Huh, that's nonsense. Every vaccination also carries risks, so there can be no moral obligation if the risks outweigh the benefits.
That said, I also disagree with the moral obligation. At the very least, there are also other scenarios to consider. For example if only a small group is at risk and can't be vaccinated (too risky), that small group could be isolated or choose to self isolate. Afaik it already happens with chemotherapy patients who are being isolated. There is no obligation for the rest of the world to disinfect everything and walk around in hazmat suits so that chemotherapy patients can walk freely in the outer world.
> [0] For "real estate will never go down in value" fans:
You realise that these properties in the picture (Plac Defilad right in the centre of Warsaw) are worth a lot nowadays. And descendants of the original owners get compensated (the land had been confiscated after WW2 by communist government). So I would rather say that real estate could be illiquid with temporarily depressed prices occasionally.
What about people who owned a flat? Have they got compensations restoring entire value? AFAIK no in general.
Or even a noticeable part of original value?
One of my friends recently got compensation (after 60 years old legal battle initiated by person who died before it completed). But that was for property that survived WWII and got confiscated after it.
> And descendants of the original owners get compensated
In other words value of original property went down (especially given opportunity cost).
And they were quite lucky, in similar cases many lost without recourse.
But overall I agree with the main point: real estate is one of best stores of value, some of it can survive even that.
But describing it as never, ever loosing value is not true - in many cases it lost part or all value, permanently, without compensation.
But there is another asset class beside real estate - arable land. People see gold as store of value which is false to some degree - gold was historically more of mean of exchange (of landed wealth) while the universal asset class paying regular dividends since Roman Empire until Industrial Revolution was arable land. And to a degree still is but since Industrial Revolution there are many alternative assets available that provide better/competitive returns (like government bonds)
Of course land could also be taken away but that happens very rarely (Communist revolutions in Russia, China, Central Europe). Historically land-owning class is stable. For example in largest wealth grabs in European history (Burgundians in France, Vandals in North Africa and best of all Norman conquest of Britain) there was generally sharing and mixing between old and new land-owners.
Yes, that should be less fragile than flats/buildings and even more resistant.
As a city dweller posting on internet I somehow missed arable land in a comment about good stores of capital. Go me!
Despite that my cousin owns large farm. Staying for so long in my family that it was located in 5 countries since my family moved into that specific location.
But still, it is not a magic pixie dust: your land can be confiscated, or taken by sea/river or polluted by industry/salt.
Or it may be turned into wetland/desert by some other external changes beyond your control.
risk always changes. you should be constantly reviewing and updating your exposure according to your risk assessments. (for some, this is daily; for others, once a year may be enough.) if you don't want to do the work - understandable, since it's an impossible amount - you might want to start from looking at the bond market. this is what they get paid for. (not saying that you should be buying bonds - but look at relative price of bonds)
In all earnest, I wonder when the mainstream will realize that in a digital world the store of value and a currency can be different because they are easily interchangeable.
Just like bonds or gold for long term investment (store of value) and dollar (currency).
Good luck transporting and securing larger quantities of gold and also exchanging it for money. One basically has to declare any quantity in excess of six ounces / 170 grams of gold because it exceeds 10k US dollars / euros.
I had a friend who was a lawyer in South Africa before their political upheaval. Once his career of choice ceased to exist, he ended up becoming a software tester, then an IT guy at a bank.
I used to feel like you, but I have come back to Java.
Other languages have other pains, for example I have physical revulsion against the version management hacks for python or ruby (rbenv and stuff like that - somehow hacking environment variables on the fly to manage multiple installations of the language).
Two years ago I wrote a small web app in Python and I found hosting very complicated, compared to Java. PaaS exist but are very expensive.
Not bad people by any measure, no. Their advocacy is invaluable. They just have a reputation for having a very creep-friendly culture, for example, the recent RMS fiasco.
In my opinion companies create such departments to stave off government regulation, by pretending to already do all they can about "Ethics in AI" without government intervention.
If those people were hired for that, they failed spectacularly in their jobs.
In a wider sense, the whole "Ethics in whatever" thing seems to just be a power grab.
For example my country has Ethics groups debating Corona measures. I live in a country that theoretically is a democracy. If "ethics experts" get to make decisions that control our lives, why bother with democracy?
Aren't most (all?) modern democracies some flavour of representative democracy?
We elect politicians who appoint bureaucrats who hire staff to run departments, who'll then take advice from committees and expect advisers.
It reads to me like you mean to imply direct democracy, which I suspect would be some magnitudes of order more terrifying than the incompetent fools and puppets presently steering the ships.
It's true that in theory it should be possible to elect another government that chooses not to delegate to the "Ethics Experts". I am not claiming we live in a totalitarian regime because the government decided to consult ethics experts.
It just seems that in this case, ethics are exactly what the people should be voting on - the value system of the society they want. So delegating to an ethics committee is at best propaganda and making excuses for not doing what the people want.
The rich outbidding poor people is not what is causing a housing shortage. There are only so many houses a rich person can occupy. Even if you assume that every rich person keeps a number of spare houses, there are not enough rich people to cause a housing shortage.
The problem isn't a "housing shortage". The problem is that interest rates are so low, so everyone who has a bit of money on the side tries to invest in the real estate market.
The result is that for every house thats sold, there isn't just someone who wants it as a living space, but also 5 people who want it as an investment. So 5 people outbid each other, the highest bidder gets it, and then the sucker who wanted to live there but couldn't afford to buy it ends up renting it.
The problem (at least where I live) is absolutely not that there's too little housing. The problem is that a lot of people want to make money from the real estate market, which drives up prices.
Also, because these investors really really want to make a profit, they'll rather let an appartment sit empty than charge lower rent. The appartement I live in was empty for a year because nobody wanted to pay the high rent. (I was able to negotiate a bit, but it's still pretty high)
Pretending that the people who use the real estate market as investment don't profit off the working class who can barely afford housing is laughable.
My brilliant* idea to solve the real estate problem is to tax the hell out of properties that are sitting empty.
Something like a 2x or 3x multiplier on property taxes or something, especially in densely populated areas, and especially in areas where there is rampant housing insecurity. The tax needs to be greater than the potential gamble of waiting for occupants. This should be both for residential and commercial use real estate.
It's a myth that there are just a ton empty houses sitting idly like that. The reality is that the most expensive housing markets are also the ones with the least vacant. Even after a ton of people temporarily moved out of NYC during the pandemic, like me, the vacancy rate of NYC is still less than that of the entire US.
> It's a myth that there are just a ton empty houses sitting idly like that.
Maybe where you live. NYC and SF are special in that they have very powerful people working to reduce the construction of new housing. This is obviously what needs to get fixed first in those markets, but it isn't a relatable problem in most of the US.
> The reality is that the most expensive housing markets are also the ones with the least vacant.
This is a basic supply and demand observation, and does not preclude the existence of people who allow their properties to sit vacant for long periods of time.
Looks to me like in NYC the vacancy rate is up to 6% (from a previous steady 2-3%) while housing insecurity is increasing.
This exists in Vancouver. Unfortunately, the richest people once again find ways out of it, such as claiming the unit is uninhabitable due to renovation, and proceeding with the slowest and most inefficient renovation process imaginable.
You don’t get taxed on improvements to the land, you get taxed on the value of the land (ie based on the value of the surrounding land... a vacant lot—or a lot being “renovated”—pays the ~same tax per acre as a 3 story apartment building next door instead of an order of magnitude less).
Not without pretty severe fallout for those on the other side of the equation. That same tax would force long-time homeowners and retirees out of their houses as soon as the neighbors start selling to build condos. Maybe this isn't a terrible thing if it leads to more density, but the profit still goes to the developer.
On the contrary, in your scenario, the profit goes to the retirees whose land is now super valuable. That they can’t afford to pay the wealth tax on that land without selling/mortgaging some of it doesn’t mean they’re not now very wealthy. A mortgage or a reverse mortgage would allow them to live the rest of their lives there if they really wanted to. But they’d have to pay their fair share of the tax on that wealth.
You could waive fees for primary residences and tax the hell out of investment properties. I don't understand why prop 13 in California didn't work this way.
I've often thought this about those dark strip malls and grocery stores. They need to be incentivized to either lower the prices so low that someone will move in, or to demolish the building. Just marking it off as a loss every year while it slowly decays destroys the property values nearby.
I have a different idea that maybe I can get some feedback on here. Maybe it's really dumb for obvious reasons, so please tell me.
Construction companies that build residences are clearly creating value for society, so they should be allowed to make some kind of profit. Real estate agencies that buy property from construction companies are doing a very bad thing by renting them as "luxury" housing to people who otherwise have no choice since their livelihood is tied to an urban area.
Why not put a cap on the profit that can be made from a residence? Something like 5x construction costs, plus ongoing costs of maintenance. Suddenly, the "luxury" housing market is no longer suffocating all the affordable housing out of town since the property owner can't expect to rake in the piles of money every month.
If we say "no more profit after 5x" then buildings will constantly be torn down and rebuilt or otherwise "re-constructed" to reset the clock. Renting property has its own ongoing risks as any landlord will tell you, and we reward risk with (potential) profit.
Many buildings are "luxury" in that they cost 15% more to build but then ask for 50% higher rent. It's not hard to find buildings that were once "luxury" but are now kinda gross since the veneer has peeled off. But there's not enough competition in housing to force the rent lower.
What gets people fed up is the seemingly universal constant of rents raising 10% every year despite no additional investment.
Monthly council tax will double for properties that do not have occupants. This is due to my area having over 10% of houses being bought as holiday homes or investments that stay empty for most of the year.
In the UK, it's not just low interest rates, it's also that the rules on renting have made it more attractive for landlords and less attractive for tenants. For example, you used to need a good reason to evict someone, now you can just evict them whenever you like.
Once you moved in, increases in rent used to be regulated. Now a landlord can charge whatever they want after the initial period and if you can't afford it you have to leave.
Landlords used to have to maintain and fix the property. While they still do in theory, in practise they often just threaten one of the two options above to anyone who wants a repair done.
> Landlords used to have to maintain and fix the property. While they still do in theory, in practise they often just threaten one of the two options above to anyone who wants a repair done.
That's not very smart. So the current tenant leaves, and then what? Good luck finding someone else to rent the property at the original price without fixing the issue…
I agree with the premise of what youre saying. I dont think the ratio is 5:1, but probably more like 1:5 -- but -- more importantly -- doesnt this make it good for renters because now there are investment properties in an ample environment looking for people to rent?
I would argue that it is low interest rates AND low supply. If supply was sufficient then renters would just rent the houses which were purchased, possibly at a discount.
It does not as the new owner now has to have the rates high enough to cover the mortgage on the house he just purchased in a bidding war. moreover, the person that wanted to buy it and live in it is now priced out and has to pay rent and misses out on the asset appreciation.
To cover the mortgage, the owner has to pass it to the renter. If the renter could afford the rent, he can afford the mortgage, which mean he can probably afford the house in the first place.
Sounds like the stupid people outbidding each other will lose money on the rent because renters are not outbidding each other.
> If the renter could afford the rent, he can afford the mortgage
This is not necessarily true. In Los Angeles, for example, the price-to-rent ratio is about 38, i.e. if you pay $1000 / month in rent for a place, buying a comparable place would cost you about $450,000 (38 * 12 * 1000). There are a lot of people who could afford to pay $12,000 / year for housing, but could not afford the down payment on a $450,000 mortgage.
For that matter, the interest payments alone mean that renting is cheaper than buying -- 3% interest on a $450,000 loan alone is already $13,500 / year, and that's before taking into account that you also have to pay property taxes (another $3,500 / year), maintenance (probably another couple thousand a year), and principle on the mortgage (about another $9,000 / year).
In less inflated housing markets, it is generally true that the cost of rent is similar to the cost of a mortgage, but that is definitely not true in all markets.
> ... which mean he can probably afford the house in the first place.
Not true. The people (or companies) winning the bidding war for these properties are paying cash. Normals don't have $900K cash laying around to buy a property originally listed at 550K.
You completely miss that a property that I purchase to live in will probably be both interest and loan while a property purchased to rent out will be interest only.
This means that someone buying it to rent out can get a loan for significantly more than someone looking to purchase, making it much easier to outbid them.
Not sure why you refer to the renter as "he", but anyway there are many reasons people cannot afford to buy a house such as living paycheck to paycheck, damaged credit, no collateral etc.
Well, real estate has always been one of the best ways to invest money. But the problem is that there's much more demand than there are supply in some places. If a lot of people wish to live in a specific place, then the price will go up, and vice versa. You could buy several houses in small cities for the price of only one house in Paris, for example.
I see you've been rightly downvoted. In the US, landlords also hold little risk, especially if they are corporate. Renters are stuck by leases and in many states, have little recourse to do anything when the property goes bad and the landlord won't fix things.
Every year they have more equity they can just cash out and walk away. Worst case, they lose the property and their credit gets ruined, exactly the same thing that happens to any renters that have to break their lease.
Landlords lose an investment, Renters lose a home and their kids might have to change schools, etc...
offset by property taxes? Maintenance? Inflation eroding the value of the equity. Time/cost of managing the property. Potentially depreciating property values, depending on area?
I've been a landlord. It's a money sink. Tenants brought in cats (against the lease) that peed all over, making the residence smell unbearable. Had to completely rip out carpet, reseal the floors to get the smell out. Ripped out stair case railings.
It's far from "little risk". It was a time and money sink.
The area itself did not appreciate in value. So after all said and done, definitely lost money.
I'm glad to be done.
I didn't "walk away" like the renters could. I fixed the house, the damage that the renters caused, I assumed the very liabilities that the renters get to punt on. Their leverage in the deal worked in their favor that time. They get to just move on.
Did it break you? Did it damage your family? "After all is said and done", you lost money. You walked away.
How is any of that different then a renter where the landlord sells the home, raises the rent (they can do that every year or so), refuses to fix something (or takes forever to find the "best" price), or just starts doing some other crazy stuff? The risk seems pretty similar to me.
That's very difficult and unlikely to happen under US law. They probably have a corporate entity that will just cease to exist along with any debt. If they don't, bankruptcy or old debt will only impact their credit for afew years.
No different and probably more easily explained then an eviction. Try renting anywhere with an eviction. The risk is largely the same.
> If they don't, bankruptcy or old debt will only impact their credit for a few years.
The idea that you think someone could lose large amounts of money and not have it impact them personally or that there isn't personal fallout perplexes me. This feels like that episode of Seinfeld..
Kramer: It's a write off for them.
Jerry: How is it a write off?
Kramer: They just write it off.
Jerry: Write it off of what?
Kramer: They just write it off!
Jerry: You don't even know what a write off is, do you?
Are we talking business, or personal? Yes, it hurts; but the ability to mitigate that risk is there for any responsible landlord. The landlord has all the consideration about what type of property to invest in, how to structure their payments, how to increase rent or continue renting at old prices, etc.. The tenant has no ability once they move into a place.
All my experience is in the midwest, where there are essentially no renter protections.
Landlords hold all the risk. There's risk of devaluation, risk of renters destroying property, risk of unexpectedly high maintenance costs, risk of insurance/taxes going up more than planned. If anything bad happens to the property, the renter can just walk away, the owner is stuck with it.
I'm not a landlord, sometimes look into it but every time conclude that the risks are far too high for what minimal profit it might bring. So I stick to index funds.
In what world are owners "stuck" with property? The bought an asset, the can sell an asset. Yes, they may need to absorb some losses, but probably not more then then several thousand it will cost a renter to move if the landlord does any number of things in addition to the risks you outlined above.
Yes, landlords have risk. My original point was that renters shoulder the same and more risk.
By "stuck with it", I meant stuck with the problem. e.g. flood damage renders the place unihabitable (nearly always not covered by insurance even), renter packs up and moves, owner is stuck with the problem and the expenses.
The amount a landlord is likely to lose is more then likely less then on years rent. The renter assumes the risk of one years rent and carries that, albeit diminishing, ever year they sign the lease.
There are multiple issues that could cause the landlord to lose the house, all of which would also impact the renter.
There are multiple issues that could cause the renter to lose their lease, only some of which impact the landlord.
The renter is more likely to carry the financial fallout longer, because they have no assets backing their risk.
From your description, it seems to me that renting is cheaper than buying. So it seems renters get the better deal.
It's a pity if a flat is empty for a year, but that in itself also does not cause a shortage. After all, it was rented out after a year.
The market is supposed to deliver the flat to the person who needs it most. In that case, apparently it was you. Without the speculator, somebody would have rented it for a very low price long ago, and you would not have been able to live there at all. So maybe the market worked.
Debtors have to make even on their mortgage, at least, so an increase in prices also drags rental rates up - either because the landlord bought later and has higher costs; or because the increase in prices drives up property tax and thus increases costs on existing properties.
If the market worked, you'd see people building multi-family units everywhere until supply caught up with demand, and then you'd see a huge crater in prices as people who took a bath on real estate speculation were overrun with the resulting supply glut. This doesn't happen, for a host of various reasons. Governments want housing to be simultaneously affordable and an investment, which is impossible. Hence most cities wind up building a sort of shadow immigration system, through rent control, selective property tax moratoriums, and so on. People who have lived in a city all their life enjoy lower rents, subsidized by people who just moved in and have to buy at market rate.
A market working does not imply the creation of unlimited supply. Governments that restrict building are an external factor. Markets can only operate within those bounds. Since land for building is scarce, prices rise.
There are other factors, of course. Just speculation does not really seem to be a major one.
Key word here being "working". The market is literally hindered here by said government. The natural response to high demand for housing would be more housing and higher density housing. Zoning laws do a fantastic job of hammering that down.
Renter here. I have yet to find a person who pays a lower mortgage then I pay renting. Renting also goes up every year with little ability of the renter to arrest that increase.
In my experience the renter is usually paying the full cost of the mortgage, plus a little to the landlord. The landlord has no savings or interest in improving or fixing anything past the bare minimum.
So why don't you buy? I am in the opposite position. I would like to buy something, but I can not find anything that would be worthwhile (mortgages lower than the rent I pay at the moment, or lower than rent I could ask for renting out).
Not GP but usually the big reason for not buying is that you either need a large amount down (20% in my market, or 10% + additional monthly "Mortgage Insurance" payments until you hit 23% ownership). Average home price in the "Greater Area" around the city (meaning you might still not live close enough to be able to use public transit) is currently ~$665,000 according to Zillow, which means you need to come up with ideally ~$133,000 to put 20% down, or ~$66,000 and pay a premium on top of your mortgage. Either way, this huge down-payment is in addition to the ~7-15k in closing costs you'll be paying. Even then, you're bidding against cash buyers who are willing to waive inspection, so good luck.
$70k-150k up-front isn't easy to save up for even above-average earners (remember, these are average home prices, not luxury homes), so anyone earning average or below is forced into either renting forever, or moving to another town.
> There are only so many houses a rich person can occupy.
Do you really think that’s a factor? That the wealthy say “My family has all bedrooms they need, so I’m done investing in real estate?” PE firms buy up entire communities and repackage their mortgages into investment products. Foreign investors will buy property regardless of location and never step foot in it if it’s in a more stable country than theirs. Real estate investing is not about finding a place to live for the wealthy.
Then we should have a substantial land value tax. If they want to park their wealth in unoccupied housing, they’ll have to pay dearly for it. And they won’t get a cheaper bill by leaving it unbuilt or unoccupied.
“We find that housing speculation, anchored, in part, on extrapolation of past housing price changes, led not only to greater price increases and more housing construction during the boom in 2004 to 2006, but also to more severe economic downturns during the subsequent bust in 2007 to 2009.”
> Owning a house is becoming more and more a thing for the upper classes
Something like 60% of US people own a home. 30% even own their home completely outright, with no mortgage.
Obviously 30%, let alone 60%, of the population cannot be considered 'upper class', and 'middle class' is probably even a stretch.
The home ownership rate seems broadly stable since the 60s to me, with gentle ups and downs with the economy, so as well as saying home ownership is an upper-class or middle-class thing not being true it's also not the case that 'it wasn't always like this'.
4th paragraph of that Wikipedia article:
"The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate because many households that are owner-occupied contain adult relatives (often young adults, descendants of the owner) who do not own their own home, and because single building multi-bedroom rental units can contain more than one adult, all of whom do not own a home."
Which tells me that they likely bought their house over 30 years ago. Which tells me that they have been largely unaffected by the complaint you are responding to.
As someone in their mid 20’s with a tech job, it blows my mind that 60% of people own a home. I can’t imagine having enough money to own a home in a major city.
> I can’t imagine having enough money to own a home in a major city.
Who do you think owns the homes all around you, and in all the suburban streets around the city? Normal people like you. There aren't hundreds of elites living on every US street, clearly. They're just normal people who saved up over a few years or got a little helper money from their parents.
Sure, maybe right now when the real estate market is really hot, but imagine people in the market around 2009-2012 getting a really good deal on real estate.
Once you're in the market, it's easier to STAY in the market. If house prices go up, you'll have to pay more to move to a new house but this is an easier pill to swallow because your current house has increased in value.
Yes, sorry, I was referring to the USA specifically. The real estate speculation problem is a lot worse in other Anglosphere countries (UK, Canada, Australia). Outside California, US prices are still somewhat reasonable compared to incomes.
> Obviously 30%, let alone 60%, of the population cannot be considered 'upper class', or even 'middle class'.
Huh? Why can't 30% (or 60%, for that matter) of the population be middle class?
Wikipedia [1]:
> The American middle class is a social class in the United States.[1][2] While the concept is typically ambiguous in popular opinion and common language use,[3] contemporary social scientists have put forward several ostensibly congruent theories on the American middle class. Depending on the class model used, the middle class constitutes anywhere from 25% to 66% of households.
One in three of people do not have middle class professions. Only about 35% of people go to college at all!
But anyway even if you don't agree with that, the original claim was that they were 'upper class'! Which is obviously ludicrous. You do not need to be an elite to own a house - drive down almost any suburban street in American you'll see people who own houses.
>the original claim was that they were 'upper class'! Which is obviously ludicrous
This goes back to the above post regarding the ambiguity around defining class. The traditional definition that I’m aware of uses quintiles, so “upper middle class” is defined as being within the top 20% (minus the top 1%-5% reserved for upper class). With this definition, the upper middle class will always be 15-19% of the population, on a sliding scale of income. This threshold comes out to about $87k/yr. at the individual level currently, I think.
But then people redefine that meaning. There was an article recently on HN saying the middle class is shrinking because more people are moving into upper middle class. They defined it based on absolute (as opposed to relative) income. But if you dig deeper into the research methodologies they normalized income so that a person making $58k/yr is equivalent to $100k if they are single. Magically, the threshold for upper middle class on an individual basis is reduced by 33%. (To be fair, they had reasons for this like the way poverty is defined by the government to factor in the number of people in a household).
I have a couple problems with this. 1) research indicates people are single, longer without kids because they feel less financially secure. It’s hard to square being single as a reason to be vaulted into upper middle class in that context 2) out of curiosity I took the average expenses for a mortgage, utilities, taxes etc. and tried to balance that against the $58k definition of upper middle class. In that case, if you have the average student loan debt you can’t afford the “average” American lifestyle even on an upper middle class income.
The point of all this being, we need to be careful about how we define economic class.
“If you torture numbers enough, they’ll confess to anything. “
My parents own a home. They bought it in the 70's for a fraction of what the land is worth now (inflation adjusted). My dad was a blue collar worker for Ma Bell, my mom a part time teacher.
The basic need for a house is something different than owning a house, though.
If owning a place to live is too expensive, it follows by logic that renting is cheaper than buying. Otherwise for the price of the rent, people could get a loan to buy.
So it really doesn't seem obvious that this is an issue of rich vs poor.
In the UK there was a trend for Baby Boomers to buy up one or two (or more) properties and rent them out as a "nice little side income" etc in addition to their pensions at a time when savings interest rates were low, so there was no point saving (since returns were awful) and property loans were cheap. You even got a tax break on the loan interest!
These people are not mega-rich - just middle-class anybodies. I don't blame them - why leave large sums of money from your pension in the bank where you'll earn 0.05-0.5% interest a year, when you can spend it to buy a property that you can rent out for 5% yeild and benefit from property value increases if/when you need to sell.
The laws have changed a bit now to make it less attractive (no more tax breaks on loan interest, and more tax on "additional" properties you buy beyond your own personal home), and there is anecdotal evidence that "amateur" landlords are exiting the market in droves. Even so it has stoked the market considerably over a good decade or more, and so prices for even very modest "starter" properties (think 1 bed flats, small houses etc) are relatively unobtainable for the average person on the street or first-time buyer.
While this is fair, you forget that real-estate is an investment opportunity. Between flipping houses becoming cool and rental properties being a good investment, if you have an extra couple hundred thousand you can make a strong investment right now. So yes, if this is an investment strategy and you have enough capital, they can just buy up all the houses.
Established wealth leverages their outsize influence and power to ensure that new housing for the poors isn't built, so that they can maintain their lush and leafy, exclusive rich person neighbourhoods.
There's literal mansion districts in my major city, where not only is building an apartment illegal, but even building a small detached house is illegal. How on earth did that happen??
Huh, how do you know what the rich people of old were thinking? Your argument seems to be based on complete fantasy - both your assumptions about the mindset of rich people of the past and of people who got rich in SV are completely fabricated.
But never mind, it is hating on rich people, so it is always OK, right?
Why exactly is the wealth gap a problem? Shouldn't it be more relevant how well of people are in general?
There are so many nice number games to play, like the stagnant wages. Those usually fail to mention that the workforce has increased significantly, so the sum of wages paid has risen significantly. Buying power also tends to be not factored in. People couldn't buy iPhones 50 years ago.
Also if anybody is unhappy about some tech company, they are free to not do business with them.
I think you are confusing different types of banks. As for loans, think about your housing example: say it takes 30 years to earn enough money to buy a house. So without banks, people could only move into their own house after 30 years of work. Thanks to loans, they can move in now and pay it off within 30 years.
An even more extreme example, if you want to start a business. If you have to save for 30 years to get your starting capital, you might already be too old to start.
This is incorrect because in the 1950s, the average price of a house was much cheaper relative to average salaries. This information can be found all over the net.
> the average teacher’s salary in 1959 in the Pacific region was more than $5,200 annually (just shy of the national average of $5,306). At that time, the average home in California cost $12,788
A house back then only cost 2.5x a teacher's salary.
According to Google, the average teacher's salary in California today is $83K (and this seems extremely optimistic, some other sources claim it's $65K max), the average cost of a house in California is $440K.
That is 5.3x in the best possible case. Meaning that people today have to work more than twice as long to be able to earn the amount of money it takes to pay for a home... And that's not even counting the interest they need to pay on top which roughly doubles that amount yet again!
This asset inflation was caused by banks. By allowing people who could otherwise not afford to buy a house to buy one (thanks to loans), they artificially increased the demand for housing (which is somewhat limited in supply in urban centers where work is available); and in accordance with the law of supply and demand, this drove up the price of properties.
Loans allowed reckless people to participate as buyers in the marketplace and this punished savers and cautious individuals. Many of these reckless people, eyeballs-deep in debt which they couldn't afford, then turned to criminal or unethical activity to make money. Studies have shown that financial stress leads to increased levels of criminal activity. Debt causes financial stress.
Banks harm not only the people who are taking loans but also the people who are not taking loans because it turns assets which savers could have easily have been able to afford within a few years into assets which they can never afford by saving their salaries.
Banks don't fabricate a need for houses. You really have a much too simplistic view of things. Banks also can not create arbitrary amounts of money, it is regulated (and somebody has to trust their loans, too). Housing costs in California went up because it become a more attractive place to live (nice weather, good job opportunities, network effects of more people creating more culture). (Edit: in 1950, the population of California was 10 Million People, Now it is 40 Million people https://www.macrotrends.net/states/california/population )
Even without money, a house would cost something - you would have to get the building materials, the ground to build on, and the time and work to build it. This has nothing to do with banks. The banks just help you to pay the cost upfront.
There are other ways to do it, like the Amish coming together and building a house in a day. They still use a lot of work hours, distributed over many people. And it only works out if you are also Amish and "pay it forward": for now, you give other Amish "credit" by helping build their houses. When your turn comes to move into a house, you'll get that credit back because they help you build your house. That sounds great, but it doesn't provide the freedom banks do. If for some reason you don't want a house in an Amish community, you won't get your credit back. Islamic solutions have similar issues (credit is illegal, so they either borrow from non-muslims, or they also have a "pay it forward system" where every member of the community chips in when somebody wants to marry and build a home).
In many developed countries like Australia, there are many people who own 10+ houses which they bought using debt and rent out. These people are monopolizing ownership of real estate and forcing people who don't have preferential access to credit to rent from them instead of buying.
The injustice of the scheme comes from the fact that not everyone has equal access to credit from banks. It's an unjust qualitative social process which some people are locked out of.
