Languish.org

http://fivethirtyeight.com/features/stuck-in-your-parents-basement-dont-blame-the-economy/

QuoteThe image of the 20-something still living in his parents' basement has become a well-worn media trope in recent years. And unlike some common claims about millennials, this one is true — today's young people really are living at home longer. In 1960, according to census data,1 less than one in six 25-year-olds still lived with mom and dad; in 2014, nearly one in three did. (Separate data from the Current Population Survey, which is used in the chart below, suggests that the trend continued in 2015.2) The Pew Research Center this week reported that for the first time in well over a century, more young people are living with their parents than with a spouse or partner.

It's tempting to blame the trend on the economy. As this chart shows, the share of young people living with their parents was pretty steady in the 1980s and 1990s and then rose rapidly after 2005, right when the economy was turning south. But that makes the continued rise in the number of people living with their parents seem like a bit of a mystery. After all, the economy has improved significantly in recent years: The unemployment rate for Americans ages 18 to 34 was 7.4 percent in 2015, down from 12.7 percent in 2010.

It turns out, though, that the recession wasn't what led millennials to move back into their old bedrooms (or to not leave in the first place). Rather, long-run shifts in demographics and behavior have been pushing them in that direction for decades. Most importantly, Americans are waiting longer to get married, a trend that long predates the recession. Other long-run trends in education, childbearing and racial diversity (blacks and Hispanics are more likely to live with their parents and are a growing share of the young adult population) have also played an important role. Economist and FiveThirtyEight contributor Jed Kolko recently found that demographic trends explain the entirety of the 20-year increase in the share of young adults living at home.

That doesn't mean the economy is irrelevant, though. The strong job market of the early 2000s overcame the demographic forces, allowing young singles to afford their own apartments and essentially suppressing the living-with-mom trend until the Great Recession hit. A similarly strong economy could in theory have the same effect today.

So why haven't young people started to strike out on their own? There are probably two reasons. First, the economy has improved for them, but it still isn't great. As I've written before, the unemployment rate understates the number of people who are out of work, and millennials who do have jobs are often working part time or for low pay. That's especially true for people without a college degree, who are also the ones most likely to be living at home.

Second, even when young people have good jobs, they often face financial pressures that weren't as common in past generations. Specifically: more debt and higher rent. Roughly 15 million Americans under 30 owed a combined $322 billion in student debt at the end of 2012, according to data from the Federal Reserve Bank of New York. (It's easy to blow this out of proportion, however: New data from the Cleveland Fed this month showed that the typical 20-something borrower pays about $200 a month in loans.) Meanwhile, rents have been rising rapidly in recent years and are particularly high in big cities, where young people are most likely to live.

The good news for millennials — and their beleaguered parents — is that the improving economy should help boost wages, making it easier for young people to pay their loans. The bad news, though, is that it also likely means rents will keep rising. Don't expect to get that spare bedroom back anytime soon.

Recession watch

The Wall Street Journal this week highlighted a potentially worrying sign for the economy: Companies are pulling back on temporary hiring. For most of the recovery, the share of workers that are employed as temps through staffing agencies has been rising, hitting an all-time high at the end of last year. So far this year, though, temp employment has been pretty much flat and has fallen slightly as a share of all jobs.

That might not sound like a bad thing. After all, temp jobs are typically low-paying — average pay is less than $17 an hour — and are by definition unstable. Many labor groups have seen the temp hiring boom as a troubling sign of eroding worker protections. But as the Journal notes, temp hiring can be an early sign of trouble in the job market. Companies are often reluctant to fire workers when business slows, but it's easy to let temporary contracts lapse. Temp hiring was one of the first indicators to slow before the last recession and was one of the first to pick back up again.

But temporary hiring doesn't have a perfect record as a predictor; it flattened out in the mid-1990s, for example, right before the job market entered a historic boom. And even if it is a warning sign this time, it doesn't mean a recession is imminent. In the last cycle, temporary employment peaked in late 2005, two years before the recession hit. Still, it's an indicator worth watching in the months ahead.

Immigrants, they get the job done

There were more than 40 million foreign-born adults in the U.S. last year, according to data released by the Bureau of Labor Statistics last week, and 26 million of them — 65.2 percent — were part of the labor force. That's a higher "participation rate" than among native-born adults, 62.2 percent of whom were working or looking for work in 2015. The difference was particularly stark among men: 78.2 percent of male immigrants were in the labor force in 2015, versus 67.3 percent of native-born men. (Foreign-born women are less likely than native-born women to be in the labor force, largely because immigrant women with young children are much less likely to work than their native-born counterparts.)

The numbers are a reminder of the role immigrants play in the U.S. economy. The participation rate for the overall population has been falling for a decade and a half and is now near a three-decade low. That means there are fewer workers trying to support a rapidly growing population of retirees. Immigrants, most of whom come to the U.S. to work, are an important part of filling that gap.

Number of the week

In nearly 60 percent of U.S. counties, more businesses closed their doors than opened them from 2010 through 2014 — a severe entrepreneurial slump during what was supposedly an economic recovery.

That finding comes from a new analysis of census data from the Economic Innovation Group, a research and advocacy group backed by a tech-heavy group of investors, including Napster co-founder Sean Parker. In most of the country, closings outpaced openings, a trend driven mostly by a steep drop in startups. Meanwhile, a relative handful of counties, mostly those in big metropolitan areas, accounted for most of the new businesses that were formed during the period.

The findings aren't necessarily a surprise. Nationally, entrepreneurship rates have been falling for three decades, a worrisome trend that economists don't fully understand. But the report emphasizes how economic opportunity is becoming increasingly concentrated in the biggest cities, while smaller cities and rural areas struggle.

Elsewhere

Americans are changing jobs less often. That's bad news for the U.S. economy, writes Patricia Cohen.

Falling productivity is also bad news and could contribute to wage stagnation and social unrest, report Sam Fleming and Chris Giles.

More than a quarter of Americans live in counties that have seen their populations decline from their peaks, according to Lyman Stone, who notes that this data is much harder to track down than it should be.

Enough, already, about millennials.

(https://espnfivethirtyeight.files.wordpress.com/2016/05/casselman-irt-0527.png?w=1148&h=322)

The rents are what?

OK, garbon.  I won't blame the economy.

Quote from: CountDeMoney on May 28, 2016, 09:10:31 AM
OK, garbon.  I won't blame the economy.

:hug:

QuoteSo why haven't young people started to strike out on their own? There are probably two reasons. First, the economy has improved for them, but it still isn't great. As I've written before, the unemployment rate understates the number of people who are out of work, and millennials who do have jobs are often working part time or for low pay. That's especially true for people without a college degree, who are also the ones most likely to be living at home.

Second, even when young people have good jobs, they often face financial pressures that weren't as common in past generations. Specifically: more debt and higher rent. Roughly 15 million Americans under 30 owed a combined $322 billion in student debt at the end of 2012, according to data from the Federal Reserve Bank of New York. (It's easy to blow this out of proportion, however: New data from the Cleveland Fed this month showed that the typical 20-something borrower pays about $200 a month in loans.) Meanwhile, rents have been rising rapidly in recent years and are particularly high in big cities, where young people are most likely to live.

So, don't blame the economy but blame the economy?  :hmm:

Are families happier with adult children?

Quote from: Phillip V on May 28, 2016, 11:48:38 AM
Are families happier with adult children?

Yeah, they tend to be happy their sons and daughters survived childhood diseases.

Quote from: Capetan Mihali on May 28, 2016, 11:53:14 AM

Quote from: Phillip V on May 28, 2016, 11:48:38 AM
Are families happier with adult children?

Yeah, they tend to be happy their sons and daughters survived childhood diseases.

LOL, Little House on the MicDrop, bitches

Quote
As this chart shows, the share of young people living with their parents was pretty steady in the 1980s and 1990s and then rose rapidly after 2005, right when the economy was turning south. But that makes the continued rise in the number of people living with their parents seem like a bit of a mystery. After all, the economy has improved significantly in recent years: The unemployment rate for Americans ages 18 to 34 was 7.4 percent in 2015, down from 12.7 percent in 2010.

Real estate prices had been pumped back up by the time the economy got better, so the diversion remained or got worse. I'd understand if housing prices had remained flat after the recession but they didn't.

And they say families are getting weaker :cool: I don't see anything bad or unusual about this. I find it interesting they cherry pick 1960-2005 as if that was a typical time in American History.

My Mother-in-law moved in with us so perhaps we are now part of this statistic  :lol:

TL;DR: Don't blame the economy. Blame the political economy. And also the economy.

I think there is far too much pressure for young people to move out.  Living with parents is a good way to save money. 

It also is a good way to go mental. And I get along with my family.

Quote from: Monoriu on May 29, 2016, 09:23:44 AM
I think there is far too much pressure for young people to move out.  Living with parents is a good way to save money. 

Depends where and for how long.  A candidate's job prospects and the economy's dynamism are stunted when he/she is not willing to move, especially early in their career.  I changed positions/locations almost every year in my early-mid 20's to get rapid pay increases and promotions.

Quote from: Valmy on May 28, 2016, 10:04:57 PM
My Mother-in-law moved in with us so perhaps we are now part of this statistic  :lol:

Gott-damn.  Sorry man, praying for you :(

Quote from: Phillip V on May 29, 2016, 11:00:44 AM

Quote from: Monoriu on May 29, 2016, 09:23:44 AM
I think there is far too much pressure for young people to move out.  Living with parents is a good way to save money. 

Depends where and for how long.  A candidate's job prospects and the economy's dynamism are stunted when he/she is not willing to move, especially early in their career.  I changed positions/locations almost every year in my early-mid 20's to get rapid pay increases and promotions.

Depends on the field. I could have stayed at home and had a similar career.

Quote from: Martinus on May 28, 2016, 11:33:00 AM
So, don't blame the economy but blame the economy?  :hmm:

I think it has less to do with economy, and more to do with municipal management.  It just doesn't pay off to build new affordable rental units.

Quote from: garbon on May 30, 2016, 09:28:56 AM
Depends on the field. I could have stayed at home and had a similar career.

True. Location dependency is going to diminish over the next few decades as well. I'd say it's still a pretty significant advantage being willing to move around at the moment. Eventually, it will be mainly unique specialists and low-skilled laborers who deal with that.

Quote from: DGuller on May 30, 2016, 09:49:19 AMIt just doesn't pay off to build new affordable rental units.

Building unaffordable rental units does?

Quote from: MadImmortalMan on May 30, 2016, 03:11:28 PM

Quote from: garbon on May 30, 2016, 09:28:56 AM
Depends on the field. I could have stayed at home and had a similar career.

True. Location dependency is going to diminish over the next few decades as well. I'd say it's still a pretty significant advantage being willing to move around at the moment. Eventually, it will be mainly unique specialists and low-skilled laborers who deal with that.

And entry-level white collar folks, which are usually young college grads.  I need them in front of me and next to each other at least the first year on the job so they don't do stupid stuff.  It is also in their interest for accelerated advancement and knowledge transfer to drink and eat with me and other professionals.

Quote from: Phillip V on May 30, 2016, 03:46:25 PM

Quote from: MadImmortalMan on May 30, 2016, 03:11:28 PM

Quote from: garbon on May 30, 2016, 09:28:56 AM
Depends on the field. I could have stayed at home and had a similar career.

True. Location dependency is going to diminish over the next few decades as well. I'd say it's still a pretty significant advantage being willing to move around at the moment. Eventually, it will be mainly unique specialists and low-skilled laborers who deal with that.

And entry-level white collar folks, which are usually young college grads.  I need them in front of me and next to each other at least the first year on the job so they don't do stupid stuff.  It is also in their interest for accelerated advancement and knowledge transfer to drink and eat with me and other professionals.

I can see how that easily gets replaced, particularly as technology advances and people get more skilled at (become more accustom to) managing newer people remotely.

Thing is, for every Millennial that stays home and "saves" like the fucked up Chinese, that's one less washer and dryer being purchased, one less HO insurance plan being bought, one less cable customer, etc.; it's a drag on all the sectors.  A consumer-based economy needs, you know, consumers.

Not to mention the stressors placed on their parents, who are dealing with increased costs when they're approaching that time when retirement and its fixed income existence and should be considering downsizing for their fixed income futures.

Quote from: CountDeMoney on May 30, 2016, 04:29:42 PM
Thing is, for every Millennial that stays home and "saves" like the fucked up Chinese, that's one less washer and dryer being purchased, one less HO insurance plan being bought, one less cable customer, etc.; it's a drag on all the sectors.  A consumer-based economy needs, you know, consumers.

Not to mention the stressors placed on their parents, who are dealing with increased costs when they're approaching that time when retirement and its fixed income existence and should be considering downsizing for their fixed income futures.

Well presumably said individuals should be helping their parents, not just holding on like a strangling vine.

Quote from: garbon on May 30, 2016, 04:41:22 PM
Well presumably said individuals should be helping their parents, not just holding on like a strangling vine.

You're assuming they're in the economic position to do so.  They're not all affluent, snot-nosed white suburbanites, you know.

Quote from: CountDeMoney on May 30, 2016, 04:42:55 PM

Quote from: garbon on May 30, 2016, 04:41:22 PM
Well presumably said individuals should be helping their parents, not just holding on like a strangling vine.

You're assuming they're in the economic position to do so.  They're not all affluent, snot-nosed white suburbanites, you know.

I'm not sure what poor black people have to do with this. I will say that my poor white cousins did pitch in on family finances until they belatedly flew the family nest.

Quote from: garbon on May 30, 2016, 04:44:56 PM

Quote from: CountDeMoney on May 30, 2016, 04:42:55 PM

Quote from: garbon on May 30, 2016, 04:41:22 PM
Well presumably said individuals should be helping their parents, not just holding on like a strangling vine.

You're assuming they're in the economic position to do so.  They're not all affluent, snot-nosed white suburbanites, you know.

I'm not sure what poor black people have to do with this. I will say that my poor white cousins did pitch in on family finances until they belatedly flew the family nest.

So as long as they pay for room and board, it's all good?

What is all good? WTF are we even talking about? :huh:

I say Millennials staying at home is an exponential drag on the economy.
You say they could pitch in and help at home.
I say they're not all in the position to do that, since they're not all all affluent, snot-nosed white suburbanites.
You ask what do black people have to do with this; besides, your cracker cousins helped pitch in.

I come to the conclusion that, since you've mentioned twice about Millennials helping with finances at home, then obviously as long as Millennials are helping with finances at home then everything's hunky fucking dory with the economy.

The End. Economy: All Good.

Oh so millennials shouldn't blame the economy, we should blame millennial for the economy?

Oh and my white cousins pass but they are actually all half mexican.  Well except for the weird one that no one really likes. Only children. :(

Quote from: garbon on May 30, 2016, 05:09:38 PM
Oh so millennials shouldn't blame the economy, we should blame millennial for the economy?

No.

In a lot of these cases, those millennials' parents couldn't afford to buy the homes they live in if they were doing it today.

I agree that young people should be willing to move in order to get jobs.  But I don't think that is the only reason why people sometimes look down upon others for living with their parents.  The "they should be independent instead of depending on others" vibe is strong, and I think that's not helpful.  Staying with parents makes good financial sense and that's that. 

Shut up, Mono.

What are the household statistics for Israeli millennials?  Related to their universal conscription/draft?

Quote from: citizen k on May 30, 2016, 03:18:38 PM

Quote from: DGuller on May 30, 2016, 09:49:19 AMIt just doesn't pay off to build new affordable rental units.

Building unaffordable rental units does?

By affordable I obviously mean affordable to non-highly-compensated young professionals to live in alone, without splitting it with roommates.  At least in New York City area, the vast majority of new residential construction seems to be either luxury rentals or luxury condos.  Modestly priced housing stock has all been built at least 50 years ago, if not much more than that.  Most big cities are very liberal places, and unfortunately suffer from all the liberal excesses when it comes to policy-making.

Housing in NYC is the worst of both the liberal (true rent control for older tenants who've occupied their units since before the cut-off date and pay literally a few hundred dollars in month for rent, despite being upper-middle class in every other way) and the conservative ("planned shrinkage" and unrestrained Trump-style development) worlds.

Quote from: DGuller on May 30, 2016, 09:14:05 PM

Quote from: citizen k on May 30, 2016, 03:18:38 PM

Quote from: DGuller on May 30, 2016, 09:49:19 AMIt just doesn't pay off to build new affordable rental units.

Building unaffordable rental units does?

By affordable I obviously mean affordable to non-highly-compensated young professionals to live in alone, without splitting it with roommates.  At least in New York City area, the vast majority of new residential construction seems to be either luxury rentals or luxury condos.  Modestly priced housing stock has all been built at least 50 years ago, if not much more than that.  Most big cities are very liberal places, and unfortunately suffer from all the liberal excesses when it comes to policy-making.

I am not sure the utility of bring up NYC in a  general discussions about affordable housing. That is such an extreme outlier that any conclusions drawn based on it are almost certain to be wrong for 90+% of the people in question.

Quote from: Berkut on May 30, 2016, 09:31:17 PM

Quote from: DGuller on May 30, 2016, 09:14:05 PM

Quote from: citizen k on May 30, 2016, 03:18:38 PM

Quote from: DGuller on May 30, 2016, 09:49:19 AMIt just doesn't pay off to build new affordable rental units.

Building unaffordable rental units does?

By affordable I obviously mean affordable to non-highly-compensated young professionals to live in alone, without splitting it with roommates.  At least in New York City area, the vast majority of new residential construction seems to be either luxury rentals or luxury condos.  Modestly priced housing stock has all been built at least 50 years ago, if not much more than that.  Most big cities are very liberal places, and unfortunately suffer from all the liberal excesses when it comes to policy-making.

I am not sure the utility of bring up NYC in a  general discussions about affordable housing. That is such an extreme outlier that any conclusions drawn based on it are almost certain to be wrong for 90+% of the people in question.

I've never been in San Francisco, but from what I'm hearing, it's even worse there.  For much the same reason.  Those are two pretty important hubs for professionals of all sorts.

I'm surprised nobody asked me about this.

Quote from: DGuller on May 30, 2016, 09:33:51 PM

Quote from: Berkut on May 30, 2016, 09:31:17 PM

Quote from: DGuller on May 30, 2016, 09:14:05 PM

Quote from: citizen k on May 30, 2016, 03:18:38 PM

Quote from: DGuller on May 30, 2016, 09:49:19 AMIt just doesn't pay off to build new affordable rental units.

Building unaffordable rental units does?

By affordable I obviously mean affordable to non-highly-compensated young professionals to live in alone, without splitting it with roommates.  At least in New York City area, the vast majority of new residential construction seems to be either luxury rentals or luxury condos.  Modestly priced housing stock has all been built at least 50 years ago, if not much more than that.  Most big cities are very liberal places, and unfortunately suffer from all the liberal excesses when it comes to policy-making.

I am not sure the utility of bring up NYC in a  general discussions about affordable housing. That is such an extreme outlier that any conclusions drawn based on it are almost certain to be wrong for 90+% of the people in question.

I've never been in San Francisco, but from what I'm hearing, it's even worse there.  For much the same reason.  Those are two pretty important hubs for professionals of all sorts.

No, actually they aren't.

The vast, vast majority of young professionals don't live in either of the two most expensive urban areas in the country.

Why not take a look at prices in Kansas City, or Des Moines, or Phoenix? Denver? Dallas? Atlanta?

You of all people should no better than picking one end of the bell curve as a example to draw general conclusions from...

Quote from: Berkut on May 30, 2016, 09:49:30 PM
Why not take a look at prices in Kansas City, or Des Moines, or Phoenix? Denver? Dallas? Atlanta?

All six of those metro areas taken together have the population of just the NYC metro area.

Quote from: DGuller on May 30, 2016, 10:29:31 PM

Quote from: Berkut on May 30, 2016, 09:49:30 PM
Why not take a look at prices in Kansas City, or Des Moines, or Phoenix? Denver? Dallas? Atlanta?

All six of those metro areas taken together have the population of just the NYC metro area.

So? Do they have the same population of college graduates looking for jobs? What about the other 30 metro areas? Do they all add up to San Francisco and NYC? What about the 200 non-huge cities? What total percentage of college grads live in NYC such that it is reasonable to use NYC as the norm?

Are you *really* going to stick with this argument that when discussing the difficulty of new professionals finding affordable housing, we should just consider New York City as being a representative sample of where newly minted college graduates have to live, or else stay at home with mom and dad? The singular example in the entire country of the absolutely most screwed up real estate market (in this context) in the country, and a completely unique demographic, cultural, and economic example of "places new college graduates live in the USA"?

I suspect less than 1% of new graduates in the USA are looking to live in NYC, and less than 2% in NYC or SF. Or maybe it is 3 and 5 percent - I don't know. But it sure as hell isn't any number that justifies acting like the entire country is anything like the two most expensive places to live in the country.

I don't even understand the utility of such arguments. You can't afford to live in NYC? Or DC? Or SF? Or San Diego?

Tough shit. Live somewhere else. There are plenty of places with much more reasonable real estate than the prime locations in the USA. That is why they are prime, because lots of people want to live there. Go live somewhere else, and if living in NYC is your life's dream, then work your ass off to make it happen, or deal with living in a hovel with your 6 best friends.

In either case, it isn't evidence that there is something fundamentally wrong with young professionals ability to afford a place to live that they cannot live in the most desirable and expensive real estate in the world.

I don't know. I mean I look at SF, which was already quite expensive, when I moved there in '07 and there's no way that as a recent college grad, I'd be able to afford to live there with anything similar to the standard of living I had then. I think it is a problem to have exciting, vibrant cities that have been (within less than a decade) priced out of the range of young professionals.

Not any major boo-hoo, this is a major problem - but distressing nonetheless.

Quote from: Berkut on May 31, 2016, 06:05:55 AM
I don't even understand the utility of such arguments. You can't afford to live in NYC? Or DC? Or SF? Or San Diego?

Tough shit. Live somewhere else. There are plenty of places with much more reasonable real estate than the prime locations in the USA. That is why they are prime, because lots of people want to live there. Go live somewhere else, and if living in NYC is your life's dream, then work your ass off to make it happen, or deal with living in a hovel with your 6 best friends.

In either case, it isn't evidence that there is something fundamentally wrong with young professionals ability to afford a place to live that they cannot live in the most desirable and expensive real estate in the world.

If you're a professional, you kinda have to go where the jobs are.  You can't just move to some rural town in Mississippi, and then check out the local jobs market for software engineers.

Quote from: DGuller on May 31, 2016, 07:36:26 AM

Quote from: Berkut on May 31, 2016, 06:05:55 AM
I don't even understand the utility of such arguments. You can't afford to live in NYC? Or DC? Or SF? Or San Diego?

Tough shit. Live somewhere else. There are plenty of places with much more reasonable real estate than the prime locations in the USA. That is why they are prime, because lots of people want to live there. Go live somewhere else, and if living in NYC is your life's dream, then work your ass off to make it happen, or deal with living in a hovel with your 6 best friends.

In either case, it isn't evidence that there is something fundamentally wrong with young professionals ability to afford a place to live that they cannot live in the most desirable and expensive real estate in the world.

If you're a professional, you kinda have to go where the jobs are.  You can't just move to some rural town in Mississippi, and then check out the local jobs market for software engineers.

But then you can always choose to live somewhere in the metro area and not the city proper. Rents still might be higher than other parts of the country, but those will be affordable for young professionals. So get a roomate and split 2 bedroom in Jersey City rather than a 1 bedroom in the Village.

Quote from: garbon on May 31, 2016, 07:42:40 AM

Quote from: DGuller on May 31, 2016, 07:36:26 AM

Quote from: Berkut on May 31, 2016, 06:05:55 AM
I don't even understand the utility of such arguments. You can't afford to live in NYC? Or DC? Or SF? Or San Diego?

Tough shit. Live somewhere else. There are plenty of places with much more reasonable real estate than the prime locations in the USA. That is why they are prime, because lots of people want to live there. Go live somewhere else, and if living in NYC is your life's dream, then work your ass off to make it happen, or deal with living in a hovel with your 6 best friends.

In either case, it isn't evidence that there is something fundamentally wrong with young professionals ability to afford a place to live that they cannot live in the most desirable and expensive real estate in the world.

If you're a professional, you kinda have to go where the jobs are.  You can't just move to some rural town in Mississippi, and then check out the local jobs market for software engineers.

But then you can always choose to live somewhere in the metro area and not the city proper. Rents still might be higher than other parts of the country, but those will be affordable for young professionals. So get a roomate and split 2 bedroom in Jersey City rather than a 1 bedroom in the Village.

Yes, and people are doing that, if they can't or won't live with their parents.  But rents tend to catch up a lot faster than you'd think.  Good luck finding anything affordable anywhere near a PATH station.  My boss is looking for a place in Jersey City right now, and he still can't find one because they're all too expensive for his budget.  I myself am about to hand in my lease renewal, for about $2700/month rate for a one-bedroom apartment.

Yes, of course you can make it work.  Young people aren't starving out in the streets, are they?  We're discussing quality of life here, not survival.  In my book, neither living with your parents nor with roommates qualifies as a solution with high quality of life.

Oh I wouldn't want to live with roommates either but many people I know seem to get a long fine with it. Sort of extends the whole college lifestyle into ones 20s.

Quote from: DGuller on May 31, 2016, 07:36:26 AM

Quote from: Berkut on May 31, 2016, 06:05:55 AM
I don't even understand the utility of such arguments. You can't afford to live in NYC? Or DC? Or SF? Or San Diego?

Tough shit. Live somewhere else. There are plenty of places with much more reasonable real estate than the prime locations in the USA. That is why they are prime, because lots of people want to live there. Go live somewhere else, and if living in NYC is your life's dream, then work your ass off to make it happen, or deal with living in a hovel with your 6 best friends.

In either case, it isn't evidence that there is something fundamentally wrong with young professionals ability to afford a place to live that they cannot live in the most desirable and expensive real estate in the world.

If you're a professional, you kinda have to go where the jobs are.  You can't just move to some rural town in Mississippi, and then check out the local jobs market for software engineers.

I am rather aware of that, having been in exactly that position myself. I had offers from places in DC and SF, and declined them because I had 23 other offers from places where the cost of living was much more reasonable, and hence my overall standard of living would be better.

You are pitching this like the options for young professionals is NYC, SF, and rural Mississippi. That is obviously just not true, and even you know that. So why are you persisting in this train of thought?

There are 300+ million people living in this country. Most of them don't live in NYC or SF. Indeed, very few of them do compared to not living in those places. The problems of NYC and SF are not the problems of the entire country.

Quote from: DGuller on May 31, 2016, 07:59:24 AM

Quote from: garbon on May 31, 2016, 07:42:40 AM

Quote from: DGuller on May 31, 2016, 07:36:26 AM

Quote from: Berkut on May 31, 2016, 06:05:55 AM
I don't even understand the utility of such arguments. You can't afford to live in NYC? Or DC? Or SF? Or San Diego?

Tough shit. Live somewhere else. There are plenty of places with much more reasonable real estate than the prime locations in the USA. That is why they are prime, because lots of people want to live there. Go live somewhere else, and if living in NYC is your life's dream, then work your ass off to make it happen, or deal with living in a hovel with your 6 best friends.

In either case, it isn't evidence that there is something fundamentally wrong with young professionals ability to afford a place to live that they cannot live in the most desirable and expensive real estate in the world.

If you're a professional, you kinda have to go where the jobs are.  You can't just move to some rural town in Mississippi, and then check out the local jobs market for software engineers.

But then you can always choose to live somewhere in the metro area and not the city proper. Rents still might be higher than other parts of the country, but those will be affordable for young professionals. So get a roomate and split 2 bedroom in Jersey City rather than a 1 bedroom in the Village.

Yes, and people are doing that, if they can't or won't live with their parents.  But rents tend to catch up a lot faster than you'd think.  Good luck finding anything affordable anywhere near a PATH station.  My boss is looking for a place in Jersey City right now, and he still can't find one because they're all too expensive for his budget.  I myself am about to hand in my lease renewal, for about $2700/month rate for a one-bedroom apartment.

Yes, of course you can make it work.  Young people aren't starving out in the streets, are they?  We're discussing quality of life here, not survival.  In my book, neither living with your parents nor with roommates qualifies as a solution with high quality of life.

That is a problem with particular geographic areas where the cost of living is very high.

You don't have to live there. There are jobs elsewhere. You *want* to live there, and I have zero sympathy, and certainly do not feel that society or the state has any responsibility to fund you living there because you want to live there, but don't want to have to compete with others who might be better able to afford it.

This is not a real problem, just a fake one invented because of the entitlement attitude of people who think they have some kind of right to live in some particular place they want to live, and it isn't fair that other people with more resources are willing to outspend them for the right to live in those desirable places.

Quote from: garbon on May 31, 2016, 06:17:17 AM
I don't know. I mean I look at SF, which was already quite expensive, when I moved there in '07 and there's no way that as a recent college grad, I'd be able to afford to live there with anything similar to the standard of living I had then. I think it is a problem to have exciting, vibrant cities that have been (within less than a decade) priced out of the range of young professionals.

Why is that a problem?

I went through the same thing back in 2000, and made a very conscious decision to move away from the Bay area because I felt I could have a better overall standard of living in northern Colorado. I *loved* the Bay area, but that is because it was awesome. Well - lots of other people felt the same way, so they all moved there and competed for finite real estate.

If that results in the prices becoming so high that young, starting out professionals cannot afford to live there, then how is that a "problem"? That is just how markets work. If the result is that people don't live there, then demand will decline, and prices will stabilize.

Again, this is NOT a problem with the prices of housing in the USA, it is a fake problem with this high price of housing in the most desirable places to live within the USA. This is fundamentally no different than me saying there is a problem with the price of new cars in America, because there is no way I can afford a Mercedes S-class, and by golly, I really, really want one!

Quote
Not any major boo-hoo, this is a major problem - but distressing nonetheless.

Yeah, not being able to afford everything we would like is sometimes distressing.

Quote from: Berkut on May 31, 2016, 08:38:45 AMAgain, this is NOT a problem with the prices of housing in the USA, it is a fake problem with this high price of housing in the most desirable places to live within the USA. This is fundamentally no different than me saying there is a problem with the price of new cars in America, because there is no way I can afford a Mercedes S-class, and by golly, I really, really want one!

[/quote]

...and the real issue with bringing this up is that it might be obscuring an actual issue.

To extend my analogy, there might be a good argument to be made that new car prices have become too high to be affordable - that the base level cars, say due to environmental and safety regulations, have become so expensive that they are no longer affordable.

You could have a discussion about what is a reasonable price for a new Honda Civic, or Toyota Camry, or Ford or whatever.

But someone coming into the discussion bitching about how much the latest BMW costs, or how the lease on the newest Lexus is out of their price range, creates a sense of a fake "problem" that most people are going to just say "Bah, elitists whining about how much it costs to live in Manhattan or Marin County? Don't care".

Maybe there is a real problem about the cost of real estate and housing in the United States. But it won't be illuminated by a few people wishing they could only afford to live in some of the most expensive places to live in the entire world.

There are plenty of jobs outside of the Bay area and NYC. You don't have to live there. Basic market economics tells us that, and you see it happen. HP had a giant plant in Ft. Collins, CO partially because Palo Alto got so stupidly expensive to live that it made no sense anymore.

But what if you are a teacher in a prime location schools & you can't afford to live where you teach? Like Silicon Valley has trouble with.

Quote from: DGuller on May 31, 2016, 07:59:24 AM
Yes, of course you can make it work.  Young people aren't starving out in the streets, are they?  We're discussing quality of life here, not survival.  In my book, neither living with your parents nor with roommates qualifies as a solution with high quality of life.

Clearly, however, it is a higher quality of life than the alternative.

It is worth it to people who want to live in NYC to get a roommate because working and living in NYC with a roommate is better for them then working in Kansas City without one. They are maximizing, or trying to maximize, their own quality of life.

You choose to spend 2700/month to live where you want to live. You don't HAVE to live there. You could move somewhere and pay a lot less, and use that extra money to improve other aspects of your life. Or you choose to live where you do at the price you do because you feel that it is worth it.

It is just that simple.

If there is a problem with the prices of housing in NYC and the metro area, it is a specific problem for NYC. Maybe it makes sense for NYC to do something about it, maybe not. But it has nothing to do with the overall problem of the cost of housing in the US, since NYC is a nearly unique situation that has no resemblance to the vast, vast majority of the rest of the country, where housing costs as a percentage of average income is radically different.

Quote from: Grey Fox on May 31, 2016, 08:56:27 AM
But what if you are a teacher in a prime location schools & you can't afford to live where you teach? Like Silicon Valley has trouble with.

Then that is a problem with Silicon Valley, that they need to figure out how to solve.

It would be foolish to bring that up in a discussion about teacher salaries and the cost of housing for them in general, since it is a very specific example that has no real relevance to the overall issue.

Meaning that a solution to the problem in Silicon Valley would almost certainly be a terrible way to solve it elsewhere, since the forces involved are completely different.

The overall issues is that salaries are too low & that is relevant in any & all discussions.

Quote from: Grey Fox on May 31, 2016, 09:28:50 AM
The overall issues is that salaries are too low & that is relevant in any & all discussions.

I don't disagree of course, but I think if you enter that discussion by talking about how you can't afford to live in Manhattan on your own on a just graduated from college salary, you make it easy to dismiss the entire topic.

Of course you can't afford to live in Manhattan, and you couldn't regardless of whether or not salaries kept up over the last 20 years.

I couldn't afford to live in a home with my new wife and likely family in Palo Alto, which is why I didn't accept any of the 3 positions I was offered there out of college. Nor could I live in the DC area in the manner I wanted (i.e. not driving an hour each way to work) which I why I didn't accept the positions I was offered at Lockheed Martin, even though they sounded really interesting.

Hell, I didn't even interview with Lucasfilms, because someone I knew who graduated the year before and took a job with them was talking about how much he loved living in an apartment with 4 other Lucasfilm new hires who were all having a blast working there and living that kind of life.

We all make choices about what is important to us, and I don't think it is a problem that the world prices real estate based on how desirable it is to live there, which results in some places being exorbitantly expensive - even too expensive for many people to live there. So go live somewhere else.

If there is a problem (and I think there is a problem) that even in other places the salaries have not kept up with living expenses, then THAT is a much more interesting problem than some individual not being able to live in some of the most expensive real estate in the world because they really like it there.

I, uh, agree. :unsure:

Quote from: Berkut on May 31, 2016, 08:59:00 AM

Quote from: Grey Fox on May 31, 2016, 08:56:27 AM
But what if you are a teacher in a prime location schools & you can't afford to live where you teach? Like Silicon Valley has trouble with.

Then that is a problem with Silicon Valley, that they need to figure out how to solve.

It would be foolish to bring that up in a discussion about teacher salaries and the cost of housing for them in general, since it is a very specific example that has no real relevance to the overall issue.

Meaning that a solution to the problem in Silicon Valley would almost certainly be a terrible way to solve it elsewhere, since the forces involved are completely different.

I'm not sure I agree. I don't know I'd say that the issues of housing and affordability that are facing SF, NYC and London are all that different. Sure they are different from issues facing Kansas but then the population of Kansas is only larger than that of SF. The issues facing those major cities (living expenses not covered by salaries) have a larger impact because there is a larger population of people effected.

And that's not to mention that while you are extolling all these middling places, one doesn't really have the same level of job opportunity there. I guess it is, as you say, about life trade-offs but still seems bad from my point of view to have the negatives piling up for cities. Going to be very painful for all till it gets better (aka people become more willing to slink off into suburbs/middling areas).

The negatives are not piling up "for cities" they are piling up for highly desirable places to live. Silicon Valley is not urban at all, for example. Certainly not urban in the sense of NYC or London.

There are great places to live, and lots of people want to live there, and hence it is expensive. So what? That is a relative issue, not an absolute one - there will always be places that cost more to live because more people want to live there. That is not a problem.

It is a problem when the *average* places to live are difficult to live in with *average* salaries.

Quote from: Berkut on May 31, 2016, 10:31:45 AM
The negatives are not piling up "for cities" they are piling up for highly desirable places to live. Silicon Valley is not urban at all, for example. Certainly not urban in the sense of NYC or London.

There are great places to live, and lots of people want to live there, and hence it is expensive. So what? That is a relative issue, not an absolute one - there will always be places that cost more to live because more people want to live there. That is not a problem.

But the complaint (at least as far as I see) isn't that places are expensive but rather that they are too expensive even for anyone that would carry out work functions there.

Quote from: Berkut on May 31, 2016, 10:31:45 AM
It is a problem when the *average* places to live are difficult to live in with *average* salaries.

Meh, if you live in a shitty place, your life is going to be shit. ;)

Quote from: Berkut on May 31, 2016, 08:31:14 AM
I am rather aware of that, having been in exactly that position myself. I had offers from places in DC and SF, and declined them because I had 23 other offers from places where the cost of living was much more reasonable, and hence my overall standard of living would be better.

I'm not sure the example of an executive in a high demand field with a wide geographic distribution of jobs, with 23 offers across the country when he looked for work, is the best baseline for judging the impact of this problem. It's a scenario of fairly limited applicability.

Quote from: Jacob on May 31, 2016, 11:21:10 AM

Quote from: Berkut on May 31, 2016, 08:31:14 AM
I am rather aware of that, having been in exactly that position myself. I had offers from places in DC and SF, and declined them because I had 23 other offers from places where the cost of living was much more reasonable, and hence my overall standard of living would be better.

I'm not sure the example of an executive in a high demand field with a wide geographic distribution of jobs, with 23 offers across the country when he looked for work, is the best baseline for judging the impact of this problem. It's a scenario of fairly limited applicability.

I was talking about when I graduated from college - when I was just another recent grad with a STEM degree.

But even at that, you do have a point. I did have a degree in a engineering field with a wide variety of jobs all over the country, but that makes me a BETTER example, in that I had the luxury of being able to make decisions based on looking at the various options I had where I could weigh how much I want to live in a particular place (I really wanted a job in San Diego, for example) with the cost of living there against some other less desirable place where my relative salary would be higher.

The point I am arguing though is that ONLY looking at the most expensive places to live is counter productive to the general discussion. Most people graduating from college in the USA are not looking for jobs in the most expensive places to live in the USA. There are hundreds of options of medium to large cities that employ lots and lots of people outside the flashy, expensive destinations like NYC and San Francisco. Focusing on those places says nothing about the overall problem - you could (theoretically) have NO general problem with recent college grads being able to afford housing in general, while at the same time it still being the case that they cannot afford to live in the most expensive places to live in America.

There is no "problem" with some average person right out of college not being able to afford to live in Manhattan.

There is a problem in that some average person right out of college cannot get themselves a job that would let them be able to afford their own place in Phoenix or St. Louis or some other more average priced location.

Here is another analogy - police officers.

There is a problem that police officers who work in NYC cannot afford to live anywhere near NYC. That is a real problem. There is no way you could reasonably afford to pay the 100,000 or so police officers enough to allow them to live in the places they police in NYC.

Does that mean there is a problem across the US that police officers don't make enough to live in the places they work? No, not at all. The outlier examples are never good reference points.

Quote from: Berkut on May 31, 2016, 11:40:12 AM
I was talking about when I graduated from college - when I was just another recent grad with a STEM degree.

But even at that, you do have a point. I did have a degree in a engineering field with a wide variety of jobs all over the country, but that makes me a BETTER example, in that I had the luxury of being able to make decisions based on looking at the various options I had where I could weigh how much I want to live in a particular place (I really wanted a job in San Diego, for example) with the cost of living there against some other less desirable place where my relative salary would be higher.

The point I am arguing though is that ONLY looking at the most expensive places to live is counter productive to the general discussion. Most people graduating from college in the USA are not looking for jobs in the most expensive places to live in the USA. There are hundreds of options of medium to large cities that employ lots and lots of people outside the flashy, expensive destinations like NYC and San Francisco. Focusing on those places says nothing about the overall problem - you could (theoretically) have NO general problem with recent college grads being able to afford housing in general, while at the same time it still being the case that they cannot afford to live in the most expensive places to live in America.

There is no "problem" with some average person right out of college not being able to afford to live in Manhattan.

There is a problem in that some average person right out of college cannot get themselves a job that would let them be able to afford their own place in Phoenix or St. Louis or some other more average priced location.

I think the job market has changed significantly from when you were a recent college grad.

That said, I agree with your conclusion that recent college grads do not necessarily need to be able to afford their own place in Manhattan; and that it's not inherently a problem that they cannot. But the increase in housing prices has effects beyond the housing of new grads, and those problems are not adequately addressed with a "it's simple, just get a job somewhere cheaper and move there."

Quote from: Jacob on May 31, 2016, 12:30:07 PM


I think the job market has changed significantly from when you were a recent college grad.

That said, I agree with your conclusion that recent college grads do not necessarily need to be able to afford their own place in Manhattan; and that it's not inherently a problem that they cannot. But the increase in housing prices has effects beyond the housing of new grads, and those problems are not adequately addressed with a "it's simple, just get a job somewhere cheaper and move there."

I don't think we are disagreeing at all.

Quote from: Berkut on May 31, 2016, 01:32:51 PMI don't think we are disagreeing at all.

Luckily we can still argue about not disagreeing :hug:

A languish past time to be sure.

Quote from: Berkut on May 31, 2016, 10:31:45 AM
It is a problem when the *average* places to live are difficult to live in with *average* salaries.

I think we hit that point some time ago.

FWIW,the data in the OP seems to apply for the US generally, and not just a small handful of hotspots (clearly experiencing a bubble  ;) ).

However, I do think there's a lot more opportunities in general for a higher quality of life to people who are willing to move around.

Quote from: Camerus on May 31, 2016, 06:53:57 PM
FWIW,the data in the OP seems to apply for the US generally, and not just a small handful of hotspots (clearly experiencing a bubble  ;) ).

However, I do think there's a lot more opportunities in general for a higher quality of life to people who are willing to move around.

Perhaps in the US given your numerous cities.  But in Canada the problem is pretty significant since there are really only two cities where there are reasonably good prospects for young professionals and land prices in those two cities are now unaffordable for most. 

Heh. I'm from Toronto originally and went to university at the U of T, and after graduating have lived in Montreal, Ottawa and Edmonton  (not to mention abroad). I have a home in Edmonton, the likes of which I would not be able to afford as easily in Toronto and a pretty decent standard of living here. Anecdotally I can say there are a lot of other educated folks I've met from elsewhere in Canada doing well here, even after the oil drop. So it definitely can be done if you're willing to think outside the Toronto / Vancouver box.

Quote from: Camerus on May 31, 2016, 11:00:12 PM
Heh. I'm from Toronto originally and went to university at the U of T, and after graduating have lived in Montreal, Ottawa and Edmonton  (not to mention abroad). I have a home in Edmonton, the likes of which I would not be able to afford as easily in Toronto and a pretty decent standard of living here. Anecdotally I can say there are a lot of other educated folks I've met from elsewhere in Canada doing well here, even after the oil drop. So it definitely can be done if you're willing to think outside the Toronto / Vancouver box.

Hell Camerus - you're in E-town?  I had no idea.

Ever feel like meeting up and having a coffee or beer?

Quote from: garbon on May 29, 2016, 09:28:13 AM
It also is a good way to go mental. And I get along with my family.

Word. I also love my family, but after moving in with them when I came back to my hometown I couldn't stay longer than a few months, even if it meant moving into a tiny cupboard of an appartment just to get away. The look on my mom's face when she saw the place I rented for the first time...  :lol:

Quote from: Camerus on May 31, 2016, 11:00:12 PM
Heh. I'm from Toronto originally and went to university at the U of T, and after graduating have lived in Montreal, Ottawa and Edmonton  (not to mention abroad). I have a home in Edmonton, the likes of which I would not be able to afford as easily in Toronto and a pretty decent standard of living here. Anecdotally I can say there are a lot of other educated folks I've met from elsewhere in Canada doing well here, even after the oil drop. So it definitely can be done if you're willing to think outside the Toronto / Vancouver box.

I don't deny that it was possible to do that in the past.  But in the past Toronto and Vancouver were not the only parts of the country generating jobs.

Quote from: crazy canuck on May 31, 2016, 10:28:09 PM

Quote from: Camerus on May 31, 2016, 06:53:57 PM
FWIW,the data in the OP seems to apply for the US generally, and not just a small handful of hotspots (clearly experiencing a bubble  ;) ).

However, I do think there's a lot more opportunities in general for a higher quality of life to people who are willing to move around.

Perhaps in the US given your numerous cities.  But in Canada the problem is pretty significant since there are really only two cities where there are reasonably good prospects for young professionals and land prices in those two cities are now unaffordable for most. 

indeed - I heard the same a lot in the UK, where the prices in London are much more of an issue, since it is a smaller country and hence the concentration of professional jobs is much more felt.

I don't think the US is remotely similar in this case. The fact that it is crazy expensive to live in NYC and SF and DC is a problem if you want to live in those places, but that is YOUR problem, or maybe those locations problem if they want those people living there anyway.

It has nothing really to do with the problem the general problem that even outside those places, it is hard for young professionals to afford the same kind of homes they used to be able to afford (assuming that is true, which it seems like is the case).

In a sense I agree that NYC's housing cost problem or SF Bay's housing costs problems are the problems of those areas, not the nation as a whole.  But then you add in DC, Boston, LA/SD/Socal, and now you are starting to talk about a very significant % of the population of the US.

Quote from: The Minsky Moment on June 01, 2016, 11:22:49 AM
In a sense I agree that NYC's housing cost problem or SF Bay's housing costs problems are the problems of those areas, not the nation as a whole.  But then you add in DC, Boston, LA/SD/Socal, and now you are starting to talk about a very significant % of the population of the US.

Yeah just did a quick sum of those cities (+area for Bay Area) and that's 21 million people or so. That's a pretty large chunk of citizens in the US.

Quote from: garbon on June 01, 2016, 11:32:48 AM

Quote from: The Minsky Moment on June 01, 2016, 11:22:49 AM
In a sense I agree that NYC's housing cost problem or SF Bay's housing costs problems are the problems of those areas, not the nation as a whole.  But then you add in DC, Boston, LA/SD/Socal, and now you are starting to talk about a very significant % of the population of the US.

Yeah just did a quick sum of those cities (+area for Bay Area) and that's 21 million people or so. That's a pretty large chunk of citizens in the US.

Googling, I get 7M for SF, 6M for DC, 20M for NYC, 4.5M for Boston, and 18.5 for LA (all metro areas). That's a total of 56 million.

Quote from: Jacob on June 01, 2016, 12:13:08 PM

Quote from: garbon on June 01, 2016, 11:32:48 AM

Quote from: The Minsky Moment on June 01, 2016, 11:22:49 AM
In a sense I agree that NYC's housing cost problem or SF Bay's housing costs problems are the problems of those areas, not the nation as a whole.  But then you add in DC, Boston, LA/SD/Socal, and now you are starting to talk about a very significant % of the population of the US.

Yeah just did a quick sum of those cities (+area for Bay Area) and that's 21 million people or so. That's a pretty large chunk of citizens in the US.

Googling, I get 7M for SF, 6M for DC, 20M for NYC, 4.5M for Boston, and 18.5 for LA (all metro areas). That's a total of 56 million.

Yeah I didn't count all metro areas, just cities (apart from Bay area as SF itself is small). But yeah throw in metro areas and that is a rather large chunk of US population. Nothing to be sniffed at.

But if you are going to expand to metro areas, then you also dilute the problem - if you want to talk about the LA area, or the Boston area, you can certainly find housing in those "areas" that are a tiny fraction of the crazy costs associated with Manhattan and the actual city of San Francisco, or the desirable parts of Boston or San Diego.

You can find an apartment in the LA area, for example, that is 1/3rd the cost of the cheapest Manhattan apartment, and hence you are no longer talking about the crazy costs of living in Manhattan, and is likely much more comparable to the cost of an apartment in Kansas City.

Quote from: Berkut on June 01, 2016, 12:24:21 PM
likely much more comparable to the cost of an apartment in Kansas City.

That seems like a rather big stretch but then I don't know much about pricing in KC. Jersey City is cheaper than Manhattan but it is still rather expensive but you've removed it from the problem/equation if you only include NYC proper.

Housing costs are definitely a metro area problem in NY, including Brooklyn, much of Long Island, much of Westchester and the Jersey/CT burbs.  It is possible to find some close in areas that are sort of affordable, as long as you are OK with a lousy public school system.

Boston is pretty similar at this point - house prices in the burbs are very elevated until you start getting out to Worcester.  There are some exceptions of course again where the school system has problems. 

So yes you can find some reasonably priced housing here and there if you either accept subpar schools, shell out for private school or don't procreate.

I think metro areas are much more relevant, as that is really the economic unit.  Yes, there is heterogeneity there, but it is everywhere.  It goes without saying that "all else being equal" applies to all comparisons.

Quote from: The Minsky Moment on June 01, 2016, 12:36:09 PM
There are some exceptions of course again where the school system has problems. 

So yes you can find some reasonably priced housing here and there if you either accept subpar schools, shell out for private school or don't procreate.

Hey, I survived a subpar school! :angry:

Rochester/Buffalo seems to be one of the very few places in the US where wages are growing compared to home values.  :hmm:

Quote from: Barrister on May 31, 2016, 11:50:56 PM

Quote from: Camerus on May 31, 2016, 11:00:12 PM
Heh. I'm from Toronto originally and went to university at the U of T, and after graduating have lived in Montreal, Ottawa and Edmonton  (not to mention abroad). I have a home in Edmonton, the likes of which I would not be able to afford as easily in Toronto and a pretty decent standard of living here. Anecdotally I can say there are a lot of other educated folks I've met from elsewhere in Canada doing well here, even after the oil drop. So it definitely can be done if you're willing to think outside the Toronto / Vancouver box.

Hell Camerus - you're in E-town?  I had no idea.

Ever feel like meeting up and having a coffee or beer?

Sure, sounds good Beeb. I'll PM you.

Quote from: MadImmortalMan on June 01, 2016, 02:05:58 PM
Rochester/Buffalo seems to be one of the very few places in the US where wages are growing compared to home values.  :hmm:

:lol: Nah, Berkut is an offshoot of the Hamilcar "House Destroyed By A Tornado? Nobody Told You To Live In A State With Tornadoes, Tough Shit For You, Asshole" school of thought.

That's a bit harsh.

Quote from: Berkut on June 01, 2016, 11:00:35 AM
The fact that it is crazy expensive to live in NYC and SF and DC is a problem if you want to live in those places, but that is YOUR problem, or maybe those locations problem if they want those people living there anyway.

I dunno, he's pretty explicit about that.  Nobody says you have to live there.  But that's where the job is going to be?  Sounds like you need a different job then.

Quote from: CountDeMoney on June 01, 2016, 11:09:19 PM

Quote from: Berkut on June 01, 2016, 11:00:35 AM
The fact that it is crazy expensive to live in NYC and SF and DC is a problem if you want to live in those places, but that is YOUR problem, or maybe those locations problem if they want those people living there anyway.

I dunno, he's pretty explicit about that.  Nobody says you have to live there.  But that's where the job is going to be?  Sounds like you need a different job then.

You might as well say there is a problem with the cost of real estate because I know this guy who was offered a job in Monaco, and he can't afford to live in Monaco.

My point is very simple - if you want to talk about there being a problem with the general cost of housing in the US, you should talk about average prices, not the extremes.

I don't think this is really that crazy of an idea.

Totally with you, man.  That's what I try explaining to people who move here for a job or an education, and are shocked by the real estate prices:  you've got to look at the whole real estate picture. 

I mean, there's plenty of incredibly affordable housing in Baltimore if you just know where to look, like in Freddie Gray's old neighborhood. And hey, you got a problem with that?  Nobody said you had to take that research fellowship at Johns Hopkins. Pretty sure the Wal-Mart in Farmington, New Mexico is hiring instead.  Fuck these fucking people.  Entitled assholes.

:D

Quote from: CountDeMoney on June 02, 2016, 07:09:09 AM
Totally with you, man.  That's what I try explaining to people who move here for a job or an education, and are shocked by the real estate prices:  you've got to look at the whole real estate picture. 

I mean, there's plenty of incredibly affordable housing in Baltimore if you just know where to look, like in Freddie Gray's old neighborhood. And hey, you got a problem with that?  Nobody said you had to take that research fellowship at Johns Hopkins. Pretty sure the Wal-Mart in Farmington, New Mexico is hiring instead.  Fuck these fucking people.  Entitled assholes.

:lol:  :hug:

And the usual suspects show their usual dedication to actual rational thought and intellectual honesty.

Yes, Seedy has made such a compelling point talking about people with fellowships at John's Hopkins. That is surely the "average" person graduating from college looking for a place to live.

Quote from: Berkut on June 02, 2016, 08:03:42 AM
And the usual suspects show their usual dedication to actual rational thought and intellectual honesty.

Yes, Seedy has made such a compelling point talking about people with fellowships at John's Hopkins. That is surely the "average" person graduating from college looking for a place to live.

Fuck, main streeters. All they ever tried to do was hold me back/hold me down.

What is bizarre about this entire stupid argument is that I am actually agreeing with the people who are talking about their being a problem.

But it is stupid to talk about the problem that average people living in the vast majority of the US have by using NYC and SF as your examples, it actually works *against* the point.

But you guy's can't get our of your sure and certain knowledge that only people who live in the most expensive urban areas of the US matter. It is the exact reverse of how you are trying to paint me. I am not saying "Oh gosh, just move somewhere else" I am saying most people looking for a place to live are not looking for a place in the most expensive parts of the country, they are looking for a place to live (and having trouble finding one) in places a lot more like Rochester, NY than Manhattan, NY.

Dude, I personally don't care if you agree with me or not.  I'm more interested in having interesting discussions, and your stream of consciousness earlier in this thread filled with trademark abrasiveness and total lack of reading comprehension kind of stopped that dead in its tracks.  So I'm just savoring Seedy's work.

Quote from: DGuller on June 02, 2016, 08:53:01 AM
Dude, I personally don't care if you agree with me or not.  I'm more interested in having interesting discussions, and your stream of consciousness earlier in this thread filled with trademark abrasiveness and total lack of reading comprehension kind of stopped that dead in its tracks.  So I'm just savoring Seedy's work.

Of course, just like your savor anyone's work who agrees with you, no matter how ridiculous it is. Raz, Seedy, doesn't matter. It is savory because it agrees with you, even if it makes no rational sense. You are, as always, incredibly consistent in your intellectual rigor.

Quote from: Berkut on June 02, 2016, 09:03:40 AM

Quote from: DGuller on June 02, 2016, 08:53:01 AM
Dude, I personally don't care if you agree with me or not.  I'm more interested in having interesting discussions, and your stream of consciousness earlier in this thread filled with trademark abrasiveness and total lack of reading comprehension kind of stopped that dead in its tracks.  So I'm just savoring Seedy's work.

Of course, just like your savor anyone's work who agrees with you, no matter how ridiculous it is. Raz, Seedy, doesn't matter. It is savory because it agrees with you, even if it makes no rational sense. You are, as always, incredibly consistent in your intellectual rigor.

:yes: You know how us entitled folks think.

Quote from: DGuller on June 02, 2016, 09:06:23 AM

Quote from: Berkut on June 02, 2016, 09:03:40 AM

Quote from: DGuller on June 02, 2016, 08:53:01 AM
Dude, I personally don't care if you agree with me or not.  I'm more interested in having interesting discussions, and your stream of consciousness earlier in this thread filled with trademark abrasiveness and total lack of reading comprehension kind of stopped that dead in its tracks.  So I'm just savoring Seedy's work.

Of course, just like your savor anyone's work who agrees with you, no matter how ridiculous it is. Raz, Seedy, doesn't matter. It is savory because it agrees with you, even if it makes no rational sense. You are, as always, incredibly consistent in your intellectual rigor.

:yes: You know how us entitled folks think.

It isn't very hard to figure out how you think anyway - you aren't nearly as mysterious as you seem to imagine.

It's very easy for you to determine what I think when you're the one deciding what I think.

Quote from: Berkut on June 02, 2016, 08:39:00 AM
I am saying most people looking for a place to live are not looking for a place in the most expensive parts of the country, they are looking for a place to live (and having trouble finding one) in places a lot more like Rochester, NY than Manhattan, NY.

I'm sure many would if they could (not Manhattan but one of the other cushy places like SD).

You are agreeing with someone who is equating NOT living at Johns Hopkins with living in a slum. Those are apparently the only two options in your world - you either live in the very nicest (and most expensive) real estate in America, or you might as well be living in the ghetto.

You know, most people don't live in either. They live in middle class suburbs. Those suburbs exist even around major cities. And there are real problems with the ability of young people to actually afford housing in those middle class areas.

You wonder why people think you are entitled? You can't even discuss the problems of housing for middle class people in middle class areas, which is the vast majority of America, and the vast majority of where college graduates actually want to live. If it isn't SF or NYC, they might as well be slums.

Entitled? That is your word, not mine. But if the gucci loafer fits, by all means slide it on.

Quote from: Berkut on June 02, 2016, 09:15:45 AM
Entitled? That is your word, not mine. But if the gucci loafer fits, by all means slide it on.

Oh, it's your word, from here:

Quote from: Berkut on May 31, 2016, 08:52:21 AM
This is exactly the sense of entitlement we see from DG and others and expressed in the other thread when they whine about how much it costs to live in the places they want to live.

Obviously coming from an idiotic misinterpretation of what I said in this thread, but it is nevertheless your word.

Anyway, we can continue searching for refined ways to express our mutual disdain for each other, but I don't think it's going to be productive, so I'll stick to expressing my amusement at Seedy's gems, which I hope will keep coming.  :)

Quote from: Berkut on June 02, 2016, 09:15:45 AM
You are agreeing with someone who is equating NOT living at Johns Hopkins with living in a slum. Those are apparently the only two options in your world - you either live in the very nicest (and most expensive) real estate in America, or you might as well be living in the ghetto.

Not really.

Quote from: Berkut on June 02, 2016, 09:15:45 AMYou know, most people don't live in either. They live in middle class suburbs. Those suburbs exist even around major cities. And there are real problems with the ability of young people to actually afford housing in those middle class areas.

Ah you mean areas in which I grew up that are also very expensive - by their very proximity (and the fact that they house commuters) to cities that are uber expensive. Joan already covered this with his comment about affordable places really only found Worcester and westward. (And/or have things like crap schools like my MA hometown)

Quote from: Berkut on June 02, 2016, 09:15:45 AMYou wonder why people think you are entitled? You can't even discuss the problems of housing for middle class people in middle class areas, which is the vast majority of America, and the vast majority of where college graduates actually want to live. If it isn't SF or NYC, they might as well be slums.

Entitled? That is your word, not mine. But if the gucci loafer fits, by all means slide it on.

Entitled is a weird word. I don't think I'm entitled to all that very much (maybe right to exist? some civil liberties? bearing arms?). You would be right to point out though that I am privileged. I certainly am that.

Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

Quote from: Tamas on June 02, 2016, 09:23:35 AM
Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

I think you must be right.

Quote from: Tamas on June 02, 2016, 09:23:35 AM
Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

Yeah, I understand his point. There are some Americans whose issues are more important than others. If you are a poorer American trying to hack it in an expensive area, you should know better. Such is beyond your station.

Quote from: garbon on June 02, 2016, 09:23:04 AM

Quote from: Berkut on June 02, 2016, 09:15:45 AM
You are agreeing with someone who is equating NOT living at Johns Hopkins with living in a slum. Those are apparently the only two options in your world - you either live in the very nicest (and most expensive) real estate in America, or you might as well be living in the ghetto.

Not really.

Quote from: Berkut on June 02, 2016, 09:15:45 AMYou know, most people don't live in either. They live in middle class suburbs. Those suburbs exist even around major cities. And there are real problems with the ability of young people to actually afford housing in those middle class areas.

Ah you mean areas in which I grew up that are also very expensive - by their very proximity (and the fact that they house commuters) to cities that are uber expensive. Joan already covered this with his comment about affordable places really only found Worcester and westward. (And/or have things like crap schools like my MA hometown)

No, I mean the vast majority of America that isn't near any uber expensive city. You know, the median reality that most people exist in, where they just live in a average city with average costs and average salaries.

The problem with this focus is that there is no fix for the problem that real estate in and near highly desirable places is going to be expensive, at least not in a market economy. It isn't a new problem, it has existed forever and will exist forever.

The problem of stagnating wages in the middle class combined with increasing real estate prices in median locations is NOT driven by people all wanting to live in the same few places, and focusing on SF and NYC is missing the entire point.

Quote from: garbon on June 02, 2016, 09:26:57 AM

Quote from: Tamas on June 02, 2016, 09:23:35 AM
Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

Yeah, I understand his point. There are some Americans whose issues are more important than others. If you are a poorer American trying to hack it in an expensive area, you should know better. Such is beyond your station.

That is just lying about my point.

Quote from: garbon on June 02, 2016, 09:26:57 AM

Quote from: Tamas on June 02, 2016, 09:23:35 AM
Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

Yeah, I understand his point. There are some Americans whose issues are more important than others. If you are a poorer American trying to hack it in an expensive area, you should know better. Such is beyond your station.

His point is that there may be a housing problem in America, but you cannot come to that conclusion based only on data from SF and NY which are probably two out of the 3-4 most sought-after living areas on the entire planet.

Basically, Berkut is saying America>SF+NY

All I know is that I am selling my house for 200+ thousand dollars which is pretty laughable for a house that small and I am not exactly super close to downtown Austin.

Quote from: Tamas on June 02, 2016, 09:29:41 AM

Quote from: garbon on June 02, 2016, 09:26:57 AM

Quote from: Tamas on June 02, 2016, 09:23:35 AM
Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

Yeah, I understand his point. There are some Americans whose issues are more important than others. If you are a poorer American trying to hack it in an expensive area, you should know better. Such is beyond your station.

His point is that there may be a housing problem in America, but you cannot come to that conclusion based only on data from SF and NY which are probably two out of the 3-4 most sought-after living areas on the entire planet.

Basically, Berkut is saying America>SF+NY

And I thought Joan had moved us beyond those two cities and their immediate municipal borders. From what I recall, Jacob expanded the discussion to 50 million people.

I also think it is a mistake to ignore what is happening in larger cities, or suggested it is not representative or unconnected. No one was saying that those cities should not be expensive but rather noting that it is getting more and more difficult for middle class people to get by in them. People that not so long ago would have been able to get buy in them.

Quote from: garbon on June 02, 2016, 09:38:13 AM

Quote from: Tamas on June 02, 2016, 09:29:41 AM

Quote from: garbon on June 02, 2016, 09:26:57 AM

Quote from: Tamas on June 02, 2016, 09:23:35 AM
Berkut they can't possibly be so stupid as to not understand the point you are trying to make. They are just trolling you.

Yeah, I understand his point. There are some Americans whose issues are more important than others. If you are a poorer American trying to hack it in an expensive area, you should know better. Such is beyond your station.

His point is that there may be a housing problem in America, but you cannot come to that conclusion based only on data from SF and NY which are probably two out of the 3-4 most sought-after living areas on the entire planet.

Basically, Berkut is saying America>SF+NY

And I thought Joan had moved us beyond those two cities and their immediate municipal borders. From what I recall, Jacob expanded the discussion to 50 million people.

I also think it is a mistake to ignore what is happening in larger cities, or suggested it is not representative or unconnected. No one was saying that those cities should not be expensive but rather noting that it is getting more and more difficult for middle class people to get by in them. People that not so long ago would have been able to get buy in them.

But if you expand to 50 million people, as I pointed out, you are also expanding your way right out of the uber expensive areas. The outlying areas of places like LA (which was required to get to those numbers) are not at all similarly expensive as NYC or SF, and are a lot more average.

You can't have it both ways - include the numbers in the "metro areas" of the known expensive places, but still insist that you only talk about the prices in the urban centers.

NYC, of course, is a special case. It is a uniquely desirable place to live that drives housing prices for probably a hundred miles around it. Same with DC. SF is a little different, with crazy prices all around the geographically large bay area.

But LA? There are plenty of middle class suburbs in the LA area that have (compared to the NYC and the Bay area) much more reasonable prices nearer the national medians for middle class areas. If you want to push the pool out, you get into areas where we are no longer talking about the most expensive places anymore.

But even if we do push it to 50 million, that proves my point more than yours - that is going to the top 15% if the US. What about the other 85%? Why should we consider the top 15% representative, rather than the median 15%?

I don't know, it all seems like the same problem.  It comes down to lots of money in the economy, but less and less of it in the lower and middle classes.  It means that being able to afford housing for the vast majority is getting tougher, and in the big population centers it is getting virtually impossible without government assistance of one sort or another.  The big cities are notable precisely because of how extreme the problem is becoming.

Quote from: frunk on June 02, 2016, 10:17:22 AM
I don't know, it all seems like the same problem.  It comes down to lots of money in the economy, but less and less of it in the lower and middle classes.  It means that being able to afford housing for the vast majority is getting tougher, and in the big population centers it is getting virtually impossible without government assistance of one sort or another.  The big cities are notable precisely because of how extreme the problem is becoming.

Well, certainly it is the case that growing middle class income stagnation combined with rising real estate prices are going to exacerbate the already existing basic issue that expensive places are hard for non-wealthy people to live in, but that seems so obviously true as to not really be worth discussion.

However, it has been impossible for the poor to live in Manhattan without government assistance for a long time, even when by all accounts middle class incomes were growing very nicely.

So again, insisting that the discussion begins and ends where DG and garbon live (or want to live?) is not really that useful. When talking about generalities, it makes sense to talk about the averages and medians, not the worst cases.

Quote from: Tamas on June 02, 2016, 09:29:41 AM
Basically, Berkut is saying America>SF+NY

And the counter point is that the problems found in SF+NY should not just be dismissed with a "ah well, if you're not rich enough that's your own problem."

Quote from: Berkut on June 02, 2016, 10:48:49 AM

Quote from: frunk on June 02, 2016, 10:17:22 AM
I don't know, it all seems like the same problem.  It comes down to lots of money in the economy, but less and less of it in the lower and middle classes.  It means that being able to afford housing for the vast majority is getting tougher, and in the big population centers it is getting virtually impossible without government assistance of one sort or another.  The big cities are notable precisely because of how extreme the problem is becoming.

Well, certainly it is the case that growing middle class income stagnation combined with rising real estate prices are going to exacerbate the already existing basic issue that expensive places are hard for non-wealthy people to live in, but that seems so obviously true as to not really be worth discussion.

However, it has been impossible for the poor to live in Manhattan without government assistance for a long time, even when by all accounts middle class incomes were growing very nicely.

So again, insisting that the discussion begins and ends where DG and garbon live (or want to live?) is not really that useful. When talking about generalities, it makes sense to talk about the averages and medians, not the worst cases.

Now we are shifting to only care about poor people? What happened to the middle class?

Quote from: garbon on June 02, 2016, 11:23:47 AM

Quote from: Berkut on June 02, 2016, 10:48:49 AM

Quote from: frunk on June 02, 2016, 10:17:22 AM
I don't know, it all seems like the same problem.  It comes down to lots of money in the economy, but less and less of it in the lower and middle classes.  It means that being able to afford housing for the vast majority is getting tougher, and in the big population centers it is getting virtually impossible without government assistance of one sort or another.  The big cities are notable precisely because of how extreme the problem is becoming.

Well, certainly it is the case that growing middle class income stagnation combined with rising real estate prices are going to exacerbate the already existing basic issue that expensive places are hard for non-wealthy people to live in, but that seems so obviously true as to not really be worth discussion.

However, it has been impossible for the poor to live in Manhattan without government assistance for a long time, even when by all accounts middle class incomes were growing very nicely.

So again, insisting that the discussion begins and ends where DG and garbon live (or want to live?) is not really that useful. When talking about generalities, it makes sense to talk about the averages and medians, not the worst cases.

Now we are shifting to only care about poor people? What happened to the middle class?

How do you get that from me talking about the middle class?

Quote from: Jacob on June 02, 2016, 11:12:10 AM

Quote from: Tamas on June 02, 2016, 09:29:41 AM
Basically, Berkut is saying America>SF+NY

And the counter point is that the problems found in SF+NY should not just be dismissed with a "ah well, if you're not rich enough that's your own problem."

Good point, you should totally bring that up to whoever said such a thing.

Quote from: Berkut on June 02, 2016, 09:47:11 AM
But even if we do push it to 50 million, that proves my point more than yours - that is going to the top 15% if the US. What about the other 85%? Why should we consider the top 15% representative, rather than the median 15%?

We should consider them all - but my point is that even 10% of the population is more than enough to consider it a problem worthy of national attention and impact.  If unemployment is 10% that is considered a problem of national significance, even though 90% are employed.

Quote from: The Minsky Moment on June 02, 2016, 11:46:10 AM

Quote from: Berkut on June 02, 2016, 09:47:11 AM
But even if we do push it to 50 million, that proves my point more than yours - that is going to the top 15% if the US. What about the other 85%? Why should we consider the top 15% representative, rather than the median 15%?

We should consider them all - but my point is that even 10% of the population is more than enough to consider it a problem worthy of national attention and impact.  If unemployment is 10% that is considered a problem of national significance, even though 90% are employed.

I don't think those metrics are comparable.

The issue is not that the rest of the country is fine, and the 15% most expensive parts of the country are having issues.

The issue is that most everyone is having issues, and focusing on just the most wealthy areas misses the point. The uber expensive parts of the country have a problem that exists completely outside of the core issue being discussed.

So, if we want to talk about the problem of housing affordability, it is actually distracting to focus on those parts of the country where the problem is NOT primarily driven by the reasons it is a problem for the average or median, but rather is simply driven by basic laws of supply and demand. It lets people who want to deny the problem to simply refute the issue as being one about how people want to live in the most expensive places, rather than one about stagnant incomes in the middle class.

In many ways, it is a much simpler issue, although also one that is likely much harder (if not impossible) to solve. I certainly haven't heard any viable suggestions, and this problem has existed for as long as I can remember. NYC has rent controls and such, hell my sister lives in a rent controlled apartment that her landlord would love to get her out of - so I guess that is a "solution" of sorts? I don't know if the general feeling in NYC is that that is working or not overall.

It is, fundamentally, a *different* problem. One that could certainly be exacerbated by the problem in question, but if you could fix the stagnant income and rising real estate prices problem that the 85% are facing, it likely would not have a significant impact on the problems with affordable housing that NYC has been struggling with for decades.

Quote from: Berkut on June 02, 2016, 11:44:51 AM
Good point, you should totally bring that up to whoever said such a thing.

Will do :)

Quote from: Berkut on June 02, 2016, 10:48:49 AM
Well, certainly it is the case that growing middle class income stagnation combined with rising real estate prices are going to exacerbate the already existing basic issue that expensive places are hard for non-wealthy people to live in, but that seems so obviously true as to not really be worth discussion.

However, it has been impossible for the poor to live in Manhattan without government assistance for a long time, even when by all accounts middle class incomes were growing very nicely.

So again, insisting that the discussion begins and ends where DG and garbon live (or want to live?) is not really that useful. When talking about generalities, it makes sense to talk about the averages and medians, not the worst cases.

Except it's the exact same problem everywhere.  The point is that expensive areas aren't some magical separate case that you can ignore in the rest of the country.  It's showing exactly how dangerous it is when the money available far outstrips the resources of the average person.  It's a leading indicator of just how bad it can get.

Quote from: Berkut on June 02, 2016, 11:53:06 AM
. The uber expensive parts of the country have a problem that exists completely outside of the core issue being discussed.

So, if we want to talk about the problem of housing affordability, it is actually distracting to focus on those parts of the country where the problem is NOT primarily driven by the reasons it is a problem for the average or median, but rather is simply driven by basic laws of supply and demand. It lets people who want to deny the problem to simply refute the issue as being one about how people want to live in the most expensive places, rather than one about stagnant incomes in the middle class.

The issues are connected.  Middle income stagnation is a driver of urban housing unaffordability

In theory you could have a situation where median incomes are stagnant because the economy in general is stagnant. That would an Italy scenario, or at a greater extreme, Venezuela.  That's not what has been happening in the US over the past few decades.  Instead we have had a growing economy where most of the gains are going to a relatively small cohort at the top of the income distribution.  That cohort has unusually high demand for positional goods like apartments in desirable urban areas and that drives the prices up.  Moreover the demand is very difficult to satiate because building more supply and drawing more of those kinds of people in just increases the attractive force.  It also creates a secondary problem - new supply is concentrated at the high end of the market (luxury condos) but all these rich condo owners need people to drive them around, cook for them, dry clean their clothes etc.   Because more affordable housing supply is not increasing anywhere near the same pace there is nowhere for those people to live nearby and so they are driven out deeper into outlying areas, thus driving up pricing there.  A vicious cycle.  And that's why a neighborhood like Carrol Gardens in Brooklyn, formerly an Italian working class neighborhood as recently as the 90s, now sports 3 story row houses starting at 3 mil.  These
housing issues you see as separate are really another symptom of the same problem.

Quote from: Jacob on June 01, 2016, 12:13:08 PM

Quote from: garbon on June 01, 2016, 11:32:48 AM

Quote from: The Minsky Moment on June 01, 2016, 11:22:49 AM
In a sense I agree that NYC's housing cost problem or SF Bay's housing costs problems are the problems of those areas, not the nation as a whole.  But then you add in DC, Boston, LA/SD/Socal, and now you are starting to talk about a very significant % of the population of the US.

Yeah just did a quick sum of those cities (+area for Bay Area) and that's 21 million people or so. That's a pretty large chunk of citizens in the US.

Googling, I get 7M for SF, 6M for DC, 20M for NYC, 4.5M for Boston, and 18.5 for LA (all metro areas). That's a total of 56 million.

Add metro Seattle for sure.

EDIT:  And metros Philadelphia, Chicago, Miami-Dade, and Denver are pretty borderline on affordable housing, I think.

And now they've made a companion article.

http://fivethirtyeight.com/features/the-rent-is-less-damn-high/

QuoteThe Rent Is Less Damn High

Last week, I pointed to skyrocketing rents as one reason that so many Americans are living with their parents into their 20s and 30s. But relief may be on the way for millennials and their beleaguered parents: Rents may, at last, be cooling off, especially in the most expensive cities.

Don't break out the champagne — or the moving boxes — just yet. So far the biggest slowdown in rents is confined to the most expensive apartments in the most expensive cities. But there's reason to think the trend will eventually reach the broader market.

On Wednesday, Equity Residential, a big apartment landlord with buildings in more than a dozen U.S. cities, warned investors that revenues would be lower than expected because of softening rents in New York and San Francisco. It was the second time this year that the company had to cut its forecasts — and it isn't alone. Appraisal firm Miller Samuel Inc. reports that to lure tenants, a growing share of Manhattan landlords are being forced to cut prices or to offer concessions such as a free month's rent. Median rents in Manhattan (for all unit sizes) fell in March for the first time in two years before rebounding somewhat in April.

(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fi2.wp.com%2Fespnfivethirtyeight.files.wordpress.com%2F2016%2F06%2Fcasselman-irt_0603.png%3Fquality%3D90%26amp%3Bstrip%3Dall%26amp%3Bw%3D575%26amp%3Bssl%3D1&hash=8533c9fcb660d054817604366bc974d3433f5642)

Rents are still rising faster than inflation in most of the country, and they are accelerating in cheaper markets such as Las Vegas, Dallas and Jacksonville, Florida. But the slowdown in many of the most expensive markets has been striking. A year ago in New York, rents were rising at an annual rate of 9 percent, according to an index compiled by the real estate site Zillow; in April, they were up 3.8 percent. In Los Angeles, rental growth slowed from 9.2 percent last year to 5.7 percent this year. Even in San Francisco, home to the country's highest rents (and fiercest rental battles), the growth rate has slowed to 7.4 percent from more than 17 percent a year ago.

What's behind the slowdown? Supply and demand. Developers have been on an apartment-building spree in recent years, and those buildings are now coming online, flooding the market with new units. In its press release Wednesday, Equity blamed "new rental apartment supply" for its lowered expectations. Miller Samuel estimates that apartment inventory is up 23 percent in Manhattan and 16 percent in Brooklyn in the past year. Meanwhile, demand may be hitting its limits: Miller Samuel President Jonathan Miller said some New Yorkers are buying in the suburbs rather than continuing to struggle to pay rent in the city.

"Consumers, after a number of years of rising rents, are going through some sort of affordability threshold where they start considering alternatives," Miller said.

Affordability is unlikely to improve quickly. Most of the buildings coming online are at the top end of the market. As a result, rents for luxury buildings are leveling off or even falling, while rents continue to rise in the lower and middle tiers of the market. Eventually, the high-end slowdown should filter through to the rest of the market, as wealthier renters move into expensive new buildings, reducing competition for older apartments. (In time, the new units will also become less desirable and therefore more affordable.) But market forces work slowly. Miller said he expects "more of a slow bleed than some sort of overnight correction."

The process could move faster if developers were building more apartments targeted at lower- and middle-income renters. But as Daniel Hertz has written, U.S. cities are building mostly single-family homes and high-rise apartments — leaving a "missing middle" of small apartment buildings that were once a key source of affordable housing. That's at least partly the result of zoning codes that discourage such building.

Still, even without major policy changes, the runaway rents of the past few years look like they have come to an end. Zillow expects 3.3 percent growth in rents nationwide over the next year — modest compared with the 5-plus percent seen much of last year — and many expensive cities, including New York, should see milder increases. That won't by itself reverse the affordability crisis that now plagues many U.S. cities, but at least it might give renters some much-needed relief.

Mandatory minimums

The surprisingly successful battle for a $15 minimum wage has been waged, to a large degree, at the city level. Seattle, Los Angeles and other cities around the country have adopted minimum wages higher than their states require. But now states are pushing back against such moves.

The Wall Street Journal reported this week that states including Alabama, Arizona and North Carolina have passed laws barring local jurisdictions from adopting higher minimum wages. Other states — mostly conservative states with more liberal cities — are considering doing the same. Minimum wages aren't the only target; state legislatures are also trying to prevent cities from requiring companies to offer paid sick leave and other benefits.

Backers of these so-call pre-emption laws argue that businesses shouldn't have to navigate different rules every time they expand into a new city or town. That argument makes sense when it comes to safety rules, environmental regulations or occupational licensing requirements — construction isn't any more dangerous in Phoenix than in Tempe, after all. But the minimum wage is a different story; the cost of living can vary widely from one city to another, even within a state, so it makes sense for the minimum wage to vary, too.

Stay in (the right) school

For all the recent debate over whether college is "worth it," higher education remains the best path to the middle class for most Americans. But new reports this week highlighted two important caveats: College is only worth it for those who finish their degrees and who choose the right program in the first place.

I've written before about the importance of ensuring that students who start college go on to graduate — students who drop out often struggle to pay back student loans, leaving them worse off financially than if they'd never gone. A new report from Third Way, a Washington think tank, found that many private colleges are failing to help students — and especially low-income students — finish their degrees. According to the report, at the average private, non-profit school (a small minority of all institutions), only 55 percent of full-time students graduate within six years. As Quoctrung Bui of The New York Times illustrated, the schools that enroll the most low-income students also tend to have the lowest graduation rates.

Meanwhile, separate research released this week found that students who attended for-profit colleges ended up worse off on average than if they had never enrolled at all. Using data from the Internal Revenue Service, the researchers found that students who went to for-profit schools are less likely to have a job and earn less money than they did before they started. They also, of course, have significantly more debt. By contrast, associate degree programs at public colleges substantially boosted students earnings.

Number of the week

Consumer spending rose at a 1 percent annual rate in April, the Bureau of Economic Analysis reported Tuesday. That's the fastest growth in more than six years.

Economists cautioned against reading too much into the report, which likely reflected one-time seasonal fluctuations. (For example: Unusually warm weather earlier this spring led to lower utility spending in March, which made April's more normal spending look stronger by comparison.) But even if April's jump was a fluke, the underlying trend in consumer spending remains strong. That's good news given that the manufacturing sector is struggling amid weak global growth.

We'll get a more up-to-date glimpse of how both the consumer and manufacturing economies are doing in the May jobs report, which will be released this morning. We'll have our usual coverage later today.

Also median rents in the biggest 25 cities. Interesting order.

QuoteSan Francisco   $4,535
San Jose   3,347
Los Angeles   2,631
Boston      2,499
Seattle      2,429
San Diego   2,410
New York   2,335
Denver      1,961
Austin      1,789
Chicago      1,682
Houston      1,444
Fort Worth   1,345
Baltimore   1,343
Dallas      1,335
Charlotte   1,274
San Antonio   1,244
Phoenix      1,227
Las Vegas   1,221
Philadelphia   1,204
Jacksonville   1,157
Columbus   1,126
Indianapolis   1,066
El Paso      1,026
Memphis      849
Detroit      754

Damn you cannot even flee to San Jose anymore. Poor Northern California residents.

QuoteSan Diego   2,410
New York   2,335
Denver      1,961
Austin      1,789
Chicago      1,682
Houston      1,444
Fort Worth   1,345
Baltimore   1,343
Dallas      1,335
Charlotte   1,274
San Antonio   1,244

Fuckers. Moving to Texas in record numbers and ruining our housing market. Not even our infamous endless suburban sprawl can cope.

Quote from: garbon on June 03, 2016, 07:41:27 AM

Also median rents in the biggest 25 cities. Interesting order.

QuoteSan Francisco   $4,535
San Jose   3,347
Los Angeles   2,631
Boston      2,499
Seattle      2,429
San Diego   2,410
New York   2,335
Denver      1,961
Austin      1,789
Chicago      1,682
Houston      1,444
Fort Worth   1,345
Baltimore   1,343
Dallas      1,335
Charlotte   1,274
San Antonio   1,244
Phoenix      1,227
Las Vegas   1,221
Philadelphia   1,204
Jacksonville   1,157
Columbus   1,126
Indianapolis   1,066
El Paso      1,026
Memphis      849
Detroit      754

And to my point....the median price of the rent in the 25 largest cities is around 1/3rd the price of the high end. They are not comparable, and you cannot lump them all together as if they are basically the same, and this is ONLY looking at the 25 largest cities. If you go to the 25-50 large metro areas, I am sure that price fall will be a little more, although probably not much. I think the average rent in medium sized cities is probably near 25-50% mark of this list (meaning the 25-50% place, not amount, ie pretty close to this median, but a little lower).

I am surprised that NY is not higher though - I would have thought the prices there would be more SF-like. I guess NY is huge though, and the difference between Manhattan and the Bronx or Harlem is probably pretty extreme.

Also surprised Chicago is not higher. I thought that was pretty expensive - but again, it is huge so there are probably parts that are not very desirable compared to the expensive parts?

Chicago is not that huge geographically. It is half the size of New York in terms of square mileage.

Oh and Harlem is part of Manhattan and pretty expensive IIRC.

Quote from: Valmy on June 03, 2016, 08:50:57 AM
Chicago is not that huge geographically. It is half the size of New York in terms of square mileage.

I meant huge population wise - and hence presumably has a wide divergence in housing costs.

A quick google search, for example, has average rent in Manhattan at 4081/month, which is almost double the NYC average. I suspect something similar is true in Chicago, where the "want to live" parts are very expensive, and the "you really, really don't want to live" parts are probably down at the bottom of that list.


And yes, Harlem is technically part of Manhattan, but not really. Rents there are about 60% of Manhattan averages.

Quote from: Berkut on June 03, 2016, 08:46:47 AM
And to my point....the median price of the rent in the 25 largest cities is around 1/3rd the price of the high end. They are not comparable, and you cannot lump them all together as if they are basically the same, and this is ONLY looking at the 25 largest cities. If you go to the 25-50 large metro areas, I am sure that price fall will be a little more, although probably not much. I think the average rent in medium sized cities is probably near 25-50% mark of this list (meaning the 25-50% place, not amount, ie pretty close to this median, but a little lower).

So? You shouldn't actually expect them to be similar given that all things regarding pricing are very different across these cities. Much in the same that it is very different across areas all around the US. I don't see why average rent across the US is all that interesting given that really says nothing unless you have the context of salaries and prices of expenses in various places.

Quote from: Berkut on June 03, 2016, 08:55:44 AM
And yes, Harlem is technically part of Manhattan, but not really. Rents there are about 60% of Manhattan averages.

Well yeah you over a hundred of blocks away from Wall Street. But come on Berkut it is one of the most famous parts of Manhattan. The point is that even to live in Brooklyn or the Bronx you can pay a lot for very shit accommodations. Sucks for your family of five.  But, to be fair, being crammed into a shitty little apartment with your extended family is what the whole NYC experience has always been about.

QuoteI meant huge population wise - and hence presumably has a wide divergence in housing costs.

Realestate costs are based on location though. Chicago is a very compact city, at least in terms of it's jurisdictional boundaries. I am aware its suburbs go on and on but those are different towns.

Quote from: garbon on June 03, 2016, 09:03:11 AM

Quote from: Berkut on June 03, 2016, 08:46:47 AM
And to my point....the median price of the rent in the 25 largest cities is around 1/3rd the price of the high end. They are not comparable, and you cannot lump them all together as if they are basically the same, and this is ONLY looking at the 25 largest cities. If you go to the 25-50 large metro areas, I am sure that price fall will be a little more, although probably not much. I think the average rent in medium sized cities is probably near 25-50% mark of this list (meaning the 25-50% place, not amount, ie pretty close to this median, but a little lower).

So? You shouldn't actually expect them to be similar given that all things regarding pricing are very different across these cities. Much in the same that it is very different across areas all around the US. I don't see why average rent across the US is all that interesting given that really says nothing unless you have the context of salaries and prices of expenses in various places.

I think it is the only interesting data point in the general argument about the problems of affordable housing across the US. If the discussion is about housing prices in NYC and SF, then it isn't important. Which is, I suspect, the basic problem. The idea that there exists this entire America that isn't in NYC/SF/Boston/Chicago.

Of course you need to be able to compare that to salaries and expenses, but that is true for even your desire to pretend the middle part of the country doesn't exist. :P

Quote from: Valmy on June 03, 2016, 09:10:21 AM

Quote from: Berkut on June 03, 2016, 08:55:44 AM
And yes, Harlem is technically part of Manhattan, but not really. Rents there are about 60% of Manhattan averages.

Well yeah you over a hundred of blocks away from Wall Street. But come on Berkut it is one of the most famous parts of Manhattan. The point is that even to live in Brooklyn or the Bronx you can pay a lot for very shit accommodations. Sucks for your family of five.  But, to be fair, being crammed into a shitty little apartment with your extended family is what the whole NYC experience has always been about.

Oh, I get it. My little sister lives in an apartment in Stuyvesant Town with her husband, three daughters, and one rather large dog.

I very much understand the "jam a bunch of  people into a small area" meme!

Or rather, I am aware of it - personally, I don't *understand* it, it seems nuts to me.

But that is a choice they made, and they seem happy with it overall. They are not forced to live there, they could live elsewhere if their priorities were different.

Quote from: Berkut on June 03, 2016, 09:11:57 AM
I think it is the only interesting data point in the general argument about the problems of affordable housing across the US. If the discussion is about housing prices in NYC and SF, then it isn't important. Which is, I suspect, the basic problem. The idea that there exists this entire America that isn't in NYC/SF/Boston/Chicago.

I don't think anyone is advancing the point that the rest of the country doesn't exist. I may not like the bits outside my safe blue corridors but that doesn't mean they don't exist.  Nor does it mean that people who have issues living in and around the nations big cities are just entitled folk who should get over themselves and move to middle America.

Quote from: Berkut on June 03, 2016, 09:11:57 AM
Which is, I suspect, the basic problem. The idea that there exists this entire America that isn't in NYC/SF/Boston/Chicago.

When the time comes to discuss agricultural policy, or the impact of fracking on local water supplies, or federal land use policy, there are plenty of us metro folk that listen politely without saying - oh that's just Iowa's problem not an American problem.  It's possible to consider that a regional problem has national significance without denying the existence of everywhere else.

Quote from: The Minsky Moment on June 03, 2016, 09:45:32 AM

Quote from: Berkut on June 03, 2016, 09:11:57 AM
Which is, I suspect, the basic problem. The idea that there exists this entire America that isn't in NYC/SF/Boston/Chicago.

When the time comes to discuss agricultural policy, or the impact of fracking on local water supplies, or federal land use policy, there are plenty of us metro folk that listen politely without saying - oh that's just Iowa's problem not an American problem.  It's possible to consider that a regional problem has national significance without denying the existence of everywhere else.

Nobody is denying that there is a regional problem with housing prices though.

The discussion did not start about *regional* housing costs, it started about national housing costs. And then immediately you guys focused on the regional issue specifically. My entire point is that when talking about the national problem, bringing up the regions where the problem is only partially about the national problem is not useful, since it makes it easy to dismiss as just a regional problem, especially when the data shows that those regions are extreme outliers to the average that is under discussion.

This is exactly the opposite of what you are saying. The problem of national housing prices moving up while national incomes remain stagnant is NOT well illuminated by talking about how hard it is to find affordable housing in Manhattan or San Francisco. Because most people are not looking for housing in those places, and those places are not at all similar to the vast majority of places where the average American is experiencing this pain.

Noting that seems, to me, pretty uncontroversial. It isn't denying that there is a problem in those places (indeed, those places have much *worse* problems, and have for some time, *because* they are in fact those outliers to the mean). I am kind of at a loss at this point. If you want to have a discussion about any particular topic, basic reason says that using outlier extremes as your example set is almost always misleading.

Quote from: garbon on June 03, 2016, 09:16:18 AM
Nor does it mean that people who have issues living in and around the nations big cities are just entitled folk who should get over themselves and move to middle America.

Speaking for Middle America, my preference is for big city types to remain crammed in their cities and not move here.  I mean, just look what they did to Florida :bleeding:

Quote from: derspiess on June 03, 2016, 10:16:03 AM

Quote from: garbon on June 03, 2016, 09:16:18 AM
Nor does it mean that people who have issues living in and around the nations big cities are just entitled folk who should get over themselves and move to middle America.

Speaking for Middle America, my preference is for big city types to remain crammed in their cities and not move here.  I mean, just look what they did to Florida :bleeding:

It was a shitty state and has continued to be so the difference is? :huh:

Quote from: derspiess on June 03, 2016, 10:16:03 AM
I mean, just look what they did to Florida :bleeding:

Yeah it used to be more like Alabama and Mississippi. What a tragedy :lol:

Quote from: Valmy on June 03, 2016, 10:36:33 AM

Quote from: derspiess on June 03, 2016, 10:16:03 AM
I mean, just look what they did to Florida :bleeding:

Yeah it used to be more like Alabama and Mississippi. What a tragedy :lol:

The parts that were like that are still like that.  Nowadays you can't go anywhere in central Florida without hearing NY/NJ accents.  Only positive thing is that there are better Italian restaurants.

Quote from: derspiess on June 03, 2016, 10:54:33 AM

Quote from: Valmy on June 03, 2016, 10:36:33 AM

Quote from: derspiess on June 03, 2016, 10:16:03 AM
I mean, just look what they did to Florida :bleeding:

Yeah it used to be more like Alabama and Mississippi. What a tragedy :lol:

The parts that were like that are still like that.  Nowadays you can't go anywhere in central Florida without hearing NY/NJ accents.  Only positive thing is that there are better Italian restaurants.

Huh. What was Miami like before the yankees moved in?

20-somethings? Oh boo hoo. There are plenty of 40-somethings moving back with their parents in London.

Quote from: Brazen on June 03, 2016, 11:11:13 AM
20-somethings? Oh boo hoo. There are plenty of 40-somethings moving back with their parents in London.

How sweet! Their elderly parents probably need to be cared for.

I grew up in an apartment. :)

Quote from: Valmy on June 03, 2016, 11:07:31 AM
Huh. What was Miami like before the yankees moved in?

Dunno.  First time I got to visit Miami was like 2003.

Quote from: Berkut on June 03, 2016, 09:14:35 AM

I very much understand the "jam a bunch of  people into a small area" meme!

Or rather, I am aware of it - personally, I don't *understand* it, it seems nuts to me.

Some people get lonely.  :P

These are the type of people who make kickball games mandatory to join so they can have enough players.  :lol:

Quote from: Brazen on June 03, 2016, 11:11:13 AM
20-somethings? Oh boo hoo. There are plenty of 40-somethings moving back with their parents in London.

London is an outlier among outliers. You guys have the perfect storm of circumstances, effects, rules and regulations to ensure insane housing prices. London is doing literally everything wrong in that respect. At least from what I can tell.

Quote from: derspiess on June 03, 2016, 11:15:39 AM

Quote from: Valmy on June 03, 2016, 11:07:31 AM
Huh. What was Miami like before the yankees moved in?

Dunno.  First time I got to visit Miami was like 2003.

Will Smith's song didn't grip you like it did the nation? :unsure:

Quote from: Valmy on June 03, 2016, 11:07:31 AM
Huh. What was Miami like before the yankees moved in?

It's an interesting question -- I think it was quite a sleepy town before the influx of Jews and Cubans, but even as late as the 70s, when Miami Beach was known for being full of decaying old residential hotels.

I imagine it was a backwater until the invention of AC, much like the rest of the South.

Anyway, my guess is that automated cars, when they finally come online, will really disrupt the real estate equation and reverse the increasing urbanization we're currently going through.  The drastically improved efficiency of automated traffic will open up quite a few areas that are currently impractical to commute from.  Maybe this will reverse the trend from the cost of real estate side rather than the income side.

Hmm, hadn't thought of that.  Traffic in Seattle, for instance, is horrendous.  And I think that is part of what's driving the move on the part of Amazon, Expedia, etc. to relocate their corporate campuses in the city after being in the suburbs.  Though I think "lifestyle" reasons are a significantly greater factor, given that their employees could reverse-commute (a la Google employees living in S.F. and catching the Google shuttle out to Silicon Valley).

Those factor expand the sprawl too. Which most people say is a negative thing. I'm not sure the death of the regional small city is necessarily good.

What regional small city do you have in mind?  Seattle, S.F., and NYC certainly aren't such.

Prunedale :(

Reno is a regional small city.

Yeah but there's a big wall of mountains keeping it from being swallowed up like San Jose or Bellevue.

Ah, you like to see some wilderness between cities.

New York:  nobody lives there any more, it's too crowded.


(apologies to Yogi Berra)

Quote from: derspiess on June 03, 2016, 10:16:03 AM
Speaking for Middle America, my preference is for big city types to remain crammed in their cities and not move here.  I mean, just look what they did to Florida :bleeding:

Sorry   :(