One measure is the ratio of CEO compensation to the average employee in the same firm. That ratio was 21 in 1965, today it is 290. Imagine the average worker making 13x what they make today. The late stage capitalism of capital accumulating at the top is accelerating.
https://www.consumeraffairs.com/finance/comparing-the-costs-...
Basically some things have gotten cheaper – TVs, gas, etc. – but things like inflation-adjusted housing or college prices have increased so much that people affected by them have a very different experience. This is a constant refrain many people I know who are under ~50 or so have where older relatives simply don’t understand that, say, they could go to UCLA with a part-time summer job because prior to Saint Ronnie that meant book and lab fees, and at first tuition was an order of magnitude lower (adjusted for inflation).
That creates enormously different beliefs because someone who bought a house in 1982 and has been rolling equity forward ever since has no idea what the subjective experience is like for their kids who graduated with heavy debt service and rents 50% higher.
No?
Bungalows built in 1970s are selling $500k CAD in Montreal's suburbs today.
> But people want modern sizes with all the appliances and nice kitchens, two car garages and whatnot.
Probably they 'want' but very few percentage wise live in such houses, at least in Canada.
Heck, most older houses across CA still have redlined contracts from that era included in the buying history.
"A Raisin in the Sun" was the reality barely 4-5 decades ago.
Years ago when I was doing public policy analysis and advocacy full time, I spent some time thinking about home ownership, being financially and otherwise prepared, understanding the realities of home ownership, and acknowledging ownership is not the only game in town.
Either Fannie or Freddie published a paper about "appropriate" housing options for a person's stage in life. Nothing set in stone, but patterns and priorities.
The paper made the point that not everyone wants the responsibility of owning. These folks have other priorities and don't consider themselves failures by renting. Similarly, families may choose to live with other generations. Some older folks move to rentals, smaller owned homes, or assisted living.
The bee in my bonnet has always been the "I want I should have" mindset. When it comes to housing, it goes like "I want to die in my house." Great if you can afford it - meaning affording maintenance, modifications (ramps, lefts, etc.), skilled and unskilled help, taxes, etc. The rub comes when people can't afford it. Some jurisdictions offer interest-free loans to add ramps, etc.; loans are paid back upon death.
I'm not indifferent to the struggles of aging. But ignoring it does not make it go away. I feel like with the time and energy we put into trying to address affordable housing, for example, we should also pay attention to our individual (and community?) plans for getting older.
Back to the point: In my policy days, hearing stories about how old folks died in their homes and their kids expected a windfall only to find out that the property had to be sold to pay for X, Y, and Z. The house was great collateral but was not a wealth transfer as may have been expected.
Not sure how to balance, accommodate all the competing interests, but what we are doing now is certainly not working.
If we can remove all the factors that force up prices on new builds (and don't care if the market for existing homes crashes) then it may be reversed.
Material cost should be reversible if you don't expect the house to look like you live at a resort. And we have to ensure supply like incentivising new plantations to eliminate timber shortages.
Fixing zoning restrictions will take political will. Stripped local councils of their zoning powers should mean any nimby-isms around building higher density housing, allowing smaller blocks could be ignored.
Land release is also fixable by taxing undeveloped land that is zoned residential. More land available should lower prices.
Stop doing Government incentives to buy houses. Giving first-home buyers grants simply drives up prices everywhere.
Eliminate tax write-offs for "investment" properties: Owning a house should have never been like owning a business. This had the effect of reducing available rentals (and increasing prices) as many were happy to take the growth and the write-off and avoid the maintenance and depreciation that comes with renting the property out. For the renters the price hike made saving for buying a home much more difficult.
Which only works because there's a massive Ponzi scheme supported by fresh buyers.
In New Zealand our demographics would lead to a crash (as seen in some places overseas), but we have a lot of immigration that props demand up.
Most people don't see systems, they make decisions based on the current state they see. And voters don't give politicians any incentive to deal with problems.
The Australian average right now is 9.7. Maybe 30 years ago, it was closer to 3 (the 150k house on a 50k wage).
Demographia unfortunately stopped covering my locality which consistently ranked in bottom 10 internationally. Given the local median house price is 1.3m and median household income is 90k it would be 14.4. Makes a mortgage literally a "death pledge" with no chance of paying it off in your working lifetime.
It's certainly not a good thing but part of the second order effects of the broad economic change is that household income alone has long stopped being a useful driver/source of house prices - interest rates, second order effect of boomer wealth through bank of mum & dad, more 2 person full time working households, global migratory movement have all changed the dynamic so much that it feels very apple and pears now.
There's also a point around averages being meaningless from a relativity perspective too. Australia is expensive but as someone who moved from London to non-sydney australia, I do sometimes find it amusing that what is deemed expensive here would get you a shoebox in London v 500+ m2 land house here.
How so?
Some discussion then: https://news.ycombinator.com/item?id=35022207
The average age of U.S. homebuyers jumps to 56 (2024)
https://news.ycombinator.com/item?id=42048640
Priced out of traditional housing, more Americans are living in RVs
https://news.ycombinator.com/item?id=45340442
Investors bought 27% of US homes in Q1, as traditional buyers struggle to afford
asdff•3mo ago
Then you go to the hot markets and salaries for comparable positions are only like 20% more but the exact same home (actually on west coast, subtract the full basement and lot large enough for a detached two car garage) is 10x in price or more.
DaveZale•3mo ago
Meanwhile, the number of vehicles that need mufflers is increasing. It's audible. That is a reliable sign of economic distress.
Nobody can buy a house without a down payment and reasonable job security. The economic gulf widens.
jschveibinz•3mo ago
https://reason.org/commentary/administrative-bloat-isnt-the-...
Benefits are likely affecting municipal government in the same way.
thatfrenchguy•3mo ago
RandomBacon•3mo ago
Their costs probably went up too.
jerlam•3mo ago
BosStartup•3mo ago
In theory, your property went up 40%, if everyone else's did too then your taxes remain the same. You can see this by viewing the tax rate over time and seeing that it has declined (but again, that didn't lower the dollar amount you must pay, just the ratio of tax to property value.)
jerlam•3mo ago
I believe in the poster's jurisdiction, property taxes are based on a percentage of the property value and are independent of the city's actual budget.
Mars008•3mo ago
walls•3mo ago
What are these 70k jobs in the south?
alephnerd•3mo ago
That said, assuming you could afford a 2k square ft house with a backyard in a highly desirable neighborhood similar to what Palo Alto is today on an average person's salary 50 years ago doesn't seem realistic.
Also, 50 years ago, redlining and race as well as gender based discrimination in most jobs was the norm, so unless you were a white (which itself was a narrower term than today) man, there was a glass ceiling, and most jobs that were supposedly high paying in reality largely limited hiring to a subset of Americans.
Additionally, the rural-urban divide then was more severe than it was today. People from those households like Marc Andressen literally didn't have piped water growing up back then in the 70s (he's recounted the story a lot).
Long story short, I don't buy a lot of the nostalgia for the 70s and 80s I'm seeing in this thread - it's very boomer urban white man coded.
walls•3mo ago
alephnerd•3mo ago
asdff•3mo ago
uxp100•3mo ago