> I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding.

Why is it "supposed" to be this way?

It doesn't work this way in a lot of Asia. People don't want old, used homes and they lose value over time. Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns.

When American cities expand, they build more houses farther away but further condense business in the downtown core. But that's a problem that's politically invented and not so much a problem elsewhere.

I will second this. At some point a few decades ago I assisted on studying EU policy plans regarding sustainability. The idea was that city and town design was supposed to have "kernels" of social activity accross their boundaries e.g. shops, schools, businesess including specifically large businesses mostly on the services sector.

Also in the EU country I live in schools are managed centrally and equally, so there is no such thing as a "good school district" I read happening in other countries, which seems to expand inequality and cause financial hardship to their population for no reason other than the ideological assumption that central planning is to be avoided.

> so there is no such thing as a "good school district"

Is this actually legit full true? It might be less of a gradient than other places, but in our two years in Norway our children went to two different public schools which were in immediately adjacent suburbs - both good locations, and there was a definite difference in the management of the schools which was visible through all our interactions with them.

The second school was clearly better in our experience, despite being part of the same system.

Norway isn't "EU" for those purposes, but I suspect it's similar. The same way that different hire car offices or different pizza parlours in the same "chain" can have quite different quality despite theoretically operating under the same policies.

(edited to add)

While these things, in theory, normalise out over time as staffing changes in individual schools or individual franchisees - your kids are often only at each school for a handful of years, so there'll definitely be some attempt to find the better ones based on what you hear from parents of kids a year or two ahead... and those with enough money to just move house into the "best" zone will still get their kids into the better school.

I don't know about Norway but in the Czech Republic, there's no "school districts" in the first place, so that would be why there's no "good school district" here. Schooling simply doesn't have geographic boundaries here.

In the USA and other multicultural countries, a 'good school district' is basically one populated by middle class White and East Asian families: parents who value education and have received it themselves, and children who will not be disruptive in class.

Czechia doesn't have multiculturalism so it therefore doesn't have this concept.

> a 'good school district' is basically one populated by middle class White and East Asian families

So that would be all our schools. :) (Czechs and Vietnamese, respectively)

> and children who will not be disruptive in class

In my experience that seems to depend more on the type of school rather than on location. Gymnasia would be expected to have better-behaved students than vocational schools, even if the students come from the same region. I suspect that has a lot to do with entrance examinations. If you can pass the entrance examination for a Gymnasium, you're much less likely to be someone who had been disruptive in class in the past, and consequently also not likely to be disruptive in class in your new school.

European countries also have good and bad schools, they just don't constrain attendance geographically. Usually you only need good test scores to get into the better schools, see also https://en.wikipedia.org/wiki/Gymnasium_(school)

It's not about multiculturalism but about social classes.

Do Czechia have social classes? If yes do they live in different neighborhoods?

Interesting. How do you decide which school a child goes to? Presumably there are limits on how many places are at each school, and you need some way to make sure that a child doesn't wind up with the only place left for them being on the other side of a city - so you'd have some degree of locality.

Here in Melbourne, Australia - many schools allow some out-of-district students - as a percentage of their total enrollment - but pretty much all public schools are required to make a place available to any student inside their district (which are drawn based on distances between schools, so they're sometimes pretty weird for transport)

http://www.schoolcatchment.com.au/?p=5730

> How do you decide which school a child goes to?

It depends on which school you like. In case of high schools, if you choose a vocational high school (which teaches a specific craft or a group of crafts), as opposed to a gymnasium (a school that prepares you for further university studies), it also depends on your intended future profession.

> Presumably there are limits on how many places are at each school

That's what standardized entrance exams sort out.

> and you need some way to make sure that a child doesn't wind up with the only place left for them being on the other side of a city - so you'd have some degree of locality.

We have good public transport that was free for schoolchildren (and for high school students was very affordable), so this wasn't a problem for me even if my school was on the other side of town.

Interesting... I gotta get back to Prague, it has been as couple of years now!

Do you have children of your own in the school system? I found that my expectations didn't always match the reality either in Australia or in Norway when it came down to actual experience for my kids.

Myself, I grew up in a remote area and was home schooled, and then for the final years of high school I went to the closest school, about 90 min drive away, so I lived in a lodging by myself during the week from age 16.

I don't have children, so I can't comment on the situation today. But it doesn't seem to have changed much in terms of organization.

BTW the fact that districts limiting attendance don't exist means that you don't have to change a school if your parents move, which happened to me at least once. Or, that your parents are prevented from moving if you want to keep your school.

Australia is pretty good about allowing continuity once you're settled into a school if your parents move, so long as you didn't just move into the district for a few months to get into a school.

Management might diverge but I meant central planning of schedule and equal distribution of resources.

I appreciated this other perpsecitve. It also helped me think about building codes and how old homes in the US can get grandfathered into old codes, not having to update to many of the new codes.

But what if they did? What if our governance said old homes must be updated? Then old homes would probably be worth less because it costs a lot to retrofit sometimes.

I may have some or many of those details wrong, just thought it was another example of how political decisions drive housing prices one way or the other.

If the updates were mandated at the time of sale:

You'll find a lot of people trapped in homes they cannot sell. The cost to update very old homes would far exceed what most people can spend out of pocket, and by the time they paid off the debt to do so, the codes may have changed again.

Also, older couples who have lived in one place many years and are now retired generally cannot take out lots of money. Instead of being able to sell and move to a senior community or nursing home, they would be stuck with a property they cannot maintain, compounding the problem.

Essentially, you would be hurting vulnerable people at the advantage of the young and wealthy.

If the updates were mandated as the code changed:

See all of the above, but now you're forcing people out of their homes even faster.

Oh, I wasn't saying that I believe that is a policy we should enact, I was merely saying that political decisions like that could switch a home from being an asset that increases in value over time to one that decreases in value over time.

I agree there are challenges in both having homes that appreciate and homes that depreciate.

> It also helped me think about building codes and how old homes in the US can get grandfathered into old codes, not having to update to many of the new codes.

In the US ex post-facto laws are generally unconstitutional. Our law defaults to grandfathering (there are exceptions), so a change in code applies to new construction, or renovations to existing structures. My experience owning older properties is that this was not a feature. Often what would be a repair in a new property would lead to a major renovation because whatever was being worked on would have to "be brought up to code".

A building code change that requires old buildings to be brought up to current code would not run afoul of the prohibition on ex post facto laws as long as any penalties for not complying only apply to non-compliance that occurs after the law is enacted.

Here are a couple examples showing both an ex post facto change and a non-ex post facto change.

Example 1: The building code is changed to say that all electrical outlets installed in kitchens must be installed with GFCI protection. Your non-GFCI kitchen outlets were installed before this change. In this case fining you for not having GFCI outlets probably would violate the ex post facto law prohibition because you are being fined for something that occurred before the new law--the installation of non-GFCI outlets.

Example 2: The building code is changed to prohibit non-GFCI outlets in kitchens. Your non-GFCI kitchen outlets were installed before this change. Fining you for having non-GFCI outlets would probably not violate the ex post facto law prohibition because you are being fined for something that is happening after the law--having non-GFCI outlets in your kitchen.

(This is all assuming that fines for building code violations are punitive. The prohibition against ex post facto laws in the US generally only applies to changes that increase punitive aspects of laws).

> A building code change that requires old buildings to be brought up to current code would not run afoul of the prohibition on ex post facto laws as long as any penalties for not complying only apply to non-compliance that occurs after the law is enacted.

My personal experience having owned multiple properties is that code changes rarely, if ever work the way you are describing. I've actually renovated a few kitchens, and had to deal with GFCI because the law around the permit for construction required us to, not because the code change was applied to pre-existing non-GFCI outlets. It would be impossible to maintain a property if the law worked as you described - the government could declare the kind of shingles on your roof illegal, and take your property for non-compliance, which is exactly why ex post facto laws are unconstitutional.

I think you’d see a lot less progress in building and energy codes if existing buildings had to comply with all the code changes.

You also see this with houses that could duplex or quadplex in place - but it won’t happen because doing so would require bringing the entire building up to current code.

The thing that increases in value the most is the land underneath the house. It doesn't make a lot of sense for house to increase value as it gets older. But even the house is a subject to inflation and the effect of "back in my days we could buy a toilet bowl for $20" can be seen even here.

City centers exist, just look at tourism and public transport. It's more valuable when you can rent out apartment as AirBnb, it becomes more valuable when tourists can't drive, distance from museums and shopping malls increases value and possibility that the land you own could be bought out for development of high density building is what drives the value up.

Housing is not a bottle of water you can buy in groceries. Housing is one of the few things most of us buy on debt. If you increase the amount of debt people can take by lowering risks for banks, the price will rise.

Also there are many other factors like that cities that complain about high cost of housing mostly have draconian municipal building codes and zonings. Even racism has a play in it, it's truly interesting topic to study.

I couldn’t agree more with most of your points, but I couldn’t resist nitpicking this one:

> Housing is one of the few things most of us buy on debt.

Hard disagree there. Most people I know buy phones, cars, bike, washing machines, computers, sofas, desks, and damn near everything else I can imagine on financing plans. I feel like a weirdo because I tend to save up for everything and not accumulate debt! But I also grew up in a very frugal household, so maybe others were raised differently.

People still live in hundred years old "used" houses in Europe and they are generally more valuable than new houses.

In much of Europe the core of a city is much more expensive than the periferia.

Yeah here in the UK I’d be very reluctant to buy a new build. They tend to have terrible build quality relative to the price and often look very dull and “boxy” in my opinion.

That too, build quality took a lot of hits. Housing might become consumer goods.

In US most houses are made from wood panels and nobody expect them to out live the owner. In Europe most houses were made from bricks and concrete and people passed them to the next generation.

Wood houses last centuries in the US, just ask anyone in the northeast part of the country. They will also last much longer than "bricks and concrete" because large parts of the US are subject to strong earthquakes, which makes that type of construction dangerous and expensive. Many areas that originally had brick and masonry construction were badly damaged in earthquakes, and subsequent housing was built with other materials. On the west coast of the US, for example, there is a clear transition period in construction materials before and after the 1906 earthquake in San Francisco in places as far away as Seattle once that risk was recognized. Wood and steel construction can survive strong earthquakes with minimal damage.

>In US most houses are made from wood panels and nobody expect them to out live the owner.

This is just nonsense.

I expect my house to outlive me.. a wood framed house has a 100 year life expectancy but that will be longer with maintenance. We have older homes from the 1800s too. Plenty of people buy homes from the 1920s.

I think we’re using different definitions of “old”. My mother’s house is about 250 years old, and that’s not uncommon where she lives. Her house is literally older than this country (I live in the US these days). Her house will probably last at least that again.

My house in the Bay Area is ~65 years old, it’s timber frame & stucco. When a strong wing gusts against it in a storm, you can feel the house slightly shudder. It’s not going to fall down (I’m reasonably certain, at least it hasn’t in the last 15 years and we’ve had a few storms :) and it’s not “made from wooden panels”, but in terms of solidity and construction, it’s not in the same ball-park (to use an Americanism) as my mother’s house.

Oh, and my house cost today would cost about 10x what my mother’s would…

[edit: it’s kind of wild that your username is what I used to sign into Unix systems with when I was in college. Sjg are my initials and they changed our account-names every semester for some reason]

Wild.. the definition though is that the owner outlives the house. That’s what I disagree with.

They probably meant two by fours with insulation (?) in between... I doubt anyone would expect these to outlast modern brick construction.

Wood framed houses survive many hundred of years. In fact they offer many advantages to bricks.

Yes that's true and there's a good reason for it. The hundred year old buildings are in, or close to touristic and historical areas that due to preservation laws and NIMBYISM, nothing extra is being built there and will never be built, so supply is fixed forever but demand is ever increasing. Basically they're more valuable assets than gold.

Those areas are also very close to all amenities like top public transport connections, quiet green spaces, entertainment, good doctors, top companies, good schools, lawyers so walkability is top noch, you don't even need to use public transportation, let alone own a car.

Buildings in those areas are also typically much more spacious and more solid than the current matchboxes being built.

The properties themselves lose value over time but the title or lease to the land under the property still increases in value exponentially.

> People don't want old, used homes

I don't think that's what they were describing. They were describing new homes, not old: I think the "supposed-to-be" pattern is up for 10-30 years after first being built, as the area is still growing and becoming more desirable, then down once the growth no longer outpaces the aging.

I'm curious, which Asian countries are you talking about?

> Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns.

That is absolutely not true. There's a reason why it is called center in the first place. Amsterdam, for example is completely flooded by tourists in the center and not so much outside of it.

They specifically said cities in Asia

Look at the real estate market in Singapore or Tokyo where housing prices are more reasonable

Singapore housing prices are in no way "reasonable". There is a large public housing component (80%), but those have also been increasing in price compared to median income, and decreasing in size. For the private market, average prices are now 15x the median yearly salary. [0]

Singapore is facing the same issue every other locality is with housing prices: prices have no fundamentals any more and are just inflating upwards out of reach from the median buyer. One can compensate slightly with smaller homes, but that has an impact on fertility rates and other quality of life indicators.

[0]: https://www.straitstimes.com/business/invest/property-no-lon...

Singapore? Holy god no.

If you look at the private condo market (you can’t look at public as the prices are subsidized), it’s not unusual for condos to cost >$2,000 per sq ft in desirable locations. A 750 sq ft 2 bed condo can run $1.5 to $2.0M.

San Francisco is closer to $1,500 per sq ft for a house in a prime location.

I was trying to get an idea of what Japanese house prices are, but I couldn't find much beyond the cost of a new house. Which is less than in the US, but not by much more than 10-20%. I understand houses in Japan don't typically appreciate in value like they do in the US though. They like to buy new and don't see it as an investment.

I assume a huge factor has to simply be that Japan's GDP and population growth has been basically flat for ~25 years.

I don't know a lot about Japans housing market, but I've read plenty times that houses are not built to last in Japan which probably has something to do with the low housing prices.

https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...

yes and this is on purpose. This is also partly because the safety standard is ever-evolving due to the precarious nature of Japan. Thus, updating house to the latest safety standard would cost more than just flat it over and rebuild a new one.

That's why, the most expensive part is the land and not the building itself.

> When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding.

If the town is expanding then the supply of housing goes up along with the demand and prices stay the same, i.e. proportional to the cost of constructing new housing.

Once you reach a certain point you have to build taller buildings which are more expensive to build and then housing prices would reflect the higher construction cost, but this only applies to urban areas and the costs only get really high when the buildings get really tall.

If you converted some of the suburbs to three story buildings that filled the lots, the cost per square foot wouldn't be much higher than it is for single family homes, but there would be ten times more housing per acre. Doing this is prohibited by zoning, which is the real reason why housing is unaffordable.

People who wish to live in areas of three story multi-family structures that fill the lot should be able to find or make places where that’s legal and the predominant style, I agree. (I’m opposed to the effective exclusion of that via pervasive 1/2 family zoning.) Equally, people who don’t want to live like that should be able to find or make places where detached 1-3 family buildings that don’t fill the lot are legal and the predominant style. (I’m opposed to zoning laws/changes that prohibit these neighborhoods as well.)

Forcing everyone to live in what they consider an undesirable hellscape isn’t good policy in either direction.