If you are becoming a tourist hub, then create an off-town tourist area and add a convenient transit line/people mover to the central parts of town. Tourists get reasonable housing, locals don't get displaced and the influx of population does not destroy the cultural vibe of your town.
Prohibition never works, and piracy is a reflection of an unmet need. Banning things merely airs out open wounds, and leads to grey-markets such as shady uber/airbnb equivalents within the city. If you want to reduce abortions, banning merely leads to riskier abortions. Examples of this are dime a dozen.
When demand arrives, the cities MUST adjust to incoming demand. Couple examples of working uncomfortable compromises are: 1. Paris - Choose a small district and allow it to go full skyscraper. The rest of the town maintains its architectural identity. 2. Barcelona - Go full superblock. Means that tourist activity gets neatly distributed across the city (removing bottlenecks) and tourists do not lead to increase in car traffic.
I could go on and on, but 1 fundamental truth stays. Bottlenecks only help those who control access to it. The key is to eliminate the bottleneck (more housing). Band-aids (rent-control) or equitable distribution of bottleneck gains (no-renters->only-homeowners/ more single-family-housing) never works. It only leads to the situation festering (see Bay Area / SF), and makes for an even harder problem in the future.
I'm not sure if my comment conveys any cohesive point, but I hope folks get something out of it.
p.s: fuck NIMBYs
This famous article discusses why housing is becoming a huge problem everywhere and why that's super bad for the economy: https://www.worksinprogress.co/issue/the-housing-theory-of-e.... It's been discussed here a few times, e.g.: https://news.ycombinator.com/item?id=28531025.
The compromise Barcelona made is not enough. Sadly, that beautiful city is IMHO the prototypical case of getting ruined by too much tourism.
In their defense, I think it's safe to state all mid-to-large cities in EU are quite crowded and unaffordable. For example, Copenhagen used to be a place where citizens enjoyed great purchasing power. Despite rent control and sale taxes, a single person in a well-paying job can hardly afford a mortgage for a decent flat right now. The same can be said of Munich, Madrid, London and many, many other places.
In practice, it's a free market and landlords have by no means been discouraged to offer flats.
Or would you propose strict accompanying zoning laws with strict enforcement? I think that would meet stiff resistance from property owners but would be feasible. I do think all of this would make the destination much less attractive to visit though so it really comes down to how much you want/need the tourists.
What do you mean by "works"? Yes, grey markets will pop up, but if Portugal banned AirBnB style renting that the market for that housing wouldn't shrink?
It seems to me that prohibition might be a useful tool in a more comprehensive set of policies to address the problem.
Take Amsterdam for example.
A good decade ago, it was crowded in the tourism months (summer), but not too bad. Now it's crowded in the off season too, and during the summer months even more so, to the point where walking around is really hard.
The mayor seems to constantly want to get rid of cannabis, which won't solve the problem, the issue isn't the weed tourism... it's the unfettered tourism.
These things can be controlled, you can control how much tourists you have by limiting the amount of hotels you have in your city. But with AirBnB you lose all control on how many tourists.
The old wooden buildings where one could hear everything, people arriving and talking loudly in the stairwells then banging their suitcases up the stairs etc.
We left, couldn't deal wit it.
How much control is happening, no idea, probably none as usual.
You could also make laws to limit the number of properties per person, and if you're even smarter, you could use that in conjunction with a map of relationships between people, so you could limit the number of people putting listings in their family members names to get around any limitations.
AirBnB has the data to assist governments.
Airbnb will probably follow your law, but other platforms that do not will flourish. They will be difficult to regulate, given that they won't be in your jurisdiction.
> You could also make laws to limit the number of properties per person.
Many laws already exist that give unfavourable tax treatment to second and subsequent properties. They are widely avoided through family members and legal entity structures and a hand-wavy "map of relationships between people" isn't going to magically fix that. This would also have a fairly obvious negative effect: it would artificially limit supply in the rental market, driving up prices. A person who could have invested in multiple properties and supplied them to the rental market will instead supply at most one, and invest the rest of their money elsewhere.
There isn't some nefarious conspiracy preventing effective regulation in this area. It's just a legitimately hard problem.
At least that is how remember how bad it used to be.
Hotels are usually limited because they are unpleasant neighbors for actual residents. It’s not really a surprise that’s the main issue people have with AirBnB rentals.
If you just add housing, isn't it possible that the effect is like adding roads to prevent traffic congestion? The number of people coming in just increases even more until the marginal attractiveness is the same. From the point of view of locals this means that there are even more outsiders, and the affordability is just as bad.
The exact same concepts: cheap grandfathered lease, hoping the landlord doesn’t cancel, can’t afford rent despite making >100k, “luxury apartments”, empty apartments, illegal renting (e.g. AirBnB) and shadiness.
We are currently in the "denial" phase. We can't get to "acceptance" fast enough.
And adjusting to what exactly? Living in squalor way outside of what you call home because some parasite gets to live in a furnished and unaffordable temp home, payed for by a relocation package?
If 10 people with $1 to spend on an apple, and one person suddenly had $11 you could say demand for apples had "doubled", implying that this the result of an implacable, impersonal, unchangeable force but it absolutely isnt.
That guy with $11 just needs to lose most of it or not be able to spend it and then there is no more apples shortage "due to high demand".
Portugal cant tax an overly rich canadian living in canada but they can absolutely cut the bottom out of the portuguese-property-market-as-a-bitcoin-like-store-of-wealth. This would not only free up land for portuguese habitation it would help fill the portuguese budget hole.
However, for some reason that is probably more about a variety of property owning portuguese politicians getting very rich and not attracting useful investment, the Portuguese government encouraged this with the golden visa. They only cut porto and lisbon out of the program after a steep backlash.
Or to put it in reverse - I am not aware of any metropolis/capital where this isn't true, regardless of regime.
Tokyo. It is hoovering up all the Japanese youth, but manages to stay affordable for other factors.
- Permissive zoning - Immigration restrictions - Closed culture - Declining population
Public transit is constantly being expanded and there is so much stock of modern buildings, I can’t see it changing any time soon.
Last week I went to the fish market by Sky Train, first time I’d been out that way, and I was surprised to see a ton of modern condo towers clustered around Erawan. And why not? It’s 30-45 minutes on the train to the center of town.
Compared to months of planning and looking if you plan to move in an European city.
I mean, tendency is that most people want to live in the big city, sometimes as necessity (can only find a job there) sometimes as a preference (better services, etc.) the result is traffic jams and expensive real state.
Quality of life issues eventually drive people to live in the outer suburbs, further exacerbating issues within city cores (e.g. San Francisco right now).
Also, white flight in the 60s was a move to the suburbs- many would consider that given the density of 2020, the suburbs are feeling the same crunch. Bellevue and other suburbs are more expensive than Seattle. I’m guessing there are suburbs of SF that are more expensive than SF.
And you yourself said "Bellevue and other suburbs are more expensive than Seattle." Which would infer that yes, people are leaving the city and moving to suburbs.
My statement the cycle of movement to urban centers might be reversing, and I used condo prices in SF since pre-Covid as a data point.
You come back with “its still one of the most expensive places in the world”. Then you said “Be a big boy”.
You’ve failed to make your case and resorted to condescending remarks.
Let’s just chalk this up to you failed to disprove my argument and leave it at that? Unless you had more condescending statements to make?
Tenant protection is good, but it breaks down in high-demand situations. And of course the better solution is to solve this on the supply side
Lack of housing suits most people in power perfectly well. They get to control the populace through sops like the aborted rent control law Mietendeckel.
Portugal should build more housing, which is a simple, effective solution if the rent is too damn high: https://www.theatlantic.com/business/archive/2012/03/the-ren....
The nice thing about indoor space is that we can make pretty much as much of it as we'd like.
"I'd do anything for lower housing prices!"
Build more housing.
"...but I won't do that."
Maybe SF doesn't want to build more housing, but this isn't universal.
The other part is that the same things that make it slower to build more housing also make it more expensive, all the various bureaucratic processes.
Furthermore builders will need to be incentivized appropriately otherwise we'd get an abundance of luxury apartments (higher margins).
https://old.reddit.com/r/yimby/comments/wz3tq0/anything_but_...
This is not some metropolis or even medium city. Quite the opposite.
What? Have you ever been in Lisbon? The city is pretty dense as it is. You could mostly just build higher, and that has its limits too, depending on the structure and foundation.
Adding more housing outside the core of the city might not be attractive enough. And increasing the density of people also means you need to increase the density of services (public and private) and utilities, which also comes with its own problem.
Lisbon: 6,452/km2
Barcelona: 16,000/km2
NYC: 25,000+/km2 (depends on the source)
Lower East Side NYC: 33,600/km2 - due to zoning regs, there are very few buildings over 9 stories... but every building is 9 stories!
Lower East Side NYC 1910: 144,000+/km2 - visit https://www.tenement.org/ to learn more.
Kowloon Walled City, 1970s: ~2M/km2 !!! - inspiring 1000s of dystopian Sci Fi stories from Akira to Blade Runner. https://www.google.com/search?q=Kowloon+Walled+City
25,000/km2
It’s pretty quiet too! :)
There are other decent metropolises in Portugal and other fun spots around the country not to get crammed in the capital.
People can work from nearby towns where housing costs are relatively moderate and just hit the head office in Lisbon one or two times a week.
Corporations and people need to adapt to the changing circumstances and to be open to make the necessary adjustments to advance in this world.
This is the exact way that janitors and baristas and everyone servicing those 100k+ a year software engineers is priced out.
Took a train to Sintra, there were endless and endless 6 story-miles long buildings forever. Portugal seems insanely dense.
Lisbon: 100.05 km^2 , 544k people
San Francisco: 121.48 km^2, 873k people
20% more room than Lisbon, 60% more people.
This is just the dark side of globalism cheered by Portuguese politics for decades. Competition is global now. Local middle class is having their lunch eaten by foreign rich people or even middle classes from wealthier countries while the unrestricted influx of emmigrants from poorer countries keep sallaries down.
Suck it up and enjoy.
How do you arrive to that conclusion?
- If you built 100 million new houses in Lisbon, would prices fall?
- If you built 10 million new houses in Lisbon, would prices fall?
- If you built 1 million new houses in Lisbon, would prices fall?
- If you built 100k new houses in Lisbon, would prices fall?
- If you built 10k new houses in Lisbon, would prices fall?
- If you built 1k new houses in Lisbon, would prices fall?
Even if you have a model that says that building more houses raises prices for some number of houses, surely increasing the number will eventually make prices fall, wouldn't you agree?
Where is that number? Shouldn't the discussion about how big is that number, and how to achieve building that many houses?
"Supply increses lead to price increases" is a pretty extraordinary claim, and the only charitable interpretation of it is with the addition of "up to a point". Where is that point? Why not make the charitable interpretation yourself that people recommending more housing are recommending more housing past the price increase point?
To be clear, I don't believe that the supply/price curve is anything but sloping downwards, but even if your one does have a hump, being against housing still sounds like a bad conclusion.
Anyway, the problems is not so much that there is not enough housing, but that it is on the wrong place.
Globalization is inevitable. What I don't buy is the rate of change, it _must_ be smooth or the system may implode. Blind and raw globalization is just a way to feed the nationalisms that most people are afraid of.
But what that amounts to is, "we could do it, but collectively don't feel like it."
six weeks. People were moving in three months after breaking ground.
I guarantee if California said tomorrow, "build what you like on your land, there will be no permits required!" People would flock to build on the land. Whether the dangers of that outweighs the dangers of homelessness and high price families spend on rent that makes healthcare, healthy food, and education less affordable, is an exercise for the reader.
The challenge is nearly always political in nature: a lot of vested interests want to go out of their way to make it harder to build more housing.
https://www.macrotrends.net/cities/23014/houston/population
They have also managed this with affordable housing.
That's something to learn from.
Texas has allowed lots of houses to be built. It's perfectly doable. CA did it until the 1980s.
Check out Arbitrary Lines by Nolan Gray for how Zoning stops people building houses.
https://www.goodreads.com/book/show/59613917-arbitrary-lines
People need to probably drastically limit what they think of when they think of affordable housing. Think multi-family homes where each dwelling supports 4 people and is < 800 sq-feet. 1 bathroom, 1 communal area (w/ small range + table) and 2 bedrooms.
Look to the disposable homes of Japan I guess.
I think the tiny home concept makes sense as it’s trailers without the stigma. But yes, we probably need to think of a new type of town built around small properties that are pre-fab and disposable outside the connecting infrastructure.
I don’t think dense towers are the answer though.
Suppose you see a man strangling himself, and he wants to know how to get out of his predicament. Does he need a VC-backed startup to sell him an anti-strangulation machine? No, he just needs to stop strangling himself! To hell with "innovation".
Land prices in the US (or the UK, or any other place with a housing crisis) are not a limiting factor, if anything they're what would fuel the construction if it were allowed to happen. Property values within cities are so inflated precisely because of the zoning which makes it impossible to build the kind of housing needed to serve the immense demand.
So even if you build multi-family dwellings, the crisis isn’t resolved because the cost of construction, maintenance, and property taxes are out of reach. Unless it is subsidized. The UK is evidence of this. Almost all their housing is multi-family and dense and unit size is small even by European standards. But it’s expensive still. And they keep building.
Japan is a good example of a place where there isn’t a housing crisis and it’s because homes are mainly disposable and very small.
>So even if you build multi-family dwellings, the crisis isn’t resolved because the cost of construction, maintenance, and property taxes are out of reach. Unless it is subsidized. The UK is evidence of this. Almost all their housing is multi-family and dense and unit size is small even by European standards. But it’s expensive still. And they keep building.
No, this is totally, completely wrong, the housing crisis here is not because of materials or labour costs. It is a policy failure: a sluggish, capricious planning system, entrenched NIMBYism and politicians that cave to it, massive legal restrictions on supply, and subsidies to demand. We aren't building enough, there is a massive shortfall in housing supply.
See this thread: https://nitter.net/AntBreach/status/1121362679367598080
There are all sorts of obvious political fixes to this (repeal prop 13, end single-family zoning, incentivize building mixed-use, mixed-income residences, whatever), but I can't imagine any passing any time soon. Homeowners have all the power, fight all these changes tooth and nail (often through lawsuits against developers on environmental protection grounds) at the local level.
It might be the _right_ solution, but if it failed to be adopted for so long it can't be that simple, isn't it ?
They are an active party, so you can’t just say “it works, but only if these people don’t exist”. This means the “simple” solution only applies to an imaginary world, and an actual solution requires a lot more thought and adjustment to accommodate for the reality of the problem.
Or if they're crazy enough to want to keep these old buildings they could just build all the skycrapers in the park surrounding peak Monsanto, easy.
/s
Historical buildings are nice, but for apartment blocks at least, yes, the priority has to be actually housing people. You can always require historical-looking facades if looks are a concern.
I assume you have actually seen the inside of old buildings with your own eyes.
In no way is the look & feel of the inside of an old building comparable to a modern one.
Yes, old buildings sure have downsides. But pretending nobody looses anything when you only keep historical (or even just historical looking) facades is eyewash.
I bet there are ways for the Portuguese Gvt to encourage renovation of all the dilapidated old style buildings instead of encouraging speculators to wait for them to collapse so they can build new and cheap and with loosing every bit of charm a building can have.
If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Similarly, you can loosen building codes to increase production of homes, limit visa duration, require citizenship for home ownership, etc. Those are some obvious fixes, why is the government not doing it?
Beyond the obvious potential fixes, all EU countries are facing the same issue:
- supporting immigrants (high level of immigration)
- no controls over ones border(s) (anyone can move between EU countries)
- over regulation and too many social programs (reducing peoples willingness to work & increasing burden on the current tax base)
- over regulation of industry and farming has left the only option to survive being to work in a city (as an example, see nitrogen reduction regulations in the Netherlands)
It's all "give-and-take" you have to decide how you want to live... To me it sounds like the EU is hitting a critical state, but is there a will to make the tough calls yet?
* depends on how you define "high" levels of migration, but few EU countries fit that. Portugal does, because they explicitly encourage it. Why? Nothing to do with the EU, they're trying to fight negative population growth.
* social programs aren't an EU thing, they're purely local. And the "too much social spending makes people not want to work" ia such bullshit.
* there are more local regulations than EU regulations. Which ones specifically are you referring to as too much?
* farming is explicitly subsidised to make it profitable. What are you talking about?
* not everyone can move between EU countries, you need to be a citizen. Like the Portuguese that have moved all around (e.g. there are probably millions of people of Portuguese descent in France)
It's annoying how popular empty nationalistic populists have gotten. Can't nobody bother to fact check their bullshit?
Portugal's working age population is declining[1] while its 60-plus population is increasing.[2]
Old people own most of the real estate and don't care much about workers. They also tend not to like change, which immigrants bring. So they dislike immigrants despite depending on them.
(//TODO: find papers supporting these assertions: they're factoids of the "everyone knows" type.)
1. https://population.un.org/wpp/Graphs/Probabilistic/POP/15-64...
2. https://population.un.org/wpp/Graphs/Probabilistic/POP/60plu...
Lisbon's local government is renowned for being the largest property owner in the country, with over 60% of Lisbon's real estate owned by the city.
I'm from Lisboa and this can't be true unless you're using some very strange definition of real estate. What's your source for this?
"Boomers don't like immigrants/workers, therefore life is getting really expensive" doesn't really sound like good reasoning.
If the population is shrinking, demographics doesn't explain it by itself. Housing should be getting cheaper if there are less people competing for it. There must be another factor here.
As with all wealthy countries, household size has fallen in Portugal over the past few decades, so the same amount of people needs more house. This is especially true in the context of empty nest retirees.
I'd still like the GP to connect the dots for me on his "it's all demographics" argument. It sounds like are argument you hear on Reddit.
For example, when my siblings were kids we all lived in 1 house. I have 3 siblings so there were 6 of us including my parents. In 1 house.
As we graduated from college we moved out. Now there were 6 of us in 5 houses.
Beyond the raw house count, you're going to need more space. Multi-bedroom homes have shared common space. The house we grew up in had 1 dining room, 1 kitchen, 1 living room, 4 bedrooms, and 2 bathrooms.
If we each moved out on our own, we now needed a minimum of 5 dining rooms, 5 kitchens, 5 living rooms, 5 bedrooms, and 5 bathrooms.
The number of people is the same. Still just 6. But we needed more housing and more space since we didn't share common space anymore. We didn't expect more than we had before (well, beyond the practicalities - it's difficult to share a bathroom with someone you don't live with), we expected the same as we had before we moved out.
I think that your thrust was that smaller average household sizes means more dwellings are required. This is a good point.
Shrinking average household sizes could be explained by the shrinking size of the average family, or it could be explained by shifting expectations, by people wanting more.
If you take a population where all single people are willing to live in share houses, your average size of your household goes up. If all the single people expect to live in their own apartment because they want their own space, own bathroom/kitchen, then this would drive down the average household size.
I would expect both of these dynamics to be at play here. Average family sizes are decreasing in most developed countries. People's expectations have also risen with regards to housing.
I wonder what effect each has on the demand for housing in Portugal?
BTW: Your personal example is possibly a good example of shifting expectations in society, whether you recognise it or not. Every sibling moved into a place by themselves? Did no one move into a sharehouse? I probably do not live in the same country as you, but it used to be in my country that when you first move out of home it is not the norm to live by yourself. What's the norm these days?
(Disclaimer, I'm American, so can't speak directly about the Portuguese experience.) But as an example, at this point I don't remember the last time I saw a bunk bed in a non-dorm room setting. This used to be extremely common in low-income housing in particular [1] but as an example I have never, ever seen anyone share a bunk bed with a stranger.
One other effect is location, location, location. In Lisbon in particular, like most European cities there is generally a height limit imposed on most of the city (higher than most places in the US, but not so high that tall buildings are allowed). There is only ten buildings above 80 meters in all of Portugal. If your building is so short, there is only going to be so many ways to subdivide it before you can't split it more to accommodate people.
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[1] - a historical photo of an NYC tenement: https://media.gettyimages.com/id/640482741/photo/bunkrooms-i...
I am also going to echo what was said earlier: dining rooms are not a necessity. They are mainly intended for people who entertain guests. Many apartments and smaller family homes don't even include a dining room, since the expectation is that people will eat in the kitchen.
In any case, censuses define a household as people living together in a unit, which would account for roommates. Portugal has gone from 3.7 in 1960 to 2.6 in 2011. Housing 10.3M people at 3.7 requires 2.8m units; 2.6 requires 4m units. And that may be just what Portuguese people have to put up with, but not their desired end state; if they were at the EU average of 2.2, then it would require 4.6m units.
Growing up (middle-class; both parents were teachers), we used our dining room to eat maybe 3 times a year. We ate around 1000 meals/year at the kitchen table and maybe 3 at the dining room table.
Or, in the case of "world cities" like London, wealthy (nearly all old) people from shaky and shady regimes around the world buy them as places to escape to if need be.
As well as falling household size in occupied dwellings, the proportion of unoccupied dwellings in these cities increases far above the percentage normal for the delays inherent in ordinary buying and selling.
IIRC Paris is attempting to combat this with a surtax on dwellings unoccupied for long periods.
The fully elaborated argument is long and somewhat nuanced. If you want a soundbite, how's this: "Boomers own all the stuff (to a first approximation). Two other things: first, due to their wealth they can outbid Zoomers for real estate as it comes onto the market. (Having someone live in the proprty is entirely optional.) Second, boomers are adept at protecting their wealth by keeping real estate scarce and taxes on real estate negligible, as they have always been."
Or: people are not competing for houses, piles of money are. The bigger piles are winning.
Edit to add: Demographics comes into it because the Boomers are the first generation in history to be so economically significant in their old age.
Before the boomers, life expectancy was about the same as retirement age, or younger. Houses passed on to the next generation much sooner in their life cycle, often as they were just starting to have children of their own. Now, children can themselves be retired before parents die and leave them the house. Often, perhaps usually, are, these days.
The market weakness of new-household-forming adults (the 18-49 age group) is one consequence.
We are in uncharted territory, demographically, this century.
Just think about it for a second, we in the west allow people to buy a piece of the Planet Earth, and hold on to it forever, virtually tax free(in Western Europe at least).
How is this nothing else but blatant feudalism? And how is it still allowed? Royal families and landlords were beheaded in the past by angry mobs over abusing this system for their personal gain.
Why don't we have taxes or a system in place to prevent this accumulation of land by those who got in the game early? Why can't we just lease land instead of allowing land ownership in perpetuity? Like, "this land is leased to you/your family for the next 100 years, after that it goes on to the market again where your offspring will have the chance to lease it again if they wish at the future market rate". Something like that, as our current system is basically a zero sum game which just encourages land hoarding through inheritance.
Those who's families go cheap land for peanuts ~100 years ago, are now leveraged to acquire even more of it while those born now without family wealth have no leverage to buy anything. Insane!
Imagine you have to start paying Monopoly from square one, while others get to continue where their parents left off. How is this fair? Why don't we have a system that resets this real-estate monopoly board every generation or so?
With our current ways, instead of creating a system that rewards individuals through hard work and innovation that contribute to society and human-kind, we're creating a system that encourages asset hoarding and rent-seeking that contribute nothing to humanity, rapidly going back to feudalism, where a few landlords, both corporate and private, will own all of the available land, and most of the people will be serfs for life, without the chance of ever owning anything, no matter how hard they work.
So, again, why do we allow people to own pieces of Planet Earth in perpetuity, virtually tax free?
Because the moment anyone mentions this, they get bombarded with "think of the poor old people who sit on a big house! They worked hard for it!"
We as a society have a tendency to prefer leaving lucky people as is while the remainder fights for the scraps. Why this is, no clue. Beyond voting being in favor of those already owning homes (too fractured to oppose grandfathering politically), I come across this attitude among the young way too often. It doesn't take a genius to realize sharing less with more will cause people to go hungry eventually.
Those same young people are all pro-grandfathering until they realize the bottleneck bites their life goals at age 30 and beyond. By then its too late, many of them stop caring as they become part of homeowners, and the cycle continues.
What do you mean tax free? There are inheritance taxes for that, which often go up to 50-60% of the value for higher values. That's why the majority of castles in the UK are in trusts and open to the public, paying 50% of the value of the castle and land every generation was too much.
And the property taxes are mostly grandfathered to the price the property was last purchased at, rather than at the current market prices.
> like donating your property to your kids before you die to avoid the inheritance process and taxes.
Donation to family members (above a certain sum, but any property would qualify) is taxed just like any other income.
> And the property taxes are mostly grandfathered to the price the property was last purchased at, rather than at the current market prices.
Property taxes are set at the current market prices (and if the gov thinks the value is set too low, they will come back and ask for more, retroactively).
(We could now add the Satre quote, or Hannah Arendt, or any number of people who've written about this. The popularity of the feel-good lie is well-inspected.)
It's fascinating how subjective dimensions of reality have the appearance of being objective, and how this seems to be increasing over time.
alot of these things used to be regulated, discouraged or prohibited, but with deregulation of much of finance more and more wealth is generated from speculation, rents and leverage... if people can make money passively from doing nothing but owning something (real or virtual) there is less motivation for "real productive work" and squeezes out the rest of the economy.
this compounds over time and get the results you see today: high land costs, rents, inflation etc.
blocking immigration or adding tariffs etc will do nothing to stop any that....
So if you increase supply and then people get bigger homes, etc..., until prices reach an equilibrium, then as long as rents exceed maintenance costs and land doesn't depreciate, you have a leverage (read: financialization) opportunity.
Then prices rise again until you do something else, and eventually you approach infrastructure scaling limits.
> If you want to decrease unemployment, you add tariffs for imports enabling more businesses to open domestically (i.e. tariffs effectively increase import costs).
Unless your domestic business requires imported goods to run its business. Then you've just increased costs for your domestic industry.
Portugal eases visa rules to tackle labour shortage
https://www.swissinfo.ch/eng/portugal-eases-visa-rules-to-ta...
> "Portugal's unemployment rate is at 5.7%, near a record low.
Employers' confederations have been asking for the immigration rules to be streamlined, pointing to an economic situation close to full employment"
The narrative of unemployment in Portugal driving dissatisfaction across the population is very tenuous in light of these latest developments and policies
They just to lower the wages. Hence why they are so in favor of opening the borders and human traffic situations like we had in Odemira with people from Nepal and neighboring countries living like literal slaves.
Even with visa deals for Portuguese speaking countries like Brasil, Angola and Mozambique just have that goal in mind, because it's not like we are getting scientists, doctors and engineers from those places...
This is very simplistic. You first start building local expertise/domestic businesses and then increase tariffs to wean off imports. Don't put the cart before the horse.
But blaming the poor young people priced out of their own country for not breeding, and just bringing third world immigrants with no living standards, is much easier than improving the living standards of your own population.
As long as you treat housing like a speculative investment that is squeezing the young to get a much larger return for the older owners, instead of treating it like shelter and a basic necessity for any family, why are you surprised young people don't breed anymore? The precarious job market isn't doing them any favors either.
Mass migration that puts more pressure on affordable housing and on the low-end jobs market is not the solution here. That breeds long term instability, segregation, distrust, and leads to political extremism. The solution is fixing housing, which nobody actually wants to do, because "housing prices must go UP", and the ruling asset owning class is making a killing from it.
Guarantee all parents affordable child care close to their work or home and many people settling for one kid will have two.
Sweden has that (and generous parental leave policies) and still has both low and declining birth rates.
Maybe a lower population -> lower housing prices -> easier to start a family will cause some sort of equilibrium.
That's not how real estate pricing works in the real world capitalism. Germany's population has been on decline for ~30 years due to demographics, yet housing has been getting more and more expensive, far outpacing wage growth in the last few decades, especially after the QE bull run from ~2013, so much so that owning your home is impossible for the average German.
Why is that you wonder? That's not how free market economy should work right? If now there is less demand for a good due to population shrinkage, then prices should come down right?
Well, that's because housing is not a good, it's a speculative investment asset, so as soon as people die and are not replaced, their free houses don't magically end up in the hands of those who would need them the most to buy at a discount, but end up on the "free market" being bough by existing rich home owners, investors, speculators and publicly listed real-estate conglomerates, using their existing assets and capital as leverage to buy even more houses for their investment portfolio. And governments and banks have ensure the policies to make sure this asset keeps going up, up, up.
When housing is an investment vehicle, then it can never be affordable, regardless of the population decline.
Like a commenter above said, which explains why home prices are not coming down despite population shrinkage: "people are not competing for houses, piles of money are. The bigger piles are winning."
The thing is – within that time frame it hasn't, actually. There have been some years with slight decreases, but those have been balanced by other years with increases, and compared to 1990 population is actually definitively slightly up (83.2 millions last year vs. 79.8 millions). Combined with a decreasing average household size (2.27 in 1991 vs 1.99 in 2019) and internal migration those things by themselves will probably generate enough pressure on the housing markets in and around the prospering parts of the country, even without any added financial shenanigans on top.
Fix those first so we can have a stable income and affordable housing from a young age, and then we'll take off the condoms.
Yeah and why is that? Is it because the young are now competing in a zero-sum capitalism squid-game economy, where good jobs are scarce and super stressful to get, requiring you to grind away the most fertile years of your life, and that lawmakers, banks, speculators, foreign buyers and NIMBY boomers have made owning a family home completely unaffordable for the young in most cities with jobs, giving young people too much anxiety about starting a family?
No, it must be porn, hookup dating apps, and all that damn avocado toast to blame. /s
>It has to allow immigration for its survival.
Here's a wild idea: Instead of imposing mass migration from the third world on everyone, you first try, <inhales_deeply>, MAKING HOUSING SUPER AFFORDABLE, and watch young people breed like rabbits?
I'm from a ex-communist country and during those days population was monstrously booming, because, even though young people could not afford modern luxuries like iPhones, cars, TVs, consoles, oranges, bananas, washing machines, Adidas shoes and tracksuits, fancy cafes, they didn't have to worry about the main things that give young people anxiety about starting a family today: jobs, housing and childcare. The state would provide families with all of those necessities. I'm not saying communism is the solution, it's not, but it turns out that most humans have very simple needs in life (we're still animals at the end of the day), and as long as the need for food(jobs), safe shelter(housing) and childcare are covered, they'll solve the need for sex on their own and breed like crazy without having any modern luxuries.
So why are we surprised Europeans aren't breeding anymore when those basic needs have been intentionally made very difficult for them to get in the name of profit, and instead we push third world immigration as a the solution to replace them?
Both are unlikely explanations given inverse GDP per capita and birth rate correlation: https://en.wikipedia.org/wiki/Income_and_fertility
More plausible explanation - many people don't like children and want to live for themselves but in poor/developing countries they have to 'invest' into children so they will take care of parents later. In countries with more or less stable economy people can rely on own investments or state pensions to not face extreme poverty after retirement.
Portugal used to even have a negative net migration rate and suffers a labor shortage. Right now, the net migration rate is positive and low at around 0.5. That's a good trend, but there is still too much emigration of skilled Portuguese people due to weak economy and structural problems.
The problem is not immigration, the problem is that wealth is distributed very unevenly. Average salaries are low in Portugal, many people have to do with very low salaries and few people in Lisbon and Porto make a lot of money. Although it luckily went down from nearly 0.4, the Gini index in Portugal is still relatively high for a Western European country at 0.33. This wealth disparity in combination with laws and politics that favor landlords, property speculation, and building hotels instead of apartment buildings lead to the housing crisis.
We should vastly reduce cattle numbers globally actually.
I have to call Grade-A bullshit on your comment.
At best, nationalist political movements take advantage of sticking points with their highly opportunistic, ideologically incoherent and empty promises hoping to buy arguments while pinning the blame of everything on whoever is the incumbent at the time.
That this doesn't happen, could be because there is a lack of capital, but to me the actual problem seems to be over-regulation and especially an over protection of tenants. If, as the article states, foreigners buy multiple apartments, and then let them sit empty, it's because they are afraid of renting them out. Especially with elderly tenants, you can't increase the rent, and you can't terminate the contract. Once you start looking around for a house to buy, you'll almost certainly bump into some homes costing only a tenth of similar houses in the neighborhood, and any Portuguese knows what that means: there is an elderly tenant, paying only 20 euros of rent per month, and your only hope of ever getting them to leave, is wait till they pass away (and even then, their children might try to continue the lease at the same conditions).
> I live in Lisbon as a foreigner for more than 12 years now. We pay a rent for a small flat that used to be very expensive … Rents in the city have skyrocketed, we'd have a hard time finding anything
I know this comment won’t be received well, but aren’t you describing gentrification & how you participated (maybe unknowingly) in what has caused prices to skyrocket. And you’re now complaining because someone even more rich than you has caused prices to exceed your means, just like you did to a local person when you moved in as a foreigner.
People move around. Some cities grow, others shrink. New jobs get created, old jobs disappear. Some housing gets more expensive, some housing gets cheaper. Some cities get wealthier, others get poorer.
We'd still be living in caves if our goal was to forever keep all cities and towns the exact same way they've always been. Which is basically the goal when people criticize "gentrification".
I also do not understand how the second sentence and the last aren't a direct contradiction of each other.
A country should focus on its citizens first, foreigners second.
Then again EU is an unique experiment as it is.
What’s propping all of these property prices up? Supply and demand rules don’t seem to apply at all. You might have thousands of empty apartments in a city yet the price only keeps going up.
Everything is broken, but housing is particularly broken.
I’m not even sure if this Globalization was worth all that much. It’s made some people very wealthy, some people well-off, but its also made lots of people very poor and very angry.
I’m okay with living in a world with fewer millionaires but also fewer people sleeping on the streets.
It was an interesting argument that globalization was an American security development not an international economic development.
Did you mean billionaires? Because a million isn't what it used to be...
Money printing, first and foremost
The alternative of a mineral backed currency that can’t adjust with population levels and is inherently deflationary we know to be far worse.
Smaller cities and towns are cheap. I've seen government auctions selling apartments for under €5000 which nobody wants. Why? Because people are moving to larger cities. People want opportunities, and the idea of working in some chicken factory (which may have been a perfectly respected career for our parents) is not appealing for the current generation. And the problem in these small towns, is the chicken factory is really the only career prospect you have, so people move elsewhere.
Of course there are rich foreigners buying apartments as investments and renting them on Airbnb, but that's a very small percentage of the housing market. And even if they rented them normally, they'd still be asking for prices that are unaffordable for the average person. I know that because that was me, I emigrated here and bought a luxury apartment and lived in it for 7 years (paying taxes) and now want to rent it out as I moved outside the city.
Unless I rent or sell it for much lower than the market rate, even on the lower end it's still too expensive for the average person. If I sell it, it's probably just going to be poached by someone who will use it as an investment and put it on Airbnb.
My city is building a lot of new developments, but space is limited as young people want to live close to the city center, not somewhere 30 minutes drive away. That is driving up the average price, so you end up with studio apartments costing upwards of €4000/m2, which you need to earn at least €2500/mo to afford, which is well above the average salary. With rising inflation the problem isn't so much people can't afford the mortgage payments (which are slightly lower than renting), but they can't afford to save the 15% needed for a deposit.
https://www.architectmagazine.com/practice/how-to-fight-weal...
I firmly believe that most investors are chasing capital gains as yields at current prices (even with extortionate rents) are mostly a joke. It's bad enough that some speculators don't even bother renting out their property.
A widespread residential property market crash would be painful but looks like the most likely outcome and solution. I'm hopeful that as interest rates rise capital gains will diminish, disappear, or even go backwards. Indications are that this is already underway in many places.
>even here in Cascais you see lots of unbuilt land
We have no intention of becoming a concrete jungle.
>Their job protection mentality needs to change towards a more dynamic job creation mentality
No thank you, please just keep your opinions to yourself, and honestly find somewhere else to go.
>low crime
Wrong, there's more and more crime, specially in Lisbon, Cascais, Sintra, and it's increasing in Porto and Braga too.
Specially on neighboorhoods with lots of "youngsters".
I don't think talent is moving in - at least in tech, there are lots of foreign companies opening offices and hiring local talent.
And for number two, it seems you're part of the problem the article mentions. You comain about how long it takes to work in a property you're INVESTINF in - but Portuguese people are struggling to afford property to LIVE in. That's the crisis, rich people investing in property makes it more expensive for poor people to own it.
I lived in Lisbon for a while. After expenses and a bedroom rent, my whole salary was spent, for a bedroom in a apartment shared with 3 other people. Many of my work colleagues lived in the peripheries and took more than 45 minutes to get to work, or more than 1.5 hours of daily commute. That's what the majority of Lisboets are being forced to, such that tourists and investors can have their happy lives.
This type of investment is causing lots of problems, and society should prioritize housing as a place to live in, not as a business to invest in. There are lots of other ventures for investors that don't ruin people's lives.
You'd feel at home in LA.
I've seen this trend here for at least a decade now. I know some people who say that the construction of these luxury apartments is a sign that the economy is recovering, but I remain skeptical. These places are the least lived-in looking apartment complexes I've ever seen in my life. There's one down the street from where I live that was completed around 5 years ago, and I would bet good money that most of it is vacant. I rarely see people going to and from it, besides the occasional few who visit the burger bar right in front of it. Too many of the balconies look sterile.
I don't know why so many of these are being built outside of LA proper, but I have a theory for why there are these massive complexes being built; the rich have spoiled children they no longer want to deal with so mommy and daddy pay for these apartments to house them. I used to deliver food to these places and, without fail, I was delivering to men and women who appeared way too young to afford such places.
This actually makes sense in terms of supply and demand but more interestingly it's because people tend to "upgrade" when they move this then frees up space at the lower end of the market.
Same idea as buying a car - most people won't buy brand new because of the cost.
If this was true, everyone would buy REITs until it wasn't
A planet full of empty "luxury apartments" and most of us homeless?
There will soon come a time where revolt is no longer possible.
I'm a bit conflicted on this. I definitely see what you're saying (and often repeat it myself).
But it should be noted: property is simply an asset like any other. If there's easy and outsized returns to be had, the demand for this asset would increase, pushing up the price to the point that the returns on the asset are in line with returns of other assets which have similar risk/effort profiles.
To say that one can make money 'doing nothing' owning any asset (that has a positive return) is true. But that's not per se some kind of economic or political problem, it's a normal feature.
Of course to absolutely do nothing and still earn enough to live off of, means you must have earned enough money to purchase a large amount of assets. Supposing rental income of 5%, and supposing rent is 25% of someone's wages, and supposing a 20% tax rate on your returns, you'd essentially need to purchase assets worth 100 times what someone spends on rent.
(ex: if you need 40k to live on, spend 25% or 10k on rent, you'd need 100x that or 1 million returning a 5% return that's taxed 20%, leaving 40k in net income.)
Amassing 100x your rent is no easy feat, and in fact it means that someway, somehow, you've provided 100x your rent in value, without spending a penny of it, and saved it all, then poured it into an asset (incurring risk and requiring some level of commercial effort), and then, yes, you could start to approach doing 'nothing'.
For many that's a life's worth of work. Buying such assets is really no different from putting in an equivalent amount of money into a retirement fund, and that fund in turn buying assets like companies. Whether it's companies that buy and rent out cars, or real estate, or produce and sell, the people owning these enterprises through their retirement fund are 'doing nothing' while others are working.
But the important part to note is that anyone has access to this system. Every person can, proportionate to their income (based on their economic value to society) buy assets.
In fact, I'm able with a click of the button not to just buy a part of a in Portugal, but rather the biggest and most successful company on the planet: Apple. I can buy a small part in it, and profit when many of the planet's smartest and most educated people build & sell some of the most cutting edge consumer technology day in day out. Whilst doing: nothing.
So I don't really see a structural problem with this system. What is problematic is the stuff around it. For example, in some countries real estate goes untaxed and is subsidised, and is bailed out when things go bad. Subsidised private profits, and socialised public losses. It's unfair and a failure of markets and governance. Another example is that swathes of people indeed inherit value to the point they've never done any contribution to the world to get into a position to 'do nothing', rather than work to retire off of the fruits of their labour, they could in effect retire from work before ever even starting. This is where the system breaks down and must be balanced, again by e.g. taxing inheritance and balancing things out.
Finally, markets work when price & profit signals can balance supply & demand. If there is a shortage of bread, demand outpaces supply, the price rises, and overnight new bakeries will pop up bringing down the price. In real estate high prices often do not trigger new supply in many countries, either due to geographical limitations (e.g. the mountains of Taiwan limiting buildable space, or simply the fact physically there is a limited area we consider to be 'downtown new york' for example), but more often due to political limitations (NIMBYism). Because in real estate markets in many areas do not naturally solve the problem, government intervention is needed to ensure more equitable and fair outcomes moreso than in other types of markets. Again here I see a role for stronger taxation on outsized profits and some income support for groups otherwised pushed out of neighbourhoods.
> So I don't really see a structural problem with this system.
This is the disconnect. Residential real estate is fundamentally different than owning stock, in that people need a place to live and building residential construction is much more difficult than issuing stock. When wealthy people from abroad buy multiple apartment buildings in desirable cities, and then proceed to keep living elsewhere (probably in a different residence in another desirable city) they create a problem that in no way resembles the result of buying stock in a company.
I agree that buying housing stock and leaving it empty is an issue. But they're not the cause of all the housing issues, in most cases they're a tiny fraction of the problem. Most cities have vacancy rates of just a couple percent. Given the average person in a big city moves every 4 years and a home is empty for 1 month inbetween tenants/owners, you'd already have 2% permanent vacancy rates. Most cities have vacancy rates of 3-4%, Lisbon has 5%. It's definitely stupid to allow high vacancy rates and most cities have laws against them (here in Amsterdam you get fined for leaving your house empty), but even shaving off 1 or 2% off the vacancy rates isn't solving the housing problem. It very often features in newspaper articles because it's a clickbait story: rich person buys home and leaves it empty. Again, it's stupid and we should expand laws against it, but solving it still keeps 99% of the issues with housing which have nothing to do with this phenomenon.
And this phenomenon is limited precisely because housing is a market, and from a financial perspective it's a stupid idea to buy an asset and forgo its use or its returns.
Beyond that, nothing that I noted about assets has a disconnect because everyone else owning housing simply rents it out at the market rate, which is both the most expensive but also the cheapest marginal price to provide an extra unit of housing, which is the same for any asset and there's no real disconnect here.
Progressively tax the shit out of each subsequent property owned. Prevent foreign/corporate ownership of property outside of short stay, hotel/motel type accommodation.
Make shelter an extremely unattractive asset to own.
Unfortunately, many politicians across the world are also landlords.
I don't think "basic need" is a good argument, as many other things are basic needs but function perfectly fine in a market-based system. This perspective sounds moral, but proposes nothing to actually resolve the problem (other than to advantage a particular section of the population at the expense of another - namely, people who would like to be homeowners). I note that most such proposals make no allowances for people who would like to rent - because they don't actually care about anyone other than themselves; they want to own a home, ideally at a low price, in a good location, with good services, on a large block.
Food is also a basic need, but does not get any of the attention because it is a functioning market.
In many places, property is not a very functional market, as suppliers (developers) are unable to respond to demand thanks to regulations/zoning.
If bread and milk were being hoarded by speculators (not some random luxury like truffles) you'd be hearing exactly the same discussion.
The point is that rich people with vested interests are stacking the deck against newcomers.
>market-based system
The free market does not exist. Property markets around the world are being heavily distorted through favourable tax treatment and speculators.
>other than to advantage a particular section of the population at the expense of another
This is business as usual, except that the advantage almost always flows the other way.
We'll see how that plays out in the coming year.
Lots of revolutions in history have been triggered by unaffordability of food, and step 1 of the classic formula for keeping people happy is food ("Bread and circuses")
Why not
Quite honestly, apart from the generally increasing gap between rich and the poor, one big problem in societies nowadays is that you can simply get richer and richer just from owning property. For example, if you own three ordinary apartments in Lisbon, you can live in one of them and easily make a good living by renting out the other two as holiday apartments. Because cleaning services, guys who do repairs, etc., are cheap in Portugal, this involves almost no work. Moreover, the net worth of your property will continually increase while you do (almost) nothing. I'm not saying I blame these people, I would do the same if I had the opportunity, but this is a huge structural problem in my opinion.