on the left posted:

ZIRP is not supply side economics by any stretch of the word. And yes, the challenges faced by countries in a zero interest rate scenario are new territory, which is why we have stuff like quantitative easing.

cheese posted:

Can you explain to me why? My understanding of ZIRP is that in theory it makes it easier to acquire capital to invest and expand businesses.

shrike82 posted:

It's one thing to forecast zero interest rates for the short/mid-term.
It's another thing to assume that for the time horizon of a mortgage. I certainly wouldn't bet on it.

on the left posted:

The problem is that it does not do this in actuality, which is why in 2008 in the GFC we had both implied negative interest rates AND deflation. Hence all the special programs trying to spur inflation and modify the bond yield curve.

quote:

Design is the key element to all of this, Van Meter says. A new generation of urban residents doesn’t want clutter, and they crave innovative surroundings. They’re looking for a clean, cool space where they can sleep, cook, bathe and entertain, but they’re not looking to hoard stuff. When you have a 285-square-foot apartment, owning things can’t be a priority.

Blindeye posted:

I read this and honestly, I bristle at it. When they suggest it isn't a solution for many or most people, they're right, yet they still push this as if it were. It's an engineering and design solution to a political/economic problem. In effect it says the future is that you forego privacy and live with a bunch of people, or you live in a minimalist box where everything is designed to fit in said box. You can't cook like you can with a proper stove and oven, so you eat out more or have a more limited diet, you can't have much of any of your own belongings because it would make living there nightmarish. Even a desktop computer seems impractically large when you think a typical desktop setup would take up a fair amount of room.

I like to work with my hands, and I like my books. They're relatively cheap hobbies, cheaper than e-books. I cook a lot because it's healthy for me and it's cheaper and it's also a hobby, a pleasure. I have gear for my bicycle, pictures from places I've gone. A queen bed so I can actually fit in a bed with my height. I've seen these things developed, how they end up being fleshed out, and while I can see a niche for them, they're always more expensive per square foot than many other places nearby. It's a style of living, and a good one, but it feels like a compromise, an idea that in fact the generation that didn't have the opportunity to buy property cheaply or pay rent cheaply must sacrifice to live in the areas their careers take them to. A lot of the things these apartments create disincentives on (cooking, being able to keep things) makes people more reliant on renting items, buying takeout, etc that cost people more. The biggest cost-savers for me in a month, and help my health, are the fact that I can buy food in bulk at Costco and store it in a big refrigerator, and then cook large amounts of food that last several days and also can be stored.

Anyway, that's enough of me ranting over microapartments, what do you all think of them and how they fit into the housing question?

Blindeye posted:

Anyway, that's enough of me ranting over microapartments, what do you all think of them and how they fit into the housing question?

Popular Thug Drink posted:

So do you get personally offended at every bit of PR fluff that comes from the notoriously overhyped architecture/design world or was it just this specific case where you felt your lifestyle was insulted? Different people like different things. It's not a mandate, it's a suggestion.

e: Wait, this is a lifestyle magazine published by Whole Foods? Jesus Christ.

Blindeye posted:

It isn't that. SF and NYC have been subsidizing/touting this kind of living situation to save their housing markets and several are in the construction phase. Some cities are even subsidizing them or bending over backwards changing building codes (not rezoning but codes themselves) to make these layouts legal.

I work with architects, I know the PR fluff for poo poo that will never catch on. Rather, I am upset that governments and industries are throwing money at this when the units end up not costing less and assume the future is everyone living like a dorm.

Popular Thug Drink posted:

Just like Israelchat and Gunchat, every thread about cities eventually devolves into goons asserting their way of living is the best and that only degenerates would live any other way. It's not productive to air out your opinions without any deeper analysis. NYC doesn't really have a lot of options for dealing with affordability, so why not fund a tower of tiny shoebox apartments for people who would willingly move into similar spaces anyway? Instead you're saying "I would never live in such a space, it's not big enough, why is the government wasting money on thing I dont like"

e: Of course I'm not even touching your assertions that the units don't cost less or that many cities are doing this.

Blindeye posted:

I should couch what I was saying. I'm not contending that one way of life is going to trump another, mixes of housing types is essential, and there is a niche for these. But there are some downsides. It's working in some places, but in others it actually ends up having higher rents than larger places because of amenities and newness, and the customized layout means people can't customize their living space.

Blindeye posted:

They're targeting millenials, not the urban poor. Not the people hurting the most. There is so much lovely housing in this world that needs to get fixed, so many different things that should be done. I am just a bit wary of futurists convincing politicians that the market will correct housing through things like this.

Blindeye posted:

This is the kind of thing creating bubble markets in tight housing markets, along with hedge funds. It's insanity.

Blindeye posted:

I wanted to share this with you guys since we often start talking about the dense urban vs suburban lifestyle (which I suppose are extremes of urban populations).

http://www.darkrye.com/content/room-change-re-imagining-homes-future

Little things come out to me from this, like the following:

quote:

“There’s a whole generation in America whose training ground in urban life has been going to a college campus or working at tech companies,” he says.

cheese posted:

"Small" living is an idea that only makes sense to you if you have lived a life of such privilege and excess that you get to idly fantasize about giving away a bunch of your easily replaced possessions so you can embrace the "simple" life. I guess the worst case is you grow weary of it, sell your 75k dollar small home and move back into that 2 bedroom 2 bath luxury apartment that you were renting for 3500 a month in Mountain View?

cheese posted:

No no, I understand that ZIRP does not do those things. We have a shortage of demand and it does nothing to address that. I'm talking about why ZIRP would not fit in the world view of someone who advocated for supply side economics, assuming you thought both of those things worked (which they don't).

Popular Thug Drink posted:

So? They don't have fireplaces either. So what? Everything has downsides. Congrats for being able to identify them according to your preferences.

Popular Thug Drink posted:

Millenials can't be urban poor? Are you saying that white hipsters aren't worthy minorities?

Popular Thug Drink posted:

I wouldn't worry about futurists, they tend to drive urban planning/architecture and they tend to fizzle. Collective living in small rooms is a century old idea in the modern context, and is the way many cities operated for hundreds of years. So what?

Popular Thug Drink posted:

I think your problem is that you take seriously everything you read. You're really focused on this as if it's an Actual Thing instead of some goofy trend that really excites some people. I mean a whole 400 units in NYC, oh my god it's the new paradigm of futurist boondoggles!

Popular Thug Drink posted:

Wait, that article - are you angry about the city subsidizing tiny apartments or are you angry about foreign billionaires investing in NYC real estate? Please pick one or at least cop to the idea that you're mad about rents in general.

Blindeye posted:

You mentioned NYC, where I grew up and spent 18 years of my life, having few options. It's not so much that there aren't. Much of Queens, where I grew up, much of Staten Island, good portions of the Bronx, etc have massive amounts of single-family homes, open spaces, even undeveloped spaces. The trouble is they're not integrated with the business centers of the city very well by mass transit. A lot of old buildings are being run by slumlords, and the housing department or building authority hasn't had balls in decades. They look for easy fines rather than fairness. A lot of places should be condemned and replaced with taller, better multi-family options. You should be able to take a loving train from Queens to the Bronx without going through Manhattan. You shouldn't have commute times by metro systems taking 2+ hours within city limits depending on where you live. You shouldn't have apartments in buildings where mice and rats run wild, or allow landlords to let their buildings decay to almost decrepit conditions.

On the other hand, you have to cut down on the speculation, the outside interests, empty corporate or oligarch-owned apartments. There's tons to do in NYC, the microapartments are a blip, a red-herring solution. That's why it irks me a bit.

quote:

Ending a long string of increases, the number of cost-burdened households (paying more than 30 percent of income for housing) receded slightly in 2012, falling by 1.7 million from the preceding year. But the improvement rolled back only a fraction of the growth over the previous decade. In all, 40.9 million households—or more than a third of US families and individuals—paid excessive shares of income for housing in 2012, an increase of more than 9 million from 2002

What is particularly alarming is that 5.8 million of this gain was among severely burdened households (paying more than 50 percent of income for housing). Virtually all of the improvement in conditions came on the homeowner side, with their cost-burdened numbers falling from 22.0 million in 2011 to 20.3 million in 2012. But even with this decline, more than a quarter of homeowners (27 percent) still had cost burdens, including more than one in ten with severe burdens.

The picture for renters is even less encouraging. In fact, the number of cost-burdened renters rose slightly to 20.6 million in 2012, marking the sixth straight year of increases. And although the cost-burdened share edged down, it still remained close to 50 percent. Moreover, more than one in four renters (27 percent) were severely housing cost burdened

quote:

The composition of home sales does, however, point to improving conditions. Traditionally financed sales increased 15 percent in 2013, while REO sales of foreclosed properties fell 17 percent and short sales were down 13 percent Moreover, distressed sales numbered less than 1.0 million, reducing their share of all existing home sales from 22 per cent to 18 percent.

Still, cash sales were unusually high for the fifth consecutive year. Metrostudy data indicate that cash sales accounted for 37 percent of home sales last year, nearly matching the 39 percent peak in 2011. By comparison, the all-cash share was just over one in five before the housing market downturn.

quote:

Incomes Fail to Keep Pace with the Rising Cost of Housing
• At last measure, real median household income fell another 1.4 percent in 2011-12, hitting its lowest level in nearly two decades.

• From 2002 to 2012, the real median income for households aged 25–34 fell 11 percent, leaving their real incomes below those of same-aged households in 1972.

• Since 2002, the real median annual incomes among households in their 50s—the peak earning years for this group as they look to retire over the coming decade—have fallen by $9,100 among 50–54 year olds and by $5,700 among 55–59 year olds.

Mounting Student Loan Debt Will Likely Delay Homeownership for Young Americans
• Consumer debt rose 14 percent from the end of 2010 to the end of 2013, accounting for more than a quarter (26 percent) of aggregate household debt, the highest share since early 2004.

• Student loan debt has accounted for 63 percent of the growth in total debt over the past year and for nearly the entire increase in non-housing consumer debt since 2003. Student loan balances reported on credit reports increased by $114 billion in 2013 alone.

• Between 2001 and 2010, the share of households aged 25–34 with student loan debt soared from 26 percent to 39 percent, with the median amount rising from $10,000 to $15,000. Within this group, the share with at least $50,000 in student debt more than tripled from 5 percent to 16 percent.

Homeownership Rate Still Falling, Affecting Some Groups More than Others

•The US homeownership rate fell for the ninth straight year in 2012-13.

• From 2004 to 2013, the slide in homeownership rates has been most dramatic among younger adults compared to other age groups: rates for 25–34 year olds were down nearly 8 percentage points and for 35–44 year olds some 9 percentage points.

• Measured from previous peaks, homeownership rates have fallen 6 percentage points among black households and 4 percentage points among both Hispanic and asian/other households, compared to just 3 percentage points among white households.

• The white-minority homeownership gaps continue to expand (up 3.6 percentage points between whites and blacks since 2001, and 1.3 percentage points between whites and Hispanics since 2007).

Cheesemaster200 posted:

I would argue we do not have a shortage of demand, but rather a shortage of incentive to lend. Cheap capital is abound, but investors, and more importantly banks, do not want to take risks to lend it out to those with less than perfect credit ratings. For the last 5-6 years there has been a very low tolerance for risk.

Would you want to lend out a 30-year fixed rate loan to someone with lovely credit at current interest rates? I don't even want to invest in an intermediate duration bond fund in my IRA. Add in a lingering unease about the 2008-9 crisis and the fact that the Justice Department is suing just about every major bank for "taking too much risk", and we have the current situation.

The problem with both supply side and zero interest rate policy is that they assume banks will always want to lend if cheap capital is made available to them. This isn't always the case, as we are now finding out.

ShadowHawk posted:

Maybe we shouldn't be focusing on personal debt as a means to economic growth so much as the price of housing.

Letting housing costs fall would make them more accessible to everyone, relatively poor included, whether or not they borrowed money to buy or rent one.

ShadowHawk posted:

Letting housing costs fall would make them more accessible to everyone, relatively poor included, whether or not they borrowed money to buy or rent one.

Modus Operandi posted:

How would something like this be theoretically achieved? Isn't most of it just supply and demand. People want to live where the jobs and culture is so it eventually drives up costs. Also, even if it could be achieved people who already paid into the system will be getting tremendously screwed by new home prices 2.0

on the left posted:

One big problem is that you kind of have to trample all over the local culture of an area to make it affordable to live in. We could probably make San Francisco way more affordable if the government went in and subsidized a bunch of high density housing. The problem and greatest fears of residents is that it will end up looking like this though:

Hedera Helix posted:

It would be preferable to not being able to afford to live in the city, period, and having a commute ranging from one to three hours a day from god only knows where.

on the left posted:

One big problem is that you kind of have to trample all over the local culture of an area to make it affordable to live in. We could probably make San Francisco way more affordable if the government went in and subsidized a bunch of high density housing. The problem and greatest fears of residents is that it will end up looking like this though:

shrike82 posted:

There's a continuum between a burb sprawl and kowloon walled city.
Making living in SF affordable doesn't require the latter.

on the left posted:

You can have extremely dense housing situations AND extremely high prices though. In fact it's very common when talking about cities with high rises (building/square footage costs rise exponentially with height).

At some point, you do have to say no more people can live here.

cheese posted:

A huge percentage of SF is covered in a sea of 2 and 3 story single family homes and 2-4 unit apartment buildings, and even then SF has a TON of room to build on that wont destroy the Full House painted ladies. Not to mention that despite its URBAN street cred, SF is surprisingly less dense than other big cities. I'm not sure we have reached "sorry we are out of room" yet.

Rah! posted:

Yeah. SF is really dense by North American standards...but that's about it.

Rah! posted:

Exactly, and this is something many people fail to realize. A lot of NIMBYs just hear the word "development" and then go "they want to tear down all our Victorian houses and turn us into Manhattan/Hong Kong/LA in Blade Runner!!!"

Berke Negri posted:

Yeah, San Francisco is about one lifting of height restrictions bill getting passed from the whole area turning into They Live and office workers forming street gangs in favela Population Zone #5637 formerly known as Richmond.

cheese posted:

It's a bit over half of NY's density, and its density is comparable to some of the neighborhoods in Boston/Chicago/LA and huge areas of New Jersey. And other than Daly City, none of the areas in the greater Bay Area are anywhere near the density of those other major cities. SF is an unusual city in that its surrounded on 3 sides by water, but we are not exactly working hard to make the Peninsula as a whole any denser either.

Talmonis posted:

It's not just the NIMBY's though. That style of living is a nightmare to a lot of people

ShadowHawk posted:

Maybe we shouldn't be focusing on personal debt as a means to economic growth so much as the price of housing.

Letting housing costs fall would make them more accessible to everyone, relatively poor included, whether or not they borrowed money to buy or rent one.

quote: