> Put a huge tax on vacancies and cap the number of residential properties a business is allowed to purchase in a year.

While I'm not opposed at all to these policies, they won't do anything to help you. Vacant homes are less than 10% of existing homes, we need far more than that to solve the problem.

The only thing, literally the only thing that will help you, is more homes.

I'm not sure why people are so resistant to this idea. We have been under building for decades in the places where people want to live, the places that are economically productive.

There's a lot of ways to get there, and though changing zoning to allow density and ban sprawl is necessary, it won't solve the problem alone.

We should also do things like slap a huge tax on the value of land to force people to stop hoarding their land, and use that tax money to fund a government builder that will act counter cyclically to current market cycles. The huge business cycle for the building trades means that it's an unstable job and it makes it hard to have a solid workforce. Having more steady building will allow for lifetime careers, for more experience to be gained, and hopefully for productivity increases.

As it is now, there's not even enough productive capacity in places like California to build the amount of housing that's needed. We need to attack the problem from many angles simultaneously.

> Vacant homes are less than 10% of existing homes

To be clear, that number of vacant homes isn't even a problem. You need a certain number of vacant homes for liquidity.

> I'm not sure why people are so resistant to this idea. We have been under building for decades in the places where people want to live, the places that are economically productive.

There is a lot of marketing that was driven at Americans to think that a detached single family home is the only way to live, and it's going to be hard to undo.

The sprawling 20 and 30 story apartment complexes that are all around Taipei really expanded my view of how other countries do it. “Fields and fields” of these massive structures. Someplace tourists never go I’m certain.

Hadn’t seen anything like in NY or LA, etc.

I agree there are other ways to do it, I double agree it’s going to be hard if not impossible.

Look at how strong NIMBY is in SF with people who consider themselves to be bleeding heart ultra progressives. Everyone clams up when it effects them, but, build somewhere else? “Oh we definitely need to do that!”.

>>The sprawling 20 and 30 story apartment complexes that are all around Taipei really expanded my view of how other countries do it. “Fields and fields” of these massive structures.

As an Indian. This culture caught on some time here in Bangalore early 2000s. But most people, even those living in large apartments, eventually prefer living in individual detached homes over time. Simple reason: Privacy. There are also a whole lot of other things. Space to dry clothes, walking space. Disturbance from from people staying the floor above. Unhygienic neighbours. etc etc.

The plus point is it comes inside a gated community. It's Brazil like inequality contrast here in Bangalore these days. Rich IT/software MNC working families live behind these bespoke apartment gated communities. Which is often contained within a larger slum.

The detached home/row houses gated communities are fairly expensive and in terms of US dollars are anywhere between $500K to $1 million. Most people buying these are people who won the higher salary software job lottery.

People like me who have always been there in Bangalore stay in the inner parts of the city which are not this cool and jazzy. Most homes are old, crumbling and roads are full of potholes. It's mixed population and the areas aren't all that much gentrified. So not many posh software people like to stay here.

Eventually you just pay extra for living among people of your income class.

My nephew and his wife had a house, sold it, and moved to a brand new apartment building in our downtown area. This is supposedly an upscale development, with 2BR renting for $1900/mo in a city of 40K where most apartments rent for $800-1200.

I say supposedly, because instead of an upscale living experience, here's what they got:

1. the door to the parking garage is some fancy automated thing with sensors on the headlights. It doesn't work, so they have to keep backing up and re-approaching the door several times before it opens. Other residents have had the same problem.

2. Pets are allowed but are supposed to be leashed. People let their pets run around all the time not on a leash

3. There is a park across the street for people and dogs. People don't pick up their dogs' poop like they're supposed to.

4. People have dogs that bark in the apartment for hours on end. They've left notes on the door (ignored), called management ("We'll take care of it" but they don't), and ended up confronting the person directly. The dog owner acted like she didn't know anything about it.

5. Yesterday my nephew said they arrested a guy who was harassing people at the pool and people sitting on their balconies. He was also threatening the apt staff, so police arrested him.

This apt complex (according to my nephew) has a goal of filling up the building and then selling it, so they have all kinds of rent incentives and allow guarantors for people who don't really have $1900/mo for rent.

Who wants to put up with this kind of shit? This is only a 3-story apt building. I can't even imagine the kinds of problems in a 30-story apt building.

They're moving into a detached single-family house after their first-year lease is up.

> to think that a detached single family home is the only way to live

This isn't purely marketing. A lot of it is lived experience. Americans are generally just straight up terrible neighbors, and neither building owners nor police care. Many of us have learned that a 40 foot setback works way better than a poorly-sound-insulated 2x4 wall.

> I'm not sure why people are so resistant to this idea.

Because homeowners want the value of their homes to appreciate.

Actually basic economics says, all economic transactions in an economy are designed to benefit a private property owner. *All*.

The end beneficiary in an economy, the place where money stops is a private property owner. Every economic activity no matter what that is, just acts a long chain in which the eventual beneficiary is a property owner.

That's just how it is, there's really nothing that can be done about this.

If you live next to an empty lot, and the local government allows an apartment complex to be built on it, your house just dropped tremendously in value, both due to loss of privacy and the large boost in supply of housing, which was previously lower and inflating the price of your home.

How does that benefit you?

I don't think they were saying it benefits every private property owner. It's clear that there is at least one private party that benefits from the ownership of that apartment building.

If it's not benefiting the pre-existing home owners then it's not much of a rebuttal to the original point

> The only thing, literally the only thing that will help you, is more homes.

We are constantly told that we should become as dense Manhattan so we…can become as affordable as Manhattan?

The big cities where people want to live are already dense, they could be denser but the limitations are infrastructure related (transit, road capacity, schools, water, etc…). It might make more sense to expand where people find desirable to live rather than focus how to cram more people into the Bay Area and LA area.

But...land is where food comes from, and the people that work it are already poor. Maybe you mean suburban and non-rural communities?

No, I definitely mean tax the land, not at a constant rate, but based on its value.

This was originally a solution to help deal with rent-seeking on privatized agricultural land, when some land was more productive than others. The more productive land results in excess, unearned profit for landowners (not the workers). Farmers are very different from farm workers. Farmers have millions in assets, and though they talk big game about being poor, they have immense wealth. They extract it from the farm workers' labor on their land.

This effect is even larger in cities, where access to the city is required for access to those wages. The landowners who hoard land most effectively take most of profits, and analyses of our growing inequality (Piketty and Ronglie) show that the source of our growing inequality is a larger and larger share of wealth getting transferred to housing and land.

If we have high taxation on land value, the most expensive land in cities will be used more effectively, no longer can landlords take more than their fair share of our labor, because all that land will be used more effectively. Which also means more land is available for farming.

In short, most of our problems are caused by allowing people to rent-seek on the one thing that we can never really expand significantly: land

> I'm not sure why people are so resistant to this idea.

At some point we'll run out of land to concrete over.

And before that point we'll experience more problems due to water runoff from the land we are concreting over.

The way to avoid that is to stop building sprawl, and stack homes on top of each other.

Which, is the only way to add homes in the economically productive centers where housing prices are going through the roof.

I mentioned in my comment that we should ban sprawl, and I mean it. We instead ban multifamily buildings nearly everywhere, or use code to legislate them out of being feasible. This is what must change.

Instead, it's really easy to pave over farmland in the middle of nowhere, forcing people to hop on to freeway and drive for hours to get to jobs, because it's the only thing that's legal to build. Which is happening just outside the Bay Area, for Bat Area workers: large single family development far away from where the purchasers will work.

Oh, but then you change the character of my neighborhood and I can’t stand that (even though my house was built on an earlier open space, messing up someone else’s bucolic preserve, and I conveniently forget that fact).

You can keep building up or building out, adding more and more concrete... either way at some point you're going to run out of land, or water, or power, or food, or something else.

What is your alternative to house the population? Tent encampments? More wars/disease? Death squads?

Humans have a right to housing. Saying "no more housing" but not thinking through the rest of the consequences, because you are personally reliably housed, is not a solution that a society should consider even momentarily.

Refusing to house people today because at some unspecified point after we have many many more people, is not even remotely logical, ethical, or a solution to any problem.

Where do you think this ends?

At some point we'll destroy the planet and then nobody will be housed.

Crucial factor: building housing does not change the population. Population growth comes from people having children, not from physical structures.

If your "solution" is to stop building housing, you have absolutely no solution, you just want to make people suffer.

The real solution is already happening: give women control over their bodies, economic control over their own futures, give women education and ensure that women have political power in society. That along with industrialization is how to stop population growth in its tracks.

Additionally, different types of housing have vastly different environmental impacts. Detached housing with yards is environmentally disastrous, particularly when in the woods, for people that take part in normal society. Multiunit housing takes far less materials, water, heating/cooling, and as importantly it allows loving with less transportation requirements, greatly enhancing quality of life while using less energy.

I think I've spelled out my solution to this fairy well. If yours is anything other than "make people homeless" i would love to hear it, or if you have any defense of your non-solution to ever increasing population, I'd love to hear it.

> Crucial factor: building housing does not change the population. Population growth comes from people having children, not from physical structures.

Look up induced demand.

People think our roads are too crowded, so they build even more roads. Then the roads are more clear, so people drive more. So the roads get more crowded and we build more roads...

I'm only having one child, partly because of the cost. If we burn down more of the planet to make it cheaper to have a second child, people will do that. Then people will complain it's too expensive so we need to burn down more of the planet to make it cheaper again. Then people will have three children because it's cheap...

Burn, burn, burn.

I believe we're soon reaching the point where the world population will actually start to shrink - I'm not sure that running out of land would be a problem (at least not in the US)

We don't run out of land anytime soon. Currently there is 19310 m^2 for each person. 10x global population and we still could have 1930 m^2 for each person. That is quite big area.

Hmmm. The top 1% nationally is somewhere between $500k and $700k annually. Even here in SF, you can live in a nice house for that kind of dough.

Did you mean top 10%? Now you're down to about $150k. I do think a two income household at that level can manage it, but it's surprisingly difficult and maybe not worth it when you have kids and both parents have demanding jobs.

I hope that's not a nitpick. I agree with your list and what you've said, I just think that the top 1% isn't the threshold.

I think folks often confuse "I can't afford a home" with "I can't afford the house I want".

>"I can't afford the house I want

Americans especially have a very skewed expectation when it comes to housing. Many people here are like "I have an upper middle class professional income, my family should have no problem affording a 3-4 bedroom single family house on a quarter acre lot with a big backyard for our dogs to run around in right in the middle of one of the most desirable metropolitan areas on the planet! Oh btw the free public schools should be excellent too!".

Saying something like that would make you sound insane in pretty much all developed countries. U.S. is a big exception due to historical reasons, but people really need to adjust their expectations going forward.

Thing is: It was doable 10-30 years ago (depending on region).

I have neighbors who bought their $3m homes when they weren't even $800k (adjusted for inflation). And since salaries + stocks have grown much faster than their property tax burden (basically frozen) - they're all retiring early.

People have expectations based on what they grew up with or what their parents grew up with or what they saw people achieving as they grew up. Can't blame them when they get out into the market and finally start saving that they're gonna be 10 years behind for the rest of their life...

>It was doable 10-30 years ago

And 150 years ago you can probably buy a few acres of land in SF Bay Area for less than the inflation-adjusted price of a townhouse in Mountain View these days.

Real estate is one thing that does not scale infinitely. Population grow, things change.

>can't blame them when they get out into the market and finally start saving that they're 10 gonna be 10 years behind for the rest of their life...

That's the thing about Americans. The speed of change in this country has finally increased after decades, especially when comparing to many fast developing countries. A lot of people just don't know how to adjust for that.

Wouldn't be such a big issue if housing policy kept up with the change. That's the biggest issue for young people. They want the change but young people aren't in control. (And for whatever historical reasons - young people still don't vote enough to enact the change they wish to see)

I'm not sure if there is any policy that would lead to everyone being able to afford the same amount of real estate as if it were 30 years ago. That's just impossible given the context and population growth.

We could easily build more high density. There are a lot of young people who are interested in high quality high density housing - but it's just not available. Not everyone wants or needs a SFH. We don't build up in this country almost at all and that would solve a lot of the pressure. (It would also allow for people to use other means of transport that they actually prefer - many young people don't want to drive!)

There are a ton of people who are interested in living in densely populated big cities but the issue is that there isn't enough high rises or tall residential buildings to offset the demand.

There's definitely policy that could be done but it'd destroy the existing value for homeowners and landlords. That's why it doesn't get passed - obviously.

Also what the SF Bay Area lacks is family oriented high density housing. High density housing is built for the young and single. Family oriented means easy access to fenced in playgrounds and parks, small but numerous bedrooms with large living rooms, etc.

You've gotta admit, it's pretty messed up if you're making 3x the national median household income and your only options are run-down dumps on the wrong side of a 45+ minute commute

>it's pretty messed up if you're making 3x the national median household income

3x national median income would actually mean something if real estate costs the same nationally, but obviously it doesn't. Many areas in the country costs far more than 3x in terms of real estate prices.

If you make the 3x the median income of the area you live in, then it would be a stronger argument.

Maybe Americans should consider an apartment. I make only a small amount over the average and with my bf we can easily afford a nice 2 bedroom apt anywhere.

Every time I propose this people think I’m on another planet but the lifestyle is really great tbh.

Considering how poor soundproofing standards in America are, and how inconsiderate the average American is, apartments are not a consideration for anyone who can half afford a SFH.

This is not inherent to apartment buildings and is probably mostly an issue with the smaller wooden ones. I live in a 30 level building and haven’t heard a single sound from any neighbours. Turned my music up to what I used to in a house, went in to the hallway and could hardly hear a single thing from directly outside my door.

Probably the easiest way to find out before buying is to just stand in the lobby and ask the next person who walks past what they think.

Where do you find properly built apartment buildings with a soundproofing barrier in the underfloor and brick party walls?

My in-laws lived in a mid-height (4 floors) concrete-and-brick building that went up under Salazar. An equivalent building in the US would be built in wood and sheetrock pretty much everywhere. Even 5000 square foot doctors' palaces that go for half a million dollars are stick-and-cardboard. Solid construction you'd only find in highrises in urban centers, and even then it's not guaranteed that the walls aren't made out of cardboard.

You see these sprawling neighbourhoods of SFH's with 1.50 m separation between buildings and very much the whole lot paved over. Everywhere else there would be mid-rise multifamily buildings, but the American insists on an SFH, because soundproofing.

To be honest, I'm not sure what the appeal of mid height buildings are. They have all of the downsides of an apartment with none of the upsides of a high rise like better quality construction and better location.

To find out what the quality of a building is you are best off just asking people who live there what they think. Apparently you can also request that strata give you information like owner complaints which may bring up noise disputes.

The point of mid-height buildings is that you can line a road with it and get sufficient density so that all the urban amenities (parks, playgrounds &c) are within 15 minutes of walking. That was Salazar's explicit goal when he built the post-war Lisbon neighbourhoods - church and primary school were the focal points and had to be within walking distance. His architects did an admirable job.

But what's the appeal of a high-rise? It requires too much space around it, it's not made for the human scale.

Depends what the definition of high rise is I guess. I live in a 30 level building that I consider pretty high and it sits on the entire space of the block it is on with only walk ways between it and the next building. I'm more talking about these 4 level apartment buildings which seem pointless to me.

Pretty sure you can get a nice apartment - just not the US dream house.

Around Mountain View, 150k a year would let you buy a run-down dump of a condo 45 minutes away, or rent a crappy apartment and gradually become poorer every year as housing prices continue to inflate out of control

Ok, but then I think it’s just as many people think “I have enough money in my paycheck to cover that mortgage payment so that means I can afford this home”.

When they aren’t considering the rest of their finances or what they would do if our of a job for multiple months, etc. Not unrelated, the number of first time home buyers that buy a new car within 3 years is like 75%.

We do a really really bad job at teaching finance in schools.

Not in all schools, mind you. Americans are bred and battered to exist as consumers, to work to consume, to work more and more, to wade deeper and deeper into the sunk cost of lost opportunity and useless industrial waste made useful only by measuring its bulk in third party business income from storage units leased.

Since you're getting flak. I'll add on - I'm in the same boat. Just turned 31. Make about ~$400k/yr. I have about ~$1.5m in stock (will be sold in the next year - so - maybe $1m cash). I've sold my soul to FAANG and an ultra toxic startup to get here.

Can't or will not buy a home here in SF. If I wanted to stretch - I could afford a $1.6-2m home but it'd be unpleasant. Depending on the neighborhood - that's just a starter home. I'm not even talking like a nice starter home either. My neighbors just bought the house nextdoor for $2m and spent a year renovating/fixing. Would they have bought this place if they knew all the issues? Probably not but couldn't do anything about it since you have to buy without inspection. Even when you buy at these crazy prices: Usually still requires a few hundred K in cash to renovate to put up to modern standards. We're talking all the electrical, plumbing, insulation, roof, some structural issues that went unaddressed, kitchen and bath updates, etc. Add on that you can't even live in the damn thing while that's happening. People underestimate how much places here cost and how much work they take.

Only way you're getting a nice modern turnkey house in a decent neighborhood is if you go $3m+. And unfortunately that's still wildly out of reach for many of us at the threshold of 1% individual incomes. (~$350-450k - depending on the study)

If you are only 31, making $400k, and have 1.5m in liquid assets, the answer is that you can afford to spend a lot more than 1.6-2.0m on a home. Whether or not you’d want to is a different question.

I’m in my early 40s, and was in the same boat as you in my early thirties but in a different large American city.

First, you can absolutely afford a $2m home, let’s not pretend otherwise.

Second, I bought at 31, and 10 years later I pay far less for my mortgage than it would cost to rent a similar place AND my hone went up in value despite buying at the peak of the last bubble!

Here’s the advice I’d give, but if you want to live in your are for the next 15 years or more. If you don’t want to be there for the long run then it’s more complicated.

If I was married - it would be much simpler. Unfortunately - in all likelihood - I will either never marry or be married around 40. Buying a house to set down some roots when you're single, changing jobs every 1-2 years, and have friends spread apart in a sizable geographical area... well, not the best idea or easiest decision to make. Especially when none of the houses I can afford are the ones I want.

So you don't have a family and you want a house? Go find a sweet apartment or townhouse and let the equity build until you've got a family going. That may be a bit judge-y but come on, not everyone can/should live in a detached home.

EDIT: I'm assuming that's an option. Does the Bay Area have condos or is that one of the dumb zoning things y'all got going on?

Apartments and townhouses don’t take kindly to woodworking, music, working on sports cars and motorcycles, etc. At least not in the bay. Personally, I’m not ever going back to sharing walls or floors ever again.

And for the cost - you really don’t get much for your dollar.

So you’re very picky, but can totally afford a place where you live.

I don’t think having a bar where you’d like to not hear your neighbors at 3am anytime they open or close a door is a high bar.

But sure - keep moving the goal posts in your mind.

I’ve read all of your comments, you’re being very picky all while you can totally afford to buy a house where you live. You won’t consider a townhouse, want a woodworking shop, a music studio, and a motorcycle shop.

They have condos and townhouses.

Totally makes sense. I think people are reacting to the idea that someone making that much can’t afford a house.

It really only takes about 5 years of living in the same place to make buying worth it in the vast majority of cases, and 3 years is roughly the 50/50 point where it makes sense financially to rent because you haven't recouped the costs of buying.

SF housing prices are out of control, because faang can pay 400k per year (plus stock). If you are open to moving away from the bay that 1mil will buy an amazing property outright in most parts of the country, or a really nice home and a big amount towards retirement... Alternatively you can stick in the Bay Area and adjust to your high wage being in line with a high cost of living (and consider the million dollars as a sizable down payment).

Here's the getting started guide to buying a house and living like a commoner in someplace that isn't SF:

https://www.zillow.com/homedetails/1944-Kitty-Hawk-Dr-Waterl...

https://www.zillow.com/homedetails/41290-Rock-Creek-Dr-Mitch...

https://www.zillow.com/homedetails/745-Woodmont-Cir-Batesvil...

https://www.zillow.com/homedetails/E6516-867th-Ave-Colfax-WI...

https://www.zillow.com/homedetails/1521-White-Rd-Somerset-KY...

https://www.zillow.com/homedetails/928-County-Road-329-Doubl...

You cannot purchase a home in one of the most competitive areas in the entire country. To me, the solution is obvious.

Make more money? Yeah, I agree. That's what I always end up doing.

They say money can't buy happiness, but in your case it can't even buy you the material goods you want. Just move! Even with the current housing crisis you could afford a small mansion in the midwest with half your income. Your investments alone are enough to pay it in cash. And I'm not talking about middle-of-nowhere midwest; I'm talking about suburbs for metropolitan areas.

This guy is just entitled, and a whiny entitled at that. “Why can’t I buy a 10 acre farm with avocado trees and chickens in the middle of the city!!!”

He was just trolling and drew some people in. Downvote and move on.

He’s an energy vampire

Yes but then I'd have to live in the midwest - wouldn't I? I'm not one to be taking on that level of social suicide.

I lived in poor rural communities for the first 18 years of my life. I've paid my dues to my poor working class roots and I'm more than glad to say goodbye forever. And you can tell me, "But Omaha isn't that bad!" but I'm not buying it. I know people in the midwest and there's a reason so many want to leave. Only reason they stay is because they can't afford somewhere else - not because they like it.

To each their own I guess. I live in the midwest and I'm perfectly happy here. No social problems whatsoever. I've spent enough time in some of the biggest US cities to know I'm not missing anything.

I'm not sure what sort of mass exodus you're talking about either. The midwest city I live in is among the top 10 fastest growing cities in the US.

If selling your soul to FAANG in exchange for a lousy appartment is your recipe for happiness then I guess have fun with that.

You could also move to the east coast, or the south, or even the somewhere else on the west coast that isn't the bay area.

Your options are not Bay Area or Omaha.

And would I have a $400K+ TC if I left? No. (Mind you - I'm at $400K now but I expect $500-700K in the next few years)

People act like these jobs and high earnings just follow you wherever you move - they don't.

Maybe. Sounds to me like you'd be happier without that and all its baggage.

Changing my answer to therapy

Per [1], the minimum income to be part of the top 1% of income earners is $538k / year. I find it incredibly hard to believe you cannot afford to own your own home with that level of income, even in the biggest cities in the US.

What level of income are you considering here, and what house price do you feel is approachable with that income level?

[1] https://www.usatoday.com/story/money/2020/07/01/how-much-you...

That’s household income. It takes a mere $367k to be in the top 1% for an individual. I think your overall point still stands.

"Mere 367k" as if that isn't enough to afford the down payment on a nice home. Sure, you're not going to pay cash for a $3M penthouse in NYC, but I make well below 1/4 of that in a city and I'm well on my way to a down payment on a nice home for myself. I would recommend one SERIOUSLY reconsiders their budget/priorities if they are unable to build a house fund (even over a couple year period if starting from scratch) at $367k/yr.

I mean I see comments like this from a lot of people, but if you're in the top 1% of income in America you could probably buy a house in pretty much any urban space outside of major tech hubs/NYC.

A lot of people don't want to live in the suburbs, or in a "2nd tier"/up and coming city, but they are still very affordable, especially for someone in the top 1% of incomes.

It's a bit odd to describe it as "dire". You earn more than 99% of Americans, and people who earn less are still buying a ton of houses. You could probably rent for the rest of your life and still have a higher NW than 90% of Americans.

If you do really want a house you'll probably need to make some concessions on your demands, but tons of people do that anyway, and they are buying a house and they probably are not making 1% level income.

> 1. moving somewhere super rural

I don't think you're necessarily just limited to rural locations, but this does depend on what you require in a house.

If you're willing to buy a 1000 square foot apartment/condo, those can be had for ~$300K in some nice neighborhoods here in Chicago, with full access to the city's amenities.

If you're willing to live in the Chicago burbs (I personally am not), that same money will buy you a larger house with a yard. Still not close to rural, but definitely brings the problems that come with suburbia.

I'm in Atlanta, GA.

I have a huge penthouse condo with 25ft ceilings and wraparound 12ft windows. >3000sqft. It's in a historic building with lots of charm that has been featured in several movies. I'm also in a hip area of the city with skyline views and extremely walkable neighborhoods (on the Beltline).

My mortgage is < $2000/mo. I make >$500k a year.

I know my neighbors by name. Lots of them are in local bands and play in the courtyard. The food is awesome, and we're surrounded by art. I can do everything I want on foot.

Maybe you're in an overpriced city or a city without capacity for residents. There are lots of alternatives. With remote work, there's little reason not to explore your options.

Atlanta has oppressive humidity 5 months of the year. No thank you

Top 1% of income earners in the US? Because that is $450k+. With that income, you should be able to easily buy a home anywhere in America in any city but the most expensive enclaves of those cities.

And in general, top 1% in any local context will be able to afford a house where you live, too. I don’t think GP is actually in the 1% they think they are.

It's actually more like 330ish according to some sources, but the point still stands.

I live fairly rural. My wife and I both have degrees in MINT disciplines. With both of us working full-time, the best house we could currently afford would be older (and in a worse condition) than the one my parents bought for themselves when they were young, my dad had a medium-income job, and my mom was working only half days.

Same boat. Basically, the only way to play is to already own, and use that inflated leverage to buy something else inflated. This is the opposite of what we should be doing, and nonplayers are completely priced out of the market.

Top 1% income is about $540k/year according to https://www.usatoday.com/story/money/2020/07/01/how-much-you...

In my experience, an income of $X lets you get a mortgage for a house worth ~$6X. Where do you live where $3m+ won't get you a house?

while a bank may write you a mortgage for 6x I think it’s very worthwhile considering how that fits into an overall financial plan.

I'm not a financial advisor, but I think housing is a very reasonable investment given:

1) you need a place to live no matter what

2) historically the real estate market does well over long time horizons

3) if you make $540k and your mortgage is $200k/year, you'll still have like $100k-$150k in spending money after taxes.

4) housing values are a good hedge against inflation

5) IMHO inflation is going to be bad over the next few years, which means your fixed mortgage payments will shrink rapidly in an inflation-adjusted sense.

YMMV

This is probably referring to major cities like New York and San Francisco where the top 1% earners (Nationally) are. This is probably because the top 1% of earners in these states are in a bidding war.

Nonetheless, I agree there are some compelling arguments that, practically all homes will be driven to prices which are only sustainable by institutions and therefore there will be little American home ownership by citizens.

If you have a top 1% income you can easily afford a place that isn't super rural, unless your definition of super rural is wayyy out of touch

You forgot : 1. Something terrible happening to everyone else in the world except me.

I have been really banking on this one.

Is Des Moines, Iowa "super rural" now? I'm not even in the top 20% of income earners and I could comfortably start a reasonable mortgage on a single family home here. I mean... I know it's still Iowa which probably conjures images of corn fields and pigs for most people, but I'd hardly call a metropolitan area of over 600k "super rural".

Don't get me wrong, housing prices are still nuts here compared to where they were a few short years ago - even in actual "super rural" parts of the state thanks to materials and labor shortages. The whole 1% having to live somewhere "super rural" thing just threw me for a loop.

~100k for 20% down gets you a good place in the non-Seattle Western WA. Not rural, close to Seattle and Tacoma and the airport, nice weather. Monthly payment is already lower than Seattle rent and will surely continue to look better through the years. Doesn't take FAANG money to achieve - just west coast software dev money.

Before the market really caught fire in late 2020, you could've gone in under asking in this area + gotten that sweet sub-3% interest rate.

That said, I like living in the suburbs and own a (decade-old+) car.

If you are in the top 1%, you shouldn't have to look somewhere "super rural" in most states. Or maybe I have a different definition of "super rural" than you?

This comment is confusing. I know many people in my neighborhood who are not even close to your 1% and own their house. How is this possible? We are not super rural.

Agreed. Are we talking about the U.S? The data I'm seeing shows top 1% income as over 500K USD. That's enough to easily afford a home anywhere outside a few extremely expensive pockets of the U.S.

Also, you are not likely to do much better than that at Facebook/Google unless you are in the top 1% there as well (i.e. above Staff Software Engineer).

I'm also curious about this. I'm not even in the top 10% for the US and I own a home. I know multiple people who make noticeably less than me who also own homes. And there are multiple nearby cities where people who make even less still also own homes.

My guess is that either the definition of "super rural" being used here is overly broad (like for example anywhere outside of new york city ... ) or they're living in some ultra high cost of living area.

It means that someone that is considered high revenue earning via a job is priced out of the market, but if you have pre-existing assets you can hedge/borrow against them to get more.

It's also another way of wealth, many people assume having high revenue via salary/compensation is a good sign of wealth, but it's not.

Makes you a better consumer, e.g. you're priced out of buying a house, so you rent.

Since the parent is in the top 1%, he or she probably works in New York City, San Francisco, Seattle, Washington DC, Los Angeles, or San Diego.

Suburban DC here. I'm not in the 1% and can afford a house just fine. Plenty of homes here sub-$600k. A 1% income should be good for a home well in excess of $1 million.

You could afford a house in any of those places on 1%ile income.

The sharpest segment on that graph is since July 2020. If you bought any time other than November 2004 - November 2007, it was cheaper than it's been in the past 14 months. If you already own a home and have equity you are probably fine. The GP was describing what it feels like trying to enter the market right now.

My friend just bought a nice house near Indianapolis for less than $100,000. You have not listed all the options.

>Put a huge tax on vacancies and cap the number of residential properties a business is allowed to purchase in a year.

What makes you think that's an effective intervention? What do you think the vacancy rate is, and how much % of housing is being bought by businesses?

Are you willing to compromise on square footage and number of bedrooms, bathrooms, and garage? I don't know what kind of properties you're looking at. But have you considered settling for a smaller home within reasonable commuting distance?

> 1. moving somewhere super rural

Why is this such a deal-killer for so many people?

That's literally where most of the land is. And a good chunk of it has decent internet, even if you have to mount a 5 GHz airMAX dish on your house.

No jobs in rural areas. If remitr work becomes the new norm there is an incentive but I doubt it.

Great suggestions.

I would add forbidding foreign people and companies from owning real estate in any given country.

And exponential tax on second, third and more houses to remove hoarding, air BnB issues, and reduce flipping incentives.

>moving somewhere super rural

Why do you think you have to move somewhere super rural? I'm in the suburbs of a major city and decent sized 3 bedroom houses start at ~$200k.

At $545,978/year (the min to be in the 1%), you can afford a house anywhere in the United States, except for 3 very specific geographical regions.

lolwut? A top-1% income is north of $400k nationally. That buys plenty of house in most places. You could take a 50% pay cut and still be fine in suburban DC.

EDIT - OP edited their post to say "1% within age group, more like 10% overall". That's still likely a $100k+ annual income. I'd suggest buying a house is still possible on that income, just perhaps not across the street from Apple or Amazon offices.

yes, exactly my "problem". it feels weird earning a relatively high salary and at the same time buying a house somewhere at least suburban or even a flat in my town would require me to pay off a huge loan for a long time. in theory I could do that - but in practice this is not really achievable as I do not trust in my mental health stability. I don't know if I can keep that up for long enough.

You in a top price area like SF or NYC? Then you’re in local competition with other top 1-10%ers.

> top 1% of income earners

Probably not where you live, though.

You also left out commuting from Tracy.