school just naturally ended up being in NYC. It’s probably the area with the second highest number of old friends, besides SF/South Bay where I went to college. Many people visit as well.
But in the end it’s mainly two things: the feeling that you’re somewhere that’s “alive”, and being able to step out and walk and enjoy yourself whenever you want to.
One thing I hated in suburbia is the dynamics of traffic. I don’t mind driving per se, but practically it can be pretty bad. Traffic is worst during rush hour. Evening rush hour is also, yknow, the time when you want to do things during weekdays. It’s like yeah, there’s a park I could drive to, but it’d be a brutal 45 minute slog to get there when it’d be 10 minutes without traffic. And unlike walking, driving in start and stop traffic should be considered a form of torture. It can feel like you’re trapped between work and home because it’s an insane pain in the ass to go anywhere after work because of traffic and everything is closed by 10pm anyway. Also, drinking is just harder. People just drink and drive and guesstimate their BAC, or just not give a shit, but I’d really rather not.
Oh, and this one is very specific, but I’d like to see at least some representation of my ethnicity and culture around, and many areas in the US, are still pretty, for lack of a better word, “white”.
As another perspective on NYC, I enjoyed some neighborhoods like Bed-Stuy in Brooklyn and the Upper West Side in Manhattan, but I really just ended up hating the city the longer I was there. This...
As another perspective on NYC, I enjoyed some neighborhoods like Bed-Stuy in Brooklyn and the Upper West Side in Manhattan, but I really just ended up hating the city the longer I was there. This article perfectly captured my feelings even when I stayed in Billionaires' Row.
NYC has so many things going for it (transit, biking, location, endless activities, food, etc); however, there are so so so many more missed opportunities and painful things about living in the city:
Laundry is still a pain in the ass in much of the city because many apartments don't have in-unit laundry.
Transit to and from the airports is embarrassingly bad (connector shuttles are insufficient), and the subway network isn't nearly extensive enough. It feels great in parts of Manhattan or even Brooklyn but forget about it if you want to travel around Queens or even the Bronx (we're not even gonna talk about Long Island.)
Everyone is always a bit on edge. You often avoid eye contact and conversation with strangers due to the crazies (though I've chatted with some really nice strangers in the city occasionally).
To quote my spouse: "The entire city needs to be pressure washed."
The trash on the street is horrendous and the city is still fighting car drivers over containerization. The most New Yorker phrase I've ever read was "Chicago’s famed alleyways" from this NYT article about adding garbage bins.
This is a personal problem but I didn't have a single good taco in the city which made me sad. That said, you can find every other type of cuisine in the world.
"Nobody drives in NYC, there's too much traffic." Robert Moses' legacy still haunts the streets of New York. The drivers are a different breed and unlike anything else I've seen in the states (one cab took us on a shortcut by just driving on the sidewalk). Biking still feels extremely dangerous too though there have been some great improvements like pedestrianizing Broadway.
Somehow, there's still a housing shortage due to a critical shortage of units and lack of new construction. My controversial opinion is everywhere needs to be upzoned to gently increase housing opportunities. "I want a city, not a museum".
All that said, you're right, there's nothing else quite like NYC in North America. Everyone should consider visiting once.
I spent a week in NYC, and what it taught me was that if I wanted to understand the city at any sort of depth I'd need to dedicate at least 3 months to living there and exploring. It's just so...
I spent a week in NYC, and what it taught me was that if I wanted to understand the city at any sort of depth I'd need to dedicate at least 3 months to living there and exploring. It's just so impossibly densely packed with stuff.
Living in NYC also feels a bit like going back in time in so many ways. The buildings are old, and most of them haven’t had significant updates. The floors and walls tend to be thin, the walls are...
Living in NYC also feels a bit like going back in time in so many ways.
The buildings are old, and most of them haven’t had significant updates. The floors and walls tend to be thin, the walls are old and crumbling, most of them don’t have centralized climate control or modern networks or modern door locks or modern appliances. The subway system feels like it’s from 1970, because in many cases it is.
There are modern standards of cleanliness and how businesses should operate that just aren’t followed in NYC. Many think of New York as this modern, forward thinking, interconnected city that sets all of the trends, but there are so many businesses that still won’t even accept a credit card.
For me it’s a cool place to visit, but I’d never want to live there again. It seems like it just goes out of its way to make peoples life harder, with the justification that 853 New York, and that’s just the way it is, that’s the way it’s always been, and that’s the way it always will be.
No I'm 100% serious. But perhaps once upon a time a very young me, growing up in HK and merely tolerating how "empty and dead and backwaters" Vancouver is, would also find it hard to believe. I...
How can he place more importance on trivial first world life style "niceties" over cheaper monthly payments, building equity, and housing stability for his children?
I can't tell if this is in jest or not
No I'm 100% serious. But perhaps once upon a time a very young me, growing up in HK and merely tolerating how "empty and dead and backwaters" Vancouver is, would also find it hard to believe.
I wasn't talking about McMansion lifestyle vs Bay Area life: I was specifically thinking about equity and savings and sacrificing lifestyle choices for one's children, of which the author has several.
$4000 a month is crazy pants money to "throw into the salty ocean", aka rent. This is what drives ethnic minorities to open restaurants in middle of nowhere towns in the prairies tundra: savings for the next generation.
How is he going to afford university and downpayment for his multiple kids when he can't even afford down payment for himself?
He didn't mention if his job is mobile or not, but "downgrading" to even a smaller city like Seattle or working in Redmond (I'm assuming he's in tech) would allow his family to save like crazy compared to $4000/month and no equity.
My parents traveled to a whole other continent and NONE of their living conditions improved except for how much they were now able to save. And it's from those savings that other living niceities slowly start to trickle back in.
Again, not McMansion: rent a shoe box for $1500/month or less, on anywhere else. Then buy a tiny tiny house and rent out half to pay the mortgage.
What he's doing is well and good without kids: live it up and worry only about your own retirement. But that's an incompressible way to live as a parent.
I have a feeling your parents moved for opportunities, not so that they could get a mortgage. One of the niceties of high cost of living areas is relatively higher income opportunities. Even with...
I have a feeling your parents moved for opportunities, not so that they could get a mortgage. One of the niceties of high cost of living areas is relatively higher income opportunities. Even with remote work being more common, it’s not necessarily that reliable these days. Getting stuck in KC and laid off from a remote SF job could cost significantly more than the rent you would be paying in SF.
Um... last I checked, you are probably better staying in California than living in Seattle. Wages match more what cost of living is in California then Seattle (I live here. I know at one point we...
Um... last I checked, you are probably better staying in California than living in Seattle. Wages match more what cost of living is in California then Seattle (I live here. I know at one point we were rated the most overpriced place to live even though yes, Cali is more expensive, because the wages here did not match what the cost of living is).
That's the neat part; you don't. Jokes aside, I think a lot of it comes down to what you personally prefer in terms of population density. Some other people in this thread are talking about how...
How to people socially integrate, make friends etc.
That's the neat part; you don't.
Jokes aside, I think a lot of it comes down to what you personally prefer in terms of population density. Some other people in this thread are talking about how they can't stand the boring suburban life and prefer to have people around and a vibrant city life. And that's fine for them, but a lot of us prefer some peace and quiet.
I grew up in a major city. Traffic was a nightmare. Crime wasn't rampant but it was definitely present. Housing prices and other costs of living became outrageous. Most of my friends moved out after college and are now scattered across the US. A lot of what the city offered, and what other people seem to love if you read the other comments here, is how it felt 'alive' at all hours of the day. That's exactly what didn't want.
So after college I moved to a much smaller town some 4.5 hours away, so not the thousands of km that you mentioned, but hundreds. Traffic here is non-existant. Cost of living is actually affordable which is a massive reason just by itself. And the fact that there's no real active nightlife here doesn't impact me in the slightest, since I'd rather be at home with family anyways.
Oh and the safety aspect is one I never really thought about until I moved here. People just leave their bags in their cars when going into a store. They sometimes don't even lock the cars. Tons of people leave their garage doors open for hours on end, whether or not they're actually in there doing something. I know some people here who don't even lock their front doors! All my neighbors just let their kids roam freely all day without a single care for any dangers out there since there's not much traffic in my immediate area. Like little 5-year-olds out and about playing in the streets without any adult supervision.
Absolutely insane stuff to someone like me who grew up in a large metropolitan area where everyone KNOWS not to leave valuables in your car, or your front door unlocked all day, or your small child unattended. Took a good while before I got somewhat used to it and even still I still don't feel comfortable leaving my garage door open all day, I still cover/hide things inside the car when I park it somewhere public, and I'll probably always supervise my kids at that young of an age.
I can see how it might be harder for someone with large family roots in one specific place, but there are tons of good reasons for wanting to move to somewhere that's more calm, quiet, safe, and doesn't cost an arm and a leg.
I think it’s much harder to understand if you’re not from a massive country, geographically. It’s not the same as an Italian moving to Denmark, even if you spoke the same language. Americans have...
I think it’s much harder to understand if you’re not from a massive country, geographically.
It’s not the same as an Italian moving to Denmark, even if you spoke the same language.
Americans have a shared culture, shared laws, shared history and so on. I’m from New York, but I still have a lot more in common with someone from Alabama than someone from Australia, even though we speak the same language. Americans are also generally outgoing and willing to talk to strangers, which I’ve noticed isn’t the case with a lot of Europeans, so making new friends here isn’t quite as hard as it would be in many European countries where many people’s families have lived in the same city for a thousand years. We’re a lot more willing to expand our social circles, maybe because we have a culture of moving around a lot.
Starting over is still hard, but I don’t think it’s quite the same.
Oh I moved to the Bay Area for plenty of reasons ;) — the weather, the food, concerts, hackerspaces and hackathons, endless gay bars from leather to daddy to kink to sports, drugs, tech talks and...
I am often baffled by the mindset of Americans who are willing to move thousands of kilometers away for what I'd consider "no" reason.
Oh I moved to the Bay Area for plenty of reasons ;) — the weather, the food, concerts, hackerspaces and hackathons, endless gay bars from leather to daddy to kink to sports, drugs, tech talks and networking, robot cars, and kink and sex parties and house orgies.
For what it's worth, I live in Australia and know a ton of Europeans who immigrated here for the big open spaces and the benefits they bring — lot of outdoorsy activities, more opportunities to...
For what it's worth, I live in Australia and know a ton of Europeans who immigrated here for the big open spaces and the benefits they bring — lot of outdoorsy activities, more opportunities to build their own home, etc. You mention Italians being reluctant to move to Denmark, but Italian-born people make up one of the 10 largest immigrant populations in Australia.
It has been my personal experience that Europeans seem much more keen to move abroad than Americans. They are also much more keen to go on trips outside their country, which I imagine is related: Almost all of the European immigrants I know decided to move here after coming for a visit and falling in love with the country, whereas literally every American I've met here — myself included — moved here due to being in a relationship with an Australian and had never previously visited.
For me, the reasons were economical: My tiny apartment rental switched up for single house mortgage saved $200/month. (Yes there are associated costs but it was also not mice infested and falling...
For me, the reasons were economical:
My tiny apartment rental switched up for single house mortgage saved $200/month. (Yes there are associated costs but it was also not mice infested and falling apart, and we were no longer in danger of being evicted on a whim.) This move allowed us to save a little here and there, and was also for a job that paid a lot more. Economic refugees. (These were both "terrible" neighbourhoods by the way but it what allowed us to save. Moving to a better neighborhood that cost more constitutes "no reason" for me)
People usually move to a place where they start over completely new, and basically they work all day every day. Wake up, long commute, work work work, come home crash. That's it. So sometimes it doesn't even matter if they're on Pacific or Atlantic coast. Social connections are at an all time low. Europeans also need to understand the dangers of Americans living without adequate employer provided health care.
I don't think anyone likes this kind of move but it's very common. And its being common makes it more conceivable: we all grew up knowing many people who did this and are fine.
I wonder if the reverse is true: Europeans who are there now has ancestors who decided not to go to the new world, and over centuries, people who want to leave have left, leaving behind folks who don't move.
Even in a stable economical situation the peace of mind that one gets from trading periodically increasing rent and possibility of suddenly needing to move that brings for a practically fixed...
My tiny apartment rental switched up for single house mortgage saved $200/month. (Yes there are associated costs but it was also not mice infested and falling apart, and we were no longer in danger of being evicted on a whim.)
Even in a stable economical situation the peace of mind that one gets from trading periodically increasing rent and possibility of suddenly needing to move that brings for a practically fixed mortgage payment and only having to move if you want to is huge. It honestly shocked me how much stress disappeared as a result of buying.
Of course this is assuming that one buys within their means; going for the biggest mortgage available would likely turn out differently.
This author needs some serious perspective. There are cities outside of the coasts. Minneapolis, Milwaukee (even mentioned in the article!), Chicago, St. Louis all have what this author is looking...
This author needs some serious perspective.
We enjoy the public amenities of living in a somewhat dense area, which include well-funded libraries and parks, absolutely no lawn maintenance—our HOA handles that as part of our rent—and not always having to hop into the car for a 30-minute trip to Costco. It doesn’t seem like much to ask for, but the cost of living out here is proof that it actually is. I doubt that we could ever replicate this lifestyle anywhere in Texas, let alone in much of the vast swath of America between the coasts.
There are cities outside of the coasts. Minneapolis, Milwaukee (even mentioned in the article!), Chicago, St. Louis all have what this author is looking for, community and density-wise (to varying degrees). That’s just the few that come to my mind immediately. The article reads to me like it was written by a Californian who will always live in California complaining about California while justifying the state’s high cost of living. It’s fine to want to live there! It’s just odd to write about it as though it is so exceptional, particularly from someone who has lived elsewhere.
I replied to another comment here about the same thing. There are a significant amount of people who know very little about the United States, despite living here their whole lives. I get the...
I replied to another comment here about the same thing. There are a significant amount of people who know very little about the United States, despite living here their whole lives. I get the impression that because of TV and Movies, many people think that the only places in the country that aren’t empty corn fields or suburbs are SF, LA, and New York.
The ironic part is the attitude is aloof snobbishness about the kinds of people they imagine that live in the kinds of places they’re imagining, somehow not realizing that America is chock full of nice cities, many of them walkable, safe, and pleasant places to live, and all of them more affordable than the three they’ve seen on television.
All of those also have Midwest weather though! As someone who's lived a lot of places, I can understand why someone wouldn't want to give up the relatively Mediterranean weather of Cali for a...
Minneapolis, Milwaukee (even mentioned in the article!), Chicago, St. Louis
All of those also have Midwest weather though! As someone who's lived a lot of places, I can understand why someone wouldn't want to give up the relatively Mediterranean weather of Cali for a Saint Petersburg-like city life.
I think St Louis is more on the "vibrant" side than the vibrant side, if you know what I mean. It is what you make of it, maybe. It just dropped below 300k population after the last census. It's...
I think St Louis is more on the "vibrant" side than the vibrant side, if you know what I mean. It is what you make of it, maybe. It just dropped below 300k population after the last census. It's been dying for about 70 years now and only has about a third of its peak population.
Frankly, we need to get banks out of the mortgage business. Make mortgages available direct from the Feds, here's my proposed rules: IRS gives the monthly borrow limit, some sort of relatively...
Frankly, we need to get banks out of the mortgage business. Make mortgages available direct from the Feds, here's my proposed rules:
IRS gives the monthly borrow limit, some sort of relatively simple function based on prior year's income and direction it's heading. Ending somewhere like 25% of last year's income, but to smooth things out such that periods of unemployment don't ruin your borrow ability.
The rate is equivalent to the current Fed interest rate, plus say 1%.
No down payments, but if you've defaulted on a prior mortgage you're subject to a PMI, which is determined by some degree of how many missed payments you had before they seized the home back.
Private banks have the option to offer mortgages as well, but they'll be forced to offer even better terms.
Only allow the federal loan I describe be available for your primary residence. Require a 10% tax on all loans secured for non-primary residences. Or mandate that any time a secondary property has...
Only allow the federal loan I describe be available for your primary residence.
Require a 10% tax on all loans secured for non-primary residences.
Or mandate that any time a secondary property has no tenant, it must be listed for sale for people intending to puchase as their primary residence, with the requirement they sell their existing primary residence.
Increasing demand will not fix a lack of supply. It might help certain people for a short while, but mortgages are already subsidized, and subsidizing further will simply make this mess even more...
Increasing demand will not fix a lack of supply. It might help certain people for a short while, but mortgages are already subsidized, and subsidizing further will simply make this mess even more painful to unwind.
The rate is equivalent to the current Fed interest rate, plus say 1%.
Already the case. Looking at a mortgage comparison site, they claim the best rates are 6.09%, and the national average rate is 7%. OBFR is 5.31, so we're already well-around that 1% markup.
No down payments
FHA loans can be gotten with a 3.5% downpayment as long as you've made a habit of paying most your other loans on time.
From my reply to someone else. Down payments only serve as an artificial barrier to people whom would otherwise be perfectly capable of paying a mortgage. And yes, me, with a credit score of > 760...
Additionally, the whole nation isn't having a housing crisis. There's almost 3,000 homes for sale in Philadelphia for well under $200,000. Even with rates as they are, that's still well under $1,800 for a monthly payment. The problem is that a lot of people have trouble scraping together even $9,000 for an FHA loan. And the reality is a lot of these places (or their neighbors) are already being rented for $2,000 or more per month...the landlord is just unloading the property.
From my reply to someone else. Down payments only serve as an artificial barrier to people whom would otherwise be perfectly capable of paying a mortgage.
And yes, me, with a credit score of > 760 can get a 6.5% APR. Someone with only a 710 can only get 6.9%. And someone with a 640 can only get 7.5%. Anybody under 600 can't really get one at all. And wealthier people almost always have much higher credit scores (add this to the "list of ways being poor is more expensive").
All that tells me is that a 1% premium guess was probably too high. Lets make it 0.5% of a premium. And since it wouldn't be tied to credit score...a lot less shenanigans.
Assuming the general sentiment here is that rent payments are essentially equivalent to monthly mortgage payments, if someone doesn't have the wiggle room in their budget to save up the 3.5% for...
Assuming the general sentiment here is that rent payments are essentially equivalent to monthly mortgage payments, if someone doesn't have the wiggle room in their budget to save up the 3.5% for an FHA loan (or minimum of 5% for a conventional mortgage), how are they going to save for maintenance of the home? At the US median home price, 3.5% is only 13k or so - less than a boiler or a roof replacement would cost. When you own, that's coming out of your pocket when it needs to happen, which can't always be timed.
Sure, you can finance the big ticket items - but if you aren't able to save anything because you're living completely paycheck to paycheck, you likely won't be able to swing those new payments either.
Similar to credit scores, it's about managing risk. If you have a history of not paying your bills on time, it's riskier to lend to you and lenders need to be able to make informed decisions. If they can't mitigate risk through different rates for different customers, the alternative is simply that nobody except the absolute wealthiest will get loans because they're the lowest risk.
If the idea is that the government pays for it and guarantees they'll lend to anyone, that doesn't magically remove the problem - it makes it worse. Now instead of a company going under when they lose too many risky bets, you create a massive funding problem for the entire government.
Of course, you can argue that bailouts of large companies are more or less the same thing, but those probably shouldn't happen regularly either.
Man, if only there was this well-valued asset that could be seized and auctioned off if somebody didn't pay their debts. Credit scores can make sense within the scope of unsecured personal loans....
If you have a history of not paying your bills on time, it's riskier to lend to you and lenders need to be able to make informed decisions.
Man, if only there was this well-valued asset that could be seized and auctioned off if somebody didn't pay their debts.
Credit scores can make sense within the scope of unsecured personal loans. They make much less sense when backed with an insured asset.
And frankly yea...the wealthier guy whom always pays his debts can afford higher interest, they can subsidize the failures. The overall rate can rise to accomodate the risks.
Sure, they can foreclose if it comes to that. That process can take years, is expensive, and now the lender has to maintain and offload a significantly less valuable asset that's been neglected....
Sure, they can foreclose if it comes to that. That process can take years, is expensive, and now the lender has to maintain and offload a significantly less valuable asset that's been neglected. There's also the people who were living there who have to deal with the stress and financial burden, and who ultimately end up unhoused.
Everyone loses in a foreclosure, it's better if it never has to come to that.
Give governments rights of first purchase in areas deemed to having a housing crisis seems a reasonable step in that direction. I think it would help to strengthen squatters rights as well, reduce...
Give governments rights of first purchase in areas deemed to having a housing crisis seems a reasonable step in that direction.
I think it would help to strengthen squatters rights as well, reduce adversarial possession laws to like 5 years from 30.
This in no way fixes the supply side of housing, while increasing demand by a large amount. So you just end up with housing prices jumping up, and effectively everybody still needs a down payment...
This in no way fixes the supply side of housing, while increasing demand by a large amount.
So you just end up with housing prices jumping up, and effectively everybody still needs a down payment - because the loan their salary qualifies them for won't buy a house if they don't bring money to the table.
There's a difference between requiring a down payment and desiring a down payment. All that requiring it is doing is concealing the true population that is only renting because they can't afford...
There's a difference between requiring a down payment and desiring a down payment. All that requiring it is doing is concealing the true population that is only renting because they can't afford the down payment. People are already paying the mortgages on where they live...just that only the landlord (whom had the assets to outbid them) is benefiting from it.
And would people not be able to get mortgages to build homes? We already have FHA loans that work in much the same as I describe...except they still require a 3.5% down payment, and mortgage insurance is mandatory.
Additionally, the whole nation isn't having a housing crisis. There's almost 3,000 homes for sale in Philadelphia for well under $200,000. Even with rates as they are, that's still well under $1,800 for a monthly payment. The problem is that a lot of people have trouble scraping together even $9,000 for an FHA loan. And the reality is a lot of these places (or their neighbors) are already being rented for $2,000 or more per month...the landlord is just unloading the property.
I feel much the same way when people argue that inflation due to raising wages is a problem, because demand spikes. All that shows is that demand is artificially suppressed because people are woefully underpaid.
You're right, this is very location dependent. Some places new builds are bottle-necked by regulation, other places the contractors are booked solid months into the future. Here, money would just...
And would people not be able to get mortgages to build homes? We already have FHA loans that work in much the same as I describe...except they still require a 3.5% down payment, and mortgage insurance is mandatory.
You're right, this is very location dependent. Some places new builds are bottle-necked by regulation, other places the contractors are booked solid months into the future. Here, money would just rise prices of existing houses and building costs. Other places, throwing a little money at the problem would result in lots of new builds.
The problem is that a lot of people have trouble scraping together even $9,000 for an FHA loan.
This will sound callous, but maybe it's not a good idea to buy a house if you can't manage to put $9k to the side. Because houses need upkeep and repairs, often exceeding $9k. Some of those repairs (roof, burst pipes) cannot be deferred much without devaluing the house massively.
I feel much the same way when people argue that inflation due to raising wages is a problem,
I know the research on that, it doesn't work this way. Still, removing the down payment requirement would certainly put a lot more people on the market looking to buy right now. And housing supply is certainly less elastic than the supply of food, clothing, electronics or entertainment.
True, but it's a lot easier to save up $9k when you're paying $300 less a month. I pointed out elsewhere: short of needing near-term roof replacement (which should massively devalue the home...
True, but it's a lot easier to save up $9k when you're paying $300 less a month. I pointed out elsewhere: short of needing near-term roof replacement (which should massively devalue the home anyway if it's a non-metal roof with more than 10 years on it) or natural disaster, you could do almost 0 maintainence on a home for 3-5 years, sell the home for $10k less than you paid for it, and still be less-behind then renting.
That's what cash-out refinances are for. If I were to do that, I could pull out $100k easy from my home to repair damn near anything, and I only paid in about $12k in equity so far....thanks inflation!
The only way you come out ahead with renting is if you buy a home that was sold as move-in ready but was actually falling apart. Or you move every year.
Rent is the most you'll pay in a month for your housing. A mortgage is the least you'll pay. You can rent a million dollar house because someone else is responsible for covering any problems with...
Rent is the most you'll pay in a month for your housing. A mortgage is the least you'll pay.
You can rent a million dollar house because someone else is responsible for covering any problems with the property, thereby reducing risk to the bank. You turn around with the same amount of income you had when renting and ask "Why can't I afford to cover all the risk of this property? I'm renting it!" Just look at the price difference between renter's insurance and homeowners insurance.
Like, I get the point and don't disagree with the author but, let's be realistic, there is a realistic reason why renting is 'cheaper' than owning even if it's not cheap.
Presuming the home doesn't need any work when you buy it... If you take 50% of the difference between renting and buying, and put it in a rainy day fund for maintenance, short of a near-term roof...
Presuming the home doesn't need any work when you buy it...
If you take 50% of the difference between renting and buying, and put it in a rainy day fund for maintenance, short of a near-term roof replacement you'll have plenty of funds for most anything that could go wrong short of a disaster that destroys most of the house.
And even then...if you keep a house for 3 years and sell it for $10,000 less than you paid for it, assuming there was no inflationary value increase.... you're still no worse off than renting.
Exactly!! In cites I've lived in, even if the owned home has no appreciation whatsoever you're still coming out ahead due to insanity with rent. Plus, one has to account for the sudden and awful...
Exactly!! In cites I've lived in, even if the owned home has no appreciation whatsoever you're still coming out ahead due to insanity with rent.
Plus, one has to account for the sudden and awful jump in rental costs if you're forced to move: on limited time and in a season not of your choosing.
Almost true :) There's a huge amount of emotional and financial cost when one is evicted. I was a cheerleader for renting when I was young, before I got evicted the first time for being the wrong...
Rent is the most you'll pay in a month for your housing
Almost true :)
There's a huge amount of emotional and financial cost when one is evicted.
I was a cheerleader for renting when I was young, before I got evicted the first time for being the wrong race, then again when I was pregnant, and once more when they renovicted for higher rent.
We just couldn't afford to rent anymore.
Neither renting nor owning is a silver bullet, one just has to choose the option that allows the highest amount of savings.
Edit: when I say evicted it was all legal and blah blah blah, but from the renter side it doesn't matter what it's called when it amounts to the same thing - being homeless in 30, 60, 90 days and every option you look at is twice as much and require you to give up your elderly cats.
I'm not a cheerleader for renting by any measure, there's plenty of risk associated with it. Just, like, not as much of a monetary one. I have been rate jacked out of apartments, 'renovated' and...
I'm not a cheerleader for renting by any measure, there's plenty of risk associated with it. Just, like, not as much of a monetary one.
I have been rate jacked out of apartments, 'renovated' and so on. I've also had pipes burst and get a comped hotel room for the week and a half, water heaters going out, regular pest control, replaced windows and door latches. The good and the bad.
Also, owning, had a water heater leak during move in and flood the garage full of my moving boxes causing a whole mess of mold and damage to my new place. Random insects intruding into the house (just making paths too! Not even trying to steal my food) and various things that necessitate me to vacate the premise for them but not having the funding to afford a week plus at a hotel and the repairs.
Both have advantages but both suck if you're not rich.
And the way my landlords handled those exact situations was: Walkin with a can of RAID and spray a few spots. Ignore it, or tack $200 more on to my rent for breaking the water heater. At least as...
And the way my landlords handled those exact situations was:
Walkin with a can of RAID and spray a few spots.
Ignore it, or tack $200 more on to my rent for breaking the water heater.
At least as a homeowner I am empowered to fix things on my terms.
I can't pretend that your experience is in any way unrealistic. One of my landlords sent $90 to collections despite me leaving all my forwarding information (I'd moved less than a mile) after they...
I can't pretend that your experience is in any way unrealistic. One of my landlords sent $90 to collections despite me leaving all my forwarding information (I'd moved less than a mile) after they planned 'renovations' and nearly doubled the rent.
And the thing is...most renters don't know their rights. And even if they do....do they have the time and money to sue their landlord? Tons of illegal evictions happen all the time because of it....
And the thing is...most renters don't know their rights. And even if they do....do they have the time and money to sue their landlord?
Tons of illegal evictions happen all the time because of it. As well as bullshit claims to justify keeping first/last month's rent.
It's the same reason why wage theft dwarfs all other types of theft by a margin of 2:1.
True. I'm a landlord for a very average house in a major Canadian city. I have great tenants but due to incredible hike in interest rates, their rent has gone up considerably in the last two...
Rent is the most you'll pay in a month for your housing. A mortgage is the least you'll pay.
True. I'm a landlord for a very average house in a major Canadian city. I have great tenants but due to incredible hike in interest rates, their rent has gone up considerably in the last two years.
However when their stacked washer/dryer died of old age just 6 months ago, they did not have to shell out the $2300 to replace it. When the dishwasher (only 5 yrs old) died last month, they didnt have to pay a repair guy $150 to come out and tell me that it would cost $450 more to fix a $600 dishwasher, nor did they have to pay $1200 to put in a new one. Their front window has lost the seal between the window panes and one in the back of the house has severe weathering that's damaged the casing. I was quoted $3200 to fix those and will have to do those in spring. That'll be $6700 in extra expenses in one fiscal year. Assuming nothing else needs fixing.
They wanted to own a house at one point. And then house prices jumped and now they have told me they are quite happy to rent. I dont blame them. I wish I had a landlord who would pay for all the upkeep of the house. Such is the joy of ownership.
I agree with a lot of the comments already made and just want to point out a thing about choosing where and how to live: for a lot of people lifestyle changes and location to settle down revolves...
I agree with a lot of the comments already made and just want to point out a thing about choosing where and how to live: for a lot of people lifestyle changes and location to settle down revolves around family.
While the author has nailed having the right location (geographically) and the right location (within SF), they are renting yet unable to save enough money to be comfortable about buying something bigger and better if they wanted to. I think the true complaint of the article is that they can't if they wanted to (in the same area). "Upward mobility" is about having the capacity to earn enough to live a decent lifestyle in a decent place and be saving some money at the same time. To gain that, it's long been suggested that people rent for as long as they can if, and only if, they're able to save money. If you can't save money while renting, you might need to downsize part of your lifestyle so that you can be building a nest egg not just for a home, but for an emergency.
The author goes back and forth between saying that they like where they are, and feel financially comfortable, but also that they wanted to move, but can't because of a variety of reasons. That's fine. It seems to me like the author is still in the phase of "I don't want to commit to living in one place the rest of my life." That's not a financial reason, but his reason definitely affects his spending! That's fine, too. There's a disconnect though, in that the author rattles off a lot of mainstream views of the problems with real estate -- which is fine -- while not addressing that the health of their extended family should be or will become the primary factor in the author's family's lifestyle. Taking care of family is expensive and often an unexpected setback to adults in their 30s, 40s, and 50s.
Towards the end of the article the author finally mentions that family emergencies over the past year had drained a lot of their savings. I won't make assumptions about the author's lifestyle, but it seems like they're not properly planning for family emergencies (or those emergencies were extremely expensive. Or both, thanks America.). The problem is that "family emergencies prevented me from buying a home" is the article that a lot of Americans would be writing if they had the column inches to do it. Racism, poverty, and geographic socio-economic instability are all very real problems that tend to hit already-struggling areas and are certainly a part of this. But one of the reasons people of many ethnicities live close-by one another is because they're also living near family and they can't afford to live further apart. They take care of each other out of necessity.
It's a common theme in the US to have relatives retire near you (which the author has priced his family out of doing) or for the adult children to move back to their parent's area. For people who could never afford to leave? They're still there. And they're often saving money by doing the care-taking themselves, which further prevents them from being able to save money to buy into an equity-building scheme like real-estate (or even invest in the stock market). Recently I took care of my terminally ill relative and if I replaced my 18-hour-a-day care-taking with outside help, at $450/day, the expenses would've been much more than I would've made over the same period of time. It was literally cheaper for me to take care of her myself than to work and pay someone else to do it. And I was still bleeding money, but I am thankful I had the means to do it, because the alternative would've been even more expensive. A nursing home would've cost at least twice as much just for personal care, not even including rent and travel fees associated with trips to the doctor and ER. Plus, if I'd paid someone else to be with my relative during her last weeks and months, I wouldn't have been able to spend time with her; that's something that the author may not be factoring in to his needs or his extended family's needs, but for a lot of families this is a choice they're confronted with and it changes everything.
TL;DR: So what this article should really be about is how healthcare costs in America compound issues caused by systemic racism and feeble housing assistance for minorities and the poor who, even while living in multi-generational housing, have spent generations unable to build enough equity to live the American dream.
If someone is significantly disabled and needs to have a caregiver available at all times they aren't asleep, and a caregiver could even be found at $25/hour, you'd need three people taking 6 hour...
If someone is significantly disabled and needs to have a caregiver available at all times they aren't asleep, and a caregiver could even be found at $25/hour, you'd need three people taking 6 hour shifts, or maybe 2 people taking 9 hour shifts.
365 days a year * 18 hours of care per day * $25 dollars an hour...
Edit:
My mom had ALS, and part of why she decided to end her life when she did was because she could see that her entire life's savings would have been eaten up by less than another year of care. She passed when she did in part so that I could have some small inheritance remaining at the end of it. Even another 6 months would have bankrupted her, and possibly me, as I was spending far more time with her than running my business. Care is insanely expensive just because of the sheer hours needed.
I see, thanks. I guess I didn't really consider the enormity of paying for 18 hours a day. I guess I saw the hourly rates and just thought to myself that it's not very high without considering...
I see, thanks. I guess I didn't really consider the enormity of paying for 18 hours a day. I guess I saw the hourly rates and just thought to myself that it's not very high without considering that you're paying multiple people's annual salaries. I'm sorry everyone had to deal with ALS. That's about as bad as it gets.
I kept getting told I should get paid through a state program to take care of my partner after he came home from the hospital paraplegic. People were confused why I wouldn't. And while I have a...
I kept getting told I should get paid through a state program to take care of my partner after he came home from the hospital paraplegic. People were confused why I wouldn't. And while I have a somewhat principled stance of not wanting our relationship to change like that given so many other changes, I mostly need someone else to take a load off me for 20 some hours a week more than I need to get paid $1200 a month. (She's not getting paid $25/hr but she's not skilled care)
And I could never afford even that many hours out of pocket.
I would make that trade in a heartbeat. 20 hours a week of time where you don't have to be "on", when you need to be so all the rest of the time is absolutely worth $1,200 a month.
I would make that trade in a heartbeat. 20 hours a week of time where you don't have to be "on", when you need to be so all the rest of the time is absolutely worth $1,200 a month.
the author seems extremely fixated on being in the bay area, not even for job or family reasons.
And here is where my real estate focused mind cant understand the author. How can he place more importance on trivial first world life style "niceties" over cheaper monthly payments, building equity, and housing stability for his children?
I'm sorry what. House prices dropping $20000 is but a light sneeze. It's stainless steel vs white fridge. It's a Costco patio set on the porch. That's practically nothing. Racial discrimination for neighbourhoods is absolutely a real thing: consider also how "school catchment" can mean several hundred thousand across a street .....$20k is nothing.
This is extremely important advice but I will also amend it with "live smaller, but buy bigger if your city has renters". Buy that extra basement suite. Buy that extra kitchen and extra washroom. In desirable cities it's awful but you can find people like the author paying your mortgage for you.
I'm so glad these programs exist. Assuming the author pays at most 30% of his income towards housing of $4000 a month, that's a $160,000 salary. For these $2m houses, a 20% downpayment is a whopping $400,000......but that's a mere 8 years rent.....Not many of us have that kind of cash ever, or ever will. Not if we keep are forced to keep renting and paying down someone else's mortgages.
I can't tell if this is in jest or not, but if it's not, I am of similar mind to the author, even if our specific wants are not the same. I would always prioritize location over things like how large or nice the house is, how expensive the house is. I'd really rather rent forever in NYC than own a McMansion in Wisconsin.
AMA
Well, that’s exactly why places like NYC and the Bay Area are so insanely expensive.
There are a huge group of people that think that the United States consists of New York, LA, San Francisco, and giant empty corn fields.
There are dozens of nice, affordable mid sized cities in this country that are fantastic places to live.
If you have a country of 300 million people, of which whom a significant portion think that three tiny areas are the absolute best places in the country to live, of course those places are going to be insanely expensive and out of reach for most people.
I don’t really see that as much of a problem, except for the fact that there are people who are from those places, have their whole families and roots there, and are being priced out.
As for the author, if he wants to live in the most expensive real estate market in the country in a place he’s not even from? Yeah, I don’t see much of an issue with him having to pay for that privilege.
I don’t think there’d be much sympathy for someone who wrote a think piece about how they should be able to own a Lamborghini, after all.
Well, sure. I'm not the one complaining about housing prices. Both the bay and NYC could be much cheaper places to live in, although it would sacrifice the article author's dream of an idyllic, "moderately dense" lifestyle. I'm more addressing OP, who may be confused why anyone would choose to forgo cheaper housing in a different area.
I've been a lot of cities, and lived in many of them too, and to be honest none of them have really fit my wants.
As someone near SF, I'd be perfectly happy with the density significantly increasing if it also significantly lowered housing prices. Expand the high-rise towers in SF. Expand the city density down to Palo Alto. Make Palo Alto a major metro center. They won't let it happen, but it would still be a great place to live. Much better in many aspects. We could even keep the hills as is.
My friend, significantly increasing density doesn't equal lower housing prices. They will always build to "market rates".
See Tokyo, Hong Kong, Singapore etc
Yes it does. Tokyo is the perfect example. It has possibly the most affordable housing in the developed world, and it does so by issuing more development permits than the entirety of the United States despite a fraction of the land and a quarter of the population.
Yeah, a condo right in the middle of Tokyo (e.g. Shinagawa) is still going to cost you “city” prices but get outside of that even a little and prices start falling quickly.
A friend of mine rents a decent two bedroom top floor apartment with kitchen and living room in a quiet neighborhood not too far from Shibuya and Meguro stations for ~$700/mo, with all the amenities that come with living in Tokyo (such as essentials like groceries being within walking distance). That’s unheard of in major US metros.
In the cities that are still densely populated but are smaller in size like Fukuoka prices are substantially cheaper yet.
Of course Japan has other problems but I wouldn’t say housing prices rank highly among them.
And I think that's the scenario cities like Toronto and Vancouver are trying to avoid: build too much and the bubble collapses.
...are you arguing in favor of property bubbles or simply stating a fact? Objectively, empowering existing property owners to block all new developments is terrific for property prices and absolutely terrible for anyone that wants to move to the city.
I'm firmly in favor of the bubble bursting, hopefully forever. Homes are for living in, not for speculating.
But I'm stating the fact that the homeownership segment is a huge huge voting block and the government will nearly always make policies in favor of keeping prices going up forever, since the poor and the young don't vote, and they themselves probably have a whole bunch of investment property (spit). Nimby-ism needs to die.
Hong Kong is the only example where the prices remain insane. And that's largely because there's still way too many people for the available housing stock.
Tokyo has fairly affordable, family-oriented housing available. And Singapore is probably the most affordable urban environment anywhere. The government has a ton of clever policies to ensure ample availability of middle class housing.
Haha.....yeah HK prices arents going up further....I think as a city we've peaked. And in that regards we saw what happened to Tokyo before the turn, yes you are right.
So prices are immutably fixed? How can they go up and down then? If the state started de-zoning, issuing permits, and subsidizing building materials we’d see prices drop.
Those are good questions and I spent the last 30 years wondering how it is possible that in Hong Kong, Vancouver and Toronto, they have built like crazy and yet prices have not come down. I was so convinced it was an unsustainable bubble, back in early 2000s, that I was begging my parents to sell and we'd just rent. They held on despite every good logical sense, and they ended up being right.
Well this year the HK administration failed to sell any land, which is a shocker and a first time for everything. It's definitely not because there's way too much affordable housing for young people that's for sure.
Real estate isn't isolated basic economics of supply and demand: there's always multinational investors and faith in the local or global economy mixed in with jobs and overall human emotions.
All I was saying is that it's s possible for unlimited building permits and unlimited pricing IF there is also unlimited money flowing into those same few acres.
Correction, three tiny areas managed to avoid the faddish sprawl based development pattern such that they retain any sort of potential for a vital, walkable urban lifestyle. This isn't a property of the soil, these are facets of the built environment. If we were willing to build transit and dense, mixed-use development elsewhere people would settle there as well.
And they do, the city centers and downtown cores of revitalized cities have lots of people moving in. The problem is it's illegal to build like this in most places and where they try they never go big enough to get the necessary level of scale before it begins to reap rewards.
The prices in SF, NYC, etc. would be lower if there were just more places that modeled their urban plan on those cities.
LA and the Bay Area definitely have not avoided sprawl. Manhattan has only has based solely on the fact that it’s an island, but the rest of the NYC metro area hasn’t. The tri state area is one of the most classic and iconic examples of urban sprawl there is.
Philadelphia, Boston, Chicago, Denver, Pittsburgh to name a few all have good public transit systems by American standards. LA also famously has some of the absolute worst in the world for a city of its size.
It’s not public transit pulling people to those places. It’s mostly jobs, but also the allure of living in a place you hear romanticized so often. I just wish people would consider that the US is a huge country with dozens of great cities, and there’s nothing so magical about those three places. They’re unique and offer things nowhere else has, but other cities also offer unique things that nowhere else has too.
As someone who moved out of the SF Bay Area coming up on 3 years ago and has a large degree of freedom in choice of location due to remote work, the problem is finding these cities.
When getting started there’s no big list of cities you can filter based on arbitrary criteria to narrow down a shortlist, which leaves you to looking into places mentioned in e.g. Reddit discussions, but of course only a fraction of these locations will ever come up there.
Even once you’ve got a list of cities to look through, research is even more difficult. There’s little in the way of standardized data which makes it a challenge to figure out things like neighborhood history/vibes, industrial hazards, crime rates, climate, etc. Sometimes all you’re left with are again things like Reddit discussions.
This is one of the reasons I ultimately landed in a suburban city not too far from a major city; it was substantially cheaper than the SF Bay Area (though not as much as I would’ve liked), but it was one of the areas which had decent data availability thanks to being part of a bigger metro, which let me feel like I wasn’t flying blind and could make a reasonably informed purchase decision.
That I 100% agree with. If you haven't seen citynerd on youtube, he crunches all kinds of data and attempts to normalize it to compare apples to apples on a whole ton of different statistics about cities. He's helped me decide places I'd like to visit and check out a ton. It would be nice if the federal government provided an open service to do something similar.
Queens, Bronx, Brooklyn, also don't sprawl. The sprawl is the stuff that got built up after the 60s but the city centers remained livable because they were already too built up to undo by then. They tried, with some of the Robert Moses BS. But the cities are, thankfully, beginning to undo some of those mistakes now.
The romanticization also didn't just happen. It happened because people have lived there for a long time and you can go there today and still see things as they were romanticized because they haven't been torn down and replaced with strip malls and parking lots. My hometown was also heavily romanticized as a bucolic idyl. But they replaced the ranches with gated subdivision and golf courses and decided what ailed downtown was the lack of parking so turned it into a town square that looks like an island in the middle of a sea of asphalt. Nobody romanticizes a theme park experience like that.
Moreover, the transit brings the jobs. The lack of mobility and the density is what creates the agglomeration effects that generate more economic vitality.
I don't think you can really compare wanting to like in New York, LA or San Fransisco to owning a Lamborghini – one is a luxury good and the other is not. For a lot of people it's a massive career advantage to live in a big city, especially if you work in services. I can also very much understand not wanting to live in the middle of the US because of how conservative it is (which is even more salient if you are an ethnic minority).
They're also very much not tiny places – the NYC metropolitan area has a population of ~23 million people, the LA metro population is about ~18 million, and SF about 7 million. Together that's something like 15% of the population of the US.
Places can be tiny while also being highly populated. Compared to the rest of the area of the US, even only compared to the urban areas in the US, yes, those three cities are tiny. The supply of housing in those places are limited by geographical bounds. LA and SF could gain a little bit more supply by increasing density, but NY probably can’t, so compared to the amount of people who want to live there, they’re very small.
The whole purpose of an economic system is distribution of limited resources, and the fact is that more people want to live in these very popular areas then those areas can support.
I don’t see an issue with those places being priced to reflect that. Like yes, you will not be able to afford move to SF and buy a house downtown unless you are very wealthy. Why is that a problem that needs to be solved?
The problem that does need to be solved is people being priced out of their own homes where they’ve lived their entire lives and where their families have lived.
If moving to NY or SF or LA is such a great career move, then people shouldn’t have issues with making the investment to pay to live in those places.
Regarding conservatism; again, that’s the fallacy of assuming that 3 or 4 cities are bastions of progressivism and everywhere else is a backwards redneck wasteland. We don’t have a democratic president because people from 4 cities voted for him.
most midsized cities are left leaning. The entire middle of the country is not conservative. Minneapolis, Kansas City, St. Paul, Chicago, Denver, etc. These are all very liberal places by the standard of the entire country; more progressive than most places in the states of California or NY.
I don’t have much sympathy for a transplant to the Bay Area that’s able to afford housing, with no real reason to live there except that he likes it, complaining that he can’t purchase a home there. There are plenty of homes that I would like to live in that I can’t afford. The world is full of scarce resources that need to be allocated in some way, and few are as scarce and limited as geography.
As someone who grew up in LA, lived in SF and moved to Austin for more affordable housing, personally the lifestyle change did not work for me. This is anecdotal, but a liberal city in a red state is not the same. The city itself was not the same culture. Diversity was different. Segregation was different. While it has definitely worked for many others, the savings was not worth it for my family personally. And I know others like myself.
There are blue states that aren’t California and New York. Texas isn’t exactly known for its forward thinking ideas. But I mean, yeah, the culture will be different from LA everywhere that’s not LA. That doesn’t mean the culture in those other places or better or worse necessarily.
I also don’t think that just because someone particularly really really likes a specific, very expensive, very popular area, they’re entitled to own a house in that place.
I’m with you on some of this, but we definitely have a different interpretation of “can’t afford” - if they’re comfortably able to rent it, which it sounds like they are, it’s reasonable to expect they should be able to buy it, with all the security, stability, and long-term cost advantages that brings.
Is it? Renting is a much different arithmetic than buying.
When someone buys a property, they typically lose money on rent for the first few years they own it. Renters are paying less than the mortgage payment in most cases, and definitely less than the mortgage payment + insurance + property tax + maintenance. Most people buy property with the expectation that they’re building equity in an appreciating asset, so they’re willing to lose money on a monthly payment it until it appreciates enough that they’re able to charge a higher market rate for rent.
This person that is renting the house may have been able to afford it had he been making what he’s making now 10 years ago, but rents steadily increase while mortgage payments don’t.
If the gulf between his rent and what the house is worth is absolutely massive, that doesn’t mean that the house is overpriced, it means that he’s getting undercharged for rent.
It’s not exactly an uncommon situation that someone is able to afford to rent a property that they’re unable to qualify for a loan for. That’s not unique to the authors market at all.
I appreciate the reply, because that is indeed a very different way than I’d think about affordability.
I’m looking at it less as a question of exact month to month cash flow, more as a holistic calculation over at least 5 years (probably not worth buying if you plan to move faster than that) and potentially much longer. Add all that up, accounting for equity and opportunity cost as well as liquid cash, and owning is highly likely to be the better financial proposition - because if it weren’t, landlords couldn’t make a profit.
I’m working on the assumption that if they’re renting in the vicinity of $4k/month and not hurting from it, there’s flex in the budget to pay an extra thousand or even two per month with some short term belt tightening as long as there’s a compelling reason to do so - like the knowledge that much of that money is converting to equity, and that it’ll become less painful year on year as the inflation adjusted cost of the mortgage payment goes down and the rent they’d otherwise be paying goes up.
So the way I see it, the problem is exactly as you say: they can’t qualify for a loan on that house. I just don’t think that means they can’t afford it. I think it means they can’t save a six-figure down payment in a reasonable amount of time, and that’s a very different thing.
You're probably right that someone paying $4k a month could conceivably afford a $6k a month mortgage, but much less comfortably. A landlord may be willing to take a risk in renting to that person for $6k a month, but a bank is much less likely to be willing to extend a loan. The reason behind that is that the risk profiles a very different. If a renter stops being able to make payments, you typically can evict them within 6 months or so and then rent a the property again. If someone defaults on their mortgage however, you need to foreclose their house, evict them, list it, price it to sell reasonably quickly, and then go through the whole real estate process and potentially underwrite another loan. One is significantly more time consuming and expensive than the other one. Additionally, a landlord only expected to make money off of a renter for a one year lease. A bank expected to make interest for 30 years.
Landlords are in the business of owning property, so having empty properties sucks, but it's part of the business. Banks don't like owning property. It's not part of their profit strategy, so foreclosure is something they really, really try to avoid.
Those are some of the reasons why landlords are typically more willing to eat some risk that banks aren't. That's also the "benefit" of landlords, if you buy into that argument; they're able to provide housing to people that banks would never even consider because they're too risk averse.
I prefer the politics where I live (and I honestly am glad I moved out of the state I grew up in though it surprisingly went blue at least for president last election even though it's usually a solid red state, but it still has politicians like Margeret Taylor Greene coming from it). I prefer the climate where I live (especially as temps are getting hotter). I certainly don't want to be in a red state at all period and even many purple states have some shitty politics. I would miss this area. I love the mountains. I love Puget Sound. I would be very sad to leave this state (and I would be extremely depressed if that meant moving back to the east coast or even the midwest... ugh).
Being here was my dream since my parents first brought me here.
So no, I'm not moving just to get a bigger house or more things.
What are the "niceties" that you personally enjoy about NYC? I ask because I'm in college and will likely have the opportunity to look for a job pretty much anywhere in the country afterwards, but I'm really not sure what I'm looking for in terms of the place.
I can imagine access to tons of activities and culture on your doorstep being a fun nicety in New York but the Wisconsin lifestyle might come with a lot more peace and quiet if you value that more instead. "The city is my living room" and having a big private living room both appeal to me in different ways :)
The feeling of liveliness, especially Manhattan. Having lived as a child in Beijing and Taipei, nothing quite replicates the sheer density of East Asian cities in North America. Closest is probably Mexico City.
Being able to step out and walk around, see people, go to stores, go to restaurants. As an amateur photographer, NYC is one of the street photography hubs for a reason, and it’s not just the same taking pictures of your lawn for the 50th time.
Having friends nearby. A lot of people I knew from college and high school just naturally ended up being in NYC. It’s probably the area with the second highest number of old friends, besides SF/South Bay where I went to college. Many people visit as well.
But in the end it’s mainly two things: the feeling that you’re somewhere that’s “alive”, and being able to step out and walk and enjoy yourself whenever you want to.
One thing I hated in suburbia is the dynamics of traffic. I don’t mind driving per se, but practically it can be pretty bad. Traffic is worst during rush hour. Evening rush hour is also, yknow, the time when you want to do things during weekdays. It’s like yeah, there’s a park I could drive to, but it’d be a brutal 45 minute slog to get there when it’d be 10 minutes without traffic. And unlike walking, driving in start and stop traffic should be considered a form of torture. It can feel like you’re trapped between work and home because it’s an insane pain in the ass to go anywhere after work because of traffic and everything is closed by 10pm anyway. Also, drinking is just harder. People just drink and drive and guesstimate their BAC, or just not give a shit, but I’d really rather not.
Oh, and this one is very specific, but I’d like to see at least some representation of my ethnicity and culture around, and many areas in the US, are still pretty, for lack of a better word, “white”.
As another perspective on NYC, I enjoyed some neighborhoods like Bed-Stuy in Brooklyn and the Upper West Side in Manhattan, but I really just ended up hating the city the longer I was there. This article perfectly captured my feelings even when I stayed in Billionaires' Row.
NYC has so many things going for it (transit, biking, location, endless activities, food, etc); however, there are so so so many more missed opportunities and painful things about living in the city:
All that said, you're right, there's nothing else quite like NYC in North America. Everyone should consider visiting once.
I spent a week in NYC, and what it taught me was that if I wanted to understand the city at any sort of depth I'd need to dedicate at least 3 months to living there and exploring. It's just so impossibly densely packed with stuff.
Living in NYC also feels a bit like going back in time in so many ways.
The buildings are old, and most of them haven’t had significant updates. The floors and walls tend to be thin, the walls are old and crumbling, most of them don’t have centralized climate control or modern networks or modern door locks or modern appliances. The subway system feels like it’s from 1970, because in many cases it is.
There are modern standards of cleanliness and how businesses should operate that just aren’t followed in NYC. Many think of New York as this modern, forward thinking, interconnected city that sets all of the trends, but there are so many businesses that still won’t even accept a credit card.
For me it’s a cool place to visit, but I’d never want to live there again. It seems like it just goes out of its way to make peoples life harder, with the justification that 853 New York, and that’s just the way it is, that’s the way it’s always been, and that’s the way it always will be.
No I'm 100% serious. But perhaps once upon a time a very young me, growing up in HK and merely tolerating how "empty and dead and backwaters" Vancouver is, would also find it hard to believe.
I wasn't talking about McMansion lifestyle vs Bay Area life: I was specifically thinking about equity and savings and sacrificing lifestyle choices for one's children, of which the author has several.
$4000 a month is crazy pants money to "throw into the salty ocean", aka rent. This is what drives ethnic minorities to open restaurants in middle of nowhere towns in the prairies tundra: savings for the next generation.
How is he going to afford university and downpayment for his multiple kids when he can't even afford down payment for himself?
He didn't mention if his job is mobile or not, but "downgrading" to even a smaller city like Seattle or working in Redmond (I'm assuming he's in tech) would allow his family to save like crazy compared to $4000/month and no equity.
My parents traveled to a whole other continent and NONE of their living conditions improved except for how much they were now able to save. And it's from those savings that other living niceities slowly start to trickle back in.
Again, not McMansion: rent a shoe box for $1500/month or less, on anywhere else. Then buy a tiny tiny house and rent out half to pay the mortgage.
What he's doing is well and good without kids: live it up and worry only about your own retirement. But that's an incompressible way to live as a parent.
I have a feeling your parents moved for opportunities, not so that they could get a mortgage. One of the niceties of high cost of living areas is relatively higher income opportunities. Even with remote work being more common, it’s not necessarily that reliable these days. Getting stuck in KC and laid off from a remote SF job could cost significantly more than the rent you would be paying in SF.
Um... last I checked, you are probably better staying in California than living in Seattle. Wages match more what cost of living is in California then Seattle (I live here. I know at one point we were rated the most overpriced place to live even though yes, Cali is more expensive, because the wages here did not match what the cost of living is).
That's the neat part; you don't.
Jokes aside, I think a lot of it comes down to what you personally prefer in terms of population density. Some other people in this thread are talking about how they can't stand the boring suburban life and prefer to have people around and a vibrant city life. And that's fine for them, but a lot of us prefer some peace and quiet.
I grew up in a major city. Traffic was a nightmare. Crime wasn't rampant but it was definitely present. Housing prices and other costs of living became outrageous. Most of my friends moved out after college and are now scattered across the US. A lot of what the city offered, and what other people seem to love if you read the other comments here, is how it felt 'alive' at all hours of the day. That's exactly what didn't want.
So after college I moved to a much smaller town some 4.5 hours away, so not the thousands of km that you mentioned, but hundreds. Traffic here is non-existant. Cost of living is actually affordable which is a massive reason just by itself. And the fact that there's no real active nightlife here doesn't impact me in the slightest, since I'd rather be at home with family anyways.
Oh and the safety aspect is one I never really thought about until I moved here. People just leave their bags in their cars when going into a store. They sometimes don't even lock the cars. Tons of people leave their garage doors open for hours on end, whether or not they're actually in there doing something. I know some people here who don't even lock their front doors! All my neighbors just let their kids roam freely all day without a single care for any dangers out there since there's not much traffic in my immediate area. Like little 5-year-olds out and about playing in the streets without any adult supervision.
Absolutely insane stuff to someone like me who grew up in a large metropolitan area where everyone KNOWS not to leave valuables in your car, or your front door unlocked all day, or your small child unattended. Took a good while before I got somewhat used to it and even still I still don't feel comfortable leaving my garage door open all day, I still cover/hide things inside the car when I park it somewhere public, and I'll probably always supervise my kids at that young of an age.
I can see how it might be harder for someone with large family roots in one specific place, but there are tons of good reasons for wanting to move to somewhere that's more calm, quiet, safe, and doesn't cost an arm and a leg.
I think it’s much harder to understand if you’re not from a massive country, geographically.
It’s not the same as an Italian moving to Denmark, even if you spoke the same language.
Americans have a shared culture, shared laws, shared history and so on. I’m from New York, but I still have a lot more in common with someone from Alabama than someone from Australia, even though we speak the same language. Americans are also generally outgoing and willing to talk to strangers, which I’ve noticed isn’t the case with a lot of Europeans, so making new friends here isn’t quite as hard as it would be in many European countries where many people’s families have lived in the same city for a thousand years. We’re a lot more willing to expand our social circles, maybe because we have a culture of moving around a lot.
Starting over is still hard, but I don’t think it’s quite the same.
Oh I moved to the Bay Area for plenty of reasons ;) — the weather, the food, concerts, hackerspaces and hackathons, endless gay bars from leather to daddy to kink to sports, drugs, tech talks and networking, robot cars, and kink and sex parties and house orgies.
Can't get that in Wisconsin.
For what it's worth, I live in Australia and know a ton of Europeans who immigrated here for the big open spaces and the benefits they bring — lot of outdoorsy activities, more opportunities to build their own home, etc. You mention Italians being reluctant to move to Denmark, but Italian-born people make up one of the 10 largest immigrant populations in Australia.
It has been my personal experience that Europeans seem much more keen to move abroad than Americans. They are also much more keen to go on trips outside their country, which I imagine is related: Almost all of the European immigrants I know decided to move here after coming for a visit and falling in love with the country, whereas literally every American I've met here — myself included — moved here due to being in a relationship with an Australian and had never previously visited.
For me, the reasons were economical:
My tiny apartment rental switched up for single house mortgage saved $200/month. (Yes there are associated costs but it was also not mice infested and falling apart, and we were no longer in danger of being evicted on a whim.) This move allowed us to save a little here and there, and was also for a job that paid a lot more. Economic refugees. (These were both "terrible" neighbourhoods by the way but it what allowed us to save. Moving to a better neighborhood that cost more constitutes "no reason" for me)
People usually move to a place where they start over completely new, and basically they work all day every day. Wake up, long commute, work work work, come home crash. That's it. So sometimes it doesn't even matter if they're on Pacific or Atlantic coast. Social connections are at an all time low. Europeans also need to understand the dangers of Americans living without adequate employer provided health care.
I don't think anyone likes this kind of move but it's very common. And its being common makes it more conceivable: we all grew up knowing many people who did this and are fine.
I wonder if the reverse is true: Europeans who are there now has ancestors who decided not to go to the new world, and over centuries, people who want to leave have left, leaving behind folks who don't move.
Even in a stable economical situation the peace of mind that one gets from trading periodically increasing rent and possibility of suddenly needing to move that brings for a practically fixed mortgage payment and only having to move if you want to is huge. It honestly shocked me how much stress disappeared as a result of buying.
Of course this is assuming that one buys within their means; going for the biggest mortgage available would likely turn out differently.
This author needs some serious perspective.
There are cities outside of the coasts. Minneapolis, Milwaukee (even mentioned in the article!), Chicago, St. Louis all have what this author is looking for, community and density-wise (to varying degrees). That’s just the few that come to my mind immediately. The article reads to me like it was written by a Californian who will always live in California complaining about California while justifying the state’s high cost of living. It’s fine to want to live there! It’s just odd to write about it as though it is so exceptional, particularly from someone who has lived elsewhere.
I replied to another comment here about the same thing. There are a significant amount of people who know very little about the United States, despite living here their whole lives. I get the impression that because of TV and Movies, many people think that the only places in the country that aren’t empty corn fields or suburbs are SF, LA, and New York.
The ironic part is the attitude is aloof snobbishness about the kinds of people they imagine that live in the kinds of places they’re imagining, somehow not realizing that America is chock full of nice cities, many of them walkable, safe, and pleasant places to live, and all of them more affordable than the three they’ve seen on television.
All of those also have Midwest weather though! As someone who's lived a lot of places, I can understand why someone wouldn't want to give up the relatively Mediterranean weather of Cali for a Saint Petersburg-like city life.
I think St Louis is more on the "vibrant" side than the vibrant side, if you know what I mean. It is what you make of it, maybe. It just dropped below 300k population after the last census. It's been dying for about 70 years now and only has about a third of its peak population.
Frankly, we need to get banks out of the mortgage business. Make mortgages available direct from the Feds, here's my proposed rules:
IRS gives the monthly borrow limit, some sort of relatively simple function based on prior year's income and direction it's heading. Ending somewhere like 25% of last year's income, but to smooth things out such that periods of unemployment don't ruin your borrow ability.
The rate is equivalent to the current Fed interest rate, plus say 1%.
No down payments, but if you've defaulted on a prior mortgage you're subject to a PMI, which is determined by some degree of how many missed payments you had before they seized the home back.
Private banks have the option to offer mortgages as well, but they'll be forced to offer even better terms.
Only allow the federal loan I describe be available for your primary residence.
Require a 10% tax on all loans secured for non-primary residences.
Or mandate that any time a secondary property has no tenant, it must be listed for sale for people intending to puchase as their primary residence, with the requirement they sell their existing primary residence.
Increasing demand will not fix a lack of supply. It might help certain people for a short while, but mortgages are already subsidized, and subsidizing further will simply make this mess even more painful to unwind.
Already the case. Looking at a mortgage comparison site, they claim the best rates are 6.09%, and the national average rate is 7%. OBFR is 5.31, so we're already well-around that 1% markup.
FHA loans can be gotten with a 3.5% downpayment as long as you've made a habit of paying most your other loans on time.
From my reply to someone else. Down payments only serve as an artificial barrier to people whom would otherwise be perfectly capable of paying a mortgage.
And yes, me, with a credit score of > 760 can get a 6.5% APR. Someone with only a 710 can only get 6.9%. And someone with a 640 can only get 7.5%. Anybody under 600 can't really get one at all. And wealthier people almost always have much higher credit scores (add this to the "list of ways being poor is more expensive").
All that tells me is that a 1% premium guess was probably too high. Lets make it 0.5% of a premium. And since it wouldn't be tied to credit score...a lot less shenanigans.
Assuming the general sentiment here is that rent payments are essentially equivalent to monthly mortgage payments, if someone doesn't have the wiggle room in their budget to save up the 3.5% for an FHA loan (or minimum of 5% for a conventional mortgage), how are they going to save for maintenance of the home? At the US median home price, 3.5% is only 13k or so - less than a boiler or a roof replacement would cost. When you own, that's coming out of your pocket when it needs to happen, which can't always be timed.
Sure, you can finance the big ticket items - but if you aren't able to save anything because you're living completely paycheck to paycheck, you likely won't be able to swing those new payments either.
Similar to credit scores, it's about managing risk. If you have a history of not paying your bills on time, it's riskier to lend to you and lenders need to be able to make informed decisions. If they can't mitigate risk through different rates for different customers, the alternative is simply that nobody except the absolute wealthiest will get loans because they're the lowest risk.
If the idea is that the government pays for it and guarantees they'll lend to anyone, that doesn't magically remove the problem - it makes it worse. Now instead of a company going under when they lose too many risky bets, you create a massive funding problem for the entire government.
Of course, you can argue that bailouts of large companies are more or less the same thing, but those probably shouldn't happen regularly either.
Man, if only there was this well-valued asset that could be seized and auctioned off if somebody didn't pay their debts.
Credit scores can make sense within the scope of unsecured personal loans. They make much less sense when backed with an insured asset.
And frankly yea...the wealthier guy whom always pays his debts can afford higher interest, they can subsidize the failures. The overall rate can rise to accomodate the risks.
Sure, they can foreclose if it comes to that. That process can take years, is expensive, and now the lender has to maintain and offload a significantly less valuable asset that's been neglected. There's also the people who were living there who have to deal with the stress and financial burden, and who ultimately end up unhoused.
Everyone loses in a foreclosure, it's better if it never has to come to that.
I think this would also require the feds to be in charge of the housing supply. If we had both of those changes then this is clearly a better system.
Give governments rights of first purchase in areas deemed to having a housing crisis seems a reasonable step in that direction.
I think it would help to strengthen squatters rights as well, reduce adversarial possession laws to like 5 years from 30.
This in no way fixes the supply side of housing, while increasing demand by a large amount.
So you just end up with housing prices jumping up, and effectively everybody still needs a down payment - because the loan their salary qualifies them for won't buy a house if they don't bring money to the table.
There's a difference between requiring a down payment and desiring a down payment. All that requiring it is doing is concealing the true population that is only renting because they can't afford the down payment. People are already paying the mortgages on where they live...just that only the landlord (whom had the assets to outbid them) is benefiting from it.
And would people not be able to get mortgages to build homes? We already have FHA loans that work in much the same as I describe...except they still require a 3.5% down payment, and mortgage insurance is mandatory.
Additionally, the whole nation isn't having a housing crisis. There's almost 3,000 homes for sale in Philadelphia for well under $200,000. Even with rates as they are, that's still well under $1,800 for a monthly payment. The problem is that a lot of people have trouble scraping together even $9,000 for an FHA loan. And the reality is a lot of these places (or their neighbors) are already being rented for $2,000 or more per month...the landlord is just unloading the property.
I feel much the same way when people argue that inflation due to raising wages is a problem, because demand spikes. All that shows is that demand is artificially suppressed because people are woefully underpaid.
You're right, this is very location dependent. Some places new builds are bottle-necked by regulation, other places the contractors are booked solid months into the future. Here, money would just rise prices of existing houses and building costs. Other places, throwing a little money at the problem would result in lots of new builds.
This will sound callous, but maybe it's not a good idea to buy a house if you can't manage to put $9k to the side. Because houses need upkeep and repairs, often exceeding $9k. Some of those repairs (roof, burst pipes) cannot be deferred much without devaluing the house massively.
I know the research on that, it doesn't work this way. Still, removing the down payment requirement would certainly put a lot more people on the market looking to buy right now. And housing supply is certainly less elastic than the supply of food, clothing, electronics or entertainment.
True, but it's a lot easier to save up $9k when you're paying $300 less a month. I pointed out elsewhere: short of needing near-term roof replacement (which should massively devalue the home anyway if it's a non-metal roof with more than 10 years on it) or natural disaster, you could do almost 0 maintainence on a home for 3-5 years, sell the home for $10k less than you paid for it, and still be less-behind then renting.
That's what cash-out refinances are for. If I were to do that, I could pull out $100k easy from my home to repair damn near anything, and I only paid in about $12k in equity so far....thanks inflation!
The only way you come out ahead with renting is if you buy a home that was sold as move-in ready but was actually falling apart. Or you move every year.
Rent is the most you'll pay in a month for your housing. A mortgage is the least you'll pay.
You can rent a million dollar house because someone else is responsible for covering any problems with the property, thereby reducing risk to the bank. You turn around with the same amount of income you had when renting and ask "Why can't I afford to cover all the risk of this property? I'm renting it!" Just look at the price difference between renter's insurance and homeowners insurance.
Like, I get the point and don't disagree with the author but, let's be realistic, there is a realistic reason why renting is 'cheaper' than owning even if it's not cheap.
Presuming the home doesn't need any work when you buy it...
If you take 50% of the difference between renting and buying, and put it in a rainy day fund for maintenance, short of a near-term roof replacement you'll have plenty of funds for most anything that could go wrong short of a disaster that destroys most of the house.
And even then...if you keep a house for 3 years and sell it for $10,000 less than you paid for it, assuming there was no inflationary value increase.... you're still no worse off than renting.
Exactly!! In cites I've lived in, even if the owned home has no appreciation whatsoever you're still coming out ahead due to insanity with rent.
Plus, one has to account for the sudden and awful jump in rental costs if you're forced to move: on limited time and in a season not of your choosing.
Almost true :)
There's a huge amount of emotional and financial cost when one is evicted.
I was a cheerleader for renting when I was young, before I got evicted the first time for being the wrong race, then again when I was pregnant, and once more when they renovicted for higher rent.
We just couldn't afford to rent anymore.
Neither renting nor owning is a silver bullet, one just has to choose the option that allows the highest amount of savings.
Edit: when I say evicted it was all legal and blah blah blah, but from the renter side it doesn't matter what it's called when it amounts to the same thing - being homeless in 30, 60, 90 days and every option you look at is twice as much and require you to give up your elderly cats.
I'm not a cheerleader for renting by any measure, there's plenty of risk associated with it. Just, like, not as much of a monetary one.
I have been rate jacked out of apartments, 'renovated' and so on. I've also had pipes burst and get a comped hotel room for the week and a half, water heaters going out, regular pest control, replaced windows and door latches. The good and the bad.
Also, owning, had a water heater leak during move in and flood the garage full of my moving boxes causing a whole mess of mold and damage to my new place. Random insects intruding into the house (just making paths too! Not even trying to steal my food) and various things that necessitate me to vacate the premise for them but not having the funding to afford a week plus at a hotel and the repairs.
Both have advantages but both suck if you're not rich.
And the way my landlords handled those exact situations was:
At least as a homeowner I am empowered to fix things on my terms.
I can't pretend that your experience is in any way unrealistic. One of my landlords sent $90 to collections despite me leaving all my forwarding information (I'd moved less than a mile) after they planned 'renovations' and nearly doubled the rent.
And the thing is...most renters don't know their rights. And even if they do....do they have the time and money to sue their landlord?
Tons of illegal evictions happen all the time because of it. As well as bullshit claims to justify keeping first/last month's rent.
It's the same reason why wage theft dwarfs all other types of theft by a margin of 2:1.
True. I'm a landlord for a very average house in a major Canadian city. I have great tenants but due to incredible hike in interest rates, their rent has gone up considerably in the last two years.
However when their stacked washer/dryer died of old age just 6 months ago, they did not have to shell out the $2300 to replace it. When the dishwasher (only 5 yrs old) died last month, they didnt have to pay a repair guy $150 to come out and tell me that it would cost $450 more to fix a $600 dishwasher, nor did they have to pay $1200 to put in a new one. Their front window has lost the seal between the window panes and one in the back of the house has severe weathering that's damaged the casing. I was quoted $3200 to fix those and will have to do those in spring. That'll be $6700 in extra expenses in one fiscal year. Assuming nothing else needs fixing.
They wanted to own a house at one point. And then house prices jumped and now they have told me they are quite happy to rent. I dont blame them. I wish I had a landlord who would pay for all the upkeep of the house. Such is the joy of ownership.
I agree with a lot of the comments already made and just want to point out a thing about choosing where and how to live: for a lot of people lifestyle changes and location to settle down revolves around family.
While the author has nailed having the right location (geographically) and the right location (within SF), they are renting yet unable to save enough money to be comfortable about buying something bigger and better if they wanted to. I think the true complaint of the article is that they can't if they wanted to (in the same area). "Upward mobility" is about having the capacity to earn enough to live a decent lifestyle in a decent place and be saving some money at the same time. To gain that, it's long been suggested that people rent for as long as they can if, and only if, they're able to save money. If you can't save money while renting, you might need to downsize part of your lifestyle so that you can be building a nest egg not just for a home, but for an emergency.
The author goes back and forth between saying that they like where they are, and feel financially comfortable, but also that they wanted to move, but can't because of a variety of reasons. That's fine. It seems to me like the author is still in the phase of "I don't want to commit to living in one place the rest of my life." That's not a financial reason, but his reason definitely affects his spending! That's fine, too. There's a disconnect though, in that the author rattles off a lot of mainstream views of the problems with real estate -- which is fine -- while not addressing that the health of their extended family should be or will become the primary factor in the author's family's lifestyle. Taking care of family is expensive and often an unexpected setback to adults in their 30s, 40s, and 50s.
Towards the end of the article the author finally mentions that family emergencies over the past year had drained a lot of their savings. I won't make assumptions about the author's lifestyle, but it seems like they're not properly planning for family emergencies (or those emergencies were extremely expensive. Or both, thanks America.). The problem is that "family emergencies prevented me from buying a home" is the article that a lot of Americans would be writing if they had the column inches to do it. Racism, poverty, and geographic socio-economic instability are all very real problems that tend to hit already-struggling areas and are certainly a part of this. But one of the reasons people of many ethnicities live close-by one another is because they're also living near family and they can't afford to live further apart. They take care of each other out of necessity.
It's a common theme in the US to have relatives retire near you (which the author has priced his family out of doing) or for the adult children to move back to their parent's area. For people who could never afford to leave? They're still there. And they're often saving money by doing the care-taking themselves, which further prevents them from being able to save money to buy into an equity-building scheme like real-estate (or even invest in the stock market). Recently I took care of my terminally ill relative and if I replaced my 18-hour-a-day care-taking with outside help, at $450/day, the expenses would've been much more than I would've made over the same period of time. It was literally cheaper for me to take care of her myself than to work and pay someone else to do it. And I was still bleeding money, but I am thankful I had the means to do it, because the alternative would've been even more expensive. A nursing home would've cost at least twice as much just for personal care, not even including rent and travel fees associated with trips to the doctor and ER. Plus, if I'd paid someone else to be with my relative during her last weeks and months, I wouldn't have been able to spend time with her; that's something that the author may not be factoring in to his needs or his extended family's needs, but for a lot of families this is a choice they're confronted with and it changes everything.
TL;DR: So what this article should really be about is how healthcare costs in America compound issues caused by systemic racism and feeble housing assistance for minorities and the poor who, even while living in multi-generational housing, have spent generations unable to build enough equity to live the American dream.
If you don't mind my asking, how the heck could caretaking cost $162k/year?
If someone is significantly disabled and needs to have a caregiver available at all times they aren't asleep, and a caregiver could even be found at $25/hour, you'd need three people taking 6 hour shifts, or maybe 2 people taking 9 hour shifts.
365 days a year * 18 hours of care per day * $25 dollars an hour...
Edit:
My mom had ALS, and part of why she decided to end her life when she did was because she could see that her entire life's savings would have been eaten up by less than another year of care. She passed when she did in part so that I could have some small inheritance remaining at the end of it. Even another 6 months would have bankrupted her, and possibly me, as I was spending far more time with her than running my business. Care is insanely expensive just because of the sheer hours needed.
I see, thanks. I guess I didn't really consider the enormity of paying for 18 hours a day. I guess I saw the hourly rates and just thought to myself that it's not very high without considering that you're paying multiple people's annual salaries. I'm sorry everyone had to deal with ALS. That's about as bad as it gets.
I kept getting told I should get paid through a state program to take care of my partner after he came home from the hospital paraplegic. People were confused why I wouldn't. And while I have a somewhat principled stance of not wanting our relationship to change like that given so many other changes, I mostly need someone else to take a load off me for 20 some hours a week more than I need to get paid $1200 a month. (She's not getting paid $25/hr but she's not skilled care)
And I could never afford even that many hours out of pocket.
I would make that trade in a heartbeat. 20 hours a week of time where you don't have to be "on", when you need to be so all the rest of the time is absolutely worth $1,200 a month.
And that's why he has a personal assistant. But it was people who don't have that experience of caretaking just knew the resources.
Mirror, for those hit by the paywall:
https://archive.is/XRDgx